BioMed Realty Trust Inc - FORM 8-K/A - EX-99.2

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8-K/A - 8-K/A - BioMed Realty Trust Inc	d868544d8ka.htm

Exhibit 99.2

Revised as of 2/05/2015

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SUPPLEMENTAL OPERATING AND FINANCIAL DATA

DECEMBER 31, 2014


BioMed Realty Trust, Inc.	Corporate Communications Contact	www.biomedrealty.com
17190 Bernardo Center Drive	Rick Howe	(858) 485-9840 phone
San Diego, CA 92128	Senior Director, Corporate Communications	(858) 485-9843 fax
	richard.howe@biomedrealty.com

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TABLE OF CONTENTS

DECEMBER 31, 2014


	Page			Page
Fourth Quarter Highlights		3	Common Stock Data		20
Investor Information		4	Market Summary		21
Equity Research Coverage		5	Property Listing - Consolidated Portfolio		22-24
Financial and Operating Highlights		6	Development		25
Capitalization Summary		7	Capital Expenditures		26
Portfolio Summary		8	Property Listing - Unconsolidated Partnerships		27
Consolidated Balance Sheets		9	Lease Expirations		28
Consolidated Statements of Operations		10	Expirations by Market		29
Balance Sheet / Operations Statement Detail		11	Future Lease Commencements		30
FFO, CFFO and AFFO		12	20 Largest Tenants		31
FFO, CFFO and AFFO per Share		13	Same Property Analysis		32
Reconciliation of EBITDA and Adjusted EBITDA		14	Leasing Activity		33
Reconciliation of Net Operating Income		15	Square Footage Rollforward		34
Interest Expense		16	Tenant Improvements, Leasing Commissions		35
Coverage Ratios		17	and Tenant Concessions
Debt Summary		18	Acquisitions and Dispositions		36
Debt Maturities		19	Non-GAAP Financial Measure Definitions		37
			Definitions		38

This Supplemental Operating and Financial Data package contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, without limitation: general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, dependence on tenants’ financial condition, and competition from other developers, owners and operators of real estate); adverse economic or real estate developments in the life science industry or the company’s target markets; risks associated with the availability and terms of financing, the use of debt to fund acquisitions, developments and other investments, and the ability to refinance indebtedness as it comes due; failure to maintain the company’s investment grade credit ratings with the ratings agencies; failure to manage effectively the company’s growth and expansion into new markets, or to complete or integrate acquisitions and developments successfully; reductions in asset valuations and related impairment charges; risks and uncertainties affecting property development and construction; risks associated with tax credits, grants and other subsidies to fund development activities; risks associated with downturns in foreign, domestic and local economies, changes in interest rates and foreign currency exchange rates, and volatility in the securities markets; ownership of properties outside of the United States that subject the company to different and potentially greater risks than those associated with the company’s domestic operations; risks associated with the company’s investments in loans, including borrower defaults and potential principal losses; potential liability for uninsured losses and environmental contamination; risks associated with security breaches and other disruptions to the company’s information technology networks and related systems; risks associated with the company’s potential failure to qualify as a REIT under the Internal Revenue Code of 1986, as amended, and possible adverse changes in tax and environmental laws; and risks associated with the company’s dependence on key personnel whose continued service is not guaranteed. For a further list and description of such risks and uncertainties, see the reports filed by the company with the Securities and Exchange Commission, including the company’s most recent annual report on Form 10-K and quarterly reports on Form 10-Q. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

All amounts shown in this report are unaudited.

This Supplemental Operating and Financial Data package is not an offer to sell or solicitation to buy securities of BioMed Realty Trust, Inc. Any offers to sell or solicitations to buy securities of BioMed Realty Trust, Inc. shall be made only by means of a prospectus approved for that purpose.

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FOURTH QUARTER HIGHLIGHTS

DECEMBER 31, 2014

•

20 new leases totaling approximately 656,200 square feet, highlighted by:

•

A new 15-year lease with Illumina for a new 360,000 square foot life science campus consisting of two buildings in Foster City, California, with an option for Illumina to expand the campus with the development of a third building providing at least an additional 160,000 square feet, which would bring the campus to a total of at least 520,000 square feet;

•

A new lease with Wake Forest Baptist Medical Center, an affiliate of Wake Forest University, for approximately 167,900 square feet at the company’s Wake 60 project in the Wake Forest Innovation Quarter of Winston-Salem, North Carolina;

•

A new lease with Mullen Communications for approximately 34,700 square feet at the company’s Piedmont Triad Research – Wake 90 property in the Wake Forest Innovation Quarter;

•

The first new lease at the company’s 450 Kendall Street development property in Cambridge, Massachusetts with MPM Asset Management for approximately 14,500 square feet; and

•

A lease expansion with NanoString Technologies for a total of approximately 33,600 square feet in two of the company’s properties in Seattle, including approximately 21,500 square feet at the BioMed Realty Research Center located at 500 Fairview Avenue and approximately 12,100 square feet at the company’s Elliott Avenue property.

•

14 lease renewals and extensions totaling approximately 219,800 square feet, highlighted by:

•

A lease extension with Bayer CropScience for approximately 61,600 square feet at the Paramount Parkway property in Morrisville, North Carolina;

•

A lease extension with FUJIFILM Diosynth Biotechnologies for approximately 30,600 square feet at the company’s Weston Parkway property in Cary, North Carolina; and

•

A lease extension with Melinta Therapeutics for approximately 27,700 square feet at the company’s 300 George Street property in New Haven, Connecticut.

•

Total revenues for the fourth quarter were approximately $165.7 million, compared to approximately $158.0 million for the same period in 2013.

•

Rental revenues for the fourth quarter were approximately $122.0 million, compared to approximately $118.0 million for the same period in 2013.

•

During the fourth quarter, the company acquired and began development of an additional 283,000 square feet of laboratory and office space in the Wake Forest Innovation Quarter in Winston-Salem, North Carolina. The two-building project is approximately 60% pre-leased on a long-term basis to Wake Forest Baptist Medical Center, an affiliate of Wake Forest University, which will be used for medical education for the Wake Forest School of Medicine.

•

Also during the quarter, the company closed on the sale of its 9911 Belward Campus Drive building in Rockville, Maryland for approximately $322.5 million in gross proceeds, with a gain on sale of approximately $136.6 million, net of closing costs

About BioMed Realty Trust

BioMed Realty, with its trusted expertise and valuable relationships, delivers optimal real estate solutions for biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry. BioMed Realty owns or has interests in properties comprising approximately 17.5 million rentable square feet. Additional information is available at www.biomedrealty.com.Follow us on Twitter @biomedrealty.

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INVESTOR INFORMATION

DECEMBER 31, 2014


Company Information
Corporate Headquarters	Trading Symbol	Transfer Agent	Stock Exchange Listing
17190 Bernardo Center Drive	BMR	Computershare Shareowner Services LLC	New York Stock Exchange
San Diego, CA 92128		250 Royall Street
(858) 485-9840		Canton, MA 02021
(858) 485-9843 (fax)		(877) 296-3711

Please visit our corporate website at:	www.biomedrealty.com

Board of Directors	Senior Management
Alan D. Gold	Alan D. Gold	Karen A. Sztraicher	James R. Berens
Chairman	Chairman and	Executive Vice President,	President
Daniel M. Bradbury	Chief Executive Officer	Asset Management	Wexford Science & Technology
William R. Brody, M.D., Ph.D.	R. Kent Griffin, Jr.	Jonathan P. Klassen	Sandy N. Weeks, Esq.
Gary A. Kreitzer	President and	Senior Vice President,	Senior Vice President and
Theodore D. Roth	Chief Operating Officer	General Counsel and Secretary	General Counsel
Janice. L. Sears	Gary A. Kreitzer	John P. Bonanno	Wexford Science & Technology
M. Faye Wilson	Executive Vice President, Director	Senior Vice President,	Daniel C. Cramer
	Greg N. Lubushkin	Leasing & Development	Senior Vice President, Development
	Chief Financial Officer		Wexford Science & Technology

Tentative Schedule for Quarterly Results
First Quarter 2015	April 29, 2015
Second Quarter 2015	July 29, 2015
Third Quarter 2015	October 28, 2015
Fourth Quarter 2015	February 3, 2016

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EQUITY RESEARCH COVERAGE

DECEMBER 31, 2014


Cantor Fitzgerald	David Toti Evan Smith	(212) 915-1219 (212) 915-1220	dtoti@cantor.com evan.smith@cantor.com

Cowen and Company	James Sullivan Tom Catherwood	(646) 562-1380 (646) 562-1382	james.sullivan@cowen.com tom.catherwood@cowen.com

Green Street Advisors	Michael Knott Kevin Tyler	(949) 640-8780	mknott@greenst.com ktyler@greenst.com

Jefferies & Co.	Omotayo Okusanya	(212) 336-7076	tokusanya@jefferies.com

KeyBanc Capital Markets	Jordan Sadler Craig Mailman	(917) 368-2280 (917) 368-2316	jsadler@keybanccm.com cmailman@keybanccm.com

Mizuho Securities	Richard Anderson	(212) 205-8445	richard.anderson@us.mizuho-sc.com

MLV & Co.	Paul Morgan Joe Ng	(415) 325-4187 (646) 412-7736	pmorgan@mlvco.com jng@mlvco.com

Morgan Stanley	Vikram Malhotra	(212) 761-7064	vikram.malhotra@morganstanley.com

Raymond James	Paul Puryear William Crow	(727) 567-2253 (727) 567-2594	paul.puryear@raymondjames.com bill.crow@raymondjames.com

Robert W. Baird & Co.	David Rodgers Mathew Spencer	(216) 737-7341 (414) 298-5053	drodgers@rwbaird.com mspencer@rwbaird.com

Stifel, Nicolaus & Company, Inc.	Daniel Bernstein Elizabeth Mora	(443) 224-1351 (443) 224-1353	bernsted@stifel.com morane@stifel.com

UBS Securities	Ross Nussbaum Nick Yulico	(212) 713-2484 (212) 713-3402	ross.nussbaum@ubs.com nick.yulico@ubs.com

Wells Fargo Securities	Brendan Maiorana Young Ku	(443) 263-6516 (443) 263-6564	brendan.maiorana@wachovia.com young.ku@wachovia.com

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FINANCIAL AND OPERATING HIGHLIGHTS

DECEMBER 31, 2014

(In thousands, except per share and ratio amounts)


	Three Months Ended
Selected Operating Data	12/31/14			9/30/14			6/30/14			3/31/14			12/31/13
Rental revenues	$	121,973		$	122,838		$	120,924		$	120,026		$	118,048
Total revenues		165,656			168,916			171,161			168,876			157,993
EBITDA (1)		229,158			105,677			104,445			109,893			97,419
Adjusted EBITDA (1)		102,167			107,180			105,717			99,787			97,735
Net operating income - cash basis (2)		108,118			109,857			105,743			103,843			103,382
General and administrative expense		12,162			12,768			12,443			11,942			11,817
Acquisition-related expenses		960			487			1,134			1,250			19
Capitalized interest		6,143			6,120			5,423			4,192			4,207
Interest expense, net		21,924			22,215			23,131			28,010			27,837
Operating margin (3)		67.2	%		66.8	%		66.7	%		66.9	%		67.9	%
General and administrative expense / Total revenues		7.3	%		7.6	%		7.3	%		7.1	%		7.5	%
Change in same property net operating income - cash basis (4)		2.2	%		7.2	%		6.7	%		6.8	%		6.6	%
Net income available to common stockholders (5)		140,349			15,960			18,636			18,833			10,279
Net income per share - diluted	$	0.70		$	0.08		$	0.10		$	0.10		$	0.05
FFO - diluted (6)		73,157			83,695			83,378			83,383			70,997
FFO per share - diluted (6)	$	0.35		$	0.40		$	0.40		$	0.40		$	0.34
CFFO - diluted (6)		74,117			84,182			84,512			84,633			71,016
CFFO per share - diluted (6)	$	0.36		$	0.40		$	0.40		$	0.41		$	0.34
AFFO - diluted (6)		56,732			72,938			67,402			79,552			65,484
AFFO per share - diluted (6)	$	0.27		$	0.35		$	0.32		$	0.38		$	0.31
Dividend per share - common stock	$	0.260		$	0.250		$	0.250		$	0.250		$	0.250
CFFO payout ratio (7)		72.2	%		62.5	%		62.5	%		61.0	%		73.5	%
AFFO payout ratio (7)		96.3	%		71.4	%		78.1	%		65.8	%		80.6	%
CFFO payout ratio - proforma (8)		68.4	%		—			—			—			—
AFFO payout ratio - proforma (8)		89.7	%		—			—			—			—

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(1)	For definitions and discussion of EBITDA and Adjusted EBITDA, see page 37. For a quantitative reconciliation of the differences between EBITDA, Adjusted EBITDA and net income available to common stockholders, see page 14.

(2)	For definitions and discussion of net operating income - cash basis, see page 15.

(3)	See page 15 for detail.

(4)	Compared to the same period in the prior year. See page 32 for detail.

