Executed over 970,000 Square Feet of Leases
Achieved
GAAP and Cash Rent Spreads of 58% and 49%
LOS ANGELES--(BUSINESS WIRE)--
Hudson Pacific Properties, Inc. (the “Company,” or “Hudson Pacific”)
(NYSE: HPP) today announced financial results for the second quarter
ended June 30, 2016.
Second Quarter Highlights
-
Net income attributable to common stockholders of $0.8 million, or
$0.01 per diluted share, compared to net loss of $25.2 million, or
$(0.28) per diluted share, a year ago;
-
FFO, excluding specified items, of $62.9 million, or $0.43 per diluted
share, compared to $68.4 million, or $0.47 per diluted share, a year
ago;
-
Executed new and renewal leases totaling 970,770 square feet,
consisting of 237,510 square feet of new leases and 733,260 square
feet of renewal leases;
-
Achieved GAAP and cash rent growth on new and renewal leases of 57.6%
and 48.9%, respectively;
-
Increased in-service office portfolio leased rate to 91.1% as of
June 30, 2016, up from 90.7% as of March 31, 2016 and 88.8% a year ago;
-
Sold One Bay Plaza in Burlingame, California and Patrick Henry Drive
in Santa Clara, California for a combined total of $72.4 million
before credits, prorations and closing costs; and
-
Declared and paid a quarterly dividend of $0.20 per share on common
stock.
“Our second quarter results include over 970,000 square feet of deals at
cash rent spreads close to 50%, underscoring the strength of our leasing
pipeline and our team’s ability to execute,” said Victor Coleman, Hudson
Pacific Properties’ Chairman and CEO. “Year-to-date we have leased an
impressive 1.8 million square feet, with the preponderance of that
activity, nearly 75%, in our Bay Area assets.”
Coleman added, “We continue to take advantage of demand from
well-qualified buyers for Bay Area assets. In the second quarter, we
sold two additional former-Blackstone portfolio properties, One Bay
Plaza and Patrick Henry Drive, both at premiums to our original purchase
prices. We are focused on execution of lease-up and value creation
within our existing portfolio, but will evaluate very select, strategic
acquisition opportunities, primarily in the Los Angeles and Seattle
markets. Our recent purchase of 11601 Wilshire Boulevard exemplifies
this approach.”
Financial Results
The Company reported net income attributable to common stockholders of
$0.8 million, or $0.01 per diluted share, for the three months ended
June 30, 2016, compared to net loss attributable to common stockholders
of $25.2 million, or $(0.28) per diluted share, for the three months
ended June 30, 2015.
Funds From Operations (FFO), excluding specified items, for the three
months ended June 30, 2016 totaled $62.9 million, or $0.43 per diluted
share, compared to FFO, excluding specified items, of $68.4 million, or
$0.47 per share, a year ago. Specified items for the second quarter of
2016 consisted of acquisition-related expense of $0.1 million, or $0.0
per diluted share. Specified items for the second quarter of 2015
consisted of acquisition-related expense of $37.5 million, or $0.26 per
diluted share.
FFO, including specified items, for the three months ended June 30, 2016
totaled $62.9 million, or $0.43 per diluted share, compared to $30.9
million, or $0.21 per diluted share, a year ago.
Combined Operating Results For The Three Months Ended June 30, 2016
Total revenue during the second quarter increased 1.6% to $154.3 million
from $151.8 million for the same quarter a year ago. Total operating
expenses decreased 0.9% to $134.5 million from $135.7 million for the
same quarter a year ago. As a result, income from operations increased
23.1% to $19.8 million from $16.1 million for the same quarter a year
ago. The primary reasons for the changes in total revenue and operating
expenses are discussed below in connection with the Company’s segment
operating results.
Interest expense during the second quarter increased 24.8% to $17.6
million from $14.1 million for the same quarter a year ago. The Company
had $2.3 billion and $2.1 billion of notes payable, excluding net
deferred financing costs and net loan premium, at June 30, 2016 and
June 30, 2015, respectively.
