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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 21, 2003

Boston Properties, Inc.
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation)
  1-13087
(Commission
File Number)
  04-2473675
(I.R.S. employer
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 7.    Financial Statements, Pro Forma Financial Information and Exhibits.


Exhibit No.

   
99.1   Boston Properties, Inc. Supplemental Operating and Financial Data for the quarter ended September 30, 2003.
99.2   Press release dated October 21, 2003.


ITEM 12.    Results of Operations and Financial Condition.

        The information in this Current Report on Form 8-K is furnished under Item 12 - "Results of Operations and Financial Condition." Such information, including the exhibits attached hereto, shall not be deemed "filed" for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

        On October 21, 2003, Boston Properties, Inc. (the "Company") issued a press release announcing its financial results for the third quarter of 2003. That press release referred to certain supplemental information that is available on the Company's website. The text of the supplemental information and the press release are attached hereto as Exhibits 99.1 and 99.2 and are incorporated by reference herein.



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 21, 2003   BOSTON PROPERTIES, INC.

 

 

/s/  
DOUGLAS T. LINDE      

 

 

By:

Douglas T. Linde
Chief Financial Officer



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SIGNATURES

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Exhibit 99.1

         GRAPHIC

Supplemental Operating and Financial Data
for the Quarter Ended September 30, 2003


Boston Properties, Inc.
Third Quarter 2003


INDEX

 
  Page

Company Background   3
Investor Information   4-5
Financial Highlights   6
Consolidated Balance Sheets   7
Consolidated Income Statements   8
Funds From Operations   9
Funds Available for Distribution and Ratios   10
Capital Structure   11
Debt Analysis   12-15
Unconsolidated Joint Ventures   16-17
Portfolio Overview—Square Footage   18
Property Listing   19-22
Top 20 Tenants   23
Portfolio Overview   24
Occupancy Analysis   25
Office Properties—Lease Expiration Roll Out   26
Office/Technical Properties—Lease Expiration Roll Out   27
Industrial Properties—Lease Expiration Roll Out   28
Retail Properties—Lease Expiration Roll Out   29
Grand Total—Office, Office/Technical, Industrial and Retail Properties   30
Boston Area Lease Expiration Roll Out   31-32
Washington DC Area Lease Expiration Roll Out   33-34
San Francisco Area Lease Expiration Roll Out   35-36
New York Area Lease Expiration Roll Out   37-38
Princeton Area Lease Expiration Roll Out   39-40
Other Area Lease Expiration Roll Out   41-42
CBD/Suburban Lease Expiration Roll Out   43-44
Hotel Performance   45
Same Property Performance   46
Reconciliation to Same Property Performance   47
In-Service Property Performance   48
Capital Expenditures, Tenant Improvements and Leasing Commissions   49
Value Creation Pipeline—Acquisitions/Dispositions   50
Value Creation Pipeline—Development   51
Value Creation Pipeline—Land Parcels and Purchase Options   52
Definitions   53

        This supplemental package contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words "expects," "plans," "estimates," "projects," "intends," "believes" and similar expressions that do not relate to historical matters. 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, the impact of newly adopted accounting principles on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company does not undertake a duty to update forward-looking statements, including its expected operating results for the fourth quarter of 2003 and the full year of 2004.

2



COMPANY BACKGROUND

        Boston Properties, Inc. (the "Company"), a self-administered and self-managed real estate investment trust (REIT), 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 by Mortimer B. Zuckerman and Edward H. Linde 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. Boston Properties is well known for its in-house building management expertise and responsiveness to tenants' needs.

        The Boston Properties Management Team is among the most distinguished in the REIT industry. This deep and talented team of twenty-eight individuals average twenty-four years of real estate experience and fifteen years with Boston Properties. Chairman Mortimer Zuckerman is nationally known, serving as Chairman and Editor-in-Chief of U.S. News and World Report and Chairman and Publisher of the New York Daily News. He holds an undergraduate degree from McGill University, a law degree from Harvard University and an MBA from the Wharton School, University of Pennsylvania. President and CEO Edward Linde serves on a number of corporate and philanthropic boards, including John Hancock Financial Services, Inc. the Boston Symphony Orchestra, National Association of Real Estate Investment Trusts (NAREIT) and The Real Estate Roundtable. He holds a B.S. Civil Engineering degree from MIT and an MBA with high distinction as a Baker Scholar from Harvard Graduate School of Business Administration.

        Boston Properties' primary business objective is to maximize return on investment in an effort to provide its stockholders with the greatest possible total return. The Company's targeted markets are characterized by high barriers to the creation of new supply and strong real estate fundamentals where tenants have demonstrated a preference for high-quality office buildings and other facilities. Boston Properties' business strategy includes selectively acquiring assets which increase its penetration in the markets in which it has chosen to concentrate while exploring the sale of properties to take advantage of its value creation and the demand for its premier properties, which often results in high sale prices. The Company continues to enhance its balanced capital structure through its access to a variety of sources of capital. Additionally, Boston Properties is an investment grade rated company maintaining current senior unsecured debt ratings of BBB from Standard & Poor's, Baa2 from Moody's Investor Services and BBB from Fitch Ratings.

3



INVESTOR INFORMATION

Corporate Headquarters
111 Huntington Avenue
Boston, MA 02199-7610
(617) 236-3300
(617) 236-3311 (fax)
www.bostonproperties.com
  Stock Exchange Listing
New York Stock Exchange
Trading Symbol
BXP
  Information Requests
To request a standard Investor package or to be added to our quarterly distribution list:
617-236-3322
Investor_relations@bostonproperties.com
Key Management:    
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
Raymond A. Ritchey   Executive Vice President, National Director of Acquisitions and Development
RESEARCH COVERAGE
EQUITY
  DEBT
A.G. Edwards & Sons, Inc.   David AuBuchon   (314) 955-5452   Rating Agencies:        
Banc of America Securities LLC   Lee Schalop   (212) 847-5677   Fitch Ratings   William Travers   (212) 908-0304
Bear Stearns & Company, Inc.   Ross Smotrich   (212) 272-8046   Moody's Investor Services   Lesia Bates Moss   (212) 553-4705
Credit Suisse First Boston, Inc.   Jay Habermann   (212) 538-5250   Standard & Poor's   James Fielding   (212) 438-2452
Deutsche Bank   Louis Taylor   (212) 250-4912            
Friedman, Billings, Ramsey   David Loeb   (703) 469-1289   Analysts:        
Goldman Sachs & Company   Carey Callaghan   (212) 902-4351   Banc of America Securities LLC   Chris Brown   (704) 386-2524
Green Street Advisors, Inc.   Jim Sullivan   (949) 640-8780   Bear, Stearns & Co., Inc.   Susan Berliner   (212) 272-2000
J.P. Morgan Securities, Inc.   Anthony Paolone   (212) 622-6682   BNP Paribas   Erich Marriott   (212) 841-3186
Lehman Brothers   David Shulman   (212) 526-3413   Credit Suisse First Boston, Inc.   Thierry Perrein   (212) 538-8618
McDonald Investments, Inc.   Anatole Pevnev   (216) 263-4783   Deutsche Bank Securities, Inc.   Scott O'Shea   (212) 250-7190
Merrill Lynch & Company, Inc.   Steve Sakwa   (212) 449-0335   J.P. Morgan Securities, Inc.   Mark Streeter   (212) 834-5086
Morgan Stanley & Co., Inc.   Greg Whyte   (212) 761-6331   Merrill Lynch & Company, Inc.   John Forrey   (212) 449-1812
Prudential Equity Group, Inc.   James Sullivan   (212) 778-2515   Smith Barney Citigroup   Thomas Cook   (212) 816-6000
RBC Capital Markets (US)   Jay Leupp   (415) 633-8588   U.S. Bancorp Piper Jaffray   Andrew Rosivach   (212) 284-9304
Smith Barney Citigroup   Jonathan Litt   (212) 816-0231            
UBS Securities, LLC   Keith Mills   (212) 713-3098            

        With the exception of Green Street Advisors, an independent research firm, the equity analysts listed above are those analysts that, according to First Call Corporation, have published research material on the Company or are listed as covering the Company. Please note that any opinions, estimates or forecasts regarding Boston Properties' performance made by the analysts listed above do not represent the opinions, estimates or forecasts of Boston Properties or its management. Boston Properties does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations made by any of such analysts.

TIMING

        Results for the fourth quarter 2003 will be announced in late January 2004.

4


Boston Properties, Inc.
Third Quarter 2003

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 information reported by the New York Stock Exchange):

 
  3rd Quarter 2003
  2nd Quarter 2003
  1st Quarter 2003
  4th Quarter 2002
  3rd Quarter 2002
 
High Price   $ 45.50   $ 44.51   $ 39.29   $ 37.43   $ 39.87  
Low Price   $ 41.55   $ 38.65   $ 34.99   $ 33.93   $ 34.56  
Average Price   $ 43.35   $ 41.36   $ 36.58   $ 36.50   $ 37.64  
Closing Price, at the end of the quarter   $ 43.47   $ 43.80   $ 37.90   $ 36.86   $ 37.20  
Dividends per share—annualized (1)   $ 2.52   $ 2.52   $ 2.44   $ 2.44   $ 2.44  
Closing dividend yield—annualized     5.80 %   5.75 %   6.44 %   6.62 %   6.56 %
Closing common shares outstanding, plus common units and preferred units on an as-converted basis (thousands)     127,037     126,605     125,597     125,038     125,031  
Closing market value of shares and units outstanding (thousands)   $ 5,522,298   $ 5,545,299   $ 4,760,126   $ 4,608,901   $ 4,651,153  

(1)
Reflects dividend increase from $0.61 per share to $0.63 per share effective Q2 2003.

BPLP UNSECURED SENIOR NOTES

 
   
  5/22/2003
  3/18/2003
  1/17/2003
  12/13/2002
 
Settlement Date     5/22/03     3/18/03     1/17/03     12/13/02  
Principal Amount   $ 250,000,000   $ 300,000,000   $ 175,000,000   $ 750,000,000  
Yield (on issue date)     5.075 %   5.636 %   6.280 %   6.296 %
Coupon     5.000 %   5.625 %   6.250 %   6.250 %
Discount     99.329 %   99.898 %   99.763 %   99.650 %

Ratings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Moody's     Baa2 (stable )   Baa2 (stable )   Baa2 (stable )   Baa2 (stable )
  S&P     BBB (stable )   BBB (stable )   BBB (stable )   BBB (stable )
  Fitch     BBB (stable )   BBB (stable )   BBB (stable )   BBB (stable )
Maturity Date     6/1/2015     4/15/2015     1/15/2013     1/15/2013  

5


Boston Properties, Inc.
Third Quarter 2003

FINANCIAL HIGHLIGHTS
(unaudited and in thousands, except per share amounts)

        This section includes non-GAAP financial measures, which are accompanied by what we consider the most directly comparable financial measures calculated and presented in accordance with GAAP. Quantitative reconciliations of the differences between the non-GAAP financial measures presented and the most directly comparable GAAP financial measures are shown on pages 9 and 10. A description of the non-GAAP financial measures we present and a statement of the reasons why management believes the non-GAAP measures provide useful information to investors about the company's financial condition and results of operations can be found on page 53.

 
  Three Months Ended
 
 
  September 30, 2003
  June 30,
2003

  March 31, 2003
  December 31, 2002
  September 30, 2002
 
Income Items:                                
  Revenue   $ 331,169(1 ) $ 323,370(1 ) $ 319,680 (1) $ 333,597 (1) $ 301,193 (1)
  Straight line rent (SFAS 13)   $ 12,144   $ 10,687   $ 10,866   $ 11,938   $ 12,244  
  Fair value lease revenue (SFAS 141)(2)   $ (577 ) $ (167 ) $   $   $  
  Lease termination fees (included in revenues)   $ 1,735   $ 1,419   $ 1,761   $ 3,724   $ 1,858  
  Capitalized interest   $ 4,954   $ 4,601   $ 4,453   $ 4,719   $ 4,684  
  Capitalized wages   $ 1,288   $ 1,325   $ 1,172   $ 1,057   $ 1,562  
  Operating Margins [(rental revenue—rental expenses)/rental revenue] (3)     67.1 %   70.1 %   68.3 %   69.0 %   67.0 %
  Net income available to common shareholders   $ 47,124   $ 63,236   $ 185,045   $ 260,146   $ 71,541  
 
Funds from operations (FFO) available to common shareholders before net derivative gains/losses and after cash basis early surrender lease income (4)

 

$

99,057

 

$

103,360

 

$

102,735

 

$

113,464

 

$

98,980

 
  FFO per share before net derivative gains/losses and after cash basis early surrender lease income—diluted (4)   $ 0.98   $ 1.03   $ 1.03   $ 1.14   $ 1.00  
  Net income available to common shareholders per share—basic   $ 0.48   $ 0.66   $ 1.93   $ 2.73   $ 0.75  
  Net income available to common shareholders per share—diluted   $ 0.48   $ 0.64   $ 1.91   $ 2.70   $ 0.74  
  Dividends per share   $ 0.63   $ 0.63   $ 0.61   $ 0.61   $ 0.61  
  Funds available for distribution (FAD) (5)   $ 100,645   $ 103,611   $ 107,962   $ 112,377   $ 95,901  

Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Interest Coverage Ratio (excluding capitalized interest)—cash basis (6)     2.55     2.64     2.65     2.87     2.70  
  Interest Coverage Ratio (including capitalized interest)—cash basis (6)     2.39     2.48     2.50     2.69     2.52  
  FFO Payout Ratio (7)     64.29 %   61.17 %   59.22 %   53.51 %   61.00 %
  FAD Payout Ratio (8)     74.48 %   71.39 %   65.77 %   62.88 %   73.44 %
 
  September 30, 2003
  June 30,
2003

  March 31, 2003
  December 31, 2002
  September 30, 2002
 

Capitalization:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Total Debt   $ 4,920,343   $ 4,819,282   $ 4,980,113   $ 5,147,220   $ 5,466,692  
  Price @ Quarter End   $ 43.4700   $ 43.8000   $ 37.9000   $ 36.8600   $ 37.2000  
  Equity Value @ Quarter End   $ 5,522,298   $ 5,545,299   $ 4,760,126   $ 4,608,901   $ 4,651,153  
  Total Market Capitalization (9)   $ 10,442,641   $ 10,364,581   $ 9,740,239   $ 9,756,121   $ 10,117,845  
  Debt/Total Market Capitalization (9)     47.12 %   46.50 %   51.13 %   52.76 %   54.03 %

(1)
Includes gross revenues from hotels of $17,542, $17,213, $13,246, $24,779 and $20,007 for the three months ended September 30, 2003, June 30, 2003, March 31, 2003, December 31, 2002, and September 30, 2002, respectively.

(2)
Represents the net adjustment for above and below market leases that are being amortized over the terms of the respective leases in place at the property acquisition dates.

(3)
Rental Expenses include operating expenses and real estate taxes. Amounts are exclusive of the gross up of reimbursable electricity amounts totaling $8,742, $6,459, $5,391, $6,476 and $6,329 for the three months ended September 30, 2003, June 30, 2003, March 31, 2003, December 31, 2002 and September 30, 2002, respectively.

(4)
For a quantitative reconciliation of the differences between FFO and net income available to common shareholders, see page 9.

(5)
For a quantitative reconciliation of the differences between FAD and FFO before net derivative gains/losses and after cash basis early surrender lease income, see page 10.

(6)
For additional detail, see page 10.

(7)
Gross dividends to common shareholders plus distributions to common Operating Partnership unitholders (other than the Company) divided by FFO per share before net derivative gains/losses and after cash basis early surrender lease income—diluted.

(8)
Gross dividends to common shareholders plus distributions to common Operating Partnership unitholders (other than the Company) divided by FAD.

(9)
For additional detail, see page 53.

6


Boston Properties, Inc.
Third Quarter 2003

CONSOLIDATED BALANCE SHEETS
(in thousands)

 
  September 30, 2003
  June 30,
2003

  March 31,
2003

  December 31, 2002
  September 30, 2002
 
 
  (unaudited)

  (unaudited)

  (unaudited)

   
  (unaudited)

 
ASSETS                                
Real estate   $ 8,060,525   $ 7,863,035   $ 7,745,475   $ 7,781,684   $ 8,139,450  
Development in progress     481,571     445,003     418,798     448,576     412,981  
Land held for future development     232,361     218,045     216,537     215,866     213,769  
Real estate held for sale                 224,585      
  Less accumulated depreciation     (952,754 )   (893,246 )   (846,002 )   (822,933 )   (836,418 )
   
 
 
 
 
 
  Total real estate     7,821,703     7,632,837     7,534,808     7,847,778     7,929,782  
Cash and cash equivalents     37,621     158,587     384,418     55,275     28,793  
Escrows     27,992     18,187     20,804     41,906     28,200  
Tenant and other receivables, net     21,813     21,185     23,193     20,458     48,716  
Accrued rental income, net     175,063     160,586     148,034     165,321     156,818  
Deferred charges, net     178,819     168,833     165,559     176,545     148,435  
Prepaid expenses and other assets     57,012     22,090     30,144     18,015     38,752  
Investments in unconsolidated joint ventures     88,632     93,904     101,794     101,905     101,819  
   
 
 
 
 
 
    Total assets   $ 8,408,655   $ 8,276,209   $ 8,408,754   $ 8,427,203   $ 8,481,315  
   
 
 
 
 
 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Liabilities:                                
  Mortgage notes payable   $ 3,450,112   $ 3,349,134   $ 3,758,406   $ 4,267,119   $ 4,422,692  
  Unsecured senior notes, net of discount     1,470,231     1,470,148     1,221,707     747,375      
  Unsecured bridge loan                 105,683     1,000,000  
  Unsecured line of credit                 27,043     44,000  
  Accounts payable and accrued expenses     69,940     49,299     63,319     73,846     69,097  
  Dividends and distributions payable     83,972     84,030     81,128     81,226     81,329  
  Interest rate contracts     9,875     12,677     13,663     14,514     15,115  
  Accrued interest payable     44,010     56,088     37,534     25,141     18,265  
  Minority interest in property partnership at fair value     12,019                  
  Other liabilities     69,242     63,771     63,992     81,085     70,292  
   
 
 
 
 
 
    Total liabilities     5,209,401     5,085,147     5,239,749     5,423,032     5,720,790  
   
 
 
 
 
 
Commitments and contingencies                      
   
 
 
 
 
 
Minority interests     827,537     857,058     860,182     844,581     804,229  
   
 
 
 
 
 
Stockholders' Equity:                                
  Excess stock, $.01 par value, 150,000,000 shares authorized, none issued or outstanding                      
  Preferred stock, $.01 par value, 50,000,000 shares authorized, none issued or outstanding                      
Common stock, $.01 par value, 250,000,000 shares authorized, 97,577,665, 97,028,911, 95,928,738, 95,362,990, and 95,273,202 outstanding, respectively     976     970     959     954     953  
  Additional paid-in capital     2,084,375     2,032,952     2,010,764     1,982,689     1,977,560  
  Earnings in excess of dividends/(dividends in excess of earnings)     312,868     327,222     325,114     198,586     (2,532 )
  Treasury common stock, at cost     (2,722 )   (2,722 )   (2,722 )   (2,722 )   (2,722 )
  Unearned compensation     (7,271 )   (7,734 )   (8,448 )   (2,899 )   (3,355 )
  Accumulated other comprehensive loss     (16,509 )   (16,684 )   (16,844 )   (17,018 )   (13,608 )
   
 
 
 
 
 
    Total stockholders' equity     2,371,717     2,334,004     2,308,823     2,159,590     1,956,296  
   
 
 
 
 
 
      Total liabilities and stockholders' equity   $ 8,408,655   $ 8,276,209   $ 8,408,754   $ 8,427,203   $ 8,481,315  
   
 
 
 
 
 

7


Boston Properties, Inc.
Third Quarter 2003

CONSOLIDATED INCOME STATEMENTS
(in thousands, except for per share amounts)
(unaudited)

 
  Three Months Ended
 
 
  30-Sep-03
  30-Jun-03
  31-Mar-03
  31-Dec-02
  30-Sep-02
 
Revenue:                                
  Rental                                
    Base Rent   $ 253,594   $ 248,848   $ 247,353   $ 253,948   $ 229,453  
    Recoveries from tenants     42,079     37,262     39,881     38,184     34,884  
    Parking and other     13,249     13,955     14,195     13,217     13,056  
   
 
 
 
 
 
      Total rental revenue     308,922     300,065     301,429     305,349     277,393  
  Hotel revenues     17,542     17,213     13,246     24,779     20,007  
  Development and management services     3,616     5,429     4,590     2,769     2,571  
  Interest and other     1,089     663     415     700     1,222  
   
 
 
 
 
 
      Total revenue     331,169     323,370     319,680     333,597     301,193  
   
 
 
