EXHIBIT 99.2
BOSTON PROPERTIES, INC.
111 HUNTINGTON AVENUE
BOSTON, MA 02199
(NYSE: BXP)
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
-------------- --------------------------------------------
Douglas T. Linde Marilynn Meek - General Info. (212) 445-8431
Chief Financial Officer Claire Koeneman - Analyst (312) 266-7800
(617) 236-3300 Judith Sylk-Siegel - Media (212) 445-8431
BOSTON PROPERTIES, INC. ANNOUNCES
THIRD QUARTER 2001 RESULTS
REPORTS DILUTED FFO PER SHARE OF $0.91 BEFORE ACCOUNTING
CHARGE RELATED TO SFAS NO. 133
BOSTON, MA, OCTOBER 23, 2001 - BOSTON PROPERTIES, INC. (NYSE: BXP) today
reported results for the third quarter ended September 30, 2001.
Funds from Operations (FFO) for the quarter ended September 30, 2001 were
$86.6 million, or $0.96 per share basic and $0.91 per share diluted before an
accounting charge related to the application of SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" for the quarter ended
September 30, 2001.
FFO for the third quarter of 2001 compares to FFO of $61.5 million, or $0.90 per
share basic and $0.85 per share diluted for the quarter ended September 30,
2000. Excluding the charge related to SFAS No. 133, this represents a 7.1% year
to year increase in diluted FFO per share. The weighted average number of basic
and diluted shares outstanding totaled 90,518,618 and 105,812,336, respectively,
for the quarter ended September 30, 2001 and 68,751,768 and 83,657,357,
respectively, for the same quarter last year.
Net income before the charge related to SFAS No. 133 and gain (loss) on the sale
of real estate, totaled $54.9 million or $0.59 per share diluted in the third
quarter of 2001 as compared to $37.1 million or $0.53 per share diluted for the
same period in 2000. Excluding the charge related to SFAS No. 133 and gain
(loss) on the sale of real estate, this represents an 11.3% per share increase
in diluted net income year over year.
The reported results are unaudited and there can be no assurance that the
results will not vary from the final information for the quarter ended September
30, 2001. In the opinion of management, all adjustments considered necessary for
a fair presentation of these reported results have been made.
-MORE-
As of September 30, 2001, the Company's portfolio consisted of 147 properties
comprising more than 40.9 million square feet, including 13 properties under
development totaling 5.0 million square feet. The overall occupancy rate for the
properties in service as of September 30, 2001 was 96.1 %.
Additional highlights of the third quarter include:
o The refinancing of the mortgage loan collateralized by Sumner Square on
August 8, 2001. The new financing totaling $30.3 million bears interest at a
fixed rate of 7.35% and matures in September 2013.
o The refinancing of the mortgage loan collateralized by One Independence
Square on August 22, 2001. The new financing totaling $75.0 million bears
interest at a rate equal to LIBOR + 1.60% and matures in August 2003.
o The refinancing of the mortgage loan collateralized by 10 & 20 Burlington
Mall Road and 91 Hartwell Avenue on October 1, 2001. The new financing
totaling $40.0 million bears interest at a fixed rate of 7.25% and matures in
October 2011.
o The completion of two development projects consisting of Orbital Sciences
Phase II, an approximately 160,000 square foot office building in Dulles,
Virginia and an approximately 130,000 square foot office building at Quorum
Office Park in Chelmsford, Massachusetts. These projects are 100% leased.
Boston Properties will conduct a conference call tomorrow, October 24, 2001 at
10:00 AM (Eastern Time) to discuss the results of this year's third quarter. The
number to call for this interactive teleconference is (888) 413-4411. A replay
of the conference call will be available through November 1, 2001 by dialing
(888) 266-2086 and entering the passcode 5568450.
Additionally, a copy of Boston Properties' third quarter 2001 "Supplemental
Operating and Financial Data" will be available on the Investor section of the
company's website at HTTP://WWW.BOSTONPROPERTIES.COM. These materials are also
available by contacting Investor Relations at 617-236-3300 or by written request
to:
Investor Relations
Boston Properties, Inc.
111 Huntington Avenue
Boston, MA 02199
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, industrial and hotel properties.
