Hudson Pacific Properties, Inc. (NYSE:HPP) Q1 2020 Earnings Conference Call May 5, 2020 2:00 PM ET Company Participants Laura Campbell - Senior Vice President Investor Relations & Marketing Victor Coleman - Chairman & Chief Executive Officer Mark Lammas - President Alex Vouvalides - Chief Operating Officer & Chief Investment Officer Harout Diramerian - Chief Financial Officer Art Suazo - Executive Vice President, Leasing Conference Call Participants Nick Yulico - Scotiabank Alex Goldfarb - Piper Sandler Cra ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________ FORM 10-Q ______________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number: 001-34789 (Hudson Pacific Properties, Inc.) Commis ...

| --- | --- | --- | --- | |---------------------------------------------|-----------------------------------------|-------|-------| | | | | | | | | | | | | | | | | UDSON P A C I F I C PROPERTIES | | | | | SUPPLEMENTAL INFORMATION FIRST QUARTER 2020 | REIMAGINING NOW. TO CREATE WHAT'S NEXT. | | | Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2020 Forward-Looking Statements This Supplemental Information contains forward-looking statements within the meaning of Section 27A of the Sec ...

PART I [Business](index=5&type=section&id=ITEM%201.%20Business) Hudson Pacific Properties specializes in high-quality office and studio properties across key West Coast markets, focusing on value-add opportunities and ESG principles - Portfolio Overview as of December 31, 2019 | Asset Type | Square Feet (approx.) | | :--- | :--- | | Office Properties | 14.9 million | | Studio Properties | 1.2 million | | Undeveloped Density Rights | 2.7 million | - The company's business strategy focuses on investing in Class-A office and studio properties in high-growth, innovation-centric submarkets to attract quality tenants from the technology, media, and entertainment sectors[25](index=25&type=chunk) - As of year-end 2019, the two largest tenants, Netflix, Inc. and Google, Inc., accounted for a significant **15.2%** of the company's share of annualized base rent from office properties[26](index=26&type=chunk) - The company operates through two segments: (i) office properties and (ii) studio properties, with all business conducted in Northern/Southern California, the Pacific Northwest, and Western Canada[31](index=31&type=chunk) - Hudson Pacific emphasizes its commitment to ESG, focusing on environmental stewardship, social responsibility (including diversity and inclusion), and strong corporate governance[42](index=42&type=chunk)[49](index=49&type=chunk)[54](index=54&type=chunk) [Risk Factors](index=15&type=section&id=ITEM%201A.%20Risk%20Factors) The company faces significant risks including geographic concentration, tenant dependency, acquisition challenges, capital reliance, and interest rate fluctuations - The company's properties are concentrated in Northern/Southern California, the Pacific Northwest, and Western Canada, making it susceptible to adverse economic conditions, local regulations, and natural disasters specific to these regions[67](index=67&type=chunk) - A significant portion of rental revenue comes from tenants in the technology and media/entertainment industries, exposing the company to downturns in these sectors[69](index=69&type=chunk) - The company depends on significant tenants like Netflix, Google, and WeWork; their financial instability or bankruptcy could adversely affect income and cash flow[92](index=92&type=chunk)[93](index=93&type=chunk) - Maintaining REIT status requires distributing at least **90%** of net taxable income annually, which may necessitate borrowing funds during unfavorable market conditions to meet distribution requirements[75](index=75&type=chunk)[147](index=147&type=chunk) - The potential replacement of LIBOR with an alternative reference rate like SOFR after 2021 may adversely affect interest expense on the company's variable rate debt[82](index=82&type=chunk)[83](index=83&type=chunk) [Unresolved Staff Comments](index=37&type=section&id=ITEM%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC as of the filing date - None[153](index=153&type=chunk) [Properties](index=37&type=section&id=ITEM%202.