Bxp, Inc. · NYSE:BXP
Bxp — ESG Presentation (September 2020)
54 slides from Bxp's sustainability presentation, Sep 30, 2020
Slide 1: BXP ESG Investor Overview
BXP ESG Investor Overview: September 30, 2020
Slide 2: Forward-Looking Statements
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
Slide 3: BXP Quick Facts
BXP Quick Facts The largest publicly-traded developer, owner and manager of Class A office properties in the U.S. $15.8B 195 Properties1 $2.5 Billion BXP’s Share of Annualized Equity Market Cap S&P 500 Company Revenue2 51.2M $28.9B Consolidated Square Feet Owned1 Market Cap Top 4% 5.0M $615M Most su
Slide 4: BXP Markets
BXP Markets: 1 Focus on Growing Gateway Regions - Average 10-year CAGR of 4.5% BXP square feet2 10.9M BXP square feet2 15.5M % of BXP’s Share of NOI3 24% % of BXP’s Share NOI3 34% Rent growth 10-year CAGR1 3.3% Rent growth 10-year CAGR1 5.2% BXP square feet2 7.8M % of BXP’s Share of NOI3 23% Rent gr
Slide 5: BXP Competitive Differentiation
BXP Competitive Differentiation Proven Model with Long-Term Advantages QUALITY AGILITY DURABILITY • Highest quality Class A office • Multi-market strategy to • Portfolio of credit-strong corporate portfolio capture growth and minimize tenants across sectors risk • Proven, trusted leadership team • 8
Slide 6: What our customers say: Columbia Threadneedle
What our customers say: We are welcoming employees back to the office with new space in the heart of the city ““Our new office at 290 Congress Street will provide our employees and our business with the kind of modern, engaging and efficient space that will allow us to develop the optimal work envir
Slide 7: What our customers say: Akamai
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
Slide 8: What our customers say: SGH
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 CityPoi
Slide 9: What our customers say: RPA
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. Boston Properties’ “partnership-oriented approach” and the innovative office space at Colorado Center
Slide 10: BXP Board of Directors
BXP Board of Directors1 A unified organization led by a diverse Board of professionals across market sectors Joel I. Klein Sen. Kelly A. Ayotte Bruce W. Duncan Karen E. Dykstra Carol B. Einiger Chairman of the Board Independent Director Independent Director Independent Director Independent Director
Slide 11: ESG at BXP
ENVIRONMENTAL GOVERNANCE SOCIAL ESG at BXP
Slide 12: BXP Sustainability Framework
BXP Sustainability Framework Climate Action Resilience Social Good Energy & Water Efficiency Climate Risk Awareness Healthy Buildings Green Building Development & Asset-level Preparedness Community Involvement Management Scenario Analysis Employee Programs & Benefits Renewable Energy Management & Pl
Slide 13: ESG Materiality Assessment
ESG Materiality Assessment Top Stakeholder Priorities: Climate Action, Resilience, Social Good & Healthy Buildings 4 5 1 11 Customer Shareholder 3 2 12 6 10 Stakeholders Importance to Stakeholders 14 23 13 7 19 17 8 21 18 9 Community Employee 20 16 26 22 24 15 25 KEY 1. Non-Discrimination 14. Enviro
Slide 14: ESG Focus Extends from the Boardroom to the Boiler Room
ESG Focus Extends from the Boardroom to the Boiler Room Development & Property Management & Leasing & Marketing Corporate Functions Construction Engineering • Product vision and differentiation • Sustainability committee • Green leasing Risk Management • Permitting and entitlement • Sustainability t
Slide 15: ESG Leadership
ESG Leadership Ranked in the top 4% of the most sustainable real estate companies Global Real Estate Sustainability Benchmark (GRESB) Results 15
Slide 16: Public Sustainability Goals
Public Sustainability Goals STATUS 32x25 Energy Use 2019 69.6 Reduction Goal 2018 72.2 27% energy use Reduce energy use intensity, targets a intensity reduction 32% reduction by 2025. Units are 2008 Baseline 94.9 84% kBtu/SF. 64.7 Complete (2025) 45x25 Greenhouse Gas Reduction Goal 2019 2.7 70% carb
Slide 17: Performance Management and Disclosure
Performance Management and Disclosure When you keep a scoreboard, people play differently. Real-time Performance Scoring, Analysis, Reporting Performance Monitoring Benchmarking and Certification and Disclosure 17
