SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): JULY 27, 1999 BOSTON PROPERTIES, INC. (Exact name of Registrant as specified in its charter) DELAWARE 1-13087 04-2473675 (State or other jurisdiction (Commission File (I.R.S. employer of incorporation) Number) Identification No.) 800 BOYLSTON STREET BOSTON, MASSACHUSETTS 02199 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (617) 236-3300
ITEM 5. OTHER EVENTS Following the issuance of a press release on July 27, 1999, announcing the Company's results for the second quarter ended June 30, 1999, the Company intends to provide, to certain investors and analysts at their request, supplemental information regarding the Company's operations that is to voluminous for a press release. The Company is attaching this supplementary operating and financial data as Exhibit 99.1 and the press release as Exhibit 99.2 to this Current Report on Form 8-K. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits EXHIBIT NO. 99.1 The Boston Properties, Inc. Supplemental Operating and Financial Data for the quarter ended June 30, 1999. 99.2 The Boston Properties, Inc. press release dated July 27, 1999 for the quarter ended June 30, 1999.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: July 28, 1999 BOSTON PROPERTIES, INC. /s/ David G. Gaw ------------------------------- By: David G. Gaw Chief Financial Officer
Exhibit 99.1 BOSTON PROPERTIES, INC. Supplemental Operating and Financial Data for the Quarter Ended June 30, 1999
INDEX Page ---- Company Background 2 Investor Information 3-4 Financial Highlights 5 Consolidated Balance Sheets 6 Consolidated Income Statements 7 Funds From Operations 8 Financial Ratios 9 Capital Structure 10 Debt Analysis 11 Joint Ventures 12 Portfolio Overview 13-14 Occupancy Analysis - same property 15 Office Properties 16 R&D Properties 17 Industrial Properties 18 Grand Total - Office, R&D and Industrial Properties 19 Hotel Performance 20 Same Property Performance 21 "In-Service" Property Performance 22 Capital Expenditures 23 Value Creation Pipeline - Acquisitions/Repositioning 24 Value Creation Pipeline - Development 25 Value Creation Pipeline - Land Parcels 26 Acquisition Property Profile 27 1
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 COMPANY BACKGROUND Boston Properties is a fully integrated, self-administered and self-managed real estate investment trust that develops, redevelops, acquires, manages, operates and owns a diverse portfolio of office, industrial and hotel properties. The Company is one of the largest owners and developers of office properties in the United States, concentrated in the Northeast Corridor from Virginia to Greater Boston and in downtown San Francisco. On June 23, 1997, Boston Properties successfully completed its initial public offering. The offering and the underwriters over-allotment option closed on the same date resulting in 36,110,000 shares being sold at $25.00 per share for a total offering of $902,750,000. On January 30,1998, the Company closed a follow-on offering of 23,000,000 shares (including the underwriters' over-allotment) at $35.125 per share for a total offering of $807,875,000. On May 20, 1999, the Company raised an additional $141,002,500, net of issuance costs, through the issuance of 4,000,000 shares. Through its predecessor company founded by Mortimer B. Zuckerman and Edward H. Linde in 1970, the Company grew through the seventies, eighties, and nineties by developing and redeveloping Class A office properties, R&D and industrial properties, and hotels in its primary markets of greater Boston, greater Washington, DC, and midtown Manhattan. Since the Company's Initial Offering in June 1997, the Company has acquired 41 properties adding approximately 14.9 million square feet to its portfolio, representing an investment of approximately $3.6 billion. In addition, the Company is developing eight Class A Office Buildings for a total anticipated investment of approximately $493.3 million. The Company owns or controls land where it can develop an additional 10.6 million square feet. 2
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 INVESTOR INFORMATION 800 Boylston Street Boston, MA 02199 (617) 236-3300 (617) 536-5087 (fax) Mortimer B. Zuckerman Chairman of the Board Edward H. Linde President, Chief Executive Officer and Director Robert E. Burke Executive Vice President, Operations Douglas T. Linde Senior Vice President, Financial and Capital Markets David G. Gaw Senior Vice President, Chief Financial Officer Elaine M. Quinlan Director of Investor Relations TIMING Quarterly results will be announced according to the following anticipated schedule: Third Quarter Early November Year End Early February 3
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 COMMON STOCK DATA (NYSE:BXP) Boston Properties' common stock is traded primarily on the New York Stock Exchange under the symbol: BXP. BXP's common stock has had the following characteristics: 2nd Quarter 1999 2nd Quarter 1998 ---------------- ---------------- High Price $ 37.1250 $ 35.9375 Low Price $ 31.2500 $ 32.0625 Closing Price $ 35.8750 $ 34.00 Dividends per share - annualized $ 1.70 $ 1.62 Closing dividend yield - annualized 4.74% 4.76% Closing shares, common units and preferred units (if converted) outstanding (thousands) 104,711 83,158 Closing market value of shares and units outstanding (thousands) $ 3,756,507 $ 2,827,372 4
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 FINANCIAL HIGHLIGHTS (unaudited and in thousands) Three Months Ended ------------------------------------------ June 30, 1999 June 30, 1998 % Change Income Items: Revenues $ 191,640 $ 108,041 77.38% Net Income available to common shareholders $ 27,223 $ 29,921 (9.02%) Funds from Operations $ 66,366 $ 50,707 30.88% Company's share (73.34% and 76.79%) $ 48,673 $ 38,938 25.00% Funds from Operations per share - basic $ 0.74 $ 0.63 17.89% Funds from Operations per share - diluted $ 0.72 $ 0.63 14.89% Dividends per share $ 0.425 $ 0.405 4.94% Ratios: Interest Coverage Ratio 2.54 3.19 (20.35%) Dividend Payout Ratio 58.72% 64.17% (8.50%) June 30, 1999 December 31, 1% Change ------------- ------------ --------- Capitalization: Total Debt $2,941,507 $3,088,724 (4.77%) Total Common Shares Outstanding @ Quarter End 67,893 63,528 6.87% Total Preferred Shares Outstanding @ Quarter End (if converted) 2,625 -- -- Total Common Units Outstanding @ Quarter End 23,817 23,798 0.08% Total Preferred Units Outstanding @ Quarter End (if converted) 10,376 10,454 (0.75%) Price @ Quarter End $ 35.875 $ 30.500 17.62% Equity Value @ Quarter End $3,756,507 $2,982,294 25.96% Total Market Capitalization $6,698,014 $6,071,018 10.33% Debt/Total Market Capitalization 43.92% 50.88% (13.68%) 5
