bxp-20200728
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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): July 28, 2020
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 PartnershipDelaware
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:
RegistrantTitle of each classTrading Symbol(s)Name of each exchange on which registered
Boston Properties, Inc.Common Stock, par value $0.01 per shareBXPNew York Stock Exchange
Boston Properties, Inc.Depository Shares Each Representing 1/100th of a share BXP PRBNew 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 July 28, 2020, Boston Properties, Inc. (the “Company”), the general partner of Boston Properties Limited Partnership, issued a press release announcing its financial results for the second quarter of 2020. 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.SCHInline XBRL Taxonomy Extension Schema Document.
*101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.
*101.LABInline XBRL Taxonomy Extension Label Linkbase Document.
*101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.
*101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.
*104Cover 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: July 28, 2020




Document


                    Exhibit 99.1


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Supplemental Operating and Financial Data
for the Quarter Ended June 30, 2020



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 51.2 million square feet and 195 properties, including nine properties under construction/redevelopment, and consists of 176 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 eight 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” as defined in the Private Securities Litigation Reform Act of 1995. You can identify these statements by our use of the words “believes,” “budgeted,” “estimates,” “expects,” “guidance,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “will” and similar expressions that do not relate to historical matters. These statements are based on our current expectations of future events. 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. If our underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, actual results could differ materially from those expressed or implied by the forward-looking statement. These factors include, without limitation, uncertainties and risks related to the impact of the COVID-19 global pandemic, including the duration, scope and severity of the pandemic domestically and internationally; federal, state and local government actions or restrictive measures implemented in response to COVID-19, the effectiveness of such measures and the direct and indirect impact of such measures on our and our tenants' businesses, financial condition, results of operation, cash flows, liquidity and performance, and the U.S. and international economy and economic activity generally; whether new or existing actions/or measures continue to result in increasing unemployment that impact the ability of our residential tenants to generate sufficient income to pay, or make them unwilling to pay, rent in full or at all in a timely manner; the health, continued service and availability of our personnel, including our key personnel and property management teams; the effectiveness or lack of effectiveness of government relief in providing assistance to individuals and large and small businesses, including our tenants, that have suffered significant adverse effects from COVID-19; and the extent of construction delays on our development/redevelopment projects due to work-stoppage orders or disruptions in the supply of materials which could result in our failure to meet the development milestones set forth in any applicable lease agreement, delay the commencement or completion of construction and our anticipated lease-up plans for a development/redevelopment project or our overall development pipeline that may cause returns on investment to be less than projected, and/or increase the costs of construction of new or existing projects. In addition to the risks specific to COVID-19, other 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 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. 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 54.

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 58.




GENERAL INFORMATION
Corporate HeadquartersTrading SymbolInvestor RelationsInquiries
800 Boylston StreetBXPBoston Properties, Inc.Inquiries should be directed to
Suite 1900800 Boylston Street, Suite 1900Michael E. LaBelle
Boston, MA 02199Stock Exchange ListingBoston, MA 02199Executive Vice President, Chief Financial Officer
www.bxp.comNew York Stock Exchangeinvestors.bxp.comat 617.236.3352 or
(t) 617.236.3300investorrelations@bxp.commlabelle@bxp.com
(f) 617.236.3311(t) 617.236.3822
(f) 617.236.3311Sara Buda
Vice President, Investor Relations
at 617.236.3429 or
sbuda@bxp.com
(Cover photo: 20 CityPoint, Waltham, MA)




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Q2 2020
Table of contents
Page
OVERVIEW
Company Profile
FINANCIAL INFORMATION
COVID-19 Impact
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
Funds From Operations (FFO) - Prior Year
Funds Available for Distribution (FAD) - Prior Year