Slide 18: Energy Efficient Operations and Decarbonization
Energy Efficient Operations and Decarbonization Energy and Carbon Intensity Performance 100 90 80 BXP has an approved science-based 70 Energy Intensity target, confirming an emissions reduction (kBTU/SF-yr) rate equal to our greater than the rate of 60 reduction required to keep global 50 temperatur
Slide 19: GHG Reduction Pathways
GHG Reduction Pathways Efficiency and a Greener Power Supply are Driving Reductions 70% of GHG reductions are from New Development 10% voluntary green power procurement and a greener grid Green Power 40% Main drivers of efficiency in existing Energy buildings: Efficiency 20% 1. Base Building Equipme
Slide 20: BXP's History of Developing Green Buildings
BXP’s History of Developing Green Buildings Times Square Tower 77 CityPoint Atlantic Wharf 535 Mission 601 Massachusetts Avenue New York Waltham Boston San Francisco Washington, DC 20
Slide 21: Decarbonizing Development and Operations
Building on our History: Decarbonizing Development and Operations Onsite solar photovoltaic (PV) Covered parking at Carnegie Center 8 MW at 10 sites New Jersey BXP purchases specific source renewable energy equal to the expected electricity needs ’ of the Company’s actively Massachusetts managed por
Slide 22: BXP's Market-Leading Health Security
BXP’s Market-Leading Health Security Our leadership in sustainability and healthy buildings served as a foundation for our health security program • Strategy for Repopulating the Workplace from a Health Safety Perspective Following Guidance from the CDC and Public Health Authorities • Published Heal
Slide 23: BXP Social Performance Summary
BXP Social Performance Summary Social Performance Indicators 23
Slide 24: BXP Governance Summary
BXP Governance Summary1 Director Independence and Compliance Strong Stockholder Rights • Incorporated in Delaware 11 Directors 82% independent • Proxy Access By-law right (3%, 3 years, 25%, 5) • Independent, non-executive Chairman of the Board • Annual election of all directors • Regular executive s
Slide 25: Summary: BXP ESG
Summary: BXP ESG Leadership from the Boardroom the to Boiler Room • BXP Leadership: Highest-Quality, Multi-Market • Integrated approach to ESG permeates everything we do Class-A Office REIT • Focused on key areas of materiality – climate action, resilience, social good • Rigorous reporting and trans
Slide 26: ESG at BXP: Case Studies
les b» Boston <P Properties Case Stud ESG at BXP ASSES + aS sl
Slide 27: Development Case Study: Salesforce Tower
Salesforce Tower San Francisco Development Case Study: Salesforce Tower • LEED Platinum® - earned more LEED points than any project in the Bay Area, highest rated skyscraper in California • Lowest design energy intensity of any BXP development to date (EUI = 28) • Purple pipe system will be fed by t
Slide 28: Development Case Study: 888 Boylston
888 Boylston Street Boston Development Case Study: 888 Boylston • First dedicated outside air system with active chilled beams in Boston • 120 kW onsite solar, 100% green power • Completed 12 month stabilized operations measurement and verification process • Operating intensity (EUI=39) is approxima
Slide 29: 888 Boylston Street: Results
888 Boylston Street: Results “Build Tight, Ventilate Right” Key Strategies Notes Active Chilled Beams w/ DOAS Substantial cooling energy savings versus conventional VAV system High Efficiency Lighting 40% LPD Reduction (Common Area) 25% LPD Reduction (Tenant Spaces) High Performance Glazing Double-p
Slide 30: Future Development Case Study: Fourth + Harrison
Fourth + Harrison Future Development Case Study: San Francisco Fourth + Harrison ‘Net zero carbon is when the amount of carbon dioxide emissions released on an annual basis is zero or negative. Our definition for a net zero carbon building is a highly energy efficient building that is fully powered
Slide 31: Portfolio Modernization Case Study: 200 Clarendon Street
200 Clarendon Street Portfolio Modernization Case Study: Boston 200 Clarendon Street • Chiller Plant Modernization • Tenant Condenser Water System Upgrades • Building Management System Retro-commissioning 31
