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8-K

UNITED STATES

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): January 31, 2017

BOSTON PROPERTIES, INC.

BOSTON PROPERTIES LIMITED PARTNERSHIP

(Exact Name of Registrants As Specified in its Charter)


Boston Properties, Inc.	Delaware	1-13087	04-2473675
	(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Boston Properties Limited Partnership	Delaware	0-50209	04-3372948
	(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

800 Boylston Street, Suite 1900, Boston, Massachusetts 02199

(Address of Principal Executive Offices) (Zip Code)

(617) 236-3300

(Registrants’ telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions (see General Instruction A.2. below):

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.

Results of Operations and Financial Condition.

The information in this Item 2.02 - “Results of Operations and Financial Condition” is being furnished. Such information, including Exhibits 99.1 and 99.2 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 Item 2.02, including Exhibits 99.1 and 99.2, 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 January 31, 2017, Boston Properties, Inc. (the “Company”), the general partner of Boston Properties Limited Partnership, issued a press release announcing its financial results for the fourth quarter of 2016. 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, respectively, and are incorporated by reference herein.

Item 9.01.

Financial Statements and Exhibits.

(d)	Exhibits.


Exhibit No.		Description

*99.1		Boston Properties, Inc. Supplemental Operating and Financial Data for the quarter ended December 31, 2016.

*99.2		Press release dated January 31, 2017.

*	Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.


BOSTON PROPERTIES, INC.

By:		/s/ Michael E. LaBelle
		Michael E. LaBelle
		Executive Vice President, Chief Financial Officer and Treasurer

BOSTON PROPERTIES LIMITED PARTNERSHIP
By:		Boston Properties, Inc., its General Partner

By:		/s/ Michael E. LaBelle
		Michael E. LaBelle
		Executive Vice President, Chief Financial Officer and Treasurer

Date: January 31, 2017

EXHIBIT INDEX


Exhibit No.		Description

*99.1		Boston Properties, Inc. Supplemental Operating and Financial Data for the quarter ended December 31, 2016.

*99.2		Press release dated January 31, 2017.

*	Filed herewith.

EX-99.1

Exhibit 99.1

LOGO

Supplemental Operating and Financial Data

for the Quarter Ended December 31, 2016

LOGO

FOURTH QUARTER 2016

Table of Contents


	Page
Company Profile		3
Investor Information		4
Research Coverage		5
Guidance and Assumptions		6
Financial Highlights		7-8
Consolidated Balance Sheets		9
Consolidated Income Statements		10
Funds From Operations		11
Funds Available for Distribution		12
Interest Coverage Ratios		13
Capital Structure		14
Debt Analysis		15-16
Unconsolidated Joint Ventures		17-18
Consolidated Joint Ventures		19-20
Reconciliation to Same Property Performance and Net Income		21-23
Residential and Hotel Performance		24
Capital Expenditures, Tenant Improvements and Leasing Commissions		25
Portfolio Overview		26
In-Service Property Listing		27-29
Occupancy by Location		30
Top 20 Tenants and Tenant Diversification		31
Aggregate Lease Expiration Roll Out		32
Boston Lease Expiration Roll Out		33-34
New York Lease Expiration Roll Out		35-36
San Francisco and Los Angeles Lease Expiration Roll Out		37-38
Washington, DC Lease Expiration Roll Out		39-40
CBD/Suburban Lease Expiration Roll Out		41-42
Leasing Activity		43
Acquisitions/Dispositions		44
Value Creation Pipeline - Construction in Progress		45
Value Creation Pipeline - Land Parcels and Purchase Options		46
Definitions		47-48

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 “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “will” 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 that 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, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the ability of our joint venture partners to satisfy their obligations, the costs and availability of financing, the effectiveness of our interest rate hedging programs, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Company’s accounting policies and 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. These forward-looking statements speak only as of the date hereof and are not guarantees of future results, performance or achievements. Boston Properties does not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

(Cover photo: 888 Boylston Street, Boston, MA)

LOGO

FOURTH QUARTER 2016

COMPANY PROFILE

The Company

Boston Properties, Inc. (“Boston Properties,” “BXP” or 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 five markets: Boston, Los Angeles, New York, San Francisco, and Washington, DC. The Company was founded in 1970 by Mortimer B. Zuckerman and Edward H. Linde in Boston, where it maintains its headquarters. Boston Properties became a public company in June 1997. Boston Properties is a fully integrated real estate investment trust that develops, redevelops, acquires, manages, operates and owns a diverse portfolio of primarily Class A office space totaling 47.7 million square feet and consisting of 164 office properties (including six properties under construction), five retail properties, four residential properties (including two properties under construction/redevelopment) and one hotel. Boston Properties is well-known for its in-house building management expertise and responsiveness to tenants’ needs. The Company holds a superior track record in developing premium Central Business District (CBD) office buildings, successful mixed-use complexes, suburban office centers and build-to-suit projects for the U.S. government and a diverse array of creditworthy tenants.

Management

Boston Properties’ senior management team is among the most respected and accomplished in the REIT industry. Our deep and talented team of 35 individuals averages 30 years of real estate experience and 19 years with Boston Properties. We believe that our size, management depth, financial strength, reputation, and relationships of key personnel provide a competitive advantage to realize growth through property development and acquisitions. Boston Properties benefits from the reputation and relationships of key personnel, including Owen D. Thomas, Chief Executive Officer; Douglas T. Linde, President; Raymond A. Ritchey, Senior Executive Vice President; and Michael E. LaBelle, Executive Vice President, Chief Financial Officer and Treasurer. Our senior management team’s national reputation helps us attract business and investment opportunities. In addition, our other executive officers that serve as Regional Managers have strong reputations that assist in identifying and closing on new opportunities, having opportunities brought to us, and in negotiating with tenants and build-to-suit prospects. Additionally, Boston Properties’ Board of Directors consists of 11 distinguished members, the majority of whom are Independent Directors.

Strategy

Boston Properties’ primary business objective is to maximize return on investment in an effort to provide its investors with the greatest possible total return in all points of the economic cycle. To achieve this objective, the Company maintains consistent strategies that include the following:

•

concentrating on carefully targeted markets 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 - currently Boston, Los Angeles, New York, San Francisco and Washington, DC;

•

investing in the highest quality buildings (primarily office) that are able to maintain high occupancy and achieve premium rental rates through economic cycles;

•

in our core markets, maintaining scale and a full service real estate capability (leasing, development, construction and property management) to ensure we (1) see all relevant investment deal flow and (2) maintain an ability to execute on all types of real estate opportunities, such as acquisitions, dispositions, repositioning and development, throughout the real estate investment cycle;

•

be astute in market timing for investment decisions by acquiring properties in times of opportunity, developing into economic growth and selectively selling assets to either take advantage of the demand for our premier properties or pare from the portfolio properties that we believe have slower future growth potential, resulting in continuous portfolio refreshment;

•

taking on complex, technically-challenging development projects that leverage the skills of our management team to successfully develop, acquire, and reposition properties;

•

exploring joint-venture opportunities with partners who seek to benefit from our depth of development and management expertise;

•

ensuring a strong balance sheet to maintain consistent access to capital and the resultant ability to make opportunistic investments; and

•

fostering a culture and reputation of integrity and fair dealing, making us the counterparty of choice for tenants and real estate industry participants.


Snapshot
(as of December 31, 2016)
Corporate Headquarters		Boston, Massachusetts
Markets		Boston, Los Angeles, New York, San Francisco and Washington, DC
Fiscal Year-End		December 31
Total Properties (includes unconsolidated joint ventures)		174
Total Square Feet (includes unconsolidated joint ventures)		47.7 million
Common shares outstanding, plus common units and LTIP units (including Outperformance Plan Units and 2013 Multi-Year Long-Term Incentive Program (“MYLTIP”) Units) on an as-converted basis (excludes 2014, 2015 and 2016 MYLTIP Units because not yet earned) (1)		171.8 million
Dividend - Quarter/Annualized (2)		$0.75/$3.00
Dividend Yield		2.39%
Consolidated Market Capitalization		$31.6 billion
BXP’s Share of Combined Market Capitalization (3)		$30.8 billion
Senior Debt Ratings		A- (S&P); BBB+ (Fitch); Baa2 (Moody’s)

(1)	For additional detail, see page 14.

(2)	The Company increased its regular quarterly cash dividend to $0.75 from $0.65 per share of common stock beginning with the period from October 1, 2016 to December 31, 2016.

(3)	For the Company’s definition of BXP’s Share of Combined Market Capitalization and related disclosures, see page 47. For a quantitative reconciliation of Consolidated Market Capitalization to BXP’s Share of Combined Market Capitalization, see page 14.

LOGO

FOURTH QUARTER 2016

INVESTOR INFORMATION


Board of Directors		Management
Joel I. Klein	Dr. Jacob A. Frenkel	Raymond A. Ritchey	John F. Powers
Lead Independent Director	Director, Chair of Nominating & Corporate Governance Committee	Senior Executive Vice President	Executive Vice President, New York Region

Owen D. Thomas		Michael E. LaBelle
Chief Executive Officer and Director	Matthew J. Lustig	Executive Vice President, Chief Financial Officer and Treasurer	Frank D. Burt
	Director		Senior Vice President, General Counsel
Douglas T. Linde
President and Director	Alan J. Patricof	Peter D. Johnston	Michael R. Walsh
	Director	Executive Vice President, Washington, DC Region	Senior Vice President, Chief Accounting Officer
Bruce W. Duncan
Director	Martin Turchin
	Director	Bryan J. Koop
Karen E. Dykstra		Executive Vice President,
Director	David A. Twardock	Boston Region
	Director, Chair of Audit Committee
Carol B. Einiger	Director, Chair of Audit Committee	Robert E. Pester
Director, Chair of Compensation Committee		Executive Vice President,
Director, Chair of Compensation Committee		San Francisco Region

Chairman Emeritus
Mortimer B. Zuckerman

Company Information
Corporate Headquarters	Trading Symbol	Investor Relations	Inquires
800 Boylston Street Suite 1900 Boston, MA 02199 (t) 617.236.3300 (f) 617.236.3311	BXP Stock Exchange Listing New York Stock Exchange	Boston Properties, Inc. 800 Boylston Street, Suite 1900 Boston, MA 02199 (t) 617.236.3322 (f) 617.236.3311 www.bostonproperties.com	Inquiries should be directed to Michael E. LaBelle Executive Vice President, Chief Financial Officer and Treasurer at 617.236.3352 or mlabelle@bostonproperties.com Arista Joyner, Investor Relations Manager at 617.236.3343 or ajoyner@bostonproperties.com

Common Stock Data (NYSE: BXP)

Boston Properties’ common stock has the following characteristics (based on information reported by the New York Stock Exchange):


	Q4 2016			Q3 2016			Q2 2016			Q1 2016			Q4 2015
High Closing Price	$	133.39		$	143.61		$	133.13		$	127.26		$	130.15
Low Closing Price	$	114.07		$	130.03		$	123.71		$	108.18		$	118.62
Average Closing Price	$	124.31		$	138.78		$	128.38		$	118.69		$	124.47
Closing Price, at the end of the quarter	$	125.78		$	136.29		$	131.90		$	127.08		$	127.54

Dividends per share	$	0.75	(1)	$	0.65		$	0.65		$	0.65		$	0.65
Special dividends per share	$	—		$	—		$	—		$	—		$	1.25

Total dividends	$	0.75		$	0.65		$	0.65		$	0.65		$	1.90

Closing dividend yield - annualized		2.39	%		1.91	%		1.97	%		2.05	%		3.02	%(2)

Closing common shares outstanding, plus common units and LTIP units (including Outperformance Plan Units and 2013 MYLTIP Units) on an as-converted basis (excludes 2014, 2015 and 2016 MYLTIP Units because not yet earned) (thousands) (3)		171,774			171,775			171,772			171,763			171,509

Closing market value of outstanding shares and units (thousands)	$	21,805,734		$	23,611,215		$	22,856,727		$	22,027,642		$	22,074,258

(1)

The Company increased its regular quarterly cash dividend to $0.75 from $0.65 per share of common stock beginning with the period from October 1, 2016 to December 31, 2016.

(2)

Includes the special dividend of $1.25 per share paid on January 28, 2016 to shareholders of record as of the close of business on December 31, 2015.

(3)

For additional detail, see page 14.

Timing

Quarterly results for the next four quarters will be announced according to the following schedule:


First Quarter, 2017		Tentatively April 25, 2017
Second Quarter, 2017		Tentatively August 1, 2017
Third Quarter, 2017		Tentatively November 1, 2017
Fourth Quarter, 2017		Tentatively January 30, 2018

LOGO

FOURTH QUARTER 2016

RESEARCH COVERAGE


Equity Research Coverage		Debt Research Coverage	Rating Agencies

Jacob Kilstein	Anthony Paolone	Andrew Mollay	Stephen Boyd Fitch Ratings 212.908.9153
Argus Research Company	J.P. Morgan Securities	Bank of America Merrill Lynch
646.747.5447	212.622.6682	646.855.6435

Jeffrey Spector / Jamie Feldman	Craig Mailman / Jordan Sadler	Peter Troisi	Ranjini Venkatesan
Bank of America Merrill Lynch	KeyBanc Capital Markets	Barclays	Moody’s Investors Service
646.855.1363 / 646.855.5808	917.368.2316 / 917.368.2280	212.412.3695	212.553.3828

Ross Smotrich / Peter Siciliano	Richard Anderson	Thomas Cook	Anita Ogbara
Barclays Capital	Mizuho Securities	Citi Investment Research	Standard & Poor’s
212.526.2306 / 212.526.3098	212.205.8445	212.723.1112	212.438.5077

John Kim	Sumit Sharma / Vikram Malhotra	Ron Perrotta
BMO Capital	Morgan Stanley	Goldman Sachs
212.885.4115	212.761.7567 / 212.761.7064	212.702.7885

Tom Catherwood	Brad Schwer	Mark Streeter
BTIG	Morningstar	J.P. Morgan Securities
212.593.7510	312.244.7061	212.834.5086

Thomas Lesnick / Ryan Wineman	Mike Carroll	Thierry Perrein / Jason Jones
Capital One Securities	RBC Capital Markets	Wells Fargo
571.633.8191 / 571.633.8414	440.715.2649	704.715.8455 / 704.715.7932

Michael Bilerman / Emmanuel Korchman	David Rodgers / Richard Schiller
Citigroup Global Markets	RW Baird
212.816.1383 / 212.816.1382	216.737.7341 / 312.609.5485

Barry Oxford	Alexander Goldfarb / Daniel Santos
D.A. Davidson & Co.	Sandler O’Neill & Partners
212.240.9871	212.466.7937 / 212.466.7927

Vincent Chao / Mike Husseini	John Guinee / Erin Aslakson
Deutsche Bank Securities	Stifel, Nicolaus & Company
212.250.6799 / 212.250.7703	443.224.1307 / 443.224.1350

Steve Sakwa / Robert Simone	Michael Lewis
Evercore ISI	SunTrust Robinson Humphrey
212.446.9462 / 212.446.9459	212.319.5659

Brad Burke	Nick Yulico
Goldman Sachs	UBS Securities
917.343.2082	212.713.3402

Jed Reagan / Tyler Grant	Blaine Heck
Green Street Advisors	Wells Fargo Securities
949.640.8780	443.263.6529

Jonathan Petersen / Omotayo Okusanya
Jefferies & Co.
212.284.1705 / 212.336.7076

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 and 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.

LOGO

FOURTH QUARTER 2016

GUIDANCE

The Company’s guidance for the first quarter 2017 and full year 2017 for diluted earnings per common share attributable to Boston Properties, Inc. common shareholders (“EPS”) and diluted funds from operations (“FFO”) per common share attributable to Boston Properties, Inc. common shareholders is set forth and reconciled below. Except as described below, the estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in the earnings release issued on January 31, 2017 and otherwise referenced during the Company’s conference call scheduled for February 1, 2017. The estimates do not include possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions, other possible capital markets activity or possible future impairment charges. EPS estimates may be subject to fluctuations as a result of several factors, including changes in the recognition of depreciation and amortization expense and any gains or losses associated with disposition activity. The Company is not able to assess at this time the potential impact of these factors on projected EPS. By definition, FFO does not include real estate-related depreciation and amortization, impairment losses on depreciable real estate or gains or losses associated with disposition activities. For a complete definition of FFO and statements of the reasons why management believes it provides useful information to investors, see page 48. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth below.


	First Quarter 2017					Full Year 2017
	Low			High		Low			High
Projected EPS (diluted)	$	0.55	—	$	0.57	$	2.56	—	$	2.66
Add:

Projected Company share of real estate depreciation and amortization		0.92	—		0.92		3.57	—		3.57

Less:
Projected Company share of gains on sales of real estate		—	—		—		—	—		—

Projected FFO per share (diluted)	$	1.47	—	$	1.49	$	6.13	—	$	6.23

ASSUMPTIONS

(dollars in thousands)


	Full Year 2017
	Low				High
Operating property activity:
Average In-service portfolio occupancy		90.0	%	—		91.0	%
Increase in BXP’s Share of Combined Same Property net operating income		2.00	%	—		3.50	%
Increase in BXP’s Share of Combined Same Property net operating income - cash basis		1.50	%	—		3.50	%
BXP’s Share of Combined Non Same Properties’ incremental contribution over prior year	$	18,000		—	$	25,000
BXP’s Share of Combined Straight-line rent and fair value lease revenue (non-cash revenue)	$	55,000		—	$	80,000
Hotel net operating income	$	13,000		—	$	15,000
Termination income	$	16,000		—	$	18,000

Other income (expense):
Development and management services income	$	27,000		—	$	33,000
General and administrative expense	$	(115,000	)	—	$	(110,000	)
Net interest expense	$	(391,000	)	—	$	(378,000	)

Noncontrolling interest:
Noncontrolling interest in property partnerships’ share of FFO	$	(110,000	)	—	$	(95,000	)

LOGO

FOURTH QUARTER 2016

FINANCIAL HIGHLIGHTS

(unaudited and in thousands, except ratios and per share amounts)

This section includes non-GAAP financial measures, which are accompanied by what the Company considers the most directly comparable financial measures calculated and presented in accordance with GAAP. Quantitative reconciliations of the differences between the most directly comparable GAAP financial measures and the non-GAAP financial measures presented are shown on pages 11-13. Definitions of these non-GAAP financial measures and statements 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, and, if applicable, the other purposes for which management uses the measures, can be found on pages 47-48.


	Three Months Ended
	31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15
Net income attributable to Boston Properties, Inc. common shareholders	$	145,530		$	76,753		$	96,597		$	181,747		$	137,851
Net income attributable to Boston Properties, Inc. per share - basic	$	0.95		$	0.50		$	0.63		$	1.18		$	0.90
Net income attributable to Boston Properties, Inc. per share - diluted	$	0.94		$	0.50		$	0.63		$	1.18		$	0.90
FFO attributable to Boston Properties, Inc. (1)	$	236,898		$	219,564		$	220,595		$	250,688		$	197,339
FFO per share - diluted (1)	$	1.54		$	1.42		$	1.43		$	1.63		$	1.28
Dividends per common share	$	0.75		$	0.65		$	0.65		$	0.65		$	1.90
Funds available for distribution to common shareholders and common unitholders (FAD) (1) (2)	$	151,183		$	149,725		$	160,948		$	188,204		$	138,872

Ratios:

Interest Coverage Ratio (excluding capitalized interest) (3)		3.86			3.49			3.63			3.79			3.20
Interest Coverage Ratio (including capitalized interest) (3)		3.46			3.17			3.28			3.45			2.95
FFO Payout Ratio (2)		48.70	%		45.77	%		45.45	%		39.88	%		50.78	%
FAD Payout Ratio (2)		85.28	%		74.63	%		69.42	%		59.35	%		80.33	%

Selected Items (4):

Revenue	$	636,061		$	625,228		$	623,546		$	665,985		$	624,240
Partners’ share of revenue from consolidated joint ventures		(69,766	)		(69,391	)		(69,609	)		(73,667	)		(73,697	)
BXP’s share of revenue from unconsolidated joint ventures		24,828			25,271			18,825			18,447			18,672

BXP’s Share of Combined revenue	$	591,123		$	581,108		$	572,762		$	610,765		$	569,215

Straight-line rent (5)	$	14,711		$	11,107		$	(6,503	)	$	14,424		$	19,623
Partners’ share of straight-line rent from consolidated joint ventures		(1,103	)		(707	)		(718	)		(1,696	)		(2,605	)
BXP’s share of straight-line rent from unconsolidated joint ventures		3,696			3,285			1,787			1,064			1,131

BXP’s Share of Combined straight-line rent	$	17,304		$	13,685		$	(5,434	)	$	13,792		$	18,149

Fair value lease revenue (6)	$	6,840		$	6,547		$	8,808		$	8,186		$	7,450
Partners’ share of fair value lease revenue from consolidated joint ventures (6)		(2,194	)		(2,084	)		(3,031	)		(2,810	)		(2,483	)
BXP’s share of fair value lease revenue from unconsolidated joint ventures (6)		494			511			(1	)		(1	)		(1	)

BXP’s Share of Combined fair value lease revenue	$	5,140		$	4,974		$	5,776		$	5,375		$	4,966

Lease termination fees (7)	$	504		$	(170	)	$	7,654		$	51,306		$	7,701
Partners’ share of lease termination fees from consolidated joint ventures		(31	)		421			(44	)		(1,852	)		(2,113	)
BXP’s share of termination income from unconsolidated joint ventures		13			8			4			(9	)		17

BXP’s Share of Combined termination income	$	486		$	259		$	7,614		$	49,445		$	5,605

Fair value interest adjustment	$	10,145		$	10,378		$	11,272		$	12,321		$	13,076
Partners’ share of fair value interest adjustment from consolidated joint ventures		(4,598	)		(4,569	)		(4,540	)		(4,511	)		(4,483	)
BXP’s share of fair value interest adjustment from unconsolidated joint ventures		—			—			—			—			—

BXP’s Share of Combined fair value interest adjustment	$	5,547		$	5,809		$	6,732		$	7,810		$	8,593

Ground rent expense (8)	$	3,460		$	3,471		$	3,469		$	3,471		$	3,463
Losses from early extinguishments of debt	$	—		$	(371	)	$	—		$	—		$	(22,040	)
Capitalized interest	$	10,281		$	9,788		$	9,899		$	9,269		$	8,298
Capitalized wages	$	5,376		$	4,155		$	4,467		$	4,344		$	4,130
Operating margins [(rental revenue - rental expense)/rental revenue]		63.6	%		62.3	%		64.0	%		66.3	%		64.3	%
Income from unconsolidated joint ventures	$	2,585		$	1,464		$	2,234		$	1,791		$	2,211
BXP’s share of funds from operations (FFO) from unconsolidated joint ventures	$	11,277	(9)	$	10,592		$	6,852		$	6,287		$	6,205
Net income attributable to noncontrolling interests in property partnerships	$	(2,121	)	$	(17,225	)	$	6,814		$	10,464		$	10,143
FFO attributable to noncontrolling interests in property partnerships	$	25,135	(10)	$	23,682		$	26,183		$	30,019		$	30,828
Income before gains on sales of real estate	$	163,018		$	58,521		$	117,357		$	148,599		$	85,406

(1)	For the Company’s definitions and related disclosures, see pages 47-48.

(2)

FFO Payout Ratio equals dividends per common share (excluding any special dividends) divided by FFO per share-diluted. For a quantitative reconciliation of FFO, see page 11. FAD Payout Ratio equals distributions to common shareholders and unitholders (excluding any special distributions) divided by FAD. For a quantitative reconciliation of FAD, see page 12.

(3)	For a quantitative reconciliation and related disclosures, see page 13.

(4)	Partners’ share and BXP’s share of line items below are based upon percentage ownership interests in the applicable joint ventures. For additional details, see page 47.

(5)	During the three months ended June 30, 2016, the Company recognized an aggregate of approximately $15.4 million of lump sum rental income amounts from three tenants that will be straight-lined through each tenant’s lease term. These amounts are in addition to the tenants’ monthly rental payments.

(6)	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.

(7)

For the three months ended March 31, 2016, includes approximately $45.0 million received from a tenant that terminated its lease for approximately 85,000 square feet at the Company’s 250 West 55th Street property located in New York City. For the three months ended June 30, 2016, includes a distribution received by the Company from its unsecured creditor claim against Lehman Brothers, Inc. of approximately $1.4 million.

(8)	Includes non-cash straight-line adjustments to ground rent. See page 13 for the straight-line adjustments to the ground rent expense.

(9)	For additional detail, see page 18.

(10)	For additional detail, see page 20.

LOGO

FOURTH QUARTER 2016

FINANCIAL HIGHLIGHTS (continued)

(unaudited and in thousands, except ratios and per share amounts)

This section includes non-GAAP financial measures, which are accompanied by what the Company considers the most directly comparable financial measures calculated and presented in accordance with GAAP. Definitions of these non-GAAP financial measures and statements 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, and, if applicable, the other purposes for which management uses the measures, can be found on pages 47-48.


