Maryland | 001-13100 | 56-1871668 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
North Carolina | 000-21731 | 56-1869557 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
• | combined reports better reflect how management and investors view the business as a single operating unit; |
• | combined reports enhance investors' understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management; |
• | combined reports are more efficient for the Company and the Operating Partnership and result in savings in time, effort and expense; and |
• | combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review. |
• | Consolidated Financial Statements; |
• | the following Notes to Consolidated Financial Statements: |
• | Note 8 - Noncontrolling Interests; and |
• | Note 13 - Earnings Per Share and Per Unit; |
• | Item 4 - Controls and Procedures; and |
• | Item 6 - Certifications of CEO and CFO Pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. |
Page | |
PART I - FINANCIAL INFORMATION | |
ITEM 1. FINANCIAL STATEMENTS (unaudited) | |
ITEM 4. CONTROLS AND PROCEDURES | |
PART II - OTHER INFORMATION | |
ITEM 6. EXHIBITS |
September 30, 2015 | December 31, 2014 | ||||||
(as revised) | |||||||
Assets: | |||||||
Real estate assets, at cost: | |||||||
Land | $ | 460,111 | $ | 384,301 | |||
Buildings and tenant improvements | 4,336,244 | 3,807,315 | |||||
Development in process | 157,100 | 205,971 | |||||
Land held for development | 71,997 | 79,355 | |||||
5,025,452 | 4,476,942 | ||||||
Less-accumulated depreciation | (1,096,129 | ) | (1,024,936 | ) | |||
Net real estate assets | 3,929,323 | 3,452,006 | |||||
Real estate and other assets, net, held for sale | 2,629 | 1,038 | |||||
Cash and cash equivalents | 5,184 | 8,832 | |||||
Restricted cash | 19,310 | 14,595 | |||||
Accounts receivable, net of allowance of $1,835 and $1,314, respectively | 27,576 | 48,557 | |||||
Mortgages and notes receivable, net of allowance of $362 and $275, respectively | 2,132 | 13,116 | |||||
Accrued straight-line rents receivable, net of allowance of $993 and $600, respectively | 156,481 | 142,037 | |||||
Investments in and advances to unconsolidated affiliates | 20,674 | 50,685 | |||||
Deferred financing and leasing costs, net of accumulated amortization of $123,463 and $112,804, respectively | 255,849 | 228,768 | |||||
Prepaid expenses and other assets, net of accumulated amortization of $15,697 and $14,259, respectively | 43,537 | 39,489 | |||||
Total Assets | $ | 4,462,695 | $ | 3,999,123 | |||
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity: | |||||||
Mortgages and notes payable | $ | 2,478,753 | $ | 2,071,389 | |||
Accounts payable, accrued expenses and other liabilities | 245,953 | 237,633 | |||||
Financing obligation | 7,402 | 8,962 | |||||
Total Liabilities | 2,732,108 | 2,317,984 | |||||
Commitments and contingencies | |||||||
Noncontrolling interests in the Operating Partnership | 112,768 | 130,048 | |||||
Equity: | |||||||
Preferred Stock, $.01 par value, 50,000,000 authorized shares; | |||||||
8.625% Series A Cumulative Redeemable Preferred Shares (liquidation preference $1,000 per share), 29,050 and 29,060 shares issued and outstanding, respectively | 29,050 | 29,060 | |||||
Common Stock, $.01 par value, 200,000,000 authorized shares; | |||||||
95,329,758 and 92,907,310 shares issued and outstanding, respectively | 953 | 929 | |||||
Additional paid-in capital | 2,579,318 | 2,464,275 | |||||
Distributions in excess of net income available for common stockholders | (1,002,879 | ) | (957,370 | ) | |||
Accumulated other comprehensive loss | (6,610 | ) | (3,912 | ) | |||
Total Stockholders’ Equity | 1,599,832 | 1,532,982 | |||||
Noncontrolling interests in consolidated affiliates | 17,987 | 18,109 | |||||
Total Equity | 1,617,819 | 1,551,091 | |||||
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity | $ | 4,462,695 | $ | 3,999,123 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Rental and other revenues | $ | 163,736 | $ | 152,629 | $ | 482,182 | $ | 453,804 | |||||||
Operating expenses: | |||||||||||||||
Rental property and other expenses | 59,758 | 57,383 | 174,549 | 169,048 | |||||||||||
Depreciation and amortization | 54,652 | 48,287 | 156,200 | 146,895 | |||||||||||
Impairments of real estate assets | — | — | — | 588 | |||||||||||
General and administrative | 9,182 | 7,526 | 29,511 | 26,973 | |||||||||||
Total operating expenses | 123,592 | 113,196 | 360,260 | 343,504 | |||||||||||
Interest expense: | |||||||||||||||
Contractual | 20,484 | 20,962 | 61,783 | 62,352 | |||||||||||
Amortization of deferred financing costs | 873 | 819 | 2,501 | 2,270 | |||||||||||
Financing obligation | 155 | 567 | 653 | 301 | |||||||||||
21,512 | 22,348 | 64,937 | 64,923 | ||||||||||||
Other income: | |||||||||||||||
Interest and other income | 1,038 | 1,054 | 3,475 | 3,863 | |||||||||||
Losses on debt extinguishment | — | (326 | ) | (220 | ) | (308 | ) | ||||||||
1,038 | 728 | 3,255 | 3,555 | ||||||||||||
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates | 19,670 | 17,813 | 60,240 | 48,932 | |||||||||||
Gains on disposition of property | 7,012 | 36,238 | 10,581 | 42,185 | |||||||||||
Gain on disposition of investment in unconsolidated affiliate | 4,155 | — | 4,155 | — | |||||||||||
Equity in earnings of unconsolidated affiliates | 780 | 248 | 4,367 | 886 | |||||||||||
Income from continuing operations | 31,617 | 54,299 | 79,343 | 92,003 | |||||||||||
Discontinued operations: | |||||||||||||||
Net gains on disposition of discontinued operations | — | — | — | 384 | |||||||||||
— | — | — | 384 | ||||||||||||
Net income | 31,617 | 54,299 | 79,343 | 92,387 | |||||||||||
Net (income) attributable to noncontrolling interests in the Operating Partnership | (918 | ) | (1,673 | ) | (2,296 | ) | (2,813 | ) | |||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates | (324 | ) | (291 | ) | (948 | ) | (1,152 | ) | |||||||
Dividends on Preferred Stock | (626 | ) | (627 | ) | (1,879 | ) | (1,881 | ) | |||||||
Net income available for common stockholders | $ | 29,749 | $ | 51,708 | $ | 74,220 | $ | 86,541 | |||||||
Earnings per Common Share – basic: | |||||||||||||||
Income from continuing operations available for common stockholders | $ | 0.31 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Income from discontinued operations available for common stockholders | — | — | — | — | |||||||||||
Net income available for common stockholders | $ | 0.31 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Weighted average Common Shares outstanding – basic | 94,693 | 90,668 | 93,996 | 90,299 | |||||||||||
Earnings per Common Share – diluted: | |||||||||||||||
Income from continuing operations available for common stockholders | $ | 0.31 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Income from discontinued operations available for common stockholders | — | — | — | — | |||||||||||
Net income available for common stockholders | $ | 0.31 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Weighted average Common Shares outstanding – diluted | 97,661 | 93,723 | 97,003 | 93,358 | |||||||||||
Dividends declared per Common Share | $ | 0.425 | $ | 0.425 | $ | 1.275 | $ | 1.275 | |||||||
Net income available for common stockholders: | |||||||||||||||
Income from continuing operations available for common stockholders | $ | 29,749 | $ | 51,708 | $ | 74,220 | $ | 86,169 | |||||||
Income from discontinued operations available for common stockholders | — | — | — | 372 | |||||||||||
Net income available for common stockholders | $ | 29,749 | $ | 51,708 | $ | 74,220 | $ | 86,541 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Comprehensive income: | |||||||||||||||
Net income | $ | 31,617 | $ | 54,299 | $ | 79,343 | $ | 92,387 | |||||||
Other comprehensive income/(loss): | |||||||||||||||
Unrealized gains/(losses) on tax increment financing bond | (7 | ) | 23 | 187 | 293 | ||||||||||
Unrealized gains/(losses) on cash flow hedges | (3,021 | ) | 913 | (5,666 | ) | (3,337 | ) | ||||||||
Amortization of cash flow hedges | 932 | 952 | 2,781 | 2,824 | |||||||||||
Total other comprehensive income/(loss) | (2,096 | ) | 1,888 | (2,698 | ) | (220 | ) | ||||||||
Total comprehensive income | 29,521 | 56,187 | 76,645 | 92,167 | |||||||||||
Less-comprehensive (income) attributable to noncontrolling interests | (1,242 | ) | (1,964 | ) | (3,244 | ) | (3,965 | ) | |||||||
Comprehensive income attributable to common stockholders | $ | 28,279 | $ | 54,223 | $ | 73,401 | $ | 88,202 |
Number of Common Shares | Common Stock | Series A Cumulative Redeemable Preferred Shares | Additional Paid-In Capital | Accumulated Other Compre-hensive Loss | Non-controlling Interests in Consolidated Affiliates | Distributions in Excess of Net Income Available for Common Stockholders | Total | |||||||||||||||||||||||
(as revised) | (as revised) | |||||||||||||||||||||||||||||
Balance at December 31, 2014 | 92,907,310 | $ | 929 | $ | 29,060 | $ | 2,464,275 | $ | (3,912 | ) | $ | 18,109 | $ | (957,370 | ) | $ | 1,551,091 | |||||||||||||
Issuances of Common Stock, net of issuance costs and tax withholdings | 2,268,380 | 23 | — | 93,193 | — | — | — | 93,216 | ||||||||||||||||||||||
