-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
Jcxs+7agYZXduTHu87xgL1KnqkkUCouflyVy6CAXf6KMZwpuYT+epcB/786qy9Yk
njb/2KkjBY5hM7J2+0HUCQ==
SECURITIES
AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of
the Date of Report (Date of
earliest event reported): Boston Properties, Inc. (Exact name of Registrant
as specified in its charter) Delaware 1-13087 04-2473675 (State or other
jurisdiction (Commission File (I.R.S. employer 111 Huntington Avenue Boston, Massachusetts 02199 (Address of principal
executive offices and zip code) Registrants telephone
number, including area code: (617) 236-3300 (c) Exhibits. The following exhibits are being furnished
herewith: Exhibit No. 99.1 Boston Properties,
Inc. Supplemental Operating and Financial Data for the quarter ended December
31, 2003. 99.2 Press release dated
January 27, 2004. The information in this
Current Report on Form 8-K is furnished under Item 12 - Results of Operations
and Financial Condition. Such
information, including the exhibits attached hereto, shall not be deemed
filed for any purpose, including for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise
subject to the liabilities of that Section.
The information in this Current Report on Form 8-K shall not be deemed
incorporated by reference into any filing under the Securities Act of 1933, as
amended, or the Exchange Act regardless of any general incorporation language
in such filing. On January 27, 2004,
Boston Properties, Inc. (the Company) issued a press release announcing its
financial results for the fourth quarter and full fiscal year of 2003. That press release referred to certain
supplemental information that is available on the Companys website. The text of the supplemental information and
the press release are attached hereto as Exhibits 99.1 and 99.2 and are
incorporated by reference herein. 2 SIGNATURES Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized. Date: January 27,
2004 BOSTON PROPERTIES, INC. /s/ Douglas T. Linde By: Douglas T. Linde Chief Financial Officer 3 Exhibit 99.1 Supplemental
Operating and Financial Data for the
Quarter Ended December 31, 2003 Boston Properties,
Inc. Fourth Quarter 2003 INDEX 3 4-5 6 7 8 9 10 11 12-15 16-17 18 19-22 23 24 25 26 27 28 29 Grand Total - Office, Office/Technical,
Industrial and Retail Properties 30 31-32 33-34 35-36 New York Area Lease Expiration
Roll Out 37-38 39-40 41-42 43-44 45 46 47-48 49 Capital
Expenditures, Tenant Improvements and Leasing Commissions 50 51 52 53 54 This supplemental package contains forward-looking
statements within the meaning of the Federal securities laws. You can identify these statements by our use
of the words expects, plans, estimates, projects, intends, believes
and similar expressions that do not relate to historical matters. You should exercise caution in interpreting
and relying on forward-looking statements because they involve known and
unknown risks, uncertainties and other factors which are, in some cases, beyond
Boston Properties control and could materially affect actual results,
performance or achievements. These
factors include, without limitation, the ability to enter into new leases or
renew leases on favorable terms, dependence on tenants financial condition,
the uncertainties of real estate development and acquisition activity, the
ability to effectively integrate acquisitions, the costs and availability of
financing, the effects of local economic and market conditions, the impact of
newly adopted accounting principles on period-to-period comparisons of
financial results, regulatory changes and other risks and uncertainties
detailed from time to time in the Companys filings with the Securities and
Exchange Commission. The Company does
not undertake a duty to update forward-looking statements. 2 Boston Properties,
Inc. Fourth Quarter 2003 Boston Properties, Inc. (the Company), a
self-administered and self-managed real estate investment trust (REIT), is one
of the largest owners, managers and developers of first-class office properties
in the United States, with a significant presence in four core markets: Boston, Washington, D.C., Midtown Manhattan
and San Francisco. Boston Properties
was founded in 1970 by Mortimer B. Zuckerman and Edward H. Linde in Boston,
where it maintains its headquarters.
The Company acquires, develops and manages its properties through
full-service regional offices in Boston, New York City, Washington, D.C., San
Francisco and Princeton, New Jersey.
Its property portfolio primarily comprises first-class office space and
also includes hotels and industrial buildings.
Boston Properties is well known for its in-house building management
expertise and responsiveness to tenants needs. The Boston Properties Management Team is among the
most distinguished in the REIT industry.
This deep and talented team of twenty-eight individuals average
twenty-four years of real estate experience and fifteen years with Boston
Properties. Chairman Mortimer Zuckerman
is nationally known, serving as Chairman and Editor-in-Chief of U.S. News and
World Report and Chairman and Publisher of the New York Daily News. He holds an undergraduate degree from McGill
University, a law degree from Harvard University and an MBA from the Wharton
School, University of Pennsylvania.
President and CEO Edward Linde serves on a number of corporate and
philanthropic boards, including John Hancock Financial Services, Inc. the
Boston Symphony Orchestra, National Association of Real Estate Investment
Trusts (NAREIT) and The Real Estate Roundtable. He holds a B.S. Civil Engineering degree from MIT and an MBA
with high distinction as a Baker Scholar from Harvard Graduate School of
Business Administration. Boston Properties primary business objective is to
maximize return on investment in an effort to provide its stockholders with the
greatest possible total return. The
Companys targeted markets are characterized by high barriers to the creation
of new supply and strong real estate fundamentals where tenants have
demonstrated a preference for high-quality office buildings and other
facilities. Boston Properties business strategy includes selectively acquiring
assets which increase its penetration in the markets in which it has chosen to
concentrate while exploring the sale of properties to take advantage of its
value creation and the demand for its premier properties, which often results
in high sale prices. The Company
continues to enhance its balanced capital structure through its access to a
variety of sources of capital. Additionally, Boston Properties is an investment
grade rated company maintaining current senior unsecured debt ratings of BBB
from Standard & Poors, Baa2 from Moodys Investor Services and BBB from
Fitch Ratings. 3 Boston Properties,
Inc. Fourth Quarter 2003 Corporate Headquarters Stock Exchange Listing At The Company 111 Huntington Avenue New York Stock Exchange Michael Walsh, VP Finance Boston, MA 02199-7610 (617) 236-3410 (617) 236-3300 Trading Symbol (617) 236-3311 (fax) (617) 236-3311 (fax) BXP mwalsh@bostonproperties.com www.bostonproperties.com Kathleen DiChiara, Investor Relations Manager (617) 236-3343 Key Management: (617) 236-3311 (fax) Mortimer B. Zuckerman Chairman of the Board kdichiara@bostonproperties.com Edward H. Linde President, CEO and Director Robert E. Burke Executive Vice President, Operations Douglas T. Linde Senior Vice President, CFO and Treasurer Information Requests Raymond A. Ritchey Executive Vice President, National Director of
Acquisitions and Development To request a standard Investor package or to be
added to our quarterly distribution list: (617) 236-3322 or Investor_relations@bostonproperties.com RESEARCH COVERAGE EQUITY DEBT A.G. Edwards & Sons, Inc. David AuBuchon (314) 955-5452 Rating Agencies: Banc of America Securities LLC Lee Schalop (212) 847-5677 Fitch Ratings William Travers (212) 908-0304 Bear Stearns & Company, Inc. Ross Smotrich (212) 272-8046 Moodys Investor Services Lesia Bates Moss (212) 553-4705 Credit Suisse First Boston, Inc. Jay Habermann (212) 538-5250 Standard & Poors James Fielding (212) 438-2452 Deutsche Bank Securities Inc. Louis Taylor (212) 250-4912 Friedman, Billings, Ramsey & Co., Inc David Loeb (703) 469-1289 Analysts: Goldman Sachs & Company Carey Callaghan (212) 902-4351 Banc of America Securities LLC Chris Brown (704) 386-2524 Green Street Advisors, Inc. Jim Sullivan (949) 640-8780 Bear, Stearns & Co., Inc. Susan Berliner (212) 272-3824 J.P. Morgan Securities, Inc. Anthony Paolone (212) 622-6682 BNP Paribas Securities Corp (NA) Erich Marriott (212) 841-3186 Lehman Brothers David Shulman (212) 526-3413 Credit Suisse First Boston, Inc. Thierry Perrein (212) 538-8618 McDonald Investments, Inc. Anatole Pevnev (216) 263-4783 Deutsche Bank Securities, Inc. Scott OShea (212) 250-7190 Merrill Lynch & Company, Inc. Steve Sakwa (212) 449-0335 J.P. Morgan Securities, Inc. Mark Streeter (212) 834-5086 Morgan Stanley & Co., Inc. Greg Whyte (212) 761-6331 Merrill Lynch & Company, Inc. John Forrey (212) 449-1812 Prudential Equity Group, Inc. James Sullivan (212) 778-2515 Smith Barney Citigroup Thomas Cook (212) 723-1112 RBC Capital Markets (US) Jay Leupp (415) 633-8588 Piper Jaffray & Co. Andrew Rosivach (212) 284-9304 Smith Barney Citigroup Jonathan Litt (212) 816-0231 UBS Securities, LLC Keith Mills (212) 713-3098 With the exception of Green
Street Advisors, an independent research firm, the equity analysts listed above
are those analysts that, according to First Call Corporation, have published
research material on the Company or are listed as covering the Company. Please
note that any opinions, estimates or forecasts regarding Boston Properties
performance made by the analysts listed above do not represent the opinions,
estimates or forecasts of Boston Properties or its management. Boston Properties does not by its reference
above imply its endorsement of or concurrence with any information, conclusions
or recommendations made by any of such analysts. TIMING Results for the first quarter 2004 will be
announced in late April 2004. 4 Boston Properties,
Inc. Fourth Quarter 2003 COMMON STOCK
DATA (NYSE:BXP) Boston Properties common stock
is traded primarily on the New York Stock Exchange under the symbol BXP. BXPs common stock has had the following
characteristics (based on information reported by the New York Stock Exchange): 4th
Quarter 2003 3rd
Quarter 2003 2nd Quarter
2003 1st
Quarter 2003 4th
Quarter 2002 High Price $ 48.34 $ 45.50 $ 44.51 $ 39.29 $ 37.43 Low Price $ 43.55 $ 41.55 $ 38.65 $ 34.99 $ 33.93 Average Price $ 46.02 $ 43.35 $ 41.36 $ 36.58 $ 36.50 Closing Price, at
the end of the quarter $ 48.19 $ 43.47 $ 43.80 $ 37.90 $ 36.86 Dividends per
share - annualized (1) $ 2.52 $ 2.52 $ 2.52 $ 2.44 $ 2.44 Closing dividend
yield - annualized 5.23 % 5.80 % 5.75 % 6.44 % 6.62 % Closing common
shares outstanding, plus common units and preferred units on an as-converted
basis (thousands) 127,683 127,037 126,605 125,597 125,038 Closing market
value of shares and units outstanding (thousands) $ 6,153,044 $ 5,522,298 $ 5,545,299 $ 4,760,126 $ 4,608,901 (1) Reflects
dividend increase from $0.61 per share to $0.63 per share effective Q2 2003. BPLP UNSECURED
SENIOR NOTES Settlement Date 5/22/03 3/18/03 1/17/03 12/13/02 Principal Amount $ 250,000,000 $ 300,000,000 $ 175,000,000 $ 750,000,000 Yield (on issue date) 5.075 % 5.636 % 6.280 % 6.296 % Coupon 5.000 % 5.625 % 6.250 % 6.250 % Discount 99.329 % 99.898 % 99.763 % 99.650 % Ratings: Moodys Baa2 (stable ) Baa2 (stable ) Baa2 (stable ) Baa2 (stable ) S&P BBB (stable ) BBB (stable ) BBB (stable ) BBB (stable ) Fitch BBB (stable ) BBB (stable ) BBB (stable ) BBB (stable ) Maturity Date 6/1/2015 4/15/2015 1/15/2013 1/15/2013 5 Boston Properties,
Inc. Fourth Quarter 2003 (unaudited
and in thousands, except per share amounts) This section includes non-GAAP financial measures,
which are accompanied by what we consider the most directly comparable financial
measures calculated and presented in accordance with GAAP. Quantitative reconciliations of the
differences between the non-GAAP financial measures presented and the most
directly comparable GAAP financial measures are shown on pages 9 and 10. A description of the non-GAAP financial
measures we present and a statement of the reasons why management believes the
non-GAAP measures provide useful information to investors about the companys
financial condition and results of operations can be found on page 54. Three
Months Ended December
31,2003 September
30, 2003 June 30,
2003 March 31,
2003 December
31, 2002 Income Items: Revenue $ 336,184 $ 330,905 $ 323,125 $ 319,414 $ 333,331 Straight line rent (SFAS 13) $ 14,536 $ 12,144 $ 10,687 $ 10,866 $ 11,938 Fair value lease revenue (SFAS 141) (1) $ (53 ) $ (577 ) $ (167 ) $ $ Lease termination fees (included in revenues) $ 1,401 $ 1,735 $ 1,419 $ 1,761 $ 3,724 Capitalized interest $ 5,192 $ 4,954 $ 4,601 $ 4,453 $ 4,719 Capitalized wages $ 1,209 $ 1,288 $ 1,325 $ 1,172 $ 1,057 Operating Margins [(rental revenue - rental
expenses)/rental revenue] (2) 69.5 % 67.1 % 70.1 % 68.3 % 69.0 % Net income available to common shareholders $ 60,592 $ 56,970 $ 63,236 $ 185,045 $ 260,146 Funds from operations (FFO) available to common
shareholders before net derivative gains/losses (3) $ 106,931 $ 99,057 $ 103,360 $ 102,735 $ 113,464 FFO per share before net derivative gains/losses -
diluted (3) $ 1.05 $ 0.98 $ 1.03 $ 1.03 $ 1.14 Net income available to common shareholders per
share - basic $ 0.62 $ 0.59 $ 0.66 $ 1.93 $ 2.73 Net income available to common shareholders per
share -diluted $ 0.61 $ 0.57 $ 0.64 $ 1.91 $ 2.70 Dividends per share $ 0.63 $ 0.63 $ 0.63 $ 0.61 $ 0.61 Funds available for distribution (FAD) (4) $ 85,291 $ 100,645 $ 103,611 $ 107,962 $ 112,377 Ratios: Interest Coverage Ratio (excluding capitalized
interest) - cash basis (5) 2.65 2.55 2.64 2.65 2.87 Interest Coverage Ratio (including capitalized
interest) - cash basis (5) 2.48 2.39 2.48 2.50 2.69 FFO Payout Ratio (6) 60.00 % 64.29 % 61.17 % 59.22 % 53.51 % FAD Payout Ratio (7) 89.08 % 74.48 % 71.39 % 65.77 % 62.88 % December 31, 2003 September 30, 2003 June 30, 2003 March 31, 2003 December 31, 2002 Capitalization: Total Debt $ 5,004,720 $ 4,920,343 $ 4,819,282 $ 4,980,113 $ 5,147,220 Price @ Quarter End $ 48.19 $ 43.47 $ 43.80 $ 37.90 $ 36.86 Equity Value @ Quarter End $ 6,153,044 $ 5,522,298 $ 5,545,299 $ 4,760,126 $ 4,608,901 Total Market Capitalization (8) $ 11,157,764 $ 10,442,641 $ 10,364,581 $ 9,740,239 $ 9,756,121 Debt/Total Market Capitalization (8) 44.85 % 47.12 % 46.50 % 51.13 % 52.76 % (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) Rental Expenses
include operating expenses and real estate taxes. Amounts are exclusive of the gross up of reimbursable electricity
amounts totaling $6,620, $8,742, $6,459, $5,391 and $6,476 for the three months
ended December 31, 2003, September 30, 2003, June 30, 2003, March 31, 2003 and
December 31, 2002, respectively. (3) For a quantitative
reconciliation of the differences between FFO before net derivative
gains/losses and net income available to common shareholders, see page 9. (4) For a quantitative
reconciliation of the differences between FAD and FFO before net derivative gains/losses,
see page 10. (5) For additional
detail, see page 10. (6) Gross dividends to
common shareholders plus distributions to common Operating Partnership
unitholders (other than the Company) divided by FFO per share before net
derivative gains/losses- diluted (7) Gross dividends to
common shareholders plus distributions to common Operating Partnership
unitholders (other than the Company) divided by FAD. (8) For additional
detail, see page 54. 6 Boston Properties,
Inc. Fourth Quarter 2003 (in
thousands) December
31, 2003 September
30, 2003 June 30,
2003 March 31,
2003 December
31, 2002 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) ASSETS Real estate $ 8,202,958 $ 8,060,525 $ 7,863,035 $ 7,745,475 $ 7,781,684 Development in progress 542,600 481,571 445,003 418,798 448,576 Land held for future development 232,098 232,361 218,045 216,537 215,866 Real estate held for sale 5,604 224,585 Less accumulated depreciation (1,001,435 ) (952,754 ) (893,246 ) (846,002 ) (822,933 ) Total real estate 7,981,825 7,821,703 7,632,837 7,534,808 7,847,778 Cash and cash equivalents 22,686 37,621 158,587 384,418 55,275 Escrows 21,321 27,992 18,187 20,804 41,906 Tenant and other receivables, net 18,425 21,813 21,185 23,193 20,458 Accrued rental income, net 189,852 175,063 160,586 148,034 165,321 Deferred charges, net 188,855 178,819 168,833 165,559 176,545 Prepaid expenses and other assets 39,350 57,012 22,090 30,144 18,015 Investments in unconsolidated joint ventures 88,786 88,632 93,904 101,794 101,905 Total assets $ 8,551,100 $ 8,408,655 $ 8,276,209 $ 8,408,754 $ 8,427,203 LIABILITIES AND STOCKHOLDERS
