SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("US GAAP") requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes.

Actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements of the Company include the Trust, the Operating Partnership, wholly owned subsidiaries and those subsidiaries in which the Company owns a majority voting interest with the ability to control operations of the subsidiaries and where no approval, veto or other important rights have been granted to the noncontrolling shareholders. The Company consolidates joint ventures that are considered to be variable interest entities (“VIEs”) where we are the primary beneficiary. The Company (i) evaluates the sufficiency of the total equity investment at risk, (ii) reviews the voting rights and decision-making authority of the equity investment holders as a group and whether there are any guaranteed returns, protection against losses, or capping of residual returns within the group and (iii) establishes whether activities within the venture are on behalf of an investor with disproportionately few voting rights in making this VIE determination. To the extent that the Company (i) is the sole entity that has the power to direct the activities of the VIE and (ii) has the obligation or rights to absorb the VIE's losses or receive its benefits, then the Company would be the primary beneficiary and would consolidate the VIE.

All significant intercompany transactions and accounts have been eliminated.

Real Estate and Depreciation

The properties are recorded at cost and are depreciated using the straight line method over their estimated useful lives. The estimated useful lives are as follows:



Building and improvements		40 years (blended)
Capital improvements		15 - 20 years
Equipment		5 - 10 years
Tenant improvements		Term of the related lease

Expenditures directly related to the development and improvement of real estate, including interest and other costs capitalized during development, are included in net real estate and are stated at cost. The capitalized costs include pre-construction costs essential to the development of the property, development and construction costs, interest costs, real estate taxes, development-related salaries and other costs incurred during the period of development. The total of capitalized compensation costs directly related to the development of property for the years ended December 31, 2016, 2015 and 2014 was $7.2 million, $5.5 million and $5.1 million, respectively. Construction related payables at December 31, 2016 and 2015 were $37.1 million and $42.9 million, respectively.

The Company allocates the purchase price of real estate acquired to land, building and improvements and intangibles at the fair value of each component. Lease values for acquired properties are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management's estimate of fair market lease rates for each corresponding in-place lease ("Market Value Intangible"). Origination values are also assigned to in-place leases, and, where appropriate, value is assigned to customer relationships ("Origination Value Intangible").

Acquisition-related costs for vacant properties are capitalized and included in net real estate at cost. Beginning on October 1, 2016, with the Company's adoption of ASU 2017-01 (see below), acquisition-related costs for properties with in-place leases are also capitalized and included in net real estate at cost. Expenditures for maintenance and repairs are charged to operations as incurred.

The Company depreciates the amounts allocated to building and improvements over 40 years and amortizes the amounts allocated to intangibles relating to in-place leases, which are included in deferred financing and leasing costs and other liabilities in the accompanying consolidated balance sheets, over the remaining term of the related leases. Market Value Intangible amortization is recorded as rental revenue. Origination Value Intangible amortization is recorded as depreciation and amortization. This calculation includes both the remaining noncancelable period and any bargain renewal option periods.

Once a property is designated as held for sale, no further depreciation expense is recorded.

The Company evaluates its real estate investments upon occurrence of a significant adverse change in its operations to assess whether any impairment indicators are present that affect the recovery of the recorded value. If indicators of impairment are identified, the Company estimates the future undiscounted cash flows from the use and eventual disposition of the property and compares this amount to the carrying value of the property. If any real estate investment is considered impaired, a loss is recognized to reduce the carrying value of the property to its estimated fair value.

Investments in Unconsolidated Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities.

Under the equity method of accounting, the net equity investment of the Company is reflected in the accompanying consolidated balance sheets and the Company's share of net income from the joint ventures is included in the accompanying consolidated statements of comprehensive income.

On a periodic basis, management assesses whether there are any indicators that the value of the Company's investments in unconsolidated joint ventures may be other-than-temporarily-impaired. An investment is impaired only if management's estimate of the value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other-than-temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over the estimated fair value of the investment. The estimated fair value of the investments is determined using a discounted cash flow model which is a Level 3 valuation under ASC 820, "Fair Value Measurement." The Company considers a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, operating costs, capitalization rates, holding periods and discount rates.

No impairment losses on the Company's investments in unconsolidated joint ventures were recognized during the years ended December 31, 2014, 2015 or 2016.

