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): APRIL 23, 2002 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 April 23, 2002 announcing the Company's results for the first quarter ended March 31, 2002, 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 March 31, 2002. 99.2 The Boston Properties, Inc. press release dated April 23, 2002 for the quarter ended March 31, 2002.
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: April 24, 2002 BOSTON PROPERTIES, INC. /s/ Douglas T. Linde ----------------------------- By: Douglas T. Linde Chief Financial Officer
EXHIBIT 99.1 [LOGO]BOSTON PROPERTIES SUPPLEMENTAL OPERATING AND FINANCIAL DATA FOR THE QUARTER ENDED MARCH 31, 2002
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 COMPANY BACKGROUND - ------------------------------------------------------------------------------- Boston Properties, Inc., a self-administered and self-managed real estate investment trust, is one of the largest owners, managers and developers of first-class office properties in the United States, with a significant presence in four core markets: Boston, Washington, D.C., Midtown Manhattan and San Francisco. Boston Properties was founded in 1970 in Boston, where it maintains its headquarters. The Company acquires, develops and manages its properties through full-service regional offices in Boston, New York City, Washington, D.C., San Francisco and Princeton, New Jersey. Its property portfolio primarily comprises first-class office space and also includes hotels and industrial buildings. Since the Company's initial offering in June 1997, the Company has acquired 50 properties adding approximately 18.4 million square feet to its portfolio, representing an investment of approximately $4.7 billion, and the Company has delivered 30 development properties adding approximately 5.4 million square feet to its portfolio, representing an investment of approximately $1.1 billion. In addition, the Company is constructing 10 office properties for a total anticipated investment of approximately $1.4 billion. The Company owns or controls land where it can develop an additional 8.9 million square feet. 3
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 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 2002 will be announced according to the following anticipated schedule: Second Quarter Late July Third Quarter Late October Fourth Quarter Late January 4
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 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): 1ST QUARTER 2002 4TH QUARTER 2001 3RD QUARTER 2001 2ND QUARTER 2001 ---------------- ---------------- ---------------- ---------------- High Price $ 39.8200 $ 38.4100 $ 41.2600 $ 41.0600 Low Price $ 35.9800 $ 34.3300 $ 36.2000 $ 36.4700 Closing Price $ 39.4500 $ 38.0000 $ 38.1300 $ 40.9000 Dividends per share - annualized $ 2.32 $ 2.32 $ 2.32 $ 2.32 Closing dividend yield - annualized 5.88% 6.11% 6.08% 5.67% Closing shares, common units and preferred units (if converted) outstanding (thousands) 124,761 124,630 124,644 124,369 Closing market value of shares and units outstanding (thousands) $ 4,921,821 $ 4,735,940 $ 4,752,676 $ 5,086,692 5
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------- (unaudited and in thousands) THREE MONTHS ENDED MARCH 31, 2002 DECEMBER 31, 2001 SEPTEMBER 30, 2001 JUNE 30, 2001 Income Items: Revenue $ 274,320 $ 264,964 $ 275,959 (1) $ 255,084 Net straight line rent $ 14,784 $ 9,215 $ 6,400 $ 6,487 Lease termination fees $ 511 $ 397 $ 4,857 $ 2,458 Capitalized interest $ 7,847 $ 12,739 $ 14,740 $ 15,800 Net income available to common shareholders before net derivative losses (SFAS No.133) $ 55,613 $ 56,980 $ 65,083 $ 52,887 Funds from operations (FFO) before net derivative losses (SFAS No.133) and early surrender lease income - basic $ 108,820 $ 110,942 $ 106,108 $ 100,124 Company's share $ 88,929 $ 90,704 $ 86,627 $ 81,410 FFO before net derivative losses (SFAS 133) and after early surrender lease income per share - basic $ 0.98 $ 1.00 $ 0.96 $ 0.90 FFO before net derivative losses (SFAS 133) and after early surrender lease income per share - diluted $ 0.93 $ 0.95 $ 0.91 $ 0.86 Dividends per share $ 0.58 $ 0.58 $ 0.58 $ 0.58 Funds available for distribution (FAD) (2) $ 81,799 $ 91,828 $ 73,157 $ 80,335 Ratios: Interest Coverage Ratio (excluding capitalized interest) - cash basis 2.57 2.81 3.04 2.84 Interest Coverage Ratio (including capitalized interest) - cash basis 2.40 2.41 2.52 2.31 FFO Payout Ratio 62.37% 61.05% 63.74% 67.44% FAD Payout Ratio 78.92% 70.10% 88.01% 79.95% MARCH 31, 2002 DECEMBER 31, 2001 SEPTEMBER 30, 2001 JUNE 30, 2001 Capitalization: Total Debt $ 4,361,233 $ 4,314,942 $ 4,245,433 $ 4,177,670 Price @ Quarter End $ 39.4500 $ 38.0000 $ 38.1300 $ 40.9000 Equity Value @ Quarter End $ 4,921,821 $ 4,735,940 $ 4,752,676 $ 5,086,692 Total Market Capitalization $ 9,283,054 $ 9,050,882 $ 8,998,109 $ 9,264,362 Debt/Total Market Capitalization 46.98% 47.67% 47.18% 45.09% (1) Includes non-cash early surrender lease income of $12,445. (2) FAD is defined as FFO after adjustments for second generation lease commissions and tenant improvements, recurring capital expenditures, straight line rents, preferred dividends and distributions and nonrecurring charges. (3) Amortization of financing costs were $1,309, $970, $960 and $911 for the quarters ended March 31, 2002, December 31, 2001, September 30, 2001 and June 30, 2001. These amounts were not included in the calculation of interest coverage ratio. 6
