1. yed PROJECTED FISCAL IMPACTS OF THE PROPOSED REDEVELOPMENT OF THE HONEYWELL MORRIS TOWNSHIP HEADQUARTERS CAMPUS Prepared by Biggins Lacy Shapiro & Company Princeton, New Jersey Revised August 29, 2012

2. Projected Revenues & Costs CURRENTPLANNED Assessed Valuation:$64,900,000$228,000,000 Annual Tax Revenues Municipal Property Tax Revenues School District Property Tax Revenues Total Tax Revenues $400,000 $915,000 $1,315,000 $1,407,000 $3,213,000 $4,620,000 Incremental Annual Tax Revenues Incremental Municipal Revenues Incremental School District Revenues Total Incremental Tax Revenues NA $1,007,000 $2,298,000 $3,305,000 Incremental Annual Costs Incremental Municipal Costs Incremental School District Costs Total Incremental Costs NA $271,000 $1,166,000 $1,437,000 Incremental Annual Net Benefit To Morris Township To Morris School District Total Incremental Annual Net Benefit NA $735,000 $1,132,000 $1,867,000 Non-recurring Permit & Fee Revenues Permit/Development Fees: NA $1,634,000 Projections are rounded 1

3. Derivation of Municipal Revenues Assessed Valuation by Product Type User Type No. Units Size (SF) Market Value (SF/Unit ) Total Market Value Equalization Rate Assessed Value Municipal Tax Rate/100 Municipal Taxes HoneywellNA558,156$176.80/SF$98,682,88468.09%$67,193,176$0.617$414,582 Service RetailNA12,500$175.00/SF$2,187,50068.09%$1,489,469$0.617$9,190 New OfficeNA322,500$325.00/SF$104,812,50068.09%$71,366,831$0.617$440,333 Townhomes235512,600$550,000/unit$129,250,00068.09%$88,006,325$0.617$542,999 TOTAL1,405,756$334,932,884$228,055,801$1,407,104 2

4. 2012 Municipal Budget Total Expenses: $33.86 million Fixed Costs: $20.98 million Fixed Costs: $20.98 million Variable Costs: $12.88 million (38%) Variable Costs: $12.88 million (38%) Allocation of Variable Costs by User Groups Residential: 87.95% ($11.3 million) Commercial: 10.11% ($1.3 million) Per Capita Costs Residential: $350 per capita (based on 22,306 residents from 2010 Census) Commercial: $99 per capita (based on 9,053 employed from 2010 Census ) Incremental Additional Costs Residential Impact: 512 new residents x $350 = $179,000 Commercial Impact: 924 new workers x $99 = $92,000 TOTAL COSTS = $271,000 TOTAL COSTS = $271,000 Total Township budget funded by local taxes is 69.06% Derivation of Municipal Costs (Excluding Schools) 3

5. Derivation of School Revenues and Costs Property Use Increase in Ratable Base Increase in School Apportionment Formula (%) Additional Tax Levy (annual) Incremental Tax Revenues to the School District (annual) Net Benefit (annual) Development Plan $163.2 million0.94%$1.17 million$2.30 million$1.13 million Taxpayer Perspective Property Use Number of New Units Additional Public School Children * Cost per Student** Total Additional Cost (annual)*** Incremental Tax Revenues to the School District (annual) Net Benefit (annual) Development Plan 23538$15,775$602,408$2.30 million$1.69 million Board of Ed Perspective * Per Rutgers University Center for Urban Policy Research Study. Listokin, D. (2006). “Who Lives in New Jersey Housing? A Quick Guide to New Jersey Residential Demographic Multipliers.” ** Per pupil expenditure estimate based on NJ Department of Education report: Comparative Pupil Expenditures 2011. *** Rounded per Rutgers multipliers. 4

6. Other Revenue and Cost Key Assumptions (1) Estimated capital investment of $99.6 million to complete demolition, abatement and site work, renovate building and furnish space, etc. (2) Based on Rutgers University Center for Urban Policy Research Study. Listokin, D. (2006). “Who Lives in New Jersey Housing? A Quick Guide t o New Jersey Residential Demographic Multipliers. “ Multipliers are as follows: 1.914 for 2BR units and 2.444 for 3BR units. (3) The number of jobs is based on the proposed square footage as compiled by the NJ Department of Community Affairs Standards - Exhibit B, as follows: a 2.8 ratio for Class A Office and 1.7 ratio for other categories including Retail establishments. (4) See next page. Per Rutgers University Center for Urban Policy Research Study. Listokin, D. (2006). “Who Lives in New Jersey Housing? A Quick Guide t o New Jersey Residential Demographic Multipliers. “ Projections are rounded. (5) Per pupil expenditure estimate based on NJ Department of Education report: Comparative Pupil Expenditures 2011Report. CURRENTPLANNED Development Plan Honeywell Retained Space (SF) Office (SF) Retail (SF) Residential (SF) Total SF Amount of Honeywell Space to be Demolished (SF) Dwelling Units 1,156,182 NA 1,156,182 NA 558,156 (1) 322,500 12,500 512,600 1,405,756 500,000 235 (50% 3BR/50 % 2BR) Impact on Municipal Services Number of New Residents (2) Number of New Workers (3) NA 512 924 Impact on School District Finances (Taxpayer Perspective) Increase in Ratable Base Increase in Apportionment Formula NA $163,155,801 0.94% Impact on School District Finances (Board of Education Perspective) Additional Public School Children (4) Cost per Student (5) NA 38 $15,775 5

7. Public School Children Generation (From Rutgers CUPR study) Townhouse Type No. Of Homes Average Price Elementary: K-6Middle School: 7-9High School: 10-12 TOTAL Children per Unit* No. of Children Children per Unit* No. of Children Children per Unit* No. of Children 2-Bedrooms117 $550,000 0.0560.01520.016210 3-Bedrooms118 $550,000 0.13150.04850.066828 Sub Total235 21 7 1038 6 * Based on 2006 Rutgers CUPR Study