x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Indiana (Duke Realty Corporation) | 35-1740409 (Duke Realty Corporation) | |
Indiana (Duke Realty Limited Partnership) | 35-1898425 (Duke Realty Limited Partnership) | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) | |
600 East 96thStreet, Suite 100 Indianapolis, Indiana | 46240 | |
(Address of Principal Executive Offices) | (Zip Code) |
Duke Realty Corporation | Yes x | No o | Duke Realty Limited Partnership | Yes x | No o |
Duke Realty Corporation | Yes x | No o | Duke Realty Limited Partnership | Yes x | No o |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer x | Smaller reporting company o |
Duke Realty Corporation | Yes o | No x | Duke Realty Limited Partnership | Yes o | No x |
Class | Outstanding Common Shares of Duke Realty Corporation at May 2, 2014 | |
Common Stock, $.01 par value per share | 329,489,363 |
• | enhances investors' understanding of the General Partner and the Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; |
• | eliminates duplicative disclosure and provides a more streamlined and readable presentation of information since a substantial portion of the Company's disclosure applies to both the General Partner and the Partnership; and |
• | creates time and cost efficiencies through the preparation of one combined report instead of two separate reports. |
Page | |||
Duke Realty Corporation: | |||
Duke Realty Limited Partnership: | |||
Duke Realty Corporation and Duke Realty Limited Partnership: | |||
March 31, 2014 | December 31, 2013 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Real estate investments: | |||||||
Land and improvements | $ | 1,457,690 | $ | 1,438,007 | |||
Buildings and tenant improvements | 5,605,272 | 5,531,726 | |||||
Construction in progress | 277,398 | 256,895 | |||||
Investments in and advances to unconsolidated companies | 336,060 | 342,947 | |||||
Undeveloped land | 570,718 | 590,052 | |||||
8,247,138 | 8,159,627 | ||||||
Accumulated depreciation | (1,419,088 | ) | (1,368,406 | ) | |||
Net real estate investments | 6,828,050 | 6,791,221 | |||||
Real estate investments and other assets held-for-sale | 34,826 | 57,466 | |||||
Cash and cash equivalents | 19,474 | 19,275 | |||||
Accounts receivable, net of allowance of $1,888 and $1,576 | 34,763 | 26,173 | |||||
Straight-line rent receivable, net of allowance of $6,404 and $9,350 | 126,286 | 118,251 | |||||
Receivables on construction contracts, including retentions | 27,833 | 19,209 | |||||
Deferred financing costs, net of accumulated amortization of $39,553 and $37,016 | 33,764 | 36,250 | |||||
Deferred leasing and other costs, net of accumulated amortization of $305,316 and $394,049 | 457,508 | 466,979 | |||||
Escrow deposits and other assets | 204,859 | 217,790 | |||||
$ | 7,767,363 | $ | 7,752,614 | ||||
LIABILITIES AND EQUITY | |||||||
Indebtedness: | |||||||
Secured debt | $ | 1,077,468 | $ | 1,100,124 | |||
Unsecured debt | 3,065,742 | 3,066,252 | |||||
Unsecured line of credit | 180,000 | 88,000 | |||||
4,323,210 | 4,254,376 | ||||||
Liabilities related to real estate investments held-for-sale | 179 | 2,075 | |||||
Construction payables and amounts due subcontractors, including retentions | 72,695 | 69,380 | |||||
Accrued real estate taxes | 77,169 | 74,696 | |||||
Accrued interest | 36,468 | 52,824 | |||||
Other accrued expenses | 52,118 | 67,495 | |||||
Other liabilities | 138,598 | 142,589 | |||||
Tenant security deposits and prepaid rents | 50,264 | 44,550 | |||||
Total liabilities | 4,750,701 | 4,707,985 | |||||
Shareholders' equity: | |||||||
Preferred shares ($.01 par value); 5,000 shares authorized; 1,716 and 1,791 shares issued and outstanding | 428,926 | 447,683 | |||||
Common shares ($.01 par value); 400,000 shares authorized; 328,480 and 326,399 shares issued and outstanding | 3,285 | 3,264 | |||||
Additional paid-in capital | 4,649,914 | 4,620,964 | |||||
Accumulated other comprehensive income | 3,832 | 4,119 | |||||
Distributions in excess of net income | (2,100,245 | ) | (2,062,787 | ) | |||
Total shareholders' equity | 2,985,712 | 3,013,243 | |||||
Noncontrolling interests | 30,950 | 31,386 | |||||
Total equity | 3,016,662 | 3,044,629 | |||||
$ | 7,767,363 | $ | 7,752,614 |
2014 | 2013 | ||||||
Revenues: | |||||||
Rental and related revenue | $ | 237,350 | $ | 209,879 | |||
General contractor and service fee revenue | 55,820 | 47,404 | |||||
293,170 | 257,283 | ||||||
Expenses: | |||||||
Rental expenses | 50,267 | 38,861 | |||||
Real estate taxes | 32,467 | 29,040 | |||||
General contractor and other services expenses | 47,271 | 38,341 | |||||
Depreciation and amortization | 98,059 | 92,993 | |||||
228,064 | 199,235 | ||||||
Other operating activities: | |||||||
Equity in earnings of unconsolidated companies | 2,321 | 49,378 | |||||
Gain on sale of properties | 15,853 | 168 | |||||
Gain on land sales | 152 | — | |||||
Undeveloped land carrying costs | (2,124 | ) | (2,198 | ) | |||
Other operating expenses | (92 | ) | (68 | ) | |||
General and administrative expenses | (14,694 | ) | (13,145 | ) | |||
1,416 | 34,135 | ||||||
Operating income | 66,522 | 92,183 | |||||
Other income (expenses): | |||||||
Interest and other income, net | 351 | 153 | |||||
Interest expense | (55,257 | ) | (57,181 | ) | |||
Acquisition-related activity | (14 | ) | 643 | ||||
Income from continuing operations before income taxes | 11,602 | 35,798 | |||||
Income tax expense | (2,674 | ) | — | ||||
Income from continuing operations | 8,928 | 35,798 | |||||
Discontinued operations: | |||||||
Loss before gain on sales | (132 | ) | (629 | ) | |||
Gain on sale of depreciable properties, net of tax | 16,775 | 8,954 | |||||
Income from discontinued operations | 16,643 | 8,325 | |||||
Net income | 25,571 | 44,123 | |||||
Dividends on preferred shares | (7,037 | ) | (9,550 | ) | |||
Adjustments for redemption/repurchase of preferred shares | 483 | (5,932 | ) | ||||
Net income attributable to noncontrolling interests | (334 | ) | (598 | ) | |||
Net income attributable to common shareholders | $ | 18,683 | $ | 28,043 | |||
Basic net income per common share: | |||||||
Continuing operations attributable to common shareholders | $ | 0.01 | $ | 0.06 | |||
Discontinued operations attributable to common shareholders | 0.05 | 0.03 | |||||
Total | $ | 0.06 | $ | 0.09 | |||
Diluted net income per common share: | |||||||
Continuing operations attributable to common shareholders | $ | 0.01 | $ | 0.06 | |||
Discontinued operations attributable to common shareholders | 0.05 | 0.03 | |||||
Total | $ | 0.06 | $ | 0.09 | |||
Weighted average number of common shares outstanding | 327,106 | 314,936 | |||||
Weighted average number of common shares and potential dilutive securities | 331,716 | 319,571 | |||||
Comprehensive income: | |||||||
Net income | $ | 25,571 | $ | 44,123 | |||
Other comprehensive income (loss): | |||||||
Amortization of interest contracts | (287 | ) | 457 | ||||
Other | — | 80 | |||||
Total other comprehensive income (loss) | (287 | ) | 537 | ||||
Comprehensive income | $ | 25,284 | $ | 44,660 |
2014 | 2013 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 25,571 | $ | 44,123 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation of buildings and tenant improvements | 71,393 | 70,548 | |||||
Amortization of deferred leasing and other costs | 26,871 | 29,232 | |||||
Amortization of deferred financing costs | 2,499 | 3,507 | |||||
Straight-line rental income and expense, net | (5,974 | ) | (4,839 | ) | |||
Gain on acquisitions | — | (962 | ) | ||||
Gains on land and depreciated property sales, net of tax | (30,106 | ) | (9,122 | ) | |||
Third-party construction contracts, net | 411 | 11,138 | |||||
Other accrued revenues and expenses, net | (33,911 | ) | (26,261 | ) | |||
Operating distributions received in excess of (less than) equity in earnings from unconsolidated companies | 2,383 | (43,930 | ) | ||||
Net cash provided by operating activities | 59,137 | 73,434 | |||||
Cash flows from investing activities: | |||||||
Development of real estate investments | (105,413 | ) | (103,684 | ) | |||
Acquisition of real estate investments and related intangible assets | (17,224 | ) | (35,495 | ) | |||
Acquisition of undeveloped land | (2,270 | ) | (5,149 | ) | |||
Second generation tenant improvements, leasing costs and building improvements | (19,631 | ) | (17,119 | ) | |||
Other deferred leasing costs | (8,706 | ) | (11,079 | ) | |||
Other assets | 5,539 | (5,124 | ) | ||||
Proceeds from land and depreciated property sales, net | 70,673 | 61,931 | |||||
Capital distributions from unconsolidated companies | 2,546 | 89,237 | |||||
Capital contributions and advances to unconsolidated companies | (420 | ) | (4,846 | ) | |||
Net cash used for investing activities | (74,906 | ) | (31,328 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of common shares, net | 23,783 | 574,685 | |||||
Payments for redemption/repurchase of preferred shares | (17,656 | ) | (177,955 | ) | |||
Proceeds from unsecured debt | — | 250,000 | |||||
Payments on unsecured debt | (511 | ) | (480 | ) | |||
Proceeds from secured debt financings | — | 1,933 | |||||
Payments on secured indebtedness including principal amortization | (21,471 | ) | (17,486 | ) | |||
Borrowings (payments) on line of credit, net | 92,000 | (285,000 | ) | ||||
Distributions to common shareholders | (55,596 | ) | (54,678 | ) | |||
