FORM 10-Q |
ý | QUARTERLY REPORT PURSUANT TO THE SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 52-0782497 | |
(State of Organization) | (IRS Employer Identification No.) | |
1626 East Jefferson Street, Rockville, Maryland | 20852 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large Accelerated Filer | ý | Accelerated Filer | ¨ |
Non-Accelerated Filer | o (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
PART I. FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | |
Consolidated Balance Sheets as of June 30, 2012 (unaudited) and December 31, 2011 | ||
Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended June 30, 2012 and 2011 | ||
Consolidated Statement of Shareholders' Equity (unaudited) for the six months ended June 30, 2012 | ||
Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2012 and 2011 | ||
Notes to Consolidated Financial Statements (unaudited) | ||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | |
Item 4. | Controls and Procedures | |
PART II. OTHER INFORMATION | ||
Item 1. | Legal Proceedings | |
Item 1A. | Risk Factors | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 3. | Defaults Upon Senior Securities | |
Item 4. | Mine Safety Disclosures | |
Item 5. | Other Information | |
Item 6. | Exhibits | |
SIGNATURES |
ITEM 1. | FINANCIAL STATEMENTS |
June 30, | December 31, | ||||||
2012 | 2011 | ||||||
(In thousands, except share data) | |||||||
(Unaudited) | |||||||
ASSETS | |||||||
Real estate, at cost | |||||||
Operating (including $263,631 and $263,570 of consolidated variable interest entities, respectively) | $ | 4,264,527 | $ | 4,232,608 | |||
Construction-in-progress | 211,725 | 193,836 | |||||
4,476,252 | 4,426,444 | ||||||
Less accumulated depreciation and amortization (including $8,497 and $4,991 of consolidated variable interest entities, respectively) | (1,169,278 | ) | (1,127,588 | ) | |||
Net real estate | 3,306,974 | 3,298,856 | |||||
Cash and cash equivalents | 82,774 | 67,806 | |||||
Accounts and notes receivable, net | 76,601 | 75,921 | |||||
Mortgage notes receivable, net | 55,887 | 55,967 | |||||
Investment in real estate partnership | 34,055 | 34,352 | |||||
Prepaid expenses and other assets | 114,302 | 121,492 | |||||
Debt issuance costs, net of accumulated amortization of $10,574 and $9,098, respectively | 10,336 | 11,816 | |||||
TOTAL ASSETS | $ | 3,680,929 | $ | 3,666,210 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Liabilities | |||||||
Mortgages payable (including $206,506 and $207,683 of consolidated variable interest entities, respectively) | $ | 733,997 | $ | 747,523 | |||
Capital lease obligations | 71,703 | 63,093 | |||||
Notes payable | 300,089 | 295,159 | |||||
Senior notes and debentures | 1,004,532 | 1,004,635 | |||||
Accounts payable and accrued expenses | 110,786 | 104,660 | |||||
Dividends payable | 44,588 | 44,229 | |||||
Security deposits payable | 12,745 | 12,221 | |||||
Other liabilities and deferred credits | 54,173 | 68,761 | |||||
Total liabilities | 2,332,613 | 2,340,281 | |||||
Commitments and contingencies (Note 7) | |||||||
Redeemable noncontrolling interests | 81,858 | 85,325 | |||||
Shareholders’ equity | |||||||
Preferred shares, authorized 15,000,000 shares, $.01 par: 5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 399,896 shares issued and outstanding | 9,997 | 9,997 | |||||
Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 64,099,840 and 63,544,150 shares issued and outstanding, respectively | 641 | 636 | |||||
Additional paid-in capital | 1,810,359 | 1,764,940 | |||||
Accumulated dividends in excess of net income | (568,541 | ) | (555,541 | ) | |||
Accumulated other comprehensive loss | (10,375 | ) | (3,940 | ) | |||
Total shareholders’ equity of the Trust | 1,242,081 | 1,216,092 | |||||
Noncontrolling interests | 24,377 | 24,512 | |||||
Total shareholders’ equity | 1,266,458 | 1,240,604 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 3,680,929 | $ | 3,666,210 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
REVENUE | |||||||||||||||
Rental income | $ | 141,796 | $ | 133,000 | $ | 282,457 | $ | 267,438 | |||||||
Other property income | 4,478 | 2,146 | 8,840 | 4,236 | |||||||||||
Mortgage interest income | 1,286 | 1,134 | 2,552 | 2,255 | |||||||||||
Total revenue | 147,560 | 136,280 | 293,849 | 273,929 | |||||||||||
EXPENSES | |||||||||||||||
Rental expenses | 26,906 | 25,133 | 53,016 | 54,535 | |||||||||||
Real estate taxes | 16,537 | 15,547 | 32,594 | 30,954 | |||||||||||
General and administrative | 7,139 | 6,395 | 14,143 | 12,446 | |||||||||||
Depreciation and amortization | 35,199 | 31,871 | 71,770 | 62,287 | |||||||||||
Total operating expenses | 85,781 | 78,946 | 171,523 | 160,222 | |||||||||||
OPERATING INCOME | 61,779 | 57,334 | 122,326 | 113,707 | |||||||||||
Other interest income | 112 | 20 | 319 | 35 | |||||||||||
Interest expense | (28,733 | ) | (23,905 | ) | (57,526 | ) | (48,949 | ) | |||||||
Early extinguishment of debt | — | — | — | 296 | |||||||||||
Income from real estate partnerships | 438 | 444 | 739 | 767 | |||||||||||
INCOME FROM CONTINUING OPERATIONS | 33,596 | 33,893 | 65,858 | 65,856 | |||||||||||
DISCONTINUED OPERATIONS | |||||||||||||||
Discontinued operations - income | — | 509 | — | 930 | |||||||||||
Discontinued operations - gain on deconsolidation of VIE | — | 2,026 | — | 2,026 | |||||||||||
Discontinued operations - gain on sale of real estate | — | 43 | — | 43 | |||||||||||
Results from discontinued operations | — | 2,578 | — | 2,999 | |||||||||||
INCOME BEFORE GAIN ON SALE OF REAL ESTATE | 33,596 | 36,471 | 65,858 | 68,855 | |||||||||||
Gain on sale of real estate in real estate partnership | — | — | 11,860 | — | |||||||||||
NET INCOME | 33,596 | 36,471 | 77,718 | 68,855 | |||||||||||
Net income attributable to noncontrolling interests | (993 | ) | (1,714 | ) | (2,129 | ) | (2,912 | ) | |||||||
NET INCOME ATTRIBUTABLE TO THE TRUST | 32,603 | 34,757 | 75,589 | 65,943 | |||||||||||
Dividends on preferred shares | (135 | ) | (135 | ) | (271 | ) | (271 | ) | |||||||
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS | $ | 32,468 | $ | 34,622 | $ | 75,318 | $ | 65,672 | |||||||
EARNINGS PER COMMON SHARE, BASIC | |||||||||||||||
Continuing operations | $ | 0.51 | $ | 0.51 | $ | 0.99 | $ | 1.01 | |||||||
Discontinued operations | — | 0.04 | — | 0.05 | |||||||||||
Gain on sale of real estate | — | — | 0.19 | — | |||||||||||
$ | 0.51 | $ | 0.55 | $ | 1.18 | $ | 1.06 | ||||||||
Weighted average number of common shares, basic | 63,700 | 62,214 | 63,556 | 61,844 | |||||||||||
EARNINGS PER COMMON SHARE, DILUTED | |||||||||||||||
Continuing operations | $ | 0.51 | $ | 0.51 | $ | 0.99 | $ | 1.00 | |||||||
Discontinued operations | — | 0.04 | — | 0.05 | |||||||||||
Gain on sale of real estate | — | — | 0.19 | — | |||||||||||
$ | 0.51 | $ | 0.55 | $ | 1.18 | $ | 1.05 | ||||||||
Weighted average number of common shares, diluted | 63,880 | 62,391 | 63,732 | 62,012 | |||||||||||
COMPREHENSIVE INCOME (Note 2) | $ | 25,803 | $ | 36,471 | $ | 71,283 | $ | 68,855 | |||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE TRUST (Note 2) | $ | 24,810 | $ | 34,757 | $ | 69,154 | $ | 65,943 |
Shareholders’ Equity of the Trust | |||||||||||||||||||||||||||||||||
Preferred Shares | Common Shares | Additional Paid-in Capital | Accumulated Dividends in Excess of Net Income | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total Shareholders' Equity | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||
