Boston Properties Announces First Quarter 2013 Results

  Boston Properties Announces First Quarter 2013 Results

     Reports diluted FFO per share of $1.06. Reports diluted EPS of $0.31

Business Wire

BOSTON -- April 30, 2013

Boston Properties, Inc. (NYSE: BXP), a real estate investment trust, reported
results today for the first quarter ended March 31, 2013.

Funds from Operations (FFO) for the quarter ended March 31, 2013 were $160.6
million, or $1.06 per share basic and $1.06 per share diluted. This compares
to FFO for the quarter ended March 31, 2012 of $166.7 million, or $1.12 per
share basic and $1.12 per share diluted. The weighted average number of basic
and diluted shares outstanding totaled 151,645,578 and 153,259,143,
respectively, for the quarter ended March 31, 2013 and 148,343,382 and
150,140,431, respectively, for the quarter ended March 31, 2012.

The Company’s reported FFO of $1.06 per share diluted was lower than the
guidance previously provided of $1.19-$1.21 per share. The Company’s reported
FFO included the following items, among others, that were not reflected in the
guidance: $0.12 per share of greater than expected general and administrative
expense due to the recently announced CEO succession and transition plan and a
$0.05 per share impairment charge on a parcel of land located in San Jose,
California, offset by $0.03 per share of improvement in portfolio operations.

Net income available to common shareholders was $47.9 million for the quarter
ended March 31, 2013, compared to $48.5 million for the quarter ended March
31, 2012. Net income available to common shareholders per share (EPS) for the
quarter ended March 31, 2013 was $0.32 basic and $0.31 on a diluted basis.
This compares to EPS for the first quarter of 2012 of $0.33 basic and $0.33 on
a diluted basis.

The reported results are unaudited and there can be no assurance that the
results will not vary from the final information for the quarter ended March
31, 2013. In the opinion of management, all adjustments considered necessary
for a fair presentation of these reported results have been made.

As of March 31, 2013, the Company’s portfolio consisted of 157 properties,
comprised primarily of Class A office space, one hotel, three residential
properties and four retail properties, aggregating approximately 44.6 million
square feet, including seven properties under construction totaling 2.5
million square feet. In addition, the Company has structured parking for
vehicles containing approximately 15.9 million square feet. The overall
percentage of leased space for the 147 properties in service (excluding the
two in-service residential properties and the hotel) as of March 31, 2013 was
91.7%.

Significant events during the first quarter included:

  *On January 7, 2013, the Company signed a 20-year lease with the General
    Services Administration for 100% of its approximately 182,000 net rentable
    square foot previously vacant Three Patriots Park property located in
    Reston, Virginia.
  *On January 28, 2013, the Company’s Compensation Committee approved a new
    equity-based, multi-year, long-term incentive program (the “2013 MYLTIP”)
    in lieu of a 2013 Outperformance Plan as a performance-based component of
    the Company’s overall compensation program. Under the Financial Accounting
    Standards Board’s Accounting Standards Codification (“ASC”) 718
    “Compensation – Stock Compensation,” the 2013 MYLTIP has an aggregate
    value of approximately $8.1 million, which amount will generally be
    amortized into earnings over the five-year plan period under the graded
    vesting method.
  *On February 5, 2013, the Company used available cash to repay the mortgage
    loan collateralized by its Kingstowne One property located in Alexandria,
    Virginia totaling approximately $17.0 million. The mortgage loan bore
    interest at a fixed rate of 5.96% per annum and was scheduled to mature on
    May 5, 2013. There was no prepayment penalty.
  *On February 6, 2013, the Company completed the acquisition of 535 Mission
    Street, a development site, in San Francisco, California for an aggregate
    purchase price of approximately $71.0 million in cash, including work
    completed and materials purchased to date. When completed, 535 Mission
    Street will consist of a 27-story, Class A office tower with approximately
    307,000 net rentable square feet of office and retail space. The Company
    has commenced development of the project.
  *On February 7, 2013, the partner in the Company’s Transbay Tower joint
    venture issued a notice that it was electing under the joint venture
    agreement to reduce its nominal ownership interest in the venture from 50%
    to 5%. On February 26, 2013, the Company issued a notice to the partner
    electing to proceed with the venture on that basis. As a result, the
    Company has a 95% nominal interest in and is consolidating the joint
    venture. On March 26, 2013, the consolidated joint venture completed the
    acquisition of a land parcel in San Francisco, California which will
    support a 60-story, 1.4 million square foot office tower known as Transbay
    Tower. The purchase price for the land was approximately $192.0 million.
  *On February 20, 2013, the foreclosure sale of the Company’s Montvale
    Center property was ratified by the court. As a result of the
    ratification, the mortgage loan totaling $25.0 million was extinguished
    and the related obligations were satisfied with the transfer of the real
    estate resulting in the recognition of a gain on forgiveness of debt
    totaling approximately $20.2 million during the first quarter of 2013. The
    operating results of the property through the date of ratification have
    been classified as discontinued operations on a historical basis for all
    periods.
  *On February 28, 2013, a joint venture in which the Company has a 50%
    interest completed and fully placed in-service Annapolis Junction Building
    Six, a Class A office property with approximately 120,000 net rentable
    square feet located in Annapolis, Maryland. The property is currently 49%
    leased.
  *On March 11, 2013, the Company announced that Owen D. Thomas would succeed
    Mortimer B. Zuckerman as the Company’s Chief Executive Officer, effective
    April 2, 2013. Mr. Zuckerman will continue to serve as Executive Chairman
    for a transition period and thereafter will continue to serve as the
    Non-Executive Chairman of the Board. In connection with succession
    planning, the Company and Mr. Zuckerman entered into a Transition Benefits
    Agreement to recognize his extraordinary services previously rendered and
    ensure a well-managed transition. If Mr.Zuckerman remains employed by the
    Company through July1, 2014, he will be entitled to receive on January1,
    2015 a lump sum cash payment of $6,700,000 and an equity award with a
    targeted value of $11,062,500. The cash payment and equity award vest
    one-third on each of March10, 2013,October1, 2013 and July1, 2014,
    subject to acceleration in certain circumstances. As a result, the Company
    recognized approximately $6.6 million of compensation expense in the first
    quarter of 2013. The Company expects to recognize the remaining
    approximately $11.2 million of compensation expense over the remaining
    vesting period and, accordingly, expects to expense approximately $2.6
    million in each of the 2^nd and 3^rd quarters of 2013 and approximately
    $2.0 million in the 4^th quarter of 2013 and each of the 1^st and 2^nd
    quarters of 2014. In addition, the agreement provides that if Mr.
    Zuckerman terminates his employment with the Company for any reason,
    voluntarily or involuntarily, he will become fully vested in any
    outstanding equity awards with time-based vesting. As a result, during the
    first quarter of 2013, the Company accelerated the remaining approximately
    $12.9 million of stock-based compensation expense associated with Mr.
    Zuckerman’s unvested long-term equity awards.
  *On March 22, 2013, the Company completed and fully placed in-service Two
    Patriots Park, a Class A office redevelopment project with approximately
    256,000 net rentable square feet located in Reston, Virginia. The property
    is 100% leased.
  *On March 27, 2013, the Company completed an underwritten public offering
    of 8,000,000 depositary shares, each representing a 1/100th of a share of
    its newly designated 5.25% Series B Cumulative Redeemable Preferred Stock,
    at a price of $25.00 per depositary share. The net proceeds from this
    offering were approximately $194 million, after deducting the underwriting
    discount and transaction expenses.
  *On March 28, 2013, the Company executed a binding contract for the sale of
    its 303 Almaden property located in San Jose, California for a sale price
    of $40.0 million. 303 Almaden is a Class A office property totaling
    approximately 158,000 net rentable square feet. The carrying value of the
    property exceeds its net sale price and as a result the Company has
    recognized an impairment loss totaling approximately $3.2 million during
    the first quarter of 2013, which is excluded from FFO in accordance with
    NAREIT’s definition. The sale is subject to the satisfaction of customary
    closing conditions and there can be no assurances that the sale will be
    consummated on the terms currently contemplated, or at all. The impairment
    loss and operating results of this property through the execution date of
    the binding contract have been classified as discontinued operations on a
    historical basis for all periods. In addition, the Company recognized an
    impairment loss of approximately $8.3 million, which is included in FFO,
    to reduce the carrying value of its adjacent Almaden land parcel in San
    Jose, California to its estimated fair market value at March 31, 2013.
  *On March 29, 2013, the Company completed the acquisition of a parcel of
    land located in Reston, Virginia for a purchase price of approximately
    $27.0 million. The land parcel is commercially zoned for 250,000 square
    feet of office space.
  *On March 31, 2013, a joint venture in which the Company has a 30% interest
    completed and fully placed in-service 500 North Capitol Street, NW, a
    Class A office redevelopment project with approximately 232,000 net
    rentable square feet located in Washington, DC. The property is currently
    84% leased.