 
 
 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Operating     66,526     57,909     61,188     59,328     61,553  
  Real estate taxes     40,878     37,780     37,914     38,969     33,565  
  Hotel operating     12,829     12,258     11,171     17,562     13,524  
  General and administrative     11,183     11,028     11,399     12,703     9,956  
  Interest (1)     75,343     75,447     73,645     71,337     65,476  
  Depreciation and amortization     53,455     50,742     49,824     52,188     43,933  
  Net derivative (gains)/losses     (885 )   991     932     1,461     5,284  
  Loss from early extinguishment of debt             1,474     2,386      
   
 
 
 
 
 
      Total expenses     259,329     246,155     247,547     255,934     233,291  
   
 
 
 
 
 
Income before minority interests and income from unconsolidated joint ventures     71,840     77,215     72,133     77,663     67,902  
Minority interest in property partnerships     563     245     397     162     720  
Income from unconsolidated joint ventures     1,343     1,353     2,658     2,083     2,530  
   
 
 
 
 
 
Income before minority interest in Operating Partnership     73,746     78,813     75,188     79,908     71,152  
Minority interest in Operating Partnership (2)     (18,117 )   (19,123 )   (18,523 )   (19,498 )   (18,071 )
   
 
 
 
 
 
Income before gains on sales of real estate and other assets     55,629     59,690     56,665     60,410     53,081  
Gains on sales of real estate and other assets, net of minority interest     1,341     3,546     52,912     187,562      
   
 
 
 
 
 
Income before gain on sales of land held for development     56,970     63,236     109,577     247,972     53,081  
Gain on sales of land held for development, net of minority interest                     3,644  
   
 
 
 
 
 
Income before discontinued operations     56,970     63,236     109,577     247,972     56,725  
Income from discontinued operations, net of minority interest             1,940     4,529     3,032  
Gains on sales of real estate from discontinued operations, net of minority interest             73,528     7,645     11,910  
   
 
 
 
 
 
Income before cumulative effect of a change in accounting principle     56,970     63,236     185,045     260,146     71,667  
Cumulative effect of a change in accounting principle, net of minority interest (3)     (9,846 )                
   
 
 
 
 
 
Income before preferred dividend     47,124     63,236     185,045     260,146     71,667  
Preferred dividend                     (126 )
   
 
 
 
 
 
Net income available to common shareholders   $ 47,124   $ 63,236   $ 185,045   $ 260,146   $ 71,541  
   
 
 
 
 
 
INCOME PER SHARE OF COMMON STOCK (EPS)                                
  Net income available to common shareholders per share—basic   $ 0.48   $ 0.66   $ 1.93   $ 2.73   $ 0.75  
   
 
 
 
 
 
  Net income available to common shareholders per share—diluted   $ 0.48   $ 0.64   $ 1.91   $ 2.70   $ 0.74  
   
 
 
 
 
 

(1)
Interest expense is reported net of capitalized interest of $4,954, $4,601, $4,453, $4,719 and $4,684 for the three months ended September 30, 2003, June 30, 2003, March 31, 2003, December 31, 2002 and September 30, 2002, respectively.
(2)
Equals minority interest share of 18.08%, 17.45%, 17.62%, 17.69%, and 17.76% of income before minority interest in Operating Partnership after deduction for preferred dividends and distributions for the three months ended September 30, 2003, June 30, 2003, March 31, 2003, December 31, 2002 and September 30, 2002, respectively.
(3)
Represents the cumulative impact of the Company's adoption of SFAS No. 150, which required the Company to reflect the minority interest of a consolidated joint venture at its fair value.

        Certain prior period amounts have been reclassified to conform to current period presentation.

8


Boston Properties, Inc.
Third Quarter 2003

FUNDS FROM OPERATIONS
(in thousands, except for per share amounts)
(unaudited)

 
  Three Months Ended

 
  30-Sep-03
  30-Jun-03
  31-Mar-03
  31-Dec-02
  30-Sep-02
Net income available to common shareholders   $ 47,124   $ 63,236   $ 185,045   $ 260,146   $ 71,541
  Add:                              
    Preferred dividend                     126
    Minority interest in Operating Partnership     18,117     19,123     18,523     19,498     18,071
    Cumulative effect of a change in accounting principle, net of minority interest     9,846                
  Less:                              
    Minority interest in property partnerships     563     245     397     162     720
    Income from unconsolidated joint ventures     1,343     1,353     2,658     2,083     2,530
    Gain on sales of real estate and other assets, net of minority interest     1,341     3,546     52,912     187,562    
    Gain on sales of land held for development, net of minority interest                     3,644
    Income from discontinued operations, net of minority interest             1,940     4,529     3,032
    Gain on sales of real estate from discontinued operations, net of minority interest             73,528     7,645     11,910
   
 
 
 
 
Income before minority interests and income from unconsolidated joint ventures     71,840     77,215     72,133     77,663     67,902
Add:                              
  Real estate depreciation and amortization (1)     54,606     52,338     51,791     56,072     46,971
    Income from discontinued operations             2,355     5,503     3,687
    Income from unconsolidated joint ventures     1,343     1,353     2,658     2,083     2,530
    Loss from early extinguishment of debt associated with the sale of properties             1,474     2,386    
  Less:                              
    Minority property partnership's share of funds from operations     805     842     866     1,390     521
    Preferred dividends and distributions     5,183     5,852     5,771     5,926     6,162
   
 
 
 
 
Funds from operations (FFO)     121,801     124,212     123,774     136,391     114,407
  Add (subtract):                              
    Net derivative losses     (885 )   991     932     1,461     5,284
    Early surrender lease payments received — contractual basis                     667
   
 
 
 
 
FFO before net derivative gains/losses and after early surrender lease payments received   $ 120,916   $ 125,203   $ 124,706   $ 137,852   $ 120,358
   
 
 
 
 
FFO available to common shareholders before net derivative gains/losses and after early surrender lease payments received (2)   $ 99,057   $ 103,360   $ 102,735   $ 113,464   $ 98,980
   
 
 
 
 
FFO per share before net derivative gains/losses and after cash basis early surrender lease income — basic   $ 1.02   $ 1.07   $ 1.07   $ 1.19   $ 1.04
   
 
 
 
 
Weighted average shares outstanding — basic     97,360     96,531     95,733     95,313     94,904
   
 
 
 
 
FFO per share before net derivative gains/losses and after early surrender lease payments received — diluted   $ 0.98   $ 1.03   $ 1.03   $ 1.14   $ 1.00
   
 
 
 
 
FFO per share after net derivative gains/losses and before early surrender lease payments received — diluted   $ 0.99   $ 1.02   $ 1.02   $ 1.13   $ 0.95
   
 
 
 
 
Weighted average shares outstanding — diluted     107,231     107,408     105,955     105,631     105,725
   
 
 
 
 

RECONCILIATION TO DILUTED FUNDS FROM OPERATIONS
(in thousands, except for per share amounts)
(unaudited)

 
  September 30, 2003
  June 30, 2003
  March 31, 2003
  December 31, 2002
  September 30, 2002
 
  Income
(Numerator)

  Shares
(Denominator)

  Income
(Numerator)

  Shares
(Denominator)

  Income
(Numerator)

  Shares
(Denominator)

  Income
(Numerator)

  Shares
(Denominator)

  Income
(Numerator)

  Shares
(Denominator)

Basic FFO before net derivative gains/losses and after early surrender                                                  
lease income   $ 120,916   118,846   $ 125,203   116,931   $ 124,706   116,207   $ 137,852   115,800   $ 120,358   115,402
Effect of Dilutive Securities                                                  
Convertible Preferred Units     5,183   8,047     5,852   9,195     5,771   9,199     5,926   9,236     6,036   9,344
Convertible Preferred Stock                             126   200
Stock Options and other       1,823       1,682       1,022       1,082       1,276
   
 
 
 
 
 
 
 
 
 
Diluted FFO before net derivative gains/losses and after early surrender lease payments received   $ 126,099   128,716   $ 131,055   127,808   $ 130,477   126,428   $ 143,778   126,118   $ 126,520   126,222
   
 
 
 
 
 
 
 
 
 
Company's share of diluted FFO before net derivative gains/losses and after early surrender lease payments received (3)   $ 105,051   107,231   $ 110,137   107,408   $ 109,348   105,955   $ 120,422   105,631   $ 105,974   105,725
   
 
 
 
 
 
 
 
 
 
FFO per share before net derivative gains/losses and after early surrender lease payments received — basic   $ 1.02       $ 1.07       $ 1.07       $ 1.19       $ 1.04    
   
     
     
     
     
   
FFO per share before net derivative gains/losses and after early surrender lease payments received — diluted   $ 0.98       $ 1.03       $ 1.03       $ 1.14       $ 1.00    
   
     
     
     
     
   

(1)
Real estate depreciation includes the Company's share of joint venture real estate depreciation of $1,821, $2,266, $2,514, $2,848 and $2,170 less corporate related depreciation of $670, $670, $674, $733 and $733 for the three months ended September 30, 2003, June 30, 2003, March 31, 2003, December 31, 2002 and September 30, 2002, respectively.

(2)
Based on weighted average shares for the quarter. Company's share for the quarter ended September 30, 2003, June 30, 2003, March 31, 2003, December 31, 2002 and September 30, 2002 was 81.92%, 82.55%, 82.38%, 82.31%, and 82.24%, respectively.

(3)
Based on weighted average diluted shares for the quarter. Company's share for the quarter ended September 30, 2003, June 30, 2003, March 31, 2003, December 31, 2002 and September 30, 2002 was 83.31%, 84.04%, 83.81%, 83.76% and 83.76%, respectively.

9


Boston Properties, Inc.
Third Quarter 2003

Funds Available for Distribution (FAD)
(in thousands)

 
  Three Months Ended

 
 
  September 30, 2003
  June 30, 2003
  March 31, 2003
  December 31, 2002
  September 30, 2002
 
Funds from operations (FFO) before net derivative gains/losses and after cash basis early surrender lease income (see page 9)   $ 120,916   $ 125,203   $ 124,706   $ 137,852   $ 120,358  
Add: Non real estate depreciation     670     670     674     733     733  
  Fair value lease revenue (SFAS 141)     577     167              
  Less: Straight-line rent     (12,144 )   (10,687 )   (10,866 )   (11,938 )   (12,244 )
  Recurring capital expenditures     (3,415 )   (4,726 )   (1,960 )   (5,909 )   (4,266 )
  Hotel improvements, equipment upgrades and replacements     (353 )   (911 )   (405 )   (188 )   (394 )
  2nd generation tenant improvements and leasing commissions     (5,606 )   (6,105 )   (4,187 )   (8,173 )   (8,286 )
   
 
 
 
 
 
Funds available for distribution (FAD)   $ 100,645   $ 103,611   $ 107,962   $ 112,377   $ 95,901  
   
 
 
 
 
 


Interest Coverage Ratios
(in thousands, except for ratio amounts)

 
  Three Months Ended

 
 
  September 30, 2003
  June 30, 2003
  March 31, 2003
  December 31, 2002
  September 30, 2002
 
Excluding Capitalized Interest                                
Income before minority interests and income from unconsolidated joint ventures   $ 71,840   $ 77,215   $ 72,133   $ 77,663   $ 67,902  
Add:                                
  Discontinued operations             2,355     5,503     3,687  
  Interest expense     75,343     75,447     73,645     71,337     65,476  
  Depreciation     53,455     50,742     49,824     52,188     43,933  
  Net derivative (gains)/losses     (885 )   991     932     1,461     5,284  
  Prepayment penalty             1,474     2,386      
  Income from unconsolidated joint ventures     1,343     1,353     2,658     2,083     2,530  
  Discontinued Operations — depreciation             127     1,781     1,601  
  Discontinued Operations — interest expense             296     809     2,949  
  Fair value lease revenue (SFAS 141)     577     167              
Less:                                
  Straight-line rent     (12,144 )   (10,687 )   (10,866 )   (11,938 )   (12,244 )
   
 
 
 
 
 
Subtotal     189,529     195,228     192,578     203,273     181,118  
Divided by:                                
  Interest expense (1)     74,214     74,077     72,352     69,901     64,202  
  Interest expense — discontinued operations             296     809     2,949  
   
 
 
 
 
 
Total interest expense     74,214     74,077     72,648     70,710     67,151  
Interest Coverage Ratio     2.55     2.64     2.65     2.87     2.70  
   
 
 
 
 
 
Including Capitalized Interest                                
Income before minority interests and income from unconsolidated joint ventures   $ 71,840   $ 77,215   $ 72,133   $ 77,663   $ 67,902  
Add:                                
  Discontinued operations             2,355     5,503     3,687  
  Interest expense     75,343     75,447     73,645     71,337     65,476  
  Depreciation     53,455     50,742     49,824     52,188     43,933  
  Net derivative (gains)/losses     (885 )   991     932     1,461     5,284  
  Prepayment penantly             1,474     2,386      
  Income from unconsolidated joint ventures     1,343     1,353     2,658     2,083     2,530  
  Discontinued Operations — depreciation             127     1,781     1,601  
  Discontinued Operations — interest expense             296     809     2,949  
  Fair value lease revenue (SFAS 141)     577     167              
Less:                                
Straight-line rent     (12,144 )   (10,687 )   (10,866 )   (11,938 )   (12,244 )
   
 
 
 
 
 
Subtotal     189,529     195,228     192,578     203,273     181,118  
Divided by:                                
  Interest expense (1) (2)     79,168     78,678     76,805     74,763     68,867  
  Interest expense — discontinued operations             296     809     2,949  
   
 
 
 
 
 
    Total interest expense     79,168     78,678     77,101     75,572     71,816  
   
 
 
 
 
 
Interest Coverage Ratio     2.39     2.48     2.50     2.69     2.52  
   
 
 
 
 
 

(1)
Excludes amortization of financing costs of $1,129, $1,370, $1,293, $1,436 and $1,274 for the quarters ended September 30, 2003, June 30, 2003, March 31, 2003, December 31, 2002 and September 30, 2002, respectively.

(2)
Includes capitalized interest of $4,954, $4,601, $4,453, $4,719 and $4,684 for the quarters ended September 30, 2003, June 30, 2003, March 31, 2003, December 31, 2002 and September 31, 2002, respectively.

10



Boston Properties, Inc.
Third Quarter 2003


CAPITAL STRUCTURE


Debt
(in thousands)

 
  Aggregate Principal
September 30, 2003

Mortgage Notes Payable   $ 3,450,112
Unsecured Senior Notes, net of discount     1,470,231
Unsecured Line of Credit    
   
Total Debt   $ 4,920,343
   


Equity
(in thousands)

 
  Shares & Units
Outstanding

  Common
Stock
Equivalents

  Equivalent (1)
Common Stock   97,578   97,578   $ 4,241,716
Operating Partnership Units   22,372   22,372     972,511
Preferred Operating Partnership Units              
Series Two   5,401   7,087     308,071
       
 
Total Equity       127,037   $ 5,522,298
       
 
Total Market Capitalization           $ 10,442,641
           

(1)
Value based on September 30, 2003 closing price of $43.47 per share of common stock.

11



Boston Properties, Inc.
Third Quarter 2003


DEBT ANALYSIS


Debt Maturities and Principal Payments
(in thousands)

 
  2003 (1)
  2004
  2005
  2006
  2007
  Thereafter
  Total
 
Amount   $ 11,589   $ 424,116   $ 308,384   $ 306,983   $ 185,171   $ 3,684,100   $ 4,920,343  
Weighted Average Rate     7.07 %   4.20 %   6.56 %   6.27 %   6.59 %   6.66 %   6.41 %

(1)
Consists of remaining portion of 2003.


Unsecured Debt
Unsecured Line of Credit — Matures January 17, 2006
(in thousands)

Facility
  Outstanding
@9/30/03

  Letters of
Credit

  Remaining
Capacity
@9/30/03

$ 605,000   $   $ 6,670   $ 598,330


Unsecured Senior Notes
(in thousands)

Face Amount
@9/30/03

  Amount net of discount
@9/30/03

$ 1,475,000   $ 1,470,231


Unsecured and Secured Debt Analysis

 
  % of Total Debt
  Weighted
Average Rate

  Weighted Average
Maturity

Unsecured Debt   29.88 % 5.95 % 10.2 years
Secured Debt   70.12 % 6.61 % 5.2 years
   
 
 
Total Debt   100.00 % 6.41 % 6.7 years
   
 
 


Floating and Fixed Rate Debt Analysis

 
  % of Total Debt
  Weighted
Average Rate

  Weighted Average
Maturity

Floating Rate Debt   6.95 % 3.02 % 1.3 years
Fixed Rate Debt   93.05 % 6.67 % 7.1 years
   
 
 
Total Debt   100.00 % 6.41 % 6.7 years
   
 
 

12


Boston Properties, Inc.
Third Quarter 2003

Senior Unsecured Debt Covenant Compliance Ratios
(in thousands)

        In the fourth quarter of 2002 the Company's operating partnership received investment grade ratings on its senior unsecured debt securities and thereafter issued unsecured notes. The notes were issued under an indenture, dated as of December 13, 2002, by and between Boston Properties Limited Partnership and The Bank of New York, as trustee, as supplemented, which, among other things, requires us to comply with the following limitations on incurrence of debt: Limitation on Outstanding Debt; Limitation on Secured Debt; Ratio of Annualized Consolidated EBITDA to Annualized Interest Expense; and Maintenance of Unencumbered Assets. Compliance with these restrictive covenants requires us to apply specialized terms the meanings of which are described in detail in our filings with the SEC, and to calculate ratios in the manner prescribed by the indenture.

        This section presents such ratios as of September 30, 2003 to show that the Company's operating partnership was in compliance with the terms of the indenture, as amended, which has been filed with the SEC. Management is not presenting these ratios and the related calculations for any other purpose or for any other period, and is not intending for these measures to otherwise provide information to



investors about the Company's financial condition or results of operations. Investors should not rely on these measures other than for purposes of testing our compliance with the indenture.

 
  September 30, 2003
 
Total Assets:        
  Capitalized Property Value   $ 10,134,625  
  Cash and Cash Equivalents     37,621  
  Undeveloped Land, at Cost     232,361  
  Development in Process, at Cost (including Joint Venture %)     501,530  
   
 
Total Assets   $ 10,906,137  
   
 
Unencumbered Assets   $ 4,332,181  
   
 
  Secured Debt (Fixed and Variable) (1)   $ 3,438,204  
  Joint Venture Debt     158,682  
  Contingent Liabilities & Letters of Credit     19,740  
  Unsecured Debt (2)     1,475,000  
   
 
Total Outstanding Debt   $ 5,091,626  
   
 
Consolidated EBITDA:        
Income before minority interests and income from unconsolidated joint ventures (per Consolidated Income Statement)   $ 71,840  
  Add: Interest Expense (per Consolidated Income Statement)     75,343  
  Add: Depreciation and Amortization (per Consolidated Income Statement)     53,455  
  Less: Net derivative gains/losses (SFAS No. 133) (per Consolidated Income Statement)     (885 )
   
 
EBITDA     199,753  
  Add: Company share of unconsolidated joint venture EBITDA     7,510  
   
 
  Consolidated EBITDA   $ 207,263  
Adjusted Interest Expense:        
  Interest Expense (per Consolidated Income Statement)   $ 75,343  
  Add: Company share of unconsolidated joint venture interest expense     3,552  
  Less: amortization of financing costs     (1,129 )
   
 
Adjusted Interest Expense   $ 77,766  
   
 
Covenant Ratios

  Test

  Actual
 
Total Outstanding Debt/Total Assets   Less than 60%     46.7 %
Secured Debt/Total Assets   Less than 50%     33.0 %
Interest Coverage (Annualized Consolidated EBITDA to Annualized Interest Expense)   Greater than 1.50x     2.67  
Unencumbered Assets/ Unsecured Debt   Greater than 150%     293.7 %
       
 
Unencumbered Consolidated EBITDA       $ 83,504  
       
 
Unencumbered Interest Coverage (Unencumbered Consolidated EBITDA to Unsecured Interest Expense)         3.76  
       
 
% of unencumbered Consolidated EBITDA to Consolidated EBITDA         40.3 %
       
 
# of unencumbered properties         71  
       
 
(1)
Excludes Fair Value Adjustment of $11.9 million.
(2)
Excludes Debt Discount of $4.8 million.