(In thousands, except share data) | |||||||||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2011 | 399,896 | $ | 9,997 | 63,544,150 | $ | 636 | $ | 1,764,940 | $ | (555,541 | ) | $ | (3,940 | ) | $ | 24,512 | $ | 1,240,604 | |||||||||||||||
Net income, excluding $1,224 attributable to redeemable noncontrolling interests | — | — | — | — | — | 75,589 | — | 905 | 76,494 | ||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | (6,435 | ) | — | (6,435 | ) | ||||||||||||||||||||||
Dividends declared to common shareholders | — | — | — | — | — | (88,318 | ) | — | — | (88,318 | ) | ||||||||||||||||||||||
Dividends declared to preferred shareholders | — | — | — | — | — | (271 | ) | — | — | (271 | ) | ||||||||||||||||||||||
Distributions declared to noncontrolling interests | — | — | — | — | — | — | — | (1,010 | ) | (1,010 | ) | ||||||||||||||||||||||
Common shares issued | — | — | 382,194 | 4 | 37,052 | — | — | — | 37,056 | ||||||||||||||||||||||||
Exercise of stock options | — | — | 43,870 | — | 2,390 | — | — | — | 2,390 | ||||||||||||||||||||||||
Shares issued under dividend reinvestment plan | — | — | 12,319 | — | 1,129 | — | — | — | 1,129 | ||||||||||||||||||||||||
Share-based compensation expense, net | — | — | 117,307 | 1 | 5,170 | — | — | — | 5,171 | ||||||||||||||||||||||||
Conversion and redemption of OP units | — | — | — | — | (322 | ) | — | — | (135 | ) | (457 | ) | |||||||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | — | — | 105 | 105 | ||||||||||||||||||||||||
BALANCE AT JUNE 30, 2012 | 399,896 | $ | 9,997 | 64,099,840 | $ | 641 | $ | 1,810,359 | $ | (568,541 | ) | $ | (10,375 | ) | $ | 24,377 | $ | 1,266,458 |
Six Months Ended June 30, | |||||||
2012 | 2011 | ||||||
(In thousands) | |||||||
OPERATING ACTIVITIES | |||||||
Net income | $ | 77,718 | $ | 68,855 | |||
Adjustment to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization, including discontinued operations | 71,770 | 62,632 | |||||
Gain on sale of real estate in real estate partnership | (11,860 | ) | — | ||||
Gain on sale of real estate | — | (43 | ) | ||||
Gain on deconsolidation of VIE | — | (2,026 | ) | ||||
Early extinguishment of debt | — | (296 | ) | ||||
Income from real estate partnerships | (739 | ) | (767 | ) | |||
Other, net | 3,138 | 1,675 | |||||
Changes in assets and liabilities, net of effects of acquisitions and dispositions: | |||||||
Decrease (increase) in accounts receivable | 1,627 | (2,921 | ) | ||||
Decrease in prepaid expenses and other assets | 5,170 | 10,579 | |||||
Increase (decrease) in accounts payable and accrued expenses | 2,087 | (16,868 | ) | ||||
Increase (decrease) in security deposits and other liabilities | 984 | (2,122 | ) | ||||
Net cash provided by operating activities | 149,895 | 118,698 | |||||
INVESTING ACTIVITIES | |||||||
Acquisition of real estate | — | (19,196 | ) | ||||
Capital expenditures - development and redevelopment | (47,776 | ) | (35,971 | ) | |||
Capital expenditures - other | (20,290 | ) | (19,031 | ) | |||
Proceeds from sale of real estate | — | 1,497 | |||||
Investment in real estate partnerships | — | (6,947 | ) | ||||
Distribution from real estate partnership in excess of earnings | 248 | 511 | |||||
Leasing costs | (5,581 | ) | (6,335 | ) | |||
Repayment of mortgage and other notes receivable, net | 51 | 8,712 | |||||
Net cash used in investing activities | (73,348 | ) | (76,760 | ) | |||
FINANCING ACTIVITIES | |||||||
Net borrowings under revolving credit facility, net of costs | — | 112,000 | |||||
Purchase and retirement of senior notes/debentures | — | (75,000 | ) | ||||
Issuance of mortgages, capital leases and notes payable, net of costs | 5,399 | — | |||||
Repayment of mortgages, capital leases and notes payable | (13,270 | ) | (86,021 | ) | |||
Issuance of common shares | 40,575 | 96,787 | |||||
Dividends paid to common and preferred shareholders | (88,205 | ) | (83,098 | ) | |||
Distributions to and redemptions of noncontrolling interests | (6,078 | ) | (2,555 | ) | |||
Net cash used in financing activities | (61,579 | ) | (37,887 | ) | |||
Increase in cash and cash equivalents | 14,968 | 4,051 | |||||
Cash and cash equivalents at beginning of year | 67,806 | 15,797 | |||||
Cash and cash equivalents at end of period | $ | 82,774 | $ | 19,848 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(In thousands) | |||||||||||||||
Net income | $ | 33,596 | $ | 36,471 | $ | 77,718 | $ | 68,855 | |||||||
Other comprehensive loss | (7,793 | ) | — | (6,435 | ) | — | |||||||||
Comprehensive income | 25,803 | 36,471 | 71,283 | 68,855 | |||||||||||
Net income attributable to noncontrolling interests | (993 | ) | (1,714 | ) | (2,129 | ) | (2,912 | ) | |||||||
Comprehensive income attributable to the Trust | $ | 24,810 | $ | 34,757 | $ | 69,154 | $ | 65,943 |
Six Months Ended June 30, | |||||||
2012 | 2011 | ||||||
(In thousands) | |||||||
SUPPLEMENTAL DISCLOSURES: | |||||||
Total interest costs incurred | $ | 62,515 | $ | 52,585 | |||
Interest capitalized | (4,989 | ) | (3,636 | ) | |||
Interest expense | $ | 57,526 | $ | 48,949 | |||
Cash paid for interest, net of amounts capitalized | $ | 58,132 | $ | 50,197 | |||
Cash paid for income taxes | $ | 255 | $ | 537 | |||
NON-CASH INVESTING AND FINANCING TRANSACTIONS: | |||||||
Mortgage loan assumed with acquisition | $ | — | $ | 42,938 | |||
Deconsolidation of VIE | $ | — | $ | 18,311 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(In thousands) | |||||||||||||||
OPERATING RESULTS | |||||||||||||||
Revenue | $ | 4,709 | $ | 4,676 | $ | 9,298 | $ | 9,644 | |||||||
Expenses | |||||||||||||||
Other operating expenses | 1,228 | 1,228 | 2,567 | 2,984 | |||||||||||
Depreciation and amortization | 1,375 | 1,290 | 2,751 | 2,568 | |||||||||||
Interest expense | 844 | 848 | 1,689 | 1,696 | |||||||||||
Total expenses | 3,447 | 3,366 | 7,007 | 7,248 | |||||||||||
Net income | $ | 1,262 | $ | 1,310 | $ | 2,291 | $ | 2,396 | |||||||
Our share of net income from real estate partnership | $ | 438 | $ | 444 | $ | 796 | $ | 801 |
June 30, | December 31, | ||||||
2012 | 2011 | ||||||
(In thousands) | |||||||
BALANCE SHEETS | |||||||
Real estate, net | $ | 176,485 | $ | 178,693 | |||
Cash | 4,501 | 3,035 | |||||
Other assets | 5,003 | 6,116 | |||||
Total assets | $ | 185,989 | $ | 187,844 | |||
Mortgages payable | $ | 57,267 | $ | 57,376 | |||
Other liabilities | 4,434 | 5,391 | |||||
Partners’ capital | 124,288 | 125,077 | |||||
Total liabilities and partners’ capital | $ | 185,989 | $ | 187,844 | |||
Our share of unconsolidated debt | $ | 17,180 | $ | 17,213 | |||
Our investment in real estate partnership | $ | 34,055 | $ | 34,352 |
June 30, 2012 | December 31, 2011 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Mortgages and notes payable | $ | 1,034,086 | $ | 1,082,723 | $ | 1,042,682 | $ | 1,099,273 | |||||||
Senior notes and debentures | $ | 1,004,532 | $ | 1,102,285 | $ | 1,004,635 | $ | 1,085,309 |
June 30, 2012 | December 31, 2011 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||
Interest rate swaps | $ | — | $ | 10,375 | $ | — | $ | 10,375 | $ | — | $ | 3,940 | $ | — | $ | 3,940 |
Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | ||||||||||||||
Declared | Paid | Declared | Paid | ||||||||||||
Common shares | $ | 1.380 | $ | 1.380 | $ | 1.340 | $ | 1.340 | |||||||
5.417% Series 1 Cumulative Convertible Preferred shares | $ | 0.677 | $ | 0.677 | $ | 0.677 | $ | 0.677 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(In thousands) | |||||||||||||||
Minimum rents | |||||||||||||||