EQUITY Liabilities: Mortgage notes payable $ 3,471,400 $ 3,450,112 $ 3,349,134 $ 3,758,406 $ 4,267,119 Unsecured senior notes, net of discount 1,470,320 1,470,231 1,470,148 1,221,707 747,375 Unsecured bridge loan 105,683 Unsecured line of credit 63,000 27,043 Accounts payable and accrued expenses 92,026 69,940 49,299 63,319 73,846 Dividends and distributions payable 84,569 83,972 84,030 81,128 81,226 Interest rate contracts 8,191 9,875 12,677 13,663 14,514 Accrued interest payable 50,931 44,010 56,088 37,534 25,141 Other liabilities 80,367 69,242 63,771 63,992 81,085 Total liabilities 5,320,804 5,197,382 5,085,147 5,239,749 5,423,032 Commitments and contingencies Minority interests 830,133 829,779 857,058 860,182 844,581 Stockholders Equity: Excess stock, $.01 par value, 150,000,000 shares
authorized, none issued or outstanding Preferred stock, $.01 par value, 50,000,000 shares
authorized, none issued or outstanding Common stock, $.01 par value, 250,000,000 shares
authorized, 98,230,177, 97,577,665, 97,028,911, 95,928,738 and 95,362,990
outstanding, respectively 982 976 970 959 954 Additional paid-in capital 2,104,158 2,084,490 2,032,952 2,010,764 1,982,689 Earnings in excess of dividends/(dividends in
excess of earnings) 320,900 322,530 327,222 325,114 198,586 Treasury common stock, at cost (2,722 ) (2,722 ) (2,722 ) (2,722 ) (2,722 ) Unearned compensation (6,820 ) (7,271 ) (7,734 ) (8,448 ) (2,899 ) Accumulated other comprehensive loss (16,335 ) (16,509 ) (16,684 ) (16,844 ) (17,018 ) Total stockholders equity 2,400,163 2,381,494 2,334,004 2,308,823 2,159,590 Total liabilities and
stockholders equity $ 8,551,100 $ 8,408,655 $ 8,276,209 $ 8,408,754 $ 8,427,203 7 Boston Properties,
Inc. Fourth Quarter 2003 CONSOLIDATED INCOME STATEMENTS (in thousands, except for per share
amounts) (unaudited) Three
Months Ended 31-Dec-03 30-Sep-03 30-Jun-03 31-Mar-03 31-Dec-02 Revenue: Rental Base Rent $ 258,269 $ 253,376 $ 248,642 $ 247,135 $ 253,730 Recoveries from tenants 38,204 42,038 37,229 39,833 38,136 Parking and other 12,213 13,244 13,949 14,195 13,217 Total rental revenue 308,686 308,658 299,820 301,163 305,083 Hotel revenues 22,082 17,542 17,213 13,246 24,779 Development and management services 4,550 3,616 5,429 4,590 2,769 Interest and other 866 1,089 663 415 700 Total revenue 336,184 330,905 323,125 319,414 333,331 Expenses: Operating 58,848 66,330 57,801 61,021 59,288 Real estate taxes 40,125 40,859 37,764 37,891 38,946 Hotel operating 15,992 12,829 12,258 11,171 17,562 General and administrative 11,749 11,183 11,028 11,399 12,703 Interest (1) 75,001 75,343 75,447 73,645 72,410 Depreciation and amortization 56,232 53,392 50,683 49,765 52,129 Net derivative (gains)/losses (885 ) 991 932 1,461 Loss from early extinguishment of debt 1,474 2,386 Total expenses 257,947 259,051 245,972 247,298 256,885 Income before minority interests and income
from unconsolidated joint ventures 78,237 71,854 77,153 72,116 76,446 Minority interest in property partnerships 313 593 270 428 191 Income from unconsolidated joint ventures 662 1,343 1,353 2,658 2,083 Income before minority interest in
Operating Partnership 79,212 73,790 78,776 75,202 78,720 Minority interest in Operating Partnership
(2) (18,879 ) (18,125 ) (19,117 ) (18,526 ) (19,289 ) Income before gains on sales of real estate
and other assets 60,333 55,665 59,659 56,676 59,431 Gains on sales of real estate and other
assets, net of minority interest 1,341 3,546 52,912 187,562 Income before discontinued operations 60,333 57,006 63,205 109,588 246,993 Income (loss) from discontinued operations,
net of minority interest 259 (36 ) 31 1,929 5,508 Gains on sales of real estate from
discontinued operations, net of minority interest 73,528 7,645 Net income available to common shareholders $ 60,592 $ 56,970 $ 63,236 $ 185,045 $ 260,146 INCOME PER SHARE OF COMMON STOCK (EPS) Net income available to common shareholders
per share - basic $ 0.62 $ 0.59 $ 0.66 $ 1.93 $ 2.73 Net income available to common shareholders
per share - diluted $ 0.61 $ 0.57 $ 0.64 $ 1.91 $ 2.70 (1) Interest expense is
reported net of capitalized interest of $5,192, $4,954, $4,601, $4,453 and
$4,719 for the three months ended December 31, 2003, September 30, 2003, June
30, 2003, March 31, 2003 and December 31, 2002, respectively. (2) Equals minority interest
share of 18.59%, 18.08%, 17.45%, 17.62% and 17.69% of income before minority
interest in Operating Partnership after deduction for preferred dividends and
distributions for the three months ended December 31, 2003, September 30, 2003,
June 30, 2003, March 31, 2003 and December 31, 2002, respectively. Certain prior period amounts have been reclassified
to conform to current period presentation. 8 Boston Properties,
Inc. Fourth Quarter 2003 (in
thousands, except for per share amounts) (unaudited) Three
months ended 31-Dec-03 30-Sep-03 30-Jun-03 31-Mar-03 31-Dec-02 Net income available to common shareholders $ 60,592 $ 56,970 $ 63,236 $ 185,045 $ 260,146 Add: Minority interest in Operating Partnership 18,879 18,125 19,117 18,526 19,289 Less: Minority interest in property partnerships 313 593 270 428 191 Income from unconsolidated joint ventures 662 1,343 1,353 2,658 2,083 Gain on sales of real estate and other
assets, net of minority interest 1,341 3,546 52,912 187,562 Income (loss) from discontinued operations,
net of minority interest 259 (36 ) 31 1,929 5,508 Gain on sales of real estate from
discontinued operations, net of minority interest 73,528 7,645 Income before minority interests and income
from unconsolidated joint ventures 78,237 71,854 77,153 72,116 76,446 Add: Real estate depreciation and amortization
(1) 57,500 54,606 52,338 51,791 56,072 Income (loss) from discontinued operations 339 (14 ) 62 2,372 6,720 Income from unconsolidated joint ventures 662 1,343 1,353 2,658 2,083 Loss from early extinguishment of debt
associated with the sale of properties 1,474 2,386 Less: Minority property partnerships share of
funds from operations 945 805 842 866 1,390 Preferred dividends and distributions 4,443 5,183 5,852 5,771 5,926 Funds from operations (FFO) 131,350 121,801 124,212 123,774 136,391 Add (subtract): Net derivative gains/losses (885 ) 991 932 1,461 FFO before net derivative gains/losses $ 131,350 $ 120,916 $ 125,203 $ 124,706 $ 137,852 FFO available to common shareholders before
net derivative gains/losses (2) $ 106,931 $ 99,057 $ 103,360 $ 102,735 $ 113,464 FFO per share before net derivative
gains/losses- basic $ 1.09 $ 1.02 $ 1.07 $ 1.07 $ 1.19 Weighted average shares outstanding - basic 97,945 97,360 96,531 95,733 95,313 FFO per share before net derivative
gains/losses- diluted $ 1.05 $ 0.98 $ 1.03 $ 1.03 $ 1.14 FFO per share after net derivative
gains/losses- diluted $ 1.05 $ 0.99 $ 1.02 $ 1.02 $ 1.13 Weighted average shares outstanding -
diluted 107,188 107,231 107,408 105,955 105,630 RECONCILIATION
TO DILUTED FUNDS FROM OPERATIONS (in
thousands, except for per share amounts) (unaudited) December 31, 2003 September 30, 2003 June 30, 2003 Income (Numerator) Shares (Denominator) Income (Numerator) Shares (Denominator) Income (Numerator) Shares (Denominator) Basic FFO before net derivative
gains/losses $ 131,350 120,312 $ 120,916 118,846 $ 125,203 116,931 Effect of Dilutive Securities Convertible Preferred Units 4,443 7,087 5,183 8,047 5,852 9,195 Stock Options and other 2,155 1,823 1,682 Diluted FFO before net derivative
gains/losses $ 135,793 129,554 $ 126,099 128,716 $ 131,055 127,808 Companys share of diluted FFO before net
derivative gains/losses (3) $ 112,349 107,188 $ 105,051 107,231 $ 110,137 107,408 FFO per share before net derivative
gains/losses- basic $ 1.09 $ 1.02 $ 1.07 FFO per share before net derivative
gains/losses-diluted $ 1.05 $ 0.98 $ 1.03 March 31, 2003 December 31, 2002 Income (Numerator) Shares (Denominator) Income (Numerator) Shares (Denominator) Basic FFO before net derivative gains/losses $ 124,706 116,207 $ 137,852 115,800 Effect of Dilutive Securities Convertible Preferred Units 5,771 9,199 5,926 9,236 Stock Options and other 1,022 1,082 Diluted FFO before net derivative
gains/losses $ 130,477 126,428 $ 143,778 126,118 Companys share of diluted FFO before net
derivative gains/losses (3) $ 109,348 105,955 $ 120,422 105,630 FFO per share before net derivative
gains/losses- basic $ 1.07 $ 1.19 FFO per share before net derivative
gains/losses-diluted $ 1.03 $ 1.14 (1) Real estate
depreciation includes the Companys share of joint venture real estate
depreciation of $1,874, $1,821, $2,266, $2,514 and $2,848 less corporate
related depreciation of $703, $670, $670, $674 and $733 for the three months
ended December 31, 2003, September 30, 2003, June 30, 2003, March 31, 2003 and
December 31, 2002, respectively. (2) Based on weighted
average shares for the quarter.
Companys share for the quarter ended December 31, 2003, September 30,
2003, June 30, 2003, March 31, 2003 and December 31, 2002 was 81.41%, 81.92%,
82.55%, 82.38% and 82.31%, respectively. (3) Based on weighted
average diluted shares for the quarter.
Companys share for the quarter ended December 31, 2003, September 30,
2003, June 30, 2003, March 31, 2003 and December 31, 2002 was 82.74%, 83.31%,
84.04%, 83.81% and 83.76%, respectively. 9 Boston Properties,
Inc. Fourth Quarter 2003 Funds
Available for Distribution (FAD) (in
thousands) Three
Months Ended December
31, 2003 September
30, 2003 June 30,
2003 March 31,
2003 December
31, 2002 Funds from operations (FFO) before net derivative
gains/losses (see page 9) $ 131,350 $ 120,916 $ 125,203 $ 124,706 $ 137,852 Add: Non real estate
depreciation 703 670 670 674 733 Fair value lease revenue (SFAS 141) 53 577 167 Less: Straight-line
rent (14,536 ) (12,144 ) (10,687 ) (10,866 ) (11,938 ) Recurring capital expenditures (8,413 ) (3,415 ) (4,726 ) (1,960 ) (5,909 ) Hotel improvements, equipment upgrades and
replacements (676 ) (353 ) (911 ) (405 ) (188 ) 2nd generation tenant improvements and leasing
commissions (23,190 ) (5,606 ) (6,105 ) (4,187 ) (8,173 ) Funds available for distribution (FAD) $ 85,291 $ 100,645 $ 103,611 $ 107,962 $ 112,377 Interest
Coverage Ratios (in
thousands, except for ratio amounts) Three
Months Ended December
31, 2003 September
30, 2003 June 30,
2003 March 31,
2003 December
31, 2002 Excluding
Capitalized Interest Income before minority interests and income from
unconsolidated joint ventures $ 78,237 $ 71,854 $ 77,153 $ 72,116 $ 76,446 Add: Discontinued operations 339 (14 ) 62 2,372 6,720 Interest expense 75,001 75,343 75,447 73,645 72,410 Depreciation 56,232 53,392 50,683 49,765 52,129 Net derivative (gains)/losses (885 ) 991 932 1,461 Prepayment penalty 1,474 2,386 Income from unconsolidated joint ventures 662 1,343 1,353 2,658 2,083 Discontinued Operations - depreciation 97 63 59 186 1,838 Discontinued Operations - interest expense 296 (264 ) Fair value lease revenue (SFAS 141) 53 577 167 Less: Straight-line rent (14,536 ) (12,144 ) (10,687 ) (10,866 ) (11,938 ) Subtotal 196,085 189,529 195,228 192,578 203,271 Divided by: Interest expense (1) 73,975 74,214 74,077 72,352 70,974 Interest expense - discontinued operations 296 (264 ) Total interest expense 73,975 74,214 74,077 72,648 70,710 Interest Coverage Ratio 2.65 2.55 2.64 2.65 2.87 Including
Capitalized Interest Income before minority interests and income from
unconsolidated joint ventures $ 78,237 $ 71,854 $ 77,153 $ 72,116 $ 76,446 Add: Discontinued operations 339 (14 ) 62 2,372 6,720 Interest expense 75,001 75,343 75,447 73,645 72,410 Depreciation 56,232 53,392 50,683 49,765 52,129 Net derivative (gains)/losses (885 ) 991 932 1,461 Prepayment penantly 1,474 2,386 Income from unconsolidated joint ventures 662 1,343 1,353 2,658 2,083 Discontinued Operations - depreciation 97 63 59 186 1,838 Discontinued Operations - interest expense 296 (264 ) Fair value lease revenue (SFAS 141) 53 577 167 Less: Straight-line rent (14,536 ) (12,144 ) (10,687 ) (10,866 ) (11,938 ) Subtotal 196,085 189,529 195,228 192,578 203,271 Divided by: Interest expense (1) (2) 79,167 79,168 78,678 76,805 75,693 Interest expense - discontinued operations 296 (264 ) Total interest expense 79,167 79,168 78,678 77,101 75,429 Interest Coverage Ratio 2.48 2.39 2.48 2.50 2.69 (1) Excludes
amortization of financing costs of $1,026, $1,129, $1,370, $1,293 and $1,436
for the quarters ended December 31, 2003, September 30, 2003, June 30, 2003,
March 31, 2003 and December 31, 2002, respectively. (2) Includes
capitalized interest of $5,192, $4,954, $4,601, $4,453 and $4,719 for the
quarters ended December 31, 2003, September 30, 2003, June 30, 2003, March 31,
2003 and December 31, 2002, respectively. 10 Boston Properties,
Inc. Fourth Quarter 2003 Debt (in
thousands) Aggregate
Principal December
31, 2003 Mortgage Notes Payable $ 3,471,400 Unsecured Senior Notes, net of discount 1,470,320 Unsecured Line of Credit 63,000 Total Debt $ 5,004,720 Equity (in thousands) Shares & Units Outstanding Common Stock Equivalents Equivalent (1) Common Stock 98,230 98,230 $ 4,733,704 Operating Partnership Units 22,366 22,366 1,077,818 Series Two Preferred OP Units 5,401 7,087 341,523 Total Equity 127,683 $ 6,153,044 Total Market Capitalization $ 11,157,764 (1) Value based on
December 31, 2003 closing price of $48.19 per share of common stock. 11 Boston Properties,
Inc. Fourth Quarter 2003 Debt Maturities and Principal Payments (in
thousands) 2004 (1) 2005 2006 2007 2008 Thereafter Total Amount $ 446,758 $ 319,713 $ 368,821 $ 185,166 $ 1,010,594 $ 2,673,668 $ 5,004,720 Weighted Average Rate 4.17 % 6.42 % 5.52 % 6.59 % 6.79 % 6.60 % 6.33 % Unsecured Debt Unsecured Line of Credit - Matures January
17, 2006 (in
thousands) Facility Outstanding @ 12/31/03 Letters of Credit Remaining Capacity @
12/31/03 $ 605,000 $ 63,000 $ 5,670 $ 536,330 Unsecured Senior Notes (in
thousands) Face
Amount @ 12/31/03 Amount net
of discount @ 12/31/03 $ 1,475,000 $ 1,470,320 Unsecured and Secured Debt Analysis % of Total Debt Weighted Average
Rate Weighted
Average Maturity Unsecured Debt 30.64 % 5.79 % 9.6 years Secured Debt 69.36 % 6.58 % 4.9 years Total Debt 100.00 % 6.33 % 6.3 years Floating and Fixed Rate Debt Analysis % of Total Debt Weighted Average
Rate Weighted
Average Maturity Floating Rate Debt 8.76 % 2.87 % 1.2 years Fixed Rate Debt 91.24 % 6.67 % 6.8 years Total Debt 100.00 % 6.33 % 6.3 years (1) Includes $333
million of debt on Times Square Tower which has been extended to 2006 at a
current weighted average per annum rate of LIBOR plus .95%. 12 Boston Properties,
Inc. Fourth Quarter 2003 Senior
Unsecured Debt Covenant Compliance Ratios (in
thousands) In the fourth quarter of 2002 the Companys
operating partnership received investment grade ratings on its senior unsecured
debt securities and thereafter issued unsecured notes. The notes were issued under an indenture,
dated as of December 13, 2002, by and between Boston Properties Limited
Partnership and The Bank of New York, as trustee, as supplemented, which, among
other things, requires us to comply with the following limitations on
incurrence of debt: Limitation on Outstanding Debt; Limitation on Secured Debt;
Ratio of Annualized Consolidated EBITDA to Annualized Interest Expense; and
Maintenance of Unencumbered Assets.
Compliance with these restrictive covenants requires us to apply
specialized terms the meanings of which are described in detail in our filings
with the SEC, and to calculate ratios in the manner prescribed by the
indenture. This section presents such ratios as of December
31, 2003 to show that the Companys operating partnership was in compliance
with the terms of the indenture, as amended, which has been filed with the
SEC. This section also presents certain
other indenture-related data which we believe assists investors in the
Companys unsecured debt securities.
Management is not presenting these ratios and the related calculations
for any other purpose or for any other period, and is not intending for these
measures to otherwise provide information to investors about the Companys
financial condition or results of operations.