13


Boston Properties, Inc.
Third Quarter 2003

DEBT MATURITIES AND PRINCIPAL PAYMENTS
(in thousands)

Property
  2003
  2004
  2005
  2006
  2007
  Thereafter
  Total
Citigroup Center   $ 1,480   $ 6,191   $ 6,651   $ 7,145   $ 7,676   $ 483,253   $ 512,396
Times Square Tower         310,362                     310,362
Embarcadero Center One, Two and Federal Reserve     1,152     4,809     5,141     5,496     5,877     278,913     301,388
Prudential Center     1,115     4,591     4,919     5,256     5,619     259,705     281,205
280 Park Avenue     720     3,022     3,261     3,519     3,798     248,794     263,114
599 Lexington Avenue             225,000                 225,000
Embarcadero Center Four     856     3,544     3,797     4,061     4,346     129,711     146,315
Embarcadero Center Three     565     2,351     2,506     2,671     132,726         140,819
Riverfront Plaza     697     2,905     3,104     3,314     3,540     95,327     108,887
Democracy Center     470     1,961     2,103     2,257     2,421     93,728     102,940
Embarcadero Center West Tower     372     1,546     1,649     90,415             93,982
100 East Pratt Street     462     1,964     2,100     2,246     2,401     78,105     87,278
One Freedom Square     432     1,792     1,896     2,005     2,122     75,886     84,133
601 and 651 Gateway Boulevard                 82,163             82,163
One & Two Reston Overlook     210     65,908                     66,118
202, 206 & 214 Carnegie Center     156     663     719     780     845     58,217     61,380
New Dominion Technology Park, Building One         91     654     1,282     1,378     54,042     57,447
Reservoir Place     385     1,321     1,400     1,484     1,572     50,258     56,420
Capital Gallery     333     1,404     1,524     50,651             53,912
504, 506 & 508 Carnegie Center     257     1,052     1,136     1,221     1,314     40,915     45,895

14


Boston Properties, Inc.
Third Quarter 2003


DEBT MATURITIES AND PRINCIPAL PAYMENTS
(in thousands)

Property
  2003
  2004
  2005
  2006
  2007
  Thereafter
  Total
10 & 20 Burlington Mall Rd & 91 Hartwell     110     688     741     795     855     35,589     38,778
10 Cambridge Center     144     607     659     715     777     31,436     34,338
New Dominion Technology Park, Bldg. 2             31,515                 31,515
1301 New York Avenue     313     1,315     1,417     1,531     1,651     23,409     29,636
Sumner Square     124     518     557     599     645     26,936     29,379
Eight Cambridge Center     133     557     601     649     702     24,486     27,128
510 Carnegie Center     142     588     635     683     735     23,519     26,302
Lockheed Martin Building     155     641     685     732     782     21,799     24,794
University Place     168     702     752     806     864     20,338     23,630
Reston Corporate Center     149     612     654     698     745     20,523     23,381
NIMA Building     128     530     566     604     644     17,785     20,257
Bedford Business Park     163     690     751     818     890     16,859     20,171
191 Spring Street     34     443     482     18,773             19,732
101 Carnegie Center     90     375     406     6,622             7,493
Montvale Center     42     173     189     6,762             7,166
Hilltop Business Center     32     200     214     230     246     4,336     5,258
   
 
 
 
 
 
 
      11,589     424,116     308,384     306,983     185,171     2,213,869     3,450,112
   
 
 
 
 
 
 
Unsecured Senior Notes                         1,470,231     1,470,231
Unsecured Line of Credit                            
   
 
 
 
 
 
 
    $ 11,589   $ 424,116   $ 308,384   $ 306,983   $ 185,171   $ 3,684,100   $ 4,920,343
   
 
 
 
 
 
 

15


Boston Properties, Inc.
Third Quarter 2003


UNCONSOLIDATED JOINT VENTURES
Miscellaneous Balance Sheet Information
(unaudited and in thousands)
as of September 30, 2003

 
  Market
Square
North

  Metropolitan
Square

  140
Kendrick
Street

  265
Franklin
Street

  901
New York
Avenue (1)

  801
New Jersey
Avenue (1)

  Combined
Total Equity (2)   $ 10,818   $ 32,085   $ 5,446   $ 23,113   $ 14,170   $ 3,000   $ 88,632
   
 
 
 
 
 
 
Mortgage/Construction loans payable (2)   $ 48,046   $ 69,305   $ 13,953   $ 18,897   $ 8,481   $   $ 158,682
   
 
 
 
 
 
 
BXP's nominal ownership percentage     50.00 %   51.00 %   25.00 %   35.00 %   25.00 %   50.00 %    
   
 
 
 
 
 
 


Results of Operations
(unaudited and in thousands)
for the three months ended September 30, 2003

 
  One
Freedom
Square (3)

  Market
Square
North

  Metropolitan
Square

  140
Kendrick
Street

  265
Franklin
Street

  Two
Freedom
Square (3)

  901
New York
Avenue (1)

  801
New Jersey
Avenue (1)

  Combined
 
REVENUE                                                        
Total revenue   $ 1,393   $ 5,133   $ 6,287   $ 2,805   $ 3,540   $ 1,477   $   $   $ 20,635 (4)
   
 
 
 
 
 
 
 
 
 
EXPENSES                                                        
Operating     236     1,519     2,142     474     1,850     219             6,440  
   
 
 
 
 
 
 
 
 
 
SUBTOTAL     1,157     3,614     4,145     2,331     1,690     1,258             14,195  
Interest     551     1,861     2,824     1,054     348     245             6,883  
Depreciation and amortization     281     1,348     1,162     350     693     206             4,040  
   
 
 
 
 
 
 
 
 
 
NET INCOME   $ 325   $ 405   $ 159   $ 927   $ 649   $ 807   $   $   $ 3,272  
   
 
 
 
 
 
 
 
 
 
BXP's share of net income   $ 81   $ 203   $ 81   $ 347 (5) $ 227   $ 404   $   $   $ 1,343  
BXP's share of depreciation & amortization     70     674     593     138     243     103             1,821  
   
 
 
 
 
 
 
 
 
 
BXP's share of Funds from Operations (FFO)   $ 151   $ 877   $ 674   $ 485 (5) $ 470   $ 507   $   $   $ 3,164  
   
 
 
 
 
 
 
 
 
 
(1)
Property is currently not in operation (i.e., under construction or undeveloped land).

(2)
Represents the Company's share.

(3)
The Company acquired the remaining outside interests in these joint ventures on August 5, 2003.

(4)
The impact of the straight-line rent adjustment increased revenue by $1,140 for the three months ended September 30, 2003.

(5)
Reflects the changes in the allocation percentages pursuant to the achievement of specified investment return thresholds as provided for in the joint venture agreement.

16


Boston Properties, Inc.
Third Quarter 2003


UNCONSOLIDATED JOINT VENTURE DEBT ANALYSIS (*)


Debt Maturities and Principal Payments
(in thousands)

 
  2003
  2004
  2005
  2006
  2007
  Thereafter
  Total
 
Amount   $ 423   $ 20,678   $ 10,406   $ 2,085   $ 2,255   $ 122,835   $ 158,682  
Weighted Average Rate     7.91 %   2.89 %   3.73 %   7.91 %   7.91 %   7.96 %   7.02 %


Floating and Fixed Rate Debt Analysis

 
  % of Total Debt
  Weighted
Average Rate

  Weighted Average
Maturity

   
Floating Rate Debt   17.25 % 2.53 % 1.4   years
Fixed Rate Debt   82.75 % 7.96 % 7.2   years
   
 
 
 
Total Debt   100.00 % 7.02 % 6.2   years
   
 
 
 


Debt Maturities and Principal Payments by Property
(in thousands)

Property

  2003
  2004
  2005
  2006
  2007
  Thereafter
  Total
Metropolitan Square (51%)*   $ 182   $ 764   $ 830   $ 901   $ 978   $ 65,650   $ 69,305
Market Square North (50%)*     204     860     926     1,001     1,080     43,975     48,046
265 Franklin Street (35%)*         18,897                     18,897
140 Kendrick Street (25%)*     37     157     169     183     197     13,210     13,953
901 New York Avenue (25%)*             8,481                 8,481
   
 
 
 
 
 
 
    $ 423   $ 20,678   $ 10,406   $ 2,085   $ 2,255   $ 122,835   $ 158,682
   
 
 
 
 
 
 
(*)
All amounts represent the Company's share.

17



Boston Properties, Inc.
Third Quarter 2003


PORTFOLIO OVERVIEW — SQUARE FOOTAGE
Rentable Square Footage of In-Service Properties by Location and Type of Property

Geographic Area
  Office (1)
  Office/Technical
  Industrial
  Total
  % of Total
 
Greater Boston   7,804,587 (2) 545,206   169,273   8,519,066   27.29 %
Greater Washington   6,249,534 (3) 970,865     7,220,399   23.13 %
Greater San Francisco   4,715,032   144,366   60,000   4,919,398   15.76 %
Midtown Manhattan   6,546,093       6,546,093   20.97 %
Princeton/East Brunswick, NJ   2,316,023       2,316,023   7.42 %
Baltimore, MD   635,223       635,223   2.03 %
Richmond, VA   900,137       900,137   2.88 %
Bucks County, PA       161,000   161,000   0.52 %
   
 
 
 
 
 
    29,166,629   1,660,437   390,273   31,217,339   100.00 %
   
 
 
 
 
 
% of Total   93.43 % 5.32 % 1.25 % 100.00 %    


Hotel Properties

Hotel Properties

  Number of
Rooms

  Square
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
Spaces

  Square
Feet

Total Structured Parking   30,812   9,318,846
   
 
(1)
Includes approximately 1,300,000 square feet of retail space.

(2)
Includes 344,126 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 585,220 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.

18



Boston Properties, Inc.
Third Quarter 2003


In-Service Property Listing
as of September 30, 2003

Greater Boston

  Sub Market
  Number of
Buildings

  Square Feet
  Leased %
  Annualized
Revenue
Per
Leased SF

  Encumbered
with secured
debt
(Y/N)

  Central
Business
District (CBD) or
Suburban (S)

Office                              
    800 Boylston Street—The Prudential Center   CBD Boston MA   1   1,175,739   90.8 % $ 38.07   Y   CBD
    111 Huntington Avenue—The Prudential Center   CBD Boston MA   1   853,672   99.0 %   49.12   N   CBD
    101 Huntington Avenue—The Prudential Center   CBD Boston MA   1   504,488   80.1 %   39.69   Y   CBD
(1)   The Shops at the Prudential Center   CBD Boston MA   1   535,755   95.7 %   50.47   Y   CBD
(2)   Shaws Supermarket at the Prudential Center   CBD Boston MA   1   57,235   100.0 %   44.79   N   CBD
    265 Franklin Street (35% ownership)   CBD Boston MA   1   344,126   74.6 %   54.88   Y   CBD
    One Cambridge Center   East Cambridge MA   1   215,385   93.5 %   44.20   N   CBD
    Three Cambridge Center   East Cambridge MA   1   107,484   100.0 %   31.56   N   CBD
    Eight Cambridge Center   East Cambridge MA   1   177,226   100.0 %   31.87   Y   CBD
    Ten Cambridge Center   East Cambridge MA   1   152,664   100.0 %   32.39   Y   CBD
    Eleven Cambridge Center   East Cambridge MA   1   79,616   100.0 %   43.49   N   CBD
    University Place   Mid-Cambridge MA   1   195,282   100.0 %   36.76   Y   CBD
    Reservoir Place   Route 128 Mass Turnpike MA   1   526,165   80.0 %   32.48   Y   S
    204 Second Avenue   Route 128 Mass Turnpike MA   1   40,974   52.7 %   36.56   N   S
    140 Kendrick Street (25% ownership)   Route 128 Mass Turnpike MA   3   380,987   100.0 %   27.53   Y   S
    170 Tracer Lane   Route 128 Mass Turnpike MA   1   75,073   56.0 %   25.50   N   S
    Waltham Office Center   Route 128 Mass Turnpike MA   3   129,041   85.1 %   29.98   N   S
    195 West Street   Route 128 Mass Turnpike MA   1   63,500   100.0 %   47.17   N   S
    200 West Street   Route 128 Mass Turnpike MA   1   248,048   100.0 %   35.15   N   S
(2)   Waltham Weston Corporate Center   Route 128 Mass Turnpike MA   1   306,354   56.3 %   28.40   N   S
    10 & 20 Burlington Mall Road   Route 128 Northwest MA   2   152,960   89.3 %   28.94   Y   S
    Bedford Business Park   Route 128 Northwest MA   1   90,000   100.0 %   20.70   Y   S
    32 Hartwell Avenue   Route 128 Northwest MA   1   69,154   100.0 %   29.38   N   S
    91 Hartwell Avenue   Route 128 Northwest MA   1   121,486   79.6 %   34.43   Y   S
    92 Hayden Avenue   Route 128 Northwest MA   1   31,100   100.0 %   51.99   N   S
    100 Hayden Avenue   Route 128 Northwest MA   1   55,924   100.0 %   8.92   N   S
    33 Hayden Avenue   Route 128 Northwest MA   1   80,872   43.3 %   30.46   N   S
    Lexington Office Park   Route 128 Northwest MA   2   166,735   83.0 %   29.62   N   S
    191 Spring Street   Route 128 Northwest MA   1   162,700   100.0 %   30.04   Y   S
    181 Spring Street   Route 128 Northwest MA   1   53,595   41.2 %   35.95   N   S
    201 Spring Street   Route 128 Northwest MA   1   102,500   100.0 %   32.91   N   S
    40 Shattuck Road   Route 128 Northwest MA   1   120,000   95.6 %   27.45   N   S
    Quorum Office Park   Route 128 Northwest MA   2   259,918   100.0 %   19.33   N   S
    Newport Office Park   Route 128 South MA   1   168,829   44.6 %   25.38   N   S
           
 
 
 
       
            41   7,804,587   88.5 % $ 37.32        
           
 
 
 
       
Office/Technical                              
    Fourteen Cambridge Center   East Cambridge MA   1   67,362   100.0 %   22.00   N   CBD
    Bedford Business Park   Route 128 Northwest MA   2   383,704   100.0 %   15.95   Y   S
    17 Hartwell Avenue   Route 128 Northwest MA   1   30,000   100.0 %   12.00   N   S
    164 Lexington Road   Route 128 Northwest MA   1   64,140   100.0 %   10.55   N   S
           
 
 
 
       
            5   545,206   100.0 % $ 15.84        
           
 
 
 
       
Industrial                              
    40-46 Harvard Street   Route 128 Southwest MA   1   169,273   0.0 %     N   S
           
 
 
 
       
        Total Greater Boston:   47   8,519,066   87.5 %            
           
 
 
 
       

(1)
93,856 square feet of space is unencumbered.

(2)
Not included in same property analysis

19



Boston Properties, Inc.
Third Quarter 2003


In-Service Property Listing
as of September 30, 2003

Greater Washington, DC

  Sub Market
  Number of
Buildings

  Square Feet
  Leased %
  Annualized
Revenue
Per
Leased SF

  Encumbered
with secured
debt
(Y/N)

  Central
Business
District (CBD) or
Suburban (S)

Office                              
    Capital Gallery   Southwest Washington DC   1   396,894   100.0 % $ 37.68   Y   CBD
    500 E Street, N.W.   Southwest Washington DC   1   242,769   100.0 %   33.65   N   CBD
    Metropolitan Square (51% ownership)   East End Washington DC   1   585,220   98.2 %   40.01   Y   CBD
    1301 New York Avenue   East End Washington DC   1   188,358   100.0 %   30.49   Y   CBD
    Market Square North (50% ownership)   East End Washington DC   1   401,279   100.0 %   45.07   Y   CBD
    Sumner Square   CBD Washington DC   1   207,620   100.0 %   35.15   Y   CBD
    Decoverly Two   Montgomery County MD   1   77,747   100.0 %   24.79   N   S
    Decoverly Three   Montgomery County MD   1   77,040   93.1 %   25.92   N   S
    Democracy Center   Montgomery County MD   3   680,644   87.0 %   30.45   Y   S
    Montvale Center   Montgomery County MD   1   120,823   85.8 %   24.45   Y   S
    2600 Tower Oaks Boulevard   Montgomery County MD   1   178,887   100.0 %   33.10   N   S
    Orbital Sciences 1&3   Loudoun County   2   176,726   100.0 %   23.67   N   S
    Orbital Sciences 2   Loudoun County   1   160,502   100.0 %   24.01   N   S
    The Arboretum   Fairfax County VA   1   95,584   100.0 %   26.34   N   S
(1)   One Freedom Square   Fairfax County VA   1   410,308   100.0 %   34.34   Y   S
(1)   Two Freedom Square   Fairfax County VA   1   422,504   99.6 %   34.13   N   S
    One Reston Overlook   Fairfax County VA   1   312,685   100.0 %   24.46   Y   S
    Two Reston Overlook   Fairfax County VA   1   131,594   82.2 %   32.91   Y   S
(1)   One Discovery Square   Fairfax County VA   1   181,019   100.0 %   36.68   N   S
(1)   Two Discovery Square   Fairfax County VA   1   185,970   92.8 %   32.21   N   S
    New Dominion Technology Park   Fairfax County VA   1   235,201   100.0 %   26.86   Y   S
    Reston Corporate Center   Fairfax County VA   2   261,046   100.0 %   32.56   Y   S
    Lockheed Martin Building   Fairfax County VA   1   255,244   100.0 %   30.59   Y   S
    NIMA Building   Fairfax County VA   1   263,870   100.0 %   29.44   Y   S
           
 
 
 
       
            28   6,249,534   97.4 % $ 32.90        
           
 
 
 
       
Office/Technical                              
(1)   Broad Run Business Park   Loudoun County   1   127,226   54.7 %   22.18   N   S
    Sugarland Business Park, Building One   Fairfax County VA   1   52,797   22.8 %   22.67   N   S
    Sugarland Business Park, Building Two   Fairfax County VA   1   59,215   65.9 %   20.69   N   S
    7435 Boston Boulevard   Fairfax County VA   1   103,557   82.3 %   15.59   N   S
    7451 Boston Boulevard   Fairfax County VA   1   47,001   100.0 %   20.97   N   S
    7450 Boston Boulevard   Fairfax County VA   1   62,402   100.0 %   20.43   N   S
    7374 Boston Boulevard   Fairfax County VA   1   57,321   100.0 %   13.88   N   S
    8000 Grainger Court   Fairfax County VA   1   90,465   36.9 %   16.20   N   S
    7500 Boston Boulevard   Fairfax County VA   1   79,971   100.0 %   14.63   N   S
    7501 Boston Boulevard   Fairfax County VA   1   75,756   100.0 %   23.52   N   S
    7601 Boston Boulevard   Fairfax County VA   1   103,750   100.0 %   14.17   N   S
    7375 Boston Boulevard   Fairfax County VA   1   26,865   100.0 %   17.82   N   S
    8000 Corporate Court   Fairfax County VA   1   52,539   100.0 %   10.51   N   S
    7300 Boston Boulevard   Fairfax County VA   1   32,000   100.0 %   20.86   N   S
           
 
 
 
       
            14   970,865   80.0 % $ 17.60        
           
 
 
 
       
        Total Greater Washington:   42   7,220,399   95.1 %            
           
 
 
             

(1)
Not included in same property analysis

20



Boston Properties, Inc.
Third Quarter 2003


In-Service Property Listing
as of September 30, 2003

Midtown Manhattan

  Sub Market
  Number of
Buildings

  Square Feet
  Leased %
  Annualized
Revenue
Per
Leased SF

  Encumbered
with secured
debt
(Y/N)

  Central
Business
District (CBD) or
Suburban (S)

Office                              
  599 Lexington Avenue   Park Avenue NY   1   1,019,341   95.4 % $ 64.14   Y   CBD
  280 Park Avenue   Park Avenue NY   1   1,170,080   98.5 %   57.28   Y   CBD
  Citigroup Center   Park Avenue NY   1   1,576,803   99.9 %   60.62   Y   CBD
(1) 399 Park Avenue   Park Avenue NY   1   1,678,090   99.5 %   70.36   N   CBD
  5 Times Square   Times Square NY   1   1,101,779   100.0 %   53.22   N   CBD
         
 
 
 
       
      Total Midtown Manhattan:   5   6,546,093   98.9 % $ 61.81        
         
 
 
 
       
Princeton/East Brunswick, NJ                              
Office                              
  101 Carnegie Center   Princeton NJ   1   123,659   100.0 % $ 28.19   Y   S
  104 Carnegie Center   Princeton NJ   1   102,830   85.2 %   33.07   N   S
  105 Carnegie Center   Princeton NJ   1   69,648   100.0 %   29.39   N   S
  201 Carnegie Center   Princeton NJ     6,500   100.0 %   27.42   N   S
  202 Carnegie Center   Princeton NJ   1   128,730   97.6 %   30.78   Y   S
  206 Carnegie Center   Princeton NJ   1   161,763   100.0 %   28.98   Y   S
  210 Carnegie Center   Princeton NJ   1   161,112   100.0 %   30.82   N   S
  211 Carnegie Center   Princeton NJ   1   47,025   100.0 %   25.51   N   S
  212 Carnegie Center   Princeton NJ   1   148,233   98.5 %   32.47   N   S
  214 Carnegie Center   Princeton NJ   1   150,416   95.4 %   29.38   Y   S
  302 Carnegie Center   Princeton NJ   1   65,135   95.5 %   31.65   N   S
  502 Carnegie Center   Princeton NJ   1   116,374   95.3 %   32.64   N   S
  504 Carnegie Center   Princeton NJ   1   121,990   100.0 %   27.67   Y   S
  506 Carnegie Center   Princeton NJ   1   136,213   88.3 %   29.82   Y   S
  508 Carnegie Center   Princeton NJ   1   131,085   100.0 %   27.73   Y   S
  510 Carnegie Center   Princeton NJ   1   234,160   100.0 %   27.30   Y   S
  One Tower Center   East Brunswick NJ   1   411,150   84.3 %   34.09   N   S
         
