Boston Properties (BXP) 8-K Completion of Acquisition or Disposition of Assets

Exhibit 99.1

BOSTON PROPERTIES, INC.

PRO FORMA CONSOLIDATED BALANCE SHEET

INTRODUCTION TO THE PRO FORMA CONSOLIDATED BALANCE SHEET

March 31, 2006

(Unaudited)

The accompanying unaudited Pro Forma Consolidated Balance Sheet of Boston Properties, Inc. (the “Company”) is presented as if the disposition of 280 Park Avenue and related mortgage financing defeasance, which occurred subsequent to March 31, 2006, had been consummated on March 31, 2006. On June 6, 2006, the Company completed the sale of 280 Park Avenue, a Class A office property of approximately 1,179,000 net rentable square feet located in midtown Manhattan, for a gross sales price of approximately $1.2 billion. In conjunction with the sale, the Company has entered into a master lease agreement with the buyer. Under the master lease agreement, the Company has guaranteed that the buyer will receive at least a minimum amount of base rent from approximately 74,340 square feet of space during the ten-year period following the expiration of the current leases for this space. The current leases for this space are scheduled to expire at various times between June 2006 and October 2007. The aggregate amount of base rent guaranteed by the Company over the entire period from 2006 to 2017 is approximately $67.3 million. The Company’s guarantee obligations, which will be in the form of base rent payments to the buyer, will be reduced by the amount of base rent payable, whether or not actually paid, under qualifying leases for this space that are obtained by the Company from prospective tenants. The Company will remain responsible for any free rent periods. The buyer will bear all customary leasing costs for this space, including tenant improvements and leasing commissions. The Company has also agreed to provide to the buyer monthly revenue support from the closing date until December 31, 2008. The aggregate amount of the revenue support payments will be approximately $22.5 million.

Such pro forma information is based on the historical consolidated balance sheet of the Company as of that date, giving effect to the disposition of 280 Park Avenue and related mortgage financing defeasance. This Pro Forma Consolidated financial information should be read in conjunction with Form 10-Q for the three months ended March 31, 2006 (unaudited). In management’s opinion, all adjustments necessary to reflect the above transaction have been made.

The following Pro Forma Consolidated Balance Sheet is not necessarily indicative of what the actual financial position would have been assuming the disposition of 280 Park Avenue and related mortgage financing defeasance had been consummated on March 31, 2006 nor does it purport to represent the future financial position of the Company.

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BOSTON PROPERTIES, INC.

PRO FORMA CONSOLIDATED BALANCE SHEET

(Unaudited)

(in thousands, except for share and par value amounts)

	March 31, 2006			Disposition of 280 Park Avenue					Pro Forma
ASSETS
Real estate, at cost	$	8,864,907		$	(381,244	)	(A	)	$	8,483,663
Construction in process		107,051			—					107,051
Land held for future development		189,024			—					189,024
Less: accumulated depreciation		(1,320,712	)		60,999		(A	)		(1,259,713	)
Total real estate		7,840,270			(320,245	)				7,520,025
Cash and cash equivalents		32,214			869,754		(B	)		901,968
Cash held in escrows		23,715			(3,061	)	(C	)		20,654
Tenant and other receivables, net		41,458			(3,922	)	(C	)		37,536
Accrued rental income, net		316,048			(24,419	)	(C	)		291,629
Deferred charges, net		246,214			(14,228	)	(D	)		231,986
Prepaid expenses and other assets		91,646			(4,419	)	(C	)		87,227
Investments in unconsolidated joint ventures		98,836			—					98,836
Total assets	$	8,690,401		$	499,460				$	9,189,861
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Mortgage notes payable	$	3,185,550		$	(255,256	)	(E	)	$	2,930,294
Unsecured senior notes, net of discount		1,471,163			—					1,471,163
Unsecured line of credit		40,000			—					40,000
Accounts payable and accrued expenses		86,938			(1,254	)	(C	)		85,684
Dividends and distributions payable		95,344			—					95,344
Accrued interest payable		39,269			(1,626	)	(C	)		37,643
Other liabilities		98,296			101,706		(C	)		200,002
Total liabilities		5,016,560			(156,430	)				4,860,130
Commitments and contingencies		—			—					—
Minority interests		735,185			106,311		(F	)		841,496
Stockholders’ equity:
Excess stock, $.01 par value, 150,000,000 shares authorized, none issued or outstanding		—			—					—
Preferred stock, $.01 par value, 50,000,000 shares authorized, none issued or outstanding		—			—					—
Common stock, $.01 par value, 250,000,000 shares authorized, 112,892,557 issued and 112,813,657 outstanding		1,128			—					1,128
Additional paid-in capital		2,759,580			(7,807	)	(F	)		2,751,773
Earnings in excess of dividends		173,129			557,386		(F	)		730,515
Treasury common stock at cost, 78,900 shares		(2,722	)		—					(2,722	)
Accumulated other comprehensive income		7,541			—					7,541
Total stockholders’ equity		2,938,656			549,579					3,488,235
Total liabilities and stockholders’ equity	$	8,690,401		$	499,460				$	9,189,861

The accompanying notes are an integral part of these financial statements.

