Equity Office Announces Fourth Quarter and Full Year 2006 Results.CHICAGO -- Equity Office Properties Trust Equity Office Properties Trust, headquartered in Chicago, Illinois, is the largest owner of office buildings in the United States. It was formed in 1976 by Samuel Zell [1] and in February 2007, was acquired by the Blackstone Group for $23 billion plus the assumption of (NYSE NYSE See: New York Stock Exchange : EOP EOP Educational Opportunity Program (California State University) EOP Executive Office of the President EOP Equity Office Properties Trust (ticker) EOP Emergency Operations Plan EOP Earth Orientation Parameters ) today reported results for the fourth quarter and full year 2006. For the fourth quarter 2006, Equity Office reported net income available to common shareholders of $313.1 million and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.87, compared to net income of $19.0 million and diluted earnings per share of $0.05 in the fourth quarter 2005. For the full year ended December 31, 2006, the company reported net income of $307.2 million and diluted earnings per share of $0.86, compared to net income of $8.1 million and diluted earnings per share of $0.02 in 2005. Funds From Operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. For the fourth quarter 2006, Funds From Operations (FFO FFO See: Funds from operations ) available to common shareholders was $215.2 million and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. FFO per share was $0.54. FFO for the fourth quarter 2005 was $181.1 million and diluted FFO per share was $0.41. For 2006, FFO totaled $663.9 million and diluted FFO per share was $1.64. FFO for 2005 was $608.3 million and diluted FFO per share was $1.35. The attachment to this press release reconciles FFO to net income, the most directly comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measure. Financial Results Summary The following table includes significant financial statement items that affect the comparability of GAAP net income between periods. [TABLE OMITTED] (a) Includes amounts from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. and our share of unconsolidated joint ventures. (b) The total per share amounts may not total the sum of the individual per share amounts due to rounding. 2006 Guidance Compared to 2006 Actual Results Equity Office provided updated guidance for 2006 on October 31, 2006, in connection with the third quarter 2006 earnings release. Listed below is a comparison of previously issued guidance to actual results. [TABLE OMITTED] (a) The gain on sales of real estate was $0.44 through September 30, 2006, and $1.35 for the full year 2006. The primary assumptions used in calculating the 2006 guidance ranges included: [TABLE OMITTED] (a) G&A expense excludes severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and merger-related costs. Same Store Property Net Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics ) excludes income from early lease terminations and hurricane-related charges. Same Store Property Operating Revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. and Net Operating Income Fourth quarter 2006 same store property operating revenues increased 2.9% as compared to fourth quarter 2005 as a result of occupancy gains, higher tenant reimbursements, and market rent growth. Same store property operating revenues for the full year increased 1.2% as compared to 2005. Fourth quarter 2006 same store property net operating income (NOI), excluding income from early lease terminations and the effects of Hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. , increased 4.0% as compared to fourth quarter 2005.
