Document
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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): October 29, 2019
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))





Securities registered pursuant to Section 12(b) of the Act:
Registrant
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Boston Properties, Inc.
Common Stock, par value $0.01 per share
BXP
New York Stock Exchange
Boston Properties, Inc.
Depository Shares Each Representing 1/100th of a share
BXP PRB
New York Stock Exchange
of 5.25% Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
  
Boston Properties, Inc.:
Emerging growth company

Boston Properties Limited Partnership:
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Boston Properties, Inc. ☐         Boston Properties Limited Partnership ☐









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 October 29, 2019, Boston Properties, Inc. (the “Company”), the general partner of Boston Properties Limited Partnership, issued a press release announcing its financial results for the third quarter of 2019. 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
 
*99.2
 
*101.SCH
 
Inline XBRL Taxonomy Extension Schema Document.
*101.CAL
 
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
*101.LAB
 
Inline XBRL Taxonomy Extension Label Linkbase Document.
*101.PRE
 
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
*101.DEF
 
Inline XBRL Taxonomy Extension Definition Linkbase Document.
*104
 
Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*).
______________
* 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: October 29, 2019





Exhibit

Exhibit 99.1


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Supplemental Operating and Financial Data
for the Quarter Ended September 30, 2019




THE COMPANY

Boston Properties, Inc. (NYSE: BXP) (“Boston Properties,” “BXP” or the “Company”) is the largest publicly-traded developer, owner and manager of Class A office properties in the United States, concentrated in five markets -  Boston, Los Angeles, New York, San Francisco and Washington, DC. The Company is a fully integrated real estate company, organized as a real estate investment trust (REIT), that develops, manages, operates, acquires and owns a diverse portfolio of primarily Class A office space. The Company’s complete portfolio totals 51.9 million square feet and 196 properties, including 13 properties under construction/redevelopment, and consists of 177 office properties, 12 retail properties, six residential properties 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 of developing premium Central Business District (CBD) office buildings, successful mixed-use complexes, suburban office centers and build-to-suit projects for a diverse array of creditworthy tenants. Boston Properties actively works to promote its growth and operations in a sustainable and responsible manner.  The Company has earned seven consecutive Global Real Estate Sustainability Benchmark (GRESB) Green Stars and the highest GRESB 5-star Rating. Boston Properties, an S&P 500 Company, was founded in 1970 by Mortimer B. Zuckerman and Edward H. Linde and became a public company in 1997.


FORWARD-LOOKING STATEMENTS

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,” “budgeted,” “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 of issuance of this report 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.


NON-GAAP FINANCIAL MEASURES

This Supplemental package 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 provided within this Supplemental package. 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 in the Definitions section of this Supplemental starting on page 55.

The Company also presents “BXP’s Share” of certain of these measures, which are non-GAAP financial measures that are calculated as the consolidated amount calculated in accordance with GAAP, plus the Company’s share of the amount from the Company’s unconsolidated joint ventures (calculated based upon the Company’s percentage ownership interest and, in some cases, after priority allocations), minus the Company’s partners’ share of the amount from the Company’s consolidated joint ventures (calculated based upon the partners’ percentage ownership interests and, in some cases, after priority allocations, income allocation to private REIT shareholders and their share of fees due to the Company).  Management believes that presenting “BXP’s Share” of these measures provides useful information to investors regarding the Company’s financial condition and/or results of operations because the Company has several significant joint ventures and in some cases, the Company exercises significant influence over, but does not control, the joint venture, in which case GAAP requires that the Company account for the joint venture entity using the equity method of accounting and the Company does not consolidate it for financial reporting purposes. In other cases, GAAP requires that the Company consolidate the venture even though the Company’s partner(s) owns a significant percentage interest. As a result, management believes that presenting BXP Share of 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 true economic interest in these joint ventures.  The Company cautions investors that the ownership percentages used in calculating “BXP’s Share” of these measures 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, venture agreements vary in the allocation of rights regarding decision making (both routine and major decisions), distributions, transferability of interests, financings and guarantees, liquidations and other matters. As a result, presentations of “BXP’s Share” of a financial measure should not be considered a substitute for, and should only be considered together with and as a supplement to, the Company’s financial information presented in accordance with GAAP. Unless noted otherwise, reconciliations of “BXP’s Share” of these financial measures can be found in the Reconciliations section of this Supplemental package starting on page 59.


GENERAL INFORMATION
Corporate Headquarters
Trading Symbol
Investor Relations
Inquiries
800 Boylston Street
BXP
Boston Properties, Inc.
Inquiries should be directed to
Suite 1900
 
800 Boylston Street, Suite 1900
Michael E. LaBelle
Boston, MA 02199
Stock Exchange Listing
Boston, MA 02199
Executive Vice President, Chief Financial Officer
www.bxp.com
New York Stock Exchange
investors.bxp.com
at 617.236.3352 or
(t) 617.236.3300
 
investorrelations@bxp.com
mlabelle@bxp.com
(f) 617.236.3311
 
(t) 617.236.3822
 
 
 
(f) 617.236.3311
Sara Buda
 
 
 
Vice President, Investor Relations
 
 
 
at 617.236.3429 or
 
 
 
sbuda@bxp.com

(Cover photo: Rendering of 145 Broadway, Cambridge, MA)




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Q3 2019
Table of contents
 
Page
OVERVIEW
 
Company Profile
Guidance and Assumptions
 
 
FINANCIAL INFORMATION
 
Financial Highlights
Consolidated Balance Sheets
Consolidated Income Statements
Funds From Operations (FFO)
Funds Available for Distribution (FAD)
Net Operating Income (NOI)
Same Property Net Operating Income (NOI) by Reportable Segment
Capital Expenditures, Tenant Improvement Costs and Leasing Commissions
Acquisitions and Dispositions
 
 
DEVELOPMENT ACTIVITY
 
Construction in Progress
Land Parcels and Purchase Options
 
 
LEASING ACTIVITY
 
Leasing Activity
 
 
PROPERTY STATISTICS
 
Portfolio Overview
Residential and Hotel Performance
In-Service Property Listing
Top 20 Tenants Listing and Portfolio Tenant Diversification
Occupancy by Location
 
