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MarketScreener Homepage  >  Equities  >  Nyse  >  Boston Properties, Inc.    BXP

BOSTON PROPERTIES, INC.

(BXP)
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BXP Investor Update: BofA 2020 Global Real Estate Conference

09/14/2020 | 01:15pm EST

BXP Investor Update:

BofA Securities 2020 Global Real Estate Conference

September 15-16, 2020

Forward-Looking Statements

This presentation contains forward-looking statements within the meaning of the federal securities laws. Please refer to the Appendix

for information on how to identify these statements, as well as risks and uncertainties, including the impact of the COVID-19 pandemic and related governmental actions and changes in economic conditions that could cause the Company's actual results to differ

materially from those expressed or implied by the forward-looking statements. The Company does not intend, nor does it undertake a duty, to update any forward looking statements, except as may be required by law.

Use of Non-GAAP Financial Measures and Other Definitions

This presentation contains certain non-GAAP financial measures within the meaning of Regulation G and other terms that have particular definitions when used by the Company. The Company's definitions may differ from those used by other companies and,

therefore, may not be comparable. The definitions of these terms and, if applicable, the reasons for their use and reconciliations to the most directly comparable GAAP measures are included in the Appendix.

Except as otherwise expressly indicated, all data is as of June 30, 2020.

2

BXP Snapshot

Differentiated Model with Long-Term Advantages

QUALITY

  • Highest quality office portfolio across five markets with strong historical employment growth
  • Proven, trusted leadership team
  • Modern portfolio of new or recently refreshed assets
  • Market-leaderin ESG

AGILITY

  • Diverse tenants across sectors and geographies
  • Modest leverage with substantial liquidity
  • A rich history of maximizing shareholder value across economic cycles

DURABILITY

  • Track record of FFO growth (11% FFO growth in 2019)
  • Portfolio of credit-strong corporate tenants
  • 8-year,weighted-average lease term1
  • Pipeline of pre-leased developments

1. Excludes residential and hotel properties. Calculation is based on BXP's Share of Annualized Rental Obligations. See Appendix.

3

BXP Quick Facts

The largest publicly-traded developer, owner and manager of Class A office properties in the U.S.

195 Properties1

$2.5 Billion

$15.8B

S&P 500

Equity Market Cap

BXP's Share of Annualized

Company

51.2M

Revenue2

$28.9B

Consolidated

Top 4%

Square Feet Owned1

5.0M

Market Cap

$615M

Most sustainable real estate companies3

92.0%

Square Feet Currently under

1

Annualized Funds Available for

Development/Redevelopment

Leased

Distribution2

869%

(In-Service Properties)1,4

$1.5B

Total Return

8.2 Years

4.3%

Since 1997 IPO

BXP's Share of

2.0x S&P 500

Weighted-Average Lease Term4,5

Annualized EBITDAre2

1.6x REIT Index7

Dividend Yield6

  1. Includes 100% of consolidated and unconsolidated properties.
  2. See Appendix.
  • 3. Ranked 33rd out of 964 global companies in the 2019 Global Real Estate Sustainability Benchmark (GRESB) assessment
    4. Excludes residential and hotel properties.
  1. Calculation is based on BXP's Share of Annualized Rental Obligations. See Appendix.
  2. As of June 30, 2020
  3. FTSE Nareit All REITs Index.

BXP Strategy

Develop Premier Properties in Robust Markets with Sustained Growth

Focus on supply-constrainedmarkets with the

Maintain high occupancy and achieve premium

strongest economic growth and investment

rental rates through economic cycles by delivering

our clients exceptional space and place

characteristics over time

Preserve our reputation for quality, integrity and fair dealing and be the counterparty of choice for real estate industry participants

SELECT

PREMIER

MARKETS

PROPERTIES

ROBUST

EXPERIENCE &

OPERATING &

INTEGRITY

DEVELOPMENT

PLATFORM

CAPITAL

FINANCIAL

ALLOCATION

STRENGTH

Provide an integrated leasing, development, construction and property management platform

to ensure superior customer service and to

create value for shareholders

Remain astute in market timing for investment

decisions to ensure continuous portfolio refreshment and value creation

Maintain a strong balance sheet and access to capital to minimize debt costs and maximize our

ability to make profitable investments

5

BXP Markets:

1

Focus on Growing Gateway Regions - Average 10-year CAGR of 4.5%

BXP square feet2

7.8M

% of BXP's Share of NOI3

23%

Rent growth 10-year CAGR1

8.3%

SAN

FRANCISCO

23%

LOS

ANGELES

4%

BXP square feet2

2.3M

% of BXP's Share of NOI3

4%

Rent growth 10-year CAGR1

4.0%

BXP square feet2

10.9M

BXP square feet2

15.5M

% of BXP's Share NOI3

% of BXP's Share of NOI3

24%

34%

Rent growth 10-year CAGR1

5.2%

Rent growth 10-year CAGR1

3.3%

NEW YORK

24%BOSTON

34%

WASH.

BXP square feet2

4.0M

DC

% of BXP's Share of NOI3

7%

7%

Rent growth 10-year CAGR1

1.7%

RESTON

and North

VA

8%

BXP square feet2

5.8M

% of BXP's Share of NOI3

8%

Rent growth 10-year CAGR1

2.1%

1.

  • 2.
    3.

Represents market square footage and market rent growth as defined and projected by Econometrics Advisors, ("CBRE EA"). Boston region includes the Total Boston Metro market as defined by CBRE EA; Los Angeles represents the West LA market as defined by CBRE EA and includes all submarkets indicated on slide 31; New York region represents New York Midtown and includes Total NYC Metro markets plus Trenton Submarket (Princeton), each as defined by CBRE EA; San Francisco includes Total San Francisco and San Jose Metro markets, each as defined by CBRE EA; Washington, DC includes all Washington, DC CBD submarkets as defined by CBRE EA and BXP active submarkets in Maryland (Bethesda/Chevy Chase and Rockville); and Reston and North Virginia submarket as defined by CBRE EA and represents BXP active submarkets only (Reston, Herndon, Springfield).

Includes 100% of consolidated and unconsolidated joint venture properties. Excludes termination income. See Appendix.

BXP - A Leader in Sustainability

7

BXP Update:

  • Proving our durability in Covid-19
  • Positioning our portfolio for the future

BXP Strengths in the Current Environment

96% of lease revenue1 comes from office rents

Credit-strong tenants with long lease terms

Modest annual rollover

4.6% in 2020, 6.9% anticipated in 2021

92.0% occupancy2

In-place rents below market

Pipeline of $2.8 billion of pre-leased developments3

74% leased4

Approximately 7% projected weighted-average stabilized unleveraged cash return

Strong balance sheet with $3.4 billion of liquidity5

  1. Represents percentage of consolidated lease revenue for the quarter ended 6/30/20.
  2. Includes 100% of consolidated and unconsolidated properties. Excludes residential and hotel properties.
  3. Represents BXP's Share of estimated total investment, including income (loss) and interest carry during development. For additional information, refer to the
    "Active Development Pipeline" page of this presentation
  4. Excludes residential units. As of August 3, 2020.
  5. Represents cash and cash equivalents as of June 30, 2020, plus cash held in escrow for possible use in Section 1031 exchange transaction(s)
  6. Represents BXP Share of NOI by geography as of June 30. 2020. Excludes termination income, See Appendix..
  7. Represents BXP's Share of Annualized Rental Obligations as of June 30, 2020. See Appendix.

Geographic Diversity6

Industry Diversity7

Recent Events at BXP

COLLECTIONS

  • Collecting ~98% of office rents and ~96% of total rents1

REPOPULATION

  • Re-populationoccurring across BXP markets
  • Market-leadinghealth security measures in place

LEASING

  • Approx. 942,000 square feet of leasing in Q2
    • 400,000 square feet lease with Microsoft in Reston, VA
  • More than 1M square feet of LOIs in process (through Sept 10) 2

ACQUISITIONS

    • Beach Cities Media Campus, El Segundo, California
  1. Percent of rent due August 1 that has been collected from tenants as of Sept 8, 2020.
  2. There can be no assurance that the Company will be successful in achieving its projected growth. See Appendix for discussion of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements.

MICROSOFT GROWING BY 400,000 SF IN BXP's

RESTON TOWN CENTER

IDG ANNOUNCES OFFICE RELOCATION TO 120,000 SF BXP SUBURBAN BOSTON OFFICE

Executive and Expert Perspective: The Future of Office

The headlines vs. the frontlines - large employers state the importance of office

No, we are not. That's ridiculous. The vast majority of our employees, [and] the vast majority of their time [will] continue to work in offices."

-Morgan Stanley CEO, James Gorman

(MS Financials Conference Transcript)

So much of what we do is collaborative…It's really hard to do if you're not co-located in the same space and it's important to even be able to see each other in the same space."

-Facebook executive Brian Rosenthal (Real Deal)

What does burnout look like? What does that connectivity and the community building look like? One of the things I feel is, hey, maybe

we are burning some of the social capital we built up in this phase where we are all working remote. What's the measure for that?"

-Microsoft CEO, Satya Nadella (New York Times)

In all scenarios I expect us to need physical spaces to get people together, absolutely. We have a lot of growth planned ahead.

…I don't think our existing footprint is going to be the issue."

-Google CEO, Sundar Pichai (Wired)

Concern that Goldman's vaunted culture, which leans on

in-person collaboration and mentorship of junior personnel, will

weaken over months of remote interaction."

-Goldman Sachs Co-head of Investment Banking, John Waldron (CNBC)

WSJ: Have you seen benefits from people working at home?

Mr. Hastings: No. I don't see any positives. Not being able to get

together in person, particularly internationally, is a pure negative. WSJ: Do you have a date in mind for when your workforce returns to the office?

Mr. Hastings: Twelve hours after a vaccine is approved.

-Netflix Founder and Co-CEO Reed Hastings (Wall Street Journal)

11

What our customers say:

Office is the point of pride for employees

"We were very happy to partner with Boston Properties on the development of Akamai's new global headquarters at 145 Broadway, Cambridge. Kendall Square has been Akamai's home for 22 years, and BXP created a fantastic new building for us that provides a point of pride on the skyline for our employees. BXP's focus

on creating great public and private spaces strengthens our ability to recruit and retain the best and brightest talent in this dynamic technology hub."

AKAMAI 145 BROADWAY CAMBRIDGE, MA

Tom Leighton, CEO and Co-Founder of Akama

12

What our customers say:

Office is the heart of company culture

" Our office space is a driving force in our

company culture. When we set out to find our next home, we were energized to meet with

the BXP team and understand their

commitment to creating great space and place. Our new office at CityPoint is the perfect location for us to recruit and retain the best talent and continue the strong growth of our company. Combined with our downtown

Boston location at Prudential Tower, our

spaces provide our employees the ideal

environments to continue to provide

outstanding engineering services to our clients."

SGH 20 CITYPOINT WALTHAM, MA REGION

Charles Russo, Senior Principal & CEO

13

What our customers say:

Office is core to talent acquisition & retention

" Given this is our U.S. headquarters, we wanted to solidify our firm's future as west LA's most prominent advertising group, by extending

our tenure at Colorado Center for the foreseeable future. Boston

Properties' "partnership-oriented approach" and the innovative office space at Colorado Center's prime location in Santa Monica allow for RPA to attract and retain the advertising industry's best talent, and

we are thrilled to be able to call Colorado Center home for the next

decade."

Bill Hagelstein, President, Chief Executive Officer, RPA

14

BXP: Positioned for Long-term Growth

BXP Growth

Projected CAGR from Development Projects2

Profile1

3.2%

$219M Cash NOI upon stabilization3

External growth,

$1.4B Projected value creation4

organic growth,

dividend yield

5-year historical average growth in BXP's Share of

2.8%

Same Property NOI-Cash(2015-2019)5

19% mark/market increase in net effective rents Q3 2017-Q2 2020

5-year average dividend yield

3.4%

42% increase over the past three years

  1. There can be no assurance that the Company will be successful in achieving its projected growth. See Appendix for discussion of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements.
  2. For purposes of this slide, "Development Projects" include the active development pipeline plus 2020 development deliveries and stabilizations. For additional detail please refer to the slide "Active Development Pipeline" in this presentation. CAGR is based on (x) the difference of Q2 2020 BXP's Share of EBITDAre-cash of $361.0 million multiplied by four (4), less BXP's Share of Annualized NOI - cash from Development Projects of $0.9 million, plus (y) the cumulative projected BXP's
    Share of NOI-cash upon stabilization from development deliveries through the end of Q4 2024. See Appendix.
  3. BXP's Share. Includes $1 per foot management fee deduction. For additional detail please refer to the slide "Active Development Pipeline" in this presentation
  4. Calculations assume a projected weighted-average stabilized BXP's Share of NOI-cash yield of 6.6% on BXP's Share of total budgeted costs, which is then valued at a 4.5% cap rate. For additional detail please refer to the slide "Active

16 Development Pipeline" in this presentation

5. Represents the five-yearquarterly average of BXP's Share of Same Property NOI - Cash (excluding termination income) based on actual quarterly growth 2015 - 2019

millions

$800 $700 $600 $500 $400 $300 $200 $100

$-

BXP Tech/Media/Life Sciences: Consistent absorption & expansion

Despite a Decade of Widespread Adoption of WFH in the Tech Sector

Tech/Media/LS:

BXP Rental Revenue Tech/Media/LifeSciences1

A Growing Anchor in BXP's Portfolio

Q1 2015 - Q1 2020

11%

CAGR

35% of Top 20

26% of Total

Revenue4

Rental

11.4 Year Weighted

Revenue3

Avg. Lease Term5

  1. Represents BXP's Share of Annualized Rental Obligations from tenants in the technology, media and life sciences sector for each quarter from Q1 2015 through Q1 2020
  2. See Appendix.
  3. Represents BXP's Share of Annualized Rental Obligations from tenants in the technology, media and life sciences sector as of June 30, 2020. See Appendix.

