Exhibit 99.2
Boston Properties, Inc.
800 Boylston Street, Suite 400
Boston, MA 02199
(NYSE: BXP)
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
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Elaine Sellmayer Marilynn Meek - General Info. (212) 445-8431
Investor Relations Claire Koeneman - Analyst (312) 266-7800
(617) 236-3300 Judith Sylk-Siegel - Media (212) 445-8431
BOSTON PROPERTIES, INC. ANNOUNCES
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SECOND QUARTER 2001 RESULTS
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Reports diluted FFO per share of $0.86 before accounting
charge related to SFAS No. 133 of ($0.04) per share
BOSTON, MA, JULY 18, 2001 - Boston Properties, Inc. (NYSE: BXP) today reported
results for the second quarter ended June 30, 2001.
Funds from Operations (FFO) for the quarter ended June 30, 2001 were $81.4
million, or $0.90 per share basic and $0.86 per share diluted before an
accounting charge of approximately ($0.04) per share on a diluted basis related
to the application of SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities" for the quarter ended June 30, 2001.
FFO for the quarter includes a charge of $6.5 million or $0.05 per share
resulting from the write-down of the Company's equity investments ("Technology
Investments") in Allied Riser (NASDAQ:ARCC) and Cypress Communications
(NASDAQ:CYCO). After this write-down, the Company's only remaining Technology
Investment is a $4.3 million investment in Captivate Network Inc., a privately
held company.
FFO for the second quarter of 2001 compares to FFO of $59.3 million, or $0.87
per share basic and $0.83 per share diluted for the quarter ended June 30, 2000.
Excluding the Technology Investment write-down, and the charges related to SFAS
133, this represents a 9.6% year to year increase in diluted FFO per share. The
weighted average number of basic and diluted shares outstanding totaled
89,989,616 and 105,259,081, respectively, for the quarter ended June 30, 2001
and 67,991,227 and 82,582,547, respectively, for the same quarter last year.
Net income before the gain on sale of the Maryland industrial buildings and the
charges related to SFAS 133, totaled $51.0 million or $0.55 per share diluted in
the second quarter of 2001 as compared to $34.6 million or $0.50 per share
diluted for the same period in 2000. Excluding the Technology Investment
write-down, the gain on sale of the
-MORE-
Maryland industrial buildings and the charges related to SFAS 133, this
represents a 22.0% per share increase in 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 June 30,
2001. In the opinion of management, all adjustments considered necessary for a
fair presentation of these reported results have been made.
As of June 30, 2001, the Company's portfolio consisted of 145 properties
comprising more than 40.6 million square feet, including 13 properties under
development totaling 5.1 million square feet. The overall occupancy rate for
the properties in service as of June 30, 2001 was 97.0%.
Additional highlights of the second quarter include:
. The closing of the acquisition of the approximately 1.6 million square foot
office tower in New York City known as Citigroup Center on April 25, 2001.
The acquisition, totaling approximately $755 million, was funded through new
mortgage financing totaling $525 million (bearing interest at a fixed rate of
7.1855% and maturing on May 11, 2011) and equity contributions of $195
million from Boston Properties and $35 million from the Company's joint
venture partner.
. The repayment of mortgage financing totaling $5.8 million collateralized by
Newport Office Park on May 24, 2001.
. The closing of construction financing totaling $493.5 million collateralized
by the Times Square Tower development project in Times Square, New York on
May 29, 2001. Such financing matures on November 29, 2004 and bears interest
at a rate of Eurodollar + 1.95%.
. The disposition of Maryland Industrial Park, Buildings Two and Three,
consisting of two industrial buildings totaling approximately 183,945 square
feet, on June 29, 2001 for net proceeds of approximately $7.6 million. The
property was sold using a like-kind exchange technique with the acquisition
of a parcel of land known as 4/th/ Avenue in Waltham, Massachusetts in the
1/st/ quarter of 2001.
. The completion of two development projects consisting of an approximately
120,000 square foot office building in the Andover Office Park Development in
Andover, Massachusetts and an approximately 178,216 square foot office
building known as 2600 Tower Oaks Boulevard in Rockville, Maryland. These
projects are 76% and 71% leased, respectively.
Boston Properties will conduct a conference call tomorrow, July 19, 2001 at
10:00 AM (Eastern Time) to discuss the results of this year's second quarter.
