Exhibit 99.1
BOSTON PROPERTIES, INC.
THIRD QUARTER 2001
FINANCIAL HIGHLIGHTS
(unaudited and in thousands)
THREE MONTHS ENDED
------------------------------------------------------------------------
SEPTEMBER 30, 2001 JUNE 30, 2001 MARCH 31, 2001 DECEMBER 31, 2000
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INCOME ITEMS:
Revenue (1) $ 277,159 $ 256,269 $ 233,456 $ 228,527
Net straight line rent $ 6,400 $ 6,487 $ 5,978 $ 2,608
Lease termination fees $ 4,857 $ 2,458 $ 1,163 $ 916
Capitalized interest $ 14,740 $ 15,800 $ 16,098 $ 12,812
Net Income available to common shareholders before
net derivative losses (SFAS No.133) $ 65,083 $ 52,887 $ 48,058 $ 43,235
Funds from Operations (FFO) before net derivative
losses (SFAS No.133) and early surrender income - basic $ 106,108 $ 100,124 $ 98,730 $ 93,158
Company's share $ 86,627 $ 81,410 $ 79,201 $ 71,888
FFO before net derivative losses (SFAS 133) and early
surrender lease income per share - basic $ 0.96 $ 0.90 $ 0.89 $ 0.89
FFO before net derivative losses (SFAS 133) and early
surrender lease income per share - diluted $ 0.91 $ 0.86 $ 0.85 $ 0.85
Dividends per share $ 0.58 $ 0.58 $ 0.53 $ 0.53
Funds available for distribution (FAD) (2) $ 73,157 $ 80,335 $ 78,835 $ 72,756
RATIOS:
Interest Coverage Ratio (excluding capitalized interest) 3.17 2.98 3.26 3.05
Interest Coverage Ratio (including capitalized interest) 2.53 2.32 2.43 2.43
FFO Payout Ratio 63.74% 67.44% 62.35% 62.35%
FAD Payout Ratio 88.01% 79.95% 74.36% 80.49%
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SEPTEMBER 30, 2001 JUNE 30, 2001 MARCH 31, 2001 DECEMBER 31, 2000
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CAPITALIZATION:
Total Debt $4,245,433 $4,177,670 $3,450,347 $3,414,891
Total Common Shares Outstanding @ Quarter End 90,720 90,351 89,701 86,630
Total Preferred Shares Outstanding @ Quarter End
(if converted) 2,625 2,625 2,625 2,625
Total Common Units Outstanding @ Quarter End 20,288 20,382 20,903 23,862
Total Preferred Units Outstanding @ Quarter End
(if converted) 11,011 11,011 11,011 11,021
Price @ Quarter End $ 38.1300 $ 40.9000 $ 38.4500 $ 43.5000
Equity Value @ Quarter End $4,752,676 $5,086,692 $4,777,028 $5,400,003
Total Market Capitalization $8,998,109 $9,264,362 $8,227,375 $8,814,894
Debt/Total Market Capitalization 47.18% 45.09% 41.94% 38.74%
(1) Includes non-cash early surrender income of $12,445.
(2) FAD is defined as FFO after adjustments for second generation lease
commissions and tenant improvements, recurring capital expenditures,
straight line rents, preferred dividends and distributions and nonrecurring
charges.
BOSTON PROPERTIES, INC.