	31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15
Balance Sheet Items:

Above-market rents (included within Prepaid Expenses and Other Assets)	$	37,079		$	40,346		$	43,780		$	47,388		$	51,397
Below-market rents (included within Other Liabilities)	$	132,495		$	142,595		$	152,576		$	160,504		$	172,670
Accrued ground rent expense, net liability (included within Prepaid Expenses and Other
Assets and Other Liabilities)	$	42,717		$	41,718		$	40,687		$	39,752		$	38,765
Outside members’ notes payable (1)	$	180,000		$	180,000		$	180,000		$	180,000		$	180,000
Accrued interest payable on outside members’ notes payable (included within
Accrued Interest Payable) (1)	$	153,758		$	144,825		$	136,131		$	127,670		$	119,436

Capitalization:

Common Stock Price @ Quarter End	$	125.78		$	136.29		$	131.90		$	127.08		$	127.54
Equity Value @ Quarter End	$	21,805,734		$	23,611,215		$	22,856,727		$	22,027,642		$	22,074,258

Consolidated Debt	$	9,796,133		$	9,808,922		$	9,934,084		$	10,160,366		$	9,188,543
BXP’s share of Unconsolidated Joint Venture Debt (2)		318,193			350,225			350,831			351,394			351,926

Combined Debt (3)(4)		10,114,326			10,159,147			10,284,915			10,511,760			9,540,469
Less:
Partners’ share of Consolidated Debt (5)		1,144,473			1,150,462			1,156,399			1,162,292			1,168,142

BXP’s Share of Combined Debt (3)(4)	$	8,969,853		$	9,008,685		$	9,128,516		$	9,349,468		$	8,372,327

Consolidated Market Capitalization	$	31,601,867		$	33,420,137		$	32,790,811		$	32,188,008		$	31,262,801
Consolidated Debt/Consolidated Market Capitalization (3)		31.00	%		29.35	%		30.30	%		31.57	%		29.39	%
BXP’s Share of Combined Market Capitalization (3)(4)	$	30,775,587	(6)	$	32,619,900		$	31,985,243		$	31,377,110		$	30,446,585
BXP’s Share of Combined Debt/BXP’s Share of Combined Market Capitalization (3)(4)		29.15	%(6)		27.62	%		28.54	%		29.80	%		27.50	%

(1)	Amount is allocated to the Company’s 767 Fifth Avenue (The GM Building) partners through noncontrolling interests in property partnerships.

(2)	Amount is calculated based on the Company’s percentage ownership interest in the unconsolidated joint venture entities. For additional detail, see page 17.

(3)	For the Company’s definitions, see pages 47-48.

(4)	Partners’ share and BXP’s share of line items are based upon percentage ownership interests in the applicable joint ventures. For additional details, see page 47.

(5)	Amount is calculated based on the outside partners’ percentage ownership interest in the consolidated joint venture entities. For additional detail, see page 19.

(6)	For additional detail, see page 14.

LOGO

FOURTH QUARTER 2016

CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)


	31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15
ASSETS
Real estate	$	18,862,648		$	18,704,856		$	18,690,403		$	18,424,542		$	18,465,405
Construction in progress (1)		1,037,959			954,013			865,359			857,578			763,935
Land held for future development (2)		246,656			243,887			241,106			256,952			252,195
Less accumulated depreciation		(4,223,743	)		(4,113,553	)		(4,056,716	)		(3,969,648	)		(3,925,894	)

Total real estate		15,923,520			15,789,203			15,740,152			15,569,424			15,555,641
Cash and cash equivalents		356,914			419,323			1,180,044			1,605,678			723,718
Cash held in escrows		63,174			63,980			65,654			71,349			73,790
Investments in securities		23,814			23,022			21,775			21,077			20,380
Tenant and other receivables, net		92,548			76,258			84,861			73,759			97,865
Accrued rental income, net		799,138			785,569			776,816			767,864			754,883
Deferred charges, net		685,795			680,192			697,823			693,976			704,867
Prepaid expenses and other assets		129,666			176,693			144,222			136,799			185,118
Investments in unconsolidated joint ventures		775,198			775,659			252,618			235,904			235,224

Total assets	$	18,849,767		$	18,789,899		$	18,963,965		$	19,175,830		$	18,351,486

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,063,087		$	2,077,707		$	3,189,013		$	3,416,622		$	3,435,242
Unsecured senior notes, net		7,245,953			7,243,767			6,257,274			6,255,602			5,264,819
Unsecured line of credit		—			—			—			—			—
Mezzanine notes payable		307,093			307,448			307,797			308,142			308,482
Outside members’ notes payable		180,000			180,000			180,000			180,000			180,000
Accounts payable and accrued expenses		298,524			312,979			287,464			252,727			274,709
Dividends and distributions payable		130,308			113,038			113,071			113,079			327,320
Accrued interest payable		243,933			234,628			222,175			221,578			190,386
Other liabilities		450,821			461,079			508,952			498,290			483,601

Total liabilities		10,919,719			10,930,646			11,065,746			11,246,040			10,464,559

Commitments and contingencies		—			—			—			—			—

Equity:
Stockholders’ equity attributable to Boston Properties, Inc.:
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding		—			—			—			—			—
Preferred stock, $0.01 par value, 50,000,000 shares authorized; 5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding		200,000			200,000			200,000			200,000			200,000
Common stock, $0.01 par value, 250,000,000 shares authorized, 153,790,175, 153,773,012, 153,674,930, 153,604,966 and 153,579,966 outstanding, respectively		1,538			1,538			1,537			1,536			1,536
Additional paid-in capital		6,333,427			6,326,580			6,316,191			6,306,723			6,305,687
Dividends in excess of earnings		(695,377	)		(725,522	)		(702,361	)		(699,048	)		(780,952	)
Treasury common stock, at cost		(2,722	)		(2,722	)		(2,722	)		(2,722	)		(2,722	)
Accumulated other comprehensive loss		(52,251	)		(73,943	)		(79,748	)		(56,706	)		(14,114	)

Total stockholders’ equity attributable to Boston Properties, Inc.		5,784,615			5,725,931			5,732,897			5,749,783			5,709,435

Noncontrolling interests:
Common units of the Operating Partnership		614,786			608,280			612,385			616,095			603,092
Property partnerships		1,530,647			1,525,042			1,552,937			1,563,912			1,574,400

Total equity		7,930,048			7,859,253			7,898,219			7,929,790			7,886,927

Total liabilities and equity	$	18,849,767		$	18,789,899		$	18,963,965		$	19,175,830		$	18,351,486

(1)	Represents the portion of the Company’s consolidated development projects that qualifies for interest capitalization. Such portion generally excludes intangible assets.

(2)	Includes land held for future development and pre-development costs.

LOGO

FOURTH QUARTER 2016

CONSOLIDATED INCOME STATEMENTS

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


	Three Months Ended
	31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15
Revenue
Rental
Base rent	$	498,941		$	489,312		$	493,386		$	536,128		$	493,141
Recoveries from tenants		91,123			92,560			85,706			89,586			88,576
Parking and other		25,334			24,638			26,113			24,825			25,132

Total rental revenue		615,398			606,510			605,205			650,539			606,849
Hotel revenue		10,965			12,354			12,808			8,757			10,939
Development and management services		9,698			6,364			5,533			6,689			6,452

Total revenue		636,061			625,228			623,546			665,985			624,240

Expenses
Operating		113,669			117,728			113,212			114,467			112,846
Real estate taxes		108,556			109,480			104,726			104,705			103,796
Demolition costs		1,873			1,352			—			—			—
Hotel operating		7,736			8,118			7,978			7,634			7,888
General and administrative (1)		25,293			25,165			25,418			29,353			24,300
Transaction costs		1,200			249			913			25			470
Impairment loss		—			1,783			—			—			—
Depreciation and amortization		179,908			203,748	(2)		153,175			159,448			164,460

Total expenses		438,235			467,623			405,422			415,632			413,760

Operating income		197,826			157,605			218,124			250,353			210,480
Other income (expense)
Income from unconsolidated joint ventures		2,585			1,464			2,234			1,791			2,211
Gain on sale of investment in uconsolidated joint venture (3)		59,370			—			—			—			—
Interest and other income		573			3,628			1,524			1,505			440
Gains from investments in securities (1)		560			976			478			259			493
Interest expense (4)		(97,896	)		(104,641	)		(105,003	)		(105,309	)		(106,178	)
Losses from early extinguishments of debt		—			(371	)		—			—			(22,040	)
Losses from interest rate contracts		—			(140	)		—			—			—

Income before gains on sales of real estate		163,018			58,521			117,357			148,599			85,406
Gains on sales of real estate (5)		—			12,983			—			67,623			81,332

Net income		163,018			71,504			117,357			216,222			166,738
Net income attributable to noncontrolling interests
Noncontrolling interest in property partnerships		2,121			17,225			(6,814	)		(10,464	)		(10,143	)
Noncontrolling interest - common units of the Operating Partnership (6)		(16,905	)		(9,387	)		(11,357	)		(21,393	)		(16,098	)

Net income attributable to Boston Properties, Inc.		148,234			79,342			99,186			184,365			140,497
Preferred dividends		(2,704	)		(2,589	)		(2,589	)		(2,618	)		(2,646	)

Net income attributable to Boston Properties, Inc. common shareholders	$	145,530		$	76,753		$	96,597		$	181,747		$	137,851

INCOME PER SHARE OF COMMON STOCK (EPS)

Net income attributable to Boston Properties, Inc. per share - basic	$	0.95		$	0.50		$	0.63		$	1.18		$	0.90

Net income attributable to Boston Properties, Inc. per share - diluted	$	0.94		$	0.50		$	0.63		$	1.18		$	0.90

(1)

General and administrative expense includes $(560), $(976), $(478), $(259) and $(493) and gains from investments in securities include $560, $976, $478, $259 and $493 for the three months ended December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015, respectively, related to the Company’s deferred compensation plan.

(2)	For the three months ended September 30, 2016, includes approximately $50.8 million of accelerated depreciation expense related to the redevelopment of the Company’s 601 Lexington Avenue property.

(3)

On October 20, 2016, the Company and its partner in the unconsolidated joint venture that owns Metropolitan Square located in Washington, DC, completed the sale of an 80% interest in the joint venture for a gross sale price of approximately $282.4 million, including the assumption by the buyer of its pro rata share of the mortgage loan collateralized by the property totaling approximately $133.4 million and certain unfunded leasing costs totaling approximately $14.2 million. Net cash proceeds to the Company totaled approximately $58.2 million, resulting in a gain on sale of investment totaling approximately $59.4 million. The Company continues to own a 20% interest in the joint venture.

(4)

For the three months ended December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015, interest expense includes $8,933, $8,694, $8,461, $8,234 and $8,014, respectively, consisting of the interest expense on the partner loans for the 767 Fifth Avenue (The GM Building) consolidated joint venture, which amount is allocated to the partners within noncontrolling interests in property partnerships. The Company’s share of the interest expense on its loan to the joint venture eliminates in consolidation.

(5)	See page 44 for additional information.

(6)

Equals noncontrolling interest - common units of the Operating Partnership’s share of 10.25%, 10.28%, 10.33%, 10.32% and 10.26% of income before net income attributable to noncontrolling interests in Operating Partnership after deduction for preferred distributions for the three months ended December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015, respectively.

LOGO

FOURTH QUARTER 2016

FUNDS FROM OPERATIONS (FFO)

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


	Three Months Ended
	31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15
Net income attributable to Boston Properties, Inc. common shareholders	$	145,530		$	76,753		$	96,597		$	181,747		$	137,851
Add:
Preferred dividends		2,704			2,589			2,589			2,618			2,646
Noncontrolling interest - common units of the Operating Partnership		16,905			9,387			11,357			21,393			16,098
Noncontrolling interests in property partnerships		(2,121	)		(17,225	)		6,814			10,464			10,143
Less:
Gains on sales of real estate		—			12,983			—			67,623			81,332

Income before gains on sales of real estate		163,018			58,521			117,357			148,599			85,406
Add:
Depreciation and amortization		179,908			203,748			153,175			159,448			164,460
Noncontrolling interests in property partnerships’ share of depreciation and amortization		(27,256	)		(40,907	)		(19,369	)		(19,555	)		(20,685	)
BXP’s share of depreciation and amortization from unconsolidated joint ventures		8,692			9,128			4,618			4,496			3,994
Corporate-related depreciation and amortization		(449	)		(393	)		(362	)		(364	)		(486	)
Less:
Gain on sale of investment in uconsolidated joint venture		59,370			—			—			—			—
Noncontrolling interests in property partnerships		(2,121	)		(17,225	)		6,814			10,464			10,143
Preferred dividends		2,704			2,589			2,589			2,618			2,646

FFO attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) (“Basic FFO”)		263,960			244,733			246,016			279,542			219,900
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of FFO		27,062			25,169			25,421			28,854			22,561

FFO attributable to Boston Properties, Inc. common shareholders	$	236,898		$	219,564		$	220,595		$	250,688		$	197,339

Boston Properties, Inc.’s percentage share of FFO - basic		89.75	%		89.72	%		89.67	%		89.68	%		89.74	%

FFO per share - basic	$	1.54		$	1.43		$	1.44		$	1.63		$	1.28

Weighted average shares outstanding - basic		153,814			153,754			153,662			153,626			153,602

FFO per share - diluted	$	1.54		$	1.42		$	1.43		$	1.63		$	1.28

Weighted average shares outstanding - diluted		153,991			154,136			153,860			153,917			153,897

Reconciliation to Diluted FFO:

Basic FFO	$	263,960		$	244,733		$	246,016		$	279,542		$	219,900
Add:
Effect of dilutive securities - stock-based compensation		—			—			—			—			—

Diluted FFO		263,960			244,733			246,016			279,542			219,900

Less:
Noncontrolling interest - common units of the Operating Partnership’s share of diluted FFO		27,034			25,113			25,391			28,805			22,522

Boston Properties, Inc.’s share of diluted FFO	$	236,926		$	219,620		$	220,625		$	250,737		$	197,378

Reconciliation of Shares/Units for Diluted FFO:

Shares/units for Basic FFO		171,385			171,379			171,370			171,309			171,162
Add:
Effect of dilutive securities - stock-based compensation (shares/units)		177			382			198			291			295

Shares/units for Diluted FFO		171,562			171,761			171,568			171,600			171,457

Less:
Noncontrolling interest - common units of the Operating Partnership’s share of diluted FFO (shares/units)		17,571			17,625			17,708			17,683			17,560

Boston Properties, Inc.’s share of shares/units for diluted FFO		153,991			154,136			153,860			153,917			153,897

Boston Properties, Inc.’s percentage share of FFO - diluted		89.76	%		89.74	%		89.68	%		89.70	%		89.76	%

LOGO

FOURTH QUARTER 2016

FUNDS AVAILABLE FOR DISTRIBUTION (FAD)

(in thousands, except for ratio amounts)


	Three Months Ended
	31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15
Net income attributable to Boston Properties, Inc. common shareholders	$	145,530		$	76,753		$	96,597		$	181,747		$	137,851
Add:
Preferred dividends		2,704			2,589			2,589			2,618			2,646
Noncontrolling interest - common units of the Operating Partnership		16,905			9,387			11,357			21,393			16,098
Noncontrolling interests in property partnerships		(2,121	)		(17,225	)		6,814			10,464			10,143
Less:
Gains on sales of real estate		—			12,983			—			67,623			81,332

Income before gains on sales of real estate		163,018			58,521			117,357			148,599			85,406
Add:
Depreciation and amortization		179,908			203,748			153,175			159,448			164,460
Noncontrolling interests in property partnerships’ share of depreciation and amortization		(27,256	)		(40,907	)		(19,369	)		(19,555	)		(20,685	)
BXP’s share of depreciation and amortization from unconsolidated joint ventures		8,692			9,128			4,618			4,496			3,994
Corporate-related depreciation and amortization		(449	)		(393	)		(362	)		(364	)		(486	)
Less:
Gain on sale of investment in uconsolidated joint venture		59,370			—			—			—			—
Noncontrolling interests in property partnerships		(2,121	)		(17,225	)		6,814			10,464			10,143
Preferred dividends		2,704			2,589			2,589			2,618			2,646

Basic FFO		263,960			244,733			246,016			279,542			219,900

Straight-line rent (1)		(14,711	)		(11,107	)		6,503			(14,424	)		(19,623	)
Partners’ share of straight-line rent from consolidated joint ventures		1,103			707			718			1,696			2,605
BXP’s share of straight-line rent from unconsolidated joint ventures		(3,696	)		(3,285	)		(1,787	)		(1,064	)		(1,131	)
Lease transaction costs that qualify as rent inducements (2)		487			861			2,200			5,305			1,939
Partners’ share of lease transaction costs that qualify as rent inducements from consolidated joint ventures (2)		—			—			—			(17	)		(18	)
BXP’s share of lease transaction costs that qualify as rent inducements from unconsolidated joint ventures (2)		43			15			—			—			24
Fair value lease revenue (3)		(6,840	)		(6,547	)		(8,808	)		(8,186	)		(7,450	)
Partners’ share of fair value lease revenue from consolidated joint ventures (3)		2,194			2,084			3,031			2,810			2,483
BXP’s share of fair value lease revenue from unconsolidated joint ventures (3)		(494	)		(511	)		1			1			1
Non-cash losses (gains) from early extinguishments of debt		—			371			—			—			(3,604	)
Non-cash termination income adjustment (fair value lease amounts)		7			—			141			29			3
Partners’ share of non-cash termination income adjustment (fair value lease amounts) from consolidated joint ventures		(3	)		—			(41	)		—			—
BXP’s share of non-cash termination income adjustment (fair value lease amounts) from unconsolidated joint ventures		—			—			—			—			—
Straight-line ground rent expense adjustment (4)		998			1,031			935			987			(3,983	)
Stock-based compensation		7,621			7,643			7,578			10,069			6,358
Non-real estate depreciation		449			393			362			364			486
Impairment loss		—			1,783			—			—			—
Fair value interest adjustment		(10,145	)		(10,378	)		(11,272	)		(12,321	)		(13,076	)
Partners’ share of fair value interest adjustment from consolidated joint ventures		4,598			4,569			4,540			4,511			4,483
BXP’s share of fair value interest adjustment from unconsolidated joint ventures		—			—			—			—			—
2nd generation tenant improvements and leasing commissions		(75,708	)		(69,742	)		(74,719	)		(58,100	)		(34,206	)
Partners’ share of 2nd generation tenant improvements and leasing commissions from consolidated joint ventures		449			805			1,247			2,525			2,075
BXP’s share of 2nd generation tenant improvements and leasing commissions from unconsolidated joint ventures		(1,472	)		(18	)		(8,616	)		(4,769	)		(207	)
Unearned portion of capitalized fees from consolidated joint ventures		1,787			250			2,697			1,191			451
Maintenance capital expenditures (5)		(16,334	)		(11,889	)		(9,654	)		(21,961	)		(18,963	)
Partners’ share of maintenance capital expenditures from consolidated joint ventures (5)		1,197			377			422			573			2,134
BXP’s share of maintenance capital expenditures from unconsolidated joint ventures (5)		(437	)		(283	)		(112	)		(197	)		(578	)
Hotel improvements, equipment upgrades and replacements		(3,870	)		(2,137	)		(434	)		(360	)		(1,231	)

Funds available for distribution to common shareholders and common unitholders (FAD) (A)	$	151,183		$	149,725		$	160,948		$	188,204		$	138,872

Distributions to common shareholders and unitholders (excluding any special distributions) (B)	$	128,930		$	111,739		$	111,737		$	111,708		$	111,556

FAD Payout Ratio (B÷A)		85.28	%		74.63	%		69.42	%		59.35	%		80.33	%

(1)	During the three months ended June 30, 2016, the Company recognized an aggregate of approximately $15.4 million of lump sum rental income amounts from three tenants that will be straight-lined through each tenant’s lease term. These amounts are in addition to the tenants’ monthly rental payments.

(2)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the period the lease commences.

(3)	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.

(4)

Includes the straight-line impact of the Company’s 99-year ground and air rights lease related to the Company’s 200 Clarendon Street property’s adjacent 100 Clarendon Street garage and Back Bay Station concourse level. The Company has allocated contractual ground lease payments aggregating approximately $34.4 million, which it expects to incur over the next three years with no payments thereafter. The Company is recognizing these amounts on a straight-line basis over the 99-year term of the ground and air rights lease. For additional information, see page 7.

(5)	Maintenance capital expenditures do not include planned capital expenditures related to acquisitions and repositioning capital expenditures – see page 25 for additional detail.

LOGO

FOURTH QUARTER 2016

INTEREST COVERAGE RATIOS

(in thousands, except for ratio amounts)


	Three Months Ended
	31-Dec-16			30-Sep-16			30-Jun-16			31-Mar-16			31-Dec-15
Net income attributable to Boston Properties, Inc. common shareholders	$	145,530		$	76,753		$	96,597		$	181,747		$	137,851
Add:
Preferred dividends		2,704			2,589			2,589			2,618			2,646
Noncontrolling interest - common units of the Operating Partnership		16,905			9,387			11,357			21,393			16,098
Noncontrolling interests in property partnerships		(2,121	)		(17,225	)		6,814			10,464			10,143
Less:
Gains on sales of real estate		—			12,983			—			67,623			81,332

Income before gains on sales of real estate		163,018			58,521			117,357			148,599			85,406
Noncontrolling interests in property partnerships		2,121			17,225			(6,814	)		(10,464	)		(10,143	)
Interest expense		97,896			104,641			105,003			105,309			106,178
Partners’ share of interest expense from consolidated joint ventures		(17,579	)		(17,460	)		(17,177	)		(16,988	)		(16,928	)
BXP’s share of interest expense from unconsolidated joint ventures		3,654			4,025			4,010			4,015			3,908
Depreciation and amortization expense		179,908			203,748			153,175			159,448			164,460
Noncontrolling interests in property partnerships’ share of depreciation and amortization		(27,256	)		(40,907	)		(19,369	)		(19,555	)		(20,685	)
BXP’s share of depreciation and amortization from unconsolidated joint ventures		8,692			9,128			4,618			4,496			3,994
Gain on sale of investment in unconsolidated joint venture		(59,370	)		—			—			—			—
Losses from early extinguishments of debt		—			371			—			—			22,040
Impairment loss		—			1,783			—			—			—
Non-cash termination income adjustment (fair value lease amounts)		7			—			141			29			3
Partners’ share of non-cash termination income adjustment (fair value lease amounts) from consolidated joint ventures		(3	)		—			(41	)		—			—
BXP’s share of non-cash termination income adjustment (fair value lease amounts) from unconsolidated joint ventures		—			—			—			—			—
Stock-based compensation		7,621			7,643			7,578			10,069			6,358
Straight-line ground rent expense adjustment (1)		998			1,031			935			987			(3,983	)
Straight-line rent (2)		(14,711	)		(11,107	)		6,503			(14,424	)		(19,623	)
Partners’ share of straight-line rent from consolidated joint ventures		1,103			707			718			1,696			2,605
BXP’s share of straight-line rent from unconsolidated joint ventures		(3,696	)		(3,285	)		(1,787	)		(1,064	)		(1,131	)
Lease transaction costs that qualify as rent inducements (3)		487			861			2,200			5,305			1,939
Partners’ share of lease transaction costs that qualify as rent inducements from consolidated joint ventures (3)		—			—			—			(17	)		(18	)
BXP’s share of lease transaction costs that qualify as rent inducements from unconsolidated joint ventures (3)		43			15			—			—			24
Fair value lease revenue (4)		(6,840	)		(6,547	)		(8,808	)		(8,186	)		(7,450	)
Partners’ share of fair value lease revenue from consolidated joint ventures (4)		2,194			2,084			3,031			2,810			2,483
BXP’s share of fair value lease revenue from unconsolidated joint ventures (4)		(494	)		(511	)		1			1			1

Subtotal (A)	$	337,793		$	331,966		$	351,274		$	372,066		$	319,438

Divided by:

Interest expense	$	97,896		$	104,641		$	105,003		$	105,309		$	106,178
Partners’ share of interest expense from consolidated joint ventures		(17,579	)		(17,460	)		(17,177	)		(16,988	)		(16,928	)
BXP’s share of interest expense from unconsolidated joint ventures		3,654			4,025			4,010			4,015			3,908
Fair value interest adjustment		10,145			10,378			11,272			12,321			13,076
Partners’ share of fair value interest adjustment from consolidated joint ventures		(4,598	)		(4,569	)		(4,540	)		(4,511	)		(4,483	)
BXP’s share of fair value interest adjustment from unconsolidated joint ventures		—			—			—			—			—
Amortization of financing costs		(1,964	)		(1,889	)		(1,704	)		(1,829	)		(1,921	)
Partners’ share of amortization of financing costs from consolidated joint ventures		39			38			38			38			39
BXP’s share of amortization of financing costs from unconsolidated joint ventures		(100	)		(113	)		(112	)		(120	)		(113	)

Adjusted interest expense excluding capitalized interest (B)		87,493			95,051			96,790			98,235			99,756

Capitalized interest		10,281			9,788			10,222			9,525			8,380
Partners’ share of capitalized interest from consolidated joint ventures		(203	)		(21	)		—			—			—
BXP’s share of capitalized interest from unconsolidated joint ventures		—			—			—			—			50

Adjusted interest expense including capitalized interest (C)	$	97,571		$	104,818		$	107,012		$	107,760		$	108,186

Interest Coverage Ratio (excluding capitalized interest) (A ÷ B) (5)		3.86			3.49			3.63			3.79			3.20

Interest Coverage Ratio (including capitalized interest) (A ÷ C) (5)		3.46			3.17			3.28			3.45			2.95

(1)

Includes the straight-line impact of the Company’s 99-year ground and air rights lease related to the 100 Clarendon Street garage and Back Bay Station concourse level, which are adjacent to the Company’s 200 Clarendon Street property. The Company has allocated contractual ground lease payments aggregating approximately $34.4 million, which it expects to incur over the next three years with no payments thereafter. The Company is recognizing these amounts on a straight-line basis over the 99-year term of the ground and air rights lease. For additional information, see page 7.

(2)	During the three months ended June 30, 2016, the Company recognized an aggregate of approximately $15.4 million of lump sum rental income amounts from three tenants that will be straight-lined through each tenant’s lease term. These amounts are in addition to the tenants’ monthly rental payments.

(3)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions.

(4)	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.

(5)

The Company believes that the presentation of its Interest Coverage Ratio provides investors with useful information about the Company’s financial condition because it measures the margin it has for paying interest expense as of a certain date. In addition, by analyzing interest coverage ratios over a period of time, trends may emerge that provide investors a better sense of whether a company’s financial condition is improving or worsening. The ratios may also be used to compare the ability of different companies to meet their interest expense obligations, which can help when making an investment decision. The Company presents its Interest Coverage Ratio in two ways - including capitalized interest and excluding capitalized interest. GAAP requires the capitalization of interest expense during development. Therefore, for a company like Boston Properties, Inc. that is an active developer of real estate, presenting the Interest Coverage Ratio (excluding capitalized interest) provides an alternative measure of financial condition that may be more indicative of the Company’s ability to meet its interest expense obligations.

