Maryland | 001-13100 | 56-1871668 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
North Carolina | 000-21731 | 56-1869557 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
• | combined reports better reflect how management and investors view the business as a single operating unit; |
• | combined reports enhance investors' understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management; |
• | combined reports are more efficient for the Company and the Operating Partnership and result in savings in time, effort and expense; and |
• | combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review. |
• | Consolidated Financial Statements; |
• | the following Notes to Consolidated Financial Statements: |
• | Note 4 - Investments in and Advances to Affiliates; |
• | Note 8 - Noncontrolling Interests; and |
• | Note 13 - Earnings Per Share and Per Unit; |
• | Item 4 - Controls and Procedures; and |
• | Item 6 - Certifications of CEO and CFO Pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. |
Page | |
PART I - FINANCIAL INFORMATION | |
ITEM 1. FINANCIAL STATEMENTS (unaudited) | |
ITEM 4. CONTROLS AND PROCEDURES | |
PART II - OTHER INFORMATION | |
ITEM 6. EXHIBITS |
September 30, 2013 | December 31, 2012 | ||||||
Assets: | |||||||
Real estate assets, at cost: | |||||||
Land | $ | 403,556 | $ | 345,614 | |||
Buildings and tenant improvements | 3,756,552 | 3,172,107 | |||||
Development in process | 56,495 | 21,198 | |||||
Land held for development | 112,079 | 115,416 | |||||
4,328,682 | 3,654,335 | ||||||
Less-accumulated depreciation | (981,602 | ) | (903,837 | ) | |||
Net real estate assets | 3,347,080 | 2,750,498 | |||||
Real estate and other assets, net, held for sale | 16,316 | 129,400 | |||||
Cash and cash equivalents | 31,689 | 13,783 | |||||
Restricted cash | 15,246 | 19,702 | |||||
Accounts receivable, net of allowance of $1,532 and $2,848, respectively | 30,839 | 23,073 | |||||
Mortgages and notes receivable, net of allowance of $340 and $182, respectively | 26,291 | 25,472 | |||||
Accrued straight-line rents receivable, net of allowance of $1,177 and $813, respectively | 123,047 | 111,233 | |||||
Investments in and advances to unconsolidated affiliates | 35,856 | 66,800 | |||||
Deferred financing and leasing costs, net of accumulated amortization of $90,241 and $75,863, respectively | 227,826 | 166,009 | |||||
Prepaid expenses and other assets, net of accumulated amortization of $12,835 and $12,318, respectively | 42,675 | 44,458 | |||||
Total Assets | $ | 3,896,865 | $ | 3,350,428 | |||
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity: | |||||||
Mortgages and notes payable | $ | 2,050,061 | $ | 1,859,162 | |||
Accounts payable, accrued expenses and other liabilities | 208,536 | 172,146 | |||||
Financing obligations | 28,192 | 29,358 | |||||
Total Liabilities | 2,286,789 | 2,060,666 | |||||
Commitments and contingencies | |||||||
Noncontrolling interests in the Operating Partnership | 103,948 | 124,869 | |||||
Equity: | |||||||
Preferred Stock, $.01 par value, 50,000,000 authorized shares; | |||||||
8.625% Series A Cumulative Redeemable Preferred Shares (liquidation preference $1,000 per share), 29,077 shares issued and outstanding | 29,077 | 29,077 | |||||
Common Stock, $.01 par value, 200,000,000 authorized shares; | |||||||
89,910,944 and 80,311,437 shares issued and outstanding, respectively | 899 | 803 | |||||
Additional paid-in capital | 2,371,925 | 2,040,306 | |||||
Distributions in excess of net income available for common stockholders | (911,948 | ) | (897,418 | ) | |||
Accumulated other comprehensive loss | (5,003 | ) | (12,628 | ) | |||
Total Stockholders’ Equity | 1,484,950 | 1,160,140 | |||||
Noncontrolling interests in consolidated affiliates | 21,178 | 4,753 | |||||
Total Equity | 1,506,128 | 1,164,893 | |||||
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity | $ | 3,896,865 | $ | 3,350,428 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Rental and other revenues | $ | 147,294 | $ | 123,418 | $ | 415,961 | $ | 368,029 | |||||||
Operating expenses: | |||||||||||||||
Rental property and other expenses | 55,365 | 45,904 | 151,802 | 134,102 | |||||||||||
Depreciation and amortization | 48,124 | 37,041 | 130,390 | 110,656 | |||||||||||
General and administrative | 8,969 | 9,725 | 27,948 | 28,298 | |||||||||||
Total operating expenses | 112,458 | 92,670 | 310,140 | 273,056 | |||||||||||
Interest expense: | |||||||||||||||
