EX-99.1 2 a10-5828_3ex99d1.htm EX-99.1

Exhibit 99.1

 

400 Centre Street, Newton, MA 02458-2076

GRAPHIC

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

 

FOR IMMEDIATE RELEASE

 

Contacts:

Timothy A. Bonang, Vice President of Investor Relations, or

Carlynn Finn, Manager of Investor Relations

(617) 796-8222

www.hrpreit.com

 

HRPT Properties Trust Announces Results for the Period

Ended March 31, 2010

 

 

Newton, MA (May 6, 2010): HRPT Properties Trust (NYSE: HRP) today announced financial results for the quarter ended March 31, 2010.

 

Results for the quarter ended March 31, 2010:

 

Funds from operations (FFO) available for common shareholders for the quarter ended March 31, 2010 was $60.0 million, or $0.26 per share basic and diluted, compared to FFO available for common shareholders for the quarter ended March 31, 2009 of $62.8 million, or $0.28 per share basic and $0.27 per share diluted.

 

Net income available for common shareholders was $24.6 million for the quarter ended March 31, 2010, compared to $30.4 million for the same quarter last year.  Net income available for common shareholders per share, basic and diluted, (EPS) for the quarters ended March 31, 2010 and 2009 was $0.11 and $0.13, respectively.

 

The weighted average number of basic and diluted common shares outstanding totaled 226,926,908 and 256,119,566, respectively, for the quarter ended March 31, 2010, and 225,619,502 and 254,812,160, respectively, for the quarter ended March 31, 2009.

 

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.

 


 

Occupancy and Leasing Results (excluding properties classified in discontinued operations):

 

As of March 31, 2010, 86.6% of HRP’s total square feet was leased, compared to 87.4% as of December 31, 2009 and 89.5% as of March 31, 2009.

 

HRP signed lease renewals for 1,098,000 square feet and new leases for 425,000 square feet during the quarter ended March 31, 2010 which had weighted average rental rates that were 2% above prior rents for the same space.  Average lease terms for leases signed during the first quarter of 2010 were 6.4 years.  Commitments for tenant improvement and leasing commission (TI/LC) costs for leases signed during the quarter ended March 31, 2010 totaled $11.27 per square foot on average.

 

Recent Investment Activities:

 

Since April 1, 2010, HRP has acquired two properties and it has entered agreements to acquire 12 additional properties for an aggregate purchase price of $192.9 million, which excludes closing costs:

 

·                  In April 2010, HRP acquired an office property located in Denver, CO with 248,493 square feet.  This property is 100% leased to RE/MAX Realty as its corporate headquarters through 2028.  The purchase price was $75.0 million, excluding closing costs.

 

·                  In April 2010, HRP acquired an office property located in Colorado Springs, CO with 77,411 square feet.  The property is 100% leased to two tenants for a weighted (by rents) average lease term of approximately 4.7 years.  The purchase price is $10.8 million, excluding closing costs.

 

·                  In May 2010, HRP entered a purchase and sale agreement to acquire two office properties located in Carson, CA with a combined 212,000 square feet.  These properties are 100% leased to Northrop Grumman through 2016.  The purchase price is $27.9 million, excluding closing costs.  HRP expects to acquire these properties during the second quarter of 2010; however, this acquisition is subject to customary closing conditions and no assurance can be given that this acquisition will be consummated in that time period or at all.

 

2


 

·                  In May 2010, HRP entered an agreement to acquire MacarthurCook Industrial Property Fund, an Australian listed property trust with units publicly traded on the Australian Securities Exchange under the symbol “MIF”.  MIF currently owns 10 industrial properties with approximately 1.4 million square feet which are approximately 90% leased to 16 tenants for a weighted (by rents) average lease term of approximately five years.  The MIF properties are located in five Australian states: New South Wales (3 properties), Victoria (2 properties), Western Australia (2 properties), Tasmania (2 properties) and Queensland (1 property).  The total consideration is approximately $79.2 million, excluding closing costs, and closing is expected during the second half of 2010.  HRP’s acquisition of MIF is conditioned upon approval of MIF’s unitholders and other customary conditions, including certain conditions applicable to cross border transactions such as Foreign Investment Review Board approval in Australia and various tax rulings; accordingly, these conditions may not be satisfied, the required approvals may not be obtained and this transaction may not close.

 

Recent Financing Activities:

 

During the first quarter of 2010, HRP issued 34.5 million common shares in a public offering, raising net proceeds of approximately $239.1 million.  HRP used the net proceeds from this offering to repay amounts outstanding under its revolving credit facility and for general business purposes, including property acquisitions completed after March 31, 2010.

 

As of both March 31, 2010 and May 5, 2010, HRP had zero drawn and the entire amount available under its $750 million unsecured revolving credit facility.

 

Conference Call:

 

On Thursday, May 6, 2010, 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 first quarter results.  Following the company’s remarks, there will be a short question and answer period.