17 4. Represents the percentage of BXP's Share of Annualized Rental Obligations from tenants in the technology, media and life sciences sectors as a percentage of BXP's Share of Annualized Rental Obligations from top 20 tenants as of June 30, 2020

5. Represents the weighted average lease terms of salesforce.com, Akamai, Biogen, Google and Microsoft. Calculation for weighted average lease term is based on BXP's Share of Annualized Rental Obligations. See Appendix.

BXP Life Sciences: A proven platform to drive future growth

9.1M Square Feet of Current and Future Life Sciences Tenants

~3.3M SF Stabilized Portfolio

  • Across 46 buildings
  • Leased to 85+ tenants

~1.8M SF of potential life science/lab conversions

  • 200 West Street, Waltham, MA
  • 10 additional properties

~4.0M SF of future life sciences development

Waltham, MA

  • Cambridge, MA

South San Francisco, CA (Gateway Phase 2+)

  • Princeton, NJ

18

BXP Development: Proven Value Creation, Robust Pipeline

$4.8B of Recent Deliveries Generating Strong Returns

(2014-Q2 2020)

  • $4.8 billion of investment 2014 through Q2 2020
  • 7.6 million1 square feet
  • 7.1% BXP's Share of Annualized NOI-cashreturn2

$2.8B of Active Developments4:

  • $1.1B remaining to fund
  • 5.0 million1 square feet-74%pre-leased5
  • 6.6% projected weighted-average stabilized unleveraged cash return

$ in Millions

Development Deliveries3

$3,500

$3,000

$2,500

$2,000

$1,500

$1,000

$500

$-

2011-

2014-

2017-

2020-

2013

2016

2019

2024

1.

Includes 100% of consolidated and unconsolidated properties. See Appendix.

2.

See Appendix

3.

For purposes of this graph, developments are considered delivered in the year in which the property was/is projected to be stabilized. There can be no assurance that the Company will be successful in leasing the

properties on the expected schedule or at the assumed rental rates. See Appendix.

4.

Represents BXP's Share of Estimated Total Cost, including income (loss) and interest carry during development. For additional information, refer to the "Active Development Pipeline" page of this presentation.

19

5.

Includes leases with future commencement dates, but excludes residential units. Data as of August 3, 2020.

Delivered in Q1 2020: 17Fifty Presidents Street, Reston, VA

  • 17 stories; 276,000 square feet
    • Column-free,highly-efficient floorplates
    • Rooftop terrace and amenity room, fitness center and bike maintenance area
    • 226 below-grade parking spaces
  • Total investment of $143 million
  • 100% leased to Leidos
  • Completed and occupied in Q1 2020
  • Anticipate USGBC LEED® Silver
  • Located in the urban core of Reston Town Center

20

Delivered in Q2 2020: 20 CityPoint, Waltham, MA

  • Six stories; 211,500 square feet
    • Part of 450,000 square foot City Point complex featuring office, restaurants and retail
  • 62% Leased to Simpson Gumpertz Heger and Morse Barnes Brown Pendleton
  • LOI in process for remaining available office space
  • Total investment of $97 million
  • USGBC LEED® Platinum

21

$2.8B Active Development Pipeline - 74% pre-leased1

7750 Wisconsin Avenue, Bethesda, MD

100 Causeway Street, Boston, MA

325 Main Street, Cambridge, MA

100% leased. Tenant: Marriott

94% leased. Primary tenant: Verizon

90% leased. Primary tenant: Google

Reston Next, Reston, VA

2100 Pennsylvania Avenue, Washington, DC

Dock 72, Brooklyn, NY

72% leased. Primary tenant: Fannie Mae

61% leased. Primary tenant: WilmerHale

33% leased. Primary tenant: WeWork

22 1. Excludes residential units. As of August 3, 2020. Represents BXP's Share of estimated total investment, including income (loss) and interest carry during development. For additional information, refer to the "Active Development Pipeline" page of this presentation

15 Million Square Feet1 in Future Development Pipeline

Drives Long-Term Growth Opportunity

Back Bay Station

4th and Harrison

Project Name

Location

Estimated Square Feet1

Reston Next (Phase II)

Reston, VA

3,100,000

3 Hudson Boulevard (25% ownership)

New York, NY

2,000,000

CityPoint (50% option on 1.1 MM sf)

Waltham, MA

1,700,000

The Station on North First

San Jose, CA

1,550,000

Back Bay Station

Boston, MA

1,300,000

Platform 16 (55% ownership)

San Jose, CA

1,100,000

343 Madison (MTA) (55% ownership)

New York, NY

850,000

Plaza at Almaden

San Jose, CA

840,000

Fourth + Harrison

San Francisco, CA

820,000

Gateway South San Francisco (50% ownership)

South San Francisco, CA

640,000

Peterson Way

Santa Clara, CA

630,000

1001 6th Street, NW (50% ownership)

Washington, DC

520,000

2021 Rosecrans Avenue (Beach Cities Media Campus) (50% ownership)

El Segundo, CA

275,000

Future Development Pipeline

15,325,000

23

1. Includes 100% of consolidated and unconsolidated properties. Actual square footage may differ materially depending on the outcome of the permitting/entitlement process for each project.

Conservative Leverage Provides Balance Sheet Capacity

BXP's Share of Net Debt to BXP's Share of EBITDARE1

8.0

7.4x

7.0

6.7x

6.8x

6.6x

6.5x

6.2x

Billionsin$

6.0

5.7x

5.9x

5.0

2013

2014

2015

2016

2017

2018

2019

Q2 2020

annualized 2

BXP Market Capitalization1

$35

$30

BXP's Share of

$25

$12.9

Debt1

$20

$15

Equity3

$10

$15.9

$5

$0

Q2 2020

2014

2015

2016

2017

2018

2019

Q2 2020

BXP's Share of Debt to BXP's Share of

29.1%

27.5%

29.2%

30.0%

35.3%

32.6%

44.9%

Market Capitalization1

Fixed Charge Coverage Ratio1

2.5x

2.7x

2.8x

3.0x

2.9x

2.8x

2.7x

FAD Payout Ratio1

64.8%

77.1%

71.4%

74.8%

80.4%

86.7%

110.4%

  1. See Appendix.
  2. For purposes of this ratio, BXP's Share of Annualized EBITDAre equals the product of BXP's Share of EBITDAre for Q2 2020 multiplied by four (4).

24 3. Consists of Common Stock, Operating Partnership Units and $200M of Preferred Stock.

BXP Liquidity and Near-Term Maturities

Liquidity

2

$3.4 Billion 1

Near-Term Maturities

$2.0

$1.5

Billions

$1.0

Cash

1

$1.9B

Revolving

$0.5

Credit Facility

$1.5B

$0.0

Wtd. Avg. Debt Rate

% of Debt Maturing

Revolving Credit Facility

Cash

$1,650

$937

$913

$700

$202

2020

2021

2022

2023

2024

Secured

Unsecured

LOC and Term Loan

4.0%

4.0%

2.9%

3.7%

3.8%

1.6%

7.2%

7.1%

12.7%

5.4%

  1. Represents cash and cash equivalents as of June 30, 2020, plus cash held in escrow for possible use in Section 1031 exchange transaction(s)
  2. See Appendix.

25

BXP: Relentless Commitment to Shareholder Returns

A History of Shareholder Returns

A Platform for Growth

7%

5%

4.3%

Average Annual

Three-year

Dividend

average

Shareholder

Yield3

annual FFO

Return1 10-years

growth2

  1. Represents the average annual total shareholder return between June 30, 2010 and June 30, 2020.
  2. Represents the average year-over-year growth rate in FFO per share in 2017, 2018 and 2019. See Appendix.
  3. Based on the annualized dividend of $3.92 per share and closing share price as of June 30, 2020.

26

BXP Summary

  • The Qualityof our portfolio and tenant base provides resilience in the face of a recession
  • Our team and our capital structure provides Agilityfor us to allocate capital prudently, invest wisely and be opportunistic to maximize value
  • The Durabilityof the business model provides cash flow stability and long-term growth
QUALITYAGILITY DURABILITY

27

Supporting information

$2.8 Billion Active Development Pipeline1

BXP's

Estimated Total

Estimated

Percent

Actual/Est.

Project Name - Key tenant

Location

Square Feet

Ownership

Investment (BXP's

Investment

Initial

Leased2

Percentage

Share)1

PSF1

Occupancy

OFFICE

Dock 72 - WeWork

Brooklyn, NY

670,000

50%

$243,150,000

$726

33%

Q4 2019

100 Causeway Street - Verizon

Boston, MA

632,000

50%

$267,300,000

$846

94%

Q2 2021

325 Main Street - Google

Cambridge, MA

420,000

100%

$418,400,000

$996

90%

Q3 2022

7750 Wisconsin Avenue - Marriott (International HQ)

Bethesda, MD

734,000

50%

$198,900,000

$542

100%

Q3 2022

2100 Pennsylvania Avenue - WilmerHale

Washington, DC

469,000

100%

$356,100,000

$759

61%

Q3 2022

Reston Next (formerly Reston Gateway) - Fannie Mae

Reston, VA

1,062,000

100%

$715,300,000

$674

72%

Q4 2022

Total Office Properties under Construction

3,987,000

$2,199,150,000

$722

75%

RESIDENTIAL

Hub50House (The Hub on Causeway - Residential) (440 units)

Boston, MA

320,000

50%

$153,500,000

$959

47%

Q4 2019

The Skylyne (MacArthur Station Residences) (402 units)

Oakland, CA

324,000

100%

$263,600,000

$814

N/A

Q3 2020

Total Residential Properties Under Construction

644,000

$417,100,000

$862

47%

OFFICE REDEVELOPMENT

One Five Nine East 53rd Street - NYU

New York, NY

220,000

55%

$150,000,000

$1,240

96%

Q3 2020

200 West Street - A123 Systems

Waltham, MA

126,000

100%

$47,800,000

$379

0%

Q1 2021

Total Properties under Redevelopment

346,000

$197,800,000

$801

61%

3

Total Office and Residential Properties Under Construction and Redevelopment

4,977,000

$2,814,050,000

$768

74%

  1. Represents BXP's Share of estimated total cost, including income (loss) and interest carry on debt and equity investment during development. See Appendix.
  2. Data as of August 3, 2020
  3. Excludes residential units.

29

Projected Returns from Developments Enhance Growth1

Average 6.6% Unleveraged Cash Return

($ in M)

2020

2021

2022

2023

2024

Total

BXP's Share of Total Budgeted Costs of Development

$378

$538

$1,302

$715

$356

$3,289

Projects2 (A)

Estimated BXP's Share of Cash NOI upon Stabilization3

$26

$32

$90

$48

$23

$219

Estimated Value upon Completion

$4,762

(4.5% Cap Rate)4 (B)

Projected Value Creation (B - A)

$1,473

Projected Value Creation/Cost

44.8%

Projected Value Creation/Share

$8.51

Compounded Annual Growth Rate (CAGR)5

3.2%

  1. There can be no assurance that the Company will be successful in leasing the properties on the expected schedule or at the assumed rental rates. See Appendix for discussion of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements.
  2. For purposes of this slide, "Development Projects" include the active development pipeline plus 2020 development deliveries and stabilizations. For additional detail please refer to the slide "Active Development Pipeline."
  3. Includes $1 per foot management fee deduction.
  4. Calculations assume a projected weighted-averagestabilized BXP's Share of NOI-cashyield of 6.6% on BXP's Share of total budgeted costs, which is then valued at a 4.5% cap rate.
  5. CAGR is based on (x) the difference of Q2 2020 BXP's Share of EBITDAre-cash of $361.0 million multiplied by four (4), less BXP's Share of Annualized NOI -cashfrom Development Projects of $0.9 million, plus (y) the

cumulative projected BXP's Share of NOI-cash upon stabilization from development deliveries through the end of Q4 2024. See Appendix.

30

Growth in BXP's Share of Same Property NOI - Cash1

5-Year Quarterly Average through 2019 = 2.8%2

8.0%

7.0%

6.0%

5.8%

5.0%

4.1%

4.0%

3.0%

2.8%

2.0%

1.9%

1.5%

1.0%

0.7%

0.0%

2015

2016

2017

2018

2019

  1. See Appendix.
  2. Represents the five-year average quarter-over-quartergrowth in BXP's Share of Same Property NOI - Cash (excluding termination income) based on actual quarterly growth in 2015, 2016, 2017, 2018 and 2019. See Appendix.