Contractual | 22,683 | 22,910 | 67,879 | 70,309 | |||||||||||
Amortization of deferred financing costs | 963 | 907 | 2,860 | 2,709 | |||||||||||
Financing obligations | 26 | (205 | ) | 87 | (357 | ) | |||||||||
23,672 | 23,612 | 70,826 | 72,661 | ||||||||||||
Other income: | |||||||||||||||
Interest and other income | 1,582 | 1,916 | 4,982 | 5,883 | |||||||||||
Losses on debt extinguishment | (32 | ) | — | (196 | ) | (973 | ) | ||||||||
1,550 | 1,916 | 4,786 | 4,910 | ||||||||||||
Income from continuing operations before disposition of property and condominiums and acquisition of controlling interest in and equity in earnings/(losses) of unconsolidated affiliates | 12,714 | 9,052 | 39,781 | 27,222 | |||||||||||
Gains/(losses) on disposition of property | 34 | — | (3 | ) | — | ||||||||||
Gains on for-sale residential condominiums | — | 80 | — | 255 | |||||||||||
Gain on acquisition of controlling interest in unconsolidated affiliate | 7,451 | — | 7,451 | — | |||||||||||
Equity in earnings/(losses) of unconsolidated affiliates | (3,173 | ) | 1,324 | (1,824 | ) | 2,670 | |||||||||
Income from continuing operations | 17,026 | 10,456 | 45,405 | 30,147 | |||||||||||
Discontinued operations: | |||||||||||||||
Income from discontinued operations | 1,096 | 2,404 | 3,843 | 9,024 | |||||||||||
Impairments of real estate assets | — | — | (2,194 | ) | — | ||||||||||
Net gains on disposition of discontinued operations | 37,946 | 22,936 | 52,353 | 29,455 | |||||||||||
39,042 | 25,340 | 54,002 | 38,479 | ||||||||||||
Net income | 56,068 | 35,796 | 99,407 | 68,626 | |||||||||||
Net (income) attributable to noncontrolling interests in the Operating Partnership | (1,889 | ) | (1,653 | ) | (3,713 | ) | (3,166 | ) | |||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates | (203 | ) | (159 | ) | (593 | ) | (566 | ) | |||||||
Dividends on Preferred Stock | (627 | ) | (627 | ) | (1,881 | ) | (1,881 | ) | |||||||
Net income available for common stockholders | $ | 53,349 | $ | 33,357 | $ | 93,220 | $ | 63,013 | |||||||
Earnings per Common Share – basic: | |||||||||||||||
Income from continuing operations available for common stockholders | $ | 0.18 | $ | 0.12 | $ | 0.49 | $ | 0.35 | |||||||
Income from discontinued operations available for common stockholders | 0.43 | 0.32 | 0.62 | 0.49 | |||||||||||
Net income available for common stockholders | $ | 0.61 | $ | 0.44 | $ | 1.11 | $ | 0.84 | |||||||
Weighted average Common Shares outstanding – basic | 87,467 | 76,590 | 83,793 | 74,703 | |||||||||||
Earnings per Common Share – diluted: | |||||||||||||||
Income from continuing operations available for common stockholders | $ | 0.18 | $ | 0.12 | $ | 0.49 | $ | 0.35 | |||||||
Income from discontinued operations available for common stockholders | 0.43 | 0.31 | 0.62 | 0.49 | |||||||||||
Net income available for common stockholders | $ | 0.61 | $ | 0.43 | $ | 1.11 | $ | 0.84 | |||||||
Weighted average Common Shares outstanding – diluted | 90,769 | 80,495 | 87,443 | 78,568 | |||||||||||
Dividends declared per Common Share | $ | 0.425 | $ | 0.425 | $ | 1.275 | $ | 1.275 | |||||||
Net income available for common stockholders: | |||||||||||||||
Income from continuing operations available for common stockholders | $ | 15,693 | $ | 9,211 | $ | 41,247 | $ | 26,365 | |||||||
Income from discontinued operations available for common stockholders | 37,656 | 24,146 | 51,973 | 36,648 | |||||||||||
Net income available for common stockholders | $ | 53,349 | $ | 33,357 | $ | 93,220 | $ | 63,013 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Comprehensive income: | |||||||||||||||
Net income | $ | 56,068 | $ | 35,796 | $ | 99,407 | $ | 68,626 | |||||||
Other comprehensive income: | |||||||||||||||
Unrealized gains/(losses) on tax increment financing bond | 97 | (101 | ) | 396 | 482 | ||||||||||
Unrealized gains/(losses) on cash flow hedges | (1,798 | ) | (3,337 | ) | 4,801 | (10,424 | ) | ||||||||
Amortization of cash flow hedges | 840 | 791 | 2,428 | 2,250 | |||||||||||
Total other comprehensive income/(loss) | (861 | ) | (2,647 | ) | 7,625 | (7,692 | ) | ||||||||
Total comprehensive income | 55,207 | 33,149 | 107,032 | 60,934 | |||||||||||
Less-comprehensive (income) attributable to noncontrolling interests | (2,092 | ) | (1,812 | ) | (4,306 | ) | (3,732 | ) | |||||||
Comprehensive income attributable to common stockholders | $ | 53,115 | $ | 31,337 | $ | 102,726 | $ | 57,202 |
