Reports diluted FFO per share of $1.26
Reports diluted EPS of $1.14
BOSTON -- (Business Wire)
Boston Properties, Inc. (NYSE: BXP), a real estate investment
trust, reported results today for the fourth quarter ended December 31,
2014.
Results for the quarter ended December 31, 2014
Funds from Operations (FFO) for the quarter ended December 31, 2014 were
$193.2 million, or $1.26 per share basic and $1.26 per share diluted.
This compares to FFO for the quarter ended December 31, 2013 of $197.6
million, or $1.29 per share basic and $1.29 per share diluted. The
weighted average number of basic and diluted shares outstanding totaled
153,127,815 and 153,550,375, respectively, for the quarter ended
December 31, 2014 and 152,798,258 and 153,900,104, respectively, for the
quarter ended December 31, 2013.
The Company’s reported FFO of $1.26 per share diluted was greater than
the guidance previously provided of $1.23-$1.25 per share diluted
primarily due to greater than projected portfolio operations of $0.01
per share and fee income of $0.01 per share.
Net income available to common shareholders was $174.5 million for the
quarter ended December 31, 2014, compared to $88.7 million for the
quarter ended December 31, 2013. Net income available to common
shareholders per share (EPS) for the quarter ended December 31, 2014 was
$1.14 basic and $1.14 on a diluted basis. This compares to EPS for the
fourth quarter of 2013 of $0.58 basic and $0.58 on a diluted basis. Net
income available to common shareholders for the quarter ended December
31, 2014, includes gains on sales of real estate aggregating
approximately $126.1 million, or $0.73 per share basic and $0.73 per
share on a diluted basis, compared to $26.4 million, or $0.15 per share
basic and $0.15 per share on a diluted basis, for the quarter ended
December 31, 2013.
Results for the year ended December 31, 2014
FFO for the year ended December 31, 2014 was $807.5 million, or $5.27
per share basic and $5.26 per share diluted. This compares to FFO for
the year ended December 31, 2013 of $751.5 million, or $4.94 per share
basic and $4.91 per share diluted. The weighted average number of basic
and diluted shares outstanding totaled 153,089,497 and 153,619,632,
respectively, for the year ended December 31, 2014 and 152,200,936 and
153,741,863, respectively, for the year ended December 31, 2013.
Net income available to common shareholders was $433.1 million for the
year ended December 31, 2014, compared to $741.8 million for the year
ended December 31, 2013. Net income available to common shareholders per
share (EPS) for the year ended December 31, 2014 was $2.83 basic and
$2.83 on a diluted basis. This compares to EPS for the year ended
December 31, 2013 of $4.87 basic and $4.86 on a diluted basis.
The reported results are unaudited and there can be no assurance that
the results will not vary from the final information for the quarter and
year ended December 31, 2014. In the opinion of management, all
adjustments considered necessary for a fair presentation of these
reported results have been made.
As of December 31, 2014, the Company’s portfolio consisted of 169
properties, comprised primarily of Class A office space, one hotel,
three residential properties and five retail properties, aggregating
approximately 45.8 million square feet, including ten properties under
construction totaling 3.3 million square feet. In addition, the Company
has structured parking for vehicles containing approximately 15.0
million square feet. The overall percentage of leased space for the 155
properties in service (excluding the three in-service residential
properties and the hotel) as of December 31, 2014 was 91.7%.
Significant events during the fourth quarter included:
-
On October 2, 2014, the Company completed the sale of its Patriots
Park properties, consisting of three Class A office properties
aggregating approximately 706,000 net rentable square feet located in
Reston, Virginia, for a gross sale price of $321.0 million. Net cash
proceeds totaled approximately $319.1 million, resulting in a gain on
sale of real estate totaling approximately $84.6 million. The Company
has agreed to provide rent support payments to the buyer with a
maximum obligation of up to approximately $12.3 million related to the
leasing of 17,762 net rentable square feet at the properties.
-
On October 22, 2014, MIT exercised its right to purchase the Company’s
415 Main Street property (formerly Seven Cambridge Center) located in
Cambridge, Massachusetts on February 1, 2016 for approximately $106
million. As part of its lease signed on July 14, 2004, MIT was granted
a fixed price option to purchase the building at the beginning of the
11th lease year. 415 Main Street is an Office/Technical property with
approximately 231,000 net rentable square feet occupied by the Broad
Institute. The sale is subject to the satisfaction of customary
closing conditions and there can be no assurance that the sale will be
consummated on the terms currently contemplated or at all.
-
On October 24, 2014, the Company completed the sale of a parcel of
land at 130 Third Avenue in Waltham, Massachusetts that is permitted
for 129,000 square feet for a sale price of approximately $14.3
million. Net cash proceeds totaled approximately $13.6 million,
resulting in a gain on sale of real estate totaling approximately $8.3
million.