Same store NOI for the full year, excluding income from early lease
terminations and the effects of Hurricane Katrina, increased 1.4% as
compared to 2005.Leasing Results The same store portfolio occupancy increased to 92.9% at quarter-end from 90.1% at the end of the third quarter 2005. EOP's effective office portfolio occupancy was 92.2% at December 31, 2006, compared to 90.4% at December 31, 2005. The effective office portfolio represents the company's economic interest in the properties, which is used to derive GAAP net income. In the fourth quarter 2006, the company leased 5.2 million square feet, compared to 4.5 million square feet in the fourth quarter 2005. For 2006, the company leased 17.9 million square feet, compared to 20.1 million square feet in 2005. Tenant improvements and leasing costs for leases that commenced during the fourth quarter 2006 were $28.48 per square foot on a weighted average basis, compared to $22.45 per square foot in the fourth quarter 2005. Tenant improvements and leasing costs for leases that commenced during 2006 were $21.10 per square foot on a weighted average basis, compared to $20.23 per square foot during 2005. Investment Activity In the fourth quarter 2006, Equity Office sold 6.5 million square feet of assets for $1.4 billion and acquired 1.3 million square feet for $479.6 million. For the full year, Equity Office sold 11.7 million square feet of assets for $2.2 billion and acquired 3.6 million square feet for $1.4 billion. In 2007 through January 29, Equity Office sold 545,784 square feet of assets for $176.7 million and acquired 246,771 square feet for $114.3 million. Conference Call Information Equity Office will not be holding a conference call related to the release of the fourth quarter and full year earnings results. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements are based on management's present expectations and beliefs about future events. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Important factors that could cause actual results to differ materially from those reflected in such forward-looking statements and that should be considered in evaluating this release and the outlook of Equity Office include, but are not limited to, changes in economic, business and competitive conditions, and other factors affecting the operation of the business of Equity Office. These and other risks and uncertainties are detailed from time to time in Equity Office's filings with the SEC, including its Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed on March 15, 2006, as amended by Part II - Item 1A of our Form 10-Q Form 10-Q See 10-Q. filed on August 8, 2006. Equity Office is under no obligation, and expressly disclaims any obligation, to update or alter its forward-looking statements, whether as a result of changes, new information, subsequent events or otherwise. Equity Office Properties Trust, operating through its various subsidiaries and affiliates, is the nation's largest publicly held office building owner and manager with a total office portfolio consisting of whole or partial interests in 543 buildings comprising 103.1 million square feet in 16 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , as of December 31, 2006. Equity Office has an ownership presence in 24 Metropolitan Statistical Areas (MSAs) and in 98 submarkets, enabling it to provide a wide range of office solutions for local, regional and national customers. For more company information visit the Equity Office website at http://www.equityoffice.com. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] FFO Definition: FFO is defined as net income, computed in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ("GAAP"), excluding gains from sales of properties (but including losses from sales of properties, impairments and provisions for losses on properties held for sale), plus real estate related depreciation and amortization. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. Equity Office believes that FFO is helpful to investors as one of several measures of the performance of an equity REIT Equity REIT A Real Estate Investment Trust that assumes ownership status in the property it invests in enabling investors of the REIT to earn dividends on rental income from the property and appreciation in property resale. Antithesis of a Mortgage REIT. . Equity Office further believes that by excluding the effect of depreciation, amortization and gains from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and between other equity REITs. Investors should review FFO, along with GAAP net income when trying to understand an equity REIT's operating performance. Equity Office computes FFO in accordance with its interpretation of the standards established by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT NAREIT National Association of Real Estate Investment Trusts "), which may not be comparable to FFO reported by other equity REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than Equity Office does. FFO does not represent cash generated from operating activities in accordance with GAAP, nor does it represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of Equity Office's financial performance, or to cash flow from operating activities, determined in accordance with GAAP, as a measure of its liquidity, nor is it indicative of funds available to fund its cash needs, including its ability to make cash distributions. [TABLE OMITTED] FFO Definition: FFO is defined as net income, computed in accordance with accounting principles generally accepted in the United States ("GAAP"), excluding gains from sales of properties (but including losses from sales of properties, impairments and provisions for losses on properties held for sale), plus real estate related depreciation and amortization. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. Equity Office believes that FFO is helpful to investors as one of several measures of the performance of an equity REIT. Equity Office further believes that by excluding the effect of depreciation, amortization and gains from sales of real estate, all of which are based on historical costs and which may be of limited relevance in evaluating current performance, FFO can facilitate comparisons of operating performance between periods and between other equity REITs. Investors should review FFO, along with GAAP net income when trying to understand an equity REIT's operating performance. Equity Office computes FFO in accordance with its interpretation of the standards established by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"), which may not be comparable to FFO reported by other equity REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than Equity Office does. FFO does not represent cash generated from operating activities in accordance with GAAP, nor does it represent cash available to pay distributions and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of Equity Office's financial performance, or to cash flow from operating activities, determined in accordance with GAAP, as a measure of its liquidity, nor is it indicative of funds available to fund its cash needs, including its ability to make cash distributions. [TABLE OMITTED] [TABLE OMITTED] |
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