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): OCTOBER 23, 2001 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.) 111 HUNTINGTON AVENUE 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 October 23, 2001 announcing the Company's results for the third quarter ended September 30, 2001, 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 September 30, 2001. 99.2 The Boston Properties, Inc. press release dated October 23, 2001 for the quarter ended September 30, 2001.
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: October 23, 2001 BOSTON PROPERTIES, INC. /s/ Douglas T. Linde -------------------------------------- By: Douglas T. Linde Chief Financial Officer
EXHIBIT 99.1 BOSTON PROPERTIES, INC. Supplemental Operating and Financial Data for the Quarter Ended September 30, 2001
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 INDEX Page Page Company Background 3 Office/Technical Properties - Lease Expiration Roll Out 25 Investor Information 4-5 Industrial Properties - Lease Expiration Roll Out 26 Financial Highlights 6 Retail Properties - Lease Expiration Roll Out 27 Consolidated Balance Sheets 7 Grand Total - Office, Office/Technical, Industrial Consolidated Income Statements 8 and Retail Properties 28 Boston Area Lease Expiration Roll Out 29 Funds From Operations 9 Washington DC Area Lease Expiration Roll Out 30 Financial Ratios 10 San Francisco Area Lease Expiration Roll Out 31 Capital Structure 11 New York Area Lease Expiration Roll Out 32 Debt Analysis 12-14 Princeton Area Lease Expiration Roll Out 33 Joint Ventures 15 Other Area Lease Expiration Roll Out 34 Portfolio Overview - Square Footage 16 Hotel Performance 35 Property Listing 17-20 Same Property Performance 36 Top 20 Tenants 21 "In-Service" Property Performance 37 Portfolio Overview - FFO 22 Capital Expenditures 38 Occupancy Analysis 23 Value Creation Pipeline - Acquisitions/Dispositions 39 Office Properties - Lease Expiration Roll Out 24 Value Creation Pipeline - Development 40 Value Creation Pipeline - Land Parcels 41 2
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 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 Class A office properties in the United States, concentrated in four core markets - Boston, Midtown Manhattan, Washington DC, and 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. On October 31, 2000, Boston Properties successfully completed an additional public offering resulting in 17,110,000 shares (including the underwriters' over-allotment) being sold at $39.0625 per share for a total offering of $668,359,000. 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, office/technical 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 47 properties adding approximately 17.7 million square feet to its portfolio, representing an investment of approximately $4.7 billion, and the Company has delivered 28 development properties adding approximately 4.2 million square feet to its portfolio, representing an investment of approximately $597.7 million. In addition, the Company is constructing 13 office properties for a total anticipated investment of approximately $1.9 billion. The Company owns or controls land where it can develop an additional 9.2 million square feet. 3
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 INVESTOR INFORMATION 111 Huntington Avenue Boston, MA 02199-7610 (617) 236-3300 (617) 236-3311 (fax) Key Employees: Mortimer B. Zuckerman Chairman of the Board Edward H. Linde President, CEO and Director Robert E. Burke Executive Vice President, Operations Douglas T. Linde Senior Vice President, CFO and Treasurer TIMING Quarterly results for 2001 will be announced according to the following anticipated schedule: Year End Early February 4
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 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 (based on New York Stock Exchange closing prices): ============================================================================================================================= 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 2001 2001 2001 2000 ----------- ----------- ----------- ----------- High Price $41.2600 $41.0600 $43.3125 $44.7500 Low Price $36.2000 $36.4700 $37.9200 $38.8750 Closing Price $38.1300 $40.9000 $38.4500 $43.5000 Dividends per share - annualized $2.32 $2.32 $2.12 $2.12 Closing dividend yield - annualized 6.08% 5.67% 5.51% 4.87% Closing shares, common units and preferred units (if converted) outstanding (thousands) 124,644 124,644 124,240 124,138 Closing market value of shares and units outstanding (thousands) $4,752,676 $5,097,940 $4,777,028 $5,400,003 ============================================================================================================================= 5
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 FINANCIAL HIGHLIGHTS (unaudited and in thousands) ================================================================================================================================== Three Months Ended --------------------------------------------------------- September 30, June 30, March 31, December 31, 2001 2001 2001 2000 ------------- -------- --------- ------------ INCOME ITEMS: Revenue $264,714 $256,269 $233,456 $228,527 Net straight line rent $ 6,400 $ 6,487 $ 5,978 $ 2,608 Lease termination fees $ 4,857 $ 2,458 $ 1,163 $ 916 Capitalized interest $ 14,740 $ 15,800 $ 16,098 $ 12,812 Net Income available to common shareholders before net derivative losses (SFAS No.133) $ 54,923 $ 52,887 $ 48,058 $ 43,235 Funds from Operations (FFO) before net derivative losses (SFAS No.133) - basic $106,108 $100,124 $ 98,730 $ 93,158 Company's share $ 86,627 $ 81,410 $ 79,201 $ 71,888 FFO before net derivative losses (SFAS 133) per share - basic $ 0.96 $ 0.90 $ 0.89 $ 0.89 FFO before net derivative losses (SFAS 133) per share - diluted $ 0.91 $ 0.86 $ 0.85 $ 0.85 Dividends per share $ 0.58 $ 0.58 $ 0.53 $ 0.53 Funds available for distribution (FAD)(1) $ 73,157 $ 80,335 $ 78,835 $ 72,756 RATIOS: Interest Coverage Ratio (excluding capitalized interest) 2.96 2.98 3.26 3.05 Interest Coverage Ratio (including capitalized interest) 2.37 2.32 2.43 2.43 FFO Payout Ratio 63.74% 67.44% 62.35% 62.35% FAD Payout Ratio 88.01% 79.95% 74.36% 80.49% ================================================================================================================================== ================================================================================================================================= September 30, June 30, March 31, December 31, 2001 2001 2001 2000 ------------- -------- --------- ------------ CAPITALIZATION: Total Debt $4,245,433 $4,177,670 $3,450,347 $3,414,891 Total Common Shares Outstanding @ Quarter End 90,720 90,351 89,701 86,630 Total Preferred Shares Outstanding @ Quarter End (if converted) 2,625 2,625 2,625 2,625 Total Common Units Outstanding @ Quarter End 20,288 20,382 20,903 23,862 Total Preferred Units Outstanding @ Quarter End (if converted) 11,011 11,011 11,011 11,021 Price @ Quarter End $ 38.1300 $ 40.9000 $ 38.4500 $ 43.5000 Equity Value @ Quarter End $4,752,676 $5,086,692 $4,777,028 $5,400,003 Total Market Capitalization $8,998,109 $9,264,362 $8,227,375 $8,814,894 Debt/Total Market Capitalization 47.18% 45.09% 41.94% 38.74% ================================================================================================================================= (1) FAD is defined as FFO after adjustments for second generation lease commissions and tenant improvements, recurring capital expenditures, straight line rents and nonrecurring charges. 6
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 CONSOLIDATED BALANCE SHEETS (in thousands) =================================================================================================================================== September 30, June 30, March 31, December 31, 2001 2001 2001 2000 (unaudited) (unaudited) (unaudited) ------------- ----------- ----------- ------------ ASSETS Real estate $ 6,147,265 $ 6,090,113 $ 5,280,149 $ 5,188,296 Development in progress 984,962 915,135 881,274 817,478 Land held for future development 165,753 160,729 123,232 107,005 Less accumulated depreciation (683,029) (647,881) (616,620) (586,719) ----------- ----------- ----------- ----------- Total real estate 6,614,951 6,518,096 5,668,035 5,526,060 Cash and cash equivalents 161,011 165,764 241,819 280,957 Escrows 20,901 31,577 29,861 85,561 Investments in securities 4,297 4,297 6,060 7,012 Tenant and other receivables, net 28,642 26,337 24,443 26,852 Accrued rental income, net 110,441 104,304 97,657 91,684 Deferred charges, net 104,370 100,804 76,209 77,319 Prepaid expenses and other assets 46,303 47,962 73,539 41,154 Investments in unconsolidated joint ventures 90,160 94,155 92,456 89,871 ----------- ----------- ----------- ----------- Total assets $ 7,181,076 $ 7,093,296 $ 6,310,079 $ 6,226,470 =========== =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Mortgage notes and bonds payable $ 4,245,433 $ 4,177,670 $ 3,450,347 $ 3,414,891 Unsecured Line of Credit -- -- -- -- Accounts payable and accrued expenses 71,716 61,248 58,542 57,338 Dividends and distributions payable 79,005 78,241 71,917 71,274 Interest rate contracts 32,136 19,045 19,774 -- Accrued interest payable 15,679 12,067 8,127 5,599 Other liabilities 52,969 53,365 56,943 51,926 ----------- ----------- ----------- ----------- Total liabilities 4,496,938 4,401,636 3,665,650 3,601,028 ----------- ----------- ----------- ----------- Commitments and contingencies -- -- -- -- ----------- ----------- ----------- ----------- Minority interests 844,957 851,868 821,575 877,715 ----------- ----------- ----------- ----------- Series A Convertible Redeemable Preferred Stock, liquidation preference $50.00 per share, 2,000,000 shares issued and outstanding 100,000 100,000 100,000 100,000 ----------- ----------- ----------- ----------- 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, 90,720,477, 90,350,510, 89,701,122 and 86,630,089 issued and outstanding, respectively 907 904 897 866 Additional paid-in capital 1,784,840 1,774,335 1,759,714 1,673,349 Dividends in excess of earnings (30,456) (19,193) (15,829) (13,895) Unearned compensation (2,242) (2,386) (2,531) (848) Accumulated other comprehensive loss (13,868) (13,868) (19,397) (11,745) ----------- ----------- ----------- ----------- Total stockholders' equity 1,739,181 1,739,792 1,722,854 1,647,727 ----------- ----------- ----------- ----------- Total liabilities and stockholders' equity $ 7,181,076 $ 7,093,296 $ 6,310,079 $ 6,226,470 =========== =========== =========== =========== =================================================================================================================================== 7
