Equibles

8-K

BXP, Inc. (BXP)

8-K 2020-07-29 For: 2020-07-28
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Added on April 08, 2026

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<br>of Incorporation) (Commission File Number) (IRS Employer<br>Identification No.)
Boston Properties Limited Partnership Delaware 0-50209 04-3372948
(State or Other Jurisdiction<br>of Incorporation) (Commission File Number) (IRS Employer<br>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 Name of each exchange on which registered
Boston Properties, Inc. Common Stock, par value 0.01 per share New York Stock Exchange
Boston Properties, Inc. Depository Shares Each Representing 1/100th of a share New York Stock Exchange

All values are in US Dollars.

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 Boston Properties, Inc. Supplemental Operating and Financial Data for the quarter endedJune30, 2020.
*99.2 Press release datedJuly28, 2020.
*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: July 28, 2020

Document

Exhibit 99.1

a20citypoint1.jpg

image663.jpg

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 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: 20 CityPoint, Waltham, MA)

Q2 2020
Table of contents Page
--- ---
OVERVIEW
Company Profile 1
FINANCIAL INFORMATION
COVID-19 Impact 2
Financial Highlights 3
Consolidated Balance Sheets 4
Consolidated Income Statements 5
Funds From Operations (FFO) 6
Funds Available for Distribution (FAD) 7
Net Operating Income (NOI) 8
Same Property Net Operating Income (NOI) by Reportable Segment 10
Capital Expenditures, Tenant Improvement Costs and Leasing Commissions 12
Acquisitions and Dispositions 13
DEVELOPMENT ACTIVITY
Construction in Progress 14
Land Parcels and Purchase Options 16
LEASING ACTIVITY
Leasing Activity 17
PROPERTY STATISTICS
Portfolio Overview 18
Residential and Hotel Performance 19
In-Service Property Listing 21
Top 20 Tenants Listing and Portfolio Tenant Diversification 25
Occupancy by Location 26
DEBT AND CAPITALIZATION
Capital Structure 27
Debt Analysis 28
Senior Unsecured Debt Covenant Compliance Ratios 29
Net Debt to EBITDAre 30
Debt Ratios 31
JOINT VENTURES
Consolidated Joint Ventures 32
Unconsolidated Joint Ventures 34
LEASE EXPIRATION ROLL-OUT
Total In-Service Properties 38
Boston 39
Los Angeles 41
New York 43
San Francisco 45
Washington, DC 47
CBD 49
Suburban 51
RESEARCH COVERAGE, DEFINITIONS AND RECONCILIATIONS
Research Coverage 53
Definitions 54
Reconciliations 58
Consolidated Income Statement - Prior Year 64
Funds From Operations (FFO) - Prior Year 65
Funds Available for Distribution (FAD) - Prior Year 66
Q2 2020
--- ---
Company profile

SNAPSHOT

(as of June 30, 2020)

Fiscal Year-End December 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 Yield 4.34%
Consolidated Market Capitalization ^1^ $28.9 billion
BXP’s Share of Market Capitalization ^1, 2^ $28.8 billion
Senior Debt Ratings A- (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 Directors Management
Joel I. Klein Chairman of the Board Owen D. Thomas Chief Executive Officer
Owen D. Thomas Chief Executive Officer Douglas T. Linde President
Douglas T. Linde President Raymond A. Ritchey Senior Executive Vice President
Kelly A. Ayotte Chair of the Compensation Committee Michael E. LaBelle Executive Vice President, Chief Financial Officer and Treasurer
Bruce W. Duncan
Karen E. Dykstra Peter D. Johnston Executive Vice President, Washington, DC Region
Carol B. Einiger Bryan J. Koop Executive Vice President, Boston Region
Diane J. Hoskins Robert E. Pester Executive Vice President, San Francisco Region
Matthew J. Lustig Chair of Nominating & Corporate Governance Committee John F. Powers Executive Vice President, New York Region
Frank D. Burt Senior Vice President and Chief Legal Officer
David A. Twardock Chair of Audit Committee Michael R. Walsh Senior Vice President and Chief Accounting Officer
William H. Walton, III Donna Garesche Senior Vice President and Chief Human Resources Officer
James Whalen Senior Vice President and Chief Information Officer

____________________

^1^For additional detail, see page 27.

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

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 Revenue^1^ 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 receivable^2,^,

•$13,352 decrease in parking and other revenue^2,^, 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 receivable^2,^,

•$13,352 decrease in parking and other revenue^2,^, 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 receivable^2,^,

•$13,123 decrease in parking and other revenue^2,^, and

•$7,638 decrease in NOI due to the closure of our only hotel.

BXP’s Share of Same Property NOI (excluding termination income) - cash^1, 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 deferrals^2,^

•$13,999 of write-offs associated with accounts receivable^2,^,

•$13,123 decrease in parking and other revenue^2,^, 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 deferrals^2,^

•$14,707 of write-offs associated with accounts receivable^2,^,

•$13,352 decrease in parking and other revenue^2,^, and

•$7,638 decrease in NOI due to the closure of our only hotel.

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^2^For additional information, see page 58.

^3^For quantitative reconciliations of FFO for the three months ended June 30, 2020 and June 30, 2019, see pages 6 and 65, respectively.

^4^For a quantitative reconciliation for the three months ended June 30, 2020, see page 10.

^5^For quantitative reconciliations of FAD for the three months ended June 30, 2020 and June 30, 2019, see pages 7 and and 66, respectively.

Q2 2020
Financial highlights

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

Three Months Ended
30-Jun-20 31-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 Properties 92.0 % 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 Capitalization 45.16 % 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 %

_____________

^1^For a quantitative reconciliation of FFO attributable to Boston Properties, Inc. common shareholders and Diluted FFO per share, see page 6.

^2^For 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.

^3^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^4^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.^^

^5^For a quantitative reconciliation for the three months ended June 30, 2020, see page 36.

^6^For a quantitative reconciliation for the three months ended June 30, 2020, see page 33.

^7^For a quantitative reconciliation for the three months ended June 30, 2020 and March 31, 2020, see page 31.

^8^For a quantitative reconciliation for the three months ended June 30, 2020 and March 31, 2020, see page 30.

^9^For a quantitative reconciliation for the three months ended June 30, 2020, see page 10.

^10^For a quantitative reconciliation for June 30, 2020, see page 27.

Q2 2020
Consolidated Balance Sheets

(unaudited and in thousands)

30-Jun-20 31-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 leases 147,512 148,057
Less accumulated depreciation (5,292,389) (5,209,487)
Total real estate 17,668,420 17,518,173
Cash and cash equivalents 1,691,047 660,733
Cash held in escrows 300,608 197,845
Investments in securities 32,848 28,101
Tenant and other receivables, net 82,545 89,431
Related party note receivable, net 78,520 78,800
Notes receivable, net 25,480 15,794
Accrued rental income, net 1,069,004 1,059,677
Deferred charges, net 655,813 667,076
Prepaid expenses and other assets 56,768 136,730
Investments in unconsolidated joint ventures 1,339,724 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, net 9,633,577 8,393,009
Unsecured line of credit — 250,000
Unsecured term loan, net 499,150 499,058
Lease liabilities- finance leases 230,146 227,067
Lease liabilities - operating leases 200,979 200,573
Accounts payable and accrued expenses 328,292 293,831
Dividends and distributions payable 171,077 171,026
Accrued interest payable 95,274 82,388
Other liabilities 373,281 366,852
Total liabilities 14,447,628 13,402,961
Commitments and contingencies — —
Redeemable deferred stock units 6,003 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 capital 6,340,665 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 Partnership 640,491 636,572
Property partnerships 1,724,588 1,736,445
Total equity 8,547,146 8,420,883
Total liabilities and equity $ 23,000,777 $ 21,829,698
Q2 2020
--- ---
Consolidated Income Statements^1^

(unaudited and in thousands, except per share amounts)

Three Months Ended
30-Jun-20 31-Mar-20
Revenue
Lease $ 630,119 $ 710,111
Parking and other 13,946 24,504
Hotel revenue 99 6,825
Development and management services 8,125 7,879
Direct reimbursements of payroll and related costs from management services contracts 2,484 3,237
Total revenue 654,773 752,556
Expenses
Operating 109,448 127,800
Real estate taxes 130,415 135,019
Demolition costs (76) 147
Hotel operating 1,973 6,821
General and administrative ^2^ 37,743 36,454
Payroll and related costs from management services contracts 2,484 3,237
Transaction costs 332 615
Depreciation and amortization 178,188 171,094
Total expenses 460,507 481,187
Other income (expense)
Income (loss) from unconsolidated joint ventures 1,832 (369)
Gains on sales of real estate 203,767 410,165
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 income 298,580 577,146
Net income attributable to noncontrolling interests
Noncontrolling interest in property partnerships 767 (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

_____________

^1^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. For additional detail, see page 58.

^2^General 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.

^3^For additional detail, see page 6.

Q2 2020
Funds from operations (FFO) ^1^

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

Three Months Ended
30-Jun-20 31-Mar-20
Net income attributable to Boston Properties, Inc. common shareholders $ 266,525 $ 497,496
Add:
Preferred dividends 2,625 2,625
Noncontrolling interest - common units of the Operating Partnership 30,197 57,539
Noncontrolling interests in property partnerships (767) 19,486
Net income 298,580 577,146
Add:
Depreciation and amortization expense 178,188 171,094
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 ventures 5,946 —
Gains on sales of real estate 203,767 410,165
Noncontrolling interests in property partnerships (767) 19,486
Preferred dividends 2,625 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 FFO 26,335 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 FFO 10.00 % 10.16 %
Basic FFO per share $ 1.52 $ 1.83
Weighted average shares outstanding - basic 155,386 155,011
Diluted FFO per share $ 1.52 $ 1.83
Weighted average shares outstanding - diluted 155,407 155,258

RECONCILIATION TO DILUTED FFO

Three Months Ended
30-Jun-20 31-Mar-20
Basic FFO $ 263,243 $ 316,200
Add:
Effect of dilutive securities - stock-based compensation — —
Diluted FFO 263,243 316,200
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of diluted FFO 26,331 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-20 31-Mar-20
Shares/units for Basic FFO 172,659 172,549
Add:
Effect of dilutive securities - stock-based compensation (shares/units) 21 247
Shares/units for Diluted FFO 172,680 172,796
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 FFO 155,407 155,258
Boston Properties, Inc.’s percentage share of Diluted FFO 90.00 % 89.85 %

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^2^For a quantitative reconciliation for the three months ended June 30, 2020, see page 33.

^3^For a quantitative reconciliation for the three months ended June 30, 2020, see page 36.

^4^The 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.

Q2 2020
Funds available for distributions (FAD) ^1^

(dollars in thousands)

Three Months Ended
30-Jun-20 31-Mar-20
Net income attributable to Boston Properties, Inc. common shareholders $ 266,525 $ 497,496
Add:
Preferred dividends 2,625 2,625
Noncontrolling interest - common units of the Operating Partnership 30,197 57,539
Noncontrolling interests in property partnerships (767) 19,486
Net income 298,580 577,146
Add:
Depreciation and amortization expense 178,188 171,094
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 ventures 5,946 —
Gains on sales of real estate 203,767 410,165
Noncontrolling interests in property partnerships (767) 19,486
Preferred dividends 2,625 2,625
Basic FFO 263,243 316,200
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 compensation 10,374 17,525
Non-real estate depreciation 486 469
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 replacements 36 197
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 Ratio^1^(B÷A) 110.44 % 71.92 %

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^2^For a quantitative reconciliation for the three months ended June 30, 2020, see page 33.

^3^For a quantitative reconciliation for the three months ended June 30, 2020, see page 36.

^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 60 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.

^9^The 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.

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-20 30-Jun-19
Net income attributable to Boston Properties, Inc. common shareholders $ 266,525 $ 164,318
Preferred dividends 2,625 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 Partnership 30,197 19,036
Noncontrolling interest in property partnerships (767) 17,482
Net income 298,580 203,461
Add:
Interest expense 107,142 102,357
Depreciation and amortization expense 178,188 177,411
Transaction costs 332 417
Payroll and related costs from management services contracts 2,484 2,403
General and administrative expense 37,743 35,071
Less:
Interest and other income (loss) 1,305 3,615
Gains from investments in securities 4,552 1,165
Gains from sales of real estate 203,767 1,686
Income from unconsolidated joint ventures 1,832 47,964
Direct reimbursements of payroll and related costs from management services contracts 2,484 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 income 3,309 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 income 3,309 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

_____________

^1^For a quantitative reconciliation for the three months ended June 30, 2020, see page 63.

^2^For a quantitative reconciliation for the three months ended June 30, 2020, see pages 60-61.

^3^Pages 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.

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-20 30-Jun-19
Net income attributable to Boston Properties, Inc. common shareholders $ 266,525 $ 164,318
Preferred dividends 2,625 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 Partnership 30,197 19,036
Noncontrolling interest in property partnerships (767) 17,482
Net income 298,580 203,461
Add:
Interest expense 107,142 102,357
Depreciation and amortization expense 178,188 177,411
Transaction costs 332 417
Payroll and related costs from management services contracts 2,484 2,403
General and administrative expense 37,743 35,071
Less:
Interest and other income (loss) 1,305 3,615
Gains from investments in securities 4,552 1,165
Gains from sales of real estate 203,767 1,686
Income from unconsolidated joint ventures 1,832 47,964
Direct reimbursements of payroll and related costs from management services contracts 2,484 2,403
Development and management services revenue 8,125 9,986
Net Operating Income (NOI) 402,404 454,301
Less:
Straight-line rent 17,024 17,017
Fair value lease revenue 2,159 6,012
Termination income 3,309 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

_____________

^1^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 $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.

^2^Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 7.

^3^Pages 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.^^

^4^For a quantitative reconciliation for the three months ended June 30, 2020, see page 61.

^5^For a quantitative reconciliation for the three months ended June 30, 2020, see page 63.

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-20 30-Jun-19 Change Change 30-Jun-20 30-Jun-19 Change Change
Rental Revenue ^3^ $ 607,851 $ 672,801 $ 9,501 $ 23,843
Less: Termination income 3,264 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 taxes 227,295 243,083 (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 revenue 18,145 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 — — — — %
Subtotal 588,054 643,745 (55,691) (8.7) 9,577 23,821 (14,244) (59.8) %
Less: Operating expenses and real estate taxes 227,295 243,083 (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-20 30-Jun-19 Change Change 30-Jun-20 30-Jun-19 Change Change
Rental Revenue ^3^ $ 617,352 $ 696,644 $ 32,357 $ 35,114
Less: Termination income 3,264 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 taxes 233,233 256,285 (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 revenue 18,069 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 taxes 233,233 256,285 (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 % Three Months Ended $ %
30-Jun-20 30-Jun-19 Change Change 30-Jun-20 30-Jun-19 Change Change
Rental Revenue ^3^ $ 61,192 $ 73,665 $ 588,517 $ 658,093
Less: Termination income 321 (9) 2,943 4,631
Rental revenue (excluding termination income) ^3^ 60,871 73,674 $ (12,803) (17.4) 585,574 653,462 $ (67,888) (10.4) %
Less: Operating expenses and real estate taxes 27,615 28,366 (751) (2.6) 216,740 240,053 (23,313) (9.7) %
NOI (excluding termination income) ^3,^ ^4^ $ 33,256 $ 45,308 $ (12,052) (26.6) $ 368,834 $ 413,409 $ (44,575) (10.8) %
Rental revenue (excluding termination income) ^3^ $ 60,871 $ 73,674 $ (12,803) (17.4) $ 585,574 $ 653,462 $ (67,888) (10.4) %
Less: Straight-line rent and fair value lease revenue (312) 3,780 (4,092) (108.3) 21,457 26,655 (5,198) (19.5) %
Add: Lease transaction costs that qualify as rent inducements ^5^ 120 — 120 100.0 1,632 1,587 45 2.8 %
Subtotal 61,303 69,894 (8,591) (12.3) 565,749 628,394 (62,645) (10.0) %
Less: Operating expenses and real estate taxes 27,615 28,366 (751) (2.6) 216,740 240,053 (23,313) (9.7) %
Add: Straight-line ground rent expense ^6^ — — — — 799 843 (44) (5.2) %
NOI - cash (excluding termination income) ^3,^ ^4^ $ 33,688 $ 41,528 $ (7,840) (18.9) $ 349,808 $ 389,184 $ (39,376) (10.1) %

All values are in US Dollars.

___________________

^1^Includes 100% share of consolidated joint ventures that are a Same Property.

^2^As a result of COVID-19, the Boston Marriott Cambridge closed in March 2020 and did not re-open during the second quarter of 2020.^^

^3^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^4^For a quantitative reconciliation of net income attributable to Boston Properties, Inc. common shareholders to net operating income (NOI) (excluding termination income) and NOI - cash (excluding termination income), see pages 8-9.

^5^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 7.

^6^Excludes the straight-line impact of approximately $152 and $176 for the three months ended June 30, 2020 and 2019, respectively, in connection with the Company’s 99-year ground and air rights lease at 100 Clarendon Street garage and Back Bay Transit Station. For additional information, see page 9.

Q2 2020
Same property net operating income (NOI) by reportable segment (continued)

^7^For the three months ended June 30, 2020, includes write-offs associated with accounts receivable of approximately $17,401 for Consolidated Total, $4,008 for Partners’ share of Consolidated Joint Ventures, $606 for BXP’s share of Unconsolidated Joint Ventures and $13,999 for BXP’s Share, primarily related to COVID-19. For the three months ended June 30, 2020, includes write-offs associated with straight-line rent of approximately $33,675 for Consolidated Total, $9,262 for Partners’ share of Consolidated Joint Ventures, $316 for BXP’s share of Unconsolidated Joint Ventures and $24,729 for BXP’s Share, primarily related to COVID-19. For additional information, see page 58.

^8^BXP’s Share equals (A) + (B) - (C).

^9^BXP’s Share of Same Store NOI (excluding termination income) was $44,575 less, compared to Q2 2019. Included in the Q2 2020 comparison are BXP’s Share of $24,729 of write-offs associated with accrued rent (included within straight-line rent), $13,999 of write-offs associated with accounts receivable, $13,123 decrease in parking and other revenue and a $7,638 decrease in NOI due to the closure of our only hotel. These items decreased BXP’s Share of Same Store NOI (excluding termination income) by $59,489. For additional information, see page 58.

^10^BXP’s Share of Same Store NOI-cash (excluding termination income) was $39,376 less, compared to Q2 2019. Included in the Q2 2020 comparison are BXP’s Share of $13,999 of write-offs associated with accounts receivable, $14,751 decrease in lease revenue, primarily related to COVID-19 cash rent abatements and deferrals, $13,123 decrease in parking and other revenue and a $7,638 decrease in NOI due to the closure of our only hotel. These items decreased BXP’s Share of Same Store NOI-cash (excluding termination income) by $49,511. For additional information, see page 58.

Q2 2020
Capital expenditures, tenant improvement costs and leasing commissions

(dollars in thousands, except PSF amounts)

CAPITAL EXPENDITURES

Three Months Ended
30-Jun-20 31-Mar-20
Maintenance capital expenditures $ 15,461 $ 20,051
Planned capital expenditures associated with acquisition properties — —
Repositioning capital expenditures 98 (1,985)
Hotel improvements, equipment upgrades and replacements 36 197
Subtotal 15,595 18,263
Add:
BXP’s share of maintenance capital expenditures from unconsolidated joint ventures (JVs) 876 319
BXP’s share of planned capital expenditures associated with acquisition properties from unconsolidated JVs 3,034 1,742
BXP’s share of repositioning capital expenditures from unconsolidated JVs 655 1,247
Less:
Partners’ share of maintenance capital expenditures from consolidated JVs 91 126
Partners’ share of planned capital expenditures associated with acquisition properties from consolidated JVs — —
Partners’ share of repositioning capital expenditures from consolidated JVs 30 (802)
BXP’s Share of Capital Expenditures ^1^ $ 20,039 $ 22,247

2nd GENERATION TENANT IMPROVEMENTS AND LEASING COMMISSIONS ^2^

Three Months Ended
30-Jun-20 31-Mar-20
Square feet 1,278,458 995,023
Tenant improvements and lease commissions PSF $ 102.33 $ 71.96

___________________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^2^Includes 100% of unconsolidated joint ventures.

