SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): OCTOBER 25, 1999 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 of incorporation) Number) Identification No.) 800 BOYLSTON STREET BOSTON, MASSACHUSETTS 02199 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (617) 236-3300
ITEM 5. OTHER EVENTS Following the issuance of a press release on October 25, 1999, announcing the Company's results for the third quarter ended September 30, 1999, the Company intends to provide, to certain investors and analysts at their request, supplemental information regarding the Company's operations that is to voluminous for a press release. The Company is attaching this supplementary operating and financial data as Exhibit 99.1 and the press release as Exhibit 99.2 to this Current Report on Form 8-K. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits EXHIBIT NO. 99.1 The Boston Properties, Inc. Supplemental Operating and Financial Data for the quarter ended September 30, 1999. 99.2 The Boston Properties, Inc. press release dated October 25, 1999 for the quarter ended September 30, 1999.
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: October 26, 1999 BOSTON PROPERTIES, INC. /s/ David G. Gaw ---------------------------------- By: David G. Gaw Chief Financial Officer
EXHIBIT 99.1 BOSTON PROPERTIES, INC. SUPPLEMENTAL OPERATING AND FINANCIAL DATA FOR THE QUARTER ENDED SEPTEMBER 30, 1999
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 INDEX Page ---- Company Background 2 Investor Information 3-4 Financial Highlights 5 Consolidated Balance Sheets 6 Consolidated Income Statements 7 Funds From Operations 8 Financial Ratios 9 Capital Structure 10 Debt Analysis 11 Joint Ventures 12 Portfolio Overview 13-14 Occupancy Analysis 15 Office Properties 16 R&D Properties 17 Industrial Properties 18 Grand Total - Office, R&D and Industrial Properties 19 Hotel Performance 20 Same Property Performance 21 "In-Service" Property Performance 22 Capital Expenditures 23 Value Creation Pipeline - Acquisitions/Repositioning 24 Value Creation Pipeline - Development 25 Value Creation Pipeline - Land Parcels 26 Acquisition Property Profiles 27-28 1
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 COMPANY BACKGROUND 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 office, industrial and hotel properties. The Company is one of the largest owners and developers of office properties in the United States, concentrated in the Northeast Corridor from Virginia to Greater Boston and in greater San Francisco. On June 23, 1997, Boston Properties successfully completed its initial public offering. The offering and the underwriters over-allotment option closed on the same date resulting in 36,110,000 shares being sold at $25.00 per share for a total offering of $902,750,000. On January 30,1998, the Company closed a follow-on offering of 23,000,000 shares (including the underwriters' over-allotment) at $35.125 per share for a total offering of $807,875,000. On May 20, 1999, the Company raised an additional $141,002,500, net of issuance costs, through the issuance of 4,000,000 shares. Through its predecessor company founded by Mortimer B. Zuckerman and Edward H. Linde in 1970, the Company grew through the seventies, eighties, and nineties by developing and redeveloping Class A office properties, R&D and industrial properties, and hotels in its primary markets of greater Boston, greater Washington, DC, and midtown Manhattan. Since the Company's Initial Offering in June 1997, the Company has acquired 44 properties adding approximately 15.6 million square feet to its portfolio, representing an investment of approximately $3.8 billion. In addition, the Company is developing ten Class A Office Buildings for a total anticipated investment of approximately $1.1 billion. The Company owns or controls land where it can develop an additional 10.0 million square feet. 2
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 INVESTOR INFORMATION 800 Boylston Street Boston, MA 02199 (617) 236-3300 (617) 536-5087 (fax) Mortimer B. Zuckerman Chairman of the Board Edward H. Linde President, Chief Executive Officer and Director Robert E. Burke Executive Vice President, Operations Douglas T. Linde Senior Vice President, Financial and Capital Markets David G. Gaw Senior Vice President, Chief Financial Officer Elaine M. Quinlan Director of Investor Relations TIMING Quarterly results for 1999 and 2000 will be announced according to the following anticipated schedule: Year End 1999 Early February First Quarter 2000 Early May Second Quarter 2000 Early August Third Quarter 2000 Early November 3
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 COMMON STOCK DATA (NYSE:BXP) Boston Properties' common stock is traded primarily on the New York Stock Exchange under the symbol: BXP. BXP's common stock has had the following characteristics: 3rd Quarter 1999 3rd Quarter 1998 ---------------- ---------------- High Price $ 35.6250 $ 34.6875 Low Price $ 30.3125 $ 23.8750 Closing Price $ 30.6875 $ 28.50 Dividends per share - annualized $ 1.80 $ 1.62 Closing dividend yield - annualized 5.87% 5.68% Closing shares, common units and preferred units (if converted) outstanding (thousands) 104,721 86,392 Closing market value of shares and units outstanding (thousands) $ 3,213,626 $ 2,524,037 4
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 FINANCIAL HIGHLIGHTS (UNAUDITED AND IN THOUSANDS) THREE MONTHS ENDED -------------------------------------------------- SEPTEMBER 30, 1999 SEPTEMBER 30, 1998 % CHANGE ------------------ ------------------ -------- INCOME ITEMS: Revenues $ 202,205 $ 140,177 44.25% Net Income available to common shareholders $ 27,418 $ 25,341 8.20% Funds from Operations $ 67,817 $ 55,763 21.62% Company's share (74.03% and 73.62%) $ 50,207 $ 41,053 22.30% Funds from Operations per share - basic $ 0.74 $ 0.65 14.31% Funds from Operations per share - diluted $ 0.72 $ 0.64 12.95% Dividends per share $ 0.450 $ 0.405 11.11% Ratios: Interest Coverage Ratio 2.50 2.71 -7.83% Dividend Payout Ratio 62.25% 62.61% -0.57% SEPTEMBER 30, 1999 DECEMBER 31, 1998 % CHANGE ------------------ ----------------- -------- CAPITALIZATION: Total Debt $ 3,277,763 $ 3,088,724 6.12% Total Common Shares Outstanding @ Quarter End 67,903 63,528 6.89% Total Preferred Shares Outstanding @ Quarter End (if converted) 2,625 - - Total Common Units Outstanding @ Quarter End 23,817 23,798 0.08% Total Preferred Units Outstanding @ Quarter End (if converted) 10,376 10,454 -0.75% Price @ Quarter End $ 30.6875 $ 30,500 0.61% Equity Value @ Quarter End $ 3,213,626 $ 2,982,294 7.76% Total Market Capitalization $ 6,491,389 $ 6,071,018 6.92% Debt/Total Market Capitalization 50.49% 50.88% -0.75% 5