The Company had $0.4 million of unrealized loss on the ineffective
portion of derivatives, with nothing comparable for the same quarter a
year ago. The Company also had $0.1 million of acquisition-related
expense associated with the acquisition of 11601 Wilshire Boulevard
completed during the third quarter of 2016 compared to $37.5 million of
acquisition-related expense associated with the acquisition of the EOP
Northern California portfolio in the second quarter of 2015.
Segment Operating Results For The Three Months Ended June 30, 2016
Office Properties
Total revenue at the Company’s office properties increased 0.6% to
$144.4 million from $143.6 million for the same quarter a year ago. The
increase was primarily the result of a $3.5 million increase in tenant
recoveries to $21.3 million, partially offset by a decrease in rental
revenue of $2.0 million to $118.0 million and in parking and other
revenue of $0.7 million to $5.1 million. The increase in tenant
recoveries largely resulted from a corresponding increase in operating
expenses discussed below, partially offset by a loss of tenant
recoveries stemming from the sales of Bay Park Plaza in third quarter of
2015, Bayhill Office Center in the first quarter of 2016 and One Bay
Plaza in the second quarter of 2016. The decrease in rental, parking and
other revenue was also primarily due to these asset sales, though higher
rental revenue on improved rents and occupancy throughout the Company’s
in-service portfolio partially offset this decrease.
Office property operating expenses increased 5.1% to $49.1 million from
$46.7 million for the same quarter a year ago. The expense increase
primarily resulted from higher occupancy in our in-service office
portfolio, partially offset by the sales of Bay Park Plaza, Bayhill
Office Center and One Bay Plaza.
Net operating income with respect to the Company’s 30 same-store office
properties for the second quarter increased 6.6% on a GAAP basis and
15.5% on a cash basis.
At June 30, 2016, the Company’s stabilized and in-service office
portfolio was 96.5% and 91.1% leased, respectively. During the quarter,
the Company executed 70 new and renewal leases totaling 970,770 square
feet.
Media and Entertainment Properties
Total revenue at the Company’s media and entertainment properties
increased 20.1% to $9.9 million from $8.3 million for the same quarter a
year ago largely due to a $1.5 million increase in rental revenue to
$6.9 million. The increase in rental revenue stemmed from higher
occupancy at Sunset Gower and Sunset Bronson. In addition, stage and
office space at Sunset Bronson were taken off-line for improvements
during the three months ended June 30, 2015, and were fully occupied
over the three months ended June 30, 2016. Total media and entertainment
operating expenses increased 24.2% to $6.3 million from $5.1 million for
the same quarter a year ago, also largely due to higher occupancy at
Sunset Gower and Sunset Bronson.
Media and entertainment net operating income in the second quarter
increased by 13.6% on a GAAP basis and 26.2% on a cash basis.
As of June 30, 2016, the trailing 12-month occupancy for the Company’s
media and entertainment portfolio increased to 85.3% from 76.5% for the
period ended June 30, 2015.
Balance Sheet
At June 30, 2016, the Company had total assets of $6.3 billion,
including unrestricted cash and cash equivalents of $337.4 million. At
June 30, 2016, the Company had $400.0 million of total capacity under
its unsecured revolving credit facility, of which $250.0 million had
been drawn.
Major Leasing
Executed Significant Leases Throughout Portfolio
Qualcomm, a leading 3G and next-generation wireless technology company,
renewed its lease through July 2022 at Skyport Plaza office campus in
North San Jose, California. Qualcomm has maintained offices at the
property for nearly four years, and will continue to occupy a total of
365,502 square feet in two buildings.
The General Services Administration renewed its lease on behalf of the
U.S. Army Corps of Engineers (USACE) at 1455 Market Street in San
Francisco, California. USACE, a provider of public and military
engineering services, will continue to occupy 71,729 square feet through
February 2019.
RGN-National (Regus) Business Centers, which owns/operates flex office
space worldwide, renewed their lease for 44,957 square feet through
March 2022 at Gateway office campus in North San Jose, California.
BrightEdge Technologies, a leading SEO company and platform, executed a
lease for 36,542 square feet through June 2024 at 989 Hillsdale Avenue,
part of Metro Center office complex in Foster City, California.
