Item 1. Financial Statements.

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Item 1. Financial Statements.


BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except for share and par value amounts)
	September 30, 2022		December 31, 2021
ASSETS
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $6,753,779 and $6,702,830 at September 30, 2022 and December 31, 2021, respectively)	$	25,192,376	$	23,752,630
Right of use assets - finance leases (amounts related to VIEs of $21,000 and $21,000 at September 30, 2022 and December 31, 2021, respectively)	237,505		237,507
Right of use assets - operating leases	167,935		169,778
Less: accumulated depreciation (amounts related to VIEs of $(1,352,781) and $(1,283,060) at September 30, 2022 and December 31, 2021, respectively)	(6,170,472)		(5,883,961)
Total real estate	19,427,344		18,275,954
Cash and cash equivalents (amounts related to VIEs of $249,124 and $300,937 at September 30, 2022 and December 31, 2021, respectively)	375,774		452,692
Cash held in escrows	73,112		48,466
Investments in securities	30,040		43,632
Tenant and other receivables, net (amounts related to VIEs of $11,842 and $6,824 at September 30, 2022 and December 31, 2021, respectively)	69,633		70,186
Related party note receivable, net	78,592		78,336
Notes receivable, net	—		9,641
Accrued rental income, net (amounts related to VIEs of $359,439 and $357,395 at September 30, 2022 and December 31, 2021, respectively)	1,250,176		1,226,745
Deferred charges, net (amounts related to VIEs of $176,908 and $174,637 at September 30, 2022 and December 31, 2021, respectively)	720,648		618,798
Prepaid expenses and other assets (amounts related to VIEs of $44,525 and $29,668 at September 30, 2022 and December 31, 2021, respectively)	107,538		57,811
Investments in unconsolidated joint ventures	1,593,834		1,482,997
Total assets	$	23,726,691	$	22,365,258
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net (amounts related to VIEs of $3,271,157 and $3,267,914 at September 30, 2022 and December 31, 2021, respectively)	$	3,271,157	$	3,267,914
Unsecured senior notes, net	9,491,714		9,483,695
Unsecured line of credit	340,000		145,000
Unsecured term loan, net	730,000		—
Lease liabilities - finance leases (amounts related to VIEs of $20,568 and $20,458 at September 30, 2022 and December 31, 2021, respectively)	248,092		244,421
Lease liabilities - operating leases	205,008		204,561
Accounts payable and accrued expenses (amounts related to VIEs of $35,043 and $29,464 at September 30, 2022 and December 31, 2021, respectively)	360,572		320,775
Dividends and distributions payable	170,952		169,859
Accrued interest payable	91,885		94,796

Other liabilities (amounts related to VIEs of $104,663 and $150,131 at September 30, 2022 and December 31, 2021, respectively)	417,255		391,441
Total liabilities	15,326,635		14,322,462

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BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except for share and par value amounts)
	September 30, 2022		December 31, 2021
Commitments and contingencies (See Note 7)
Redeemable deferred stock units— 93,175 and 83,073 units outstanding at redemption value at September 30, 2022 and December 31, 2021, respectively	6,985		9,568
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, 156,833,612 and 156,623,749 issued and 156,754,712 and 156,544,849 outstanding at September 30, 2022 and December 31, 2021, respectively	1,568		1,565
Additional paid-in capital	6,532,299		6,497,730
Dividends in excess of earnings	(359,536)		(625,891)
Treasury common stock at cost, 78,900 shares at September 30, 2022 and December 31, 2021	(2,722)		(2,722)
Accumulated other comprehensive loss	(15,991)		(36,662)
Total stockholders’ equity attributable to Boston Properties, Inc.	6,155,618		5,834,020
Noncontrolling interests:
Common units of Boston Properties Limited Partnership	685,952		642,655
Property partnerships	1,551,501		1,556,553
Total equity	8,393,071		8,033,228
Total liabilities and equity	$	23,726,691	$	22,365,258

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

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BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in thousands, except for per share amounts)


	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Revenue
Lease	$	739,255	$	692,260	$	2,179,274	$	2,062,102
Parking and other	28,154		23,507		80,234		58,727
Hotel	11,749		5,189		28,395		7,382
Development and management services	7,465		6,094		19,650		20,181
Direct reimbursements of payroll and related costs from management services contracts	3,900		3,006		11,204		9,166
Total revenue	790,523		730,056		2,318,757		2,157,558
Expenses
Operating
Rental	281,702		258,281		825,805		764,373
Hotel	8,548		3,946		19,832		7,993
General and administrative	32,519		34,560		110,378		117,924
Payroll and related costs from management services contracts	3,900		3,006		11,204		9,166
Transaction costs	1,650		1,888		2,146		2,970
Depreciation and amortization	190,675		179,412		551,445		539,815
Total expenses	518,994		481,093		1,520,810		1,442,241
Other income (expense)
Loss from unconsolidated joint ventures	(3,524)		(5,597)		(1,389)		(1,745)
Gains on sales of real estate	262,345		348		381,293		8,104
Interest and other income (loss)	3,728		1,520		6,151		4,140
Other income - assignment fee	—		—		6,624		—
Gains (losses) from investments in securities	(1,571)		(190)		(8,549)		3,744
Losses from early extinguishment of debt	—		—		—		(898)
Interest expense	(111,846)		(105,794)		(317,216)		(320,015)
Net income	420,661		139,250		864,861		408,647
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships	(18,801)		(18,971)		(54,896)		(52,602)
Noncontrolling interest—common units of the Operating Partnership	(40,883)		(11,982)		(82,821)		(35,393)
Net income attributable to Boston Properties, Inc.	360,977		108,297		727,144		320,652
Preferred dividends	—		—		—		(2,560)
Preferred stock redemption charge	—		—		—		(6,412)
Net income attributable to Boston Properties, Inc. common shareholders	$	360,977	$	108,297	$	727,144	$	311,680
Basic earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income	$	2.30	$	0.69	$	4.63	$	2.00
Weighted average number of common shares outstanding	156,754		156,183		156,708		156,062
Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income	$	2.29	$	0.69	$	4.62	$	1.99
Weighted average number of common and common equivalent shares outstanding	157,133		156,598		157,144		156,394

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

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BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited and in thousands)


	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Net income	$	420,661	$	139,250	$	864,861	$	408,647
Other comprehensive income:
Effective portion of interest rate contracts	10,800		1,088		18,400		5,482
Amortization of interest rate contracts (1)	1,677		1,676		5,030		5,028
Other comprehensive income	12,477		2,764		23,430		10,510
Comprehensive income	433,138		142,014		888,291		419,157
Net income attributable to noncontrolling interests	(59,684)		(30,953)		(137,717)		(87,995)
Other comprehensive income attributable to noncontrolling interests	(1,390)		(401)		(2,757)		(1,423)
Comprehensive income attributable to Boston Properties, Inc.	$	372,064	$	110,660	$	747,817	$	329,739

(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.