-
On October 24, 2014, a joint venture in which the Company has a 50%
interest extended the loan collateralized by its Annapolis Junction
Building Six property. At the time of the extension, the outstanding
balance of the construction loan totaled approximately $13.9 million
and bore interest at a variable rate equal to LIBOR plus 1.65% per
annum and was scheduled to mature on November 17, 2014. The extended
loan bears interest at a variable rate equal to LIBOR plus 2.25% per
annum and matures on November 17, 2015. Annapolis Junction Building
Six is a Class A office property with approximately 119,000 net
rentable square feet located in Annapolis, Maryland.
-
On October 30, 2014, the Company completed the sale of a 45% interest
in each of 601 Lexington Avenue in New York City and Atlantic Wharf
Office Building and 100 Federal Street in Boston for an aggregate
gross sale price of approximately $1.827 billion in cash, less the
partner’s pro rata share of the indebtedness secured by 601 Lexington
Avenue. Net cash proceeds totaled approximately $1.497 billion, after
the payment of transaction costs. In connection with the sale, the
Company formed a joint venture for each property with the buyer and
will provide customary property management and leasing services to the
joint ventures. 601 Lexington Avenue is a 1,669,000 square foot Class
A office complex located in Midtown Manhattan. The property consists
of a 59-story tower as well as a six-story low-rise office and retail
building. The property is subject to existing mortgage indebtedness of
approximately $712.9 million. The Atlantic Wharf Office Building is a
791,000 square foot Class A office tower located on Boston's
Waterfront. 100 Federal Street is a 1,323,000 square foot Class A
office tower located in Boston's Financial District. The transaction
did not qualify as a sale of real estate for financial reporting
purposes as the Company continues to control the joint ventures and
will therefore continue to account for the properties on a
consolidated basis in its financial statements. The Company has
accounted for the transaction as an equity transaction and has
recognized noncontrolling interest in its consolidated balance sheets
equal to 45% of the aggregate carrying value of the total equity of
the properties immediately prior to the transaction. The difference
between the net cash proceeds received and the noncontrolling interest
recognized, which difference totals approximately $648.4 million, has
been reflected as an increase to additional paid-in capital in the
Company's consolidated balance sheets. The change in additional
paid-in capital plus the partner’s proportionate share of the
indebtedness secured by 601 Lexington Avenue of approximately $320.8
million, aggregating approximately $969.2 million, has not been
reflected as a gain on sale of real estate in the Company's
consolidated statements of operations.
-
On November 1, 2014, the Company partially placed in-service 535
Mission Street, a Class A office project with approximately 307,000
net rentable square feet located in San Francisco, California. The
property is 66% leased.
-
On November 5, 2014, the Company’s Operating Partnership redeemed
27,773 Series Four Preferred Units for cash totaling approximately
$1.4 million. An aggregate of 12,667 Series Four Preferred Units
remain outstanding and subject to a security interest under a pledge
agreement.
-
On November 6, 2014, the Company entered into an option agreement
pursuant to which the Company has been granted an option to purchase
real property located at 425 Fourth Street in San Francisco,
California. In connection with the execution of the agreement, the
Company paid a non-refundable option payment to the current owner of
$1.0 million. The Company intends to pursue the entitlements necessary
to develop the property. The purchase price has not been determined
and is dependent on the entitlements obtained. There can be no
assurance that the Company will be successful in obtaining the desired
entitlements or that it will ultimately determine to exercise the
option.
-
On November 12, 2014, the Company completed the acquisition of a
parcel of land at 804 Carnegie Center in Princeton, New Jersey for a
purchase price of approximately $3.7 million. 804 Carnegie Center is a
build-to-suit project with approximately 130,000 net rentable square
feet of Class A office space which is currently under construction.
The Company expects that the building will be complete and available
for occupancy during the first quarter of 2016.
-
On December 2, 2014, the Company partially placed in-service 690
Folsom Street, a mixed-use project with approximately 25,000 net
rentable square feet located in San Francisco, California.
-
On December 8, 2014, the Company announced that its Board of Directors
declared a regular quarterly cash dividend of $0.65 per share of
common stock for the period from October 1, 2014 to December 31, 2014
payable on January 28, 2015 to shareholders of record as of the close
of business on December 31, 2014. In addition, the Company announced
that its Board of Directors declared a special cash dividend of $4.50
per common share payable on January 28, 2015 to shareholders of record
as of the close of business on December 31, 2014. The decision to
declare a special dividend was primarily a result of the sale of
approximately $2.3 billion of assets in 2014. The Board of Directors
did not make any change in the Company's policy with respect to
regular quarterly dividends. The payment of the regular quarterly
dividend of $0.65 per share and the special dividend of $4.50 per
share will result in a total payment of $5.15 per share payable on
January 28, 2015. Holders of common units of limited partnership
interest in Boston Properties Limited Partnership, the Company's
Operating Partnership, as of the close of business on December 31,
2014 will receive the same total distribution, payable on January 28,
2015.