NFL Enterprises, on behalf of NFL Media, executed a lease for another
30,300 square feet, backfilling the former SDI media space at 10950
Washington Boulevard in Culver City, California. NFL Media will now
occupy through June 2019 the entirety of 10950 Washington Boulevard, as
well as the adjacent 10900 Washington Boulevard, for a total of 167,605
square feet.
Cloud computing company Salesforce.com executed a lease for an
additional 23,683 square feet at Rincon Center in San Francisco,
California. The deal backfilled the entire space formerly occupied by
Intrax, and brings Salesforce.com’s total occupancy at Rincon Center to
261,250 square feet.
Dispositions
Sold Additional EOP Northern California Assets
On April 7, 2016, the Company sold Patrick Henry Drive, a
70,520-square-foot R&D office building located at 3055 Patrick Henry
Drive in Santa Clara, California for $19.0 million before certain
credits, prorations and closing costs. KT Properties Urban, Inc.
acquired the property, which was entirely vacant at time of sale, in an
all-cash, off-market transaction.
On June 1, 2016, the Company sold One Bay Plaza, a 195,739-square-foot
office tower located at 1350 Bayshore Highway in Burlingame, California
to a joint venture between Harvest Properties and New York Life Real
Estate Investors for $53.4 million before credits, prorations and
closing costs.
The Company sold both assets at premiums to their original purchase
prices when acquired as part of the EOP Northern California portfolio
acquisition on April 1, 2015.
Financings
Financings & Refinancings
On May 3, 2016, the Company drew all $175.0 million of its five-year and
$125.0 million of its seven-year unsecured term loan credit facilities
entered into in November of last year. The Company used loan proceeds to
repay floating rate indebtedness, including the $30.0 million loan
secured by 901 Market Street, $60.0 million outstanding balance under
its revolving credit facility, $110.0 million of the outstanding balance
under its loan secured by Sunset Gower/Sunset Bronson, and $100.0
million of its unhedged existing five-year term loan.
On June 6, 2016, the Company fully refinanced project-level financing
associated with Pinnacle II in Burbank, with a 10-year, $87.0 million
loan bearing interest of 4.30% per annum. The refinancing successfully
replaced the loan previously secured by Pinnacle II, which was bearing
interest of 6.31% per annum.
Repayment & Funding Of Select Debt Investments
On June 14, 2016, the Company was fully repaid on its $28.5 million
participation in a $120.0 million bridge loan originated by Canyon
Capital Realty Advisors for the acquisition and redevelopment of the
historic Broadway Trade Center in Los Angeles, California.
On June 16, 2016, the Company funded $28.4 million of a $140.0 million
first mortgage loan, originated by a limited liability company managed
by Mesa West Capital, to finance China-based technology company LeEco’s
acquisition of a 48.6-acre land site in Santa Clara, California. LeEco
plans to develop a three-million-square-foot global headquarters campus
at this location.
Equity Offering
Completed Common Stock Public Offering
On May 16, 2016, the Company completed a public offering of 10,600,000
shares of its common stock, consisting of 10,117,223 shares offered by
the Company and 482,777 shares offered by funds affiliated with Farallon
Capital Management, L.L.C. (collectively, the “Farallon Funds”). The
Company used the $294.2 million of net proceeds to acquire 10,000,000
common units of limited partnership interest in its operating
partnership, Hudson Pacific Properties, L.P. (the “Operating
Partnership”), from certain entities affiliated with The Blackstone
Group L.P., and 117,223 common units of limited partnership interest in
the Operating Partnership from the Farallon Funds. The Company did not
receive any proceeds from the sale of the shares of common stock in this
offering by the Farallon Funds.
Dividend
Paid Common Dividend
The Company’s Board of Directors declared a dividend on its common stock
of $0.20 per share for the second quarter of 2016. The dividends were
paid on June 30, 2016 to stockholders of record on June 20, 2016.
Activities Subsequent to June 30, 2016
Acquired 11601 Wilshire Boulevard
On July 1, 2016, the Company acquired 11601 Wilshire Boulevard, a
500,475-square-foot Class A office tower in West Los Angeles, from real
estate funds managed by Blackstone for $311.0 million before credits,
prorations and closing costs. The Company intends to lease-up, renovate
and improve operating efficiencies at the currently 82.7% occupied
property, which has served as its headquarters for the last six years.