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Q2 2020
Company profile


SNAPSHOT
(as of June 30, 2020)
Fiscal Year-EndDecember 31
Total Properties (includes unconsolidated joint ventures)195
Total Square Feet (includes unconsolidated joint ventures)51.2 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
173.1 million
Closing Price, at the end of the quarter$90.38 per share
Dividend - Quarter/Annualized $0.98/$3.92 per share
Dividend Yield4.34%
Consolidated Market Capitalization 1
$28.9 billion
BXP’s Share of Market Capitalization 1, 2
$28.8 billion
Senior Debt RatingsA- (S&P); 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 key tenets of our business strategy are 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;
invest in the highest quality buildings (primarily office) with unique amenities and desirable locations that are able to maintain high occupancy rates and achieve premium rental rates through economic cycles;
maintain scale and a full-service real estate capability (leasing, development, construction and property management) in our markets 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 acquisitions, dispositions, repositioning and development, throughout the real estate investment cycle, (3) provide superior service to our tenants and (4) develop and manage our assets in the most sustainable manner possible;
be astute in market timing for investment decisions by acquiring properties in times of opportunity, developing new properties in times of growth and selling assets at attractive prices, resulting in continuous portfolio refreshment;
ensure a strong balance sheet to maintain consistent access to capital and the resultant ability to make new investments at opportune points in time; and
foster a culture and reputation of integrity, excellence and purposefulness, making us the employer of choice for talented real estate professionals, the landlord and developer of choice for our customers, as well as the counterparty of choice for real estate industry participants.
MANAGEMENT
Board of DirectorsManagement
Joel I. KleinChairman of the BoardOwen D. ThomasChief Executive Officer
Owen D. ThomasChief Executive OfficerDouglas T. LindePresident
Douglas T. LindePresidentRaymond A. RitcheySenior Executive Vice President
Kelly A. AyotteChair of the Compensation CommitteeMichael E. LaBelleExecutive Vice President, Chief Financial Officer and Treasurer
Bruce W. Duncan
Karen E. DykstraPeter D. JohnstonExecutive Vice President, Washington, DC Region
Carol B. EinigerBryan J. KoopExecutive Vice President, Boston Region
Diane J. HoskinsRobert E. PesterExecutive Vice President, San Francisco Region
Matthew J. LustigChair of Nominating & Corporate Governance CommitteeJohn F. PowersExecutive Vice President, New York Region
Frank D. BurtSenior Vice President and Chief Legal Officer
David A. TwardockChair of Audit CommitteeMichael R. WalshSenior Vice President and Chief Accounting Officer
William H. Walton, IIIDonna GarescheSenior Vice President and Chief Human Resources Officer
James Whalen
Senior Vice President and Chief Information Officer


____________________
1For additional detail, see page 27.
2For the Company’s definitions and related disclosures, see the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

1


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Q2 2020
COVID-19 Impact

Commencing in mid March 2020, the COVID-19 pandemic began to have an impact on the United States. Consequently, the Company’s financial results have been adversely impacted for the three months ended June 30, 2020. Set forth below are the details related to the effects of the COVID-19 pandemic to the Company’s operations for the three months ended June 30, 2020.
(unaudited and dollars in thousands)
For the second quarter of 2020, Revenue was $654,773 and Net income attributable to Boston Properties, Inc. common shareholders was $266,525. For the second quarter of 2019, Revenue was $733,741 and Net income attributable to Boston Properties, Inc. common shareholders was $164,318.

BXP’s Share of Revenue1 for the second quarter of 2020 was $638,485, marking a decrease of $60,158 from Q2 2019. Included in BXP’s Share for Q2 2020 is an aggregate of $69,129 of primarily COVID-19 related decreases consisting of:
$26,325 of write-offs associated with accrued rent (included within straight-line rent)2,
$14,707 of write-offs associated with accounts receivable2,,
$13,352 decrease in parking and other revenue2,, and
$14,745 decrease due to the closure of our only hotel.

Funds from Operations (“FFO”) attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) (Basic FFO)1, 3 for Q2 2020 was $263,243, marking a decrease of $44,576 from Q2 2019. Included in Q2 2020 is an aggregate of $62,022 of BXP’s Share of primarily COVID-19 related decreases consisting of:
$26,325 of write-offs associated with accrued rent (included within straight-line rent)2,,
$14,707 of write-offs associated with accounts receivable2,,
$13,352 decrease in parking and other revenue2,, and
$7,638 decrease in NOI due to the closure of our only hotel.

BXP’s Share of Same Property NOI (excluding termination income)1, 4 was $368,834, marking a decrease of $44,575 from Q2 2019. Included in Q2 2020 is an aggregate of $59,489 of BXP’s Share of primarily COVID-19 related decreases consisting of:
$24,729 of write-offs associated with accrued rent (included within straight-line rent)2,,
$13,999 of write-offs associated with accounts receivable2,,
$13,123 decrease in parking and other revenue2,, and
$7,638 decrease in NOI due to the closure of our only hotel.