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 CONSOLIDATED BALANCE SHEETS - ------------------------------------------------------------------------------- (in thousands)
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 CAPITAL STRUCTURE - ------------------------------------------------------------------------------- DEBT - ------------------------------------------------------------------------------- (IN THOUSANDS)
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 DEBT ANALYSIS - ------------------------------------------------------------------------------- DEBT MATURITIES AND PRINCIPAL PAYMENTS - ------------------------------------------------------------------------------- (IN THOUSANDS)
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 DEBT MATURITIES AND PRINCIPAL PAYMENTS - ------------------------------------------------------------------------------- (IN THOUSANDS)
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 DEBT MATURITIES AND PRINCIPAL PAYMENTS - ------------------------------------------------------------------------------- (IN THOUSANDS)
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 JOINT VENTURES - ------------------------------------------------------------------------------- MISCELLANEOUS BALANCE SHEET INFORMATION - ------------------------------------------------------------------------------- (UNAUDITED AND IN THOUSANDS) AS OF MARCH 31, 2002
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 JOINT VENTURE DEBT ANALYSIS (*) - ------------------------------------------------------------------------------- DEBT MATURITIES AND PRINCIPAL PAYMENTS - ------------------------------------------------------------------------------- (IN THOUSANDS)
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 PORTFOLIO OVERVIEW - SQUARE FOOTAGE - ------------------------------------------------------------------------------- RENTABLE SQUARE FEET OF IN-SERVICE PROPERTIES BY LOCATION AND TYPE OF PROPERTY - -------------------------------------------------------------------------------
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 IN-SERVICE PROPERTY LISTING - ------------------------------------------------------------------------------- AS OF MARCH 31, 2002
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 IN-SERVICE PROPERTY LISTING - ------------------------------------------------------------------------------- AS OF MARCH 31, 2002
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 IN-SERVICE PROPERTY LISTING - ------------------------------------------------------------------------------- AS OF MARCH 31, 2002
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 IN-SERVICE PROPERTY LISTING - ------------------------------------------------------------------------------- AS OF MARCH 31, 2002
BOSTON PROPERTIES FIRST QUARTER 2002 TOP 20 TENANTS BY SQUARE FEET LEASED - -------------------------------------------------------------------------------
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 PORTFOLIO OVERVIEW - FFO - ------------------------------------------------------------------------------- PERCENTAGE OF PROPERTY FUNDS FROM OPERATIONS (1) FOR IN-SERVICE PROPERTIES BY LOCATION AND TYPE OF PROPERTY FOR THE QUARTER ENDED MARCH 31, 2002 - -------------------------------------------------------------------------------
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 OCCUPANCY ANALYSIS - ------------------------------------------------------------------------------- SAME PROPERTY OCCUPANCY - BY LOCATION - -------------------------------------------------------------------------------
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 IN-SERVICE OFFICE PROPERTIES - ------------------------------------------------------------------------------- LEASE EXPIRATIONS - -------------------------------------------------------------------------------
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 IN-SERVICE OFFICE/TECHNICAL PROPERTIES - ------------------------------------------------------------------------------- LEASE EXPIRATIONS - -------------------------------------------------------------------------------
