Hudson Pacific Properties, Inc. (the “Company” or “Hudson Pacific”)
(NYSE: HPP) today announced financial results for the fourth quarter
ended December 31, 2015.
Fourth Quarter Highlights
-
FFO (excluding specified items) of $64.8 million, or $0.44 per diluted
share, compared to $22.2 million, or $0.32 per share, a year ago;
-
Completed new and renewal leases totaling 400,441 square feet at cash
and GAAP rent spreads of 22.7% and 42.0%, respectively;
-
Improved in-service office portfolio leased rate to 90.1% at
December 31, 2015, up from 89.5% as of September 30, 2015;
-
Completed a private placement for $425.0 million of senior guaranteed
notes, fully repaying the Company’s two-year floating rate facility
with long-term, fixed rate financing;
-
Closed on a new $300.0 million term loan credit facility;
-
Declared and paid a quarterly dividend of $0.20 per common share, a
60.0% increase from the previous annualized dividend level; and
-
Redeemed all issued and outstanding shares of its 8.375% Series B
Cumulative Redeemable Preferred Stock.
“We had a strong fourth quarter, with solid execution on all fronts,
particularly in terms of leasing, where activity across our portfolio
has only accelerated during the first few months of 2016,” said Victor
Coleman, Hudson Pacific Properties’ Chairman and CEO. “In the fourth
quarter, we executed over 400,000 square feet of new and renewal leases
at cash rent spreads in excess of 22.0%, which in turn, addressed our
largest 2016 expiration, and effectively stabilized Pinnacle I.”
Coleman added, “Year-to-date, we’ve over 860,000 square feet executed
and in leases, and another 745,000 square feet in LOIs, including more
than 365,000 square feet relating to 2017 expirations. We’re making
significant progress with regard to leasing at our development and
redevelopment projects, and ICON is now 100.0% pre-leased as we recently
signed another lease with Netflix for the tower’s remaining 123,000
square feet. We’ve seen no drop-off in leasing activity, and
fundamentals across our core markets remain strong. As we continue to
evaluate potential dispositions, our recent sale of Bayhill Office
Center to YouTube at a premium to our purchase price allocation
underscores there’s still robust demand from sophisticated tech
companies for high-quality office space in A+ locations.”
Financial Results
Funds From Operations (FFO) (excluding specified items) for the three
months ended December 31, 2015 totaled $64.8 million, or $0.44 per
diluted share, compared to $22.2 million, or $0.32 per share, a year
ago. The specified items for the fourth quarter of 2015 consisted of
acquisition-related expense savings of $0.1 million, or $0.00 per
diluted share. The specified items for the fourth quarter of 2014
consisted of expenses associated with the acquisition of the Equity
Office Properties’ San Francisco Peninsula and Silicon Valley portfolio
(the “EOP Northern California Portfolio”) of $4.3 million, or $0.06 per
diluted share, and costs associated with a one-year consulting
arrangement with a former executive of $1.3 million, or $0.02 per
diluted share. FFO, including the specified items, totaled $64.9
million, or $0.44 per diluted share, for the three months ended
December 31, 2015, compared to $16.6 million, or $0.24 per share, a year
ago.
The Company reported a net loss attributable to common stockholders of
$6.5 million, or $(0.07) per diluted share, for the three months ended
December 31, 2015, compared to a net loss attributable to common
stockholders of $2.3 million, or $(0.03) per diluted share, for the
three months ended December 31, 2014.
Combined Operating Results For The Three Months Ended December 31,
2015
Total revenue from continuing operations during the quarter increased
124.8% to $154.7 million from $68.8 million for the same quarter a year
ago. Total operating expenses from continuing operations increased
146.5% to $140.8 million from $57.1 million for the same quarter a year
ago. As a result, income from operations increased 18.6% to $13.8
million for the fourth quarter of 2015, compared to income from
operations of $11.6 million for the same quarter a year ago. The primary
reasons for the increases in total revenue and total operating expenses
are discussed below in connection with the Company’s segment operating
results.
Interest expense during the fourth quarter of 2015 increased 158.8% to
$16.6 million, compared to interest expense of $6.4 million for the same
quarter a year ago. At December 31, 2015, the Company had $2.3 billion
of notes payable (excluding unamortized premium and deferred financing
costs), compared to $957.5 million (including held for sale mortgage
loans and excluding unamortized premium and deferred financing costs) at
December 31, 2014.