Investors should not rely on these measures other than for purposes of
testing our compliance with the indenture. December
31, 2003 Total Assets: Capitalized Property Value $ 10,567,390 Cash and Cash Equivalents 22,686 Undeveloped Land, at Cost 232,098 Development in Process, at Cost (including
Joint Venture %) 566,632 Total Assets $ 11,388,806 Unencumbered Assets $ 4,504,660 Secured Debt (Fixed and Variable) (1) $ 3,459,828 Joint Venture Debt 161,609 Contingent Liabilities & Letters of
Credit 17,911 Unsecured Debt (2) 1,538,000 Total Outstanding Debt $ 5,177,348 Consolidated EBITDA: Income before minority interests and income
from unconsolidated joint ventures (per Consolidated Income Statement) $ 78,237 Add:
Interest Expense (per Consolidated Income Statement) 75,001 Add:
Depreciation and Amortization (per Consolidated Income Statement) 56,232 Less:
Net derivative gains/losses (SFAS No. 133) (per Consolidated Income
Statement) EBITDA 209,470 Add:
Company share of unconsolidated joint venture EBITDA 5,082 Consolidated EBITDA $ 214,552 Adjusted Interest Expense: Interest Expense (per Consolidated Income
Statement) $ 75,001 Add:
Company share of unconsolidated joint venture interest expense 2,739 Less:
amortization of financing costs (1,026 ) Adjusted Interest Expense $ 76,714 Covenant Ratios and Related Data Test Actual Total Outstanding Debt/Total Assets Less than 60% 45.5 % Secured Debt/Total Assets Less than 50% 31.8 % Interest Coverage (Annualized Consolidated
EBITDA to Annualized Interest Expense) Greater than 1.50x 2.80 Unencumbered Assets/ Unsecured Debt Greater than 150% 292.9 % Unencumbered Consolidated EBITDA $ 89,853 Unencumbered Interest Coverage
(Unencumbered Consolidated EBITDA to Unsecured Interest Expense) 3.98 % of unencumbered Consoidated EBITDA to
Consolidated EBITDA 41.9 % # of unencumbered properties 72 (1) Excludes Fair Value
Adjustment of $11.6 million. (2) Excludes Debt
Discount of $4.7 million. 13 Boston Properties,
Inc. Fourth Quarter 2003 DEBT
MATURITIES AND PRINCIPAL PAYMENTS (in
thousands) Property 2004 2005 2006 2007 2008 Thereafter Total Citigroup Center $ 6,190 $ 6,651 $ 7,145 $ 7,676 $ 8,246 $ 475,007 $ 510,915 Times Square Tower (1) 332,890 332,890 Embarcadero Center One, Two and Federal Reserve 4,810 5,141 5,496 5,877 278,912 300,236 Prudential Center 4,592 4,919 5,256 5,619 259,705 280,091 280 Park Avenue 3,022 3,261 3,519 3,798 4,099 244,695 262,394 599 Lexington Avenue 225,000 225,000 Embarcadero Center Four 3,543 3,797 4,061 4,346 129,712 145,459 Embarcadero Center Three 2,351 2,506 2,671 132,726 140,254 Riverfront Plaza 2,905 3,104 3,314 3,540 95,327 108,190 Democracy Center 1,961 2,103 2,257 2,421 2,597 91,132 102,471 Embarcadero Center West Tower 1,547 1,649 90,415 93,611 100 East Pratt Street 1,948 2,100 2,246 2,401 78,110 86,805 One Freedom Square 1,792 1,896 2,005 2,122 2,245 73,641 83,701 601 and 651 Gateway Boulevard 81,511 81,511 One & Two Reston Overlook 65,908 65,908 202, 206 & 214 Carnegie Center 662 719 780 845 916 57,300 61,222 New Dominion Technology Park, Building One 92 655 1,283 1,379 1,481 52,558 57,448 Reservoir Place 1,316 1,395 1,478 1,565 1,660 48,689 56,103 Capital Gallery 1,404 1,524 50,651 53,579 504, 506 & 508 Carnegie Center 1,053 1,136 1,221 1,314 40,915 45,639 (1) In January 2004, the loan was extended
to 2006 at a current weighted average per annum rate of LIBOR plus .95%. 14 DEBT
MATURITIES AND PRINCIPAL PAYMENTS (in
thousands) Property 2004 2005 2006 2007 2008 Thereafter Total 10 & 20 Burlington
Mall Rd & 91 Hartwell 633 741 795 855 919 34,670 38,613 10 Cambridge Center 607 659 715 777 844 30,592 34,194 New Dominion Technology
Park, Bldg. 2 42,642 42,642 1301 New York Avenue 1,314 1,417 1,531 1,651 1,781 21,629 29,323 Sumner Square 518 557 599 645 694 26,242 29,255 Eight Cambridge Center 557 601 649 702 757 23,729 26,995 510 Carnegie Center 588 635 683 735 23,519 26,160 Lockheed Martin Building 641 685 732 782 21,799 24,639 University Place 702 752 806 864 925 19,414 23,463 Reston Corporate Center 613 654 698 745 20,523 23,233 NIMA Building 530 566 604 644 17,785 20,129 Bedford Business Park 690 751 818 890 16,859 20,008 191 Spring Street 630 686 18,267 19,583 101 Carnegie Center 375 406 6,622 7,403 Montvale Center 173 189 6,762 7,124 Hilltop Business Center 201 216 231 247 264 4,050 5,209 446,758 319,713 305,821 185,166 1,010,594 1,203,348 3,471,400 Unsecured Senior Notes 1,470,320 1,470,320 Unsecured Line of Credit 63,000 63,000 $ 446,758 $ 319,713 $ 368,821 $ 185,166 $ 1,010,594 $ 2,673,668 $ 5,004,720 % of Total Debt 8.93 % 6.39 % 7.37 % 3.70 % 20.19 % 53.42 % 100.00 % 15 Boston Properties,
Inc. Fourth Quarter 2003 Miscellaneous
Balance Sheet Information (unaudited and in
thousands) as of December 31, 2003 Market Square North Metropolitan Square 140 Kendrick Street 265 Franklin Street 901 New York Avenue (1) 801 New Jersey Avenue (1) Combined Total Equity (2) $ 10,561 $ 32,202 $ 5,403 $ 23,207 $ 14,413 $ 3,000 $ 88,786 Mortgage/Construction
loans payable (2) $ 47,843 $ 69,123 $ 13,915 $ 18,897 $ 11,831 $ $ 161,609 BXPs nominal ownership
percentage 50.00 % 51.00 % 25.00 % 35.00 % 25.00 % 50.00 % Results
of Operations (unaudited and in
thousands) for the three months ended
December 31, 2003 Market Square North Metropolitan Square 140 Kendrick Street 265 Franklin Street 901 New York Avenue (1) 801 New Jersey Avenue (1) Combined REVENUE Total revenue $ 4,898 $ 6,482 $ 2,785 $ 3,556 $ $ $ 17,721 (3) EXPENSES Operating 1,631 2,105 406 1,779 5,921 SUBTOTAL 3,267 4,377 2,379 1,777 11,800 Interest 1,852 2,816 1,051 326 6,045 Depreciation and
amortization 1,243 1,367 350 1,184 4,144 NET
INCOME $ 172 $ 194 $ 978 $ 267 $ $ $ 1,611 BXPs share of net
income $ 87 $ 100 $ 381 (4) $ 94 $ $ $ 662 BXPs share of
depreciation & amortization 621 697 142 414 1,874 BXPs share of Funds
from Operations (FFO) $ 708 $ 797 $ 523 (4) $ 508 $ $ $ 2,536 (1) Property is currently not in service
(i.e., under construction or undeveloped land). (2) Represents the Companys share. (3) The impact of the straight-line rent
adjustment increased revenue by $1,405 for the three months ended December 31,
2003. (4) Reflects
the changes in the allocation percentages pursuant to the achievement of
specified investment return thresholds as provided for in the joint venture
agreement. 16 Boston Properties,
Inc. Fourth Quarter 2003 UNCONSOLIDATED
JOINT VENTURE DEBT ANALYSIS (*) Debt
Maturities and Principal Payments (in
thousands) 2004 2005 2006 2007 2008 Thereafter Total Amount $ 20,676 $ 13,757 $ 2,084 $ 2,256 $ 2,440 $ 120,396 $ 161,609 Weighted Average Rate 2.94 % 3.55 % 7.91 % 7.91 % 7.91 % 7.96 % 6.94 % Floating
and Fixed Rate Debt Analysis % of Total
Debt Weighted Average Rate Weighted Average Maturity Floating Rate Debt 19.01 % 2.61 % 6.9 years Fixed Rate Debt 80.99 % 7.96 % 1.2 years Total Debt 100.00 % 6.94 % 5.8 years Debt
Maturities and Principal Payments by Property (in
thousands) Property 2004 2005 2006 2007 2008 Thereafter Total Metropolitan Square
(51%)* $ 764 $ 830 $ 901 $ 978 $ 1,061 $ 64,589 $ 69,123 Market Square North
(50%)* 858 927 1,001 1,081 1,167 42,809 47,843 265 Franklin Street
(35%)* 18,897 18,897 140 Kendrick Street
(25%)* 157 169 182 197 212 12,998 13,915 901 New York Avenue
(25%)* 11,831 11,831 $ 20,676 $ 13,757 $ 2,084 $ 2,256 $ 2,440 $ 120,396 $ 161,609 % of Total Debt 12.79 % 8.51 % 1.29 % 1.40 % 1.51 % 74.50 % 100.00 % (*) All
amounts represent the Companys share. 17 Boston Properties,
Inc. Fourth Quarter 2003 PORTFOLIO
OVERVIEW - SQUARE FOOTAGE Rentable
Square Footage of In-Service Properties by Location and Type of Property Geographic Area Office (1) Office/Technical Industrial Total % of Total Greater Boston 7,805,325 (2) 545,206 169,273 8,519,804 27.01 % Greater Washington 6,565,376 (3) 970,381 7,535,757 23.89 % Greater San Francisco 4,709,982 142,866 60,000 4,912,848 15.58 % Midtown Manhattan 6,547,477 6,547,477 20.76 % Princeton/East
Brunswick, NJ 2,316,990 2,316,990 7.35 % Baltimore, MD 637,605 637,605 2.02 % Richmond, VA 906,033 906,033 2.87 % Bucks County, PA 161,000 161,000 0.51 % 29,488,788 1,658,453 390,273 31,537,514 100.00 % % of Total 93.50 % 5.26 % 1.24 % 100.00 % Hotel
Properties Hotel Properties Number of Rooms Square Feet Long Wharf Marriott,
Boston, MA 402 420,000 Cambridge Center
Marriott, Cambridge, MA 431 330,400 Residence Inn by
Marriott, Cambridge, MA 221 187,474 Total Hotel Properties 1,054 937,874 Structured
Parking Number of Spaces Square Feet Total
Structured Parking 31,098 9,388,175 (1) Includes approximately 1,300,000
square feet of retail space. (2) Includes
344,126 square feet at 265 Franklin Street which is 35% owned by Boston
Properties and 380,987 square feet at 140 Kendrick Street which is 25% owned by
Boston Properties. (3) Includes
585,220 square feet at Metropolitan Square which is 51% owned by Boston
Properties and 401,279 square feet at Market Square North which is 50% owned by
Boston Properties. 18 Boston Properties,
Inc. Fourth Quarter 2003 In-Service Property
Listing as of
December 31, 2003 Sub Market Number of Buildings Square Feet Leased % Annualized Revenue Per Leased SF Encumbered with secured debt (Y/N) Central Business District (CBD) or Suburban (S) Greater Boston Office 800 Boylston Street - The Prudential Center CBD Boston MA 1 1,175,739 96.2 % $ 37.32
Y CBD 111 Huntington Avenue - The Prudential Center CBD Boston MA 1 853,672 99.3 % 49.38 N CBD 101 Huntington Avenue - The Prudential Center CBD Boston MA 1 504,628 80.9 % 39.63 Y CBD (1) The Shops at the Prudential Center CBD Boston MA 1 535,818 95.5 % 50.90 Y CBD (2) Shaws Supermarket at the Prudential Center CBD Boston MA 1 57,235 100.0 % 44.79 N CBD 265 Franklin Street (35% ownership) CBD Boston MA 1 344,126 74.6 % 56.33 Y CBD One Cambridge Center East Cambridge MA 1 215,385 91.0 % 43.94 N CBD Three Cambridge Center East Cambridge MA 1 107,484 100.0 % 31.56 N CBD Eight Cambridge Center East Cambridge MA 1 177,226 100.0 % 31.87 Y CBD Ten Cambridge Center East Cambridge MA 1 152,664 100.0 % 35.48 Y CBD Eleven Cambridge Center East Cambridge MA 1 79,616 100.0 % 43.49 N CBD University Place Mid-Cambridge MA 1 195,282 100.0 % 37.04 Y CBD Reservoir Place Route 128 Mass Turnpike MA 1 526,165 81.7 % 32.38 Y S 204 Second Avenue Route 128 Mass Turnpike MA 1 40,974 52.7 % 36.83 N S 140 Kendrick Street (25% ownership) Route 128 Mass Turnpike MA 3 380,987 100.0 % 27.53 Y S 170 Tracer Lane Route 128 Mass Turnpike MA 1 75,073 56.0 % 25.50 N S Waltham Office Center Route 128 Mass Turnpike MA 3 129,041 91.7 % 27.49 N S 195 West Street Route 128 Mass Turnpike MA 1 63,500 100.0 % 47.17 N S 200 West Street Route 128 Mass Turnpike MA 1 248,048 100.0 % 35.15 N S (2) Waltham Weston Corporate Center Route 128 Mass Turnpike MA 1 306,801 66.9 % 28.17 N S 10 & 20 Burlington Mall Road Route 128 Northwest MA 2 153,048 97.2 % 25.32 Y S Bedford Business Park Route 128 Northwest MA 1 90,000 100.0 % 20.70 Y S 32 Hartwell Avenue Route 128 Northwest MA 1 69,154 100.0 % 29.34 N S 91 Hartwell Avenue Route 128 Northwest MA 1 121,486 79.6 % 34.23 Y S 92 Hayden Avenue Route 128 Northwest MA 1 31,100 100.0 % 51.99 N S 100 Hayden Avenue Route 128 Northwest MA 1 55,924 100.0 % 16.05 N S 33 Hayden Avenue Route 128 Northwest MA 1 80,872 43.3 % 30.46 N S Lexington Office Park Route 128 Northwest MA 2 166,735 81.1 % 29.59 N S 191 Spring Street Route 128 Northwest MA 1 162,700 100.0 % 30.04 Y S 181 Spring Street Route 128 Northwest MA 1 53,595 41.2 % 35.95 N S 201 Spring Street Route 128 Northwest MA 1 102,500 100.0 % 34.91 N S 40 Shattuck Road Route 128 Northwest MA 1 120,000 95.6 % 27.45 N S Quorum Office Park Route 128 Northwest MA 2 259,918 100.0 % 19.33 N S Newport Office Park Route 128 South MA 1 168,829 44.6 % 25.38 N S 41 7,805,325 90.1 % $ 37.27 Office/Technical Fourteen Cambridge Center East Cambridge MA 1 67,362 100.0 % 22.00 N CBD Bedford Business Park Route 128 Northwest MA 2 383,704 100.0 % 15.95 Y S 17 Hartwell Avenue Route 128 Northwest MA 1 30,000 100.0 % 12.00 N S 164 Lexington Road Route 128 Northwest MA 1 64,140 100.0 % 11.05 N S 5 545,206 100.0 % $ 15.90 Industrial 40-46 Harvard Street Route 128 Southwest MA 1 169,273 0.0 % N S Total Greater Boston: 47 8,519,804 88.9 % $ 35.73 19 Sub Market Number of Buildings Square Feet Leased % Annualized Revenue Per Leased SF Encumbered with secured debt (Y/N) Central Business District (CBD) or Suburban (S) Greater Washington, DC Office Capital Gallery Southwest Washington DC 1 396,894 100.0 % $ 38.02
Y CBD 500 E Street, N. W. Southwest Washington DC 1 242,769 100.0 % 33.80 N CBD Metropolitan Square (51% ownership) East End Washington DC 1 585,220 99.1 % 40.37 Y CBD 1301 New York Avenue East End Washington DC 1 188,358 100.0 % 30.49 Y CBD Market Square North (50% ownership) East End Washington DC 1 401,279 100.0 % 45.25 Y CBD (2) 1333 New Hampshire Avenue CBD Washington DC 1 315,363 100.0 % 36.15 N CBD Sumner Square CBD Washington DC 1 207,620 100.0 % 35.40 Y CBD Decoverly Two Montgomery County MD 1 77,747 100.0 % 24.79 N S Decoverly Three Montgomery County MD 1 77,040 83.2 % 26.14 N S Democracy Center Montgomery County MD 3 681,062 81.6 % 30.62 Y S Montvale Center Montgomery County MD 1 120,861 88.7 % 25.14 Y S 2600 Tower Oaks Boulevard Montgomery County MD 1 178,887 100.0 % 33.10 N S Orbital Sciences 1&3 Loudoun County 2 176,726 100.0 % 23.67 N S Orbital Sciences 2 Loudoun County 1 160,502 100.0 % 24.01 N S The Arboretum Fairfax County VA 1 95,584 100.0 % 26.34 N S (2) One Freedom Square Fairfax County VA 1 410,308 100.0 % 34.56 Y S (2) Two Freedom Square Fairfax County VA 1 421,502 100.0 % 34.82 N S One Reston Overlook Fairfax County VA 1 312,685 100.0 % 24.46 Y S Two Reston Overlook Fairfax County VA 1 132,669 80.1 % 29.34 Y S (2) One Discovery Square Fairfax County VA 1 181,019 100.0 % 37.40 N S (2) Two Discovery Square Fairfax County VA 1 185,920 95.9 % 31.97 N S New Dominion Technology Park Fairfax County VA 1 235,201 100.0 % 31.61 Y S Reston Corporate Center Fairfax County VA 2 261,046 100.0 % 32.56 Y S Lockheed Martin Building Fairfax County VA 1 255,244 100.0 % 30.59 Y S NIMA Building Fairfax County VA 1 263,870 100.0 % 28.99 Y S 29 6,565,376 97.1 % $ 33.36 Office/Technical (2) Broad Run Business Park Loudoun County 1 127,226 54.7 % 22.18 N S Sugarland Business Park, Building One Fairfax County VA 1 52,313 23.0 % 22.67 N S (3)(4) Sugarland Business Park, Building Two Fairfax County VA 1 59,215 65.9 % 20.69 N S 7435 Boston Boulevard Fairfax County VA 1 103,557 100.0 % 17.63 N S 7451 Boston Boulevard Fairfax County VA 1 47,001 100.0 % 20.97 N S 7450 Boston Boulevard Fairfax County VA 1 62,402 100.0 % 20.61 N S 7374 Boston Boulevard Fairfax County VA 1 57,321 100.0 % 13.88 N S 8000 Grainger Court Fairfax County VA 1 90,465 36.9 % 16.20 N S 7500 Boston Boulevard Fairfax County VA 1 79,971 100.0 % 14.65 N S 7501 Boston Boulevard Fairfax County VA 1 75,756 100.0 % 23.52 N S 7601 Boston Boulevard Fairfax County VA 1 103,750 100.0 % 14.17 N S 7375 Boston Boulevard Fairfax County VA 1 26,865 100.0 % 17.90 N S 8000 Corporate Court Fairfax County VA 1 52,539 100.0 % 10.51 N S 7300 Boston Boulevard Fairfax County VA 1 32,000 100.0 % 20.86 N S 14 970,381 81.9 % $ 17.83
Total Greater Washington: 43 7,535,757 95.1 % $ 31.64 20 Sub Market Number of Buildings Square Feet Leased% Annualized Revenue Per Leased SF Encumbered with secured debt (Y/N) Central Business District (CBD) or Suburban (S) Midtown Manhattan Office 599
Lexington Avenue Park Avenue
NY 1 1,018,843 98.8 % $ 64.12 Y CBD 280
Park Avenue Park Avenue
NY 1 1,170,080 98.5 % 56.71 Y CBD Citigroup
Center Park Avenue
NY 1 1,576,803 99.9 % 60.52 Y CBD 399
Park Avenue Park Avenue
NY 1 1,679,972 99.7 % 70.58 N CBD 5
Times Square Times
Square NY 1 1,101,779 100.0 % 53.23 N CBD Total
Midtown Manhattan: 5 6,547,477 99.4 % $ 61.76 Princeton/East
Brunswick, NJ Office 101
Carnegie Center Princeton
NJ 1 123,659 100.0 % $ 28.19 Y S 104
Carnegie Center Princeton
NJ 1 102,830 78.4 % 30.73 N S 105
Carnegie Center Princeton
NJ 1 69,648 100.0 % 29.39 N S 201
Carnegie Center Princeton
NJ 6,500 100.0 % 27.42 N S 202
Carnegie Center Princeton
NJ 1 128,705 97.6 % 30.79 Y S 206
Carnegie Center Princeton
NJ 1 161,763 100.0 % 28.98 Y S 210
Carnegie Center Princeton
NJ 1 161,112 100.0 % 30.82 N S 211
Carnegie Center Princeton
NJ 1 47,025 N S 212
Carnegie Center Princeton
NJ 1 148,153 98.5 % 32.49 N S 214
Carnegie Center Princeton
NJ 1 150,416 95.4 % 29.38 Y S 302
Carnegie Center Princeton
NJ 1 65,135 100.0 % 31.79 N S 502
Carnegie Center Princeton
NJ 1 116,374 95.3 % 33.21 N S 504
Carnegie Center Princeton
NJ 1 121,990 100.0 % 27.67 Y S 506
Carnegie Center Princeton
NJ 1 136,213 100.0 % 30.04 Y S 508
Carnegie Center Princeton
NJ 1 131,085 100.0 % 27.73 Y S 510
Carnegie Center Princeton
NJ 1 234,160 100.0 % 27.30 Y S One
Tower Center East
