NEWTON, Mass.--(BUSINESS WIRE)--
HRPT Properties Trust (NYSE: HRP) today announced financial results for
the quarter and year ended December 31, 2008.
Results for the quarter ended December 31, 2008:
Net income available for common shareholders was $50.8 million for the
quarter ended December 31, 2008, compared to $8.9 million for the same
quarter last year. Net income available for common shareholders per
share, basic and diluted, (EPS) for the quarters ended December 31, 2008
and 2007 was $0.22 and $0.04, respectively. Net income for the quarter
ended December 31, 2008 includes a $39.5 million, or $0.17 per share,
gain on sale of properties.
Funds from operations (FFO) available for common shareholders for the
quarter ended December 31, 2008, was $62.2 million, or $0.27 per share
basic and diluted, compared to FFO available for common shareholders for
the quarter ended December 31, 2007, of $60.9 million, or $0.27 per
share basic and diluted.
The weighted average number of basic and diluted common shares
outstanding totaled 227,704,155 and 256,896,813, respectively, for the
quarter ended December 31, 2008, and 222,926,710 and 252,119,368,
respectively, for the quarter ended December 31, 2007.
Results for the year ended December 31, 2008:
Net income available for common shareholders was $194.0 million for the
year ended December 31, 2008, compared to $59.5 million for the same
period last year. Net income available for common shareholders per
share, basic and diluted, (EPS) for the year ended December 31, 2008 and
2007 was $0.86 and $0.28, respectively. Net income for the year ended
December 31, 2008, includes a $137.2 million, or $0.61 per share, gain
on sale of properties.
Funds from operations (FFO) available for common shareholders for the
year ended December 31, 2008, was $251.7 million, or $1.11 per share
basic and $1.08 per share diluted, compared to FFO available for common
shareholders for the year ended December 31, 2007, of $247.6 million, or
$1.16 per share basic and $1.12 per share diluted.
The weighted average number of basic and diluted common shares
outstanding totaled 226,467,736 and 255,660,394, respectively, for the
year ended December 31, 2008, and 214,361,204 and 243,553,862,
respectively, for the year ended December 31, 2007.
Occupancy and Leasing Results (excluding properties classified in
discontinued operations):
As of December 31, 2008, 90.4% of HRP's total square feet was leased,
compared to 90.6% as of September 30, 2008.
HRP signed lease renewals for 638,000 square feet and new leases for
221,000 square feet during the quarter ended December 31, 2008, for
weighted average rental rates that were 6% above prior rents for the
same space. Average lease terms for leases signed during the fourth
quarter of 2008 were 5.7 years. Commitments for tenant improvement and
leasing commission (TI/LC) costs for leases signed during the quarter
ended December 31, 2008, totaled $10.68 per square foot on a weighted
average basis.
Investing Activities:
During the fourth quarter of 2008, HRP acquired seven office properties
with 830,000 square feet of space for $134.3 million, excluding closing
costs, and sold nine properties with 424,000 square feet of space for
$114.0 million, excluding closing costs.
Conference Call:
On Thursday, February 26, 2009, at 10:00 a.m. Eastern Time, Adam
Portnoy, Managing Trustee, and John Popeo, Chief Financial Officer, will
host a conference call to discuss the fourth quarter 2008 results.
The conference call telephone number is (877) 704-5380. Participants
calling from outside the United States and Canada should dial (913)
312-1294. No pass code is necessary to access either call. Participants
should dial in about 15 minutes prior to the scheduled start of the
call. A replay of the conference call will be available through 1:00
p.m. Eastern Time on Thursday, March 5, 2009. To hear the replay, dial
(719) 457-0820. The replay pass code is 3473923.
A live audio webcast of the conference call will also be available in a
listen only mode on HRP's web site, which is located at www.hrpreit.com.
Participants wanting to access the webcast should visit the company's
web site about five minutes before the call. The archived webcast will
be available for replay on HRP's web site for about one week after the
call.
Supplemental Data:
A copy of HRP's Fourth Quarter 2008 Supplemental Operating and Financial
Data is available for download at HRP's web site, www.hrpreit.com.
HRPT Properties Trust is a real estate investment trust, or REIT, which
primarily owns office buildings located throughout the United States. As
of December 31, 2008, HRP owned 537 operating properties with 66.9
million square feet, including approximately 17 million square feet of
leased industrial and commercial lands in Oahu, HI. HRP is headquartered
in Newton, Massachusetts.