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 CONSOLIDATED BALANCE SHEETS (unaudited and in thousands) June 30, 1999 December 31, 1998 ------------- ----------------- ASSETS Real Estate and equipment $ 4,927,981 $ 4,755,436 Land and development in progress 199,488 191,436 Less accumulated depreciation (411,705) (357,384) ----------- ----------- Total real estate and equipment 4,715,764 4,559,809 Cash 32,225 12,166 Escrows 24,082 19,014 Notes receivable -- 420,143 Tenant and other receivables 53,059 40,830 Accrued rental income 72,535 64,251 Deferred charges, net 50,946 46,029 Prepaid expenses and other assets 28,142 26,058 Investment in joint ventures 42,077 46,787 ----------- ----------- Total assets $ 5,018,830 $ 5,235,087 ----------- ----------- ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Mortgage notes payable $ 2,799,507 $ 2,653,581 Notes payable 420,143 Unsecured line of credit 142,000 15,000 Accounts payable and accrued expenses 61,860 42,897 Dividends payable 45,559 40,494 Accrued interest payable 7,837 7,307 Other liabilities 22,946 27,950 ----------- ----------- Total liabilities 3,079,709 3,207,372 ----------- ----------- Commitments and contingencies -- -- Minority interests 781,999 1,105,864 Series A Convertible Redeemable Preferred Stock, liquidation preference $50.00 per share, 2,000,000 shares issued and outstanding 100,000 -- Stockholders' Equity: Excess stock, $.01 par value, 150,000,000 shares authorized, none issued or outstanding -- -- Common stock, $.01 par value, 250,000,000 shares authorized, 67,893,386 and 63,527,819 issued and outstanding, respectively 678 635 Additional paid-in capital 1,068,016 929,081 Dividend in excess of earnings (11,572) (7,865) ----------- ----------- Total stockholders' equity 1,057,122 921,851 ----------- ----------- Total liabilities and stockholders' equity $ 5,018,830 $ 5,235,087 ----------- ----------- ----------- ----------- 6
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 CONSOLIDATED INCOME STATEMENTS (unaudited and in thousands) Three Months Ended ------------------------------------ 30-Jun-99 30-Jun-98 % Change --------- --------- -------- Revenue: Rental Base Rent $ 158,070 $ 87,806 80.02% Recoveries from tenants 17,252 9,805 75.95% Parking and other 12,087 1,595 657.81% --------- --------- -------- Total rental revenue 187,409 99,206 813.78% Development and management services 3,611 4,383 (17.61%) Interest and other 620 4,452 (86.07%) --------- --------- -------- Total revenue 191,640 108,041 77.38% --------- --------- -------- Expenses: Rental expenses 60,306 27,403 120.07% General and administrative 7,352 5,800 26.76% Interest 49,219 23,814 106.68% Depreciation and amortization 29,443 16,594 77.43% --------- --------- -------- Total expenses 146,320 73,611 98.77% --------- --------- -------- Income before minority interests and before income from unconsolidated joint venture 45,320 34,430 31.63% Minority interest in property partnership (139) (106) 31.13% Income from unconsolidated joint venture 229 -- -- --------- --------- -------- Income before minority interest in Operating Partnership 45,410 34,324 32.30% Preferred distribution (6,611) -- -- Minority interest in Operating Partnership (1) (9,894) (7,967) 24.19% --------- --------- -------- Income before preferred dividend 28,905 26,357 9.67% Preferred dividend (1,682) -- -- --------- --------- -------- Income before extraordinary gain 27,223 26,357 3.29% Extraordinary gain on early debt extinguishment, net -- 3,564 (100.00%) --------- --------- -------- Net income available to common shareholders $ 27,223 $ 29,921 (9.02%) --------- --------- -------- --------- --------- -------- INCOME PER SHARE OF COMMON STOCK Income before extraordinary item $ 0.42 $ 0.42 (1.09%) --------- --------- -------- --------- --------- -------- Net income available to common shareholders $ 0.42 $ 0.48 (13.46%) --------- --------- -------- --------- --------- -------- (1) Equals minority interest percent (26.66%) of income before minority interest in Operating Partnership after deduction for preferred dividends and distributions. 7
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 FUNDS FROM OPERATIONS (in thousands, except for per share amounts) (unaudited) Three Months Ended ---------------------------------- Actual Actual 30-Jun-99 30-Jun-98 % Change Income from operations before minority interests and before income from unconsolidated joint venture $ 45,320 $ 34,430 31.63% Add: Real estate depreciation and amortization 29,238 16,415 78.12% Income from unconsolidated joint venture 229 -- Less: Minority property partnership's share of funds from operations (128) (138) (7.25%) Preferred allocation (8,293) -- -- -------- -------- ----- Funds from Operations $ 66,366 $ 50,707 30.88% -------- -------- ----- -------- -------- ----- Funds from Operations available to common shareholders (1) $ 48,673 $ 38,938 25.00% -------- -------- ----- -------- -------- ----- Funds from Operations per share - basic $ 0.74 $ 0.63 17.89% -------- -------- ----- -------- -------- ----- Weighted average shares outstanding - basic 65,534 61,694 6.22% -------- -------- ----- -------- -------- ----- Funds from Operations per share - diluted $ 0.72 $ 0.63 14.29% -------- -------- ----- -------- -------- ----- Weighted average shares outstanding - diluted 79,329 62,284 27.37% -------- -------- ----- -------- -------- ----- (1) Based on weighted average shares for the quarter. Company's share for the quarter ended 6/30/99 was 73.34% and 76.79% for the quarter ended 6/30/98. RECONCILIATION TO DILUTED FUNDS FROM OPERATIONS For the Three Months Ended June 30, 1999 For the Three Months Ended June 30, 1998 ---------------------------------------- ---------------------------------------- Income Shares Per Share Income Shares Per Share (Numerator)(Denominator) Amount (Numerator) (Denominator) Amonut ---------- ------------- ------ ----------- ------------- ------ Basic Funds from Operations $66,366 89,352 $ 0.74 $50,707 80,344 $ 0.63 Effect of Dilutive Securities Convertible Preferred Units 6,611 10,364 (0.01) -- -- -- Convertible Preferred Stock 1,682 2,625 -- -- -- -- Stock Options -- 806 (0.01) -- 590 -- ------- ------ -------- ------- ------ -------- Dilutive Funds from Operations (1) $74,659 103,147 $ 0.72 $50,707 80,934 $ 0.63 ------- ------ -------- ------- ------ -------- ------- ------ -------- ------- ------ -------- Company's share of Diluted Funds from Operations $57,419 79,329 $ 0.72 $38,938 62,284 $ 0.63 ------- ------ -------- ------- ------ -------- ------- ------ -------- ------- ------ -------- (1) Based on weighted average diluted shares for the quarter. Company's share for the quarter ended 6/30/99 was 76.91% and 76.96% for the quarter ended 6/30/98. 8
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 FINANCIAL RATIOS Three months ended June 30, 1999 ------------- RATIOS COMPUTED FOR INDUSTRY COMPARISONS: OPERATIONAL RATIOS (1,2) Debt Service Coverage Ratio 2.28 (EBITDA + Income from Unconsolidated Joint Ventures)/(Interest+Principal) Interest Coverage Ratio 2.54 (EBITDA + Income from Unconsolidated Joint Venture)/Interest Return on Shareholder's Equity 15.87% (EBITDA - Interest)/Average Equity (book value) (%) Return on Real Estate Investments 10.55% (EBITDA/Average Real Estate Investments (book value)) (%) FFO Payout Ratio 59.03% (Dividends Declared/FFO) (%) (1) EBITDA is equal to earnings before interest, taxes, depreciation and amortization. (2) FFO is calculated based on the NAREIT White Paper. 9
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 CAPITAL STRUCTURE DEBT (IN THOUSANDS) AGGREGATE PRINCIPAL JUNE 30, 1999 ------------- Mortgage Loans $2,799,507 Unsecured Line of Credit 142,000 ---------- Total Debt $2,941,507 ---------- ---------- EQUITY (IN THOUSANDS) COMMON SHARES & UNITS STOCK $ VALUE OUTSTANDING EQUIVALENTS EQUIVALENT (1) ----------- ----------- -------------- Common Stock 67,893 67,893 $2,435,661 Preferred Stock 2,000 2,625 94,172 Operating Partnership Units 23,817 23,817 854,435 Preferred Operating Partnership Units 8,713 10,376 372,239 ------ ------- Total Equity 104,711 $3,756,507 ------- ---------- ------- ---------- Total Market Capitalization $6,698,014 ---------- ---------- (1) Value based on June 30, 1999 closing price of $35.875. 10
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 DEBT ANALYSIS LONG-TERM DEBT MATURITIES AND PRINCIPAL PAYMENTS (IN THOUSANDS) YEAR 1999 2000 2001 2002 2003 THEREAFTER TOTAL ---- ---- ---- ---- ---- ---- ---------- ----- Amount $33,186 263,460 154,384 392,234 217,056 1,881,187 $2,941,507 UNSECURED LINE OF CREDIT - DUE JUNE 23, 2000 (IN THOUSANDS) OUTSTANDING LETTERS OF REMAINING FACILITY AT 6/30/99 CREDIT CAPACITY -------- ---------- ------ -------- $500,000 142,000 28,050 $329,950 UNSECURED AND SECURED DEBT ANALYSIS WEIGHTED WEIGHTED AVERAGE % OF DEBT AVERAGE RATE MATURITY --------- ------------ -------- Unsecured Debt 4.83% 6.63% 1.0 years Secured Debt 95.17% 7.00% 5.9 years ------ ---- --------- Total Debt 100.00% 6.98% 5.7 years ------ ---- --------- ------ ---- --------- FLOATING AND FIXED RATE DEBT ANALYSIS WEIGHTED WEIGHTED AVERAGE % OF DEBT AVERAGE RATE MATURITY --------- ------------ -------- Floating Rate Debt 5.07% 6.58% 1.1 years Fixed Rate Debt 94.93% 7.01% 5.9 years ------ ---- --------- Total Debt 100.00% 6.98% 5.7 years ------ ---- --------- ------ ---- --------- 11
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 JOINT VENTURE ANALYSIS as of June 30, 1999 ONE AND TWO ONE MARKET RESTON FREEDOM SQUARE OVERLOOK SQUARE NORTH COMBINED ------- ------- ------- ------- Total Equity (1) $ 4,500 $ 4,917 $32,660 $42,077 ------- ------- ------- ------- ------- ------- ------- ------- Construction loans payable (1) $12,248 $ 8,664 $17,891 $38,802 ------- ------- ------- ------- ------- ------- ------- ------- BXP's ownership percentage 25.00% 25.00% 50.00% ------- ------- ------- ------- ------- ------- (1) Represents the Company's share. RESULTS OF OPERATIONS FOR THE IN-SERVICE JOINT VENTURE FOR THE QUARTER ENDED JUNE 30, 1999 ONE AND TWO RESTON OVERLOOK -------- REVENUE Total rental revenue $2,635 Interest and other 12 ------ Total revenue 2,647 ------ EXPENSES Operating 768 Interest 506 Depreciation and amortization 449 ------ Total expenses 1,723 ------ Net income $ 924 ------ ------ 12
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 PORTFOLIO OVERVIEW RENTABLE SQUARE FEET OF IN-SERVICE PROPERTIES BY LOCATION AND TYPE OF PROPERTY GEOGRAPHIC AREA OFFICE (1) R&D INDUSTRIAL TOTAL % OF TOTAL --------------- ---------- --- ---------- ----- ---------- Greater Boston 5,408,645 545,206 247,318 6,201,169 25.80% Greater Washington, D.C 5,076,598(2) 1,382,632 236,743 6,695,973 27.86% Greater San Francisco 4,009,536 143,844 280,213 4,433,593 18.45% Midtown Manhattan 2,874,854 -- -- 2,874,854 11.96% Princeton/East Brunswick, NJ 1,599,866 -- -- 1,599,866 6.66% Baltimore, MD 1,166,797 -- -- 1,166,797 4.85% Richmond, VA 899,727 -- -- 899,727 3.75% Bucks County, PA -- -- 161,000 161,000 0.67% ---------- --------- ------- ---------- ------ Total 21,036,023 2,071,682 925,274 24,032,979 100.00% ---------- --------- ------- ---------- ------ ---------- --------- ------- ---------- ------ % of Total 87.53% 8.62% 3.85% 100.00% (1) Includes retail square footage of approximately 1,000,000. (2) Includes 444,286 square feet at One and Two Reston Overlook which are 25% owned by Boston Properties. HOTEL PROPERTIES NUMBER OF SQUARE HOTEL PROPERTIES ROOMS FEET ---------------- ----- ---- Long Wharf Marriott, Boston, MA 402 420,000 Cambridge Center Marriott, Cambridge, MA 431 330,400 Residence Inn by Marriott, Cambridge, MA 221 187,474 Total Hotel Properties 1,054 937,874 GARAGE PROPERTY AND STRUCTURED PARKING Number of Square Spaces Feet ------ ---- Garage Properties Cambridge Center North Garage 1,170 332,442 Structured Parking 16,726 5,851,221 ------ --------- Total Garage Property and Structured Parking 17,896 6,183,663 ------ --------- ------ ---------