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 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 EXPIRING LEASES WITH FUTURE STEP-UPS ---------- ------------------- ------------------- ---------------------- 2002 42,276 $ 1,015,720 $ 1,017,432 2003 179,906 4,002,438 4,049,326 2004 123,253 2,711,911 2,814,339 2005 394,855 9,776,249 10,247,648 2006 728,635 20,925,753 21,801,666 2007 127,196 4,039,043 4,267,932 2008 207,959 3,843,493 4,609,180 2009 127,720 2,458,286 3,036,258 2010 13,557 152,918 152,918 2011 4,618 108,751 136,679 Thereafter 4,660 97,787 142,764 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 ------------- ------------------ ------------------ -------------------- 2002 -- -- -- 2003 -- -- -- 2004 -- -- -- 2005 -- -- -- 2006 -- -- -- 2007 -- -- -- 2008 -- -- -- 2009 -- -- -- 2010 -- -- -- 2011 Thereafter -- -- -- INDUSTRIAL -------------------------------------------------------------------------- ANNUALIZED RENTABLE SQUARE CURRENT ANNUALIZED REVENUE UNDER YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS ---------- ------------------ ------------------ --------------------- 2002 -- $ -- $ -- 2003 -- -- -- 2004 161,000 711,750 752,000 2005 -- -- -- 2006 -- -- -- 2007 -- -- -- 2008 -- -- -- 2009 -- -- -- 2010 -- -- -- 2011 -- -- -- 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 ------------- ------------------ ------------------ -------------------- 2002 -- $ 8,721 $ 8,721 2003 3,976 86,215 89,120 2004 2,183 76,471 76,898 2005 2,096 92,170 100,432 2006 15,850 255,963 255,963 2007 12,724 352,618 393,702 2008 -- -- -- 2009 -- -- -- 2010 625 14,754 19,135 2011 -- -- -- Thereafter 1,400 12,100 13,884 34
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 HOTEL PERFORMANCE - ------------------------------------------------------------------------------- LONG WHARF MARRIOTT - BOSTON - ------------------------------------------------------------------------------- FIRST QUARTER FIRST QUARTER PERCENT 2002 2001 CHANGE ------------- ------------- ------- Occupancy 76.1% 70.8% (1) 7.5% Average Daily Rate $ 181.80 $ 216.94 -16.2% REVPAR $ 138.29 $ 153.59 -10.0% CAMBRIDGE CENTER MARRIOTT - ------------------------------------------------------------------------------- FIRST QUARTER FIRST QUARTER PERCENT 2002 2001 CHANGE ------------- ------------- ------- Occupancy 65.7% 77.3% -15.0% Average Daily Rate $ 160.43 $ 185.57 -13.5% REVPAR $ 105.35 $ 143.45 -26.6% RESIDENCE INN BY MARRIOTT - ------------------------------------------------------------------------------- FIRST QUARTER FIRST QUARTER PERCENT 2002 2001 CHANGE ------------- ------------- ------- Occupancy 80.3% 86.8% -7.5% Average Daily Rate $ 125.84 $ 150.48 -16.4% REVPAR $ 101.01 $ 130.62 -22.7% TOTAL HOTEL PERFORMANCE - ------------------------------------------------------------------------------- FIRST QUARTER FIRST QUARTER PERCENT 2002 2001 CHANGE ------------- ------------- ------- Occupancy 72.7% 76.8% -5.3% Average Daily Rate $ 161.33 $ 190.18 -15.2% REVPAR $ 117.00 $ 144.63 -19.1% (1) Room renovation project underway during the 1st quarter 2001. 35
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 SAME PROPERTY PERFORMANCE - ------------------------------------------------------------------------------- OFFICE, OFFICE/TECHNICAL, INDUSTRIAL AND HOTEL PROPERTIES - ------------------------------------------------------------------------------- OFFICE OFFICE/TECHNICAL INDUSTRIAL HOTEL TOTAL -------- ---------------- ---------- ----- ----- Number of Properties 89 26 5 3 123 Square feet 23,782,571 1,501,211 593,222 937,874 26,814,878 Percent of in-service properties 89.9% 96.3% 100.0% 100.0% 91.8% Occupancy @ 3/31/01 98.8% 99.8% 87.3% - 98.5% Occupancy @ 3/31/02 95.2% 97.0% 89.9% - 95.2% Percent change from 1st quarter 2002 over 1st quarter 2001 Revenue (1) 2.2% 10.6% -4.1% -32.4% 1.4% Expense 4.5% -8.6% -9.5% 5.9% 4.3% Net Operating Income (1) 1.1% 16.5% -2.4% -41.9% 0.1% Revenue - cash basis (1) 2.9% 9.6% -2.6% -32.6% 2.0% Net Operating Income - cash basis (1) 2.2% 15.3% -0.4% -42.1% 1.0% SAME PROPERTY LEASE ANALYSIS - QUARTER ENDED MARCH 31, 2002 - ------------------------------------------------------------------------------- OFFICE OFFICE/TECHNICAL INDUSTRIAL TOTAL ------ ---------------- ---------- ----- Vacant space available @01/01/02 (sf) 949,176 30,315 60,000 1,039,491 Square footage of leases expiring or terminated 01/01/02-03/31/02 628,976 16,000 -- 644,976 ----------- --------- ------- ---------- Total space for lease (sf) 1,578,152 46,315 60,000 1,684,467 =========== ========= ======= ========== New tenants (sf) 286,751 1,047 -- 287,798 Renewals (sf) 152,497 -- -- 152,497 ----------- --------- ------- ---------- Total space leased (sf) 439,248 1,047 -- 440,295 =========== ========= ======= ========== Space available @ 3/31/02 (sf) 1,138,904 45,268 60,000 1,244,172 =========== ========= ======= ========== Net increase (decrease) in leased space (sf) (189,728) (14,953) -- (204,681) Average lease term (months) 98 18 -- 98 2nd generation TI/Comm PSF $ 22.41 $ 1.02 $ -- $ 22.37 Increase in 2nd generation net rents (2) 28.2% -- -- 28.2% (1) Does not include termination and early surrender income. (2) Represents increase in net rents on a "cash to cash" basis. (Actual net rent at time of expiration vs. initial net rent of new lease.) 36