31

Returns from Dividends

Dividends in Dollars per Share

$6.00

$5.00

$4.00

$3.00

$2.00

$1.00

$0.00

42% Increase in annual dividend per share over the past three years

5-Year average annual dividend yield = 3.4% 1

$3.92

$3.83

$3.50

$3.05

$2.70

2016

2017

2018

2019

2020

2

  1. Calculated as annual dividend amount divided by the stock price on the last trading day of the year
  2. Represents Q2 2020 dividend of $0.98 per share multiplied by (4).

32

Q2 2020 Appendix

FORWARD-LOOKING STATEMENTS

This Presentation contains forward-looking statements within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions, in each case, to the extent applicable. We caution investors that any such forward-looking statements are based on current beliefs or expectations of future events and on assumptions made by, and information currently available to, our management. When used, the words "anticipate," "believe," "budget," "estimate," "expect," "intend," "may," "might," "plan," "project," "should," "will" and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. Such statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance or occurrences, which may be affected by known and unknown risks, trends, uncertainties and factors that are, in some cases, beyond our control. Should one or more of these known or unknown risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expressed or implied by the forward-looking statements. We caution you that, while forward-looking statements reflect our good-faith beliefs when we make them, they are not guarantees of future performance or occurrences and are impacted by actual events when they occur after we make such statements. Accordingly, investors should use caution in relying on forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

One of the most significant factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements is the ongoing impact of the global COVID-19 pandemic on the U.S. and global economies, which has impacted, and is likely to continue to impact, us and, directly or indirectly, many of the other important factors below and the risks described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and our subsequent filings under the Exchange Act.

Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

  • the risks and uncertainties 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, as well as the effect of any relaxation of current restrictions, 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 and measures continue to result in increasing unemployment that impacts the ability of our residential tenants to generate sufficient income to pay, or make them unwilling to pay rent in a timely manner, in full or at all; the health, continued service and availability of our personnel, including our key personnel and property management teams; and the effectiveness or lack of effectiveness of governmental relief in providing assistance to individuals and large and small businesses, including our tenants, that have suffered significant adverse effects from COVID-19;
  • volatile or adverse global economic and political conditions, health crises and dislocations in the credit markets could adversely affect our access to cost- effective capital and have a resulting material adverse effect on our business opportunities, results of operations and financial condition;
  • general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, tenant space utilization, dependence on tenants' financial condition, and competition from other developers, owners and operators of real estate);

35

FORWARD-LOOKING STATEMENTS (continued)

  • failure to manage effectively our growth and expansion into new markets and sub-markets or to integrate acquisitions and developments successfully;
  • the ability of our joint venture partners to satisfy their obligations;
  • risks and uncertainties affecting property development and construction (including, without limitation, construction delays, increased construction costs, cost overruns, inability to obtain necessary permits, tenant accounting considerations that may result in negotiated lease provisions that limit a tenant's liability during construction, and public opposition to such activities);
  • risks associated with the availability and terms of financing and the use of debt to fund acquisitions and developments or refinance existing indebtedness, including the impact of higher interest rates on the cost and/or availability of financing;
  • risks associated with forward interest rate contracts and the effectiveness of such arrangements;
  • risks associated with downturns in the national and local economies, increases in interest rates, and volatility in the securities markets;
  • risks associated with actual or threatened terrorist attacks;
  • costs of compliance with the Americans with Disabilities Act and other similar laws;
  • potential liability for uninsured losses and environmental contamination;
  • risks associated with the physical effects of climate change;
  • risks associated with security breaches through cyber attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology (IT) networks and related systems, which support our operations and our buildings;
  • risks associated with BXP's potential failure to qualify as a REIT under the Internal Revenue Code of 1986, as amended;
  • possible adverse changes in tax and environmental laws;
  • the impact of newly adopted accounting principles on our accounting policies and on period-to-period comparisons of financial results;
  • risks associated with possible state and local tax audits;
  • risks associated with our dependence on key personnel whose continued service is not guaranteed; and
  • the other risk factors identified in our most recently filed Annual Report on Form 10-K for the fiscal year ended December 31, 2019 or described herein, including those under the caption "Risk Factors."

36

FORWARD-LOOKING STATEMENTS (continued)

The risks set forth above are not exhaustive. Other sections of this report may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment, particularly in light of the circumstances relating to COVID-19. New risk factors emerge from time to time and it is not possible for management to predict all risk factors, nor can we assess the impact of all risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Investors should also refer to our most recent Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q for future periods and Current Reports on Form 8-K as we file them with the SEC, and to other materials we may furnish to the public from time to time through Current Reports on Form 8-K or otherwise, for a discussion of risks and uncertainties that may cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements. We expressly disclaim any responsibility to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events, or otherwise, and you should not rely upon these forward-looking statements after the date of this Appendix.

37

DEFINITIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER TERMS

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

The Company also presents "BXP's Share" of certain of these measures, which are non-GAAP financial measures that are calculated as the consolidated amount calculated in accordance with GAAP, plus the Company's share of the amount from the Company's unconsolidated joint ventures (calculated based upon the Company's percentage ownership interest 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, financing 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.

In addition, the Company presents certain of these measures on a "Annualized" basis, which means the measure for the applicable quarter is multiplied by four (4). Management believes that presenting "Annualized" measures allows investors to compare results of a particular quarter to the same measure for full years and thereby more easily assess trend data. However, the Company cautions investors that "Annualized" measures should not be considered a substitute for the measure calculated in accordance with GAAP and should only be considered together with and as a supplement to the Company's financial information prepared in accordance with GAAP.

38

DEFINITIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER TERMS (continued)

Annualized Revenue

Annualized Revenue is defined as (1) revenue less termination income for the quarter ended June 30, 2020, multiplied by four (4), plus (2) termination income for the quarter ended June 30, 2020. The Company believes that termination income can distort the results for any given period because termination income generally represents multiple months or years of a tenant's rental obligations that are paid in a lump sum in connection with a negotiated early termination of the tenant's lease and thus does not reflect the core ongoing operating performance of the Company's properties. As a result, the Company believes that by presenting Annualized Revenue without annualizing termination income, investors may more easily compare quarterly revenue to revenue for full fiscal years, which can provide useful trend data. Annualized Revenue should not be considered a substitute for revenue in accordance with GAAP and should only be considered together with and as a supplement to the Company's financial information prepared in accordance with GAAP.

Annualized Rental Obligations

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

39

DEFINITIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER TERMS (continued)

Debt to Market Capitalization Ratio

Consolidated Debt to Consolidated Market Capitalization Ratio is a measure of leverage commonly used by analysts in the REIT sector that equals the quotient of (A) the Company's Consolidated Debt divided by (B) the Company's Consolidated Market Capitalization, presented as a percentage. Consolidated Market Capitalization is the sum of (x) the Company's Consolidated Debt plus (y) the market value of the Company's outstanding equity securities calculated using the closing price per share of common stock of the Company, as reported by the New York Stock Exchange, multiplied by the sum of (1) outstanding shares of common stock of the Company, (2) outstanding common units of limited partnership interest in Boston Properties Limited Partnership (excluding common units held by the Company), (3) common units issuable upon conversion of all outstanding LTIP Units, assuming all conditions have been met for the conversion of the LTIP Units, (4) on and after February 6, 2015, which was the end of the performance period for 2012 OPP Units and thus the date earned, common units issuable upon conversion of 2012 OPP Units that were issued in the form of LTIP Units, (5) on and after February 4, 2016, which was the end of the performance period for 2013 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2013 MYLTIP Units that were issued in the form of LTIP Units, (6) on and after February 3, 2017, which was the end of the performance period for 2014 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2014 MYLTIP Units that were issued in the form of LTIP Units, (7) on and after February 4, 2018, which was the end of the performance period for 2015 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2015 MYLTIP Units that were issued in the form of LTIP Units, (8) on and after February 9, 2019, which was the end of the performance period for 2016 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2016 MYLTIP Units that were issued in the form of LTIP Units and (9) on and after February 6, 2020, which was the end of the performance period for 2017 MYLTIP Units and thus the date earned, common units issuable upon conversion of 2017 MYLTIP Units that were issued in the form of LTIP Units plus (z) outstanding shares of 5.25% Series B Cumulative Redeemable Preferred Stock multiplied by their fixed liquidation preference of $2,500 per share. The calculation of Consolidated Market Capitalization does not include LTIP Units issued in the form of MYLTIP Awards unless and until certain performance thresholds are achieved and they are earned. Because their three-year performance periods have not yet ended, 2018, 2019 and 2020 MYLTIP Units are not included.

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

40

DEFINITIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER TERMS (continued)

EBITDAre

Pursuant to the definition of Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("Nareit"), the Company calculates Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate, or "EBITDAre," as net income (loss) attributable to Boston Properties, Inc. common shareholders, the most directly comparable GAAP financial measure, plus net income attributable to noncontrolling interests, interest expense, losses (gains) from early extinguishments of debt, depreciation and amortization expense, impairment loss and adjustments to reflect the Company's share of EBITDAre from unconsolidated joint ventures, less gains (losses) on sales of real estate, gain on sale of investment in unconsolidated joint venture, gains on consolidation of joint ventures and discontinued operations. EBITDAre is a non-GAAP financial measure. The Company uses EBITDAre internally as a performance measure and believes EBITDAre provides useful information to investors regarding its financial condition and results of operations at the corporate level because, when compared across periods, EBITDAre reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and acquisition and development activities on an unleveraged basis, providing perspective not immediately apparent from net (loss) income attributable to Boston Properties, Inc. common shareholders.

In some cases the Company also presents (A) BXP's Share of EBITDAre - cash, which is BXP's Share of EBITDAre after eliminating the effects of straight-line rent (excluding the impact related to deferred revenue related to improvements to long-lived assets paid for by a tenant), fair value lease revenue and non-cash termination income adjustment (fair value lease amounts) and adding straight-line ground rent expense, stock-based compensation expense and lease transaction costs that qualify as rent inducements, and (B) Annualized EBITDAre, which is EBITDAre for the applicable fiscal quarter ended multiplied by four (4). Presenting BXP's Share of EBITDAre - cash allows investors to compare EBITDAre across periods without taking into account the effect of certain non-cash rental revenues, ground rent expense and stock based compensation expense. Similar to depreciation and amortization, because of historical cost accounting, fair value lease revenue may distort operating performance measures at the property level. Additionally, presenting EBITDAre excluding the impact of straight-line rent provides investors with an alternative view of operating performance at the property level that more closely reflects rental revenue generated at the property level without regard to future contractual increases in rental rates. In addition, the Company's management believes that the presentation of Annualized EBITDAre provides useful information to investors regarding the Company's results of operations because it enables investors to more easily compare quarterly EBITDAre to EBITDAre from full fiscal years.

The Company's computation of EBITDAre may not be comparable to EBITDAre 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. The Company believes that in order to facilitate a clear understanding of its operating results, EBITDAre should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in the Company's consolidated financial statements. EBITDAre should not be considered a substitute to net income attributable to Boston Properties, Inc. common shareholders in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Company's financial information prepared in accordance with GAAP.

41

DEFINITIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER TERMS (continued)

Fixed Charge Coverage Ratio

Fixed Charge Coverage Ratio equals BXP's Share of EBITDAre - cash divided by Total Fixed Charges. BXP's Share of EBITDAre - cash is a non- GAAP financial measure equal to BXP's Share of EBITDAre after eliminating the effects of straight-line rent (excluding the impact related to deferred revenue related to improvements to long-lived assets paid for by a tenant), fair value lease revenue and non-cash termination income adjustment (fair value lease amounts) and adding straight-line ground rent expense, stock-based compensation expense and lease transaction costs that qualify as rent inducements.

Total Fixed Charges is also a non-GAAP financial measure equal to the sum of BXP's Share of interest expense, capitalized interest, maintenance capital expenditures, hotel improvements, equipment upgrades and replacements and preferred dividends/distributions less fair value interest adjustment and hedge amortization and amortization of financing costs. The Company believes that the presentation of its Fixed Charge Coverage Ratio provides investors with useful information about the Company's financial performance as it relates to overall financial flexibility and balance sheet management, and, although the Company's Fixed Charge Coverage Ratio is not a liquidity measure, as it does not include adjustments to reflect changes in working capital or the actual timing of the payment of income or expense items that are accrued in the period, the Company believes that its Fixed Charge Coverage Ratio provides investors with useful supplemental information regarding the Company's ability to service its existing fixed charges. Furthermore, the Company believes that the Fixed Charge Coverage Ratio is frequently used by analysts, rating agencies and other interested parties in the evaluation of the Company's performance as a REIT and, as a result, by presenting the Fixed Charge Coverage Ratio the Company assists these parties in their evaluations. The Company's calculation of its Fixed Charge Coverage Ratio may not be comparable to the ratios reported by other REITs or real estate companies that define the term differently and should only be considered together with and as a supplement to the Company's financial information prepared in accordance with GAAP. For clarification purposes, this ratio does not include gains (losses) from early extinguishments of debt.

42

FORWARD-LOOKING STATEMENTS

Funds Available for Distribution (FAD) and FAD Payout Ratio

In addition to Funds from Operations (FFO), which is defined on the following page, the Company presents Funds Available for Distribution to common shareholders and common unitholders (FAD), which is a non-GAAP financial measure that is calculated by (1) adding to FFO lease transaction costs that qualify as rent inducements, non-real estate depreciation, non-cash losses (gains) from early extinguishments of debt, stock-based compensation expense, Accounting Standards Codification ("ASC") 470-20 interest expense adjustment, partners' share of consolidated and unconsolidated joint venture 2nd generation tenant improvement and leasing commissions (included in the period in which the lease commences) and unearned portion of capitalized fees, (2) eliminating the effects of straight-line rent, straight-line ground rent expense adjustment, fair value interest adjustment and hedge amortization and fair value lease revenue, and (3) subtracting maintenance capital expenditures, hotel improvements, equipment upgrades and replacements, 2nd generation tenant improvement and leasing commissions (included in the period in which the lease commences), non-cash termination income adjustment (fair value lease amounts) and impairments of non-depreciable real estate. The Company believes that the presentation of FAD provides useful information to investors regarding the Company's results of operations because FAD provides supplemental information regarding the Company's operating performance that would not otherwise be available and may be useful to investors in assessing the Company's operating performance. Additionally, although the Company does not consider FAD to be a liquidity measure, as it does not make adjustments to reflect changes in working capital or the actual timing of the payment of income or expense items that are accrued in the period, the Company believes that FAD may provide investors with useful supplemental information regarding the Company's ability to generate cash from its operating performance and the impact of the Company's operating performance on its ability to make distributions to its shareholders. Furthermore, the Company believes that FAD is frequently used by analysts, investors and other interested parties in the evaluation of its performance as a REIT and, as a result, by presenting FAD the Company is assisting these parties in their evaluation. FAD should not be considered as a substitute for net income (loss) attributable to Boston Properties, Inc.'s common shareholders determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Company's financial information prepared in accordance with GAAP.

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

43

DEFINITIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER TERMS (continued)

Funds from Operations (FFO)

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

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

In-Service Properties

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

44

DEFINITIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER TERMS (continued)

Net Debt

Net Debt is equal to (A) the Company's consolidated debt plus special dividends payable (if any) less (B) cash and cash equivalents and cash held in escrow for potential Section 1031 like kind exchange(s). The Company believes that the presentation of Net Debt provides useful information to investors because the Company reviews Net Debt as part of the management of its overall financial flexibility, capital structure and leverage. In particular, Net Debt is an important component of the Company's ratio of BXP's Share of Net Debt to BXP's Share of EBITDAre. BXP's Share of Net Debt is calculated in a similar manner to Net Debt, except that BXP's Share of Debt and BXP's Share of cash are utilized instead of the Company's consolidated debt and cash in the calculation. The Company believes BXP's Share of Net Debt to BXP's Share of EBITDAre is useful to investors because it provides an alternative measure of the Company's financial flexibility, capital structure and leverage based on its percentage ownership interest in all of its assets. Furthermore, certain debt rating agencies, creditors and credit analysts monitor the Company's Net Debt as part of their assessments of its business. The Company may utilize a considerable portion of its cash and cash equivalents at any given time for purposes other than debt reduction. In addition, cash and cash equivalents and cash held in escrow for potential Section 1031 like kind exchange(s) may not be solely controlled by the Company. The deduction of these items from consolidated debt in the calculation of Net Debt therefore should not be understood to mean that these items are available exclusively for debt reduction at any given time.

Net Operating Income (NOI)

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

45

DEFINITIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER TERMS (continued)

Net Operating Income (NOI) (continued)

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

Rental Obligations

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

Rental Revenue

Rental Revenue is equal to Total revenue, the most directly comparable GAAP financial measure, less development and management services revenue and direct reimbursements of payroll and related costs from management services contracts. The Company uses Rental Revenue internally as a performance measure and in calculating other non-GAAP financial measures (e.g., NOI), which provides investors with information regarding our performance that is not immediately apparent from the comparable non-GAAP measures and allows investors to compare operating performance between periods. The Company also presents Rental Revenue (excluding termination income) because termination income can distort the results for any given period because it generally represents multiple months or years of a tenant's rental obligations that are paid in a lump sum in connection with a

negotiated early termination of the tenant's lease and does not reflect the core ongoing operating performance of the Company's properties.

Same Properties

In the Company's analysis of NOI, particularly to make comparisons of NOI between periods meaningful, it is important to provide information for properties that were in-service and owned by the Company throughout each period presented. The Company refers to properties acquired or placed in- service prior to the beginning of the earliest period presented and owned by the Company through the end of the latest period presented as "Same Properties." "Same Properties" therefore exclude properties placed in-service, acquired, repositioned or in development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented. Accordingly, it takes at least one year and one quarter after a property is acquired or treated as "in-service" for that property to be included in "Same Properties."

46

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

Revenue and Rental Revenue (in thousands)

Quarter ended

June 30, 2020

Revenue

$

654,773

Add:

BXP's share of revenue from unconsolidated Joint Ventures ("JVs")1

43,880

Less:

Partners' share of revenue from consolidated JVs2

60,168

Termination income

3,309

BXP's share of termination income from unconsolidated JVs1

-

Add:

Partners' share of termination income from consolidated JVs2

321

BXP's Share of Revenue (excluding termination income) (A)

$

635,497

BXP's Share of Annualized Revenue (excluding termination income)3

$

2,541,988

(A x 4)

Add:

Termination income

3,309

BXP's share of termination income from unconsolidated JVs1

-

Less:

Partners' share of termination income from consolidated JVs2

321

BXP's Share of Annualized Revenue

$

2,544,976

Quarter ended

June 30, 2020

Revenue

$

654,773

Less:

Direct reimbursements of payroll and related costs from

2,484

management services contracts

Development and management services

8,125

Rental Revenue

644,164

Add:

BXP's share of Rental Revenue from unconsolidated JVs1

43,875

Less:

Partners' share of Rental Revenue from consolidated JVs2

60,167

BXP's Share of Rental Revenue

$

627,872

Less:

Termination income

3,309

BXP's share of termination income from unconsolidated JVs1

-

Add:

Partners' share of termination income from consolidated JVs2

321

BXP's Share of Rental Revenue (excluding termination income) (B)

$

624,884

BXP's Share of Annualized Rental Revenue (excluding termination

$

2,499,536

income)3 (B x 4)

  1. See "Joint Ventures-Unconsolidated" in this Appendix.
  2. See "Joint Ventures-Consolidated" in this Appendix.
  3. BXP's Share of Annualized Revenue (excluding termination income) equals BXP's Share of Revenue (excluding termination income), multiplied by four (4). Similarly, BXP's Share of Annualized Rental Revenue (excluding termination income) equals BXP's Share of Rental Revenue (excluding termination income), multiplied by four (4).

47

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

Net Debt to EBITDAre Ratios (dollars in thousands)

Quarter Ended

Year Ended December 31,

June 30, 2020

2019

2018

2017

2016

2015

2014

2013

Consolidated debt

$

13,048,579

$

11,811,806

$

11,007,757

$

10,271,611

$

9,796,133

$

9,188,543

$

10,086,984

$

11,521,508

Add:

Special dividend payable

-

-

-

-

-

214,386

769,790

384,517

Less:

Cash and cash equivalents

1,691,047

644,950

543,359

434,767

356,914

723,718

1,763,079

2,365,137

Cash held in escrow for 1031 exchange

250,607

-

44,401

-

-

-

433,794

-

Net debt

11,106,925

11,166,856

10,419,997

9,836,844

9,439,219

8,679,211

8,659,901

9,540,888

Add:

BXP's share of unconsolidated JV debt

1,067,400

980,110

890,574

604,845

318,193

351,926

349,647

327,526

Partners' share of cash and cash equivalents from

129,709

120,791

124,202

128,143

108,181

85,909

104,192

60,704

consolidated JVs

Less:

BXP's share of cash and cash equivalents from

78,768

90,206

99,750

59,772

45,974

44,505

53,851

37,799

unconsolidated JVs

Partners' share of consolidated JV debt

1,197,276

1,199,854

1,204,774

1,209,280

1,144,473

1,168,142

1,324,910

1,063,116

BXP's Share of Net Debt (A)

$

11,027,990

$

10,977,697

$

10,130,249

$

9,300,780

$

8,675,146

$

7,904,399

$

7,734,979

$

8,828,203

BXP's Share of EBITDAre1 (B)

$

1,494,668 2

$

1,661,741

$

1,480,334

$

1,422,711

$

1,407,815

$

1,331,807

$

1,345,399

$

1,322,898

BXP's Share of Net Debt to BXP's Share of

7.4

6.6

6.8

6.5

6.2

5.9

5.7

6.7

EBITDAre (A ÷ B)

1See reconciliations of "EBITDAre" in this Appendix.

2For the quarter ended June 30, 2020, BXP's Share of EBITDAre is annualized and calculated as the product of such amount for the quarter ($373,667) multiplied by four (4).

48

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

Debt to Market Capitalization Ratios

(dollars in thousands, except per share amounts)

December 31,

June 30, 2020

2019

2018

2017

2016

2015

2014

Common stock price at quarter/year end

$

90.38

$

137.86

$

112.55

$

130.03

$

125.78

$

127.54

$

128.69

Equity market capitalization at quarter/year end (A)

$

15,844,055

$

24,008,146

$

19,584,824

$

22,559,179

$

21,805,734

$

22,074,258

$

22,214,860

Consolidated debt (B)

$

13,048,579

$

11,811,806

$

11,007,757

$

10,271,611

$

9,796,133

$

9,188,543

$

10,086,984

Add:

BXP's share of unconsolidated JV debt

1,067,400

980,110

890,574

604,845

318,193

351,926

349,647

Less:

Partners' share of consolidated JV debt

1,197,276

1,199,854

1,204,774

1,209,280

1,144,473

1,168,142

1,324,910

BXP's Share of Debt (C)

$

12,918,703

$

11,592,062

$

10,693,557

$

9,667,176

$

8,969,853

$

8,372,327

$

9,111,721

Consolidated Market Capitalization (A + B)

$

28,892,634

$

35,819,952

$

30,592,581

$

32,830,790

$

31,601,867

$

31,262,801

$

32,301,844

Consolidated Debt/Consolidated Market Capitalization [B ÷ (A + B)]

45.16 %

32.98 %

35.98 %

31.29 %

31.00 %

29.39 %

31.23 %

BXP's Share of Market Capitalization (A + C)

$

28,762,758

$

35,600,208

$

30,278,381

$

32,226,355

$

30,775,587

$

30,446,585

$

31,326,581

BXP's Share of Debt/BXP's Share of Market Capitalization [C ÷ (A + C)]

44.91 %

32.56 %

35.32 %

30.00 %

29.15 %

27.50 %

29.09 %

49

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

EBITDAre

(dollars in thousands)

Quarter Ended

Year Ended December 31,

June 30, 2020

2019

2018

2017

2016

2015

2014

2013

Net income attributable to Boston Properties, Inc. common shareholders

$

266,525

$ 511,034

$ 572,347

$

451,939

$

502,285

$ 572,606

$ 433,111

$ 741,754

Add:

Preferred dividends

2,625

10,500

10,500

10,500

10,500

10,500

10,500

8,057

Net income attributable to noncontrolling interests

29,430

130,465

129,716

100,042

57,192

216,812

82,446

91,629

Losses from interest rate contracts

-

-

-

-

140

-

-

-

Losses (gains) from early extinguishments of debt

-

29,540

16,490

(496)

371

22,040

10,633

(122)

Interest expense

107,142

412,717

378,168

374,481

412,849

432,196

455,743

446,880

Depreciation and amortization expense

178,188

677,764

645,649

617,547

694,403

639,542

628,573

560,637

Impairment losses

-

24,038

11,812

-

1,783

-

-

8,306

Less:

Discontinued operations

-

-

-

-

-

-

-

137,792

Gains on consolidation of JVs

-

-

-

-

-

-

-

385,991

Gain on sale of investment in unconsolidated JV

-

-

-

-

59,370

-

-

-

Gains (losses) on sales of real estate

203,767

709

182,356

7,663

80,606

375,895

168,039

-

Income (loss) from unconsolidated JVs

1,832

46,592

2,222

11,232

8,074

22,770

12,769

75,074

Add:

BXP's share of EBITDAre from unconsolidated JVs1

27,807

98,389

81,340

65,132

50,712

45,864

45,076

128,669

EBITDAre

406,118

1,847,146

1,661,444

1,600,250

1,582,185

1,540,895

1,485,274

1,386,953

Less:

Partners' share of EBITDAre from consolidated JVs2

32,451

185,405

181,110

177,539

174,370

209,088

139,875

64,055

BXP's Share of EBITDAre

$

373,667

$ 1,661,741

$1,480,334

$1,422,711

$1,407,815

$1,331,807

$1,345,399

$1,322,898

BXP's Share of EBITDAre

$

373,667

$ 1,661,741

$1,480,334

$1,422,711

$1,407,815

$1,331,807

$1,345,399

$1,322,898

Add:

Lease transaction costs that qualify as rent inducements3

1,616

6,627

8,692

920

8,853

12,667

9,006

9,679

BXP's share of lease transaction costs that qualify as rent inducements from

(187) 1

7,905

unconsolidated JVs3

Straight-line ground rent expense adjustment

951

4,029

BXP's share of straight-line ground rent expense adjustment from unconsolidated

41

1

40

JVs

Stock-based compensation expense

10,374

40,958

Less:

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

-

-

Partners' share of lease transaction costs that qualify as rent inducements from

120

449

consolidated JVs3

2

Straight-line rent and fair value lease revenue

19,183

120,269

BXP's share of straight-line rent and fair value lease revenue from unconsolidated JVs

4,816

1

19,116

Add:

Partners' share of straight-line rent and fair value of lease revenue from

(1,296) 2

15,538

consolidated JVs

BXP's Share of EBITDAre-cash

$

361,047

$ 1,597,004

601

1,048

58

2,161

1,234

-

3,972

2,489

3,951

(790)

6,793

7,156

-

-

-

-

-

-

40,117

35,361

32,911

29,183

28,099

45,155

-

-

-

-

-

-

4

277

25

17

2,167

737

-

71,866

75,801

64,120

115,896

111,325

93,820

13,447

13,410

10,835

2,588

1,881

24,865

4

13,702

9,169

14,343

25,866

21,105

10,365

$1,461,828

$1,382,462

$1,392,959

$1,280,243

$1,297,693

$1,276,568

1See "Joint Ventures-Unconsolidated" in this Appendix.

2See "Joint Ventures-Consolidated" in this Appendix.

3Lease transaction costs are generally included in second generation tenant improvements and leasing commissions in the period in which the lease commences.

4Excludes the straight-line impact of approximately $(36.9) million and $(14.7) million for Straight-line rent and fair value lease revenue and Partners' share of straight-line rent and fair value of lease revenue from consolidated JVs, respectively, in connection with the deferred revenue received from a tenant. The tenant paid for improvements to a long-lived asset of the Company resulting in deferred revenue for the period until the asset was substantially complete, which occurred in the third quarter of 2019.

50

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

Fixed Charge Coverage Ratio (dollars in thousands)

Quarter Ended

Year Ended December 31,

June 30, 2020

2019

2018

2017

2016

2015

2014

Fixed Charges

Interest expense

$

107,142

$

412,717

$

378,168

$

374,481

$

412,849

$

432,196

$

455,743

Partners' share of interest expense from consolidated JVs

(10,738) 1

(42,896)

(44,321)

(57,100)

(69,204)

(89,580)

(78,753)

BXP's share of interest expense from unconsolidated JVs

10,909

2

40,584

33,036

19,638

15,704

16,538

13,056

Capitalized interest

13,717

54,911

65,766

61,070

39,816

34,213

52,476

Partners' share of capitalized interest from consolidated JVs

(1,296) 1

(5,626)

(4,505)

(1,700)

(224)

-

-

BXP's share of capitalized interest from unconsolidated JVs

1,284

2

9,808

3,445

104

-

408

311

Fair value interest adjustment and hedge amortization

(1,590)

(6,316)

(6,316)

14,434

44,116

52,407

51,201

Partners' share of fair value interest adjustment and hedge amortization from

144

1

576

576

(7,803)

(18,218)

(20,100)

(20,557)

consolidated JVs

Amortization of financing costs

(3,428)

1

(12,879)

(12,281)

(10,587)

(7,386)

(7,539)

(7,754)

Partners' share of amortization of financing costs from consolidated JVs

382

1,528

1,528

979

153

260

194

BXP's share of amortization of financing costs from unconsolidated JVs

(538) 2

(967)

(544)

(432)

(445)

(425)

(317)

Maintenance capital expenditures3

15,461

98,994

75,306

48,573

59,838

56,383

45,619

Partners' share of maintenance capital expenditures from consolidated JVs3

(91)

(2,879)

(3,028)

(5,611)

(2,569)

(5,565)

(4,378)

BXP's share of maintenance capital expenditures from unconsolidated JVs3

876

2,685

2,089

582

1,029

1,653

1,369

Hotel improvements, equipment upgrades and replacements

36

2,403

2,102

9,647

6,801

2,430

2,894

Preferred dividends/distributions

2,625

10,500

10,500

10,500

10,500

10,500

10,500

Total Fixed Charges (A)

$

134,895

$

563,143

$

501,521

$

456,775

$

492,760

$

483,779

$

521,604

BXP's Share of EBITDAre-cash4 (B)

361,047

1,597,004

1,461,828

1,382,462

1,392,959

1,280,243

1,297,693

Fixed Charge Coverage Ratio (B ÷ A)

2.68

2.84

2.91

3.03

2.83

2.65

2.49

1See "Joint Ventures-Consolidated" in this Appendix.

2See "Joint Ventures-Unconsolidated" in this Appendix.

3Maintenance capital expenditures do not include planned capital expenditures related to acquisitions and repositioning capital expenditures. 4See reconciliations on previous page of this Appendix.

51

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

FFO, FAD, and FAD Payout Ratios (dollars in thousands)

Quarter Ended

Year Ended December 31,

June 30, 2020

June 30, 2019

2019

2018

2017

2016

2015

2014

Net income attributable to Boston Properties, Inc. common shareholders

$

266,525

$

164,318

$ 511,034

$

572,347

$

451,939

$

502,285

$

572,606

$

433,111

Add:

Preferred dividends

2,625

2,625

10,500

10,500

10,500

10,500

10,500

10,500

Noncontrolling interest - common units of the Operating Partnership

30,197

19,036

59,345

66,807

52,210

59,260

66,951

50,862

Noncontrolling interest - redeemable preferred units of the Operating

-

-

-

-

-

-

6

1,023

Partnership

Noncontrolling interests in property partnerships

(767)

17,482

71,120

62,909

47,832

(2,068)

149,855

30,561

Net income

298,580

203,461

651,999

712,563

562,481

569,977

799,918

526,057

Add:

Depreciation and amortization expense

178,188

177,411

677,764

645,649

617,547

694,403

639,542

628,573

Noncontrolling interests in property partnerships' share of depreciation and

(22,480)

1

(17,869)

(71,389)

(73,880)

(78,190)

(107,087)

(90,832)

(63,303)

amortization

BXP's share of depreciation and amortization from unconsolidated joint

21,012

2

14,778

58,451

54,352

34,262

26,934

6,556

19,251

ventures

Corporate-related depreciation and amortization

(486)

(412)

(1,695)

(1,634)

(1,986)

(1,568)

(1,503)

(1,361)

Impairment losses

-

-

24,038

11,812

-

-

-

-

Less:

Gain on sale of investment in unconsolidated joint venture

-

-

-

-

-

59,370

-

-

Gain on sale of real estate included within income (loss) from

5,946

47,757

47,238

8,270

-

-

-

-

unconsolidated joint ventures

Gains (losses) on sales of real estate

203,767

1,686

709

182,356

7,663

80,606

375,895

168,039

Noncontrolling interests in property partnerships 3

(767)

17,482

71,120

62,909

47,832

(2,068)

48,737

30,561

Noncontrolling interest - redeemable preferred units of the Operating

-

-

-

-

-

-

6

1,023

Partnership

Preferred dividends

2,625

2,625

10,500

10,500

10,500

10,500

10,500

10,500

FFO attributable to the Operating Partnership common unitholders (including

263,243

307,819

1,209,601

1,084,827

1,068,119

1,034,251

918,543

899,094

Boston Properties, Inc.) ("Basic FFO") 4

Less:

Noncontrolling interest - common units of the Operating Partnership's share

26,335

31,544

123,757

110,338

108,707

106,504

94,828

91,588

of FFO

FFO attributable to Boston Properties, Inc. common shareholders

$

236,908

$

276,275

$ 1,085,844

$ 974,489

$ 959,412

$ 927,747

$ 823,715

$ 807,506

1See "Joint Ventures-Consolidated" in this Appendix.

2See "Joint Ventures-Unconsolidated" in this Appendix.

3For the year ended December 31, 2015, excludes the noncontrolling interests in property partnerships' share of a gain on sale of real estate totaling approximately $101.1 million.

4The FFO attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) ("Basic FFO") for the quarter ended June 30, 2020 is $44,576 less than Q2 2019. Included in the Q2 2020 amounts are BXP's Share of: $26,325 of write-offs associated with accrued rent (included within straight-line rent), $14,707 of write-offs associated with accounts receivable, a $13,352 decrease in parking and other revenue and a $7,638 decrease in NOI due to the closure of our only hotel. These items decreased Q2 2020 Basic FFO by $62,022.

52

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

FFO, FAD, and FAD Payout Ratios (continued from previous page) (dollars in thousands)

Quarter Ended

Year Ended December 31,

Funds Available for Distribution

June 30,

June 30,

2019

2018

2017

2016

2015

2014

2020

2019

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

$263,243

$307,819

$1,209,601

$1,084,827

$1,068,119

$1,034,251

$ 918,543

$899,094

FFO")

Straight-line rent

(17,024)

1

(17,017)

(63,157)

(48,055)

(53,511)

(33,739)

(79,998)

(63,060)

Partners' share of straight-line rent from consolidated JVs

(1,592)

1,845

(5,115)

6,212

2,597

4,224

14,702

9,261

2

BXP's share of straight-line rent from unconsolidated JVs

(4,131)

(3,481)

(15,233)

(10,713)

(11,553)

(9,832)

(2,671)

(1,933)

Lease transaction costs that qualify as rent inducements3

1,616

1,438

6,627

8,692

920

8,853

12,667

9,006

Partners' share of lease transaction costs that qualify as rent inducements from consolidated JVs3

(120)

1

-

(449)

(277)

(25)

(17)

(2,167)

(737)

BXP's share of lease transaction costs that qualify as rent inducements from unconsolidated JVs3

(187)

2

149

7,905

601

1,048

58

2,161

1,234

Fair value lease revenue4

(2,159)

(6,012)

(20,186)

(23,811)

(22,290)

(30,381)

(35,898)

(48,265)

Partners' share of fair value lease revenue from consolidated JVs4

296

1

1,864

5,883

7,490

6,572

10,119

11,164

11,844

BXP's share of fair value lease revenue from unconsolidated JVs4

(685)

2

(976)

(3,883)

(2,734)

(1,857)

(1,003)

83

52

Non-cash losses (gains) from early extinguishments of debt

-

-

-

-

(14,444)

371

(3,604)

96

Partners' share of non-cash losses (gains) from early extinguishments of debt from consolidated JVs

-

-

-

-

5,878

-

-

-

Non-cash termination income adjustment (fair value lease amounts)

-

-

-

-

(1,171)

177

(5,360)

-

Partner's share of non-cash termination income adjustment (fair value lease amounts) from consolidated JVs

-

-

-

-

468

(44)

2,191

-

BXP's share of non-cash termination income adjustment (fair value lease amounts) from unconsolidated JVs

-

-

-

-

(214)

-

-

-

Straight-line ground rent expense adjustment5

951

1

1,019

4,029

3,972

2,489

3,951

(790)

6,793

BXP's share of straight-line ground rent expense adjustment from unconsolidated JVs

41

-

40

-

-

-

-

-

Stock-based compensation

10,374

10,394

40,958

40,117

35,361

32,911

29,183

28,099

Non-real estate depreciation

486

412

1,695

1,634

1,986

1,568

1,503

1,361

Impairment losses

-

-

-

-

-

1,783

-

-

Fair value interest adjustment and hedge amortization

1,590

1

1,579

6,316

6,316

(14,434)

(44,116)

(52,407)

(51,201)

Partners' share of fair value interest adjustment and hedge amortization from consolidated JVs

(144)

(144)

(576)

(576)

7,803

18,218

20,100

20,557

ASC 470-20 interest expense adjustment

-

-

-

-

-

-

-

2,438

Second generation tenant improvements and leasing commissions

(124,588)

(52,196)

(392,717)

(256,610)

(270,738)

(278,269)

(192,419)

(108,469)

Partners' share of second generation tenant improvements and leasing commissions from consolidated JVs

43,777

4,558

82,702

16,446

7,752

5,026

3,725

7,327

BXP's share of second generation tenant improvements and leasing commissions from unconsolidated JVs

(2,213)

1

(4,184)

(6,990)

(14,481)

(5,343)

(14,875)

(14,400)

(4,508)

Unearned portion of capitalized fees from consolidated joint ventures

411

4,092

6,925

7,528

9,765

5,925

7,647

12,358

Maintenance capital expenditures6

(15,461)

(27,520)

(98,994)

(75,306)

(48,573)

(59,838)

(56,383)

(45,619)

Partners' share of maintenance capital expenditures from consolidated JVs6

91

1,144

2,879

3,028

5,611

2,569

5,565

4,378

BXP's share of maintenance capital expenditures from unconsolidated JVs6

(876)

(640)

(2,685)

(2,089)

(582)

(1,029)

(1,653)

(1,369)

Hotel improvements, equipment upgrades and replacements

(36)

8

(424)

(2,403)

(2,102)

(9,647)

(6,801)

(2,430)

(2,894)

Funds available for distribution to common shareholders and common unitholders (FAD) (A)

$153,660

$223,719

$ 763,172

$ 750,109

$ 701,987

$ 650,060

$ 579,054

$685,843

Annualized FAD (A x 4)7

$614,640

Distributions to common shareholders and unitholders (excluding any special distributions) (B)

169,701

164,041

661,393

603,202

524,810

464,114

446,155

444,181

FAD Payout Ratio (B ÷ A)

110.44 %

73.32 %

86.66 %

80.42 %

74.76 %

71.40 %

77.05 %

64.76 %

1See "Joint Ventures-Consolidated" in this Appendix.

