EX-99.2 4 a2061646zex-99_2.txt EXHIBIT 99.2 EXHIBIT 99.2 BOSTON PROPERTIES, INC. 111 HUNTINGTON AVENUE BOSTON, MA 02199 (NYSE: BXP) AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD -------------- -------------------------------------------- Douglas T. Linde Marilynn Meek - General Info. (212) 445-8431 Chief Financial Officer Claire Koeneman - Analyst (312) 266-7800 (617) 236-3300 Judith Sylk-Siegel - Media (212) 445-8431 BOSTON PROPERTIES, INC. ANNOUNCES THIRD QUARTER 2001 RESULTS REPORTS DILUTED FFO PER SHARE OF $0.91 BEFORE ACCOUNTING CHARGE RELATED TO SFAS NO. 133 BOSTON, MA, OCTOBER 23, 2001 - BOSTON PROPERTIES, INC. (NYSE: BXP) today reported results for the third quarter ended September 30, 2001. Funds from Operations (FFO) for the quarter ended September 30, 2001 were $86.6 million, or $0.96 per share basic and $0.91 per share diluted before an accounting charge related to the application of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" for the quarter ended September 30, 2001. FFO for the third quarter of 2001 compares to FFO of $61.5 million, or $0.90 per share basic and $0.85 per share diluted for the quarter ended September 30, 2000. Excluding the charge related to SFAS No. 133, this represents a 7.1% year to year increase in diluted FFO per share. The weighted average number of basic and diluted shares outstanding totaled 90,518,618 and 105,812,336, respectively, for the quarter ended September 30, 2001 and 68,751,768 and 83,657,357, respectively, for the same quarter last year. Net income before the charge related to SFAS No. 133 and gain (loss) on the sale of real estate, totaled $54.9 million or $0.59 per share diluted in the third quarter of 2001 as compared to $37.1 million or $0.53 per share diluted for the same period in 2000. Excluding the charge related to SFAS No. 133 and gain (loss) on the sale of real estate, this represents an 11.3% per share increase in diluted 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 September 30, 2001. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made. -MORE- As of September 30, 2001, the Company's portfolio consisted of 147 properties comprising more than 40.9 million square feet, including 13 properties under development totaling 5.0 million square feet. The overall occupancy rate for the properties in service as of September 30, 2001 was 96.1 %. Additional highlights of the third quarter include: o The refinancing of the mortgage loan collateralized by Sumner Square on August 8, 2001. The new financing totaling $30.3 million bears interest at a fixed rate of 7.35% and matures in September 2013. o The refinancing of the mortgage loan collateralized by One Independence Square on August 22, 2001. The new financing totaling $75.0 million bears interest at a rate equal to LIBOR + 1.60% and matures in August 2003. o The refinancing of the mortgage loan collateralized by 10 & 20 Burlington Mall Road and 91 Hartwell Avenue on October 1, 2001. The new financing totaling $40.0 million bears interest at a fixed rate of 7.25% and matures in October 2011. o The completion of two development projects consisting of Orbital Sciences Phase II, an approximately 160,000 square foot office building in Dulles, Virginia and an approximately 130,000 square foot office building at Quorum Office Park in Chelmsford, Massachusetts. These projects are 100% leased. Boston Properties will conduct a conference call tomorrow, October 24, 2001 at 10:00 AM (Eastern Time) to discuss the results of this year's third quarter. The number to call for this interactive teleconference is (888) 413-4411. A replay of the conference call will be available through November 1, 2001 by dialing (888) 266-2086 and entering the passcode 5568450. Additionally, a copy of Boston Properties' third 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, 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. Financial tables follow. BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, ------------------------------- 2001 2000 ------------ -------------- (UNAUDITED AND IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS) Revenue Rental: Base rent $ 219,855 $ 183,749 Recoveries from tenants 27,473 22,886 Parking and other 12,965 12,798 --------- --------- Total rental revenue 260,293 219,433 Development and management services 2,805 2,693 Interest and other 1,616 1,187 --------- --------- Total revenue 264,714 223,313 --------- --------- Expenses Operating 81,475 68,154 General and administrative 9,819 9,871 Interest 59,936 54,752 Depreciation and amortization 38,518 32,436 Loss on investments in securities - - --------- --------- Total expenses 189,748 165,213 --------- --------- Income before net derivative losses, minority interests and income from unconsolidated joint ventures 74,966 58,100 Net derivative losses (16,620) - Minority interests in property partnerships 374 (245) Income from unconsolidated joint ventures 997 549 --------- --------- Income before minority interest in Operating Partnership 59,717 58,404 Minority interest