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 PROPERTY PERFORMANCE ALL IN-SERVICE PROPERTIES - QUARTER ENDED MARCH 31, 2002 - ------------------------------------------------------------------------------- OFFICE OFFICE/TECHNICAL INDUSTRIAL TOTAL ------ ---------------- ---------- ----- Vacant space available @ 01/01/02 (sf) 1,257,690 30,315 60,000 1,348,005 New development sf completed 1,252,549 32,000 -- 1,284,549 Square footage of leases expiring or terminated 01/01/02-03/31/02 650,921 16,000 -- 666,921 ---------- ------- ------- --------- Total space for lease (sf) 3,161,160 78,315 60,000 3,299,475 ========== ======= ======= ========= New tenants (sf) 1,630,785 33,047 -- 1,663,832 Renewals (sf) 155,368 -- -- 155,368 ---------- ------- ------- --------- Total space leased (sf) 1,786,153 33,047 -- 1,819,200 (2) ========== ======= ======= ========= Space available @ 03/31/02 (sf) 1,375,007 45,268 60,000 1,480,275 ========== ======= ======= ========= Net increase/(decrease) in leased space (sf) (117,317) (14,953) -- (132,270) Average lease term (months) 93 18 -- 92 2nd generation TI/Comm PSF $ 20.95 $ 1.02 $ -- $ 20.91 Increase in 2nd generation net rents (1) 28.0% 0.0% -- 28.0% (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 1,819,200 sf equals 1,334,219 sf 1st generation and 484,981 sf 2nd generation: TOTAL 1ST GENERATION 2ND GENERATION LEASED -------------- -------------- ------- Boston 49,670 86,070 135,740 Washington 213,019 79,033 292,052 New York 1,071,530 178,826 1,250,356 San Francisco -- 99,471 99,471 Princeton -- 41,581 41,581 ------------ -------------- --------- 1,334,219 484,981 1,819,200 ============ ============== ========= 37
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 HISTORICALLY GENERATED CAPITAL EXPENDITURES, TENANT IMPROVEMENT COSTS AND LEASING COMMISSIONS - ------------------------------------------------------------------------------- HISTORICAL CAPITAL EXPENDITURES - ------------------------------------------------------------------------------- (IN THOUSANDS) Q1 2002 2001 2000 1999 1998 1997 -------- -------- -------- -------- ------- ------- Recurring capital expenditures $ 2,946 $ 11,770 $ 11,201 $ 11,611 $ 3,543 $ 1,125 ======== ======== ======== ======== ======= ======= Hotel improvements, equipment upgrades and replacements $ 1,784 $ 9,230 (1) $ 5,697 $ 2,346 $ 3,872 $ 2,625 ======== ======== ======== ======== ======= ======= 2ND GENERATION TENANT IMPROVEMENTS AND LEASING COMMISSIONS - ------------------------------------------------------------------------------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Q1 2002 2001 2000 1999 1998 1997 -------- ---------- ---------- ---------- -------- ---------- Office Square feet 483,934 2,394,291 2,913,599 2,115,281 648,291 1,016,427 -------- ---------- ---------- ---------- -------- ---------- Tenant improvement and lease commissions p.s.f. $ 20.95 $ 17.47 $ 13.82 $ 10.60 $ 9.82 $ 10.83 -------- ---------- ---------- ---------- -------- ---------- Office/Technical Square feet 1,047 348,178 694,536 167,231 113,428 169,878 -------- ---------- ---------- ---------- -------- ---------- Tenant improvement and lease commissions p.s.f. $ 1.02 $ 3.13 $ 2.95 $ 1.94 $ 3.32 $ 2.22 -------- ---------- ---------- ---------- -------- ---------- Industrial Square feet -- -- 209,125 163,962 320,608 258,795 -------- ---------- ---------- ---------- -------- ---------- Tenant improvement and lease commissions p.s.f. $ -- $ -- $ 1.38 $ 0.60 $ 1.13 $ 0.99 -------- ---------- ---------- ---------- -------- ---------- Average tenant improvement and lease commission p.s.f. $ 20.91 $ 15.65 $ 11.16 $ 9.34 $ 6.57 $ 8.06 ======== ========== ========== ========== ======== ========== (1) Includes an addition of period 13 cash payments of $1,295 not previously reported in Q4 results. 38
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 VALUE CREATION PIPELINE - ACQUISITIONS/DISPOSITIONS - ------------------------------------------------------------------------------- AS OF MARCH 31, 2002 ACQUISITIONS - ------------------------------------------------------------------------------- ANTICIPATED INITIAL FUTURE TOTAL CURRENT PROPERTY DATE ACQUIRED SQUARE FEET INVESTMENT INVESTMENT INVESTMENT OCCUPANCY - -------- -------------- ----------- ----------- ----------- ------------- ----------- N/A ----------- ----------- ----------- ------------- ----------- Total Value Creation Pipeline - -- $ -- $ -- $ -- -- Acquisitions =========== =========== =========== ============= =========== DISPOSITIONS - ------------------------------------------------------------------------------- NET PROPERTY DATE DISPOSED SQUARE FEET NET PROCEEDS BOOK VALUE GAIN - -------- ------------- ----------- ------------- ---------- ---- Fullerton Square Mar-02 