Exhibit 99.2
[LOGO]
BOSTON PROPERTIES, INC.
111 HUNTINGTON AVENUE
BOSTON, MA 02199
(NYSE: BXP)
AT THE COMPANY AT FRB/WEBER SHANDWICK
Douglas T. Linde Marilynn Meek - General Info. (212) 445-8431
Chief Financial Officer Suzie Pileggi - Media (212) 445-8170
(617) 236-3300
BOSTON PROPERTIES, INC. ANNOUNCES
FOURTH QUARTER 2002 RESULTS
REPORTS DILUTED FFO PER SHARE OF $1.14 REPORTS DILUTED EPS OF $2.70
BOSTON, MA, JANUARY 21, 2003 - BOSTON PROPERTIES, INC. (NYSE: BXP), a real
estate investment trust, today reported results for the fourth quarter ended
December 31, 2002.
Funds from Operations (FFO) for the quarter ended December 31, 2002 were $113.5
million, or $1.19 per share basic and $1.14 per share diluted before an
accounting charge related to the application of SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities".
FFO for the fourth quarter of 2002 compares to FFO of $90.7 million, or $1.00
per share basic and $0.95 per share diluted for the quarter ended December 31,
2001. This represents a 20.0% quarter to quarter increase in diluted FFO per
share. The weighted average number of basic and diluted shares outstanding
totaled 95,313,371 and 105,630,130, respectively, for the quarter ended December
31, 2002 and 90,736,578 and 105,577,393, respectively, for the same quarter last
year.
FFO for the year ended December 31, 2002 were $399.5 million, or $4.29 per share
basic and $4.09 per share diluted. FFO for the year ended 2002 compares to FFO
of $337.8 million, or $3.75 per share basic and $3.57 per share diluted for the
year ended December 31, 2001. This represents a 14.6% year to year increase in
diluted FFO per share. The weighted average number of basic and diluted shares
outstanding totaled 93,144,747 and 105,799,277, respectively, for the year ended
December 31, 2002 and 90,001,534 and 105,185,427, respectively, for last year.
Net income available to common shareholders per share (EPS) for the quarter
ended December 31, 2002 was $2.70 on a diluted basis. This includes $2.03 per
share, on a diluted basis, related to gains on sales of properties. EPS for the
fourth quarter 2001 was $0.60 on a diluted basis. This includes $0.03 per share,
on a diluted basis, related to gains on sales of properties. Excluding the gains
on sales of properties this represents a 17.5% quarter to quarter increase in
diluted EPS.
Net income available to common shareholders per share (EPS) for the year ended
December 31, 2002 was $4.66 on a diluted basis. This includes $2.28 per share,
on a diluted basis, relates to gains on sales of properties. EPS for 2001 was
$2.19 on a diluted basis. This includes $0.10 per share, on a diluted basis,
related to gains on sales of properties. Excluding the gains on sales of
properties this represents a 13.9% year to year increase in diluted EPS.
The reported results are unaudited and there can be no assurance that the
results will not vary from the final information for the quarter and year ended
December 31, 2002. In the opinion of management, all adjustments considered
necessary for a fair presentation of these reported results have been made.
As of December 31, 2002, the Company's portfolio consisted of 142 properties
comprising more than 42.4 million square feet, including six properties under
development totaling 2.8 million square feet. The overall occupancy rate for the
properties in service as of December 31, 2002 was 93.9%.
Significant events of the fourth quarter include:
o The Company's Operating Partnership closed a private offering under Rule
144A of $750.0 million in aggregate principal amount of its 6.25% senior
unsecured notes due 2013. The notes were priced at 99.65% of their face
amount to yield 6.296%. The Company used the net proceeds to pay down its
unsecured bridge loan incurred in connection with the acquisition of 399
Park Avenue in September 2002.
o The Company's Operating Partnership received ratings on its inaugural
offering of senior unsecured notes of:
Moody's Baa2 (stable)
Standard & Poor's BBB (stable)
FitchRatings BBB (stable)
o The Company sold One and Two Independence Square, comprised of two Class A
office properties consisting of approximately 900,000 square feet located
in Washington, D.C. for $345.0 million. The Company used the net proceeds
to repay mortgage financing related to these properties totaling
approximately $189.1 million and to pay down its unsecured bridge loan. The
Company will continue to manage these properties under an agreement with
the buyer.
o The Company executed a binding contract for the sale of 875 Third Avenue, a
Class A office property totaling approximately 719,000 square feet in
midtown Manhattan for $370.1 million. The buyer paid a non-refundable
deposit of $20.0 million and waived further due diligence review. The sale
is subject to the satisfaction of customary closing conditions and,
although there can be no assurances that the sale will be consummated, we
have no reason to believe that the closing will not occur as expected by
February 2003.
o The Company sold 2391 West Winton Avenue, an industrial property totaling
approximately 220,000 square feet located in Hayward, CA for $10.8 million.
