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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Boston Properties Inc | NYSE:BXP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.81 | 1.33% | 61.59 | 61.89 | 61.04 | 61.85 | 811,731 | 01:00:00 |
Reports diluted FFO per share of $1.63
Reports diluted EPS of $1.18
Boston Properties, Inc. (NYSE: BXP), a real estate investment trust, reported results today for the first quarter ended March 31, 2016.
Funds from Operations (FFO) for the quarter ended March 31, 2016 were $250.7 million, or $1.63 per share basic and $1.63 per share diluted. This compares to FFO for the quarter ended March 31, 2015 of $200.4 million, or $1.31 per share basic and $1.30 per share diluted. FFO for the quarter ended March 31, 2016 includes lease termination income from a tenant in New York City totaling approximately $45.0 million, or $0.26 per share basic and $0.26 per share on a diluted basis. The weighted-average number of basic and diluted shares outstanding totaled approximately 153,626,000 and 153,917,000, respectively, for the quarter ended March 31, 2016 and 153,230,000 and 153,873,000, respectively, for the quarter ended March 31, 2015.
The Company’s reported FFO of $1.63 per share diluted was greater than the guidance previously provided of $1.59-$1.61 per share diluted primarily due to better than expected portfolio operations of $0.02 per share and development and management services income of $0.01 per share.
Net income available to common shareholders was $181.7 million for the quarter ended March 31, 2016, compared to $171.2 million for the quarter ended March 31, 2015. Net income available to common shareholders per share (EPS) for the quarter ended March 31, 2016 was $1.18 basic and $1.18 on a diluted basis. This compares to EPS for the quarter ended March 31, 2015 of $1.12 basic and $1.11 on a diluted basis. Net income available to common shareholders for the quarter ended March 31, 2016 includes gains on sales of real estate aggregating approximately $67.6 million, or $0.39 per share basic and $0.39 per share on a diluted basis, compared to $95.1 million, or $0.56 per share basic and $0.55 per share on a diluted basis, for the quarter ended March 31, 2015.
The reported results are unaudited and there can be no assurance that these reported results will not vary from the final information for the quarter ended March 31, 2016. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made.
As of March 31, 2016, the Company’s portfolio consisted of 167 properties aggregating approximately 46.3 million square feet, including eleven properties under construction/redevelopment totaling approximately 4.6 million square feet. The overall percentage of leased space for the 153 properties in service (excluding the Company’s two residential properties and hotel) as of March 31, 2016 was 91.0%.
Significant events during the first quarter included:
Transactions completed subsequent to March 31, 2016:
EPS and FFO per Share Guidance:
The Company’s guidance for the second quarter and full year 2016 for EPS (diluted) and FFO per share (diluted) is set forth and reconciled below. Except as described below, the estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in this release and otherwise referenced during the conference call referred to below. The estimates do not include possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions, other possible capital markets activity or possible future impairment charges. EPS estimates may be subject to fluctuations as a result of several factors, including changes in the recognition of depreciation and amortization expense and any gains or losses associated with disposition activity. The Company is not able to assess at this time the potential impact of these factors on projected EPS. By definition, FFO does not include real estate-related depreciation and amortization, impairment losses or gains or losses associated with disposition activities. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth below.
As shown below, the Company has updated its guidance for FFO per share (diluted) for full year 2016 to $5.85 - $5.95 per share from $5.78 - $5.93 per share. This is an increase of $0.05 per share at the mid-point of the Company’s guidance consisting of $0.02 per share from better than projected portfolio operations, $0.02 per share from the acquisition of Peterson Way in Santa Clara, California and $0.01 per share from better than projected development and management services income.
Second Quarter 2016 Full Year 2016 Low - High Low - High Projected EPS (diluted) $ 0.54 - $ 0.56 $ 3.00 - $ 3.10 Add: Projected Company Share of Real Estate Depreciation and Amortization 0.82 - 0.82 3.24 - 3.24 Less: Projected Company Share of Gains on Sales of Real Estate — - — 0.39 - 0.39 Projected FFO per Share (diluted) $ 1.36 - $ 1.38 $ 5.85 - $ 5.95Boston Properties will host a conference call on Wednesday, April 27, 2016 at 10:00 AM Eastern Time, open to the general public, to discuss the first quarter 2016 results, the 2016 projections and related assumptions, and other related matters that may be of interest to investors. The number to call for this interactive teleconference is (877) 706-4503 (Domestic) or (281) 913-8731 (International) and entering the passcode 23623258. A replay of the conference call will be available through May 13, 2016, by dialing (855) 859-2056 (Domestic) or (404) 537-3406 (International) and entering the passcode 23623258. There will also be a live audio webcast of the call which may be accessed on the Company’s website at www.bostonproperties.com in the Investor Relations section. Shortly after the call a replay of the webcast will be available in the Investor Relations section of the Company’s website and archived for up to twelve months following the call.