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BOSTON PROPERTIES, INC.

NOTES TO THE PRO FORMA

CONSOLIDATED BALANCE SHEET

March 31, 2006

(Unaudited)

(A) Represents the elimination of the net book value of 280 Park Avenue at March 31, 2006.

(B) Represents the estimated net cash proceeds from the sale of 280 Park Avenue.

(C) Represents the elimination of certain assets and liabilities of 280 Park Avenue as of March 31, 2006. Other liabilities consists of an approximately $67.3 million master lease obligation, an approximately $22.5 million revenue support obligation and approximately $16.6 million of deferred management fees, offset by the elimination of other liabilities as of March 31, 2006 of 280 Park Avenue.

(D) Represents the elimination of the net book value of deferred leasing and financing costs of 280 Park Avenue as of March 31, 2006.

(E) Represents the legal defeasance of the mortgage financing related to the disposition of 280 Park Avenue.

(F) Represents the net increase in Stockholders’ Equity and the rebalancing of Minority Interests as a result of the sale of 280 Park Avenue.

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BOSTON PROPERTIES, INC.

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended March 31, 2006 and the year ended December 31, 2005

(Unaudited)

The accompanying unaudited Pro Forma Consolidated Statements of Operations for the three months ended March 31, 2006 and for the year ended December 31, 2005 are presented as if the disposition on June 6, 2006 of 280 Park Avenue and related mortgage financing defeasance had occurred on January 1, 2005. Due to the Company’s continuing involvement through an agreement with the buyer to manage 280 Park Avenue for a fee after the sale, 280 Park Avenue will not be categorized as discontinued operations in the Company’s Consolidated Statements of Operations. An estimated nonrecurring gain on sale of real estate and loss on early extinguishment of debt of approximately $584.0 million (net of minority interest share of $110.8 million) and approximately $26.6 million (net of minority interest share of $5.0 million), respectively, have not been included in the Pro Forma Consolidated Statements of Operations but will be reflected in the Company’s consolidated statements of operations to be included in the Company’s Form 10-Q for the quarter ending June 30, 2006.

These Pro Forma Consolidated Statements of Operations should be read in conjunction with the historical consolidated financial statements and notes thereto of the Company reported on Form 10-K for the year ended December 31, 2005 and on Form 10-Q for the three months ended March 31, 2006.

The unaudited Pro Forma Consolidated financial information prepared by Boston Properties’ management is not necessarily indicative of what the actual results of operations would have been for the three months ended March 31, 2006 or for the year ended December 31, 2005 had the disposition of 280 Park Avenue and related mortgage financing defeasance actually occurred on January 1, 2005 and the effect thereof carried forward through the three month period ended March 31, 2006, nor do they purport to present the future results of operations of the Company.

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BOSTON PROPERTIES, INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

(in thousands, except for per share amounts)

		Three Months Ended March 31, 2006			Disposition of 280 Park Avenue			Pro Forma
Revenue
Rental:
Base rent		$	276,398		$	(15,527	)(A)	$	260,871
Recoveries from tenants	��		47,193			(3,289	)(A)		43,904
Parking and other			13,829			(22	)(A)		13,807
Total rental revenue			337,420			(18,838	)		318,582
Hotel revenue			12,343			—			12,343
Development and management services			4,376			—			4,376
Interest and other			1,965			(22	)(A)		1,943
Total revenue			356,104			(18,860	)		337,244
Expenses
Operating:
Rental			112,614			(8,384	)(A)		104,230
Hotel			11,477			—			11,477
General and administrative			14,642			—			14,642
Interest			74,817			(4,904	)(B)		69,913
Depreciation and amortization			66,847			(2,788	)(C)		64,059
Loss from early extinguishment of debt			467			—			467
Total expenses			280,864			(16,076	)		264,788
Income before minority interest in property partnership, income from unconsolidated joint ventures, minority interest in Operating Partnership and gain on sale of real estate			75,240			(2,784	)		72,456
Minority interest in property partnership			1,236			—			1,236
Income from unconsolidated joint ventures			1,290			—			1,290
Income before minority interest in Operating Partnership and gain on sale of real estate			77,766			(2,784	)		74,982
Minority interest in Operating Partnership			(15,470	)		444	(D)		(15,026	)
Income available to common shareholders before gain on sale of real estate		$	62,296		$	(2,340	)	$	59,956
Basic earnings per common share:
Income available to common shareholders before gain on sale of real estate		$	0.55					$	0.53
Weighted average number of common shares outstanding			112,509						112,509
Diluted earnings per common share:
Income available to common shareholders before gain on sale of real estate		$	0.54					$	0.52
Weighted average number of common and common equivalent shares outstanding			115,157						115,157