-
On December 15, 2014, the Company’s Operating Partnership used
available cash to redeem $300.0 million in aggregate principal amount
of its 5.625% senior notes due April 15, 2015 (the “5.625% Notes”) and
$250.0 million in aggregate principal amount of its 5.000% senior
notes due June 1, 2015 (the “5.000% Notes”). The redemption price for
the 5.625% Notes was determined in accordance with the applicable
indenture and totaled approximately $308.0 million. The redemption
price included approximately $2.8 million of accrued and unpaid
interest to, but not including, the redemption date. Excluding such
accrued and unpaid interest, the redemption price was approximately
101.73% of the principal amount being redeemed. The redemption price
for the 5.000% Notes was determined in accordance with the applicable
indenture and totaled approximately $255.8 million. The redemption
price included approximately $0.5 million of accrued and unpaid
interest to, but not including, the redemption date. Excluding such
accrued and unpaid interest, the redemption price was approximately
102.13% of the principal amount being redeemed. The Company recognized
a loss on early extinguishment of debt totaling approximately $10.6
million, which amount included the payment of the redemption premium
totaling approximately $10.5 million.
-
On December 17, 2014, a joint venture in which the Company has a 25%
nominal ownership interest refinanced with a new lender its mortgage
loan collateralized by 901 New York Avenue located in Washington, DC.
The mortgage loan totaling approximately $150.4 million bore interest
at a fixed rate of 5.19% per annum and was scheduled to mature on
January 1, 2015. The new mortgage loan totaling $225.0 million bears
interest at a fixed rate of 3.61% per annum and matures on January 5,
2025.
-
On December 19, 2014, the Company entered into a joint venture with an
unrelated third party to acquire the air rights for the future
development of the first phase at North Station, consisting of an
atrium hall and podium building containing up to 377,000 net rentable
square feet of retail and office space located in Boston,
Massachusetts. The joint venture partner contributed air rights
parcels and improvements, with a fair value of approximately $13.0
million, for its initial 50% interest in the joint venture. The
Company contributed improvements totaling approximately $4.2 million
and will contribute cash totaling approximately $8.8 million for its
initial 50% interest. In addition, the Company entered into an option
and development rights agreement with its partner pursuant to which
the Company has the right to develop residential, hotel and office
space in future phases, subject to certain terms and conditions
including the partner's right to participate as a venture partner in
each phase of the project.
-
On December 30, 2014, the Company completed the conveyance to an
unrelated third party of a condominium interest in its 75 Ames Street
property located in Cambridge Massachusetts. On May 23, 2011, the
Company had entered into a ground lease for the vacant land parcel at
75 Ames Street and had also entered into a development agreement to
serve as project manager for a 250,000 square foot research laboratory
building to be developed on the site at the ground lessee’s expense
and to also serve, upon completion of development, as property
manager. Gross proceeds to the Company were approximately $56.8
million, including $11.4 million in development fees for the Company’s
services, and were received beginning in May 2011. The cash received
under the ground lease was initially recognized as unearned revenue
and recognized over the 99-year term of the ground lease as ground
lease revenue totaling approximately $459,000 per year prior to the
conveyance of the condominium interest. As a result of the conveyance
and the transfer of title, the Company recognized a gain on sale of
real estate totaling approximately $33.8 million during the three
months ended December 31, 2014.
Transactions completed subsequent to December 31, 2014:
-
On January 15, 2015, the Company entered into a contract for the sale
of its Residences on The Avenue property located in Washington, DC for
a gross sale price of $196.0 million. The Company has agreed to
provide net operating income support of up to $6.0 million should the
property’s net operating income fail to achieve certain thresholds.
The Residences on The Avenue is comprised of 335 apartment units and
approximately 50,000 net rentable square feet of retail space, subject
to a ground lease that expires on February 1, 2068. The sale is
subject to the satisfaction of customary closing conditions and there
can be no assurance that the sale will be consummated on the terms
currently contemplated or at all.
-
On January 21, 2015, the Company’s Compensation Committee approved the
2015 Multi-Year, Long-Term Incentive Program (the “2015 MYLTIP”) as a
performance-based component of the Company’s overall compensation
program. The Company currently expects that under the Financial
Accounting Standards Board’s Accounting Standards Codification (“ASC”)
718 “Compensation – Stock Compensation,” the 2015 MYLTIP will have an
aggregate value of approximately $15.7 million, which amount will
generally be amortized into earnings over the four-year plan period
under the graded vesting method and has been reflected in the 2015
guidance below.
EPS and FFO per Share Guidance:
The Company’s guidance for the first quarter and full year 2015 for EPS
(diluted) and FFO per share (diluted) is set forth and reconciled below.
Except as described below, the 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 otherwise referenced during the
conference call referred to below. The estimates do not include possible
future gains or losses or the impact on operating results from other
possible future property acquisitions or dispositions, other possible
capital markets activity 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, impairment losses 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 below.