Completed $200.0 Million Private Placement
On July 6, 2016, the Company completed a private placement of debt
yielding $200.0 million of gross proceeds. The Company applied net
proceeds from $150.0 million of 3.98% senior guaranteed notes due July
6, 2026 to fund the 11601 Wilshire Boulevard acquisition. The Company
expects to access the remaining $50.0 million, consisting of 3.66%
senior guaranteed notes due September 15, 2023, on or before September
15, 2016 to repay amounts outstanding under its unsecured revolving
credit facility or for general corporate purposes.
Completed Common Stock Public Offering
On July 21, 2016, the Company completed a public offering of 20,000,000
shares of its common stock, consisting of 19,195,373 shares offered by
the Company and 804,627 shares offered by funds affiliated with the
Farallon Funds. The Company used the $582.0 million of net proceeds to
acquire 19,000,000 common units of limited partnership interest in the
Operating Partnership, from certain entities affiliated with The
Blackstone Group L.P., and 195,373 common units of limited partnership
interest in the Operating Partnership from the Farallon Funds. The
Company did not receive any proceeds from the sale of the shares of
common stock in this offering by the Farallon Funds.
2016 Outlook
Guidance Increased
The Company is increasing its full-year 2016 FFO guidance from its
previously announced range of $1.68 to $1.76 per diluted share,
excluding specified items, to a revised range of $1.71 to $1.77 per
diluted share, excluding specified items. The guidance reflects the
Company’s FFO for the second quarter ended June 30, 2016 of $0.43 per
diluted share, excluding specified items, as well as the transactional
activity referenced in this press release and in earlier announcements,
including the sale of 12655 Jefferson Boulevard in the fourth quarter,
and the anticipated funding of $50.0 million of 3.66% senior guaranteed
notes on or before September 15, 2016 to repay amounts outstanding under
its unsecured revolving credit facility or for general corporate
purposes. This guidance also reflects the elimination of the ineffective
portion of the interest rate swaps relating to $650.0 million of its
five- and seven-year term loans due April of 2020 and 2022,
respectively, through an increase in the underlying fixed rate by a
weighted average of 12 basis points per annum. This guidance assumes
full-year 2016 weighted average fully diluted common stock/units of
146,415,000. The full-year 2016 FFO estimate reflects management’s view
of current and future market conditions, including assumptions with
respect to rental rates, occupancy levels and the earnings impact of
events referenced in this press release, but otherwise excludes any
impact from future unannounced or speculative acquisitions,
dispositions, debt financings or repayments, recapitalizations, capital
market activity or similar matters.
The Company does not provide a reconciliation for non-GAAP estimates on
a forward-looking basis, including the information under “2016 Outlook”
above, where it is unable to provide a meaningful or accurate
calculation or estimation of reconciling items and the information is
not available without unreasonable effort. This is due to the inherent
difficulty of forecasting the timing and/or amount of various items that
would impact net income attributable to common stockholders per diluted
share, the most directly comparable forward-looking GAAP financial
measure, including, for example, acquisition costs and other non-core
items that have not yet occurred, are out of the Company’s control
and/or cannot be reasonably predicted. For the same reasons, the Company
is unable to address the probable significance of the unavailable
information. Forward-looking non-GAAP financial measures provided
without the most directly comparable GAAP financial measures may vary
materially from the corresponding GAAP financial measures.
Supplemental Information
Supplemental financial information regarding the Company’s second
quarter 2016 results may be found in the Investor Relations section of
the Company’s Website at investors.hudsonpacificproperties.com.
This supplemental information provides additional detail on items such
as property occupancy, financial performance by property, and debt
maturity schedules.
Conference Call
The Company will hold a conference call to discuss second quarter 2016
financial results at 11:00 a.m. PT / 2:00 p.m. ET on August 4, 2016. To
participate in the call by telephone, please dial (877) 407-0784 five to
10 minutes prior to the start time to allow time for registration.
