On July 25, 2012, a joint venture in which the Company has a 50% interest partially placed in-service Annapolis Junction Building Six, a Class A office property with approximately 120,000 net rentable square feet located in Annapolis, Maryland. The property is currently 49% leased.

On August 24, 2012, the Company’s Operating Partnership used available cash to redeem the remaining $225.0 million in aggregate principal amount of its 6.25% senior notes due 2013. The redemption price was determined in accordance with the applicable indenture and totaled approximately $231.6 million. The redemption price included approximately $1.5 million of accrued and unpaid interest to, but not including, the redemption date. Excluding such accrued and unpaid interest, the redemption price was approximately 102.25% of the principal amount being redeemed. The Company recognized a loss on early extinguishment of debt totaling approximately $5.2 million, which amount included the payment of the redemption premium totaling approximately $5.1 million.

On August 29, 2012, the Company acquired the development project located at 680 Folsom Street and 50 Hawthorne Street in San Francisco, California. When completed, the project will comprise approximately 522,000 net rentable square feet of Class A office and retail space. The project is approximately 85% pre-leased. The estimated project cost upon completion is approximately $340 million with initial occupancy expected in the first quarter of 2014. As part of the transaction, the Company also acquired the corner site of 690 Folsom Street, which is an adjacent parcel with a vacant 22,000 square foot, two-story structure that may be redeveloped in the future. The consideration paid by the Company to the seller consisted of approximately $62.2 million in cash and the issuance of 1,588,100 Series Four Preferred Units of limited partnership interest in the Company’s Operating Partnership (the “Series Four Preferred Units”). The Series Four Preferred Units are not convertible into or exchangeable for any common equity of the Operating Partnership or the Company, have a per unit liquidation preference of $50.00 and are entitled to receive quarterly distributions of $0.25 per unit (or an annual rate of 2.0%). On August 31, 2012, a holder redeemed 366,573 Series Four Preferred Units for cash totaling approximately $18.3 million. In connection with the acquisition, the Company also assumed a $170.0 million construction loan commitment, although no amount is currently outstanding.

On September 4, 2012, the Company used available cash to repay the mortgage loan collateralized by its Sumner Square property located in Washington, DC totaling approximately $23.2 million. The mortgage financing bore interest at a fixed rate of 7.35% per annum and was scheduled to mature on September 1, 2013. The Company recognized a loss on early extinguishment of debt totaling approximately $0.3 million, which amount included a prepayment penalty totaling approximately $0.2 million.

On September 27, 2012, the Company’s Value-Added Fund completed the sale of its 300 Billerica Road property located in Chelmsford, Massachusetts for approximately $12.2 million, including the assumption by the buyer of $7.5 million of mortgage indebtedness. 300 Billerica Road is an approximately 111,000 net rentable square foot office building. Net cash proceeds totaled approximately $4.3 million, of which the Company’s share was approximately $2.8 million, after the payment of transaction costs. The Company’s share of the net proceeds included approximately $2.4 million resulting from the Value-Added Fund’s repayment of a loan from the Company’s Operating Partnership. The Value-Added Fund recognized a gain on sale of real estate totaling approximately $1.0 million, of which the Company’s share was approximately $0.2 million and is included within income from unconsolidated joint ventures in the Company’s consolidated statements of operations.

On October 1, 2012, a joint venture in which the Company has a 30% interest partially placed in-service 500 North Capitol Street, NW, a Class A office redevelopment project with approximately 232,000 net rentable square feet located in Washington, DC. The property is currently 82% leased.

On October 4, 2012, the Company completed the formation of a joint venture which owns and operates Fountain Square located in Reston, Virginia, adjacent to the Company’s other Reston properties. Fountain Square is an office and retail complex aggregating approximately 764,000 net rentable square feet (approximately 811,000 net rentable square feet, as re-measured), comprised of approximately 522,000 net rentable square feet of Class A office space and approximately 242,000 net rentable square feet of retail space. The joint venture partner contributed the property valued at approximately $385.0 million and related mortgage indebtedness totaling approximately $211.3 million for a 50% interest in the joint venture. The Company contributed cash totaling approximately $87.0 million for its 50% interest, which cash was distributed to the joint venture partner. The Company is consolidating this joint venture. The mortgage loan bears interest at a fixed rate of 5.71% per annum and matures on October 11, 2016. Pursuant to the joint venture agreement (i) the Company has rights to acquire the partner’s 50% interest and (ii) the partner has the right to cause the Company to acquire the partner’s interest on January 4, 2016, in each case at a fixed price totaling approximately $102.0 million in cash. The fixed price option rights expire on January 31, 2016.

