EX-99.1 2 a08-5394_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

 

400 Centre Street, Newton, MA 02458-2076

 

 

 

tel: (617) 332-3990     fax: (617) 332-2261

 

FOR IMMEDIATE RELEASE

 

 

Contacts:

 

Timothy A. Bonang, Manager of Investor Relations, or

 

Katherine L. Johnston, Investor Relations Analyst

 

(617) 796-8222

 

www.hrpreit.com

 

HRPT Properties Trust Announces Results for the Periods

Ended December 31, 2007

_________________________________________________

 

Newton, MA (February 14, 2008): HRPT Properties Trust (NYSE: HRP) today announced financial results for the quarter and year ended December 31, 2007.

 

Results for the quarter ended December 31, 2007:

 

Net income available for common shareholders was $8.9 million for the quarter ended December 31, 2007, compared to $23.2 million for the same quarter last year.  Net income available for common shareholders per share, basic and diluted, (EPS) for the quarters ended December 31, 2007 and 2006 was $0.04 and $0.11, respectively.

 

Funds from operations (FFO) available for common shareholders for the quarter ended December 31, 2007 was $60.9 million, or $0.27 per share basic and diluted, compared to FFO available for common shareholders for the quarter ended December 31, 2006 of $62.1 million, or $0.30 per share basic and $0.29 per share diluted.

 

The weighted average number of basic and diluted common shares outstanding totaled 222,926,710 and 252,119,368, respectively, for the quarter ended December 31, 2007, and 210,038,547 and 236,057,778, respectively, for the quarter ended December 31, 2006.

 

A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the New York Stock Exchange.  No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.

 


 

Results for the year ended December 31, 2007:

 

Net income available for common shareholders was $59.5 million for the year ended December 31, 2007, compared to $199.0 million for the same period last year.  EPS for the year ended December 31, 2007 was $0.28 per basic and diluted share, compared to EPS for the year ended December 31, 2006 of $0.95 per share basic and $0.94 per share diluted.  Net income for the year ended December 31, 2006 included a $116.3 million, or $0.55 per share, gain on sale of equity investments.

 

FFO available for common shareholders for the year ended December 31, 2007 was $247.6 million, or $1.16 per share basic and $1.12 per share diluted, compared to FFO available for common shareholders for the year ended December 31, 2006 of $251.6 million, or $1.20 per share basic and $1.19 per share diluted.

 

The weighted average number of basic and diluted common shares outstanding totaled 214,361,204 and 243,553,862, respectively, for the year ended December 31, 2007, and 209,965,233 and 216,523,505 for the year ended December 31, 2006.

 

Occupancy and Leasing Results:

 

As of December 31, 2007, 92.9% of HRPT’s total square feet was leased, compared to 92.8% as of September 30, 2007 and 93.1% leased as of December 31, 2006.

 

HRPT signed new leases for 405,000 square feet and lease renewals for 833,000 square feet during the quarter ended December 31, 2007, for weighted average rental rates that were 5% above prior rents for the same space.  Average lease terms for leases signed during the fourth quarter of 2007 were 5.6 years.  Commitments for tenant improvement and leasing commission (TI/LC) costs for leases signed during the quarter ended December 31, 2007 totaled $9.33 per square foot on a weighted average basis.

 

Investing Activities:

 

During the fourth quarter of 2007, HRPT acquired six properties with 552,000 square feet of space for $73.8 million, excluding closing costs.

 

2


 

Conference Call:

 

On Thursday, February 14, 2008, at 1:00 p.m. Eastern Time, Adam Portnoy, Managing Trustee, and John Popeo, Chief Financial Officer, will host a conference call to discuss the fourth quarter 2007 results.

 

The conference call telephone number is (888) 599-4883.  Participants calling from outside the United States and Canada should dial (913) 905-1086.  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 4:00 p.m. Eastern Time Thursday, February 21st.  To hear the replay, dial (719) 457-0820.  The replay pass code is 5647829.

 

A live audio webcast of the conference call will also be available in a listen only mode on HRPT’s website, 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 Fourth Quarter 2007 Supplemental Operating and Financial Data is available for download at HRPT’s website, www.hrpreit.com.

 

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, 2007, HRPT owned 535 properties with 64.5 million square feet, including approximately 17 million square feet of leased industrial and commercial lands in Oahu, HI.  HRPT is headquartered in Newton, Massachusetts.

 

Please see the pages attached hereto for a more detailed statement of our operating results and financial condition, along with an explanation of our calculation of FFO.