Conversions of Common Units to Common Stock | 26,820 | — | — | 1,206 | — | — | — | 1,206 | ||||||||||||||||||||||
Dividends on Common Stock | — | — | — | — | — | (119,729 | ) | (119,729 | ) | |||||||||||||||||||||
Dividends on Preferred Stock | — | — | — | — | — | (1,879 | ) | (1,879 | ) | |||||||||||||||||||||
Adjustment of noncontrolling interests in the Operating Partnership to fair value | — | — | 14,649 | — | — | — | 14,649 | |||||||||||||||||||||||
Distributions to noncontrolling interests in consolidated affiliates | — | — | — | — | (1,070 | ) | — | (1,070 | ) | |||||||||||||||||||||
Issuances of restricted stock | 128,951 | — | — | — | — | — | — | — | ||||||||||||||||||||||
Redemptions/repurchases of Preferred Stock | — | (10 | ) | — | — | — | — | (10 | ) | |||||||||||||||||||||
Share-based compensation expense, net of forfeitures | (1,703 | ) | 1 | — | 5,995 | — | — | — | 5,996 | |||||||||||||||||||||
Net (income) attributable to noncontrolling interests in the Operating Partnership | — | — | — | — | — | (2,296 | ) | (2,296 | ) | |||||||||||||||||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates | — | — | — | — | 948 | (948 | ) | — | ||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 79,343 | 79,343 | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | (2,698 | ) | — | — | (2,698 | ) | |||||||||||||||||||||
Total comprehensive income | 76,645 | |||||||||||||||||||||||||||||
Balance at September 30, 2015 | 95,329,758 | $ | 953 | $ | 29,050 | $ | 2,579,318 | $ | (6,610 | ) | $ | 17,987 | $ | (1,002,879 | ) | $ | 1,617,819 |
Number of Common Shares | Common Stock | Series A Cumulative Redeemable Preferred Shares | Additional Paid-In Capital | Accumulated Other Compre-hensive Loss | Non-controlling Interests in Consolidated Affiliates | Distributions in Excess of Net Income Available for Common Stockholders | Total | |||||||||||||||||||||||
(as revised) | (as revised) | |||||||||||||||||||||||||||||
Balance at December 31, 2013 | 89,920,915 | $ | 899 | $ | 29,077 | $ | 2,370,368 | $ | (2,611 | ) | $ | 21,396 | $ | (911,662 | ) | $ | 1,507,467 | |||||||||||||
Issuances of Common Stock, net of issuance costs and tax withholdings | 1,175,191 | 12 | — | 45,910 | — | — | — | 45,922 | ||||||||||||||||||||||
Conversions of Common Units to Common Stock | 4,417 | — | — | 162 | — | — | — | 162 | ||||||||||||||||||||||
Dividends on Common Stock | — | — | — | — | — | (115,037 | ) | (115,037 | ) | |||||||||||||||||||||
Dividends on Preferred Stock | — | — | — | — | — | (1,881 | ) | (1,881 | ) | |||||||||||||||||||||
Adjustment of noncontrolling interests in the Operating Partnership to fair value | — | — | (8,955 | ) | — | — | — | (8,955 | ) | |||||||||||||||||||||
Distributions to noncontrolling interests in consolidated affiliates | — | — | — | — | (940 | ) | — | (940 | ) | |||||||||||||||||||||
Issuances of restricted stock | 169,501 | — | — | — | — | — | — | — | ||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | 2 | — | 6,177 | — | — | — | 6,179 | |||||||||||||||||||||||
Net (income) attributable to noncontrolling interests in the Operating Partnership | — | — | — | — | — | (2,813 | ) | (2,813 | ) | |||||||||||||||||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates | — | — | — | — | 1,152 | (1,152 | ) | — | ||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 92,387 | 92,387 | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | (220 | ) | — | — | (220 | ) | |||||||||||||||||||||
Total comprehensive income | 92,167 | |||||||||||||||||||||||||||||
Balance at September 30, 2014 | 91,270,024 | $ | 913 | $ | 29,077 | $ | 2,413,662 | $ | (2,831 | ) | $ | 21,608 | $ | (940,158 | ) | $ | 1,522,271 |
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Operating activities: | |||||||
Net income | $ | 79,343 | $ | 92,387 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 156,200 | 146,895 | |||||
Amortization of lease incentives and acquisition-related intangible assets and liabilities | 214 | 249 | |||||
Share-based compensation expense | 5,996 | 6,179 | |||||
Allowance for losses on accounts and accrued straight-line rents receivable | 1,851 | 1,942 | |||||
Accrued interest on mortgages and notes receivable | (313 | ) | (354 | ) | |||
Amortization of deferred financing costs | 2,501 | 2,270 | |||||
Amortization of cash flow hedges | 2,781 | 2,824 | |||||
Amortization of mortgages and notes payable fair value adjustments | 7 | (845 | ) | ||||
Impairments of real estate assets | — | 588 | |||||
Losses on debt extinguishment | 220 | 308 | |||||
Net gains on disposition of property | (10,581 | ) | (42,569 | ) | |||
Gain on disposition of investment in unconsolidated affiliate | (4,155 | ) | — | ||||
Equity in earnings of unconsolidated affiliates | (4,367 | ) | (886 | ) | |||
Changes in financing obligation | 162 | (241 | ) | ||||
Distributions of earnings from unconsolidated affiliates | 4,099 | 1,634 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 1,716 | (1,762 | ) | ||||
Prepaid expenses and other assets | (3,475 | ) | (2,927 | ) | |||
Accrued straight-line rents receivable | (16,955 | ) | (16,202 | ) | |||
Accounts payable, accrued expenses and other liabilities | (5,834 | ) | (5,815 | ) | |||
Net cash provided by operating activities | 209,410 | 183,675 | |||||
Investing activities: | |||||||
Investments in acquired real estate and related intangible assets, net of cash acquired | (408,634 | ) | (83,751 | ) | |||
Investments in development in process | (87,222 | ) | (122,106 | ) | |||
Investments in tenant improvements and deferred leasing costs | (85,234 | ) | (80,132 | ) | |||
Investments in building improvements | (38,295 | ) | (39,401 | ) | |||
Net proceeds from disposition of real estate assets | 22,781 | 151,987 | |||||
Net proceeds from disposition of investment in unconsolidated affiliate | 6,919 | — | |||||
Distributions of capital from unconsolidated affiliates | 10,227 | 725 | |||||
Investments in mortgages and notes receivable | (1,772 | ) | (419 | ) | |||
Repayments of mortgages and notes receivable | 9,301 | 16,974 | |||||
Investments in and advances/repayments to/from unconsolidated affiliates | 20,416 | (6,425 | ) | ||||
Redemption of investment in unconsolidated affiliate | — | 4,660 | |||||
Changes in restricted cash and other investing activities | (12,582 | ) | (1,296 | ) | |||
Net cash used in investing activities | (564,095 | ) | (159,184 | ) | |||
Financing activities: | |||||||
Dividends on Common Stock | (119,729 | ) | (115,037 | ) | |||
Redemptions/repurchases of Preferred Stock | (10 | ) | — | ||||
Redemptions of Common Units | — | (93 | ) | ||||
Dividends on Preferred Stock | (1,879 | ) | (1,881 | ) | |||
Distributions to noncontrolling interests in the Operating Partnership | (3,721 | ) | (3,745 | ) | |||
Distributions to noncontrolling interests in consolidated affiliates | (1,070 | ) | (940 | ) | |||
Proceeds from the issuance of Common Stock | 98,485 | 49,216 | |||||
Costs paid for the issuance of Common Stock | (1,518 | ) | (600 | ) | |||
Repurchase of shares related to tax withholdings | (3,751 | ) | (2,694 | ) | |||
Borrowings on revolving credit facility | 393,900 | 377,700 | |||||
Repayments of revolving credit facility | (337,900 | ) | (443,400 | ) | |||
Borrowings on mortgages and notes payable | 375,000 | 296,949 | |||||
Repayments of mortgages and notes payable | (43,076 | ) | (172,810 | ) | |||
Payments on financing obligation | (1,722 | ) | (2,904 | ) | |||
Payments of debt extinguishment costs | — | (369 | ) | ||||
Additions to deferred financing costs and other financing activities | (1,972 | ) | (2,467 | ) | |||
Net cash provided by/(used in) financing activities | 351,037 | (23,075 | ) | ||||
Net increase/(decrease) in cash and cash equivalents | $ | (3,648 | ) | $ | 1,416 |
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Net increase/(decrease) in cash and cash equivalents | $ | (3,648 | ) | $ | 1,416 | ||
Cash and cash equivalents at beginning of the period | 8,832 | 10,184 | |||||
Cash and cash equivalents at end of the period | $ | 5,184 | $ | 11,600 |
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Cash paid for interest, net of amounts capitalized | $ | 62,661 | $ | 63,340 |
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Unrealized losses on cash flow hedges | $ | (5,666 | ) | $ | (3,337 | ) | |
Conversions of Common Units to Common Stock | 1,206 | 162 | |||||
Changes in accrued capital expenditures | 1,759 | 17,255 | |||||
Write-off of fully depreciated real estate assets | 44,742 | 29,953 | |||||
Write-off of fully amortized deferred financing and leasing costs | 27,658 | 17,138 | |||||
Adjustment of noncontrolling interests in the Operating Partnership to fair value | (14,649 | ) | 8,955 | ||||
Unrealized gains on tax increment financing bond | 187 | 293 | |||||
Assumption of mortgages and notes payable related to acquisition activities | 19,277 | — | |||||
Reduction in the carrying amount of real estate purchased from unconsolidated affiliate by our share of the unconsolidated affiliate's gain | 3,124 | — | |||||
Contingent consideration in connection with the acquisition of land | 900 | — |
September 30, 2015 | December 31, 2014 | ||||||
