EX-99.2 3 dex992.txt PRESS RELEASE DATED JULY 18, 2001 Exhibit 99.2 Boston Properties, Inc. 800 Boylston Street, Suite 400 Boston, MA 02199 (NYSE: BXP) AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD -------------- -------------------------------- Elaine Sellmayer Marilynn Meek - General Info. (212) 445-8431 Investor Relations Claire Koeneman - Analyst (312) 266-7800 (617) 236-3300 Judith Sylk-Siegel - Media (212) 445-8431 BOSTON PROPERTIES, INC. ANNOUNCES --------------------------------- SECOND QUARTER 2001 RESULTS --------------------------- Reports diluted FFO per share of $0.86 before accounting charge related to SFAS No. 133 of ($0.04) per share BOSTON, MA, JULY 18, 2001 - 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 Investments") 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 -MORE- 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 4/th/ Avenue in Waltham, Massachusetts in the 1/st/ 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. Financial tables follow. 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. 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. 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% ================ ====================