What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-06 compared with 2020-08-07 · 288 added, 238 removed, 1308 unchanged (29% of the section changed)

3 unchanged sentences

(Unaudited and in thousands, except for share and par value amounts)

September 30,

2020 December 31,

Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $ 6,581,689 and $ 6,497,031 at June 30, 2020 and December 31, 2019, respectively)

Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $ 6,592,925 and $ 6,497,031 at September 30, 2020 and December 31, 2019, respectively)

$ 22,770,691 $ 22,502,976

Right of use assets - finance leases (amounts related to VIEs of $ 21,000 and $ 21,000 at June 30, 2020 and December 31, 2019, respectively)

Right of use assets - finance leases (amounts related to VIEs of $ 21,000 and $ 21,000 at September 30, 2020 and December 31, 2019, respectively)

237,382 237,394

1 unchanged sentence

146,973 148,640

accumulated depreciation (amounts related to VIEs of $( 1,112,769 ) and $( 1,058,495 ) at June 30, 2020 and December 31, 2019, respectively)

accumulated depreciation (amounts related to VIEs of $( 1,134,450 ) and $( 1,058,495 ) at September 30, 2020 and December 31, 2019, respectively)

( 5,413,709 ) ( 5,266,798 )

Total real estate 17,741,337 17,622,212

Cash and cash equivalents (amounts related to VIEs of $ 300,552 and $ 280,033 at June 30, 2020 and December 31, 2019, respectively)

Cash and cash equivalents (amounts related to VIEs of $ 267,229 and $ 280,033 at September 30, 2020 and December 31, 2019, respectively)

1,714,783 644,950

2 unchanged sentences

Investments in securities 34,934 36,747

Tenant and other receivables, net (amounts related to VIEs of $ 11,989 and $ 28,918 at June 30, 2020 and December 31, 2019, respectively)

Tenant and other receivables, net (amounts related to VIEs of $ 12,968 and $ 28,918 at September 30, 2020 and December 31, 2019, respectively)

76,330 112,807

2 unchanged sentences

25,304 15,920

Accrued rental income, net (amounts related to VIEs of $ 304,929 and $ 298,318 at June 30, 2020 and December 31, 2019, respectively)

Accrued rental income, net (amounts related to VIEs of $ 323,220 and $ 298,318 at September 30, 2020 and December 31, 2019, respectively)

1,111,078 1,038,788

Deferred charges, net (amounts related to VIEs of $ 190,708 and $ 214,769 at June 30, 2020 and December 31, 2019, respectively)

Deferred charges, net (amounts related to VIEs of $ 187,025 and $ 214,769 at September 30, 2020 and December 31, 2019, respectively)

644,036 689,213

Prepaid expenses and other assets (amounts related to VIEs of $ 18,741 and $ 20,931 at June 30, 2020 and December 31, 2019, respectively)

Prepaid expenses and other assets (amounts related to VIEs of $ 53,529 and $ 20,931 at September 30, 2020 and December 31, 2019, respectively)

106,524 41,685

2 unchanged sentences

LIABILITIES AND EQUITY

Mortgage notes payable, net (amounts related to VIEs of $ 2,913,287 and $ 2,918,806 at June 30, 2020 and December 31, 2019, respectively)

Mortgage notes payable, net (amounts related to VIEs of $ 2,910,460 and $ 2,918,806 at September 30, 2020 and December 31, 2019, respectively)

$ 2,912,494 $ 2,922,408

2 unchanged sentences

Unsecured term loan, net 499,270 498,939

Lease liabilities - finance leases (amounts related to VIEs of $ 20,227 and $ 20,189 at June 30, 2020 and December 31, 2019, respectively)

Lease liabilities - finance leases (amounts related to VIEs of $ 20,266 and $ 20,189 at September 30, 2020 and December 31, 2019, respectively)

233,288 224,042

Lease liabilities - operating leases 201,337 200,180

Accounts payable and accrued expenses (amounts related to VIEs of $ 25,685 and $ 45,777 at June 30, 2020 and December 31, 2019, respectively)

Accounts payable and accrued expenses (amounts related to VIEs of $ 26,848 and $ 45,777 at September 30, 2020 and December 31, 2019, respectively)

345,959 377,553

2 unchanged sentences

88,826 90,016

Other liabilities (amounts related to VIEs of $ 132,460 and $ 140,110 at June 30, 2020 and December 31, 2019, respectively)

Other liabilities (amounts related to VIEs of $ 128,451 and $ 140,110 at September 30, 2020 and December 31, 2019, respectively)

369,932 387,994

1 unchanged sentence

Commitments and contingencies — —

Redeemable deferred stock units— 66,424 and 60,676 units outstanding at redemption value at June 30, 2020 and December 31, 2019, respectively

Table of Content s

Redeemable deferred stock units— 69,787 and 60,676 units outstanding at redemption value at September 30, 2020 and December 31, 2019, respectively

Table of Conte n ts

BOSTON PROPERTIES, INC.

1 unchanged sentence

(Unaudited and in thousands, except for share and par value amounts)

September 30,

2020 December 31,

2 unchanged sentences

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized;

5.25 % Series B cumulative redeemable preferred stock, $ 0.01 par value, liquidation preference $ 2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding at June 30, 2020 and December 31, 2019

200,000 200,000

Common stock, $ 0.01 par value, 250,000,000 shares authorized, 155,701,186 and 154,869,198 issued and 155,622,286 and 154,790,298 outstanding at June 30, 2020 and December 31, 2019, respectively

Common stock, $ 0.01 par value, 250,000,000 shares authorized, 155,715,200 and 154,869,198 issued and 155,636,300 and 154,790,298 outstanding at September 30, 2020 and December 31, 2019, respectively

Additional paid-in capital

1 unchanged sentence

Dividends in excess of earnings ( 364,720 ) ( 760,523 )

Treasury common stock at cost, 78,900 shares at June 30, 2020 and December 31, 2019

Treasury common stock at cost, 78,900 shares at September 30, 2020 and December 31, 2019

( 2,722 ) ( 2,722 )

8 unchanged sentences

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

Table of Content s

Table of Conte n ts

BOSTON PROPERTIES, INC.

1 unchanged sentence

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

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2019 2020 2019

14 unchanged sentences

Other income (expense)

Income from unconsolidated joint ventures 1,832 47,964 1,463 48,177

Gains on sales of real estate 203,767 1,686 613,932 781

Income (loss) from unconsolidated joint ventures ( 6,873 ) ( 649 ) ( 5,410 ) 47,528

Gains (losses) on sales of real estate ( 209 ) ( 15 ) 613,723 766

Interest and other income (loss) ( 45 ) 7,178 4,277 14,546

Gains (losses) from investments in securities 4,552 1,165 ( 893 ) 4,134

Gains from investments in securities 1,858 106 965 4,240

Impairment loss — — — ( 24,038 )

Loss from early extinguishment of debt — ( 28,010 ) — ( 28,010 )

Interest expense ( 110,993 ) ( 106,471 ) ( 319,726 ) ( 309,837 )

18 unchanged sentences

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

Table of Content s

Table of Conte n ts

BOSTON PROPERTIES, INC.

1 unchanged sentence

(Unaudited and in thousands)

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2019 2020 2019

13 unchanged sentences

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

Table of Content s

Table of Conte n ts

BOSTON PROPERTIES, INC.

4 unchanged sentences

Shares Amount

Equity, March 31, 2020 155,315 $ 1,553 $ 200,000 $ 6,321,475 $ ( 416,740 ) $ ( 2,722 ) $ ( 55,700 ) $ 636,572 $ 1,736,445 $ 8,420,883

Equity, June 30, 2020 155,622 $ 1,556 $ 200,000 $ 6,340,665 $ ( 302,511 ) $ ( 2,722 ) $ ( 54,921 ) $ 640,491 $ 1,724,588 $ 8,547,146

Redemption of operating partnership units to common stock 9 — — 338 — — — ( 338 ) — —

Allocated net income (loss) for the period — — — — 269,361 — — 29,986 ( 767 ) 298,580

Allocated net income for the period — — — — 92,934 — — 9,565 15,561 118,060

Dividends/distributions declared — — — — ( 155,143 ) — — ( 17,183 ) — ( 172,326 )

Shares issued pursuant to stock purchase plan 5 — — 434 — — — — — 434

Net activity from stock option and incentive plan — — — 1,390 — — — 7,249 — 8,639

4 unchanged sentences

Reallocation of noncontrolling interest — — — 5,249 — — — ( 5,249 ) — —

Equity, June 30, 2020

Equity, September 30, 2020

155,636 $ 1,556 $ 200,000 $ 6,348,076 $ ( 364,720 ) $ ( 2,722 ) $ ( 52,622 ) $ 634,796 $ 1,730,674 $ 8,495,038

Equity, March 31, 2019 154,515 $ 1,545 $ 200,000 $ 6,414,612 $ ( 728,083 ) $ ( 2,722 ) $ ( 48,734 ) $ 623,061 $ 1,710,608 $ 8,170,287

Equity, June 30, 2019 154,563 $ 1,546 $ 200,000 $ 6,278,961 $ ( 710,592 ) $ ( 2,722 ) $ ( 51,340 ) $ 608,593 $ 1,696,221 $ 8,020,667

Redemption of operating partnership units to common stock 7 — — 223 — — — ( 223 ) — —

1 unchanged sentence

Dividends/distributions declared — — — — ( 149,468 ) — — ( 17,200 ) — ( 166,668 )

Shares issued pursuant to stock purchase plan 2 — — 315 — — — — — 315

Net activity from stock option and incentive plan — — — ( 7,219 ) — — — 6,774 — ( 445 )

Sale of an interest in property partnerships — — — ( 4,216 ) — — — — 4,216 —

Acquisition of noncontrolling interest in property partnership — — — 43 — — — — — 43

4 unchanged sentences

Reallocation of noncontrolling interest — — — 6,685 — — — ( 6,685 ) — —

Equity, June 30, 2019

Equity, September 30, 2019

154,572 $ 1,546 $ 200,000 $ 6,274,792 $ ( 749,666 ) $ ( 2,722 ) $ ( 51,996 ) $ 603,690 $ 1,720,123 $ 7,995,767

Table of Content s

Table of Conte n ts

BOSTON PROPERTIES, INC.