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 PORTFOLIO OVERVIEW PERCENTAGE OF PROPERTY FUNDS FROM OPERATIONS* FOR IN-SERVICE PROPERTIES BY LOCATION AND TYPE OF PROPERTY FOR THE QUARTER ENDED JUNE 30, 1999 GEOGRAPHIC AREA OFFICE (1) R&D INDUSTRIAL HOTEL GARAGE TOTAL - --------------- ---------- --- ---------- ----- ------ ----- Greater Boston 18.1% 0.9% 0.2% 6.0% 0.3% 25.5% Greater Washington,D.C. 21.2% 3.0% 0.2% n/a n/a 24.4% Greater San Francisco 19.4% 0.2% 0.1% n/a n/a 19.7% Midtown Manhattan 17.8% n/a n/a n/a n/a 17.8% Baltimore, MD 4.3% n/a n/a n/a n/a 4.3% Richmond, VA 3.2% n/a n/a n/a n/a 3.2% Princeton/East Brunswick, NJ 5.0% n/a n/a n/a n/a 5.0% Bucks County, PA n/a n/a 0.1% n/a n/a 0.1% ---- --- --- --- --- ----- Total 88.9% 4.1% 0.7% 6.0% 0.3% 100.0% ---- --- --- --- --- ----- ---- --- --- --- --- ----- (1)Includes Retail Center FFO (Prudential Center Boston and Embarcadero Center). * For this table, Property Funds from Operations is equal to GAAP basis property NOI which includes the effect of straight-line rent and excludes any deduction for interest expense. 14
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 OCCUPANCY ANALYSIS SAME PROPERTY OCCUPANCY - BY LOCATION LOCATION 30-JUN-99 30-JUN-98 -------- --------- --------- Greater Boston, MA 96.3% 98.4% Greater Washington, D.C. 97.7% 98.7% Midtown Manhattan, NY 99.9% 97.8% Baltimore, MD 100.0% 99.7% Princeton/East Brunswick, NJ n/a n/a Richmond, VA 96.2% 97.4% Greater San Francisco, CA 94.7% 98.8% Bucks County, PA 100.0% 100.0% ----- ----- Total Portfolio 97.8% 98.4% ----- ----- ----- ----- SAME PROPERTY - BY TYPE OF PROPERTY 30-JUN-99 30-JUN-98 --------- --------- Total Office Portfolio 98.7% 98.7% Total R&D Portfolio 96.8% 98.6% Total Industrial Portfolio 90.4% 95.0% ---- ---- Total Portfolio 97.8% 98.4% ---- ---- ---- ---- 15
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 IN-SERVICE OFFICE PROPERTIES LEASE EXPIRATIONS ANNUALIZED RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES PERCENTAGE OF TOTAL EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS SQUARE FEET EXPIRING - ---------- --------------- --------------- -------------------- -------------------- 1999* 758,372 22,279,143 22,279,143 3.81% 2000 1,611,624 44,788,233 44,938,176 8.10% 2001 2,010,514 59,912,803 60,526,202 10.10% 2002 2,004,431 77,131,218 78,138,100 10.07% 2003 1,500,731 44,944,432 46,041,624 7.54% 2004 1,932,827 61,298,259 65,529,629 9.71% 2005 1,365,669 38,379,696 41,464,191 6.86% 2006 2,537,541 81,208,032 89,266,992 12.75% 2007 1,956,197 70,296,176 70,067,084 9.83% Thereafter 4,219,347 135,285,493 154,047,432 21.21% * July 1, 1999 through December 31, 1999 OCCUPANCY BY LOCATION 30-JUN-99 30-JUN-98 --------- -------- Greater Boston, MA 96.8% 98.7% Greater Washington, D.C 97.3% 99.6% Midtown Manhattan, NY 99.9% 97.8% Baltimore, MD 100.0% 99.7% Richmond, VA 96.2% 97.4% Princeton/East Brunswick, NJ 99.8% 100.0% Greater San Francisco, CA 98.3% n/a Bucks County, PA n/a n/a --------- -------- Total Office Portfolio 98.0% 98.9% --------- -------- --------- -------- 16
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 IN-SERVICE R&D PROPERTIES LEASE EXPIRATIONS ANNUALIZED RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES PERCENTAGE OF TOTAL EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS SQUARE FEET EXPIRING - ---------- --------------- --------------- -------------------- -------------------- 1999* 142,887 1,476,638 1,476,638 7.01% 2000 465,041 4,795,486 4,837,540 22.81% 2001 196,344 2,232,295 2,322,496 9.63% 2002 344,671 4,606,923 4,756,162 16.91% 2003 91,212 1,175,906 1,210,434 4.47% 2004 50,533 664,118 746,802 2.48% 2005 146,741 1,735,930 1,858,276 7.20% 2006 150,000 1,633,004 1,820,504 7.36% 2007 107,895 2,239,757 2,291,792 5.29% Thereafter 343,402 5,409,286 6,619,222 16.84% * July 1, 1999 through December 31, 1999 OCCUPANCY BY LOCATION 30-JUN-99 30-JUN-98 --------- --------- Greater Boston, MA 100.0% 100.0% Greater Washington, D.C 94.8% 97.7% Midtown Manhattan, NY n/a n/a Baltimore, MD n/a n/a Richmond, VA n/a n/a Princeton/East Brunswick, NJ n/a n/a Greater San Francisco, CA 98.4% 96.3% Bucks County, PA n/a n/a --------- --------- Total R&D Portfolio 96.4% 98.2% --------- --------- --------- --------- 17
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 IN-SERVICE INDUSTRIAL PROPERTIES LEASE EXPIRATIONS ANNUALIZED RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES PERCENTAGE OF TOTAL EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS SQUARE FEET EXPIRING 1999* 63,904 347,221 347,221 7.64% 2000 249,280 1,478,608 1,478,608 29.80% 2001 70,829 361,882 361,882 8.47% 2002 -- -- -- 0.00% 2003 153,430 949,947 1,046,026 18.34% 2004 195,076 946,510 1,004,186 23.32% 2005 20,500 122,297 140,199 2.45% 2006 -- -- -- 0.00% 2007 -- -- -- 0.00% Thereafter 83,608 728,226 728,226 9.99% * July 1, 1999 through December 31, 1999 OCCUPANCY BY LOCATION 30-JUN-99 30-JUN-98 --------- --------- Greater Boston, MA 93.0% 93.0% Greater Washington, D.C 78.3% 87.8% Midtown Manhattan, NY n/a n/a Baltimore, MD n/a n/a Richmond, VA n/a n/a Princeton/East Brunswick, NJ n/a n/a Greater San Francisco, CA 92.9% 100.0% Bucks County, PA 100.0% 100.0% --------- --------- Total Industrial Portfolio 90.4% 95.0% --------- --------- --------- --------- 18
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 GRAND TOTAL OF ALL IN-SERVICE PROPERTIES LEASE EXPIRATION ANNUALIZED RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES PERCENTAGE OF TOTAL EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS SQUARE FEET EXPIRING - ---------- --------------- --------------- -------------------- -------------------- 1999* 965,163 24,103,002 24,103,002 4.24% 2000 2,325,945 51,062,327 51,254,324 10.21% 2001 2,277,687 62,506,980 63,210,580 10.00% 2002 2,349,102 81,738,141 82,894,262 10.32% 2003 1,745,373 47,070,285 48,298,084 7.66% 2004 2,178,436 62,908,887 67,280,617 9.57% 2005 1,532,910 40,237,923 43,462,666 6.73% 2006 2,687,541 82,841,036 91,087,496 11.80% 2007 2,064,092 72,535,933 72,358,876 9.06% Thereafter 4,646,357 141,423,005 161,394,880 20.40% * July 1, 1999 through December 31, 1999 OCCUPANCY BY LOCATION 30-JUN-99 30-JUN-98 --------- --------- Greater Boston, MA 96.9% 98.5% Greater Washington, D.C 96.1% 98.6% Midtown Manhattan, NY 99.9% 97.8% Baltimore, MD 100.0% 99.7% Richmond, VA 96.2% 97.4% Princeton/East Brunswick, NJ 99.8% 100.0% Greater San Francisco, CA 98.0% 98.8% Bucks County, PA 100.0% 100.0% --------- --------- Total Portfolio 97.6% 98.5% --------- --------- --------- --------- 19