 
 
 
       
      Total Princeton/East Brunswick, NJ:   16   2,316,023   95.0 % $ 30.31        
         
 
 
 
       
Greater San Francisco                              
Office                              
  Embarcadero Center One   CBD San Francisco CA   1   836,584   96.2 % $ 42.81   Y   CBD
  Embarcadero Center Two   CBD San Francisco CA   1   779,219   86.9 %   47.06   Y   CBD
  Embarcadero Center Three   CBD San Francisco CA   1   773,693   86.3 %   42.04   Y   CBD
  Embarcadero Center Four   CBD San Francisco CA   1   936,432   91.1 %   62.78   Y   CBD
  Federal Reserve   CBD San Francisco CA   1   149,592   99.8 %   49.19   Y   CBD
  West Tower   CBD San Francisco CA   1   473,774   98.6 %   44.22   Y   CBD
(1) 611 Gateway   South San Francisco CA   1   250,825   0.0 %     N   S
  601 and 651 Gateway   South San Francisco CA   2   514,913   81.8 %   34.76   Y   S
         
 
 
 
       
          9   4,715,032   85.7 % $ 47.17        
         
 
 
 
       
Office/Technical                              
         
 
 
 
       
  Hilltop Office Center   South San Francisco CA   9   144,366   74.9 % $ 14.10   Y   S
         
 
 
 
       
Industrial                              
  560 Forbes Blvd   South San Francisco CA   1   40,000   100.0 %   10.62   N   S
  430 Rozzi Place   South San Francisco CA   1   20,000   100.0 %   12.09   N   S
         
 
 
 
       
          2   60,000   100.0 % $ 11.11        
         
 
 
 
       
      Total Greater San Francisco:   20   4,919,398   85.5 %            
         
 
 
             

(1)
Not included in same property analysis

21



Boston Properties, Inc.
Third Quarter 2003


In-Service Property Listing
as of September 30, 2003

 
 
  Sub Market
  Number of
Buildings

  Square Feet
  Leased %
  Annualized
Revenue
Per
Leased SF

  Encumbered
with secured
debt
(Y/N)

  Central
Business
District (CBD) or
Suburban (S)

Baltimore, MD                              
Office                              
         
 
 
 
       
  100 East Pratt Street   Baltimore MD   1   635,223   98.5 % $ 30.70   Y   CBD
         
 
 
 
       
Richmond, VA                              
Office                              
  Riverfront Plaza   Richmond VA   1   900,137   88.9 % $ 24.84   Y   CBD
         
 
 
 
       
Bucks County, PA                              
Industrial                              
  38 Cabot Boulevard   Bucks County PA   1   161,000   100.0 % $ 4.81   N   S
         
 
 
 
       
      Total In-Service Properties:   133   31,217,339   92.2 %            
         
 
 
             

22



Boston Properties, Inc.
Third Quarter 2003


TOP 20 TENANTS LISTING AND PORTFOLIO TENANT DIVERSIFICATION


TOP 20 TENANTS BY SQUARE FEET LEASED

 
  Tenant

  Sq. Ft.
  % of
Portfolio

 
1   U.S. Government   1,397,980   4.48 %
2   Citibank, N.A.   1,231,068   3.94 %
3   Ernst and Young   1,064,939   3.41 %
4   Shearman & Sterling   585,808   1.88 %
5   Lockheed Martin Corporation   570,314   1.83 %
6   Gillette Company   485,932   1.56 %
7   Parametric Technology Corp.   470,987 (1) 1.51 %
8   Wachovia   456,533   1.46 %
9   Lehman Brothers   436,723   1.40 %
10   Washington Group International   365,245   1.17 %
11   Deutsche Bank Trust   346,617   1.11 %
12   Orbital Sciences Corporation   337,228   1.08 %
13   TRW, Inc.   309,689   0.99 %
14   T. Rowe Price Associates, Inc.   304,129   0.97 %
15   Hunton & Williams   296,671   0.95 %
16   Kirkland & Ellis   294,821   0.94 %
17   Digitas   279,182   0.89 %
18   Bingham McCutchen   267,905   0.86 %
19   Accenture   265,622   0.85 %
20   Tellabs Operations   259,918   0.83 %

 

 

Total % of Portfolio Square Feet

 

 

 

32.12

%

 

 

Total % of Portfolio Revenue

 

 

 

35.18

%


Major Signed Deals for Future Development

Tenant

  Property
  Sq. Ft.
U.S. Government   New Dominion Tech.   257,400
Finnegan Henderson Farabow Garrett & Dunner, LLP   901 New York Ave.   251,337
O'Melveny & Myers   Times Square Tower   220,887

(1)
Includes 380,987 square feet of space in a property in which Boston Properties has a 25% interest.


TENANT DIVERSIFICATION (GROSS RENT) *

         GRAPHIC

*
The classification of the Company's tenants is based on the U.S. Government's North American Industry Classification System (NAICS), which has replaced the Standard Industrial Classification (SIC) system.

23



Boston Properties, Inc.
Third Quarter 2003


PORTFOLIO OVERVIEW

Percentage of Rental Revenues Less Operating Expenses and Real Estate Taxes for In-Service Properties by Location and Type of Property for the Quarter Ended September 30, 2003

Geographic Area

  Office (1)
  Office/
Technical

  Industrial
  Hotel
  Total
 
Greater Boston   20.8 % 0.8 %   2.3 % 23.9 %
Greater Washington   16.0 % 1.1 %     17.0 %
Greater San Francisco   15.3 %   0.1 %   15.4 %
Midtown Manhattan   35.0 %       35.0 %
Princeton/East Brunswick, NJ   5.0 %   0.1 %   5.1 %
Baltimore, MD   1.8 %       1.8 %
Richmond, VA   1.8 %       1.8 %
Bucks County, PA            
   
 
 
 
 
 
  Total   95.6 % 1.9 % 0.2 % 2.3 % 100.0 %
   
 
 
 
 
 
Geographic Area

  CBD
  Suburban
  Total
 
Greater Boston   17.0 % 6.9 % 23.9 %
Greater Washington   5.0 % 12.0 % 17.0 %
Greater San Francisco   13.6 % 1.7 % 15.3 %
Midtown Manhattan   35.0 %   35.0 %
Princeton/East Brunswick, NJ     5.1 % 5.1 %
Baltimore, MD   1.8 %   1.8 %
Richmond, VA   1.8 %   1.8 %
Bucks County, PA     0.1 % 0.1 %
   
 
 
 
Total   74.2 % 25.8 % 100.0 %
   
 
 
 

(1) Includes retail space at Prudential Center and Embarcadero Center.

24




Boston Properties, Inc.
Third Quarter 2003

OCCUPANCY ANALYSIS

Same Property Occupancy—By Location
 
  CBD
  Suburban
  Total
Location

  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
Greater Boston   92.3%   93.1%   84.2%   95.1%   88.6%   94.0%
Greater Washington   99.5%   99.6%   92.9%   96.5%   95.2%   97.6%
Midtown Manhattan   98.6%   98.6%       98.6%   98.6%
Baltimore, MD   98.5%   98.2%       98.5%   98.2%
Princeton/East Brunswick, NJ       95.0%   93.0%   95.0%   93.0%
Richmond, VA   88.9%   92.0%       88.9%   92.0%
Greater San Francisco   91.6%   93.8%   60.7%   64.4%   85.5%   88.1%
Bucks County, PA       100.0%   100.0%   100.0%   100.0%
   
 
 
 
 
 
  Total Portfolio   94.9%   95.8%   87.7%   92.5%   92.0%   94.5%
   
 
 
 
 
 
Same Property—By Type of Property

 
  CBD
  Suburban
  Total
Location

  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
Total Office Portfolio   94.9%   95.8%   88.9%   91.9%   92.8%   94.4%
Total Office/Technical Portfolio   100.0%   100.0%   88.0%   94.7%   88.5%   95.0%
Total Industrial Portfolio       56.6%   100.0%   56.6%   100.0%
   
 
 
 
 
 
Total Portfolio   94.9%   95.8%   87.7%   92.5%   92.0%   94.5%
   
 
 
 
 
 

25




Boston Properties, Inc.
Third Quarter 2003

IN-SERVICE OFFICE PROPERTIES

Lease Expirations
Year of Lease Expiration
  Rentable Square Footage Subject to Expiring Leases
  Current Annualized Revenues Under Expiring Leases
  Current Annualized Revenues Under Expiring Leases p.s.f.
  Annualized Revenues Under Expiring Leases with future step-ups
  Annualized Revenues Under Expiring Leases with future step-ups p.s.f.
  Percentage of Total Square Feet
2003   460,096   $ 15,611,328   $ 33.93   $ 15,611,328   $ 33.93   1.65%
2004   1,863,303     75,138,566     40.33     75,269,801     40.40   6.69%
2005   2,271,106     84,369,599     37.15     85,730,089     37.75   8.15%
2006   2,910,482     120,169,346     41.29     123,415,280     42.40   10.44%
2007   2,035,274     79,252,003     38.94     82,675,081     40.62   7.30%
2008   1,448,094     62,313,825     43.03     64,790,712     44.74   5.20%
2009   2,758,876     104,958,044     38.04     112,754,890     40.87   9.90%
2010   1,631,917     71,394,248     43.75     78,967,016     48.39   5.86%
2011   2,673,009     109,370,521     40.92     125,287,261     46.87   9.59%
2012   2,093,045     97,010,634     46.35     105,087,278     50.21   7.51%
Thereafter   5,672,395     273,074,052     48.14     327,484,728     57.73   20.35%
Occupancy By Location*
 
  CBD
  Suburban
  Total
Location

  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
Greater Boston   92.2%   92.7%   83.7%   94.4%   88.5%   93.5%
Greater Washington   99.5%   99.6%   96.5%   97.9%   97.4%   98.7%
Midtown Manhattan   98.9%   98.2%       98.9%   98.2%
Baltimore, MD   98.5%   97.2%       98.5%   97.2%
Princeton/East Brunswick, NJ       95.0%   93.0%   95.0%   93.0%
Richmond, VA   88.9%   92.0%       88.9%   92.0%
Greater San Francisco   91.6%   93.8%   55.0%   57.2%   85.7%   87.9%
Bucks County, PA   n/a   n/a   n/a   n/a   n/a   n/a
   
 
 
 
 
 
  Total Portfolio   95.3%   96.2%   89.1%   92.5%   93.0%   95.0%
   
 
 
 
 
 

*
Includes approximately 1,300,000 square feet of retail space.

26



Boston Properties, Inc.
Third Quarter 2003

IN-SERVICE OFFICE/TECHNICAL PROPERTIES
 
Lease Expirations
 
Year of Lease
Expiration

  Rentable Square Footage Subject to Expiring Leases
  Current Annualized Revenues Under Expiring Leases
  Current Annualized Revenues Under Expiring Leases p.s.f.
  Annualized Revenues Under Expiring Leases with future step-ups
  Annualized Revenues Under Expiring Leases with future step-ups – p.s.f.
  Percentage of Total Square Feet
 
2003   14,100   $ 239,599   $ 16.99   $ 239,599   $ 16.99   0.85 %
2004   98,546     1,787,360     18.14     1,795,467     18.22   5.93 %
2005   156,284     2,235,477     14.30     2,294,794     14.68   9.41 %
2006   300,104     4,369,484     14.56     4,408,037     14.69   18.07 %
2007   317,912     5,566,352     17.51     5,915,503     18.61   19.15 %
2008   61,338     1,351,067     22.03     1,387,593     22.62   3.69 %
2009                      
2010   79,971     1,169,716     14.63     1,171,896     14.65   4.82 %
2011   137,321     2,378,584     17.32     2,578,584     18.78   8.27 %
2012   72,362     1,635,627     22.60     1,817,191     25.11   4.36 %
Thereafter   205,304     3,680,039     17.92     4,291,374     20.90   12.36 %
Occupancy By Location
 
 
  CBD
  Suburban
  Total
 
Location

 
  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
 
Greater Boston   100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Greater Washington       80.0 % 93.1 % 80.0 % 93.1 %
Midtown Manhattan   n/a   n/a   n/a   n/a   n/a   n/a  
Baltimore, MD   n/a   n/a   n/a   n/a   n/a   n/a  
Princeton/East Brunswick, NJ   n/a   n/a   n/a   n/a   n/a   n/a  
Richmond, VA   n/a   n/a   n/a   n/a   n/a   n/a  
Greater San Francisco       74.9 % 87.5 % 74.9 % 87.5 %
Bucks County, PA   n/a   n/a   n/a   n/a   n/a   n/a  
   
 
 
 
 
 
 
  Total Portfolio   100.0 % 100.0 % 85.5 % 94.8 % 86.1 % 95.0 %
   
 
 
 
 
 
 

27



Boston Properties, Inc.
Third Quarter 2003

IN-SERVICE INDUSTRIAL PROPERTIES
 
Lease Expirations
 
Year of Lease
Expiration

  Rentable Square Footage Subject to Expiring Leases
  Current Annualized Revenues Under Expiring Leases
  Current Annualized Revenues Under Expiring Leases p.s.f.
  Annualized Revenues Under Expiring Leases with future step-ups
  Annualized Revenues Under Expiring Leases with future step-ups – p.s.f.
  Percentage of Total Square Feet
 
2003     $   $   $   $    
2004   201,000     1,199,258     5.97     1,208,858     6.01   51.50 %
2005                      
2006                      
2007   20,000     241,890     12.09     260,859     13.04   5.12 %
2008                      
2009                      
2010                      
2011                      
2012                      
Thereafter                      
Occupancy By Location
 
 
  CBD
  Suburban
  Total
 
Location

 
  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
 
Greater Boston       0.0 % 100.0 % 0.0 % 100.0 %
Greater Washington   n/a   n/a   n/a   n/a   n/a   n/a  
Midtown Manhattan   n/a   n/a   n/a   n/a   n/a   n/a  
Baltimore, MD   n/a   n/a   n/a   n/a   n/a   n/a  
Princeton/East Brunswick, NJ   n/a   n/a   n/a   n/a   n/a   n/a  
Richmond, VA   n/a   n/a   n/a   n/a   n/a   n/a  
Greater San Francisco       100.0 % 100.0 % 100.0 % 100.0 %
Bucks County, PA       100.0 % 100.0 % 100.0 % 100.0 %
   
 
 
 
 
 
 
  Total Portfolio       56.6 % 100.0 % 56.6 % 100.0 %
   
 
 
 
 
 
 

28



Boston Properties, Inc.
Third Quarter 2003

IN-SERVICE RETAIL PROPERTIES
 
Lease Expirations
 
Year of Lease Expiration
  Rentable Square Footage Subject to Expiring Leases
  Current Annualized Revenues Under Expiring Leases
  Current Annualized Revenues Under Expiring Leases p.s.f.
  Annualized Revenues Under Expiring Leases with future step-ups
  Annualized Revenues Under Expiring Leases with future step-ups – p.s.f.
  Percentage of Total Square Feet
 
2003   30,940   $ 2,208,541   $ 71.38   $ 2,213,059   $ 71.53   2.38 %
2004   76,004     5,920,231     77.89     5,809,735     76.44   5.85 %
2005   106,602     4,786,977     44.91     4,828,942     45.30   8.21 %
2006   58,475     3,031,003     51.83     3,053,572     52.22   4.50 %
2007   44,722     2,208,770     49.39     2,329,564     52.09   3.44 %
2008   80,995     3,927,609     48.49     4,079,165     50.36   6.24 %
2009   40,371     1,882,762     46.64     1,961,945     48.60   3.11 %
2010   83,166     3,400,687     40.89     3,827,111     46.02   6.40 %
2011   42,241     2,642,233     62.55     3,059,400     72.43   3.25 %
2012   103,652     4,936,019     47.62     5,577,803     53.81   7.98 %
Thereafter   631,547     32,323,002     51.18     39,959,231     63.27   48.63 %

29



Boston Properties, Inc.
Third Quarter 2003

GRAND TOTAL OF ALL IN-SERVICE PROPERTIES
 
Lease Expiration
 
Year of Lease
Expiration

  Rentable Square Footage Subject to Expiring Leases
  Current Annualized Revenues Under Expiring Leases
  Current Annualized Revenues Under Expiring Leases p.s.f.
  Annualized Revenues Under Expiring Leases with future step-ups
  Annualized Revenues Under Expiring Leases with future step-ups – p.s.f.
  Percentage of Total Square Feet
 
2003   505,136   $ 18,059,468   $ 35.75   $ 18,063,986   $ 35.76   1.6 %
2004   2,238,853     84,045,414     37.54     84,083,861     37.56   7.2 %
2005   2,533,992     91,392,053     36.07     92,853,825     36.64   8.1 %
2006   3,269,061     127,569,833     39.02     130,876,889     40.04   10.5 %
2007   2,417,908     87,269,016     36.09     91,181,006     37.71   7.7 %
2008   1,590,427     67,592,500     42.50     70,257,471     44.18   5.1 %
2009   2,799,247     106,840,806     38.17     114,716,836     40.98   9.0 %
2010   1,795,054     75,964,652     42.32     83,966,023     46.78   5.8 %
2011   2,852,571     114,391,338     40.10     130,925,245     45.90   9.1 %
2012   2,269,059     103,582,279     45.65     112,482,271     49.57   7.3 %
Thereafter   6,439,692     307,534,238     47.76     369,810,584     57.43   20.6 %
Occupancy By Location
 
 
  CBD
  Suburban
  Total
 
Location

 
  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
 
Greater Boston   92.4 % 92.8 % 82.1 % 95.3 % 87.5 % 94.0 %
Greater Washington   99.5 % 99.6 % 93.4 % 97.0 % 95.1 % 98.1 %
Midtown Manhattan   98.9 % 98.2 %     98.9 % 98.2 %
Baltimore, MD   98.5 % 97.2 %     98.5 % 97.2 %
Princeton/East Brunswick, NJ       95.0 % 93.0 % 95.0 % 93.0 %
Richmond, VA   88.9 % 92.0 %     88.9 % 92.0 %
Greater San Francisco   91.6 % 93.8 % 60.7 % 71.0 % 85.5 % 88.6 %
Bucks County, PA       100.0 % 100.0 % 100.0 % 100.0 %
   
 
 
 
 
 
 
  Total Portfolio   95.3 % 96.2 % 87.7 % 93.2 % 92.2 % 95.1 %
   
 
 
 
 
 
 

30



Boston Properties, Inc.
Third Quarter 2003

IN-SERVICE GREATER BOSTON PROPERTIES
Lease Expirations—Greater Boston
 
  OFFICE
  OFFICE/TECHNICAL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  2003   24,416   $ 1,022,730   $ 41.89   $ 1,022,731   $ 41.89     $   $   $   $
  2004   359,728     12,537,257     34.85     12,568,411     34.94                  
  2005   808,839     32,148,679     39.75     32,505,102     40.19                  
  2006   526,783     18,583,562     35.28     18,683,040     35.47   253,704     3,631,745     14.31     3,631,745     14.31
  2007   464,403     17,829,480     38.39     19,124,694     41.18   144,140     1,940,579     13.46     2,233,859     15.50
  2008   472,742     15,036,715     31.81     16,041,522     33.93                  
  2009   1,017,325     37,142,146     36.51     40,100,431     39.42                  
  2010   197,403     6,814,517     34.52     7,629,593     38.65                  
  2011   788,262     28,926,068     36.70     34,249,680     43.45   80,000     1,582,874     19.79     1,782,874     22.29
  2012   608,127     22,200,272     36.51     24,567,759     40.40   72,362     1,635,627     22.60     1,817,191     25.11
Thereafter   882,608     36,104,692     40.91     42,246,129     47.87                  
 