Brunswick NJ 1 412,222 84.1 % 34.28 N S Total
Princeton/East Brunswick, NJ: 16 2,316,990 93.4 % $ 30.40 Greater San
Francisco Office Embarcadero
Center One CBD San
Francisco CA 1 836,582 95.7 % $ 43.20 Y CBD Embarcadero
Center Two CBD San
Francisco CA 1 778,712 85.9 % 47.25 Y CBD Embarcadero
Center Three CBD San
Francisco CA 1 768,949 80.0 % 41.66 Y CBD Embarcadero
Center Four CBD San
Francisco CA 1 936,788 94.5 % 62.00 Y CBD Federal
Reserve CBD San
Francisco CA 1 149,592 99.8 % 49.19 Y CBD West
Tower CBD San
Francisco CA 1 473,774 100.0 % 44.10 Y CBD 611
Gateway South San
Francisco CA 1 256,302 N S 601
and 651 Gateway South San
Francisco CA 2 509,283 49.5 % 32.91 Y S 9 4,709,982 81.6 % $ 47.65 Office/Technical (5) Hilltop Office Center South San
Francisco CA 9 142,866 100.0 % $ 12.73 Y S Industrial 560
Forbes Blvd South San
Francisco CA 1 40,000 100.0 % 10.86 N S (4)(5) 430 Rozzi Place South San
Francisco CA 1 20,000 100.0 % 12.09 N S 2 60,000 100.0 % $ 11.27 Total
Greater San Francisco: 20 4,912,848 82.4 % $ 45.88 21 Sub Market Number of Buildings Square Feet Leased% Annualized Revenue Per Leased SF Encumbered with secured debt (Y/N) Central Business District (CBD) or Suburban (S) Baltimore,
MD Office 100 East Pratt Street Baltimore MD 1 637,605 95.1 % $ 31.39 Y CBD Richmond,
VA Office Riverfront Plaza Richmond VA 1 906,033 89.2 % $ 20.61 Y CBD Bucks
County, PA Industrial 38 Cabot Boulevard Bucks County PA 1 161,000 100.0 % $ 4.81 N S Total In-Service Properties: 134 31,537,514 92.1 %(6) $ 40.89 (1) 93,856 square feet of space is unencumbered. (2) Not included in same property analysis (3) Property under contract to be sold. Greater Washington occupancy without this
property would have been 95.4%. (4) Not included in same property Net Operating Income
analysis on page 48. (5) Subsequent to December 31,
2003, property is under contract to be sold or has been sold. Total Greater San Francisco occupancy
without these properties would have been 81.8%. (6) Occupancy at December 31, 2003
would remain at 92.1% if all properties under contract to be sold or sold
subsequent to December 31, 2003 were not included. 22 Boston Properties,
Inc. Fourth Quarter 2003 TOP
20 TENANTS LISTING AND PORTFOLIO TENANT
DIVERSIFICATION TOP 20
TENANTS BY SQUARE FEET LEASED Tenant Sq. Ft. % of Portfolio 1 U.S. Government 1,432,271 4.54 % 2 Citibank, N.A. 1,231,068 3.90 % 3 Ernst and Young 1,064,939 3.38 % 4 Shearman & Sterling 585,808 1.86 % 5 Lockheed Martin Corporation 567,429 1.80 % 6 Gillette Company 485,932 1.54 % 7 Parametric Technology Corp. 470,987 (1) 1.49 % 8 Wachovia 453,964 1.44 % 9 Lehman Brothers 436,723 1.38 % 10 Washington Group International 365,245 1.16 % 11 Deutsche Bank Trust 346,617 1.10 % 12 Orbital Sciences Corporation 337,228 1.07 % 13 T. Rowe Price Associates, Inc. 330,313 1.05 % 14 TRW, Inc. 312,977 0.99 % 15 Hunton & Williams 305,837 0.97 % 16 Akin Gump Strauss Hauer & Feld 301,880 0.96 % 17 Kirkland & Ellis 294,821 (2) 0.93 % 18 Digitas 279,182 0.89 % 19 Bingham McCutchen 270,824 0.86 % 20 Accenture 265,622 0.84 % Total% of Portfolio
Square Feet 32.15 % Total% of Portfolio
Revenue 35.80 % Major
Signed Deals for Future Development Tenant Property Sq. Ft. U.S. Government New Dominion Tech. 257,400 Finnegan Henderson
Farabow Garrett & Dunner, LLP 901 New York Ave. 253,126 OMelveny & Myers Times Square Tower 247,642 (1) Includes 380,987
square feet of space in a property in which Boston Properties has a 25%
interest. (2) Includes 159,434
square feet of space in a property in which Boston Properties has a 51%
interest. TENANT
DIVERSIFICATION (GROSS RENT) * * The
classification of the Companys tenants is based on the U.S. Governments North
American Industry Classification System (NAICS), which has replaced the
Standard Industrial Classification (SIC) system. 23 Boston Properties,
Inc. Fourth Quarter 2003 Percentage
of Net Operating Income for In-Service Properties by
Location and Type of Property for the Quarter Ended December 31, 2003 (1) Geographic Area Office (2) Office/ Technical Industrial Hotel Total Greater Boston 20.7 % 0.7 % 2.9 % 24.3 % Greater Washington 17.7 % 1.1 % 18.8 % Greater San Francisco 13.8 % 0.1 % 0.1 % 14.0 % Midtown Manhattan 34.4 % 34.4 % Princeton/East
Brunswick, NJ 5.2 % 5.2 % Baltimore, MD 1.6 % 1.6 % Richmond, VA 1.6 % 1.6 % Bucks County, PA 0.1 % 0.1 % Total 95.0 % 1.9 % 0.2 % 2.9 % 100.0 % Geographic Area CBD Suburban Total Greater Boston 17.5 % 6.8 % 24.3 % Greater Washington 6.1 % 12.6 % 18.8 % Greater San Francisco 13.3 % 0.8 % 14.0 % Midtown Manhattan 34.4 % 34.4 % Princeton/East
Brunswick, NJ 5.2 % 5.2 % Baltimore, MD 1.6 % 1.6 % Richmond, VA 1.6 % 1.6 % Bucks County, PA 0.1 % 0.1 % Total 74.5 % 25.5 % 100.0 % (1) For a quantitative
reconciliation of net operating income (NOI) to net income in accordance with
GAAP, see page 47. For disclosures
relating to our use of NOI see page 54. (2) Includes retail
space. 24 Boston Properties,
Inc. Fourth Quarter 2003 Same
Property Occupancy - By Location CBD Suburban Total Location 31-Dec-03 31-Dec-02 31-Dec-03 31-Dec-02 31-Dec-03 31-Dec-02 Greater Boston 93.7 % 92.3 % 84.9 % 91.1 % 89.7 % 91.8 % Greater Washington 99.8 % 99.2 % 92.4 % 95.8 % 94.9 % 96.7 % Midtown Manhattan 99.4 % 98.7 % 99.4 % 98.7 % Baltimore, MD 95.1 % 98.2 % 95.1 % 98.2 % Princeton/East
Brunswick, NJ 93.4 % 93.3 % 93.4 % 93.3 % Richmond, VA 89.2 % 91.8 % 89.2 % 91.8 % Greater San Francisco 91.1 % 93.0 % 47.0 % 64.8 % 82.4 % 87.4 % Bucks County, PA 100.0 % 100.0 % 100.0 % 100.0 % Total Portfolio 95.7 % 95.6 % 86.2 % 91.2 % 92.1 % 93.9 % Same
Property - By Type of Property CBD Suburban Total 31-Dec-03 31-Dec-02 31-Dec-03 31-Dec-02 31-Dec-03 31-Dec-02 Total Office Portfolio 95.7 % 95.6 % 86.5 % 90.7 % 92.6 % 93.9 % Total Office/Technical
Portfolio 100.0 % 100.0 % 92.0 % 92.3 % 92.3 % 92.6 % Total Industrial
Portfolio 56.6 % 100.0 % 56.6 % 100.0 % Total Portfolio 95.7 % 95.6 % 86.2 % 91.2 % 92.1 % 93.9 % 25 Boston Properties,
Inc. Fourth Quarter 2003 Lease
Expirations Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Current Annualized Revenues Under Expiring Leases p.s.f. Annualized Revenues Under Expiring Leases with future step-ups Annualized Revenues Under Expiring Leases with future step-ups - p.s.f. Percentage of Total Square Feet 2004 1,878,321 $ 73,819,030 $ 39.30 $ 73,982,130 $ 39.39 6.66 % 2005 2,390,147 88,789,637 37.15 90,226,617 37.75 8.48 % 2006 2,265,995 100,746,351 44.46 102,736,435 45.34 8.04 % 2007 2,375,611 90,736,557 38.20 93,302,135 39.28 8.43 % 2008 1,513,018 64,154,878 42.40 66,859,630 44.19 5.37 % 2009 2,778,044 106,742,391 38.42 115,941,166 41.73 9.86 % 2010 1,647,595 72,213,711 43.83 79,771,579 48.42 5.85 % 2011 2,710,732 112,039,253 41.33 127,443,674 47.01 9.62 % 2012 2,094,928 97,281,044 46.44 105,180,317 50.21 7.43 % 2013 464,271 16,163,755 34.82 21,076,504 45.40 1.65 % Thereafter 5,962,472 282,562,042 47.39 332,015,736 55.68 21.16 % Occupancy
By Location* CBD Suburban Total Location 31-Dec-03 31-Dec-02 31-Dec-03 31-Dec-02 31-Dec-03 31-Dec-02 Greater Boston 93.7 % 92.2 % 85.4 % 89.3 % 90.1 % 91.0 % Greater Washington 99.8 % 99.2 % 95.6 % 96.9 % 97.1 % 97.8 % Midtown Manhattan 99.4 % 98.4 % 99.4 % 98.4 % Baltimore, MD 95.1 % 97.6 % 95.1 % 97.6 % Princeton/East
Brunswick, NJ 93.4 % 93.3 % 93.4 % 93.3 % Richmond, VA 89.2 % 91.8 % 89.2 % 91.8 % Greater San Francisco 91.1 % 93.0 % 33.0 % 57.7 % 81.6 % 87.3 % Bucks County, PA n/a n/a n/a n/a n/a n/a Total Portfolio 95.7 % 95.7 % 87.4 % 90.7 % 92.7 % 94.1 % *
Includes approximately 1,300,000 square feet of retail space. 26 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE
OFFICE/TECHNICAL PROPERTIES Lease
Expirations Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Current Annualized Revenues Under Expiring Leases p.s.f. Annualized Revenues Under Expiring Leases with future step-ups Annualized Revenues Under Expiring Leases with future step-ups - p.s.f. Percentage of Total Square Feet 2004 84,956 $ 1,508,744 $ 17.76 $ 1,508,744 $ 17.76 5.12 % 2005 156,284 2,250,556 14.40 2,302,378 14.73 9.42 % 2006 298,104 4,332,596 14.53 4,368,689 14.65 17.97 % 2007 332,250 5,853,347 17.62 6,163,573 18.55 20.03 % 2008 42,988 854,173 19.87 896,756 20.86 2.59 % 2009 28,702 721,990 25.15 721,990 25.15 1.73 % 2010 79,971 1,171,896 14.65 1,171,896 14.65 4.82 % 2011 137,321 2,378,491 17.32 2,578,491 18.78 8.28 % 2012 72,362 1,635,627 22.60 1,817,191 25.11 4.36 % 2013 Thereafter 241,704 4,299,567 17.79 5,089,213 21.06 14.57 % Occupancy
By Location CBD Suburban Total Location 31-Dec-03 31-Dec-02 31-Dec-03 31-Dec-02 31-Dec-03 31-Dec-02 Greater Boston 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Greater Washington 81.9 % 84.3 % 81.9 % 84.3 % Midtown Manhattan n/a n/a n/a n/a n/a n/a Baltimore, MD n/a n/a n/a n/a n/a n/a Princeton/East
Brunswick, NJ n/a n/a n/a n/a n/a n/a Richmond, VA n/a n/a n/a n/a n/a n/a Greater San Francisco 100.0 % 87.5 % 100.0 % 87.5 % Bucks County, PA n/a n/a n/a n/a n/a n/a Total Portfolio 100.0 % 100.0 % 89.0 % 89.3 % 89.4 % 89.7 % 27 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE
INDUSTRIAL PROPERTIES Lease
Expirations Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Current Annualized Revenues Under Expiring Leases p.s.f. Annualized Revenues Under Expiring Leases with future step-ups Annualized Revenues Under Expiring Leases with future step-ups - p.s.f. Percentage of Total Square Feet 2004 201,000 $ 1,208,858 $ 6.01 $ 1,208,858 $ 6.01 51.50 % 2005 2006 2007 20,000 241,890 12.09 260,859 13.04 5.12 % 2008 2009 2010 2011 2012 2013 Thereafter Occupancy
By Location CBD Suburban Total Location 31-Dec-03 31-Dec-02 31-Dec-03 31-Dec-02 31-Dec-03 31-Dec-02 Greater Boston 100.0 % 100.0 % Greater Washington n/a n/a n/a n/a n/a n/a Midtown Manhattan n/a n/a n/a n/a n/a n/a Baltimore, MD n/a n/a n/a n/a n/a n/a Princeton/East
Brunswick, NJ n/a n/a n/a n/a n/a n/a Richmond, VA n/a n/a n/a n/a n/a n/a Greater San Francisco 100.0 % 100.0 % 100.0 % 100.0 % Bucks County, PA 100.0 % 100.0 % 100.0 % 100.0 % Total Portfolio 56.6 % 100.0 % 56.6 % 100.0 % 28 Boston Properties,
Inc. Fourth Quarter 2003 Lease Expirations Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Current Annualized Revenues Under Expiring Leases p.s.f. Annualized Revenues Under Expiring Leases with future step-ups Annualized Revenues Under Expiring Leases with future step-ups - p.s.f. Percentage of Total Square Feet 2004 85,965 $ 7,065,713 $ 82.19 $ 6,562,553 $ 76.34 6.59 % 2005 58,234 3,870,640 66.47 3,877,919 66.59 4.46 % 2006 58,997 3,157,314 53.52 3,168,567 53.71 4.52 % 2007 47,232 2,189,364 46.35 2,296,229 48.62 3.62 % 2008 70,404 3,468,507 49.27 3,622,200 51.45 5.39 % 2009 55,154 2,243,023 40.67 2,395,438 43.43 4.23 % 2010 130,897 4,555,896 34.81 5,021,021 38.36 10.03 % 2011 41,289 2,578,881 62.46 2,986,266 72.33 3.16 % 2012 103,652 4,887,512 47.15 5,487,334 52.94 7.94 % 2013 61,172 5,030,939 82.24 5,560,897 90.91 4.69 % Thereafter 592,424 29,086,529 49.10 36,575,477 61.74 45.38 % 29 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE PROPERTIES Lease Expiration Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Current Annualized Revenues Under Expiring Leases p.s.f. Annualized Revenues Under Expiring Leases with future step-ups Annualized Revenues Under Expiring Leases with future step-ups - p.s.f. Percentage of Total Square Feet 2004 2,250,242 $ 83,602,346 $ 37.15 $ 83,262,285 $ 37.00 7.1 % 2005 2,604,665 94,910,834 36.44 96,406,914 37.01 8.3 % 2006 2,623,096 108,236,261 41.26 110,273,691 42.04 8.3 % 2007 2,775,093 99,021,159 35.68 102,022,795 36.76 8.8 % 2008 1,626,410 68,477,559 42.10 71,378,586 43.89 5.2 % 2009 2,861,900 109,707,404 38.33 119,058,594 41.60 9.1 % 2010 1,858,463 77,941,503 41.94 85,964,496 46.26 5.9 % 2011 2,889,342 116,996,625 40.49 133,008,431 46.03 9.2 % 2012 2,270,942 103,804,182 45.71 112,484,842 49.53 7.2 % 2013 525,443 21,194,695 40.34 26,637,400 50.70 1.7 % Thereafter 6,796,600 315,948,138 46.49 373,680,426 54.98 21.6 % Occupancy
By Location CBD Suburban Total Location 31-Dec-03 31-Dec-02 31-Dec-03 31-Dec-02 31-Dec-03 31-Dec-02 Greater Boston 93.8 % 92.3 % 83.5 % 91.1 % 88.9 % 91.8 % Greater Washington 99.8 % 99.2 % 93.0 % 94.3 % 95.1 % 95.9 % Midtown Manhattan 99.4 % 98.4 % 99.4 % 98.4 % Baltimore, MD 95.1 % 97.6 % 95.1 % 97.6 % Princeton/East
Brunswick, NJ 93.4 % 93.3 % 93.4 % 93.3 % Richmond, VA 89.2 % 91.8 % 89.2 % 91.8 % Greater San Francisco 91.1 % 93.0 % 47.0 % 64.8 % 82.4 % 87.4 % Bucks County, PA 100.0 % 100.0 % 100.0 % 100.0 % Total Portfolio 95.8 % 95.7 % 86.7 % 90.8 % 92.1 % 93.9 % 30 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE GREATER BOSTON
PROPERTIES Lease Expirations - Greater Boston OFFICE OFFICE/TECHNICAL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 318,673 $ 10,793,103 $ 33.87 $ 10,875,978 $ 34.13 $ $ $ $ 2005 816,380 31,864,113 39.03 32,192,999 39.43 2006 533,974 18,681,096 34.99 18,828,580 35.26 253,704 3,631,745 14.31 3,631,745 14.31 2007 472,711 18,957,804 39.60 19,352,691 40.94 144,140 1,972,649 13.69 2,233,859 15.50 2008 490,135 15,639,688 31.91 16,162,335 32.98 2009 1,055,650 38,243,977 36.23 41,331,508 39.15 2010 208,685 7,194,730 34.48 8,000,576 38.34 2011 788,262 29,170,845 37.01 34,249,680 43.45 80,000 1,582,874 19.79 1,782,874 22.29 2012 608,127 22,215,124 36.53 24,567,759 40.40 72,362 1,635,627 22.60 1,817,191 25.11 2013 222,975 8,564,904 38.41 12,049,074 54.04 Thereafter 737,324 30,719,770 41.66 33,608,654 45.58 INDUSTRIAL RETAIL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 $ $ $ $ 41,197 $ 4,893,022 $ 118.77 $ 4,389,862 $ 106.56 2005 19,853 1,834,687 92.41 1,795,687 90.45 2006 15,124 1,127,309 74.54 1,128,473 74.61 2007 2,307 182,788 79.23 188,964 81.91 2008 5,598 485,022 86.64 473,022 84.50 2009 6,250 450,545 72.09 455,545 72.89 2010 77,838 2,354,570 30.25 2,428,790 31.20 2011 11,599 583,799 50.33 632,299 54.51 2012 52,949 1,818,077 34.34 1,884,951 35.60 2013 17,768 2,200,226 123.83 2,318,741 130.50 Thereafter 420,195 15,848,598 37.72 19,016,257 45.26 31 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE GREATER BOSTON
PROPERTIES Quarterly Lease Expirations - Greater
Boston OFFICE OFFICE/TECHNICAL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Q1 2004 6,883 $ 252,834 $ 36.73 $ 335,046 $ 48.68 $ $ $ $ Q2
2004 56,496 1,895,848 33.56 1,895,848 33.56 Q3
2004 141,259 4,776,660 33.81 4,777,323 33.82 Q4
2004 114,035 3,867,761 33.92 3,867,761 33.92 Total
2004 318,673 $ 10,793,103 $ 33.87 10,875,978 $ 34.13 $ $ Q1 2005 92,669 $ 3,792,417 $ 40.92 $ 3,797,346 $ 40.98 $ $ $ $ Q2
2005 238,753 7,366,372 30.85 7,508,175 31.45 Q3
2005 171,432 9,164,124 53.46 9,301,528 54.26 Q4
2005 313,526 11,541,200 36.81 11,585,950 36.95 Total
2005 816,380 $ 31,864,113 $ 39.03 $ 32,192,999 $ 39.43 $ $ INDUSTRIAL RETAIL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Q1 2004 $ $ $ $ 15,924 $ 1,844,211 $ 115.81 $ 1,657,359 $ 104.08 Q2
2004 10,034 1,472,064 146.71 1,215,264 121.11 Q3
2004 3,347 562,920 168.19 502,920 150.26 Q4
2004 11,892 1,013,827 85.25 1,014,319 85.29 Total
2004 $ $ $ 41,197 $ 4,893,022 $ 118.77 $ 4,389,862 $ 106.56 Q1 2005 $ $ $ 8,258 $ 786,544 $ 95.25 $ 744,544 $ 90.16 Q2
2005 803 228,633 284.72 231,633 288.46 Q3
2005 2,145 279,764 130.43 279,764 130.43 Q4
2005 8,647 539,746 62.42 539,746 62.42 Total
2005 $ $ $ $ 19,853 $ 1,834,687 $ 92.41 $ 1,795,687 $ 90.45 32 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE
GREATER WASHINGTON PROPERTIES Lease Expirations - Greater Washington OFFICE OFFICE/TECHNICAL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 201,586 $ 8,006,135 $ 39.72 $ 8,018,117 $ 39.78 63,509 $ 1,155,020 $ 18.19 $ 1,155,020 $ 18.19 2005 456,819 16,743,496 36.65 17,456,740 38.21 101,345 1,482,016 14.62 1,518,693 14.99 2006 358,233 10,154,936 28.35 10,750,269 30.01 33,400 541,107 16.20 569,160 17.04 2007 373,096 12,759,266 34.20 13,176,139 35.32 177,760 3,744,438 21.06 3,771,314 21.22 2008 213,594 6,763,802 31.67 7,450,415 34.88 39,380 808,170 20.52 846,413 21.49 2009 1,036,160 35,631,781 34.39 38,739,233 37.39 28,702 721,990 25.15 721,990 25.15 2010 761,566 27,736,634 36.42 30,965,133 40.66 79,971 1,171,896 14.65 1,171,896 14.65 2011 1,065,677 33,564,977 31.50 39,155,901 36.74 57,321 795,617 13.88 795,617 13.88 2012 437,389 15,867,850 36.28 19,646,823 44.92 2013 57,015 1,465,971 25.71 1,830,797 32.11 Thereafter 1,288,369 40,308,547 31.29 46,719,874 36.26 241,704 4,299,567 17.79 5,089,213 21.06 INDUSTRIAL RETAIL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 $ $ $ $ $ $ $ $ 2005 4,274 142,410 33.32 143,882 33.66 2006 3,309 114,696 34.66 114,942 34.74 2007 16,548 433,086 26.17 448,025 27.07 2008 18,489 745,966 40.35 788,309 42.64 2009 18,509 471,232 25.46 558,933 30.20 2010 17,280 556,665 32.21 658,059 38.08 2011 11,221 477,554 42.56 535,392 47.71 2012 10,046 265,496 26.43 324,961 32.35 2013 11,675 453,163 38.81 596,208 51.07 Thereafter 24,214 1,022,000 42.21 1,314,644 54.29 33 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE GREATER WASHINGTON