(as revised) | |||||||
Assets: | |||||||
Real estate assets, at cost: | |||||||
Land | $ | 460,111 | $ | 384,301 | |||
Buildings and tenant improvements | 4,336,244 | 3,807,315 | |||||
Development in process | 157,100 | 205,971 | |||||
Land held for development | 71,997 | 79,355 | |||||
5,025,452 | 4,476,942 | ||||||
Less-accumulated depreciation | (1,096,129 | ) | (1,024,936 | ) | |||
Net real estate assets | 3,929,323 | 3,452,006 | |||||
Real estate and other assets, net, held for sale | 2,629 | 1,038 | |||||
Cash and cash equivalents | 5,184 | 8,938 | |||||
Restricted cash | 19,310 | 14,595 | |||||
Accounts receivable, net of allowance of $1,835 and $1,314, respectively | 27,576 | 48,557 | |||||
Mortgages and notes receivable, net of allowance of $362 and $275, respectively | 2,132 | 13,116 | |||||
Accrued straight-line rents receivable, net of allowance of $993 and $600, respectively | 156,481 | 142,037 | |||||
Investments in and advances to unconsolidated affiliates | 20,674 | 50,685 | |||||
Deferred financing and leasing costs, net of accumulated amortization of $123,463 and $112,804, respectively | 255,849 | 228,768 | |||||
Prepaid expenses and other assets, net of accumulated amortization of $15,697 and $14,259, respectively | 43,537 | 39,489 | |||||
Total Assets | $ | 4,462,695 | $ | 3,999,229 | |||
Liabilities, Redeemable Operating Partnership Units and Capital: | |||||||
Mortgages and notes payable | $ | 2,478,753 | $ | 2,071,389 | |||
Accounts payable, accrued expenses and other liabilities | 245,953 | 237,547 | |||||
Financing obligation | 7,402 | 8,962 | |||||
Total Liabilities | 2,732,108 | 2,317,898 | |||||
Commitments and contingencies | |||||||
Redeemable Operating Partnership Units: | |||||||
Common Units, 2,910,135 and 2,936,955 outstanding, respectively | 112,768 | 130,048 | |||||
Series A Preferred Units (liquidation preference $1,000 per unit), 29,050 and 29,060 units issued and outstanding, respectively | 29,050 | 29,060 | |||||
Total Redeemable Operating Partnership Units | 141,818 | 159,108 | |||||
Capital: | |||||||
Common Units: | |||||||
General partner Common Units, 978,311 and 954,355 outstanding, respectively | 15,771 | 15,078 | |||||
Limited partner Common Units, 93,942,638 and 91,544,146 outstanding, respectively | 1,561,621 | 1,492,948 | |||||
Accumulated other comprehensive loss | (6,610 | ) | (3,912 | ) | |||
Noncontrolling interests in consolidated affiliates | 17,987 | 18,109 | |||||
Total Capital | 1,588,769 | 1,522,223 | |||||
Total Liabilities, Redeemable Operating Partnership Units and Capital | $ | 4,462,695 | $ | 3,999,229 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Rental and other revenues | $ | 163,736 | $ | 152,629 | $ | 482,182 | $ | 453,804 | |||||||
Operating expenses: | |||||||||||||||
Rental property and other expenses | 59,758 | 57,383 | 174,549 | 169,015 | |||||||||||
Depreciation and amortization | 54,652 | 48,287 | 156,200 | 146,895 | |||||||||||
Impairments of real estate assets | — | — | — | 588 | |||||||||||
General and administrative | 9,182 | 7,526 | 29,511 | 27,006 | |||||||||||
Total operating expenses | 123,592 | 113,196 | 360,260 | 343,504 | |||||||||||
Interest expense: | |||||||||||||||
Contractual | 20,484 | 20,962 | 61,783 | 62,352 | |||||||||||
Amortization of deferred financing costs | 873 | 819 | 2,501 | 2,270 | |||||||||||
Financing obligation | 155 | 567 | 653 | 301 | |||||||||||
21,512 | 22,348 | 64,937 | 64,923 | ||||||||||||
Other income: | |||||||||||||||
Interest and other income | 1,038 | 1,054 | 3,475 | 3,863 | |||||||||||
Losses on debt extinguishment | — | (326 | ) | (220 | ) | (308 | ) | ||||||||
1,038 | 728 | 3,255 | 3,555 | ||||||||||||
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates | 19,670 | 17,813 | 60,240 | 48,932 | |||||||||||
Gains on disposition of property | 7,012 | 36,238 | 10,581 | 42,185 | |||||||||||
Gain on disposition of investment in unconsolidated affiliate | 4,155 | — | 4,155 | — | |||||||||||
Equity in earnings of unconsolidated affiliates | 780 | 248 | 4,367 | 886 | |||||||||||
Income from continuing operations | 31,617 | 54,299 | 79,343 | 92,003 | |||||||||||
Discontinued operations: | |||||||||||||||
Net gains on disposition of discontinued operations | — | — | — | 384 | |||||||||||
— | — | — | 384 | ||||||||||||
Net income | 31,617 | 54,299 | 79,343 | 92,387 | |||||||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates | (324 | ) | (291 | ) | (948 | ) | (1,152 | ) | |||||||
Distributions on Preferred Units | (626 | ) | (627 | ) | (1,879 | ) | (1,881 | ) | |||||||
Net income available for common unitholders | $ | 30,667 | $ | 53,381 | $ | 76,516 | $ | 89,354 | |||||||
Earnings per Common Unit – basic: | |||||||||||||||
Income from continuing operations available for common unitholders | $ | 0.32 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Income from discontinued operations available for common unitholders | — | — | — | — | |||||||||||
Net income available for common unitholders | $ | 0.32 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Weighted average Common Units outstanding – basic | 97,194 | 93,196 | 96,505 | 92,828 | |||||||||||
Earnings per Common Unit – diluted: | |||||||||||||||
Income from continuing operations available for common unitholders | $ | 0.32 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Income from discontinued operations available for common unitholders | — | — | — | — | |||||||||||
Net income available for common unitholders | $ | 0.32 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Weighted average Common Units outstanding – diluted | 97,252 | 93,314 | 96,594 | 92,949 | |||||||||||
Distributions declared per Common Unit | $ | 0.425 | $ | 0.425 | $ | 1.275 | $ | 1.275 | |||||||
Net income available for common unitholders: | |||||||||||||||
Income from continuing operations available for common unitholders | $ | 30,667 | $ | 53,381 | $ | 76,516 | $ | 88,970 | |||||||
Income from discontinued operations available for common unitholders | — | — | — | 384 | |||||||||||
Net income available for common unitholders | $ | 30,667 | $ | 53,381 | $ | 76,516 | $ | 89,354 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Comprehensive income: | |||||||||||||||
Net income | $ | 31,617 | $ | 54,299 | $ | 79,343 | $ | 92,387 | |||||||
Other comprehensive income/(loss): | |||||||||||||||
Unrealized gains/(losses) on tax increment financing bond | (7 | ) | 23 | 187 | 293 | ||||||||||
Unrealized gains/(losses) on cash flow hedges | (3,021 | ) | 913 | (5,666 | ) | (3,337 | ) | ||||||||
Amortization of cash flow hedges | 932 | 952 | 2,781 | 2,824 | |||||||||||
Total other comprehensive income/(loss) | (2,096 | ) | 1,888 | (2,698 | ) | (220 | ) | ||||||||
Total comprehensive income | 29,521 | 56,187 | 76,645 | 92,167 | |||||||||||
Less-comprehensive (income) attributable to noncontrolling interests | (324 | ) | (291 | ) | (948 | ) | (1,152 | ) | |||||||
Comprehensive income attributable to common unitholders | $ | 29,197 | $ | 55,896 | $ | 75,697 | $ | 91,015 |
Common Units | Accumulated Other Comprehensive Loss | Noncontrolling Interests in Consolidated Affiliates | Total | ||||||||||||||||
General Partners’ Capital | Limited Partners’ Capital | ||||||||||||||||||
(as revised) | (as revised) | (as revised) | |||||||||||||||||
Balance at December 31, 2014 | $ | 15,078 | $ | 1,492,948 | $ | (3,912 | ) | $ | 18,109 | $ | 1,522,223 | ||||||||
Issuances of Common Units, net of issuance costs and tax withholdings | 932 | 92,284 | — | — | 93,216 | ||||||||||||||
Distributions paid on Common Units | (1,230 | ) | (121,699 | ) | — | — | (122,929 | ) | |||||||||||
Distributions paid on Preferred Units | (19 | ) | (1,860 | ) | — | — | (1,879 | ) | |||||||||||
Share-based compensation expense, net of forfeitures | 60 | 5,936 | — | — | 5,996 | ||||||||||||||
Distributions to noncontrolling interests in consolidated affiliates | — | — | — | (1,070 | ) | (1,070 | ) | ||||||||||||
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner | 166 | 16,401 | — | — | 16,567 | ||||||||||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates | (9 | ) | (939 | ) | — | 948 | — | ||||||||||||
Comprehensive income: | |||||||||||||||||||
Net income | 793 | 78,550 | — | — | 79,343 | ||||||||||||||
Other comprehensive loss | — | — | (2,698 | ) | — | (2,698 | ) | ||||||||||||
Total comprehensive income | 76,645 | ||||||||||||||||||
Balance at September 30, 2015 | $ | 15,771 | $ | 1,561,621 | $ | (6,610 | ) | $ | 17,987 | $ | 1,588,769 |
Common Units | Accumulated Other Comprehensive Loss | Noncontrolling Interests in Consolidated Affiliates | Total | ||||||||||||||||
General Partners’ Capital | Limited Partners’ Capital | ||||||||||||||||||
(as revised) | (as revised) | (as revised) | |||||||||||||||||
Balance at December 31, 2013 | $ | 14,596 | $ | 1,445,181 | $ | (2,611 | ) | $ | 21,396 | $ | 1,478,562 | ||||||||
Issuances of Common Units, net of issuance costs and tax withholdings | 459 | 45,463 | — | — | 45,922 | ||||||||||||||
Redemptions of Common Units | (1 | ) | (92 | ) | — | — | (93 | ) | |||||||||||
Distributions paid on Common Units | (1,183 | ) | (117,078 | ) | — | — | (118,261 | ) | |||||||||||
