EX-99.1 2 a05-14269_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 Results for the Periods

Ended June 30, 2005

 

Newton, MA (August 8, 2005): HRPT Properties Trust (NYSE: HRP) today announced financial results for the quarter and six months ended June 30, 2005.

 

Results for the quarter ended June 30, 2005:

 

Net income available for common shareholders was $39.2 million for the quarter ended June 30, 2005, compared to $23.6 million for the same quarter last year.  Net income available for common shareholders per share (EPS) for the quarters ended June 30, 2005 and 2004 was $0.20 and $0.13, respectively.

 

Funds from operations (FFO) available for common shareholders for the quarter ended June 30, 2005, were $64.8 million, or $0.32 per share.  This compares to FFO available for common shareholders for the quarter ended June 30, 2004, of $52.1 million, or $0.29 per share.

 

The weighted average number of common shares outstanding totaled 199,819,096 and 177,276,447, for the quarters ended June 30, 2005 and 2004, respectively.

 

Results for the six months ended June 30, 2005:

 

Net income available for common shareholders was $60.0 million for the six months ended June 30, 2005, compared to $61.4 million for the same period last year.  Net income available for common shareholders per share (EPS) for the six months ended June 30, 2005 and 2004 was $0.32 and $0.35, respectively.

 


 

Funds from operations (FFO) available for common shareholders for the six months ended June 30, 2005, were $121.6 million, or $0.64 per share.  This compares to FFO available for common shareholders for the six months ended June 30, 2004, of $101.6 million, or $0.58 per share.

 

The weighted average number of common shares outstanding totaled 189,873,066 and 175,000,461, for the six months ended June 30, 2005 and 2004, respectively.

 

Occupancy and Leasing Results:

 

As of June 30, 2005, 94.1% of HRPT’s total square feet was leased, compared to 93.5% leased as of June 30, 2004, and 93.7% leased as of March 31, 2005.

 

HRPT signed new leases for 573,000 square feet and lease renewals for 726,000 square feet during the quarter ended June 30, 2005, for weighted average rental rates that were 5% above prior rents.

 

Average lease terms for leases signed during the second quarter of 2005 were 4.9 years.  Commitments for tenant improvement and leasing commission (TI/LC) costs for leases signed during the quarter ended June 30, 2005 totaled $11.74 per square foot on a weighted average basis.

 

Investing Activities:

 

During the second quarter of 2005 HRPT acquired 8.2 million square feet of industrial lands in Oahu, HI from the Estate of James Campbell and affiliates, for $115.5 million, plus closing costs, and two office properties in Indianapolis, IN with 700,000 square feet of space for $81.4 million, plus closing costs.

 

Conference Call:

 

On Monday, August 8, 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 second quarter 2005 results.

 

The conference call telephone number is (800) 289-0493.  Participants calling from outside the United States and Canada should dial (913) 981-5510.  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

 

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available through August 14, 2005.  To hear the replay, dial (719) 457-0820. The replay pass code is 2340065.

 

A live audio webcast of the conference call will also be available in a listen only mode on HRPT’s web site, which is located at www.hrpreit.com.  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 HRPT’s web site for about one week after the call.

 

Supplemental Data:

 

A copy of HRPT’s Second Quarter 2005 Supplemental Operating and Financial Data is available for download at HRPT’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 June 30, 2005, HRPT owned 415 properties with 53 million square feet, including almost 18 million square feet of leased industrial and commercial lands in Oahu, HI.  HRPT 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
June 30,

 

Six Months Ended
June 30,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

174,289

 

$

138,693

 

$

341,320

 

$

275,022

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Operating expenses

 

63,920

 

51,414

 

127,203

 

102,279

 

Depreciation and amortization

 

33,519

 

24,942

 

66,134

 

49,879

 

General and administrative

 

7,453

 

5,830

 

14,328

 

11,528

 

Total expenses

 

104,892

 

82,186

 

207,665

 

163,686

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

69,397

 

56,507

 

133,655

 

111,336

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

701

 

144

 

881

 

264

 

Interest expense (including amortization of note discounts and premiums and deferred financing fees of $668, $1,511, $1,333 and $2,946, respectively)

 

(34,732

)

(25,201

)

(70,339

)

(51,426

)

Loss on early extinguishment of debt

 

—

 

—

 

—

 

(2,866

)

Equity in earnings of equity investments

 

3,052

 

3,731

 

6,446

 

7,531

 

Gain on sale of shares of equity investments (1)

 

—

 

—

 

—

 

14,805

 

Gain on issuance of shares by equity investees (1)

 

4,708

 

—

 

4,708

 

5,040

 

Income from continuing operations

 

43,126

 

35,181

 

75,351

 

84,684

 

Income (loss) from discontinued operations

 

28

 

(121

)

38

 

(249

)

Gain on sale of properties

 

