Item 8. Financial Statements and Supplementary Data.

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Item 8. Financial Statements and Supplementary Data.

BOSTON PROPERTIES, INC. AND BOSTON PROPERTIES LIMITED PARTNERSHIP

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



		Page

Boston Properties, Inc.
	Management’s Report on Internal Control over Financial Reporting	106
	Report of Independent Registered Public Accounting Firm (PCAOB ID 238)	107
	Consolidated Balance Sheets as of December 31, 202 2 and 20 2 1	110
	Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020	112
	Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020	113
	Consolidated Statements of Equity for the years ended December 31, 2022, 2021 and 2020	114
	Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020	116

Boston Properties Limited Partnership
	Management’s Report on Internal Control over Financial Reporting	119
	Report of Independent Registered Public Accounting Firm (PCAOB ID 238)	120
	Consolidated Balance Sheets as of December 31, 2022 and 2021	123
	Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020	125
	Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020	126
	Consolidated Statements of Capital and Noncontrolling Interests for the years ended December 31, 2022, 2021 and 2020	127
	Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020	129

	Notes to Consolidated Financial Statements	132

Boston Properties, Inc.
	Financial Statement Schedule—Schedule 3 - Real Estate Investments and Accumulated Depreciation as of December 31, 2022	182

Boston Properties Limited Partnership
	Financial Statement Schedule—Schedule 3 - Real Estate Investments and Accumulated Depreciation as of December 31, 2022	187

All other schedules for which a provision is made in the applicable accounting regulations of the SEC are not required under the related instructions or are inapplicable, and therefore have been omitted.

Management’s Report on Internal Control over

Financial Reporting

Management of Boston Properties, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting for Boston Properties, Inc. Boston Properties, Inc.’s internal control over financial reporting is a process designed under the supervision of its principal executive officer and principal financial officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Boston Properties, Inc.’s financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

As of the end of Boston Properties, Inc.’s 2022 fiscal year, management conducted assessments of the effectiveness of Boston Properties, Inc.’s internal control over financial reporting based on the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on these assessments, management has determined that Boston Properties, Inc.’s internal control over financial reporting as of December 31, 2022 was effective.

Our internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of Boston Properties, Inc.; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Boston Properties, Inc.’s assets that could have a material effect on its financial statements.

The effectiveness of Boston Properties, Inc.’s internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report appearing on page 107, which expresses an unqualified opinion on the effectiveness of Boston Properties, Inc.’s internal control over financial reporting as of December 31, 2022.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Boston Properties, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Boston Properties, Inc. and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021**,** and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of Impairment Indicators of Long-Lived Assets and Investments in Unconsolidated Joint Ventures

As described in Notes 2, 3 and 6 to the consolidated financial statements, the Company’s total real estate balance was $19,496.4 million and its investments in unconsolidated joint ventures was $1,630.5 million as of December 31, 2022. During 2022, the Company recognized a $50.7 million other-than-temporary impairment related to an investment in an unconsolidated joint venture. Management reviews its long-lived assets for indicators of impairment following the end of each quarter and when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. This evaluation of long-lived assets is dependent on a number of factors, including when there is an event or adverse change in the operating performance of the long-lived asset or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life or hold period. Management reviews its unconsolidated joint ventures for indicators of impairment on a quarterly basis and records impairment charges when events or circumstances change indicating that a decline in the fair values below the carrying amounts has occurred and such decline is other-than-temporary. This evaluation of the investments in unconsolidated joint ventures is dependent on a number of factors, including the performance of each investment and market conditions. Management will record an impairment charge if it determines that a decline in the fair value below the carrying amount of an investment in an unconsolidated joint venture is other-than-temporary. The fair value of unconsolidated joint ventures is calculated using a discounted cash flow model which is subjective and considers assumptions regarding future occupancy, future rental rates, future capital requirements, discount rates, and capitalization rates.

The principal considerations for our determination that performing procedures relating to the assessment of impairment indicators for long-lived assets and investments in unconsolidated joint ventures is a critical audit matter are (i) the significant judgment by management (a) in identifying the indicators of impairment for long-lived assets and investments in unconsolidated joint ventures and (b) when developing the fair value estimate of the investment in unconsolidated joint venture with an other- than- temporary impairment, (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to (a) management's identification of the indicators of impairment related to the operating performance and anticipated hold periods for long-lived assets and the performance of each investment and market conditions for investments in unconsolidated joint ventures and (b) management’s assumptions related to future occupancy, future rental rates, future capital requirements, discount rate and capitalization rate (collectively referred to as “the significant fair value assumptions”), and (iii) the audit effort related to management’s development of the fair value estimate of the investment in unconsolidated joint venture with an other-than-temporary impairment involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to (i) the identification of the indicators of impairment for long-lived assets and investments in unconsolidated joint ventures and (ii) developing the fair value estimate of the unconsolidated investment in joint venture with an other- than- temporary impairment. For the identification of the indicators of impairment, these procedures also included, among others, (i) testing management's process for identifying the indicators of impairment for long-lived assets and investments in unconsolidated joint ventures, (ii) evaluating the reasonableness of the models, (iii) testing the completeness and accuracy of the underlying data used in the models, and (iv) evaluating the reasonableness of management’s indicators of impairment related to the operating performance and anticipated hold periods for long-lived assets and the performance of each investment and market

conditions for investments in unconsolidated joint ventures. Evaluating the operating performance and anticipated hold periods involved considering the current and past performance of the long-lived assets, the consistency with external market and industry data, and whether the indicators were consistent with evidence obtained in other areas of the audit. Evaluating performance of each investment and market conditions involved considering changes in the performance of the investments and market conditions and evidence obtained in other areas of the audit. For the fair value estimate of the unconsolidated investment in joint venture with an other- than- temporary decline, these procedures also included, among others, (i) testing management’s process for developing the fair value estimate of the investment in unconsolidated joint venture relating to the other-than-temporary impairment, (ii) evaluating the appropriateness of management’s discounted cash flow model, (iii) testing the completeness and accuracy of the underlying data used in the model, and (iv) evaluating the reasonableness of the significant fair value assumptions used by management by considering industry knowledge and data, historical company data, and evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the appropriateness of the discounted cash flow model and reasonableness of the significant fair value assumptions.

Purchase Price Allocation for Long-Lived Asset Property Acquisitions

As described in Notes 2 and 3 to the consolidated financial statements, during the year ended December 31, 2022, the Company acquired two properties for an aggregate purchase price of $1,316.7 million. Management assesses the fair value of acquired tangible and intangible assets (including land, buildings and improvements, tenant improvements, “above-” and “below-market” leases, leasing costs, acquired in-place leases, other identified intangible assets and assumed liabilities) and allocates the purchase price to the acquired assets and assumed liabilities, including land and buildings as if vacant. Management assesses fair value based on estimated cash flow projections that utilize discount, and/or capitalization rates, and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known and anticipated trends, and market and economic conditions.

The principal considerations for our determination that performing procedures relating to the purchase price allocation for long-lived asset property acquisitions is a critical audit matter are (i) the significant judgment by management in developing the fair value estimates of assets acquired and the corresponding purchase price allocation, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s significant assumptions related to discount rates and capitalization rates, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the purchase price allocation for long-lived asset property acquisitions, including controls over the assumptions related to discount rates and capitalization rates used to determine the fair value of the assets acquired and the corresponding purchase price allocation. These procedures also included, among others, (i) reading the purchase agreements for all acquisitions, (ii) testing management’s process for developing the fair value estimates of the assets acquired and the corresponding purchase price allocation, (iii) evaluating the appropriateness of management’s discounted cash flow methods, (iv) testing the completeness and accuracy of the underlying data used in the methods, and, (v) evaluating the reasonableness of the significant assumptions used by management, related to the discount rates and capitalization rates by considering industry knowledge and data as well as historical company data and experience. Professionals with specialized skill and knowledge were used to assist in the evaluation of the appropriateness of the discounted cash flow model and reasonableness of the discount rates and capitalization rates assumptions.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

February 27, 2023

We have served as the Company’s auditor since 1997.


BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except for share and par value amounts)
	December 31, 2022		December 31, 2021
ASSETS
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $6,789,029 and $6,702,830 at December 31, 2022 and December 31, 2021, respectively)	$	25,389,663	$	23,752,630
Right of use assets - finance leases (amounts related to VIEs of $21,000 and $21,000 at December 31, 2022 and December 31, 2021, respectively)	237,510		237,507
Right of use assets - operating leases	167,351		169,778
Less: accumulated depreciation (amounts related to VIEs of $(1,381,401) and $(1,283,060) at December 31, 2022 and December 31, 2021, respectively)	(6,298,082)		(5,883,961)
Total real estate	19,496,442		18,275,954
Cash and cash equivalents (amounts related to VIEs of $259,658 and $300,937 at December 31, 2022 and December 31, 2021, respectively)	690,333		452,692
Cash held in escrows	46,479		48,466
Investments in securities	32,277		43,632
Tenant and other receivables, net (amounts related to VIEs of $16,521 and $6,824 at December 31, 2022 and December 31, 2021, respectively)	81,389		70,186
Related party note receivable, net	78,576		78,336
Notes receivable, net	—		9,641
Sales-type lease receivable, net	12,811		—
Accrued rental income, net (amounts related to VIEs of $367,138 and $357,395 at December 31, 2022 and December 31, 2021, respectively)	1,276,580		1,226,745
Deferred charges, net (amounts related to VIEs of $176,597 and $174,637 at December 31, 2022 and December 31, 2021, respectively)	733,282		618,798
Prepaid expenses and other assets (amounts related to VIEs of $11,647 and $29,668 at December 31, 2022 and December 31, 2021, respectively)	43,589		57,811
Investments in unconsolidated joint ventures	1,715,911		1,482,997
Total assets	$	24,207,669	$	22,365,258
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net (amounts related to VIEs of $3,272,368 and $3,267,914 at December 31, 2022 and December 31, 2021, respectively)	$	3,272,368	$	3,267,914
Unsecured senior notes, net	10,237,968		9,483,695
Unsecured line of credit	—		145,000
Unsecured term loan, net	730,000		—
Lease liabilities - finance leases (amounts related to VIEs of $20,604 and $20,458 at December 31, 2022 and December 31, 2021, respectively)	249,335		244,421
Lease liabilities - operating leases	204,686		204,561
Accounts payable and accrued expenses (amounts related to VIEs of $29,466 and $29,464 at December 31, 2022 and December 31, 2021, respectively)	417,545		320,775
Dividends and distributions payable	170,643		169,859
Accrued interest payable	103,774		94,796

Other liabilities (amounts related to VIEs of $114,232 and $150,131 at December 31, 2022 and December 31, 2021, respectively)	450,918		391,441
Total liabilities	15,837,237		14,322,462
Commitments and contingencies (See Note 8)
Redeemable deferred stock units— 97,853 and 83,073 units outstanding at redemption value at December 31, 2022 and December 31, 2021, respectively	6,613		9,568


BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except for share and par value amounts)
	December 31, 2022		December 31, 2021
Equity:
Stockholders’ equity attributable to Boston Properties, Inc.:
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding	—		—
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued or outstanding	—		—
Common stock, $0.01 par value, 250,000,000 shares authorized, 156,836,767 and 156,623,749 issued and 156,757,867 and 156,544,849 outstanding at December 31, 2022 and December 31, 2021, respectively	1,568		1,565
Additional paid-in capital	6,539,147		6,497,730
Dividends in excess of earnings	(391,356)		(625,891)
Treasury common stock at cost, 78,900 shares at December 31, 2022 and December 31, 2021	(2,722)		(2,722)
Accumulated other comprehensive loss	(13,718)		(36,662)
Total stockholders’ equity attributable to Boston Properties, Inc.	6,132,919		5,834,020
Noncontrolling interests:
Common units of Boston Properties Limited Partnership	683,583		642,655
Property partnerships	1,547,317		1,556,553
Total equity	8,363,819		8,033,228
Total liabilities and equity	$	24,207,669	$	22,365,258

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

BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except for per share amounts)


	Year ended December 31,
		2022		2021		2020
Revenue
Lease		$	2,918,368	$	2,753,014	$	2,646,261
Parking and other		107,225		81,814		70,680
Hotel		39,482		13,609		7,478
Development and management services		28,056		27,697		29,641
Direct reimbursements of payroll and related costs from management services contracts		15,450		12,487		11,626
Total revenue		3,108,581		2,888,621		2,765,686
Expenses
Operating
Rental		1,108,070		1,021,151		1,017,208
Hotel		27,478		12,998		13,136
General and administrative		146,378		151,573		133,112
Payroll and related costs from management services contracts		15,450		12,487		11,626
Transaction costs		2,905		5,036		1,531
Depreciation and amortization		749,775		717,336		683,751
Total expenses		2,050,056		1,920,581		1,860,364
Other income (expense)
Loss from unconsolidated joint ventures		(59,840)		(2,570)		(85,110)
Gains on sales of real estate		437,019		123,660		618,982
Gain on sales-type lease		10,058		—		—
Interest and other income (loss)		11,940		5,704		5,953
Other income - assignment fee		6,624		—		—
Gains (losses) from investments in securities		(6,453)		5,626		5,261
Unrealized loss on non-real estate investment		(150)		—		—
Losses from early extinguishment of debt		—		(45,182)		—
Interest expense		(437,139)		(423,346)		(431,717)
Net income		1,020,584		631,932		1,018,691
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships		(74,857)		(70,806)		(48,260)
Noncontrolling interest—common units of the Operating Partnership		(96,780)		(55,931)		(97,704)
Net income attributable to Boston Properties, Inc.		848,947		505,195		872,727
Preferred dividends		—		(2,560)		(10,500)
Preferred stock redemption charge		—		(6,412)		—
Net income attributable to Boston Properties, Inc. common shareholders		$	848,947	$	496,223	$	862,227
Basic earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income		$	5.41	$	3.18	$	5.54
Weighted average number of common shares outstanding		156,726		156,116		155,432
Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income		$	5.40	$	3.17	$	5.54
Weighted average number of common and common equivalent shares outstanding		157,137		156,376		155,517

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

BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


	Year ended December 31,
		2022		2021		2020
Net income		$	1,020,584	$	631,932	$	1,018,691
Other comprehensive income:
Effective portion of interest rate contracts		19,396		8,544		(7,848)
Amortization of interest rate contracts (1)		6,707		6,704		6,697
Other comprehensive income (loss)		26,103		15,248		(1,151)
Comprehensive income		1,046,687		647,180		1,017,540
Net income attributable to noncontrolling interests		(171,637)		(126,737)		(145,964)
Other comprehensive income attributable to noncontrolling interests		(3,156)		(2,020)		(404)
Comprehensive income attributable to Boston Properties, Inc.		$	871,894	$	518,423	$	871,172

(1)Amounts reclassified from comprehensive income primarily to interest expense within Boston Properties, Inc.’s Consolidated Statements of Operations.

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


BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF EQUITY (in thousands)
	Common Stock			Preferred Stock		Additional Paid-in Capital		Dividends in Excess of Earnings		Treasury Stock, at cost		Accumulated Other Comprehensive Loss		Noncontrolling Interests - Common Units		Noncontrolling Interests - Property Partnerships		Total
	Shares	Amount
Equity, December 31, 2019	154,790	$	1,548	$	200,000	$	6,294,719	$	(760,523)	$	(2,722)	$	(48,335)	$	600,860	$	1,728,689	$	8,014,236
Cumulative effect of a change in accounting principle	—	—		—		—		(1,505)		—		—		(174)		—		(1,679)
Redemption of operating partnership units to common stock	857	9		—		29,689		—		—		—		(29,698)		—		—
Allocated net income for the period	—	—		—		—		872,727		—		—		97,704		48,260		1,018,691
Dividends/distributions declared	—	—		—		—		(620,352)		—		—		(68,921)		—		(689,273)
Shares issued pursuant to stock purchase plan	7	—		—		759		—		—		—		—		—		759
Net activity from stock option and incentive plan	65	—		—		9,303		—		—		—		39,318		—		48,621
Contributions from noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		8,219		8,219
Distributions to noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		(58,811)		(58,811)
Effective portion of interest rate contracts	—	—		—		—		—		—		(7,066)		(782)		—		(7,848)
Amortization of interest rate contracts	—	—		—		—		—		—		5,511		610		576		6,697
Reallocation of noncontrolling interest	—	—		—		22,321		—		—		—		(22,321)		—		—
Equity, December 31, 2020	155,719	1,557		200,000		6,356,791		(509,653)		(2,722)		(49,890)		616,596		1,726,933		8,339,612
Redemption of operating partnership units to common stock	524	5		—		18,381		—		—		—		(18,386)		—		—
Allocated net income for the period	—	—		—		—		505,195		—		—		55,931		70,806		631,932
Dividends/distributions declared	—	—		—		—		(615,021)		—		—		(68,822)		—		(683,843)
Shares issued pursuant to stock purchase plan	9	—		—		1,004		—		—		—		—		—		1,004
Net activity from stock option and incentive plan	293	3		—		25,607		—		—		—		45,773		—		71,383
Issuance of operating partnership units for 360 Park Avenue South	—	—		—		—		—		—		—		99,689		—		99,689
Preferred stock redemption	—	—		(200,000)		6,377		—		—		—		—		—		(193,623)
Preferred stock redemption charge	—	—		—		—		(6,412)		—		—		—		—		(6,412)
Contributions from noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		18,002		18,002
Distributions to noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		(259,764)		(259,764)
Effective portion of interest rate contracts	—	—		—		—		—		—		7,703		841		—		8,544
Amortization of interest rate contracts	—	—		—		—		—		—		5,525		603		576		6,704
Reallocation of noncontrolling interest	—	—		—		89,570		—		—		—		(89,570)		—		—
Equity, December 31, 2021	156,545	1,565		—		6,497,730		(625,891)		(2,722)		(36,662)		642,655		1,556,553		8,033,228


BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF EQUITY (in thousands)
	Common Stock			Preferred Stock		Additional Paid-in Capital		Dividends in Excess of Earnings		Treasury Stock, at cost		Accumulated Other Comprehensive Loss		Noncontrolling Interests - Common Units		Noncontrolling Interests - Property Partnerships		Total
	Shares	Amount
Redemption of operating partnership units to common stock	182	3		—		6,536		—		—		—		(6,539)		—		—
Allocated net income for the period	—	—		—		—		848,947		—		—		96,780		74,857		1,020,584
Dividends/distributions declared	—	—		—		—		(614,412)		—		—		(71,714)		—		(686,126)
Shares issued pursuant to stock purchase plan	10	—		—		1,036		—		—		—		—		—		1,036
Net activity from stock option and incentive plan	21	—		—		7,261		—		—		—		46,402		—		53,663
Contributions from noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		849		849
Distributions to noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		(85,518)		(85,518)
Effective portion of interest rate contracts	—	—		—		—		—		—		17,435		1,961		—		19,396
Amortization of interest rate contracts	—	—		—		—		—		—		5,509		622		576		6,707
Reallocation of noncontrolling interest	—	—		—		26,584		—		—		—		(26,584)		—		—
Equity, December 31, 2022	156,758	$	1,568	$	—	$	6,539,147	$	(391,356)	$	(2,722)	$	(13,718)	$	683,583	$	1,547,317	$	8,363,819

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


BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
	Year ended December 31,
	2022		2021		2020
Cash flows from operating activities:
Net income	$	1,020,584	$	631,932	$	1,018,691
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	749,775		717,336		683,751
Amortization of right of use assets - operating leases	2,427		3,516		2,234
Non-cash compensation expense	52,026		50,860		44,142
Loss from unconsolidated joint ventures	59,840		2,570		85,110
Distributions of net cash flow from operations of unconsolidated joint ventures	26,827		21,542		31,892
Losses (gains) from investments in securities	6,453		(5,626)		(5,261)
Allowance for current expected credit losses	(224)		(1,207)		1,849
Non-cash portion of interest expense	25,831		23,368		23,384
Settlement of accreted debt discount on redemption of unsecured senior notes	—		(8,500)		—
Losses from early extinguishments of debt	—		45,182		—
Other income - assignment fee	(6,624)		—		—
Gains on sales of real estate	(437,019)		(123,660)		(618,982)
Gain on sales-type lease	(10,058)		—		—
Unrealized loss on non-real estate investment	150		—		—
Change in assets and liabilities:
Tenant and other receivables, net	(7,621)		4,820		22,550
Notes receivable, net	(152)		(545)		(19)
Accrued rental income, net	(98,075)		(101,548)		(97,099)
Prepaid expenses and other assets	20,099		(20,811)		12,488
Lease liabilities - finance leases	—		—		568
Lease liabilities - operating leases	125		(23,599)		1,533
Accounts payable and accrued expenses	(22,777)		20,025		(4,059)
Accrued interest payable	8,989		(10,839)		16,211
Other liabilities	(24,120)		(28,739)		17,629
Tenant leasing costs	(84,057)		(62,850)		(79,772)
Total adjustments	261,815		501,295		138,149
Net cash provided by operating activities	1,282,399		1,133,227		1,156,840
Cash flows from investing activities:
Acquisitions of real estate	(1,320,273)		(222,260)		(137,976)
Construction in progress	(500,273)		(513,878)		(482,507)
Building and other capital improvements	(177,004)		(150,998)		(160,126)
Tenant improvements	(218,685)		(263,952)		(234,423)
Proceeds from sales of real estate	834,770		179,887		519,303
Proceeds from assignment fee	6,624		—		—
Capital contributions to unconsolidated joint ventures	(277,581)		(98,152)		(172,436)
Capital distributions from unconsolidated joint ventures	37,122		122		55,298
Proceeds from sale of investment in unconsolidated joint venture	—		17,789		—
Investments in non-real estate investments	(2,404)		—		—
Issuance of notes receivable, net	—		—		(9,800)


BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
	Year ended December 31,
	2022		2021		2020
Proceeds from notes receivable	10,000		10,035		6,397
Investments in securities, net	4,902		1,451		2,551
Net cash used in investing activities	(1,602,802)		(1,039,956)		(613,719)
Cash flows from financing activities:
Proceeds from mortgage notes payable	—		1,201,388		—
Repayments of mortgage notes payable	—		(832,296)		(17,168)
Proceeds from unsecured senior notes	749,557		1,695,996		1,248,125
Redemption of unsecured senior notes	—		(1,841,500)		—
Borrowings on unsecured line of credit	985,000		770,000		265,000
Repayments of unsecured line of credit	(1,130,000)		(625,000)		(265,000)
Borrowings on unsecured term loan	730,000		—		—
Redemption of preferred stock	—		(200,000)		—
Payments on finance lease obligations	—		1,250		—
Repayment of unsecured term loan	—		(500,000)		—
Deferred financing costs	(8,460)		(20,757)		(10,416)
Debt issuance costs	—		(16,186)		—
Debt prepayment and extinguishment costs	—		(43,036)		—
Net activity from equity transactions	(352)		24,214		3,277
Dividends and distributions	(685,019)		(683,753)		(688,904)
Contributions from noncontrolling interests in property partnerships	849		18,002		8,219
Distributions to noncontrolling interests in property partnerships	(85,518)		(259,764)		(58,811)
Net cash provided by (used in) financing activities	556,057		(1,311,442)		484,322
Net increase (decrease) in cash and cash equivalents and cash held in escrows	235,654		(1,218,171)		1,027,443
Cash and cash equivalents and cash held in escrows, beginning of period	501,158		1,719,329		691,886
Cash and cash equivalents and cash held in escrows, end of period	$	736,812	$	501,158	$	1,719,329

Reconciliation of cash and cash equivalents and cash held in escrows:
Cash and cash equivalents, beginning of period	$	452,692	$	1,668,742	$	644,950
Cash held in escrows, beginning of period	48,466		50,587		46,936
Cash and cash equivalents and cash held in escrows, beginning of period	$	501,158	$	1,719,329	$	691,886

Cash and cash equivalents, end of period	$	690,333	$	452,692	$	1,668,742
Cash held in escrows, end of period	46,479		48,466		50,587
Cash and cash equivalents and cash held in escrows, end of period	$	736,812	$	501,158	$	1,719,329

Supplemental disclosures:
Cash paid for interest	$	449,903	$	465,442	$	433,492
Interest capitalized	$	52,130	$	53,097	$	53,881

Non-cash investing and financing activities:
Write-off of fully depreciated real estate	$	(119,534)	$	(239,317)	$	(99,494)
Change in real estate included in accounts payable and accrued expenses	$	97,586	$	(25,183)	$	(19,848)
Construction in progress, net deconsolidated	$	(11,316)	$	(299,947)	$	—


BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
	Year ended December 31,
	2022		2021		2020
Investment in unconsolidated joint ventures recorded upon deconsolidation	$	11,316	$	107,132	$	347,898
Sales-type lease origination	$	13,045	$	—	$	—
Derecognition of assets in exchange for sales-type lease obligation	$	(2,987)	$	—	$	—
Accrued rental income, net deconsolidated	$	—	$	—	$	(4,558)
Tenant leasing costs, net deconsolidated	$	—	$	—	$	(3,462)
Building and other capital improvements, net deconsolidated	$	—	$	—	$	(111,889)
Tenant improvements, net deconsolidated	$	—	$	—	$	(12,331)
Prepaid expenses and other assets, net deconsolidated	$	—	$	(5,011)	$	—
Assumption of mortgage notes payable	$	—	$	200,311	$	—
Mortgage notes payable, net deconsolidation	$	—	$	(198,381)	$	—
Issuance of operating partnership units	$	—	$	99,689	$	—
Right-of-use assets obtained in exchange for lease liabilities	$	—	$	26,887	$	—
Dividends and distributions declared but not paid	$	170,643	$	169,859	$	171,082
Conversions of noncontrolling interests to stockholders’ equity	$	6,539	$	18,386	$	29,698
Issuance of restricted securities to employees and non-employee directors	$	48,417	$	44,405	$	42,607

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

Management’s Report on Internal Control over

Financial Reporting

Management of Boston Properties, Inc., the sole general partner of Boston Properties Limited Partnership, is responsible for establishing and maintaining adequate internal control over financial reporting for Boston Properties Limited Partnership. Boston Properties Limited Partnership’s internal control over financial reporting is a process designed under the supervision of the principal executive officer and principal financial officer of Boston Properties, Inc. to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Boston Properties Limited Partnership’s financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

As of the end of Boston Properties Limited Partnership’s 2022 fiscal year, management conducted assessments of the effectiveness of Boston Properties Limited Partnership’s internal control over financial reporting based on the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on these assessments, management has determined that Boston Properties Limited Partnership’s internal control over financial reporting as of December 31, 2022 was effective.