Retail and commercial | $ | 104,455 | $ | 98,232 | $ | 207,590 | $ | 194,968 | |||||||
Residential (1) | 6,941 | 5,687 | 13,351 | 11,212 | |||||||||||
Cost reimbursement | 26,475 | 25,539 | 53,432 | 54,369 | |||||||||||
Percentage rent | 1,543 | 1,530 | 3,500 | 2,925 | |||||||||||
Other | 2,382 | 2,012 | 4,584 | 3,964 | |||||||||||
Total rental income | $ | 141,796 | $ | 133,000 | $ | 282,457 | $ | 267,438 |
(1) | Residential minimum rents consist of the rental amounts for residential units at Rollingwood Apartments, The Crest at Congressional Plaza Apartments, Santana Row and Bethesda Row. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(In millions) | |||||||||||||||
Straight-line rents | $ | 1.5 | $ | 1.3 | $ | 2.1 | $ | 2.3 | |||||||
Amortization of above market leases | $ | (0.9 | ) | $ | (0.6 | ) | $ | (1.8 | ) | $ | (1.2 | ) | |||
Amortization of below market leases | $ | 1.2 | $ | 1.0 | $ | 2.3 | $ | 1.9 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2011 | 2011 | ||||||
(in millions) | |||||||
Revenue from discontinued operations | $ | 1.0 | $ | 2.0 | |||
Income from discontinued operations | $ | 0.5 | $ | 0.9 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(In thousands) | |||||||||||||||
Share-based compensation incurred | |||||||||||||||
Grants of common shares | $ | 2,216 | $ | 1,651 | $ | 4,890 | $ | 3,586 | |||||||
Grants of options | 123 | 208 | 281 | 462 | |||||||||||
2,339 | 1,859 | 5,171 | 4,048 | ||||||||||||
Capitalized share-based compensation | (223 | ) | (176 | ) | (453 | ) | (358 | ) | |||||||
Share-based compensation expense | $ | 2,116 | $ | 1,683 | $ | 4,718 | $ | 3,690 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
NUMERATOR | |||||||||||||||
Income from continuing operations | $ | 33,596 | $ | 33,893 | $ | 65,858 | $ | 65,856 | |||||||
Less: Preferred share dividends | (135 | ) | (135 | ) | (271 | ) | (271 | ) | |||||||
Less: Income from continuing operations attributable to noncontrolling interests | (993 | ) | (1,504 | ) | (2,129 | ) | (2,692 | ) | |||||||
Less: Earnings allocated to unvested shares | (208 | ) | (125 | ) | (416 | ) | (316 | ) | |||||||
Income from continuing operations available for common shareholders | 32,260 | 32,129 | 63,042 | 62,577 | |||||||||||
Results from discontinued operations attributable to the Trust | — | 2,368 | — | 2,779 | |||||||||||
Gain on sale of real estate in real estate partnership | — | — | 11,860 | — | |||||||||||
Net income available for common shareholders, basic and diluted | $ | 32,260 | $ | 34,497 | $ | 74,902 | $ | 65,356 | |||||||
DENOMINATOR | |||||||||||||||
Weighted average common shares outstanding—basic | 63,700 | 62,214 | 63,556 | 61,844 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Stock options | 180 | 177 | 176 | 168 | |||||||||||
Weighted average common shares outstanding—diluted | 63,880 | 62,391 | 63,732 | 62,012 | |||||||||||
EARNINGS PER COMMON SHARE, BASIC | |||||||||||||||
Continuing operations | $ | 0.51 | $ | 0.51 | $ | 0.99 | $ | 1.01 | |||||||
Discontinued operations | — | 0.04 | — | 0.05 | |||||||||||
Gain on sale of real estate | — | — | 0.19 | — | |||||||||||
$ | 0.51 | $ | 0.55 | $ | 1.18 | $ | 1.06 | ||||||||
EARNINGS PER COMMON SHARE, DILUTED | |||||||||||||||
Continuing operations | $ | 0.51 | $ | 0.51 | $ | 0.99 | $ | 1.00 | |||||||
Discontinued operations | — | 0.04 | — | 0.05 | |||||||||||
Gain on sale of real estate | — | — | 0.19 | — | |||||||||||
$ | 0.51 | $ | 0.55 | $ | 1.18 | $ | 1.05 | ||||||||
Income from continuing operations attributable to the Trust | $ | 32,603 | $ | 32,389 | $ | 63,729 | $ | 63,164 |
• | growth in our portfolio from property development and redevelopments, |
• | growth in our same-center portfolio, and |
• | expansion of our portfolio through property acquisitions. |
Change | ||||||||||||||
2012 | 2011 | Dollars | % | |||||||||||
(Dollar amounts in thousands) | ||||||||||||||
Rental income | $ | 141,796 | $ | 133,000 | $ | 8,796 | 6.6 | % | ||||||
Other property income | 4,478 | 2,146 | 2,332 | 108.7 | % | |||||||||
Mortgage interest income | 1,286 | 1,134 | 152 | 13.4 | % | |||||||||
Total property revenue | 147,560 | 136,280 | 11,280 | 8.3 | % | |||||||||
Rental expenses | 26,906 | 25,133 | 1,773 | 7.1 | % | |||||||||
Real estate taxes | 16,537 | 15,547 | 990 | 6.4 | % | |||||||||
Total property expenses | 43,443 | 40,680 | 2,763 | 6.8 | % | |||||||||
Property operating income | 104,117 | 95,600 | 8,517 | 8.9 | % | |||||||||
Other interest income | 112 | 20 | 92 | 460.0 | % | |||||||||
Income from real estate partnerships | 438 | 444 | (6 | ) | (1.4 | )% | ||||||||
Interest expense | (28,733 | ) | (23,905 | ) | (4,828 | ) | 20.2 | % | ||||||
General and administrative expense | (7,139 | ) | (6,395 | ) | (744 | ) | 11.6 | % | ||||||
Depreciation and amortization | (35,199 | ) | (31,871 | ) | (3,328 | ) | 10.4 | % | ||||||
Total other, net | (70,521 | ) | (61,707 | ) | (8,814 | ) | 14.3 | % | ||||||
Income from continuing operations | 33,596 | 33,893 | (297 | ) | (0.9 | )% | ||||||||
Discontinued operations - income | — | 509 | (509 | ) | (100.0 | )% | ||||||||
Discontinued operations - gain on deconsolidation of VIE | — | 2,026 | (2,026 | ) | (100.0 | )% | ||||||||
Discontinued operations - gain on sale of real estate | — | 43 | (43 | ) | (100.0 | )% | ||||||||
Net income | 33,596 | 36,471 | (2,875 | ) | (7.9 | )% | ||||||||
Net income attributable to noncontrolling interests | (993 | ) | (1,714 | ) | 721 | (42.1 | )% | |||||||
Net income attributable to the Trust | $ | 32,603 | $ | 34,757 | $ | (2,154 | ) | (6.2 | )% |
• | an increase of $6.7 million attributable to properties acquired in 2011, |
• | an increase of $1.2 million at same-center properties due primarily to increased occupancy and higher rental rates on new and renewal leases, and |
• | an increase of $0.7 million at redevelopment properties due primarily to increased occupancy at certain properties mainly our new residential building at Santana Row and higher rental rates on new leases partially offset by lower income from Mid-Pike Plaza as the property is prepared for the development of Pike & Rose. |
• | an increase of $0.7 million related to properties acquired in 2011 and |
• | an increase of $0.7 million in repairs and maintenance at same-center and redevelopment properties. |
• | an increase of $3.2 million due to mortgage loans secured by Plaza El Segundo and Montrose Crossing both of which were acquired in 2011, |
• | an increase of $1.7 million due to a higher overall weighted average borrowing rate, and |
• | an increase of $0.6 million due to higher borrowings |
• | an increase of $0.7 million in capitalized interest. |
Change | ||||||||||||||
2012 | 2011 | Dollars | % | |||||||||||
(Dollar amounts in thousands) | ||||||||||||||
Rental income | $ | 282,457 | $ | 267,438 | $ | 15,019 | 5.6 | % | ||||||
Other property income | 8,840 | 4,236 | 4,604 | 108.7 | % | |||||||||
Mortgage interest income | 2,552 | 2,255 | 297 | 13.2 | % | |||||||||
Total property revenue | 293,849 | 273,929 | 19,920 | 7.3 | % | |||||||||
Rental expenses | 53,016 | 54,535 | (1,519 | ) | (2.8 | )% | ||||||||
Real estate taxes | 32,594 | 30,954 | 1,640 | 5.3 | % | |||||||||
Total property expenses | 85,610 | 85,489 | 121 | 0.1 | % | |||||||||
Property operating income | 208,239 | 188,440 | 19,799 | 10.5 | % | |||||||||
Other interest income | 319 | 35 | 284 | 811.4 | % | |||||||||
Income from real estate partnerships | 739 | 767 | (28 | ) | (3.7 | )% | ||||||||