 
DEBT AND CAPITALIZATION
 
Capital Structure
Debt Analysis
Senior Unsecured Debt Covenant Compliance Ratios
Net Debt to EBITDAre
Debt Ratios
 
 
JOINT VENTURES
 
Consolidated Joint Ventures
Unconsolidated Joint Ventures
 
 
LEASE EXPIRATION ROLL-OUT
 
Total In-Service Properties
Boston
Los Angeles
New York
San Francisco
Washington, DC
CBD
Suburban
 
 
RESEARCH COVERAGE, DEFINITIONS AND RECONCILIATIONS
 
Research Coverage
Definitions
Reconciliations
Consolidated Income Statement - Prior Year











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Q3 2019
Company profile

SNAPSHOT

(as of September 30, 2019)
Fiscal Year-End
December 31
Total Properties (includes unconsolidated joint ventures)
196
Total Square Feet (includes unconsolidated joint ventures)
51.9 million
Common shares outstanding, plus common units and LTIP units (other than unearned Multi-Year Long-Term Incentive Program (MYLTIP) Units) on an as-converted basis 1
172.6 million
Closing Price, at the end of the quarter
$129.66 per share
Dividend - Quarter/Annualized
$0.95/$3.80 per share
Dividend Yield
2.93%
Consolidated Market Capitalization 1
$34.4 billion
BXP’s Share of Market Capitalization 1, 2
$34.1 billion
Senior Debt Ratings
A- (S&P); BBB+ (Fitch); Baa1 (Moody’s)
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:
to maintain a keen focus on select markets that exhibit the strongest economic growth and investment characteristics over time - currently Boston, Los Angeles, New York, San Francisco and Washington, DC;
to invest in the highest quality buildings (primarily office) with unique amenities and locations that are able to maintain high occupancy, achieve premium rental rates through economic cycles and that advance our commitment to sustainable development and operations;
in our core markets, to maintain scale and a full-service real estate capability (development, construction, leasing and property management) to ensure we (1) see all relevant investment deal flow, (2) maintain an ability to execute on all types of real estate opportunities, such as development, repositioning, acquisitions and dispositions, throughout the real estate investment cycle and (3) provide superior service to our tenants;
to be astute in market timing for investment decisions by developing into economic growth, acquiring properties in times of opportunity and selling assets at attractive prices, resulting in continuous portfolio refreshment;
to ensure a strong balance sheet to maintain consistent access to capital and the resultant ability to make opportunistic investments; and
to foster a culture and reputation of integrity, excellence and purposefulness, making us the employer of choice for talented real estate professionals and the counterparty of choice for tenants and real estate industry participants.
MANAGEMENT

Board of Directors
 
Chairman Emeritus
Joel I. Klein
Chairman of the Board
 
Mortimer B. Zuckerman
Owen D. Thomas
Chief Executive Officer
 
 
Douglas T. Linde
President
 
Management
Kelly A. Ayotte
 
 
Owen D. Thomas
Chief Executive Officer
Bruce W. Duncan
Chair of Compensation Committee
 
Douglas T. Linde
President
Karen E. Dykstra
 
 
Raymond A. Ritchey
Senior Executive Vice President
Carol B. Einiger
 
 
Michael E. LaBelle
Executive Vice President, Chief Financial Officer and Treasurer
Diane J. Hoskins
 
 
 
Matthew J. Lustig
Chair of Nominating & Corporate Governance Committee

 
Peter D. Johnston
Executive Vice President, Washington, DC Region
 
 
Bryan J. Koop
Executive Vice President, Boston Region
David A. Twardock
Chair of Audit Committee
 
Robert E. Pester
Executive Vice President, San Francisco Region
William H. Walton, III
 
 
John F. Powers
Executive Vice President, New York Region
 
 
 
Frank D. Burt
Senior Vice President and Chief Legal Officer
 
 
 
Michael R. Walsh
Senior Vice President and Chief Accounting Officer
TIMING OF EARNINGS ANNOUNCEMENTS
Quarterly results for the next four quarters will be announced according to the following schedule:
Fourth Quarter, 2019
Tentatively January 28, 2020
 
 
First Quarter, 2020
Tentatively April 28, 2020
 
 
Second Quarter, 2020
Tentatively July 28, 2020
 
 
Third Quarter, 2020
Tentatively October 27, 2020
 
 
____________________
1 
For additional detail, see page 28.
2 
For the Company’s definitions and related disclosures, see the Definitions and Reconciliations sections of this Supplemental package starting on page 55.

1



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Q3 2019
Guidance and assumptions

GUIDANCE

The Company’s guidance for the full year 2019 and full year 2020 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, the timing of the lease-up of available space and development deliveries and the earnings impact of the events referenced in the Company’s earnings release issued on October 29, 2019 and otherwise referenced during the Company’s conference call scheduled for October 30, 2019Except as otherwise publicly disclosed, the estimates do not include any material (1) possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions, (2) other possible capital markets activity or (3) 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 57. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth below.

 
 
 
 
Full Year 2019
 
Full Year 2020
 
 
 
 
Low
 
High
 
Low
 
High
Projected EPS (diluted)
 
$
3.28

 
$
3.30

 
$
3.45

 
$
3.65

 
Add:
 
 
 
 
 
 
 
 
 
 
 
Projected Company share of real estate depreciation and amortization
 
3.84

 
3.84

 
4.00

 
4.00

 
 
Impairment Loss
 
0.14

 
0.14

 

 

 
 
Projected Company share of (gains)/losses on sales of real estate
 
(0.28
)
 
(0.28
)
 

 

Projected FFO per share (diluted)
 
$
6.98

 
$
7.00

 
$
7.45

 
$
7.65



ASSUMPTIONS
(dollars in thousands)

 
 
 
Full Year 2019
 
Full Year 2020
 
 
 
Low
 
High
 
Low
 
High
Operating property activity:
 