Number of Common Shares | Common Stock | Series A Cumulative Redeemable Preferred Shares | Additional Paid-In Capital | Accumulated Other Compre-hensive Loss | Non-controlling Interests in Consolidated Affiliates | Distributions in Excess of Net Income Available for Common Stockholders | Total | |||||||||||||||||||||||
Balance at December 31, 2012 | 80,311,437 | $ | 803 | $ | 29,077 | $ | 2,040,306 | $ | (12,628 | ) | $ | 4,753 | $ | (897,418 | ) | $ | 1,164,893 | |||||||||||||
Issuances of Common Stock, net of tax withholdings | 8,660,546 | 87 | — | 305,514 | — | — | — | 305,601 | ||||||||||||||||||||||
Conversions of Common Units to Common Stock | 789,144 | — | — | 28,788 | — | — | — | 28,788 | ||||||||||||||||||||||
Dividends on Common Stock | — | — | — | — | — | (107,750 | ) | (107,750 | ) | |||||||||||||||||||||
Dividends on Preferred Stock | — | — | — | — | — | (1,881 | ) | (1,881 | ) | |||||||||||||||||||||
Adjustment of noncontrolling interests in the Operating Partnership to fair value | — | — | (8,570 | ) | — | — | — | (8,570 | ) | |||||||||||||||||||||
Distributions to noncontrolling interests in consolidated affiliates | — | — | — | — | (408 | ) | — | (408 | ) | |||||||||||||||||||||
Contributions from noncontrolling interests in consolidated affiliates | — | — | — | — | 16,240 | — | 16,240 | |||||||||||||||||||||||
Issuances of restricted stock | 151,630 | — | — | — | — | — | — | — | ||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | (1,813 | ) | 9 | — | 5,887 | — | — | — | 5,896 | |||||||||||||||||||||
Net (income) attributable to noncontrolling interests in the Operating Partnership | — | — | — | — | — | (3,713 | ) | (3,713 | ) | |||||||||||||||||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates | — | — | — | — | 593 | (593 | ) | — | ||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 99,407 | 99,407 | |||||||||||||||||||||||
Other comprehensive income | — | — | — | 7,625 | — | — | 7,625 | |||||||||||||||||||||||
Total comprehensive income | 107,032 | |||||||||||||||||||||||||||||
Balance at September 30, 2013 | 89,910,944 | $ | 899 | $ | 29,077 | $ | 2,371,925 | $ | (5,003 | ) | $ | 21,178 | $ | (911,948 | ) | $ | 1,506,128 |
Number of Common Shares | Common Stock | Series A Cumulative Redeemable Preferred Shares | Additional Paid-In Capital | Accumulated Other Compre-hensive Loss | Non-controlling Interests in Consolidated Affiliates | Distributions in Excess of Net Income Available for Common Stockholders | Total | |||||||||||||||||||||||
Balance at December 31, 2011 | 72,647,697 | $ | 726 | $ | 29,077 | $ | 1,803,997 | $ | (5,734 | ) | $ | 4,646 | $ | (845,853 | ) | $ | 986,859 | |||||||||||||
Issuances of Common Stock, net of tax withholdings | 5,701,974 | 57 | — | 186,617 | — | — | — | 186,674 | ||||||||||||||||||||||
Conversions of Common Units to Common Stock | 21,366 | — | — | 731 | — | — | — | 731 | ||||||||||||||||||||||
Dividends on Common Stock | — | — | — | — | — | (95,122 | ) | (95,122 | ) | |||||||||||||||||||||
Dividends on Preferred Stock | — | — | — | — | — | (1,881 | ) | (1,881 | ) | |||||||||||||||||||||
Adjustment of noncontrolling interests in the Operating Partnership to fair value | — | — | (12,485 | ) | — | — | — | (12,485 | ) | |||||||||||||||||||||
Distributions to noncontrolling interests in consolidated affiliates | — | — | — | — | (663 | ) | — | (663 | ) | |||||||||||||||||||||
Issuances of restricted stock | 158,885 | — | — | — | — | — | — | — | ||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | 2 | — | 6,462 | — | — | — | 6,464 | |||||||||||||||||||||||
Net (income) attributable to noncontrolling interests in the Operating Partnership | — | — | — | — | — | (3,166 | ) | (3,166 | ) | |||||||||||||||||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates | — | — | — | — | 566 | (566 | ) | — | ||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 68,626 | 68,626 | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | (7,692 | ) | — | — | (7,692 | ) | |||||||||||||||||||||
Total comprehensive income | 60,934 | |||||||||||||||||||||||||||||
Balance at September 30, 2012 | 78,529,922 | $ | 785 | $ | 29,077 | $ | 1,985,322 | $ | (13,426 | ) | $ | 4,549 | $ | (877,962 | ) | $ | 1,128,345 |
Nine Months Ended September 30, | |||||||
2013 | 2012 | ||||||
Operating activities: | |||||||
Net income | $ | 99,407 | $ | 68,626 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 133,556 | 117,764 | |||||
Amortization of lease incentives and acquisition-related intangible assets and liabilities | 258 | 358 | |||||
