Exhibit 99.1
400 Centre Street, Newton, MA 02458-2076 | 
| tel: (617) 332-3990 fax: (617) 332-2261 |
FOR IMMEDIATE RELEASE
| Contacts: |
| Timothy A. Bonang, Manager of Investor Relations, or |
| Katherine L. Johnston, Investor Relations Analyst |
| (617) 796-8222 |
| www.hrpreit.com |
HRPT Properties Trust Announces Results for the Periods
Ended December 31, 2007
_________________________________________________
Newton, MA (February 14, 2008): HRPT Properties Trust (NYSE: HRP) today announced financial results for the quarter and year ended December 31, 2007.
Results for the quarter ended December 31, 2007:
Net income available for common shareholders was $8.9 million for the quarter ended December 31, 2007, compared to $23.2 million for the same quarter last year. Net income available for common shareholders per share, basic and diluted, (EPS) for the quarters ended December 31, 2007 and 2006 was $0.04 and $0.11, respectively.
Funds from operations (FFO) available for common shareholders for the quarter ended December 31, 2007 was $60.9 million, or $0.27 per share basic and diluted, compared to FFO available for common shareholders for the quarter ended December 31, 2006 of $62.1 million, or $0.30 per share basic and $0.29 per share diluted.
The weighted average number of basic and diluted common shares outstanding totaled 222,926,710 and 252,119,368, respectively, for the quarter ended December 31, 2007, and 210,038,547 and 236,057,778, respectively, for the quarter ended December 31, 2006.
A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the New York Stock Exchange. No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.
Results for the year ended December 31, 2007:
Net income available for common shareholders was $59.5 million for the year ended December 31, 2007, compared to $199.0 million for the same period last year. EPS for the year ended December 31, 2007 was $0.28 per basic and diluted share, compared to EPS for the year ended December 31, 2006 of $0.95 per share basic and $0.94 per share diluted. Net income for the year ended December 31, 2006 included a $116.3 million, or $0.55 per share, gain on sale of equity investments.
FFO available for common shareholders for the year ended December 31, 2007 was $247.6 million, or $1.16 per share basic and $1.12 per share diluted, compared to FFO available for common shareholders for the year ended December 31, 2006 of $251.6 million, or $1.20 per share basic and $1.19 per share diluted.
The weighted average number of basic and diluted common shares outstanding totaled 214,361,204 and 243,553,862, respectively, for the year ended December 31, 2007, and 209,965,233 and 216,523,505 for the year ended December 31, 2006.
Occupancy and Leasing Results:
As of December 31, 2007, 92.9% of HRPT’s total square feet was leased, compared to 92.8% as of September 30, 2007 and 93.1% leased as of December 31, 2006.
HRPT signed new leases for 405,000 square feet and lease renewals for 833,000 square feet during the quarter ended December 31, 2007, for weighted average rental rates that were 5% above prior rents for the same space. Average lease terms for leases signed during the fourth quarter of 2007 were 5.6 years. Commitments for tenant improvement and leasing commission (TI/LC) costs for leases signed during the quarter ended December 31, 2007 totaled $9.33 per square foot on a weighted average basis.
Investing Activities:
During the fourth quarter of 2007, HRPT acquired six properties with 552,000 square feet of space for $73.8 million, excluding closing costs.
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Conference Call:
On Thursday, February 14, 2008, at 1:00 p.m. Eastern Time, Adam Portnoy, Managing Trustee, and John Popeo, Chief Financial Officer, will host a conference call to discuss the fourth quarter 2007 results.
The conference call telephone number is (888) 599-4883. Participants calling from outside the United States and Canada should dial (913) 905-1086. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through 4:00 p.m. Eastern Time Thursday, February 21st. To hear the replay, dial (719) 457-0820. The replay pass code is 5647829.
