EX-99.1 2 a05-3520_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

Contact:

 

 

Timothy A. Bonang

 

 

Manager of Investor Relations

 

 

(617) 796-8149

 

 

www.hrpreit.com

 

HRPT Properties Trust

Announces Financial Results for the Quarter and Year Ended

December 31, 2004

 

Newton, MA (February 15, 2005): HRPT Properties Trust (NYSE: HRP) today announced financial results for the fourth quarter and year ended December 31, 2004.

 

Results for the quarter ended December 31, 2004:

 

Net income available for common shareholders was $30.5 million for the quarter ended December 31, 2004, compared to $23.7 million for the same quarter last year.  Net income available for common shareholders per share (EPS) for the quarters ended December 31, 2004 and 2003 was $0.17 each.

 

Funds from operations (FFO) available for common shareholders for the quarter ended December 31, 2004, were $56.0 million, or $0.32 per share.  This compares to FFO available for common shareholders for the quarter ended December 31, 2003, of $44.7 million, or $0.31 per share.

 

The weighted average number of common shares outstanding totaled 177,316,525 and 142,773,895, for the quarters ended December 31, 2004 and 2003, respectively.

 

Results for the year ended December 31, 2004:

 

Net income available for common shareholders was $116.8 million for the year ended December 31, 2004, compared to $68.4 million last year.  EPS for the years ended December 31, 2004 and 2003 was $0.66 and $0.50, respectively.

 

FFO available for common shareholders for the year ended December 31, 2004, were $215.2 million, or $1.22 per share.  This compares to FFO available for common shareholders for the year ended December 31, 2003, of $174.3 million, or $1.28 per share.

 

The weighted average number of common shares outstanding totaled 176,156,909 and 136,270,314, for the years ended December 31, 2004 and 2003, respectively.

 


 

Occupancy and Leasing Results:

 

As of December 31, 2004, 93.0% of HRP’s total square feet was leased, compared to 93.5% leased as of December 31, 2003.

 

HRP signed new leases for 563,000 square feet and lease renewals for 869,000 square feet during the quarter ended December 31, 2004, for weighted average rental rates that were 1% above prior rents.  HRP signed new leases for 1.7 million square feet and lease renewals for 2.8 million square feet during the year ended December 31, 2004, at weighted average rental rates that were 3% below prior rents.

 

Average lease terms for leases signed during the fourth quarter of 2004 were 8.9 years.  Average lease terms for leases signed during the year ended December 31, 2004 were 8.7 years.  Commitments for tenant improvement and leasing commission (TI/LC) costs for leases signed during the quarter ended December 31, 2004 totaled $30.82 per square foot on a weighted average basis.  Commitments for TI/LC costs for leases signed during the year ended 2004 totaled $28.31 per square foot on a weighted average basis.

 

Investment Activities:

 

During the quarter ended December 31, 2004, HRP acquired nine buildings with 892,000 square feet for $84.3 million.  HRP acquired 136 buildings with 8.3 million square feet for $818.3 million during the year ended December 31, 2004.

 

Also during the quarter ended December 31, 2004, HRP sold one million common shares of Senior Housing Properties Trust (SNH), a former subsidiary.  After this sale, HRP owned 8.7 million SNH common shares, or 12.6% of SNH’s total common shares outstanding at December 31, 2004.  HRP sold a total of 4.1 million SNH common shares during the year ended December 31, 2004.

 

Financing Activities:

 

Subsequent to year end in January 2005, HRP amended its previously existing $560 million unsecured revolving credit facility.  HRP increased the available borrowing amount to $750 million and extended the maturity date to April 2009, with an option to extend the maturity by one additional year.  The annual interest payable for drawn amounts under the facility was reduced from LIBOR plus 0.80% to LIBOR plus 0.65%.  Various other changes were made in the facility, and, in certain circumstances, the amount of unsecured borrowings available under this facility may be increased to $1.5 billion.

 

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Conference Call:

 

On Tuesday, February 15, 2005, at 11:00 a.m. Eastern Time, Adam Portnoy, executive vice president, and John Popeo, chief financial officer, will host a conference call to discuss the results for the quarter and year ended December 31, 2004.