16 unchanged sentences

Reallocation of noncontrolling interest — — — 16,278 — — — ( 16,278 ) — —

Equity, June 30, 2020

Equity, September 30, 2020

155,636 $ 1,556 $ 200,000 $ 6,348,076 $ ( 364,720 ) $ ( 2,722 ) $ ( 52,622 ) $ 634,796 $ 1,730,674 $ 8,495,038

6 unchanged sentences

Net activity from stock option and incentive plan 66 — — ( 2,665 ) — — — 29,552 — 26,887

Sale of an interest in property partnerships — — — ( 4,216 ) — — — — 4,216 —

Acquisition of noncontrolling interest in property partnerships — — — ( 162,462 ) — — — — ( 24,501 ) ( 186,963 )

4 unchanged sentences

Reallocation of noncontrolling interest — — — 34,390 — — — ( 34,390 ) — —

Equity, June 30, 2019

Equity, September 30, 2019

154,572 $ 1,546 $ 200,000 $ 6,274,792 $ ( 749,666 ) $ ( 2,722 ) $ ( 51,996 ) $ 603,690 $ 1,720,123 $ 7,995,767

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

Table of Content s

Table of Conte n ts

BOSTON PROPERTIES, INC.

1 unchanged sentence

(Unaudited and in thousands)

Six months ended June 30,

Nine months ended September 30,

Cash flows from operating activities:

5 unchanged sentences

Non-cash compensation expense 36,152 33,253

Income from unconsolidated joint ventures ( 1,463 ) ( 48,177 )

Loss (Income) from unconsolidated joint ventures 5,410 ( 47,528 )

Distributions of net cash flow from operations of unconsolidated joint ventures

Losses (gains) from investments in securities 893 ( 4,134 )

22,285 16,770

Gains from investments in securities ( 965 ) ( 4,240 )

Allowance for current expected credit losses 1,997 —

Non-cash portion of interest expense 17,397 16,594

Settlement of accreted debt discount on redemption of unsecured senior notes — ( 763 )

Loss from early extinguishment of debt — 28,010

Gains on sales of real estate ( 613,723 ) ( 766 )

16 unchanged sentences

Tenant improvements ( 172,401 ) ( 191,532 )

Right of use assets - finance leases — ( 5,152 )

Proceeds from sales of real estate 505,679 83,486

3 unchanged sentences

55,123 136,807

Cash and cash equivalents deconsolidated — ( 24,112 )

Issuance of notes receivable, net ( 9,800 ) —

2 unchanged sentences

Net cash used in investing activities ( 388,411 ) ( 736,466 )

Table of Content s

Table of Conte n ts

BOSTON PROPERTIES, INC.

1 unchanged sentence

(Unaudited and in thousands)

Six months ended June 30,

Nine months ended September 30,

Cash flows from financing activities:

1 unchanged sentence

Proceeds from unsecured senior notes 1,248,125 1,548,106

Redemption of unsecured senior notes — ( 699,237 )

Borrowings on unsecured line of credit 265,000 380,000

2 unchanged sentences

Deferred financing costs ( 10,416 ) ( 13,130 )

Debt prepayment and extinguishment costs — ( 27,270 )

Net proceeds from equity transactions 3,276 2,562

20 unchanged sentences

Change in real estate included in accounts payable and accrued expenses $ ( 30,924 ) $ 95,857

Real estate acquired through finance lease $ — $ 122,563

Right of use assets obtained in exchange for lease liabilities $ — $ 287,540

Prepaid rent reclassified to right of use asset $ — $ 15,000

Accrued rental income, net deconsolidated $ ( 4,558 ) $ —

2 unchanged sentences

Tenant improvements, net deconsolidated $ ( 12,331 ) $ —

Right of use asset - finance lease deconsolidated $ — $ ( 135,004 )

Lease liability - finance lease deconsolidated $ — $ 119,534

Investment in unconsolidated joint venture recorded upon deconsolidation $ 347,898 $ 29,246

Table of Conte n ts

BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)

Nine months ended September 30,

Dividends and distributions declared but not paid $ 171,070 $ 165,421

2 unchanged sentences

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

Table of Content s

Table of Conte n ts

BOSTON PROPERTIES LIMITED PARTNERSHIP

1 unchanged sentence

(Unaudited and in thousands, except for unit amounts)

September 30,

2020 December 31,

Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $ 6,581,689 and $ 6,497,031 at June 30, 2020 and December 31, 2019, respectively)

Real estate, at cost (amounts related to variable interest entities (“VIEs”) of $ 6,592,925 and $ 6,497,031 at September 30, 2020 and December 31, 2019, respectively)

$ 22,393,882 $ 22,107,755

Right of use assets - finance leases (amounts related to VIEs of $ 21,000 and $ 21,000 at June 30, 2020 and December 31, 2019, respectively)

Right of use assets - finance leases (amounts related to VIEs of $ 21,000 and $ 21,000 at September 30, 2020 and December 31, 2019, respectively)

237,382 237,394

Right of use assets - operating leases 146,973 148,640

accumulated depreciation (amounts related to VIEs of $( 1,112,769 ) and $( 1,058,495 ) at June 30, 2020 and December 31, 2019, respectively)

accumulated depreciation (amounts related to VIEs of $( 1,134,450 ) and $( 1,058,495 ) at September 30, 2020 and December 31, 2019, respectively)

( 5,309,930 ) ( 5,162,908 )

Total real estate 17,468,307 17,330,881

Cash and cash equivalents (amounts related to VIEs of $ 300,552 and $ 280,033 at June 30, 2020 and December 31, 2019, respectively)

Cash and cash equivalents (amounts related to VIEs of $ 267,229 and $ 280,033 at September 30, 2020 and December 31, 2019, respectively)

1,714,783 644,950

2 unchanged sentences

Investments in securities 34,934 36,747

Tenant and other receivables, net (amounts related to VIEs of $ 11,989 and $ 28,918 at June 30, 2020 and December 31, 2019, respectively)

Tenant and other receivables, net (amounts related to VIEs of $ 12,968 and $ 28,918 at September 30, 2020 and December 31, 2019, respectively)

76,330 112,807

1 unchanged sentence

Notes receivable, net 25,304 15,920

Accrued rental income, net (amounts related to VIEs of $ 304,929 and $ 298,318 at June 30, 2020 and December 31, 2019, respectively)

Accrued rental income, net (amounts related to VIEs of $ 323,220 and $ 298,318 at September 30, 2020 and December 31, 2019, respectively)

1,111,078 1,038,788

Deferred charges, net (amounts related to VIEs of $ 190,708 and $ 214,769 at June 30, 2020 and December 31, 2019, respectively)

Deferred charges, net (amounts related to VIEs of $ 187,025 and $ 214,769 at September 30, 2020 and December 31, 2019, respectively)

644,036 689,213

Prepaid expenses and other assets (amounts related to VIEs of $ 18,741 and $ 20,931 at June 30, 2020 and December 31, 2019, respectively)

Prepaid expenses and other assets (amounts related to VIEs of $ 53,529 and $ 20,931 at September 30, 2020 and December 31, 2019, respectively)

106,524 41,685

2 unchanged sentences

LIABILITIES AND CAPITAL

Mortgage notes payable, net (amounts related to VIEs of $ 2,913,287 and $ 2,918,806 at June 30, 2020 and December 31, 2019, respectively)

Mortgage notes payable, net (amounts related to VIEs of $ 2,910,460 and $ 2,918,806 at September 30, 2020 and December 31, 2019, respectively)

$ 2,912,494 $ 2,922,408

2 unchanged sentences

Unsecured term loan, net 499,270 498,939

Lease liabilities - finance leases (amounts related to VIEs of $ 20,227 and $ 20,189 at June 30, 2020 and December 31, 2019, respectively)

Lease liabilities - finance leases (amounts related to VIEs of $ 20,266 and $ 20,189 at September 30, 2020 and December 31, 2019, respectively)

233,288 224,042

1 unchanged sentence

201,337 200,180

Accounts payable and accrued expenses (amounts related to VIEs of $ 25,685 and $ 45,777 at June 30, 2020 and December 31, 2019, respectively)

Accounts payable and accrued expenses (amounts related to VIEs of $ 26,848 and $ 45,777 at September 30, 2020 and December 31, 2019, respectively)

345,959 377,553

2 unchanged sentences

88,826 90,016

Other liabilities (amounts related to VIEs of $ 132,460 and $ 140,110 at June 30, 2020 and December 31, 2019, respectively)

Other liabilities (amounts related to VIEs of $ 128,451 and $ 140,110 at September 30, 2020 and December 31, 2019, respectively)