Transactions completed subsequent to March 31, 2013:

  *On April 1, 2013, the Company was designated as the Owner’s Representative
    by Harvard Planning and Project Management to provide development
    management services for the new Health and Life Sciences Facility.
  *On April 1, 2013, the Company used available cash to repay the mortgage
    loan collateralized by its 140 Kendrick Street property located in
    Needham, Massachusetts totaling approximately $47.6 million. The mortgage
    loan bore interest at a fixed rate of 7.51% per annum and was scheduled to
    mature on July 1, 2013. There was no prepayment penalty.
  *On April 4, 2013, a joint venture in which the Company has a 50% interest
    obtained construction financing collateralized by its Annapolis Junction
    Building Seven development project located in Annapolis, Maryland totaling
    $22.0 million. The construction financing bears interest at a variable
    rate equal to LIBOR plus 1.65% per annum and matures on April 4, 2016,
    with two, one-year extension options, subject to certain conditions.
  *On April 10, 2013, the Company acquired the Mountain View Research Park
    and Mountain View Technology Park properties from its Value-Added Fund for
    an aggregate purchase price of approximately $233.5 million. In
    conjunction with the acquisition, the Value-Added Fund repaid the mortgage
    loans collateralized by the Mountain View Research Park and Mountain View
    Technology Park properties totaling approximately $90.0 million and $20.0
    million, respectively, as well as the outstanding loans payable to the
    Company’s Operating Partnership totaling approximately $8.6 million and
    $3.7 million, respectively. Prior to the acquisition, the Company’s
    ownership interest in the properties was approximately 39.5%. As a result
    of the acquisition, the Company owns 100% of the properties and will
    account for them prospectively on a consolidated basis. The Company
    projects these properties’ annualized 2013 Unleveraged FFO Return to be
    8.4% and annualized 2013 Unleveraged Cash Return to be 7.4%. The
    calculation of these returns and related disclosures are presented on the
    accompanying table entitled “Projected Annualized 2013 Returns on
    Operating Property Acquisition.” There can be no assurance that actual
    returns will not differ materially from these projections.
  *On April 10, 2013, a joint venture in which the Company has a 60% interest
    executed a binding contract for the sale of its 125 West 55th Street
    property located in New York City for a sale price of $470.0 million,
    subject to the assumption by the buyer of the mortgage loan collateralized
    by the property totaling approximately $199.0 million. 125 West 55th ^
    Street is a Class A office property totaling approximately 588,000 net
    rentable square feet. The sale is subject to the satisfaction of customary
    closing conditions and there can be no assurances that the sale will be
    consummated on the terms currently contemplated, or at all.
  *On April 11, 2013, the Company’s Operating Partnership completed a public
    offering of $500.0 million in aggregate principal amount of its 3.125%
    senior unsecured notes due 2023. The notes were priced at 99.379% of the
    principal amount to yield an effective rate (including financing fees) of
    3.279% to maturity. The notes will mature on September 1, 2023, unless
    earlier redeemed. The aggregate net proceeds from the offering were
    approximately $492.5 million after deducting the underwriting discount and
    transaction expenses.
  *On April 15, 2013, the Company announced that holders of its Operating
    Partnership’s 3.75% Exchangeable Senior Notes due 2036 (the “Notes”) have
    the right to surrender their Notes for purchase by the Operating
    Partnership (the “Put Right”) on May 18, 2013. The opportunity to exercise
    the Put Right will expire at 5:00 p.m., New York City time, on May 13,
    2013. On April 15, 2013, the Company also announced that the Operating
    Partnership issued a notice of redemption to the holders of the Notes to
    redeem, on May 18, 2013 (the “Redemption Date”), all of the Notes
    outstanding on the Redemption Date. In connection with the redemption,
    holders of the Notes have the right to exchange their Notes prior to 5:00
    p.m., New York City time, on May 16, 2013. Notes with respect to which the
    Put Right is not exercised (or is exercised and subsequently withdrawn)
    and that are not surrendered for exchange prior to 5:00 p.m., New York
    City time, on May 16, 2013, will be redeemed by the Operating Partnership
    at a redemption price equal to 100% of the principal amount of the Notes
    plus accrued and unpaid interest thereon to, but excluding, the Redemption
    Date. As of April 30, 2012, there was approximately $450.0 million
    aggregate principal amount of the Notes outstanding.
  *On April 25, 2013, the Company commenced construction of its 601
    Massachusetts Avenue development project totaling approximately 478,000
    net rentable square feet located in Washington, DC. The project is
    currently approximately 79% pre-leased.