Interest expense | (57,526 | ) | (48,949 | ) | (8,577 | ) | 17.5 | % | ||||||
Early extinguishment of debt | — | 296 | (296 | ) | (100.0 | )% | ||||||||
General and administrative expense | (14,143 | ) | (12,446 | ) | (1,697 | ) | 13.6 | % | ||||||
Depreciation and amortization | (71,770 | ) | (62,287 | ) | (9,483 | ) | 15.2 | % | ||||||
Total other, net | (142,381 | ) | (122,584 | ) | (19,797 | ) | 16.1 | % | ||||||
Income from continuing operations | 65,858 | 65,856 | 2 | — | % | |||||||||
Discontinued operations - income | — | 930 | (930 | ) | (100.0 | )% | ||||||||
Discontinued operations - gain on deconsolidation of VIE | — | 2,026 | (2,026 | ) | (100.0 | )% | ||||||||
Discontinued operations - gain on sale of real estate | — | 43 | (43 | ) | (100.0 | )% | ||||||||
Gain on sale of real estate in real estate partnership | 11,860 | — | 11,860 | 100.0 | % | |||||||||
Net income | 77,718 | 68,855 | 8,863 | 12.9 | % | |||||||||
Net income attributable to noncontrolling interests | (2,129 | ) | (2,912 | ) | 783 | (26.9 | )% | |||||||
Net income attributable to the Trust | $ | 75,589 | $ | 65,943 | $ | 9,646 | 14.6 | % |
• | an increase of $13.8 million attributable to properties acquired in 2011, and |
• | an increase of $1.5 million at redevelopment properties due primarily to increased occupancy at certain |
• | a decrease of $0.9 million at same-center properties due primarily to lower recovery income as a result of lower recoverable expenses (primarily snow removal costs) partially offset by increased occupancy and higher rental rates on new and renewal leases. |
• | a decrease of $3.5 million in repairs and maintenance at same-center properties primarily due to lower snow removal costs |
• | an increase of $1.4 million related to properties acquired in 2011, and |
• | an increase of $0.6 million in other operating costs due primarily to demolition costs. |
• | an increase of $6.5 million due to mortgage loans secured by Plaza El Segundo and Montrose Crossing both of which were acquired in 2011, |
• | an increase of $2.6 million due to a higher overall weighted average borrowing rate, and |
• | an increase of $0.8 million due to higher borrowings |
• | an increase of $1.4 million in capitalized interest. |
• | restrictions in our debt instruments or preferred shares may limit us from incurring debt or issuing equity at all, or on acceptable terms under then-prevailing market conditions; and |
• | we may be unable to service additional or replacement debt due to increases in interest rates or a decline in our operating performance. |
Three Months Ended June 30, | |||||||
2012 | 2011 | ||||||
(In thousands) | |||||||
Cash provided by operating activities | $ | 149,895 | $ | 118,698 | |||
Cash used in investing activities | (73,348 | ) | (76,760 | ) | |||
Cash used in financing activities | (61,579 | ) | (37,887 | ) | |||
Increase in cash and cash equivalents | 14,968 | 4,051 | |||||
Cash and cash equivalents, beginning of year | 67,806 | 15,797 | |||||
Cash and cash equivalents, end of period | $ | 82,774 | $ | 19,848 |
• | $19.2 million decrease in acquisitions of real estate due to the January 2011 Tower Shops acquisition and no acquisitions in 2012, and |
• | $6.9 million in contributions to the Newbury Street Partnership in 2011, |
• | $13.1 million increase in capital investments in 2012, and |
• | $8.7 million payment received in June 2011 related to the refinancing of a mortgage loan receivable. |
• | $112.0 million decrease in net borrowings on our revolving credit facility, |
• | $56.2 million decrease in net proceeds from the issuance of common shares due primarily to the sale of 1.1 million shares under our ATM equity program in the six months ended June 30, 2011 compared to 0.4 million in the six months ended June 30, 2012, and |
• | $5.1 million increase in dividends paid to shareholders due to an increase in the dividend rate and increased number of shares outstanding. |
• | $75.0 million repayment of 4.50% senior notes in February 2011, |
• | $72.8 million decrease in repayment of mortgages, capital leases and notes payable due to the payoff of three mortgages totaling $78.4 million in 2011 compared to one mortgage of $6.9 million in 2012, and |
• | $5.4 million issuance of notes payable in June 2012. |
Description of Debt | Original Debt Issued | Principal Balance as of June 30, 2012 | Stated Interest Rate as of June 30, 2012 | Maturity Date | |||||||
(Dollars in thousands) | |||||||||||
Mortgages payable (1) | |||||||||||
Secured fixed rate | |||||||||||
Bethesda Row | Acquired | $ | 19,993 | 5.37 | % | January 1, 2013 | |||||
Bethesda Row | Acquired | 3,939 | 5.05 | % | February 1, 2013 | ||||||
White Marsh Plaza (2) | Acquired | 9,129 | 6.04 | % | April 1, 2013 | ||||||
Crow Canyon | Acquired | 19,721 | 5.40 | % | August 11, 2013 | ||||||
Idylwood Plaza | 16,910 | 16,134 | 7.50 | % | June 5, 2014 | ||||||
Leesburg Plaza | 29,423 | 28,074 | 7.50 | % | June 5, 2014 | ||||||
Loehmann’s Plaza | 38,047 | 36,303 | 7.50 | % | June 5, 2014 | ||||||
Pentagon Row | 54,619 | 52,114 | 7.50 | % | June 5, 2014 | ||||||
Melville Mall (3) | Acquired | 21,936 | 5.25 | % | September 1, 2014 | ||||||
THE AVENUE at White Marsh | Acquired | 55,978 | 5.46 | % | January 1, 2015 | ||||||
Barracks Road | 44,300 | 38,542 | 7.95 | % | November 1, 2015 | ||||||
Hauppauge | 16,700 | 14,529 | 7.95 | % | November 1, 2015 | ||||||
Lawrence Park | 31,400 | 27,319 | 7.95 | % | November 1, 2015 | ||||||
Wildwood | 27,600 | 24,013 | 7.95 | % | November 1, 2015 | ||||||
Wynnewood | 32,000 | 27,841 | 7.95 | % | November 1, 2015 | ||||||
Brick Plaza | 33,000 | 28,401 | 7.42 | % | November 1, 2015 | ||||||
Plaza El Segundo | Acquired | 175,000 | 6.33 | % | August 5, 2017 | ||||||
Rollingwood Apartments | 24,050 | 23,066 | 5.54 | % | May 1, 2019 | ||||||
Shoppers’ World | Acquired | 5,366 | 5.91 | % | January 31, 2021 | ||||||
Montrose Crossing | 80,000 | 79,440 | 4.20 | % | January 10, 2022 | ||||||
Mount Vernon (4) | 13,250 | 10,355 | 5.66 | % | April 15, 2028 | ||||||
Chelsea | Acquired | 7,541 | 5.36 | % | January 15, 2031 | ||||||
Subtotal | 724,734 | ||||||||||
Net unamortized premium | 9,263 | ||||||||||
Total mortgages payable | 733,997 | ||||||||||
Notes payable | |||||||||||
Unsecured fixed rate | |||||||||||
Various (5) | 18,574 | 15,689 | 5.58 | % | Various through 2027 | ||||||
Term loan (6) | 275,000 | 275,000 | LIBOR + 1.45% | November 21, 2018 | |||||||
Unsecured variable rate | |||||||||||
Revolving credit facility (7) | 400,000 | — | LIBOR + 1.15% | July 6, 2015 | |||||||
Escondido (municipal bonds) (8) | 9,400 | 9,400 | 0.20 | % | October 1, 2016 | ||||||
Total notes payable | 300,089 | ||||||||||
Senior notes and debentures | |||||||||||
Unsecured fixed rate | |||||||||||
6.00% notes (9) | 175,000 | 175,000 | 6.00 | % | July 15, 2012 | ||||||
5.40% notes | 135,000 | 135,000 | 5.40 | % | December 1, 2013 | ||||||
5.95% notes | 150,000 | 150,000 | 5.95 | % | August 15, 2014 | ||||||
5.65% notes | 125,000 | 125,000 | 5.65 | % | June 1, 2016 | ||||||
6.20% notes | 200,000 | 200,000 | 6.20 | % | January 15, 2017 | ||||||
5.90% notes | 150,000 | 150,000 | 5.90 | % | April 1, 2020 | ||||||
7.48% debentures | 50,000 | 29,200 | 7.48 | % | August 15, 2026 | ||||||
6.82% medium term notes | 40,000 | 40,000 | 6.82 | % | August 1, 2027 | ||||||
Subtotal | 1,004,200 | ||||||||||
Net unamortized premium | 332 | ||||||||||
Total senior notes and debentures | 1,004,532 | ||||||||||
