EX-99.2 4 a2085097zex-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 SECOND QUARTER 2002 RESULTS REPORTS DILUTED FFO PER SHARE OF $1.02 BOSTON, MA, JULY 23, 2002 - BOSTON PROPERTIES, INC. (NYSE: BXP) today reported results for the second quarter ended June 30, 2002. Funds from Operations (FFO) for the quarter ended June 30, 2002, including a $2.8 million write-off of unrecoverable leasing commissions related to the previously reported termination of the Arthur Andersen lease at Times Square Tower, were $98.2 million, or $1.07 per share basic and $1.02 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 second quarter of 2002 compares to FFO of $81.4 million, or $0.90 per share basic and $0.86 per share diluted for the quarter ended June 30, 2001. This represents an 18.6% quarter to quarter increase in diluted FFO per share. The weighted average number of basic and diluted shares outstanding totaled 91,357,121 and 105,982,092, respectively, for the quarter ended June 30, 2002 and 89,989,616 and 105,259,081, respectively, for the same quarter last year. Net income available to common shareholders per share (EPS) for the quarter ended June 30, 2002 was $0.59 on a diluted basis reflecting an 11.3% increase in diluted EPS from the second quarter 2001 of $0.53. 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, 2002. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made. -MORE- As of June 30, 2002, the Company's portfolio consisted of 144 properties comprising more than 41.2 million square feet, including nine properties under development totaling 3.3 million square feet. The overall occupancy rate for the properties in service as of June 30, 2002 was 95.3%. Significant events of the second quarter include: - The increase in the quarterly dividend paid to holders of the Company's Common Stock from $0.58 per share to $0.61 per share. This represents a 5.2% increase. - Lease termination income totaling approximately $1.2 million. - A one-time refund of approximately $1.3 million received pursuant to resolution of a prior-year tax matter. - The termination of the lease with Arthur Andersen LLP for 620,947 square feet at Times Square Tower. Upon signing the lease on December 1, 2000, Boston Properties paid $5.64 million of the $17.3 million leasing commission associated with the transaction, which the Company capitalized pending occupancy by the tenant. In connection with the lease termination, Insignia-ESG agreed to return half of such amount paid, leaving a balance of $2.82 million which was written-off and included in general and administrative expenses. Times Square Tower is a 1.2 million square foot office property that is on schedule to be completed during 2004. - The completion of the 111 Huntington Avenue development project, a 953,336 square foot office/retail building at the Prudential Center in Boston, Massachusetts. This project is 98% leased. Transactions completed subsequent to June 30, 2002: - The conversion of the Company's Series A Preferred Stock and certain of the Series Two and Three Preferred Units of the Company's Operating Partnership, with an aggregate liquidation preference of approximately $140.6 million, into approximately 3.7 million shares of Common Stock. - The disposition of the following land parcels: an 8.9 acre site in Herndon, Virginia for approximately $5.2 million and a 3.0 acre site in South San Francisco, California for $8.0 million. Boston Properties will conduct a conference call tomorrow, July 24, 2002 at 10 AM (Eastern Time) to discuss the results of this year's second quarter. The number to call for this interactive teleconference is (800) 218-0204. A replay of the conference call will be available through July 31, 2002 by dialing (800) 405-2236 and entering the passcode 482556. Additionally, a copy of Boston Properties' second 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 SIX MONTHS ENDED JUNE 30, JUNE 30, ------------------------------- ------------------------------- 2002 2001 2002 2001 -------------- -------------- -------------- -------------- (UNAUDITED AND IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS) Revenue Rental: Base rent $ 242,846 $ 207,094 $ 471,952 $ 391,862 Recoveries from tenants 30,112 27,058 57,824 52,949 Parking and other 12,458 13,533 24,554 27,279 -------------- -------------- -------------- -------------- Total rental revenue 285,416 247,685 554,330 472,090 Development and management services 2,289 3,110 6,423 6,507 Interest and other 2,310 4,289 3,582 8,733 -------------- -------------- -------------- -------------- Total revenue 290,015 255,084 564,335 487,330 -------------- -------------- -------------- -------------- Expenses Operating 86,866 76,639 171,955 146,709 General and administrative 13,564 9,880 24,633 19,830 Interest 67,327 55,870 131,114 103,723 Depreciation and amortization 43,796 36,474 86,740 71,015 Loss on investments in securities - 6,500 4,297 6,500 -------------- -------------- -------------- -------------- Total expenses 211,553 185,363 418,739 347,777 -------------- -------------- -------------- -------------- 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 78,462 69,721 145,596 139,553 Net derivative losses (4,826) (4,733) (5,129) (7,788) Minority interests in property partnerships 712 510 1,183 255 Income from unconsolidated joint ventures 1,659 717 3,341 1,844 -------------- -------------- -------------- -------------- 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 76,007 66,215 144,991 133,864 Minority interest in Operating Partnership (19,589) (17,998) (37,975) (36,876) -------------- -------------- -------------- -------------- Income before gain on sale of real estate, discontinued operations, cumulative effect of a change in accounting principle and preferred dividend 56,418 48,217 107,016 96,988 Gain on sale of real estate, net of minority interest - 1,851 - 6,505 -------------- -------------- -------------- -------------- Income before discontinued operations, cumulative effect of a change in accounting principle and preferred dividend 56,418 50,068 107,016 103,493 Discontinued Operations: Income from discontinued operations, net of minority interest - 618 570 1,210 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 56,418 50,686 113,426 104,703 Cumulative effect of a change in accounting principle, net of minority interest - - - (6,767) -------------- -------------- -------------- -------------- Net income before preferred dividend 56,418 50,686 113,426 97,936 Preferred dividend (1,643) (1,648) (3,286) (3,291) -------------- -------------- -------------- -------------- Net income available to common shareholders $ 54,775 $ 49,038 $ 110,140 $ 94,645 ============== ============== ============== ============== Basic earnings per share: Income before discontinued operations and cumulative effect of a change in accounting principle $ 0.60 $ 0.54 $ 1.14 $ 1.12 Discontinued operations - - 0.07 0.01 Cumulative effect of a change in accounting principle - - - (0.07) -------------- -------------- -------------- -------------- Net income available to common shareholders $ 0.60 $ 0.54 $ 1.21 $ 1.06 ============== ============== ============== ============== Weighted average number of common shares outstanding 91,357 89,990 91,146 89,365 ============== ============== ============== ============== Diluted earnings per share: Income before discontinued operations and cumulative effect of a change in accounting principle $ 0.59 $ 0.53 $ 1.12 $ 1.09 Discontinued operations - - 0.07 0.01 Cumulative effect of a change in accounting principle - - - (0.07) -------------- -------------- -------------- -------------- Net income available to common shareholders $ 0.59 $ 0.53 $ 1.19 $ 1.03 ============== ============== ============== ============== Weighted average number of common and common equivalent shares outstanding 93,016 92,274 92,897 91,739 ============== ============== ============== ==============
BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31, 2002 2001 ------------------ ------------------ (IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS) (UNAUDITED) ASSETS Real estate $ 6,972,779 $ 6,167,399 Development in progress 435,125 1,107,835 Land held for future development 199,681 182,672 Less: accumulated depreciation (795,852) (719,854) ------------------ ------------------ Total real estate 6,811,733 6,738,052 Cash and cash equivalents 59,616 98,067 Escrows 44,800 23,000 Investments in securities - 4,297 Tenant and other receivables 31,298 43,546 Accrued rental income 146,100 119,494 Deferred charges, net 148,239 107,573 Prepaid expenses and other assets 16,081 20,996 Investments in unconsolidated joint ventures 100,804 98,485 ------------------ ------------------ Total assets $ 7,358,671 $ 7,253,510 ================== ================== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Mortgage notes and bonds payable $ 4,415,724 $ 4,314,942 Accounts payable and accrued expenses 52,655 81,108 Dividends and distributions payable 83,707 79,561 Interest rate