management’s discussion and analysis of financial condition and results of operations maturity at an effective rate of 6.33%.
In December we issued $250 million of unsecured floating rate debt at 26 basis points over LIBOR.
The debt matures in two years, but is callable at our option after six months.
● In August, we paid off $15 million of a $40 million secured floating rate term loan.
We also assumed $29.9 million of secured debt in conjunction with a property acquisition in Atlanta.
● The average balance and average borrowing rate of our $500 million revolving credit facility were slightly higher in 2004 than in 2003.
At the end of 2004 we were not utilizing our credit facility.
Depreciation and Amortization Expense Depreciation and amortization expense increased from $188.0 million in 2003 to $224.6 million in 2004 as a result of increased capital spending associated with increased leasing, the additional basis resulting from acquisitions, development activity and the application of SFAS 141 as described below.
The points below highlight the significant increase in depreciation and amortization.
● Depreciation expense on tenant improvements increased by $14.1 million.
● Depreciation expense on buildings increased by $6.0 million.
● Lease commission amortization increased by $2.2 million.
The amortization expense associated with acquired lease intangible assets increased by approximately $10.0 million.
The acquisitions were accounted for in accordance with SFAS 141 which requires the allocation of a portion of a property’s purchase price to intangible assets for leases acquired and in-place at the closing date of the acquisition.
These intangible assets are amortized over the remaining life of the leases (generally 3-5 years) as compared to the building basis portion of the acquisition, which is depreciated over 40 years.
Service Operations Service Operations primarily consist of our merchant building sales and the leasing, management, construction and development services for joint venture properties and properties owned by third parties.
These operations are heavily influenced by the current state of the economy as leasing and management fees are dependent upon occupancy while construction and development services rely on businesses expanding operations.
Service Operations earnings increased from $21.8 million in 2003 to $24.4 million in 2004.
The increase reflects higher construction volumes partially offset by increased staffing costs for our new National Development and Construction group and construction jobs in certain markets.
Other factors impacting service operations are discussed below.
● We experienced a 1.6% decrease in our overall gross profit margin percentage in our general contractor business in 2004 as compared to 2003, due to continued competitive pricing pressure in many of our markets.
We expect margins to increase in 2005 as economic conditions improve.
However, despite this decrease, we were able to increase our net general contractor revenues from $26.8 million in 2003 to $27.6 million in 2004 because of an increase in volume.
This volume increase was attributable to continued low financing costs available to businesses, thereby making it more attractive for them to own instead of lease facilities.
We have a substantial backlog of $183.2 million for third party construction as of December 31, 2004, that will carry into 2005.
● Our merchant building development and sales program, whereby a building is developed by us and then sold, is a significant component of construction and development income.
During 2004, we generated after tax gains of $16.5 million from the sale of six properties compared to $9.6 million from the sale of four properties in 2003.
Profit margins on these types of building sales fluctuate by sale depending on the type of property being sold, the strength of the underlying tenant and nature of the sale, such as a pre-contracted purchase price for a primary tenant versus a sale on the open market.
General and Administrative Expense General and administrative expense increased from $22.1 million in 2003 to $26.4 million in 2004.
The increase was a result of increased staffing and employee compensation costs to support development of our National Development and Construction group.
We also experienced an increase in marketing to support certain new projects.
Other Income and Expenses Earnings from sales of land and ownership interests in unconsolidated companies, net of impairment adjustments, is comprised of the following amounts in 2004 and 2003 (in thousands):
## Table 0 ##
In the first quarter of 2003, we sold our 50% interest in a joint venture that owned and operated depreciable investment property.
The joint venture developed and operated real estate assets; thus, the gain was not included in operating income.
## Table 1 ##
The following table depicts our ownership interest in marine, rail and petroleum coke loading and offloading facilities at December 31, 2018:
## Table 2 ##
CAPITAL RESOURCES AND LIQUIDITY Financial Indicators