(5)	Includes $136.6 million related to the gain on sale of the Company’s 9911 Belward Campus Drive property in Rockville, Maryland in December 2014.

(6)	For definitions and discussion of FFO, CFFO and AFFO, see page 37. For a quantitative reconciliation of the differences between FFO, CFFO, AFFO and net income available to common stockholders, see pages 12 and 13.

(7)	See page 13 for detail of the CFFO and AFFO payout ratios.

(8)	Proforma excludes executive severance for the three months ended December 31, 2014.

(9)	Current annualized base rent is the monthly contractual rent as of the current quarter ended, or if rent has not yet commenced, the first monthly rent payment due at each rent commencement. For current annualized base rent (CABR) by market, see page 21.

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CAPITALIZATION SUMMARY

DECEMBER 31, 2014

(In thousands, except per share and ratio amounts)


Capitalization		12/31/14			9/30/14			6/30/14			3/31/14			12/31/13
Total common shares outstanding			197,442			197,455			192,526			192,503			192,115
Total units outstanding (1)			5,405			5,405			5,405			5,405			5,416

Total common shares and units outstanding			202,847			202,860			197,931			197,908			197,531
Common share price at quarter end		$	21.54		$	20.20		$	21.83		$	20.49		$	18.12

Equity value at quarter end		$	4,369,337		$	4,097,785		$	4,320,839		$	4,055,134		$	3,579,261
Consolidated debt			2,712,900			2,845,685			2,841,063			2,761,337			2,664,834

Total capitalization		$	7,082,237		$	6,943,470		$	7,161,902		$	6,816,471		$	6,244,095

Debt / Total assets			44.0	%		45.6	%		46.1	%		45.5	%		44.6	%
Debt / Total gross assets			38.1	%		39.7	%		40.3	%		40.0	%		39.4	%
Debt / Total capitalization			38.3	%		41.0	%		39.7	%		40.5	%		42.7	%
Coverage Ratios (2)
Net Debt / Adjusted EBITDA (3)			6.5			6.6			6.6			6.8			6.7
Interest coverage			5.3			5.5			5.2			3.9			3.9
Fixed charge coverage			4.8			5.0			4.7			3.6			3.5
Total Consolidated Debt
Secured debt / Total gross assets			7.0	%		6.7	%		6.5	%		10.2	%		10.5	%
Floating rate debt / Total debt			33.7	%		36.8	%		33.6	%		35.7	%		33.3	%
Adjusted floating rate debt / Total debt (4)			13.2	%		17.0	%		13.5	%		15.2	%		12.1	%
Unencumbered real estate / Total real estate			85.7	%		86.1	%		86.3	%		76.9	%		76.7	%
Unencumbered CABR / Total CABR (5)			82.9	%		83.4	%		83.2	%		77.3	%		76.9	%
Unsecured line of credit capacity		$	816,000		$	671,000		$	745,000		$	674,000		$	772,000

Bond Covenants (6)	Requirements
Total outstanding debt / Total assets	Must be £ 60%		39.1	%		40.7	%		41.5	%		40.8	%		40.4	%
Secured debt / Total assets	Must be £ 40%		7.1	%		6.8	%		6.6	%		10.4	%		10.7	%
Consolidated income available for debt service / Annual debt service charge	Must be ³ 1.5X		4.2			4.3			4.0			3.6			3.6
Unencumbered assets / Unsecured debt - Notes due 2020	Must be ³ 150%		260	%		246	%		240	%		249	%		253	%
Unencumbered assets / Unsecured debt - Notes due 2016, 2019 and 2022	Must be ³ 150%		259	%		244	%		239	%		247	%		252	%

(1)	Includes both operating partnership (OP) and long term incentive plan (LTIP) units outstanding.

(2)	For discussion of coverage ratios, see page 37. See page 17 for the calculation of interest and fixed charge coverage ratios. See page 14 for calculation of Adjusted EBITDA.

(3)	Net Debt is calculated as debt less (cash and cash equivalents and restricted cash).

(4)	Includes effect of interest rate swaps on the Company’s unsecured senior term loan facilities. See page 18 for more information.

(5)	For current annualized base rent (CABR) by market, see page 21.

(6)	For discussion on bond covenants, see page 38.

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PORTFOLIO SUMMARY

DECEMBER 31, 2014


							Weighted-
	Gross				Rentable		Average
	Book Value		Buildings		Square Feet		Leased % (1)
	(In thousands)
Operating portfolio	$	5,602,587		174		15,491,133		91.6	%
Active new construction (2)		379,051		10		1,679,301		89.1	%
Unconsolidated partnership portfolio (3)		35,291		3		355,080		99.9	%
Land bank (2)		381,376		—		7,018,000		—

Total portfolio	$	6,398,305		187		24,543,514

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(1)	Calculated based on gross book value for each asset multiplied by the percentage leased.

(2)	See page 25 for detail and page 38 for definitions of terms.

(3)	See page 27 for detail of the unconsolidated partnership portfolio.

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CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2014

(In thousands)


	12/31/14			9/30/14			6/30/14			3/31/14			12/31/13
Assets
Investments in real estate, net	$	5,416,575		$	5,535,115		$	5,474,648		$	5,235,036		$	5,217,902
Investments in unconsolidated partnerships		35,291			36,275			32,440			31,461			32,137
Cash and cash equivalents		46,659			33,864			39,004			59,121			34,706
Accounts receivable, net		14,631			18,843			9,686			10,719			8,421
Accrued straight-line rents, net		163,716			183,904			181,705			178,114			173,779
Deferred leasing costs, net		219,713			224,824			236,848			189,527			198,067
Other assets		274,301			205,487			185,406			371,453			307,589

Total assets	$	6,170,886		$	6,238,312		$	6,159,737		$	6,075,431		$	5,972,601

Liabilities and Equity
Liabilities:
Mortgage notes payable, net	$	496,757		$	478,543		$	456,034		$	706,013		$	709,324
Exchangeable senior notes, net		95,678			95,678			180,000			180,000			180,000
Unsecured senior notes, net		1,293,903			1,293,572			1,293,246			895,312			895,083
Unsecured senior term loans		749,326			755,876			764,106			760,066			758,786
Unsecured line of credit		84,000			229,000			155,000			226,000			128,000
Accounts payable, accrued expenses, and other liabilities		381,280			375,933			358,958			333,157			314,383

Total liabilities		3,100,944			3,228,602			3,207,344			3,100,548			2,985,576
Equity:
Stockholders’ equity:
Common stock		1,975			1,975			1,925			1,925			1,921
Additional paid-in capital		3,649,235			3,643,957			3,557,886			3,554,504			3,554,558
Accumulated other comprehensive loss, net		(2,214	)		(20,915	)		(24,088	)		(19,973	)		(32,923	)
Dividends in excess of earnings		(645,983	)		(675,763	)		(642,360	)		(612,864	)		(583,569	)

Total stockholders’ equity		3,003,013			2,949,254			2,893,363			2,923,592			2,939,987
Noncontrolling interests		66,929			60,456			59,030			51,291			47,038

Total equity		3,069,942			3,009,710			2,952,393			2,974,883			2,987,025

Total liabilities and equity	$	6,170,886		$	6,238,312		$	6,159,737		$	6,075,431		$	5,972,601

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CONSOLIDATED STATEMENTS OF OPERATIONS

DECEMBER 31, 2014

(In thousands, except share and per share data)


	Three Months Ended
	12/31/14			9/30/14			6/30/14			3/31/14			12/31/13
Revenues:
Rental	$	121,973		$	122,838		$	120,924		$	120,026		$	118,048
Tenant recoveries		40,753			42,626			40,280			38,735			37,597
Other revenue		2,930			3,452			9,957			10,115			2,348

Total revenues		165,656			168,916			171,161			168,876			157,993

Expenses:
Rental operations		53,444			54,899			53,636			52,523			49,891
Depreciation and amortization		64,744			64,452			62,736			62,409			58,781
General and administrative		12,162			12,768			12,443			11,942			11,817
Executive severance		4,380			—			—			—			—
Acquisition-related expenses		960			487			1,134			1,250			19

Total expenses		135,690			132,606			129,949			128,124			120,508

Income from operations		29,966			36,310			41,212			40,752			37,485
Equity in net income/(loss) of unconsolidated partnerships		160			733			(10	)		(138	)		(208	)
Interest expense, net		(21,924	)		(22,215	)		(23,131	)		(28,010	)		(27,837	)
Gain on sale of real estate (1)		136,609			—			—			—			—
Other (expense)/income		(184	)		2,148			1,027			8,163			1,136

Net income		144,627			16,976			19,098			20,767			10,576
Net income attributable to noncontrolling interests		(4,278	)		(1,016	)		(462	)		(1,934	)		(297	)

Net income available to common stockholders	$	140,349		$	15,960		$	18,636		$	18,833		$	10,279

Net income per share available to common stockholders:
Basic earnings per share	$	0.71		$	0.08		$	0.10		$	0.10		$	0.05

Diluted earnings per share	$	0.70		$	0.08		$	0.10		$	0.10		$	0.05

Weighted-average common shares outstanding:
Basic		196,017,579			194,022,619			191,003,248			190,905,867			190,664,323

Diluted		208,528,196			199,574,893			196,800,354			196,545,536			196,117,552

(1)	Includes gain on sale of 9911 Belward Campus Drive property in December 2014.

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BALANCE SHEET / OPERATIONS STATEMENT DETAIL

DECEMBER 31, 2014

(In thousands)


	12/31/14			9/30/14			6/30/14			3/31/14			12/31/13
Restricted cash	$	30,057		$	8,297		$	9,096		$	11,190		$	11,500
Acquired above-market leases, net		11,207			12,197			13,262			14,380			15,828
Acquired below-market ground lease, net		24,975			25,256			25,575			21,865			21,983
Deferred loan costs, net		16,154			16,997			18,652			17,291			18,771
Lease incentives, net		24,414			23,907			19,988			19,135			19,639
Construction loan receivable, net (1)		—			—			—			191,280			151,823
Investment in equity securities, net		102,049			60,335			48,701			50,386			38,051
Other		65,445			58,498			50,132			45,926			29,994

Other assets	$	274,301		$	205,487		$	185,406		$	371,453		$	307,589

Security deposits	$	14,931		$	14,766		$	14,348		$	13,833		$	13,728
Dividends and distributions payable		52,740			50,715			49,483			49,477			49,383
Accounts payable, accrued expenses and other liabilities		276,176			271,634			253,259			231,073			210,986
Derivative instruments		1,635			1,328			2,909			2,154			2,165
Acquired below-market leases, net		35,798			37,490			38,959			36,620			38,121

Accounts payable, accrued expenses and other liabilities	$	381,280		$	375,933		$	358,958		$	333,157		$	314,383


	Three Months Ended
	12/31/14			9/30/14			6/30/14			3/31/14			12/31/13
Lease termination revenue	$	2,801		$	3,300		$	1,023		$	5,287		$	—
Construction loan revenue (2)		—			—			8,653			2,557			2,190
Other revenue		129			152			281			2,271			158

Other revenue	$	2,930		$	3,452		$	9,957		$	10,115		$	2,348

Rental operations expenses	$	38,902		$	39,359		$	39,511		$	38,039		$	35,450
Real estate taxes		14,542			15,540			14,125			14,484			14,441

Rental operations	$	53,444		$	54,899		$	53,636		$	52,523		$	49,891

Non-cash adjustment for securities	$	—		$	—		$	(50	)	$	—		$	—
Gain/(loss) on derivative instruments		276			(190	)		(270	)		161			296
Other investment (loss)/gain		(708	)		2,291			—			(1,319	)		(107	)
Realized gain on securities		1,551			681			546			9,322			787
Realized (loss)/gain on foreign currency transactions		(167	)		(96	)		100			29			56
Income tax (expense)/benefit		(1,136	)		(538	)		701			(30	)		104

Other (expense)/income	$	(184	)	$	2,148		$	1,027		$	8,163		$	1,136

(1)	Represents funding of draws on a $355 million construction loan secured by first priority mortgages on a 1.1 million square foot laboratory, office and retail development project located in Boston, Massachusetts, which was repaid in May 2014 prior to maturity.

(2)	Construction loan revenue for the three months ended June 30, 2014 includes a prepayment fee of approximately $7.5 million, net of deferred loan fees write-offs.