Distributions paid on Preferred Units | (19 | ) | (1,862 | ) | — | — | (1,881 | ) | |||||||||||
Share-based compensation expense, net of forfeitures | 62 | 6,117 | — | — | 6,179 | ||||||||||||||
Distributions to noncontrolling interests in consolidated affiliates | — | — | — | (940 | ) | (940 | ) | ||||||||||||
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner | (83 | ) | (8,250 | ) | — | — | (8,333 | ) | |||||||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates | (12 | ) | (1,140 | ) | — | 1,152 | — | ||||||||||||
Comprehensive income: | |||||||||||||||||||
Net income | 924 | 91,463 | — | — | 92,387 | ||||||||||||||
Other comprehensive loss | — | — | (220 | ) | — | (220 | ) | ||||||||||||
Total comprehensive income | 92,167 | ||||||||||||||||||
Balance at September 30, 2014 | $ | 14,743 | $ | 1,459,802 | $ | (2,831 | ) | $ | 21,608 | $ | 1,493,322 |
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Operating activities: | |||||||
Net income | $ | 79,343 | $ | 92,387 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 156,200 | 146,895 | |||||
Amortization of lease incentives and acquisition-related intangible assets and liabilities | 214 | 249 | |||||
Share-based compensation expense | 5,996 | 6,179 | |||||
Allowance for losses on accounts and accrued straight-line rents receivable | 1,851 | 1,942 | |||||
Accrued interest on mortgages and notes receivable | (313 | ) | (354 | ) | |||
Amortization of deferred financing costs | 2,501 | 2,270 | |||||
Amortization of cash flow hedges | 2,781 | 2,824 | |||||
Amortization of mortgages and notes payable fair value adjustments | 7 | (845 | ) | ||||
Impairments of real estate assets | — | 588 | |||||
Losses on debt extinguishment | 220 | 308 | |||||
Net gains on disposition of property | (10,581 | ) | (42,569 | ) | |||
Gain on disposition of investment in unconsolidated affiliate | (4,155 | ) | — | ||||
Equity in earnings of unconsolidated affiliates | (4,367 | ) | (886 | ) | |||
Changes in financing obligation | 162 | (241 | ) | ||||
Distributions of earnings from unconsolidated affiliates | 4,099 | 1,634 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 1,716 | (1,762 | ) | ||||
Prepaid expenses and other assets | (3,475 | ) | (2,885 | ) | |||
Accrued straight-line rents receivable | (16,955 | ) | (16,202 | ) | |||
Accounts payable, accrued expenses and other liabilities | (5,748 | ) | (5,804 | ) | |||
Net cash provided by operating activities | 209,496 | 183,728 | |||||
Investing activities: | |||||||
Investments in acquired real estate and related intangible assets, net of cash acquired | (408,634 | ) | (83,751 | ) | |||
Investments in development in process | (87,222 | ) | (122,106 | ) | |||
Investments in tenant improvements and deferred leasing costs | (85,234 | ) | (80,132 | ) | |||
Investments in building improvements | (38,295 | ) | (39,401 | ) | |||
Net proceeds from disposition of real estate assets | 22,781 | 151,987 | |||||
Net proceeds from disposition of investment in unconsolidated affiliate | 6,919 | — | |||||
Distributions of capital from unconsolidated affiliates | 10,227 | 725 | |||||
Investments in mortgages and notes receivable | (1,772 | ) | (419 | ) | |||
Repayments of mortgages and notes receivable | 9,301 | 16,974 | |||||
Investments in and advances/repayments to/from unconsolidated affiliates | 20,416 | (6,425 | ) | ||||
Redemption of investment in unconsolidated affiliate | — | 4,660 | |||||
Changes in restricted cash and other investing activities | (12,582 | ) | (1,296 | ) | |||
Net cash used in investing activities | (564,095 | ) | (159,184 | ) | |||
Financing activities: | |||||||
Distributions on Common Units | (122,929 | ) | (118,261 | ) | |||
Redemptions/repurchases of Preferred Units | (10 | ) | — | ||||
Redemptions of Common Units | — | (93 | ) | ||||
Distributions on Preferred Units | (1,879 | ) | (1,881 | ) | |||
Distributions to noncontrolling interests in consolidated affiliates | (1,070 | ) | (940 | ) | |||
Proceeds from the issuance of Common Units | 98,485 | 49,216 | |||||
Costs paid for the issuance of Common Units | (1,518 | ) | (600 | ) | |||
Repurchase of units related to tax withholdings | (3,751 | ) | (2,694 | ) | |||
Borrowings on revolving credit facility | 393,900 | 377,700 | |||||
Repayments of revolving credit facility | (337,900 | ) | (443,400 | ) | |||
Borrowings on mortgages and notes payable | 375,000 | 296,949 | |||||
Repayments of mortgages and notes payable | (43,076 | ) | (172,810 | ) | |||
Payments on financing obligation | (1,722 | ) | (2,904 | ) | |||
Payments of debt extinguishment costs | — | (369 | ) | ||||
Additions to deferred financing costs and other financing activities | (2,685 | ) | (3,032 | ) | |||
Net cash provided by/(used in) financing activities | 350,845 | (23,119 | ) | ||||
Net increase/(decrease) in cash and cash equivalents | $ | (3,754 | ) | $ | 1,425 |
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Net increase/(decrease) in cash and cash equivalents | $ | (3,754 | ) | $ | 1,425 | ||
Cash and cash equivalents at beginning of the period | 8,938 | 10,281 | |||||
Cash and cash equivalents at end of the period | $ | 5,184 | $ | 11,706 |
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Cash paid for interest, net of amounts capitalized | $ | 62,661 | $ | 63,340 |
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Unrealized losses on cash flow hedges | $ | (5,666 | ) | $ | (3,337 | ) | |
Changes in accrued capital expenditures | 1,759 | 17,255 | |||||
Write-off of fully depreciated real estate assets | 44,742 | 29,953 | |||||
Write-off of fully amortized deferred financing and leasing costs | 27,658 | 17,138 | |||||
Adjustment of Redeemable Common Units to fair value | (17,280 | ) | 7,768 | ||||
Unrealized gains on tax increment financing bond | 187 | 293 | |||||
Assumption of mortgages and notes payable related to acquisition activities | 19,277 | — | |||||
Reduction in the carrying amount of real estate purchased from unconsolidated affiliate by our share of the unconsolidated affiliate's gain | 3,124 | — | |||||
Contingent consideration in connection with the acquisition of land | 900 | — |
December 31, 2014 | |||||||
Previously Reported | As Revised | ||||||
Net real estate assets | $ | 3,481,406 | $ | 3,452,006 | |||
Investments in and advances to unconsolidated affiliates | $ | 27,071 | $ | 50,685 | |||
Total Assets | $ | 4,004,909 | $ | 3,999,123 | |||
Financing obligations | $ | 23,519 | $ | 8,962 | |||
Distributions in excess of net income available for common stockholders | $ | (966,141 | ) | $ | (957,370 | ) | |
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity | $ | 4,004,909 | $ | 3,999,123 |
• | a building in Tampa, FL encompassing 528,000 rentable square feet for a net purchase price of $113.5 million and an adjacent land parcel for a purchase price of $2.2 million; and |
• | two buildings in Atlanta, GA encompassing 896,000 rentable square feet for a net purchase price of $290.3 million. |
• | land in Atlanta, GA for a purchase price and related transaction costs of $5.2 million (including contingent consideration of $0.9 million); and |
• | our Highwoods DLF 98/29, LLC joint venture partner’s 77.2% interest in a building in Orlando, FL encompassing 168,000 rentable square feet in exchange for the assumption of secured debt recorded at fair value of $19.3 million (see Note 6). |
Total Purchase Price Allocation | |||
Real estate assets | $ | 275,639 | |
Acquisition-related intangible assets (in deferred financing and leasing costs) | 23,722 | ||
Acquisition-related below market lease liabilities (in accounts payable, accrued expenses and other liabilities) | (9,076 | ) | |
Total allocation | $ | 290,285 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Pro forma revenues | $ | 171,247 | $ | 159,944 | $ | 505,107 | $ | 477,120 | |||||||
Pro forma net income | $ | 33,354 | $ | 54,176 | $ | 80,647 | $ | 92,019 | |||||||
Pro forma net income available for common stockholders | $ | 31,486 | $ | 51,585 | $ | 75,524 | $ | 86,173 | |||||||
Pro forma earnings per share - basic | $ | 0.33 | $ | 0.57 | $ | 0.80 | $ | 0.95 | |||||||
Pro forma earnings per share - diluted | $ | 0.33 | $ | 0.57 | $ | 0.80 | $ | 0.95 |
• | a building for a sale price of $15.3 million and recorded a gain on disposition of property of $6.5 million; and |
• | land for a sale price of $1.8 million and recorded a gain on disposition of property of $0.5 million. |
• | two buildings for an aggregate sale price of $3.5 million and recorded aggregate gains on disposition of property of $0.4 million; and |
• | land for a sale price of $2.5 million and recorded a gain on disposition of property of $0.8 million. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Income Statements: | |||||||||||||||
Rental and other revenues | $ | 12,323 | $ | 12,425 | $ | 36,977 | $ | 37,703 | |||||||
Expenses: | |||||||||||||||
Rental property and other expenses | 5,985 | 6,441 | 17,683 | 18,880 | |||||||||||
Depreciation and amortization | 3,193 | 3,281 | 9,418 | 10,098 | |||||||||||
Interest expense | 1,645 | 2,201 | 5,826 | 6,713 | |||||||||||
Total expenses | 10,823 | 11,923 | 32,927 | 35,691 | |||||||||||