Q2 2020
Acquisitions and dispositions

For the period from January 1, 2020 through June 30, 2020

(dollars in thousands)

ACQUISITIONS

Investment
Property Location Date Acquired Square Feet Initial Anticipated Future Total In-service Leased (%)
681, 685 and 701 Gateway (50% nominal ownership interest) ^1^ South San Francisco, CA January 28, 2020 312,828 $ 280,751 $ — $ 280,751 100.0 %
Platform 16 (55% ownership interest) ^2^ San Jose, CA February 20, 2020 N/A 74,113 — 74,113 N/A
Fourth + Harrison San Francisco, CA June 26, 2020 N/A 140,147 — 140,147 N/A
Total Acquisitions 312,828 $ 495,011 $ — $ 495,011 100.0 %

DISPOSITIONS

Property Location Date Disposed Square Feet Gross Sales Price Net Cash Proceeds Book Gain ^5^
601, 611 and 651 Gateway (50% ownership interest) ^1^ South San Francisco, CA January 28, 2020 768,236 $ 350,000 $ — $ 217,744
New Dominion Technology Park Herndon, VA February 20, 2020 492,601 256,000 253,971 192,297
Annapolis Junction Building Eight and two land parcels (50% ownership interest) ^3^ Annapolis, MD June 25, 2020 125,685 47,000 22,899 5,833
Capital Gallery ^4^ Washington, DC June 25, 2020 455,000 253,675 246,898 203,765
Total Dispositions 1,841,522 $ 906,675 $ 523,768 $ 619,639

________________

^1^On January 28, 2020, the Company entered into a joint venture with a third party to own, operate and develop properties at its Gateway Commons complex located in South San Francisco, California. The Company contributed its 601, 611 and 651 Gateway properties and development rights with an agreed upon value aggregating approximately $350.0 million for its 50% interest in the joint venture. The partner contributed three properties (including one property under construction) and development rights with an agreed upon value aggregating approximately $280.8 million at closing and will contribute cash totaling approximately $69.2 million in the future for its 50% ownership interest in the joint venture. As a result of the partner’s deferred contribution, the Company has an initial approximately 55% interest in the joint venture. The Company recognized a gain on the retained and sold interest in the real estate contributed to the joint venture totaling approximately $217.7 million during the three months ended March 31, 2020, as the fair value of the real estate exceeded its carrying value.

^2^On February 20, 2020, a joint venture in which the Company has a 55% interest acquired the land underlying the ground lease at its Platform 16 project located in San Jose, California for a purchase price totaling approximately $134.8 million. The joint venture had previously made a deposit totaling $15.0 million, which deposit was credited against the purchase price. Platform 16 consists of a parcel of land totaling approximately 5.6 acres that is expected to support the development of approximately 1.1 million square feet of commercial office space.

^3^Net cash proceeds totaled approximately $45.8 million, of which the Company’s share was approximately $22.9 million. The joint venture distributed approximately $36.8 million, of which the Company’s share totaled approximately $18.4 million, of available cash and the net proceeds from the sale after the pay down of the mortgage loan. The Company’s share of the gain on sale of real estate totaling approximately $5.8 million is included in Income from Unconsolidated Joint Ventures in the Company’s Consolidated Statements of Operations.

^4^On June 25, 2020, the Company sold a portion of its Capital Gallery property located in Washington, DC for a gross sale price of approximately $253.7 million. The portion sold was comprised of approximately 455,000 net rentable square feet of commercial office space. The Company continues to own the land, underground parking garage and remaining commercial office and retail space containing approximately 176,000 net rentable square feet at the property.

^5^Excludes approximately $0.2 million of gains on sales of real estate recognized during the six months ended June 30, 2020 related to gain amounts from sales of real estate occurring in the prior year.

Q2 2020
Construction in progress

as of June 30, 2020

(dollars in thousands)

CONSTRUCTION IN PROGRESS ^1^

Actual/Estimated BXP’s share
Estimated Total Investment ^2^ Amount Drawn at 6/30/2020 Estimated Future Equity Requirement ^2^ Percentage placed in-service ^4^ Net Operating Income (Loss) ^5^(BXP’s share)
Initial Occupancy Stabilization Date Square Feet Investment to Date ^2^ Total Financing Percentage Leased ^3^
Construction Properties Location
Office and Retail
Dock 72 (50% ownership) Q4 2019 Q3 2021 Brooklyn, NY 670,000 $ 203,461 $ 243,150 $ 125,000 $ 93,322 $ 8,011 33 % 34 % $ 816
325 Main Street Q3 2022 Q3 2022 Cambridge, MA 420,000 124,477 418,400 — — 293,923 90 % — % N/A
100 Causeway Street (50% ownership) Q2 2021 Q3 2022 Boston, MA 632,000 145,419 267,300 200,000 — 71,513 — 94 % — % N/A
7750 Wisconsin Avenue (Marriott International Headquarters) (50% ownership) Q3 2022 Q3 2022 Bethesda, MD 734,000 117,558 198,900 127,500 46,933 775 100 % — % N/A
Reston Next (formerly Reston Gateway) Q4 2022 Q4 2023 Reston, VA 1,062,000 266,640 715,300 — — 448,660 72 % — % N/A
2100 Pennsylvania Avenue Q3 2022 Q3 2024 Washington, DC 469,000 88,223 356,100 — — 267,877 61 % — % N/A
Total Office Properties under Construction 3,987,000 945,778 2,199,150 452,500 211,768 1,019,246 75 % 7 % 816
Residential
Hub50House (440 units) (50% ownership) Q4 2019 Q1 2022 Boston, MA 320,000 144,507 153,500 90,000 81,428 421 48 % 81 % 41
The Skylyne (402 units) ^6^ Q3 2020 Q1 2022 Oakland, CA 324,000 235,496 263,600 — — 28,104 — — % N/A
Total Residential Properties under Construction 644,000 380,003 417,100 90,000 81,428 28,525 48 % 30 % 41
Redevelopment Properties
One Five Nine East 53rd (55% ownership) Q3 2020 Q1 2021 New York, NY 220,000 133,482 150,000 — — 16,518 96 % — % N/A
200 West Street ^7^ Q1 2021 Q4 2021 Waltham, MA 126,000 10,826 47,800 — — 36,974 — % — % N/A
Total Redevelopment Properties under Construction 346,000 144,308 197,800 — — 53,492 61 % — % N/A
Total Properties Under Construction and Redevelopment 4,977,000 $ 1,470,089 $ 2,814,050 $ 542,500 $ 293,196 $ 1,101,263 74 % ^8^ 13 % $ 857
Q2 2020
--- ---
Construction in progress (continued)

PROJECTS FULLY PLACED IN-SERVICE DURING 2020

Actual/Estimated BXP’s share
Estimated Total Investment ^2^ Amount Drawn at 6/30/2020 Estimated Future Equity Requirement ^2^ Net Operating Income (Loss) ^5^(BXP’s share)
Initial Occupancy Stabilization Date Square feet Investment to Date ^2^ Total Financing Percentage Leased ^3^
Location
17Fifty Presidents Street Q1 2020 Q1 2020 Reston, VA 275,809 $ 130,839 $ 142,900 $ — $ — $ 12,061 100 % $ 2,302
20 CityPoint Q3 2019 Q1 2021 Waltham, MA 211,476 77,413 97,000 — — 19,587 62 % 1,041
Total Projects Fully Placed In-Service 487,285 $ 208,252 $ 239,900 $ — $ — $ 31,648 84 % $ 3,343

_____________

^1^A project is classified as Construction in Progress when (1) construction or supply contracts have been signed, physical improvements have commenced or a lease has been signed and (2) capitalized interest has commenced.

^2^Includes income (loss) and interest carry on debt and equity investment.

^3^Represents percentage leased as of July 24, 2020, including leases with future commencement dates.

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

^5^Amounts represent Net Operating Income (Loss) for the three months ended June 30, 2020. See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^6^This development is subject to a 99-year ground lease (including extension options) with an option to purchase in the future.

^7^Represents a portion of the property under redevelopment for conversion to laboratory space.

^8^Excludes residential units.

Q2 2020
Land parcels and purchase options

as of June 30, 2020

OWNED LAND PARCELS

Location Approximate Developable Square Feet ^1^
Reston, VA 3,137,000
San Jose, CA ^2^ 2,199,000
New York, NY (25% ownership) 2,000,000
Princeton, NJ 1,650,000
San Jose, CA (55% ownership) 1,078,000
San Francisco, CA 820,000
South San Francisco, CA (50% Ownership) 640,000
Waltham, MA 605,000
Washington, DC (50% ownership) 520,000
Springfield, VA 422,000
Santa Clara, CA ^2^ 414,000
Marlborough, MA 400,000
Dulles, VA 310,000
Total 14,195,000

VALUE CREATION PIPELINE - LAND PURCHASE OPTIONS

Location Approximate Developable Square Feet ^1^
Boston, MA 1,300,000
Cambridge, MA 330,000
Total 1,630,000

__________________

^1^Represents 100%.

^2^Excludes the existing square footage at in-service properties being held for future re-development as listed and noted on page 23.

Q2 2020
Leasing activity

for the three months ended June 30, 2020

ALL IN-SERVICE PROPERTIES

Net (increase)/decrease in available space (SF) Total
Vacant space available at the beginning of the period 3,185,072
Less:
Property dispositions/properties taken out of service ^1^ 150,193
Add:
Properties placed (and partially placed) in-service ^2^ 83,857
Leases expiring or terminated during the period 1,750,629
Total space available for lease 4,869,365
1st generation leases 20,551
2nd generation leases with new tenants 490,659
2nd generation lease renewals 787,799
Total space leased 1,299,009
Vacant space available for lease at the end of the period 3,570,356
Net (increase)/decrease in available space (385,284)
Second generation leasing information: ^3^
Leases commencing during the period (SF) 1,278,458
Weighted average lease term (months) 129
Weighted average free rent period (days) 184
Total transaction costs per square foot ^4^ 102.33
Increase (decrease) in gross rents ^5^ 0.20
Increase (decrease) in net rents ^6^ (0.79)

All values are in US Dollars.

All leases (SF) Incr (decr) in 2nd generation cash rents ^7^ Total square feet of leases executed in the quarter ^8, 9^
1st generation 2nd generation total ^7^ gross ^5^ net ^6^
Boston — 67,803 67,803 15.71 % 21.78 % 143,296
Los Angeles — 41,494 41,494 11.48 % 18.09 % 10,866
New York — 682,297 682,297 (0.32) % (2.07) % 64,711
San Francisco 4,330 130,869 135,199 21.84 % 32.03 % 25,546
Washington, DC 16,221 355,995 372,216 (13.42) % (19.63) % 697,792
Total / Weighted Average 20,551 1,278,458 1,299,009 0.20 % (0.79) % 942,211

_____________

^1^Total square feet of property dispositions/properties taken out of service in Q2 2020 consists of 24,508 square feet due to the partial sale of Capital Gallery and 125,685 square feet due to the sale of Annapolis Junction Building Eight.

^2^Total square feet of properties placed (and partially placed) in-service in Q2 2020 consists of 79,527 square feet at 20 CityPoint and 4,330 square feet at 685 Gateway.

^3^Second generation leases are defined as leases for space that had previously been leased by the Company. Of the 1,278,458 square feet of second generation leases that commenced in Q2 2020, leases for 1,016,090 square feet were signed in prior periods.

^4^Total transaction costs include tenant improvements and leasing commissions, but exclude free rent concessions.

^5^Represents the increase/(decrease) in gross rent (base rent plus expense reimbursements) on the new vs. expired leases on the 1,178,430 square feet of second generation leases that had been occupied within the prior 12 months; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis (e.g., the tenant is occupying “swing space”).

^6^Represents the increase/(decrease) in net rent (gross rent less operating expenses) on the new vs. expired leases on the 1,178,430 square feet of second generation leases that had been occupied within the prior 12 months; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis (e.g., the tenant is occupying “swing space”).

^7^Represents leases for which rental revenue recognition commenced in accordance with GAAP during the quarter.

^8^Amounts shown in this column exclude COVID-19 caused lease modifications covering an aggregate of 3,099,343 square feet that were executed in the second quarter of 2020 to provide cash rent deferral and/or abatement in the aggregate amount of approximately $16.6 million in the second quarter representing BXP’s Share. For additional information, see page 58. Of these lease modifications, the lease terms associated with 296,989 square feet were extended for a period of 12 or more months.

^9^Represents leases executed in the quarter for which the Company either (1) commenced rental revenue recognition in such quarter or (2) will commence rental revenue recognition in subsequent quarters, in accordance with GAAP, and includes leases at properties currently under development. The total square feet of leases executed in the current quarter for which the Company recognized rental revenue in the current quarter is 262,368.

Q2 2020
Portfolio overview

for the three months ended June 30, 2020

(dollars in thousands)

Rentable square footage of in-service properties by location and unit type ^1, 2^

Office Retail Residential Hotel Total
Boston 13,787,157 1,106,227 229,670 330,000 15,453,054
Los Angeles 2,181,903 124,932 — — 2,306,835
New York 10,481,640 395,923 — — 10,877,563
San Francisco 7,484,888 321,714 — — 7,806,602
Washington, DC 8,300,986 667,808 822,436 — 9,791,230
Total 42,236,574 2,616,604 1,052,106 330,000 46,235,284
% of Total 91.35 % 5.66 % 2.28 % 0.71 % 100.00 %

Rental revenue of in-service properties by unit type ^1^

Office ^3^ Retail ^4^ Residential Hotel ^5^ Total
Consolidated $ 615,842 $ 19,496 $ 8,815 $ 11 $ 644,164
Less:
Partners’ share from consolidated joint ventures ^6^ 57,306 2,861 — — 60,167
Add:
BXP’s share from unconsolidated joint ventures ^7^ 41,982 1,169 724 — 43,875
BXP’s Share of Rental revenue ^1^ $ 600,518 $ 17,804 $ 9,539 $ 11 $ 627,872
% of Total 95.64 % 2.84 % 1.52 % — % 100.00 %

Percentage of BXP’s Share of net operating income (NOI) (excluding termination income) by location ^1,^ ^8^

CBD Suburban Total
Boston 25.85 % 8.16 % 34.01 %
Los Angeles 3.80 % — % 3.80 %
New York 21.08 % 2.68 % 23.76 %
San Francisco 20.14 % 3.36 % 23.50 %
Washington, DC 6.12 % 8.81 % 14.93 %
Total 76.99 % 23.01 % 100.00 %

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^2^Includes 100% of the rentable square footage of the Company’s In-Service Properties. For additional detail relating to the Company’s In-Service Properties, see pages 21-24.

^3^Includes the impact of write-offs associated with accounts receivable of approximately $6,970, $2,877, $140 and $4,233 for Consolidated, Partners’ share from consolidated joint ventures, BXP’s share of unconsolidated joint ventures and BXP’s Share of Rental Revenue, respectively. Includes the impact of write-offs associated with accrued rent of approximately $12,897, $5,354, $0 and $7,543 for Consolidated, Partners’ share from consolidated joint ventures, BXP’s share of unconsolidated joint ventures and BXP’s Share of Rental Revenue, respectively.

^4^Includes the impact of write-offs associated with accounts receivable of approximately $11,054, $1,411, $831 and $10,474 for Consolidated, Partners’ share from consolidated joint ventures, BXP’s share of unconsolidated joint ventures and BXP’s Share of Rental Revenue, respectively. Includes the impact of write-offs associated with accrued rent of approximately $23,047, $4,929, $664 and $18,782 for Consolidated, Partners’ share from consolidated joint ventures, BXP’s share of unconsolidated joint ventures and BXP’s Share of Rental Revenue, respectively.

^5^Excludes approximately $88 of revenue from retail tenants that is included in Retail.

^6^See page 61 for additional information.

^7^See page 63 for additional information.

^8^BXP’s Share of NOI (excluding termination income) is a non-GAAP financial measure. For a quantitative reconciliation of net income attributable to Boston Properties, Inc. common shareholders to BXP’s Share of NOI (excluding termination income), see page 8.

Q2 2020
Residential and hotel performance

(dollars in thousands)

RESULTS OF OPERATIONS

Residential ^1^ Hotel ^2^
Three Months Ended Three Months Ended
30-Jun-20 31-Mar-20 30-Jun-20 31-Mar-20
Rental Revenue ^3^ $ 9,402 $ 9,956 $ 99 $ 6,825
Less: Operating expenses and real estate taxes 3,965 4,064 1,973 6,821
Net Operating Income (NOI) ^3^ 5,437 5,892 (1,874) 4
Add: BXP’s share of NOI from unconsolidated joint ventures 41 (35) N/A N/A
BXP’s Share of NOI ^3^ $ 5,478 $ 5,857 $ (1,874) $ 4
Rental Revenue ^3^ $ 9,402 $ 9,956 $ 99 $ 6,825
Less: Straight line rent and fair value lease revenue (69) (133) (6) (6)
Subtotal 9,471 10,089 105 6,831
Less: Operating expenses and real estate taxes 3,965 4,064 1,973 6,821
NOI - cash basis ^3^ 5,506 6,025 (1,868) 10
Add: BXP’s share of NOI-cash from unconsolidated joint ventures 41 (35) N/A N/A
BXP’s Share of NOI - cash basis ^3^ $ 5,547 $ 5,990 $ (1,868) $ 10

RENTAL RATES AND OCCUPANCY - Year-over-Year

Three Months Ended Percent
30-Jun-20 30-Jun-19 Change
The Avant at Reston Town Center (359 units), Reston, VA ^3, 4^
Average Monthly Rental Rate $ 2,371 $ 2,405 (1.41) %
Average Rental Rate Per Occupied Square Foot $ 2.60 $ 2.63 (1.14) %
Average Physical Occupancy 89.51 % 94.24 % (5.02) %
Average Economic Occupancy 88.37 % 93.77 % (5.76) %
The Lofts at Atlantic Wharf (86 units), Boston, MA ^3, 4^
Average Monthly Rental Rate $ 4,530 $ 4,481 1.09 %
Average Rental Rate Per Occupied Square Foot $ 5.01 $ 4.92 1.83 %
Average Physical Occupancy 91.86 % 94.96 % (3.26) %
Average Economic Occupancy 91.71 % 95.39 % (3.86) %
Signature at Reston (508 units), Reston, VA ^3, 4, 5^
Average Monthly Rental Rate $ 2,320 $ 2,378 (2.44) %
Average Rental Rate Per Occupied Square Foot $ 2.45 $ 2.57 (4.67) %
Average Physical Occupancy 81.50 % 64.37 % 26.61 %
Average Economic Occupancy 76.72 % 58.66 % 30.79 %
Proto Kendall Square (280 units), Cambridge, MA ^3, 4^
Average Monthly Rental Rate $ 2,891 $ 2,864 0.94 %
Average Rental Rate Per Occupied Square Foot $ 5.31 $ 5.37 (1.12) %
Average Physical Occupancy 92.50 % 78.81 % 17.37 %
Average Economic Occupancy 91.86 % 75.91 % 21.01 %
Hub50House (440 units) (50% ownership), Boston, MA ^3, 6^
Average Monthly Rental Rate $ 3,360 N/A N/A
Average Rental Rate Per Occupied Square Foot $ 5.26 N/A N/A
Average Physical Occupancy 35.38 % N/A N/A
Average Economic Occupancy 28.97 % N/A N/A
Boston Marriott Cambridge (437 rooms), Cambridge, MA^2, 4^
Average Occupancy — % 89.10 % (100.00) %
Average Daily Rate $ — $ 318.28 (100.00) %
Revenue Per Available Room $ — $ 283.73 (100.00) %
Q2 2020
--- ---
Residential and hotel performance (continued)

_____________

^1^Includes retail space.

^2^As a result of COVID-19, the Boston Marriott Cambridge closed in March 2020 and did not re-open during the second quarter of 2020.^^

^3^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^4^Excludes retail space.

^5^This property was completed and fully placed in-service on June 7, 2018 and is in its initial lease-up period with expected stabilization in the fourth quarter of 2020.

^6^This property was 81% placed in-service at June 30, 2020 and is in its initial lease-up period with expected stabilization in the first quarter of 2022.