THIRD QUARTER 2001
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
SEPTEMBER 30, 2001 JUNE 30, 2001 MARCH 31, 2001 DECEMBER 31, 2000
------------------ --------------- ------------- -------------
ASSETS (unaudited) (unaudited) (unaudited)
------
Real estate $ 6,147,265 $ 6,090,113 $ 5,280,149 $ 5,188,296
Development in progress 984,962 915,135 881,274 817,478
Land held for future development 165,753 160,729 123,232 107,005
Less accumulated depreciation (683,029) (647,881) (616,620) (586,719)
------------------ --------------- ------------- -------------
Total real estate 6,614,951 6,518,096 5,668,035 5,526,060
Cash and cash equivalents 161,011 165,764 241,819 280,957
Escrows 20,901 31,577 29,861 85,561
Investments in securities 4,297 4,297 6,060 7,012
Tenant and other receivables, net 41,087 26,337 24,443 26,852
Accrued rental income, net 110,441 104,304 97,657 91,684
Deferred charges, net 104,370 100,804 76,209 77,319
Prepaid expenses and other assets 46,303 47,962 73,539 41,154
Investments in unconsolidated joint ventures 90,160 94,155 92,456 89,871
------------------ --------------- ------------- -------------
TOTAL ASSETS $ 7,193,521 $ 7,093,296 $ 6,310,079 $ 6,226,470
================== =============== ============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes and bonds payable $ 4,245,433 $ 4,177,670 $ 3,450,347 $ 3,414,891
Unsecured Line of Credit - - - -
Accounts payable and accrued expenses 71,716 61,248 58,542 57,338
Dividends and distributions payable 79,005 78,241 71,917 71,274
Interest rate contracts 32,136 19,045 19,774 -
Accrued interest payable 15,679 12,067 8,127 5,599
Other liabilities 52,969 53,365 56,943 51,926
------------------ --------------- ------------- -------------
Total liabilities 4,496,938 4,401,636 3,665,650 3,601,028
------------------ --------------- ------------- -------------
Commitments and contingencies - - - -
------------------ --------------- ------------- -------------
Minority interests 847,232 851,868 821,575 877,715
------------------ --------------- ------------- -------------
Series A Convertible Redeemable Preferred Stock,
liquidation preference $50.00 per share,
2,000,000 shares issued and outstanding 100,000 100,000 100,000 100,000
------------------ --------------- ------------- -------------
Stockholders' Equity:
Excess stock, $.01 par value, 150,000,000
shares authorized, none issued or outstanding -
Common stock, $.01 par value, 250,000,000 shares
authorized, 90,720,477, 90,350,510, 89,701,122
and 86,630,089 issued and outstanding,
respectively 907 904 897 866
Additional paid-in capital 1,784,850 1,774,335 1,759,714 1,673,349
Dividends in excess of earnings (20,296) (19,193) (15,829) (13,895)
Unearned compensation (2,242) (2,386) (2,531) (848)
Accumulated other comprehensive loss (13,868) (13,868) (19,397) (11,745)
------------------ --------------- ------------- -------------
Total stockholders' equity 1,749,351 1,739,792 1,722,854 1,647,727
------------------ --------------- ------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,193,521 $ 7,093,296 $ 6,310,079 $ 6,226,470
================== =============== ============= =============
BOSTON PROPERTIES, INC.
THIRD QUARTER 2001
CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED
---------------------------------------------------------
30-SEP-01 30-JUN-01 31-MAR-01 31-DEC-00
--------- --------- --------- ---------
Revenue:
Rental
Base Rent (1) $ 232,300 $ 208,071 $ 185,691 $ 183,319
Recoveries from tenants 27,473 27,266 26,178 23,736
Parking and other 12,965 13,533 13,746 12,797
------------ ------------- ------------ -------------
Total rental revenue 272,738 248,870 225,615 219,852
Development and management services 2,805 3,110 3,397 3,405
Interest and other 1,616 4,289 4,444 5,270
------------ ------------- ------------ -------------
Total revenue 277,159 256,269 233,456 228,527
------------ ------------- ------------ -------------
Expenses:
Operating 81,475 76,865 70,343 67,335
General and administrative 9,819 9,880 9,950 9,791
Interest (2) 59,936 55,870 47,853 50,854
Depreciation and amortization 38,518 36,675 34,740 36,088
Loss on investments in other companies - 6,500 - -
------------ ------------- ------------ -------------
Total expenses 189,748 185,790 162,886 164,068
------------ ------------- ------------ -------------
