Reports Diluted FFO Per Share of $0.93
BOSTON, April 23 /PRNewswire-FirstCall/ -- Boston Properties, Inc.
(NYSE: BXP) today reported results for the first quarter ended March 31, 2002.
Funds from Operations (FFO) for the quarter ended March 31, 2002,
including a $4.3 million write-down of securities, were $88.9 million, or
$0.98 per share basic and $0.93 per share diluted before an accounting charge
related to the application of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" and after an adjustment for early
surrender lease payments received.
FFO for the first quarter of 2002 compares to FFO of $79.2 million, or
$0.89 per share basic and $0.85 per share diluted for the quarter ended March
31, 2001. This represents a 9.4% quarter to quarter increase in diluted FFO
per share. The weighted average number of basic and diluted shares
outstanding totaled 90,932,427 and 105,767,653, respectively, for the quarter
ended March 31, 2002 and 88,687,900 and 104,160,181, respectively, for the
same quarter last year.
Income before the charge related to SFAS No. 133, gain on sale of real
estate, discontinued operations and cumulative effect of a change in
accounting principle and including a $4.3 million write-down of securities
totaled $49.2 million or $0.53 per share diluted in the first quarter of 2002
as compared to $49.6 million or $0.54 per share diluted for the same period in
2001.
The reported results are unaudited and there can be no assurance that the
results will not vary from the final information for the quarter ended
March 31, 2002. In the opinion of management, all adjustments considered
necessary for a fair presentation of these reported results have been made.
As of March 31, 2002, the Company's portfolio consisted of 144 properties
comprising more than 41.2 million square feet, including 10 properties under
development totaling 4.3 million square feet. The overall occupancy rate for
the properties in service as of March 31, 2002 was 95.1 %.
Additional highlights of the first quarter include:
-- The completion of the One Discovery Square development project, a
180,052 square foot office building in Reston, Virginia. This project
is 100% leased.
-- The completion of the 5 Times Square development project, a 1,099,154
square foot office building in New York City. This project is
approximately 98% leased.
-- The completion of the ITT Educational Services development project, a
32,000 square foot building in Springfield, Virginia. This project is
100% leased.
-- The closing on March 8, 2002 of construction financing totaling
$24.0 million collateralized by the Shaws Supermarket development
project at the Prudential Center in Boston, Massachusetts. Such
financing bears interest at a rate of LIBOR + 1.40% and matures in
September 2003.
-- The disposition on March 4, 2002 of Fullerton Square, 7600 Boston
Boulevard, 7700 Boston Boulevard and 7702 Boston Boulevard, consisting
of five office/technical properties totaling 374,680 square feet in
Springfield, Virginia for a net gain of approximately $20.7 million, of
which $13.5 million has been deferred.
-- The write-down of our investment in the securities of Captivate
Network, Inc. totaling $4.3 million.
-- Arthur Andersen LLP has a lease for 620,947 square feet at Times Square
Tower. Times Square Tower is a 1.2 million square foot office
property that is expected to be completed during 2004. Because of our
uncertainty over Arthur Andersen LLP's ultimate space needs, we have
begun discussions with them about options ranging from reducing the
size of the leased premises to termination of the lease. Meanwhile, we
continue to actively market space in the building and are encouraged by
the level of interest.
-- The GSA preleased 100% of New Dominion Technology Park, Building Two, a
257,400 square foot office building to be developed in Herndon,
Virginia. The building is expected to open in the second quarter of
2004.
-- Finnegan Henderson Farabow Garret & Dunner, LLP signed a 251,337 square
foot lease to occupy 47% of 901 New York Avenue. Construction will
commence in the third quarter of 2002 for occupancy at the end of 2004.
This property is owned in partnership with the New York State Common
Retirement Fund.
Boston Properties will conduct a conference call tomorrow, April 24,
2002 at 10 AM (Eastern Time) to discuss the results of this year's
first quarter. The number to call for this interactive teleconference
is (888)-806-9467. A replay of the conference call will be available
through May 1, 2002 by dialing (888) 266-2086 and entering the passcode
5926554.
Additionally, a copy of Boston Properties' first quarter 2002
"Supplemental Operating and Financial Data" will be available on the Investor
section of the company's website at http://www.bostonproperties.com . These
materials are also available by contacting Investor Relations at 617-236-3300
or by written request to:
Investor Relations
Boston Properties, Inc.