Q2 2020
In-service property listing

as of June 30, 2020

Sub Market Number of Buildings Square Feet Leased % ^1^ Annualized Rental Obligations Per Leased SF ^2^
BOSTON
Office
200 Clarendon Street CBD Boston MA 1 1,768,279 98.5 % $ 69.72
100 Federal Street (55% ownership) CBD Boston MA 1 1,238,461 99.5 % 64.25
800 Boylston Street - The Prudential Center CBD Boston MA 1 1,235,538 94.1 % 64.10
111 Huntington Avenue - The Prudential Center CBD Boston MA 1 860,455 100.0 % 68.84
Atlantic Wharf Office (55% ownership) CBD Boston MA 1 793,823 100.0 % 72.50
Prudential Center (retail shops) ^3, 4^ CBD Boston MA 1 594,771 97.7 % 87.00
101 Huntington Avenue - The Prudential Center CBD Boston MA 1 506,476 100.0 % 54.27
The Hub on Causeway - Podium (50% ownership) ^4, 5, 6^ CBD Boston MA 1 382,497 99.4 % 63.67
888 Boylston Street - The Prudential Center CBD Boston MA 1 363,320 100.0 % 76.74
Star Market at the Prudential Center ^3^ CBD Boston MA 1 57,236 100.0 % 59.70
Subtotal 10 7,800,856 98.4 % $ 68.48
145 Broadway ^6^ East Cambridge MA 1 488,862 98.5 % $ 80.66
355 Main Street East Cambridge MA 1 259,640 99.0 % 76.05
90 Broadway East Cambridge MA 1 223,771 100.0 % 71.44
255 Main Street East Cambridge MA 1 215,394 100.0 % 81.54
300 Binney Street East Cambridge MA 1 195,191 100.0 % 58.54
150 Broadway East Cambridge MA 1 177,226 100.0 % 80.69
105 Broadway East Cambridge MA 1 152,664 100.0 % 69.57
250 Binney Street East Cambridge MA 1 67,362 100.0 % 46.44
University Place Mid-Cambridge MA 1 195,282 100.0 % 53.15
Subtotal 9 1,975,392 99.5 % $ 72.14
Bay Colony Corporate Center Route 128 Mass Turnpike MA 4 1,001,136 86.5 % $ 45.20
Reservoir Place Route 128 Mass Turnpike MA 1 526,985 89.3 % 38.07
880 & 890 Winter Street ^6^ Route 128 Mass Turnpike MA 2 392,568 78.0 % 42.05
140 Kendrick Street Route 128 Mass Turnpike MA 3 380,987 67.8 % 53.52
Weston Corporate Center Route 128 Mass Turnpike MA 1 356,995 100.0 % 57.07
Waltham Weston Corporate Center Route 128 Mass Turnpike MA 1 301,607 92.7 % 40.38
230 CityPoint Route 128 Mass Turnpike MA 1 296,212 96.6 % 41.51
10 CityPoint Route 128 Mass Turnpike MA 1 241,199 98.1 % 51.46
20 CityPoint ^6^ Route 128 Mass Turnpike MA 1 211,476 62.4 % 49.88
77 CityPoint Route 128 Mass Turnpike MA 1 209,708 93.8 % 50.20
200 West Street ^6, 7^ Route 128 Mass Turnpike MA 1 134,917 100.0 % 39.68
1265 Main Street (50% ownership) ^5^ Route 128 Mass Turnpike MA 1 114,969 100.0 % 45.05
Reservoir Place North Route 128 Mass Turnpike MA 1 73,258 100.0 % 44.91
195 West Street Route 128 Mass Turnpike MA 1 63,500 — % —
The Point ^3^ Route 128 Mass Turnpike MA 1 16,300 84.7 % 48.88
191 Spring Street Route 128 Northwest MA 1 170,997 100.0 % 45.36
Lexington Office Park Route 128 Northwest MA 2 166,775 70.7 % 31.51
201 Spring Street Route 128 Northwest MA 1 106,300 100.0 % 44.95
33 Hayden Avenue Route 128 Northwest MA 1 80,872 100.0 % 79.45
32 Hartwell Avenue Route 128 Northwest MA 1 69,154 100.0 % 28.59
100 Hayden Avenue Route 128 Northwest MA 1 55,924 100.0 % 44.48
181 Spring Street Route 128 Northwest MA 1 55,793 100.0 % 43.87
92 Hayden Avenue Route 128 Northwest MA 1 31,100 100.0 % 43.66
17 Hartwell Avenue Route 128 Northwest MA 1 30,000 100.0 % 47.71
Subtotal 31 5,088,732 87.3 % $ 45.65
Boston Office Total: 50 14,864,980 94.8 % $ 61.75
Residential
Proto Kendall Square (280 units) East Cambridge MA 1 166,717
The Lofts at Atlantic Wharf (86 units) CBD Boston MA 1 87,097
Boston Residential Total: 2 253,814
Q2 2020
--- ---
In-service property listing (continued)

as of June 30, 2020

Sub Market Number of Buildings Square Feet Leased % ^1^ Annualized Rental Obligations Per Leased SF ^2^
BOSTON (continued)
Hotel
Boston Marriott Cambridge (437 rooms) East Cambridge MA 1 334,260
Boston Hotel Total: 1 334,260
Boston Total: 53 15,453,054
LOS ANGELES
Office
Colorado Center (50% ownership) ^5^ West Los Angeles CA 6 1,128,600 100.0 % $ 70.24
Santa Monica Business Park (55% ownership) ^5^ West Los Angeles CA 14 1,103,831 91.9 % 58.78
Santa Monica Business Park Retail (55% ownership) ^3, 5^ West Los Angeles CA 7 74,404 92.3 % 63.25
Subtotal 27 2,306,835 95.9 % $ 64.80
Los Angeles Total: 27 2,306,835 95.9 % $ 64.80
NEW YORK
Office
767 Fifth Avenue (The GM Building) (60% ownership) ^4^ Plaza District NY 1 1,947,730 92.0 % $ 158.69
399 Park Avenue Park Avenue NY 1 1,576,437 88.9 % 100.55
601 Lexington Avenue (55% ownership) Park Avenue NY 1 1,445,155 97.6 % 100.56
599 Lexington Avenue Park Avenue NY 1 1,062,708 95.9 % 96.65
Times Square Tower (55% ownership) ^4^ Times Square NY 1 1,259,713 95.2 % 79.08
250 West 55th Street Times Square / West Side NY 1 966,965 98.3 % 97.42
510 Madison Avenue Fifth/Madison Avenue NY 1 355,083 96.4 % 142.29
Subtotal 7 8,613,791 94.2 % $ 111.12
510 Carnegie Center Princeton NJ 1 234,160 100.0 % $ 37.08
206 Carnegie Center Princeton NJ 1 161,763 100.0 % 35.17
210 Carnegie Center Princeton NJ 1 159,468 79.2 % 37.04
212 Carnegie Center Princeton NJ 1 151,547 64.5 % 34.73
214 Carnegie Center Princeton NJ 1 146,979 43.2 % 46.46
506 Carnegie Center Princeton NJ 1 138,616 80.5 % 36.91
508 Carnegie Center Princeton NJ 1 134,433 100.0 % 41.37
202 Carnegie Center Princeton NJ 1 134,068 96.2 % 40.60
804 Carnegie Center Princeton NJ 1 130,000 100.0 % 39.63
504 Carnegie Center Princeton NJ 1 121,990 100.0 % 33.52
101 Carnegie Center Princeton NJ 1 121,620 100.0 % 38.10
502 Carnegie Center Princeton NJ 1 121,460 100.0 % 37.56
701 Carnegie Center Princeton NJ 1 120,000 100.0 % 42.81
104 Carnegie Center Princeton NJ 1 102,930 56.9 % 38.56
103 Carnegie Center Princeton NJ 1 96,332 66.8 % 32.94
105 Carnegie Center Princeton NJ 1 69,955 62.7 % 31.92
302 Carnegie Center Princeton NJ 1 64,926 89.3 % 36.95
211 Carnegie Center Princeton NJ 1 47,025 100.0 % 37.56
201 Carnegie Center Princeton NJ — 6,500 100.0 % 27.54
Subtotal 18 2,263,772 86.2 % $ 37.78
New York Total: 25 10,877,563 92.6 % $ 96.89
SAN FRANCISCO
Office
Salesforce Tower CBD San Francisco CA 1 1,420,682 100.0 % $ 102.24
Embarcadero Center Four CBD San Francisco CA 1 941,051 96.8 % 81.10
Embarcadero Center One CBD San Francisco CA 1 822,033 93.1 % 76.20
Embarcadero Center Two CBD San Francisco CA 1 792,696 96.3 % 77.52
Embarcadero Center Three CBD San Francisco CA 1 783,852 98.1 % 70.63
680 Folsom Street CBD San Francisco CA 2 524,793 100.0 % 68.38
Q2 2020
--- ---
In-service property listing (continued)

as of June 30, 2020

Sub Market Number of Buildings Square Feet Leased % ^1^ Annualized Rental Obligations Per Leased SF ^2^
SAN FRANCISCO (continued)
535 Mission Street CBD San Francisco CA 1 307,235 95.7 % 84.51
690 Folsom Street CBD San Francisco CA 1 26,080 100.0 % 72.57
Subtotal 9 5,618,422 97.4 % $ 82.86
Gateway Commons (55% ownership) ^5, 6, 8^ South San Francisco CA 5 1,065,902 81.3 % $ 52.82
Mountain View Research Park Mountain View CA 15 542,264 76.3 % 67.02
2440 West El Camino Real Mountain View CA 1 141,392 87.2 % 79.03
453 Ravendale Drive Mountain View CA 1 29,620 85.8 % 48.17
3625-3635 Peterson Way ^9^ Santa Clara CA 1 218,366 100.0 % 24.17
North First Business Park ^9^ San Jose CA 5 190,636 81.1 % 25.60
Subtotal 28 2,188,180 82.3 % $ 52.01
San Francisco Total: 37 7,806,602 93.2 % $ 75.21
WASHINGTON, DC
Office
Metropolitan Square (20% ownership) ^5^ East End Washington DC 1 654,145 57.9 % $ 68.02
901 New York Avenue (25% ownership) ^5^ East End Washington DC 1 545,199 74.4 % 65.21
601 Massachusetts Avenue East End Washington DC 1 478,818 98.9 % 84.84
Market Square North (50% ownership) ^5^ East End Washington DC 1 417,979 80.2 % 69.59
2200 Pennsylvania Avenue CBD Washington DC 1 458,831 100.0 % 97.66
1330 Connecticut Avenue CBD Washington DC 1 253,941 90.1 % 71.39
Sumner Square CBD Washington DC 1 209,529 91.5 % 54.42
500 North Capitol Street, N.W. (30% ownership) ^5^ Capitol Hill Washington DC 1 230,860 98.5 % 78.90
Capital Gallery ^6, 8^ Southwest Washington DC 1 176,078 87.3 % 56.29
Subtotal 9 3,425,380 83.3 % $ 74.77
South of Market Reston VA 3 623,271 71.9 % $ 55.49
Fountain Square Reston VA 2 505,745 75.5 % 54.12
One Freedom Square Reston VA 1 432,585 61.4 % 53.91
Two Freedom Square Reston VA 1 422,349 100.0 % 49.79
One and Two Discovery Square Reston VA 2 366,990 98.2 % 50.49
One Reston Overlook Reston VA 1 319,519 100.0 % 44.61
17Fifty Presidents Street ^6^ Reston VA 1 275,809 100.0 % 59.90
Reston Corporate Center Reston VA 2 261,046 100.0 % 44.17
Democracy Tower Reston VA 1 259,441 98.4 % 58.74
Fountain Square Retail ^3^ Reston VA 1 216,591 90.1 % 48.58
Two Reston Overlook Reston VA 1 134,615 75.3 % 43.08
Subtotal 16 3,817,961 86.1 % $ 51.78
Wisconsin Place Office Montgomery County MD 1 299,217 87.8 % $ 58.47
Kingstowne Two Springfield VA 1 156,089 67.6 % 37.68
Kingstowne One Springfield VA 1 151,483 92.7 % 39.32
7601 Boston Boulevard Springfield VA 1 108,286 100.0 % 32.77
7435 Boston Boulevard Springfield VA 1 103,557 83.4 % 24.21
8000 Grainger Court Springfield VA 1 88,775 — % —
Kingstowne Retail ^3^ Springfield VA 1 88,288 94.3 % 36.48
7500 Boston Boulevard Springfield VA 1 79,971 100.0 % 16.79
7501 Boston Boulevard Springfield VA 1 75,756 100.0 % 29.64
7450 Boston Boulevard Springfield VA 1 62,402 100.0 % 17.64
7374 Boston Boulevard Springfield VA 1 57,321 100.0 % 18.37
8000 Corporate Court Springfield VA 1 52,539 100.0 % 15.80
7451 Boston Boulevard Springfield VA 1 45,615 67.4 % 27.71
7300 Boston Boulevard Springfield VA 1 32,000 100.0 % 23.18
7375 Boston Boulevard Springfield VA 1 26,865 100.0 % 26.83
Q2 2020
--- ---
In-service property listing (continued)

as of June 30, 2020

Sub Market Number of Buildings Square Feet Leased % ^1^ Annualized Rental Obligations Per Leased SF ^2^
WASHINGTON, DC (continued)
Annapolis Junction Building Seven (50% ownership) ^5^ Anne Arundel County MD 1 127,229 100.0 % 35.84
Annapolis Junction Building Six (50% ownership) ^5^ Anne Arundel County MD 1 119,339 75.2 % 32.09
Subtotal 17 1,674,732 84.8 % $ 35.10
Washington, DC Office Total: 42 8,918,073 84.8 % $ 57.28
Residential
Signature at Reston (508 units) Reston VA 1 517,783
The Avant at Reston Town Center (359 units) Reston VA 1 355,374
Washington, DC Residential Total: 2 873,157
Washington, DC Total: 44 9,791,230
Total In-Service Properties: 186 46,235,284 92.0 % ^10^ $ 72.07 ^10^

_____________

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

^2^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^3^This is a retail property.

^4^Includes 275,868 square feet at Prudential Center (retail shops), 66,806 square feet at The Hub on Causeway - Podium, 343,572 square feet at Times Square Tower and 30,094 square feet at 767 Fifth Avenue (The GM building) of leases terminated by the Company where the tenant is still occupying the space.

^5^This is an unconsolidated joint venture property.

^6^Not included in the Same Property analysis.

^7^During the three months ended September 30, 2019, the Company commenced the redevelopment of a portion of 200 West Street. For additional detail, see page 14.

^8^For additional detail, see page 13.

^9^Property held for redevelopment.

^10^Excludes Hotel and Residential properties. For additional detail, see page 19.

Q2 2020
Top 20 tenants listing and portfolio tenant diversification

as of June 30, 2020

TOP 20 TENANTS

No. Tenant BXP’s Share of Annualized Rental Obligations ^1^
1 salesforce.com 3.49 %
2 Arnold & Porter Kaye Scholer 2.80 %
3 Akamai Technologies 2.13 %
4 Biogen 1.81 %
5 Shearman & Sterling 1.62 %
6 Kirkland & Ellis 1.53 %
7 Google 1.48 %
8 Ropes & Gray 1.40 %
9 WeWork 1.31 %
10 Weil Gotshal & Manges 1.22 %
11 US Government 1.13 %
12 O’Melveny & Myers 1.13 %
13 Wellington Management 1.09 %
14 Aramis (Estee Lauder) 0.97 %
15 Morrison & Foerster 0.96 %
16 Microsoft 0.91 %
17 Millennium Management 0.87 %
18 Bank of America 0.86 %
19 Mass Financial Services 0.85 %
20 Under Armour 0.81 %
BXP’s Share of Annualized Rental Obligations 28.37 %
BXP’s Share of Square Feet ^1^ 22.94 %

NOTABLE SIGNED DEALS ^2^

Tenant Property Square Feet
Fannie Mae Reston Gateway 761,000
Marriott International 7750 Wisconsin Avenue 734,000
Verizon 100 Causeway Street 440,000
Google 325 Main Street 379,000
Wilmer Cutler Pickering Hale 2100 Pennsylvania Avenue 287,000
Microsoft Two Freedom Square 222,500

TENANT DIVERSIFICATION ^1^

chart-4c9337976acf4f6c.jpg

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^2^Represents leases signed with occupancy commencing in the future. The number of square feet is an estimate.

Q2 2020
Occupancy by location

as of June 30, 2020

TOTAL IN-SERVICE OFFICE PROPERTIES ^1^- Quarter-over-Quarter

CBD Suburban Total
Location 30-Jun-20 31-Mar-20 30-Jun-20 31-Mar-20 30-Jun-20 31-Mar-20
Boston 98.7 % 99.1 % 87.3 % 91.4 % 94.8 % 96.5 %
Los Angeles 95.9 % 95.9 % — % — % 95.9 % 95.9 %
New York 94.2 % 96.1 % 86.2 % 86.2 % 92.6 % 94.1 %
San Francisco 97.4 % 97.9 % 82.3 % 83.2 % 93.2 % 93.8 %
Washington, DC 83.3 % 84.5 % 85.7 % 84.9 % 84.8 % 84.7 %
Total Portfolio 95.2 % 95.9 % 85.8 % 87.0 % 92.0 % 92.9 %

chart-2e2189dd3d744b9f.jpg

SAME PROPERTY OFFICE PROPERTIES ^1, 2^- Year-over-Year

CBD Suburban Total
Location 30-Jun-20 30-Jun-19 30-Jun-20 30-Jun-19 30-Jun-20 30-Jun-19
Boston 98.6 % 98.9 % 89.3 % 93.3 % 95.5 % 97.0 %
Los Angeles 95.9 % 96.7 % — % — % 95.9 % 96.7 %
New York 94.2 % 95.3 % 86.2 % 85.2 % 92.6 % 93.2 %
San Francisco 97.4 % 93.1 % 83.4 % 93.2 % 95.1 % 93.1 %
Washington, DC 83.1 % 86.7 % 84.9 % 90.7 % 84.2 % 89.2 %
Total Portfolio 95.1 % 95.1 % 86.5 % 90.9 % 92.4 % 93.8 %

chart-b977205d48244e87.jpg

_____________

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

^2^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

Q2 2020
Capital structure

(in thousands, except percentages)

CONSOLIDATED DEBT

Aggregate Principal
Mortgage Notes Payable $ 2,940,677
Unsecured Line of Credit —
Unsecured Term Loan 500,000
Unsecured Senior Notes, at face value 9,700,000
Outstanding Principal 13,140,677
Discount on Unsecured Senior Notes (17,719)
Deferred Financing Costs, Net (74,379)
Consolidated Debt $ 13,048,579

MORTGAGE NOTES PAYABLE

Interest Rate
Property Maturity Date GAAP Stated Outstanding Principal
University Place August 1, 2021 6.99% 6.94% $ 2,580
601 Lexington Avenue (55% ownership) April 10, 2022 4.79% 4.75% 638,097
767 Fifth Avenue (The GM Building) (60% ownership) June 9, 2027 3.64% 3.43% 2,300,000
Total $ 2,940,677

BOSTON PROPERTIES LIMITED PARTNERSHIP UNSECURED SENIOR NOTES ^1^

Maturity Date Effective Yield (on issue date) Coupon Outstanding Principal
10 Year Unsecured Senior Notes May 15, 2021 4.29% 4.13% $ 850,000
11 Year Unsecured Senior Notes February 1, 2023 3.95% 3.85% 1,000,000
10.5 Year Unsecured Senior Notes September 1, 2023 3.28% 3.13% 500,000
10.5 Year Unsecured Senior Notes February 1, 2024 3.92% 3.80% 700,000
7 Year Unsecured Senior Notes January 15, 2025 3.35% 3.20% 850,000
10 Year Unsecured Senior Notes February 1, 2026 3.77% 3.65% 1,000,000
10 Year Unsecured Senior Notes October 1, 2026 3.50% 2.75% 1,000,000
10 Year Unsecured Senior Notes (“green bonds”) December 1, 2028 4.63% 4.50% 1,000,000
10 Year Unsecured Senior Notes (“green bonds”) June 21, 2029 3.51% 3.40% 850,000
10.5 Year Unsecured Senior Notes March 15, 2030 2.98% 2.90% 700,000
10.75 Year Unsecured Senior Notes January 30, 2031 3.34% 3.25% 1,250,000
$ 9,700,000

CAPITALIZATION

Shares/Units Common Stock Equivalent
Outstanding Equivalents Value ^2^
Common Stock 155,622 155,622 $ 14,065,116
Common Operating Partnership Units 17,470 17,470 1,578,939
5.25% Series B Cumulative Redeemable Preferred Stock (callable on or after March 27, 2018) 80 — 200,000
Total Equity 173,092 $ 15,844,055
Consolidated Debt (A) $ 13,048,579
Add: BXP’s share of unconsolidated joint venture debt ^3^ 1,067,400
Less: Partners’ share of consolidated debt ^4^ 1,197,276
BXP’s Share of Debt ^5^ (B) $ 12,918,703
Consolidated Market Capitalization (C) $ 28,892,634
BXP’s Share of Market Capitalization ^5^(D) $ 28,762,758
Consolidated Debt/Consolidated Market Capitalization (A÷C) 45.16 %
BXP’s Share of Debt/BXP’s Share of Market Capitalization ^5^(B÷D) 44.91 %

_____________

^1^All unsecured senior notes are rated A- (negative), and Baa1 (stable) by S&P and Moody’s, respectively.