The number to call for this interactive teleconference is (888) 413-4411. A
replay of the conference call will be
available through July 26, 2001 by dialing (888) 266-2086 and entering the
passcode 5343644.
Additionally, a copy of Boston Properties' second 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
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available by contacting Investor Relations at 617-236-3300 or by written request
to:
Investor Relations
Boston Properties
800 Boylston Street
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 BALANCE SHEETS
June 30, December 31,
2001 2000
-------------------- ----------------------
(unaudited)
(in thousands, except for share amounts)
ASSETS
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Real estate: $ 7,165,977 $ 6,112,779
Less: accumulated depreciation (647,881) (586,719)
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Total real estate 6,518,096 5,526,060
Cash and cash equivalents 165,764 280,957
Escrows 31,577 85,561
Investments in securities 4,297 7,012
Tenant and other receivables 26,337 26,852
Accrued rental income 104,304 91,684
Deferred charges, net 100,804 77,319
Prepaid expenses and other assets 47,962 41,154
Investments in unconsolidated joint ventures 94,155 89,871
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Total assets $ 7,093,296 $ 6,226,470
==================== ======================
LIABILITIES AND STOCKHOLDERS' EQUITY
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Liabilities:
Mortgage notes and bonds payable $ 4,177,670 $ 3,414,891
Accounts payable and accrued expenses 42,203 57,338
Dividends and distributions payable 78,241 71,274
Interest rate contracts 19,045 -
Accrued interest payable 12,067 5,599
Other liabilities 72,410 51,926
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Total liabilities 4,401,636 3,601,028
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Commitments and contingencies - -
-------------------- ----------------------
Minority interests 851,868 877,715
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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, 90,350,510 and 86,630,089 issued and
outstanding in 2001 and 2000, respectively 904 866
Additional paid-in capital 1,774,335 1,673,349
Dividends in excess of earnings (19,193) (13,895)
Unearned compensation (2,386) (848)
Accumulated other comprehensive loss (13,868) (11,745)
-------------------- ----------------------
Total stockholders' equity 1,739,792 1,647,727
-------------------- ----------------------
Total liabilities and stockholders' equity $ 7,093,296 $ 6,226,470
==================== ======================
BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Six months ended
June 30, June 30,
----------------------- ----------------------------------
2001 2000 2001 2000
--------- ----------- ------------ -------------------
(unaudited and in thousands, except for per share amounts)
Revenue
Rental:
Base rent $ 208,071 $ 177,953 $ 393,762 $ 348,290
Recoveries from tenants 27,266 22,734 53,444 46,070
Parking and other 13,533 12,289 27,279 25,297
--------- ----------- ------------ --------------
Total rental revenue 248,870 212,976 474,485 419,657
Development and management services 3,110 2,876 6,507 5,739
Interest and other 4,289 1,407 8,733 2,117
--------- ----------- ------------ --------------
Total revenue 256,269 217,259 489,725 427,513
--------- ----------- ------------ --------------
Expenses
Operating 76,865 64,035 147,208 129,212
General and administrative 9,880 8,589 19,830 15,997
Interest 55,870 56,243 103,723 111,458
Depreciation and amortization 36,675 32,395 71,415 64,626
Loss on investments in securities 6,500 - 6,500 -
--------- ----------- ------------ --------------
Total expenses 185,790 161,262 348,676 321,293
--------- ----------- ------------ --------------
Income before net derivative losses, minority interests and
income from unconsolidated joint ventures 70,479 55,997 141,049 106,220
Net derivative losses (4,733) - (7,788) -
Minority interests in property partnerships 510 (240) 255 (436)
Income from unconsolidated joint ventures 717 662 1,844 807
--------- ----------- ------------ --------------
Income before minority interest in Operating Partnership 66,973 56,419 135,360 106,591
Minority interest in Operating Partnership (18,138) (20,193) (37,162) (37,745)
--------- ----------- ------------ --------------
Income before gain on sale of real estate 48,835 36,226 98,198 68,846
Gain on sale of real estate, net 1,851 297 6,505 297
--------- ----------- ------------ --------------