Please see the pages attached hereto for a more detailed statement of
our operating results and financial condition, along with an explanation
of our calculation of FFO. HRP's web site is not incorporated as part of
this press release.
A Maryland Real Estate Investment Trust with transferable shares of
beneficial interest listed on the New York Stock Exchange. No
shareholder, Trustee or officer is personally liable for any act or
obligation of the Trust.
HRPT Properties Trust
Consolidated Statements of Income and Funds from Operations
(amounts in thousands, except per share data)
Quarter Ended Year Ended
December 31, December 31,
2008 2007 2008 2007
Rental income $218,406 $199,070 $835,540 $783,266
Expenses:
Operating expenses 93,920 81,598 347,958 315,131
Depreciation and amortization 49,032 44,218 185,657 170,321
General and administrative 9,775 8,548 36,812 33,711
Total expenses 152,727 134,364 570,427 519,163
Operating income 65,679 64,706 265,113 264,103
Interest income 539 852 1,442 2,293
Interest expense (including
amortization of debt discounts,
premiums and deferred financing fees (45,616) (44,758) (180,193) (170,970)
of $1,522, $1,181, $5,479 and $4,426,
respectively)
Loss on asset impairment (2,283) -- (2,283) --
Loss on early extinguishment of debt -- -- -- (711)
Income from continuing operations 18,319 20,800 84,079 94,715
before income tax expense
Income tax expense (162) (395) (773) (395)
Income from continuing operations 18,157 20,405 83,306 94,320
Discontinued operations:
Income from discontinued operations 5,757 7,261 24,165 27,714
Gain (loss) on sale of properties 39,549 (187) 137,174 2,221
Net income 63,463 27,479 244,645 124,255
Preferred distributions (12,667) (14,368) (50,668) (60,572)
Excess redemption price paid over -- (4,230) -- (4,230)
carrying value of preferred shares
Net income available for common $50,796 $8,881 $193,977 $59,453
shareholders
Calculation of Funds from Operations,
or FFO (1):
Net income $63,463 $27,479 $244,645 $124,255
Plus: depreciation and amortization 49,032 44,218 185,657 170,321
from continuing operations
Plus: depreciation and amortization (404) 3,385 6,948 12,695
from discontinued operations
Loss on early extinguishment of debt:
Add: amount included in expenses -- -- -- 711
Less: portion settled in cash -- -- -- --
Loss on asset impairment 2,283 -- 2,283 --
Gain (loss) on sale of properties:
Less: amount included in net income (39,549) 187 (137,174) (2,221)
Add: land sales -- -- -- 2,408
FFO 74,825 75,269 302,359 308,169
Less: preferred distributions (12,667) (14,368) (50,668) (60,572)
FFO available for common shareholders $62,158 $60,901 $251,691 $247,597
Weighted average common shares 227,704 222,927 226,468 214,361
outstanding - basic
Weighted average common shares 256,897 252,120 255,661 243,554
outstanding - diluted (2)
Earnings per common share:
Income from continuing operations
available for common shareholders - $0.02 $0.01 $0.14 $0.14
basic and diluted
Income from discontinued operations - $0.20 $0.03 $0.71 $0.14
basic and diluted
Net income available for common $0.22 $0.04 $0.86 $0.28
shareholders - basic and diluted
FFO available for common shareholders $0.27 $0.27 $1.11 $1.16
- basic
FFO available for common shareholders $0.27 $0.27 $1.08 $1.12
- diluted
Common distributions paid $0.21 $0.21 $0.84 $0.84
HRPT Properties Trust
Consolidated Statements of Income and Funds from Operations
(amounts in thousands, except per share data)
(1) We compute FFO as shown in the calculations above. Our
calculations of FFO differ from the National Association of Real Estate
Investment Trusts, or NAREIT, definition because we add loss on early
extinguishment of debt, unless settled in cash, and loss on asset
impairment. We consider FFO to be an appropriate measure of performance
for a REIT, along with net income and cash flow from operating,
investing and financing activities. We believe that FFO provides useful
information to investors because by excluding the effects of certain
historical amounts, such as depreciation expense and gains or losses on
sales of depreciated operating properties, FFO can facilitate a
comparison of operating performance among REITs. FFO does not represent
cash generated by operating activities in accordance with generally
accepted accounting principles, or GAAP, and should not be considered an
alternative to net income or cash flow from operating activities as a
measure of financial performance or liquidity. FFO is one important
factor considered by our Board of Trustees in determining the amount of
distributions to shareholders. Other important factors include, but are
not limited to, requirements to maintain our status as a REIT,
limitations in our revolving credit facility, our public debt covenants,
the availability of debt and equity capital to us and our expectations
of future capital requirements and operating performance.
