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)
	March 31, 2023		December 31, 2022
ASSETS
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $6,832,119 and $6,789,029 at March 31, 2023 and December 31, 2022, respectively)	$	25,559,720	$	25,389,663
Right of use assets - finance leases (amounts related to VIEs of $21,000 and $21,000 at March 31, 2023 and December 31, 2022, respectively)	237,503		237,510
Right of use assets - operating leases	166,699		167,351
Less: accumulated depreciation (amounts related to VIEs of $(1,405,167) and $(1,381,401) at March 31, 2023 and December 31, 2022, respectively)	(6,424,547)		(6,298,082)
Total real estate	19,539,375		19,496,442
Cash and cash equivalents (amounts related to VIEs of $233,981 and $259,658 at March 31, 2023 and December 31, 2022, respectively)	918,952		690,333
Cash held in escrows	45,330		46,479
Investments in securities	32,099		32,277
Tenant and other receivables, net (amounts related to VIEs of $13,108 and $16,521 at March 31, 2023 and December 31, 2022, respectively)	85,603		81,389
Related party note receivable, net	78,544		78,576
Sales-type lease receivable, net	13,028		12,811
Accrued rental income, net (amounts related to VIEs of $375,008 and $367,138 at March 31, 2023 and December 31, 2022, respectively)	1,297,767		1,276,580
Deferred charges, net (amounts related to VIEs of $172,077 and $176,597 at March 31, 2023 and December 31, 2022, respectively)	720,174		733,282
Prepaid expenses and other assets (amounts related to VIEs of $40,737 and $11,647 at March 31, 2023 and December 31, 2022, respectively)	141,933		43,589
Investments in unconsolidated joint ventures	1,752,617		1,715,911
Total assets	$	24,625,422	$	24,207,669
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net (amounts related to VIEs of $3,273,553 and $3,272,368 at March 31, 2023 and December 31, 2022, respectively)	$	3,273,553	$	3,272,368
Unsecured senior notes, net	10,240,967		10,237,968
Unsecured line of credit	—		—
Unsecured term loan, net	1,194,916		730,000
Lease liabilities - finance leases (amounts related to VIEs of $20,641 and $20,604 at March 31, 2023 and December 31, 2022, respectively)	250,567		249,335
Lease liabilities - operating leases	204,435		204,686
Accounts payable and accrued expenses (amounts related to VIEs of $37,595 and $29,466 at March 31, 2023 and December 31, 2022, respectively)	397,798		417,545
Dividends and distributions payable	171,427		170,643
Accrued interest payable	114,400		103,774
Other liabilities (amounts related to VIEs of $114,694 and $114,232 at March 31, 2023 and December 31, 2022, respectively)	465,276		450,918
Total liabilities	16,313,339		15,837,237
Commitments and contingencies (See Note 7)
Redeemable deferred stock units— 103,454 and 97,853 units outstanding at redemption value at March 31, 2023 and December 31, 2022, respectively	5,599		6,613


BOSTON PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except for share and par value amounts)
	March 31, 2023		December 31, 2022
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, 156,908,693 and 156,836,767 issued and 156,829,793 and 156,757,867 outstanding at March 31, 2023 and December 31, 2022, respectively	1,568		1,568
Additional paid-in capital	6,549,314		6,539,147
Dividends in excess of earnings	(467,159)		(391,356)
Treasury common stock at cost, 78,900 shares at March 31, 2023 and December 31, 2022	(2,722)		(2,722)
Accumulated other comprehensive loss	(18,214)		(13,718)
Total stockholders’ equity attributable to Boston Properties, Inc.	6,062,787		6,132,919
Noncontrolling interests:
Common units of Boston Properties Limited Partnership	691,627		683,583
Property partnerships	1,552,070		1,547,317
Total equity	8,306,484		8,363,819
Total liabilities and equity	$	24,625,422	$	24,207,669

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

BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

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


	Three months ended March 31,
	2023		2022
Revenue
Lease	$	756,875	$	718,120
Parking and other	24,009		21,734
Hotel	8,101		4,557
Development and management services	8,980		5,831
Direct reimbursements of payroll and related costs from management services contracts	5,235		4,065
Total revenue	803,200		754,307
Expenses
Operating
Rental	291,308		270,255
Hotel	6,671		4,840
General and administrative	55,802		43,194
Payroll and related costs from management services contracts	5,235		4,065
Transaction costs	911		—
Depreciation and amortization	208,734		177,624
Total expenses	568,661		499,978
Other income (expense)
Income (loss) from unconsolidated joint ventures	(7,569)		2,189
Gains on sales of real estate	—		22,701

Interest and other income (loss)	10,941		1,228

Gains (losses) from investments in securities	1,665		(2,262)
Unrealized gain on non-real estate investment	259		—

Interest expense	(134,207)		(101,228)
Net income	105,628		176,957
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships	(18,660)		(17,549)
Noncontrolling interest—common units of the Operating Partnership	(9,078)		(16,361)
Net income attributable to Boston Properties, Inc.	$	77,890	$	143,047



Basic earnings per common share attributable to Boston Properties, Inc.
Net income	$	0.50	$	0.91
Weighted average number of common shares outstanding	156,803		156,650
Diluted earnings per common share attributable to Boston Properties, Inc.
Net income	$	0.50	$	0.91
Weighted average number of common and common equivalent shares outstanding	157,043		157,004

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

BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited and in thousands)


	Three months ended March 31,
	2023		2022
Net income	$	105,628	$	176,957
Other comprehensive income:
Effective portion of interest rate contracts	(6,538)		7,565
Amortization of interest rate contracts (1)	1,675		1,676
Other comprehensive income (loss)	(4,863)		9,241
Comprehensive income	100,765		186,198
Net income attributable to noncontrolling interests	(27,738)		(33,910)
Other comprehensive (income) loss attributable to noncontrolling interests	368		(1,064)
Comprehensive income attributable to Boston Properties, Inc.	$	73,395	$	151,224

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

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


BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF EQUITY (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, December 31, 2022	156,758	$	1,568	$	6,539,147	$	(391,356)	$	(2,722)	$	(13,718)	$	683,583	$	1,547,317	$	8,363,819
Redemption of operating partnership units to common stock	5	—		195		—		—		—		(195)		—		—
Allocated net income for the period	—	—		—		77,890		—		—		9,078		18,660		105,628
Dividends/distributions declared	—	—		—		(153,693)		—		—		(18,361)		—		(172,054)
Shares issued pursuant to stock purchase plan	9	—		586		—		—		—		—		—		586
Net activity from stock option and incentive plan	58	—		3,448		—		—		—		23,971		—		27,419
Contributions from noncontrolling interests in property partnerships	—	—		—		—		—		—		—		7,555		7,555
Distributions to noncontrolling interests in property partnerships	—	—		—		—		—		—		—		(21,606)		(21,606)
Effective portion of interest rate contracts	—	—		—		—		—		(5,870)		(668)		—		(6,538)
Amortization of interest rate contracts	—	—		—		—		—		1,374		157		144		1,675
Reallocation of noncontrolling interest	—	—		5,938		—		—		—		(5,938)		—		—
Equity, March 31, 2023	156,830	$	1,568	$	6,549,314	$	(467,159)	$	(2,722)	$	(18,214)	$	691,627	$	1,552,070	$	8,306,484