179,453 $22,193,973 $15,048,473 $ 7,145,500 7600 Boston Boulevard Mar-02 69,832 8,517,245 2,920,113 5,597,132 (1) 7700 Boston Boulevard Mar-02 82,224 16,428,227 10,415,656 6,012,571 (1) 7702 Boston Boulevard Mar-02 43,171 8,916,000 7,000,000 1,916,000 (1),(2) ----------- ------------- ------------ ----------- Total Dispositions 374,680 $56,055,445 $35,384,242 $20,671,203 =========== ============= ============ =========== (1) The gain has been deferred for accounting purposes. (2) Property is currently under development and will be transferred to the buyer subsequent to completion of development. The gain of $1.9 million is an estimate based on the sales price of $8.9 million (of which $2.0 million has been received as of March 31, 2002) and an estimated total project cost of $7.0 million (of which $2.2 million has been incurred as of March 31, 2002). 39
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 VALUE CREATION PIPELINE - CONSTRUCTION IN PROGRESS - ------------------------------------------------------------------------------- AS OF MARCH 31, 2002 DEVELOPMENT PROPERTIES INITIAL OCCUPANCY STABILIZATION DATE LOCATION - ---------------------- ----------------- ------------------ -------- 111 Huntington Avenue - Prudential Center Q3 2001 Q2 2002 Boston, MA 111 Huntington Avenue - retail Q3 2001 Q1 2003 Boston, MA Two Discovery Square (50% ownership) Q2 2002 Q1 2003 Reston, VA Waltham Weston Corporate Center Q1 2002 Q4 2003 Waltham, MA Broad Run Business Park - Building E Q2 2002 Q4 2002 Dulles, VA Two Freedom Square (50% ownership) Q3 2002 Q3 2004 Reston, VA Shaws Supermarket Q2 2003 Q2 2003 Boston, MA 611 Gateway Boulevard Q4 2003 Q4 2004 S. San Francisco, C Times Square Tower Q4 2003 Q4 2004 New York, NY New Dominion Tech, Building Two Q2 2004 Q2 2004 Herndon, VA 901 New York Avenue (25% ownership) Q3 2004 Q4 2004 Washington, D.C. Total Development Properties ANTICIPATED # OF INVESTMENT TOTAL DEVELOPMENT PROPERTIES BUILDINGS SQUARE FEET TO DATE INVESTMENT (1) - ---------------------- ---------- ----------- ---------- ---------- 111 Huntington Avenue - Prudential Center 1 859,484 $ 297,231,396 $ 290,000,000 111 Huntington Avenue - retail -- 93,789 -- n/a Two Discovery Square (50% ownership) 1 184,487 13,968,988 22,663,000 (2) Waltham Weston Corporate Center 1 304,050 62,566,437 95,446,000 Broad Run Business Park - Building E 1 127,226 14,741,837 19,946,000 Two Freedom Square (50% ownership) 1 405,252 31,320,684 49,336,000 (2) Shaws Supermarket 1 57,235 7,508,319 24,034,000 611 Gateway Boulevard 1 249,732 51,949,249 81,221,000 Times Square Tower 1 1,218,511 271,013,710 653,500,000 New Dominion Tech, Building Two 1 257,400 4,570,447 67,589,000 901 New York Avenue (25% ownership) 1 538,464 11,549,132 44,777,250 ---------- ------------ --------------- --------------- Total Development Properties 10 4,295,630 $ 766,420,199 $ 1,348,512,250 ========== ============ =============== =============== TOTAL AMOUNT CURRENT CONSTRUCTION DRAWN AT FUTURE EQUITY PERCENTAGE DEVELOPMENT PROPERTIES LOAN MARCH 31, 2002 REQUIREMENT LEASED - ---------------------- ------------- -------------- ------------- ---------- 111 Huntington Avenue - Prudential Center $ 203,000,000 $ 193,277,324 $-- 96% 111 Huntington Avenue - retail -- -- 61% Two Discovery Square (50% ownership) 20,625,000 9,520,574 -- 41% Waltham Weston Corporate Center 70,000,000 52,643,972 15,523,535 19% Broad Run Business Park - Building E -- -- 5,204,163 55% Two Freedom Square (50% ownership) 45,000,000 (2) 23,470,088 -- 58% Shaws Supermarket 24,000,000 5,623,694 -- 100% 611 Gateway Boulevard -- -- 29,271,751 0% Times Square Tower 493,500,000 158,875,681 47,861,971 51% New Dominion Tech, Building Two -- -- 63,018,553 100% 901 New York Avenue (25% ownership) -- -- 33,228,118 47% --------------- ---------------- --------------- ----------- Total Development Properties $ 856,125,000 $ 443,411,333 $ 194,108,091 58% =============== ================ =============== =========== DEVELOPMENTS PLACED-IN-SERVICE DURING 2002 - ------------------------------------------------------------------------------- PLACED STABILIZATION IN SERVICE DATE DATE LOCATION ---------------- ------------- -------- Class A Office Building One Discovery Square (50% ownership) Q1 2002 Q1 2002 Reston, VA ITT Educational Services Q1 2002 Q1 2002 Springfield, VA 5 Times Square Q1 2002 Q1 2002 New York, NY Total Developments Placed in Service # OF INVESTMENT TOTAL BUILDINGS SQUARE FEET TO DATE INVESTMENT --------- ----------- ---------- ---------- Class A Office Building One Discovery Square (50% ownership) 1 180,052 17,841,628 18,541,000 ITT Educational Services 1 32,000 5,239,876 5,740,000 5 Times Square 1 1,099,154 428,581,857 536,115,000 --------- ------------ ------------- ------------ Total Developments Placed in Service 3 1,311,206 $451,663,361 $560,396,000 ========= ============ ============= ============ CONSTRUCTION DRAWN AT FUTURE EQUITY PERCENTAGE LOAN MARCH 31, 2002 REQUIREMENT LEASED ------------ -------------- ------------- ---------- Class A Office Building One Discovery Square (50% ownership) $ 16,875,000 $ 15,844,426 $ -- 100% ITT Educational Services -- -- 500,124 100% 5 Times Square 420,000,000 309,487,996 (2,978,861) 100% ------------ -------------- -------------- ---------- Total Developments Placed in Service $436,875,000 $325,332,422 $ (2,478,737) 100% ============ ============== ============== ========== (1) Includes net revenues during lease-up period and cash component of hedge contracts. (2) Represents 50% of the total anticipated project-level investment and construction loan. 40