International callers should dial (201) 689-8560. The call will also be
broadcast live over the Internet and can be accessed via the Investor
Relations section of the Company’s Website at investors.hudsonpacificproperties.com,
where a replay of the call will be available for 90 days. A replay will
also be available beginning August 4, at 2:00 p.m. PT / 5:00 p.m. ET,
through August 11, at 8:59 p.m. PT / 11:59 p.m. ET, by dialing (877)
870-5176 and entering the passcode 13640344. International callers
should dial (858) 384-5517 and enter the same passcode.
Use of Non-GAAP Information
The Company calculates funds from operations before non-controlling
interest (FFO) in accordance with the standards established by the
National Association of Real Estate Investment Trusts (NAREIT). FFO
represents net income (loss), computed in accordance with accounting
principles generally accepted in the United States of America (GAAP),
excluding gains (or losses) from sales of depreciable operating
property, plus real estate depreciation and amortization (excluding
amortization of above/below market lease intangible assets and
liabilities and amortization of deferred financing costs and debt
discounts/premium) and after adjustments for unconsolidated partnerships
and joint ventures. The Company uses FFO as a supplemental performance
measure because, in excluding real estate depreciation and amortization
and gains and losses from property dispositions, it provides a
performance measure that, when compared year over year, captures trends
in occupancy rates, rental rates, and operating costs. The Company also
believes that, as a widely recognized measure of the performance of
REITs, FFO will be used by investors as a basis to compare its operating
performance with that of other REITs. However, because FFO excludes
depreciation and amortization and captures neither the changes in the
value of the Company’s properties that results from use or market
conditions nor the level of capital expenditures and leasing commissions
necessary to maintain the operating performance of its properties, all
of which have real economic effect and could materially impact the
Company’s results from operations, the utility of FFO as a measure of
the Company’s performance is limited. Other equity REITs may not
calculate FFO in accordance with the NAREIT definition and, accordingly,
the Company’s FFO may not be comparable to such other REITs’ FFO.
Accordingly, FFO should be considered only as a supplement to net income
as a measure of the Company’s performance. FFO should not be used as a
measure of the Company’s liquidity, nor is it indicative of funds
available to fund the Company’s cash needs, including the Company’s
ability to pay dividends. FFO should not be used as a supplement to or
substitute for cash flow from operating activities computed in
accordance with GAAP.
About Hudson Pacific Properties
Hudson Pacific Properties is a vertically integrated real estate company
focused on acquiring, repositioning, developing and operating
high-quality office and state-of-the-art media and entertainment
properties in select West Coast markets. Hudson Pacific invests
across the risk-return spectrum, favoring opportunities where it can
employ leasing, capital investment and management expertise to create
additional value. Founded in 2006 as Hudson Capital, the Company went
public in 2010, electing to be taxed as a real estate investment trust.
Through the years, Hudson Pacific has strategically assembled a
portfolio totaling over 17 million square feet, including land for
development, in high-growth, high-barrier-to-entry submarkets throughout
Northern and Southern California and the Pacific Northwest. The Company
is a leading provider of design-forward, next-generation workspaces for
a variety of tenants, with a focus on Fortune 500 and industry-leading
growth companies, many in the technology, media and entertainment
sectors. As a long-term owner, Hudson Pacific prioritizes tenant
satisfaction and retention, providing highly customized build-outs and
working proactively to accommodate tenants’ growth. Hudson Pacific
trades as a component of the Russell 2000® and the Russell 3000®
indices. For more information visit hudsonpacificproperties.com.
Forward-Looking Statements
This press release may contain forward-looking statements within the
meaning of the federal securities laws. Forward-looking statements
relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts. In some cases, you can
identify forward-looking statements by the use of forward-looking
terminology such as “may,” “will,” “should,” “expects,” “intends,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts,” or
“potential” or the negative of these words and phrases or similar words
or phrases that are predictions of or indicate future events, or trends
and that do not relate solely to historical matters. Forward-looking
statements involve known and unknown risks, uncertainties, assumptions
and contingencies, many of which are beyond the Company’s control that
may cause actual results to differ significantly from those expressed in
any forward-looking statement. All forward-looking statements reflect
the Company’s good faith beliefs, assumptions and expectations, but they
are not guarantees of future performance. Furthermore, the Company
disclaims any obligation to publicly update or revise any
forward-looking statement to reflect changes in underlying assumptions
or factors, new information, data or methods, future events or other
changes. For a further discussion of these and other factors that could
cause the Company’s future results to differ materially from any
forward-looking statements, see the section entitled “Risk Factors” in
the Company’s Annual Report on Form 10-K for the year ended December 31,
2015 filed with the Securities and Exchange Commission, or SEC, on
February 26, 2016, and other risks described in documents subsequently
filed by the Company from time to time with the SEC.