Income before disposition of property | 1,500 | 502 | 4,050 | 2,012 | |||||||||||
Gains on disposition of property | — | — | 18,181 | 1,949 | |||||||||||
Net income | $ | 1,500 | $ | 502 | $ | 22,231 | $ | 3,961 |
September 30, 2015 | December 31, 2014 | ||||||
Assets: | |||||||
Deferred financing costs | $ | 19,935 | $ | 19,478 | |||
Less accumulated amortization | (8,906 | ) | (7,953 | ) | |||
11,029 | 11,525 | ||||||
Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets) | 359,377 | 322,094 | |||||
Less accumulated amortization | (114,557 | ) | (104,851 | ) | |||
244,820 | 217,243 | ||||||
Deferred financing and leasing costs, net | $ | 255,849 | $ | 228,768 | |||
Liabilities (in accounts payable, accrued expenses and other liabilities): | |||||||
Acquisition-related below market lease liabilities | $ | 65,002 | $ | 55,783 | |||
Less accumulated amortization | (17,166 | ) | (13,548 | ) | |||
$ | 47,836 | $ | 42,235 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Amortization of deferred financing costs | $ | 873 | $ | 819 | $ | 2,501 | $ | 2,270 | |||||||
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization) | $ | 11,176 | $ | 9,465 | $ | 31,638 | $ | 29,443 | |||||||
Amortization of lease incentives (in rental and other revenues) | $ | 378 | $ | 327 | $ | 1,162 | $ | 1,077 | |||||||
Amortization of acquisition-related intangible assets (in rental and other revenues) | $ | 1,414 | $ | 1,080 | $ | 3,769 | $ | 3,310 | |||||||
Amortization of acquisition-related intangible assets (in rental property and other expenses) | $ | 140 | $ | 140 | $ | 416 | $ | 416 | |||||||
Amortization of acquisition-related below market lease liabilities (in rental and other revenues) | $ | (1,727 | ) | $ | (1,532 | ) | $ | (5,133 | ) | $ | (4,554 | ) |
Amortization of Deferred Financing Costs | Amortization of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization) | Amortization of Lease Incentives (in Rental and Other Revenues) | Amortization of Acquisition-Related Intangible Assets (in Rental and Other Revenues) | Amortization of Acquisition-Related Intangible Assets (in Rental Property and Other Expenses) | Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues) | |||||||||||||||||||
October 1 through December 31, 2015 | $ | 1,049 | $ | 12,976 | $ | 353 | $ | 1,111 | $ | 132 | $ | (1,888 | ) | |||||||||||
2016 | 3,252 | 45,955 | 1,298 | 3,884 | 553 | (6,997 | ) | |||||||||||||||||
2017 | 2,711 | 38,353 | 1,197 | 2,731 | 553 | (6,653 | ) | |||||||||||||||||
2018 | 1,531 | 31,244 | 1,091 | 1,752 | 553 | (6,216 | ) | |||||||||||||||||
2019 | 1,123 | 25,530 | 898 | 1,307 | 553 | (5,740 | ) | |||||||||||||||||
Thereafter | 1,363 | 65,865 | 2,845 | 3,553 | 533 | (20,342 | ) | |||||||||||||||||
$ | 11,029 | $ | 219,923 | $ | 7,682 | $ | 14,338 | $ | 2,877 | $ | (47,836 | ) | ||||||||||||
Weighted average remaining amortization periods as of September 30, 2015 (in years) | 4.0 | 6.7 | 7.9 | 6.1 | 5.2 | 8.1 |
Acquisition-Related Intangible Assets (amortized in Rental and Other Revenues) | Acquisition-Related Intangible Assets (amortized in Depreciation and Amortization) | Acquisition-Related Below Market Lease Liabilities (amortized in Rental and Other Revenues) | ||||||||||
Amount recorded from acquisition activity | $ | 3,051 | $ | 35,534 | $ | (10,733 | ) | |||||
Weighted average remaining amortization periods as of September 30, 2015 (in years) | 4.9 | 5.5 | 9.7 |
September 30, 2015 | December 31, 2014 | ||||||
Secured indebtedness | $ | 288,623 | $ | 312,868 | |||
Unsecured indebtedness | 2,190,130 | 1,758,521 | |||||
Total mortgages and notes payable | $ | 2,478,753 | $ | 2,071,389 |
7. | Derivative Financial Instruments |
7. | Derivative Financial Instruments - Continued |
September 30, 2015 | December 31, 2014 | ||||||
Derivatives: | |||||||
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities: | |||||||
Interest rate swaps | $ | 5,535 | $ | 2,412 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Derivatives Designated as Cash Flow Hedges: | |||||||||||||||
Amount of unrealized gains/(losses) recognized in AOCL on derivatives (effective portion): | |||||||||||||||
Interest rate swaps | $ | (3,021 | ) | $ | 913 | $ | (5,666 | ) | $ | (3,337 | ) | ||||
Amount of losses reclassified out of AOCL into contractual interest expense (effective portion): | |||||||||||||||
Interest rate swaps | $ | 932 | $ | 952 | $ | 2,781 | $ | 2,824 |
8. | Noncontrolling Interests |
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Beginning noncontrolling interests in the Operating Partnership | $ | 130,048 | $ | 106,480 | |||
Adjustment of noncontrolling interests in the Operating Partnership to fair value | (14,649 | ) | 8,955 | ||||
Conversions of Common Units to Common Stock | (1,206 | ) | (162 | ) | |||
Redemptions of Common Units | — | (93 | ) | ||||
Net income attributable to noncontrolling interests in the Operating Partnership | 2,296 | 2,813 | |||||
Distributions to noncontrolling interests in the Operating Partnership | (3,721 | ) | (3,745 | ) | |||
Total noncontrolling interests in the Operating Partnership | $ | 112,768 | $ | 114,248 |
8. | Noncontrolling Interests - Continued |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income available for common stockholders | $ | 29,749 | $ | 51,708 | $ | 74,220 | $ | 86,541 | |||||||
Increase in additional paid in capital from conversions of Common Units to Common Stock | — | — | 1,206 | 162 | |||||||||||
Change from net income available for common stockholders and transfers from noncontrolling interests | $ | 29,749 | $ | 51,708 | $ | 75,426 | $ | 86,703 |
9. | Disclosure About Fair Value of Financial Instruments |
9. | Disclosure About Fair Value of Financial Instruments - Continued |
Level 1 | Level 2 | Level 3 | ||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets or Liabilities | Significant Observable Inputs | Significant Unobservable Inputs | |||||||||||||
Fair Value at September 30, 2015: | ||||||||||||||||
Assets: | ||||||||||||||||
Mortgages and notes receivable, at fair value (1) | $ | 2,132 | $ | — | $ | 2,132 | $ | — | ||||||||
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets) | 3,008 | 3,008 | — | — | ||||||||||||
Tax increment financing bond (in prepaid expenses and other assets) | 12,634 | — | — | 12,634 | ||||||||||||
Total Assets | $ | 17,774 | $ | 3,008 | $ | 2,132 | $ | 12,634 | ||||||||
Noncontrolling Interests in the Operating Partnership | $ | 112,768 | $ | 112,768 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Mortgages and notes payable, at fair value (1) | $ | 2,520,419 | $ | — | $ | 2,520,419 | $ | — | ||||||||
Interest rate swaps (in accounts payable, accrued expenses and other liabilities) | 5,535 | — | 5,535 | — | ||||||||||||
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities) | 3,008 | 3,008 | — | — | ||||||||||||
Financing obligation, at fair value (1) | 7,283 | — | — | 7,283 | ||||||||||||
Total Liabilities | $ | 2,536,245 | $ | 3,008 | $ | 2,525,954 | $ | 7,283 |
Fair Value at December 31, 2014: | ||||||||||||||||
Assets: | ||||||||||||||||
Mortgages and notes receivable, at fair value (1) | $ | 13,142 | $ | — | $ | 2,247 | $ | 10,895 | ||||||||
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets) | 3,635 | 3,635 | — | — | ||||||||||||
Tax increment financing bond (in prepaid expenses and other assets) | 12,447 | — | — | 12,447 | ||||||||||||
Total Assets | $ | 29,224 | $ | 3,635 | $ | 2,247 | $ | 23,342 | ||||||||
Noncontrolling Interests in the Operating Partnership | $ | 130,048 | $ | 130,048 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Mortgages and notes payable, at fair value (1) | $ | 2,141,334 | $ | — | $ | 2,141,334 | $ | — | ||||||||
Interest rate swaps (in accounts payable, accrued expenses and other liabilities) | 2,412 | — | 2,412 | — | ||||||||||||
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities) | 3,635 | 3,635 | — | — | ||||||||||||
Financing obligation, at fair value (as revised) (1) | 8,623 | — | — | 8,623 | ||||||||||||
Total Liabilities (as revised) | $ | 2,156,004 | $ | 3,635 | $ | 2,143,746 | $ | 8,623 |
9. | Disclosure About Fair Value of Financial Instruments - Continued |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Asset: | |||||||||||||||
Tax Increment Financing Bond: | |||||||||||||||
Beginning balance | $ | 12,641 | $ | 13,673 | $ | 12,447 | $ | 13,403 | |||||||
Unrealized gains/(losses) (in AOCL) | (7 | ) | 23 | 187 | 293 | ||||||||||
Ending balance | $ | 12,634 | $ | 13,696 | $ | 12,634 | $ | 13,696 |
Valuation Technique | Unobservable Input | Rate as of | |||||
September 30, 2015 | December 31, 2014 | ||||||
Asset: | |||||||
Tax increment financing bond | Income approach | Discount rate | 7.7% | 8.4% |
10. | Share-Based Payments |
11. | Accumulated Other Comprehensive Loss |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Tax increment financing bond: | |||||||||||||||
Beginning balance | $ | (251 | ) | $ | (759 | ) | $ | (445 | ) | $ | (1,029 | ) | |||
Unrealized gains/(losses) on tax increment financing bond | (7 | ) | 23 | 187 | 293 | ||||||||||
Ending balance | (258 | ) | (736 | ) | (258 | ) | (736 | ) | |||||||
Cash flow hedges: | |||||||||||||||