As shown below, the Company has updated its guidance for FFO per share
(diluted) for full year 2015 to $5.28 - $5.43 per share from $5.22 -
$5.42 per share. The updated guidance reflects, when compared to the
Company’s prior guidance, an increase in revenue from development
projects of $0.02 per share, an increase in development and management
services income of $0.01 per share, a decrease in general and
administrative expenses of $0.02 per share and a decrease in FFO of
$0.03 per share due to the expected sale in the first quarter of 2015 of
the Company’s Residences on The Avenue property. In addition, the
Company’s projected gains on sales of real estate include approximately
$0.56 per share from the expected sale in the first quarter of 2015 of
the Company’s Residences on The Avenue property.
|
|
| |
|
| |
| | |
First Quarter 2015
| | |
Full Year 2015
|
| | |
Low
|
|
-
|
|
High
| | |
Low
|
|
-
|
|
High
|
Projected EPS (diluted)
| | |
$
|
0.90
|
|
-
|
|
$
|
0.92
| | |
$
|
2.34
|
|
-
|
|
$
|
2.49
|
| | | | | | | | | | | | | |
|
Add:
| | | | | | | | | | | | | | |
Projected Company Share of Real Estate Depreciation and Amortization
| | | |
0.88
| |
-
| | |
0.88
| | | |
3.50
| |
-
| | |
3.50
|
Less:
| | | | | | | | | | | | | | |
Projected Company Share of Gains on Sales of Real Estate
| | | |
0.56
| |
-
| | |
0.56
| | | |
0.56
| |
-
| | |
0.56
|
| | |
|
|
|
|
| | |
|
|
|
|
|
Projected FFO per Share (diluted)
| | |
$
|
1.22
|
|
-
|
|
$
|
1.24
| | |
$
|
5.28
|
|
-
|
|
$
|
5.43
|
| | | | | | | | | | | | | |
|
Boston Properties will host a conference call on Friday, January 30,
2015 at 9:00 AM Eastern Time, open to the general public, to discuss the
fourth quarter and full year 2014 results, the 2015 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 57045455. A replay of the conference call will be available
through February 13, 2015, by dialing (855) 859-2056 (Domestic) or (404)
537-3406 (International) and entering the passcode 57045455. 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’ fourth quarter 2014
“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 space, one hotel, three residential properties and five retail
properties. The Company is one of the largest owners and developers of
Class A office properties in the United States, concentrated in four
markets – Boston, New York, San Francisco and Washington, DC.
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
Company’s ability to satisfy the closing conditions to the pending
transactions described above, 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 uncertainties of investing in new markets, 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, national and international
economic and market conditions (including the impact of the European
sovereign debt issues), 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 first quarter
and full fiscal year 2015, whether as a result of new information,
future events or otherwise.
Financial tables follow.
BOSTON PROPERTIES, INC. |
CONSOLIDATED BALANCE SHEETS |
|
|
| |
|
| |
| | | December 31, | | | December 31, |
| | | 2014 | | | 2013 |
| | | | | |
|
| | | (in thousands, except for share amounts) |
| | | (unaudited) |
ASSETS | | | | | | |
| | | | | |
|
Real estate
| | |
$
|
18,231,978
| | | |
$
|
17,158,210
| |
Construction in progress
| | | |
736,311
| | | | |
1,523,179
| |
Land held for future development
| | | |
268,114
| | | | |
297,376
| |
Less: accumulated depreciation
| | |
|
(3,547,659
|
)
| | |
|
(3,161,571
|
)
|
Total real estate
| | | |
15,688,744
| | | | |
15,817,194
| |
| | | | | |
|
Cash and cash equivalents
| | | |
1,763,079
| | | | |
2,365,137
| |
Cash held in escrows
| | | |
487,321
| | | | |
57,201
| |
Investments in securities
| | | |
19,459
| | | | |
16,641
| |
Tenant and other receivables, net of allowance for doubtful accounts
of $1,142 and $1,636, respectively
| | | |
46,595
| | | | |
59,464
| |
Accrued rental income, net of allowance of $1,499 and $3,636,
respectively
| | | |
691,999
| | | | |
651,603
| |
Deferred charges, net
| | | |
831,744
| | | | |
884,450
| |
Prepaid expenses and other assets
| | | |
164,432
| | | | |
184,477
| |
Investments in unconsolidated joint ventures
| | |
|
193,394
|
| | |
|
140,097
|
|
Total assets
| | |
$
|
19,886,767
|
| | |
$
|
20,176,264
|
|
| | | | | |
|
LIABILITIES AND EQUITY | | | | | | |
| | | | | |
|
Liabilities:
| | | | | | |
Mortgage notes payable
| | |
$
|
4,309,484
| | | |
$
|
4,449,734
| |
Unsecured senior notes, net of discount
| | | |
5,287,704
| | | | |
5,835,854
| |
Unsecured exchangeable senior notes, net of discount
| | | |
-
| | | | |
744,880
| |
Unsecured line of credit
| | | |
-
| | | | |
-
| |
Mezzanine notes payable
| | | |
309,796
| | | | |
311,040
| |
Outside members' notes payable
| | | |
180,000
| | | | |
180,000
| |
Accounts payable and accrued expenses
| | | |
243,263
| | | | |
202,470
| |
Dividends and distributions payable
| | | |
882,472
| | | | |
497,242
| |
Accrued interest payable
| | | |
163,532
| | | | |
167,523
| |
Other liabilities
| | |
|
502,255
|
| | |
|
592,982
|
|
Total liabilities
| | |
|
11,878,506
|
| | |
|
12,981,725
|
|
| | | | | |
|
Commitments and contingencies
| | |
|
-
|
| | |
|
-
|
|
| | | | | |
|
Noncontrolling interest:
| | | | | | |
Redeemable preferred units of the Operating Partnership
| | |
|
633
|
| | |
|
51,312
|
|
| | | | | |
|
Redeemable interest in property partnership
| | |
|
104,692
|
| | |
|
99,609
|
|
| | | | | |
|
Equity:
| | | | | | |
Stockholders' equity attributable to Boston Properties, Inc.
