EX-99.2 4 a2091800zex-99_2.txt EXHIBIT 99.2 NEWS [FRB WEBER SHANDWICK FINANCIAL COMMUNICATIONS LOGO] 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 Suzie Pileggi - Media (212) 445-8170 (617) 236-3300 BOSTON PROPERTIES, INC. ANNOUNCES THIRD QUARTER 2002 RESULTS REPORTS DILUTED FFO PER SHARE OF $1.00 BOSTON, MA, OCTOBER 22, 2002 - BOSTON PROPERTIES, INC. (NYSE: BXP), a real estate investment trust, today reported results for the third quarter ended September 30, 2002. Funds from Operations (FFO) for the quarter ended September 30, 2002 were $99.0 million, or $1.04 per share basic and $1.00 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 third quarter of 2002 compares to FFO of $86.6 million, or $0.96 per share basic and $0.91 per share diluted for the quarter ended September 30, 2001. This represents a 9.9% quarter to quarter increase in diluted FFO per share. The weighted average number of basic and diluted shares outstanding totaled 94,903,894 and 105,724,729, respectively, for the quarter ended September 30, 2002 and 90,518,618 and 105,812,336, respectively, for the same quarter last year. Net income available to common shareholders per share (EPS) for the quarter ended September 30, 2002 was $0.74 on a diluted basis reflecting a 32.1% increase in diluted EPS from the third quarter 2001 of $0.56. 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, 2002. 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, 2002, the Company's portfolio consisted of 145 properties comprising more than 42.8 million square feet, including eight properties under development totaling 3.1 million square feet. The overall occupancy rate for the properties in service as of September 30, 2002 was 95.1%. Significant events of the third quarter include: o The acquisition of 399 Park Avenue, a 1.68 million square foot building in New York City for approximately $1.06 billion. The acquisition was financed with an unsecured bridge loan totaling $1.00 billion with interest rate terms and covenants similar to the Company's unsecured line of credit and maturing in September 2003. The building is fully leased, including approximately 40% that is leased to Citigroup as its corporate headquarters. Third quarter operating results reflect six days of property operations. o 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. o The Company completed the disposition of 7600 Boston Boulevard, 7700 Boston Boulevard and 7702 Boston Boulevard, office buildings in Springfield, Virginia, recognizing a net gain of approximately $13.5 million. o The Company completed the disposition of land parcels in Herndon, Virginia and South San Francisco recognizing a net gain of approximately $4.4 million o The Company exercised a one-year extension on the 111 Huntington Avenue $203.0 million construction loan. The Company has an additional one-year option. o The Company recognized lease termination income totaling approximately $1.8 million. o The Company completed its previously announced lease restructuring of the Company's three hotel properties by forming a taxable REIT subsidiary to operate the properties. Marriott will continue to manage the properties under the terms of the existing management agreements. In connection with the restructuring the revenue and expenses of the hotel properties are being reflected in the Company's Consolidated Statements of Operations. o The Company acquired a 1/2-acre site located in the Capital Hill submarket of Washington, DC for approximately $2.4 million. The site is expected to support development of 170,000 square feet of office space. -more- Transactions completed subsequent to September 30, 2002: o The Company refinanced its first mortgage totaling approximately $146.9 million secured by 875 Third Avenue in New York City. o The Company repaid a $0.4 million mortgage secured by 201 Carnegie Center in Princeton, New Jersey. o The Company exercised a one-year extension option on its 2600 Tower Oaks $30 million construction loan facility. The Company has an additional one-year option. BOSTON PROPERTIES WILL HOST A CONFERENCE CALL TOMORROW, OCTOBER 23, 2002 AT 10:00 AM (EASTERN TIME), OPEN TO THE GENERAL PUBLIC, TO DISCUSS THE RESULTS OF THIS YEAR'S THIRD QUARTER. The number to call for this interactive teleconference is (800) 374-1372. A replay of the conference call will be available through October 31, 2002 by dialing (800) 642-1687 and entering the passcode 5893201. Additionally, a copy of Boston Properties' third quarter 2002 "Supplemental Operating and Financial Data" is 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 617-236-3322 or by written request to: Investor Relations Boston Properties, Inc. 111 Huntington Avenue, Suite 300 Boston, MA 02199-7610 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 NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, --------------------------- ------------------------- 2002 2001 2002 2001 ------------ ------------ ----------- ----------- (UNAUDITED AND IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS) Revenue Rental: Base rent $241,495 $231,295 $714,187 $623,157 Recoveries from tenants 29,256 27,277 87,367 80,226 Parking and other 13,056 12,965 38,910 40,244 ------------ ------------ ----------- ----------- Total rental revenue 283,807 271,537 840,464 743,627 Hotel revenue 20,007 - 20,007 - Development and management services 3,017 2,805 9,440 9,312 Interest and other 1,222 1,616 4,804 10,349 ------------ ------------ ----------- ----------- Total revenue 308,053 275,958 874,715 763,288 ------------ ------------ ----------- ----------- Expenses Operating Rental 93,741 81,259 265,942 227,968 Hotel 13,524 - 13,524 - General and administrative 9,956 9,819 34,589 29,649 Interest 68,425 59,936 199,539 163,659 Depreciation and amortization 45,534 38,314 132,274 109,329 Loss on investments in securities - - 4,297 6,500 ------------ ------------ ----------- ----------- Total expenses 231,180 189,328 650,165 537,105 ------------ ------------ ----------- ----------- Income before net derivative losses, minority interests, income from unconsolidated joint ventures, minority interest in Operating Partnership, gain on sales of real estate and land held for development, discontinued operations, cumulative effect of a change in accounting principle and preferred dividend 76,873 86,630 224,550 226,183 Net derivative losses (5,284) (16,620) (10,413) (24,408) Minority interests in property partnerships 720 374 1,902 629 Income from unconsolidated joint ventures 2,530 997 5,871 2,841 ------------ ------------ ----------- ----------- Income before minority interest in Operating Partnership, gain on sales of real estate and land held for development, discontinued operations, cumulative effect of a change in accounting principle and preferred dividend 74,839 71,381 221,910 205,245 Minority interest in Operating Partnership (18,726) (18,851) (56,701) (55,727) ------------ ------------ ----------- ----------- Income before gain on sale of real estate and land held for development, discontinued operations, cumulative effect of a change in accounting principle and preferred dividend 56,113 52,530 165,209 149,518 Gain on sale of real estate, net of minority interest - - - 6,505 Gain on sales of land held for development, net of minority interest 3,644 - 3,644 - ------------ ------------ ----------- ----------- Income before discontinued operations, cumulative effect of a change in accounting principle and preferred dividend 59,757 52,530 168,853 156,023 Discontinued Operations: Income from discontinued operations, net of minority interest - 638 570 1,848 Gain on sales of real estate from discontinued operations, net of minority interest 11,910 - 17,750 - ------------ ------------ ----------- ----------- Income before cumulative effect of a change in accounting principle and preferred dividend 71,667 53,168 187,173 157,871 Cumulative effect of a change in accounting principle, net of minority interest - - - (6,767) ------------ ------------ ----------- ----------- Net income before preferred dividend 71,667 53,168 187,173 151,104 Preferred dividend (126) (1,653) (3,412) (4,944) ------------ ------------ ----------- ----------- Net income available to common shareholders $71,541 $51,515 $183,761 $146,160 ============ ============ =========== =========== Basic earnings per share: Income before discontinued operations and cumulative effect of a change in accounting principle $0.63 $0.56 $1.79 $1.68 Discontinued operations - 0.01 0.01 0.02 Gain on sales from discontinued operations 0.12 - 0.19 - Cumulative effect of a change in accounting principle - - - (0.07) ------------ ------------ ----------- ----------- Net income available to common shareholders $0.75 $0.57 $1.99 $1.63 ============ ============ =========== =========== Weighted average number of common shares outstanding 94,904 90,519 92,413 89,753 ============ ============ =========== =========== Diluted earnings per share: Income before discontinued operations and cumulative effect of a change in accounting principle $0.62 $0.55 $1.76 $1.64 Discontinued operations - 0.01 0.01 0.02 Gain on sale from discontinued operations 0.12 - 0.19 - Cumulative effect of a change in accounting principle - - - (0.07) ------------ ------------ ----------- ----------- Net income available to common shareholders $0.74 $0.56 $1.96 $1.59 ============ ============ =========== =========== Weighted average number of common and common equivalent shares outstanding 96,181 92,828 94,026 92,004 ============ ============ =========== ===========
BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31, 2002 2001 -------------- ------------- (IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS) (UNAUDITED) ASSETS Real estate $8,139,450 $6,167,399 Development in progress 416,839 1,107,835 Land held for future development 209,911 182,672 Less: accumulated depreciation (836,418) (719,854) -------------- ------------- Total real estate 7,929,782 6,738,052 Cash and cash equivalents 28,793 98,067 Escrows 28,200 23,000 Investments in securities - 4,297 Tenant and other receivables, net 48,716 43,546 Accrued rental income, net 156,818 119,494 Deferred charges, net 148,435 107,573 Prepaid expenses and other assets 38,752 20,996 Investments in unconsolidated joint ventures 101,819 98,485 -------------- ------------- Total assets $8,481,315 $7,253,510 ============== ============= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Mortgage notes and bonds payable $4,422,692 $4,314,942 Unsecured bridge loan 1,000,000 - Unsecured line of credit 44,000 - Accounts payable and accrued expenses 69,097 81,108 Dividends and distributions payable 81,329 79,561 Interest rate contracts 15,115 11,147 Accrued interest payable 18,265 9,080 Other liabilities 70,292 58,859 -------------- ------------- Total liabilities 5,720,790 4,554,697 -------------- ------------- Commitments and contingencies - - -------------- ------------- Minority interests 804,229 844,740 -------------- ------------- Series A Convertible Redeemable Preferred Stock, liquidation preference $50.00 per share, 0 and 2,000,000 shares issued and outstanding in 2002 and 2001, respectively - 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, 95,273,202 and 90,780,591 issued and outstanding in 2002 and 2001, respectively 953 908 Additional paid-in capital 1,977,560 1,789,521 Dividends in excess of earnings (2,532) (17,669) Treasury common stock, at cost (2,722) (2,722) Unearned compensation (3,355) (2,097) Accumulated other comprehensive loss (13,608) (13,868) -------------- ------------- Total stockholders' equity 1,956,296 1,754,073 -------------- ------------- Total liabilities and stockholders' equity $8,481,315 $7,253,510 ============== =============
BOSTON PROPERTIES, INC. FUNDS FROM OPERATIONS
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ----------------------- ---------------------- 2002 2001 2002 2001 ---------- ---------- --------- --------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) 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 and land held for development, discontinued operations, cumulative effect of a change in accounting principle and preferred dividend $76,873 $86,630 $224,550 $226,183 Add: Real estate depreciation and amortization 46,971 39,360 136,502 112,516 Income from discontinued operations - 781 697 2,277 Income from unconsolidated joint ventures 2,530 997 5,871 2,841 Less: Net derivative losses (SFAS No. 133) (5,284) (16,620) (10,413) (24,408) Minority property partnerships' share of funds from operations (521) (832) (1,833) (1,546) Preferred dividends and distributions (6,162) (8,383) (22,785) (24,864) ---------- ---------- --------- --------- Funds from operations 114,407 101,933 332,589 292,999 Add (subtract): Net derivative losses (SFAS No. 133) 5,284 16,620 10,413 24,408 Early surrender lease adjustment (1) 667 (12,445) 8,520 (12,445) ---------- ---------- --------- --------- Funds from operations before net derivative losses (SFAS No. 133) and after early surrender lease adjustment $120,358 $106,108 $351,522 $304,962 ========== ========== ========= ========= Funds from operations available to common shareholders before net derivative losses (SFAS No. 133) and after early surrender lease adjustment 98,980 $86,627 $287,784 $247,210 ========== ========== ========= ========= Weighted average shares outstanding - basic 94,904 90,519 92,413 89,753 ========== ========== ========= ========= FFO per share basic before net derivative losses (SFAS No. 133) and after early surrender adjustment $1.04 $0.96 $3.11 $2.76 ========== ========== ========= ========= FFO per share basic after net derivative losses (SFAS No. 133) and before early surrender lease adjustment $0.99 $0.91 $2.95 $2.65 ========== ========== ========= ========= Weighted average shares outstanding - diluted 105,725 105,812 105,870 104,991 ========== ========== ========= ========= FFO per share diluted before net derivative losses (SFAS No. 133) and after early surrender lease adjustment $1.00 $0.91 $2.96 $2.62 ========== ========== ========= ========= FFO per share diluted after net derivative losses (SFAS No. 133) and before early surrender lease adjustment $0.95 $0.87 $2.81 $2.53 ========== ========== ========= =========
(1) Represents cash received under contractual obligations. BOSTON PROPERTIES, INC. PORTFOLIO OCCUPANCY
OCCUPANCY BY LOCATION -------------------------------------------------------- SEPTEMBER 30, 2002 DECEMBER 31, 2001 ------------------ ----------------- Greater Boston 94.0% 92.3% Greater Washington, D.C. 98.1% 97.8% Midtown Manhattan 98.2% 99.8% Baltimore, MD 97.2% 99.2% Richmond, VA 92.0% 98.4% Princeton/East Brunswick, NJ 93.0% 88.6% Greater San Francisco 88.6% 93.5% Bucks County, PA 100.0% 100.0% ------------------ ----------------- Total Portfolio 95.1% 95.3% ================== ================= OCCUPANCY BY TYPE -------------------------------------------------------- SEPTEMBER 30, 2002 DECEMBER 31, 2001 ------------------ ----------------- Class A Office Portfolio 95.0% 95.4% Office/Technical Portfolio 95.0% 97.9% Industrial Portfolio 100.0% 87.3% ------------------ ----------------- Total Portfolio 95.1% 95.3% ================== =================