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BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF EQUITY (unaudited and in thousands)
	Common 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, June 30, 2022	156,726	$	1,567	$	6,524,997	$	(567,016)	$	(2,722)	$	(27,077)	$	660,214	$	1,552,706	$	8,142,669
Redemption of operating partnership units to common stock	26	1		958		—		—		—		(959)		—		—
Allocated net income for the period	—	—		—		361,100		—		—		40,760		18,801		420,661
Dividends/distributions declared	—	—		—		(153,620)		—		—		(17,930)		—		(171,550)
Shares issued pursuant to stock purchase plan	5	—		436		—		—		—		—		—		436
Net activity from stock option and incentive plan	(2)	—		1,648		—		—		—		6,880		—		8,528
Contributions from noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		—
Distributions to noncontrolling interests in property partnerships	—	—		—		—		—		—		—		(20,150)		(20,150)
Effective portion of interest rate contracts	—	—		—		—		—		9,709		1,091		—		10,800
Amortization of interest rate contracts	—	—		—		—		—		1,377		156		144		1,677
Reallocation of noncontrolling interest	—	—		4,260		—		—		—		(4,260)		—		—
Equity, September 30, 2022	156,755	$	1,568	$	6,532,299	$	(359,536)	$	(2,722)	$	(15,991)	$	685,952	$	1,551,501	$	8,393,071

Equity, June 30, 2021	156,136	$	1,561	$	6,405,916	$	(612,247)	$	(2,722)	$	(43,166)	$	615,308	$	1,725,343	$	8,089,993
Redemption of operating partnership units to common stock	50	1		1,747		—		—		—		(1,748)		—		—
Allocated net income for the period	—	—		—		108,308		—		—		11,971		18,971		139,250
Dividends/distributions declared	—	—		—		(153,082)		—		—		(17,203)		—		(170,285)
Shares issued pursuant to stock purchase plan	4	—		520		—		—		—		—		—		520
Net activity from stock option and incentive plan	16	—		1,185		—		—		—		7,679		—		8,864
Contributions from noncontrolling interests in property partnerships	—	—		—		—		—		—		—		11,318		11,318
Distributions to noncontrolling interests in property partnerships	—	—		—		—		—		—		—		(27,675)		(27,675)
Effective portion of interest rate contracts	—	—		—		—		—		981		107		—		1,088
Amortization of interest rate contracts	—	—		—		—		—		1,382		150		144		1,676
Reallocation of noncontrolling interest	—	—		6,434		—		—		—		(6,434)		—		—
Equity, September 30, 2021	156,206	$	1,562	$	6,415,802	$	(657,021)	$	(2,722)	$	(40,803)	$	609,830	$	1,728,101	$	8,054,749

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BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF EQUITY (unaudited and 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, 2021	156,545	$	1,565	$	—	$	6,497,730	$	(625,891)	$	(2,722)	$	(36,662)	$	642,655	$	1,556,553	$	8,033,228
Redemption of operating partnership units to common stock	178	3		—		6,385		—		—		—		(6,388)		—		—
Allocated net income for the period	—	—		—		—		727,144		—		—		82,821		54,896		864,861
Dividends/distributions declared	—	—		—		—		(460,789)		—		—		(53,789)		—		(514,578)
Shares issued pursuant to stock purchase plan	10	—		—		1,036		—		—		—		—		—		1,036
Net activity from stock option and incentive plan	22	—		—		5,935		—		—		—		39,539		—		45,474
Contributions from noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		849		849
Distributions to noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		(61,229)		(61,229)
Effective portion of interest rate contracts	—	—		—		—		—		—		16,540		1,860		—		18,400
Amortization of interest rate contracts	—	—		—		—		—		—		4,131		467		432		5,030
Reallocation of noncontrolling interest	—	—		—		21,213		—		—		—		(21,213)		—		—
Equity, September 30, 2022	156,755	$	1,568	$	—	$	6,532,299	$	(359,536)	$	(2,722)	$	(15,991)	$	685,952	$	1,551,501	$	8,393,071

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	227	2		—		8,031		—		—		—		(8,033)		—		—
Allocated net income for the period	—	—		—		—		320,652		—		—		35,393		52,602		408,647
Dividends/distributions declared	—	—		—		—		(461,608)		—		—		(51,743)		—		(513,351)
Shares issued pursuant to stock purchase plan	9	—		—		1,004		—		—		—		—		—		1,004
Net activity from stock option and incentive plan	251	3		—		20,893		—		—		—		39,332		—		60,228

Preferred stock redemption	—	—		(200,000)		6,377		—		—		—		—		—		(193,623)
Preferred stock redemption charge	—	—		—		—		(6,412)		—		—		—		—		(6,412)
Contributions from noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		13,738		13,738
Distributions to noncontrolling interests in property partnerships	—	—		—		—		—		—		—		—		(65,604)		(65,604)
Effective portion of interest rate contracts	—	—		—		—		—		—		4,943		539		—		5,482
Amortization of interest rate contracts	—	—		—		—		—		—		4,144		452		432		5,028
Reallocation of noncontrolling interest	—	—		—		22,706		—		—		—		(22,706)		—		—
Equity, September 30, 2021	156,206	$	1,562	$	—	$	6,415,802	$	(657,021)	$	(2,722)	$	(40,803)	$	609,830	$	1,728,101	$	8,054,749

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

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BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands)
	Nine months ended September 30,
	2022		2021
Cash flows from operating activities:
Net income	$	864,861	$	408,647
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	551,445		539,815
Amortization of right of use assets - operating leases	1,843		3,208
Non-cash compensation expense	44,208		43,098
Loss from unconsolidated joint ventures	1,389		1,745
Distributions of net cash flow from operations of unconsolidated joint ventures	20,511		18,462
Losses (gains) from investments in securities	8,549		(3,744)
Allowance for current expected credit losses	(476)		(758)
Non-cash portion of interest expense	19,704		17,584
Settlement of accreted debt discount on redemption of unsecured senior notes	—		(6,290)
Losses from early extinguishments of debt	—		898
Other income - assignment fee	(6,624)		—
Gains on sales of real estate	(381,293)		(8,104)
Change in assets and liabilities:
Tenant and other receivables, net	4,133		13,738
Notes receivable, net	(152)		(419)
Accrued rental income, net	(76,268)		(74,283)
Prepaid expenses and other assets	(46,104)		(61,019)
Lease liabilities - operating leases	447		(24,023)
Accounts payable and accrued expenses	3,167		26,097
Accrued interest payable	(2,900)		(18,237)
Other liabilities	(35,490)		(51,938)
Tenant leasing costs	(58,547)		(37,618)
Total adjustments	47,542		378,212
Net cash provided by operating activities	912,403		786,859
Cash flows from investing activities:
Acquisitions of real estate	(1,320,273)		(218,679)
Construction in progress	(384,083)		(381,104)
Building and other capital improvements	(112,755)		(103,840)
Tenant improvements	(139,986)		(218,878)
Proceeds from sales of real estate	695,231		—
Proceeds from assignment fee	6,624		—
Capital contributions to unconsolidated joint ventures	(109,643)		(95,462)
Capital distributions from unconsolidated joint ventures	36,622		122
Proceeds from sale of investment in unconsolidated joint venture	—		17,789
Proceeds from notes receivable	10,000		—
Investments in securities, net	5,043		1,684
Net cash used in investing activities	(1,313,220)		(998,368)
Cash flows from financing activities:
Repayments of mortgage notes payable	—		(13,261)
Proceeds from unsecured senior notes	—		1,695,996
Redemption of unsecured senior notes	—		(843,710)

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BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands)
	Nine months ended September 30,
	2022		2021
Borrowings on unsecured line of credit	885,000		300,000
Repayments of unsecured line of credit	(690,000)		(300,000)
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	(2,230)		(20,770)
Debt prepayment and extinguishment costs	—		(185)
Net activity from equity transactions	(359)		20,028
Dividends and distributions	(513,486)		(513,381)
Contributions from noncontrolling interests in property partnerships	849		13,738
Distributions to noncontrolling interests in property partnerships	(61,229)		(65,604)
Net cash provided by (used in) financing activities	348,545		(425,899)
Net increase (decrease) in cash and cash equivalents and cash held in escrows	(52,272)		(637,408)
Cash and cash equivalents and cash held in escrows, beginning of period	501,158		1,719,329
Cash and cash equivalents and cash held in escrows, end of period	$	448,886	$	1,081,921

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

Cash and cash equivalents, end of period	$	375,774	$	1,002,728
Cash held in escrows, end of period	73,112		79,193
Cash and cash equivalents and cash held in escrows, end of period	$	448,886	$	1,081,921

Supplemental disclosures:
Cash paid for interest	$	339,067	$	358,015
Interest capitalized	$	40,048	$	36,632

Non-cash investing and financing activities:
Write-off of fully depreciated real estate	$	(95,996)	$	(159,108)
Change in real estate included in accounts payable and accrued expenses	$	29,290	$	(22,104)
Construction in progress, net deconsolidated	$	(11,316)	$	—
Investment in unconsolidated joint ventures recorded upon deconsolidation	$	11,316	$	—
Right-of-use assets obtained in exchange for lease liabilities	$	—	$	26,887
Dividends and distributions declared but not paid	$	170,952	$	169,739
Conversions of noncontrolling interests to stockholders’ equity	$	6,388	$	8,033
Issuance of restricted securities to employees and non-employee directors	$	48,605	$	44,257