(2) As of December 31, 2008, our 15,180 outstanding series D
preferred shares were convertible into 29,193 common shares. The effect
of a conversion of our series D convertible preferred shares on income
from continuing operations available for common shareholders per share
is anti-dilutive to income and FFO for the quarters ended December 31,
2008 and 2007, but dilutive to FFO for the years ended December 31, 2008
and 2007. Set forth below is the calculation of diluted net income
available for common shareholders, diluted FFO available for common
shareholders and diluted weighted average common shares outstanding.
Quarter Ended Year Ended
December 31, December 31,
2008 2007 2008 2007
Net income available for common $50,796 $8,881 $193,977 $59,453
shareholders
Add - Series D convertible preferred 6,167 6,167 24,668 24,668
distributions
Net income available for common $56,963 $15,048 $218,645 $84,121
shareholders - diluted
FFO available for common shareholders $62,158 $60,901 $251,691 $247,597
Add - Series D convertible preferred 6,167 6,167 24,668 24,668
distributions
FFO available for common shareholders - $68,325 $67,068 $276,359 $272,265
diluted
Weighted average common shares 227,704 222,927 226,468 214,361
outstanding - basic
Effect of dilutive Series D preferred 29,193 29,193 29,193 29,193
shares
Weighted average common shares 256,897 252,120 255,661 243,554
outstanding - diluted
HRPT Properties Trust
Consolidated Balance Sheets
(amounts in thousands, except share data)
December 31,
2008 2007
(audited)
ASSETS
Real estate properties:
Land $1,220,554 $1,189,684
Buildings and improvements 5,021,703 4,966,610
6,242,257 6,156,294
Accumulated depreciation (862,958) (808,216)
5,379,299 5,348,078
Properties held for sale 145,849 --
Acquired real estate leases, net 164,308 150,672
Cash and cash equivalents 15,518 19,879
Restricted cash 10,837 18,027
Rents receivable, net of allowance for doubtful 196,839 197,967
accounts of $8,492 and $6,290, respectively
Other assets, net 103,449 124,709
Total assets $6,016,099 $5,859,332
LIABILITIES AND SHAREHOLDERS' EQUITY
Revolving credit facility $201,000 $140,000
Senior unsecured debt, net 2,241,225 2,239,784
Mortgage notes payable, net 447,693 394,376
Other liabilities related to properties held for sale 3,400 --
Accounts payable and accrued expenses 99,285 89,441
Acquired real estate lease obligations, net 47,839 41,607
Rent collected in advance 26,537 24,779
Security deposits 17,935 16,063
Due to affiliates 10,073 10,399
Total liabilities 3,094,987 2,956,449
Shareholders' equity:
Preferred shares of beneficial interest, $0.01 par
value:
50,000,000 shares authorized;
Series B preferred shares; 8 3/4% cumulative
redeemable at par on or after September 12, 2007; 169,079 169,079
7,000,000 shares issued and outstanding, aggregate
liquidation preference $175,000
Series C preferred shares; 7 1/8% cumulative
redeemable at par on or after February 15, 2011; 145,015 145,015
6,000,000 shares issued and outstanding, aggregate
liquidation preference $150,000
Series D preferred shares; 6 1/2% cumulative
convertible; 15,180,000 shares issued and outstanding, 368,270 368,270
aggregate liquidation preference $379,500
Common shares of beneficial interest, $0.01 par value:
350,000,000 shares authorized; 227,731,938 and
225,444,497 shares issued and outstanding, 2,277 2,254
respectively
Additional paid in capital 2,937,986 2,923,455
Cumulative net income 2,072,254 1,827,609
Cumulative common distributions (2,441,841) (2,251,539)
Cumulative preferred distributions (331,928) (281,260)
Total shareholders' equity 2,921,112 2,902,883
Total liabilities and shareholders' equity $6,016,099 $5,859,332
Source: HRPT Properties Trust
Contact: HRPT Properties Trust
Timothy A. Bonang, 617-796-8222
Director of Investor Relations
or
Katherine L. Johnston, 617-796-8222
Manager of Investor Relations
www.hrpreit.com