NOTE 4: I NVESTMENTS We hold e quity investments in certain publicly-traded companies and privately held entities primarily involved in the life science industry. All of our investments in publicly-traded companies are considered “available for sale” under the provisions of Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“SFAS 115”). The follow- ing table s ummarizes our available-for-sale securities (in thousands): December 31, 2003 2002 Adjus ted cost of available-for-sale securities $ 1,257 $ 3,210 Non-cash impairment charges - (1,334) Gross unrealized gains 837 214 Gross unrealized losses (13) - Fair value of available-for-sale securities $ 2,081 $ 2,090 Investments in privately held entities as of December 31, 2003 and 2002, totaled $45,045,000 and $37,560,000, respectively. Of these totals, $42,331,000 and $35,356,000 are accounted for under the cost method. The remainder ($2,714,000 and $2,204,000 for 2003 and 2002, respectively) is accounted for under the equity method in accordance with Accounting Principles Board Opinion No. 18, “The Equity Method of Accounting for Investments in Common Stock”(“APB 18”) and Emerging Issues Task Force (“EITF”) Topic D-46, “Accounting for Limited Partnership Investments”. Equity in income for the year ended December 31, 2003 related to investments accounted for under the equity method of accounting was $306,000 and is included in other income in the accompanying consolidat- ed statements of income. During 2002, we recognized an impairment charge of $1,211,000 for other than temporary declines in the fair value of our investments in privately held entities. Net investment income of $536,000 was recognized in 2003 and is included in other income in the accompanying consolidated statements of income. Net investment income during 2003 consists of equity in income of $306,000 related to investments accounted for under the equity method of accounting, gross realized gains of $532,000 and gross realized losses of $302,000. We have an unsecured line of credit that provides for borrowings of up to $440 million. Borrowings under our unsecured line of credit, as amended, bear 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 a LIBOR period of one, two, three or six mont h s. NOTE 5: U NSECURED LINE OF CREDIT AND UNSECURED TERM LOAN Ou r uns ecured line of credit contains financial covenants, including, among other things, maintenance of minimum net worth, a total liabilities to gross asset value ratio and a fixed charge coverage ratio. In addition, the terms of the unsecured line of credit 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. 44