Distributions to preferred shareholders | (7,140 | ) | (9,550 | ) | |||
Distributions to noncontrolling interests | (770 | ) | (961 | ) | |||
Change in book overdrafts | 3,629 | (45,272 | ) | ||||
Deferred financing costs | (300 | ) | (4,064 | ) | |||
Net cash provided by financing activities | 15,968 | 231,172 | |||||
Net increase in cash and cash equivalents | 199 | 273,278 | |||||
Cash and cash equivalents at beginning of period | 19,275 | 33,889 | |||||
Cash and cash equivalents at end of period | $ | 19,474 | $ | 307,167 | |||
Non-cash investing and financing activities: | |||||||
Assumption of other liabilities in real estate acquisitions | $ | 76 | $ | 50 | |||
Carrying amount of pre-existing ownership interest in acquired property | $ | — | $ | 630 | |||
Conversion of Limited Partner Units to common shares | $ | — | $ | 337 |
Common Shareholders | |||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Distributions in Excess of Net Income | Non- Controlling Interests | Total | |||||||||||||||||||||
Balance at December 31, 2013 | $ | 447,683 | $ | 3,264 | $ | 4,620,964 | $ | 4,119 | $ | (2,062,787 | ) | $ | 31,386 | $ | 3,044,629 | ||||||||||||
Net income | — | — | — | — | 25,237 | 334 | 25,571 | ||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | (287 | ) | — | — | (287 | ) | ||||||||||||||||||
Issuance of common shares | — | 14 | 23,769 | — | — | — | 23,783 | ||||||||||||||||||||
Stock-based compensation plan activity | — | 7 | 4,563 | — | (545 | ) | — | 4,025 | |||||||||||||||||||
Distributions to preferred shareholders | — | — | — | — | (7,037 | ) | — | (7,037 | ) | ||||||||||||||||||
Repurchase of preferred shares | (18,757 | ) | — | 618 | — | 483 | — | (17,656 | ) | ||||||||||||||||||
Distributions to common shareholders ($0.17 per share) | — | — | — | — | (55,596 | ) | — | (55,596 | ) | ||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | (770 | ) | (770 | ) | ||||||||||||||||||
Balance at March 31, 2014 | $ | 428,926 | $ | 3,285 | $ | 4,649,914 | $ | 3,832 | $ | (2,100,245 | ) | $ | 30,950 | $ | 3,016,662 |
March 31, 2014 | December 31, 2013 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Real estate investments: | |||||||
Land and improvements | $ | 1,457,690 | $ | 1,438,007 | |||
Buildings and tenant improvements | 5,605,272 | 5,531,726 | |||||
Construction in progress | 277,398 | 256,895 | |||||
Investments in and advances to unconsolidated companies | 336,060 | 342,947 | |||||
Undeveloped land | 570,718 | 590,052 | |||||
8,247,138 | 8,159,627 | ||||||
Accumulated depreciation | (1,419,088 | ) | (1,368,406 | ) | |||
Net real estate investments | 6,828,050 | 6,791,221 | |||||
Real estate investments and other assets held-for-sale | 34,826 | 57,466 | |||||
Cash and cash equivalents | 19,474 | 19,275 | |||||
Accounts receivable, net of allowance of $1,888 and $1,576 | 34,763 | 26,173 | |||||
Straight-line rent receivable, net of allowance of $6,404 and $9,350 | 126,286 | 118,251 | |||||
Receivables on construction contracts, including retentions | 27,833 | 19,209 | |||||
Deferred financing costs, net of accumulated amortization of $39,553 and $37,016 | 33,764 | 36,250 | |||||
Deferred leasing and other costs, net of accumulated amortization of $305,316 and $394,049 | 457,508 | 466,979 | |||||
Escrow deposits and other assets | 204,859 | 217,790 | |||||
$ | 7,767,363 | $ | 7,752,614 | ||||
LIABILITIES AND EQUITY | |||||||
Indebtedness: | |||||||
Secured debt | $ | 1,077,468 | $ | 1,100,124 | |||
Unsecured debt | 3,065,742 | 3,066,252 | |||||
Unsecured line of credit | 180,000 | 88,000 | |||||
4,323,210 | 4,254,376 | ||||||
Liabilities related to real estate investments held-for-sale | 179 | 2,075 | |||||
Construction payables and amounts due subcontractors, including retentions | 72,695 | 69,380 | |||||
Accrued real estate taxes | 77,169 | 74,696 | |||||
Accrued interest | 36,468 | 52,824 | |||||
Other accrued expenses | 52,362 | 67,739 | |||||
Other liabilities | 138,598 | 142,589 | |||||
Tenant security deposits and prepaid rents | 50,264 | 44,550 | |||||
Total liabilities | 4,750,945 | 4,708,229 | |||||
Partners' equity: | |||||||
General Partner: | |||||||
Common equity (328,480 and 326,399 General Partner Units issued and outstanding) | 2,556,883 | 2,565,370 | |||||
Preferred equity (1,716 and 1,791 Preferred Units issued and outstanding) | 428,926 | 447,683 | |||||
2,985,809 | 3,013,053 | ||||||
Limited Partners' common equity (4,387 and 4,387 Limited Partner Units issued and outstanding) | 19,662 | 20,158 | |||||
Accumulated other comprehensive income | 3,832 | 4,119 | |||||
Total partners' equity | 3,009,303 | 3,037,330 | |||||
Noncontrolling interests | 7,115 | 7,055 | |||||
Total equity | 3,016,418 | 3,044,385 | |||||
$ | 7,767,363 | $ | 7,752,614 |
2014 | 2013 | |||||||
Revenues: | ||||||||
Rental and related revenue | $ | 237,350 | $ | 209,879 | ||||
General contractor and service fee revenue | 55,820 | 47,404 | ||||||
293,170 | 257,283 | |||||||
Expenses: | ||||||||
Rental expenses | 50,267 | 38,861 | ||||||
Real estate taxes | 32,467 | 29,040 | ||||||
General contractor and other services expenses | 47,271 | 38,341 | ||||||
Depreciation and amortization | 98,059 | 92,993 | ||||||
228,064 | 199,235 | |||||||
Other operating activities: | ||||||||
Equity in earnings of unconsolidated companies | 2,321 | 49,378 | ||||||
Gain on sale of properties | 15,853 | 168 | ||||||
Gain on land sales | 152 | — | ||||||
Undeveloped land carrying costs | (2,124 | ) | (2,198 | ) | ||||
Other operating expenses | (92 | ) | (68 | ) | ||||
General and administrative expenses | (14,694 | ) | (13,145 | ) | ||||
1,416 | 34,135 | |||||||
Operating income | 66,522 | 92,183 | ||||||
Other income (expenses): | ||||||||
Interest and other income, net | 351 | 153 | ||||||
Interest expense | (55,257 | ) | (57,181 | ) | ||||
Acquisition-related activity | (14 | ) | 643 | |||||
Income from continuing operations before income taxes | 11,602 | 35,798 | ||||||
Income tax expense | (2,674 | ) | — | |||||
Income from continuing operations | 8,928 | 35,798 | ||||||
Discontinued operations: | ||||||||
Loss before gain on sales | (132 | ) | (629 | ) | ||||
Gain on sale of depreciable properties, net of tax | 16,775 | 8,954 | ||||||
Income from discontinued operations | 16,643 | 8,325 | ||||||
Net income | 25,571 | 44,123 | ||||||
Distributions on Preferred Units | (7,037 | ) | (9,550 | ) | ||||
Adjustments for redemption/repurchase of Preferred Units | 483 | (5,932 | ) | |||||
Net income attributable to noncontrolling interests | (84 | ) | (206 | ) | ||||
Net income attributable to common unitholders | $ | 18,933 | $ | 28,435 | ||||
Basic net income per Common Unit: | ||||||||
Continuing operations attributable to common unitholders | $ | 0.01 | $ | 0.06 | ||||
Discontinued operations attributable to common unitholders | 0.05 | 0.03 | ||||||
Total | $ | 0.06 | $ | 0.09 | ||||
Diluted net income per Common Unit: | ||||||||
Continuing operations attributable to common unitholders | $ | 0.01 | $ | 0.06 | ||||
Discontinued operations attributable to common unitholders | 0.05 | 0.03 | ||||||
Total | $ | 0.06 | $ | 0.09 | ||||
Weighted average number of Common Units outstanding | 331,493 | 319,341 | ||||||
Weighted average number of Common Units and potential dilutive securities | 331,716 | 319,571 | ||||||
Comprehensive income: | ||||||||
Net income | $ | 25,571 | $ | 44,123 | ||||
Other comprehensive income (loss): | ||||||||
Amortization of interest contracts | (287 | ) | 457 | |||||
Other | — | 80 | ||||||
Total other comprehensive income (loss) | (287 | ) | 537 | |||||
Comprehensive income | $ | 25,284 | $ | 44,660 |
2014 | 2013 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 25,571 | $ | 44,123 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation of buildings and tenant improvements | 71,393 | 70,548 | |||||
Amortization of deferred leasing and other costs | 26,871 | 29,232 | |||||
Amortization of deferred financing costs | 2,499 | 3,507 | |||||
Straight-line rental income and expense, net | (5,974 | ) | (4,839 | ) | |||
Gain on acquisitions | — | (962 | ) | ||||
Gains on land and depreciated property sales, net of tax | (30,106 | ) | (9,122 | ) | |||
Third-party construction contracts, net | 411 | 11,138 | |||||
Other accrued revenues and expenses, net | (33,911 | ) | (26,232 | ) | |||
Operating distributions received in excess of (less than) equity in earnings from unconsolidated companies | 2,383 | (43,930 | ) | ||||
Net cash provided by operating activities | 59,137 | 73,463 | |||||
Cash flows from investing activities: | |||||||
Development of real estate investments | (105,413 | ) | (103,684 | ) | |||
Acquisition of real estate investments and related intangible assets | (17,224 | ) | (35,495 | ) | |||
Acquisition of undeveloped land | (2,270 | ) | (5,149 | ) | |||
Second generation tenant improvements, leasing costs and building improvements | (19,631 | ) | (17,119 | ) | |||
Other deferred leasing costs | (8,706 | ) | (11,079 | ) | |||
Other assets | 5,539 | (5,124 | ) | ||||
Proceeds from land and depreciated property sales, net | 70,673 | 61,931 | |||||
Capital distributions from unconsolidated companies | 2,546 | 89,237 | |||||
Capital contributions and advances to unconsolidated companies | (420 | ) | (4,846 | ) | |||
Net cash used for investing activities | (74,906 | ) | (31,328 | ) | |||
Cash flows from financing activities: | |||||||
Contributions from the General Partner | 23,783 | 574,685 | |||||
Payments for redemption/repurchase of Preferred Units | (17,656 | ) | (177,955 | ) | |||
Proceeds from unsecured debt | — | 250,000 | |||||
Payments on unsecured debt | (511 | ) | (480 | ) | |||
Proceeds from secured debt financings | — | 1,933 | |||||
Payments on secured indebtedness including principal amortization | (21,471 | ) | (17,486 | ) | |||
Borrowings (payments) on line of credit, net | 92,000 | (285,000 | ) | ||||
Distributions to common unitholders | (56,342 | ) | (55,458 | ) | |||
Distributions to preferred unitholders | (7,140 | ) | (9,550 | ) | |||
Distributions to noncontrolling interests | (24 | ) | (210 | ) | |||
Change in book overdrafts | 3,629 | (45,272 | ) | ||||
Deferred financing costs | (300 | ) | (4,064 | ) | |||
Net cash provided by financing activities | 15,968 | 231,143 | |||||
Net increase in cash and cash equivalents | 199 | 273,278 | |||||
Cash and cash equivalents at beginning of period | 19,275 | 33,889 | |||||
Cash and cash equivalents at end of period | $ | 19,474 | $ | 307,167 | |||
Non-cash investing and financing activities: | |||||||
Assumption of other liabilities in real estate acquisitions | $ | 76 | $ | 50 | |||
Carrying amount of pre-existing ownership interest in acquired property | $ | — | $ | 630 | |||
Conversion of Limited Partner Units to common shares of the General Partner | $ | — | $ | 337 |
Common Unitholders | |||||||||||||||||||||||||||
Limited | Accumulated | ||||||||||||||||||||||||||
General Partner | Partners' | Other | Total | ||||||||||||||||||||||||
Common Equity | Preferred Equity | Common Equity | Comprehensive Income | Partners' Equity | Noncontrolling Interests | Total Equity | |||||||||||||||||||||
Balance at December 31, 2013 | $ | 2,565,370 | $ | 447,683 | $ | 20,158 | $ | 4,119 | $ | 3,037,330 | $ | 7,055 | $ | 3,044,385 | |||||||||||||
Net income | 18,200 | 7,037 | 250 | — | 25,487 | 84 | 25,571 | ||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | (287 | ) | (287 | ) | — | (287 | ) | |||||||||||||||||
Capital contribution from the General Partner | 23,783 | — | — | — | 23,783 | — | 23,783 | ||||||||||||||||||||
Stock-based compensation plan activity | 4,025 | — | — | — | 4,025 | — | 4,025 | ||||||||||||||||||||
Distributions to Preferred Unitholders | — | (7,037 | ) | — | — | (7,037 | ) | — | (7,037 | ) | |||||||||||||||||
Repurchase of Preferred Units | 1,101 | (18,757 | ) | — | — | (17,656 | ) | — | (17,656 | ) | |||||||||||||||||
Distributions to Partners ($0.17 per Common Unit) | (55,596 | ) | — | (746 | ) | — | (56,342 | ) | — | (56,342 | ) | ||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | (24 | ) | (24 | ) | ||||||||||||||||||
Balance at March 31, 2014 | $ | 2,556,883 | $ | 428,926 | $ | 19,662 | $ | 3,832 | $ | 3,009,303 | $ | 7,115 | $ | 3,016,418 |
Carrying Value | Maximum Loss Exposure | ||||||
Investment in unconsolidated companies | $ | 5.2 | $ | 5.2 | |||
Guarantee obligations (1) | $ | (18.4 | ) | $ | (112.8 | ) |
(1) | We are party to guarantees of the third-party debt of these joint ventures, and our maximum loss exposure is equal to the maximum monetary obligation pursuant to the guarantee agreements. We have also recorded a liability for our probable future obligation under a guarantee to the lender of one of these ventures, which is included within the carrying value of our guarantee obligations. Pursuant to an agreement with the lender, we may make partner loans to this joint venture that will reduce our maximum guarantee obligation on a dollar-for-dollar basis. The carrying value of our recorded guarantee obligations is included in other liabilities in our Consolidated Balance Sheets. |
Real estate assets | $ | 15,972 | |
Lease related intangible assets | 1,578 | ||
Total acquired assets | 17,550 | ||
Other liabilities | 76 | ||
Total assumed liabilities | 76 | ||
Fair value of acquired net assets | $ | 17,474 |
Book Value at 12/31/13 | Book Value at 3/31/14 | Fair Value at 12/31/13 | Issuances and Assumptions | Payments/Payoffs | Adjustments to Fair Value | Fair Value at 3/31/14 | |||||||||||||||||||||
Fixed rate secured debt | $ | 1,081,035 | $ | 1,058,485 | $ | 1,145,717 | $ | — | $ | (21,365 | ) | $ | 11,244 | $ | 1,135,596 | ||||||||||||
Variable rate secured debt | 19,089 | 18,983 | 19,089 | — | (106 | ) | — | 18,983 | |||||||||||||||||||
Unsecured debt | 3,066,252 | 3,065,742 | 3,250,518 | — | (511 | ) | 39,208 | 3,289,215 | |||||||||||||||||||
Unsecured line of credit | 88,000 | 180,000 | 88,383 | 92,000 | — | 468 | 180,851 | ||||||||||||||||||||
Total | $ | 4,254,376 | $ | 4,323,210 | $ | 4,503,707 | $ | 92,000 | $ | (21,982 | ) | $ | 50,920 | $ | 4,624,645 |
Description | Maximum Capacity | Maturity Date | Outstanding Balance at March 31, 2014 | ||||||
Unsecured Line of Credit - Partnership | $ | 850,000 | December 2015 | $ | 180,000 |
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Management fees | $ | 2,219 | $ | 2,456 | ||||
Leasing fees | 344 | 555 | ||||||
Construction and development fees | 965 | 1,067 |
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
General Partner | ||||||||
Net income attributable to common shareholders | $ | 18,683 | $ | 28,043 | ||||
Less: Dividends on participating securities | (645 | ) | (688 | ) | ||||
Basic net income attributable to common shareholders | 18,038 | 27,355 | ||||||
Noncontrolling interest in earnings of common unitholders | 250 | 392 | ||||||
Diluted net income attributable to common shareholders | $ | 18,288 | $ | 27,747 | ||||
Weighted average number of common shares outstanding | 327,106 | 314,936 | ||||||
Weighted average Limited Partner Units outstanding | 4,387 | 4,405 | ||||||
Other potential dilutive shares | 223 | 230 | ||||||
Weighted average number of common shares and potential dilutive securities | 331,716 | 319,571 | ||||||
Partnership | ||||||||
Net income attributable to common unitholders | $ | 18,933 | $ | 28,435 | ||||
Less: Distributions on participating securities | (645 | ) | (688 | ) | ||||
Basic and diluted net income attributable to common unitholders | $ | 18,288 | $ | 27,747 | ||||
Weighted average number of Common Units outstanding | 331,493 | 319,341 | ||||||
Other potential dilutive units | 223 | 230 | ||||||
Weighted average number of Common Units and potential dilutive securities | 331,716 | 319,571 |
Three Months Ended March 31, | ||||||
2014 | 2013 | |||||
General Partner and Partnership | ||||||
Potential dilutive shares or units: | ||||||
Anti-dilutive outstanding potential shares or units under fixed stock option and other stock-based compensation plans | 1,215 | 1,378 | ||||
Outstanding participating securities | 3,841 | 4,078 |
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Revenues | ||||||||
Rental Operations: | ||||||||
Industrial | $ | 134,002 | $ | 114,700 | ||||
Office | 66,972 | 61,197 | ||||||
Medical Office | 33,310 | 30,484 | ||||||
Non-reportable Rental Operations | 2,087 | 2,301 | ||||||
Service Operations | 55,820 | 47,404 | ||||||
Total segment revenues | 292,191 | 256,086 | ||||||
Other revenue | 979 | 1,197 | ||||||
Consolidated revenue from continuing operations | 293,170 | 257,283 | ||||||
Discontinued operations | 1,368 | 16,404 | ||||||
Consolidated revenue | $ | 294,538 | $ | 273,687 |
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
PNOI | ||||||||
Industrial | $ | 91,909 | $ | 81,279 | ||||
Office | 36,264 | 36,816 | ||||||
Medical Office | 20,577 | 16,502 | ||||||
Non-reportable Rental Operations | 1,105 | 971 | ||||||
Total PNOI | 149,855 | 135,568 | ||||||
Earnings from Service Operations | 8,549 | 9,063 | ||||||
Rental Operations revenues and expenses excluded from PNOI: | ||||||||
Straight-line rental income and expense, net | 6,463 | 4,270 | ||||||
Revenues related to lease buyouts | 2,695 | 1,993 | ||||||
Amortization of lease concessions and above and below market rents | (2,467 | ) | (1,897 | ) | ||||
Intercompany rents and other adjusting items | (1,142 | ) | (1,034 | ) | ||||
PNOI from sold properties included in continuing operations | (96 | ) | 2,767 | |||||
Non-Segment Items: | ||||||||
Equity in earnings of unconsolidated companies | 2,321 | 49,378 | ||||||
Interest expense | (55,257 | ) | (57,181 | ) | ||||
Depreciation expense | (98,059 | ) | (92,993 | ) | ||||
Gain on sale of properties | 15,853 | 168 | ||||||
Interest and other income, net | 351 | 153 | ||||||
Other operating expenses | (92 | ) | (68 | ) | ||||
General and administrative expenses | (14,694 | ) | (13,145 | ) | ||||
Gain on land sales | 152 | — | ||||||
Undeveloped land carrying costs | (2,124 | ) | (2,198 | ) | ||||
Acquisition-related activity | (14 | ) | 643 | |||||
Other non-segment revenues and expenses, net | (692 | ) | 311 | |||||
Income from continuing operations before income taxes | $ | 11,602 | $ | 35,798 |
March 31, 2014 | December 31, 2013 | ||||||
Assets | |||||||
Rental Operations: | |||||||
Industrial | $ | 4,438,376 | $ | 4,414,740 | |||
Office | 1,527,997 | 1,524,501 | |||||
Medical Office | 1,155,112 | 1,170,420 | |||||
Non-reportable Rental Operations | 79,899 | 81,056 | |||||
Service Operations | 151,724 | 145,222 | |||||
Total segment assets | 7,353,108 | 7,335,939 | |||||
Non-segment assets | 414,255 | 416,675 | |||||
Consolidated assets | $ | 7,767,363 | $ | 7,752,614 |
Held for Sale at March 31, 2014 | Sold in 2014 | Sold in 2013 | Total | ||||
Industrial | 2 | 9 | 6 | 17 | |||
Office | 0 | 0 | 12 | 12 | |||
Medical Office | 1 | 1 | 6 | 8 | |||
Retail | 0 | 0 | 1 | 1 | |||
Total properties included in discontinued operations | 3 | 10 | 25 | 38 | |||
Properties excluded from discontinued operations | 0 | 1 | 13 | 14 | |||
Total properties sold or classified as held-for-sale | 3 | 11 | 38 | 52 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Revenues | $ | 1,368 | $ | 16,404 | |||
Operating expenses | (913 | ) | (5,986 | ) | |||
Depreciation and amortization | (205 | ) | (6,787 | ) | |||
Operating income | 250 | 3,631 | |||||
Interest expense | (382 | ) | (4,260 | ) | |||
Loss before gain on sales | (132 | ) | (629 | ) | |||
Gain on sale of depreciable properties | 19,752 | 8,954 | |||||
Income from discontinued operations before income taxes | 19,620 | 8,325 | |||||
Income tax expense | (2,977 | ) | — | ||||
Income from discontinued operations | $ | 16,643 | $ | 8,325 |
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Income from continuing operations attributable to common shareholders | $ | 2,260 | $ | 19,833 | ||||
Income from discontinued operations attributable to common shareholders | 16,423 | 8,210 | ||||||
Net income attributable to common shareholders | $ | 18,683 | $ | 28,043 |
March 31, 2014 | |||
Real estate investment, net | $ | 29,316 | |
Other assets | 5,510 | ||
Total assets held-for-sale | $ | 34,826 | |
Accrued expenses | $ | 132 | |
Other liabilities | 47 | ||
Total liabilities held-for-sale | $ | 179 |
Class of stock/units | Quarterly Amount per Share or Unit | Record Date | Payment Date | ||
Common | $0.17 | May 15, 2014 | May 30, 2014 | ||
Preferred (per depositary share or unit): | |||||
Series J | $0.414063 | May 15, 2014 | May 30, 2014 | ||
Series K | $0.406250 | May 15, 2014 | May 30, 2014 | ||
Series L | $0.412500 | May 15, 2014 | May 30, 2014 |
• | Changes in general economic and business conditions, including the financial condition of our tenants and the value of our real estate assets; |
• | The General Partner's continued qualification as a real estate investment trust ("REIT") for U.S. federal income tax purposes; |
• | Heightened competition for tenants and potential decreases in property occupancy; |
• | Potential changes in the financial markets and interest rates; |
• | Volatility in the General Partner's stock price and trading volume; |
• | Our continuing ability to raise funds on favorable terms; |
• | Our ability to successfully identify, acquire, develop and/or manage properties on terms that are favorable to us; |
• | Potential increases in real estate construction costs; |
• | Our ability to successfully dispose of properties on terms that are favorable to us, including, without limitation, through one or more transactions that are consistent with our previously disclosed strategic plans; |
• | Our ability to retain our current credit ratings; |
• | Inherent risks in the real estate business, including, but not limited to, tenant defaults, potential liability relating to environmental matters and liquidity of real estate investments; and |
• | Other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in our other reports and other public filings with the SEC. |
• | Owned or jointly controlled 747 industrial, office, medical office and other properties, of which 722 properties with approximately 146.6 million square feet were in service and 25 properties with more than 7.5 million square feet were under development. The 722 in-service properties were comprised of 616 consolidated properties with more than 124.1 million square feet and 106 jointly controlled unconsolidated properties with more than 22.4 million square feet. The 25 properties under development consisted of 23 consolidated properties with approximately 5.8 million square feet and two jointly controlled unconsolidated properties with approximately 1.8 million square feet. |
• | Owned, including through ownership interests in unconsolidated joint ventures, more than 4,000 acres of land and controlled more than 1,600 acres through purchase options. |
Total Square Feet | Percent of Total Square Feet | Percent Leased* | Average Annual Net Effective Rent** | ||||||||||||||||
Type | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||
Industrial | 104,590 | 94,859 | 84.2 | % | 81.7 | % | 94.9 | % | 93.1 | % | $3.93 | $3.85 | |||||||
Office | 14,628 | 15,574 | 11.8 | % | 13.4 | % | 87.9 | % | 84.2 | % | $13.45 | $13.32 | |||||||
Medical Office | 4,580 | 5,011 | 3.7 | % | 4.3 | % | 93.2 | % | 90.6 | % | $22.93 | $21.70 | |||||||
Other | 348 | 739 | 0.3 | % | 0.6 | % | 85.7 | % | 85.8 | % | $19.75 | $24.12 | |||||||
Total Consolidated | 124,146 | 116,183 | 100.0 | % | 100.0 | % | 94.0 | % | 91.8 | % | $5.72 | $5.90 | |||||||
Unconsolidated Joint Ventures | 22,413 | 21,624 | 94.1 | % | 93.9 | % | $8.15 | $7.29 | |||||||||||
Total Including Unconsolidated Joint Ventures | 146,559 | 137,807 | 94.0 | % | 92.1 | % | $5.85 | $5.99 | |||||||||||
*Represents the percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced. | |||||||||||||||||||
**Represents average annual base rental payments per leased square foot, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. This amount excludes additional amounts paid by tenants as reimbursement for operating expenses. |
Consolidated Properties | Unconsolidated Joint Venture Properties | Total Including Unconsolidated Joint Venture Properties | ||||||
Vacant square feet at December 31, 2013 | 7,368 | 1,165 | 8,533 | |||||
Dispositions | (22 | ) | (30 | ) | (52 | ) | ||
Expirations | 2,212 | 298 | 2,510 | |||||
Early lease terminations | 1,280 | 64 | 1,344 | |||||
Property structural changes/other | 6 | — | 6 | |||||
Leasing of previously vacant space | (3,379 | ) | (179 | ) | (3,558 | ) | ||
Vacant square feet at March 31, 2014 | 7,465 | 1,318 | 8,783 |
Three Months Ended March 31, | |||
2014 | 2013 | ||
New Leasing Activity - First Generation | 1,439 | 1,359 | |
New Leasing Activity - Second Generation | 2,544 | 2,266 | |
Renewal Leasing Activity | 1,677 | 1,992 | |
Total Consolidated Leasing Activity | 5,660 | 5,617 | |
Unconsolidated Joint Venture Leasing Activity | 370 | 735 | |
Total Including Unconsolidated Joint Venture Leasing Activity | 6,030 | 6,352 |
Square Feet of New Second Generation Leases Signed | Average Term in Years | Estimated Tenant Improvement Cost per Square Foot | Leasing Commissions per Square Foot | ||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||
Three Months | |||||||||||||||||
Industrial | 2,382 | 2,066 | 7.5 | 5.7 | $2.84 | $2.56 | $1.94 | $1.55 | |||||||||
Office | 148 | 177 | 5.7 | 5.6 | $19.25 | $10.39 | $5.16 | $5.74 | |||||||||
Medical Office | 14 | 23 | 6.0 | 4.4 | $20.68 | $5.74 | $8.68 | $0.56 | |||||||||
Total Consolidated | 2,544 | 2,266 | 7.4 | 5.7 | $3.89 | $3.21 | $2.16 | $1.86 | |||||||||
Unconsolidated Joint Ventures | 73 | 340 | 2.3 | 4.5 | $4.45 | $3.00 | $3.82 | $1.55 | |||||||||
Total Including Unconsolidated Joint Ventures | 2,617 | 2,606 | 7.2 | 5.6 | $3.91 | $3.18 | $2.21 | $1.82 |
Square Feet of Leases Renewed | Percent of Expiring Leases Renewed | Average Term in Years | Growth (Decline) in Net Effective Rents* | Estimated Tenant Improvement Cost per Square Foot | Leasing Commissions per Square Foot | |||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Three Months | ||||||||||||||||||||||||||||||
Industrial | 1,511 | 1,638 | 66.1 | % | 42.6 | % | 4.1 | 4.0 | 8.1 | % | 1.7 | % | $0.26 | $0.39 | $0.65 | $0.61 | ||||||||||||||
Office | 148 | 349 | 57.8 | % | 76.6 | % | 4.0 | 5.8 | 6.3 | % | (2.3 | )% | $4.46 | $5.16 | $3.35 | $5.26 | ||||||||||||||
Medical Office | 18 | 5 | 55.4 | % | 8.5 | % | 5.0 | 3.0 | 20.8 | % | (0.8 | )% | — | $0.10 | $4.00 | $1.03 | ||||||||||||||
Total Consolidated | 1,677 | 1,992 | 65.1 | % | 45.7 | % | 4.1 | 4.3 | 8.2 | % | — | % | $0.62 | $1.22 | $0.93 | $1.43 | ||||||||||||||
Unconsolidated Joint Ventures | 284 | 384 | 63.5 | % | 72.7 | % | 2.3 | 3.0 | 6.9 | % | 9.0 | % | $0.27 | $2.27 | $0.68 | $1.50 | ||||||||||||||
Total Including Unconsolidated Joint Ventures | 1,961 | 2,376 | 64.9 | % | 48.6 | % | 3.8 | 4.1 | 7.9 | % | 1.9 | % | $0.57 | $1.39 | $0.89 | $1.44 | ||||||||||||||
* Represents the percentage change in net effective rent between the original leases and the renewal leases. Net effective rents represent average annual base rental payments, on a straight-line basis for the term of each lease, excluding operating expense reimbursements. |
Total Consolidated Portfolio | Industrial | Office | Medical Office | Other | ||||||||||||||||||||||||||||||||
Year of Expiration | Square Feet | Ann. Rent Revenue* | No. of Leases | Square Feet | Ann. Rent Revenue* | Square Feet | Ann. Rent Revenue* | Square Feet | Ann. Rent Revenue* | Square Feet | Ann. Rent Revenue* | |||||||||||||||||||||||||
Remainder of 2014 | 7,554 | $ | 37,520 | 277 | 6,460 | $ | 24,478 | 985 | $ | 11,253 | 105 | $ | 1,669 | 4 | $ | 120 | ||||||||||||||||||||
2015 | 12,713 | 63,955 | 341 | 10,985 | 41,362 | 1,663 | 21,265 | 57 | 1,152 | 8 | 176 | |||||||||||||||||||||||||
2016 | 14,667 | 74,647 | 370 | 12,645 | 46,587 | 1,794 | 23,453 | 209 | 4,250 | 19 | 357 | |||||||||||||||||||||||||
2017 | 14,326 | 74,653 | 318 | 12,663 | 49,986 | 1,407 | 19,102 | 183 | 3,842 | 73 | 1,723 | |||||||||||||||||||||||||
2018 | 12,525 | 75,548 | 298 | 10,188 | 39,124 | 1,872 | 25,145 | 388 | 9,807 | 77 | 1,472 | |||||||||||||||||||||||||
2019 | 11,660 | 65,132 | 236 | 9,860 | 38,354 | 1,531 | 20,088 | 257 | 6,406 | 12 | 284 | |||||||||||||||||||||||||
2020 | 10,807 | 61,512 | 128 | 9,354 | 37,659 | 986 | 14,576 | 457 | 9,020 | 10 | 257 | |||||||||||||||||||||||||
2021 | 7,443 | 42,451 | 114 | 6,280 | 24,984 | 912 | 11,613 | 238 | 5,582 | 13 | 272 | |||||||||||||||||||||||||
2022 | 5,920 | 29,731 | 68 | 5,333 | 18,230 | 246 | 4,339 | 319 | 6,715 | 22 | 447 | |||||||||||||||||||||||||
2023 | 2,883 | 24,489 | 57 | 2,101 | 10,518 | 465 | 7,366 | 311 | 6,456 | 6 | 149 | |||||||||||||||||||||||||
2024 and Thereafter | 16,183 | 117,592 | 109 | 13,385 | 59,253 | 1,003 | 14,751 | 1,743 | 42,946 | 52 | 642 | |||||||||||||||||||||||||
Total Leased | 116,681 | $ | 667,230 | 2,316 | 99,254 | $ | 390,535 | 12,864 | $ | 172,951 | 4,267 | $ | 97,845 | 296 | $ | 5,899 | ||||||||||||||||||||
Total Portfolio Square Feet | 124,146 | 104,590 | 14,628 | 4,580 | 348 | |||||||||||||||||||||||||||||||
Percent Leased | 94.0 | % | 94.9 | % | 87.9 | % | 93.2 | % | 85.7 | % | ||||||||||||||||||||||||||
* Annualized rental revenue represents average annual base rental payments, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. Annualized rental revenue excludes additional amounts paid by tenants as reimbursement for operating expenses. |
Year-to-Date 2014 Acquisitions | Full Year 2013 Acquisitions | ||||||||||||||||||
Type | Acquisition Price* | In-Place Yield** | Percent Leased at Acquisition Date*** | Acquisition Price* | In-Place Yield** | Percent Leased at Acquisition Date*** | |||||||||||||
Industrial | $ | 17,550 | 6.3 | % | 100.0 | % | $ | 532,808 | 6.1 | % | 100.0 | % | |||||||
Medical Office | — | — | % | — | % | 20,500 | 6.9 | % | 82.3 | % | |||||||||
Total | $ | 17,550 | 6.3 | % | 100.0 | % | $ | 553,308 | 6.2 | % | 99.8 | % | |||||||
* Includes real estate assets and net acquired lease-related intangible assets, including above or below market leases, but excludes other acquired working capital assets and liabilities. | |||||||||||||||||||
** In-place yields of completed acquisitions are calculated as the current annualized net rental payments from space leased to tenants at the date of acquisition, divided by the acquisition price of the acquired real estate. Annualized net rental payments are comprised of base rental payments, excluding additional amounts payable by tenants as reimbursement for operating expenses, less current annualized operating expenses not recovered through tenant reimbursements. | |||||||||||||||||||
*** Represents percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced, at the date of acquisition. |
Year-to-Date 2014 Dispositions | Full Year 2013 Dispositions | |||||||||||||||||||
Type | Sales Price | In-Place Yield* | Percent Leased** | Sales Price | In-Place Yield* | Percent Leased** | ||||||||||||||
Industrial | $ | 18,350 | 10.4 | % | 94.9 | % | $ | 16,499 | 6.3 | % | 50.1 | % | ||||||||
Office | — | — | % | — | % | 219,254 | 8.3 | % | 91.6 | % | ||||||||||
Medical Office | 57,400 | 6.5 | % | 100.0 | % | 285,850 | 6.4 | % | 89.1 | % | ||||||||||
Other | — | — | % | — | % | 188,000 | 5.0 | % | 89.8 | % | ||||||||||
Total | $ | 75,750 | 7.4 | % | 96.4 | % | $ | 709,603 | 6.6 | % | 86.5 | % | ||||||||
* In-place yields of completed dispositions are calculated as current annualized net rental payments from space leased to tenants at the date of sale, divided by the sales price of the real estate. Annualized net rental payments are comprised of base rental payments, excluding additional amounts payable by tenants as reimbursement for operating expenses, less current annualized operating expenses not recovered through tenant reimbursements. | ||||||||||||||||||||
** Represents percentage of total square feet leased based on executed leases where the leases have commenced. |
Ownership Type | Square Feet | Percent Leased | Total Estimated Project Costs | Total Incurred to Date | Amount Remaining to be Spent | |||||||||||
Consolidated properties | 5,763 | 81% | $ | 568,974 | $ | 264,588 | $ | 304,386 | ||||||||
Joint venture properties | 1,758 | 100% | 76,547 | 23,313 | 53,234 | |||||||||||
Total | 7,521 | 86% | $ | 645,521 | $ | 287,901 | $ | 357,620 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Net income attributable to common shareholders of the General Partner | $ | 18,683 | $ | 28,043 | |||
Add back: Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership | 250 | 392 | |||||
Net income attributable to common unitholders of the Partnership | 18,933 | 28,435 | |||||
Adjustments: | |||||||
Depreciation and amortization | 98,264 | 99,780 | |||||
Company share of joint venture depreciation and amortization | 6,396 | 7,629 | |||||
Gains on depreciable property sales, net of income taxes—wholly owned | (29,954 | ) | (9,122 | ) | |||
Gains/losses on depreciable property sales—share of joint venture | 165 | (48,814 | ) | ||||
Funds From Operations attributable to common unitholders of the Partnership | $ | 93,804 | $ | 77,908 | |||
Additional General Partner Adjustments: | |||||||
Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership | (250 | ) | (392 | ) | |||
Noncontrolling interest share of adjustments | (991 | ) | (682 | ) | |||
Funds From Operations attributable to common shareholders of the General Partner | $ | 92,563 | $ | 76,834 |
2014 | 2013 | |||||||
Rental and related revenue from continuing operations - Rental Operations segments | $ | 236,371 | $ | 208,682 | ||||
Rental and real estate tax expenses from continuing operations - Rental Operations segments | (81,063 | ) | (67,015 | ) | ||||
Less adjusting items, continuing operations: | ||||||||
PNOI from sold properties included in continuing operations | 96 | (2,767 | ) | |||||
Straight-line rental income and expense, net | (6,463 | ) | (4,270 | ) | ||||
Revenues related to lease buyouts | (2,695 | ) | (1,993 | ) | ||||
Amortization of lease concessions and above and below market rents | 2,467 | 1,897 | ||||||
Intercompany rents and other adjusting items | 1,142 | 1,034 | ||||||
PNOI, Continuing Operations | $ | 149,855 | $ | 135,568 |
Three Months Ended March 31, | Percent | |||||||
2014 | 2013 | Change | ||||||
SPNOI | $ | 121,925 | $ | 119,245 | 2.2% | |||
Less share of SPNOI from unconsolidated joint ventures | (10,801 | ) | (9,959 | ) | ||||
Less lease buyouts (same property) individually less than $250 | (434 | ) | (436 | ) | ||||
PNOI excluded from the same property population | 39,165 | 26,718 | ||||||
PNOI | $ | 149,855 | $ | 135,568 | ||||
Earnings from Service Operations | 8,549 | 9,063 | ||||||
Rental Operations revenues and expenses excluded from PNOI | 5,453 | 6,099 | ||||||
Non-Segment Items | (152,255 | ) | (114,932 | ) | ||||
Income from continuing operations before income taxes | $ | 11,602 | $ | 35,798 |
Three Months Ended March 31, | |||
2014 | 2013 | ||
Number of properties | 631 | 631 | |
Square feet (in thousands) (1) | 106,415 | 106,415 | |
Average commencement occupancy percentage (2) | 92.6% | 91.8% | |
Average rental rate - cash basis (3) | $5.53 | $5.47 | |
(1) Includes the total square feet of the consolidated properties that are in the same property population as well as 6.9 million square feet of space for unconsolidated joint ventures, which represents our ratable share of the 21.0 million total square feet of space for buildings owned by unconsolidated joint ventures that are in the same property population. | |||
(2) Commencement occupancy represents the percentage of total square feet where the leases have commenced. | |||
(3) Represents the average annualized contractual rent per square foot for the three-month periods ended March 31, 2014 and 2013 for tenants in occupancy in properties in the same property population. Cash rent does not include the tenant's obligation to pay property operating expenses and real estate taxes. If a tenant was within a free rent period at March 31, 2014 or 2013 its rent would equal zero for purposes of this metric. |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Rental and related revenue from continuing operations | $ | 237,350 | $ | 209,879 | |||
General contractor and service fee revenue | 55,820 | 47,404 | |||||
Operating income | 66,522 | 92,183 | |||||
General Partner | |||||||
Net income attributable to common shareholders | $ | 18,683 | $ | 28,043 | |||
Weighted average common shares outstanding | 327,106 | 314,936 | |||||
Weighted average common shares and potential dilutive securities | 331,716 | 319,571 | |||||
Partnership | |||||||
Net income attributable to common unitholders | $ | 18,933 | $ | 28,435 | |||
Weighted average Common Units outstanding | 331,493 | 319,341 | |||||
Weighted average Common Units and potential dilutive securities | 331,716 | 319,571 | |||||
General Partner and Partnership | |||||||
Basic income per common share or Common Unit: | |||||||
Continuing operations | $ | 0.01 | $ | 0.06 | |||
Discontinued operations | $ | 0.05 | $ | 0.03 | |||
Diluted income per common share or Common Unit: | |||||||
Continuing operations | $ | 0.01 | $ | 0.06 | |||
Discontinued operations | $ | 0.05 | $ | 0.03 | |||
Number of in-service consolidated properties at end of period | 616 | 627 | |||||
In-service consolidated square footage at end of period | 124,146 | 116,183 | |||||
Number of in-service joint venture properties at end of period | 106 | 107 | |||||
In-service joint venture square footage at end of period | 22,413 | 21,624 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Rental and related revenue: | |||||||
Industrial | $ | 134,002 | $ | 114,700 | |||
Office | 66,972 | 61,197 | |||||
Medical Office | 33,310 | 30,484 | |||||
Other | 3,066 | 3,498 | |||||
Total rental and related revenue from continuing operations | $ | 237,350 | $ | 209,879 |
• | We acquired 18 properties, of which 17 were industrial and one was medical office, and placed 20 developments in service from January 1, 2013 to March 31, 2014, which provided incremental revenues of $20.8 million in the three months ended March 31, 2014, as compared to the same period in 2013. |
• | We sold 13 medical office properties in the fourth quarter of 2013 and the first quarter of 2014, but because of our continuing involvement in these properties through retained management agreements, these properties are classified in continuing operations. The sale of these properties resulted in a $4.2 million decrease in rental and related revenue from continuing operations in the three months ended March 31, 2014, as compared to the same period in 2013. |
• | The remaining increase in rental and related revenue from continuing operations was primarily due to a $7.6 million increase in rental expense recoveries within properties outside of the acquisitions, developments and dispositions described above, most of which was attributable to a significant increase in recoverable snow removal and utility costs resulting from the extreme winter conditions in the first quarter of 2014. Increased occupancy and rental rates within our existing base of properties also contributed, to a lesser extent, to the remaining increase in rental and related revenue from continuing operations. |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Rental expenses: | |||||||
Industrial | $ | 18,484 | $ | 13,214 | |||
Office | 21,013 | 17,836 | |||||
Medical Office | 8,978 | 6,813 | |||||
Other | 1,792 | 998 | |||||
Total rental expenses from continuing operations | $ | 50,267 | $ | 38,861 | |||
Real estate taxes: | |||||||
Industrial | $ | 19,735 | $ | 17,487 | |||
Office | 8,069 | 7,863 | |||||
Medical Office | 3,938 | 3,111 | |||||
Other | 725 | 579 | |||||
Total real estate tax expense from continuing operations | $ | 32,467 | $ | 29,040 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Service Operations: | |||||||
General contractor and service fee revenue | $ | 55,820 | $ | 47,404 | |||
General contractor and other services expenses | (47,271 | ) | (38,341 | ) | |||
Net earnings from Service Operations | $ | 8,549 | $ | 9,063 |
General and administrative expenses - three-month period ended March 31, 2013 | $ | 13.1 | |
Increase to overall pool of overhead costs | 0.3 | ||
Decreased absorption of costs by wholly owned leasing and development activities (1) | 0.8 | ||
Reduced allocation of costs to Service Operations and Rental Operations | 0.5 | ||
General and administrative expenses - three-month period ended March 31, 2014 | $ | 14.7 |
• | property investment; |
• | leasing/capital costs; |
• | dividends and distributions to shareholders and unitholders; |
• | long-term debt maturities; |
• | opportunistic repurchases of outstanding debt and preferred stock; and |
• | other contractual obligations. |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Second generation tenant improvements | $ | 10,445 | $ | 9,578 | |||
Second generation leasing costs | 8,942 | 7,060 | |||||
Building improvements | 244 | 481 | |||||
Total second generation capital expenditures | $ | 19,631 | $ | 17,119 | |||
Development of real estate investments | $ | 105,413 | $ | 103,684 | |||
Other deferred leasing costs | $ | 8,706 | $ | 11,079 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Industrial | $ | 9,855 | $ | 5,953 | |||
Office | 9,070 | 10,874 | |||||
Medical Office | 213 | 292 | |||||
Non-reportable segments | 493 | — | |||||
Total | $ | 19,631 | $ | 17,119 |
Future Repayments | ||||||||||||||
Year | Scheduled Amortization | Maturities | Total | Weighted Average Interest Rate of Future Repayments | ||||||||||
Remainder of 2014 | $ | 12,671 | $ | 49,406 | $ | 62,077 | 6.23 | % | ||||||
2015 | 14,658 | 623,346 | 638,004 | 5.07 | % | |||||||||
2016 | 12,307 | 518,132 | 530,439 | 6.14 | % | |||||||||
2017 | 10,139 | 558,129 | 568,268 | 5.89 | % | |||||||||
2018 | 7,937 | 550,000 | 557,937 | 4.03 | % | |||||||||
2019 | 6,936 | 518,438 | 525,374 | 7.97 | % | |||||||||
2020 | 5,381 | 250,000 | 255,381 | 6.73 | % | |||||||||
2021 | 3,416 | 259,047 | 262,463 | 3.99 | % | |||||||||
2022 | 3,611 | 600,000 | 603,611 | 4.20 | % | |||||||||
2023 | 3,817 | 250,000 | 253,817 | 3.75 | % | |||||||||
2024 | 4,036 | — | 4,036 | 5.62 | % | |||||||||
Thereafter | 6,325 | 50,000 | 56,325 | 7.11 | % | |||||||||
$ | 91,234 | $ | 4,226,498 | $ | 4,317,732 | 5.41 | % |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
General Partner | |||||||
Net Cash Provided by Operating Activities | $ | 59.1 | $ | 73.4 | |||
Net Cash Used for Investing Activities | $ | (74.9 | ) | $ | (31.3 | ) | |
Net Cash Provided by Financing Activities | $ | 16.0 | $ | 231.2 | |||
Partnership | |||||||
Net Cash Provided by Operating Activities | $ | 59.1 | $ | 73.5 | |||
Net Cash Used for Investing Activities | $ | (74.9 | ) | $ | (31.3 | ) | |
Net Cash Provided by Financing Activities | $ | 16.0 | $ | 231.1 |
• | During the three months ended March 31, 2014, we paid cash of $17.2 million for real estate acquisitions and $2.3 million for undeveloped land acquisitions, compared to $35.5 million and $5.1 million, respectively, for real estate and undeveloped land acquisitions in the same period in 2013. |
• | Real estate development costs were $105.4 million during the three months ended March 31, 2014, compared to $103.7 million for the same period in 2013. |
• | Sales of land and depreciated property provided $70.7 million in net proceeds for the three months ended March 31, 2014, compared to $61.9 million for the same period in 2013. |
• | For the three months ended March 31, 2014, we received $2.5 million in capital distributions, compared to $89.2 million during the same period in 2013. The activity during the three months ended March 31, 2013 represented the receipt of our share of the net proceeds from the sales of 17 office properties and one industrial property within two of our unconsolidated joint ventures. |
• | During the three months ended March 31, 2014, the General Partner issued 1.4 million common shares for net proceeds of $23.8 million, compared to 41.6 million common shares for net proceeds of $574.7 million during the three months ended March 31, 2013. |
• | For the three months ended March 31, 2014, the General Partner opportunistically repurchased preferred shares from all outstanding series in the open market in order to take advantage of the significant discounts at which they were trading. In total, the General partner repurchased preferred shares having a redemption value of approximately $18.8 million for $17.7 million. |
• | During the three months ended March 31, 2014 and 2013, respectively, we repaid one secured loan totaling $18.1 million that had a stated interest rate of 5.14% and two secured loans totaling $13.7 million that had a weighted average stated interest rate of 6.20%. |
• | For the three months ended March 31, 2014, we increased net borrowings on the Partnership's unsecured line of credit by $92.0 million, compared to a $285.0 million decrease in net borrowings for the same period in 2013. |
• | Changes in book overdrafts are classified as financing activities within our Consolidated Statements of Cash Flows. Book overdrafts were $16.1 million at March 31, 2014, compared to no book overdrafts at March 31, 2013. |
• | In March 2013, we issued $250.0 million of senior unsecured notes that bear interest at 3.625%, have an effective interest rate of 3.72%, and mature on April 15, 2023, compared to no new note issuances in the three months ended March 31, 2014. |
• | In February 2013, the General Partner redeemed all of the outstanding shares of its Series O Shares for a total payment of $178.0 million. |
Remainder of 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | Face Value | Fair Value | ||||||||||||||||||||||||
Fixed rate secured debt | $ | 59,239 | $ | 205,036 | $ | 377,314 | $ | 102,016 | $ | 4,952 | $ | 304,450 | $ | 1,053,007 | $ | 1,135,596 | |||||||||||||||
Weighted average interest rate | 6.34 | % | 5.30 | % | 5.91 | % | 5.96 | % | 6.49 | % | 7.45 | % | 6.27 | % | |||||||||||||||||
Variable rate secured debt | $ | 1,257 | $ | 742 | $ | 755 | $ | 13,729 | $ | 300 | $ | 2,200 | $ | 18,983 | $ | 18,983 | |||||||||||||||
Weighted average interest rate | 1.01 | % | 2.10 | % | 2.13 | % | 3.41 | % | 0.14 | % | 0.14 | % | 2.72 | % | |||||||||||||||||
Fixed rate unsecured debt | $ | 1,581 | $ | 252,226 | $ | 152,370 | $ | 452,523 | $ | 302,685 | $ | 1,654,357 | $ | 2,815,742 | $ | 3,037,472 | |||||||||||||||
Weighted average interest rate | 6.26 | % | 7.49 | % | 6.71 | % | 5.95 | % | 6.08 | % | 5.20 | % | 5.70 | % | |||||||||||||||||
Variable rate unsecured notes | $ | — | $ | — | $ | — | $ | — | $ | 250,000 | $ | — | $ | 250,000 | $ | 251,743 | |||||||||||||||
Rate at March 31, 2014 | N/A | N/A | N/A | N/A | 1.51% | N/A | 1.51 | % | |||||||||||||||||||||||
Variable rate unsecured line of credit | $ | — | $ | 180,000 | $ | — | $ | — | $ | — | $ | — | $ | 180,000 | $ | 180,851 | |||||||||||||||
Rate at March 31, 2014 | N/A | 1.41 | % | N/A | N/A | N/A | N/A | 1.41 | % |
Month | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value of Shares That May Yet be Repurchased Under the Plan | ||||||
Repurchases of 6.5% Series K Cumulative Redeemable Preferred Shares: | ||||||||||
January 1-31, 2014 | 6,211 | $22.99 | 6,211 | (1) | ||||||
Repurchases of 6.6% Series L Cumulative Redeemable Preferred Shares: | ||||||||||
January 1-31, 2014 | 517,032 | $23.37 | 517,032 | (1) | ||||||
February 1-28, 2014 | 110,000 | $23.85 | 110,000 | $ | 494,568,500 | |||||
Total | 627,032 | $23.45 | 627,032 | |||||||
Repurchases of 6.625% Series J Cumulative Redeemable Preferred Shares: | ||||||||||
February 1-28, 2014 | 117,000 | $24.00 | 117,000 | $ | 494,568,500 |
3.1(i) | Fourth Amended and Restated Articles of Incorporation of the General Partner (filed as Exhibit 3.1 to the General Partner's Current Report on Form 8-K as filed with the SEC on July 30, 2009, and incorporated herein by this reference). | ||
3.1(ii) | Amendment to the Fourth Amended and Restated Articles of Incorporation of the General Partner (filed as Exhibit 3.1 to the General Partner's Current Report on Form 8-K as filed with the SEC on July 22, 2011, and incorporated herein by this reference). | ||
3.1(iii) | Second Amendment to the Fourth Amended and Restated Articles of Incorporation of the General Partner (filed as Exhibit 3.1 to the General Partner's Current Report on Form 8-K as filed with the SEC on March 9, 2012, and incorporated herein by this reference). | ||
3.1(iv) | Third Amendment to the Fourth Amended and Restated Articles of Incorporation of the General Partner (filed as Exhibit 3.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on February 26, 2013, and incorporated herein by this reference). | ||
3.2 | Fourth Amended and Restated Bylaws of the General Partner (filed as Exhibit 3.2 to the General Partner's Current Report on Form 8-K as filed with the SEC on July 30, 2009, and incorporated herein by this reference). | ||
3.3 | Certificate of Limited Partnership of the Partnership, dated September 17, 1993 (filed as Exhibit 3.1(i) to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2006 as filed with the SEC on March 13, 2007, and incorporated herein by this reference) (File No. 000-20625). | ||
3.4(i) | Fourth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.1 to the Partnership's Current Report on Form 8-K as filed with the SEC on November 3, 2009, and incorporated herein by this reference). | ||
3.4(ii) | First Amendment to Fourth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.1 to the Partnership's Current Report on Form 8-K as filed with the SEC on July 22, 2011, and incorporated herein by this reference). | ||
3.4(iii) | Second Amendment to Fourth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.1 to the Partnership's Current Report on Form 8-K as filed with the SEC on March 9, 2012 and incorporated herein by this reference). | ||
3.4(iv) | Third Amendment to Fourth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.2 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on February 26, 2013, and incorporated herein by this reference). | ||
10.1 | Form of Award Certificate under the General Partner's 2010 Performance Share Plan, a sub-plan of the 2005 Long- Term Incentive Plan. #* | ||
11.1 | Statement Regarding Computation of Earnings.*** | ||
12.1 | Statement of Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Dividends of the General Partner.* | ||
12.2 | Statement of Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Distributions of the Partnership.* | ||
31.1 | Rule 13a-14(a) Certification of the Chief Executive Officer of the General Partner.* | ||
31.2 | Rule 13a-14(a) Certification of the Chief Financial Officer of the General Partner.* | ||
31.3 | Rule 13a-14(a) Certification of the Chief Executive Officer for the Partnership.* | ||
31.4 | Rule 13a-14(a) Certification of the Chief Financial Officer for the Partnership.* | ||
32.1 | Section 1350 Certification of the Chief Executive Officer of the General Partner.** | ||
32.2 | Section 1350 Certification of the Chief Financial Officer of the General Partner.** | ||
32.3 | Section 1350 Certification of the Chief Executive Officer for the Partnership.** | ||
32.4 | Section 1350 Certification of the Chief Financial Officer for the Partnership.** | ||
101 | The following materials from the General Partner's and the Partnership's Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Changes in Equity, and (v) the Notes to Consolidated Financial Statements. |
# | Represents management contract or compensatory plan or arrangement. |
* | Filed herewith. |
** | The certifications attached as Exhibits 32.1, 32.2, 32.3 and 32.4 accompany this Quarterly Report on Form 10-Q and are "furnished" to the Securities and Exchange Commission pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed "filed" by the General Partner or the Partnership, respectively, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
*** | Data required by Financial Accounting Standards Board Auditing Standards Codification No. 260 is provided in Note 9 to the Consolidated Financial Statements included in this report. |
DUKE REALTY CORPORATION | ||
/s/ Dennis D. Oklak | ||
Dennis D. Oklak | ||
Chairman and Chief Executive Officer | ||
/s/ Mark A. Denien | ||
Mark A. Denien | ||
Executive Vice President and Chief Financial Officer | ||
DUKE REALTY LIMITED PARTNERSHIP | ||
By: DUKE REALTY CORPORATION, its general partner | ||
/s/ Dennis D. Oklak | ||
Dennis D. Oklak | ||
Chairman and Chief Executive Officer of the General Partner | ||
/s/ Mark A. Denien | ||
Mark A. Denien | ||
Executive Vice President and Chief Financial Officer of the General Partner | ||
Date: | May 2, 2014 | |
FORM OF AWARD CERTIFICATE Duke Realty Corporation 2010 Performance Share Plan |
Performance Period | |
Target Value of Award on Award Date: | $ |
Fair Market Value of a Share on February 10, 2014: | $ |
Target Number of Performance Shares: |
Performance Level | Average Annual Growth in AFFO per Share for the Performance Period | AFFO Payout Percentage |
Superior | ||
Target | ||
Threshold | ||
Performance Level | Annualized TSR Percentile Rank for the Performance Period | TSR Payout Percentage |
Superior | ||
Stretch | ||
Target | ||
Threshold | ||
Performance Level | Fixed Charge Coverage Ratio Payout Percentage | Fixed Charge Coverage Ratio Payout Percentage Payout Percentage |
Superior | ||
Target | ||
Threshold | ||
Performance Level | Debt Plus Preferred to EBITDA Ratio | Debt Plus Preferred to EBITDA Ratio Payout Percentage |
Superior | ||
Target | ||
Threshold | ||
• | If a Change in Control occurs prior to the second anniversary of the beginning of the Performance Period, the AFFO per Share performance level shall be deemed to be at target and, therefore, the AFFO Payout Percentage shall be 100%. If a Change in Control occurs on or after the second anniversary of the beginning of the Performance Period and prior to the end of the Performance Period, the Average Annual Growth in AFFO per Share shall equal the simple average of the Annual Growth in AFFO per share for the first two calendar years of the Performance Period, and the AFFO Payout Percentage shall be determined accordingly. |
• | If a Change in Control occurs prior to the second anniversary of the beginning of the Performance Period, the Annualized TSR performance level shall be deemed to be at target and, therefore, the TSR Payout Percentage shall be 100%. If a Change in Control occurs on or after the second anniversary of the beginning of the Performance Period and prior to the end of the Performance Period, the Annualized TSR shall be determined based on the number of full and partial years from the beginning of the Performance Period to the date of the Change in Control. The Average Annual TSR, if applicable, shall be determined based on the number of full and partial years from the beginning of the Performance Period to the date of the Change in Control. |
• | If a Change in Control occurs prior to the second anniversary of the beginning of the Performance Period, each of the Leverage Metric performance levels shall be deemed to be at target, and therefore the Leverage Metric Payout Percentage shall be 100%. If a Change in Control occurs on or after the second anniversary of the beginning of the Performance Period and prior to the end of the Performance Period, the Leverage Metric Payout Percentage shall be equal to the greater of (i) 100%, or (ii) the Leverage Metric Payout Percentage computed using the most recent full quarter preceding the date of the Change in Control. |
Three Months Ended March 31, 2014 | Year Ended December 31, 2013 | Year Ended December 31, 2012 | Year Ended December 31, 2011 | Year Ended December 31, 2010 | Year Ended December 31, 2009 | |||||||||||||||||||||||||
Net income (loss) from continuing operations, less preferred dividends | $ | 1,891 | $ | 29,784 | $ | (132,057 | ) | $ | (63,570 | ) | $ | (25,195 | ) | $ | (296,238 | ) | ||||||||||||||
Preferred dividends | 7,037 | 31,616 | 46,438 | 60,353 | 69,468 | 73,451 | ||||||||||||||||||||||||
Interest expense | 55,257 | 228,324 | 229,417 | 206,244 | 172,143 | 135,414 | ||||||||||||||||||||||||
Earnings (loss) before fixed charges | $ | 64,185 | $ | 289,724 | $ | 143,798 | $ | 203,027 | $ | 216,416 | $ | (87,373 | ) | |||||||||||||||||
Interest expense | $ | 55,257 | $ | 228,324 | $ | 229,417 | $ | 206,244 | $ | 172,143 | $ | 135,414 | ||||||||||||||||||
Interest costs capitalized | 4,170 | 16,756 | 9,357 | 4,335 | 11,498 | 26,864 | ||||||||||||||||||||||||
Total fixed charges | 59,427 | 245,080 | 238,774 | 210,579 | 183,641 | 162,278 | ||||||||||||||||||||||||
Preferred dividends | 7,037 | 31,616 | 46,438 | 60,353 | 69,468 | 73,451 | ||||||||||||||||||||||||
Total fixed charges and preferred dividends | $ | 66,464 | $ | 276,696 | $ | 285,212 | $ | 270,932 | $ | 253,109 | $ | 235,729 | ||||||||||||||||||
Ratio of earnings to fixed charges | 1.08 | 1.18 | N/A | (2) | N/A | (4) | 1.18 | N/A | (7) | |||||||||||||||||||||
Ratio of earnings to fixed charges and preferred dividends | N/A | (1) | 1.05 | N/A | (3) | N/A | (5) | N/A | (6) | N/A | (8) |
(1) | N/A - The ratio is less than 1.0; deficit of $2.3 million exists for the three months ended March 31, 2014. The calculation of earnings includes $98.1 million of non-cash depreciation and amortization expense. |
(2) | N/A - The ratio is less than 1.0; deficit of $95.0 million exists for the year ended December 31, 2012. The calculation of earnings includes $348.3 million of non-cash depreciation and amortization expense. |
(3) | N/A - The ratio is less than 1.0; deficit of $141.4 million exists for the year ended December 31, 2012. The calculation of earnings includes $348.3 million of non-cash depreciation and amortization expense. |
(4) | N/A - The ratio is less than 1.0; deficit of $7.6 million exists for the year ended December 31, 2011. The calculation of earnings includes $304.3 million of non-cash depreciation and amortization expense. |
(5) | N/A - The ratio is less than 1.0; deficit of $67.9 million exists for the year ended December 31, 2011. The calculation of earnings includes $304.3 million of non-cash depreciation and amortization expense. |
(6) | N/A - The ratio is less than 1.0; deficit of $36.7 million exists for the year ended December 31, 2010. The calculation of earnings includes $252.3 million of non-cash depreciation and amortization expense. |
(7) | N/A - The ratio is less than 1.0; deficit of $249.7 million exists for the year ended December 31, 2009. The calculation of earnings includes $223.7 million of non-cash depreciation and amortization expense. |
(8) | N/A - The ratio is less than 1.0; deficit of $323.1 million exists for the year ended December 31, 2009. The calculation of earnings includes $223.7 million of non-cash depreciation and amortization expense. |
Three Months Ended March 31, 2014 | Year Ended December 31, 2013 | Year Ended December 31, 2012 | Year Ended December 31, 2011 | Year Ended December 31, 2010 | Year Ended December 31, 2009 | |||||||||||||||||||||||||
Net income (loss) from continuing operations, less preferred distributions | $ | 1,891 | $ | 29,784 | $ | (132,057 | ) | $ | (63,570 | ) | $ | (25,195 | ) | $ | (296,238 | ) | ||||||||||||||
Preferred distributions | 7,037 | 31,616 | 46,438 | 60,353 | 69,468 | 73,451 | ||||||||||||||||||||||||
Interest expense | 55,257 | 228,324 | 229,417 | 206,244 | 172,143 | 135,414 | ||||||||||||||||||||||||
Earnings (loss) before fixed charges | $ | 64,185 | $ | 289,724 | $ | 143,798 | $ | 203,027 | $ | 216,416 | $ | (87,373 | ) | |||||||||||||||||
Interest expense | $ | 55,257 | $ | 228,324 | $ | 229,417 | $ | 206,244 | $ | 172,143 | $ | 135,414 | ||||||||||||||||||
Interest costs capitalized | 4,170 | 16,756 | 9,357 | 4,335 | 11,498 | 26,864 | ||||||||||||||||||||||||
Total fixed charges | 59,427 | 245,080 | 238,774 | 210,579 | 183,641 | 162,278 | ||||||||||||||||||||||||
Preferred distributions | 7,037 | 31,616 | 46,438 | 60,353 | 69,468 | 73,451 | ||||||||||||||||||||||||
Total fixed charges and preferred distributions | $ | 66,464 | $ | 276,696 | $ | 285,212 | $ | 270,932 | $ | 253,109 | $ | 235,729 | ||||||||||||||||||
Ratio of earnings to fixed charges | 1.08 | 1.18 | N/A | (2) | N/A | (4) | 1.18 | N/A | (7) | |||||||||||||||||||||
Ratio of earnings to fixed charges and preferred distributions | N/A | (1) | 1.05 | N/A | (3) | N/A | (5) | N/A | (6) | N/A | (8) |
(1) | N/A - The ratio is less than 1.0; deficit of $2.3 million exists for the three months ended March 31, 2014. The calculation of earnings includes $98.1 million of non-cash depreciation and amortization expense. |
(2) | N/A - The ratio is less than 1.0; deficit of $95.0 million exists for the year ended December 31, 2012. The calculation of earnings includes $348.3 million of non-cash depreciation and amortization expense. |
(3) | N/A - The ratio is less than 1.0; deficit of $141.4 million exists for the year ended December 31, 2012. The calculation of earnings includes $348.3 million of non-cash depreciation and amortization expense. |
(4) | N/A - The ratio is less than 1.0; deficit of $7.6 million exists for the year ended December 31, 2011. The calculation of earnings includes $304.3 million of non-cash depreciation and amortization expense. |
(5) | N/A - The ratio is less than 1.0; deficit of $67.9 million exists for the year ended December 31, 2011. The calculation of earnings includes $304.3 million of non-cash depreciation and amortization expense. |
(6) | N/A - The ratio is less than 1.0; deficit of $36.7 million exists for the year ended December 31, 2010. The calculation of earnings includes $252.3 million of non-cash depreciation and amortization expense. |
(7) | N/A - The ratio is less than 1.0; deficit of $249.7 million exists for the year ended December 31, 2009. The calculation of earnings includes $223.7 million of non-cash depreciation and amortization expense. |
(8) | N/A - The ratio is less than 1.0; deficit of $323.1 million exists for the year ended December 31, 2009. The calculation of earnings includes $223.7 million of non-cash depreciation and amortization expense. |
1 | I have reviewed this Quarterly Report on Form 10-Q of Duke Realty Corporation; |
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4 | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5 | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Dennis D. Oklak |
Dennis D. Oklak |
Chairman and Chief Executive Officer |
1 | I have reviewed this Quarterly Report on Form 10-Q of Duke Realty Corporation; |
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4 | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5 | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Mark A. Denien |
Mark A. Denien |
Executive Vice President and Chief Financial Officer |
1 | I have reviewed this Quarterly Report on Form 10-Q of Duke Realty Limited Partnership; |
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4 | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5 | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Dennis D. Oklak |
Dennis D. Oklak |
Chairman and Chief Executive Officer of the General Partner |
1 | I have reviewed this Quarterly Report on Form 10-Q of Duke Realty Limited Partnership; |
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4 | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5 | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Mark A. Denien |
Mark A. Denien |
Executive Vice President and Chief Financial Officer |
/s/ Dennis D. Oklak | |
Dennis D. Oklak | |
Chairman and Chief Executive Officer | |
Date: | May 2, 2014 |
/s/ Mark A. Denien | |
Mark A. Denien | |
Executive Vice President and Chief Financial Officer | |
Date: | May 2, 2014 |
/s/ Dennis D. Oklak | |
Dennis D. Oklak | |
Chairman and Chief Executive Officer of the General Partner | |
Date: | May 2, 2014 |
/s/ Mark A. Denien | |
Mark A. Denien | |
Executive Vice President and Chief Financial Officer of the General Partner | |
Date: | May 2, 2014 |
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Subsequent Events (Details) (USD $)
|
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2014
|
Dec. 31, 2013
|
Jun. 30, 2014
Declaration of Dividends [Member]
|
Jun. 30, 2014
Declaration of Dividends [Member]
Common Stock [Member]
|
Jun. 30, 2014
Declaration of Dividends [Member]
Series J Preferred Stock [Member]
|
Jun. 30, 2014
Declaration of Dividends [Member]
Series K Preferred Stock [Member]
|
Jun. 30, 2014
Declaration of Dividends [Member]
Series L Preferred Stock [Member]
|
Apr. 30, 2014
Prior to Increase Approved by Shareholders [Member]
|
Apr. 30, 2014
After Increase Approved by Shareholders [Member]
|
|
Subsequent Event [Line Items] | |||||||||
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 | 400,000,000 | 600,000,000 | |||||
Common stock dividends declared per share | $ 0.17 | ||||||||
Preferred stock dividends declared per share | $ 0.414063 | $ 0.406250 | $ 0.412500 | ||||||
Record date | May 15, 2014 | May 15, 2014 | May 15, 2014 | May 15, 2014 | |||||
Payment date | May 30, 2014 | May 30, 2014 | May 30, 2014 | May 30, 2014 | |||||
Declared date | Apr. 30, 2014 |
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