Share-based compensation expense | 5,896 | 6,464 | |||||
Allowance for losses on accounts and accrued straight-line rents receivable | 1,029 | 1,235 | |||||
Amortization of deferred financing costs | 2,860 | 2,709 | |||||
Amortization of cash flow hedges | 2,428 | 2,250 | |||||
Amortization of mortgages and notes payable fair value adjustments | (1,015 | ) | — | ||||
Impairments of real estate assets | 2,194 | — | |||||
Losses on debt extinguishment | 196 | 973 | |||||
Net gains on disposition of property | (52,350 | ) | (29,455 | ) | |||
Gains on for-sale residential condominiums | — | (255 | ) | ||||
Gain on acquisition of controlling interest in unconsolidated affiliate | (7,451 | ) | — | ||||
Equity in (earnings)/losses of unconsolidated affiliates | 1,824 | (2,670 | ) | ||||
Changes in financing obligations | (591 | ) | (1,010 | ) | |||
Distributions of earnings from unconsolidated affiliates | 3,129 | 3,249 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (508 | ) | 5,310 | ||||
Prepaid expenses and other assets | (2,188 | ) | (3,258 | ) | |||
Accrued straight-line rents receivable | (12,368 | ) | (13,609 | ) | |||
Accounts payable, accrued expenses and other liabilities | 10,206 | (20,663 | ) | ||||
Net cash provided by operating activities | 186,512 | 138,018 | |||||
Investing activities: | |||||||
Investments in acquired real estate and related intangible assets, net of cash acquired | (418,796 | ) | (158,200 | ) | |||
Investment in acquired controlling interest in unconsolidated affiliate | (32,818 | ) | — | ||||
Investments in development in process | (16,634 | ) | (5,392 | ) | |||
Investments in tenant improvements and deferred leasing costs | (77,456 | ) | (61,821 | ) | |||
Investments in building improvements | (38,702 | ) | (27,229 | ) | |||
Net proceeds from disposition of real estate assets | 161,970 | 152,456 | |||||
Net proceeds from disposition of for-sale residential condominiums | — | 3,768 | |||||
Distributions of capital from unconsolidated affiliates | 16,671 | 1,035 | |||||
Investments in and repayments of mortgages and notes receivable | (864 | ) | 1,657 | ||||
Investments in and advances/repayments to/from unconsolidated affiliates | (429 | ) | (3,928 | ) | |||
Changes in restricted cash and other investing activities | 5,484 | 2,904 | |||||
Net cash (used in) investing activities | (401,574 | ) | (94,750 | ) | |||
Financing activities: | |||||||
Dividends on Common Stock | (107,750 | ) | (95,122 | ) | |||
Dividends on Preferred Stock | (1,881 | ) | (1,881 | ) | |||
Distributions to noncontrolling interests in the Operating Partnership | (4,416 | ) | (4,733 | ) | |||
Distributions to noncontrolling interests in consolidated affiliates | (408 | ) | (663 | ) | |||
Proceeds from the issuance of Common Stock | 315,818 | 191,667 | |||||
Costs paid for the issuance of Common Stock | (7,678 | ) | (2,745 | ) | |||
Repurchase of shares related to tax withholdings | (2,539 | ) | (2,248 | ) | |||
Borrowings on revolving credit facility | 695,300 | 219,800 | |||||
Repayments of revolving credit facility | (511,900 | ) | (492,800 | ) | |||
Borrowings on mortgages and notes payable | — | 225,000 | |||||
Repayments of mortgages and notes payable | (157,001 | ) | (77,264 | ) | |||
Payments on financing obligations | (575 | ) | (1,316 | ) | |||
Contributions from noncontrolling interests in consolidated affiliates | 16,240 | — | |||||
Additions to deferred financing costs and other financing activities | (242 | ) | (3,065 | ) | |||
Net cash provided by/(used in) financing activities | 232,968 | (45,370 | ) | ||||
Net increase/(decrease) in cash and cash equivalents | $ | 17,906 | $ | (2,102 | ) |
Nine Months Ended September 30, | |||||||
2013 | 2012 | ||||||
Net increase/(decrease) in cash and cash equivalents | $ | 17,906 | $ | (2,102 | ) | ||
Cash and cash equivalents at beginning of the period | 13,783 | 11,188 | |||||
Cash and cash equivalents at end of the period | $ | 31,689 | $ | 9,086 |
Nine Months Ended September 30, | |||||||
2013 | 2012 | ||||||
Cash paid for interest, net of amounts capitalized | $ | 67,786 | $ | 72,793 |
Nine Months Ended September 30, | |||||||
2013 | 2012 | ||||||
Unrealized gains/(losses) on cash flow hedges | $ | 4,801 | $ | (10,424 | ) | ||
Conversions of Common Units to Common Stock | 28,788 | 731 | |||||
Changes in accrued capital expenditures | 12,778 | 1,829 | |||||
Write-off of fully depreciated real estate assets | 24,498 | 36,918 | |||||