  INDUSTRIAL
  RETAIL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  2003     $   $   $   $   9,777   $ 1,229,150   $ 125.72   $ 1,216,598   $ 124.43
  2004                     41,820     4,214,114     100.77     4,103,618     98.13
  2005                     68,221     2,760,122     40.46     2,760,818     40.47
  2006                     14,999     1,023,580     68.24     1,024,745     68.32
  2007                     2,307     188,738     81.81     183,589     79.58
  2008                     13,965     1,089,231     78.00     1,071,231     76.71
  2009                     8,408     477,863     56.83     488,453     58.09
  2010                     37,110     1,384,737     37.31     1,458,957     39.31
  2011                     12,551     649,793     51.77     705,433     56.21
  2012                     52,949     1,882,831     35.56     1,975,930     37.32
Thereafter                     416,081     16,378,814     39.36     19,284,009     46.35

31



Boston Properties, Inc.
Third Quarter 2003

IN-SERVICE GREATER BOSTON PROPERTIES
Quarterly Lease Expirations—Greater Boston
 
  OFFICE
  OFFICE/TECHNICAL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized Revenues Under
Expiring Leases with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Q1 2003     $   $   $   $     $   $   $   $
  Q2 2003                                    
  Q3 2003                                    
  Q4 2003   24,416     1,022,731     41.89     1,022,731     41.89                  
   
 
 
 
 
 
 
 
 
 
Total 2003   24,416   $ 1,022,731   $ 41.89   $ 1,022,731   $ 41.89     $   $   $   $
   
 
 
 
 
 
 
 
 
 
  Q1 2004   14,495   $ 718,726   $ 49.58   $ 718,726   $ 49.58     $   $   $   $
  Q2 2004   85,089     2,814,542     33.08     2,814,542     33.08                  
  Q3 2004   154,311     5,414,278     35.09     5,418,187     35.11                  
  Q4 2004   105,833     3,589,711     33.92     3,616,956     34.18                  
   
 
 
 
 
 
 
 
 
 
Total 2004   359,728   $ 12,537,257   $ 34.85   $ 12,568,411   $ 34.94     $   $   $   $
   
 
 
 
 
 
 
 
 
 
 
  INDUSTRIAL
  RETAIL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under Expiring Leases with future step-ups

  Per
Square
Foot

  Q1 2003     $   $   $   $       $   $   $   $
  Q2 2003                                      
  Q3 2003                                      
  Q4 2003                       9,777     1,229,150     125.72     1,216,598     124.43
   
 
 
 
 
 
 
 
 
 
Total 2003         $   $   $     9,777   $ 1,229,150   $ 125.72   $ 1,216,598   $ 124.43
   
 
 
 
 
 
 
 
 
 
  Q1 2004     $   $       $     21,339   $ 1,748,559   $ 81.94   $ 1,693,059   $ 79.34
  Q2 2004                       10,579     1,279,419     120.94     1,222,419     115.55
  Q3 2004                       3,347     526,920     157.43     502,920     150.26
  Q4 2004                       6,555     659,216     100.57     685,220     104.53
   
 
 
 
 
 
 
 
 
 
Total 2004     $   $   $   $   $ 41,820   $ 4,214,114   $ 100.77   $ 4,103,618   $ 98.13
   
 
 
 
 
 
 
 
 
 

32



Boston Properties, Inc.
Third Quarter 2003

IN-SERVICE GREATER WASHINGTON PROPERTIES
Lease Expirations—Greater Washington
 
  OFFICE
  OFFICE/TECHNICAL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

2003   36,005   $ 1,018,244   $ 28.28   $ 1,018,244   $ 28.28   7,000   $ 119,551   $ 17.08   $ 119,551   $ 17.08
2004   203,124     7,824,752     38.52     7,870,542     38.75   81,199     1,500,596     18.48     1,507,083     18.56
2005   353,472     12,358,560     34.96     12,772,956     36.14   101,345     1,482,016     14.62     1,518,693     14.99
2006   420,928     12,258,118     29.12     12,885,408     30.61   33,400     541,107     16.20     569,160     17.04
2007   370,671     12,646,805     34.12     13,091,452     35.32   163,422     3,490,594     21.36     3,523,244     21.56
2008   199,439     6,228,669     31.23     6,971,891     34.96   57,730     1,298,372     22.49     1,336,615     23.15
2009   980,947     32,412,133     33.04     33,809,067     34.47                  
2010   773,484     28,201,626     36.46     31,610,890     40.87   79,971     1,169,716     14.63     1,171,896     14.65
2011   1,065,677     33,191,364     31.15     39,155,901     36.74   57,321     795,710     13.88     795,710     13.88
2012   435,506     15,678,599     36.00     19,553,783     44.90                  
Thereafter   1,131,096     34,790,156     30.76     43,160,957     38.16   205,304     3,680,039     17.92     4,291,374     20.90
 
  INDUSTRIAL
  RETAIL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

2003     $   $   $   $     $   $   $   $
2004                     2,151     103,154     47.96     103,154     47.96
2005                     4,274     141,964     33.22     143,882     33.66
2006                     3,309     114,577     34.63     114,942     34.74
2007                     16,548     425,319     25.70     448,025     27.07
2008                     16,338     598,212     36.61     685,147     41.94
2009                     875     41,744     47.71     42,211     48.24
2010                     10,277     373,278     36.32     433,983     42.23
2011                     11,221     475,957     42.42     535,392     47.71
2012                     10,046     265,496     26.43     324,961     32.35
Thereafter                     36,415     1,459,883     40.09     1,891,343     51.94

33



Boston Properties, Inc.
Third Quarter 2003

IN-SERVICE GREATER WASHINGTON PROPERTIES
Quarterly Lease Expirations—Greater Washington
 
  OFFICE
  OFFICE/TECHNICAL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

Q1 2003     $   $   $   $     $   $   $   $
Q2 2003                                    
Q3 2003                                    
Q4 2003   36,005     1,018,244     28.28     1,018,244     28.28   7,000     119,551     17.08     119,551     17.08
   
 
 
 
 
 
 
 
 
 
Total 2003   36,005   $ 1,018,244   $ 28.28   $ 1,018,244   $ 28.28   7,000   $ 119,551   $ 17.08   $ 119,551   $ 17.08
   
 
 
 
 
 
 
 
 
 
Q1 2004   25,923   $ 901,498   $ 34.78     901,498   $ 34.78   14,338   $ 239,826   $ 16.73     239,826   $ 16.73
Q2 2004   40,483     1,309,243     32.34     1,311,547     32.40   43,101     811,781     18.83     811,781     18.83
Q3 2004   101,853     4,252,199     41.75     4,265,228     41.88   13,408     223,687     16.68     223,687     16.68
Q4 2004   34,865     1,361,812     39.06     1,392,269     39.93   10,352     225,301     21.76     231,788     22.39
   
 
 
 
 
 
 
 
 
 
Total 2004   203,124   $ 7,824,752   $ 38.52   $ 7,870,542   $ 38.75   81,199   $ 1,500,596   $ 18.48   $ 1,507,083   $ 18.56
   
 
 
 
 
 
 
 
 
 
 
  INDUSTRIAL
  RETAIL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

Q1 2003   $     $     $   $     $     $   $   $   $
Q2 2003                                      
Q3 2003                                      
Q4 2003                                      
   
 
 
 
 
 
 
 
 
 
Total 2003       $   $   $   $     $   $   $   $
   
 
 
 
 
 
 
 
 
 
Q1 2004       $   $   $   $     $   $   $   $
Q2 2004                       2,151     103,154     47.96     103,154     47.96
Q3 2004                                      
Q4 2004                                      
   
 
 
 
 
 
 
 
 
 
Total 2004       $   $   $   $   2,151   $ 103,154   $ 47.96   $ 103,154   $ 47.96
   
 
 
 
 
 
 
 
 
 

34



Boston Properties, Inc.
Third Quarter 2003

IN-SERVICE GREATER SAN FRANCISCO PROPERTIES

Lease Expirations—Greater San Francisco
 
  Office
  Office/Technical
Year of Lease Expiration
  Rentable Square Footage Subject to Expiring Leases
  Current Annualized Revenues Under Expiring Leases
  Per Square Foot
  Annualized Revenues Under Expiring Leases with future step-ups
  Per Square Foot
  Rentable Square Footage Subject to Expiring Leases
  Current Annualized Revenues Under Expiring Leases
  Per Square Foot
  Annualized Revenues Under Expiring Leases with future step-ups
  Per Square Foot
2003   265,910   $ 9,716,308   $ 36.54   $ 9,716,308   $ 36.54   7,100   $ 120,048   $ 16.91   $ 120,048   $ 16.91
2004   573,602     24,934,804     43.47     24,973,263     43.54   17,347     286,764     16.53     288,384     16.62
2005   346,740     14,444,829     41.66     14,502,756     41.83   54,939     753,461     13.71     776,101     14.13
2006   900,797     43,848,950     48.68     45,480,307     50.49   13,000     196,632     15.13     207,132     15.93
2007   427,561     20,640,869     48.28     21,135,718     49.43   10,350     135,180     13.06     158,400     15.30
2008   279,148     11,096,605     39.75     11,112,843     39.81   3,608     52,695     14.61     50,978     14.13
2009   260,477     11,378,537     43.68     12,048,578     46.26                  
2010   189,499     11,293,163     59.59     12,997,658     68.59                  
2011   192,689     17,992,769     93.38     18,485,363     95.93                  
2012   127,771     5,464,124     42.76     5,978,786     46.79                  
Thereafter   214,823     8,355,682     38.90     9,015,540     41.97                  
 
  Industrial
  Retail
Year of Lease Expiration
  Rentable Square Footage Subject to Expiring Leases
  Current Annualized Revenues Under Expiring Leases
  Per Square Foot
  Annualized Revenues Under Expiring Leases with future step-ups
  Per Square Foot
  Rentable Square Footage Subject to Expiring Leases
  Current Annualized Revenues Under Expiring Leases
  Per Square Foot
  Annualized Revenues Under Expiring Leases with future step-ups
  Per Square Foot
2003     $   $   $   $   20,363   $ 714,163   $ 35.07   $ 731,233   $ 35.91
2004   40,000     424,836     10.62     434,436     10.86   25,296     1,294,816     51.19     1,294,816     51.19
2005                     27,297     1,337,997     49.02     1,359,013     49.79
2006                     21,606     1,062,027     49.15     1,068,446     49.45
2007   20,000     241,890     12.09     260,859     13.04   18,341     1,146,998     62.54     1,234,003     67.28
2008                     43,899     1,999,873     45.56     2,062,957     46.99
2009                     31,088     1,363,155     43.85     1,431,281     46.04
2010                     30,749     1,306,176     42.48     1,520,176     49.44
2011                     3,474     192,311     55.36     234,550     67.52
2012                     35,018     2,165,851     61.85     2,458,101     70.20
Thereafter                     12,417     892,256     71.86     997,893     80.37

35



Boston Properties, Inc.
Third Quarter 2003

IN-SERVICE GREATER SAN FRANCISCO PROPERTIES

Quarterly Lease Expirations—Greater San Francisco
 
  Office
  Office/Technical
Year of Lease Expiration
  Rentable Square Footage Subject to Expiring Leases
  Current Annualized Revenues Under Expiring Leases
  Per Square Foot
  Annualized Revenues Under Expiring Leases with future step-ups
  Per Square Foot
  Rentable Square Footage Subject to Expiring Leases
  Current Annualized Revenues Under Expiring Leases
  Per Square Foot
  Annualized Revenues Under Expiring Leases with future step-ups
  Per Square Foot
Q1 2003     $     $     $     $       $     $     $     $  
Q2 2003                                    
Q3 2003                                    
Q4 2003   265,910     9,716,308     36.54     9,716,308     36.54   7,100     120,048     16.91     120,048     16.91
   
 
 
 
 
 
 
 
 
 
Total 2003   265,910   $ 9,716,308   $ 36.54   $ 9,716,308   $ 36.54   7,100   $ 120,048   $ 16.91   $ 120,048   $ 16.91
   
 
 
 
 
 
 
 
 
 
Q1 2004   35,049     1,871,822   $ 53.41     1,885,947   $ 53.81     $   $       $
Q2 2004   148,543     5,458,941     36.75     5,458,941     36.75   6,800     94,440     13.89     94,440     13.89
Q3 2004   235,794     10,970,400     46.53     10,971,531     46.53   6,547     135,576     20.71     135,576     20.71
Q4 2004   154,216     6,633,641     43.02     6,656,844     43.17   4,000     56,748     14.19     58,368     14.59
   
 
 
 
 
 
 
 
 
 
Total 2004   573,602   $ 24,934,804   $ 43.47   $ 24,973,263   $ 43.54   17,347   $ 286,764   $ 16.53   $ 288,384   $ 16.62
   
 
 
 
 
 
 
 
 
 
 
  Industrial
  Retail
Year of Lease Expiration
  Rentable Square Footage Subject to Expiring Leases
  Current Annualized Revenues Under Expiring Leases
  Per Square Foot
  Annualized Revenues Under Expiring Leases with future step-ups
  Per Square Foot
  Rentable Square Footage Subject to Expiring Leases
  Current Annualized Revenues Under Expiring Leases
  Per Square Foot
  Annualized Revenues Under Expiring Leases with future step-ups
  Per Square Foot
Q1 2003     $   $   $   $       $   $   $   $
Q2 2003                                    
Q3 2003                                    
Q4 2003                     20,363     714,163     35.07     731,233     35.91
   
 
 
 
 
 
 
 
 
 
Total 2003     $   $   $   $   20,363   $ 714,163   $ 35.07   $ 731,233   $ 35.91
   
 
 
 
 
 
 
 
 
 
Q1 2004         $       $   13,096   $ 629,169   $ 48.04     629,169   $ 48.04
Q2 2004                     256     33,231     129.81     33,231     129.81
Q3 2004                     4,239     206,577     48.73     206,577     48.73
Q4 2004   40,000     424,836     10.62     434,436     10.86   7,705     425,839     55.27     425,839     55.27
   
 
 
 
 
 
 
 
 
 
Total 2004   40,000   $ 424,836   $ 10.62   $ 434,436   $ 10.86   25,296   $ 1,294,816   $ 51.19   $ 1,294,816   $ 51.19
   
 
 
 
 
 
 
 
 
 

36



Boston Properties, Inc.
Third Quarter 2003


IN-SERVICE MIDTOWN MANHATTAN PROPERTIES


Lease Expirations—Midtown Manhattan

 
  OFFICE
  OFFICE/TECHNICAL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

2003   3,173   $ 172,038   $ 54.22   $ 172,038   $ 54.22     $   $   $   $
2004   270,619     16,502,102     60.98     16,517,126     61.03                  
2005   103,076     7,151,148     69.38     7,190,072     69.76                  
2006   343,438     23,302,477     67.85     23,575,649     68.65                  
2007   170,306     10,369,510     60.89     10,476,376     61.52                  
2008   488,118     29,729,142     60.91     30,416,850     62.31                  
2009   291,535     17,454,402     59.87     19,450,436     66.72                  
2010   287,774     19,344,027     67.22     20,410,804     70.93                  
2011   363,724     21,211,117     58.32     24,535,846     67.46                  
2012   891,075     52,712,451     59.16     53,767,672     60.34                  
Thereafter   3,054,646     182,832,474     59.85     220,556,811     72.20                  
 
  INDUSTRIAL
  RETAIL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

2003     $   $   $   $   800   $ 256,507   $ 320.63   $ 256,507   $ 320.63
2004                     1,650     187,524     113.65     187,524     113.65
2005                     1,514     285,156     188.35     296,463     195.81
2006                     15,225     668,437     43.90     683,058     44.86
2007                     826     184,859     223.80     201,091     243.45
2008                     3,232     161,884     50.09     169,126     52.33
2009                                    
2010                     5,030     336,496     66.90     413,996     82.31
2011                     14,995     1,324,173     88.31     1,584,025     105.64
2012                     5,639     621,841     110.28     818,811     145.20
Thereafter                     152,056     13,304,994     87.50     17,394,565     114.40

37



Boston Properties, Inc.
Third Quarter 2003


IN-SERVICE MIDTOWN MANHATTAN PROPERTIES


Quarterly Lease Expirations—Midtown Manhattan

 
  OFFICE
  OFFICE/TECHNICAL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenue Under
Expiring Leases
with future step-ups

  Per
Square
Foot

Q1 2003     $   $   $   $     $   $   $   $
Q2 2003                                    
Q3 2003                                      
Q4 2003   3,173     172,038     54.22     172,038     54.22                  
   
 
 
 
 
 
 
 
 
 
Total 2003   3,173   $ 172,038   $ 54.22   $ 172,038   $ 54.22     $   $   $   $
   
 
 
 
 
 
 
 
 
 
Q1 2004   107,924   $ 6,751,363   $ 62.56   $ 6,751,363   $ 62.56     $   $   $   $
Q2 2004   51,445     4,098,320     79.66     4,098,320     79.66                  
Q3 2004                                    
Q4 2004   111,250     5,652,419     50.81     5,667,443     50.94                  
   
 
 
 
 
 
 
 
 
 
Total 2004   270,619   $ 16,502,102   $ 60.98   $ 16,517,126   $ 61.03     $   $   $   $
   
 
 
 
 
 
 
 
 
 
 
  INDUSTRIAL
  RETAIL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenue Under
Expiring Leases
with future step-ups

  Per
Square
Foot

Q1 2003       $     $   $     $       $     $              
Q2 2003                                    
Q3 2003                                                        
Q4 2003                     800     256,507     320.63     256,507     320.63
   
 
 
 
 
 
 
 
 
 
Total 2003     $   $   $   $   800   $ 256,507   $ 320.63   $ 256,507   $ 320.63
   
 
 
 
 
 
 
 
 
 
Q1 2004     $   $   $   $     $   $   $   $
Q2 2004                     350     50,655     144.73     50,655     144.73
Q3 2004                                    
Q4 2004                     1,300     136,869     105.28     136,869     105.28
   
 
 
 
 
 
 
 
 
 
Total 2004     $   $   $   $   1,650   $ 187,524   $ 113.65   $ 187,524   $ 113.65
   
 
 
 
 
 
 
 
 
 

38



Boston Properties, Inc.
Third Quarter 2003


IN-SERVICE PRINCETON/EAST BRUNSWICK PROPERTIES


Lease Expirations — Princeton/East Brunswick

 
  OFFICE
  OFFICE/TECHNICAL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

2003   80,586   $ 2,243,192   $ 27.84   $ 2,243,192   $ 27.84     $   $   $   $
2004   377,822     11,490,192     30.41     11,490,192     30.41                  
2005   228,388     7,228,354     31.65     7,245,104     31.72                  
2006   92,041     3,102,246     33.71     3,233,362     35.13                  
2007   513,240     14,888,862     29.01     15,923,580     31.03                  
2008                                    
2009   177,428     5,803,810     32.71     6,478,870     36.52                  
2010   154,917     5,106,368     32.96     5,603,900     36.17                  
2011   258,039     7,925,105     30.71     8,720,857     33.80                  
2012                                    
Thereafter   319,668     9,448,193     29.56     10,580,541     33.10                  
 
  INDUSTRIAL
  RETAIL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

2003   $     $     $   $     $   $     $     $          
2004                         2,904     48,000     16.53   48,000   16.53
2005                                    
2006                                    
2007                                    
2008                                    
2009                                    
2010                                    
2011                                    
2012                                    
Thereafter                                    

39



Boston Properties, Inc.
Third Quarter 2003


IN-SERVICE PRINCETON/EAST BRUNSWICK PROPERTIES
Quarterly Lease Expirations — Princeton/East Brunswick

 
  OFFICE
  OFFICE/TECHNICAL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

Q1 2003     $   $   $   $     $   $   $   $
Q2 2003                                    
Q3 2003                                    
Q4 2003   80,586     2,243,192     27.84     2,243,192     27.84                  
   
 
 
 
 
 
 
 
 
 
Total 2003   80,586   $ 2,243,192   $ 27.84   $ 2,243,192   $ 27.84     $   $   $   $
   
 
 
 
 
 
 
 
 
 
Q1 2004   3,022   $ 110,910   $ 36.70   $ 110,910   $ 36.70     $   $   $   $
Q2 2004   54,636     1,536,832     28.13     1,536,832     28.13                  
Q3 2004   121,054     3,715,691     30.69     3,715,691     30.69                  
Q4 2004   199,110     6,126,759     30.77     6,126,759     30.77                  
   
 
 
 
 
 
 
 
 
 
Total 2004   377,822   $ 11,490,192   $ 30.41   $ 11,490,192   $ 30.41     $   $   $   $
   
 
 
 
 
 
 
 
 
 
 
  INDUSTRIAL
  RETAIL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

Q1 2003     $   $   $   $     $   $   $   $
Q2 2003                                    
Q3 2003                                    
Q4 2003                                    
   
 
 
 
 
 
 
 
 
 
Total 2003     $   $   $   $     $   $   $   $
   
 
 
 
 
 
 
 
 
 
Q1 2004     $   $   $   $     $   $   $   $
Q2 2004                                    
Q3 2004                                    
Q4 2003                     2,904   $ 48,000   $ 16.53   $ 48,000   $ 16.53
   