EPS and FFO per Share Guidance:

The Company’s guidance for the second quarter and full year 2013 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. Our prior full year 2013 FFO guidance, which was $5.06-$5.18 per share,
has been updated to $4.97-$5.07 per share. The changes to our FFO estimates
include approximately ($0.14) per share of additional general and
administrative expense associated with CEO succession, an approximately
($0.05) per share impairment charge on a parcel of land in San Jose,
California, approximately ($0.05) per share of dividends payable on the newly
issued 5.25% Series B Cumulative Redeemable Preferred Stock, offset by
approximately $0.08 per share of improvement in portfolio operations,
approximately $0.06 per share of lower interest expense due to increased
capitalized interest on development projects, and approximately $0.01 per
share from our acquisition and disposition activity, including the acquisition
of the Mountain View Research Park and Technology Park properties and the
expected dispositions of our joint venture interest in 125 West 55th Street
and our 303 Almaden property. 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 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.

                              Second Quarter 2013    Full Year 2013
                                 Low     -  High         Low     -  High
Projected EPS (diluted)          $ 0.85  -  $ 0.87       $ 2.27  -  $ 2.37
                                                                        
Add:
Projected Company Share of
Real Estate Depreciation           0.80   -     0.80         3.20   -     3.20
and Amortization
Less:
Projected Company Share of
Gains on Sales of Real             0.40   -     0.40         0.50   -     0.50
Estate
                                                               
Projected FFO per Share          $ 1.25  -  $ 1.27       $ 4.97  -  $ 5.07
(diluted)
                                                                          

Boston Properties will host a conference call on Wednesday, May 1, 2013 at
10:00 AM Eastern Time, open to the general public, to discuss the first
quarter 2013 results, the 2013 projections and related assumptions, and other
related matters that may be of interest to investors. The number to call for
this interactive teleconference is (877) 706-4503 (Domestic) or (281) 913-8731
(International) and entering the passcode 35668340. A replay of the conference
call will be available through May 15, 2013, by dialing (855) 859-2056
(Domestic) or (404) 537-3406 (International) and entering the passcode
35668340. 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’ first quarter 2013 “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, self-administered and self-managed
real estate investment trust that develops, redevelops, acquires, manages,
operates and owns a diverse portfolio of Class A office space, one hotel,
three residential properties and four retail properties. The Company is one of
the largest owners and developers of Class A office properties in the United
States, concentrated in five markets – Boston, New York, Princeton, San
Francisco and Washington, DC.