%20Properties) As of December 31, 2019, the company's portfolio comprised 62 properties totaling approximately 18.8 million square feet across office, studio, and land segments - Portfolio Summary as of December 31, 2019 | Portfolio Type | Number of Properties | Total Square Feet (approx.) | | :--- | :--- | :--- | | **Total Portfolio** | **62** | **18.8 million** | | Office | 52 | 14.9 million | | Studio | 3 | 1.2 million | | Land | 7 | 2.7 million (developable) | [Office Portfolio](index=38&type=section&id=Office%20Portfolio) The office portfolio, comprising 52 properties totaling 14.9 million square feet, was **95.1%** leased as of December 31, 2019, with a **4.3-year** weighted average lease term - Office Portfolio Key Metrics (as of Dec 31, 2019) | Metric | Value | | :--- | :--- | | Total Properties | 52 | | Total Square Feet | ~14.9 million | | In-Service Portfolio Leased % | 95.1% | | Stabilized Portfolio Leased % | 96.4% | | Weighted Avg. Remaining Lease Term | 4.3 years | - Top 5 Tenant Industries by Company's Share of Annualized Base Rent | Industry | % of Total | | :--- | :--- | | Technology | 37.8% | | Media and Entertainment | 17.1% | | Business Services | 9.7% | | Legal | 8.1% | | Financial Services | 7.3% | - Office Lease Expiration Schedule (Company's Share) | Year of Expiration | % of Portfolio Square Feet | | :--- | :--- | | Vacant | 6.3% | | 2020 | 6.1% | | 2021 | 10.4% | | 2022 | 10.7% | | 2023 | 10.9% | | Thereafter | 35.2% | [Studio Portfolio](index=47&type=section&id=Studio%20Portfolio) The studio portfolio consists of three Hollywood properties totaling 1.2 million square feet, with an average leased rate of **92.3%** for same-store properties in 2019 - Studio Portfolio Summary (as of Dec 31, 2019) | Property | Square Feet | Average % Leased (12-mo) | | :--- | :--- | :--- | | Sunset Gower Studios | 531,756 | 92.8% | | Sunset Bronson Studios | 308,026 | 99.2% | | Sunset Las Palmas Studios | 384,621 | 86.6% (Blended) | | **Total** | **1,224,403** | **~92.3% (Same-store)** | [Land Portfolio](index=48&type=section&id=Land%20Portfolio) The land portfolio holds an estimated **2.7 million** developable square feet across key markets, representing future development opportunities - The land portfolio represents approximately **2.7 million** square feet of future development potential, with the majority subject to obtaining entitlement approvals[191](index=191&type=chunk) [Legal Proceedings](index=50&type=section&id=ITEM%203.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings expected to adversely affect its operations - The company is not currently involved in any material legal proceedings[192](index=192&type=chunk) [Mine Safety Disclosures](index=50&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[193](index=193&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=51&type=section&id=ITEM%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section details the market for Hudson Pacific Properties' common stock, dividend policy, share repurchases, and a five-year stock performance comparison against key indices - Hudson Pacific Properties, Inc. common stock trades on the NYSE under the symbol 'HPP'; there is no public trading market for the operating partnership's common units[196](index=196&type=chunk)[202](index=202&type=chunk) - The company has a share repurchase program authorized for up to **$250.0 million**, with **$50.0 million** repurchased cumulatively as of December 31, 2019[199](index=199&type=chunk) - 5-Year Cumulative Total Return Comparison (2014-2019) | Index | 12/31/14 | 12/31/19 | | :--- | :--- | :--- | | **Hudson Pacific Properties, Inc.** | **$100.00** | **$143.26** | | S&P 500 | $100.00 | $173.86 | | MSCI U.S. REIT | $100.00 | $140.48 | | SNL U.S. REIT Office | $100.00 | $121.57 | [Selected Financial Data](index=54&type=section&id=ITEM%206.