Reports diluted FFO per share of $1.12
Reports diluted EPS of $0.43
BOSTON -- (Business Wire)
Boston Properties, Inc. (NYSE: BXP), a real estate investment
trust, reported results today for the first quarter ended March 31, 2012.
Funds from Operations (FFO) for the quarter ended March 31, 2012 were
$166.9 million, or $1.13 per share basic and $1.12 per share diluted.
This compares to FFO for the quarter ended March 31, 2011 of $160.0
million, or $1.13 per share basic and $1.12 per share diluted. The
weighted average number of basic and diluted shares outstanding totaled
148,343,382 and 150,140,431, respectively, for the quarter ended March
31, 2012 and 142,094,867 and 143,965,007, respectively, for the quarter
ended March 31, 2011.
The Company’s reported FFO of $1.12 per share diluted was within the
guidance previously provided of $1.12-$1.14 per share. The Company’s
reported FFO included the following items, among others, that were not
contemplated at the time the previous guidance was issued: compensation
expense of ($0.03) per share associated with the resignation of the
Company’s Chief Operating Officer, transaction costs of ($0.01) per
share and an adjustment to ground rent expense of ($0.02) per share, as
well as the acquisition of 100 Federal Street adding $0.01 per share,
operating expense savings of $0.03 per share and $0.02 per share from
better than expected performance from the Company’s hotel,
unconsolidated joint ventures and third-party fee income.
Net income available to common shareholders was $64.6 million for the
quarter ended March 31, 2012, compared to $40.8 million for the quarter
ended March 31, 2011. Net income available to common shareholders per
share (EPS) for the quarter ended March 31, 2012 was $0.44 basic and
$0.43 on a diluted basis. This compares to EPS for the first quarter of
2011 of $0.29 basic and $0.29 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
ended March 31, 2012. In the opinion of management, all adjustments
considered necessary for a fair presentation of these reported results
have been made.
As of March 31, 2012, the Company’s portfolio consisted of 153
properties, comprised primarily of Class A office space, one hotel,
three residential properties and three retail properties, aggregating
approximately 43.3 million square feet, including eight properties under
construction totaling 2.8 million square feet. In addition, the Company
has structured parking for vehicles containing approximately 15.2
million square feet. The overall percentage of leased space for the 142
properties in service (excluding the two in-service residential
properties and the hotel) as of March 31, 2012 was 92.1%.
Significant events during the first quarter included:
-
On January 3, 2012, the Company commenced the redevelopment of 12300
Sunrise Valley Drive, a Class A office project with approximately
256,000 net rentable square feet located in Reston, Virginia. The
Company will capitalize incremental costs during the redevelopment.
The property is 100% pre-leased.
-
On January 10, 2012, the Company announced that holders of the 2.875%
Exchangeable Senior Notes due 2037 (the “Notes”) of its Operating
Partnership had the right to surrender their Notes for purchase by the
Operating Partnership (the “Put Right”) on February 15, 2012. On
January 10, 2012, the Company also announced that the Operating
Partnership issued a notice of redemption to the holders of the Notes
to redeem, on February 20, 2012 (the “Redemption Date”), all of the
Notes outstanding on the Redemption Date. Holders of an aggregate of
$242,735,000 of the Notes exercised the Put Right and on February 20,
2012, the Company redeemed the remaining $333,459,000 of outstanding
Notes at a redemption price equal to 100% of the principal amount of
the Notes plus accrued and unpaid interest thereon.
-
On January 25, 2012, the Company’s Compensation Committee approved
outperformance awards (the “2012 OPP Awards”) under the Company’s 1997
Stock Option and Incentive Planto officers and
employees of the Company. Recipients of 2012 OPP Awards will share in
a maximum outperformance pool of $40.0 million if the total return to
shareholders, including both share appreciation and dividends, exceeds
absolute and relative hurdles over a three-year measurement period
from February 7, 2012 to February 6, 2015. Earned awards are subject
to two-years of time-based vesting after the performance measurement
date. Under the Financial Accounting Standards Board’s Accounting
Standards Codification (“ASC”) 718 “Compensation – Stock Compensation”
the 2012 OPP Awards have an aggregate value of approximately $7.7
million, which amount will be amortized into earnings over the
five-year plan period under the graded vesting method. The Company
recognized approximately $0.5 million of compensation expense
associated with the 2012 OPP Awards during the first quarter of 2012.