PROPERTIES Quarterly Lease Expirations - Greater
Washington OFFICE OFFICE/TECHNICAL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Q1 2004 38,988 $ 1,363,055 $ 34.96 $ 1,363,055 $ 34.96 $ $ $ $ Q2
2004 25,880 1,002,788 38.75 1,002,788 38.75 43,101 811,781 18.83 811,781 18.83 Q3
2004 101,853 4,254,852 41.77 4,258,196 41.81 13,408 223,687 16.68 223,687 16.68 Q4
2004 34,865 1,385,440 39.74 1,394,078 39.99 7,000 119,552 17.08 119,552 17.08 Total
2004 201,586 $ 8,006,135 $ 39.72 8,018,117 $ 39.78 63,509 1,155,020 $ 18.19 1,155,020 $ 18.19 Q1 2005 104,151 $ 4,105,036 $ 39.41 $ 4,205,293 $ 40.38 $ $ $ $ Q2
2005 69,489 2,164,988 31.16 2,222,778 31.99 67,928 884,969 13.03 906,450 13.34 Q3
2005 84,650 2,812,815 33.23 2,912,046 34.40 33,417 597,047 17.87 612,243 18.32 Q4
2005 198,529 7,660,657 38.59 8,116,623 40.88 Total
2005 456,819 $ 16,743,496 $ 36.65 $ 17,456,740 $ 38.21 101,345 1,482,016 $ 14.62 1,518,693 $ 14.99 INDUSTRIAL RETAIL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Q1 2004 $ $ $ $ $ $ $ $ Q2
2004 Q3
2004 Q4
2004 Total
2004 $ $ $ $ $ Q1 2005 $ $ $ $ 2,290 $ 69,798 $ 30.48 $ 70,815 $ 30.92 Q2
2005 Q3
2005 Q4
2005 1,984 72,612 36.60 73,067 36.83 Total
2005 $ $ $ $ 4,274 142,410 $ 33.32 143,882 $ 33.66 34 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE
GREATER SAN FRANCISCO PROPERTIES Lease Expirations - Greater San Francisco OFFICE OFFICE/TECHNICAL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 684,520 $ 28,450,816 $ 41.56 $ 28,505,072 $ 41.64 21,447 $ 353,724 $ 16.49 $ 353,724 $ 16.49 2005 343,201 14,323,732 41.74 14,371,549 41.88 54,939 768,540 13.99 783,685 14.26 2006 896,123 43,947,467 49.04 45,074,336 50.30 11,000 159,744 14.52 167,784 15.25 2007 432,575 20,839,310 48.18 21,334,836 49.32 10,350 136,260 13.17 158,400 15.30 2008 297,496 10,868,258 36.53 11,503,528 38.67 3,608 46,003 12.75 50,342 13.95 2009 158,237 7,686,622 48.58 8,141,557 51.45 2010 189,499 11,293,163 59.59 12,997,658 68.59 2011 192,689 17,992,769 93.38 18,485,363 95.93 2012 127,771 5,504,145 43.08 5,978,786 46.79 2013 92,448 3,331,950 36.04 4,010,350 43.38 Thereafter 319,488 11,336,833 35.48 12,370,473 38.72 INDUSTRIAL RETAIL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 40,000 $ 434,436 $ 10.86 $ 434,436 $ 10.86 36,405 $ 1,595,155 $ 43.82 $ 1,595,155 $ 43.82 2005 27,297 1,346,649 49.33 1,373,122 50.30 2006 25,339 1,230,166 48.55 1,234,353 48.71 2007 20,000 241,890 12.09 260,859 13.04 18,341 1,148,253 62.61 1,234,003 67.28 2008 39,524 1,997,226 50.53 2,101,038 53.16 2009 30,395 1,321,247 43.47 1,380,961 45.43 2010 30,749 1,308,165 42.54 1,520,176 49.44 2011 3,474 193,356 55.66 234,550 67.52 2012 35,018 2,176,227 62.15 2,458,611 70.21 2013 9,301 677,224 72.81 748,035 80.43 Thereafter 3,809 304,339 79.90 341,280 89.60 35 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE GREATER SAN
FRANCISCO PROPERTIES Quarterly Lease Expirations - Greater San
Francisco OFFICE OFFICE/TECHNICAL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Q1 2004 18,575 $ 1,055,259 $ 56.81 $ 1,055,259 $ 56.81 2,000 $ 25,920 $ 12.96 $ 25,920 $ 12.96 Q2
2004 152,433 5,293,029 34.72 5,293,029 34.72 6,800 94,440 13.89 94,440 13.89 Q3
2004 225,258 10,553,868 46.85 10,554,999 46.86 6,547 135,576 20.71 135,576 20.71 Q4
2004 288,254 11,548,660 40.06 11,601,785 40.25 6,100 97,788 16.03 97,788 16.03 Total
2004 684,520 $ 28,450,816 $ 41.56 $ 28,505,072 $ 41.64 21,447 $ 353,724 $ 16.49 $ 353,724 $ 16.49 Q1 2005 123,672 $ 4,934,483 $ 39.90 $ 4,960,042 $ 40.11 5,000 $ 68,256 $ 13.65 $ 69,816 $ 13.96 Q2
2005 83,699 3,320,552 39.67 3,320,552 39.67 7,150 112,278 15.70 115,848 16.20 Q3
2005 94,240 4,424,017 46.94 4,435,274 47.06 27,470 353,744 12.88 357,884 13.03 Q4
2005 41,590 1,644,680 39.55 1,655,681 39.81 15,319 234,262 15.29 240,137 15.68 Total
2005 343,201 $ 14,323,732 $ 41.74 $ 14,371,549 $ 41.88 54,939 $ 768,540 $ 13.99 $ 783,685 $ 14.26 INDUSTRIAL RETAIL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Q1 2004 $ $ $ $ 14,760 $ 701,169 $ 47.50 $ 701,169 $ 47.50 Q2
2004 3,853 198,294 51.46 198,294 51.46 Q3
2004 1,318 87,770 66.59 87,770 66.59 Q4
2004 40,000 434,436 10.86 434,436 10.86 16,474 607,922 36.90 607,922 36.90 Total
2004 40,000 $ 434,436 $ 10.86 $ 434,436 $ 10.86 36,405 $ 1,595,155 $ 43.82 $ 1,595,155 $ 43.82 Q1 2005 $ $ 11,143 $ 486,770 $ 43.68 $ 486,770 $ 43.68 Q2
2005 3,215 198,923 61.87 198,923 61.87 Q3
2005 11,794 563,563 47.78 581,563 49.31 Q4
2005 1,145 97,393 85.06 105,866 92.46 Total
2005 $ $ $ $ 27,297 $ 1,346,649 $ 49.33 $ 1,373,122 $ 50.30 36 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE MIDTOWN MANHATTAN
PROPERTIES Lease Expirations - Midtown Manhattan OFFICE OFFICE/TECHNICAL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 195,044 $ 12,484,355 $ 64.01 $ 12,499,379 $ 64.08 $ $ $ $ 2005 107,182 7,356,448 68.64 7,395,372 69.00 2006 346,611 23,755,817 68.54 23,753,337 68.53 2007 170,306 10,435,631 61.28 10,542,498 61.90 2008 503,146 30,660,436 60.94 31,495,746 62.60 2009 293,146 17,755,931 60.57 19,556,048 66.71 2010 304,088 20,217,496 66.49 21,490,141 70.67 2011 389,160 22,956,031 58.99 26,343,579 67.69 2012 891,075 52,712,451 59.16 53,767,672 60.34 2013 Thereafter 3,114,394 185,918,484 59.70 224,291,331 72.02 INDUSTRIAL RETAIL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 $ $ $ $ 3,276 $ 448,192 $ 136.81 $ 448,192 $ 136.81 2005 1,514 285,156 188.35 296,463 195.81 2006 15,225 685,143 45.00 690,799 45.37 2007 2008 3,232 161,884 50.09 169,126 52.33 2009 2010 5,030 336,496 66.90 413,996 82.31 2011 14,995 1,324,173 88.31 1,584,025 105.64 2012 5,639 627,712 111.32 818,811 145.20 2013 15,896 1,461,548 91.94 1,643,981 103.42 Thereafter 136,160 11,863,316 87.13 15,765,807 115.79 37 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE MIDTOWN MANHATTAN
PROPERTIES Quarterly Lease Expirations - Midtown
Manhattan OFFICE OFFICE/TECHNICAL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Q1 2004 103,651 $ 6,477,213 $ 62.49 $ 6,477,213 $ 62.49 $ $ $ $ Q2
2004 38,439 3,235,516 84.17 3,235,516 84.17 Q3
2004 Q4
2004 52,954 2,771,626 52.34 2,786,650 52.62 Total
2004 195,044 $ 12,484,355 $ 64.01 $ 12,499,379 $ 64.08 $ $ $ $ Q1 2005 5,919 $ 389,288 $ 65.77 $ 389,288 $ 65.77 $ $ $ $ Q2
2005 46,309 3,045,563 65.77 3,045,563 65.77 Q3
2005 Q4
2005 54,954 3,921,597 71.36 3,960,521 72.07 Total
2005 107,182 $ 7,356,448 $ 68.64 $ 7,395,372 $ 69.00 $ $ $ $ INDUSTRIAL RETAIL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Q1 2004 $ $ $ $ 1,626 $ 243,868 $ 149.98 $ 243,868 $ 149.98 Q2
2004 350 50,655 144.73 50,655 144.73 Q3
2004 Q4
2004 1,300 153,669 118.21 153,669 118.21 Total
2004 $ $ $ $ 3,276 $ 448,192 $ 136.81 $ 448,192 $ 136.81 Q1
2005 $ $ $ $ $ $ Q2
2005 1,103 248,439 225.24 257,573 233.52 Q3
2005 Q4
2005 411 36,717 89.34 38,890 94.62 Total
2005 $ $ $ $ 1,514 $ 285,156 $ 188.35 $ 296,463 $ 195.81 38 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE
PRINCETON/EAST BRUNSWICK PROPERTIES Lease Expirations - Princeton/East
Brunswick OFFICE OFFICE/TECHNICAL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 389,124 $ 11,839,529 $ 30.43 $ 11,839,529 $ 30.43 $ $ $ $ 2005 228,388 7,233,958 31.67 7,245,104 31.72 2006 92,016 3,171,557 34.47 3,233,362 35.14 2007 513,240 14,901,054 29.03 15,923,600 31.03 2008 2009 180,384 5,947,460 32.97 6,621,151 36.71 2010 154,917 5,137,140 33.16 5,603,900 36.17 2011 270,326 8,230,533 30.45 9,069,538 33.55 2012 2013 91,833 2,800,930 30.50 3,186,283 34.70 Thereafter 227,835 6,647,263 29.18 7,394,259 32.45 INDUSTRIAL RETAIL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 $ $ $ $ 2,904 $ 48,000 $ 16.53 $ 48,000 $ 16.53 2005 2006 2007 2008 2009 2010 2011 2012 2013 Thereafter 39 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE PRINCETON/EAST
BRUNSWICK PROPERTIES Quarterly Lease Expirations -
Princeton/East Brunswick OFFICE OFFICE/TECHNICAL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Q1 2004 3,022 $ 110,910 $ 36.70 $ 110,910 $ 36.70 $ $ $ $ Q2
2004 54,636 1,536,832 28.13 1,536,832 28.13 Q3
2004 132,356 4,065,028 30.71 4,065,028 30.71 Q4
2004 199,110 6,126,759 30.77 6,126,759 30.77 Total
2004 389,124 $ 11,839,529 $ 30.43 $ 11,839,529 $ 30.43 $ $ $ $ Q1 2005 3,533 $ 114,730 $ 32.47 $ 114,730 $ 32.47 $ $ $ $ Q2
2005 8,977 280,157 31.21 280,157 31.21 Q3
2005 135,202 4,061,787 30.04 4,072,933 30.12 Q4
2005 80,676 2,777,284 34.43 2,777,284 34.43 Total
2005 228,388 $ 7,233,958 $ 31.67 $ 7,245,104 $ 31.72 $ $ $ $ INDUSTRIAL RETAIL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Q1 2004 $ $ $ $ $ $ $ $ Q2
2004 Q3
2004 Q4
2004 2,904 48,000 16.53 48,000 16.53 Total
2004 $ $ $ $ 2,904 $ 48,000 $ 16.53 $ 48,000 $ 16.53 Q1
2005 $ $ $ $ $ $ $ $ Q2
2005 Q3
2005 Q4
2005 Total
2005 $ $ $ $ $ $ $ $ 40 Boston Properties,
Inc. Fourth Quarter 2003 Lease Expirations Other Properties (Richmond, VA; Baltimore,
MD; Bucks County, PA) OFFICE OFFICE/TECHNICAL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 89,374 $ 2,245,092 $ 25.12 $ 2,244,055 $ 25.11 $ $ $ $ 2005 438,177 11,267,890 25.72 11,564,854 26.39 2006 39,038 1,035,478 26.52 1,096,550 28.09 2007 413,683 12,843,491 31.05 12,972,371 31.36 2008 8,647 222,693 25.75 247,607 28.64 2009 54,467 1,476,620 27.11 1,551,668 28.49 2010 28,840 634,548 22.00 714,172 24.76 2011 4,618 124,098 26.87 139,614 30.23 2012 30,566 981,474 32.11 1,219,278 39.89 2013 Thereafter 275,062 7,631,146 27.74 7,631,146 27.74 INDUSTRIAL RETAIL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 161,000 $ 774,422 $ 4.81 $ 774,422 $ 4.81 2,183 $ 81,344 $ 37.26 $ 81,344 $ 37.26 2005 5,296 261,738 49.42 268,765 50.75 2006 2007 10,036 425,236 42.37 425,236 42.37 2008 3,561 78,410 22.02 90,705 25.47 2009 2010 2011 2012 2013 6,532 238,778 36.56 253,932 38.88 Thereafter 8,046 48,276 6.00 137,490 17.09 41 Boston Properties,
Inc. Fourth Quarter 2003 IN-SERVICE OTHER PROPERTIES Quarterly Lease
Expirations Other Properties (Richmond, VA; Baltimore,
MD; Bucks County, PA) OFFICE OFFICE/TECHNICAL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Q1 2004 15,894 $ 569,140 $ 35.81 $ 569,140 $ 35.81 $ $ $ $ Q2
2004 2,093 72,418 34.60 72,418 34.60 Q3
2004 66,935 1,480,564 22.12 1,479,528 22.10 Q4
2004 4,452 122,970 27.62 122,969 27.62 Total
2004 89,374 $ 2,245,092 $ 25.12 $ 2,244,055 $ 25.11 $ $ $ $ Q1 2005 1,731 $ 36,915 $ 21.33 $ 37,919 $ 21.91 $ $ $ $ Q2
2005 42,149 1,202,587 28.53 1,234,661 29.29 Q3
2005 53,177 1,683,427 31.66 1,701,862 32.00 Q4
2005 341,120 8,344,961 24.46 8,590,412 25.18 Total
2005 438,177 $ 11,267,890 $ 25.72 $ 11,564,854 $ 26.39 $ $ $ $ INDUSTRIAL RETAIL Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot Q1 2004 $ $ $ $ 2,183 $ 72,623 $ 33.27 $ 72,623 $ 33.27 Q2
2004 161,000 774,422 4.81 774,422 4.81 Q3
2004 Q4
2004 8,721 8,721 Total
2004 161,000 $ 774,422 $ 4.81 $ 774,422 $ 4.81 2,183 $ 81,344 $ 37.26 $ 81,344 $ 37.26 Q1 2005 $ $ $ $ $ $ $ $ Q2
2005 Q3
2005 5,296 261,738 49.42 268,765 50.75 Q4
2005 Total
2005 $ $ $ $ 5,296 $ 261,738 $ 49.42 $ 268,765 $ 50.75 42 Boston Properties,
Inc. Fourth Quarter 2003 Lease
Expirations Greater Boston Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 109,897 (1) $ 7,870,835 $ 43.61 (1) $ 7,449,887 $ 44.80 (1) 2005 468,628 22,675,155 48.39 22,910,181 48.89 2006 147,094 7,142,993 48.56 7,221,270 49.09 2007 159,639 8,547,015 53.54 8,724,448 54.65 2008 170,763 6,392,704 37.44 6,475,909 37.92 2009 740,731 27,283,600 36.83 29,781,027 40.20 2010 191,283 7,245,458 37.88 7,991,443 41.78 2011 434,991 22,075,780 50.75 26,041,805 59.87 2012 309,025 13,907,451 45.00 14,816,844 47.95 2013 240,743 10,765,130 44.72 14,367,815 59.68 Thereafter 945,517 38,871,973 41.11 43,459,100 45.96 Greater Washington Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 164,319 $ 6,859,859 $ 41.75 $ 6,868,497 $ 41.80 2005 239,124 9,785,737 40.92 10,235,875 42.81 2006 29,169 1,111,249 38.10 1,162,163 39.84 2007 290,829 10,094,083 34.71 10,268,494 35.31 2008 41,310 1,634,179 39.56 1,736,746 42.04 2009 749,346 27,000,861 36.03 29,985,106 40.02 2010 397,994 15,753,838 39.58 18,172,222 45.66 2011 194,123 7,695,987 39.64 9,006,916 46.40 2012 80,203 3,049,436 38.02 3,066,943 38.24 2013 Thereafter 140,813 6,384,507 45.34 8,414,534 59.76 New York Year of Lease Expiration Rentable
Square Footage Subject to Expiring Leases Current
Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues
Under Expiring Leases with future step-ups Per Square Foot 2004 198,320 $ 12,932,547 $ 65.21 $ 12,947,571 $ 65.29 2005 108,696 7,641,604 70.30 7,691,836 70.76 2006 361,836 24,440,961 67.55 24,444,137 67.56 2007 170,306 10,435,631 61.28 10,542,498 61.90 2008 506,378 30,822,320 60.87 31,664,872 62.53 2009 293,146 17,755,931 60.57 19,556,048 66.71 2010 309,118 20,553,992 66.49 21,904,137 70.86 2011 404,155 24,280,204 60.08 27,927,604 69.10 2012 896,714 53,340,163 59.48 54,586,483 60.87 2013 15,896 1,461,548 91.94 1,643,981 103.42 Thereafter 3,250,554 197,781,800 60.85 240,057,138 73.85 San Francisco Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 664,761 $ 28,036,373 $ 42.18 $ 28,090,009 $ 42.26 2005 319,919 14,038,051 43.88 14,081,002 44.01 2006 879,469 43,029,229 48.93 43,941,381 49.96 2007 437,641 21,478,462 49.08 22,045,771 50.37 2008 264,809 11,162,936 42.15 11,817,953 44.63 2009 179,996 8,770,875 48.73 9,250,438 51.39 2010 212,524 12,433,328 58.50 14,286,113 67.22 2011 196,163 18,186,125 92.71 18,719,913 95.43 2012 162,789 7,680,371 47.18 8,437,397 51.83 2013 101,749 4,009,175 39.40 4,758,384 46.77 Thereafter 181,949 7,188,710 39.51 7,563,859 41.57 Princeton/East Brunswick Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 $ $ $ $ 2005 2006 2007 2008 2009 2010 2011 2012 2013 Thereafter Other Year of Lease Expiration Rentable Square Footage Subject to Expiring
Leases Current Annualized Revenues Under Expiring
Leases Per Square Foot Annualized Revenues Under Expiring Leases with
future step-ups Per Square Foot 2004 91,557 $ 2,326,436 $ 25.41 $ 2,325,399 $ 25.40 2005 443,473 11,529,628 26.00 11,833,619 26.68 2006 39,038 1,035,478 26.52 1,096,550 28.09 2007 423,719 13,268,727 31.31 13,397,607 31.62 2008 12,208 301,103 24.66 338,312 27.71 2009 54,467 1,476,620 27.11 1,551,668 28.49 2010 28,840 634,548 22.00 714,172 24.76 2011 4,618 124,098 26.87 139,614 30.23 2012 30,566 981,474 32.11 1,219,278 39.89 2013 6,532 238,778 36.56 253,932 38.88 Thereafter 283,108 7,679,422 27.13 7,768,636 27.44 (1)
Includes 41,197 square feet of retail space and kiosks. Excluding this space, current rent on
expiring leases with retail is $71.62 and rent on expiring leases with future
step-up including retail is $67.79 per square foot. 43 Boston Properties,
Inc. Fourth Quarter 2003 SUBURBAN
PROPERTIES Lease
Expirations Greater Boston Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 249,973 $ 7,815,289 $ 31.26 $ 7,815,952 $ 31.27 2005 367,605 11,023,645 29.99 11,078,506 30.14 2006 655,708 16,297,157 24.85 16,367,528 24.96 2007 459,519 12,566,226 26.99 13,051,065 28.04 2008 324,970 9,732,006 29.95 10,159,448 31.26 2009 321,169 11,410,922 35.53 12,006,026 37.38 2010 95,240 2,303,842 24.19 2,437,923 25.60 2011 444,870 9,261,738 20.82 10,623,047 23.88 2012 424,413 11,761,378 27.71 13,453,057 31.70 2013 Thereafter 212,002 7,696,395 36.30 9,165,811 43.23 Greater Washington Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 100,776 $ 2,301,296 $ 22.84 $ 2,304,640 $ 22.87 2005 323,314 8,582,185 26.54 8,883,440 27.48 2006 365,773 9,699,489 26.52 10,272,208 28.08 2007 276,575 6,842,708 24.74 7,126,985 25.77 2008 230,153 6,683,760 29.04 7,348,391 31.93 2009 334,025 9,824,141 29.41 10,035,050 30.04 2010 460,823 13,711,357 29.75 14,622,865 31.73 2011 940,096 27,142,161 28.87 31,479,993 33.49 2012 367,232 13,083,910 35.63 16,904,841 46.03 2013 68,690 1,919,134 27.94 2,427,006 35.33 Thereafter 1,413,474 39,245,607 27.77 44,709,197 31.63 New York Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 $ $ $ $ 2005 2006 2007 2008 2009 2010 2011 2012 2013 Thereafter San Francisco Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 117,611 $ 2,797,759 $ 23.79 $ 2,798,378 $ 23.79 2005 105,518 2,400,871 22.75 2,447,354 23.19 2006 52,993 2,308,148 43.56 2,535,091 47.84 2007 43,625 887,252 20.34 942,326 21.60 2008 75,819 1,748,551 23.06 1,836,956 24.23 2009 8,636 236,993 27.44 272,079 31.51 2010 7,724 168,000 21.75 231,720 30.00 2011 2012 2013 Thereafter 141,348 4,452,462 31.50 5,147,894 36.42 Princeton/East Brunswick Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 392,028 $ 11,887,529 $ 30.32 $ 11,887,529 $ 30.32 2005 228,388 7,233,958 31.67 7,245,104 31.72 2006 92,016 3,171,557 34.47 3,233,362 35.14 2007 513,240 14,901,054 29.03 15,923,600 31.03 2008 2009 180,384 5,947,460 32.97 6,621,151 36.71 2010 154,917 5,137,140 33.16 5,603,900 36.17 2011 270,326 8,230,533 30.45 9,069,538 33.55 2012 2013 91,833 2,800,930 30.50 3,186,283 34.70 Thereafter 227,835 6,647,263 29.18 7,394,259 32.45 Other Year of Lease Expiration Rentable Square Footage Subject to Expiring Leases Current Annualized Revenues Under Expiring Leases Per Square Foot Annualized Revenues Under Expiring Leases with future step-ups Per Square Foot 2004 161,000 $ 774,422 $ 4.81 $ 774,422 $ 4.81 2005 2006 2007 2008 2009 2010 2011 2012 2013 Thereafter 44 Boston Properties,