The Company used the net proceeds to pay down its unsecured bridge loan.
o The Company placed-in-service the following development projects: Two
Discovery Square, a 184,487 square foot office property in Reston, Virginia
and Broad Run Business Park Building E, a 127,226 square foot
office/technical property in Dulles, Virginia. These projects are 82% and
55% leased, respectively.
o The Company refinanced its first mortgage totaling approximately $146.9
million secured by 875 Third Avenue in New York City.
o The Company obtained construction financing totaling $65.0 million for its
New Dominion Technology Park, Building Two development project in Herndon,
Virginia.
o The Company obtained construction financing totaling $120.0 million for its
development of 901 New York Avenue in Washington, D.C., a joint venture in
which the Company has a 25% interest.
o The Company repaid a $0.4 million mortgage secured by 201 Carnegie Center
in Princeton, New Jersey.
o The Company amended its construction loan on the Waltham Weston Corporate
Center which reduced the loan commitment from $70.0 million to $45.0
million. In connection with the amendment, $9.9 million was repaid to
reduce the amount outstanding to $45.0 million.
o The Company exercised a one-year extension option on its 2600 Tower Oaks
$30 million construction loan facility. The Company has an additional
one-year option.
Transactions completed subsequent to December 31, 2002:
o The Company's Operating Partnership closed a private offering under Rule
144A of an additional $175.0 million in aggregate principal amount of its
6.25% senior unsecured notes due 2013. The notes were priced at 99.763% of
their face amount to yield 6.28%.
o In connection with the above transaction, the Company used the net proceeds
to pay off its unsecured bridge loan incurred in connection with the
acquisition of 399 Park Avenue in September 2002 and to repay in full its
construction loans secured by Quorum Office Park, Orbital Sciences, Phase
II and 302 Carnegie Center. The total amounts repaid were approximately
$165.6 million.
o The Company extended its $605.0 million unsecured revolving credit
agreement for a three-year term expiring on January 17, 2006 with a
one-year extension provision. The interest rate on borrowings has been
reduced from Libor + 1.45% to Libor + 0.70%.
o The Company executed a binding contract for the sale of the Candler
Building, a Class A office property totaling approximately 541,000 square
feet in Baltimore, Maryland for $63.1 million. The sale is subject to the
satisfaction of customary closing conditions and, although there can be no
assurances that the sale will be consummated, we have no reason to believe
that the closing will not occur as expected by February 2003.
Boston Properties will host a conference call tomorrow, January 22, 2003 at
10:00 AM (Eastern Time), open to the general public, to discuss the results of
this year's fourth quarter. The number to call for this interactive
teleconference is (800) 374-1372. A replay of the conference call will be
available through January 29, 2003 by dialing (800) 642-1687 and entering the
passcode 7277400.
Additionally, a copy of Boston Properties' fourth quarter 2002 "Supplemental
Operating and Financial Data" is 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 617-236-3322 or by written request
to:
Investor Relations
Boston Properties, Inc.
111 Huntington Avenue, Suite 300
Boston, MA 02199-7610
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.