BXP’s Share of Same Property NOI (excluding termination income) - cash1, 4 was $349,808, marking a decrease of $39,376 from Q2 2019. Included in Q2 2020 is an aggregate of $49,511 of BXP’s Share of primarily COVID-19 related decreases consisting of:
$14,751 decrease in lease revenue, primarily related to COVID-19 cash rent abatements and deferrals2,
$13,999 of write-offs associated with accounts receivable2,,
$13,123 decrease in parking and other revenue2,, and
$7,638 decrease in NOI due to the closure of our only hotel.

Funds Available for Distribution (“FAD”)1, 5 was $153,660 for Q2 2020, a decrease of $70,059 from Q2 2019. The distributions to common shareholders and unitholders (excluding any special distributions) were $169,701 for Q2 2020. Included in Q2 2020, is an aggregate of $52,248 of BXP’s Share of primarily COVID-19 related decreases consisting of:
$16,551 decrease in lease revenue, primarily related to COVID-19 cash rent abatements and deferrals2,
$14,707 of write-offs associated with accounts receivable2,,
$13,352 decrease in parking and other revenue2,, and
$7,638 decrease in NOI due to the closure of our only hotel.
_____________
1See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.
2For additional information, see page 58.
3For quantitative reconciliations of FFO for the three months ended June 30, 2020 and June 30, 2019, see pages 6 and 65, respectively.
4For a quantitative reconciliation for the three months ended June 30, 2020, see page 10.
5For quantitative reconciliations of FAD for the three months ended June 30, 2020 and June 30, 2019, see pages 7 and and 66, respectively.
2


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Q2 2020
Financial highlights

(unaudited and in thousands, except ratios and per share amounts)
Three Months Ended
30-Jun-2031-Mar-20
Net income attributable to Boston Properties, Inc. common shareholders$266,525  $497,496  
Net income attributable to Boston Properties, Inc. per share - diluted$1.71  $3.20  
FFO attributable to Boston Properties, Inc. common shareholders 1
$236,908  $284,062  
Diluted FFO per share 1
$1.52  $1.83  
Dividends per common share$0.98  $0.98  
Funds available for distribution to common shareholders and common unitholders (FAD) 2
$153,660  $235,890  
Selected items:
Revenue$654,773  $752,556  
Recoveries from tenants$98,393  $120,942  
Service income from tenants$1,115  $2,972  
BXP’s Share of revenue 3
$638,485  $720,387  
BXP’s Share of straight-line rent 3
$22,747  $31,262  
BXP’s Share of write-offs associated with accrued rent (included within straight-line rent) 3
$(26,325) $(1,526) 
BXP’s Share of write-offs associated with accounts receivable (included within lease revenue) 3
$(14,707) $(815) 
BXP’s Share of fair value lease revenue 3, 4
$2,548  $3,189  
BXP’s Share of termination income 3
$2,988  $2,161  
Ground rent expense$3,468  $3,574  
Capitalized interest$13,717  $14,149  
Capitalized wages$3,401  $2,826  
Income (loss) from unconsolidated joint ventures$1,832  $(369) 
BXP’s share of FFO from unconsolidated joint ventures 5
$16,898  $17,963  
Net income (loss) attributable to noncontrolling interests in property partnerships$(767) $19,486  
FFO attributable to noncontrolling interests in property partnerships 6
$21,713  $37,113  
Balance Sheet items:
Above-market rents (included within Prepaid Expenses and Other Assets)$6,927  $8,197  
Below-market rents (included within Other Liabilities)$31,277  $34,706  
Accrued rental income liability (included within Other Liabilities)$125,887  $129,567  
Ratios:
Interest Coverage Ratio (excluding capitalized interest) 7
3.53  4.22  
Interest Coverage Ratio (including capitalized interest) 7
3.11  3.65  
Fixed Charge Coverage Ratio 7
2.68  3.03  
BXP’s Share of Net Debt to BXP’s Share of EBITDAre 8
7.38  6.59  
Change in BXP’s Share of Same Store Net Operating Income (NOI) (excluding termination income) 9
(10.8)%4.8 %
Change in BXP’s Share of Same Store NOI (excluding termination income) - cash 9
(10.1)%5.0 %
FAD Payout Ratio 2
110.44 %71.92 %
Operating Margins [(rental revenue - rental expense)/rental revenue] 62.8 %64.2 %
Occupancy of In-Service Properties92.0 %92.9 %
Capitalization:
Consolidated Debt$13,048,579  $12,061,224  
BXP’s Share of Debt 10
$12,918,703  $11,890,196  
Consolidated Market Capitalization$28,892,634  $28,224,392  
Consolidated Debt/Consolidated Market Capitalization45.16 %42.73 %
BXP’s Share of Market Capitalization 10
$28,762,758  $28,053,364  
BXP’s Share of Debt/BXP’s Share of Market Capitalization 10
44.91 %42.38 %
_____________
1For a quantitative reconciliation of FFO attributable to Boston Properties, Inc. common shareholders and Diluted FFO per share, see page 6.
2For a quantitative reconciliation of FAD, see page 7. FAD Payout Ratio equals distributions to common shareholders and unitholders (excluding any special distributions) divided by FAD.
3See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.
4Represents 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.
5For a quantitative reconciliation for the three months ended June 30, 2020, see page 36.
6For a quantitative reconciliation for the three months ended June 30, 2020, see page 33.
7For a quantitative reconciliation for the three months ended June 30, 2020 and March 31, 2020, see page 31.
8For a quantitative reconciliation for the three months ended June 30, 2020 and March 31, 2020, see page 30.
9For a quantitative reconciliation for the three months ended June 30, 2020, see page 10.
10For a quantitative reconciliation for June 30, 2020, see page 27.
3