-
On January 31, 2012, the servicer of the non-recourse mortgage loan
collateralized by the Company’s Montvale Center property located in
Gaithersburg, Maryland foreclosed on the property. The Company was not
current on making debt service payments and was accruing interest at
the default interest rate of 9.93% per annum. The loan was originally
scheduled to mature on June 6, 2012. As a result of the foreclosure,
the mortgage loan totaling $25.0 million was extinguished and the
related obligations were satisfied with the transfer of the real
estate and working capital to the servicer. The transaction resulted
in a gain on forgiveness of debt of approximately $17.8 million. The
operating results of the property through the date of foreclosure have
been classified as discontinued operations on a historical basis for
all periods presented.
-
On February 13, 2012, E. Mitchell Norville announced that he would
resign as Executive Vice President, Chief Operating Officer of the
Company effective on February 29, 2012. In connection with his
resignation, Mr. Norville entered into a separation agreement with the
Company. The Company recognized approximately $4.5 million of expense
during the first quarter of 2012 in connection with Mr. Norville’s
resignation.
-
On March 1, 2012, the Company acquired 453 Ravendale Drive located in
Mountain View, California for a purchase price of approximately $6.7
million in cash. 453 Ravendale Drive is an approximately 30,000 net
rentable square foot Office/Technical property that is currently 100%
leased.
-
On March 12, 2012, the Company used available cash to repay the
mortgage loan collateralized by its Bay Colony Corporate Center
property located in Waltham, Massachusetts totaling $143.9 million.
The mortgage financing bore interest at a fixed rate of 6.53% per
annum and was scheduled to mature on June 11, 2012. There was no
prepayment penalty. The Company recognized a gain on early
extinguishment of debt totaling approximately $0.9 million related to
the acceleration of the remaining balance of the historical fair value
debt adjustment.
-
On March 13, 2012, the Company acquired 100 Federal Street in Boston,
Massachusetts for an aggregate investment of approximately $615.0
million in cash. In connection with the transaction, the Company
entered into a long-term lease with an affiliate of Bank of America
for approximately 735,000 square feet. 100 Federal Street is an
approximately 1,264,000 net rentable square foot, 37-story Class A
office tower that is currently 94% leased. The Company projects this
property’s annualized 2012 Unleveraged FFO Return to be 6.1% and
annualized 2012 Unleveraged Cash Return to be 5.0%. The calculation of
these returns and related disclosures are presented on the
accompanying table entitled “Projected Annualized 2012 Returns on
Operating Property Acquisition.” There can be no assurance that actual
returns will not differ materially from these projections.
-
During the first quarter of 2012, the Company utilized its “at the
market” (“ATM”) stock offering program to issue an aggregate of
1,048,800 shares of its common stock for gross proceeds of
approximately $110.5 million and net proceeds of approximately $109.3
million. During the second quarter of 2012 through April 9, 2012, the
Company issued an additional 421,600 shares of its common stock for
gross proceeds of approximately $44.3 million and net proceeds of
approximately $43.8 million. The Company’s ATM stock offering program
provides the Company with the ability to sell from time to time up to
an aggregate of $600.0 million of its common stock through sales
agents for a three-year period. As of May 1, 2012, approximately
$400.3 million remained available for issuance under this ATM program.
Transactions completed subsequent to March 31, 2012:
-
On April 2, 2012, the Company used available cash to repay the
mortgage loan collateralized by its One Freedom Square property
located in Reston, Virginia totaling $65.1 million. The mortgage
financing bore interest at a fixed rate of 7.75% per annum and was
scheduled to mature on June 30, 2012. There was no prepayment penalty.
-
On April 30, 2012, the Company completed and placed in-service 510
Madison Avenue, a Class A office project with approximately 347,000
net rentable square feet located in New York City. The property is 51%
leased.
-
On May 1, 2012, the Company entered into an agreement to sell its
Bedford Business Park properties located in Bedford, Massachusetts for
approximately $62.8 million in cash. Bedford Business Park is
comprised of two Office/Technical buildings and one Class A office
building aggregating approximately 470,000 net rentable square feet.
The sale is subject to the satisfaction of customary closing
conditions and, although there can be no assurance that the sale will
be consummated on the terms currently contemplated or at all, it is
expected to close by the end of the second quarter of 2012.
EPS and FFO per Share Guidance:
The Company’s guidance for the second quarter and full year 2012 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 primary changes to the Company’s
previously issued full year 2012 FFO guidance include an increase of
$0.18 per share due to the acquisition of 100 Federal Street, a ($0.02)
per share reduction due to the pending sale of Bedford Business Park, a
reduction of ($0.03) per share reflecting the full-year impact of shares
previously issued under the Company’s ATM program, a reduction of
($0.06) per share reflecting the items described above that reduced
first quarter FFO and an improvement in the Company’s same store
projections. 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.
|
|
Second Quarter 2012
|
|
|
Full Year 2012
|
| |
Low
|
|
-
|
|
High
| | |
Low
|
|
-
|
|
High
|
|
Projected EPS (diluted)
| |
$
|
0.68
|
|
-
|
|
$
|
0.70
| | |
$
|
2.02
|
|
-
|
|
$
|
2.12
|
| | | | | | | | | | | | |
|
|
Add:
| | | | | | | | | | | | | |
|
Projected Company Share of Real Estate Depreciation and Amortization
| | |
0.78
| |
-
| | |
0.78
| | | |
3.14
| |
-
| | |
3.14
|
|
Less:
| | | | | | | | | | | | | |
|
Projected Company Share of Gains on Sales/Transfers of Real Estate
| | |
0.23
| |
-
| | |
0.23
| | | |
0.33
| |
-
| | |
0.33
|
| |
|
|
|
|
| | |
|
|
|
|
|
Projected FFO per Share (diluted)
| |
$
|
1.23
|
|
-
|
|
$
|
1.25
| | |
$
|
4.83
|
|
-
|
|
$
|
4.93
|
| | | | | | | | | | | | |
|
Boston Properties will host a conference call on Wednesday, May 2, 2012
at 10:00 AM Eastern Time, open to the general public, to discuss the
first quarter 2012 results, the 2012 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 68597663. A replay of the conference call will be available
through May 16, 2012, by dialing (855) 859-2056 (Domestic) or (404)
537-3406 (International) and entering the passcode 68597663. 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’ first quarter 2012
“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 three retail
properties. The Company is one of the largest owners and developers of
Class A office properties in the United States, concentrated in five
markets – Boston, New York, Princeton, 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 second quarter
and full fiscal year 2012, whether as a result of new
information, future events or otherwise.
Financial tables follow.
| BOSTON PROPERTIES, INC. |
| CONSOLIDATED BALANCE SHEETS |
|
|
|
| |
| |
| |
| | | | | March 31, | | December 31, |
| | | | |
| 2012 |
| |
| 2011 |
|
| | | | | | |
|
| | | | | (in thousands, except for share amounts) |
| | | | | (unaudited) |
ASSETS | | | | |
| | | | | | |
|
|
Real estate
| |
$
|
12,937,143
| | |
$
|
12,303,965
| |
|
Construction in progress
| | |
870,006
| | | |
818,685
| |
|
Land held for future development
| | |
268,030
| | | |
266,822
| |
|
Less: accumulated depreciation
| |
|
(2,722,605
|
)
| |
|
(2,642,986
|
)
|
|
Total real estate
| | |
11,352,574
| | | |
10,746,486
| |
| | | | | | |
|
|
Cash and cash equivalents
| | |
591,196
| | | |
1,823,208
| |
|
Cash held in escrows
| | |
30,697
| | | |
40,332
| |
|
Investments in securities
| | |
11,193
| | | |
9,548
| |
|
Tenant and other receivables, net of allowance for doubtful accounts
of $1,370 and $1,766, respectively
| | |
68,275
| | | |
79,838
| |
|
Related party notes receivable
| | |
281,177
| | | |
280,442
| |
|
Interest receivable from related party notes receivable
| | |
95,126
| | | |
89,854
| |
|
Accrued rental income, net of allowance of $2,631 and $2,515,
respectively
| | |
541,153
| | | |
522,675
| |
|
Deferred charges, net
| | |
500,957
| | | |
445,403
| |
|
Prepaid expenses and other assets
| | |
73,132
| | | |
75,458
| |
|
Investments in unconsolidated joint ventures
| |
|
667,377
|
| |
|
669,722
|
|
| |
Total assets
| |
$
|
14,212,857
|
| |
$
|
14,782,966
|
|
| | | | | | |
|
LIABILITIES AND EQUITY | | | | |
| | | | | | |
|
|
Liabilities:
| | | | |
|
Mortgage notes payable
| |
$
|
2,946,760
| | |
$
|
3,123,267
| |
|
Unsecured senior notes, net of discount
| | |
3,865,369
| | | |
3,865,186
| |
|
Unsecured exchangeable senior notes, net of discount
| | |
1,148,497
| | | |
1,715,685
| |
|
Unsecured line of credit
| | |
-
| | | |
-
| |
|
Accounts payable and accrued expenses
| | |
165,441
| | | |
155,139
| |
|
Dividends and distributions payable
| | |
92,615
| | | |
91,901
| |
|
Accrued interest payable
| | |
97,997
| | | |
69,105
| |
|
Other liabilities
| |
|
324,826
|
| |
|
293,515
|
|
| |
Total liabilities
| |
|
8,641,505
|
| |
|
9,313,798
|
|
| | | | | | |
|
|
Commitments and contingencies
| |
|
-
|
| |
|
-
|
|
| | | | | | |
|
|
Noncontrolling interest:
| | | | |
|
Redeemable preferred units of the Operating Partnership
| |
|
51,537
|
| |
|
55,652
|
|
| | | | | | |
|
|
Equity:
| | | | |
|
Stockholders' equity attributable to Boston Properties, Inc.
| | | | |
|
Excess stock, $.01 par value, 150,000,000 shares authorized, none
issued or outstanding
| | |
-
| | | |
-
| |
|
Preferred stock, $.01 par value, 50,000,000 shares authorized, none
issued or outstanding
| | |
-
| | | |
-
| |
|
Common stock, $.01 par value, 250,000,000 shares authorized,
149,463,241 and 148,186,511 shares issued and 149,384,341 and
148,107,611 shares outstanding at March 31, 2012 and December 31,
2011, respectively
| | |
1,494
| | | |
1,481
| |
|
Additional paid-in capital
| | |
5,050,547
| | | |
4,936,457
| |
|
Dividends in excess of earnings
| | |
(70,609
|
)
| | |
(53,080
|
)
|
|
Treasury common stock, at cost
| | |
(2,722
|
)
| | |
(2,722
|
)
|
|
Accumulated other comprehensive loss
| |
|
(15,558
|
)
| |
|
(16,138
|
)
|
| |
Total stockholders' equity attributable to Boston Properties, Inc.
| | |
4,963,152
| | | |
4,865,998
| |
| | | | | | |
|
|
Noncontrolling interests:
| | | | |
| |
Common units of the Operating Partnership
| | |
557,930
| | | |
548,581
| |
| |
Property partnerships
| | |
(1,267
|
)
| | |
(1,063
|
)
|
| | | | |
| |
|
| |
Total equity
| |
|
5,519,815
|
| |
|
5,413,516
|
|
| | | | |
| |
|
| |
Total liabilities and equity
| |
$
|
14,212,857
|
| |
$
|
14,782,966
|
|
| | | | | |
|
| BOSTON PROPERTIES, INC. |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Unaudited) |
|
|
|
|
| |
| |
| |
| | | | | | Three months ended |
| | | | | | March 31, |
| | | | | |
| 2012 |
| |
| 2011 |
|
| | | | | | | |
|
| | | | | | (in thousands, except for per
share amounts) |
| | | | | | | |
|
|
Revenue
| | | | |
| |
Rental
| | | | |
| | |
Base rent
| |
$
|
357,701
| | |
$
|
338,925
| |
| | |
Recoveries from tenants
| | |
52,568
| | | |
45,849
| |
| | |
Parking and other
| |
|
22,428
|
| |
|
19,064
|
|
| | | |
Total rental revenue
| | |
432,697
| | | |
403,838
| |
| |
Hotel revenue
| | |
6,816
| | | |
5,948
| |
| |
Development and management services
| |
|
8,149
|
| |
|
7,428
|
|
| | | |
Total revenue
| |
|
447,662
|
| |
|
417,214
|
|
| | | | | | | |
|
|
Expenses
| | | | |
| |
Operating
| | | | |
| | |
Rental
| | |
157,506
| | | |
139,630
| |
| | |
Hotel
| | |
6,099
| | | |
5,739
| |
| |
General and administrative
| | |
27,619
| | | |
24,643
| |
| |
Transaction costs
| | |
2,104
| | | |
72
| |
| |
Depreciation and amortization
| |
|
109,673
|
| |
|
109,237
|
|
| | | |
Total expenses
| |
|
303,001
|
| |
|
279,321
|
|
| | | | | | | |
|
|
Operating income
| | |
144,661
| | | |
137,893
| |
|
Other income (expense)
| | | | |
| |
Income from unconsolidated joint ventures
| | |
11,721
| | | |
7,976
| |
| |
Interest and other income
| | |
1,646
| | | |
974
| |
| |
Gains from investments in securities
| | |
801
| | | |
373
| |
| |
Gains from early extinguishments of debt
| | |
767
| | | |
-
| |
| |
Interest expense
| |
|
(103,237
|
)
| |
|
(98,525
|
)
|
|
Income from continuing operations
| | |
56,359
| | | |
48,691
| |
|
Discontinued operations
| | | | |
| |
Loss from discontinued operations
| | |
(156
|
)
| | |
(497
|
)
|
| |
Gain on forgiveness of debt from discontinued operations
| |
|
17,807
|
| |
|
-
|
|
|
Net income
| | |
74,010
| | | |
48,194
| |
|
Net income attributable to noncontrolling interests
| | | | |
| |
Noncontrolling interests in property partnership
| | |
(546
|
)
| | |
(529
|
)
|
| |
Noncontrolling interest - redeemable preferred units of the
Operating Partnership
| | |
(801
|
)
| | |
(823
|
)
|
| |
Noncontrolling interest - common units of the Operating Partnership
| | |
(6,089
|
)
| | |
(6,090
|
)
|
| |
Noncontrolling interest in discontinued operations - common units of
the Operating Partnership
| |
|
(1,942
|
)
| |
|
61
|
|
|
Net income attributable to Boston Properties, Inc.
| |
$
|
64,632
|
| |
$
|
40,813
|
|
| | | | | | | |
|
|
Basic earnings per common share attributable to Boston Properties,
Inc.:
| | | | |
| |
Income from continuing operations
| |
$
|
0.33
| | |
$
|
0.29
| |
| |
Discontinued operations
| |
|
0.11
|
| |
|
-
|
|
| |
Net income
| |
$
|
0.44
|
| |
$
|
0.29
|
|
| | | | | | | |
|
| |
Weighted average number of common shares outstanding
| |
|
148,343
|
| |
|
142,095
|
|
| | | | | | | |
|
|
Diluted earnings per common share attributable to Boston Properties,
Inc.:
| | | | |
| |
Income from continuing operations
| |
$
|
0.33
| | |
$
|
0.29
| |
| |
Discontinued operations
| |
|
0.10
|
| |
|
-
|
|
| |
Net income
| |
$
|
0.43
|
| |
$
|
0.29
|
|
| | | | | | | |
|
| |
Weighted average number of common and common equivalent shares
outstanding
| |
|
148,746
|
| |
|
142,504
|
|
| | | | | |
|
| BOSTON PROPERTIES, INC. |
| FUNDS FROM OPERATIONS (1) |
| (Unaudited) |
|
| | |
| |
| |
| | | | Three months ended |
| | | | March 31, |
| | | |
| 2012 |
| |
| 2011 |
|
| | | | | |
|
| | | | (in thousands, except for per
share amounts) |
| | | | | |
|
|
Net income attributable to Boston Properties, Inc.