BOSTON PROPERTIES, INC. FIRST QUARTER 2002 - ------------------------------------------------------------------------------- VALUE CREATION PIPELINE - OWNED LAND PARCELS - ------------------------------------------------------------------------------- AS OF MARCH 31, 2002 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 3 26.7 861,000 Boston, MA 2 0.5 776,000 Marlborough, MA 1 50.0 400,000 Weston, MA 1 74.0 350,000 Herndon, VA (1) 1 9.9 126,000 Waltham, MA 1 4.3 202,000 S. San Francisco, CA (2) 1 3.0 121,000 Andover, MA 1 10.0 110,000 ------- ------- ---------- 26 378.0 6,560,000 ======= ======= ========== VALUE CREATION PIPELINE - LAND PURCHASE OPTIONS - ------------------------------------------------------------------------------- AS OF MARCH 31, 2002 NO. OF DEVELOPABLE LOCATION PARCELS ACREAGE SQUARE FEET - -------- -------- -------- ----------- Princeton, NJ (3) 14 149.9 1,900,000 Framingham, MA (4) 1 21.5 300,000 Cambridge, MA (5) 1 2.6 165,000 ------- ------- ---------- 16 174.0 2,365,000 ======= ======= ========== (1) Under contract to be sold for $5.2 million in July 2002. (2) Under contract to be sold for $3.3 million in July 2002. (3) $20.00/FAR plus an earnout calculation. (4) Subject to ground lease. (5) Prior to January 23, 2003 the cost will be $27.72/ 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 (617) 520-7004 (617) 236-3300 Judith Sylk-Siegel - Media (212) 445-8431 BOSTON PROPERTIES, INC. ANNOUNCES FIRST QUARTER 2002 RESULTS REPORTS DILUTED FFO PER SHARE OF $0.93 BOSTON, MA, APRIL 23, 2002 - BOSTON PROPERTIES, INC. (NYSE: BXP) today reported results for the first quarter ended March 31, 2002. Funds from Operations (FFO) for the quarter ended March 31, 2002, including a $4.3 million write-down of securities, were $88.9 million, or $0.98 per share basic and $0.93 per share diluted before an accounting charge related to the application of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" and after an adjustment for early surrender lease payments received. FFO for the first quarter of 2002 compares to FFO of $79.2 million, or $0.89 per share basic and $0.85 per share diluted for the quarter ended March 31, 2001. This represents a 9.4% quarter to quarter increase in diluted FFO per share. The weighted average number of basic and diluted shares outstanding totaled 90,932,427 and 105,767,653, respectively, for the quarter ended March 31, 2002 and 88,687,900 and 104,160,181, respectively, for the same quarter last year. Income before the charge related to SFAS No. 133, gain on sale of real estate, discontinued operations and cumulative effect of a change in accounting principle and including a $4.3 million write-down of securities totaled $49.2 million or $0.53 per share diluted in the first quarter of 2002 as compared to $49.6 million or $0.54 per share diluted for the same period in 2001. 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 March 31, 2002. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made. As of March 31, 2002, the Company's portfolio consisted of 144 properties comprising more than 41.2 million square feet, including 10 properties under development totaling -MORE-
4.3 million square feet. The overall occupancy rate for the properties in service as of March 31, 2002 was 95.1 %. Additional highlights of the first quarter include: o The completion of the One Discovery Square development project, a 180,052 square foot office building in Reston, Virginia. This project is 100% leased. o The completion of the 5 Times Square development project, a 1,099,154 square foot office building in New York City. This project is approximately 98% leased. o The completion of the ITT Educational Services development project, a 32,000 square foot building in Springfield, Virginia. This project is 100% leased. o The closing on March 8, 2002 of construction financing totaling $24.0 million collateralized by the Shaws Supermarket development project at the Prudential Center in Boston, Massachusetts. Such financing bears interest at a rate of LIBOR + 1.40% and matures in September 2003. o The disposition on March 4, 2002 of Fullerton Square, 7600 Boston Boulevard, 7700 Boston Boulevard and 7702 Boston Boulevard, consisting of five office/technical properties totaling 374,680 