The following table presents a reconciliation of net income to funds from operations for the years ended December 31, (in thousands):  (1) Includes depreciation and amortization related to assets “held for sale” reflected as discontinued operations (for the periods prior to when such assets  were designated as “held for sale”). (2) During the second quarter of 2004, we elected to redeem the 9.50% Series A cumulative redeemable preferred stock. Accordingly, in compliance with Emerging Issues Task Force Topic D-42, we recorded a charge of $1,876,000, or $0.10 per common share (diluted) in the second quarter of 2004 for costs related to the redemption of the Series A preferred stock. (3) Gain/loss on sales of property relates to the disposition of a property in the Suburban Washington D.C. market during the first quarter of 2004, the disposition of a property in the Suburban Washington D.C. market during the fourth quarter of 2003, the disposition of a property in the Eastern Massachusetts market during the third quarter of 2003, and the disposition of a property in the San Francisco Bay market during the first quarter of 2003. Gain/loss on sales of property is included in the income statement in income from discontinued operations, net. P R O P E R T Y A N D L E A S E I N F O R M AT I O N The following table is a summary of our operating property portfolio as of December 31, 2004 (dollars in thousands):  Year Ended December 31, 2004 2003 Net income $ 60,195 $ 59,643 Add: Depreciation and amortization (1) 42,523 38,901 Less: Dividends on preferred stock (12,595) (8,898) Preferred stock redemption charge (2) (1,876) - Gain/loss on sales of property (3) (1,627) (8,286) Funds from operations $ 86,620 $ 81,360 Number of Operating Rentable Annualized Occupancy Properties Square Feet Base Rent Percentage California - Pasadena 1 31,343 $ 524 (1)  62.2% California - San Diego 21 1,007,571 28,171 96.3% California - San Francisco Bay 10 642,578 19,940 100.0% Eastern Massachusetts 13 710,794 21,251 89.2% New Jersey/Suburban Philadelphia 7 458,623 7,820 100.0% Southeast 6 340,994 5,439 (1)  81.8% Suburban Washington D.C. 28 2,203,252 40,073 95.2% Washington - Seattle 9 740,503 24,806 99.9% Total 95 6,135,658 $148,024 (2)  95.2% (1) All, or substantially all, of the vacant space is office or warehouse space. (2) Excludes 17 properties under full or partial redevelopment. Including properties under full or partial redevelopment, occupancy as of December 31, 2004 was 87.0%. P 16