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	141	2		5,026		—		—		—		(5,028)		—		—
Allocated net income for the period	—	—		—		143,047		—		—		16,361		17,549		176,957
Dividends/distributions declared	—	—		—		(153,577)		—		—		(17,920)		—		(171,497)
Shares issued pursuant to stock purchase plan	5	—		600		—		—		—		—		—		600
Net activity from stock option and incentive plan	21	—		(133)		—		—		—		19,054		—		18,921
Contributions from noncontrolling interests in property partnerships	—	—		—		—		—		—		—		849		849
Distributions to noncontrolling interests in property partnerships	—	—		—		—		—		—		—		(26,640)		(26,640)
Effective portion of interest rate contracts	—	—		—		—		—		6,800		765		—		7,565
Amortization of interest rate contracts	—	—		—		—		—		1,377		155		144		1,676
Reallocation of noncontrolling interest	—	—		6,440		—		—		—		(6,440)		—		—
Equity, March 31, 2022	156,712	$	1,567	$	6,509,663	$	(636,421)	$	(2,722)	$	(28,485)	$	649,602	$	1,548,455	$	8,041,659

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


BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands)
	Three months ended March 31,
	2023		2022
Cash flows from operating activities:
Net income	$	105,628	$	176,957
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	208,734		177,624
Amortization of right of use assets - operating leases	652		529
Non-cash compensation expense	26,262		21,235
Loss (income) from unconsolidated joint ventures	7,569		(2,189)
Distributions of net cash flow from operations of unconsolidated joint ventures	5,996		6,385
Losses (gains) from investments in securities	(1,665)		2,262
Allowance for current expected credit losses	45		(234)
Non-cash portion of interest expense	7,387		5,960



Gains on sales of real estate	—		(22,701)

Unrealized gain on non-real estate investment	(259)		—
Change in assets and liabilities:
Tenant and other receivables, net	7,518		17,635
Notes receivable, net	—		(8)
Accrued rental income, net	(18,619)		(29,567)
Prepaid expenses and other assets	(97,762)		(71,731)

Lease liabilities - operating leases	(251)		116
Accounts payable and accrued expenses	(8,505)		(31,800)
Accrued interest payable	10,626		(3,933)
Other liabilities	16,565		(12,146)
Tenant leasing costs	(35,911)		(14,904)
Total adjustments	128,382		42,533
Net cash provided by operating activities	234,010		219,490
Cash flows from investing activities:
Acquisitions of real estate	—		(3,580)
Construction in progress	(119,682)		(100,313)
Building and other capital improvements	(39,100)		(26,811)
Tenant improvements	(67,175)		(55,168)
Proceeds from sales of real estate	—		35,397

Capital contributions to unconsolidated joint ventures	(60,745)		(26,293)
Capital distributions from unconsolidated joint ventures	—		20,095

Investment in non-real estate investments	(733)		—


Investments in securities, net	1,843		5,338
Net cash used in investing activities	(285,592)		(151,335)
Cash flows from financing activities:




Borrowings on unsecured line of credit	—		190,000
Repayments of unsecured line of credit	—		(80,000)
Borrowings on unsecured term loan	1,200,000		—


Repayment of unsecured term loan	(730,000)		—
Deferred financing costs	(6,213)		(359)


Net activity from equity transactions	586		(332)
Dividends and distributions	(171,270)		(170,488)


BOSTON PROPERTIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands)
	Three months ended March 31,
	2023		2022
Contributions from noncontrolling interests in property partnerships	7,555		849
Distributions to noncontrolling interests in property partnerships	(21,606)		(26,640)
Net cash provided by (used in) financing activities	279,052		(86,970)
Net increase (decrease) in cash and cash equivalents and cash held in escrows	227,470		(18,815)
Cash and cash equivalents and cash held in escrows, beginning of period	736,812		501,158
Cash and cash equivalents and cash held in escrows, end of period	$	964,282	$	482,343

Reconciliation of cash and cash equivalents and cash held in escrows:
Cash and cash equivalents, beginning of period	$	690,333	$	452,692
Cash held in escrows, beginning of period	46,479		48,466
Cash and cash equivalents and cash held in escrows, beginning of period	$	736,812	$	501,158

Cash and cash equivalents, end of period	$	918,952	$	436,271
Cash held in escrows, end of period	45,330		46,072
Cash and cash equivalents and cash held in escrows, end of period	$	964,282	$	482,343

Supplemental disclosures:
Cash paid for interest	$	125,698	$	111,904
Interest capitalized	$	10,589	$	13,740

Non-cash investing and financing activities:
Write-off of fully depreciated real estate	$	(56,391)	$	(34,946)
Change in real estate included in accounts payable and accrued expenses	$	11,692	$	16,907













Dividends and distributions declared but not paid	$	171,427	$	170,869
Conversions of noncontrolling interests to stockholders’ equity	$	195	$	5,028
Issuance of restricted securities to employees and non-employee directors	$	46,516	$	46,082

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


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except for unit amounts)
	March 31, 2023		December 31, 2022
ASSETS
Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $6,832,119 and $6,789,029 at March 31, 2023 and December 31, 2022, respectively)	$	25,193,455	$	25,022,149
Right of use assets - finance leases (amounts related to VIEs of $21,000 and $21,000 at March 31, 2023 and December 31, 2022, respectively)	237,503		237,510
Right of use assets - operating leases	166,699		167,351
Less: accumulated depreciation (amounts related to VIEs of $(1,405,167) and $(1,381,401) at March 31, 2023 and December 31, 2022, respectively)	(6,306,326)		(6,180,474)
Total real estate	19,291,331		19,246,536
Cash and cash equivalents (amounts related to VIEs of $233,981 and $259,658 at March 31, 2023 and December 31, 2022, respectively)	918,952		690,333
Cash held in escrows	45,330		46,479
Investments in securities	32,099		32,277
Tenant and other receivables, net (amounts related to VIEs of $13,108 and $16,521 at March 31, 2023 and December 31, 2022, respectively)	85,603		81,389
Related party note receivable, net	78,544		78,576
Sales-type lease receivable, net	13,028		12,811
Accrued rental income, net (amounts related to VIEs of $375,008 and $367,138 at March 31, 2023 and December 31, 2022, respectively)	1,297,767		1,276,580
Deferred charges, net (amounts related to VIEs of $172,077 and $176,597 at March 31, 2023 and December 31, 2022, respectively)	720,174		733,282
Prepaid expenses and other assets (amounts related to VIEs of $40,737 and $11,647 at March 31, 2023 and December 31, 2022, respectively)	141,933		43,589
Investments in unconsolidated joint ventures	1,752,617		1,715,911
Total assets	$	24,377,378	$	23,957,763
LIABILITIES AND CAPITAL
Liabilities:
Mortgage notes payable, net (amounts related to VIEs of $3,273,553 and $3,272,368 at March 31, 2023 and December 31, 2022, respectively)	$	3,273,553	$	3,272,368
Unsecured senior notes, net	10,240,967		10,237,968
Unsecured line of credit	—		—
Unsecured term loan, net	1,194,916		730,000
Lease liabilities - finance leases (amounts related to VIEs of $20,641 and $20,604 at March 31, 2023 and December 31, 2022, respectively)	250,567		249,335
Lease liabilities - operating leases	204,435		204,686
Accounts payable and accrued expenses (amounts related to VIEs of $37,595 and $29,466 at March 31, 2023 and December 31, 2022, respectively)	397,798		417,545
Dividends and distributions payable	171,427		170,643
Accrued interest payable	114,400		103,774

Other liabilities (amounts related to VIEs of $114,694 and $114,232 at March 31, 2023 and December 31, 2022, respectively)	465,276		450,918
Total liabilities	16,313,339		15,837,237
Commitments and contingencies (See Note 7)
Redeemable deferred stock units— 103,454 and 97,853 units outstanding at redemption value at March 31, 2023 and December 31, 2022, respectively	5,599		6,613


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except for unit amounts)
	March 31, 2023		December 31, 2022
Noncontrolling interests:
Redeemable partnership units— 16,527,638 and 16,531,172 common units and 2,131,785 and 1,679,175 long term incentive units outstanding at redemption value at March 31, 2023 and December 31, 2022, respectively	1,074,648		1,280,886
Capital:
Boston Properties Limited Partnership partners’ capital— 1,754,892 and 1,749,682 general partner units and 155,074,901 and 155,008,185 limited partner units outstanding at March 31, 2023 and December 31, 2022, respectively	5,449,936		5,299,428
Accumulated other comprehensive loss	(18,214)		(13,718)
Total partners’ capital	5,431,722		5,285,710
Noncontrolling interests in property partnerships	1,552,070		1,547,317
Total capital	6,983,792		6,833,027
Total liabilities and capital	$	24,377,378	$	23,957,763

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

BOSTON PROPERTIES LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS

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


	Three months ended March 31,
	2023		2022
Revenue
Lease	$	756,875	$	718,120
Parking and other	24,009		21,734
Hotel	8,101		4,557
Development and management services	8,980		5,831
Direct reimbursements of payroll and related costs from management services contracts	5,235		4,065
Total revenue	803,200		754,307
Expenses
Operating
Rental	291,308		270,255
Hotel	6,671		4,840
General and administrative	55,802		43,194
Payroll and related costs from management services contracts	5,235		4,065
Transaction costs	911		—
Depreciation and amortization	206,872		175,886
Total expenses	566,799		498,240
Other income (expense)
Income (loss) from unconsolidated joint ventures	(7,569)		2,189
Gains on sales of real estate	—		23,384

Interest and other income (loss)	10,941		1,228

Gains (losses) from investments in securities	1,665		(2,262)
Unrealized gain on non-real estate investment	259		—

Interest expense	(134,207)		(101,228)
Net income	107,490		179,378
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships	(18,660)		(17,549)
Net income attributable to Boston Properties Limited Partnership	$	88,830	$	161,829



Basic earnings per common unit attributable to Boston Properties Limited Partnership
Net income	$	0.51	$	0.93
Weighted average number of common units outstanding	174,652		174,276
Diluted earnings per common unit attributable to Boston Properties Limited Partnership
Net income	$	0.51	$	0.93
Weighted average number of common and common equivalent units outstanding	174,892		174,630

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

BOSTON PROPERTIES LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited and in thousands)


	Three months ended March 31,
	2023		2022
Net income	$	107,490	$	179,378
Other comprehensive income:
Effective portion of interest rate contracts	(6,538)		7,565
Amortization of interest rate contracts (1)	1,675		1,676
Other comprehensive income (loss)	(4,863)		9,241
Comprehensive income	102,627		188,619
Comprehensive income attributable to noncontrolling interests	(18,804)		(17,693)
Comprehensive income attributable to Boston Properties Limited Partnership	$	83,823	$	170,926

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

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



BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CAPITAL AND NONCONTROLLING INTERESTS (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, December 31, 2022	1,750	155,008	$	5,299,428	$	(13,718)	$	1,547,317	$	6,833,027	$	1,280,886
Net activity from contributions and unearned compensation	5	62	4,032		—		—		4,032		23,973
Allocated net income for the period	—	—	79,752		—		18,660		98,412		9,078
Distributions	—	—	(153,693)		—		—		(153,693)		(18,361)
Conversion of redeemable partnership units	—	5	195		—		—		195		(195)
Adjustment to reflect redeemable partnership units at redemption value	—	—	220,222		—		—		220,222		(220,222)
Effective portion of interest rate contracts	—	—	—		(5,870)		—		(5,870)		(668)
Amortization of interest rate contracts	—	—	—		1,374		144		1,518		157
Contributions from noncontrolling interests in property partnerships	—	—	—		—		7,555		7,555		—
Distributions to noncontrolling interests in property partnerships	—	—	—		—		(21,606)		(21,606)		—
Equity, March 31, 2023	1,755	155,075	$	5,449,936	$	(18,214)	$	1,552,070	$	6,983,792	$	1,074,648

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	—	25	467		—		—		467		19,054
Allocated net income for the period	—	—	145,468		—		17,549		163,017		16,361
Distributions	—	—	(153,577)		—		—		(153,577)		(17,920)
Conversion of redeemable partnership units	3	138	5,028		—		—		5,028		(5,028)
Adjustment to reflect redeemable partnership units at redemption value	—	—	(255,844)		—		—		(255,844)		255,844
Effective portion of interest rate contracts	—	—	—		6,800		—		6,800		765
Amortization of interest rate contracts	—	—	—		1,377		144		1,521		155
Contributions from noncontrolling interests in property partnerships	—	—	—		—		849		849		—
Distributions to noncontrolling interests in property partnerships	—	—	—		—		(26,640)		(26,640)		—
Equity, March 31, 2022	1,749	154,962	$	3,914,832	$	(28,485)	$	1,548,455	$	5,434,802	$	2,347,834

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


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands)
	Three months ended March 31,
	2023		2022
Cash flows from operating activities:
Net income	$	107,490	$	179,378
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	206,872		175,886
Amortization of right of use assets - operating leases	652		529
Non-cash compensation expense	26,262		21,235
Loss (income) from unconsolidated joint ventures	7,569		(2,189)
Distributions of net cash flow from operations of unconsolidated joint ventures	5,996		6,385
Losses (gains) from investments in securities	(1,665)		2,262
Allowance for current expected credit losses	45		(234)
Non-cash portion of interest expense	7,387		5,960



Gains on sales of real estate	—		(23,384)

Unrealized gain on non-real estate investment	(259)		—
Change in assets and liabilities:
Tenant and other receivables, net	7,518		17,635
Notes receivable, net	—		(8)
Accrued rental income, net	(18,619)		(29,567)
Prepaid expenses and other assets	(97,762)		(71,731)

Lease liabilities - operating leases	(251)		116
Accounts payable and accrued expenses	(8,505)		(31,800)
Accrued interest payable	10,626		(3,933)
Other liabilities	16,565		(12,146)
Tenant leasing costs	(35,911)		(14,904)
Total adjustments	126,520		40,112
Net cash provided by operating activities	234,010		219,490
Cash flows from investing activities:
Acquisitions of real estate	—		(3,580)
Construction in progress	(119,682)		(100,313)
Building and other capital improvements	(39,100)		(26,811)
Tenant improvements	(67,175)		(55,168)
Proceeds from sales of real estate	—		35,397

Capital contributions to unconsolidated joint ventures	(60,745)		(26,293)
Capital distributions from unconsolidated joint ventures	—		20,095

Investment in non-real estate investments	(733)		—


Investments in securities, net	1,843		5,338
Net cash used in investing activities	(285,592)		(151,335)
Cash flows from financing activities:




Borrowings on unsecured line of credit	—		190,000
Repayments of unsecured line of credit	—		(80,000)
Borrowings on unsecured term loan	1,200,000		—
Repayment of unsecured term loan	(730,000)		—


Deferred financing costs	(6,213)		(359)


BOSTON PROPERTIES LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands)
	Three months ended March 31,
	2023		2022
Net activity from equity transactions	586		(332)
Distributions	(171,270)		(170,488)
Contributions from noncontrolling interests in property partnerships	7,555		849
Distributions to noncontrolling interests in property partnerships	(21,606)		(26,640)
Net cash provided by (used in) financing activities	279,052		(86,970)
Net increase (decrease) in cash and cash equivalents and cash held in escrows	227,470		(18,815)
Cash and cash equivalents and cash held in escrows, beginning of period	736,812		501,158
Cash and cash equivalents and cash held in escrows, end of period	$	964,282	$	482,343

Reconciliation of cash and cash equivalents and cash held in escrows:
Cash and cash equivalents, beginning of period	$	690,333	$	452,692
Cash held in escrows, beginning of period	46,479		48,466
Cash and cash equivalents and cash held in escrows, beginning of period	$	736,812	$	501,158

Cash and cash equivalents, end of period	$	918,952	$	436,271
Cash held in escrows, end of period	45,330		46,072
Cash and cash equivalents and cash held in escrows, end of period	$	964,282	$	482,343

Supplemental disclosures:
Cash paid for interest	$	125,698	$	111,904
Interest capitalized	$	10,589	$	13,740

Non-cash investing and financing activities:
Write-off of fully depreciated real estate	$	(55,142)	$	(34,946)
Change in real estate included in accounts payable and accrued expenses	$	11,692	$	16,907













Distributions declared but not paid	$	171,427	$	170,869
Conversions of redeemable partnership units to partners’ capital	$	195	$	5,028
Issuance of restricted securities to employees and non-employee directors	$	46,516	$	46,082

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

BOSTON PROPERTIES, INC. AND BOSTON PROPERTIES LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Organization

BXP is a fully integrated, self-administered and self-managed REIT. BXP is the sole general partner of BPLP, its operating partnership, and at March 31, 2023 owned an approximate 89.4% (89.6% at December 31, 2022) 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 - 2023 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 - 2020 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 2021 - 2023 MYLTIP Units differ from other LTIP Units granted to employees (including the 2012 OPP Units and the 2013 - 2020 MYLTIP Units, which have been earned). Therefore, unless specifically noted otherwise, all references to LTIP Units exclude the 2021 - 2023 MYLTIP Units. LTIP Units (including the earned 2012 OPP Units and the earned 2013 - 2020 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 March 31, 2023, the Company owned or had joint venture interests in a portfolio of 192 commercial real estate properties (the “Properties”) aggregating approximately 54.5 million net rentable square feet of primarily premier workplaces, including 15 properties under construction/redevelopment totaling approximately 4.0 million net rentable square feet. At March 31, 2023, the Properties consisted of:

171 office and life sciences properties (including 12 properties under construction/redevelopment);
14 retail properties (including two properties under construction/redevelopment);
six residential properties (including one property under construction); and
one hotel.

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

2. 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

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, 2022.

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 assets of each VIE are only available to satisfy such VIE's respective liabilities. The Company has determined that it is the primary beneficiary for six of the seven entities that are VIEs as of March 31, 2023.

Consolidated Variable Interest Entities

As of March 31, 2023, 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

As of March 31, 2023, 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 for March 31, 2023 and December 31, 2022, 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”).


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

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

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

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

The following table presents the aggregate carrying value of the Company’s related party note receivable, net, sales-type lease receivable, net, mortgage notes payable, net, unsecured senior notes, net, unsecured line of credit and unsecured term loan, net and the Company’s corresponding estimate of fair value as of March 31, 2023 and December 31, 2022 (in thousands):


	March 31, 2023				December 31, 2022
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Related party note receivable, net	$	78,544	$	79,472	$	78,576	$	79,220
Sales-type lease receivable, net	13,028		13,086		12,811		13,045
Total	$	91,572	$	92,558	$	91,387	$	92,265

Mortgage notes payable, net	$	3,273,553	$	2,826,826	$	3,272,368	$	2,744,479
Unsecured senior notes, net	10,240,967		8,759,487		10,237,968		9,135,512
Unsecured line of credit	—		—		—		—
Unsecured term loan, net	1,194,916		1,200,000		730,000		730,000
Total	$	14,709,436	$	12,786,313	$	14,240,336	$	12,609,991

3. Real Estate

BXP

Real estate consisted of the following at March 31, 2023 and December 31, 2022 (in thousands):


	March 31, 2023		December 31, 2022
Land	$	5,189,287	$	5,189,811
Right of use assets - finance leases	237,503		237,510
Right of use assets - operating leases	166,699		167,351
Land held for future development (1)	626,137		721,501
Buildings and improvements	15,783,962		15,820,724
Tenant improvements	3,291,322		3,200,743
Furniture, fixtures and equipment	50,242		50,310
Construction in progress	618,770		406,574
Total	25,963,922		25,794,524
Less: Accumulated depreciation	(6,424,547)		(6,298,082)
	$	19,539,375	$	19,496,442

(1)Includes pre-development costs.

BPLP

Real estate consisted of the following at March 31, 2023 and December 31, 2022 (in thousands):


	March 31, 2023		December 31, 2022
Land	$	5,094,578	$	5,095,102
Right of use assets - finance leases	237,503		237,510
Right of use assets - operating leases	166,699		167,351
Land held for future development (1)	626,137		721,501
Buildings and improvements	15,512,406		15,547,919
Tenant improvements	3,291,322		3,200,743
Furniture, fixtures and equipment	50,242		50,310
Construction in progress	618,770		406,574
Total	25,597,657		25,427,010
Less: Accumulated depreciation	(6,306,326)		(6,180,474)
	$	19,291,331	$	19,246,536

(1)Includes pre-development costs.

Developments/Redevelopments

On January 5, 2023, the Company commenced the development of 290 Binney Street, an approximately 566,000 net rentable square foot laboratory/life sciences project in Cambridge, Massachusetts. Concurrent with the commencement of this project, the Kendall Center Blue Parking Garage was taken out of service and demolished to support the development of this project. 290 Binney Street is 100% pre-leased to AstraZeneca.

On January 30, 2023, the Company commenced the redevelopment of 300 Binney Street at Kendall Center in Cambridge, Massachusetts. 300 Binney Street consisted of an approximately 195,000 net rentable square foot premier workplace that is being redeveloped into approximately 236,000 net rentable square feet of laboratory/life sciences space. BXP and BPLP recognized approximately $11.0 million of depreciation expense during the three months ended March 31, 2023 associated with the acceleration of depreciation on the assets being removed from service and demolished as part of the redevelopment of the property. The project is 100% pre-leased to the Broad Institute.

4. Leases

The Company estimates the collectability of its accrued rent and accounts receivable balances related to lease revenue. When evaluating the collectability of these accrued rent and accounts receivable balances, management considers tenant creditworthiness, current economic trends, including the impact of the COVID-19 pandemic on tenants’ businesses, and changes in tenants’ payment patterns, on a lease-by-lease basis. If the Company determines that the accrued rent and/or accounts receivable balances are no longer probable of collection then the balances are written-off and the lease is recognized on a cash basis.

If applicable, 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 can be found in Note 5.

Lessor

The following table summarizes the components of lease revenue recognized for its operating and sales-type leases during the three months ended March 31, 2023 and 2022 included within the Company's Consolidated Statements of Operations (in thousands):


	Three months ended March 31,
Lease Revenue	2023		2022
Fixed contractual payments	$	621,646	$	599,607
Variable lease payments	135,003		118,513
Sales-type lease income	226		—
	$	756,875	$	718,120

5. Investments in Unconsolidated Joint Ventures

The investments in unconsolidated joint ventures consist of the following at March 31, 2023 and December 31, 2022:


					Carrying Value of Investment (1)
Entity	Properties	Nominal % Ownership			March 31, 2023		December 31, 2022
					(in thousands)
Square 407 Limited Partnership	Market Square North	50.00	%		$	(6,097)	$	(6,198)
BP/CRF Metropolitan Square LLC	Metropolitan Square	20.00	%		(38,782)		(37,629)
901 New York, LLC	901 New York Avenue	25.00	%	(2)	(12,311)		(12,493)
WP Project Developer LLC	Wisconsin Place Land and Infrastructure	33.33	%	(3)	31,723		31,971
500 North Capitol Venture LLC	500 North Capitol Street, NW	30.00	%		(8,941)		(9,185)
501 K Street LLC	1001 6th Street	50.00	%	(4)	43,661		42,922
Podium Developer LLC	The Hub on Causeway - Podium	50.00	%		45,622		46,839
Residential Tower Developer LLC	Hub50House	50.00	%		42,046		45,414
Hotel Tower Developer LLC	The Hub on Causeway - Hotel Air Rights	50.00	%		12,582		12,366
Office Tower Developer LLC	100 Causeway Street	50.00	%		59,811		59,716
1265 Main Office JV LLC	1265 Main Street	50.00	%		3,605		3,465
BNY Tower Holdings LLC	Dock 72	50.00	%	(5)	(15,362)		(19,921)

CA-Colorado Center, LLC	Colorado Center	50.00	%		234,635		233,862
7750 Wisconsin Avenue LLC	7750 Wisconsin Avenue	50.00	%		51,549		52,152
BP-M 3HB Venture LLC	3 Hudson Boulevard	25.00	%		115,966		116,397
SMBP Venture LP	Santa Monica Business Park	55.00	%		161,786		164,735
Platform 16 Holdings LP	Platform 16	55.00	%	(6)	171,010		158,109
Gateway Portfolio Holdings LLC	Gateway Commons	50.00	%		337,535		324,038
Rosecrans-Sepulveda Partners 4, LLC	Beach Cities Media Campus	50.00	%		26,987		27,000
Safeco Plaza REIT LLC	Safeco Plaza	33.67	%	(7)	68,196		69,785
360 PAS Holdco LLC	360 Park Avenue South	42.21	%	(8)	116,828		114,992
PR II/BXP Reston Gateway LLC	Reston Next Residential	20.00	%	(9)	11,431		11,351
751 Gateway Holdings LLC	751 Gateway	49.00	%		85,430		80,714
200 Fifth Avenue JV LLC	200 Fifth Avenue	26.69	%		114,919		120,083
ABXP Worldgate Investments LLC	13100 and 13150 Worldgate Drive	50.00	%		17,295		N/A
					$	1,671,124	$	1,630,485

(1)Investments with deficit balances aggregating approximately $81.5 million and $85.4 million at March 31, 2023 and December 31, 2022, 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 March 31, 2023 and December 31, 2022, the Company’s economic ownership was approximately 50%.

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

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

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

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

(7)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 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:


	March 31, 2023		December 31, 2022
	(in thousands)
ASSETS
Real estate and development in process, net (1)	$	6,649,580	$	6,537,554
Other assets	755,055		756,786
Total assets	$	7,404,635	$	7,294,340
LIABILITIES AND MEMBERS’/PARTNERS’ EQUITY
Mortgage and notes payable, net	$	4,037,789	$	4,022,746
Other liabilities (2)	723,660		716,271
Members’/Partners’ equity	2,643,186		2,555,323
Total liabilities and members’/partners’ equity	$	7,404,635	$	7,294,340
Company’s share of equity	$	1,271,419	$	1,238,929
Basis differentials (3)	399,705		391,556
Carrying value of the Company’s investments in unconsolidated joint ventures (4)	$	1,671,124	$	1,630,485

(1)At March 31, 2023 and December 31, 2022, this amount included right of use assets - finance leases totaling approximately $248.9 million. At March 31, 2023 and December 31, 2022, this amount included right of use assets - operating leases totaling approximately $20.9 million and $21.2 million, respectively.

(2)At March 31, 2023 and December 31, 2022, this amount included lease liabilities - finance leases totaling approximately $381.0 million and $382.2 million, respectively. At March 31, 2023 and December 31, 2022, this amount included lease liabilities - operating leases totaling approximately $30.5 million.

(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:


	March 31, 2023		December 31, 2022
Property	(in thousands)
Colorado Center	$	301,097	$	301,820
200 Fifth Avenue	99,381		94,497
Gateway Commons	47,707		47,808
Dock 72	(98,120)		(98,980)

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 $81.5 million and $85.4 million at March 31, 2023 and December 31, 2022, respectively, are reflected within Other Liabilities in the Company’s Consolidated Balance Sheets.

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


	Three months ended March 31,
	2023		2022
	(in thousands)
Total revenue (1)	$	151,423	$	124,491
Expenses
Operating	57,206		45,641
Transaction costs	74		—
Depreciation and amortization	49,978		44,664
Total expenses	107,258		90,305
Other income (expense)
Loss from early extinguishment of debt	—		(1,327)
Interest expense	(57,250)		(30,373)
Unrealized loss on derivative instruments	(10,610)		—

Net income (loss)	$	(23,695)	$	2,486

Company’s share of net income (loss)	$	(6,902)	$	3,394


Basis differential (2)	(667)		(1,205)
Income (loss) from unconsolidated joint ventures	$	(7,569)	$	2,189

(1)Includes straight-line rent adjustments of approximately $6.3 million and $27.5 million for the three months ended March 31, 2023 and 2022, respectively.

(2)Includes straight-line rent adjustments of approximately $0.3 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively. Also includes net above-/below-market rent adjustments of approximately $0.2 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively.

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

6. Debt

Unsecured Term Loan

On January 4, 2023, BPLP entered into a credit agreement that provided for a $1.2 billion unsecured term loan facility (the “2023 Unsecured Term Loan”). Under the credit agreement, BPLP may, at any time prior to the maturity date, increase total commitments by up to an additional $300.0 million in aggregate principal amount by increasing

the existing 2023 Unsecured Term Loan or incurring one or more additional term loans, in each case, subject to syndication of the increase and other conditions. The 2023 Unsecured Term Loan matures on May 16, 2024, with one 12-month extension option, subject to customary conditions. Upon entry into the credit agreement, BPLP exercised its option to draw $1.2 billion under the 2023 Unsecured Term Loan, a portion of which was used to repay in full the $730.0 million outstanding under its prior unsecured credit agreement (the “2022 Unsecured Term Loan”), which was scheduled to mature on May 16, 2023. There was no prepayment penalty associated with the repayment of the 2022 Unsecured Term Loan.

At BPLP’s option, loans under the 2023 Unsecured Term Loan will bear interest at a rate per annum equal to (1) a base rate equal to the greatest of (a) the Federal Funds rate plus 0.5%, (b) the administrative agent’s prime rate, (c) Term SOFR for a one-month period plus 1.00%, and (d) 1.00%, in each case, plus a margin ranging from 0 to 60 basis points based on BPLP’s credit rating; or (2) a rate equal to adjusted Term SOFR with a one-month period plus a margin ranging from 75 to 160 basis points based on BPLP’s credit rating. Based on BPLP’s credit rating upon entry into the credit agreement, the base rate margin is 0 basis points and the Term SOFR margin is 0.85%. As of March 31, 2023, the 2023 Unsecured Term Loan bears interest at a rate equal to adjusted Term SOFR plus 0.85% (See Note 13). At March 31, 2023, BPLP had $1.2 billion outstanding under the 2023 Unsecured Term Loan.

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 tenants the obligations of its subsidiaries for the payment of tenant improvement allowances and brokerage commissions in connection with their leases and limited costs arising from delays in delivery of their premises.

The Company had letter of credit and performance obligations related to lender and development requirements that total approximately $25.7 million at March 31, 2023.

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

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

In connection with the refinancing of 767 Fifth Avenue’s (the General Motors Building) secured loan by the Company’s consolidated joint venture entity, 767 Venture, LLC, the Company guaranteed the consolidated entity’s obligation to fund various reserves for tenant improvement costs and allowances, leasing commissions and free rent obligations in lieu of cash deposits. As of March 31, 2023, the maximum funding obligation under the guarantee was approximately $12.5 million. The Company earns a fee from the joint venture for providing the guarantee and has an agreement with the outside partners to reimburse the joint venture for their share of any payments made under the guarantee. As of March 31, 2023, no amounts related to the guarantee were recorded as liabilities in the Company’s consolidated financial statements.

In connection with the development of the Company’s 290 Binney Street project located in Cambridge, Massachusetts, which commenced on January 5, 2023 (see Note 3), the Cambridge Zoning Ordinance requires that a building permit for the construction of a residential project of at least 400,000 square feet be issued prior to or concurrently with the issuance of a building permit for the commercial building. 290 Binney Street and the residential project are components of the Company’s future life sciences development project located in the heart of Kendall Square in Cambridge, Massachusetts, proposed to ultimately consist of two premier workplace properties aggregating approximately 1.1 million rentable square feet of life sciences space and the approximately 400,000 square foot residential building. The commencement of construction of each phase of the overall project is 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 of the remaining phases on the terms and schedule currently contemplated or at all.

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 5% of the value of the affected property. In addition, the Company currently carries earthquake insurance which covers its Seattle region with a $110 million per occurrence limit, and a $110 million annual aggregate limit. This insurance is subject to a deductible in the amount of 2% of the value of the affected property. The amount of the Company’s earthquake insurance coverage may not be sufficient to cover losses from earthquakes. In addition, the amount of earthquake coverage could impact the Company’s ability to finance properties subject to earthquake risk. The Company may discontinue earthquake insurance or change the structure of its earthquake insurance program on some or all of its properties in the future if the premiums exceed the Company’s estimation of the value of the coverage.

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

The Company continues to monitor the state of the insurance market in general, and the scope and costs of coverage for acts of terrorism, earthquakes and pandemics, in particular, but the Company cannot anticipate what coverage will be available on commercially reasonable terms in future policy years. There are other types of losses, such as from wars, for which the Company cannot obtain insurance at all or at a reasonable cost. With respect to

such losses and losses from acts of terrorism, earthquakes, pandemics or other catastrophic events, if the Company experiences a loss that is uninsured or that exceeds policy limits, the Company could lose the capital invested in the damaged properties, as well as the anticipated future revenues from those properties. Depending on the specific circumstances of each affected property, it is possible that the Company could be liable for mortgage indebtedness or other obligations related to the property. Any such loss could materially and adversely affect the Company’s business and financial condition and results of operations.

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 March 31, 2023, the noncontrolling interests in BPLP consisted of 16,527,638 OP Units, 2,131,785 LTIP Units (including 514,854 LTIP Units earned by employees under the Company’s multi-year long-term incentive awards granted between 2012 and 2020 (i.e., 2012 OPP and 2013 - 2020 MYLTIP awards)), 350,989 2021 MYLTIP Units, 253,453 2022 MYLTIP Units and 322,053 2023 MYLTIP Units held by parties other than BXP.

Noncontrolling Interest—Common Units

During the three months ended March 31, 2023, 5,188 OP Units were presented by the holders for redemption (including an aggregate of 5,188 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 March 31, 2023, BPLP had outstanding 350,989 2021 MYLTIP Units, 253,453 2022 MYLTIP Units and 322,053 2023 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 - 2023 MYLTIP, 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 - 2023 MYLTIP Units.

On February 3, 2023, the measurement period for the Company’s 2020 MYLTIP awards ended and, based on BXP’s relative TSR performance, the final payout was determined to be 50% of target, or an aggregate of approximately $3.8 million (after giving effect to employee separations). As a result, an aggregate of 152,460 2020 MYLTIP Units that had been previously granted were automatically forfeited.

The following table presents BPLP’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units, 2013 - 2019 MYLTIP Units and, after the February 3, 2023 measurement date, the 2020 MYLTIP Units) and its distributions on the 2020 MYLTIP Units (prior to the February 3, 2023 measurement date) and 2021 - 2023 MYLTIP Units (after the February 7, 2023 issuance date of the 2023 MYLTIP Units) that occurred during the three months ended March 31, 2023:


Record Date	Payment Date	Distributions per OP Unit and LTIP Unit	Distributions per MYLTIP Unit
March 31, 2023	April 28, 2023	$0.98	$0.098




December 30, 2022	January 30, 2023	$0.98	$0.098

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 three months ended March 31, 2022:


Record Date	Payment Date	Distributions per OP Unit and LTIP Unit	Distributions per MYLTIP Unit
March 31, 2022	April 29, 2022	$0.98	$0.098
December 31, 2021	January 28, 2022	$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 - 2020 MYLTIP Units), assuming in each case that all conditions had been met for the conversion thereof, had all of such units been redeemed at March 31, 2023 was approximately $1.1 billion based on the last reported price of a share of Common Stock on the New York Stock Exchange of $54.12 per share on March 31, 2023.

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 and $1.5 billion at March 31, 2023 and December 31, 2022, respectively, are included in Noncontrolling Interests—Property Partnerships on the accompanying Consolidated Balance Sheets.

9. Stockholders’ Equity / Partners’ Capital

As of March 31, 2023, BXP had 156,829,793 shares of Common Stock outstanding.

As of March 31, 2023, BXP owned 1,754,892 general partnership units and 155,074,901 limited partnership units in BPLP.

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

During the three months ended March 31, 2023, BXP did not issue any shares of Common Stock upon the exercise of options to purchase Common Stock. As a result of the exercise period ending on February 1, 2023, 49,359 options were forfeited.

During the three months ended March 31, 2023, BXP issued 5,188 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 2023 and during the three months ended March 31, 2022:


Record Date	Payment Date	Dividend (Per Share)	Distribution (Per Unit)
March 31, 2023	April 28, 2023	$0.98	$0.98
December 30, 2022	January 30, 2023	$0.98	$0.98



March 31, 2022	April 29, 2022	$0.98	$0.98
December 31, 2021	January 28, 2022	$0.98	$0.98

10. Segment Information

The following tables present reconciliations of Net Income Attributable to Boston Properties, Inc. to the Company’s share of Net Operating Income and Net Income Attributable to Boston Properties Limited Partnership to the Company’s share of Net Operating Income for the three months ended March 31, 2023 and 2022.

BXP


	Three months ended March 31,
	2023		2022
	(in thousands)
Net income attributable to Boston Properties, Inc.	$	77,890	$	143,047
Add:


Noncontrolling interest—common units of the Operating Partnership	9,078		16,361
Noncontrolling interests in property partnerships	18,660		17,549
Interest expense	134,207		101,228


Net operating income from unconsolidated joint ventures	40,756		37,321

Depreciation and amortization expense	208,734		177,624
Transaction costs	911		—
Payroll and related costs from management services contracts	5,235		4,065
General and administrative expense	55,802		43,194
Less:
Net operating income attributable to noncontrolling interests in property partnerships	47,097		47,055
Unrealized gain on non-real estate investment	259		—
Gains (losses) from investments in securities	1,665		(2,262)

Interest and other income (loss)	10,941		1,228

Gains on sales of real estate	—		22,701
Income (loss) from unconsolidated joint ventures	(7,569)		2,189
Direct reimbursements of payroll and related costs from management services contracts	5,235		4,065
Development and management services revenue	8,980		5,831
Company’s share of Net Operating Income	$	484,665	$	459,582

BPLP


	Three months ended March 31,
	2023		2022
	(in thousands)
Net income attributable to Boston Properties Limited Partnership	$	88,830	$	161,829
Add:


Noncontrolling interests in property partnerships	18,660		17,549
Interest expense	134,207		101,228


Net operating income from unconsolidated joint ventures	40,756		37,321

Depreciation and amortization expense	206,872		175,886
Transaction costs	911		—
Payroll and related costs from management services contracts	5,235		4,065
General and administrative expense	55,802		43,194
Less:
Net operating income attributable to noncontrolling interests in property partnerships	47,097		47,055
Unrealized gain on non-real estate investment	259		—
Gains (losses) from investments in securities	1,665		(2,262)

Interest and other income (loss)	10,941		1,228

Gains on sales of real estate	—		23,384
Income (loss) from unconsolidated joint ventures	(7,569)		2,189
Direct reimbursements of payroll and related costs from management services contracts	5,235		4,065
Development and management services revenue	8,980		5,831
Company’s share of Net Operating Income	$	484,665	$	459,582

Net operating income (“NOI”) is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc. and net income attributable to Boston Properties Limited Partnership, as applicable, the most directly comparable GAAP financial measures, plus (1) net income attributable to noncontrolling interests, interest expense, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts and corporate general and administrative expense less (2) unrealized gain on non-real estate investment, gains (losses) from investments in securities, interest and other income (loss), gains on sales of real estate, income (loss) from unconsolidated joint ventures, 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. and net income attributable to Boston Properties Limited Partnership. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. Similarly, interest expense may be incurred at the property level even though the financing proceeds may be used at the corporate level (e.g., used for other investment activity). In addition, depreciation and amortization expense, because of historical cost accounting and useful life estimates, may distort operating performance measures at the property level. NOI presented by the Company may not be comparable to NOI reported by other REITs or real estate companies that define NOI differently.

The Company’s internal reporting utilizes its share of NOI, which includes its share of NOI from consolidated and unconsolidated joint ventures, which is a non-GAAP financial measure that is calculated as the consolidated amount, plus the Company’s share of the amount from the Company’s unconsolidated joint ventures (calculated based upon the Company’s economic percentage ownership interest and, in some cases, after priority allocations), less the Company’s partners’ share of the amount from the Company’s consolidated joint ventures (calculated

based upon the partners’ economic percentage ownership interests and, in some cases, after priority allocations, income allocation to private REIT shareholders and their share of fees due to the Company). The Company’s share of NOI from unconsolidated joint ventures, as defined above, also does not include its share of losses from early extinguishment of debt from unconsolidated joint ventures and unrealized loss on derivative instruments, 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. Interest expense, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts, corporate general and administrative expense, unrealized gain on non-real estate investment, gains (losses) from investments in securities, interest and other income (loss), gains on sales of real estate, income (loss) from unconsolidated joint ventures, 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.

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. The Company also presents information for each segment by property type, including Premier Workplace (which includes office, life sciences and retail), Residential and Hotel.

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

For the three months ended March 31, 2023:


	Boston			Los Angeles			New York			San Francisco			Seattle			Washington, DC			Total
Rental Revenue: (1)
Premier Workplace	$	269,951		$	—		$	258,192		$	136,093		$	14,258		$	90,664		$	769,158
Residential	4,049			—			—			3,642			—			4,035			11,726
Hotel	8,101			—			—			—			—			—			8,101
Total	282,101			—			258,192			139,735			14,258			94,699			788,985
% of Grand Totals	35.76		%	—		%	32.72		%	17.71		%	1.81		%	12.00		%	100.00		%
Rental Expenses:
Premier Workplace	100,049			—			102,485			46,085			2,960			34,266			285,845
Residential	1,552			—			—			2,173			—			1,738			5,463
Hotel	6,671			—			—			—			—			—			6,671
Total	108,272			—			102,485			48,258			2,960			36,004			297,979
% of Grand Totals	36.34		%	—		%	34.39		%	16.20		%	0.99		%	12.08		%	100.00		%
Net operating income	$	173,829		$	—		$	155,707		$	91,477		$	11,298		$	58,695		$	491,006
% of Grand Totals	35.41		%	—		%	31.71		%	18.63		%	2.30		%	11.95		%	100.00		%
Less: Net operating income attributable to noncontrolling interests in property partnerships	(10,817)			—			(36,280)			—			—			—			(47,097)
Add: Company’s share of net operating income from unconsolidated joint ventures	8,577			13,225			3,650			3,464			1,846			9,994			40,756
Company’s share of net operating income	$	171,589		$	13,225		$	123,077		$	94,941		$	13,144		$	68,689		$	484,665
% of Grand Totals	35.41		%	2.73		%	25.39		%	19.59		%	2.71		%	14.17		%	100.00		%

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

For the three months ended March 31, 2022:


	Boston			Los Angeles			New York			San Francisco			Seattle			Washington, DC			Total
Rental Revenue: (1)
Premier Workplace	$	242,078		$	—		$	256,870		$	132,375		$	—		$	95,565		$	726,888
Residential	3,596			—			—			2,391			—			6,979			12,966
Hotel	4,557			—			—			—			—			—			4,557
Total	250,231			—			256,870			134,766			—			102,544			744,411
% of Grand Totals	33.61		%	—		%	34.51		%	18.10		%	—		%	13.78		%	100.00		%
Rental Expenses:
Premier Workplace	90,528			—			96,340			43,408			—			33,547			263,823
Residential	1,437			—			—			1,868			—			3,127			6,432
Hotel	4,840			—			—			—			—			—			4,840
Total	96,805			—			96,340			45,276			—			36,674			275,095
% of Grand Totals	35.19		%	—		%	35.02		%	16.46		%	—		%	13.33		%	100.00		%
Net operating income	$	153,426		$	—		$	160,530		$	89,490		$	—		$	65,870		$	469,316
% of Grand Totals	32.69		%	—		%	34.21		%	19.07		%	—		%	14.03		%	100.00		%
Less: Net operating income attributable to noncontrolling interests in property partnerships	(11,735)			—			(35,320)			—			—			—			(47,055)
Add: Company’s share of net operating income (loss) from unconsolidated joint ventures	9,693			13,757			(156)			3,181			1,955			8,891			37,321
Company’s share of net operating income	$	151,384		$	13,757		$	125,054		$	92,671		$	1,955		$	74,761		$	459,582
% of Grand Totals	32.94		%	2.99		%	27.21		%	20.16		%	0.43		%	16.27		%	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. 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. 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 - 2020 MYLTIP Units required, and the 2021 - 2023 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.


	Three months ended March 31, 2023
	Income (Numerator)		Shares (Denominator)	Per Share Amount
	(in thousands, except for per share amounts)
Basic Earnings:
Net income attributable to Boston Properties, Inc.	$	77,890	156,803	$	0.50


Effect of Dilutive Securities:
Stock Based Compensation	—		240	—
Diluted Earnings:
Net income attributable to Boston Properties, Inc.	$	77,890	157,043	$	0.50

	Three months ended March 31, 2022
	Income (Numerator)		Shares (Denominator)	Per Share Amount
	(in thousands, except for per share amounts)
Basic Earnings:


Net income attributable to Boston Properties, Inc.	$	143,047	156,650	$	0.91
Effect of Dilutive Securities:
Stock Based Compensation	—		354	—
Diluted Earnings:
Net income attributable to Boston Properties, Inc.	$	143,047	157,004	$	0.91

BPLP

The following table provides a reconciliation of both the net income attributable to Boston Properties Limited Partnership 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 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 - 2020 MYLTIP Units required, and the 2021 - 2023 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 17,849,000 and 17,626,000 redeemable common units for the three months ended March 31, 2023 and 2022, respectively.


	Three months ended March 31, 2023
	Income (Numerator)		Units (Denominator)	Per Unit Amount
	(in thousands, except for per unit amounts)
Basic Earnings:
Net income attributable to Boston Properties Limited Partnership	$	88,830	174,652	$	0.51


Effect of Dilutive Securities:
Stock Based Compensation	—		240	—
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership	$	88,830	174,892	$	0.51

	Three months ended March 31, 2022
	Income (Numerator)		Units (Denominator)	Per Unit Amount
	(in thousands, except for per unit amounts)
Basic Earnings:
Net income attributable to Boston Properties Limited Partnership common unitholders	$	161,829	174,276	$	0.93


Effect of Dilutive Securities:
Stock Based Compensation	—		354	—
Diluted Earnings:
Net income attributable to Boston Properties Limited Partnership	$	161,829	174,630	$	0.93

12. Stock Option and Incentive Plan

On January 25, 2023, BXP’s Compensation Committee approved the grant of 2023 MYLTIP awards under the Boston Properties, Inc. 2021 Stock Incentive Plan (the “2021 Plan”) to certain executive officers of BXP, effective February 7, 2023. The 2023 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.

Total earned awards under the 2023 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 322,053 LTIP Units with a target of approximately 161,026 LTIP Units and linear interpolation between zero and maximum. Earned awards (if any) will vest 100% on February 6, 2026, but, in general, may not be converted, redeemed, sold or otherwise transferred for one additional year thereafter. The 2023 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 2023 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 2023 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 2023 MYLTIP Units during the performance period on all of the awarded 2023 MYLTIP Units. Under ASC 718 “Compensation - Stock Compensation,” the 2023 MYLTIP awards have an aggregate value of approximately $13.1 million, which amount will generally be amortized into earnings under the graded vesting method.

During the three months ended March 31, 2023, BXP issued 66,634 shares of restricted common stock and BPLP issued 403,446 LTIP Units and 322,053 2023 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 2023 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 three months ended March 31, 2023 were valued at approximately $5.0 million. The LTIP Units granted were valued at approximately $28.1 million using a Monte Carlo simulation method model. Because the 2012 OPP Units and 2013 - 2023 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 $25.9 million and $20.9 million for the three months ended March 31, 2023 and 2022, respectively. At March 31, 2023, there was (1) an aggregate of approximately $36.0 million of unrecognized compensation expense related to unvested restricted stock, LTIP Units and 2020 MYLTIP Units and (2) an aggregate of approximately $9.1 million of unrecognized compensation expense related to unvested 2021 - 2023 MYLTIP Units that is expected to be recognized over a weighted-average period of approximately 2.4 years.

13. Subsequent Events

On April 21, 2023, a joint venture in which BXP has a 50% interest exercised an option to extend by one year the maturity date of its $252.6 million construction loan collateralized by its 7750 Wisconsin Avenue property. The completed 734,000 square foot build-to-suit, premier workplace is located in Bethesda, Maryland and is 100% leased to an affiliate of Marriott International, Inc. Effective June 1, 2023, the financing will bear interest at a variable rate equal to Term SOFR plus 1.35% per annum and will now mature on April 26, 2024, with a one-year extension option, subject to certain conditions.

On April 29, 2023, the Company completed and fully placed in-service 2100 Pennsylvania Avenue, a premier workplace project with approximately 480,000 net rentable square feet located in Washington, DC.

On May 02, 2023, BPLP executed interest rate swaps in notional amounts aggregating $1.2 billion. These interest rate swaps were entered into to fix Term SOFR under for BPLP’s 2023 Unsecured Term Loan at a weighted-average rate of 4.6420% for the period commencing on May 4, 2023 and ending on May 16, 2024. Based on BPLP’s credit rating as of May 2, 2023, the interest rate for the 2023 Unsecured Term Loan would be 5.592% (See Note 6).

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