Cash and Cash Equivalents

Highly liquid investments with a maturity of three months or less when purchased are classified as cash equivalents.

Restricted Cash

Restricted cash includes tenant security deposits and escrow funds that the Company maintains pursuant to certain mortgage loans. Restricted cash also includes the undistributed proceeds from the sale of residential land in Kent County, United Kingdom.

Accounts Receivable/Deferred Rent Receivable

The Company's accounts receivable are comprised of rents and charges for property operating costs due from tenants. The Company's deferred rent receivable represents the cumulative difference between rent revenue recognized on a straight line basis and contractual payments due under the terms of tenant leases. The Company periodically performs a detailed review of amounts due from tenants to determine if accounts receivable and deferred rent receivable balances are collectible. Based on this review, accounts receivable and deferred rent receivable are reduced by an allowance for doubtful accounts. The Company considers tenant credit quality and payment history and general economic conditions in determining the allowance for doubtful accounts. If the accounts receivable balance or the deferred rent receivable balance is subsequently deemed uncollectible, the receivable and allowance for doubtful account balance are written off.

The allowance for doubtful accounts at December 31, 2016 and 2015 was $7.3 million and $6.9 million, respectively. The Company recognized bad debt expense of $0.6 million, $2.0 million and $1.7 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Revenue Recognition

The Company earns rental income under operating leases with tenants. Rental income is recognized on a straight line basis over the applicable non-cancelable lease term. Operating expense reimbursements consisting of amounts due from tenants for real estate taxes, utilities and other recoverable costs are recognized as revenue in the period in which the corresponding expenses are incurred.

The Company considers any renewal options in determining the lease term. To the extent a lease includes a tenant option to renew or extend the duration of the lease at a fixed or determinable rental rate, the Company evaluates whether or not that option represents a bargain renewal option by analyzing if there is reasonable assurance at lease inception that the tenant will exercise the option because the rental rate is sufficiently lower than the expected rental rate for equivalent property under similar terms and conditions at the exercise date.

Termination fees (included in rental revenue) are fees that the Company has agreed to accept in consideration for permitting certain tenants to terminate their lease prior to the contractual expiration date. The Company recognizes termination fees during the period that landlord services are rendered in accordance with Securities and Exchange Commission Staff Accounting Bulletin 104, "Revenue Recognition," after the following conditions are met:


a.	the termination agreement is executed,


b.	the termination fee is determinable, and


c.	collectability of the termination fee is assured.

In the fourth quarter of 2016, the Company entered into an agreement relating to the fee development of an office building at its Camden Waterfront project in Camden, NJ. Project revenues and related costs and expenses are presented on a gross basis as "Development service fee income" and "Development service fee expense" in the Consolidated Statements of Comprehensive Income. Additionally, at the same time, the Company began classifying development fees and expenses relating to its fee development arrangements for certain unconsolidated joint venture projects in a manner consistent with the Camden project described above. Previously, development service fee income relating to its unconsolidated joint ventures had been classified as other income and development service fee expense had been classified as general and administrative expense in amounts as follows:



	Nine months ended		Year ended December 31,
	September 30, 2016 (unaudited)		2015		2014
Other income	$	3,789	$	6,159	$	2,456
General and administrative expense	$	3,210	$	3,730	$	1,608

Revenue and expense associated with service fee development is accounted for under the percentage of completion method. Revenues are recognized on the percentage of completion method based on applicable costs incurred with respect to each development agreement. The Company uses the relative sales value method to allocate costs and recognize profits from service fee development. Under the relative sales value method, estimates of aggregate project revenues and aggregate project costs are used to determine the allocation of project cost of sales and the resulting profit in each accounting period. In subsequent periods, cost of sale allocations and the resulting profits are adjusted to reflect changes in the actual and estimated costs and revenues of each project. Provisions for estimated losses on uncompleted contracts are recognized immediately in the period in which such losses are determined.

Deferred Financing and Leasing Costs

Costs incurred in connection with the financing of the credit facility or leasing are capitalized and amortized on a straight line basis over the term of the related loan or lease. Costs incurred in connection with the financing of mortgage loans or unsecured notes are reported as a deduction from the face amount of that liability and amortized on a straight line basis over the term of the related loan. Deferred financing cost amortization is reported as interest expense.

