Supplemental Information Page Highlights.. 1 Page Lease Expirations.. 13 Statement of Operations 2 Completed Development Properties.. 14 Statement of Funds from Operations 3 Balance Sheet. 4 Key Financial Data... 5 Portfolio Profile 6 Building Type by Region...... 7-9 Occupancy.. 10 Development Properties.. 15 Acquisition Properties.. 16 Disposition Properties.. 17 Debt and Preferred Unit Analysis.. 18 Debt Covenants.. 19 Same Store Comparison.. 20 New Lease Analysis - Quarterly Comparison 11 Unconsolidated Joint Ventures.. 21 Renewal Analysis - Quarterly Comparison 12 Reconciliation of Non-Gaap Financial Measures 22
Highlights Quarter Ended Funds from operations available to common shareholders - diluted (FFO) was $0.59 per share. Operating results include termination fees of $0.2 million. A reconciliation of net income to FFO can be found on page three. The Company brought into service one development property for a total investment of $12.4 million. This property, which contains 227,000 square feet of leasable space, was 100.0% occupied as of. The current yield on this investment is 8.8%. The Company began construction on three properties containing 1.0 million square feet of leasable space at a projected investment of $69.2 million. The estimated yield for the 5.9 million square feet of wholly owned and joint venture properties under development as of June 30, 2014 is 8.3%. The projected cost for these development properties is $482.9 million, and there are signed leases for 59.3% of this space as of. The Company acquired six operating properties for $53.2 million. These properties, which contain 790,000 square feet, are 100.0% leased and have a current yield of 7.5%. The Company sold three operating properties, which contained 603,000 square feet of leasable space for $32.3 million, into a joint venture in which the Company holds a 25% interest. These properties were 61% leased at the time of the sale. In addition, a joint venture in which the Company holds a 25% interest sold 52 acres of land for $10.1 million. Property level operating income for the same store properties (those properties owned as of January 1, 2013 and excluding properties sold through ) decreased by 2.3% on a cash basis and 0.6% on a straight line basis for the quarter ended compared to the quarter ended June 30, 2013. Agreements to develop, in a joint venture with Comcast Corporation, a $933 million office and hotel property in Philadelphia were executed. The project will include 1.334 million square feet of rentable office space and a 222-room Four Seasons Hotel. Construction began in the third quarter. The joint venture will be 20% owned by the Company and the Company's investment in the project is expected to be approximately $185 million. Matters other than historical facts set forth within this Supplemental Information are forward-looking statements within the meaning of the federal securities laws. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which could materially affect actual results, performance or achievements. These factors include, without limitation, the ability to enter into new leases or renew leases on favorable terms, the financial condition of tenants, the uncertainties of real estate development and acquisition activity, the costs and availability of financing, the effects of local economic and market conditions, regulatory changes and other risks and uncertainties detailed from time to time in the Company s filings with the Securities and Exchange Commission. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. 1
Statement of Operations (Unaudited and in thousands, except per share amounts) Quarter Ended Six months ended June 30, 2013 June 30, 2013 Operating Revenue Rental $ 139,377 $ 106,955 $ 278,311 $ 211,670 Operating expense reimbursement 53,582 44,069 112,263 86,480 Total operating revenue 192,959 151,024 390,574 298,150 Operating Expenses Rental property 31,928 26,684 70,489 51,913 Real estate taxes 25,716 18,906 50,217 36,863 General and administrative 14,973 16,455 33,334 36,248 Depreciation and amortization 57,872 37,527 114,606 74,748 Total operating expenses 130,489 99,572 268,646 199,772 Operating Income 62,470 51,452 121,928 98,378 Other Income/Expense Interest and other 3,117 5,352 5,570 9,732 Interest (38,470) (28,133) (77,677) (55,872) Total other income/expense (35,353) (22,781) (72,107) (46,140) Income before property dispositions, income taxes, noncontrolling interest and equity in earnings of unconsolidated joint ventures 27,117 28,671 49,821 52,238 Gain on property dispositions 1,896-1,896 - Income taxes (693) (660) (1,224) (1,151) Equity in earnings of unconsolidated joint ventures 1,546 1,566 5,705 3,323 Income from continuing operations 29,866 29,577 56,198 54,410 Discontinued operations (including net gains on property dispositions of $140 and $7,658 for the quarters ended and 2013, respectively and $46,256 and $49,364 for the six month periods ended and 2013, respectively) 241 13,666 48,015 63,489 Net Income 30,107 43,243 104,213 117,899 Noncontrolling interest - operating partnerships (821) (3,134) (2,674) (6,551) Noncontrolling interest - consolidated joint ventures (37) - (390) - Net Income available to common shareholders $ 29,249 $ 40,109 $ 101,149 $ 111,348 Net income $ 30,107 $ 43,243 $ 104,213 $ 117,899 Other comprehensive income (loss) - foreign currency translation 6,464 40 7,811 (4,812) Other comprehensive loss - change in net unrealized gain on derivative instruments (1,145) - (1,656) - Comprehensive income 35,426 43,283 110,368 113,087 Less: comprehensive income attributable to noncontrolling interest (983) (3,135) (3,209) (6,406) Comprehensive income attributable to common shareholders $ 34,443 $ 40,148 $ 107,159 $ 106,681 Basic income per common share Continuing operations $ 0.20 $ 0.22 $ 0.37 $ 0.42 Discontinued operations $ - $ 0.11 $ 0.32 $ 0.51 Total basic income per common share $ 0.20 $ 0.33 $ 0.69 $ 0.93 Diluted income per common share Continuing operations $ 0.20 $ 0.22 $ 0.37 $ 0.42 Discontinued operations $ - $ 0.11 $ 0.32 $ 0.51 Total diluted income per common share $ 0.20 $ 0.33 $ 0.69 $ 0.93 Weighted average shares Basic 147,012 120,081 146,749 119,416 Diluted 147,774 120,911 147,444 120,229 Amounts attributable to common shareholders Income from continuing operations $ 29,014 $ 26,848 $ 54,262 $ 49,751 Discontinued operations 235 13,261 46,887 61,597 Net income $ 29,249 $ 40,109 $ 101,149 $ 111,348 2
