(Source: Business Wire)
Boston Properties, Inc. (NYSE: BXP), a real estate investment
trust, reported results today for the third quarter ended September 30,
2009.
Funds from Operations (FFO) for the quarter ended September 30, 2009
were $158.5 million, or $1.14 per share basic and $1.13 per share
diluted. This compares to FFO for the quarter ended September 30, 2008
of $132.5 million, or $1.11 per share basic and $1.09 per share diluted.
FFO for the quarters ended September 30, 2009 and 2008 includes
additional non-cash interest expense of $0.06 and $0.04 per share on a
diluted basis, respectively, related to the Company's adoption of
Accounting Standards Codification 470-20 "Debt with Conversion and Other
Options" (formerly known as FSP No. APB 14-1). FFO for the quarter ended
September 30, 2008 also includes non-cash charges of (1) $0.15 per share
on a diluted basis related to the establishment of reserves for the
accrued straight-line rent balances associated with the Company's leases
with Lehman Brothers Inc. and the law firm of Heller Ehrman LLP and (2)
$0.04 per share on a diluted basis related to the partial
ineffectiveness of the Company's interest rate hedging contracts. The
weighted average number of basic and diluted shares outstanding totaled
138,641,262 and 140,685,570, respectively, for the quarter ended
September 30, 2009 and 119,832,474 and 122,830,104, respectively, for
the quarter ended September 30, 2008.
Net income available to common shareholders was $65.8 million for the
quarter ended September 30, 2009, compared to $43.1 million for the
quarter ended September 30, 2008. Net income available to common
shareholders per share (EPS) for the quarter ended September 30, 2009
was $0.47 basic and $0.47 on a diluted basis. This compares to EPS for
the third quarter of 2008 of $0.36 basic and $0.35 on a diluted basis.
EPS includes $0.01 and $0.01, on a diluted basis, related to gains on
sales of real estate for the quarters ended September 30, 2009 and 2008,
respectively.
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 September 30, 2009. In the opinion of management, all adjustments
considered necessary for a fair presentation of these reported results
have been made.
As of September 30, 2009, the Company's portfolio consisted of 146
properties comprising approximately 49.6 million square feet, including
six properties under construction totaling 2.1 million square feet and
one hotel. The overall percentage of leased space for the 139 properties
in service as of September 30, 2009 was 92.1%.
Significant events during the third quarter included:
On July30, 2009, the Company obtained mortgage financing totaling
$50.0 million collateralized by its Reservoir Place property located
in Waltham, Massachusetts. The mortgage financing initially bears
interest at a variable rate equal to LIBOR plus 3.85%per annum and
matures on July30, 2014.
On August 1, 2009, the Company placed in-service Democracy Tower, an
approximately 235,000 net rentable square foot Class A office property
located in Reston, Virginia. The property is 100% leased.
On August3, 2009, the Company used available cash to repay the
mortgage loans collateralized by its 1301 New York Avenue property
located in Washington, DC aggregating approximately $20.5 million. The
mortgage loans bore interest at a weighted-average fixed rate of 6.91%
per annum and were scheduled to mature on August15, 2009. There were
no prepayment penalties.
Transactions completed subsequent to September 30, 2009:
On October9, 2009, the Company's Operating Partnership completed a
public offering of $700.0 million in aggregate principal amount of its
5.875% senior notes due 2019. The notes were priced at 99.931% of the
principal amount to yield 5.884% to maturity. The aggregate net
proceeds to the Operating Partnership, after deducting underwriter
discounts and offering expenses, were approximately $693.7 million.
The notes mature on October15, 2019, unless earlier redeemed.
On October 9, 2009, the Company placed in-service 701 Carnegie Center,
an approximately 120,000 net rentable square foot Class A office
property located in Princeton, New Jersey. The property is 100% leased.
EPS and FFO per Share Guidance:
The Company's guidance for the fourth quarter 2009 and full year 2010
for EPS (diluted) and FFO per share (diluted) is set forth and
reconciled below.
Fourth Quarter 2009 Full Year 2010
Low - High Low - High
Projected EPS (diluted) $ 0.40 - $ 0.42 $ 1.26 - $ 1.46
Add:
Projected Company Share of Real EstateDepreciation and Amortization 0.65 - 0.65 2.75 - 2.75
Less:
Projected Company Share of Gains onSales of Real Estate 0.01 - 0.01 0.01 - 0.01
Projected FFO per Share (diluted) $ 1.04 - $ 1.06 $ 4.00 - $ 4.20
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Except as described below, the foregoing estimates reflect management's
view of current and future market conditions, including assumptions with
respect to rental rates, occupancy levels and the earnings impact of the
events referenced in this release and previously disclosed. The guidance
above includes the additional non-cash interest expense resulting from
the change in accounting for convertible debt instruments. In addition,
the estimates do not include possible future gains or losses or the
impact on operating results from other possible future property
acquisitions or dispositions, or possible future impairment charges. EPS
estimates may be subject to fluctuations as a result of several factors,
including changes in the recognition of depreciation and amortization
expense and any gains or losses associated with disposition activity.