^2^Values based on June 30, 2020 closing price of $90.38 per share of common stock, except the Series B Preferred Stock is valued at its fixed liquidation preference.

^3^Amount is calculated based on the Company’s percentage ownership interest in the unconsolidated joint venture entities. For additional detail, see page 34.

^4^Amount is calculated based on the outside partners’ percentage ownership interest in the consolidated joint venture entities. For additional detail, see page 32.

^5^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

Q2 2020
Debt analysis ^1^

as of June 30, 2020

(dollars in thousands)

chart-c5d25b9bdb8d463f.jpg

UNSECURED CREDIT FACILITY - MATURES APRIL 24, 2022

Facility Outstanding at June 30, 2020 Letters of Credit Remaining Capacity at June 30, 2020
Unsecured Line of Credit $ 1,500,000 $ — $ 2,457 $ 1,497,543
Unsecured Term Loan $ 500,000 $ 500,000 N/A $ —

UNSECURED AND SECURED DEBT ANALYSIS

Weighted Average
% of Total Debt Stated Rates GAAP Rates ^2^ Maturity (years)
Unsecured Debt 77.65 % 3.50 % 3.59 % 5.9
Secured Debt 22.35 % 3.72 % 3.90 % 5.8
Consolidated Debt 100.00 % 3.55 % 3.66 % 5.9

FLOATING AND FIXED RATE DEBT ANALYSIS

Weighted Average
% of Total Debt Stated Rates GAAP Rates ^2^ Maturity (years)
Floating Rate Debt 3.83 % 1.15 % 1.24 % 1.8
Fixed Rate Debt 96.17 % 3.65 % 3.75 % 6.0
Consolidated Debt 100.00 % 3.55 % 3.66 % 5.9

_____________

^1^Excludes unconsolidated joint ventures. For information on BXP’s share of unconsolidated joint venture debt, see page 34.

^2^The GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges and the effects of hedging transactions.

Q2 2020
Senior unsecured debt covenant compliance ratios

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

This section presents such ratios as of June 30, 2020 to show that the Company’s Operating Partnership was in compliance with the terms of the Indenture, which has been filed with the SEC. Management is not presenting these ratios for any other purpose or for any other period, and is not intending for these measures to otherwise provide information to investors about the Company’s financial condition or results of operations. Investors should not rely on these measures other than for purposes of testing our compliance with the Indenture.

COVENANT RATIOS AND RELATED DATA

Senior Notes Issued Prior to December 4, 2017 Senior Notes Issued On or After December 4, 2017
Test Actual
Total Outstanding Debt/Total Assets ^1^ Less than 60% 47.2 % 44.0 %
Secured Debt/Total Assets Less than 50% 13.9 % 13.0 %
Interest Coverage (Annualized Consolidated EBITDA to Annualized Interest Expense) Greater than 1.50x 3.60 3.60
Unencumbered Assets/ Unsecured Debt Greater than 150% 225.3 % 248.4 %

_____________

^1^Capitalized Property Value for senior notes issued prior to December 4, 2017 is determined for each property and is the greater of (A) annualized EBITDA capitalized at an 8.0% rate for CBD properties and a 9.0% rate for non-CBD properties, and (B) the undepreciated book value as determined under GAAP. Capitalized property value for senior notes issued on or after December 4, 2017 is determined for each property and is the greater of (x) annualized EBITDA capitalized at 7.0% and (y) the undepreciated book value as determined under GAAP.

Q2 2020
Net Debt to EBITDAre

(dollars in thousands)

Reconciliation of BXP’s Share of EBITDAre and BXP’s Share of EBITDAre – cash ^1^

Three Months Ended
30-Jun-20 31-Mar-20
Net income attributable to Boston Properties, Inc. common shareholders $ 266,525 $ 497,496
Add:
Preferred dividends 2,625 2,625
Noncontrolling interest - common units of the Operating Partnership 30,197 57,539
Noncontrolling interest in property partnerships (767) 19,486
Net income 298,580 577,146
Add:
Interest expense 107,142 101,591
Depreciation and amortization expense 178,188 171,094
Less:
Gains on sales of real estate 203,767 410,165
Income (loss) from unconsolidated joint ventures 1,832 (369)
Add:
BXP’s share of EBITDAre from unconsolidated joint ventures ^2^ 27,807 28,886
EBITDAre ^1^ 406,118 468,921
Less:
Partners’ share of EBITDAre from consolidated joint ventures ^3^ 32,451 47,889
BXP’s Share of EBITDAre ^1^ (A) 373,667 421,032
Add:
Stock-based compensation expense 10,374 17,525
BXP’s Share of straight-line ground rent expense adjustment ^1^ 992 1,017
BXP’s Share of lease transaction costs that qualify as rent inducements ^1^ 1,309 4,023
Less:
BXP’s Share of non-cash termination income adjustment (fair value lease amounts) ^1^ — —
BXP’s Share of straight-line rent ^1^ 22,747 31,262
BXP’s Share of fair value lease revenue ^1^ 2,548 3,189
BXP’s Share of EBITDAre – cash ^1^ $ 361,047 $ 409,146
BXP’s Share of EBITDAre (Annualized) ^4^ (A x 4) $ 1,494,668 $ 1,684,128

Reconciliation of BXP’s Share of Net Debt^1^

30-Jun-20 31-Mar-20
Consolidated debt $ 13,048,579 $ 12,061,224
Add:
Special dividend payable — —
Less:
Cash and cash equivalents 1,691,047 660,733
Cash held in escrow for 1031 exchange 250,607 151,277
Net debt ^1^ 11,106,925 11,249,214
Add:
BXP’s share of unconsolidated joint venture debt ^2^ 1,067,400 1,027,547
Partners’ share of cash and cash equivalents from consolidated joint ventures 129,709 115,520
Less:
BXP’s share of cash and cash equivalents from unconsolidated joint ventures 78,768 93,811
Partners’ share of consolidated joint venture debt ^3^ 1,197,276 1,198,575
BXP’s Share of Net Debt ^1^ (B) $ 11,027,990 $ 11,099,895
BXP’s Share of Net Debt to BXP’s Share of EBITDAre (Annualized) [B ÷ (A x 4)] 7.38 6.59

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^2^For disclosures related to the calculation of BXP’s share from unconsolidated joint ventures for the three months ended June 30, 2020, see pages 34 and 62.

^3^For disclosures related to the calculation of Partners’ share from consolidated joint ventures for the three months ended June 30, 2020, see pages 32 and 60.

^4^BXP’s Share of EBITDAre is annualized and calculated as the product of such amount for the quarter multiplied by four (4).

Q2 2020
Debt ratios

(in thousands, except for ratio amounts)

INTEREST COVERAGE RATIO ^1^

Three Months Ended
30-Jun-20 31-Mar-20
BXP’s Share of interest expense ^1^ $ 107,313 $ 101,738
Less:
BXP’s Share of hedge amortization ^1^ 1,446 1,435
BXP’s Share of amortization of financing costs ^1^ 3,584 3,349
Adjusted interest expense excluding capitalized interest (A) 102,283 96,954
Add:
BXP’s Share of capitalized interest ^1^ 13,705 15,204
Adjusted interest expense including capitalized interest (B) $ 115,988 $ 112,158
BXP’s Share of EBITDAre – cash ^1, 2^(C) $ 361,047 $ 409,146
Interest Coverage Ratio (excluding capitalized interest) (C÷A) 3.53 4.22
Interest Coverage Ratio (including capitalized interest) (C÷B) 3.11 3.65

FIXED CHARGE COVERAGE RATIO ^1^

Three Months Ended
30-Jun-20 31-Mar-20
BXP’s Share of interest expense ^1^ $ 107,313 $ 101,738
Less:
BXP’s Share of hedge amortization ^1^ 1,446 1,435
BXP’s Share of amortization of financing costs ^1^ 3,584 3,349
Add:
BXP’s Share of capitalized interest ^1^ 13,705 15,204
BXP’s Share of maintenance capital expenditures ^1^ 16,246 20,244
Hotel improvements, equipment upgrades and replacements 36 197
Preferred dividends/distributions 2,625 2,625
Total Fixed Charges (A) $ 134,895 $ 135,224
BXP’s Share of EBITDAre – cash ^1, 2^ (B) $ 361,047 $ 409,146
Fixed Charge Coverage Ratio (B÷A) 2.68 3.03

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^2^For a qualitative reconciliation of BXP’s Share of EBITDAre – cash, see page 30.

d

Q2 2020
Consolidated joint ventures

as of June 30, 2020

(unaudited and dollars in thousands)

BALANCE SHEET INFORMATION

Norges Joint Ventures ^1^
Times Square Tower
601 Lexington Avenue / <br>One Five Nine East 53rd Street
767 Fifth Avenue 100 Federal Street Total Consolidated
ASSETS (The GM Building) ^1^ Atlantic Wharf Office Joint Ventures
Real estate, net $ 3,213,839 $ 2,297,211 $ 5,511,050
Cash and cash equivalents 110,790 189,762 300,552
Other assets 273,245 327,363 600,608
Total assets $ 3,597,874 $ 2,814,336 $ 6,412,210
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net $ 2,275,735 $ 637,512 $ 2,913,247
Other liabilities 98,882 88,219 187,101
Total liabilities 2,374,617 725,731 3,100,348
Equity:
Boston Properties, Inc. 735,495 851,668 1,587,163
Noncontrolling interests 487,762 1,236,937 1,724,699 ^2^
Total equity 1,223,257 2,088,605 3,311,862
Total liabilities and equity $ 3,597,874 $ 2,814,336 $ 6,412,210
BXP’s nominal ownership percentage 60% 55%
Partners’ share of cash and cash equivalents ^3^ $ 44,316 $ 85,393 $ 129,709
Partners’ share of consolidated debt ^3, 4^ $ 910,396 $ 286,880 $ 1,197,276

_____________

^1^Certain balances contain amounts that eliminate in consolidation.

^2^Amount excludes preferred shareholders’ capital of approximately $0.1 million.

^3^Amounts represent the partners’ share based on their respective ownership percentages.

^4^Amounts adjusted for basis differentials.

Q2 2020
Consolidated joint ventures (continued)

for the three months ended June 30, 2020

(unaudited and dollars in thousands)

RESULTS OF OPERATIONS^1^

Norges Joint Ventures
Times Square Tower
601 Lexington Avenue / <br>One Five Nine East 53rd Street
767 Fifth Avenue 100 Federal Street Total Consolidated
(The GM Building) Atlantic Wharf Office Joint Ventures
Revenue
Lease ^2^ $ 58,267 $ 92,700 $ 150,967
Write-offs associated with accounts receivable (1,652) (8,060) (9,712)
Straight-line rent 15,617 5,432 21,049
Write-offs associated with straight-line rent (1,357) (21,644) (23,001)
Fair value lease revenue 618 109 727
Termination income 1 714 715
Total lease revenue 71,494 69,251 140,745
Parking and other — 903 903
Total rental revenue ^3^ 71,494 70,154 141,648
Expenses
Operating 28,044 33,329 61,373
Net Operating Income (NOI) 43,450 36,825 80,275
Other income (expense)
Development and management services revenue — 2 2
Interest and other income 55 304 359
Interest expense (21,175) (5,049) (26,224)
Depreciation and amortization expense (18,749) (28,908) (47,657)
General and administrative expense (17) (24) (41)
Total other income (expense) (39,886) (33,675) (73,561)
Net income $ 3,564 $ 3,150 $ 6,714

FUNDS FROM OPERATIONS (FFO)

BXP’s nominal ownership percentage 60% 55%
Norges Joint Ventures
Times Square Tower
601 Lexington Avenue / <br>One Five Nine East 53rd Street
767 Fifth Avenue 100 Federal Street Total Consolidated
Reconciliation of Partners’ share of FFO (The GM Building) Atlantic Wharf Office Joint Ventures
Net income $ 3,564 $ 3,150 $ 6,714
Add: Depreciation and amortization expense 18,749 28,908 47,657
Entity FFO $ 22,313 $ 32,058 $ 54,371
Partners’ NCI ^4^ $ 441 $ (1,208) $ (767)
Partners’ share of depreciation and amortization expense after BXP’s basis differential ^4^ 7,826 14,654 22,480
Partners’ share FFO ^4^ $ 8,267 $ 13,446 $ 21,713
Reconciliation of BXP’s share of FFO
BXP’s share of net income adjusted for partners’ NCI $ 3,123 $ 4,358 $ 7,481
Depreciation and amortization expense - BXP’s basis difference 43 489 532
BXP’s share of depreciation and amortization expense 10,880 13,765 24,645
BXP’s share of FFO $ 14,046 $ 18,612 $ 32,658

_____________

^1^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. For additional, detail, see page 58.

^2^Lease revenue includes recoveries from tenants and service income from tenants.

^3^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^4^Amounts represent the partners’ share based on their respective ownership percentage and is adjusted for basis differentials and the allocations of management and other fees and depreciation and amortization related to capitalized fees.^^

Q2 2020
Unconsolidated joint ventures ^1^

as of June 30, 2020

(unaudited and dollars in thousands)

BALANCE SHEET INFORMATION

BXP’s Nominal Ownership Mortgage/Construction Loans Payable, Net Interest Rate
Property Net Equity Maturity Date Stated GAAP ^2^
540 Madison Avenue ^3^ 60.00 % $ 201 $ — — — % — %
Santa Monica Business Park 55.00 % 148,665 163,539 July 19, 2025 4.06 % 4.24 %
Platform 16 55.00 % 99,734 — — — % — %
Gateway Commons 50.00 % 345,142 — — — % — %
Colorado Center 50.00 % 236,287 274,635 August 9, 2027 3.56 % 3.58 %
Dock 72 50.00 % 96,013 92,465 December 18, 2020 2.54 % 3.67 %
The Hub on Causeway 50.00 % — — — — % — %
Podium 50.00 % 49,160 86,563 September 6, 2021 2.64 % 3.13 %
Hub50House 50.00 % 53,340 80,961 April 19, 2022 2.34 % 2.62 %
100 Causeway Street 50.00 % 56,544 70,172 September 5, 2023 1.99 % 2.20 %
Hotel Air Rights 50.00 % 10,228 — — — % — %
1001 6th Street 50.00 % 42,673 — — — % — %
7750 Wisconsin Avenue (Marriott International Headquarters) 50.00 % 57,130 44,960 April 26, 2023 1.70 % 2.25 %
Annapolis Junction 50.00 % 12,967 — — — % — %
Annapolis Junction Building Six 50.00 % — 6,128 November 17, 2020 2.28 % 2.43 %
Annapolis Junction Building Seven ^4^ 50.00 % — 9,187 March 25, 2021 2.92 % 3.27 %
1265 Main Street 50.00 % 4,116 18,716 January 1, 2032 3.77 % 3.84 %
Market Square North 50.00 % (4,123) 57,424 October 1, 2020 4.85 % 4.91 %
Wisconsin Place Parking Facility 33.33 % 36,102 — — — % — %
500 North Capitol Street, N.W. 30.00 % (5,530) 31,448 June 6, 2023 4.15 % 4.20 %
3 Hudson Boulevard ^5^ 25.00 % 91,422 19,952 July 13, 2023 3.98 % 4.07 %
901 New York Avenue 25.00 % (12,174) 55,612 January 5, 2025 3.61 % 3.69 %
Metropolitan Square ^6^ 20.00 % (7,319) 55,638 July 7, 2022 5.40 % 6.90 %
1,310,578
Investments with deficit balances reflected within Other Liabilities 29,146
Investment in Joint Ventures $ 1,339,724
Mortgage/Construction Loans Payable, Net $ 1,067,400

chart-290a6237db7244b0.jpg

FLOATING AND FIXED RATE DEBT ANALYSIS

Weighted Average
% of Total Debt Stated Rate GAAP Rate ^2^ Maturity (years)
Floating Rate Debt 43.66 % 2.77 % 3.41 % 1.8
Fixed Rate Debt 56.34 % 3.86 % 3.94 % 5.6
Total Debt 100.00 % 3.38 % 3.71 % 3.9
Q2 2020
--- ---
Unconsolidated joint ventures (continued) ^1^

_____________

^1^Amounts represent BXP’s share based on its ownership percentage.

^2^The GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges, which includes mortgage recording fees.

^3^The property was sold on June 27, 2019.

^4^Annapolis Junction Building Eight was sold on June 25, 2020, for additional detail see page 13. Simultaneous with the sale of Building Eight the joint venture modified the mortgage loan to release Building Eight as collateral under the loan in exchange for a principal pay down of approximately $16.0 million using a portion of the net proceeds from the sale of the property. The modified mortgage loan totaling approximately $18.4 million is collateralized by Annapolis Junction Building Seven, continues to bear interest at a variable rate equal to LIBOR plus 2.35% per annum and matures on March 25, 2021.

^5^The Company has provided $80.0 million of mortgage financing to the joint venture. The loan has been reflected as Related Party Note Receivable, Net on the Company’s Consolidated Balance Sheets.

^6^On June 9, 2020, the joint venture obtained new mortgage financing with a new lender. The new mortgage loan totaling $325.0 million (of which $288.0 million has been advanced at closing) bears interest at a variable rate equal to LIBOR plus 4.75% per annum and matures on July 7, 2022, with two, one-year extension options.

Q2 2020
Unconsolidated joint ventures (continued)

for the three months ended June 30, 2020

(unaudited and dollars in thousands)

RESULTS OF OPERATIONS ^1^

Market Square North Metropolitan<br> Square 901 New York Avenue Annapolis Junction ^2^ 500 North Capitol Street, N.W. Colorado Center Santa Monica Business Park The Hub on Causeway Gateway Commons Other Joint Ventures ^3^ Total Unconsolidated Joint Ventures
Revenue
Lease ^4^ $ 5,627 $ 4,210 $ 5,961 $ 1,947 $ 4,352 $ 19,740 $ 14,910 $ 8,005 $ 11,706 $ 1,136 $ 77,594
Write-offs associated with accounts receivable (169) — (124) — (2) — (833) (730) — — (1,858)
Straight-line rent 1 2,147 558 42 (43) (126) 1,657 1,624 381 3,648 9,889
Write-offs associated with straight-line rent 7 — (435) — (113) — (123) (696) — — (1,360)
Fair value lease revenue 9 805 120 — 934
Termination income — — — — — — — — — — —
Total lease revenue 5,466 6,357 5,960 1,989 4,194 19,623 16,416 8,203 12,207 4,784 85,199
Parking and other 209 146 204 — 17 1,706 1,329 143 1 533 4,288
Total rental revenue ^5^ 5,675 6,503 6,164 1,989 4,211 21,329 17,745 8,346 12,208 5,317 89,487
Expenses
Operating 2,309 3,019 3,012 817 1,703 5,373 6,517 4,079 4,126 2,530 33,485
Net operating income 3,366 3,484 3,152 1,172 2,508 15,956 11,228 4,267 8,082 2,787 56,002
Other income/(expense)
Development and management services revenue 3 — — 6 — — — — — — 9
Interest and other income 8 — (8) 8 3 20 — 9 — 27 67
Interest expense (1,416) (2,901) (2,063) (370) (1,116) (4,979) (6,962) (2,357) — (1,142) (23,306)
Depreciation and amortization expense (1,179) (2,798) (1,456) (662) (872) (5,625) (8,762) (4,763) (8,405) (2,868) (37,390)
General and administrative expense — (21) (14) — — (8) (165) — (1) (10) (219)
Gain on sale of real estate — — — 11,530 — — — — — 190 11,720
Total other income/(expense) (2,584) (5,720) (3,541) 10,512 (1,985) (10,592) (15,889) (7,111) (8,406) (3,803) (49,119)
Net income/(loss) $ 782 $ (2,236) $ (389) $ 11,684 $ 523 $ 5,364 $ (4,661) $ (2,844) $ (324) $ (1,016) $ 6,883
BXP’s economic ownership percentage 50 % 20 % 50 % 50 % 30 % 50 % 55 % 50 % 55 %
Reconciliation of BXP’s share of Funds from Operations (FFO)
BXP’s share of net income/(loss) $ 391 $ (449) $ (99) ^6^ $ 5,842 $ 157 $ 2,682 $ (2,568) $ (1,422) $ (178) $ (328) $ 4,028
Basis differential
Straight-line rent $ — $ — $ — $ — $ — $ 435 ^7^ $ — $ — $ (52) $ — $ 383
Fair value lease revenue — — — — — 437 ^7^ — — (266) — 171
Depreciation and amortization expense (46) 4 (26) (4) 2 (1,894) 9 103 (950) (16) (2,818)
Gain on sale of real estate — — — 68 — — — — — — 68
Total basis differential ^8^ (46) 4 (26) 64 2 (1,022) ^7^ 9 103 (1,268) (16) (2,196)
Income/(loss) from unconsolidated joint ventures 345 (445) (125) ^6^ 5,906 159 1,660 (2,559) (1,319) (1,446) (344) 1,832
Add:
BXP’s share of depreciation and amortization expense 635 556 654 ^6^ 335 259 4,706 4,811 2,279 5,556 1,221 21,012
Less:
BXP’s share of gain on sale of real estate — — — 5,833 — — — — — 113 5,946
BXP’s share of FFO $ 980 $ 111 $ 529 $ 408 $ 418 $ 6,366 $ 2,252 $ 960 $ 4,110 $ 764 $ 16,898
Q2 2020
--- ---
Unconsolidated joint ventures (continued)

_____________

^1^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. For additional detail, see page 58.