 
 
 
 
 
 
 
 
Average In-service portfolio occupancy
 
92.50
%
93.50
%
 
92.50
%
93.50
%
 
Increase in BXP’s Share of Same Property net operating income (excluding termination income)
 
6.25
%
7.00
%
 
3.00
%
4.75
%
 
Increase in BXP’s Share of Same Property net operating income - cash (excluding termination income)
 
5.00
%
6.50
%
 
3.00
%
4.75
%
 
BXP’s Share of Non Same Properties’ incremental contribution to net operating income over prior year (excluding asset sales)
 
$
80,000

$
90,000

 
$
60,000

$
70,000

 
BXP’s Share of incremental net operating income related to asset sales over prior year
 
$
(17,000
)
$
(17,000
)
 
$
(3,000
)
$
(3,000
)
 
BXP’s Share of straight-line rent and fair value lease revenue (non-cash revenue)
 
$
110,000

$
125,000

 
$
100,000

$
130,000

 
Hotel net operating income
 
$
15,000

$
16,000

 
$
15,000

$
16,500

 
Termination income
 
$
14,000

$
16,000

 
$
2,000

$
8,000

 
 
 
 
 
 
 
 
 
 
Other revenue (expense):
 
 
 
 
 
 
 
 
 
Development and management services revenue
 
$
37,000

$
41,000

 
$
25,000

$
32,000

 
General and administrative expense 1
 
$
(140,000
)
$
(136,000
)
 
$
(145,000
)
$
(140,000
)
 
Net interest expense 2
 
$
(430,000
)
$
(420,000
)
 
$
(430,000
)
$
(410,000
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling interest:
 
 
 
 
 
 
 
 
 
Noncontrolling interest in property partnerships’ share of FFO
 
$
(148,000
)
$
(138,000
)
 
$
(155,000
)
$
(145,000
)

_____________
1 
Excludes estimated changes in the market value of the Company’s Deferred Compensation Plan and Gains from investments in securities.
2 
Full year 2019 assumptions includes the $28 million loss from the early extinguishment of debt recognized during the third quarter of 2019. The full year 2020 assumptions excludes approximately $9 million of incremental interest expense associated with our unconsolidated joint ventures and contained within income (loss) from unconsolidated joint ventures.

2



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Q3 2019
Financial highlights


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

 
 
Three Months Ended
 
 
30-Sep-19
 
30-Jun-19
Net income attributable to Boston Properties, Inc. common shareholders
 
$
107,771

 
$
164,318

Net income attributable to Boston Properties, Inc. per share - diluted
 
$
0.70

 
$
1.06

FFO attributable to Boston Properties, Inc. common shareholders 1
 
$
253,631

 
$
276,275

Diluted FFO per share 1
 
$
1.64

 
$
1.78

Dividends per common share
 
$
0.95

 
$
0.95

Funds available for distribution to common shareholders and common unitholders (FAD) 2
 
$
191,920

 
$
223,719

 
 
 
 
 
Selected items:
 
 
 
 
Revenue
 
$
743,553

 
$
733,741

Recoveries from tenants 3
 
$
124,445

 
$
117,971

Service income from tenants 4
 
$
3,180

 
$
2,818

BXP’s Share of revenue 5
 
$
704,171

 
$
698,643

BXP’s Share of straight-line rent 5, 6
 
$
(1,904
)
 
$
18,653

BXP’s Share of straight-line rent from deferred revenue 5, 7
 
$
(22,156
)
 
$

BXP’s Share of fair value lease revenue 5, 8
 
$
4,467

 
$
5,124

BXP’s Share of termination income 5
 
$
1,960

 
$
4,969

Ground rent expense
 
$
3,637

 
$
3,656

Capitalized interest
 
$
16,184

 
$
13,256

Capitalized wages
 
$
2,583

 
$
2,594

BXP’s Share of internal leasing and external legal costs that were to be capitalized prior to the adoption of ASU 2016-02 - “Leases” on January 1, 2019 5
 
$
1,523

 
$
1,270

Income (loss) from unconsolidated joint ventures 9
 
$
(649
)
 
$
47,964

BXP’s share of FFO from unconsolidated joint ventures 10
 
$
13,583

 
$
14,985

Net income attributable to noncontrolling interests in property partnerships
 
$
18,470

 
$
17,482

FFO attributable to noncontrolling interests in property partnerships 11
 
$
35,872

 
$
35,351

 
 
 
 
 
Balance Sheet items:
 
 
 
 
Above-market rents (included within Prepaid Expenses and Other Assets)
 
$
11,535

 
$
13,111

Below-market rents (included within Other Liabilities)
 
$
44,000

 
$
49,623

Accrued rental income liability (included within Other Liabilities) 6
 
$
127,699

 
$
79,687

 
 
 
 
 
Ratios:
 
 
 
 
Interest Coverage Ratio (excluding capitalized interest) 12
 
4.01

 
4.13

Interest Coverage Ratio (including capitalized interest) 12
 
3.43

 
3.60

Fixed Charge Coverage Ratio 9
 
2.66

 
2.84

BXP’s Share of Net Debt to BXP’s Share of EBITDAre 13
 
6.47

 
6.32

Change in BXP’s Share of Same Store Net Operating Income (NOI) (excluding termination income) 14
 
7.1
%
 
7.6
%
Change in BXP’s Share of Same Store NOI (excluding termination income) - cash 14
 
5.2
%
 
9.0
%
FAD Payout Ratio 2
 
85.47
%
 
73.32
%
Operating Margins [(rental revenue - rental expense)/rental revenue]
 
63.0
%
 
63.5
%
Occupancy of In-Service Properties
 
92.6
%
 
93.4
%
 
 
 
 
 
Capitalization:
 
 
 