| |
$
|
64,632
| | |
$
|
40,813
| |
| | | | | |
|
|
Add:
| | | | | |
|
Noncontrolling interest in discontinued operations - common units
of the Operating Partnership
| | |
1,942
| | | |
(61
|
)
|
|
Noncontrolling interest - common units of the Operating Partnership
| | |
6,089
| | | |
6,090
| |
|
Noncontrolling interest - redeemable preferred units of the
Operating Partnership
| | |
801
| | | |
823
| |
|
Noncontrolling interests in property partnerships
| | |
546
| | | |
529
| |
|
Loss from discontinued operations
| | |
156
| | | |
497
| |
|
Less:
| | | | |
|
Gain on forgiveness of debt from discontinued operations
| |
|
17,807
|
| |
|
-
|
|
| | | | | |
|
|
Income from continuing operations
| | |
56,359
| | | |
48,691
| |
| | | | | |
|
|
Add:
| | | | | |
|
Real estate depreciation and amortization (2)
| | |
132,490
| | | |
136,104
| |
|
Less:
| | | | |
|
Loss from discontinued operations
| | |
156
| | | |
497
| |
|
Noncontrolling interests in property partnership's share of funds
from operations
| | |
1,010
| | | |
993
| |
|
Noncontrolling interest - redeemable preferred units of the
Operating Partnership
| |
|
801
|
| |
|
823
|
|
| | | | | |
|
|
Funds from operations (FFO) attributable to the Operating Partnership
| | |
186,882
| | | |
182,482
| |
| | | | | |
|
|
Less:
| | | | |
|
Noncontrolling interest - common units of the Operating
Partnership's share of funds from operations
| |
|
19,939
|
| |
|
22,502
|
|
| | | | | |
|
|
Funds from operations attributable to Boston Properties, Inc.
| |
$
|
166,943
|
| |
$
|
159,980
|
|
| | | | | |
|
|
Boston Properties, Inc.'s percentage share of funds from operations
- basic
| |
|
89.33
|
%
| |
|
87.67
|
%
|
| | | | | |
|
|
Weighted average shares outstanding - basic
| |
|
148,343
|
| |
|
142,095
|
|
| | | | | |
|
|
FFO per share basic
| |
$
|
1.13
|
| |
$
|
1.13
|
|
| | | | | |
|
|
Weighted average shares outstanding - diluted
| |
|
150,140
|
| |
|
143,965
|
|
| | | | | |
|
|
FFO per share diluted
| |
$
|
1.12
|
| |
$
|
1.12
|
|
| | | | |
|
|
(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
$109,673 and $109,237, our share of unconsolidated joint venture
real estate depreciation and amortization of $23,121 and $27,065,
and depreciation and amortization from discontinued operations of
$64 and $191, less corporate-related depreciation and amortization
of $368 and $389 for the three months ended March 31, 2012 and 2011,
respectively.
|
| |
|
| BOSTON PROPERTIES, INC. |
| PROJECTED ANNUALIZED 2012 RETURNS ON |
| OPERATING PROPERTY ACQUISITION |
| FOR THE NINE MONTHS ENDING DECEMBER 31, 2012 |
| (dollars in thousands) |
|
|
| |
|
| |
| | | | | 100 Federal |
| | | | | Street |
| | | | |
|
|
Base rent and recoveries from tenants
| | |
$
|
42,532
| |
|
Straight-line rent
| | | |
2,288
| |
|
Fair value lease revenue
| | | |
2,756
| |
|
Parking and other
| | |
|
1,200
|
|
|
Total rental revenue
| | | |
48,776
| |
| | | | |
|
|
Operating Expenses
| | | |
20,820
| |
| | | | |
|
|
Revenue less Operating Expenses
| | | |
27,956
| |
| | | | |
|
|
Depreciation and amortization
| | | |
20,823
| |
| | | | |
|
|
Net income
| | |
$
|
7,133
| |
| | | | |
|
|
Add:
| | | |
|
Depreciation and amortization
| | | |
20,823
| |
| | | | |
|
| Unleveraged FFO (1) | | | $ | 27,956 | |
| | | | |
|
|
Less:
| | | |
|
Straight-line rent
| | | |
(2,288
|
)
|
|
Fair value lease revenue
| | | |
(2,756
|
)
|
| | | | |
|
| Unleveraged Cash | | | $ | 22,912 | |
| | | | |
|
|
Investment
| | |
$
|
615,000
| |
|
Estimated closing and other costs
| | |
|
600
|
|
| Total Unleveraged Investment | | | $ | 615,600 | |
| | | | |
|
| Annualized Unleveraged FFO Return (1) | | | | 6.1 | % |
| | | | |
|
| Annualized Unleveraged Cash Return (2) | | | | 5.0 | % |
| | | |
|
|
(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) (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. Unleveraged FFO
excludes, among other items, interest expense, which may vary
depending on the level of corporate debt or property-specific debt.
