BioMed Realty Trust Reports Fourth Quarter and Full-Year 2008 Financial Results
Fourth Quarter 2008 Highlights
During the full year 2008, the company:
Commenting on BioMed's results, Alan D. Gold, BioMed's Chairman and Chief Executive Officer, said, "I am proud of our team's strong performance against the backdrop of the broader market turmoil. Our strategy of building a well-located portfolio of world-class research facilities has served us well as BioMed continues to attract top-notch life science
organizations to our tenant roster. In the fourth quarter alone, we signed leases with Children's Hospital Corporation in Boston and Novo Nordisk in Seattle, followed by our subsequent addition of Kowa Company Ltd., Japan's fifth largest trading company, at the Center for Life Science | Boston in January of this year."
Fourth Quarter and Full-Year 2008 Financial Results
Rental revenues for the fourth quarter were $63.5 million compared to $49.6 million for the same period in 2007, an increase of 27.9%. Rental revenues for 2008 were $227.5 million compared to $196.0 million in 2007, an increase of 16.1%. Same property net operating income on a cash basis for the fourth quarter was $43.7 million, an increase of 3.7% from the same period in 2007.
Total revenues for the fourth quarter were $83.0 million, compared to $64.1 million for the same period in 2007, an increase of 29.6%. For 2008, total revenues increased 13.5% to $302.0 million from $266.1 million in 2007.
Net income available to common stockholders for the fourth quarter was $8.3 million, or $0.10 per diluted share, compared to $13.2 million, or $0.20 per diluted share, for the same period in 2007. Net income available to common stockholders for 2008 was $47.9 million, or $0.67 per diluted share, compared to $55.7 million, or $0.85 per diluted share, in 2007. Annual and fourth quarter 2008 results were impacted by the following items:
Excluding these three items, FFO for the fourth quarter would have been $38.2 million, or $0.46 per diluted share, compared to $31.6 million, or $0.46 per diluted share, in the same period last year. The increase in FFO is primarily the result of an increase in rental revenues.
FFO for 2008 increased 4.6% to $136.3 million, or $1.82 per diluted share, from $130.3 million, or $1.91 per diluted share, for full year 2007. Excluding the three items noted above, FFO for the year would have increased 8.1% over the previous year to $139.5 million, or $1.86 per diluted share. This increase is primarily the result of an increase in rental revenues due to the delivery of the Center for Life Science | Boston.
FFO is a supplemental non-GAAP financial measure used in the real estate industry to measure and compare the operating performance of real estate companies. A complete reconciliation containing adjustments from GAAP net income available to common stockholders to FFO and a definition of FFO are included at the end of this release.
At December 31, 2008, the company's debt to total assets ratio was 41.8%.
As of December 31, 2008, the company's consolidated debt included:
During 2008, the company completed the following debt-related transactions:
The company also completed the sale of 8,625,000 shares of common stock on October 6, 2008, raising net proceeds of approximately $212.4 million. The net proceeds were utilized to repay a portion of the outstanding borrowings on the company's $600 million unsecured revolving line of credit and for other general corporate and working capital purposes.
Including the October 2008 offering, the company completed two common stock offerings in 2008 resulting in net proceeds of approximately $362.0 million, which were used to repay a portion of the outstanding indebtedness under the company's $600 million unsecured revolving line of credit and for other general corporate and working capital purposes.
"We consider prudent stewardship of capital as one of our most important corporate objectives," commented Kent Griffin, President and Chief Financial Officer of BioMed. "In 2008, we continued to proactively manage our balance sheet, including having the foresight to raise common equity twice during the year and to reduce borrowing costs while increasing our debt capacity before credit began to seriously contract in the latter part of the year. As a result, we have reduced our debt level to 41.8% of total assets, our lowest level since the third quarter of 2006. We are confident that our capital structure and positioning, combined with the continued support of our shareholders and lenders, will provide us with the flexibility to capitalize on the opportunities that lie ahead."
During the quarter ended December 31 2008, the company executed ten leasing transactions representing approximately 195,000 square feet, including five new leases totaling approximately 130,000 square feet and five leases amended to extend their terms, totaling approximately 65,000 square feet.
During 2008, the company executed 46 leasing transactions representing approximately 848,000 square feet, including 28 new leases totaling approximately 527,000 square feet and 18 leases amended to extend their terms, totaling approximately 321,000 square feet.
During the quarter ended December 31, 2008, the company completed the purchase of the remaining 30% interest in the limited liability company that owns the 530 Fairview Avenue property in Seattle for approximately $2.6 million, and sold a portion of the parking spaces in the Center for Life Science | Boston garage for approximately $28.8 million.
Also in 2008, the company acquired a 22,000 square foot building at 500 Fairview Avenue in Seattle that is fully leased for an aggregate purchase price of approximately $4.0 million.