Capital lease obligations | |||||||||||
Various | 71,703 | Various | Various through 2106 | ||||||||
Total debt and capital lease obligations | $ | 2,110,321 |
1) | Mortgages payable do not include our 30% share ($17.2 million) of the $57.3 million debt of the partnership with a discretionary fund created and advised by ING Clarion Partners. |
2) | The interest rate of 6.04% represents the weighted average interest rate for two mortgage loans secured by this property. The loan balance represents an interest only loan of $4.4 million at a stated rate of 6.18% and the remaining balance at a stated rate of 5.96%. |
3) | We acquired control of Melville Mall through a 20-year master lease and secondary financing. Because we control the activities that most significantly impact this property and retain substantially all of the economic benefit and risk associated with it, this property is consolidated and the mortgage loan is reflected on the balance sheet, though it is not our legal obligation. |
4) | The lender has the option to call the loan on April 15, 2013 or any time thereafter, however, we can prepay the loan at any time after October 14, 2012 at par. |
5) | The interest rate of 5.58% represents the weighted average interest rate for ten unsecured fixed rate notes payable. These notes mature from November 1, 2012 to June 27, 2027. |
6) | We entered into two interest rate swap agreements that effectively fix the rate on the term loan at 3.17%. |
7) | No amount was drawn under our revolving credit facility during the six months ended June 30, 2012. |
8) | The bonds require monthly interest only payments through maturity. The bonds bear interest at a variable rate determined weekly, which would enable the bonds to be remarketed at 100% of their principal amount. The Escondido Promenade property is not encumbered by a lien. |
9) | These notes were repaid on their maturity date. |
Unsecured | Secured | Capital Lease | Total | |||||||||||||
(In thousands) | ||||||||||||||||
2012 | $ | 185,173 | $ | 5,755 | $ | 13 | $ | 190,941 | ||||||||
2013 | 135,215 | 73,521 | (1) | 22 | 208,758 | |||||||||||
2014 | 150,203 | 157,838 | 25 | 308,066 | ||||||||||||
2015 | 223 | (2) | 204,936 | 27 | 205,186 | |||||||||||
2016 | 134,646 | 2,521 | 30 | 137,197 | ||||||||||||
Thereafter | 698,829 | 280,163 | 71,586 | 1,050,578 | ||||||||||||
$ | 1,304,289 | $ | 724,734 | $ | 71,703 | $ | 2,100,726 | (3) |
1) | Includes the repayment of the outstanding mortgage payable balance on Mount Vernon. The lender has the option to call the loan on April 15, 2013 or any time thereafter, however, we can prepay the loan at any time after October 14, 2012 at par. |
2) | Our $400.0 million revolving credit facility matures on July 6, 2015, subject to a one-year extension at our option. As of June 30, 2012, there was $0 drawn under this credit facility. |
3) | The total debt maturities differs from the total reported on the consolidated balance sheet due to the unamortized net premium or discount on certain mortgage loans, senior notes and debentures as of June 30, 2012. |
• | does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income); |
• | should not be considered an alternative to net income as an indication of our performance; and |
• | is not necessarily indicative of cash flow as a measure of liquidity or ability to fund cash needs, including the payment of dividends. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Net income | $ | 33,596 | $ | 36,471 | $ | 77,718 | $ | 68,855 | |||||||
Net income attributable to noncontrolling interests | (993 | ) | (1,714 | ) | (2,129 | ) | (2,912 | ) | |||||||
Gain on sale of real estate | — | (43 | ) | — | (43 | ) | |||||||||
Gain on sale of real estate in real estate partnership | — | — | (11,860 | ) | — | ||||||||||
Gain on deconsolidation of VIE | — | (2,026 | ) | — | (2,026 | ) | |||||||||
Depreciation and amortization of real estate assets | 31,357 | 28,463 | 63,772 | 56,052 | |||||||||||
Amortization of initial direct costs of leases | 2,670 | 2,813 | 5,606 | 5,053 | |||||||||||
Depreciation of joint venture real estate assets | 375 | 431 | 756 | 858 | |||||||||||
Funds from operations | 67,005 | 64,395 | 133,863 | 125,837 | |||||||||||
Dividends on preferred shares | (135 | ) | (135 | ) | (271 | ) | (271 | ) | |||||||
Income attributable to operating partnership units | 224 | 241 | 471 | 484 | |||||||||||
Income attributable to unvested shares | (316 | ) | (228 | ) | (631 | ) | (508 | ) | |||||||
Funds from operations available for common shareholders | $ | 66,778 | $ | 64,273 | $ | 133,432 | $ | 125,542 | |||||||
Weighted average number of common shares, diluted (1) | 64,204 | 62,752 | 64,074 | 62,373 | |||||||||||
Funds from operations available for common shareholders, per diluted share | $ | 1.04 | $ | 1.02 | $ | 2.08 | $ | 2.01 |
(1) | The weighted average common shares used to compute FFO per diluted common share includes operating partnership units that were excluded from the computation of diluted EPS. Conversion of these operating partnership units is dilutive in the computation of FFO per diluted common share but is anti-dilutive for the computation of diluted EPS for the periods presented. |
• | risks that our tenants will not pay rent, may vacate early or may file for bankruptcy or that we may be unable to renew leases or re-let space at favorable rents as leases expire; |
• | risks that we may not be able to proceed with or obtain necessary approvals for any redevelopment or renovation project, and that completion of anticipated or ongoing property redevelopment or renovation projects that we do pursue may cost more, take more time to complete or fail to perform as expected; |
• | risk that we are investing a significant amount in ground-up development projects that may be dependent on third parties to deliver critical aspects of certain projects, requires spending a substantial amount upfront in infrastructure, and assumes receipt of public funding which has been committed but |
• | risks normally associated with the real estate industry, including risks that: |
• | occupancy levels at our properties and the amount of rent that we receive from our properties may be lower than expected, |
• | new acquisitions may fail to perform as expected, |
• | competition for acquisitions could result in increased prices for acquisitions, |
• | environmental issues may develop at our properties and result in unanticipated costs, and |
• | because real estate is illiquid, we may not be able to sell properties when appropriate; |
• | risks that our growth will be limited if we cannot obtain additional capital; |
• | risks associated with general economic conditions, including local economic conditions in our geographic markets; |
• | risks of financing, such as our ability to consummate additional financings or obtain replacement financing on terms which are acceptable to us, our ability to meet existing financial covenants and the limitations imposed on our operations by those covenants, and the possibility of increases in interest rates that would result in increased interest expense; and |
• | risks related to our status as a real estate investment trust, commonly referred to as a REIT, for federal income tax purposes, such as the existence of complex tax regulations relating to our status as a REIT, the effect of future changes in REIT requirements as a result of new legislation, and the adverse consequences of the failure to qualify as a REIT. |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