Boston Properties Limited Partnership’s internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of Boston Properties, Inc.; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Boston Properties Limited Partnership’s assets that could have a material effect on our financial statements.

The effectiveness of Boston Properties Limited Partnership’s internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report appearing on page 120, which expresses an unqualified opinion on the effectiveness of Boston Properties Limited Partnership’s internal control over financial reporting as of December 31, 2022.

Report of Independent Registered Public Accounting Firm

To the Partners of Boston Properties Limited Partnership

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Boston Properties Limited Partnership and its subsidiaries (the “Partnership”) as of December 31, 2022 and 2021, and the related consolidated statements of operations, of comprehensive income, of capital and noncontrolling interests and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Partnership’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Partnership as of December 31, 2022 and 2021**,** and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Partnership’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Partnership’s consolidated financial statements and on the Partnership’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Definition and Limitations of Internal Control over Financial Reporting

assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Critical Audit Matters

Assessment of Impairment Indicators of Long-Lived Assets and Investments in Unconsolidated Joint Ventures

As described in Notes 2, 3 and 6 to the consolidated financial statements, the Partnership’s total real estate balance was $19,246.5 million and its investments in unconsolidated joint ventures was $1,630.5 million as of December 31, 2022. During 2022, the Partnership recognized a $50.7 million other than temporary impairment related to an investment in an unconsolidated joint venture. Management reviews its long-lived assets for indicators of impairment following the end of each quarter and when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. This evaluation of long-lived assets is dependent on a number of factors, including when there is an event or adverse change in the operating performance of the long-lived asset or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life or hold period. Management reviews its unconsolidated joint ventures for indicators of impairment on a quarterly basis and records impairment charges when events or circumstances change indicating that a decline in the fair values below the carrying amounts has occurred and such decline is other-than-temporary. This evaluation of the investments in unconsolidated joint ventures is dependent on a number of factors, including the performance of each investment and market conditions. Management will record an impairment charge if it determines that a decline in the fair value below the carrying amount of an investment in an unconsolidated joint venture is other-than-temporary. The fair value of unconsolidated joint ventures is calculated using a discounted cash flow model which is subjective and considers assumptions regarding future occupancy, future rental rates, future capital requirements, discount rates, and capitalization rates.

reasonableness of the models, (iii) testing the completeness and accuracy of the underlying data used in the models, and (iv) evaluating the reasonableness of management’s indicators of impairment related to the operating performance and anticipated hold periods for long-lived assets and the performance of each investment and market conditions for investments in unconsolidated joint ventures. Evaluating the operating performance and anticipated hold periods involved considering the current and past performance of the long-lived assets, the consistency with external market and industry data, and whether the indicators were consistent with evidence obtained in other areas of the audit. Evaluating performance of each investment and market conditions involved considering changes in the performance of the investments and market conditions and evidence obtained in other areas of the audit. For the fair value estimate of the unconsolidated investment in joint venture with an other- than- temporary decline, these procedures also included, among others, (i) testing management’s process for developing the fair value estimate of the investment in unconsolidated joint venture relating to the other-than-temporary impairment, (ii) evaluating the appropriateness of management’s discounted cash flow model, (iii) testing the completeness and accuracy of the underlying data used in the model, and (iv) evaluating the reasonableness of the significant fair value assumptions used by management by considering industry knowledge and data, historical Partnership data, and evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the appropriateness of the discounted cash flow model and reasonableness of the significant fair value assumptions.

Purchase Price Allocation for Long-Lived Asset Property Acquisitions

As described in Notes 2 and 3 to the consolidated financial statements, during the year ended December 31, 2022, the Partnership acquired two properties for an aggregate purchase price of $1,316.7 million. Management assesses the fair value of acquired tangible and intangible assets (including land, buildings and improvements, tenant improvements, “above-” and “below-market” leases, leasing costs, acquired in-place leases, other identified intangible assets and assumed liabilities) and allocates the purchase price to the acquired assets and assumed liabilities, including land and buildings as if vacant. Management assesses fair value based on estimated cash flow projections that utilize discount, and/or capitalization rates, and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known and anticipated trends, and market and economic conditions.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the purchase price allocation for long-lived asset property acquisitions, including controls over the assumptions related to discount rates and capitalization rates used to determine the fair value of the assets acquired and the corresponding purchase price allocation. These procedures also included, among others, (i) reading the purchase agreements for all acquisitions, (ii) testing management’s process for developing the fair value estimates of the assets acquired and the corresponding purchase price allocation, (iii) evaluating the appropriateness of management’s discounted cash flow methods, (iv) testing the completeness and accuracy of the underlying data used in the methods, and, (v) evaluating the reasonableness of the significant assumptions used by management, related to the discount rates and capitalization rates by considering industry knowledge and data as well as historical Partnership data and experience. Professionals with specialized skill and knowledge were used to assist in the evaluation of the appropriateness of the discounted cash flow model and reasonableness of the discount rates and capitalization rates assumptions.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

February 27, 2023

We have served as the Partnership’s auditor since 1997.


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEETS (in thousands, except for unit amounts)
	December 31, 2022		December 31, 2021
ASSETS
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $6,789,029 and $6,702,830 at December 31, 2022 and December 31, 2021, respectively)	$	25,022,149	$	23,379,243
Right of use assets - finance leases (amounts related to VIEs of $21,000 and $21,000 at December 31, 2022 and December 31, 2021, respectively)	237,510		237,507
Right of use assets - operating leases	167,351		169,778
Less: accumulated depreciation (amounts related to VIEs of $(1,381,401) and $(1,283,060) at December 31, 2022 and December 31, 2021, respectively)	(6,180,474)		(5,772,018)
Total real estate	19,246,536		18,014,510
Cash and cash equivalents (amounts related to VIEs of $259,658 and $300,937 at December 31, 2022 and December 31, 2021, respectively)	690,333		452,692
Cash held in escrows	46,479		48,466
Investments in securities	32,277		43,632
Tenant and other receivables, net (amounts related to VIEs of $16,521 and $6,824 at December 31, 2022 and December 31, 2021, respectively)	81,389		70,186
Related party note receivable, net	78,576		78,336
Notes receivable, net	—		9,641
Sales-type lease receivable, net	12,811		—
Accrued rental income, net (amounts related to VIEs of $367,138 and $357,395 at December 31, 2022 and December 31, 2021, respectively)	1,276,580		1,226,745
Deferred charges, net (amounts related to VIEs of $176,597 and $174,637 at December 31, 2022 and December 31, 2021, respectively)	733,282		618,798
Prepaid expenses and other assets (amounts related to VIEs of $11,647 and $29,668 at December 31, 2022 and December 31, 2021, respectively)	43,589		57,811
Investments in unconsolidated joint ventures	1,715,911		1,482,997
Total assets	$	23,957,763	$	22,103,814
LIABILITIES AND CAPITAL
Liabilities:
Mortgage notes payable, net (amounts related to VIEs of $3,272,368 and $3,267,914 at December 31, 2022 and December 31, 2021, respectively)	$	3,272,368	$	3,267,914
Unsecured senior notes, net	10,237,968		9,483,695
Unsecured line of credit	—		145,000
Unsecured term loan, net	730,000		—
Lease liabilities - finance leases (amounts related to VIEs of $20,604 and $20,458 at December 31, 2022 and December 31, 2021, respectively)	249,335		244,421
Lease liabilities - operating leases	204,686		204,561
Accounts payable and accrued expenses (amounts related to VIEs of $29,466 and $29,464 at December 31, 2022 and December 31, 2021, respectively)	417,545		320,775
Dividends and distributions payable	170,643		169,859
Accrued interest payable	103,774		94,796

Other liabilities (amounts related to VIEs of $114,232 and $150,131 at December 31, 2022 and December 31, 2021, respectively)	450,918		391,441
Total liabilities	15,837,237		14,322,462
Commitments and contingencies (See Note 8)
Redeemable deferred stock units— 97,853 and 83,073 units outstanding at redemption value at December 31, 2022 and December 31, 2021, respectively	6,613		9,568


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEETS (in thousands, except for unit amounts)
	December 31, 2022		December 31, 2021
Noncontrolling interests:
Redeemable partnership units— 16,531,172 and 16,561,186 common units and 1,679,175 and 1,485,376 long term incentive units outstanding at redemption value at December 31, 2022 and December 31, 2021, respectively	1,280,886		2,078,603
Capital:
Boston Properties Limited Partnership partners’ capital— 1,749,682 and 1,745,914 general partner units and 155,008,185 and 154,798,935 limited partner units outstanding at December 31, 2022 and December 31, 2021, respectively	5,299,428		4,173,290
Accumulated other comprehensive loss	(13,718)		(36,662)
Total partners’ capital	5,285,710		4,136,628
Noncontrolling interests in property partnerships	1,547,317		1,556,553
Total capital	6,833,027		5,693,181
Total liabilities and capital	$	23,957,763	$	22,103,814

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

BOSTON PROPERTIES LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except for per unit amounts)


	Year ended December 31,
		2022		2021		2020
Revenue
Lease		$	2,918,368	$	2,753,014	$	2,646,261
Parking and other		107,225		81,814		70,680
Hotel		39,482		13,609		7,478
Development and management services		28,056		27,697		29,641
Direct reimbursements of payroll and related costs from management services contracts		15,450		12,487		11,626
Total revenue		3,108,581		2,888,621		2,765,686
Expenses
Operating
Rental		1,108,070		1,021,151		1,017,208
Hotel		27,478		12,998		13,136
General and administrative		146,378		151,573		133,112
Payroll and related costs from management services contracts		15,450		12,487		11,626
Transaction costs		2,905		5,036		1,531
Depreciation and amortization		742,293		709,035		676,666
Total expenses		2,042,574		1,912,280		1,853,279
Other income (expense)
Loss from unconsolidated joint ventures		(59,840)		(2,570)		(85,110)
Gains on sales of real estate		441,075		125,198		631,945
Gain on sales-type lease		10,058		—		—
Interest and other income (loss)		11,940		5,704		5,953
Other income - assignment fee		6,624		—		—
Gains (losses) from investments in securities		(6,453)		5,626		5,261
Unrealized loss on non-real estate investment		(150)		—		—
Losses from early extinguishment of debt		—		(45,182)		—
Interest expense		(437,139)		(423,346)		(431,717)
Net income		1,032,122		641,771		1,038,739
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships		(74,857)		(70,806)		(48,260)
Net income attributable to Boston Properties Limited Partnership		957,265		570,965		990,479
Preferred distributions		—		(2,560)		(10,500)
Preferred unit redemption charge		—		(6,412)		—
Net income attributable to Boston Properties Limited Partnership common unitholders		$	957,265	$	561,993	$	979,979
Basic earnings per common unit attributable to Boston Properties Limited Partnership
Net income		$	5.48	$	3.25	$	5.67
Weighted average number of common units outstanding		174,360		173,150		172,643
Diluted earnings per common unit attributable to Boston Properties Limited Partnership
Net income		$	5.47	$	3.24	$	5.67
Weighted average number of common and common equivalent units outstanding		174,771		173,410		172,728

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

BOSTON PROPERTIES LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


	Year ended December 31,
		2022		2021		2020
Net income		$	1,032,122	$	641,771	$	1,038,739
Other comprehensive income:
Effective portion of interest rate contracts		19,396		8,544		(7,848)
Amortization of interest rate contracts (1)		6,707		6,704		6,697
Other comprehensive income (loss)		26,103		15,248		(1,151)
Comprehensive income		1,058,225		657,019		1,037,588
Comprehensive income attributable to noncontrolling interests		(75,433)		(71,382)		(48,836)
Comprehensive income attributable to Boston Properties Limited Partnership		$	982,792	$	585,637	$	988,752

(1)Amounts reclassified from comprehensive income primarily to interest expense within Boston Properties Limited Partnership’s Consolidated Statements of Operations.

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


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CAPITAL AND NONCONTROLLING INTERESTS (in thousands)
	Units		Capital
	General Partner	Limited Partner	Partners’ Capital (General and Limited Partners)		Preferred Units		Accumulated Other Comprehensive Loss		Noncontrolling Interests - Property Partnerships		Total Capital		Noncontrolling Interests - Redeemable Partnership Units

Equity, December 31, 2019	1,727	153,063	$	3,380,175	$	193,623	$	(48,335)	$	1,728,689	$	5,254,152	$	2,468,753
Cumulative effect of a change in accounting principal	—	—	(1,505)		—		—		—		(1,505)		(174)
Net activity from contributions and unearned compensation	1	72	10,062		—		—		—		10,062		39,318
Allocated net income for the period	—	—	882,275		10,500		—		48,260		941,035		97,704
Distributions	—	—	(609,852)		(10,500)		—		—		(620,352)		(68,921)
Conversion of redeemable partnership units	3	853	29,689		—		—		—		29,689		(29,689)
Adjustment to reflect redeemable partnership units at redemption value	—	—	863,795		—		—		—		863,795		(863,795)
Effective portion of interest rate contracts	—	—	—		—		(7,066)		—		(7,066)		(782)
Amortization of interest rate contracts	—	—	—		—		5,511		576		6,087		610
Contributions from noncontrolling interests in property partnerships	—	—	—		—		—		8,219		8,219		—
Distributions to noncontrolling interests in property partnerships	—	—	—		—		—		(58,811)		(58,811)		—
Equity, December 31, 2020	1,731	153,988	4,554,639		193,623		(49,890)		1,726,933		6,425,305		1,643,024
Net activity from contributions and unearned compensation	5	295	26,614		—		—		—		26,614		45,773
Allocated net income for the period	—	—	512,474		2,560		—		70,806		585,840		55,931
Distributions	—	—	(612,461)		(2,560)		—		—		(615,021)		(68,822)
Issuance of operating partnership units for 360 Park Avenue South	—	—	—		—		—		—		—		99,689
Preferred unit redemption	—	—	—		(193,623)		—		—		(193,623)		—
Preferred unit redemption charge	—	—	(6,412)		—		—		—		(6,412)		—
Conversion of redeemable partnership units	10	516	18,386		—		—		—		18,386		(18,386)
Adjustment to reflect redeemable partnership units at redemption value	—	—	(319,950)		—		—		—		(319,950)		319,950
Effective portion of interest rate contracts	—	—	—		—		7,703		—		7,703		841
Amortization of interest rate contracts	—	—	—		—		5,525		576		6,101		603
Contributions from noncontrolling interests in property partnerships	—	—	—		—		—		18,002		18,002		—
Distributions to noncontrolling interests in property partnerships	—	—	—		—		—		(259,764)		(259,764)		—
Equity, December 31, 2021	1,746	154,799	4,173,290		—		(36,662)		1,556,553		5,693,181		2,078,603


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CAPITAL AND NONCONTROLLING INTERESTS (in thousands)
	Units		Capital
	General Partner	Limited Partner	Partners’ Capital (General and Limited Partners)		Preferred Units		Accumulated Other Comprehensive Loss		Noncontrolling Interests - Property Partnerships		Total Capital		Noncontrolling Interests - Redeemable Partnership Units

Net activity from contributions and unearned compensation	1	30	8,291		—		—		—		8,291		46,408
Allocated net income for the period	—	—	860,485		—		—		74,857		935,342		96,780
Distributions	—	—	(614,412)		—		—		—		(614,412)		(71,714)
Conversion of redeemable partnership units	3	179	6,539		—		—		—		6,539		(6,539)
Adjustment to reflect redeemable partnership units at redemption value	—	—	865,235		—		—		—		865,235		(865,235)
Effective portion of interest rate contracts	—	—	—		—		17,435		—		17,435		1,961
Amortization of interest rate contracts	—	—	—		—		5,509		576		6,085		622
Contributions from noncontrolling interests in property partnerships	—	—	—		—		—		849		849		—
Distributions to noncontrolling interests in property partnerships	—	—	—		—		—		(85,518)		(85,518)		—
Equity, December 31, 2022	1,750	155,008	$	5,299,428	$	—	$	(13,718)	$	1,547,317	$	6,833,027	$	1,280,886

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


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
	Year ended December 31,
	2022		2021		2020
Cash flows from operating activities:
Net income	$	1,032,122	$	641,771	$	1,038,739
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	742,293		709,035		676,666
Amortization of right of use assets - operating leases	2,427		3,516		2,234
Non-cash compensation expense	52,026		50,860		44,142
Loss from unconsolidated joint ventures	59,840		2,570		85,110
Distributions of net cash flow from operations of unconsolidated joint ventures	26,827		21,542		31,892
Losses (gains) from investments in securities	6,453		(5,626)		(5,261)
Allowance for current expected credit losses	(224)		(1,207)		1,849
Non-cash portion of interest expense	25,831		23,368		23,384
Settlement of accreted debt discount on redemption of unsecured senior notes	—		(8,500)		—
Losses from early extinguishments of debt	—		45,182		—
Other income - assignment fee	(6,624)		—		—
Gains on sales of real estate	(441,075)		(125,198)		(631,945)
Gain on sales-type lease	(10,058)		—		—
Unrealized loss on non-real estate investment	150		—		—
Change in assets and liabilities:
Tenant and other receivables, net	(7,621)		4,820		22,550
Notes receivable, net	(152)		(545)		(19)
Accrued rental income, net	(98,075)		(101,548)		(97,099)
Prepaid expenses and other assets	20,099		(20,811)		12,488
Lease liabilities - finance leases	—		—		568
Lease liabilities - operating leases	125		(23,599)		1,533
Accounts payable and accrued expenses	(22,777)		20,025		(4,059)
Accrued interest payable	8,989		(10,839)		16,211
Other liabilities	(24,120)		(28,739)		17,629
Tenant leasing costs	(84,057)		(62,850)		(79,772)
Total adjustments	250,277		491,456		118,101
Net cash provided by operating activities	1,282,399		1,133,227		1,156,840
Cash flows from investing activities:
Acquisitions of real estate	(1,320,273)		(222,260)		(137,976)
Construction in progress	(500,273)		(513,878)		(482,507)
Building and other capital improvements	(177,004)		(150,998)		(160,126)
Tenant improvements	(218,685)		(263,952)		(234,423)
Proceeds from sales of real estate	834,770		179,887		519,303
Proceeds from assignment fee	6,624		—		—
Capital contributions to unconsolidated joint ventures	(277,581)		(98,152)		(172,436)
Capital distributions from unconsolidated joint ventures	37,122		122		55,298
Proceeds from sale of investment in unconsolidated joint venture	—		17,789		—
Investment in non-real estate investments	(2,404)		—		—


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
	Year ended December 31,
	2022		2021		2020
Issuance of notes receivable, net	—		—		(9,800)
Proceeds from notes receivable	10,000		10,035		6,397
Investments in securities, net	4,902		1,451		2,551
Net cash used in investing activities	(1,602,802)		(1,039,956)		(613,719)
Cash flows from financing activities:
Proceeds from mortgage notes payable	—		1,201,388		—
Repayments of mortgage notes payable	—		(832,296)		(17,168)
Proceeds from unsecured senior notes	749,557		1,695,996		1,248,125
Redemption of unsecured senior notes	—		(1,841,500)		—
Borrowings on unsecured line of credit	985,000		770,000		265,000
Repayments of unsecured line of credit	(1,130,000)		(625,000)		(265,000)
Borrowings on unsecured term loan	730,000		—		—
Repayment of unsecured term loan	—		(500,000)		—
Redemption of preferred units	—		(200,000)		—
Payments on finance lease obligations	—		1,250		—
Deferred financing costs	(8,460)		(20,757)		(10,416)
Debt issuance costs	—		(16,186)		—
Debt prepayment and extinguishment costs	—		(43,036)		—
Net activity from equity transactions	(352)		24,214		3,277
Distributions	(685,019)		(683,753)		(688,904)
Contributions from noncontrolling interests in property partnerships	849		18,002		8,219
Distributions to noncontrolling interests in property partnerships	(85,518)		(259,764)		(58,811)
Net cash provided by (used in) financing activities	556,057		(1,311,442)		484,322
Net increase (decrease) in cash and cash equivalents and cash held in escrows	235,654		(1,218,171)		1,027,443
Cash and cash equivalents and cash held in escrows, beginning of period	501,158		1,719,329		691,886
Cash and cash equivalents and cash held in escrows, end of period	$	736,812	$	501,158	$	1,719,329

Reconciliation of cash and cash equivalents and cash held in escrows:
Cash and cash equivalents, beginning of period	$	452,692	$	1,668,742	$	644,950
Cash held in escrows, beginning of period	48,466		50,587		46,936
Cash and cash equivalents and cash held in escrows, beginning of period	$	501,158	$	1,719,329	$	691,886

Cash and cash equivalents, end of period	$	690,333	$	452,692	$	1,668,742
Cash held in escrows, end of period	46,479		48,466		50,587
Cash and cash equivalents and cash held in escrows, end of period	$	736,812	$	501,158	$	1,719,329

Supplemental disclosures:
Cash paid for interest	$	449,903	$	465,442	$	433,492
Interest capitalized	$	52,130	$	53,097	$	53,881


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
	Year ended December 31,
	2022		2021		2020
Non-cash investing and financing activities:
Write-off of fully depreciated real estate	$	(119,534)	$	(238,003)	$	(99,494)
Change in real estate included in accounts payable and accrued expenses	$	97,586	$	(25,183)	$	(19,848)

Construction in progress, net deconsolidated	$	(11,316)	$	(299,947)	$	—
Investment in unconsolidated joint ventures recorded upon deconsolidation	$	11,316	$	107,132	$	347,898
Sales-type lease origination	$	13,045	$	—	$	—
Derecognition of assets in exchange for sales-type lease obligation	$	(2,987)	$	—	$	—
Accrued rental income, net deconsolidated	$	—	$	—	$	(4,558)
Tenant leasing costs, net deconsolidated	$	—	$	—	$	(3,462)
Building and other capital improvements, net deconsolidated	$	—	$	—	$	(111,889)
Tenant improvements, net deconsolidated	$	—	$	—	$	(12,331)
Prepaid expense and other assets, net deconsolidated	$	—	$	(5,011)	$	—
Assumption of mortgage notes payable	$	—	$	200,311	$	—
Mortgage notes payable, net deconsolidation	$	—	$	(198,381)	$	—
Issuance of operating partnership units	$	—	$	99,689	$	—
Right-of-use assets obtained in exchange for lease liabilities	$	—	$	26,887	$	—
Distributions declared but not paid	$	170,643	$	169,859	$	171,082
Conversions of redeemable partnership units to partners’ capital	$	6,539	$	18,386	$	29,698
Issuance of restricted securities to employees and non-employee directors	$	48,417	$	44,405	$	42,607

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

BOSTON PROPERTIES, INC. AND BOSTON PROPERTIES LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Organization

BXP is a fully integrated, self-administered and self-managed REIT. BXP is the sole general partner of BPLP, its operating partnership, and at December 31, 2022 owned an approximate 89.6% (89.7% at December 31, 2021) general and limited partnership interest in BPLP. Unless stated otherwise or the context requires, the “Company” refers to BXP and its subsidiaries, including BPLP and its consolidated subsidiaries. Partnership interests in BPLP include:

common units of partnership interest (also referred to as “OP Units”) and
long term incentive units of partnership interest (also referred to as “LTIP Units”)

Unless specifically noted otherwise, all references to OP Units exclude units held by BXP. A holder of an OP Unit may present the OP Unit to BPLP for redemption at any time (subject to restrictions agreed upon at the time of issuance of OP Units to particular holders that may restrict such redemption right for a period of time, generally one year from issuance). Upon presentation of an OP Unit for redemption, BPLP is obligated to redeem the OP Unit for cash equal to the value of a share of common stock of BXP (“Common Stock”). In lieu of such cash redemption, BXP may elect to acquire the OP Unit for one share of Common Stock. Because the number of shares of Common Stock outstanding at all times equals the number of OP Units that BXP owns, one share of Common Stock is generally the economic equivalent of one OP Unit, and the quarterly distribution that may be paid to the holder of an OP Unit equals the quarterly dividend that may be paid to the holder of a share of Common Stock.