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Q2 2020
Consolidated Balance Sheets

(unaudited and in thousands)
30-Jun-2031-Mar-20
ASSETS
Real estate 21,267,915  $21,273,137  
Construction in progress 893,935  804,179  
Land held for future development 414,053  264,893  
Right of use assets - finance leases 237,394  237,394  
Right of use assets - operating leases147,512  148,057  
Less accumulated depreciation(5,292,389) (5,209,487) 
Total real estate17,668,420  17,518,173  
Cash and cash equivalents1,691,047  660,733  
Cash held in escrows300,608  197,845  
Investments in securities32,848  28,101  
Tenant and other receivables, net82,545  89,431  
Related party note receivable, net78,520  78,800  
Notes receivable, net25,480  15,794  
Accrued rental income, net1,069,004  1,059,677  
Deferred charges, net655,813  667,076  
Prepaid expenses and other assets56,768  136,730  
Investments in unconsolidated joint ventures1,339,724  1,377,338  
Total assets$23,000,777  $21,829,698  
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net$2,915,852  $2,919,157  
Unsecured senior notes, net9,633,577  8,393,009  
Unsecured line of credit—  250,000  
Unsecured term loan, net499,150  499,058  
Lease liabilities- finance leases 230,146  227,067  
Lease liabilities - operating leases200,979  200,573  
Accounts payable and accrued expenses328,292  293,831  
Dividends and distributions payable171,077  171,026  
Accrued interest payable95,274  82,388  
Other liabilities 373,281  366,852  
Total liabilities14,447,628  13,402,961  
Commitments and contingencies—  —  
Redeemable deferred stock units6,003  5,854  
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 June 30, 2020 and March 31, 2020
200,000  200,000  
Common stock, $0.01 par value, 250,000,000 shares authorized, 155,701,186 and 155,393,455 issued and 155,622,286 and 155,314,555 outstanding at June 30, 2020 and March 31, 2020, respectively
1,556  1,553  
Additional paid-in capital6,340,665  6,321,475  
Dividends in excess of earnings(302,511) (416,740) 
Treasury common stock at cost, 78,900 shares at June 30, 2020 and March 31, 2020
(2,722) (2,722) 
Accumulated other comprehensive loss(54,921) (55,700) 
Total stockholders’ equity attributable to Boston Properties, Inc.6,182,067  6,047,866  
Noncontrolling interests:
Common units of the Operating Partnership640,491  636,572  
Property partnerships1,724,588  1,736,445  
Total equity8,547,146  8,420,883  
Total liabilities and equity$23,000,777  $21,829,698  
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Q2 2020
Consolidated Income Statements 1