111 Huntington Avenue
Boston, MA 02199
Boston Properties is a fully integrated, self-administered and self-
managed real estate investment trust that develops, redevelops, acquires,
manages, operates and owns a diverse portfolio of Class A office, industrial
and hotel properties. The Company is one of the largest owners and developers
of Class A office properties in the United States, concentrated in four core
markets - Boston, Midtown Manhattan, Washington, DC and San Francisco.
This press release contains forward-looking statements within the meaning
of the Federal securities laws. You should exercise caution in interpreting
and relying on forward-looking statements because they involve known and
unknown risks, uncertainties and other factors which are, in some cases,
beyond Boston Properties' control and could materially affect actual results,
performance or achievements. These factors include, without limitation, the
ability to enter into new leases or renew leases on favorable terms,
dependence on tenants' financial condition, the uncertainties of real estate
development and acquisition activity, the ability to effectively integrate
acquisitions, the costs and availability of financing, the effects of local
economic and market conditions, regulatory changes and other risks and
uncertainties detailed from time to time in the Company's filings with the
Securities and Exchange Commission.
BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended
March 31,
2002 2001
(unaudited and in thousands,
except for per share amounts)
Revenue
Rental:
Base rent $229,106 $184,768
Recoveries from tenants 27,712 25,891
Parking and other 12,096 13,746
Total rental revenue 268,914 224,405
Development and management services 4,134 3,397
Interest and other 1,272 4,444
Total revenue 274,320 232,246
Expenses
Operating 85,089 70,070
General and administrative 11,069 9,950
Interest 63,787 47,853
Depreciation and amortization 42,944 34,541
Loss on investments in securities 4,297 -
Total expenses 207,186 162,414
Income before net derivative losses,
minority interests, income from
unconsolidated joint ventures,
minority interest in Operating
Partnership, gain on sale of real
estate, discontinued operations
cumulative effect of a change in
accounting principle and preferred
dividend 67,134 69,832
Net derivative losses (303) (3,055)
Minority interests in property partnerships 471 (255)
Income from unconsolidated joint ventures 1,682 1,127
Income before minority interest in
Operating Partnership, gain on sale
of real estate, discontinued
operations, cumulative effect of a
change in accounting principle and
preferred dividend 68,984 67,649
Minority interest in Operating
Partnership (18,386) (18,878)
Income before gain on sale,
discontinued operations, cumulative
effect of a change in accounting
principle and preferred dividend 50,598 48,771
Gain on sale of real estate, net of
minority interest - 4,654
Income before discontinued
operations, cumulative effect of a
change in accounting principle
and preferred dividend 50,598 53,425
Discontinued Operations:
Income from discontinued operations,
net of minority interest 570 592
Gain on sales of real estate from
discontinued operations, net of
minority interest 5,840 -
Income before cumulative effect of a
change in accounting principle and
preferred dividend 57,008 54,017
Cumulative effect of a change in
accounting principle, net of
minority interest - (6,767)
Net income before preferred dividend 57,008 47,250
Preferred dividend (1,643) (1,643)
Net income available to common
shareholders $55,365 $45,607
Basic earnings per share:
Income before discontinued
operations and cumulative effect of
a change in accounting principle $0.54 $0.58
Discontinued operations 0.07 0.01
Cumulative effect of a change in
accounting principle - (0.08)
Net income available to common
shareholders $0.61 $0.51
Weighted average number of common
shares outstanding 90,932 88,688
Diluted earnings per share:
Income before discontinued
operations and cumulative effect of
a change in accounting principle $0.53 $0.57
Discontinued operations 0.07 -
Cumulative effect of a change in
accounting principle - (0.07)
Net income available to common
shareholders $0.60 $0.50
Weighted average number of common
and common equivalent shares outstanding 92,783 91,171
BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2002 2001
(in thousands, except for share amounts)
(unaudited)
ASSETS
Real estate $6,646,802 $6,140,021
Development in progress 672,901 1,107,835
Land held for future development 206,098 182,672
Real estate held for sale 13,907 27,378
Less: accumulated depreciation (755,156) (719,854)
Total real estate 6,784,552 6,738,052
Cash and cash equivalents 71,007 98,067
Escrows 45,216 23,000
Investments in securities - 4,297
Tenant and other receivables 36,846 43,546
Accrued rental income 133,885 119,494
Deferred charges, net 101,580 107,573
Prepaid expenses and other assets 30,235 20,996
Investments in unconsolidated joint
ventures 98,071 98,485
Total assets $7,301,392 $7,253,510
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities:
Mortgage notes and bonds payable $4,361,233 $4,314,942
Accounts payable and accrued
expenses 56,125 81,108
Dividends and distributions
payable 79,985 79,561
Interest rate contracts 8,635 11,147
Accrued interest payable 15,032 9,080
Other liabilities 75,465 58,859
Total liabilities 4,596,475 4,554,697
Commitments and contingencies - -
Minority interests 829,687 844,740
Series A Convertible Redeemable
Preferred Stock, liquidation
preference $50.00 per share,
2,000,000 shares issued
and outstanding 100,000 100,000
Stockholders' equity:
Excess stock, $.01 par value,
150,000,000 shares
authorized, none issued or
outstanding - -
Common stock, $.01 par value,
250,000,000 shares
authorized, 91,137,874 and
90,780,591 issued and
outstanding in 2002 and 2001,
respectively 911 908
Additional paid-in capital 1,809,836 1,789,521
Dividends in excess of earnings (15,084) (17,669)
Treasury Common Stock, at cost (2,722) (2,722)
Unearned compensation (3,843) (2,097)
Accumulated other comprehensive loss (13,868) (13,868)
Total stockholders' equity 1,775,230 1,754,073
Total liabilities and
stockholders' equity $7,301,392 $7,253,510
BOSTON PROPERTIES, INC.