The Company uses LTIP Units as a form of time-based, restricted equity compensation and as a form of performance-based equity compensation for employees, and has previously granted LTIP Units in the form of (1) 2012 outperformance plan awards (“2012 OPP Units”) and (2) 2013 - 2022 multi-year, long-term incentive program awards (also referred to as “MYLTIP Units”), each of which, upon the satisfaction of certain performance-based and time-based vesting conditions, is convertible into one OP Unit. The three-year measurement periods for the 2012 OPP Units and the 2013 - 2019 MYLTIP Units have ended and BXP’s total stockholder return (“TSR”) was sufficient for employees to earn and therefore become eligible to vest in a portion of the awards. Unless and until they are earned, the rights, preferences and privileges of the 2020 - 2022 MYLTIP Units differ from other LTIP Units granted to employees (including the 2012 OPP Units and the 2013 - 2019 MYLTIP Units, which have been earned). Therefore, unless specifically noted otherwise, all references to LTIP Units exclude the 2020 - 2022 MYLTIP Units. LTIP Units (including the earned 2012 OPP Units and the earned 2013 - 2019 MYLTIP Units), whether vested or not, will receive the same quarterly per unit distributions as OP Units, which equal per share dividends on Common Stock (See Notes 9, 14 and 16).

Properties

At December 31, 2022, the Company owned or had joint venture interests in a portfolio of 194 commercial real estate properties (the “Properties”) aggregating approximately 54.1 million net rentable square feet of primarily premier workplaces, including 13 properties under construction/redevelopment totaling approximately 3.2 million net rentable square feet. At December 31, 2022, the Properties consisted of:

173 office and life sciences properties (including 10 properties under construction/redevelopment);
14 retail properties (including two properties under construction/redevelopment);
six residential properties (including one property under construction); and
one hotel.

The Company considers premier workplaces to be well-located buildings that are modern structures or have been modernized to compete with newer buildings and professionally managed and maintained. As such, these properties attract high-quality tenants and command upper-tier rental rates.

All references to acres and square footage in the Notes are unaudited.

Basis of Presentation

The accompanying consolidated financial statements are presented using the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. BXP does not have any other significant assets, liabilities or operations, other than its investment in BPLP, nor does it have employees of its

own. BPLP, not BXP, generally executes all significant business relationships other than transactions involving securities of BXP. All majority-owned subsidiaries and joint ventures over which the Company has financial and operating control and variable interest entities (“VIEs”) in which the Company has determined it is the primary beneficiary are included in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation. The Company accounts for all other unconsolidated joint ventures using the equity method of accounting. Accordingly, the Company’s share of the earnings of these joint ventures and companies is included in consolidated net income.

Variable Interest Entities (VIEs)

Consolidated VIEs are those for which the Company is considered to be the primary beneficiary of a VIE. The primary beneficiary is the entity that has a controlling financial interest in the VIE, which is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance and (2) the obligation to absorb losses or the right to receive the returns from the VIE that could potentially be significant to the VIE. The assets of each VIE are only available to satisfy such VIE's respective liabilities. The Company has determined that it is the primary beneficiary for six of the seven entities that are VIEs as of December 31, 2022.

Consolidated Variable Interest Entities

As of December 31, 2022, BXP has identified six consolidated VIEs, including BPLP. Excluding BPLP, the VIEs consisted of the following five in-service properties: 767 Fifth Avenue (the General Motors Building), Times Square Tower, 601 Lexington Avenue, Atlantic Wharf Office Building and 100 Federal Street.

The Company consolidates these VIEs because it is the primary beneficiary. The third parties’ interests in these consolidated entities (excluding BPLP’s interest) are reflected as noncontrolling interests in property partnerships in the accompanying consolidated financial statements (See Note 9).

In addition, BXP’s only significant asset is its investment in BPLP and, consequently, substantially all of BXP’s assets and liabilities are the assets and liabilities of BPLP.

Variable Interest Entities Not Consolidated

As of December 31, 2022, the Company has determined that the Platform 16 Holdings LP joint venture is a VIE. The Company does not consolidate this entity as the Company does not have the power to direct the activities that, when taken together, most significantly impact the VIE’s performance and, therefore, the Company is not considered to be the primary beneficiary.

2. Summary of Significant Accounting Policies

Real Estate

Upon acquisitions of real estate, the Company assesses whether the transaction should be accounted for as an asset acquisition or as a business combination by applying a screen to determine whether the integrated set of assets and activities acquired meets the definition of a business. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. The Company’s acquisitions of real estate or in-substance real estate generally will not meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay.

The Company assesses the fair value of acquired tangible and intangible assets (including land, buildings, tenant improvements, “above-” and “below-market” leases, leasing and assumed financing origination costs, acquired in-place leases, other identified intangible assets and assumed liabilities) and allocates the purchase price to the acquired assets and assumed liabilities, including land and buildings as if vacant. The Company assesses fair value based on estimated cash flow projections that utilize discount and/or capitalization rates that it deems appropriate, as well as available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known and anticipated trends, and market and economic conditions.

The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. The Company also considers an allocation of purchase price of other acquired intangibles, including acquired in-place leases that may have a customer relationship intangible value, including (but not limited to) the nature and extent of the existing relationship with the tenants, the tenants’ credit quality and expectations of lease renewals. Based on its acquisitions to date, the Company’s allocation to customer relationship intangible assets has been immaterial.

The Company records acquired “above-” and “below-market” leases at their fair values (using a discount rate which reflects the risks associated with the leases acquired) equal to the difference between (1) the contractual amounts to be paid pursuant to each in-place lease and (2) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed rate renewal options for below-market leases. Acquired “above-” and “below-market” lease values have been reflected within Prepaid Expenses and Other Assets and Other Liabilities, respectively, in the Company’s Consolidated Balance Sheets. Other intangible assets acquired include amounts for in-place lease values that are based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors to be considered include estimates of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, the Company considers leasing commissions, legal and other related expenses.

Management reviews its long-lived assets for indicators of impairment following the end of each quarter and when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. This evaluation of long-lived assets is dependent on a number of factors, including when there is an event or adverse change in the operating performance of the long-lived asset or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life or hold period. An impairment loss is recognized if the carrying amount of an asset is not recoverable and exceeds its fair value. The evaluation of anticipated cash flows is subjective and is based in part on assumptions regarding anticipated hold periods, future occupancy, future rental rates, future capital requirements, discount rates and capitalization rates that could differ materially from actual results in future periods. Because cash flows on properties considered to be “long-lived assets to be held and used” are considered on an undiscounted basis to determine whether an asset may be impaired, the Company’s established strategy of holding properties over the long term directly decreases the likelihood of recording an impairment loss. If the Company’s hold strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized, and such loss could be material. If the Company determines that an impairment has occurred, the affected assets must be reduced to their fair value.

Guidance in Accounting Standards Codification (“ASC”) 360 “Property Plant and Equipment” requires that qualifying assets and liabilities and the results of operations that have been sold, or otherwise qualify as “held for sale,” be presented as discontinued operations in all periods presented if the property operations are expected to be eliminated and the Company will not have significant continuing involvement following the sale. Discontinued operations presentation applies only to disposals representing a strategic shift that has (or will have) a major effect on an entity’s operations and financial results (e.g., a disposal of a major geographical area, a major line of business, a major equity method investment or other major parts of an entity). The components of the property’s net income that are reflected as discontinued operations include the net gain (or loss) upon the disposition of the property held for sale, operating results, depreciation and interest expense (if the property is subject to a secured loan). The Company generally considers assets to be “held for sale” when the transaction has been approved by BXP’s Board of Directors, or a committee thereof, and there are no known significant contingencies relating to the sale, such that a sale of the property within one year is considered probable. Following the classification of a property as “held for sale,” no further depreciation is recorded on the assets, and the asset is written down to the lower of carrying value or fair market value, less cost to sell.

Real estate is stated at depreciated cost. A variety of costs are incurred in the acquisition, development and leasing of properties. The cost of buildings and improvements includes the purchase price of property, legal fees and other acquisition costs. The Company capitalizes acquisition costs that it incurs to effect an asset acquisition and expenses acquisition costs that it incurs to effect a business combination, including legal, due diligence and other closing related costs. Costs directly related to the development of properties are capitalized. Capitalized development costs include interest, internal wages, property taxes, insurance, and other project costs incurred during the period of development. After the determination is made to capitalize a cost, it is allocated to the specific

component of the project that benefited from the investment. Determination of when a development project commences and capitalization begins, and when a development project is substantially complete and held available for occupancy and capitalization must cease, involves a degree of judgment. The Company’s capitalization policy on development properties follows the guidance in ASC 835-20 “Capitalization of Interest” and ASC 970 “Real Estate-General.” The costs of land and buildings under development include specifically identifiable costs.

Capitalized costs include pre-construction costs necessary to the development of the property, development costs (including architectural, engineering and design costs), construction costs, interest costs, real estate taxes, salaries and related costs and other costs incurred during the period of development. The Company begins the capitalization of costs during the pre-construction period, which it defines as activities that are necessary for the development of the property. The Company considers a construction project as substantially complete and held available for occupancy upon the completion of tenant improvements, but no later than one year from cessation of major construction activity. The Company ceases capitalization on the portion (1) substantially completed, (2) occupied or held available for occupancy, and capitalizes only those costs associated with the portion under construction or (3) if activities necessary for the development of the property have been suspended. Interest costs capitalized for the years ended December 31, 2022, 2021 and 2020 were approximately $52.1 million, $53.1 million and $53.9 million, respectively. Salaries and related costs capitalized for the years ended December 31, 2022, 2021 and 2020 were approximately $16.1 million, $13.7 million and $12.9 million, respectively.

Expenditures for repairs and maintenance are charged to operations as incurred. Significant betterments are capitalized. When assets are sold or retired, their costs and related accumulated depreciation are removed from the accounts with the resulting gains or losses reflected in net income or loss for the period.

The Company computes depreciation and amortization on properties using the straight-line method based on estimated useful asset lives. The Company allocates the acquisition cost of real estate to its components and depreciates or amortizes these assets (or liabilities) over their useful lives. The amortization of acquired “above-” and “below-market” leases and acquired in-place leases is recorded as an adjustment to revenue and depreciation and amortization, respectively, in the Consolidated Statements of Operations.

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:


Land improvements						25 to 40 years
Buildings and improvements						10 to 40 years
Tenant improvements						Shorter of useful life or terms of related lease
Furniture, fixtures, and equipment						3 to 7 years

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and investments with maturities of three months or less from the date of purchase. The majority of the Company’s cash and cash equivalents are held at major commercial banks which may at times exceed the Federal Deposit Insurance Corporation limit of $250,000.

Cash Held in Escrows

Escrows include amounts established pursuant to various agreements for security deposits, property taxes, insurance and other costs. Escrows also include cash held by qualified intermediaries for possible investments in like-kind exchanges in accordance with Section 1031 of the Internal Revenue Code, as amended (the “Code”), in connection with sales of the Company’s properties.

Investments in Securities

The Company accounts for investments in equity securities at fair value, with gains or losses resulting from changes in fair value recognized currently in earnings. The Company maintains deferred compensation plans that are designed to allow officers and non-employee directors of BXP to defer a portion of the officer’s current income or the non-employee director’s current compensation on a pre-tax basis and receive a tax-deferred return on these deferrals based on the performance of specific investments selected by the officer or non-employee director. The Company’s obligation under the plans is that of an unsecured promise to pay the deferred compensation to the plan participants in the future. At December 31, 2022 and 2021, the Company had maintained approximately $32.3 million and $43.6 million, respectively, in separate accounts, which are not restricted as to their use. The Company recognized gains (losses) of approximately $(6.5) million, $5.6 million and $5.3 million on its investments in the

accounts associated with the Company’s deferred compensation plans during the years ended December 31, 2022, 2021 and 2020, respectively.

Tenant and Other Receivables

Tenant and other accounts receivable, other than accrued rents receivable, are expected to be collected within one year.

Notes Receivable

The Company accounts for notes receivable at their unamortized cost, net of any unamortized deferred fees or costs, premiums or discounts and an allowance for loan losses. Loan fees and direct costs associated with loans originated by the Company are deferred and amortized over the term of the note as interest income.

Deferred Charges

Deferred charges include leasing costs and certain financing fees. Leasing costs include acquired intangible in-place lease values and direct and incremental fees and costs incurred in the successful negotiation of leases, including brokerage and other costs which have been deferred and are being amortized on a straight-line basis over the terms of the respective leases. Unamortized leasing costs are charged to expense upon the early termination of the lease. Fully amortized deferred leasing costs are removed from the books upon the expiration of the lease. Financing fees included in deferred charges consist of external fees and costs incurred to obtain the Company’s revolving facility and if applicable, unsecured term loan and construction financing arrangements where there are not sufficient amounts outstanding to report the fees net of the debt liability. Such financing costs have been deferred and are being amortized over the terms of the respective financing and included within interest expense. Unamortized financing costs are charged to expense upon the early repayment or significant modification of the financing. Fully amortized deferred financing costs are removed from the books upon the maturity of the debt.

External fees and costs incurred to obtain mortgage financings and unsecured senior notes have been deferred and are presented as direct deductions from the carrying amounts of the corresponding debt liability. Such financing costs are being amortized over the terms of the respective financing and included within interest expense. Unamortized financing costs are charged to expense upon the early repayment or significant modification of the financing.

Non-Real Estate Investments

The Company measures its investments in non-real estate investments, which are primarily environmentally focused investment funds, at the readily determinable fair value of the investment. Changes in the fair value of these non-real estate investments are included in unrealized gain (loss) on non-real estate investments on the Consolidated Statements of Operations. The Company’s investment in non-real estate investments is shown within Prepaid and Other Assets in the Consolidated Balance Sheet. The Company recognized a net unrealized loss of approximately $0.2 million for the year ended December 31, 2022 due to the observable changes in fair value. Prior to the year ended December 31, 2022, the Company had not invested in non-real estate investments.

Investments in Unconsolidated Joint Ventures

The Company consolidates VIEs in which it is considered to be the primary beneficiary. VIEs are entities in which the equity investors do not have sufficient equity at risk to finance their endeavors without additional financial support or that the holders of the equity investment at risk do not have substantive participating rights. The primary beneficiary is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the variable interest entity’s performance, and (2) the obligation to absorb losses and the right to receive the returns from the variable interest entity that could potentially be significant to the VIE. For ventures that are not VIEs, the Company consolidates entities for which it has significant decision making control over the ventures’ operations. The Company’s judgment with respect to its level of influence or control of an entity involves the consideration of various factors including the form of the Company’s ownership interest, its representation in the entity’s governance, the size of its investment (including loans), estimates of future cash flows, its ability to participate in policy making decisions and the rights of the other investors to participate in the decision making process and to replace the Company as manager and/or liquidate the venture, if applicable. The Company’s assessment of its influence or control over an entity affects the presentation of these investments in the Company’s consolidated financial statements. In addition to evaluating control rights,

the Company consolidates entities in which the outside partner has no substantive kick-out rights to remove the Company as the managing member.

Accounts of the consolidated entity are included in the accounts of the Company and the noncontrolling interest is reflected on the Consolidated Balance Sheets as a component of equity or in temporary equity between liabilities and equity. Investments in unconsolidated joint ventures are recorded initially at cost, and subsequently adjusted for equity in earnings and cash contributions and distributions. Any difference between the carrying amount of these investments on the balance sheet and the underlying equity in net assets is amortized as an adjustment to equity in earnings of unconsolidated joint ventures over the life of the related asset. Under the equity method of accounting, the net equity investment of the Company is reflected within the Consolidated Balance Sheets, and the Company’s share of net income or loss from the joint ventures is included within the Consolidated Statements of Operations. The joint venture agreements may designate different percentage allocations among investors for profits and losses; however, the Company’s recognition of joint venture income or loss generally follows the joint venture’s distribution priorities, which may change upon the achievement of certain investment return thresholds. The Company may account for cash distributions in excess of its investment in an unconsolidated joint venture as income when the Company is not the general partner in a limited partnership and when the Company has neither the requirement nor the intent to provide financial support to the joint venture. The Company classifies distributions received from equity method investees within its Consolidated Statements of Cash Flows using the nature of the distribution approach, which classifies the distributions received on the basis of the nature of the activity or activities of the investee that generated the distribution as either a return on investment (classified as cash inflows from operating activities) or a return of investment (classified as cash inflows from investing activities). The Company’s investments in unconsolidated joint ventures are reviewed for indicators of impairment on a quarterly basis and the Company records impairment charges when events or circumstances change indicating that a decline in the fair values below the carrying amounts has occurred and such decline is other-than-temporary. This evaluation of the investments in unconsolidated joint ventures is dependent on a number of factors, including the performance of each investment and market conditions. The Company will record an impairment charge if it determines that a decline in the fair value below the carrying amount of an investment in an unconsolidated joint venture is other-than-temporary. The fair value is calculated using discounted cash flows which is subjective and considers assumptions regarding future occupancy, future rental rates, future capital requirements, debt interest rates and availability, discount rates and capitalization rates that could differ materially from actual results in future periods.

To the extent that the Company contributed assets to a joint venture, the Company’s investment in the joint venture was recorded at the Company’s cost basis in the assets that were contributed to the joint venture. To the extent that the Company’s cost basis is different than the basis reflected at the joint venture level, the basis difference is amortized over the life of the related asset and included in the Company’s share of equity in net income of the joint venture. In accordance with the provisions of ASC 610-20 “Gains and Losses from the Derecognition of Nonfinancial Assets” (“ASC 610-20”), the Company will recognize a full gain on both the retained and sold portions of real estate contributed or sold to a joint venture by recognizing its new equity method investment interest at fair value.

The combined summarized financial information of the unconsolidated joint ventures is disclosed in Note 6.

Revenue Recognition

In general, the Company commences lease/rental revenue recognition when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use. Contractual lease/rental revenue 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 approximately $108.0 million, $104.3 million and $104.9 million for the years ended December 31, 2022, 2021 and 2020, respectively, as the revenue recorded exceeded amounts billed. Accrued rental income, as reported on the Consolidated Balance Sheets, represents cumulative lease/rental income earned in excess of rent payments received pursuant to the terms of the individual lease agreements.

The Company must estimate the collectability of its accrued rent and accounts receivable balances related to lease revenue. When evaluating the collectability of tenants’ accrued rent and accounts receivable balances, management considers tenants’ creditworthiness, current economic trends and changes in tenants’ payment patterns, on a lease-by-lease basis. The Company writes-off the tenant’s receivable balance, including the accrued rent receivable, if the Company considers the balances no longer probable of collection. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected recovery of pre-petition and post-petition claims. If the Company deems the balances no longer probable of collection, the Company writes

them off and ceases recognizing lease income, including straight-line rent, unless cash is received (See Note 4). Following a write-off, if (1) the Company subsequently determines that it is probable it will collect substantially all the remaining lessee’s lease payments under the lease term and (2) the lease has not been modified since the write-off, the Company will then reinstate the accrued rent and accounts receivable write-offs, adjusting for the amount related to the period when the lease payments were considered not probable of collection. If the Company’s estimates of collectability differs from the cash received, then the timing and amount of the Company’s reported revenue could be impacted. The credit risk is mitigated by the high quality of the Company’s existing tenant base, reviews of prospective tenants’ risk profiles prior to lease execution and consistent monitoring of the Company’s portfolio to identify potential problem tenants.

The Company recognizes acquired in-place “above-” and “below-market” leases at their fair values as rental revenue over the original term of the respective leases. The impact of the acquired in-place “above-” and “below-market” leases increased revenue by approximately $9.1 million, $4.2 million and $6.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. The following table summarizes the scheduled amortization of the Company’s acquired “above-” and “below-market” lease intangibles for each of the five succeeding years (in thousands).


	Acquired Above-Market Lease Intangibles		Acquired Below-Market Lease Intangibles
2023	$	1,306	$	13,439
2024	401		9,811
2025	389		9,768
2026	389		8,647
2027	389		5,477

Recoveries from tenants, consisting of amounts due from tenants for common area maintenance, real estate taxes and other recoverable costs, are recognized as revenue in the period during which the expenses are incurred (See “Leases” ). The Company receives reimbursements of payroll and payroll related costs from unconsolidated joint venture entities and third party property owners in connection with management services contracts which the Company reflects on a gross basis instead of on a net basis as the Company has determined that it is the principal and not the agent under these arrangements in accordance with the guidance in ASC 606 “Revenue from Contracts with Customers” (“ASC 606”).

The Company’s parking revenue is derived primarily from monthly and transient daily parking. In addition, the Company has certain lease arrangements for parking accounted for under the guidance in ASC 842 “Leases” (“ASC 842”). The monthly and transient daily parking revenue falls within the scope of ASC 606 and is accounted for at the point in time when control of the goods or services transfers to the customer and the Company’s performance obligation is satisfied.

The Company’s hotel revenue is derived from room rentals and other sources such as charges to guests for telephone service, movie and vending commissions, meeting and banquet room revenue and laundry services. Hotel revenue is recognized as the hotel rooms are occupied and the services are rendered to the hotel customers.

The Company earns management and development fees. Development and management services revenue is earned from unconsolidated joint venture entities and third-party property owners. The Company determined that the performance obligations associated with its development services contracts are satisfied over time and that the Company would recognize its development services revenue under the output method evenly over time from the development commencement date through the substantial completion date of the development management services project due to the stand-ready nature of the contracts. Significant judgments impacting the amount and timing of revenue recognized from the Company’s development services contracts include estimates of total development project costs from which the fees are typically derived and estimates of the period of time until substantial completion of the development project, the period of time over which the development services are required to be performed. The Company recognizes development fees earned from unconsolidated joint venture projects equal to its cost plus profit to the extent of the third party partners’ ownership interest. Property management fees are recorded and earned based on a percentage of collected rents at the properties under management, and not on a straight-line basis, because such fees are contingent upon the collection of rents.

Gains on sales of real estate are recognized pursuant to the provisions included in ASC 610-20. Under ASC 610-20, the Company must first determine whether the transaction is a sale to a customer or non-customer. The

Company typically sells real estate on a selective basis and not within the ordinary course of its business and therefore expects that its sale transactions will not be contracts with customers. The Company next determines whether it has a controlling financial interest in the property after the sale, consistent with the consolidation model in ASC 810 “Consolidation” (“ASC 810”). If the Company determines that it does not have a controlling financial interest in the real estate, it evaluates whether a contract exists under ASC 606 and whether the buyer has obtained control of the asset that was sold. The Company recognizes a full gain on sale of real estate when the derecognition criteria under ASC 610-20 have been met.