Inc. Fourth Quarter 2003 Long Wharf Marriott -
Boston Fourth Quarter 2003 Fourth Quarter 2002 Percent Change YTD 2003 YTD 2002 Percent Change Occupancy 77.0 % 78.2 % -1.5 % 80.1 % 82.9 % -3.4 % Average Daily Rate $ 208.94 $ 217.19 -3.8 % $ 199.32 $ 212.57 -6.2 % Revenue per available
room $ 160.88 $ 169.84 -5.3 % $ 159.60 $ 176.13 -9.4 % Hotel Revenues Less
Hotel Operating Expenses (in thousands) $ 3,093 $ 3,512 -11.9 % $ 9,098 $ 11,283 -19.4 % Cambridge Center Marriott Fourth Quarter 2003 Fourth Quarter 2002 Percent Change YTD 2003 YTD 2002 Percent Change Occupancy 69.7 % 73.8 % -5.6 % 72.9 % 76.6 % -4.8 % Average Daily Rate $ 170.87 $ 182.04 -6.1 % $ 157.55 $ 173.52 -9.2 % Revenue per available
room $ 119.01 $ 134.34 -11.4 % $ 114.79 $ 132.94 -13.7 % Hotel Revenues Less
Hotel Operating Expenses (in thousands) $ 2,076 $ 2,441 -15.0 % $ 5,689 $ 7,863 -27.6 % Residence Inn by Marriott Fourth
Quarter 2003 Fourth
Quarter 2002 Percent Change YTD 2003 YTD 2002 Percent Change Occupancy 81.8 % 81.1 % 0.9 % 80.8 % 84.9 % -4.8 % Average Daily Rate $ 120.51 $ 140.57 -14.3 % $ 123.76 $ 138.77 -10.8 % Revenue per available
room $ 98.61 $ 114.00 -13.5 % $ 100.00 $ 117.87 -15.2 % Hotel Revenues Less
Hotel Operating Expenses (in thousands) $ 921 $ 1,374 -33.0 % $ 3,046 $ 4,238 -28.1 % Total Hotel Performance Fourth
Quarter 2003 Fourth
Quarter 2002 Percent Change YTD 2003 YTD 2002 Percent Change Occupancy 75.0 % 77.0 % -2.6 % 77.3 % 80.7 % -4.2 % Average Daily Rate $ 174.83 $ 186.75 -6.4 % $ 166.40 $ 181.13 -8.1 % Revenue per available
room $ 130.70 $ 143.62 -9.0 % $ 128.78 $ 146.25 -11.9 % Hotel Revenues Less
Hotel Operating Expenses (in thousands) $ 6,090 $ 7,327 -16.9 % $ 17,833 $ 23,384 -23.7 % 45 Boston Properties,
Inc. Fourth Quarter 2003 Office,
Office/Technical, Industrial and Hotel Properties Office Office/Technical Industrial Hotel (1) Total Number of Properties 95 27 4 3 129 Square feet 27,610,640 1,531,227 390,273 937,874 30,470,014 Percent of in-service
properties 93.6 % 92.3 % 100.0 % 100.0 % 93.8 % Occupancy @ 12/31/02 93.9 % 92.6 % 100.0 % 93.9 % Occupancy @ 12/31/03 92.6 % 92.3 % 56.6 % 92.1 % Percent change from 4th
quarter 2003 over 4th quarter 2002 (2): Rental revenue -0.3 % -6.2 % -40.7 % -9.5 % -1.2 % Operating expenses and real estate taxes -1.9 % 8.4 % -8.0 % -8.9 % -2.9 % Net Operating Income (3) 0.5 % -9.9 % -52.7 % -11.0 % -0.2 % Net Operating Income (3) - without hotels 0.2 % Rental revenue - cash basis -1.5 % -3.6 % -43.0 % -9.5 % -2.3 % Net Operating Income (3) - cash basis (4) -1.3 % -6.8 % -54.9 % -11.0 % -1.9 % Net Operating Income (3) - cash basis(4) - without hotels -1.6 % Same
Property Lease Analysis - quarter ended December 31, 2003 Office Office/Technical Industrial Total Vacant space available @
10/1/03 (sf) 1,884,563 172,608 169,273 2,226,444 Square footage of leases
expiring or terminated
10/1/03-12/31/03 1,025,410 17,724 1,043,134 Total space for lease
(sf) 2,909,973 190,332 169,273 3,269,578 New tenants (sf) 370,437 64,572 435,009 Renewals (sf) 499,401 8,208 507,609 Total space leased (sf) 869,838 72,780 942,618 Space available @
12/31/03 (sf) 2,040,135 117,552 169,273 2,326,960 Net (increase)/decrease
in available space (sf) (155,572 ) 55,056 (100,516 ) Average lease term
(months) 97 25 91 2nd generation TI/Comm
PSF $ 25.99 $ 9.78 $ $ 24.73 Increase (decrease) in
2nd generation gross rents (5) -11.6 % -0.6 % 0.0 % -11.4 % Increase (decrease) in
2nd generation net rents (5) -17.2 % -20.1 % 0.0 % -17.3 % (1) Includes revenue
and expenses from retail tenants at the hotel properties. (2) See page 48 for a
quantitative reconciliation. (3) For a quantitative
reconciliation of Net Operating Income (NOI) to net income in accordance with
GAAP, see page 47. For disclosures
relating to our use of NOI, see page 54. (4) For a quantitative
reconciliation of NOI to NOI on a cash basis, see page 47. For disclosures relating to our use of NOI,
see page 54. (5) Represents increase
in rents on a cash to cash basis (actual rent at time of expiration
vs.initial rent of new lease) and for only 2nd generation space after
eliminating any space vacant for more than 12 months. The total footage being weighted is 744,893 sf. 46 Boston Properties,
Inc. Fourth Quarter 2003 Reconciliation
of Net Operating Income to Net Income For the three months ended 12/31/2003 12/31/2002 (in thousands) Net income available to
common shareholders $ 60,592 $ 260,146 Gains on sales of real
estate from discontinued operations, net of minority interest (7,645 ) Income from discontinued
operations, net of minority interest (259 ) (5,508 ) Gains on sales of real
estate and other assets, net of minority interest (187,562 ) Minority interest in
Operating Partnership 18,879 19,289 Income from
unconsolidated joint ventures (662 ) (2,083 ) Minority interest in
property partnerships (313 ) (191 ) Income before minority
interests in property partnerships, income from unconsolidated joint
ventures, minority interest in Operating Partnership, gains on sales of real
estate and other assets, income from discontinued operations and gains on
sales of real estate from discontinued operations 78,237 76,446 Add: Loss from early
extinguishment of debt 2,386 Net derivative losses 1,461 Depreciation and
amortization 56,232 52,129 Interest 75,001 72,410 General and
administrative 11,749 12,703 Subtract: Interest and Other (866 ) (700 ) Development and
management services (4,550 ) (2,769 ) Consolidated Net
Operating Income $ 215,803 $ 214,066 Same Property Net
Operating Income $ 206,065 $ 206,507 Net operating income
from non same properties 13,205 8,681 Termination income 1,226 3,724 Net operating income
from joint venture properties (Companys share) (4,693 ) (4,846 ) Consolidated Net
Operating Income $ 215,803 $ 214,066 Same Property Net
Operating Income $ 206,065 $ 206,507 Less Straight Line Rent 12,350 8,967 Same Property Net
Operating Income - cash basis $ 193,715 $ 197,540 47 Boston Properties,
Inc. Fourth Quarter 2003 Same Property Net Operating
Income by Reportable Segment (in thousands) Office Office/Technical For the three months ended $ % For the three months ended $ % 31-Dec-03 31-Dec-02 Change Change 31-Dec-03 31-Dec-02 Change Change Rental Revenue $ 286,843 $ 290,076 $ 5,255 $ 5,603 Less Termination Income 1,226 3,724 Rental revenue -
subtotal 285,617 286,352 (735 ) -0.3 % 5,255 5,603 (348 ) -6.2 % Operating expenses and
real estate taxes 90,263 92,001 (1,738 ) -1.9 % 1,230 1,135 95 8.4 % Net Operating
Income (1) $ 195,354 $ 194,351 $ 1,003 0.5 % $ 4,025 $ 4,468 $ (443 ) -9.9 % Rental revenue -
subtotal $ 285,617 $ 286,352 $ 5,255 $ 5,603 Less Straight Line Rent 12,362 8,855 3,507 (10 ) 141 (151 ) Rental revenue - cash
basis 273,255 277,497 (4,242 ) -1.5 % 5,265 5,462 (197 ) -3.6 % Less: Operating expenses and
real estate taxes 90,263 92,001 (1,738 ) -1.9 % 1,230 1,135 95 8.4 % Net Operating
Income (2) - cash basis $ 182,992 $ 185,496 $ (2,504 ) -1.3 % $ 4,035 $ 4,327 $ (292 ) -6.7 % Industrial For the three months ended $ % 31-Dec-03 31-Dec-02 Change Change Rental Revenue $ 309 $ 521 Less Termination Income Rental revenue -
subtotal 309 521 (212 ) -40.7 % Operating expenses and
real estate taxes 129 140 (11 ) -7.9 % Net Operating
Income (1) $ 180 $ 381 $ (201 ) -52.8 % Rental revenue - subtotal $ 309 $ 521 Less Straight Line Rent (5 ) (29 ) 24 Rental revenue - cash
basis 314 550 (236 ) -42.9 % Less: Operating expenses and
real estate taxes 129 140 (11 ) -7.9 % Net Operating
Income (2) - cash basis $ 185 $ 410 $ (225 ) -54.9 % Hotel Total For the three months ended $ % For the three months ended $ % 31-Dec-03 31-Dec-02 Change Change 31-Dec-03 31-Dec-02 Change Change Rental Revenue $ 22,499 $ 24,869 $ 314,906 $ 321,069 Less Termination Income 1,226 3,724 Rental revenue -
subtotal 22,499 24,869 $ (2,370 ) -9.5 % 313,680 317,345 (3,665 ) -1.2 % Operating expenses and
real estate taxes 15,993 17,562 (1,569 ) -8.9 % 107,615 110,838 (3,223 ) -2.9 % Net Operating
Income (1) $ 6,506 $ 7,307 $ (801 ) -11.0 % $ 206,065 $ 206,507 $ (442 ) -0.2 % Rental revenue -
subtotal $ 22,499 $ 24,869 $ 313,680 $ 317,345 Less Straight Line Rent 3 3 12,350 8,967 3,383 Rental revenue - cash
basis 22,496 24,869 (2,373 ) -9.5 % 301,330 308,378 (7,048 ) -2.3 % Less: Operating expenses and
real estate taxes 15,993 17,562 (1,569 ) -8.9 % 107,615 110,838 (3,223 ) -2.9 % Net Operating
Income (2) - cash basis $ 6,503 $ 7,307 $ (804 ) -11.0 % $ 193,715 $ 197,540 $ (3,825 ) -1.9 % (1) For a
quantitative reconciliation of net operating income (NOI) to net income in
accordance with GAAP, see page 47. For
disclosures relating to our use of NOI see page 54. (2) For a
quantitative reconciliation of net operating income (NOI) on a cash basis see
page 47. For disclosures relating to
our use of NOI see page 54. 48 Boston Properties,
Inc. Fourth Quarter 2003 All
In-Service Properties - quarter ended December 31, 2003 Office Office/Technical Industrial Total Vacant space available @
10/01/03 (sf) 2,091,466 172,608 169,273 2,433,347 Property dispositions New development
completed (sf) Leases expiring or
terminated 10/1/03-12/31/03 (sf) 1,025,857 17,724 1,043,581 Total space for lease
(sf) 3,117,323 190,332 169,273 3,476,928 New tenants (sf) 410,496 64,572 475,068 Renewals (sf) 499,401 8,208 507,609 Total space leased (sf) 909,897 72,780 982,677 (1) Space available @
12/31/03 (sf) 2,207,426 117,552 169,273 2,494,251 Net (increase)/decrease
in available space (sf) (115,960 ) 55,056 (60,904 ) Average lease term
(months) 98 25 91 2nd generation TI/Comm
PSF $ 25.78 $ 9.78 $ $ 24.55 Increase (decrease) in
2nd generation gross rents (2) -11.52 % -0.60 % 0.00 % -11.29 % Increase (decrease) in
2nd generation net rents (3) -17.41 % -20.12 % 0.00 % -17.50 % (1) Details
of 1st and 2nd generation space: (2)
Represents increase (decrease) in gross rent (total base rent and
expense reimbursements), comparing the change in rent at lease expiration vs. initial rent of the new lease for 2nd
generation space that has been vacant for less than twelve months. (3)
Represents increase (decrease) in net rent (base rent less base year
expense), comparing the rent at lease expiration vs. initial rent of the new lease for 2nd
generation space that has been vacant for less than twelve months. All
leases 1st
Generation All
leases 2nd
Generation Incr
(decr) in 2nd
gen. gross
rents (1) Incr
(decr) in 2nd
gen. net rents
(1) Total Leased Boston 27,952 224,554 -5.32 % -9.15 % 252,506 Washington 7,167 420,432 -8.16 % -11.24 % 427,599 New York 65,816 -0.25 % -10.29 % 65,816 San Francisco 188,228 -28.39 % -39.28 % 188,228 Princeton 2,956 45,572 -1.61 % -0.31 % 48,528 38,075 944,602 -11.29 % -17.50 % 982,677 49 Boston Properties,
Inc. Fourth Quarter 2003 HISTORICALLY
GENERATED CAPITAL EXPENDITURES, TENANT IMPROVEMENT COSTS AND
LEASING COMMISSIONS Historical Capital Expenditures (in thousands) Q4 2003 Q3 2003 Q2 2003 Q1 2003 2002 2001 Recurring capital
expenditures $ 8,413 $ 3,415 $ 4,726 $ 1,960 $ 16,674 $ 11,770 Planned non-recurring
capital expenditures associated with acquisition properties 1,098 446 596 2,324 31,908 45,052 Hotel improvements,
equipment upgrades and replacements 676 353 911 405 3,218 9,230 $ 10,187 $ 4,214 $ 6,233 $ 4,689 $ 51,800 $ 66,052 2nd
Generation Tenant Improvements and Leasing Commissions (1) (in
thousands, except per share amounts) Q4 2003 Q3 2003 Q2 2003 Q1 2003 2002 2001 Office Square feet 871,822 814,524 448,021 501,547 2,122,409 2,394,291 Tenant improvement and
lease commissions PSF $ 25.78 $ 6.43 $ 13.61 $ 8.34 $ 20.17 $ 17.47 Office/Technical Square feet 72,780 45,266 47,147 4,700 347,321 348,178 Tenant improvement and
lease commissions PSF $ 9.78 $ 8.20 $ 0.12 $ 0.86 $ 1.42 $ 3.13 Industrial Square feet 244,904 Tenant improvement and
lease commissions PSF $ $ $ $ $ 0.62 $ Average tenant
improvement and lease commissions PSF $ 24.55 $ 6.52 $ 12.33 $ 8.27 $ 16.01 $ 15.65 (1)
Based on leases executed during the period. 50 Boston Properties,
Inc. Fourth Quarter 2003 as of December 31, 2003 ACQUISITIONS For the period from January 1, 2003 through December 31,
2003 Property Date Acquired Square Feet Initial Investment Anticipated Future Investment Total Investment Percentage Leased Discovery Square
(remaining 50% interest) Apr-03 366,939 $ 18,273,000 $ $ 18,273,000 98 % One Freedom Square
(remaining 75% interest) Aug-03 410,308 19,294,397 19,294,397 100 % Two Freedom Square
(remaining 50% interest) Aug-03 421,502 16,705,603 8,458,285 25,163,888 100 % South of Market- Reston
VA Land Aug-03 N/A 13,522,000 13,522,000 N/A 1333 New Hampshire
Avenue Oct-03 315,363 111,550,000 111,550,000 100 % Total
Value Creation Pipeline - Acquisitions 1,514,112 $ 179,345,000 $ 8,458,285 $ 187,803,285 99 % DISPOSITIONS For the period from January 1, 2003 through December 31,
2003 Property and other assets Date Disposed Square Feet Gross Sales Price Book Gain(Loss) The Candler Building Jan-03 540,706 $ 63,067,000 $ (292,564 ) 875 Third Avenue Feb-03 711,901 370,100,000 (1) 90,020,729 2300 N Street Mar-03 289,243 122,000,000 (2) 64,310,972 Prudential Center garage
spaces May-03 N/A 1,935,000 153,000 Transfer of mortgage
benefits Various N/A 5,780,000 5,780,000 Total
Dispositions 1,541,850 $ 562,882,000 $ 159,972,137 (1)
Includes $8.8 million of future tenant improvement work credited to
buyer at closing. (2)
Includes $8.0 million of future tenant improvement work credited to
buyer at closing. 51 Boston Properties,
Inc. Fourth Quarter 2003 VALUE
CREATION PIPELINE - CONSTRUCTION IN PROGRESS as of December 31, 2003 (except percentage leased) Development Properties Initial Occupancy Estimated Stabilization Date Location # of Buildings Square feet New Dominion Tech,
Building Two Q3 2004 Q3 2004 Herndon, VA 1 257,400 Times Square Tower Q2 2004 Q2 2005 New York, NY 1 1,234,272 901 New York Avenue (25%
ownership) Q3 2004 Q3 2005 Washington, D.C. 1 538,463 Total
Development Properties 3 2,030,135 Development Properties Investment to Date Estimated Total Investment (1) Total Construction Loan Amount Drawn at December 31, 2003 Estimated Future Equity Requirement Percentage Leased New Dominion Tech,
Building Two $ 49,209,794 $ 67,589,000 $ 65,000,000 $ 42,642,520 $ 100 % Times Square Tower 506,739,024 653,500,000 493,500,000 332,889,866 25 % 901 New York Avenue (25%
ownership) 25,978,455 44,777,000 30,000,000 11,831,260 629,805 80 % Total
Development Properties $ 581,927,273 $ 765,866,000 $ 588,500,000 $ 387,363,646 $ 629,805 49 % DEVELOPMENTS PLACED-IN-SERVICE DURING 2003 Initial In Service Date Estimated Stabilization Date Location # of Buildings Square feet Class
A Office Building Waltham Weston Corporate
Center Q1 2002 Q4 2003 Waltham, MA 1 306,801 Two Freedom Square (50%
ownership) Q3 2002 Q2 2003 Reston, VA 1 421,502 Shaws Supermarket Q2 2003 Q2 2003 Boston, MA 1 57,235 Total
Developments Placed in Service 3 785,538 Investment to Date Estimated Total Investment Construction Loan Drawn at December 31, 2003 Estimated Future Equity Requirement Percentage Leased Class
A Office Building Waltham Weston Corporate
Center $ 74,005,707 $ 85,000,000 $ $ $ 10,994,293 67 % Two Freedom Square (50%
ownership) 40,877,715 49,336,000 8,458,285 100 % Shaws Supermarket 24,415,736 24,600,000 184,264 100 % Total
Developments Placed in Service $ 139,299,158 $ 158,936,000 $ $ $ 19,636,842 87 % (1) Includes net revenues during lease-up period and
cash component of hedge contracts. 52 Boston Properties,
Inc. Fourth Quarter 2003 VALUE CREATION PIPELINE - OWNED
LAND PARCELS as of December 31, 2003 Location No. of Parcels Acreage Developable Square Feet Rockville, MD 3 83.0 1,242,000 Dulles, VA 2 76.6 945,000 Gaithersburg, MD 4 27.0 850,000 San Jose, CA 5 3.7 841,000 Reston, VA 4 43.2 1,602,000 Boston, MA 2 0.5 776,000 Marlborough, MA 1 0.5 170,000 Weston, MA 1 50.0 400,000 Waltham, MA 1 4.3 202,000 Andover, MA 1 74.0 350,000 Washington, D.C. 1 10.0 110,000 25 372.7 7,488,000 VALUE CREATION PIPELINE - LAND
PURCHASE OPTIONS as of December 31, 2003 Location No. of Parcels Acreage Developable Square Feet Princeton, NJ (1) 14 149.9 1,900,000 Washington, D.C. (2) 2 4.6 1,432,000 Framingham, MA (3) 1 21.5 300,000 Cambridge, MA (4) 1 2.6 165,000 18 178.6 3,797,000 (1) $20.00 per developable
square foot plus an earnout calculation. (2) One parcel is subject to ground lease. The other parcels option expires on 3/16/05
if there is no tenant. (3) Subject to ground lease. (4) Prior to January 23, 2004, the cost will be $28.32/SF of land