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 HOTEL PERFORMANCE SAME PROPERTY HOTELS Long Wharf Marriott - Boston SECOND QUARTER SECOND QUARTER PERCENT YTD YTD PERCENT 1999 1998 CHANGE 1999 1998 CHANGE Occupancy 88.00% 88.20% -0.23% 86.80% 87.70% -1.0% Average Daily Rate $246.09 $245.27 0.33% $218.06 $210.66 3.5% REVPAR $216.56 $216.33 0.11% $189.28 $184.75 2.5% Cambridge Center Marriott SECOND QUARTER SECOND QUARTER PERCENT YTD YTD PERCENT 1999 1998 CHANGE 1999 1998 CHANGE Occupancy 85.50% 89.20% -4.15% 84.10% 83.20% 1.1% Average Daily Rate $198.18 $193.69 2.32% $178.81 $176.46 1.3% REVPAR $169.44 $172.77 -1.93% $150.38 $146.81 2.4% Total Same Property Hotel Performance SECOND QUARTER SECOND QUARTER PERCENT YTD YTD PERCENT 1999 1998 CHANGE 1999 1998 CHANGE Occupancy 86.71% 88.70% -2.24% 85.40% 85.40% 0.0% Average Daily Rate $221.30 $218.46 1.30% $197.75 $192.96 2.5% REVPAR $192.18 $193.68 -0.77% $169.15 $165.12 2.4% NEWLY PLACED-IN-SERVICE HOTEL Residence Inn by Marriott SECOND QUARTER SECOND QUARTER PERCENT YTD YTD PERCENT 1999 1998 CHANGE 1999 1998 CHANGE Occupancy 84.40% N/A N/A 77.80% N/A N/A Average Daily Rate $153.36 N/A N/A $146.98 N/A N/A REVPAR $129.44 N/A N/A $114.35 N/A N/A 20
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 SAME PROPERTY PERFORMANCE OFFICE, R&D, INDUSTRIAL AND HOTEL PROPERTIES OFFICE R&D INDUSTRIAL HOTEL GARAGE TOTAL Number of Properties 43 31 9 2 1 86 Square feet 10,002,668 2,011,145 925,274 750,400 332,442 14,021,929 Percent of in-service properties 47.6% 97.1% 100.0% 80.0% 100% 55.8% Occupancy @ 6/30/98 98.7% 98.6% 95.0% -- -- 98.4% Occupancy @ 6/30/99 98.7% 96.8% 90.4% -- -- 97.8% Percent change from 2nd quarter 1999 over 2nd quarter 1998: Revenue 4.1% 4.4% 2.7% 5.1% 17.8% 4.3% Expense 6.0% 8.3% 28.0% 15.0% 69.7% 6.9% Net Operating Income 3.4% 3.4% -4.7% 3.7% -2.3% 3.3% SAME PROPERTY LEASE ANALYSIS - QUARTER ENDED JUNE 30, 1999 OFFICE R&D INDUSTRIAL TOTAL Vacant space available @ 4/1/99 (sf) 71,816 10,929 98,972 181,717 Square footage of leases expiring or terminated 4/1/99-6/30/99 286,452 67,119 83,608 437,179 ------- ------- ------- -------- Total space for lease (sf) 358,268 78,048 182,580 618,896 ------- ------- ------- -------- New tenants (sf) 144,336 3,500 93,933 241,769 Renewals (sf) 82,426 10,280 -- 92,706 ------- ------- ------- -------- Total space leased (sf) 226,762 13,780 93,933 334,475 ------- ------- ------- -------- ------- ------- ------- -------- Space available @ 6/30/99 (sf) 131,506 64,268 88,647 284,421 ------- ------- ------- -------- ------- ------- ------- -------- Net increase (decrease) in leased space (sf) (59,690) (53,339) 10,325 (102,704) Average lease term (months) 31 22 99 49 2nd generation TI/Comm PSF $7.00 $1.37 $12.40 $8.28 Increase in 2nd generation net rents (2) 19.5% 30.6% 22.3% 20.3% (1) For this table, Funds from Operations is equal to GAAP basis property NOI which includes the effect of straight-line rent and excludes any deduction for interest expense. (2) Represents increase in net rents on a "cash to cash" basis. (Actual net rent at time of expiration vs. initial net rent of new lease.) 21
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 ALL "IN-SERVICE" PROPERTIES - QUARTER ENDED JUNE 30, 1999 OFFICE R&D INDUSTRIAL TOTAL ------ --- ---------- ----- Vacant space available @ 4/1/99 (sf) 323,854 20,991 98,972 443,817 Vacant space from new acquisitions and development 53,424 -- -- 53,424 Square footage of leases expiring or terminated 4/1/99-6/30/99 759,508 67,119 83,608 910,235 ---------- ---------- ---------- ---------- Total space for lease (sf) 1,136,786 88,110 182,580 1,407,476 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- New tenants (sf) 426,913 3,500 93,933 524,346 Renewals (sf) 292,280 10,280 -- 302,560 ---------- ---------- ---------- ---------- Total space leased (sf) 719,193 13,780 93,933 826,906 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Space available @ 6/30/99 (sf) 417,593 74,330 88,647 580,570 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net increase/(decrease) in leased space (sf) (93,739) (53,339) 10,325 (136,753) Average lease term (months) 47 22 99 52 2nd generation TI/Comm PSF $ 7.22 $ 1.37 $ 12.40 $ 7.71 Increase in 2nd generation net rents (1) 16.4% 30.6% 22.3% 17.1% (1) Represents increase in net rents on a "cash to cash" basis (actual net rent at time of expiration vs. initial net rent of new lease). 22
BOSTON PROPERTIES, INC. SECOND QUARTER 1999 HISTORICALLY GENERATED CAPITAL EXPENDITURES, TENANT IMPROVEMENT COSTS AND LEASING COMMISSIONS HISTORICAL CAPITAL EXPENDITURES 1/1-6/30 1993 1994 1995 1996 1997 1998 1999 ------ ------ ------ ------ ------ ------ ------ Recurring capital expenditures $1,547 $1,812 $1,618 $1,083 $1,125 $3,543 $4,126 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Hotel improvements, equipment upgrades and replacements $ 836 $1,917 $4,420 $3,041 $2,625 $3,872 $1,001 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ 2ND GENERATION TENANT IMPROVEMENTS AND LEASING COMMISSIONS 1/1-6/30 1993 1994 1995 1996 1997 1998 1999 --------- ----------- ------- -------- ---------- -------- ---------- Office Square feet 451,295 690,459 768,459 970,072 1,016,427 648,291 1,055,506 --------- ----------- ------- -------- ---------- -------- ---------- Tenant improvement and lease commissions p.s.f $ 8.45 $ 9.45 $ 10.66 $ 11.40 $ 10.83 $ 9.82 $ 9.81 --------- ----------- ------- -------- ---------- -------- ---------- R&D Square feet 166,957 276,332 177,073 337,676 169,878 113,428 27,001 --------- ----------- ------- -------- ---------- -------- ---------- Tenant improvement and lease commissions p.s.f $ 5.53 $ 0.68 $ 6.99 $ 10.45 $ 2.22 $ 3.32 $ 1.65 --------- ----------- ------- -------- ---------- -------- ---------- Industrial Square feet 241,500 132,521 308,388 128,148 258,795 320,608 93,933 --------- ----------- ------- -------- ---------- -------- ---------- Tenant improvement and lease commissions p.s.f $ 0.28 $ 3.32 $ 1.00 $ 1.71 $ 0.99 $ 1.13 $ 12.40 --------- ----------- ------- -------- ---------- -------- ---------- Average tenant improvement and lease commission p.s.f $ 5.59 $ 6.51 $ 7.77 $ 10.31 $ 8.06 $ 6.57 $ 9.83 --------- ----------- ------- -------- ---------- -------- ---------- --------- ----------- ------- -------- ---------- -------- ---------- 23