Leases

Lessee

For leases in which the Company is the lessee (generally ground leases), in accordance with ASC 842 the Company recognizes a right-of-use asset and a lease liability. The Company made the policy election to not apply the requirements of ASC 842 to short-term leases. This policy election is made by class of underlying assets and as described below, the Company considers real estate to be a class of underlying assets, and will not be further delineating it into specific uses of the real estate asset as the risk profiles are similar in nature. The Company will recognize the lease payments it pays in net income on a straight-line basis over the lease term.

The lease liability is equal to the present value of the minimum lease payments in accordance with ASC 842. The Company will use its incremental borrowing rate (“IBR”) to determine the net present value of the minimum lease payments. In order to determine the IBR, the Company utilized a market-based approach to estimate the incremental borrowing rate for each individual lease. The approach required significant judgment. Therefore, the Company utilized different data sets to estimate base IBRs via an analysis of the following weighted-components:

the interpolated rates from yields on outstanding U.S. Treasury issuances for up to 30 years and for years 31 and beyond, longer-term publicly traded educational institution debt issued by high credit quality educational institutions with maturity dates exceeding 31 years,
observable mortgage rates spread over U.S. Treasury issuances, and
unlevered property yields and discount rates.

The Company then applied adjustments to account for considerations related to term and interpolated the IBR.

Lessor

Operating Leases

The Company leases primarily premier workplaces, including office, life sciences, retail and residential space to tenants. These leases may contain extension and termination options that are predominately at the sole discretion of the tenant, provided certain conditions are satisfied. In a few instances, the leases also contain purchase options, which would be exercisable at fair market value. Also, certain of the Company’s leases include rental payments that are based on a percentage of the tenant sales in excess of contractual amounts.

Per ASC 842, lessors do not need to separate nonlease components from the associated lease component if certain criteria stated above are met for each class of underlying assets. The guidance in ASC 842 defines “underlying asset” as “an asset that is the subject of a lease for which a right to use that asset has been conveyed to a lessee. The underlying asset could be a physically distinct portion of a single asset.” Based on the above guidance, the Company considers real estate assets as a class of underlying assets and will not be further delineating it into specific uses of the real estate asset as the risk profiles are similar in nature.

Lease components are elements of an arrangement that provide the customer with the right to use an identified asset. Nonlease components are distinct elements of a contract that are not related to securing the use of the leased asset and revenue is recognized in accordance with ASC 606. The Company considers common area maintenance (CAM) and service income associated with tenant work orders to be nonlease components because they represent delivery of a separate service but are not considered a cost of securing the identified asset. In the case of the Company’s business, the identified asset would be the leased real estate (office, life sciences, retail or residential).

The Company assessed and concluded that the timing and pattern of transfer for nonlease components and the associated lease component are the same. The Company determined that the predominant component was the lease component and as such its leases will continue to qualify as operating leases and the Company has made a

policy election to account for and present the lease component and the nonlease component as a single component in the revenue section of the Consolidated Statements of Operations labeled Lease.

Recoveries from tenants, consisting of amounts due from tenants for common area maintenance, real estate taxes and other recoverable costs, are recognized as revenue in the period during which the expenses are incurred. The Company recognizes these reimbursements on a gross basis, as the Company obtains control of the goods and services before they are transferred to the tenant.

In addition, in accordance with ASC 842, lessors will only capitalize incremental direct leasing costs.

Sales-Type Leases

Sales-type lease receivables are recognized when a lease qualifies as a sales-type lease. The sales-type lease receivable is initially measured at the present value of the fixed and determinable lease payments, including any guaranteed or unguaranteed residual value of the asset at the end of the lease, discounted at the rate implicit in the lease. The Company evaluates its sales-type lease receivable for impairment under the current expected credit loss standard. Interest income is recognized under the effective interest method. The effective interest method produces a constant yield on the sales-type lease receivable over the term of the lease. Income from these leases are classified as Lease Revenue within the Consolidated Statement of Operations.

Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income available to common shareholders, as adjusted for undistributed earnings (if any) of certain securities issued by BPLP, by the weighted average number of shares of Common Stock outstanding during the year. Diluted EPS reflects the potential dilution that could occur from shares issuable in connection with awards under stock-based compensation plans, including upon the exercise of stock options, and securities of BPLP that are exchangeable for Common Stock.

Earnings Per Common Unit

Basic earnings per common unit is computed by dividing net income available to common unitholders, as adjusted for undistributed earnings (if any) of certain securities issued by BPLP, by the weighted average number of common units outstanding during the year. Diluted earnings per common unit reflects the potential dilution that could occur from units issuable in connection with awards under BXP’s stock-based compensation plans, including upon the exercise of stock options, and conversion of preferred units of BPLP.

Recurring Fair Value of Financial Instruments

The Company follows the authoritative guidance for fair value measurements when valuing its financial instruments for disclosure purposes. The table below presents for December 31, 2022 and 2021, the financial instruments that are being valued for disclosure purposes as well as the Level at which they are categorized as defined in ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”).


Financial Instrument			Level
Unsecured senior notes (1)			Level 1
Related party note receivable			Level 3
Notes receivable			Level 3
Sales-type lease receivable			Level 3
Mortgage notes payable			Level 3
Unsecured line of credit			Level 3
Unsecured term loan			Level 3

(1)If trading volume for the period is low, the valuation could be categorized as Level 2.

Because the Company’s valuations of its financial instruments are based on the above Levels and involve the use of estimates, the actual fair values of its financial instruments may differ materially from those estimates.

In addition, the Company’s estimated fair values for these instruments as of the end of the applicable reporting period are not projections of, nor necessarily indicative of, estimated or actual fair values in future reporting periods.

The following table presents the aggregate carrying value of the Company’s related party note receivable, net, notes receivable, net, sales-type lease receivable, net, mortgage notes payable, net, unsecured senior notes, net, unsecured line of credit and unsecured term loan, net and the Company’s corresponding estimate of fair value as of December 31, 2022 and December 31, 2021 (in thousands):


	December 31, 2022				December 31, 2021
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Related party note receivable, net	$	78,576	$	79,220	$	78,336	$	82,867
Note receivable, net	—		—		9,641		10,000
Sales-type lease receivable, net	12,811		13,045		—		—
Total	$	91,387	$	92,265	$	87,977	$	92,867

Mortgage notes payable, net	$	3,272,368	$	2,744,479	$	3,267,914	$	3,395,569
Unsecured senior notes, net	10,237,968		9,135,512		9,483,695		9,966,591
Unsecured line of credit	—		—		145,000		145,317
Unsecured term loan, net	730,000		730,000		—		—
Total	$	14,240,336	$	12,609,991	$	12,896,609	$	13,507,477

The Company uses interest rate swap agreements to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. Although the Company determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. The Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Derivative Instruments and Hedging Activities

Derivative instruments and hedging activities require management to make judgments on the nature of its derivatives and their effectiveness as hedges. These judgments determine if the changes in fair value of the derivative instruments are reported in the Consolidated Statements of Operations as a component of net income or as a component of comprehensive income and as a component of equity on the Consolidated Balance Sheets. While management believes its judgments are reasonable, a change in a derivative’s effectiveness as a hedge could materially affect expenses, net income and equity. The Company accounts for both the effective and ineffective portions of changes in the fair value of a derivative in other comprehensive income (loss) and subsequently reclassifies the fair value of the derivative to earnings over the term that the hedged transaction affects earnings and in the same line item as the hedged transaction within the statements of operations.

During the year ended December 31, 2020, the Company elected to apply hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. The Company’s application of this expedient preserves the presentation of derivatives consistent with past presentation.

Stock-Based Employee Compensation Plans

At December 31, 2022, the Company had a stock-based employee compensation plan. The Company accounts for the plan under the guidance in ASC 718 “Compensation – Stock Compensation” (“ASC 718”), which revised the fair value based method of accounting for share-based payment liabilities, forfeitures and modifications of stock-based awards and clarified previous guidance in several areas, including measuring fair value, classifying an award as equity or as a liability and attributing compensation cost to reporting periods.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates include such items as depreciation and allowances for doubtful accounts. Actual results could differ from those estimates.

The Company bases its estimates on historical experience and on various other assumptions that it considers to be reasonable under the circumstances, including the impact of extraordinary events such as COVID-19, the results of which form the basis for making significant judgments about the carrying values of assets and liabilities, assessments of future collectability, and other areas of the financial statements that are impacted by the use of estimates. Actual results may differ from these estimates under different assumptions or conditions.

BXP

Equity Offering Costs

Underwriting commissions and offering costs have been reflected as a reduction of additional paid-in capital.

Treasury Stock

BXP’s share repurchases are reflected as treasury stock utilizing the cost method of accounting and are presented as a reduction to consolidated stockholders’ equity.

Dividends

Earnings and profits, which determine the taxability of dividends to stockholders, will differ from income reported for financial reporting purposes due to the differences for federal income tax purposes in the treatment of gains/losses on the sale of real property, revenue and expense recognition, compensation expense, and in the estimated useful lives and basis used to compute depreciation.

The tax treatment of common dividends per share for federal income tax purposes is as follows:


	For the year ended December 31,
	2022					2021					2020
	Per Share			%		Per Share			%		Per Share			%
Ordinary income	$	3.42		86.60	%	$	2.90		73.86	%	$	2.52		64.91	%
Capital gain income	0.53			13.40	%	0.57			14.57	%	0.99			25.49	%
Return of capital	—			—	%	0.45			11.57	%	0.37			9.60	%
Total	$	3.95	(1)	100.00	%	$	3.92	(2)	100.00	%	$	3.88	(3)	100.00	%

(1)The fourth quarter 2022 regular quarterly dividend was $0.98 per common share, of which approximately $0.03 per common share was allocable to 2022 and approximately $0.95 per common share was allocable to 2023.

(2)The fourth quarter 2021 regular quarterly dividend was $0.98 per common share, all of which was allocable to 2022.

(3)The fourth quarter 2020 regular quarterly dividend was $0.98 per common share, all of which was allocable to 2021.

Income Taxes

BXP has elected to be treated as a REIT under Sections 856 through 860 of the Code, commencing with its taxable year ended December 31, 1997. As a result, it generally will not be subject to federal corporate income tax on its taxable income that is distributed to its stockholders. A REIT is subject to a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its annual taxable income (with certain adjustments). BXP’s policy is to distribute at least 100% of its taxable income. Accordingly, the only provision for federal income taxes in the accompanying consolidated financial statements relates to BXP’s consolidated taxable REIT subsidiaries. BXP’s taxable REIT subsidiaries did not have significant tax provisions or deferred income tax items. BXP has no uncertain tax positions recognized as of December 31, 2022 and 2021. At December 31, 2022, BXP’s tax returns for the years 2019 forward remain subject to examination by the major tax jurisdictions under the statute of limitations.

The Company owns a hotel property that it leases to one of its taxable REIT subsidiaries and that is managed by Marriott International, Inc. The hotel taxable REIT subsidiary, a wholly owned subsidiary of BPLP, is the lessee pursuant to the lease for the hotel property. As lessor, BPLP is entitled to a percentage of gross receipts from the hotel property. Marriott International, Inc. continues to manage the hotel property under the Marriott name and under terms of a management agreement. The hotel taxable REIT subsidiary is subject to tax at the federal and state level and, accordingly, if applicable, BXP has recorded a tax provision in its Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020.

Certain entities included in BXP’s consolidated financial statements are subject to certain state and local taxes. These taxes are recorded as operating expenses in the accompanying consolidated financial statements.

BPLP

Income Taxes

The partners are required to report their respective share of BPLP’s taxable income or loss on their respective tax returns and are liable for any related taxes thereon. Accordingly, the only provision for federal income taxes in the accompanying consolidated financial statements relates to BPLP’s consolidated taxable REIT subsidiaries. BPLP’s taxable REIT subsidiaries did not have significant tax provisions or deferred income tax items. BPLP has no uncertain tax positions recognized as of December 31, 2022 and 2021. At December 31, 2022, BPLP’s tax returns for the years 2019 forward remain subject to examination by the major tax jurisdictions under the statute of limitations.

The Company owns a hotel property which is managed through a taxable REIT subsidiary. The hotel taxable REIT subsidiary, a wholly owned subsidiary of BPLP, is the lessee pursuant to the lease for the hotel property. As lessor, BPLP is entitled to a percentage of gross receipts from the hotel property. Marriott International, Inc. continues to manage the hotel property under the Marriott name and under terms of a management agreement. The hotel taxable REIT subsidiary is subject to tax at the federal and state level and, accordingly, BPLP has, if applicable, recorded a tax provision in its Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020.

Certain entities included in BPLP’s consolidated financial statements are subject to certain state and local taxes. These taxes are recorded as operating expenses in the accompanying consolidated financial statements.

3. Real Estate

BXP

Real estate consisted of the following at December 31, 2022 and December 31, 2021 (in thousands):


	December 31, 2022		December 31, 2021
Land	$	5,189,811	$	5,061,169
Right of use assets - finance leases	237,510		237,507
Right of use assets - operating leases	167,351		169,778
Land held for future development (1)	721,501		560,355
Buildings and improvements	15,820,724		14,291,214
Tenant improvements	3,200,743		2,894,025
Furniture, fixtures and equipment	50,310		51,695
Construction in progress	406,574		894,172
Total	25,794,524		24,159,915
Less: Accumulated depreciation	(6,298,082)		(5,883,961)
	$	19,496,442	$	18,275,954

(1)Includes pre-development costs.

BPLP

Real estate consisted of the following at December 31, 2022 and December 31, 2021 (in thousands):


	December 31, 2022		December 31, 2021
Land	$	5,095,102	$	4,964,986
Right of use assets - finance leases	237,510		237,507
Right of use assets - operating leases	167,351		169,778
Land held for future development (1)	721,501		560,355
Buildings and improvements	15,547,919		14,014,010
Tenant improvements	3,200,743		2,894,025
Furniture, fixtures and equipment	50,310		51,695
Construction in progress	406,574		894,172
Total	25,427,010		23,786,528
Less: Accumulated depreciation	(6,180,474)		(5,772,018)
	$	19,246,536	$	18,014,510

(1)Includes pre-development costs.

Acquisitions

On May 17, 2022, the Company completed the acquisition of Madison Centre in Seattle, Washington for a net purchase price, including transaction costs, of approximately $724.3 million. The acquisition was completed using the proceeds from BPLP’s $730.0 million unsecured term loan (See Note 7). Madison Centre is an approximately 755,000 net rentable square foot, 37-story, LEED-Platinum certified, premier workplace. The following table summarizes the allocation of the purchase price, including transaction costs, of Madison Centre at the date of acquisition (in thousands):


Land	$	104,641
Building and improvements	505,766
Tenant improvements	58,570
In-place lease intangibles	74,598
Above-market lease intangibles	3,794
Below-market lease intangibles	(23,114)
Net assets acquired	$	724,255

On September 16, 2022, the Company acquired 125 Broadway in Cambridge, Massachusetts for a net purchase price, including transaction costs, of approximately $592.4 million. The acquisition was completed with available cash and borrowings under BPLP’s unsecured credit facility. 125 Broadway is a 271,000 net rentable square foot, six-story, laboratory/life sciences property. The following table summarizes the allocation of the purchase price, including transaction costs, of 125 Broadway at the date of acquisition (in thousands):


Land	$	126,364
Building and improvements	403,588
Tenant improvements	30,074
In-place lease intangibles	49,137
Below-market lease intangibles	(16,725)
Net assets acquired	$	592,438

The following table summarizes the estimated annual amortization of the acquired in-place lease intangibles and the acquired above- and below-market lease intangibles for Madison Centre and 125 Broadway as of their acquisition dates for each of the five succeeding fiscal years (in thousands):


	Acquired In-Place Lease Intangibles	Acquired Above-Market Lease Intangibles	Acquired Below-Market Lease Intangible
2023	20,940	1,098	6,417
2024	19,582	254	6,386
2025	19,510	254	6,373
2026	19,046	254	6,185
2027	17,901	254	5,780

125 Broadway contributed approximately $11.4 million of revenue and approximately $3.3 million of net income to the Company for the period from September 16, 2022 through December 31, 2022. Madison Centre contributed approximately $32.0 million of revenue and approximately $2.1 million of net income to the Company for the period from May 17, 2022 through December 31, 2022.

Dispositions

On March 31, 2022, the Company completed the sale of 195 West Street located in Waltham, Massachusetts for a gross sale price of $37.7 million. Net cash proceeds totaled approximately $35.4 million, resulting in a gain on sale of real estate totaling approximately $22.7 million for BXP and approximately $23.4 million for BPLP. 195 West Street is an approximately 63,500 net rentable square foot office property. 195 West Street contributed approximately $0.4 million of net income to the Company from January 1, 2022 through March 30, 2022 and contributed approximately $0.5 million and $(0.8) million of net income (loss) to the Company for the years ended December 31, 2021 and 2020, respectively.

On April 19, 2021, the Company entered into an agreement to acquire 11251 Roger Bacon Drive in Reston, Virginia for an aggregate purchase price of approximately $5.6 million. On April 7, 2022, the Company executed an agreement to assign its right to acquire 11251 Roger Bacon Drive to a third party for an assignment fee of approximately $6.9 million. Net cash proceeds totaled approximately $6.6 million and are reflected as Other income - assignment fee in the Company's Consolidated Statements of Operations. 11251 Roger Bacon Drive is an approximately 65,000 square foot office building situated on approximately 2.6 acres.

On June 15, 2022, the Company completed the sale of its suburban Virginia 95 Office Park properties located in Springfield, Virginia for an aggregate gross sale price of $127.5 million. Net cash proceeds totaled approximately $121.9 million, resulting in a gain on sale of real estate totaling approximately $96.2 million for BXP and approximately $99.5 million for BPLP. Virginia 95 Office Park consists of eleven office/flex properties aggregating approximately 733,000 net rentable square feet. Virginia 95 Office Park contributed approximately $2.3 million of net income to the Company from January 1, 2022 through June 14, 2022 and contributed approximately $7.0 million and $7.8 million of net income to the Company for the years ended December 31, 2021 and 2020, respectively.

On August 30, 2022, the Company completed the sale of 601 Massachusetts Avenue located in Washington, DC for a gross sale price of $531.0 million. Net cash proceeds totaled approximately $512.3 million, resulting in a gain on sale of real estate of approximately $237.4 million for BXP and approximately $237.5 million for BPLP. 601 Massachusetts Avenue is an approximately 479,000 net rentable square foot premier workplace. 601 Massachusetts Avenue contributed approximately $14.9 million of net income to the Company for the period from January 1, 2022 through August 29, 2022, respectively, and contributed approximately $22.4 million and $21.8 million of net income to the Company for the years ended December 31, 2021 and 2020, respectively.

On September 15, 2022, the Company completed the sale of two parcels of land located in Loudoun County, Virginia for an aggregate gross sale price of $27.0 million. Net cash proceeds totaled approximately $25.6 million, resulting in a gain on sale of real estate totaling approximately $24.4 million for BXP and BPLP.

On November 8, 2022, the Company completed the sale of the residential component of The Avant at Reston Town Center, located in Reston, Virginia, for a gross sale price of $141.0 million. Net cash proceeds totaled approximately $139.6 million, resulting in a gain on sale of real estate of approximately $55.6 million for BXP and BPLP. The Avant at Reston Town Center is a 15-story, 359-unit, luxury multifamily building consisting of approximately 329,000 net rentable square feet, excluding retail space. The Company retained ownership of the approximately 26,000 square foot ground-level retail space. The Avant at Reston Town Center contributed approximately $4.1 million of net income to the Company for the period from January 1, 2022 through November 7, 2022, respectively, and contributed approximately $4.0 million and $4.0 million of net income to the Company for the years ended December 31, 2021 and 2020, respectively.

Developments/Redevelopments

On April 27, 2022, the Company entered into a 15-year lease agreement with AstraZeneca for approximately 566,000 net rentable square feet at the Company’s 290 Binney Street future development project. 290 Binney Street is part of the initial phase of a future life sciences development project located in the heart of Kendall Square in Cambridge, Massachusetts. The full project is expected to consist of two buildings aggregating approximately 1.1 million rentable square feet of life sciences space and an approximately 400,000 square foot residential building (See Note 16).

On April 29, 2022, the Company partially placed in-service 2100 Pennsylvania Avenue, a premier workplace project with approximately 480,000 net rentable square feet located in Washington, DC.

On May 13, 2022, the Company commenced the development of Reston Next Office Phase II, a premier workplace project located in Reston, Virginia. When completed, the building will consist of approximately 90,000 net rentable square feet.

On June 29, 2022, the Company completed and fully placed in-service 325 Main Street, a premier workplace project with approximately 414,000 net rentable square feet located in Cambridge, Massachusetts.

On July 1, 2022, the Company commenced the redevelopment of 140 Kendrick Street, a premier workplace that consists of three buildings aggregating approximately 388,000 net rentable square feet located in Needham, Massachusetts. The redevelopment is a repositioning of one building consisting of approximately 90,000 net rentable square feet into a net zero, carbon neutral premier workplace building, as defined by the LEED Zero Carbon Certification. When completed, the building will consist of approximately 104,000 net rentable square feet.

On September 8, 2022, the Company terminated its existing lease agreement with its tenant at 300 Binney Street to facilitate the conversion and expansion of the property. 300 Binney Street is a premier workplace with approximately 195,000 net rentable square feet at Kendall Center in Cambridge, Massachusetts that will be redeveloped into approximately 240,000 net rentable square feet of laboratory/life sciences space (See Note 16).

On September 12, 2022, the Company commenced the redevelopment of 760 Boylston Street, a retail project at the Prudential Center located in Boston, Massachusetts. The redevelopment is a modernization of the space consisting of approximately 118,000 net rentable square feet.

On October 19, 2022, the Company completed and fully placed in-service Reston Next, a premier workplace project consisting of two buildings with an aggregate of approximately 1.1 million net rentable square feet, located in Reston, Virginia.

On November 30, 2022, the Company commenced the redevelopment of 105 Carnegie Center, located in Princeton, New Jersey. The redevelopment is a repositioning of the property. 105 Carnegie Center consisted of approximately 70,000 net rentable square feet of office space. When completed, the building will consist of approximately 73,000 net rentable square feet of laboratory/life sciences space.

On December 1, 2022, the Company removed 2096 Gaither Road from its in-service portfolio following the expiration of the last leases on November 30, 2022. 2096 Gaither Road consisted of approximately 50,000 net rentable square feet of office space in the Company’s Shady Grove Innovation District, located in Rockville, Maryland. The Company anticipates it will redevelop or convert 2096 Gaither Road to support lab or life sciences-related uses.

On December 23, 2022, the Company completed and fully placed in-service 880 Winter Street, an approximately 244,000 net rentable square foot laboratory/life sciences project located in Waltham, Massachusetts.

4. Leases

The Company estimates the collectability of its accrued rent and accounts receivable balances related to lease revenue. When evaluating the collectability of these accrued rent and accounts receivable balances, management considers tenant creditworthiness, current economic trends and changes in tenants’ payment patterns, on a lease-by-lease basis. During the years ended December 31, 2021 and 2020, the Company wrote off approximately $1.3 million and $90.3 million, respectively, related to accrued rent, net balances and accounts receivable, net balances. The write-offs were for tenants, primarily in the retail and co-working sectors, that either terminated their leases or for which the Company determined their accrued rent and/or accounts receivable balances were no longer probable of collection.

In April 2020, the FASB staff issued a question and answer document (“Lease Modification Q & A”) related to the application of lease accounting guidance for lease concessions, in accordance with ASC 842, as a result of COVID-19. The Company did not utilize the guidance provided in the Lease Modification Q & A and instead elected to continue to account for the COVID-19 lease concessions on a lease-by-lease basis in accordance with the existing lease modification accounting framework.

During the year ended December 31, 2022, the Company determined it was probable of collecting

substantially all of certain clients’ accrued rent and account receivable balances and, therefore, ceased recognizing

revenue from such clients on a cash basis. As a result of returning these clients to accrual basis accounting, the

Company reinstated approximately $1.5 million of accrued rent balances during the year ended December 31, 2022.

