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 (617) 520-7004
(617) 236-3300 Judith Sylk-Siegel - Media (212) 445-8431
BOSTON PROPERTIES, INC. ANNOUNCES
FIRST QUARTER 2002 RESULTS
REPORTS DILUTED FFO PER SHARE OF $0.93
BOSTON, MA, APRIL 23, 2002 - BOSTON PROPERTIES, INC. (NYSE: BXP) today reported
results for the first quarter ended March 31, 2002.
Funds from Operations (FFO) for the quarter ended March 31, 2002, including a
$4.3 million write-down of securities, were $88.9 million, or $0.98 per share
basic and $0.93 per share diluted before an accounting charge related to the
application of SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities" and after an adjustment for early surrender lease payments received.
FFO for the first quarter of 2002 compares to FFO of $79.2 million, or $0.89 per
share basic and $0.85 per share diluted for the quarter ended March 31, 2001.
This represents a 9.4% quarter to quarter increase in diluted FFO per share. The
weighted average number of basic and diluted shares outstanding totaled
90,932,427 and 105,767,653, respectively, for the quarter ended March 31, 2002
and 88,687,900 and 104,160,181, respectively, for the same quarter last year.
Income before the charge related to SFAS No. 133, gain on sale of real estate,
discontinued operations and cumulative effect of a change in accounting
principle and including a $4.3 million write-down of securities totaled $49.2
million or $0.53 per share diluted in the first quarter of 2002 as compared to
$49.6 million or $0.54 per share diluted for the same period in 2001.
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,
2002. In the opinion of management, all adjustments considered necessary for a
fair presentation of these reported results have been made.
As of March 31, 2002, the Company's portfolio consisted of 144 properties
comprising more than 41.2 million square feet, including 10 properties under
development totaling
-MORE-
4.3 million square feet. The overall occupancy rate for the properties in
service as of March 31, 2002 was 95.1 %.
Additional highlights of the first quarter include:
o The completion of the One Discovery Square development project, a 180,052
square foot office building in Reston, Virginia. This project is 100% leased.
o The completion of the 5 Times Square development project, a 1,099,154 square
foot office building in New York City. This project is approximately 98%
leased.
o The completion of the ITT Educational Services development project, a 32,000
square foot building in Springfield, Virginia. This project is 100% leased.
o The closing on March 8, 2002 of construction financing totaling $24.0 million
collateralized by the Shaws Supermarket development project at the Prudential
Center in Boston, Massachusetts. Such financing bears interest at a rate of
LIBOR + 1.40% and matures in September 2003.
o The disposition on March 4, 2002 of Fullerton Square, 7600 Boston Boulevard,
7700 Boston Boulevard and 7702 Boston Boulevard, consisting of five
office/technical properties totaling 374,680 square feet in Springfield,
Virginia for a net gain of approximately $20.7 million, of which $13.5 million
has been deferred.
o The write-down of our investment in the securities of Captivate Network, Inc.
totaling $4.3 million.
o Arthur Andersen LLP has a lease for 620,947 square feet at Times Square Tower.
Times Square Tower is a 1.2 million square foot office property that is
expected to be completed during 2004. Because of our uncertainty over Arthur
Andersen LLP's ultimate space needs, we have begun discussions with them about
options ranging from reducing the size of the leased premises to termination
of the lease. Meanwhile, we continue to actively market space in the building
and are encouraged by the level of interest.
o The GSA preleased 100% of New Dominion Technology Park, Building Two, a
257,400 square foot office building to be developed in Herndon, Virginia. The
building is expected to open in the second quarter of 2004.
o Finnegan Henderson Farabow Garret & Dunner, LLP signed a 251,337 square foot
lease to occupy 47% of 901 New York Avenue. Construction will commence in the
third quarter of 2002 for occupancy at the end of 2004. This property is owned
in partnership with the New York State Common Retirement Fund.
Boston Properties will conduct a conference call tomorrow, April 24, 2002 at 10
AM (Eastern Time) to discuss the results of this year's first quarter. The
number to call for
this interactive teleconference is (888)-806-9467. A replay of the conference
call will be available through May 1, 2002 by dialing (888) 266-2086 and
entering the passcode 5926554.