Write-off of fully amortized deferred financing and leasing costs | 17,500 | 14,189 | |||||
Unrealized gains on marketable securities of non-qualified deferred compensation plan | 558 | 310 | |||||
Adjustment of noncontrolling interests in the Operating Partnership to fair value | 8,570 | 12,485 | |||||
Unrealized gains on tax increment financing bond | 396 | 482 | |||||
Assumption of mortgages and notes payable related to acquisition activities | 165,515 | — | |||||
Reduction of advances to unconsolidated affiliates related to acquisition activities | — | 26,000 | |||||
Issuances of Common Units to acquire real estate assets | — | 2,299 | |||||
Reclass of aggregate differences between historical cost basis and the basis reflected at the joint venture level for assets acquired | 8,206 | — |
September 30, 2013 | December 31, 2012 | ||||||
Assets: | |||||||
Real estate assets, at cost: | |||||||
Land | $ | 403,556 | $ | 345,614 | |||
Buildings and tenant improvements | 3,756,552 | 3,172,107 | |||||
Development in process | 56,495 | 21,198 | |||||
Land held for development | 112,079 | 115,416 | |||||
4,328,682 | 3,654,335 | ||||||
Less-accumulated depreciation | (981,602 | ) | (903,837 | ) | |||
Net real estate assets | 3,347,080 | 2,750,498 | |||||
Real estate and other assets, net, held for sale | 16,316 | 129,400 | |||||
Cash and cash equivalents | 31,780 | 13,867 | |||||
Restricted cash | 15,246 | 19,702 | |||||
Accounts receivable, net of allowance of $1,532 and $2,848, respectively | 30,839 | 23,073 | |||||
Mortgages and notes receivable, net of allowance of $340 and $182, respectively | 26,291 | 25,472 | |||||
Accrued straight-line rents receivable, net of allowance of $1,177 and $813, respectively | 123,047 | 111,233 | |||||
Investments in and advances to unconsolidated affiliates | 34,838 | 65,813 | |||||
Deferred financing and leasing costs, net of accumulated amortization of $90,241 and $75,863, respectively | 227,826 | 166,009 | |||||
Prepaid expenses and other assets, net of accumulated amortization of $12,835 and $12,318, respectively | 42,628 | 44,458 | |||||
Total Assets | $ | 3,895,891 | $ | 3,349,525 | |||
Liabilities, Redeemable Operating Partnership Units and Equity: | |||||||
Mortgages and notes payable | $ | 2,050,061 | $ | 1,859,162 | |||
Accounts payable, accrued expenses and other liabilities | 208,467 | 172,026 | |||||
Financing obligations | 28,192 | 29,358 | |||||
Total Liabilities | 2,286,720 | 2,060,546 | |||||
Commitments and contingencies | |||||||
Redeemable Operating Partnership Units: | |||||||
Common Units, 2,943,872 and 3,733,016 outstanding, respectively | 103,948 | 124,869 | |||||
Series A Preferred Units (liquidation preference $1,000 per unit), 29,077 units issued and outstanding | 29,077 | 29,077 | |||||
Total Redeemable Operating Partnership Units | 133,025 | 153,946 | |||||
Equity: | |||||||
Common Units: | |||||||
General partner Common Units, 924,460 and 836,356 outstanding, respectively | 14,598 | 11,427 | |||||
Limited partner Common Units, 88,577,675 and 79,066,272 outstanding, respectively | 1,445,373 | 1,131,481 | |||||
Accumulated other comprehensive loss | (5,003 | ) | (12,628 | ) | |||
Noncontrolling interests in consolidated affiliates | 21,178 | 4,753 | |||||
Total Equity | 1,476,146 | 1,135,033 | |||||
Total Liabilities, Redeemable Operating Partnership Units and Equity | $ | 3,895,891 | $ | 3,349,525 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Rental and other revenues | $ | 147,294 | $ | 123,418 | $ | 415,961 | $ | 368,029 | |||||||
Operating expenses: | |||||||||||||||
Rental property and other expenses | 55,343 | 45,830 | 151,784 | 133,907 | |||||||||||
Depreciation and amortization | 48,124 | 37,041 | 130,390 | 110,656 | |||||||||||
General and administrative | 8,991 | 9,799 | 27,966 | 28,493 | |||||||||||
Total operating expenses | 112,458 | 92,670 | 310,140 | 273,056 | |||||||||||
Interest expense: | |||||||||||||||
Contractual | 22,683 | 22,910 | 67,879 | 70,309 | |||||||||||
Amortization of deferred financing costs | 963 | 907 | 2,860 | 2,709 | |||||||||||
Financing obligations | 26 | (205 | ) | 87 | (357 | ) | |||||||||
23,672 | 23,612 | 70,826 | 72,661 | ||||||||||||
Other income: | |||||||||||||||
Interest and other income | 1,582 | 1,916 | 4,982 | 5,883 | |||||||||||
Losses on debt extinguishment | (32 | ) | — | (196 | ) | (973 | ) | ||||||||
1,550 | 1,916 | 4,786 | 4,910 | ||||||||||||