Lessee

The Company has four non-cancelable ground lease obligations, as lessee, which were classified as operating leases, with various initial term expiration dates through 2114 for the years ended December 31, 2022, 2021 and 2020. The Company recognizes ground rent expense on a straight-line basis over the term of the respective ground lease agreements. As of December 31, 2022, none of the amounts disclosed below for these ground leases contain variable payments, extension options or residual value guarantees.

The Company has four finance lease obligations with various initial term expiration dates through 2094 for the years ended December 31, 2022, 2021 and 2020.

The following table provides lease cost information for the Company’s operating and finance leases for the years ended December 31, 2022, 2021 and 2020 (in thousands):


	Year ended December 31,
Lease costs	2022		2021		2020
Operating lease costs	$	12,700	$	13,151	$	13,948
Finance lease costs
Amortization of right of use asset (1)	$	697	$	547	$	56
Interest on lease liabilities (2)	$	3,236	$	2,471	$	583

(1)The finance leases relate to either land, buildings or assets that remain in development. For land leases classified as finance leases because of a purchase option that the Company views as an economic incentive, the Company follows its existing policy and does not depreciate land because it is assumed to have an indefinite life. For all other finance leases, the Company would amortize the right of use asset over the shorter of the useful life of the asset or the lease term. If the finance lease relates to a property under development, the amortization of the right of use asset may be eligible for capitalization. For assets under development, depreciation may commence once the asset is placed in-service and depreciation would be recognized in accordance with the Company’s policy.

(2)One, two and three of the finance leases relate to assets under development for all or a portion of the years ended December 31, 2022, December 31, 2021 and December 31, 2020, respectively, and as such, a portion of the interest amount was capitalized.

The following table provides other quantitative information for the Company’s operating and finance leases as of December 31, 2022 and December 31, 2021:


	December 31, 2022		December 31, 2021
Other information
Weighted-average remaining lease term (in years)
Operating leases	49		50
Finance leases	68		69
Weighted-average discount rate
Operating leases	5.7	%	5.7	%
Finance leases	6.2	%	6.2	%

The following table provides a maturity analysis for the Company’s lease liabilities related to its operating and finance leases as of December 31, 2022 (in thousands):


	Operating		Finance
2023	$	22,415	$	9,306
2024 (1)	22,274		49,343
2025	10,308		9,971
2026	10,100		10,166
2027	9,885		10,364
Thereafter	528,915		1,352,647
Total lease payments	603,897		1,441,797
Less:
Interest portion	399,211		1,192,462
Present value of lease payments	$	204,686	$	249,335

(1)Finance lease payments in 2024 include approximately $38.7 million related to a purchase option that the Company is reasonably certain it will exercise.

The following table provides a maturity analysis for the Company’s lease liabilities related to its operating and finance leases as of December 31, 2021 (in thousands):


	Operating		Finance
2022	$	19,623	$	8,762
2023	25,333		10,826
2024 (1)	10,085		48,605
2025	10,307		9,971
2026	10,100		10,166
Thereafter	538,801		1,363,011
Total lease payments	614,249		1,451,341
Less:
Interest portion	409,688		1,206,920
Present value of lease payments	$	204,561	$	244,421

(1)Finance lease payments in 2024 include approximately $38.7 million related to a purchase option that the Company is reasonably certain it will exercise.

Lessor

Operating Leases

The following table summarizes the components of lease revenue recognized during the years ended December 31, 2022, 2021 and 2020 included within the Company's Consolidated Statements of Operations (in thousands):


	Year ended December 31,
Lease Revenue	2022		2021		2020
Fixed contractual payments	$	2,426,007	$	2,319,362	$	2,211,915
Variable lease payments	492,361		433,652		434,346
	$	2,918,368	$	2,753,014	$	2,646,261

The future contractual lease payments to be received (excluding operating expense reimbursements and percentage rent) by the Company as of December 31, 2022, under non-cancelable operating leases which expire on various dates through 2049 (in thousands):


Years Ending December 31,
2023	$	2,338,610
2024	2,321,135
2025	2,279,700
2026	2,212,455
2027	2,094,014
Thereafter	13,020,102

No single tenant represented more than 10.0% of the Company’s total lease revenue for the years ended December 31, 2022, 2021 and 2020.

Sales-type Lease

On July 29, 2020, the Company entered into a 99-year ground lease with a third-party hotel developer for land at its Reston Next property located in Reston, Virginia, which will support the development of a 267-room, approximately 241,000 square foot hotel property. The lease commenced on October 21, 2020 and upon commencement, the Company performed classification testing. The ground lease was subject to termination rights and as of the lease commencement date, the Company was not reasonably certain that those termination rights would not be exercised. As such, the Company accounted for the ground lease as an operating lease. On December 19, 2022, the Company amended the ground lease which included the elimination of the termination rights. As a result, this lease was reclassified as a sales-type lease.

The Company recorded a sales-type lease receivable of approximately $13.0 million, which includes an unguaranteed residual asset of approximately $17,000. The sales-type lease receivable was measured as the present value of the fixed and determinable lease payments, including the unguaranteed residual value of the asset at the end of the lease, discounted at the rate implicit in the lease.

In addition, the Company recorded a gain on sales-type lease of approximately $10.1 million associated with the derecognition of the asset. The Company did not recognize any interest income during the year ended December 31, 2022.

The following table provides the future contractual payments to be received as of December 31, 2022 (in thousands):


	Sales-Type
2023	$	—
2024	31
2025	124
2026	372
2027	756
Thereafter	268,249
Total lease payments to be received	269,532
Less:
Interest portion	256,504
Sales-type lease receivable	13,028
Unguaranteed residual asset	17
Current expected credit loss adjustment	(234)
Sales-type lease receivable, net	$	12,811

5. Deferred Charges

Deferred charges consisted of the following at December 31, 2022 and 2021 (in thousands):


	December 31, 2022		December 31, 2021
Leasing costs, including lease related intangibles	$	1,095,231	$	1,011,229
Financing costs	19,311		19,231
	1,114,542		1,030,460
Less: Accumulated amortization	(381,260)		(411,662)
	$	733,282	$	618,798

The following table summarizes the scheduled amortization of the Company’s acquired in-place lease intangibles for each of the five succeeding years (in thousands).


	Acquired In-Place Lease Intangibles
2023	$	27,659
2024	21,595
2025	21,419
2026	20,571
2027	18,214

6. Investments in Unconsolidated Joint Ventures

The investments in unconsolidated joint ventures consist of the following at December 31, 2022 and December 31, 2021:


					Carrying Value of Investment (1)
Entity	Properties	Nominal % Ownership			December 31, 2022		December 31, 2021
					(in thousands)
Square 407 Limited Partnership	Market Square North	50.00	%		$	(6,198)	$	(1,205)
BP/CRF Metropolitan Square LLC	Metropolitan Square	20.00	%		(37,629)		(15,356)
901 New York, LLC	901 New York Avenue	25.00	%	(2)	(12,493)		(12,597)
WP Project Developer LLC	Wisconsin Place Land and Infrastructure	33.33	%	(3)	31,971		33,732
500 North Capitol Venture LLC	500 North Capitol Street, NW	30.00	%		(9,185)		(7,913)
501 K Street LLC	1001 6th Street	50.00	%	(4)	42,922		42,576
Podium Developer LLC	The Hub on Causeway - Podium	50.00	%		46,839		48,980
Residential Tower Developer LLC	Hub50House	50.00	%		45,414		47,774
Hotel Tower Developer LLC	The Hub on Causeway - Hotel Air Rights	50.00	%		12,366		11,505
Office Tower Developer LLC	100 Causeway Street	50.00	%		59,716		57,687
1265 Main Office JV LLC	1265 Main Street	50.00	%		3,465		3,541
BNY Tower Holdings LLC	Dock 72	50.00	%	(5)	(19,921)		28,412

CA-Colorado Center, LLC	Colorado Center	50.00	%		233,862		231,479
7750 Wisconsin Avenue LLC	7750 Wisconsin Avenue	50.00	%		52,152		61,626
BP-M 3HB Venture LLC	3 Hudson Boulevard	25.00	%		116,397		116,306
SMBP Venture LP	Santa Monica Business Park	55.00	%		164,735		156,639
Platform 16 Holdings LP	Platform 16	55.00	%	(6)	158,109		109,086
Gateway Portfolio Holdings LLC	Gateway Commons	50.00	%	(7)	324,038		327,148
Rosecrans-Sepulveda Partners 4, LLC	Beach Cities Media Campus	50.00	%		27,000		27,106
Safeco Plaza REIT LLC	Safeco Plaza	33.67	%	(8)	69,785		72,545
360 PAS Holdco LLC	360 Park Avenue South	42.21	%	(9)	114,992		106,855
PR II/BXP Reston Gateway LLC	Reston Next Residential	20.00	%	(10)	11,351		N/A
751 Gateway Holdings LLC	751 Gateway	49.00	%	(7)	80,714		N/A
200 Fifth Avenue JV LLC	200 Fifth Avenue	26.69	%		120,083		N/A
					$	1,630,485	$	1,445,926

(1)Investments with deficit balances aggregating approximately $85.4 million and $37.1 million at December 31, 2022 and December 31, 2021, respectively, are included within Other Liabilities in the Company’s Consolidated Balance Sheets.

(2)The Company’s economic ownership has increased based on the achievement of certain return thresholds. At December 31, 2022 and December 31, 2021, the Company’s economic ownership was approximately 50%.

(3)The Company’s wholly-owned subsidiary that owns Wisconsin Place Office also owns a 33.33% interest in the joint venture entity that owns the land, parking garage and infrastructure of the project.

(4)Under the joint venture agreement for this land parcel, the partner will be entitled to up to two additional payments from the venture based on increases in total entitled square footage of the project in excess of 520,000 square feet and achieving certain project returns at stabilization.

(5)This property includes net equity balances from the amenity joint venture.

(6)This entity is a VIE (See Note 2).

(7)On June 16, 2022, in accordance with the Gateway Commons joint venture agreement, 751 Gateway was segregated into a new single-purpose joint venture.

(8)The Company’s ownership includes (1) a 33.0% direct interest in the joint venture, and (2) an additional 1% interest in each of the two entities through which each partner owns its interest in the joint venture.

(9)The Company’s ownership includes (1) a 35.79% direct interest in the joint venture, (2) an additional 5.837% indirect ownership in the joint venture, and (3) an additional 1% interest in each of the two entities through which each partner owns its interest in the joint venture. The Company’s partners will fund required capital until their aggregate investment is

approximately 58% of all capital contributions; thereafter, the partners will fund required capital according to their percentage interests.

(10)The Company’s partner will fund required capital until its aggregate investment is approximately 80% of all capital contributions; thereafter, the partners will fund required capital according to their percentage interests.

Certain of the Company’s unconsolidated joint venture agreements include provisions whereby, at certain specified times, each partner has the right to initiate a purchase or sale of its interest in the joint ventures. Under certain of the Company’s joint venture agreements, if certain return thresholds are achieved, the partners or the Company will be entitled to an additional promoted interest or payments.

The combined summarized balance sheets of the Company’s unconsolidated joint ventures are as follows:


	December 31, 2022		December 31, 2021
	(in thousands)
ASSETS
Real estate and development in process, net (1)	$	6,537,554	$	5,579,218
Other assets	756,786		586,470
Total assets	$	7,294,340	$	6,165,688
LIABILITIES AND MEMBERS’/PARTNERS’ EQUITY
Mortgage and notes payable, net	$	4,022,746	$	3,214,961
Other liabilities (2)	716,271		652,135
Members’/Partners’ equity	2,555,323		2,298,592
Total liabilities and members’/partners’ equity	$	7,294,340	$	6,165,688
Company’s share of equity	$	1,238,929	$	1,104,175
Basis differentials (3)	391,556		341,751
Carrying value of the Company’s investments in unconsolidated joint ventures (4)	$	1,630,485	$	1,445,926

(1)At December 31, 2022 and December 31, 2021, this amount included right of use assets - finance leases totaling approximately $248.9 million. At December 31, 2022 and December 31, 2021, this amount included right of use assets - operating leases totaling approximately $21.2 million and $22.3 million, respectively.

(2)At December 31, 2022 and December 31, 2021, this amount included lease liabilities - finance leases totaling approximately $382.2 million and $385.5 million, respectively. At December 31, 2022 and December 31, 2021, this amount included lease liabilities - operating leases totaling approximately $30.5 million and $30.4 million, respectively.

(3)This amount represents the aggregate difference between the Company’s historical cost basis and the basis reflected at the joint venture level, which is typically amortized over the life of the related assets and liabilities. Basis differentials result from impairments of investments, acquisitions through joint ventures with no change in control and upon the transfer of assets that were previously owned by the Company into a joint venture. In addition, certain acquisition, transaction and other costs may not be reflected in the net assets at the joint venture level. The majority of the Company’s basis differences are as follows:


	December 31, 2022		December 31, 2021
Property	(in thousands)
Colorado Center	$	301,820	$	304,776
200 Fifth Avenue	94,497		N/A
Gateway Commons	47,808		51,009
Dock 72	(98,980)		(50,051)

These basis differentials (excluding land) will be amortized over the remaining lives of the related assets and liabilities.

(4)Investments with deficit balances aggregating approximately $85.4 million and $37.1 million at December 31, 2022 and December 31, 2021, respectively, are reflected within Other Liabilities in the Company’s Consolidated Balance Sheets.

The combined summarized statements of operations of the Company’s unconsolidated joint ventures are as follows:


	Year ended December 31,
		2022		2021		2020
		(in thousands)
Total revenue (1)		$	512,078	$	383,649	$	319,560
Expenses
Operating		198,632		158,498		144,347
Transaction costs		837		470		1,027
Depreciation and amortization		181,041		147,121		141,853
Total expenses		380,510		306,089		287,227
Other income (expense)
Loss from early extinguishment of debt		(1,327)		—		—
Interest expense		(154,065)		(108,884)		(98,051)
Unrealized gain on derivative instruments		1,681		—		—
Gains on sales of real estate (2)		—		—		11,737
Net loss		$	(22,143)	$	(31,324)	$	(53,981)

Company’s share of net loss		$	(2,551)	$	(10,254)	$	(16,256)
Gain on sale of investment (3)		—		10,257		—
Impairment loss on investment (4)		(50,705)		—		(60,524)
Basis differential (5)		(6,584)		(2,573)		(8,330)
Loss from unconsolidated joint ventures		$	(59,840)	$	(2,570)	$	(85,110)

(1)Includes straight-line rent adjustments of approximately $62.9 million, $17.2 million and $(10.1) million for the years ended December 31, 2022, 2021 and 2020, respectively.

(2)For the year ended December 31, 2020, represents the gain on sale of Annapolis Junction Building Eight and two land parcels. The gain on sale of real estate is included in Loss from Unconsolidated Joint Ventures in the Company’s Consolidated Statements of Operations.

(3)During the year ended December 31, 2021, the Company completed the sale of its 50% ownership interest in Annapolis Junction NFM LLC. The Company recognized a gain on sale of investment of approximately $10.3 million.

(4)During the years ended December 31, 2022 and December 31, 2020, the Company recognized an other-than-temporary impairment loss on its investment in the unconsolidated joint venture that owns Dock 72 in Brooklyn, New York totaling approximately $50.7 million and $60.5 million, respectively.

(5)Includes straight-line rent adjustments of approximately $0.5 million, $0.8 million and $1.8 million for the years ended December 31, 2022, 2021 and 2020, respectively. Also includes net above-/below-market rent adjustments of approximately $0.4 million, $0.4 million and $0.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.

On January 18, 2022, a joint venture in which the Company owns a 50% interest commenced the redevelopment of 651 Gateway located in South San Francisco, California. 651 Gateway is a premier workplace that is being converted to approximately 327,000 net rentable square feet of life sciences space.

On February 2, 2022, a joint venture in which the Company owns a 55% interest commenced the development of the first phase of Platform 16, a premier workplace project located in San Jose, California, that is expected to contain approximately 1.1 million net rentable square feet upon completion. The first phase of the development projects includes the construction of an approximately 390,000 net rentable square foot premier workplace building and a below-grade parking garage.

On March 28, 2022, a joint venture in which the Company owns a 20% interest refinanced with a new lender the debt secured by its Metropolitan Square property located in Washington, DC. At the time of the refinancing, the loan had an outstanding balance of approximately $294.1 million, bore interest at a variable rate equal to (1) the greater of (x) LIBOR or (y) 0.65%, plus (2) 4.75% per annum and was scheduled to mature on July 7, 2022, with two, one-year extension options, subject to certain conditions. There was no prepayment penalty associated with

the prepayment of the previous mortgage loan. The joint venture recognized a loss from early extinguishment of debt totaling approximately $1.3 million due to the write-off of unamortized deferred financing costs. In conjunction with the refinancing, the joint venture settled its interest rate cap agreement, entered into in 2020, to limit its exposure to increases in the LIBOR rate. The new mortgage and mezzanine loans have an aggregate principal balance of $420.0 million, bear interest at a weighted average variable rate equal to the Secured Overnight Financing Rate (“SOFR“) plus 2.75% per annum and mature on April 9, 2024, with three, one-year extension options, subject to certain conditions. The joint venture distributed excess loan proceeds from the new mortgage and mezzanine loans totaling approximately $100.5 million, of which the Company’s share totaled approximately $20.1 million. On September 1, 2022, the joint venture entered into an interest rate cap agreement that capped SOFR at 4.50% per annum on a notional amount of $420.0 million through April 15, 2024. Metropolitan Square is a premier workplace with approximately 657,000 net rentable square feet located in Washington, DC.

On April 18, 2022, a joint venture in which the Company owns a 50% interest extended the maturity date of the construction loan collateralized by its Hub50House property to June 19, 2022. At the time of the extension, the loan had an outstanding balance of approximately $176.5 million, bore interest at a variable rate equal to LIBOR plus 2.00% per annum and was scheduled to mature on April 19, 2022. On June 17, 2022, the joint venture repaid the existing construction loan and obtained a new mortgage loan. The new mortgage loan has a principal balance of $185.0 million, bears interest at a variable rate equal to SOFR plus 1.35% per annum and matures on June 17, 2032. At closing, the joint venture entered into interest rate swap contracts with notional amounts aggregating $185.0 million through April 10, 2032, resulting in a fixed rate of approximately 4.432% per annum through the expiration of the interest rate swap contracts. In conjunction with the new mortgage loan, the joint venture paid off the existing construction loan. At the time of the payoff of the construction loan, the outstanding balance of the loan totaled approximately $176.7 million. The joint venture distributed excess loan proceeds from the new mortgage loan totaling approximately $6.8 million, of which the Company’s share totaled approximately $3.4 million. Hub50House is a residential property that consists of approximately 320,000 net rentable square feet and 440 residential units located in Boston, Massachusetts.

On May 13, 2022, the Company entered into a joint venture with a third party to own, operate and develop Reston Next Residential located in Reston, Virginia. Reston Next Residential is expected to consist of 508 residential rental units upon completion. The Company contributed approximately $11.3 million of improvements at closing and will contribute cash totaling approximately $3.5 million post closing for its 20% ownership interest in the joint venture. The partner contributed approximately $0.5 million of cash at closing and will contribute cash totaling approximately $58.7 million in the future for its 80% ownership interest in the joint venture. As a result of the partner’s deferred contribution, as of the acquisition date, the Company owned an approximately 96% interest in the joint venture. On May 13, 2022, the joint venture commenced development and entered into a construction loan collateralized by the property. The construction loan has a principal amount of up to $140.0 million, bears interest at a variable rate equal to SOFR plus 2.00% per annum and matures on May 13, 2026, with two, one-year extension options, subject to certain conditions.

On June 16, 2022, the Company entered into a joint venture with a third party to own, operate and develop 751 Gateway, a laboratory building located in South San Francisco, California, that is expected to be approximately 231,000 net rentable square feet upon completion. 751 Gateway was previously part of the Company’s Gateway Commons joint venture. The Company contributed assets with an agreed upon value aggregating approximately $53.9 million and cash totaling approximately $2.6 million for its 49% ownership interest in the joint venture. The partner contributed assets with an agreed upon value aggregating approximately $53.9 million and cash totaling approximately $4.9 million for its 51% ownership interest in the joint venture.

On August 8, 2022, a joint venture in which the Company owns a 50% interest modified the construction loan collateralized by its Dock 72 property located in Brooklyn, New York. At the time of the modification, the loan had an outstanding balance totaling approximately $198.4 million, a total commitment amount of $250.0 million, bore interest at a variable rate equal to LIBOR plus 3.35% per annum, and was scheduled to mature on December 18, 2023. The modified construction loan bore interest at a variable rate equal to (1) the greater of (x) SOFR or (y) 0.25% plus (2) 3.10% per annum, has a total commitment amount of approximately $198.4 million, and continued to mature on December 18, 2023. On December 22, 2022, the joint venture further modified the construction loan. The further modified construction loan bears interest at a variable rate equal to (1) the greater of (x) SOFR or (y) 0.25% plus (2) 2.50% per annum, has a total commitment amount of approximately $198.4 million, and matures on December 18, 2025. During December 2022, the Company recognized a non-cash impairment charge totaling approximately $50.7 million, which represented the other-than temporary decline in the fair value below the carrying value of the Company’s investment in the unconsolidated joint venture that owns Dock 72. The Company assessed the impairment and concluded that it was other than temporary. The Company determined that its valuation of the

investment was categorized within Level 3 of the fair value hierarchy, as it utilized significant unobservable inputs in its assessment including an exit capitalization rate of 5.75%, a discount rate on the Company’s equity investment (the property is encumbered by mortgage debt) of 7.0% and leasing the currently available space over the period of 2023-2026. Dock 72 is a premier workplace with approximately 669,000 net rentable square feet.

On September 9, 2022, a joint venture in which the Company owns an approximate 33.67% interest modified the mortgage loan collateralized by its Safeco Plaza property located in Seattle, Washington. At the time of the modification, the loan had an outstanding balance of approximately $250.0 million, bore interest at a variable rate equal to the greater of (x) 2.35% or (y) LIBOR plus 2.20% per annum, and was scheduled to mature on September 1, 2026. The modified mortgage loan bears interest at a variable rate equal to the greater of (x) 2.35% or (y) SOFR plus 2.32% per annum and continues to mature on September 1, 2026. In conjunction with the loan modification, the joint venture entered into an interest rate cap agreement that capped SOFR at 2.50% per annum on a notional amount of $250.0 million through September 1, 2023. Safeco Plaza is a premier workplace with approximately 765,000 net rentable square feet.

On November 17, 2022, the Company acquired a 26.69% interest in the joint venture that owns 200 Fifth Avenue located in New York, New York, for a gross purchase price of approximately $280.2 million, which included $120.1 million of cash and the Company’s pro rata share of the outstanding loan secured by the property of $160.1 million. The mortgage loan bears interest at a variable rate equal to LIBOR plus 1.30% per annum and matures on November 24, 2028. The joint venture has interest rate swap contracts with notional amounts aggregating $600.0 million through June 2028, resulting in a fixed rate of approximately 4.34% per annum through the expiration of the interest rate swap contracts. 200 Fifth Avenue is a 14-story, approximately 855,000 square-foot, LEED Gold certified, premier workplace located in the Midtown South submarket.

On December 7, 2022, a joint venture in which the Company owns a 50% interest modified the mortgage loan collateralized by its Market Square North property located in Washington, DC. At the time of the modification the loan had an outstanding balance of approximately $125.0 million, bore interest at a variable rate equal to (1) the greater of (x) LIBOR or (y) 0.50%, plus (2) 2.30% per annum, and was scheduled to mature on November 10, 2025, with one, one-year extension option subject to certain conditions. The modified mortgage loan bears interest at a variable rate equal to the greater of (1) the sum of (x) the “benchmark rate”, (y) 2.30% and (z) the adjustment applicable to such “benchmark rate” (approximately 0.11% for Term SOFR), or (2) 2.80%. For the period December 7, 2022 through March 9, 2023, the “benchmark rate” means LIBOR, and for the period after March 10, 2023, through the maturity date, Term SOFR. The modified mortgage loan continues to mature on November 10, 2025, with a one-year extension option subject to certain conditions. Market Square North is a premier workplace with approximately 418,000 net rentable square feet located in Washington, DC.