Statement of Funds From Operations (Unaudited and in thousands, except per share amounts) Quarter Ended Six months ended June 30, 2013 June 30, 2013 Per Per Per Per Weighted Weighted Weighted Weighted Average Average Average Average Dollars Share Dollars Share Dollars Share Dollars Share Reconciliation of net income to FFO - basic: Basic - income available to common shareholders $ 29,249 $ 0.20 $ 40,109 $ 0.33 $ 101,149 $ 0.69 $ 111,348 $ 0.93 Adjustments: Depreciation and amortization of unconsolidated joint ventures 3,341 3,301 6,632 6,698 Depreciation and amortization 57,509 44,804 113,616 89,776 Gain on property dispositions (2,085) (7,658) (47,611) (49,364) Noncontrolling interest share in addback for depreciation and amortization and gain on property dispositions (1,380) (1,199) (1,707) (1,399) Funds from operations available to common shareholders - basic $ 86,634 $ 0.59 $ 79,357 $ 0.66 $ 172,079 $ 1.17 $ 157,059 $ 1.32 Reconciliation of net income to FFO - diluted: Diluted - income available to common shareholders $ 29,249 $ 0.20 $ 40,109 $ 0.33 $ 101,149 $ 0.69 $ 111,348 $ 0.93 Adjustments: Depreciation and amortization of unconsolidated joint ventures 3,341 3,301 6,632 6,698 Depreciation and amortization 57,509 44,804 113,616 89,776 Gain on property dispositions (2,085) (7,658) (47,611) (49,364) Noncontrolling interest excluding preferred unit distributions 703 1,226 2,438 3,432 Funds from operations available to common shareholders - diluted $ 88,717 $ 0.59 $ 81,782 $ 0.66 $ 176,224 $ 1.17 $ 161,890 $ 1.31 Reconciliation of weighted average shares: Weighted average common shares - all basic calculations 147,012 120,081 146,749 119,416 Dilutive shares for long term compensation plans 762 830 695 813 Diluted shares for net income calculations 147,774 120,911 147,444 120,229 Weighted average common units 3,551 3,714 3,555 3,714 Diluted shares for Funds from operations calculations 151,325 124,625 150,999 123,943 The Company believes that the calculation of Funds from operations is helpful to investors and management as it is a measure of the Company s operating performance that excludes depreciation and amortization and gains and losses from property dispositions. As a result, year over year comparison of Funds from operations reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective not immediately apparent from net income. In addition, management believes that Funds from operations provides useful information to the investment community about the Company s financial performance when compared to other REITs since Funds from operations is generally recognized as the standard for reporting the operating performance of a REIT. Funds from operations available to common shareholders is defined by NAREIT as net income (computed in accordance with generally accepted accounting principles ( GAAP )), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Funds from operations available to common shareholders does not represent net income or cash flows from operations as defined by GAAP and does not necessarily indicate that cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the Company s operating performance or to cash flows as a measure of liquidity. Funds from operations available to common shareholders also does not represent cash flows generated from operating, investing or financing activities as defined by GAAP. 3
Balance Sheet (Unaudited and in thousands, except share and unit amounts) December 31, 2013 Assets Real estate: Land and land improvements $ 1,162,397 $ 1,139,455 Building and improvements 5,244,783 5,144,758 Less: accumulated depreciation (1,135,864) (1,057,680) Operating real estate 5,271,316 5,226,533 Development in progress 329,685 209,187 Land held for development 241,196 233,055 Net real estate 5,842,197 5,668,775 Cash and cash equivalents 228,678 163,414 Restricted cash 18,980 51,456 Accounts receivable 15,272 13,900 Deferred rent receivable 107,473 99,956 Deferred financing and leasing costs, net of accumulated amortization (2014, $158,313; 2013, $140,958) 221,121 226,607 Investments in and advances to unconsolidated joint ventures 203,876 179,655 Assets held for sale - 275,957 Prepaid expenses and other assets 94,142 95,840 Total assets $ 6,731,739 $ 6,775,560 Liabilities Mortgage loans $ 537,338 $ 545,306 Unsecured notes 2,708,668 2,708,213 Credit facility - - Accounts payable 56,073 70,406 Accrued interest 28,530 25,777 Dividend and distributions payable 71,864 71,323 Other liabilities 219,050 250,819 Total liabilities 3,621,523 3,671,844 Noncontrolling interest - operating partnership - 301,483 preferred units outstanding as of and December 31, 2013 7,537 7,537 Equity Shareholders' equity: Common shares of beneficial interest, $.001 par value, 283,987,000 shares authorized, 149,008,030 (includes 1,249,909 in treasury) and 147,846,801 (includes 1,249,909 in treasury) shares issued and outstanding as of and December 31, 2013, respectively 149 148 Additional paid-in capital 3,709,753 3,669,618 Accumulated other comprehensive income 15,752 9,742 Distributions in excess of net income (630,706) (591,713) Common shares in treasury, at cost, 1,249,909 shares as of and December 31, 2013 (51,951) (51,951) Total shareholders' equity 3,042,997 3,035,844 Noncontrolling interest - operating partnership 3,553,566 and 3,556,566 common units outstanding as of and December 31, 2013, respectively 55,763 56,713 Noncontrolling interest - consolidated joint ventures 3,919 3,622 Total equity 3,102,679 3,096,179 Total liabilities, noncontrolling interest - operating partnership & equity $ 6,731,739 $ 6,775,560 4
Key Financial Data (Dollars in thousands except per share amounts) 06/30/14 03/31/14 12/31/13 12/31/12 12/31/11 12/31/10 Ratios: Return on operating real estate (1) 8.5% 8.5% 9.1% 9.3% 9.5% 9.7% (Property level operating income / avg. gross operating real estate) Debt to market capitalization 36.1% 36.8% 39.0% 37.4% 35.7% 36.7% Debt to gross assets 41.3% 41.4% 40.9% 41.9% 36.3% 38.3% Average net debt to adjusted EBITDA (1) 5.9 6.0 5.7 5.5 4.7 4.7 (Average debt - average cash / property level operating income - general and administrative exp. + equity in earnings of unconsolidated joint ventures + management fees and other miscellaneous income) Interest and preferred coverage ratio (1) 3.0 3.0 3.1 3.1 3.0 2.8 (Funds from operations (1) (5) + interest exp. + preferred dividend / interest exp. (including interest capitalized) + preferred dividend) Selected Items: Funds from operations per share (1) $ 0.59 $ 0.58 $ 2.49 $ 2.58 $ 2.61 $ 2.66 Payout ratio - funds from operations (1) (5) 80.5% 81.9% 76.3% 73.6% 72.8% 71.4% Termination fees (1) (4) $ 201 $ 987 $ 3,723 $ 5,025 $ 4,087 $ 6,854 Capitalized interest (1) $ 3,869 $ 2,894 $ 9,618 $ 9,919 $ 3,011 $ 929 Acquisition costs expensed (1) $ 425 $ 190 $ 10,155 $ 2,856 $ 2,566 $ 295 Capitalization: Common share distributions per share (1) $ 0.475 $ 0.475 $ 1.90 $ 1.90 $ 1.90 $ 1.90 Principal amortization on debt (2) $ 2,298 $ 2,019 $ 1,506 $ 1,195 $ 1,454 $ 1,573 Straight line rent adjustment (2) (3) (4) $ 4,173 $ 2,836 $ 2,668 $ 2,066 $ 2,845 $ 4,975 Tenant improvement and leasing transaction costs (2) (4) $ 15,702 $ 15,810 $ 14,814 $ 16,406 $ 13,445 $ 18,331 Non-reimbursed capital expenditures (2) (4) $ 3,241 $ 2,288 $ 3,447 $ 3,710 $ 3,189 $ 3,137 Market price of shares at period end $ 37.93 $ 36.96 $ 33.87 $ 35.79 $ 30.88 $ 31.92 Shares and units outstanding at period end (000s) 151,312 150,845 150,153 122,185 119,911 118,209 Market value of common shares and units $ 5,739,264 $ 5,575,231 $ 5,085,682 $ 4,373,001 $ 3,702,852 $ 3,773,231 Preferred units 7,537 7,537 7,537 72,037 292,000 292,000 Debt 3,246,006 3,251,249 3,253,519 2,653,606 2,219,519 2,355,936 Total market capitalization $ 8,992,807 $ 8,834,017 $ 8,346,738 $ 7,098,644 $ 6,214,371 $ 6,421,167 (1) Amounts for 2013, 2012, 2011, and 2010 are annual calculations. (2) Amounts for 2013, 2012, 2011, and 2010 are quarterly averages. (3) Includes amortization of lease incentives and market rent intangible. (4) Includes pro rata portion for joint ventures. 5
Portfolio Profile Leasable Square Footage of Properties by City and Building Type with Joint Venture Properties at 100% Industrial - Industrial - Percentage City Distribution Flex Office Total of Total Arizona 1,564,545 46,725 1,201,992 2,813,262 2.8% Atlanta 2,057,128 159,703-2,216,831 2.2% Carolinas 6,582,514 262,800-6,845,314 6.7% Chicago/Milwaukee 6,814,825 94,487-6,909,312 6.7% -Joint Venture 5,063,551 - - 5,063,551 4.9% Cincinnati/Columbus/Indianapolis 3,948,376 - - 3,948,376 3.9% Dallas 1,785,942 74,038-1,859,980 1.8% Houston 5,023,598 1,211,199-6,234,797 6.1% Lehigh/Central PA 18,939,652 336,100 120,777 19,396,529 18.9% Maryland 2,254,551 420,833-2,675,384 2.6% Minnesota 1,774,342 1,210,775 1,865,985 4,851,102 4.7% New Jersey 825,985 - - 825,985 0.8% -Joint Venture 3,672,402 - - 3,672,402 3.6% Northern Virginia - Joint Venture - - 1,971,596 1,971,596 1.9% Orlando 2,031,501 921,765 686,810 3,640,076 3.6% -Joint Venture 1,136,175 - - 1,136,175 1.1% Philadelphia 345,500 204,481 589,055 1,139,036 1.1% -Joint Venture - - 1,253,876 1,253,876 1.2% Richmond/Hampton Roads 4,020,299 261,048 1,229,558 5,510,905 5.4% South Florida 1,654,034 388,432 1,235,442 3,277,908 3.2% Southeastern PA 406,678 1,610,746 5,913,472 7,930,896 7.7% Southern California 1,182,457 36,303-1,218,760 1.2% Tampa 1,626,318 1,358,165 1,216,734 4,201,217 4.1% United Kingdom 1,380,878 43,717 90,013 1,514,608 1.5% -Joint Venture - 107,512 437,386 544,898 0.5% Washington DC - - 437,234 437,234 0.4% -Joint Venture - - 451,284 451,284 0.5% Other 563,437 400,026-963,463 0.9% Total Wholly Owned 64,782,560 9,041,343 14,587,072 88,410,975 86.3% Total Joint Ventures 9,872,128 107,512 4,114,142 14,093,782 13.7% TOTAL 74,654,688 9,148,855 18,701,214 102,504,757 100.0% % of Total Portfolio 72.8% 8.9% 18.3% 100.0% % of Total Portfolio - JV's at equity share 73.3% 9.8% 16.9% 100.0% Percentage of Annual Net Rent by Building Type with Joint Venture Properties at Equity Share Industrial - Industrial - Distribution Flex Office Total Wholly Owned 47.1% 12.3% 35.1% 94.5% Joint Ventures 1.8% 0.1% 3.6% 5.5% TOTAL 48.9% 12.4% 38.7% 100.0% 6
Building Type by Region Total % of Total % of Leased % Vacant % Type Net Rent Total Square Feet Total Square Feet Leased Square Feet Vacant Wholly Owned Arizona Industrial - Distribution $ 4,093,587 16.8% 1,564,545 55.6% 1,069,097 68.3% 495,448 31.7% - Flex 301,727 1.2% 46,725 1.7% 46,725 100.0% - - Office 20,051,406 82.0% 1,201,992 42.7% 1,201,992 100.0% - - Total 24,446,720 100.0% 2,813,262 100.0% 2,317,814 82.4% 495,448 17.6% Atlanta Industrial - Distribution $ 7,107,096 92.6% 2,057,128 92.8% 1,749,346 85.0% 307,782 15.0% - Flex 567,149 7.4% 159,703 7.2% 133,929 83.9% 25,774 16.1% Total 7,674,245 100.0% 2,216,831 100.0% 1,883,275 85.0% 333,556 15.0% Carolinas Industrial - Distribution $ 26,647,630 94.7% 6,582,514 96.2% 6,503,539 98.8% 78,975 1.2% - Flex 1,500,958 5.3% 262,800 3.8% 262,800 100.0% - - Total 28,148,588 100.0% 6,845,314 100.0% 6,766,339 98.8% 78,975 1.2% Chicago/Milwaukee Industrial - Distribution $ 22,555,926 98.8% 6,814,825 98.6% 5,508,007 80.8% 1,306,818 19.2% - Flex 270,336 1.2% 94,487 1.4% 75,499 79.9% 18,988 20.1% Total 22,826,262 100.0% 6,909,312 100.0% 5,583,506 80.8% 1,325,806 19.2% Cincinnati/Columbus/Indianapolis Industrial - Distribution $ 11,636,064 100.0% 3,948,376 100.0% 3,658,273 92.7% 290,103 7.3% - Flex - - - - - - - - Total 11,636,064 100.0% 3,948,376 100.0% 3,658,273 92.7% 290,103 7.3% Dallas Industrial - Distribution $ 7,217,163 94.2% 1,785,942 96.0% 1,709,208 95.7% 76,734 4.3% - Flex 447,684 5.8% 74,038 4.0% 58,695 79.3% 15,343 20.7% Total 7,664,847 100.0% 1,859,980 100.0% 1,767,903 95.0% 92,077 5.0% Houston Industrial - Distribution $ 24,302,648 74.4% 5,023,598 80.6% 4,962,465 98.8% 61,133 1.2% - Flex 8,341,639 25.6% 1,211,199 19.4% 1,085,229 89.6% 125,970 10.4% Total 32,644,287 100.0% 6,234,797 100.0% 6,047,694 97.0% 187,103 3.0% Lehigh/Central PA Industrial - Distribution $ 84,782,984 96.0% 18,939,652 97.7% 18,479,544 97.6% 460,108 2.4% - Flex 2,253,171 2.5% 336,100 1.7% 336,100 100.0% - - Office 1,310,714 1.5% 120,777 0.6% 112,938 93.5% 7,839 6.5% Total 88,346,869 100.0% 19,396,529 100.0% 18,928,582 97.6% 467,947 2.4% Maryland Industrial - Distribution $ 10,652,583 81.3% 2,254,551 84.3% 1,973,785 87.5% 280,766 12.5% - Flex 2,456,074 18.7% 420,833 15.7% 332,632 79.0% 88,201 21.0% Total 13,108,657 100.0% 2,675,384 100.0% 2,306,417 86.2% 368,967 13.8% Minnesota Industrial - Distribution $ 6,940,439 20.2% 1,774,342 36.6% 1,651,165 93.1% 123,177 6.9% - Flex 8,931,904 26.0% 1,210,775 24.9% 1,111,290 91.8% 99,485 8.2% Office 18,451,434 53.8% 1,865,985 38.5% 1,491,038 79.9% 374,947 20.1% Total 34,323,777 100.0% 4,851,102 100.0% 4,253,493 87.7% 597,609 12.3% New Jersey Industrial - Distribution $ 1,524,436 100.0% 825,985 100.0% 825,985 100.0% - - - Flex - - - - - - - - Total 1,524,436 100.0% 825,985 100.0% 825,985 100.0% - - 7
Building Type by Region Total % of Total % of Leased % Vacant % Type Net Rent Total Square Feet Total Square Feet Leased Square Feet Vacant Wholly Owned (continued) Orlando Industrial - Distribution $ 7,023,697 29.2% 2,031,501 55.8% 1,925,501 94.8% 106,000 5.2% - Flex 6,863,403 28.6% 921,765 25.3% 881,947 95.7% 39,818 4.3% Office 10,125,402 42.2% 686,810 18.9% 662,300 96.4% 24,510 3.6% Total 24,012,502 100.0% 3,640,076 100.0% 3,469,748 95.3% 170,328 4.7% Philadelphia Industrial - Distribution $ 3,714,125 15.1% 345,500 30.3% 345,500 100.0% - - - Flex 3,316,791 13.5% 204,481 18.0% 204,481 100.0% - - Office 17,585,525 71.4% 589,055 51.7% 589,055 100.0% - - Total 24,616,441 100.0% 1,139,036 100.0% 1,139,036 100.0% - - Richmond/Hampton Roads Industrial - Distribution $ 14,890,935 52.4% 4,020,299 73.0% 3,856,299 95.9% 164,000 4.1% - Flex 1,533,039 5.4% 261,048 4.7% 227,990 87.3% 33,058 12.7% Office 11,999,409 42.2% 1,229,558 22.3% 1,056,549 85.9% 173,009 14.1% Total 28,423,383 100.0% 5,510,905 100.0% 5,140,838 93.3% 370,067 6.7% South Florida Industrial - Distribution $ 9,883,149 34.3% 1,654,034 50.5% 1,486,459 89.9% 167,575 10.1% - Flex 2,923,134 10.1% 388,432 11.8% 340,675 87.7% 47,757 12.3% Office 16,032,407 55.6% 1,235,442 37.7% 1,079,476 87.4% 155,966 12.6% Total 28,838,690 100.0% 3,277,908 100.0% 2,906,610 88.7% 371,298 11.3% Southeastern PA Industrial - Distribution $ 3,111,361 3.3% 406,678 5.1% 384,178 94.5% 22,500 5.5% - Flex 15,287,866 16.3% 1,610,746 20.3% 1,525,683 94.7% 85,063 5.3% Office 75,497,791 80.4% 5,913,472 74.6% 4,882,906 82.6% 1,030,566 17.4% Total 93,897,018 100.0% 7,930,896 100.0% 6,792,767 85.6% 1,138,129 14.4% Southern California Industrial - Distribution $ 3,884,143 92.9% 1,182,457 97.0% 659,685 55.8% 522,772 44.2% - Flex 296,498 7.1% 36,303 3.0% 36,303 100.0% - - Total 4,180,641 100.0% 1,218,760 100.0% 695,988 57.1% 522,772 42.9% Tampa Industrial - Distribution $ 7,041,159 19.9% 1,626,318 38.7% 1,518,911 93.4% 107,407 6.6% - Flex 11,661,370 33.0% 1,358,165 32.3% 1,126,046 82.9% 232,119 17.1% Office 16,628,806 47.1% 1,216,734 29.0% 1,200,005 98.6% 16,729 1.4% Total 35,331,335 100.0% 4,201,217 100.0% 3,844,962 91.5% 356,255 8.5% United Kingdom Industrial - Distribution $ 12,029,711 74.7% 1,380,878 91.2% 1,380,878 100.0% - - - Flex 1,346,081 8.4% 43,717 2.9% 43,717 100.0% - - Office 2,728,209 16.9% 90,013 5.9% 83,139 92.4% 6,874 7.6% Total 16,104,001 100.0% 1,514,608 100.0% 1,507,734 99.5% 6,874 0.5% Washington DC Industrial - Distribution $ - - - - - - - - - Flex - - - - - - - - Office 11,981,300 100.0% 437,234 100.0% 362,208 82.8% 75,026 17.2% Total 11,981,300 100.0% 437,234 100.0% 362,208 82.8% 75,026 17.2% Other Industrial - Distribution $ 2,070,335 43.9% 563,437 58.5% 461,615 81.9% 101,822 18.1% - Flex 2,649,055 56.1% 400,026 41.5% 386,521 96.6% 13,505 3.4% Total 4,719,390 100.0% 963,463 100.0% 848,136 88.0% 115,327 12.0% WHOLLY OWNED - TOTAL Industrial - Distribution $ 271,109,171 49.8% 64,782,560 73.3% 60,109,440 92.8% 4,673,120 7.2% - Flex 70,947,879 13.0% 9,041,343 10.2% 8,216,262 90.9% 825,081 9.1% Office 202,392,403 37.2% 14,587,072 16.5% 12,721,606 87.2% 1,865,466 12.8% Total 544,449,453 100.0% 88,410,975 100.0% 81,047,308 91.7% 7,363,667 8.3% 8
Building Type by Region Total % of Total % of Leased % Vacant % Type Net Rent Total Square Feet Total Square Feet Leased Square Feet Vacant Joint Ventures (at 100%) Chicago/Milwaukee Industrial - Distribution $ 16,246,389 100.0% 5,063,551 100.0% 4,872,571 96.2% 190,980 3.8% - Flex - - - - - - - - Total 16,246,389 100.0% 5,063,551 100.0% 4,872,571 96.2% 190,980 3.8% New Jersey Industrial - Distribution $ 14,134,687 100.0% 3,672,402 100.0% 3,265,159 88.9% 407,243 11.1% - Flex - - - - - - - - Total 14,134,687 100.0% 3,672,402 100.0% 3,265,159 88.9% 407,243 11.1% Northern Virginia Industrial - Distribution $ - - - - - - - - - Flex - - - - - - - - Office 28,765,886 100.0% 1,971,596 100.0% 1,587,000 80.5% 384,596 19.5% Total 28,765,886 100.0% 1,971,596 100.0% 1,587,000 80.5% 384,596 19.5% Orlando Industrial - Distribution $ 5,961,783 100.0% 1,136,175 100.0% 1,136,175 100.0% - - - Flex - - - - - - - - Total 5,961,783 100.0% 1,136,175 100.0% 1,136,175 100.0% - - Philadelphia Industrial - Distribution $ - - - - - - - - - Flex - - - - - - - - Office 39,050,378 100.0% 1,253,876 100.0% 1,236,614 98.6% 17,262 1.4% Total 39,050,378 100.0% 1,253,876 100.0% 1,236,614 98.6% 17,262 1.4% United Kingdom Industrial - Distribution $ - - - - - - - - - Flex 2,941,786 26.7% 107,512 19.7% 100,499 93.5% 7,013 6.5% Office 8,083,939 73.3% 437,386 80.3% 288,724 66.0% 148,662 34.0% Total 11,025,725 100.0% 544,898 100.0% 389,223 71.4% 155,675 28.6% Washington DC Industrial - Distribution $ - - - - - - - - - Flex - - - - - - - - Office 15,049,740 100.0% 451,284 100.0% 451,284 100.0% - - Total 15,049,740 100.0% 451,284 100.0% 451,284 100.0% - - Joint Ventures Total Industrial - Distribution $ 36,342,859 27.9% 9,872,128 70.0% 9,273,905 93.9% 598,223 6.1% - Flex 2,941,786 2.3% 107,512 0.8% 100,499 93.5% 7,013 6.5% Office 90,949,943 69.8% 4,114,142 29.2% 3,563,622 86.6% 550,520 13.4% Total 130,234,588 100.0% 14,093,782 100.0% 12,938,026 91.8% 1,155,756 8.2% PORTFOLIO - TOTAL Industrial - Distribution $ 307,452,030 45.6% 74,654,688 72.8% 69,383,345 92.9% 5,271,343 7.1% - Flex 73,889,665 10.9% 9,148,855 8.9% 8,316,761 90.9% 832,094 9.1% Office 293,342,346 43.5% 18,701,214 18.3% 16,285,228 87.1% 2,415,986 12.9% Total $ 674,684,041 100.0% 102,504,757 100.0% 93,985,334 91.7% 8,519,423 8.3% 9
Occupancy March 31, 2014 December 31, 2013 September 30, 2013 June 30, 2013 Total Leased Total Leased Total Leased Total Leased Total Leased Square Square Percent Square Square Percent Square Square Percent Square Square Percent Square Square Percent Feet Feet Leased Feet Feet Leased Feet Feet Leased Feet Feet Leased Feet Feet Leased Same Store (1) 59,442,455 55,231,915 92.9% 59,442,455 54,897,164 92.4% 62,029,129 58,315,926 94.0% 66,212,858 61,671,971 93.1% 66,210,032 61,567,910 93.0% 1st Quarter, 2013 207,779 207,779 100.0% 207,779 207,779 100.0% 207,779 207,779 100.0% 207,779 207,779 100.0% 207,779 207,779 100.0% 2nd Quarter, 2013 430,165 363,194 84.4% 430,165 364,472 84.7% 430,165 364,472 84.7% 430,165 364,472 84.7% 430,165 364,472 84.7% 3rd Quarter, 2013 3,099,909 2,232,042 72.0% 3,099,909 2,085,109 67.3% 3,099,909 885,109 28.6% 3,099,909 885,109 28.6% 4th Quarter, 2013 23,099,057 21,488,967 93.0% 23,701,666 21,775,361 91.9% 23,761,176 22,099,326 93.0% 1st Quarter, 2014 1,114,491 506,292 45.4% 1,114,491 523,447 47.0% 2nd Quarter, 2014 1,017,119 1,017,119 100.0% 88,410,975 81,047,308 91.7% 87,996,465 79,853,332 90.7% 89,528,158 81,872,612 91.4% 69,950,711 63,129,331 90.2% 66,847,976 62,140,161 93.0% Industrial - Distribution 64,782,560 60,109,440 92.8% 64,368,050 58,947,380 91.6% 63,313,069 58,537,157 92.5% 42,369,246 38,591,967 91.1% 39,417,319 37,777,993 95.8% Industrial - Flex 9,041,343 8,216,262 90.9% 9,041,343 8,122,581 89.8% 9,509,410 8,510,505 89.5% 8,952,651 8,010,374 89.5% 8,952,651 8,081,770 90.3% Office 14,587,072 12,721,606 87.2% 14,587,072 12,783,371 87.6% 16,705,679 14,824,950 88.7% 18,628,814 16,526,990 88.7% 18,478,006 16,280,398 88.1% Wholly Owned Properties - Total 88,410,975 81,047,308 91.7% 87,996,465 79,853,332 90.7% 89,528,158 81,872,612 91.4% 69,950,711 63,129,331 90.2% 66,847,976 62,140,161 93.0% Joint Ventures Chicago 5,063,551 4,872,571 96.2% 5,063,551 4,847,571 95.7% 5,063,551 4,912,779 97.0% 5,063,551 4,938,999 97.5% 5,063,631 4,970,444 98.2% New Jersey 3,672,402 3,265,159 88.9% 3,069,794 2,848,758 92.8% 3,069,794 2,736,471 89.1% 3,069,794 2,736,471 89.1% 3,069,794 2,661,471 86.7% Northern Virginia 1,971,596 1,587,000 80.5% 1,971,596 1,573,484 79.8% 1,971,595 1,581,099 80.2% 2,142,535 1,778,133 83.0% 2,141,819 1,779,645 83.1% Orlando 1,136,175 1,136,175 100.0% 1,136,175 1,136,175 100.0% 1,136,175 1,136,175 100.0% 1,136,175 1,113,705 98.0% 1,136,175 1,113,705 98.0% Philadelphia 1,253,876 1,236,614 98.6% 1,253,876 1,240,342 98.9% 1,253,876 1,240,342 98.9% 1,253,876 1,252,255 99.9% 1,253,876 1,252,255 99.9% United Kingdom 544,898 389,223 71.4% 544,898 393,873 72.3% 544,898 388,628 71.3% 588,633 405,992 69.0% 588,633 410,213 69.7% Washington DC 451,284 451,284 100.0% 451,284 449,713 99.7% 451,284 451,284 100.0% 451,284 451,284 451,284 446,730 99.0% Joint Ventures - Total 14,093,782 12,938,026 91.8% 13,491,174 12,489,916 92.6% 13,491,173 12,446,778 92.3% 13,705,848 12,676,839 92.5% 13,705,212 12,634,463 92.2% Portfolio Total 102,504,757 93,985,334 91.7% 101,487,639 92,343,248 91.0% 103,019,331 94,319,390 91.6% 83,656,559 75,806,170 90.6% 80,553,188 74,774,624 92.8% (1) Same Store properties are those properties which were owned as of January 1, 2013. Historical numbers have not been adjusted for property sales in subsequent periods. 10
New Lease Analysis - Quarterly Comparison Average Average Percentage Average Square Feet Square Feet Cap Exp Cap Exp New Leases Cap. Exp. Number of First of Second of First of Second Average Average Growth in with Per Sq. Ft. of New Generation Generation Generation Generation Lease Term Straight Line Straight Line Built In per Lease Type Leases Spaces Spaces Spaces Spaces in Years Rent Rent Increases Term Quarter Ended 6/30/2014 Industrial - Distribution 33 787,521 871,816 $ 3.54 $ 2.17 5.46 $ 4.15-4.5% 76.2% $ 0.52 - Flex 23 52,231 173,699 $ 10.91 $ 11.36 5.28 $ 7.65 6.5% 95.1% $ 2.13 Office 24 84 151,175 $ 3.69 $ 13.84 4.30 $ 12.67-22.3% 90.8% $ 3.21 Total 80 839,836 1,196,690 $ 4.00 $ 4.98 5.36 $ 5.17-8.7% 81.9% $ 0.85 Quarter Ended 3/31/2014 Industrial - Distribution 29 178,250 801,038 $ 3.69 $ 2.24 2.35 $ 3.30 14.5% 47.6% $ 1.06 - Flex 23 29,969 229,036 $ 21.54 $ 5.83 4.92 $ 7.54-20.5% 99.5% $ 1.56 Office 34 43,932 301,402 $ 13.22 $ 18.38 5.09 $ 14.57-8.2% 92.1% $ 3.48 Total 86 252,151 1,331,476 $ 7.47 $ 6.51 3.37 $ 6.45-5.5% 79.4% $ 1.98 Quarter Ended 12/31/2013 Industrial - Distribution 24 188,566 572,242 $ 3.06 $ 2.98 3.83 $ 3.95 4.7% 85.1% $ 0.78 - Flex 33 60,091 195,827 $ 1.70 $ 11.47 3.69 $ 6.54-9.8% 89.8% $ 2.49 Office 31-180,086 $ - $ 16.31 4.73 $ 10.49-18.2% 73.3% $ 3.45 Total 88 248,657 948,155 $ 2.73 $ 7.26 3.94 $ 5.49-7.8% 82.9% $ 1.61 Quarter Ended 9/30/2013 Industrial - Distribution 24 87,084 673,948 $ 6.06 $ 2.71 4.04 $ 3.94 10.7% 75.4% $ 0.77 - Flex 16 6,762 123,713 $ 30.37 $ 13.67 5.45 $ 8.20-5.1% 96.6% $ 2.67 Office 47 6,393 314,291 $ 65.78 $ 18.23 6.86 $ 14.97-6.9% 86.1% $ 2.79 Total 87 100,239 1,111,952 $ 11.51 $ 8.31 4.94 $ 7.31-1.7% 83.7% $ 1.74 Quarter Ended 6/30/2013 Industrial - Distribution 29 182,580 1,088,967 $ 2.12 $ 1.00 1.95 $ 2.91 5.4% 70.5% $ 0.59 - Flex 19 8,409 271,606 $ 25.59 $ 9.95 4.53 $ 8.12 0.8% 91.4% $ 2.30 Office 31 3,117 180,835 $ 45.13 $ 15.61 4.97 $ 13.41-6.4% 87.5% $ 3.24 Total 79 194,106 1,541,408 $ 3.83 $ 4.29 2.69 $ 4.86 0.4% 81.1% $ 1.58 11
Renewal Analysis - Quarterly Comparison Percentage Growth in Renewal Cap. Exp. Percentage Average Straight Leases with Average Per Sq. Ft. Expiring Leases Leases Renewed Square Feet Lease Term Line Built In Cap. Exp. per Lease Type Number Square Feet Number Square Feet Renewed in Years Rent Increases Per Sq. Ft. Term Quarter Ended 6/30/2014 Industrial - Distribution 54 5,072,124 39 3,999,129 78.8% 4.39 7.8% 93.2% $ 0.74 $ 0.17 - Flex 40 351,049 25 214,150 61.0% 4.33 1.3% 71.2% $ 3.27 $ 0.76 Office 62 803,539 40 601,235 74.8% 6.84 3.5% 94.5% $ 10.63 $ 1.55 Total 156 6,226,712 104 4,814,514 77.3% 4.69 5.8% 92.0% $ 2.09 $ 0.45 Quarter Ended 3/31/2014 Industrial - Distribution 69 5,117,394 45 2,824,961 55.2% 6.45 6.8% 89.3% $ 1.90 $ 0.29 - Flex 45 627,556 23 363,803 58.0% 5.76 7.0% 96.3% $ 6.28 $ 1.09 Office 82 786,808 43 363,371 46.2% 3.02-4.1% 77.6% $ 7.61 $ 2.52 Total 196 6,531,758 111 3,552,135 54.4% 6.03 3.8% 87.6% $ 2.94 $ 0.49 Average Quarter Ended 12/31/2013 Industrial - Distribution 60 3,612,643 43 3,163,959 87.6% 5.77 4.0% 85.5% $ 1.38 $ 0.24 - Flex 47 586,773 27 219,846 37.5% 2.54-1.7% 50.0% $ 2.21 $ 0.87 Office 74 987,635 49 716,105 72.5% 3.78 3.3% 90.4% $ 4.53 $ 1.20 Total 181 5,187,051 119 4,099,910 79.0% 5.25 3.3% 85.4% $ 1.97 $ 0.38 Quarter Ended 9/30/2013 Industrial - Distribution 57 4,316,391 36 3,681,021 85.3% 4.31 5.1% 94.9% $ 1.04 $ 0.24 - Flex 43 624,351 25 420,141 67.3% 4.98-5.1% 66.0% $ 2.52 $ 0.51 Office 78 825,840 52 603,488 73.1% 4.16-13.1% 95.1% $ 8.08 $ 1.94 Total 178 5,766,582 113 4,704,650 81.6% 4.35-2.1% 91.2% $ 2.07 $ 0.48 Quarter Ended 6/30/2013 Industrial - Distribution 45 3,327,456 26 2,427,245 72.9% 2.33 8.5% 81.6% $ 0.63 $ 0.27 - Flex 39 473,741 15 121,164 25.6% 2.45 1.2% 90.3% $ 2.04 $ 0.83 Office 92 1,327,176 56 956,318 72.1% 4.86-2.9% 91.4% $ 4.39 $ 0.90 Total 176 5,128,373 97 3,504,727 68.3% 3.02 1.4% 87.5% $ 1.71 $ 0.57 12
Lease Expirations SQUARE FEET NET RENT PER SQUARE FOOT Industrial Industrial Year of Expiration Total Distribution Flex Office Total Distribution Flex Office WHOLLY OWNED - TOTAL 2014 2,997,355 1,850,735 466,926 679,694 $ 7.17 $ 4.18 $ 7.91 $ 14.78 2015 12,389,488 9,399,195 1,129,154 1,861,139 $ 6.18 $ 4.41 $ 8.26 $ 13.86 2016 12,372,387 9,375,178 1,498,754 1,498,455 $ 6.90 $ 4.90 $ 8.61 $ 17.71 2017 13,412,525 10,188,674 1,302,122 1,921,729 $ 6.69 $ 4.62 $ 8.26 $ 16.57 2018 11,357,400 9,155,050 891,350 1,311,000 $ 6.75 $ 5.08 $ 8.88 $ 16.97 2019 9,229,724 6,241,451 1,054,586 1,933,687 $ 8.62 $ 4.98 $ 10.27 $ 19.47 Thereafter 19,288,429 13,899,157 1,873,370 3,515,902 $ 9.55 $ 5.87 $ 12.92 $ 22.31 Total 81,047,308 60,109,440 8,216,262 12,721,606 $ 7.57 $ 5.01 $ 9.69 $ 18.28 Total Square Feet 88,410,975 64,782,560 9,041,343 14,587,072 Joint Ventures 2014 874,089 453,352-420,737 $ 14.84 $ 4.59 $ - $ 25.89 2015 574,912 333,868 9,257 231,787 $ 11.91 $ 4.54 $ 29.07 $ 21.83 2016 2,141,031 1,685,553 38,782 416,696 $ 8.80 $ 4.37 $ 29.96 $ 24.73 2017 1,590,175 1,254,182 45,851 290,142 $ 8.37 $ 4.16 $ 30.44 $ 23.11 2018 1,885,741 1,749,744 6,609 129,388 $ 6.65 $ 4.65 $ 27.37 $ 32.55 2019 1,061,082 668,718-392,364 $ 13.11 $ 5.48 $ - $ 26.13 Thereafter 4,810,996 3,128,488-1,682,508 $ 15.61 $ 4.39 $ - $ 36.48 Total 12,938,026 9,273,905 100,499 3,563,622 $ 11.87 $ 4.50 $ 29.93 $ 30.53 Total Square Feet 14,093,782 9,872,128 107,512 4,114,142 PORTFOLIO - TOTAL 2014 3,871,444 2,304,087 466,926 1,100,431 $ 8.90 $ 4.26 $ 7.91 $ 19.03 2015 12,964,400 9,733,063 1,138,411 2,092,926 $ 6.43 $ 4.41 $ 8.42 $ 14.74 2016 14,513,418 11,060,731 1,537,536 1,915,151 $ 7.18 $ 4.82 $ 9.15 $ 19.24 2017 15,002,700 11,442,856 1,347,973 2,211,871 $ 6.86 $ 4.57 $ 9.02 $ 17.43 2018 13,243,141 10,904,794 897,959 1,440,388 $ 6.74 $ 5.01 $ 9.02 $ 18.37 2019 10,290,806 6,910,169 1,054,586 2,326,051 $ 9.08 $ 5.02 $ 10.27 $ 20.59 Thereafter 24,099,425 17,027,645 1,873,370 5,198,410 $ 10.76 $ 5.60 $ 12.92 $ 26.90 Total 93,985,334 69,383,345 8,316,761 16,285,228 $ 8.16 $ 4.94 $ 9.94 $ 20.96 Total Square Feet 102,504,757 74,654,688 9,148,855 18,701,214 13
Completed Development Properties Total Inventory/ Building Total Square Occupancy No. of Start Shell Operating Stabilized Address Location Build-to-Suit Type Costs Feet 6/30/2014 Tenants Major Tenant Date Comp Date As Of: Yield Wholly Owned: (in'000s) 13225 Brockton Lane Rogers, MN Inventory ID $ 12,383 227,054 100.0% 1 Graco, Inc. Oct-13 Jun-14 Jun-14 Totals: $ 12,383 227,054 100.0% 8.8% 14
Total Construction Leasable Projected Inventory/ Building Projected Percentage Square Percent No. of SL Address City, State Build-to-Suit Type Costs Complete (1) Feet Pre-Leased Tenants Major Tenant Yield SORTED BY QUARTER PROJECT IS ANTICIPATED TO COME INTO SERVICE (2) Wholly Owned Development Liberty Property Trust Development Properties (000's) 3rd Quarter, 2014 425 Old Morehall Road Malvern, PA Build-to-Suit O $ 51,192 92.3% 200,750 100.0% 1 The Vanguard Group 1467 Perryman Road Aberdeen, MD Build-to-Suit ID 50,149 97.5% 945,720 100.0% 1 Clorox Manufacturing Company 9300 Olde Scotland Road Shippensburg, PA Build-to-Suit ID 96,657 97.8% 1,692,159 100.0% 1 The Procter and Gamble Distributing, LLC 197,998 96.3% 2,838,629 100.0% 1st Quarter, 2015 201 Rouse Blvd Philadelphia, PA Build-to-Suit O 25,215 58.3% 80,050 100.0% 1 Franklin Square Holdings 110 Caliber Ridge Drive Greer, SC Inventory ID 7,596 87.6% 156,000 33.3% 1 A.L. Industries Inc. 1050 Greens Parkway Houston, TX Inventory ID 5,242 81.4% 66,798 30.9% 1 TFE Group, Inc 11220 Ella Boulevard Houston, TX Inventory ID 9,875 84.1% 162,780-47,928 70.8% 465,628 32.8% 2nd Quarter, 2015 11455 NW 122 Street Medley, FL Inventory ID 13,686 86.4% 147,840 69.1% 3 Global Food Corp. 8303 Fallbrook Drive Houston, TX Inventory ID 23,005 76.0% 400,250-4000 S. 26th Street Philadelphia, PA Inventory IF 12,697 33.4% 75,590 100.0% 3 Wuxi 49,388 67.9% 623,680 28.5% 3rd Quarter, 2015 7460 New Ridge Road Hanover, MD Inventory ID 12,154 83.7% 117,500 25.5% 1 Kawneer Company, Inc. 7462 New Ridge Road Hanover, MD Inventory ID 12,866 79.5% 126,000-25,020 81.6% 243,500 12.3% 4th Quarter, 2015 1850 W. Rio Salado Parkway Tempe, AZ Inventory O 29,466 60.3% 154,029 49.4% 1 WageWorks, Inc. 10 Emery Street Bethlehem, PA Inventory ID 48,119 55.8% 800,000-330 South Royal Lane Coppell, TX Inventory ID 13,249 32.4% 198,819-5800 Eastport Boulevard Richmond, VA Inventory ID 8,391 13.4% 129,660-99,225 50.4% 1,282,508 5.9% 1st Quarter, 2016 10720 West Sam Houston Pkwy N Houston, TX Inventory O 47,745 24.7% 206,754-47,745 24.7% 206,754 - Total Wholly Owned Development: $ 467,304 72.9% 5,660,699 57.9% 8.2% Joint Ventures (3) 4th Quarter, 2014 2277 Center Square Road Bridgeport, NJ Inventory ID $ 15,604 42.5% 203,250 100.0% 1 15,604 42.5% 203,250 100.0% Total Joint Venture Development: $ 15,604 42.5% 203,250 100.0% 8.9% Total Development: $ 482,908 71.9% 5,863,949 59.3% 8.3% (1) Calculated according to the percentage of the project incurred as of. (2) Project will come into service at the earlier of standard construction/lease-up periods or rent commencement on 90% of space. (3) Amounts shown are 100% of development property value. 15
Acquisition Properties acq work ricks email acq work acq work acq work acq work acq work Leasable Percent Purchase Date Product Square Leased @ Price Current Project Acquired City/State Type Footage 6/30/2014 (in 000s) Yield Wholly Owned: 4226 Surles Court 06/12/14 Durham, NC ID 150,332 100.0% $ 9,950 4227 Surles Court 06/12/14 Durham, NC ID 123,604 100.0% 7,600 4234 Durles Court 06/12/14 Durham, NC ID 150,000 100.0% 9,700 4300 Emperor Center 06/12/14 Durham, NC ID 111,909 100.0% 6,700 1000 Parliament Court 06/12/14 Durham, NC ID 169,520 100.0% 10,300 12681-12691 Pala Drive 06/26/14 Garden Grove, CA ID 84,700 100.0% 8,978 Total Portfolio: 790,065 100.0% $ 53,228 7.5% 16
Disposition Properties Wholly Owned: Leasable Sales Date Product Square Percent Proceeds Project Sold City/State Type Feet Leased (in 000s) 2145 Center Square Road 6/27/2014 Logan Township, NJ ID 197,894 - $ 6,886 100 Dartmouth Drive 6/27/2014 Swedesboro, NJ ID 213,563 82.6% 15,107 100 Gloucester Court 6/27/2014 Swedesboro, NJ ID 191,151 100.0% 10,256 Total Wholly Owned: 602,608 61.0% $ 32,249 17
Debt & Preferred Unit Analysis (Dollars in Thousands) Debt Maturities: Weighted Mortgages (1) Unsecured Average Amortization Maturities Notes (2) Credit Facility (3) Total Interest Rate 2014 $ 5,817 $ - $ 199,991 $ - $ 205,808 5.64% 2015 12,138 44,469 315,925-372,532 5.16% 2016 11,720 182,318 299,470-493,508 6.08% 2017 10,916 2,349 295,952-309,217 6.57% 2018 8,730 27,051 99,972-135,753 6.80% 2019 8,680 50,043 - - 58,723 3.99% 2020 4,280 67,361 349,482-421,123 4.83% 2021 2,716 65,008 - - 67,724 4.06% 2022 2,172-399,380-401,552 4.13% 2023 and thereafter 29,625 1,945 748,496-780,066 4.03% $ 96,794 $ 440,544 $ 2,708,668 $ - $ 3,246,006 5.05% (1) Mortgages comprise $537,338 fixed rate debt bearing interest at a weighted average interest rate of 5.57%. Preferred Units: (2) The unsecured notes include $200,000 principal bearing interest at 5.65%, $300,000 principal bearing interest at 5.125%, $16,000 principal bearing interest at 3.435%, $300,000 principal bearing interest at 5.50%, $296,543 principal bearing interest at 6.625%, $100,000 principal bearing interest at 7.50%, $350,000 principal bearing interest at 4.75%, $400,000 principal bearing interest at 4.125%, $300,000 principal bearing interest at 3.375% and $450,000 principal bearing interest at 4.40% for a blended weighted average interest rate of 4.944% (3) The $800 million credit facility bears interest at LIBOR + 105 basis points and expires on March 26, 2018. Dividend Liquidation Optional Security Rate Preference Redemption Date Series I -2 6.25% 7,537 November 2016 - July 2027 18
Debt Covenants SENIOR UNSECURED NOTES Required 6/30/2014 3/31/2014 12/31/2013 12/31/12 12/31/11 12/31/10 12/31/09 Covenant (a) (b) Debt/Total Assets < 60% 41% 42% 42% 42% 37% 38% 39% Annual Service Charge Coverage > 1.5 3.15 3.19 3.25 3.43 3.42 3.12 2.56 Secured Debt < 40% 7% 7% 7% 5% 5% 5% 7% Unencumbered Total Asset Value/Unsecured Debt > 1.5 2.31 2.31 2.33 2.29 2.65 2.51 2.46 UNSECURED LINE OF CREDIT Covenant (a) (b) Unsecured Debt : Unencumbered Properties <= 60% 49% 48% 49% 49% 40% 43% 44% Unencumbered NOI : Unsecured Interest Expense >=1.75 3.28 3.11 3.18 3.39 3.59 3.16 3.05 Total Debt : Total Assets <= 60% 41% 40% 46% 50% 43% 46% 45% Secured Debt : Total Assets <=35% 7% 7% 10% 10% 10% 11% 13% EBITDA : Fixed Charges >= 1.5 2.50 2.50 2.64 2.65 2.49 2.36 2.34 Dividend : FFO <= 90% 78% 78% 78% 74% 73% 72% Waived (a) Defined terms used in the above covenant calculations may differ between the Senior Unsecured Notes and the Unsecured Line of Credit. (b) Ratios use calculations that are defined in the Trust Indenture or Credit Facility Credit Agreement as appropriate. 19
Same Store Comparison (Dollars in thousands) Quarter Ended Percentage Six Months Ended Percentage 6/30/2014 6/30/2013 Change 6/30/2014 6/30/2013 Change Rental Revenue $ 103,498 $ 102,999 0.5% $ 206,266 $ 205,965 0.1% Operating Expenses: Rental Property Expense 27,137 26,559 2.2% 59,623 52,357 13.9% Real Estate Taxes 17,929 17,805 0.7% 35,469 35,005 1.3% Operating Expense Recovery (42,757) (43,167) -0.9% (90,359) (85,355) 5.9% Unrecovered Operating Expenses 2,309 1,197 92.9% 4,733 2,007 135.8% Property Level Operating Income 101,189 101,802-0.6% 201,533 203,958-1.2% Less Straight Line Rent 2,300 565 307.1% 2,905 1,579 84.0% Cash Basis Property Level Operating Income $ 98,889 $ 101,237-2.3% $ 198,628 $ 202,379-1.9% Same Store properties are those which were owned at January 1, 2013 and excluding properties sold through. Rental revenue does not include termination fees. Management generally considers the performance of the Same Store properties to be a useful financial performance measure because the results are directly comparable from period to period. Management further believes that the performance comparison should exclude Termination Fees since they are more event specific and are not representative of ordinary performance results. In addition, Same Store property level operating income exclusive of Termination Fees is considered by management to be a more reliable indicator of the portfolio s baseline performance. Same Store property level income is a non-gaap measure and does not represent income before property dispositions, income taxes and noncontrolling interest because it does not reflect the consolidated operations of the Company. Investors should review Same Store results, along with Funds from operations (see page 3), GAAP net income and cash flow from operating activities, investing activities and financing activities when trying to understand the equity REIT s operating performance. 20
Unconsolidated Joint Ventures As of and for the Six Months Ended (Dollars in Thousands) Liberty Kings Hill Liberty Liberty Liberty Liberty Venture I, LP Unit Trust Illinois, LP AIPO LP Washington, LP Commerz LP Other Total BALANCE SHEET (A) Real estate assets $ 161,835 $ 190,759 $ 261,782 $ 52,945 $ 891,467 $ 494,859 $ 17,904 $ 2,071,551 Accumulated depreciation (34,974) (27,757) (46,473) (6,779) (142,098) (90,459) (2,557) (351,097) Real estate assets, net 126,861 163,002 215,309 46,166 749,369 404,400 15,347 1,720,454 Development in progress 6,629 - - - - - - 6,629 Land held for development 2,842-33,843 14,435 2,000-79,183 132,303 Other assets 15,173 17,844 32,390 6,059 56,920 51,518 38,291 218,195 Total assets $ 151,505 $ 180,846 $ 281,542 $ 66,660 $ 808,289 $ 455,918 $ 132,821 $ 2,077,581 Debt 72,366 100,311 140,400 42,723 319,116 319,805-994,721 Other liabilities 5,727 103,859 7,913 748 13,843 9,032 11,990 153,112 Equity 73,412 (23,324) 133,229 23,189 475,330 127,081 120,831 929,748 Total liabilities and equity $ 151,505 $ 180,846 $ 281,542 $ 66,660 $ 808,289 $ 455,918 $ 132,821 $ 2,077,581 LPT's ownership percentage 25% 20% 25% 50% 25% 20% 20%-50% LPT's share of equity $ 16,942 $ 12,988 $ 21,923 $ 12,034 $ 71,724 $ 24,096 $ 44,169 $ 203,876 RESULTS OF OPERATIONS (A) Total revenue $ 8,710 $ 6,750 $ 12,506 $ 3,662 $ 36,381 $ 32,081 $ 772 $ 100,862 Operating expenses 2,874 2,701 4,515 801 13,692 11,793 662 37,038 SUBTOTAL 5,836 4,049 7,991 2,861 22,689 20,288 110 63,824 Interest 2,533 3,138 4,131 1,436 9,276 10,038-30,552 Depreciation and amortization 2,723 2,133 3,682 752 13,491 7,322 206 30,309 Other (income)/expense UNCO 29 (25) (6) (6) (133) 177 (5,456) (5,420) Gain (loss) on sale 6 - - 194 - - - - 194 NET INCOME $ 551 $ (1,197) $ 378 $ 679 $ 55 $ 2,751 $ 5,360 $ 8,577 LPT's share of net income $ 259 $ (173) $ 363 $ 445 $ 1,246 $ 868 $ 2,697 $ 5,705 LPT's share of depreciation and amortization 681 393 778 376 2,864 1,438 102 6,632 LPT's share of funds from operations (FFO) $ 940 $ 220 $ 1,141 $ 821 $ 4,110 $ 2,306 $ 2,799 $ 12,337 DEBT Interest rate 2.13% - 7.50% 3.02% - 5.47% 5.72% - 6.05% 6.42% - 6.55% 2.50% - 6.61% 6.15% - LPT's share of debt $ 18,092 $ 20,062 $ 35,100 $ 21,362 $ 79,779 $ 63,961 $ - $ 238,356 Debt maturity date (B) 10/15-7/16 1/16 5/16-10/17 9/17-11/19 6/15-7/24 4/18 - (A) Reported at 100% of joint venture. (B) The maturity dates and corresponding future maturities are shown at the debt's first call date. JV DEBT MATURITIES (INCLUDING AMORTIZATION) (In 000'S) Total LPT Share 2014 $ 4,129 $ 1,045 2015 59,838 14,987 2016 377,636 89,426 2017 107,378 32,834 2018 371,236 77,677 Thereafter 74,504 22,387 $ 994,721 $ 238,356 21
Reconciliation of Non-GAAP Financial Measures (Unaudited and in thousands) Property Level Operating Income and Adjusted EBITDA to Net Income Quarter Ended Year Ended March 31, 2014 December 31, 2013 December 31, 2012 December 31, 2011 December 31, 2010 Property level operating income $ 135,420 $ 136,751 $ 523,223 $ 478,721 $ 494,917 $ 508,221 General and administrative expense (14,973) (18,361) (74,564) (64,686) (59,186) (52,710) Equity in earnings of unconsolidated joint ventures excluding gain on sale 1,497 1,426 6,569 4,599 3,496 2,296 Management fees and other miscellaneous income 1,844 2,076 8,164 7,220 5,963 6,895 Adjusted EBITDA 123,788 121,892 463,392 425,854 445,190 464,702 Depreciation and amortization expense (57,872) (56,734) (173,784) (135,523) (126,218) (119,653) Interest, net (38,068) (38,748) (125,400) (101,838) (99,814) (109,645) Gain on property dispositions 1,896-8,676 3,080 5,025 4,616 Income taxes (693) (531) (2,799) (976) (1,020) (1,736) Discontinued operations (not including property level operating income) 136 45,577 50,011 (37,566) (12,453) (84,531) Other 920 2,650 (502) (5,280) - (378) Net Income $ 30,107 $ 74,106 $ 219,594 $ 147,751 $ 210,710 $ 153,375 Same Store Property Level Net Operating Income to Net Income Quarter Ended Six Months Ended June 30, 2013 June 30, 2013 Same store property level operating income - cash basis $ 98,889 $ 101,237 $ 198,628 $ 202,379 Same store straight line rent 2,300 565 2,905 1,579 Same store property level operating income - GAAP basis 101,189 101,802 201,533 203,958 Non-same store property level operating income - continuing operations 33,998 3,354 67,378 4,831 Termination fees 128 278 957 585 General and administrative expense (14,973) (16,455) (33,334) (36,248) Depreciation and amortization expense (57,872) (37,527) (114,606) (74,748) Other income (expense) (35,353) (22,781) (72,107) (46,140) Gain on property dispositions 1,896-1,896 - Income taxes (693) (660) (1,224) (1,151) Equity in earnings of unconsolidated joint ventures 1,546 1,566 5,705 3,323 Discontinued operations 241 13,666 48,015 63,489 Net income $ 30,107 $ 43,243 $ 104,213 $ 117,899 22