369,932 387,994

1 unchanged sentence

Commitments and contingencies — —

Table of Content s

Redeemable deferred stock units— 69,787 and 60,676 units outstanding at redemption value at September 30, 2020 and December 31, 2019, respectively

Table of Conte n ts

BOSTON PROPERTIES LIMITED PARTNERSHIP

1 unchanged sentence

(Unaudited and in thousands, except for unit amounts)

September 30,

2020 December 31,

Redeemable deferred stock units— 66,424 and 60,676 units outstanding at redemption value at June 30, 2020 and December 31, 2019, respectively

Noncontrolling interests:

Redeemable partnership units— 16,123,912 and 16,764,466 common units and 1,345,723 and 1,143,215 long term incentive units outstanding at redemption value at June 30, 2020 and December 31, 2019, respectively

Redeemable partnership units— 16,120,074 and 16,764,466 common units and 1,338,400 and 1,143,215 long term incentive units outstanding at redemption value at September 30, 2020 and December 31, 2019, respectively

1,406,484 2,468,753

5.25 % Series B cumulative redeemable preferred units, liquidation preference $ 2,500 per unit, 80,000 units issued and outstanding at June 30, 2020 and December 31, 2019

5.25 % Series B cumulative redeemable preferred units, liquidation preference $ 2,500 per unit, 80,000 units issued and outstanding at September 30, 2020 and December 31, 2019

193,623 193,623

Boston Properties Limited Partnership partners’ capital— 1,730,919 and 1,726,980 general partner units and 153,891,367 and 153,063,318 limited partner units outstanding at June 30, 2020 and December 31, 2019, respectively

Boston Properties Limited Partnership partners’ capital— 1,730,948 and 1,726,980 general partner units and 153,905,352 and 153,063,318 limited partner units outstanding at September 30, 2020 and December 31, 2019, respectively

4,943,849 3,380,175

5 unchanged sentences

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

Table of Content s

Table of Conte n ts

BOSTON PROPERTIES LIMITED PARTNERSHIP

1 unchanged sentence

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

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2019 2020 2019

14 unchanged sentences

Other income (expense)

Income from unconsolidated joint ventures 1,832 47,964 1,463 48,177

Gains on sales of real estate 207,241 1,835 626,895 930

Income (loss) from unconsolidated joint ventures ( 6,873 ) ( 649 ) ( 5,410 ) 47,528

Gains (losses) on sales of real estate ( 209 ) ( 15 ) 626,686 915

Interest and other income (loss) ( 45 ) 7,178 4,277 14,546

Gains (losses) from investments in securities 4,552 1,165 ( 893 ) 4,134

Gains from investments in securities 1,858 106 965 4,240

Impairment loss — — — ( 22,272 )

Loss from early extinguishment of debt — ( 28,010 ) — ( 28,010 )

Interest expense ( 110,993 ) ( 106,471 ) ( 319,726 ) ( 309,837 )

14 unchanged sentences

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

Table of Content s

Table of Conte n ts

BOSTON PROPERTIES LIMITED PARTNERSHIP

1 unchanged sentence

(Unaudited and in thousands)

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2019 2020 2019

5 unchanged sentences

Comprehensive income 122,514 142,625 1,007,755 479,562

Comprehensive (income) loss attributable to noncontrolling interests

623 ( 17,626 ) ( 19,007 ) ( 36,600 )

Comprehensive income attributable to noncontrolling interests ( 15,705 ) ( 18,614 ) ( 34,712 ) ( 55,214 )

Comprehensive income attributable to Boston Properties Limited Partnership

3 unchanged sentences

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

Table of Content s

Table of Conte n ts

BOSTON PROPERTIES LIMITED PARTNERSHIP

5 unchanged sentences

Interests - Property Partnerships Total Capital Noncontrolling Interests - Redeemable Partnership Units

Equity, March 31, 2020

Equity, June 30, 2020

1,731 153,891 $ 4,828,066 $ 193,623 $ ( 54,921 ) $ 1,724,588 $ 6,691,356 $ 1,581,010

1 unchanged sentence

— 5 421 — — — 421 ( 219 )

Allocated net income (loss) for the period

— — 271,989 2,625 — ( 767 ) 273,847 29,986

Allocated net income for the period — — 92,059 2,625 — 15,561 110,245 9,565

Distributions

14 unchanged sentences

— — — — — ( 11,026 ) ( 11,026 ) —

Equity, September 30, 2020 1,731 153,905 $ 4,943,849 $ 193,623 $ ( 52,622 ) $ 1,730,674 $ 6,815,524 $ 1,406,484

Equity, June 30, 2019

Equity, March 31, 2019

1,726 152,837 $ 3,562,910 $ 193,623 $ ( 51,340 ) $ 1,696,221 $ 5,401,414 $ 2,324,238

Contributions — 2 ( 3,915 ) — — — ( 3,915 ) —

Allocated net income for the year — — 166,687 2,625 — 17,482 186,794 19,028

Allocated net income for the period — — 109,611 2,625 — 18,470 130,706 12,506

Distributions — — ( 146,843 ) ( 2,625 ) — — ( 149,468 ) ( 17,200 )

5 unchanged sentences

Acquisition of noncontrolling interest in property partnership — — 43 — — — 43 —

Sale of an interest in property partnerships — — — — — 4,216 4,216 —

Contributions from noncontrolling interests in property partnerships — — — — — 14,820 14,820 —

Distributions to noncontrolling interests in property partnerships — — — — — ( 13,748 ) ( 13,748 ) —

Equity, June 30, 2019 1,726 152,837 $ 3,562,910 $ 193,623 $ ( 51,340 ) $ 1,696,221 $ 5,401,414 $ 2,324,238

Table of Content s

Equity, September 30, 2019 1,726 152,846 $ 3,505,572 $ 193,623 $ ( 51,996 ) $ 1,720,123 $ 5,367,322 $ 2,335,272

Table of Conte n ts

BOSTON PROPERTIES LIMITED PARTNERSHIP

29 unchanged sentences

— — — — — ( 40,091 ) ( 40,091 ) —

Equity, June 30, 2020 1,731 153,891 $ 4,828,066 $ 193,623 $ ( 54,921 ) $ 1,724,588 $ 6,691,356 $ 1,581,010

Equity, September 30, 2020 1,731 153,905 $ 4,943,849 $ 193,623 $ ( 52,622 ) $ 1,730,674 $ 6,815,524 $ 1,406,484

Equity, December 31, 2018

19 unchanged sentences

Acquisition of noncontrolling interest in property partnership — — ( 162,462 ) — — ( 24,501 ) ( 186,963 ) —

Sale of an interest in property partnerships — — — — — 4,216 4,216 —

Contributions from noncontrolling interests in property partnerships

2 unchanged sentences

— — — — — ( 53,149 ) ( 53,149 ) —

Equity, June 30, 2019 1,726 152,837 $ 3,562,910 $ 193,623 $ ( 51,340 ) $ 1,696,221 $ 5,401,414 $ 2,324,238

Equity, September 30, 2019 1,726 152,846 $ 3,505,572 $ 193,623 $ ( 51,996 ) $ 1,720,123 $ 5,367,322 $ 2,335,272

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

Table of Content s

Table of Conte n ts

BOSTON PROPERTIES LIMITED PARTNERSHIP

1 unchanged sentence

(Unaudited and in thousands)

Six months ended June 30,

Nine months ended September 30,

Cash flows from operating activities:

5 unchanged sentences

Non-cash compensation expense 36,152 33,253

Income from unconsolidated joint ventures ( 1,463 ) ( 48,177 )

Loss (Income) from unconsolidated joint ventures 5,410 ( 47,528 )

Distributions of net cash flow from operations of unconsolidated joint ventures 22,285 16,770

Losses (gains) from investments in securities 893 ( 4,134 )

Gains from investments in securities ( 965 ) ( 4,240 )

Allowance for current expected credit losses 1,997 —

Non-cash portion of interest expense 17,397 16,594

Settlement of accreted debt discount on redemption of unsecured senior notes — ( 763 )

Loss from early extinguishment of debt — 28,010

Gains on sales of real estate ( 626,686 ) ( 915 )

16 unchanged sentences

Tenant improvements ( 172,401 ) ( 191,532 )

Right of use assets - finance leases — ( 5,152 )

Proceeds from sales of real estate 505,679 83,486

1 unchanged sentence

Capital distributions from unconsolidated joint ventures 55,123 136,807

Cash and cash equivalents deconsolidated — ( 24,112 )

Issuance of notes receivable, net ( 9,800 ) —

1 unchanged sentence

Net cash used in investing activities ( 388,411 ) ( 736,466 )

Table of Content s

Table of Conte n ts

BOSTON PROPERTIES LIMITED PARTNERSHIP

1 unchanged sentence

(Unaudited and in thousands)

Six months ended June 30,

Nine months ended September 30,

Cash flows from financing activities:

1 unchanged sentence

Proceeds from unsecured senior notes 1,248,125 1,548,106

Redemption of unsecured senior notes — ( 699,237 )

Borrowings on unsecured line of credit 265,000 380,000

2 unchanged sentences

Deferred financing costs ( 10,416 ) ( 13,130 )

Debt prepayment and extinguishment costs — ( 27,270 )

Net proceeds from equity transactions 3,276 2,562

20 unchanged sentences

Change in real estate included in accounts payable and accrued expenses $ ( 30,924 ) $ 95,857

Real estate acquired through finance lease $ — $ 122,563

Right of use assets obtained in exchange for lease liabilities $ — $ 287,540

Prepaid rent reclassified to right of use asset $ — $ 15,000

Accrued rental income, net deconsolidated $ ( 4,558 ) $ —

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Tenant improvements, net deconsolidated $ ( 12,331 ) $ —

Right of use asset - finance lease deconsolidated $ — $ ( 135,004 )

Lease liability - finance lease deconsolidated $ — $ 119,534

Investment in unconsolidated joint venture recorded upon deconsolidation $ 347,898 $ 29,246

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BOSTON PROPERTIES LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)

Nine months ended September 30,

Distributions declared but not paid $ 171,070 $ 165,421

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

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BOSTON PROPERTIES, INC.