Income before net derivative losses (SFAS No.133),
minority interests and income from unconsolidated
joint ventures 87,411 70,479 70,570 64,459
Net derivative losses (SFAS No.133) (16,620) (4,733) (3,055) -
Minority interest in property partnerships 374 510 (255) (250)
Income from unconsolidated joint ventures 997 717 1,127 402
------------ ------------- ------------ -------------
Income before minority interest in Operating Partnership 72,162 66,973 68,387 64,611
Minority interest in Operating Partnership (3) (18,994) (18,138) (19,024) (19,472)
------------ ------------- ------------ -------------
Income before gain on sale of real estate 53,168 48,835 49,363 45,139
Gain on sale of real estate, net of minority interest - 1,851 4,654 73
------------ ------------- ------------ -------------
Income before cumulative effect of a change in
accounting principle 53,168 50,686 54,017 45,212
Cumulative effect of a change in accounting principle,
net of minority interest - - (6,767) -
------------ ------------- ------------ -------------
Income before extraordinary item 53,168 50,686 47,250 45,212
Extraordinary loss, net - - - (334)
------------ ------------- ------------ -------------
Income before preferred dividend 53,168 50,686 47,250 44,878
Preferred dividend (1,653) (1,648) (1,643) (1,643)
------------ ------------- ------------ -------------
Net income available to common shareholders $ 51,515 $ 49,038 $ 45,607 $ 43,235
============ ============= ============ =============
INCOME PER SHARE OF COMMON STOCK
Net income available to common shareholders per share
- basic $ 0.57 $ 0.54 $ 0.51 $ 0.53
============ ============= ============ =============
Net income available to common shareholders per share
- diluted $ 0.56 $ 0.53 $ 0.50 $ 0.52
============ ============= ============ =============
(1) Base Rent is reported on a straight-line basis over the terms of the
respective leases. The impact of the straight-line rent adjustment
increased revenue by $6,400, $6,487, $5,978 and $2,608 for the three months
ended September 30, 2001, June 30, 2001, March 31, 2001 and December 31,
2000, respectively.
(2) Excludes capitalized interest of $14,740, $15,800, $16,098 and $12,812 for
the three months ended September 30, 2001, June 30, 2001, March 31, 2001
and December 31, 2000, respectively.
(3) Equals minority interest percent of 18.36%, 18.69%, 19.78% and 22.83%,
respectively of income before minority interest in Operating Partnership
after deduction for preferred dividends and distributions.
BOSTON PROPERTIES, INC.
THIRD QUARTER 2001
FUNDS FROM OPERATIONS
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED
--------------------------------------------------
30-SEP-01 30-JUN-01 31-MAR-01 31-DEC-00
--------- --------- --------- ---------
Income from operations before net derivative losses (SFAS No.133),
minority interests and income from unconsolidated joint ventures $ 87,411 $ 70,479 $ 70,570 $ 64,459
Add:
Real estate depreciation and amortization (1) 39,360 37,599 35,557 36,830
Income from unconsolidated joint ventures 997 717 1,127 402
Less:
Net derivative losses (SFAS No.133) 16,620 4,733 3,055 -
Minority property partnership's share of funds from operations 832 411 303 287
Preferred dividends and distributions 8,383 8,260 8,221 8,246
---------- ---------- ---------- -----------
Funds from Operations (FFO) 101,933 95,391 95,675 93,158
Add:
Net derivative losses (SFAS No.133) 16,620 4,733 3,055 -
Less:
Non-cash early surrender lease income (2) 12,445 - - -
---------- ---------- ---------- -----------
FFO before net derivative losses (SFAS No.133) and non-cash
early surrender lease income $ 106,108 $ 100,124 $ 98,730 $ 93,158
========== ========== ========== ===========
FFO available to common shareholders before net
derivative losses (SFAS No. 133)
and non-cash early surrender lease income (3) $ 86,627 $ 81,410 $ 79,201 $ 71,888
========== ========== ========== ===========
FFO per share before net derivative losses
(SFAS No.133) and non-cash early
surrender lease income - basic $ 0.96 $ 0.90 $ 0.89 $ 0.89
========== ========== ========== ===========
Weighted average shares outstanding - basic 90,519 89,990 88,688 80,885
========== ========== ========== ===========
FFO per share before net derivative losses (SFAS No.133)