A live audio webcast of the conference call will also be available in a listen only mode on HRPT’s website, which is located at www.hrpreit.com. Participants wanting to access the webcast should visit the company’s web site about five minutes before the call. The archived webcast will be available for replay on HRPT’s web site for about one week after the call.
Supplemental Data:
A copy of HRPT’s Fourth Quarter 2007 Supplemental Operating and Financial Data is available for download at HRPT’s website, www.hrpreit.com.
HRPT Properties Trust is a real estate investment trust, or REIT, which primarily owns office buildings located throughout the United States. As of December 31, 2007, HRPT owned 535 properties with 64.5 million square feet, including approximately 17 million square feet of leased industrial and commercial lands in Oahu, HI. HRPT is headquartered in Newton, Massachusetts.
Please see the pages attached hereto for a more detailed statement of our operating results and financial condition, along with an explanation of our calculation of FFO.
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HRPT Properties Trust
Consolidated Statements of Income and Funds from Operations
(amounts in thousands, except per share data)
| | Quarter Ended
December 31, | | Year Ended
December 31, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | |
Rental income | | $ | 214,006 | | $ | 205,677 | | $ | 840,010 | | $ | 795,479 | |
| | | | | | | | | |
Expenses: | | | | | | | | | |
Operating expenses | | 85,221 | | 82,708 | | 329,105 | | 310,645 | |
Depreciation and amortization | | 47,599 | | 40,711 | | 182,995 | | 159,803 | |
General and administrative | | 9,067 | | 7,207 | | 35,717 | | 32,133 | |
Total expenses | | 141,887 | | 130,626 | | 547,817 | | 502,581 | |
| | | | | | | | | |
Operating income | | 72,119 | | 75,051 | | 292,193 | | 292,898 | |
| | | | | | | | | |
Interest income | | 853 | | 618 | | 2,295 | | 2,736 | |
Interest expense (including amortization of debt discounts, premiums and deferred financing fees of $1,170, $1,104, $4,377 and $4,452, respectively) | | (44,944 | ) | (39,577 | ) | (171,571 | ) | (165,894 | ) |
Loss on early extinguishment of debt | | — | | — | | (711 | ) | (1,659 | ) |
Equity in earnings of equity investments | | — | | — | | — | | 3,136 | |
Gain on sale of equity investments | | — | | — | | — | | 116,287 | |
Income from continuing operations before income tax expense | | 28,028 | | 36,092 | | 122,206 | | 247,504 | |
Income tax expense | | (395 | ) | — | | (395 | ) | — | |
Income from continuing operations | | 27,633 | | 36,092 | | 121,811 | | 247,504 | |
Income from discontinued operations | | 33 | | 40 | | 223 | | 159 | |
(Loss) gain on sale of properties | | (187 | ) | 1,745 | | 2,221 | | 2,917 | |
Net income | | 27,479 | | 37,877 | | 124,255 | | 250,580 | |
Preferred distributions | | (14,368 | ) | (14,716 | ) | (60,572 | ) | (44,692 | ) |
Excess redemption price paid over carrying value of preferred shares | | (4,230 | ) | — | | (4,230 | ) | (6,914 | ) |
Net income available for common shareholders | | $ | 8,881 | | $ | 23,161 | | $ | 59,453 | | $ | 198,974 | |
| | | | | | | | | |
Calculation of Funds from Operations, or FFO (1): | | | | | | | | | |
Net income | | $ | 27,479 | | $ | 37,877 | | $ | 124,255 | | $ | 250,580 | |
Plus: depreciation and amortization | | 47,603 | | 40,727 | | 183,016 | | 159,957 | |
Loss on early extinguishment of debt: | | | | | | | | | |
Add: amount included in total expenses | | — | | — | | 711 | | 1,659 | |
Less: portion settled in cash | | — | | — | | — | | — | |
Loss (gain) on sale of properties: | | | | | | | | | |
Less: amount included in net income | | 187 | | (1,745 | ) | (2,221 | ) | (2,917 | ) |