<Page>
BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<Table>
<Caption>
THREE MONTHS
ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------- -----------------------
2002 2001 2002 2001
-------- -------- ---------- ----------
(UNAUDITED AND IN THOUSANDS, EXCEPT FOR
PER SHARE AMOUNTS)
Revenue
Rental:
Base rent............................................... $265,559 $220,534 $ 978,382 $ 843,147
Recoveries from tenants................................. 38,929 32,368 144,576 127,024
Parking and other....................................... 13,217 11,757 50,827 51,999
-------- -------- ---------- ----------
Total rental revenue.................................. 317,705 264,659 1,173,785 1,022,170
Hotel revenue............................................. 24,779 -- 44,786 --
Development and management services....................... 2,769 3,528 10,748 12,167
Interest and other........................................ 700 1,829 5,504 12,183
-------- -------- ---------- ----------
Total revenue......................................... 345,953 270,016 1,234,823 1,046,520
-------- -------- ---------- ----------
Expenses
Operating
Rental.................................................. 102,726 88,605 385,491 330,301
Hotel................................................... 17,562 -- 31,086 --
General and administrative................................ 12,703 8,663 47,292 38,312
Interest.................................................. 72,146 59,730 271,685 223,389
Depreciation and amortization............................. 53,957 39,993 186,177 149,181
Net derivative losses..................................... 1,461 2,080 11,874 26,488
Loss on investments in securities......................... -- -- 4,297 6,500
-------- -------- ---------- ----------
Total expenses........................................ 260,555 199,071 937,902 774,171
-------- -------- ---------- ----------
Income before minority interests, income from unconsolidated
joint ventures, minority interest in Operating
Partnership, gains on sales of real estate and land held
for development, discontinued operations, extraordinary
items, cumulative effect of a change in accounting
principle and preferred dividend.......................... 85,398 70,945 296,921 272,349
Minority interests in property partnerships................. 162 456 2,065 1,085
Income from unconsolidated joint ventures................... 2,083 1,345 7,954 4,186
-------- -------- ---------- ----------
Income before minority interest in Operating Partnership,
gains on sales of real estate and land held for
development, discontinued operations, extraordinary items,
cumulative effect of a change in accounting principle and
preferred dividend........................................ 87,643 72,746 306,940 277,620
Minority interest in Operating Partnership.................. (20,867) (19,084) (77,524) (74,739)
-------- -------- ---------- ----------
Income before gains on sales of real estate and land held
for development, discontinued operations, extraordinary
items, cumulative effect of a change in accounting
principle and preferred dividend.......................... 66,776 53,662 229,416 202,881
Gains on sales of real estate, net of minority interest..... 187,562 -- 186,810 6,505
Gains on sales of land held for development, net of minority
interest.................................................. -- 2,584 3,633 2,584
-------- -------- ---------- ----------
Income before discontinued operations, extraordinary items,
cumulative effect of a change in accounting principle and
preferred dividend........................................ 254,338 56,246 419,859 211,970
Discontinued Operations:
Income from discontinued operations, net of minority
interest................................................ 127 682 1,135 2,829
Gains on sales of real estate from discontinued
operations, net of minority interest.................... 7,645 -- 25,345 --
-------- -------- ---------- ----------
Income before extraordinary items, cumulative effect of a
change in accounting principle and preferred dividend..... 262,110 56,928 446,339 214,799
Extraordinary items, net of minority interest............... (1,964) -- (1,956) --
-------- -------- ---------- ----------
Income before cumulative effect of a change in accounting
principle and preferred dividend.......................... 260,146 56,928 444,383 214,799
Cumulative effect of a change in accounting principle, net
of minority interest...................................... -- -- -- (6,767)
-------- -------- ---------- ----------
Net income before preferred dividend........................ 260,146 56,928 444,383 208,032
Preferred dividend.......................................... -- (1,648) (3,412) (6,592)
-------- -------- ---------- ----------
Net income available to common shareholders................. $260,146 $ 55,280 $ 440,971 $ 201,440
======== ======== ========== ==========
Basic earnings per share:
Income available to common shareholders before
discontinued operations, extraordinary items and
cumulative effect of a change in accounting principle... $ 2.67 $ 0.60 $ 4.47 $ 2.28
Discontinued operations................................... -- 0.01 0.01 0.03
Gains on sales from discontinued operations............... 0.08 -- 0.27 --
Extraordinary items....................................... (0.02) -- (0.02) --
Cumulative effect of a change in accounting principle..... -- -- -- (0.07)
-------- -------- ---------- ----------
Net income available to common shareholders............... $ 2.73 $ 0.61 $ 4.73 $ 2.24
======== ======== ========== ==========
Weighted average number of common shares outstanding...... 95,313 90,737 93,145 90,002
======== ======== ========== ==========