(unaudited and in thousands, except per share amounts)
Three Months Ended
30-Jun-2031-Mar-20
Revenue
Lease$630,119  $710,111  
Parking and other13,946  24,504  
Hotel revenue99  6,825  
Development and management services 8,125  7,879  
Direct reimbursements of payroll and related costs from management services contracts2,484  3,237  
Total revenue654,773  752,556  
Expenses
Operating109,448  127,800  
Real estate taxes130,415  135,019  
Demolition costs(76) 147  
Hotel operating1,973  6,821  
General and administrative 2
37,743  36,454  
Payroll and related costs from management services contracts2,484  3,237  
Transaction costs332  615  
Depreciation and amortization178,188  171,094  
Total expenses460,507  481,187  
Other income (expense)
Income (loss) from unconsolidated joint ventures1,832  (369) 
Gains on sales of real estate203,767  410,165  
Gains (losses) from investments in securities 2
4,552  (5,445) 
Interest and other income (loss)1,305  3,017  
Interest expense(107,142) (101,591) 
Net income298,580  577,146  
Net income attributable to noncontrolling interests
Noncontrolling interest in property partnerships767  (19,486) 
Noncontrolling interest - common units of the Operating Partnership 3
(30,197) (57,539) 
Net income attributable to Boston Properties, Inc.269,150  500,121  
Preferred dividends(2,625) (2,625) 
Net income attributable to Boston Properties, Inc. common shareholders$266,525  $497,496  
INCOME PER SHARE OF COMMON STOCK (EPS)
Net income attributable to Boston Properties, Inc. per share - basic$1.71  $3.20  
Net income attributable to Boston Properties, Inc. per share - diluted$1.71  $3.20  















_____________
1Commencing in mid March 2020, the COVID-19 pandemic began to have an impact on the United States. Consequently, the Company’s financial results have been adversely impacted for the three months ended June 30, 2020. For additional detail, see page 58.
2General and administrative expense includes $4.6 million and $(5.4) million and Gains (losses) from investments in securities include $4.6 million and $(5.4) million for the three months ended June 30, 2020 and March 31, 2020, respectively, related to the Company’s deferred compensation plan.
3For additional detail, see page 6.
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Q2 2020
Funds from operations (FFO) 1


(unaudited and dollars in thousands, except per share amounts)
Three Months Ended
30-Jun-2031-Mar-20
Net income attributable to Boston Properties, Inc. common shareholders$266,525  $497,496  
Add:
Preferred dividends2,625  2,625  
Noncontrolling interest - common units of the Operating Partnership30,197  57,539  
Noncontrolling interests in property partnerships(767) 19,486  
Net income298,580  577,146  
Add:
Depreciation and amortization expense178,188  171,094  
Noncontrolling interests in property partnerships' share of depreciation and amortization 2
(22,480) (17,627) 
BXP's share of depreciation and amortization from unconsolidated joint ventures 3
21,012  18,332  
Corporate-related depreciation and amortization(486) (469) 
Less:
Gain on sale of real estate included within income (loss) from unconsolidated joint ventures5,946  —  
Gains on sales of real estate203,767  410,165  
Noncontrolling interests in property partnerships(767) 19,486  
Preferred dividends2,625  2,625  
FFO attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) (Basic FFO)263,243  316,200  
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of FFO26,335  32,138  
FFO attributable to Boston Properties, Inc. common shareholders 4
$236,908  $284,062  
Boston Properties, Inc.’s percentage share of Basic FFO 90.00 %89.84 %
Noncontrolling interest’s - common unitholders percentage share of Basic FFO10.00 %10.16 %
Basic FFO per share$1.52  $1.83  
Weighted average shares outstanding - basic155,386  155,011  
Diluted FFO per share$1.52  $1.83  
Weighted average shares outstanding - diluted155,407  155,258  

RECONCILIATION TO DILUTED FFO
Three Months Ended
30-Jun-2031-Mar-20
Basic FFO$263,243  $316,200  
Add:
Effect of dilutive securities - stock-based compensation—  —  
Diluted FFO263,243  316,200  
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of diluted FFO26,331  32,092  
Boston Properties, Inc.’s share of Diluted FFO$236,912  $284,108  