LOGO

FOURTH QUARTER 2016

CAPITAL STRUCTURE

(in thousands, except percentages)

Consolidated Debt


	Aggregate Principal
	December 31, 2016
Mortgage Notes Payable	$	2,031,615
Mezzanine Notes Payable		306,000
Unsecured Line of Credit		—
Unsecured Senior Notes, at face value		7,300,000
Outside Members’ Notes Payable		180,000

Subtotal		9,817,615
Fair Value Interest Adjustment on Mortgage Notes Payable		33,830
Fair Value Interest Adjustment on Mezzanine Notes Payable		1,093
Discount on Unsecured Senior Notes		(18,783	)
Deferred Financing Costs, Net		(37,622	)

Consolidated Debt	$	9,796,133

Boston Properties Limited Partnership Unsecured Senior Notes (1)


Settlement Date	Maturity Date		Principal		Yield (on issue date)			Coupon			Public Offering Price			Discount		Deferred Financing Costs, Net		Unsecured Senior Notes, net
8/17/2016		10/1/2026	$	1,000,000		3.495	%(2)		2.750	%		99.271	%	$	7,084	$	7,894	$	985,022
1/20/2016		2/1/2026		1,000,000		3.766	%		3.650	%		99.708	%		2,694		7,398		989,908
6/27/2013		2/1/2024		700,000		3.916	%		3.800	%		99.694	%		1,507		3,983		694,510
4/11/2013		9/1/2023		500,000		3.279	%		3.125	%		99.379	%		2,114		2,681		495,205
6/11/2012		2/1/2023		1,000,000		3.954	%		3.850	%		99.779	%		1,361		4,755		993,884
11/10/2011		11/15/2018		850,000		3.853	%		3.700	%		99.767	%		577		1,848		847,575
11/18/2010		5/15/2021		850,000		4.289	%		4.125	%		99.260	%		2,951		2,950		844,099
4/19/2010		11/15/2020		700,000		5.708	%		5.625	%		99.891	%		329		2,174		697,497
10/9/2009		10/15/2019		700,000		5.967	%		5.875	%		99.931	%		166		1,581		698,253

			$	7,300,000										$	18,783	$	35,264	$	7,245,953

Equity


	Shares/Units
	Outstanding		Common Stock			Equivalent
	as of 12/31/2016		Equivalents			Value (3)
Common Stock		153,790		153,790	(4)	$	19,343,706
Common Operating Partnership Units		17,984		17,984	(5)		2,262,028
5.25% Series B Cumulative Redeemable Preferred Stock		80		—			200,000	(6)

Total Equity				171,774		$	21,805,734

Consolidated Debt						$	9,796,133
Add:
BXP’s share of unconsolidated joint venture debt (7)							318,193

Combined Debt (8)							10,114,326
Less:
Partners’ share of consolidated debt (9)							1,144,473

BXP’s Share of Combined Debt (8)						$	8,969,853

Consolidated Market Capitalization						$	31,601,867

BXP’s Share of Combined Market Capitalization (8)						$	30,775,587

(1)	All unsecured senior notes are rated A- (stable), BBB+ (stable) and Baa2 (positive) by S&P, Fitch and Moody’s, respectively.

(2)	Includes the impact of the cash settlement of certain forward-starting interest rate swap contracts that fixed the 10-year swap rate at a weighted-average rate of approximately 2.423% per annum on notional amounts aggregating $550.0 million.

(3)	Values based on December 31, 2016 closing price of $125.78 per share of common stock, except the shares of Series B Cumulative Redeemable Preferred Stock have been valued at the liquidation preference of $2,500.00 per share (see Note 6 below).

(4)	Includes 59,777 shares of restricted stock.

(5)

Includes 904,588 long-term incentive plan units (including 166,629 Outperformance Plan Units and 93,928 2013 MYLTIP Units), but excludes an aggregate of 1,314,993 2014, 2015 and 2016 MYLTIP Units because the performance periods for these MYLTIP Units have not ended and therefore none of such units have been earned.

(6)

On or after March 27, 2018, the Company, at its option, may redeem the Series B Preferred Stock for a cash redemption price of $2,500.00 per share ($25.00 per depositary share), plus all accrued and unpaid dividends. The Series B Preferred Stock is not redeemable by the holders, has no maturity date and is not convertible into or exchangeable for any other security of the Company or any of its affiliates.

(7)	Amount is calculated based on the Company’s percentage ownership interest in the unconsolidated joint venture entities. For additional detail, see page 17.

(8)	For the Company’s definitions, see pages 47-48.

(9)	Amount is calculated based on the outside partners’ percentage ownership interest in the consolidated joint venture entities. For additional detail, see page 19.

LOGO

FOURTH QUARTER 2016

DEBT ANALYSIS (1)

as of December 31, 2016

(dollars in thousands)

Debt Maturities and Principal Payments


	2017			2018			2019			2020			2021			Thereafter			Total
Floating Rate Debt:
Mortgage Notes Payable	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Unsecured Line of Credit		—			—			—			—			—			—			—

Total Floating Rate Debt	$	—		$	—		$	—		$	—		$	—		$	—		$	—

Fixed Rate Debt:
767 Fifth Avenue (The GM Building) (60% ownership)	$	1,300,000		$	—		$	—		$	—		$	—		$	—		$	1,300,000	(2)
601 Lexington Avenue (55% ownership)		13,051			13,684			14,349			15,045			15,776			614,710			686,615
New Dominion Technology Park, Building One		2,878			3,100			3,340			3,598			22,906			—			35,822
University Place		1,725			1,849			1,981			2,123			1,500			—			9,178

Mortgage Notes Payable		1,317,654			18,633			19,670			20,766			40,182			614,710			2,031,615

Fair Value Interest Adjustment		33,830			—			—			—			—			—			33,830
Deferred Financing Costs, Net		(637	)		(431	)		(431	)		(431	)		(342	)		(86	)		(2,358	)

Mortgage Notes Payable, Net	$	1,350,847		$	18,202		$	19,239		$	20,335		$	39,840		$	614,624		$	2,063,087

Mezzanine Notes Payable	$	306,000		$	—		$	—		$	—		$	—		$	—		$	306,000
Fair Value Interest Adjustment		1,093			—			—			—			—			—			1,093

Mezzanine Notes Payable	$	307,093		$	—		$	—		$	—		$	—		$	—		$	307,093

Unsecured Senior Notes, Face Amount	$	—		$	850,000		$	700,000		$	700,000		$	850,000		$	4,200,000		$	7,300,000
Discount Amortization		(2,643	)		(2,696	)		(2,503	)		(2,528	)		(2,063	)		(6,350	)		(18,783	)
Deferred Financing Costs, Net		(6,187	)		(6,019	)		(5,036	)		(4,510	)		(3,648	)		(9,864	)		(35,264	)

Unsecured Senior Notes, Net	$	(8,830	)	$	841,285		$	692,461		$	692,962		$	844,289		$	4,183,786		$	7,245,953

Outside Members’ Notes Payable	$	180,000		$	—		$	—		$	—		$	—		$	—		$	180,000

Total Fixed Rate Debt	$	1,829,110		$	859,487		$	711,700		$	713,297		$	884,129		$	4,798,410		$	9,796,133

Consolidated Debt	$	1,829,110		$	859,487		$	711,700		$	713,297		$	884,129		$	4,798,410		$	9,796,133

% of Consolidated Debt		18.67	%		8.77	%		7.27	%		7.28	%		9.03	%		48.98	%		100.00	%

Balloon Payments	$	1,786,000		$	850,000		$	700,000		$	700,000		$	872,906		$	4,810,648		$	9,719,554
Scheduled Principal Amortization	$	17,654		$	18,633		$	19,670		$	20,766		$	17,276		$	4,062		$	98,061

GAAP Weighted Average Floating Rate Debt (3) (4)		—			—			—			—			—			—			—

GAAP Weighted Average Fixed Rate Debt (3) (4)		3.04	%		3.89	%		5.96	%		5.70	%		4.39	%		3.85	%		4.06	%

Total GAAP Weighted Average Rate (3) (4)		3.04	%		3.89	%		5.96	%		5.70	%		4.39	%		3.85	%		4.06	%

Total Stated Weighted Average Rate (4)		5.96	%		3.77	%		5.87	%		5.63	%		4.32	%		3.78	%		4.50	%

Unsecured Line of Credit - Matures July 26, 2018


	Outstanding		Letters of		Remaining Capacity
Facility	at 12/31/2016		Credit		at 12/31/2016
$1,000,000	$	—	$	6,040	$	993,960

Unsecured and Secured Debt Analysis (4)


				Stated Weighted			GAAP Weighted			Weighted Average
	% of Total Debt			Average Rate			Average Rate			Maturity (years)
Unsecured Debt		75.35	%		4.12	%		4.21	%		5.9
Secured Debt		24.65	%		5.64	%		3.62	%		2.1

Consolidated Debt		100.00	%		4.50	%		4.06	%		5.0

Floating and Fixed Rate Debt Analysis (4)


				Stated Weighted			GAAP Weighted			Weighted Average
	% of Total Debt			Average Rate			Average Rate			Maturity (years)
Floating Rate Debt		—			—			—			—
Fixed Rate Debt		100.00	%		4.50	%		4.06	%		5.0

Consolidated Debt		100.00	%		4.50	%		4.06	%		5.0

Interest Rate Hedging Instruments

Weighted-Average

Notional Amount

10-Year Swap Rate

Effective Date

Termination Date

Forward-starting interest rate swaps (5)

450,000

2.619

June 1, 2017

June 1, 2027

(1)	Excludes unconsolidated joint ventures. For information on BXP’s unconsolidated joint venture debt, see page 17.

(2)	This property has a fair value interest adjustment that is shown on the Fair Value Interest Adjustment line.

(3)	The GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges, effects of hedging transactions and adjustments required to reflect loans at their fair values upon acquisition or consolidation.

(4)	Percentage of total debt, weighted average rates and weighted average maturities exclude the Outside Members’ Notes Payable because they are allocated to the Company’s partners through noncontrolling interests in property partnerships.

(5)	Represents forward interest rate swap contracts entered into by the Company’s 767 Fifth Partners LLC consolidated entity (the entity in which the Company has a 60% interest and that owns 767 Fifth Avenue (the GM Building) in New York City).

LOGO

FOURTH QUARTER 2016

SENIOR UNSECURED DEBT COVENANT COMPLIANCE RATIOS

(dollars in thousands)

In the fourth quarter of 2002, the Company’s Operating Partnership (Boston Properties Limited 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 Mellon Trust Company, N.A., as trustee, as supplemented from time to time (the “Indenture”), 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 December 31, 2016 to show that the Company’s Operating Partnership was in compliance with the terms of the Indenture, 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. This section also presents certain other indenture-related data that we believe assists investors in evaluating the Company’s unsecured debt securities.


			Senior Notes Issued Prior to October 9, 2009			Senior Notes Issued On or After October 9, 2009
			December 31, 2016
Total Assets:
Capitalized Property Value (1)			$	23,161,068		$	23,633,989
Cash and Cash Equivalents				356,914			356,914
Investments in Securities				23,814			23,814
Undeveloped Land, at Cost (including Joint Venture %)				292,661			292,661
Development in Process, at Cost (including Joint Venture %)				1,244,322			1,244,322

Total Assets			$	25,078,779		$	25,551,700

Unencumbered Assets			$	19,731,476		$	20,186,007

Consolidated Secured Debt (Fixed and Variable) (2)			$	2,059,507		$	2,059,507
Mezzanine Notes Payable (3)				306,000			306,000
Unconsolidated Joint Venture Debt (4)				319,475			319,475
Outside Members’ Notes Payable				180,000			180,000
Contingent Liabilities & Letters of Credit				12,266			12,266
Unsecured Debt (5)				7,300,000			7,300,000

Total Outstanding Debt			$	10,177,248		$	10,177,248

Consolidated EBITDA:
Income before Gains on Sales of Real Estate (per Consolidated Income Statement)			$	163,018		$	163,018
Subtract: Income from Unconsolidated Joint Ventures (per Consolidated Income Statement)				(2,585	)		(2,585	)
Subtract: Gain on Sale of Investment in Unconsolidated Joint Ventures (per Consolidated Income Statement)				(59,370	)		(59,370	)
Subtract: Gains from Investments in Securities (per Consolidated Income Statement)				(560	)		(560	)
Add: Interest Expense (per Consolidated Income Statement)				97,896			97,896
Add: Depreciation and Amortization (per Consolidated Income Statement)				179,908			179,908

EBITDA				378,307			378,307
Add: BXP’s share of unconsolidated joint venture EBITDA				14,315			14,315

Consolidated EBITDA			$	392,622		$	392,622

Adjusted Interest Expense:
Interest Expense (per Consolidated Income Statement)			$	97,896		$	97,896
Add: BXP’s share of unconsolidated joint venture interest expense				3,495			3,495
Less: Amortization of financing costs (including BXP’s share of unconsolidated joint ventures)				(2,064	)		(2,064	)
Less: Interest expense funded by construction loan draws				(57	)		(57	)

Adjusted Interest Expense			$	99,270		$	99,270


	Test		Actual			Actual
Covenant Ratios and Related Data
Total Outstanding Debt/Total Assets		Less than 60%		40.6	%		39.8	%
Secured Debt/Total Assets		Less than 50%		10.7	%		10.5	%
Interest Coverage (Annualized Consolidated EBITDA to
Annualized Interest Expense)		Greater than 1.50x		3.96			3.96
Unencumbered Assets/ Unsecured Debt		Greater than 150%		270.3	%		276.5	%

Unencumbered Consolidated Property EBITDA (6)			$	331,361		$	331,361

Unencumbered Interest Coverage (Unencumbered Consolidated Property EBITDA to Unsecured

Interest Expense)				4.48			4.48

% of Unencumbered Consolidated Property EBITDA to Consolidated EBITDA				84.4	%		84.4	%

# of in-service unencumbered properties				152			152

(1)

For senior notes issued prior to October 9, 2009, Capitalized Property Value is determined for each property and is the greater of (A) annualized EBITDA capitalized at an 8.5% rate for CBD properties and a 9.0% rate for non-CBD properties, and (B) the undepreciated book value as determined under GAAP. Capitalized Property Value for senior notes issued on or after October 9, 2009 is determined for each property and is the greater of (A) annualized EBITDA capitalized at an 8.0% rate for CBD properties and a 9.0% rate for non-CBD properties, and (B) the undepreciated book value as determined under GAAP.

(2)	Includes capital lease obligations of $27,892 and excludes aggregate fair value interest adjustment of $33,830 and deferred financing costs, net of $2,358.

(3)	Excludes aggregate fair value interest adjustment of $1,093.

(4)	Excludes aggregate deferred financing costs, net of $1,282.

(5)	Excludes aggregate debt discount of $18,783 and deferred financing costs, net of $35,264.

(6)

Unencumbered Consolidated Property EBITDA is a non-GAAP financial measure equal to Consolidated EBITDA excluding corporate revenue and expenses, encumbered consolidated Property EBITDA, EBITDA from land and properties that have either been disposed of or not fully placed in-service and items that, in the Company’s view, are not representative of a property’s standard ongoing performance, such as termination income and other similar items. For the three months ended December 31, 2016, these excluded amounts were approximately $(15,644), $76,406, $(271) and $770, respectively.

LOGO

FOURTH QUARTER 2016

UNCONSOLIDATED JOINT VENTURES (1)

as of December 31, 2016

(dollars in thousands)

Balance Sheet Information


Property	BXP’s Nominal Ownership			Net Equity			Mortgage/ Construction Loans Payable, Net
540 Madison Avenue		60.00	%	$	67,816		$	71,827
Market Square North		50.00	%		(8,134	)		61,552
Metropolitan Square		20.00	%		2,004			33,192
901 New York Avenue		25.00	%		(10,564	)		55,893
Wisconsin Place Parking Facility		33.33	%		41,605			—
Annapolis Junction (2)		50.00	%		20,539			44,313
500 North Capitol Street, N.W.		30.00	%		(3,389	)		31,386
Colorado Center		49.80	%		510,623			—
The Hub on Causeway - Podium		50.00	%		29,869			—
The Hub on Causeway - Hotel (3)		50.00	%		933			—
The Hub on Causeway - Residential (3)		50.00	%		20,803			—
1001 6th Street		50.00	%		42,528			—
Dock 72		50.00	%		33,699			—
1265 Main Street		50.00	%		4,779			20,030

					753,111
Investments with deficit balances reflected within Other Liabilities					22,087

Investment in Joint Ventures				$	775,198		$	318,193

Debt Maturities and Principal Payments by Property


Property	2017			2018			2019			2020			2021			Thereafter			Total
540 Madison Avenue (60%)	$	—		$	72,000		$	—		$	—		$	—		$	—		$	72,000
Market Square North (50%)		1,148			1,205			1,265			58,091			—			—			61,709
901 New York Avenue (25%)		—			—			—			955			1,042			54,253			56,250
Metropolitan Square (20%)		553			586			620			31,501						—			33,260
500 North Capitol Street, N.W. (30%)		—			—			—			—			—			31,500			31,500
1265 Main Street (50%)		339			383			398			413			429			18,238			20,200	(4)
Annapolis Junction Building One (50%)		279			19,519			—			—			—			—			19,798	(5)
Annapolis Junction Buildings Seven & Eight (50%)		299			326			17,723			—			—			—			18,348	(6)
Annapolis Junction Building Six (50%)					6,410			—			—			—			—			6,410	(7)
Dock 72 (50%)		—			—			—			—			—			—			—	(8)

		2,618			100,429			20,006			90,960			1,471			103,991			319,475

Deferred Financing Costs, Net		(375	)		(265	)		(183	)		(112	)		(74	)		(273	)		(1,282	)

Mortgage/Construction Loans Payable, Net	$	2,243		$	100,164		$	19,823		$	90,848		$	1,397		$	103,718		$	318,193

GAAP Weighted Average Rate		3.50	%		3.14	%		3.37	%		5.17	%		1.68	%		3.08	%		3.78	%

% of Total Mortgage/Construction Loans Payable, Net		0.70	%		31.48	%		6.23	%		28.55	%		0.44	%		32.60	%		100.00	%

Balloon Payments	$	—		$	97,882		$	17,397		$	88,387		$	—		$	95,505		$	299,171
Scheduled Amortization	$	2,618		$	2,547		$	2,609		$	2,573		$	1,471		$	8,486		$	20,304

Floating and Fixed Rate Debt Analysis


	% of Total Debt			Stated Weighted Average Rate			GAAP Weighted Average Rate			Weighted Average Maturity (years)
Floating Rate Debt		36.50	%		2.99	%		3.17	%		1.7
Fixed Rate Debt		63.50	%		4.44	%		4.50	%		6.4

Total Debt		100.00	%		3.91	%		4.02	%		4.7

(1)	Amounts represent the Company’s share based on its ownership percentage.

(2)	Annapolis Junction includes four in-service properties and two undeveloped land parcels.

(3)	Refer to page 44, Acquisitions footnote 3.

(4)	On December 8, 2016, the joint venture obtained mortgage financing totaling $40.4 million collateralized by the property.

(5)

On April 11, 2016, a notice of event of default was received from the lender because the loan to value ratio is not in compliance with the applicable covenant in the loan agreement. On October 17, 2016, the lender notified the joint venture that it has elected to charge the default rate on the loan. The default rate is defined as LIBOR plus 5.75% per annum. The loan has one, three-year extension option, subject to certain conditions including that no event of default exists or is ongoing.

(6)	On December 7, 2016, the joint ventures combined and extended mortgage loans collateralized by Annapolis Junction Building Seven and Building Eight, respectively.

(7)	On November 15, 2016, the joint venture extended the loan collateralized by its Annapolis Junction Building Six property.

(8)	On December 19, 2016, the joint venture obtained construction financing with a total commitment of $250.0 million collateralized by its Dock 72 development project.

LOGO

FOURTH QUARTER 2016

UNCONSOLIDATED JOINT VENTURES (continued)

(unaudited and dollars in thousands)

Results of Operations

for the three months ended December 31, 2016


	540 Madison			Market Square			Metropolitan			901 New York			Wisconsin Place Parking Facility			Annapolis			500 North Capitol			Colorado			1001			1265 Main			Total Unconsolidated
	Avenue			North			Square (1)			Avenue			Wisconsin Place Parking Facility			Junction (2)			Street, N.W.			Center			6th Street			Street			Joint Ventures
REVENUE
Rental (3)	$	6,423		$	3,461		$	4,607		$	6,415		$	1,005		$	1,953		$	2,735		$	10,130		$	258		$	994		$	37,981
Operating recoveries		931			795			1,268			1,182			282			646			1,253			460			—			205			7,022
Straight-line rent		(107	)		1,059			1,840			602			—			40			269			3,319			—			—			7,022
Fair value lease revenue		—			—			—			—			—			—			—			96			—			—			96
Termination income		22			—			—			—			—			—			—			—			—			—			22

Total revenue		7,269			5,315			7,715			8,199			1,287			2,639			4,257			14,005			258			1,199			52,143

EXPENSES
Operating		3,716			2,344			3,602			3,534			493			1,868			1,143			4,706			329			227			21,962

NET OPERATING INCOME/(LOSS)		3,553			2,971			4,113			4,665			794			771			3,114			9,299			(71	)		972			30,181

Interest		669			1,520			2,419			2,075			—			931			1,128			—			—			102			8,844
Depreciation and amortization		1,874			923			1,662			1,388			1,383			1,009			961			3,848			—			379			13,427

SUBTOTAL		2,543			2,443			4,081			3,463			1,383			1,940			2,089			3,848			—			481			22,271

NET INCOME/(LOSS)	$	1,010		$	528		$	32		$	1,202		$	(589	)	$	(1,169	)	$	1,025		$	5,451		$	(71	)	$	491		$	7,910

BXP’s nominal ownership percentage		60.00	%		50.00	%		20.00	%		25.00	%		33.33	%		50.00	%		30.00	%		49.80	%		50.00	%		50.00	%

BXP’s share of net income/(loss)	$	606		$	264		$	12		$	334	(4)	$	(196	)	$	(585	)	$	308		$	2,715		$	(36	)	$	246		$	3,668

Basis differential
Straight-line rent		—			—			—			—			—			—			—			702	(5)		—			—			702
Fair value lease revenue		—			—			—			—			—			—			—			446	(5)		—			—			446
Depreciation and amortization		174			(7	)		77			(6	)		(7	)		(2	)		7			(2,463	)(5)		—			(4	)		(2,231	)
Gain on investment		—			—			59,370			—			—			—			—			—			—			—			59,370

Total basis differential (6)		174			(7	)		59,447			(6	)		(7	)		(2	)		7			(1,315	)(5)		—			(4	)		58,287

Income/(loss) from unconsolidated joint ventures	$	780		$	257		$	59,459		$	328	(4)	$	(203	)	$	(587	)	$	315		$	1,400		$	(36	)	$	242		$	61,955

Gain on investment		—			—			(59,370	)		—			—			—			—			—			—			—			(59,370	)
BXP’s share of depreciation & amortization		1,015			470			377			986	(4)		466			511			295			4,379			—			193			8,692

BXP’s share of Funds from Operations (FFO)	$	1,795		$	727		$	466		$	1,314		$	263		$	(76	)	$	610		$	5,779		$	(36	)	$	435		$	11,277

BXP’s share of interest expense	$	401		$	760		$	643		$	995	(4)	$	—		$	466		$	338		$	—		$	—		$	51		$	3,654

BXP’s share of fair value interest adjustment	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

BXP’s share of amortization of financing costs	$	31		$	10		$	3		$	21		$	—		$	31		$	4		$	—		$	—		$	—		$	100

BXP’s share of capitalized interest	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

BXP’s share of non-cash termination income adjustment (fair value lease amounts)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

BXP’s share of revenue (7) (8)	$	4,361		$	2,658		$	2,000		$	3,932	(4)	$	429		$	1,320		$	1,277		$	8,122		$	129		$	600		$	24,828
BXP’s share of operating expenses		2,230			1,172			905			1,695	(4)		164			934			343			2,344			165			114			10,066

BXP’s share of net operating income/(loss) (7) (8)		2,131			1,486			1,095			2,237	(4)		265			386			934			5,778			(36	)		486			14,762
Less:
BXP’s share of termination income		13			—			—			—	(4)		—			—			—			—			—			—			13
BXP’s share of straight-line rent		(64	)		530			485			289	(4)		—			20			81			2,355			—			—			3,696
BXP’s share of fair value lease revenue		—			—			—			—	(4)		—			—			—			494			—			—			494
Add:
BXP’s share of lease transaction costs that qualify as rent inducements		—			—			—			—	(4)		—			—			43			—			—			—			43

BXP’s share of net operating income/(loss) (excluding termination income) - cash basis (7) (8)	$	2,182		$	956		$	610		$	1,948	(4)	$	265		$	366		$	896		$	2,929		$	(36	)	$	486		$	10,602

(1)

On October 20, 2016, the Company and its partner in the unconsolidated joint venture that owns Metropolitan Square, completed the sale of an 80% interest in the joint venture. Prior to the sale, the Company owned a 51% interest and its partner owned a 49% interest in the joint venture. Following the sale, the Company continues to own a 20% interest in the joint venture with the buyer owning the remaining 80%.

(2)	Annapolis Junction includes four properties in service and two undeveloped land parcels.

(3)	Includes approximately $50 of management services income and approximately $33 of interest and other income.

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

(5)	The Company’s purchase price allocation under ASC 805 for Colorado Center differs from the historical basis of the venture resulting in the majority of the basis differential for this venture.