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

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BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except for unit amounts)
	September 30, 2022		December 31, 2021
ASSETS
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $6,753,779 and $6,702,830 at September 30, 2022 and December 31, 2021, respectively)	$	24,824,862	$	23,379,243
Right of use assets - finance leases (amounts related to VIEs of $21,000 and $21,000 at September 30, 2022 and December 31, 2021, respectively)	237,505		237,507
Right of use assets - operating leases	167,935		169,778
Less: accumulated depreciation (amounts related to VIEs of $(1,352,781) and $(1,283,060) at September 30, 2022 and December 31, 2021, respectively)	(6,055,172)		(5,772,018)
Total real estate	19,175,130		18,014,510
Cash and cash equivalents (amounts related to VIEs of $249,124 and $300,937 at September 30, 2022 and December 31, 2021, respectively)	375,774		452,692
Cash held in escrows	73,112		48,466
Investments in securities	30,040		43,632
Tenant and other receivables, net (amounts related to VIEs of $11,842 and $6,824 at September 30, 2022 and December 31, 2021, respectively)	69,633		70,186
Related party note receivable, net	78,592		78,336
Notes receivable, net	—		9,641
Accrued rental income, net (amounts related to VIEs of $359,439 and $357,395 at September 30, 2022 and December 31, 2021, respectively)	1,250,176		1,226,745
Deferred charges, net (amounts related to VIEs of $176,908 and $174,637 at September 30, 2022 and December 31, 2021, respectively)	720,648		618,798
Prepaid expenses and other assets (amounts related to VIEs of $44,525 and $29,668 at September 30, 2022 and December 31, 2021, respectively)	107,538		57,811
Investments in unconsolidated joint ventures	1,593,834		1,482,997
Total assets	$	23,474,477	$	22,103,814
LIABILITIES AND CAPITAL
Liabilities:
Mortgage notes payable, net (amounts related to VIEs of $3,271,157 and $3,267,914 at September 30, 2022 and December 31, 2021, respectively)	$	3,271,157	$	3,267,914
Unsecured senior notes, net	9,491,714		9,483,695
Unsecured line of credit	340,000		145,000
Unsecured term loan, net	730,000		—
Lease liabilities - finance leases (amounts related to VIEs of $20,568 and $20,458 at September 30, 2022 and December 31, 2021, respectively)	248,092		244,421
Lease liabilities - operating leases	205,008		204,561
Accounts payable and accrued expenses (amounts related to VIEs of $35,043 and $29,464 at September 30, 2022 and December 31, 2021, respectively)	360,572		320,775
Dividends and distributions payable	170,952		169,859
Accrued interest payable	91,885		94,796

Other liabilities (amounts related to VIEs of $104,663 and $150,131 at September 30, 2022 and December 31, 2021, respectively)	417,255		391,441
Total liabilities	15,326,635		14,322,462
Commitments and contingencies (See Note 7)
Redeemable deferred stock units— 93,175 and 83,073 units outstanding at redemption value at September 30, 2022 and December 31, 2021, respectively	6,985		9,568

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BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except for unit amounts)
	September 30, 2022		December 31, 2021
Noncontrolling interests:
Redeemable partnership units— 16,535,172 and 16,561,186 common units and 1,680,123 and 1,485,376 long term incentive units outstanding at redemption value at September 30, 2022 and December 31, 2021, respectively	1,407,762		2,078,603
Capital:
Boston Properties Limited Partnership partners’ capital— 1,749,700 and 1,745,914 general partner units and 155,005,012 and 154,798,935 limited partner units outstanding at September 30, 2022 and December 31, 2021, respectively	5,197,585		4,173,290
Accumulated other comprehensive loss	(15,991)		(36,662)
Total partners’ capital	5,181,594		4,136,628
Noncontrolling interests in property partnerships	1,551,501		1,556,553
Total capital	6,733,095		5,693,181
Total liabilities and capital	$	23,474,477	$	22,103,814

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

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BOSTON PROPERTIES LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in thousands, except for per unit amounts)


	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Revenue
Lease	$	739,255	$	692,260	$	2,179,274	$	2,062,102
Parking and other	28,154		23,507		80,234		58,727
Hotel	11,749		5,189		28,395		7,382
Development and management services	7,465		6,094		19,650		20,181
Direct reimbursements of payroll and related costs from management services contracts	3,900		3,006		11,204		9,166
Total revenue	790,523		730,056		2,318,757		2,157,558
Expenses
Operating
Rental	281,702		258,281		825,805		764,373
Hotel	8,548		3,946		19,832		7,993
General and administrative	32,519		34,560		110,378		117,924
Payroll and related costs from management services contracts	3,900		3,006		11,204		9,166
Transaction costs	1,650		1,888		2,146		2,970
Depreciation and amortization	188,969		177,677		546,271		533,255
Total expenses	517,288		479,358		1,515,636		1,435,681
Other income (expense)
Loss from unconsolidated joint ventures	(3,524)		(5,597)		(1,389)		(1,745)
Gains on sales of real estate	262,357		348		385,349		8,104
Interest and other income (loss)	3,728		1,520		6,151		4,140
Other income - assignment fee	—		—		6,624		—
Gains (losses) from investments in securities	(1,571)		(190)		(8,549)		3,744
Losses from early extinguishment of debt	—		—		—		(898)
Interest expense	(111,846)		(105,794)		(317,216)		(320,015)
Net income	422,379		140,985		874,091		415,207
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships	(18,801)		(18,971)		(54,896)		(52,602)
Net income attributable to Boston Properties Limited Partnership	403,578		122,014		819,195		362,605
Preferred distributions	—		—		—		(2,560)
Preferred unit redemption charge	—		—		—		(6,412)
Net income attributable to Boston Properties Limited Partnership common unitholders	$	403,578	$	122,014	$	819,195	$	353,633
Basic earnings per common unit attributable to Boston Properties Limited Partnership
Net income	$	2.31	$	0.70	$	4.69	$	2.04
Weighted average number of common units outstanding	174,416		173,194		174,339		173,078
Diluted earnings per common unit attributable to Boston Properties Limited Partnership
Net income	$	2.30	$	0.70	$	4.68	$	2.04
Weighted average number of common and common equivalent units outstanding	174,795		173,609		174,775		173,410

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

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BOSTON PROPERTIES LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited and in thousands)


	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Net income	$	422,379	$	140,985	$	874,091	$	415,207
Other comprehensive income:
Effective portion of interest rate contracts	10,800		1,088		18,400		5,482
Amortization of interest rate contracts (1)	1,677		1,676		5,030		5,028
Other comprehensive income	12,477		2,764		23,430		10,510
Comprehensive income	434,856		143,749		897,521		425,717
Comprehensive income attributable to noncontrolling interests	(18,945)		(19,115)		(55,328)		(53,034)
Comprehensive income attributable to Boston Properties Limited Partnership	$	415,911	$	124,634	$	842,193	$	372,683

(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.