Beginning balance | (4,263 | ) | (3,960 | ) | (3,467 | ) | (1,582 | ) | |||||||
Unrealized gains/(losses) on cash flow hedges | (3,021 | ) | 913 | (5,666 | ) | (3,337 | ) | ||||||||
Amortization of cash flow hedges (1) | 932 | 952 | 2,781 | 2,824 | |||||||||||
Ending balance | (6,352 | ) | (2,095 | ) | (6,352 | ) | (2,095 | ) | |||||||
Total accumulated other comprehensive loss | $ | (6,610 | ) | $ | (2,831 | ) | $ | (6,610 | ) | $ | (2,831 | ) |
12. | Real Estate and Other Assets Held For Sale |
September 30, 2015 | December 31, 2014 | ||||||
Assets: | |||||||
Land held for development | $ | 2,606 | $ | 995 | |||
Net real estate assets | 2,606 | 995 | |||||
Prepaid expenses and other assets | 23 | 43 | |||||
Real estate and other assets, net, held for sale | $ | 2,629 | $ | 1,038 |
13. | Earnings Per Share and Per Unit |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Earnings per Common Share - basic: | |||||||||||||||
Numerator: | |||||||||||||||
Income from continuing operations | $ | 31,617 | $ | 54,299 | $ | 79,343 | $ | 92,003 | |||||||
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations | (918 | ) | (1,673 | ) | (2,296 | ) | (2,801 | ) | |||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations | (324 | ) | (291 | ) | (948 | ) | (1,152 | ) | |||||||
Dividends on Preferred Stock | (626 | ) | (627 | ) | (1,879 | ) | (1,881 | ) | |||||||
Income from continuing operations available for common stockholders | 29,749 | 51,708 | 74,220 | 86,169 | |||||||||||
Income from discontinued operations | — | — | — | 384 | |||||||||||
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations | — | — | — | (12 | ) | ||||||||||
Income from discontinued operations available for common stockholders | — | — | — | 372 | |||||||||||
Net income available for common stockholders | $ | 29,749 | $ | 51,708 | $ | 74,220 | $ | 86,541 | |||||||
Denominator: | |||||||||||||||
Denominator for basic earnings per Common Share – weighted average shares | 94,693 | 90,668 | 93,996 | 90,299 | |||||||||||
Earnings per Common Share - basic: | |||||||||||||||
Income from continuing operations available for common stockholders | $ | 0.31 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Income from discontinued operations available for common stockholders | — | — | — | — | |||||||||||
Net income available for common stockholders | $ | 0.31 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Earnings per Common Share - diluted: | |||||||||||||||
Numerator: | |||||||||||||||
Income from continuing operations | $ | 31,617 | $ | 54,299 | $ | 79,343 | $ | 92,003 | |||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations | (324 | ) | (291 | ) | (948 | ) | (1,152 | ) | |||||||
Dividends on Preferred Stock | (626 | ) | (627 | ) | (1,879 | ) | (1,881 | ) | |||||||
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership | 30,667 | 53,381 | 76,516 | 88,970 | |||||||||||
Income from discontinued operations available for common stockholders | — | — | — | 384 | |||||||||||
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership | $ | 30,667 | $ | 53,381 | $ | 76,516 | $ | 89,354 | |||||||
Denominator: | |||||||||||||||
Denominator for basic earnings per Common Share – weighted average shares | 94,693 | 90,668 | 93,996 | 90,299 | |||||||||||
Add: | |||||||||||||||
Stock options using the treasury method | 58 | 118 | 89 | 121 | |||||||||||
Noncontrolling interests Common Units | 2,910 | 2,937 | 2,918 | 2,938 | |||||||||||
Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1) (2) | 97,661 | 93,723 | 97,003 | 93,358 | |||||||||||
Earnings per Common Share - diluted: | |||||||||||||||
Income from continuing operations available for common stockholders | $ | 0.31 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Income from discontinued operations available for common stockholders | — | — | — | — | |||||||||||
Net income available for common stockholders | $ | 0.31 | $ | 0.57 | $ | 0.79 | $ | 0.96 |
13. | Earnings Per Share and Per Unit - Continued |
(1) | There were 0.2 million options outstanding during both the three and nine months ended September 30, 2015 that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive. There were no such options outstanding during both the three and nine months ended September 30, 2014. |
(2) | Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Earnings per Common Unit - basic: | |||||||||||||||
Numerator: | |||||||||||||||
Income from continuing operations | $ | 31,617 | $ | 54,299 | $ | 79,343 | $ | 92,003 | |||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations | (324 | ) | (291 | ) | (948 | ) | (1,152 | ) | |||||||
Distributions on Preferred Units | (626 | ) | (627 | ) | (1,879 | ) | (1,881 | ) | |||||||
Income from continuing operations available for common unitholders | 30,667 | 53,381 | 76,516 | 88,970 | |||||||||||
Income from discontinued operations available for common unitholders | — | — | — | 384 | |||||||||||
Net income available for common unitholders | $ | 30,667 | $ | 53,381 | $ | 76,516 | $ | 89,354 | |||||||
Denominator: | |||||||||||||||
Denominator for basic earnings per Common Unit – weighted average units | 97,194 | 93,196 | 96,505 | 92,828 | |||||||||||
Earnings per Common Unit - basic: | |||||||||||||||
Income from continuing operations available for common unitholders | $ | 0.32 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Income from discontinued operations available for common unitholders | — | — | — | — | |||||||||||
Net income available for common unitholders | $ | 0.32 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Earnings per Common Unit - diluted: | |||||||||||||||
Numerator: | |||||||||||||||
Income from continuing operations | $ | 31,617 | $ | 54,299 | $ | 79,343 | $ | 92,003 | |||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations | (324 | ) | (291 | ) | (948 | ) | (1,152 | ) | |||||||
Distributions on Preferred Units | (626 | ) | (627 | ) | (1,879 | ) | (1,881 | ) | |||||||
Income from continuing operations available for common unitholders | 30,667 | 53,381 | 76,516 | 88,970 | |||||||||||
Income from discontinued operations available for common unitholders | — | — | — | 384 | |||||||||||
Net income available for common unitholders | $ | 30,667 | $ | 53,381 | $ | 76,516 | $ | 89,354 | |||||||
Denominator: | |||||||||||||||
Denominator for basic earnings per Common Unit – weighted average units | 97,194 | 93,196 | 96,505 | 92,828 | |||||||||||
Add: | |||||||||||||||
Stock options using the treasury method | 58 | 118 | 89 | 121 | |||||||||||
Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1) (2) | 97,252 | 93,314 | 96,594 | 92,949 | |||||||||||
Earnings per Common Unit - diluted: | |||||||||||||||
Income from continuing operations available for common unitholders | $ | 0.32 | $ | 0.57 | $ | 0.79 | $ | 0.96 | |||||||
Income from discontinued operations available for common unitholders | — | — | — | — | |||||||||||
Net income available for common unitholders | $ | 0.32 | $ | 0.57 | $ | 0.79 | $ | 0.96 |
(1) | There were 0.2 million options outstanding during both the three and nine months ended September 30, 2015 that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive. There were no such options outstanding during both the three and nine months ended September 30, 2014. |
(2) | Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable. |
14. | Segment Information |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Rental and Other Revenues: | |||||||||||||||
Office: | |||||||||||||||
Atlanta, GA | $ | 25,737 | $ | 24,682 | $ | 76,130 | $ | 71,286 | |||||||
Greensboro, NC | 5,288 | 6,439 | 16,126 | 19,469 | |||||||||||
Greenville, SC | — | 532 | — | 2,140 | |||||||||||
Kansas City, MO | 4,207 | 4,218 | 12,565 | 12,401 | |||||||||||
Memphis, TN | 11,790 | 10,186 | 35,574 | 30,076 | |||||||||||
Nashville, TN | 22,614 | 20,139 | 66,200 | 59,926 | |||||||||||
Orlando, FL | 11,397 | 8,991 | 33,179 | 27,059 | |||||||||||
Pittsburgh, PA | 14,831 | 14,259 | 44,099 | 42,030 | |||||||||||
Raleigh, NC | 27,081 | 21,357 | 76,063 | 65,386 | |||||||||||
Richmond, VA | 10,564 | 11,236 | 31,351 | 34,999 | |||||||||||
Tampa, FL | 17,785 | 17,637 | 54,814 | 51,393 | |||||||||||
Total Office Segment | 151,294 | 139,676 | 446,101 | 416,165 | |||||||||||
Retail: | |||||||||||||||
Kansas City, MO | 9,461 | 9,753 | 27,164 | 28,337 | |||||||||||
Total Retail Segment | 9,461 | 9,753 | 27,164 | 28,337 | |||||||||||
Other | 2,981 | 3,200 | 8,917 | 9,302 | |||||||||||
Total Rental and Other Revenues | $ | 163,736 | $ | 152,629 | $ | 482,182 | $ | 453,804 |
14. | Segment Information - Continued |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net Operating Income: | |||||||||||||||
Office: | |||||||||||||||
Atlanta, GA | $ | 15,970 | $ | 14,808 | $ | 47,000 | $ | 42,826 | |||||||
Greensboro, NC | 3,275 | 4,105 | 10,217 | 12,352 | |||||||||||
Greenville, SC | — | 289 | — | 1,154 | |||||||||||
Kansas City, MO | 2,561 | 2,671 | 8,023 | 7,974 | |||||||||||
Memphis, TN | 7,317 | 6,024 | 22,347 | 17,420 | |||||||||||
Nashville, TN | 15,726 | 13,590 | 46,438 | 40,742 | |||||||||||
Orlando, FL | 6,153 | 5,087 | 18,984 | 15,809 | |||||||||||
Pittsburgh, PA | 8,840 | 8,122 | 25,472 | 23,303 | |||||||||||