^2^Annapolis Junction includes three in-service properties and two undeveloped land parcels, for additional detail see page 13.

^3^Includes 1001 6th Street, Dock 72, 7750 Wisconsin Avenue, 1265 Main Street, Wisconsin Place Parking Facility, 3 Hudson Boulevard, 540 Madison Avenue and Platform 16.

^4^Lease revenue includes recoveries from tenants and service income from tenants.

^5^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^6^Reflects the allocation percentages pursuant to the achievement of specified investment return thresholds as provided for in the joint venture agreement.

^7^The Company’s purchase price allocation under ASC 805 for Colorado Center differs from the historical basis of the venture resulting in the majority of the basis differential for this venture.

^8^Represents adjustments related to the carrying values and depreciation of certain of the Company’s investment in unconsolidated joint ventures.

Q2 2020
Lease expirations^^- All in-service properties^1, 2, 3, 5^

as of June 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease Expiration Percentage of Total Square Feet
/PSF /PSF
2020 1,769,184 1,403,795 73,344,202 % ^4, 5^
2021 2,974,765 2,586,857 140,007,823 %
2022 2,679,568 2,304,176 153,974,767 %
2023 1,889,697 1,641,555 111,479,428 %
2024 3,498,430 3,155,364 197,122,651 %
2025 2,630,397 2,368,618 150,469,322 %
2026 3,347,666 2,573,253 194,230,231 %
2027 2,035,001 1,796,108 118,262,408 %
2028 2,429,813 2,239,640 156,870,823 %
2029 2,251,002 2,103,685 142,169,650 %
Thereafter 13,366,847 11,328,323 875,945,042 %

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease Expiration Percentage of Total Square Feet
/PSF /PSF
2020 433,336 389,042 18,688,862 % ^5^
2021 87,070 83,280 7,134,390 %
2022 201,881 171,597 11,960,238 %
2023 192,368 185,924 16,903,073 %
2024 128,815 124,948 9,335,115 %
2025 181,029 168,818 9,779,370 %
2026 109,112 100,300 19,142,051 %
2027 91,750 86,483 11,932,503 %
2028 149,933 135,474 11,069,793 %
2029 107,983 85,996 7,569,130 %
Thereafter 610,798 468,288 61,376,809 %

All values are in US Dollars.

IN-SERVICE PROPERTIES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease Expiration Percentage of Total Square Feet
/PSF /PSF
2020 2,202,520 1,792,837 92,033,064 % ^4, 5^
2021 3,061,835 2,670,137 147,142,213 %
2022 2,881,449 2,475,773 165,935,005 %
2023 2,082,065 1,827,479 128,382,501 %
2024 3,627,245 3,280,312 206,457,766 %
2025 2,811,426 2,537,436 160,248,692 %
2026 3,456,778 2,673,553 213,372,282 %
2027 2,126,751 1,882,591 130,194,911 %
2028 2,579,746 2,375,114 167,940,616 %
2029 2,358,985 2,189,681 149,738,780 %
Thereafter 13,977,645 11,796,611 937,321,851 %

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 54.

^2^Includes partially placed in-service leased space. Does not include residential units and hotel.

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

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

^5^Rentable square footage subject to expiring leases include leases terminated by the Company where the tenant is still occupying the space. In 2020, the Company terminated leases for an aggregate of (A) 344,245 square feet of office space, of which BXP’s Share is 206,547 SF, and (B) 361,967 SF of retail space, of which BXP’s Share is 321,140 SF.

Q2 2020
Lease expirations - Boston region in-service properties ^1, 2, 3, 5^

as of June 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 273,567 260,183 15,553,904
2021 892,079 833,830 38,592,903
2022 890,134 831,047 42,754,995
2023 693,517 634,116 37,133,517
2024 851,771 822,568 44,336,669
2025 1,079,226 1,062,711 60,656,451
2026 1,275,976 1,036,917 70,262,843
2027 645,041 645,041 36,404,724
2028 1,079,209 1,079,209 66,711,510
2029 681,361 604,026 30,136,416
Thereafter 4,599,984 4,115,071 274,818,320

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 359,112 327,174 11,569,722
2021 4,506 4,504 767,078
2022 48,745 42,116 2,613,787
2023 56,051 56,051 4,760,575
2024 82,416 82,416 6,207,004
2025 44,127 44,127 3,690,393
2026 24,773 23,908 5,182,858
2027 54,558 54,558 9,631,714
2028 56,154 56,154 8,520,941
2029 70,255 53,065 5,014,206
Thereafter 201,449 142,784 10,363,265

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 632,679 587,357 27,123,626
2021 896,585 838,334 39,359,981
2022 938,879 873,163 45,368,782
2023 749,568 690,167 41,894,092
2024 934,187 904,984 50,543,673
2025 1,123,353 1,106,838 64,346,844
2026 1,300,749 1,060,825 75,445,701
2027 699,599 699,599 46,036,438
2028 1,135,363 1,135,363 75,232,451
2029 751,616 657,091 35,150,622
Thereafter 4,801,433 4,257,855 285,181,585

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 54.

^2^Includes partially placed in-service leased space. Does not include residential units and hotel.

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

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

^5^Rentable square footage subject to expiring leases include leases terminated by the Company where the tenant is still occupying the space. In 2020, the Company terminated leases for an aggregate of 339,745 SF, of which BXP’s Share is 307,807 SF.

Q2 2020
Quarterly lease expirations - Boston region in-service properties ^1, 2, 3,5^

as of June 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 3,449 3,449 313,200
Q3 2020 47,935 42,043 2,851,081
Q4 2020 222,183 214,692 12,389,623
Total 2020 273,567 260,183 15,553,904
Q1 2021 222,916 218,586 9,065,593
Q2 2021 319,241 319,241 14,302,495
Q3 2021 107,227 107,227 4,680,992
Q4 2021 242,695 188,776 10,543,824
Total 2021 892,079 833,830 38,592,903

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 357,636 325,698 11,148,041
Q4 2020 1,476 1,476 421,681
Total 2020 359,112 327,174 11,569,722
Q1 2021 — — —
Q2 2021 1,725 1,725 248,874
Q3 2021 1,540 1,540 361,217
Q4 2021 1,241 1,239 156,986
Total 2021 4,506 4,504 767,078

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 3,449 3,449 313,200
Q3 2020 405,571 367,741 13,999,122
Q4 2020 223,659 216,168 12,811,304
Total 2020 632,679 587,357 27,123,626
Q1 2021 222,916 218,586 9,065,593
Q2 2021 320,966 320,966 14,551,369
Q3 2021 108,767 108,767 5,042,209
Q4 2021 243,936 190,015 10,700,810
Total 2021 896,585 838,334 39,359,981

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 54.

^2^Includes partially placed in-service leased space. Does not include residential units and hotel.

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

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

^5^Rentable square footage subject to expiring leases include leases terminated by the Company where the tenant is still occupying the space. In 2020, the Company terminated leases for an aggregate of 339,745 SF, of which BXP’s Share is 307,807 SF.

Q2 2020
Lease expirations - Los Angeles region in-service properties ^1, 2, 3^

as of June 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 218,749 120,101 5,939,321
2021 457,740 230,608 17,515,224
2022 43,921 22,274 1,405,055
2023 163,555 86,354 5,531,649
2024 128,688 70,778 4,301,694
2025 6,475 3,561 243,590
2026 435,601 239,581 15,150,680
2027 — — —
2028 280,704 144,608 9,944,249
2029 — — —
Thereafter 346,204 173,102 11,365,891

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 2,296 1,263 97,772
2021 7,576 3,788 112,965
2022 39,888 21,850 1,146,061
2023 1,405 703 46,269
2024 4,333 2,283 116,040
2025 15,448 8,496 491,930
2026 5,827 3,205 287,339
2027 — — —
2028 — — —
2029 — — —
Thereafter 23,276 11,902 774,491

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 221,045 121,364 6,037,093
2021 465,316 234,396 17,628,189
2022 83,809 44,124 2,551,116
2023 164,960 87,057 5,577,918
2024 133,021 73,061 4,417,734
2025 21,923 12,057 735,520
2026 441,428 242,786 15,438,019
2027 — — —
2028 280,704 144,608 9,944,249
2029 — — —
Thereafter 369,480 185,004 12,140,382

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 54.

^2^Includes partially placed in-service leased space. The Company owns 50% of Colorado Center and 55% of Santa Monica Business Park.

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

Q2 2020
Quarterly lease expirations - Los Angeles region in-service properties ^1, 2, 3^

as of June 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF $/PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 16,483 9,066 585,528
Q4 2020 202,266 111,036 5,353,793
Total 2020 218,749 120,101 5,939,321
Q1 2021 180,552 91,246 7,700,739
Q2 2021 4,964 2,730 127,274
Q3 2021 5,581 3,070 191,029
Q4 2021 266,643 133,563 9,496,182
Total 2021 457,740 230,608 17,515,224

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF $/PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 2,296 1,263 97,772
Q4 2020 — — —
Total 2020 2,296 1,263 97,772
Q1 2021 — — —
Q2 2021 — — —
Q3 2021 7,576 3,788 112,965
Q4 2021 — — —
Total 2021 7,576 3,788 112,965

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF $/PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 18,779 10,329 683,300
Q4 2020 202,266 111,036 5,353,793
Total 2020 221,045 121,364 6,037,093
Q1 2021 180,552 91,246 7,700,739
Q2 2021 4,964 2,730 127,274
Q3 2021 13,157 6,858 303,994
Q4 2021 266,643 133,563 9,496,182
Total 2021 465,316 234,396 17,628,189

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 54.

^2^Includes partially placed in-service leased space. The Company owns 50% of Colorado Center and 55% of Santa Monica Business Park.

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

Q2 2020
Lease expirations - New York region in-service properties ^1, 2, 3, 5^

as of June 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 688,699 517,422 25,322,411
2021 329,414 265,295 23,831,489
2022 765,973 619,618 58,133,319
2023 243,529 195,843 18,022,140
2024 1,137,564 960,935 67,176,370
2025 551,913 488,017 40,638,957
2026 700,647 507,120 43,278,153
2027 465,919 382,366 26,614,466
2028 260,250 238,204 22,090,349
2029 630,080 603,713 61,056,488
Thereafter 4,103,097 3,183,126 294,956,344

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 22,222 12,314 3,886,145
2021 10,925 10,925 1,950,851
2022 27,093 27,022 4,086,369
2023 6,552 3,931 4,680,000
2024 1,775 1,775 650,177
2025 — — —
2026 13,228 9,110 9,155,870
2027 243 146 21,600
2028 — — —
2029 3,135 3,135 662,000
Thereafter 248,376 184,811 43,485,825

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 710,921 529,736 29,208,556
2021 340,339 276,220 25,782,340
2022 793,066 646,640 62,219,688
2023 250,081 199,774 22,702,140
2024 1,139,339 962,710 67,826,547
2025 551,913 488,017 40,638,957
2026 713,875 516,230 52,434,023
2027 466,162 382,512 26,636,066
2028 260,250 238,204 22,090,349
2029 633,215 606,848 61,718,488
Thereafter 4,351,473 3,367,937 338,442,169

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 54.

^2^Includes partially placed in-service leased space.

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

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

^5^Rentable square footage subject to expiring leases include leases terminated by the Company where the tenant is still occupying the space. In 2020 the Company terminated leases for an aggregate of (A) 344,245 square feet of office space, of which BXP’s Share is 206,547 SF, and (B) 22,222 SF of retail space, of which BXP’s Share is 13,333 SF.

Q2 2020
Quarterly lease expirations - New York region in-service properties ^1, 2, 3, 5^

as of June 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 5,399 4,483 372,180
Q3 2020 661,077 490,716 23,882,125
Q4 2020 22,223 22,223 1,068,105
Total 2020 688,699 517,422 25,322,411
Q1 2021 52,595 45,634 2,375,755
Q2 2021 52,286 35,369 2,949,696
Q3 2021 162,964 122,723 12,934,909
Q4 2021 61,569 61,569 5,571,129
Total 2021 329,414 265,295 23,831,489

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 22,222 12,314 3,886,145
Q4 2020 — — —
Total 2020 22,222 12,314 3,886,145
Q1 2021 715 715 141,517
Q2 2021 — — —
Q3 2021 10,210 10,210 1,809,334
Q4 2021 — — —
Total 2021 10,925 10,925 1,950,851

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 5,399 4,483 372,180
Q3 2020 683,299 503,030 27,768,270
Q4 2020 22,223 22,223 1,068,105
Total 2020 710,921 529,736 29,208,556
Q1 2021 53,310 46,349 2,517,272
Q2 2021 52,286 35,369 2,949,696
Q3 2021 173,174 132,933 14,744,243
Q4 2021 61,569 61,569 5,571,129
Total 2021 340,339 276,220 25,782,340

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 54.

^2^Includes partially placed in-service leased space.

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

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

^5^Rentable square footage subject to expiring leases include leases terminated by the Company where the tenant is still occupying the space. In 2020 the Company terminated leases for an aggregate of (A) 344,245 square feet of office space, of which BXP’s Share is 206,547 SF, and (B) 22,222 SF of retail space, of which BXP’s Share is 13,333 SF.

Q2 2020
Lease expirations - San Francisco region in-service properties ^1, 2, 3^

as of June 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 294,884 237,164 15,338,738
2021 880,173 849,903 43,098,513
2022 695,436 571,316 39,399,899
2023 591,799 538,250 40,498,015
2024 646,344 612,594 42,679,889
2025 455,091 446,759 34,899,443
2026 503,249 420,216 34,388,910
2027 375,774 372,451 32,515,625
2028 499,479 487,223 41,067,836
2029 259,888 241,604 21,873,993
Thereafter 1,771,103 1,754,737 160,722,787

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 5,939 5,939 180,000
2021 20,548 20,548 1,291,044
2022 38,462 38,462 1,905,096
2023 45,243 45,243 2,565,266
2024 9,836 9,836 624,633
2025 35,856 35,856 2,513,461
2026 26,082 26,082 1,906,833
2027 5,056 5,056 321,136
2028 15,811 15,811 1,072,554
2029 6,216 6,216 560,352
Thereafter 62,455 61,057 3,160,657

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 300,823 243,103 15,518,738 63.84
2021 900,721 870,451 44,389,557
2022 733,898 609,778 41,304,995
2023 637,042 583,493 43,063,281
2024 656,180 622,430 43,304,522
2025 490,947 482,615 37,412,904
2026 529,331 446,298 36,295,743
2027 380,830 377,507 32,836,761
2028 515,290 503,034 42,140,390
2029 266,104 247,820 22,434,345
Thereafter 1,833,558 1,815,794 163,883,444

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 54.

^2^Includes partially placed in-service leased space.

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

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

Q2 2020
Lease expirations - San Francisco region in-service properties ^1, 2, 3^

as of June 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 52,797 46,811 2,911,993
Q3 2020 175,797 129,037 8,344,151
Q4 2020 66,290 61,317 4,082,594
Total 2020 294,884 237,164 15,338,738
Q1 2021 395,402 389,546 18,097,381
Q2 2021 166,032 158,177 9,440,565
Q3 2021 140,232 131,934 6,109,619
Q4 2021 178,507 170,248 9,450,949
Total 2021 880,173 849,903 43,098,513

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF $/PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 5,228 5,228 132,000
Q4 2020 711 711 48,000
Total 2020 5,939 5,939 180,000
Q1 2021 1,964 1,964 183,819
Q2 2021 12,999 12,999 853,912
Q3 2021 2,655 2,655 142,941
Q4 2021 2,930 2,930 110,372
Total 2021 20,548 20,548 1,291,044

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 52,797 46,811 2,911,993
Q3 2020 181,025 134,265 8,476,151
Q4 2020 67,001 62,028 4,130,594
Total 2020 300,823 243,103 15,518,738
Q1 2021 397,366 391,510 18,281,200
Q2 2021 179,031 171,176 10,294,477
Q3 2021 142,887 134,589 6,252,560
Q4 2021 181,437 173,178 9,561,321
Total 2021 900,721 870,451 44,389,557

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 54.

^2^Includes partially placed in-service leased space.

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

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

Q2 2020
Lease expirations - Washington, DC region in-service properties ^1, 2, 3^

as of June 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 293,285 268,925 11,189,828
2021 415,359 407,221 16,969,694
2022 284,104 259,921 12,281,499
2023 197,297 186,992 10,294,107
2024 734,063 688,489 38,628,029
2025 537,692 367,570 14,030,881
2026 432,193 369,419 31,149,645
2027 548,267 396,250 22,727,593
2028 310,171 290,396 17,056,879
2029 679,673 654,342 29,102,753
Thereafter 2,546,459 2,102,287 134,081,700

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 43,767 42,352 2,955,223
2021 43,515 43,515 3,012,452
2022 47,693 42,147 2,208,925
2023 83,117 79,996 4,850,963
2024 30,455 28,638 1,737,261
2025 85,598 80,339 3,083,586
2026 39,202 37,995 2,609,151
2027 31,893 26,723 1,958,053
2028 77,968 63,509 1,476,298
2029 28,377 23,580 1,332,572
Thereafter 75,242 67,734 3,592,571

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 337,052 311,277 14,145,051
2021 458,874 450,736 19,982,146
2022 331,797 302,068 14,490,424
2023 280,414 266,988 15,145,070
2024 764,518 717,127 40,365,290
2025 623,290 447,909 17,114,467
2026 471,395 407,414 33,758,796
2027 580,160 422,973 24,685,646
2028 388,139 353,905 18,533,177
2029 708,050 677,922 30,435,325
Thereafter 2,621,701 2,170,021 137,674,271

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 54.

^2^Includes partially placed in-service leased space. Does not include residential units.

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

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

Q2 2020
Quarterly lease expirations - Washington, DC region in-service properties ^1, 2, 3^

^^

as of June 30, 2020

OFFICE

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 12,028 10,241 527,613
Q3 2020 82,362 77,761 4,469,926
Q4 2020 198,895 180,924 6,192,289
Total 2020 293,285 268,925 11,189,828
Q1 2021 137,901 137,901 4,357,450
Q2 2021 97,156 92,267 3,839,738
Q3 2021 113,060 109,812 7,073,082
Q4 2021 67,242 67,242 1,699,424
Total 2021 415,359 407,221 16,969,694

All values are in US Dollars.

