restrict, among other things, certain investments, indebtedness, distributions and mergers. The unsecured line of credit expires November 2006 and may be extended at our sole option for an additional one-year period. As of December 31, 2003, borrowings out- standing on the unsecured line of credit carried a weighted average interest rate of 2.65%. In November 2003, we obtained a $150 million unsecured term loan which bears interest at a floating rate based on our election of either a LIBOR based rate or the higher of the bank’s reference rate and the Federal Funds rate, plus 0.5%. For each LIBOR based advance, we must elect to fix for a period of one, two, three or six months. The unsecured term loan contains financial covenants sub- stantially similar to those in our unsecured line of credit. The unsecured term loan expires in November 2008. As of December 31, 2003, the unsecured term loan carried a weighted average interest rate of 2.62%. Aggregate borrowings under the unsecured line of credit and unsecured term loan may be limited to an amount based on the net operating income derived from a pool of unencumbered properties. Accordingly, as we acquire or complete the development or rede- velopment of additional unencumbered properties, aggregate borrowings available under the unsecured line of credit and unsecured term loan will increase up to a maximum of $590 million. Under these provisions, as of December 31, 2003, aggregate borrowings under our unsecured line of credit and unsecured term loan were limited to $479 million. We utilize interest rate swap agreements to hedge a portion of our exposure to variable interest rates associated with our unse- cured line of credit and unsecured term loan. These agreements involve an exchange of fixed and floating interest payments without the exchange of the underlying principal amount (the “notional amount”). Interest received under all of our swap agreements is based on the one-month LIBOR rate. The net difference between the interest paid and the interest received is reflected as an adjustment to interest expense. The following table summarizes our interest rate swap agreements (dollars in thousands): We do not believe we are exposed to more than a nominal amount of credit risk in our interest rate swap agreements as our counter- parties are established, well-capitalized financial institutions. In addition, we have entered into master derivative agreements with each counterparty. These master derivative agreements (all of which are on the standard International Swaps & Derivatives Association, Inc. form) define certain terms between us and each counterparty to address and minimize certain risks associated with our swap agreements, including a default by a counterparty. As of December 31, 2003 and 2002, our interest rate swap agreements have been reported in the accompanying balance sheets at their fair value as other liabilities of approximately $6.3 million and $9.0 million, respectively. The offsetting adjustments were reflect- ed as deferred losses in accumulated other comprehensive income of $6.3 million and $9.0 million, respectively. Balances in accumu- lated other comprehensive income are recognized in earnings as swap payments are made. 26 Effective Notional Effective at Interest Termination Fair Transaction Dates Dates Amounts December 31, 2003 Pay Rates Dates Values Hedges for Unsecured Line of Credit: March 2002 December 31, 2002 $ 50,000 $ 50,000 5.364% December 31, 2004 $ (2,004) July 2002 January 1, 2003 25,000 25,000 3.855% June 30, 2005 (805) July 2002 January 1, 2003 25,000 25,000 3.865% June 30, 2005 (809) December 2002 January 2, 2003 25,000 25,000 3.285% June 30, 2006 (567) December 2002 January 2, 2003 25,000 25,000 3.285% June 30, 2006 (567) November 2002 June 1, 2003 25,000 25,000 3.115% December 31, 2005 (523) November 2002 June 1, 2003 25,000 25,000 3.155% December 31, 2005 (543) $ 200,000 Hedges for Unsecured Term Loan: December 2003 December 31, 2003 $ 50,000 $ 50,000 1.53% December 31, 2004 (74) December 2003 December 31, 2004 50,000 - 3.00% December 30, 2005 (119) December 2003 December 30, 2005 50,000 - 4.15% December 29, 2006 (121) December 2003 December 29, 2006 50,000 - 5.09% October 31, 2008 (167) $ 50,000 $ (6,299) Total Interest Rate Swap Agreements in Effect at December 31, 2003 $ 250,000