square feet in Springfield, Virginia for a net gain of approximately $20.7 million, of which $13.5 million has been deferred. o The write-down of our investment in the securities of Captivate Network, Inc. totaling $4.3 million. o Arthur Andersen LLP has a lease for 620,947 square feet at Times Square Tower. Times Square Tower is a 1.2 million square foot office property that is expected to be completed during 2004. Because of our uncertainty over Arthur Andersen LLP's ultimate space needs, we have begun discussions with them about options ranging from reducing the size of the leased premises to termination of the lease. Meanwhile, we continue to actively market space in the building and are encouraged by the level of interest. o The GSA preleased 100% of New Dominion Technology Park, Building Two, a 257,400 square foot office building to be developed in Herndon, Virginia. The building is expected to open in the second quarter of 2004. o Finnegan Henderson Farabow Garret & Dunner, LLP signed a 251,337 square foot lease to occupy 47% of 901 New York Avenue. Construction will commence in the third quarter of 2002 for occupancy at the end of 2004. This property is owned in partnership with the New York State Common Retirement Fund. Boston Properties will conduct a conference call tomorrow, April 24, 2002 at 10 AM (Eastern Time) to discuss the results of this year's first quarter. The number to call for
this interactive teleconference is (888)-806-9467. A replay of the conference call will be available through May 1, 2002 by dialing (888) 266-2086 and entering the passcode 5926554. Additionally, a copy of Boston Properties' first quarter 2002 "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 MARCH 31, --------------------------- 2002 2001 ------------- ----------- (UNAUDITED AND IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS) Revenue Rental: Base rent $ 229,106 $ 184,768 Recoveries from tenants 27,712 25,891 Parking and other 12,096 13,746 --------- --------- Total rental revenue 268,914 224,405 Development and management services 4,134 3,397 Interest and other 1,272 4,444 --------- --------- Total revenue 274,320 232,246 --------- --------- Expenses Operating 85,089 70,070 General and administrative 11,069 9,950 Interest 63,787 47,853 Depreciation and amortization 42,944 34,541 Loss on investments in securities 4,297 -- --------- --------- Total expenses 207,186 162,414 --------- --------- Income before net derivative losses, minority interests, income from unconsolidated joint ventures, minority interest in Operating Partnership, gain on sale of real estate, discontinued operations cumulative effect of a change in accounting principle and preferred dividend 67,134 69,832 Net derivative losses (303) (3,055) Minority interests in property partnerships 471 (255) Income from unconsolidated joint ventures 1,682 1,127 --------- --------- Income before minority interest in Operating Partnership, gain on sale of real estate, discontinued operations, cumulative effect of a change in accounting principle and preferred dividend 68,984 67,649 Minority interest in Operating Partnership (18,386) (18,878) --------- --------- Income before gain on sale, discontinued operations, cumulative effect of a change in accounting principle and preferred dividend 50,598 48,771 Gain on sale of real estate, net of minority interest -- 4,654 --------- --------- Income before discontinued operations, cumulative effect of a change in accounting principle and preferred dividend 50,598 53,425 Discontinued Operations: Income from discontinued operations, net of minority interest 570 592 Gain on sales of real estate from discontinued operations, net of minority interest 5,840 -- --------- --------- Income before cumulative effect of a change in accounting principle and preferred dividend 57,008 54,017 Cumulative effect of a change in accounting principle, net of minority interest -- (6,767) --------- --------- Net income before preferred dividend 57,008 47,250 --------- --------- Preferred dividend (1,643) (1,643) --------- --------- Net income available to common shareholders $ 55,365 $ 45,607 ========= ========= Basic earnings per share: Income before discontinued operations and cumulative effect of a change in accounting principle $ 0.54 $ 0.58 Discontinued operations 0.07 0.01 Cumulative effect of a change in accounting principle -- (0.08) --------- --------- Net income available to common shareholders $ 0.61 $ 0.51 ========= ========= Weighted average number of common shares outstanding 90,932 88,688 ========= ========= Diluted earnings per share: Income before discontinued operations and cumulative effect of a change in accounting principle $ 0.53 $ 0.57 Discontinued operations 0.07 -- Cumulative effect of a change in accounting principle -- (0.07) --------- --------- Net income available to common shareholders $ 0.60 $ 0.50 ========= ========= Weighted average number of common and common equivalent shares outstanding 92,783 91,171 ========= =========
BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS MARCH 31, DECEMBER 31, 2002 2001 ----------- ----------- (IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS) (unaudited) ASSETS Real estate $ 6,646,802 $ 6,140,021 Development in progress 672,901 1,107,835 Land held for future development 206,098 182,672 Real estate held for sale 13,907 27,378 Less: accumulated depreciation (755,156) (719,854) ----------- ----------- Total real estate 6,784,552 6,738,052 Cash and cash equivalents 71,007 98,067 Escrows 45,216 23,000 Investments in securities -- 4,297 Tenant and other receivables 36,846 43,546 Accrued rental income 133,885 119,494 Deferred charges, net 101,580 107,573 Prepaid expenses and other assets 30,235 20,996 Investments in unconsolidated joint ventures 98,071 98,485 ----------- ----------- Total assets $ 7,301,392 $ 7,253,510 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Mortgage notes and bonds payable $ 4,361,233 $ 4,314,942 Accounts payable and accrued expenses 56,125 81,108 Dividends and distributions payable 79,985 79,561 Interest rate contracts 8,635 11,147 Accrued interest payable 15,032 9,080 Other liabilities 75,465 58,859 ----------- ----------- Total liabilities 4,596,475 4,554,697 ----------- ----------- Commitments and contingencies -- -- ----------- ----------- Minority interests 829,687 844,740 ----------- ----------- 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, 91,137,874 and 90,780,591 issued and outstanding in 2002 and 2001, respectively 911 908 Additional paid-in capital 1,809,836 1,789,521 Dividends in excess of earnings (15,084) (17,669) Treasury Common Stock, at cost (2,722) (2,722) Unearned compensation (3,843) (2,097) Accumulated other comprehensive loss (13,868) (13,868) ----------- ----------- Total stockholders' equity 1,775,230 1,754,073 ----------- ----------- Total liabilities and stockholders' equity $ 7,301,392 $ 7,253,510 =========== ===========
BOSTON PROPERTIES, INC. FUNDS FROM OPERATIONS (UNAUDITED AND IN THOUSANDS) THREE MONTHS ENDED ------------------------------- MARCH 31, 2002 2001 ---------- ------------- Income before net derivative losses (SFAS No. 133), minority interests, income from unconsolidated joint ventures, minority interests in Operating Partnership, gain on sales of real estate, discontinued operations, cumulative effect of a change in accounting principle and preferred dividend $ 67,134 $ 69,832 Add: Real estate depreciation and amortization 44,499 35,557 Income from discontinued operations 697 738 Income from unconsolidated joint ventures 1,682 1,127 Less: Net derivative losses (SFAS No. 133) (303) (3,055) Minority property partnerships' share of funds from operations (719) (303) Preferred dividends and distributions (8,400) (8,221) --------- --------- Funds from operations $ 104,590 $ 95,675 Add (subtract): Net derivative losses (SFAS No. 133) 303 3,055 Early surrender lease adjustment 3,927 -- --------- --------- Funds from operations before net derivative losses (SFAS No. 133) and after early surrender lease adjustment $ 108,820 $ 98,730 ========= ========= Funds from operations available to common shareholders before net derivative losses (SFAS No. 133) and after early surrender lease adjustment $ 88,929 $ 79,201 ========= ========= Weighted average shares outstanding - basic 90,932 88,688 ========= ========= FFO per share basic before net derivative losses (SFAS No. 133) and after early surrender adjustment $ 0.98 $ 0.89 ========= ========= FFO per share basic after net derivative losses (SFAS No. 133) and before early surrender lease adjustment $ 0.94 $ 0.87 ========= ========= Weighted average shares outstanding - diluted 105,768 104,160 ========= ========= FFO per share diluted before net derivative losses (SFAS No. 133) and after early surrender lease adjustment $ 0.93 $ 0.85 ========= ========= FFO per share diluted after net derivative losses (SFAS No. 133) and before early surrender lease adjustment $ 0.90 $ 0.83 ========= ========= (1) Represents cash received under contractual obligations.
BOSTON PROPERTIES, INC PORTFOLIO OCCUPANCY Occupancy by Location March 31, 2002 December 31, 2001 -------------------- --------------------- Greater Boston 92.8% 92.3% Greater Washington, D.C. 97.2% 97.8% Midtown Manhattan 99.2% 99.8% Baltimore, MD 98.2% 99.2% Richmond, VA 94.4% 98.4% Princeton/East Brunswick, NJ 89.4% 88.6% Greater San Francisco 92.2% 93.5% Bucks County, PA 100.0% 100.0% ------------------ ------------------- Total Portfolio 95.1% 95.3% ================== =================== Occupancy by Type March 31, 2002 December 31, 2001 ------------------- ----------------------- Class A Office Portfolio 95.0% 95.4% Office/Technical Portfolio 97.0% 97.9% Industrial Portfolio 89.9% 87.3% ------------------- ----------------------- Total Portfolio 95.1% 95.3% =================== =======================