Add: land sales | | — | | — | | 2,408 | | — | |
Less: gain on sale of equity investments | | — | | — | | — | | (116,287 | ) |
Less: equity in earnings of equity investments | | — | | — | | — | | (3,136 | ) |
Plus: FFO from equity investments | | — | | — | | — | | 6,426 | |
FFO | | 75,269 | | 76,859 | | 308,169 | | 296,282 | |
Less: preferred distributions | | (14,368 | ) | (14,716 | ) | (60,572 | ) | (44,692 | ) |
FFO available for common shareholders | | $ | 60,901 | | $ | 62,143 | | $ | 247,597 | | $ | 251,590 | |
| | | | | | | | | |
Weighted average common shares outstanding — basic | | 222,927 | | 210,039 | | 214,361 | | 209,965 | |
Weighted average common shares outstanding — diluted (2) | | 252,120 | | 236,058 | | 243,554 | | 216,524 | |
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| | Quarter Ended
December 31, | | Year Ended
December 31, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | |
Per common share: | | | | | | | | | |
Income from continuing operations available for common shareholders — basic and diluted | | $ | 0.04 | | $ | 0.10 | | $ | 0.27 | | $ | 0.93 | |
Income from discontinued operations — basic and diluted | | $ | — | | $ | 0.01 | | $ | 0.01 | | $ | 0.01 | |
Net income available for common shareholders — basic | | $ | 0.04 | | $ | 0.11 | | $ | 0.28 | | $ | 0.95 | |
Net income available for common shareholders — diluted | | $ | 0.04 | | $ | 0.11 | | $ | 0.28 | | $ | 0.94 | |
FFO available for common shareholders — basic | | $ | 0.27 | | $ | 0.30 | | $ | 1.16 | | $ | 1.20 | |
FFO available for common shareholders — diluted | | $ | 0.27 | | $ | 0.29 | | $ | 1.12 | | $ | 1.19 | |
| | | | | | | | | |
Common distributions paid | | $ | 0.21 | | $ | 0.21 | | $ | 0.84 | | $ | 0.84 | |
(1) | We compute FFO as shown in the calculations above. Our calculations of FFO differ from the National Association of Real Estate Investment Trusts, or NAREIT, definition because we add loss on early extinguishment of debt unless settled in cash. We consider FFO to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities. We believe that FFO provides useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense and gains or losses on sales of depreciated operating properties, FFO can facilitate a comparison of operating performance among REITs. FFO does not represent cash generated by operating activities in accordance with generally accepted accounting principles, or GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity. FFO is one important factor considered by our Board of Trustees in determining the amount of distributions to shareholders. Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our revolving credit facility and public debt covenants, the availability of debt and equity capital to us and our expectations of future capital requirements and operating performance. |
| |
(2) | At December 31, 2007, we had 15,180 series D preferred shares that were convertible into 29,193 common shares. The effect of our series D convertible preferred shares on income from continuing operations and net income available for common shareholders per share is anti-dilutive to income but dilutive to FFO for the quarter and year ended December 31, 2007. Set forth below is the calculation of diluted net income available for common shareholders, diluted FFO available for common shareholders and diluted weighted average common shares outstanding. |
| | Quarter Ended
December 31, | | Year Ended
December 31, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | |
Net income available for common shareholders | | $ | 8,881 | | $ | 23,161 | | $ | 59,453 | | $ | 198,974 | |