RETAIL

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF $/PSF
Q1 2020 — — —
Q2 2020 — — —
Q3 2020 17,626 16,211 1,186,410
Q4 2020 26,141 26,141 1,768,813
Total 2020 43,767 42,352 2,955,223
Q1 2021 15,245 15,245 1,266,595
Q2 2021 18,817 18,817 1,175,886
Q3 2021 4,491 4,491 283,951
Q4 2021 4,962 4,962 286,019
Total 2021 43,515 43,515 3,012,452

All values are in US Dollars.

TOTAL PROPERTY TYPES

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Lease Expiration
by Quarter /PSF /PSF
Q1 2020 — — —
Q2 2020 12,028 10,241 527,613
Q3 2020 99,988 93,972 5,656,336
Q4 2020 225,036 207,065 7,961,102
Total 2020 337,052 311,277 14,145,051
Q1 2021 153,146 153,146 5,624,045
Q2 2021 115,973 111,084 5,015,624
Q3 2021 117,551 114,303 7,357,033
Q4 2021 72,204 72,204 1,985,443
Total 2021 458,874 450,736 19,982,146

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 54.

^2^Includes partially placed in-service leased space. Does not include residential units.

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

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

Q2 2020
Lease expirations - CBD properties ^1, 2, 3, 5^

^^

as of June 30, 2020

Boston

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 522,571 477,249 22,230,530
2021 300,965 242,715 15,259,387
2022 302,945 237,229 15,648,708
2023 475,594 416,193 30,224,052
2024 465,700 436,497 29,452,910
2025 347,590 331,075 25,361,361
2026 1,077,802 837,878 62,908,846
2027 369,108 369,108 31,923,340
2028 931,545 931,545 66,091,065
2029 461,044 366,519 24,286,575
Thereafter 4,279,591 3,793,497 262,928,287

All values are in US Dollars.

Los Angeles

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 221,045 121,364 6,037,093
2021 465,316 234,396 17,628,189
2022 83,809 44,124 2,551,116
2023 164,960 87,057 5,577,918
2024 133,021 73,062 4,417,735
2025 21,923 12,058 735,519
2026 441,428 242,785 15,438,019
2027 — — —
2028 280,704 144,608 9,944,249
2029 — — —
Thereafter 369,480 185,004 12,140,382

All values are in US Dollars.

New York

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 448,047 266,863 19,365,855
2021 270,648 206,529 23,477,718
2022 681,607 535,180 58,050,083
2023 197,413 147,106 20,798,160
2024 653,551 476,922 49,485,259
2025 347,144 283,248 32,669,667
2026 498,951 301,306 43,635,858
2027 248,521 164,871 18,872,443
2028 216,656 194,610 20,420,090
2029 586,449 560,082 60,002,294
Thereafter 4,130,866 3,147,330 330,015,280

All values are in US Dollars.

Q2 2020
Lease expirations - CBD properties (continued) ^1, 2, 3, 5^

^^

as of June 30, 2020

San Francisco

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 169,793 169,793 12,286,343
2021 376,475 376,475 27,445,958
2022 429,499 429,499 31,681,100
2023 388,265 388,265 30,411,642
2024 536,152 536,152 38,448,700
2025 303,979 303,979 24,794,001
2026 363,265 363,265 29,773,326
2027 341,923 341,923 30,373,579
2028 490,778 490,778 41,551,698
2029 229,536 229,536 21,611,148
Thereafter 1,798,028 1,798,028 163,083,639

All values are in US Dollars.

Washington, DC

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 60,685 34,910 1,864,697
2021 55,532 47,394 4,025,796
2022 95,091 65,362 4,518,259
2023 51,216 37,790 2,640,610
2024 206,150 187,929 14,085,893
2025 172,570 60,804 3,414,111
2026 345,464 281,483 26,908,289
2027 215,469 73,985 5,815,863
2028 162,306 128,071 8,936,038
2029 59,386 29,258 2,131,102
Thereafter 1,399,642 947,962 72,998,058

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 54.

^2^Includes partially placed in-service leased space. Does not include residential units and hotel.

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

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

^5^Rentable square footage subject to expiring leases include leases terminated by the Company where the tenant is still occupying the space. In 2020, the Company terminated leases for an aggregate of (A) 339,745 square feet of space in Boston, of which BXP’s Share is 307,807 SF and (B) 366,467 SF of space in New York of which BXP’s Share is 219,880 SF.

Q2 2020
Lease expirations - Suburban properties ^1, 2, 3^

^^

as of June 30, 2020

Boston

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 110,108 110,108 4,893,096
2021 595,620 595,620 24,100,593
2022 635,934 635,934 29,720,075
2023 273,974 273,974 11,670,040
2024 468,487 468,487 21,090,763
2025 775,763 775,763 38,985,483
2026 222,947 222,947 12,536,855
2027 330,491 330,491 14,113,097
2028 203,818 203,818 9,141,386
2029 290,572 290,572 10,864,046
Thereafter 521,842 464,358 22,253,297

All values are in US Dollars.

New York

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF $/PSF
2020 262,874 262,874 9,842,700
2021 69,691 69,691 2,304,621
2022 111,459 111,459 4,169,605
2023 52,668 52,668 1,903,979
2024 485,788 485,788 18,341,288
2025 204,769 204,769 7,969,289
2026 214,924 214,924 8,798,165
2027 217,641 217,641 7,763,622
2028 43,594 43,594 1,670,259
2029 46,766 46,766 1,716,193
Thereafter 220,607 220,607 8,426,889

All values are in US Dollars.

San Francisco

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 131,030 73,310 3,232,395
2021 524,246 493,976 16,943,599
2022 304,399 180,279 9,623,895
2023 248,777 195,228 12,651,638
2024 120,028 86,278 4,855,822
2025 186,968 178,636 12,618,903
2026 166,066 83,033 6,522,417
2027 38,907 35,584 2,463,182
2028 24,512 12,256 588,692
2029 36,568 18,284 823,196
Thereafter 35,530 17,765 799,805

All values are in US Dollars.

Q2 2020
Lease expirations - Suburban properties (continued) ^1, 2, 3^

^^

as of June 30, 2020

Washington, DC

BXP’s Share
Rentable Square Footage Subject to Expiring Leases Rentable Square Footage Subject to Expiring Leases Current Annualized Rental Obligations Under Expiring Leases
Year of Lease
Expiration /PSF /PSF
2020 276,367 276,367 12,280,354
2021 403,342 403,342 15,956,350
2022 236,706 236,706 9,972,165
2023 229,198 229,198 12,504,460
2024 558,368 529,198 26,279,398
2025 450,720 387,106 13,700,356
2026 125,931 125,931 6,850,507
2027 364,691 348,989 18,869,783
2028 225,833 225,833 9,597,140
2029 648,664 648,664 28,304,224
Thereafter 1,222,059 1,222,059 64,676,213

All values are in US Dollars.

_____________

^1^For the Company’s definitions and related disclosures, see the Definitions section of this Supplemental package starting on page 54.

^2^Includes partially placed in-service leased space. Does not include residential units and hotel.

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

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

Q2 2020
Research coverage

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

Equity Research Coverage
Argus Research Company Jacob Kilstein 646.747.5447
Bank of America Merrill Lynch Jeffrey Spector / Jamie Feldman 646.855.1363 / 646.855.5808
BMO Capital John Kim 212.885.4115
BTIG Tom Catherwood 212.738.6140
Citigroup Global Markets Michael Bilerman / Emmanuel Korchman 212.816.1383 / 212.816.1382
Deutsche Bank Securities Derek Johnston 212.250.5683
Evercore ISI Steve Sakwa 212.446.9462
Goldman Sachs & Company, Inc. Richard Skidmore 801.741.5459
Green Street Advisors Daniel Ismail 949.640.8780
Jefferies & Co. Jonathan Petersen 212.284.1705 / 212.336.7076
J.P. Morgan Securities Anthony Paolone 212.622.6682
KeyBanc Capital Markets Craig Mailman / Jordan Sadler 917.368.2316 / 917.368.2280
Mizuho Securities Omotayo Okusanya 212.205.7855
Morgan Stanley Vikram Malhotra 212.761.7064
Morningstar Michael Wong 312.384.5404
Piper Sandler Companies Alexander Goldfarb / Daniel Santos 212.466.7937 / 212.466.7927
RW Baird David Rodgers 216.737.7341
Scotia Capital Inc. Nicholas Yulico 212.225.6904
SMBC Nikko Securities Inc. Richard Anderson 646.521.2351
SunTrust Robinson Humphrey Michael Lewis 212.319.5659
Wells Fargo Securities Blaine Heck 443.263.6529 Debt Research Coverage
--- --- ---
Bank of America Merrill Lynch Andrew Molloy 646.855.6435
Barclays Peter Troisi 212.412.3695
J.P. Morgan Securities Mark Streeter 212.834.5086
US Bank Bill Stafford 877.558.2605
Wells Fargo Thierry Perrein / Kevin McClure 704.715.8455 / 704.410.3252 Rating Agencies
--- --- ---
Moody’s Investors Service Ranjini Venkatesan 212.553.3828
Standard & Poor’s Michael Souers 212.438.2508
Q2 2020
--- ---
Definitions

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

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.

Annualized Rental Obligations

Annualized Rental Obligations is defined as monthly Rental Obligations, as of the last day of the reporting period, multiplied by twelve (12).

Average Economic Occupancy

Average Economic Occupancy is defined as (1) total possible revenue less vacancy loss divided by (2) total possible revenue, expressed as a percentage. Total possible revenue is determined by valuing average occupied units at contract rates and average vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant units at their Market Rents, Average Economic Occupancy takes into account the fact that units of different sizes and locations within a residential property have different economic impacts on a residential property’s total possible gross revenue.

Average Monthly Rental Rates

Average Monthly Rental Rates are calculated by the Company as the average of the quotients obtained by dividing (A) rental revenue as determined in accordance with GAAP by (B) the number of occupied units for each month within the applicable fiscal period.

Average Physical Occupancy

Average Physical Occupancy is defined as (1) the average number of occupied units divided by (2) the total number of units, expressed as a percentage.

Debt to Market Capitalization Ratio

Consolidated Debt to Consolidated Market Capitalization Ratio is a measure of leverage commonly used by analysts in the REIT sector that equals the quotient of (A) the Company’s Consolidated Debt divided by (B) the Company’s Consolidated Market Capitalization, presented as a percentage. Consolidated Market Capitalization is the sum of (x) the Company’s Consolidated Debt plus (y) the market value of the Company’s outstanding equity securities calculated using the closing price per share of common stock of the Company, as reported by the New York Stock Exchange, multiplied by the sum of (1) outstanding shares of common stock of the Company, (2) outstanding common units of limited partnership interest in Boston Properties Limited Partnership (excluding common units held by the Company), (3) common units issuable upon conversion of all outstanding LTIP Units, assuming all conditions have been met for the conversion of the LTIP Units, (4) on and after February 6, 2015, which was the end of the performance period for 2012 OPP Units and thus the date earned, common units issuable upon conversion of 2012 OPP Units that were issued in the form of LTIP Units, (5) on and after February 4, 2016, which was the end of the performance period for 2013 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2013 MYLTIP Units that were issued in the form of LTIP Units, (6) on and after February 3, 2017, which was the end of the performance period for 2014 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2014 MYLTIP Units that were issued in the form of LTIP Units, (7) on and after February 4, 2018, which was the end of the performance period for 2015 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2015 MYLTIP Units that were issued in the form of LTIP Units, (8) on and after February 9, 2019, which was the end of the performance period for 2016 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2016 MYLTIP Units that were issued in the form of LTIP Units and (9) on and after February 6, 2020, which was the end of the performance period for 2017 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2017 MYLTIP Units that were issued in the form of LTIP Units plus (z) outstanding shares of 5.25% Series B Cumulative Redeemable Preferred Stock multiplied by their fixed liquidation preference of $2,500 per share. The calculation of Consolidated Market Capitalization does not include LTIP Units issued in the form of MYLTIP Awards unless and until certain performance thresholds are achieved and they are earned. Because their three-year performance periods have not yet ended, 2018, 2019 and 2020 MYLTIP Units are not included.

The Company also presents BXP’s Share of Market Capitalization, which is calculated in a similar manner, except that BXP’s Share of Debt is utilized instead of the Company’s Consolidated Debt in both the numerator and the denominator. The Company presents these ratios because its degree of leverage could affect its ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes and because different investors and lenders consider one or both of these ratios. Investors should understand that these ratios are, in part, a function of the market price of the common stock of the Company, and as such will fluctuate with changes in such price and do not necessarily reflect the Company’s capacity to incur additional debt to finance its activities or its ability to manage its existing debt obligations. However, for a company like Boston Properties, Inc., whose assets are primarily income-producing real estate, these ratios may provide investors with an alternate indication of leverage, so long as they are evaluated along with the ratio of indebtedness to other measures of asset value used by financial analysts and other financial ratios, as well as the various components of the Company’s outstanding indebtedness.

Q2 2020
Definitions (continued)

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre)

Pursuant to the definition of Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“Nareit”), the Company calculates EBITDAre as net income (loss) attributable to Boston Properties, Inc. common shareholders, the most directly comparable GAAP financial measure, plus net income attributable to noncontrolling interests, interest expense, losses (gains) from early extinguishments of debt, depreciation and amortization expense, impairment loss and adjustments to reflect the Company’s share of EBITDAre from unconsolidated joint ventures less gains on sales of real estate. EBITDAre is a non-GAAP financial measure. The Company uses EBITDAre internally as a performance measure and believes EBITDAre provides useful information to investors regarding its financial condition and results of operations at the corporate level because, when compared across periods, EBITDAre reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and acquisition and development activities on an unleveraged basis, providing perspective not immediately apparent from net (loss) income attributable to Boston Properties, Inc. common shareholders.

In some cases the Company also presents (A) BXP’s Share of EBITDAre – cash, which is BXP’s Share of EBITDAre after eliminating the effects of straight-line rent (excluding the impact related to deferred revenue related to improvements to long-lived assets paid for by a tenant), fair value lease revenue and non-cash termination income adjustment (fair value lease amounts) and adding straight-line ground rent expense, stock-based compensation expense and lease transaction costs that qualify as rent inducements, and (B) Annualized EBITDAre, which is EBITDAre for the applicable fiscal quarter ended multiplied by four (4). Presenting BXP’s Share of EBITDAre – cash allows investors to compare EBITDAre across periods without taking into account the effect of certain non-cash rental revenues, ground rent expense and stock based compensation expense. Similar to depreciation and amortization, because of historical cost accounting, fair value lease revenue may distort operating performance measures at the property level. Additionally, presenting EBITDAre excluding the impact of straight-line rent provides investors with an alternative view of operating performance at the property level that more closely reflects rental revenue generated at the property level without regard to future contractual increases in rental rates. In addition, the Company’s management believes that the presentation of Annualized EBITDAre provides useful information to investors regarding the Company’s results of operations because it enables investors to more easily compare quarterly EBITDAre to EBITDAre from full fiscal years.

The Company’s computation of EBITDAre may not be comparable to EBITDAre reported by other REITs or real estate companies that do not define the term in accordance with the current Nareit definition or that interpret the current Nareit definition differently.  The Company believes that in order to facilitate a clear understanding of its operating results, EBITDAre should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in the Company’s consolidated financial statements. EBITDAre should not be considered a substitute to net income attributable to Boston Properties, Inc. common shareholders in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.

Fixed Charge Coverage Ratio

Fixed Charge Coverage Ratio equals BXP’s Share of EBITDAre – cash divided by Total Fixed Charges. BXP’s Share of EBITDAre – cash is a non-GAAP financial measure equal to BXP’s Share of EBITDAre after eliminating the effects of straight-line rent (excluding the impact related to deferred revenue related to improvements to long-lived assets paid for by a tenant), fair value lease revenue and non-cash termination income adjustment (fair value lease amounts) and adding straight-line ground rent expense, stock-based compensation expense and lease transaction costs that qualify as rent inducements. Total Fixed Charges is also a non-GAAP financial measure equal to the sum of BXP’s Share of interest expense, capitalized interest, maintenance capital expenditures, hotel improvements, equipment upgrades and replacements and preferred dividends/distributions less hedge amortization and amortization of financing costs. The Company believes that the presentation of its Fixed Charge Coverage Ratio provides investors with useful information about the Company’s financial performance as it relates to overall financial flexibility and balance sheet management. Furthermore, the Company believes that the Fixed Charge Coverage Ratio is frequently used by analysts, rating agencies and other interested parties in the evaluation of the Company’s performance as a REIT and, as a result, by presenting the Fixed Charge Coverage Ratio the Company assists these parties in their evaluations.  The Company’s calculation of its Fixed Charge Coverage Ratio may not be comparable to the ratios reported by other REITs or real estate companies that define the term differently and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP. For clarification purposes, this ratio does not include gains (losses) from early extinguishments of debt.

Funds Available for Distribution (FAD) and FAD Payout Ratio

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

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

Q2 2020
Definitions (continued)

Funds from Operations (FFO)

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

The Company’s computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current Nareit definition or that interpret the current Nareit definition differently.  In order to facilitate a clear understanding of the Company’s operating results, FFO should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in the Company’s consolidated financial statements. FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc. common shareholders (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.

In-Service Properties

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

Interest Coverage Ratio

Interest Coverage Ratio, calculated including and excluding capitalized interest, is a non-GAAP financial measure equal to BXP’s Share of EBITDAre – cash divided by Adjusted interest expense. BXP’s Share of EBITDAre – cash is a non-GAAP financial measure equal to BXP’s Share of EBITDAre after eliminating the effects of straight-line rent (excluding the impact related to deferred revenue related to improvements to long-lived assets paid for by a tenant), fair value lease revenue and non-cash termination income adjustment (fair value lease amounts) and adding straight-line ground rent expense, stock-based compensation expense and lease transaction costs that qualify as rent inducements. Adjusted interest expense excluding capitalized interest is equal to BXP’s Share of interest expense less (1) BXP’s Share of hedge amortization and (2) BXP’s Share of amortization of financing costs. Adjusted interest expense including capitalized interest is calculated in the same manner but adds back BXP’s Share of capitalized interest. The Company believes that the presentation of its Interest Coverage Ratio provides useful information about the Company’s financial condition because it provides investors additional information on the Company’s ability to meet its debt obligations and incur additional indebtedness. In addition, by analyzing interest coverage ratios over a period of time, trends may emerge that provide investors a better sense of whether a company’s financial condition is improving or declining. The ratios may also be used to compare the financial condition of different companies, which can help when making an investment decision. The Company presents its Interest Coverage Ratio in two ways - including capitalized interest and excluding capitalized interest. GAAP requires the capitalization of interest expense during development. Therefore, for a company like Boston Properties, Inc. that is an active developer of real estate, presenting the Interest Coverage Ratio (excluding capitalized interest) provides an alternative measure of financial condition that may be more indicative of the Company’s ability to meet its interest expense obligations and therefore its overall financial condition. For clarification purposes, this ratio does not include gains (losses) from early extinguishments of debt.

Market Rents

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

Net Debt

Net Debt is equal to (A) the Company’s consolidated debt plus special dividends payable (if any) less (B) cash and cash equivalents and cash held in escrow for potential Section 1031 like kind exchange(s). The Company believes that the presentation of Net Debt provides useful information to investors because the Company reviews Net Debt as part of the management of its overall financial flexibility, capital structure and leverage. In particular, Net Debt is an important component of the Company’s ratio of BXP’s Share of Net Debt to BXP’s Share of EBITDAre.  BXP’s Share of Net Debt is calculated in a similar manner to Net Debt, except that BXP’s Share of Debt and BXP’s Share of cash are utilized instead of the Company’s consolidated debt and cash in the calculation. The Company believes BXP’s Share of Net Debt to BXP’s Share of EBITDAre is useful to investors because it provides an alternative measure of the Company’s financial flexibility, capital structure and leverage based on its percentage ownership interest in all of its assets. Furthermore, certain debt rating agencies, creditors and credit analysts monitor the Company’s Net Debt as part of their assessments of its business. The Company may utilize a considerable portion of its cash and cash equivalents at any given time for purposes other than debt reduction. In addition, cash and cash equivalents and cash held in escrow for potential Section 1031 like kind exchange(s) may not be solely controlled by the Company. The deduction of these items from consolidated debt in the calculation of Net Debt therefore should not be understood to mean that these items are available exclusively for debt reduction at any given time.

