0001656423-20-000013.txt : 20200428 0001656423-20-000013.hdr.sgml : 20200428 20200428165818 ACCESSION NUMBER: 0001656423-20-000013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 25 CONFORMED PERIOD OF REPORT: 20200428 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20200428 DATE AS OF CHANGE: 20200428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON PROPERTIES INC CENTRAL INDEX KEY: 0001037540 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 042473675 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13087 FILM NUMBER: 20825883 BUSINESS ADDRESS: STREET 1: 800 BOYLSTON STREET STREET 2: SUITE 1900 CITY: BOSTON STATE: MA ZIP: 02199 BUSINESS PHONE: 6172363300 MAIL ADDRESS: STREET 1: 800 BOYLSTON STREET STREET 2: SUITE 1900 CITY: BOSTON STATE: MA ZIP: 02199 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON PROPERTIES LTD PARTNERSHIP CENTRAL INDEX KEY: 0001043121 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50209 FILM NUMBER: 20825882 BUSINESS ADDRESS: STREET 1: 800 BOYLSTON STREET STREET 2: SUITE 1900 CITY: BOSTON STATE: MA ZIP: 02199 BUSINESS PHONE: 6172363300 MAIL ADDRESS: STREET 1: 800 BOYLSTON STREET STREET 2: SUITE 1900 CITY: BOSTON STATE: MA ZIP: 02199 8-K 1 bxpandbplpform8-k20203.htm 8-K Document
falsefalse00010375400001043121 0001037540 2020-04-28 2020-04-28 0001037540 srt:SubsidiariesMember 2020-04-28 2020-04-28 0001037540 bxp:A5.25SeriesBCumulativeRedeemablePreferredStockparvalue0.01pershareMember 2020-04-28 2020-04-28 0001037540 us-gaap:CommonStockMember 2020-04-28 2020-04-28


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): April 28, 2020
BOSTON PROPERTIES, INC.
BOSTON PROPERTIES LIMITED PARTNERSHIP
(Exact Name of Registrants As Specified in its Charter)
Boston Properties, Inc.
Delaware
1-13087
04-2473675
 
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
Boston Properties Limited 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))





Securities registered pursuant to Section 12(b) of the Act:
Registrant
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Boston Properties, Inc.
Common Stock, par value $0.01 per share
BXP
New York Stock Exchange
Boston Properties, Inc.
Depository Shares Each Representing 1/100th of a share
BXP PRB
New York Stock Exchange
of 5.25% Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share

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

Boston Properties Limited Partnership:
Emerging growth company

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

Boston Properties, Inc. ☐         Boston Properties Limited Partnership ☐









Item 2.02.
Results of Operations and Financial Condition.

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

On April 28, 2020, Boston Properties, Inc. (the “Company”), the general partner of Boston Properties Limited Partnership, issued a press release announcing its financial results for the first quarter of 2020. That press release referred to certain supplemental information that is available on the Company’s website. The text of the supplemental information and the press release are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.
Exhibit No.
 
Description
*99.1
 
*99.2
 
*101.SCH
 
Inline XBRL Taxonomy Extension Schema Document.
*101.CAL
 
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
*101.LAB
 
Inline XBRL Taxonomy Extension Label Linkbase Document.
*101.PRE
 
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
*101.DEF
 
Inline XBRL Taxonomy Extension Definition Linkbase Document.
*104
 
Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*).
______________
* Filed herewith.









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

BOSTON PROPERTIES, INC.
 
 
By:
/s/    MICHAEL E. LABELLE        
 
Michael E. LaBelle
 
Executive Vice President, Chief Financial Officer
 
and Treasurer
 
 
 
 
 
 
BOSTON PROPERTIES LIMITED PARTNERSHIP
By: Boston Properties, Inc., its General Partner
 
 
By:
/s/    MICHAEL E. LABELLE        
 
Michael E. LaBelle
 
Executive Vice President, Chief Financial Officer
 
and Treasurer

    

Date: April 28, 2020





EX-99.1 2 q12020supplementaldocx.htm EXHIBIT 99.1 Exhibit

Exhibit 99.1

a17fifty.jpg

bxplogosupplementalcovera18.jpg
Supplemental Operating and Financial Data
for the Quarter Ended March 31, 2020




THE COMPANY

Boston Properties, Inc. (NYSE: BXP) (“Boston Properties,” “BXP” or the “Company”) is the largest publicly-traded developer, owner and manager of Class A office properties in the United States, concentrated in five markets -  Boston, Los Angeles, New York, San Francisco and Washington, DC. The Company is a fully integrated real estate company, organized as a real estate investment trust (REIT), that develops, manages, operates, acquires and owns a diverse portfolio of primarily Class A office space. The Company’s complete portfolio totals 51.8 million square feet and 196 properties, including 10 properties under construction/redevelopment, and consists of 177 office properties, 12 retail properties, six residential properties and one hotel. Boston Properties is well-known for its in-house building management expertise and responsiveness to tenants’ needs. The Company holds a superior track record of developing premium Central Business District (CBD) office buildings, successful mixed-use complexes, suburban office centers and build-to-suit projects for a diverse array of creditworthy tenants. Boston Properties actively works to promote its growth and operations in a sustainable and responsible manner.  The Company has earned eight consecutive Global Real Estate Sustainability Benchmark (GRESB) Green Stars and the highest GRESB 5-star Rating. Boston Properties, an S&P 500 Company, was founded in 1970 by Mortimer B. Zuckerman and Edward H. Linde and became a public company in 1997.


FORWARD-LOOKING STATEMENTS

This Supplemental package contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. You can identify these statements by our use of the words “believes,” “budgeted,” “estimates,” “expects,” “guidance,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “will” and similar expressions that do not relate to historical matters. These statements are based on our current expectations of future events. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond Boston Properties’ control. If our underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, actual results could differ materially from those expressed or implied by the forward-looking statement. These factors include, without limitation, uncertainties and risks related to the impact of the COVID-19 global pandemic, including the duration, scope and severity of the pandemic domestically and internationally; federal, state and local government actions or restrictive measures implemented in response to COVID-19, the effectiveness of such measures and the direct and indirect impact of such measures on our and our tenants' businesses, financial condition, results of operation, cash flows, liquidity and performance, and the U.S. and international economy and economic activity generally; whether new or existing actions/or measures continue to result in increasing unemployment that impact the ability of our residential tenants to generate sufficient income to pay, or make them unwilling to pay, rent in full or at all in a timely manner; the health, continued service and availability of our personnel, including our key personnel and property management teams; the effectiveness or lack of effectiveness of government relief in providing assistance to individuals and large and small businesses, including our tenants, that have suffered significant adverse effects from COVID-19; and the extent of construction delays on our development/redevelopment projects due to work-stoppage orders or disruptions in the supply of materials which could result in our failure to meet the development milestones set forth in any applicable lease agreement, delay the commencement or completion of construction and our anticipated lease-up plans for a development/redevelopment project or our overall development pipeline that may cause returns on investment to be less than projected, and/or increase the costs of construction of new or existing projects. In addition to the risks specific to COVID-19, other factors include, without limitation, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the costs and availability of financing, the effectiveness of our interest rate hedging contracts, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Company’s accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of issuance of this report and are not guarantees of future results, performance or achievements. Boston Properties does not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.