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FFO, CFFO AND AFFO (1)

DECEMBER 31, 2014

(In thousands)


	Three Months Ended
	12/31/14			9/30/14			6/30/14			3/31/14			12/31/13
Reconciliation of net income available to common stockholders to funds from operations excluding acquisition-related expenses (CFFO):
Net income available to common stockholders	$	140,349		$	15,960		$	18,636		$	18,833		$	10,279
Adjustments:
Gain on sale of real estate (2)		(136,609	)		—			—			—			—
Noncontrolling interests in operating partnership		3,782			429			514			521			285
Depreciation & amortization - unconsolidated partnerships		821			2,312			403			373			382
Depreciation & amortization - consolidated entities		64,744			64,452			62,736			62,409			58,781
Depreciation & amortization - allocable to noncontrolling interests of consolidated joint ventures		(847	)		(699	)		(599	)		(441	)		(418	)

Funds from operations (FFO) - basic	$	72,240		$	82,454		$	81,690		$	81,695		$	69,309
Interest expense - exchangeable senior notes due 2030 (3)		917			1,241			1,688			1,688			1,688

FFO - diluted	$	73,157		$	83,695		$	83,378		$	83,383		$	70,997
Acquisition-related expenses		960			487			1,134			1,250			19

CFFO - diluted	$	74,117		$	84,182		$	84,512		$	84,633		$	71,016


Reconciliation of CFFO to adjusted funds from operations (AFFO):
Adjustments:
Recurring capital expenditures and second generation tenant improvements (4)		(22,591	)		(17,007	)		(21,553	)		(7,731	)		(8,028	)
Leasing commissions		(2,078	)		(1,741	)		(1,929	)		(1,910	)		(1,780	)
(Gain)/loss on derivative instruments		(276	)		190			270			(161	)		(296	)
Non-cash adjustment for securities		—			—			50			—			—
Non-cash debt adjustments		3,115			3,046			3,298			3,094			3,106
Amortization of lease incentives		910			656			561			557			563
Depreciation included in general and administrative expense		771			848			757			740			647
Non-cash equity compensation		4,625			3,658			3,729			3,750			3,285
Straight line rents		(1,941	)		(1,174	)		(1,949	)		(3,194	)		(2,983	)
Share of unconsolidated partnership adjustments (5)		281			218			18			18			18
Fair-value lease revenue		(506	)		(184	)		(442	)		(285	)		(153	)
Adjustments for noncontrolling interests		305			246			80			41			89

AFFO - diluted	$	56,732		$	72,938		$	67,402		$	79,552		$	65,484

(1)	For definitions and discussion of FFO, CFFO and AFFO, see page 37.

(2)	Includes gain on sale of 9911 Belward Campus Drive property in December 2014.

(3)

The calculations of FFO, CFFO and AFFO per share diluted include the assumed issuance of common stock pursuant to the exchange provision of the exchangeable senior notes due 2030, which is dilutive based on the “if converted” method for all periods presented since the original issuance in January 2010. Under the if converted method, if the add back of interest charges relating to the exchangeable senior notes due 2030 divided by the corresponding number of common shares issuable upon exchange is dilutive, the potentially issuable shares are included in the calculations of FFO, CFFO and AFFO per diluted share.

(4)	Includes revenue enhancing and non-revenue enhancing recurring capital expenditures. Excludes first generation tenant improvements. For definitions of recurring capital expenditures and first and second generation leases, see page 38.

(5)	Share of unconsolidated partnership adjustments includes the Company’s share of amortization of deferred loan costs, lease incentives, straight line rents and fair-value lease revenue.

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FFO, CFFO AND AFFO PER SHARE (1)

DECEMBER 31, 2014

(In thousands, except share, per share and ratio amounts)


	Three Months Ended
	12/31/14			9/30/14			6/30/14			3/31/14			12/31/13
FFO - basic	$	72,240		$	82,454		$	81,690		$	81,695		$	69,309
FFO - diluted		73,157			83,695			83,378			83,383			70,997
CFFO - diluted		74,117			84,182			84,512			84,633			71,016
AFFO - diluted		56,732			72,938			67,402			79,552			65,484
FFO per share - basic	$	0.36		$	0.41		$	0.41		$	0.41		$	0.35
FFO per share - diluted (2)		0.35			0.40			0.40			0.40			0.34
CFFO per share - diluted (2)		0.36			0.40			0.40			0.41			0.34
AFFO per share - diluted (2)		0.27			0.35			0.32			0.38			0.31
Dividends and distributions declared per common share (4)	$	0.26		$	0.25		$	0.25		$	0.25		$	0.25

CFFO payout ratio		72.2	%		62.5	%		62.5	%		61.0	%		73.5	%
AFFO payout ratio		96.3	%		71.4	%		78.1	%		65.8	%		80.6	%
CFFO payout ratio - proforma (5)		68.4	%		—			—			—			—
AFFO payout ratio - proforma (5)		89.7	%		—			—			—			—
Weighted-average common shares and units outstanding diluted (3)		202,850,109			201,059,541			198,309,809			198,056,397			197,563,868
Dilutive effect of exchangeable senior notes due 2030 (2)		5,678,087			7,589,600			10,578,132			10,525,410			10,405,224

Weighted-average common shares and units outstanding diluted - FFO, CFFO and AFFO		208,528,196			208,649,141			208,887,941			208,581,807			207,969,092

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(1)	For definitions and discussion of FFO, CFFO and AFFO, see page 37.

(2)

The calculations of FFO, CFFO and AFFO per share diluted include the assumed issuance of common stock pursuant to the exchange provision of the exchangeable senior notes due 2030, which is dilutive based on the “if converted” method for all periods presented since the original issuance in January 2010. Under the if converted method, if the add back of the exchangeable senior notes due 2030 divided by the corresponding number of common shares issuable upon exchange is dilutive, the potentially issuable shares are included in the interest charges relating to calculations of FFO, CFFO and AFFO per diluted share.

(3)

The three months ended December 31, 2014 include 1,427,056 shares of unvested restricted stock which are considered dilutive for purposes of calculating diluted earnings per share. The three months ended September 30, 2014, June 30, 2014, March 31, 2014 and December 31, 2013 include 1,484,648, 1,509,455, 1,510,861, and 1,446,316 shares of unvested restricted stock, respectively, which are considered anti-dilutive for purposes of calculating diluted earnings per share.

(4)	Excludes the special dividend of $0.30 per share paid on December 29, 2014 to stockholders of record as of the close of business on December 22, 2014.

(5)	Proforma excludes executive severance for the three months ended December 31, 2014.

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RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (1)

DECEMBER 31, 2014

(In thousands)


	Three Months Ended
	12/31/14			9/30/14		6/30/14			3/31/14			12/31/13
Reconciliation of net income available to common stockholders to earnings before interest, taxes, depreciation and amortization (EBITDA) and Adjusted EBITDA:
Net income available to common stockholders	$	140,349		$	15,960	$	18,636		$	18,833		$	10,279
Interest expense, net		21,924			22,215		23,131			28,010			27,837
Interest expense - unconsolidated partnerships		184			200		240			238			244
Income tax expense/(benefit)		1,136			538		(701	)		30			(104	)
Depreciation & amortization - consolidated entities		64,744			64,452		62,736			62,409			58,781
Depreciation & amortization - unconsolidated partnerships		821			2,312		403			373			382

EBITDA		229,158			105,677		104,445			109,893			97,419
Noncontrolling interests		4,278			1,016		462			1,934			297
Non-cash adjustment for securities		—			—		50			—			—
Gain on sale of real estate (2)		(136,609	)		—		—			—			—
Net realized gain on securities (3)		—			—		—			(8,003	)		—
Acquisition-related expenses		960			487		1,134			1,250			19
Executive severance		4,380			—		—			—			—
4570 Executive Drive lease termination revenue, net		—			—		(374	)		(5,287	)		—

Adjusted EBITDA	$	102,167		$	107,180	$	105,717		$	99,787		$	97,735

(1)	For definitions and discussion of EBITDA and Adjusted EBITDA, see page 37.

(2)	Includes gain on sale of 9911 Belward Campus Drive property in December 2014.

(3)	For the three months ended March 31, 2014 only.

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RECONCILIATION OF NET OPERATING INCOME (1)

DECEMBER 31, 2014

(In thousands, except ratio amounts)


	Three Months Ended
	12/31/14			9/30/14			6/30/14			3/31/14			12/31/13
Net income	$	144,627		$	16,976		$	19,098		$	20,767		$	10,576
Equity in net (income)/loss of unconsolidated partnerships		(160	)		(733	)		10			138			208
Interest expense, net		21,924			22,215			23,131			28,010			27,837
Gain on sale of real estate (2)		(136,609	)		—			—			—			—
Other expense/(income)		184			(2,148	)		(1,027	)		(8,163	)		(1,136	)

Income from operations		29,966			36,310			41,212			40,752			37,485
Depreciation and amortization		64,744			64,452			62,736			62,409			58,781
General and administrative		12,162			12,768			12,443			11,942			11,817
Executive severance		4,380			—			—			—			—
Acquisition-related expenses		960			487			1,134			1,250			19

Consolidated net operating income	$	112,212		$	114,017		$	117,525		$	116,353		$	108,102

Revenues:
Rental	$	121,973		$	122,838		$	120,924		$	120,026		$	118,048
Tenant recoveries		40,753			42,626			40,280			38,735			37,597
Other revenue (3)		2,930			3,452			9,957			10,115			2,348

Total revenues		165,656			168,916			171,161			168,876			157,993
Expenses:
Rental operations		53,444			54,899			53,636			52,523			49,891

Consolidated net operating income	$	112,212		$	114,017		$	117,525		$	116,353		$	108,102

Consolidated net operating income - cash basis (4)	$	108,118		$	109,857		$	105,743		$	103,843		$	103,382

Operating margin (5)		67.2	%		66.8	%		66.7	%		66.9	%		67.9	%
Operating expense recovery (6)		76.3	%		77.6	%		75.1	%		73.7	%		75.4	%

(1)	For a definition and discussion of net operating income, see page 37.

(2)	Includes gain on sale of 9911 Belward Campus Drive property in December 2014.

(3)	Includes lease termination income, see page 11 for detail.

(4)	Consolidated net operating income - cash basis is calculated as (consolidated net operating income - straight line rents - fair value lease revenue - lease incentive revenue - bad debt expense - other revenue).

(5)	Operating margin is calculated as ((rental revenues + tenant recovery revenues - rental operations) / (rental revenues + tenant recovery revenues)).

(6)	Operating expense recovery is calculated as (tenant recovery revenues / rental operations).

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INTEREST EXPENSE

DECEMBER 31, 2014

(In thousands)


	Three Months Ended
	12/31/14			9/30/14			6/30/14			3/31/14			12/31/13
Mortgage notes payable	$	6,253		$	6,156		$	5,982		$	11,593		$	11,699
Exchangeable senior notes		917			1,241			1,688			1,688			1,688
Unsecured senior notes		12,959			12,959			12,288			10,334			10,334
Unsecured senior term loan		1,717			1,785			1,791			1,995			2,009
Unsecured line of credit		1,786			1,793			2,112			2,076			1,767
Line of credit fees		460			460			471			563			576
Derivative instruments		860			895			923			859			867

Interest expense, net - cash basis	$	24,952		$	25,289		$	25,255		$	29,108		$	28,940

Non-cash interest expense:
Amortization of fair-value of debt acquired		(548	)		(665	)		(631	)		(535	)		(509	)
Amortization of debt discounts		331			327			302			230			233
Amortization of deferred loan costs		1,433			1,451			1,707			1,509			1,504
Amortization of deferred interest costs		1,670			1,677			1,684			1,691			1,698
Amortization of put/call and preferred returns		229			256			237			199			178

Non-cash debt adjustments		3,115			3,046			3,299			3,094			3,104
Capitalized interest		(6,143	)		(6,120	)		(5,423	)		(4,192	)		(4,207	)

Interest expense, net	$	21,924		$	22,215		$	23,131		$	28,010		$	27,837

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COVERAGE RATIOS (1)

DECEMBER 31, 2014

(In thousands, except ratio amounts)


	Three Months Ended
	12/31/14			9/30/14			6/30/14			3/31/14			12/31/13
Interest coverage ratio
Adjusted EBITDA	$	102,167		$	107,180		$	105,717		$	99,787		$	97,735
Interest expense:
Interest expense, net		21,924			22,215			23,131			28,010			27,837
Interest expense - unconsolidated partnerships		184			200			240			238			244
Amortization of deferred interest costs		(1,670	)		(1,677	)		(1,684	)		(1,691	)		(1,698	)
Amortization of deferred loan costs		(1,433	)		(1,451	)		(1,707	)		(1,509	)		(1,504	)
Amortization of debt discounts		(331	)		(327	)		(302	)		(230	)		(233	)
Amortization of fair-value of debt acquired		548			665			631			535			509

Total interest expense	$	19,222		$	19,625		$	20,309		$	25,353		$	25,155

Interest coverage ratio		5.3			5.5			5.2			3.9			3.9

Fixed charge coverage ratio
Adjusted EBITDA	$	102,167		$	107,180		$	105,717		$	99,787		$	97,735
Fixed charges:
Interest expense, net		21,924			22,215			23,131			28,010			27,837
Interest expense - unconsolidated partnerships		184			200			240			238			244
Amortization of deferred interest costs		(1,670	)		(1,677	)		(1,684	)		(1,691	)		(1,698	)
Amortization of deferred loan costs		(1,433	)		(1,451	)		(1,707	)		(1,509	)		(1,504	)
Amortization of debt discounts		(331	)		(327	)		(302	)		(230	)		(233	)
Amortization of fair-value of debt acquired		548			665			631			535			509
Principal payments		2,080			2,020			1,977			2,729			2,705

Total fixed charges	$	21,302		$	21,645		$	22,286		$	28,082		$	27,860

Fixed charge coverage ratio		4.8			5.0			4.7			3.6			3.5

(1)	For a discussion of coverage ratios, see page 37.