|
|
|
Hudson Pacific Properties, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
|
|
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
REAL ESTATE ASSETS
|
|
|
|
|
|
Land
|
|
$
|
1,252,484
|
|
|
$
|
1,252,484
|
|
|
Building and improvements
|
|
3,937,522
|
|
|
3,887,683
|
|
|
Tenant improvements
|
|
305,947
|
|
|
290,122
|
|
|
Furniture and fixtures
|
|
4,082
|
|
|
9,586
|
|
|
Property under development
|
|
247,682
|
|
|
218,438
|
|
|
Total real estate held for investment
|
|
5,747,717
|
|
|
5,658,313
|
|
|
Accumulated depreciation and amortization
|
|
(340,262
|
)
|
|
(267,855
|
)
|
|
Investment in real estate, net
|
|
5,407,455
|
|
|
5,390,458
|
|
|
Cash and cash equivalents
|
|
337,400
|
|
|
53,551
|
|
|
Restricted cash
|
|
19,166
|
|
|
18,010
|
|
|
Accounts receivable, net
|
|
10,550
|
|
|
21,048
|
|
|
Notes receivable, net
|
|
—
|
|
|
28,684
|
|
|
Straight-line rent receivables, net
|
|
70,529
|
|
|
59,408
|
|
|
Deferred leasing costs and lease intangible assets, net
|
|
293,191
|
|
|
314,483
|
|
|
Derivative assets
|
|
—
|
|
|
2,061
|
|
|
Goodwill
|
|
8,754
|
|
|
8,754
|
|
|
Prepaid expenses and other assets, net
|
|
49,209
|
|
|
27,278
|
|
|
Investment in unconsolidated entity
|
|
28,237
|
|
|
—
|
|
|
Assets associated with real estate held for sale
|
|
$
|
52,432
|
|
|
$
|
330,300
|
|
|
TOTAL ASSETS
|
|
$
|
6,276,923
|
|
|
$
|
6,254,035
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
Notes payable, net
|
|
$
|
2,338,882
|
|
|
$
|
2,260,716
|
|
|
Accounts payable and accrued liabilities
|
|
104,156
|
|
|
82,405
|
|
|
Lease intangible liabilities, net
|
|
77,841
|
|
|
94,446
|
|
|
Security deposits
|
|
24,148
|
|
|
20,342
|
|
|
Prepaid rent
|
|
30,352
|
|
|
38,111
|
|
|
Derivative liabilities
|
|
26,478
|
|
|
2,010
|
|
|
Liabilities associated with real estate held for sale
|
|
5,267
|
|
|
16,791
|
|
|
TOTAL LIABILITIES
|
|
2,607,124
|
|
|
2,514,821
|
|
|
6.25% series A cumulative redeemable preferred units of the
operating partnership
|
|
10,177
|
|
|
10,177
|
|
|
EQUITY
|
|
|
|
|
|
Hudson Pacific Properties, Inc. stockholders’ equity:
|
|
|
|
|
|
Common stock, $0.01 par value, 490,000,000 authorized, 99,385,084
shares and 89,153,780 shares outstanding at June 30, 2016 and
December 31, 2015, respectively
|
|
993
|
|
|
891
|
|
|
Additional paid-in capital
|
|
1,998,361
|
|
|
1,710,979
|
|
|
Accumulated other comprehensive loss
|
|
(16,079
|
)
|
|
(1,081
|
)
|
|
Accumulated deficit
|
|
(41,470
|
)
|
|
(44,955
|
)
|
|
Total Hudson Pacific Properties, Inc. stockholders’ equity
|
|
1,941,805
|
|
|
1,665,834
|
|
|
Non-controlling interest—members in consolidated entities
|
|
266,406
|
|
|
262,625
|
|
|
Non-controlling interest—units in the operating partnership
|
|
1,451,411
|
|
|
1,800,578
|
|
|
TOTAL EQUITY
|
|
3,659,622
|
|
|
3,729,037
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
$
|
6,276,923
|
|
|
$
|
6,254,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson Pacific Properties, Inc.
