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Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 30, 2018

BOSTON PROPERTIES, INC.

BOSTON PROPERTIES LIMITED

PARTNERSHIP

(Exact Name of Registrants As Specified in its Charter)


Boston Properties, Inc.	Delaware	1-13087	04-2473675
	(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Boston Properties Limited Partnership	Delaware	0-50209	04-3372948
	(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

800 Boylston Street, Suite 1900, Boston, Massachusetts 02199

(Address of Principal Executive Offices) (Zip Code)

(617) 236-3300

(Registrants’ telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions (see General Instruction A.2. below):

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Emerging growth company ☐

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

Item 2.02.

Results of Operations and Financial Condition.

The information in this Item 2.02 - “Results of Operations and Financial Condition” is being furnished. Such information, including Exhibits 99.1 and 99.2 hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

On January 30, 2018, Boston Properties, Inc. (the “Company”), the general partner of Boston Properties Limited Partnership, issued a press release announcing its financial results for the fourth quarter of 2017. That press release referred to certain supplemental information that is available on the Company’s website. The text of the supplemental information and the press release are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.

Item 9.01.

Financial Statements and Exhibits.

(d)	Exhibits.


Exhibit No.		Description

*99.1		Boston Properties, Inc. Supplemental Operating and Financial Data for the quarter ended December 31, 2017.

*99.2		Press release dated January 30, 2018.

*	Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.


BOSTON PROPERTIES, INC.

By:		/s/ Michael E. LaBelle
		Michael E. LaBelle
		Executive Vice President, Chief Financial Officer and Treasurer

BOSTON PROPERTIES LIMITED PARTNERSHIP
By:		Boston Properties, Inc., its General Partner

By:		/s/ Michael E. LaBelle
		Michael E. LaBelle
		Executive Vice President, Chief Financial Officer and Treasurer

Date: January 30, 2018

Exhibit 99.1

Exhibit 99.1

LOGO

Supplemental Operating and Financial Data

for the Quarter Ended December 31, 2017

LOGO

FOURTH QUARTER 2017

Table of Contents


	Page
Company Profile		3
Investor Information		4
Research Coverage		5
Guidance and Assumptions		6
Financial Highlights		7-8
Consolidated Balance Sheets		9
Consolidated Income Statements		10
Funds From Operations		11
Funds Available for Distribution		12
Interest Coverage Ratios		13
Capital Structure		14
Debt Analysis		15-16
Unconsolidated Joint Ventures		17-18
Consolidated Joint Ventures		19-20
Reconciliation of Net Income Attributable to Boston Properties, Inc. Common Shareholders to Same Property Performance		21-22
Same Property Net Operating Income by Reportable Segment		23
Residential and Hotel Performance		24
Capital Expenditures, Tenant Improvements and Leasing Commissions		25
Portfolio Overview		26
In-Service Property Listing		27-29
Occupancy by Location		30
Top 20 Tenants and Tenant Diversification		31
Aggregate Lease Expiration Roll Out		32
Boston Lease Expiration Roll Out		33-34
New York Lease Expiration Roll Out		35-36
San Francisco and Los Angeles Lease Expiration Roll Out		37-38
Washington, DC Lease Expiration Roll Out		39-40
CBD/Suburban Lease Expiration Roll Out		41-42
Leasing Activity		43
Acquisitions/Dispositions		44
Value Creation Pipeline - Construction in Progress		45
Value Creation Pipeline - Land Parcels and Purchase Options		46
Definitions		47-48

This supplemental package contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “budgeted,” “estimates,” “expects,” “guidance,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “will” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond Boston Properties’ control and could materially affect actual results, performance or achievements. These factors include, without limitation, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the ability of our joint venture partners to satisfy their obligations, the costs and availability of financing, the effectiveness of our interest rate hedging programs, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Company’s accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of issuance of this report and are not guarantees of future results, performance or achievements. Boston Properties does not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

(Cover photo: Rendering of 7750 Wisconsin Avenue (Marriott International Headquarters), Bethesda, MD)

LOGO

FOURTH QUARTER 2017

COMPANY PROFILE

The Company

Boston Properties, Inc. (“Boston Properties,” “BXP” or the “Company”), a self-administered and self-managed real estate investment trust (REIT), is one of the largest owners, managers, and developers of Class A office properties in the United States, with a significant presence in five markets: Boston, Los Angeles, New York, San Francisco and Washington, DC. The Company was founded in 1970 by Mortimer B. Zuckerman and Edward H. Linde in Boston, where it maintains its headquarters. Boston Properties became a public company in June 1997. Boston Properties is a fully integrated real estate investment trust that develops, redevelops, acquires, manages, operates and owns a diverse portfolio of primarily Class A office space totaling 50.3 million square feet and consisting of 167 office properties (including eight properties under construction/redevelopment), six residential properties (including four properties under construction), five retail properties, and one hotel. Boston Properties is well-known for its in-house building management expertise and responsiveness to tenants’ needs. The Company holds a superior track record in developing premium Central Business District (CBD) office buildings, successful mixed-use complexes, suburban office centers and build-to-suit projects for a diverse array of creditworthy tenants.

Management

Boston Properties’ senior management team is among the most respected and accomplished in the REIT industry. Our deep and talented team of 36 individuals averages 30 years of real estate experience and 19 years with Boston Properties. We believe that our size, management depth, financial strength, reputation, and relationships of key personnel provide a competitive advantage to realize growth through property development and acquisitions. Boston Properties benefits from the reputation and relationships of key personnel, including Owen D. Thomas, Chief Executive Officer; Douglas T. Linde, President; Raymond A. Ritchey, Senior Executive Vice President; and Michael E. LaBelle, Executive Vice President, Chief Financial Officer and Treasurer. Our senior management team’s national reputation helps us attract business and investment opportunities. In addition, our other executive officers that serve as Regional Managers have strong reputations that assist in identifying and closing on new opportunities, having opportunities brought to us, and in negotiating with tenants and build-to-suit prospects. Additionally, Boston Properties’ Board of Directors consists of 11 distinguished members, the majority of whom are Independent Directors.

Strategy

Boston Properties’ primary business objective is to maximize return on investment in an effort to provide its investors with the greatest possible total return in all points of the economic cycle. To achieve this objective, the Company maintains consistent strategies that include the following:

•

concentrating on select targeted markets 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 - currently Boston, Los Angeles, New York, San Francisco and Washington, DC;

•

investing in the highest quality buildings (primarily office) with unique amenities and locations that are able to maintain high occupancy and achieve premium rental rates through economic cycles;

•

in our core markets, maintaining scale and a full-service real estate capability (leasing, development, construction and property management) to ensure we (1) see all relevant investment deal flow, (2) maintain an ability to execute on all types of real estate opportunities, such as acquisitions, dispositions, repositioning and development, throughout the real estate investment cycle and (3) provide superior service to our tenants;

•

be astute in market timing for investment decisions by acquiring properties in times of opportunity, developing into economic growth and selectively selling assets at attractive prices, resulting in continuous portfolio refreshment;

•

taking on complex, technically challenging development projects that leverage the skills of our management team to successfully develop, acquire, and reposition properties;

•

exploring joint-venture opportunities with partners who seek to benefit from our depth of development and management expertise;

•

ensuring a strong balance sheet to maintain consistent access to capital and the resultant ability to make opportunistic investments; and

•

fostering a culture and reputation of integrity and fair dealing, making us the counterparty of choice for tenants and real estate industry participants and employer of choice for talented real estate professionals.


Snapshot
(as of December 31, 2017)
Corporate Headquarters		Boston, Massachusetts
Markets		Boston, Los Angeles, New York, San Francisco and Washington, DC
Fiscal Year-End		December 31
Total Properties (includes unconsolidated joint ventures)		179
Total Square Feet (includes unconsolidated joint ventures)		50.3 million
Common shares outstanding, plus common units and LTIP units (other than unearned Multi-Year Long-Term Incentive Program (“MYLTIP”) Units) on an as-converted basis (1)		172.0 million
Dividend - Quarter/Annualized (2)		$0.80/$3.20
Dividend Yield		2.46%
Consolidated Market Capitalization		$32.8 billion
BXP’s Share of Market Capitalization (3)		$32.2 billion
Senior Debt Ratings		A- (S&P); BBB+ (Fitch); Baa2 (Moody’s)

(1)	For additional detail, see page 14.

(2)	The Company increased its regular quarterly cash dividend to $0.80 from $0.75 per share of common stock beginning with the period from October 1, 2017 to December 31, 2017.

(3)	For the Company’s definition of BXP’s Share of Market Capitalization and related disclosures, see page 47. For a reconciliation of Consolidated Market Capitalization to BXP’s Share of Market Capitalization, see page 14.

LOGO

FOURTH QUARTER 2017

INVESTOR INFORMATION


Board of Directors		Management
Joel I. Klein	Dr. Jacob A. Frenkel	Raymond A. Ritchey	John F. Powers
Lead Independent Director	Director, Chair of Nominating & Corporate Governance Committee	Senior Executive Vice President	Executive Vice President, New York Region

Owen D. Thomas		Michael E. LaBelle	Frank D. Burt
Chief Executive Officer and Director	Matthew J. Lustig Director	Executive Vice President, Chief Financial Officer and Treasurer	Senior Vice President, General Counsel

Douglas T. Linde
President and Director	Alan J. Patricof	Peter D. Johnston	Michael R. Walsh
	Director	Executive Vice President, Washington, DC Region	Senior Vice President, Chief Accounting Officer
Bruce W. Duncan
Director	Martin Turchin
	Director	Bryan J. Koop
Karen E. Dykstra		Executive Vice President,
Director	David A. Twardock	Boston Region
	Director, Chair of Audit Committee
Carol B. Einiger	Director, Chair of Audit Committee	Robert E. Pester
Director, Chair of Compensation Committee		Executive Vice President,
Director, Chair of Compensation Committee		San Francisco Region

Chairman Emeritus
Mortimer B. Zuckerman

Company Information
Corporate Headquarters	Trading Symbol	Investor Relations	Inquires
800 Boylston Street Suite 1900 Boston, MA 02199 (t) 617.236.3300 (f) 617.236.3311	BXP Stock Exchange Listing New York Stock Exchange	Boston Properties, Inc. 800 Boylston Street, Suite 1900 Boston, MA 02199 (t) 617.236.3322 (f) 617.236.3311 www.bostonproperties.com	Inquiries should be directed to Michael E. LaBelle Executive Vice President, Chief Financial Officer and Treasurer at 617.236.3352 or mlabelle@bostonproperties.com Arista Joyner, Investor Relations Manager at 617.236.3343 or ajoyner@bostonproperties.com

Common Stock Data (NYSE: BXP)

Boston Properties’ common stock has the following characteristics (based on information reported by the New York Stock Exchange):


	Q4 2017			Q3 2017			Q2 2017			Q1 2017			Q4 2016
High Closing Price	$	130.96		$	124.95		$	136.87		$	139.88		$	133.39
Low Closing Price	$	120.68		$	117.70		$	120.27		$	127.00		$	114.07
Average Closing Price	$	125.40		$	121.10		$	126.45		$	132.59		$	124.31
Closing Price, at the end of the quarter	$	130.03		$	122.88		$	123.02		$	132.41		$	125.78
Dividends per share	$	0.80	(1)	$	0.75		$	0.75		$	0.75		$	0.75
Closing dividend yield - annualized		2.46	%		2.44	%		2.44	%		2.27	%		2.39	%

Closing common shares outstanding, plus common units and LTIP units (other than unearned MYLTIP Units) on an as-converted basis (thousands) (2)		171,954			171,951			171,949			171,938			171,774

Closing market value of outstanding shares and units (thousands) (2)	$	22,559,179		$	21,329,339		$	21,353,166		$	22,966,310		$	21,805,734

(1)

The Company increased its regular quarterly cash dividend to $0.80 from $0.75 per share of common stock beginning with the period from October 1, 2017 to December 31, 2017.

(2)

For additional detail, see page 14.

Timing

Quarterly results for the next four quarters will be announced according to the following schedule:


First Quarter, 2018		Tentatively April 24, 2018
Second Quarter, 2018		Tentatively July 31, 2018
Third Quarter, 2018		Tentatively October 30, 2018
Fourth Quarter, 2018		Tentatively January 29, 2019

LOGO

FOURTH QUARTER 2017

RESEARCH COVERAGE


Equity Research Coverage		Debt Research Coverage	Rating Agencies

Jacob Kilstein	Anthony Paolone	Andrew Mollay	Stephen Boyd
Argus Research Company	J.P. Morgan Securities	Bank of America Merrill Lynch	Fitch Ratings
646.747.5447	212.622.6682	646.855.6435	212.908.9153

Jeffrey Spector / Jamie Feldman	Craig Mailman / Jordan Sadler	Peter Troisi	Ranjini Venkatesan
Bank of America Merrill Lynch	KeyBanc Capital Markets	Barclays	Moody’s Investors Service
646.855.1363 / 646.855.5808	917.368.2316 / 917.368.2280	212.412.3695	212.553.3828

Ross Smotrich	Richard Anderson	Mark Streeter	Anita Ogbara
Barclays Capital	Mizuho Securities	J.P. Morgan Securities	Standard & Poor’s
212.526.2306	212.205.8445	212.834.5086	212.438.5077

John Kim	Vikram Malhotra	Thierry Perrein / Kevin McClure
BMO Capital	Morgan Stanley	Wells Fargo
212.885.4115	212.761.7064	704.715.8455 / 704.410.3252

Tom Catherwood	Brad Schwer
BTIG	Morningstar
212.738.6140	312.244.7061

Michael Bilerman / Emmanuel Korchman	Mike Carroll
Citigroup Global Markets	RBC Capital Markets
212.816.1383 / 212.816.1382	440.715.2649

Barry Oxford	David Rodgers / Richard Schiller
D.A. Davidson & Co.	RW Baird
212.240.9871	216.737.7341 / 312.609.5485

Vincent Chao / Mike Husseini	Alexander Goldfarb / Daniel Santos
Deutsche Bank Securities	Sandler O’Neill & Partners
212.250.6799 / 212.250.7703	212.466.7937 / 212.466.7927

Steve Sakwa / Robert Simone	John Guinee / Aaren Wolf
Evercore ISI	Stifel, Nicolaus & Company
212.446.9462 / 212.446.9459	443.224.1307 / 443.224.1206

Jed Reagan	Michael Lewis
Green Street Advisors	SunTrust Robinson Humphrey
949.640.8780	212.319.5659

Andrew Rosivach	Nick Yulico
Goldman Sachs	UBS Securities
212.902.2796	212.713.3402

Jonathan Petersen / Omotayo Okusanya	Blaine Heck
Jefferies & Co.	Wells Fargo Securities
212.284.1705 / 212.336.7076	443.263.6529

With the exception of Green Street Advisors, an independent research firm, the equity analysts listed above are those analysts that, according to First Call Corporation, have published research material on the Company and are listed as covering the Company. Please note that any opinions, estimates or forecasts regarding 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.

LOGO

FOURTH QUARTER 2017

GUIDANCE

The Company’s guidance for the first quarter 2018 and full year 2018 for diluted earnings per common share attributable to Boston Properties, Inc. common shareholders (“EPS”) and diluted funds from operations (“FFO”) per common share attributable to Boston Properties, Inc. common shareholders is set forth and reconciled below. Except as described below, the estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels, the timing of the lease-up of available space and development deliveries and the earnings impact of the events referenced in the earnings release issued on January 30, 2018 and otherwise referenced during the Company’s conference call scheduled for January 31, 2018. The estimates do not include possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions, other possible capital markets activity or possible future impairment charges. EPS estimates may be subject to fluctuations as a result of several factors, including changes in the recognition of depreciation and amortization expense and any gains or losses associated with disposition activity. The Company is not able to assess at this time the potential impact of these factors on projected EPS. By definition, FFO does not include real estate-related depreciation and amortization, impairment losses on depreciable real estate or gains or losses associated with disposition activities. For a complete definition of FFO and statements of the reasons why management believes it provides useful information to investors, see page 48. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth below.


	First Quarter 2018					Full Year 2018
	Low			High		Low			High
Projected EPS (diluted)	$	1.15	—	$	1.17	$	3.24	—	$	3.37
Add:

Projected Company share of real estate depreciation and amortization		0.88	—		0.88		3.55	—		3.55

Less:
Projected Company share of gains on sales of real estate		0.56	—		0.56		0.56	—		0.56

Projected FFO per share (diluted)	$	1.47	—	$	1.49	$	6.23	—	$	6.36

ASSUMPTIONS

(dollars in thousands)


	Full Year 2018
	Low				High
Operating property activity:
Average In-service portfolio occupancy		90.0	%	—		92.0	%
Increase in BXP’s Share of Same Property net operating income (excluding termination income)		0.50	%	—		2.50	%
Increase in BXP’s Share of Same Property net operating income - cash (excluding termination income)		0.50	%	—		2.50	%
BXP’s Share of Non Same Properties’ incremental contribution to net operating income over prior year (excludes asset sales)	$	40,000		—	$	50,000
BXP’s Share of incremental net operating income related to asset sales over prior year	$	(8,000	)		$	(8,000	)
BXP’s Share of straight-line rent and fair value lease revenue (non-cash revenue)	$	55,000		—	$	75,000
Hotel net operating income	$	13,000		—	$	15,000
Termination income	$	4,000		—	$	8,000

Other income (expense):
Development and management services income	$	29,000		—	$	34,000
General and administrative expense	$	(120,000	)	—	$	(115,000	)
Net interest expense	$	(380,000	)	—	$	(365,000	)

Noncontrolling interest:
Noncontrolling interest in property partnerships’ share of FFC	$	(140,000	)	—	$	(127,000	)

LOGO

FOURTH QUARTER 2017

FINANCIAL HIGHLIGHTS

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

This section includes non-GAAP financial measures, which are accompanied by what the Company considers the most directly comparable financial measures calculated and presented in accordance with GAAP. Quantitative reconciliations of the differences between the most directly comparable GAAP financial measures and the non-GAAP financial measures presented are shown on pages 11-13. Definitions of these non-GAAP financial measures and statements of the reasons why management believes the non-GAAP measures provide useful information to investors about the Company’s financial condition and results of operations, and, if applicable, the other purposes for which management uses the measures, can be found on pages 47-48.


	Three Months Ended
	31-Dec-17			30-Sep-17			30-Jun-17			31-Mar-17			31-Dec-16
Net income attributable to Boston Properties, Inc. common shareholders	$	103,829		$	117,337		$	133,709		$	97,083		$	147,214
Net income attributable to Boston Properties, Inc. per share - basic	$	0.67		$	0.76		$	0.87		$	0.63		$	0.96
Net income attributable to Boston Properties, Inc. per share - diluted	$	0.67		$	0.76		$	0.87		$	0.63		$	0.96
FFO attributable to Boston Properties, Inc. (1)	$	230,132		$	243,015		$	257,881		$	228,383		$	236,898
Diluted FFO per share (1)	$	1.49		$	1.57		$	1.67		$	1.48		$	1.54
Dividends per common share	$	0.80		$	0.75		$	0.75		$	0.75		$	0.75
Funds available for distribution to common shareholders and common unitholders (FAD) (1) (2)	$	157,576		$	193,686		$	172,723		$	178,002		$	151,183

Ratios:

Interest Coverage Ratio (excluding capitalized interest) (3)		4.00			4.25			4.28			3.88			3.86
Interest Coverage Ratio (including capitalized interest) (3)		3.31			3.54			3.67			3.40			3.46
FFO Payout Ratio (2)		53.69	%		47.77	%		44.91	%		50.68	%		48.70	%
FAD Payout Ratio (2)		87.36	%		66.63	%		74.72	%		72.49	%		85.28	%

Selected Items (4):

Revenue	$	655,229		$	657,712		$	656,907		$	632,228		$	636,061
Partners’ share of revenue from consolidated joint ventures		(71,299	)		(72,598	)		(73,027	)		(70,178	)		(69,766	)
BXP’s share of revenue from unconsolidated joint ventures		26,725			26,047			26,174			25,650			24,828

BXP’s Share of revenue	$	610,655		$	611,161		$	610,054		$	587,700		$	591,123

Straight-line rent	$	22,323		$	16,105		$	3,060		$	12,023		$	14,711
Partners’ share of straight-line rent from consolidated joint ventures		(3,373	)		(1,960	)		3,326			(590	)		(1,103	)
BXP’s share of straight-line rent from unconsolidated joint ventures		2,864			2,691			2,435			3,563			3,696

BXP’s Share of straight-line rent	$	21,814		$	16,836		$	8,821		$	14,996		$	17,304

Fair value lease revenue (5)	$	5,655		$	5,781		$	5,464		$	5,390		$	6,840
Partners’ share of fair value lease revenue from consolidated joint ventures (5)		(1,696	)		(1,721	)		(1,580	)		(1,575	)		(2,194	)
BXP’s share of fair value lease revenue from unconsolidated joint ventures (5)		457			415			492			493			494

BXP’s Share of fair value lease revenue	$	4,416		$	4,475		$	4,376		$	4,308		$	5,140

Lease termination fees	$	756		$	4,783		$	13,601		$	3,918		$	504
Partners’ share of lease termination fees from consolidated joint ventures		(6	)		(1,233	)		(2,506	)		(1,310	)		(31	)
BXP’s share of termination income from unconsolidated joint ventures		66			28			404			316			13

BXP’s Share of termination income	$	816		$	3,578		$	11,499		$	2,924		$	486

Fair value interest adjustment and hedge amortization	$	(1,602	)	$	(1,606	)	$	7,319		$	10,323		$	10,145
Partners’ share of fair value interest adjustment and hedge amortization from consolidated joint ventures		144			144			(3,464	)		(4,627	)		(4,598	)
BXP’s share of fair value interest adjustment and hedge amortization from unconsolidated joint ventures		—			—			—			—			—

BXP’s Share of fair value interest adjustment and hedge amortization	$	(1,458	)	$	(1,462	)	$	3,855		$	5,696		$	5,547

Ground rent expense (6)	$	3,531		$	3,702		$	3,462		$	3,459		$	3,460
Gains (losses) from early extinguishments of debt	$	(13,858	)	$	—		$	14,354		$	—		$	—
Capitalized interest	$	17,784		$	16,658		$	14,283		$	12,345		$	10,281
Capitalized wages (7)	$	4,996		$	4,710		$	4,930		$	3,947		$	5,376
Operating margins [(rental revenue - rental expense)/rental revenue]		63.1	%		62.6	%		63.8	%		63.1	%		63.6	%
Income from unconsolidated joint ventures	$	4,197		$	843		$	3,108		$	3,084		$	2,585
BXP’s share of FFO from unconsolidated joint ventures	$	10,507	(8)	$	10,125		$	12,737		$	12,125		$	11,277
Net income attributable to noncontrolling interests in property partnerships	$	13,865		$	14,340		$	15,203		$	4,424		$	(2,121	)
FFO attributable to noncontrolling interests in property partnerships	$	32,761	(9)	$	32,892		$	34,530		$	25,839		$	25,135

(1)	For the Company’s definitions and related disclosures, see pages 47-48.

(2)

FFO Payout Ratio equals dividends per common share (excluding any special dividends) divided by Diluted FFO per share. For a quantitative reconciliation of FFO, see page 11. FAD Payout Ratio equals distributions to common shareholders and unitholders (excluding any special distributions) divided by FAD. For a quantitative reconciliation of FAD, see page 12.