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DEBT SUMMARY

DECEMBER 31, 2014

(Dollars in thousands)


	Stated Rate			Effective Rate			Principal Balance		Unamortized Premium / (Discount)			Carrying Value		Maturity Date
Consolidated Debt:
Mortgage Notes Payable:
9900 Belward Campus Drive		5.64	%		3.99	%	$	10,486	$	437		$	10,923		07/17
9901 Belward Campus Drive		5.64	%		3.99	%		12,913		536			13,449		07/17
100 College Street		2.40	%		2.40	%		82,210		—			82,210		08/16
4320 Forest Park Avenue		4.00	%		2.70	%		21,000		—			21,000		06/15
300 George Street		6.20	%		4.91	%		45,052		3,664			48,716		07/25
Hershey Center for Applied Research		6.15	%		4.71	%		12,938		1,278			14,216		05/27
500 Kendall Street (Kendall D)		6.38	%		5.45	%		55,545		1,582			57,127		12/18
Shady Grove Road		5.97	%		5.97	%		141,131		—			141,131		09/16
University of Maryland BioPark I		5.93	%		4.69	%		16,056		1,306			17,362		05/25
University of Maryland BioPark II		5.20	%		4.33	%		61,905		3,475			65,380		09/21
University of Maryland BioPark Garage		5.20	%		4.33	%		4,660		262			4,922		09/21
University of Miami Life Science & Technology Park		4.00	%		2.89	%		20,000		321			20,321		02/16

Total / Weighted-Average on Mortgage Notes Payable		5.15	%		4.54	%		483,896		12,861			496,757
Unsecured Fixed Rate Debt:
Unsecured Exchangeable Senior Notes Due 2030 (1)		3.75	%		3.75	%		95,678		—			95,678		01/15
Unsecured Senior Notes Due 2016		3.85	%		3.99	%		400,000		(696	)		399,304		04/16
Unsecured Senior Notes Due 2019		2.63	%		2.72	%		400,000		(2,126	)		397,874		05/19
Unsecured Senior Notes Due 2020		6.13	%		6.27	%		250,000		(1,550	)		248,450		04/20
Unsecured Senior Notes Due 2022		4.25	%		4.36	%		250,000		(1,725	)		248,275		07/22
Unsecured Variable Rate Debt:
Unsecured Senior Term Loan Due 2017 - U.S. Dollar (2)		1.57	%		2.39	%		243,596		—			243,596		03/17
Unsecured Senior Term Loan Due 2017 - GBP (3)		1.90	%		2.14	%		155,730		—			155,730		03/17
Unsecured Senior Term Loan Due 2018 (4)		1.36	%		1.67	%		350,000		—			350,000		03/18
Unsecured Line of Credit (5)		1.27	%		1.27	%		84,000		—			84,000		03/18

Total / Weighted-Average on Consolidated Debt		3.43	%		3.50	%	$	2,712,900	$	6,764		$	2,719,664

Share of Unconsolidated Partnership Debt:
BioPark Fremont (50%) (fixed)		3.75	%		3.70	%		1,401		6			1,407		05/15
PREI Secured Loan (20%) (variable)		2.21	%		2.21	%		27,795		—			27,795		08/15

Total / Weighted-Average on Share of Unconsolidated Partnership Debt		2.28	%		2.28	%		29,196		6			29,202

Total / Weighted-Average on Consolidated and Share of Unconsolidated Partnership Debt		3.41	%		3.49	%	$	2,742,096	$	6,770		$	2,748,866

(1)

During the third quarter 2014, at the request of the holders, 4,955,377 shares of common stock were issued in exchange for $84.3 million in aggregate principal of the Exchangeable Senior Notes. Subsequent to quarter end, 5,764,026 shares of common stock were issued in exchange for the remaining $95.7 million in aggregate principal of the Exchangeable Senior Notes.

(2)

The Company entered into interest rate swap agreements that effectively fix the interest rate on $200 million of the unsecured senior term loan facility due 2017 at 2.56% for the remaining term of the loan, subject to adjustments based on the Company’s credit ratings. Including the effect of these swaps, the weighted-average effective interest rate for the $243.6 million outstanding under the unsecured senior term loan facility due 2017 was 2.39% at December 31, 2014.

(3)

The Company amended the unsecured senior term loan facility and converted $156.4 million of outstanding borrowings into British pounds sterling equal to £100 million. The principal balance represents the dollar amount based on the exchange rate of $1.56 to £1.00 at the end of the quarter. The Company entered into interest rate swap agreements that effectively fix the interest rate on £100 million at 2.14% for the remaining term of the loan, subject to adjustments based on the Company’s credit ratings.

(4)	The Company entered into interest rate swap agreements effective October 1, 2013 that effectively fix the interest rate on $200 million of the unsecured senior term loan facility due 2018 at 1.90% for three years, subject to adjustments based on the Company’s credit ratings.

(5)	Effective rate excludes facility fee of 20 bps on the entire capacity of the unsecured line of credit, which equals approximately $450,000 per quarter.

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DEBT MATURITIES

DECEMBER 31, 2014

(In thousands)

Weighted-average debt maturity is 3.7 years⁽¹⁾ for consolidated debt (excluding extension options).


	2015		2016		2017		2018		2019		Thereafter		Total
Consolidated debt:
Mortgage Notes Payable:
Mortgage notes payable	$	31,642	$	250,618	$	32,306	$	47,804	$	5,724	$	115,802	$	483,896
Unsecured debt:
Unsecured exchangeable senior notes due 2030 (2)		95,678		—		—		—		—		—		95,678
Unsecured senior notes due 2016		—		400,000		—		—		—		—		400,000
Unsecured senior notes due 2019		—		—		—		—		400,000		—		400,000
Unsecured senior notes due 2020		—		—		—		—		—		250,000		250,000
Unsecured senior notes due 2022		—		—		—		—		—		250,000		250,000
Unsecured senior term loan due 2017 - U.S. Dollar		—		—		243,596		—		—		—		243,596
Unsecured senior term loan due 2017 - GBP		—		—		155,730		—		—		—		155,730
Unsecured senior term loan due 2018		—		—		—		350,000		—		—		350,000
Unsecured line of credit		—		—		—		84,000		—		—		84,000

Total unsecured debt		95,678		400,000		399,326		434,000		400,000		500,000		2,229,004
Total consolidated debt	$	127,320	$	650,618	$	431,632	$	481,804	$	405,724	$	615,802	$	2,712,900

Share of unconsolidated partnership debt:
BioPark Fremont (50%) (fixed)		1,401		—		—		—		—		—		1,401
PREI secured loan (20%) (variable) (3)		27,795		—		—		—		—		—		27,795

Share of total unconsolidated partnership debt	$	29,196	$	—	$	—	$	—	$	—	$	—	$	29,196

Total consolidated and share of unconsolidated partnership debt	$	156,516	$	650,618	$	431,632	$	481,804	$	405,724	$	615,802	$	2,742,096

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(1)	Excludes Exchangeable Senior Notes.

(2)

(3)	The maturity date of the PREI secured loan may be extended to August 2016 after satisfaction of certain conditions and payment of an extension fee.

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COMMON STOCK DATA

DECEMBER 31, 2014

(Shares in thousands)


	Three Months Ended
Summary of Common Shares	12/31/14			09/30/14			06/30/14			03/31/14			12/31/13
Earnings per share
Weighted-average common shares outstanding		196,018			194,023			191,003			190,906			190,664
Weighted-average OP and LTIP units outstanding		5,405			5,405			5,405			5,410			5,416
Dilutive effect of performance units		—			147			392			229			38
Dilutive effect of restricted stock		1,427			—			—			—			—
Dilutive effect of exchangeable senior notes due 2030		5,678			—			—			—			—

Diluted common shares - EPS		208,528			199,575			196,800			196,545			196,118

Funds from operations
Weighted-average common shares outstanding		196,018			194,023			191,003			190,906			190,664
Weighted-average OP and LTIP units outstanding		5,405			5,405			5,405			5,410			5,416
Dilutive effect of performance units		—			147			392			229			38
Dilutive effect of restricted stock		1,427			1,485			1,509			1,511			1,446
Dilutive effect of exchangeable senior notes due 2030		5,678			7,589			10,579			10,526			10,405

Diluted common shares - FFO		208,528			208,649			208,888			208,582			207,969

Closing common shares, OP and LTIP units outstanding		202,847			202,860			197,931			197,908			197,531
High price	$	22.03		$	22.62		$	22.47		$	20.89		$	20.56
Low price	$	19.87		$	19.92		$	19.94		$	17.98		$	17.97
Average closing price	$	21.30		$	21.73		$	21.24		$	19.72		$	18.95
Closing price	$	21.54		$	20.20		$	21.83		$	20.49		$	18.12
Dividends per share - annualized (1)	$	1.04		$	1.00		$	1.00		$	1.00		$	1.00
Closing dividend yield - annualized (1)		4.8	%		5.0	%		4.6	%		4.9	%		5.5	%


Dividends per Share	12/31/14			09/30/14			06/30/14			03/31/14			12/31/13
Common Stock - BMR (1)
Amount	$	0.26		$	0.25		$	0.25		$	0.25		$	0.25
Declared		December 10, 2014			September 16, 2014			June 16, 2014			March 17, 2014			December 12, 2013
Record		December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013
Paid		January 15, 2015			October 15, 2014			July 15, 2014			April 15, 2014			January 15, 2014

(1)	Excludes the special dividend of $0.30 per share paid on December 29, 2014 to stockholders of record as of the close of business on December 22, 2014.

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MARKET SUMMARY

DECEMBER 31, 2014


				Current (1)									Expiration (2)
Market	Leased Square Feet			Annualized Base Rent			Percent of Annualized Base Rent			Annualized Base Rent per Leased Sq Ft			Annualized Base Rent		Percent of Annualized Base Rent			Annualized Base Rent per Leased Sq Ft
				(In thousands)									(In thousands)
Boston		3,201,697		$	178,100			32.8	%	$	55.63		$	189,092		30.1	%	$	59.06
San Francisco		2,777,591			70,910			13.1	%		25.53			86,667		13.8	%		31.20
San Diego		1,869,098			62,599			11.5	%		33.49			77,916		12.4	%		41.69
New York / New Jersey		1,592,696			56,575			10.4	%		35.52			69,394		11.1	%		43.57
Maryland		1,595,805			50,499			9.3	%		31.64			58,411		9.3	%		36.60
Pennsylvania		678,550			18,532			3.4	%		27.31			23,068		3.7	%		34.00
Cambridge, UK		512,425			18,269			3.4	%		35.65			18,269		2.9	%		35.65
North Carolina		1,000,454			17,444			3.2	%		17.44			22,206		3.5	%		22.20
Seattle		317,101			14,545			2.7	%		45.87			17,918		2.9	%		56.51
University Related - Other		2,124,426			55,705			10.2	%		26.22			64,685		10.3	%		30.45

Total portfolio / weighted-average		15,669,843		$	543,178			100.0	%	$	34.66		$	627,626		100.0	%	$	40.05


	Percent Leased
Market	Total Operating Portfolio			Active New Construction (3)			Active Redevelopment (3)			Unconsolidated Partnership Portfolio (4)
Boston		96.5	%		22.8	%		—			99.9	%
San Francisco		81.4	%		100.0	%		—			—
San Diego		93.6	%		—			—			100.0	%
New York / New Jersey		86.8	%		100.0	%		—			—
Maryland		92.1	%		—			—			—
Pennsylvania		75.9	%		—			—			—
Cambridge, UK		99.5	%		100.0	%		—			—
North Carolina		97.0	%		59.3	%		—			—
Seattle		72.9	%		37.8	%		—			—
University Related - Other		91.3	%		99.1	%		—			—

Total portfolio (5)		89.6	%		85.4	%		—			99.9	%

Total portfolio weighted-average leased % (6)		91.6	%		89.1	%		—			99.9	%

(1)	Current annualized base rent is the monthly contractual rent as of the current quarter ended, or if rent has not yet commenced, the first monthly rent payment due at each rent commencement date, multiplied by 12 months.

(2)	Annualized base rent at expiration is the monthly contractual rent as of date of expiration of the applicable lease (not including any extension option(s)), multiplied by 12 months.

(3)	See page 25 for detail of the consolidated portfolio and page 38 for definitions of terms.

(4)	See page 27 for detail of the unconsolidated partnership portfolio.

(5)	Calculated based on leased square feet divided by total square feet.

(6)	Calculated based on gross book value for each asset multiplied by the percentage leased.