On December 23, 2022, a joint venture in which the Company owns a 50% interest modified the construction loan collateralized by its The Hub on Causeway – Podium property located in Boston, Massachusetts. At the time of the modification, the loan had an outstanding balance of approximately $174.3 million, bore interest at a variable rate equal to LIBOR plus 2.25% per annum, and was scheduled to mature on September 6, 2023. The modified construction loan continues to bear interest at a variable rate equal to LIBOR plus 2.25% per annum for the period from December 23, 2022 through April 30, 2023. For the period from May 1, 2023 through the maturity date, the construction loan bears interest at a variable rate equal to Term SOFR plus 2.35% per annum. The modified construction loan continues to mature on September 6, 2023. The Hub on Causeway – Podium is a premier workplace with approximately 380,000 net rentable square feet located in Boston, Massachusetts.

On December 23, 2022, a joint venture in which the Company owns a 50% interest modified the construction loan collateralized by its 100 Causeway Street property located in Boston, Massachusetts. At the time of the modification, the loan had an outstanding balance of approximately $337.6 million, bore interest at a variable rate equal to LIBOR plus 1.50% per annum, and was scheduled to mature on September 5, 2023, with two, one-year extension options, subject to certain conditions. The modified construction loan continues to bear interest at a variable rate equal to LIBOR plus 1.50% per annum for the period from December 23, 2022 through April 30, 2023. For the period from May 1, 2023 through the maturity date, the construction loan will bear interest at a variable rate equal to Term SOFR plus 1.60% per annum. The modified construction loan continues to mature on September 5, 2023, with two, one-year extension options, subject to certain conditions. 100 Causeway Street is a premier workplace with approximately 630,000 net rentable square feet located in Boston, Massachusetts.

7. Debt

Mortgage Notes Payable

The Company had outstanding mortgage notes payable totaling approximately $3.3 billion as of December 31, 2022 and 2021, each collateralized by one or more buildings and related land included in real estate assets. The mortgage notes payable are generally due in monthly installments and mature at various dates through January 9, 2032.

Fixed rate mortgage notes payable totaled approximately $3.3 billion at December 31, 2022 and 2021, with contractual interest rates ranging from 2.79% to 3.43% per annum at December 31, 2022 and 2021 (with a weighted-average interest rate of 3.24% at December 31, 2022 and 2021). There were no variable rate mortgage loans at December 31, 2022 and 2021.

Contractual aggregate principal payments of mortgage notes payable at December 31, 2022 are as follows (dollars in thousands):


	Principal Payments
2023	$	—
2024	—
2025	—
2026	—
2027	2,300,000
Thereafter	1,000,000
Total aggregate principal payments	3,300,000
Less:
Deferred financing costs, net	27,632
Total carrying value of mortgage notes payable, net	$	3,272,368

Unsecured Senior Notes

The following summarizes the unsecured senior notes outstanding as of December 31, 2022 (dollars in thousands):


	Coupon/Stated Rate		Effective Rate(1)		Principal Amount		Maturity Date(2)
10.5 Year Unsecured Senior Notes	3.125	%	3.279	%	$	500,000	September 1, 2023
10.5 Year Unsecured Senior Notes	3.800	%	3.916	%	700,000		February 1, 2024
7 Year Unsecured Senior Notes	3.200	%	3.350	%	850,000		January 15, 2025
10 Year Unsecured Senior Notes	3.650	%	3.766	%	1,000,000		February 1, 2026
10 Year Unsecured Senior Notes	2.750	%	3.495	%	1,000,000		October 1, 2026
5 Year Unsecured Senior Notes	6.750	%	6.924	%	750,000		December 1, 2027
10 Year Unsecured Senior Notes	4.500	%	4.628	%	1,000,000		December 1, 2028
10 Year Unsecured Senior Notes	3.400	%	3.505	%	850,000		June 21, 2029
10.5 Year Unsecured Senior Notes	2.900	%	2.984	%	700,000		March 15, 2030
10.75 Year Unsecured Senior Notes	3.250	%	3.343	%	1,250,000		January 30, 2031
11 Year Unsecured Senior Notes	2.550	%	2.671	%	850,000		April 1, 2032
12 Year Unsecured Senior Notes	2.450	%	2.524	%	850,000		October 1, 2033
Total principal					10,300,000
Less:
Net unamortized discount					14,094
Deferred financing costs, net					47,938
Total					$	10,237,968

(1)Yield on issuance date including the effects of discounts on the notes, settlements of interest rate contracts and the amortization of financing costs.

(2)No principal amounts are due prior to maturity.

On November 17, 2022, BPLP completed a public offering of $750.0 million in aggregate principal amount of its 6.750% unsecured senior notes due 2027. The notes were priced at 99.941% of the principal amount to yield an effective rate (including financing fees) of approximately 6.924% per annum to maturity. The notes will mature on December 1, 2027, unless earlier redeemed. The aggregate net proceeds from the offering were approximately $743.5 million after deducting underwriting discounts and transaction expenses.

The indenture relating to the unsecured senior notes contains certain financial restrictions and requirements, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 50%, (3) an interest coverage ratio of greater than 1.50, and (4) an unencumbered asset value of not less than 150% of unsecured debt. At December 31, 2022, BPLP was in compliance with each of these financial restrictions and requirements.

Unsecured Credit Facility

On June 15, 2021, BPLP amended and restated its prior credit facility (as amended and restated, the “2021 Credit Facility”). The 2021 Credit Facility provides for borrowings of up to $1.5 billion through the Revolving Facility, subject to customary conditions. Among other things, the 2021 Credit Facility (1) extended the maturity date from April 24, 2022 to June 15, 2026, (2) eliminated the $500.0 million delayed draw facility, (3) reduced the per annum variable interest rates on borrowings and (4) added a sustainability-linked pricing component. Under the 2021 Credit Facility, BPLP may increase the total commitment by up to $500.0 million by increasing the amount of the Revolving Facility and/or by incurring one or more term loans, in each case, subject to syndication of the increase and other conditions.

At BPLP’s option, loans under the 2021 Credit Facility will bear interest at a rate per annum equal to (1) (a) in the case of loans denominated in Dollars, LIBOR, (b) in the case of loans denominated in Euro, EURIBOR, (c) in the case of loans denominated in Canadian Dollars, CDOR, and (d) in the case of loans denominated in Sterling, SONIA, in each case, plus a margin ranging from 70.0 to 140.0 basis points based on BPLP’s credit rating or (2) an alternate base rate equal to the greatest of (a) the Federal Funds rate plus 0.5%, (b) the Administrative Agent’s prime rate, (c) LIBOR for a one-month period plus 1.00%, and (d) 1.00%, in each case, plus a margin ranging from 0 to 40 basis points based on BPLP’s credit rating. The 2021 Credit Facility includes provisions which allow LIBOR Daily Floating Rate to be switched to SOFR.

The 2021 Credit Facility also features a sustainability-linked pricing component such that if BPLP meets certain sustainability performance targets, the applicable per annum interest rate will be reduced by one basis point. The LIBOR replacement provisions in the 2021 Credit Facility permit the use of rates based on the secured overnight financing rate administered by the Federal Reserve Bank of New York plus an applicable spread adjustment. In addition, the 2021 Credit Facility contains a competitive bid option for up to 65% of the Revolving Facility that allows banks that are part of the lender consortium to bid to make loan advances to BPLP at a reduced interest rate.

Pursuant to the 2021 Credit Facility, BPLP is obligated to pay (1) in quarterly installments a facility fee on the total commitment under the Revolving Facility at a rate per annum ranging from 0.10% to 0.30% based on BPLP’s credit rating and (2) an annual fee on the undrawn amount of each letter of credit ranging from 0.70% to 1.40% based on BPLP’s credit rating.

Based on BPLP’s December 31, 2022 credit rating, (1) the applicable Eurocurrency and LIBOR Daily Floating Rate margins are 0.775%, (2) the alternate base rate margin is zero basis points and (3) the facility fee is 0.15% per annum.

At December 31, 2022, BPLP had no amount outstanding under its Revolving Facility. At December 31, 2021, BPLP had $145.0 million outstanding under its Revolving Facility.

Unsecured Term Loan

On May 17, 2022, BPLP entered into the 2022 Unsecured Term Loan, which provided for a single borrowing of up to $730.0 million. The 2022 Unsecured Term Loan matures on May 16, 2023 (See Note 16).

At BPLP’s option, the 2022 Unsecured Term Loan bore interest at a rate per annum equal to (A) (1) a base rate per annum equal to the greater of (a) the federal funds rate plus 0.5%, (b) the administrative agent’s prime rate, (c) term SOFR plus 1.00% and (d) 1.00%, or (2) a term SOFR rate per annum equal to the forward-looking SOFR term rate administered by CME Group Benchmark Administration (“CME”) two business days prior to the commencement of such interest period; or if the rate was unavailable, then the forward-looking SOFR term rate administered by CME on the first business day immediately prior thereto, in each case, plus 0.10%, and (B) a margin ranging from zero to 160 basis points based on BPLP’s credit rating.

On May 17, 2022, BPLP exercised its option to draw $730.0 million under the 2022 Unsecured Term Loan (See Note 3). As of December 31, 2022, the 2022 Unsecured Term Loan bore interest at a variable rate equal to term SOFR plus 0.95% per annum based on BPLP’s credit rating at December 31, 2022. At December 31, 2022, BPLP had $730.0 million outstanding under the 2022 Unsecured Term Loan (see Note 16).

2021 Credit Facility and 2022 Unsecured Term Loan Compliance

The 2021 Credit Facility and 2022 Unsecured Term Loan contain customary representations and warranties, affirmative and negative covenants and events of default provisions, including the failure to pay indebtedness, breaches of covenants and bankruptcy and other insolvency events, which could result in the acceleration of the obligation to repay, in the case of the 2021 Credit Facility, all outstanding amounts and the cancellation of all commitments outstanding under the 2021 Credit Facility and, in the case of the 2022 Unsecured Term Loan, any outstanding amount under the 2022 Unsecured Term Loan. Among other covenants, the 2021 Credit Facility and the 2022 Unsecured Term Loan require that BPLP maintain on an ongoing basis: (1) a leverage ratio not to exceed 60%, however, the leverage ratio may increase to no greater than 65% provided that it is reduced back to 60% within one year, (2) a secured debt leverage ratio not to exceed 55%, (3) a fixed charge coverage ratio of at least 1.40, (4) an unsecured debt leverage ratio not to exceed 60%, however, the unsecured debt leverage ratio may increase to no greater than 65% provided that it is reduced to 60% within one year, (5) an unsecured debt interest coverage ratio of at least 1.75 and (6) limitations on permitted investments. At December 31, 2022, BPLP was in compliance with each of these financial and other covenant requirements.

8. Commitments and Contingencies

General

In the normal course of business, the Company guarantees its performance of services or indemnifies third parties against its negligence. In addition, in the normal course of business, the Company guarantees to certain tenants the obligations of its subsidiaries for the payment of tenant improvement allowances and brokerage commissions in connection with their leases and limited costs arising from delays in delivery of their premises.

The Company had letter of credit and performance obligations related to lender and development requirements that total approximately $26.5 million at December 31, 2022.

Certain of the Company’s joint venture agreements include provisions whereby, at certain specified times, each partner has the right to initiate a purchase or sale of its interest in the joint ventures. From time to time, under certain of the Company’s joint venture agreements, if certain return thresholds are achieved, either the Company or its partners may be entitled to an additional promoted interest or payments.

From time to time, the Company (or ventures in which the Company has an ownership interest) has agreed, and may in the future agree, to (1) guarantee portions of the principal, interest and other amounts in connection with their borrowings, (2) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) in connection with their borrowings and (3) provide guarantees to lenders, tenants and other third parties for the completion of development projects. The Company has agreements with its outside or joint venture partners whereby the partners agree to reimburse the joint venture for their share of any payments made under the guarantee. In some cases, the Company earns a fee from the applicable joint venture for providing the guarantee.

In connection with the refinancing of 767 Fifth Avenue’s (the General Motors Building) secured loan by the Company’s consolidated joint venture entity, 767 Venture, LLC, the Company guaranteed the consolidated entity’s obligation to fund various reserves for tenant improvement costs and allowances, leasing commissions and free rent obligations in lieu of cash deposits. As of December 31, 2022, the maximum funding obligation under the guarantee was approximately $13.7 million. The Company earns a fee from the joint venture for providing the guarantee and has an agreement with the outside partners to reimburse the joint venture for their share of any payments made

under the guarantee. As of December 31, 2022, no amounts related to the guarantee were recorded as liabilities in the Company’s consolidated financial statements.

In connection with the development of the 7750 Wisconsin Avenue office property located in Bethesda, Maryland, the Company entered into agreements with affiliates of The Bernstein Companies (the Company’s partner in the 7750 Wisconsin Avenue joint venture) under which the Company could be required to act as a mezzanine and/or mortgage lender and finance the construction of the hotel property being developed by an affiliate of The Bernstein Companies adjacent to the office property. An affiliate of The Bernstein Companies exercised its option to borrow $10.0 million from the Company under such agreements, and the Company provided the financing on June 1, 2020. The financing bore interest at a fixed rate of 8.00% per annum, compounded monthly, and was scheduled to mature on the fifth anniversary of the date on which the base building of the affiliate of The Bernstein Companies’ hotel property was substantially completed. On June 27, 2022, the borrower repaid the loan in full, including approximately $1.6 million of accrued interest. The financing was recorded as Note Receivable, Net in the Company’s Consolidated Balance Sheets.

In connection with the redevelopment of the Company’s 325 Main Street property located in Cambridge, Massachusetts, the Company was required pursuant to the local zoning ordinance and urban renewal plan to commence construction of a residential building of at least 200,000 square feet with 25% of the project designated as income-restricted (with a minimum of 20% of the square footage devoted to home ownership units) prior to the occupancy of the 325 Main Street property. Each of the zoning ordinance and urban renewal plan was amended to decouple the residential requirement from the occupancy of the 325 Main Street property. 325 Main Street consisted of an approximately 115,000 net rentable square foot premier workplace that was demolished and redeveloped into an approximately 414,000 net rentable square foot premier workplace. While the amendment to the urban renewal plan is subject to completion of administrative processes, the City of Cambridge issued a temporary certificate of occupancy in the second quarter of 2022 (See Note 3).

Concentrations of Credit Risk

Management of the Company performs ongoing credit evaluations of tenants and may require tenants to provide some form of credit support such as corporate guarantees and/or other financial guarantees. Although the Company’s properties are geographically diverse and tenants operate in a variety of industries, to the extent the Company has a significant concentration of rental revenue from any single tenant, the inability of that tenant to make its lease payments could have an adverse effect on the Company.

Insurance

The Company’s property insurance program per occurrence limits are $1.0 billion for its portfolio insurance program, including coverage for acts of terrorism other than nuclear, biological, chemical or radiological terrorism (“Terrorism Coverage”). The Company also carries $1.35 billion of property insurance in excess of the $1.0 billion of coverage in the Company’s property insurance program for 601 Lexington Avenue, New York, New York, consisting of $750 million of property and Terrorism Coverage in excess of the Company’s property insurance program and $600 million of Terrorism Coverage only in excess of the $1.75 billion of coverage. Certain properties, including the General Motors Building located at 767 Fifth Avenue in New York, New York (“767 Fifth Avenue”), are currently insured in separate insurance programs. The property insurance program per occurrence limits for 767 Fifth Avenue are $1.625 billion, including Terrorism Coverage. The Company also currently carries nuclear, biological, chemical and radiological terrorism insurance coverage for acts of terrorism certified under the Federal Terrorism Risk Insurance Act (as amended, “TRIA”) (“NBCR Coverage”), which is provided by IXP as a direct insurer, for the properties in the Company’s portfolio, including 767 Fifth Avenue, but excluding certain other properties owned in joint ventures with third parties or which the Company manages. The per occurrence limit for NBCR Coverage is $1.0 billion. Under TRIA, after the payment of the required deductible and coinsurance, the NBCR Coverage provided by IXP is backstopped by the Federal Government if the aggregate industry insured losses resulting from a certified act of terrorism exceed a “program trigger.” The program trigger is $200 million, the coinsurance is 20% and the deductible is 20% of the premiums earned by the insurer for the year prior to a claim. If the Federal Government pays out for a loss under TRIA, it is mandatory that the Federal Government recoup the full amount of the loss from insurers offering TRIA coverage after the payment of the loss pursuant to a formula in TRIA. The Company may elect to terminate the NBCR Coverage if the Federal Government seeks recoupment for losses paid under TRIA, if TRIA is not extended after its expiration on December 31, 2027, if there is a change in its portfolio or for any other reason. The Company intends to continue to monitor the scope, nature and cost of available terrorism insurance.

The Company also currently carries earthquake insurance on its properties located in areas known to be subject to earthquakes. Specifically, the Company currently carries earthquake insurance which covers its San Francisco and Los Angeles regions with a $330 million per occurrence limit, and a $330 million annual aggregate limit, $30 million of which is provided by IXP, as a direct insurer. This insurance is subject to a deductible in the amount of 3% of the value of the affected property. In addition, the Company currently carries earthquake insurance which covers its Seattle region with a $110 million per occurrence limit, and a $110 million annual aggregate limit. This insurance is subject to a deductible in the amount of 2% of the value of the affected property. The amount of the Company’s earthquake insurance coverage may not be sufficient to cover losses from earthquakes. In addition, the amount of earthquake coverage could impact the Company’s ability to finance properties subject to earthquake risk. The Company may discontinue earthquake insurance or change the structure of its earthquake insurance program on some or all of its properties in the future if the premiums exceed the Company’s estimation of the value of the coverage.

IXP, a captive insurance company which is a wholly-owned subsidiary of the Company, acts as a direct insurer with respect to a portion of the Company’s earthquake insurance coverage for its Greater San Francisco and Los Angeles properties and the Company’s NBCR Coverage. Insofar as the Company owns IXP, it is responsible for its liquidity and capital resources, and the accounts of IXP are part of the Company’s consolidated financial statements. In particular, if a loss occurs which is covered by the Company’s NBCR Coverage but is less than the applicable program trigger under TRIA, IXP would be responsible for the full amount of the loss without any backstop by the Federal Government. IXP would also be responsible for any recoupment charges by the Federal Government in the event losses are paid out and its insurance policy is maintained after the payout by the Federal Government. If the Company experiences a loss and IXP is required to pay under its insurance policy, the Company would ultimately record the loss to the extent of the required payment. Therefore, insurance coverage provided by IXP should not be considered as the equivalent of third-party insurance, but rather as a modified form of self-insurance. In addition, BPLP has issued a guarantee to cover liabilities of IXP in the amount of $20.0 million.

The Company continues to monitor the state of the insurance market in general, and the scope and costs of coverage for acts of terrorism, earthquakes and pandemics, in particular, but the Company cannot anticipate what coverage will be available on commercially reasonable terms in future policy years. There are other types of losses, such as from wars, for which the Company cannot obtain insurance at all or at a reasonable cost. With respect to such losses and losses from acts of terrorism, earthquakes, pandemics or other catastrophic events, if the Company experiences a loss that is uninsured or that exceeds policy limits, the Company could lose the capital invested in the damaged properties, as well as the anticipated future revenues from those properties. Depending on the specific circumstances of each affected property, it is possible that the Company could be liable for mortgage indebtedness or other obligations related to the property. Any such loss could materially and adversely affect the Company’s business and financial condition and results of operations.

Legal Matters

The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance. Management believes that the final outcome of such matters will not have a material adverse effect on the financial position, results of operations or liquidity of the Company.

State and Local Tax Matters

Because BXP is organized and qualifies as a REIT, it is generally not subject to federal income taxes, but is subject to certain state and local taxes. In the normal course of business, certain entities through which the Company owns real estate either have undergone, or are currently undergoing, tax audits. Although the Company believes that it has substantial arguments in favor of its positions in the ongoing audits, in some instances there is no controlling precedent or interpretive guidance on the specific point at issue. Collectively, tax deficiency notices received to date from the jurisdictions conducting the ongoing audits have not been material. However, there can be no assurance that future audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on the Company’s results of operations.

Environmental Matters

It is the Company’s policy to retain independent environmental consultants to conduct or update Phase I environmental assessments (which generally do not involve invasive techniques such as soil or ground water sampling) and asbestos surveys in connection with the Company’s acquisition of properties. These pre-purchase environmental assessments have not revealed environmental conditions that the Company believes will have a

material adverse effect on its business, assets, financial condition, results of operations or liquidity, and the Company is not otherwise aware of environmental conditions with respect to its properties that the Company believes would have such a material adverse effect. However, from time to time environmental conditions at the Company’s properties have required and may in the future require environmental testing and/or regulatory filings, as well as remedial action.

In February 1999, the Company (through a joint venture) acquired from Exxon Corporation a property in Massachusetts that was formerly used as a petroleum bulk storage and distribution facility and was known by the state regulatory authority to contain soil and groundwater contamination. The Company developed an office park on the property. The Company engaged a specially licensed environmental consultant to oversee the management of contaminated soil and groundwater that was disturbed in the course of construction. Under the property acquisition agreement, Exxon agreed to (1) bear the liability arising from releases or discharges of oil and hazardous substances which occurred at the site prior to the Company’s ownership, (2) continue monitoring and/or remediating such releases and discharges as necessary and appropriate to comply with applicable requirements, and (3) indemnify the Company for certain losses arising from preexisting site conditions. Any indemnity claim may be subject to various defenses and contractual limitations, including time limits, and there can be no assurance that the amounts paid under the indemnity, if any, would be sufficient to cover the liabilities arising from any such releases and discharges.

Environmental investigations at some of the Company’s properties and certain properties owned by affiliates of the Company have identified groundwater contamination migrating from off-site source properties. In each case the Company engaged a licensed environmental consultant to perform the necessary investigations and assessments and to prepare any required submittals to the regulatory authorities. In each case the environmental consultant concluded that the properties qualify under the regulatory program or the regulatory practice for a status which eliminates certain deadlines for conducting response actions at a site. The Company also believes that these properties qualify for liability relief under certain statutory provisions or regulatory practices regarding upgradient releases. Although the Company believes that the current or former owners of the upgradient source properties may bear responsibility for some or all of the costs of addressing the identified groundwater contamination, the Company will take such further response actions (if any) that it deems necessary or advisable. Other than periodic testing at some of these properties, no such additional response actions are anticipated at this time.

Some of the Company’s properties and certain properties owned by the Company’s affiliates are located in urban, industrial and other previously developed areas where fill or current or historical uses of the areas have caused site contamination. Accordingly, it is sometimes necessary to institute special soil and/or groundwater handling procedures and/or include particular building design features in connection with development, construction and other property operations in order to achieve regulatory closure and/or ensure that contaminated materials are addressed in an appropriate manner. In these situations, it is the Company’s practice to investigate the nature and extent of detected contamination, including potential issues associated with vapor intrusion concerns and/or potential contaminant migration to or from the subject property in ground water, assess potential liability risks and estimate the costs of required response actions and special handling procedures. The Company then uses this information as part of its decision-making process with respect to the acquisition, deal structure and/or development of the property. For example, the Company owns a parcel in Massachusetts which was formerly used as a quarry/asphalt batching facility. Pre-purchase testing indicated that the site contained relatively low levels of certain contaminants. The Company has developed an office park on this property. Prior to and during redevelopment activities, the Company engaged a specially licensed environmental consultant to monitor environmental conditions at the site and prepare necessary regulatory submittals based on the results of an environmental risk characterization. A submittal has been made to the regulatory authorities in order to achieve regulatory closure at this site. The submittal included an environmental deed restriction that mandates compliance with certain protective measures in a portion of the site where low levels of residual soil contamination have been left in place in accordance with applicable laws.

The Company expects that resolution of the environmental matters relating to the above will not have a material impact on its business, assets, financial condition, results of operations or liquidity. However, the Company cannot assure you that it has identified all environmental liabilities at its properties, that all necessary remediation actions have been or will be undertaken at the Company’s properties or that the Company will be indemnified, in full or at all or that the Company will have insurance coverage, in the event that such environmental liabilities arise.

