On October 1, 2010, the Company modified its construction loan facility collateralized by its Atlantic Wharf development project in Boston, Massachusetts. The construction loan facility totaling $215.0 million bears interest at a variable rate equal to LIBOR plus 3.00% per annum and matures on April 21, 2012 with two, one-year extension options, subject to certain conditions. The modification consisted of releasing from collateral the residential portion of the project and reducing the loan commitment to $192.5 million. All other terms of the mortgage loan remain unchanged. The Company has not drawn any amounts under the facility.

On October 20, 2010, the Company closed a transaction with a financial institution (the “HTC Investor”) related to the historic rehabilitation of the residential component of the Company’s Atlantic Wharf development in Boston, Massachusetts (the “residential project”). The residential project is expected to result in the development of approximately 86 units of residential rental apartments and approximately 10,000 square feet of retail space. Because, as a REIT, the Company may not take full advantage of available historic tax credits, the Company admitted the HTC Investor as a partner in the residential project. The HTC Investor has agreed to contribute an aggregate of approximately $14 million to the project in three installments in 2010 and 2011, subject to the Company’s achievement of certain conditions that include construction milestones and its compliance with the federal

rehabilitation regulations. In exchange for its contribution, the HTC Investor will receive substantially all of the benefits derived from the tax credits. The $14 million in proceeds received from the HTC Investor will be recorded as deferred revenue and recognized as revenue over the five-year tax credit recapture period.

On October 20, 2010, the Company used available cash to repay the mortgage loan collateralized by its South of Market property located in Reston, Virginia totaling approximately $188.0 million. The mortgage loan bore interest at a variable rate equal to LIBOR plus 1.00% per annum and was scheduled to mature on November 21, 2010. There was no prepayment penalty.

On October 20, 2010, the Company used available cash to repay the mortgage loan collateralized by its Democracy Tower property located in Reston, Virginia totaling approximately $59.8 million. The mortgage loan bore interest at a variable rate equal to LIBOR plus 1.75% per annum and was scheduled to mature on December 19, 2010. There was no prepayment penalty.

On October 21, 2010, the Company’s Value-Added Fund conveyed the fee simple title to its One and Two Circle Star Way properties and paid $3.8 million to the lender, which had been accrued previously, in satisfaction of its outstanding obligations under the existing mortgage loan. The mortgage loan had an outstanding principal amount of $42.0 million, bore interest at a fixed rate of 6.57% per annum and was scheduled to mature on September 1, 2013. In addition, the Value-Added Fund had guaranteed the payment of (1) an aggregate of approximately $5.0 million of unfunded tenant improvement costs and leasing commissions and (2) one year of real estate taxes. The Company had an effective ownership interest of 25% in the One and Two Circle Star Way properties.

On November 1, 2010, the Company used available cash to repay the mortgage loan collateralized by its 10 & 20 Burlington Mall Road property located in Burlington, Massachusetts and 91 Hartwell Avenue property located in Lexington, Massachusetts totaling approximately $32.8 million. The mortgage loan bore interest at a fixed rate of 7.25% per annum and was scheduled to mature on October 1, 2011. The Company paid a prepayment penalty totaling approximately $0.3 million associated with the repayment.

On November 1, 2010, the Company used available cash to repay the mortgage loan collateralized by its 1330 Connecticut Avenue property located in Washington, DC totaling approximately $45.0 million. The mortgage loan bore interest at a fixed rate of 7.58% per annum and was scheduled to mature on February 26, 2011. There was no prepayment penalty.

On November 16, 2010, the Company’s Operating Partnership repurchased $50.0 million aggregate principal amount of its 2.875% exchangeable senior notes due 2037, which the holders may require the Operating Partnership to repurchase in February 2012, for approximately $51.1 million. The repurchased notes had an aggregate carrying value of the liability component of approximately $48.4 million and the value of the equity component was approximately $0.4 million, resulting in the recognition of a loss on early extinguishment of approximately $2.3 million.

On November 18, 2010, the Company’s Operating Partnership completed a public offering of $850.0 million in aggregate principal amount of its 4.125% senior notes due 2021. The notes were priced at 99.26% of the principal amount to yield 4.289% to maturity. The aggregate net proceeds to the Operating Partnership, after deducting underwriter discounts and offering expenses, were approximately $836.9 million. The notes mature on May 15, 2021, unless earlier redeemed.

On December 12, 2010, the Company’s Operating Partnership completed the redemption of $700.0 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 was approximately $793.1 million. The redemption price included approximately $17.9 million of accrued and unpaid interest to, but not including, the redemption date. Excluding such accrued and unpaid interest, the redemption price was approximately 110.75% of the principal amount being redeemed. In addition, on November 29, 2010, the Company entered into two Treasury lock agreements to fix the yield on the U.S. Treasury issue used in determining the redemption price on notional amounts aggregating $700.0 million. On December 9, 2010, the Company cash-settled the Treasury lock agreements and paid approximately $2.1 million. As a result of the payment of the redemption premium, the settlement of the Treasury locks and the write-off of deferred financing costs, the Company recognized an aggregate loss on early extinguishment of debt of approximately $79.3 million. Following the partial redemption, there is an aggregate of $225.0 million of the notes outstanding.