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

Equity, June 30, 2022	1,750	154,977	$	4,716,430	$	(27,077)	$	1,552,706	$	6,242,059	$	1,646,678
Net activity from contributions and unearned compensation	—	2	2,082		—		—		2,082		6,882
Allocated net income for the period	—	—	362,818		—		18,801		381,619		40,760
Distributions	—	—	(153,620)		—		—		(153,620)		(17,930)
Conversion of redeemable partnership units	—	26	959		—		—		959		(959)
Adjustment to reflect redeemable partnership units at redemption value	—	—	268,916		—		—		268,916		(268,916)
Effective portion of interest rate contracts	—	—	—		9,709		—		9,709		1,091
Amortization of interest rate contracts	—	—	—		1,377		144		1,521		156

Distributions to noncontrolling interests in property partnerships	—	—	—		—		(20,150)		(20,150)		—
Equity, September 30, 2022	1,750	155,005	$	5,197,585	$	(15,991)	$	1,551,501	$	6,733,095	$	1,407,762

Equity, June 30, 2021	1,737	154,399	$	4,132,880	$	(43,166)	$	1,725,343	$	5,815,057	$	2,008,478
Net activity from contributions and unearned compensation	—	21	1,705		—		—		1,705		7,679
Allocated net income for the period	—	—	110,043		—		18,971		129,014		11,971
Distributions	—	—	(153,082)		—		—		(153,082)		(17,203)
Conversion of redeemable partnership units	—	50	1,748		—		—		1,748		(1,748)
Adjustment to reflect redeemable partnership units at redemption value	—	—	115,823		—		—		115,823		(115,823)
Effective portion of interest rate contracts	—	—	—		981		—		981		107
Amortization of interest rate contracts	—	—	—		1,382		144		1,526		150
Contributions from noncontrolling interests in property partnerships	—	—	—		—		11,318		11,318		—
Distributions to noncontrolling interests in property partnerships	—	—	—		—		(27,675)		(27,675)		—
Equity, September 30, 2021	1,737	154,470	$	4,209,117	$	(40,803)	$	1,728,101	$	5,896,415	$	1,893,611

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BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CAPITAL AND NONCONTROLLING INTERESTS (unaudited and 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, 2021	1,746	154,799	$	4,173,290	$	—	$	(36,662)	$	1,556,553	$	5,693,181	$	2,078,603
Net activity from contributions and unearned compensation	1	31	6,967		—		—		—		6,967		39,543
Allocated net income for the period	—	—	736,374		—		—		54,896		791,270		82,821
Distributions	—	—	(460,789)		—		—		—		(460,789)		(53,789)
Conversion of redeemable partnership units	3	175	6,388		—		—		—		6,388		(6,388)
Adjustment to reflect redeemable partnership units at redemption value	—	—	735,355		—		—		—		735,355		(735,355)
Effective portion of interest rate contracts	—	—	—		—		16,540		—		16,540		1,860
Amortization of interest rate contracts	—	—	—		—		4,131		432		4,563		467
Contributions from noncontrolling interests in property partnerships	—	—	—		—		—		849		849		—
Distributions to noncontrolling interests in property partnerships	—	—	—		—		—		(61,229)		(61,229)		—
Equity, September 30, 2022	1,750	155,005	$	5,197,585	$	—	$	(15,991)	$	1,551,501	$	6,733,095	$	1,407,762

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	4	255	21,900		—		—		—		21,900		39,332
Allocated net income for the period	—	—	324,652		2,560		—		52,602		379,814		35,393
Distributions	—	—	(459,048)		(2,560)		—		—		(461,608)		(51,743)
Preferred unit redemption	—	—	—		(193,623)		—		—		(193,623)		—
Preferred unit redemption charge	—	—	(6,412)		—		—		—		(6,412)		—
Conversion of redeemable partnership units	2	227	8,033		—		—		—		8,033		(8,033)
Adjustment to reflect redeemable partnership units at redemption value	—	—	(234,647)		—		—		—		(234,647)		234,647
Effective portion of interest rate contracts	—	—	—		—		4,943		—		4,943		539
Amortization of interest rate contracts	—	—	—		—		4,144		432		4,576		452
Contributions from noncontrolling interests in property partnerships	—	—	—		—		—		13,738		13,738		—
Distributions to noncontrolling interests in property partnerships	—	—	—		—		—		(65,604)		(65,604)		—
Equity, September 30, 2021	1,737	154,470	$	4,209,117	$	—	$	(40,803)	$	1,728,101	$	5,896,415	$	1,893,611

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

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BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands)
	Nine months ended September 30,
	2022		2021
Cash flows from operating activities:
Net income	$	874,091	$	415,207
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	546,271		533,255
Amortization of right of use assets - operating leases	1,843		3,208
Non-cash compensation expense	44,208		43,098
Loss from unconsolidated joint ventures	1,389		1,745
Distributions of net cash flow from operations of unconsolidated joint ventures	20,511		18,462
Losses (gains) from investments in securities	8,549		(3,744)
Allowance for current expected credit losses	(476)		(758)
Non-cash portion of interest expense	19,704		17,584
Settlement of accreted debt discount on redemption of unsecured senior notes	—		(6,290)
Losses from early extinguishments of debt	—		898
Other income - assignment fee	(6,624)		—
Gains on sales of real estate	(385,349)		(8,104)
Change in assets and liabilities:
Tenant and other receivables, net	4,133		13,738
Notes receivable, net	(152)		(419)
Accrued rental income, net	(76,268)		(74,283)
Prepaid expenses and other assets	(46,104)		(61,019)
Lease liabilities - operating leases	447		(24,023)
Accounts payable and accrued expenses	3,167		26,097
Accrued interest payable	(2,900)		(18,237)
Other liabilities	(35,490)		(51,938)
Tenant leasing costs	(58,547)		(37,618)
Total adjustments	38,312		371,652
Net cash provided by operating activities	912,403		786,859
Cash flows from investing activities:
Acquisitions of real estate	(1,320,273)		(218,679)
Construction in progress	(384,083)		(381,104)
Building and other capital improvements	(112,755)		(103,840)
Tenant improvements	(139,986)		(218,878)
Proceeds from sales of real estate	695,231		—
Proceeds from assignment fee	6,624		—
Capital contributions to unconsolidated joint ventures	(109,643)		(95,462)
Capital distributions from unconsolidated joint ventures	36,622		122
Proceeds from sale of investment in unconsolidated joint venture	—		17,789
Proceeds from notes receivable	10,000		—
Investments in securities, net	5,043		1,684
Net cash used in investing activities	(1,313,220)		(998,368)
Cash flows from financing activities:

Repayments of mortgage notes payable	—		(13,261)
Proceeds from unsecured senior notes	—		1,695,996
Redemption of unsecured senior notes	—		(843,710)

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BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands)
	Nine months ended September 30,
	2022		2021
Borrowings on unsecured line of credit	885,000		300,000
Repayments of unsecured line of credit	(690,000)		(300,000)
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	(2,230)		(20,770)

Debt prepayment and extinguishment costs	—		(185)
Net activity from equity transactions	(359)		20,028
Distributions	(513,486)		(513,381)
Contributions from noncontrolling interests in property partnerships	849		13,738
Distributions to noncontrolling interests in property partnerships	(61,229)		(65,604)
Net cash provided by (used in) financing activities	348,545		(425,899)
Net increase (decrease) in cash and cash equivalents and cash held in escrows	(52,272)		(637,408)
Cash and cash equivalents and cash held in escrows, beginning of period	501,158		1,719,329
Cash and cash equivalents and cash held in escrows, end of period	$	448,886	$	1,081,921

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

Cash and cash equivalents, end of period	$	375,774	$	1,002,728
Cash held in escrows, end of period	73,112		79,193
Cash and cash equivalents and cash held in escrows, end of period	$	448,886	$	1,081,921

Supplemental disclosures:
Cash paid for interest	$	339,067	$	358,015
Interest capitalized	$	40,048	$	36,632

Non-cash investing and financing activities:
Write-off of fully depreciated real estate	$	(95,996)	$	(157,794)
Change in real estate included in accounts payable and accrued expenses	$	29,290	$	(22,104)

Construction in progress, net deconsolidated	$	(11,316)	$	—
Investment in unconsolidated joint ventures recorded upon deconsolidation	$	11,316	$	—
Right-of-use assets obtained in exchange for lease liabilities	$	—	$	26,887
Distributions declared but not paid	$	170,952	$	169,739
Conversions of redeemable partnership units to partners’ capital	$	6,388	$	8,033
Issuance of restricted securities to employees and non-employee directors	$	48,605	$	44,257

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

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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 September 30, 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 8 and 12).

Properties

At September 30, 2022, the Company owned or had joint venture interests in a portfolio of 193 commercial real estate properties (the “Properties”) aggregating approximately 53.5 million net rentable square feet of primarily premier workplaces, including 14 properties under construction/redevelopment totaling approximately 4.4 million net rentable square feet. At September 30, 2022, the Properties consisted of:

173 office properties (including 12 properties under construction/redevelopment);
12 retail properties (including one property under redevelopment);
seven 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 clients and command upper-tier rental rates.