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,” “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, satisfaction of the
closing conditions to the pending transactions described above, 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 (including the impact of the European sovereign debt
issues), 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 second quarter and full fiscal year 2013, whether as a result of new
information, future events or otherwise.

BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
                                                       
                                      March 31,               December 31,
                                        2013                  2012        
                                                              
                                      (in thousands, except for share amounts)
                                      (unaudited)
ASSETS
                                                              
Real estate                           $  13,550,889           $  13,581,454
Construction in progress                 1,145,517               1,036,780
Land held for future                     503,684                 275,094
development
Less: accumulated depreciation          (2,929,385  )          (2,934,160  )
Total real estate                        12,270,705              11,959,168
                                                              
Cash and cash equivalents                909,376                 1,041,978
Cash held in escrows                     55,410                  55,181
Investments in securities                13,825                  12,172
Tenant and other receivables,
net of allowance for doubtful            75,849                  69,555
accounts of $1,656 and $1,960,
respectively
Related party notes receivable           282,307                 282,491
Interest receivable from                 106,313                 104,816
related party notes receivable
Accrued rental income, net of
allowance of $1,589 and $1,571,          612,041                 598,199
respectively
Deferred charges, net                    572,890                 588,235
Prepaid expenses and other               71,756                  90,610
assets
Investments in unconsolidated           652,807               659,916     
joint ventures
Total assets                          $  15,623,279          $  15,462,321  
                                                              
LIABILITIES AND EQUITY
                                                              
Liabilities:
Mortgage notes payable                $  3,053,798            $  3,102,485
Unsecured senior notes, net of           4,639,843               4,639,528
discount
Unsecured exchangeable senior            1,177,877               1,170,356
notes, net of discount
Unsecured line of credit                 -                       -
Accounts payable and accrued             210,359                 199,102
expenses
Dividends and distributions              110,886                 110,488
payable
Accrued interest payable                 99,491                  72,461
Other liabilities                       316,683               324,613     
Total liabilities                       9,608,937             9,619,033   
                                                              
Commitments and contingencies           -                     -           
                                                              
Noncontrolling interest:
Redeemable preferred units of           110,876               110,876     
the Operating Partnership
                                                              
Redeemable interest in property         98,216                97,558      
partnership
                                                              
Equity:
Stockholders' equity
attributable to Boston
Properties, Inc.
Excess stock, $0.01 par value,
150,000,000 shares authorized,           -                       -
none issued or outstanding
Series B - 5.25% cumulative
redeemable preferred stock,
$0.01 par value, liquidation
preference $2,500 per share,
92,000 shares authorized,
80,000 shares issued and                 200,000                 -
outstanding at March 31, 2013
Common stock, $0.01 par value,
250,000,000 shares authorized,
151,718,424 and 151,680,109
shares issued and
151,639,524 and 151,601,209
shares outstanding at March 31,          1,516                   1,516
2013 and December 31, 2012,
respectively
Additional paid-in capital               5,232,030               5,222,073
Dividends in excess of earnings          (160,697    )           (109,985    )
Treasury common stock, at cost           (2,722      )           (2,722      )
Accumulated other comprehensive         (13,253     )          (13,817     )
loss
Total stockholders' equity
attributable to Boston                   5,256,874               5,097,065
Properties, Inc.
                                                              
Noncontrolling interests:
Common units of the Operating            540,103                 539,753
Partnership
Property partnerships                    8,273                   (1,964      )
                                                             
Total equity                            5,805,250             5,634,854   
                                                             
Total liabilities and equity          $  15,623,279          $  15,462,321  
                                                                             
                                                                             

BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                                    
                                         Three months ended
                                         March 31,
                                           2013                2012      
                                                               