(6)	Represents adjustments related to the carrying values and depreciation of certain of the Company’s investment in unconsolidated joint ventures.

(7)	Includes the Company’s share of approximately $2,982 of operating recoveries.

(8)	Includes the Company’s share of approximately $29 of management services income and approximately $13 of interest and other income.

LOGO

FOURTH QUARTER 2016

CONSOLIDATED JOINT VENTURES

(unaudited and in thousands)

Balance Sheets

as of December 31, 2016


BXP's ownership percentage		60.00	%		55.00	%		95.00	%


				Norges Joint Ventures
	767 Fifth Avenue (The GM Building)			Times Square Tower 601 Lexington Avenue 100 Federal Street Atlantic Wharf Office			Salesforce Tower			Total Consolidated Joint Ventures
ASSETS
Real estate, net	$	3,411,413		$	2,184,916		$	750,078		$	6,346,407
Cash and cash held in escrows		104,976			151,525			2,454			258,955
Other assets		100,794			179,957			7			280,758

Total assets	$	3,617,183		$	2,516,398		$	752,539		$	6,886,120

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	1,333,625		$	684,858		$	—		$	2,018,483
Mezzanine notes payable		307,093			—			—			307,093
Outside members' notes payable		180,000			—			—			180,000
Accrued interest on related party notes		153,758			—			—			153,758
Other liabilities		137,053			91,152			69,836			298,041

Total liabilities		2,111,529			776,010			69,836			2,957,375

Equity:
Boston Properties, Inc.		1,104,180	(1)		634,680			657,347			2,396,207
Noncontrolling interests		401,474			1,105,708			25,356			1,532,538	(2)

Total equity		1,505,654			1,740,388			682,703			3,928,745

Total liabilities and equity	$	3,617,183		$	2,516,398		$	752,539		$	6,886,120

Partners' share of mortgage notes payable, net	$	533,450		$	308,186		$	—		$	841,636
Partners' share of mezzanine notes payable		122,837			—			—			122,837
Outside members' notes payable		180,000			—			—			180,000

Partners' share of consolidated debt	$	836,287		$	308,186		$	—		$	1,144,473

(1)	Amount is adjusted for related party notes and accrued interest that are allocated to BXP's partners through noncontrolling interests in property partnerships.

(2)	Amount excludes preferred shareholders' capital of approximately $0.1 million.

LOGO

FOURTH QUARTER 2016

CONSOLIDATED JOINT VENTURES (continued)

(unaudited and in thousands)

Income Statements

for the three months ended December 31, 2016


				Norges Joint Ventures
				Times Square Tower
				601 Lexington Avenue						Total
	767 Fifth Avenue			100 Federal Street						Consolidated
	(The GM Building)			Atlantic Wharf Office			Salesforce Tower			Joint Ventures
REVENUE
Rental	$	67,558		$	85,477		$	—		$	153,035
Straight-line rent		2,521			212			—			2,733
Fair value lease revenue		3,581			1,693			—			5,274
Termination income		(7	)		75			—			68
Parking and other		882			1,325			—			2,207

Total revenue		74,535			88,782			—			163,317

EXPENSES
Operating		27,023			33,273			15			60,311

NET OPERATING INCOME		47,512			55,509			(15	)		103,006

Management services income		(134	)		(737	)		—			(871	)
Interest and other income		(26	)		(162	)		—			(188	)
Interest expense		24,137			8,063			—			32,200
Interest expense - outside members’ notes		8,933			—			—			8,933
Fair value interest adjustment		(11,495	)		—			—			(11,495	)
Depreciation and amortization		39,360			25,610			—			64,970
Other		—			39			—			39

SUBTOTAL		60,775			32,813			—			93,588

NET INCOME/(LOSS)	$	(13,263	)	$	22,696		$	(15	)	$	9,418

BXP’s ownership percentage		60.00	%		55.00	%		95.00	%

Partners’ share of NOI (1)	$	19,005		$	24,979		$	(1	)	$	43,983

BXP’s share of NOI	$	28,507		$	30,530		$	(14	)	$	59,023

Unearned portion of capitalized fees (2)	$	1,571		$	216		$	—		$	1,787

Reconciliation of partners’ noncontrolling interest (NCI):
Net income/(loss)	$	(13,263	)	$	22,696		$	(15	)	$	9,418
Add depreciation & amortization - BXP’s basis difference		38			33			—			71
Special allocation - BXP’s basis		—			(90	)		—			(90	)
Add partners’ share of outside members’ loan interest		8,933			—			—			8,933

Net income/(loss) before interest allocation	$	(4,292	)	$	22,639		$	(15	)	$	18,332

Partners’ share of net income before interest allocation (1)	$	(1,717	)	$	10,188		$	—		$	8,471
Partners’ share of outside members’ loan interest (1)		(8,933	)		—			—			(8,933	)
Allocation of management and other fees to non-controlling partners (1)		(647	)		(982	)		—			(1,629	)
Accretion and adjustments (1)		—			—			(30	)		(30	)

Partners’ NCI (1)	$	(11,297	)	$	9,206		$	(30	)	$	(2,121	)

Reconciliation of partners’ share of FFO:
Net income/(loss)	$	(13,263	)	$	22,696		$	(15	)	$	9,418
Add depreciation & amortization		39,360			25,610			—			64,970

Entity FFO	$	26,097		$	48,306		$	(15	)	$	74,388

Partners’ NCI (1)	$	(11,297	)	$	9,206		$	(30	)	$	(2,121	)
Partners’ share of depreciation and amortization after BXP’s basis differential (1)		15,728			11,528			—			27,256

Partners’ share FFO (1)	$	4,431		$	20,734		$	(30	)	$	25,135

Reconciliation of BXP’s share of FFO:
BXP’s share of net income/(loss) adjusted for partners’ NCI	$	(1,966	)	$	13,490		$	15		$	11,539
Depreciation & amortization - BXP’s basis difference		38			33			—			71
BXP’s share of depreciation & amortization		23,594			14,049			—			37,643

BXP’s share of FFO	$	21,666		$	27,572		$	15		$	49,253

Partners’ share of select items:
Partners’ share of revenue (1)	$	29,814		$	39,952		$	—		$	69,766

Partners’ share of interest expense (1)	$	18,585		$	3,592		$	—		$	22,177

Partners’ share of fair value interest adjustment (1)	$	(4,598	)	$	—		$	—		$	(4,598	)

Partners’ share of amortization of financing costs (1)	$	3		$	36		$	—		$	39

Partners’ share of capitalized interest (1)	$	—		$	203		$	—		$	203

Partners’ share of non-cash termination income adjustment (fair value lease amounts) (1)	$	3		$	—		$	—		$	3

Reconciliation of Partners’ share of NOI (1):
Rental revenue	$	29,814		$	39,952		$	—		$	69,766
Less: Termination income		(3	)		34			—			31

Rental revenue (termination income)		29,817			39,918			—			69,735

Operating expenses		10,809			14,973			1			25,783

NOI (excluding termination income)	$	19,008		$	24,945		$	(1	)	$	43,952

Rental revenue (excluding termination income)	$	29,817		$	39,918			—		$	69,735
Less: Straight-line rent		1,008			95			—			1,103
Fair value lease revenue		1,432			762			—			2,194
Add: Lease transaction costs that qualify as rent inducements (3)		—			—			—			—

Subtotal		27,377			39,061			—			66,438

Less: Operating expenses		10,809			14,973			1			25,783
Straight-line ground rent expense		—			—			—			—

NOI (excluding termination income) - cash basis	$	16,568		$	24,088		$	(1	)	$	40,655

(1)	Amounts represent the partners’ share based on their respective ownership percentage.

(2)	Capitalized fees are eliminated in consolidation and recognized over the life of the asset as depreciation and amortization are added back to the Company’s net income.

(3)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Leasing transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 12.

LOGO

FOURTH QUARTER 2016

RECONCILIATION OF NET INCOME TO NET OPERATING INCOME (NOI)

(in thousands)


	For the three months ended
	December 31, 2016			December 31, 2015
Net income attributable to Boston Properties, Inc. common shareholders	$	145,530		$	137,851
Preferred dividends		2,704			2,646

Net income attributable to Boston Properties, Inc.		148,234			140,497
Net income attributable to noncontrolling interests:
Noncontrolling interest - common units of the Operating Partnership		16,905			16,098
Noncontrolling interest in property partnerships		(2,121	)		10,143

Net income		163,018			166,738
Gains on sales of real estate		—			(81,332	)

Income before gains on sales of real estate		163,018			85,406

Add:
Losses from early extinguishments of debt		—			22,040
Interest expense		97,896			106,178
Depreciation and amortization		179,908			164,460
Transaction costs		1,200			470
General and administrative expense		25,293			24,300
Subtract:
Gains from investments in securities		(560	)		(493	)
Interest and other income		(573	)		(440	)
Gain on sale of investment in unconsolidated joint venture		(59,370	)		—
Income from unconsolidated joint ventures		(2,585	)		(2,211	)
Development and management services income		(9,698	)		(6,452	)

Net Operating Income (NOI)		394,529			393,258

Add:
BXP’s share of NOI from unconsolidated joint ventures		14,762	(1)		10,521

Combined NOI		409,291			403,779

Subtract:
Partners’ share of NOI from consolidated joint ventures		(43,983	)(2)		(48,485	)

BXP’s Share of Combined NOI		365,308			355,294

Subtract:
Termination income		(504	)		(7,701	)
BXP’s share of termination income from unconsolidated joint ventures		(13	)(1)		(17	)
Add:
Partners’ share of termination income from consolidated joint ventures		31	(2)		2,113

BXP’s Share of Combined NOI (excluding termination income)	$	364,822		$	349,689

Net Operating Income (NOI)	$	394,529		$	393,258
Subtract:
NOI from non Same Properties (excluding termination income) (3)		(15,681	)		(16,081	)
Termination income		(504	)		(7,701	)

Same Property NOI (excluding termination income)		378,344			369,476

Add:
BXP’s share of NOI from unconsolidated joint ventures (excluding termination income)		14,749	(1)		10,504
Subtract:
BXP’s share of NOI from non Same Properties from unconsolidated joint ventures (excluding termination income) (3)		(6,455	)		(1,296	)

Combined Same Property NOI (excluding termination income)		386,638			378,684

Subtract:
Partners’ share of NOI from consolidated joint ventures (excluding termination income)		(43,952	)(2)		(46,372	)
Add:
Partners’ share of NOI from non Same Properties from consolidated joint ventures (excluding termination income) (3) (4)		(562	)		1,631

BXP’s Share of Combined Same Property NOI (excluding termination income)	$	342,124		$	333,943

(1)	For disclosures related to the calculation of BXP’s share from unconsolidated joint ventures, see page 18.

(2)	For disclosures related to the calculation of Partners’ share from consolidated joint ventures, see page 20.

(3)	Pages 27-29 indicate by footnote the properties that are not included as part of Same Property NOI. Non Same Properties include properties that were sold prior to December 31, 2016 and therefore are no longer a part of the Company’s property portfolio.

(4)

During the three months ended September 30, 2016, approximately 13% of 601 Lexington Avenue complex was removed from the in-service portfolio as part of a planned redevelopment. As a result, the partners’ share of NOI for the three months ended December 31, 2015, related to the planned redevelopment at 601 Lexington Avenue, is included in Partners’ share of NOI from non Same Properties from consolidated joint ventures (excluding termination income).

LOGO

FOURTH QUARTER 2016

RECONCILIATION OF NET INCOME TO NET OPERATING INCOME (NOI) - CASH BASIS

(in thousands)


	For the three months ended
	December 31, 2016			December 31, 2015
Net income attributable to Boston Properties, Inc. common shareholders	$	145,530		$	137,851
Preferred dividends		2,704			2,646

Net income attributable to Boston Properties, Inc.		148,234			140,497
Net income attributable to noncontrolling interests:
Noncontrolling interest - common units of the Operating Partnership		16,905			16,098
Noncontrolling interest in property partnerships		(2,121	)		10,143

Net income		163,018			166,738
Gains on sales of real estate		—			(81,332	)

Income before gains on sales of real estate		163,018			85,406

Add:
Losses from early extinguishments of debt		—			22,040
Interest expense		97,896			106,178
Depreciation and amortization		179,908			164,460
Transaction costs		1,200			470
General and administrative expense		25,293			24,300
Subtract:
Gains from investments in securities		(560	)		(493	)
Interest and other income		(573	)		(440	)
Gain on sale of investment in unconsolidated joint venture		(59,370	)		—
Income from unconsolidated joint ventures		(2,585	)		(2,211	)
Development and management services income		(9,698	)		(6,452	)

Net Operating Income (NOI)		394,529			393,258

Subtract:
Straight-line rent		(14,711	)		(19,623	)
Fair value lease revenue		(6,840	)		(7,450	)
Add:
Straight-line ground rent expense adjustment (1)		998			(3,983	)
Lease transaction costs that qualify as rent inducements (2)		487			1,939

NOI - cash basis		374,463			364,141

Subtract:
NOI (excluding termination income) - cash basis from non Same Properties (3)		(12,840	)		(9,765	)
Termination income		(504	)		(7,701	)

Same Property NOI (excluding termination income) - cash basis		361,119			346,675

Add:
BXP’s share of NOI (excluding termination income) - cash basis from unconsolidated joint ventures		10,602	(4)		9,396
Subtract:
BXP’s share of NOI (excluding termination income) - cash basis from non Same Properties from unconsolidated joint ventures (3)		(3,487	)		(1,286	)

Combined Same Property NOI (excluding termination income) - cash basis		368,234			354,785

Subtract:
Partners’ share of NOI (excluding termination income) - cash basis from consolidated joint ventures		(40,655	)(5)		(41,303	)
Add:
Partners’ share of NOI (excluding termination income) - cash basis from non Same Properties from consolidated joint ventures (3) (6)		(601	)		1,684

BXP’s Share of Combined Same Property NOI (excluding termination income) - cash basis	$	326,978		$	315,166

(1)	For additional information, refer to page 13.

(2)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 13.

(3)	Pages 27-29 indicate by footnote the properties that are not included as part of Same Property NOI. Non Same Properties include dispositions that occurred prior to December 31, 2016 and therefore are no longer a part of the Company’s property portfolio.

(4)	For disclosures related to the calculation of BXP’s share from unconsolidated joint ventures, see page 18.

(5)	For disclosures related to the calculation of Partners’ share from consolidated joint ventures, see page 20.

(6)

During the three months ended September 30, 2016, approximately 13% of 601 Lexington Avenue complex was removed from the in-service portfolio as part of a planned redevelopment. As a result, the partners’s share of NOI - cash basis for the three months ended December 31, 2015, related to the planned redevelopment at 601 Lexington Avenue, is included in Partners’ share of NOI (excluding termination income) - cash basis from non Same Properties from consolidated joint ventures.

LOGO

FOURTH QUARTER 2016

SAME PROPERTY NET OPERATING INCOME (NOI) BY REPORTABLE SEGMENT

(dollars in thousands)


	Office (1)											Hotel & Residential
	For the three months ended											For the three months ended
	31-Dec-16		31-Dec-15			$ Change			% Change			31-Dec-16		31-Dec-15			$ Change			% Change
Rental Revenue	$	586,654	$	578,719								$	15,155	$	15,045
Less: Termination income		502		7,701									—		—

Rental revenue (excluding termination income) (2)		586,152		571,018		$	15,134			2.7	%		15,155		15,045		$	110			0.7	%

Less: Operating expenses and real estate taxes		213,580		207,083			6,497			3.1	%		9,383		9,504			(121	)		(1.3	)%

NOI (excluding termination income) (3)	$	372,572	$	363,935		$	8,637			2.4	%	$	5,772	$	5,541		$	231			4.2	%

Rental revenue (excluding termination income)	$	586,152	$	571,018								$	15,155	$	15,045
Less: Straight-line rent and fair value lease revenue		18,683		20,738			(2,055	)		(9.9	)%		14		20			(6	)		(30.0	)%

Add: Lease transaction costs that qualify as rent inducements (4)		474		1,940			(1,466	)		(75.6	)%		—		—			—			—

Subtotal		567,943		552,220			15,723			2.8	%		15,141		15,025			116			0.8	%

Less: Operating expenses and real estate taxes		213,580		207,083			6,497			3.1	%		9,383		9,504			(121	)		(1.3	)%
Add: Straight-line ground rent expense (5)		998		(3,983	)		4,981			125.1	%		—		—			—			—

NOI (excluding termination income) - cash basis	$	355,361	$	341,154		$	14,207			4.2	%	$	5,758	$	5,521		$	237			4.3	%


	Consolidated Total (1)											Unconsolidated Joint Ventures (BXP’s Share)
	For the three months ended											For the three months ended
	31-Dec-16		31-Dec-15			$ Change			% Change			31-Dec-16		31-Dec-15			$ Change			% Change
Rental Revenue	$	601,809	$	593,764								$	15,649	$	16,468
Less: Termination income		502		7,701									13		17

Rental revenue (excluding termination income) (2)		601,307		586,063		$	15,244			2.6	%		15,636		16,451		$	(815	)		(5.0	)%

Less: Operating expenses and real estate taxes		222,963		216,587			6,376			2.9	%		7,342		7,243			99			1.4	%

NOI (excluding termination income) (3)	$	378,344	$	369,476		$	8,868			2.4	%	$	8,294	$	9,208		$	(914	)		(9.9	)%

Rental revenue (excluding termination income)	$	601,307	$	586,063								$	15,636	$	16,451
Less: Straight-line rent and fair value lease revenue		18,697		20,758			(2,061	)		(9.9	)%		1,222		1,122			100			8.9	%

Add: Lease transaction costs that qualify as rent inducements (4)		474		1,940			(1,466	)		(75.6	)%		43		24			19			79.2	%

Subtotal		583,084		567,245			15,839			2.8	%		14,457		15,353			(896	)		(5.8	)%

Less: Operating expenses and real estate taxes		222,963		216,587			6,376			2.9	%		7,342		7,243			99			1.4	%
Add: Straight-line ground rent expense (5)		998		(3,983	)		4,981			125.1	%		—		—			—			—

NOI (excluding termination income) - cash basis (6)	$	361,119	$	346,675		$	14,444			4.2	%	$	7,115	$	8,110		$	(995	)		(12.3	)%


	Combined											BXP’s Share of Combined (7)
	For the three months ended											For the three months ended
	31-Dec-16		31-Dec-15			$ Change			% Change			31-Dec-16		31-Dec-15			$ Change			% Change
Rental Revenue	$	617,458	$	610,232								$	548,062	$	539,084
Less: Termination income		515		7,718									484		5,605

Rental revenue (excluding termination income) (2)		616,943		602,514		$	14,429			2.4	%		547,578		533,479		$	14,099			2.6	%

Less: Operating expenses and real estate taxes		230,305		223,830			6,475			2.9	%		205,454		199,536			5,918			3.0	%

NOI (excluding termination income) (3)	$	386,638	$	378,684		$	7,954			2.1	%	$	342,124	$	333,943		$	8,181			2.4	%

Rental revenue (excluding termination income)	$	616,943	$	602,514								$	547,578	$	533,479
Less: Straight-line rent and fair value lease revenue		19,919	$	21,880			(1,961	)		(9.0	)%		16,661		16,740			(79	)		(0.5	)%

Add: Lease transaction costs that qualify as rent inducements (4)		517	$	1,964			(1,447	)		(73.7	)%		517		1,946			(1,429	)		(73.4	)%

Subtotal		597,541	$	582,598			14,943			2.6	%		531,434		518,685			12,749			2.5	%

Less: Operating expenses and real estate taxes		230,305	$	223,830			6,475			2.9	%		205,454		199,536			5,918			3.0	%
Add: Straight-line ground rent expense (5)		998	$	(3,983	)		4,981			125.1	%		998		(3,983	)		4,981			125.1	%

NOI (excluding termination income) - cash basis	$	368,234	$	354,785		$	13,449			3.8	%	$	326,978	$	315,166		$	11,812			3.7	%

(1)

Includes 100% share of consolidated joint ventures. Same Property consolidated joint venture properties includes 767 Fifth Avenue (The GM Building), 601 Lexington Avenue (excluding the portion removed from the complex as part of a planned redevelopment) and Times Square Tower in New York City and 100 Federal Street and Atlantic Wharf Office Building in Boston, MA.

(2)

Rental Revenue (excluding termination income) is used internally by the Company as a performance measure and provides investors with additional information regarding operating performance at a property level that allows them to compare operating performance between periods without taking into account termination income, which can distort the results for any given period because they generally represent multiple months or years of a tenant’s rental obligations that are paid in a lump sum in connection with a negotiated early termination of the tenant’s lease and are not reflective of the core ongoing operating performance of the Company’s properties.

(3)	For a quantitative reconciliation of net income attributable to Boston Properties, Inc. common shareholders to net operating income (NOI) (excluding termination income), see page 21. For disclosures relating to the Company’s use of NOI, see page 48.

(4)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 13.

(5)	For additional information, see page 13.

(6)	For a quantitative reconciliation of net income attributable to Boston Properties, Inc. common shareholders to NOI (excluding termination income) - cash basis, see page 22. For disclosures relating to the Company’s use of NOI, see page 48.

(7)	See page 20 for the partners’ share of each line item, adjusted for the activity at 601 Lexington Avenue related to the planned redevelopment that commenced during the three months ended September 30, 2016.

LOGO

FOURTH QUARTER 2016

RESIDENTIAL and HOTEL PERFORMANCE

Rental Rates and Occupancy


	Fourth Quarter						Percent			YTD						Percent
	2016			2015			Change			2016			2015			Change
*The Avant at Reston Town Center (359 units)*
*Reston, VA*
Average Monthly Rental Rate (1)	$	2,417		$	2,301			5.0	%	$	2,385		$	2,268			5.2	%
Average Rental Rate Per Occupied Square Foot (1)	$	2.64		$	2.50			5.6	%	$	2.62		$	2.46			6.5	%
Average Physical Occupancy (1) (2)		91.9	%		94.5	%		(2.8	)%		93.6	%		90.8	%		3.1	%
Average Economic Occupancy (2)		92.2	%		93.9	%		(1.8	)%		93.6	%		89.2	%		4.9	%

*The Lofts at Atlantic Wharf (86 units)*
*Boston, MA*
Average Monthly Rental Rate (3)	$	4,167		$	4,129			0.9	%	$	4,154		$	4,052			2.5	%
Average Rental Rate Per Occupied Square Foot (3)	$	4.65		$	4.54			2.4	%	$	4.61		$	4.50			2.4	%
Average Physical Occupancy (2) (3)		93.8	%		95.4	%		(1.7	)%		95.6	%		96.4	%		(0.8	)%
Average Economic Occupancy (2)		94.1	%		96.7	%		(2.7	)%		96.5	%		97.4	%		(0.9	)%

*Boston Marriott Cambridge (433 rooms)*
*Cambridge, MA*
Average Occupancy		71.3	%		70.8	%		0.7	%		79.5	%		80.8	%		(1.6	)%
Average Daily Rate	$	279.21		$	287.97			(3.0	)%	$	271.38		$	275.43			(1.5	)%
Revenue per available room	$	199.10		$	203.91			(2.4	)%	$	215.71		$	222.47			(3.0	)%

Net Operating Income (dollars in thousands) (4)


	Residential									Hotel
	Fourth Quarter						Percent			Fourth Quarter				Percent
	2016			2015			Change			2016		2015		Change
Rental Revenue	$	4,190	(5)	$	4,106	(5)		2.0	%	$	10,965	$	10,939		0.2	%
Less: Operating expenses and real estate taxes		1,647			1,616			1.9	%		7,736		7,888		(1.9	)%

Net Operating Income	$	2,543	(5)	$	2,490	(5)		2.1	%	$	3,229	$	3,051		5.8	%

Rental Revenue	$	4,190	(5)	$	4,106	(5)				$	10,965	$	10,939
Less: Straight-line rent and fair value lease revenue		13			19			(31.6	)%		1		1		—

Subtotal		4,177			4,087			2.2	%		10,964		10,938		0.2	%

Less: Operating expenses and real estate taxes		1,647			1,616			1.9	%		7,736		7,888		(1.9	)%
Add: Straight-line ground rent expense		—			—			—			—		—		—

Net Operating Income - cash basis	$	2,530	(5)	$	2,471	(5)		2.4	%	$	3,228	$	3,050		5.8	%

(1)	Excludes 26,179 square feet of retail space which is 100% leased.

(2)	For disclosures related to the Company’s definition of Average Physical and Average Economic Occupancy, see page 47.

(3)	Excludes 9,617 square feet of retail space which is 100% leased.

(4)	For disclosures related to the Company’s definition of Net Operating Income, see page 48.

(5)	Includes 35,796 square feet of retail space, which had revenue of approximately $600 and $599 for the three months ended December 31, 2016 and December 31, 2015, respectively.