| | | | | | |
Excess stock, $0.01 par value, 150,000,000 shares authorized, none
issued or outstanding
| | | |
-
| | | | |
-
| |
Preferred stock, $0.01 par value, 50,000,000 shares authorized;
| | | | | | |
5.25% Series B cumulative redeemable preferred stock, $0.01 par
value, liquidation preference $2,500 per
| | | | | | |
share, 92,000 shares authorized, 80,000 shares issued and
outstanding at December 31, 2014 and
| | | | | | |
December 31, 2013, respectively
| | | |
200,000
| | | | |
200,000
| |
Common stock, $0.01 par value, 250,000,000 shares authorized,
153,192,845 and 153,062,001 shares issued and
| | | | | | |
153,113,945 and 152,983,101 shares outstanding at December 31, 2014
and December 31, 2013, respectively
| | | |
1,531
| | | | |
1,530
| |
Additional paid-in capital
| | | |
6,270,257
| | | | |
5,662,453
| |
Dividends in excess of earnings
| | | |
(762,464
|
)
| | | |
(108,552
|
)
|
Treasury common stock, at cost
| | | |
(2,722
|
)
| | | |
(2,722
|
)
|
Accumulated other comprehensive loss
| | |
|
(9,304
|
)
| | |
|
(11,556
|
)
|
Total stockholders' equity attributable to Boston Properties, Inc.
| | | |
5,697,298
| | | | |
5,741,153
| |
| | | | | |
|
Noncontrolling interests:
| | | | | | |
Common units of the Operating Partnership
| | | |
603,171
| | | | |
576,333
| |
Property partnerships
| | | |
1,602,467
| | | | |
726,132
| |
| | |
| | |
|
Total equity
| | |
|
7,902,936
|
| | |
|
7,043,618
|
|
| | |
| | |
|
Total liabilities and equity
| | |
$
|
19,886,767
|
| | |
$
|
20,176,264
|
|
| | | | | | | | | |
|
|
|
| |
|
| |
|
| |
|
| |
BOSTON PROPERTIES, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(Unaudited) |
| | | | | | | | | | | |
|
| | | Three months ended | | | Year ended |
| | | December 31, | | | December 31, |
| | | 2014 | | | 2013 | | | 2014 | | | 2013 |
| | | | | | | | | | | |
|
| | | (in thousands, except for per share amounts) |
Revenue
| | | | | | | | | | | | |
Rental
| | | | | | | | | | | | |
Base rent
| | |
$
|
484,011
| | | |
$
|
453,538
| | | |
$
|
1,886,339
| | | |
$
|
1,675,412
| |
Recoveries from tenants
| | | |
85,946
| | | | |
79,586
| | | | |
339,365
| | | | |
292,944
| |
Parking and other
| | |
|
25,724
|
| | |
|
25,174
|
| | |
|
102,593
|
| | |
|
97,158
|
|
Total rental revenue
| | | |
595,681
| | | | |
558,298
| | | | |
2,328,297
| | | | |
2,065,514
| |
Hotel revenue
| | | |
10,907
| | | | |
10,269
| | | | |
43,385
| | | | |
40,330
| |
Development and management services
| | |
|
7,119
|
| | |
|
7,632
|
| | |
|
25,316
|
| | |
|
29,695
|
|
Total revenue
| | |
|
613,707
|
| | |
|
576,199
|
| | |
|
2,396,998
|
| | |
|
2,135,539
|
|
| | | | | | | | | | | |
|
Expenses
| | | | | | | | | | | | |
Operating
| | | | | | | | | | | | |
Rental
| | | |
211,077
| | | | |
198,588
| | | | |
835,290
| | | | |
742,956
| |
Hotel
| | | |
7,539
| | | | |
7,488
| | | | |
29,236
| | | | |
28,447
| |
General and administrative
| | | |
23,172
| | | | |
20,656
| | | | |
98,937
| | | | |
115,329
| |
Transaction costs
| | | |
640
| | | | |
-
| | | | |
3,140
| | | | |
1,744
| |
Impairment loss
| | | |
-
| | | | |
-
| | | | |
-
| | | | |
8,306
| |
Depreciation and amortization
| | |
|
162,430
|
| | |
|
154,475
|
| | |
|
628,573
|
| | |
|
560,637
|
|
Total expenses
| | |
|
404,858
|
| | |
|
381,207
|
| | |
|
1,595,176
|
| | |
|
1,457,419
|
|
| | | | | | | | | | | |
|
Operating income
| | | |
208,849
| | | | |
194,992
| | | | |
801,822
| | | | |
678,120
| |
Other income (expense)
| | | | | | | | | | | | |
Income from unconsolidated joint ventures