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 CONSOLIDATED INCOME STATEMENTS (in thousands, except for per share amounts) (unaudited) ============================================================================================================================= Three Months Ended ------------------------------------------------- 30-Sep-01 30-Jun-01 31-Mar-01 31-Dec-00 ---------- --------- ----------- ---------- Revenue: Rental Base Rent (1) $ 219,855 $ 208,071 $ 185,691 $ 183,319 Recoveries from tenants 27,473 27,266 26,178 23,736 Parking and other 12,965 13,533 13,746 12,797 --------- --------- --------- --------- Total rental revenue 260,293 248,870 225,615 219,852 Development and management services 2,805 3,110 3,397 3,405 Interest and other 1,616 4,289 4,444 5,270 --------- --------- --------- --------- Total revenue 264,714 256,269 233,456 228,527 --------- --------- --------- --------- Expenses: Operating 81,475 76,865 70,343 67,335 General and administrative 9,819 9,880 9,950 9,791 Interest (2) 59,936 55,870 47,853 50,854 Depreciation and amortization 38,518 36,675 34,740 36,088 Loss on investments in other companies -- 6,500 -- -- --------- --------- --------- --------- Total expenses 189,748 185,790 162,886 164,068 --------- --------- --------- --------- Income before net derivative losses (SFAS No.133), minority interests and income from unconsolidated joint ventures 74,966 70,479 70,570 64,459 Net derivative losses (SFAS No.133) (16,620) (4,733) (3,055) -- Minority interest in property partnerships 374 510 (255) (250) Income from unconsolidated joint ventures 997 717 1,127 402 --------- --------- --------- --------- Income before minority interest in Operating Partnership 59,717 66,973 68,387 64,611 Minority interest in Operating Partnership (3) (16,709) (18,138) (19,024) (19,472) --------- --------- --------- --------- Income before gain on sale of real estate 43,008 48,835 49,363 45,139 Gain on sale of real estate, net of minority interest -- 1,851 4,654 73 --------- --------- --------- --------- Income before cumulative effect of a change in accounting principle 43,008 50,686 54,017 45,212 Cumulative effect of a change in accounting principle, net of minority interest -- -- (6,767) -- --------- --------- --------- --------- Income before extraordinary item 43,008 50,686 47,250 45,212 Extraordinary loss, net -- -- -- (334) --------- --------- --------- --------- Income before preferred dividend 43,008 50,686 47,250 44,878 Preferred dividend (1,653) (1,648) (1,643) (1,643) --------- --------- --------- --------- Net income available to common shareholders $ 41,355 $ 49,038 $ 45,607 $ 43,235 ========= ========= ========= ========= INCOME PER SHARE OF COMMON STOCK Net income available to common shareholders per share - basic $ 0.46 $ 0.54 $ 0.51 $ 0.53 ========= ========= ========= ========= Net income available to common shareholders per share - diluted $ 0.45 $ 0.53 $ 0.50 $ 0.52 ========= ========= ========= ========= ============================================================================================================================= (1) Base Rent is reported on a straight-line basis over the terms of the respective leases. The impact of the straight-line rent adjustment increased revenue by $6,400, $6,487, $5,978 and $2,608 for the three months ended September 30, 2001, June 30, 2001, March 31, 2001 and December 31, 2000, respectively. (2) Excludes capitalized interest of $14,740, $15,800, $16,098 and $12,812 for the three months ended September 30, 2001, June 30, 2001, March 31, 2001 and December 31, 2000, respectively. (3) Equals minority interest percent of 18.36%, 18.69%, 19.78% and 22.83%, respectively of income before minority interest in Operating Partnership after deduction for preferred dividends and distributions. 8
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 FUNDS FROM OPERATIONS (in thousands, except for per share amounts) (unaudited) =================================================================================================================================== Three months ended ------------------------------------------------- 30-Sep-01 30-Jun-01 31-Mar-01 31-Dec-00 --------- --------- --------- --------- Income from operations before net derivative losses (SFAS No.133), minority interests and income from unconsolidated joint ventures $ 74,966 $ 70,479 $ 70,570 $ 64,459 Add: Real estate depreciation and amortization (1) 39,360 37,599 35,557 36,830 Income from unconsolidated joint ventures 997 717 1,127 402 Less: Net derivative losses (SFAS No.133) 16,620 4,733 3,055 -- Minority property partnership's share of funds from operations 832 411 303 287 Preferred dividends and distributions 8,383 8,260 8,221 8,246 -------- -------- -------- -------- Funds from Operations (FFO) 89,488 95,391 95,675 93,158 Add: Net derivative losses (SFAS No.133) 16,620 4,733 3,055 -- -------- -------- -------- -------- FFO before net derivative losses (SFAS No.133) $106,108 $100,124 $ 98,730 $ 93,158 ======== ======== ======== ======== FFO available to common shareholders before net derivative losses (SFAS No. 133) (2) $ 86,627 $ 81,410 $ 79,201 $ 71,888 ======== ======== ======== ======== FFO per share before net derivative losses (SFAS No.133) - basic $ 0.96 $ 0.90 $ 0.89 $ 0.89 ======== ======== ======== ======== Weighted average shares outstanding - basic 90,519 89,990 88,688 80,885 ======== ======== ======== ======== FFO per share before net derivative losses (SFAS No.133) - diluted $ 0.91 $ 0.86 $ 0.85 $ 0.85 ======== ======== ======== ======== FFO per share after net derivative losses (SFAS No.133) - diluted $ 0.78 $ 0.82 $ 0.83 $ 0.85 ======== ======== ======== ======== Weighted average shares outstanding - diluted 105,812 105,259 104,160 96,008 ======== ======== ======== ======== =================================================================================================================================== RECONCILIATION TO DILUTED FUNDS FROM OPERATIONS ================================================================================================================================ September 30, 2001 June 30, 2001 ------------------------------- ---------------------------- Income Shares Income Shares (Numerator) (Denominator) (Numerator) (Denominator) ---------- ------------ ---------- ------------ Basic FFO before net derivative losses (SFAS No.133) $106,108 110,876 $100,124 110,676 Effect of Dilutive Securities Convertible Preferred Units 6,730 11,011 6,612 11,011 Convertible Preferred Stock 1,653 2,625 1,648 2,625 Stock Options and other -- 1,657 -- 1,633 --------- -------- --------- -------- Diluted FFO before net derivative losses (SFAS No.133) $114,491 126,169 $108,384 125,945 ========= ======== ========= ======== Company's share of diluted FFO before net derivative losses (SFAS No.133) (3) $ 96,017 105,812 $ 90,581 105,259 ========= ======== ========= ======== FFO per share before net derivative losses (SFAS No.133) - basic $ 0.96 $ 0.90 ========= ========= FFO per share before net derivative losses (SFAS No.133) - diluted $ 0.91 $ 0.86 ========= ========= ================================================================================================================================ ================================================================================================================================= March 31, 2001 December 31, 2000 ---------------------------- ---------------------------- Income Shares Income Shares (Numerator) (Denominator) (Numerator) (Denominator) ---------- ------------ ---------- ------------- Basic FFO before net derivative losses (SFAS No.133) $ 98,730 110,556 $ 93,158 104,818 Effect of Dilutive Securities Convertible Preferred Units 6,578 11,011 6,603 10,370 Convertible Preferred Stock 1,643 2,625 1,643 2,625 Stock Options and other -- 1,837 -- 2,128 ---------- --------- -------- --------- Diluted FFO before net derivative losses (SFAS No.133) $106,951 126,029 $101,404 119,941 ========== ========= ======== ========= Company's share of diluted FFO before net derivative losses (SFAS No.133) (3) $ 88,379 104,160 $ 81,169 96,008 ========== ========= ======== ========= FFO per share before net derivative losses (SFAS No.133) - basic $ 0.89 $ 0.89 ========== ======== FFO per share before net derivative losses (SFAS No.133) - diluted $ 0.85 $ 0.85 ========== ======== ================================================================================================================================= (1) Real estate depreciation includes the Company's share of joint venture real estate depreciation of $1,394, $1,376, $1,260 and $1,189, less corporate related depreciation of $552, $452, $443 and $447, for the three months ended September 30, 2001, June 30, 2001, March 31, 2001, and December 31, 2000, respectively. (2) Based on weighted average shares for the quarter. Company's share for the quarter ended September 30, 2001, June 30, 2001, March 31, 2001, and December 31, 2000 was 81.64%, 81.31%, 80.22% and 77.17%, respectively. (3) Based on weighted average diluted shares for the quarter. Company's share for the quarter ended September 30, 2001, June 30, 2001, March 31, 2001 and December 31, 2000 was 83.87%, 83.58%, 82.65% and 80.05%, respectively. 9
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 FINANCIAL RATIOS ============================================================================================================================== Three months ended ----------------------------------------------- 9/30/2001 6/30/2001 3/31/2001 12/31/2000 --------- --------- --------- ---------- RATIOS COMPUTED FOR INDUSTRY COMPARISONS: OPERATIONAL RATIOS (1) Debt Service Coverage Ratio 2.54 2.54 2.74 2.56 (EBITDA + Income from Unconsolidated Joint Ventures)/ (Interest + Principal) Interest Coverage Ratio (excluding capitalized interest) 2.96 2.98 3.26 3.05 (EBITDA + Income from Unconsolidated Joint Venture)/Interest Interest Coverage Ratio (including capitalized interest) 2.37 2.32 2.43 2.43 (EBITDA + Income from Unconsolidated Joint Venture)/Interest Return on Shareholder's Equity 16.89% 16.06% 15.99% 17.50% (EBITDA/Average Equity (book value)) (%) Return on Real Estate Investments 10.56% 10.70% 10.95% 11.26% (EBITDA/Average Real Estate Investments (book value)) (%) Dividend Payout Ratio 63.74% 67.44% 62.35% 62.35% (Dividends Declared/FFO) (%) ============================================================================================================================== (1) EBITDA is equal to earnings before interest, taxes, depreciation and amortization. 10
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 CAPITAL STRUCTURE DEBT (in thousands) ========================================================================= AGGREGATE PRINCIPAL SEPTEMBER 30, 2001 ------------------- Mortgage Loans $4,245,433 Unsecured Line of Credit -- ---------- Total Debt $4,245,433 ========== ========================================================================== EQUITY (in thousands) =================================================================================================== Common Shares & Units Stock $ Value Outstanding Equivalents Equivalent (1) -------------- ----------- -------------- Common Stock 90,720 90,720 $3,459,154 Preferred Stock 2,000 2,625 100,091 Operating Partnership Units 20,288 20,288 773,581 Preferred Operating Partnership Units 9,346 11,011 419,849 ------- ---------- Total Equity 124,644 $4,752,676 ======= ========== Total Market Capitalization $8,998,109 ========== =================================================================================================== (1) Value based on September 30, 2001 closing price of $38.13. 11