LOGO

FOURTH QUARTER 2016

HISTORICALLY GENERATED CAPITAL EXPENDITURES, TENANT IMPROVEMENT COSTS and

LEASING COMMISSIONS

(dollars in thousands, except PSF amounts)

Historical Capital Expenditures


	Q4 2016			Q3 2016			Q2 2016			Q1 2016			2015			2014			2013
Maintenance capital expenditures	$	16,334		$	11,889		$	9,654		$	21,961		$	56,383		$	45,618		$	48,353
Partners’ share of maintenance capital expenditures from consolidated joint ventures		(1,197	)		(377	)		(422	)		(573	)		(5,565	)		(4,377	)		(766	)
BXP’s share of maintenance capital expenditures from unconsolidated joint ventures		437			283			112			197			1,653			1,369			3,439

Hotel improvements, equipment upgrades and replacements (1)		3,870			2,137			434			360			2,430			2,894			2,070

Planned capital expenditures associated with acquisition properties		—			—			—			87			6,914			14,652			21,041
Partners’ share of planned capital expenditures associated with acquisition properties from consolidated joint ventures		—			—			—			—			(845	)		(1,565	)		(535	)
BXP’s share of planned capital expenditures associated with acquisition properties from unconsolidated joint ventures		138			92			—			—			—			—			—

Repositioning capital expenditures (2)		25,046			7,932			12,461			13,007			9,744			—			—
Partners’ share of repositioning capital expenditures from consolidated joint ventures		(2,746	)		—			—			—			—			—			—
BXP’s share of repositioning capital expenditures from unconsolidated joint ventures (3)		256			216			14			8			76			—			—

Total BXP’s Share of Combined Capital Expenditures	$	42,138		$	22,172		$	22,253		$	35,047		$	70,790		$	58,591		$	73,602

2nd Generation Tenant Improvements and Leasing Commissions (4)


	Q4 2016		Q3 2016		Q2 2016		Q1 2016		2015		2014		2013
Square feet		1,112,299		1,177,378		1,304,751		1,376,563		5,204,123		3,936,046		3,610,088

Tenant improvements and lease commissions PSF	$	71.78	$	59.26	$	70.13	$	48.87	$	45.40	$	29.60	$	36.99

(1)	Includes capital expenditures related to a room renovation project totaling approximately $3,200, as of December 31, 2016, with an estimated total project cost of approximately $13,300.

(2)	In Q4 2016, includes capital expenditures related to the repositioning activities designed to enhance revenue potential at 1330 Connecticut Avenue in Washington, DC, 100 Federal Street (55% ownership) and Prudential Center Retail Improvements in Boston, MA, and 399 Park Avenue in New York City.

(3)	Includes capital expenditures related to the repositioning activities designed to enhance revenue potential at Metropolitan Square in Washington, DC.

(4)	Includes 100% of unconsolidated joint ventures.

LOGO

FOURTH QUARTER 2016

PORTFOLIO OVERVIEW

for the three months ended December 31, 2016

(dollars in thousands)

Rentable Square Footage of In-Service Properties by Location and Unit Type (1) (2)


Geographic Area	Office			Retail			Residential			Hotel			Total
Boston		12,758,190			885,669			77,480			330,000			14,051,339
New York		11,115,188			395,256			—			—			11,510,444
San Francisco and Los Angeles		6,844,711			353,937			—			—			7,198,648
Washington, DC		9,899,676			688,619			329,168			—			10,917,463

Total		40,617,765			2,323,481			406,648			330,000			43,677,894

% of Total		93.0	%		5.3	%		0.9	%		0.8	%		100.0	%

Rentable Square Footage and Rental Revenue of In-Service Properties by Unit Type (1) (2) (3)


						Partners’ Share			BXP’s Share of
						of Revenue from			Revenue from
			Consolidated			Consolidated			Unconsolidated
Unit Type	Square Feet		Revenue			Joint Ventures (4)			Joint Ventures (5)		Total		% of Total
Office		40,617,765	$	457,782		$	(51,286	)	$	18,961	$	425,457		85.2	%
Retail		2,323,481		37,794			(5,825	)		736		32,705		6.6	%
Residential		406,648		3,432			—			—		3,432		0.7	%
Hotel		330,000		10,873	(6)		—			—		10,873		2.2	%
Parking and other		N/A		25,334	(7)		(942	)		2,107		26,499		5.3	%

Total		43,677,894	$	535,215		$	(58,053	)	$	21,804	$	498,966		100.0	%

Rentable Square Footage of In-Service Same Properties by Unit Type (1) (2) (8)


Same Properties	Office			Retail			Residential			Hotel			Total
Square Feet		37,947,397			2,217,329			406,648			330,000			40,901,374
% of Properties In-Service		93.4	%		95.4	%		100.0	%		100.0	%		93.6	%

Percentage of BXP’s Share of Combined Net Operating Income (excluding termination income) by Location and Type of Property (1) (9)


Geographic Area	Office			Residential			Hotel			Total
Boston		29.2	%		0.2	%		0.9	%		30.3	%
New York		31.5	%		—			—			31.5	%
San Francisco and Los Angeles		17.5	%		—			—			17.5	%
Washington, DC		20.2	%		0.5	%		—			20.7	%

Total		98.4	%		0.7	%		0.9	%		100.0	%


Geographic Area	CBD			Suburban			Total
Boston		23.6	%		6.7	%		30.3	%
New York		29.0	%		2.5	%		31.5	%
San Francisco and Los Angeles		14.1	%		3.4	%		17.5	%
Washington, DC		8.9	%		11.8	%		20.7	%

Total		75.6	%		24.4	%		100.0	%

(1)	For the definition of In-Service Properties and related disclosures, see page 48.

(2)	Includes 100% of the rentable square footage of the Company’s In-Service Properties. For additional detail relating to the Company’s In-Service Properties, see pages 27-29.

(3)	Excludes recoveries from tenants.

(4)	For additional information, see page 20.

(5)	Represents the Company’s share. For additional information, see page 18.

(6)	Excludes approximately $67 of base rent from retail tenants that is included in Retail above and approximately $25 of recoveries from tenants.

(7)	Includes approximately $2,400 of other income.

(8)	Pages 27-29 indicate by footnote the properties that are not included as part of Same Properties.

(9)

BXP’s Share of Combined Net Operating Income (NOI) (excluding termination income) is a non-GAAP financial measure. For a quantitative reconciliation of net income attributable to Boston Properties, Inc. common shareholders to BXP’s Share of Combined NOI (excluding termination income), see page 21. For disclosures relating to the Company’s use of BXP’s Share of Combined NOI (excluding termination income), see pages 47-48.

LOGO

FOURTH QUARTER 2016

IN-SERVICE PROPERTY LISTING

as of December 31, 2016


												Encumbered		Central
										Annualized		with secured		Business
			Number of							Rental Obligations		debt		District (CBD) or
		Sub Market	Buildings		Square Feet		Leased % (1)			Per Leased SF (2)		(Y/N)		Suburban (S)
Boston
Office
	200 Clarendon Street	CBD Boston MA		1		1,746,221		79.2	%	$	64.56		N		CBD
	100 Federal Street (55% ownership)	CBD Boston MA		1		1,265,037		80.8	%		52.75		N		CBD
	800 Boylston Street - The Prudential Center	CBD Boston MA		1		1,235,885		97.8	%		59.94		N		CBD
	111 Huntington Avenue - The Prudential Center	CBD Boston MA		1		860,455		98.6	%		63.64		N		CBD
	Atlantic Wharf Office (55% ownership)	CBD Boston MA		1		793,827		100.0	%		68.39		N		CBD
	101 Huntington Avenue - The Prudential Center	CBD Boston MA		1		505,583		95.8	%		47.36		N		CBD
(3)(4)	Prudential Center (retail shops)	CBD Boston MA		1		530,992		97.4	%		81.06		N		CBD
(3)	Star Market at the Prudential Center	CBD Boston MA		1		57,235		100.0	%		54.37		N		CBD

				8		6,995,235		90.3	%	$	62.09

	355 Main Street	East Cambridge MA		1		265,342		100.0	%	$	70.24		N		CBD
	90 Broadway	East Cambridge MA		1		223,771		100.0	%		51.42		N		CBD
	255 Main Street	East Cambridge MA		1		215,629		85.1	%		56.20		N		CBD
	300 Binney Street	East Cambridge MA		1		195,191		100.0	%		53.49		N		CBD
	150 Broadway	East Cambridge MA		1		177,226		100.0	%		47.07		N		CBD
	105 Broadway	East Cambridge MA		1		152,664		100.0	%		61.71		N		CBD
	325 Main Street	East Cambridge MA		1		115,361		100.0	%		46.89		N		CBD
(5)	145 Broadway	East Cambridge MA		1		79,616		100.0	%		46.38		N		CBD
	250 Binney Street	East Cambridge MA		1		67,362		100.0	%		43.75		N		CBD
	University Place	Mid-Cambridge MA		1		195,282		100.0	%		47.26		Y		CBD

				10		1,687,444		98.1	%	$	54.34

	Bay Colony Corporate Center	Route 128 Mass Turnpike MA		4		1,011,172		75.6	%	$	36.75		N		S
	Reservoir Place	Route 128 Mass Turnpike MA		1		526,985		98.3	%		33.61		N		S
	140 Kendrick Street	Route 128 Mass Turnpike MA		3		380,987		87.8	%		37.25		N		S
	Weston Corporate Center	Route 128 Mass Turnpike MA		1		356,995		100.0	%		52.18		N		S
	Waltham Weston Corporate Center	Route 128 Mass Turnpike MA		1		301,667		93.4	%		35.42		N		S
	230 CityPoint	Route 128 Mass Turnpike MA		1		298,890		86.5	%		34.99		N		S
	200 West Street	Route 128 Mass Turnpike MA		1		256,245		97.8	%		36.92		N		S
(6)	10 CityPoint	Route 128 Mass Turnpike MA		1		241,460		92.7	%		51.29		N		S
	77 CityPoint	Route 128 Mass Turnpike MA		1		209,707		100.0	%		47.15		N		S
(6)(7)	1265 Main Street (50% ownership)	Route 128 Mass Turnpike MA		1		114,969		100.0	%		43.04		Y		S
	195 West Street	Route 128 Mass Turnpike MA		1		63,500		100.0	%		40.82		N		S
	Quorum Office Park	Route 128 Northwest MA		2		267,527		90.0	%		18.92		N		S
	Lexington Office Park	Route 128 Northwest MA		2		166,858		75.7	%		26.44		N		S
	40 Shattuck Road	Route 128 Northwest MA		1		121,542		68.7	%		23.19		N		S
	91 Hartwell Avenue	Route 128 Northwest MA		1		119,216		100.0	%		27.54		N		S
	201 Spring Street	Route 128 Northwest MA		1		106,300		100.0	%		39.98		N		S
	33 Hayden Avenue	Route 128 Northwest MA		1		80,872		100.0	%		43.89		N		S
	32 Hartwell Avenue	Route 128 Northwest MA		1		69,154		100.0	%		24.48		N		S
	164 Lexington Road	Route 128 Northwest MA		1		64,140		0.0	%		—		N		S
	100 Hayden Avenue	Route 128 Northwest MA		1		55,924		100.0	%		41.17		N		S
	181 Spring Street	Route 128 Northwest MA		1		55,793		100.0	%		31.40		N		S
	92 Hayden Avenue	Route 128 Northwest MA		1		31,100		100.0	%		42.80		N		S
	17 Hartwell Avenue	Route 128 Northwest MA		1		30,000		100.0	%		33.26		N		S
(3)(6)	The Point	Route 128 Northwest MA		1		16,300		84.7	%		52.38		N		S

				31		4,947,303		88.7	%	$	37.25

		Total Boston Office:		49		13,629,982		90.7	%	$	52.16

Residential
	The Lofts at Atlantic Wharf (86 units)	CBD Boston MA		1		87,097							N		CBD

		Total Boston Residential:		1		87,097

Hotel
	Boston Marriott Cambridge (433 rooms)	East Cambridge MA		1		334,260							N		CBD

		Total Boston Hotel:		1		334,260

		Total Boston:		51		14,051,339

(1)	Represents signed leases for which revenue recognition has commenced in accordance with GAAP.

(2)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(3)	This is a retail property.

(4)	As a result of the conversion of the food court into a retail unit, the building rentable square footage increased by approximately 40,000 RSF.

(5)	Property held for redevelopment.

(6)	Not included in Same Property analysis.

(7)	This is an unconsolidated joint venture property.

LOGO

FOURTH QUARTER 2016

IN-SERVICE PROPERTY LISTING (continued)

as of December 31, 2016


														Central
										Annualized		Encumbered		Business
			Number of							Rental Obligations		with secured		District (CBD) or
		Sub Market	Buildings		Square Feet		Leased % (1)			Per Leased SF (2)		debt (Y/N)		Suburban (S)
New York
Office
	767 Fifth Avenue (The GM Building) (60% ownership)	Plaza District NY		1		1,845,092		93.6	%	$	148.25		Y		CBD
	399 Park Avenue	Park Avenue NY		1		1,713,251		93.9	%		90.79		N		CBD
(3)	601 Lexington Avenue (55% ownership)	Park Avenue NY		1		1,436,439		94.3	%		96.03		Y		CBD
	599 Lexington Avenue	Park Avenue NY		1		1,058,805		96.8	%		87.19		N		CBD
	Times Square Tower (55% ownership)	Times Square NY		1		1,248,521		98.2	%		78.05		N		CBD
	250 West 55th Street	Times Square / West Side NY		1		980,927		85.2	%		86.30		N		CBD
	510 Madison Avenue	Fifth/Madison Avenue NY		1		355,598		100.0	%		120.73		N		CBD
(4)	540 Madison Avenue (60% ownership)	Fifth/Madison Avenue NY		1		283,695		94.6	%		100.84		Y		CBD

				8		8,922,328		94.2	%	$	102.31

	One Tower Center	East Brunswick NJ		1		412,797		21.2	%	$	31.75		N		S
	510 Carnegie Center	Princeton NJ		1		234,160		100.0	%		34.74		N		S
	210 Carnegie Center	Princeton NJ		1		159,468		78.9	%		34.29		N		S
	206 Carnegie Center	Princeton NJ		1		161,763		100.0	%		31.87		N		S
	212 Carnegie Center	Princeton NJ		1		151,547		86.9	%		36.26		N		S
	214 Carnegie Center	Princeton NJ		1		148,942		67.2	%		34.71		N		S
	506 Carnegie Center	Princeton NJ		1		140,312		56.4	%		38.53		N		S
	508 Carnegie Center	Princeton NJ		1		134,433		100.0	%		33.38		N		S
	202 Carnegie Center	Princeton NJ		1		134,381		86.3	%		37.80		N		S
(5)	804 Carnegie Center	Princeton NJ		1		130,000		100.0	%		36.25		N		S
	101 Carnegie Center	Princeton NJ		1		125,627		96.9	%		34.13		N		S
	504 Carnegie Center	Princeton NJ		1		121,990		100.0	%		30.83		N		S
	502 Carnegie Center	Princeton NJ		1		121,460		92.7	%		36.75		N		S
	701 Carnegie Center	Princeton NJ		1		120,000		100.0	%		39.28		N		S
	104 Carnegie Center	Princeton NJ		1		102,830		40.3	%		34.97		N		S
	105 Carnegie Center	Princeton NJ		1		69,955		56.3	%		32.53		N		S
	302 Carnegie Center	Princeton NJ		1		64,926		100.0	%		33.16		N		S
	211 Carnegie Center	Princeton NJ		1		47,025		100.0	%		33.40		N		S
	201 Carnegie Center	Princeton NJ		—		6,500		100.0	%		33.33		N		S

				18		2,588,116		76.4	%	$	34.77

		Total New York:		26		11,510,444		90.2	%	$	89.45

San Francisco and Los Angeles
Office
	Embarcadero Center Four	CBD San Francisco CA		1		938,168		88.5	%	$	65.94		N		CBD
	Embarcadero Center One	CBD San Francisco CA		1		831,140		97.1	%		57.83		N		CBD
	Embarcadero Center Two	CBD San Francisco CA		1		787,049		95.6	%		64.72		N		CBD
	Embarcadero Center Three	CBD San Francisco CA		1		779,578		88.3	%		56.68		N		CBD
	680 Folsom Street	CBD San Francisco CA		2		524,793		98.9	%		58.96		N		CBD
(5)	535 Mission Street	CBD San Francisco CA		1		307,235		100.0	%		72.58		N		CBD
(5)	690 Folsom Street	CBD San Francisco CA		1		26,080		100.0	%		69.75		N		CBD

				8		4,194,043		93.7	%	$	62.02

	601 and 651 Gateway	South San Francisco CA		2		506,279		97.7	%	$	39.71		N		S
	611 Gateway	South San Francisco CA		1		260,337		28.2	%		41.09		N		S
	Mountain View Research Park	Mountain View CA		15		540,433		100.0	%		41.37		N		S
	2440 West El Camino Real	Mountain View CA		1		141,392		100.0	%		57.46		N		S
	453 Ravendale Drive	Mountain View CA		1		29,620		65.7	%		32.74		N		S
(5)(6)	3625-3635 Peterson Way	Santa Clara CA		1		218,366		100.0	%		21.84		N		S
(6)	North First Business Park	San Jose CA		5		190,636		87.2	%		21.37		N		S

				26		1,887,063		87.6	%	$	37.55

(4)(5)(7)	Colorado Center (49.8% ownership)	West Los Angeles CA		6		1,117,542		79.1	%	$	57.50		N		CBD

		Total San Francisco and
		Los Angeles:		40		7,198,648		89.8	%	$	55.14

(1)	Represents signed leases for which revenue recognition has commenced in accordance with GAAP.

(2)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(3)

Approximately 13% of this complex was removed from the in-service portfolio upon commencement of construction of the planned redevelopment that occurred during the third quarter of 2016. As a result, the portion related to the planned redevelopment is not included in the Company’s Same Property analysis.

(4)	This is an unconsolidated joint venture property.

(5)	Not included in Same Property analysis.

(6)	Property held for redevelopment.

(7)	Excludes approximately 59,000 square feet of storage space and 8,000 square feet of remeasurement upon lease expirations.

LOGO

FOURTH QUARTER 2016

IN-SERVICE PROPERTY LISTING (continued)

as of December 31, 2016


		Sub Market	Number of Buildings		Square Feet		Leased % (1)			Annualized Rental Obligations Per Leased SF (2)		Encumbered with secured debt (Y/N)		Central Business District (CBD) or Suburban (S)
Washington, DC
Office
	Capital Gallery	Southwest Washington DC		1		631,029		99.8	%	$	59.31		N		CBD
	500 E Street, S.W.	Southwest Washington DC		1		251,994		100.0	%		49.52		N		CBD
(3)(4)	Metropolitan Square (20% ownership)	East End Washington DC		1		607,041		75.0	%		61.18		Y		CBD
(3)	901 New York Avenue (25% ownership)	East End Washington DC		1		539,680		96.9	%		60.27		Y		CBD
(5)	601 Massachusetts Avenue	East End Washington DC		1		478,883		90.2	%		70.01		N		CBD
(3)	Market Square North (50% ownership)	East End Washington DC		1		415,386		71.4	%		65.52		Y		CBD
	2200 Pennsylvania Avenue	CBD Washington DC		1		458,831		100.0	%		89.00		N		CBD
	1333 New Hampshire Avenue	CBD Washington DC		1		315,371		100.0	%		47.30		N		CBD
	1330 Connecticut Avenue	CBD Washington DC		1		253,121		98.0	%		61.01		N		CBD
	Sumner Square	CBD Washington DC		1		208,892		100.0	%		50.56		N		CBD
(3)	500 North Capitol Street, N.W. (30% ownership)	Capitol Hill Washington DC		1		230,860		100.0	%		67.23		Y		CBD

				11		4,391,088		92.2	%	$	63.02

	South of Market	Reston VA		3		623,666		97.7	%	$	54.04		N		S
	Fountain Square	Reston VA		2		518,345		93.8	%		48.47		N		S
	One Freedom Square	Reston VA		1		432,581		95.9	%		46.69		N		S
	Two Freedom Square	Reston VA		1		421,757		98.5	%		45.68		N		S
	One and Two Discovery Square	Reston VA		2		366,990		100.0	%		44.58		N		S
	One Reston Overlook	Reston VA		1		319,519		100.0	%		38.58		N		S
	Reston Corporate Center	Reston VA		2		261,046		100.0	%		39.30		N		S
	Democracy Tower	Reston VA		1		259,441		100.0	%		62.89		N		S
(6)	Fountain Square Retail	Reston VA		1		237,209		98.8	%		51.43		N		S
	Two Reston Overlook	Reston VA		1		134,615		97.1	%		37.76		N		S

				15		3,575,169		97.8	%	$	47.76

	Wisconsin Place Office	Montgomery County MD		1		299,186		97.6	%	$	50.63		N		S
	2600 Tower Oaks Boulevard	Montgomery County MD		1		179,369		48.1	%		33.30		N		S
	New Dominion Technology Park - Building Two	Herndon VA		1		257,400		100.0	%		39.58		N		S
	New Dominion Technology Park - Building One	Herndon VA		1		235,201		100.0	%		33.69		Y		S
	Kingstowne Two	Springfield VA		1		156,251		74.1	%		41.06		N		S
	Kingstowne One	Springfield VA		1		151,483		75.6	%		40.51		N		S
	7601 Boston Boulevard	Springfield VA		1		114,028		100.0	%		18.65		N		S
	7435 Boston Boulevard	Springfield VA		1		103,557		83.4	%		22.30		N		S
	8000 Grainger Court	Springfield VA		1		88,775		37.6	%		23.64		N		S
(6)	Kingstowne Retail	Springfield VA		1		88,288		100.0	%		36.05		N		S
	7500 Boston Boulevard	Springfield VA		1		79,971		100.0	%		19.66		N		S
	7501 Boston Boulevard	Springfield VA		1		75,756		100.0	%		28.67		N		S
	7450 Boston Boulevard	Springfield VA		1		62,402		0.0	%		—		N		S
	7374 Boston Boulevard	Springfield VA		1		57,321		100.0	%		17.90		N		S
	8000 Corporate Court	Springfield VA		1		52,539		100.0	%		14.10		N		S
	7451 Boston Boulevard	Springfield VA		1		45,615		67.4	%		26.08		N		S
	7300 Boston Boulevard	Springfield VA		1		32,000		0.0	%		—		N		S
	7375 Boston Boulevard	Springfield VA		1		26,865		79.2	%		28.70		N		S
(3)	Annapolis Junction Building Seven (50% ownership)	Anne Arundel County MD		1		127,229		100.0	%		31.79		Y		S
(3)(5)	Annapolis Junction Building Eight (50% ownership)	Anne Arundel County MD		1		125,685		0.0	%		—		Y		S
(3)	Annapolis Junction Building Six (50% ownership)	Anne Arundel County MD		1		119,339		48.9	%		30.55		Y		S
(3)	Annapolis Junction Building One (50% ownership)	Anne Arundel County MD		1		117,599		21.9	%		113.54		Y		S

				22		2,595,859		75.2	%	$	35.29

		Total Washington Office:		48		10,562,116		89.9	%	$	51.70

Residential
	The Avant at Reston Town Center (359 units)	Reston VA		1		355,347							N		S

		Total Washington Residential:		1		355,347

		Total Washington, DC:		49		10,917,463

		Total In-Service Properties:		166		43,677,894		90.2	%(7)	$	62.54		(7)

(1)	Represents signed leases for which revenue recognition has commenced in accordance with GAAP.

(2)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(3)	This is an unconsolidated joint venture property.

(4)

On October 20, 2016, the Company and its partner in the unconsolidated joint venture that owns Metropolitan Square, completed the sale of an 80% interest in the joint venture. Prior to the sale, the Company owned a 51% interest in the joint venture. Following the sale, the Company continues to own a 20% interest in the joint venture. As a result, 31% of operating activities prior to the sale is not included in the Company’s Same Property analysis.

(5)	Not included in Same Property analysis.

(6)	This is a retail property.

(7)	Excludes Hotel and Residential properties. For disclosures relating to the Company’s Hotel and Residential properties, see page 24.

LOGO

FOURTH QUARTER 2016

OCCUPANCY BY LOCATION

Total In-Service Properties (1)


	CBD						Suburban						Total
Location	31-Dec-16			31-Dec-15			31-Dec-16			31-Dec-15			31-Dec-16			31-Dec-15
Boston		91.8	%		91.3	%		88.7	%		89.2	%		90.7	%		90.6	%
New York		94.2	%		96.3	%		76.4	%		74.1	%		90.2	%		91.5	%
San Francisco and Los Angeles		90.6	%		91.7	%		87.6	%		99.0	%		89.8	%		93.8	%
Washington, DC		92.2	%		92.1	%		88.3	%		90.3	%		89.9	%		91.0	%

Total Portfolio		92.4	%		93.2	%		86.4	%		88.3	%		90.2	%		91.4	%

Same Property Portfolio (1) (2)


	CBD						Suburban						Total
Location	31-Dec-16			31-Dec-15			31-Dec-16			31-Dec-15			31-Dec-16			31-Dec-15
Boston		91.8	%		91.1	%		88.3	%		88.9	%		90.6	%		90.3	%
New York		94.2	%		96.2	%		75.1	%		74.1	%		90.1	%		91.4	%
San Francisco and Los Angeles		93.2	%		92.7	%		86.0	%		99.0	%		91.0	%		94.6	%
Washington, DC		92.5	%		92.1	%		90.1	%		92.2	%		91.1	%		92.2	%

Total Portfolio		92.9	%		93.3	%		86.6	%		88.9	%		90.6	%		91.7	%

(1)	Represents signed leases for which revenue recognition has commenced in accordance with GAAP. Includes 100% of joint venture properties. Does not include residential and hotel properties.

(2)	For disclosures related to the Company’s definition of Same Properties, see page 48.

LOGO

FOURTH QUARTER 2016

TOP 20 TENANTS LISTING AND PORTFOLIO TENANT DIVERSIFICATION

TOP 20 TENANTS (1)


		% of BXP’s Share of
	Tenant	Combined Annualized Rental Obligations
1.	US Government		2.71	%
2.	Citibank		2.44	%
3.	Arnold & Porter		2.19	%
4.	Biogen		1.99	%
5.	Shearman & Sterling		1.84	%
6.	Ropes & Gray		1.59	%
7.	Kirkland & Ellis		1.45	%
8.	O’Melveny & Myers		1.35	%
9.	Wellington Management		1.23	%
10.	Bank of America		1.19	%
11.	Google		1.06	%
12.	Weil Gotshal Manges		1.05	%
13.	Aramis (Estee Lauder)		1.01	%
14.	Kaye Scholer		0.95	%
15.	Mass Financial Services		0.88	%
16.	Morgan Lewis & Bockius		0.88	%
17.	Microsoft		0.87	%
18.	Morrison Foerster		0.86	%
19.	Hunton & Williams		0.85	%
20.	Smithsonian Institution		0.79	%

	BXP’s Share of Combined Annualized Rental Obligations		27.18	%

	BXP’s Share of Combined Square Feet		22.68	%

NOTABLE SIGNED DEALS (2)


Tenant	Property	Square Feet
salesforce.com	Salesforce Tower		732,000
Akamai Technologies	145 Broadway		476,583

TENANT DIVERSIFICATION (1)

LOGO

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations and Rental Obligations, see pages 47-48.