RECONCILIATION OF SHARES/UNITS FOR DILUTED FFO
Three Months Ended
30-Jun-2031-Mar-20
Shares/units for Basic FFO172,659  172,549  
Add:
Effect of dilutive securities - stock-based compensation (shares/units)21  247  
Shares/units for Diluted FFO172,680  172,796  
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of Diluted FFO (shares/units)17,273  17,538  
Boston Properties, Inc.’s share of shares/units for Diluted FFO155,407  155,258  
Boston Properties, Inc.’s percentage share of Diluted FFO90.00 %89.85 %
_____________
1See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.
2For a quantitative reconciliation for the three months ended June 30, 2020, see page 33.
3For a quantitative reconciliation for the three months ended June 30, 2020, see page 36.
4The FFO attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) (Basic FFO) is $44,576 less than Q2 2019. Included in the Q2 2020 amounts are BXP’s Share of: $26,325 of write-offs associated with accrued rent (included within straight-line rent, $14,707 of write-offs associated with accounts receivable, a $13,352 decrease in parking and other revenue and a $7,638 decrease in NOI due to the closure of our only hotel. These items decreased Q2 2020 FAD by $62,022. For additional information, see page 58.
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Q2 2020
Funds available for distributions (FAD) 1


(dollars in thousands)
Three Months Ended
30-Jun-2031-Mar-20
Net income attributable to Boston Properties, Inc. common shareholders$266,525  $497,496  
Add:
Preferred dividends2,625  2,625  
Noncontrolling interest - common units of the Operating Partnership30,197  57,539  
Noncontrolling interests in property partnerships(767) 19,486  
Net income298,580  577,146  
Add:
Depreciation and amortization expense178,188  171,094  
Noncontrolling interests in property partnerships’ share of depreciation and amortization 2
(22,480) (17,627) 
BXP’s share of depreciation and amortization from unconsolidated joint ventures 3
21,012  18,332  
Corporate-related depreciation and amortization(486) (469) 
Less:
Gain on sale of real estate included within income (loss) from unconsolidated joint ventures5,946  —  
Gains on sales of real estate203,767  410,165  
Noncontrolling interests in property partnerships(767) 19,486  
Preferred dividends2,625  2,625  
Basic FFO263,243  316,200  
Add:
BXP’s Share of lease transaction costs that qualify as rent inducements 1, 4
1,309  4,023  
BXP’s Share of hedge amortization 1
1,446  1,435  
BXP’s Share of straight-line ground rent expense adjustment 1, 5
992  1,017  
Stock-based compensation10,374  17,525  
Non-real estate depreciation486  469  
Unearned portion of capitalized fees from consolidated joint ventures 6
411  56  
Less:
BXP’s Share of straight-line rent 1
22,747  31,262  
BXP’s Share of fair value lease revenue 1, 7
2,548  3,189  
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
83,024  49,943  
BXP’s Share of maintenance capital expenditures 1, 8
16,246  20,244  
Hotel improvements, equipment upgrades and replacements36  197  
Funds available for distribution to common shareholders and common unitholders (FAD) (A)
$153,660  
9
$235,890  
Distributions to common shareholders and unitholders (excluding any special distributions) (B)
$169,701  $169,652  
FAD Payout Ratio1 (B÷A)
110.44 %71.92 %