Segment Operating Results For The Three Months Ended December 31, 2015
Office Properties
Total revenue from continuing operations at the Company’s office
properties increased 145.5% to $143.9 million from $58.6 million for the
same quarter a year ago. The increase was primarily due to a $76.3
million increase in rental revenue to $118.2 million and an $11.5
million increase in tenant recoveries to $22.3 million, largely
resulting from the EOP Northern California Portfolio acquisition, though
revenue associated with leases at Element LA and 3401 Exposition
Boulevard also contributed.
Office property operating expenses from continuing operations increased
148.5% to $50.8 million from $20.4 million for the same quarter a year
ago. The increase was primarily the result of operating expenses
associated with the EOP Northern California Portfolio acquisition.
As a result, office property net operating income in the fourth quarter
increased by 143.9% on a GAAP basis and by 146.2% on a cash basis.
At December 31, 2015, the Company’s stabilized and in-service office
portfolio was 95.3% and 90.1% leased, respectively. During the quarter,
the Company executed 60 new and renewal leases totaling 400,441 square
feet.
Media and Entertainment Properties
Total revenue at the Company’s media and entertainment properties
increased 5.8% to $10.8 million from $10.2 million for the same quarter
a year ago, primarily due to a $0.9 million increase in rental revenue
to $6.1 million, partially offset by a decrease in other
property-related revenue by $0.4 million to $4.3 million. The increase
in rental revenue stemmed from improved stage and production office
occupancy at both properties, while the decrease in other
property-related revenue primarily resulted from lower lighting and grip
revenue at Sunset Bronson due to a fourth quarter production hiatus of
certain stage users.
Total media and entertainment operating expenses decreased 13.6% to $6.4
million from $7.4 million for the same quarter a year ago, largely due
to administrative expense savings associated with development overhead
allocations, and lower equipment rental costs stemming from the
production hiatus of certain stage users at Sunset Bronson.
As a result, media and entertainment net operating income in the fourth
quarter increased by 57.2% on a GAAP basis and by 42.0% on a cash basis.
The Company historically based occupancy trends for Sunset Gower and
Sunset Bronson on estimated gross square footage as determined at the
time of their respective acquisitions in 2007 and 2008. The Company has
since reconfigured or adapted certain spaces for improved utilization
and, during the fourth quarter, completed a full examination of space
utilization at both media and entertainment properties. As a result, the
Company adjusted current and historic occupancy trends for Sunset Gower
and Sunset Bronson to include space utilization for production support
and building management, which aligns more closely with customary office
property methodologies. The Company also eliminated from certain
structural vacancy (i.e. electrical plant, utility areas and
covered pathways) historically included within the gross square footage,
but not available for tenancy. The revised methodology more accurately
reflects space utilization at Sunset Gower and Sunset Bronson, and
commencing in the current quarter, the Company will report occupancy
trends for its media and entertainment properties accordingly. The
Company has likewise recalculated and will report historic occupancies
based on this methodology to facilitate comparisons to prior periods.
As of December 31, 2015, the trailing 12-month occupancy for the
Company’s media and entertainment properties increased to 78.5% from
76.4% for the trailing 12-month period ended December 31, 2014. By way
of comparison, under the prior methodology, reported trailing 12-month
occupancy as of the fourth quarter ending December 31, 2014 was 71.6%.
Combined Operating Results For The Twelve Months Ended December 31,
2015
For the year ended December 31, 2015, total revenue from continuing
operations was $520.9 million, a 105.5% increase from $253.4 million for
the same period a year ago. Total operating expenses from continuing
operations were $473.5 million, compared to $204.7 million for the same
period a year ago. As a result, income from operations decreased 2.6% to
$47.4 million for the year ended December 31, 2015, compared to $48.7
million for the same period a year ago. Revenues for the year ended
December 31, 2014 include an early lease termination payment from Fox
Interactive Media, Inc. of $1.6 million (after the write-off of non-cash
items) relating to 625 Second Street with no comparable activity for the
year ended December 31, 2015. Operating expenses for the year ended
December 31, 2014 include a one-time supplemental net property tax
expense of $0.8 million largely resulting from reassessment of the
Company’s San Francisco portfolio with no comparable activity for the
year ended December 31, 2015. Operating expenses for the year ended
December 31, 2014 also include costs of $4.1 million associated with a
one-year consulting arrangement with a former executive with no
comparable activity for the year ended December 31, 2015.