The accompanying notes are an integral part of these financial statements.

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BOSTON PROPERTIES, INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

(in thousands, except for per share amounts)

	Year Ended December 31, 2005			Disposition of 280 Park Avenue			Pro Forma
Revenue
Rental:
Base rent	$	1,110,212		$	(65,713	)(A)	$	1,044,499
Recoveries from tenants		173,254			(12,463	)(A)		160,791
Parking and other		55,567			(71	)(A)		55,496
Total rental revenue		1,339,033			(78,247	)		1,260,786
Hotel revenue		69,277			—			69,277
Development and management services		17,310			—			17,310
Interest and other		12,015			(28	)(A)		11,987
Total revenue		1,437,635			(78,275	)		1,359,360
Expenses
Operating
Rental		438,335			(32,419	)(A)		405,916
Hotel		51,689			—			51,689
General and administrative		55,471			—			55,471
Interest		308,091			(19,777	)(B)		288,314
Depreciation and amortization		266,829			(11,631	)(C)		255,198
Losses from early extinguishments of debt		12,896			—			12,896
Total expenses		1,133,311			(63,827	)		1,069,484
Income before minority interest in property partnership, income from unconsolidated joint ventures, minority interest in Operating Partnership, gains on sales of real estate, discontinued operations and cumulative effect of a change in accounting principle		304,324			(14,448	)		289,876
Minority interest in property partnership		6,017			—			6,017
Income from unconsolidated joint ventures		4,829			—			4,829
Income before minority interest in Operating Partnership, gains on sales of real estate, discontinued operations and cumulative effect of a change in accounting principle		315,170			(14,448	)		300,722
Minority interest in Operating Partnership		(74,103	)		2,349	(D)		(71,754	)
Income available to common shareholders before gains on sales of real estate, discontinued operations and cumulative effect of a change in accounting principle	$	241,067		$	(12,099	)	$	228,968
Basic earnings per common share:
Income available to common shareholders before gains on sales of real estate, discontinued operations and cumulative effect of a change in accounting principle	$	2.17					$	2.06
Weighted average number of common shares outstanding		111,274						111,274
Diluted earnings per common share:
Income available to common shareholders before gains on sales of real estate, discontinued operations and cumulative effect of a change in accounting principle	$	2.12					$	2.02
Weighted average number of common and common equivalent shares outstanding		113,559						113,559

The accompanying notes are an integral part of these financial statements.

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BOSTON PROPERTIES, INC.

NOTES TO THE PRO FORMA

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands)

The Pro Forma Consolidated Statements of Operations reflect the elimination of the historical results of operations of 280 Park Avenue for year ended December 31, 2005 and the three months ended March 31, 2006 (unaudited). Due to the Company’s continuing involvement through an agreement with the buyer to manage 280 Park Avenue for a fee after the sale, 280 Park Avenue will not be categorized as discontinued operations in the Company’s Consolidated Statements of Operations.

(A) Reflects the elimination of rental income and operating expenses of 280 Park Avenue.

(B) Reflects the decrease in interest expense as a result of the legal defeasance of the mortgage financing in conjunction with the disposition of 280 Park Avenue. The mortgage financing defeased in connection with the disposition of 280 Park Avenue consists of an approximately $255.3 million loan (balance at March 31, 2006) collateralized by 280 Park Avenue which bore interest at a fixed rate of 7.644% per annum.

(C) Reflects the decrease in depreciation and amortization expense related to the disposition of 280 Park Avenue.

(D) Reflects an adjustment for the minority interest in the Operating Partnership’s share of pro forma income before gains on sales of real estate, discontinued operations and the cumulative effect of a change in accounting principle.

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