 

The conference call telephone number is (888) 668-1638.  Participants calling from outside the United States and Canada should dial (913) 312-1477.  No pass code is necessary to access either call.  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 on Thursday, May 13, 2010.  To hear the replay, dial (719) 457-0820.  The replay pass code is 4401435.

 

A live audio webcast of the conference call will also be available in a listen only mode on HRP’s web site, which is located at www.hrpreit.com.  Participants wanting to access the webcast should visit HRP’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.  The recording and retransmission in any way of HRP’s first quarter conference call is strictly prohibited without the prior written consent of HRP.

 

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Supplemental Data:

 

A copy of HRP’s First Quarter 2010 Supplemental Operating and Financial Data is available for download at HRP’s web site, www.hrpreit.com.

 

HRPT Properties Trust is a real estate investment trust, or REIT, which primarily owns office and industrial buildings located throughout the United States.  As of March 31, 2010, HRP owned 518 properties with 66.8 million square feet, including 17.9 million square feet of leased industrial and commercial lands in Oahu, Hawaii.  HRP is headquartered in Newton, Massachusetts.

 

Please see the pages attached hereto for a more detailed statement of our operating results and financial condition and for an explanation of our calculation of FFO.  HRP’s web site is not incorporated as part of this press release.

 

WARNING CONCERNING FORWARD LOOKING STATEMENTS

 

THIS PRESS RELEASE CONTAINS STATEMENTS WHICH CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS.  ALSO, WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE”, OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS.  THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:

 

·                  THIS PRESS RELEASE STATES THAT WE HAVE ENTERED INTO AGREEMENTS TO ACQUIRE ADDITIONAL PROPERTIES, AND THESE AGREEMENTS ARE SUBJECT TO VARIOUS TERMS AND CONDITIONS.  THESE TERMS AND CONDITIONS MAY NOT BE MET AND, AS A RESULT, SOME OF ALL OF THESE TRANSACTIONS MAY NOT OCCUR OR MAY BE DELAYED.

 

OTHER IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS ARE DESCRIBED MORE FULLY UNDER “ITEM 1A. RISK FACTORS” IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2009.

 

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.

 

EXCEPT AS REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

 

(END)

 

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HRPT Properties Trust

Consolidated Statements of Income and Funds from Operations

(amounts in thousands, except per share data)

(unaudited)

 

 

 

Quarter Ended
March 31,

 

 

 

2010

 

2009

 

 

 

 

 

 

 

Rental income

 

$

213,626

 

$

216,971

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

Operating expenses

 

89,574

 

91,741

 

Depreciation and amortization

 

49,780

 

48,390

 

General and administrative

 

9,984

 

9,491

 

Acquisition costs (1)

 

310

 

259

 

Total expenses

 

149,648

 

149,881

 

 

 

 

 

 

 

Operating income

 

63,978

 

67,090

 

 

 

 

 

 

 

Interest and other income

 

1,118

 

145

 

Interest expense (including amortization of debt discounts, premiums and deferred financing fees of $1,931 and $1,642, respectively)

 

(46,482

)

(43,859

)

Gain on early extinguishment of debt

 

—

 

7,513

 

Equity in earnings of equity investments

 

2,339

 

—

 

Gain on issuance of shares by equity investee

 

16,418

 

—

 

Income from continuing operations before income tax expense

 

37,371

 

30,889

 

Income tax expense

 

(182

)

(152

)

Income from continuing operations

 

37,189

 

30,737

 

Discontinued operations:

 

 

 

 

 

Income from discontinued operations

 

108

 

3,630

 

Gain on sale of property

 

—

 

8,745

 

Net income

 

37,297

 

43,112

 

Preferred distributions

 

(12,667

)

(12,667

)

Net income available for common shareholders

 

$

24,630

 

$

30,445

 

 

 

 

 

 

 

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

 

 

 

 

 

Net income

 

$

37,297

 

$

43,112

 

Plus:   depreciation and amortization from continuing operations

 

49,780

 

48,390

 

Plus:   depreciation and amortization from discontinued operations

 

—

 

11

 

Plus:   acquisition costs (1)

 

310

 

259

 

Plus:   FFO from equity investments

 

3,995

 

—

 

Less:   gain on early extinguishment of debt

 

—

 

(7,513

)

Less:   gain on sale of property

 

—

 

(8,745

)

Less:   equity in earnings of equity investments

 

(2,339

)

—

 

Less:   gain on issuance of shares by equity investee

 

(16,418

)

—

 

FFO

 

72,625

 

75,514

 

Less:   preferred distributions

 

(12,667

)

(12,667

)

FFO available for common shareholders

 

$

59,958

 

$

62,847

 

 

 

 

 

 

 

Weighted average common shares outstanding — basic

 

226,927

 

225,619

 