Certain employees of the Company are compensated for leasing services related to the Company's properties. The compensation directly related to these leasing services is capitalized and amortized as a deferred leasing cost over the term of the related lease. The total of this capitalized compensation was $3.8 million, $4.6 million and $3.9 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Fair Value of Financial Instruments

ASC 820, Fair Value Measurements and Disclosures, gives guidance on the fair value measurement of a financial asset or liability. Inputs used to develop fair value are classified in one of three categories: Level 1 inputs (quoted prices (unadjusted) in active markets for identical assets or liabilities), Level 2 inputs (inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly) and Level 3 inputs (unobservable inputs for the asset or liability).

The following disclosure of estimated fair value was determined by management using available market information and appropriate valuation methodologies. However, considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the following estimates are not necessarily indicative of the amounts the Company could have realized on disposition of the financial instruments at December 31, 2016 and December 31, 2015. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued interest, dividend and distributions payable and other liabilities are reasonable estimates of fair value because of the short-term nature of these instruments. The carrying value of the outstanding amounts under the Company's credit facility is also a reasonable estimate of fair value because interest rates float at a rate based on LIBOR.

The Company determines the fair value of its interest rate swaps by using the standard methodology of netting discounted future fixed cash payments with the discounted expected variable cash receipts. These variable cash receipts of interest rate swaps are based on expectations of future LIBOR interest rates (forward curves) estimated by observing market LIBOR interest rate curves. This is a Level 2 fair value calculation. Also, credit valuation adjustments are factored into the fair value calculations to account for potential nonperformance risk. These credit valuation adjustments were concluded to be not significant inputs for the fair value calculations for the periods presented. See Note 20 - Derivative Instruments.

The Company used a discounted cash flow model to determine the estimated fair value of its debt as of December 31, 2016 and December 31, 2015. This is a Level 3 fair value calculation. The inputs used in preparing the discounted cash flow model include actual maturity dates and scheduled cash flows as well as estimates for market value discount rates. The Company updates the discounted cash flow model on a quarterly basis to reflect any changes in the Company's debt holdings and changes to discount rate assumptions.

The following summarizes the fair value of the Company's mortgage loans and unsecured notes at December 31, 2015 and December 31, 2016 (in thousands):



	Mortgage Loans				Unsecured Notes
	Carrying Value		Fair Value		Carrying Value		Fair Value
As of December 31, 2015	$	307,908	$	306,334	$	2,580,108	$	2,616,395
As of December 31, 2016	$	276,650	$	286,684	$	2,280,286	$	2,340,762

Income Taxes

The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"). As a result, the Company generally is not subject to federal income taxation at the corporate level to the extent it distributes annually at least 100% of its REIT taxable income, as defined in the Code, to its shareholders and satisfies certain other organizational and operational requirements. The Company has met these requirements and, accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax on its taxable income at regular corporate rates (including any alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years. Even as a REIT, the Company may still be subject to certain state and local income and property taxes, and to federal income and excise taxes on undistributed taxable income.

Several of the Company's subsidiaries are taxable REIT subsidiaries (each a "TRS") and are subject to federal and state income taxes separate from the Company. In general, a TRS may perform additional services for tenants and generally may engage in real estate or non-real estate businesses that are not permitted REIT activities. The Company itself is also subject to tax in certain states and the United Kingdom. Accordingly, the Company recognizes federal, state and foreign income taxes in accordance with US GAAP, as applicable.

There are no uncertain tax positions or possibly significant unrecognized tax benefits that are reasonably expected to occur within the next 12 months. The Company's policy is to recognize interest accrued related to unrecognized benefits in interest expense and penalties in other expense. There were no interest or penalties deducted in any of the years ended December 31, 2016, 2015 and 2014 and no interest and penalties accrued at December 31, 2016 or December 31, 2015 which related to any uncertain tax positions or significant unrecognized tax benefits.