area. Land area is approximately
108,000 SF. 53 Boston Properties,
Inc. Fourth Quarter 2003 This section contains a brief explanation of
certain non-GAAP financial measures we provide in other sections of this
document, and a statement of the reasons why management believes these measures
provide useful information to investors about the companys financial condition
or results of operations. Additional
detail can be found in the companys most recent annual report on Form 10-K and
other documents filed with the SEC from time to time. Funds from Operations: Pursuant to the revised definition of Funds from
Operations adopted by the Board of Governors of the National Association of
Real Estate Investment Trusts (NAREIT), we calculate Funds from Operations,
or FFO, by adjusting net income (loss) (computed in accordance with
accounting principles generally accepted in the United States of America
(GAAP), including non-recurring items), for gains (or losses) from sales of
properties, real estate related depreciation and amortization, and after
adjustment for unconsolidated partnerships and joint ventures. The use of FFO,
combined with the required primary GAAP presentations, has been fundamentally
beneficial, improving the understanding of operating results of REITs among the
investing public and making comparisons of REIT operating results more
meaningful. Management generally considers FFO to be a useful measure for
reviewing the comparative operating and financial performance of the Company
because, by excluding gains and losses related to sales of previously
depreciated operating real estate assets and excluding real estate asset
depreciation and amortization (which can vary among owners of identical assets
in similar condition based on historical cost accounting and useful life estimates),
FFO can help one compare the operating performance of a companys real estate
between periods or as compared to different companies. Our computation of FFO may not be comparable to FFO
reported by other REITs or real estate companies that do not define the term in
accordance with the current NAREIT definition or that interpret the current
NAREIT definition differently. In addition to presenting FFO in accordance with
the NAREIT definition, we also disclose FFO after specific supplemental adjustments,
including net derivative losses and early surrender lease adjustments. Although our FFO as adjusted clearly differs
from NAREITs definition of FFO, as well as that of other REITs and real estate
companies, we believe it provides a meaningful supplemental measure of our
operating performance. FFO should not be considered as an alternative to net
income (determined in accordance with GAAP) as an indication of our
performance. FFO does not represent cash generated from operating activities
determined in accordance with GAAP and is not a measure of liquidity or an
indicator of our ability to make cash distributions. We believe that to further
understand our performance, FFO and FFO as adjusted should be compared with our
reported net income and considered in addition to cash flows in accordance with
GAAP, as presented in our consolidated financial statements. Funds Available for Distribution (FAD) In addition to FFO, we present Funds Available for
Distribution (FAD) by (1) adding to FFO non-real estate depreciation, (2)
eliminating the effect of straight-line rent, and (3) subtracting: recurring
capital expenditures; hotel improvements, equipment upgrades and replacements;
and second generation tenant improvement and leasing commissions. In addition, this calculation includes all
non-cash compensation expense related to restricted securities. Although our FAD as adjusted differs from
that of other real estate companies, we believe it provides a meaningful indicator
of our ability to fund cash needs and to make cash distributions to equity
owners. In addition, we believe that to
further understand our liquidity, FAD should be compared with our cash flows in
accordance with GAAP, as presented in our consolidated financial
statements. Our computation of FAD may
not be comparable to FAD reported by other REITs or real estate companies and
FAD does not represent cash generated from operating activities determined in
accordance with GAAP, and should not be considered as an alternative to net
income (determined in accordance with GAAP) as an indication of our
performance, as an alternative to net cash flows from operating activities
(determined in accordance with GAAP), or as a measure of our liquidity. Debt to Total Market Capitalization Ratio Debt to total market capitalization ratio, defined
as total consolidated debt as a percentage of the market value of our
outstanding equity securities plus our total consolidated debt, is a measure of
leverage commonly used by analysts in the REIT sector. Total market capitalization is the sum of
our total indebtedness outstanding on a consolidated basis (excluding
unconsolidated joint venture debt) and the market value of our outstanding
equity securities calculated using the closing stock price per share of common stock
of the company multiplied by the sum of (1) the actual aggregate number of
outstanding common partnership units of our operating partnership (including
common partnership units held by the company) and (2) the number of common
partnership units issuable upon conversion of preferred partnership units of
our operating partnership. We are
presenting this ratio because our degree of leverage could affect our ability
to obtain additional financing for working capital, capital expenditures,
acquisitions, development or other general corporate purposes. Investors should understand that our debt to
total market capitalization ratio is in part a function of the market price of
the common stock of Boston Properties, Inc., and as such will fluctuate with
changes in such price and does not necessarily reflect our capacity to incur
additional debt to finance our activities or our ability to manage our existing
debt obligations. However, for a
company like ours, whose assets are primarily income-producing real estate, the
debt to total market capitalization ratio may provide investors with an
alternate indication of leverage, so long as it is evaluated along with the
ratio of indebtedness to other measures of asset value used by financial
analysts and other financial ratios, as well as the various components of our
outstanding indebtedness. Net Operating Income (NOI) NOI is a non-GAAP financial measure equal to net
income, the most directly comparable GAAP financial measure, plus corporate
general and adminstrative expense, depreciation and amortization, interest
expense, minority interest in Operating Partnership, net derivative losses and
losses from early extinguishment of debt, less interest income, development and
management income, gains from property dispositions, gains on sale from
discontinued operations, income from discontinued operations, income from
unconsolidated joint ventures and minority interest in property
partnerships. In some cases we also
present NOI on a cash basis, which is NOI after eliminating the effects of
straight-lining of rent. We use NOI
internally as a performance measure and believe NOI provides useful information
to investors regarding our financial condition and results of operations
because it reflects only those income and expense items that are incurred at
the property level. Therefore, we
believe NOI is a useful measure for evaluating the operating performance of our
real estate assets. Our management also
uses NOI to evaluate regional property level performance and to make decisions
about resource allocations. Further, we
believe NOI is useful to investors as a performance measure because, when
compared across periods, NOI reflects 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. NOI excludes
certain components from net income in order to provide results that are more closely
related to a propertys results of operations.
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. In
addition, depreciation and amortization, because of historical cost accounting
and useful life estimates, may distort operating performance at the property
level. NOI presented by us may not be
comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear
understanding of our operating results, NOI should be examined in conjunction
with net income as presented in our consolidated financial statements. NOI should not be considered as an
alternative to net income as an indication of our performance or to cash flows
as a measure of liquidity or ability to make distributions. If you would like to receive this document in a
different electronic format, please call investor relations at 617-236-3322. 54 Exhibit
99.2 Boston Properties, Inc. AT THE COMPANY AT FRB/WEBER SHANDWICK Michael Walsh Marilynn Meek General
Info. Vice President, Finance (212) 445-8431 (617) 236-3410 Kathleen DiChiara Suzie Pileggi Media Investor Relations
Manager (212) 445-8170 (617) 236-3343 FOR IMMEDIATE RELEASE: January 27, 2004 BOSTON PROPERTIES, INC. ANNOUNCES BOSTON, MA, January 27, 2004 Boston
Properties, Inc. (NYSE: BXP), a real estate investment trust, today
reported results for the fourth quarter ended December 31, 2003. Results
for the quarter ended December 31, 2003 Funds from Operations
(FFO) for the quarter ended December 31, 2003 were $106.9 million, or $1.09 per
share basic and $1.05 per share diluted.
This compares to FFO for the quarter ended December 31, 2002 of $113.5
million, or $1.19 per share basic and $1.14 per share diluted before the
application of SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended. The weighted
average number of basic and diluted shares outstanding totaled 97,944,897 and
107,187,540, respectively, for the quarter ended December 31, 2003 and
95,313,371 and 105,630,130, respectively, for the same quarter last year. Diluted FFO for the
fourth quarter 2002 included approximately $0.11 per share generated by One and
Two Independence Square, The Candler Building, 875 Third Avenue and 2300 N
Street properties, which were sold as part of our capital recycling program in
connection with the acquisition of 399 Park Avenue in September 2002. Diluted FFO for the fourth quarter of 2003
included approximately $0.05 per share of higher interest costs compared to the
fourth quarter of 2002 primarily as a result of the interest on $1.475 billion
of floating-rate debt being refinanced during 2003 with longer-term, unsecured
fixed-rate debt at an average interest rate of approximately 5.95% and after
taking into account the interest expense associated with the sold
properties. After eliminating the
contribution to FFO from the sold properties and excluding the effects of the
refinancing of our floating-rate debt, diluted FFO per share would have
increased by 6.8% between the two periods. Net income
available to common shareholders per share (EPS) for the quarter ended December
31, 2003 was $0.62 basic and $0.61 on a diluted basis. This compares to EPS for
the fourth quarter of 2002 of $2.73 basic and $2.70 on a diluted basis. EPS for the fourth quarter of 2002 included
$2.08, on a diluted basis, related to gains on sales of real estate and
discontinued operations. Excluding the
impact of these items, diluted EPS was $0.62 for the quarter ended December 31,
2002. Results for the year ended December
31, 2003 FFO for the year
ended December 31, 2003 were $412.1 million, or $4.25 per share basic and $4.09
per share diluted before the application of SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, as amended and early surrender
lease adjustment. FFO for the year
ended 2003 compares to FFO of $399.5 million, or $4.29 per share basic and
$4.09 per share diluted for the year ended December 31, 2002. The weighted average number of basic and
diluted shares outstanding totaled 96,899,873 and 106,861,317, respectively,
for the year ended December 31, 2003 and 93,144,747 and 105,799,277,
respectively, for the year ended December 31, 2002. EPS
for the year ended December 31, 2003 was $3.77 basic and $3.71 on a diluted
basis. This includes $1.35 per share,
on a diluted basis, related to gains on sales of real estate and discontinued
operations. EPS for the year ended
December 31, 2002 was $4.73 basic and $4.66 on a diluted basis. This includes $2.44 per share, on a diluted
basis, related to gains on sales of real estate and discontinued
operations. Excluding the impact of these
items, diluted EPS was $2.36 for the year ended December 31, 2003 and $2.22 for
the year ended December 31, 2002. The
reported results are unaudited and there can be no assurance that the results
will not vary from the final information for the quarter and year ended
December 31, 2003. In the opinion of
management, all adjustments considered necessary for a fair presentation of
these reported results have been made. As of December 31, 2003,
the Companys portfolio consisted of 140 properties comprising approximately
43.9 million square feet, including three properties under construction
totaling 2.0 million square feet. The
overall percentage of leased space for the properties in service as of December
31, 2003 was 92.1%. Significant events of the
fourth quarter include: On October 8, 2003, the Company
acquired 1333 New Hampshire Avenue, a 315,000 square foot Class A office
property in Washington, D.C. at a purchase price of approximately $111.6
million. The acquisition was financed
with borrowings under the Companys unsecured revolving credit facility and
available cash. The property is 100%
leased. On November 7, 2003, the Company
executed a contract for the sale of Sugarland Business Park-Building Two, an
office/technical property totaling approximately 59,000 square feet located in
Herndon, Virginia for $7.1 million. The
sale is subject to the
satisfaction of customary closing conditions and, although there can be no
assurances that the sale will be consummated on the terms currently
contemplated or at all, we have no reason to believe that the closing will not occur
as expected by the end of February 2004. On December 12, 2003, the Company
executed a contract for the sale of Hilltop Office Center, comprised of nine
office/technical properties totaling approximately 143,000 square feet located
in South San Francisco, California. The
Company has a 35.7% interest in these properties. The sale is subject to the satisfaction of customary closing
conditions and, although there can be no assurances that the sale will be
consummated on the terms currently contemplated or at all, we have no reason to
believe that the closing will not occur as expected by the end of February
2004. On December 18, 2003, the Company
executed a 10-year lease commencing in June 2004 for 141,348 square feet at its
611 Gateway Boulevard property located in South San Francisco, California. The previously unoccupied development
property is now approximately 55% leased. Transactions completed
subsequent to December 31, 2003: On January 16, 2004, the Company sold
430 Rozzi Place, an industrial property totaling approximately 20,000 square
feet located in South San Francisco, California for $2.5 million. The Company had a 35.7% interest in this
property. On
January 23, 2004, the Company refinanced its $493.5 million construction loan
secured by the Times Square Tower property in New York City. The loan bore interest at LIBOR + 1.95% per
annum and was scheduled to mature in November 2004. At December 31, 2003, the outstanding balance under the loan was
$332.9 million. This loan facility
totaling $475.0 million is comprised of two tranches. The first tranche consists of a $300.0 million loan commitment
which bears interest at LIBOR + 0.90% per annum and matures in January 2006,
with a one year extension option. The
second tranche consists of a $175.0 million term loan which bears interest at
LIBOR + 1.00% per annum and matures in January 2007, unless the maturity date
of the first tranche is not extended, in which case it will mature in January
2006. On January 26, 2004, the Company executed
a contract to acquire 1330 Connecticut Avenue, a 259,000 square foot Class A
office property in Washington, D.C. at a purchase price of approximately $86.6
million. In addition, the Company will
be obligated to fund an additional $11.0 million for tenant and capital
improvements during approximately the first two years of ownership. The acquisition will be financed with the
assumption of mortgage indebtedness secured by the property totaling
approximately $52.0 million bearing interest at a fixed rate of 7.58% per annum
and maturing in 2011 and through borrowings under the Companys unsecured
revolving credit facility and available cash.