(3)	For a quantitative reconciliation and related disclosures, see page 13.

(4)	Partners’ share and BXP’s share of line items below are based upon percentage ownership interests in the applicable joint ventures. For additional details, see page 47.

(5)	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.

(6)	Includes non-cash straight-line adjustments to ground rent expense. See page 13 for the straight-line adjustments to the ground rent expense.

(7)	Includes internal wages, associated with leasing, of $1,515, $1,531, $1,414, $899 and $2,606 for the three months ended December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017 and December 31, 2016, respectively.

(8)	For additional detail, see page 18.

(9)	For additional detail, see page 20.

LOGO

FOURTH QUARTER 2017

FINANCIAL HIGHLIGHTS (continued)

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

This section includes non-GAAP financial measures, which are accompanied by what the Company considers the most directly comparable financial measures calculated and presented in accordance with GAAP. Definitions of these non-GAAP financial measures and statements of the reasons why management believes the non-GAAP measures provide useful information to investors about the Company’s financial condition and results of operations and, if applicable, the other purposes for which management uses the measures, can be found on pages 47-48.


	31-Dec-17			30-Sep-17			30-Jun-17			31-Mar-17			31-Dec-16
Balance Sheet Items:

Above-market rents (included within Prepaid Expenses and Other Assets)	$	25,393		$	28,112		$	30,810		$	33,923		$	37,079
Below-market rents (included within Other Liabilities)	$	98,753		$	107,127		$	115,869		$	123,545		$	132,495
Accrued rental income liability (included within Other Liabilities)	$	36,305		$	32,490		$	34,600		$	38,468		$	31,829
Accrued ground rent expense, net liability (included within Prepaid Expenses and Other Assets and Other Liabilities)	$	45,205		$	44,307		$	43,753		$	43,356		$	42,717
Investments in unconsolidated joint ventures with deficit balances (included within Other Liabilities) (1)	$	25,945		$	22,863		$	20,605		$	21,610		$	22,087
Outside members’ notes payable	$	—		$	—		$	—		$	180,000		$	180,000
Accrued interest payable on outside members’ notes payable (included within Accrued Interest Payable)	$	—		$	—		$	—		$	162,936		$	153,758

Capitalization:

Common Stock Price @ Quarter End	$	130.03		$	122.88		$	123.02		$	132.41		$	125.78
Equity Value @ Quarter End	$	22,559,179		$	21,329,339		$	21,353,166		$	22,966,310		$	21,805,734

Consolidated Debt	$	10,271,611		$	10,234,634		$	10,236,639		$	9,886,845		$	9,796,133
Add:
BXP’s share of Unconsolidated Joint Venture Debt (2)		608,874			591,622			317,724			317,719			318,193
Less:
Partners’ share of Consolidated Debt (3)		1,209,280			1,210,389			1,211,485			1,138,446			1,144,473

BXP’s Share of Debt (4)(5)		$9,671,205			$9,615,867			$9,342,878			$9,066,118			$8,969,853

Consolidated Market Capitalization	$	32,830,790		$	31,563,973		$	31,589,805		$	32,853,155		$	31,601,867
Consolidated Debt/Consolidated Market Capitalization		31.29	%		32.43	%		32.40	%		30.09	%		31.00	%
BXP’s Share of Market Capitalization (4)(5)	$	32,230,384	(6)	$	30,945,206		$	30,696,044		$	32,032,428		$	30,775,587
BXP’s Share of Debt/BXP’s Share of Market Capitalization (4)(5)		30.01	%(6)		31.07	%		30.44	%		28.30	%		29.15	%

(1)	For additional detail, see page 17.

(2)	Amount is calculated based on the Company’s percentage ownership interest in the unconsolidated joint venture entities. For additional detail, see page 17.

(3)	Amount is calculated based on the outside partners’ percentage ownership interest in the consolidated joint venture entities. For additional detail, see page 19.

(4)	For the Company’s definitions, see pages 47-48.

(5)	BXP’s Share of a line item is based upon the Company’s percentage ownership interests in the applicable joint ventures. For additional details, see page 47.

(6)	For additional detail, see page 14.

LOGO

FOURTH QUARTER 2017

CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)


	31-Dec-17			30-Sep-17			30-Jun-17			31-Mar-17			31-Dec-16
ASSETS
Real estate	$	19,610,199		$	19,260,022		$	19,015,077		$	18,931,136		$	18,862,648
Construction in progress (1)		1,269,338			1,386,638			1,348,838			1,211,324			1,037,959
Land held for future development (2)		204,925			212,585			250,451			249,800			246,656
Less accumulated depreciation		(4,577,454	)		(4,484,798	)		(4,379,446	)		(4,302,283	)		(4,222,235	)

Total real estate		16,507,008			16,374,447			16,234,920			16,089,977			15,925,028
Cash and cash equivalents		434,767			493,055			492,435			302,939			356,914
Cash held in escrows		70,602			83,779			47,345			51,244			63,174
Investments in securities		29,161			27,981			26,781			25,817			23,814
Tenant and other receivables, net		92,186			79,750			88,687			73,012			92,548
Accrued rental income, net		861,575			835,415			820,022			812,124			799,138
Deferred charges, net		679,038			657,474			658,219			666,677			686,163
Prepaid expenses and other assets		77,971			144,817			93,985			150,905			129,666
Investments in unconsolidated joint ventures		619,925			611,800			819,368			793,932			775,198

Total assets	$	19,372,233		$	19,308,518		$	19,281,762		$	18,966,627		$	18,851,643

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,979,281		$	2,982,067		$	2,986,283		$	2,046,959		$	2,063,087
Unsecured senior notes, net		7,247,330			7,252,567			7,250,356			7,248,152			7,245,953
Unsecured line of credit		45,000			—			—			105,000			—
Unsecured term loan		—			—			—			—			—
Mezzanine notes payable		—			—			—			306,734			307,093
Outside members’ notes payable		—			—			—			180,000			180,000
Accounts payable and accrued expenses		331,500			325,440			303,559			313,723			298,524
Dividends and distributions payable		139,040			130,434			130,432			130,418			130,308
Accrued interest payable		83,646			99,100			85,172			266,714			243,933
Other liabilities		443,980			419,215			452,608			446,489			450,821

Total liabilities		11,269,777			11,208,823			11,208,410			11,044,189			10,919,719

Commitments and contingencies		—			—			—			—			—

Equity:
Stockholders’ equity attributable to Boston Properties, Inc.:
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding		—			—			—			—			—
Preferred stock, $0.01 par value, 50,000,000 shares authorized; 5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding		200,000			200,000			200,000			200,000			200,000
Common stock, $0.01 par value, 250,000,000 shares authorized, 154,325,286, 154,322,266, 154,307,529, 153,849,231 and 153,790,175 outstanding, respectively		1,543			1,543			1,543			1,538			1,538
Additional paid-in capital		6,377,908			6,370,932			6,363,034			6,339,970			6,333,424
Dividends in excess of earnings		(712,343	)		(692,739	)		(694,320	)		(712,270	)		(693,694	)
Treasury common stock, at cost		(2,722	)		(2,722	)		(2,722	)		(2,722	)		(2,722	)
Accumulated other comprehensive loss		(50,429	)		(51,796	)		(53,161	)		(50,983	)		(52,251	)

Total stockholders’ equity attributable to Boston Properties, Inc.		5,813,957			5,825,218			5,814,374			5,775,533			5,786,295

Noncontrolling interests:
Common units of the Operating Partnership		604,739			605,802			604,997			617,252			614,982
Property partnerships		1,683,760			1,668,675			1,653,981			1,529,653			1,530,647

Total equity		8,102,456			8,099,695			8,073,352			7,922,438			7,931,924

Total liabilities and equity	$	19,372,233		$	19,308,518		$	19,281,762		$	18,966,627		$	18,851,643

(1)	Represents the portion of the Company’s consolidated development projects that qualifies for interest capitalization. Such portion generally excludes intangible assets.

(2)	Includes land held for future development and pre-development costs.

LOGO

FOURTH QUARTER 2017

CONSOLIDATED INCOME STATEMENTS

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


	Three Months Ended
	31-Dec-17			30-Sep-17			30-Jun-17			31-Mar-17			31-Dec-16
Revenue
Rental
Base rent	$	511,995		$	513,269		$	520,542		$	503,562		$	498,941
Recoveries from tenants		94,697			94,476			89,163			89,164			91,123
Parking and other		26,836			26,092			26,462			25,610			25,334

Total rental revenue		633,528			633,837			636,167			618,336			615,398
Hotel revenue		11,744			13,064			13,375			7,420			10,965
Development and management services		9,957			10,811			7,365			6,472			9,698

Total revenue		655,229			657,712			656,907			632,228			636,061

Expenses
Operating		121,066			120,274			116,415			116,415			113,669
Real estate taxes		112,399			115,040			109,509			109,435			108,556
Demolition costs		430			2,027			4,530			2,437			1,873
Hotel operating		8,117			8,447			8,404			7,091			7,736
General and administrative (1)		29,396			25,792			27,141			31,386			25,293
Transaction costs		96			239			299			34			1,200
Depreciation and amortization		154,259			152,164			151,919			159,205			178,032

Total expenses		425,763			423,983			418,217			426,003			436,359

Operating income		229,466			233,729			238,690			206,225			199,702
Other income (expense)
Income from unconsolidated joint ventures		4,197			843			3,108			3,084			2,585
Gain on sale of investment in unconsolidated joint venture		—			—			—			—			59,370
Interest and other income		2,336			1,329			1,504			614			573
Gains from investments in securities (1)		962			944			730			1,042			560
Interest expense		(91,772	)		(92,032	)		(95,143	)		(95,534	)		(97,896	)
Gains (losses) from early extinguishments of debt		(13,858	)		—			14,354			—			—

Income before gains on sales of real estate		131,331			144,813			163,243			115,431			164,894
Gains on sales of real estate		872			2,891			3,767			133			—

Net income		132,203			147,704			167,010			115,564			164,894
Net income attributable to noncontrolling interests
Noncontrolling interest in property partnerships		(13,865	)		(14,340	)		(15,203	)		(4,424	)		2,121
Noncontrolling interest - common units of the Operating Partnership (2)		(11,884	)		(13,402	)		(15,473	)		(11,432	)		(17,097	)

Net income attributable to Boston Properties, Inc.		106,454			119,962			136,334			99,708			149,918
Preferred dividends		(2,625	)		(2,625	)		(2,625	)		(2,625	)		(2,704	)

Net income attributable to Boston Properties, Inc. common shareholders	$	103,829		$	117,337		$	133,709		$	97,083		$	147,214

INCOME PER SHARE OF COMMON STOCK (EPS)
Net income attributable to Boston Properties, Inc. per share - basic	$	0.67		$	0.76		$	0.87		$	0.63		$	0.96


Net income attributable to Boston Properties, Inc. per share - diluted	$	0.67		$	0.76		$	0.87		$	0.63		$	0.96

(1)

General and administrative expense includes $(962), $(944), $(730), $(1,042) and $(560) and gains from investments in securities include $962, $944, $730, $1,042 and $560 for the three months ended December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017 and December 31, 2016, respectively, related to the Company’s deferred compensation plan.

(2)

Equals noncontrolling interest - common units of the Operating Partnership’s share of 10.10%, 10.10%, 10.19%, 10.33% and 10.25% of income before net income attributable to noncontrolling interests in Operating Partnership after deduction for preferred distributions for the three months ended December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017 and December 31, 2016, respectively.

LOGO

FOURTH QUARTER 2017

FUNDS FROM OPERATIONS (FFO)

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


	Three Months Ended
	31-Dec-17			30-Sep-17			30-Jun-17			31-Mar-17			31-Dec-16
Net income attributable to Boston Properties, Inc. common shareholders	$	103,829		$	117,337		$	133,709		$	97,083		$	147,214
Add:
Preferred dividends		2,625			2,625			2,625			2,625			2,704
Noncontrolling interest - common units of the Operating Partnership		11,884			13,402			15,473			11,432			17,097
Noncontrolling interests in property partnerships		13,865			14,340			15,203			4,424			(2,121	)
Less:
Gains on sales of real estate		872			2,891			3,767			133			—

Income before gains on sales of real estate		131,331			144,813			163,243			115,431			164,894
Add:
Depreciation and amortization		154,259			152,164			151,919			159,205			178,032
Noncontrolling interests in property partnerships’ share of depreciation and amortization		(18,896	)		(18,552	)		(19,327	)		(21,415	)		(27,256	)
BXP’s share of depreciation and amortization from unconsolidated joint ventures		6,310			9,282			9,629			9,041			8,692
Corporate-related depreciation and amortization		(541	)		(434	)		(486	)		(525	)		(449	)
Less:
Gain on sale of investment in unconsolidated joint venture		—			—			—			—			59,370
Noncontrolling interests in property partnerships		13,865			14,340			15,203			4,424			(2,121	)
Preferred dividends		2,625			2,625			2,625			2,625			2,704

FFO attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) (“Basic FFO”)		255,973			270,308			287,150			254,688			263,960
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of FFO		25,841			27,293			29,269			26,305			27,062

FFO attributable to Boston Properties, Inc. common shareholders	$	230,132		$	243,015		$	257,881		$	228,383		$	236,898

Boston Properties, Inc.’s percentage share of Basic FFO		89.90	%		89.90	%		89.81	%		89.67	%		89.75	%

Basic FFO per share	$	1.49		$	1.57		$	1.67		$	1.48		$	1.54

Weighted average shares outstanding - basic		154,362			154,355			154,177			153,860			153,814

Diluted FFO per share	$	1.49		$	1.57		$	1.67		$	1.48		$	1.54

Weighted average shares outstanding - diluted		154,526			154,483			154,331			154,214			153,991

Reconciliation to Diluted FFO:

Basic FFO	$	255,973		$	270,308		$	287,150		$	254,688		$	263,960
Add:
Effect of dilutive securities - stock-based compensation		—			—			—			—			—

Diluted FFO		255,973			270,308			287,150			254,688			263,960

Less:
Noncontrolling interest - common units of the Operating Partnership’s share of diluted FFO		25,816			27,272			29,243			26,251			27,034

Boston Properties, Inc.’s share of Diluted FFO	$	230,157		$	243,036		$	257,907		$	228,437		$	236,926

Reconciliation of Shares/Units for Diluted FFO:

Shares/units for Basic FFO		171,695			171,691			171,675			171,581			171,385
Add:
Effect of dilutive securities - stock-based compensation (shares/units)		164			128			154			354			177

Shares/units for Diluted FFO		171,859			171,819			171,829			171,935			171,562

Less:
Noncontrolling interest - common units of the Operating Partnership’s share of Diluted FFO (shares/units)		17,333			17,336			17,498			17,721			17,571

Boston Properties, Inc.’s share of shares/units for Diluted FFO		154,526			154,483			154,331			154,214			153,991

Boston Properties, Inc.’s percentage share of Diluted FFO		89.91	%		89.91	%		89.82	%		89.69	%		89.76	%

LOGO

FOURTH QUARTER 2017

FUNDS AVAILABLE FOR DISTRIBUTION (FAD)

(in thousands, except for ratio amounts)


	Three Months Ended
	31-Dec-17			30-Sep-17			30-Jun-17			31-Mar-17			31-Dec-16
Net income attributable to Boston Properties, Inc. common shareholders	$	103,829		$	117,337		$	133,709		$	97,083		$	147,214
Add:
Preferred dividends		2,625			2,625			2,625			2,625			2,704
Noncontrolling interest - common units of the Operating Partnership		11,884			13,402			15,473			11,432			17,097
Noncontrolling interests in property partnerships		13,865			14,340			15,203			4,424			(2,121	)
Less:
Gains on sales of real estate		872			2,891			3,767			133			—

Income before gains on sales of real estate		131,331			144,813			163,243			115,431			164,894
Add:
Depreciation and amortization		154,259			152,164			151,919			159,205			178,032
Noncontrolling interests in property partnerships’ share of depreciation and amortization		(18,896	)		(18,552	)		(19,327	)		(21,415	)		(27,256	)
BXP’s share of depreciation and amortization from unconsolidated joint ventures		6,310			9,282			9,629			9,041			8,692
Corporate-related depreciation and amortization		(541	)		(434	)		(486	)		(525	)		(449	)
Less:
Gain on sale of investment in unconsolidated joint venture		—			—			—			—			59,370
Noncontrolling interests in property partnerships		13,865			14,340			15,203			4,424			(2,121	)
Preferred dividends		2,625			2,625			2,625			2,625			2,704

Basic FFO		255,973			270,308			287,150			254,688			263,960

Straight-line rent		(22,323	)		(16,105	)		(3,060	)		(12,023	)		(14,711	)
Partners’ share of straight-line rent from consolidated joint ventures		3,373			1,960			(3,326	)		590			1,103
BXP’s share of straight-line rent from unconsolidated joint ventures		(2,864	)		(2,691	)		(2,435	)		(3,563	)		(3,696	)
Lease transaction costs that qualify as rent inducements (1)		225			(102	)		115			682			487
Partners’ share of lease transaction costs that qualify as rent inducements from consolidated joint ventures (1)		(16	)		(9	)		—			—			—
BXP’s share of lease transaction costs that qualify as rent inducements from unconsolidated joint ventures (1)		485			208			223			132			43
Fair value lease revenue (2)		(5,655	)		(5,781	)		(5,464	)		(5,390	)		(6,840	)
Partners’ share of fair value lease revenue from consolidated joint ventures (2)		1,696			1,721			1,580			1,575			2,194
BXP’s share of fair value lease revenue from unconsolidated joint ventures (2)		(457	)		(415	)		(492	)		(493	)		(494	)
Non-cash losses (gains) from early extinguishments of debt		—			—			(14,444	)		—			—
Partners’ share of non-cash losses (gains) from early extinguishments of debt from consolidated joint ventures		—			—			5,878			—			—
BXP’s share of non-cash losses (gains) from early extinguishments of debt from unconsolidated joint ventures		—			—			—			—			—
Non-cash termination income adjustment (fair value lease amounts)		—			(243	)		(525	)		(403	)		7
Partners’ share of non-cash termination income adjustment (fair value lease amounts) from consolidated joint ventures		—			97			210			161			(3	)
BXP’s share of non-cash termination income adjustment (fair value lease amounts) from unconsolidated joint ventures		—			—			(214	)		—			—
Straight-line ground rent expense adjustment (3)		898			554			398			639			998
Stock-based compensation		8,101			8,023			8,435			10,802			7,621
Non-real estate depreciation		541			434			486			525			449
Fair value interest adjustment and hedge amortization		1,602			1,606			(7,319	)		(10,323	)		(10,145	)
Partners’ share of fair value interest adjustment and hedge amortization from consolidated joint ventures		(144	)		(144	)		3,464			4,627			4,598
BXP’s share of fair value interest adjustment and hedge amortization from unconsolidated joint ventures		—			—			—			—			—
2nd generation tenant improvements and leasing commissions		(82,343	)		(54,238	)		(85,427	)		(48,730	)		(75,708	)
Partners’ share of 2nd generation tenant improvements and leasing commissions from consolidated joint ventures		6,379			1,050			200			123			449
BXP’s share of 2nd generation tenant improvements and leasing commissions from unconsolidated joint ventures		(2,857	)		(1,163	)		(159	)		(1,164	)		(1,472	)
Unearned portion of capitalized fees from consolidated joint ventures		8,030			591			607			537			1,787
Maintenance capital expenditures (4)		(14,221	)		(12,032	)		(11,643	)		(10,677	)		(16,334	)
Partners’ share of maintenance capital expenditures from consolidated joint ventures (4)		2,021			457			1,004			2,129			1,197
BXP’s share of maintenance capital expenditures from unconsolidated joint ventures (4)		(243	)		(111	)		(17	)		(211	)		(437	)
Hotel improvements, equipment upgrades and replacements		(625	)		(289	)		(2,502	)		(6,231	)		(3,870	)

Funds available for distribution to common shareholders and common unitholders (FAD) (A)	$	157,576		$	193,686		$	172,723		$	178,002		$	151,183

Distributions to common shareholders and unitholders (excluding any special distributions) (B)	$	137,659		$	129,056		$	129,055		$	129,040		$	128,930

FAD Payout Ratio (B÷A)		87.36	%		66.63	%		74.72	%		72.49	%		85.28	%

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

(2)	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.

(3)

Includes the straight-line impact of the Company’s 99-year ground and air rights lease related to the Company’s 100 Clarendon Street garage and Back Bay Transit Station. The Company has allocated contractual ground lease payments aggregating approximately $34.4 million, which it expects to incur by the end of 2021 with no payments thereafter. The Company is recognizing these amounts on a straight-line basis over the 99-year term of the ground and air rights lease. See page 7.

(4)	Maintenance capital expenditures do not include planned capital expenditures related to acquisitions and repositioning capital expenditures. See page 25 for additional detail.

