Reports Diluted FFO Per Share Of $0.86 Before Accounting Charge Related To
SFAS No. 133 Of ($0.04) Per Share
BOSTON, July 18 /PRNewswire/ -- Boston Properties, Inc. (NYSE: BXP) today
reported results for the second quarter ended June 30, 2001.
Funds from Operations (FFO) for the quarter ended June 30, 2001 were
$81.4 million, or $0.90 per share basic and $0.86 per share diluted before an
accounting charge of approximately ($0.04) per share on a diluted basis
related to the application of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" for the quarter ended June 30, 2001.
FFO for the quarter includes a charge of $6.5 million or $0.05 per share
resulting from the write-down of the Company's equity investments ("Technology
Investment") in Allied Riser (Nasdaq: ARCC) and Cypress Communications
(Nasdaq: CYCO). After this write-down, the Company's only remaining
Technology Investment is a $4.3 million investment in Captivate Network Inc.,
a privately held company.
FFO for the second quarter of 2001 compares to FFO of $59.3 million, or
$0.87 per share basic and $0.83 per share diluted for the quarter ended June
30, 2000. Excluding the Technology Investment write-down, and the charges
related to SFAS 133, this represents a 9.6% year to year increase in diluted
FFO per share. The weighted average number of basic and diluted shares
outstanding totaled 89,989,616 and 105,259,081, respectively, for the quarter
ended June 30, 2001 and 67,991,227 and 82,582,547, respectively, for the same
quarter last year.
Net income before the gain on sale of the Maryland industrial buildings
and the charges related to SFAS 133, totaled $51.0 million or $0.55 per share
diluted in the second quarter of 2001 as compared to $34.6 million or $0.50
per share diluted for the same period in 2000. Excluding the Technology
Investment write-down, the gain on sale of the Maryland industrial buildings
and the charges related to SFAS 133, this represents a 22.0% per share
increase in net income year over year.
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 June
30, 2001. In the opinion of management, all adjustments considered necessary
for a fair presentation of these reported results have been made.
As of June 30, 2001, the Company's portfolio consisted of 145 properties
comprising more than 40.6 million square feet, including 13 properties under
development totaling 5.1 million square feet. The overall occupancy rate for
the properties in service as of June 30, 2001 was 97.0%.
Additional highlights of the second quarter include:
-- The closing of the acquisition of the approximately 1.6 million square
foot office tower in New York City known as Citigroup Center on April
25, 2001. The acquisition, totaling approximately $755 million, was
funded through new mortgage financing totaling $525 million (bearing
interest at a fixed rate of 7.1855% and maturing on May 11, 2011) and
equity contributions of $195 million from Boston Properties and $35
million from the Company's joint venture partner.
-- The repayment of mortgage financing totaling $5.8 million
collateralized by Newport Office Park on May 24, 2001.
-- The closing of construction financing totaling $493.5 million
collateralized by the Times Square Tower development project in Times
Square, New York on May 29, 2001. Such financing matures on November
29, 2004 and bears interest at a rate of Eurodollar + 1.95%.
-- The disposition of Maryland Industrial Park, Buildings Two and Three,
consisting of two industrial buildings totaling approximately 183,945
square feet, on June 29, 2001 for net proceeds of approximately $7.6
million. The property was sold using a like-kind exchange technique
with the acquisition of a parcel of land known as 4th Avenue in
Waltham, Massachusetts in the 1st quarter of 2001.
-- The completion of two development projects consisting of an
approximately 120,000 square foot office building in the Andover Office
Park Development in Andover, Massachusetts and an approximately 178,216
square foot office building known as 2600 Tower Oaks Boulevard in
Rockville, Maryland. These projects are 76% and 71% leased,
respectively.
Boston Properties will conduct a conference call tomorrow, July 19, 2001
at 10:00 AM (Eastern Time) to discuss the results of this year's second
quarter. The number to call for this interactive teleconference is
(888) 413-4411. A replay of the conference call will be available through
July 26, 2001 by dialing (888) 266-2086 and entering the passcode 5343644.