_____________
1See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.
2For a quantitative reconciliation for the three months ended June 30, 2020, see page 33.
3For a quantitative reconciliation for the three months ended June 30, 2020, see page 36.
4Consists 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.
5Includes 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.
6See page 60 for additional information.
7Represents 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.
8Maintenance capital expenditures do not include planned capital expenditures related to acquisitions and repositioning capital expenditures.
9The FAD is $70,059 less than Q2 2019. Included in the Q2 2020 amounts are BXP’s Share of: $14,707 of write-offs associated with accounts receivable, a $16,551 decrease in lease revenue, primarily related to COVID-19 cash rent abatements and deferrals, a $13,352 decrease in parking and other revenue and a $7,638 decrease in NOI due to the closure of our only hotel. These items decreased Q2 2020 FAD by $52,248. For additional information, see page 58. For a quantitative reconciliation for the three months ended June 30, 2019, see page 66.
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Q2 2020
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-Jun-2030-Jun-19
Net income attributable to Boston Properties, Inc. common shareholders$266,525  $164,318  
Preferred dividends2,625  2,625  
Net income attributable to Boston Properties, Inc.269,150  166,943  
Net income attributable to noncontrolling interests:
Noncontrolling interest - common units of the Operating Partnership30,197  19,036  
Noncontrolling interest in property partnerships(767) 17,482  
Net income298,580  203,461  
Add:
Interest expense107,142  102,357  
Depreciation and amortization expense178,188  177,411  
Transaction costs332  417  
Payroll and related costs from management services contracts2,484  2,403  
General and administrative expense37,743  35,071  
Less:
Interest and other income (loss)1,305  3,615  
Gains from investments in securities4,552  1,165  
Gains from sales of real estate203,767  1,686  
Income from unconsolidated joint ventures1,832  47,964  
Direct reimbursements of payroll and related costs from management services contracts2,484  2,403  
Development and management services revenue 8,125  9,986  
Net Operating Income (NOI)402,404  454,301  
Add:
BXP’s share of NOI from unconsolidated joint ventures 1
27,911  24,715  
Less:
Partners’ share of NOI from consolidated joint ventures (after priority allocations and income allocation to private REIT shareholders) 2
32,427  45,562  
BXP’s Share of NOI 397,888  433,454  
Less:
Termination income3,309  4,910  
BXP’s share of termination income from unconsolidated joint ventures 1
—  50  
Add:
Partners’ share of termination income from consolidated joint ventures 2
321  (9) 
BXP’s Share of NOI (excluding termination income) $394,900  $428,485  
Net Operating Income (NOI)$402,404  $454,301  
Less:
Termination income3,309  4,910  
NOI from non Same Properties (excluding termination income) 3
18,240  13,604  
Same Property NOI (excluding termination income)380,855  435,787  
Less:
Partners’ share of NOI from consolidated joint ventures (excluding termination income and after priority allocations and income allocation to private REIT shareholders) 2
32,106  45,571  
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
(1,150) 263  
BXP’s share of NOI from unconsolidated joint ventures (excluding termination income) 1
27,911  24,665  
Less:
BXP’s share of NOI from non Same Properties from unconsolidated joint ventures (excluding termination income) 3
6,676  1,735  
BXP’s Share of Same Property NOI (excluding termination income)$368,834  $413,409  
_____________
1For a quantitative reconciliation for the three months ended June 30, 2020, see page 63.
2For a quantitative reconciliation for the three months ended June 30, 2020, see pages 60-61.
3Pages 21-24 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 June 30, 2020 and therefore are no longer a part of the Company’s property portfolio.
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Q2 2020
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-Jun-2030-Jun-19
Net income attributable to Boston Properties, Inc. common shareholders$266,525  $164,318  
Preferred dividends2,625  2,625  
Net income attributable to Boston Properties, Inc.269,150  166,943  
Net income attributable to noncontrolling interests:
Noncontrolling interest - common units of the Operating Partnership30,197  19,036  
Noncontrolling interest in property partnerships(767) 17,482  
Net income298,580  203,461  
Add:
Interest expense107,142  102,357  
Depreciation and amortization expense178,188  177,411  
Transaction costs332  417  
Payroll and related costs from management services contracts2,484  2,403  
General and administrative expense37,743  35,071  
Less:
Interest and other income (loss)1,305  3,615  
Gains from investments in securities4,552  1,165  
Gains from sales of real estate203,767  1,686  
Income from unconsolidated joint ventures1,832  47,964  
Direct reimbursements of payroll and related costs from management services contracts2,484  2,403  
Development and management services revenue 8,125  9,986  
Net Operating Income (NOI)402,404  454,301  
Less:
Straight-line rent17,024  17,017  
Fair value lease revenue2,159  6,012  
Termination income3,309  4,910  
Add:
Straight-line ground rent expense adjustment 1
799  843  
Lease transaction costs that qualify as rent inducements 2
1,616  1,438  
NOI - cash (excluding termination income)382,327  428,643  
Less:
NOI - cash from non Same Properties (excluding termination income) 3
17,130  16,519  
Same Property NOI - cash (excluding termination income)365,197  412,124  
Less:
Partners’ share of NOI - cash from consolidated joint ventures (excluding termination income and after priority allocations and income allocation to private REIT shareholders) 4
33,522  41,862  
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) 3
(166) 334  
BXP’s share of NOI - cash from unconsolidated joint ventures (excluding termination income) 5
22,949  20,357  
Less:
BXP’s share of NOI - cash from non Same Properties from unconsolidated joint ventures (excluding termination income) 3
4,650  1,769  
BXP’s Share of Same Property NOI - cash (excluding termination income)$349,808  $389,184  
_____________
1In 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 $152 and $176 for the three months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, 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.
2Consists 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 7.
3Pages 21-24 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 June 30, 2020 and therefore are no longer a part of the Company’s property portfolio.
4For a quantitative reconciliation for the three months ended June 30, 2020, see page 61.
5For a quantitative reconciliation for the three months ended June 30, 2020, see page 63.
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Q2 2020
Same property net operating income (NOI) by reportable segment