Diluted earnings per share:
Income available to common shareholders before
discontinued operations, extraordinary items and
cumulative effect of a change in accounting principle... $ 2.64 $ 0.59 $ 4.40 $ 2.23
Discontinued operations................................... -- 0.01 0.01 0.03
Gains on sale from discontinued operations................ 0.08 -- 0.27 --
Extraordinary items....................................... (0.02) -- (0.02) --
Cumulative effect of a change in accounting principle..... -- -- -- (0.07)
-------- -------- ---------- ----------
Net income available to common shareholders............... $ 2.70 $ 0.60 $ 4.66 $ 2.19
======== ======== ========== ==========
Weighted average number of common and common equivalent
shares outstanding...................................... 96,395 92,593 94,612 92,200
======== ======== ========== ==========
</Table>
<Page>
BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
<Table>
<Caption>
DECEMBER 31, DECEMBER 31,
2002 2001
------------ ------------
(IN THOUSANDS, EXCEPT FOR
SHARE AMOUNTS)
(UNAUDITED)
ASSETS
Real estate................................................. $7,781,684 $6,167,399
Development in progress..................................... 448,576 1,107,835
Land held for future development............................ 215,866 182,672
Real estate held for sale, net.............................. 224,585 --
Less: accumulated depreciation............................ (822,933) (719,854)
---------- ----------
Total real estate....................................... 7,847,778 6,738,052
Cash and cash equivalents................................... 55,275 98,067
Escrows..................................................... 41,906 23,000
Investments in securities................................... -- 4,297
Tenant and other receivables, net........................... 20,458 43,546
Accrued rental income, net.................................. 165,321 119,494
Deferred charges, net....................................... 176,545 107,573
Prepaid expenses and other assets........................... 18,015 20,996
Investments in unconsolidated joint ventures................ 101,905 98,485
---------- ----------
Total assets............................................ $8,427,203 $7,253,510
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes and bonds payable.......................... $4,267,119 $4,314,942
Unsecured senior notes.................................... 747,375 --
Unsecured bridge loan..................................... 105,683 --
Unsecured line of credit.................................. 27,043 --
Accounts payable and accrued expenses..................... 93,846 81,108
Dividends and distributions payable....................... 81,226 79,561
Interest rate contracts................................... 14,514 11,147
Accrued interest payable.................................. 25,141 9,080
Other liabilities......................................... 61,085 58,859
---------- ----------
Total liabilities....................................... 5,423,032 4,554,697
---------- ----------
Commitments and contingencies............................... -- --
---------- ----------
Minority interests.......................................... 844,581 844,740
---------- ----------
Series A Convertible Redeemable Preferred Stock, liquidation
preference $50.00 per share, 0 and 2,000,000 shares issued
and outstanding in 2002 and 2001, respectively............ -- 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, 95,362,990 and 90,780,591 issued and
outstanding in 2002 and 2001, respectively.............. 954 908
Additional paid-in capital................................ 1,981,833 1,789,521
Earnings in excess of dividends........................... 199,442 (17,669)
Treasury common stock, at cost............................ (2,722) (2,722)
Unearned compensation..................................... (2,899) (2,097)
Accumulated other comprehensive loss...................... (17,018) (13,868)
---------- ----------
Total stockholders' equity.............................. 2,159,590 1,754,073
---------- ----------
Total liabilities and stockholders' equity............ $8,427,203 $7,253,510
========== ==========
</Table>
<Page>
BOSTON PROPERTIES, INC.
FUNDS FROM OPERATIONS (1)
<Table>
<Caption>
THREE MONTHS
ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------- -------------------
2002 2001 2002 2001
-------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Income before minority interests, income from unconsolidated
joint ventures, minority interest in Operating
Partnership, gains on sales of real estate and land held
for development, discontinued operations, extraordinary
items, cumulative effect of a change in accounting
principle and preferred dividend.......................... $ 85,398 $ 70,945 $296,921 $272,349
Add:
Real estate depreciation and amortization................. 56,072 41,034 192,574 153,550
Income from discontinued operations....................... 154 835 1,384 2,989
Income from unconsolidated joint ventures................. 2,083 1,345 7,954 4,186
Less:
Minority interests in property partnerships' share of
funds from operations................................... (1,390) (776) (3,223) (2,322)
Preferred dividends and distributions..................... (5,926) (8,448) (28,711) (33,312)
-------- -------- -------- --------
Funds from operations....................................... 136,391 104,935 466,899 397,440
Add (subtract):
Net derivative losses (SFAS No. 133)...................... 1,461 2,080 11,874 26,488
Early surrender lease adjustment (2)...................... -- 3,927 8,520 (8,518)
-------- -------- -------- --------
Funds from operations before net derivative losses (SFAS No.