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PROPERTY LISTING - CONSOLIDATED PORTFOLIO

DECEMBER 31, 2014


			Excluded From Same Property			Rentable Square		Percent of Rentable			Leased Square		Percent Leased
	Property	Acquisition Date	Analysis	Buildings		Feet		Sq Ft			Feet		12/31/14			9/30/14
	Boston
1	Albany Street	May 31, 2005			2		75,003		0.4	%		75,003		100.0	%		100.0	%
2	320 Bent Street	December 14, 2011			1		195,198		1.1	%		195,137		100.0	%		100.0	%
3	301 Binney Street	December 14, 2011			1		417,290		2.4	%		332,391		79.7	%		98.8	%
4	301 Binney Street Garage	December 14, 2011			1		528 Stalls		n/a			384 Stalls		100.0	%		100.0	%
5	210 Broadway	February 9, 2012			1		64,812		0.4	%		64,812		100.0	%		100.0	%
6	Center for Life Science \| Boston	November 17, 2006			1		704,159		4.1	%		696,331		98.9	%		98.9	%
7	Charles Street	April 7, 2006			1		47,912		0.3	%		47,912		100.0	%		100.0	%
8	320 Charles Street	June 18, 2013			1		99,513		0.6	%		99,513		100.0	%		100.0	%
9	Coolidge Avenue	April 5, 2005			1		37,684		0.2	%		34,580		91.8	%		91.8	%
10	21 Erie Street	May 31, 2005			1		48,627		0.3	%		48,627		100.0	%		100.0	%
11	40 Erie Street	May 31, 2005			1		100,854		0.6	%		100,854		100.0	%		100.0	%
12	47 Erie Street Parking Structure	May 31, 2005			1		447 Stalls		n/a			322 Stalls		73.2	%		73.2	%
13	Fresh Pond Research Park	April 5, 2005			6		90,702		0.5	%		89,176		98.3	%		98.3	%
14	50 Hampshire Street	February 9, 2012			1		183,052		1.1	%		183,052		100.0	%		100.0	%
15	60 Hampshire Street	February 9, 2012	ü		1		41,257		0.2	%		35,703		86.5	%		86.5	%
16	Kendall Crossing Apartments	December 14, 2011			1		37 Apts.		n/a			35 Apts.		94.7	%		97.6	%
17	450 Kendall Street (Kendall G)	May 31, 2011	ü		1		63,520		0.4	%		14,511		22.8	%		—
18	500 Kendall Street (Kendall D)	May 31, 2005			1		349,325		2.0	%		346,535		99.2	%		98.5	%
19	675 W. Kendall Street (Kendall A)	May 31, 2005			1		302,919		1.8	%		302,919		100.0	%		100.0	%
20	Sidney Street	May 31, 2005			1		191,904		1.1	%		191,904		100.0	%		100.0	%
21	Vassar Street	May 31, 2005			1		60,845		0.4	%		60,845		100.0	%		100.0	%

	Total Boston				27		3,074,576		17.9	%		2,919,805		95.0	%		97.0	%

	San Francisco
22	Ardentech Court	November 18, 2004			1		55,588		0.3	%		55,588		100.0	%		100.0	%
23	Ardenwood Venture (1) (5)	June 14, 2006			1		72,500		0.4	%		72,500		100.0	%		100.0	%
24	Bayshore Boulevard	August 17, 2004			3		183,344		1.1	%		183,344		100.0	%		100.0	%
25	Bridgeview Technology Park I	September 10, 2004			2		201,567		1.2	%		106,694		52.9	%		52.9	%
26	Bridgeview Technology Park II	March 16, 2005			1		50,400		0.3	%		50,400		100.0	%		100.0	%
27	550 Broadway Street	April 27, 2012			1		71,239		0.4	%		71,239		100.0	%		100.0	%
28	Dumbarton Circle	May 27, 2005			1		44,000		0.3	%		44,000		100.0	%		100.0	%
29	Gateway Business Park (5)	October 26, 2010			4		176,503		1.0	%		76,272		43.2	%		82.2	%
30	Industrial Road	August 17, 2004			1		175,144		1.0	%		175,144		100.0	%		100.0	%
31	Kaiser Drive	August 25, 2005			1		87,953		0.5	%		71,215		81.0	%		81.0	%
32	Lincoln Centre (5)	March 20, 2013	ü		2		360,000		2.1	%		360,000		100.0	%		—
33	Pacific Industrial Center	July 11, 2006			1		305,026		1.8	%		263,624		86.4	%		85.9	%
34	Pacific Research Center North	July 11, 2006			6		661,245		3.9	%		523,491		79.2	%		79.2	%
35	Pacific Research Center South (5)	July 11, 2006			3		423,246		2.5	%		263,543		62.3	%		62.3	%
36	Science Center at Oyster Point	October 26, 2010			2		204,887		1.2	%		204,887		100.0	%		100.0	%
37	Woodside Technology Park	February 28, 2013			3		255,650		1.5	%		255,650		100.0	%		100.0	%

	Total San Francisco				33		3,328,292		19.5	%		2,777,591		83.5	%		83.7	%

	San Diego
38	Balboa Avenue	August 13, 2004			1		35,344		0.2	%		35,344		100.0	%		100.0	%
39	Bernardo Center Drive	August 13, 2004			1		61,286		0.4	%		61,286		100.0	%		100.0	%
40	Coast 9	October 15, 2010			9		162,074		0.9	%		137,062		84.6	%		84.6	%
41	4570 Executive Drive	September 17, 2010			1		125,219		0.7	%		125,219		100.0	%		100.0	%
42	Faraday Avenue	September 19, 2005			1		28,704		0.2	%		28,704		100.0	%		100.0	%
43	Gazelle Court	March 30, 2010			1		176,000		1.0	%		176,000		100.0	%		100.0	%
44	3525 John Hopkins Court	December 28, 2010			1		48,306		0.3	%		48,306		100.0	%		100.0	%
45	3545-3575 John Hopkins Court	August 16, 2006			1		72,192		0.4	%		61,173		84.7	%		87.9	%

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PROPERTY LISTING - CONSOLIDATED PORTFOLIO

DECEMBER 31, 2014


			Excluded From Same Property			Rentable Square		Percent of Rentable			Leased Square		Percent Leased
	Property	Acquisition Date	Analysis	Buildings		Feet		Sq Ft			Feet		12/31/14			9/30/14
	San Diego (Continued)
46	6114-6154 Nancy Ridge Drive	May 2, 2007			3		196,557		1.1	%		196,557		100.0	%		100.0	%
47	6122-6126 Nancy Ridge Drive	April 25, 2012			1		68,000		0.4	%		68,000		100.0	%		100.0	%
48	6828 Nancy Ridge Drive	April 21, 2005			1		42,138		0.2	%		42,138		100.0	%		100.0	%
49	Pacific Center Boulevard	August 24, 2007			2		66,745		0.4	%		66,745		100.0	%		100.0	%
50	Road to the Cure	December 14, 2006			1		67,998		0.4	%		67,998		100.0	%		100.0	%
51	San Diego Science Center	October 21, 2004			1		105,364		0.6	%		88,023		83.5	%		81.6	%
52	10240 Science Center Drive	September 23, 2010			1		49,347		0.3	%		49,347		100.0	%		100.0	%
53	10255 Science Center Drive	September 24, 2004			1		53,740		0.3	%		53,740		100.0	%		100.0	%
54	Sorrento Plaza	December 18, 2010			2		31,184		0.2	%		31,184		100.0	%		100.0	%
55	Sorrento Valley Boulevard	December 7, 2006			1		54,924		0.3	%		—		—			—
56	11388 Sorrento Valley Road	September 10, 2010			1		35,940		0.2	%		35,940		100.0	%		100.0	%
57	Summers Ridge	June 8, 2012			—		—		n/a			—		100.0	%		100.0	%
58	Torreyana Road	March 22, 2007			1		81,204		0.5	%		81,204		100.0	%		100.0	%
59	9865 Towne Centre Drive	August 12, 2004			2		94,866		0.6	%		94,866		100.0	%		100.0	%
60	9885 Towne Centre Drive	August 12, 2004			2		104,870		0.6	%		104,870		100.0	%		100.0	%
61	Waples Street	March 1, 2005			1		50,055		0.3	%		40,746		81.4	%		43.9	%
62	Wateridge Circle	November 1, 2011			3		106,490		0.6	%		101,783		95.6	%		95.6	%

	Total San Diego				40		1,918,547		11.1	%		1,796,235		93.6	%		92.7	%

	New York / New Jersey
63	Ardsley Park	June 23, 2011			5		207,855		1.2	%		185,905		89.4	%		89.4	%
64	Graphics Drive	March 17, 2005			1		72,300		0.4	%		46,386		64.2	%		64.2	%
65	Landmark at Eastview (5)	August 12, 2004			5		800,671		4.7	%		652,304		81.5	%		81.5	%
66	Landmark at Eastview II	August 12, 2004			3		360,520		2.1	%		360,520		100.0	%		100.0	%
67	Landmark at Eastview III	August 12, 2004	ü		2		297,000		1.7	%		297,000		100.0	%		100.0	%
68	One Research Way	May 31, 2006			1		50,581		0.3	%		50,581		100.0	%		100.0	%

	Total New York / New Jersey				17		1,788,927		10.4	%		1,592,696		89.0	%		89.0	%

	Maryland
69	Beckley Street	December 17, 2004			1		77,225		0.4	%		77,225		100.0	%		100.0	%
70	9900 Belward Campus Drive	July 18, 2012			1		49,317		0.3	%		41,816		84.8	%		84.8	%
71	9901 Belward Campus Drive	July 18, 2012			1		57,152		0.3	%		57,110		99.9	%		99.9	%
72	9920 Belward Campus Drive	May 8, 2007			1		51,181		0.3	%		51,181		100.0	%		100.0	%
73	9704 Medical Center Drive (5)	May 3, 2010			1		122,600		0.7	%		122,600		100.0	%		100.0	%
74	9708-9714 Medical Center Drive	May 3, 2010			3		92,125		0.5	%		49,910		54.2	%		54.2	%
75	1701 / 1711 Research Boulevard (5)	May 9, 2011	ü		1		104,743		0.6	%		104,743		100.0	%		100.0	%
76	Shady Grove Road (5)	May 24, 2006			4		635,058		3.7	%		635,058		100.0	%		100.0	%
77	Tributary Street	December 17, 2004			1		91,592		0.5	%		91,592		100.0	%		100.0	%
78	University of Maryland BioPark I	May 31, 2013			1		76,542		0.4	%		75,567		98.7	%		98.5	%
79	University of Maryland BioPark II	May 31, 2013			1		235,333		1.4	%		229,498		97.5	%		98.0	%
80	University of Maryland BioPark Garage	May 31, 2013			1		638 Stalls		n/a			638 Stalls		100.0	%		100.0	%
81	50 West Watkins Mill Road	May 7, 2010			1		57,410		0.3	%		20,000		34.8	%		34.8	%
82	55 / 65 West Watkins Mill Road	February 23, 2010			2		82,405		0.5	%		39,505		47.9	%		100.0	%

	Total Maryland				20		1,732,683		9.9	%		1,595,805		92.1	%		95.4	%

	Pennsylvania
83	George Patterson Boulevard	October 28, 2005			1		71,500		0.4	%		71,500		100.0	%		100.0	%
84	Hershey Center for Applied Research	May 31, 2013			1		80,867		0.5	%		77,392		95.7	%		96.9	%
85	3711 Market Street (2)	May 31, 2013			1		154,793		0.9	%		148,938		96.2	%		95.5	%
86	3737 Market Street (3)	May 31, 2013	ü		1		334,305		1.9	%		275,454		82.4	%		82.4	%
87	Phoenixville Pike	April 5, 2005			1		104,400		0.6	%		43,659		41.8	%		41.8	%
88	Spring Mill Drive	July 20, 2006			1		76,561		0.4	%		61,607		80.5	%		80.5	%

LOGO

PROPERTY LISTING - CONSOLIDATED PORTFOLIO

DECEMBER 31, 2014


			Excluded From Same Property			Rentable Square		Percent of Rentable			Leased Square		Percent Leased
	Property	Acquisition Date	Analysis	Buildings		Feet		Sq Ft			Feet		12/31/14			9/30/14
	Pennsylvania (Continued)
89	900 Uniqema Boulevard	January 13, 2006			1		11,293		0.1	%		—		—			—
90	1000 Uniqema Boulevard	September 30, 2005			1		59,821		0.3	%		—		—			—

	Total Pennsylvania				8		893,540		5.1	%		678,550		75.9	%		75.9	%

	Cambridge, UK
91	Granta Park (5)	June 12, 2012			11		472,234		2.8	%		470,015		99.5	%		99.5	%
92	430 Cambridge Science Park	May 15, 2014	ü		1		42,410		0.2	%		42,410		100.0	%		100.0	%

	Total Cambridge, UK				12		514,644		3.0	%		512,425		99.6	%		99.6	%

	North Carolina
93	Paramount Parkway	July 20, 2010			1		61,603		0.4	%		61,603		100.0	%		100.0	%
94	Patriot Drive	December 17, 2010			1		48,394		0.3	%		48,394		100.0	%		100.0	%
95	Piedmont Triad Research - Wake 90	May 31, 2013	ü		1		475,742		2.8	%		449,921		94.6	%		87.3	%
96	Wake 60	December 9, 2014	ü		2		283,250		1.6	%		167,947		59.3	%		—
97	Wake Forest Biotech Place	May 31, 2013			1		242,000		1.4	%		242,000		100.0	%		100.0	%
98	Weston Parkway	December 17, 2010			1		30,589		0.2	%		30,589		100.0	%		100.0	%