LOGO

FOURTH QUARTER 2017

INTEREST COVERAGE RATIOS

(in thousands, except for ratio amounts)


	Three Months Ended
	31-Dec-17			30-Sep-17			30-Jun-17			31-Mar-17			31-Dec-16
Net income attributable to Boston Properties, Inc. common shareholders	$	103,829		$	117,337		$	133,709		$	97,083		$	147,214
Add:
Preferred dividends		2,625			2,625			2,625			2,625			2,704
Noncontrolling interest - common units of the Operating Partnership		11,884			13,402			15,473			11,432			17,097
Noncontrolling interests in property partnerships		13,865			14,340			15,203			4,424			(2,121	)
Less:
Gains on sales of real estate		872			2,891			3,767			133			—

Income before gains on sales of real estate		131,331			144,813			163,243			115,431			164,894
Noncontrolling interests in property partnerships		(13,865	)		(14,340	)		(15,203	)		(4,424	)		2,121
Interest expense		91,772			92,032			95,143			95,534			97,896
Partners’ share of interest expense from consolidated joint ventures		(11,624	)		(11,816	)		(16,401	)		(17,259	)		(17,579	)
BXP’s share of interest expense from unconsolidated joint ventures		6,406			5,661			3,822			3,749			3,654
Depreciation and amortization expense		154,259			152,164			151,919			159,205			178,032
Noncontrolling interests in property partnerships’ share of depreciation and amortization		(18,896	)		(18,552	)		(19,327	)		(21,415	)		(27,256	)
BXP’s share of depreciation and amortization from unconsolidated joint ventures		6,310			9,282			9,629			9,041			8,692
Gain on sale of investment in unconsolidated joint venture		—			—			—			—			(59,370	)
Non-cash losses (gains) from early extinguishments of debt		—			—			(14,444	)		—			—
Partners’ share of non-cash losses (gains) from early extinguishments of debt from consolidated joint ventures		—			—			5,878			—			—
BXP’s share of non-cash losses (gains) from early extinguishments of debt from unconsolidated joint ventures		—			—			—			—			—
Non-cash termination income adjustment (fair value lease amounts)		—			(243	)		(525	)		(403	)		7
Partners’ share of non-cash termination income adjustment (fair value lease amounts) from consolidated joint ventures		—			97			210			161			(3	)
BXP’s share of non-cash termination income adjustment (fair value lease amounts) from unconsolidated joint ventures		—			—			(214	)		—			—
Stock-based compensation		8,101			8,023			8,435			10,802			7,621
Straight-line ground rent expense adjustment (1)		898			554			398			639			998
Straight-line rent		(22,323	)		(16,105	)		(3,060	)		(12,023	)		(14,711	)
Partners’ share of straight-line rent from consolidated joint ventures		3,373			1,960			(3,326	)		590			1,103
BXP’s share of straight-line rent from unconsolidated joint ventures		(2,864	)		(2,691	)		(2,435	)		(3,563	)		(3,696	)
Lease transaction costs that qualify as rent inducements (2)		225			(102	)		115			682			487
Partners’ share of lease transaction costs that qualify as rent inducements from consolidated joint ventures (2)		(16	)		(9	)		—			—			—
BXP’s share of lease transaction costs that qualify as rent inducements from unconsolidated joint ventures (2)		485			208			223			132			43
Fair value lease revenue (3)		(5,655	)		(5,781	)		(5,464	)		(5,390	)		(6,840	)
Partners’ share of fair value lease revenue from consolidated joint ventures (3)		1,696			1,721			1,580			1,575			2,194
BXP’s share of fair value lease revenue from unconsolidated joint ventures (3)		(457	)		(415	)		(492	)		(493	)		(494	)

Subtotal (A)	$	329,156		$	346,461		$	359,704		$	332,571		$	337,793

Divided by:

Interest expense	$	91,772		$	92,032		$	95,143		$	95,534		$	97,896
Partners’ share of interest expense from consolidated joint ventures		(11,624	)		(11,816	)		(16,401	)		(17,259	)		(17,579	)
BXP’s share of interest expense from unconsolidated joint ventures		6,406			5,661			3,822			3,749			3,654
Fair value interest adjustment and hedge amortization		(1,602	)		(1,606	)		7,319			10,323			10,145
Partners’ share of fair value interest adjustment and hedge amortization from consolidated joint ventures		144			144			(3,464	)		(4,627	)		(4,598	)
BXP’s share of fair value interest adjustment and hedge amortization from unconsolidated joint ventures		—			—			—			—			—
Amortization of financing costs		(3,108	)		(3,070	)		(2,442	)		(1,967	)		(1,964	)
Partners’ share of amortization of financing costs from consolidated joint ventures		382			382			206			9			39
BXP’s share of amortization of financing costs from unconsolidated joint ventures		(118	)		(112	)		(102	)		(100	)		(100	)

Adjusted interest expense excluding capitalized interest (B)		82,252			81,615			84,081			85,662			87,493

Capitalized interest		17,784			16,658			14,283			12,345			10,281
Partners’ share of capitalized interest from consolidated joint ventures		(693	)		(518	)		(238	)		(251	)		(203	)
BXP’s share of capitalized interest from unconsolidated joint ventures		9			8			(6	)		(6	)		—

Adjusted interest expense including capitalized interest (C)	$	99,352		$	97,763		$	98,120		$	97,750		$	97,571

Interest Coverage Ratio (excluding capitalized interest) (A÷B) (4)		4.00			4.25			4.28			3.88			3.86

Interest Coverage Ratio (including capitalized interest) (A÷C) (4)		3.31			3.54			3.67			3.40			3.46

(1)

Includes the straight-line impact of the Company’s 99-year ground and air rights lease related to the 100 Clarendon Street garage and Back Bay Transit Station. The Company has allocated contractual ground lease payments aggregating approximately $34.4 million, which it expects to incur by the end of 2021 with no payments thereafter. The Company is recognizing these amounts on a straight-line basis over the 99-year term of the ground and air rights lease. See page 7.

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

(3)	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.

(4)

The Company believes that the presentation of its Interest Coverage Ratio provides investors with useful information about the Company’s financial condition because it measures the margin it has for paying interest expense as of a certain date. In addition, by analyzing interest coverage ratios over a period of time, trends may emerge that provide investors a better sense of whether a company’s financial condition is improving or declining. The ratios may also be used to compare the financial condition of different companies, which can help when making an investment decision. The Company presents its Interest Coverage Ratio in two ways - including capitalized interest and excluding capitalized interest. GAAP requires the capitalization of interest expense during development. Therefore, for a company like Boston Properties, Inc. that is an active developer of real estate, presenting the Interest Coverage Ratio (excluding capitalized interest) provides an alternative measure of financial condition that may be more indicative of the Company’s ability to meet its interest expense obligations and therefore its overall financial condition.

LOGO

FOURTH QUARTER 2017

CAPITAL STRUCTURE

(in thousands, except percentages)

Consolidated Debt


	Aggregate Principal
	December 31, 2017
Mortgage Notes Payable	$	3,013,961
Unsecured Line of Credit		45,000
Unsecured Senior Notes, at face value		7,300,000

Subtotal		10,358,961
Discount on Unsecured Senior Notes		(17,893	)
Deferred Financing Costs, Net		(69,457	)

Consolidated Debt	$	10,271,611

Boston Properties Limited Partnership Unsecured Senior Notes (1)


Settlement Date	Maturity Date		Principal		Effective Yield (on issue date)			Coupon			Public Offering Price			Discount		Deferred Financing Costs, Net		Unsecured Senior Notes, Net
10/9/2009		10/15/2019		700,000		5.967	%		5.875	%		99.931	%		111		1,006		698,883
4/19/2010		11/15/2020		700,000		5.708	%		5.625	%		99.891	%		251		1,607		698,142
11/18/2010		5/15/2021		850,000		4.289	%		4.125	%		99.260	%		2,321		2,282		845,397
6/11/2012		2/1/2023		1,000,000		3.954	%		3.850	%		99.779	%		1,158		3,974		994,868
4/11/2013		9/1/2023		500,000		3.279	%		3.125	%		99.379	%		1,828		2,278		495,894
6/27/2013		2/1/2024		700,000		3.916	%		3.800	%		99.694	%		1,318		3,421		695,261
1/20/2016		2/1/2026		1,000,000		3.766	%		3.650	%		99.708	%		2,439		6,584		990,977
8/17/2016		10/1/2026		1,000,000		3.495	%		2.750	%		99.271	%		6,441		7,085		986,474
12/4/2017		1/15/2025		850,000		3.350	%		3.200	%		99.757	%		2,026		6,540		841,434

			$	7,300,000										$	17,893	$	34,777	$	7,247,330

Equity


	Shares/Units
	Outstanding		Common Stock		Equivalent
	as of 12/31/2017		Equivalents		Value (2)
Common Stock		154,325		154,325	$	20,066,880
Common Operating Partnership Units		17,629		17,629		2,292,299
5.25% Series B Cumulative Redeemable Preferred Stock (non-callable through March 27, 2018)		80		—		200,000

Total Equity				171,954	$	22,559,179

Consolidated Debt					$	10,271,611
Add:
BXP’s share of unconsolidated joint venture debt (3)						608,874
Less:
Partners’ share of consolidated debt (4)						1,209,280

BXP’s Share of Debt (5)					$	9,671,205

Consolidated Market Capitalization					$	32,830,790

BXP’s Share of Market Capitalization (5)					$	32,230,384

(1)	All unsecured senior notes are rated A- (stable), BBB+ (stable) and Baa2 (positive) by S&P, Fitch and Moody’s, respectively.

(2)	Values based on December 31, 2017 closing price of $130.03 per share of common stock, except the Series B Preferred Stock is valued at its fixed liquidation preference.

(3)	Amount is calculated based on the Company’s percentage ownership interest in the unconsolidated joint venture entities. For additional detail, see page 17.

(4)	Amount is calculated based on the outside partners’ percentage ownership interest in the consolidated joint venture entities. For additional detail, see page 19.

(5)	For the Company’s definitions, see pages 47-48.

LOGO

FOURTH QUARTER 2017

DEBT ANALYSIS (1)

as of December 31, 2017

(dollars in thousands)

Debt Maturities and Principal Payments


	2018			2019			2020			2021			2022			Thereafter			Total
Floating Rate Debt:
Mortgage Notes Payable	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Unsecured Line of Credit		—			—			—			—			45,000			—			45,000
Unsecured Term Loan		—			—			—			—			—			—			—

Total Floating Rate Debt	$	—		$	—		$	—		$	—		$	45,000		$	—		$	45,000

Fixed Rate Debt:
767 Fifth Avenue (The GM Building) (60% ownership)	$	—		$	—		$	—		$	—		$	—		$	2,300,000		$	2,300,000
601 Lexington Avenue (55% ownership)		13,684			14,349			15,045			15,776			614,710			—			673,564
New Dominion Technology Park, Building One		3,100			3,340			3,598			22,906			—			—			32,944
University Place		1,849			1,981			2,123			1,500			—			—			7,453

Mortgage Notes Payable		18,633			19,670			20,766			40,182			614,710			2,300,000			3,013,961

Deferred Financing Costs, Net		(3,925	)		(3,925	)		(3,925	)		(3,836	)		(3,578	)		(15,491	)		(34,680	)

Mortgage Notes Payable, Net	$	14,708		$	15,745		$	16,841		$	36,346		$	611,132		$	2,284,509		$	2,979,281

Unsecured Senior Notes, Face Amount	$	—		$	700,000		$	700,000		$	850,000		$	—		$	5,050,000		$	7,300,000
Discount Amortization		(2,686	)		(2,774	)		(2,807	)		(2,352	)		(2,149	)		(5,125	)		(17,893	)
Deferred Financing Costs, Net		(6,114	)		(5,971	)		(5,445	)		(4,583	)		(4,305	)		(8,359	)		(34,777	)

Unsecured Senior Notes, Net	$	(8,800	)	$	691,255		$	691,748		$	843,065		$	(6,454	)	$	5,036,516		$	7,247,330

Total Fixed Rate Debt	$	5,908		$	707,000		$	708,589		$	879,411		$	604,678		$	7,321,025		$	10,226,611

Consolidated Debt	$	5,908		$	707,000		$	708,589		$	879,411		$	649,678		$	7,321,025		$	10,271,611

% of Consolidated Debt		0.06	%		6.88	%		6.90	%		8.56	%		6.33	%		71.27	%		100.00	%

Balloon Payments	$	—		$	700,000		$	700,000		$	872,906		$	655,648		$	7,350,000		$	10,278,554
Scheduled Principal Amortization	$	18,633		$	19,670		$	20,766		$	17,276		$	4,062		$	—		$	80,407

GAAP Weighted Average Floating Rate Debt (2)		—			—			—			—			2.46	%		—			2.46	%

GAAP Weighted Average Fixed Rate Debt (2)		5.52	%		5.96	%		5.70	%		4.39	%		4.79	%		3.65	%		4.09	%

Total GAAP Weighted Average Rate (2)		5.52	%		5.96	%		5.70	%		4.39	%		4.63	%		3.65	%		4.08	%

Total Stated Weighted Average Rate		5.46	%		5.87	%		5.63	%		4.32	%		4.59	%		3.52	%		3.98	%

Unsecured Credit Facility - Matures April 24, 2022


			Outstanding		Letters of		Remaining Capacity
	Facility		at 12/31/2017		Credit		at 12/31/2017
Unsecured Line of Credit	$	1,500,000	$	45,000	$	1,610	$	1,453,390
Unsecured Term Loan (3)	$	500,000	$	—		N/A	$	500,000

Unsecured and Secured Debt Analysis


				Stated Weighted			GAAP Weighted			Weighted Average
	% of Total Debt			Average Rate			Average Rate			Maturity (years)
Unsecured Debt		70.99	%		4.05	%		4.14	%		5.6
Secured Debt		29.01	%		3.78	%		3.95	%		8.2

Consolidated Debt		100.00	%		3.98	%		4.08	%		6.4

Floating and Fixed Rate Debt Analysis


				Stated Weighted			GAAP Weighted			Weighted Average
	% of Total Debt			Average Rate			Average Rate			Maturity (years)
Floating Rate Debt		0.44	%		2.35	%		2.46	%		4.3
Fixed Rate Debt		99.56	%		3.98	%		4.09	%		6.4

Consolidated Debt		100.00	%		3.98	%		4.08	%		6.4

(1)	Excludes unconsolidated joint ventures. For information on BXP’s share of unconsolidated joint venture debt, see page 17.

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

(3)	The Company’s ability to draw upon the Unsecured Term Loan will expire on April 24, 2018.

LOGO

FOURTH QUARTER 2017

SENIOR UNSECURED DEBT COVENANT COMPLIANCE RATIOS

(dollars in thousands)

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

This section presents such ratios as of December 31, 2017 to show that the Company’s Operating Partnership was in compliance with the terms of the Indenture, which has been filed with the SEC. Management is not presenting these ratios 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 Company’s financial condition or results of operations. Investors should not rely on these measures other than for purposes of testing our compliance with the Indenture. This section also presents certain other indenture-related data that we believe assists investors in evaluating the Company’s unsecured debt securities.


			Senior Notes Issued Prior to December 4, 2017			Senior Notes issued On or After December 4, 2017
			December 31, 2017
Total Assets:
Capitalized Property Value (1)			$	24,478,671		$	26,753,978
Cash and Cash Equivalents				434,767			434,767
Investments in Securities				29,161			29,161
Undeveloped Land, at Cost (including BXP’s share of unconsolidated joint ventures)				250,930			250,930
Development in Process, at Cost (including BXP’s share of unconsolidated joint ventures)				1,858,002			1,858,002

Total Assets			$	27,051,531		$	29,326,838

Unencumbered Assets			$	20,631,707		$	22,424,361

Consolidated Secured Debt (Fixed and Variable) (2)			$	3,067,141		$	3,067,141
Unconsolidated Joint Venture Debt (3)				611,395			611,395
Contingent Liabilities & Letters of Credit				9,076			9,076
Unsecured Debt (4)				7,345,000			7,345,000

Total Outstanding Debt			$	11,032,612		$	11,032,612

Consolidated EBITDA:
Income before Gains on Sales of Real Estate (per Consolidated Income Statement)			$	131,331		$	131,331
Subtract: Income from Unconsolidated Joint Ventures (per Consolidated Income Statement)				(4,197	)		(4,197	)
Subtract: Gains from Investments in Securities (per Consolidated Income Statement)				(962	)		(962	)
Add: Losses from Early Extinguishments of Debt (per Consolidated Income Statement)				13,858			13,858
Add: Interest Expense (per Consolidated Income Statement)				91,772			91,772
Add: Depreciation and Amortization (per Consolidated Income Statement)				154,259			154,259

EBITDA				386,061			386,061
Add: BXP’s share of unconsolidated joint venture EBITDA				16,459			16,459

Consolidated EBITDA			$	402,520		$	402,520

Adjusted Interest Expense:
Interest Expense (per Consolidated Income Statement)			$	91,772		$	91,772
Add: BXP’s share of unconsolidated joint venture interest expense				6,406			6,406
Less: Amortization of financing costs (including BXP’s share of unconsolidated joint ventures)				(3,226	)		(3,226	)
Less: Interest expense funded by construction loan draws				—			—

Adjusted Interest Expense			$	94,952		$	94,952


	Test		Actual			Actual
Covenant Ratios and Related Data
Total Outstanding Debt/Total Assets		Less than 60%		40.8	%		37.6	%
Secured Debt/Total Assets		Less than 50%		13.6	%		12.5	%
Interest Coverage (Annualized Consolidated EBITDA to Annualized Interest Expense)		Greater than 1.50x		4.24			4.24
Unencumbered Assets/ Unsecured Debt		Greater than 150%		280.9	%		305.3	%

Unencumbered Consolidated Property EBITDA (5)			$	332,993		$	332,993

Unencumbered Interest Coverage (Unencumbered Consolidated Property EBITDA to Unsecured Interest Expense)				4.42			4.42

% of Unencumbered Consolidated Property EBITDA to Consolidated EBITDA				82.7	%		82.7	%

# of in-service unencumbered properties				147			147

(1)

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

(2)	Includes capital lease obligations of $53,180 and excludes deferred financing costs, net of $34,680.

(3)	Excludes aggregate deferred financing costs, net of $2,521.

(4)	Excludes aggregate debt discount of $17,893 and deferred financing costs, net of $34,777.

(5)

Unencumbered Consolidated Property EBITDA is a non-GAAP financial measure equal to Consolidated EBITDA excluding corporate revenue and expenses, encumbered consolidated Property EBITDA, EBITDA from land and properties that have either been disposed of or not fully placed in-service and items that, in the Company’s view, are not representative of a property’s standard ongoing performance, such as termination income and other similar items. For the three months ended December 31, 2017, these excluded amounts were approximately $(16,841), $84,994, $551 and $823, respectively.

LOGO

FOURTH QUARTER 2017

UNCONSOLIDATED JOINT VENTURES (1)

as of December 31, 2017

(dollars in thousands)

Balance Sheet Information


Property	BXP’s Nominal Ownership			Net Equity			Mortgage/ Construction Loans Payable, Net
540 Madison Avenue		60.00	%	$	66,179		$	71,949
Market Square North		50.00	%		(8,258	)		60,446
Metropolitan Square		20.00	%		3,339			32,659
901 New York Avenue		25.00	%		(13,811	)		55,937
Wisconsin Place Parking Facility		33.33	%		39,710			—
Annapolis Junction (2)		50.00	%		18,381			44,506
500 North Capitol Street, N.W.		30.00	%		(3,876	)		31,404
Colorado Center		50.00	%		254,439			274,505
The Hub on Causeway - Podium		50.00	%		67,121			431
The Hub on Causeway - Hotel		50.00	%		1,690			—
The Hub on Causeway - Residential		50.00	%		28,212			—
1001 6th Street		50.00	%		42,657			—
Dock 72		50.00	%		72,104			17,370
7750 Wisconsin Avenue		50.00	%		21,452			—
1265 Main Street		50.00	%		4,641			19,667

					593,980
Investments with deficit balances reflected within Other Liabilities					25,945

Investment in Joint Ventures				$	619,925

Mortgage/Construction Loans Payable, Net							$	608,874

Debt Maturities and Principal Payments by Property


Property	2018			2019			2020			2021			2022			Thereafter			Total
540 Madison Avenue (60%)	$	72,000		$	—		$	—		$	—		$	—		$	—		$	72,000
Market Square North (50%)		1,205			1,265			58,090			—			—			—			60,560
901 New York Avenue (25%)		—			—			970			1,095			1,135			53,050			56,250
Metropolitan Square (20%)		586			620			31,501			—			—			—			32,707
500 North Capitol Street, N.W. (30%)		—			—			—			—			—			31,500			31,500
1265 Main Street (50%)		383			398			413			429			445			17,793			19,861
Annapolis Junction Building One (50%)		19,775			—			—			—			—			—			19,775	(3)
Annapolis Junction Buildings Seven & Eight (50%)		326			17,723			—			—			—			—			18,049
Annapolis Junction Building Six (50%)		6,808			—			—			—			—			—			6,808
Colorado Center (50%)		—			—			—			—			—			275,000			275,000
The Hub on Causeway - Podium (50%)		—			—			—			431			—			—			431
Dock 72 (50%)		—			—			18,454			—			—			—			18,454

		101,083			20,006			109,428			1,955			1,580			377,343			611,395

Deferred Financing Costs, Net		(681	)		(598	)		(527	)		(128	)		(128	)		(459	)		(2,521	)

Mortgage/Construction Loans Payable, Net	$	100,402		$	19,408		$	108,901		$	1,827		$	1,452		$	376,884		$	608,874

GAAP Weighted Average Rate		3.84	%		3.83	%		4.96	%		3.07	%		3.43	%		3.66	%		3.95	%

% of Total Mortgage/Construction Loans Payable, Net		16.49	%		3.19	%		17.88	%		0.30	%		0.24	%		61.90	%		100.00	%

Balloon Payments	$	98,288		$	17,424		$	106,840		$	431		$	—		$	370,031		$	593,014
Scheduled Amortization	$	2,795		$	2,582		$	2,588		$	1,524		$	1,580		$	7,312		$	18,381

Floating and Fixed Rate Debt Analysis


	% of Total Debt			Stated Weighted Average Rate			GAAP Weighted Average Rate			Weighted Average Maturity (years)
Floating Rate Debt		22.05	%		3.68	%		3.88	%		1.0
Fixed Rate Debt		77.95	%		3.93	%		3.97	%		7.8

Total Debt		100.00	%		3.87	%		3.95	%		6.3

(1)	Amounts represent the Company’s share based on its ownership percentage. For additional details, see page 47.

(2)	Annapolis Junction includes four in-service properties and two undeveloped land parcels.

(3)

On April 11, 2016, a notice of event of default was received from the lender because the loan to value ratio is not in compliance with the applicable covenant in the loan agreement. On October 17, 2016, the lender notified the joint venture that it has elected to charge the default rate on the loan. The default rate is defined as LIBOR plus 5.75% per annum. Subsequently, the cash flows generated from the property have become insufficient to fund debt service payments and capital improvements necessary to lease and operate the property and the joint venture is not prepared to fund additional cash shortfalls at this time. Consequently, the joint venture is not current on making debt service payments and remains in default. The loan has one, three-year extension option, subject to certain conditions including that no event of default exists or is ongoing.