The Company is one of the largest owners and developers of Class A office
properties in the United States, concentrated in four core markets - Boston,
Midtown Manhattan, Washington, DC and San Francisco.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
FEDERAL SECURITIES LAWS. YOU SHOULD EXERCISE CAUTION IN INTERPRETING AND RELYING
ON FORWARD-LOOKING STATEMENTS BECAUSE THEY INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH ARE, IN SOME CASES, BEYOND BOSTON
PROPERTIES' CONTROL AND COULD MATERIALLY AFFECT ACTUAL RESULTS, PERFORMANCE OR
ACHIEVEMENTS. THESE FACTORS INCLUDE, WITHOUT LIMITATION, THE ABILITY TO ENTER
INTO NEW LEASES OR RENEW LEASES ON FAVORABLE TERMS, DEPENDENCE ON TENANTS'
FINANCIAL CONDITION, THE UNCERTAINTIES OF REAL ESTATE DEVELOPMENT AND
ACQUISITION ACTIVITY, THE ABILITY TO EFFECTIVELY INTEGRATE ACQUISITIONS, THE
COSTS AND AVAILABILITY OF FINANCING, THE EFFECTS OF LOCAL ECONOMIC AND MARKET
CONDITIONS, REGULATORY CHANGES AND OTHER RISKS AND UNCERTAINTIES DETAILED FROM
TIME TO TIME IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.
Financial tables follow.
BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
SEPTEMBER 30,
-------------------------------
2001 2000
------------ --------------
(UNAUDITED AND IN THOUSANDS,
EXCEPT FOR PER SHARE AMOUNTS)
Revenue
Rental:
Base rent $ 219,855 $ 183,749
Recoveries from tenants 27,473 22,886
Parking and other 12,965 12,798
--------- ---------
Total rental revenue 260,293 219,433
Development and management services 2,805 2,693
Interest and other 1,616 1,187
--------- ---------
Total revenue 264,714 223,313
--------- ---------
Expenses
Operating 81,475 68,154
General and administrative 9,819 9,871
Interest 59,936 54,752
Depreciation and amortization 38,518 32,436
Loss on investments in securities - -
--------- ---------
Total expenses 189,748 165,213
--------- ---------
Income before net derivative losses, minority interests and income from
unconsolidated joint ventures 74,966 58,100
Net derivative losses (16,620) -
Minority interests in property partnerships 374 (245)
Income from unconsolidated joint ventures 997 549
--------- ---------
Income before minority interest in Operating Partnership 59,717 58,404
Minority interest in Operating Partnership (16,709) (19,627)
--------- ---------
Income before gain (loss) on sale of real estate 43,008 38,777
Gain (loss) on sale of real estate, net of minority interest - (604)
--------- ---------
Income before cumulative effect of a change in accounting principle 43,008 38,173
Cumulative effect of a change in accounting principle, net of minority interest - -
--------- ---------
Net income before preferred dividend 43,008 38,173
Preferred dividend (1,653) (1,643)
--------- ---------
Net income available to common shareholders $ 41,355 $ 36,530
========= =========
Basic earnings per share:
Income before gain (loss) on sale of real estate and cumulative effect of a
change in accounting principle $ 0.46 $ 0.54
Gain (loss) on sale of real estate, net of minority interest - (0.01)
Cumulative effect of a change in accounting principle, net of minority interest - -
--------- ---------
Net income available to common shareholders $ 0.46 $ 0.53
========= =========
Weighted average number of common shares outstanding 90,519 68,752
========= =========
Diluted earnings per share:
Income before gain (loss) on sale of real estate and cumulative effect of a
change in accounting principle $ 0.45 $ 0.53
Gain (loss) on sale of real estate, net of minority interest - (0.01)
Cumulative effect of a change in accounting principle, net of minority interest - -
--------- ---------
Net income available to common shareholders $ 0.45 $ 0.52
========= =========
Weighted average number of common and common
equivalent shares outstanding 92,828 70,661
========= =========
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------------
2001 2000
--------- --------------
(UNAUDITED AND IN THOUSANDS,
EXCEPT FOR PER SHARE AMOUNTS)
Revenue
Rental:
Base rent $ 613,617 $ 532,039
Recoveries from tenants 80,917 68,956
Parking and other 40,244 38,095
--------- ---------
Total rental revenue 734,778 639,090
Development and management services 9,312 8,432
Interest and other 10,349 3,304
--------- ---------
Total revenue 754,439 650,826