in Operating Partnership (16,709) (19,627) --------- --------- Income before gain (loss) on sale of real estate 43,008 38,777 Gain (loss) on sale of real estate, net of minority interest - (604) --------- --------- Income before cumulative effect of a change in accounting principle 43,008 38,173 Cumulative effect of a change in accounting principle, net of minority interest - - --------- --------- Net income before preferred dividend 43,008 38,173 Preferred dividend (1,653) (1,643) --------- --------- Net income available to common shareholders $ 41,355 $ 36,530 ========= ========= Basic earnings per share: Income before gain (loss) on sale of real estate and cumulative effect of a change in accounting principle $ 0.46 $ 0.54 Gain (loss) on sale of real estate, net of minority interest - (0.01) Cumulative effect of a change in accounting principle, net of minority interest - - --------- --------- Net income available to common shareholders $ 0.46 $ 0.53 ========= ========= Weighted average number of common shares outstanding 90,519 68,752 ========= ========= Diluted earnings per share: Income before gain (loss) on sale of real estate and cumulative effect of a change in accounting principle $ 0.45 $ 0.53 Gain (loss) on sale of real estate, net of minority interest - (0.01) Cumulative effect of a change in accounting principle, net of minority interest - - --------- --------- Net income available to common shareholders $ 0.45 $ 0.52 ========= ========= Weighted average number of common and common equivalent shares outstanding 92,828 70,661 ========= ========= NINE MONTHS ENDED SEPTEMBER 30, ---------------------------- 2001 2000 --------- -------------- (UNAUDITED AND IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS) Revenue Rental: Base rent $ 613,617 $ 532,039 Recoveries from tenants 80,917 68,956 Parking and other 40,244 38,095 --------- --------- Total rental revenue 734,778 639,090 Development and management services 9,312 8,432 Interest and other 10,349 3,304 --------- --------- Total revenue 754,439 650,826 --------- --------- Expenses Operating 228,683 197,366 General and administrative 29,649 25,868 Interest 163,659 166,210 Depreciation and amortization 109,933 97,062 Loss on investments in securities 6,500 - --------- --------- Total expenses 538,424 486,506 --------- --------- Income before net derivative losses, minority interests and income from unconsolidated joint ventures 216,015 164,320 Net derivative losses (24,408) - Minority interests in property partnerships 629 (681) Income from unconsolidated joint ventures 2,841 1,356 --------- --------- Income before minority interest in Operating Partnership 195,077 164,995 Minority interest in Operating Partnership (53,871) (56,505) --------- --------- Income before gain (loss) on sale of real estate 141,206 108,490 Gain (loss) on sale of real estate, net of minority interest 6,505 (307) --------- --------- Income before cumulative effect of a change in accounting principle 147,711 108,183 Cumulative effect of a change in accounting principle, net of minority interest (6,767) - --------- --------- Net income before preferred dividend 140,944 108,183 Preferred dividend (4,944) (4,929) --------- --------- Net income available to common shareholders $ 136,000 $ 103,254 ========= ========= Basic earnings per share: Income before gain (loss) on sale of real estate and cumulative effect of a change in accounting principle $ 1.52 $ 1.51 Gain (loss) on sale of real estate, net of minority interest 0.07 - Cumulative effect of a change in accounting principle, net of minority interest (0.07) - --------- --------- Net income available to common shareholders $ 1.52 $ 1.51 ========= ========= Weighted average number of common shares outstanding 89,753 68,568 ========= ========= Diluted earnings per share: Income before gain (loss) on sale of real estate and cumulative effect of a change in accounting principle $ 1.48 $ 1.49 Gain (loss) on sale of real estate, net of minority interest 0.07 (0.01) Cumulative effect of a change in accounting principle, net of minority interest (0.07) - --------- --------- Net income available to common shareholders $ 1.48 $ 1.48 ========= ========= Weighted average number of common and common equivalent shares outstanding 92,004 69,600 ========= =========
BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31, 2001 2000 ----------------- ---------------- (IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS) ASSETS Real estate: $ 7,297,980 $ 6,112,779 Less: accumulated depreciation (683,029) (586,719) ----------- ----------- Total real estate 6,614,951 5,526,060 Cash and cash equivalents 161,011 280,957 Escrows 20,901 85,561 Investments in securities 4,297 7,012 Tenant and other receivables 28,642 26,852 Accrued rental income 110,441 91,684 Deferred charges, net 104,370 77,319 Prepaid expenses and other assets 46,303 41,154 Investments in unconsolidated joint ventures 90,160 89,871 ----------- ------------ Total assets $ 7,181,076 $ 6,226,470 =========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Mortgage notes and bonds payable $ 4,245,433 $ 3,414,891 Accounts payable and accrued expenses 71,716 57,338 Dividends and distributions payable 79,005 71,274 Interest rate contracts 32,136 - Accrued interest payable 15,679 5,599 Other liabilities 52,969 51,926 ----------- ------------ Total liabilities 4,496,938 3,601,028 ----------- ------------ Commitments and contingencies -- -- Minority interests 844,957 877,715 ----------- ------------ 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, 90,720,477 and 86,630,089 issued and outstanding in 2001 and 2000, respectively 907 866 Additional paid-in capital 1,784,840 1,673,349 Dividends in excess of earnings (30,456) (13,895) Unearned compensation (2,242) (848) Accumulated other comprehensive loss (13,868) (11,745) ----------- ------------ Total stockholders' equity 1,739,181 1,647,727 ----------- ------------ Total liabilities and stockholders' equity $ 7,181,076 $ 6,226,470 =========== ============
BOSTON PROPERTIES, INC. FUNDS FROM OPERATIONS (UNAUDITED AND IN THOUSANDS)
THREE MONTHS ENDED SEPTEMBER 30, -------------------------------- 2001 2000 ----------- --------- Income before net derivative losses (SFAS No. 133), minority interests and income from unconsolidated joint ventures $ 74,966 $ 58,100 Add: Real estate depreciation and amortization 39,360 33,007 Income from unconsolidated joint ventures 997 549 Less: Net derivative losses (SFAS No. 133) (16,620) -- Minority property partnerships' share of funds from operations (832) (284) Preferred dividends and distributions (8,383) (8,248) -------- ------- Funds from operations $ 89,488 $ 83,124 Add: Net derivative losses (SFAS No. 133) 16,620 -- -------- ------- Funds from operations before net derivative losses (SFAS No. 133) $106,108 $ 83,124 ========= ======== Funds from operations available to common shareholders before net derivative losses (SFAS No. 133) $ 86,627 $ 61,543 ========= ======== Weighted average shares outstanding - basic 90,519 68,752 ========= ======== FFO per share basic before net derivative losses (SFAS No. 133) $ 0.96 $ 0.90 ========= ======== FFO per share basic after net derivative losses (SFAS No. 133) $ 0.81 $ 0.90 ========= ======== Weighted average shares outstanding - diluted 105,812 83,657 ========= ======== FFO per share diluted before net derivative losses (SFAS No. 133) $ 0.91 $ 0.85 ========= ======== FFO per share diluted after net derivative losses (SFAS No. 133) $ 0.78 $ 0.85 ========= ======== NINE MONTHS ENDED SEPTEMBER 30, ------------------------------------- 2001 2000 --------------- ---------- Income before net derivative losses (SFAS No. 133), minority interests and income from unconsolidated joint ventures $ 216,015 $ 164,320 Add: Real estate depreciation and amortization 112,516 97,556 Income from unconsolidated joint ventures 2,841 1,356 Less: Net derivative losses (SFAS No. 133) (24,408) -- Minority property partnerships' share of funds from operations (1,546) (774) Preferred dividends and distributions (24,864) (24,748) --------- ---------- Funds from operations $ 280,554 $ 237,710 Add: Net derivative losses (SFAS No. 133) 24,408 -- --------- ---------- Funds from operations before net derivative losses (SFAS No. 133) $ 304,962 $ 237,710 ========= ========= Funds from operations available to common shareholders before net derivative losses (SFAS No. 133) $ 247,210 $ 175,526 ========= ========= Weighted average shares outstanding - basic 89,753 68,568 ========= ========= FFO per share basic before net derivative losses (SFAS No. 133) $ 2.76 $ 2.56 ========= ========== FFO per share basic after net derivative losses (SFAS No. 133) $ 2.54 $ 2.56 ========= ========= Weighted average shares outstanding - diluted 104,991 82,600 ========= ========= FFO per share diluted before net derivative losses (SFAS No. 133) $ 2.62 $ 2.46 ========= ========= FFO per share diluted after net derivative losses (SFAS No. 133) $ 2.43 $ 2.46 ========= =========
BOSTON PROPERTIES, INC. PORTFOLIO OCCUPANCY
Occupancy by Location September 30, 2001 December 31, 2000 ---------------------------- -------------------- Greater Boston 92.9% 99.3% Greater Washington, D.C. 97.8% 98.5% Midtown Manhattan 99.9% 99.9% Baltimore, MD 99.6% 99.8% Richmond, VA 98.6% 100.0% Princeton/East Brunswick, NJ 92.8% 98.7% Greater San Francisco 94.5% 97.9% Bucks County, PA 100.0% 100.0% --------------------- ------------------ Total Portfolio 96.1% 98.9% ===================== ==================
Occupancy by Type --------------------------- ----------------------- September 30, 2001 December 31, 2000 --------------------------- ----------------------- Class A Office Portfolio 96.2% 99.0% Office/Technical Portfolio 97.3% 98.0% Industrial Portfolio 87.3% 95.9% Total Portfolio 96.1% 98.9% ====================== =======================
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: October 23, 2001 BOSTON PROPERTIES, INC. /s/ Douglas T. Linde ------------------------------------- By: Douglas T. Linde Chief Financial Officer