	Total North Carolina				7		1,141,578		6.7	%		1,000,454		87.6	%		92.9	%

	Seattle
99	Elliott Avenue	August 24, 2004			1		151,194		0.9	%		96,781		64.0	%		56.0	%
100	500 Fairview Avenue	January 28, 2008	ü		1		122,702		0.7	%		46,407		37.8	%		20.5	%
101	530 Fairview Avenue	January 12, 2006			1		101,118		0.6	%		101,118		100.0	%		100.0	%
102	Monte Villa Parkway	August 17, 2004			1		51,000		0.3	%		30,167		59.2	%		59.2	%
103	217th Place (5)	November 21, 2006			1		67,799		0.4	%		42,628		62.9	%		62.9	%

	Total Seattle				5		493,813		2.9	%		317,101		64.2	%		57.5	%

	University Related - Other
104	BRDG Park at Danforth Plant Science Center	May 31, 2013			1		109,731		0.6	%		99,386		90.6	%		90.6	%
105	100 College Street (4)	April 4, 2014	ü		1		510,419		3.0	%		505,683		99.1	%		99.1	%
106	4320 Forest Park Avenue	May 31, 2013			1		152,403		0.9	%		152,403		100.0	%		100.0	%
107	300 George Street (4)	April 4, 2014	ü		1		518,940		3.0	%		512,349		98.7	%		98.7	%
108	Heritage @ 4240	May 31, 2013	ü		1		185,207		1.1	%		164,925		89.0	%		89.0	%
109	Innovation Research Park at ODU I	May 31, 2013			1		95,634		0.6	%		86,102		90.0	%		90.0	%
110	Innovation Research Park at ODU II	May 31, 2013			1		95,634		0.6	%		79,072		82.7	%		82.7	%
111	Trade Centre Avenue	August 9, 2006			2		78,023		0.5	%		78,023		100.0	%		100.0	%
112	University of Miami Life Science & Technology Park	May 31, 2013			1		258,681		1.5	%		167,321		64.7	%		64.4	%
113	University Tech Park at IIT	May 31, 2013			1		129,178		0.8	%		129,178		100.0	%		100.0	%
114	Walnut Street	July 7, 2006			4		149,984		0.9	%		149,984		100.0	%		100.0	%

	Total University Related - Other				15		2,283,834		13.5	%		2,124,426		93.0	%		93.0	%

	Total				184		17,170,434		100.0	%		15,315,088		89.2	%		90.2	%

(1)	The Company owns 87.5% of the limited liability company that owns the Ardenwood Venture property.

(2)	The Company owns 60% of the limited liability company that owns the 3711 Market Street property.

(3)	The Company owns 68% of the limited liability company that owns the 3737 Market Street property.

(4)	The Company owns 93% of the limited liability companies that own the 100 College Street and 300 George Street properties.

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DEVELOPMENT

DECEMBER 31, 2014

(Dollars in thousands)


Property	Market	Rentable Square Feet		Percent Pre-Leased			Investment to Date (1)		Estimated Total Investment (2)		Estimated In-Service Date (3)
Active New Construction:
100 College Street	University Related - Other		510,419		99.1	%	$	110,200	$	191,000	Q1 2016
Landmark at Eastview III	New York / New Jersey		297,000		100.0	%		113,600		168,900	Q4 2015
Lincoln Centre (4)	San Francisco		360,000		100.0	%		27,800		134,000	Q3 2017 & Q3 2018
500 Fairview Avenue	Seattle		122,702		37.8	%		9,100		73,000	Q1 2016
Wake 60 (5)	North Carolina		283,250		59.3	%		3,625		51,300	Q3 2016
450 Kendall Street (Kendall G)	Boston		63,520		22.8	%		31,200		45,500	Q2 2015
430 Cambridge Science Park	United Kingdom		42,410		100.0	%		4,000		22,700	Q3 2015

Total / weighted-average			1,679,301		85.4	%	$	299,525	$	686,400


	Estimated
Market	Land Bank
Pennsylvania		2,818,000
San Francisco		2,145,000
Maryland		800,000
San Diego		300,000
University Related - Other		300,000
North Carolina		274,000
New York / New Jersey		193,000
Cambridge, UK		138,000
Seattle		50,000

Total		7,018,000

(1)	Includes amounts paid for acquiring the property, landlord improvements and tenant improvement allowances, but excludes any amounts accrued, and payroll, interest, ground rent. or operating expenses capitalized, through December 31, 2014.

(2)	Includes construction costs associated with speculative leasing.

(3)

Management’s estimate of the time in which construction is substantially completed. A project is considered substantially complete and held available for occupancy upon the completion of tenant improvements, but no later than one year from cessation of major construction activity. Upon completion, management expects the property to enter the Same Property Portfolio one year subsequent to the in-service date.

(4)	Phase I of the project is comprised of 200,000 square feet and is estimated to be substantially completed in Q3 2017. Phase II comprising 160,000 square feet is estimated to be substantially completed in Q3 2018.

(5)	Investment to date of $3.6 million is fully offset by tax credit funding received during the quarter. Estimated Total Investment is net of tax credit benefits.

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CAPITAL EXPENDITURES

DECEMBER 31, 2014

(Dollars in thousands)


Capital Expenditures:			Three Months Ended
			12/31/14			9/30/14			6/30/14			3/31/14			12/31/13

Active new construction (1)			$	41,923		$	71,598		$	46,931		$	40,906		$	59,626
Land bank				6,139			6,998			3,747			3,940			4,024
Active redevelopment				3,251			6,391			3,349			1,185			2,219
Tenant improvements - first generation (2)				10,386			13,304			8,614			9,175			8,257
Recurring capital expenditures and second generation tenant improvements (2) (3)				22,591			17,007			21,553			7,731			8,028
Other capital				3,217			5,729			3,095			6,906			5,254

Total capital expenditures			$	87,507		$	121,027		$	87,289		$	69,843		$	87,408


Capitalized Interest:	Investment		Three Months Ended
	to Date (4)		12/31/14			9/30/14			6/30/14			3/31/14			12/31/13

Active new construction	$	299,525	$	2,634		$	1,983		$	2,043		$	1,284		$	969
Active redevelopment		2,001		—			96			64			64			330
Recently delivered development projects (5)		46,016		373			738			282			592			943
Other portfolio improvements (6)		186,416		1,506			1,600			1,405			1,018			826
Land Bank		166,328		1,630			1,703			1,629			1,234			1,139

Total	$	700,286	$	6,143		$	6,120		$	5,423		$	4,192		$	4,207

Average interest rate capitalized				3.96	%		3.97	%		3.94	%		4.64	%		4.75	%

(1)	Projects include funds from tax credit dollars received during the quarter.

(2)	For definitions of first and second generation leases, see page 38.

(3)	Includes revenue enhancing and non-revenue enhancing recurring capital expenditures. For a definition of recurring capital expenditures, see page 38.

(4)	Includes amounts paid for acquiring the property, landlord improvements and tenant improvement allowances, but for Active New Construction and Active Redevelopment properties excludes any amounts accrued, and payroll, interest or operating expenses capitalized, through December 31, 2014.

(5)	Includes Heritage @4240, 3737 Market Street and Piedmont Triad Research - Wake 90.

(6)	Includes improvements on operating properties, including major tenant improvement projects on properties which are not considered to be in Active New Construction, Active Redevelopment or Land Bank during the three months ended December 31, 2014.

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PROPERTY LISTING - UNCONSOLIDATED PARTNERSHIPS

DECEMBER 31, 2014

(Dollars in thousands)


				Rentable		Leased
				Square		Square		Percent Leased
Property	Acquisition Date	Buildings		Feet		Feet		12/31/14			9/30/14			Market
McKellar Court
McKellar Court	September 30, 2004		1		72,863		72,863		100.0	%		100.0	%	San Diego
PREI
650 E. Kendall Street (Kendall B)	April 4, 2007		1		282,217		281,892		99.9	%		99.9	%	Boston
350 E. Kendall Street Garage (Kendall F)	April 4, 2007		1		1,409 Stalls		1,136 Stalls		100.0	%		100.0	%	Boston


Total assets	$	284,663
Total debt (1)		152,056
Current annualized base rent		17,911
BioMed’s net investment in unconsolidated partnerships	$	35,291
BioMed’s pro rata share of debt		29,196
BioMed ownership percentage		20	%

(1)	McKellar Court’s debt is payable to BioMed Realty, L.P. and is included in investments in unconsolidated partnerships on the Company’s consolidated balance sheet.

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LEASE EXPIRATIONS

DECEMBER 31, 2014

The weighted-average remaining lease term is 8.2 years for the total portfolio.


						Current (1)							Expiration (2)							GAAP
Expiration	Leased Square Feet		Percent of Leased Square Feet			Annualized Base Rent		Percent of Annualized Base Rent			Annualized Base Rent per Leased Square Feet		Annualized Base Rent		Percent of Annualized Base Rent			Annualized Base Rent per Leased Square Feet		Annualized Base Rent		Percent of Annualized Base Rent			Annualized Base Rent per Leased Square Feet
						(In thousands)							(In thousands)							(In thousands)
Month-to-month		31,081		0.2	%	$	536		0.1	%	$	17.25	$	536		0.1	%	$	17.25	$	529		0.1	%	$	17.02
First quarter 2015		81,158		0.5	%		2,603		0.5	%		32.07		2,603		0.4	%		32.07		2,486		0.4	%		30.63
Second quarter 2015		262,106		1.7	%		9,206		1.7	%		35.12		9,416		1.5	%		35.92		9,297		1.7	%		35.47
Third quarter 2015		379,860		2.4	%		11,797		2.2	%		31.06		11,873		1.9	%		31.26		11,398		2.0	%		30.01
Fourth quarter 2015		63,920		0.4	%		1,628		0.3	%		25.47		1,628		0.3	%		25.47		1,530		0.3	%		23.94

2015		787,044		5.0	%		25,234		4.7	%		32.06		25,520		4.1	%		32.43		24,711		4.4	%		31.40
2016		1,063,528		6.8	%		42,997		7.9	%		40.43		44,223		7.0	%		41.58		39,731		7.1	%		37.36
2017		873,610		5.6	%		26,323		4.8	%		30.13		27,827		4.4	%		31.85		25,298		4.5	%		28.96
2018		1,857,072		11.9	%		82,367		15.2	%		44.35		84,990		13.5	%		45.77		76,140		13.7	%		41.00
2019		1,113,994		7.1	%		30,391		5.6	%		27.28		33,615		5.4	%		30.18		31,840		5.7	%		28.58
2020		743,735		4.7	%		24,876		4.6	%		33.45		26,394		4.2	%		35.49		24,351		4.4	%		32.74
2021		705,912		4.5	%		21,210		3.9	%		30.05		23,667		3.8	%		33.53		20,752		3.7	%		29.40
2022		360,422		2.3	%		10,376		1.9	%		28.79		12,596		2.0	%		34.95		10,823		1.9	%		30.03
2023		1,433,707		9.1	%		59,739		11.0	%		41.67		66,286		10.6	%		46.23		59,641		10.7	%		41.60
2024		628,544		4.0	%		19,268		3.5	%		30.65		23,454		3.7	%		37.31		20,365		3.7	%		32.40
Thereafter		6,071,194		38.8	%		199,861		36.8	%		32.92		258,518		41.2	%		42.58		221,911		40.1	%		36.55

Total / weighted-average		15,669,843		100.0	%	$	543,178		100.0	%	$	34.66	$	627,626		100.0	%	$	40.05	$	556,092		100.0	%	$	35.49

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(1)	Current annualized base rent is the monthly contractual rent as of the current quarter ended, or if rent has not yet commenced, the first monthly rent payment due at each rent commencement date, multiplied by 12 months.

(2)	Annualized base rent at expiration is the monthly contractual rent as of the date of expiration of the applicable lease (not including any extension option(s)), multiplied by 12 months.

(3)	For a definition of “forward leased”, see page 38.