Q2 2020
Definitions (continued)

Net Operating Income (NOI)

Net operating income (NOI) is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc. common shareholders, the most directly comparable GAAP financial measure, plus (1) preferred dividends, net income attributable to noncontrolling interests, corporate general and administrative expense, payroll and related costs from management services contracts, transaction costs, impairment losses, depreciation and amortization expense, losses from early extinguishments of debt and interest expense, less (2) development and management services revenue, direct reimbursements of payroll and related costs from management services contracts, income (loss) from unconsolidated joint ventures, gains (losses) on sales of real estate, gains (losses) from investments in securities and interest and other income (loss). In some cases, the Company also presents (1) NOI – cash, which is NOI after eliminating the effects of straight-line rent (excluding the impact related to deferred revenue related to improvements to long-lived assets paid for by a tenant), fair value lease revenue, straight-line ground rent expense adjustment and lease transaction costs that qualify as rent inducements in accordance with GAAP, and (2) NOI and NOI – cash, in each case excluding termination income.

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

Rental Obligations

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

Rental Revenue

Rental Revenue is equal to Total revenue, the most directly comparable GAAP financial measure, less development and management services revenue and direct reimbursements of payroll and related costs from management services contracts. The Company uses Rental Revenue internally as a performance measure and in calculating other non-GAAP financial measures (e.g., NOI), which provides investors with information regarding our performance that is not immediately apparent from the comparable non-GAAP measures and allows investors to compare operating performance between periods. The Company also presents Rental Revenue (excluding termination income) because termination income can distort the results for any given period because it generally represents multiple months or years of a tenant’s rental obligations that are paid in a lump sum in connection with a negotiated early termination of the tenant’s lease and does not reflect the core ongoing operating performance of the Company’s properties.

Same Properties

In the Company’s analysis of NOI, particularly to make comparisons of NOI between periods meaningful, it is important to provide information for properties that were in-service and owned by the Company throughout each period presented. The Company refers to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by the Company through the end of the latest period presented as “Same Properties.” “Same Properties” therefore exclude properties placed in-service, acquired, repositioned or in development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented. Accordingly, it takes at least one year and one quarter after a property is acquired or treated as “in-service” for that property to be included in “Same Properties.” Pages 21 - 24 indicate by footnote the “In-Service Properties” that are not included in “Same Properties.”

Q2 2020
Reconciliations

(unaudited and in thousands)

BXP’s Share of select items

Three Months Ended
30-Jun-20 31-Mar-20
Revenue $ 654,773 $ 752,556
Partners’ share of revenue from consolidated joint ventures (JVs) (60,168) (77,577)
BXP’s share of revenue from unconsolidated JVs 43,880 45,408
BXP’s Share of revenue $ 638,485 $ 720,387
Straight-line rent $ 17,024 $ 31,430
Partners’ share of straight-line rent from consolidated JVs 1,592 (4,971)
BXP’s share of straight-line rent from unconsolidated JVs 4,131 4,803
BXP’s Share of straight-line rent $ 22,747 $ 31,262
Write-offs associated with accrued rent (included within straight-line rent) $ (35,944) $ (1,441)
Partners’ share of write-offs associated with accrued rent from consolidated JVs (included within straight-line rent) 10,283 —
BXP’s share of write-offs associated with accrued rent from unconsolidated JVs (included within straight-line rent) (664) (85)
BXP’s Share of write-offs associated with accrued rent (included within straight-line rent) $ (26,325) $ (1,526)
Write-offs associated with accounts receivable (included within lease revenue) $ (18,024) $ (836)
Partners’ share of write-offs associated with accounts receivable (included within lease revenue) from consolidated JVs 4,288 45
BXP’s share of write-offs associated with accounts receivable (included within lease revenue) from unconsolidated JVs (971) (24)
BXP’s Share of write-offs associated with accounts receivable (included within lease revenue) $ (14,707) $ (815)
Fair value lease revenue ^1^ $ 2,159 $ 2,991
Partners’ share of fair value lease revenue from consolidated JVs ^1^ (296) (628)
BXP’s share of fair value lease revenue from unconsolidated JVs ^1^ 685 826
BXP’s Share of fair value lease revenue ^2^ $ 2,548 $ 3,189
Lease termination income $ 3,309 $ 2,399
Partners’ share of termination income from consolidated JVs (321) (238)
BXP’s share of termination income from unconsolidated JVs — —
BXP’s Share of termination income $ 2,988 $ 2,161
Non-cash termination income adjustment (fair value lease amounts) $ — $ —
Partners’ share of non-cash termination income adjustment (fair value lease amounts) from consolidated JVs — —
BXP’s share of non-cash termination income adjustment (fair value lease amounts) from unconsolidated JVs $ — $ —
BXP’s Share of non-cash termination income adjustment (fair value lease amounts) $ — $ —
Parking and other revenue $ 13,946 $ 24,504
Partners’ share of parking and other revenue from consolidated JVs (406) (612)
BXP’s share of parking and other revenue from unconsolidated JVs $ 2,084 $ 3,394
BXP’s Share of parking and other revenue $ 15,624 $ 27,286
Cash rent abatements and deferrals for the second quarter of 2020 primarily related to COVID-19 $ 14,159 N/A
Partners’ share of cash rent abatements and deferrals for the second quarter of 2020 primarily related to COVID-19 from consolidated JVs (83) N/A
BXP’s share of cash rent abatements and deferrals from unconsolidated JVs for the second quarter of 2020 primarily related to COVID-19 2,475 N/A
BXP’s Share of cash rent abatements and deferrals for the second quarter of 2020 primarily related to COVID-19 $ 16,551 N/A
Q2 2020
--- ---
Reconciliations (continued)

BXP’s Share of select items (continued)

Three Months Ended
30-Jun-20 31-Mar-20
Hedge amortization $ 1,590 $ 1,579
Partners’ share of hedge amortization from consolidated JVs (144) (144)
BXP’s share of hedge amortization from unconsolidated JVs — —
BXP’s Share of hedge amortization $ 1,446 $ 1,435
Straight-line ground rent expense adjustment $ 951 $ 976
Partners’ share of straight-line ground rent expense adjustment from consolidated JVs — —
BXP’s share of straight-line ground rent expense adjustment from unconsolidated JVs 41 41
BXP’s Share of straight-line ground rent expense adjustment $ 992 $ 1,017
Depreciation and amortization $ 178,188 $ 171,094
Noncontrolling interests in property partnerships’ share of depreciation and amortization (22,480) (17,627)
BXP’s share of depreciation and amortization from unconsolidated JVs 21,012 18,332
BXP’s Share of depreciation and amortization $ 176,720 $ 171,799
Lease transaction costs that qualify as rent inducements ^2^ $ 1,616 $ 2,399
Partners’ share of lease transaction costs that qualify as rent inducements from consolidated JVs ^2^ (120) (226)
BXP’s share of lease transaction costs that qualify as rent inducements from unconsolidated JVs ^2^ (187) 1,850
BXP’s Share of lease transaction costs that qualify as rent inducements ^2^ $ 1,309 $ 4,023
2nd generation tenant improvements and leasing commissions $ 124,588 $ 70,386
Partners’ share of 2nd generation tenant improvements and leasing commissions from consolidated JVs (43,777) (21,113)
BXP’s share of 2nd generation tenant improvements and leasing commissions from unconsolidated JVs 2,213 670
BXP’s Share of 2nd generation tenant improvements and leasing commissions $ 83,024 $ 49,943
Maintenance capital expenditures ^3^ $ 15,461 $ 20,051
Partners’ share of maintenance capital expenditures from consolidated JVs ^3^ (91) (126)
BXP’s share of maintenance capital expenditures from unconsolidated JVs ^3^ 876 319
BXP’s Share of maintenance capital expenditures ^3^ $ 16,246 $ 20,244
Interest expense $ 107,142 $ 101,591
Partners’ share of interest expense from consolidated JVs (10,738) (10,776)
BXP’s share of interest expense from unconsolidated JVs 10,909 10,923
BXP’s Share of interest expense $ 107,313 $ 101,738
Capitalized interest $ 13,717 $ 14,149
Partners’ share of capitalized interest from consolidated JVs (1,296) (1,284)
BXP’s share of capitalized interest from unconsolidated JVs 1,284 2,339
BXP’s Share of capitalized interest $ 13,705 $ 15,204
Amortization of financing costs $ 3,428 $ 3,279
Partners’ share of amortization of financing costs from consolidated JVs (382) (382)
BXP’s share of amortization of financing costs from unconsolidated JVs 538 452
BXP’s Share of amortization of financing costs $ 3,584 $ 3,349

_____________

^1^Represents the net adjustment for above- and below-market leases that are being amortized over the terms of the respective leases in place at the property acquisition dates.

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

^3^Maintenance capital expenditures do not include planned capital expenditures related to acquisitions and repositioning capital expenditures.

Q2 2020
Reconciliations (continued)

for the three months ended June 30, 2020

(unaudited and dollars in thousands)

Norges Joint Ventures
Times Square Tower
601 Lexington Avenue / <br>One Five Nine East 53rd Street
CONSOLIDATED JOINT VENTURES 767 Fifth Avenue 100 Federal Street Total Consolidated
(The GM Building) Atlantic Wharf Office Joint Ventures
Revenue
Lease^1^ $ 58,267 $ 92,700 $ 150,967
Write-offs associated with accounts receivable (1,652) (8,060) (9,712)
Straight-line rent 15,617 5,432 21,049
Write-offs associated with straight-line rent (1,357) (21,644) (23,001)
Fair value lease revenue 618 109 727
Termination income 1 714 715
Total lease revenue 71,494 69,251 140,745
Parking and other — 903 903
Total rental revenue ^2^ 71,494 70,154 141,648
Expenses
Operating 28,044 33,329 61,373
Net Operating Income (NOI) 43,450 36,825 80,275
Other income (expense)
Development and management services revenue — 2 2
Interest and other income 55 304 359
Interest expense (21,175) (5,049) (26,224)
Depreciation and amortization expense (18,749) (28,908) (47,657)
General and administrative expense (17) (24) (41)
Total other income (expense) (39,886) (33,675) (73,561)
Net income $ 3,564 $ 3,150 $ 6,714
BXP’s nominal ownership percentage 60.00% 55.00%
Partners’ share of NOI (after income allocation to private REIT shareholders) ^3^ $ 16,719 $ 15,708 $ 32,427
BXP’s share of NOI (after income allocation to private REIT shareholders) $ 26,731 $ 21,117 $ 47,848
Unearned portion of capitalized fees ^4^ $ 33 $ 378 $ 411
Partners’ share of select items ^3^
Partners’ share of write-offs associated with accounts receivable $ 661 $ 3,627 $ 4,288
Partners’ share of write-offs associated with straight-line rent $ 543 $ 9,740 $ 10,283
Partners’ share of parking and other revenue $ — $ 406 $ 406
Partners’ share hedge amortization $ 144 $ — $ 144
Partners’ share of amortization of financing costs $ 346 $ 36 $ 382
Partners’ share of depreciation and amortization related to capitalized fees $ 344 $ 1,865 $ 2,209
Partners’ share of capitalized interest $ — $ 1,296 $ 1,296
Partners’ share of lease transaction costs that qualify as rent inducements $ 120 $ — $ 120
Partners’ share of management and other fees $ 661 $ 884 $ 1,545
Partners’ share of basis differential and other adjustments $ (17) $ (123) $ (140)
Reconciliation of Partners’ share of EBITDAre ^3^
Partners’ NCI $ 441 $ (1,208) $ (767)
Add:
Partners’ share of interest expense after BXP’s basis differential 8,466 2,272 10,738
Partners’ share of depreciation and amortization expense after BXP’s basis differential 7,826 14,654 22,480
Partners’ share of EBITDAre $ 16,733 $ 15,718 $ 32,451
Q2 2020
--- ---
Reconciliations (continued)

for the three months ended June 30, 2020

(unaudited and dollars in thousands)

CONSOLIDATED JOINT VENTURES
Norges Joint Ventures
Times Square Tower
601 Lexington Avenue / <br>One Five Nine East 53rd Street
767 Fifth Avenue 100 Federal Street Total Consolidated
Reconciliation of Partners’ share of Net Operating Income (Loss) (NOI) ^3^ (The GM Building) Atlantic Wharf Office Joint Ventures
Rental revenue ^2^ $ 28,598 $ 31,569 $ 60,167
Less: Termination income — 321 321
Rental revenue (excluding termination income) ^2^ 28,598 31,248 59,846
Less: Operating expenses (including partners’ share of management and other fees) 11,879 15,882 27,761
Income allocation to private REIT shareholders — (21) (21)
NOI (excluding termination income and after income allocation to private REIT shareholders) $ 16,719 $ 15,387 $ 32,106
Rental revenue (excluding termination income) ^2^ $ 28,598 $ 31,248 $ 59,846
Less: Straight-line rent 5,704 (7,296) (1,592)
Fair value lease revenue 247 49 296
Add: Lease transaction costs that qualify as rent inducements 120 — 120
Subtotal 22,767 38,495 61,262
Less: Operating expenses (including partners’ share of management and other fees) 11,879 15,882 27,761
Income allocation to private REIT shareholders — (21) (21)
NOI - cash (excluding termination income and after income allocation to private REIT shareholders) $ 10,888 $ 22,634 $ 33,522
Reconciliation of Partners’ share of Revenue ^3^
Rental revenue ^2^ $ 28,598 $ 31,569 $ 60,167
Add: Development and management services revenue — 1 1
Revenue $ 28,598 $ 31,570 $ 60,168

_________

^1^Lease revenue includes recoveries from tenants and service income from tenants.^^

^2^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^3^ Amounts represent the partners’ share based on their respective ownership percentage.

^4^Capitalized fees are eliminated in consolidation and recognized over the life of the asset as depreciation and amortization are added back to the Company’s net income.

Q2 2020
Reconciliations (continued)

for the three months ended June 30, 2020

(unaudited and dollars in thousands)

UNCONSOLIDATED JOINT VENTURES^1^

Market Square North Metropolitan Square 901 New York Avenue Annapolis Junction ^2^ 500 North Capitol Street, N.W. Colorado Center Santa Monica Business Park The Hub on Causeway Gateway Commons Other Joint Ventures ^3^ Total Unconsolidated Joint Ventures
Revenue
Lease ^4^ $ 5,627 $ 4,210 $ 5,961 $ 1,947 $ 4,352 $ 19,740 $ 14,910 $ 8,005 $ 11,706 $ 1,136 $ 77,594
Write-offs associated with accounts receivable (169) — (124) — (2) — (833) (730) — — (1,858)
Straight-line rent 1 2,147 558 42 (43) (126) 1,657 1,624 381 3,648 9,889
Write-offs associated with straight-line rent 7 — (435) — (113) — (123) (696) — — (1,360)
Fair value lease revenue 9 805 120 — 934
Termination income — — — — — — — — — — —
Total lease revenue 5,466 6,357 5,960 1,989 4,194 19,623 16,416 8,203 12,207 4,784 85,199
Parking and other 209 146 204 — 17 1,706 1,329 143 1 533 4,288
Total rental revenue ^5^ 5,675 6,503 6,164 1,989 4,211 21,329 17,745 8,346 12,208 5,317 89,487
Expenses
Operating 2,309 3,019 3,012 817 1,703 5,373 6,517 4,079 4,126 2,530 ^56^ 33,485
Net operating income 3,366 3,484 3,152 1,172 2,508 15,956 11,228 4,267 8,082 2,787 56,002
Other income/(expense)
Development and management services revenue 3 — — 6 — — — — — — 9
Interest and other income 8 — (8) 8 3 20 — 9 — 27 67
Interest expense (1,416) (2,901) (2,063) (370) (1,116) (4,979) (6,962) (2,357) — (1,142) (23,306)
Depreciation and amortization expense (1,179) (2,798) (1,456) (662) (872) (5,625) (8,762) (4,763) (8,405) (2,868) (37,390)
General and administrative expense — (21) (14) — — (8) (165) — (1) (10) (219)
Gain on sale of real estate — — — 11,530 — — — — — 190 11,720
Total other income/(expense) (2,584) (5,720) (3,541) 10,512 (1,985) (10,592) (15,889) (7,111) (8,406) (3,803) (49,119)
Net income/(loss) $ 782 $ (2,236) $ (389) $ 11,684 $ 523 $ 5,364 $ (4,661) $ (2,844) $ (324) $ (1,016) $ 6,883
BXP’s economic ownership percentage 50 % 20 % 50 % 50 % 30 % 50 % 55 % 50 % 55 %
BXP’s share of write-offs associated with accounts receivable $ 85 $ — $ 62 $ — $ 1 $ — $ 458 $ 365 $ — $ — $ 971
BXP’s share of write-offs associated with straight-line rent $ (4) $ — $ 218 $ — $ 34 $ — $ 68 $ 348 $ — $ — $ 664
BXP’s share of parking and other revenue $ 105 $ 29 $ 102 $ — $ 5 $ 853 $ 731 $ 72 $ 1 $ 186 $ 2,084
BXP’s share of amortization of financing costs $ 10 $ 63 $ 22 ^7^ $ 22 $ 4 $ 13 $ 72 $ 180 $ — $ 152 $ 538
BXP’s share of capitalized interest $ — $ 5 $ — ^7^ $ — $ — $ — $ — $ 431 $ — $ 848 $ 1,284
BXP’s share of non-cash termination income adjustment (fair value lease amounts) $ — $ — $ — ^7^ $ — $ — $ — $ — $ — $ — $ — $ —
Income/(loss) from unconsolidated joint ventures $ 345 $ (445) $ (125) ^7^ $ 5,906 $ 159 $ 1,660 $ (2,559) $ (1,319) $ (1,446) $ (344) $ 1,832
Add:
BXP’s share of interest expense 708 580 1,032 ^7^ 185 335 2,490 3,829 1,179 — 571 10,909
BXP’s share of depreciation and amortization expense 635 556 654 ^7^ 335 259 4,706 ^8^ 4,811 2,279 5,556 1,221 21,012
Less:
BXP’s share of gain on sale of real estate — — — 5,833 — — — — — 113 5,946
BXP’s share of EBITDAre $ 1,688 $ 691 $ 1,561 ^7^ $ 593 $ 753 $ 8,856 $ 6,081 $ 2,139 $ 4,110 $ 1,335 $ 27,807
Q2 2020
--- ---
Reconciliations (continued) UNCONSOLIDATED JOINT VENTURES
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Reconciliation of BXP’s share of Net Operating Income/(Loss) Market Square North Metropolitan Square 901 New York Avenue Annapolis Junction ^1^ 500 North Capitol Street, N.W. Colorado Center Santa Monica Business Park The Hub on Causeway Gateway Commons ^2^ Other Joint Ventures ^3^ Total Unconsolidated Joint Ventures
BXP’s share of rental revenue ^5^ $ 2,838 $ 1,301 $ 3,082 ^7^ $ 995 $ 1,263 $ 11,537 ^8^ $ 9,760 $ 4,173 $ 6,396 $ 2,530 $ 43,875
BXP’s share of operating expenses 1,155 604 1,506 ^7^ 409 511 2,687 3,584 2,040 2,269 1,199 15,964
BXP’s share of net operating income/(loss) 1,683 697 1,576 ^7^ 586 752 8,850 6,176 2,133 4,127 1,331 27,911
Less:
BXP’s share of termination income — — — ^7^ — — — — — — — —
BXP’s share of net operating income/(loss) (excluding termination income) 1,683 697 1,576 ^7^ 586 752 8,850 6,176 2,133 4,127 1,331 27,911
Less:
BXP’s share of straight-line rent 4 429 62 ^7^ 21 (47) 372 ^8^ 844 464 158 1,824 4,131
BXP’s share of fair value lease revenue — — — ^7^ — — 442 ^8^ 443 — (200) — 685
Add:
BXP’s share of straight-line ground rent expense adjustment — — — ^7^ — — — — — — 41 41
BXP’s share of lease transaction costs that qualify as rent inducements — 86 2 ^7^ — — — 52 — (327) — (187)
BXP’s share of net operating income/(loss) - cash (excluding termination income) $ 1,679 $ 354 $ 1,516 ^7^ $ 565 $ 799 $ 8,036 ^8^ $ 4,941 $ 1,669 $ 3,842 $ (452) $ 22,949
Reconciliation of BXP’s share of Revenue
BXP’s share of rental revenue ^5^ $ 2,838 $ 1,301 $ 3,082 ^7^ $ 995 $ 1,263 $ 11,537 ^8^ $ 9,760 $ 4,173 $ 6,396 $ 2,530 $ 43,875
Add:
BXP’s share of development and management services revenue 2 — — ^7^ 3 — — — — — — 5
BXP’s share of revenue $ 2,840 $ 1,301 $ 3,082 ^7^ $ 998 $ 1,263 $ 11,537 ^8^ $ 9,760 $ 4,173 $ 6,396 $ 2,530 $ 43,880

_____________

^1^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. For additional detail, see page 58.

