HRPT Properties Trust Announces Financial Results for the Periods Ended September 30, 2001.Business Editors NEWTON Newton, cities, United States Newton. 1 City (1990 pop. 16,700), seat of Harvey co., S central Kans., in an agricultural area; inc. 1872. , Mass.--(BUSINESS WIRE)--Nov. 7, 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 September September: see month. 30, 2001, together with comparative results for the 2000 periods as follows:
(in thousands, except per share amounts)
Quarter Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Revenues $ 96,784 $103,175 $295,260 $304,474
Net income $ 19,763 $ 29,961 $ 71,275 $ 85,116
Net income
available for
common shareholders $ 14,825 $ 29,961 $ 59,370 $ 85,116
FFO from property
operations $ 31,158 $ 37,502 $ 97,294 $109,570
FFO $ 39,901 $ 46,372 $124,206 $139,115
Weighted average
common shares
outstanding 129,937 131,944 130,710 131,934
Per common share:
Basic and diluted
net income
available for
common shareholders $ 0.11 $ 0.23 $ 0.45 $ 0.65
FFO from property
operations $ 0.24 $ 0.28 $ 0.74 $ 0.83
FFO $ 0.31 $ 0.35 $ 0.95 $ 1.05
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 nine months ended September 30, 2001, was $0.31 and $0.95 per share, respectively, compared to the quarter and nine months ended September 30, 2000, of $0.35 and $1.05 per share, respectively. The decrease is mainly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to property sales during 2000 and 2001, the decrease in property occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term 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 February: see month. 2001, offset by the decrease in interest expense from the repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of debt during the first quarter of 2001 and the increase in interest earned on cash balances. FFO from property operations (FFO excluding FFO from equity investments) was $0.24 and $0.74 per share for the quarter and nine months ended September 30, 2001, respectively, compared to $0.28 and $0.83 per share for the quarter and nine months ended September 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 97% at September 30, 2000, to 94% at September 30, 2001, and distributions on series A preferred shares issued during February 2001, offset by a decrease in interest expense, and interest earned on proceeds of property sales and financings. Rents charged for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 293,000 square feet of office space which were renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. or released during the quarter ended September 30, 2001, were approximately 9% higher than rents previously charged for the same space. Recent Activities In September 2001 HRPT purchased one office property located in suburban Boston Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. for $9.3 million. The property has approximately 98,000 square feet of leasable office space and is 94% occupied oc·cu·py tr.v. oc·cu·pied, oc·cu·py·ing, oc·cu·pies 1. To fill up (time or space): a lecture that occupied three hours. 2. To dwell or reside in. 3. by four tenants. The largest tenant in this property is the Food and Drug Administration, an agency of the General Services Administration The General Services Administration (GSA) was established by section 101 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C.A. § 751). The GSA sets policy for and manages government property and records. of the U.S. Government (the "GSA (1) (Global mobile Suppliers Association, Sawbridgeworth, U.K., www.gsacom.com) A membership organization of suppliers of GSM products and services. Its goal is to promote GSM as the worldwide mobile communications standard. See GSM Association and GSM. "). This tenant leases approximately one-third of the property until 2020. Other major tenants include the Internal Revenue Service (GSA) and the Massachusetts Eye and Ear Infirmary Massachusetts Eye and Ear Infirmary, known locally as Mass. Eye & Ear, is a specialty hospital providing patient care for disorders of the eye, ear, nose, throat, head and neck. . 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. from this property is approximately 12% of the invested amount. 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: a common share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program. Through November November: see month. 5, 2001, HRPT has repurchased 3,022,100 common shares for $25.2 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). , under this program. 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 implication In logic, a relation that holds between two propositions when they are linked as antecedent and consequent of a true conditional proposition. Logicians distinguish two main types of implication, material and strict. 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 ADDITIONAL ACQUISITIONS DURING 2001, PROPERTY SALES OR ADDITIONAL 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 Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Revenues:
Rent and other income $ 96,784 $103,175 $295,260 $304,474
Expenses:
Operating expenses 34,247 34,907 104,424 102,972
Interest 21,036 25,441 66,164 75,849
Depreciation and
amortization 16,471 15,885 48,853 47,799
General and
administrative 4,061 4,482 11,794 13,511
Non-recurring items:
Impairment of assets -- -- (3,955) --
Total expenses 75,815 80,715 227,280 240,131
Income before equity
in earnings of equity
investments, gain on
sale of properties
and extraordinary item 20,969 22,460 67,980 64,343
Equity in earnings
of equity investments
of Senior Housing
Properties Trust
and Hospitality
Properties Trust 4,430 4,091 11,080 15,385
Loss on equity
transactions of
equity investments(1) (5,636) -- (5,636) --
Gain on sale of
properties, net -- 4,620 -- 6,598
Extraordinary item -
early extinguishment
of debt -- (1,210) (2,149) (1,210)
Net income 19,763 29,961 71,275 85,116
Preferred distributions (4,938) -- (11,905) --
Net income
available for
common shareholders $ 14,825 $ 29,961 $ 59,370 $ 85,116
Income before equity in
earnings of equity
investments, gain on
sale of properties and
extraordinary item $ 20,969 $ 22,460 $ 67,980 $ 64,343
Non-recurring items -- -- (3,955) --
Preferred distributions (4,938) -- (11,905) --
Depreciation and
non-cash expenses 15,127 15,042 45,174 45,227
Funds from operations
from property
operations(2) 31,158 37,502 97,294 109,570
Funds from operations
from equity investments
of Senior Housing
Properties Trust and
Hospitality Properties
Trust(2) 8,743 8,870 26,912 29,545
Funds from
operations(2) $ 39,901 $ 46,372 $124,206 $139,115
Weighted average common
shares outstanding 129,937 131,944 130,710 131,934
Per common share:
Basic and diluted net
income available for
common shareholders $ 0.11 $ 0.23 $ 0.45 $ 0.65
Funds from operations
from property
operations(2) $ 0.24 $ 0.28 $ 0.74 $ 0.83
Funds from
operations(2) $ 0.31 $ 0.35 $ 0.95 $ 1.05
(1) HRPT accounts for its common share investments in SNH and HPT
using the equity method. Accordingly, HRPT recognized a loss of $5.6
million during the quarter ended September 30, 2001, reflecting the
issuance of shares by SNH during the quarter at a price below HRPT's
per-share carrying value.
(2) 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")
in March 1995 and as clarified from time to time, is "net income
(computed in accordance with generally accepted accounting
principles), 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, 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 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 share of FFO of HPT 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 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
Historical Financial Information
(in thousands, except per share amounts)
Balance Sheet Data: September 30, December 31,
2001 2000
Assets
Real estate investments, at cost $2,567,188 $2,552,472
Accumulated depreciation (204,026) (160,015)
2,363,162 2,392,457
Equity investments 299,125 314,099
Other assets 179,292 193,587
$2,841,579 $2,900,143
Liabilities and Shareholders' Equity
Indebtedness $1,098,362 $1,302,950
Other liabilities 53,336 67,981
Shareholders' equity 1,689,881 1,529,212
$2,841,579 $2,900,143
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 September 30,
Quarter Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
$2,395 $2,652 $6,860 $8,279
-- 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 September 30,
Quarter Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Equity in Earnings of
Equity Investments:
HPT $2,087 $2,029 $6,190 $6,013
SNH 2,343 2,062 4,890 9,372
$4,430 $4,091 $11,080 $15,385
FFO from Equity
Investments:
HPT $3,893 $3,940 $11,921 $11,546
SNH 4,850 4,930 14,991 17,999
$8,743 $8,870 $26,912 $29,545
-- Capitalized expenses for building maintenance, tenant
improvements and leasing commissions (excluding development and
redevelopment activities) were as follows:
Periods Ended September 30,
Quarter Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
$4,792 $5,576 $20,901 $15,113
-- For the 188 properties owned by HRPT for the full quarters ended
September 30, 2001 and 2000 ("same store properties"): total
revenues decreased to $94,605 from $96,051, and total expenses
increased to $34,020 from $33,096. These same store properties
constitute approximately 18.9 million square feet and 99.7% of
the office properties owned by HRPT on September 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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