(2)	Represents leases signed with occupancy commencing in the future.

LOGO

FOURTH QUARTER 2016

LEASE EXPIRATIONS (1) (2) (3)

IN-SERVICE OFFICE PROPERTIES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases p.s.f.		Annualized Rental Obligations Under Expiring Leases with future step-ups		Annualized Rental Obligations Under Expiring Leases with future step-ups - p.s.f.		Percentage of Total Square Feet
2016		108,468	$	5,350,678	$	49.33	$	5,350,678	$	49.33		0.28	%(4)
2017		2,173,714		135,693,077		62.42		136,534,965		62.81		5.63	%
2018		1,429,934		86,497,956		60.49		87,994,217		61.54		3.71	%
2019		3,411,518		178,524,197		52.33		182,921,982		53.62		8.84	%
2020		4,271,783		272,481,819		63.79		281,861,824		65.98		11.07	%
2021		3,657,136		190,998,170		52.23		204,864,334		56.02		9.48	%
2022		4,036,474		227,788,293		56.43		252,085,935		62.45		10.46	%
2023		1,467,160		80,413,999		54.81		92,420,009		62.99		3.80	%
2024		2,652,242		155,318,539		58.56		171,444,748		64.64		6.87	%
2025		2,477,158		141,687,689		57.20		163,044,775		65.82		6.42	%
Thereafter		10,600,406		741,726,784		69.97		935,266,165		88.23		27.47	%

IN-SERVICE RETAIL PROPERTIES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases p.s.f.		Annualized Rental Obligations Under Expiring Leases with future step-ups		Annualized Rental Obligations Under Expiring Leases with future step-ups - p.s.f.		Percentage of Total Square Feet
2016		6,863	$	405,261	$	59.05	$	405,261	$	59.05		0.34	%(4)
2017		154,483		15,407,058		99.73		15,978,775		103.43		7.61	%
2018		111,746		17,343,883		155.21		17,936,989		160.52		5.51	%
2019		112,743		7,777,679		68.99		7,902,789		70.10		5.56	%
2020		183,134		11,612,231		63.41		12,003,896		65.55		9.02	%
2021		163,439		22,055,129		134.94		23,553,325		144.11		8.05	%
2022		207,894		18,544,908		89.20		20,275,985		97.53		10.24	%
2023		176,628		15,302,164		86.63		16,894,758		95.65		8.70	%
2024		113,910		10,290,965		90.34		12,077,984		106.03		5.61	%
2025		131,615		8,692,670		66.05		9,646,666		73.29		6.49	%
Thereafter		666,895		55,707,747		83.53		94,679,659		141.97		32.86	%

TOTAL IN-SERVICE PROPERTIES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases p.s.f.		Annualized Rental Obligations Under Expiring Leases with future step-ups		Annualized Rental Obligations Under Expiring Leases with future step-ups - p.s.f.		Percentage of Total Square Feet
2016		115,331	$	5,755,938	$	49.91	$	5,755,938	$	49.91		0.28	%(4)
2017		2,328,197		151,100,135		64.90		152,513,741		65.51		5.73	%
2018		1,541,680		103,841,839		67.36		105,931,206		68.71		3.80	%
2019		3,524,261		186,301,876		52.86		190,824,771		54.15		8.68	%
2020		4,454,917		284,094,049		63.77		293,865,720		65.96		10.97	%
2021		3,820,575		213,053,299		55.76		228,417,659		59.79		9.41	%
2022		4,244,368		246,333,201		58.04		272,361,921		64.17		10.45	%
2023		1,643,788		95,716,163		58.23		109,314,767		66.50		4.05	%
2024		2,766,152		165,609,504		59.87		183,522,732		66.35		6.81	%
2025		2,608,773		150,380,359		57.64		172,691,441		66.20		6.42	%
Thereafter		11,267,301		797,434,531		70.77		1,029,945,825		91.41		27.74	%

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

LOGO

FOURTH QUARTER 2016

IN-SERVICE BOSTON REGION PROPERTIES

Lease Expirations - Boston Region (1) (2) (3)

OFFICE


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		51,929	$	2,591,466	$	49.90	$	2,591,466	$	49.90	(4)
2017		519,340		26,095,900		50.25		26,438,901		50.91
2018		389,440		15,378,101		39.49		15,765,671		40.48
2019		1,045,120		48,861,532		46.75		49,309,799		47.18
2020		440,899		19,982,407		45.32		21,398,376		48.53
2021		1,076,189		43,313,085		40.25		44,531,197		41.38
2022		1,587,030		76,014,663		47.90		80,113,656		50.48
2023		525,257		26,830,649		51.08		30,639,705		58.33
2024		567,993		27,482,550		48.39		30,677,199		54.01
2025		1,114,559		62,700,067		56.26		70,765,945		63.49
Thereafter		4,034,183		228,192,845		56.56		261,508,463		64.82

RETAIL


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		145	$	142,174	$	980.51	$	142,174	$	980.51	(4)
2017		56,936		5,215,346		91.60		5,187,767		91.12
2018		23,981		3,057,972		127.52		3,058,612		127.54
2019		11,787		2,047,639		173.72		2,072,475		175.83
2020		91,660		5,854,778		63.87		6,004,801		65.51
2021		38,390		3,022,263		78.73		3,182,199		82.89
2022		81,342		5,108,216		62.80		5,605,962		68.92
2023		79,937		7,589,290		94.94		8,138,689		101.81
2024		70,570		4,183,931		59.29		4,578,284		64.88
2025		30,224		3,717,144		122.99		4,107,124		135.89
Thereafter		330,274		21,204,599		64.20		24,165,827		73.17

TOTAL PROPERTY TYPES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		52,074	$	2,733,640	$	52.50	$	2,733,640	$	52.50	(4)
2017		576,276		31,311,246		54.33		31,626,668		54.88
2018		413,421		18,436,073		44.59		18,824,283		45.53
2019		1,056,907		50,909,171		48.17		51,382,275		48.62
2020		532,559		25,837,186		48.52		27,403,177		51.46
2021		1,114,579		46,335,348		41.57		47,713,396		42.81
2022		1,668,372		81,122,879		48.62		85,719,618		51.38
2023		605,194		34,419,939		56.87		38,778,394		64.08
2024		638,563		31,666,481		49.59		35,255,483		55.21
2025		1,144,783		66,417,211		58.02		74,873,069		65.40
Thereafter		4,364,457		249,397,444		57.14		285,674,289		65.45

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

LOGO

FOURTH QUARTER 2016

IN-SERVICE BOSTON REGION PROPERTIES

Quarterly Lease Expirations - Boston Region (1) (2) (3)

OFFICE


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		51,929		2,591,466		49.90		2,591,466		49.90	(4)

Total 2016		51,929	$	2,591,466	$	49.90	$	2,591,466	$	49.90

Q1 2017		50,242	$	2,895,041	$	57.62	$	2,921,793	$	58.15
Q2 2017		176,684		8,204,336		46.44		8,353,918		47.28
Q3 2017		106,854		4,906,558		45.92		4,906,558		45.92
Q4 2017		185,560		10,089,965		54.38		10,256,631		55.27

Total 2017		519,340	$	26,095,900	$	50.25	$	26,438,901	$	50.91

RETAIL


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		145		142,174		980.51		142,174		980.51	(4)

Total 2016		145	$	142,174	$	980.51	$	142,174	$	980.51

Q1 2017		13,149	$	1,908,419	$	145.14	$	1,878,568	$	142.87
Q2 2017		28,504		1,940,812		68.09		1,940,812		68.09
Q3 2017		3,388		526,440		155.38		526,440		155.38
Q4 2017		11,895		839,675		70.59		841,947		70.78

Total 2017		56,936	$	5,215,346	$	91.60	$	5,187,767	$	91.12

TOTAL PROPERTY TYPES


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		52,074		2,733,640		52.50		2,733,640		52.50	(4)

Total 2016		52,074	$	2,733,640	$	52.50	$	2,733,640	$	52.50

Q1 2017		63,391	$	4,803,459	$	75.78	$	4,800,361	$	75.73
Q2 2017		205,188		10,145,148		49.44		10,294,730		50.17
Q3 2017		110,242		5,432,999		49.28		5,432,999		49.28
Q4 2017		197,455		10,929,640		55.35		11,098,577		56.21

Total 2017		576,276	$	31,311,246	$	54.33	$	31,626,668	$	54.88

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

FOURTH QUARTER 2016

IN-SERVICE NEW YORK REGION PROPERTIES

Lease Expirations - New York Region (1) (2) (3)

OFFICE


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		46,560	$	1,992,439	$	42.79	$	1,992,439	$	42.79	(4)
2017		763,242		66,215,698		86.76		66,225,596		86.77
2018		400,055		38,170,304		95.41		38,201,832		95.49
2019		490,846		38,869,485		79.19		39,039,750		79.54
2020		1,859,183		152,323,272		81.93		155,797,582		83.80
2021		390,758		34,595,684		88.53		35,132,086		89.91
2022		939,557		81,214,841		86.44		86,875,267		92.46
2023		121,086		9,392,227		77.57		10,250,419		84.65
2024		1,057,261		73,583,183		69.60		80,372,979		76.02
2025		585,752		41,909,379		71.55		46,478,146		79.35
Thereafter		3,371,590		304,460,382		90.30		401,594,064		119.11

RETAIL


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		852	$	28,926	$	33.95	$	28,926	$	33.95	(4)
2017		37,662		7,066,799		187.64		7,066,799		187.64
2018		8,114		9,023,731		1,112.12		9,549,453		1,176.91
2019		—		—		—		—		—
2020		3,452		253,056		73.31		253,056		73.31
2021		26,225		12,637,581		481.89		13,650,169		520.50
2022		58,093		9,914,958		170.67		10,848,956		186.75
2023		2,850		2,844,360		998.02		3,455,985		1,212.63
2024		12,745		4,222,258		331.29		5,360,777		420.62
2025		1,872		654,764		349.77		730,700		390.33
Thereafter		148,131		25,396,361		171.45		59,815,056		403.80

TOTAL PROPERTY TYPES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		47,412	$	2,021,366	$	42.63	$	2,021,366	$	42.63	(4)
2017		800,904		73,282,497		91.50		73,292,395		91.51
2018		408,169		47,194,035		115.62		47,751,285		116.99
2019		490,846		38,869,485		79.19		39,039,750		79.54
2020		1,862,635		152,576,328		81.91		156,050,638		83.78
2021		416,983		47,233,265		113.27		48,782,254		116.99
2022		997,650		91,129,799		91.34		97,724,223		97.95
2023		123,936		12,236,587		98.73		13,706,404		110.59
2024		1,070,006		77,805,442		72.71		85,733,756		80.12
2025		587,624		42,564,143		72.43		47,208,846		80.34
Thereafter		3,519,721		329,856,743		93.72		461,409,120		131.09

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

LOGO

FOURTH QUARTER 2016

IN-SERVICE NEW YORK REGION PROPERTIES

Quarterly Lease Expirations - New York Region (1) (2) (3)

OFFICE


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		46,560		1,992,439		42.79		1,992,439		42.79	(4)

Total 2016		46,560	$	1,992,439	$	42.79	$	1,992,439	$	42.79

Q1 2017		50,192	$	4,625,929	$	92.16	$	4,625,929	$	92.16
Q2 2017		154,972		15,114,852		97.53		15,124,750		97.60
Q3 2017		517,088		43,006,893		83.17		43,006,893		83.17
Q4 2017		40,990		3,468,024		84.61		3,468,024		84.61

Total 2017		763,242	$	66,215,698	$	86.76	$	66,225,596	$	86.77

RETAIL


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		852		28,926		33.95		28,926		33.95	(4)

Total 2016		852	$	28,926	$	33.95	$	28,926	$	33.95

Q1 2017		8,616	$	4,113,791	$	477.46	$	4,113,791	$	477.46
Q2 2017		626		180,160		287.79		180,160		287.79
Q3 2017		27,659		2,721,739		98.40		2,721,739		98.40
Q4 2017		761		51,110		67.16		51,110		67.16

Total 2017		37,662	$	7,066,799	$	187.64	$	7,066,799	$	187.64

TOTAL PROPERTY TYPES


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		47,412		2,021,366		42.63		2,021,366		42.63	(4)

Total 2016		47,412	$	2,021,366	$	42.63	$	2,021,366	$	42.63

Q1 2017		58,808	$	8,739,719	$	148.61	$	8,739,719	$	148.61
Q2 2017		155,598		15,295,011		98.30		15,304,909		98.36
Q3 2017		544,747		45,728,632		83.94		45,728,632		83.94
Q4 2017		41,751		3,519,134		84.29		3,519,134		84.29

Total 2017		800,904	$	73,282,497	$	91.50	$	73,292,395	$	91.51

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

FOURTH QUARTER 2016

IN-SERVICE SAN FRANCISCO AND LOS ANGELES REGIONS PROPERTIES

Lease Expirations - San Francisco and Los Angeles Regions (1) (2) (3)

OFFICE


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		1,867	$	148,166	$	79.36	$	148,166	$	79.36	(4)
2017		454,060		21,408,347		47.15		21,772,917		47.95
2018		195,064		10,422,886		53.43		10,690,049		54.80
2019		862,643		42,165,454		48.88		44,548,169		51.64
2020		667,056		42,464,965		63.66		43,802,350		65.67
2021		968,585		47,478,857		49.02		53,067,717		54.79
2022		788,006		38,281,191		48.58		48,471,057		61.51
2023		304,813		19,890,216		65.25		23,149,210		75.95
2024		394,472		22,295,857		56.52		23,501,649		59.58
2025		313,833		17,119,817		54.55		21,828,149		69.55
Thereafter		1,164,315		76,221,622		65.46		101,904,915		87.52

RETAIL


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		5,167	$	229,360	$	44.39	$	229,360	$	44.39	(4)
2017		37,196		1,568,460		42.17		1,570,418		42.22
2018		35,502		2,133,561		60.10		2,165,211		60.99
2019		14,168		770,597		54.39		793,047		55.97
2020		34,976		2,150,736		61.49		2,273,134		64.99
2021		22,132		1,431,116		64.66		1,506,558		68.07
2022		29,192		1,234,614		42.29		1,314,350		45.02
2023		29,753		1,686,466		56.68		1,770,434		59.50
2024		8,545		561,522		65.71		648,935		75.94
2025		22,409		1,400,475		62.50		1,611,351		71.91
Thereafter		52,724		3,136,469		59.49		3,808,628		72.24

TOTAL PROPERTY TYPES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		7,034	$	377,526	$	53.67	$	377,526	$	53.67	(4)
2017		491,256		22,976,807		46.77		23,343,335		47.52
2018		230,566		12,556,447		54.46		12,855,260		55.76
2019		876,811		42,936,051		48.97		45,341,216		51.71
2020		702,032		44,615,701		63.55		46,075,485		65.63
2021		990,717		48,909,974		49.37		54,574,275		55.09
2022		817,198		39,515,805		48.36		49,785,407		60.92
2023		334,566		21,576,682		64.49		24,919,644		74.48
2024		403,017		22,857,378		56.72		24,150,584		59.92
2025		336,242		18,520,292		55.08		23,439,499		69.71
Thereafter		1,217,039		79,358,091		65.21		105,713,543		86.86

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

FOURTH QUARTER 2016

IN-SERVICE SAN FRANCISCO AND LOS ANGELES REGIONS PROPERTIES

Quarterly Lease Expirations - San Francisco and Los Angeles Regions (1) (2) (3)

OFFICE


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		1,867		148,166		79.36		148,166		79.36	(4)

Total 2016		1,867	$	148,166	$	79.36	$	148,166	$	79.36

Q1 2017		103,554	$	5,075,198	$	49.01	$	5,077,336	$	49.03
Q2 2017		159,619		5,607,755		35.13		5,823,342		36.48
Q3 2017		135,644		8,353,283		61.58		8,356,512		61.61
Q4 2017		55,243		2,372,111		42.94		2,515,727		45.54

Total 2017		454,060	$	21,408,347	$	47.15	$	21,772,917	$	47.95

RETAIL


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		5,167		229,360		44.39		229,360		44.39	(4)

Total 2016		5,167	$	229,360	$	44.39	$	229,360	$	44.39

Q1 2017		30	$	14,400	$	480.00	$	14,400	$	480.00
Q2 2017		130		26,046		200.35		26,046		200.35
Q3 2017		7,046		491,562		69.76		491,562		69.76
Q4 2017		29,990		1,036,452		34.56		1,038,410		34.63

Total 2017		37,196	$	1,568,460	$	42.17	$	1,570,418	$	42.22


*TOTAL PROPERTY TYPES*


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		7,034		377,526		53.67		377,526		53.67	(4)

Total 2016		7,034	$	377,526	$	53.67	$	377,526	$	53.67

Q1 2017		103,584	$	5,089,598	$	49.13	$	5,091,736	$	49.16
Q2 2017		159,749		5,633,800		35.27		5,849,388		36.62
Q3 2017		142,690		8,844,845		61.99		8,848,074		62.01
Q4 2017		85,233		3,408,564		39.99		3,554,137		41.70

Total 2017		491,256	$	22,976,807	$	46.77	$	23,343,335	$	47.52

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

FOURTH QUARTER 2016

IN-SERVICE WASHINGTON, DC REGION PROPERTIES

Lease Expirations - Washington, DC Region (1) (2) (3)

OFFICE


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		8,112	$	618,607	$	76.26	$	618,607	$	76.26	(4)(5)
2017		437,072		21,973,133		50.27		22,097,552		50.56	(5)
2018		445,375		22,526,664		50.58		23,336,665		52.40
2019		1,012,909		48,627,725		48.01		50,024,264		49.39
2020		1,304,645		57,711,174		44.24		60,863,516		46.65
2021		1,221,604		65,610,543		53.71		72,133,334		59.05
2022		721,881		32,277,599		44.71		36,625,956		50.74
2023		516,004		24,300,907		47.09		28,380,674		55.00
2024		632,516		31,956,949		50.52		36,892,921		58.33
2025		463,014		19,958,427		43.11		23,972,535		51.77
Thereafter		2,030,318		132,851,935		65.43		170,258,723		83.86

*RETAIL*

Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		699	$	4,800	$	6.87	$	4,800	$	6.87	(4)
2017		22,689		1,556,452		68.60		2,153,791		94.93
2018		44,149		3,128,619		70.86		3,163,713		71.66
2019		86,788		4,959,443		57.14		5,037,267		58.04
2020		53,046		3,353,661		63.22		3,472,904		65.47
2021		76,692		4,964,169		64.73		5,214,399		67.99
2022		39,267		2,287,119		58.25		2,506,717		63.84
2023		64,088		3,182,048		49.65		3,529,650		55.08
2024		22,050		1,323,255		60.01		1,489,989		67.57
2025		77,110		2,920,287		37.87		3,197,491		41.47
Thereafter		135,766		5,970,318		43.98		6,890,149		50.75

*TOTAL PROPERTY TYPES*

Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot



2016		8,811	$	623,407	$	70.75	$	623,407	$	70.75	(4)
2017		459,761		23,529,585		51.18		24,251,343		52.75
2018		489,524		25,655,283		52.41		26,500,378		54.13
2019		1,099,697		53,587,168		48.73		55,061,531		50.07
2020		1,357,691		61,064,834		44.98		64,336,420		47.39
2021		1,298,296		70,574,712		54.36		77,347,733		59.58
2022		761,148		34,564,718		45.41		39,132,673		51.41
2023		580,092		27,482,955		47.38		31,910,324		55.01
2024		654,566		33,280,203		50.84		38,382,909		58.64
2025		540,124		22,878,713		42.36		27,170,026		50.30
Thereafter		2,166,084		138,822,254		64.09		177,148,873		81.78

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

(5)	Includes 2,745 and 23,064 square feet of Sensitive Compartmented Information Facility (SCIF) space in 2016 and 2017, respectively. Excluding the SCIF space, the current and future expiring rental rates per square foot would be $52.97 and $52.97 and $46.80 and $47.08, respectively.

LOGO

FOURTH QUARTER 2016

IN-SERVICE WASHINGTON, DC REGION PROPERTIES

Quarterly Lease Expirations - Washington, DC Region (1) (2) (3)

OFFICE


							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration by Quarter	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Lease Expiration by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		8,112		618,607		76.26		618,607		76.26	(4)(5)

Total 2016		8,112	$	618,607	$	76.26	$	618,607	$	76.26

Q1 2017		164,436	$	7,469,261	$	45.42	$	7,469,261	$	45.42
Q2 2017		80,850		5,067,988		62.68		5,129,852		63.45	(5)
Q3 2017		45,840		2,708,772		59.09		2,724,459		59.43	(5)
Q4 2017		145,946		6,727,112		46.09		6,773,980		46.41

Total 2017		437,072	$	21,973,133	$	50.27	$	22,097,552	$	50.56


*RETAIL*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration by Quarter	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Lease Expiration by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		699		4,800		6.87		4,800		6.87	(4)

Total 2016		699	$	4,800	$	6.87	$	4,800	$	6.87

Q1 2017		458	$	21,230	$	46.35	$	21,230	$	46.35
Q2 2017		1,909		312,000		163.44		912,000		477.74
Q3 2017		6,842		446,730		65.29		446,730		65.29
Q4 2017		13,480		776,492		57.60		773,831		57.41

Total 2017		22,689	$	1,556,452	$	68.60	$	2,153,791	$	94.93


*TOTAL PROPERTY TYPES*

							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration by Quarter	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Lease Expiration by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		—		—		—		—		—
Q4 2016		8,811		623,407		70.75		623,407		70.75	(4)

Total 2016		8,811	$	623,407	$	70.75	$	623,407	$	70.75

Q1 2017		164,894	$	7,490,491	$	45.43	$	7,490,491	$	45.43
Q2 2017		82,759		5,379,988		65.01		6,041,852		73.01
Q3 2017		52,682		3,155,502		59.90		3,171,189		60.19
Q4 2017		159,426		7,503,604		47.07		7,547,811		47.34

Total 2017		459,761	$	23,529,585	$	51.18	$	24,251,343	$	52.75

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

(5)

Includes 2,745, 14,887, and 8,177 square feet of Sensitive Compartmented Information Facility (SCIF) space in Q4 2016, Q2 2017, and Q3 2017, respectively. Excluding the SCIF space, the current and future expiring rental rates per square foot would be $52.97 and $52.97, $49.43 and $50.22 and $50.99 and $51.40, respectively.