Income from continuing operations before disposition of property and condominiums and acquisition of controlling interest in and equity in earnings/(losses) of unconsolidated affiliates | 12,714 | 9,052 | 39,781 | 27,222 | |||||||||||
Gains/(losses) on disposition of property | 34 | — | (3 | ) | — | ||||||||||
Gains on for-sale residential condominiums | — | 80 | — | 255 | |||||||||||
Gain on acquisition of controlling interest in unconsolidated affiliate | 7,451 | — | 7,451 | — | |||||||||||
Equity in earnings/(losses) of unconsolidated affiliates | (3,174 | ) | 1,328 | (1,875 | ) | 2,679 | |||||||||
Income from continuing operations | 17,025 | 10,460 | 45,354 | 30,156 | |||||||||||
Discontinued operations: | |||||||||||||||
Income from discontinued operations | 1,096 | 2,404 | 3,843 | 9,024 | |||||||||||
Impairments of real estate assets | — | — | (2,194 | ) | — | ||||||||||
Net gains on disposition of discontinued operations | 37,946 | 22,936 | 52,353 | 29,455 | |||||||||||
39,042 | 25,340 | 54,002 | 38,479 | ||||||||||||
Net income | 56,067 | 35,800 | 99,356 | 68,635 | |||||||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates | (203 | ) | (159 | ) | (593 | ) | (566 | ) | |||||||
Distributions on Preferred Units | (627 | ) | (627 | ) | (1,881 | ) | (1,881 | ) | |||||||
Net income available for common unitholders | $ | 55,237 | $ | 35,014 | $ | 96,882 | $ | 66,188 | |||||||
Earnings per Common Unit – basic: | |||||||||||||||
Income from continuing operations available for common unitholders | $ | 0.18 | $ | 0.12 | $ | 0.49 | $ | 0.36 | |||||||
Income from discontinued operations available for common unitholders | 0.43 | 0.32 | 0.62 | 0.49 | |||||||||||
Net income available for common unitholders | $ | 0.61 | $ | 0.44 | $ | 1.11 | $ | 0.85 | |||||||
Weighted average Common Units outstanding – basic | 90,259 | 79,949 | 86,920 | 78,032 | |||||||||||
Earnings per Common Unit – diluted: | |||||||||||||||
Income from continuing operations available for common unitholders | $ | 0.18 | $ | 0.12 | $ | 0.49 | $ | 0.36 | |||||||
Income from discontinued operations available for common unitholders | 0.43 | 0.32 | 0.62 | 0.49 | |||||||||||
Net income available for common unitholders | $ | 0.61 | $ | 0.44 | $ | 1.11 | $ | 0.85 | |||||||
Weighted average Common Units outstanding – diluted | 90,360 | 80,086 | 87,034 | 78,159 | |||||||||||
Distributions declared per Common Unit | $ | 0.425 | $ | 0.425 | $ | 1.275 | $ | 1.275 | |||||||
Net income available for common unitholders: | |||||||||||||||
Income from continuing operations available for common unitholders | $ | 16,195 | $ | 9,674 | $ | 42,880 | $ | 27,709 | |||||||
Income from discontinued operations available for common unitholders | 39,042 | 25,340 | 54,002 | 38,479 | |||||||||||
Net income available for common unitholders | $ | 55,237 | $ | 35,014 | $ | 96,882 | $ | 66,188 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Comprehensive income: | |||||||||||||||
Net income | $ | 56,067 | $ | 35,800 | $ | 99,356 | $ | 68,635 | |||||||
Other comprehensive income: | |||||||||||||||
Unrealized gains/(losses) on tax increment financing bond | 97 | (101 | ) | 396 | 482 | ||||||||||
Unrealized gains/(losses) on cash flow hedges | (1,798 | ) | (3,337 | ) | 4,801 | (10,424 | ) | ||||||||
Amortization of cash flow hedges | 840 | 791 | 2,428 | 2,250 | |||||||||||
Total other comprehensive income/(loss) | (861 | ) | (2,647 | ) | 7,625 | (7,692 | ) | ||||||||
Total comprehensive income | 55,206 | 33,153 | 106,981 | 60,943 | |||||||||||
Less-comprehensive (income) attributable to noncontrolling interests | (203 | ) | (159 | ) | (593 | ) | (566 | ) | |||||||
Comprehensive income attributable to common unitholders | $ | 55,003 | $ | 32,994 | $ | 106,388 | $ | 60,377 |
Common Units | Accumulated Other Comprehensive Loss | Noncontrolling Interests in Consolidated Affiliates | Total Partners’ Capital | ||||||||||||||||
General Partners’ Capital | Limited Partners’ Capital | ||||||||||||||||||
Balance at December 31, 2012 | $ | 11,427 | $ | 1,131,481 | $ | (12,628 | ) | $ | 4,753 | $ | 1,135,033 | ||||||||
Issuances of Common Units, net of tax withholdings | 3,056 | 302,545 | — | — | 305,601 | ||||||||||||||
Distributions paid on Common Units | (1,117 | ) | (110,528 | ) | — | — | (111,645 | ) | |||||||||||
Distributions paid on Preferred Units | (19 | ) | (1,862 | ) | — | — | (1,881 | ) | |||||||||||
Share-based compensation expense, net of forfeitures | 59 | 5,837 | — | — | 5,896 | ||||||||||||||