Certain of the Company's taxable REIT subsidiaries had net operating loss carryforwards available of approximately $30.8 million as of December 31, 2016. These carryforwards begin to expire in 2018. The Company has considered future taxable income and has determined that a valuation allowance for the full carrying value of net operating loss carryforwards is appropriate.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, certain state and local jurisdictions, the United Kingdom and (in prior years) Luxembourg. With few exceptions, the Company and its subsidiaries are no longer subject to examination by taxing authorities in these jurisdictions for years prior to 2010.

The Federal tax cost basis of the wholly owned real estate was $6.5 billion and $7.6 billion at December 31, 2016 and 2015, respectively.

Share-Based Compensation

Share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employees' requisite service period.

Derivative Financial Instruments

We borrow funds at a combination of fixed and variable rates. Borrowings under our revolving credit facility and certain bank mortgage loans bear interest at variable rates. Our long-term debt typically bears interest at fixed rates. Our interest rate risk management objectives are to limit generally the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we enter into interest rate hedge contracts such as collars, swaps, caps and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We generally do not hold or issue these derivative contracts for trading or speculative purposes. The interest rate on all of our variable rate debt is generally adjusted at one or three month intervals, subject to settlements under interest rate hedge contracts.

Interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss (for the Trust) and general partner's equity and limited partners' equity - common units (for the Operating Partnership) and is subsequently reclassified into interest expense in the period that the hedged forecasted transaction affects earnings.

Foreign Currency

The functional currency of the Company's United Kingdom operations is pounds sterling. The Company translates the financial statements for the United Kingdom operations into US dollars. For the Trust, gains and losses resulting from this translation are included in accumulated other comprehensive loss as a separate component of shareholders' equity and a proportionate amount of gain or loss is allocated to noncontrolling interest - operating partnership - common units. For the Operating Partnership, gains and losses resulting from this translation are included in general partner's equity and limited partners' equity - common units. Upon sale or upon complete or substantially complete liquidation of the Company's foreign investment, the gain or loss on the sale will include the cumulative translation adjustments that have been previously recorded in accumulated other comprehensive loss and noncontrolling interest - operating partnership - common units (for the Trust) and in general partner's equity and limited partners' equity - common units (for the Operating Partnership).

Comprehensive Income

Comprehensive income, as reflected on the consolidated statements of comprehensive income, is defined as all changes in equity during each period except for those resulting from investments by or distributions to shareholders. Accumulated other comprehensive loss, as reflected on the Company's consolidated balance sheets and consolidated statements of equity, reflects the effective portion of the cumulative changes in the fair value of derivatives in qualifying cash flow hedge relationships as well as gains and losses resulting from foreign currency translation.

Sales of Real Estate

The Company accounts for the sale of real estate assets and any related gain recognition in accordance with the accounting guidance applicable to sales of real estate, which establishes standards for recognition of profit on all real estate sales transactions, other than retail land sales. The Company recognizes the sale, and associated gain or loss from the disposition, provided that the earnings process is complete and the Company is not obligated to perform significant activities after the sale.

Earnings Per Share of the REIT

Basic earnings per share is calculated by dividing the income available to common shareholders for the period by the weighted average number of common shares outstanding during the period using the two class method. Diluted earnings per share is calculated by dividing the net income available to common shareholders for the period by the weighted average number of common and dilutive securities outstanding during the period.

Earnings Per Unit of the Operating Partnership

Basic earnings per unit is calculated by dividing the income available to common unitholders for the period by the weighted average number of common units outstanding during the period using the two class method. Diluted earnings per unit is calculated by dividing the income available to common unitholders for the period by the weighted average number of common and dilutive securities outstanding during the period.