 
Consolidated Debt
 
$
11,838,738

 
$
11,846,241

BXP’s Share of Debt 15
 
$
11,561,991

 
$
11,509,782

Consolidated Market Capitalization
 
$
34,415,850

 
$
34,309,061

Consolidated Debt/Consolidated Market Capitalization
 
34.40
%
 
34.53
%
BXP’s Share of Market Capitalization 15
 
$
34,139,103

 
$
33,972,602

BXP’s Share of Debt/BXP’s Share of Market Capitalization 15
 
33.87
%
 
33.88
%
_____________
1 
For a quantitative reconciliation of FFO attributable to Boston Properties, Inc. common shareholders and Diluted FFO per share, see page 7.
2 
For a quantitative reconciliation of FAD, see page 8. FAD Payout Ratio equals distributions to common shareholders and unitholders (excluding any special distributions) divided by FAD.
3 
Upon the adoption of ASU 2016-02 - “Leases” on January 1, 2019, Recoveries from tenants are included in Lease revenue.
4 
Upon the adoption of ASU 2016-02 - “Leases” on January 1, 2019, Service income from tenants are included in Lease revenue. Prior to adoption, these amounts were included within the line Development and management services revenue.  
5 
See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.
6 
For the three months ended September 30, 2019, includes the straight-line impact related to deferred revenue from a tenant.


3



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Q3 2019
Financial highlights (continued)


7 
Represents the straight-line impact related to deferred revenue from a tenant. For additional information, see page 59.
8 
Represents the net adjustment for above- and below-market leases that are amortized over the terms of the respective leases in place at the property acquisition dates.  
9 
For the three months ended June 30, 2019, includes the Company’s share of the gain on sale of 540 Madison Avenue totaling approximately $47.8 million.
10 
For a quantitative reconciliation for the three months ended September 30, 2019, see page 37.
11 
For a quantitative reconciliation for the three months ended September 30, 2019, see page 34.
12 
For a quantitative reconciliation for the three months ended September 30, 2019 and June 30, 2019, see page 32.
13 
For a quantitative reconciliation for the three months ended September 30, 2019 and June 30, 2019, see page 31.
14 
For a quantitative reconciliation for the three months ended September 30, 2019, see page 12.
15 
For a quantitative reconciliation for September 30, 2019, see page 28.

4



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Q3 2019
Consolidated Balance Sheets


(unaudited and in thousands)
 
 
30-Sep-19
 
30-Jun-19
ASSETS
 
 
 
 
Real estate
 
$
21,088,492

 
$
20,858,468

Construction in progress
 
958,407

 
812,408

Land held for future development
 
246,972

 
272,332

Right of use assets - finance leases
 
232,312

 
187,269

Right of use assets - operating leases
 
149,231

 
149,839

Less accumulated depreciation
 
(5,164,342
)
 
(5,050,606
)
Total real estate
 
17,511,072

 
17,229,710

Cash and cash equivalents
 
751,210

 
1,087,001

Cash held in escrows
 
53,555

 
75,923

Investments in securities
 
34,375

 
33,411

Tenant and other receivables, net
 
102,155

 
87,727

Related party note receivable
 
80,000

 
80,000

Note receivable
 
19,844

 
19,718

Accrued rental income, net
 
1,003,033

 
973,167

Deferred charges, net
 
689,768

 
676,082

Prepaid expenses and other assets
 
110,308

 
68,701

Investments in unconsolidated joint ventures
 
933,255

 
936,835

Total assets
 
$
21,288,575

 
$
21,268,275

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Liabilities:
 
 
 
 
Mortgage notes payable, net
 
$
2,952,006

 
$
2,956,833

Unsecured senior notes, net
 
8,387,913

 
8,390,708

Unsecured line of credit
 

 

Unsecured term loan, net
 
498,819

 
498,700

Lease liabilities- finance leases
 
221,029

 
172,902

Lease liabilities - operating leases
 
199,755

 
199,344

Accounts payable and accrued expenses
 
421,269

 
418,429

Dividends and distributions payable
 
165,421

 
165,419

Accrued interest payable
 
83,177

 
89,289

Other liabilities
 
356,338

 
355,984

Total liabilities
 
13,285,727

 
13,247,608

 
 
 
 
 
Commitments and contingencies
 

 

 
 
 
 
 
Redeemable deferred stock units
 
9,408

 

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 September 30, 2019 and June 30, 2019
 
200,000

 
200,000

Common stock, $0.01 par value, 250,000,000 shares authorized, 154,650,973 and 154,642,030 issued and 154,572,073 and 154,563,130 outstanding at September 30, 2019 and June 30, 2019, respectively
 
1,546

 
1,546

Additional paid-in capital
 
6,272,708

 
6,278,961

Dividends in excess of earnings
 
(749,666
)
 
(710,592
)
Treasury common stock at cost, 78,900 shares at September 30, 2019 and June 30, 2019
 
(2,722
)
 
(2,722
)
Accumulated other comprehensive loss
 
(51,996
)
 
(51,340
)
Total stockholders’ equity attributable to Boston Properties, Inc.
 
5,669,870

 
5,715,853

 
 
 
 
 
Noncontrolling interests:
 
 
 
 
Common units of the Operating Partnership
 
603,447

 
608,593

Property partnerships
 
1,720,123

 
1,696,221

Total equity
 
7,993,440

 
8,020,667

 
 
 
 
 
Total liabilities and equity
 
$
21,288,575

 
$
21,268,275



5



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Q3 2019
Consolidated Income Statements


(unaudited and in thousands, except per share amounts)
 
 
Three Months Ended
 
 
30-Sep-19
 
30-Jun-19
Revenue
 
 
 
 
Lease
 
$
692,225

 
$
680,189

Parking and other
 
25,582

 
26,319

Hotel revenue
 
13,014

 
14,844

Development and management services
 
10,303

 
9,986

Direct reimbursements of payroll and related costs from management services contracts
 
2,429

 
2,403

Total revenue
 
743,553

 
733,741

Expenses
 
 
 
 
Operating
 
129,852

 
127,939

Real estate taxes
 
135,419

 
129,620

Demolition costs
 
332

 
412

Hotel operating
 
8,743

 
9,080

General and administrative 1
 
31,147

 
35,071

Payroll and related costs from management services contracts
 
2,429

 
2,403

Transaction costs
 
538

 
417

Depreciation and amortization
 
165,862

 
177,411

Total expenses
 
474,322

 
482,353

Other income (expense)
 
 
 
 
Income (loss) from unconsolidated joint ventures
 
(649
)
 
47,964

Gains (losses) on sales of real estate
 
(15
)
 
1,686

Gains from investments in securities 1
 
106

 
1,165

Interest and other income
 
7,178

 
3,615

Loss from early extinguishment of debt
 
(28,010
)
 

Interest expense
 
(106,471
)
 
(102,357
)
Net income
 
141,370

 
203,461

Net income attributable to noncontrolling interests
 
 
 
 
Noncontrolling interest in property partnerships
 
(18,470
)
 
(17,482
)
Noncontrolling interest - common units of the Operating Partnership 2
 
(12,504
)
 
(19,036
)
Net income attributable to Boston Properties, Inc.
 