Distributions to noncontrolling interests in consolidated affiliates | — | — | — | (408 | ) | (408 | ) | ||||||||||||
Contributions from noncontrolling interests in consolidated affiliates | — | — | — | 16,240 | 16,240 | ||||||||||||||
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner | 204 | 20,125 | — | — | 20,329 | ||||||||||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates | (6 | ) | (587 | ) | — | 593 | — | ||||||||||||
Comprehensive income: | |||||||||||||||||||
Net income | 994 | 98,362 | — | — | 99,356 | ||||||||||||||
Other comprehensive income | — | — | 7,625 | — | 7,625 | ||||||||||||||
Total comprehensive income | 106,981 | ||||||||||||||||||
Balance at September 30, 2013 | $ | 14,598 | $ | 1,445,373 | $ | (5,003 | ) | $ | 21,178 | $ | 1,476,146 |
Common Units | Accumulated Other Comprehensive Loss | Noncontrolling Interests in Consolidated Affiliates | Total Partners’ Capital | ||||||||||||||||
General Partners’ Capital | Limited Partners’ Capital | ||||||||||||||||||
Balance at December 31, 2011 | $ | 9,575 | $ | 948,187 | $ | (5,734 | ) | $ | 4,646 | $ | 956,674 | ||||||||
Issuances of Common Units, net of tax withholdings | 1,890 | 187,083 | — | — | 188,973 | ||||||||||||||
Distributions paid on Common Units | (994 | ) | (98,340 | ) | — | — | (99,334 | ) | |||||||||||
Distributions paid on Preferred Units | (19 | ) | (1,862 | ) | — | — | (1,881 | ) | |||||||||||
Share-based compensation expense, net of forfeitures | 65 | 6,399 | — | — | 6,464 | ||||||||||||||
Distributions to noncontrolling interests in consolidated affiliates | — | — | — | (663 | ) | (663 | ) | ||||||||||||
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner | (128 | ) | (12,686 | ) | — | — | (12,814 | ) | |||||||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates | (6 | ) | (560 | ) | — | 566 | — | ||||||||||||
Comprehensive income: | |||||||||||||||||||
Net income | 686 | 67,949 | — | — | 68,635 | ||||||||||||||
Other comprehensive loss | — | — | (7,692 | ) | — | (7,692 | ) | ||||||||||||
Total comprehensive income | 60,943 | ||||||||||||||||||
Balance at September 30, 2012 | $ | 11,069 | $ | 1,096,170 | $ | (13,426 | ) | $ | 4,549 | $ | 1,098,362 |
Nine Months Ended September 30, | |||||||
2013 | 2012 | ||||||
Operating activities: | |||||||
Net income | $ | 99,356 | $ | 68,635 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 133,556 | 117,764 | |||||
Amortization of lease incentives and acquisition-related intangible assets and liabilities | 258 | 358 | |||||
Share-based compensation expense | 5,896 | 6,464 | |||||
Allowance for losses on accounts and accrued straight-line rents receivable | 1,029 | 1,235 | |||||
Amortization of deferred financing costs | 2,860 | 2,709 | |||||
Amortization of cash flow hedges | 2,428 | 2,250 | |||||
Amortization of mortgages and notes payable fair value adjustments | (1,015 | ) | — | ||||
Impairments of real estate assets | 2,194 | — | |||||
Losses on debt extinguishment | 196 | 973 | |||||
Net gains on disposition of property | (52,350 | ) | (29,455 | ) | |||
Gains on for-sale residential condominiums | — | (255 | ) | ||||
Gain on acquisition of controlling interest in unconsolidated affiliate | (7,451 | ) | — | ||||
Equity in (earnings)/losses of unconsolidated affiliates | 1,875 | (2,679 | ) | ||||
Changes in financing obligations | (591 | ) | (1,010 | ) | |||
Distributions of earnings from unconsolidated affiliates | 3,109 | 3,230 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (508 | ) | 5,310 | ||||
Prepaid expenses and other assets | (2,141 | ) | (3,216 | ) | |||
Accrued straight-line rents receivable | (12,368 | ) | (13,609 | ) | |||
Accounts payable, accrued expenses and other liabilities | 10,257 | (20,753 | ) | ||||
Net cash provided by operating activities | 186,590 | 137,951 | |||||
Investing activities: | |||||||
Investments in acquired real estate and related intangible assets, net of cash acquired | (418,796 | ) | (158,200 | ) | |||
Investment in acquired controlling interest in unconsolidated affiliate | (32,818 | ) | — | ||||
Investments in development in process | (16,634 | ) | (5,392 | ) | |||
Investments in tenant improvements and deferred leasing costs | (77,456 | ) | (61,821 | ) | |||
Investments in building improvements | (38,702 | ) | (27,229 | ) | |||
Net proceeds from disposition of real estate assets | 161,970 | 152,456 | |||||
Net proceeds from disposition of for-sale residential condominiums | — | 3,768 | |||||