Recently Issued Accounting Standards

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) ("ASU 2014-15"), which gives guidance regarding management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and provide related footnote disclosures. If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, and substantial doubt is not alleviated after consideration of management’s plans, an entity should include a statement in the footnotes indicating that there is substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or available to be issued). The new standard is effective for fiscal years ending after December 15, 2016 and for annual and interim periods thereafter. The Company adopted ASU 2014-15 during the fourth quarter of 2016. No additional disclosures were necessary as a result of this adoption.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which supersedes nearly all existing revenue recognition guidance (except revenue in the scope of other accounting standards, including standards related to leasing). The standard clarifies the required factors that an entity must consider when recognizing revenue and requires additional disclosures concerning contracts with customers, judgments concerning revenue recognition, and assets recognized for the costs to obtain or fulfill a contract. The standard also provides guidance regarding the measurement of gains and losses relative to the sale of certain nonfinancial assets, including real estate. ASU 2014-09 is effective for the Company beginning January 1, 2018. The Company has performed an initial assessment of ASU 2014-09 and plans to adopt the standard using the modified retrospective approach. Upon adoption of ASU 2016-02 (see below), the majority of our revenue will be subject to the allocation provisions outlined within the revenue standard. The Company is currently evaluating the specific implementation requirements for allocating the consideration within our contracts in accordance with ASU 2014-09 as well as other transactions subject to ASU 2014-09. The Company does not expect the new standard to have a material impact on the measurement and recognition of gains and losses on the sale of properties.

In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis (Topic 810) ("ASU 2015-02"). The standard requires that all entities re-evaluate and revise consolidation documentation for limited partnerships and similar legal entities. It makes changes to both the variable interest model and voting model. The Company adopted ASU 2015-02 on January 1, 2016. The adoption of ASU 2015-02 did not have a material impact on the Company's financial position and results of operations.

In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 is effective for the Company beginning January 1, 2019. Early adoption of ASU 2016-02 is permitted. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. For leases in which the Company is the lessor, the standard requires that the lease and non-lease components of the lease agreement should be separated. Revenue related to the lease component of the contract will be recognized on a straight-line basis, while revenue related to the non-lease component will be recognized under the provisions of ASU 2014-09 (see above). For lease agreements longer than one year in which the Company is the lessee, the Company will measure the present value of the future lease payments and recognize a right-of-use asset and corresponding lease liability on its balance sheet. In addition, the new standard states that only direct leasing costs may be capitalized. The Company is evaluating the impact ASU 2016-02 will have on its financial position and results of operations.

In March 2016, the FASB issued ASU 2016-05, Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships ("ASU 2016-05"). ASU 2016-05 states that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under FASB Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. ASU 2016-05 is effective for the Company beginning January 1, 2017. Early adoption of ASU 2016-05 is permitted. The standard allows application on a prospective or modified retrospective basis. The Company does not believe that ASU 2016-05 will have a material impact on its financial position and results of operations.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 is designed to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for the Company beginning January 1, 2017. Early adoption of ASU 2016-09 is permitted. Certain amendments in the standard are to be applied retrospectively and certain amendments are to be applied prospectively. The Company does not believe that ASU 2016-09 will have a material impact on its financial position and results of operations.

In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 is designed to clarify how entities should classify cash receipts and cash payments in the statement of cash flows. ASU 2016-15 is effective for the Company beginning January 1, 2018. Early adoption of ASU 2016-15 is permitted. The standard requires retrospective application unless it is impracticable to do so. The Company is evaluating the impact ASU 2016-15 will have on its statement of cash flows.

In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 is designed to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses with application of the standard applied on a prospective basis upon adoption. Early adoption is permitted, including for interim or annual periods for which the financial statements have not been issued or made available for issuance. The Company has elected to early adopt ASU 2017-01 beginning on October 1, 2016. The adoption of ASU 2017-01 did not have a material impact on the Company's financial position or results of operations.

Adjustment of previously reported financial information

The Company became a party to a land development agreement in the United Kingdom also known as Kings Hill in 2003. The agreement between the Company and Kent County Council (“KCC”) provides for the Company’s participation in profits realized from the development and sale of primarily residential land and infrastructure. This development has proceeded in phases with Phase 1 of the project complete, and with Phase 2 of the project nearing completion as of the end of 2016. In August 2015, the Company also received planning permission to convert, develop and sell certain commercial land at Kings Hill as residential. This additional residential development is known as Phase 3.

The Company has recognized its profit participation from the Kings Hill development as Other Income as KCC’s land has been sold and all related rights and obligations have lapsed over the course of the project. As Phase 2 was coming nearer to completion by the end of 2016, the Company determined that net profit from Kings Hill was not properly recognized in prior periods. The Company determined that the errors resulted largely from incorrect assumptions in its accounting model used to calculate the cost of sales to be recognized when land was sold and all related rights and obligations lapsed and in establishing its UK income tax provision beginning in 2003. In the aggregate, using the current exchange rate as of December 31, 2016, these errors resulted in a cumulative understatement of Other Income of $12.7 million and a cumulative overstatement of Income Taxes of $3.9 million in the current and prior periods.

