HRPT Properties Trust Announces Financial Results for the Periods Ended June 30, 2001.Business Editors NEWTON, Mass.--(BUSINESS WIRE)--Aug. 9, 2001 HRPT HRPT High-Resolution Picture Transmission HRPT High Rate Picture Transmission HRPT Hyperparathyroidism HRPT Highway Regulating Point Team Properties Trust (NYSE NYSE See: New York Stock Exchange :HRP) today announced its financial results for the periods ended June June: see month. 30, 2001, together with comparative results for the 2000 periods as follows:
(in thousands, except per share amounts)
Quarter Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
Revenues $ 98,646 $101,045 $198,476 $201,299
Net income $ 25,716 $ 28,705 $ 51,512 $ 55,155
Net income available
for common
shareholders $ 20,779 $ 28,705 $ 44,545 $ 55,155
FFO from property
operations $ 32,782 $ 36,247 $ 66,136 $ 72,068
FFO $ 42,003 $ 46,624 $ 84,305 $ 92,743
Weighted average
common shares
outstanding
130,619 131,935 131,103 131,928
Per common share:
Basic and diluted
net income available
for common shareholders $ 0.16 $ 0.22 $ 0.34 $ 0.42
FFO from property
operations $ 0.25 $ 0.27 $ 0.50 $ 0.55
FFO $ 0.32 $ 0.35 $ 0.64 $ 0.70
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. ("FFO FFO See: Funds from operations ") for the quarter and six months ended June 30, 2001, was $0.32 and $0.64 per share, respectively, compared to the quarter and six months ended June 30, 2000, of $0.35 and $0.70 per share, respectively. The decrease is mainly attributable to property sales during 2000 and 2001, the decrease in property occupancy, the decrease in equity in FFO of Senior Housing Properties Trust ("SNH SNH Scottish Natural Heritage SNH Sunday Night Heat (wrestling) SNH Society for Netherlandic History SNH Supervision Network Hub ") and distributions on series A preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. issued during February 2001, offset by the decrease in interest expense from the repayment of debt during the first quarter of 2001 and the increase in interest earned on cash balances. Because HRPT remains a minority shareholder of SNH, a portion of SNH's earnings and FFO are reported on the financial statements of HRPT. FFO from property operations (FFO excluding FFO from equity investments) was $0.25 and $0.50 per share for the quarter and six months ended June 30, 2001, respectively, compared to $0.27 and $0.55 per share for the quarter and six months ended June 30, 2000, respectively. The decrease in FFO from property operations was mainly attributable to property sales during 2000 and 2001, the decrease in property occupancy from 98% at June 30, 2000, to 94% at June 30, 2001, and distributions on series A preferred shares issued during February 2001, offset by an early lease termination fee termination fee The one-time charge for terminating or transferring an individual retirement account. If a financial institution charges a termination fee, the fee must be spelled out in the original agreement that is signed when the account is opened. received during June 2001 totaling $1.6 million, a decrease in interest expense, and interest earned on proceeds of property sales and financings. Rents charged for approximately 158,000 square feet of office space which were renewed or released during the quarter ended June 30, 2001, were approximately 15% higher than rents previously charged for the same space. Recent Activities As previously announced, HRPT's Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of up to 14 million common shares. Through August 9, 2001, HRPT has repurchased 1,857,800 common shares for $15.5 million, including transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). . In April 2001 HRPT entered into a new $425 million unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility. The new credit facility bears interest at LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). plus a premium and matures in April 2005. The new credit facility includes an accordian feature which allows it to be expanded, in certain 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 , up to $625 million. HRPT's credit facility is available for property acquisitions, working capital and for general business purposes. HRPT is a real estate investment trust headquartered in Newton, MA. HRPT currently owns office buildings with approximately 19 million square feet located throughout 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. . THIS PRESS RELEASE CONTAINS 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 UPON HRPT'S CURRENT BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT GUARANTEED. FOR EXAMPLE, THE IMPLICATION WHICH MIGHT BE DRAWN FROM HRPT'S RECENT LEASING EXPERIENCE IS THAT RENTS WILL CONTINUE TO INCREASE AS LEASES EXPIRE expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. . HOWEVER, CHANGING MARKET CONDITIONS MAY MEAN THAT EXPIRING ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. LEASES WILL CAUSE VACANCIES TO INCREASE OR PROPERTIES TO BE LEASED AT LOWER RENTS. ALSO, ALTHOUGH HRPT EXPECTS TO PURSUE PROPERTY SALES AND ACQUISITIONS DURING 2001, PROPERTY SALES OR ACQUISITIONS MAY NOT BE COMPLETED BECAUSE PRICES WHICH HRPT CONSIDERS ACCEPTABLE ARE NOT ACHIEVABLE. SIMILARLY, ALTHOUGH HRPT'S BOARD OF TRUSTEES HAS AUTHORIZED A COMMON SHARE BUYBACK Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may PROGRAM AND HRPT REPURCHASED SOME COMMON SHARES IN 2001, ADDITIONAL COMMON SHARES MAY NOT BE PURCHASED BECAUSE SHARES ARE NOT AVAILABLE AT ACCEPTABLE PRICES, BECAUSE OTHER USES OF AVAILABLE CASH BECOME MORE ATTRACTIVE TO HRPT OR FOR SOME OTHER REASON. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.