Income before cumulative effect of a change in accounting principle 50,686 36,523 104,703 69,143
Cumulative effect of a change in accounting principle, net of
minority interest - - (6,767) -
--------- ----------- ------------ --------------
Net income before preferred dividend 50,686 36,523 97,936 69,143
Preferred dividend (1,648) (1,643) (3,291) (3,286)
--------- ----------- ------------ --------------
Net income available to common shareholders $ 49,038 $ 34,880 $ 94,645 $ 65,857
========= =========== ============ ==============
Basic earnings per share:
Income before gain on sale of real estate and cumulative
effect of a change in accounting principle $ 0.52 $ 0.50 $ 1.06 $ 0.97
Gain on sale of real estate, net of minority interest 0.02 0.01 0.07 -
Cumulative effect of a change in accounting principle, net of
minority interest - - (0.07) -
--------- ----------- ------------ --------------
Net income available to common shareholders $ 0.54 $ 0.51 $ 1.06 $ 0.97
========= =========== ============ ==============
Weighted average number of common shares outstanding 89,990 67,991 89,365 67,973
========= =========== ============ ==============
Diluted earnings per share:
Income before gain on sale of real estate and cumulative
effect of a change in accounting principle $ 0.51 $ 0.50 $ 1.03 $ 0.96
Gain on sale of real estate, net of minority interest 0.02 - 0.07 -
Cumulative effect of a change in accounting principle, net of
minority interest - - (0.07) -
--------- ----------- ------------ --------------
Net income available to common shareholders $ 0.53 $ 0.50 $ 1.03 $ 0.96
========= =========== ============ ==============
Weighted average number of common and common
equivalent shares outstanding 92,274 69,582 91,739 69,157
========= =========== ============ ==============
BOSTON PROPERTIES, INC.
FUNDS FROM OPERATIONS
(unaudited and in thousands)
Three months ended Six months ended
June 30, June 30,
-------------------- ----------------------
2001 2000 2001 2000
--------- -------- --------- ---------
Income before net derivative losses (SFAS No. 133),
minority interests and income from unconsolidated joint ventures $ 70,479 $ 55,997 $ 141,049 $ 106,220
Add:
Real estate depreciation and amortization 37,599 32,497 73,156 64,549
Income from unconsolidated joint ventures 717 662 1,844 807
Less:
Net derivative losses (SFAS No. 133) (4,733) - (7,788) -
Minority property partnerships' share of funds from operations (411) (266) (714) (490)
Preferred dividends and distributions (8,260) (8,250) (16,481) (16,500)
-------- -------- --------- ---------
Funds from operations $ 95,391 $ 80,640 $ 191,066 $ 154,586
Add:
Net derivative losses (SFAS No. 133) 4,733 - 7,788 -
-------- -------- --------- ---------
Funds from operations before net derivative losses (SFAS No. 133) $100,124 $ 80,640 $ 198,854 $ 154,586
======== ======== ========= =========
Funds from operations available to common shareholders
before net derivative losses (SFAS No. 133) $ 81,410 $ 59,347 $ 160,583 $ 113,767
======== ======== ========= =========
Weighted average shares outstanding - basic 89,990 67,991 89,365 67,973
======== ======== ========= =========
FFO per share basic before net derivative losses (SFAS No. 133) $ 0.90 $ 0.87 $ 1.80 $ 1.67
======== ======== ========= =========
Weighted average shares outstanding - diluted 105,259 82,583 104,726 81,871
======== ======== ========= =========
FFO per share diluted before net derivative losses (SFAS No. 133) $ 0.86 $ 0.83 $ 1.71 $ 1.61
======== ======== ========= =========
FFO per share diluted after net derivative losses (SFAS No. 133) $ 0.82 $ 0.83 $ 1.65 $ 1.61
======== ======== ========= =========
BOSTON PROPERTIES, INC.
PORTFOLIO OCCUPANCY
Occupancy by Location
June 30, 2001 December 31, 2000
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Greater Boston 94.6% 99.3%
Greater Washington, D.C. 98.0% 98.5%
Midtown Manhattan 99.8% 99.9%
Baltimore, MD 99.8% 99.8%
Richmond, VA 99.6% 100.0%
Princeton/East Brunswick, NJ 96.6% 98.7%
Greater San Francisco 95.0% 97.9%
Bucks County, PA 100.0% 100.0%
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Total Portfolio 97.0% 98.9%
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Occupancy by Type
June 30, 2001 December 31, 2000
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Class A Office Portfolio 97.1% 99.0%
Office/Technical Portfolio 98.5% 98.0%
Industrial Portfolio 87.3% 95.9%
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Total Portfolio 97.0% 98.9%
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