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 CONSOLIDATED BALANCE SHEETS (UNAUDITED AND IN THOUSANDS) SEPTEMBER 30, 1999 DECEMBER 31, 1998 ------------------ ----------------- ASSETS Real Estate and equipment $ 5,084,503 $ 4,725,757 Land and development in progress 421,122 191,436 Less accumulated depreciation (441,575) (357,384) ----------- ----------- Total real estate and equipment 5,064,050 4,559,809 Cash 50,415 12,166 Escrows 25,886 19,014 Notes receivable -- 420,143 Tenant and other receivables 21,420 40,830 Accrued rental income 78,413 64,251 Deferred charges, net 49,590 46,029 Prepaid expenses and other assets 29,194 26,058 Investment in joint ventures 35,807 46,787 ----------- ----------- Total assets $ 5,354,775 $ 5,235,087 ----------- ----------- ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Mortgage notes payable $ 2,943,763 $ 2,653,581 Notes payable -- 420,143 Unsecured line of credit 334,000 15,000 Accounts payable and accrued expenses 49,070 42,897 Dividends payable 48,483 40,494 Accrued interest payable 9,611 7,307 Other liabilities 34,919 27,950 ----------- ----------- Total liabilities 3,419,846 3,207,372 ----------- ----------- Commitments and contingencies -- -- Minority interests 780,910 1,079,234 Series A Convertible Redeemable Preferred Stock, liquidation preference $50.00 per share, 2,000,000 shares issued and outstanding 100,000 -- Stockholders' Equity: Excess stock, $.01 par value, 150,000,000 shares authorized, none issued or outstanding -- -- Common stock, $.01 par value, 250,000,000 shares authorized, 67,902,967 and 63,527,819 issued and outstanding, respectively 679 635 Additional paid-in capital 1,068,050 955,711 Dividend in excess of earnings (14,710) (7,865) ----------- ----------- Total stockholders' equity 1,054,019 948,481 ----------- ----------- Total liabilities and stockholders' equity $ 5,354,775 $ 5,235,087 ----------- ----------- ----------- ----------- 6
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 CONSOLIDATED INCOME STATEMENTS (UNAUDITED AND IN THOUSANDS) THREE MONTHS ENDED ------------------------------------- 30-SEP-99 30-SEP-98 % CHANGE ----------- ----------- --------- Revenue: Rental Base Rent $ 166,582 $ 119,535 39.36% Recoveries from tenants 19,212 13,665 40.59% Parking and other 11,261 3,174 254.79% --------- --------- ------ Total rental revenue 197,055 136,374 44.50% Development and management services 3,706 2,734 35.55% Interest and other 1,444 1,069 35.08% --------- --------- ------ Total revenue 202,205 140,177 44.25% --------- --------- ------ Expenses: Rental expenses 66,665 43,255 54.12% General and administrative 7,383 6,129 20.46% Interest 51,768 33,183 56.01% Depreciation and amortization 31,078 21,523 44.39% --------- --------- ------ Total expenses 156,894 104,090 50.73% --------- --------- ------ Income before minority interests and before income from unconsolidated joint venture 45,311 36,087 25.56% Minority interest in property partnership (179) (161) 11.18% Income from unconsolidated joint venture 206 -- -- --------- --------- ------ Income before minority interest in Operating Partnership 45,338 35,926 26.20% Preferred distribution (6,649) (1,505) -- Minority interest in Operating Partnership (1) (9,617) (9,080) 5.91% --------- --------- ------ Income before preferred dividend 29,072 25,341 14.72% Preferred dividend (1,654) -- -- Net income available to common shareholders $ 27,418 $ 25,341 8.20% --------- --------- ------ --------- --------- ------ INCOME PER SHARE OF COMMON STOCK Net income per share - basic $ 0.40 $ 0.40 0.00% --------- --------- ------ --------- --------- ------ Net income per share - diluted $ 0.40 $ 0.40 0.00% --------- --------- ------ --------- --------- ------ - ---------- (1) Equals minority interest percent (25.97% and 26.38%, respectively) of income before minority interest in Operating Partnership after deduction for preferred dividends and distributions. 7
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 FUNDS FROM OPERATIONS (IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS) (UNAUDITED) THREE MONTHS ENDED --------------------------------- 30-SEP-99 30-SEP-98 % CHANGE --------- --------- -------- Income from operations before minority interests and before income from unconsolidated joint venture $ 45,311 $ 36,087 25.56% Add: Real estate depreciation and amortization 30,882 21,359 44.59% Income from unconsolidated joint venture 206 - Less: Gain on sale of land (68) - Minority property partnership's share of funds from operations (211) (178) 18.54% Preferred allocation (8,303) (1,505) - --------- --------- -------- Funds from Operations $ 67,817 $ 55,763 21.62% --------- --------- -------- --------- --------- -------- Funds from Operations available to common shareholders (1) $ 50,207 $ 41,053 22.30% --------- --------- -------- --------- --------- -------- Funds from Operations per share - basic $ 0.74 $ 0.65 14.31% --------- --------- -------- --------- --------- -------- Weighted average shares outstanding - basic 67,901 63,468 6.98% --------- --------- -------- --------- --------- -------- Funds from Operations per share - diluted $ 0.72 $ 0.64 12.50% --------- --------- -------- --------- --------- -------- Weighted average shares outstanding - diluted 81,485 63,991 27.34% --------- --------- -------- --------- --------- -------- - ---------- (1) Based on weighted average shares for the quarter. Company's share for the quarter ended 9/30/99 was 74.03% and 73.62% for the quarter ended 9/30/98. RECONCILIATION TO DILUTED FUNDS FROM OPERATIONS For the Three Months Ended September 30, 1999 --------------------------------------------- Income Shares Per Share (Numerator) (Denominator) Amount ----------- ------------- ------ Basic Funds from Operations $ 67,817 91,718 $ 0.74 Effect of Dilutive Securities Convertible Preferred Units 6,649 10,377 (0.01) Convertible Preferred Stock 1,654 2,625 - Stock Options - 583 (0.01) --------- ------------- ---------- Dilutive Funds from Operations (1) $ 76,120 105,303 $ 0.72 --------- ----------- ------- Company's share of Diluted Funds from Operations $ 58,902 81,485 $ 0.72 --------- ----------- ------- For the Three Months Ended September 30, 1998 --------------------------------------------- Income Shares Per Share (Numerator) (Denominator) Amount ----------- ------------- ------ Basic Funds from Operations $ 55,763 86,208 $ 0.65 Effect of Dilutive Securities Convertible Preferred Units - - - Convertible Preferred Stock - - - Stock Options - 524 (0.01) -------- ------ ------ Dilutive Funds from Operations (1) $ 55,763 86,732 $ 0.64 -------- ------ ------ Company's share of Diluted Funds from Operations $ 41,142 63,991 $ 0.64 -------- ------ ------ - ---------- (1) Based on weighted average diluted shares for the quarter. Company's share for the quarter ended 9/30/99 was 77.38% and 73.78% for the quarter ended 9/30/98. 8