| | | |
2,700
| | | | |
2,834
| | | | |
12,769
| | | | |
75,074
| |
Gains on consolidation of joint ventures
| | | |
-
| | | | |
-
| | | | |
-
| | | | |
385,991
| |
Interest and other income
| | | |
1,924
| | | | |
1,664
| | | | |
8,765
| | | | |
8,310
| |
Gains (losses) from investments in securities
| | | |
387
| | | | |
1,039
| | | | |
1,038
| | | | |
2,911
| |
Gains (losses) from early extinguishments of debt
| | | |
(10,633
|
)
| | | |
-
| | | | |
(10,633
|
)
| | | |
122
| |
Interest expense
| | |
|
(117,904
|
)
| | |
|
(121,134
|
)
| | |
|
(455,743
|
)
| | |
|
(446,880
|
)
|
Income from continuing operations
| | | |
85,323
| | | | |
79,395
| | | | |
358,018
| | | | |
703,648
| |
Discontinued operations
| | | | | | | | | | | | |
Income from discontinued operations
| | | |
-
| | | | |
536
| | | | |
-
| | | | |
8,022
| |
Gain on sale of real estate from discontinued operations
| | | |
-
| | | | |
26,381
| | | | |
-
| | | | |
112,829
| |
Gain on forgiveness of debt from discontinued operations
| | | |
-
| | | | |
-
| | | | |
-
| | | | |
20,182
| |
Impairment loss from discontinued operations
| | |
|
-
|
| | |
|
-
|
| | |
|
-
|
| | |
|
(3,241
|
)
|
Income before gains on sales of real estate
| | | |
85,323
| | | | |
106,312
| | | | |
358,018
| | | | |
841,440
| |
Gains on sales of real estate
| | |
|
126,102
|
| | |
|
-
|
| | |
|
168,039
|
| | |
|
-
|
|
Net income
| | | |
211,425
| | | | |
106,312
| | | | |
526,057
| | | | |
841,440
| |
Net income attributable to noncontrolling interests
| | | | | | | | | | | | |
Noncontrolling interests in property partnerships
| | | |
(13,088
|
)
| | | |
(2,271
|
)
| | | |
(30,561
|
)
| | | |
(1,347
|
)
|
Noncontrolling interest - redeemable preferred units of the
Operating Partnership
| | | |
(9
|
)
| | | |
(2,661
|
)
| | | |
(1,023
|
)
| | | |
(6,046
|
)
|
Noncontrolling interest - common units of the Operating Partnership
| | | |
(21,172
|
)
| | | |
(7,302
|
)
| | | |
(50,862
|
)
| | | |
(70,085
|
)
|
Noncontrolling interest in discontinued operations - common units
of the Operating Partnership
| | |
|
-
|
| | |
|
(2,713
|
)
| | |
|
-
|
| | |
|
(14,151
|
)
|
Net income attributable to Boston Properties, Inc.
| | | |
177,156
| | | | |
91,365
| | | | |
443,611
| | | | |
749,811
| |
Preferred dividends
| | |
|
(2,646
|
)
| | |
|
(2,646
|
)
| | |
|
(10,500
|
)
| | |
|
(8,057
|
)
|
Net income attributable to Boston Properties, Inc. common
shareholders
| | |
$
|
174,510
|
| | |
$
|
88,719
|
| | |
$
|
433,111
|
| | |
$
|
741,754
|
|
| | | | | | | | | | | |
|
Basic earnings per common share attributable to Boston Properties,
Inc. common shareholders:
| | | | | | | | | | | | |
Income from continuing operations
| | |
$
|
1.14
| | | |
$
|
0.42
| | | |
$
|
2.83
| | | |
$
|
4.06
| |
Discontinued operations
| | |
|
-
|
| | |
|
0.16
|
| | |
|
-
|
| | |
|
0.81
|
|
Net income
| | |
$
|
1.14
|
| | |
$
|
0.58
|
| | |
$
|
2.83
|
| | |
$
|
4.87
|
|
| | | | | | | | | | | |
|
Weighted average number of common shares outstanding
| | |
|
153,128
|
| | |
|
152,798
|
| | |
|
153,089
|
| | |
|
152,201
|
|
| | | | | | | | | | | |
|
Diluted earnings per common share attributable to Boston
Properties, Inc. common shareholders:
| | | | | | | | | | | | |
Income from continuing operations
| | |
$
|
1.14
| | | |
$
|
0.42
| | | |
$
|
2.83
| | | |
$
|
4.05
| |
Discontinued operations
| | |
|
-
|
| | |
|
0.16
|
| | |
|
-
|
| | |
|
0.81
|
|
Net income
| | |
$
|
1.14
|
| | |
$
|
0.58
|
| | |
$
|
2.83
|
| | |
$
|
4.86
|
|