As of December 31, 2008, BioMed Realty Trust owned or had interests in 112 buildings, located predominantly in the major U.S. life science markets of Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania and New York/New Jersey. The company's portfolio was comprised of the following, with its operating portfolio 86.9% leased to 124 tenants, as of December 31, 2008:
Quarterly and Annual Distributions
BioMed Realty Trust's board of directors previously declared a fourth quarter 2008 dividend of $0.335 per share of common stock, and a dividend of $0.46094 per share of the company's 7.375% Series A Cumulative Redeemable Preferred Stock for the period from October 16, 2008 through January 15, 2009. For the full year 2008, the company declared dividends totaling $1.34 per common share and $1.84376 per Series A preferred share, with the common dividend representing an increase of 8.1% over 2007 dividend distributions.
Supplemental operating and financial data are available in the Investor Relations section of the company's web site at www.biomedrealty.com.
Teleconference and Web Cast
BioMed Realty Trust will conduct a conference call and audio web cast at 10:00 a.m. Pacific Time (1:00 p.m. Eastern Time) on Thursday, February 12, 2009 to discuss the company's financial results and operations for the quarter. The call will be open to all interested investors either through a live audio web cast at the Investor Relations section of the company's web site at www.biomedrealty.com and www.earnings.com, or live by calling 800.299.7089 (domestic) or 617.801.9714 (international) with call ID number 80976360. The call will be archived for 30 days on both web sites. A telephone playback of the conference call will also be available from 3:00 p.m. Pacific Time on Thursday, February 12, 2009 through midnight Pacific Time on Tuesday, February 17, 2009 by calling 888.286.8010 (domestic) or 617.801.6888 (international) and using access code 78309388.
About BioMed Realty Trust
BioMed Realty Trust, Inc. is a real estate investment trust (REIT) focused on Providing Real Estate to the Life Science Industry(R). The company's tenants primarily include biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry. BioMed Realty Trust owns or has interests in 69 properties, representing 112 buildings with approximately 10.4 million rentable square feet, including approximately 1.4 million square feet of development in progress. The company also owns undeveloped land parcels adjacent to existing properties that it estimates can support up to 1.4 million rentable square feet. The company's properties are located predominantly in the major U.S. life science markets of Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania and New York/New Jersey, which have well-established reputations as centers for scientific research. Additional information is available at www.biomedrealty.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, without limitation; general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, dependence on tenants' financial condition, and competition from other developers, owners and operators of real estate); adverse economic or real estate developments in the life science industry or the company's target markets; risks associated with the availability and terms of financing, the use of debt to fund acquisitions and developments, and the ability to refinance indebtedness as it comes due; failure to manage effectively the company's growth and expansion into new markets, or to complete or integrate acquisitions and developments successfully; risks and uncertainties affecting property development and construction; risks associated with downturns in the national and local economies, increases in interest rates, and volatility in the securities markets; potential liability for uninsured losses and environmental contamination; risks associated with the company's potential failure to qualify as a REIT under the Internal Revenue Code of 1986, as amended, and possible adverse changes in tax and environmental laws; and risks associated with the company's dependence on key personnel whose continued service is not guaranteed. For a further list and description of such risks and uncertainties, see the reports filed by the company with the Securities and Exchange Commission, including the company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
We present funds from operations, or FFO, available to common shares and partnership and LTIP units because we consider it an important supplemental measure of our operating performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, in its March 1995 White Paper (as amended in November 1999 and April 2002). As defined by NAREIT, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. Our computation may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. Further, FFO does not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. FFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions.
-- The company significantly de-leveraged during the quarter, reducing the percentage of debt to total assets to 41.8%, the company's lowest level since September 30, 2006, primarily as the result of lowering outstanding debt to $1.3 billion as of December 31, 2008 by: -- Completing a common stock offering of 8,625,000 shares resulting in net proceeds of approximately $212.4 million -- Repurchasing $46.8 million face value of our exchangeable senior notes for approximately $28.8 million -- Selling a portion of the parking spaces in the garage at the Center for Life Science | Boston for approximately $28.8 million -- Ten leasing transactions were executed representing approximately 195,000 square feet: -- Five new leases totaling approximately 130,000 square feet, including a 36,900 square foot lease with a wholly owned subsidiary of Novo Nordisk A/S at our 530 Fairview property in Seattle, and an additional 49,286 square foot lease with Children's Hospital Corporation at the Center for Life Science | Boston -- Five leases amended to extend their terms, totaling approximately 65,000 square feet -- Net income available to common stockholders for the fourth quarter was $8.3 million, or $0.10 per diluted share, compared to $13.2 million, or $0.20 per diluted share, for the same period in 2007 -- This fourth quarter net income included a gain related to the repurchase of a portion of our exchangeable senior notes of $17.1 million, or $0.21 per diluted share; a charge associated with ineffectiveness of forward starting interest rate swaps of approximately $19.2 million, or $0.23 per diluted share; and a charge associated with an executive retirement of $1.1 million, or $0.01 per diluted share -- Excluding the three items noted above, funds from operations (FFO) for the quarter would have been $38.2 million, or $0.46 per diluted share. Including these three items, FFO was $35.0 million, or $0.42 per diluted share, up from $31.6 million in the same period last year, an increase of 10.8% -- Total revenues increased to $83.0 million, up 29.6% from $64.1 million for the same period in 2007, largely as the result of continued leasing and development deliveries -- Same-property net operating income increased 3.7% on a cash basis from the same period in 2007
SOURCE BioMed Realty Trust, Inc.
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