On October 19, 2012, the Company formed a joint venture with an affiliate of Hines to pursue the acquisition of land in San Francisco, California which could support a 61-story, 1.4 million square foot office tower known as Transbay Tower. The purchase price is approximately $190 million, and the acquisition is expected to close in the first quarter of 2013. The Company has a 50% interest in the joint venture.

Projected EPS (diluted)

Add:

Projected Company Share of Real Estate Depreciation and Amortization

Less:

Projected Company Share of Gains on Sales of Real Estate

Projected FFO per Share (diluted)

Real estate

Construction in progress

Land held for future development

Less: accumulated depreciation

Total real estate

Cash and cash equivalents

Cash held in escrows

Investments in securities

Tenant and other receivables, net of allowance for doubtful accounts of $1,381 and $1,766, respectively

Related party notes receivable

Interest receivable from related party notes receivable

Accrued rental income, net of allowance of $2,771 and $2,515, respectively

Deferred charges, net

Prepaid expenses and other assets

Investments in unconsolidated joint ventures

Total assets

Liabilities:

Mortgage notes payable

Unsecured senior notes, net of discount

Unsecured exchangeable senior notes, net of discount

Unsecured line of credit

Accounts payable and accrued expenses

Dividends and distributions payable

Accrued interest payable

Other liabilities

Total liabilities

Commitments and contingencies

Noncontrolling interest:

Redeemable preferred units of the Operating Partnership

Equity:

Stockholders’ equity attributable to Boston Properties, Inc.

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, 150,935,137 and 148,186,511 shares issued and 150,856,237 and 148,107,611 shares outstanding at September 30, 2012 and December 31, 2011, respectively

Additional paid-in capital

Dividends in excess of earnings

Treasury common stock, at cost

Accumulated other comprehensive loss

Total stockholders’ equity attributable to Boston Properties, Inc.

Noncontrolling interests:

Common units of the Operating Partnership

Property partnerships

Total equity

Total liabilities and equity

Revenue

Rental

Base rent

Recoveries from tenants

Parking and other

Total rental revenue

Hotel revenue

Development and management services

Total revenue

Expenses

Operating

Rental

Hotel

General and administrative

Transaction costs

Depreciation and amortization

Total expenses

Operating income

Other income (expense)

Income from unconsolidated joint ventures

Interest and other income

Gains (losses) from investments in securities

Gains (losses) from early extinguishments of debt

Interest expense

Income from continuing operations

Discontinued operations

Income (loss) from discontinued operations

Gain on sale of real estate from discontinued operations

Gain on forgiveness of debt from discontinued operations

Net income

Net income attributable to noncontrolling interests

Noncontrolling interests in property partnership

Noncontrolling interest - redeemable preferred units of the Operating Partnership

Noncontrolling interest - common units of the Operating Partnership

Noncontrolling interest in discontinued operations - common units of the Operating Partnership

Net income attributable to Boston Properties, Inc.

Basic earnings per common share attributable to Boston Properties, Inc.:

Income from continuing operations

Discontinued operations

Net income

Weighted average number of common shares outstanding

Diluted earnings per common share attributable to Boston Properties, Inc.:

Income from continuing operations

Discontinued operations

Net income

Weighted average number of common and common equivalent shares outstanding

Net income attributable to Boston Properties, Inc.

Add:

Noncontrolling interest in discontinued operations - common units of the Operating Partnership

Noncontrolling interest - common units of the Operating Partnership

Noncontrolling interest - redeemable preferred units of the Operating Partnership

Noncontrolling interests in property partnerships

Less:

Income (loss) from discontinued operations

Gain on sale of real estate from discontinued operations

Gain on forgiveness of debt from discontinued operations

Income from continuing operations

Add:

Real estate depreciation and amortization (2)

Income (loss) from discontinued operations

Less:

Gain on sale of real estate included within income from unconsolidated joint ventures

Noncontrolling interests in property partnership’s share of funds from operations

Noncontrolling interest - redeemable preferred units of the Operating Partnership

Funds from operations (FFO) attributable to the Operating Partnership

Less:

Noncontrolling interest - common units of the Operating Partnership’s share of funds from operations

Funds from operations attributable to Boston Properties, Inc.

Boston Properties, Inc.’s percentage share of funds from operations - basic

Weighted average shares outstanding - basic

FFO per share basic

Weighted average shares outstanding - diluted

FFO per share diluted

Boston

New York

Princeton

San Francisco

Washington, DC

Total Portfolio

Class A Office Portfolio

Office/Technical Portfolio

Total Portfolio