FEDERAL REALTY INVESTMENT TRUST | ||
August 1, 2012 | /s/ Donald C. Wood | |
Donald C. Wood, | ||
President, Chief Executive Officer and Trustee | ||
(Principal Executive Officer) | ||
August 1, 2012 | /s/ Andrew P. Blocher | |
Andrew P. Blocher, | ||
Senior Vice President - | ||
Chief Financial Officer and Treasurer | ||
(Principal Financial and Accounting Officer) |
EXHIBIT INDEX | ||
Exhibit No. | Description | |
3.1 | Declaration of Trust of Federal Realty Investment Trust dated May 5, 1999 as amended by the Articles of Amendment of Declaration of Trust of Federal Realty Investment Trust dated May 6, 2004, as corrected by the Certificate of Correction of Articles of Amendment of Declaration of Trust of Federal Realty Investment Trust dated June 17, 2004, as amended by the Articles of Amendment of Declaration of Trust of Federal Realty Investment Trust dated May 6, 2009 (previously filed as Exhibit 3.1 to the Trust’s Registration Statement on Form S-3 (File No. 333-160009) and incorporated herein by reference) | |
3.2 | Amended and Restated Bylaws of Federal Realty Investment Trust dated February 12, 2003, as amended October 29, 2003, May 5, 2004, February 17, 2006 and May 6, 2009 (previously filed as Exhibit 3.2 to the Trust’s Registration Statement on Form S-3 (File No. 333-160009) and incorporated herein by reference) | |
4.1 | Specimen Common Share certificate (previously filed as Exhibit 4(i) to the Trust’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-07533) and incorporated herein by reference) | |
4.2 | Articles Supplementary relating to the 5.417% Series 1 Cumulative Convertible Preferred Shares of Beneficial Interest (previously filed as Exhibit 4.1 to the Trust’s Current Report on Form 8-K filed on March 13, 2007, (File No. 1-07533) and incorporated herein by reference) | |
4.3 | Indenture dated December 1, 1993 related to the Trust’s 7.48% Debentures due August 15, 2026; and 6.82% Medium Term Notes due August 1, 2027; (previously filed as Exhibit 4(a) to the Trust’s Registration Statement on Form S-3 (File No. 33-51029), and amended on Form S-3 (File No. 33-63687), filed on December 13, 1993 and incorporated herein by reference) | |
4.4 | Indenture dated September 1, 1998 related to the Trust’s 5.65% Notes due 2016; 6.00% Notes due 2012; 6.20% Notes due 2017; 5.40% Notes due 2013; 5.95% Notes due 2014 and the 5.90% Notes due 2020 (previously filed as Exhibit 4(a) to the Trust’s Registration Statement on Form S-3 (File No. 333-63619) filed on September 17, 1998 and incorporated herein by reference) | |
4.5 | Pursuant to Regulation S-K Item 601(b)(4)(iii), the Trust by this filing agrees, upon request, to furnish to the Securities and Exchange Commission a copy of other instruments defining the rights of holders of long-term debt of the Trust | |
10.1 | Amended and Restated 1993 Long-Term Incentive Plan, as amended on October 6, 1997 and further amended on May 6, 1998 (previously filed as Exhibit 10.26 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-07533) and incorporated herein by reference) | |
10.2 | Severance Agreement between the Trust and Donald C. Wood dated February 22, 1999 (previously filed as a portion of Exhibit 10 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 (File No. 1-07533) (the “1999 1Q Form 10-Q”) and incorporated herein by reference) | |
10.3 | Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 22, 1999 (previously filed as a portion of Exhibit 10 to the 1999 1Q Form 10-Q and incorporated herein by reference) | |
10.4 | Amendment to Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 16, 2005 (previously filed as Exhibit 10.12 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2004 (File No. 1-07533) (the “2004 Form 10-K”) and incorporated herein by reference) | |
10.5 | Split Dollar Life Insurance Agreement dated August 12, 1998 between the Trust and Donald C. Wood (previously filed as a portion of Exhibit 10 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-07533) and incorporated herein by reference) | |
10.6 | 2001 Long-Term Incentive Plan (previously filed as Exhibit 99.1 to the Trust’s S-8 Registration Number 333-60364 filed on May 7, 2001 and incorporated herein by reference) | |
10.7 | Health Coverage Continuation Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 16, 2005 (previously filed as Exhibit 10.26 to the 2004 Form 10-K and incorporated herein by reference) | |
10.8 | Severance Agreement between the Trust and Dawn M. Becker dated April 19, 2000 (previously filed as Exhibit 10.26 to the Trust’s 2005 2Q Form 10-Q and incorporated herein by reference) | |
10.9 | Amendment to Severance Agreement between the Trust and Dawn M. Becker dated February 16, 2005 (previously filed as Exhibit 10.27 to the 2004 Form 10-K and incorporated herein by reference) | |
EXHIBIT INDEX | ||
Exhibit No. | Description | |
10.10 | Form of Restricted Share Award Agreement for awards made under the Trust’s 2003 Long-Term Incentive Award Program for shares issued out of 2001 Long-Term Incentive Plan (previously filed as Exhibit 10.28 to the 2004 Form 10-K and incorporated herein by reference) | |
10.11 | Form of Restricted Share Award Agreement for awards made under the Trust’s Annual Incentive Bonus Program for shares issued out of 2001 Long-Term Incentive Plan (previously filed as Exhibit 10.29 to the 2004 Form 10-K and incorporated herein by reference) | |
10.12 | Form of Option Award Agreement for awards made under the Trust’s 2003 Long-Term Incentive Award Program for shares issued out of the 2001 Long-Term Incentive Plan (previously filed as Exhibit 10.32 to the 2005 Form 10-K and incorporated herein by reference) | |
10.13 | Amended and Restated 2001 Long-Term Incentive Plan (previously filed as Exhibit 10.34 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (File No. 1-07533) and incorporated herein by reference) | |
10.14 | Change in Control Agreement between the Trust and Andrew P. Blocher dated February 12, 2007 (previously filed as Exhibit 10.27 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 (File No. 1-07533) and incorporated herein by reference) | |
10.15 | Amendment to Severance Agreement between the Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.26 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-07533) (“the 2008 Form 10-K”) and incorporated herein by reference) | |
10.16 | Second Amendment to Executive Agreement between the Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.27 to the Trust’s 2008 Form 10-K and incorporated herein by reference) | |
10.17 | Amendment to Health Coverage Continuation Agreement between the Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.28 to the Trust’s 2008 Form 10-K and incorporated herein by reference) | |
10.18 | Second Amendment to Severance Agreement between the Trust and Dawn M. Becker dated January 1, 2009 (previously filed as Exhibit 10.30 to the Trust’s 2008 Form 10-K and incorporated herein by reference) | |
10.19 | Amendment to Change in Control Agreement between the Trust and Andrew P. Blocher dated January 1, 2009 (previously filed as Exhibit 10.31 to the Trust’s 2008 Form 10-K and incorporated herein by reference) | |
10.20 | Amendment to Stock Option Agreements between the Trust and Andrew P. Blocher dated February 17, 2009 (previously filed as Exhibit 10.32 to the Trust’s 2008 Form 10-K and incorporated herein by reference) | |