^2^Annapolis Junction includes three in-service properties and two undeveloped land parcels, for additional detail see page 13.

^3^Includes 1001 6th Street, Dock 72, 7750 Wisconsin Avenue, 1265 Main Street, Wisconsin Place Parking Facility, 3 Hudson Boulevard, 540 Madison Avenue and Platform 16.

^4^Lease revenue includes recoveries from tenants and service income from tenants.^^

^5^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

^6^ Includes approximately $80 of straight-line ground rent expense.

^7^Reflects the allocation percentages pursuant to the achievement of specified investment return thresholds as provided for in the joint venture agreement.

^8^ The Company’s purchase price allocation under ASC 805 for Colorado Center differs from the historical basis of the venture resulting in the majority of the basis differential for this venture.

Q2 2020
Consolidated Income Statement - prior year

(unaudited and in thousands, except per share amounts)

Three Months Ended
30-Jun-19
Revenue
Lease $ 680,189
Parking and other 26,319
Hotel revenue 14,844
Development and management services 9,986
Direct reimbursements of payroll and related costs from management services contracts 2,403
Total revenue 733,741
Expenses
Operating 127,939
Real estate taxes 129,620
Demolition costs 412
Hotel 9,080
General and administrative 35,071
Payroll and related costs from management services contracts 2,403
Transaction costs 417
Depreciation and amortization 177,411
Total expenses 482,353
Other income (expense)
Income from unconsolidated joint ventures 47,964
Gains on sales of real estate 1,686
Gains from investments in securities 1,165
Interest and other income 3,615
Interest expense (102,357)
Net income 203,461
Net income attributable to noncontrolling interests
Noncontrolling interest in property partnerships (17,482)
Noncontrolling interest - common units of the Operating Partnership (19,036)
Net income attributable to Boston Properties, Inc. 166,943
Preferred dividends (2,625)
Net income attributable to Boston Properties, Inc. common shareholders $ 164,318
INCOME PER SHARE OF COMMON STOCK (EPS)
Net income attributable to Boston Properties, Inc. per share - basic $ 1.06
Net income attributable to Boston Properties, Inc. per share - diluted $ 1.06
Q2 2020
--- ---
Funds from operations (FFO) ^1^- prior year

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

Three Months Ended
30-Jun-19
Net income attributable to Boston Properties, Inc. common shareholders $ 164,318
Add:
Preferred dividends 2,625
Noncontrolling interest - common units of the Operating Partnership 19,036
Noncontrolling interests in property partnerships 17,482
Net income 203,461
Add:
Depreciation and amortization expense 177,411
Noncontrolling interests in property partnerships' share of depreciation and amortization (17,869)
BXP's share of depreciation and amortization from unconsolidated joint ventures 14,778
Corporate-related depreciation and amortization (412)
Less:
Gain on sale of real estate included within income from unconsolidated joint ventures 47,757
Gains on sales of real estate 1,686
Noncontrolling interests in property partnerships 17,482
Preferred dividends 2,625
FFO attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) (Basic FFO) 307,819
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of FFO 31,544
FFO attributable to Boston Properties, Inc. common shareholders $ 276,275
Boston Properties, Inc.’s percentage share of Basic FFO 89.75 %
Noncontrolling interest’s - common unitholders percentage share of Basic FFO 10.25 %
Basic FFO per share $ 1.79
Weighted average shares outstanding - basic 154,555
Diluted FFO per share $ 1.78
Weighted average shares outstanding - diluted 154.874

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

Q2 2020
Funds available for distributions (FAD) ^1^ - prior year

(unaudited and in thousands)

Three Months Ended
30-Jun-19
Net income attributable to Boston Properties, Inc. common shareholders $ 164,318
Add:
Preferred dividends 2,625
Noncontrolling interest - common units of the Operating Partnership 19,036
Noncontrolling interests in property partnerships 17,482
Net income 203,461
Add:
Depreciation and amortization expense 177,411
Noncontrolling interests in property partnerships’ share of depreciation and amortization (17,869)
BXP’s share of depreciation and amortization from unconsolidated joint ventures 14,778
Corporate-related depreciation and amortization (412)
Less:
Gain on sale of real estate included within income from unconsolidated joint ventures 47,757
Gains on sales of real estate 1,686
Noncontrolling interests in property partnerships 17,482
Preferred dividends 2,625
Basic FFO 307,819
Add:
BXP’s Share of lease transaction costs that qualify as rent inducements ^1, 2^ 1,587
BXP’s Share of hedge amortization ^1^ 1,435
Straight-line ground rent expense adjustment ^3^ 1,019
Stock-based compensation 10,394
Non-real estate depreciation 412
Unearned portion of capitalized fees from consolidated joint ventures 4,092
Less:
BXP’s Share of straight-line rent ^1^ 18,653
BXP’s Share of fair value lease revenue ^1, 4^ 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^ 51,822
BXP’s Share of maintenance capital expenditures ^1, 5^ 27,016
Hotel improvements, equipment upgrades and replacements 424
Funds available for distribution to common shareholders and common unitholders (FAD) (A) 223,719
Distributions to common shareholders and unitholders (excluding any special distributions) (B) 164,041
FAD Payout Ratio1 (B÷A) 73.32 %

_____________

^1^See the Definitions and Reconciliations sections of this Supplemental package starting on page 54.

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

^3^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.

^4^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.^^

^5^Maintenance capital expenditures do not include planned capital expenditures related to acquisitions and repositioning capital expenditures.

66

Document

Exhibit 99.2

bxplogohorizontalcolor.jpg

BOSTON PROPERTIES ANNOUNCES SECOND QUARTER 2020 RESULTS; REPORTS EPS OF $1.71 AND FFO PER SHARE OF $1.52

Signs 942,000 Square Feet of Leasing in Q2; Reports July Office Tenant Collections of 98% Reflecting Ongoing Strength in Collections

BOSTON, MA, July 28, 2020 - Boston Properties, Inc. (NYSE: BXP), the largest publicly-traded developer, owner and manager of Class A office properties in the United States, reported results today for the second quarter ended June 30, 2020.

Financial highlights for the second quarter include:

•Net income attributable to common shareholders of $266.5 million, or $1.71 per diluted share (EPS), compared to $164.3 million, or $1.06 per diluted share, for the quarter ended June 30, 2019. The increase in EPS in the second quarter of 2020 was primarily due to gains on asset sales of $1.21 per diluted share, offset by a $0.24 per share charge to revenue related to the write-off of accrued rent and accounts receivable of tenants primarily in the retail sector.

•Funds from Operations (FFO) of $236.9 million, or $1.52 per diluted share, compared to FFO of $276.3 million, or $1.78 per diluted share, for the quarter ended June 30, 2019. The decrease in FFO in the second quarter of 2020 was largely due to a $0.24 per share charge to revenue related to the write-off of accrued rent and accounts receivable of tenants primarily in the retail sector.

Second quarter and recent business highlights include:

•Completed 942,000 square feet of leases and renewals, including a new, 12-year lease with Microsoft Corporation for approximately 400,000 square feet at Reston Town Center in Reston, Virginia.

•Collected more than 98% of its total rent payments from office tenants due July 1. This follows collections from office tenants of 98% in the second quarter of 2020. Rent collections from all commercial tenants, including retail, were 95% in total in July.

•Completed and fully placed in-service 20 CityPoint, a 211,000 square foot Class A office development in Waltham, Massachusetts that is 62% leased.

•Completed two asset sales including:

◦Approximately 455,000 square feet of Capital Gallery, a Class A office complex in Washington, DC for a gross sale price of approximately $254 million. Boston Properties will retain ownership of the remaining 176,000 square feet of the property, which is approximately 100% leased and includes 156,000 square feet of office space, 20,000 square feet of retail and a 465-space parking garage. The Company realized net proceeds of approximately $247 million from the sale and a reported gain on sale of approximately $204 million in the quarter.

◦Annapolis Junction Building Eight, a 125,700 square foot vacant office building and two parcels of land at Annapolis Junction Business Park in Annapolis Junction, Maryland that was sold for a gross sale price of $47 million. The Company had a 50% interest in the Annapolis Junction properties. The Company realized net proceeds of

–more–

approximately $15 million from the sale after closing costs and the repayment of mortgage debt on the property. The Company recognized a gain on sale of real estate totaling approximately $5.8 million in the quarter.

•Completed the acquisition of property at 777 Harrison Street in San Francisco, California for a purchase price of approximately $140.1 million. 777 Harrison Street, known as Fourth + Harrison, is a fully-entitled site that can support the development of approximately 804,000 square feet of primarily office space.

•Completed a $1.25 billion bond offering of 3.250% unsecured senior notes due 2031 on May 5, 2020.

•Refinanced the mortgage loan collateralized by Metropolitan Square, a 654,000 square foot Class A office property in Washington, DC in which the Company has a 20% interest. The outstanding balance of the loan was approximately $155.9 million and was scheduled to mature on August 5, 2020. The new mortgage financing totals $325.0 million, of which $288.0 million was advanced at closing, and matures on July 7, 2022 with two, one-year extension options. Excess loan proceeds from the new mortgage loan were approximately $112.7 million, of which the Company’s share was approximately $22.5 million.

Separately the Company announced today the acquisition of a 50% interest in Beach Cities Media Center, a 6.4-acre land site on the Rosecrans Corridor of the El Segundo submarket of Los Angeles, California for a purchase price of $21.2 million. The site is fully entitled to support the future development of approximately 275,000 square feet of Class A creative office space. In conjunction with the acquisition, BXP entered into a joint venture with Continental Development Corporation (Continental), a premier developer and owner of Class A properties primarily in the El Segundo and Manhattan Beach submarkets with more than 500 tenants across its portfolio. The Beach Cities Media Center site is located on Rosecrans Avenue, one of the most in-demand creative office nodes in the South Bay of Los Angeles. The site is adjacent to Continental Park, an existing 3.0 million square foot, 86-acre office and mixed-use campus, which is home to several Fortune 500 and emerging office tenants in the technology, entertainment and financial sectors. Further details can be found in the press release issued today.

The reported results are unaudited and there can be no assurance that these reported results will not vary from the final information for the quarter ended June 30, 2020. In the opinion of management, the Company has made all adjustments considered necessary for a fair statement of these reported results.

Boston Properties will host a conference call on Wednesday, July 29, 2020 at 10:00 AM Eastern Time, open to the general public, to discuss the second quarter 2020 results, provide a business update pertaining to the current COVID-19 pandemic and discuss other business matters that may be of interest to investors. The number to call for this interactive teleconference is (877) 796-3880 (Domestic) or (443) 961-9013 (International) and entering the passcode 6852468. A replay of the conference call will be available by dialing (855) 859-2056 (Domestic) or (404) 537-3406 (International) and entering the passcode 6852468. There will also be a live audio webcast of the call, which may be accessed in the Investor Relations section of the Company’s website at investors.bxp.com. Shortly after the call, a replay of the webcast will be available in the Investor Relations section of the Company’s website and archived for up to twelve months following the call.

–more–

Additionally, a copy of Boston Properties’ second quarter 2020 “Supplemental Operating and Financial Data” and this press release are available in the Investor Relations section of the Company’s website at investors.bxp.com.

Boston Properties (NYSE: BXP) is the largest publicly-held developer and owner 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 portfolio totals 51.2 million square feet and 195 properties, including nine properties under construction/redevelopment. For more information about Boston Properties, please visit our website at www.bxp.com or follow us on LinkedIn or Instagram.

During the conference call referenced above, management of Boston Properties may make “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,” “plans,” “projects” 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 result in increasing unemployment that impacts the ability of our residential tenants to generate sufficient income to pay, or makes 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; and the effectiveness or lack of effectiveness of governmental relief in providing assistance to individuals and large and small businesses, including our tenants, that have suffered significant adverse effects from COVID-19. In addition to the risks specific to COVID-19, other factors include, without limitation, the Company’s ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the costs and availability of financing, the effectiveness of our interest rate hedging contracts, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Company’s accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission. Boston Properties does not undertake a duty to update or revise any forward-looking statement whether as a result of new information, future events or otherwise.

Financial tables follow.

–more–

BOSTON PROPERTIES, INC.<br><br>CONSOLIDATED BALANCE SHEETS<br><br>(Unaudited)
June 30, 2020 December 31, 2019
(in thousands, except for share and par value amounts)
ASSETS
Real estate, at cost $ 21,267,915 $ 21,458,412
Construction in progress 893,935 789,736
Land held for future development 414,053 254,828
Right of use assets - finance leases 237,394 237,394
Right of use assets - operating leases 147,512 148,640
Less: accumulated depreciation (5,292,389) (5,266,798)
Total real estate 17,668,420 17,622,212
Cash and cash equivalents 1,691,047 644,950
Cash held in escrows 300,608 46,936
Investments in securities 32,848 36,747
Tenant and other receivables, net 82,545 112,807
Related party note receivable, net 78,520 80,000
Note receivables, net 25,480 15,920
Accrued rental income, net 1,069,004 1,038,788
Deferred charges, net 655,813 689,213
Prepaid expenses and other assets 56,768 41,685
Investments in unconsolidated joint ventures 1,339,724 955,647
Total assets $ 23,000,777 $ 21,284,905
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net $ 2,915,852 $ 2,922,408
Unsecured senior notes, net 9,633,577 8,390,459
Unsecured line of credit — —
Unsecured term loan, net 499,150 498,939
Lease liabilities - finance leases 230,146 224,042
Lease liabilities - operating leases 200,979 200,180
Accounts payable and accrued expenses 328,292 377,553
Dividends and distributions payable 171,077 170,713
Accrued interest payable 95,274 90,016
Other liabilities 373,281 387,994
Total liabilities 14,447,628 13,262,304
Commitments and contingencies — —
Redeemable deferred stock units 6,003 8,365
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 December 31, 2019 200,000 200,000
BOSTON PROPERTIES, INC.<br><br>CONSOLIDATED BALANCE SHEETS<br><br>(Unaudited)
--- --- --- --- ---
June 30, 2020 December 31, 2019
(in thousands, except for share and par value amounts)
Common stock, $0.01 par value, 250,000,000 shares authorized, 155,701,186 and 154,869,198 issued and 155,622,286 and 154,790,298 outstanding at June 30, 2020 and December 31, 2019, respectively 1,556 1,548
Additional paid-in capital 6,340,665 6,294,719
Dividends in excess of earnings (302,511) (760,523)
Treasury common stock at cost, 78,900 shares at June 30, 2020 and December 31, 2019 (2,722) (2,722)
Accumulated other comprehensive loss (54,921) (48,335)
Total stockholders’ equity attributable to Boston Properties, Inc. 6,182,067 5,684,687
Noncontrolling interests:
Common units of the Operating Partnership 640,491 600,860
Property partnerships 1,724,588 1,728,689
Total equity 8,547,146 8,014,236
Total liabilities and equity $ 23,000,777 $ 21,284,905

BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three months ended June 30, Six months ended June 30,
2020 2019 2020 2019
(in thousands, except for per share amounts)
Revenue
Lease $ 630,119 $ 680,189 $ 1,340,230 $ 1,359,440
Parking and other 13,946 26,319 38,450 51,225
Hotel revenue 99 14,844 6,924 23,782
Development and management services 8,125 9,986 16,004 19,263
Direct reimbursements of payroll and related costs from management services contracts 2,484 2,403 5,721 5,798
Total revenue 654,773 733,741 1,407,329 1,459,508
Expenses
Operating
Rental 239,787 257,971 502,753 515,488
Hotel 1,973 9,080 8,794 16,943
General and administrative 37,743 35,071 74,197 76,833
Payroll and related costs from management services contracts 2,484 2,403 5,721 5,798
Transaction costs 332 417 947 877
Depreciation and amortization 178,188 177,411 349,282 342,005
Total expenses 460,507 482,353 941,694 957,944
Other income (expense)
Income from unconsolidated joint ventures 1,832 47,964 1,463 48,177
Gains on sales of real estate 203,767 1,686 613,932 781
Interest and other income (loss) 1,305 3,615 4,322 7,368
Gains (losses) from investments in securities 4,552 1,165 (893) 4,134
Impairment losses — — — (24,038)
Interest expense (107,142) (102,357) (208,733) (203,366)
Net income 298,580 203,461 875,726 334,620
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships 767 (17,482) (18,719) (36,312)
Noncontrolling interest—common units of the Operating Partnership (30,197) (19,036) (87,525) (30,627)
Net income attributable to Boston Properties, Inc. 269,150 166,943 769,482 267,681
Preferred dividends (2,625) (2,625) (5,250) (5,250)
Net income attributable to Boston Properties, Inc. common shareholders $ 266,525 $ 164,318 $ 764,232 $ 262,431
Basic earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income $ 1.71 $ 1.06 $ 4.92 $ 1.70
Weighted average number of common shares outstanding 155,386 154,555 155,199 154,540
Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income $ 1.71 $ 1.06 $ 4.91 $ 1.69
Weighted average number of common and common equivalent shares outstanding 155,407 154,874 155,333 154,859

BOSTON PROPERTIES, INC.

FUNDS FROM OPERATIONS (1)

(Unaudited)

Three months ended June 30, Six months ended June 30,
2020 2019 2020 2019
(in thousands, except for per share amounts)
Net income attributable to Boston Properties, Inc. common shareholders $ 266,525 $ 164,318 $ 764,232 $ 262,431
Add:
Preferred dividends 2,625 2,625 5,250 5,250
Noncontrolling interest - common units of the Operating Partnership 30,197 19,036 87,525 30,627
Noncontrolling interests in property partnerships (767) 17,482 18,719 36,312
Net income 298,580 203,461 875,726 334,620
Add:
Depreciation and amortization expense 178,188 177,411 349,282 342,005
Noncontrolling interests in property partnerships’ share of depreciation and amortization (22,480) (17,869) (40,107) (35,871)
Company’s share of depreciation and amortization from unconsolidated joint ventures 21,012 14,778 39,344 30,248
Corporate-related depreciation and amortization (486) (412) (955) (807)
Impairment loss — — — 24,038
Less:
Gain on sale of real estate included within income from unconsolidated joint ventures 5,946 47,757 5,946 47,757
Gains on sales of real estate 203,767 1,686 613,932 781
Noncontrolling interests in property partnerships (767) 17,482 18,719 36,312
Preferred dividends 2,625 2,625 5,250 5,250
Funds from operations (FFO) attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) 263,243 307,819 579,443 604,133
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of funds from operations 26,335 31,544 58,430 61,851
Funds from operations attributable to Boston Properties, Inc. common shareholders $ 236,908 $ 276,275 $ 521,013 $ 542,282
Boston Properties, Inc.’s percentage share of funds from operations - basic 90.00 % 89.75 % 89.92 % 89.76 %
Weighted average shares outstanding - basic 155,386 154,555 155,199 154,540
FFO per share basic $ 1.52 $ 1.79 $ 3.36 $ 3.51
Weighted average shares outstanding - diluted 155,407 154,874 155,333 154,859
FFO per share diluted $ 1.52 $ 1.78 $ 3.35 $ 3.50

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

Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current Nareit definition or that interpret the current Nareit definition differently.

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

BOSTON PROPERTIES, INC.

PORTFOLIO LEASING PERCENTAGES

% Leased by Location
June 30, 2020 December 31, 2019
Boston 94.8 % 95.9 %
Los Angeles 95.9 % 96.7 %
New York 92.6 % 92.9 %
San Francisco 93.2 % 93.7 %
Washington, DC 84.8 % 87.6 %
Total Portfolio 92.0 % 93.0 %

AT THE COMPANY

Michael LaBelle

Executive Vice President,

Chief Financial Officer and Treasurer

(617) 236-3352

Sara Buda

Vice President, Investor Relations

(617) 236-3429

sbuda@bxp.com

#

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