| | | | | | | | | | | |
|
Weighted average number of common and common equivalent shares
outstanding
| | |
|
153,550
|
| | |
|
152,932
|
| | |
|
153,308
|
| | |
|
152,521
|
|
| | | | | | | | | | | | | | | | | | | |
|
|
|
| |
|
| |
|
| |
|
| |
BOSTON PROPERTIES, INC. |
FUNDS FROM OPERATIONS (1) |
(Unaudited) |
| | | | | | | | | | | |
|
| | | Three months ended | | | Year ended |
| | | December 31, | | | December 31, |
| | | 2014 | | | 2013 | | | 2014 | | | 2013 |
| | | | | | | | | | | |
|
| | | (in thousands, except for per share amounts) |
| | | | | | | | | | | |
|
Net income attributable to Boston Properties, Inc. common
shareholders
| | |
$
|
174,510
| | | |
$
|
88,719
| | | |
$
|
433,111
| | | |
$
|
741,754
| |
| | | | | | | | | | | |
|
Add:
| | | | | | | | | | | | |
Preferred dividends
| | | |
2,646
| | | | |
2,646
| | | | |
10,500
| | | | |
8,057
| |
Noncontrolling interest in discontinued operations - common units
of the Operating Partnership
| | | |
-
| | | | |
2,713
| | | | |
-
| | | | |
14,151
| |
Noncontrolling interest - common units of the Operating Partnership
| | | |
21,172
| | | | |
7,302
| | | | |
50,862
| | | | |
70,085
| |
Noncontrolling interest - redeemable preferred units of the
Operating Partnership
| | | |
9
| | | | |
2,661
| | | | |
1,023
| | | | |
6,046
| |
Noncontrolling interests in property partnerships
| | | |
13,088
| | | | |
2,271
| | | | |
30,561
| | | | |
1,347
| |
Impairment loss from discontinued operations
| | | |
-
| | | | |
-
| | | | |
-
| | | | |
3,241
| |
Less:
| | | | | | | | | | | | |
Gains on sales of real estate
| | | |
126,102
| | | | |
-
| | | | |
168,039
| | | | |
-
| |
Income from discontinued operations
| | | |
-
| | | | |
536
| | | | |
-
| | | | |
8,022
| |
Gain on sale of real estate from discontinued operations
| | | |
-
| | | | |
26,381
| | | | |
-
| | | | |
112,829
| |
Gain on forgiveness of debt from discontinued operations
| | |
|
-
|
| | |
|
-
|
| | |
|
-
|
| | |
|
20,182
|
|
| | | | | | | | | | | |
|
Income from continuing operations
| | | |
85,323
| | | | |
79,395
| | | | |
358,018
| | | | |
703,648
| |
| | | | | | | | | | | |
|
Add:
| | | | | | | | | | | | |
Real estate depreciation and amortization (2)
| | | |
166,665
| | | | |
159,706
| | | | |
646,463
| | | | |
610,352
| |
Income from discontinued operations
| | | |
-
| | | | |
536
| | | | |
-
| | | | |
8,022
| |
Less:
| | | | | | | | | | | | |
Gains on sales of real estate included within income from
unconsolidated joint ventures (3)
| | | |
-
| | | | |
-
| | | | |
-
| | | | |
54,501
| |
Gains on consolidation of joint ventures (4)
| | | |
-
| | | | |
-
| | | | |
-
| | | | |
385,991
| |
Noncontrolling interests in property partnerships' share of funds
from operations
| | | |
33,866
| | | | |
16,994
| | | | |
93,864
| | | | |
33,930
| |
Noncontrolling interest - redeemable preferred units of the
Operating Partnership (5)
| | | |
9
| | | | |
694
| | | | |
1,023
| | | | |
4,079
| |
Preferred dividends
| | |
|
2,646
|
| | |
|
2,646
|
| | |
|
10,500
|
| | |
|
8,057
|
|
| | | | | | | | | | | |
|
Funds from operations (FFO) attributable to the Operating Partnership
| | | |
215,467
| | | | |
219,303
| | | | |
899,094
| | | | |
835,464
| |
| | | | | | | | | | | |
|
Less:
| | | | | | | | | | | | |
Noncontrolling interest - common units of the Operating
Partnerships' share of funds from operations
| | |
|
22,281
|
| | |
|
21,698
|
| | |
|
91,588
|
| | |
|
84,000
|
|
| | | | | | | | | | | |
|
Funds from operations attributable to Boston Properties, Inc.