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 DEBT ANALYSIS DEBT MATURITIES AND PRINCIPAL PAYMENTS (in thousands) =================================================================================================================================== YEAR 2001 (1) 2002 2003 2004 2005 THEREAFTER TOTAL ---- -------- ---- ---- ---- ---- ---------- ----- Amount $47,033 $257,712 $773,655 $288,723 $277,155 $2,601,155 $4,245,433 =================================================================================================================================== (1) Represents the period from October 1, 2001 through December 31, 2001. UNSECURED LINE OF CREDIT - DUE MARCH 31, 2003 (in thousands) ============================================================================================================ OUTSTANDING LETTERS OF REMAINING FACILITY @ 9/30/01 CREDIT CAPACITY -------- ----------- ---------- --------- $605,000 $ -- $4,270 $600,730 ============================================================================================================ UNSECURED AND SECURED DEBT ANALYSIS ============================================================================================================ WEIGHTED WEIGHTED AVERAGE % OF DEBT AVERAGE RATE MATURITY --------- ------------ ---------------- Unsecured Debt 0.00% 0.00% 1.5 years Secured Debt 100.00% 6.81% 5.9 years ------ ---- --------- Total Debt 100.00% 6.81% 5.9 years ====== ==== ========= ============================================================================================================ FLOATING AND FIXED RATE DEBT ANALYSIS ========================================================================================================== WEIGHTED WEIGHTED AVERAGE % OF DEBT AVERAGE RATE MATURITY --------- ------------ ---------------- Floating Rate Debt 18.50% 4.73% 1.7 years Fixed Rate Debt 81.50% 7.28% 6.9 years ------ ---- --------- Total Debt 100.00% 6.81% 5.9 years ====== ==== ========= ========================================================================================================== 12
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 DEBT ANALYSIS DEBT MATURITIES AND PRINCIPAL PAYMENTS (in thousands) =================================================================================================================================== Property 2001 (1) 2002 2003 2004 2005 Thereafter Total ------------------------------------------------ ---------- --------- -------- -------- -------- ----------- ------- Citigroup Center $ 1,283 $ 5,365 $ 5,763 $ 6,191 $ 6,651 $498,073 $523,326 Embarcadero Center One, Two and Federal Reserve 1,009 4,207 4,498 4,809 5,141 290,286 309,950 Prudential Center 635 4,020 4,299 4,591 4,919 270,580 289,044 280 Park Avenue 618 2,595 2,800 3,022 3,261 256,111 268,407 5 Times Square -- -- 257,009 -- -- -- 257,009 599 Lexington Avenue -- -- -- -- 225,000 -- 225,000 111 Huntington Avenue -- 159,673 -- -- -- -- 159,673 Embarcadero Center Four 748 3,098 3,315 3,544 3,797 138,118 152,620 875 Third Avenue 555 2,132 146,766 -- -- -- 149,453 Embarcadero Center Three 496 2,069 2,206 2,351 2,506 135,397 145,025 Times Square Tower -- -- -- 135,820 -- -- 135,820 Two Independence Square 321 1,285 113,808 -- -- -- 115,414 Riverfront Plaza 614 2,560 2,735 2,921 3,120 101,914 113,864 Democracy Center 407 1,703 1,828 1,961 2,103 98,407 106,409 Embarcadero Center West Tower 325 1,358 1,449 1,546 1,649 90,416 96,743 100 East Pratt Street 276 1,717 1,836 1,964 2,100 82,757 90,650 601 and 651 Gateway Boulevard 181 760 826 899 977 85,783 89,426 One Independence Square -- -- 75,000 -- -- -- 75,000 Reservoir Place 485 2,669 2,859 3,061 3,279 60,067 72,420 One & Two Reston Overlook 181 759 818 65,908 -- -- 67,666 2300 N Street -- -- 66,000 -- -- -- 66,000 202, 206 & 214 Carnegie Center 135 564 610 663 719 59,841 62,532 New Dominion Technology Park, Building 1 -- 61 102 91 654 56,702 57,610 Capital Gallery 283 1,191 1,293 1,404 1,524 50,651 56,346 504,506 & 508 Carnegie Center 143 910 979 1,052 1,136 43,450 47,670 =================================================================================================================================== (1) Represents the period from October 1, 2001 through December 31, 2001. 13
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 DEBT ANALYSIS DEBT MATURITIES AND PRINCIPAL PAYMENTS (CONTINUED) (in thousands) =================================================================================================================================== PROPERTY 2001 (1) 2002 2003 2004 2005 THEREAFTER TOTAL ------------------------------------ ---------- -------- -------- --------- -------- ------------- -------- Waltham Weston Corporate Center $ -- $ -- $ -- $ 38,926 $ -- -- $ 38,926 10 and 20 Burlington Mall Road 37,000 (2) -- -- -- -- -- 37,000 10 Cambridge Center 81 514 559 607 659 32,929 35,349 1301 New York Avenue 269 1,129 1,217 1,315 1,417 26,591 31,938 Sumner Square 107 447 481 518 557 28,180 30,290 Eight Cambridge Center 95 477 516 557 601 25,837 28,083 510 Carnegie Center 80 508 547 588 635 24,938 27,296 2600 Tower Oaks Boulevard -- 26,481 -- -- -- -- 26,481 Lockheed Martin Building 90 562 601 641 685 23,313 25,892 Orbital Sciences - Phase 1 70 25,644 -- -- -- -- 25,714 Quorum Office Park -- -- 25,615 -- -- -- 25,615 University Place 97 611 655 702 752 22,009 24,826 Reston Corporate Center 86 537 574 612 654 21,966 24,429 Orbital Sciences - Phase 2 -- -- 22,654 -- -- -- 22,654 191 Spring Street 61 374 407 443 482 20,773 22,540 Bedford Business Park 92 583 634 690 751 18,567 21,317 NIMA Building 74 465 497 530 566 19,034 21,166 Andover Office Park, Building One -- -- 14,191 -- -- -- 14,191 101 Carnegie Center 52 322 348 375 406 6,622 8,125 Montvale Center 35 146 160 173 189 6,762 7,465 302 Carnegie Center -- -- 6,969 -- -- -- 6,969 Hilltop Business Center 42 175 187 200 214 4,812 5,630 201 Carnegie Center 7 41 44 48 51 269 460 ------- -------- -------- -------- -------- ---------- ---------- $47,033 $257,712 $773,655 $288,723 $277,155 $2,601,155 $4,245,433 ======= ======== ======== ======== ======== ========== ========== (1) Represents the period from October 1, 2001 through December 31, 2001. (2) This loan was refinanced on October 1, 2001 with a new loan amount of $40.0 million maturing in 2011. 14
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 JOINT VENTURES (unaudited and in thousands) as of September 30, 2001 ==================================================================================================================== One Market 140 265 901 Freedom Square Metropolitan Kendrick Franklin Discovery Square North Square Street Street Square (2) -------- --------- ------------ -------- -------- ----------- Total Equity (1) $ 1,458 $ 14,334 $ 33,059 $ 5,888 $ 11,923 $ 6,401 Mortgage/Construction loans payable (1) $ 19,175 $ 49,548 $ 70,630 $ 14,229 $ 24,500 $ 18,686 BXP's ownership percentage 25.00% 50.00% 51.00% 25.00% 35.00% 50.00% ==================================================================================================================== Two Two New York Freedom Avenue (2) Square (2) Combined ---------- ----------- --------- Total Equity (1) $ 11,966 $ 5,131 $ 90,160 Mortgage/Construction loans payable (1) $ -- $ 15,540 $212,308 BXP's ownership percentage 25.00% 50.00% ==================================================================================================================== RESULTS OF OPERATIONS FOR THE UNCONSOLIDATED JOINT VENTURES for the three months ended september 30, 2001 ================================================================================================================================== One Market 140 265 Freedom Square Metropolitan Kendrick Franklin Discovery Square North Square Street Street (4) Square (2) ------- ------ ------------ -------- ---------- ---------- REVENUE Total revenue $ 3,913 $ 4,839 $ 5,744 $ 2,672 $ 2,660 $ -- ------- ------- ------- ------- ------- ------ EXPENSES Operating 910 1,624 1,729 441 926 -- Interest 1,493 1,910 2,876 1,080 328 -- Depreciation and amortization 652 629 1,325 395 405 -- ------- ------- ------- ------- ------- ------ Total expenses 3,055 4,163 5,930 1,916 1,659 -- ------- ------- ------- ------- ------- ------ Net income $ 858 $ 676 $ (186) $ 756 $ 1,001 $ -- ======= ======= ======= ======= ======= ====== BXP's ownership percentage 25.00% 50.00% 51.00% 25.00% 35.00% 50.00% ======= ======= ======= ======= ======= ====== BXP's share of net income $ 215 $ 338 $ (95) $ 189 $ 350 $ -- ======= ======= ======= ======= ======= ====== BXP's share of Funds from Operations $ 378 $ 653 $ 580 $ 288 $ 492 $ -- ======= ======= ======= ======= ======= ====== ================================================================================================================================== =================================================================================================================================== 901 Two New York Freedom Avenue (2) Square (2) Combined ---------- ---------- -------- REVENUE Total revenue $ -- $ -- $ 19,828 (3) ------ ----- --------- EXPENSES Operating -- -- 5,630 Interest -- -- 7,687 Depreciation and amortization -- -- 3,406 ------ ----- --------- Total expenses -- -- 16,723 ------ ----- --------- Net income $ -- $ -- $ 3,105 ====== ====== ========= BXP's ownership percentage 25.00% 50.00% ====== ====== ========= BXP's share of net income $ -- $ -- $ 997 ====== ====== ========= BXP's share of Funds from Operations $ -- $ -- $ 2,391 ====== ====== ========= ================================================================================================================================== (1) Represents the Company's share. (2) Property is currently under development. (3) The impact of the straight-line rent adjustment increased revenue by $1,231 for the three months ended September 30, 2001. (4) The Company is currently repositioning this property. 15
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 PORTFOLIO OVERVIEW - SQUARE FOOTAGE RENTABLE SQUARE FEET OF IN-SERVICE PROPERTIES BY LOCATION AND TYPE OF PROPERTY ================================================================================================================================== GEOGRAPHIC AREA OFFICE (1) OFFICE/TECHNICAL INDUSTRIAL TOTAL % OF TOTAL --------------- ---------- ---------------- ---------- ----- ---------- Greater Boston 6,382,608 (2) 545,206 169,273 7,097,087 24.65% Greater Washington 6,657,124 (3) 1,143,148 -- 7,800,272 27.09% Greater San Francisco 4,461,472 144,366 280,213 4,886,051 16.97% Midtown Manhattan 4,449,977 -- -- 4,449,977 15.45% Princeton/East Brunswick, NJ 2,325,093 -- -- 2,325,093 8.08% Baltimore, MD 1,174,629 -- -- 1,174,629 4.08% Richmond, VA 899,604 -- -- 899,604 3.12% Bucks County, PA -- -- 161,000 161,000 0.56% ---------- --------- ------- ---------- ------ 26,350,507 1,832,720 610,486 28,793,713 100.00% ========== ========= ======= ========== ====== % of Total 91.51% 6.37% 2.12% 100.00% ================================================================================================================================== 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 ====== ======== ================================================================================================================================== STRUCTURED PARKING ================================================================================================================================== NUMBER OF SQUARE SPACES FEET --------- ------ Total Structured Parking 17,645 6,017,423 ======= ========= ================================================================================================================================= (1) Includes retail square footage of approximately 1,000,000. (2) Includes 326,128 square feet at 265 Franklin Street which is 35% owned by Boston Properties and 380,987 square feet at 140 Kendrick Street which is 25% owned by Boston Properties. (3) Includes 410,308 square feet at One Freedom Square which is 25% owned by Boston Properties, 587,217 square feet at Metropolitan Square which is 51% owned by Boston Properties, and 401,279 square feet at Market Square North which is 50% owned by Boston Properties. 16