2. Basis of Presentation and Summary of Significant Accounting Policies

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

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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.

The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair statement of the financial statements for these interim periods have been included. The results of operations for the interim periods are not necessarily indicative of the results to be obtained for other interim periods or for the full fiscal year. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosure required by GAAP. These financial statements should be read in conjunction with the Company’s financial statements and notes thereto contained in the Company’s Annual Report in the Company’s Form 10-K for its fiscal year ended December 31, 2021.

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 the coronavirus (“COVID-19”) pandemic, 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.

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 Company has determined that it is the primary beneficiary for six of the seven entities that are VIEs.

Consolidated Variable Interest Entities

As of September 30, 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 8).

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

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.

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 the financial instruments that are being valued for disclosure purposes as well as the Level at which they are categorized (as defined in Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures” (“ASC 820”)).

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

(1)If trading value 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.

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, 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 September 30, 2022 and December 31, 2021 (in thousands):


	September 30, 2022				December 31, 2021
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Related party note receivable, net	$	78,592	$	79,614	$	78,336	$	82,867
Notes receivable, net	—		—		9,641		10,000
Total	$	78,592	$	79,614	$	87,977	$	92,867

Mortgage notes payable, net	$	3,271,157	$	2,788,779	$	3,267,914	$	3,395,569
Unsecured senior notes, net	9,491,714		8,261,816		9,483,695		9,966,591
Unsecured line of credit	340,000		338,247		145,000		145,317
Unsecured term loan, net	730,000		730,000		—		—
Total	$	13,832,871	$	12,118,842	$	12,896,609	$	13,507,477

3. Real Estate

BXP

Real estate consisted of the following at September 30, 2022 and December 31, 2021 (in thousands):


	September 30, 2022		December 31, 2021
Land	$	5,208,688	$	5,061,169
Right of use assets - finance leases	237,505		237,507
Right of use assets - operating leases	167,935		169,778
Land held for future development (1)	601,676		560,355
Buildings and improvements	15,598,033		14,291,214
Tenant improvements	3,061,686		2,894,025
Furniture, fixtures and equipment	52,126		51,695
Construction in progress	670,167		894,172
Total	25,597,816		24,159,915
Less: Accumulated depreciation	(6,170,472)		(5,883,961)
	$	19,427,344	$	18,275,954

(1)Includes pre-development costs.

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BPLP

Real estate consisted of the following at September 30, 2022 and December 31, 2021 (in thousands):


	September 30, 2022		December 31, 2021
Land	$	5,113,979	$	4,964,986
Right of use assets - finance leases	237,505		237,507
Right of use assets - operating leases	167,935		169,778
Land held for future development (1)	601,676		560,355
Buildings and improvements	15,325,228		14,014,010
Tenant improvements	3,061,686		2,894,025
Furniture, fixtures and equipment	52,126		51,695
Construction in progress	670,167		894,172
Total	25,230,302		23,786,528
Less: Accumulated depreciation	(6,055,172)		(5,772,018)
	$	19,175,130	$	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 6). 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

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 from May 17, 2022 through the remainder of 2022 and each of the five succeeding fiscal years (in thousands):


	Acquired In-Place Lease Intangibles		Acquired Above-Market Lease Intangibles		Acquired Below-Market Lease Intangibles
Period from May 17, 2022 through December 31, 2022	$	7,266	$	640	$	2,011
2023	12,200		1,098		3,442
2024	10,842		254		3,411
2025	10,770		254		3,398
2026	10,306		254		3,210
2027	9,161		254		2,805

Madison Centre contributed approximately $18.8 million of revenue and approximately $1.3 million of net income to the Company for the period from May 17, 2022 through September 30, 2022.

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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 below-market lease intangible for 125 Broadway from September 16, 2022 through the remainder of 2022 and each of the five succeeding fiscal years (in thousands):


	Acquired In-Place Lease Intangibles		Acquired Below-Market Lease Intangible
Period from September 16, 2022 through December 31, 2022	$	2,185	$	744
2023	8,740		2,975
2024	8,740		2,975
2025	8,740		2,975
2026	8,740		2,975
2027	8,740		2,975

125 Broadway contributed approximately $1.6 million of revenue and approximately $0.4 million of net income to the Company for the period from September 16, 2022 through September 30, 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 $0.4 million and $0.2 million of net income to the Company for the three and nine months ended September 30, 2021, 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 is 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. The property was 100% leased.

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 $1.8 million and $5.9 million of net income to the Company for the three and nine months ended September 30, 2021, respectively.

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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 $3.6 million and $14.9 million of net income to the Company for the period from July 1, 2022 through August 29, 2022 and the period from January 1, 2022 through August 29, 2022, respectively, and contributed approximately $5.6 million and $16.7 million of net income to the Company for the three and nine months ended September 30, 2021, 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.

Developments

On April 27, 2022, the Company entered into a 15-year lease agreement with AstraZeneca for approximately 570,000 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 will 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. The lease and commencement of construction are subject to various conditions, some of which are not within the Company’s control. There can be no assurance that the conditions will be satisfied or that the Company will commence the development on the terms and schedule currently contemplated or at all.

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 July 15, 2022, the Company partially placed in-service 880 Winter Street, an approximately 244,000 net rentable square foot laboratory/life sciences project located in Waltham, Massachusetts.

On September 8, 2022, the Company terminated its existing lease agreement with its client 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. The commencement of construction is subject to various conditions. There can be no assurance that the Company will commence the redevelopment on the terms and schedule currently contemplated or at all.

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.

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 client creditworthiness, current economic trends, including the impact of the COVID-19 pandemic on clients’ businesses, and changes in clients’ payment patterns, on a lease-by-lease basis.

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During the nine months ended September 30, 2021, the Company wrote off approximately $1.3 million related to accrued rent, net balances and accounts receivable, net balances. There were no write-offs related to accrued rent, net balances and accounts receivable, net balances for the three months ended September 30, 2021. The write-offs were for clients, primarily in the retail sector, 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.

During the nine months ended September 30, 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 nine months ended September 30, 2022. There was no reinstatement of accrued rent balances during the three months ended September 30, 2022.

For information related to write-offs of accrued rent, net balances and accounts receivable, net balances and reinstatements of accrued rent balances for the Company’s unconsolidated joint ventures, see Note 5.

Lessor

The following table summarizes the components of lease revenue recognized during the three and nine months ended September 30, 2022 and 2021 included within the Company's Consolidated Statements of Operations (in thousands):


	Three months ended September 30,				Nine months ended September 30,
Lease Revenue	2022		2021		2022		2021
Fixed contractual payments	$	610,878	$	581,393	$	1,811,836	$	1,732,930
Variable lease payments	128,377		110,867		367,438		329,172
	$	739,255	$	692,260	$	2,179,274	$	2,062,102

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5. Investments in Unconsolidated Joint Ventures

The investments in unconsolidated joint ventures consist of the following at September 30, 2022 and December 31, 2021:


					Carrying Value of Investment (1)
Entity	Properties	Nominal % Ownership			September 30, 2022		December 31, 2021
					(in thousands)
Square 407 Limited Partnership	Market Square North	50.00	%		$	(5,759)	$	(1,205)
BP/CRF Metropolitan Square LLC	Metropolitan Square	20.00	%		(39,318)		(15,356)
901 New York, LLC	901 New York Avenue	25.00	%	(2)	(12,506)		(12,597)
WP Project Developer LLC	Wisconsin Place Land and Infrastructure	33.33	%	(3)	32,638		33,732
500 North Capitol Venture LLC	500 North Capitol Street, NW	30.00	%		(9,432)		(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	%		48,571		48,980
Residential Tower Developer LLC	Hub50House	50.00	%		45,662		47,774
Hotel Tower Developer LLC	The Hub on Causeway - Hotel Air Rights	50.00	%		12,165		11,505
Office Tower Developer LLC	100 Causeway Street	50.00	%		59,379		57,687
1265 Main Office JV LLC	1265 Main Street	50.00	%		3,358		3,541
BNY Tower Holdings LLC	Dock 72	50.00	%		26,947		27,343
BNYTA Amenity Operator LLC	Dock 72	50.00	%		825		1,069
CA-Colorado Center, LLC	Colorado Center	50.00	%		234,271		231,479
7750 Wisconsin Avenue LLC	7750 Wisconsin Avenue	50.00	%		52,656		61,626
BP-M 3HB Venture LLC	3 Hudson Boulevard	25.00	%		116,678		116,306
SMBP Venture LP	Santa Monica Business Park	55.00	%		166,302		156,639
Platform 16 Holdings LP	Platform 16	55.00	%	(5)	143,558		109,086
Gateway Portfolio Holdings LLC	Gateway Commons	50.00	%	(6)	314,137		327,148
Rosecrans-Sepulveda Partners 4, LLC	Beach Cities Media Campus	50.00	%		27,017		27,106
Safeco Plaza REIT LLC	Safeco Plaza	33.67	%	(7)	70,889		72,545
360 PAS Holdco LLC	360 Park Avenue South	42.21	%	(8)	112,772		106,855
PR II/BXP Reston Gateway LLC	Reston Next Residential	20.00	%	(9)	11,267		N/A
751 Gateway Holdings LLC	751 Gateway	49.00	%	(6)	71,820		N/A
					$	1,526,819	$	1,445,926

(1)Investments with deficit balances aggregating approximately $67.0 million and $37.1 million at September 30, 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 September 30, 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 entity is a VIE (See Note 2).

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

(7)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.

(8)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

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

(9)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:


	September 30, 2022		December 31, 2021
	(in thousands)
ASSETS
Real estate and development in process, net (1)	$	5,858,271	$	5,579,218
Other assets	655,549		586,470
Total assets	$	6,513,820	$	6,165,688
LIABILITIES AND MEMBERS’/PARTNERS’ EQUITY
Mortgage and notes payable, net	$	3,425,972	$	3,214,961
Other liabilities (2)	681,228		652,135
Members’/Partners’ equity	2,406,620		2,298,592
Total liabilities and members’/partners’ equity	$	6,513,820	$	6,165,688
Company’s share of equity	$	1,180,507	$	1,104,175
Basis differentials (3)	346,312		341,751
Carrying value of the Company’s investments in unconsolidated joint ventures (4)	$	1,526,819	$	1,445,926

(1)At September 30, 2022 and December 31, 2021, this amount included right of use assets - finance leases totaling approximately $248.9 million. At September 30, 2022 and December 31, 2021, this amount included right of use assets - operating leases totaling approximately $21.4 million and $22.3 million, respectively.

(2)At September 30, 2022 and December 31, 2021, this amount included lease liabilities - finance leases totaling approximately $383.0 million and $385.5 million, respectively. At September 30, 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:


	September 30, 2022		December 31, 2021
Property	(in thousands)
Colorado Center	$	302,539	$	304,776
Gateway Commons	51,188		51,009
Dock 72	(48,753)		(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 $67.0 million and $37.1 million at September 30, 2022 and December 31, 2021, respectively, are reflected within Other Liabilities in the Company’s Consolidated Balance Sheets.

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


	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
	(in thousands)
Total revenue (1)	$	127,996	$	90,009	$	373,358	$	268,501
Expenses
Operating	52,886		40,378		143,880		114,299
Transaction costs	(65)		—		746		7
Depreciation and amortization	44,132		36,036		132,089		103,766
Total expenses	96,953		76,414		276,715		218,072
Other income (expense)
Loss from early extinguishment of debt	—		—		(1,327)		—
Interest expense	(40,678)		(27,519)		(103,270)		(78,711)

Net loss	$	(9,635)	$	(13,924)	$	(7,954)	$	(28,282)

Company’s share of net income (loss)	$	(2,251)	$	(4,491)	$	2,225	$	(10,268)
Gain on sale of investment (2)	—		—		—		10,257

Basis differential (3)	(1,273)		(1,106)		(3,614)		(1,734)
Loss from unconsolidated joint ventures	$	(3,524)	$	(5,597)	$	(1,389)	$	(1,745)

(1)Includes straight-line rent adjustments of approximately $9.6 million and $5.5 million for the three months ended September 30, 2022 and 2021, respectively, and approximately $54.9 million and $11.6 million for the nine months ended September 30, 2022 and 2021, respectively. For the nine months ended September 30, 2022, reinstatement of accrued rent balances totaled approximately $2.5 million.

(2)During the nine months ended September 30, 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.

(3)Includes straight-line rent adjustments of approximately $0.1 million for each of the three months ended September 30, 2022 and 2021, and approximately $0.3 million and $0.7 million for the nine months ended September 30, 2022 and 2021, respectively. Also includes net above-/below-market rent adjustments of approximately $0.1 million for each of the three months ended September 30, 2022 and 2021, and approximately $0.3 million and $0.2 million for the nine months ended September 30, 2022 and 2021, respectively.

On January 18, 2022, a joint venture in which the Company has 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 has 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 has 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

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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 has a 50% ownership 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 outstanding balance of the loan totaled 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 in the future 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 has 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 bears 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 continues to mature on December 18, 2023. 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 has 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’s outstanding balance totaled $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.

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6. Unsecured Term Loan

On May 17, 2022, BPLP entered into an unsecured credit agreement (the “Unsecured Term Loan”) providing for a single borrowing of up to $730.0 million. The Unsecured Term Loan matures on May 16, 2023.

At BPLP’s option, the Unsecured Term Loan will bear 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 is 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 Unsecured Term Loan (See Note 3). As of September 30, 2022, the Unsecured Term Loan bears interest at a variable rate equal to term SOFR plus 0.95% per annum based on BPLP’s credit rating at September 30, 2022. At September 30, 2022, BPLP had $730.0 million outstanding under the Unsecured Term Loan.

The Unsecured Term Loan contains 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 any outstanding amount under the Unsecured Term Loan. Among other covenants, the Unsecured Term Loan requires 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 September 30, 2022, BPLP was in compliance with each of these financial and other covenant requirements.

7. 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 clients 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 September 30, 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, clients 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 September 30, 2022, the maximum funding obligation under the guarantee was approximately $14.9 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

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payments made under the guarantee. As of September 30, 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).

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,

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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.

8. 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 September 30, 2022, the noncontrolling interests in BPLP consisted of 16,535,172 OP Units, 1,680,123 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, 351,218 2021 MYLTIP Units and 253,627 2022 MYLTIP Units held by parties other than BXP.

Noncontrolling Interest—Common Units

During the nine months ended September 30, 2022, 178,929 OP Units were presented by the holders for redemption (including an aggregate of 74,249 OP Units 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 September 30, 2022, BPLP had outstanding 203,278 2020 MYLTIP Units, 351,218 2021 MYLTIP Units and 253,627 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 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.

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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 nine months ended September 30, 2022:


Record Date	Payment Date	Distributions per OP Unit and LTIP Unit	Distributions per MYLTIP Unit
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 nine months ended September 30, 2021:


Record Date	Payment Date	Distributions per OP Unit and LTIP Unit	Distributions per MYLTIP Unit

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

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 September 30, 2022 was approximately $1.4 billion based on the last reported price of a share of Common Stock on the New York Stock Exchange of $74.97 per share on September 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 $1.6 billion at each of September 30, 2022 and December 31, 2021, are included in Noncontrolling Interests—Property Partnerships on the accompanying Consolidated Balance Sheets.

9. Stockholders’ Equity / Partners’ Capital

BXP

As of September 30, 2022, BXP had 156,754,712 shares of Common Stock outstanding.

As of September 30, 2022, BXP owned 1,749,700 general partnership units and 155,005,012 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

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$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 nine months ended September 30, 2022, BXP did not issue any shares of Common Stock upon the exercise of options to purchase Common Stock.