110,396

 
166,943

Preferred dividends
 
(2,625
)
 
(2,625
)
Net income attributable to Boston Properties, Inc. common shareholders
 
$
107,771

 
$
164,318

 
 
 
 
 
 
 
 
 
 
INCOME PER SHARE OF COMMON STOCK (EPS)
 
 
 
 
 
 
 
 
 
Net income attributable to Boston Properties, Inc. per share - basic
 
$
0.70

 
$
1.06

Net income attributable to Boston Properties, Inc. per share - diluted
 
$
0.70

 
$
1.06

















_____________
1 
General and administrative expense includes $0.1 million and $1.2 million and Gains from investments in securities include $0.1 million and $1.2 million for the three months ended September 30, 2019 and June 30, 2019, respectively, related to the Company’s deferred compensation plan.
2 
For additional detail, see page 7.

6



 http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=13168548&doc=11
Q3 2019
Funds from operations (FFO) 1


(unaudited and dollars in thousands, except per share amounts)
 
 
Three Months Ended
 
 
30-Sep-19
 
30-Jun-19
Net income attributable to Boston Properties, Inc. common shareholders
 
$
107,771

 
$
164,318

Add:
 
 
 
 
Preferred dividends
 
2,625

 
2,625

Noncontrolling interest - common units of the Operating Partnership
 
12,504

 
19,036

Noncontrolling interests in property partnerships
 
18,470

 
17,482

Net income
 
141,370

 
203,461

Add:
 
 
 
 
Depreciation and amortization expense
 
165,862

 
177,411

Noncontrolling interests in property partnerships' share of depreciation and amortization 2
 
(17,402
)
 
(17,869
)
BXP's share of depreciation and amortization from unconsolidated joint ventures 3
 
13,745

 
14,778

Corporate-related depreciation and amortization
 
(411
)
 
(412
)
Less:
 
 
 
 
Gain on sale of real estate included within income (loss) from unconsolidated joint ventures
 
(487
)
 
47,757

Gains (losses) on sales of real estate
 
(15
)
 
1,686

Noncontrolling interests in property partnerships
 
18,470

 
17,482

Preferred dividends
 
2,625

 
2,625

FFO attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) (Basic FFO)
 
282,571

 
307,819

Less:
 
 
 
 
Noncontrolling interest - common units of the Operating Partnership’s share of FFO
 
28,940

 
31,544

FFO attributable to Boston Properties, Inc. common shareholders
 
$
253,631

 
$
276,275

 
 
 
 
 
Boston Properties, Inc.’s percentage share of Basic FFO
 
89.76
%
 
89.75
%
Noncontrolling interest’s - common unitholders percentage share of Basic FFO
 
10.24
%
 
10.25
%
Basic FFO per share
 
$
1.64

 
$
1.79

Weighted average shares outstanding - basic
 
154,577

 
154,555

Diluted FFO per share
 
$
1.64

 
$
1.78

Weighted average shares outstanding - diluted
 
154,820

 
154,874


RECONCILIATION TO DILUTED FFO
 
 
Three Months Ended
 
 
30-Sep-19
 
30-Jun-19
Basic FFO
 
$
282,571

 
$
307,819

Add:
 
 
 
 
Effect of dilutive securities - stock-based compensation
 

 

Diluted FFO
 
282,571

 
307,819

Less:
 
 
 
 
Noncontrolling interest - common units of the Operating Partnership’s share of diluted FFO
 
28,900

 
31,486

Boston Properties, Inc.’s share of Diluted FFO
 
$
253,671

 
$
276,333


RECONCILIATION OF SHARES/UNITS FOR DILUTED FFO
 
 
Three Months Ended
 
 
30-Sep-19
 
30-Jun-19
Shares/units for Basic FFO
 
172,215

 
172,202

Add:
 
 
 
 
Effect of dilutive securities - stock-based compensation (shares/units)
 
243

 
319

Shares/units for Diluted FFO
 
172,458

 
172,521

Less:
 
 
 
 
Noncontrolling interest - common units of the Operating Partnership’s share of Diluted FFO (shares/units)
 
17,638

 
17,647

Boston Properties, Inc.’s share of shares/units for Diluted FFO
 
154,820

 
154,874

 
 
 
 
 
Boston Properties, Inc.’s percentage share of Diluted FFO
 
89.77
%
 
89.77
%
_____________
1 
See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.
2 
For a quantitative reconciliation for the three months ended September 30, 2019, see page 34.
3 
For a quantitative reconciliation for the three months ended September 30, 2019, see page 37.