VALUE CREATION PIPELINE - ACQUISITIONS/REPOSITIONING AS OF JUNE 30, 1999 ANTICIPATED INITIAL FUTURE TOTAL CURRENT PROPERTY DATE ACQUIRED SQUARE FEET INVESTMENT INVESTMENT INVESTMENT OCCUPANCY --------- -------------- -------------- -------------- --- ACQUISITIONS Class A Office Buildings Embarcadero Center Nov-98/Feb-99 4,009,536 $1,216,000,000 $ 37,710,000 $1,253,710,000 98% Sumner Square Mar-99 205,391 32,600,000 3,500,000 36,100,000 67% 510 Carnegie Center Apr-99 234,160 48,000,000 -- 48,000,000 100% --------- -------------- -------------- -------------- --- Total Value Creation Pipeline - Acquisitions 4,449,087 $1,296,600,000 $ 41,210,000 $1,337,810,000 97% --------- -------------- -------------- -------------- --- --------- -------------- -------------- -------------- --- REPOSITIONS PLACED IN SERVICE DURING 1999 ANTICIPATED DATE PLACED INITIAL ADDITIONAL TOTAL PERCENT IN SERVICE SQUARE FEET INVESTMENT COSTS TO DATE INVESTMENT LEASED ---------- ----------- ---------- ------------- ---------- ------ CLASS A OFFICE BUILDING 1301 New York Avenue Feb-99 177,249 $28,000,000 $11,830,928 $46,200,000 100% 24
VALUE CREATION PIPELINE - CONSTRUCTION IN PROGRESS AS OF JUNE 30, 1999 Estimated Placed Anticipated In Service # of Square Investment Total Percentage Development Properties Date Location Buildings feet to Date Investment Leased (3) ---------------------- ---------- -------------- --------- --------- ------------ ------------- ---------- Class A Office Buildings 181 Spring Street Q41999 Lexington, MA 1 53,306 10,343,034 12,000,000 0% One Freedom Square (25% ownership) Q4 1999 Reston, VA 1 406,980 14,129,838 19,200,000(1) 76% 502 Carnegie Center Q4 1999 Princeton, NJ 1 114,910 11,872,808 19,300,000 21% Orbital Sciences Phase I - Building 1 & 2 Q2 2000 Loudon, VA 2 185,028 5,887,181 33,100,000 100% Market Square North (50% ownership) Q4 2000 Washington, DC 1 409,843 45,396,711 70,900,000(2) 39% New Dominion Tech Park - Building 1 Q4 2000 Herndon, VA 1 235,201 6,204,992 48,800,000 100% 111 Huntington Avenue - Prudential Center Q3 2001 Boston, MA 1 890,000 34,752,933 290,000,000 28%(4) --------- --------- ------------ ------------- --- Total Development Properties 8 2,295,268 $128,587,497 $ 493,300,000 51% --------- --------- ------------ ------------- --- --------- --------- ------------ ------------- --- DEVELOPMENTS PLACED-IN-SERVICE DURING 1999 PLACED IN SERVICE # OF INVESTMENT TOTAL PERCENTAGE DATE LOCATION BUILDINGS SQUARE FEET TO DATE INVESTMENT LEASED (3) ---------- -------- --------- ----------- ---------- ---------- ---------- Class A Office Buildings One and Two Reston Overlook (25% ownership) Q1-Q2 1999 Reston, VA 2 444,286 $ 16,114,171 $ 18,100,000(1) 100% 200 West Street Q2 1999 Waltham, MA 1 248,341 40,003,400 43,400,000 95% Eight Cambridge Center Q2 1999 Cambridge, MA 1 177,226 23,754,529 26,000,000 100% The Arboretum Q2 1999 Reston, VA 1 95,584 13,435,420 16,200,000 100% Hotels Residence Inn by Marriott Q1 1999 Cambridge, MA 1 187,474 26,789,664 32,000,000 n/a -------- ------- ---------- ---------- --------- Total 6 1,152,911 $ 120,097,184 $ 135,700,000 99% -------- ------- ---------- ---------- --------- -------- ------- ---------- ---------- --------- (1) Represents 25% of the total anticipated project-level investment. (2) Represents 50% of the total anticipated project-level investment which includes residential. (3) as of July 22, 1999. (4) 30% of available office space. 25
VALUE CREATION PIPELINE - OWNED LAND PARCELS as of June 30, 1999 NO. OF DEVELOPABLE LOCATION PARCELS ACREAGE SQUARE FEET -------- ------- ------- ----------- Dulles, VA 6 91.1 1,200,000 Rockville, MD 7 128.3 2,331,000 Reston, VA 2 8.8 775,000 Herndon, VA 1 17.0 214,799 Andover, MA 2 27.0 290,000 Springfield, VA 3 9.4 130,000 Waltham, MA 4 32.0 418,000 Boston, MA 4 2.5 710,000 -- ----- --------- 29 316.1 6,068,799 -- ----- --------- -- ----- --------- VALUE CREATION PIPELINE - LAND PURCHASE OPTIONS as of June 30, 1999 NO. OF DEVELOPABLE LOCATION PARCELS SQUARE FEET -------- ------- ----------- Princeton, NJ 15 158.6 1,985,900 Cambridge, MA 1 2.6 209,000 New York, NY 2 1.1 2,300,000 -- ----- --------- 18 162.3 4,494,900 -- ----- --------- -- ----- --------- 26
BOSTON PROPERIES, INC. SECOND QUARTER 1999 ACQUISITION PROPERTY PROFILE PROPERTY NAME: 510 Carnegie Center PRODUCT TYPE: Class A Office Building LOCATION: Princeton, NJ DESCRIPTION: A six-story Class A office building located in the Carnegie Center complex. SIZE: 234,160 square feet YEAR CONSTRUCTED: 1998 PURCHASE PRICE: $48.0 million CLOSING DATE: April 30, 1999 FUTURE INVESTMENT: $- OCCUPANCY LEVEL: 100% NUMBER OF TENANTS: 1 FUNDING SOURCE: Cash, Preferred Operating Partnership Units, and Assumption of Debt LARGEST TENANT: COMPANY: Raytheon SIZE: 234,160 sq. ft. LEASE EXPIRATION: 08/31/13 27