10.21 | Restricted Share Award Agreement between the Trust and Andrew P. Blocher dated February 17, 2009 (previously filed as Exhibit 10.33 to the Trust’s 2008 Form 10-K and incorporated herein by reference) | |
10.22 | Combined Incentive and Non-Qualified Stock Option Agreement between the Trust and Andrew P. Blocher dated February 17, 2009 (previously filed as Exhibit 10.34 to the Trust’s 2008 Form 10-K and incorporated herein by reference) | |
10.23 | Severance Agreement between the Trust and Andrew P. Blocher dated February 17, 2009 (previously filed as Exhibit 10.35 to the Trust’s 2008 Form 10-K and incorporated herein by reference) | |
10.24 | 2010 Performance Incentive Plan (previously filed as Appendix A to the Trust’s Definitive Proxy Statement for the 2010 Annual Meeting of Shareholders (File No. 01-07533) and incorporated herein by reference) | |
10.25 | Amendment to 2010 Performance Incentive Plan (“the 2010 Plan”) (previously filed as Appendix A to the Trust’s Proxy Supplement for the 2010 Annual Meeting of Shareholders (File No. 01-07533) and incorporated herein by reference) | |
10.26 | Restricted Share Award Agreement between the Trust and Donald C. Wood dated October 12, 2010 (previously filed as Exhibit 10.36 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 (File No. 01-07533) and incorporated herein by reference) | |
10.27 | Form of Restricted Share Award Agreement for awards made under the Trust’s Long-Term Incentive Award Program and the Trust’s Annual Incentive Bonus Program and basic awards with annual vesting for shares issued out of the 2010 Plan (previously filed as Exhibit 10.34 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 1-07533) (the “2010 Form 10-K”) and incorporated herein by reference) | |
EXHIBIT INDEX | ||
Exhibit No. | Description | |
10.28 | Form of Restricted Share Award Agreement for long-term vesting and retention awards made under the Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.35 to the Trust’s 2010 Form 10-K (File No. 1-07533) and incorporated herein by reference) | |
10.29 | Form of Restricted Share Award Agreement for front loaded awards made under the Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.36 to the Trust’s 2010 Form 10-K (File No. 1-07533) and incorporated herein by reference) | |
10.30 | Form of Performance Share Award Agreement for shares awarded out of the 2010 Plan (previously filed as Exhibit 10.37 to the Trust’s 2010 Form 10-K (File No. 1-07533) and incorporated herein by reference) | |
10.31 | Form of Option Award Agreement for awards made under the Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.38 to the Trust’s 2010 Form 10-K (File No. 1-07533) and incorporated herein by reference) | |
10.32 | Form of Option Award Agreement for front loaded awards made under the Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.39 to the Trust’s 2010 Form 10-K (File No. 1-07533) and incorporated herein by reference) | |
10.33 | Form of Option Award Agreement for basic options awarded out of the 2010 Plan (previously filed as Exhibit 10.40 to the Trust’s 2010 Form 10-K (File No. 1-07533) and incorporated herein by reference) | |
10.34 | Form of Restricted Share Award Agreement, dated as of February 10, 2011, between the Trust and each of Dawn M. Becker and Andrew P. Blocher (previously filed as Exhibit 10.41 to the Trust’s 2010 Form 10-K (File No. 1-07533) and incorporated herein by reference) | |
10.35 | Credit Agreement dated as of July 7, 2011, by and among the Trust, as Borrower, the financial institutions party thereto and their permitted assignees under Section 12.6., as Lenders, Wells Fargo Bank, National Association, as Administrative Agent, PNC Bank, National Association, as Syndication Agent, Wells Fargo Securities, LLC, as a Lead Arranger and Book Manager, and PNC Capital Markets LLC, as a Lead Arranger and Book Manager (previously filed as Exhibit 10.1 to the Trust’s Current Report on Form 8-K (File No. 1-07533), filed on July 11, 2011 and incorporated herein by reference) | |
10.36 | Credit Agreement dated as of November 22, 2011, by and among the Trust, as Borrower, the financial institutions party thereto and their permitted assignees under Section 12.6., as Lenders, PNC Bank, National Association, as Administrative Agent, Capital One, N.A., as Syndication Agent, PNC Capital Markets, LLC, as a Lead Arranger and Book Manager, and Capital One, N.A., as a Lead Arranger and Book Manager (previously filed as Exhibit 10.1 to the Trust’s Current Report on Form 8-K (File No. 1-07533), filed on November 28, 2011 and incorporated herein by reference) | |
31.1 | Rule 13a-14(a) Certification of Chief Executive Officer (filed herewith) | |
31.2 | Rule 13a-14(a) Certification of Chief Financial Officer (filed herewith) | |
32.1 | Section 1350 Certification of Chief Executive Officer (filed herewith) | |
32.2 | Section 1350 Certification of Chief Financial Officer (filed herewith) | |
101 | The following materials from Federal Realty Investment Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, formatted in XBRL (Extensible Business Reporting Language): (1) the Consolidated Balance Sheets, (2) the Consolidated Statements of Comprehensive Income, (3) the Consolidated Statement of Shareholders’ Equity, (4) the Consolidated Statements of Cash Flows, and (5) Notes to Consolidated Financial Statements that have been detail tagged. |
1) | I have reviewed this quarterly report on Form 10-Q of Federal Realty Investment Trust; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5) | The registrant's other certifying officer 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 trustees (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. |
August 1, 2012 | /s/ Donald C. Wood | |
Donald C. Wood, | ||
President, Chief Executive Officer and Trustee | ||
(Principal Executive Officer) |
1) | I have reviewed this quarterly report on Form 10-Q of Federal Realty Investment Trust; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5) | The registrant's other certifying officer 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 trustees (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. |
August 1, 2012 | /s/ Andrew P. Blocher | |
Andrew P. Blocher, | ||
Senior Vice President - Chief Financial Officer and Treasurer | ||
(Principal Financial and Accounting Officer) |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 1, 2012 | /s/ Donald C. Wood | |
Donald C. Wood, | ||
President, Chief Executive Officer and Trustee | ||
(Principal Executive Officer) |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 1, 2012 | /s/ Andrew P. Blocher | |
Andrew P. Blocher, | ||
Senior Vice President - Chief Financial Officer and Treasurer | ||
(Principal Financial and Accounting Officer) |
Shareholders Equity (Narrative) (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | |||||||
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Jun. 30, 2012
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Jun. 30, 2011
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Jun. 30, 2012
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Jun. 30, 2011
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Dec. 31, 2011
|
Jun. 30, 2012
At The Market Equity Program [Member]
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Jun. 30, 2012
At The Market Equity Program [Member]
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May 08, 2012
At The Market Equity Program [Member]
|
Jun. 30, 2012
Common Stock [Member]
|
Jun. 30, 2012
5.417% Series 1 Cumulative Convertible Preferred [Member]