2See "Joint Ventures-Unconsolidated" in this Appendix.

3Lease transaction costs are generally included in second generation tenant improvements and leasing commissions in the period in which the lease commences.

4Represents the net adjustment for above- and below-market leases that are being amortized over the terms of the respective leases in-place at the property acquisition dates.

5For the quarter ended June 30, 2020 and the years ended December 31, 2019, 2018, 2017, 2016 and 2015, includes the straight-line impact of the Company's 99-year ground and air rights lease related to the 100 Clarendon Street garage and Back Bay Transit Station. The Company has allocated contractual ground lease payments aggregating approximately $34.4 million, which it expects to by the end of 2023 with no payments thereafter. The Company is recognizing these amounts on a straight-line basis over the 99-year term of the ground and air rights lease.

6Maintenance capital expenditures do not include planned capital expenditures related to acquisitions and repositioning capital expenditures.

7Annualized FAD is calculated as the product of such amount for the quarter multiplied by (4).

8The FAD is $70,059 less than Q2 2019. Included in the Q2 2020 amounts are BXP's Share of: $14,707 of write-offs associated with accounts receivable, a $16,551 decrease in lease revenue, primarily related to COVID-19 cash rent abatements and deferrals, a $13,352 decrease in parking and other revenue and a $7,638 decrease in NOI due to the closure of our only hotel. These items decreased Q2 2020 FAD by $52,248.

53

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

FFO per share

Percentage

Percentage

Percentage

Growth in FFO Per Share (Diluted)

2019

2018

Increase/

2018

2017

Increase/

2017

2016

Increase/

(Decrease)

(Decrease)

(Decrease)

Earnings per share (diluted)

$ 3.30

$ 3.75

(12.0)%

$ 3.75

$ 2.93

28.0 %

$ 2.93

$ 3.26

(10.1)%

Add:

Company's share of real estate depreciation and amortization

3.85

3.61

3.61

3.33

3.33

3.59

Impairment loss

0.14

-

-

-

-

-

Company's share of (gains) losses on sales of real estate

(0.28)

-

-

-

-

-

Less:

Gain on sale of investment in unconsolidated joint venture

-

-

-

-

-

0.35

Gains on sales of real estate

-

1.06

1.06

0.04

0.04

0.47

FFO per share (diluted)

7.01

6.30

11.3 %

6.30

6.22

1.3 %

6.22

6.03

3.2 %

54

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

Joint Ventures ("JVs") - Consolidated (unaudited and in thousands)

Results of Operations for the three months ended June 30, 2020

Norges Joint Ventures

Times Square Tower

601 Lexington Avenue /

One Five Nine East 53rd Street

767 Fifth Avenue

100 Federal Street

Total Consolidated

(The GM Building)

Atlantic Wharf Office

Joint Ventures

Revenue

Lease 2

$

58,267

$

92,700

$

150,967

Write-offs associated with accounts receivable

(1,652)

(8,060)

(9,712)

Straight-line rent

15,617

5,432

21,049

Write-offs associated with straight-line rent

(1,357)

(21,644)

(23,001)

Fair value lease revenue

618

109

727

Termination income

1

714

715

Total lease revenue

71,494

69,251

140,745

Parking and other

-

903

903

Total rental revenue

71,494

70,154

141,648

Expenses

Operating

28,044

33,329

61,373

Net Operating Income (NOI)

43,450

36,825

80,275

Other income (expense)

Development and management services revenue

-

2

2

Interest and other income

55

304

359

Interest expense

(21,175)

(5,049)

(26,224)

Depreciation and amortization expense

(18,749)

(28,908)

(47,657)

General and administrative expense

(17)

(24)

(41)

Total other income (expense)

(39,886)

(33,675)

(73,561)

Net income

$

3,564

$

3,150

$

6,714

.

BXP's nominal ownership percentage

60.00%

55.00%

Partners' share of NOI (after income allocation to private REIT shareholders)2

$

16,719

$

15,708

$

32,427

BXP's share of NOI (after income allocation to private REIT shareholders)

$

26,731

$

21,117

$

47,848

Unearned portion of capitalized fees3

$

33

$

378

$

411

Partners' share of select items2

Partners' share of write-offs associated with accounts receivable

$

661

$

3,627

$

4,288

Partners' share of write-offs associated with straight-line rent

$

543

$

9,740

$

10,283

Partners' share of parking and other revenue

$

-

$

406

$

406

Partners' share of hedge amortization

$

144

$

-

$

144

Partners' share of amortization of financing costs

$

346

$

36

$

382

Partners' share of depreciation and amortization related to capitalized fees

$

344

$

1,865

$

2,209

Partners' share of capitalized interest

$

-

$

1,296

$

1,296

Partners' share of lease transaction costs that qualify as rent inducements

$

120

$

-

$

120

Partners' share of management and other fees

$

661

$

884

$

1,545

Partners' share of basis differential and other adjustments

$

(17)

$

(123)

$

(140)

55

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

Joint Ventures ("JVs") - Consolidated (continued) (unaudited and in thousands)

Results of Operations for the three months ended June 30, 2020

Norges Joint Ventures

Times Square Tower

601 Lexington Avenue /

One Five Nine East 53rd Street

767 Fifth Avenue

100 Federal Street

Total Consolidated

Reconciliation of Partners' share of EBITDAre

(The GM Building)

Atlantic Wharf Office

Joint Ventures

Partners' NCI4

$

441

$

(1,208)

$

(767)

Add:

Partners' share of interest expense2

8,466

2,272

10,738

Partners' share of depreciation and amortization expense after BXP's basis differential1

7,826

14,654

22,480

Partners' share of EBITDAre

$

16,733

$

15,718

$

32,451

Reconciliation of Partners' share of NOI2

Rental revenue

$

28,598

$

31,569

$

60,167

Less: Termination income

-

321

321

Rental revenue (excluding termination income)

28,598

31,248

59,846

Less: Operating expenses (including partners' share of management and other fees)

11,879

15,882

27,761

Income allocation to private REIT shareholders

-

(21)

(21)

NOI (excluding termination income and after income allocation to private REIT shareholders)

$

16,719

$

15,387

$

32,106

Rental revenue (excluding termination income)

$

28,598

$

31,248

$

59,846

Less: Straight-line rent

5,704

(7,296)

(1,592)

Fair value lease revenue

247

49

296

Add: Lease transaction costs that qualify as rent inducements

120

-

120

Subtotal

$

22,767

$

38,495

$

61,262

Less: Operating expenses (including partners' share of management and other fees)

11,879

15,882

27,761

Income allocation to private REIT shareholders

-

(21)

(21)

NOI - cash (excluding termination income and after income allocation to private REIT shareholders)

$

10,888

$

22,634

$

33,522

Reconciliation of Partners' share of Revenue2

Rental revenue

$

28,598

$

31,569

$

60,167

Add: Development and management services revenue

-

1

1

Revenue

$

28,598

$

31,570

$

60,168

56

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

Joint Ventures ("JVs") - Consolidated (continued) (unaudited and in thousands)

Year Ended December 31,

Selected Financial Data5

2019

2018

2017

2016

2015

2014

2013

Interest expense

$

104,492

$

107,612

$

119,229

$

128,997

$

143,691

$

121,001

$

72,640

Fair value interest adjustment

$

-

$

-

$

20,227

$

45,545

$

49,370

$

49,766

$

27,936

Gain from early extinguishment of debt

$

-

$

-

$

14,606

$

-

$

-

$

-

$

-

Gain on sale of real estate

$

-

$

-

$

-

$

-

$

199,479

$

-

$

-

Reconciliation of Partners' share of depreciation and amortization expense

Depreciation and amortization expense

$

175,269

$

184,985

$

185,632

$

250,803

$

227,226

$

173,954

$

102,283

Less:

BXP's basis difference

1,254

1,571

351

318

200

141

516

Depreciation and amortization after BXP's basis

$

174,015

$

183,414

$

185,281

$

250,485

$

227,026

$

173,813

$

101,767

Partners' share of depreciation and amortization expense2

$

71,389

$

73,880

$

78,190

$

107,087

$

90,832

$

63,303

$

32,583

Reconciliation of Partners' share of EBITDAre

Partners' NCI

$

71,120

$

62,909

$

47,832

$

(2,068)

$

149,855

$

30,561

$

1,347

Add:

Partners' share of interest expense2, 6

42,896

44,321

41,103

35,029

38,726

17,733

14,081

Partners' share of interest expense - outside members' notes

-

-

16,256

34,322

30,793

28,278

16,044

Partners' share of depreciation and amortization expense2

71,389

73,880

78,190

107,087

90,832

63,303

32,583

Less:

Partners' share of gain from early extinguishment of debt2

-

-

5,842

-

-

-

-

Partners' share of gain on sale of real estate2

-

-

-

-

101,118

-

-

Partners' share of EBITDAre

$

185,405

$

181,110

$

177,539

$

174,370

$

209,088

$

139,875

$

64,055

1Lease revenue includes recoveries from tenants and service income from tenants.

2Amounts represent the partners' share based on their respective ownership percentage.

3Capitalized fees are eliminated in consolidation and recognized over the life of the asset as depreciation and amortization are added back to the Company's net income.

4Amounts represent the partners' share based on their respective ownership percentage and is adjusted for basis differentials and the allocations of management and other fees and depreciation and amortization related to capitalized fees.

5Amounts represent 100% of consolidated joint venture activities.

6Amounts include fair value interest adjustment.

57

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

Joint Ventures ("JVs") - Unconsolidated (unaudited and in thousands)

Results of Operations for the three months ended June 30, 2020

500 North

Santa

Total

Market

Metropolitan

901 New

Annapolis

Colorado

Monica

The Hub on

Gateway

Other Joint

Capitol

Business

Unconsolidated

Revenue

Square North

Square

York Avenue

Junction 1

Street, N.W.

Center

Park

Causeway

Commons

Ventures 2

Joint Ventures

Lease 3

$

5,627

$

4,210

$

5,961

$

1,947

$

4,352

$

19,740

$

14,910

$

8,005

$

11,706

$

1,136

$

77,594

Write-offs associated with accounts

(169)

-

(124)

-

(2)

-

(833)

(730)

-

-

(1,858)

receivable

Straight-line rent

1

2,147

558

42

(43)

(126)

1,657

1,624

381

3,648

9,889

Write-offs associated with straight-line rent

7

-

(435)

-

(113)

-

(123)

(696)

-

-

(1,360)

Fair value lease revenue

-

-

-

-

-

9

805

-

120

-

934

Termination income

-

-

-

-

-

-

-

-

-

-

-

Total lease revenue

5,466

6,357

5,960

1,989

4,194

19,623

16,416

8,203

12,207

4,784

85,199

Parking and other

209

146

204

-

17

1,706

1,329

143

1

533

4,288

Total rental revenue

5,675

6,503

6,164

1,989

4,211

21,329

17,745

8,346

12,208

5,317

89,487

Expenses

4

Operating

2,309

3,019

3,012

817

1,703

5,373

6,517

4,079

4,126

2,530

33,485

Net Operating Income

3,366

3,484

3,152

1,172

2,508

15,956

11,228

4,267

8,082

2,787

56,002

Other income/(expense)

Development and management services

3

-

-

6

-

-

-

-

-

-

9

income

Interest and other income

8

-

(8)

8

3

20

-

9

-

27

67

Interest expense

(1,416)

(2,901)

(2,063)

(370)

(1,116)

(4,979)

(6,962)

(2,357)

-

(1,142)

(23,306)

Depreciation and amortization expense

(1,179)

(2,798)

(1,456)

(662)

(872)

(5,625)

(8,762)

(4,763)

(8,405)

(2,868)

(37,390)

General and administrative expense

-

(21)

(14)

-

-

(8)

(165)

-

(1)

(10)

(219)

Gain on sale of real estate

-

-

-

11,530

-

-

-

-

-

190

11,720

Total other income/(expense)

(2,584)

(5,720)

(3,541)

10,512

(1,985)