FUNDS FROM OPERATIONS
(unaudited and in thousands)
Three months ended
March 31,
2002 2001
Income before net derivative losses
(SFAS No. 133), minority interests,
income from unconsolidated joint
ventures, minority interests in
Operating Partnership, gain
on sales of real estate,
discontinued operations,
cumulative effect of a change
in accounting principle and
preferred dividend $67,134 $69,832
Add:
Real estate depreciation and
amortization 44,499 35,557
Income from discontinued operations 697 738
Income from unconsolidated joint ventures 1,682 1,127
Less:
Net derivative losses (SFAS No. 133) (303) (3,055)
Minority property partnerships'
share of funds from operations (719) (303)
Preferred dividends and
distributions (8,400) (8,221)
Funds from operations $104,590 $95,675
Add (subtract):
Net derivative losses (SFAS No. 133) 303 3,055
Early surrender lease adjustment 3,927 (A) -
Funds from operations before net
derivative losses (SFAS No. 133)
and after early surrender lease
adjustment $108,820 $98,730
Funds from operations available to
common shareholders before net
derivative losses (SFAS No. 133)
and after early surrender lease
adjustment $88,929 $79,201
Weighted average shares outstanding -
basic 90,932 88,688
FFO per share basic before net
derivative losses (SFAS No. 133)
and after early surrender
adjustment $0.98 $0.89
FFO per share basic after net
derivative losses (SFAS No. 133)
and before early surrender lease
adjustment $0.94 $0.87
Weighted average shares outstanding -
diluted 105,768 104,160
FFO per share diluted before net
derivative losses (SFAS No. 133)
and after early surrender lease
adjustment $0.93 $0.85
FFO per share diluted after net
derivative losses (SFAS No. 133)
and before early surrender lease
adjustment $0.90 $0.83
(A) Represents cash received under contractual obligations.
BOSTON PROPERTIES, INC
PORTFOLIO OCCUPANCY
Occupancy by Location
March 31, 2002 December 31, 2001
Greater Boston 92.8% 92.3%
Greater Washington, D.C. 97.2% 97.8%
Midtown Manhattan 99.2% 99.8%
Baltimore, MD 98.2% 99.2%
Richmond, VA 94.4% 98.4%
Princeton/East Brunswick, NJ 89.4% 88.6%
Greater San Francisco 92.2% 93.5%
Bucks County, PA 100.0% 100.0%
Total Portfolio 95.1% 95.3%
Occupancy by Type
March 31, 2002 December 31, 2001
Class A Office Portfolio 95.0% 95.4%
Office/Technical Portfolio 97.0% 97.9%
Industrial Portfolio 89.9% 87.3%
Total Portfolio 95.1% 95.3%
SOURCE Boston Properties, Inc.
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Related links:
http://www.bostonproperties.com
CONTACT:
Douglas T. Linde, Chief Financial Officer of
Boston Properties, Inc., +1-617-236-3300, or General, Marilynn
Meek, +1-212-445-8431, or Analysts, Claire Koeneman,
+1-617-520-7004, or Media, Judith Sylk-Siegel, +1-212-445-8431,
all of FRB Weber Shandwick
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