LOGO

FOURTH QUARTER 2016

CBD PROPERTIES

Lease Expirations (1) (2) (3)


	Boston											San Francisco and Los Angeles
							Annualized											Annualized
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		40,410	$	2,351,988	$	58.20	$	2,351,988	$	58.20	(4)		7,034	$	377,526	$	53.67	$	377,526	$	53.67	(4)
2017		437,503		26,796,594		61.25		26,996,548		61.71			299,557		17,347,021		57.91		17,509,484		58.45
2018		128,725		8,891,316		69.07		9,092,710		70.64			171,523		10,307,252		60.09		10,525,952		61.37
2019		571,224		31,894,551		55.84		32,167,687		56.31			385,322		22,700,073		58.91		23,755,878		61.65
2020		270,329		16,628,494		61.51		17,126,127		63.35			617,506		40,865,540		66.18		41,969,316		67.97
2021		429,563		24,963,508		58.11		25,299,679		58.90			645,036		39,471,551		61.19		44,358,839		68.77
2022		953,359		54,828,603		57.51		59,056,235		61.95			412,854		22,495,016		54.49		28,818,732		69.80
2023		408,928		27,550,871		67.37		30,626,128		74.89			293,909		19,386,934		65.96		22,076,990		75.12
2024		314,579		19,118,433		60.77		20,658,948		65.67			378,505		21,901,410		57.86		22,939,592		60.61
2025		686,806		44,643,553		65.00		50,774,520		73.93			330,600		18,326,577		55.43		23,187,337		70.14
Thereafter		3,684,682		222,816,760		60.47		254,937,338		69.19			1,217,039		79,358,091		65.21		105,713,543		86.86

	New York											Washington, DC
							Annualized											Annualized
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		21,983	$	1,012,209	$	46.05	$	1,012,209	$	46.05	(4)		3,225	$	169,325	$	52.50	$	169,325	$	52.50	(4)
2017		672,786		68,416,725		101.69		68,426,623		101.71			118,523		6,525,265		55.05		6,538,380		55.17
2018		327,015		44,325,387		135.55		44,851,109		137.15			116,353		6,864,525		59.00		7,130,559		61.28
2019		331,971		32,959,357		99.28		33,027,778		99.49			463,931		29,396,742		63.36		30,811,383		66.41
2020		1,554,040		141,905,738		91.31		144,919,756		93.25			452,329		25,224,315		55.77		26,747,367		59.13
2021		311,243		43,722,366		140.48		45,081,399		144.84			545,869		36,146,040		66.22		39,727,771		72.78
2022		918,364		88,453,900		96.32		94,808,551		103.24			99,532		5,765,037		57.92		6,376,593		64.07
2023		88,867		11,073,993		124.61		12,568,974		141.44			46,648		2,899,372		62.15		3,471,497		74.42
2024		680,653		64,295,387		94.46		71,428,137		104.94			193,400		12,584,475		65.07		14,579,112		75.38
2025		319,444		33,232,326		104.03		36,363,750		113.83			85,677		4,449,746		51.94		5,382,590		62.82
Thereafter		3,134,057		316,841,502		101.10		446,679,576		142.52			1,841,780		125,342,348		68.06		159,836,799		86.78

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

LOGO

FOURTH QUARTER 2016

SUBURBAN PROPERTIES

Lease Expirations (1) (2) (3)


	Boston											San Francisco
							Annualized											Annualized
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		11,664	$	381,652	$	32.72	$	381,652	$	32.72	(4)		—	$	—	$	—	$	—	$	—
2017		138,773		4,514,652		32.53		4,630,120		33.36			191,699		5,629,786		29.37		5,833,851		30.43
2018		284,696		9,544,757		33.53		9,731,573		34.18			59,043		2,249,196		38.09		2,329,308		39.45
2019		485,683		19,014,620		39.15		19,214,588		39.56			491,489		20,235,978		41.17		21,585,338		43.92
2020		262,230		9,208,692		35.12		10,277,050		39.19			84,526		3,750,161		44.37		4,106,169		48.58
2021		685,016		21,371,840		31.20		22,413,716		32.72			345,681		9,438,422		27.30		10,215,437		29.55
2022		715,013		26,294,276		36.77		26,663,384		37.29			404,344		17,020,789		42.09		20,966,675		51.85
2023		196,266		6,869,068		35.00		8,152,266		41.54			40,657		2,189,748		53.86		2,842,655		69.92
2024		323,984		12,548,047		38.73		14,596,535		45.05			24,512		955,968		39.00		1,210,992		49.40
2025		457,977		21,773,658		47.54		24,098,549		52.62			5,642		193,716		34.33		252,162		44.69
Thereafter		679,775		26,580,685		39.10		30,736,951		45.22			—		—		—		—		—

	New York											Washington, DC
							Annualized											Annualized
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		25,429	$	1,009,157	$	39.69	$	1,009,157	$	39.69	(4)		5,586	$	454,082	$	81.29	$	454,082	$	81.29	(4)(5)
2017		128,118		4,865,772		37.98		4,865,772		37.98			341,238		17,004,320		49.83		17,712,963		51.91	(5)
2018		81,154		2,868,649		35.35		2,900,177		35.74			373,171		18,790,758		50.35		19,369,819		51.91
2019		158,875		5,910,129		37.20		6,011,972		37.84			635,766		24,190,426		38.05		24,250,148		38.14
2020		308,595		10,670,590		34.58		11,130,882		36.07			905,362		35,840,519		39.59		37,589,054		41.52
2021		105,740		3,510,899		33.20		3,700,856		35.00			752,427		34,428,672		45.76		37,619,962		50.00
2022		79,286		2,675,899		33.75		2,915,672		36.77			661,616		28,799,681		43.53		32,756,080		49.51
2023		35,069		1,162,594		33.15		1,137,430		32.43			533,444		24,583,583		46.08		28,438,827		53.31
2024		389,353		13,510,054		34.70		14,305,618		36.74			461,166		20,695,728		44.88		23,803,798		51.62
2025		268,180		9,331,817		34.80		10,845,096		40.44			454,447		18,428,967		40.55		21,787,436		47.94
Thereafter		385,664		13,015,241		33.75		14,729,543		38.19			324,304		13,479,906		41.57		17,312,073		53.38

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

(5)	Includes 2,745 and 23,064 square feet of Sensitive Compartmented Information Facility (SCIF) space in 2016 and 2017, respectively. Excluding the SCIF space, the current and future expiring rental rates per square foot would be $42.15 and $42.15 and $45.28 and $47.48, respectively.

LOGO

FOURTH QUARTER 2016

LEASING ACTIVITY

for the three months ended December 31, 2016

All In-Service Properties


	Total
Vacant space available @ 10/1/2016 (sf)		4,475,330
Property dispositions/ properties taken out of service (sf)		(158,900	)
Properties acquired vacant space (sf)		—
Properties placed in-service (sf) (1)		203,536
Leases expiring or terminated 10/1/2016-12/31/2016 (sf)		994,531

Total space available for lease (sf)		5,514,497

1st generation leases (sf)		205,923
2nd generation leases with new tenants (sf)		833,976
2nd generation lease renewals (sf)		278,323

Total space leased (sf)		1,318,222

Vacant space available for lease @ 12/31/2016 (sf)		4,196,275

Net (increase)/decrease in available space (sf)		279,055

Second generation leasing information: (2)
Leases commencing during the period (sf)		1,112,299
Weighted average lease term (months)		115
Weighted average free rent period (days)		160
Total transaction costs per square foot (3)	$	71.78
Increase (decrease) in gross rents (4)		25.20	%
Increase (decrease) in net rents (5)		39.01	%


	All leases 1st Generation (sf)		All leases 2nd Generation (sf)		Incr (decr) in 2nd gen. gross cash rents (4)			Incr (decr) in 2nd gen. net cash rents (5)			Total Leased (sf) (6)		Total square feet of leases executed in the quarter (7)
Boston		203,536		433,902		15.45	%		23.46	%		637,438		1,489,713
New York		—		117,590		30.99	%		49.36	%		117,590		550,858
San Francisco and Los Angeles		2,387		356,347		49.59	%		75.53	%		358,734		565,725
Washington, DC		—		204,460		0.89	%		0.41	%		204,460		422,492

Total / Weighted Average		205,923		1,112,299		25.20	%		39.01	%		1,318,222		3,028,788

(1)	Total square feet of properties placed in service in Q4 2016 consist of 39,593 square feet at Prudential Center Retail, 48,974 square feet at 888 Boylston Street and 114,969 square feet at 1265 Main Street.

(2)	Second generation leases are defined as leases for space that had previously been leased by the Company. Of the 1,112,299 square feet of second generation leases that commenced in Q4 2016, leases for 711,372 square feet were signed in prior periods.

(3)	Total transaction costs include tenant improvements and leasing commissions and exclude free rent concessions.

(4)

Represents the increase/(decrease) in gross rent (base rent plus expense reimbursements) on the new vs. expired leases on the 653,690 square feet of second generation leases that had been occupied within the prior 12 months; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis (e.g., the tenant is occupying “swing space”).

(5)

Represents the increase/(decrease) in net rent (gross rent less operating expenses) on the new vs. expired leases on the 653,690 square feet of second generation leases that had been occupied within the prior 12 months; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis (e.g., the tenant is occupying “swing space”).

(6)	Represents leases for which rental revenue recognition has commenced in accordance with GAAP during the quarter.

(7)

Represents leases executed in the quarter for which the Company either (1) commenced rental revenue recognition in such quarter or (2) will commence rental revenue recognition in subsequent quarters, in accordance with GAAP, and includes leases at properties currently under development. The total square feet of leases executed in the current quarter and recognized in the current quarter is 400,927.

LOGO

FOURTH QUARTER 2016

ACQUISITIONS/DISPOSITIONS

as of December 31, 2016

ACQUISITIONS

For the period from January 1, 2016 through December 31, 2016


Property	Location	Date Acquired	Square Feet			Initial Investment		Anticipated Future Investment			Total Investment			Percentage Leased
3625-3635 Peterson Way	Santa Clara, CA	April 22, 2016		218,366		$	78,000,000	$	—		$	78,000,000			100	%
Colorado Center (49.8% ownership interest)	Santa Monica, CA	July 1, 2016		1,117,542	(1)		502,988,000		—	(2)		502,988,000			79	%
The Hub on Causeway (Hotel Tower - Air Rights) (50% ownership interest) (3)	Boston, MA	November 28, 2016		N/A			731,000		6,725,000			7,456,000			N/A
The Hub on Causeway (Residential Tower - Air Rights) (50% ownership interest) (4)	Boston, MA	November 28, 2016		N/A			17,665,000		6,535,000			24,200,000			N/A

Total Acquisitions				1,335,908		$	599,384,000	$	13,260,000		$	612,644,000			82	%

(1) Excludes approximately 59,000 square feet of storage space and 8,000 square feet of remeasurement upon lease expirations. (2) The venture is reviewing plans to renovate the common areas and will provide a budget once finalized. (3) On November 28, 2016, the Company entered into a joint venture with the partner at its North Station development to acquire the air rights for the future development of a hotel property at the site. The joint venture partner contributed an air rights parcel and improvements, with a fair value of approximately $7.4 million, for its initial 50% interest in the joint venture. The Company contributed improvements totaling approximately $0.7 million and will contribute cash totaling approximately $6.7 million for its initial 50% interest. On November 28, 2016, the joint venture entered into a 99-year air rights lease with a third-party hotel developer/operator. (4) On November 28, 2016, the Company entered into a joint venture with the partner at its North Station development to acquire the air rights for the future development of a residential tower at the site, consisting of an approximately 40-story residential tower totaling approximately 320,000 rentable square feet comprised of 440 apartment units. The joint venture partner contributed an air rights parcel, with a fair value of approximately $24.2 million, for its initial 50% interest in the joint venture. The Company contributed improvements totaling approximately $17.7 million and will contribute cash totaling approximately $6.5 million for its initial 50% interest.
*DISPOSITIONS*
For the period from January 1, 2016 through December 31, 2016
Property	Location	Date Disposed	Square Feet			Gross Sales Price		Net Cash Proceeds			Book Gain
415 Main Street	Cambridge, MA	February 1, 2016		231,028		$	105,360,000	$	104,868,000		$	60,803,000
Broad Run Business Park (land parcel)	Loudoun County, VA	August 16, 2016		N/A			18,019,000		17,934,000			12,983,000

Total Dispositions of Real Estate				231,028		$	123,379,000	$	122,802,000		$	73,786,000	(1)

Metropolitan Square (31% ownership interest)	Washington, DC	October 20, 2016		607,041		$	109,430,000	$	58,237,000		$	59,370,000

Total Disposition of Ownership Interest in Unconsolidated Joint Venture				607,041		$	109,430,000	$	58,237,000		$	59,370,000	(2)

(1)	Excludes approximately $6,820,000 of gain on sale of real estate recognized during the three months ended March 31, 2016 related to a previously deferred gain amount from a 2014 sale of real estate.

(2)	Reflected on the consolidated income statement as gain on sale of investment in unconsolidated joint venture. See page 10.

LOGO

FOURTH QUARTER 2016

VALUE CREATION PIPELINE - CONSTRUCTION IN PROGRESS (1)

as of December 31, 2016


Construction Properties	Actual / Estimated Initial Occupancy	Actual / Estimated Stabilization Date	Location	# of Buildings		Square feet		Investment to Date (2)			Estimated Total Investment (2)			Total Financing (2)			Amount Drawn at 12/31/2016 (2)			Estimated Future Equity Requirement (2)		Percentage Leased (3)			Percentage Placed in service (4)
Office and Retail
Prudential Center Retail Expansion	Q1 2016	Q3 2017	Boston, MA		—		15,000	$	9,598,847		$	10,760,000		$	—		$	—		$	1,161,153		100	%		39	%
888 Boylston Street	Q3 2016	Q4 2017	Boston, MA		1		425,000		231,986,228			271,500,000			—			—			39,513,772		84	%		28	%
Salesforce Tower (95% ownership)	Q4 2017	Q1 2019	San Francisco, CA		1		1,400,000		711,758,691			1,073,500,000			(25,389,074)	(5)		(4,280,731	)(5)		382,849,652		62	%		—
The Hub on Causeway (50% ownership)	Q1 2019	Q4 2019	Boston, MA		1		385,000		27,090,163			141,870,000			—			—			114,779,837		33	%		—
Dock 72 (50% ownership)	Q2 2018	Q1 2020	Brooklyn, NY		1		670,000		37,769,369			204,900,000			125,000,000			—			42,130,631		33	%		—

Total Office Properties under Construction					4		2,895,000	$	1,018,203,298		$	1,702,530,000		$	99,610,926		$	(4,280,731	)	$	580,435,045		55	%		7	%

Residential
Proto at Cambridge (274 units)	Q1 2018	Q1 2019	Cambridge, MA		1		164,000	$	24,956,979		$	140,170,000		$	—		$	—		$	115,213,021		N/A			—
Signature at Reston (508 Units)	Q4 2017	Q2 2020	Reston, VA		1		490,000		86,937,619	(6)		234,854,000	(6)		—			—			147,916,381		N/A			—
Signature at Reston - Retail					—		24,600		—			—			—			—			—		81	%		—

Total Residential Properties under Construction					2		678,600	$	111,894,598		$	375,024,000		$	—		$	—		$	263,129,402		59%	(7)		—

Redevelopment Properties
Reservoir Place North	Q1 2018	Q1 2018	Waltham, MA		1		73,000	$	15,321,808		$	24,510,000		$	—		$	—		$	9,188,192		—			4	%
191 Spring Street	Q4 2017	Q3 2018	Lexington, MA		1		160,000		1,761,927			53,920,000			—			—			52,158,073		—			—
159 East 53rd (55% ownership) (8)	Q2 2018	Q4 2019	New York, NY		—		220,000		14,597,064			106,000,000			—			—			91,402,936		—			—

Total Redevelopment Properties under Construction					2		453,000	$	31,680,799		$	184,430,000		$	—		$	—		$	152,749,201		—			2	%

Total Properties Under Construction and Redevelopment					8		4,026,600	$	1,161,778,695		$	2,261,984,000		$	99,610,926		$	(4,280,731	)	$	996,313,648		48%	(7)		6	%


*PROJECTS FULLY PLACED IN-SERVICE DURING 2016*

	Actual / Estimated Initial Occupancy	Actual / Estimated Stabilization Date	Location	# of Buildings		Square feet		Investment to Date (2)			Estimated Total Investment (2)			Total Financing (2)			Amount Drawn at 12/31/2016 (2)			Estimated Future Equity Requirement (2)		Percentage Leased (3)
804 Carnegie Center	Q2 2016	Q2 2016	Princeton, NJ		1		130,000	$	47,552,712		$	47,600,000		$	—		$	—		$	47,288		100	%
10 CityPoint	Q2 2016	Q2 2016	Waltham, MA		1		241,460		88,516,318			92,600,000			—			—			4,083,682		95	%
1265 Main Street (50% ownership)	Q4 2016	Q4 2016	Waltham, MA		1		114,969		24,233,569			24,350,000			20,200,000			20,200,000			116,431		100	%
601 Massachusetts Avenue	Q3 2015	Q1 2017	Washington, DC		1		478,883		300,556,660			306,600,000			—			—			6,043,340		95	%

Total Projects placed In-Service					4		965,312	$	460,859,259		$	471,150,000		$	20,200,000		$	20,200,000		$	10,290,741		96	%

IN-SERVICE PROPERTIES HELD FOR REDEVELOPMENT


									Annualized		Encumbered		Central Business
		# of		Existing					Rental Obligations		with secured		District (CBD) or		Incremental Estimated
	Sub Market	Buildings		Square Feet		Leased%			Per Leased SF (9)		debt (Y/N)		Suburban (S)		Future SF (10)
North First Business Park	San Jose CA		5		190,636		87.2	%	$	21.37		N		S		1,359,364
3625-3635 Peterson Way	Santa Clara CA		1		218,366		100.0	%		21.84		N		S		413,690
145 Broadway	Cambridge, MA		1		79,616		100.0	%		46.38		N		CBD		406,432

Total Properties held for Redevelopment			7		488,618		95.0	%	$	25.88						2,179,486

(1)	A project is classified as Construction in Progress when construction or supply contracts have been signed, physical improvements have commenced or a lease has been signed and capitalize interest has commenced.

(2)	Represents the Company’s share. Includes income (loss) and interest carry.

(3)	Represents percentage leased as of January 27, 2017, including leases with future commencement dates and excluding residential units.

(4)	Represents the portion of the project that no longer qualifies for capitalization of interest in accordance with GAAP.

(5)

Under the joint venture agreement, if the project is funded with 100% equity, the Company has agreed to fund 50% of our partner’s equity requirement, structured as preferred equity. The Company will fund approximately $25.4 million at a rate of LIBOR plus 3.0% per annum and receive priority distributions from all distributions to our partner until the principal and interest are repaid. As of December 31, 2016, the Company has funded $4,280,731.

(6)	Includes approximately $17 million for overbuilding parking structure to support future development requirements and excludes $10 million of the purchase price for the site that is allocated to rights for future development in Reston Town Center.

(7)	Includes approximately 9,000 square feet of retail space at the Proto at Cambridge residential development, which is 0% leased.

(8)	Formerly the low-rise portion of 601 Lexington Avenue.

(9)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(10)	Incremental Future Square Footage is included in Approximate Developable Square Feet of Value Creation Pipeline - Owned Land Parcels on page 46.

LOGO

FOURTH QUARTER 2016

VALUE CREATION PIPELINE

as of December 31, 2016

Owned Land Parcels


	Approximate
	Developable
Location	Square Feet
San Jose, CA (1)		2,199,000
Reston, VA		1,160,000
Waltham, MA		805,000
Springfield, VA		800,000
Rockville, MD		759,000
Washington, DC (50% ownership)		520,000
Santa Clara, CA (1)		414,000
Marlborough, MA		400,000
Boston, MA (50% Ownership) (2)		320,000
Dulles, VA		310,000
Annapolis, MD (50% ownership)		300,000
Gaithersburg, MD		240,000
Andover, MA		110,000

		8,337,000

Land Purchase Options


	Approximate
	Developable
Location	Square Feet
Princeton, NJ		1,650,000
Boston, MA		1,300,000
Cambridge, MA (3)		940,000
Brooklyn, NY (50% ownership)		600,000
Boston, MA (50% ownership) (2)		525,000
Washington, DC (4)		482,000
Oakland, CA (5)		324,000
San Francisco, CA (6)		TBD

		5,821,000

(1)	Excludes the existing square footage related to in-service properties being held for future re-development included on page 45.

(2)

On November 28, 2016, the Company entered into a joint venture with the partner at its North Station development to acquire the air rights for the future development of a hotel property at the site. On November 28, 2016, the joint venture entered into a 99-year air rights lease with a third-party hotel developer/operator. In addition, on November 28, 2016, the Company and its partner entered into a joint venture to acquire the air rights for the future development of a residential tower at the site, consisting of an approximately 40-story residential tower totaling approximately 320,000 rentable square feet comprised of 440 apartment units. The remaining 525,000 rentable square feet represents the future office tower.

(3)

(4)

On December 6, 2016, the Company entered into a development agreement with George Washington University to pursue the development of a Class A office property with approximately 482,000 net rentable square feet on land parcels located in Washington, DC. The development agreement provides for the execution of a 75-year ground lease for the property upon completion of the entitlement process and relocation of existing tenants anticipated to occur in 2019. The Company has made a deposit of $15.0 million that will be credited against ground rent under the ground lease.

(5)

On October 24, 2016, the Company entered into an option agreement that will allow it to ground lease, with the future right to purchase, real property adjacent to the MacArthur BART station located in Oakland, California, that could support the development of a 400-unit residential building and supporting retail space.

(6)	The Company holds an Option Agreement with the owner of a real estate parcel located at 425 Fourth Street, San Francisco, California. The Agreement gives the Company the exclusive option to purchase the property.

LOGO

FOURTH QUARTER 2016

DEFINITIONS

This section contains definitions of certain non-GAAP financial measures and other terms that the Company uses in this supplemental package and, where applicable, the reasons why management believes these non-GAAP financial measures provide useful information to investors about the Company’s financial condition and results of operations and the other purposes for which management uses the measures. Additional detail can be found in the Company’s most recent annual report on Form 10-K and quarterly report on Form 10-Q, as well as other documents filed with or furnished to the SEC from time to time.

The Company also presents certain of these measures (1) on a “Combined” basis, which is defined as the consolidated amount, plus the Company’s share of the measure from its unconsolidated joint ventures (calculated based upon the Company’s percentage ownership interest), and (2) showing “BXP’s Share” of the Combined amount, which is defined as the Combined amount, minus the Company’s partners’ share of the amount from its consolidated joint ventures (calculated based upon the partners’ percentage ownership interests). Management believes that the “Combined” measures provide useful information to investors regarding the Company’s financial condition and/or results of operations because they include the Company’s share of the applicable amount from unconsolidated joint ventures and, for “BXP’s Share” of the Combined amount, exclude the Company’s partners’ share from consolidated joint ventures, in each case presented on the same basis. The Company has several significant joint ventures and presenting various financial measures in this manner can help investors better understand the Company’s financial condition and/or results of operations after taking into account its economic interest in these joint ventures. The Company cautions investors that the ownership percentages used in calculating “Combined” amounts and “BXP’s Share” of any Combined amounts may not completely and accurately depict all of the legal and economic implications of holding an interest in a consolidated or unconsolidated joint venture. For example, in addition to partners’ interests in profits and capital, partnership agreements vary in the allocation of rights regarding decision making (both routine and major decisions), distributions, transferability of interests, liquidations, etc. As a result, presentations of measures on a Combined basis and showing BXP’s Share of the Combined amount should be considered with and as a supplement to the Company’s financial information presented in accordance with GAAP.

Annualized Rental Obligations

Annualized Rental Obligations is defined as Rental Obligations at the end of the reporting period, multiplied by twelve (12).

Average Economic Occupancy

Average Economic Occupancy is defined as total possible revenue less vacancy loss as a percentage of total possible revenue. Total possible revenue is determined by valuing average occupied units at contract rates and average vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant units at their Market Rents, Average Economic Occupancy takes into account the fact that units of different sizes and locations within a residential property have different economic impacts on a residential property’s total possible gross revenue.

Average Monthly Rental Rates

Average Rental Rates are calculated by the Company as rental revenue in accordance with GAAP, divided by the weighted monthly average number of occupied units.

Average Physical Occupancy

Average Physical Occupancy is defined as the average number of occupied units divided by the total number of units, expressed as a percentage.

Debt to Market Capitalization Ratio

Consolidated Debt to Consolidated Market Capitalization Ratio is defined as consolidated debt as a percentage of the market value of the Company’s outstanding equity securities plus the Company’s consolidated debt, and it is a measure of leverage commonly used by analysts in the REIT sector. Consolidated Market Capitalization is the sum of (A) the Company’s consolidated debt plus (B) the market value of the Company’s outstanding equity securities calculated using the closing price per share of common stock of the Company, as reported by the New York Stock Exchange, multiplied by the sum of (1) outstanding shares of common stock of the Company, (2) outstanding common units of limited partnership interest in Boston Properties Limited Partnership (excluding common units held by the Company), (3) common units issuable upon conversion of all outstanding LTIP Units, assuming all conditions have been met for the conversion of the LTIP Units, (4) on and after February 6, 2015, which was the end of the performance period for 2012 OPP Units and thus the date earned, common units issuable upon conversion of 2012 OPP Units that were issued in the form of LTIP Units and (5) on and after February 4, 2016, which was the end of the performance period for 2013 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2013 MYLTIP Units that were issued in the form of LTIP Units plus (C) outstanding shares of 5.25% Series B Cumulative Redeemable Preferred Stock multiplied by their fixed liquidation preference of $2,500 per share. The calculation of Consolidated Market Capitalization does not include LTIP Units issued in the form of MYLTIP Awards unless and until certain performance thresholds are achieved and they are earned. Because their three-year performance periods have not yet ended, 2014, 2015 and 2016 MYLTIP Units are not included. The Company also presents BXP’s Share of Combined Market Capitalization, which is calculated in a similar manner, except that BXP’s Share of Combined Debt is utilized instead of the Company’s consolidated debt in both the numerator and the denominator. The Company presents these ratios because its degree of leverage could affect its ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes and because different investors and lenders consider one or both of these ratios. Investors should understand that these ratios are, in part, a function of the market price of the common stock of the Company, and as such will fluctuate with changes in such price and does not necessarily reflect the Company’s capacity to incur additional debt to finance its activities or its ability to manage its existing debt obligations. However, for a company like Boston Properties, Inc., whose assets are primarily income-producing real estate, these ratios may provide investors with an alternate indication of leverage, so long they are 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 the Company’s outstanding indebtedness.

Funds Available for Distribution (FAD) and FAD Payout Ratio

In addition to FFO, the Company presents Funds Available for Distribution to common shareholders and common unitholders (FAD), which is a non-GAAP financial measure that is calculated by (1) adding to FFO lease transaction costs that qualify as rent inducements, non-real estate depreciation, non-cash losses (gains) from early extinguishments of debt, stock-based compensation expense, partners’ share of consolidated and unconsolidated joint venture 2nd generation tenant improvement and leasing commissions (included in the period in which the lease commences) and unearned portion of capitalized fees, (2) eliminating the effects of straight-line rent, straight-line ground rent expense adjustment, fair value interest adjustment and fair value lease revenue, and (3) subtracting maintenance capital expenditures, hotel improvements, equipment upgrades and replacements, 2nd generation tenant improvement and leasing commissions (included in the period in which the lease commences), non-cash termination income adjustment (fair value lease amounts) and impairments of non-depreciable real estate. The Company believes that the presentation of FAD provides useful information to investors regarding the Company’s results of operations because FAD provides supplemental information regarding the Company’s operating performance that would not otherwise be available and may be useful to investors in assessing the Company’s operating performance. Additionally, although the Company does not consider FAD to be a liquidity measure, as it does not make adjustments to reflect changes in working capital or the actual timing of the payment of income or expense items that are accrued in the period, the Company believes that FAD may provide investors with useful supplemental information regarding the Company’s ability to generate cash from its operating performance and the impact of the Company’s operating performance on its ability to make distributions to its shareholders. Furthermore, the Company believes that FAD is frequently used by analysts, investors and other interested parties in the evaluation of its performance as a REIT and, as a result, by presenting FAD the Company is assisting these parties in their evaluation. FAD should not be considered as a substitute for net income (loss) attributable to Boston Properties, Inc.‘s common shareholders determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.

FAD Payout Ratio is defined as distributions to common shareholders and unitholders (excluding any special distributions) divided by FAD.

LOGO

FOURTH QUARTER 2016

DEFINITIONS (continued)

Funds from Operations (FFO)

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”), the Company calculates Funds from Operations, or “FFO,” by adjusting net income (loss) attributable to Boston Properties, Inc. common shareholders (computed in accordance with GAAP) for gains (or losses) from sales of properties, impairment losses on depreciable real estate consolidated on the Company’s balance sheet, impairment losses on its investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures, real estate-related depreciation and amortization, and the Company’s share of income (loss) from unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure, but the Company believes the presentation of FFO, combined with the presentation of required GAAP financial measures, has improved the understanding of operating results of REITs among the investing public and has helped make comparisons of REIT operating results more meaningful. Management generally considers FFO and FFO per share to be useful measures for understanding and comparing the Company’s operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO per share can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies.