Raleigh, NC | 19,018 | 14,611 | 53,647 | 45,969 | |||||||||||
Richmond, VA | 6,909 | 7,165 | 20,721 | 23,106 | |||||||||||
Tampa, FL | 10,615 | 10,304 | 32,855 | 30,370 | |||||||||||
Total Office Segment | 96,384 | 86,776 | 285,704 | 261,025 | |||||||||||
Retail: | |||||||||||||||
Kansas City, MO | 5,439 | 6,157 | 15,502 | 17,186 | |||||||||||
Total Retail Segment | 5,439 | 6,157 | 15,502 | 17,186 | |||||||||||
Other | 2,155 | 2,313 | 6,427 | 6,545 | |||||||||||
Total Net Operating Income | 103,978 | 95,246 | 307,633 | 284,756 | |||||||||||
Reconciliation to income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates: | |||||||||||||||
Depreciation and amortization | (54,652 | ) | (48,287 | ) | (156,200 | ) | (146,895 | ) | |||||||
Impairments of real estate assets | — | — | — | (588 | ) | ||||||||||
General and administrative expenses | (9,182 | ) | (7,526 | ) | (29,511 | ) | (26,973 | ) | |||||||
Interest expense | (21,512 | ) | (22,348 | ) | (64,937 | ) | (64,923 | ) | |||||||
Other income | 1,038 | 728 | 3,255 | 3,555 | |||||||||||
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates | $ | 19,670 | $ | 17,813 | $ | 60,240 | $ | 48,932 |
15. | Commitments and Contingencies |
• | buyers may not be available and pricing may not be adequate with respect to the planned disposition of all or substantially all of our wholly-owned County Club Plaza portfolio in Kansas City (see "Investment Activity"); |
• | comparable sales data on which we based our expectations with respect to the sale price of Country Club Plaza assets may not reflect current market trends; |
• | the financial condition of our customers could deteriorate; |
• | we may not be able to lease or re-lease second generation space, defined as previously occupied space that becomes available for lease, quickly or on as favorable terms as old leases; |
• | we may not be able to lease our newly constructed buildings as quickly or on as favorable terms as originally anticipated; |
• | we may not be able to complete development, acquisition, reinvestment, disposition or joint venture projects as quickly or on as favorable terms as anticipated; |
• | development activity by our competitors in our existing markets could result in an excessive supply relative to customer demand; |
• | our markets may suffer declines in economic growth; |
• | unanticipated increases in interest rates could increase our debt service costs; |
• | unanticipated increases in operating expenses could negatively impact our operating results; |
• | we may not be able to meet our liquidity requirements or obtain capital on favorable terms to fund our working capital needs and growth initiatives or repay or refinance outstanding debt upon maturity; and |
• | the Company could lose key executive officers. |
• | owning high-quality, differentiated office buildings in the BBDs of our core markets; |
• | improving the operating results of our existing properties through concentrated leasing, asset management, cost control and customer service efforts; |
• | developing and acquiring office buildings in BBDs that improve the overall quality of our portfolio and generate attractive returns over the long term for our stockholders; |
• | disposing of properties no longer considered to be core assets primarily due to location, age, quality and overall strategic fit; and |
• | maintaining a conservative and flexible balance sheet with ample liquidity to meet our funding needs and growth prospects. |
New | Renewal | All Office | |||||||||
Leased space (in rentable square feet) | 233,574 | 843,755 | 1,077,329 | ||||||||
Average term (in years - rentable square foot weighted) | 7.4 | 4.2 | 4.9 | ||||||||
Base rents (per rentable square foot) (1) | $ | 25.16 | $ | 24.24 | $ | 24.44 | |||||
Rent concessions (per rentable square foot) (1) | (1.03 | ) | (0.26 | ) | (0.43 | ) | |||||
GAAP rents (per rentable square foot) (1) | $ | 24.13 | $ | 23.98 | $ | 24.01 | |||||
Tenant improvements (per rentable square foot) (1) | $ | 3.62 | $ | 1.39 | $ | 1.87 | |||||
Leasing commissions (per rentable square foot) (1) | $ | 0.89 | $ | 0.60 | $ | 0.66 |
(1) | Weighted average per rentable square foot on an annual basis over the lease term. |
• | cash flow from operating activities; |
• | bank term loans and borrowings under our revolving credit facility; |
• | the issuance of unsecured debt; |
• | the issuance of secured debt; |
• | the issuance of equity securities by the Company or the Operating Partnership; and |
• | the disposition of non-core assets. |
Nine Months Ended September 30, | |||||||||||
2015 | 2014 | Change | |||||||||
Net Cash Provided By Operating Activities | $ | 209,410 | $ | 183,675 | $ | 25,735 | |||||
Net Cash Used In Investing Activities | (564,095 | ) | (159,184 | ) | (404,911 | ) | |||||
Net Cash Provided By/(Used In) Financing Activities | 351,037 | (23,075 | ) | 374,112 | |||||||
Total Cash Flows | $ | (3,648 | ) | $ | 1,416 | $ | (5,064 | ) |
September 30, 2015 | December 31, 2014 | ||||||
(as revised) | |||||||
Mortgages and notes payable, at recorded book value | $ | 2,478,753 | $ | 2,071,389 | |||
Financing obligation | $ | 7,402 | $ | 8,962 | |||
Preferred Stock, at liquidation value | $ | 29,050 | $ | 29,060 | |||
Common Stock outstanding | 95,330 | 92,907 | |||||
Common Units outstanding (not owned by the Company) | 2,910 | 2,937 | |||||
Per share stock price at period end | $ | 38.75 | $ | 44.28 | |||
Market value of Common Stock and Common Units | $ | 3,806,800 | $ | 4,243,972 | |||
Total capitalization | $ | 6,322,005 | $ | 6,353,383 |
• | a building in Tampa, FL encompassing 528,000 rentable square feet for a net purchase price of $113.5 million and an adjacent land parcel for a purchase price of $2.2 million; and |
• | two buildings in Atlanta, GA encompassing 896,000 rentable square feet for a net purchase price of $290.3 million. |
• | a building for a sale price of $15.3 million and recorded a gain on disposition of property of $6.5 million; and |
• | land for a sale price of $1.8 million and recorded a gain on disposition of property of $0.5 million. |
Property | Market | Rentable Square Feet | Anticipated Total Investment (1) | Investment As Of September 30, 2015 (1) | Pre-Leased % | Estimated Completion | Estimated Stabilization | |||||||||||||
($ in thousands) | ||||||||||||||||||||
Laser Spine Institute | Tampa | 176,000 | $ | 56,000 | $ | 40,474 | 100.0 | % | 1Q 16 | 1Q 16 | ||||||||||
Seven Springs West | Nashville | 203,000 | 59,000 | 31,605 | 85.6 | 3Q 16 | 1Q 17 | |||||||||||||
Bridgestone Americas | Nashville | 514,000 | 200,000 | 44,932 | 98.5 | 3Q 17 | 3Q 17 | |||||||||||||
Riverwood 200 | Atlanta | 299,000 | 107,000 | 13,507 | 66.2 | 2Q 17 | 2Q 19 | |||||||||||||
Plaza 211 (2) | Kansas City | 28,000 | 17,000 | 9,587 | — | 4Q 15 | 3Q 16 | |||||||||||||
Enterprise V | Greensboro | 131,200 | 7,600 | 1,952 | — | 2Q 16 | 2Q 17 | |||||||||||||
Seven Springs II (3) | Nashville | 131,000 | 38,100 | 2,642 | — | 2Q 17 | 3Q 18 | |||||||||||||
1,482,200 | $ | 484,700 | $ | 144,699 | 71.1 | % |
(1) | Includes deferred lease commissions which are classified in deferred leasing costs on the Consolidated Balance Sheet. |
(2) | This redevelopment project is part of our wholly-owned Country Club Plaza portfolio in Kansas City, all or substantially all of which has been listed for sale. |
(3) | Recorded on the Consolidated Balance Sheet in land held for development, not development in process. |
• | Net income/(loss) computed in accordance with GAAP; |
• | Less net income attributable to noncontrolling interests in consolidated affiliates; |
• | Plus depreciation and amortization of depreciable operating properties; |
• | Less gains, or plus losses, from sales of depreciable operating properties, plus impairments on depreciable operating properties and excluding items that are classified as extraordinary items under GAAP; |
• | Plus or minus our share of adjustments, including depreciation and amortization of depreciable operating properties, for unconsolidated partnerships and joint ventures (to reflect funds from operations on the same basis); and |
• | Plus or minus adjustments for depreciation and amortization and gains/(losses) on sales of depreciable operating properties, plus impairments on depreciable operating properties, and noncontrolling interests in consolidated affiliates related to discontinued operations. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Funds from operations: | |||||||||||||||
Net income | $ | 31,617 | $ | 54,299 | $ | 79,343 | $ | 92,387 | |||||||
Net (income) attributable to noncontrolling interests in consolidated affiliates | (324 | ) | (291 | ) | (948 | ) | (1,152 | ) | |||||||
Depreciation and amortization of real estate assets | 53,978 | 47,612 | 154,250 | 144,805 | |||||||||||
Impairments of depreciable properties | — | — | — | 588 | |||||||||||
(Gains) on disposition of depreciable properties | (6,521 | ) | (36,279 | ) | (9,147 | ) | (36,279 | ) | |||||||
(Gain) on disposition of investment in unconsolidated affiliate | (4,155 | ) | — | (4,155 | ) | — | |||||||||
Unconsolidated affiliates: | |||||||||||||||