                                         (in thousands, except for per share
                                         amounts)
                                                               
  Revenue
    Rental
          Base rent                      $  377,728            $  354,825
          Recoveries from tenants           64,429                51,648
          Parking and other                23,830              22,259    
                Total rental                465,987               428,732
                revenue
    Hotel revenue                           8,291                 6,816
    Development and management             8,736               8,145     
    services
                Total revenue              483,014             443,693   
                                                               
  Expenses
    Operating
          Rental                            172,620               155,842
          Hotel                             7,044                 6,099
    General and administrative              43,571                27,619
    Transaction costs                       443                   2,104
    Impairment loss                         8,306                 -
    Depreciation and amortization          120,595             108,462   
                Total expenses             352,579             300,126   
                                                               
  Operating income                          130,435               143,567
  Other income (expense)
    Income from unconsolidated              8,721                 11,721
    joint ventures
    Interest and other income               1,471                 1,646
    Gains from investments in               735                   801
    securities
    Gains from early                        -                     767
    extinguishments of debt
    Interest expense                       (100,433  )          (103,237  )
  Income from continuing                    40,929                55,265
  operations
  Discontinued operations
    Income from discontinued                61                    570
    operations
    Gain on forgiveness of debt             20,182                -
    from discontinued operations
    Impairment loss from                   (3,241    )          -         
    discontinued operations
  Net income                                57,931                55,835
  Net income attributable to
  noncontrolling interests
    Noncontrolling interests in             (2,574    )           (546      )
    property partnerships
    Noncontrolling interest -
    redeemable preferred units of           (1,180    )           (801      )
    the Operating Partnership
    Noncontrolling interest -
    common units of the Operating           (4,358    )           (5,973    )
    Partnership
    Noncontrolling interest in
    discontinued operations -              (1,819    )          (61       )
    common units of the Operating
    Partnership
  Net income attributable to                48,000                48,454
  Boston Properties, Inc.
    Preferred dividends                    (146      )          -         
  Net income attributable to
  Boston Properties, Inc. common         $  47,854            $  48,454    
  shareholders
                                                               
  Basic earnings per common share
  attributable to Boston
  Properties, Inc. common
  shareholders:
    Income from continuing               $  0.22               $  0.33
    operations
    Discontinued operations                0.10                -         
    Net income                           $  0.32              $  0.33      
                                                               
    Weighted average number of             151,646             148,343   
    common shares outstanding
                                                               
  Diluted earnings per common
  share attributable to Boston
  Properties, Inc. common
  shareholders:
    Income from continuing               $  0.21               $  0.33
    operations
    Discontinued operations                0.10                -         
    Net income                           $  0.31              $  0.33      
                                                               
    Weighted average number of
    common and common equivalent           151,952             148,746   
    shares outstanding
                                                               
                                                               

BOSTON PROPERTIES, INC.
FUNDS FROM OPERATIONS (1)
(Unaudited)
                                                    
                                  Three months ended
                                  March 31,
                                      2013                    2012      
                                                             
                                  (in thousands, except for per share amounts)
                                                             
                                                             
Net income attributable to
Boston Properties, Inc.           $    47,854                $   48,454
common shareholders
                                                             
Add:
   Preferred dividends                 146                       -
   Noncontrolling interest
   in discontinued
   operations - common
   units of the
     Operating Partnership             1,819                     61
   Noncontrolling interest
   - common units of the               4,358                     5,973
   Operating Partnership
   Noncontrolling interest
   - redeemable preferred              1,180                     801
   units of the Operating
   Partnership
   Noncontrolling interests            2,574                     546
   in property partnerships
   Impairment loss from                3,241                     -
   discontinued operations
Less:
   Income from discontinued            61                        570
   operations
   Gain on forgiveness of
   debt from discontinued             20,182                  -         
   operations
                                                             
Income from continuing                 40,929                    55,265
operations
                                                             
