EX-99.2 4 a2077806zex-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 (617) 520-7004 (617) 236-3300 Judith Sylk-Siegel - Media (212) 445-8431
BOSTON PROPERTIES, INC. ANNOUNCES FIRST QUARTER 2002 RESULTS REPORTS DILUTED FFO PER SHARE OF $0.93 BOSTON, MA, APRIL 23, 2002 - 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 -MORE- 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: o The completion of the One Discovery Square development project, a 180,052 square foot office building in Reston, Virginia. This project is 100% leased. o 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. o The completion of the ITT Educational Services development project, a 32,000 square foot building in Springfield, Virginia. This project is 100% leased. o 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. o 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. o The write-down of our investment in the securities of Captivate Network, Inc. totaling $4.3 million. o 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. o 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. o 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. Financial tables follow. 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 -- --------- --------- 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 ========= =========
(1) 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% =================== =======================