Combined Statements of Operations
(Unaudited, in thousands, except share data)
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Office
|
|
|
|
|
|
|
|
|
|
Rental
|
|
$
|
118,047
|
|
|
$
|
120,052
|
|
|
$
|
234,274
|
|
|
$
|
161,628
|
|
|
Tenant recoveries
|
|
21,303
|
|
|
17,790
|
|
|
41,836
|
|
|
23,854
|
|
|
Parking and other
|
|
5,050
|
|
|
5,716
|
|
|
10,582
|
|
|
11,011
|
|
|
Total office revenues
|
|
144,400
|
|
|
143,558
|
|
|
286,692
|
|
|
196,493
|
|
|
Media & Entertainment
|
|
|
|
|
|
|
|
|
|
Rental
|
|
6,857
|
|
|
5,394
|
|
|
12,885
|
|
|
10,861
|
|
|
Tenant recoveries
|
|
213
|
|
|
253
|
|
|
412
|
|
|
493
|
|
|
Other property-related revenue
|
|
2,810
|
|
|
2,556
|
|
|
7,779
|
|
|
6,665
|
|
|
Other
|
|
41
|
|
|
58
|
|
|
90
|
|
|
131
|
|
|
Total Media & Entertainment revenues
|
|
9,921
|
|
|
8,261
|
|
|
21,166
|
|
|
18,150
|
|
|
Total revenues
|
|
154,321
|
|
|
151,819
|
|
|
307,858
|
|
|
214,643
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
Office operating expenses
|
|
49,091
|
|
|
46,691
|
|
|
96,794
|
|
|
63,826
|
|
|
Media & Entertainment operating expenses
|
|
6,295
|
|
|
5,069
|
|
|
12,247
|
|
|
11,074
|
|
|
General and administrative
|
|
13,016
|
|
|
10,373
|
|
|
25,519
|
|
|
19,573
|
|
|
Depreciation and amortization
|
|
66,108
|
|
|
73,592
|
|
|
134,476
|
|
|
90,750
|
|
|
Total operating expenses
|
|
134,510
|
|
|
135,725
|
|
|
269,036
|
|
|
185,223
|
|
|
Income from operations
|
|
19,811
|
|
|
16,094
|
|
|
38,822
|
|
|
29,420
|
|
|
Other expense (income)
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
17,614
|
|
|
14,113
|
|
|
34,865
|
|
|
19,606
|
|
|
Interest income
|
|
(73
|
)
|
|
(48
|
)
|
|
(86
|
)
|
|
(101
|
)
|
|
Unrealized loss on ineffective portion of derivative instruments
|
|
384
|
|
|
—
|
|
|
2,509
|
|
|
—
|
|
|
Acquisition-related expenses
|
|
61
|
|
|
37,481
|
|
|
61
|
|
|
43,525
|
|
|
Other (income) expense
|
|
(47
|
)
|
|
40
|
|
|
(23
|
)
|
|
(1
|
)
|
|
Total other expenses
|
|
17,939
|
|
|
51,586
|
|
|
37,326
|
|
|
63,029
|
|
|
Income (loss) before gains (loss) on sale of real estate
|
|
1,872
|
|
|
(35,492
|
)
|
|
1,496
|
|
|
(33,609
|
)
|
|
Gains (loss) on sale of real estate
|
|
2,163
|
|
|
(591
|
)
|
|
8,515
|
|
|
22,100
|
|
|
Net income (loss)
|
|
4,035
|
|
|
(36,083
|
)
|
|
$
|
10,011
|
|
|
$
|
(11,509
|
)
|
|
Net income attributable to preferred stock and units
|
|
(159
|
)
|
|
(3,195
|
)
|
|
(318
|
)
|
|
(6,390
|
)
|
|
Net income attributable to participating securities
|
|
(196
|
)
|
|
(80
|
)
|
|
(393
|
)
|
|
(150
|
)
|
|
Net income attributable to non-controlling interest in consolidated
real estate entities
|
|
(2,396
|
)
|
|
(1,893
|
)
|
|
(4,341
|
)
|
|
(3,395
|
)
|
|
Net (income) loss attributable to common units in the operating
partnership
|
|
(445
|
)
|
|
16,008
|
|
|
(1,867
|
)
|
|
15,412
|
|
|
Net income (loss) attributable to Hudson Pacific Properties, Inc.