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 FINANCIAL RATIOS THREE MONTHS ENDED SEPTEMBER 30, 1999 ------------------ RATIOS COMPUTED FOR INDUSTRY COMPARISONS: OPERATIONAL RATIOS (1,2) Debt Service Coverage Ratio 2.21 (EBITDA + Income from Unconsolidated Joint Ventures)/(Interest+Principal) Interest Coverage Ratio 2.50 (EBITDA + Income from Unconsolidated Joint Venture)/Interest Return on Shareholder's Equity 15.27% (EBITDA - Interest)/Average Equity (book value) (%) Return on Real Estate Investments 10.42% (EBITDA/Average Real Estate Investments (book value)) (%) FFO Payout Ratio 62.50% (Dividends Declared/FFO) (%) - ---------- (1) EBITDA is equal to earnings before interest, taxes, depreciation and amortization. (2) FFO is calculated based on the NAREIT White Paper. 9
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 CAPITAL STRUCTURE DEBT (IN THOUSANDS) AGGREGATE PRINCIPAL 30-SEP-99 --------- Mortgage Loans $ 2,943,763 Unsecured Line of Credit 334,000 ----------- Total Debt $ 3,277,763 ----------- ----------- EQUITY (IN THOUSANDS) COMMON SHARES & UNITS STOCK $ VALUE OUTSTANDING EQUIVALENTS EQUIVALENT (1) ----------- ----------- -------------- Common Stock 67,903 67,903 $ 2,083,773 Preferred Stock 2,000 2,625 80,555 Operating Partnership Units 23,817 23,817 730,884 Preferred Operating Partnership Units 8,713 10,376 318,414 ------- ----------- Total Equity 104,721 $ 3,213,626 ------- ----------- ------- ----------- Total Market Capitalization $ 6,491,389 ----------- ----------- - ---------- (1) Value based on September 30, 1999 closing price of $30.6875. 10
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 DEBT ANALYSIS LONG-TERM DEBT MATURITIES AND PRINCIPAL PAYMENTS (IN THOUSANDS) Year 1999 2000 2001 2002 2003 Thereafter Total - ---- ---- ---- ---- ---- ---- ---------- ----- Amount $ 7,751 642,230 150,011 407,913 212,874 1,856,984 $ 3,277,763 UNSECURED LINE OF CREDIT - DUE JUNE 23, 2000 (IN THOUSANDS) OUTSTANDING LETTERS OF REMAINING FACILITY @ 9/30/1999 CREDIT CAPACITY - -------- ----------- ------ -------- $ 500,000 334,000 25,297 $ 140,703 UNSECURED AND SECURED DEBT ANALYSIS WEIGHTED WEIGHTED AVERAGE % OF DEBT AVERAGE RATE MATURITY --------- ------------ -------- Unsecured Debt 10.19% 6.63% 0.7 years Secured Debt 89.81% 7.06% 6.4 years ------ ---- --- Total Debt 100.00% 7.01% 5.8 years ------ ---- --- ------ ---- --- FLOATING AND FIXED RATE DEBT ANALYSIS WEIGHTED WEIGHTED AVERAGE % OF DEBT AVERAGE RATE MATURITY --------- ------------ ---------------- Floating Rate Debt 13.67% 6.75% 1.0 years Fixed Rate Debt 86.33% 7.06% 6.5 years ------ ---- --- Total Debt 100.00% 7.01% 5.8 years ------ ---- --- ------ ---- --- 11
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 JOINT VENTURE ANALYSIS as of September 30, 1999 ONE ONE AND TWO MARKET FREEDOM RESTON SQUARE SQUARE OVERLOOK NORTH COMBINED ------- ------------ ------- -------- Total Equity (1) $ 5,340 $ 45 $30,422 $35,807 ------- ------- ------- ------- ------- ------- ------- ------- Mortgage/Construction loans payable (1) $10,781 $17,237 $20,903 $48,921 ------- ------- ------- ------- ------- ------- ------- ------- BXP's ownership percentage 25.00% 25.00% 50.00% ----- ----- ----- ----- ----- ----- (1) Represents the Company's share. RESULTS OF OPERATIONS FOR THE IN-SERVICE JOINT VENTURES for the quarter ended September 30, 1999 ONE AND TWO MARKET RESTON SQUARE OVERLOOK NORTH (1) COMBINED ----------- --------- -------- REVENUE Total rental revenue $2,976 $ 521 $3,497 Interest and other 9 59 68 ------ ------ ------ Total revenue 2,985 580 3,565 ------ ------ ------ EXPENSES Operating 414 360 774 Interest 626 211 837 Depreciation and amortization 621 259 880 ------ ------ ------ Total expenses 1,661 830 2,491 ------ ------ ------ Net income $1,324 $ (250) $1,074 ------ ------ ------ ------ ------ ------ (1) Represents the residential portion of the joint venture only. 12
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 PORTFOLIO OVERVIEW RENTABLE SQUARE FEET OF IN-SERVICE PROPERTIES BY LOCATION AND TYPE OF PROPERTY Geographic Area Office (1) R&D Industrial Total % of Total --------------- ---------- --- ---------- ----- ---------- Greater Boston 5,402,035 545,206 247,318 6,194,559 25.11% Greater Washington, D.C. 5,068,094 (2) 1,381,010 237,195 6,686,299 27.11% Greater San Francisco 4,496,989 143,930 280,213 4,921,132 19.95% Midtown Manhattan 2,874,854 - - 2,874,854 11.65% Princeton/East Brunswick, NJ 1,763,740 - - 1,763,740 7.15% Baltimore, MD 1,166,797 - - 1,166,797 4.73% Richmond, VA 899,717 - - 899,717 3.65% Bucks County, PA - - 161,000 161,000 0.65% ---------- --------- ------- ---------- ------ 21,672,226 2,070,146 925,726 24,668,098 100.00% ---------- --------- ------- ---------- ------ ---------- --------- ------- ---------- ------ % of Total 87.86% 8.39% 3.75% 100.00% (1) Includes retail square footage of approximately 1,000,000. (2) Includes 444,286 square feet at One and Two Reston Overlook which are 25% owned by Boston Properties. HOTEL PROPERTIES NUMBER OF SQUARE HOTEL PROPERTIES ROOMS 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 ----- ------- ----- ------- GARAGE PROPERTY AND STRUCTURED PARKING NUMBER OF SQUARE SPACES FEET ------ --------- Garage Properties Cambridge Center North Garage 1,170 332,442 Structured Parking 16,726 5,851,221 ------ --------- Total Garage Property and Structured Parking 17,896 6,183,663 ------ --------- ------ --------- 13