7,592

 

—

 

7,592

 

—

 

Net income

 

50,746

 

35,060

 

82,981

 

84,435

 

Preferred distributions

 

(11,500

)

(11,500

)

(23,000

)

(23,000

)

Net income available for common shareholders

 

$

39,246

 

$

23,560

 

$

59,981

 

$

61,435

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Net income

 

$

50,746

 

$

35,060

 

$

82,981

 

$

84,435

 

Plus: depreciation and amortization

 

33,589

 

25,048

 

66,310

 

50,091

 

Loss on early extinguishment of debt:

 

 

 

 

 

 

 

 

 

Add: amount included in total expenses

 

—

 

—

 

—

 

2,866

 

Less: portion settled in cash

 

—

 

—

 

—

 

—

 

Less: gain on sale of properties

 

(7,592

)

—

 

(7,592

)

—

 

Less: gain on sale of shares of equity investments

 

—

 

—

 

—

 

(14,805

)

Less: gain on issuance of shares by equity investees

 

(4,708

)

—

 

(4,708

)

(5,040

)

Less: equity in earnings of equity investments

 

(3,052

)

(3,731

)

(6,446

)

(7,531

)

Plus: FFO from equity investments

 

7,355

 

7,201

 

14,036

 

14,625

 

FFO

 

76,338

 

63,578

 

144,581

 

124,641

 

Less: preferred distributions

 

(11,500

)

(11,500

)

(23,000

)

(23,000

)

FFO available for common shareholders

 

$

64,838

 

$

52,078

 

$

121,581

 

$

101,641

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

199,819

 

177,276

 

189,873

 

175,000

 

 

 

 

 

 

 

 

 

 

 

Per common share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.16

 

$

0.13

 

$

0.28

 

$

0.35

 

Net income available for common shareholders

 

0.20

 

0.13

 

0.32

 

0.35

 

FFO available for common shareholders

 

0.32

 

0.29

 

0.64

 

0.58

 

Common distributions paid

 

0.21

 

0.20

 

0.42

 

0.40

 

 

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(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 six months ended June 30, 2004, we sold 3,148 of our Senior Housing common shares and recognized a gain of $14,805.  In addition, we recognized gains of $4,708 and $5,040 during the six months ended June 30, 2005 and 2004, respectively, 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 National Association of Real Estate Investment Trusts, or 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 generally accepted accounting principles, or 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.

 

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HRPT Properties Trust

Consolidated Balance Sheets

(in thousands, except share data)

 

 

 

June 30,
2005

 

December 31,
2004

 

 

 

 

 

(audited)

 

ASSETS

 

 

 

 

 

Real estate properties, at cost:

 

 

 

 

 

Land

 

$

1,050,303

 

$

928,106

 

Buildings and improvements

 

3,861,945

 

3,756,963

 

 

 

4,912,248

 

4,685,069

 

Accumulated depreciation

 

(506,409

)

(454,411

)

 

 

4,405,839

 

4,230,658

 

Acquired real estate leases

 

149,087

 

149,063

 

Equity investments in former subsidiaries

 

207,655

 

207,804

 

Cash and cash equivalents

 

18,921

 

21,961

 

Restricted cash

 

22,282

 

22,257

 

Rents receivable, net of allowance for doubtful accounts of $3,388 and $4,594, respectively

 

126,621

 

113,504

 

Other assets, net

 

82,018

 

68,083

 

Total assets

 

$

5,012,423

 

$

4,813,330

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Revolving credit facility

 

$

236,000

 

$

175,000

 

Senior unsecured debt, net

 

1,640,178

 

1,739,624

 

Mortgage notes payable, net

 

434,346

 

440,407

 

Accounts payable and accrued expenses

 

73,137

 

67,716

 

Acquired real estate lease obligations

 

39,495

 

39,843

 

Rent collected in advance

 

18,048

 

15,208

 

Security deposits

 

12,718

 

11,920

 

Due to affiliates

 

11,454

 

16,418

 

Total liabilities

 

2,465,376

 

2,506,136

 

 

 

 

 

 

 

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 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 outstanding, aggregate liquidation preference $300,000

 

289,849

 

289,849

 

Common shares of beneficial interest, $0.01 par value:

 

 

 

 

 

225,000,000 shares authorized; 199,821,025 and 177,316,525 shares outstanding, respectively

 

1,998

 

1,773

 

Additional paid in capital

 

2,653,791

 

2,394,946

 

Cumulative net income

 

1,370,771

 

1,287,790

 

Cumulative common distributions

 

(1,808,785

)

(1,729,587

)

Cumulative preferred distributions

 

(153,663

)

(130,663

)

Total shareholders’ equity

 

2,547,047

 

2,307,194

 

Total liabilities and shareholders’ equity

 

$

5,012,423

 

$

4,813,330

 

 

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