7



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Q3 2019
Funds available for distributions (FAD) 1


(dollars in thousands)
 
 
Three Months Ended
 
 
30-Sep-19
 
30-Jun-19
Net income attributable to Boston Properties, Inc. common shareholders
 
$
107,771

 
$
164,318

Add:
 
 
 
 
Preferred dividends
 
2,625

 
2,625

Noncontrolling interest - common units of the Operating Partnership
 
12,504

 
19,036

Noncontrolling interests in property partnerships
 
18,470

 
17,482

Net income
 
141,370

 
203,461

Add:
 
 
 
 
Depreciation and amortization expense
 
165,862

 
177,411

Noncontrolling interests in property partnerships’ share of depreciation and amortization 2
 
(17,402
)
 
(17,869
)
BXP’s share of depreciation and amortization from unconsolidated joint ventures 3
 
13,745

 
14,778

Corporate-related depreciation and amortization
 
(411
)
 
(412
)
Less:
 
 
 
 
Gain on sale of real estate included within income (loss) from unconsolidated joint ventures
 
(487
)
 
47,757

Gains (losses) on sales of real estate
 
(15
)
 
1,686

Noncontrolling interests in property partnerships
 
18,470

 
17,482

Preferred dividends
 
2,625

 
2,625

Basic FFO
 
282,571

 
307,819

Add:
 
 
 
 
BXP’s Share of lease transaction costs that qualify as rent inducements 1, 4
 
2,041

 
1,587

BXP’s Share of hedge amortization 1
 
1,435

 
1,435

Straight-line ground rent expense adjustment 5
 
1,019

 
1,019

Stock-based compensation
 
7,809

 
10,394

Non-real estate depreciation
 
411

 
412

Unearned portion of capitalized fees from consolidated joint ventures 6
 
836

 
4,092

Less:
 
 
 
 
BXP’s Share of straight-line rent 1
 
(1,904
)
 
18,653

BXP’s Share of fair value lease revenue 1, 7
 
4,467

 
5,124

BXP’s Share of non-cash termination income adjustment (fair value lease amounts) 1
 

 

BXP’s Share of 2nd generation tenant improvements and leasing commissions 1
 
70,199

 
51,822

BXP’s Share of maintenance capital expenditures 1, 8
 
31,263

 
27,016

Hotel improvements, equipment upgrades and replacements
 
177

 
424

Funds available for distribution to common shareholders and common unitholders (FAD) (A)
 
$
191,920

 
$
223,719

 
 
 
 
 
Distributions to common shareholders and unitholders (excluding any special distributions) (B)
 
164,043

 
164,041

 
 
 
 
 
FAD Payout Ratio1 (B÷A)
 
85.47
%
 
73.32
%



_____________
1 
See the Definitions and Reconciliations sections of this Supplemental package starting on page 55.
2 
For a quantitative reconciliation for the three months ended September 30, 2019, see page 34.
3 
For a quantitative reconciliation for the three months ended September 30, 2019, see page 37.
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 period the lease commences.
5 
Includes the straight-line impact of the Company’s 99-year ground and air rights lease related to the Company’s 100 Clarendon Street garage and Back Bay Transit Station. The Company has allocated contractual ground lease payments aggregating approximately $34.4 million, which it expects to incur by the end of 2023 with no payments thereafter. The Company is recognizing this expense on a straight-line basis over the 99-year term of the ground and air rights lease, see page 3.
6 
See page 61 for additional information.
7 
Represents the net adjustment for above- and below-market leases that are amortized over the terms of the respective leases in place at the property acquisition dates.  
8 
Maintenance capital expenditures do not include planned capital expenditures related to acquisitions and repositioning capital expenditures.

8




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Q3 2019
Reconciliation of net income attributable to Boston Properties, Inc. common shareholders to BXP’s Share of same property net operating income (NOI)
(in thousands)
 
 
Three Months Ended
 
 
30-Sep-19
 
30-Sep-18
Net income attributable to Boston Properties, Inc. common shareholders
 
$
107,771

 
$
119,118

Preferred dividends
 
2,625

 
2,625

Net income attributable to Boston Properties, Inc.
 
110,396

 
121,743

Net income attributable to noncontrolling interests:
 
 
 
 
Noncontrolling interest - common units of the Operating Partnership
 
12,504

 
13,852

Noncontrolling interest in property partnerships
 
18,470

 
14,850

Net income
 
141,370

 
150,445

Add:
 
 
 
 
Interest expense
 
106,471

 
95,366

Loss from early extinguishment of debt
 
28,010

 

Depreciation and amortization expense
 
165,862

 
157,996

Transaction costs
 
538

 
914

Payroll and related costs from management services contracts
 
2,429

 
2,516

General and administrative expense
 
31,147

 
29,677

Less:
 
 
 
 
Interest and other income
 
7,178

 
2,822

Gains from investments in securities
 
106

 
1,075

Gains (losses) on sales of real estate
 
(15
)
 
7,863

Income (loss) from unconsolidated joint ventures
 
(649
)
 
(4,313
)
Direct reimbursements of payroll and related costs from management services contracts
 
2,429

 
2,516

Development and management services revenue
 
10,303

 
15,253

Net Operating Income (NOI)
 
456,475

 
411,698

Add:
 
 
 
 
BXP’s share of NOI from unconsolidated joint ventures 1
 
23,065

 
22,511

Less:
 
 
 
 
Partners’ share of NOI from consolidated joint ventures (after priority allocations and income allocation to private REIT shareholders) 2
 
46,249

 
43,068

BXP’s Share of NOI
 
433,291

 
391,141

Less:
 
 
 
 
Termination income
 
1,960

 
1,350

BXP’s share of termination income from unconsolidated joint ventures 1
 

 

Add:
 
 
 
 
Partners’ share of termination income from consolidated joint ventures 2
 

 

BXP’s Share of NOI (excluding termination income)
 
$
431,331

 
$
389,791

 
 
 
 
 
Net Operating Income (NOI)
 
$
456,475

 
$
411,698

Less:
 
 
 
 
Termination income
 
1,960

 
1,350

NOI from non Same Properties (excluding termination income) 3
 
28,416

 
13,316

Same Property NOI (excluding termination income)
 
426,099

 
397,032

Less:
 
 
 
 
Partners’ share of NOI from consolidated joint ventures (excluding termination income and after priority allocations and income allocation to private REIT shareholders) 2
 
46,249

 
43,068

Add:
 
 
 
 
Partners’ share of NOI from non Same Properties from consolidated joint ventures (excluding termination income and after priority allocations and income allocation to private REIT shareholders) 3
191

 
208

BXP’s share of NOI from unconsolidated joint ventures (excluding termination income) 1
 
23,065

 
22,511

Less:
 
 
 
 
BXP’s share of NOI from non Same Properties from unconsolidated joint ventures (excluding termination income) 3
 
7,040

 
6,969

BXP’s Share of Same Property NOI (excluding termination income)
 
$
396,066

 
$
369,714


_____________
1 
For a quantitative reconciliation for the three months ended September 30, 2019, see page 64.
2 
For a quantitative reconciliation for the three months ended September 30, 2019, see page 62.
3 
Pages 22-25 indicate by footnote the properties that are not included as part of Same Property NOI. In addition, Same Properties exclude properties that were sold prior to September 30, 2019 and therefore are no longer a part of the Company’s property portfolio.