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EXPIRATIONS BY MARKET

DECEMBER 31, 2014


	Leased Square Feet
Expiration	Boston		San Francisco		San Diego		New York/ New Jersey		Maryland		Pennsylvania		Cambridge, UK		North Carolina		Seattle		University/ Other		Total
Month-to-month		—		—		1,486		630		11,518		1,731		—		—		—		15,716		31,081
2015		284,319		114,034		165,226		8,433		31,498		45,280		24,441		16,492		—		97,321		787,044
2016		399,731		246,012		51,788		40,613		13,048		17,822		1,103		30,589		12,741		250,081		1,063,528
2017		141,927		170,784		161,739		145,581		127,288		32,452		28,057		7,853		11,390		46,539		873,610
2018		1,153,536		171,584		320,607		24,944		72,004		14,389		—		15,117		42,628		42,263		1,857,072
2019		130,876		200,885		98,611		82,124		269,929		87,497		25,245		8,932		—		209,895		1,113,994
2020		153,320		71,215		132,045		28,899		130,846		33,029		136,434		19,261		—		38,686		743,735
2021		67,968		230,311		8,365		40,914		45,434		76,092		160,290		71,663		—		4,875		705,912
2022		56,896		197,726		17,707		27,524		4,599		7,311		—		—		—		48,659		360,422
2023		563,964		525,667		239,871		—		33,843		—		26,294		—		—		44,068		1,433,707
2024		12,957		—		—		300,088		11,120		8,542		64,617		23,932		34,980		172,308		628,544
Thereafter		236,203		849,373		671,653		892,946		844,678		354,405		45,944		806,615		215,362		1,154,015		6,071,194

Total		3,201,697		2,777,591		1,869,098		1,592,696		1,595,805		678,550		512,425		1,000,454		317,101		2,124,426		15,669,843

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FUTURE LEASE COMMENCEMENTS

DECEMBER 31, 2014

(Dollars in thousands)


	Annualized Base Rent (1)
	Operating & Redevelopment				Development				Total
Expected Commencement Quarter (1)	GAAP (2)		Cash (3)		GAAP (2)		Cash (3)		GAAP (2)		Cash (3)
1Q15	$	9,646	$	6,140	$	—	$	—	$	9,646	$	6,140
2Q15		3,687		5,499		745		670		4,432		6,169
3Q15		6,504		9,284		1,711		—		8,215		9,284
4Q15		729		2,282		15,683		13,369		16,412		15,650
2016		375		1,918		18,663		18,945		19,038		20,864
2017		—		—		7,751		6,572		7,751		6,572
2018		—		—		5,850		—		5,850		—
2019		—		—		—		5,258		—		5,258

	$	20,941	$	25,123	$	50,404	$	44,813	$	71,345	$	69,936


	Leased Square Feet (1)
	Operating & Redevelopment				Development				Total
Expected Commencement Quarter (1)	GAAP (2)		Cash (3)		GAAP (2)		Cash (3)		GAAP (2)		Cash (3)
1Q15		277,183		215,833		—		—		277,183		215,833
2Q15		126,507		184,601		14,511		14,511		141,018		199,112
3Q15		245,237		299,301		42,410		—		287,647		299,301
4Q15		42,750		103,788		297,000		297,000		339,750		400,788
2016		20,137		78,113		720,037		762,447		740,174		840,560
2017		—		—		200,000		200,000		200,000		200,000
2018		—		—		160,000		—		160,000		—
2019		—		—		—		160,000		—		160,000

		711,814		881,636		1,433,958		1,433,958		2,145,772		2,315,594

(1)	Current estimates of future lease commencement timing. Actual results may vary from current estimates. Excludes unconsolidated joint ventures.

(2)	The annualized GAAP monthly rent (GABR).

(3)	The annualized first monthly cash rent payment due (CABR).

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20 LARGEST TENANTS

DECEMBER 31, 2014

BioMed’s properties were leased to 366 tenants.


	Tenant	Leased Square Feet		Percent of Leased Sq Ft			Annualized Base Rent Current (1) (In thousands)		Annualized Base Rent per Leased Sq Ft Current		Percent of Annualized Base Rent Current Total Portfolio			Lease Expiration
1	Regeneron Pharmaceuticals, Inc. (2)		1,003,366		6.4	%		41,868		41.73		7.7	%		Multiple
2	Vertex Pharmaceuticals Incorporated (3)		685,286		4.4	%		37,115		54.16		6.8	%		Multiple
3	Beth Israel Deaconess Medical Center, Inc.		362,364		2.3	%		26,823		74.02		4.9	%		July 2023
4	GlaxoSmithKline plc (4)		635,058		4.1	%		23,140		36.44		4.3	%		June 2026
5	Sanofi (5)		418,003		2.7	%		23,099		55.26		4.3	%		Multiple
6	Illumina, Inc. (6)		553,136		3.5	%		20,074		36.29		3.7	%		Multiple
7	Ironwood Pharmaceuticals, Inc.		311,952		2.0	%		15,411		49.40		2.8	%		February 2018
8	Children’s Hospital Corporation (7)		200,081		1.3	%		14,709		73.52		2.7	%		May 2023
9	Alexion Pharmaceuticals, Inc. (8)		413,545		2.6	%		10,428		25.22		1.9	%		Multiple
10	Wake Forest University (9)		529,147		3.4	%		9,640		18.22		1.8	%		Multiple
11	Baxter Healthcare Corporation		156,804		1.0	%		9,095		58.00		1.7	%		January 2027
12	MedImmune, Inc. (10)		245,808		1.6	%		8,271		33.65		1.5	%		Multiple
13	Array BioPharma, Inc. (11)		228,007		1.5	%		8,133		35.67		1.5	%		Multiple
14	Yale University (12)		397,402		2.5	%		8,007		20.15		1.5	%		Multiple
15	Arena Pharmaceuticals, Inc.		264,557		1.7	%		7,939		30.01		1.5	%		June 2027
16	Camp Dresser & McKee, Inc.		180,000		1.1	%		7,335		40.75		1.4	%		April 2015
17	Isis Pharmaceuticals, Inc. (13)		204,704		1.3	%		7,268		35.50		1.3	%		Multiple
18	Life Technologies Corporation		204,887		1.3	%		7,040		34.36		1.3	%		April 2028
19	Bristol-Myers Squibb Company (14)		224,275		1.4	%		6,644		29.62		1.2	%		Multiple
20	Momenta Pharmaceuticals, Inc.		104,678		0.7	%		6,176		59.00		1.1	%		September 2016

	Total / weighted-average (15)		7,323,060		46.8	%	$	298,215	$	40.72		54.9	%

(1)	Based on current annualized base rent. Current annualized base rent is the monthly contractual rent as of the current quarter ended, or if rent has not yet commenced, the first monthly rent payment due at each rent commencement date, multiplied by 12 months.

(2)

On April 3, 2013, the Company entered into a build-to-suit transaction to construct two new buildings pre-leased to Regeneron for a 15 year term totaling approximately 297,000 square feet at Landmark at Eastview. 2,833 square feet will expire in July 2015, 7,568 square feet in January 2017, 82,124 square feet in January 2019, 232,049 square feet in July 2024 and 678,792 square feet in July 2029.

(3)	81,204 square feet are leased with a subsidiary of Vertex Pharmaceuticals Incorporated. 292,758 square feet expire January 2016, 20,608 square feet expire May 2017, 290,716 square feet expire May 2018 and 81,204 square feet expire January 2019.

(4)	The Company’s tenant is Human Genome Sciences (HGS), a wholly owned subsidiary of GlaxoSmithKline plc (GSK). GSK has executed a payment guarantee with respect to rental payments due under the Company’s leases with HGS.

(5)	343,000 square feet expire August 2018 and 75,003 square feet expire October 2018.

(6)	28,057 square feet will expire in July 2017, 193,136 square feet in November 2024, 200,000 square feet in July 2032, and 160,000 square feet in July 2033.

(7)	This tenant guarantees rent on 49,866 square feet leased at the Center for Life Science \| Boston.

(8)	3,134 square feet expire January 2018 and 410,411 square feet expire January 2025.

(9)	242,000 square feet expire January 2028, 119,200 square feet expire April 2029, and 167,947 square feet expire in July 2031. Wake Forest University is the sole member of the tenant, Wake Forest University Health Sciences.

(10)	24,437 square feet expire July 2015, 21,576 square feet expire December 2015, 39,505 square feet expire January 2021 and 160,290 square feet expire in December 2021.

(11)	149,984 square feet expire July 2016 and 78,023 square feet expire August 2016.

(12)

9,330 square feet expire July 2015, 4,680 square feet expire in August 2015, 8,478 square feet expire June 2016, 10,578 square feet expire March 2018, 15,436 square feet expire September 2020, 20,143 square feet expire March 2022, 19,912 square feet expire June 2025, 4,796 square feet expire November 2025, 208,777 square feet expire May 2032 and 95,272 square feet expire March 2036.

(13)	176,000 square feet expire July 2031 and 28,704 square feet expire January 2032.

(14)	30,167 square feet expire April 2024 and 194,108 square feet expire June 2025.

(15)	Without regard to any early lease terminations and/or renewal options.

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SAME PROPERTY ANALYSIS (1)

DECEMBER 31, 2014

(Dollars in thousands)


	Same Property Portfolio									Development						New Properties					Other (2)						Total
Three Months Ended	12/31/14			12/31/13			% Change			12/31/14			12/31/13			12/31/14			12/31/13		12/31/14			12/31/13			12/31/14			12/31/13
Rentable square feet		13,830,939			13,830,939						2,820,555			1,874,276			518,940			—		n/a			n/a			17,170,434			15,705,215
Percent of total portfolio		80.6	%		88.1	%					16.4	%		11.9	%		3.0	%		—		n/a			n/a			100.0	%		100.0	%
Percent leased		89.2	%		88.9	%					87.4	%		80.3	%		98.7	%		—		n/a			n/a			89.2	%		87.9	%
Revenues:
Rental	$	109,343		$	109,588			(0.2	%)	$	5,343		$	2,478		$	2,767		$	—	$	4,520		$	5,982		$	121,973		$	118,048
Tenant recoveries		36,890			37,347			(1.2	%)		1,712			560			1,862			—		289			(310	)		40,753			37,597
Other revenues (3)		—			—			—			—			—			—			—		2,930			2,348			2,930			2,348

Total revenues		146,233			146,935			(0.5	%)		7,055			3,038			4,629			—		7,739			8,020			165,656			157,993
Expenses:
Rental operations		46,081			46,586			(1.1	%)		4,205			1,915			2,114			—		1,044			1,390			53,444			49,891

Net operating income	$	100,152		$	100,349			(0.2	%)	$	2,850		$	1,123		$	2,515		$	—	$	6,695		$	6,630		$	112,212		$	108,102

Less adjustments to cash basis (4)		248			(2,142	)		(111.6	%)		(1,156	)		58			(132	)		—		(3,054	)		(2,636	)		(4,094	)		(4,720	)

Net operating income - cash basis	$	100,400		$	98,207			2.2	%	$	1,694		$	1,181		$	2,383		$	—	$	3,641		$	3,994		$	108,118		$	103,382

Rental revenue - cash basis (5)	$	108,103		$	106,106			1.9	%	$	3,943		$	2,381		$	2,634		$	—	$	4,397		$	5,692		$	119,077		$	114,179

(1)

The Same Property portfolio includes properties in the operating portfolio that were stabilized or in lease up throughout the full quarter in both the current year and the prior year. Development includes properties that were entirely or primarily under active redevelopment or active new construction during the quarter for the current or prior year. New properties include properties that were not owned for the full quarter in the prior year.

(2)	Other includes legal entities performing corporate level functions and properties that were sold during the current or prior quarter, which includes revenue and operating expenses relating to 9911 Belward Campus Drive, which was sold on December 9, 2014.

(3)	Includes lease termination revenue of $2.8 million for the three months ended December 31, 2014 and interest income of $2.2 million for the three months ended December 31, 2013.

(4)	Adjustments to cash basis exclude adjustments to expenses accrued in rental operations, but include straight line rents, fair-value lease revenue, lease incentive revenue, bad debt expense and other revenue (including lease termination revenue).

(5)	Represents rents on a “cash-on-cash” basis.

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LEASING ACTIVITY (1)

DECEMBER 31, 2014


								Expiring GAAP					Current		GAAP
				Current		GAAP		Annualized					Annualized Base		Annualized Base
	Leased			Annualized		Annualized		Base Rent per			Forward-Leased		Rent per		Rent per
	Square			Base Rent per		Base Rent per		Leased Sq Ft			Square		Forward-		Forward-
	Feet			Leased Sq Ft		Leased Sq Ft		% Change			Feet		Leased Sq Ft		Leased Sq Ft
Leased Square Feet as of September 30, 2014		15,516,604												179,149
Dispositions		(289,912	)	$	79.82	$	82.75
Expirations		(423,634	)		46.30		41.41
Terminations		(9,189	)		20.74		24.34
Renewals and extensions		219,817			27.92		29.43		-0.2	%
New leases - 1st generation (2)		40,107			16.61		16.93
New leases - 2nd generation (2)		52,051			35.95		34.81		30.6	%		—	$	—	$	—
New leases - pre-leased (3)		563,999			29.29		33.44

Leased Square Feet as of December 31, 2014		15,669,843										179,149


	Three Months Ended
Leased Square Feet	12/31/14		9/30/14		6/30/14			3/31/14		12/31/13
Renewals and extensions		219,817		277,313		319,067			173,117		89,297
New leases		656,157		380,433		493,152			307,332		352,541

Gross Leasing Activity		875,974		657,746		812,219			480,449		441,838

Net Absorption (4)		443,151		219,664		(179,807	)		96,103		186,657

(1)	Leasing activity for leases signed during the periods presented, which may be different than the period of actual occupancy.

(2)	For definitions of first and second generation leases and forward-leases, see page 38.

(3)	For definitions of pre-leased leases, see page 38.

(4)	Net absorption is calculated as total square footage of new leases, renewals and extensions, and forward-lease deliveries, less expirations and terminated square feet for the given period.