The net effect of these adjustments from amounts the Company previously reported resulted in a decrease in net income of $0.5 million for the year ended December 31, 2016, an increase in net income of $1.5 million for the year ended December 31, 2015, and an increase in net income of $308,000 for the year ended December 31, 2014. The remaining net impact of these adjustments relates to periods prior to 2014.

In accordance with applicable accounting guidance, an adjustment to the financial statements for each individual prior period presented is required to reflect the correction of the period-specific effects of the change, if material. Based on our evaluation of the relevant quantitative and qualitative factors, we determined the identified corrections are immaterial to the Company’s individual prior period consolidated financial statements; however, the cumulative correction of the prior period errors would be material to the Company's current year Consolidated Statements of Comprehensive Income. Consequently, the Company has adjusted certain prior period amounts to correct these errors.

The tables below summarize the effect of the adjustment to previously reported consolidated financial statements as of December 31, 2015 and for the years ended December 31, 2015 and 2014.



Liberty Property Trust
Consolidated Balance Sheet (in thousands)		December 31, 2015
		As previously reported			Adjustment			As adjusted
Other liabilities		$	243,806		$	(20,307	)	$	223,499
	Total liabilities	3,540,145			(20,307		)	3,519,838

Accumulated other comprehensive loss		(17,893		)	(4,613		)	(22,506		)
Distributions in excess of net income		(698,954		)	24,266			(674,688		)
	Total Liberty Property Trust shareholders' equity	2,952,928			19,653			2,972,581
Noncontrolling interest - operating partnership		53,100			654			53,754
	Total equity	3,009,947			20,307			3,030,254



Liberty Property Limited Partnership
Consolidated Balance Sheet (in thousands)		December 31, 2015
		As previously reported		Adjustment			As adjusted
Other liabilities		$	243,806	$	(20,307	)	$	223,499
	Total liabilities	3,540,145		(20,307		)	3,519,838

General Partner's equity		2,952,928		19,653			2,972,581
Limited partners' equity		53,100		654			53,754
	Total owners' equity	3,009,947		20,307			3,030,254



Liberty Property Trust
Consolidated Statements of Comprehensive Income
(in thousands except per share amounts)		Year ended December 31, 2015									Year ended December 31, 2014
		As previously reported			Adjustment			As adjusted			As previously reported			Adjustment			As adjusted
Interest and other income		$	22,863		$	918		$	23,781		$	17,669		$	(69	)	$	17,600
	Total other income (expense)	(112,916		)	918			(111,998		)	(134,218		)	(69		)	(134,287		)

	Income before gain on property dispositions, income taxes and equity in earnings of unconsolidated joint ventures	144,216			918			145,134			123,088			(69		)	123,019

Income taxes		(3,233		)	560			(2,673		)	(2,967		)	377			(2,590		)

	Income from continuing operations	244,446			1,478			245,924			175,582			308			175,890
	Net income	244,446			1,478			245,924			224,163			308			224,471
	Noncontrolling interest - operating partnership	(6,158		)	(34		)	(6,192		)	(5,706		)	(7		)	(5,713		)
	Income available to common shareholders	238,039			1,444			239,483			217,910			301			218,211

Other comprehensive loss - foreign currency translation		(11,433		)	(1,107		)	(12,540		)	(14,415		)	(1,256		)	(15,671		)
	Other comprehensive loss	(11,921		)	(1,107		)	(13,028		)	(16,376		)	(1,256		)	(17,632		)
	Total comprehensive income	232,525			371			232,896			207,787			(948		)	206,839
	Less: comprehensive income attributable to noncontrolling interest	(6,127		)	(8		)	(6,135		)	(5,870		)	(8		)	(5,878		)
	Comprehensive income attributable to common shareholders	$	226,398		$	363		$	226,761		$	201,917		$	(956	)	$	200,961

	Income from continuing operations per common share - basic	$	1.61		$	0.01		$	1.62		$	1.16		$	—		$	1.16
	Income per common share - basic	$	1.61		$	0.01		$	1.62		$	1.48		$	—		$	1.48