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 PROPERTY LISTING AS OF SEPTEMBER 30, 2001 =========================================================================================================================== NUMBER OF SUB MARKET BUILDINGS SQUARE FEET OCCUPIED % ---------- --------- ----------- --------- GREATER BOSTON Office The Prudential Center CBD Boston MA 3 2,152,129 94.1% 265 Franklin Street (35% ownership) CBD Boston MA 1 326,128 49.0 One Cambridge Center East Cambridge MA 1 215,385 98.1 Three Cambridge Center East Cambridge MA 1 107,484 100.0 Eight Cambridge Center East Cambridge MA 1 177,226 100.0 Ten Cambridge Center East Cambridge MA 1 152,664 100.0 Eleven Cambridge Center East Cambridge MA 1 79,616 100.0 University Place Mid-Cambridge MA 1 195,282 100.0 Reservoir Place Route 128 Mass Turnpike MA 1 529,835 83.4 204 Second Avenue Route 128 Mass Turnpike MA 1 40,974 100.0 140 Kendrick Street (25% ownership) Route 128 Mass Turnpike MA 3 380,987 100.0 170 Tracer Lane Route 128 Mass Turnpike MA 1 73,203 61.4 Waltham Office Center Route 128 Mass Turnpike MA 3 131,479 92.1 195 West Street Route 128 Mass Turnpike MA 1 63,500 100.0 200 West Street Route 128 Mass Turnpike MA 1 248,048 92.5 10 & 20 Burlington Mall Road Route 128 Northwest MA 2 156,416 85.7 Bedford Business Park Route 128 Northwest MA 1 90,000 100.0 32 Hartwell Avenue Route 128 Northwest MA 1 69,154 100.0 91 Hartwell Avenue Route 128 Northwest MA 1 122,135 100.0 92 Hayden Avenue Route 128 Northwest MA 1 31,100 100.0 100 Hayden Avenue Route 128 Northwest MA 1 55,924 100.0 33 Hayden Avenue Route 128 Northwest MA 1 79,564 100.0 Lexington Office Park Route 128 Northwest MA 2 167,293 100.0 191 Spring Street Route 128 Northwest MA 1 162,700 100.0 181 Spring Street Route 128 Northwest MA 1 53,595 100.0 201 Spring Street Route 128 Northwest MA 1 102,500 100.0 40 Shattuck Road Route 128 Northwest MA 1 119,499 83.3 Quorum Office Park Route 128 Northwest MA 1 129,959 100.0 Newport Office Park Route 128 South MA 1 168,829 100.0 ----------- ---------------------------- 37 6,382,608 92.4 ----------- ---------------------------- Office/Technical Fourteen Cambridge Center East Cambridge MA 1 67,362 100.0 Bedford Business Park Route 128 Northwest MA 2 383,704 100.0 17 Hartwell Avenue Route 128 Northwest MA 1 30,000 100.0 164 Lexington Road Route 128 Northwest MA 1 64,140 100.0 ----------- ---------------------------- 5 545,206 100.0 ----------- ---------------------------- Industrial 40-46 Harvard Street Route 128 Southwest MA 1 169,273 89.8 ----------- ---------------------------- Total Greater Boston: 43 7,097,087 92.9% ========================================= ============================================================================================================================= ============================================================================================================================= ANNUALIZED REVENUE PER OCCUPIED SF ----------- GREATER BOSTON Office The Prudential Center $ 37.62 265 Franklin Street (35% ownership) 56.79 One Cambridge Center 41.21 Three Cambridge Center 26.66 Eight Cambridge Center 29.77 Ten Cambridge Center 31.74 Eleven Cambridge Center 40.71 University Place 32.17 Reservoir Place 34.65 204 Second Avenue 26.46 140 Kendrick Street (25% ownership) 27.20 170 Tracer Lane 39.88 Waltham Office Center 28.54 195 West Street 46.01 200 West Street 31.97 10 & 20 Burlington Mall Road 31.52 Bedford Business Park 21.39 32 Hartwell Avenue 16.34 91 Hartwell Avenue 31.76 92 Hayden Avenue 21.78 100 Hayden Avenue 32.20 33 Hayden Avenue 24.89 Lexington Office Park 30.40 191 Spring Street 30.34 181 Spring Street 35.47 201 Spring Street 32.10 40 Shattuck Road 25.23 Quorum Office Park 18.65 Newport Office Park 23.87 ------------ $ 33.66 ------------ Office/Technical Fourteen Cambridge Center 19.32 Bedford Business Park 14.40 17 Hartwell Avenue 10.25 164 Lexington Road 9.31 ------------ $ 14.18 ------------ Industrial 40-46 Harvard Street $ 7.49 ------------ ============================================================================================================================= 17
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 PROPERTY LISTING AS OF SEPTEMBER 30, 2001 =================================================================================================================================== NUMBER OF SUB MARKET BUILDINGS SQUARE FEET OCCUPIED % ---------- --------- ----------- ---------- GREATER WASHINGTON, DC Office 2300 N Street West End Washington DC 1 276,930 100.0% One Independence Square Southwest Washington DC 1 337,794 100.0 Two Independence Square Southwest Washington DC 1 579,665 100.0 Capital Gallery Southwest Washington DC 1 396,894 100.0 500 E Street, N. W. Southwest Washington DC 1 242,769 100.0 Metropolitan Square (51% ownership) East End Washington DC 1 587,217 97.7 1301 New York Avenue East End Washington DC 1 188,358 100.0 Market Square North (50% ownership) East End Washington DC 1 401,279 100.0 Sumner Square CBD Washington DC 1 207,620 99.8 Decoverly Two Montgomery County MD 1 77,747 100.0 Decoverly Three Montgomery County MD 1 77,040 100.0 Democracy Center Montgomery County MD 3 681,329 90.1 Montvale Center Montgomery County MD 1 120,823 100.0 2600 Tower Oaks Boulevard Montgomery County MD 1 178,899 70.3 Orbital Sciences Campus Loudoun County 3 337,228 100.0 The Arboretum Fairfax County VA 1 95,584 100.0 One Freedom Square (25% ownership) Fairfax County VA 1 410,308 100.0 One Reston Overlook Fairfax County VA 1 312,685 100.0 Two Reston Overlook Fairfax County VA 1 131,594 100.0 New Dominion Technology Park Fairfax County VA 1 235,201 100.0 Reston Corporate Center Fairfax County VA 2 261,046 100.0 Lockheed Martin Building Fairfax County VA 1 255,244 100.0 NIMA Building Fairfax County VA 1 263,870 100.0 ------------------------------------------- 28 6,657,124 98.0 ------------------------------------------- Office/Technical Fullerton Square Fairfax County VA 2 179,453 81.9 Sugarland Business Park, Building One Fairfax County VA 1 52,797 100.0 Sugarland Business Park, Building Two Fairfax County VA 1 59,215 100.0 7435 Boston Boulevard Fairfax County VA 1 103,557 100.0 7451 Boston Boulevard Fairfax County VA 1 47,001 100.0 7450 Boston Boulevard Fairfax County VA 1 62,402 100.0 7374 Boston Boulevard Fairfax County VA 1 57,321 100.0 8000 Grainger Court Fairfax County VA 1 90,465 100.0 7500 Boston Boulevard Fairfax County VA 1 79,971 100.0 7501 Boston Boulevard Fairfax County VA 1 75,756 100.0 7601 Boston Boulevard Fairfax County VA 1 103,750 100.0 7600 Boston Boulevard Fairfax County VA 1 69,832 100.0 7375 Boston Boulevard Fairfax County VA 1 26,865 93.4 8000 Corporate Court Fairfax County VA 1 52,539 100.0 7700 Boston Boulevard Fairfax County VA 1 82,224 100.0 ------------------------------------------- 16 1,143,148 97.0 ------------------------------------------- Total Greater Washington: 44 7,800,272 97.8% =========================================== =================================================================================================================================== =================================================================================================================================== ANNUALIZED REVENUE PER OCCUPIED SF ----------- GREATER WASHINGTON, DC Office 2300 N Street $ 49.41 One Independence Square 40.34 Two Independence Square 37.56 Capital Gallery 34.83 500 E Street, N. W. 31.69 Metropolitan Square (51% ownership) 35.35 1301 New York Avenue 30.30 Market Square North (50% ownership) 41.94 Sumner Square 32.49 Decoverly Two 23.15 Decoverly Three 24.39 Democracy Center 28.03 Montvale Center 22.02 2600 Tower Oaks Boulevard 30.88 Orbital Sciences Campus 22.72 The Arboretum 25.95 One Freedom Square (25% ownership) 32.82 One Reston Overlook 21.55 Two Reston Overlook 32.31 New Dominion Technology Park 26.70 Reston Corporate Center 31.09 Lockheed Martin Building 41.67 NIMA Building 45.57 ----------------- $ 33.61 ----------------- Office/Technical Fullerton Square 11.92 Sugarland Business Park, Building One 22.19 Sugarland Business Park, Building Two 21.87 7435 Boston Boulevard 14.07 7451 Boston Boulevard 15.29 7450 Boston Boulevard 16.55 7374 Boston Boulevard 13.90 8000 Grainger Court 12.73 7500 Boston Boulevard 14.16 7501 Boston Boulevard 23.33 7601 Boston Boulevard 14.20 7600 Boston Boulevard 14.75 7375 Boston Boulevard 15.66 8000 Corporate Court 9.49 7700 Boston Boulevard 21.49 ----------------- $ 15.72 ----------------- =================================================================================================================================== 18