common stockholders
|
|
$
|
839
|
|
|
$
|
(25,243
|
)
|
|
$
|
3,092
|
|
|
$
|
(6,032
|
)
|
|
Basic and diluted per share amounts:
|
|
|
|
|
|
|
|
|
|
Net income attributable to common stockholders’ per share—basic
|
|
$
|
0.01
|
|
|
$
|
(0.28
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.07
|
)
|
|
Net income attributable to common stockholders’ per share—diluted
|
|
$
|
0.01
|
|
|
$
|
(0.28
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.07
|
)
|
|
Weighted average shares of common stock outstanding—basic
|
|
95,145,496
|
|
|
88,894,258
|
|
|
92,168,432
|
|
|
82,906,087
|
|
|
Weighted average shares of common stock outstanding—diluted
|
|
95,995,496
|
|
|
88,894,258
|
|
|
93,000,432
|
|
|
82,906,087
|
|
|
Dividends declared per share of common stock
|
|
$
|
0.200
|
|
|
$
|
0.125
|
|
|
$
|
0.400
|
|
|
$
|
0.250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hudson Pacific Properties, Inc.
Funds From Operations
(Unaudited, in thousands, except per share data)
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Reconciliation of net income to Funds From Operations (“FFO”):
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
4,035
|
|
|
$
|
(36,083
|
)
|
|
$
|
10,011
|
|
|
$
|
(11,509
|
)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization of real estate assets
|
|
65,655
|
|
|
73,293
|
|
|
133,560
|
|
|
90,366
|
|
|
(Gains) loss on sale of real estate
|
|
(2,163
|
)
|
|
591
|
|
|
(8,515
|
)
|
|
(22,100
|
)
|
|
FFO attributable to non-controlling interests
|
|
(4,510
|
)
|
|
(3,696
|
)
|
|
(8,672
|
)
|
|
(7,008
|
)
|
|
Net income attributable to preferred stock and units
|
|
(159
|
)
|
|
(3,195
|
)
|
|
(318
|
)
|
|
(6,390
|
)
|
|
FFO to common stockholders and unitholders
|
|
$
|
62,858
|
|
|
$
|
30,910
|
|
|
$
|
126,066
|
|
|
$
|
43,359
|
|
|
Specified items impacting FFO:
|
|
|
|
|
|
|
|
|
|
Acquisition-related expenses
|
|
$
|
61
|
|
|
$
|
37,481
|
|
|
$
|
61
|
|
|
$
|
43,525
|
|
|
FFO (excluding specified items) to common stockholders and
unitholders
|
|
$
|
62,919
|
|
|
$
|
68,391
|
|
|
$
|
126,127
|
|
|
$
|
86,884
|
|
|
Weighted average common stock/units outstanding—diluted
|
|
146,399
|
|
|
145,849
|
|
|
146,350
|
|
|
113,162
|
|
|
FFO per common stock/unit—diluted
|
|
$
|
0.43
|
|
|
$
|
0.21
|
|
|
$
|
0.86
|
|
|
$
|
0.38
|
|
|
FFO (excluding specified items) per common stock/unit—diluted
|
|
$
|
0.43
|
|
|
$
|
0.47
|
|
|
$
|
0.86
|
|
|
$
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160804005464/en/
Hudson Pacific Properties, Inc.
Laura Campbell, 310-445-5700
Vice
President, Head of Investor Relations
lcampbell@hudsonppi.com
or
Blue
Marlin Partners
Greg Berardi, 415-239-7826
greg@bluemarlinpartners.com
Source: Hudson Pacific Properties, Inc.