 

The conference call telephone number is (800) 811-7286.  Participants calling from outside the United States and Canada should dial (913) 981-4902.  No pass code is necessary to access the call from either number.  Participants should dial in about 15 minutes prior to the scheduled start of the call.  A replay of the conference call will be available through February 22, 2005.  To hear the replay, dial (719) 457-0820. The replay pass code is 7218426.

 

A live oral webcast of the conference call will also be available in a listen-only mode on HRP’s web site.  Participants wanting to access the webcast should visit the company’s web site about five minutes before the call.  The archived webcast will be available for replay on HRP’s web site for about one week after the call.

 

Supplemental Data:

 

A copy of HRP’s Fourth Quarter 2004 Supplemental Operating and Financial Data is available for download at HRP’s web site.

 

HRPT Properties Trust is a real estate investment trust, or REIT, which primarily owns office buildings located throughout the United States.  As of December 31, 2004, HRP owned 375 properties with 44.2 million square feet, including almost 10 million square feet of leased commercial and industrial lands in Oahu, HI.  HRP is headquartered in Newton, Massachusetts.

 

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HRPT Properties Trust

Statements of Income and Funds from Operations

(in thousands, except per share data)

 

 

 

Quarter Ended
December 31,

 

Year Ended
December 31,

 

 

 

2004

 

2003

 

2004

 

2003

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Rental income

 

$

167,551

 

$

130,679

 

$

603,229

 

$

500,316

 

Total revenues

 

167,551

 

130,679

 

603,229

 

500,316

 

Expenses:

 

 

 

 

 

 

 

 

 

Operating expenses

 

65,049

 

51,068

 

227,853

 

192,813

 

Depreciation and amortization

 

33,097

 

24,330

 

112,380

 

93,273

 

General and administrative

 

6,696

 

5,015

 

25,170

 

19,338

 

Total expenses

 

104,842

 

80,413

 

365,403

 

305,424

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

62,709

 

50,266

 

237,826

 

194,892

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

184

 

157

 

638

 

411

 

Interest expense (including amortization of note discounts and premiums and deferred financing fees of $755, $1,509, $4,341 and $5,975, respectively)

 

(35,363

)

(26,957

)

(118,212

)

(101,144

)

Loss on early extinguishment of debt

 

—

 

—

 

(2,866

)

(3,238

)

Equity in earnings of equity investments

 

4,322

 

11,698

 

15,457

 

23,525

 

Gain on sale of shares of equity investments(1)

 

6,745

 

—

 

21,550

 

—

 

Gain on issuance of shares by equity investees(1)

 

3,396

 

—

 

8,436

 

—

 

Net income

 

41,993

 

35,164

 

162,829

 

114,446

 

Preferred distributions

 

(11,500

)

(11,500

)

(46,000

)

(46,000

)

Net income available for common shareholders

 

$

30,493

 

$

23,664

 

$

116,829

 

$

68,446

 

 

 

 

 

 

 

 

 

 

 

Calculation of Funds from Operations, or FFO:(2)

 

 

 

 

 

 

 

 

 

Net income

 

$

41,993

 

$

35,164

 

$

162,829

 

$

114,446

 

Plus: depreciation and amortization

 

33,097

 

24,330

 

112,380

 

93,273

 

Loss on early extinguishment of debt:

 

 

 

 

 

 

 

 

 

Add: amount included in total expenses

 

—

 

—

 

2,866

 

3,238

 

Less: portion settled in cash

 

—

 

—

 

—

 

—

 

Less: gain on sale of shares of equity investments

 

(6,745

)

—

 

(21,550

)

—

 

Less: gain on issuance of shares by equity investees

 

(3,396

)

—

 

(8,436

)

—

 

Less: equity in earnings of equity investments

 

(4,322

)

(11,698

)

(15,457

)

(23,525

)

Plus: FFO from equity investments

 

6,866

 

8,370

 

28,573

 

32,826

 

FFO

 

67,493

 

56,166

 

261,205

 

220,258

 

Less: preferred distributions

 

(11,500

)

(11,500

)

(46,000

)

(46,000

)

FFO available for common shareholders

 

$

55,993

 

$

44,666

 

$

215,205

 

$

174,258

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

177,317

 

142,774

 

176,157

 

136,270

 

 

 

 

 

 

 

 

 

 

 

Per common share:

 

 

 

 

 

 

 