 

3


 

HRPT Properties Trust

Consolidated Statements of Income and Funds from Operations

(amounts in thousands, except per share data)

 

 

 

Quarter Ended
December 31,

 

Year Ended
December 31,

 

 

 

2007

 

2006

 

2007

 

2006

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

214,006

 

$

205,677

 

$

840,010

 

$

795,479

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Operating expenses

 

85,221

 

82,708

 

329,105

 

310,645

 

Depreciation and amortization

 

47,599

 

40,711

 

182,995

 

159,803

 

General and administrative

 

9,067

 

7,207

 

35,717

 

32,133

 

Total expenses

 

141,887

 

130,626

 

547,817

 

502,581

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

72,119

 

75,051

 

292,193

 

292,898

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

853

 

618

 

2,295

 

2,736

 

Interest expense (including amortization of debt discounts, premiums and deferred financing fees of $1,170, $1,104, $4,377 and $4,452, respectively)

 

(44,944

)

(39,577

)

(171,571

)

(165,894

)

Loss on early extinguishment of debt

 

—

 

—

 

(711

)

(1,659

)

Equity in earnings of equity investments

 

—

 

—

 

—

 

3,136

 

Gain on sale of equity investments

 

—

 

—

 

—

 

116,287

 

Income from continuing operations before income tax expense

 

28,028

 

36,092

 

122,206

 

247,504

 

Income tax expense

 

(395

)

—

 

(395

)

—

 

Income from continuing operations

 

27,633

 

36,092

 

121,811

 

247,504

 

Income from discontinued operations

 

33

 

40

 

223

 

159

 

(Loss) gain on sale of properties

 

(187

)

1,745

 

2,221

 

2,917

 

Net income

 

27,479

 

37,877

 

124,255

 

250,580

 

Preferred distributions

 

(14,368

)

(14,716

)

(60,572

)

(44,692

)

Excess redemption price paid over carrying value of preferred shares

 

(4,230

)

—

 

(4,230

)

(6,914

)

Net income available for common shareholders

 

$

8,881

 

$

23,161

 

$

59,453

 

$

198,974

 

 

 

 

 

 

 

 

 

 

 

Calculation of Funds from Operations, or FFO (1):

 

 

 

 

 

 

 

 

 

Net income

 

$

27,479

 

$

37,877

 

$

124,255

 

$

250,580

 

Plus: depreciation and amortization

 

47,603

 

40,727

 

183,016

 

159,957

 

Loss on early extinguishment of debt:

 

 

 

 

 

 

 

 

 

Add: amount included in total expenses

 

—

 

—

 

711

 

1,659

 

Less: portion settled in cash

 

—

 

—

 

—

 

—

 

Loss (gain) on sale of properties:

 

 

 

 

 

 

 

 

 

Less: amount included in net income

 

187

 

(1,745

)

(2,221

)

(2,917

)

Add: land sales

 

—

 

—

 

2,408

 

—

 

Less: gain on sale of equity investments

 

—

 

—

 

—

 

(116,287

)

Less: equity in earnings of equity investments

 

—

 

—

 

—

 

(3,136

)

Plus: FFO from equity investments

 

—

 

—

 

—

 

6,426

 

FFO

 

75,269

 

76,859

 

308,169

 

296,282

 

Less: preferred distributions

 

(14,368

)

(14,716

)

(60,572

)

(44,692

)

FFO available for common shareholders

 

$

60,901

 

$

62,143

 

$

247,597

 

$

251,590

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — basic

 

222,927

 

210,039

 

214,361

 

209,965

 

Weighted average common shares outstanding — diluted (2)

 

252,120

 

236,058

 

243,554

 

216,524

 

 

4


 

 

 

Quarter Ended
December 31,

 

Year Ended
December 31,

 

 

 

2007

 

2006

 

2007

 

2006

 

 

 

 

 

 

 

 

 

 

 

Per common share:

 

 

 

 

 

 

 

 

 

Income from continuing operations available for common shareholders — basic and diluted

 

$

0.04

 

$

0.10

 

$

0.27

 

$

0.93

 

Income from discontinued operations — basic and diluted

 

$

—

 

$

0.01

 

$

0.01

 

$

0.01

 

Net income available for common shareholders — basic

 

$

0.04

 

$

0.11

 

$

0.28

 

$

0.95

 

Net income available for common shareholders — diluted

 

$

0.04

 

$

0.11

 

$

0.28

 

$

0.94

 

FFO available for common shareholders — basic

 

$

0.27

 

$

0.30

 

$

1.16

 

$

1.20

 

FFO available for common shareholders — diluted

 

$

0.27

 

$

0.29

 

$

1.12

 

$

1.19

 

 

 

 

 

 

 

 

 

 

 

Common distributions paid

 

$

0.21

 

$

0.21

 

$

0.84

 

$

0.84

 

 

(1)

We compute FFO as shown in the calculations above. Our calculations of FFO differ from the National Association of Real Estate Investment Trusts, or NAREIT, definition because we add loss on early extinguishment of debt unless 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 amounts, such as depreciation expense and gains or losses on sales of depreciated operating properties, FFO can facilitate a comparison of 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 credit facility and public debt covenants, the availability of debt and equity capital to us and our expectations of future capital requirements and operating performance.