Add:
   Real estate depreciation            142,555                   132,618
   and amortization (2)
   Income from discontinued            61                        570
   operations
Less:
   Noncontrolling interests
   in property                         3,038                     1,010
   partnership's share of
   funds from operations
   Noncontrolling interest
   - redeemable preferred              1,180                     801
   units of the Operating
   Partnership
   Preferred dividends                146                     -         
                                                             
Funds from operations (FFO)
attributable to the                    179,181                   186,642
Operating Partnership
                                                             
Less:
     Noncontrolling
     interest - common
     units of the Operating           18,557                  19,913    
     Partnership's share of
     funds from operations
                                                             
Funds from operations
attributable to Boston            $    160,624              $   166,729   
Properties, Inc.
                                                             
Boston Properties, Inc.'s
percentage share of funds             89.86     %              89.33     %
from operations - basic
                                                             
Weighted average shares               151,646                 148,343   
outstanding - basic
                                                             
   FFO per share basic            $    1.06                 $   1.12      
                                                             
Weighted average shares               153,259                 150,140   
outstanding - diluted
                                                             
   FFO per share diluted          $    1.06                 $   1.12      
                                                             

(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. (computed in
accordance with GAAP, including non-recurring items) for gains (or losses)
from sales of properties, impairment losses on depreciable real estate of
consolidated real estate, impairment losses on investments in unconsolidated
joint ventures driven by a measurable decrease in the fair value of
depreciable real estate held by the unconsolidated joint ventures, real estate
related depreciation and amortization, and after adjustment for unconsolidated
partnerships and joint ventures. FFO is a non-GAAP financial measure. The use
of FFO, combined with the required primary GAAP presentations, has been
fundamentally beneficial in improving the understanding of operating results
of REITs among the investing public and making comparisons of REIT operating
results more meaningful. Management generally considers FFO to be a useful
measure for reviewing our comparative operating and financial performance
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 vary among owners of identical
assets in similar condition based on historical cost accounting and useful
life estimates), FFO can help one compare the operating performance of a
company's real estate between periods or as compared to different companies.

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

FFO should not be considered as an alternative to net income attributable to
Boston Properties, Inc. (determined in accordance with GAAP) as an indication
of our performance.FFO does not represent cash generated from operating
activities determined in accordance with GAAP, and is not a measure of
liquidity or an indicator of our ability to make cash distributions.We
believe that to further understand our performance, FFO should be compared
with our reported net income attributable to Boston Properties, Inc. and
considered in addition to cash flows in accordance with GAAP, as presented in
our consolidated financial statements.

(2) Real estate depreciation and amortization consists of depreciation and
amortization from the Consolidated Statements of Operations of $120,595 and
$108,462, our share of unconsolidated joint venture real estate depreciation
and amortization of $21,657 and $23,121, and depreciation and amortization
from discontinued operations of $596 and $1,403, less corporate-related
depreciation and amortization of $293 and $368 for the three months ended
March 31, 2013 and 2012, respectively.


BOSTON PROPERTIES, INC.
PROJECTED ANNUALIZED 2013 RETURNS ON
OPERATING PROPERTY ACQUISITION
FOR THE NINE MONTHS ENDING DECEMBER 31, 2013
(dollars in thousands)
                                         
                                             Mountain View
                                             Research &
                                             Technology Parks
Base rent and recoveries from tenants        $   16,308
Straight-line rent                               420
Fair value lease revenue                        1,175     
Total rental revenue                             17,903
                                             
Operating Expenses                               3,241
                                             
Revenue less Operating Expenses                  14,662
                                             
Depreciation and amortization                    13,125
                                             
Net income                                   $   1,537
                                             
Add:
Depreciation and amortization                    13,125
                                             
Unleveraged FFO (1)                          $   14,662
                                             
Less:
Straight-line rent                               (420      )
Fair value lease revenue                         (1,175    )
                                             
Unleveraged Cash                             $   13,067
                                             
Purchase price                               $   233,500
Estimated closing and other costs               500       
Total Unleveraged Investment                 $   234,000
                                             