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 PORTFOLIO OVERVIEW PERCENTAGE OF PROPERTY FUNDS FROM OPERATIONS* FOR IN-SERVICE PROPERTIES BY LOCATION AND TYPE OF PROPERTY FOR THE QUARTER ENDED SEPTEMBER 30, 1999 GEOGRAPHIC AREA OFFICE (1) R&D INDUSTRIAL HOTEL GARAGE TOTAL --------------- ------ --- --- ---------- ----- ------ ----- Greater Boston 19.1% 0.8% 0.2% 6.9% 0.4% 27.4% Greater Washington, D.C. 20.6% 3.0% 0.2% n/a n/a 23.8% Greater San Francisco 18.9% 0.3% 0.2% n/a n/a 19.4% Midtown Manhattan 16.8% n/a n/a n/a n/a 16.8% Baltimore, MD 3.8% n/a n/a n/a n/a 3.8% Richmond, VA 3.0% n/a n/a n/a n/a 3.0% Princeton/East Brunswick, NJ 5.7% n/a n/a n/a n/a 5.7% Bucks County, PA n/a n/a 0.1% n/a n/a 0.1% ---- --- --- --- --- ----- Total 87.9% 4.1% 0.7% 6.9% 0.4% 100.0% ---- --- --- --- --- ----- ---- --- --- --- --- ----- (1) Includes Retail Center FFO (Prudential Center Boston and Embarcadero Center). * For this table, Property Funds from Operations is equal to GAAP basis property NOI which includes the effect of straight-line rent and excludes any deduction for interest expense. 14
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 OCCUPANCY ANALYSIS SAME PROPERTY OCCUPANCY - BY LOCATION LOCATION 30-SEP-99 30-SEP-98 - -------- --------- --------- Greater Boston, MA 97.7% 98.7% Greater Washington, D.C. 97.2% 98.3% Midtown Manhattan, NY 99.9% 99.6% Baltimore, MD 100.0% 99.7% Princeton/East Brunswick, NJ 98.9% 100.0% Richmond, VA 97.1% 98.8% Greater San Francisco, CA 94.6% 99.7% Bucks County, PA 100.0% 100.0% ----- ----- Total Portfolio 98.1% 99.0% ----- ----- ----- ----- SAME PROPERTY - BY TYPE OF PROPERTY 30-SEP-99 30-SEP-98 --------- --------- Total Office Portfolio 99.1% 99.5% Total R&D Portfolio 95.9% 97.6% Total Industrial Portfolio 90.4% 95.0% ---- ---- Total Portfolio 98.1% 99.0% ---- ---- ---- ---- 15
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 IN-SERVICE OFFICE PROPERTIES LEASE EXPIRATIONS ANNUALIZED RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES PERCENTAGE OF TOTAL EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS SQUARE FEET EXPIRING - ---------- --------------- --------------- -------------------- -------------------- 1999* 417,690 $ 16,436,536 $ 16,508,686 2.02% 2000 1,359,222 37,585,403 37,911,254 6.59% 2001 2,084,867 63,176,117 63,347,347 10.11% 2002 2,066,887 78,663,677 79,295,964 10.02% 2003 1,786,015 54,427,426 55,494,982 8.66% 2004 2,245,954 73,545,051 77,536,567 10.89% 2005 1,445,473 40,148,218 43,724,371 7.01% 2006 2,500,532 80,317,308 87,693,730 12.12% 2007 1,958,780 70,960,736 71,330,774 9.49% 2008 853,117 28,925,547 27,204,415 4.14% Thereafter 3,911,298 120,616,356 142,344,159 18.96% - ---------- * October 1, 1999 through December 31, 1999 OCCUPANCY BY LOCATION 30-SEP-99 30-SEP-98 --------- --------- Greater Boston, MA 97.6% 99.2% Greater Washington, D.C. 98.0% 99.7% Midtown Manhattan, NY 99.9% 99.7% Baltimore, MD 100.0% 99.2% Richmond, VA 97.1% 98.8% Princeton/East Brunswick, NJ 99.1% 100.0% Greater San Francisco, CA 97.9% n/a Bucks County, PA n/a n/a ----- ----- Total Office Portfolio 98.3% 98.9% ----- ----- ----- ----- 16
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 IN-SERVICE R&D PROPERTIES LEASE EXPIRATIONS ANNUALIZED RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES PERCENTAGE OF TOTAL EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS SQUARE FEET EXPIRING ---------- --------------- --------------- -------------------- -------------------- 1999* 108,137 $ 1,209,394 $ 1,209,394 5.36% 2000 465,041 4,809,147 4,817,831 23.06% 2001 199,344 2,274,651 2,348,896 9.89% 2002 349,746 4,722,873 4,874,672 17.35% 2003 70,152 836,942 855,259 3.48% 2004 72,593 983,302 1,093,791 3.60% 2005 148,330 1,999,167 2,152,281 7.36% 2006 150,000 1,708,004 1,820,504 7.44% 2007 107,895 2,239,757 2,291,792 5.35% 2008 - - - 0.01% Thereafter 345,209 5,481,741 6,694,020 17.12% - ---------- * October 1, 1999 through December 31, 1999 OCCUPANCY BY LOCATION 30-SEP-99 30-SEP-98 --------- --------- Greater Boston, MA 100.0% 100.0% Greater Washington, D.C. 94.0% 96.4% Midtown Manhattan, NY n/a n/a Baltimore, MD n/a n/a Richmond, VA n/a n/a Princeton/East Brunswick, NJ n/a n/a Greater San Francisco, CA 97.9% 99.0% Bucks County, PA n/a n/a ----- ----- Total R&D Portfolio 95.9% 98.2% ----- ----- ----- ----- 17
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 IN-SERVICE INDUSTRIAL PROPERTIES LEASE EXPIRATIONS ANNUALIZED RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES PERCENTAGE OF TOTAL EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS SQUARE FEET EXPIRING - ---------- --------------- ----------------- -------------------- -------------------- 1999* 70,029 $ 539,570 $ 539,570 8.37% 2000 249,280 1,380,551 1,380,551 29.80% 2001 70,829 361,882 361,882 8.47% 2002 - - - 0.00% 2003 147,305 972,805 1,036,857 17.61% 2004 195,076 946,510 974,928 23.32% 2005 20,500 125,065 140,199 2.45% 2006 - - - 0.00% 2007 - - - 0.00% 2008 83,608 728,226 728,226 9.98% Thereafter - - - 0.00% - ---------- * October 1, 1999 through December 31, 1999 OCCUPANCY BY LOCATION 30-SEP-99 30-SEP-98 --------- --------- Greater Boston, MA 93.0% 93.0% Greater Washington, D.C. 78.2% 87.8% Midtown Manhattan, NY n/a n/a Baltimore, MD n/a n/a Richmond, VA n/a n/a Princeton/East Brunswick, NJ n/a n/a Greater San Francisco, CA 92.9% 100.0% Bucks County, PA 100.0% 100.0% ----- ----- Total Industrial Portfolio 90.4% 95.0% ----- ----- ----- ----- 18
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 GRAND TOTAL OF ALL IN-SERVICE PROPERTIES LEASE EXPIRATION ANNUALIZED RENTABLE SQUARE CURRENT ANNUALIZED REVENUES UNDER YEAR OF LEASE FOOTAGE SUBJECT TO REVENUES UNDER EXPIRING LEASES PERCENTAGE OF TOTAL EXPIRATION EXPIRING LEASES EXPIRING LEASES WITH FUTURE STEP-UPS SQUARE FEET EXPIRING ---------- --------------- --------------- -------------------- -------------------- 1999* 595,856 $ 18,185,500 $ 18,257,650 2.54% 2000 2,073,543 43,775,101 44,109,636 8.83% 2001 2,355,040 65,812,650 66,058,125 10.03% 2002 2,416,633 83,386,550 84,170,636 10.29% 2003 2,003,472 56,237,173 57,387,098 8.53% 2004 2,513,623 75,474,863 79,605,286 10.70% 2005 1,614,303 42,272,450 46,016,851 6.87% 2006 2,650,532 82,025,312 89,514,234 11.29% 2007 2,066,675 73,200,493 73,622,566 8.80% 2008 936,725 29,653,773 27,932,641 3.99% Thereafter 4,256,507 126,098,097 149,038,179 18.13% * October 1, 1999 through December 31, 1999 OCCUPANCY BY LOCATION 30-SEP-99 30-SEP-98 --------- --------- Greater Boston, MA 97.6% 99.0% Greater Washington, D.C. 96.5% 98.5% Midtown Manhattan, NY 99.9% 99.6% Baltimore, MD 100.0% 99.2% Richmond, VA 97.1% 98.8% Princeton/East Brunswick, NJ 99.1% 100.0% Greater San Francisco, CA 97.6% 99.7% Bucks County, PA 100.0% 100.0% ----- ----- Total Portfolio 97.8% 98.5% ----- ----- ----- ----- 19