(dollars in thousands)
Office 1
Hotel & Residential 2
Three Months Ended$%Three Months Ended$%
30-Jun-2030-Jun-19ChangeChange30-Jun-2030-Jun-19ChangeChange
Rental Revenue 3
$607,851  $672,801  $9,501  $23,843  
Less: Termination income3,264  4,572  —  —  
Rental revenue (excluding termination income) 3
604,587  668,229  $(63,642) (9.5)%9,501  23,843  $(14,342) (60.2)%
Less: Operating expenses and real estate taxes227,295  243,083  (15,788) (6.5)%5,938  13,202  (7,264) (55.0)%
NOI (excluding termination income) 3, 4
$377,292  $425,146  $(47,854) (11.3)%$3,563  $10,641  $(7,078) (66.5)%
Rental revenue (excluding termination income) 3
$604,587  $668,229  $(63,642) (9.5)%$9,501  $23,843  $(14,342) (60.2)%
Less: Straight-line rent and fair value lease revenue18,145  25,922  (7,777) (30.0)%(76) 22  (98) (445.5)%
Add: Lease transaction costs that qualify as rent inducements 5
1,612  1,438  174  12.1 %—  —  —  — %
Subtotal588,054  643,745  (55,691) (8.7)%9,577  23,821  (14,244) (59.8)%
Less: Operating expenses and real estate taxes227,295  243,083  (15,788) (6.5)%5,938  13,202  (7,264) (55.0)%
Add: Straight-line ground rent expense 6
799  843  (44) (5.2)%—  —  —  — %
NOI - cash (excluding termination income) 3, 4
$361,558  $401,505  $(39,947) (9.9)%$3,639  $10,619  $(6,980) (65.7)%
Consolidated Total 1, 7 (A)
BXP’s share of Unconsolidated Joint Ventures 7 (B)
Three Months Ended$%Three Months Ended$%
30-Jun-2030-Jun-19ChangeChange30-Jun-2030-Jun-19ChangeChange
Rental Revenue 3
$617,352  $696,644  $32,357  $35,114  
Less: Termination income3,264  4,572  —  50  
Rental revenue (excluding termination income) 3
614,088  692,072  $(77,984) (11.3)%32,357  35,064  $(2,707) (7.7)%
Less: Operating expenses and real estate taxes233,233  256,285  (23,052) (9.0)%11,122  12,134  (1,012) (8.3)%
NOI (excluding termination income) 3, 4
$380,855  $435,787  $(54,932) (12.6)%$21,235  $22,930  $(1,695) (7.4)%
Rental revenue (excluding termination income) 3
$614,088  $692,072  $(77,984) (11.3)%$32,357  $35,064  $(2,707) (7.7)%
Less: Straight-line rent and fair value lease revenue18,069  25,944  (7,875) (30.4)%3,076  4,491  (1,415) (31.5)%
Add: Lease transaction costs that qualify as rent inducements 5
1,612  1,438  174  12.1 %140  149  (9) (6.0)%
Subtotal$597,631  $667,566  (69,935) (10.5)%29,421  30,722  (1,301) (4.2)%
Less: Operating expenses and real estate taxes233,233  256,285  (23,052) (9.0)%11,122  12,134  (1,012) (8.3)%
Add: Straight-line ground rent expense 6
799  843  (44) (5.2)%—  —  —  — %
NOI - cash (excluding termination income) 3, 4
$365,197  $412,124  $(46,927) (11.4)%$18,299  $18,588  $(289) (1.6)%
Partners’ share of Consolidated Joint Ventures 7 (C)
BXP’s Share 3, 7, 8, 9, 10
Three Months Ended$