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SQUARE FOOTAGE ROLLFORWARD

DECEMBER 31, 2014

(Dollars in thousands)


				Active New			Active
Rentable Square Footage	Operating			Construction			Redevelopment			Total
Rentable square footage as of September 30, 2014		16,093,690			1,034,398			41,257			17,169,345
Recently delivered construction and redevelopment (1)		41,257			—			(41,257	)		—
Acquisitions		—			283,250			—			283,250
Dispositions		(288,734	)		—			—			(288,734	)
New ground-up development		—			361,653			—			361,653

Rentable square footage as of December 31, 2014		15,846,213			1,679,301			—			17,525,514


				Active New			Active
Leased Square Footage	Operating			Construction			Redevelopment			Total
Leased square footage as of September 30, 2014		14,610,942			869,959			35,703			15,516,604
Recently delivered construction and redevelopment (1)		35,703			—			(35,703	)		—
Dispositions		(289,912	)		—			—			(289,912	)
Expirations		(423,634	)		—			—			(423,634	)
Terminations		(9,189	)		—			—			(9,189	)
Renewals and extensions		219,817			—			—			219,817
New leases - 1st generation (2)		40,107			—			—			40,107
New leases - 2nd generation (2)		52,051			—			—			52,051
New leases - pre-leased (3)		—			563,999			—			563,999

Leased square footage as of December 31, 2014		14,235,885			1,433,958			—			15,669,843


	Operating			Active New Construction			Active Redevelopment			Total
Gross leasing activity - 4Q14		311,975			563,999			—			875,974
Net absorption - 4Q14		(120,848	)		563,999			—			443,151
Leased percentage as of December 31, 2014 - consolidated properties		89.6	%		85.4	%		—			89.2	%
Leased percentage as of December 31, 2014 - all properties		89.8	%		85.4	%		—			89.4	%

Weighted-average leased percentage as of December 31, 2014 (4)		91.6	%		89.1	%		—			91.5	%

(1)	Includes delivery of 60 Hampshire Street property during the three months ended December 31, 2014.

(2)	For definitions of first and second generation leases and forward-leases, see page 38.

(3)	For definitions of pre-leased leases, see page 38.

(4)	Calculated based on gross book value for each asset multiplied by the percentage leased.

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TENANT IMPROVEMENTS, LEASING COMMISSIONS AND TENANT CONCESSIONS

DECEMBER 31, 2014


	Three Months Ended
	12/31/14		9/30/14		6/30/14		3/31/14		12/31/13
Renewals and Extensions (1)
Number of renewals		14		14		16		10		7
Square feet		219,817		277,313		319,067		173,117		89,297
Tenant improvement costs per square foot (2)	$	8.78	$	1.50	$	1.05	$	19.11		5.27
Leasing commission costs per square foot (2)		4.61		1.46		2.17		3.80		3.99
Tenant concession costs per square foot (2) (3)		2.26		0.02		—		—		0.97

Total tenant improvement, leasing commission, and tenant concession costs psf	$	15.65	$	2.99	$	3.59	$	22.91	$	10.23

New Leases - 1st Generation (4)
Number of leases		5		12		16		13		11
Square feet		40,107		152,380		193,532		133,811		63,231
Tenant improvement costs per square foot (2)	$	87.64	$	62.99	$	56.63	$	60.47	$	34.00
Leasing commission costs per square foot (2)		6.57		12.60		5.27		12.45		6.97
Tenant concession costs per square foot (2) (3)		10.67		0.31		7.49		5.24		0.77

Total tenant improvement, leasing commission, and tenant concession costs psf	$	104.88	$	75.90	$	69.39	$	78.16	$	41.74

New Leases - 2nd Generation (4)
Number of leases		11		21		28		36		16
Square feet		52,051		228,053		244,536		173,521		289,310
Tenant improvement costs per square foot (2)	$	23.59	$	87.14	$	37.34	$	103.64		34.60
Leasing commission costs per square foot (2)		5.16		12.19		9.59		5.88		9.33
Tenant concession costs per square foot (2) (3)		0.74		8.63		5.84		12.63		4.20

Total tenant improvement, leasing commission, and tenant concession costs psf	$	29.48	$	107.96	$	52.77	$	122.15	$	48.13

New Leases - Pre-Leased
Number of leases		4		—		3		—		—
Square feet		563,999		—		55,084		—		—
Tenant improvement costs per square foot (2)	$	84.49	$	—	$	67.75	$	—	$	—
Leasing commission costs per square foot (2)		10.62		—		18.29		—		—
Tenant concession costs per square foot (2) (3)		11.38		—		9.99		—		—

Total tenant improvement, leasing commission, and tenant concession costs psf	$	106.50	$	—	$	96.03	$	—	$	—

Total
Number of renewals/leases		34		47		63		59		34
Square feet		875,974		657,746		812,219		480,449		441,838
Tenant improvement costs per square foot (2)	$	62.02	$	45.44	$	29.74	$	61.16	$	28.59
Leasing commission costs per square foot (2)		8.60		7.76		6.24		6.96		7.92
Tenant concession costs per square foot (2) (3)		8.43		3.07		4.37		6.02		3.06

Total tenant improvement, leasing commission, and tenant concession costs psf	$	79.05	$	56.28	$	40.35	$	74.14	$	39.57

(1)	Does not include retained tenants that have relocated to new space or expanded into new space.

(2)	Based on management estimates. Assumes all tenant improvement, leasing commission, and tenant concession costs are paid in the calendar year in which the lease is executed, which may be different than the year in which they are actually paid.

(3)	Includes both rent concessions due to free or discounted rent periods and lease incentives paid to tenants.

(4)	Includes forward-leasing activity and retained tenants that have relocated to new space or expanded into new space within the Company’s portfolio. For definitions of first and second generation leases, see page 38.

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ACQUISITIONS AND DISPOSITIONS

DECEMBER 31, 2014


Acquisitions Detail for 2014:	Market		Closing Date		Rentable Square Feet		Investment		Percent Leased at Acquisition

Property
							(In thousands)
First Quarter 2014
None

Second Quarter 2014
100 College Street (1)		University Related - Other		April 4, 2014		510,419	$	191,000		99.1	%
300 George Street (2)		University Related - Other		April 4, 2014		518,940		117,000		98.7	%
430 Cambridge Science Park (3)		Cambridge, UK		May 15, 2014		42,410		22,700		100.0	%

Second quarter total (4)						1,071,769	$	330,700		98.9	%

Third Quarter 2014
None

Fourth Quarter 2014
Wake 60 (5)		North Carolina		December 17, 2014		283,250	$	51,300		59.3	%

Total 2014 Acquisitions						1,355,019	$	382,000		90.7	%


Dispositions Detail for 2014:	Market		Closing Date		Rentable Square Feet		Gross Proceeds		Gain on Sale

Property

Fourth Quarter 2014
9911 Belward Campus Drive		Maryland		December 9, 2014		289,912	$	322,500	$	136,609

(1)	Investment includes a minority interest of $5.0 million, an assumed construction loan of $21.7 million and approximately $102.3 million in estimated completion costs.

(2)	Investment includes a minority interest of $5.0 million and an assumed mortgage note payable of $46.3 million.

(3)	Investment includes £11.95 million to be paid upon completion of the building in Q3 2015.

(4)	Excludes approximately 2.3 million square feet of estimated potential development resulting from a 99-year ground lease entered into with Drexel University for approximately $18.2 million during the quarter.

(5)	Investment includes a purchase price of $3.5 million and approximately $47.8 million in estimated completion costs, net of tax credits.

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NON-GAAP FINANCIAL MEASURE DEFINITIONS

DECEMBER 31, 2014

This document includes certain non-GAAP financial measures that management believes are helpful in understanding our business, as further described below. Our definition and calculation of non-GAAP financial measures may differ from those of other REITs, and therefore, may not be comparable. The non-GAAP measures should not be considered an alternative to net income as an indicator of our performance and should be considered only a supplement to cash flows from operating, investing or financing activities as a measure of liquidity, computed in accordance with GAAP.

FFO, CFFO and AFFO

We present funds from operations, or FFO, FFO excluding acquisition-related expenses, or CFFO, and adjusted funds from operations, or AFFO, available to common shares and OP units because we consider them to be important supplemental measures of our operating performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO, CFFO and AFFO when reporting their results.

FFO, CFFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO, CFFO and AFFO exclude depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, they provide performance measures that, when compared year over year, reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. As defined by NAREIT, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable property, impairment charges on depreciable real estate, real estate related depreciation and amortization (excluding amortization of loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures.

We calculate CFFO by adding acquisition-related expenses to FFO. We calculate AFFO by adding to CFFO: (a) non-cash revenues and expenses, (b) recurring capital expenditures and second generation tenant improvements and (c) leasing commissions.

Our computations may differ from the methodologies for calculating FFO, CFFO and AFFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. Further, FFO, CFFO and AFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. FFO, CFFO and AFFO should not be considered alternatives to net income/(loss) (computed in accordance with GAAP) as indicators of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as indicators of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. FFO, CFFO and AFFO should be considered only as supplements to net income computed in accordance with GAAP as measures of our operations.

Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA), and Adjusted EBITDA

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA by adding to EBITDA: (a) noncontrolling interests in our operating partnership, (b) non-cash adjustments for securities, (c) gains or losses from sales of real estate, (d) executive severance, and (e) acquisition-related expenses, and by subtracting from EBITDA (x) lease termination fees related to 4570 Executive Drive, (y) gain on sale of real estate, and (z) net realized gains on investments in securities for the three months ended March 31, 2014. Management uses EBITDA and Adjusted EBITDA as indicators of our ability to incur and service debt. In addition, we consider EBITDA and Adjusted EBITDA to be appropriate supplemental measures of our performance because they eliminate depreciation and interest, which permits investors to view income from operations without the impact of non-cash depreciation or the cost of debt. However, because EBITDA and Adjusted EBITDA are calculated before recurring cash charges including interest expense and taxes, and are not adjusted for capital expenditures or other recurring cash requirements of our business, their utility is limited.

Coverage Ratios

We present interest and fixed charge ratios as supplemental liquidity measures. Management uses these ratios as indicators of our financial flexibility to service current interest expense and debt amortization from current cash net operating income. In addition, we believe that these coverage ratios represent common metrics used by securities analysts, investors and other interested parties to evaluate our ability to service fixed cash payments. However, because these ratios are derived from Adjusted EBITDA, their utility is limited by the same factors that limit the usefulness of Adjusted EBITDA as a liquidity measure.

Net Operating Income (NOI)

We use net operating income, or NOI, as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. We compute NOI by adding or subtracting certain items from net income, noncontrolling interest in the operating partnership, gains/losses from investment in unconsolidated partnerships, interest expense, interest income, depreciation and amortization and general and administrative expenses. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered as an alternative to net income as an indication of our performance or to cash flows as a measure of liquidity or ability to make distributions.

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DEFINITIONS

DECEMBER 31, 2014

Property Status

Active Redevelopment

Represents properties that we are currently preparing for their intended use, and accordingly are capitalizing interest and other costs as of the end of the quarter.

Active New Construction

Represents properties that we are currently developing through ground up construction.

Land Bank

Represents estimates of the additional rentable square footage that we could put into service if management made the strategic election to pursue additional development. Also includes properties that may be held for future development or are currently engaged in activities related to planning, entitlement or other preparations for future construction.

Lease Type

First Generation

Leases on space which, in management’s evaluation, require significant improvements to prepare or condition the premises for its intended purpose or enhance the value of the property. This generally includes capital expenditures for development, redevelopment or repositioning a property.

Second Generation

Leases which are not considered by management to be first generation leases.

Pre-Leased

Leases on space classified as active new construction or, prior to execution, was included in the land bank and is expected to enter the Company’s operating portfolio at a future date.

Forward-Leased

Leases on space which is currently occupied and which are expected to commence upon vacancy of the existing tenants.

Recurring Capital Expenditures

Recurring capital expenditures exclude (1) items associated with the expansion of a building or its improvements, (2) renovations to a building which change the underlying classification of the building, incurred to prepare or condition the premises for its intended purpose (for example, from office to laboratory) or (3) capital improvements that represent an addition to the property rather than the replacement of property, plant or equipment.

Bond Covenants

Calculated in accordance with the covenants contained in the indenture that governs the terms of the Company’s unsecured senior notes due 2020 and supplemental and base indentures that govern the terms of the Company’s unsecured senior notes due 2016, unsecured senior notes due 2019, and unsecured senior notes due 2022, which are included as exhibits to the Company’s Forms 8-K filed with the SEC on April 30, 2010, March 30, 2011, April 23, 2014, and June 28, 2012, respectively. The covenants for the unsecured senior notes due 2020, unsecured senior notes due 2016, unsecured senior notes due 2019, and unsecured senior notes due 2022 are identical, except that the unencumbered total asset value definition for the unsecured senior notes due 2020 includes investments in unconsolidated partnerships accounted for under the equity method of accounting, whereas the unencumbered total asset value definition for the unsecured senior notes due 2016, unsecured senior notes due 2019, and unsecured senior notes due 2022 excludes such investments in unconsolidated partnerships.

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