Additionally, a copy of Boston Properties' second quarter 2001
"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
800 Boylston Street
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 Six months ended
June 30, June 30,
2001 2000 2001 2000
(unaudited and in thousands, except for
per share amounts)
Revenue
Rental:
Base rent $208,071 $177,953 $393,762 $348,290
Recoveries from tenants 27,266 22,734 53,444 46,070
Parking and other 13,533 12,289 27,279 25,297
Total rental revenue 248,870 212,976 474,485 419,657
Development and management
services 3,110 2,876 6,507 5,739
Interest and other 4,289 1,407 8,733 2,117
Total revenue 256,269 217,259 489,725 427,513
Expenses
Operating 76,865 64,035 147,208 129,212
General and administrative 9,880 8,589 19,830 15,997
Interest 55,870 56,243 103,723 111,458
Depreciation and amortization 36,675 32,395 71,415 64,626
Loss on investments in
securities 6,500 - 6,500 -
Total expenses 185,790 161,262 348,676 321,293
Income before net derivative
losses, minority interests and
income from unconsolidated joint
ventures 70,479 55,997 141,049 106,220
Net derivative losses (4,733) - (7,788) -
Minority interests in property
partnerships 510 (240) 255 (436)
Income from unconsolidated joint
ventures 717 662 1,844 807
Income before minority interest
in Operating Partnership 66,973 56,419 135,360 106,591
Minority interest in Operating
Partnership (18,138) (20,193) (37,162) (37,745)
Income before gain on sale of
real estate 48,835 36,226 98,198 68,846
Gain on sale of real estate, net 1,851 297 6,505 297
Income before cumulative effect
of a change in accounting
principle 50,686 36,523 104,703 69,143
Cumulative effect of a change in
accounting principle, net of
minority interest - - (6,767) -
Net income before preferred
dividend 50,686 36,523 97,936 69,143
Preferred dividend (1,648) (1,643) (3,291) (3,286)
Net income available to common
shareholders $49,038 $34,880 $94,645 $65,857
Basic earnings per share:
Income before gain on sale of
real estate and cumulative
effect of a change in
accounting principle $0.52 $0.50 $1.06 $0.97
Gain on sale of real estate, net
of minority interest 0.02 0.01 0.07 -
Cumulative effect of a change in
accounting principle, net of
minority interest - - (0.07) -
Net income available to common
shareholders $0.54 $0.51 $1.06 $0.97
Weighted average number of
common shares outstanding 89,990 67,991 89,365 67,973
Diluted earnings per share:
Income before gain on sale of
real estate and cumulative
effect of a change in
accounting principle $0.51 $0.50 $1.03 $0.96
Gain on sale of real estate, net
of minority interest 0.02 - 0.07 -
Cumulative effect of a change in
accounting principle, net of
minority interest - - (0.07) -
Net income available to common
shareholders $0.53 $0.50 $1.03 $0.96
Weighted average number of
common and common
equivalent shares outstanding 92,274 69,582 91,739 69,157
BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2001 2000
(unaudited)
(in thousands, except for share
amounts)
ASSETS
Real estate: $7,165,977 $6,112,779
Less: accumulated depreciation (647,881) (586,719)
Total real estate 6,518,096 5,526,060
Cash and cash equivalents 165,764 280,957
Escrows 31,577 85,561
Investments in securities 4,297 7,012
Tenant and other receivables 26,337 26,852
Accrued rental income 104,304 91,684
Deferred charges, net 100,804 77,319
Prepaid expenses and other assets 47,962 41,154
Investments in unconsolidated joint
ventures 94,155 89,871
Total assets $7,093,296 $6,226,470
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities:
Mortgage notes and bonds payable $4,177,670 $3,414,891
Accounts payable and accrued
expenses 42,203 57,338
Dividends and distributions
payable 78,241 71,274
Interest rate contracts 19,045 -
Accrued interest payable 12,067 5,599
Other liabilities 72,410 51,926
Total liabilities 4,401,636 3,601,028
Commitments and contingencies - -
Minority interests 851,868 877,715
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, 90,350,510 and
86,630,089 issued and
outstanding in 2001 and 2000,
respectively 904 866
Additional paid-in capital 1,774,335 1,673,349
Dividends in excess of earnings (19,193) (13,895)
Unearned compensation (2,386) (848)
Accumulated other comprehensive
loss (13,868) (11,745)
Total stockholders' equity 1,739,792 1,647,727
Total liabilities and
stockholders' equity $7,093,296 $6,226,470
BOSTON PROPERTIES, INC.
FUNDS FROM OPERATIONS
(unaudited and in thousands)
Three months ended Six months ended
June 30, June 30,
2001 2000 2001 2000
Income before net derivative losses
(SFAS No. 133), minority interests
and income from unconsolidated
joint ventures $70,479 $55,997 $141,049 $106,220
Add:
Real estate depreciation and
amortization 37,599 32,497 73,156 64,549
Income from unconsolidated joint
ventures 717 662 1,844 807
Less:
Net derivative losses
(SFAS No. 133) (4,733) - (7,788) -
Minority property partnerships'
share of funds from operations (411) (266) (714) (490)
Preferred dividends and
distributions (8,260) (8,250) (16,481) (16,500)
Funds from operations $95,391 $80,640 $191,066 $154,586
Add:
Net derivative losses
(SFAS No. 133) 4,733 - 7,788 -
Funds from operations before net
derivative losses (SFAS No. 133) $100,124 $80,640 $198,854 $154,586
Funds from operations available to
common shareholders
before net derivative losses
(SFAS No. 133) $81,410 $59,347 $160,583 $113,767
Weighted average shares outstanding
- basic 89,990 67,991 89,365 67,973
FFO per share basic before net
derivative losses (SFAS No. 133) $0.90 $0.87 $1.80 $1.67
Weighted average shares outstanding
- diluted 105,259 82,583 104,726 81,871
FFO per share diluted before net
derivative losses (SFAS No. 133) $0.86 $0.83 $1.71 $1.61
FFO per share diluted after net
derivative losses (SFAS No. 133) $0.82 $0.83 $1.65 $1.61
BOSTON PROPERTIES, INC.
PORTFOLIO OCCUPANCY
Occupancy by Location
June 30, 2001 December 31, 2000
Greater Boston 94.6% 99.3%
Greater Washington, D.C. 98.0% 98.5%
Midtown Manhattan 99.8% 99.9%
Baltimore, MD 99.8% 99.8%
Richmond, VA 99.6% 100.0%
Princeton/East Brunswick, NJ 96.6% 98.7%
Greater San Francisco 95.0% 97.9%
Bucks County, PA 100.0% 100.0%
Total Portfolio 97.0% 98.9%
Occupancy by Type
June 30, 2001 December 31, 2000
Class A Office Portfolio 97.1% 99.0%
Office/Technical Portfolio 98.5% 98.0%
Industrial Portfolio 87.3% 95.9%
Total Portfolio 97.0% 98.9%
SOURCE Boston Properties, Inc.
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Related links:
http://www.bostonproperties.com
CONTACT:
Elaine Sellmayer, Investor Relations of
Boston Properties, Inc., +1-617-236-3300; or General, Marilynn
Meek, +1-212-445-8431, Analysts, Claire Koeneman,
+1-312-266-7800, or Media, Judith Sylk-Siegel, +1-212-445-8431,
all at The Financial Relations Board BSMG Worldwide
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