Weighted average common shares outstanding — diluted (3)

 

256,120

 

254,812

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

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

 

$

0.11

 

$

0.08

 

Income from discontinued operations — basic and diluted

 

$

—

 

$

0.05

 

Net income available for common shareholders — basic and diluted

 

$

0.11

 

$

0.13

 

FFO available for common shareholders — basic

 

$

0.26

 

$

0.28

 

FFO available for common shareholders — diluted

 

$

0.26

 

$

0.27

 

 

 

 

 

 

 

Common distributions paid

 

$

0.12

 

$

0.12

 

 

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HRPT Properties Trust

Consolidated Statements of Income and Funds from Operations

(amounts in thousands, except per share data)

 

(1)          Represents the closing costs associated with acquisitions that are expensed under the Business Combinations Topic of the FASB Accounting Standards CodificationTM.

 

(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 acquisition costs as described in Note 1 above, gains from equity investments and gain on early extinguishment of debt, loss on early extinguishment of debt unless settled in cash, and loss on asset impairment.  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 items referred to above, FFO can facilitate a comparison of operating performance between periods and 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.  Also, some REITs may calculate FFO differently than us.

 

(3)          As of March 31, 2010, our 15,180 outstanding series D preferred shares were convertible into 29,193 common shares.  The effect of a conversion of our series D convertible preferred shares on income from continuing operations available for common shareholders per share is anti-dilutive to income, but dilutive to FFO for the quarters ended March 31, 2010 and 2009.  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
March 31,

 

 

 

2010

 

2009

 

 

 

 

 

 

 

Net income available for common shareholders

 

$

24,630

 

$

30,445

 

Add - Series D convertible preferred distributions

 

6,167

 

6,167

 

Net income available for common shareholders — diluted

 

$

30,797

 

$

36,612

 

 

 

 

 

 

 

FFO available for common shareholders

 

$

59,958

 

$

62,847

 

Add - Series D convertible preferred distributions

 

6,167

 

6,167

 

FFO available for common shareholders — diluted

 

$

66,125

 

$

69,014

 

 

 

 

 

 

 

Weighted average common shares outstanding — basic

 

226,927

 

225,619

 

Effect of dilutive Series D preferred shares

 

29,193

 

29,193

 

Weighted average common shares outstanding — diluted

 

256,120

 

254,812

 

 

6


 

HRPT Properties Trust

Consolidated Balance Sheets

(amounts in thousands, except share data)

(unaudited)

 

 

 

March 31,

 

December 31,

 

 

 

2010

 

2009

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Real estate properties:

 

 

 

 

 

Land

 

$

1,237,842

 

$

1,237,842

 

Buildings and improvements

 

5,085,249

 

5,085,839

 

 

 

6,323,091

 

6,323,681

 

Accumulated depreciation

 

(914,934

)

(884,421

)

 

 

5,408,157

 

5,439,260

 

Properties held for sale

 

8,290

 

8,263

 

Acquired real estate leases, net

 

156,877

 

166,453

 

Equity investments

 

173,619

 

158,822

 

Cash and cash equivalents

 

138,702

 

18,204

 

Restricted cash

 

10,490

 

11,662

 

Rents receivable, net of allowance for doubtful accounts of $11,539 and $10,945, respectively

 

203,044

 

194,358

 

Other assets, net

 

135,572

 

124,299

 

Total assets

 

$

6,234,751

 

$

6,121,321

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Revolving credit facility

 

$

—

 

$

110,000

 

Senior unsecured debt, net

 

2,258,801

 

2,258,466

 

Mortgage notes payable, net

 

622,127

 

624,184

 

Other liabilities related to properties held for sale

 

8

 

14

 

Accounts payable and accrued expenses

 

91,407

 

103,608

 

Acquired real estate lease obligations, net

 

45,226

 

47,348

 

Distributions payable

 

—

 

26,863

 

Rent collected in advance

 

33,949

 

30,366

 

Security deposits

 

23,008

 

23,097

 

Due to affiliates

 

10,288

 

8,309

 

Total liabilities

 

3,084,814

 

3,232,255

 

 

 

 

 

 

 

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 shares issued and outstanding, aggregate liquidation preference $175,000

 

169,079

 

169,079

 

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; 258,360,241 and 223,860,241 shares issued and outstanding, respectively

 

2,584

 

2,239

 

Additional paid in capital

 

3,162,936

 

2,924,166

 

Cumulative net income

 

2,274,225

 

2,236,928

 

Cumulative common distributions

 

(2,576,582

)

(2,576,582

)

Cumulative preferred distributions

 

(395,263

)

(382,596

)

Accumulated other comprehensive (loss) income

 

(327

)

2,547

 

Total shareholders’ equity

 

3,149,937

 

2,889,066

 

Total liabilities and shareholders’ equity

 

$

6,234,751

 

$

6,121,321

 

 

7