3 unchanged sentences

Boston Properties, Inc.

is the sole general partner of Boston Properties Limited Partnership, its operating partnership, and at June 30, 2020 owned an approximate 89.9 % ( 89.6 % at December 31, 2019) general and limited partnership interest in Boston Properties Limited Partnership.

is the sole general partner of Boston Properties Limited Partnership, its operating partnership, and at September 30, 2020 owned an approximate 89.9 % ( 89.6 % at December 31, 2019) general and limited partnership interest in Boston Properties Limited Partnership.

Unless stated otherwise or the context requires, the “Company” refers to Boston Properties, Inc.

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LTIP Units (including the earned 2012 OPP Units and the earned 2013 - 2017 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 11).

At June 30, 2020, there was one series of Preferred Units outstanding (i.e., Series B Preferred Units).

At September 30, 2020, there was one series of Preferred Units outstanding (i.e., Series B Preferred Units).

The Series B Preferred Units were issued to Boston Properties, Inc.

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contributed the net proceeds from the offering to Boston Properties Limited Partnership in exchange for 80,000 Series B Preferred Units having terms and preferences generally mirroring those of the Series B Preferred Stock (See Note 9).

At June 30, 2020, the Company owned or had interests in a portfolio of 195 commercial real estate properties (the “Properties”) aggregating approximately 51.2 million net rentable square feet of primarily Class A office properties, including nine properties under construction/redevelopment totaling approximately 5.0 million net rentable square feet.

At June 30, 2020, the Properties consisted of:

At September 30, 2020, the Company owned or had joint venture interests in a portfolio of 196 commercial real estate properties (the “Properties”) aggregating approximately 51.2 million net rentable square feet of primarily Class A office properties, including seven properties under construction/redevelopment totaling approximately 4.3 million net rentable square feet.

At September 30, 2020, the Properties consisted of:

• 177 office properties (including seven properties under construction/redevelopment);

• 12 retail properties;

• six residential properties (including two properties under construction);

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• six residential properties;

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

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Consolidated Variable Interest Entities

As of June 30, 2020, Boston Properties, Inc.

As of September 30, 2020, Boston Properties, Inc.

has identified six consolidated VIEs, including Boston Properties Limited Partnership.

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In addition, Boston Properties, Inc.’s only significant asset is its investment in Boston Properties Limited Partnership and, consequently, substantially all of Boston Properties, Inc.’s assets and liabilities are the assets and liabilities of Boston Properties Limited Partnership.

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Variable Interest Entities Not Consolidated

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

The following table presents the aggregate carrying value of the Company’s related party note receivable, net, notes receivable, net, 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 June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020 December 31, 2019

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, 2020 and December 31, 2019 (in thousands):

September 30, 2020 December 31, 2019

Amount Estimated

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Total $ 13,048,161 $ 14,175,648 $ 11,811,806 $ 12,311,892

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New Accounting Pronouncements Adopted

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The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.

During the six months ended June 30, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

During the nine months ended September 30, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves the presentation of derivatives consistent with past presentation.

The Company continues to

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evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

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Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

Consolidation

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Boston Properties, Inc.

Real estate consisted of the following at June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020 December 31, 2019

Real estate consisted of the following at September 30, 2020 and December 31, 2019 (in thousands):

September 30, 2020 December 31, 2019

Land $ 5,069,206 $ 5,111,606

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Boston Properties Limited Partnership

Real estate consisted of the following at June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020 December 31, 2019

Real estate consisted of the following at September 30, 2020 and December 31, 2019 (in thousands):

September 30, 2020 December 31, 2019

Land $ 4,971,990 $ 5,011,153

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(1) Includes pre-development costs.

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On March 26, 2020, the Company completed and fully placed in-service 17Fifty Presidents Street located in Reston, Virginia.

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On June 26, 2020, the Company completed the acquisition of real property at 777 Harrison Street (known as Fourth + Harrison and formerly known as 425 Fourth Street) located in San Francisco, California for a gross purchase price, including entitlements, totaling approximately $ 140.1 million.

On July 31, 2020, the Company acquired an undivided ownership interest in real property at 759 Harrison Street located in San Francisco, California, which is expected to be included in the Fourth + Harrison development project, for a purchase price totaling approximately $ 2.3 million.

Fourth + Harrison is expected to support the development of approximately 804,000 square feet of primarily commercial office space.

On August 15, 2020, the Company completed and fully placed in-service The Skylyne, an approximately 331,000 square foot project comprised of 402 residential units and retail space located in Oakland, California.

On January 28, 2020, the Company entered into a joint venture with a third party to own, operate and develop properties at its Gateway Commons complex located in South San Francisco, California.

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The Company recognized a gain on the retained and sold interest in the real estate contributed to the joint venture totaling approximately $ 217.7 million for Boston Properties, Inc.

and $ 222.4 million for Boston Properties Limited Partnership during the six months ended June 30, 2020 within Gains on Sales of Real Estate on the respective Consolidated Statements of Operations, as the fair value of the real estate exceeded its carrying value.

601, 611 and 651 Gateway contributed approximately $ 0.2 million of net income to the Company for the period from January 1, 2020 through January 27, 2020 and contributed approximately $ 3.1 million and $ 6.0 million of net income to the Company for the three and six months ended June 30, 2019, respectively.

and $ 222.4 million for Boston Properties Limited Partnership during the nine months ended September 30, 2020 within Gains on Sales of Real Estate on the respective Consolidated Statements of Operations, as the fair value of the real estate exceeded its carrying value.

601, 611 and 651 Gateway contributed approximately $ 0.2 million of net income to the Company for the period from January 1, 2020 through January 27, 2020 and contributed approximately $ 2.4 million and $ 8.5 million of net income to the Company for the three and nine months ended September 30, 2019, respectively.

On February 20, 2020, the Company completed the sale of New Dominion Technology Park located in Herndon, Virginia for a gross sale price of $ 256.0 million.

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New Dominion Technology Park is comprised of two Class A office properties aggregating approximately 493,000 net rentable square feet.

New Dominion Technology Park contributed approximately $ 1.6 million of net income to the Company for the period from January 1, 2020 through February 19, 2020 and contributed approximately $ 2.1 million and $ 4.2 million of net income to the Company for the three and six months ended June 30, 2019, respectively.

New Dominion Technology Park contributed approximately $ 1.6 million of net income to the Company for the period from January 1, 2020 through February 19, 2020 and contributed approximately $ 2.1 million and $ 6.3 million of net income to the Company for the three and nine months ended September 30, 2019, respectively.

On June 25, 2020, the Company completed the sale of a portion of its Capital Gallery property located in Washington, DC for a gross sale price of approximately $ 253.7 million.

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The Company continues to own the land, underground parking garage and remaining commercial office and retail space containing approximately 176,000 net rentable square feet at the property.

The sold portion of Capital Gallery contributed approximately $ 2.9 million and $ 6.3 million of net income to the Company for the period from April 1, 2020 through June 24, 2020 and the period from January 1, 2020 through June 24, 2020, respectively, and contributed approximately $ 3.5 million and $ 7.0 million of net income to the Company for the three and six months ended June 30, 2019, respectively.

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The sold portion of Capital Gallery contributed approximately $ 6.3 million of net income to the Company for the period from January 1, 2020 through June 24, 2020 and

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contributed approximately $ 4.0 million and $ 11.5 million of net income to the Company for the three and nine months ended September 30, 2019, respectively.

The Company must make estimates as to the collectability of its accrued rent and accounts receivable related to lease revenue.

Management analyzes accrued rent and accounts receivable by considering tenant creditworthiness, current economic trends, including the impact of COVID-19 on tenants’ businesses, and changes in tenants’ payment patterns when evaluating the collectability of the tenant’s receivable balance, including the accrued rent receivable, on a lease-by-lease basis.

As a result of this analysis, during the three and six months ended June 30, 2020, the Company wrote off approximately $ 35.9 million and $ 37.4 million, respectively, related to accrued rent balances and approximately $ 18.0 million and $ 18.9 million, respectively, related to accounts receivable balances.

As a result of this analysis, during the three and nine months ended September 30, 2020, the Company wrote off approximately $ 4.1 million and $ 41.5 million, respectively, related to accrued rent balances and approximately $ 3.4 million and $ 22.3 million, respectively, related to accounts receivable balances.

The write-offs were for tenants, primarily in the retail sector, that either terminated their leases or that the Company considered their accrued rent and/or accounts receivable balances no longer probable of collection.

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The Company did not utilize the guidance provided in the Lease Modification Q & A and instead elected to continue to account for the COVID-19 lease concessions on a lease-by-lease basis in accordance with the existing lease modification accounting framework.