The Company is not able to assess at this time the potential impact of
these factors on projected EPS. By definition, FFO does not include real
estate-related depreciation and amortization or gains or losses
associated with disposition activities. There can be no assurance that
the Company's actual results will not differ materially from the
estimates set forth above.
Boston Properties will host a conference call on Wednesday, October 28,
2009 at 10:00 AM Eastern Time, open to the general public, to discuss
the third quarter 2009 results, the fourth quarter 2009 and fiscal 2010
projections and related assumptions, and other related matters that may
be of interest to investors. The number to call for this interactive
teleconference is (877) 706-4503 (Domestic) or (281) 913-8731
(International) and entering the passcode 34803191. A replay of the
conference call will be available through November 11, 2009, by dialing
(800) 642-1687 (Domestic) or (706) 645-9291 (International) and entering
the passcode 34803191. There will also be a live audio webcast of the
call which may be accessed on the Company's website at www.bostonproperties.com
in the Investor Relations section. Shortly after the call a replay of
the webcast will be available in the Investor Relations section of the
Company's website and archived for up to twelve months following the
call.
Additionally, a copy of Boston Properties' third quarter 2009
"Supplemental Operating and Financial Data" and this press release are
available in the Investor Relations section of the Company's website at www.bostonproperties.com.
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 properties and one hotel. The Company is one of the largest
owners and developers of Class A office properties in the United States,
concentrated in five markets -- Boston, Midtown Manhattan, Washington,
D.C., San Francisco and Princeton, N.J.
This press release contains forward-looking statements within the
meaning of the Federal securities laws. You can identify these
statements by our use of the words "assumes," "believes," "estimates,"
"expects," "guidance," "intends," "plans," "projects" and similar
expressions that do not relate to historical matters. 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, acquisition and disposition activity, the ability to
effectively integrate acquisitions, the costs and availability of
financing, the effectiveness of our interest rate hedging contracts, the
ability of our joint venture partners to satisfy their obligations, the
effects of local economic and market conditions, the effects of
acquisitions, dispositions and possible impairment charges on our
operating results, the impact of newly adopted accounting principles on
the Company's accounting policies and on period-to-period comparisons of
financial results, regulatory changes and other risks and uncertainties
detailed from time to time in the Company's filings with the Securities
and Exchange Commission. Boston Properties does not undertake a
duty to update or revise any forward-looking statement, including its
guidance for the fourth quarter 2009 and full fiscal year 2010, whether
as a result of new information, future events or otherwise.
BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
(in thousands, except for per share amounts)
(unaudited)
Revenue
Rental:
Base rent $ 291,602 $ 266,205 $ 889,983 $ 828,671
Recoveries from tenants 51,901 55,968 154,130 154,700
Parking and other 15,883 16,624 51,240 50,442
Total rental revenue 359,386 338,797 1,095,353 1,033,813
Hotel revenue 6,650 8,482 20,108 24,714
Development and management services 9,754 9,557 26,601 21,494
Interest and other 1,513 1,152 2,275 18,079
Total revenue 377,303 357,988 1,144,337 1,098,100
Expenses
Operating:
Rental 129,020 127,715 377,611 364,551
Hotel 5,418 6,318 16,249 18,664
General and administrative 19,989 18,758 55,941 55,813
Interest 77,090 74,662 234,653 216,460
Depreciation and amortization 78,181 75,321 242,556 224,381
Loss from suspension of development - - 27,766 -
Net derivative losses (gains) - 6,318 - 9,849
Losses from early extinguishments of debt 16 - 510 -
Losses (gains) from investments in securities (1,317 ) 940 (1,924 ) 1,973
Total expenses 308,397 310,032 953,362 891,691
Income before income (loss) from unconsolidated joint ventures, gains on
sales of real estate and net income attributable to noncontrolling interests 68,906 47,956 190,975 206,409
Income (loss) from unconsolidated joint ventures 6,350 2,644 11,096 5,541
Gains on sales of real estate 2,394 1,753 9,682 31,394
Net income 77,650 52,353 211,753 243,344
Net income attributable to noncontrolling interests:
Noncontrolling interests in property partnerships (1,114 ) (525 ) (2,315 ) (1,570 )
Noncontrolling interest - common units of the Operating Partnership (9,662 ) (7,440 ) (27,776 ) (31,042 )
Noncontrolling interest in gains on sales of real estate - common units of
the Operating Partnership (307 ) (256 ) (1,324 ) (4,571 )
Noncontrolling interest - redeemable preferred units of the Operating
Partnership (772 ) (1,053 ) (2,734 ) (3,151 )
Net income attributable to Boston Properties, Inc. $ 65,795 $ 43,079 $ 177,604 $ 203,010
Basic earnings per common share attributable to Boston Properties, Inc.:
Net income $ 0.47 $ 0.36 $ 1.38 $ 1.70
Weighted average number of common shares outstanding 138,641 119,832 128,452 119,708
Diluted earnings per common share attributable to Boston Properties, Inc.:
Net income $ 0.47 $ 0.35 $ 1.38 $ 1.67
Weighted average number of common and common equivalent shares
outstanding 139,225 121,369 128,835 121,236
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BOSTON PROPERTIES, INC.