Add - Series D convertible preferred distributions | | 6,167 | | 5,482 | | 24,668 | | 5,482 | |
Net income available for common shareholders — diluted | | $ | 15,048 | | $ | 28,643 | | $ | 84,121 | | $ | 204,456 | |
| | | | | | | | | |
FFO available for common shareholders | | $ | 60,901 | | $ | 62,143 | | $ | 247,597 | | $ | 251,590 | |
Add - Series D convertible preferred distributions | | 6,167 | | 5,482 | | 24,668 | | 5,482 | |
FFO available for common shareholders — diluted | | $ | 67,068 | | $ | 67,625 | | $ | 272,265 | | $ | 257,072 | |
| | | | | | | | | |
Weighted average common shares outstanding — basic | | 222,927 | | 210,039 | | 214,361 | | 209,965 | |
Effect of Series D preferred shares | | 29,193 | | 26,019 | | 29,193 | | 6,559 | |
Weighted average common shares outstanding — diluted | | 252,120 | | 236,058 | | 243,554 | | 216,524 | |
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HRPT Properties Trust
Consolidated Balance Sheets
(amounts in thousands, except share data)
| | December 31, | |
| | 2007 | | 2006 | |
| | | | (audited) | |
ASSETS | | | | | |
Real estate properties: | | | | | |
Land | | $ | 1,189,684 | | $ | 1,143,109 | |
Buildings and improvements | | 4,966,610 | | 4,619,164 | |
| | 6,156,294 | | 5,762,273 | |
Accumulated depreciation | | (808,216 | ) | (668,460 | ) |
| | 5,348,078 | | 5,093,813 | |
Acquired real estate leases | | 150,672 | | 167,879 | |
Cash and cash equivalents | | 19,879 | | 16,700 | |
Restricted cash | | 18,027 | | 22,718 | |
Rents receivable, net of allowance for doubtful accounts of $6,290 and $4,737, respectively | | 197,967 | | 172,566 | |
Other assets, net | | 124,709 | | 102,273 | |
Total assets | | $ | 5,859,332 | | $ | 5,575,949 | |
| | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
Revolving credit facility | | $ | 140,000 | | $ | 40,000 | |
Senior unsecured debt, net | | 2,239,784 | | 1,941,173 | |
Mortgage notes payable, net | | 394,376 | | 416,058 | |
Accounts payable and accrued expenses | | 89,441 | | 93,734 | |
Dividends payable | | — | | 44,111 | |
Acquired real estate lease obligations | | 41,607 | | 41,833 | |
Rent collected in advance | | 24,779 | | 19,592 | |
Security deposits | | 16,063 | | 15,972 | |
Due to affiliates | | 10,399 | | 12,708 | |
Total liabilities | | 2,956,449 | | 2,625,181 | |
| | | | | |
Shareholders’ equity: | | | | | |
Preferred shares of beneficial interest, $0.01 par value: | | | | | |
50,000,000 shares authorized; | | | | | |
Series B preferred shares; 8 3/4% cumulative redeemable at par on or after September 12, 2007; 7,000,000 and 12,000,000 shares issued and outstanding, respectively, aggregate liquidation preference $175,000 and 300,000, respectively | | 169,079 | | 289,849 | |
Series C preferred shares; 7 1/8% cumulative redeemable at par on or after February 15, 2011; 6,000,000 shares issued and outstanding, aggregate liquidation preference $150,000 | | 145,015 | | 145,015 | |
Series D preferred shares; 6 1/2% cumulative convertible; 15,180,000 shares issued and outstanding, aggregate liquidation preference $379,500 | | 368,270 | | 368,270 | |
Common shares of beneficial interest, $0.01 par value: | | | | | |
350,000,000 shares authorized; 225,444,497 and 210,051,590 shares issued and outstanding, respectively | | 2,254 | | 2,101 | |
Additional paid in capital | | 2,923,455 | | 2,774,461 | |
Cumulative net income | | 1,827,609 | | 1,703,354 | |
Cumulative common distributions | | (2,251,539 | ) | (2,115,299 | ) |
Cumulative preferred distributions | | (281,260 | ) | (216,983 | ) |
Total shareholders’ equity | | 2,902,883 | | 2,950,768 | |
Total liabilities and shareholders’ equity | | $ | 5,859,332 | | $ | 5,575,949 | |
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