%20Selected%20Financial%20Data) This section presents five years of selected consolidated financial data, highlighting **$818.2 million** in 2019 revenues, a decrease in net income to **$55.8 million**, and total assets growing to **$7.47 billion** - Selected Financial Data for Hudson Pacific Properties, Inc. (in thousands, except per share data) | Metric | 2019 (in thousands) | 2018 (in thousands) | 2017 (in thousands) | | :--- | :--- | :--- | :--- | | Total Revenues | $818,182 | $728,418 | $728,139 | | Net Income (loss) | $55,846 | $111,781 | $94,561 | | Total Assets | $7,466,568 | $7,070,879 | $6,622,070 | | Total Liabilities | $3,622,131 | $3,117,793 | $2,700,929 | | Dividends declared per common share | $1.000 | $1.000 | $1.000 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=59&type=section&id=ITEM%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 2019 financial performance, highlighting a **12.1%** increase in Net Operating Income to **$516.7 million**, strategic transactions, and a **Baa2** credit rating upgrade by Moody's [Executive Summary and 2019 Highlights](index=59&type=section&id=Executive%20Summary%20and%202019%20Highlights) The company's 2019 highlights include acquiring a **20%** interest in Bentall Centre, selling Campus Center for **$148.4 million**, and issuing **$850 million** in senior notes - Acquired a **20%** interest in the Bentall Centre office and retail complex in Vancouver, Canada, in a joint venture with Blackstone, serving as the operating partner[228](index=228&type=chunk) - Sold the Campus Center office property and developable land for a total of **$148.4 million**, resulting in a **$52.2 million** impairment loss on the office property and a **$47.1 million** gain on the land[230](index=230&type=chunk) - Completed several financing activities, including issuing **$500 million** of **4.65%** senior notes and **$400 million** of **3.25%** senior notes, using proceeds to repay term loans and reduce borrowings on the unsecured revolving credit facility[235](index=235&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk) [Results of Operations (2019 vs. 2018)](index=68&type=section&id=Results%20of%20Operations%20(2019%20vs.%202018)) Net Operating Income increased **12.1%** to **$516.7 million** in 2019, driven by both same-store and non-same-store growth, while net income decreased to **$55.8 million** due to impairment and higher expenses - Net Operating Income (NOI) Comparison (in thousands) | NOI Category | 2019 (in thousands) | 2018 (in thousands) | $ Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Same-store NOI | $362,000 | $332,169 | $29,831 | 9.0% | | Non-same-store NOI | $154,660 | $128,539 | $26,121 | 20.3% | | **Total NOI** | **$516,660** | **$460,708** | **$55,952** | **12.1%** | - Net income decreased by **50.0%** to **$55.8 million** in 2019 from **$111.8 million** in 2018, primarily due to a **$52.2 million** impairment loss and a **$22.7 million** increase in interest expense[283](index=283&type=chunk) - General and administrative expenses increased by **17.9%** to **$71.9 million**, partly due to the adoption of ASC 842 requiring expensing certain lease-signing costs[299](index=299&type=chunk) [Liquidity and Capital Resources](index=77&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains liquidity through cash, operating cash flow, and credit facilities, with **$2.85 billion** in total debt, a **32.4%** debt-to-market capitalization, and a **Baa2** credit rating from Moody's - Liquidity and Debt Metrics (as of Dec 31, 2019) | Metric | Value (in millions) | | :--- | :--- | | Cash and Cash Equivalents | $46.2 | | Unsecured Revolver Capacity | $600.0 | | Unsecured Revolver Drawn | $75.0 | | Total Consolidated Debt | $2,855.3 | | Debt-to-Market Capitalization | 32.4% | - In October 2019, Moody's Investors Service upgraded the company's long-term corporate credit rating to **Baa2** from Baa3, with a stable outlook[312](index=312&type=chunk) - Cash Flow Summary (in thousands) | Cash Flow Activity | 2019 (in thousands) | 2018 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $288,011 | $214,626 | | Net cash used in investing activities | $(316,409) | $(392,333) | | Net cash provided by financing activities | $18,465 | $144,618 | [Quantitative and Qualitative Disclosures About Market Risk](index=81&type=section&id=ITEM%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk on its **$625.1 million** variable-rate debt, with a **100 basis point** LIBOR increase potentially raising annual interest expense by **$6.3 million** - The primary market risk is interest rate risk; a **100 basis point** increase in LIBOR would increase annual interest expense by **$6.3 million**[328](index=328&type=chunk)[332](index=332&type=chunk) - Debt Profile as of December 31, 2019 (in millions) | Debt Type | Carrying Value (in