LOGO

FOURTH QUARTER 2017

UNCONSOLIDATED JOINT VENTURES (continued)

(unaudited and dollars in thousands)

Results of Operations

for the three months ended December 31, 2017


	540 Madison Avenue			Market Square North			Metropolitan Square			901 New York Avenue			Wisconsin Place Parking Facility			Annapolis Junction (1)			500 North Capitol Street, N.W.			Colorado Center			1265 Main Street			Other Joint Ventures (2)			Total Unconsolidated Joint Ventures
REVENUE
Rental (3)	$	6,135		$	4,668		$	4,998		$	7,081		$	1,009		$	2,231		$	2,992		$	13,326		$	994		$	789		$	44,223
Operating recoveries		738			778			1,446			1,275			430			701			1,246			509			315			—			7,438
Straight-line rent		89			82			1,533			468			—			245			19			2,859			—			—			5,295
Fair value lease revenue		—			—			—			—			—			—			—			96			—			—			96
Termination income		111			—			—			—			—			—			—			—			—			—			111

Total revenue		7,073			5,528			7,977			8,824			1,439			3,177			4,257			16,790			1,309			789			57,163

EXPENSES
Operating		3,311			2,334			3,983			3,623			783			1,731			1,442			5,330			334			359			23,230

NET OPERATING INCOME/(LOSS)		3,762			3,194			3,994			5,201			656			1,446			2,815			11,460			975			430			33,933

Interest		894			1,492			2,335			2,075			—			1,223			1,128			5,033			382			—			14,562
Depreciation and amortization		1,994			1,018			1,949			1,465			1,383			1,075			948			4,325			397			—			14,554

SUBTOTAL		2,888			2,510			4,284			3,540			1,383			2,298			2,076			9,358			779			—			29,116

NET INCOME/(LOSS)	$	874		$	684		$	(290	)	$	1,661		$	(727	)	$	(852	)	$	739		$	2,102		$	196		$	430		$	4,817

BXP’s nominal ownership percentage		60.00	%		50.00	%		20.00	%		25.00	%		33.33	%		50.00	%		30.00	%		50.00	%		50.00	%		50.00	%

BXP’s share of net income/(loss)	$	524		$	342		$	(58	)	$	3,955	(4)	$	(240	)	$	(426	)	$	222		$	1,051		$	98		$	413		$	5,881

Basis differential
Straight-line rent	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	680	(5)	$	—		$	—		$	680
Fair value lease revenue		—			—			—			—			—			—			—			409	(5)		—			—			409
Depreciation and amortization		168			(180	)		(201	)		(20	)		(8	)		(12	)		4			(2,516	)(5)		(8	)		—			(2,773	)

Total basis differential (6)		168			(180	)		(201	)		(20	)		(8	)		(12	)		4			(1,427	)(5)		(8	)		—			(1,684	)

Income/(loss) from unconsolidated joint ventures	$	692		$	162		$	(259	)	$	3,935	(4)	$	(248	)	$	(438	)	$	226		$	(376	)	$	90		$	413		$	4,197

Gain on investment		—			—			—			—			—			—			—			—			—			—			—
BXP’s share of depreciation & amortization		1,093			693			602			(2,352	)(4)		466			553			294			4,754			207			—			6,310

BXP’s share of Funds from Operations (FFO)	$	1,785		$	855		$	343		$	1,583		$	218		$	115		$	520		$	4,378		$	297		$	413		$	10,507

BXP’s share of interest expense	$	537		$	746		$	467		$	999	(4)	$	—		$	612		$	338		$	2,516		$	191		$	—		$	6,406

BXP’s share of amortization of financing costs	$	31		$	12		$	5		$	21		$	—		$	29		$	4		$	13		$	3		$	—		$	118

BXP’s share of capitalized interest	$	—		$	—		$	9		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	9

BXP’s share of revenue (7)	$	4,244		$	2,764		$	1,595		$	4,246	(4)	$	479		$	1,588		$	1,277		$	9,483		$	655		$	394		$	26,725
BXP’s share of operating expenses		1,987			1,167			797			1,744	(4)		261			866			433			2,665			167			179			10,266

BXP’s share of net operating income/(loss) (7)		2,257			1,597			798			2,502	(4)		218			722			844			6,818			488			215			16,459
Less:
BXP’s share of termination income		66			—			—			—	(4)		—			—			—			—			—			—			66

BXP’s share of net operating income/(loss) (excluding termination income) (7)		2,191			1,597			798			2,502	(4)		218			722			844			6,818			488			215			16,393
Less:
BXP’s share of straight-line rent		54			41			307			225	(4)		—			122			6			2,109			—			—			2,864
BXP’s share of fair value lease revenue		—			—			—			—	(4)		—			—			—			457			—			—			457
Add:
BXP’s share of lease transaction costs that qualify as rent inducements		—			51			345			—	(4)		—			89			—			—			—			—			485

BXP’s share of net operating income/(loss) - cash (excluding termination income) (7)	$	2,137		$	1,607		$	836		$	2,277	(4)	$	218		$	689		$	838		$	4,252		$	488		$	215		$	13,557

(1)	Annapolis Junction includes four properties in service and two undeveloped land parcels.

(2)	Includes The Hub on Causeway, 1001 6th Street, Dock 72 and 7750 Wisconsin Avenue.

(3)	Includes approximately $70 of management services income and approximately $346 of interest and other income.

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

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

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

(7)	Includes the Company’s share of approximately $39 of management services income and approximately $172 of interest and other income.

LOGO

FOURTH QUARTER 2017

CONSOLIDATED JOINT VENTURES

(unaudited and in thousands)

Balance Sheets

as of December 31, 2017


BXP’s ownership percentage		60.00	%		55.00	%		95.00	%


				Norges Joint Ventures
	767 Fifth Avenue (The GM Building) (1)			Times Square Tower 601 Lexington Avenue 100 Federal Street Atlantic Wharf Office (1)			Salesforce Tower (1)			Total Consolidated Joint Ventures
ASSETS
Real estate, net	$	3,426,370		$	2,266,834		$	986,278		$	6,679,482
Cash and cash held in escrows		143,055			162,996			5,039			311,090
Other assets		109,157			175,403			210			284,770

Total assets	$	3,678,582		$	2,605,233		$	991,527		$	7,275,342

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,266,986		$	672,142		$	—		$	2,939,128
Other liabilities		141,418			85,336			56,382			283,136

Total liabilities		2,408,404			757,478			56,382			3,222,264

Equity:
Boston Properties, Inc.		763,170			695,741			910,317			2,369,228
Noncontrolling interests		507,008			1,152,014			24,828			1,683,850	(2)

Total equity		1,270,178			1,847,755			935,145			4,053,078

Total liabilities and equity	$	3,678,582		$	2,605,233		$	991,527		$	7,275,342

Partners’ share of consolidated debt	$	906,816		$	302,464		$	—		$	1,209,280

(1)	Certain balances contain amounts that eliminate in consolidation.

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

LOGO

FOURTH QUARTER 2017

CONSOLIDATED JOINT VENTURES (continued)

(unaudited and in thousands)

Income Statements

for the three months ended December 31, 2017


				Norges Joint Ventures
				Times Square Tower
				601 Lexington Avenue						Total
	767 Fifth Avenue			100 Federal Street						Consolidated
	(The GM Building)			Atlantic Wharf Office			Salesforce Tower			Joint Ventures
REVENUE
Rental	$	65,932		$	86,046		$	3,462		$	155,440
Straight-line rent		3,573			4,630			(2,791	)		5,412
Fair value lease revenue		3,976			236			—			4,212
Termination income		—			14			—			14
Parking and other		776			1,435			—			2,211

Total revenue		74,257			92,361			671			167,289

EXPENSES
Operating		28,462			32,792			291			61,545

NET OPERATING INCOME		45,795			59,569			380			105,744

Development and management services income		(537	)		(910	)		(50	)		(1,497	)
Interest and other income		(336	)		(424	)		(33	)		(793	)
Interest expense		21,103			7,073			—			28,176
Depreciation and amortization		24,151			20,604			129			44,884
Other		—			39			—			39

SUBTOTAL		44,381			26,382			46			70,809

NET INCOME/(LOSS)	$	1,414		$	33,187		$	334		$	34,935

BXP’s ownership percentage		60.00	%		55.00	%		95.00	%

Partners’ share of NOI (1)	$	18,318		$	26,806		$	19		$	45,143

BXP’s share of NOI	$	27,477		$	32,763		$	361		$	60,601

Unearned portion of capitalized fees (2)	$	4,613		$	3,408		$	9		$	8,030

Reconciliation of partners’ noncontrolling interest (NCI):
Net income/(loss)	$	1,414		$	33,187		$	334		$	34,935
Add depreciation & amortization - BXP’s basis difference		52			49			14			115
Special allocation - BXP’s basis		—			(88	)		—			(88	)

Net income/(loss) before interest allocation	$	1,466		$	33,148		$	348		$	34,962

Partners’ share of net income before interest allocation (1)	$	586		$	14,917		$	17		$	15,520
Allocation of management and other fees to non-controlling partners (1)		(720	)		(783	)		(16	)		(1,519	)
Accretion and adjustments (1)		—			39			(175	)		(136	)

Partners’ NCI (1)	$	(134	)	$	14,173		$	(174	)	$	13,865

Reconciliation of partners’ share of FFO:
Net income/(loss)	$	1,414		$	33,187		$	334		$	34,935
Add depreciation & amortization		24,151			20,604			129			44,884

Entity FFO	$	25,565		$	53,791		$	463		$	79,819

Partners’ NCI (1)	$	(134	)	$	14,173		$	(174	)	$	13,865
Partners’ share of depreciation and amortization after BXP’s basis differential (1)		9,640			9,250			6			18,896

Partners’ share FFO (1)	$	9,506		$	23,423		$	(168	)	$	32,761

Reconciliation of BXP’s share of FFO:
BXP’s share of net income/(loss) adjusted for partners’ NCI	$	1,548		$	19,014		$	508		$	21,070
Depreciation & amortization - BXP’s basis difference		52			49			14			115
BXP’s share of depreciation & amortization		14,459			11,305			109			25,873

BXP’s share of FFO	$	16,059		$	30,368		$	631		$	47,058

Partners’ share of select items (1):
Partners’ share of revenue	$	29,703		$	41,562		$	34		$	71,299

Partners’ share of interest expense	$	8,441		$	3,183		$	—		$	11,624

Partners’ share of hedge amortization	$	144		$	—		$	—		$	144

Partners’ share of amortization of financing costs	$	346		$	36		$	—		$	382

Partners’ share of capitalized interest	$	117		$	576		$	—		$	693

Reconciliation of Partners’ share of NOI (1):
Rental revenue	$	29,703		$	41,562		$	34		$	71,299
Less: Termination income		—			6			—			6

Rental revenue (excluding termination income)		29,703			41,556			34			71,293

Operating expenses		11,385			14,756			15			26,156

NOI (excluding termination income)	$	18,318		$	26,800		$	19		$	45,137

Rental revenue (excluding termination income)	$	29,703		$	41,556			34		$	71,293
Less: Straight-line rent		1,429			2,084			(140	)		3,373
Fair value lease revenue		1,590			106			—			1,696
Add: Lease transaction costs that qualify as rent inducements (3)		16			—			—			16

Subtotal		26,700			39,366			174			66,240

Less: Operating expenses		11,385			14,756			15			26,156

NOI - cash (excluding termination income)	$	15,315		$	24,610		$	159		$	40,084

(1)	Amounts represent the partners’ share based on their respective ownership percentage.

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

(3)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Leasing transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 12.

LOGO

FOURTH QUARTER 2017

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO BOSTON PROPERTIES, INC. COMMON SHAREHOLDERS TO NET OPERATING INCOME (NOI)

(in thousands)


	For the three months ended
	December 31, 2017			December 31, 2016
Net income attributable to Boston Properties, Inc. common shareholders	$	103,829		$	147,214
Preferred dividends		2,625			2,704

Net income attributable to Boston Properties, Inc.		106,454			149,918
Net income attributable to noncontrolling interests:
Noncontrolling interest - common units of the Operating Partnership		11,884			17,097
Noncontrolling interest in property partnerships		13,865			(2,121	)

Net income		132,203			164,894
Gains on sales of real estate		(872	)		—

Income before gains on sales of real estate		131,331			164,894

Add:
Interest expense		91,772			97,896
Losses from early extinguishments of debt		13,858			—
Depreciation and amortization		154,259			178,032
Transaction costs		96			1,200
General and administrative expense		29,396			25,293
Subtract:
Gains from investments in securities		(962	)		(560	)
Interest and other income		(2,336	)		(573	)
Gain on sale of investment in unconsolidated joint venture		—			(59,370	)
Income from unconsolidated joint ventures		(4,197	)		(2,585	)
Development and management services income		(9,957	)		(9,698	)

Net Operating Income (NOI)		403,260			394,529

Add:
BXP’s share of NOI from unconsolidated joint ventures		16,459	(1)		14,762

Subtract:
Partners’ share of NOI from consolidated joint ventures		(45,143	)(2)		(43,983	)

BXP’s Share of NOI		374,576			365,308

Subtract:
Termination income		(756	)		(504	)
BXP’s share of termination income from unconsolidated joint ventures		(66	)(1)		(13	)
Add:
Partners’ share of termination income from consolidated joint ventures		6	(2)		31

BXP’s Share of NOI (excluding termination income)	$	373,760		$	364,822

Net Operating Income (NOI)	$	403,260		$	394,529
Subtract:
Termination income		(756	)		(504	)
NOI from non Same Properties (excluding termination income) (3)		(5,227	)		(135	)

Same Property NOI (excluding termination income)		397,277			393,890

Subtract:
Partners’ share of NOI from consolidated joint ventures (excluding termination income)		(45,137	)(2)		(43,952	)
Add:
Partners’ share of NOI from non Same Properties from consolidated joint ventures (excluding termination income) (3)		48			(562	)
BXP’s share of NOI from unconsolidated joint ventures (excluding termination income)		16,393	(1)		14,749
Subtract:
BXP’s share of NOI from non Same Properties from unconsolidated joint ventures (excluding termination income) (3)		—			(273	)

BXP’s Share of Same Property NOI (excluding termination income)	$	368,581		$	363,852

(1)	For disclosures related to the calculation of BXP’s share from unconsolidated joint ventures, see page 18.

(2)	For disclosures related to the calculation of Partners’ share from consolidated joint ventures, see page 20.

(3)	Pages 27-29 indicate by footnote the properties that are not included as part of Same Property NOI. In addition, non Same Properties include properties that were sold prior to December 31, 2017 and therefore are no longer a part of the Company’s property portfolio.

LOGO

FOURTH QUARTER 2017

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO BOSTON PROPERTIES, INC. COMMON SHAREHOLDERS TO NET OPERATING INCOME (NOI) - CASH

(in thousands)


	For the three months ended
	December 31, 2017			December 31, 2016
Net income attributable to Boston Properties, Inc. common shareholders	$	103,829		$	147,214
Preferred dividends		2,625			2,704

Net income attributable to Boston Properties, Inc.		106,454			149,918
Net income attributable to noncontrolling interests:
Noncontrolling interest - common units of the Operating Partnership		11,884			17,097
Noncontrolling interest in property partnerships		13,865			(2,121	)

Net income		132,203			164,894
Gains on sales of real estate		(872	)		—

Income before gains on sales of real estate		131,331			164,894

Add:
Interest expense		91,772			97,896
Losses from early extinguishments of debt		13,858			—
Depreciation and amortization		154,259			178,032
Transaction costs		96			1,200
General and administrative expense		29,396			25,293
Subtract:
Gains from investments in securities		(962	)		(560	)
Interest and other income		(2,336	)		(573	)
Gain on sale of investment in unconsolidated joint venture		—			(59,370	)
Income from unconsolidated joint ventures		(4,197	)		(2,585	)
Development and management services income		(9,957	)		(9,698	)

Net Operating Income (NOI)		403,260			394,529

Subtract:
Straight-line rent		(22,323	)		(14,711	)
Fair value lease revenue		(5,655	)		(6,840	)
Termination income		(756	)		(504	)
Add:
Straight-line ground rent expense adjustment (1)		929			971
Lease transaction costs that qualify as rent inducements (2)		225			487

NOI - cash (excluding termination income)		375,680			373,932

Subtract:
NOI - cash from non Same Properties (excluding termination income) (3)		(6,884	)		(23	)

Same Property NOI - cash (excluding termination income)		368,796			373,909

Subtract:
Partners’ share of NOI - cash from consolidated joint ventures (excluding termination income)		(40,084	)(4)		(40,655	)
Add:
Partners’ share of NOI - cash from non Same Properties from consolidated joint ventures (excluding termination income) (3)		192			(600	)
BXP’s share of NOI - cash from unconsolidated joint ventures (excluding termination income)		13,557	(5)		10,602
Subtract:
BXP’s share of NOI - cash from non Same Properties from unconsolidated joint ventures (excluding termination income) (3)		—			(153	)

BXP’s Share of Same Property NOI - cash (excluding termination income)	$	342,461		$	343,103

(1)

In light of the front-ended, uneven rental payments required by the Company’s 99-year ground and air rights lease for the 100 Clarendon Street garage and Back Bay Transit Station in Boston, MA, and to make period-to-period comparisons more meaningful to investors, the adjustment does not include the straight-line impact of approximately $(31) and $27 for the three months ended December 31, 2017 and 2016, respectively. As of December 31, 2017, the Company has remaining lease payments aggregating approximately $26.4 million, all of which it expects to incur by the end of 2021 with no payments thereafter. Under GAAP, the Company is recognizing expense of $(87) per quarter on a straight-line basis over the term of the lease. However, unlike more traditional ground and air rights leases, the timing and amounts of the rental payments by the Company correlate to the uneven timing and funding by the Company of capital expenditures related to improvements at Back Bay Transit Station. As a result, the amounts excluded from the adjustment each quarter through 2021 may vary significantly.

(2)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 12.

(3)	Pages 27-29 indicate by footnote the properties that are not included as part of Same Property NOI. In addition, non Same Properties include dispositions that occurred prior to December 31, 2017 and therefore are no longer a part of the Company’s property portfolio.

(4)	For disclosures related to the calculation of Partners’ share from consolidated joint ventures, see page 20.

(5)	For disclosures related to the calculation of BXP’s share from unconsolidated joint ventures, see page 18.

LOGO

FOURTH QUARTER 2017

SAME PROPERTY NET OPERATING INCOME (NOI) BY REPORTABLE SEGMENT

(dollars in thousands)


	Office (1)										Hotel & Residential
	For the three months ended										For the three months ended
	31-Dec-17		31-Dec-16		$ Change			% Change			31-Dec-17		31-Dec-16		$ Change			% Change
Rental Revenue	$	619,807	$	606,923							$	15,880	$	15,155
Less: Termination income		737		502								—		—

Rental revenue (excluding termination income) (2)		619,070		606,421	$	12,649			2.1	%		15,880		15,155	$	725			4.8	%

Less: Operating expenses and real estate taxes		228,017		218,303		9,714			4.4	%		9,656		9,383		273			2.9	%

NOI (excluding termination income) (3)	$	391,053	$	388,118	$	2,935			0.8	%	$	6,224	$	5,772	$	452			7.8	%

Rental revenue (excluding termination income) (2)	$	619,070	$	606,421							$	15,880	$	15,155
Less: Straight-line rent and fair value lease revenue		29,633		21,425	$	8,208			38.3	%		2		14	$	(12	)		(85.7	)%

Add: Lease transaction costs that qualify as rent inducements (4)		225		487		(262	)		(53.8	)%		—		—		—			—

Subtotal		589,662		585,483		4,179			0.7	%		15,878		15,141		737			4.9	%

Less: Operating expenses and real estate taxes		228,017		218,303		9,714			4.4	%		9,656		9,383		273			2.9	%
Add: Straight-line ground rent expense (5)		929		971		(42	)		(4.3	)%		—		—		—			—

NOI (excluding termination income) - cash	$	362,574	$	368,151	$	(5,577	)		(1.5	)%	$	6,222	$	5,758	$	464			8.1	%


	Consolidated Total (1)										Unconsolidated Joint Ventures (BXP’s share)
	For the three months ended										For the three months ended
	31-Dec-17		31-Dec-16		$ Change			% Change			31-Dec-17		31-Dec-16		$ Change			% Change
Rental Revenue	$	635,687	$	622,078							$	26,725	$	24,369
Less: Termination income		737		502								66		13

Rental revenue (excluding termination income) (2)		634,950		621,576	$	13,374			2.2	%		26,659		24,356	$	2,303			9.5	%

Less: Operating expenses and real estate taxes		237,673		227,686		9,987			4.4	%		10,266		9,880		386			3.9	%

NOI (excluding termination income) (3)	$	397,277	$	393,890	$	3,387			0.9	%	$	16,393	$	14,476	$	1,917			13.2	%

Rental revenue (excluding termination income) (2)	$	634,950	$	621,576							$	26,659	$	24,356
Less: Straight-line rent and fair value lease revenue		29,635		21,439	$	8,196			38.2	%		3,321		4,070	$	(749	)		(18.4	)%

Add: Lease transaction costs that qualify as rent inducements (4)		225		487		(262	)		(53.8	)%		485		43		442			1,027.9	%

Subtotal		605,540		600,624		4,916			0.8	%		23,823		20,329		3,494			17.2	%

Less: Operating expenses and real estate taxes		237,673		227,686		9,987			4.4	%		10,266		9,880		386			3.9	%
Add: Straight-line ground rent expense (5)		929		971		(42	)		(4.3	)%		—		—		—			—

NOI (excluding termination income) - cash (6)	$	368,796	$	373,909	$	(5,113	)		(1.4	)%	$	13,557	$	10,449	$	3,108			29.7	%


	Partners’ share of Consolidated Joint Ventures										BXP’s Share (7)
	For the three months ended										For the three months ended
	31-Dec-17		31-Dec-16		$ Change			% Change			31-Dec-17		31-Dec-16		$ Change			% Change
Rental Revenue	$	70,875	$	69,395							$	591,537	$	577,052
Less: Termination income		—		30								803		485

Rental revenue (excluding termination income) (2)		70,875		69,365	$	1,510			2.2	%		590,734		576,567	$	14,167			2.5	%

Less: Operating expenses and real estate taxes		25,786		24,851		935			3.8	%		222,153		212,715		9,438			4.4	%

NOI (excluding termination income) (3)	$	45,089	$	44,514	$	575			1.3	%	$	368,581	$	363,852	$	4,729			1.3	%

Rental revenue (excluding termination income) (2)	$	70,875	$	69,365							$	590,734	$	576,567
Less: Straight-line rent and fair value lease revenue		5,213		3,259	$	1,954			60.0	%		27,743		22,250	$	5,493			24.7	%

Add: Lease transaction costs that qualify as rent inducements (4)		16		—		16			100.0	%		694		530		164			30.9	%

Subtotal		65,678		66,106		(428	)		(0.6	)%		563,685		554,847		8,838			1.6	%

Less: Operating expenses and real estate taxes		25,786		24,851		935			3.8	%		222,153		212,715		9,438			4.4	%
Add: Straight-line ground rent expense (5)		—		—		—			—			929		971		(42	)		(4.3	)%

NOI (excluding termination income) - cash (6)	$	39,892	$	41,255	$	(1,363	)		(3.3	)%	$	342,461	$	343,103	$	(642	)		(0.2	)%

(1)

Includes 100% share of consolidated joint ventures. Same Property consolidated joint venture properties include (a) 767 Fifth Avenue (The GM Building), 601 Lexington Avenue (excluding the portion removed from the complex as part of a planned redevelopment) and Times Square Tower in New York City and (b) 100 Federal Street and Atlantic Wharf Office Building in Boston, MA.

(2)

Rental Revenue (excluding termination income) is used internally by the Company as a performance measure and provides investors with additional information regarding operating performance at a property level that allows them to compare operating performance between periods without taking into account termination income, which can distort the results for any given period because they generally represent multiple months or years of a tenant’s rental obligations that are paid in a lump sum in connection with a negotiated early termination of the tenant’s lease and are not reflective of the core ongoing operating performance of the Company’s properties.

(3)	For a quantitative reconciliation of net income attributable to Boston Properties, Inc. common shareholders to net operating income (NOI) (excluding termination income), see page 21. For disclosures relating to the Company’s use of NOI, see page 48.

(4)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 12.

(5)

Excludes the straight-line impact of approximately $(31) and $27 for the three months ended December 31, 2017 and 2016, respectively, in connection with the Company’s 99-year ground and air rights lease at 100 Clarendon Street garage and Back Bay Transit Station. For additional information, see page 22.

(6)	For a quantitative reconciliation of net income attributable to Boston Properties, Inc. common shareholders to NOI - cash (excluding termination income), see page 22. For disclosures relating to the Company’s use of NOI, see page 48.

(7)	For disclosures relating to the Company’s definition and use of BXP’s Share, see page 47.

LOGO

FOURTH QUARTER 2017

RESIDENTIAL and HOTEL PERFORMANCE

Rental Rates and Occupancy


	Fourth Quarter						Percent			YTD						Percent
	2017			2016			Change			2017			2016			Change
*The Avant at Reston Town Center (359 units)*
*Reston, VA*
Average Monthly Rental Rate (1)	$	2,390		$	2,417			(1.1	)%	$	2,391		$	2,385			0.3	%
Average Rental Rate Per Occupied Square Foot (1)	$	2.65		$	2.64			0.4	%	$	2.64		$	2.62			0.8	%
Average Physical Occupancy (1) (2)		93.7	%		91.9	%		2.0	%		93.8	%		93.6	%		0.2	%
Average Economic Occupancy (2)		92.0	%		92.2	%		(0.2	)%		92.7	%		93.6	%		(1.0	)%

*The Lofts at Atlantic Wharf (86 units)*
*Boston, MA*
Average Monthly Rental Rate (3)	$	4,237		$	4,167			1.7	%	$	4,245		$	4,154			2.2	%
Average Rental Rate Per Occupied Square Foot (3)	$	4.69		$	4.65			0.9	%	$	4.70		$	4.61			2.0	%
Average Physical Occupancy (2) (3)		93.8	%		93.8	%		0.0	%		94.3	%		95.6	%		(1.4	)%
Average Economic Occupancy (2)		93.2	%		94.1	%		(1.0	)%		94.8	%		96.5	%		(1.8	)%

*Boston Marriott Cambridge (437 rooms)*
*Cambridge, MA*
Average Occupancy		76.7	%		71.3	%		7.6	%		79.9	%		79.5	%		0.5	%
Average Daily Rate	$	285.11		$	279.21			2.1	%	$	276.67		$	271.38			1.9	%
Revenue per available room	$	289.19		$	199.10			45.2	%	$	221.17		$	215.71			2.5	%

Net Operating Income (dollars in thousands) (4)


	Residential									Hotel
	Fourth Quarter						Percent			Fourth Quarter					Percent
	2017			2016			Change			2017			2016		Change
Rental Revenue	$	4,136	(5)	$	4,190	(5)		(1.3	)%	$	11,744		$	10,965		7.1	%
Less: Operating expenses and real estate taxes		1,539			1,647			(6.6	)%		8,117			7,736		4.9	%

Net Operating Income	$	2,597	(5)	$	2,543	(5)		2.1	%	$	3,627		$	3,229		12.3	%

Rental Revenue	$	4,136	(5)	$	4,190	(5)				$	11,744		$	10,965
Less: Straight-line rent and fair value lease revenue		8			13			(38.5	)%		(6	)		1		(700.0	)%

Subtotal		4,128			4,177			(1.2	)%		11,750			10,964		7.2	%

Less: Operating expenses and real estate taxes		1,539			1,647			(6.6	)%		8,117			7,736		4.9	%

Net Operating Income - cash basis	$	2,589	(5)	$	2,530	(5)		2.3	%	$	3,633		$	3,228		12.5	%

(1)	Excludes 26,179 square feet of retail space that is 100% leased.

(2)	For disclosures related to the Company’s definition of Average Physical Occupancy and Average Economic Occupancy, see page 47.

(3)	Excludes 9,617 square feet of retail space that is 100% leased.

(4)	For disclosures related to the Company’s definition of Net Operating Income, see page 48.

(5)	Includes 35,796 square feet of retail space, which had revenue of approximately $497 and $600 for the three months ended December 31, 2017 and 2016, respectively.

LOGO

FOURTH QUARTER 2017

CAPITAL EXPENDITURES, TENANT IMPROVEMENT COSTS and LEASING COMMISSIONS

(dollars in thousands, except PSF amounts)

Capital Expenditures


	Q4 2017			Q3 2017			Q2 2017			Q1 2017			2016			2015			2014
Maintenance capital expenditures	$	14,221		$	12,032		$	11,643		$	10,677		$	59,838		$	56,383		$	45,618
Partners’ share of maintenance capital expenditures from consolidated joint ventures		(2,021	)		(457	)		(1,004	)		(2,129	)		(2,569	)		(5,565	)		(4,377	)
BXP’s share of maintenance capital expenditures from unconsolidated joint ventures		243			111			17			211			1,029			1,653			1,369

Hotel improvements, equipment upgrades and replacements (1)		625			289			2,502			6,231			6,801			2,430			2,894

Planned capital expenditures associated with acquisition properties		—			—			—			—			87			6,914			14,652
Partners’ share of planned capital expenditures associated with acquisition properties from consolidated joint ventures		—			—			—			—			—			(845	)		(1,565	)
BXP’s share of planned capital expenditures associated with acquisition properties from unconsolidated joint ventures		528			538			396			62			230			—			—

Repositioning capital expenditures (2)		39,812			41,155			39,582			30,722			58,446			9,744			—
Partners’ share of repositioning capital expenditures from consolidated joint ventures		(11,234	)		(11,050	)		(9,357	)		(5,740	)		(2,746	)		—			—
BXP’s share of repositioning capital expenditures from unconsolidated joint ventures (3)		124			144			105			41			494			76			—

Total BXP’s Share of Capital Expenditures	$	42,298		$	42,762		$	43,884		$	40,075		$	121,610		$	70,790		$	58,591

2nd Generation Tenant Improvements and Leasing Commissions (4)


	Q4 2017		Q3 2017		Q2 2017		Q1 2017		2016		2015		2014
Square feet		1,337,718		1,296,142		1,340,600		914,880		4,970,991		5,204,123		3,936,046

Tenant improvements and lease commissions PSF	$	65.82	$	43.66	$	63.96	$	55.92	$	62.04	$	45.40	$	29.60

(1)	Includes capital expenditures related to a rooms renovation project that was completed during Q3 2017.

(2)

Q4 2017 amount includes capital expenditures related to the repositioning activities designed to enhance revenue potential at (a) 1330 Connecticut Avenue and 1333 New Hampshire Avenue in Washington, DC, (b) 100 Federal Street (55% ownership) in Boston, MA, and (c) 399 Park Avenue and 767 Fifth Avenue (the GM Building) (60% ownership) in New York City.

(3)	Includes capital expenditures related to the repositioning activities designed to enhance revenue potential at Metropolitan Square in Washington, DC.

(4)	Includes 100% of unconsolidated joint ventures.

LOGO

FOURTH QUARTER 2017

PORTFOLIO OVERVIEW

for the three months ended December 31, 2017

(dollars in thousands)

Rentable Square Footage of In-Service Properties by Location and Unit Type (1) (2)


Geographic Area	Office			Retail			Residential			Hotel			Total
Boston		13,014,106			914,586			77,480			330,000			14,336,172
New York		11,245,176			386,828			—			—			11,632,004
San Francisco and Los Angeles		6,848,860			355,090			—			—			7,203,950
Washington, DC		9,903,031			695,785			329,195			—			10,928,011

Total		41,011,173			2,352,289			406,675			330,000			44,100,137

% of Total		93.1	%		5.3	%		0.9	%		0.7	%		100.0	%

Rentable Square Footage and Rental Revenue of In-Service Properties by Unit Type (1) (2)


			Rental Revenue
						Partners’ share			BXP’s share
						from Consolidated			from Unconsolidated
Unit Type	Square Feet		Consolidated			Joint Ventures (3)			Joint Ventures (4)		Total		% of Total
Office		41,011,173	$	555,650		$	(64,246	)	$	22,777	$	514,181		85.6	%
Retail		2,352,289		47,621			(6,097	)		1,072		42,596		7.1	%
Residential		406,675		3,509			—			—		3,509		0.6	%
Hotel		330,000		11,656	(5)		—			—		11,656		1.9	%
Parking and other		N/A		26,836	(6)		(956	)		2,665		28,545		4.8	%

Total		44,100,137	$	645,272		$	(71,299	)	$	26,514	$	600,487		100.0	%

Rentable Square Footage of In-Service Same Properties by Unit Type (1) (2) (7)


Same Properties	Office			Retail			Residential			Hotel			Total
Square Feet		40,478,263			2,298,500			406,675			330,000			43,513,438
% of Properties In-Service		98.7	%		97.7	%		100.0	%		100.0	%		98.7	%

Percentage of BXP’s Share of Net Operating Income (excluding termination income) by Location and Type of Property (8)


Geographic Area	Office			Residential			Hotel			Total
Boston		31.8	%		0.2	%		1.0	%		33.0	%
New York		28.6	%		—			—			28.6	%
San Francisco and Los Angeles		17.9	%		—			—			17.9	%
Washington, DC		20.0	%		0.5	%		—			20.5	%

Total		98.3	%		0.7	%		1.0	%		100.0	%


Geographic Area	CBD			Suburban			Total
Boston		25.8	%		7.2	%		33.0	%
New York		26.0	%		2.6	%		28.6	%
San Francisco and Los Angeles		14.7	%		3.2	%		17.9	%
Washington, DC		8.8	%		11.7	%		20.5	%

Total		75.3	%		24.7	%		100.0	%

(1)	For the definition of In-Service Properties and related disclosures, see page 48.

(2)	Includes 100% of the rentable square footage of the Company’s In-Service Properties. For additional detail relating to the Company’s In-Service Properties, see pages 27-29.

(3)	For additional information, see page 20.

(4)	For additional information, see page 18.

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

(6)	Includes approximately $3,000 of other income.

(7)	Pages 27-29 indicate by footnote the properties that are not included as part of Same Properties.

(8)

BXP’s Share of Net Operating Income (NOI) (excluding termination income) is a non-GAAP financial measure. For a quantitative reconciliation of net income attributable to Boston Properties, Inc. common shareholders to BXP’s Share of NOI (excluding termination income), see page 21. For disclosures relating to the Company’s use of BXP’s Share of NOI (excluding termination income), see pages 47-48.

LOGO

FOURTH QUARTER 2017

IN-SERVICE PROPERTY LISTING

as of December 31, 2017


												Encumbered		Central
										Annualized		with secured		Business
			Number of							Rental Obligations		debt		District (CBD) or
		Sub Market	Buildings		Square Feet		Leased % (1)			Per Leased SF (2)		(Y/N)		Suburban (S)
Boston
Office
	200 Clarendon Street	CBD Boston MA		1		1,764,440		92.1	%	$	62.74		N		CBD
	100 Federal Street (55% ownership)	CBD Boston MA		1		1,247,849		93.5	%		54.44		N		CBD
	800 Boylston Street - The Prudential Center	CBD Boston MA		1		1,235,538		95.2	%		61.09		N		CBD
	111 Huntington Avenue - The Prudential Center	CBD Boston MA		1		860,455		97.3	%		62.65		N		CBD
	Atlantic Wharf Office (55% ownership)	CBD Boston MA		1		793,827		100.0	%		69.80		N		CBD
(3)(4)	Prudential Center (retail shops)	CBD Boston MA		1		594,109		95.6	%		87.99		N		CBD
	101 Huntington Avenue - The Prudential Center	CBD Boston MA		1		505,584		90.3	%		49.55		N		CBD
(5)	888 Boylston Street - The Prudential Center	CBD Boston MA		1		363,320		88.7	%		68.51		N		CBD
(3)	Star Market at the Prudential Center	CBD Boston MA		1		57,235		100.0	%		54.44		N		CBD

				9		7,422,357		94.3	%	$	63.28

	355 Main Street	East Cambridge MA		1		265,342		100.0	%	$	66.01		N		CBD
	90 Broadway	East Cambridge MA		1		223,771		100.0	%		52.75		N		CBD
	255 Main Street	East Cambridge MA		1		215,629		98.8	%		55.41		N		CBD
	300 Binney Street	East Cambridge MA		1		195,191		100.0	%		53.13		N		CBD
	150 Broadway	East Cambridge MA		1		177,226		100.0	%		47.57		N		CBD
	105 Broadway	East Cambridge MA		1		152,664		100.0	%		62.51		N		CBD
	325 Main Street	East Cambridge MA		1		115,361		100.0	%		49.67		N		CBD
	250 Binney Street	East Cambridge MA		1		67,362		100.0	%		44.40		N		CBD
	University Place	Mid-Cambridge MA		1		195,282		100.0	%		47.80		Y		CBD

				9		1,607,828		99.8	%	$	54.52

	Bay Colony Corporate Center	Route 128 Mass Turnpike MA		4		997,209		90.3	%	$	40.80		N		S
	Reservoir Place	Route 128 Mass Turnpike MA		1		526,985		99.0	%		37.22		N		S
	140 Kendrick Street	Route 128 Mass Turnpike MA		3		380,987		100.0	%		37.96		N		S
	Weston Corporate Center	Route 128 Mass Turnpike MA		1		356,995		100.0	%		52.54		N		S
	Waltham Weston Corporate Center	Route 128 Mass Turnpike MA		1		301,667		93.4	%		37.34		N		S
	230 CityPoint	Route 128 Mass Turnpike MA		1		298,890		92.2	%		36.56		N		S
	200 West Street	Route 128 Mass Turnpike MA		1		256,245		94.7	%		37.39		N		S
	10 CityPoint	Route 128 Mass Turnpike MA		1		241,199		96.8	%		48.70		N		S
	77 CityPoint	Route 128 Mass Turnpike MA		1		209,707		100.0	%		48.18		N		S
(6)	1265 Main Street (50% ownership)	Route 128 Mass Turnpike MA		1		114,969		100.0	%		44.81		Y		S
(5)	Reservoir Place North	Route 128 Mass Turnpike MA		1		73,258		0.0	%		—		N		S
	195 West Street	Route 128 Mass Turnpike MA		1		63,500		100.0	%		41.24		N		S
	Quorum Office Park	Route 128 Northwest MA		2		267,527		90.0	%		19.47		N		S
	Lexington Office Park	Route 128 Northwest MA		2		166,693		68.4	%		28.14		N		S
	91 Hartwell Avenue	Route 128 Northwest MA		1		119,216		93.2	%		28.03		N		S
	201 Spring Street	Route 128 Northwest MA		1		106,300		100.0	%		37.87		N		S
	33 Hayden Avenue	Route 128 Northwest MA		1		80,872		100.0	%		43.43		N		S
	32 Hartwell Avenue	Route 128 Northwest MA		1		69,154		100.0	%		28.33		N		S
	164 Lexington Road	Route 128 Northwest MA		1		64,140		0.0	%		—		N		S
	100 Hayden Avenue	Route 128 Northwest MA		1		55,924		100.0	%		42.77		N		S
	181 Spring Street	Route 128 Northwest MA		1		55,793		100.0	%		37.89		N		S
	92 Hayden Avenue	Route 128 Northwest MA		1		31,100		100.0	%		40.50		N		S
	17 Hartwell Avenue	Route 128 Northwest MA		1		30,000		100.0	%		45.38		N		S
(3)	The Point	Route 128 Northwest MA		1		16,300		84.7	%		57.65		N		S

				31		4,884,630		91.9	%	$	39.35

		Total Boston Office:		49		13,914,815		94.1	%	$	53.95

Residential
	The Lofts at Atlantic Wharf (86 units)	CBD Boston MA		1		87,097							N		CBD

		Total Boston Residential:		1		87,097

Hotel
	Boston Marriott Cambridge (437 rooms)	East Cambridge MA		1		334,260							N		CBD

		Total Boston Hotel:		1		334,260

		Total Boston:		51		14,336,172

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

(2)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(3)	This is a retail property.

(4)	Includes approximately 54,000 square feet of retail space, that was a part of 888 Boylston Street during development, that is excluded from Same Property analysis.

(5)	Not included in Same Property analysis.

(6)	This is an unconsolidated joint venture property.

LOGO

FOURTH QUARTER 2017

IN-SERVICE PROPERTY LISTING (continued)

as of December 31, 2017


														Central
										Annualized		Encumbered		Business
			Number of							Rental Obligations		with secured		District (CBD) or
		Sub Market	Buildings		Square Feet		Leased % (1)			Per Leased SF (2)		debt (Y/N)		Suburban (S)
New York
Office
	767 Fifth Avenue (The GM Building) (60% ownership)	Plaza District NY		1		1,855,282		90.6	%	$	150.18		Y		CBD
	399 Park Avenue	Park Avenue NY		1		1,723,871		75.8	%		86.35		N		CBD
(3)	601 Lexington Avenue (55% ownership)	Park Avenue NY		1		1,437,044		98.7	%		96.27		Y		CBD
	599 Lexington Avenue	Park Avenue NY		1		1,062,601		94.5	%		90.29		N		CBD
	Times Square Tower (55% ownership)	Times Square NY		1		1,252,109		95.8	%		79.23		N		CBD
	250 West 55th Street	Times Square / West Side NY		1		981,143		89.2	%		88.24		N		CBD
	510 Madison Avenue	Fifth/Madison Avenue NY		1		355,598		96.9	%		126.53		N		CBD
(4)	540 Madison Avenue (60% ownership)	Fifth/Madison Avenue NY		1		283,715		88.9	%		98.63		Y		CBD

				8		8,951,363		90.3	%	$	103.10

	One Tower Center	East Brunswick NJ		1		412,997		37.3	%	$	30.80		N		S
	510 Carnegie Center	Princeton NJ		1		234,160		100.0	%		35.00		N		S
	206 Carnegie Center	Princeton NJ		1		161,763		100.0	%		31.79		N		S
	210 Carnegie Center	Princeton NJ		1		159,468		100.0	%		37.85		N		S
	212 Carnegie Center	Princeton NJ		1		151,547		54.6	%		37.48		N		S
	214 Carnegie Center	Princeton NJ		1		148,942		61.2	%		36.34		N		S
	506 Carnegie Center	Princeton NJ		1		140,312		29.9	%		40.17		N		S
	508 Carnegie Center	Princeton NJ		1		134,433		100.0	%		34.92		N		S
	202 Carnegie Center	Princeton NJ		1		134,381		82.5	%		38.21		N		S
	804 Carnegie Center	Princeton NJ		1		130,000		100.0	%		37.10		N		S
	504 Carnegie Center	Princeton NJ		1		121,990		100.0	%		30.75		N		S
	101 Carnegie Center	Princeton NJ		1		121,620		100.0	%		36.48		N		S
	502 Carnegie Center	Princeton NJ		1		121,460		71.8	%		35.89		N		S
	701 Carnegie Center	Princeton NJ		1		120,000		100.0	%		39.76		N		S
	104 Carnegie Center	Princeton NJ		1		102,830		39.8	%		36.15		N		S
(5)	103 Carnegie Center	Princeton NJ		1		96,332		77.7	%		28.75		N		S
	105 Carnegie Center	Princeton NJ		1		69,955		56.3	%		32.99		N		S
	302 Carnegie Center	Princeton NJ		1		64,926		100.0	%		33.74		N		S
	211 Carnegie Center	Princeton NJ		1		47,025		100.0	%		33.40		N		S
	201 Carnegie Center	Princeton NJ		—		6,500		100.0	%		34.36		N		S

				19		2,680,641		75.5	%	$	35.04

		Total New York:		27		11,632,004		86.9	%	$	89.46

San Francisco and Los Angeles
Office
	Embarcadero Center Four	CBD San Francisco CA		1		938,749		87.8	%	$	69.95		N		CBD
	Embarcadero Center One	CBD San Francisco CA		1		832,030		93.0	%		63.44		N		CBD
	Embarcadero Center Two	CBD San Francisco CA		1		789,114		94.6	%		67.77		N		CBD
	Embarcadero Center Three	CBD San Francisco CA		1		781,475		89.7	%		62.13		N		CBD
	680 Folsom Street	CBD San Francisco CA		2		524,793		98.9	%		61.23		N		CBD
	535 Mission Street	CBD San Francisco CA		1		307,235		100.0	%		75.34		N		CBD
	690 Folsom Street	CBD San Francisco CA		1		26,080		100.0	%		72.62		N		CBD

				8		4,199,476		92.8	%	$	66.09

	601 and 651 Gateway	South San Francisco CA		2		506,279		100.0	%	$	41.52		N		S
	611 Gateway	South San Francisco CA		1		260,197		29.8	%		39.45		N		S
	Mountain View Research Park	Mountain View CA		15		540,433		94.3	%		46.87		N		S
	2440 West El Camino Real	Mountain View CA		1		141,392		100.0	%		66.38		N		S
	453 Ravendale Drive	Mountain View CA		1		29,620		65.7	%		38.29		N		S
(6)	3625-3635 Peterson Way	Santa Clara CA		1		218,366		100.0	%		22.22		N		S
(6)	North First Business Park	San Jose CA		5		190,636		54.9	%		24.31		N		S

				26		1,886,923		83.6	%	$	41.53

(4)	Colorado Center (50.0% ownership)	West Los Angeles CA		6		1,117,551		85.6	%	$	58.32		Y		CBD

		Total San Francisco and
		Los Angeles:		40		7,203,950		89.3	%	$	58.91

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

(2)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(3)	Excludes the portion that was removed from the in-service portfolio in Q3 2016 as part of a planned redevelopment. For additional detail, see page 45.

(4)	This is an unconsolidated joint venture property.

(5)	Not included in Same Property analysis.

(6)	Property held for redevelopment.

LOGO

FOURTH QUARTER 2017

IN-SERVICE PROPERTY LISTING (continued)

as of December 31, 2017


		Sub Market	Number of Buildings		Square Feet		Leased % (1)			Annualized Rental Obligations Per Leased SF (2)			Encumbered with secured debt (Y/N)		Central Business District (CBD) or Suburban (S)
Washington, DC
Office
	Capital Gallery	Southwest Washington DC		1		631,029		100.0	%	$	60.89			N		CBD
(3)	500 E Street, S.W.	Southwest Washington DC		1		262,202		100.0	%		45.49			N		CBD
(4)(5)	Metropolitan Square (20% ownership)	East End Washington DC		1		606,927		74.8	%		62.95			Y		CBD
(4)	901 New York Avenue (25% ownership)	East End Washington DC		1		539,435		90.9	%		66.99			Y		CBD
	601 Massachusetts Avenue	East End Washington DC		1		478,818		96.4	%		75.30			N		CBD
(4)	Market Square North (50% ownership)	East End Washington DC		1		416,043		76.6	%		67.02			Y		CBD
	2200 Pennsylvania Avenue	CBD Washington DC		1		458,831		100.0	%		91.54			N		CBD
	1333 New Hampshire Avenue	CBD Washington DC		1		315,371		100.0	%		48.30			N		CBD
	1330 Connecticut Avenue	CBD Washington DC		1		253,145		86.8	%		61.47			N		CBD
	Sumner Square	CBD Washington DC		1		208,892		98.5	%		51.91			N		CBD
(4)	500 North Capitol Street, N.W. (30% ownership)	Capitol Hill Washington DC		1		230,860		100.0	%		70.07			Y		CBD

				11		4,401,553		92.0	%	$	65.44

	South of Market	Reston VA		3		623,666		98.7	%	$	56.84			N		S
	Fountain Square	Reston VA		2		518,345		88.0	%		50.32			N		S
	One Freedom Square	Reston VA		1		432,585		92.8	%		49.51			N		S
	Two Freedom Square	Reston VA		1		421,757		100.0	%		47.96			N		S
	One and Two Discovery Square	Reston VA		2		366,990		97.7	%		46.25			N		S
	One Reston Overlook	Reston VA		1		319,519		100.0	%		40.01			N		S
	Reston Corporate Center	Reston VA		2		261,046		100.0	%		40.76			N		S
	Democracy Tower	Reston VA		1		259,441		100.0	%		62.10			N		S
(6)	Fountain Square Retail	Reston VA		1		237,209		96.6	%		52.22			N		S
	Two Reston Overlook	Reston VA		1		134,615		100.0	%		39.45			N		S

				15		3,575,173		96.7	%	$	49.57

	Wisconsin Place Office	Montgomery County MD		1		299,186		100.0	%	$	51.85			N		S
	2600 Tower Oaks Boulevard	Montgomery County MD		1		179,421		50.2	%		29.41			N		S
	New Dominion Technology Park - Building Two	Herndon VA		1		257,400		100.0	%		42.87			N		S
	New Dominion Technology Park - Building One	Herndon VA		1		235,201		100.0	%		35.55			Y		S
	Kingstowne Two	Springfield VA		1		156,251		79.0	%		39.46			N		S
	Kingstowne One	Springfield VA		1		151,483		78.3	%		41.41			N		S
	7601 Boston Boulevard	Springfield VA		1		114,028		100.0	%		18.93			N		S
	7435 Boston Boulevard	Springfield VA		1		103,557		83.4	%		23.10			N		S
	8000 Grainger Court	Springfield VA		1		88,775		100.0	%		21.08			N		S
(6)	Kingstowne Retail	Springfield VA		1		88,288		100.0	%		36.56			N		S
	7500 Boston Boulevard	Springfield VA		1		79,971		100.0	%		16.63			N		S
	7501 Boston Boulevard	Springfield VA		1		75,756		100.0	%		29.01			N		S
	7450 Boston Boulevard	Springfield VA		1		62,402		100.0	%		15.44			N		S
	7374 Boston Boulevard	Springfield VA		1		57,321		100.0	%		18.05			N		S
	8000 Corporate Court	Springfield VA		1		52,539		100.0	%		14.70			N		S
	7451 Boston Boulevard	Springfield VA		1		45,615		67.4	%		26.69			N		S
	7300 Boston Boulevard	Springfield VA		1		32,000		0.0	%		—			N		S
	7375 Boston Boulevard	Springfield VA		1		26,865		100.0	%		26.41			N		S
(4)	Annapolis Junction Building Seven (50% ownership)	Anne Arundel County MD		1		127,229		100.0	%		31.79			Y		S
(4)	Annapolis Junction Building Eight (50% ownership)	Anne Arundel County MD		1		125,685		0.0	%		—			Y		S
(4)	Annapolis Junction Building Six (50% ownership)	Anne Arundel County MD		1		119,339		75.2	%		30.57			Y		S
(4)	Annapolis Junction Building One (50% ownership)	Anne Arundel County MD		1		117,599		34.6	%		95.81			Y		S

				22		2,595,911		82.6	%	$	35.03

		Total Washington Office:		48		10,572,637		91.3	%	$	53.00

Residential
	The Avant at Reston Town Center (359 units)	Reston VA		1		355,374								N		S

		Total Washington Residential:		1		355,374

		Total Washington, DC:		49		10,928,011

		Total In-Service Properties:		167		44,100,137		90.7	%(7)	$	63.66	(7)

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

(2)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(3)	On January 9, 2018, the Company completed the sale of this property. For additional information, reference the Company’s fourth quarter earnings press release.

(4)	This is an unconsolidated joint venture property.

(5)

On October 20, 2016, the Company and its partner in the unconsolidated joint venture that owns Metropolitan Square, completed the sale of an 80% interest in the joint venture. Prior to the sale, the Company owned a 51% interest in the joint venture. Following the sale, the Company continues to own a 20% interest in the joint venture. As a result, 31% of operating activities prior to the sale is not included in the Company’s Same Property analysis.

(6)	This is a retail property.

(7)	Excludes Hotel and Residential properties. For disclosures relating to the Company’s Hotel and Residential properties, see page 24.

LOGO

FOURTH QUARTER 2017

OCCUPANCY BY LOCATION

Total In-Service Properties (1)


	CBD						Suburban						Total
Location	31-Dec-17			31-Dec-16			31-Dec-17			31-Dec-16			31-Dec-17			31-Dec-16
Boston		95.3	%		91.8	%		91.9	%		88.7	%		94.1	%		90.7	%
New York		90.3	%		94.2	%		75.5	%		76.4	%		86.9	%		90.2	%
San Francisco and Los Angeles		91.3	%		90.6	%		83.6	%		87.6	%		89.3	%		89.8	%
Washington, DC		92.0	%		92.2	%		90.8	%		88.3	%		91.3	%		89.9	%

Total Portfolio		92.4	%		92.4	%		87.7	%		86.4	%		90.7	%		90.2	%

Same Property Portfolio (1) (2)


	CBD						Suburban						Total
Location	31-Dec-17			31-Dec-16			31-Dec-17			31-Dec-16			31-Dec-17			31-Dec-16
Boston		95.8	%		91.7	%		93.3	%		89.2	%		94.9	%		90.8	%
New York		90.3	%		94.2	%		75.5	%		76.4	%		87.0	%		90.2	%
San Francisco and Los Angeles		91.3	%		90.6	%		83.6	%		87.6	%		89.3	%		89.8	%
Washington, DC		92.0	%		92.2	%		90.8	%		88.3	%		91.3	%		89.9	%

Total Portfolio		92.5	%		92.4	%		88.1	%		86.5	%		90.9	%		90.3	%

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

(2)	For disclosures related to the Company’s definition of Same Properties, see page 48.

LOGO

FOURTH QUARTER 2017

TOP 20 TENANTS LISTING AND PORTFOLIO TENANT DIVERSIFICATION

TOP 20 TENANTS (1)


		% of BXP’s Share of
	Tenant	Annualized Rental Obligations
1.	Arnold & Porter Kaye Scholer		3.22	%
2.	US Government		2.71	%
3.	Biogen		1.93	%
4.	Kirkland & Ellis		1.71	%
5.	Shearman & Sterling		1.71	%
6.	Ropes & Gray		1.56	%
7.	O’Melveny & Myers		1.28	%
8.	Google		1.27	%
9.	Wellington Management		1.21	%
10.	Bank of America		1.17	%
11.	Starr Indemnity & Liability Co.		1.16	%
12.	Weil Gotshal & Manges		1.05	%
13.	Aramis (Estee Lauder)		1.01	%
14.	Mass Financial Services		0.97	%
15.	Citibank		0.89	%
16.	Microsoft		0.86	%
17.	Hunton & Williams		0.85	%
18.	Morrison & Foerster		0.84	%
19.	WeWork		0.83	%
20.	Smithsonian Institution		0.79	%

	BXP’s Share of Annualized Rental Obligations		27.02	%

	BXP’s Share of Square Feet		22.32	%

NOTABLE SIGNED DEALS (2)


Tenant	Property	Square Feet
salesforce.com	Salesforce Tower		886,000	(3)
Marriott International	7750 Wisconsin Avenue		722,000	(4)
US Government	6595 Springfield Center Drive		625,000
Akamai Technologies	145 Broadway		477,000

TENANT DIVERSIFICATION (1)

LOGO

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations and Rental Obligations, see pages 47-48.

(2)	Represents leases signed with occupancy commencing in the future.

(3)	As of December 31, 2017, approximately 100,000 square feet has been placed in-service.

(4)	Subject to adjustment based on final building design, which is currently estimated to be approximately 740,000 rentable square feet, see page 45.

LOGO

FOURTH QUARTER 2017

LEASE EXPIRATIONS (1) (2) (3)

IN-SERVICE OFFICE PROPERTIES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases p.s.f.		Annualized Rental Obligations Under Expiring Leases with future step-ups		Annualized Rental Obligations Under Expiring Leases with future step-ups - p.s.f.		Percentage of Total Square Feet
2017		238,416	$	12,860,091	$	53.94	$	12,860,091	$	53.94		0.61	%(4)
2018		1,494,085		93,148,101		62.34		93,591,073		62.64		3.84	%
2019		3,236,284		166,391,887		51.41		169,215,570		52.29		8.31	%
2020		4,019,717		248,602,065		61.85		252,563,118		62.83		10.32	%
2021		3,740,678		199,990,992		53.46		211,656,341		56.58		9.60	%
2022		4,031,493		246,072,799		61.04		257,031,640		63.76		10.35	%
2023		1,737,479		97,541,176		56.14		110,261,480		63.46		4.46	%
2024		3,019,318		177,627,452		58.83		192,350,137		63.71		7.75	%
2025		2,495,962		144,303,377		57.81		163,445,961		65.48		6.41	%
2026		2,618,481		196,750,472		75.14		217,089,530		82.91		6.72	%
Thereafter		10,164,908		698,817,204		68.75		897,889,416		88.33		26.10	%

IN-SERVICE RETAIL PROPERTIES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases p.s.f.		Annualized Rental Obligations Under Expiring Leases with future step-ups		Annualized Rental Obligations Under Expiring Leases with future step-ups - p.s.f.		Percentage of Total Square Feet
2017		3,277	$	318,757	$	97.27	$	318,757	$	97.27		0.16	%(4)
2018		80,421		16,145,372		200.76		16,399,239		203.92		3.91	%
2019		118,818		8,443,154		71.06		9,203,262		77.46		5.77	%
2020		198,836		12,814,738		64.45		12,861,292		64.68		9.66	%
2021		150,963		21,233,849		140.66		22,785,426		150.93		7.33	%
2022		240,960		18,728,167		77.72		19,298,301		80.09		11.71	%
2023		206,303		16,641,466		80.67		17,996,292		87.23		10.02	%
2024		115,562		10,864,784		94.02		12,320,161		106.61		5.61	%
2025		132,139		8,888,365		67.27		9,783,872		74.04		6.42	%
2026		111,807		13,823,596		123.64		16,143,593		144.39		5.43	%
Thereafter		699,289		60,351,080		86.30		96,869,238		138.53		33.97	%

TOTAL IN-SERVICE PROPERTIES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases p.s.f.		Annualized Rental Obligations Under Expiring Leases with future step-ups		Annualized Rental Obligations Under Expiring Leases with future step-ups - p.s.f.		Percentage of Total Square Feet
2017		241,693	$	13,178,848	$	54.53	$	13,178,848	$	54.53		0.59	%(4)
2018		1,574,506		109,293,473		69.41		109,990,312		69.86		3.84	%
2019		3,355,102		174,835,041		52.11		178,418,832		53.18		8.18	%
2020		4,218,553		261,416,803		61.97		265,424,410		62.92		10.29	%
2021		3,891,641		221,224,842		56.85		234,441,767		60.24		9.49	%
2022		4,272,453		264,800,966		61.98		276,329,942		64.68		10.42	%
2023		1,943,782		114,182,643		58.74		128,257,772		65.98		4.74	%
2024		3,134,880		188,492,236		60.13		204,670,298		65.29		7.64	%
2025		2,628,101		153,191,742		58.29		173,229,833		65.91		6.41	%
2026		2,730,288		210,574,068		77.13		233,233,122		85.42		6.66	%
Thereafter		10,864,197		759,168,283		69.88		994,758,653		91.56		26.49	%

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

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

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

LOGO

FOURTH QUARTER 2017

IN-SERVICE BOSTON REGION PROPERTIES

Lease Expirations - Boston Region (1) (2) (3)

OFFICE


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		129,975	$	7,293,283	$	56.11	$	7,293,283	$	56.11	(4)
2018		301,377		11,991,733		39.79		12,004,319		39.83
2019		768,442		36,606,486		47.64		36,741,792		47.81
2020		560,530		27,895,995		49.77		28,842,108		51.46
2021		1,088,879		44,534,651		40.90		45,562,848		41.84
2022		1,523,763		79,421,799		52.12		80,878,668		53.08
2023		692,538		35,333,026		51.02		40,332,926		58.24
2024		833,442		40,729,145		48.87		43,080,677		51.69
2025		1,093,249		62,034,817		56.74		69,436,611		63.51
2026		1,063,282		71,751,228		67.48		78,900,356		74.20
Thereafter		4,056,465		214,186,106		52.80		255,394,320		62.96

RETAIL


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		3	$	193,000	$	64,333.32	$	193,000	$	64,333.32	(4)
2018		27,714		3,463,984		124.99		3,463,984		124.99
2019		11,787		1,988,674		168.72		1,992,032		169.00
2020		93,218		6,190,455		66.41		6,305,591		67.64
2021		30,208		2,468,156		81.71		2,575,611		85.26
2022		110,729		7,228,345		65.28		7,309,280		66.01
2023		80,258		7,852,405		97.84		8,310,597		103.55
2024		72,205		4,404,860		61.00		4,834,235		66.95
2025		30,224		3,806,380		125.94		4,159,596		137.63
2026		18,912		5,121,496		270.81		5,945,295		314.37
Thereafter		371,482		23,307,131		62.74		25,181,225		67.79

TOTAL PROPERTY TYPES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		129,978	$	7,486,283	$	57.60	$	7,486,283	$	57.60	(4)
2018		329,091		15,455,717		46.96		15,468,303		47.00
2019		780,229		38,595,160		49.47		38,733,825		49.64
2020		653,748		34,086,450		52.14		35,147,699		53.76
2021		1,119,087		47,002,807		42.00		48,138,459		43.02
2022		1,634,492		86,650,144		53.01		88,187,948		53.95
2023		772,796		43,185,430		55.88		48,643,522		62.94
2024		905,647		45,134,005		49.84		47,914,913		52.91
2025		1,123,473		65,841,196		58.61		73,596,208		65.51
2026		1,082,194		76,872,725		71.03		84,845,652		78.40
Thereafter		4,427,947		237,493,237		53.64		280,575,545		63.36

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

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

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

LOGO

FOURTH QUARTER 2017

IN-SERVICE BOSTON REGION PROPERTIES

Quarterly Lease Expirations - Boston Region (1) (2) (3)

OFFICE


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2017		—	$	—	$	—	$	—	$	—
Q2 2017		—		—		—		—		—
Q3 2017		—		—		—		—		—
Q4 2017		129,975		7,293,283		56.11		7,293,283		56.11	(4)

Total 2017		129,975	$	7,293,283	$	56.11	$	7,293,283	$	56.11

Q1 2018		35,453	$	1,281,320	$	36.14	$	1,281,320	$	36.14
Q2 2018		95,651		3,516,928		36.77		3,516,928		36.77
Q3 2018		24,486		981,372		40.08		981,372		40.08
Q4 2018		145,787		6,212,113		42.61		6,224,699		42.70

Total 2018		301,377	$	11,991,733	$	39.79	$	12,004,319	$	39.83

RETAIL


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2017		—	$	—	$	—	$	—	$	—
Q2 2017		—		—		—		—		—
Q3 2017		—		—		—		—		—
Q4 2017		3		193,000		64,333.32		193,000		64,333.32	(4)

Total 2017		3	$	193,000	$	64,333.32	$	193,000	$	64,333.32

Q1 2018		8,001	$	985,956	$	123.23	$	985,956	$	123.23
Q2 2018		88		9,680		110.00		9,680		110.00
Q3 2018		194		193,062		995.17		193,062		995.17
Q4 2018		19,431		2,275,286		117.10		2,275,286		117.10

Total 2018		27,714	$	3,463,984	$	124.99	$	3,463,984	$	124.99

TOTAL PROPERTY TYPES


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2017		—	$	—	$	—	$	—	$	—
Q2 2017		—		—		—		—		—
Q3 2017		—		—		—		—		—
Q4 2017		129,978		7,486,283		57.60		7,486,283		57.60	(4)

Total 2017		129,978	$	7,486,283	$	57.60	$	7,486,283	$	57.60

Q1 2018		43,454	$	2,267,275	$	52.18	$	2,267,275	$	52.18
Q2 2018		95,739		3,526,608		36.84		3,526,608		36.84
Q3 2018		24,680		1,174,434		47.59		1,174,434		47.59
Q4 2018		165,218		8,487,400		51.37		8,499,986		51.45

Total 2018		329,091	$	15,455,717	$	46.96	$	15,468,303	$	47.00

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

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

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

FOURTH QUARTER 2017

IN-SERVICE NEW YORK REGION PROPERTIES

Lease Expirations - New York Region (1) (2) (3)

OFFICE


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		34,351	$	2,263,191	$	65.88	$	2,263,191	$	65.88	(4)
2018		482,197		41,764,044		86.61		41,841,387		86.77
2019		458,181		31,857,943		69.53		32,862,478		71.72
2020		1,433,293		114,977,548		80.22		114,964,929		80.21
2021		400,964		35,125,643		87.60		35,504,349		88.55
2022		906,634		83,716,658		92.34		84,902,762		93.65
2023		187,158		13,279,366		70.95		14,294,874		76.38
2024		1,086,352		75,440,194		69.44		82,135,987		75.61
2025		554,375		40,251,480		72.61		44,249,749		79.82
2026		867,569		71,766,411		82.72		76,327,428		87.98
Thereafter		3,293,444		305,886,142		92.88		410,312,661		124.58

RETAIL


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		—	$	—	$	—	$	—	$	—
2018		14,052		9,900,333		704.55		10,167,078		723.53
2019		—		—		—		—		—
2020		14,562		789,723		54.23		575,874		39.55
2021		26,225		12,704,596		484.45		13,713,757		522.93
2022		50,346		7,140,609		141.83		7,378,059		146.55
2023		1,847		1,893,637		1,025.25		2,256,696		1,221.82
2024		11,919		4,419,121		370.76		5,225,743		438.44
2025		1,872		656,702		350.80		732,638		391.37
2026		34,807		4,665,743		134.05		5,719,108		164.31
Thereafter		129,097		28,402,530		220.01		61,221,133		474.23

TOTAL PROPERTY TYPES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		34,351	$	2,263,191	$	65.88	$	2,263,191	$	65.88	(4)
2018		496,249		51,664,377		104.11		52,008,466		104.80
2019		458,181		31,857,943		69.53		32,862,478		71.72
2020		1,447,855		115,767,270		79.96		115,540,802		79.80
2021		427,189		47,830,239		111.97		49,218,105		115.21
2022		956,980		90,857,268		94.94		92,280,821		96.43
2023		189,005		15,173,003		80.28		16,551,571		87.57
2024		1,098,271		79,859,315		72.71		87,361,730		79.54
2025		556,247		40,908,182		73.54		44,982,387		80.87
2026		902,376		76,432,154		84.70		82,046,537		90.92
Thereafter		3,422,541		334,288,672		97.67		471,533,794		137.77

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

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

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

FOURTH QUARTER 2017

IN-SERVICE NEW YORK REGION PROPERTIES

Quarterly Lease Expirations - New York Region (1) (2) (3)

OFFICE


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2017		—	$	—	$	—	$	—	$	—
Q2 2017		—		—		—		—		—
Q3 2017		—		—		—		—		—
Q4 2017		34,351		2,263,191		65.88		2,263,191		65.88	(4)

Total 2017		34,351	$	2,263,191	$	65.88	$	2,263,191	$	65.88

Q1 2018		148,483	$	13,301,560	$	89.58	$	13,363,838	$	90.00
Q2 2018		93,732		10,156,004		108.35		10,156,004		108.35
Q3 2018		178,005		14,068,724		79.04		14,068,724		79.04
Q4 2018		61,977		4,237,756		68.38		4,252,821		68.62

Total 2018		482,197	$	41,764,044	$	86.61	$	41,841,387	$	86.77

RETAIL


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2017		—	$	—	$	—	$	—	$	—
Q2 2017		—		—		—		—		—
Q3 2017		—		—		—		—		—
Q4 2017		—		—		—		—		—

Total 2017		—	$	—	$	—	$	—	$	—

Q1 2018		4,600	$	357,428	$	77.70	$	357,428	$	77.70
Q2 2018		2,177		480,551		220.74		480,551		220.74
Q3 2018		—		—		—		—		—
Q4 2018		7,275		9,062,353		1,245.68		9,329,099		1,282.35

Total 2018		14,052	$	9,900,333	$	704.55	$	10,167,078	$	723.53

TOTAL PROPERTY TYPES


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2017		—	$	—	$	—	$	—	$	—
Q2 2017		—		—		—		—		—
Q3 2017		—		—		—		—		—
Q4 2017		34,351		2,263,191		65.88		2,263,191		65.88	(4)

Total 2017		34,351	$	2,263,191	$	65.88	$	2,263,191	$	65.88

Q1 2018		153,083	$	13,658,988	$	89.23	$	13,721,266	$	89.63
Q2 2018		95,909		10,636,555		110.90		10,636,555		110.90
Q3 2018		178,005		14,068,724		79.04		14,068,724		79.04
Q4 2018		69,252		13,300,110		192.05		13,581,920		196.12

Total 2018		496,249	$	51,664,377	$	104.11	$	52,008,466	$	104.80

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

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

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

FOURTH QUARTER 2017

IN-SERVICE SAN FRANCISCO AND LOS ANGELES REGIONS PROPERTIES

Lease Expirations - San Francisco and Los Angeles Regions (1) (2) (3)

OFFICE


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		—	$	—	$	—	$	—	$	—
2018		239,670		14,554,595		60.73		14,592,222		60.88
2019		879,597		43,620,371		49.59		44,914,912		51.06
2020		687,661		44,268,697		64.38		44,962,932		65.39
2021		1,022,864		52,374,403		51.20		57,460,532		56.18
2022		865,627		48,981,905		56.59		53,653,000		61.98
2023		352,459		23,992,304		68.07		27,178,142		77.11
2024		450,282		27,526,689		61.13		28,697,137		63.73
2025		338,088		19,760,031		58.45		23,531,316		69.60
2026		280,908		20,153,689		71.74		23,125,823		82.33
Thereafter		958,691		64,524,230		67.30		86,724,975		90.46

RETAIL


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		—	$	—	$	—	$	—	$	—
2018		16,705		1,195,151		71.54		1,179,827		70.63
2019		13,325		715,632		53.71		725,413		54.44
2020		31,336		1,974,643		63.02		2,047,392		65.34
2021		22,163		1,456,377		65.71		1,520,608		68.61
2022		40,589		1,912,485		47.12		2,045,374		50.39
2023		39,592		2,225,404		56.21		2,345,403		59.24
2024		9,388		652,687		69.52		730,329		77.79
2025		22,933		1,478,050		64.45		1,671,387		72.88
2026		24,494		1,760,789		71.89		1,980,777		80.87
Thereafter		65,228		2,963,184		45.43		3,766,739		57.75

TOTAL PROPERTY TYPES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		—	$	—	$	—	$	—	$	—
2018		256,375		15,749,745		61.43		15,772,050		61.52
2019		892,922		44,336,003		49.65		45,640,326		51.11
2020		718,997		46,243,340		64.32		47,010,324		65.38
2021		1,045,027		53,830,780		51.51		58,981,140		56.44
2022		906,216		50,894,391		56.16		55,698,374		61.46
2023		392,051		26,217,708		66.87		29,523,544		75.31
2024		459,670		28,179,376		61.30		29,427,466		64.02
2025		361,021		21,238,081		58.83		25,202,703		69.81
2026		305,402		21,914,478		71.76		25,106,599		82.21
Thereafter		1,023,919		67,487,415		65.91		90,491,714		88.38

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

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

LOGO

FOURTH QUARTER 2017

IN-SERVICE SAN FRANCISCO AND LOS ANGELES REGIONS PROPERTIES

Quarterly Lease Expirations - San Francisco and Los Angeles Regions (1) (2) (3)

OFFICE


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2017		—	$	—	$	—	$	—	$	—
Q2 2017		—		—		—		—		—
Q3 2017		—		—		—		—		—
Q4 2017		—		—		—		—		—

Total 2017		—	$	—	$	—	$	—	$	—

Q1 2018		129,749	$	8,719,137	$	67.20	$	8,719,137	$	67.20
Q2 2018		51,307		2,965,034		57.79		2,972,305		57.93
Q3 2018		28,021		1,366,657		48.77		1,369,139		48.86
Q4 2018		30,593		1,503,767		49.15		1,531,641		50.07

Total 2018		239,670	$	14,554,595	$	60.73	$	14,592,222	$	60.88

RETAIL


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2017		—	$	—	$	—	$	—	$	—
Q2 2017		—		—		—		—		—
Q3 2017		—		—		—		—		—
Q4 2017		—		—		—		—		—

Total 2017		—	$	—	$	—	$	—	$	—

Q1 2018		2,288	$	191,733	$	83.80	$	191,733	$	83.80
Q2 2018		400		45,203		113.01		45,203		113.01
Q3 2018		2,771		137,352		49.57		137,352		49.57
Q4 2018		11,246		820,862		72.99		805,539		71.63

Total 2018		16,705	$	1,195,151	$	71.54	$	1,179,827	$	70.63

TOTAL PROPERTY TYPES


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2017		—	$	—	$	—	$	—	$	—
Q2 2017		—		—		—		—		—
Q3 2017		—		—		—		—		—
Q4 2017		—		—		—		—		—

Total 2017		—	$	—	$	—	$	—	$	—

Q1 2018		132,037	$	8,910,871	$	67.49	$	8,910,871	$	67.49
Q2 2018		51,707		3,010,237		58.22		3,017,508		58.36
Q3 2018		30,792		1,504,009		48.84		1,506,491		48.92
Q4 2018		41,839		2,324,629		55.56		2,337,181		55.86

Total 2018		256,375	$	15,749,745	$	61.43	$	15,772,050	$	61.52

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

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

LOGO

FOURTH QUARTER 2017

IN-SERVICE WASHINGTON, DC REGION PROPERTIES

Lease Expirations - Washington, DC Region (1) (2) (3)

OFFICE


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		74,090	$	3,303,616	$	44.59	$	3,303,616	$	44.59	(4)
2018		470,841		24,837,729		52.75		25,153,144		53.42
2019		1,130,064		54,307,088		48.06		54,696,387		48.40
2020		1,338,233		61,459,826		45.93		63,793,149		47.67
2021		1,227,971		67,956,295		55.34		73,128,612		59.55
2022		735,469		33,952,437		46.16		37,597,210		51.12
2023		505,324		24,936,481		49.35		28,455,539		56.31
2024		649,242		33,931,423		52.26		38,436,335		59.20
2025		510,250		22,257,049		43.62		26,228,285		51.40
2026		406,722		33,079,143		81.33		38,735,922		95.24
Thereafter		1,856,308		114,220,725		61.53		145,457,460		78.36

RETAIL


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		3,274	$	125,757	$	38.41	$	125,757	$	38.41	(4)
2018		21,950		1,585,905		72.25		1,588,349		72.36
2019		93,706		5,738,847		61.24		6,485,816		69.21
2020		59,720		3,859,917		64.63		3,932,436		65.85
2021		72,367		4,604,721		63.63		4,975,450		68.75
2022		39,296		2,446,727		62.26		2,565,589		65.29
2023		84,606		4,670,020		55.20		5,083,597		60.09
2024		22,050		1,388,117		62.95		1,529,854		69.38
2025		77,110		2,947,234		38.22		3,220,250		41.76
2026		33,594		2,275,568		67.74		2,498,412		74.37
Thereafter		133,482		5,678,234		42.54		6,700,141		50.20

TOTAL PROPERTY TYPES


Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		77,364	$	3,429,373	$	44.33	$	3,429,373	$	44.33	(4)
2018		492,791		26,423,634		53.62		26,741,493		54.27
2019		1,223,770		60,045,935		49.07		61,182,204		49.99
2020		1,397,953		65,319,744		46.73		67,725,585		48.45
2021		1,300,338		72,561,016		55.80		78,104,063		60.06
2022		774,765		36,399,164		46.98		40,162,799		51.84
2023		589,930		29,606,501		50.19		33,539,135		56.85
2024		671,292		35,319,540		52.61		39,966,189		59.54
2025		587,360		25,204,283		42.91		29,448,535		50.14
2026		440,316		35,354,711		80.29		41,234,334		93.65
Thereafter		1,989,790		119,898,959		60.26		152,157,601		76.47

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units.

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

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

FOURTH QUARTER 2017

IN-SERVICE WASHINGTON, DC REGION PROPERTIES

Quarterly Lease Expirations - Washington, DC Region (1) (2) (3)

OFFICE


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2017		—	$	—	$	—	$	—	$	—
Q2 2017		—		—		—		—		—
Q3 2017		—		—		—		—		—
Q4 2017		74,090		3,303,616		44.59		3,303,616		44.59	(4)

Total 2017		74,090	$	3,303,616	$	44.59	$	3,303,616	$	44.59

Q1 2018		63,369	$	2,962,165	$	46.74	$	2,972,553	$	46.91
Q2 2018		157,242		9,227,437		58.68		9,370,247		59.59
Q3 2018		122,516		6,338,811		51.74		6,401,817		52.25
Q4 2018		127,714		6,309,315		49.40		6,408,527		50.18

Total 2018		470,841	$	24,837,729	$	52.75	$	25,153,144	$	53.42

RETAIL


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2017		—	$	—	$	—	$	—	$	—
Q2 2017		—		—		—		—		—
Q3 2017		—		—		—		—		—
Q4 2017		3,274		125,757		38.41		125,757		38.41	(4)

Total 2017		3,274	$	125,757	$	38.41	$	125,757	$	38.41

Q1 2018		3,467	$	258,554	$	74.58	$	258,554	$	74.58
Q2 2018		6,617		434,134		65.61		434,134		65.61
Q3 2018		660		64,023		97.01		64,023		97.01
Q4 2018		11,206		829,193		74.00		831,638		74.21

Total 2018		21,950	$	1,585,905	$	72.25	$	1,588,349	$	72.36

TOTAL PROPERTY TYPES


Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2017		—	$	—	$	—	$	—	$	—
Q2 2017		—		—		—		—		—
Q3 2017		—		—		—		—		—
Q4 2017		77,364		3,429,373		44.33		3,429,373		44.33	(4)

Total 2017		77,364	$	3,429,373	$	44.33	$	3,429,373	$	44.33

Q1 2018		66,836	$	3,220,720	$	48.19	$	3,231,108	$	48.34
Q2 2018		163,859		9,661,571		58.96		9,804,381		59.83
Q3 2018		123,176		6,402,834		51.98		6,465,840		52.49
Q4 2018		138,920		7,138,509		51.39		7,240,164		52.12

Total 2018		492,791	$	26,423,634	$	53.62	$	26,741,493	$	54.27

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units.

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

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

FOURTH QUARTER 2017

CBD PROPERTIES

Lease Expirations (1) (2) (3)


	Boston											San Francisco and Los Angeles
							Annualized											Annualized
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		125,303	$	7,378,993	$	58.89	$	7,378,993	$	58.89	(4)		—	$	—	$	—	$	—	$	—
2018		111,460		7,767,188		69.69		7,771,485		69.72			186,977		13,112,775		70.13		13,119,795		70.17
2019		359,669		22,448,175		62.41		22,493,810		62.54			379,136		22,902,154		60.41		23,412,546		61.75
2020		332,262		20,861,961		62.79		21,616,970		65.06			617,578		41,651,192		67.44		42,159,264		68.27
2021		421,381		24,816,503		58.89		24,996,900		59.32			699,346		44,145,101		63.12		48,705,333		69.64
2022		1,030,680		63,295,471		61.41		64,774,892		62.85			461,731		29,635,598		64.18		32,377,909		70.12
2023		458,390		30,956,450		67.53		35,315,312		77.04			326,131		21,774,405		66.77		24,520,584		75.19
2024		348,466		21,257,845		61.00		23,008,544		66.03			435,158		27,194,729		62.49		28,216,475		64.84
2025		629,204		41,502,768		65.96		47,267,116		75.12			355,379		21,037,412		59.20		24,949,341		70.20
2026		949,605		72,085,992		75.91		79,361,774		83.57			305,402		21,914,478		71.76		25,106,599		82.21
Thereafter		3,723,813		209,439,462		56.24		249,874,514		67.10			1,023,919		67,487,415		65.91		90,491,714		88.38

	New York											Washington, DC
							Annualized											Annualized
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		13,437	$	1,571,170	$	116.93	$	1,571,170	$	116.93	(4)		—	$	—	$	—	$	—	$	—
2018		400,997		48,066,096		119.87		48,332,841		120.53			94,113		5,484,297		58.27		5,564,259		59.12
2019		271,328		25,031,962		92.26		25,962,954		95.69			468,760		30,698,280		65.49		31,268,114		66.70
2020		1,124,810		104,445,120		92.86		103,900,224		92.37			466,219		26,710,376		57.29		27,817,363		59.67
2021		312,270		44,085,637		141.18		45,410,826		145.42			592,007		39,884,194		67.37		43,215,888		73.00
2022		890,092		88,530,172		99.46		89,868,037		100.96			129,424		7,966,091		61.55		8,619,105		66.60
2023		107,282		12,667,506		118.08		13,822,863		128.85			51,638		3,321,504		64.32		3,864,532		74.84
2024		684,054		65,475,287		95.72		72,171,691		105.51			193,400		12,948,162		66.95		14,705,364		76.04
2025		286,397		31,175,913		108.86		33,846,216		118.18			86,404		4,622,044		53.49		5,501,394		63.67
2026		717,436		70,490,868		98.25		75,291,450		104.95			354,808		31,032,153		87.46		36,049,549		101.60
Thereafter		3,165,596		324,676,715		102.56		461,453,380		145.77			1,524,627		100,156,156		65.69		127,983,436		83.94

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

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

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

LOGO

FOURTH QUARTER 2017

SUBURBAN PROPERTIES

Lease Expirations (1) (2) (3)


	Boston											San Francisco
							Annualized											Annualized
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		4,675	$	107,291	$	22.95	$	107,291	$	22.95	(4)		—	$	—	$	—	$	—	$	—
2018		217,631		7,688,529		35.33		7,696,818		35.37			69,398		2,636,970		38.00		2,652,255		38.22
2019		420,560		16,146,985		38.39		16,240,014		38.62			513,786		21,433,849		41.72		22,227,780		43.26
2020		321,486		13,224,489		41.14		13,530,729		42.09			101,419		4,592,148		45.28		4,851,060		47.83
2021		697,706		22,186,304		31.80		23,141,559		33.17			345,681		9,685,679		28.02		10,275,807		29.73
2022		603,812		23,354,673		38.68		23,413,056		38.78			444,485		21,258,792		47.83		23,320,465		52.47
2023		314,406		12,228,980		38.90		13,328,210		42.39			65,920		4,443,304		67.40		5,002,960		75.89
2024		557,181		23,876,160		42.85		24,906,368		44.70			24,512		984,647		40.17		1,210,992		49.40
2025		494,269		24,338,429		49.24		26,329,092		53.27			5,642		200,669		35.57		253,362		44.91
2026		132,589		4,786,733		36.10		5,483,878		41.36			—		—		—		—		—
Thereafter		704,134		28,053,776		39.84		30,701,031		43.60			—		—		—		—		—

	New York											Washington, DC
							Annualized											Annualized
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2017		20,914	$	692,021	$	33.09	$	692,021	$	33.09	(4)		77,364	$	3,429,373	$	44.33	$	3,429,373	$	44.33	(4)
2018		95,252		3,598,281		37.78		3,675,624		38.59			398,678		20,939,337		52.52		21,177,234		53.12
2019		186,853		6,825,981		36.53		6,899,524		36.92			755,010		29,347,655		38.87		29,914,090		39.62
2020		323,045		11,322,150		35.05		11,640,579		36.03			931,734		38,609,368		41.44		39,908,221		42.83
2021		114,919		3,744,602		32.58		3,807,279		33.13			708,331		32,676,822		46.13		34,888,175		49.25
2022		66,888		2,327,095		34.79		2,412,784		36.07			645,341		28,433,072		44.06		31,543,694		48.88
2023		81,723		2,505,497		30.66		2,728,707		33.39			538,292		26,284,997		48.83		29,674,603		55.13
2024		414,217		14,384,028		34.73		15,190,040		36.67			477,892		22,371,378		46.81		25,260,825		52.86
2025		269,850		9,732,270		36.07		11,136,170		41.27			500,956		20,582,239		41.09		23,947,142		47.80
2026		184,940		5,941,286		32.13		6,755,086		36.53			85,508		4,322,558		50.55		5,184,786		60.64
Thereafter		256,945		9,611,957		37.41		10,080,414		39.23			465,163		19,742,803		42.44		24,174,165		51.97

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

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

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

LOGO

FOURTH QUARTER 2017

LEASING ACTIVITY

for the three months ended December 31, 2017

All In-Service Properties


	Total
Vacant space available at October 1, 2017 (sf)		4,257,942
Leases expiring or terminated beginning October 1, 2017 through December 31, 2017 (sf)		1,358,020

Total space available for lease (sf)		5,615,962

1st generation leases (sf)		238,716
2nd generation leases with new tenants (sf)		922,775
2nd generation lease renewals (sf)		414,943

Total space leased (sf)		1,576,434

Vacant space available for lease at December 31, 2017 (sf)		4,039,528

Net (increase)/decrease in available space (sf)		218,414

Second generation leasing information: (1)
Leases commencing during the period (sf)		1,337,718
Weighted average lease term (months)		113
Weighted average free rent period (days)		79
Total transaction costs per square foot (2)	$	65.82
Increase (decrease) in gross rents (3)		0.50	%
Increase (decrease) in net rents (4)		0.22	%


	All leases 1st Generation (sf)		All leases 2nd Generation (sf)		Incr (decr) in 2nd gen. gross cash rents (3)			Incr (decr) in 2nd gen. net cash rents (4)			Total Leased (sf) (5)		Total square feet of leases executed in the quarter (6)
Boston		131,485		526,381		6.00	%		8.15	%		657,866		702,329
New York		4,006		552,752		(3.77	%)		(6.68	%)		556,758		653,039
San Francisco and Los Angeles		100,172		90,754		62.08	%		85.45	%		190,926		371,399
Washington, DC		3,053		167,831		(5.87	%)		(8.19	%)		170,884		665,252

Total / Weighted Average		238,716		1,337,718		0.50	%		0.22	%		1,576,434		2,392,019

(1)	Second generation leases are defined as leases for space that had previously been leased by the Company. Of the 1,337,718 square feet of second generation leases that commenced in Q4 2017, leases for 1,024,217 square feet were signed in prior periods.

(2)	Total transaction costs include tenant improvements and leasing commissions and exclude free rent concessions.

(3)

Represents the increase/(decrease) in gross rent (base rent plus expense reimbursements) on the new vs. expired leases on the 950,634 square feet of second generation leases that had been occupied within the prior 12 months; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis (e.g., the tenant is occupying “swing space”).

(4)

Represents the increase/(decrease) in net rent (gross rent less operating expenses) on the new vs. expired leases on the 950,634 square feet of second generation leases that had been occupied within the prior 12 months; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis (e.g., the tenant is occupying “swing space”).

(5)	Represents leases for which rental revenue recognition has commenced in accordance with GAAP during the quarter.

(6)

Represents leases executed in the quarter for which the Company either (1) commenced rental revenue recognition in such quarter or (2) will commence rental revenue recognition in subsequent quarters, in accordance with GAAP, and includes leases at properties currently under development. The total square feet of leases executed in the current quarter for which the Company recognized rental revenue in the current quarter is 317,507.

LOGO

FOURTH QUARTER 2017

ACQUISITIONS/DISPOSITIONS

as of December 31, 2017

ACQUISITIONS

For the period from January 1, 2017 through December 31, 2017


Property	Location	Date Acquired	Square Feet		Initial Investment		Anticipated Future Investment		Total Investment		Percentage Leased
103 Carnegie Center	Princeton, NJ	May 15, 2017		96,332	$	15,760,000	$	2,000,000	$	17,760,000		78	%
7750 Wisconsin Avenue (50% ownership interest) (1)	Bethesda, MD	August 7, 2017		740,000		20,757,000		190,343,000		211,100,000		100	%

Total Acquisitions				836,332	$	36,517,000	$	192,343,000	$	228,860,000		97	%

(1)

On August 7, 2017, the Company entered into a joint venture to develop an approximately 722,000 net rentable square foot (subject to adjustment based on final building design) build-to-suit Class A office building and below-grade parking garage at 7750 Wisconsin Avenue in Bethesda, Maryland. The joint venture entered into a lease agreement with an affiliate of Marriott International, Inc., under which Marriott will lease 100% of the office building and garage for a term of 20 years, and the building will serve as Marriott’s new worldwide headquarters. For its initial contribution, the joint venture partner contributed land with an initial fair value of $72.0 million and cash and improvements aggregating approximately $4.9 million. The Company contributed cash and improvements aggregating approximately $20.8 million for its initial contribution, of which $11.0 million was distributed to the joint venture partner.

DISPOSITIONS

For the period from January 1, 2017 through December 31, 2017


Property	Location	Date Disposed	Square Feet		Gross Sales Price		Net Cash Proceeds		Book Gain
30 Shattuck Road (land parcel)	Andover, MA	April 19, 2017		N/A	$	5,000,000	$	4,977,000	$	3,739,000
40 Shattuck Road	Andover, MA	June 13, 2017		121,542		12,000,000		11,939,000		28,000
Reston Eastgate (land parcel)	Reston, VA	August 30, 2017		N/A		14,000,000		13,179,000		2,833,000

Total Dispositions				121,542	$	31,000,000	$	30,095,000	$	6,600,000	(1)

(1)	Excludes approximately $1,063,000 of gains on sales of real estate recognized during the year ended December 31, 2017 related to previously deferred gain amounts from sales of real estate occurring in prior years.

LOGO

FOURTH QUARTER 2017

VALUE CREATION PIPELINE - CONSTRUCTION IN PROGRESS (1)

as of December 31, 2017


									BXP’s Share
Construction Properties	Actual / Estimated Initial Occupancy	Actual / Estimated Stabilization Date	Location	# of Buildings		Square feet			Investment to Date (2)			Estimated Total I Investment (2)			Total Financing			Amount Drawn at December 31, 2017			Estimated Future Equity Requirement (2)		Percentage Leased (3)			Percentage Placed in service (4)
Office and Retail
Salesforce Tower (95% ownership)	Q4 2017	Q3 2019	San Francisco, CA		1		1,400,000			941,871,530			1,073,500,000			(25,389,074	)(5)		(16,385,347	)(5)		140,632,197		97	%		7	%
The Hub on Causeway (50% ownership)	Q1 2019	Q4 2019	Boston, MA		1		385,000			58,698,604			141,870,000			102,300,000			431,381			—		80	%		—
145 Broadway	Q4 2019	Q4 2019	Cambridge, MA		1		485,000			90,960,436			375,000,000			—			—			284,039,564		98	%		—
Dock 72 (50% ownership)	Q4 2018	Q1 2020	Brooklyn, NY		1		670,000			98,593,962			204,900,000			125,000,000			18,453,624			—		33	%		—
6595 Springfield Center Drive (TSA Headquarters)	Q3 2020	Q4 2020	Springfield, VA		1		634,000			43,239,985			313,700,000			—			—			270,460,015		98	%		—
20 CityPoint	Q3 2019	Q1 2021	Waltham, MA		1		211,000			15,073,414			97,000,000			—			—			81,926,586		52	%
7750 Wisconsin Avenue (Marriott International Headquarters) (50% ownership)	Q3 2022	Q3 2022	Bethesda, MD		1		740,000	(6)		21,415,910			211,100,000			—			—			189,684,090		100	%		—

Total Office Properties under Construction					7		4,525,000		$	1,269,853,841		$	2,417,070,000		$	201,910,926		$	2,499,658		$	966,742,452		85	%		5	%

Residential
Proto Kendall Square (280 units)	Q2 2018	Q2 2019	Cambridge, MA		1		149,600		$	83,670,133		$	140,170,000		$	—		$	—		$	56,499,867		N/A			—
Proto Kendall Square - Retail					—		14,400			—			—			—			—			—		26	%		—
The Hub on Causeway - Residential (440 units) (50% ownership)	Q4 2019	Q4 2021	Boston, MA		1		320,000			32,587,954			153,500,000			—			—			120,912,046		N/A			—
Signature at Reston (508 units)	Q1 2018	Q2 2020	Reston, VA		1		490,000			194,241,547	(7)		234,854,000	(7)		—			—			40,612,453		N/A			—
Signature at Reston - Retail					—		24,600			—			—			—			—			—		81	%		—
MacArthur Station Residences (402 units) (8)	Q2 2020	Q4 2021	Oakland, CA		1		324,000			8,687,255			263,600,000			—			—			254,912,745		N/A			—


Total Residential Properties under Construction					4		1,322,600		$	319,186,889		$	792,124,000		$	—		$	—		$	472,937,111		61	%		—

Redevelopment Properties
191 Spring Street	Q4 2017	Q4 2018	Lexington, MA		1		171,000		$	42,813,476		$	53,920,000		$	—		$	—		$	11,106,524		88	%		46	%
One Five Nine East 53rd (55% ownership) (9)	Q4 2018	Q4 2019	New York, NY		—		220,000			65,232,149			106,000,000			—			—			40,767,851		—			—

Total Redevelopment Properties under Construction					1		391,000		$	108,045,625		$	159,920,000		$	—		$	—		$	51,874,375		38	%		18	%

Total Properties Under Construction and Redevelopment					12		6,238,600		$	1,697,086,355		$	3,369,114,000		$	201,910,926		$	2,499,658		$	1,491,553,938		81%			5	%


*PROJECTS FULLY PLACED IN-SERVICE DURING 2017*
									BXP’s Share
	Actual / Estimated Initial Occupancy	Actual / Estimated Stabilization Date	Location	# of Buildings		Square feet			Investment to Date (2)			Estimated Total Investment (2)			Total Financing			Amount Drawn at December 31, 2017			Estimated Future Equity Requirement (2)		Percentage Leased (3)

Prudential Center Retail Expansion	Q1 2016	Q3 2017	Boston, MA		—		15,000		$	10,889,905		$	10,890,000		$	—		$	—		$	95		100	%
888 Boylston Street	Q3 2016	Q4 2017	Boston, MA		1		417,000			248,554,845			265,280,000			—			—			16,725,155		94	%
Reservoir Place North	Q1 2019	Q1 2019	Waltham, MA		1		73,000			16,712,119			24,510,000			—			—			7,797,881		—

Total Projects placed In-Service					2		505,000		$	276,156,869		$	300,680,000		$	—		$	—		$	24,523,131		81	%

IN-SERVICE PROPERTIES HELD FOR REDEVELOPMENT


	Sub Market	# of Buildings		Existing Square Feet		Leased %			Annualized Rental Obligations Per Leased SF (10)		Encumbered with secured debt (Y/N)		Central Business District (CBD) or Suburban (S)		Incremental Estimated Future SF (11)
North First Business Park	San Jose CA		5		190,636		54.9	%	$	24.31		N		S		1,359,364
3625-3635 Peterson Way	Santa Clara CA		1		218,366		100.0	%		22.22		N		S		413,690

Total Properties held for Redevelopment			6		409,002		79.0	%	$	22.90						1,773,054

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

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

(3)	Represents percentage leased as of January 26, 2018, including leases with future commencement dates and excluding residential units.

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

(5)

Under the joint venture agreement, if the project is funded with 100% equity, the Company has agreed to fund 50% of its partner’s equity requirement, structured as preferred equity. The Company will fund approximately $25.4 million at a rate of LIBOR plus 3.0% per annum and receive priority distributions from all distributions to its partner until the principal and interest are repaid. As of December 31, 2017, the Company has funded $16,385,347.

(6)	Represents estimate of rentable square feet based on current building design.

(7)	Includes approximately $17 million for overbuilding parking structure to support future development requirements and excludes $10 million of the purchase price for the site that is allocated to rights for future development in Reston Town Center.

(8)	Project is subject to a 99 year ground lease (including extension options) with an option to purchase in the future.

(9)	The low-rise portion of 601 Lexington Avenue.

(10)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(11)	Incremental Future Square Footage is included in Approximate Developable Square Feet of Value Creation Pipeline - Owned Land Parcels and Land Purchase Options on page 46.

LOGO

FOURTH QUARTER 2017

VALUE CREATION PIPELINE

as of December 31, 2017

Owned Land Parcels


	Approximate
	Developable
Location	Square Feet
San Jose, CA (1)		2,199,000
Reston, VA		810,000
Rockville, MD		759,000
Waltham, MA		605,000
Washington, DC (50% ownership)		520,000
Springfield, VA		422,000
Santa Clara, CA (1)		414,000
Marlborough, MA		400,000
Dulles, VA		310,000
Annapolis, MD (50% ownership)		300,000
Gaithersburg, MD		240,000

		6,979,000

Land Purchase Options


	Approximate
	Developable
Location	Square Feet
Princeton, NJ		1,650,000
Boston, MA		1,300,000
Cambridge, MA		623,000
Brooklyn, NY (50% ownership)		600,000
Boston, MA (50% ownership)		525,000
Washington, DC		482,000
San Francisco, CA		TBD

		5,180,000

(1)	Excludes the existing square footage related to in-service properties being held for future re-development listed on page 45.

LOGO

FOURTH QUARTER 2017

DEFINITIONS

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

The Company also presents “BXP’s Share” of certain of these measures, which are non-GAAP financial measures that are calculated as the consolidated amount calculated in accordance with GAAP, plus the Company’s share of the amount from the Company’s unconsolidated joint ventures (calculated based upon the Company’s percentage ownership interest), minus the Company’s partners’ share of the amount from the Company’s consolidated joint ventures (calculated based upon the partners’ percentage ownership interests). Management believes that presenting “BXP’s Share” of these measures provides useful information to investors regarding the Company’s financial condition and/or results of operations because the Company has several significant joint ventures and presenting various financial measures in this manner can help investors better understand the Company’s financial condition and/or results of operations after taking into account its economic interest in these joint ventures. The Company cautions investors that the ownership percentages used in calculating “BXP’s Share” of these measures may not completely and accurately depict all of the legal and economic implications of holding an interest in a consolidated or unconsolidated joint venture. For example, in addition to partners’ interests in profits and capital, venture agreements vary in the allocation of rights regarding decision making (both routine and major decisions), distributions, transferability of interests, liquidations and other matters. Moreover, in some cases, the Company exercises significant influence over, but does not control, the joint venture, in which case GAAP requires that the Company account for the joint venture entity using the equity method of accounting and the Company does not consolidate it for financial reporting purposes. As a result, presentations of BXP’s Share of a financial measure should not be considered a substitute for, and should only be considered together with and as a supplement to, the Company’s financial information presented in accordance with GAAP.

Annualized Rental Obligations

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

Average Economic Occupancy

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

Average Monthly Rental Rates

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

Average Physical Occupancy

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

Debt to Market Capitalization Ratio

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

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

Funds Available for Distribution (FAD) and FAD Payout Ratio

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

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

LOGO

FOURTH QUARTER 2017

DEFINITIONS (continued)

Funds from Operations (FFO)

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

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

In-Service Properties

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

Market Rents

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

Net Operating Income (NOI)

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

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

Rental Obligations

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

Same Properties

In the Company’s analysis of NOI, particularly to make comparisons of NOI between periods meaningful, it is important to provide information for properties that were in-service and owned by the Company throughout each period presented. The Company refers to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by the Company through the end of the latest period presented as “Same Properties.” “Same Properties” therefore exclude properties placed in-service, acquired, repositioned or in development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented. Accordingly, it takes at least one year and one quarter after a property is acquired or treated as “in-service” for that property to be included in “Same Properties.” Pages 27-29 indicate by footnote the “In-Service Properties” that are not included in “Same Properties.”

Exhibit 99.2

Exhibit 99.2

LOGO

800 Boylston Street

Boston, MA 02199

BOSTON PROPERTIES ANNOUNCES

FOURTH QUARTER 2017 RESULTS

BOSTON, MA, January 30, 2018 - Boston Properties, Inc. (NYSE: BXP), the largest public owner and developer of office buildings in the United States, reported results today for the fourth quarter ended December 31, 2017.

Results for the quarter ended December 31, 2017

•

Net income attributable to common shareholders was $103.8 million compared to $147.2 million for the quarter ended December 31, 2016. Net income attributable to common shareholders per share (EPS) was $0.67 basic and $0.67 on a diluted basis, compared to $0.96 basic and $0.96 on a diluted basis for the quarter ended December 31, 2016. Net income attributable to common shareholders for the quarter ended December 31, 2016 includes a gain on sale of investment in unconsolidated joint venture of approximately $59.4 million, or $0.35 per share basic and $0.34 per share on a diluted basis.

•

Funds from Operations (FFO) were $230.1 million, or $1.49 per share basic and $1.49 per share diluted. This compares to FFO of $236.9 million, or $1.54 per share basic and $1.54 per share diluted, for the quarter ended December 31, 2016.

•

FFO of $1.49 per share diluted was lower than the mid-point of the Company’s guidance previously provided of $1.53 - $1.54 per share diluted primarily due to:

•

$0.08 per share due to a loss from early extinguishment of debt;

•

$0.03 per share due to better than expected portfolio operations; and

•

$0.01 per share due to better than expected development and management services revenue.

•

The Company updated its guidance for full year 2018 EPS and FFO per share as follows:

•

Projected EPS (diluted) for 2018 updated to $3.24 - $3.37 per share from $2.55 - $2.71 per share; and

•

Projected FFO per share (diluted) for 2018 updated to $6.23 - $6.36 per share from $6.20 - $6.36 per share.

•

Capital Markets Highlights -

•

Increased regular quarterly dividend 6.7% to $0.80 per share of common stock.

•

Completed a public offering of $850.0 million of 3.200% unsecured senior notes due 2025 from which the net proceeds were used to redeem $850.0 million of 3.700% senior notes due November 15, 2018.

–more–

•

Development Highlights -

•

Partially placed in-service Salesforce Tower, a 1.4 million net rentable square foot office project that is 97% leased.

•

Partially placed in-service 191 Spring Street, a 171,000 net rentable square foot redevelopment project that is 88% leased.

•

Commenced construction of a 320,000 square foot/440-unit residential project at the Hub on Causeway mixed-use development in Boston, MA.

•

Commenced construction of a 211,000 net rentable square foot office project in Waltham, MA that is 52% leased.

•

Entered into a lease for 61% of 2100 Pennsylvania Avenue, a 469,000 net rentable square foot office project in Washington, DC, for which construction is expected to begin in 2019.

Results for the year ended December 31, 2017

•

Net income attributable to common shareholders was $451.9 million compared to $502.3 million for the year ended December 31, 2016. Net income attributable to common shareholders per share (EPS) was $2.93 basic and $2.93 on a diluted basis, compared to $3.27 basic and $3.26 on a diluted basis for the year ended December 31, 2016.

•

Funds from Operations (FFO) were $959.4 million, or $6.22 per share basic and $6.22 per share diluted. This compares to FFO of $927.7 million, or $6.04 per share basic and $6.03 per share diluted, for the year ended December 31, 2016.

The reported results are unaudited and there can be no assurance that these reported results will not vary from the final information for the quarter and year ended December 31, 2017. In the opinion of management, the Company has made all adjustments considered necessary for a fair presentation of these reported results.

At December 31, 2017, the Company’s portfolio consisted of 179 properties aggregating approximately 50.3 million square feet, including twelve properties under construction/redevelopment totaling approximately 6.2 million square feet. The overall percentage of leased space for the 164 properties in service (excluding the Company’s two residential properties and hotel) as of December 31, 2017 was 90.7%.

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Significant events during the fourth quarter included:

Development activities

•

On November 17, 2017, the Company partially placed in-service 191 Spring Street, a Class A office redevelopment project with approximately 171,000 net rentable square feet located in Lexington, Massachusetts. The property is 88% leased.

•

On November 28, 2017, the Company commenced construction of its 20 CityPoint development project totaling approximately 211,000 net rentable square feet of Class A office space located in Waltham, Massachusetts. The project is 52% leased with initial occupancy expected during the third quarter of 2019.

•

On December 1, 2017, a consolidated entity in which the Company has a 95% interest partially placed in-service Salesforce Tower, a Class A office project with approximately 1,400,000 net rentable square feet located in San Francisco, California. The property is 97% leased.

•

On December 1, 2017, a joint venture in which the Company has a 50% interest commenced construction of a residential project aggregating approximately 320,000 square feet comprised of 440 residential units at its Hub on Causeway mixed-use development project located in Boston, Massachusetts.

•

On December 1, 2017, the Company entered into a 16-year lease with a tenant for approximately 288,000 net rentable square feet of Class A office space to be located in the Company’s 2100 Pennsylvania Avenue development project. In 2016, the Company entered into a development agreement with The George Washington University to pursue the development of 2100 Pennsylvania Avenue, a Class A office property with approximately 469,000 net rentable square feet on land parcels located in Washington, DC. The development agreement provides for the execution of a 75-year ground lease for the property upon completion of the entitlement process and relocation of existing tenants anticipated to occur in 2019.

Capital markets activities

•

On December 4, 2017, the Company’s Operating Partnership completed a public offering of $850.0 million in aggregate principal amount of its 3.200% unsecured senior notes due 2025. The notes were priced at 99.757% of the principal amount to yield an effective rate (including financing fees) of approximately 3.350% per annum to maturity. The notes will mature on January 15, 2025, unless earlier redeemed. The aggregate net proceeds from the offering were approximately $841.1 million after deducting underwriting discounts and transaction expenses.

•

On December 17, 2017, the Company’s Operating Partnership completed the redemption of $850.0 million in aggregate principal amount of its 3.700% senior notes due November 15, 2018. The redemption price was approximately $865.5 million. The redemption price included approximately $2.8 million of accrued and unpaid interest to, but not including, the redemption date. Excluding the accrued and unpaid interest, the redemption price was approximately 101.49% of the principal amount being redeemed. The Company recognized a loss from early extinguishment of debt totaling approximately $13.9 million, which amount included the payment of the redemption premium totaling approximately $12.7 million.

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•

On December 18, 2017, the Company declared a regular quarterly cash dividend of $0.80 per share of common stock for the period from October 1, 2017 to December 31, 2017, payable on January 30, 2018 to shareholders of record as of the close of business on December 29, 2017. This represents an increase of approximately 6.7%, or $0.05 per share, over the most recent quarterly cash dividend of $0.75 per share.

Transaction completed subsequent to December 31, 2017:

•

On January 9, 2018, the Company completed the sale of its 500 E Street, S.W. property located in Washington, DC for a net contract sale price of approximately $118.6 million. After adjusting for outstanding lease related costs assumed by the buyer, the gross sale price was approximately $127.6 million. 500 E Street, S.W. is an approximately 262,000 net rentable square foot Class A office property. The property is 100% leased with 21% expecting to vacate in February 2019.

•

On January 24, 2018, the Company entered into a lease agreement with a tenant for a build-to-suit project with approximately 276,000 net rentable square feet of Class A office space at the Company’s 17Fifty Presidents Street development project located in Reston, Virginia. The Company expects that the building will be complete and available for occupancy during the first quarter of 2020.

EPS and FFO per Share Guidance:

The Company’s guidance for the first quarter and full year 2018 for EPS (diluted) and FFO per share (diluted) is set forth and reconciled below. Except as described below, the estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in this release and otherwise referenced during the conference call referred to below. The estimates do not include possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions, other possible capital markets activity or possible future impairment charges. EPS estimates may be subject to fluctuations as a result of several factors, including changes in the recognition of depreciation and amortization expense and any gains or losses associated with disposition activity. The Company is not able to assess at this time the potential impact of these factors on projected EPS. By definition, FFO does not include real estate-related depreciation and amortization, impairment losses on depreciable real estate or gains or losses associated with disposition activities. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth below.

As set forth below, the Company has updated its projected EPS (diluted) for the full year 2018 to $3.24 - $3.37 per share from $2.65 - $2.81 per share. This is an increase of approximately $0.58 per share at the mid-point of the Company’s guidance consisting of $0.56 per share related to gains on the sale of real estate, lower interest expense of $0.04 per share and $0.03 per share of better than expected portfolio performance. These items are offset by an unbudgeted asset sale in January 2018 that the Company expects will result in a decrease of ($0.05) per share.

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In addition, the Company has updated its projected guidance for FFO per share (diluted) for the full year to $6.23 - $6.36 per share from $6.20 - $6.36 per share. This is an increase of approximately $0.02 per share at the mid-point of the Company’s guidance and results from $0.03 per share of better than expected portfolio performance and lower expected interest expense of $0.04 per share. These items are offset by the unbudgeted asset sale in January 2018 projected to result in a decrease of ($0.05) per share.


	First Quarter 2018					Full Year 2018
	Low			High		Low			High
Projected EPS (diluted)	$	1.15	–	$	1.17	$	3.24	–	$	3.37
Add:
Projected Company Share of Real Estate Depreciation and Amortization		0.88	–		0.88		3.55	–		3.55
Less:
Projected Company Share of Gains on Sales of Real Estate		0.56	–		0.56		0.56	–		0.56

Projected FFO per Share (diluted)		$1.47	–		$1.49		$6.23	–		$6.36

Boston Properties will host a conference call on Wednesday, January 31, 2018 at 10:00 AM Eastern Time, open to the general public, to discuss the fourth quarter and full year 2017 results, the 2018 projections and related assumptions, and other matters that may be of interest to investors. The number to call for this interactive teleconference is (877) 796-3880 (Domestic) or (443) 961-9013 (International) and entering the passcode 41517728. A replay of the conference call will be available through February 14, 2018, by dialing (855) 859-2056 (Domestic) or (404) 537-3406 (International) and entering the passcode 41517728. There will also be a live audio webcast of the call which may be accessed on the Company’s website at www.bostonproperties.com in the Investor Relations section. Shortly after the call a replay of the webcast will be available in the Investor Relations section of the Company’s website and archived for up to twelve months following the call.

Additionally, a copy of Boston Properties’ fourth quarter 2017 “Supplemental Operating and Financial Data” and this press release are available in the Investor Relations section of the Company’s website at www.bostonproperties.com.

Boston Properties is a fully integrated real estate investment trust that develops, redevelops, acquires, manages, operates and owns a diverse portfolio of primarily Class A office space totaling 50.3 million square feet and consisting of 167 office properties (including eight properties under construction), six residential properties (including four properties under construction), five retail properties and one hotel. The Company is one of the largest owners and developers of Class A office properties in the United States, concentrated in five markets - Boston, Los Angeles, New York, San Francisco and Washington, DC.

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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 “assumes,” “believes,” “budgeted,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects” 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 Company’s ability to satisfy the closing conditions to the pending transactions described above, the Company’s ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the costs and availability of financing, the effectiveness of our interest rate hedging contracts, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Company’s accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission. Boston Properties does not undertake a duty to update or revise any forward-looking statement, including its guidance for the first quarter and full fiscal year 2018, whether as a result of new information, future events or otherwise.

Financial tables follow.

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BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)
	December 31, 2017			December 31, 2016
	(in thousands, except for share and par value amounts)
ASSETS
Real estate, at cost	$	19,610,199		$	18,862,648
Construction in progress		1,269,338			1,037,959
Land held for future development		204,925			246,656
Less: accumulated depreciation		(4,577,454	)		(4,222,235	)

Total real estate		16,507,008			15,925,028
Cash and cash equivalents		434,767			356,914
Cash held in escrows		70,602			63,174
Investments in securities		29,161			23,814
Tenant and other receivables, net		92,186			92,548
Accrued rental income, net		861,575			799,138
Deferred charges, net		679,038			686,163
Prepaid expenses and other assets		77,971			129,666
Investments in unconsolidated joint ventures		619,925			775,198

Total assets	$	19,372,233		$	18,851,643

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,979,281		$	2,063,087
Unsecured senior notes, net		7,247,330			7,245,953
Unsecured line of credit		45,000			—
Unsecured term loan		—			—
Mezzanine notes payable		—			307,093
Outside members’ notes payable		—			180,000
Accounts payable and accrued expenses		331,500			298,524
Dividends and distributions payable		139,040			130,308
Accrued interest payable		83,646			243,933
Other liabilities		443,980			450,821

Total liabilities		11,269,777			10,919,719

Commitments and contingencies		—			—

Equity:
Stockholders’ equity attributable to Boston Properties, Inc.:
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding		—			—
Preferred stock, $0.01 par value, 50,000,000 shares authorized; 5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding at December 31, 2017 and December 31, 2016		200,000			200,000
Common stock, $0.01 par value, 250,000,000 shares authorized,154,404,186 and 153,869,075 issued and 154,325,286 and 153,790,175 outstanding at December 31, 2017 and December 31, 2016, respectively		1,543			1,538
Additional paid-in capital		6,377,908			6,333,424
Dividends in excess of earnings		(712,343	)		(693,694	)
Treasury common stock at cost, 78,900 shares at December 31, 2017 and December 31, 2016		(2,722	)		(2,722	)
Accumulated other comprehensive loss		(50,429	)		(52,251	)

Total stockholders’ equity attributable to Boston Properties, Inc.		5,813,957			5,786,295
Noncontrolling interests:
Common units of the Operating Partnership		604,739			614,982
Property partnerships		1,683,760			1,530,647

Total equity		8,102,456			7,931,924

Total liabilities and equity	$	19,372,233		$	18,851,643

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BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Three months ended December 31,						Year ended December 31,
	2017			2016			2017			2016
	(in thousands, except for per share amounts)
Revenue
Rental
Base rent	$	511,995		$	498,941		$	2,049,368		$	2,017,767
Recoveries from tenants		94,697			91,123			367,500			358,975
Parking and other		26,836			25,334			105,000			100,910

Total rental revenue		633,528			615,398			2,521,868			2,477,652
Hotel revenue		11,744			10,965			45,603			44,884
Development and management services		9,957			9,698			34,605			28,284

Total revenue		655,229			636,061			2,602,076			2,550,820

Expenses
Operating
Rental		233,895			224,098			929,977			889,768
Hotel		8,117			7,736			32,059			31,466
General and administrative		29,396			25,293			113,715			105,229
Transaction costs		96			1,200			668			2,387
Impairment loss		—			—			—			1,783
Depreciation and amortization		154,259			178,032			617,547			694,403

Total expenses		425,763			436,359			1,693,966			1,725,036

Operating income		229,466			199,702			908,110			825,784
Other income (expense)
Income from unconsolidated joint ventures		4,197			2,585			11,232			8,074
Gain on sale of investment in unconsolidated joint venture		—			59,370			—			59,370
Interest and other income		2,336			573			5,783			7,230
Gains from investments in securities		962			560			3,678			2,273
Gains (losses) from early extinguishments of debt		(13,858	)		—			496			(371	)
Losses from interest rate contracts		—			—			—			(140	)
Interest expense		(91,772	)		(97,896	)		(374,481	)		(412,849	)

Income before gains on sales of real estate		131,331			164,894			554,818			489,371
Gains on sales of real estate		872			—			7,663			80,606

Net income		132,203			164,894			562,481			569,977
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships		(13,865	)		2,121			(47,832	)		2,068
Noncontrolling interest—common units of the Operating Partnership		(11,884	)		(17,097	)		(52,210	)		(59,260	)

Net income attributable to Boston Properties, Inc.		106,454			149,918			462,439			512,785
Preferred dividends		(2,625	)		(2,704	)		(10,500	)		(10,500	)

Net income attributable to Boston Properties, Inc. common shareholders	$	103,829		$	147,214		$	451,939		$	502,285

Basic earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income	$	0.67		$	0.96		$	2.93		$	3.27

Weighted average number of common shares outstanding		154,362			153,814			154,190			153,715

Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income	$	0.67		$	0.96		$	2.93		$	3.26

Weighted average number of common and common equivalent shares outstanding		154,526			153,991			154,390			153,977

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BOSTON PROPERTIES, INC. FUNDS FROM OPERATIONS (1) (Unaudited)
	Three months ended December 31,						Year ended December 31,
	2017			2016			2017			2016
	(in thousands, except for per share amounts)
Net income attributable to Boston Properties, Inc. common shareholders	$	103,829		$	147,214		$	451,939		$	502,285
Add:
Preferred dividends		2,625			2,704			10,500			10,500
Noncontrolling interest - common units of the Operating Partnership		11,884			17,097			52,210			59,260
Noncontrolling interests in property partnerships		13,865			(2,121	)		47,832			(2,068	)
Less:
Gains on sales of real estate		872			—			7,663			80,606

Income before gains on sales of real estate		131,331			164,894			554,818			489,371
Add:
Depreciation and amortization		154,259			178,032			617,547			694,403
Noncontrolling interests in property partnerships’ share of depreciation and amortization		(18,896	)		(27,256	)		(78,190	)		(107,087	)
Company’s share of depreciation and amortization from unconsolidated joint ventures		6,310			8,692			34,262			26,934
Corporate-related depreciation and amortization		(541	)		(449	)		(1,986	)		(1,568	)
Less:
Gain on sale of investment in unconsolidated joint venture		—			59,370			—			59,370
Noncontrolling interests in property partnerships		13,865			(2,121	)		47,832			(2,068	)
Preferred dividends		2,625			2,704			10,500			10,500

Funds from operations (FFO) attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.)		255,973			263,960			1,068,119			1,034,251
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of funds from operations		25,841			27,062			108,707			106,504

Funds from operations attributable to Boston Properties, Inc. common shareholders	$	230,132		$	236,898		$	959,412		$	927,747

Boston Properties, Inc.’s percentage share of funds from operations - basic		89.90	%		89.75	%		89.82	%		89.70	%

Weighted average shares outstanding - basic		154,362			153,814			154,190			153,715

FFO per share basic	$	1.49		$	1.54		$	6.22		$	6.04

Weighted average shares outstanding - diluted		154,526			153,991			154,390			153,977

FFO per share diluted	$	1.49		$	1.54		$	6.22		$	6.03

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(1)

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

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

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

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BOSTON PROPERTIES, INC. PORTFOLIO LEASING PERCENTAGES
	% Leased by Location
	December 31, 2017			December 31, 2016
Boston		94.1	%		90.7	%
New York		86.9	%		90.2	%
San Francisco and Los Angeles		89.3	%		89.8	%
Washington, DC		91.3	%		89.9	%

Total Portfolio		90.7	%		90.2	%

AT THE COMPANY

Michael LaBelle

Executive Vice President,

Chief Financial Officer and Treasurer

(617) 236-3352

Arista Joyner

Investor Relations Manager

(617) 236-3343

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