HRPT Properties Trust
Historical Financial Information
(in thousands, except per share amounts)
Quarter Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
Revenues:
Rent and other
income $ 98,646 $ 101,045 $ 198,476 $ 201,299
Expenses:
Operating expenses 35,142 34,238 70,177 68,065
Interest 20,929 25,310 45,128 50,408
Depreciation and
amortization 16,225 16,040 32,382 31,914
General and
administrative 3,640 4,332 7,733 9,029
Non-recurring items:
Impairment of assets -- -- (3,955) --
Total expenses 75,936 79,920 151,465 159,416
Income before equity
in earnings of equity
investments, gain on
sale of properties and
extraordinary item 22,710 21,125 47,011 41,883
Equity in earnings of
equity investments of
Senior Housing Properties
Trust and Hospitality
Properties Trust 3,338 5,602 6,650 11,294
Gain on sale of
properties, net -- 1,978 -- 1,978
Extraordinary item -
early extinguishment
of debt (332) -- (2,149) --
Net income 25,716 28,705 51,512 55,155
Preferred distributions (4,937) -- (6,967) --
Net income available
for common shareholders $ 20,779 $ 28,705 $ 44,545 $ 55,155
Income before equity
in earnings of equity
investments, gain on
sale of properties
and extraordinary item $ 22,710 $ 21,125 $ 47,011 $ 41,883
Non-recurring items -- -- (3,955) --
Preferred distributions (4,937) -- (6,967) --
Depreciation and
non-cash expenses 15,009 15,122 30,047 30,185
Funds from operations
of property operations 32,782 36,247 66,136 72,068
Funds from operations
from equity investments
of Senior Housing
Properties Trust and
Hospitality
Properties Trust 9,221 10,377 18,169 20,675
Funds from operations $ 42,003 $ 46,624 $ 84,305 $ 92,743
Weighted average common
shares outstanding 130,619 131,935 131,103 131,928
Per common share:
Basic and diluted
net income available
for common
shareholders $ 0.16 $ 0.22 $ 0.34 $ 0.42
Funds from operations
of property
operations $ 0.25 $ 0.27 $ 0.50 $ 0.55
Funds from operations $ 0.32 $ 0.35 $ 0.64 $ 0.70
Balance Sheet Data: June 30, 2001 December 31,
2001 2000
Assets
Real estate investments, at cost $ 2,554,314 $ 2,552,472
Accumulated depreciation (189,207) (160,015)
2,365,107 2,392,457
Equity investments 307,163 314,099
Other assets 182,221 193,587
$ 2,854,491 $ 2,900,143
Liabilities and Shareholders' Equity
Indebtedness $ 1,098,910 $ 1,302,950
Other liabilities 46,853 67,981
Shareholders' equity 1,708,728 1,529,212
$ 2,854,491 $ 2,900,143
Funds from operations, or "FFO", as defined in the White Paper on Funds from Operations which was approved by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT NAREIT National Association of Real Estate Investment Trusts ") in March 1995 and as clarified from time to time, is "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 generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustment for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis." HRPT considers FFO to be an appropriate measure of performance for 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. , along with cash flow from operating activities, financing activities and investing activities, because it provides investors with an indication of an equity REIT's ability to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. and service debt, make capital expenditures, pay distributions and fund other cash needs. HRPT computes FFO in accordance with the standards established by NAREIT including adjustments for our pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. share of FFO of HPT HPT Human Performance Technology HPT Hyperparathyroidism HPT Heartland Poker Tour HPT Home Pregnancy Test HPT High Pressure Turbine HPT Host Print Transform HPT High-Performance Team HPT high-payoff target (US DoD) and SNH, but excluding unusual and non-recurring items, certain non-cash items, and gains on sales of undepreciated properties, which may not be comparable to FFO reported by other REITs that define the term differently. FFO does not represent cash generated by operating activities in accordance with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and should not be considered as an alternative to net income, determined in accordance with GAAP, as an indication of financial performance or the cash flow from operating activities, determined in accordance with GAAP, or as a measure of liquidity.
HRPT Properties Trust
Additional Data
HRPT has determined to publish the following Additional Data which
is intended to respond to frequently asked questions (dollar amounts
are in thousands).
- Total revenues include non-cash straight-line rent adjustments as
follows:
Periods Ended June 30,
Quarter Ended June 30, Six Months Ended June 30,
2001 2000 2001 2000
$2,249 $2,786 $4,465 $5,627
- Equity in earnings and FFO of equity investments includes earnings
and FFO from Hospitality Properties Trust ("HPT") and Senior
Housing Properties Trust ("SNH") as follows:
Periods Ended June 30,
Quarter Ended June 30, Six Months Ended June 30,
2001 2000 2001 2000
Equity in Earnings of Equity Investments:
HPT $2,099 $2,019 $4,103 $3,984
SNH 1,239 3,583 2,547 7,310
$3,338 $5,602 $6,650 $11,294
FFO from Equity Investments:
HPT $4,063 $3,881 $8,028 $7,605
SNH 5,158 6,496 10,141 13,070
$9,221 $10,377 $18,169 $20,675
- Capitalized expenses for building maintenance, tenant improvements
and leasing commissions (excluding development and redevelopment
activities) were as follows:
Periods Ended June 30,
Quarter Ended June 30, Six Months Ended June 30,
2001 2000 2001 2000
$10,169 $5,955 $16,109 $11,553
- For the 188 properties owned by HRPT for the full quarters ended
June 30, 2001 and 2000 ("same store properties"): total revenues
increased to $95,699 from $95,335, and total expenses increased to
$34,771 from $32,901. These same store properties constitute
approximately 18.9 million square feet and 99.7% of the office
properties owned by HRPT on June 30, 2001.
- Same store revenues and expenses exclude gains on land sales,
lease termination revenues and non-recurring property operating
income and expenses.
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