NON-GAAP FINANCIAL MEASURES

This Supplemental package includes non-GAAP financial measures, which are accompanied by what the Company considers the most directly comparable financial measures calculated and presented in accordance with GAAP. Quantitative reconciliations of the differences between the most directly comparable GAAP financial measures and the non-GAAP financial measures presented are provided within this Supplemental package. Definitions of these non-GAAP financial measures and statements of the reasons why management believes the non-GAAP measures provide useful information to investors about the Company’s financial condition and results of operations, and, if applicable, the other purposes for which management uses the measures, can be found in the Definitions section of this Supplemental starting on page 52.

The Company also presents “BXP’s Share” of certain of these measures, which are non-GAAP financial measures that are calculated as the consolidated amount calculated in accordance with GAAP, plus the Company’s share of the amount from the Company’s unconsolidated joint ventures (calculated based upon the Company’s percentage ownership interest and, in some cases, after priority allocations), minus the Company’s partners’ share of the amount from the Company’s consolidated joint ventures (calculated based upon the partners’ percentage ownership interests and, in some cases, after priority allocations, income allocation to private REIT shareholders and their share of fees due to the Company).  Management believes that presenting “BXP’s Share” of these measures provides useful information to investors regarding the Company’s financial condition and/or results of operations because the Company has several significant joint ventures and in some cases, the Company exercises significant influence over, but does not control, the joint venture, in which case GAAP requires that the Company account for the joint venture entity using the equity method of accounting and the Company does not consolidate it for financial reporting purposes. In other cases, GAAP requires that the Company consolidate the venture even though the Company’s partner(s) owns a significant percentage interest. As a result, management believes that presenting BXP Share of various financial measures in this manner can help investors better understand the Company’s financial condition and/or results of operations after taking into account its true economic interest in these joint ventures.  The Company cautions investors that the ownership percentages used in calculating “BXP’s Share” of these measures may not completely and accurately depict all of the legal and economic implications of holding an interest in a consolidated or unconsolidated joint venture. For example, in addition to partners’ interests in profits and capital, venture agreements vary in the allocation of rights regarding decision making (both routine and major decisions), distributions, transferability of interests, financings and guarantees, liquidations and other matters. As a result, presentations of “BXP’s Share” of a financial measure should not be considered a substitute for, and should only be considered together with and as a supplement to, the Company’s financial information presented in accordance with GAAP. Unless noted otherwise, reconciliations of “BXP’s Share” of these financial measures can be found in the Reconciliations section of this Supplemental package starting on page 56.





GENERAL INFORMATION
Corporate Headquarters
Trading Symbol
Investor Relations
Inquiries
800 Boylston Street
BXP
Boston Properties, Inc.
Inquiries should be directed to
Suite 1900
 
800 Boylston Street, Suite 1900
Michael E. LaBelle
Boston, MA 02199
Stock Exchange Listing
Boston, MA 02199
Executive Vice President, Chief Financial Officer
www.bxp.com
New York Stock Exchange
investors.bxp.com
at 617.236.3352 or
(t) 617.236.3300
 
investorrelations@bxp.com
mlabelle@bxp.com
(f) 617.236.3311
 
(t) 617.236.3822
 
 
 
(f) 617.236.3311
Sara Buda
 
 
 
Vice President, Investor Relations
 
 
 
at 617.236.3429 or
 
 
 
sbuda@bxp.com
(Cover photo: 17Fifty Presidents Street, Reston, VA)




 bxplogosupplementalheadera18.jpg
Q1 2020
Table of contents
 
Page
OVERVIEW
 
Company Profile
 
 
FINANCIAL INFORMATION
 
Financial Highlights
Consolidated Balance Sheets
Consolidated Income Statements
Funds From Operations (FFO)
Funds Available for Distribution (FAD)
Net Operating Income (NOI)
Same Property Net Operating Income (NOI) by Reportable Segment
Capital Expenditures, Tenant Improvement Costs and Leasing Commissions
Acquisitions and Dispositions
 
 
DEVELOPMENT ACTIVITY
 
Construction in Progress
Land Parcels and Purchase Options
 
 
LEASING ACTIVITY
 
Leasing Activity
 
 
PROPERTY STATISTICS
 
Portfolio Overview
Residential and Hotel Performance
In-Service Property Listing
Top 20 Tenants Listing and Portfolio Tenant Diversification
Occupancy by Location
 
 
DEBT AND CAPITALIZATION
 
Capital Structure
Debt Analysis
Senior Unsecured Debt Covenant Compliance Ratios
Net Debt to EBITDAre
Debt Ratios
 
 
JOINT VENTURES
 
Consolidated Joint Ventures
Unconsolidated Joint Ventures
 
 
LEASE EXPIRATION ROLL-OUT
 
Total In-Service Properties
Boston
Los Angeles
New York
San Francisco
Washington, DC
CBD
Suburban
 
 
RESEARCH COVERAGE, DEFINITIONS AND RECONCILIATIONS
 
Research Coverage
Definitions
Reconciliations
Consolidated Income Statement - Prior Year








 bxplogosupplementalheadera18.jpg
Q1 2020
Company profile

SNAPSHOT

(as of March 31, 2020)
Fiscal Year-End
December 31
Total Properties (includes unconsolidated joint ventures)
196
Total Square Feet (includes unconsolidated joint ventures)
51.8 million
Common shares outstanding, plus common units and LTIP units (other than unearned Multi-Year Long-Term Incentive Program (MYLTIP) Units) on an as-converted basis 1
173.1 million
Closing Price, at the end of the quarter
$92.23 per share
Dividend - Quarter/Annualized
$0.98/$3.92 per share
Dividend Yield
4.25%
Consolidated Market Capitalization 1
$28.2 billion
BXP’s Share of Market Capitalization 1, 2
$28.1 billion
Senior Debt Ratings
A- (S&P); Baa1 (Moody’s)
STRATEGY