 
 
 
 
 
 
 
 
 
Total 2004     $   $   $   $   2,904   $ 48,000   $ 16.53   $ 48,000   $ 16.53
   
 
 
 
 
 
 
 
 
 

40



Boston Properties, Inc.
Third Quarter 2003


IN-SERVICE OTHER PROPERTIES
Lease Expirations
Other Properties (Richmond, VA; Baltimore, MD; Bucks County, PA)

 
  OFFICE
  OFFICE/TECHNICAL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

2003   50,006   $ 1,438,815   $ 28.77   $ 1,438,815   $ 28.77     $   $   $   $
2004   78,408     1,849,459     23.59     1,850,267     23.60                  
2005   430,591     11,038,029     25.63     11,514,099     26.74                  
2006   626,495     19,073,993     30.45     19,557,513     31.22                  
2007   89,093     2,876,476     32.29     2,923,262     32.81                  
2008   8,647     222,693     25.75     247,607     28.64                  
2009   31,164     767,015     24.61     867,509     27.84                  
2010   28,840     634,548     22.00     714,172     24.76                  
2011   4,618     124,098     26.87     139,614     30.23                  
2012   30,566     955,188     31.25     1,219,278     39.89                  
Thereafter                                    
 
  INDUSTRIAL
  RETAIL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

2003     $   $   $   $     $ 8,721   $   $ 8,721   $
2004   161,000     774,422     4.81     774,422     4.81   2,183     72,623     33.27     72,623     33.27
2005                     5,296     261,738     49.42     268,765     50.75
2006                     3,336     162,382     48.68     162,382     48.68
2007                     6,700     262,854     39.23     262,854     39.23
2008                     3,561     78,410     22.02     90,705     25.47
2009                                    
2010                                    
2011                                    
2012                                    
Thereafter                     14,578     287,054     19.69     391,422     26.85

41



IN-SERVICE OTHER PROPERTIES
Quarterly Lease Expirations
Other Properties (Richmond, VA; Baltimore, MD; Bucks County, PA)

 
  OFFICE
  OFFICE/TECHNICAL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

Q1 2003   $     $     $     $     $     $     $     $              
Q2 2003                                        
Q3 2003                                        
Q4 2003     50,006     1,438,815     28.77     1,438,815     28.77                    
   
 
 
 
 
 
 
 
 
 
Total 2003     50,006   $ 1,438,815   $ 28.77   $ 1,438,815   $ 28.77       $   $   $   $
   
 
 
 
 
 
 
 
 
 
Q1 2004       $   $   $   $       $   $   $   $
Q2 2004     9,483     305,627     32.23     305,627     32.23                    
Q3 2004     66,935     1,480,564     22.12     1,479,528     22.10                    
Q4 2004     1,990     63,268     31.79     65,113     32.72                    
   
 
 
 
 
 
 
 
 
 
Total 2004     78,408   $ 1,849,459   $ 23.59   $ 1,850,267   $ 23.60       $   $   $   $
   
 
 
 
 
 
 
 
 
 
 
  INDUSTRIAL
  RETAIL
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring Leases

  Current Annualized
Revenues Under
Expiring Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring Leases
with future step-ups

  Per
Square
Foot

Q1 2003   $     $     $   $     $   $     $     $              
Q2 2003                                        
Q3 2003                                        
Q4 2003                             8,721         8,721    
   
 
 
 
 
 
 
 
 
 
Total 2003       $   $   $   $       $ 8,721   $   $ 8,721   $
   
 
 
 
 
 
 
 
 
 
Q1 2004       $   $   $   $     2,183   $ 72,623   $ 33.27   $ 72,623   $ 33.27
Q2 2004     161,000     774,422     4.81     774,422     4.81                    
Q3 2004                                        
Q4 2004                                        
   
 
 
 
 
 
 
 
 
 
Total 2004     161,000   $ 774,422   $ 4.81   $ 774,422   $ 4.81     2,183   $ 72,623   $ 33.27   $ 72,623   $ 33.27
   
 
 
 
 
 
 
 
 
 

42


Boston Properties, Inc.
Third Quarter 2003

CBD PROPERTIES

Lease Expirations

 
  Greater Boston
  Greater Washington
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring
Leases
with future
step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring
Leases
with future
step-ups

  Per
Square
Foot

2003 (1)   23,214   $ 1,978,712   $ 85.24   $ 1,966,160   $ 84.70   2,885   $ 105,863   $ 36.69   $ 105,863   $ 36.69
2004 (2)   116,282     7,709,730     66.30     7,621,437     65.54   153,431     6,445,412     42.01     6,487,857     42.29
2005   513,589     23,768,266     46.28     24,042,987     46.81   95,801     3,627,838     37.87     3,700,637     38.63
2006   146,969     7,039,265     47.90     7,117,542     48.43   42,208     1,596,549     37.83     1,695,773     40.18
2007   153,937     8,257,485     53.64     8,500,773     55.22   275,177     9,340,538     33.94     9,486,357     34.47
2008   176,705     7,208,085     40.79     7,230,597     40.92   33,613     1,251,375     37.23     1,418,638     42.21
2009   727,068     26,510,166     36.46     29,013,183     39.90   441,580     15,709,499     35.58     17,088,133     38.70
2010   150,555     6,275,624     41.68     7,021,609     46.64   213,929     7,732,575     36.15     9,137,485     42.71
2011   435,943     21,896,997     50.23     26,114,940     59.90   106,022     3,489,548     32.91     4,294,606     40.51
2012   309,025     13,972,204     45.21     14,907,822     48.24   77,318     2,876,971     37.21     2,952,986     38.19
Thereafter   1,101,614     45,379,117     41.19     52,915,984     48.03   169,053     7,209,689     42.65     8,448,051     49.97
 
  New York
  San Francisco
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring
Leases
with future
step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring
Leases
with future
step-ups

  Per
Square
Foot

2003   3,973   $ 428,545   $ 107.86   $ 428,545   $ 107.86   109,899   $ 4,424,209   $ 40.26   $ 4,441,279   $ 40.41
2004   272,269     16,689,625     61.30     16,704,649     61.35   544,878     24,180,023     44.38     24,195,280     44.40
2005   104,590     7,436,304     71.10     7,486,536     71.58   323,458     14,158,550     43.77     14,198,100     43.89
2006   358,663     23,970,914     66.83     24,258,708     67.64   878,417     42,470,499     48.35     43,870,300     49.94
2007   171,132     10,554,369     61.67     10,677,467     62.39   432,627     21,278,765     49.19     21,846,654     50.50
2008   491,350     29,891,026     60.83     30,585,976     62.25   258,236     11,174,626     43.27     11,398,483     44.14
2009   291,535     17,454,402     59.87     19,450,436     66.72   286,309     12,556,649     43.86     13,265,172     46.33
2010   292,804     19,680,523     67.21     20,824,800     71.12   212,524     12,431,339     58.49     14,286,113     67.22
2011   378,719     22,535,290     59.50     26,119,872     68.97   196,163     18,185,080     92.70     18,719,913     95.43
2012   896,714     53,334,292     59.48     54,586,483     60.87   162,789     7,629,975     46.87     8,436,887     51.83
Thereafter   3,206,702     196,137,469     61.16     237,951,376     74.20   227,240     9,247,939     40.70     10,013,432     44.07
 
  Princeton/East Brunswick
  Other
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring
Leases
with future
step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring
Leases
with future
step-ups

  Per
Square
Foot

2003     $   $   $   $   50,006   $ 1,447,536   $ 28.95   $ 1,447,536   $ 28.95
2004                     80,591     1,922,082     23.85     1,922,890     23.86
2005                     435,887     11,299,767     25.92     11,782,865     27.03
2006                     629,831     19,236,374     30.54     19,719,895     31.31
2007                     95,793     3,139,331     32.77     3,186,116     33.26
2008                     12,208     301,103     24.66     338,312     27.71
2009                     31,164     767,015     24.61     867,509     27.84
2010                     28,840     634,548     22.00     714,172     24.76
2011                     4,618     124,098     26.87     139,614     30.23
2012                     30,566     955,188     31.25     1,219,278     39.89
Thereafter                     14,578     287,054     19.69     391,422     26.85
(1)
Includes 9,777 square feet of retail space and kiosks at an average current rent on expiring leases of $125.72 per square foot and an average rent on expiring leases with future step-ups of $124.43 per square foot.

(2)
Includes 40,620 square feet of retail space and kiosks at an average current rent on expiring leases of $102.56 per square foot and an average rent on expiring leases with future step-ups of $99.84 per square foot.

43


 
  Greater Boston
  Greater Washington
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring
Leases
with future
step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring
Leases
with future
step-ups

  Per
Square
Foot

2003   10,979   $ 273,168   $ 24.88   $ 273,168   $ 24.88   40,120   $ 1,031,933   $ 25.72   $ 1,031,933   $ 25.72
2004   285,266     9,041,641     31.70     9,050,592     31.73   133,043     2,983,090     22.42     2,992,922     22.50
2005   363,471     11,140,535     30.65     11,222,932     30.88   363,290     10,354,702     28.50     10,734,894     29.55
2006   648,517     16,199,623     24.98     16,221,989     25.01   415,429     11,317,253     27.24     11,873,736     28.58
2007   456,913     11,701,313     25.61     13,041,369     28.54   275,464     7,222,181     26.22     7,576,365     27.50
2008   310,002     8,917,861     28.77     9,882,156     31.88   239,894     6,873,877     28.65     7,575,015     31.58
2009   298,665     11,109,843     37.20     11,575,701     38.76   540,242     16,744,378     30.99     16,763,145     31.03
2010   83,958     1,923,629     22.91     2,066,940     24.62   649,803     22,012,046     33.87     24,079,283     37.06
2011   444,870     9,261,738     20.82     10,623,047     23.88   1,028,197     30,973,482     30.12     36,192,395     35.20
2012   424,413     11,746,526     27.68     13,453,057     31.70   368,234     13,067,124     35.49     16,925,759     45.96
Thereafter   197,075     7,104,389     36.05     8,614,154     43.71   1,203,762     32,720,389     27.18     40,895,623     33.97
 
  New York
  San Francisco
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring
Leases
with future
step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring
Leases
with future
step-ups

  Per
Square
Foot

2003     $   $   $   $   183,474   $ 6,126,310   $ 33.39   $ 6,126,310   $ 33.39
2004                     111,367     2,761,196     24.79     2,795,620     25.10
2005                     105,518     2,377,737     22.53     2,439,770     23.12
2006                     56,986     2,637,111     46.28     2,885,585     50.64
2007                     43,625     886,172     20.31     942,326     21.60
2008                     68,419     1,974,547     28.86     1,828,295     26.72
2009                     5,256     185,043     35.21     214,687     40.85
2010                     7,724     168,000     21.75     231,720     30.00
2011                                    
2012                                    
Thereafter                                    
 
  Princeton/East Brunswick
  Other
Year of Lease
Expiration

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring
Leases
with future
step-ups

  Per
Square
Foot

  Rentable Square
Footage Subject to
Expiring
Leases

  Current Annualized
Revenues Under
Expiring
Leases

  Per
Square
Foot

  Annualized
Revenues Under
Expiring
Leases
with future
step-ups

  Per
Square
Foot

2003   80,586   $ 2,243,192   $ 27.84   $ 2,243,192   $ 27.84     $   $   $   $
2004   380,726     11,538,192     30.31     11,538,192     30.31   161,000     774,422     4.81     774,422     4.81
2005   228,388     7,228,354     31.65     7,245,104     31.72                  
2006   92,041     3,102,246     33.71     3,233,362     35.13                  
2007   513,240     14,888,862     29.01     15,923,580     31.03                  
2008                                    
2009   177,428     5,803,810     32.71     6,478,870     36.52                  
2010   154,917     5,106,368     32.96     5,603,900     36.17                  
2011   258,039     7,925,105     30.71     8,720,857     33.80                  
2012                                    
Thereafter   319,668     9,448,193     29.56     10,580,541     33.10                  

44



Boston Properties, Inc.
Third Quarter 2003


HOTEL PERFORMANCE
Long Wharf Marriott—Boston

 
  Third Quarter
2003

  Third Quarter
2002

  Percent
Change

  YTD
2003

  YTD
2002

  Percent
Change

 
Occupancy     90.7 %   88.9 % 2.0 %   81.4 %   84.4 % -3.6 %
Average Daily Rate   $ 212.53   $ 232.27   -8.5 % $ 195.05   $ 211.03   -7.6 %
Revenue per available room   $ 192.69   $ 206.57   -6.7 % $ 158.84   $ 178.13   -10.8 %
Hotel Revenues Less Hotel Operating Expenses (in thousands)   $ 2,608   $ 3,446   -24.3 % $ 6,005   $ 7,403   -18.9 %


Cambridge Center Marriott

 
  Third Quarter
2003

  Third Quarter
2002

  Percent
Change

  YTD
2003

  YTD
2002

  Percent
Change

 
Occupancy     81.1 %   86.0 % -5.7 %   74.3 %   77.6 % -4.3 %
Average Daily Rate   $ 140.82   $ 164.24   -14.3 % $ 151.62   $ 170.68   -11.2 %
Revenue per available room   $ 114.16   $ 141.30   -19.2 % $ 112.64   $ 132.37   -14.9 %
Hotel Revenues Less Hotel Operating Expenses (in thousands)   $ 1,156   $ 1,792   -35.5 % $ 3,613   $ 5,388   -32.9 %


Residence Inn by Marriott

 
  Third Quarter
2003

  Third Quarter
2002

  Percent
Change

  YTD
2003

  YTD
2002

  Percent
Change

 
Occupancy     91.3 %   90.8 % 0.6 %   80.3 %   86.2 % -6.8 %
Average Daily Rate   $ 129.20   $ 148.20   -12.8 % $ 125.20   $ 138.16   -9.4 %
Revenue per available room   $ 117.96   $ 134.52   -12.3 % $ 100.59   $ 119.13   -15.6 %
Hotel Revenues Less Hotel Operating Expenses (in thousands)   $ 949   $ 1,245   -23.8 % $ 2,125   $ 2,850   -25.4 %


Total Hotel Performance

 
  Third Quarter
2003

  Third Quarter
2002

  Percent
Change

  YTD
2003

  YTD
2002

  Percent
Change

 
Occupancy     86.9 %   88.1 % -1.4 %   78.3 %   82.0 % -4.5 %
Average Daily Rate   $ 165.73   $ 186.82   -11.3 % $ 162.64   $ 179.25   -9.3 %
Revenue per available room   $ 144.91   $ 164.77   -12.1 % $ 127.73   $ 147.05   -13.1 %
Hotel Revenues Less Hotel Operating Expenses (in thousands)   $ 4,713   $ 6,483   -27.3 % $ 11,743   $ 15,641   -24.9 %

45



Boston Properties, Inc.
Third Quarter 2003


SAME PROPERTY PERFORMANCE

 
  Office
  Office/Technical
  Industrial
  Hotel (3)
  Total
 
Number of Properties   94   26   4   3   127  
Square feet   25,925,149   1,501,211   390,273   937,874   28,754,507  
Percent of in-service properties   88.9 % 90.4 % 100.0 % 100.0 % 89.4 %
Occupancy @ 9/30/02   94.4 % 95.0 % 100.0 %   94.5 %
Occupancy @ 9/30/03   92.8 % 88.5 % 56.6 %   92.0 %
Percent change from 3rd quarter 2003                      
  over 3rd quarter 2002 (1):                      
  Rental revenue   0.8 % -0.1 % -34.3 % -12.3 % -0.2 %
  Operating expenses and real estate taxes   4.7 % 23.9 % 6.1 % -5.1 % 3.6 %
  Rental revenue less operating expenses and real estate taxes   -1.2 % -6.1 % -43.1 % -27.4 % -2.3 %
  Rental revenue less operating expenses and real estate taxes—without hotels                   -1.4 %
  Rental revenue—cash basis   1.5 % 1.0 % -34.1 % -12.3 % 0.4 %
  Rental revenue less operating expenses and real estate taxes—cash basis   -0.2 % -4.9 % -42.7 % -27.4 % -1.5 %
  Rental revenue less operating expenses and real estate taxes—cash basis—without hotels                   -0.5 %


Same Property Lease Analysis—quarter ended September 30, 2003

 
  Office
  Office/Technical
  Industrial
  Total
 
Vacant space available @ 7/01/03 (sf)     1,792,900     152,738     41,168     1,986,806  
Square footage of leases expiring or terminated 07/01/03-09/30/03     915,057     65,136     128,105     1,108,298  
   
 
 
 
 
Total space for lease (sf)     2,707,957     217,874     169,273     3,095,104  
   
 
 
 
 
New tenants (sf)     171,014     26,811         197,825  
Renewals (sf)     661,296     18,455         679,751  
   
 
 
 
 
Total space leased (sf)     832,310     45,266         877,576  
   
 
 
 
 
Space available @ 9/30/03 (sf)     1,875,647     172,608     169,273     2,217,528  
   
 
 
 
 
Net (increase)/decrease in available space (sf)     (82,747 )   (19,870 )   (128,105 )   (230,722 )
Average lease term (months)     73     33         71  
2nd generation TI/Comm PSF   $ 6.43   $ 8.20   $   $ 6.52  
Increase (decrease) in 2nd generation net rents (2)     -14.1 %   -1.7 %   0 %   -13.6 %

(1)
See page 47 for a quantitative reconciliation.

(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.)

(3)
Includes revenue and expenses from retail tenants at the hotel properties.

46



Boston Properties, Inc.
Third Quarter 2003

Reconciliation to Same Property Performance
(in thousands)

 
  Office
  Office/Technical
  Industrial
 
 
  For the three months ended
   
   
  For the three months ended
   
   
  For the three months ended
   
   
 
 
  $
Change

  %
Change

  $
Change

  %
Change

  $
Change

  %
Change

 
 
  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
 
Rental Revenue   $ 258,906   $ 256,435             $ 5,675   $ 5,681               $ 415   $ 631            
Less Termination Income     1,735     1,382                                                  
   
 
           
 
             
 
           
Rental revenue—subtotal     257,171     255,053     2,118   0.8 %   5,675     5,681     (6 )   -0.1 %   415     631     (216 ) -34.2 %
Operating expenses and real estate taxes     89,905     85,836     4,069   4.7 %   1,398     1,128     270     23.9 %   121     114     7   6.1 %
   
 
 
 
 
 
 
 
 
 
 
 
 
Rental revenue less operating expenses and real estate taxes   $ 167,266   $ 169,217   $ (1,951 ) -1.2 % $ 4,277   $ 4,553   $ (276 )   -6.1 % $ 294   $ 517   $ (223 ) -43.1 %
   
 
 
 
 
 
 
 
 
 
 
 
 
Rental revenue—subtotal   $ 257,171   $ 255,053             $ 5,675   $ 5,681         $     $ 415   $ 631            
Less Straight Line Rent     8,264     9,905     (1,641 )       93     153     (60 )         (12 )   (17 )   5      
   
 
 
 
 
 
 
 
 
 
 
 
 
Rental revenue—cash basis     248,907     245,148     3,759   1.5 %   5,582     5,528     54     1.0 %   427     648     (221 ) -34.1 %
Less:                                                                      
Operating expenses and real estate taxes     89,905     85,836     4,069   4.7 %   1,398     1,128     270     23.9 %   121     114     7   6.1 %
   
 
 
 
 
 
 
 
 
 
 
 
 
Rental revenue less operating expenses and real estate taxes—cash basis   $ 159,002   $ 159,312   $ (310 ) -0.2 % $ 4,184   $ 4,400   $ (216 )   -4.9 % $ 306   $ 534   $ (228 ) -42.7 %
   
 
 
 
 
 
 
 
 
 
 
 
 
 
  Hotel
  Total
   
   
   
   
 
  For the three months ended
   
   
  For the three months ended
   
   
   
   
   
   
 
  $
Change

  %
Change

  $
Change

  %
Change

   
   
   
   
 
  30-Sep-03
  30-Sep-02
  30-Sep-03
  30-Sep-02
   
   
   
   
Rental Revenue   $ 17,527   $ 19,993             $ 282,523   $ 282,740                          
Less Termination Income                       1,735     1,382                          
   
 
           
 
                         
Rental revenue—subtotal     17,527     19,993   $ (2,466 ) -12.3 %   280,788     281,358     (570 ) -0.2 %              
Operating expenses and real estate taxes     12,829     13,524     (695 ) -5.1 %   104,253     100,602     3,651   3.6 %              
   
 
 
 
 
 
 
 
               
Rental revenue less operating expenses and real estate taxes   $ 4,698   $ 6,469   $ (1,771 ) -27.4 % $ 176,535   $ 180,756   $ (4,221 ) -2.3 %              
   