--------- ---------
Expenses
Operating 228,683 197,366
General and administrative 29,649 25,868
Interest 163,659 166,210
Depreciation and amortization 109,933 97,062
Loss on investments in securities 6,500 -
--------- ---------
Total expenses 538,424 486,506
--------- ---------
Income before net derivative losses, minority interests and income from
unconsolidated joint ventures 216,015 164,320
Net derivative losses (24,408) -
Minority interests in property partnerships 629 (681)
Income from unconsolidated joint ventures 2,841 1,356
--------- ---------
Income before minority interest in Operating Partnership 195,077 164,995
Minority interest in Operating Partnership (53,871) (56,505)
--------- ---------
Income before gain (loss) on sale of real estate 141,206 108,490
Gain (loss) on sale of real estate, net of minority interest 6,505 (307)
--------- ---------
Income before cumulative effect of a change in accounting principle 147,711 108,183
Cumulative effect of a change in accounting principle, net of minority interest (6,767) -
--------- ---------
Net income before preferred dividend 140,944 108,183
Preferred dividend (4,944) (4,929)
--------- ---------
Net income available to common shareholders $ 136,000 $ 103,254
========= =========
Basic earnings per share:
Income before gain (loss) on sale of real estate and cumulative effect of a
change in accounting principle $ 1.52 $ 1.51
Gain (loss) on sale of real estate, net of minority interest 0.07 -
Cumulative effect of a change in accounting principle, net of minority interest (0.07) -
--------- ---------
Net income available to common shareholders $ 1.52 $ 1.51
========= =========
Weighted average number of common shares outstanding 89,753 68,568
========= =========
Diluted earnings per share:
Income before gain (loss) on sale of real estate and cumulative effect of a
change in accounting principle $ 1.48 $ 1.49
Gain (loss) on sale of real estate, net of minority interest 0.07 (0.01)
Cumulative effect of a change in accounting principle, net of minority interest (0.07) -
--------- ---------
Net income available to common shareholders $ 1.48 $ 1.48
========= =========
Weighted average number of common and common
equivalent shares outstanding 92,004 69,600
========= =========
BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
2001 2000
----------------- ----------------
(IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS)
ASSETS
Real estate: $ 7,297,980 $ 6,112,779
Less: accumulated depreciation (683,029) (586,719)
----------- -----------
Total real estate 6,614,951 5,526,060
Cash and cash equivalents 161,011 280,957
Escrows 20,901 85,561
Investments in securities 4,297 7,012
Tenant and other receivables 28,642 26,852
Accrued rental income 110,441 91,684
Deferred charges, net 104,370 77,319
Prepaid expenses and other assets 46,303 41,154
Investments in unconsolidated joint ventures 90,160 89,871
----------- ------------
Total assets $ 7,181,076 $ 6,226,470
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes and bonds payable $ 4,245,433 $ 3,414,891
Accounts payable and accrued expenses 71,716 57,338
Dividends and distributions payable 79,005 71,274
Interest rate contracts 32,136 -
Accrued interest payable 15,679 5,599
Other liabilities 52,969 51,926
----------- ------------
Total liabilities 4,496,938 3,601,028
----------- ------------
Commitments and contingencies -- --
Minority interests 844,957 877,715
----------- ------------
Series A Convertible Redeemable Preferred Stock, liquidation
preference $50.00 per share, 2,000,000 shares issued
and outstanding 100,000 100,000
----------- ------------
Stockholders' equity:
Excess stock, $.01 par value, 150,000,000 shares
authorized, none issued or outstanding -- --
Common stock, $.01 par value, 250,000,000 shares
authorized, 90,720,477 and 86,630,089 issued and
outstanding in 2001 and 2000, respectively 907 866
Additional paid-in capital 1,784,840 1,673,349
Dividends in excess of earnings (30,456) (13,895)
Unearned compensation (2,242) (848)
Accumulated other comprehensive loss (13,868) (11,745)
----------- ------------
Total stockholders' equity 1,739,181 1,647,727
----------- ------------
Total liabilities and stockholders' equity $ 7,181,076 $ 6,226,470
=========== ============
BOSTON PROPERTIES, INC.
