<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
_________________
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 23, 1998
BOSTON PROPERTIES, INC.
(Exact name of Registrant as specified in its Charter)
Delaware
(State of Incorporation)
1-13087 04-2473675
(Commission File Number) (IRS Employer Id. Number)
8 Arlington Street
Boston, Massachusetts 02116
(Address of principal executive offices) (Zip Code)
(617) 859-2600
(Registrant's telephone number, including area code)
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Item 5 Other Events
On January 23, 1998, the Company issued the following press release:
BOSTON PROPERTIES, INC. ANNOUNCES
---------------------------------
FOURTH QUARTER 1997 RESULTS
---------------------------
BOSTON, MA, January 23, 1997 -- Boston Properties, Inc. (NYSE:BXP) today
reported results for the fourth quarter ended December 31, 1997.
Funds from Operations (FFO) for the quarter ended December 31, 1997 were
approximately $20.4 million, or $0.53 per share, compared with FFO on a pro
forma basis of approximately $16.5 million, or $0.43 per share, for the quarter
ended December 31, 1996. The weighted average number of shares outstanding
totaled 38,693,921 for the quarter and 38,693,541 for the same quarter last year
on a pro forma basis. Revenue for the quarter ended December 31, 1997 amounted
to approximately $77.3 million, compared to pro forma revenue of approximately
$55.4 million for the quarter ended December 31, 1996. Net income for the
quarter ended December 31, 1997 was approximately $12.4 million, or $0.32 per
share, compared to pro forma net income of approximately $11.2 million, or $0.29
per share, for the quarter ended December 31, 1996.
The reported results are unaudited and there can be no assurance that they will
not vary from the final audited information for the year ended December 31,
1997. In the opinion of management, all adjustments considered necessary for a
fair presentation of these reported results have been made. Pro forma results
are presented as if the Company's initial public offering of common stock and
related formation transactions (which were completed on June 23, 1997) had
occurred at the beginning of the relevant period.
As of December 31, 1997, the Company's portfolio consisted of 18.2 million
square feet, including six properties under development totaling 1.2 million
square feet and ten properties which were under contract and are expected to
close in January and February of 1998 (three of which acquisitions have been
completed as of January 22, 1998). The overall occupancy rate for properties in-
service as of December 31, 1997 was 97.2%. The occupancy rate was 97.6% for the
Class A office buildings, 97.3% for the R&D buildings and 93.4% for the
industrial buildings. For the quarter ended December 31, 1997, Hotel Revenue per
Available Room (RevPAR) was $159.50, compared to RevPAR of $149.14 for the
comparable quarter ended December 31, 1996, a 6.90% increase.
Highlights of the fourth quarter included:
. Acquisition of 875 Third Avenue, a 681,669-square-foot, Class A office
building in midtown Manhattan.
. Acquisition of 100 East Pratt Street, a 633,482-square-foot, Class A office
building on the inner harbor in downtown Baltimore, Maryland.
. Announcement of the agreement to acquire Riverfront Plaza, an
899,720-square-foot Class A office building in Richmond, Virginia, which
closed on January 22, 1998.
. Announcement of the agreement to acquire the Mulligan/Griffin portfolio, a
property portfolio containing approximately 1.3 million square feet and
located in Reston and Springfield, Virginia, Washington, D.C., and
Gaithersburg and Rockville, Maryland, and six development sites in Reston and
Rockville, a portion of which acquisition closed on January 21, 1998.
Boston Properties, Inc. is a fully integrated, self-administered and self-
managed real estate investment trust ("REIT") that develops, redevelops,
acquires, manages, operates and owns a diverse portfolio of office, industrial
and hotel properties predominantly located in the Greater Boston, Greater
Washington, D.C., Midtown Manhattan and Baltimore markets. The Company is one of
the largest owners and developers of office properties in the United States.
This press release contains forward-looking statements within the meaning of the
Federal securities laws. Forward-looking statements are inherently subject to
risks and uncertainties, many of which cannot be predicted with accuracy.
Factors that could cause actual results to differ materially from the Company's
current expectations include the strength of the commercial office and
industrial real estate markets in which the Company operates, competitive market
conditions, general economic growth, interest rates and capital market
conditions. For further information, please refer to the Company's filings with
the Securities & Exchange Commission.
BOSTON PROPERTIES, INC.