 
 
 
 
 
 
 
               
Rental revenue—subtotal   $ 17,527   $ 19,993             $ 280,788   $ 281,358                          
Less Straight Line Rent     3         3   100.0 %   8,348     10,041     (1,693 )                  
   
 
 
 
 
 
 
 
               
Rental revenue—cash basis     17,524     19,993     (2,469 ) -12.3 %   272,440     271,317     1,123   0.4 %              
Less:                                                            
Operating expenses and real estate taxes     12,829     13,524     (695 ) -5.1 %   104,253     100,602     3,651   3.6 %              
   
 
 
 
 
 
 
 
               
Rental revenue less operating expenses and real estate taxes—cash basis   $ 4,695   $ 6,469   $ (1,774 ) -27.4 % $ 168,187   $ 170,715   $ (2,528 ) -1.5 %              
   
 
 
 
 
 
 
 
               

47



Boston Properties, Inc.
Third Quarter 2003


PROPERTY PERFORMANCE


All In-Service Properties—quarter ended September 30, 2003

 
  Office
  Office/Technical
  Industrial
  Total
 
Vacant space available @ 07/01/03 (sf)     2,051,783     152,738     41,168     2,245,689  
Property dispositions                  
New development completed (sf)                  
Leases expiring or terminated 07/01/03—09/30/03 (sf)     918,737     65,136     128,105     1,111,978  
   
 
 
 
 
Total space for lease (sf)     2,970,520     217,874     169,273     3,357,667  
   
 
 
 
 
New tenants (sf)     217,758     26,811         244,569  
Renewals (sf)     661,296     18,455     679,751        
   
 
 
 
 
Total space leased (sf)     879,054     45,266         924,320  
   
 
 
 
 
Space available @ 09/30/03 (sf)     2,091,466     172,608     169,273     2,433,347  
   
 
 
 
 
Net (increase)/decrease in available space (sf)     (39,683 )   (19,870 )   (128,105 )   (187,658 )
Average lease term (months)     73     33         71  
2nd generation TI/Comm PSF   $ 6.43   $ 8.20   $   $ 6.52  
Increase (decrease) in 2nd generation net rents (1)     -14.05 %   -1.68 %   0.00 %   -13.64 %

(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)
Details of 1st and 2nd generation space:

 
  1st Generation
  2nd Generation
  Total
Leased

Boston   64,530   159,414   223,944
Washington     576,135   576,135
New York     19,744   19,744
San Francisco     72,905   72,905
Princeton     31,592   31,592
   
 
 
    64,530   859,790   924,320
   
 
 

48



Boston Properties, Inc.
Third Quarter 2003

HISTORICALLY GENERATED CAPITAL EXPENDITURES,
TENANT IMPROVEMENT COSTS AND LEASING COMMISSIONS

Historical Capital Expenditures
(in thousands)

 
  Q3 2003
  Q2 2003
  Q1 2003
  2002
  2001
Recurring capital expenditures   $ 3,415   $ 4,726   $ 1,960   $ 16,674   $ 11,770
Planned non-recurring capital expenditures associated with acquisition properties (1)     446     596     2,324     31,908     45,052
Hotel improvements, equipment upgrades and replacements     353     911     405     3,218     9,230
   
 
 
 
 
    $ 4,214   $ 6,233   $ 4,689   $ 51,800   $ 66,052
   
 
 
 
 


2nd Generation Tenant Improvements and Leasing Commissions(2)
(in thousands, except per share amounts)

 
  Q3 2003
  Q2 2003
  Q1 2003
  2002
  2001
Office                              
  Square feet     814,524     448,021     501,547     2,122,409     2,394,291
   
 
 
 
 
  Tenant improvement and lease commissions PSF   $ 6.43   $ 13.61   $ 8.34   $ 20.17   $ 17.47
   
 
 
 
 
Office/Technical                              
  Square feet     45,266     47,147     4,700     347,321     348,178
   
 
 
 
 
  Tenant improvement and lease commissions PSF   $ 8.20   $ 0.12   $ 0.86   $ 1.42   $ 3.13
   
 
 
 
 
Industrial                              
  Square feet                 244,904    
   
 
 
 
 
  Tenant improvement and lease commissions PSF   $   $   $   $ 0.62   $
   
 
 
 
 
  Average tenant improvement and lease commission PSF   $ 6.52   $ 12.33   $ 8.27   $ 16.01   $ 15.65
   
 
 
 
 

(1)
Includes budgeted costs associated with previously disclosed acquisitions.

(2)
Based on leases executed during the period.

49



Boston Properties, Inc.
Third Quarter 2003

VALUE CREATION PIPELINE—ACQUISITIONS/DISPOSITIONS
as of September 30, 2003

ACQUISITIONS
For the period from January 1, 2003 through September 30, 2003

Property

  Date Acquired
  Square Feet
  Initial
Investment

  Anticipated
Future
Investment

  Total
Investment

  Current
Leased

 
Discovery Square (remaining 50% interest)   Apr-03   366,989   $ 18,273,000   $   $ 18,273,000   96 %
One Freedom Square (remaining 75% interest)   Aug-03   410,308     19,294,397         19,294,397   100 %
Two Freedom Square (remaining 50% interest)   Aug-03   422,504     16,705,603     18,868,034     35,573,637   100 %
South of Market—Reston, VA Land   Aug-03   N/A     13,522,000         13,522,000   N/A  
       
 
 
 
 
 
  Total Value Creation Pipeline—Acquisitions       1,199,801   $ 67,795,000   $ 18,868,034   $ 86,663,034   99 %
       
 
 
 
 
 


DISPOSITIONS
For the period from January 1, 2003 through September 30, 2003

Property and other assets

  Date Disposed
  Square Feet
  Gross
Sales Price

  Book Gain(Loss)
 
The Candler Building   Jan-03   540,706   $ 63,067,000   $ (292,564 )
875 Third Avenue   Feb-03   711,901     370,100,000 (1)   90,020,729  
2300 N Street   Mar-03   289,243     122,000,000 (2)   64,310,972  
Prudential Center garage spaces   May-03   N/A     1,935,000     153,000  
Transfer of mortgage   Various   N/A     5,780,000     5,780,000  
       
 
 
 
Total Dispositions       1,541,850   $ 562,882,000   $ 159,972,137  
       
 
 
 

(1)
Includes $8.8 million of future tenant improvement work credited to buyer at closing.

(2)
Includes $8.0 million of future tenant improvement work credited to buyer at closing.

50



Boston Properties, Inc.
Third Quarter 2003

VALUE CREATION PIPELINE—CONSTRUCTION IN PROGRESS
as of September 30, 2003

Development Properties

  Initial Occupancy
  Estimated
Stabilization
Date

  Location
  # of
Buildings

  Square feet
  Investment
to Date

  Estimated
Total
Investment(1)

  Total
Construction
Loan

  Amount
Drawn at
September 30, 2003

  Estimated
Future Equity
Requirement

  Percentage
Leased

 
New Dominion Tech, Building Two   Q3 2004   Q3 2004   Herndon, VA   1   257,400   $ 32,209,172   $ 67,589,000   $ 65,000,000   $ 31,514,521   $ 1,894,349   100 %
Times Square Tower   Q2 2004   Q2 2005   New York, NY   1   1,234,272     462,517,552     653,500,000     493,500,000     310,362,351     7,844,799   23 %
901 New York Avenue (25% ownership)   Q3 2004   Q3 2005   Washington, D.C.   1   538,463     21,744,648     44,777,000     30,000,000     8,481,095     1,513,447   80 %
               
 
 
 
 
 
 
 
 
Total Development Properties               3   2,030,135   $ 516,471,372   $ 765,866,000   $ 588,500,000   $ 350,357,967   $ 11,252,395   48 %
               
 
 
 
 
 
 
 
 


DEVELOPMENTS PLACED-IN-SERVICE DURING 2003

Class A Office Building

  Initial
At Service Date

  Estimated
Stabilization
Date

  Location
  # of
Buildings

  Square feet
  Investment
to Date

  Estimated
Total
Investment(1)

  Construction
Loan

  Drawn at
September 30, 2003

  Estimated
Future Equity
Requirement

  Percentage
Leased

 
Waltham Weston Corporate Center   Q1 2002   Q4 2003   Waltham, MA   1   306,354   $ 70,826,568   $ 85,000,000   $   $   $ 14,173,432   65 %
Two Freedom Square (50% ownership)   Q3 2002   Q2 2003   Reston, VA   1   422,504     39,901,983     49,336,000             9,434,017   100 %
Shaws Supermarket   Q2 2003   Q2 2003   Boston, MA   1   57,235     23,390,659     24,034,000             643,341   100 %
               
 
 
 
 
 
 
 
 
Total Developments Placed in Service               3   786,093   $ 134,119,210   $ 158,370,000   $   $   $ 24,250,790   86 %
               
 
 
 
 
 
 
 
 

(1)
Includes net revenues during lease-up period and cash component of hedge contracts.

51



Boston Properties, Inc.
Third Quarter 2003

VALUE CREATION PIPELINE—OWNED LAND PARCELS
as of September 30, 2003

Location

  No. of
Parcels

  Acreage
  Developable
Square Feet

Rockville, MD   3   72.2   1,037,000
Dulles, VA   2   76.6   945,000
Gaithersburg, MD   4   27.0   850,000
San Jose, CA   5   3.7   841,000
Reston, VA   4   42.6   1,602,000
Boston, MA   2   0.5   776,000
Marlborough, MA   1   50.0   400,000
Weston, MA   1   74.0   350,000
Waltham, MA   1   4.3   202,000
Andover, MA   1   10.0   110,000
Washington, D.C.   1   0.5   170,000
   
 
 
    25   361.4   7,283,000
   
 
 


VALUE CREATION PIPELINE—LAND PURCHASE OPTIONS
as of September 30, 2003

Location

  No. of
Parcels

  Acreage
  Developable
Square Feet

Princeton, NJ (1)   14   149.9   1,900,000
Washington, D.C. (2)   1   3.7   1,132,000
Framingham, MA (2)   1   21.5   300,000
Cambridge, MA (3)   1   2.6   165,000
   
 
 
    17   177.7   3,497,000
   
 
 

(1)
$20.00 per developable square foot plus an earnout calculation.

(2)
Subject to ground lease.

(3)
Prior to January 23, 2004, the cost will be $28.32/SF of land area. Land area is approximately 108,000 SF.

52



Boston Properties, Inc.
Third Quarter 2003

Definitions

        This section contains a brief explanation of certain non-GAAP financial measures we provide in other sections of this document, and a statement of the reasons why management believes these measures provide useful information to investors about the company's financial condition or results of operations. Additional detail can be found in the company's most recent annual report on Form 10-K and other documents filed with the SEC from time to time.

Funds from Operations:

        Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"), we calculate Funds from Operations, or "FFO," by adjusting net income (loss) (computed in accordance with accounting principles generally accepted in the United States of America ("GAAP"), including non-recurring items), for gains (or losses) from sales of properties, real estate related depreciation and amortization, and after adjustment for unconsolidated partnerships and joint ventures. The use of FFO, combined with the required primary GAAP presentations, has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. Management generally considers FFO to be a useful measure for reviewing the comparative operating and financial performance of the Company because, by excluding gains and losses related to sales of previously depreciated operating real estate assets and excluding real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help one compare the operating performance of a company's real estate between periods or as compared to different companies.

        Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. In addition to presenting FFO in accordance with the NAREIT definition, we also disclose FFO after specific supplemental adjustments, including net derivative losses and early surrender lease adjustments. Although our FFO as adjusted clearly differs from NAREIT's definition of FFO, as well as that of other REITs and real estate companies, we believe it provides a meaningful supplemental measure of our operating performance. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance. FFO does not represent cash generated from operating activities determined in accordance with GAAP and is not a measure of liquidity or an indicator of our ability to make cash distributions. We believe that to further understand our performance, FFO and FFO as adjusted should be compared with our reported net income and considered in addition to cash flows in accordance with GAAP, as presented in our consolidated financial statements.

Funds Available for Distribution (FAD)

        In addition to FFO, we present Funds Available for Distribution (FAD) by (1) adding to FFO non-real estate depreciation, (2) eliminating the effect of straight-line rent, and (3) subtracting: recurring capital expenditures; hotel improvements, equipment upgrades and replacements; and second generation tenant improvement and leasing commissions. In addition, this calculation includes all non-cash compensation expense related to restricted securities. Although our FAD as adjusted differs from that of other real estate companies, we believe it provides a meaningful indicator of our ability to fund cash needs and to make cash distributions to equity owners. In addition, we believe that to further understand our liquidity, FAD should be compared with our cash flows in accordance with GAAP, as presented in our consolidated financial statements. Our computation of FAD may not be comparable to FAD reported by other REITs or real estate companies and FAD does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an



alternative to net income (determined in accordance with GAAP) as an indication of our performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of our liquidity.

Debt to Total Market Capitalization Ratio

        Debt to total market capitalization ratio, defined as total consolidated debt as a percentage of the market value of our outstanding equity securities plus our total consolidated debt, is a measure of leverage commonly used by analysts in the REIT sector. Total market capitalization is the sum of our total indebtedness outstanding on a consolidated basis (excluding unconsolidated joint venture debt) and the market value of our outstanding equity securities calculated using the closing stock price per share of common stock of the company multiplied by the sum of (1) the actual aggregate number of outstanding common partnership units of our operating partnership (including common partnership units held by the company) and (2) the number of common partnership units issuable upon conversion of preferred partnership units of our operating partnership. We are presenting this ratio because our degree of leverage could affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes. Investors should understand that our debt to total market capitalization ratio is in part a function of the market price of the common stock of Boston Properties, Inc., and as such will fluctuate with changes in such price and does not necessarily reflect our capacity to incur additional debt to finance our activities or our ability to manage our existing debt obligations. However, for a company like ours, whose assets are primarily income-producing real estate, the debt to total market capitalization ratio may provide investors with an alternate indication of leverage, so long as it is evaluated along with the ratio of indebtedness to other measures of asset value used by financial analysts and other financial ratios, as well as the various components of our outstanding indebtedness.

        If you would like to receive this document in a different electronic format, please call investor relations at 617-236-3322.

53




QuickLinks

INDEX
COMPANY BACKGROUND
INVESTOR INFORMATION
FINANCIAL HIGHLIGHTS
CONSOLIDATED BALANCE SHEETS (in thousands)
CONSOLIDATED INCOME STATEMENTS
Interest Coverage Ratios (in thousands, except for ratio amounts)
Boston Properties, Inc. Third Quarter 2003
CAPITAL STRUCTURE
Debt (in thousands)
Equity (in thousands)
Boston Properties, Inc. Third Quarter 2003
DEBT ANALYSIS
Debt Maturities and Principal Payments (in thousands)
Unsecured Debt Unsecured Line of Credit — Matures January 17, 2006 (in thousands)
Unsecured Senior Notes (in thousands)
Unsecured and Secured Debt Analysis
Floating and Fixed Rate Debt Analysis
Senior Unsecured Debt Covenant Compliance Ratios (in thousands)
DEBT MATURITIES AND PRINCIPAL PAYMENTS (in thousands)
DEBT MATURITIES AND PRINCIPAL PAYMENTS (in thousands)
UNCONSOLIDATED JOINT VENTURES Miscellaneous Balance Sheet Information (unaudited and in thousands) as of September 30, 2003
Results of Operations (unaudited and in thousands) for the three months ended September 30, 2003
UNCONSOLIDATED JOINT VENTURE DEBT ANALYSIS (*)
Debt Maturities and Principal Payments (in thousands)
Floating and Fixed Rate Debt Analysis
Debt Maturities and Principal Payments by Property (in thousands)
Boston Properties, Inc. Third Quarter 2003
PORTFOLIO OVERVIEW — SQUARE FOOTAGE Rentable Square Footage of In-Service Properties by Location and Type of Property
Hotel Properties
Structured Parking
Boston Properties, Inc. Third Quarter 2003
In-Service Property Listing as of September 30, 2003
Boston Properties, Inc. Third Quarter 2003
In-Service Property Listing as of September 30, 2003
Boston Properties, Inc. Third Quarter 2003
In-Service Property Listing as of September 30, 2003
Boston Properties, Inc. Third Quarter 2003
In-Service Property Listing as of September 30, 2003
Boston Properties, Inc. Third Quarter 2003
TOP 20 TENANTS LISTING AND PORTFOLIO TENANT DIVERSIFICATION
TOP 20 TENANTS BY SQUARE FEET LEASED
Major Signed Deals for Future Development
TENANT DIVERSIFICATION (GROSS RENT)
Boston Properties, Inc. Third Quarter 2003
PORTFOLIO OVERVIEW
Boston Properties, Inc. Third Quarter 2003 OCCUPANCY ANALYSIS
Boston Properties, Inc. Third Quarter 2003 IN-SERVICE OFFICE PROPERTIES
Boston Properties, Inc. Third Quarter 2003
Boston Properties, Inc. Third Quarter 2003
Boston Properties, Inc. Third Quarter 2003
Boston Properties, Inc. Third Quarter 2003
Boston Properties, Inc. Third Quarter 2003
Boston Properties, Inc. Third Quarter 2003
Boston Properties, Inc. Third Quarter 2003
Boston Properties, Inc. Third Quarter 2003
Boston Properties, Inc. Third Quarter 2003 IN-SERVICE GREATER SAN FRANCISCO PROPERTIES
Boston Properties, Inc. Third Quarter 2003 IN-SERVICE GREATER SAN FRANCISCO PROPERTIES
Boston Properties, Inc. Third Quarter 2003
IN-SERVICE MIDTOWN MANHATTAN PROPERTIES
Lease Expirations—Midtown Manhattan
Boston Properties, Inc. Third Quarter 2003
IN-SERVICE MIDTOWN MANHATTAN PROPERTIES
Quarterly Lease Expirations—Midtown Manhattan
Boston Properties, Inc. Third Quarter 2003
IN-SERVICE PRINCETON/EAST BRUNSWICK PROPERTIES
Lease Expirations — Princeton/East Brunswick
Boston Properties, Inc. Third Quarter 2003
IN-SERVICE PRINCETON/EAST BRUNSWICK PROPERTIES Quarterly Lease Expirations — Princeton/East Brunswick
Boston Properties, Inc. Third Quarter 2003
IN-SERVICE OTHER PROPERTIES Lease Expirations Other Properties (Richmond, VA; Baltimore, MD; Bucks County, PA)
IN-SERVICE OTHER PROPERTIES Quarterly Lease Expirations Other Properties (Richmond, VA; Baltimore, MD; Bucks County, PA)
Boston Properties, Inc. Third Quarter 2003
HOTEL PERFORMANCE Long Wharf Marriott—Boston
Cambridge Center Marriott
Residence Inn by Marriott
Total Hotel Performance
Boston Properties, Inc. Third Quarter 2003
SAME PROPERTY PERFORMANCE
Same Property Lease Analysis—quarter ended September 30, 2003
Boston Properties, Inc. Third Quarter 2003
Reconciliation to Same Property Performance (in thousands)
Boston Properties, Inc. Third Quarter 2003
PROPERTY PERFORMANCE
All In-Service Properties—quarter ended September 30, 2003
Boston Properties, Inc. Third Quarter 2003
HISTORICALLY GENERATED CAPITAL EXPENDITURES, TENANT IMPROVEMENT COSTS AND LEASING COMMISSIONS
Historical Capital Expenditures (in thousands)
2nd Generation Tenant Improvements and Leasing Commissions(2) (in thousands, except per share amounts)
Boston Properties, Inc. Third Quarter 2003
VALUE CREATION PIPELINE—ACQUISITIONS/DISPOSITIONS as of September 30, 2003
ACQUISITIONS For the period from January 1, 2003 through September 30, 2003
DISPOSITIONS For the period from January 1, 2003 through September 30, 2003
Boston Properties, Inc. Third Quarter 2003
VALUE CREATION PIPELINE—CONSTRUCTION IN PROGRESS as of September 30, 2003
DEVELOPMENTS PLACED-IN-SERVICE DURING 2003
Boston Properties, Inc. Third Quarter 2003
VALUE CREATION PIPELINE—OWNED LAND PARCELS as of September 30, 2003
VALUE CREATION PIPELINE—LAND PURCHASE OPTIONS as of September 30, 2003
Boston Properties, Inc. Third Quarter 2003
Definitions

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Exhibit 99.2

[FRB LOGO]   Boston Properties, Inc.
111 Huntington Avenue
Boston, MA 02199
(NYSE: BXP)

AT THE COMPANY
Kathleen DiChiara
Investor Relations
(617) 236-3300

 

AT FRB/WEBER SHANDWICK
Marilynn Meek—General Info. (212) 445-8431
Suzie Pileggi—Media (212) 445-8170

FOR IMMEDIATE RELEASE:
October 21, 2003

 

 

BOSTON PROPERTIES, INC. ANNOUNCES
THIRD QUARTER 2003 RESULTS

Reports diluted FFO per share of $0.98   Reports diluted EPS of $0.48

BOSTON, MA, October 21, 2003—Boston Properties, Inc. (NYSE: BXP), a real estate investment trust, today reported results for the third quarter ended September 30, 2003.

