Funds from operations (FFO) for the third quarter 2002 totaled $362.3 million, or $.77 per fully diluted share, as compared to FFO for the same period in 2001 of $379.7 million, or $.81 per fully diluted share.
Fully diluted earnings per share (EPS) for the third quarter 2002 were $.40, compared to EPS of $.49 for the third quarter of 2001. The weighted average number of basic shares and units outstanding totaled 468,263,813 in the third quarter, and totaled 469,764,728 on a fully diluted basis.
Total revenues in the third quarter 2002 were $881.5 million, as compared to $883.7 million in the third quarter of 2001. Lease termination fees, including those recognized as income from joint ventures, totaled $30.8 million during the third quarter 2002 compared to $7.5 million during the third quarter of 2001.
Same-store net operating income for the third quarter 2002 decreased 5.4% on a GAAP basis and 4.6% on a cash basis compared to the third quarter 2001. Occupancy on this same-store portfolio, comprising 731 properties acquired on or prior to July 2, 2001, decreased from 94.9% at the beginning of this period to 89.7% at September 30, 2002. This represents the first quarter where the former Spieker PropertiesÂ' portfolio is included in same-store results.
Occupancy in EOPÂ's office portfolio decreased to 89.2% at September 30, 2002, from 90.0% at June 30, 2002. This decrease in occupancy was due to early lease terminations, which totaled approximately 1.8 million square feet during the third quarter. Occupancy in the industrial portfolio decreased to 88.1% at September 30, 2002, from 91.3% at June 30, 2002. Occupancy for the office portfolio at the end of the third quarter 2001 was 93.7%, and occupancy for the industrial portfolio at that time was 97.2%.
Leasing activity for the office portfolio during the third quarter 2002 totaled approximately 5.6 million square feet. The weighted average gross rental rates on leasing activity during the quarter are summarized as follows:
Property operating margins were 67.3% in the third quarter 2002, as compared to 68.5% for the third quarter 2001.
Year-to-Date Results:
For the nine months ended September 30, 2002, FFO totaled $1,139.3 million on revenues of $2,640.1 million compared with FFO of $925.0 million on revenues of $2,208.0 million for the same period in 2001. FFO per share on a fully diluted basis totaled $2.42 for this nine-month period in 2002, a 2.5% increase over the $2.36 per fully diluted share for the same period in 2001. EPS for the first nine months of 2002 totaled $1.28 per fully diluted share compared to $1.29 per fully diluted share in the first nine months of 2001.
Lease termination fees, including those recognized as income from joint ventures, totaled $107.2 million in the nine months ended September 30, 2002, compared to $16.8 million in the nine months ended September 30, 2001. Included in lease termination fees during 2002 was a $40 million lease termination received in connection with a previously proposed office development. Total lease termination fees in 2002 are at levels significantly above the companyÂ's historical experience.
Same-store net operating income for the nine months ended September 30, 2002, decreased 3.3% on a GAAP basis and 2.2% on a cash basis, compared to the nine months ended September 30, 2001. Occupancy on this same-store portfolio, comprising 380 buildings acquired on or prior to January 1, 2001, declined to 90.5% at September 30, 2002, as compared to 94.7% at January 1, 2001.
Year-to-date, total leasing activity for the office portfolio was approximately 15.7 million square feet. The weighted average gross rental rates on leasing activity during the first nine months of 2002 are summarized as follows:
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(source: Equity Office)