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 HOTEL PERFORMANCE SAME PROPERTY HOTELS Long Wharf Marriott - Boston THIRD QUARTER THIRD QUARTER PERCENT YTD YTD PERCENT 1999 1998 CHANGE 1999 1998 CHANGE ---- ---- ------ ---- ---- ------ Occupancy 92.90% 90.90% 2.20% 89.30% 89.00% 0.3% Average Daily Rate $ 267.80 $ 254.47 5.24% $ 238.67 $ 228.57 4.4% REVPAR $ 248.79 $ 231.31 7.56% $ 213.13 $ 203.43 4.8% CAMBRIDGE CENTER MARRIOTT THIRD QUARTER THIRD QUARTER PERCENT YTD YTD PERCENT 1999 1998 CHANGE 1999 1998 CHANGE ---- ---- ------ ---- ---- ------- Occupancy 88.50% 90.40% -2.10% 85.90% 86.10% -0.2% Average Daily Rate $ 200.33 $ 192.13 4.27% $ 187.70 $ 183.07 2.5% REVPAR $ 177.29 $ 173.69 2.07% $ 161.23 $ 157.62 2.3% TOTAL SAME PROPERTY HOTEL PERFORMANCE THIRD QUARTER THIRD QUARTER PERCENT YTD YTD PERCENT 1999 1998 CHANGE 1999 1998 CHANGE ---- ---- ------ ---- ---- ------ Occupancy 90.60% 90.60% 0.00% 87.50% 87.50% 0.0% Average Daily Rate $ 232.89 $ 222.21 4.81% $ 212.30 $ 205.03 3.5% REVPAR $ 211.79 $ 201.50 5.11% $ 186.28 $ 179.73 3.6% NEWLY PLACED-IN-SERVICE HOTEL Residence Inn by Marriott THIRD QUARTER THIRD QUARTER PERCENT YTD YTD PERCENT 1999 1998 CHANGE 1999 1998 CHANGE ---- ---- ------ ---- ---- ------ Occupancy 91.40% N/A N/A 83.90% N/A N/A Average Daily Rate $ 164.61 N/A N/A $ 155.59 N/A N/A REVPAR $ 150.45 N/A N/A $ 130.54 N/A N/A 20
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 SAME PROPERTY PERFORMANCE OFFICE, R&D, INDUSTRIAL AND HOTEL PROPERTIES OFFICE R&D INDUSTRIAL HOTEL GARAGE TOTAL ------ --- ---------- ----- ------ ----- Number of Properties 55 32 9 2 1 99 Square feet 11,640,240 2,070,146 925,726 750,400 332,442 15,718,954 Percent of in-service properties 53.7% 100.0% 100.0% 80.0% 100% 55.8% Occupancy @ 9/30/98 99.5% 97.6% 95.0% - - 99.0% Occupancy @ 9/30/99 99.1% 95.9% 90.4% - - 98.1% Percent change from 3rd quarter 1999 over 3rd quarter 1998: Revenue 4.9% 7.5% -8.7% 11.2% 62.6% 5.5% Expense 4.5% -10.0% -31.5% 28.6% 60.1% 4.2% Net Operating Income 5.0% 13.6% 0.9% 9.1% 63.4% 6.1% SAME PROPERTY LEASE ANALYSIS - QUARTER ENDED SEPTEMBER 30, 1999 OFFICE R&D INDUSTRIAL TOTAL ------ --- ---------- ----- Vacant space available @ 7/1/99 (sf) 133,997 74,896 89,099 297,992 Square footage of leases expiring or terminated 7/1/99-9/30/99 192,047 93,200 6,125 291,372 Total space for lease (sf) 326,044 168,096 95,224 589,364 New tenants (sf) 115,690 21,238 6,125 143,053 Renewals (sf) 98,909 60,881 - 159,790 Total space leased (sf) 214,599 82,119 6,125 302,843 Space available @ 9/30/99 (sf) 111,445 85,977 89,099 286,521 Net increase (decrease) in leased space (sf) 22,552 (11,081) - 11,471 Average lease term (months) 62 22 12 51 2nd generation TI/Comm PSF $ 8.01 $ 1.48 $ - $ 6.08 Increase in 2nd generation net rents (2) 37.7% 6.2% 0.0% 31.6% (1) For this table, Funds from Operations is equal to GAAP basis property NOI which includes the effect of straight-line rent and excludes any deduction for interest expense. (2) Represents increase in net rents on a "cash to cash" basis. (Actual net rent at time of expiration vs. initial net rent of new lease.) 21
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 ALL "IN-SERVICE" PROPERTIES - QUARTER ENDED SEPTEMBER 30, 1999 OFFICE R&D INDUSTRIAL TOTAL ------ --- ---------- ----- Vacant space available @ 7/1/99 (sf) 382,881 74,896 89,099 546,876 Square footage of leases expiring or terminated 7/1/99-9/30/99 347,318 93,200 6,125 446,643 ------------ ------------ ------------ ------------ Total space for lease (sf) 730,199 168,096 95,224 993,519 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ New tenants (sf) 298,905 21,238 6,125 326,268 Renewals (sf) 107,576 60,881 - 168,457 ------------ ------------ ------------ ------------ Total space leased (sf) 406,481 82,119 6,125 494,725 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Space available @ 9/30/99 (sf) 323,718 85,977 89,099 498,794 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Net increase/(decrease) in leased space (sf) 59,163 (11,081) - 48,082 Average lease term (months) 62 22 12 55 2nd generation TI/Comm PSF $ 13.35 $ 1.48 $ - $ 11.22 Increase in 2nd generation net rents (1) 43.37% 5.68% 0.00% 38.32% (1) Represents increase in net rents on a "cash to cash" basis (actual net rent at time of expiration vs. initial net rent of new lease). 22
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 HISTORICALLY GENERATED CAPITAL EXPENDITURES, TENANT IMPROVEMENT COSTS AND LEASING COMMISSIONS HISTORICAL CAPITAL EXPENDITURES 1993 1994 1995 1996 ---- ---- ---- ---- Recurring capital expenditures $1,547 $1,812 $1,618 $1,083 ------ ------ ------ ------ ------ ------ ------ ------ Hotel improvements, equipment upgrades and replacements $ 836 $1,917 $4,420 $3,041 ------ ------ ------ ------ ------ ------ ------ ------ 1/1-9/30 1997 1998 1999 ---- ---- ---- Recurring capital expenditures $1,125 $3,543 $6,838 ------ ------ ------ ------ ------ ------ Hotel improvements, equipment upgrades and replacements $2,625 $3,872 $1,702 ------ ------ ------ ------ ------ ------ 2ND GENERATION TENANT IMPROVEMENTS AND LEASING COMMISSIONS 1993 1994 1995 1996 ---- ---- ---- ---- Office Square feet 451,295 690,459 768,459 970,072 ----------- ----------- ----------- ----------- Tenant improvement and lease commissions p.s.f $ 8.45 $ 9.45 $ 10.66 $ 11.40 ----------- ----------- ----------- ----------- R&D Square feet 166,957 276,332 177,073 337,676 ----------- ----------- ----------- ----------- Tenant improvement and lease commissions p.s.f $ 5.53 $ 0.68 $ 6.99 $ 10.45 ----------- ----------- ----------- ----------- Industrial Square feet 241,500 132,521 308,388 128,148 ----------- ----------- ----------- ----------- Tenant improvement and lease commissions p.s.f $ 0.28 $ 3.32 $ 1.00 $ 1.71 ----------- ----------- ----------- ----------- Average tenant improvement and lease commission p.s.f $ 5.59 $ 6.51 $ 7.77 $ 10.31 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 1/1-9/30 1997 1998 1999 ---- ---- ---- Office Square feet 1,016,427 648,291 1,461,987 ---------- -------- ---------- Tenant improvement and lease commissions p.s.f. $ 10.83 $ 9.82 $ 10.79 ---------- -------- ---------- R&D Square feet 169,878 113,428 109,120 ---------- -------- ---------- Tenant improvement and lease commissions p.s.f. $ 2.22 $ 3.32 $ 1.52 ---------- -------- ---------- Industrial Square feet 258,795 320,608 100,058 ---------- -------- ---------- Tenant improvement and lease commissions p.s.f. $ 0.99 $ 1.13 $ 0.49 ---------- -------- ---------- Average tenant improvement and lease commission p.s.f. $ 8.06 $ 6.57 $ 9.57 ---------- -------- ---------- ---------- -------- ---------- 23
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 VALUE CREATION PIPELINE - ACQUISITIONS/REPOSITIONING AS OF SEPTEMBER 30, 1999 ANTICIPATED INITIAL FUTURE PROPERTY DATE ACQUIRED SQUARE FEET INVESTMENT INVESTMENT -------- ------------- ----------- ---------- ---------- ACQUISITIONS CLASS A OFFICE BUILDINGS Embarcadero Center Nov-98/Feb-99 4,009,536 $ 1,216,000,000 $ 37,710,000 Sumner Square Mar-99 205,391 32,600,000 3,500,000 510 Carnegie Center Apr-99 234,160 48,000,000 - 206 Carnegie Center Jul-99 161,763 27,000,000 - The Gateway Aug-99 487,453 117,600,000 2,500,000 ---------- ---------------- ------------- TOTAL VALUE CREATION PIPELINE - 5,098,303 $ 1,441,200,000 $ 43,710,000 ---------- ---------------- ------------- ---------- ---------------- ------------- ACQUISITIONS TOTAL CURRENT PROPERTY INVESTMENT OCCUPANCY -------- ---------- --------- ACQUISITIONS CLASS A OFFICE BUILDINGS Embarcadero Center $1,253,710,000 98% Sumner Square 36,100,000 67% 510 Carnegie Center 48,000,000 100% 206 Carnegie Center 27,000,000 100% The Gateway 120,100,000 96% -------------- --- TOTAL VALUE CREATION PIPELINE - ACQUISITIONS $1,484,910,000 97% -------------- --- -------------- --- REPOSITIONS PLACED IN SERVICE DURING 1999 ANTICIPATED DATE PLACED INITIAL ADDITIONAL TOTAL PERCENT IN SERVICE SQUARE FEET INVESTMENT COSTS TO DATE INVESTMENT LEASED ---------- ----------- ---------- ------------- ---------- ------ CLASS A OFFICE BUILDING 1301 New York Avenue Feb-99 177,249 $ 28,000,000 $ 14,313,912 $ 47,800,000 100% 24
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 VALUE CREATION PIPELINE - CONSTRUCTION IN PROGRESS AS OF SEPTEMBER 30, 1999 ESTIMATED PLACED ANTICIPATED CURRENT IN SERVICE # OF SQUARE INVESTMENT TOTAL PERCENTAGE DEVELOPMENT PROPERTIES DATE LOCATION BUILDINGS FEET TO DATE INVESTMENT LEASED (3) - ---------------------- ---------- -------- --------- ------- ------- ---------- ---------- CLASS A OFFICE BUILDINGS 181 Spring Street Q41999 Lexington, MA 1 53,306 $ 10,505,487 $ 12,000,000 41% One Freedom Square (25% ownership) Q4 1999 Reston, VA 1 406,980 16,079,000 20,750,000(1) 90% 502 Carnegie Center Q4 1999 Princeton, NJ 1 114,910 14,345,690 19,300,000 95% Orbital Sciences Phase I - Building 1 & 2 Q2 2000 Loudon, VA 2 185,028 11,671,902 33,100,000 100% Market Square North (50% ownership) Q4 2000 Washington, DC 1 409,843 52,128,874 70,829,000(2) 25% New Dominion Tech Park - Building 1 Q4 2000 Herndon, VA 1 235,201 8,688,952 48,800,000 100% 302 Carnegie Center Q4 2000 Princeton, NJ 1 64,565 1,720,685 12,900,000 0% 111 Huntington Avenue - Prudential Center Q3 2001 Boston, MA 1 890,000 60,340,600 290,000,000 28%(4) 5 Times Square Q4 2001 New York, NY 1 1,099,154 174,612,011 545,000,000 100% -- --------- -------------- -------------- --- TOTAL DEVELOPMENT PROPERTIES 10 3,458,987 $ 350,093,201 $1,052,679,000 68% -- --------- -------------- -------------- --- -- --------- -------------- -------------- --- DEVELOPMENTS PLACED-IN-SERVICE DURING 1999 PLACED # OF INVESTMENT TOTAL PERCENTAGE IN SERVICE DATE LOCATION BUILDINGS SQUARE FEET TO DATE INVESTMENT LEASED (3) --------------- -------- --------- ----------- ----------- ---------- ---------- CLASS A OFFICE BUILDINGS One and Two Reston Overlook (25% ownership) Q1-Q2 1999 Reston, VA 2 444,286 $ 15,781,510 $ 15,812,500 (1) 100% 200 West Street Q2 1999 Waltham, MA 1 248,341 40,611,184 47,000,000 95% Eight Cambridge Center Q2 1999 Cambridge, MA 1 177,226 26,067,695 26,400,000 100% The Arboretum Q2 1999 Reston, VA 1 95,584 14,761,225 15,200,000 100% HOTELS Residence Inn by Marriott Q1 1999 Cambridge, MA 1 187,474 27,238,376 32,000,000 n/a -- --------- ------------ ------------ --- TOTAL 6 1,152,911 $124,459,990 $136,412,500 99% -- --------- ------------ ------------ --- -- --------- ------------ ------------ --- (1) Represents 25% of the total anticipated project-level investment. (2) Represents 50% of the total anticipated project-level investment including residential. (3) As of October 18, 1999. (4) 29% of available office space. 25
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 VALUE CREATION PIPELINE - OWNED LAND PARCELS AS OF SEPTEMBER 30, 1999 NO. OF DEVELOPABLE LOCATION PARCELS ACREAGE SQUARE FEET - -------- ------- ------- ----------- S. San Francisco, CA 2 3.6 275,000 Andover, MA 2 19.9 230,000 Boston, MA 4 2.5 839,000 Waltham, MA 2 32.0 418,000 Rockville, MD 7 128.3 2,331,000 Dulles, VA 6 91.1 1,400,000 Herndon, VA 1 17.0 238,558 Reston, VA 2 8.8 775,000 Springfield, VA 3 9.4 130,000 -- ----- --------- 29 312.6 6,636,558 -- ----- --------- -- ----- --------- VALUE CREATION PIPELINE - LAND PURCHASE OPTIONS AS OF SEPTEMBER 30, 1999 NO. OF DEVELOPABLE LOCATION PARCELS ACREAGE SQUARE FEET - -------- ------- ------- ----------- Princeton, NJ 14 149.9 1,921,335 Cambridge, MA 1 2.6 209,000 New York, NY 1 0.5 1,194,918 --- ----- --------- 16 153.0 3,325,253 --- ----- --------- --- ----- --------- 26
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 ACQUISITION PROPERTY PROFILE PROPERTY NAME: The Gateway PRODUCT TYPE: Class A Office & Development Sites LOCATION: South San Francisco, CA DESCRIPTION: Two class A office buildings - Building 601 - 12 stories 207,234 square feet Building 681 - 16 stories 280,219 square feet Entitlements to build additional 275,000 square feet of buildings SIZE: 487,453 net rentable square feet YEAR CONSTRUCTED: 1984/1986 PURCHASE PRICE: $117.6 million CLOSING DATE: August 31, 1999 FUTURE INVESTMENT: $2.5 million OCCUPANCY LEVEL: 96% NUMBER OF TENANTS: 43 FUNDING SOURCE: Line of Credit and Note Payable LARGEST TENANT: COMPANY: Cellular One SIZE: 185,451 s.f. LEASE EXPIRATION: 10/2003 27
BOSTON PROPERTIES, INC. THIRD QUARTER 1999 ACQUISITION PROPERTY PROFILE PROPERTY NAME: 206 Carnegie Center PRODUCT TYPE: Class A Office Building LOCATION: Carnegie Center, Princeton, NJ DESCRIPTION: 5 Stories of Class A Office Space SIZE: 161,763 net rentable square feet YEAR CONSTRUCTED: 1998 PURCHASE PRICE: $27 million CLOSING DATE: July 9, 1999 FUTURE INVESTMENT: $ -- OCCUPANCY LEVEL: 100% NUMBER OF TENANTS: 1 FUNDING SOURCE: Cash LARGEST TENANT: Covance, Inc. COMPANY: Covance, Inc. SIZE: 161,763 s.f. LEASE EXPIRATION: 01/2014 28
Exhibit 99.2 BOSTON PROPERTIES, INC. 800 BOYLSTON STREET, SUITE 400 BOSTON, MA 02199 (NYSE: BXP) AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD - -------------- -------------------------------- Elaine Quinlan Marianne Stewart - General Info. (212) 661-8030 Investor Relations Claire Koeneman - Analyst (312) 266-7800 (617) 236-3300 Judith Sylk-Siegel - Media (212) 661-8030 IMMEDIATE RELEASE: - ------------------ October 25, 1999 BOSTON PROPERTIES, INC. ANNOUNCES THIRD QUARTER 1999 RESULTS ------------------------------------------------------------ REPORTS FFO OF $0.72 PER SHARE ------------------------------ BOSTON, MA, OCTOBER 25, 1999 -- Boston Properties, Inc. (NYSE: BXP) today reported results for the third quarter and nine months ended September 30, 1999. Funds from Operations (FFO) for the quarter ended September 30, 1999 were $50.2 million, or $0.74 per share basic and $0.72 per share diluted, compared to FFO of $41.1 million, or $0.65 per share basic and $0.64 per share diluted, for the quarter ended September 30, 1998. This represents a 12.5% year-to-year increase in diluted FFO per share. The weighted average number of basic and diluted shares outstanding totaled 67,900,734 and 81,485,166, respectively, for the quarter ended September 30, 1999 and 63,467,722 and 63,991,255, respectively, for the same quarter last year. FFO for the nine months ended September 30, 1999 were $144.6 million, or $2.20 per share basic and $2.15 per share diluted, compared to FFO of $109.5 million, or $1.82 per share basic and $1.80 per share diluted, for the nine months ended September 30, 1998. This represents a 19.4% year-to-year increase in diluted FFO per share. The weighted average number of basic and diluted shares outstanding totaled 65,672,095 and 76,674,436, respectively, for the nine months ended September 30, 1999 and 60,101,500 and, 60,743,896, respectively, for the same period last year. Revenues were $202.2 million for the quarter and $581.5 million for the nine months ended September 30, 1999, compared to revenues of $140.2 million and $343.8 million for the same periods in 1998. Net income available to common shareholders was $27.4 million for the quarter and $79.6 million for the nine months ended September 30, 1999, compared to $25.3 - - MORE - -
Boston Properties, Inc. Announces Third Quarter 1999 Results October 25, 1999 Page 2 million and $74.9 million for the same periods in 1998. Net income per share available to common shareholders for the quarter ended September 30, 1999 and 1998 was $0.40 per share basic and diluted. Income per share before extraordinary gain for the nine months ended September 30, 1999 was $1.21 per share basic and $1.20 per share diluted, compared to $1.19 per share basic and $1.17 per share diluted for the same period last year. The reported results are unaudited and there can be no assurance that the results will not vary from the final information for the quarter ended September 30, 1999. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made. As of September 30, 1999, the Company's portfolio consisted of 132 properties comprised of more than 35.3 million square feet, including 10 properties under development totaling 3.5 million square feet. The overall occupancy rate for the properties in service as of September 30, 1999 was 97.8%. Additional highlights of the third quarter include: - - Acquisition of 206 Carnegie Center, a 161,763 net rentable square foot Class A office building in Princeton, New Jersey for $27.0 million on July 9, 1999. The property is currently 100% leased. - - Acquisition of the leasehold interest and ground rent credits at 5 Times Square in New York, New York for approximately $152.5 million. The development will consist of a 37-floor, 1.1 million square foot office tower that has been 100% pre-leased to Ernst & Young. - - Acquisition of The Gateway, two Class A office buildings with 487,453 net rentable square feet and two development sites for approximately $117.6 million on August 31, 1999, in South San Francisco, California. The two office buildings are currently 96.0% leased. - - Closing of mortgage financing secured by Eight Cambridge Center in the amount of $29.0 million at a rate of 7.73% and maturing in July 2010. - - Closing of mortgage financing secured by The Gateway in the amount of $75.0 million at a rate of LIBOR + 1.60% and maturing in September 2000. - - Closing of a construction loan secured by the 111 Huntington Avenue development in the amount of $203.0 million at a rate of LIBOR + 2.00% and maturing in September 2002. - - Closing of a construction loan secured by the Orbital Sciences Phase I development in the amount of $27.0 million at a rate of LIBOR + 1.65% and maturing in August 2002. - - MORE - -
Boston Properties, Inc. Announces Third Quarter 1999 Results October 25, 1999 Page 3 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 the Northeast Corridor from Virginia to Greater Boston and in Greater San Francisco. To receive Boston Properties' latest news and corporate developments via fax at no cost, please call 1-800-PRO-INFO; use Company code BXP. Visit the Company's web site at http://www.bostonproperties.com. Also visit http://www.frbinc.com. THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE FEDERAL SECURITIES LAWS. FORWARD-LOOKING STATEMENTS ARE INHERENTLY SUBJECT TO RISKS AND UNCERTAINTIES, MANY OF WHICH CANNOT BE PREDICTED WITH ACCURACY. ACQUISITIONS THAT ARE PURSUED BY BOSTON PROPERTIES MAY NOT BE CONSUMMATED FOR A VARIETY OF REASONS, INCLUDING A FAILURE TO REACH AGREEMENT WITH THE SELLING PARTY REGARDING THE ACQUISITION PRICE OR OTHER TERMS OF A CONTRIBUTION OR ACQUISITION AGREEMENT. AGREEMENTS THAT THE COMPANY ENTERS INTO MAY BE TERMINATED FOR A VARIETY OF REASONS, INCLUDING A FAILURE BY THE COMPANY OR THE OTHER PARTY TO FULFILL ALL CONDITIONS REQUIRED FOR CONSUMMATION OF THE AGREEMENTS. Financial tables follow. ###
BOSTON PROPERTIES, INC. FUNDS FROM OPERATIONS Three months Three months Nine months Nine months ended ended ended ended September 30, September 30, September 30, September 30, 1999 1998 1999 1998 ------------- ------------- ------------- ------------- (unaudited and in thousands) Income before minority interests $ 45,311 $ 36,087 $ 136,058 $ 96,744 Add: Real estate depreciation and amortization 30,882 21,359 87,669 50,718 Income from unconsolidated joint venture 206 -- 648 -- Less: Gain on sale of land (68) -- (68) -- Minority property partnership's share of Funds from Operations (211) (178) (3,502) (460) Preferred allocation (8,303) (1,505) (23,808) (1,505) --------- --------- --------- --------- Funds from operations $ 67,817 $ 55,763 $ 196,997 $ 145,497 --------- --------- --------- --------- --------- --------- --------- --------- Funds from operations available to common shareholders $ 50,207 $ 41,053 $ 144,569 $ 109,472 --------- --------- --------- --------- --------- --------- --------- --------- Weighted average shares outstanding - basic 67,901 63,468 65,672 60,102 --------- --------- --------- --------- --------- --------- --------- --------- Per share - basic $ 0.74 $ 0.65 $ 2.20 $ 1.82 --------- --------- --------- --------- --------- --------- --------- --------- Weighted average shares outstanding - diluted 81,485 63,991 76,674 60,744 --------- --------- --------- --------- --------- --------- --------- --------- Per share - diluted $ 0.72 $ 0.64 $ 2.15 $ 1.80 --------- --------- --------- --------- --------- --------- --------- ---------
BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------------- ---------------------- 1999 1998 1999 1998 --------- --------- --------- --------- (UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Revenue Rental: Base rent $ 166,582 $ 119,535 $ 476,261 $ 286,610 Recoveries from tenants 19,212 13,665 53,878 33,027 Parking and other 11,261 3,174 34,272 5,880 --------- --------- --------- --------- Total rental revenue 197,055 136,374 564,411 325,517 Development and management services 3,706 2,734 11,364 8,893 Interest and other 1,444 1,069 5,710 9,410 --------- --------- --------- --------- Total revenue 202,205 140,177 581,485 343,820 --------- --------- --------- --------- Expenses Operating 66,665 43,255 184,321 97,188 General and administrative 7,383 6,129 21,345 16,750 Interest 51,768 33,183 151,446 81,926 Depreciation and amortization 31,078 21,523 88,315 51,212 --------- --------- --------- --------- Total expenses 156,894 104,090 445,427 247,076 --------- --------- --------- --------- Income before minority interests and joint venture income 45,311 36,087 136,058 96,744 Minority interests in property partnerships (179) (161) (4,473) (390) Income from unconsolidated joint venture 206 -- 648 -- --------- --------- --------- --------- Income before minority interest in Operating Partnership 45,338 35,926 132,233 96,354 Minority interest in Operating Partnership (16,266) (10,585) (48,483) (25,025) --------- --------- --------- --------- Income before extraordinary item 29,072 25,341 83,750 71,329 Extraordinary gain, net -- -- -- 3,564 --------- --------- --------- --------- Income before preferred dividend 29,072 25,341 83,750 74,893 Preferred dividend (1,654) -- (4,175) -- --------- --------- --------- --------- Net income available to common shareholders $ 27,418 $ 25,341 $ 79,575 $ 74,893 --------- --------- --------- --------- --------- --------- --------- --------- Basic earnings per share: Income before extraordinary gain $ 0.40 $ 0.40 $ 1.21 $ 1.19 Extraordinary gain, net -- -- -- 0.06 --------- --------- --------- --------- Net income available to common shareholders $ 0.40 $ 0.40 $ 1.21 $ 1.25 --------- --------- --------- --------- --------- --------- --------- --------- Weighted average number of common shares outstanding 67,901 63,468 65,672 60,101 --------- --------- --------- --------- --------- --------- --------- --------- Diluted earnings per share: Income before extraordinary gain $ 0.40 $ 0.40 $ 1.20 $ 1.17 Extraordinary gain, net -- -- -- 0.06 --------- --------- --------- --------- Net income available to common shareholders $ 0.40 $ 0.40 $ 1.20 $ 1.23 --------- --------- --------- --------- --------- --------- --------- --------- Weighted average number of common and common equivalent shares outstanding 68,484 63,991 66,280 60,744 --------- --------- --------- --------- --------- --------- --------- ---------
BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, DECEMBER 31, 1999 1998 ------------- ------------ (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AMOUNTS) ASSETS Real estate: $ 5,505,625 $ 4,917,193 Less: accumulated depreciation (441,575) (357,384) ----------- ----------- Total real estate 5,064,050 4,559,809 Cash and cash equivalents 50,415 12,166 Notes receivable -- 420,143 Escrows 25,886 19,014 Tenant and other receivables, net 21,420 40,830 Accrued rental income, net 78,413 64,251 Deferred charges, net 49,590 46,029 Prepaid expenses and other assets 29,194 26,058 Investments in joint ventures 35,807 46,787 ----------- ----------- Total assets $ 5,354,775 $ 5,235,087 ----------- ----------- ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Mortgage notes payable $ 2,943,763 $ 2,653,581 Notes payable -- 420,143 Unsecured line of credit 334,000 15,000 Accounts payable and accrued expenses 49,070 42,897 Dividends payable 48,483 40,494 Accrued interest payable 9,611 7,307 Other liabilities 34,919 27,950 ----------- ----------- Total liabilities 3,419,846 3,207,372 ----------- ----------- Commitments and contingencies -- -- Minority interests 780,910 1,079,234 Series A Convertible Redeemable Preferred Stock, liquidation preference $50.00 per share, 2,000,000 shares issued and outstanding 100,000 -- Stockholders' equity: Excess stock, $.01 par value, 150,000,000 shares authorized, none issued or outstanding -- -- Common stock, $.01 par value, 250,000,000 shares authorized, 67,902,967 and 63,527,819 issued and outstanding in 1999 and 1998, respectively 679 635 Additional paid-in capital 1,068,050 955,711 Dividends in excess of earnings (14,710) (7,865) ----------- ----------- Total stockholders' equity 1,054,019 948,481 ----------- ----------- Total liabilities and stockholders' equity $ 5,354,775 $ 5,235,087 ----------- ----------- ----------- -----------
BOSTON PROPERTIES, INC PORTFOLIO OCCUPANCY Occupancy by Location September 30, 1999 December 31, 1998 ------------------ ----------------- Greater Boston 97.6% 97.0% Greater Washington, DC 96.5% 98.5% Midtown Manhattan 99.9% 99.9% Baltimore, MD 100.0% 99.8% Richmond, VA 97.1% 98.8% Princeton/East Brunswick, NJ 99.1% 98.7% Greater San Francisco 97.6% 98.5% Bucks County, PA 100.0% 100.0% ------------------ ----------------- Total Portfolio 97.8% 98.4% ------------------ ----------------- ------------------ ----------------- Occupancy by Type September 30, 1999 December 31, 1998 ------------------ ----------------- Class A Office Portfolio 98.3% 98.8% R&D Portfolio 95.9% 99.2% Industrial Portfolio 90.4% 89.3% ------------------ ----------------- Total Portfolio 97.8% 98.4% ------------------ ----------------- ------------------ -----------------