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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 | 23:57:35 |
Boston Properties, Inc. (NYSE: BXP), a real estate investment trust, reported results today for the second quarter ended June 30, 2016.
Net income available to common shareholders was $96.6 million for the quarter ended June 30, 2016, compared to $79.5 million for the quarter ended June 30, 2015. Net income available to common shareholders per share (EPS) for the quarter ended June 30, 2016 was $0.63 basic and $0.63 on a diluted basis. This compares to EPS for the quarter ended June 30, 2015 of $0.52 basic and $0.52 on a diluted basis. The weighted-average number of basic and diluted shares outstanding totaled approximately 153,662,000 and 153,860,000, respectively, for the quarter ended June 30, 2016 and 153,450,000 and 153,815,000, respectively, for the quarter ended June 30, 2015.
Funds from Operations (FFO) for the quarter ended June 30, 2016 were $220.6 million, or $1.44 per share basic and $1.43 per share diluted. This compares to FFO for the quarter ended June 30, 2015 of $208.7 million, or $1.36 per share basic and $1.36 per share diluted.
The Company’s reported FFO of $1.43 per share diluted was greater than the guidance previously provided of $1.36-$1.38 per share diluted primarily due to earlier than anticipated tenant termination income of $0.04 per share and better than expected portfolio operations of $0.02 per share.
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 June 30, 2016. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made.
As of June 30, 2016, the Company’s portfolio consisted of 168 properties aggregating approximately 46.5 million square feet, including eight properties under construction/redevelopment totaling approximately 3.8 million square feet. The overall percentage of leased space for the 157 properties in service (excluding the Company’s two residential properties and hotel) as of June 30, 2016 was 90.8%.
Significant events during the second quarter included:
Transactions completed subsequent to June 30, 2016:
EPS and FFO per Share Guidance:
The Company’s guidance for the third 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 projected EPS (diluted) for the full year 2016 to $3.04 - $3.11 per share from $3.00 - $3.10 per share. This is an increase of approximately $0.03 per share at the mid-point of the Company’s guidance consisting of $0.02 per share due to the acquisition of a 49.8% interest in the joint venture that owns Colorado Center (net of $0.03 per share of real estate depreciation and amortization expense) and $0.01 per share due to higher portfolio performance. In addition, the Company has updated its projected guidance for FFO per share (diluted) for the full year 2016 to $5.92 - $5.99 per share from $5.85 - $5.95 per share. This is an increase of approximately $0.06 per share at the mid-point of the Company’s guidance consisting of $0.05 per share from the acquisition of a 49.8% interest in Colorado Center and $0.01 per share due to higher portfolio performance.
Third Quarter 2016 Full Year 2016 Low - High Low - High Projected EPS (diluted) $ 0.57 - $ 0.59 $ 3.04 - $ 3.11 Add: Projected Company Share of Real Estate Depreciation and Amortization 0.83 - 0.83 3.27 - 3.27 Less: Projected Company Share of Gains on Sales of Real Estate — - — 0.39 - 0.39 Projected FFO per Share (diluted) $ 1.40 - $ 1.42 $ 5.92 - $ 5.99Boston Properties will host a conference call on Wednesday, July 27, 2016 at 10:00 AM Eastern Time, open to the general public, to discuss the second 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 23627785. A replay of the conference call will be available through August 12, 2016, by dialing (855) 859-2056 (Domestic) or (404) 537-3406 (International) and entering the passcode 23627785. 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’ second 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 primarily Class A office space, five retail properties, four residential properties (including two properties under construction) and one hotel. The Company is one of the largest owners and developers of Class A office properties in the United States, concentrated in five markets - Boston, Los Angeles, 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 third 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)
June 30,2016
December 31,2015
(in thousands, except for shareand par value amounts)
ASSETS Real estate, at cost $ 18,690,403 $ 18,465,405 Construction in progress 865,359 763,935 Land held for future development 241,106 252,195 Less: accumulated depreciation (4,056,716 ) (3,925,894 ) Total real estate 15,740,152 15,555,641 Cash and cash equivalents 1,180,044 723,718 Cash held in escrows 65,654 73,790 Investments in securities 21,775 20,380 Tenant and other receivables, net 84,861 97,865 Accrued rental income, net 776,816 754,883 Deferred charges, net 697,823 704,867 Prepaid expenses and other assets 144,222 185,118 Investments in unconsolidated joint ventures 252,618 235,224 Total assets $ 18,963,965 $ 18,351,486 LIABILITIES AND EQUITY Liabilities: Mortgage notes payable, net $ 3,189,013 $ 3,435,242 Unsecured senior notes, net 6,257,274 5,264,819 Unsecured line of credit — — Mezzanine notes payable 307,797 308,482 Outside members’ notes payable 180,000 180,000 Accounts payable and accrued expenses 287,464 274,709 Dividends and distributions payable 113,071 327,320 Accrued interest payable 222,175 190,386 Other liabilities 508,952 483,601 Total liabilities 11,065,746 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 June 30, 2016 and December 31, 2015 200,000 200,000 Common stock, $0.01 par value, 250,000,000 shares authorized, 153,753,830 and 153,658,866 issued and 153,674,930 and 153,579,966 outstanding at June 30, 2016 and December 31, 2015, respectively 1,537 1,536 Additional paid-in capital 6,316,191 6,305,687 Dividends in excess of earnings (702,361 ) (780,952 ) Treasury common stock at cost, 78,900 shares at June 30, 2016 and December 31, 2015 (2,722 ) (2,722 ) Accumulated other comprehensive loss (79,748 ) (14,114 ) Total stockholders’ equity attributable to Boston Properties, Inc. 5,732,897 5,709,435 Noncontrolling interests: Common units of the Operating Partnership 612,385 603,092 Property partnerships 1,552,937 1,574,400 Total equity 7,898,219 7,886,927 Total liabilities and equity $ 18,963,965 $ 18,351,486BOSTON PROPERTIES, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)