The following table summarizes the components of lease revenue recognized during the three and six months ended June 30, 2020 and 2019 included within the Company's Consolidated Statements of Operations (in thousands):

Three months ended June 30, Six months ended June 30,

The following table summarizes the components of lease revenue recognized during the three and nine months ended September 30, 2020 and 2019 included within the Company's Consolidated Statements of Operations (in thousands):

Three months ended September 30, Nine months ended September 30,

Lease Revenue 2020 2019 2020 2019

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$ 666,674 $ 692,225 $ 2,006,904 $ 2,051,665

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Investments in Unconsolidated Joint Ventures

The investments in unconsolidated joint ventures consist of the following at June 30, 2020 and December 31, 2019:

The investments in unconsolidated joint ventures consist of the following at September 30, 2020 and December 31, 2019:

Carrying Value of Investment (1)

Entity Properties Nominal %

Ownership June 30,

Ownership September 30,

2020 December 31,

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BNY Tower Holdings LLC Dock 72 50.0 % 98,844 94,804

BNYTA Amenity Operator LLC Dock 72 50.0 % — —

BNYTA Amenity Operator LLC Dock 72 50.0 % 236 N/A

CA-Colorado Center Limited Partnership

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Gateway Portfolio Holdings LLC Gateway Commons 50.0 % (8) 339,383 N/A

Rosecrans-Sepulveda Partners 4, LLC Beach Cities Media Center 50.0 % 27,180 N/A

$ 1,347,835 $ 933,223

_______________

(1) Investments with deficit balances aggregating approximately $ 29.1 million and $ 22.4 million at June 30, 2020 and December 31, 2019, respectively, are included within Other Liabilities in the Company’s Consolidated Balance Sheets.

(1) Investments with deficit balances aggregating approximately $ 29.5 million and $ 22.4 million at September 30, 2020 and December 31, 2019, 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 June 30, 2020 and December 31, 2019, the Company’s economic ownership was approximately 50 %.

At September 30, 2020 and December 31, 2019, the Company’s economic ownership was approximately 50 %.

(3) The Company’s wholly-owned subsidiary that owns Wisconsin Place Office also owns a 33.3 % interest in the joint venture entity that owns the land, parking garage and infrastructure of the project.

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(5) T he property was sold on June 27, 2019.

As of June 30, 2020 and December 31, 2019, the investment is comprised of undistributed cash.

As of September 30, 2020 and December 31, 2019, the investment included only undistributed cash.

(6) 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 above 520,000 square feet and achieving certain project returns at stabilization.

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

(8) As a result of the partner’s deferred contribution, the Company owns an approximately 55 % interest in the joint venture at June 30, 2020.

(8) As a result of the partner’s deferred contribution, the Company owns an approximately 55 % interest in the joint venture at September 30, 2020.

Future development projects will be owned 49 % by the Company and 51 % by its partner.

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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.

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

September 30,

2020 December 31,

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_______________

(1) At June 30, 2020 and December 31, 2019, this amount includes right of use assets - finance leases totaling approximately $ 248.9 million and $ 383.9 million, respectively, and right of use assets - operating leases totaling approximately $ 11.7 million and $ 12.1 million, respectively.

(2) At June 30, 2020 and December 31, 2019, this amount includes lease liabilities - finance leases totaling approximately $ 390.2 million and $ 510.8 million, respectively, and lease liabilities - operating leases totaling approximately $ 17.4 million and $ 17.3 million, respectively.

(1) At September 30, 2020 and December 31, 2019, this amount included right of use assets - finance leases totaling approximately $ 248.9 million and $ 383.9 million, respectively, and right of use assets - operating leases totaling approximately $ 11.5 million and $ 12.1 million, respectively.

(2) At September 30, 2020 and December 31, 2019, this amount included lease liabilities - finance leases totaling approximately $ 389.4 million and $ 510.8 million, respectively, and lease liabilities - operating leases totaling approximately $ 17.5 million and $ 17.3 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.

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In addition, certain acquisition, transaction and other costs may not be reflected in the net assets at the joint venture level.

At June 30, 2020 and December 31, 2019, there was an aggregate basis differential of approximately $ 309.0 million and $ 311.3 million, respectively, between the carrying value of the Company’s investment in the joint venture that owns Colorado Center and the joint venture’s basis in the assets and liabilities.

At June 30, 2020, there was an aggregate basis differential of approximately $ 54.4 million between the carrying value of the Company’s investment in the joint venture that owns Gateway Commons and the joint venture’s basis in the assets and liabilities.

At September 30, 2020 and December 31, 2019, there was an aggregate basis differential of approximately $ 308.0 million and $ 311.3 million, respectively, between the carrying value of the Company’s investment in the joint venture that owns Colorado Center and the joint venture’s basis in the assets and liabilities.

At September 30, 2020, there was an aggregate basis differential of approximately $ 53.1 million between the carrying value of the Company’s investment in the joint venture that owns Gateway Commons and the joint venture’s basis in the assets and liabilities.

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 $ 29.1 million and $ 22.4 million at June 30, 2020 and December 31, 2019, respectively, are reflected within Other Liabilities in the Company’s Consolidated Balance Sheets.

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(4) Investments with deficit balances aggregating approximately $ 29.5 million and $ 22.4 million at September 30, 2020 and December 31, 2019, 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 June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2019 2020 2019

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_______________

(1) Includes straight-line rent adjustments of approximately $ 8.5 million and $ 7.6 million for the three months ended June 30, 2020 and 2019, respectively, and $ 18.2 million and $ 13.4 million for the six months ended June 30, 2020 and 2019, respectively.

(2) Includes straight-line rent adjustments of approximately $ 0.4 million and $ 0.5 million for the three months ended June 30, 2020 and 2019, respectively, and $ 0.9 million and $ 1.1 million for the six months ended June 30, 2020 and 2019, respectively.

Also includes net above-/below-market rent adjustments of approximately $ 0.2 million and $ 0.4 million for the three months ended June 30, 2020 and 2019, respectively, and $ 0.5 million and $ 0.8 million for the six months ended June 30, 2020 and 2019, respectively.

(1) Includes straight-line rent adjustments of approximately $ 3.8 million and $ 5.3 million for the three months ended September 30, 2020 and 2019, respectively, and $ 22.0 million and $ 18.7 million for the nine months ended September 30, 2020 and 2019, respectively.

(2) Includes straight-line rent adjustments of approximately $ 0.4 million and $ 0.5 million for the three months ended September 30, 2020 and 2019, respectively, and $ 1.3 million and $ 1.6 million for the nine months ended September 30, 2020 and 2019, respectively.

Also includes net above-/below-market rent adjustments of approximately $ 0.2 million and $ 0.4 million for the three months ended September 30, 2020 and 2019, respectively, and $ 0.7 million and $ 1.3 million for the nine months ended September 30, 2020 and 2019, respectively.

On January 28, 2020, the Company entered into a joint venture with a third party to own, operate and develop properties at its Gateway Commons complex located in South San Francisco, California.

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The first phase of the Platform 16 development project consists of an approximately 390,000 net rentable square foot Class A office building and a below-grade parking garage.

The joint venture will pause construction activities after completing site preparation work and intends to revisit its plans once the economic impact of COVID-19 becomes clearer or economic conditions improve.

During the third quarter of 2020, the joint venture paused construction activities after completing site preparation work and intends to revisit its plans once the economic impact of COVID-19 becomes clearer or economic conditions improve.

On February 20, 2020, the joint venture acquired the land underlying the ground lease for a purchase price totaling approximately $ 134.8 million.

The joint venture had previously made a deposit totaling $ 15.0 million, which deposit was credited against the purchase price.

The joint venture had previously made a deposit totaling $ 15.0 million, which was credited against the purchase price.

On June 9, 2020, a joint venture in which the Company has a 20 % interest refinanced with a new lender the mortgage loan collateralized by its Metropolitan Square property located in Washington, DC.

The outstanding balance of the loan totaled approximately $ 155.9 million, bore interest at a fixed rate of 5.75 % per annum and was scheduled to mature on August 5, 2020.

The new mortgage loan totaling $ 325.0 million, of which $ 288.0 million was advanced at closing, bears interest at a variable rate equal to LIBOR plus 4.75 % per annum and matures on

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July 7, 2022, with two , one -year extension options, subject to certain conditions.

The joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to increases in the LIBOR portion of interest costs to 3.00 % per annum on a notional amount of $ 325.0 million through July 7, 2022.

The new mortgage loan totaling $ 325.0 million, of which $ 288.0 million

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was advanced at closing, bears interest at a variable rate equal to (1) the greater of (x) LIBOR or (y) 0.65% , plus (2) 4.75 % per annum, and matures on July 7, 2022, with two , one -year extension options, subject to certain conditions.

The joint venture entered into an interest rate cap agreement with a financial institution to limit its exposure to increases in the LIBOR rate 3.00 % per annum on a notional amount of $ 325.0 million through July 7, 2022.

The joint venture distributed excess loan proceeds from the new mortgage loan totaling approximately $ 112.7 million, of which the Company’s share totaled approximately $ 22.5 million.

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Net cash proceeds totaled approximately $ 45.8 million after the payment of transaction costs.

The Company recognized a gain on sale of real estate totaling approximately $ 5.8 million, which is included in Income from Unconsolidated Joint Ventures in the accompanying Consolidated Statements of Operations.

The Company recognized a gain on sale of real estate totaling approximately $ 5.8 million, which is included in Income (Loss) from Unconsolidated Joint Ventures in the accompanying Consolidated Statements of Operations.