millions) | | :--- | :--- | | Variable Rate | $625.1 | | Fixed Rate | $2,220.3 | | **Total Unsecured & Secured** | **$2,845.5** | - The company uses interest rate swaps to hedge risk on its variable-rate debt, with a total notional amount of **$539.5 million** hedged as of year-end 2019[331](index=331&type=chunk) - The company is exposed to foreign currency exchange rate risk related to its unconsolidated real estate entity operating in Canada[333](index=333&type=chunk) [Controls and Procedures](index=84&type=section&id=ITEM%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of December 31, 2019, with no material changes to internal control over financial reporting, and Ernst & Young LLP issued an unqualified opinion - Management concluded that the disclosure controls and procedures for both Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P. were effective as of December 31, 2019[338](index=338&type=chunk)[341](index=341&type=chunk) - No material changes were identified in the company's internal control over financial reporting during the fourth quarter of 2019[342](index=342&type=chunk)[343](index=343&type=chunk) - Ernst & Young LLP, the independent registered public accounting firm, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2019[350](index=350&type=chunk) PART III [PART III](index=87&type=section&id=PART%20III) Items 10 through 14, covering Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, Certain Relationships, and Principal Accountant Fees, are incorporated by reference from the company's definitive proxy statement for its 2020 Annual Meeting of Stockholders - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's 2020 proxy statement[353](index=353&type=chunk)[354](index=354&type=chunk)[355](index=355&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=88&type=section&id=ITEM%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section includes consolidated financial statements, the independent auditor's report, and detailed notes for Hudson Pacific Properties, Inc. and L.P. for the three years ended December 31, 2019 [Notes to Consolidated Financial Statements](index=113&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information on accounting policies, property transactions, debt structure, and compliance with covenants, including the adoption of ASC 842 on January 1, 2019 - The company adopted the new lease accounting standard, ASC 842, on January 1, 2019, using the modified retrospective approach, resulting in **$269.0 million** in operating lease right-of-use assets and **$272.7 million** in operating lease liabilities[490](index=490&type=chunk)[409](index=409&type=chunk) - During 2019, the company recorded a **$52.2 million** impairment charge related to the Campus Center office property, which was subsequently sold[538](index=538&type=chunk) - As of December 31, 2019, the company was in compliance with all financial covenants related to its unsecured revolving credit facility, term loans, and note purchase agreements[586](index=586&type=chunk) - Future Minimum Base Rents from Non-Cancellable Leases (in thousands) | Year | Total Minimum Rent (in thousands) | | :--- | :--- | | 2020 | $585,000 | | 2021 | $581,172 | | 2022 | $544,040 | | 2023 | $506,227 | | 2024 | $436,783 | | Thereafter | $1,824,676 |

Hudson Pacific Properties, Inc. (NYSE:HPP) Q4 2019 Earnings Conference Call February 20, 2020 2:00 PM ET Company Participants Laura Campbell - SVP, IR & Marketing Victor Coleman - Chairman, President & CEO Mark Lammas - President & Treasurer Harout Diramerian - CFO Arthur Suazo - EVP, Leasing Conference Call Participants James Feldman - Bank of America Merrill Lynch Emmanuel Korchman - Citigroup Alexander Goldfarb - Piper Sandler & Co. Richard Anderson - SMBC Omotayo Okusanya - Mizuho Securities David Rodge ...

| --- | --- | --- | --- | --- | |----------------------------------------------|-------|-----------------------------------------|-------|-------| | | | | | | | | | | | | | | | | | | | UDSON | | | | | | P A C I F I C PROPERTIES | | | | | | SUPPLEMENTAL INFORMATION FOURTH QUARTER 2019 | | REIMAGINING NOW. TO CREATE WHAT'S NEXT. | | | Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Forward-Looking Statements This Supplemental Information contains forward-looking statements withi ...