 

 

(2)

At December 31, 2007, we had 15,180 series D preferred shares that were convertible into 29,193 common shares. The effect of our series D convertible preferred shares on income from continuing operations and net income available for common shareholders per share is anti-dilutive to income but dilutive to FFO for the quarter and year ended December 31, 2007. Set forth below is the calculation of diluted net income available for common shareholders, diluted FFO available for common shareholders and diluted weighted average common shares outstanding.

 

 

 

Quarter Ended
December 31,

 

Year Ended
December 31,

 

 

 

2007

 

2006

 

2007

 

2006

 

 

 

 

 

 

 

 

 

 

 

Net income available for common shareholders

 

$

8,881

 

$

23,161

 

$

59,453

 

$

198,974

 

Add - Series D convertible preferred distributions

 

6,167

 

5,482

 

24,668

 

5,482

 

Net income available for common shareholders — diluted

 

$

15,048

 

$

28,643

 

$

84,121

 

$

204,456

 

 

 

 

 

 

 

 

 

 

 

FFO available for common shareholders

 

$

60,901

 

$

62,143

 

$

247,597

 

$

251,590

 

Add - Series D convertible preferred distributions

 

6,167

 

5,482

 

24,668

 

5,482

 

FFO available for common shareholders — diluted

 

$

67,068

 

$

67,625

 

$

272,265

 

$

257,072

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding — basic

 

222,927

 

210,039

 

214,361

 

209,965

 

Effect of Series D preferred shares

 

29,193

 

26,019

 

29,193

 

6,559

 

Weighted average common shares outstanding — diluted

 

252,120

 

236,058

 

243,554

 

216,524

 

 

5


 

HRPT Properties Trust

Consolidated Balance Sheets

(amounts in thousands, except share data)

 

 

 

December 31,

 

 

 

2007

 

2006

 

 

 

 

 

(audited)

 

ASSETS

 

 

 

 

 

Real estate properties:

 

 

 

 

 

Land

 

$

1,189,684

 

$

1,143,109

 

Buildings and improvements

 

4,966,610

 

4,619,164

 

 

 

6,156,294

 

5,762,273

 

Accumulated depreciation

 

(808,216

)

(668,460

)

 

 

5,348,078

 

5,093,813

 

Acquired real estate leases

 

150,672

 

167,879

 

Cash and cash equivalents

 

19,879

 

16,700

 

Restricted cash

 

18,027

 

22,718

 

Rents receivable, net of allowance for doubtful accounts of $6,290 and $4,737, respectively

 

197,967

 

172,566

 

Other assets, net

 

124,709

 

102,273

 

Total assets

 

$

5,859,332

 

$

5,575,949

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Revolving credit facility

 

$

140,000

 

$

40,000

 

Senior unsecured debt, net

 

2,239,784

 

1,941,173

 

Mortgage notes payable, net

 

394,376

 

416,058

 

Accounts payable and accrued expenses

 

89,441

 

93,734

 

Dividends payable

 

—

 

44,111

 

Acquired real estate lease obligations

 

41,607

 

41,833

 

Rent collected in advance

 

24,779

 

19,592

 

Security deposits

 

16,063

 

15,972

 

Due to affiliates

 

10,399

 

12,708

 

Total liabilities

 

2,956,449

 

2,625,181

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Preferred shares of beneficial interest, $0.01 par value:

 

 

 

 

 

50,000,000 shares authorized;

 

 

 

 

 

Series B preferred shares; 8 3/4% cumulative redeemable at par on or after September 12, 2007; 7,000,000 and 12,000,000 shares issued and outstanding, respectively, aggregate liquidation preference $175,000 and 300,000, respectively

 

169,079

 

289,849

 

Series C preferred shares; 7 1/8% cumulative redeemable at par on or after February 15, 2011; 6,000,000 shares issued and outstanding, aggregate liquidation preference $150,000

 

145,015

 

145,015

 

Series D preferred shares; 6 1/2% cumulative convertible; 15,180,000 shares issued and outstanding, aggregate liquidation preference $379,500

 

368,270

 

368,270

 

Common shares of beneficial interest, $0.01 par value:

 

 

 

 

 

350,000,000 shares authorized; 225,444,497 and 210,051,590 shares issued and outstanding, respectively

 

2,254

 

2,101

 

Additional paid in capital

 

2,923,455

 

2,774,461

 

Cumulative net income

 

1,827,609

 

1,703,354

 

Cumulative common distributions

 

(2,251,539

)

(2,115,299

)

Cumulative preferred distributions

 

(281,260

)

(216,983

)

Total shareholders’ equity

 

2,902,883

 

2,950,768

 

Total liabilities and shareholders’ equity

 

$

5,859,332

 

$

5,575,949

 

 

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