Three months endedJune 30,
Six months endedJune 30,
2016 2015 2016 2015 (in thousands, except for per share amounts) Revenue Rental Base rent $ 493,386 $ 486,609 $ 1,029,514 $ 977,291 Recoveries from tenants 85,706 86,795 175,292 175,388 Parking and other 26,113 26,552 50,938 51,340 Total rental revenue 605,205 599,956 1,255,744 1,204,019 Hotel revenue 12,808 13,403 21,565 22,488 Development and management services 5,533 4,862 12,222 10,190 Total revenue 623,546 618,221 1,289,531 1,236,697 Expenses Operating Rental 217,938 214,464 437,110 435,814 Hotel 7,978 8,495 15,612 16,071 General and administrative 25,418 22,284 54,771 51,075 Transaction costs 913 208 938 535 Depreciation and amortization 153,175 167,844 312,623 322,067 Total expenses 405,422 413,295 821,054 825,562 Operating income 218,124 204,926 468,477 411,135 Other income (expense) Income from unconsolidated joint ventures 2,234 3,078 4,025 17,912 Interest and other income 1,524 1,293 3,029 2,700 Gains (losses) from investments in securities 478 (24 ) 737 369 Interest expense (105,003 ) (108,534 ) (210,312 ) (217,291 ) Income before gains on sales of real estate 117,357 100,739 265,956 214,825 Gains on sales of real estate — — 67,623 95,084 Net income 117,357 100,739 333,579 309,909 Net income attributable to noncontrolling interests Noncontrolling interests in property partnerships (6,814 ) (9,264 ) (17,278 ) (24,472 ) Noncontrolling interest—redeemable preferred units of the Operating Partnership — (3 ) — (6 ) Noncontrolling interest—common units of the Operating Partnership (11,357 ) (9,394 ) (32,771 ) (29,530 ) Net income attributable to Boston Properties, Inc. 99,186 82,078 283,530 255,901 Preferred dividends (2,589 ) (2,618 ) (5,207 ) (5,207 ) Net income attributable to Boston Properties, Inc. common shareholders $ 96,597 $ 79,460 $ 278,323 $ 250,694 Basic earnings per common share attributable to Boston Properties, Inc. common shareholders: Net income $ 0.63 $ 0.52 $ 1.81 $ 1.63 Weighted average number of common shares outstanding 153,662 153,450 153,644 153,341 Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders: Net income $ 0.63 $ 0.52 $ 1.81 $ 1.63 Weighted average number of common and common equivalent shares outstanding 153,860 153,815 153,889 153,845BOSTON PROPERTIES, INC.FUNDS FROM OPERATIONS (1)(Unaudited)
Three months endedJune 30,
Six months endedJune 30,
2016
2015
2016
2015
(in thousands, except for per share amounts) Net income attributable to Boston Properties, Inc. common shareholders $ 96,597 $ 79,460 $ 278,323 $ 250,694 Add: Preferred dividends 2,589 2,618 5,207 5,207 Noncontrolling interest - common units of the Operating Partnership 11,357 9,394 32,771 29,530 Noncontrolling interest - redeemable preferred units of the Operating Partnership — 3 — 6 Noncontrolling interests in property partnerships 6,814 9,264 17,278 24,472 Less: Gains on sales of real estate — — 67,623 95,084 Income before gains on sales of real estate 117,357 100,739 265,956 214,825 Add: Real estate depreciation and amortization (2) 157,431 171,384 321,011 320,138 Less: Noncontrolling interests in property partnerships’ share of funds from operations 26,183 36,699 56,202 73,214 Noncontrolling interest - redeemable preferred units of the Operating Partnership — 3 — 6 Preferred dividends 2,589 2,618 5,207 5,207 Funds from operations (FFO) attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) 246,016 232,803 525,558 456,536 Less: Noncontrolling interest - common units of the Operating Partnership’s share of funds from operations 25,421 24,072 54,277 47,423 Funds from operations attributable to Boston Properties, Inc. common shareholders $ 220,595 $ 208,731 $ 471,281 $ 409,113 Boston Properties, Inc.’s percentage share of funds from operations - basic 89.67 % 89.66 % 89.67 % 89.61 % Weighted average shares outstanding - basic 153,662 153,450 153,644 153,341 FFO per share basic $ 1.44 $ 1.36 $ 3.07 $ 2.67 Weighted average shares outstanding - diluted 153,860 153,815 153,889 153,845 FFO per share diluted $ 1.43 $ 1.36 $ 3.06 $ 2.66(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 for 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 $153,175, $167,844, $312,623 and $322,067 and our share of unconsolidated joint venture real estate depreciation and amortization of $4,618, $3,886, $9,114 and $(1,246), less corporate-related depreciation and amortization of $362, $346, $726 and $683 for the three and six months ended June 30, 2016 and 2015, respectively.
BOSTON PROPERTIES, INC.PORTFOLIO LEASING PERCENTAGES
% Leased by Location June 30, 2016 December 31, 2015 Boston 91.3 % 90.6 % New York 90.7 % 91.5 % San Francisco 90.5 % 93.8 % Washington, DC 90.3 % 91.0 % Total Portfolio 90.8 % 91.4 %
View source version on businesswire.com: http://www.businesswire.com/news/home/20160726006573/en/
Boston PropertiesMichael LaBelle, 617-236-3352Executive Vice President, Chief Financial Officer and TreasurerorArista Joyner, 617-236-3343Investor Relations Manager
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