Hudson Pacific Properties, Inc. (NYSE:HPP) Q3 2019 Earnings Conference Call October 30, 2019 2:00 PM ET Company Participants Laura Campbell - Senior Vice President-Investor Relations & Marketing Victor Coleman - Chairman & Chief Executive Officer Mark Lammas - Chief Operating Officer & Chief Financial Officer Art Suazo - Executive Vice President-Leasing Alex Vouvalides - Chief Investment Officer Bill Humphrey - Senior Vice President, Sunset Studios Conference Call Participants Blaine Heck - Wells Fargo Jami ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________ FORM 10-Q ______________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number: 001-34789 (Hudson Pacific Properties, Inc.) Co ...

UDSON P A C I F I C PROPERTIES SUPPLEMENTAL INFORMATION THIRD QUARTER 2019 REIMAGINING NOW. TO CREATE WHAT'S NEXT. Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Forward-Looking Statements This Supplemental Information contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Future events and actual results, financial and otherwise, may differ materially ...

Financial Data and Key Metrics Changes - For Q2 2019, the company generated FFO of $0.48 per diluted share, up from $0.46 per diluted share a year ago, driven by higher occupancy and rental rates across both office and studio portfolios [30] - NOI at the 32 same-store office properties increased by 12.7% on a GAAP basis and 11.1% on a cash basis [31] - The company increased its full year same-store office cash NOI guidance from a midpoint of 3.5% to 4.5% [31][36] Business Line Data and Key Metrics Changes - The company signed over 500,000 square feet of office leases in Q2 2019, with GAAP and cash rent spreads of 48% and 27%, respectively [5] - The same-store studio NOI decreased by 8.1% on a GAAP basis and 9.3% on a cash basis, attributed to elevated fixed costs and lower production-related revenue [32][44] - The stabilized Los Angeles portfolio is 98.8% leased, while the stabilized San Francisco portfolio is 97.5% leased, both with in-place rents below market [18][20] Market Data and Key Metrics Changes - In Los Angeles, Class A vacancy dropped 310 basis points to 6.8%, with rents increasing by 2.2% to $60 per square foot [17] - San Francisco saw Class A vacancy drop 40 basis points to 2.5%, with rents increasing by 2.4% to $90 per square foot [20] - Silicon Valley experienced 2.8 million square feet of positive net absorption, marking the largest quarter of occupancy gains in the market's history [23] Company Strategy and Development Direction - The company is focusing on capital recycling and is actively looking for opportunities in Vancouver, particularly in partnership with Blackstone [11][60] - The company plans to commence construction on Washington 1000 in mid-2021, with expectations of strong leasing prospects [12][26] - The company aims to enhance its ESG platform and align it with its business strategy, as evidenced by the appointment of a Vice President of Sustainability and Social Impact [14] Management's Comments on Operating Environment and Future Outlook - Management remains bullish on the performance of office and studio portfolios, driven by the growth of tech and media tenants [38] - The company anticipates continued demand in the Peninsula and Silicon Valley markets, with no expected decline in the next 24 months [46][47] - Management highlighted the importance of long-term leases and elevated service levels to attract tenants, despite higher operating expenses [44][66] Other Important Information - The company closed sales of Campus Center improvements and land for a combined $148 million, applying proceeds to pay down its revolving credit facility [13][35] - The company is increasing and narrowing its full year 2019 FFO guidance range to $1.98 to $2.04 per diluted share [36] Q&A Session Summary Question: Decline in same-store NOI in the studio portfolio - Management explained that the decline was due to elevated fixed costs and lower production-related revenue, with a significant drop in other property-related revenue [44][45] Question: Outlook for Silicon Valley and Peninsula markets - Management expressed optimism about continued demand and rent growth in these markets, with no expected decline in the near future [46][47] Question: Update on development projects - Management provided updates on Cloud 10 and Sunset Gower, indicating that both projects would require substantial pre-leasing before breaking ground [53][54] Question: Relationship with Blackstone - Management confirmed a strong partnership with Blackstone, focusing on project-by-project opportunities in Vancouver and other markets [60] Question: Studio expansion and market opportunities - Management indicated interest in expanding studio operations beyond Vancouver, including potential markets like New York and Toronto [77] Question: Capital commitment for Bentall - Management outlined a three-year investment plan for Bentall, with an estimated spend of $25 million in the first year [80]