Slide 32: 200 Clarendon Street: Results
200 Clarendon Street: Results ECM Investment, Avoided Cost and Site Energy Use $6.8 Million invested energy conservation projects Intensity over a five year period resulted in a cumulative $10 140 avoided cost over the same period of $9.4 Million. $9 120 Project Cost Simple Payback $8 Energy Year En
Slide 33: Appendix
Boston Properties Chie Wate SESTALLEL: VA abiggtig: IX Append
Slide 34: Forward-Looking Statements
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
Slide 35: Forward-Looking Statements (continued)
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 p
Slide 36: Forward-Looking Statements (continued)
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, particula
Slide 37: Definitions of Non-GAAP Financial Measures and Other Terms
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 measur
Slide 38: Definitions of Non-GAAP Financial Measures (continued)
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 bel
Slide 39: Definitions of Non-GAAP Financial Measures (continued)
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 De
Slide 40: Definitions of Non-GAAP Financial Measures (continued)
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
Slide 41: Funds Available for Distribution (FAD)
FORWARD-LOOKING STATEMENTS Funds Available for Distribution (FAD) 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
Slide 42: Definitions of Non-GAAP Financial Measures (continued)
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) attributa
Slide 43: Definitions of Non-GAAP Financial Measures (continued)
DEFINITIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER TERMS (continued) 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)
Slide 44: Definitions of Non-GAAP Financial Measures (continued)
DEFINITIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER TERMS (continued) 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
Slide 45: Reconciliations: Revenue and Rental Revenue
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED) Revenue and Rental Revenue (in thousands) Quarter ended Quarter ended June 30, 2020 June 30, 2020 Revenue $ 654,773 Revenue $ 654,773 Add: Less: BXP's share of revenue from unconsolidated Joint Ventures ("JVs"
Slide 46: Reconciliations: Debt to Market Capitalization Ratios
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED) Debt to Market Capitalization Ratios (dollars in thousands, except per share amounts) June 30, 2020 Common stock price at quarter end $ 90.38 Equity market capitalization at quarter end (A) $ 15,844,055 Consol
Slide 47: Reconciliations: EBITDAre
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED) EBITDAre (dollars in thousands) Quarter Ended June 30, 2020 Net income attributable to Boston Properties, Inc. common shareholders $ 266,525 Add: Preferred dividends 2,625 Net income attributable to noncontrol
Slide 48: Reconciliations: FFO, FAD, and FAD Payout Ratios
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION (UNAUDITED) FFO, FAD, and FAD Payout Ratios (dollars in thousands) Quarter Ended June 30, 2020 Net income attributable to Boston Properties, Inc. common shareholders $ 266,525 Add: Preferred dividends 2,625 Noncontrolling
Slide 49: Reconciliations: FFO, FAD (continued)
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 Funds Available for Distribution June 30, 2020 FFO attributable to the Operating Partnership common unitholde
Slide 50: Joint Ventures - Consolidated
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 E
Slide 51: Joint Ventures - Consolidated (continued)
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
Slide 52: Joint Ventures - Unconsolidated
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 500 North Monica Total Market Metropolitan 901 New Annapolis Capitol Co
Slide 53: Joint Ventures - Unconsolidated (continued)
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 Monica Total Reconciliation of BXP's share of Net Operating Income/ Mar
Slide 54: Reconciliations: Net Operating Income (NOI)
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 Bosto