Boston Properties’ primary business objective is to maximize return on investment in an effort to provide its investors with the greatest possible total return in all points of the economic cycle. To achieve this objective, the key tenets of our business strategy are to:
maintain a keen focus on select markets that exhibit the strongest economic growth and investment characteristics over time - currently Boston, Los Angeles, New York, San Francisco and Washington, DC;
invest in the highest quality buildings (primarily office) with unique amenities and desirable locations that are able to maintain high occupancy rates and achieve premium rental rates through economic cycles;
maintain scale and a full-service real estate capability (leasing, development, construction and property management) in our markets to ensure we (1) see all relevant investment deal flow, (2) maintain an ability to execute on all types of real estate opportunities, such as acquisitions, dispositions, repositioning and development, throughout the real estate investment cycle, (3) provide superior service to our tenants and (4) develop and manage our assets in the most sustainable manner possible;
be astute in market timing for investment decisions by acquiring properties in times of opportunity, developing new properties in times of growth and selling assets at attractive prices, resulting in continuous portfolio refreshment;
ensure a strong balance sheet to maintain consistent access to capital and the resultant ability to make new investments at opportune points in time; and
foster a culture and reputation of integrity, excellence and purposefulness, making us the employer of choice for talented real estate professionals, the landlord and developer of choice for our customers, as well as the counterparty of choice for real estate industry participants.
MANAGEMENT

Board of Directors
 
Management
Joel I. Klein
Chairman of the Board
 
Owen D. Thomas
Chief Executive Officer
Owen D. Thomas
Chief Executive Officer
 
Douglas T. Linde
President
Douglas T. Linde
President
 
Raymond A. Ritchey
Senior Executive Vice President
Kelly A. Ayotte
 
 
Michael E. LaBelle
Executive Vice President, Chief Financial Officer and Treasurer
Bruce W. Duncan
Chair of Compensation Committee
 
 
Karen E. Dykstra
 
 
Peter D. Johnston
Executive Vice President, Washington, DC Region
Carol B. Einiger
 
 
Bryan J. Koop
Executive Vice President, Boston Region
Diane J. Hoskins
 
 
Robert E. Pester
Executive Vice President, San Francisco Region
Matthew J. Lustig
Chair of Nominating & Corporate Governance Committee

 
John F. Powers
Executive Vice President, New York Region
 
 
Frank D. Burt
Senior Vice President and Chief Legal Officer
David A. Twardock
Chair of Audit Committee
 
Michael R. Walsh
Senior Vice President and Chief Accounting Officer
William H. Walton, III
 
 
 
 



____________________
1 
For additional detail, see page 25.
2 
For the Company’s definitions and related disclosures, see the Definitions and Reconciliations sections of this Supplemental package starting on page 52.

1



 bxplogosupplementalheadera18.jpg
Q1 2020
Financial highlights


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

 
 
Three Months Ended
 
 
31-Mar-20
 
31-Dec-19
Net income attributable to Boston Properties, Inc. common shareholders
 
$
497,496

 
$
140,824

Net income attributable to Boston Properties, Inc. per share - diluted
 
$
3.20

 
$
0.91

FFO attributable to Boston Properties, Inc. common shareholders 1
 
$
284,062

 
$
289,937

Diluted FFO per share 1
 
$
1.83

 
$
1.87

Dividends per common share
 
$
0.98

 
$
0.98

Funds available for distribution to common shareholders and common unitholders (FAD) 2
 
$
235,890

 
$
185,828

 
 
 
 
 
Selected items:
 
 
 
 
Revenue
 
$
752,556

 
$
757,501

Recoveries from tenants
 
$
120,942

 
$
121,147

Service income from tenants
 
$
2,972

 
$
3,312

BXP’s Share of revenue 3
 
$
720,387

 
$
722,647

BXP’s Share of straight-line rent 3
 
$
31,262

 
$
43,501

BXP’s Share of fair value lease revenue 3, 4
 
$
3,189

 
$
3,298

BXP’s Share of termination income 3
 
$
2,161

 
$
1,397

Ground rent expense
 
$
3,574

 
$
3,602

Capitalized interest
 
$
14,149

 
$
13,658

Capitalized wages
 
$
2,826

 
$
2,327

Income (loss) from unconsolidated joint ventures
 
$
(369
)
 
$
(936
)
BXP’s share of FFO from unconsolidated joint ventures 5
 
$
17,963

 
$
13,554

Net income attributable to noncontrolling interests in property partnerships
 
$
19,486

 
$
16,338

FFO attributable to noncontrolling interests in property partnerships 6
 
$
37,113

 
$
34,454

 
 
 
 
 
Balance Sheet items:
 
 
 
 
Above-market rents (included within Prepaid Expenses and Other Assets)
 
$
8,197

 
$
9,843

Below-market rents (included within Other Liabilities)
 
$
34,706

 
$
39,343

Accrued rental income liability (included within Other Liabilities)
 
$
129,567

 
$
125,964

 
 
 
 
 
Ratios:
 
 
 
 
Interest Coverage Ratio (excluding capitalized interest) 7
 
4.22

 
4.10

Interest Coverage Ratio (including capitalized interest) 7
 
3.65

 
3.55

Fixed Charge Coverage Ratio 7
 
3.03

 
2.84

BXP’s Share of Net Debt to BXP’s Share of EBITDAre 8
 
6.59

 
6.38

Change in BXP’s Share of Same Store Net Operating Income (NOI) (excluding termination income) 9
 
4.8
%
 
5.2
 %
Change in BXP’s Share of Same Store NOI (excluding termination income) - cash 9
 
5.0
%
 
(0.1
)%
FAD Payout Ratio 2
 
71.92
%
 
91.12
 %
Operating Margins [(rental revenue - rental expense)/rental revenue]
 
64.2
%
 
63.3
 %
Occupancy of In-Service Properties
 
92.9
%
 
93.0
 %
 
 
 
 
 
Capitalization:
 
 
 
 
Consolidated Debt
 
$
12,061,224

 
$
11,811,806

BXP’s Share of Debt 10
 
$
11,890,196

 
$
11,592,062

Consolidated Market Capitalization
 
$
28,224,392

 
$
35,819,952

Consolidated Debt/Consolidated Market Capitalization
 
42.73
%
 
32.98
 %
BXP’s Share of Market Capitalization 10
 
$
28,053,364

 
$
35,600,208

BXP’s Share of Debt/BXP’s Share of Market Capitalization 10
 
42.38
%
 
32.56
 %
_____________
1 
For a quantitative reconciliation of FFO attributable to Boston Properties, Inc. common shareholders and Diluted FFO per share, see page 5.
2 
For a quantitative reconciliation of FAD, see page 6. FAD Payout Ratio equals distributions to common shareholders and unitholders (excluding any special distributions) divided by FAD.
3 
See the Definitions and Reconciliations sections of this Supplemental package starting on page 52.
4 
Represents the net adjustment for above- and below-market leases that are amortized over the terms of the respective leases in place at the property acquisition dates.  
5 
For a quantitative reconciliation for the three months ended March 31, 2020, see page 34.
6 
For a quantitative reconciliation for the three months ended March 31, 2020, see page 31.
7 
For a quantitative reconciliation for the three months ended March 31, 2020 and December 31, 2019, see page 29.
8 
For a quantitative reconciliation for the three months ended March 31, 2020 and December 31, 2019, see page 28.
9 
For a quantitative reconciliation for the three months ended March 31, 2020, see page 9.
10 
For a quantitative reconciliation for March 31, 2020, see page 25.