-----------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
FOR THE PERIOD FROM FOR THE THREE
JUNE 23, 1997 FOR THE THREE MONTHS ENDED
THROUGH MONTHS ENDED DECEMBER 31, 1996
DECEMBER 31, 1997 DECEMBER 31, 1997 (PRO FORMA)
------------------- ----------------- -----------------
(1) (1) (2)
<S> <C> <C> <C>
REVENUE
Rental:
Base rent............. $126,401 $ 68,509 $ 49,242
Recoveries from ten-
ants................. 12,564 6,421 5,250
Parking and other..... 676 458 73
-------- -------- --------
Total rental reve-
nue................ 139,641 75,388 54,565
Development and manage-
ment services......... 3,813 1,591 605
Interest and other..... 2,189 309 236
-------- -------- --------
Total revenue....... 145,643 77,288 55,406
-------- -------- --------
EXPENSES
Rental:
Operating............. 19,591 10,764 7,283
Real estate taxes..... 20,502 11,437 7,703
General and administra-
tive.................. 6,689 3,525 2,996
Interest............... 38,264 22,214 13,769
Depreciation and amor-
tization.............. 21,719 11,565 7,681
-------- -------- --------
Total expenses...... 106,765 59,505 39,432
-------- -------- --------
Income before minority
interests and
extraordinary item..... 38,878 17,783 15,974
Minority interest in
property partnership... (215) (146) (96)
-------- -------- --------
Income before minority
interest in Operating
Partnership and
extraordinary item..... 38,663 17,637 15,878
Minority interest in
Operating Partnership.. (11,437) (5,265) (4,659)
-------- -------- --------
Income before
extraordinary item..... 27,226 12,372 11,219
Extraordinary gain on
early debt
extinguishments, net of
minority interest...... 7,925 -- --
-------- -------- --------
Net income.............. $ 35,151 $ 12,372 $ 11,219
======== ======== ========
Basic earnings per
share:
Income before extraor-
dinary item........... $ 0.70 $ 0.32 $ 0.29
Extraordinary item:
Gain on early debt ex-
tinguishments........ $ 0.21 $ 0.00 $ 0.00
Net income............. $ 0.91 $ 0.32 $ 0.29
Weighted average number
of common shares
outstanding............ 38,694 38,694 38,694
Company's Funds from
Operations............. $ 42,254 $ 20,355 $ 16,462
Company's Funds from
Operations per share... $ 1.09 $ 0.53 $ 0.43
Diluted earnings per
share:
Income before extraor-
dinary item........... $ 0.70 $ 0.32 $ 0.29
Extraordinary item:
Gain on early debt ex-
tinguishments........ $ 0.20 $ 0.00 $ 0.00
Net income............. $ 0.90 $ 0.32 $ 0.29
Weighted average number
of common shares
outstanding............ 39,108 39,108 39,108
</TABLE>
- --------
(1) Actual results.
(2) Pro forma results of operations assuming the Formation Transactions had
occurred on January 1, 1996.
BOSTON PROPERTIES, INC.
-----------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1997 SEPTEMBER 30, 1997
(UNAUDITED) (UNAUDITED)
----------------- ------------------
<S> <C> <C>
Investments in real estate............... $1,507,079 $1,147,871
Total assets............................. $1,672,371 $1,295,638
Mortgages, notes payable and Unsecured
Line of Credit.......................... $1,332,253 $ 984,614
Total liabilities........................ $1,396,597 $1,018,989
Stockholders' equity and minority inter-
est..................................... $ 275,774 $ 276,649
Total liabilities and stockholders' equi-
ty...................................... $1,672,371 $1,295,638
</TABLE>
BOSTON PROPERTIES, INC.
-----------------------
FUNDS FROM OPERATIONS
---------------------
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
OCTOBER 1, 1997 JUNE 23, 1997
THROUGH THROUGH
DECEMBER 31, 1997 DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
Funds from Operations:(1)
Income from operations before minority
interests................................. $17,783 $38,878
Add:
Real estate depreciation and
amortization............................ 11,395 21,412
Less:
Minority property partnership's share of
Funds from Operations................... (161) (287)
------- -------
Funds from Operations..................... $29,017 $60,003
======= =======
Company's share (70.15% and 70.42%,
respectively) ........................... $20,355 $42,254
======= =======
Funds from Operations per share........... $ 0.53 $ 1.09
======= =======
</TABLE>
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(1) The White Paper on Funds from Operations approved by the Board of
Governors of the National Association of Real Estate Investment Trusts
("NAREIT") in March 1995 defines Funds from Operations as net income
(loss) (computed in accordance with GAAP), excluding gains (or losses)
from debt restructuring and sales of properties, plus real estate related
depreciation and amortization and after adjustments for unconsolidated
partnerships and joint ventures. The Company believes that Funds from
Operations is helpful to investors as a measure of the performance of an
equity REIT because, along with cash flow from operating activities,
financing activities and investing activities, it provides investors with
an indication of the ability of the Company to incur and service debt, to
make capital expenditures and to fund other cash needs. The Company
computes Funds from Operations in accordance with standards established by
NAREIT which may not be comparable to Funds from Operations reported by
other REITs that do not define the term in accordance with the current
NAREIT definition or that interpret the current NAREIT definition
differently than the Company. Funds from Operations does not represent
cash generated from operating activities determined in accordance with
GAAP and should not be considered as an alternative to net income
(determined in accordance with GAAP) as an indication of the Company's
financial performance or to cash flow from operating activities
(determined in accordance with GAAP) as a measure of the Company's
liquidity, nor is it indicative of funds available to fund the Company's
cash needs, including its ability to make cash distributions.
<PAGE>
BOSTON PROPERTIES, INC.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BOSTON PROPERTIES, INC.
/s/ David G. Gaw
-------------------------------------
David G. Gaw,
Chief Financial Officer
Date: January 23, 1998