and non-cash early surrender lease income - diluted $ 0.91 $ 0.86 $ 0.85 $ 0.85
========== ========== ========== ===========
FFO per share after net derivative losses (SFAS No.133)
and non-cash early surrender lease income - diluted $ 0.87 $ 0.82 $ 0.83 $ 0.85
========== ========== ========== ===========
Weighted average shares outstanding - diluted 105,812 105,259 104,160 96,008
========== ========== ========== ===========
RECONCILIATION TO DILUTED FUNDS FROM OPERATIONS
September 30, 2001 June 30, 2001 March 31, 2001 December 31, 2000
-------------------- -------------------- --------------------- --------------------
Income Shares Income Shares Income Shares Income Shares
(Numer- (Denomin- (Numer- (Denomin- (Numer- (Denomin- (Numer- (Denomin-
ator) ator) ator) ator) ator) ator) ator) ator)
-------- --------- --------- -------- --------- --------- --------- ---------
Basic FFO before net derivative losses
(SFAS No.133) and non-cash early
surrender lease income $ 106,108 110,876 $ 100,124 110,676 $ 98,730 110,556 $ 93,158 104,818
Effect of Dilutive Securities
Convertible Preferred Units 6,730 11,011 6,612 11,011 6,578 11,011 6,603 10,370
Convertible Preferred Stock 1,653 2,625 1,648 2,625 1,643 2,625 1,643 2,625
Stock Options and other - 1,657 - 1,633 - 1,837 - 2,128
---------- -------- ---------- -------- ---------- -------- ---------- -------
Diluted FFO before net derivative
losses (SFAS No.133) and
non-cash early surrender lease income $ 114,491 126,169 $ 108,384 125,945 $ 106,951 126,029 $ 101,404 119,941
========== ======== ========== ======== ========== ======== ========== =======
Company's share of diluted FFO before
net derivative losses
(SFAS No.133) and non-cash early
surrender lease income (4) $ 96,017 105,812 $ 90,581 105,259 $ 88,379 104,160 $ 81,169 96,008
========== ======== ========== ======== ========== ======== ========== =======
FFO per share before net derivative
losses (SFAS No.133) and non-cash
early surrender lease income - basic $ 0.96 $ 0.90 $ 0.89 $ 0.89
========== ========== ========== ==========
FFO per share before net derivative
losses (SFAS No.133) and
non-cash early surrender lease
income - basic $ 0.91 $ 0.86 $ 0.85 $ 0.85
========== ========== ========== ==========
(1) Real estate depreciation includes the Company's share of joint venture real
estate depreciation of $1,394, $1,376, $1,260 and $1,189, less corporate
related depreciation of $552, $452, $443 and $447, for the three months
ended September 30, 2001, June 30, 2001, March 31, 2001, and December 31,
2000, respectively.
(2) Represents non-cash early surrender lease income that will be recognized in
Funds from Operations as received in monthly amounts of $1,309 through July
15, 2002.
(3) Based on weighted average shares for the quarter. Company's share for the
quarter ended September 30, 2001, June 30, 2001, March 31, 2001, and
December 31, 2000 was 81.64%, 81.31%, 80.22% and 77.17%, respectively.
(4) Based on weighted average diluted shares for the quarter. Company's share
for the quarter ended September 30, 2001, June 30, 2001, March 31, 2001 and
December 31, 2000 was 83.87%, 83.58%, 82.65% and 80.05%, respectively.
BOSTON PROPERTIES, INC.
THIRD QUARTER 2001
FINANCIAL RATIOS
THREE MONTHS ENDED
---------------------------------------------
9/30/01 6/30/01 3/31/01 12/31/00
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RATIOS COMPUTED FOR INDUSTRY COMPARISONS:
OPERATIONAL RATIOS (1)
Debt Service Coverage Ratio 2.72 (2) 2.54 2.74 2.56
(EBITDA + Income from Unconsolidated Joint Ventures)/(Interest+Principal)
Interest Coverage Ratio (excluding capitalized interest) 3.17 (2) 2.98 3.26 3.05
(EBITDA + Income from Unconsolidated Joint Venture)/Interest
Interest Coverage Ratio (including capitalized interest) 2.53 (2) 2.32 2.43 2.43
(EBITDA + Income from Unconsolidated Joint Venture)/Interest
Return on Shareholder's Equity 18.74% (2) 16.06% 15.99% 17.50%
(EBITDA/Average Equity (book value)) (%)
Return on Real Estate Investments 11.32% (2) 10.70% 10.95% 11.26%
(EBITDA/Average Real Estate Investments (book value)) (%)
Dividend Payout Ratio 63.74% 67.44% 62.35% 62.35%
(Dividends Declared/FFO) (%)
(1) EBITDA is equal to earnings before interest, taxes, depreciation and
amortization.
(2) Includes non-cash early surrender lease income of $12,445.