During the nine months ended September 30, 2022, BXP issued 178,929 shares of Common Stock 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 in 2022 and during the nine months ended September 30, 2021:


Record Date	Payment Date	Dividend (Per Share)	Distribution (Per Unit)
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

Preferred Stock

On March 2, 2021, BXP issued a redemption notice for 80,000 shares of its 5.25% Series B Cumulative Redeemable Preferred Stock (the “Series B 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, including 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 nine months ended September 30, 2021:


Record Date	Payment Date	Dividend (Per Share)
February 5, 2021	February 16, 2021	$32.8125

10. 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 three and nine months ended September 30, 2022 and 2021.

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BXP


	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
	(in thousands)
Net income attributable to Boston Properties, Inc. common shareholders	$	360,977	$	108,297	$	727,144	$	311,680
Add:
Preferred stock redemption charge	—		—		—		6,412
Preferred dividends	—		—		—		2,560
Noncontrolling interest—common units of the Operating Partnership	40,883		11,982		82,821		35,393
Noncontrolling interests in property partnerships	18,801		18,971		54,896		52,602
Interest expense	111,846		105,794		317,216		320,015
Losses from early extinguishment of debt	—		—		—		898
Net operating income from unconsolidated joint ventures	35,316		24,266		108,347		74,478
Loss from unconsolidated joint ventures	3,524		5,597		1,389		1,745
Depreciation and amortization expense	190,675		179,412		551,445		539,815
Transaction costs	1,650		1,888		2,146		2,970
Payroll and related costs from management services contracts	3,900		3,006		11,204		9,166
General and administrative expense	32,519		34,560		110,378		117,924
Less:
Net operating income attributable to noncontrolling interests in property partnerships	48,306		47,800		143,223		138,463
Gains (losses) from investments in securities	(1,571)		(190)		(8,549)		3,744
Other income - assignment fee	—		—		6,624		—
Interest and other income (loss)	3,728		1,520		6,151		4,140
Gains on sales of real estate	262,345		348		381,293		8,104
Direct reimbursements of payroll and related costs from management services contracts	3,900		3,006		11,204		9,166
Development and management services revenue	7,465		6,094		19,650		20,181
Company’s share of Net Operating Income	$	475,918	$	435,195	$	1,407,390	$	1,291,860

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BPLP


	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
	(in thousands)
Net income attributable to Boston Properties Limited Partnership common unitholders	$	403,578	$	122,014	$	819,195	$	353,633
Add:
Preferred unit redemption charge	—		—		—		6,412
Preferred distributions	—		—		—		2,560
Noncontrolling interests in property partnerships	18,801		18,971		54,896		52,602
Interest expense	111,846		105,794		317,216		320,015
Losses from early extinguishment of debt	—		—		—		898
Net operating income from unconsolidated joint ventures	35,316		24,266		108,347		74,478
Loss from unconsolidated joint ventures	3,524		5,597		1,389		1,745
Depreciation and amortization expense	188,969		177,677		546,271		533,255
Transaction costs	1,650		1,888		2,146		2,970
Payroll and related costs from management services contracts	3,900		3,006		11,204		9,166
General and administrative expense	32,519		34,560		110,378		117,924
Less:
Net operating income attributable to noncontrolling interests in property partnerships	48,306		47,800		143,223		138,463
Gains (losses) from investments in securities	(1,571)		(190)		(8,549)		3,744
Other income - assignment fee	—		—		6,624		—
Interest and other income (loss)	3,728		1,520		6,151		4,140
Gains on sales of real estate	262,357		348		385,349		8,104
Direct reimbursements of payroll and related costs from management services contracts	3,900		3,006		11,204		9,166
Development and management services revenue	7,465		6,094		19,650		20,181
Company’s share of Net Operating Income	$	475,918	$	435,195	$	1,407,390	$	1,291,860

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, 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 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

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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, 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), 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 Office, Residential and Hotel.

Parking and other revenue for the three months ended September 30, 2022 increased by approximately $4.6 million compared to the three months ended September 30, 2021. Parking and other revenue for the nine months ended September 30, 2022 increased by approximately $21.5 million compared to 2021. These increases were primarily in transient and monthly parking revenue.

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

For the three months ended September 30, 2022:


	Boston			Los Angeles			New York			San Francisco			Seattle			Washington, DC			Total
Rental Revenue: (1)
Office	$	255,958		$	—		$	260,926		$	134,938		$	12,293		$	88,954		$	753,069
Residential	3,837			—			—			3,133			—			7,370			14,340
Hotel	11,749			—			—			—			—			—			11,749
Total	271,544			—			260,926			138,071			12,293			96,324			779,158
% of Grand Totals	34.85		%	—		%	33.49		%	17.72		%	1.58		%	12.36		%	100.00		%
Rental Expenses:
Office	91,226			—			99,942			47,068			3,125			33,317			274,678
Residential	1,552			—			—			2,125			—			3,347			7,024
Hotel	8,548			—			—			—			—			—			8,548
Total	101,326			—			99,942			49,193			3,125			36,664			290,250
% of Grand Totals	34.91		%	—		%	34.43		%	16.95		%	1.08		%	12.63		%	100.00		%
Net operating income	$	170,218		$	—		$	160,984		$	88,878		$	9,168		$	59,660		$	488,908
% of Grand Totals	34.81		%	—		%	32.93		%	18.18		%	1.88		%	12.20		%	100.00		%
Less: Net operating income attributable to noncontrolling interests in property partnerships	(11,293)			—			(37,013)			—			—			—			(48,306)
Add: Company’s share of net operating income (loss) from unconsolidated joint ventures	8,169			13,143			(259)			3,233			1,978			9,052			35,316
Company’s share of net operating income	$	167,094		$	13,143		$	123,712		$	92,111		$	11,146		$	68,712		$	475,918
% of Grand Totals	35.12		%	2.76		%	25.99		%	19.35		%	2.34		%	14.44		%	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.

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For the three months ended September 30, 2021:


	Boston			Los Angeles			New York			San Francisco			Seattle			Washington, DC			Total
Rental Revenue: (1)
Office	$	236,080		$	—		$	257,656		$	125,340		$	—		$	85,797		$	704,873
Residential	3,418			—			—			806			—			6,670			10,894
Hotel	5,189			—			—			—			—			—			5,189
Total	244,687			—			257,656			126,146			—			92,467			720,956
% of Grand Totals	33.93		%	—		%	35.74		%	17.50		%	—		%	12.83		%	100.00		%
Rental Expenses:
Office	82,697			—			94,338			43,582			—			31,619			252,236
Residential	1,396			—			—			1,688			—			2,961			6,045
Hotel	3,946			—			—			—			—			—			3,946
Total	88,039			—			94,338			45,270			—			34,580			262,227
% of Grand Totals	33.57		%	—		%	35.98		%	17.26		%	—		%	13.19		%	100.00		%
Net operating income	$	156,648		$	—		$	163,318		$	80,876		$	—		$	57,887		$	458,729
% of Grand Totals	34.15		%	—		%	35.60		%	17.63		%	—		%	12.62		%	100.00		%
Less: Net operating income attributable to noncontrolling interests in property partnerships	(10,841)			—			(36,959)			—			—			—			(47,800)
Add: Company’s share of net operating income from unconsolidated joint ventures	3,464			12,078			104			3,502			671			4,447			24,266
Company’s share of net operating income	$	149,271		$	12,078		$	126,463		$	84,378		$	671		$	62,334		$	435,195
% of Grand Totals	34.30		%	2.78		%	29.06		%	19.39		%	0.15		%	14.32		%	100.00		%

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

For the nine months ended September 30, 2022:


	Boston			Los Angeles			New York			San Francisco			Seattle			Washington, DC			Total
Rental Revenue: (1)
Office	$	742,972		$	—		$	772,060		$	401,020		$	18,765		$	280,473		$	2,215,290
Residential	11,181			—			—			11,374			—			21,663			44,218
Hotel	28,395			—			—			—			—			—			28,395
Total	782,548			—			772,060			412,394			18,765			302,136			2,287,903
% of Grand Totals	34.20		%	—		%	33.75		%	18.02		%	0.82		%	13.21		%	100.00		%
Rental Expenses:
Office	268,781			—			291,645			135,677			4,805			101,623			802,531
Residential	4,481			—			—			9,138			—			9,655			23,274
Hotel	19,832			—			—			—			—			—			19,832
Total	293,094			—			291,645			144,815			4,805			111,278			845,637
% of Grand Totals	34.66		%	—		%	34.49		%	17.12		%	0.57		%	13.16		%	100.00		%
Net operating income	$	489,454		$	—		$	480,415		$	267,579		$	13,960		$	190,858		$	1,442,266
% of Grand Totals	33.94		%	—		%	33.31		%	18.55		%	0.97		%	13.23		%	100.00		%
Less: Net operating income attributable to noncontrolling interests in property partnerships	(34,405)			—			(108,818)			—			—			—			(143,223)
Add: Company’s share of net operating income (loss) from unconsolidated joint ventures	25,996			40,147			(397)			9,597			5,877			27,127			108,347
Company’s share of net operating income	$	481,045		$	40,147		$	371,200		$	277,176		$	19,837		$	217,985		$	1,407,390
% of Grand Totals	34.18		%	2.85		%	26.38		%	19.69		%	1.41		%	15.49		%	100.00		%

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For the nine months ended September 30, 2021:


	Boston			Los Angeles			New York			San Francisco			Seattle				Washington, DC			Total
Rental Revenue: (1)
Office	$	696,054		$	—		$	760,002		$	382,119		$	—			$	252,822		$	2,090,997
Residential	9,594			—			—			1,817			—				18,421			29,832
Hotel	7,382			—			—			—			—				—			7,382
Total	713,030			—			760,002			383,936			—				271,243			2,128,211
% of Grand Totals	33.50		%	—		%	35.71		%	18.04		%	—		%		12.75		%	100.00		%
Rental Expenses:
Office	240,743			—			286,385			124,785			—				94,360			746,273
Residential	4,286			—			—			4,918			—				8,896			18,100
Hotel	7,993			—			—			—			—				—			7,993
Total	253,022			—			286,385			129,703			—			—	103,256			772,366
% of Grand Totals	32.76		%	—		%	37.08		%	16.79		%	—		%		13.37		%	100.00		%
Net operating income	$	460,008		$	—		$	473,617		$	254,233		$	—			$	167,987		$	1,355,845
% of Grand Totals	33.93		%	—		%	34.93		%	18.75		%	—		%		12.39		%	100.00		%
Less: Net operating income attributable to noncontrolling interests in property partnerships	(31,641)			—			(106,822)			—			—				—			(138,463)
Add: Company’s share of net operating income (loss) from unconsolidated joint ventures	9,369			38,535			(517)			10,562			671				15,858			74,478
Company’s share of net operating income	$	437,736		$	38,535		$	366,278		$	264,795		$	671			$	183,845		$	1,291,860
% of Grand Totals	33.88		%	2.98		%	28.35		%	20.50		%	0.05		%		14.24		%	100.00		%

11. 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.

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	Three months ended September 30, 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	$	360,977	156,754	$	2.30
Allocation of undistributed earnings to participating securities	(762)		—	—
Net income attributable to Boston Properties, Inc. common shareholders	360,215		156,754	2.30
Effect of Dilutive Securities:
Stock Based Compensation	—		379	(0.01)
Diluted Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	360,215	157,133	$	2.29

	Three months ended September 30, 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	$	108,297	156,183	$	0.69
Effect of Dilutive Securities:
Stock Based Compensation	—		415	—
Diluted Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	108,297	156,598	$	0.69


	Nine months ended September 30, 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	$	727,144	156,708	$	4.64
Allocation of undistributed earnings to participating securities	(1,002)		—	(0.01)
Net income attributable to Boston Properties, Inc. common shareholders	726,142		156,708	4.63
Effect of Dilutive Securities:
Stock Based Compensation	—		436	(0.01)
Diluted Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	726,142	157,144	$	4.62

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	Nine months ended September 30, 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	$	311,680	156,062	$	2.00
Effect of Dilutive Securities:
Stock Based Compensation	—		332	(0.01)
Diluted Earnings:
Net income attributable to Boston Properties, Inc. common shareholders	$	311,680	156,394	$	1.99

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 17,662,000 and 17,011,000 redeemable common units for the three months ended September 30, 2022 and 2021, respectively, and 17,631,000 and 17,016,000 redeemable common units for the nine months ended September 30, 2022 and 2021, respectively.


	Three months ended September 30, 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	$	403,578	174,416	$	2.31
Allocation of undistributed earnings to participating securities	(848)		—	—
Net income attributable to Boston Properties, Inc. common shareholders	402,730		174,416	2.31
Effect of Dilutive Securities:
Stock Based Compensation	—		379	(0.01)
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	402,730	174,795	$	2.30

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	Three months ended September 30, 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	$	122,014	173,194	$	0.70
Effect of Dilutive Securities:
Stock Based Compensation	—		415	—
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	122,014	173,609	$	0.70


	Nine months ended September 30, 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	$	819,195	174,339	$	4.70
Allocation of undistributed earnings to participating securities	(1,115)		—	(0.01)
Net income attributable to Boston Properties Limited Partnership common unitholders	$	818,080	174,339	$	4.69
Effect of Dilutive Securities:
Stock Based Compensation	—		436	(0.01)
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	818,080	174,775	$	4.68

	Nine months ended September 30, 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	$	353,633	173,078	$	2.04
Effect of Dilutive Securities:
Stock Based Compensation	—		332	—
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	353,633	173,410	$	2.04

12. Stock Option and Incentive Plan

On February 1, 2022, BXP’s Compensation Committee approved the 2022 MYLTIP awards under the Boston Properties, Inc. 2021 Stock Incentive Plan (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

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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.

During the nine months ended September 30, 2022, BXP issued 41,818 shares of restricted common stock and BPLP issued 280,616 LTIP Units and 254,061 2022 MYLTIP Units to employees and non-employee directors under the 2021 Plan. Employees and non-employee directors paid $0.01 per share of restricted common stock and $0.25 per LTIP Unit and 2022 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 substantial 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. The shares of restricted common stock granted during the nine months ended September 30, 2022 were valued at approximately $4.7 million ($111.47 per share weighted-average). The LTIP Units granted were valued at approximately $29.9 million (approximately $106.46 per unit weighted-average fair value) using a Monte Carlo simulation method model. The per unit fair values of the LTIP Units granted were estimated on the dates of grant and for a substantial majority of such units were valued using the following assumptions: an expected life of 5.7 years, a risk-free interest rate of 1.71% and an expected price volatility of 31.0%. 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 Boston Properties, Inc.’s Consolidated Balance Sheets and Partners’ Capital in Boston Properties Limited Partnership’s Consolidated Balance Sheets. Aggregate stock-based compensation expense associated with restricted stock, LTIP Units and MYLTIP Units was approximately $7.7 million and $8.4 million for the three months

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ended September 30, 2022 and 2021, respectively, and $43.2 million and $42.2 million for the nine months ended September 30, 2022 and 2021, respectively. At September 30, 2022, there was (1) an aggregate of approximately $25.9 million of unrecognized compensation expense related to unvested restricted stock, LTIP Units and 2019 MYLTIP Units and (2) an aggregate of approximately $7.3 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 2.0 years.

13. Subsequent Events

On October 6, 2022, the Company entered into an agreement to sell the residential component of The Avant at Reston Town Center, located in Reston, Virginia, for a gross sale price of $141 million. The Avant is a 15-story, approximately 329,000 square foot, excluding retail space, 359-unit, luxury multifamily building. The Company will retain ownership of the approximately 26,000 square foot ground-level retail space. There can be no assurance that the Company will complete the sale on the terms currently contemplated or at all.

On October 25, 2022, the Company entered into an agreement to acquire an approximate 27% interest in the joint venture that owns 200 Fifth Avenue located in New York City, for a gross purchase price of approximately $280.2 million, which includes $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 4.34% per annum and matures in November 2028. 200 Fifth Avenue is a 14-story, approximately 870,000 square-foot, LEED Gold certified, premier workplace located in the Midtown South submarket. There can be no assurance that the Company will complete the acquisition on the terms currently contemplated or at all.

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Previous: Cover and table of contents · Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.