| | |
$
|
193,186
|
| | |
$
|
197,605
|
| | |
$
|
807,506
|
| | |
$
|
751,464
|
|
| | | | | | | | | | | |
|
Boston Properties, Inc.'s percentage share of funds from operations
- basic
| | |
|
89.66
|
%
| | |
|
90.11
|
%
| | |
|
89.81
|
%
| | |
|
89.99
|
%
|
| | | | | | | | | | | |
|
Weighted average shares outstanding - basic
| | |
|
153,128
|
| | |
|
152,798
|
| | |
|
153,089
|
| | |
|
152,201
|
|
| | | | | | | | | | | |
|
FFO per share basic
| | |
$
|
1.26
|
| | |
$
|
1.29
|
| | |
$
|
5.27
|
| | |
$
|
4.94
|
|
| | | | | | | | | | | |
|
Weighted average shares outstanding - diluted
| | |
|
153,550
|
| | |
|
153,900
|
| | |
|
153,620
|
| | |
|
153,742
|
|
| | | | | | | | | | | |
|
FFO per share diluted
| | |
$
|
1.26
|
| | |
$
|
1.29
|
| | |
$
|
5.26
|
| | |
$
|
4.91
|
|
| | | | | | | | | | | |
|
(1) Pursuant to the revised definition of Funds from Operations adopted
by the Board of Governors of the National Association of Real Estate
Investment Trusts (“NAREIT”), we calculate Funds from Operations, or
“FFO,” by adjusting net income (loss) attributable to Boston Properties,
Inc. (computed in accordance with GAAP, including non-recurring items)
for gains (or losses) from sales of properties, impairment losses on
depreciable real estate of consolidated real estate, impairment losses
on investments in unconsolidated joint ventures driven by a measurable
decrease in the fair value of depreciable real estate held by the
unconsolidated joint ventures, real estate related depreciation and
amortization, and after adjustment for unconsolidated partnerships and
joint ventures. FFO is a non-GAAP financial measure. The use of FFO,
combined with the required primary GAAP presentations, has been
fundamentally beneficial in improving the understanding of operating
results of REITs among the investing public and making comparisons of
REIT operating results more meaningful. Management generally considers
FFO to be a useful measure for reviewing our comparative operating and
financial performance because, by excluding gains and losses related to
sales of previously depreciated operating real estate assets, impairment
losses and real estate asset depreciation and amortization (which can
vary among owners of identical assets in similar condition based on
historical cost accounting and useful life estimates), FFO can help one
compare the operating performance of a company's real estate between
periods or as compared to different companies.
Our computation of FFO may not be comparable to FFO reported by other
REITs or real estate companies that do not define the term in accordance
with the current NAREIT definition or that interpret the current NAREIT
definition differently.
FFO should not be considered as an alternative to net income
attributable to Boston Properties, Inc. (determined in accordance with
GAAP) as an indication of our performance. FFO does not represent cash
generated from operating activities determined in accordance with GAAP,
and is not a measure of liquidity or an indicator of our ability to make
cash distributions. We believe that to further understand our
performance, FFO should be compared with our reported net income
attributable to Boston Properties, Inc. and considered in addition to
cash flows in accordance with GAAP, as presented in our consolidated
financial statements.
(2) Real estate depreciation and amortization consists of depreciation
and amortization from the Consolidated Statements of Operations of
$162,430, $154,475, $628,573 and $560,637, our share of unconsolidated
joint venture real estate depreciation and amortization of $4,582,
$4,633, $19,251 and $46,214 and depreciation and amortization from
discontinued operations of $0, $934, $0 and $4,760, less
corporate-related depreciation and amortization of $347, $336, $1,361
and $1,259 for the three months and years ended December 31, 2014 and
2013, respectively.
(3) Consists of the portion of income from unconsolidated joint ventures
related to (1) the gain on sale of Eighth Avenue and 46th Street
totaling approximately $11.3 million and (2) the gain on sale of 125
West 55th Street totaling approximately $43.2 million during the year
ended December 31, 2013.
(4) The gains on consolidation of joint ventures consisted of (1) 767
Fifth Avenue (The General Motors Building) totaling approximately $359.5
million and (2) the Company's Value-Added Fund's Mountain View
properties totaling approximately $26.5 million during the year ended
December 31, 2013.
(5) Excludes approximately $2.0 million for the three months and year
ended December 31, 2013 of income allocated to the holders of Series Two
Preferred Units to account for their right to participate on an
as-converted basis in the special dividend that was primarily the result
of the sale of a 45% interest in the Company's Times Square Tower
property.
|
|
| |
|
| |
BOSTON PROPERTIES, INC. |
PORTFOLIO LEASING PERCENTAGES |
| | | | | |
|
| | | | | |
|
| | | | | |
|
| | | % Leased by Location |
| | | December 31, 2014 | | | December 31, 2013 |
Boston
| | |
91.4%
| | |
93.9%
|
New York (1)
| | |
90.9%
| | |
93.0%
|
San Francisco
| | |
88.3%
| | |
89.9%
|
Washington, DC
| | |
94.8%
| | |
95.0%
|
Total Portfolio
| | |
91.7%
| | |
93.4%
|
| | | | | |
|
| | | | | |
|
| | | | | |
|
| | | | | |
|
| | | % Leased by Type |
| | | December 31, 2014 | | | December 31, 2013 |
Class A Office Portfolio
| | |
91.8%
| | |
93.8%
|
Office/Technical Portfolio
| | |
87.7%
| | |
85.4%
|
Total Portfolio
| | |
91.7%
| | |
93.4%
|
| | | | | |
|
(1) Beginning in 2014, the Company has reflected its Princeton portfolio
as the suburban component of its New York region.
Contacts:
Boston Properties, Inc.
Michael Walsh, 617-236-3410
Senior
Vice President, Finance
or
Arista Joyner, 617-236-3343
Investor
Relations Manager
Source: Boston Properties, Inc.
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