9



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Q3 2019
Reconciliation of net income attributable to Boston Properties, Inc. common shareholders to BXP’s Share of same property net operating income (NOI) - cash

(in thousands)
 
 
Three Months Ended
 
 
30-Sep-19
 
30-Sep-18
Net income attributable to Boston Properties, Inc. common shareholders
 
$
107,771

 
$
119,118

Preferred dividends
 
2,625

 
2,625

Net income attributable to Boston Properties, Inc.
 
110,396

 
121,743

Net income attributable to noncontrolling interests:
 
 
 
 
Noncontrolling interest - common units of the Operating Partnership
 
12,504

 
13,852

Noncontrolling interest in property partnerships
 
18,470

 
14,850

Net income
 
141,370

 
150,445

Add:
 
 
 
 
Interest expense
 
106,471

 
95,366

Loss from early extinguishment of debt
 
28,010

 

Depreciation and amortization expense
 
165,862

 
157,996

Transaction costs
 
538

 
914

Payroll and related costs from management services contracts
 
2,429

 
2,516

General and administrative expense
 
31,147

 
29,677

Less:
 
 
 
 
Interest and other income
 
7,178

 
2,822

Gains from investments in securities
 
106

 
1,075

Gains (losses) on sales of real estate
 
(15
)
 
7,863

Income (loss) from unconsolidated joint ventures
 
(649
)
 
(4,313
)
Direct reimbursements of payroll and related costs from management services contracts
 
2,429

 
2,516

Development and management services revenue
 
10,303

 
15,253

Net Operating Income (NOI)
 
456,475

 
411,698

Less:
 
 
 
 
Straight-line rent
 
(16,803
)
 
(848
)
Straight-line rent from deferred revenue 1
 
36,926

 

Fair value lease revenue
 
4,961

 
6,053

Termination income
 
1,960

 
1,350

Add:
 
 
 
 
Straight-line ground rent expense adjustment 2
 
843

 
887

Lease transaction costs that qualify as rent inducements 3
 
2,140

 
3,866

NOI - cash (excluding termination income)
 
432,414

 
409,896

Less:
 
 
 
 
NOI - cash from non Same Properties (excluding termination income) 4
 
31,571

 
26,007

Same Property NOI - cash (excluding termination income)
 
400,843

 
383,889

Less:
 
 
 
 
Partners’ share of NOI - cash from consolidated joint ventures (excluding termination income and after priority allocations and income allocation to private REIT shareholders) 5
 
42,930

 
43,922

Add:
 
 
 
 
Partners’ share of NOI - cash from non Same Properties from consolidated joint ventures (excluding termination income and after priority allocations and income allocation to private REIT shareholders) 4
263

 
834

BXP’s share of NOI - cash from unconsolidated joint ventures (excluding termination income) 6
 
20,012

 
18,697

Less:
 
 
 
 
BXP’s share of NOI - cash from non Same Properties from unconsolidated joint ventures (excluding termination income) 4
 
5,713

 
5,405

BXP’s Share of Same Property NOI - cash (excluding termination income)
 
$
372,475

 
$
354,093

_____________
1 
Represents the straight-line impact related to deferred revenue from a tenant.  The tenant paid for improvements to a long-lived asset of the Company resulting in deferred revenue for the period until the asset was substantially complete, which occurred in the third quarter 2019.
2 
In light of the front-ended, uneven rental payments required by the Company’s 99-year ground and air rights lease for the 100 Clarendon Street garage and Back Bay Transit Station in Boston, MA, and to make period-to-period comparisons more meaningful to investors, the adjustment does not include the straight-line impact of approximately $176 and $175 for the three months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, the Company has remaining lease payments aggregating approximately $26.0 million, all of which it expects to incur by the end of 2023 with no payments thereafter. Under GAAP, the Company recognizes expense of $(87) per quarter on a straight-line basis over the term of the lease. However, unlike more traditional ground and air rights leases, the timing and amounts of the rental payments by the Company correlate to the uneven timing and funding by the Company of capital expenditures related to improvements at Back Bay Transit Station. As a result, the amounts excluded from the adjustment each quarter through 2023 may vary significantly.
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 in the Company’s FAD calculation on page 8.
4 
Pages 22-25 indicate by footnote the properties that are not included as part of Same Property NOI. In addition, Same Properties exclude properties that were sold prior to September 30, 2019 and therefore are no longer a part of the Company’s property portfolio.

10



 http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=13168548&doc=11
Q3 2019
Reconciliation of net income attributable to Boston Properties, Inc. common shareholders to BXP’s Share of same property net operating income (NOI) - cash (continued)

 
5 
For a quantitative reconciliation for the three months ended September 30, 2019, see page 62.
6 
For a quantitative reconciliation for the three months ended September 30, 2019, see page 64.