Annualized Unleveraged FFO Return (1)            8.4       %
                                             
Annualized Unleveraged Cash Return (2)           7.4       %
                                             

(1) Pursuant to the revised definition of Funds from Operations adopted by the
Board of Governors of the National Association of Real Estate Investment
Trusts (“NAREIT”), we calculate Funds from Operations, or “FFO,” by adjusting
net income (loss) (computed in accordance with GAAP, including non-recurring
items) for gains (or losses) from sales of properties, impairment losses on
depreciable real estate of consolidated real estate, impairment losses on
investments in unconsolidated joint ventures driven by a measurable decrease
in the fair value of depreciable real estate held by the unconsolidated joint
ventures, real estate related depreciation and amortization, and after
adjustment for unconsolidated partnerships and joint ventures. FFO is a
non-GAAP financial measure. Unleveraged FFO excludes, among other items,
interest expense, which may vary depending on the level of corporate debt or
property-specific debt. Annualized Unleveraged FFO Return is also a non-GAAP
financial measure that is determined by dividing (A) Unleveraged FFO (based on
annualizing the projected results for the nine months ending December 31,
2013) by (B) the Company's Total Unleveraged Investment. Management believes
projected Annualized Unleveraged FFO Return is a useful measure in the real
estate industry when determining the appropriate purchase price for a property
or estimating a property's value. When evaluating acquisition opportunities,
management considers, among other factors, projected Annualized Unleveraged
FFO Return because it excludes, among other items, interest expense (which may
vary depending on the level of corporate debt or property-specific debt), as
well as depreciation and amortization expense (which can vary among owners of
identical assets in similar condition based on historical cost accounting and
useful life estimates). Other factors that management considers include its
cost of capital and available financing alternatives. Other companies may
compute FFO, Unleveraged FFO and Annualized Unleveraged FFO Return differently
and these are not indicators of a real estate asset’s capacity to generate
cash flow.

(2) Annualized Unleveraged Cash Return is a non-GAAP financial measure that is
determined by dividing (A) Unleveraged Cash (based on annualizing the
projected results for the nine months ending December 31, 2013) by (B) the
Company's Total Unleveraged Investment. Other real estate companies may
calculate this return differently. Management believes that projected
Annualized Unleveraged Cash Return is also a useful measure of a property's
value when used in addition to Annualized Unleveraged FFO Return because, by
eliminating the effect of straight-lining of rent and the treatment of
in-place above- and below-market leases, it enables an investor to assess the
projected cash on cash return from the property over the forecasted period.

Management is presenting these projected returns and related calculations to
assist investors in analyzing the Company's acquisition. Management does not
intend to present this data for any other purpose, for any other period or for
its other properties, and is not intending for these measures to otherwise
provide information to investors about the Company's financial condition or
results of operations. The Company does not undertake a duty to update any of
these projections. There can be no assurance that actual returns will not
differ materially from these projections.


BOSTON PROPERTIES, INC.
PORTFOLIO LEASING PERCENTAGES
                                              
                                                    
                                                    
                                 % Leased by Location
                                 March 31, 2013     December 31, 2012
Boston                           90.6     %         90.5       %
New York                         94.5     %         93.7       %
Princeton                        78.3     %         78.2       %
San Francisco                    89.1     %         90.1       %
Washington, DC                   95.0     %         94.3       %
          Total Portfolio        91.7     %         91.4       %
                                                    
                                                    
                                                    
                                                    
                                 % Leased by Type
                                 March 31, 2013     December 31, 2012
Class A Office Portfolio         91.8     %         91.4       %
Office/Technical Portfolio       90.6     %         90.6       %
          Total Portfolio        91.7     %         91.4       %

Contact:

Boston Properties, Inc.
Michael Walsh, 617-236-3410
Senior Vice President, Finance
or
Arista Joyner, 617-236-3343
Investor Relations Manager
 
Press spacebar to pause and continue. Press esc to stop.