The joint venture distributed approximately $ 36.8 million of available cash and the net proceeds from the sale after the pay down of the mortgage loan, of which the Company’s share totaled approximately $ 18.4 million.

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Annapolis Junction Building Seven is a Class A office property with approximately 127,000 net rentable square feet located in Annapolis, Maryland.

On July 23, 2020, the Company acquired a 50 % interest in a joint venture entity that owns Beach Cities Media Center, a 6.4 -acre parcel of land located in El Segundo, California, for a purchase price of approximately $ 21.2 million.

Beach Cities Media Center is expected to support the development of approximately 275,000 square feet of Class A office space.

On July 24, 2020, a joint venture in which the Company has a 50 % interest completed and fully placed in-service Hub50House, an approximately 320,000 square foot project comprised of 440 residential units located in Boston, Massachusetts.

On September 1, 2020, the Company entered into an agreement with its partner in the joint venture that owns 1265 Main Street located in Waltham, Massachusetts to (1) form additional joint ventures to own and develop a mixed-use property containing approximately 1,200,000 square feet to be developed in phases on an approximately 41 -acre site adjacent to 1265 Main Street and (2) share the costs of certain offsite infrastructure improvements with its joint venture partner and other third-party abutting land owners.

The Company will serve as the development manager and expects to own a 50 % interest in each of the joint ventures.

On September 30, 2020, a joint venture in which the Company has a 50 % interest extended the mortgage loan collateralized by its Market Square North property.

At the time of the extension, the outstanding balance of the loan totaled approximately $ 114.2 million, bore interest at a fixed rate of 4.85 % per annum and was scheduled to mature on October 1, 2020.

The extended loan matures on November 1, 2020 (See Note 13).

Market Square North is a Class A office property with approximately 418,000 net rentable square feet located in Washington, DC.

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Unsecured Senior Notes

The following summarizes the unsecured senior notes outstanding as of June 30, 2020 (dollars in thousands):

The following summarizes the unsecured senior notes outstanding as of September 30, 2020 (dollars in thousands):

Stated Rate Effective

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

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On May 5, 2020, Boston Properties Limited Partnership completed a public offering of $ 1.25 billion in aggregate principal amount of its 3.250 % unsecured senior notes due 2031.

3 unchanged sentences

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

At June 30, 2020, Boston Properties Limited Partnership was in compliance with each of these financial restrictions and requirements.

At September 30, 2020, Boston Properties Limited Partnership was in compliance with each of these financial restrictions and requirements.

Commitments and Contingencies

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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.

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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.

2 unchanged sentences

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 June 30, 2020, the maximum funding obligation under the guarantee was approximately $ 48.9 million.

As of September 30, 2020, the maximum funding obligation under the guarantee was approximately $ 37.2 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 June 30, 2020, no amounts related to the guarantee are recorded as liabilities in the Company’s consolidated financial statements.

As of September 30, 2020, no amounts related to the guarantee are recorded as liabilities in the Company’s consolidated financial statements.

Pursuant to the lease agreement with Marriott, the Company has guaranteed the completion of the office building and parking garage on behalf of its 7750 Wisconsin Avenue joint venture and has also provided a financing guaranty as required with respect to the third-party construction financing.

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An affiliate of The Bernstein Companies exercised its option to borrow $ 10.0 million from the Company under such agreements, which financing was provided by the Company on June 1, 2020.

The financing

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bears interest at a fixed rate of 8.00 % per annum, compounded monthly, and matures on the fifth anniversary of the date on which the base building of the affiliate of The Bernstein Companies’ hotel property is substantially completed.

The financing bears interest at a fixed rate of 8.00 % per annum, compounded monthly, and matures on the fifth anniversary of the date on which the base building of the affiliate of The Bernstein Companies’ hotel property is substantially completed.

The financing is collateralized by a pledge of the partner’s equity interest in the joint venture that owns and is developing 7750 Wisconsin Avenue .

To secure such financing arrangements, affiliates of The Bernstein Companies are required to provide certain security, which varies depending on the specific loan, by pledges of their equity interest in the office property, a fee mortgage on the hotel property, or both.

As of June 30, 2020, no amounts related to the contingent aspect of any of the guarantees are recorded as liabilities in the Company’s consolidated financial statements.

As of September 30, 2020, no amounts related to the contingent aspect of any of the guarantees are recorded as liabilities in the Company’s consolidated financial statements.

In connection with the sale and development of the Company’s 6595 Springfield Center Drive development project, the Company has guaranteed the completion of the project and the payment of certain cost overruns in accordance with the development management agreement with the buyer.

3 unchanged sentences

An affiliate of the buyer has provided a guaranty of the obligations of the buyer to fund such construction costs and the buyer has agreed to use commercially reasonable efforts to require the construction lender to provide certain remedies to the Company in the event the buyer does not fund such construction obligations.

As of June 30, 2020, no amounts related to the contingent aspect of the guarantee are recorded as a liability in the Company’s consolidated financial statements.

As of September 30, 2020, no amounts related to the contingent aspect of the guarantee are recorded as a liability in the Company’s consolidated financial statements.

In connection with the redevelopment of the Company’s 325 Main Street property located in Cambridge, Massachusetts, the Company is required, pursuant to the local zoning ordinance, 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, which is expected to occur during the third quarter of 2022.

325 Main Street consisted of an approximately 115,000 net rentable square foot Class A office property that was demolished and is being developed into an approximately 420,000 net rentable square foot Class A office property, including approximately 41,000 net rentable square feet of retail space.

325 Main Street consisted of an

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approximately 115,000 net rentable square foot Class A office property that was demolished and is being developed into an approximately 420,000 net rentable square foot Class A office property, including approximately 41,000 net rentable square feet of retail space.

In 2009, the Company filed a general unsecured creditor’s claim against Lehman Brothers, Inc.

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Given the inherent uncertainties in bankruptcy proceedings, there can be no assurance as to the timing or amount of additional proceeds, if any, that the Company may ultimately realize on the remaining claim, whether by sale to a third party or by one or more distributions from the trustee.

Accordingly, the Company has not recorded any estimated recoveries associated with this gain contingency within its Consolidated Financial Statements at June 30, 2020.

Accordingly, the Company has not recorded any estimated recoveries associated with this gain contingency within its Consolidated Financial Statements at September 30, 2020.

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”).

4 unchanged sentences

The per occurrence limit for NBCR Coverage is $ 1.0 billion.

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$ 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.

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.

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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.

Therefore, insurance coverage provided by IXP should not be

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considered as the equivalent of third-party insurance, but rather as a modified form of self-insurance.

In addition, Boston Properties Limited Partnership has issued a guarantee to cover liabilities of IXP in the amount of $ 20.0 million.

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and interests in consolidated property partnerships not wholly-owned by the Company.

As of June 30, 2020, the noncontrolling interests in Boston Properties Limited Partnership consisted of 16,123,912 OP Units, 1,345,723 LTIP Units (including 105,080 2012 OPP Units, 64,468 2013 MYLTIP Units, 23,100 2014 MYLTIP Units, 24,966 2015 MYLTIP Units, 89,791 2016 MYLTIP Units and 116,078 2017 MYLTIP Units), 336,195 2018 MYLTIP Units, 220,325 2019 MYLTIP Units and 203,278 2020 MYLTIP Units held by parties other than Boston Properties, Inc.

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As of September 30, 2020, the noncontrolling interests in Boston Properties Limited Partnership consisted of 16,120,074 OP Units, 1,338,400 LTIP Units (including 105,080 2012 OPP Units, 64,468 2013 MYLTIP Units, 23,100 2014 MYLTIP Units, 24,966 2015 MYLTIP Units, 89,791 2016 MYLTIP Units and 116,078 2017 MYLTIP Units), 336,195 2018 MYLTIP Units, 219,916 2019 MYLTIP Units and 203,278 2020 MYLTIP Units held by parties other than Boston Properties, Inc.

Noncontrolling Interest—Common Units

During the six months ended June 30, 2020, 764,640 OP Units were presented by the holders for redemption (including 82,551 O P Units issued upon conversion of LTIP Units, 2012 OPP Units and 2013 - 2017 MYLTIP Units) and were redeemed by Boston Properties, Inc.

During the nine months ended September 30, 2020, 773,858 OP Units were presented by the holders for redemption (including 82,608 OP Units issued upon conversion of LTIP Units, 2012 OPP Units and 2013 - 2017 MYLTIP Units) and were redeemed by Boston Properties, Inc.

in exchange for an equal number of shares of Common Stock.

At June 30, 2020, Boston Properties Limited Partnership had outstanding 336,195 2018 MYLTIP Units, 220,325 2019 MYLTIP Units and 203,278 2020 MYLTIP Units.

At September 30, 2020, Boston Properties Limited Partnership had outstanding 336,195 2018 MYLTIP Units, 219,916 2019 MYLTIP Units and 203,278 2020 MYLTIP Units.

Prior to the applicable measurement date (February 5, 2021 for 2018 MYLTIP Units, February 4, 2022 for 2019 MYLTIP Units and February 3, 2023 for 2020 MYLTIP Units), holders of MYLTIP Units will be 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.

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As a result, an aggregate of 270,942 2017 MYLTIP Units that had been previously granted were automatically forfeited.