On December 23, 2010, the Company acquired the outside member’s 33.33% equity interest in its consolidated joint venture entity that owns the Offices at Wisconsin Place located in Chevy Chase, Maryland for cash of approximately $25.5 million. On the same day, the seller acquired the Company’s 5.00% equity interest in the Company’s unconsolidated joint venture entity that owns the retail portion of the Wisconsin Place mixed-use property for approximately $1.4 million of cash. In addition, on December 23, 2010, the Company used available cash to repay the mortgage loan collateralized by the Offices at Wisconsin Place totaling approximately $97.2 million. The mortgage loan bore interest at a variable rate equal to LIBOR plus 1.10% per annum and was scheduled to mature on January 29, 2011. There was no prepayment penalty.

On December 29, 2010, the Company completed the acquisition of the John Hancock Tower and Garage in Boston, Massachusetts for an aggregate purchase price of approximately $930.0 million. The purchase price consisted of approximately $289.5 million of cash and the assumption of approximately $640.5 million of indebtedness. The assumed debt is a securitized senior mortgage loan that bears interest at a fixed rate of 5.68% per annum and matures on January 6, 2017. The loan requires interest-only payments with a balloon payment due at maturity. The Company incurred an aggregate of approximately $0.9 million of acquisition-related costs, of which $0.6 million were expensed during the fourth quarter of 2010. The John Hancock Tower is an iconic 62-story, approximately 1,700,000 rentable square foot office tower located in the heart of Boston’s Back Bay neighborhood. The garage is an eight-level, 2,013 space parking facility.

On January 14, 2011, the Company placed in-service approximately 57% of the office component of its Atlantic Wharf development project located in Boston, Massachusetts. The office component, which is comprised of approximately 790,000 net rentable square feet, is currently 79% leased.

On January 20, 2011, as reported in the Company’s Current Report on Form 8-K filed on January 21, 2011, the Company’s Compensation Committee approved outperformance awards under the Company’s 1997 Stock Option and Incentive Plan to officers and employees of the Company. These awards (the “2011 OPP Awards”) are part of a broad-based, long-term incentive compensation program designed to provide the Company’s management team with the potential to earn equity awards subject to the Company “outperforming” and creating shareholder value in a pay-for-performance structure. Recipients of 2011 OPP Awards will share in a maximum outperformance pool of $40 million if the total return to shareholders, including both share appreciation and dividends, exceeds absolute and relative hurdles over a three-year measurement period from February 1, 2011 to January 31, 2014. Earned awards are subject to two-years of time-based vesting after the performance measurement date. Investors are encouraged to refer to the Form 8-K referenced above for a detailed discussion of the terms and conditions of the 2011 OPP Awards, including the manner in which the outperformance pool is calculated. The Company expects that under the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 718 “Compensation – Stock Compensation” the 2011 OPP Awards will have an aggregate value of approximately $7.4 million, which amount will be amortized into earnings over the five-year plan period under the graded vesting method and has been reflected in the 2011 guidance below.

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)

ASSETS

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 $2,081 and $4,125, respectively

Related party note receivable

Accrued rental income, net of allowance of $3,116 and $2,645, respectively

Deferred charges, net

Prepaid expenses and other assets

Investments in unconsolidated joint ventures

Total assets

LIABILITIES AND EQUITY

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, 140,278,005 and 138,958,910 sharesissued and 140,199,105 and 138,880,010 shares outstanding in 2010 and 2009, respectively

Additional paid-in capital

Earnings (dividends) in excess of dividends (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

Acquisition costs

Loss (gain) from suspension of development

Depreciation and amortization

Total expenses

Operating income

Other income (expense)

Income from unconsolidated joint ventures

Interest and other income

Gains from investments in securities

Interest expense

Losses from early extinguishments of debt

Income (loss) from continuing operations

Gains on sales of real estate

Net income (loss)

Net income (loss) attributable to noncontrolling interests

Noncontrolling interests in property partnerships

Noncontrolling interest - redeemable preferred units of the Operating

Partnership

Noncontrolling interest - common units of the Operating Partnership

Noncontrolling interest in gains on sales of real estate - common unitsof the Operating Partnership

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

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

Net income (loss)

Weighted average number of common shares outstanding

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

Net income (loss)

Weighted average number of common and common equivalent shares outstanding

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

Add:

Noncontrolling interest in gains on sales of real estate -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:

Gains on sales of real estate

Income (loss) from continuing operations

Add:

Real estate depreciation and amortization (2)

Less:

Gain on sale of real estate included within income from unconsolidated joint ventures (3)

Noncontrolling interests in property partnerships’ 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.

Our 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

Greater Boston

Greater Washington, DC

Midtown Manhattan

Princeton/East Brunswick, NJ

Greater San Francisco

Total Portfolio

Class A Office Portfolio

Office/Technical Portfolio

Total Portfolio