 

 

Net income available for common shareholders

 

$

0.17

 

$

0.17

 

$

0.66

 

$

0.50

 

FFO available for common shareholders

 

0.32

 

0.31

 

1.22

 

1.28

 

Common distributions paid

 

0.21

 

0.20

 

0.82

 

0.80

 

 

4


 

(1)          We account for our common share investments in Senior Housing Properties Trust, or Senior Housing, and Hospitality Properties Trust, or Hospitality Properties, using the equity method of accounting.  During the year ended December 31, 2004, we sold 4,148 of our Senior Housing common shares and recognized a gain of $21,550.  In addition, we recognized gains of $8,436 during the year ended December 31, 2004, as a result of share issuances by Senior Housing and Hospitality Properties at prices above our per share carrying value.

 

(2)          We compute FFO as shown in the calculation above.  Our calculation of FFO differs from the NAREIT definition because we exclude loss on early extinguishment of debt not settled in cash.  We consider FFO to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities.  We believe that FFO provides useful information to investors because by excluding the effects of certain historical costs, such as depreciation expense and gains or losses on sales of properties, FFO can facilitate a comparison of current operating performance among REITs.  FFO does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity.  FFO is one important factor considered by our Board of Trustees in determining the amount of distributions to shareholders.  Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our revolving bank credit facility and public debt covenants, the availability of debt and equity capital to us and our expectation of future performance.

 

5


 

HRPT Properties Trust

Consolidated Balance Sheets

(dollars in thousands, except share data)

 

 

 

December 31

 

 

 

2004

 

2003

 

 

 

 

 

(audited)

 

ASSETS

 

 

 

 

 

Real estate properties, at cost:

 

 

 

 

 

Land

 

$

928,106

 

$

852,983

 

Buildings and improvements

 

3,756,963

 

3,038,983

 

 

 

4,685,069

 

3,891,966

 

Accumulated depreciation

 

(454,411

)

(363,015

)

 

 

4,230,658

 

3,528,951

 

Acquired real estate leases

 

149,063

 

68,983

 

Equity investments in former subsidiaries

 

207,804

 

260,208

 

Cash and cash equivalents

 

21,961

 

11,526

 

Restricted cash

 

22,257

 

10,674

 

Rents receivable, net of allowance for doubtful accounts of $4,594 and $4,468, respectively

 

113,504

 

83,973

 

Other assets, net

 

68,083

 

48,929

 

Total assets

 

$

4,813,330

 

$

4,013,244

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Revolving credit facility

 

$

175,000

 

$

412,000

 

Senior unsecured debt

 

1,739,624

 

1,136,311

 

Mortgage notes payable, net

 

440,407

 

328,510

 

Accounts payable and accrued expenses

 

67,716

 

60,541

 

Acquired real estate lease obligations

 

39,843

 

33,206

 

Rent collected in advance

 

15,208

 

13,135

 

Security deposits

 

11,920

 

9,520

 

Due to affiliates

 

16,418

 

8,370

 

Total liabilities

 

2,506,136

 

2,001,593

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Preferred shares of beneficial interest, $0.01 par value:

 

 

 

 

 

50,000,000 shares authorized;

 

 

 

 

 

Series A preferred shares; 9 7/8% cumulative redeemable at par on February 22, 2006; 8,000,000 shares issued and outstanding, aggregate liquidation preference $200,000

 

193,086

 

193,086

 

Series B preferred shares; 8 3/4% cumulative redeemable at par on September 12, 2007; 12,000,000 shares issued and outstanding, aggregate liquidation preference $300,000

 

289,849

 

289,849

 

Common shares of beneficial interest, $0.01 par value:

 

 

 

 

 

200,000,000 shares authorized; 177,316,525 and 142,773,925 shares issued and outstanding, respectively

 

1,773

 

1,428

 

Additional paid in capital

 

2,394,946

 

2,071,203

 

Cumulative net income

 

1,287,790

 

1,124,961

 

Cumulative common distributions

 

(1,729,587

)

(1,584,213

)

Cumulative preferred distributions

 

(130,663

)

(84,663

)

Total shareholders’ equity

 

2,307,194

 

2,011,651

 

Total liabilities and shareholders’ equity

 

$

4,813,330

 

$

4,013,244

 

 

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