11



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Q3 2019
Same property net operating income (NOI) by reportable segment

(dollars in thousands)
 
Office 1
 
Hotel & Residential
 
Three Months Ended
 
$
 
%
 
Three Months Ended
 
$
 
%
 
30-Sep-19
 
30-Sep-18
 
Change
 
Change
 
30-Sep-19
 
30-Sep-18
 
Change
 
Change
Rental Revenue 2
$
663,221

 
$
622,981

 
 
 
 
 
$
20,403

 
$
19,265

 
 
 
 
Less: Termination income
1,960

 
818

 
 
 
 
 

 

 
 
 
 
Rental revenue (excluding termination income) 2
661,261

 
622,163

 
$
39,098

 
6.3
 %
 
20,403

 
19,265

 
$
1,138

 
5.9
 %
Less: Operating expenses and real estate taxes
243,547

 
232,446

 
11,101

 
4.8
 %
 
12,018

 
11,950

 
68

 
0.6
 %
NOI (excluding termination income) 2, 3
$
417,714

 
$
389,717

 
$
27,997

 
7.2
 %
 
$
8,385

 
$
7,315

 
$
1,070

 
14.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental revenue (excluding termination income) 2
$
661,261

 
$
622,163

 
$
39,098

 
6.3
 %
 
$
20,403

 
$
19,265

 
$
1,138

 
5.9
 %
Less: Straight-line rent and fair value lease revenue 4
28,215

 
17,426

 
10,789

 
61.9
 %
 
24

 
14

 
10

 
71.4
 %
Add: Lease transaction costs that qualify as rent inducements 5
2,140

 
3,410

 
(1,270
)
 
(37.2
)%
 

 

 

 
 %
Subtotal
635,186

 
608,147

 
27,039

 
4.4
 %
 
20,379

 
19,251

 
1,128

 
5.9
 %
Less: Operating expenses and real estate taxes
243,547

 
232,446

 
11,101

 
4.8
 %
 
12,018

 
11,950

 
68

 
0.6
 %
Add: Straight-line ground rent expense 6
843

 
887

 
(44
)
 
(5.0
)%
 

 

 

 
 %
NOI - cash (excluding termination income) 2, 3, 4
$
392,482

 
$
376,588

 
$
15,894

 
4.2
 %
 
$
8,361

 
$
7,301

 
$
1,060

 
14.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Total 1 (A)
 
BXP’s share of Unconsolidated Joint Ventures (B)
 
Three Months Ended
 
$
 
%
 
Three Months Ended
 
$
 
%
 
30-Sep-19
 
30-Sep-18
 
Change
 
Change
 
30-Sep-19
 
30-Sep-18
 
Change
 
Change
Rental Revenue 2
$
683,624

 
$
642,246

 
 
 
 
 
$
24,557

 
$
23,697

 
 
 
 
Less: Termination income
1,960

 
818

 
 
 
 
 

 

 
 
 
 
Rental revenue (excluding termination income) 2
681,664

 
641,428

 
$
40,236

 
6.3
 %
 
24,557

 
23,697

 
$
860

 
3.6
 %
Less: Operating expenses and real estate taxes
255,565

 
244,396

 
11,169

 
4.6
 %
 
8,532

 
8,155

 
377

 
4.6
 %
NOI (excluding termination income) 2, 3
$
426,099

 
$
397,032

 
$
29,067

 
7.3
 %
 
$
16,025

 
$
15,542

 
$
483

 
3.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental revenue (excluding termination income) 2
$
681,664

 
$
641,428

 
$
40,236

 
6.3
 %
 
$
24,557

 
$
23,697

 
$
860

 
3.6
 %
Less: Straight-line rent and fair value lease revenue 4
28,239

 
17,440

 
10,799

 
61.9
 %
 
1,902

 
2,317

 
(415
)
 
(17.9
)%
Add: Lease transaction costs that qualify as rent inducements 5
2,140

 
3,410

 
(1,270
)
 
(37.2
)%
 
176

 
67

 
109

 
162.7
 %
Subtotal
$
655,565

 
$
627,398

 
28,167

 
4.5
 %
 
22,831

 
21,447

 
1,384

 
6.5
 %
Less: Operating expenses and real estate taxes
255,565

 
244,396

 
11,169

 
4.6
 %
 
8,532

 
8,155

 
377

 
4.6
 %
Add: Straight-line ground rent expense 6
843

 
887

 
(44
)
 
(5.0
)%
 

 

 

 
 %
NOI - cash (excluding termination income) 2, 3, 4
$
400,843

 
$
383,889

 
$
16,954

 
4.4
 %
 
$
14,299

 
$
13,292

 
$
1,007

 
7.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Partners’ share of Consolidated Joint Ventures (C)
 
BXP’s Share 2, 7
 
Three Months Ended
 
$
 
%
 
Three Months Ended
 
$
 
%
 
30-Sep-19
 
30-Sep-18
 
Change
 
Change
 
30-Sep-19
 
30-Sep-18
 
Change
 
Change
Rental Revenue 2
$
75,286

 
$
71,309

 
 
 
 
 
$
632,895

 
$
594,634

 
 
 
 
Less: Termination income

 

 
 
 
 
 
1,960

 
818

 
 
 
 
Rental revenue (excluding termination income) 2
75,286

 
71,309

 
$
3,977

 
5.6
 %
 
630,935

 
593,816

 
$
37,119

 
6.3
 %
Less: Operating expenses and real estate taxes
29,228

 
28,449

 
779

 
2.7
 %
 
234,869

 
224,102

 
10,767

 
4.8
 %
NOI (excluding termination income) 2, 3
$
46,058

 
$
42,860

 
$
3,198

 
7.5
 %
 
$
396,066

 
$
369,714

 
$
26,352

 
7.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental revenue (excluding termination income) 2
$
75,286

 
$
71,309

 
$
3,977

 
5.6
 %
 
$
630,935

 
$
593,816

 
$
37,119

 
6.3
 %
Less: Straight-line rent and fair value lease revenue 4
3,672

 
(121
)
 
3,793

 
3,134.7
 %
 
26,469

 
19,878

 
6,591

 
33.2
 %
Add: Lease transaction costs that qualify as rent inducements 5
281

 
107

 
174

 
162.6
 %
 
2,035

 
3,370

 
(1,335
)
 
(39.6
)%
Subtotal
71,895

 
71,537

 
358

 
0.5
 %
 
606,501

 
577,308

 
29,193

 
5.1
 %
Less: Operating expenses and real estate taxes
29,228

 
28,449

 
779