9. Noncontrolling Interests

Noncontrolling interests relate to the interests in BPLP not owned by BXP and interests in consolidated property partnerships not wholly-owned by the Company. As of December 31, 2022, the noncontrolling interests in BPLP consisted of 16,531,172 OP Units, 1,679,175 LTIP Units (including 464,036 LTIP Units earned by employees under the Company’s multi-year long-term incentive awards granted between 2012 and 2019 (i.e., 2012 OPP and 2013 - 2019 MYLTIP awards)), 203,278 2020 MYLTIP Units, 350,989 2021 MYLTIP Units and 253,453 2022 MYLTIP Units held by parties other than BXP.

Noncontrolling Interest—Common Units

During the years ended December 31, 2022 and 2021, 182,929 and 523,969 OP Units, respectively, were presented by the holders for redemption (including 78,249 and 148,442 OP Units, respectively, issued upon conversion of LTIP Units, 2012 OPP Units and MYLTIP Units) and were redeemed by BXP in exchange for an equal number of shares of Common Stock.

At December 31, 2022, BPLP had outstanding 203,278 2020 MYLTIP Units, 350,989 2021 MYLTIP Units and 253,453 2022 MYLTIP Units. Prior to the end of the respective three-year performance period for each plan, holders of MYLTIP Units are entitled to receive per unit distributions equal to one-tenth (10%) of the regular quarterly distributions payable on an OP Unit, but will not be entitled to receive any special distributions. After the three-year performance period for each plan has ended, (1) the number of MYLTIP Units, both vested and unvested, that MYLTIP award recipients have earned, if any, based on the establishment of a performance pool, will be entitled to receive distributions in an amount per unit equal to distributions, both regular and special, payable on an OP Unit and (2) with respect to the 2021 MYLTIP and 2022 MYLTIP only, the Company will make a “catch-up” cash payment on the MYLTIP Units that are ultimately earned in an amount equal to the regular and special dividends, if any, declared during the performance period on Common Stock, less the distributions actually paid during the performance period on all of the awarded 2021 MYLTIP Units and 2022 MYLTIP Units.

On February 6, 2020, the measurement period for the Company’s 2017 MYLTIP awards ended and, based on BXP’s relative total stockholder return (“TSR”) performance, the final awards were determined to be 83.8% of target, or an aggregate of approximately $17.6 million (after giving effect to employee separations). As a result, an aggregate of 270,942 2017 MYLTIP Units that had been previously granted were automatically forfeited.

On February 5, 2021, the measurement period for the Company’s 2018 MYLTIP awards ended and, based on BXP’s relative TSR performance, the final awards were determined to be 29.2% of target, or an aggregate of approximately $4.6 million (after giving effect to employee separations). As a result, an aggregate of 285,925 2018 MYLTIP Units that had been previously granted were automatically forfeited.

On December 14, 2021, BPLP issued approximately 866,503 OP Units as partial consideration for the acquisition of 360 Park Avenue South in New York, New York. The OP Units issued totaled approximately $99.7 million based on the average closing price per share of BXP’s common stock for the five trading days immediately preceding the closing date.

On February 4, 2022, the measurement period for the Company’s 2019 MYLTIP awards ended and, based on BXP’s relative TSR performance, the final payout was determined to be 69.0% of target, or an aggregate of approximately $8.6 million (after giving effect to employee separations). As a result, an aggregate of 144,043 2019 MYLTIP Units that had been previously granted were automatically forfeited.

The following table presents BPLP’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units, 2013 - 2018 MYLTIP Units and, after the February 4, 2022 measurement date, the 2019 MYLTIP Units) and its distributions on the 2019 MYLTIP Units (prior to the February 4, 2022 measurement date) and 2020 - 2022 MYLTIP Units (after the February 1, 2022 issuance date of the 2022 MYLTIP Units) that occurred during the year ended December 31, 2022:


Record Date	Payment Date	Distributions per OP Unit and LTIP Unit	Distributions per MYLTIP Unit
December 30, 2022	January 30, 2023	$0.98	$0.098
September 30, 2022	October 31, 2022	$0.98	$0.098
June 30, 2022	July 29, 2022	$0.98	$0.098
March 31, 2022	April 29, 2022	$0.98	$0.098
December 31, 2021	January 28, 2022	$0.98	$0.098

The following table presents BPLP’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units, 2013 - 2017 MYLTIP Units and, after the February 5, 2021 measurement date, the 2018 MYLTIP Units) and its distributions on the 2018 MYLTIP Units (prior to the February 5, 2021 measurement date) and 2019 - 2021 MYLTIP Units (after the February 2, 2021 issuance date of the 2021 MYLTIP Units) that occurred during the year ended December 31, 2021:


Record Date	Payment Date	Distributions per OP Unit and LTIP Unit	Distributions per MYLTIP Unit
December 31, 2021	January 28, 2022	$0.98	$0.098
September 30, 2021	October 29, 2021	$0.98	$0.098
June 30, 2021	July 30, 2021	$0.98	$0.098
March 31, 2021	April 30, 2021	$0.98	$0.098
December 31, 2020	January 28, 2021	$0.98	$0.098

The following table presents BPLP’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units, 2013 - 2016 MYLTIP Units and, after the February 6, 2020 measurement date, the 2017 MYLTIP Units) and its distributions on the 2017 MYLTIP Units (prior to the February 6, 2020 measurement date) and 2018 - 2020 MYLTIP Units (after the February 4, 2020 issuance date of the 2020 MYLTIP Units) that occurred during the year ended December 31, 2020:


Record Date	Payment Date	Distributions per OP Unit and LTIP Unit	Distributions per MYLTIP Unit
December 31, 2020	January 28, 2021	$0.98	$0.098
September 30, 2020	October 30, 2020	$0.98	$0.098
June 30, 2020	July 31, 2020	$0.98	$0.098
March 31, 2020	April 30, 2020	$0.98	$0.098
December 31, 2019	January 30, 2020	$0.98	$0.098

A holder of an OP Unit may present the OP Unit to BPLP for redemption at any time (subject to restrictions agreed upon at the time of issuance of OP Units to particular holders that may restrict such redemption right for a period of time, generally one year from issuance). Upon presentation of an OP Unit for redemption, BPLP must redeem the OP Unit for cash equal to the then value of a share of Common Stock of BXP. BXP may, in its sole discretion, elect to assume and satisfy the redemption obligation by paying either cash or issuing one share of Common Stock. The value of the OP Units (other than OP Units owned by BXP), and LTIP Units (including the 2012 OPP Units and 2013 - 2019 MYLTIP Units), assuming in each case that all conditions had been met for the conversion thereof, had all of such units been redeemed at December 31, 2022 was approximately $1.3 billion based on the last reported price of a share of Common Stock on the New York Stock Exchange of $67.58 per share on December 30, 2022.

Noncontrolling Interests—Property Partnerships

The noncontrolling interests in property partnerships consist of the outside equity interests in ventures that are consolidated with the financial results of the Company because the Company exercises control over the entities that own the properties. The equity interests in these ventures that are not owned by the Company, totaling approximately $1.5 billion and $1.6 billion at December 31, 2022 and December 31, 2021, respectively, are included in Noncontrolling Interests—Property Partnerships on the accompanying Consolidated Balance Sheets.

10. Stockholders’ Equity / Partners’ Capital

BXP

As of December 31, 2022, BXP had 156,757,867 shares of Common Stock outstanding.

As of December 31, 2022, BXP owned 1,749,682 general partnership units and 155,008,185 limited partnership units in BPLP.

On May 22, 2020, BXP renewed its “at the market” (“ATM”) stock offering program through which it may sell from time to time up to an aggregate of $600.0 million of its Common Stock through sales agents over a three-year period. Under the ATM stock offering program, BXP may also engage in forward sale transactions with affiliates of certain sales agents for the sale of its Common Stock on a forward basis. This program replaced BXP’s prior $600.0 million ATM stock offering program that was scheduled to expire on June 2, 2020. BXP intends to use the net proceeds from any offering for general business purposes, which may include investment opportunities and debt reduction. No shares of Common Stock have been issued under this ATM stock offering program.

During the year ended December 31, 2022, BXP did not issue any shares of Common Stock upon the exercise of options to purchase Common Stock. During the year ended December 31, 2021, BXP issued 247,920 shares of Common Stock upon the exercise of options to purchase Common Stock.

During the years ended December 31, 2022 and December 31, 2021, BXP issued 182,929 and 523,969 shares of Common Stock, respectively, in connection with the redemption of an equal number of redeemable OP Units from limited partners.

The following table presents BXP’s dividends per share and BPLP’s distributions per OP Unit and LTIP Unit paid or declared during the years ended December 31, 2022, 2021 and 2020:


Record Date	Payment Date	Dividend (Per Share)	Distribution (Per Unit)
December 30, 2022	January 30, 2023	$0.98	$0.98
September 30, 2022	October 31, 2022	$0.98	$0.98
June 30, 2022	July 29, 2022	$0.98	$0.98
March 31, 2022	April 29, 2022	$0.98	$0.98
December 31, 2021	January 28, 2022	$0.98	$0.98
September 30, 2021	October 29, 2021	$0.98	$0.98
June 30, 2021	July 30, 2021	$0.98	$0.98
March 31, 2021	April 30, 2021	$0.98	$0.98
December 31, 2020	January 28, 2021	$0.98	$0.98
September 30, 2020	October 30, 2020	$0.98	$0.98
June 30, 2020	July 31, 2020	$0.98	$0.98
March 31, 2020	April 30, 2020	$0.98	$0.98
December 31, 2019	January 30, 2020	$0.98	$0.98

Preferred Stock

At December 31, 2020, BXP had 80,000 shares (8,000,000 Depositary Shares each representing 1/100th of a share) outstanding of its 5.25% Series B Preferred Stock with a liquidation preference of $2,500.00 per share ($25.00 per Depositary Share). BXP paid cumulative cash dividends on the Series B Preferred Stock at a rate of 5.25% per annum of the $2,500.00 liquidation preference per share. BXP did not have the right to redeem the Series B Preferred Stock prior to March 27, 2018, except in certain circumstances relating to the preservation of BXP’s REIT status. On and after March 27, 2018, BXP, at its option, could redeem the Series B Preferred Stock for a cash redemption price of $2,500.00 per share ($25.00 per Depositary Share), plus all accrued and unpaid dividends. The Series B Preferred Stock was not redeemable by the holders, had no maturity date and was not convertible into any other security of BXP or its affiliates.

On March 2, 2021, BXP issued a redemption notice for 80,000 shares of its 5.25% Series B Cumulative Redeemable Preferred Stock, which constituted all of the outstanding Series B Preferred Stock, and the corresponding depositary shares, each representing 1/100th of a share of Series B Preferred Stock. The

redemption price per share of Series B Preferred Stock was $2,500, plus all accrued and unpaid dividends to, but not including, the redemption date, totaling $2,516.41 per share. On March 31, 2021, the Company transferred the full redemption price for all outstanding shares of Series B Preferred Stock of approximately $201.3 million, including approximately $1.3 million of accrued and unpaid dividends to, but not including, the redemption date, to the redemption agent. The excess of the redemption price over the carrying value of the Series B Preferred Stock and Series B Preferred Units of approximately $6.4 million relates to the original issuance costs and is reflected as a reduction to Net Income Attributable to Boston Properties, Inc. Common Shareholders and Net Income Attributable to Boston Properties Limited Partnership Common Unitholders on the Consolidated Income Statements.

On April 1, 2021, BXP redeemed all of the outstanding shares of Series B Preferred Stock and all of the outstanding Depositary Shares. In connection with the redemption of the Series B Preferred Stock, all of the Series B Preferred Units, which had terms and preferences generally mirroring those of the Series B Preferred Stock, were redeemed by BPLP.

The following table presents BXP’s dividend per share on its Series B Preferred Stock paid during the years ended December 31, 2021 and 2020:


Record Date	Payment Date	Dividend (Per Share)
February 5, 2021	February 16, 2021	$32.8125
November 4, 2020	November 16, 2020	$32.8125
August 3, 2020	August 17, 2020	$32.8125
May 1, 2020	May 15, 2020	$32.8125
February 4, 2020	February 18, 2020	$32.8125

11. Segment Information

The following tables present reconciliations of Net Income Attributable to Boston Properties, Inc. Common Shareholders to the Company’s share of Net Operating Income and Net Income Attributable to Boston Properties Limited Partnership Common Unitholders to the Company’s share of Net Operating Income for the years ended December 31, 2022, 2021 and 2020.

BXP


	Year ended December 31,
		2022		2021		2020
		(in thousands)
Net income attributable to Boston Properties, Inc. common shareholders		$	848,947	$	496,223	$	862,227
Add:
Preferred stock redemption charge		—		6,412		—
Preferred dividends		—		2,560		10,500
Noncontrolling interest—common units of the Operating Partnership		96,780		55,931		97,704
Noncontrolling interests in property partnerships		74,857		70,806		48,260
Interest expense		437,139		423,346		431,717
Losses from early extinguishment of debt		—		45,182		—
Unrealized loss on non-real estate investment		150		—		—
Net operating income from unconsolidated joint ventures		146,081		107,756		94,943
Loss from unconsolidated joint ventures		59,840		2,570		85,110
Depreciation and amortization expense		749,775		717,336		683,751
Transaction costs		2,905		5,036		1,531
Payroll and related costs from management services contracts		15,450		12,487		11,626
General and administrative expense		146,378		151,573		133,112
Less:
Net operating income attributable to noncontrolling interests in property partnerships		191,812		186,304		162,887
Gains (losses) from investments in securities		(6,453)		5,626		5,261
Other income - assignment fee		6,624		—		—
Interest and other income (loss)		11,940		5,704		5,953
Gain on sales-type lease		10,058		—		—
Gains on sales of real estate		437,019		123,660		618,982
Direct reimbursements of payroll and related costs from management services contracts		15,450		12,487		11,626
Development and management services revenue		28,056		27,697		29,641
Company’s share of Net Operating Income		$	1,883,796	$	1,735,740	$	1,626,131

BPLP


	Year ended December 31,
		2022		2021		2020
		(in thousands)
Net income attributable to Boston Properties Limited Partnership common unitholders		$	957,265	$	561,993	$	979,979
Add:
Preferred unit redemption charge		—		6,412		—
Preferred distributions		—		2,560		10,500
Noncontrolling interests in property partnerships		74,857		70,806		48,260
Interest expense		437,139		423,346		431,717
Losses from early extinguishment of debt		—		45,182		—
Unrealized loss on non-real estate investment		150		—		—
Net operating income from unconsolidated joint ventures		146,081		107,756		94,943
Loss from unconsolidated joint ventures		59,840		2,570		85,110
Depreciation and amortization expense		742,293		709,035		676,666
Transaction costs		2,905		5,036		1,531
Payroll and related costs from management services contracts		15,450		12,487		11,626
General and administrative expense		146,378		151,573		133,112
Less:
Net operating income attributable to noncontrolling interests in property partnerships		191,812		186,304		162,887
Gains (losses) from investments in securities		(6,453)		5,626		5,261
Other income - assignment fee		6,624		—		—
Interest and other income (loss)		11,940		5,704		5,953
Gain on sales-type lease		10,058		—		—
Gains on sales of real estate		441,075		125,198		631,945
Direct reimbursements of payroll and related costs from management services contracts		15,450		12,487		11,626
Development and management services revenue		28,056		27,697		29,641
Company’s share of Net Operating Income		$	1,883,796	$	1,735,740	$	1,626,131

Net operating income (“NOI”) is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc. common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders, as applicable, the most directly comparable GAAP financial measures, plus (1) preferred stock/unit redemption charge, preferred dividends/distributions, net income attributable to noncontrolling interests, interest expense, losses from early extinguishment of debt, unrealized loss on non-real estate investment, net operating income from unconsolidated joint ventures, loss from unconsolidated joint ventures, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts and corporate general and administrative expense less (2) gains (losses) from investments in securities, other income - assignment fee, interest and other income (loss), gains on sales-type lease, gains on sales of real estate, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue. The Company believes NOI is useful to investors as a performance measure and believes it provides useful information to investors regarding its results of operations and financial condition because, when compared across periods, it reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income attributable to Boston Properties, Inc. common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. Similarly, interest expense may be incurred at the property level even though the

financing proceeds may be used at the corporate level (e.g., used for other investment activity). In addition, depreciation and amortization expense, because of historical cost accounting and useful life estimates, may distort operating performance measures at the property level. NOI presented by the Company may not be comparable to NOI reported by other REITs or real estate companies that define NOI differently.

The Company’s internal reporting utilizes its share of NOI, which includes its share of NOI from consolidated and unconsolidated joint ventures, which is a non-GAAP financial measure that is calculated as the consolidated amount, plus the Company’s share of the amount from the Company’s unconsolidated joint ventures (calculated based upon the Company’s economic percentage ownership interest and, in some cases, after priority allocations), less the Company’s partners’ share of the amount from the Company’s consolidated joint ventures (calculated based upon the partners’ economic percentage ownership interests and, in some cases, after priority allocations, income allocation to private REIT shareholders and their share of fees due to the Company). The Company’s share of NOI from unconsolidated joint ventures does not include its share of losses from early extinguishment of debt from unconsolidated joint ventures, gains on sales of real estate from unconsolidated joint ventures and gain on sale of investment from unconsolidated joint ventures, both of which are included within Income (Loss) From Unconsolidated Joint Ventures in the Company’s Consolidated Statements of Operations. Management utilizes its share of NOI in assessing its performance as the Company has several significant joint ventures and, in some cases, the Company exercises significant influence over, but does not control, the joint venture, in which case GAAP requires that the Company account for the joint venture entity using the equity method of accounting and the Company does not consolidate it for financial reporting purposes. In other cases, GAAP requires that the Company consolidate the venture even though the Company’s partner(s) owns a significant percentage interest. As a result, the presentations of the Company’s share of NOI should not be considered a substitute for, and should only be considered together with and as a supplement to, the Company’s financial information presented in accordance with GAAP.

Asset information by segment is not reported because the Company does not use this measure to assess performance. Therefore, depreciation and amortization expense is not allocated among segments. Preferred stock/unit redemption charge, preferred dividends/distributions, interest expense, losses from early extinguishment of debt, unrealized loss on non-real estate investment, loss from unconsolidated joint ventures, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts, corporate general and administrative expense, gains (losses) from investments in securities, other income - assignment fee, interest and other income (loss), gain on sales-type lease, gains on sales of real estate, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue are not included in NOI and are provided as reconciling items to the Company’s reconciliations of its share of NOI to net income attributable to common shareholders/unitholders.

The Company’s segments are based on the Company’s method of internal reporting which classifies its operations by geographic area. The Company’s segments by geographic area are Boston, Los Angeles, New York, San Francisco, Seattle and Washington, DC. On September 1, 2021, the Company invested in a joint venture that acquired Safeco Plaza located in Seattle, Washington. As such, the Seattle region was identified as a segment during the third quarter of 2021. The Company also presents information for each segment by property type, including Premier Workplace (which includes office, life sciences and retail), Residential and Hotel.

Parking and other revenue for the year ended December 31, 2022 increased by approximately $25.4 million compared to 2021. These increases were primarily in transient and monthly parking revenue.

Information by geographic area and property type (dollars in thousands):

For the year ended December 31, 2022:


	Boston			Los Angeles			New York			San Francisco			Seattle			Washington, DC			Total
Rental Revenue: (1)
Premier Workplace	$	1,005,156		$	—		$	1,031,479		$	534,397		$	31,978		$	365,402		$	2,968,412
Residential	15,086			—			—			14,769			—			27,326			57,181
Hotel	39,482			—			—			—			—			—			39,482
Total	1,059,724			—			1,031,479			549,166			31,978			392,728			3,065,075
% of Grand Totals	34.58		%	—		%	33.65		%	17.92		%	1.04		%	12.81		%	100.00		%
Rental Expenses:
Premier Workplace	360,218			—			391,293			183,353			8,386			135,237			1,078,487
Residential	5,961			—			—			11,371			—			12,251			29,583
Hotel	27,478			—			—			—			—			—			27,478
Total	393,657			—			391,293			194,724			8,386			147,488			1,135,548
% of Grand Totals	34.66		%	—		%	34.46		%	17.15		%	0.74		%	12.99		%	100.00		%
Net operating income	$	666,067		$	—		$	640,186		$	354,442		$	23,592		$	245,240		$	1,929,527
% of Grand Totals	34.52		%	—		%	33.18		%	18.37		%	1.22		%	12.71		%	100.00		%
Less: Net operating income attributable to noncontrolling interests in property partnerships	(45,822)			—			(145,990)			—			—			—			(191,812)
Add: Company’s share of net operating income (loss) from unconsolidated joint ventures	34,233			53,023			1,594			12,785			7,690			36,756			146,081
Company’s share of net operating income	$	654,478		$	53,023		$	495,790		$	367,227		$	31,282		$	281,996		$	1,883,796
% of Grand Totals	34.75		%	2.81		%	26.32		%	19.49		%	1.66		%	14.97		%	100.00		%

(1)Rental Revenue is equal to Total Revenue per the Company’s Consolidated Statements of Operations, less Development and Management Services Revenue and Direct Reimbursements of Payroll and Related Costs from Management Services Contracts Revenue per the Consolidated Statements of Operations.

For the year ended December 31, 2021:


	Boston			Los Angeles			New York			San Francisco			Seattle				Washington, DC			Total
Rental Revenue: (1)
Premier Workplace	$	930,560		$	—		$	1,012,172		$	508,620		$	—			$	340,808		$	2,792,160
Residential	13,397			—			—			3,892			—				25,379			42,668
Hotel	13,609			—			—			—			—				—			13,609
Total	957,566			—			1,012,172			512,512			—				366,187			2,848,437
% of Grand Totals	33.62		%	—		%	35.53		%	17.99		%	—		%		12.86		%	100.00		%
Rental Expenses:
Premier Workplace	322,298			—			379,267			168,040			—				127,102			996,707
Residential	5,811			—			—			6,717			—				11,916			24,444
Hotel	12,998			—			—			—			—				—			12,998
Total	341,107			—			379,267			174,757			—			—	139,018			1,034,149
% of Grand Totals	32.98		%	—		%	36.67		%	16.90		%	—		%		13.45		%	100.00		%
Net operating income	$	616,459		$	—		$	632,905		$	337,755		$	—			$	227,169		$	1,814,288
% of Grand Totals	33.98		%	—		%	34.88		%	18.62		%	—		%		12.52		%	100.00		%
Less: Net operating income attributable to noncontrolling interests in property partnerships	(43,232)			—			(143,072)			—			—				—			(186,304)
Add: Company’s share of net operating income (loss) from unconsolidated joint ventures	16,551			51,641			(664)			14,152			2,498				23,578			107,756
Company’s share of net operating income	$	589,778		$	51,641		$	489,169		$	351,907		$	2,498			$	250,747		$	1,735,740
% of Grand Totals	33.98		%	2.98		%	28.18		%	20.27		%	0.14		%		14.45		%	100.00		%

For the year ended December 31, 2020:


	Boston			Los Angeles			New York			San Francisco			Washington, DC			Total
Rental Revenue: (1)
Premier Workplace	$	897,915		$	—		$	935,966		$	508,327		$	336,587		$	2,678,795
Residential	13,616			—			—			155			24,375			38,146
Hotel	7,478			—			—			—			—			7,478
Total	919,009			—			935,966			508,482			360,962			2,724,419
% of Grand Totals	33.73		%	—		%	34.36		%	18.66		%	13.25		%	100.00		%
Rental Expenses:
Premier Workplace	318,509			—			384,753			163,156			132,051			998,469
Residential	5,378			—			—			2,261			11,100			18,739
Hotel	13,136			—			—			—			—			13,136
Total	337,023			—			384,753			165,417			143,151			1,030,344
% of Grand Totals	32.71		%	—		%	37.35		%	16.05		%	13.89		%	100.00		%
Net operating income	$	581,986		$	—		$	551,213		$	343,065		$	217,811		$	1,694,075
% of Grand Totals	34.35		%	—		%	32.54		%	20.25		%	12.86		%	100.00		%
Less: Net operating income attributable to noncontrolling interests in property partnerships	(41,849)			—			(121,038)			—			—			(162,887)
Add: Company’s share of net operating income from unconsolidated joint ventures	10,765			57,907			(5,326)			14,928			16,669			94,943
Company’s share of net operating income	$	550,902		$	57,907		$	424,849		$	357,993		$	234,480		$	1,626,131
% of Grand Totals	33.88		%	3.56		%	26.12		%	22.02		%	14.42		%	100.00		%

12. Earnings Per Share / Common Unit

BXP

The following table provides a reconciliation of both the net income attributable to Boston Properties, Inc. common shareholders and the number of common shares used in the computation of basic earnings per share (“EPS”), which is calculated by dividing net income attributable to Boston Properties, Inc. common shareholders by the weighted-average number of common shares outstanding during the period. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are also participating securities. As such, unvested restricted common stock of BXP and BPLP’s LTIP Units, 2012 OPP Units and MYLTIP Units are considered participating securities. Participating securities are included in the computation of basic EPS of BXP using the two-class method. Participating securities are included in the computation of diluted EPS of BXP using the if-converted method if the impact is dilutive. Because the 2012 OPP Units and 2013 - 2019 MYLTIP Units required, and the 2020 - 2022 MYLTIP Units require, BXP to outperform absolute and/or relative return thresholds, unless such thresholds have been met by the end of the applicable reporting period, BXP excludes such units from the diluted EPS calculation. Other potentially dilutive common shares, including stock options, restricted stock and other securities of BPLP that are exchangeable for BXP’s Common Stock, and the related impact on earnings, are considered when calculating diluted EPS.