FUNDS FROM OPERATIONS
(UNAUDITED AND IN THOUSANDS)
THREE MONTHS ENDED
SEPTEMBER 30,
--------------------------------
2001 2000
----------- ---------
Income before net derivative losses (SFAS No. 133),
minority interests and income from unconsolidated joint ventures $ 74,966 $ 58,100
Add:
Real estate depreciation and amortization 39,360 33,007
Income from unconsolidated joint ventures 997 549
Less:
Net derivative losses (SFAS No. 133) (16,620) --
Minority property partnerships' share of funds from operations (832) (284)
Preferred dividends and distributions (8,383) (8,248)
-------- -------
Funds from operations $ 89,488 $ 83,124
Add:
Net derivative losses (SFAS No. 133) 16,620 --
-------- -------
Funds from operations before net derivative losses (SFAS No. 133) $106,108 $ 83,124
========= ========
Funds from operations available to common shareholders
before net derivative losses (SFAS No. 133) $ 86,627 $ 61,543
========= ========
Weighted average shares outstanding - basic 90,519 68,752
========= ========
FFO per share basic before net derivative losses (SFAS No. 133) $ 0.96 $ 0.90
========= ========
FFO per share basic after net derivative losses (SFAS No. 133) $ 0.81 $ 0.90
========= ========
Weighted average shares outstanding - diluted 105,812 83,657
========= ========
FFO per share diluted before net derivative losses (SFAS No. 133) $ 0.91 $ 0.85
========= ========
FFO per share diluted after net derivative losses (SFAS No. 133) $ 0.78 $ 0.85
========= ========
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------------------
2001 2000
--------------- ----------
Income before net derivative losses (SFAS No. 133),
minority interests and income from unconsolidated joint ventures $ 216,015 $ 164,320
Add:
Real estate depreciation and amortization 112,516 97,556
Income from unconsolidated joint ventures 2,841 1,356
Less:
Net derivative losses (SFAS No. 133) (24,408) --
Minority property partnerships' share of funds from operations (1,546) (774)
Preferred dividends and distributions (24,864) (24,748)
--------- ----------
Funds from operations $ 280,554 $ 237,710
Add:
Net derivative losses (SFAS No. 133) 24,408 --
--------- ----------
Funds from operations before net derivative losses (SFAS No. 133) $ 304,962 $ 237,710
========= =========
Funds from operations available to common shareholders
before net derivative losses (SFAS No. 133) $ 247,210 $ 175,526
========= =========
Weighted average shares outstanding - basic 89,753 68,568
========= =========
FFO per share basic before net derivative losses (SFAS No. 133) $ 2.76 $ 2.56
========= ==========
FFO per share basic after net derivative losses (SFAS No. 133) $ 2.54 $ 2.56
========= =========
Weighted average shares outstanding - diluted 104,991 82,600
========= =========
FFO per share diluted before net derivative losses (SFAS No. 133) $ 2.62 $ 2.46
========= =========
FFO per share diluted after net derivative losses (SFAS No. 133) $ 2.43 $ 2.46
========= =========
BOSTON PROPERTIES, INC.
PORTFOLIO OCCUPANCY
Occupancy by Location
September 30, 2001 December 31, 2000
---------------------------- --------------------
Greater Boston 92.9% 99.3%
Greater Washington, D.C. 97.8% 98.5%
Midtown Manhattan 99.9% 99.9%
Baltimore, MD 99.6% 99.8%
Richmond, VA 98.6% 100.0%
Princeton/East Brunswick, NJ 92.8% 98.7%
Greater San Francisco 94.5% 97.9%
Bucks County, PA 100.0% 100.0%
--------------------- ------------------
Total Portfolio 96.1% 98.9%
===================== ==================
Occupancy by Type
--------------------------- -----------------------
September 30, 2001 December 31, 2000
--------------------------- -----------------------
Class A Office Portfolio 96.2% 99.0%
Office/Technical Portfolio 97.3% 98.0%
Industrial Portfolio 87.3% 95.9%
Total Portfolio 96.1% 98.9%
====================== =======================
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 23, 2001 BOSTON PROPERTIES, INC.
/s/ Douglas T. Linde
-------------------------------------
By: Douglas T. Linde
Chief Financial Officer