contracts 11,568 11,147 Accrued interest payable 17,635 9,080 Other liabilities 65,142 58,859 ------------------ ------------------ Total liabilities 4,646,431 4,554,697 ------------------ ------------------ Commitments and contingencies - - ------------------ ------------------ Minority interests 825,730 844,740 ------------------ ------------------ 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, 91,545,294 and 90,780,591 issued and outstanding in 2002 and 2001, respectively 915 908 Additional paid-in capital 1,821,762 1,789,521 Dividends in excess of earnings (16,152) (17,669) Treasury common stock, at cost (2,722) (2,722) Unearned compensation (3,598) (2,097) Accumulated other comprehensive loss (13,695) (13,868) ------------------ ------------------ Total stockholders' equity 1,786,510 1,754,073 ------------------ ------------------ Total liabilities and stockholders' equity $ 7,358,671 $ 7,253,510 ================== ==================
BOSTON PROPERTIES, INC. FUNDS FROM OPERATIONS (UNAUDITED AND IN THOUSANDS)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ------------------------------- ------------------------------- 2002 2001 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 $ 78,462 $ 69,721 $ 145,596 $ 139,553 Add: Real estate depreciation and amortization 45,032 37,599 89,531 73,156 Income from discontinued operations - 758 697 1,496 Income from unconsolidated joint ventures 1,659 717 3,341 1,844 Less: Net derivative losses (SFAS No. 133) (4,826) (4,733) (5,129) (7,788) Minority property partnerships' share of funds from operations (593) (411) (1,312) (714) Preferred dividends and distributions (8,223) (8,260) (16,623) (16,481) -------------- -------------- -------------- -------------- Funds from operations $ 111,511 $ 95,391 $ 216,101 $ 191,066 Add (subtract): Net derivative losses (SFAS No. 133) 4,826 4,733 5,129 7,788 Early surrender lease adjustment (1) 3,926 - 7,853 - -------------- -------------- -------------- -------------- Funds from operations before net derivative losses (SFAS No. 133) and after early surrender lease adjustment $ 120,263 $ 100,124 $ 229,083 $ 198,854 ============== ============== ============== ============== Funds from operations available to common shareholders before net derivative losses (SFAS No. 133) and after early surrender lease adjustment $ 98,165 $ 81,410 $ 187,094 $ 160,583 ============== ============== ============== ============== Weighted average shares outstanding - basic 91,357 89,990 91,146 89,365 ============== ============== ============== ============== FFO per share basic before net derivative losses (SFAS No. 133) and after early surrender adjustment $ 1.07 $ 0.90 $ 2.05 $ 1.80 ============== ============== ============== ============== FFO per share basic after net derivative losses (SFAS No. 133) and before early surrender lease adjustment $ 1.00 $ 0.86 $ 1.94 $ 1.73 ============== ============== ============== ============== Weighted average shares outstanding - diluted 105,982 105,259 105,870 104,726 ============== ============== ============== ============== FFO per share diluted before net derivative losses (SFAS No. 133) and after early surrender lease adjustment $ 1.02 $ 0.86 $ 1.95 $ 1.71 ============== ============== ============== ============== FFO per share diluted after net derivative losses (SFAS No. 133) and before early surrender lease adjustment $ 0.95 $ 0.82 $ 1.84 $ 1.65 ============== ============== ============== ==============
(1) Represents cash received under contractual obligations. BOSTON PROPERTIES, INC. PORTFOLIO OCCUPANCY
Occupancy by Location ------------------------------------------------------- June 30, 2002 December 31, 2001 -------------------------- ------------------------- Greater Boston 93.2% 92.3% Greater Washington, D.C. 97.5% 97.8% Midtown Manhattan 98.4% 99.8% Baltimore, MD 97.8% 99.2% Richmond, VA 93.1% 98.4% Princeton/East Brunswick, NJ 90.8% 88.6% Greater San Francisco 93.6% 93.5% Bucks County, PA 100.0% 100.0% -------------------------- ------------------------- Total Portfolio 95.3% 95.3% ========================== =========================
Occupancy by Type ------------------------------------------------------- June 30, 2002 December 31, 2001 -------------------------- ------------------------- Class A Office Portfolio 95.3% 95.4% Office/Technical Portfolio 94.1% 97.9% Industrial Portfolio 100.0% 87.3% -------------------------- ------------------------- Total Portfolio 95.3% 95.3% ========================== =========================