BOSTON PROPERTIES, INC. 800 BOYLSTON STREET, SUITE 400 BOSTON, MA 02199 (NYSE: BXP) AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD Elaine M. Quinlan Marianne Stewart - General Info. (212) 661-8030 Director of Investor Relations Claire Koeneman - Analyst (312) 266-7800 617-236-3300 Judith Sylk-Siegel - Media (212) 661-8030 FOR IMMEDIATE RELEASE: July 27, 1999 BOSTON PROPERTIES, INC. ANNOUNCES SECOND QUARTER 1999 RESULTS BOSTON, MA, JULY 27, 1999 - Boston Properties, Inc. (NYSE: BXP) today reported results for the second quarter ended June 30, 1999. Funds from Operations (FFO) for the quarter ended June 30, 1999 were approximately $48.7 million, or $0.74 per share basic and $0.72 per share diluted, compared to FFO of approximately $38.9 million, or $0.63 per share basic and diluted, for the quarter ended June 30, 1998. The weighted average number of basic and diluted shares outstanding totaled 65,533,924 and 79,329,377, respectively, for the quarter ended June 30, 1999 and 61,694,041 and 62,284,095, respectively, for the same quarter last year. FFO for the six months ended June 30, 1999 were approximately $94.3 million, or $1.46 per share basic and $1.42 per share diluted, compared to FFO of approximately $68.3 million, or $1.18 per share basic and $1.16 per share diluted, for the six months ended June 30, 1998. The weighted average number of basic and diluted shares outstanding totaled 64,539,307 and 77,562,965, respectively, for the six months ended June 30, 1999 and 58,009,458,and 58,613,375, respectively, for the same period last year. Revenues were approximately $191.6 million for the quarter and $379.3 million for the six months ended June 30, 1999, compared to revenues of approximately $108.0 million and $203.6 million for the same periods in 1998. Net income available to common shareholders for the quarter was approximately $27.2 million and $52.2 million for the six months ended June 30, 1999, compared to $29.9 million and $49.6 million for the same periods in 1998. Income before extraordinary gain per share for the quarter was $0.42 per share basic and $0.41 per share diluted, compared to $0.42 per share basic and diluted last year. Income before extraordinary
Boston Properties, Inc. Announces 2Q99 Results Page 2 gain per share for the six months ended June 30, 1999 was $0.81 per share basic and $0.80 per share diluted, compared to $0.79 per share basic and diluted for the same period last year. The reported results are unaudited and there can be no assurance that the results will not vary from the final information for the quarter ended June 30, 1999. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made. As of June 30, 1999, the Company's portfolio consisted of 127 properties comprising more than 33.4 million square feet, including eight properties under development totaling approximately 2.3 million square feet. The overall occupancy rate for the properties in service as of June 30, 1999 was 97.6%. Properties under development which were placed in service during the second quarter include: - - The Arboretum, a 95,584-square-foot Class A office building located in Reston, Va., which is currently 100% leased. - - Eight Cambridge Center, a 177,226-square-foot Class A office building located in Cambridge, Mass., which is currently 100% leased. - - 200 West Street, a 248,341-square-foot office building located in Waltham, Mass., which is currently 95% leased. Additional highlights of the second quarter include: - - Acquisition of 510 Carnegie Center, a 234,160-square-foot Class A office building in Princeton, N. J., for approximately $48.0 million, on April 30, 1999. - - Issuance of 4,000,000 shares of the Company's Common Stock resulting in net proceeds of approximately $141.0 million, on May 20, 1999. - - Acquisition of the remaining 50% interest in the development rights associated with 111 Huntington Avenue, a parcel of land located at the Prudential Center in Boston, Mass., which will support an 890,000-square-foot Class A office building, on May 24, 1999. Construction commenced on April 27, 1999. Transactions completed since the quarter ended June 30, 1999 include: - - Closing of mortgage financing secured by Eight Cambridge Center in Cambridge, Mass., in the amount of $29.0 million at a rate of 7.73%, maturing in July 2010, on July 7, 1999. - - Acquisition of 206 Carnegie Center, a 161,763-square-foot Class A office building in Princeton, N. J., for approximately $27.0 million, on July 9, 1999. - - Closing of mortgage financing secured by University Place in Cambridge, Mass., in the amount of $26.0 million at a rate of 6.94%, maturing in August 2021, on July 26, 1999. Boston Properties is a fully integrated, self-administered and self-managed real estate investment trust that develops, redevelops, acquires, manages, operates and owns a diverse portfolio of office, industrial and hotel properties. The Company is one of the largest owners and developers
Boston Properties, Inc. Announces 2Q99 Results Page 2 of office properties in the United States, concentrated in the Northeast Corridor from Virginia to Greater Boston and in downtown San Francisco. To receive Boston Properties' latest news and corporate developments via fax at no cost, please call 1-800-PRO-INFO; use Company code BXP. Visit the Company's web site at http://www.bostonproperties.com. Also see http://www.frbinc.com. THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE FEDERAL SECURITIES LAWS. FORWARD-LOOKING STATEMENTS ARE INHERENTLY SUBJECT TO RISKS AND UNCERTAINTIES, MANY OF WHICH CANNOT BE PREDICTED WITH ACCURACY. ACQUISITIONS THAT ARE PURSUED BY BOSTON PROPERTIES MAY NOT BE CONSUMMATED FOR A VARIETY OF REASONS, INCLUDING A FAILURE TO REACH AGREEMENT WITH THE SELLING PARTY REGARDING THE ACQUISITION PRICE OR OTHER TERMS OF A CONTRIBUTION OR ACQUISITION AGREEMENT. AGREEMENTS THAT THE COMPANY ENTERS INTO MAY BE TERMINATED FOR A VARIETY OF REASONS, INCLUDING A FAILURE BY THE COMPANY OR THE OTHER PARTY TO FULFILL ALL CONDITIONS REQUIRED FOR CONSUMMATION OF THE AGREEMENTS. Financial tables follow. ###
BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except for per share amounts) THREE MONTHS ENDED SIX MONTHS ENDED ------------------------- ------------------------- JUNE 30, JUNE 30, JUNE 30, JUNE 30, 1999 1998 1999 1998 --------- --------- --------- --------- Revenue Rental: Base rent $ 158,070 $ 87,806 $ 309,679 $ 167,075 Recoveries from tenants 17,252 9,805 34,666 19,362 Parking and other 12,087 1,595 23,011 2,706 --------- --------- --------- --------- Total rental revenue 187,409 99,206 367,356 189,143 Development and management services 3,611 4,383 7,658 6,159 Interest and other 620 4,452 4,266 8,341 --------- --------- --------- --------- Total revenue 191,640 108,041 379,280 203,643 --------- --------- --------- --------- Expenses Operating 60,306 27,403 117,656 53,933 General and administrative 7,352 5,800 13,962 10,621 Interest 49,219 23,814 99,678 48,743 Depreciation and amortization 29,443 16,594 57,237 29,689 --------- --------- --------- --------- Total