|
Jun. 30, 2011
5.417% Series 1 Cumulative Convertible Preferred [Member]
|
Jun. 30, 2012
Common Stock [Member]
|
Jun. 30, 2011
Common Stock [Member]
|
|
Preferred Stock, Dividends, Per Share, Cash Paid | $ 0.677 | $ 0.677 | |||||||||||
Preferred Stock, Dividends Per Share, Declared | $ 0.677 | $ 0.677 | |||||||||||
Common Stock, Dividends, Per Share, Declared | $ 1.380 | $ 1.340 | |||||||||||
Common Stock, Dividends, Per Share, Cash Paid | $ 1.380 | $ 1.340 | |||||||||||
Preferred Shares, percentage | 5.417% | 5.417% | 5.417% | 5.417% | 5.417% | ||||||||
Aggregate offering price of common share | $ 300,000,000 | ||||||||||||
Shares issued under equity program | 161,324 | 382,116 | 382,194 | ||||||||||
Weighted average price per common share | $ 101.23 | $ 98.54 | |||||||||||
Net cash proceeds of common stock | 40,575,000 | 96,787,000 | 16,000,000 | 37,000,000 | |||||||||
Commissions related to sales of common shares | $ 200,000 | $ 500,000 |
Real Estate (Significant Acquisitions and Disposition) (Details) (USD $)
In Millions, unless otherwise specified |
Dec. 27, 2011
Montrose Crossing [Member]
|
Dec. 27, 2011
Montrose Crossing [Member]
New Mortgage Debt [Member]
|
Dec. 30, 2011
Plaza El Segundo [Member]
|
---|---|---|---|
Real Estate Investments [Line Items] | |||
Business Acquisition Cost of Acquired Entity Cash Paid and Total Debt Assumed | $ 141.5 | ||
Business Acquisition, Percentage of Voting Interests Acquired | 89.90% | 48.20% | |
Business Acquisition Cost of Acquired Entity Cash Paid and Share of Debt Assumed | 127.2 | ||
Debt Instrument, Fair Value Disclosure | 80.0 | ||
Business Acquisition, Purchase Price Allocation, Amortizable Intangible Assets | 2.9 | 7.5 | |
Business Acquisition Purchase Price Allocation Amortizable Intangible Below Market Lease Liabilities | 3.8 | 2.3 | |
Business Acquisition Purchase Price | 192.7 | ||
Business Acquisition, Cost of Acquired Entity, Cash Paid | 8.5 | ||
Debt Instrument, Face Amount | $ 175.0 |
Shareholders' Equity (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2012
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Dividends Declared and Paid Per Share [Table Text Block] | The following table provides a summary of dividends declared and paid per share:
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Components of Rental Income and Expense (Components Of Rental Expenses) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
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Jun. 30, 2011
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Jun. 30, 2012
|
Jun. 30, 2011
|
|
Component of Operating Other Cost and Expense [Line Items] | ||||
Rental expenses | $ 26,906 | $ 25,133 | $ 53,016 | $ 54,535 |
Fair Value Of Financial Instruments (Summary Of Carrying Amount And Fair Value Of Financial Instruments) (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
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Jun. 30, 2011
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Jun. 30, 2012
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Jun. 30, 2011
|
Dec. 31, 2011
|
Jun. 30, 2012
Carrying Value [Member]
|
Dec. 31, 2011
Carrying Value [Member]
|
Jun. 30, 2012
Fair Value [Member]
|
Dec. 31, 2011
Fair Value [Member]
|
Nov. 22, 2011
Interest Rate Swap [Member]
agreement
|
Jun. 30, 2012
Interest Rate Swap [Member]
Fair Value, Measurements, Recurring [Member]
Level 2 [Member]
|
Dec. 31, 2011
Interest Rate Swap [Member]
Fair Value, Measurements, Recurring [Member]
Level 2 [Member]
|
Jun. 30, 2012
Accumulated Other Comprehensive Income (Loss) [Member]
|
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||||||
Loss on Derivative Instruments, Pretax | $ 1,000,000 | $ 2,000,000 | |||||||||||
Mortgages and notes payable, carrying value | 1,034,086,000 | 1,042,682,000 | |||||||||||
Senior notes and debentures, carrying value | 1,004,532,000 | 1,004,532,000 | 1,004,635,000 | ||||||||||
Mortgages and notes payable, fair value | 1,082,723,000 | 1,099,273,000 | |||||||||||
Senior notes and debentures, fair value | 1,102,285,000 | 1,085,309,000 | |||||||||||
Number of Interest Rate Derivatives Held | 2 | ||||||||||||
Notional Amount of Interest Rate Cash Flow Hedge Derivatives | 275,000,000 | 275,000,000 | |||||||||||
Derivative, Fixed Interest Rate | 1.72% | 1.72% | |||||||||||
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net | 3,900,000 | 3,900,000 | |||||||||||
Interest rate swaps | 10,375,000 | 3,940,000 | |||||||||||
Other Comprehensive Income (Loss) | $ (7,793,000) | $ 0 | $ (6,435,000) | $ 0 | $ (6,435,000) |
Subsequent Events (Details) (USD $)
|
6 Months Ended | 0 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jul. 19, 2012
Subsequent Event [Member]
Issuance of Debt [Member]
|
Jul. 16, 2012
Subsequent Event [Member]
Issuance of Debt [Member]
|
|
Subsequent Event [Line Items] | ||||
Repayments of Senior Debt | $ 0 | $ 75,000,000 | $ 175,000,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | 6.00% | ||
Long-term Debt, Gross | 250,000,000 | |||
Proceeds from Issuance of Senior Long-term Debt | $ 244,700,000 |
Summary Of Significant Accounting Policies
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Jun. 30, 2012
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation Our consolidated financial statements include the accounts of the Trust, its corporate subsidiaries, and all entities in which the Trust has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity (“VIE”). The equity interests of other investors are reflected as noncontrolling interests or redeemable noncontrolling interests. All significant intercompany transactions and balances are eliminated in consolidation. We account for our interests in joint ventures, which we do not control, using the equity method of accounting. Certain 2011 amounts have been reclassified to conform to current period presentation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP,” requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates. Comprehensive Income In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of shareholders’ equity and requires the presentation of components of net income and components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In December 2011, the FASB deferred the requirement to present reclassification adjustments for each component of accumulated other comprehensive income in both net income and other comprehensive income on the face of the financial statements. We adopted the standards effective January 1, 2012 and modified the presentation in our consolidated financial statements accordingly. Other comprehensive loss in our financial statements relates to the change in valuation on our interest rate swap agreements as further discussed in Note 6. The components of comprehensive income are as follows:
Other Recently Adopted Accounting Pronouncements In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” The pronouncement was issued to provide a uniform framework for fair value measurements and related disclosures between U.S. GAAP and International Financial Reporting Standards (“IFRS”). ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. We adopted the standard effective January 1, 2012 and it did not have a significant impact to our consolidated financial statements. Consolidated Statements of Cash Flows—Supplemental Disclosures The following table provides supplemental disclosures related to the Consolidated Statements of Cash Flows:
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