	Income per common share - diluted	$	1.60		$	0.01		$	1.61		$	1.15		$	0.01		$	1.16
	Income per common share - diluted	$	1.60		$	0.01		$	1.61		$	1.47		$	0.01		$	1.48



Liberty Property Limited Partnership
Consolidated Statements of Comprehensive Income
(in thousands except per share amounts)		Year ended December 31, 2015									Year ended December 31, 2014
		As previously reported			Adjustment			As adjusted			As previously reported			Adjustment			As adjusted
Interest and other income		$	22,863		$	918		$	23,781		$	17,669		$	(69	)	$	17,600
	Total other income (expense)	(112,916		)	918			(111,998		)	(134,218		)	(69		)	(134,287		)

	Income before gain on property dispositions, income taxes and equity in earnings of unconsolidated joint ventures	144,216			918			145,134			123,088			(69		)	123,019

Income taxes		(3,233		)	560			(2,673		)	(2,967		)	377			(2,590		)

	Income from continuing operations	244,446			1,478			245,924			175,582			308			175,890
	Net income	244,446			1,478			245,924			224,163			308			224,471
	Income available to common unitholders	243,725			1,478			245,203			223,144			308			223,452

Other comprehensive loss - foreign currency translation		(11,433		)	(1,107		)	(12,540		)	(14,415		)	(1,256		)	(15,671		)
	Other comprehensive loss	(11,921		)	(1,107		)	(13,028		)	(16,376		)	(1,256		)	(17,632		)
	Total comprehensive income	232,525			371			232,896			207,787			(948		)	206,839

	Income from continuing operations per common unit - basic	$	1.61		$	0.01		$	1.62		$	1.16		$	—		$	1.16
	Income per common unit - basic	$	1.61		$	0.01		$	1.62		$	1.48		$	—		$	1.48

	Income per common unit - diluted	$	1.60		$	0.01		$	1.61		$	1.15		$	0.01		$	1.16
	Income per common share - diluted	$	1.60		$	0.01		$	1.61		$	1.47		$	0.01		$	1.48

	Net income allocated to general partners	$	238,039		$	1,444		$	239,483		$	217,910		$	301		$	218,211
	Net income allocated to limited partners	$	6,158		$	34		$	6,192		$	5,706		$	7		$	5,713



Liberty Property Trust
Consolidated Statements of Cash Flows (in thousands)
		Year ended December 31, 2015							Year ended December 31, 2014
		As previously reported		Adjustment			As adjusted		As previously reported			Adjustment			As adjusted
Net income		$	244,446	$	1,478		$	245,924	$	224,163		$	308		$	224,471
Changes in operating assets and liabilities:
	Other liabilities	9,296		(1,478		)	7,818		(20,040		)	(308		)	(20,348		)



Liberty Property Limited Partnership
Consolidated Statements of Cash Flows (in thousands)
		Year ended December 31, 2015							Year ended December 31, 2014
		As previously reported		Adjustment			As adjusted		As previously reported			Adjustment			As adjusted
Net income		$	244,446	$	1,478		$	245,924	$	224,163		$	308		$	224,471
Changes in operating assets and liabilities:
	Other liabilities	9,296		(1,478		)	7,818		(20,040		)	(308		)	(20,348		)

The Company also made changes to the January 1, 2014 balances in the Consolidated Statements of Equity as follows:



Liberty Property Trust
Consolidated Statements of Equity (in thousands)		January 1, 2014
		As previously reported			Adjustment			As adjusted
Accumulated other comprehensive income (loss)		$	9,742		$	(2,305	)	$	7,437
Distributions in excess of net income		(591,713		)	22,520			(569,193		)
	Total Liberty Property Trust shareholders' equity	3,035,844			20,215			3,056,059
Noncontrolling interest - operating partnership - common		56,713			668			57,381
	Total equity	3,096,179			20,883			3,117,062



Liberty Property Limited Partnership
Consolidated Statements of Equity (in thousands)		January 1, 2014
		As previously reported		Adjustment		As adjusted
General partner's equity		$	3,035,844	$	20,215	$	3,056,059
Limited partners' equity		56,713		668		57,381
	Total owners' equity	3,096,179		20,883		3,117,062