	Year ended December 31, 2022
	Income (Numerator)		Shares (Denominator)	Per Share Amount
	(in thousands, except for per share amounts)
Basic Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	848,947	156,726	$	5.42
Allocation of undistributed earnings to participating securities	(891)		—	(0.01)
Net income attributable to Boston Properties, Inc. common shareholders	848,056		156,726	5.41
Effect of Dilutive Securities:
Stock Based Compensation	—		411	(0.01)
Diluted Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	848,056	157,137	$	5.40

	Year ended December 31, 2021
	Income (Numerator)		Shares (Denominator)	Per Share Amount
	(in thousands, except for per share amounts)
Basic Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	496,223	156,116	$	3.18
Allocation of undistributed earnings to participating securities	—		—	—
Net income attributable to Boston Properties, Inc. common shareholders	$	496,223	156,116	$	3.18
Effect of Dilutive Securities:
Stock Based Compensation	—		260	(0.01)
Diluted Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	496,223	156,376	$	3.17

	Year ended December 31, 2020
	Income (Numerator)		Shares (Denominator)	Per Share Amount
	(in thousands, except for per share amounts)
Basic Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	862,227	155,432	$	5.55
Allocation of undistributed earnings to participating securities	(748)		—	(0.01)
Net income attributable to Boston Properties, Inc. common shareholders	$	861,479	155,432	$	5.54
Effect of Dilutive Securities:
Stock Based Compensation	—		85	—
Diluted Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	861,479	155,517	$	5.54

BPLP

The following table provides a reconciliation of both the net income attributable to Boston Properties Limited Partnership common unitholders and the number of common units used in the computation of basic earnings per common unit, which is calculated by dividing net income attributable to Boston Properties Limited Partnership common unitholders by the weighted-average number of common units outstanding during the period. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are also participating securities. As such, unvested restricted common stock of BXP and BPLP’s LTIP Units, 2012 OPP Units and MYLTIP Units are considered participating securities. Participating securities are included in the computation of basic earnings per common unit using the two-class method. Participating securities are included in the computation of diluted earnings per common unit using the if-converted method if the impact is dilutive. Because the 2012 OPP Units and 2013 - 2019 MYLTIP Units required, and the 2020 - 2022 MYLTIP Units require, BXP to outperform absolute and/or relative return thresholds, unless such thresholds have been met by the end of the applicable reporting period, BPLP excludes such units from the diluted earnings per common unit calculation. Other potentially dilutive common units and the related impact on earnings are considered when calculating diluted earnings per common unit. Included in the number of units (the denominator) below are approximately 17,634,000, 17,034,000 and 17,211,000 redeemable common units for the years ended December 31, 2022, 2021 and 2020, respectively.


	Year ended December 31, 2022
	Income (Numerator)		Units (Denominator)	Per Unit Amount
	(in thousands, except for per unit amounts)
Basic Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	957,265	174,360	$	5.49
Allocation of undistributed earnings to participating securities	(991)		—	(0.01)
Net income attributable to Boston Properties Limited Partnership common unitholders	$	956,274	174,360	$	5.48
Effect of Dilutive Securities:
Stock Based Compensation	—		411	(0.01)
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	956,274	174,771	$	5.47

	Year ended December 31, 2021
	Income (Numerator)		Units (Denominator)	Per Unit Amount
	(in thousands, except for per unit amounts)
Basic Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	561,993	173,150	$	3.25
Allocation of undistributed earnings to participating securities	—		—	—
Net income attributable to Boston Properties Limited Partnership common unitholders	$	561,993	173,150	$	3.25
Effect of Dilutive Securities:
Stock Based Compensation	—		260	(0.01)
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	561,993	173,410	$	3.24


	Year ended December 31, 2020
	Income (Numerator)		Units (Denominator)	Per Unit Amount
	(in thousands, except for per unit amounts)
Basic Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	979,979	172,643	$	5.68
Allocation of undistributed earnings to participating securities	(830)		—	(0.01)
Net income attributable to Boston Properties Limited Partnership common unitholders	$	979,149	172,643	$	5.67
Effect of Dilutive Securities:
Stock Based Compensation	—		85	—
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	979,149	172,728	$	5.67

13. Employee Benefit Plans

Effective January 1, 1985, the predecessor of the Company adopted a 401(k) Savings Plan (the “Plan”) for its employees. Upon formation, the Company adopted the Plan and the terms of the Plan.

Under the Plan, as amended, the Company’s matching contribution equals 200% of the first 3% of participant’s eligible earnings contributed (utilizing earnings that are not in excess of an amount established by the IRS ($305,000, $290,000 and $285,000 in 2022, 2021 and 2020, respectively), indexed for inflation) with no vesting requirement. The Company’s aggregate matching contribution for the years ended December 31, 2022, 2021 and 2020 was approximately $4.8 million, $4.7 million and $4.0 million, respectively.

The Company also maintains a deferred compensation plan that is designed to allow officers of BXP to defer a portion of the officer’s current income on a pre-tax basis and receive a tax-deferred return on these deferrals based on the performance of specific investments selected by the officer. The Company’s obligation under the plan is that of an unsecured promise to pay the deferred compensation to the plan participants in the future. At December 31, 2022 and 2021, the Company had maintained approximately $31.7 million and $42.7 million, respectively, in a separate account, which is not restricted as to its use. The Company’s liability under the plan is equal to the total amount of compensation deferred by the plan participants and earnings on the deferred compensation pursuant to investments elected by the plan participants. The Company’s liability as of December 31, 2022 and 2021 was approximately $31.7 million and $42.7 million, respectively, which are included in the accompanying Consolidated Balance Sheets.

14. Stock Option and Incentive Plan

At BXP’s 2021 annual meeting of stockholders held on May 20, 2021, its stockholders approved the Boston Properties, Inc. 2021 Stock Incentive Plan (the “2021 Plan”). The 2021 Plan replaces the Boston Properties, Inc. 2012 Stock Option and Incentive Plan (the “2012 Plan”) and no further awards will be issued under the 2012 Plan. The material features of the 2021 Plan include, among other things: (i) the maximum number of shares of common stock reserved and available for issuance under the 2021 Plan is 5,400,000 shares less one share for every one share that was granted between March 4, 2021 and May 19, 2021 under the 2012 Plan, (ii) shares of common stock underlying awards granted under the 2021 Plan or the 2012 Plan that are forfeited, canceled or otherwise terminated (other than by exercise) will be added back to the shares of common stock available for issuance under the 2021 Plan and, with respect to “full-value” awards under the 2021 Plan or the 2012 Plan, shares tendered or held back for taxes and shares previously reserved for issuance pursuant to such an award to the extent that such shares are not issued and are no longer issuable pursuant to such an award (e.g., in the event that a full-value award that may be settled in cash or by issuance of shares of common stock is settled in cash) will be added back to the shares available for issuance under the 2021 Plan, (iii) the award of stock options (both incentive and non-qualified options), stock appreciation rights, restricted stock units, restricted stock, unrestricted stock, dividend equivalent rights, cash-based awards and other equity-based awards (including LTIP Units) is permitted, (iv) stock options may not be repriced and “underwater” stock options may not be exchanged for another award or cash

without stockholder approval; and (v) the term of the 2021 Plan is for ten years from the date of stockholder approval.

On February 1, 2022, BXP’s Compensation Committee approved the 2022 MYLTIP awards under the 2021 Plan to certain officers and employees of BXP. The 2022 MYLTIP awards consist of two, equally weighted (50% each) components that utilize BXP’s TSR over a three-year measurement period as the performance metric.

The first component of the 2022 MYLTIP represents one-half (50%) of the target grant-date value of the award. The number of LTIP Units that can be earned under this component ranges from zero to 200% of the target number of LTIP Units, based on BXP’s three-year, annualized relative TSR performance compared to a custom index of peer companies. Under this component, 100% of the target number of LTIP Units will be earned if BXP’s TSR equals the custom index TSR; for relative TSR performance between -1,000 basis points and +1,000 basis points, the number of LTIP Units earned will be determined using linear interpolation.

The second component represents the remaining one-half (50%) of the target grant-date value of the 2022 MYLTIP. The number of LTIP Units that can be earned under this component ranges from zero to 200% of the target number of LTIP Units, based on BXP’s non-annualized, cumulative absolute TSR during the three-year performance period. Under this component, 100% of the target number of LTIP Units will be earned if BXP achieves an absolute TSR equal to +1,000 basis points; if BXP’s absolute TSR is greater than -4,000 basis points but less than +6,000 basis points, then the number of LTIP Units earned will be determined using linear interpolation.

Total earned awards under the 2022 MYLTIP, if any, will equal the sum of the number of LTIP Units earned under the first and second components and will range from zero to a maximum of 254,061 LTIP Units with a target of approximately 127,031 LTIP Units and linear interpolation between zero and maximum. Earned awards (if any) will vest 100% on January 31, 2025, but may not be converted, redeemed, sold or otherwise transferred for one additional year thereafter. Vesting will be accelerated in the event of a change in control, termination of employment by BXP without cause, or termination of employment by the award recipient for good reason, death, disability or retirement. If there is a change of control prior to January 31, 2025, earned awards will be calculated based on TSR performance up to the date of the change of control. The 2022 MYLTIP awards are in the form of LTIP Units issued on the grant date, and they are subject to forfeiture to the extent awards are not earned. Prior to the performance measurement date holders of the 2022 MYLTIP Units are only entitled to one-tenth (10%) of the regular quarterly distributions payable on common partnership units. Following the completion of the three-year performance period, the Company will also make a “catch-up” cash payment on the 2022 MYLTIP Units that are ultimately earned in an amount equal to the regular and special distributions, if any, declared during the performance period on BXP’s Common Stock, less the distributions actually paid to holders of 2022 MYLTIP Units during the performance period on all of the awarded 2022 MYLTIP Units. Under ASC 718 “Compensation - Stock Compensation,” the 2022 MYLTIP awards have an aggregate value of approximately $17.3 million, which amount will generally be amortized into earnings under the graded vesting method.

On February 6, 2020, the measurement period for the Company’s 2017 MYLTIP awards ended and, based on BXP’s relative TSR performance, the final awards were determined to be 83.8% of target, or an aggregate of approximately $17.6 million (after giving effect to employee separations). As a result, an aggregate of 270,942 2017 MYLTIP Units that had been previously granted were automatically forfeited.

BXP issued 41,818, 57,383 and 29,630 shares of restricted common stock and BPLP issued 280,616, 281,640 and 207,181 LTIP Units to employees and non-employee directors under the 2012 Plan and the 2021 Plan during the years ended December 31, 2022, 2021 and 2020, respectively. BXP did not issue any non-qualified stock options under the 2012 Plan or 2021 Plan during the years ended December 31, 2022, 2021 and 2020. BPLP issued 254,061 2022 MYLTIP Units, 352,021 2021 MYLTIP Units and 203,278 2020 MYLTIP Units to employees

under the 2012 Plan and 2021 Plan during the years ended December 31, 2022, 2021 and 2020, respectively. Employees and non-employee directors paid $0.01 per share of restricted common stock and $0.25 per LTIP Unit and MYLTIP Unit. When issued, LTIP Units are not economically equivalent in value to a share of Common Stock, but over time can increase in value to one-for-one parity with Common Stock if there is sufficient appreciation in the value of the Company’s assets. The aggregate value of the LTIP Units is included in noncontrolling interests in the Consolidated Balance Sheets of BXP and BPLP. A majority of the grants of restricted common stock and LTIP Units to employees vest in four equal annual installments. Restricted common stock is measured at fair value on the date of grant based on the number of shares granted and the closing price of BXP’s Common Stock on the date of grant as quoted on the New York Stock Exchange. Such value is recognized as an expense ratably over the corresponding employee service period. Because the 2012 OPP Units and 2013 - 2022 MYLTIP Units are subject to both a service condition and a market condition, the Company recognizes the related compensation expense under the graded vesting attribution method. Under the graded vesting attribution method, each portion of the award that vests at a different date is accounted for as a separate award and recognized over the period appropriate to that portion so that the compensation cost for each portion should be recognized in full by the time that portion vests. The Company recognizes forfeitures as they occur on its awards of stock-based compensation. Dividends paid on both vested and unvested shares of restricted stock are charged directly to Dividends in Excess of Earnings in BXP’s Consolidated Balance Sheets and Partners’ Capital in BPLP’s Consolidated Balance Sheets. Aggregate stock-based compensation expense associated with restricted stock, LTIP Units and 2017 - 2022 MYLTIP Units was approximately $50.7 million, $49.7 million and $43.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022, there was (1) an aggregate of approximately $20.6 million of unrecognized compensation expense related to unvested restricted stock and LTIP Units and (2) an aggregate of approximately $4.9 million of unrecognized compensation expense related to unvested 2020 - 2022 MYLTIP Units that is expected to be recognized over a weighted-average period of approximately 1.9 years.

The shares of restricted stock were valued at approximately $4.7 million ($111.47 per share weighted-average), $5.8 million ($100.60 per share weighted-average) and $4.0 million ($133.81 per share weighted-average) for the years ended December 31, 2022, 2021 and 2020, respectively.

LTIP Units were valued using a Monte Carlo simulation method model in accordance with the provisions of ASC 718. LTIP Units issued during the years ended December 31, 2022, 2021 and 2020 were valued at approximately $28.9 million, $23.8 million and $26.3 million, respectively. The weighted-average per unit fair value of LTIP Unit grants in 2022, 2021 and 2020 was $103.06, $84.43 and $127.14, respectively. The per unit fair value of each LTIP Unit granted in 2022, 2021 and 2020 was estimated on the date of grant using the following assumptions; an expected life of 5.7 years, 5.7 years and 5.7 years, a risk-free interest rate of 1.71%, 0.65% and 1.47% and an expected price volatility of 31.0%, 30.0% and 18.0%, respectively.

There were no non-qualified stock options granted during the years ended December 31, 2022, 2021 and 2020.

A summary of the status of BXP’s stock options as of December 31, 2022, 2021 and 2020 and changes during the years then ended are presented below:


	Shares	Weighted-Average Exercise Price
Outstanding at December 31, 2019	395,353	$	96.37
Exercised	(43,792)	$	91.60
Outstanding at December 31, 2020	351,561	$	96.97
Exercised	(247,920)	$	96.95
Outstanding at December 31, 2021	103,641	$	97.01
Exercised	—	$	—
Outstanding at December 31, 2022	103,641	$	97.01

The following table summarizes information about BXP’s stock options outstanding at December 31, 2022:


Options Outstanding				Options Exercisable
Number Outstanding at 12/31/22	Weighted-Average Remaining Contractual Life	Exercise Price		Number Exercisable at 12/31/22	Exercise Price
54,282	0.3 years	$	95.69	54,282	$	95.69
49,359	0.1 years	$	98.46	49,359	$	98.46

There was no total intrinsic value for the outstanding and exercisable stock options as of December 31, 2022. In addition, BXP had 103,641 and 103,641 options exercisable and vested at a weighted-average exercise price of $97.01 and $97.01 at December 31, 2022 and 2021, respectively.

BXP adopted the 1999 Non-Qualified Employee Stock Purchase Plan (the “Stock Purchase Plan”) to encourage the ownership of Common Stock by eligible employees. The Stock Purchase Plan became effective on January 1, 1999 with an aggregate maximum of 250,000 shares of Common Stock available for issuance. The Stock Purchase Plan provides for eligible employees to purchase on the business day immediately following the end of the biannual purchase periods (i.e., January 1-June 30 and July 1-December 31) shares of Common Stock at a purchase price equal to 85% of the average closing prices of the Common Stock during the last ten business days of the purchase period. BXP issued 9,813, 9,846 and 7,195 shares with the weighted-average purchase price equal to $87.30 per share, $89.73 per share and $90.53 per share under the Stock Purchase Plan during the years ended December 31, 2022, 2021 and 2020, respectively.

15. Related Party Transactions

A firm controlled by Mr. Raymond A. Ritchey’s brother was paid aggregate leasing commissions of approximately $914,000 during the year ended December 31, 2020 related to certain exclusive leasing arrangements for certain Northern Virginia properties. There were no payments made for the years ended December 31, 2022 and 2021. In addition, Mr. Ritchey’s brother is employed by a real estate brokerage firm and participated in brokerage activities for which the Company paid the firm approximately $1.6 million, $1.9 million and $3.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. Mr. Ritchey is a Senior Executive Vice President of BXP.

On July 13, 2018, the Company entered into a joint venture with a third party to acquire a development site at 3 Hudson Boulevard that, upon the future acquisition of additional available development rights, can accommodate an office tower with up to 2.0 million net rentable square feet located on the entire square block between 11th Avenue and Hudson Boulevard Park from West 34th Street to West 35th Street in New York City. The Company owns a 25% interest in, and is the managing member of, the joint venture. The Company provided $80.0 million of mortgage financing to the joint venture that bears interest at a variable rate equal to LIBOR plus 3.50% per annum and matures on July 13, 2023, with extension options, subject to certain conditions. The loan has been reflected as a Related Party Note Receivable, Net on the Company’s Consolidated Balance Sheets. The Company has recognized interest income of approximately $5.6 million, $3.6 million and $2.7 million for the years ended December 31, 2022, 2021 and 2020, respectively. The Company's policy is to record notes receivable at their unamortized cost, net of any unamortized deferred fees or costs, premiums or discounts and an allowance for loan losses. Loan fees and direct costs associated with loans originated by the Company are deferred and amortized over the term of the note as interest income.

In accordance with the 2021 Plan, and as approved by its Board of Directors, seven non-employee directors made elections to receive deferred stock units in lieu of cash fees for 2022. As a result of these elections, the aggregate cash fees otherwise payable to a non-employee director during a fiscal quarter are converted into a number of deferred stock units equal to the aggregate cash fees divided by the last reported sales price of a share of BXP’s Common Stock on the last trading of the applicable fiscal quarter. The deferred stock units are also credited with dividend equivalents as dividends are paid by BXP. The deferred stock units may be settled in shares of Common Stock upon the cessation of such director’s service on the Board of Directors of BXP. The non-employee director compensation program provides, subject to certain conditions, the non-employee directors holding deferred stock units with the ability to elect, following cessation of their service on BXP’s Board of Directors, to diversify their investment elections into non-employer securities on a pre-tax basis and receive tax-deferred returns on such deferrals, which will ultimately be settled in cash. The Company’s obligation under the plan is that of an unsecured promise to pay the deferred compensation to the non-employee director in the future. At

December 31, 2022 and 2021, the Company had maintained approximately $0.6 million and $0.9 million, respectively, in a separate account, which is not restricted as to its use. The Company’s liability under the plan is equal to the total amount of compensation deferred by the non-employee director and earnings on the deferred compensation pursuant to investments elected by the non-employee director. The Company’s liability as of December 31, 2022 and 2021 was approximately $0.6 million and $0.9 million, respectively, which is included in the accompanying Consolidated Balance Sheets. The terms of the non-employee director compensation program require the classification of these deferred stock units as temporary equity on the Consolidated Balance Sheets of Boston Properties, Inc. and Boston Properties Limited Partnership within Redeemable Deferred Stock Units. On December 16, 2021, in connection with the resignation of a director’s service on the Board of Directors of BXP, BXP issued 498 shares of Common Stock in settlement of the director’s outstanding deferred stock units. At December 31, 2022 and 2021, BXP had outstanding 97,853 and 83,073 deferred stock units, respectively.

16. Subsequent Events

On January 4, 2023, BPLP entered into the 2023 Unsecured Term Loan, which provided for a single borrowing of up to $1.2 billion. Under the credit agreement, BPLP may, at any time prior to the maturity date, increase total commitments by up to an additional $300.0 million in aggregate principal amount by increasing the existing 2023 Unsecured Term Loan or incurring one or more additional term loans, in each case, subject to syndication of the increase and other conditions. The 2023 Unsecured Term Loan matures on May 16, 2024, with one 12-month extension option, subject to customary conditions. Upon entry into the credit agreement, BPLP exercised its option to draw $1.2 billion under the 2023 Unsecured Term Loan, a portion of which was used to repay in full the 2022 Unsecured Term Loan, which was scheduled to mature on May 16, 2023 (see Note 7).

At BPLP’s option, loans under the 2023 Unsecured Term Loan will bear interest at a rate per annum equal to (1) a base rate equal to the greatest of (a) the Federal Funds rate plus 1/2 of 1%, (b) the administrative agent’s prime rate, (c) Term SOFR for a one-month period plus 1.00%, and (d) 1.00%, in each case, plus a margin ranging from 0 to 60 basis points based on BPLP’s credit rating; or (2) a rate equal to adjusted Term SOFR with a one-month period plus a margin ranging from 75 to 160 basis points based on BPLP’s credit rating. Based on BPLP’s credit rating upon entry into the credit agreement, the base rate margin is 0 basis points and the Term SOFR margin is 0.85%. The 2023 Unsecured Term Loan currently bears interest at a rate equal to adjusted Term SOFR plus 0.85%.

On January 5, 2023, the Company commenced the development of 290 Binney Street, an approximately 566,000 net rentable square feet laboratory/life sciences project in Cambridge, Massachusetts. Concurrent with the commencement of this project, the Company began demolition of the existing Kendall Center Blue Parking Garage to support the development of this project. 290 Binney Street is 100% pre-leased to AstraZeneca (See Note 3).

On January 30, 2023, the Company commenced the redevelopment of 300 Binney Street at Kendall Center in Cambridge, Massachusetts. 300 Binney Street consisted of an approximately 195,000 net rentable square foot premier workplace that is being redeveloped into approximately 240,000 net rentable square feet of laboratory/life sciences space. The project is 100% pre-leased to a life sciences organization.

On January 31, 2023, the Company acquired a 50% interest in a joint venture that owns 13100 and 13150 Worldgate Drive located in Herndon, Virginia for a gross purchase price of approximately $17.0 million. The acquisition was completed with available cash. 13100 and 13150 Worldgate Drive consists of two vacant office buildings aggregating approximately 350,000 rentable square feet and a 1,200-space structured parking deck situated on a 10-acre site. The joint venture intends to redevelop the property for residential use. There can be no assurance that the joint venture will commence the development on the terms currently contemplated or at all.

On January 25, 2023, BXP’s Compensation Committee approved the 2023 Multi-Year Long-Term Incentive Program (the “2023 MYLTIP”) awards under the 2021 Plan to certain executive officers of BXP. Earned awards will range from zero to a maximum of 322,053 LTIP Units depending on BXP’s relative and absolute TSR performance, with a target of approximately 161,026 LTIP Units. Under ASC 718, the 2023 MYLTIP awards have an aggregate value of approximately $13.1 million.

On February 3, 2023 and February 7, 2023, BXP issued an aggregate of 64,731 shares of restricted common stock and BPLP issued an aggregate of 401,543 LTIP Units under the 2021 Plan to certain employees of BXP.

On February 3, 2023, the measurement period for the Company’s 2020 MYLTIP awards ended and, based on BXP.’s relative TSR performance, the final payout was determined to be 50% of target, or an aggregate of

approximately $3.8 million (after giving effect to employee separations). As a result, an aggregate of 152,460 2020 MYLTIP Units that had been previously granted were automatically forfeited.

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