2



 bxplogosupplementalheadera18.jpg
Q1 2020
Consolidated Balance Sheets


(unaudited and in thousands)
 
 
31-Mar-20
 
31-Dec-19
ASSETS
 
 
 
 
Real estate
 
$
21,273,137

 
$
21,458,412

Construction in progress
 
804,179

 
789,736

Land held for future development
 
264,893

 
254,828

Right of use assets - finance leases
 
237,394

 
237,394

Right of use assets - operating leases
 
148,057

 
148,640

Less accumulated depreciation
 
(5,209,487
)
 
(5,266,798
)
Total real estate
 
17,518,173

 
17,622,212

Cash and cash equivalents
 
660,733

 
644,950

Cash held in escrows
 
197,845

 
46,936

Investments in securities
 
28,101

 
36,747

Tenant and other receivables, net
 
89,431

 
112,807

Related party note receivable, net
 
78,800

 
80,000

Note receivable, net
 
15,794

 
15,920

Accrued rental income, net
 
1,059,677

 
1,038,788

Deferred charges, net
 
667,076

 
689,213

Prepaid expenses and other assets
 
136,730

 
41,685

Investments in unconsolidated joint ventures
 
1,377,338

 
955,647

Total assets
 
$
21,829,698

 
$
21,284,905

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Liabilities:
 
 
 
 
Mortgage notes payable, net
 
$
2,919,157

 
$
2,922,408

Unsecured senior notes, net
 
8,393,009

 
8,390,459

Unsecured line of credit
 
250,000

 

Unsecured term loan, net
 
499,058

 
498,939

Lease liabilities- finance leases
 
227,067

 
224,042

Lease liabilities - operating leases
 
200,573

 
200,180

Accounts payable and accrued expenses
 
293,831

 
377,553

Dividends and distributions payable
 
171,026

 
170,713

Accrued interest payable
 
82,388

 
90,016

Other liabilities
 
366,852

 
387,994

Total liabilities
 
13,402,961

 
13,262,304

 
 
 
 
 
Commitments and contingencies
 

 

 
 
 
 
 
Redeemable deferred stock units
 
5,854

 
8,365

Equity:
 
 
 
 
Stockholders’ equity attributable to Boston Properties, Inc.:
 
 
 
 
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding
 

 

Preferred stock, $0.01 par value, 50,000,000 shares authorized; 5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding at March 31, 2020 and December 31, 2019
 
200,000

 
200,000

Common stock, $0.01 par value, 250,000,000 shares authorized, 155,393,455 and 154,869,198 issued and 155,314,555 and 154,790,298 outstanding at March 31, 2020 and December 31, 2019, respectively
 
1,553

 
1,548

Additional paid-in capital
 
6,321,475

 
6,294,719

Dividends in excess of earnings
 
(416,740
)
 
(760,523
)
Treasury common stock at cost, 78,900 shares at March 31, 2020 and December 31, 2019
 
(2,722
)
 
(2,722
)
Accumulated other comprehensive loss
 
(55,700
)
 
(48,335
)
Total stockholders’ equity attributable to Boston Properties, Inc.
 
6,047,866

 
5,684,687

 
 
 
 
 
Noncontrolling interests:
 
 
 
 
Common units of the Operating Partnership
 
636,572

 
600,860

Property partnerships
 
1,736,445

 
1,728,689

Total equity
 
8,420,883

 
8,014,236

 
 
 
 
 
Total liabilities and equity
 
$
21,829,698

 
$
21,284,905



3



 bxplogosupplementalheadera18.jpg
Q1 2020
Consolidated Income Statements


(unaudited and in thousands, except per share amounts)
 
 
Three Months Ended
 
 
31-Mar-20
 
31-Dec-19
Revenue
 
 
 
 
Lease
 
$
710,111

 
$
706,349

Parking and other
 
24,504

 
26,727

Hotel revenue
 
6,825

 
11,793

Development and management services
 
7,879

 
10,473

Direct reimbursements of payroll and related costs from management services contracts
 
3,237

 
2,159

Total revenue
 
752,556

 
757,501

Expenses
 
 
 
 
Operating
 
127,800

 
131,246

Real estate taxes
 
135,019

 
136,911

Demolition costs
 
147

 
762

Hotel operating
 
6,821

 
8,318

General and administrative 1
 
36,454

 
32,797

Payroll and related costs from management services contracts
 
3,237

 
2,159

Transaction costs
 
615

 
569

Depreciation and amortization
 
171,094

 
169,897

Total expenses
 
481,187

 
482,659

Other income (expense)
 
 
 
 
Income (loss) from unconsolidated joint ventures
 
(369
)
 
(936
)
Gains (losses) on sales of real estate
 
410,165

 
(57
)
Gains (losses) from investments in securities 1
 
(5,445
)
 
2,177

Interest and other income
 
3,017

 
4,393

Losses from early extinguishments of debt
 

 
(1,530
)
Interest expense
 
(101,591
)
 
(102,880
)
Net income
 
577,146

 
176,009

Net income attributable to noncontrolling interests
 
 
 
 
Noncontrolling interest in property partnerships
 
(19,486
)
 
(16,338
)
Noncontrolling interest - common units of the Operating Partnership 2
 
(57,539
)
 
(16,222
)
Net income attributable to Boston Properties, Inc.
 
500,121

 
143,449

Preferred dividends
 
(2,625
)
 
(2,625
)
Net income attributable to Boston Properties, Inc. common shareholders
 
$
497,496

 
$
140,824

 
 
 
 
 
 
 
 
 
 
INCOME PER SHARE OF COMMON STOCK (EPS)
 
 
 
 
 
 
 
 
 
Net income attributable to Boston Properties, Inc. per share - basic
 
$
3.20

 
$
0.91

Net income attributable to Boston Properties, Inc. per share - diluted
 
$
3.20

 
$
0.91

















_____________
1 
General and administrative expense includes $(5.4) million and $2.2 million and Gains (losses) from investments in securities include $(5.4) million and $2.2 million for the three months ended March 31, 2020 and December 31, 2019, respectively, related to the Company’s deferred compensation plan.
2 
For additional detail, see page 5.

4



 bxplogosupplementalheadera18.jpg
Q1 2020
Funds from operations (FFO) 1


(unaudited and dollars in thousands, except per share amounts)
 
 
Three Months Ended
 
 
31-Mar-20
 
31-Dec-19
Net income attributable to Boston Properties, Inc. common shareholders
 
$
497,496

 
$
140,824

Add:
 
 
 
 
Preferred dividends
 
2,625

 
2,625

Noncontrolling interest - common units of the Operating Partnership
 
57,539

 
16,222

Noncontrolling interests in property partnerships
 
19,486

 
16,338

Net income
 
577,146

 
176,009

Add:
 
 
 
 
Depreciation and amortization expense
 
171,094

 
169,897

Noncontrolling interests in property partnerships' share of depreciation and amortization 2
 
(17,627
)
 
(18,116
)
BXP's share of depreciation and amortization from unconsolidated joint ventures 3
 
18,332

 
14,458

Corporate-related depreciation and amortization
 
(469
)
 
(477
)
Less:
 
 
 
 
Gain on sale of real estate included within income (loss) from unconsolidated joint ventures
 

 
(32
)
Gains (losses) on sales of real estate
 
410,165

 
(57
)
Noncontrolling interests in property partnerships
 
19,486

 
16,338

Preferred dividends
 
2,625

 
2,625

FFO attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) (Basic FFO)
 
316,200

 
322,897

Less:
 
 
 
 
Noncontrolling interest - common units of the Operating Partnership’s share of FFO
 
32,138

 
32,960

FFO attributable to Boston Properties, Inc. common shareholders
 
$
284,062

 
$
289,937

 
 
 
 
 
Boston Properties, Inc.’s percentage share of Basic FFO
 
89.84
%
 
89.79
%
Noncontrolling interest’s - common unitholders percentage share of Basic FFO
 
10.16
%
 
10.21
%
Basic FFO per share
 
$
1.83

 
$
1.87

Weighted average shares outstanding - basic
 
155,011

 
154,667

Diluted FFO per share
 
$
1.83

 
$
1.87

Weighted average shares outstanding - diluted
 
155,258

 
154,992


RECONCILIATION TO DILUTED FFO
 
 
Three Months Ended
 
 
31-Mar-20
 
31-Dec-19
Basic FFO
 
$
316,200

 
$
322,897

Add:
 
 
 
 
Effect of dilutive securities - stock-based compensation
 

 

Diluted FFO
 
316,200

 
322,897

Less:
 
 
 
 
Noncontrolling interest - common units of the Operating Partnership’s share of diluted FFO
 
32,092

 
32,898

Boston Properties, Inc.’s share of Diluted FFO
 
$
284,108

 
$
289,999


RECONCILIATION OF SHARES/UNITS FOR DILUTED FFO
 
 
Three Months Ended
 
 
31-Mar-20
 
31-Dec-19
Shares/units for Basic FFO
 
172,549

 
172,250

Add:
 
 
 
 
Effect of dilutive securities - stock-based compensation (shares/units)
 
247

 
325

Shares/units for Diluted FFO
 
172,796

 
172,575

Less:
 
 
 
 
Noncontrolling interest - common units of the Operating Partnership’s share of Diluted FFO (shares/units)
 
17,538

 
17,583

Boston Properties, Inc.’s share of shares/units for Diluted FFO
 
155,258

 
154,992

 
 
 
 
 
Boston Properties, Inc.’s percentage share of Diluted FFO
 
89.85
%
 
89.81
%
_____________
1 
See the Definitions and Reconciliations sections of this Supplemental package starting on page 52.
2 
For a quantitative reconciliation for the three months ended March 31, 2020, see page 31.
3 
For a quantitative reconciliation for the three months ended March 31, 2020, see page 34.

5



 bxplogosupplementalheadera18.jpg
Q1 2020
Funds available for distributions (FAD) 1


(dollars in thousands)
 
 
Three Months Ended
 
 
31-Mar-20
 
31-Dec-19
Net income attributable to Boston Properties, Inc. common shareholders
 
$
497,496

 
$
140,824

Add:
 
 
 
 
Preferred dividends
 
2,625

 
2,625

Noncontrolling interest - common units of the Operating Partnership
 
57,539

 
16,222

Noncontrolling interests in property partnerships
 
19,486

 
16,338

Net income
 
577,146

 
176,009

Add:
 
 
 
 
Depreciation and amortization expense
 
171,094

 
169,897

Noncontrolling interests in property partnerships’ share of depreciation and amortization 2
 
(17,627
)
 
(18,116
)
BXP’s share of depreciation and amortization from unconsolidated joint ventures 3
 
18,332

 
14,458

Corporate-related depreciation and amortization
 
(469
)
 
(477
)
Less:
 
 
 
 
Gain on sale of real estate included within income (loss) from unconsolidated joint ventures
 

 
(32
)
Gains (losses) on sales of real estate
 
410,165

 
(57
)
Noncontrolling interests in property partnerships
 
19,486

 
16,338

Preferred dividends
 
2,625

 
2,625

Basic FFO
 
316,200

 
322,897

Add:
 
 
 
 
BXP’s Share of lease transaction costs that qualify as rent inducements 1, 4
 
4,023

 
9,403

BXP’s Share of hedge amortization 1
 
1,435

 
1,435

BXP’s Share of straight-line ground rent expense adjustment 1, 5
 
1,017

 
1,056

Stock-based compensation
 
17,525

 
7,705

Non-real estate depreciation
 
469

 
477

Unearned portion of capitalized fees from consolidated joint ventures 6
 
56

 
1,300

Less:
 
 
 
 
BXP’s Share of straight-line rent 1
 
31,262

 
43,501

BXP’s Share of fair value lease revenue 1, 7
 
3,189

 
3,298

BXP’s Share of non-cash termination income adjustment (fair value lease amounts) 1
 

 

BXP’s Share of 2nd generation tenant improvements and leasing commissions 1
 
49,943

 
86,041

BXP’s Share of maintenance capital expenditures 1, 8
 
20,244

 
25,457

Hotel improvements, equipment upgrades and replacements
 
197

 
148

Funds available for distribution to common shareholders and common unitholders (FAD) (A)
 
$
235,890

 
$
185,828

 
 
 
 
 
Distributions to common shareholders and unitholders (excluding any special distributions) (B)
 
$
169,652

 
$
169,334

 
 
 
 
 
FAD Payout Ratio1 (B÷A)
 
71.92
%
 
91.12
%



_____________
1 
See the Definitions and Reconciliations sections of this Supplemental package starting on page 52.
2 
For a quantitative reconciliation for the three months ended March 31, 2020, see page 31.
3 
For a quantitative reconciliation for the three months ended March 31, 2020, see page 34.
4 
Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the period the lease commences.
5 
Includes the straight-line impact of the Company’s 99-year ground and air rights lease related to the Company’s 100 Clarendon Street garage and Back Bay Transit Station. The Company has allocated contractual ground lease payments aggregating approximately $34.4 million, which it expects to incur by the end of 2023 with no payments thereafter. The Company is recognizing this expense on a straight-line basis over the 99-year term of the ground and air rights lease, see page 2.
6 
See page 58 for additional information.
7 
Represents the net adjustment for above- and below-market leases that are amortized over the terms of the respective leases in place at the property acquisition dates.  
8 
Maintenance capital expenditures do not include planned capital expenditures related to acquisitions and repositioning capital expenditures.

6




 bxplogosupplementalheadera18.jpg
Q1 2020
Reconciliation of net income attributable to Boston Properties, Inc. common shareholders to BXP’s Share of same property net operating income (NOI)
(in thousands)
 
 
Three Months Ended
 
 
31-Mar-20
 
31-Mar-19
Net income attributable to Boston Properties, Inc. common shareholders
 
$
497,496

 
$
98,105

Preferred dividends
 
2,625

 
2,625

Net income attributable to Boston Properties, Inc.
 
500,121

 
100,730

Net income attributable to noncontrolling interests:
 
 
 
 
Noncontrolling interest - common units of the Operating Partnership
 
57,539

 
11,599

Noncontrolling interest in property partnerships
 
19,486

 
18,830

Net income
 
577,146

 
131,159

Add:
 
 
 
 
Interest expense
 
101,591

 
101,009

Impairment loss
 

 
24,038

Depreciation and amortization expense
 
171,094

 
164,594

Transaction costs
 
615

 
460

Payroll and related costs from management services contracts
 
3,237

 
3,395

General and administrative expense
 
36,454

 
41,762

Less:
 
 
 
 
Interest and other income
 
3,017

 
3,753

Gains (losses) from investments in securities
 
(5,445
)
 
2,969

Gains (losses) on sales of real estate
 
410,165

 
(905
)
Income (loss) from unconsolidated joint ventures
 
(369
)
 
213

Direct reimbursements of payroll and related costs from management services contracts
 
3,237

 
3,395

Development and management services revenue
 
7,879

 
9,277

Net Operating Income (NOI)
 
471,653

 
447,715

Add:
 
 
 
 
BXP’s share of NOI from unconsolidated joint ventures 1
 
28,758

 
25,349

Less:
 
 
 
 
Partners’ share of NOI from consolidated joint ventures (after priority allocations and income allocation to private REIT shareholders) 2
 
47,661

 
47,085

BXP’s Share of NOI
 
452,750

 
425,979

Less:
 
 
 
 
Termination income
 
2,399

 
6,936

BXP’s share of termination income from unconsolidated joint ventures 1
 

 
36

Add:
 
 
 
 
Partners’ share of termination income from consolidated joint ventures 2
 
238

 
118

BXP’s Share of NOI (excluding termination income)
 
$
450,589

 
$
419,125

 
 
 
 
 
Net Operating Income (NOI)
 
$
471,653

 
$
447,715

Less:
 
 
 
 
Termination income
 
2,399

 
6,936

NOI from non Same Properties (excluding termination income) 3
 
16,878

 
10,046

Same Property NOI (excluding termination income)
 
452,376

 
430,733

Less:
 
 
 
 
Partners’ share of NOI from consolidated joint ventures (excluding termination income and after priority allocations and income allocation to private REIT shareholders) 2
 
47,423

 
46,967

Add:
 
 
 
 
Partners’ share of NOI from non Same Properties from consolidated joint ventures (excluding termination income and after priority allocations and income allocation to private REIT shareholders) 3
136

 
580

BXP’s share of NOI from unconsolidated joint ventures (excluding termination income) 1
 
28,758

 
25,313

Less:
 
 
 
 
BXP’s share of NOI from non Same Properties from unconsolidated joint ventures (excluding termination income) 3
 
6,214

 
1,775

BXP’s Share of Same Property NOI (excluding termination income)
 
$
427,633

 
$
407,884


_____________
1 
For a quantitative reconciliation for the three months ended March 31, 2020, see page 61.
2 
For a quantitative reconciliation for the three months ended March 31, 2020, see page 58.
3 
Pages 19-22 indicate by footnote the properties that are not included as part of Same Property NOI. In addition, Same Properties exclude properties that were sold prior to March 31, 2020 and therefore are no longer a part of the Company’s property portfolio.

7



 bxplogosupplementalheadera18.jpg
Q1 2020
Reconciliation of net income attributable to Boston Properties, Inc. common shareholders to BXP’s Share of same property net operating income (NOI) - cash

(in thousands)
 
 
Three Months Ended
 
 
31-Mar-20
 
31-Mar-19
Net income attributable to Boston Properties, Inc. common shareholders
 
$
497,496

 
$
98,105

Preferred dividends
 
2,625

 
2,625

Net income attributable to Boston Properties, Inc.
 
500,121

 
100,730

Net income attributable to noncontrolling interests:
 
 
 
 
Noncontrolling interest - common units of the Operating Partnership
 
57,539

 
11,599

Noncontrolling interest in property partnerships
 
19,486

 
18,830

Net income
 
577,146

 
131,159

Add:
 
 
 
 
Interest expense
 
101,591

 
101,009

Impairment loss
 

 
24,038

Depreciation and amortization expense
 
171,094

 
164,594

Transaction costs
 
615

 
460

Payroll and related costs from management services contracts
 
3,237

 
3,395

General and administrative expense
 
36,454

 
41,762

Less:
 
 
 
 
Interest and other income
 
3,017

 
3,753

Gains (losses) from investments in securities
 
(5,445
)
 
2,969

Gains (losses) on sales of real estate
 
410,165

 
(905
)
Income (loss) from unconsolidated joint ventures
 
(369
)
 
213

Direct reimbursements of payroll and related costs from management services contracts
 
3,237

 
3,395

Development and management services revenue
 
7,879

 
9,277

Net Operating Income (NOI)
 
471,653

 
447,715

Less:
 
 
 
 
Straight-line rent
 
31,430

 
22,483

Fair value lease revenue
 
2,991

 
6,248

Termination income
 
2,399

 
6,936

Add:
 
 
 
 
Straight-line ground rent expense adjustment 1
 
811

 
855

Lease transaction costs that qualify as rent inducements 2
 
2,399

 
879

NOI - cash (excluding termination income)
 
438,043

 
413,782

Less:
 
 
 
 
NOI - cash from non Same Properties (excluding termination income) 3
 
15,415

 
10,130

Same Property NOI - cash (excluding termination income)
 
422,628

 
403,652

Less:
 
 
 
 
Partners’ share of NOI - cash from consolidated joint ventures (excluding termination income and after priority allocations and income allocation to private REIT shareholders) 4
 
42,050

 
42,802

Add:
 
 
 
 
Partners’ share of NOI - cash from non Same Properties from consolidated joint ventures (excluding termination income and after priority allocations and income allocation to private REIT shareholders) 3
205

 
641

BXP’s share of NOI - cash from unconsolidated joint ventures (excluding termination income) 5
 
25,020

 
21,500

Less:
 
 
 
 
BXP’s share of NOI - cash from non Same Properties from unconsolidated joint ventures (excluding termination income) 3
 
5,455

 
1,767

BXP’s Share of Same Property NOI - cash (excluding termination income)
 
$
400,348

 
$
381,224


_____________
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 $165 and $120 for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, the Company has remaining lease payments aggregating approximately $26.0 million, all of which it expects to incur by the end of 2023 with no payments thereafter. Under GAAP, the Company recognizes expense of $(87) per quarter on a straight-line basis over the term of the lease. However, unlike more traditional ground and air rights leases, the timing and amounts of the rental payments by the Company correlate to the uneven timing and funding by the Company of capital expenditures related to improvements at Back Bay Transit Station. As a result, the amounts excluded from the adjustment each quarter through 2023 may vary significantly.
2 
Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 6.
3 
Pages 19-22 indicate by footnote the properties that are not included as part of Same Property NOI. In addition, Same Properties exclude properties that were sold prior to March 31, 2020 and therefore are no longer a part of the Company’s property portfolio.  
4 
For a quantitative reconciliation for the three months ended March 31, 2020, see page 58.
5 
For a quantitative reconciliation for the three months ended March 31, 2020, see page 61.

8



 bxplogosupplementalheadera18.jpg
Q1 2020
Same property net operating income (NOI) by reportable segment

(dollars in thousands)
 
Office 1
 
Hotel & Residential
 
Three Months Ended
 
$
 
%
 
Three Months Ended
 
$
 
%
 
31-Mar-20
 
31-Mar-19
 
Change
 
Change
 
31-Mar-20
 
31-Mar-19
 
Change
 
Change
Rental Revenue 2
$
701,098

 
$
678,744

 
 
 
 
 
$
16,781

 
$
16,653

 
 
 
 
Less: Termination income
2,399

 
6,956

 
 
 
 
 

 

 
 
 
 
Rental revenue (excluding termination income) 2
698,699

 
671,788

 
$
26,911

 
4.0
 %
 
16,781

 
16,653

 
$
128

 
0.8
 %
Less: Operating expenses and real estate taxes
252,219

 
246,071

 
6,148

 
2.5
 %
 
10,885

 
11,637

 
(752
)
 
(6.5
)%
NOI (excluding termination income) 2, 3
$
446,480

 
$
425,717

 
$
20,763

 
4.9
 %
 
$
5,896

 
$
5,016

 
$
880

 
17.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental revenue (excluding termination income) 2
$
698,699

 
$
671,788

 
$
26,911

 
4.0
 %
 
$
16,781

 
$
16,653

 
$
128

 
0.8
 %
Less: Straight-line rent and fair value lease revenue
33,097

 
28,924

 
4,173

 
14.4
 %
 
(139
)
 
(109
)
 
(30
)
 
(27.5
)%
Add: Lease transaction costs that qualify as rent inducements 4
2,399

 
879

 
1,520

 
172.9
 %
 

 

 

 
 %
Subtotal
668,001

 
643,743

 
24,258

 
3.8
 %
 
16,920

 
16,762

 
158

 
0.9
 %
Less: Operating expenses and real estate taxes
252,219

 
246,071

 
6,148

 
2.5
 %
 
10,885

 
11,637

 
(752
)
 
(6.5
)%
Add: Straight-line ground rent expense 5
811

 
855

 
(44
)
 
(5.1
)%
 

 

 

 
 %
NOI - cash (excluding termination income) 2, 3
$
416,593

 
$
398,527

 
$
18,066

 
4.5
 %
 
$
6,035

 
$
5,125

 
$
910

 
17.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Total 1 (A)
 
BXP’s share of Unconsolidated Joint Ventures (B)
 
Three Months Ended
 
$
 
%
 
Three Months Ended
 
$
 
%
 
31-Mar-20
 
31-Mar-19
 
Change
 
Change
 
31-Mar-20
 
31-Mar-19
 
Change
 
Change
Rental Revenue 2
$
717,879

 
$
695,397

 
 
 
 
 
$
34,891

 
$
35,740

 
 
 
 
Less: Termination income
2,399

 
6,956

 
 
 
 
 

 
25

 
 
 
 
Rental revenue (excluding termination income) 2
715,480

 
688,441

 
$
27,039

 
3.9
 %
 
34,891

 
35,715

 
$
(824
)
 
(2.3
)%
Less: Operating expenses and real estate taxes
263,104

 
257,708

 
5,396

 
2.1
 %
 
12,347

 
12,177

 
170

 
1.4
 %
NOI (excluding termination income) 2, 3
$
452,376

 
$
430,733

 
$
21,643

 
5.0
 %
 
$
22,544

 
$
23,538

 
$
(994
)
 
(4.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental revenue (excluding termination income) 2
$
715,480

 
$
688,441

 
$
27,039

 
3.9
 %
 
$
34,891

 
$
35,715

 
$
(824
)
 
(2.3
)%
Less: Straight-line rent and fair value lease revenue
32,958

 
28,815

 
4,143

 
14.4
 %
 
3,560

 
3,978

 
(418
)
 
(10.5
)%
Add: Lease transaction costs that qualify as rent inducements 4
2,399

 
879

 
1,520

 
172.9
 %
 
581

 
173

 
408

 
235.8
 %
Subtotal
$
684,921

 
$
660,505

 
24,416

 
3.7
 %
 
31,912

 
31,910

 
2

 
 %
Less: Operating expenses and real estate taxes
263,104

 
257,708

 
5,396

 
2.1
 %
 
12,347

 
12,177

 
170

 
1.4
 %
Add: Straight-line ground rent expense 5
811

 
855

 
(44
)
 
(5.1
)%
 

 

 

 
 %
NOI - cash (excluding termination income) 2, 3
$
422,628

 
$
403,652

 
$
18,976

 
4.7
 %
 
$
19,565

 
$
19,733

 
$
(168
)
 
(0.9
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Partners’ share of Consolidated Joint Ventures (C)
 
BXP’s Share 2, 6
 
Three Months Ended
 
$
 
%
 
Three Months Ended
 
$
 
%
 
31-Mar-20
 
31-Mar-19
 
Change
 
Change
 
31-Mar-20
 
31-Mar-19
 
Change
 
Change
Rental Revenue 2
$
77,178

 
$
75,306

 
 
 
 
 
$
675,592

 
$
655,831

 
 
 
 
Less: Termination income
238

 
118

 
 
 
 
 
2,161

 
6,863

 
 
 
 
Rental revenue (excluding termination income) 2
76,940

 
75,188

 
$
1,752

 
2.3
 %
 
673,431

 
648,968

 
$
24,463

 
3.8
 %
Less: Operating expenses and real estate taxes
29,653

 
28,801

 
852

 
3.0
 %
 
245,798

 
241,084

 
4,714

 
2.0
 %
NOI (excluding termination income) 2, 3
$
47,287

 
$
46,387

 
$
900

 
1.9
 %
 
$
427,633

 
$
407,884

 
$
19,749

 
4.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental revenue (excluding termination income) 2
$
76,940