Depreciation and amortization of real estate assets | 835 | 1,085 | 2,412 | 3,039 | |||||||||||
Impairment of investment in unconsolidated affiliate | — | — | — | 1,353 | |||||||||||
(Gains) on disposition of depreciable properties | — | — | (946 | ) | (955 | ) | |||||||||
Discontinued operations: | |||||||||||||||
(Gains) on disposition of depreciable properties | — | — | — | (384 | ) | ||||||||||
Funds from operations | 75,430 | 66,426 | 220,809 | 203,402 | |||||||||||
Dividends on Preferred Stock | (626 | ) | (627 | ) | (1,879 | ) | (1,881 | ) | |||||||
Funds from operations available for common stockholders | $ | 74,804 | $ | 65,799 | $ | 218,930 | $ | 201,521 | |||||||
Funds from operations available for common stockholders per share | $ | 0.77 | $ | 0.70 | $ | 2.26 | $ | 2.16 | |||||||
Weighted average shares outstanding (1) | 97,661 | 93,723 | 97,003 | 93,358 |
(1) | Includes assumed conversion of all potentially dilutive Common Stock equivalents. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates | $ | 19,670 | $ | 17,813 | $ | 60,240 | $ | 48,932 | |||||||
Other income | (1,038 | ) | (728 | ) | (3,255 | ) | (3,555 | ) | |||||||
Interest expense | 21,512 | 22,348 | 64,937 | 64,923 | |||||||||||
General and administrative expenses | 9,182 | 7,526 | 29,511 | 26,973 | |||||||||||
Impairments of real estate assets | — | — | — | 588 | |||||||||||
Depreciation and amortization | 54,652 | 48,287 | 156,200 | 146,895 | |||||||||||
Net operating income from continuing operations | 103,978 | 95,246 | 307,633 | 284,756 | |||||||||||
Less – non same property and other net operating income | (8,379 | ) | (5,052 | ) | (23,392 | ) | (16,312 | ) | |||||||
Total same property net operating income from continuing operations | $ | 95,599 | $ | 90,194 | $ | 284,241 | $ | 268,444 | |||||||
Rental and other revenues | $ | 163,736 | $ | 152,629 | $ | 482,182 | $ | 453,804 | |||||||
Rental property and other expenses | 59,758 | 57,383 | 174,549 | 169,048 | |||||||||||
Total net operating income from continuing operations | 103,978 | 95,246 | 307,633 | 284,756 | |||||||||||
Less – non same property and other net operating income | (8,379 | ) | (5,052 | ) | (23,392 | ) | (16,312 | ) | |||||||
Total same property net operating income from continuing operations | $ | 95,599 | $ | 90,194 | $ | 284,241 | $ | 268,444 | |||||||
Total same property net operating income from continuing operations | $ | 95,599 | $ | 90,194 | $ | 284,241 | $ | 268,444 | |||||||
Less – straight-line rent and lease termination fees | (5,456 | ) | (5,423 | ) | (12,600 | ) | (15,721 | ) | |||||||
Same property cash net operating income from continuing operations | $ | 90,143 | $ | 84,771 | $ | 271,641 | $ | 252,723 |
Total Number of Shares Purchased | Weighted Average Price Paid per Share | ||||||
July 1 to July 31 | — | $ | — | ||||
August 1 to August 31 | — | — | |||||
September 1 to September 30 | 625 | 38.83 | |||||
Total | 625 | $ | 38.83 |
Exhibit Number | Description |
10.1 | Executive Supplemental Employment Agreement, dated as of September 1, 2015 between the Company and Theodore J. Klinck (filed as part of the Company's Current Report on Form 8-K dated September 1, 2015) |
10.2 | Term Loan Agreement, dated as of September 28, 2015, by and among the Company, the Operating Partnership, Bank of America, N.A., as Administrative Agent, and Wells Fargo Bank, National Association and PNC Bank, National Association (filed as part of the Company's Current Report on Form 8-K dated September 28, 2015) |
12.1 | Statement re: Computation of Ratios of the Company |
12.2 | Statement re: Computation of Ratios of the Operating Partnership |
31.1 | Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act for the Company |
31.2 | Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act for the Company |
31.3 | Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act for the Operating Partnership |
31.4 | Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act for the Operating Partnership |
32.1 | Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act for the Company |
32.2 | Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act for the Company |
32.3 | Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act for the Operating Partnership |
32.4 | Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act for the Operating Partnership |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Extension Labels Linkbase |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
Highwoods Properties, Inc. | |
By: | /s/ Mark F. Mulhern |
Mark F. Mulhern | |
Senior Vice President and Chief Financial Officer |
Highwoods Realty Limited Partnership | |
By: | Highwoods Properties, Inc., its sole general partner |
By: | /s/ Mark F. Mulhern |
Mark F. Mulhern | |
Senior Vice President and Chief Financial Officer |
Nine Months Ended September 30, 2015 | ||||
Earnings: | ||||
Income from continuing operations before equity in earnings of unconsolidated affiliates | $ | 74,976 | ||
Fixed charges | 72,456 | |||
Capitalized interest | (4,947 | ) | ||
Distributions of earnings from unconsolidated affiliates | 4,099 | |||
Total earnings | $ | 146,584 | ||
Fixed charges and Preferred Stock dividends: | ||||
Contractual interest expense | $ | 61,783 | ||
Amortization of deferred financing costs | 2,501 | |||
Financing obligation interest expense | 653 | |||
Capitalized interest | 4,947 | |||
Interest component of rental expense | 2,572 | |||
Total fixed charges | 72,456 | |||
Preferred Stock dividends | 1,879 | |||
Total fixed charges and Preferred Stock dividends | $ | 74,335 | ||
Ratio of earnings to fixed charges | 2.02 | |||
Ratio of earnings to combined fixed charges and Preferred Stock dividends | 1.97 |
Nine Months Ended September 30, 2015 | ||||
Earnings: | ||||
Income from continuing operations before equity in earnings of unconsolidated affiliates | $ | 74,976 | ||
Fixed charges | 72,456 | |||
Capitalized interest | (4,947 | ) | ||
Distributions of earnings from unconsolidated affiliates | 4,099 | |||
Total earnings | $ | 146,584 | ||
Fixed charges and Preferred Unit distributions: | ||||
Contractual interest expense | $ | 61,783 | ||
Amortization of deferred financing costs | 2,501 | |||
Financing obligation interest expense | 653 | |||
Capitalized interest | 4,947 | |||
Interest component of rental expense | 2,572 | |||
Total fixed charges | 72,456 | |||
Preferred Unit distributions | 1,879 | |||
Total fixed charges and Preferred Unit distributions | $ | 74,335 | ||
Ratio of earnings to fixed charges | 2.02 | |||
Ratio of earnings to combined fixed charges and Preferred Unit distributions | 1.97 |
1. | I have reviewed this Quarterly Report on Form 10-Q of Highwoods Properties, Inc.; |
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 officers 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 officers 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/ Edward J. Fritsch |
Edward J. Fritsch President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Highwoods Properties, Inc.; |
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 officers 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 officers 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 F. Mulhern |
Mark F. Mulhern Senior Vice President and Chief Financial Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Highwoods 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 officers 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 officers 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/ Edward J. Fritsch |
Edward J. Fritsch President and Chief Executive Officer of the General Partner |
1. | I have reviewed this Quarterly Report on Form 10-Q of Highwoods 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 officers 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 officers 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 F. Mulhern |
Mark F. Mulhern Senior Vice President and Chief Financial Officer of the General Partner |
1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Edward J. Fritsch |
Edward J. Fritsch President and Chief Executive Officer |
October 27, 2015 |
1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Mark F. Mulhern |
Mark F. Mulhern Senior Vice President and Chief Financial Officer |
October 27, 2015 |
1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership. |
/s/ Edward J. Fritsch |
Edward J. Fritsch President and Chief Executive Officer of the General Partner |
October 27, 2015 |
1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership. |
/s/ Mark F. Mulhern |
Mark F. Mulhern Senior Vice President and Chief Financial Officer of the General Partner |
October 27, 2015 |
Mortgages and Notes Receivable (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2015 |
Sep. 30, 2015 |
Sep. 30, 2014 |
Dec. 31, 2014 |
|
Schedule of mortgages and notes receivable [Abstract] | ||||
Mortgages and notes receivable, net | $ 2,132 | $ 13,116 | ||
Repayment of secured acquisition financing | $ 9,301 | $ 16,974 | ||
Mortgages Receivable [Member] | ||||
Schedule of mortgages and notes receivable [Abstract] | ||||
Repayment of secured acquisition financing | $ 9,900 |
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