The Company’s 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 order to facilitate a clear understanding of the Company’s operating results, FFO should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in the Company’s consolidated financial statements. FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc. common shareholders (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.

In-Service Properties

The Company treats a property as being “in-service” upon the earlier of (1) lease-up and completion of tenant improvements or (2) one year after cessation of major construction activity as determined under GAAP. The determination as to when an entire property should be treated as “in-service” involves a degree of judgment and is made by management based on the relevant facts and circumstances of the particular property. For portfolio operating and occupancy statistics, the Company specifies a single date for treating a property as “in-service,” which is generally later than the date the property is partially placed in-service under GAAP. Under GAAP, a property may be placed in-service in stages as construction is completed and the property is held available for occupancy. In accordance with GAAP, when a portion of a property has been substantially completed and either occupied or held available for occupancy, the Company ceases capitalizing costs on that portion, even though it may not treat the property as being “in-service,” and continues to capitalize only those costs associated with the portion still under construction. In-service properties include properties held by the Company’s unconsolidated joint ventures.

Market Rents

Market Rents used by the Company in calculating Average Economic Occupancy are based on the current market rates set by the managers of the Company’s residential properties based on their experience in renting their residential property’s units and publicly available market data. Trends in market rents for a region as reported by others could vary. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.

Net Operating Income (NOI)

Net operating income (NOI) is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc. common shareholders, the most directly comparable GAAP financial measure, plus (1) preferred dividends, net income attributable to noncontrolling interests, corporate general and administrative expense, transaction costs, depreciation and amortization, interest expense and losses from early extinguishments of debt, less (2) gains on sales of real estate, development and management services income, income from unconsolidated joint ventures, gain on sale of investment in unconsolidated joint venture, interest and other income and gains from investments in securities. In some cases the Company also presents (1) NOI – cash basis, which is NOI after eliminating the effects of straight-lining of rent, fair value lease revenue, ground rent expense, and lease transaction costs that qualify as rent inducements in accordance with GAAP and (2) NOI and NOI – cash basis, in each case excluding termination income.

The Company uses these measures internally as performance measures and believes they provide useful information to investors regarding the Company’s results of operations and financial condition because, when compared across periods, they reflect the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. Similarly, interest expense may be incurred at the property level even though the financing proceeds may be used at the corporate level (e.g., used for other investment activity). In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance measures at the property level. Presenting NOI – cash allows investors to compare NOI performance across periods without taking into account the effect of certain non-cash rental revenues and ground rent expenses. Similar to depreciation and amortization, fair value lease revenues, because of historical cost accounting, may distort operating performance measures at the property level. Additionally, presenting NOI excluding the impact of the straight-lining of rent provides investors with an alternative view of operating performance at the property level that more closely reflects net cash generated at the property level on an unleveraged basis. Presenting NOI measures that exclude termination income provides investors with additional information regarding operating performance at a property level that allows them to compare operating performance between periods without taking into account termination income, which can distort the results for any given period because they generally represent multiple months or years of a tenant’s rental obligations that are paid in a lump sum in connection with a negotiated early termination of the tenant’s lease and are not reflective of the core ongoing operating performance of the Company’s properties.

Rental Obligations

Rental Obligations is defined as the contractual base rents (but excluding percentage rent) and budgeted reimbursements from tenants under existing leases. These amounts exclude rent abatements.

Same Properties

In the Company’s analysis of NOI, particularly to make comparisons of NOI between periods meaningful, it is important to provide information for properties that were in-service and owned by the Company throughout each period presented. The Company refers to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by the Company through the end of the latest period presented as “Same Properties.” “Same Properties” therefore exclude properties placed in-service, acquired, repositioned or in development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented. Accordingly, it takes at least one year and one quarter after a property is acquired or treated as “in-service” for that property to be included in “Same Properties.” Pages 27-29 indicate by footnote the “In-Service Properties” that are not included in “Same Properties.”

EX-99.2

Exhibit 99.2

LOGO

800 Boylston Street

Boston, MA 02199

AT THE COMPANY

Michael LaBelle

Executive Vice President

Chief Financial Officer

617.236.3352

Arista Joyner

Investor Relations Manager

617.236.3343

BOSTON PROPERTIES ANNOUNCES

FOURTH QUARTER 2016 RESULTS

BOSTON, MA, January 31, 2017 - Boston Properties, Inc. (NYSE: BXP), a real estate investment trust, reported results today for the fourth quarter ended December 31, 2016.

Results for the quarter ended December 31, 2016

Net income attributable to common shareholders was $145.5 million for the quarter ended December 31, 2016, compared to $137.9 million for the quarter ended December 31, 2015. Net income attributable to common shareholders per share (EPS) for the quarter ended December 31, 2016 was $0.95 basic and $0.94 on a diluted basis. This compares to EPS for the quarter ended December 31, 2015 of $0.90 basic and $0.90 on a diluted basis. Net income attributable to common shareholders for the quarter ended December 31, 2016 includes a gain on sale of investment in unconsolidated joint venture of approximately $59.4 million, or $0.35 per share basic and $0.34 per share on a diluted basis. Net income attributable to common shareholders for the quarter ended December 31, 2015 includes gains on sales of real estate aggregating approximately $81.3 million, or $0.48 per share basic and $0.48 per share on a diluted basis. In addition, net income attributable to common shareholders for the quarter ended December 31, 2015 includes a loss from early extinguishment of debt totaling approximately $(22.0) million, or $(0.13) per share basic and $(0.13) per share on a diluted basis, related to the defeasance of the mortgage loan collateralized by the Company’s 100 & 200 Clarendon Street property. The weighted-average number of basic and diluted shares outstanding totaled approximately 153,814,000 and 153,991,000, respectively, for the quarter ended December 31, 2016 and 153,602,000 and 153,897,000, respectively, for the quarter ended December 31, 2015.

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Funds from Operations (FFO) for the quarter ended December 31, 2016 were $236.9 million, or $1.54 per share basic and $1.54 per share diluted. This compares to FFO for the quarter ended December 31, 2015 of $197.3 million, or $1.28 per share basic and $1.28 per share diluted.

The Company’s reported FFO of $1.54 per share diluted was greater than the mid-point of the guidance previously provided of $1.49-$1.51 per share diluted primarily due to better than expected portfolio operations of $0.02 per share and fee income from tenant services, leasing commissions and development services of $0.02 per share.

Results for the year ended December 31, 2016

Net income attributable to common shareholders was $500.6 million for the year ended December 31, 2016, compared to $572.6 million for the year ended December 31, 2015. EPS for the year ended December 31, 2016 was $3.25 basic and $3.25 on a diluted basis. This compares to EPS for the year ended December 31, 2015 of $3.73 basic and $3.72 on a diluted basis. The weighted-average number of basic and diluted shares outstanding totaled approximately 153,715,000 and 153,977,000, respectively, for the year ended December 31, 2016 and 153,471,000 and 153,844,000, respectively, for the year ended December 31, 2015.

FFO for the year ended December 31, 2016 was $927.7 million, or $6.04 per share basic and $6.03 per share diluted. This compares to FFO for the year ended December 31, 2015 of $823.7 million, or $5.37 per share basic and $5.36 per share diluted.

The reported results are unaudited and there can be no assurance that these reported results will not vary from the final information for the quarter and year ended December 31, 2016. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made.

As of December 31, 2016, the Company’s portfolio consisted of 174 properties aggregating approximately 47.7 million square feet, including eight properties under construction/redevelopment totaling approximately 4.0 million square feet. The overall percentage of leased space for the 163 properties in service (excluding the Company’s two residential properties and hotel) as of December 31, 2016 was 90.2%.

Significant events during the fourth quarter included:

•

On October 1, 2016, a joint venture in which the Company has a 50% interest completed and fully placed in-service 1265 Main Street, a Class A office project with approximately 115,000 net rentable square feet located in Waltham, Massachusetts. The property is 100% leased. On December 8, 2016, the joint venture obtained mortgage financing totaling $40.4 million collateralized by the property. The mortgage loan bears interest at a fixed rate of 3.77% per annum and matures on January 1, 2032.

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•

On October 20, 2016, the Company and its partner in the unconsolidated joint venture that owns Metropolitan Square located in Washington, DC, completed the sale of an 80% interest in the joint venture for a gross sale price of approximately $282.4 million, including the assumption by the buyer of its pro rata share of the mortgage loan collateralized by the property totaling approximately $133.4 million and certain unfunded leasing costs totaling approximately $14.2 million. Net cash proceeds to the Company totaled approximately $58.2 million, resulting in a gain on sale of investment totaling approximately $59.4 million. Prior to the sale, the Company owned a 51% interest and its partner owned a 49% interest in the joint venture. Following the sale, the Company continues to own a 20% interest in the joint venture with the buyer owning the remaining 80%. Metropolitan Square is an approximately 607,000 net rentable square foot Class A office property.

•

On November 7, 2016, the Company entered into a 15-year lease with a tenant for approximately 476,500 net rentable square feet of Class A office space in a build-to-suit development project to be located at the Company’s 145 Broadway property at Kendall Center in Cambridge, Massachusetts. 145 Broadway currently consists of an approximately 80,000 net rentable square foot Class A office property that will be demolished and developed into an approximately 486,000 net rentable square foot Class A office property, including approximately 9,500 net rentable square feet of retail space. The commencement of the redevelopment project is subject to the receipt of the remaining necessary approvals, and the Company currently expects to begin the project in the second quarter of 2017 with the relocation of an existing tenant to another property within the Company’s portfolio. The Company expects the building will be available for occupancy by the new tenant during the fourth quarter of 2019. There can be no assurance that the project will commence or that the building will be available for occupancy on the anticipated schedule or at all.

•

On November 15, 2016, a joint venture in which the Company has a 50% interest extended the loan collateralized by its Annapolis Junction Building Six property. The extended loan has a total commitment amount of approximately $15.4 million, bears interest at a variable rate equal to LIBOR plus 2.25% per annum and matures on November 17, 2018. Annapolis Junction Building Six is a Class A office property with approximately 119,000 net rentable square feet located in Annapolis, Maryland.

–more–

•

On November 28, 2016, the Company entered into a joint venture with the partner at its North Station development to acquire the air rights for the future development of a hotel property at the site. The joint venture partner contributed an air rights parcel and improvements, with a fair value of approximately $7.4 million, for its initial 50% interest in the joint venture. The Company contributed improvements totaling approximately $0.7 million and will contribute cash totaling approximately $6.7 million for its initial 50% interest. On November 28, 2016, the joint venture entered into a 99-year air rights lease with a third-party hotel developer/operator. In addition, on November 28, 2016, the Company and its partner entered into a joint venture to acquire the air rights for the future development of a residential tower at the site, consisting of an approximately 40-story residential tower totaling approximately 320,000 rentable square feet comprised of 440 apartment units. The joint venture partner contributed an air rights parcel, with a fair value of approximately $24.2 million, for its initial 50% interest in the joint venture. The Company contributed improvements totaling approximately $17.7 million and will contribute cash totaling approximately $6.5 million for its initial 50% interest.

•

On December 7, 2016, joint ventures in each of which the Company has a 50% interest combined and extended mortgage loans collateralized by Annapolis Junction Building Seven and Building Eight. The new mortgage loan has a total commitment amount of approximately $42.0 million, with an initial balance totaling approximately $36.7 million, bears interest at a variable rate equal to LIBOR plus 2.35% per annum and matures on December 7, 2019, with three, one-year extension options, subject to certain conditions. Annapolis Junction Building Seven and Building Eight are Class A office properties with approximately 127,000 and 126,000 net rentable square feet, respectively, located in Annapolis, Maryland.

•

On December 19, 2016, a joint venture in which the Company has a 50% interest obtained construction financing with a total commitment of $250.0 million collateralized by its Dock 72 development project. The construction financing bears interest at a variable rate equal to LIBOR plus 2.25% per annum and matures on December 18, 2020, with two, one-year extension options, subject to certain conditions. There have been no loan draws to date. Dock 72 is a Class A office project with approximately 670,000 net rentable square feet located in Brooklyn, New York.

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•

On December 19, 2016, the Company declared a regular quarterly cash dividend of $0.75 per share of common stock for the period from October 1, 2016 to December 31, 2016, payable on January 30, 2017 to shareholders of record as of the close of business on December 30, 2016. This represents an increase of approximately 15.4%, or $0.10 per share, over the most recent quarterly cash dividend of $0.65 per share.

•

On December 29, 2016, the Company commenced the redevelopment of 191 Spring Street, a Class A office project with approximately 160,000 net rentable square feet located in Lexington, Massachusetts.

Transactions completed subsequent to December 31, 2016:

•

On January 25, 2017, the Company’s Compensation Committee approved the 2017 Multi-Year, Long-Term Incentive Program (the “2017 MYLTIP”) as a performance-based component of the Company’s overall compensation program. Under the Financial Accounting Standards Board’s Accounting Standards Codification 718 “Compensation - Stock Compensation,” the 2017 MYLTIP has an aggregate value of approximately $17.7 million, which will generally be amortized into earnings over the four-year plan period under the graded vesting method.

EPS and FFO per Share Guidance:

The Company’s guidance for the first quarter and full year 2017 for EPS (diluted) and FFO per share (diluted) is set forth and reconciled below. Except as described below, the estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in this release and otherwise referenced during the conference call referred to below. The estimates do not include possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions, other possible capital markets activity or possible future impairment charges. EPS estimates may be subject to fluctuations as a result of several factors, including changes in the recognition of depreciation and amortization expense and any gains or losses associated with disposition activity. The Company is not able to assess at this time the potential impact of these factors on projected EPS. By definition, FFO does not include real estate-related depreciation and amortization, impairment losses on depreciable real estate or gains or losses associated with disposition activities. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth below.

EPS Guidance:

As shown below, the Company has updated its projected guidance for EPS (diluted) for the full year 2017 to $2.56 - $2.66 per share from $2.58 - $2.76 per share. This is a decrease of approximately ($0.06) per share at the mid-point of the Company’s guidance primarily consisting of a ($0.10) per share increase in depreciation and amortization expense, a ($0.02) per share increase in demolition costs and ($0.01) per share increase in G & A expense. These items are partially offset by (1) the net impact from the early termination of a tenant at one of our consolidated joint ventures of $0.03 per share, (2) $0.02 per share of improved portfolio performance and (3) $0.02 per share of additional fee income.

FFO per Share Guidance:

As shown below, the Company has updated its projected guidance for FFO per share (diluted) for the full year 2017 to $6.13 - $6.23 per share from $6.05 - $6.23 per share. This is an increase of approximately $0.04 per share at the mid-point of the Company’s guidance primarily consisting of (1) the net impact from the early termination of a tenant at one of our consolidated joint ventures of $0.03 per share, (2) $0.02 per share of improved portfolio performance and (3) $0.02 per share of additional fee income. These items are partially offset by a ($0.02) per share increase in demolition costs and ($0.01) per share increase in G & A expense.

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	First Quarter 2017					Full Year 2017
	Low			High		Low			High
Projected EPS (diluted)	$	0.55	–	$	0.57	$	2.56	–	$	2.69
Add:
Projected Company Share of Real Estate Depreciation and Amortization		0.92	–		0.92		3.57	–		3.57
Less:
Projected Company Share of Gains on Sales of Real Estate		—	–		—		—	–		—

Projected FFO per Share (diluted)	$	1.47	–	$	1.49	$	6.13	–	$	6.26

Boston Properties will host a conference call on Wednesday, February 1, 2017 at 10:00 AM Eastern Time, open to the general public, to discuss the fourth quarter and full year 2016 results, the 2017 projections and related assumptions, and other related matters that may be of interest to investors. The number to call for this interactive teleconference is (877) 706-4503 (Domestic) or (281) 913-8731 (International) and entering the passcode 23631735. A replay of the conference call will be available through February 17, 2017, by dialing (855) 859-2056 (Domestic) or (404) 537-3406 (International) and entering the passcode 23631735. There will also be a live audio webcast of the call which may be accessed on the Company’s website at www.bostonproperties.com in the Investor Relations section. Shortly after the call, a replay of the webcast will be available in the Investor Relations section of the Company’s website and archived for up to twelve months following the call.

Additionally, a copy of Boston Properties’ fourth quarter 2016 “Supplemental Operating and Financial Data” and this press release are available in the Investor Relations section of the Company’s website at www.bostonproperties.com.

Boston Properties is a fully integrated real estate investment trust that develops, redevelops, acquires, manages, operates and owns a diverse portfolio of primarily Class A office space totaling 47.7 million square feet and consisting of 164 office properties (including six properties under construction), five retail properties, four residential properties (including two properties under construction) and one hotel. The Company is one of the largest owners and developers of Class A office properties in the United States, concentrated in five markets - Boston, Los Angeles, New York, San Francisco and Washington, DC.

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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 “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects” 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 Company’s ability to satisfy the closing conditions to the pending transactions described above, the Company’s ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the costs and availability of financing, the effectiveness of our interest rate hedging contracts, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Company’s accounting policies and 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. Boston Properties does not undertake a duty to update or revise any forward-looking statement, including its guidance for the first quarter and full fiscal year 2017, whether as a result of new information, future events or otherwise.

Financial tables follow.

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BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)
	December 31, 2016			December 31, 2015
	(in thousands, except for share and par value amounts)
ASSETS
Real estate, at cost	$	18,862,648		$	18,465,405
Construction in progress		1,037,959			763,935
Land held for future development		246,656			252,195
Less: accumulated depreciation		(4,223,743	)		(3,925,894	)

Total real estate		15,923,520			15,555,641
Cash and cash equivalents		356,914			723,718
Cash held in escrows		63,174			73,790
Investments in securities		23,814			20,380
Tenant and other receivables, net		92,548			97,865
Accrued rental income, net		799,138			754,883
Deferred charges, net		685,795			704,867
Prepaid expenses and other assets		129,666			185,118
Investments in unconsolidated joint ventures		775,198			235,224

Total assets	$	18,849,767		$	18,351,486

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,063,087		$	3,435,242
Unsecured senior notes, net		7,245,953			5,264,819
Unsecured line of credit		—			—
Mezzanine notes payable		307,093			308,482
Outside members’ notes payable		180,000			180,000
Accounts payable and accrued expenses		298,524			274,709
Dividends and distributions payable		130,308			327,320
Accrued interest payable		243,933			190,386
Other liabilities		450,821			483,601

Total liabilities		10,919,719			10,464,559

Commitments and contingencies		—			—

Equity:
Stockholders’ equity attributable to Boston Properties, Inc.:
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding		—			—
Preferred stock, $0.01 par value, 50,000,000 shares authorized; 5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding at December 31, 2016 and December 31, 2015		200,000			200,000
Common stock, $0.01 par value, 250,000,000 shares authorized, 153,869,075 and 153,658,866 issued and 153,790,175 and 153,579,966 outstanding at December 31, 2016 and December 31, 2015, respectively		1,538			1,536
Additional paid-in capital		6,333,427			6,305,687
Dividends in excess of earnings		(695,377	)		(780,952	)
Treasury common stock at cost, 78,900 shares at December 31, 2016 and December 31, 2015		(2,722	)		(2,722	)
Accumulated other comprehensive loss		(52,251	)		(14,114	)

Total stockholders’ equity attributable to Boston Properties, Inc.		5,784,615			5,709,435
Noncontrolling interests:
Common units of the Operating Partnership		614,786			603,092
Property partnerships		1,530,647			1,574,400

Total equity		7,930,048			7,886,927

Total liabilities and equity	$	18,849,767		$	18,351,486

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BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Three months ended December 31,						Year ended December 31,
	2016			2015			2016			2015
	(in thousands, except for per share amounts)
Revenue
Rental
Base rent	$	498,941		$	493,141		$	2,017,767		$	1,964,732
Recoveries from tenants		91,123			88,576			358,975			355,508
Parking and other		25,334			25,132			100,910			101,981

Total rental revenue		615,398			606,849			2,477,652			2,422,221
Hotel revenue		10,965			10,939			44,884			46,046
Development and management services		9,698			6,452			28,284			22,554

Total revenue		636,061			624,240			2,550,820			2,490,821

Expenses
Operating
Rental		224,098			216,642			889,768			872,252
Hotel		7,736			7,888			31,466			32,084
General and administrative		25,293			24,300			105,229			96,319
Transaction costs		1,200			470			2,387			1,259
Impairment loss		—			—			1,783			—
Depreciation and amortization		179,908			164,460			696,279			639,542

Total expenses		438,235			413,760			1,726,912			1,641,456

Operating income		197,826			210,480			823,908			849,365
Other income (expense)
Income from unconsolidated joint ventures		2,585			2,211			8,074			22,770
Gain on sale of investment in unconsolidated joint venture		59,370			—			59,370			—
Interest and other income		573			440			7,230			6,777
Gains (losses) from investments in securities		560			493			2,273			(653	)
Interest expense		(97,896	)		(106,178	)		(412,849	)		(432,196	)
Losses from early extinguishments of debt		—			(22,040	)		(371	)		(22,040	)
Losses from interest rate contracts		—			—			(140	)		—

Income before gains on sales of real estate		163,018			85,406			487,495			424,023
Gains on sales of real estate		—			81,332			80,606			375,895

Net income		163,018			166,738			568,101			799,918
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships		2,121			(10,143	)		2,068			(149,855	)
Noncontrolling interest—redeemable preferred units of the Operating Partnership		—			—			—			(6	)
Noncontrolling interest—common units of the Operating Partnership		(16,905	)		(16,098	)		(59,067	)		(66,951	)

Net income attributable to Boston Properties, Inc.		148,234			140,497			511,102			583,106
Preferred dividends		(2,704	)		(2,646	)		(10,500	)		(10,500	)

Net income attributable to Boston Properties, Inc. common shareholders	$	145,530		$	137,851		$	500,602		$	572,606

Basic earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income	$	0.95		$	0.90		$	3.25		$	3.73

Weighted average number of common shares outstanding		153,814			153,602			153,715			153,471

Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income	$	0.94		$	0.90		$	3.25		$	3.72

Weighted average number of common and common equivalent shares outstanding		153,991			153,897			153,977			153,844

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BOSTON PROPERTIES, INC. FUNDS FROM OPERATIONS (1) (Unaudited)
	Three months ended December 31,						Year ended December 31,
	2016			2015			2016			2015
	(in thousands, except for per share amounts)
Net income attributable to Boston Properties, Inc. common shareholders	$	145,530		$	137,851		$	500,602		$	572,606
Add:
Preferred dividends		2,704			2,646			10,500			10,500
Noncontrolling interest - common units of the Operating Partnership		16,905			16,098			59,067			66,951
Noncontrolling interest - redeemable preferred units of the Operating Partnership		—			—			—			6
Noncontrolling interests in property partnerships		(2,121	)		10,143			(2,068	)		149,855
Less:
Gains on sales of real estate		—			81,332			80,606			375,895

Income before gains on sales of real estate		163,018			85,406			487,495			424,023
Add:
Depreciation and amortization		179,908			164,460			696,279			639,542
Noncontrolling interests in property partnerships’ share of depreciation and amortization		(27,256	)		(20,685	)		(107,087	)		(90,832	)
Company’s share of depreciation and amortization from unconsolidated joint ventures		8,692			3,994			26,934			6,556
Corporate-related depreciation and amortization		(449	)		(486	)		(1,568	)		(1,503	)
Less:
Gain on sale of investment in unconsolidated joint venture		59,370			—			59,370			—
Noncontrolling interests in property partnerships (2)		(2,121	)		10,143			(2,068	)		48,737
Noncontrolling interest - redeemable preferred units of the Operating Partnership		—			—			—			6
Preferred dividends		2,704			2,646			10,500			10,500

Funds from operations (FFO) attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.)		263,960			219,900			1,034,251			918,543
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of funds from operations		27,062			22,561			106,504			94,828

Funds from operations attributable to Boston Properties, Inc. common shareholders	$	236,898		$	197,339		$	927,747		$	823,715

Boston Properties, Inc.’s percentage share of funds from operations - basic		89.75	%		89.74	%		89.70	%		89.68	%

Weighted average shares outstanding - basic		153,814			153,602			153,715			153,471

FFO per share basic	$	1.54		$	1.28		$	6.04		$	5.37

Weighted average shares outstanding - diluted		153,991			153,897			153,977			153,844

FFO per share diluted	$	1.54		$	1.28		$	6.03		$	5.36

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(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) attributable to Boston Properties, Inc. common shareholders (computed in accordance with GAAP) for gains (or losses) from sales of properties, impairment losses on depreciable real estate consolidated on our balance sheet, impairment losses on our investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures, real estate-related depreciation and amortization, and our share of income (loss) from unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure, but we believe the presentation of FFO, combined with the presentation of required GAAP financial measures, has improved the understanding of operating results of REITs among the investing public and has helped make comparisons of REIT operating results more meaningful. Management generally considers FFO and FFO per share to be useful measures for understanding and comparing our operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO per share can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other 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 order to facilitate a clear understanding of the Company’s operating results, FFO should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in the Company’s consolidated financial statements. FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc. common shareholders (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.

(2)	For the year ended December 31, 2015, excludes the noncontrolling interests in property partnerships’ share of a gain on sale of real estate totaling approximately $101.1 million.

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BOSTON PROPERTIES, INC. PORTFOLIO LEASING PERCENTAGES
	% Leased by Location
	December 31, 2016			December 31, 2015
Boston		90.7	%		90.6	%
New York		90.2	%		91.5	%
San Francisco and Los Angeles		89.8	%		93.8	%
Washington, DC		89.9	%		91.0	%

Total Portfolio		90.2	%		91.4	%

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