(10,592)

(15,889)

(7,111)

(8,406)

(3,803)

(49,119)

Net income/(loss)

$

782

$

(2,236)

$

(389)

$

11,684

$

523

$

5,364

$

(4,661)

$

(2,844)

$

(324)

$

(1,016)

$

6,883

BXP's economic ownership percentage

50 %

20 %

50 %

50 %

30 %

50 %

55 %

50 %

55 %

BXP's share of select items

BXP's share of write-offs associated with

$

85

$

-

$

62

$

-

$

1

$

-

$

458

$

365

$

-

$

-

$

971

accounts receivable

BXP's share of write-offs associated with

$

(4)

$

-

$

218

$

-

$

34

$

-

$

68

$

348

$

-

$

-

$

664

straight-line rents

BXP's share of parking and other revenue

$

105

$

29

$

102

5

$

-

$

5

$

853

$

731

$

72

$

1

$

186

$

2,084

BXP's share of amortization of financing costs

$

10

$

63

$

22

$

22

$

4

$

13

$

72

$

180

$

-

$

152

$

538

BXP's share of capitalized interest

$

-

$

5

$

-

5

$

-

$

-

$

-

$

-

$

431

$

-

$

848

$

1,284

Reconciliation of BXP's share of EBITDAre

5

Income/(loss) from unconsolidated joint ventures

$

345

$

(445)

$

(125)

$

5,906

$

159

$

1,660

$

(2,559)

$

(1,319)

$

(1,446)

$

(344)

$

1,832

Add:

5

BXP's share of interest expense

708

580

1,032

185

335

2,490

3,829

1,179

-

571

10,909

BXP's share of depreciation and amortization

5

6

expense

635

556

654

335

259

4,706

4,811

2,279

5,556

1,221

21,012

Less:

BXP's share of gain on sale of real estate

-

-

-

5

5,833

-

-

-

-

-

113

5,946

BXP's share of EBITDAre

$

1,688

$

691

$

1,561

5

$

593

$

753

$

8,856

$

6,081

$

2,139

$

4,110

$

1,335

$

27,807

58

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

Joint Ventures ("JVs") - Unconsolidated (unaudited and in thousands)

Results of Operations for the three months ended June 30, 2020

Santa

Total

Reconciliation of BXP's share of Net Operating Income/

Market

Metropolitan

901 New

Annapolis

Colorado

Monica

The Hub on

Gateway

Other Joint

Dock 72

Business

Unconsolidated

(Loss)

Square North

Square

York Avenue

Junction1

Center

Park

Causeway

Commons

Ventures2

Joint Ventures

BXP's share of rental revenue

$

2,838

$

1,301

$

3,082

5

$

995

$

1,263

$

11,537

6

$

9,760

$

4,173

$

6,396

$

2,530

$

43,875

BXP's share of operating expenses

1,155

604

1,506

5

409

511

2,687

3,584

2,040

2,269

1,199

15,964

BXP's share of net operating income/(loss)

1,683

697

1,576

5

586

752

8,850

6

6,176

2,133

4,127

1,331

27,911

Less:

BXP's share of termination income

-

-

-

5

-

-

-

-

-

-

-

-

BXP's share of net operating income/(loss) (excluding

1,683

697

1,576

5

586

752

8,850

6

6,176

2,133

4,127

1,331

27,911

termination income)

Less:

BXP's share of straight-line rent

4

429

62

5

21

(47)

372

6

844

464

158

1,824

4,131

BXP's share of fair value lease revenue

-

-

-

5

-

-

442

6

443

-

(200)

-

685

Add:

BXP's share of straight-line ground rent adjustment

-

-

-

5

-

-

-

-

-

-

41

41

BXP's share of lease transaction costs that qualify as

-

86

2

5

-

-

-

52

-

(327)

-

(187)

rent inducements

BXP's share of net operating income/(loss) - cash

$

1,679

$

354

$

1,516

5

$

565

$

799

$

8,036

6

$

4,941

$

1,669

$

3,842

$

(452)

$

22,949

(excluding termination income)

Reconciliation of BXP's share of Revenue

BXP's share of rental revenue

$

2,838

$

1,301

$

3,082

5

$

995

$

1,263

$

11,537

6

$

9,760

$

4,173

$

6,396

$

2,530

$

43,875

Add:

BXP's share of development and management

2

-

-

5

3

-

-

-

-

-

-

5

services revenue

BXP's share of revenue

$

2,840

$

1,301

$

3,082

5

$

998

$

1,263

$

11,537

6

$

9,760

$

4,173

$

6,396

$

2,530

$

43,880

  1. Annapolis Junction includes three in-service properties and two undeveloped land parcels
  2. Includes 1001 6th Street, Dock 72, 7750 Wisconsin Avenue, 1265 Main Street, Wisconsin Place Parking Facility, 3 Hudson Boulevard, 540 Madison Avenue and Platform 16.
  3. Lease revenue includes recoveries from tenants and service income from tenants.
  4. Includes approximately $80 of straight-line ground rent expense.
  5. Reflects the allocation percentages pursuant to the achievement of specified investment return thresholds as provided for in the joint venture agreement.
  6. The Company's purchase price allocation under ASC 805 for Colorado Center differs from the historical basis of the venture resulting in the majority of the basis differential for this venture.

59

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

Joint Ventures ("JVs") - Unconsolidated (continued) (unaudited and in thousands)

Year Ended December 31,

2019

2018

2017

2016

2015

2014

2013

Selected Financial Data1

Interest expense

$

84,405

$

71,309

$

46,371

$

34,016

$

32,176

$

31,896

$

112,535

Depreciation and amortization expense2

$

102,294

$

103,075

$

57,079

$

44,989

$

36,057

$

37,041

$

86,088

Losses from early extinguishment of debt

$

-

$

-

$

-

$

-

$

-

$

-

$

1,677

Gain on sale of real estate

$

-

$

16,959

$

-

$

-

$

-

$

-

$

-

Gains on sales of real estate

$

33,707

$

-

$

-

$

-

$

-

$

-

$

14,207

Reconciliation of BXP's share of EBITDAre3

Income from unconsolidated joint ventures

$

46,592

$

2,222

$

11,232

$

8,074

$

22,770

$

12,769

$

75,074

Add:

BXP's share of interest expense

40,584

33,036

19,638

15,704

16,538

13,056

61,259

BXP's share of depreciation and amortization expense

58,451

54,352

34,262

26,934

6,556

19,251

46,214

Losses from early extinguishment of debt

-

-

-

-

-

-

623

Less:

BXP's share of gain on sale of real estate

-

8,270

-

-

-

-

-

Gains on sales of real estate

47,238

-

-

-

-

-

54,501

BXP's share of EBITDAre

$

98,389

$

81,340

$

65,132

$

50,712

$

45,864

$

45,076

$

128,669

1Amount represents 100% of unconsolidated joint venture activities.

2In 2018, the joint venture that owns Metropolitan Square, which the Company has a 20% ownership interest, commenced a renovation project and recorded accelerated depreciation of approximately $22 million related to the remaining book value asset to be replaced.

3Amounts represent the Company's share based on its respective ownership percentage.

60

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

Net Operating Income (NOI) (in thousands)

Quarter ended

June 30, 2020

Net income attributable to Boston Properties, Inc. common shareholders

$

266,525

Preferred dividends

2,625

Net income attributable to Boston Properties, Inc.

269,150

Net income attributable to noncontrolling interests:

Noncontrolling interest - common units of the Operating Partnership

30,197

Noncontrolling interests in property partnerships

(767)

Net income

298,580

Add:

Interest expense

107,142

Loss from early extinguishment of debt

-

Depreciation and amortization expense

178,188

Transaction costs

332

Payroll and related costs from management services contracts

2,484

General and administrative expense

37,743

Less:

Interest and other income (loss)

1,305

Gains (losses) from investments in securities

4,552

Gains (losses) on sales of real estate

203,767

Income (loss) from unconsolidated joint ventures ("JVs")

1,832

Direct reimbursements of payroll and related costs from management services contracts

2,484

Development and management services revenue

8,125

Consolidated NOI

402,404

Add:

BXP's share of NOI from unconsolidated JVs1

27,911

Less:

Partners' share of NOI from consolidated JVs (after income allocation to private REIT shareholders)2

32,427

Termination income

3,309

BXP's share of termination income from unconsolidated JVs1

-

Add:

Partners' share of termination income from consolidated JVs2

321

BXP's Share of NOI (excluding termination income) (A)

$

394,900

1See "Joint Ventures-Unconsolidated" in this Appendix. Annualized amounts represent amounts for the quarter ended June 30, 2020, multiplied by four (4). 2See "Joint Ventures-Consolidated" in this Appendix. Annualized amounts represent amounts for the quarter ended June 30, 2020, multiplied by four (4).

61

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

BXP's Share of Same Property Net Operating Income-cash (excluding termination income) (in thousands)

Please see the following pages for complete reconciliations of BXP's Share of Same Property NOI-cash (excluding termination income) for each quarterly period presented over the past five years.

2019

2018

2017

31-Mar-19

31-Mar-18

Change ($)

Change (%)

31-Mar-18

31-Mar-17

Change ($)

Change (%)

31-Mar-17

31-Mar-16

Change ($)

Change (%)

Q1

$

368,940

$

337,759

31,181

9.2 %

$

335,553

$

338,860

(3,307)

(1.0)%

$ 328,368

$ 321,831

6,537

2.0 %

30-Jun-19

30-Jun-18

Change ($)

Change (%)

30-Jun-18

30-Jun-17

Change ($)

Change (%)

30-Jun-17

30-Jun-16

Change ($)

Change (%)

Q2

$

377,245

$

346,028

31,217

9.0 %

$

344,912

$

356,617

(11,705)

(3.3)%

$ 344,583

$ 335,171

9,412

2.8 %

30-Sep-19

30-Sep-18

Change ($)

Change (%)

30-Sep-18

30-Sep-17

Change ($)

Change (%)

30-Sep-17

30-Sep-16

Change ($)

Change (%)

Q3

$

372,475

$

354,093

18,382

5.2 %

$

355,058

$

346,325

8,733

2.5 %

$ 346,146

$ 336,885

9,261

2.7 %

31-Dec-19

31-Dec-18

Change ($)

Change (%)

31-Dec-18

31-Dec-17

Change ($)

Change (%)

31-Dec-17

31-Dec-16

Change ($)

Change (%)

Q4

$

373,088

$

373,613

(525)

(0.1)%

$

371,103

$

343,949

27,154

7.9 %

$ 342,461

$ 343,103

(642)

(0.2)%

Average Change (%)

5.8 %

1.5 %

1.9 %

2016

2015

31-Mar-16

31-Mar-15

Change ($)

Change (%)

31-Mar-15

31-Mar-14

Change ($)

Change (%)

Q1

$

322,168

$

301,136

21,032

7.0 %

$

318,345

$

314,478

3,867

1.2 %

30-Jun-16

30-Jun-15

Change ($)

Change (%)

30-Jun-15

30-Jun-14

Change ($)

Change (%)

Q2

$

334,902

$

319,807

15,095

4.7 %

$

331,214

$

327,992

3,222

1.0 %

30-Sep-16

30-Sep-15

Change ($)

Change (%)

30-Sep-15

30-Sep-14

Change ($)

Change (%)

Q3

$

322,185

$

318,833

3,352

1.1 %

$

327,493

$

329,953

(2,460)

(0.7)%

31-Dec-16

31-Dec-15

Change ($)

Change (%)

31-Dec-15

31-Dec-14

Change ($)

Change (%)

Q4

$

326,978

$

315,166

11,812

3.7 %

$

304,493

$

300,686

3,807

1.3 %

Average Change (%)

4.1 %

0.7 %

62

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

For the three months ended

For the three months ended

For the three months ended

For the three months ended

Net income (loss) attributable to Boston Properties, Inc. common shareholders

31-Dec-19

31-Dec-18

30-Sep-19

30-Sep-18

30-Jun-19

30-Jun-18

31-Mar-19

31-Mar-18

$

140,824

$

148,529

$

107,771

$

119,118

$

164,318

$

128,681

$

98,105

$

176,021

Preferred dividends

2,625

2,625

2,625

2,625

2,625

2,625

2,625

2,625

Net income (loss) attributable to Boston Properties, Inc.