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 PROPERTY LISTING AS OF SEPTEMBER 30, 2001 NUMBER OF SUB MARKET BUILDINGS SQUARE FEET ---------- --------- ----------- MIDTOWN MANHATTAN Office 599 Lexington Avenue Park Avenue NY 1 1,000,497 280 Park Avenue Park Avenue NY 1 1,166,079 Citigroup Center Park Avenue NY 1 1,578,623 875 Third Avenue East Side NY 1 704,778 ----------------------------------- Total Midtown Manhattan: 4 4,449,977 =================================== Princeton/East Brunswick, NJ Office 101 Carnegie Center Princeton NJ 1 123,659 104 Carnegie Center Princeton NJ 1 102,830 105 Carnegie Center Princeton NJ 1 69,648 201 Carnegie Center Princeton NJ -- 6,500 202 Carnegie Center Princeton NJ 1 128,705 210 Carnegie Center Princeton NJ 1 161,112 211 Carnegie Center Princeton NJ 1 47,025 212 Carnegie Center Princeton NJ 1 148,045 214 Carnegie Center Princeton NJ 1 152,214 206 Carnegie Center Princeton NJ 1 161,763 302 Carnegie Center Princeton NJ 1 65,063 502 Carnegie Center Princeton NJ 1 116,374 510 Carnegie Center Princeton NJ 1 234,160 504 Carnegie Center Princeton NJ 1 121,990 506 Carnegie Center Princeton NJ 1 146,362 508 Carnegie Center Princeton NJ 1 131,085 One Tower Center East Brunswick NJ 1 408,558 ----------------------------------- Total Princeton/East Brunswick, NJ: 16 2,325,093 =================================== GREATER SAN FRANCISCO Office Embarcadero Center One CBD San Francisco CA 1 827,480 Embarcadero Center Two CBD San Francisco CA 1 779,386 Embarcadero Center Three CBD San Francisco CA 1 773,516 Embarcadero Center Four CBD San Francisco CA 1 949,806 Federal Reserve CBD San Francisco CA 1 149,592 West Tower CBD San Francisco CA 1 475,488 The Gateway South San Francisco CA 2 506,204 ----------------------------------- 8 4,461,472 =================================== Office/Technical Hilltop Office Center South San Francisco CA 9 144,366 Industrial 560 Forbes Blvd South San Francisco CA 1 40,000 430 Rozzi Place South San Francisco CA 1 20,000 2391 West Winton Hayward CA 1 220,213 ----------------------------------- 3 280,213 ----------------------------------- Total Greater San Francisco: 20 4,886,051 =================================== ================================================================================================================================= ANNUALIZED REVENUE PER OCCUPIED % OCCUPIED SF ---------- ----------- MIDTOWN MANHATTAN Office 599 Lexington Avenue 100.0 $ 56.19 280 Park Avenue 100.0 46.64 Citigroup Center 99.9 53.37 875 Third Avenue 99.7 49.61 ------------------------------------------------ Total Midtown Manhattan: 99.9% $ 51.65 ================================================ Princeton/East Brunswick, NJ Office 101 Carnegie Center 100.0% 26.91 104 Carnegie Center 100.0 30.35 105 Carnegie Center 100.0 28.19 201 Carnegie Center 100.0 23.79 202 Carnegie Center 100.0 28.91 210 Carnegie Center 100.0 29.32 211 Carnegie Center 100.0 24.09 212 Carnegie Center 78.3 29.89 214 Carnegie Center 100.0 28.38 206 Carnegie Center 100.0 27.51 302 Carnegie Center 70.9 32.77 502 Carnegie Center 100.0 28.19 510 Carnegie Center 100.0 25.82 504 Carnegie Center 100.0 28.28 506 Carnegie Center 100.0 28.27 508 Carnegie Center 100.0 26.74 One Tower Center 71.8 30.88 ------------------------------------------------ Total Princeton/East Brunswick, NJ: 92.8% $ 28.43 ================================================ GREATER SAN FRANCISCO Office Embarcadero Center One 97.1% 40.74 Embarcadero Center Two 90.4 45.35 Embarcadero Center Three 97.2 40.82 Embarcadero Center Four 96.6 54.40 Federal Reserve 100.0 47.11 West Tower 98.9 48.84 The Gateway 92.6 35.77 ------------------------------------------------ 95.6% $ 45.02 ================================================ Office/Technical Hilltop Office Center 90.0% $ 14.64 ------------------------------------------------ Industrial 560 Forbes Blvd 100.0% 9.95 430 Rozzi Place 100.0 11.38 2391 West Winton 72.8 4.72 ------------------------------------------------ 78.6% $ 6.27 ------------------------------------------------ 94.5% ================================================ ================================================================================================================================= 19
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 PROPERTY LISTING AS OF SEPTEMBER 30, 2001 ANNUALIZED REVENUE NUMBER OF PER SUB MARKET BUILDINGS SQUARE FEET OCCUPIED % OCCUPIED SF ---------- --------- ----------- ---------- ----------- BALTIMORE, MD Office Candler Building Baltimore MD 1 539,306 99.5% $17.98 100 East Pratt Street Baltimore MD 1 635,323 99.7% 29.85 -------------------------------------------------- Total Baltimore, MD: 2 1,174,629 99.6% $24.40 ================================================== RICHMOND, VA Office Riverfront Plaza Richmond VA 1 899,604 98.6% $23.17 ================================================== BUCKS COUNTY, PA Industrial 38 Cabot Boulevard Bucks County PA 1 161,000 100.0% $4.49 ================================================== Total In-Service Properties: 131 28,793,713 96.1% ================================================== =============================================================================================================================== 20
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 TOP 20 TENANTS BY SQUARE FEET LEASED =============================================================================== TENANT SQ. FT. % OF PORTFOLIO ------ ------- -------------- 1 U.S. Government 2,294,441 7.97% 2 Lockheed Martin Corporation 716,653 2.49% 3 Citibank, N.A. 639,971 2.22% 4 Gillette Company 488,177 1.70% 5 Shearman & Sterling 436,358 1.52% 6 Parametric Technology Corp. (1) 380,987 1.32% 7 Washington Group International 365,245 1.27% 8 Orbital Sciences Corporation 337,228 1.17% 9 First Union 325,396 1.13% 10 Hunton & Williams 322,829 1.12% 11 TRW, Inc. 317,921 1.10% 12 T. Rowe Price Associates, Inc. 304,129 1.06% 13 Marsh & McLennan, Inc. 302,842 1.05% 14 Digitas 279,182 0.97% 15 Deutsche Bank 270,528 0.94% 16 Accenture (1) 265,622 0.92% 17 Credit Suisse First Boston Group 260,363 0.90% 18 Covance, Inc. 258,831 0.90% 19 John Hancock Advisors 233,516 0.81% 20 Kirkland & Ellis (2) 229,832 0.80% =============================================================================== MAJOR SIGNED DEALS FOR FUTURE DEVELOPMENT =============================================================================== TENANT SQ. FT. ------ ------- Ernst & Young 1,062,203 Andersen 620,947 Tellabs 259,918 Palmer & Dodge 204,412 =============================================================================== (1) These tenants occupy space in properties in which Boston Properties has a 25% interest. (2) Includes 144,222 sf of space in a property in which Boston Properties has a 51% interest. 21
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 PORTFOLIO OVERVIEW - FFO PERCENTAGE OF PROPERTY FUNDS FROM OPERATIONS (1) FOR IN-SERVICE PROPERTIES BY LOCATION AND TYPE OF PROPERTY FOR THE QUARTER ENDED SEPTEMBER 30, 2001 ============================================================================================================================== Office/ Geographic Area Office (2) Technical Industrial Hotel Total --------------- ---------- --------- ---------- ----- ----- Greater Boston 16.4% 1.0% 0.1% 4.2% 21.7% Greater Washington 19.9% 2.3% -- -- 22.2% Greater San Francisco 20.6% 0.3% 0.2% -- 21.1% Midtown Manhattan 23.3% -- -- -- 23.3% Princeton/East Brunswick, NJ 5.8% -- -- -- 5.8% Baltimore, MD 3.2% -- -- -- 3.2% Richmond, VA 2.6% -- -- -- 2.6% Bucks County, PA -- -- 0.1% -- 0.1% ---- --- --- --- ----- Total 91.8% 3.6% 0.4% 4.2% 100.0% ==== === === === ===== ============================================================================================================================== (1) 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. (2) Includes Retail Center FFO (Prudential Center and Embarcadero Center). 22
BOSTON PROPERTIES, INC. THIRD QUARTER OCCUPANCY ANALYSIS SAME PROPERTY OCCUPANCY - BY LOCATION ============================================================================================== LOCATION 30-SEP-01 30-SEP-00 -------- --------- --------- Greater Boston 94.9% 97.9% Greater Washington 98.3% 98.9% Midtown Manhattan 99.9% 99.2% Baltimore, MD 99.6% 100.0% Princeton/East Brunswick, NJ 93.5% 99.4% Richmond, VA 98.6% 100.0% Greater San Francisco 94.5% 98.5% Bucks County, PA 100.0% 100.0% ----- ----- Total Portfolio 96.6% 98.8% ===== ===== ============================================================================================== SAME PROPERTY - BY TYPE OF PROPERTY =============================================================================== 30-SEP-01 30-SEP-00 --------- --------- Total Office Portfolio 96.7% 99.2% Total Office/Technical Portfolio 97.3% 93.4% Total Industrial Portfolio 87.3% 96.9% ---- ---- Total Portfolio 96.6% 98.8% ==== ==== =============================================================================== 23
BOSTON PROPERTIES THIRD QUARTER 2001 IN-SERVICE OFFICE PROPERTIES LEASE EXPIRATIONS
BOSTON PROPERTIES THIRD QUARTER 2001 IN-SERVICE OFFICE/TECHNICAL PROPERTIES LEASE EXPIRATIONS
BOSTON PROPERTIES THIRD QUARTER 2001 IN-SERVICE INDUSTRIAL PROPERTIES LEASE EXPIRATIONS
BOSTON PROPERTIES THIRD QUARTER 2001 IN-SERVICE RETAIL PROPERTIES LEASE EXPIRATIONS
BOSTON PROPERTIES THIRD QUARTER 2001 GRAND TOTAL OF ALL IN-SERVICE PROPERTIES LEASE EXPIRATION
BOSTON PROPERTIES THIRD QUARTER 2001 IN-SERVICE GREATER BOSTON PROPERTIES LEASE EXPIRATIONS GREATER BOSTON
BOSTON PROPERTIES THIRD QUARTER 2001 IN-SERVICE GREATER WASHINGTON PROPERTIES LEASE EXPIRATIONS GREATER WASHINGTON
BOSTON PROPERTIES THIRD QUARTER 2001 IN-SERVICE GREATER SAN FRANCISCO PROPERTIES LEASE EXPIRATIONS GREATER SAN FRANCISCO
BOSTON PROPERTIES THIRD QUARTER 2001 IN-SERVICE MIDTOWN MANHATTAN PROPERTIES LEASE EXPIRATIONS MIDTOWN MANHATTAN
BOSTON PROPERTIES THIRD QUARTER 2001 IN-SERVICE PRINCETON/EAST BRUNSWICK PROPERTIES LEASE EXPIRATIONS PRINCETON/EAST BRUNSWICK
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 IN-SERVICE OTHER PROPERTIES LEASE EXPIRATIONS OTHER PROPERTIES (RICHMOND, VA; BALTIMORE, MD; BUCKS COUNTY, PA) ===================================================================================== OFFICE ----------------------------------------------------------------- ANNUALIZED RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES EXPIRATION EXPIRING LEASES XPIRING LEASES WITH FUTURE STEP-UPS ------------- ------------------ ------------------ -------------------- 2001 -- $ -- $ -- 2002 181,345 4,220,223 4,407,229 2003 182,325 4,057,748 4,105,613 2004 123,253 2,646,108 2,783,020 2005 394,855 9,628,729 10,217,475 2006 728,696 19,491,172 21,377,965 2007 49,538 1,896,137 1,934,671 2008 207,959 3,674,976 4,521,135 2009 125,620 2,270,089 2,905,525 2010 13,557 151,318 151,318 Thereafter 11,378 254,050 330,685 ===================================================================================== ============================================================================================= OFFICE/TECHNICAL --------------------------------------------------------------------------- ANNUALIZED RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS ------------- ------------------ ------------------ -------------------- 2001 -- $ -- $ -- 2002 -- -- -- 2003 -- -- -- 2004 -- -- -- 2005 -- -- -- 2006 -- -- -- 2007 -- -- -- 2008 -- -- -- 2009 -- -- -- 2010 -- -- -- Thereafter -- -- -- ============================================================================================= ======================================================================================= INDUSTRIAL ---------------------------------------------------------------------- ANNUALIZED RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS ------------- ------------------ ------------------ -------------------- 2001 -- $ -- $ -- 2002 161,000 723,030 723,030 2003 -- -- -- 2004 -- -- -- 2005 -- -- -- 2006 -- -- -- 2007 -- -- -- 2008 -- -- -- 2009 -- -- -- 2010 -- -- -- Thereafter -- -- -- ====================================================================================== ========================================================================================= RETAIL ------------------------------------------------------------------------- ANNUALIZED RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS ------------- ------------------ ------------------ -------------------- 2001 382 $ 17,106 $ 17,106 2002 6,024 102,944 102,944 2003 3,976 86,215 89,120 2004 11,193 76,329 76,756 2005 2,096 90,890 99,151 2006 6,840 223,036 223,036 2007 6,700 246,104 261,104 2008 -- -- -- 2009 -- -- -- 2010 625 14,496 18,877 Thereafter -- -- -- ======================================================================================== 34