The acquisition is subject to the satisfactory assignment and assumption
of the in-place mortgage indebtedness and customary closing conditions and,
although there can be no assurances that the acquisition will be
consummated on the terms currently contemplated or at all, we have no reason to
believe that the closing will not occur. EPS and FFO Per Share Guidance: The Companys guidance
for the first quarter of 2004 and the full year of 2004 for EPS (diluted) and
FFO per share (diluted) is set forth and reconciled below. The reconciliation
of projected EPS to projected FFO per share, as provided below, is consistent
with the Companys historical computations. First Quarter 2004 Full Year 2004 Low - High Low - High Projected EPS (diluted) $ 0.53 - $ 0.55 $ 2.33 - $ 2.43 Add: Projected Company Share of
Real Estate Depreciation and
Amortization $ 0.46 - $ 0.46 $ 1.85 - $ 1.85 Less: Dilutive
Impact of Preferred Securities $ 0.04 - $ 0.04 $ 0.15 - $ 0.15 Projected FFO per Share (diluted) $ 0.95 - $ 0.97 $ 4.03 - $ 4.13 The foregoing estimates
reflect managements view of current and future market conditions, including
certain assumptions with respect to rental rates, occupancy levels and earnings
impact of the events referenced in this release. There can be no assurance that
the Companys actual results will not differ materially from the estimates set
forth above. Boston Properties will
host a conference call tomorrow, January 28, 2004 at 10:00 AM (Eastern Time),
open to the general public, to discuss the fourth quarter and full fiscal year
2003 results, the 2004 projections and other related matters. The number to call for this interactive
teleconference is (800) 218-0530. A
replay of the conference call will be available through February 4, 2004 by
dialing (800) 405-2236 and entering the passcode 564857. An audio-webcast will also be archived and
may be accessed at www.bostonproperties.com in the Investors section under the
heading Audio
Archive. Additionally, a copy of
Boston Properties fourth quarter 2003 Supplemental Operating and Financial
Data and this press release are available in the Investors section of the
Companys website at www.bostonproperties.com. These materials are also
available by contacting Investor Relations at (617) 236-3322 or by written
request to: Boston Properties, Inc. Boston, MA 02199-7610 Boston Properties is a
fully integrated, self-administered and self-managed real estate investment
trust that develops, redevelops, acquires, manages, operates and owns a diverse
portfolio of Class A office, industrial and hotel properties. The Company is one of the largest owners and
developers of Class A office properties in the United States, concentrated in
four core markets Boston, Midtown Manhattan, Washington, D.C. and San
Francisco. This
press release contains forward-looking statements within the meaning of the
Federal securities laws. You can
identify these statements by our use of the words expects, plans,
estimates, projects, intends, believes and similar expressions that do
not relate to historical matters. You
should exercise caution in interpreting and relying on forward-looking
statements because they involve known and unknown risks, uncertainties and
other factors which are, in some cases, beyond Boston Properties control and
could materially affect actual results, performance or achievements. These factors include, without limitation,
the ability to enter into new leases or renew leases on favorable terms,
dependence on tenants financial condition, the uncertainties of real estate
development and acquisition activity, the ability to effectively integrate
acquisitions, the costs and availability of financing, the effects of local
economic and market conditions, the impact of newly adopted accounting
principles on period-to-period comparisons of financial results, regulatory
changes and other risks and uncertainties detailed from time to time in the
Companys filings with the Securities and Exchange Commission. The Company does not undertake a duty to
update forward-looking statements, including its expected operating results for
the first quarter of 2004 and the full year of 2004. Financial tables
follow. BOSTON
PROPERTIES, INC. Three months ended Year ended 2003 2002 2003 2002 (in thousands, except for per share amounts) (unaudited) Revenue Rental: Base
rent $ 258,269 $ 253,730 $ 1,007,422 $ 931,634 Recoveries
from tenants 38,204 38,136 157,304 141,416 Parking
and other 12,213 13,217 53,601 50,827 Total
rental revenue 308,686 305,083 1,218,327 1,123,877 Hotel
revenue 22,082 24,779 70,083 44,786 Development
and management services 4,550 2,769 18,185 10,748 Interest
and other 866 700 3,033 5,504 Total
revenue 336,184 333,331 1,309,628 1,184,915 Expenses Operating: Rental 98,973 98,234 400,639 368,047 Hotel 15,992 17,562 52,250 31,086 General
and administrative 11,749 12,703 45,359 47,292 Interest 75,001 72,410 299,436 263,067 Depreciation
and amortization 56,232 52,129 210,072 179,726 Net
derivative losses 1,461 1,038 11,874 Loss
from early extinguishment of debt 2,386 1,474 2,386 Loss
on investments in securities 4,297 Total
expenses 257,947 256,885 1,010,268 907,775 Income
before minority interests in property partnerships, income from
unconsolidated joint ventures, minority interest in Operating Partnership,
gains on sales of real estate and other assets, discontinued operations and
preferred dividend 78,237 76,446 299,360 277,140 Minority
interests in property partnerships 313 191 1,604 2,171 Income
from unconsolidated joint ventures 662 2,083 6,016 7,954 Income
before minority interest in Operating Partnership, gains on sales of real
estate and other assets, discontinued operations and preferred dividend 79,212 78,720 306,980 287,265 Minority
interest in Operating Partnership (18,879 ) (19,289 ) (74,642 ) (73,980 ) Income
before gains on sales of real estate and other assets, discontinued operations
and preferred dividend 60,333 59,431 232,338 213,285 Gains
on sales of real estate and other assets, net of minority interest 187,562 57,574 190,443 Income
before discontinued operations and preferred dividend 60,333 246,993 289,912 403,728 Discontinued
Operations: Income
from discontinued operations, net of minority interest 259 5,508 2,176 15,310 Gains
on sales of real estate from discontinued operations, net of minority
interest 7,645 73,234 25,345 Income
before preferred dividend 60,592 260,146 365,322 444,383 Preferred
dividend (3,412 ) Net
income available to common shareholders $ 60,592 $ 260,146 $ 365,322 $ 440,971 Basic
earnings per share: Income
available to common shareholders before discontinued operations $ 0.62 $ 2.59 $ 2.99 $ 4.30 Discontinued
operations, net of minority interest 0.14 0.78 0.43 Net
income available to common shareholders $ 0.62 $ 2.73 $ 3.77 $ 4.73 Weighted
average number of common shares outstanding 97,945 95,313 96,900 93,145 Diluted
earnings per share: Income
available to common shareholders before discontinued operations $ 0.61 $ 2.56 $ 2.94 $ 4.23 Discontinued
operations, net of minority interest 0.14 0.77 0.43 Net
income available to common shareholders $ 0.61 $ 2.70 $ 3.71 $ 4.66 Weighted
average number of common and common equivalent shares outstanding 100,100 96,395 98,486 94,612 BOSTON
PROPERTIES, INC. CONSOLIDATED
BALANCE SHEETS December 31, December 31, (in thousands, except for share amounts) (unaudited) ASSETS Real
estate $ 8,202,958 $ 7,781,684 Development
in progress 542,600 448,576 Land
held for future development 232,098 215,866 Real
estate held for sale, net 5,604 224,585 Less:
accumulated depreciation (1,001,435 ) (822,933 ) Total
real estate 7,981,825 7,847,778 Cash
and cash equivalents 22,686 55,275 Cash
held in escrows 21,321 41,906 Tenant
and other receivables, net of allowance for doubtful accounts of $3,157 and
$3,682, respectively 18,425 20,458 Accrued
rental income, net of allowance of $5,030 and $4,744, respectively 189,852 165,321 Deferred
charges, net 188,855 176,545 Prepaid
expenses and other assets 39,350 18,015 Investments
in unconsolidated joint ventures 88,786 101,905 Total
assets $ 8,551,100 $ 8,427,203 LIABILITIES
AND STOCKHOLDERS EQUITY Liabilities: Mortgage
notes payable $ 3,471,400 $ 4,267,119 Unsecured
senior notes, net of discount 1,470,320 747,375 Unsecured
bridge loan 105,683 Unsecured
line of credit 63,000 27,043 Accounts
payable and accrued expenses 92,026 73,846 Dividends
and distributions payable 84,569 81,226 Interest
rate contracts 8,191 14,514 Accrued
interest payable 50,931 25,141 Other
liabilities 80,367 81,085 Total
liabilities 5,320,804 5,423,032 Commitments
and contingencies Minority
interests 830,133 844,581 Stockholders
equity: Excess
stock, $.01 par value, 150,000,000 shares authorized, none issued or
outstanding Preferred
stock, $.01 par value, 50,000,000 shares authorized, none issued or
outstanding Common
stock, $.01 par value, 250,000,000 shares authorized, 98,309,077 and
95,441,890 shares issued and 98,230,177 and 95,362,990 shares outstanding in
2003 and 2002, respectively 982 954 Additional
paid-in capital 2,104,158 1,982,689 Earnings
in excess of dividends 320,900 198,586 Treasury
common stock, at cost (2,722 ) (2,722 ) Unearned
compensation (6,820 ) (2,899 ) Accumulated
other comprehensive loss (16,335 ) (17,018 ) Total
stockholders equity 2,400,163 2,159,590 Total
liabilities and stockholders equity $ 8,551,100 $ 8,427,203 BOSTON
PROPERTIES, INC. FUNDS
FROM OPERATIONS (1) Three months ended Year ended 2003 2002 2003 2002 (in
thousands, except for per share amounts) (unaudited) Net
income available to common shareholders $ 60,592 $ 260,146 $ 365,322 $ 440,971 Add: Preferred
dividend 3,412 Minority
interest in Operating Partnership 18,879 19,289 74,642 73,980 Less: Minority
interests in property partnerships 313 191 1,604 2,171 Income
from unconsolidated joint ventures 662 2,083 6,016 7,954 Gains
on sales of real estate and other assets, net of minority interest 187,562 57,574 190,443 Income
from discontinued operations, net of minority interest 259 5,508 2,176 15,310 Gains
on sales of real estate from discontinued operations, net of minority
interest 7,645 73,234 25,345 Income
before minority interests in property partnerships, income from
unconsolidated joint ventures, minority interest in Operating Partnership,
gains on sales of real estate and other assets, discontinued operations and
preferred dividend 78,237 76,446 299,360 277,140 Add: Real
estate depreciation and amortization 57,500 56,072 216,235 192,574 Income
from discontinued operations 339 6,720 2,759 18,779 Income
from unconsolidated joint ventures 662 2,083 6,016 7,954 Loss
from early extinguishment of debt associated with the sale of real estate 2,386 1,474 2,386 Less: Minority
interests in property partnerships share of funds from operations (945 ) (1,390 ) (3,458 ) (3,223 ) Preferred
dividends and distributions (4,443 ) (5,926 ) (21,249 ) (28,711 ) Funds
from operations 131,350 136,391 501,137 466,899 Add: Net
derivative losses (SFAS No. 133) 1,461 1,038 11,874 Early
surrender lease adjustment (2) 8,520 Funds
from operations before net derivative losses (SFAS No. 133) and after early
surrender lease adjustment $ 131,350 $ 137,852 $ 502,175 $ 487,293 Funds
from operations available to common shareholders before net derivative losses
(SFAS No. 133) and after early surrender lease adjustment $ 106,931 $ 113,464 $ 412,073 $ 399,489 Weighted
average shares outstanding - basic 97,945 95,313 96,900 93,145 FFO
per share basic before net derivative losses (SFAS No. 133) and after early
surrender lease adjustment $ 1.09 $ 1.19 $ 4.25 $ 4.29 FFO
per share basic after net derivative losses (SFAS No. 133) and before early
surrender lease adjustment $ 1.09 $ 1.18 $ 4.24 $ 4.11 Weighted
average shares outstanding - diluted 107,188 105,630 106,861 105,799 FFO
per share diluted before net derivative losses (SFAS No. 133) and after early
surrender lease adjustment $ 1.05 $ 1.14 $ 4.09 $ 4.09 FFO
per share diluted after net derivative losses (SFAS No. 133) and before early
surrender lease adjustment $ 1.05 $ 1.13 $ 4.08 $ 3.92 (1) Pursuant
to the revised definition of Funds from Operations adopted by the Board of
Governors of the National Association of Real Estate Investment Trusts
(NAREIT), we calculate Funds from Operations, or FFO, by adjusting net
income (loss) (computed in accordance with accounting principles generally
accepted in the United States of America (GAAP), including non-recurring
items), for gains (or losses) from sales of properties, real estate related
depreciation and amortization, and after adjustment for unconsolidated
partnerships and joint ventures. The use of FFO, combined
with the required primary GAAP presentations, has been fundamentally
beneficial, improving the understanding of operating results of REITs among the
investing public and making comparisons of REIT operating results more
meaningful. Management generally considers FFO to be a useful measure for reviewing
the comparative operating and financial performance of the Company because, by
excluding gains and losses related to sales of previously depreciated operating
real estate assets and excluding real estate asset depreciation and
amortization (which can vary among owners of identical assets in similar
condition based on historical cost accounting and useful life estimates), FFO
can help one compare the operating performance of a companys real estate
between periods or as compared to different companies. Our computation of FFO
may not be comparable to FFO reported by other REITs or real estate companies
that do not define the term in accordance with the current NAREIT definition or
that interpret the current NAREIT definition differently. In addition to presenting
FFO in accordance with the NAREIT definition, we also disclose FFO after
specific supplemental adjustments, including net derivative losses and early
surrender lease adjustment. Although
our FFO as adjusted clearly differs from NAREITs definition of FFO, as well as
that of other REITs and real estate companies, we believe it provides a
meaningful supplemental measure of our operating performance. FFO should not be
considered as an alternative to net income (determined in accordance with GAAP)
as an indication of our performance.
FFO does not represent cash generated from operating activities
determined in accordance with GAAP and is not a measure of liquidity or an
indicator of our ability to make cash distributions. We believe that to further
understand our performance, FFO and FFO as adjusted should be compared with our
reported net income and considered in addition to cash flows in accordance with
GAAP, as presented in our consolidated financial statements. (2) Represents
cash received under contractual obligations. BOSTON PROPERTIES, INC. PORTFOLIO LEASING PERCENTAGES % Leased by
Location December 31, 2003 December 31, 2002 Greater
Boston 88.9 % 91.8 % Greater
Washington, D.C. 95.1 % 95.9 % Midtown
Manhattan 99.4 % 98.4 % Baltimore,
MD 95.1 % 97.6 % Richmond,
VA 89.2 % 91.8 % Princeton/East
Brunswick, NJ 93.4 % 93.3 % Greater
San Francisco 82.4 % 87.4 % Bucks
County, PA 100.0 % 100.0 % Total
Portfolio 92.1 % 93.9 % % Leased
by Type December
31, 2003 December
31, 2002 Class
A Office Portfolio 92.7 % 94.1 % Office/Technical
Portfolio 89.4 % 89.7 % Industrial
Portfolio 56.6 % 100.0 % Total
Portfolio 92.1 % 93.9 %
Securities Exchange Act of 1934
January
27, 2004
of incorporation)
Number)
Identification No.)
ITEM
7. Financial Statements,
Pro Forma Financial Information and Exhibits.
ITEM
12. Results
of Operations and Financial Condition.
111 Huntington Avenue
Boston, MA 02199
(NYSE: BXP)
FOURTH QUARTER 2003 RESULTS
Reports
diluted FFO per share of $1.05
Reports
diluted EPS of $0.61
Investor
Relations
111 Huntington
Avenue, Suite 300
CONSOLIDATED STATEMENTS OF OPERATIONS
December 31,
December 31,
2003
2002
December 31,
December 31,
+Y;/N]D%WR*YU'XPB>#``0(`.)'K_C%,SX9E$^]ZE?/^M:[
MGNY_OY#F_TOXSML^``H(`.A#/_K>E][TIT?&ZX=/_.(;'_:9GSU9.6_[YB,C
M][L7?>^G_WO@!S_NQ\^^]K>/?(&,MFZ]+9.A^Q!XC->F^>@W/.Z1L7O>3__]
MU;?^];E/__JSWDB[*A6OJ,%___W''@GEAV[,EW[H]WS0UW[N]W[P%P#R)W^-
M9W\0&('=QR[X93#.8C4B,1VX060AHGQ[A@P$&(*&IP`DJ'L(F(`*"'\-N((/
M*($NJ'WX9RC.HF:AI5]X,GY^$(#_5GLB2(`&>(`(*'TIF(+QMX+`UX(OF(3W
MMS7/,B<7J&N"9H$7\W]'H(,\-H`]&((_"(1!.(1>B`!%:(1'B'I*6(:21R:O
M-87:UA)[T7]46(4>V$D\F(4]B'LDF'LF>((H^(4*&(9B.(;"9X:".($4""V?
M(EP%9H'5\A-O6`162'MS2(=U:(
1MT@#LBP-#TIVA]/ W#ZQH9-[
M@RO>A?4G<>0