Distributions of capital from unconsolidated affiliates | 16,671 | 1,035 | |||||
Investments in and repayments of mortgages and notes receivable | (864 | ) | 1,657 | ||||
Investments in and advances/repayments to/from unconsolidated affiliates | (429 | ) | (3,928 | ) | |||
Changes in restricted cash and other investing activities | 5,484 | 2,904 | |||||
Net cash (used in) investing activities | (401,574 | ) | (94,750 | ) | |||
Financing activities: | |||||||
Distributions on Common Units | (111,645 | ) | (99,334 | ) | |||
Distributions on Preferred Units | (1,881 | ) | (1,881 | ) | |||
Distributions to noncontrolling interests in consolidated affiliates | (408 | ) | (663 | ) | |||
Proceeds from the issuance of Common Units | 315,818 | 191,667 | |||||
Costs paid for the issuance of Common Units | (7,678 | ) | (2,745 | ) | |||
Repurchase of units related to tax withholdings | (2,539 | ) | (2,248 | ) | |||
Borrowings on revolving credit facility | 695,300 | 219,800 | |||||
Repayments of revolving credit facility | (511,900 | ) | (492,800 | ) | |||
Borrowings on mortgages and notes payable | — | 225,000 | |||||
Repayments of mortgages and notes payable | (157,001 | ) | (77,264 | ) | |||
Payments on financing obligations | (575 | ) | (1,316 | ) | |||
Contributions from noncontrolling interests in consolidated affiliates | 16,240 | — | |||||
Additions to deferred financing costs and other financing activities | (834 | ) | (3,394 | ) | |||
Net cash provided by/(used in) financing activities | 232,897 | (45,178 | ) | ||||
Net increase/(decrease) in cash and cash equivalents | $ | 17,913 | $ | (1,977 | ) |
Nine Months Ended September 30, | |||||||
2013 | 2012 | ||||||
Net increase/(decrease) in cash and cash equivalents | $ | 17,913 | $ | (1,977 | ) | ||
Cash and cash equivalents at beginning of the period | 13,867 | 11,151 | |||||
Cash and cash equivalents at end of the period | $ | 31,780 | $ | 9,174 |
Nine Months Ended September 30, | |||||||
2013 | 2012 | ||||||
Cash paid for interest, net of amounts capitalized | $ | 67,786 | $ | 72,793 |
Nine Months Ended September 30, | |||||||
2013 | 2012 | ||||||
Unrealized gains/(losses) on cash flow hedges | $ | 4,801 | $ | (10,424 | ) | ||
Changes in accrued capital expenditures | 12,778 | 1,829 | |||||
Write-off of fully depreciated real estate assets | 24,498 | 36,918 | |||||
Write-off of fully amortized deferred financing and leasing costs | 17,500 | 14,189 | |||||
Unrealized gains on marketable securities of non-qualified deferred compensation plan | 558 | 310 | |||||
Adjustment of Redeemable Common Units to fair value | (20,921 | ) | 10,187 | ||||
Unrealized gains on tax increment financing bond | 396 | 482 | |||||
Assumption of mortgages and notes payable related to acquisition activities | 165,515 | — | |||||
Reduction of advances to unconsolidated affiliates related to acquisition activities | — | 26,000 | |||||
Issuances of Common Units to acquire real estate assets | — | 2,299 | |||||
Reclass of aggregate differences between historical cost basis and the basis reflected at the joint venture level for assets acquired | 8,206 | — |
• | an office property in Nashville, TN encompassing 520,000 square feet for a net purchase price of $150.1 million; and |
• | our DLF II joint venture partner's 57.0% interest in two office properties in Atlanta, GA encompassing 505,000 square feet for a net purchase price of $44.5 million, including the assumption of secured debt recorded at fair value of $37.6 million, with an effective interest rate of 3.34%. This debt matures in April 2015. |
• | two office properties in Tampa, FL encompassing 372,000 square feet for a purchase price of $52.5 million; |
• | two office properties in Greensboro, NC encompassing 195,000 square feet for a purchase price of $30.8 million; and |
• | five acres of development land in Memphis, TN for a purchase price of $4.8 million. |
Total Purchase Price Allocation | |||
Real estate assets | $ | 445,396 | |
Acquisition-related intangible assets (in deferred financing and leasing costs) | 50,595 | ||
Mortgages and notes payable | (127,891 | ) | |
Acquisition-related below market lease liabilities (in accounts payable, accrued expenses and other liabilities) | (17,818 | ) | |
Total allocation | $ | 350,282 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Pro forma rental and other revenues | $ | 152,221 | $ | 162,422 | $ | 451,317 | $ | 410,027 | |||||||
Pro forma net income | $ | 49,818 | $ | 23,952 |