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 HOTEL PERFORMANCE SAME PROPERTY HOTELS Long Wharf Marriott - Boston ================================================================================================================================== THIRD QUARTER THIRD QUARTER PERCENT YTD YTD PERCENT 2001 2000 CHANGE 2001 2000 CHANGE ---- ---- ------ ---- ---- ------- Occupancy 91.5% 93.4% -2.0% 81.9% (1) 91.2% -10.2% Average Daily Rate $ 243.68 $ 284.84 -14.5% $ 240.69 $ 250.61 -4.0% REVPAR $ 222.97 $ 266.04 -16.2% $ 197.13 $ 228.56 -13.8% ================================================================================================================================== Cambridge Center Marriott =================================================================================================================================== THIRD QUARTER THIRD QUARTER PERCENT YTD YTD PERCENT 2001 2000 CHANGE 2001 2000 CHANGE ---- ---- ------ ---- ---- ------ Occupancy 83.3% 91.6% -9.1% 81.6% 87.7% -7.0% Average Daily Rate $185.35 $214.35 -13.5% $194.92 $202.18 -3.6% REVPAR $154.46 $196.34 -21.3% $159.05 $177.31 -10.3% =================================================================================================================================== Residence Inn by Marriott =================================================================================================================================== THIRD QUARTER THIRD QUARTER PERCENT YTD YTD PERCENT 2001 2000 CHANGE 2001 2000 CHANGE ---- ---- ------ ---- ---- ------ Occupancy 91.6% 97.6% -6.1% 88.9% 92.9% -4.3% Average Daily Rate $162.81 $177.56 -8.3% $162.71 $168.94 -3.7% REVPAR $149.19 $173.30 -13.9% $144.65 $156.95 -7.8% =================================================================================================================================== Total Same Property Hotel Performance =================================================================================================================================== THIRD QUARTER THIRD QUARTER PERCENT YTD YTD PERCENT 2001 2000 CHANGE 2001 2000 CHANGE ---- ---- ------ ---- ---- ------ Occupancy 88.2% 93.5% -5.7% 83.2% 90.1% -7.7% Average Daily Rate $202.87 $233.52 -13.1% $205.62 $213.68 -3.8% REVPAR $179.49 $218.09 -17.7% $170.55 $195.59 -12.8% =================================================================================================================================== (1) Rooms renovation project was underway. 35
BOSTON PROPERTIES,INC. THIRD QUARTER 2001 SAME PROPERTY PERFORMANCE OFFICE, OFFICE/TECHNICAL, INDUSTRIAL AND HOTEL PROPERTIES =================================================================================================================================== OFFICE OFFICE/TECHNICAL INDUSTRIAL HOTEL TOTAL ------ ---------------- ---------- ----- ----- Number of Properties 84 30 5 3 122 Square feet 22,774,236 1,832,720 610,486 937,874 26,155,316 Percent of in-service properties 86.4% 100.0% 100.0% 100.0% 88.0% Occupancy @ 9/30/00 99.2% 93.4% 96.9% -- 98.8% Occupancy @ 9/30/01 96.7% 97.3% 87.3% -- 96.6% Percent change from 3rd quarter 2001 over 3rd quarter 2000 Revenue 6.0% 31.5% -6.8% -8.7% 5.9% Expense 7.0% -7.9% -3.0% -4.8% 6.5% Net Operating Income 5.5% 43.1% -7.5% -9.4% 5.6% =================================================================================================================================== SAME PROPERTY LEASE ANALYSIS - SEPTEMBER 30, 2001 =================================================================================================================================== OFFICE OFFICE/TECHNICAL INDUSTRIAL TOTAL ------ ---------------- ---------- ----- Vacant space available @ 07/01/01 (sf) 516,660 27,536 77,264 621,460 Square footage of leases expiring or terminated 07/01/01-09/30/01 1,064,279 133,002 -- 1,197,281 ---------- ---------- ---------- ---------- Total space for lease (sf) 1,580,939 160,538 77,264 1,818,741 ========== ========== ========== ========== New tenants (sf) 793,941 3,100 -- 797,041 Renewals (sf) 39,019 108,815 -- 147,834 ---------- ---------- ---------- ---------- Total space leased (sf) 832,960 111,915 -- 944,875 ========== ========== ========== ========== Space available @ 9/30/01 (sf) 747,979 48,623 77,264 873,866 ========== ========== ========== ========== Net increase (decrease) in leased space (sf) (231,319) (21,087) -- (252,406) Average lease term (months) 96 25 -- 90 2nd generation TI/Comm PSF $ 28.15 $ 2.30 $ -- $ 25.09 Increase in 2nd generation net rents (1) 39.4% 22.8% -- 38.7% =================================================================================================================================== (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.) 36
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 ALL "IN-SERVICE" PROPERTIES - QUARTER ENDED SEPTEMBER 30, 2001 ================================================================================================================================== OFFICE OFFICE/TECHNICAL INDUSTRIAL TOTAL ------ ---------------- ---------- ----- Vacant space available @ 07/01/01 (sf) 1,060,919 27,536 77,264 1,165,719 Square footage of leases expiring or terminated 07/01/01-09/30/01 1,101,707 133,002 -- 1,234,709 ---------- ------------ ------- ---------- Total space for lease (sf) 2,162,626 160,538 77,264 2,400,428 ========== ============ ======= ========== New tenants (sf) 1,120,896 3,100 -- 1,123,996 Renewals (sf) 39,019 108,815 -- 147,834 ---------- ------------ ------- ---------- Total space leased (sf) 1,159,915 111,915 -- 1,271,830 (2) ========== ============ ======= ========== Space available @ 09/30/01 (sf) 1,002,711 48,623 77,264 1,128,598 ========== ============ ======= ========== Net increase/(decrease) in leased space (sf) 58,208 (21,087) -- 37,121 Average lease term (months) 96 25 -- 90 2nd generation TI/Comm PSF $ 28.15 $ 2.30 $ -- $ 25.09 Increase in 2nd generation net rents (1) 39.4% 22.8% -- 38.7% ================================================================================================================================== (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). (2) Total space leased of 1,271,830 sf equals 326,955 sf 1st generation and 944,875 sf 2nd generation. 37
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 HISTORICALLY GENERATED CAPITAL EXPENDITURES, TENANT IMPROVEMENT COSTS AND LEASING COMMISSIONS (IN THOUSANDS) HISTORICAL CAPITAL EXPENDITURES =================================================================================================================================== YTD 2001 Q3 2001 Q2 2001 Q1 2001 2000 1999 1998 1997 -------- ------- ------- ------- ---- ---- ---- ---- Recurring capital expenditures $ 8,472 $ 2,309 $ 3,425 $ 2,738 $11,201 $11,611 $ 3,543 $ 1,125 ======== ======= ======= ======= ======= ======= ======= ======= Hotel improvements, equipment upgrades $ 7,439 $ 1,089 $ 4,069 $ 2,281 $ 5,697 $ 2,346 $ 3,872 $ 2,625 and replacements ======== ======= ======= ======= ======= ======= ======= ======= =================================================================================================================================== 2ND GENERATION TENANT IMPROVEMENTS AND LEASING COMMISSIONS =================================================================================================================================== YTD 2001 Q3 2001 Q2 2001 Q1 2001 2000 1999 --------- ------- ------- ------- ---- Office Square feet 1,894,378 832,960 497,756 563,662 2,913,599 2,115,281 --------- ----------- --------- --------- ---------- ---------- Tenant improvement and lease commissions p.s.f. $ 19.93 $ 28.15 $ 12.06 $ 14.72 $ 13.82 $ 10.60 --------- ----------- --------- --------- ---------- ---------- Office/Technical Square feet 156,898 111,915 10,696 34,287 694,536 167,231 --------- ----------- --------- --------- ---------- ---------- Tenant improvement and lease commissions p.s.f. $ 2.56 $ 2.30 $ 3.34 $ 3.19 $ 2.95 $ 1.94 --------- ----------- --------- --------- ---------- ---------- Industrial Square feet $ -- -- -- -- 209,125 163,962 --------- ----------- --------- --------- ---------- ---------- Tenant improvement and lease commissions p.s.f. $ -- $ -- $ -- $ -- $ 1.38 $ 0.60 --------- ----------- --------- --------- ---------- ---------- Average tenant improvement and lease commission p.s.f. $ 18.60 $ 25.09 $ 11.88 $ 14.05 $ 11.16 $ 9.34 ========= =========== ========= ========= ========== ========== =================================================================================================================================== ============================================================================================== 1998 1997 ---- ---- Office Square feet 648,291 1,016,427 -------- ---------- Tenant improvement and lease commissions p.s.f. $ 9.82 $ 10.83 -------- ---------- Office/Technical Square feet 113,428 169,878 -------- ---------- Tenant improvement and lease commissions p.s.f. $ 3.32 $ 2.22 -------- ---------- Industrial Square feet 320,608 258,795 -------- ---------- Tenant improvement and lease commissions p.s.f. $ 1.13 $ 0.99 -------- ---------- Average tenant improvement and lease commission p.s.f. 6.57 $ 8.06 ======== ========== ============================================================================================== 38
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 VALUE CREATION PIPELINE - ACQUISITIONS/DISPOSITIONS as of September 30, 2001 ACQUISITIONS =================================================================================================================================== ANTICIPATED INITIAL FUTURE TOTAL CURRENT PROPERTY DATE ACQUIRED SQUARE FEET INVESTMENT INVESTMENT INVESTMENT OCCUPANCY -------- ------------- ----------- ---------- ------------ ---------- --------- Citigroup Center Apr-01 1,578,623 755,000,000 -- 755,000,000 100% ----------- ------------ -------- ------------- ---- Total Value Creation Pipeline - 1,578,623 $755,000,000 $ -- $755,000,000 100% Acquisitions =========== ============ ======== ============= ==== =================================================================================================================================== DISPOSITIONS =================================================================================================================================== NET PROPERTY DATE DISPOSED SQUARE FEET NET PROCEEDS BOOK VALUE GAIN -------- ------------- ----------- ------------ ---------- ---------- 25-33 Dartmouth Street Mar-01 78,045 $ 6,612,676 $811,158 $5,801,518 Maryland Industrial Park, Bldgs. 2&3 Jun-01 183,945 7,574,494 5,297,462 2,277,032 ------- ----------- ---------- ----------- Total Dispositions 261,990 $14,187,170 $6,108,620 $8,078,550 ======= =========== ========== =========== ================================================================================================================================== 39