expenses 146,320 73,611 288,533 142,986 --------- --------- --------- --------- Income before minority interests and joint venture income 45,320 34,430 90,747 60,657 Minority interests in property partnerships (139) (106) (4,294) (229) Income from unconsolidated joint venture 229 -- 442 -- --------- --------- --------- --------- Income before minority interest in Operating Partnership 45,410 34,324 86,895 60,428 Minority interest in Operating Partnership (16,505) (7,967) (32,217) (14,440) --------- --------- --------- --------- Income before preferred dividend 28,905 26,357 54,678 45,988 Preferred dividend (1,682) -- (2,521) -- --------- --------- --------- --------- Income before extraordinary gain 27,223 26,357 52,157 45,988 Extraordinary gain, net -- 3,564 -- 3,564 --------- --------- --------- --------- Net income available to common shareholders $ 27,223 $ 29,921 $ 52,157 $ 49,552 --------- --------- --------- --------- --------- --------- --------- --------- Basic earnings per share: Income before extraordinary gain $ 0.42 $ 0.42 $ 0.81 $ 0.79 Extraordinary gain, net -- 0.06 -- 0.06 --------- --------- --------- --------- Net income available to common shareholders $ 0.42 $ 0.48 $ 0.81 $ 0.85 --------- --------- --------- --------- --------- --------- --------- --------- Weighted average number of common shares outstanding 65,534 61,694 64,539 58,009 --------- --------- --------- --------- --------- --------- --------- --------- Diluted earnings per share: Income before extraordinary gain $ 0.41 $ 0.42 $ 0.80 $ 0.79 Extraordinary gain, net -- 0.06 -- 0.06 --------- --------- --------- --------- Net income available to common shareholders $ 0.41 $ 0.48 $ 0.80 $ 0.85 --------- --------- --------- --------- --------- --------- --------- --------- Weighted average number of common and common equivalent shares outstanding 66,337 62,284 65,161 58,613 --------- --------- --------- --------- --------- --------- --------- ---------
BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS JUNE 30, DECEMBER 31, 1999 1998 ----------- ----------- (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AMOUNTS) ASSETS Real estate: $ 5,127,469 $ 4,917,193 Less: accumulated depreciation (411,705) (357,384) ----------- ----------- Total real estate 4,715,764 4,559,809 Cash and cash equivalents 32,225 12,166 Notes receivable -- 420,143 Escrows 24,082 19,014 Tenant and other receivables, net 53,059 40,830 Accrued rental income, net 72,535 64,251 Deferred charges, net 50,946 46,029 Prepaid expenses and other assets 28,142 26,058 Investments in joint ventures 42,077 46,787 ----------- ----------- Total assets $ 5,018,830 $ 5,235,087 ----------- ----------- ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Mortgage notes payable $ 2,799,507 $ 2,653,581 Notes payable -- 420,143 Unsecured line of credit 142,000 15,000 Accounts payable and accrued expenses 61,860 42,897 Dividends payable 45,559 40,494 Accrued interest payable 7,837 7,307 Other liabilities 22,946 27,950 ----------- ----------- Total liabilities 3,079,709 3,207,372 ----------- ----------- Commitments and contingencies -- -- Minority interests 781,999 1,079,234 Series A Convertible Redeemable Preferred Stock, liquidation preference $50.00 per share, 2,000,000 shares issued and outstanding 100,000 -- Stockholders' equity: Excess stock, $.01 par value, 150,000,000 shares authorized, none issued or outstanding -- -- Common stock, $.01 par value, 250,000,000 shares authorized, 67,893,386 and 63,527,819 issued and outstanding in 1999 and 1998, respectively 678 635 Additional paid-in capital 1,068,016 955,711 Dividends in excess of earnings (11,572) (7,865) ----------- ----------- Total stockholders' equity 1,057,122 948,481 ----------- ----------- Total liabilities and stockholders' equity $ 5,018,830 $ 5,235,087 ----------- ----------- ----------- -----------
BOSTON PROPERTIES, INC. Funds from Operations (unaudited and in thousands, except for per share amounts) THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ----------------------- ----------------------- 1999 1998 1999 1998 --------- --------- --------- -------- Income before minority interests $ 45,320 $ 34,430 $ 90,747 $ 60,657 Add: Real estate depreciation and amortization 29,238 16,415 56,787 29,359 Income from unconsolidated joint venture 229 -- 442 -- Less: Minority property partnership's share of Funds from Operations (128) (138) (3,291) (282) Preferred dividends and distributions (8,293) -- (15,505) -- --------- --------- --------- -------- Funds from operations $ 66,366 $ 50,707 $ 129,180 $ 89,734 --------- --------- --------- -------- --------- --------- --------- -------- Funds from operations available to common shareholders $ 48,673 $ 38,938 $ 94,343 $ 68,287 --------- --------- --------- -------- --------- --------- --------- -------- Weighted average shares outstanding - basic 65,534 61,694 64,539 58,009 --------- --------- --------- -------- --------- --------- --------- -------- Per share - basic $ 0.74 $ 0.63 $ 1.46 $ 1.18 --------- --------- --------- -------- --------- --------- --------- -------- Weighted average shares outstanding - diluted 79,329 62,284 77,563 58,613 --------- --------- --------- -------- --------- --------- --------- -------- Per share - diluted $ 0.72 $ 0.63 $ 1.42 $ 1.16 --------- --------- --------- -------- --------- --------- --------- --------
BOSTON PROPERTIES, INC PORTFOLIO OCCUPANCY Occupancy by Location June 30, 1999 December 31, 1998 -------------- ----------------- Greater Boston 96.9% 97.0% Greater Washington, D.C. 96.1% 98.5% Midtown Manhattan 99.9% 99.9% Baltimore, MD 100.0% 99.8% Richmond, VA 96.2% 98.8% Princeton/East Brunswick, NJ 99.8% 98.7% Greater San Francisco 98.0% 98.5% Bucks County, PA 100.0% 100.0% -------------- ----------------- Total Portfolio 97.6% 98.4% -------------- ----------------- -------------- ----------------- Occupancy by Type June 30, 1999 December 31, 1998 -------------- ------------------ Class A Office Portfolio 98.0% 98.8% R&D Portfolio 96.4% 99.2% Industrial Portfolio 90.4% 89.3% -------------- ------------------ Total Portfolio 97.6% 98.4% -------------- ------------------ -------------- ------------------