143,449

151,154

110,396

121,743

166,943

131,306

100,730

178,646

Net income attributable to noncontrolling interests:

Noncontrolling interest - common units of the Operating Partnership

16,222

17,662

12,504

13,852

19,036

14,859

11,599

20,432

Noncontrolling interest in property partnerships

16,338

16,425

18,470

14,850

17,482

14,400

18,830

17,234

Net income

176,009

185,241

141,370

150,445

203,461

160,565

131,159

216,312

Add:

(Gains) losses from early extinguishments of debt

1,530

16,490

28,010

-

-

-

-

-

Interest expense

102,880

100,378

106,471

95,366

102,357

92,204

101,009

90,220

Depreciation and amortization expense

169,897

165,439

165,862

157,996

177,411

156,417

164,594

165,797

Impairment loss

-

11,812

-

-

24,038

-

Transaction costs

569

195

538

914

417

474

460

21

Payroll and related costs from management services contracts

2,159

2,219

2,429

2,516

2,403

1,970

3,395

2,885

General and administrative expense

32,797

27,683

31,147

29,677

35,071

28,468

41,762

35,894

Subtract:

(Gains) losses from investments in securities

(2,177)

3,319

(106)

(1,075)

(1,165)

(505)

(2,969)

126

Interest and other income

(4,393)

(3,774)

(7,178)

(2,822)

(3,615)

(2,579)

(3,753)

(1,648)

(Gains) losses on sales of real estate

57

(59,804)

15

(7,863)

(1,686)

(18,292)

905

(96,397)

(Income) loss from unconsolidated joint ventures

936

(5,305)

649

4,314

(47,964)

(769)

(213)

(461)

Direct reimbursements of payroll and related costs from management services contracts

(2,159)

(2,219)

(2,429)

(2,516)

(2,403)

(1,970)

(3,395)

(2,885)

Development and management services revenue

(10,473)

(12,195)

(10,303)

(15,254)

(9,986)

(9,305)

(9,277)

(8,405)

Net Operating Income ("NOI")

467,632

429,479

456,475

411,698

454,301

406,678

447,715

401,459

Subtract:

(20,123) 1

Straight-line rent

(40,460)

(1,830)

848

(17,017)

(19,972)

(22,483)

(27,101)

Fair value lease revenue

(2,965)

(6,076)

(4,961)

(6,053)

(6,012)

(6,092)

(6,248)

(5,590)

Termination income

(1,397)

(4,775)

(1,960)

(1,350)

(4,910)

(718)

(6,936)

(1,362)

Add:

Straight-line ground rent expense adjustment2

843

887

843

887

843

887

855

898

Lease transaction costs that qualify as rent inducements

2,170

3,989

2,140

3,866

1,438

521

879

316

NOI - cash

425,823

421,674

432,414

409,896

428,643

381,304

413,782

368,620

Subtract:

NOI - cash from non Same Properties (excluding termination income)

(31,389)

(24,316)

(31,571)

(26,007)

(22,843)

(8,703)

(18,783)

(6,026)

Same Property NOI - cash (excluding termination income)

394,434

397,358

400,843

383,889

405,800

372,601

394,999

362,594

Subtract:

(42,930) 1

Partners' share of NOI - cash from consolidated JVs (excluding termination income)

(41,197)

(43,416)

(43,922)

(41,862)

(38,408)

(42,802)

(38,108)

Add:

Partners' share of NOI - cash from non Same Properties from consolidated JVs (excluding

273

854

263

834

334

153

641

109

termination income)

BXP's share of NOI - cash from unconsolidated JVs (excluding termination income)

24,590

20,458

20,012

18,697

20,357

13,516

21,500

14,071

Subtract:

BXP's share of NOI - cash from non Same Properties from unconsolidated JVs

(5,012)

(1,641)

(5,713)

(5,405)

(7,384)

(1,834)

(5,398)

(907)

(excluding termination income)

1

BXP's Share of Same Property NOI - cash (excluding termination income)

$

373,088

$

373,613

$

372,475

$

354,093

$

377,245

$

346,028

$

368,940

$

337,759

63

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

For the three months ended

For the three months ended

For the three months ended

For the three months ended

Net income (loss) attributable to Boston Properties, Inc. common shareholders

31-Dec-18

31-Dec-17

30-Sep-18

30-Sep-17

30-Jun-18

30-Jun-17

31-Mar-18

31-Mar-17

$

148,529

$

103,829

$

119,118

$

117,337

$

128,681

$

133,709

$

176,021

$

97,083

Preferred dividends

2,625

2,625

2,625

2,625

2,625

2,625

2,625

2,625

Net income (loss) attributable to Boston Properties, Inc.

151,154

106,454

121,743

119,962

131,306

136,334

178,646

99,708

Net income attributable to noncontrolling interests:

Noncontrolling interest - common units of the Operating Partnership

17,662

11,884

13,852

13,402

14,859

15,473

20,432

11,432

Noncontrolling interest in property partnerships

16,425

13,865

14,850

14,340

14,400

15,203

17,234

4,424

Net income

185,241

132,203

150,445

147,704

160,565

167,010

216,312

115,564

Add:

(Gains) losses from early extinguishments of debt

16,490

13,858

-

-

-

(14,354)

-

-

Interest expense

100,378

91,772

95,366

92,032

92,204

95,143

90,220

95,534

Depreciation and amortization expense

165,439

154,259

157,996

152,164

156,417

151,919

165,797

159,205

Impairment loss

11,812

-

-

-

-

-

-

-

Transaction costs

195

96

914

239

474

299

21

34

Payroll and related costs from management services contracts

2,219

-

2,516

-

1,970

-

2,885

-

General and administrative expense

27,683

29,396

29,677

25,792

28,468

27,141

35,894

31,386

Subtract:

(Gains) losses from investments in securities

3,319

(962)

(1,075)

(944)

(505)

(730)

126

(1,042)

Interest and other income

(3,774)

(2,336)

(2,822)

(1,329)

(2,579)

(1,504)

(1,648)

(614)

Gains on sales of real estate

(59,804)

(872)

(7,863)

(2,891)

(18,292)

(3,767)

(96,397)

(133)

(Income) loss from unconsolidated joint ventures

(5,305)

(4,197)

4,313

(843)

(769)

(3,108)

(461)

(3,084)

Direct reimbursements of payroll and related costs from management services contracts

(2,219)

-

(2,516)

-

(1,970)

-

(2,885)

-

Development and management services revenue

(12,195)

(9,957)

(15,253)

(10,811)

(9,305)

(7,365)

(8,405)

(6,472)

Net Operating Income ("NOI")

429,479

403,260

411,698

401,113

406,678

410,684

401,459

390,378

Subtract:

Straight-line rent

(1,830)

(22,323)

848

(16,105)

(19,972)

(3,060)

(27,101)

(12,023)

Fair value lease revenue

(6,076)

(5,655)

(6,053)

(5,781)

(6,092)

(5,464)

(5,590)

(5,390)

Termination income

(4,775)

(756)

(1,350)

(4,783)

(718)

(13,601)

(1,362)

(3,918)

Add:

Straight-line ground rent expense adjustment2

887

929

887

929

887

929

898

941

Lease transaction costs that qualify as rent inducements

3,989

225

3,866

(102)

521

115

316

682

NOI - cash

421,674

375,680

409,896

375,271

381,304

389,603

368,620

370,670

Subtract:

NOI - cash from non Same Properties (excluding termination income)

(23,135)

(6,629)

(26,602)

(2,135)

(10,207)

105

(6,915)

(1,922)

Same Property NOI - cash (excluding termination income)

398,539

369,051

383,294

373,136

371,097

389,708

361,705

368,748

Subtract:

Partners' share of NOI - cash from consolidated JVs (excluding termination income)

(43,416)

(38,390)

(43,922)

(38,758)

(39,865)

(45,314)

(39,770)

(41,051)

Add:

Partners' share of NOI - cash from non Same Properties from consolidated JVs

(excluding termination income and after priority allocation and income allocation to

854

(6)

834

(596)

189

(882)

313

(279)

private REIT shareholders)

BXP's share of NOI - cash from unconsolidated JVs (excluding termination income)

20,458

13,346

18,697

12,543

13,516

13,105

14,071

11,442

Subtract:

BXP's share of NOI - cash from non Same Properties from unconsolidated JVs

(5,332)

(52)

(3,845)

-

(25)

-

(766)

-

(excluding termination income)

BXP's Share of Same Property NOI - cash (excluding termination income)

$

371,103

$

343,949

$

355,058

$

346,325

$

344,912

$

356,617

$

335,553

$

338,860

64

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

For the three months ended

For the three months ended

For the three months ended

For the three months ended

Net income (loss) attributable to Boston Properties, Inc. common shareholders

31-Dec-17

30-Dec-16

30-Sep-17

30-Sep-16

30-Jun-17

30-Jun-16

31-Mar-17

31-Mar-16

$

103,829

$

147,214

$

117,337

$

76,753

$

133,709

$

96,597

$

97,083

$

181,747

Preferred dividends

2,625

2,704

2,625

2,589

2,625

2,589

2,625

2,618

Net income (loss) attributable to Boston Properties, Inc.

106,454

149,918

119,962

79,342

136,334

99,186

99,708

184,365

Net income attributable to noncontrolling interests:

Noncontrolling interest - common units of the Operating Partnership

11,884

17,097

13,402

9,387

15,473

11,357

11,432

21,393

Noncontrolling interest in property partnerships

13,865

(2,121)

14,340

(17,225)

15,203

6,814

4,424

10,464

Net income

132,203

164,894

147,704

71,504

167,010

117,357

115,564

216,222

Add:

(Gains) losses from early extinguishments of debt

13,858

-

-

371

(14,354)

-

-

-

Losses from interest rate contracts

-

-

-

140

-

-

-

-

Interest expense

91,772

97,896

92,032

104,641

95,143

105,003

95,534

105,309

Depreciation and amortization expense

154,259

178,032

152,164

203,748

151,919

153,175

159,205

159,448

Impairment loss

-

-

-

1,783

-

-

-

-

Transaction costs

96

1,200

239

249

299

913

34

25

General and administrative expense

29,396

25,293

25,792

25,165

27,141

25,418

31,386

29,353

Subtract:

(Gains) losses from investments in securities

(962)

(560)

(944)

(976)

(730)

(478)

(1,042)

(259)

Interest and other income

(2,336)

(573)

(1,329)

(3,628)

(1,504)

(1,524)

(614)

(1,505)

Gains on sales of real estate

(872)

-

(2,891)

(12,983)

(3,767)

-

(133)

(67,623)

Gains on sale of investment in unconsolidated joint venture

-

(59,370)

-

-

-

-

-

-

(Income) loss from unconsolidated joint ventures

(4,197)

(2,585)

(843)

(1,464)

(3,108)

(2,234)

(3,084)

(1,791)

Development and management services revenue

(9,957)

(9,698)

(10,811)

(6,364)

(7,365)

(5,533)

(6,472)

(6,689)

Net Operating Income ("NOI")

403,260

394,529

401,113

382,186

410,684

392,097

390,378

432,490

Subtract:

Straight-line rent

(22,323)

(14,711)

(16,105)

(11,107)

(3,060)

6,503

(12,023)

(14,424)

Fair value lease revenue

(5,655)

(6,840)

(5,781)

(6,547)

(5,464)

(8,808)

(5,390)

(8,186)

Termination income

(756)

(504)

(4,783)

170

(13,601)

(7,654)

(3,918)

(51,306)

Add:

Straight-line ground rent expense adjustment2

929

971

929

971

929

971

941

982

Lease transaction costs that qualify as rent inducements

225

487

(102)

861

115

2,200

682

5,305

NOI - cash (excluding termination income)

375,680

373,932

375,271

366,534

389,603

385,309

370,670

364,861

Subtract:

NOI - cash from non Same Properties (excluding termination income)

(6,884)

(23)

(467)

532

(6,818)

(19,492)

(8,187)

(10,625)

Same Property NOI - cash (excluding termination income)

368,796

373,909

374,804

367,066

382,785

365,817

362,483

354,236

Subtract:

Partners' share of NOI - cash from consolidated JVs (excluding termination income)

(40,084)

(40,655)

(40,283)

(39,901)

(45,314)

(40,415)

(41,051)

(41,703)

Add:

Partners' share of NOI - cash from non Same Properties from consolidated JVs

(excluding termination income and after priority allocation and income allocation to

192

(600)

(589)

(231)

(882)

1,577

(279)

1,571

private REIT shareholders)

BXP's share of NOI - cash from unconsolidated JVs (excluding termination income)

13,557

10,602

12,708

10,647

13,182

8,881

11,537

9,109

Subtract:

BXP's share of NOI - cash from non Same Properties from unconsolidated JVs

-

(153)

(494)

(696)

(5,188)

(689)

(4,322)

(1,382)

(excluding termination income)

BXP's Share of Same Property NOI - cash (excluding termination income)

$

342,461

$

343,103

$

346,146

$

336,885

$

344,583

$

335,171

$

328,368

$

321,831

65

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED)

For the three months ended

For the three months ended

For the three months ended

For the three months ended

Net income (loss) attributable to Boston Properties, Inc. common shareholders

31-Dec-16

30-Dec-15

30-Sep-16

30-Sep-15

30-Jun-16

30-Jun-15

31-Mar-16

31-Mar-15

$

147,214

$

137,851

$

76,753

$

184,082

$

96,597

$

79,460

$

181,747

$

171,182

Preferred dividends

2,704

2,646

2,589

2,647

2,589

2,618

2,618

2,589

Net income (loss) attributable to Boston Properties, Inc.

149,918

140,497

79,342

186,729

99,186

82,078

184,365

173,771

Net income attributable to noncontrolling interests:

Noncontrolling interest - common units of the Operating Partnership

17,097

16,098

9,387

21,302

11,357