Additionally, a copy of Boston Properties' first quarter 2002 "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
MARCH 31,
---------------------------
2002 2001
------------- -----------
(UNAUDITED AND IN THOUSANDS,
EXCEPT FOR PER SHARE AMOUNTS)
Revenue
Rental:
Base rent $ 229,106 $ 184,768
Recoveries from tenants 27,712 25,891
Parking and other 12,096 13,746
--------- ---------
Total rental revenue 268,914 224,405
Development and management services 4,134 3,397
Interest and other 1,272 4,444
--------- ---------
Total revenue 274,320 232,246
--------- ---------
Expenses
Operating 85,089 70,070
General and administrative 11,069 9,950
Interest 63,787 47,853
Depreciation and amortization 42,944 34,541
Loss on investments in securities 4,297 --
--------- ---------
Total expenses 207,186 162,414
--------- ---------
Income before net derivative losses, minority interests, income from unconsolidated joint ventures,
minority interest in Operating Partnership, gain on sale of real estate, discontinued operations
cumulative effect of a change in accounting principle and preferred dividend 67,134 69,832
Net derivative losses (303) (3,055)
Minority interests in property partnerships 471 (255)
Income from unconsolidated joint ventures 1,682 1,127
--------- ---------
Income before minority interest in Operating Partnership, gain on sale of real estate, discontinued
operations, cumulative effect of a change in accounting principle and preferred dividend 68,984 67,649
Minority interest in Operating Partnership (18,386) (18,878)
--------- ---------
Income before gain on sale, discontinued operations, cumulative effect of a change in accounting
principle and preferred dividend 50,598 48,771
Gain on sale of real estate, net of minority interest -- 4,654
--------- ---------
Income before discontinued operations, cumulative effect of a change in accounting principle
and preferred dividend 50,598 53,425
Discontinued Operations:
Income from discontinued operations, net of minority interest 570 592
Gain on sales of real estate from discontinued operations, net of minority interest 5,840 --
--------- ---------
Income before cumulative effect of a change in accounting principle and preferred dividend 57,008 54,017
Cumulative effect of a change in accounting principle, net of minority interest -- (6,767)
--------- ---------
Net income before preferred dividend 57,008 47,250
--------- ---------
Preferred dividend (1,643) (1,643)
--------- ---------
Net income available to common shareholders $ 55,365 $ 45,607
========= =========
Basic earnings per share:
Income before discontinued operations and cumulative effect of a change in accounting principle $ 0.54 $ 0.58
Discontinued operations 0.07 0.01
Cumulative effect of a change in accounting principle -- (0.08)
--------- ---------
Net income available to common shareholders $ 0.61 $ 0.51
========= =========
Weighted average number of common shares outstanding 90,932 88,688
========= =========
Diluted earnings per share:
Income before discontinued operations and cumulative effect of a change in accounting principle $ 0.53 $ 0.57
Discontinued operations 0.07 --
Cumulative effect of a change in accounting principle -- (0.07)
--------- ---------
Net income available to common shareholders $ 0.60 $ 0.50
========= =========
Weighted average number of common and common
equivalent shares outstanding 92,783 91,171
========= =========
BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
2002 2001
----------- -----------
(IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS)
(unaudited)
ASSETS
Real estate $ 6,646,802 $ 6,140,021
Development in progress 672,901 1,107,835
Land held for future development 206,098 182,672
Real estate held for sale 13,907 27,378
Less: accumulated depreciation (755,156) (719,854)
----------- -----------
Total real estate 6,784,552 6,738,052
Cash and cash equivalents 71,007 98,067
Escrows 45,216 23,000
Investments in securities -- 4,297
Tenant and other receivables 36,846 43,546
Accrued rental income 133,885 119,494
Deferred charges, net 101,580 107,573
Prepaid expenses and other assets 30,235 20,996
Investments in unconsolidated joint ventures 98,071 98,485
----------- -----------
Total assets $ 7,301,392 $ 7,253,510
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes and bonds payable $ 4,361,233 $ 4,314,942
Accounts payable and accrued expenses 56,125 81,108
Dividends and distributions payable 79,985 79,561
Interest rate contracts 8,635 11,147
Accrued interest payable 15,032 9,080
Other liabilities 75,465 58,859
----------- -----------
Total liabilities 4,596,475 4,554,697
----------- -----------
Commitments and contingencies -- --
----------- -----------
Minority interests 829,687 844,740
----------- -----------
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, 91,137,874 and 90,780,591 issued and
outstanding in 2002 and 2001, respectively 911 908
Additional paid-in capital 1,809,836 1,789,521
Dividends in excess of earnings (15,084) (17,669)
Treasury Common Stock, at cost (2,722) (2,722)
Unearned compensation (3,843) (2,097)
Accumulated other comprehensive loss (13,868) (13,868)
----------- -----------
Total stockholders' equity 1,775,230 1,754,073
----------- -----------
Total liabilities and stockholders' equity $ 7,301,392 $ 7,253,510
=========== ===========
BOSTON PROPERTIES, INC.