BOSTON PROPERTIES, INC. THIRD QUARTER VALUE CREATION PIPELINE - CONSTRUCTION IN PROGRESS as of September 30, 2001 ================================================================================================================================== DEVELOPMENT PROPERTIES INITIAL OCCUPANCY STABILIZATION DATE LOCATION ---------------------- ----------------- ------------------ -------- Quorum Office Park Q3 2001 Q4 2001 Chelmsford, MA 111 Huntington Avenue - Prudential Center Q3 2001 Q4 2002 Boston, MA Broad Run Business Park- Building E Q4 2001 Q2 2002 Dulles, VA One and Two Discovery Square (50% ownership) Q4 2001 Q4 2002 Reston, VA ITT Educational Services Q4 2001 Q4 2001 Springfield, VA 5 Times Square Q1 2002 Q2 2002 New York, NY Waltham Weston Corporate Center Q1 2002 Q4 2003 Waltham, MA 7702 Boston Boulevard Q1 2002 Q1 2002 Springfield, VA 611 Gateway Boulevard Q2 2002 Q1 2004 S. San Francisco, CA Two Freedom Square (50% ownership) Q3 2002 Q1 2003 Reston, VA Shaws Supermarket Q4 2002 Q4 2001 Boston, MA Times Square Tower Q4 2003 Q2 2004 New York, NY Total Development Properties ================================================================================================================================== ================================================================================================================================== ANTICIPATED CURRENT # OF INVESTMENT TOTAL PERCENTAGE DEVELOPMENT PROPERTIES BUILDINGS SQUARE FEET TO DATE INVESTMENT LEASED ---------------------- --------- ----------- ---------- ----------- ---------- Quorum Office Park 1 129,959 $ 18,204,772 $ 20,417,204 100% 111 Huntington Avenue - Prudential Center 1 919,229 251,348,425 290,000,000 93% Broad Run Business Park- Building E 1 124,650 11,192,527 19,946,000 0% One and Two Discovery Square (50% ownership) 2 362,868 24,504,106 41,204,097 (1) 49% ITT Educational Services 1 32,114 1,797,980 5,740,000 100% 5 Times Square 1 1,099,154 380,749,116 536,115,000 100% Waltham Weston Corporate Center 1 295,000 47,894,645 95,446,000 17% 7702 Boston Boulevard 1 43,171 278,318 7,286,409 100% 611 Gateway Boulevard 1 249,732 30,372,778 77,523,240 0% Two Freedom Square (50% ownership) 1 417,113 21,863,164 79,848,921 (1) 58% Shaws Supermarket 1 57,235 3,478,239 23,868,520 100% Times Square Tower 1 1,221,058 217,974,439 653,500,000 51% ------ ---------- --------------- -------------- ------- Total Development Properties 13 4,951,283 $ 1,009,658,509 $1,850,895,391 67% ------ ---------- --------------- -------------- ------- ================================================================================================================================== DEVELOPMENTS PLACED-IN-SERVICE DURING 2001 =================================================================================================================== PLACED STABILIZATION # OF CLASS A OFFICE BUILDING IN SERVICE DATE DATE LOCATION BUILDINGS ----------------------- --------------- ------------- -------- --------- 302 Carnegie Center Q1 2001 Q1 2002 Princeton, NJ 1 New Dominion Tech Park - Building 1 Q1 2001 Q1 2001 Herndon, VA 1 40 Shattuck Road Q2 2001 Q2 2002 Andover, MA 1 2600 Tower Oaks Boulevard Q2 2001 Q2 2002 Rockville, MD 1 Orbital Sciences Phase II - Building 2 Q3 2001 Q3 2001 Dulles, VA 1 Quorum Office Park Q3 2001 Q3 3001 Chelmsford, MA 1 ----- Total Developments Placed in Service 6 ===== =================================================================================================================== =================================================================================================================== INVESTMENT TOTAL PERCENTAGE CLASS A OFFICE BUILDING SQUARE FEET TO DATE INVESTMENT LEASED ----------------------- ----------- ---------- ---------- ---------- 302 Carnegie Center 65,063 $ 10,614,982 $ 13,435,000 71% New Dominion Tech Park - Building 1 235,201 47,182,816 48,770,000 100% 40 Shattuck Road 119,499 14,814,750 17,381,000 83% 2600 Tower Oaks Boulevard 178,899 35,119,046 38,295,000 70% Orbital Sciences Phase II - Building 2 160,502 27,638,249 29,900,000 100% Quorum Office Park 129,959 17,584,217 20,417,204 100% -------- ------------ ------------ ----- Total Developments Placed in Service 899,123 $152,954,060 $168,198,204 89% ======== ============ ============ ===== =================================================================================================================== (1) Represents 50% of the total anticipated project-level investment. 40
BOSTON PROPERTIES, INC. THIRD QUARTER 2001 VALUE CREATION PIPELINE - OWNED LAND PARCELS as of September 30, 2001 ============================================================================================================================= NO. OF DEVELOPABLE LOCATION PARCELS ACREAGE SQUARE FEET -------- ------- ------- ----------- > Rockville, MD 4 92.3 986,000 Dulles, VA 2 76.6 937,000 Gaithersburg, MD 4 27.0 850,000 San Jose, CA 5 3.7 841,000 Reston, VA 2 4.7 480,716 Boston, MA 4 2.5 641,765 Washington, DC (1) 1 1.3 550,000 Marlborough, MA 1 50.0 400,000 Herndon, VA 2 25.2 383,000 Waltham, MA 1 4.3 202,000 S. San Francisco, CA 1 3.0 120,799 Andover, MA 1 10.0 110,000 ----- ----- --------- 28 300.6 6,502,280 ===== ===== ========= ============================================================================================================================= VALUE CREATION PIPELINE - LAND PURCHASE OPTIONS as of September 30, 2001 ===================================================================================== NO. OF DEVELOPABLE LOCATION PARCELS ACREAGE SQUARE FEET -------- ------- ------- ----------- Princeton, NJ (2) 14 149.9 1,900,000 Weston, MA (3) 1 74.0 350,000 Framingham, MA (4) 1 21.5 300,000 Cambridge, MA (5) 1 2.6 165,000 ---- ----- --------- 17 248.0 2,715,000 ==== ===== ========= ===================================================================================== (1) 25% interest in land through a joint venture. (2) $20.00/FAR plus an earnout calculation. (3) $18.2 million (of which $9.1 million has already been paid) subject to receiving all necessary permits and approvals. (4) Subject to ground lease. (5) Prior to January 23, 2002 the cost will be $25.92/ SF of land area. Land area is approximately 108,000 SF. 41
EXHIBIT 99.2 BOSTON PROPERTIES, INC. 111 HUNTINGTON AVENUE BOSTON, MA 02199 (NYSE: BXP) AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD -------------- -------------------------------------------- Douglas T. Linde Marilynn Meek - General Info. (212) 445-8431 Chief Financial Officer Claire Koeneman - Analyst (312) 266-7800 (617) 236-3300 Judith Sylk-Siegel - Media (212) 445-8431 BOSTON PROPERTIES, INC. ANNOUNCES THIRD QUARTER 2001 RESULTS REPORTS DILUTED FFO PER SHARE OF $0.91 BEFORE ACCOUNTING CHARGE RELATED TO SFAS NO. 133 BOSTON, MA, OCTOBER 23, 2001 - BOSTON PROPERTIES, INC. (NYSE: BXP) today reported results for the third quarter ended September 30, 2001. Funds from Operations (FFO) for the quarter ended September 30, 2001 were $86.6 million, or $0.96 per share basic and $0.91 per share diluted before an accounting charge related to the application of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" for the quarter ended September 30, 2001. FFO for the third quarter of 2001 compares to FFO of $61.5 million, or $0.90 per share basic and $0.85 per share diluted for the quarter ended September 30, 2000. Excluding the charge related to SFAS No. 133, this represents a 7.1% year to year increase in diluted FFO per share. The weighted average number of basic and diluted shares outstanding totaled 90,518,618 and 105,812,336, respectively, for the quarter ended September 30, 2001 and 68,751,768 and 83,657,357, respectively, for the same quarter last year. Net income before the charge related to SFAS No. 133 and gain (loss) on the sale of real estate, totaled $54.9 million or $0.59 per share diluted in the third quarter of 2001 as compared to $37.1 million or $0.53 per share diluted for the same period in 2000. Excluding the charge related to SFAS No. 133 and gain (loss) on the sale of real estate, this represents an 11.3% per share increase in diluted net income year over 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 September 30, 2001. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made. -MORE-
As of September 30, 2001, the Company's portfolio consisted of 147 properties comprising more than 40.9 million square feet, including 13 properties under development totaling 5.0 million square feet. The overall occupancy rate for the properties in service as of September 30, 2001 was 96.1 %. Additional highlights of the third quarter include: o The refinancing of the mortgage loan collateralized by Sumner Square on August 8, 2001. The new financing totaling $30.3 million bears interest at a fixed rate of 7.35% and matures in September 2013. o The refinancing of the mortgage loan collateralized by One Independence Square on August 22, 2001. The new financing totaling $75.0 million bears interest at a rate equal to LIBOR + 1.60% and matures in August 2003. o The refinancing of the mortgage loan collateralized by 10 & 20 Burlington Mall Road and 91 Hartwell Avenue on October 1, 2001. The new financing totaling $40.0 million bears interest at a fixed rate of 7.25% and matures in October 2011. o The completion of two development projects consisting of Orbital Sciences Phase II, an approximately 160,000 square foot office building in Dulles, Virginia and an approximately 130,000 square foot office building at Quorum Office Park in Chelmsford, Massachusetts. These projects are 100% leased. Boston Properties will conduct a conference call tomorrow, October 24, 2001 at 10:00 AM (Eastern Time) to discuss the results of this year's third quarter. The number to call for this interactive teleconference is (888) 413-4411. A replay of the conference call will be available through November 1, 2001 by dialing (888) 266-2086 and entering the passcode 5568450. Additionally, a copy of Boston Properties' third quarter 2001 "Supplemental Operating and Financial Data" will be available on the Investor section of the company's website at HTTP://WWW.BOSTONPROPERTIES.COM. These materials are also available by contacting Investor Relations at 617-236-3300 or by written request to: Investor Relations Boston Properties, Inc. 111 Huntington Avenue Boston, MA 02199 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 Class A office, industrial and hotel properties. The Company is one of the largest owners and developers of Class A office properties in the United States, concentrated in four core markets - Boston, Midtown Manhattan, Washington, DC and San Francisco.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE FEDERAL SECURITIES LAWS. YOU SHOULD EXERCISE CAUTION IN INTERPRETING AND RELYING ON FORWARD-LOOKING STATEMENTS BECAUSE THEY INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH ARE, IN SOME CASES, BEYOND BOSTON PROPERTIES' CONTROL AND COULD MATERIALLY AFFECT ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS. THESE FACTORS INCLUDE, WITHOUT LIMITATION, THE ABILITY TO ENTER INTO NEW LEASES OR RENEW LEASES ON FAVORABLE TERMS, DEPENDENCE ON TENANTS' FINANCIAL CONDITION, THE UNCERTAINTIES OF REAL ESTATE DEVELOPMENT AND ACQUISITION ACTIVITY, THE ABILITY TO EFFECTIVELY INTEGRATE ACQUISITIONS, THE COSTS AND AVAILABILITY OF FINANCING, THE EFFECTS OF LOCAL ECONOMIC AND MARKET CONDITIONS, REGULATORY CHANGES AND OTHER RISKS AND UNCERTAINTIES DETAILED FROM TIME TO TIME IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. Financial tables follow.
BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, ------------------------------- 2001 2000 ------------ -------------- (UNAUDITED AND IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS) Revenue Rental: Base rent $ 219,855 $ 183,749 Recoveries from tenants 27,473 22,886 Parking and other 12,965 12,798 --------- --------- Total rental revenue 260,293 219,433 Development and management services 2,805 2,693 Interest and other 1,616 1,187 --------- --------- Total revenue 264,714 223,313 --------- --------- Expenses Operating 81,475 68,154 General and administrative 9,819 9,871 Interest 59,936 54,752 Depreciation and amortization 38,518 32,436 Loss on investments in securities - - --------- --------- Total expenses 189,748 165,213 --------- --------- Income before net derivative losses, minority interests and income from unconsolidated joint ventures 74,966 58,100 Net derivative losses (16,620) - Minority interests in property partnerships 374 (245) Income from unconsolidated joint ventures 997 549 --------- --------- Income before minority interest in Operating Partnership 59,717 58,404 Minority interest in Operating Partnership (16,709) (19,627) --------- --------- Income before gain (loss) on sale of real estate 43,008 38,777 Gain (loss) on sale of real estate, net of minority interest - (604) --------- --------- Income before cumulative effect of a change in accounting principle 43,008 38,173 Cumulative effect of a change in accounting principle, net of minority interest - - --------- --------- Net income before preferred dividend 43,008 38,173 Preferred dividend (1,653) (1,643) --------- --------- Net income available to common shareholders $ 41,355 $ 36,530 ========= ========= Basic earnings per share: Income before gain (loss) on sale of real estate and cumulative effect of a change in accounting principle $ 0.46 $ 0.54 Gain (loss) on sale of real estate, net of minority interest - (0.01) Cumulative effect of a change in accounting principle, net of minority interest - - --------- --------- Net income available to common shareholders $ 0.46 $ 0.53 ========= ========= Weighted average number of common shares outstanding 90,519 68,752 ========= ========= Diluted earnings per share: Income before gain (loss) on sale of real estate and cumulative effect of a change in accounting principle $ 0.45 $ 0.53 Gain (loss) on sale of real estate, net of minority interest - (0.01) Cumulative effect of a change in accounting principle, net of minority interest - - --------- --------- Net income available to common shareholders $ 0.45 $ 0.52 ========= ========= Weighted average number of common and common equivalent shares outstanding 92,828 70,661 ========= ========= NINE MONTHS ENDED SEPTEMBER 30, ---------------------------- 2001 2000 --------- -------------- (UNAUDITED AND IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS) Revenue Rental: Base rent $ 613,617 $ 532,039 Recoveries from tenants 80,917 68,956 Parking and other 40,244 38,095 --------- --------- Total rental revenue 734,778 639,090 Development and management services 9,312 8,432 Interest and other 10,349 3,304 --------- --------- Total revenue 754,439 650,826 --------- --------- Expenses Operating 228,683 197,366 General and administrative 29,649 25,868 Interest 163,659 166,210 Depreciation and amortization 109,933 97,062 Loss on investments in securities 6,500 - --------- --------- Total expenses 538,424 486,506 --------- --------- Income before net derivative losses, minority interests and income from unconsolidated joint ventures 216,015 164,320 Net derivative losses (24,408) - Minority interests in property partnerships 629 (681) Income from unconsolidated joint ventures 2,841 1,356 --------- --------- Income before minority interest in Operating Partnership 195,077 164,995 Minority interest in Operating Partnership (53,871) (56,505) --------- --------- Income before gain (loss) on sale of real estate 141,206 108,490 Gain (loss) on sale of real estate, net of minority interest 6,505 (307) --------- --------- Income before cumulative effect of a change in accounting principle 147,711 108,183 Cumulative effect of a change in accounting principle, net of minority interest (6,767) - --------- --------- Net income before preferred dividend 140,944 108,183 Preferred dividend (4,944) (4,929) --------- --------- Net income available to common shareholders $ 136,000 $ 103,254 ========= ========= Basic earnings per share: Income before gain (loss) on sale of real estate and cumulative effect of a change in accounting principle $ 1.52 $ 1.51 Gain (loss) on sale of real estate, net of minority interest 0.07 - Cumulative effect of a change in accounting principle, net of minority interest (0.07) - --------- --------- Net income available to common shareholders $ 1.52 $ 1.51 ========= ========= Weighted average number of common shares outstanding 89,753 68,568 ========= ========= Diluted earnings per share: Income before gain (loss) on sale of real estate and cumulative effect of a change in accounting principle $ 1.48 $ 1.49 Gain (loss) on sale of real estate, net of minority interest 0.07 (0.01) Cumulative effect of a change in accounting principle, net of minority interest (0.07) - --------- --------- Net income available to common shareholders $ 1.48 $ 1.48 ========= ========= Weighted average number of common and common equivalent shares outstanding 92,004 69,600 ========= =========
BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, DECEMBER 31, 2001 2000 ----------------- ---------------- (IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS) ASSETS Real estate: $ 7,297,980 $ 6,112,779 Less: accumulated depreciation (683,029) (586,719) ----------- ----------- Total real estate 6,614,951 5,526,060 Cash and cash equivalents 161,011 280,957 Escrows 20,901 85,561 Investments in securities 4,297 7,012 Tenant and other receivables 28,642 26,852 Accrued rental income 110,441 91,684 Deferred charges, net 104,370 77,319 Prepaid expenses and other assets 46,303 41,154 Investments in unconsolidated joint ventures 90,160 89,871 ----------- ------------ Total assets $ 7,181,076 $ 6,226,470 =========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Mortgage notes and bonds payable $ 4,245,433 $ 3,414,891 Accounts payable and accrued expenses 71,716 57,338 Dividends and distributions payable 79,005 71,274 Interest rate contracts 32,136 - Accrued interest payable 15,679 5,599 Other liabilities 52,969 51,926 ----------- ------------ Total liabilities 4,496,938 3,601,028 ----------- ------------ Commitments and contingencies -- -- Minority interests 844,957 877,715 ----------- ------------ Series A Convertible Redeemable Preferred Stock, liquidation preference $50.00 per share, 2,000,000 shares issued and outstanding 100,000 100,000 ----------- ------------ 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, 90,720,477 and 86,630,089 issued and outstanding in 2001 and 2000, respectively 907 866 Additional paid-in capital 1,784,840 1,673,349 Dividends in excess of earnings (30,456) (13,895) Unearned compensation (2,242) (848) Accumulated other comprehensive loss (13,868) (11,745) ----------- ------------ Total stockholders' equity 1,739,181 1,647,727 ----------- ------------ Total liabilities and stockholders' equity $ 7,181,076 $ 6,226,470 =========== ============
BOSTON PROPERTIES, INC. FUNDS FROM OPERATIONS (UNAUDITED AND IN THOUSANDS) THREE MONTHS ENDED SEPTEMBER 30, -------------------------------- 2001 2000 ----------- --------- Income before net derivative losses (SFAS No. 133), minority interests and income from unconsolidated joint ventures $ 74,966 $ 58,100 Add: Real estate depreciation and amortization 39,360 33,007 Income from unconsolidated joint ventures 997 549 Less: Net derivative losses (SFAS No. 133) (16,620) -- Minority property partnerships' share of funds from operations (832) (284) Preferred dividends and distributions (8,383) (8,248) -------- ------- Funds from operations $ 89,488 $ 83,124 Add: Net derivative losses (SFAS No. 133) 16,620 -- -------- ------- Funds from operations before net derivative losses (SFAS No. 133) $106,108 $ 83,124 ========= ======== Funds from operations available to common shareholders before net derivative losses (SFAS No. 133) $ 86,627 $ 61,543 ========= ======== Weighted average shares outstanding - basic 90,519 68,752 ========= ======== FFO per share basic before net derivative losses (SFAS No. 133) $ 0.96 $ 0.90 ========= ======== FFO per share basic after net derivative losses (SFAS No. 133) $ 0.81 $ 0.90 ========= ======== Weighted average shares outstanding - diluted 105,812 83,657 ========= ======== FFO per share diluted before net derivative losses (SFAS No. 133) $ 0.91 $ 0.85 ========= ======== FFO per share diluted after net derivative losses (SFAS No. 133) $ 0.78 $ 0.85 ========= ======== NINE MONTHS ENDED SEPTEMBER 30, ------------------------------------- 2001 2000 --------------- ---------- Income before net derivative losses (SFAS No. 133), minority interests and income from unconsolidated joint ventures $ 216,015 $ 164,320 Add: Real estate depreciation and amortization 112,516 97,556 Income from unconsolidated joint ventures 2,841 1,356 Less: Net derivative losses (SFAS No. 133) (24,408) -- Minority property partnerships' share of funds from operations (1,546) (774) Preferred dividends and distributions (24,864) (24,748) --------- ---------- Funds from operations $ 280,554 $ 237,710 Add: Net derivative losses (SFAS No. 133) 24,408 -- --------- ---------- Funds from operations before net derivative losses (SFAS No. 133) $ 304,962 $ 237,710 ========= ========= Funds from operations available to common shareholders before net derivative losses (SFAS No. 133) $ 247,210 $ 175,526 ========= ========= Weighted average shares outstanding - basic 89,753 68,568 ========= ========= FFO per share basic before net derivative losses (SFAS No. 133) $ 2.76 $ 2.56 ========= ========== FFO per share basic after net derivative losses (SFAS No. 133) $ 2.54 $ 2.56 ========= ========= Weighted average shares outstanding - diluted 104,991 82,600 ========= ========= FFO per share diluted before net derivative losses (SFAS No. 133) $ 2.62 $ 2.46 ========= ========= FFO per share diluted after net derivative losses (SFAS No. 133) $ 2.43 $ 2.46 ========= =========
BOSTON PROPERTIES, INC. PORTFOLIO OCCUPANCY Occupancy by Location September 30, 2001 December 31, 2000 ---------------------------- -------------------- Greater Boston 92.9% 99.3% Greater Washington, D.C. 97.8% 98.5% Midtown Manhattan 99.9% 99.9% Baltimore, MD 99.6% 99.8% Richmond, VA 98.6% 100.0% Princeton/East Brunswick, NJ 92.8% 98.7% Greater San Francisco 94.5% 97.9% Bucks County, PA 100.0% 100.0% --------------------- ------------------ Total Portfolio 96.1% 98.9% ===================== ================== Occupancy by Type --------------------------- ----------------------- September 30, 2001 December 31, 2000 --------------------------- ----------------------- Class A Office Portfolio 96.2% 99.0% Office/Technical Portfolio 97.3% 98.0% Industrial Portfolio 87.3% 95.9% Total Portfolio 96.1% 98.9% ====================== =======================
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: October 23, 2001 BOSTON PROPERTIES, INC. /s/ Douglas T. Linde ------------------------------------- By: Douglas T. Linde Chief Financial Officer