Funds from Operations (FFO) for the quarter ended September 30, 2003 were $99.1 million, or $1.02 per share basic and $0.98 per share diluted before the application of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended. This compares to FFO of $99.0 million, or $1.04 per share basic and $1.00 per share diluted for the quarter ended September 30, 2002. The weighted average number of basic and diluted shares outstanding totaled 97,360,498 and 107,231,333, respectively, for the quarter ended September 30, 2003 and 94,903,894 and 105,724,729, respectively, for the same quarter last year.

Net income available to common shareholders per share (EPS) for the quarter ended September 30, 2003 was $0.48 basic and $0.48 on a diluted basis. This compares to EPS for the third quarter of 2002 of $0.75 basic and $0.74 on a diluted basis. EPS for the third quarter of 2003 includes a charge of ($0.10) for the cumulative effect of a change in accounting principle related to the adoption of SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity" and $0.02 related to a gain on sale of real estate and other assets. EPS for the third quarter of 2002 included $0.19 related to gains on sales of real estate and discontinued operations. Excluding the impact of these items, diluted EPS was $0.56 for the quarter ended September 30, 2003 compared to $0.55 for the third quarter of 2002.

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, 2003. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made.

As of September 30, 2003, the Company's portfolio consisted of 139 properties comprising more than 43.5 million square feet, including three properties under construction totaling 2.0 million square feet. The overall percentage of leased space for the properties in service as of September 30, 2003 was 92.2%.

Significant events of the third quarter include:


Effective July 1, 2003, the Company adopted SFAS No. 150 "Accounting for Certain Instruments with Characteristics of Both Liabilities and Equity," which establishes a new standard for reclassifying certain financial instruments (e.g., minority interest in equity of consolidated joint ventures) from either equity or mezzanine presentation to liabilities. The liability is initially measured at fair value with subsequent changes in fair value of the instruments recognized through earnings. SFAS No. 150 requires the minority interest in equity of one of the Company's consolidated joint ventures to be reflected at fair value. Accordingly upon adoption of SFAS No. 150, the Company recognized a non-cash charge of $9.8 million (net of minority interest in Operating Partnership's share of $2.2 million) to account for the cumulative effect of adjusting the venture partner's outside minority interest to fair value. Under SFAS No. 150, the Company is not permitted to recognize its share of appreciation in the venture's net assets until later realized through sale or liquidation.

Transactions completed subsequent to September 30, 2003:


EPS and FFO Per Share Guidance:

        The Company's guidance for the fourth quarter of 2003 and the full year of 2004 for EPS (diluted) and FFO per share (diluted) is set forth and reconciled below. The reconciliation of Projected EPS to Projected FFO per share, as provided below, is consistent with the Company's historical computations.

 
  Fourth Quarter 2003
  Full Year 2004
 
  Low
 
  High
  Low
 
  High
 
 
 
Projected EPS (diluted)   $ 0.59     $ 0.61   $ 2.23     $ 2.41
Add:                                
Projected Company Share of Real Estate Depreciation and Amortization   $ 0.45     $ 0.44   $ 1.85     $ 1.85
Projected Company Share of Net Derivatives   $ 0.00     $ 0.00   $ 0.00     $ 0.00
Less:                                
Dilutive Impact of Preferred Securities   $ 0.04     $ 0.04   $ 0.15     $ 0.15
   
 
 
 
 
 
Projected FFO per Share (diluted) before net derivatives   $ 1.00     $ 1.01   $ 3.93     $ 4.11

The foregoing estimates reflect management's view of current and future market conditions, including certain assumptions with respect to rental rates, occupancy levels and earnings impact of the events referenced in this release. There can be no assurance that the Company's actual results will not differ materially from the estimates set forth above.

Boston Properties will host a conference call tomorrow, October 22, 2003 at 11:00 AM (Eastern Time), open to the general public, to discuss the results of this year's third quarter. The number to call for this interactive teleconference is (800) 240-5318. A replay of the conference call will be available through October 29, 2003 by dialing (800) 405-2236 and entering the passcode 547315. An audio-webcast will also be archived and may be accessed at www.bostonproperties.com in the Investors section under the heading Audio Archive.

Additionally, a copy of Boston Properties' third quarter 2003 "Supplemental Operating and Financial Data" and this press release are available in the Investors section of the Company's website at www.bostonproperties.com. These materials are also available by contacting Investor Relations at (617) 236-3322 or by written request to:

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, D.C. and San Francisco.

This press release contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words "expects," "plans," "estimates," "projects," "intends," "believes" and similar expressions that do not relate to historical matters. 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, the impact of newly adopted accounting principles on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company does not undertake a duty to update forward-looking statements, including its expected operating results for the fourth quarter of 2003 and the full year of 2004.

Financial tables follow.



BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 
  Three months ended
September 30,

  Nine months ended
September 30,

 
 
  2003
  2002
  2003
  2002
 
 
  (in thousands, except for per share amounts)
(unaudited)

 
Revenue                          
  Rental:                          
    Base rent   $ 253,594   $ 229,453   $ 749,795   $ 678,766  
    Recoveries from tenants     42,079     34,884     119,222     103,409  
    Parking and other     13,249     13,056     41,399     37,610  
   
 
 
 
 
      Total rental revenue     308,922     277,393     910,416     819,785  
  Hotel revenue     17,542     20,007     48,001     20,007  
  Development and management services     3,616     2,571     13,635     7,979  
  Interest and other     1,089     1,222     2,167     4,804  
   
 
 
 
 
      Total revenue     331,169     301,193     974,219     852,575  
   
 
 
 
 
Expenses                          
  Operating:                          
    Rental     107,404     95,118     302,195     269,940  
    Hotel     12,829     13,524     36,258     13,524  
  General and administrative     11,183     9,956     33,610     34,589  
  Interest     75,343     65,476     224,435     190,657  
  Depreciation and amortization     53,455     43,933     154,021     127,819  
  Net derivative (gains)/losses     (885 )   5,284     1,038     10,413  
  Loss from early extinguishment of debt             1,474      
  Loss on investments in securities                 4,297  
   
 
 
 
 
      Total expenses     259,329     233,291     753,031     651,239  
   
 
 
 
 
Income before minority interests in property partnerships, income from unconsolidated joint ventures, minority interest in Operating Partnership, gains on sales of real estate and other assets, discontinued operations, cumulative effect of a change in accounting principle and preferred dividend     71,840     67,902     221,188     201,336  
Minority interests in property partnerships     563     720     1,205     1,903  
Income from unconsolidated joint ventures     1,343     2,530     5,354     5,871  
   
 
 
 
 
Income before minority interest in Operating Partnership, gains on sales of real estate and other assets, discontinued operations, cumulative effect of a change in accounting principle and preferred dividend     73,746     71,152     227,747     209,110  
Minority interest in Operating Partnership     (18,117 )   (18,071 )   (55,783 )   (54,761 )
   
 
 
 
 
Income before gains on sales of real estate and other assets, discontinued operations, cumulative effect of a change in accounting principle and preferred dividend     55,629     53,081     171,964     154,349  
Gains on sales of real estate and other assets, net of minority interest     1,341     3,644     57,729     3,644  
   
 
 
 
 
Income before discontinued operations, cumulative effect of a change in accounting principle and preferred dividend     56,970     56,725     229,693     157,993  
Discontinued Operations:                          
  Income from discontinued operations, net of minority interest         3,032     1,938     9,350  
  Gains on sales of real estate from discontinued operations, net of minority interest         11,910     73,436     17,750  
   
 
 
 
 
Income before cumulative effect of a change in accounting principle and preferred dividend     56,970     71,667     305,067     185,093  
Cumulative effect of a change in accounting principle, net of minority interest     (9,846 )       (9,889 )    
   
 
 
 
 
Income before preferred dividend     47,124     71,667     295,178     185,093  
Preferred dividend         (126 )       (3,412 )
   
 
 
 
 
Net income available to common shareholders   $ 47,124   $ 71,541   $ 295,178   $ 181,681  
   
 
 
 
 
Basic earnings per share:                          
  Income available to common shareholders before discontinued operations and cumulative effect of a change in accounting principle   $ 0.58   $ 0.59   $ 2.38   $ 1.68  
  Discontinued operations, net of minority interest         0.16     0.78     0.29  
  Cumulative effect of a change in accounting principle, net of minority interest     (0.10 )       (0.10 )    
   
 
 
 
 
  Net income available to common shareholders   $ 0.48   $ 0.75   $ 3.06   $ 1.97  
   
 
 
 
 
  Weighted average number of common shares outstanding     97,360     94,904     96,547     92,413  
   
 
 
 
 
Diluted earnings per share:                          
  Income available to common shareholders before discontinued operations and cumulative effect of a change in accounting principle   $ 0.58   $ 0.59   $ 2.34   $ 1.64  
  Discontinued operations, net of minority interest         0.15     0.77     0.29  
  Cumulative effect of a change in accounting principle, net of minority interest     (0.10 )       (0.10 )    
   
 
 
 
 
  Net income available to common shareholders   $ 0.48   $ 0.74   $ 3.01   $ 1.93  
   
 
 
 
 
  Weighted average number of common and common equivalent shares outstanding     99,183     96,181     98,029     94,026  
   
 
 
 
 


BOSTON PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

 
  September 30,
2003

  December 31,
2002

 
 
  (in thousands, except for share amounts)
(unaudited)

 
ASSETS
             
Real estate   $ 8,060,525   $ 7,781,684  
Development in progress     481,571     448,576  
Land held for future development     232,361     215,866  
Real estate held for sale, net         224,585  
  Less: accumulated depreciation     (952,754 )   (822,933 )
   
 
 
      Total real estate     7,821,703     7,847,778  
Cash and cash equivalents     37,621     55,275  
Cash held in escrows     27,992     41,906  
Tenant and other receivables, net     21,813     20,458  
Accrued rental income, net     175,063     165,321  
Deferred charges, net     178,819     176,545  
Prepaid expenses and other assets     57,012     18,015  
Investments in unconsolidated joint ventures     88,632     101,905  
   
 
 
      Total assets   $ 8,408,655   $ 8,427,203  
   
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY              
Liabilities:              
  Mortgage notes payable   $ 3,450,112   $ 4,267,119  
  Unsecured senior notes, net of discount     1,470,231     747,375  
  Unsecured bridge loan         105,683  
  Unsecured line of credit         27,043  
  Accounts payable and accrued expenses     69,940     73,846  
  Dividends and distributions payable     83,972     81,226  
  Interest rate contracts     9,875     14,514  
  Accrued interest payable     44,010     25,141  
  Minority interest in property partnership     12,019      
  Other liabilities     69,242     81,085  
   
 
 
      Total liabilities     5,209,401     5,423,032  
   
 
 
Commitments and contingencies            
   
 
 
Minority interests     827,537     844,581  
   
 
 
Stockholders' equity:              
  Excess stock, $.01 par value, 150,000,000 shares authorized, none issued or outstanding          
  Preferred stock, $.01 par value, 50,000,000 shares authorized, none issued or outstanding          
  Common stock, $.01 par value, 250,000,000 shares authorized, 97,656,565 and 95,441,890 shares issued and 97,577,665 and 95,362,990 shares outstanding in 2003 and 2002, respectively     976     954  
  Additional paid-in capital     2,084,375     1,982,689  
  Earnings in excess of dividends     312,868     198,586  
  Treasury common stock, at cost     (2,722 )   (2,722 )
  Unearned compensation     (7,271 )   (2,899 )
  Accumulated other comprehensive loss     (16,509 )   (17,018 )
   
 
 
      Total stockholders' equity     2,371,717     2,159,590  
   
 
 
        Total liabilities and stockholders' equity   $ 8,408,655   $ 8,427,203  
   
 
 


BOSTON PROPERTIES, INC.

FUNDS FROM OPERATIONS (1)

 
  Three months ended
September 30,

  Nine months ended
September 30,

 
 
  2003
  2002
  2003
  2002
 
 
  (in thousands, except for per share amounts)
(unaudited)

 
Net income available to common shareholders   $ 47,124   $ 71,541   $ 295,178   $ 181,681  
Add:                          
  Preferred dividend         126         3,412  
  Minority interest in Operating Partnership     18,117     18,071     55,783     54,761  
  Cumulative effect of a change in accounting principle, net of minority interest     9,846         9,889      
Less:                          
  Minority interests in property partnerships     563     720     1,205     1,903  
  Income from unconsolidated joint ventures     1,343     2,530     5,354     5,871  
  Gains on sales of real estate and other assets, net of minority interest     1,341     3,644     57,729     3,644  
  Income from discontinued operations, net of minority interest         3,032     1,938     9,350  
  Gains on sales of real estate from discontinued operations, net of minority interest         11,910     73,436     17,750  
Income before minority interests in property partnerships, income from unconsolidated joint ventures, minority interest in Operating Partnership, gains on sales of real estate and other assets, discontinued operations, cumulative effect of a change in accounting principle and preferred dividend   $ 71,840   $ 67,902   $ 221,188   $ 201,336  

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 
  Real estate depreciation and amortization     54,606     46,971     158,735     136,502  
  Income from discontinued operations         3,687     2,355     11,417  
  Income from unconsolidated joint ventures     1,343     2,530     5,354     5,871  
  Loss from early extinguishment of debt associated with the sale of real estate             1,474      
Less:                          
  Minority interests in property partnerships' share of funds from operations     (805 )   (521 )   (2,513 )   (1,833 )
  Preferred dividends and distributions     (5,183 )   (6,162 )   (16,806 )   (22,785 )
   
 
 
 
 
Funds from operations     121,801     114,407     369,787     330,508  

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

 

 
  Net derivative (gains)/losses (SFAS No. 133)     (885 )   5,284     1,038     10,413  
  Early surrender lease adjustment (2)         667         8,520  
   
 
 
 
 
Funds from operations before net derivative losses (SFAS No. 133) and after early surrender lease adjustment   $ 120,916   $ 120,358   $ 370,825   $ 349,441  
   
 
 
 
 
Funds from operations available to common shareholders before net derivative losses (SFAS No. 133) and after early surrender lease adjustment   $ 99,057   $ 98,980   $ 305,122   $ 286,080  
   
 
 
 
 
Weighted average shares outstanding—basic     97,360     94,904     96,547     92,413  
   
 
 
 
 
  FFO per share basic before net derivative losses (SFAS No. 133) and after early surrender adjustment   $ 1.02   $ 1.04   $ 3.16   $ 3.10  
   
 
 
 
 
  FFO per share basic after net derivative losses (SFAS No. 133) and before early surrender lease adjustment   $ 1.02   $ 0.99   $ 3.15   $ 2.93  
   
 
 
 
 
Weighted average shares outstanding—diluted     107,231     105,725     106,839     105,870  
   
 
 
 
 
  FFO per share diluted before net derivative losses (SFAS No. 133) and after early surrender lease adjustment   $ 0.98   $ 1.00   $ 3.04   $ 2.95  
   
 
 
 
 
  FFO per share diluted after net derivative losses (SFAS No. 133) and before early surrender lease adjustment   $ 0.99   $ 0.95   $ 3.03   $ 2.80  
   
 
 
 
 


(1)
Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"), we calculate Funds from Operations, or "FFO," by adjusting net income (loss) (computed in accordance with accounting principles generally accepted in the United States of America ("GAAP"), including non-recurring items), for gains (or losses) from sales of properties, real estate related depreciation and amortization, and after adjustment for unconsolidated partnerships and joint ventures. The use of FFO, combined with the required primary GAAP presentations, has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. Management generally considers FFO to be a useful measure for reviewing the comparative operating and financial performance of the Company because, by excluding gains and losses related to sales of previously depreciated operating real estate assets and excluding real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help one compare the operating performance of a company's real estate between periods or as compared to different companies.

Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. In addition to presenting FFO in accordance with the NAREIT definition, we also disclose FFO after specific supplemental adjustments, including net derivative losses and early surrender lease adjustments. Although our FFO as adjusted clearly differs from NAREIT's definition of FFO, as well as that of other REITs and real estate companies, we believe it provides a meaningful supplemental measure of our operating performance. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance. FFO does not represent cash generated from operating activities determined in accordance with GAAP and is not a measure of liquidity or an indicator of our ability to make cash distributions. We believe that to further understand our performance, FFO and FFO as adjusted should be compared with our reported net income and considered in addition to cash flows in accordance with GAAP, as presented in our consolidated financial statements.

(2)
Represents cash received under contractual obligations.


BOSTON PROPERTIES, INC.

PROJECTED 2004 RETURNS ON ACQUISITIONS

 
  1333 New
Hampshire
Avenue

  One and Two
Freedom Square

 
 
  (dollars in thousands)

 
Base rent and recoveries from tenants   $ 12,600   $ 27,663  
Straight-line rent     800     3,467  
Fair value lease revenue     2,000     (1,393 )
   
 
 
Total rental revenue     15,400     29,737  
Operating Expenses     3,300     6,922  
   
 
 
Revenue less Operating Expenses     12,100     22,815  
Interest expense         (5,178 )
Depreciation and amortization     (3,100 )   (5,330 )
   
 
 
Net income   $ 9,000   $ 12,307  
Add:              
Interest expense         5,178  
Depreciation and amortization     3,100     5,330  
   
 
 
Unleveraged FFO   $ 12,100   $ 22,815  
Less:              
Straight-line rent     (800 )   (3,467 )
Fair value lease revenue     (2,000 )   1,393  
   
 
 
Unleveraged Cash   $ 9,300   $ 20,741 (3)

Cash

 

$

113,800

 

$

36,000

 
Total debt         151,500  
Existing equity         6,100  
Costs to complete         18,300  
   
 
 
Total Investment   $ 113,800   $ 211,900  

Unleveraged FFO Return (1)

 

 

10.6

%

 

10.8

%
Unleveraged Cash Return (2)     8.2 %   9.8 %

(1)
Unleveraged FFO Return is determined by dividing Unleveraged FFO by Total Investment. Other real estate companies may calculate this return differently. Management believes projected Unleveraged FFO Return is a useful measure in the real estate industry when determining the appropriate purchase price for a property or estimating a property's value. When evaluating acquisition opportunities, management considers, among other factors, projected Unleveraged FFO Return because it excludes, among other items, interest expense (which may vary depending on the level of corporate debt or proprety-specific debt), as well as depreciation and amortization expense (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates) In addition, management considers its cost of capital and available financing alternatives in making decisions concerning acquisitions.

(2)
Unleveraged Cash Return is determined by dividing Unleveraged Cash by Total Investment. Other real estate companies may calculate this return differently. Management believes that projected Unleveraged Cash Return is also a useful measure of a property's value when used in addition to Unleveraged FFO Return because it eliminates the effect of straight-lining of rent and the FAS 141 treatment of in-place above and below market leases which over the forecasted period enables an investor to assess the cash on cash return from the property.

(3)
Does not include approximately $1.3 million of free rent granted to a tenant for the first four months of 2004.

        Management is presenting these projected returns and related calculations to assist investors in analyzing the Company's recent acquisitions. Management does not intend to present this data for any other purpose, for any other period or for its other properties, and is not intending for these measures to otherwise provide information to investors about the Company's financial condition or results of operations. The Company does not undertake a duty to update any of these projections.



BOSTON PROPERTIES, INC.

PORTFOLIO LEASING PERCENTAGES

 
  % Leased by Location
 
  September 30, 2003
  December 31, 2002
Greater Boston   87.5%   91.8%
Greater Washington, D.C.   95.1%   95.9%
Midtown Manhattan   98.9%   98.4%
Baltimore, MD   98.5%   97.6%
Richmond, VA   88.9%   91.8%
Princeton/East Brunswick, NJ   95.0%   93.3%
Greater San Francisco   85.5%   87.4%
Bucks County, PA   100.0%   100.0%
   
 
  Total Portfolio   92.2%   93.9%
   
 
 
 
% Leased by Type

 
  September 30, 2003
  December 31, 2002
Class A Office Portfolio   93.0%   94.1%
Office/Technical Portfolio   86.1%   89.7%
Industrial Portfolio   56.6%   100.0%
   
 
  Total Portfolio   92.2%   93.9%
   
 



QuickLinks

BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS
BOSTON PROPERTIES, INC. FUNDS FROM OPERATIONS (1)
BOSTON PROPERTIES, INC. PROJECTED 2004 RETURNS ON ACQUISITIONS
BOSTON PROPERTIES, INC. PORTFOLIO LEASING PERCENTAGES