Additionally, a copy of Boston Properties’ first quarter 2016 “Supplemental Operating and Financial Data” and this press release are available in the Investor Relations section of the Company’s website at www.bostonproperties.com.
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 space, five retail properties, four residential properties and one hotel. The Company is one of the largest owners and developers of Class A office properties in the United States, concentrated in four markets - Boston, New York, San Francisco and Washington, DC.
This press release contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects” and similar expressions that do not relate to historical matters. 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 Company’s ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the costs and availability of financing, the effectiveness of our interest rate hedging contracts, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Company’s accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission. Boston Properties does not undertake a duty to update or revise any forward-looking statement, including its guidance for the second quarter and full fiscal year 2016, whether as a result of new information, future events or otherwise.
Financial tables follow.
BOSTON PROPERTIES, INC.CONSOLIDATED BALANCE SHEETS
(Unaudited )
March 31, 2016December 31,2015
(in thousands, except for share and par value amounts) ASSETS Real estate, at cost $ 18,424,542 $ 18,465,405 Construction in progress 857,578 763,935 Land held for future development 256,952 252,195 Less: accumulated depreciation (3,969,648 ) (3,925,894 ) Total real estate 15,569,424 15,555,641 Cash and cash equivalents 1,605,678 723,718 Cash held in escrows 71,349 73,790 Investments in securities 21,077 20,380 Tenant and other receivables (net of allowance for doubtful accounts of $1,151 and $1,197, respectively) 73,759 97,865 Accrued rental income (net of allowance of $1,612 and $2,775 respectively) 767,864 754,883 Deferred charges, net 693,976 704,867 Prepaid expenses and other assets 136,799 185,118 Investments in unconsolidated joint ventures 235,904 235,224 Total assets $ 19,175,830 $ 18,351,486 LIABILITIES AND EQUITY Liabilities: Mortgage notes payable, net $ 3,416,622 $ 3,435,242 Unsecured senior notes, net 6,255,602 5,264,819 Unsecured line of credit — — Mezzanine notes payable 308,142 308,482 Outside members' notes payable 180,000 180,000 Accounts payable and accrued expenses 252,727 274,709 Dividends and distributions payable 113,079 327,320 Accrued interest payable 221,578 190,386 Other liabilities 498,290 483,601 Total liabilities 11,246,040 10,464,559 Commitments and contingencies — — Equity: Stockholders’ equity attributable to Boston Properties, Inc.: Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding — — Preferred stock, $0.01 par value, 50,000,000 shares authorized; 5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding at March 31, 2016 and December 31, 2015 200,000 200,000 Common stock, $0.01 par value, 250,000,000 shares authorized, 153,683,866 and 153,658,866 issued and 153,604,966 and 153,579,966 outstanding at March 31, 2016 and December 31, 2015, respectively 1,536 1,536 Additional paid-in capital 6,306,723 6,305,687 Dividends in excess of earnings (699,048 ) (780,952 ) Treasury common stock at cost, 78,900 shares at March 31, 2016 and December 31, 2015 (2,722 ) (2,722 ) Accumulated other comprehensive loss (56,706 ) (14,114 ) Total stockholders’ equity attributable to Boston Properties, Inc. 5,749,783 5,709,435 Noncontrolling interests: Common units of the Operating Partnership 616,095 603,092 Property partnerships 1,563,912 1,574,400 Total equity 7,929,790 7,886,927 Total liabilities and equity $ 19,175,830 $ 18,351,486 BOSTON PROPERTIES, INC.CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months endedMarch 31,2016
2015
(in thousands, except for per share amounts) Revenue Rental Base rent $ 536,128 $ 490,682 Recoveries from tenants 89,586 88,593 Parking and other 24,825 24,788 Total rental revenue 650,539 604,063 Hotel revenue 8,757 9,085 Development and management services 6,689 5,328 Total revenue 665,985 618,476 Expenses Operating Rental 219,172 221,350 Hotel 7,634 7,576 General and administrative 29,353 28,791 Transaction costs 25 327 Depreciation and amortization 159,448 154,223 Total expenses 415,632 412,267 Operating income 250,353 206,209 Other income (expense) Income from unconsolidated joint ventures 1,791 14,834 Interest and other income 1,505 1,407 Gains from investments in securities 259 393 Interest expense (105,309 ) (108,757 ) Income before gains on sales of real estate 148,599 114,086 Gains on sales of real estate 67,623 95,084 Net income 216,222 209,170 Net income attributable to noncontrolling interests Noncontrolling interests in property partnerships (10,464 ) (15,208 ) Noncontrolling interest—redeemable preferred units of the Operating Partnership — (3 ) Noncontrolling interest—common units of the Operating Partnership (21,393 ) (20,188 ) Net income attributable to Boston Properties, Inc. 184,365 173,771 Preferred dividends (2,618 ) (2,589 ) Net income attributable to Boston Properties, Inc. common shareholders $ 181,747 $ 171,182 Basic earnings per common share attributable to Boston Properties, Inc. common shareholders: Net income $ 1.18 $ 1.12 Weighted average number of common shares outstanding 153,626 153,230 Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders: Net income $ 1.18 $ 1.11 Weighted average number of common and common equivalent shares outstanding 153,917 153,873 BOSTON PROPERTIES, INC.FUNDS FROM OPERATIONS (1)