133) and after early surrender lease adjustment........... $137,852 $110,942 $487,293 $415,410
======== ======== ======== ========
Funds from operations available to common shareholders
before net derivative losses (SFAS No. 133) and after
early surrender lease adjustment.......................... $113,464 $ 90,704 $399,489 $337,823
======== ======== ======== ========
Weighted average shares outstanding -- basic................ 95,313 90,737 93,145 90,002
======== ======== ======== ========
FFO per share basic before net derivative losses (SFAS No.
133) and after early surrender adjustment............... $ 1.19 $ 1.00 $ 4.29 $ 3.75
======== ======== ======== ========
FFO per share basic after net derivative losses (SFAS No.
133) and before early surrender lease adjustment........ $ 1.18 $ 0.95 $ 4.11 $ 3.59
======== ======== ======== ========
Weighted average shares outstanding -- diluted.............. 105,631 105,577 105,799 105,185
======== ======== ======== ========
FFO per share diluted before net derivative losses (SFAS
No. 133) and after early surrender lease adjustment..... $ 1.14 $ 0.95 $ 4.09 $ 3.57
======== ======== ======== ========
FFO per share diluted after net derivative losses (SFAS
No. 133) and before early surrender lease adjustment.... $ 1.13 $ 0.90 $ 3.92 $ 3.42
======== ======== ======== ========
</Table>
(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"), the Company calculates Funds From Operations, or "FFO,"
by adjusting net income (loss) (computed in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
including non-recurring items), for gains (or losses) from sales or
properties (except gains and losses from sales of real estate), real estate
related depreciation and amortization, and after adjustment for
unconsolidated partnerships and joint ventures. In addition to FFO (as
defined by NAREIT), the Company also discloses FFO after specific
supplemental adjustments. Although the Company's FFO as adjusted clearly
differs from NAREIT's definition of FFO as well as that of other real estate
companies, the Company believes it provides a more meaningful presentation
of the Company's operating performance. In addition, the Company believes
that to further understand its performance, FFO and FFO as adjusted should
be compared with its reported net income and cash flows in accordance with
GAAP, as presented in the Company's consolidated financial statements.
The Company's computation of FFO may not be comparable to FFO reported by
other REIT's 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. In addition to presenting FFO in accordance
with the NAREIT definition, the Company makes adjustments to FFO, as defined
by NAREIT, including net derivative losses and early surrender lease
adjustments. FFO does not represent cash generated from operating activities
determined in accordance with GAAP, and should not be considered as an
alternative to net income (determined in accordance with GAAP) as an
indication of the Company's performance, as an alternative to net cash flows
from operating activities (determined in accordance with GAAP) as a measure
of our liquidity, or as an indication of the Company's ability to make cash
distributions.
(2) Represents cash received under contractual obligations.
<Page>
BOSTON PROPERTIES, INC.
PORTFOLIO OCCUPANCY
<Table>
<Caption>
OCCUPANCY BY LOCATION
-------------------------------------
DECEMBER 31, 2002 DECEMBER 31, 2001
----------------- -----------------
Greater Boston.............................................. 91.8% 92.3%
Greater Washington, D.C..................................... 95.9% 97.8%
Midtown Manhattan........................................... 98.4% 99.8%
Baltimore, MD............................................... 97.6% 99.2%
Richmond, VA................................................ 91.8% 98.4%
Princeton/East Brunswick, NJ................................ 93.3% 88.6%
Greater San Francisco....................................... 87.4% 93.5%
Bucks County, PA............................................ 100.0% 100.0%
----- -----
Total Portfolio........................................... 93.9% 95.3%
===== =====
</Table>
<Table>
<Caption>
OCCUPANCY BY TYPE
-------------------------------------
DECEMBER 31, 2002 DECEMBER 31, 2001
----------------- -----------------
Class A Office Portfolio.................................... 94.1% 95.4%
Office/Technical Portfolio.................................. 89.7% 97.9%
Industrial Portfolio........................................ 100.0% 87.3%
----- ----
Total Portfolio........................................... 93.9% 95.3%
===== ====
</Table>