The following table presents Boston Properties Limited Partnership’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units, 2013 - 2016 MYLTIP Units and, after the February 6, 2020 measurement date, the 2017 MYLTIP Units) and its distributions on the 2017 MYLTIP Units (prior to the February 6, 2020 measurement date), 2018 MYLTIP Units, 2019 MYLTIP Units and 2020 MYLTIP Units (after the February 4, 2020 issuance date) that occurred during the six months ended June 30, 2020:

The following table presents Boston Properties Limited Partnership’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units, 2013 - 2016 MYLTIP Units and, after the February 6, 2020 measurement date, the 2017 MYLTIP Units) and its distributions on the 2017 MYLTIP Units (prior to the February 6, 2020 measurement date) and 2018 - 2020 MYLTIP Units (after the February 4, 2020 issuance date) that occurred during the nine months ended September 30, 2020:

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

September 30, 2020 October 30, 2020 $ 0.98 $ 0.098

June 30, 2020 July 31, 2020 $ 0.98 $ 0.098

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December 31, 2019 January 30, 2020 $ 0.98 $ 0.098

The following table presents Boston Properties Limited Partnership’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units, 2013 - 2015 MYLTIP Units and, after the February 9, 2019 measurement date, the 2016 MYLTIP Units) and its distributions on the 2016 MYLTIP Units (prior to the February 9, 2019 measurement date), 2017 MYLTIP Units, 2018 MYLTIP Units and 2019 MYLTIP Units (after the February 5, 2019 issuance date) that occurred during the six months ended June 30, 2019:

The following table presents Boston Properties Limited Partnership’s distributions on the OP Units and LTIP Units (including the 2012 OPP Units, 2013 - 2015 MYLTIP Units and, after the February 9, 2019 measurement date, the 2016 MYLTIP Units) and its distributions on the 2016 MYLTIP Units (prior to the February 9, 2019 measurement date) and 2017 - 2019 MYLTIP Units (after the February 5, 2019 issuance date) that occurred during the nine months ended September 30, 2019:

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

September 30, 2019 October 31, 2019 $ 0.95 $ 0.095

June 28, 2019 July 31, 2019 $ 0.95 $ 0.095

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The value of the OP Units (not owned by Boston Properties, Inc.

and LTIP Units (including the 2012 OPP Units, 2013 - 2017 MYLTIP Units) assuming that all conditions had been met for the conversion thereof) had all of such units been redeemed at June 30, 2020 was approximately $ 1.6 billion based on the last reported price of a share of Common Stock on the New York Stock Exchange of $ 90.38 per share on June 30, 2020.

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and LTIP Units (including the 2012 OPP Units and 2013 - 2017 MYLTIP Units) assuming that all conditions had been met for the conversion thereof) had all of such units been redeemed at September 30, 2020 was approximately $ 1.4 billion based on the last reported price of a share of Common Stock on the New York Stock Exchange of $ 80.30 per share on September 30, 2020.

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 $ 1.7 billion at June 30, 2020 and December 31, 2019, are included in Noncontrolling Interests—Property Partnerships on the accompanying Consolidated Balance Sheets.

The equity interests in these ventures that are not owned by the Company, totaling approximately $ 1.7 billion at September 30, 2020 and December 31, 2019, are included in Noncontrolling Interests—Property Partnerships on the accompanying Consolidated Balance Sheets.

Stockholders’ Equity / Partners’ Capital

Boston Properties, Inc.

As of June 30, 2020, Boston Properties, Inc.

As of September 30, 2020, Boston Properties, Inc.

had 155,636,300 shares of Common Stock outstanding.

As of June 30, 2020, Boston Properties, Inc.

As of September 30, 2020, Boston Properties, Inc.

owned 1,730,948 general partnership units and 153,905,352 limited partnership units in Boston Properties Limited Partnership.

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No shares of Common Stock have been issued under this ATM stock offering program.

During the six months ended June 30, 2020, Boston Properties, Inc.

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During the nine months ended September 30, 2020, Boston Properties, Inc.

issued 43,792 shares of Common Stock upon the exercise of options to purchase Common Stock.

During the six months ended June 30, 2020, Boston Properties, Inc.

During the nine months ended September 30, 2020, Boston Properties, Inc.

issued 773,858 shares of Common Stock in connection with the redemption of an equal number of redeemable OP Units from limited partners.

The following table presents Boston Properties, Inc.’s dividends per share and Boston Properties Limited Partnership’s distributions per OP Unit and LTIP Unit paid or declared in 2020 and during the six months ended June 30, 2019:

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

September 30, 2020 October 30, 2020 $ 0.98 $ 0.98

June 30, 2020 July 31, 2020 $ 0.98 $ 0.98

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December 31, 2019 January 30, 2020 $ 0.98 $ 0.98

September 30, 2019 October 31, 2019 $ 0.95 $ 0.95

June 28, 2019 July 31, 2019 $ 0.95 $ 0.95

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Preferred Stock

As of June 30, 2020, Boston Properties, Inc.

As of September 30, 2020, Boston Properties, Inc.

had 80,000 shares ( 8,000,000 depositary shares each representing 1/100th of a share) outstanding of its 5.25 % Series B Cumulative Redeemable Preferred Stock with a liquidation preference of $ 2,500.00 per share ($ 25.00 per depositary share).

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or its affiliates.

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The following table presents Boston Properties Inc.’s dividends per share on its outstanding Series B Preferred Stock paid or declared during 2020 and during the six months ended June 30, 2019:

The following table presents Boston Properties, Inc.’s dividends per share on its outstanding Series B Preferred Stock paid or declared during 2020 and during the nine months ended September 30, 2019:

Record Date Payment Date Dividend (Per Share)

November 4, 2020 November 16, 2020 $ 32.8125

August 3, 2020 August 17, 2020 $ 32.8125

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February 4, 2020 February 18, 2020 $ 32.8125

November 1, 2019 November 15, 2019 $ 32.8125

August 2, 2019 August 15, 2019 $ 32.8125

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February 4, 2019 February 15, 2019 $ 32.8125

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Earnings Per Share / Common Unit

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Because the 2012 OPP Units and 2013 - 2017 MYLTIP Units required, and the 2018 - 2020 MYLTIP Units require, Boston Properties, Inc.

to outperform absolute and relative return thresholds, unless such thresholds have been met by the end of the applicable reporting period, Boston Properties, Inc.

to outperform absolute and/or relative return thresholds, unless such thresholds have been met by the end of the applicable reporting period, Boston Properties, Inc.

excludes such units from the diluted EPS calculation.

Other potentially dilutive common shares, including stock options, restricted stock and other securities of Boston Properties Limited Partnership that are exchangeable for Boston Properties, Inc.’s Common Stock, and the related impact on earnings, are considered when calculating diluted EPS.

Three months ended June 30, 2020

Three months ended September 30, 2020

(Numerator) Shares

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$ 89,854 155,645 $ 0.58

Allocation of undistributed earnings to participating securities

( 336 ) — ( 0.01 )

Net income attributable to Boston Properties, Inc.

common shareholders

$ 266,189 155,386 $ 1.71

Effect of Dilutive Securities:

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$ 89,854 155,670 $ 0.58

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Three months ended June 30, 2019

Three months ended September 30, 2019

(Numerator) Shares

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$ 107,771 154,577 $ 0.70

Allocation of undistributed earnings to participating securities

Net income attributable to Boston Properties, Inc.

common shareholders

$ 164,270 154,555 $ 1.06

Effect of Dilutive Securities:

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$ 107,771 154,820 $ 0.70

Six months ended June 30, 2020

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Nine months ended September 30, 2020

(Numerator) Shares

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Stock Based Compensation

— 134 ( 0.01 )

Diluted Earnings:

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$ 853,391 155,447 $ 5.49

Six months ended June 30, 2019

Nine months ended September 30, 2019

(Numerator) Shares

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$ 370,200 154,847 $ 2.39

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Boston Properties Limited Partnership

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Because the 2012 OPP Units and 2013 - 2017 MYLTIP Units required, and the 2018 - 2020 MYLTIP Units require, Boston Properties, Inc.

to outperform absolute and relative return thresholds, unless such thresholds have been met by the end of the applicable reporting period, Boston Properties Limited Partnership excludes such units from the diluted earnings per common unit calculation.

to outperform absolute and/or relative return thresholds, unless such thresholds have been met by the end of the applicable reporting period, Boston Properties Limited Partnership 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 17,273,000 and 17,647,000 redeemable common units for the three months ended June 30, 2020 and 2019, respectively, and 17,405,000 and 17,627,000 redeemable common units for the six months ended June 30, 2020 and 2019, respectively.

Three months ended June 30, 2020

Included in the number of units (the denominator) below are approximately 17,032,000 and 17,638,000 redeemable common units for the three months ended September 30, 2020 and 2019, respectively, and 17,279,000 and 17,630,000 redeemable common units for the nine months ended September 30, 2020 and 2019, respectively.

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Three months ended September 30, 2020

(Numerator) Units

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$ 101,624 172,677 $ 0.59

Allocation of undistributed earnings to participating securities

Net income attributable to Boston Properties Limited Partnership common unitholders

$ 301,601 172,659 $ 1.75

Effect of Dilutive Securities:

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$ 101,624 172,702 $ 0.59

Three months ended June 30, 2019

Three months ended September 30, 2019

(Numerator) Units

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$ 122,117 172,215 $ 0.71

Allocation of undistributed earnings to participating securities

Net income attributable to Boston Properties Limited Partnership common unitholders

$ 185,661 172,202 $ 1.08

Effect of Dilutive Securities:

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$ 122,117 172,458 $ 0.71

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Six months ended June 30, 2020

Nine months ended September 30, 2020

(Numerator) Units

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$ 968,654 172,726 $ 5.61

Six months ended June 30, 2019

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Nine months ended September 30, 2019

(Numerator) Units

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As a result, an aggregate of 270,942 2017 MYLTIP Units that had been previously granted were automatically forfeited.