Interest expense for the year ended December 31, 2015 increased 95.4% to
$50.7 million, compared to $25.9 million for the same period a year ago.
At December 31, 2015, the Company had $2.3 billion of notes payable,
compared to $957.5 million at December 31, 2014. The Company had $43.3
million of acquisition-related expense for the year ended December 31,
2015, compared to $4.6 million for the same period a year ago. The
Company had $30.5 million of gain on sale associated with the
disposition of First Financial and Bay Park Plaza, compared to $5.5
million of gain on sale associated with disposition of Tierrasanta for
the year ended December 31, 2014.
Balance Sheet
At December 31, 2015, the Company had total assets of $6.3 billion,
including unrestricted cash and cash equivalents of $53.6 million. At
December 31, 2015, the Company had $400.0 million of total capacity
under its unsecured revolving credit facility, of which $230.0 million
had been drawn. Subsequent to the quarter, the Company repaid $210.0
million of unsecured revolving credit facility from proceeds generated
by the sale of Bayhill Office Center.
Major Leasing
Executed Significant Leases at Pinnacle I, 1455 Market Street & 12655
Jefferson Boulevard
The Company executed 106,802 square feet of new and renewal leases at
Pinnacle I in Burbank, California, resulting in the property being 92.9%
leased at the end of the fourth quarter. Consequently, the Company
addressed the largest 2016 lease expiration within its portfolio, Clear
Channel’s lease for 109,323 square feet, by executing a
75,214-square-foot renewal lease with iHeart Radio and backfilling the
remaining 31,588 square feet with Fox Twentieth Television, Inc.
At 1455 Market Street in San Francisco, California, the Company executed
a seven-year, 24,438-square-foot lease with leading music and video
entertainment platform Vevo to backfill 50.0% of Rocketfuel’s recently
vacated space.
Finally, the Company pre-leased 17,867 square feet to multinational
media and digital marketing communications company Dentsu Aegis Network
at its 12655 Jefferson Boulevard redevelopment in Playa Vista,
California.
Financings
Completed $425 Million Private Placement
On December 16, 2015, the Company’s operating partnership completed a
private placement for $425.0 million of guaranteed senior notes,
consisting of $110.0 million of 4.34% Series A guaranteed senior notes
due January 2, 2023, $259.0 million of 4.69% Series B guaranteed senior
notes due December 16, 2025, and $56.0 million of 4.79% Series C
guaranteed senior notes due December 16, 2027. Collectively, the notes
pay interest semiannually until maturity, and are fully and
unconditionally guaranteed by the Company and, in certain limited
circumstances, subsidiaries of the Company. The operating partnership
used proceeds from the private placement to repay the remaining $375.0
million balance under its two-year term facility, with the balance of
proceeds going to repay indebtedness under its unsecured revolving
credit facility and to fund general corporate purposes.
Completed $300 Million New Term Loan
On November 17, 2015, the Company’s operating partnership entered into a
new term loan credit agreement, which provides for a $175.0 million
unsecured five-year term loan credit facility and a $125.0 million
unsecured seven-year term loan credit facility. These facilities remain
fully undrawn as of the date of this press release, and proceeds remain
available to fund investment activities, repay indebtedness, or for
general corporate purposes. The Company has not determined the ultimate
use of these funds, but has provided guidance regarding potential use as
part of its full-year 2016 FFO estimate below.
Dividend
Common Dividend Paid & Increased by 60%
The Company’s Board of Directors declared a dividend on its common stock
of $0.20 per share for the fourth quarter of 2015, equivalent to an
annual rate of $0.80 per share and a 60.0% increase from the previous
annualized dividend level of $0.50 per share. The dividend was paid on
December 30, 2015 to stockholders of record on December 20, 2015.
Preferred Stock Redemption
Redeemed All Issued & Outstanding Preferred Stock
On December 10, 2015, the Company redeemed all 5,800,000 issued and
outstanding shares of its 8.375% Series B Cumulative Redeemable
Preferred Stock. The redemption price was $25.00 per share, plus all
accrued and unpaid dividends to, but not including, the redemption date
in an amount equal to $0.40712 per share, for a total payment of
$25.40712 per share, paid in cash, without interest on the redemption
date.
Activities Subsequent to December 31, 2015
Sold Bayhill Office Center To YouTube
On January 15, 2015, the Company sold Bayhill Office Center in San
Bruno, California to online video distribution company YouTube for
$215.0 million before certain credits, prorations and closing costs. The
Company acquired the 554,328-square-foot Class A office campus as part
of the EOP Northern California Portfolio purchased in April 2015 from
Blackstone, but viewed the property as non-core to its portfolio
primarily due to location. The sale was an all-cash, off-market
transaction, and YouTube purchased the property at a premium to the
Company’s original purchase price allocation.
Completed Additional Major Leasing
Netflix, the world’s leading Internet television network, executed its
ROFR to lease the remaining five floors, or another 123,221 square feet,
at the Company’s ICON development in Hollywood, California. As a result,
the 323,000-square-foot ICON office tower is now 100.0% pre-leased to
Netflix with tenant build-out expected to commence in third quarter 2016.
In addition, the Company executed a 48,876-square-foot lease with
multinational mobile ride hail company Uber Technologies, Inc. to
backfill the remaining 24,438 square feet of Rocketfuel’s recently
vacated space, as well as another 25,420 square feet formerly occupied
by Bank of America.
Obtained Board Approval For Share Repurchase Program
Effective January 20, 2016, the Company’s Board of Directors authorized
a share repurchase program to buy up to $100.0 million of the Company’s
outstanding common stock. The program may be implemented at the
Company’s discretion at any time for up to one year from the date of
approval. Repurchases, if and when made, would be compliant with the
SEC’s Rule 10b-18, and subject to market conditions, applicable legal
requirements and other factors. The repurchase program serves as another
capital allocation tool for the Company, a means to return capital to
shareholders from asset dispositions, which will be weighed against
other potential investment opportunities.
2016 Outlook
The Company is providing full-year 2016 FFO guidance in the range of
$1.65 to $1.75 per diluted share (excluding specified items). This
guidance reflects the acquisitions, dispositions, financings and leasing
activity referenced in this press release. As is always the case, the
Company’s guidance does not reflect or attempt to anticipate any impact
to FFO from speculative acquisitions or dispositions. This guidance
assumes full-year 2016 weighted average fully diluted common stock/units
of 146,296,300. This guidance also assumes that the $175.0 million
five-year and $125.0 million seven-year unsecured term loans described
in this press release are fully drawn as of April, with the proceeds
used toward the repayment of floating rate indebtedness, including the
$30.0 million loan secured by 901 Market Street, the $20.0 million
outstanding balance under the revolving credit facility, and the
remaining $250.0 million applied to repay a corresponding amount of the
unhedged portion of the existing five-year term loan. This guidance
further assumes that the interest rate for the undrawn $125.0 million
seven-year unsecured term loan is fixed through an interest rate swap
upon funding at a rate consistent with the existing seven-year term
financing (i.e. 2.66% to 3.56% per annum, before amortization of
deferred financing costs). 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.
Supplemental Information
Supplemental financial information regarding the Company’s fourth
quarter and full year 2015 results may be found in the Financial Reports
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 fourth quarter 2015
financial results at 1:30 p.m. PT / 4:30 p.m. ET on February 25, 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 Hudson Pacific’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 February 25, 2016, at 4:30 p.m. PT / 7:30
p.m. ET, through March 3, 2016, at 8:59 p.m. PT / 11:59 p.m. ET by
dialing (877) 870-5176 and entering the passcode 13629054. 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, 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 approximately 16.8 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, of 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,
2014 filed with the Securities and Exchange Commission, or SEC, on
March 2, 2015, as amended, and other risks described in documents
subsequently filed by the Company from time to time with the SEC.
(FINANCIAL TABLES FOLLOW)
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Hudson Pacific Properties, Inc.
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Consolidated Balance Sheet
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(In thousands, except share data)
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|
|
|
December 31,
|
|
December 31,
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|
|
|
|
2015
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|
|
2014
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ASSETS
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(Unaudited)
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|
Audited
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REAL ESTATE ASSETS
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|
|
|
|
|
Land
|
|
$
|
1,283,751
|
|
|
$
|
620,805
|
|
|
Building and improvements
|
|
|
3,964,630
|
|
|
|
1,284,602
|
|
|
Tenant improvements
|
|
|
293,131
|
|
|
|
116,317
|
|
|
Furniture and fixtures
|
|
|
9,586
|
|
|
|
13,721
|
|
|
Property under development
|
|
|
218,438
|
|
|
|
135,850
|
|
|
Total real estate held for investment
|
|
|
5,769,536
|
|
|
|
2,171,295
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|
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Accumulated depreciation and amortization
|
|
|
(269,074
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)
|
|
|
(134,657
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)
|
|
Investment in real estate, net
|
|
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5,500,462
|
|
|
|
2,036,638
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|
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Cash and cash equivalents
|
|
|
53,551
|
|
|
|
17,753
|
|
|
Restricted cash
|
|
|
18,010
|
|
|
|
14,244
|
|
|
Accounts receivable, net
|
|
|
21,159
|
|
|
|
16,247
|
|
|
Notes receivable
|
|
|
28,684
|
|
|
|
28,268
|
|
|
Straight-line rent receivables
|
|
|
59,636
|
|
|
|
33,006
|
|
|
Deferred leasing costs and lease intangible assets, net
|
|
|
318,031
|
|
|
|
102,023
|
|
|
Deferred finance costs, net
|
|
|
—
|
|
|
|
—
|
|
|
Interest rate contracts
|
|
|
2,061
|
|
|
|
3
|
|
|
Goodwill
|
|
|
8,754
|
|
|
|
8,754
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|
|
Prepaid expenses and other assets
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|
|
27,292
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|
|
|
10,039
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|
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Assets associated with real estate held for sale
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|
|
216,395
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|
|
|
68,165
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|
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TOTAL ASSETS
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$
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6,254,035
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|
|
$
|
2,335,140
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|
|
|
|
|
|
|
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LIABILITIES AND EQUITY
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|
|
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Notes payable, net
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$
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2,260,716
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|
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$
|
912,683
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|
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Accounts payable and accrued liabilities
|
|
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84,048
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|
|
|
36,844
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|
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Lease intangible liabilities, net
|
|
|
95,208
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|
|
|
40,969
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|
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Security deposits
|
|
|
21,302
|
|
|
|
6,257
|
|
|
Prepaid rent
|
|
|
38,245
|
|
|
|
8,600
|
|
|
Interest rate contracts
|
|
|
2,010
|
|
|
|
1,750
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|
|
Liabilities associated with real estate held for sale
|
|
|
13,292
|
|
|
|
42,845
|
|
|
TOTAL LIABILITIES
|
|
|
2,514,821
|
|
|
|
1,049,948
|
|
|
|
|
|
|
|
|
6.25% series A cumulative redeemable preferred units of the
Operating Partnership
|
|
|
10,177
|
|
|
|
10,177
|
|
|
|
|
|
|
|
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EQUITY
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|
|
|
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Hudson Pacific Properties, Inc. stockholders’ equity:
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|
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Preferred stock, $0.01 par value, 10,000,000 authorized; 8.375%
series B cumulative redeemable preferred stock, $25.00 per unit
liquidation preference, no outstanding shares at December 31, 2015,
5,800,000 shares outstanding at December 31, 2014.
|
|
|
—
|
|
|
|
145,000
|
|
|
Common stock, $0.01 par value, 490,000,000 authorized, 89,153,780
shares and 66,797,816 shares outstanding at December 31, 2015 and
2014, respectively.
|
|
|
891
|
|
|
|
668
|
|
|
Additional paid-in capital
|
|
|
1,710,979
|
|
|
|
1,070,833
|
|
|
Accumulated other comprehensive loss
|
|
|
(1,081
|
)
|
|
|
(2,443
|
)
|
|
Accumulated deficit
|
|
|
(44,955
|
)
|
|
|
(34,884
|
)
|
|
Total Hudson Pacific Properties, Inc. stockholders’ equity
|
|
|
1,665,834
|
|
|
|
1,179,174
|
|
|
Non-controlling interest—members in Consolidated Entities
|
|
|
262,625
|
|
|
|
42,990
|
|
|
Non-controlling common units in the Operating Partnership
|
|
|
1,800,578
|
|
|
|
52,851
|
|
|
TOTAL EQUITY
|
|
|
3,729,037
|
|
|
|
1,275,015
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
$
|
6,254,035
|
|
|
$
|
2,335,140
|
|
|
|
|
Hudson Pacific Properties, Inc.
|
|
Combined Statements of Operations
|
|
(Unaudited, in thousands, except share and per share data)
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Office
|
|
|
|
|
|
|
|
|
|
Rental
|
|
$
|
118,222
|
|
|
$
|
41,917
|
|
|
$
|
394,543
|
|
|
$
|
156,806
|
|
|
Tenant recoveries
|
|
|
22,345
|
|
|
|
10,866
|
|
|
|
66,235
|
|
|
|
34,509
|
|
|
Parking and other
|
|
|
3,328
|
|
|
|
5,839
|
|
|
|
20,940
|
|
|
|
22,471
|
|
|
Total office revenues
|
|
|
143,895
|
|
|
|
58,622
|
|
|
|
481,718
|
|
|
|
213,786
|
|
|
|
|
|
|
|
|
|
|
|
|
Media & Entertainment
|
|
|
|
|
|
|
|
|
|
Rental
|
|
|
6,125
|
|
|
|
5,215
|
|
|
|
23,027
|
|
|
|
22,138
|
|
|
Tenant recoveries
|
|
|
238
|
|
|
|
157
|
|
|
|
943
|
|
|
|
1,128
|
|
|
Other property-related revenue
|
|
|
4,324
|
|
|
|
4,723
|
|
|
|
14,849
|
|
|
|
15,751
|
|
|
Other
|
|
|
69
|
|
|
|
70
|
|
|
|
313
|
|
|
|
612
|
|
|
Total Media & Entertainment revenues
|
|
|
10,756
|
|
|
|
10,165
|
|
|
|
39,132
|
|
|
|
39,629
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
154,651
|
|
|
|
68,787
|
|
|
|
520,850
|
|
|
|
253,415
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
Office operating expenses
|
|
|
50,767
|
|
|
|
20,432
|
|
|
|
166,131
|
|
|
|
78,372
|
|
|
Media & Entertainment operating expenses
|
|
|
6,372
|
|
|
|
7,376
|
|
|
|
23,726
|
|
|
|
25,897
|
|
|
General and administrative
|
|
|
9,583
|
|
|
|
9,096
|
|
|
|
38,534
|
|
|
|
28,253
|
|
|
Depreciation and amortization
|
|
|
74,126
|
|
|
|
20,243
|
|
|
|
245,071
|
|
|
|
72,216
|
|
|
Total operating expenses
|
|
|
140,848
|
|
|
|
57,147
|
|
|
|
473,462
|
|
|
|
204,738
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
13,803
|
|
|
|
11,640
|
|
|
|
47,388
|
|
|
|
48,677
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense (income)
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
16,600
|
|
|
|
6,413
|
|
|
|
50,667
|
|
|
|
25,932
|
|
|
Interest income
|
|
|
(6
|
)
|
|
|
(9
|
)
|
|
|
(124
|
)
|
|
|
(30
|
)
|
|
Acquisition-related expenses
|
|
|
(106
|
)
|
|
|
4,322
|
|
|
|
43,336
|
|
|
|
4,641
|
|
|
Other expense (income)
|
|
|
60
|
|
|
|
29
|
|
|
|
62
|
|
|
|
(14
|
)
|
|
Total other expense (income)
|
|
|
16,548
|
|
|
|
10,755
|
|
|
|
93,941
|
|
|
|
30,529
|
|
|
(Loss) income from continuing operations before gain on sale of real
estate
|
|
|
(2,745
|
)
|
|
|
885
|
|
|
|
(46,553
|
)
|
|
|
18,148
|
|
|
Gain on sale of real estate
|
|
|
—
|
|
|
|
—
|
|
|
|
30,471
|
|
|
|
5,538
|
|
|
(Loss) income from continuing operations
|
|
|
(2,745
|
)
|
|
|
885
|
|
|
|
(16,082
|
)
|
|
|
23,686
|
|
|
(Loss) income from discontinued operations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(164
|
)
|
|
Impairment loss from discontinued operations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net (loss) income from discontinued operations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(164
|
)
|
|
Net (loss) income
|
|
$
|
(2,745
|
)
|
|
$
|
885
|
|
|
$
|
(16,082
|
)
|
|
$
|
23,522
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to preferred stock and units
|
|
|
(2,520
|
)
|
|
|
(3,195
|
)
|
|
|
(12,105
|
)
|
|
|
(12,785
|
)
|
|
Net income attributable to restricted shares
|
|
|
(127
|
)
|
|
|
(68
|
)
|
|
|
(356
|
)
|
|
|
(274
|
)
|
|
Original issuance costs of redeemed Series B preferred units
|
|
|
(5,970
|
)
|
|
|
—
|
|
|
|
(5,970
|
)
|
|
|
—
|
|
|
Net loss (income) attributable to non-controlling interest in
consolidated entities
|
|
|
815
|
|
|
|
6
|
|
|
|
(3,853
|
)
|
|
|
(149
|
)
|
|
Net loss (income) attributable to common units in the Operating
Partnership
|
|
|
4,087
|
|
|
|
82
|
|
|
|
21,969
|
|
|
|
(359
|
)
|
|
Net (loss) income attributable to Hudson Pacific Properties, Inc.