(Unaudited)
Three months endedMarch 31,2016
2015
(in thousands, except for per share amounts) Net income attributable to Boston Properties, Inc. common shareholders $ 181,747 $ 171,182 Add: Preferred dividends 2,618 2,589 Noncontrolling interest - common units of the Operating Partnership 21,393 20,188 Noncontrolling interest - redeemable preferred units of the Operating Partnership — 3 Noncontrolling interests in property partnerships 10,464 15,208 Less: Gains on sales of real estate 67,623 95,084 Income before gains on sales of real estate 148,599 114,086 Add: Real estate depreciation and amortization (2) 163,580 148,754 Less: Noncontrolling interests in property partnerships' share of funds from operations 30,019 36,515 Noncontrolling interest - redeemable preferred units of the Operating Partnership — 3 Preferred dividends 2,618 2,589 Funds from operations (FFO) attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) 279,542 223,733 Less: Noncontrolling interest - common units of the Operating Partnership's share of funds from operations 28,854 23,348 Funds from operations attributable to Boston Properties, Inc. common shareholders $ 250,688 $ 200,385 Boston Properties, Inc.'s percentage share of funds from operations - basic 89.68 % 89.56 % Weighted average shares outstanding - basic 153,626 153,230 FFO per share basic $ 1.63 $ 1.31 Weighted average shares outstanding - diluted 153,917 153,873 FFO per share diluted $ 1.63 $ 1.30(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”), we calculate Funds from Operations, or “FFO,” by adjusting net income (loss) attributable to Boston Properties, Inc. common shareholders (computed in accordance with GAAP, including non-recurring items) for gains (or losses) from sales of properties, impairment losses on depreciable real estate consolidated on our balance sheet, impairment losses on our investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures, real estate-related depreciation and amortization, and our share of income (loss) from unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure, but we believe the presentation of FFO, combined with the presentation of required GAAP financial measures, has improved the understanding of operating results of REITs among the investing public and has helped make comparisons of REIT operating results more meaningful. Management generally considers FFO and FFO per share to be useful measures for understanding and comparing our operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO per share can help investors compare the operating performance of a company's real estate across reporting periods and to the operating performance of other companies.
Our computation of FFO may not be comparable to FFO reported by other REITs 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.
FFO should not be considered as a substitute to net income attributable to Boston Properties, Inc. common shareholders (determined in accordance with GAAP). FFO does not represent cash generated from operating activities determined in accordance with GAAP, and is not a measure of liquidity or an indicator of our ability to make cash distributions. We believe that to more comprehensively understand our operating performance, FFO should be considered along with our reported net income attributable to Boston Properties, Inc. and our cash flows in accordance with GAAP, as presented in our consolidated financial statements.
(2) Real estate depreciation and amortization consists of depreciation and amortization from the Consolidated Statements of Operations of $159,448 and $154,223 and our share of unconsolidated joint venture real estate depreciation and amortization of $4,496 and $(5,132), less corporate-related depreciation and amortization of $364 and $337 for the three months ended March 31, 2016 and 2015, respectively.
BOSTON PROPERTIES, INC.PORTFOLIO LEASING PERCENTAGES
% Leased by Location March 31, 2016 December 31, 2015 Boston 90.9 % 90.6 % New York 91.5 % 91.5 % San Francisco 90.2 % 93.8 % Washington, DC 90.9 % 91.0 % Total Portfolio 91.0 % 91.4 %
View source version on businesswire.com: http://www.businesswire.com/news/home/20160426006945/en/
Boston PropertiesMichael LaBelle, 617-236-3352Executive Vice President, Chief Financial Officer and TreasurerorArista Joyner, 617-236-3343Investor Relations Manager
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