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During the six months ended June 30, 2020, Boston Properties, Inc.

During the nine months ended September 30, 2020, Boston Properties, Inc.

issued 29,630 shares of restricted common stock and Boston Properties Limited Partnership issued 207,181 LTIP Units and 203,278 2020 MYLTIP Units to employees and non-employee directors under the 2012 Plan.

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Such value is recognized as an expense ratably over the corresponding employee service period.

The shares of restricted common stock granted during the six months ended June 30, 2020 were valued at approximately $ 4.0 million ($ 133.81 per share weighted-average).

The shares of restricted common stock granted during the nine months ended September 30, 2020 were valued at approximately $ 4.0 million ($ 133.81 per share weighted-average).

The LTIP Units granted were valued at approximately $ 26.3 million (approximately $ 127.14 per unit weighted-average fair value) using a Monte Carlo simulation method model.

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Because the 2012 OPP Units and 2013 - 2020 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.

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

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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 2016 - 2020 MYLTIP Units was approximately $ 10.1 million and $ 10.1 million for the three months ended June 30, 2020 and 2019, respectively, and $ 27.3 million and $ 24.9 million for the six months ended June 30, 2020 and 2019, respectively.

At June 30, 2020, there was (1) an aggregate of approximately $ 37.1 million of unrecognized compensation expense related to unvested restricted stock, LTIP Units and 2017 MYLTIP Units and (2) an aggregate of approximately $ 15.3 million of unrecognized compensation expense related to unvested 2018 - 2020 MYLTIP Units that is expected to be recognized over a weighted-average period of approximately 2.4 years.

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Aggregate stock-based compensation expense associated with restricted stock, LTIP Units and 2016 - 2020 MYLTIP Units was approximately $ 8.0 million and $ 7.5 million for the three months ended September 30, 2020 and 2019, respectively, and $ 35.3 million and $ 32.4 million for the nine months ended September 30, 2020 and 2019, respectively.

At September 30, 2020, there was (1) an aggregate of approximately $ 31.3 million of unrecognized compensation expense related to unvested restricted stock, LTIP Units and 2017 MYLTIP Units and (2) an aggregate of approximately $ 12.8 million of unrecognized compensation expense related to unvested 2018 - 2020 MYLTIP Units that is expected to be recognized over a weighted-average period of approximately 2.3 years.

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 six months ended June 30, 2020 and 2019.

Boston Properties, Inc.

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2019 2020 2019

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Interest expense 110,993 106,471 319,726 309,837

Loss from early extinguishment of debt — 28,010 — 28,010

Impairment loss — — — 24,038

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42,160 46,249 122,248 138,896

Gains (losses) from investments in securities 4,552 1,165 ( 893 ) 4,134

Gains from investments in securities 1,858 106 965 4,240

Interest and other income (loss) ( 45 ) 7,178 4,277 14,546

Gains on sales of real estate 203,767 1,686 613,932 781

Income from unconsolidated joint ventures 1,832 47,964 1,463 48,177

Gains (losses) on sales of real estate ( 209 ) ( 15 ) 613,723 766

Income (loss) from unconsolidated joint ventures ( 6,873 ) ( 649 ) ( 5,410 ) 47,528

Direct reimbursements of payroll and related costs from management services contracts

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Company’s share of Net Operating Income $ 404,444 $ 433,291 $ 1,255,082 $ 1,292,724

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Boston Properties Limited Partnership

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2020 2019 2020 2019

5 unchanged sentences

Interest expense 110,993 106,471 319,726 309,837

Loss from early extinguishment of debt — 28,010 — 28,010

Impairment loss — — — 22,272

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42,160 46,249 122,248 138,896

Gains (losses) from investments in securities 4,552 1,165 ( 893 ) 4,134

Gains from investments in securities 1,858 106 965 4,240

Interest and other income (loss) ( 45 ) 7,178 4,277 14,546

Gains on sales of real estate 207,241 1,835 626,895 930

Income from unconsolidated joint ventures 1,832 47,964 1,463 48,177

Gains (losses) on sales of real estate ( 209 ) ( 15 ) 626,686 915

Income (loss) from unconsolidated joint ventures ( 6,873 ) ( 649 ) ( 5,410 ) 47,528

Direct reimbursements of payroll and related costs from management services contracts

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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 dividends/distributions, net income attributable to noncontrolling interests, interest expense, impairment loss, 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, interest and other income (loss), gains on sales of real estate, income from unconsolidated joint ventures, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue.

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 dividends/distributions, net income attributable to noncontrolling interests, interest expense, loss from early extinguishment of debt, impairment loss, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts and corporate general and administrative expense less (2) gains from investments in securities, interest and other income (loss), gains (losses) 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.

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NOI presented by the Company may not be comparable to NOI reported by other REITs or real estate companies that define NOI differently.

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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), minus 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).

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Therefore, depreciation and amortization expense is not allocated among segments.

Preferred dividends/distributions, interest expense, impairment loss, 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, 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.

Preferred dividends/distributions, interest expense, loss from early extinguishment of debt, impairment loss, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts, corporate general and administrative expense, gains from investments in securities, interest and other income (loss), gains (losses) 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.

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Upon the adoption of ASC 842, any write-off for bad debt, including accrued rent, will be recorded as a reduction to lease revenue.

As a result of COVID-19, during the three and six months ended June 30, 2020, the Company wrote off approximately $ 35.9 million and $ 37.4 million, respectively, related to accrued rent balances and approximately $ 18.0 million and $ 18.9 million, respectively, related to accounts receivable balances.

As a result of COVID-19, during the three and nine months ended September 30, 2020, the Company wrote off approximately $ 4.1 million and $ 41.5 million, respectively, related to accrued rent balances and approximately $ 3.4 million and $ 22.3 million, respectively, related to accounts receivable balances.

In addition, parking and other revenue for the three and six months ended June 30, 2020 decreased by approximately $ 12.4 million and $ 12.8 million, respectively, compared to 2019.

In addition, parking and other revenue for the three and nine months ended September 30, 2020 decreased by approximately $ 9.3 million and $ 22.0 million, respectively, compared to 2019.

These decreases were primarily in transient and monthly parking revenue.

The degree to which the Company’s commercial and retail tenants’ and parking operators’ businesses are, or will continue to be, negatively impacted by COVID-19, including by measures intended to reduce its spread, such as mandatory business closures and “stay-at-home” orders, could result in a reduction in the Company’s cash flows or require that the Company write off additional accrued rent and/or accounts receivable balances, and this could have a material adverse effect on lease revenue and thus the results of the Company’s Office property type.

The Boston Marriott Cambridge closed in March 2020 and did not re-open during the second quarter.

The Company is uncertain as to when the hotel will re-open.

The hotel is operating at a monthly deficit and its continued closure has had, and will continue to have, a material adverse impact on the hotel’s operations and thus the results of the Company’s Hotel property type.

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The Boston Marriott Cambridge closed in March 2020 due to COVID-19 and did not re-open until October 2, 2020.

The hotel is operating at a monthly deficit.

The closing of the hotel for more than two fiscal quarters, weak demand and low occupancy since its re-opening, have had, and are expected to continue to have, a material adverse effect on the hotel’s operations and thus the results of the Company’s Hotel property type.

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

For the three months ended June 30, 2020:

For the three months ended September 30, 2020:

Boston Los Angeles New York San Francisco Washington, DC Total

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(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 June 30, 2019:

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For the three months ended September 30, 2019:

Boston Los Angeles New York San Francisco Washington, DC Total

23 unchanged sentences

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For the six months ended June 30, 2020:

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For the nine months ended September 30, 2020:

Boston Los Angeles New York San Francisco Washington, DC Total

23 unchanged sentences

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For the six months ended June 30, 2019:

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For the nine months ended September 30, 2019:

Boston Los Angeles New York San Francisco Washington, DC Total

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Subsequent Events

Beach Cities Media Center is expected to support the development of approximately 275,000 square feet of Class A office space.

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On October 1, 2020, a joint venture in which the Company has a 50 % interest completed and fully placed in-service Dock 72, a Class A office project with approximately 670,000 net rentable square feet located in Brooklyn, New York.

On October 30, 2020, a joint venture in which the Company has a 50 % interest refinanced the mortgage loan collateralized by its Market Square North property located in Washington, DC.

The outstanding balance of the loan totaled approximately $ 114.2 million, bore interest at a fixed rate of 4.85 % per annum and was scheduled to mature on November 1, 2020 (See Note 5).

The new mortgage loan totals $ 125.0 million, bears interest at a variable rate equal to (1) the greater of (x) LIBOR or (y) 0.50% , plus (2) 2.30 % per annum, and matures on November 10, 2025, with one , one -year extension option, subject to certain conditions.

On November 3, 2020, the Company signed an approximately 138,000 square-foot, 10 -year lease with a new tenant at 200 West Street in Waltham, Massachusetts .

The Company is currently redeveloping a portion of 200 West Street into lab space with expected completion in 2021.

With this lease, the property is 100 % leased.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements