Investments in and Advances to Affiliates

Unconsolidated Affiliates

We have equity interests of up to 50.0% in various joint ventures with unrelated third parties that are accounted for using the equity method of accounting because we have the ability to exercise significant influence over their operating and financial policies.

The following table sets forth combined summarized financial information for the Company's unconsolidated affiliates:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012		2013			2012
Income Statements: (1)
Rental and other revenues	$	16,911		$	25,051	$	64,362		$	75,920
Expenses:
Rental property and other expenses	8,733			11,624		31,681			35,706
Depreciation and amortization	5,010			6,355		17,383			18,839
Impairments of real estate assets	15,287			—		20,077			7,180
Interest expense	3,141			4,980		12,569			16,077
Total expenses	32,171			22,959		81,710			77,802
Income/(loss) before disposition of properties	(15,260		)	2,092		(17,348		)	(1,882		)
Gains on disposition of properties	8,256			—		8,323			6,275
Net income/(loss)	$	(7,004	)	$	2,092	$	(9,025	)	$	4,393
The Company's share of:
Depreciation and amortization	$	1,628		$	2,028	$	5,735		$	5,801
Impairments of real estate assets	$	3,487		$	—	$	4,507		$	1,002
Interest expense	$	1,099		$	1,775	$	4,583		$	5,598
Gains on disposition of properties	$	—		$	—	$	431		$	—
Net income/(loss)	$	(3,410	)	$	914	$	(2,835	)	$	1,252

The Company's share of net income/(loss)	$	(3,410	)	$	914	$	(2,835	)	$	1,252
Adjustments for management and other fees	237			410		1,011			1,418
Equity in earnings/(losses) of unconsolidated affiliates	$	(3,173	)	$	1,324	$	(1,824	)	$	2,670

__________


(1)	For the three and nine months ended September 30, 2013, as a result of acquiring our joint venture partner's 60.0% interest in the third quarter of 2013, we consolidated a joint venture previously accounted for under the equity method of accounting.

4. Investments in and Advances to Affiliates - Continued

The following table sets forth combined summarized financial information for the Operating Partnership's unconsolidated affiliates:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012		2013			2012
Income Statements: (1)
Rental and other revenues	$	15,872		$	24,062	$	61,243		$	72,916
Expenses:
Rental property and other expenses	8,126			11,024		29,821			33,901
Depreciation and amortization	4,699			6,044		16,449			17,905
Impairments of real estate assets	15,287			—		20,077			7,180
Interest expense	2,976			4,817		12,086			15,583
Total expenses	31,088			21,885		78,433			74,569
Income/(loss) before disposition of properties	(15,216		)	2,177		(17,190		)	(1,653		)
Gains on disposition of properties	8,256			—		8,323			6,275
Net income/(loss)	$	(6,960	)	$	2,177	$	(8,867	)	$	4,622
The Operating Partnership's share of:
Depreciation and amortization	$	1,589		$	1,989	$	5,618		$	5,684
Impairments of real estate assets	$	3,487		$	—	$	4,507		$	1,002
Interest expense	$	1,079		$	1,754	$	4,523		$	5,536
Gains on disposition of properties	$	—		$	—	$	431		$	—
Net income/(loss)	$	(3,405	)	$	925	$	(2,815	)	$	1,281

The Operating Partnership's share of net income/(loss)	$	(3,405	)	$	925	$	(2,815	)	$	1,281
Adjustments for management and other fees	231			403		940			1,398
Equity in earnings/(losses) of unconsolidated affiliates	$	(3,174	)	$	1,328	$	(1,875	)	$	2,679

__________


(1)	For the three and nine months ended September 30, 2013, as a result of acquiring our joint venture partner's 60.0% interest in the third quarter of 2013, we consolidated a joint venture previously accounted for under the equity method of accounting.

4. Investments in and Advances to Affiliates - Continued

Highwoods DLF 98/29, LLC ("DLF I")

During the second quarter of 2013, DLF I sold an office property to an unrelated third party for a sale price of $5.9 million (after $0.1 million in closing credits to buyer for free rent) and recorded a gain on disposition of discontinued operations of less than $0.1 million. We recorded less than $0.1 million as our share of this gain through equity in earnings of unconsolidated affiliates.

During the third quarter of 2013, DLF I recorded impairment of real estate assets of $15.3 million on an office property in Orlando, FL. We recorded $3.5 million as our share of this impairment charge through equity in earnings of unconsolidated affiliates.

During the first quarter of 2013, DLF I recorded impairments of real estate assets of $4.8 million on an office property in Atlanta, GA and an office property in Charlotte, NC. We recorded $1.0 million as our share of this impairment charge through equity in earnings of unconsolidated affiliates.

These impairments were due to a change in the assumed timing of future dispositions and/or leasing assumptions, which reduced the future expected cash flows from the impaired properties.

Highwoods DLF 97/26 DLF 99/32, LP ("DLF II")

See Note 2 for a description of our acquisition of two office properties in Atlanta, GA from DLF II during the third quarter of 2013.

During the first quarter of 2013, DLF II sold an office property to unrelated third parties for a sale price of $10.1 million (after $0.3 million in closing credits to buyer for free rent) and recorded a gain on disposition of property of less than $0.1 million. As our cost basis is different from the basis reflected at the joint venture level, we recorded $0.4 million of gain through equity in earnings of unconsolidated affiliates.