<table><tr><td></td><td>2004</td><td>2003</td></tr><tr><td>Gain on sale of joint venture interests</td><td>$83</td><td>$8,617</td></tr><tr><td>Gain on land sales</td><td>10,543</td><td>7,695</td></tr><tr><td>Impairment adjustment</td><td>-424</td><td>-560</td></tr><tr><td>Total</td><td>$10,202</td><td>$15,752</td></tr></table>
<table><tr><td>Facility Name</td><td rowspan="3">Location North Dakota Kansas</td><td rowspan="3">Commodity Handled Crude Oil Refined Petroleum Products</td><td rowspan="3">Interest 70% 100</td><td rowspan="3">Gross Storage Capacity (MBbl) 235 978</td><td rowspan="3">Gross Rack Capacity (MBD) N/A N/A</td></tr><tr><td>Palermo †</td></tr><tr><td>Paola †</td></tr><tr><td>Pasadena †</td><td>Texas</td><td>Refined Petroleum Products</td><td>100</td><td>3,234</td><td>65</td></tr><tr><td>Pecan Grove †</td><td>Louisiana</td><td>Crude Oil</td><td>100</td><td>177</td><td>N/A</td></tr><tr><td>Ponca City †</td><td>Oklahoma</td><td>Refined Petroleum Products</td><td>100</td><td>51</td><td>23</td></tr><tr><td>Ponca City Crude †</td><td>Oklahoma</td><td>Crude Oil</td><td>100</td><td>1,229</td><td>N/A</td></tr><tr><td>Portland</td><td>Oregon</td><td>Refined Petroleum Products</td><td>100</td><td>650</td><td>33</td></tr><tr><td>Renton</td><td>Washington</td><td>Refined Petroleum Products</td><td>100</td><td>243</td><td>20</td></tr><tr><td>Richmond</td><td>California</td><td>Refined Petroleum Products</td><td>100</td><td>343</td><td>28</td></tr><tr><td>River Parish †</td><td>Louisiana</td><td>NGL</td><td>100</td><td>1,500</td><td>N/A</td></tr><tr><td>Rock Springs</td><td>Wyoming</td><td>Refined Petroleum Products</td><td>100</td><td>132</td><td>19</td></tr><tr><td>Sacramento</td><td>California</td><td>Refined Petroleum Products</td><td>100</td><td>146</td><td>13</td></tr><tr><td>San Bernard</td><td>Texas</td><td>Refined Petroleum Products</td><td>100</td><td>231</td><td>N/A</td></tr><tr><td>Santa Margarita</td><td>California</td><td>Crude Oil</td><td>100</td><td>398</td><td>N/A</td></tr><tr><td>Sheridan †</td><td>Wyoming</td><td>Refined Petroleum Products</td><td>100</td><td>94</td><td>15</td></tr><tr><td>Spokane</td><td>Washington</td><td>Refined Petroleum Products</td><td>100</td><td>351</td><td>24</td></tr><tr><td>Tacoma</td><td>Washington</td><td>Refined Petroleum Products</td><td>100</td><td>316</td><td>17</td></tr><tr><td>Torrance</td><td>California</td><td>Crude Oil, Refined Petroleum Products</td><td>100</td><td>2,128</td><td>N/A</td></tr><tr><td>Tremley Point †</td><td>New Jersey</td><td>Refined Petroleum Products</td><td>100</td><td>1,701</td><td>25</td></tr><tr><td>Westlake</td><td>Louisiana</td><td>Refined Petroleum Products</td><td>100</td><td>128</td><td>16</td></tr><tr><td>Wichita Falls †</td><td>Texas</td><td>Crude Oil</td><td>100</td><td>225</td><td>N/A</td></tr><tr><td>Wichita North †</td><td>Kansas</td><td>Refined Petroleum Products</td><td>100</td><td>769</td><td>19</td></tr><tr><td>Wichita South †</td><td>Kansas</td><td>Refined Petroleum Products</td><td>100</td><td>272</td><td>N/A</td></tr></table>
<table><tr><td>Facility Name</td><td>Location</td><td>Commodity Handled</td><td>Interest</td><td>Gross Loading Capacity*</td></tr><tr><td>Marine</td><td></td><td></td><td></td><td></td></tr><tr><td>Beaumont</td><td>Texas</td><td>Crude Oil, Refined Petroleum Products</td><td>100%</td><td>60</td></tr><tr><td>Clifton Ridge †</td><td>Louisiana</td><td>Crude Oil</td><td>100</td><td>48</td></tr><tr><td>Freeport</td><td>Texas</td><td>Crude Oil, Refined Petroleum Products, NGL</td><td>100</td><td>46</td></tr><tr><td>Hartford †</td><td>Illinois</td><td>Refined Petroleum Products</td><td>100</td><td>3</td></tr><tr><td>Pecan Grove †</td><td>Louisiana</td><td>Crude Oil</td><td>100</td><td>6</td></tr><tr><td>Portland</td><td>Oregon</td><td>Crude Oil</td><td>100</td><td>10</td></tr><tr><td>Richmond</td><td>California</td><td>Crude Oil</td><td>100</td><td>3</td></tr><tr><td>San Bernard</td><td>Texas</td><td>Refined Petroleum Products</td><td>100</td><td>2</td></tr><tr><td>Tacoma</td><td>Washington</td><td>Crude Oil</td><td>100</td><td>12</td></tr><tr><td>Tremley Point †</td><td>New Jersey</td><td>Refined Petroleum Products</td><td>100</td><td>7</td></tr><tr><td>Rail</td><td></td><td></td><td></td><td></td></tr><tr><td>Bayway †</td><td>New Jersey</td><td>Crude Oil</td><td>100</td><td>75</td></tr><tr><td>Beaumont</td><td>Texas</td><td>Crude Oil</td><td>100</td><td>20</td></tr><tr><td>Ferndale †</td><td>Washington</td><td>Crude Oil</td><td>100</td><td>30</td></tr><tr><td>Missoula</td><td>Montana</td><td>Refined Petroleum Products</td><td>50</td><td>41</td></tr><tr><td>Palermo †</td><td>North Dakota</td><td>Crude Oil</td><td>70</td><td>100</td></tr><tr><td>Thompson Falls</td><td>Montana</td><td>Refined Petroleum Products</td><td>50</td><td>41</td></tr><tr><td>Petroleum Coke</td><td></td><td></td><td></td><td></td></tr><tr><td>Lake Charles</td><td>Louisiana</td><td>Petroleum Coke</td><td>50</td><td>N/A</td></tr></table>

Question: in 2004 what was the ratio of the increase in the depreciation expense on the tenant improvement to the buildings
Answer: 2.35