 
$
75,188

 
$
1,752

 
2.3
 %
 
$
673,431

 
$
648,968

 
$
24,463

 
3.8
 %
Less: Straight-line rent and fair value lease revenue
5,668

 
4,226

 
1,442

 
34.1
 %
 
30,850

 
28,567

 
2,283

 
8.0
 %
Add: Lease transaction costs that qualify as rent inducements 4
226

 

 
226

 
100.0
 %
 
2,754

 
1,052

 
1,702

 
161.8
 %
Subtotal
71,498

 
70,962

 
536

 
0.8
 %
 
645,335

 
621,453

 
23,882

 
3.8
 %
Less: Operating expenses and real estate taxes
29,653

 
28,801

 
852

 
3.0
 %
 
245,798

 
241,084

 
4,714

 
2.0
 %
Add: Straight-line ground rent expense 5

 

 

 
 %
 
811

 
855

 
(44
)
 
(5.1
)%
NOI - cash (excluding termination income) 2, 3
$
41,845

 
$
42,161

 
$
(316
)
 
(0.7
)%
 
$
400,348

 
$
381,224

 
$
19,124

 
5.0
 %
___________________
1 
Includes 100% share of consolidated joint ventures that are a Same Property.
2 
See the Definitions and Reconciliations sections of this Supplemental package starting on page 52.
3 
For a quantitative reconciliation of net income attributable to Boston Properties, Inc. common shareholders to net operating income (NOI) (excluding termination income) and NOI - cash (excluding termination income), see pages 7-8.
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 6.
5 
Excludes the straight-line impact of approximately $165 and $120 for the three months ended March 31, 2020 and 2019, respectively, in connection with the Company’s 99-year ground and air rights lease at 100 Clarendon Street garage and Back Bay Transit Station. For additional information, see page 8.
6 
BXP’s Share equals (A) + (B) - (C).

9



 bxplogosupplementalheadera18.jpg
Q1 2020
Capital expenditures, tenant improvement costs and leasing commissions

(dollars in thousands, except PSF amounts)

CAPITAL EXPENDITURES
 
 
Three Months Ended
 
 
31-Mar-20
 
31-Dec-19
Maintenance capital expenditures
 
$
20,051

 
$
25,818

Planned capital expenditures associated with acquisition properties
 

 

Repositioning capital expenditures 1
 
(1,985
)
 
8,141

Hotel improvements, equipment upgrades and replacements
 
197

 
148

Subtotal
 
18,263

 
34,107

Add:
 
 
 
 
BXP’s share of maintenance capital expenditures from unconsolidated joint ventures (JVs)
 
319

 
637

BXP’s share of planned capital expenditures associated with acquisition properties from unconsolidated JVs
 
1,742

 
472

BXP’s share of repositioning capital expenditures from unconsolidated JVs
 
1,247

 
2,024

Less:
 
 
 
 
Partners’ share of maintenance capital expenditures from consolidated JVs
 
126

 
998

Partners’ share of planned capital expenditures associated with acquisition properties from consolidated JVs
 

 

Partners’ share of repositioning capital expenditures from consolidated JVs 1
 
(802
)
 
3,174

BXP’s Share of Capital Expenditures 2
 
$
22,247

 
$
33,068


 


2nd GENERATION TENANT IMPROVEMENTS AND LEASING COMMISSIONS 3 
 
 
Three Months Ended
 
 
31-Mar-20
 
31-Dec-19
Square feet
 
995,023

 
1,100,745

Tenant improvements and lease commissions PSF
 
$
71.96

 
$
83.30























___________________
1 
For the three months ended March 31, 2020, amount includes cost savings for capital expenditures related to repositioning activities at a property in New York City.
2 
See the Definitions and Reconciliations sections of this Supplemental package starting on page 52.
3 
Includes 100% of unconsolidated joint ventures.


10



 bxplogosupplementalheadera18.jpg
Q1 2020
Acquisitions and dispositions


For the period from January 1, 2020 through March 31, 2020
(dollars in thousands)

ACQUISITIONS
 
 
 
 
 
 
 
 
Investment
 
 
Property
 
Location
 
Date Acquired
 
Square Feet
 
Initial
 
Anticipated Future
 
Total
 
In-service Leased (%)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
681, 685 and 701 Gateway (50% nominal ownership interest) 1
 
South San Francisco, CA
 
January 28, 2020
 
312,828

 
$
280,751

 
$

 
$
280,751

 
100.0
%
Platform 16 (55% ownership interest) 2
 
San Jose, CA
 
February 20, 2020
 
N/A

 
74,113

 

 
74,113

 
N/A

Total Acquisitions
 
 
 
 
 
312,828

 
$
354,864

 
$

 
$
354,864

 
100.0
%

DISPOSITIONS
Property
 
Location
 
Date Disposed
 
Square Feet
 
Gross Sales Price
 
Net Cash Proceeds
 
Book Gain 3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
601, 611 and 651 Gateway (50% ownership interest) 1
 
South San Francisco, CA
 
January 28, 2020
 
768,236

 
$
350,000

 
$

 
$
217,744

 
 
New Dominion Technology Park
 
Herndon, VA
 
February 20, 2020
 
492,601

 
256,000

 
253,966

 
192,292

 
 
    Total Dispositions
 
 
 
 
 
1,260,837

 
$
606,000

 
$
253,966

 
$
410,036

 
 




________________
1 
On January 28, 2020, the Company entered into a joint venture with a third party to own, operate and develop properties at its Gateway Commons complex located in South San Francisco, California. The Company contributed its 601, 611 and 651 Gateway properties and development rights with an agreed upon value aggregating approximately $350.0 million for its 50% interest in the joint venture. The partner contributed three properties (including one property under construction) and development rights with an agreed upon value aggregating approximately $280.8 million at closing and will contribute cash totaling approximately $69.2 million in the future for its 50% ownership interest in the joint venture. As a result of the partner’s deferred contribution, the Company has an initial approximately 55% interest in the joint venture. The Company recognized a gain on the retained and sold interest in the real estate contributed to the joint venture totaling approximately $217.7 million during the three months ended March 31, 2020, as the fair value of the real estate exceeded its carrying value.
2 
On February 20, 2020, a joint venture in which the Company has a 55% interest acquired the land underlying the ground lease at its Platform 16 project located in San Jose, California for a purchase price totaling approximately $134.8 million. The joint venture had previously made a deposit totaling $15.0 million, which deposit was credited against the purchase price. Platform 16 consists of a parcel of land totaling approximately 5.6 acres that is expected to support the development of approximately 1.1 million square feet of commercial office space.
3 
Excludes approximately $0.1 million of gains on sales of real estate recognized during the three months ended March 31, 2020 related to gain amounts from sales of real estate occurring in the prior year.















11



 bxplogosupplementalheadera18.jpg
Q1 2020
Construction in progress

as of March 31, 2020
(dollars in thousands)
CONSTRUCTION IN PROGRESS 1