FUNDS FROM OPERATIONS
(UNAUDITED AND IN THOUSANDS)
THREE MONTHS ENDED
-------------------------------
MARCH 31,
2002 2001
---------- -------------
Income before net derivative losses (SFAS No. 133), minority interests, income from
unconsolidated joint ventures, minority interests in Operating Partnership, gain
on sales of real estate, discontinued operations, cumulative effect of a change
in accounting principle and preferred dividend $ 67,134 $ 69,832
Add:
Real estate depreciation and amortization 44,499 35,557
Income from discontinued operations 697 738
Income from unconsolidated joint ventures 1,682 1,127
Less:
Net derivative losses (SFAS No. 133) (303) (3,055)
Minority property partnerships' share of funds from operations (719) (303)
Preferred dividends and distributions (8,400) (8,221)
--------- ---------
Funds from operations $ 104,590 $ 95,675
Add (subtract):
Net derivative losses (SFAS No. 133) 303 3,055
Early surrender lease adjustment 3,927 --
--------- ---------
Funds from operations before net derivative losses (SFAS No. 133)
and after early surrender lease adjustment $ 108,820 $ 98,730
========= =========
Funds from operations available to common shareholders before net derivative
losses (SFAS No. 133) and after early surrender lease adjustment $ 88,929 $ 79,201
========= =========
Weighted average shares outstanding - basic 90,932 88,688
========= =========
FFO per share basic before net derivative losses (SFAS No. 133)
and after early surrender adjustment $ 0.98 $ 0.89
========= =========
FFO per share basic after net derivative losses (SFAS No. 133)
and before early surrender lease adjustment $ 0.94 $ 0.87
========= =========
Weighted average shares outstanding - diluted 105,768 104,160
========= =========
FFO per share diluted before net derivative losses (SFAS No. 133)
and after early surrender lease adjustment $ 0.93 $ 0.85
========= =========
FFO per share diluted after net derivative losses (SFAS No. 133)
and before early surrender lease adjustment $ 0.90 $ 0.83
========= =========
(1) Represents cash received under contractual obligations.
BOSTON PROPERTIES, INC
PORTFOLIO OCCUPANCY
Occupancy by Location
March 31, 2002 December 31, 2001
-------------------- ---------------------
Greater Boston 92.8% 92.3%
Greater Washington, D.C. 97.2% 97.8%
Midtown Manhattan 99.2% 99.8%
Baltimore, MD 98.2% 99.2%
Richmond, VA 94.4% 98.4%
Princeton/East Brunswick, NJ 89.4% 88.6%
Greater San Francisco 92.2% 93.5%
Bucks County, PA 100.0% 100.0%
------------------ -------------------
Total Portfolio 95.1% 95.3%
================== ===================
Occupancy by Type
March 31, 2002 December 31, 2001
------------------- -----------------------
Class A Office Portfolio 95.0% 95.4%
Office/Technical Portfolio 97.0% 97.9%
Industrial Portfolio 89.9% 87.3%
------------------- -----------------------
Total Portfolio 95.1% 95.3%
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