Franklin Street Properties Corp.

Good day and welcome to the Franklin Street Properties CARP Q4 2020 and year-end earnings call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Scott Carter, General Counsel. Please go ahead.

Good morning and welcome to the Franklin Street Properties fourth quarter and full year 2020 earnings call. Joining me this morning are George Carter, our Chief Executive Officer, John DeMeritt, our Chief Financial Officer, Jeff Carter, our President and Chief Investment Officer, and John Donahue, President of FSP Property Management. Also joining me this morning are Toby Daly and Will Friend, both Executive Vice Presidents of FSP Property Management. Please note that various remarks that we may make about future expectations, plans, and prospects for the company may constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the risk factor section of our annual report on Form 10-K for the year ended December 31, 2020, which is on file with the SEC. These forward-looking statements represent the company's expectations only as of today, February 17th, 2021. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so. Any forward-looking statements should not be relied upon as representing the company's estimates or views as of any date subsequent to today. At times during this call, we may refer to funds from operations or FFO, reconciliations of FFO, and other non-GAAP financial measures. The GAAP net income are contained in yesterday's press release, which is available in the investor relations section of our website at www.fspreit.com. Now I'll turn the call over to John DeMeritt. John?

Thank you, Scott, and good morning, everyone. I'm going to give an overview of our fourth quarter and year-end results. Afterward, I'll pass the call to George for his comments. As a reminder, our comments today will refer to our earnings release supplemental package in the 10-K, which, as Scott just mentioned, can be found on our website and is on file with the SEC. We reported funds from operations or FFO of $17.5 million, or $0.16 per share, for the fourth quarter of 2020. and $79.4 million, or $0.74, for the year ended December 31, 2020. During the fourth quarter, we worked with tenants that were impacted by the pandemic and had a significant write-off of one large tenant that filed for bankruptcy in late December that resulted in a $3.1 million charge against our revenue. As part of making decisions on write-offs, we determined whether a lease is collectible or not If we determine it's not collectible, we write off the receivables and don't report any current rents unless they're paid in cash. So part of the loss we wrote off is from receivables, which is more of a one-time charge, and part of the loss are current rents that we didn't collect. These write-offs reduce revenue on the income statement. During Q4, we had write-offs and lost rent of about 3.1 million, which is primarily from a tenant bankruptcy that I noted. And on a year-to-date basis, the total write-offs were about $3.8 million, or about 1.5% of our annual rental income. Going forward, the amount of lost rents from tenants we wrote off would be reduced by any cash rents we received from them. We also reached agreements with a number of tenants on rent deferrals using lease amendments, modifications, and other tenant agreements. The total of rents deferred by us during Q4 were about $300,000, and for the year total, about $1.75 million. These agreements generally result in us being repaid or made whole, although as part of the $1.75 million, we did incur about $200,000 of gap and FFO impact from them this year. We're working with other tenants that are having issues and will provide updates periodically like we have here. Turning to our balance sheet at December 31st, 20, we had $923.5 million of unsecured debt, including $3.5 million drawn on our lot of credit. In December, we sold a property in North Carolina for $89.7 million and applied $87.3 million of the proceeds against debt. We'll be providing more color on that transaction later. With the proceeds from the sale, we applied $50 million against our $150 million term loan that matures in November, and the remainder went against the drawn balance of our line of credit. At year end, between cash on hand and availability on our line, we had total liquidity of about $601 million. We disclosed some ratios in our supplemental filing that were impacted by the $3.1 million write-off we incurred in late December. Our net debt to EBITDA ratio was impacted because the charge reduces EBITDA, and we then annualized that for the fourth quarter for this measure. Excluding this charge, our net debt to EBITDA ratio would have been 7.8 compared to 8.5 at September 30th, and that decrease would be primarily a result of the debt reduction. Our interest in debt service coverage ratios were also impacted and would have been 3.26 times. We disclose our calculations of ratios in our supplemental filing, and the calculations I'm referring to are in the footnotes on pages 4 and 10, in case you're interested in looking at them. As a reminder, all of our debt is unsecured, and we have no debt maturities until November, when $155 million of term loans will be due. Our debt is at fixed rates, other than the $3.5 million on the line, which is at a floating rate. With that, I'll turn the call over to George. George?