Annualized Unleveraged FFO Return is also a non-GAAP financial
measure that is determined by dividing (A) Unleveraged FFO (based on
annualizing the projected results for the nine months ending
December 31, 2012) by (B) the Company's Total Unleveraged
Investment. Management believes projected Annualized Unleveraged FFO
Return is a useful measure in the real estate industry when
determining the appropriate purchase price for a property or
estimating a property's value. When evaluating acquisition
opportunities, management considers, among other factors, projected
Annualized Unleveraged FFO Return because it excludes, among other
items, interest expense (which may vary depending on the level of
corporate debt or property-specific debt), as well as depreciation
and amortization expense (which can vary among owners of identical
assets in similar condition based on historical cost accounting and
useful life estimates). Other factors that management considers
include its cost of capital and available financing alternatives.
Other companies may compute FFO, Unleveraged FFO and Annualized
Unleveraged FFO Return differently and these are not indicators of a
real estate asset’s capacity to generate cash flow.
|
| |
|
|
(2)
| |
Annualized Unleveraged Cash Return is a non-GAAP financial measure
that is determined by dividing (A) Unleveraged Cash (based on
annualizing the projected results for the nine months ending
December 31, 2012) by (B) the Company's Total Unleveraged
Investment. Other real estate companies may calculate this return
differently. Management believes that projected Annualized
Unleveraged Cash Return is also a useful measure of a property's
value when used in addition to Annualized Unleveraged FFO Return
because, by eliminating the effect of straight-lining of rent and
the treatment of in-place above- and below-market leases, it enables
an investor to assess the projected cash on cash return from the
property over the forecasted period.
|
| |
|
| |
Management is presenting these projected returns and related
calculations to assist investors in analyzing the Company's
acquisition. Management does not intend to present this data for any
other purpose, for any other period or for its other properties, and
is not intending for these measures to otherwise provide information
to investors about the Company's financial condition or results of
operations. The Company does not undertake a duty to update any of
these projections. There can be no assurance that actual returns
will not differ materially from these projections.
|
| |
|
| BOSTON PROPERTIES, INC. |
| PORTFOLIO LEASING PERCENTAGES |
|
| |
| |
| |
| | | | |
|
| | | | |
|
| | | % Leased by Location |
| | | March 31, 2012 | | December 31, 2011 |
|
Boston
| |
90.1
|
%
| |
87.1
|
%
|
|
New York
| |
97.7
|
%
| |
97.8
|
%
|
|
Princeton
| |
75.5
|
%
| |
75.8
|
%
|
|
San Francisco
| |
87.2
|
%
| |
87.9
|
%
|
|
Washington, DC
| |
96.8
|
%
| |
96.9
|
%
|
|
Total Portfolio
| |
92.1
|
%
| |
91.3
|
%
|
| | | | |
|
| | | | |
|
| | | | |
|
| | | | |
|
| | | % Leased by Type |
| | | March 31, 2012 | | December 31, 2011 |
|
Class A Office Portfolio
| |
92.1
|
%
| |
91.3
|
%
|
|
Office/Technical Portfolio
| |
92.8
|
%
| |
92.6
|
%
|
|
Total Portfolio
| |
92.1
|
%
| |
91.3
|
%
|
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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