common stockholders
|
|
$
|
(6,460
|
)
|
|
$
|
(2,290
|
)
|
|
$
|
(16,397
|
)
|
|
$
|
9,955
|
|
|
Basic and diluted per share amounts:
|
|
|
|
|
|
|
|
|
|
Net (loss) income from continuing operations attributable to common
stockholders
|
|
$
|
(0.07
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
0.15
|
|
|
Net income (loss) income from discontinued operations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net (loss) income attributable to common stockholders’ per
share—basic
|
|
$
|
(0.07
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
0.15
|
|
|
Weighted average shares of common stock outstanding—basic
|
|
|
88,990,612
|
|
|
|
66,512,651
|
|
|
|
85,927,216
|
|
|
|
65,792,447
|
|
|
Dividends declared per share of common stock
|
|
$
|
0.200
|
|
|
$
|
0.125
|
|
|
$
|
0.575
|
|
|
$
|
0.500
|
|
|
|
|
Hudson Pacific Properties, Inc.
|
|
Funds From Operations
|
|
(Unaudited, in thousands, except per share data)
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
|
Reconciliation of net loss to Funds From Operations (FFO):
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(2,745
|
)
|
|
$
|
885
|
|
|
$
|
(16,082
|
)
|
|
$
|
23,522
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization of real estate assets
|
|
|
73,876
|
|
|
|
20,158
|
|
|
|
244,182
|
|
|
|
72,003
|
|
|
Depreciation and amortization—discontinued operations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Gain on sale of real estate
|
|
|
—
|
|
|
|
—
|
|
|
|
(30,471
|
)
|
|
|
(5,538
|
)
|
|
Impairment loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
FFO attributable to non-controlling interest in Consolidated Entities
|
|
|
(3,696
|
)
|
|
|
(1,254
|
)
|
|
|
(14,677
|
)
|
|
|
(5,260
|
)
|
|
Net income attributable to preferred stock and units
|
|
|
(2,520
|
)
|
|
|
(3,195
|
)
|
|
|
(12,105
|
)
|
|
|
(12,785
|
)
|
|
FFO to common stockholders and unit holders
|
|
$
|
64,915
|
|
|
$
|
16,594
|
|
|
$
|
170,847
|
|
|
$
|
71,942
|
|
|
Specified items impacting FFO:
|
|
|
|
|
|
|
|
|
|
Acquisition-related expenses
|
|
|
(106
|
)
|
|
|
4,322
|
|
|
|
43,336
|
|
|
|
4,641
|
|
|
Consulting fee to former executive
|
|
|
—
|
|
|
|
1,273
|
|
|
|
—
|
|
|
|
4,109
|
|
|
Supplemental property tax expenses/(savings)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
809
|
|
|
Lease termination revenue
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,687
|
)
|
|
Lease termination non-cash write-off
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
77
|
|
|
FFO (excluding specified items) to common stockholders and unit
holders
|
|
$
|
64,809
|
|
|
$
|
22,189
|
|
|
$
|
214,183
|
|
|
$
|
79,891
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock/units outstanding—diluted
|
|
|
145,945
|
|
|
|
69,685
|
|
|
|
129,590
|
|
|
|
68,892
|
|
|
FFO per common stock/unit—diluted
|
|
$
|
0.44
|
|
|
$
|
0.24
|
|
|
$
|
1.32
|
|
|
$
|
1.04
|
|
|
FFO (excluding specified items) per common stock/unit—diluted
|
|
$
|
0.44
|
|
|
$
|
0.32
|
|
|
$
|
1.65
|
|
|
$
|
1.16
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160225006516/en/
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