12 STOCKHOLDERS’ EQUITY

Common Stock

In 1997, the Company’s Board of Directors approved a stock repurchase program under which the Company may repurchase shares of its outstanding common stock and UPREIT Units (“Company Program”). The shares and units may be repurchased through open market or privately negotiated transactions at the discretion of Company management. The Board’s action did not establish a target price or a specific timetable for repurchase. At December 31, 2012 the Company had authorization to repurchase 2,291,160 shares of common stock and UPREIT Units under the Company Program. There were no repurchases in 2012, 2011 or 2010.

In addition, participants in the Company’s stock benefit plans can use common stock of the Company that they already own to pay all or a portion of the exercise price payable to the Company upon the exercise of an option. In such event, the common stock used to pay the exercise price is returned to authorized but unissued status, and is deemed to have been repurchased by the Company, but does not represent repurchases under the Company Program.

At-The-Market Equity Offering Programs

On December 3, 2009, the Company initiated an “At-the-Market” (“ATM”) equity offering program through which it was authorized to sell up to 3.7 million shares of common stock (not to exceed $150,000 of gross proceeds), from time to time in ATM offerings or negotiated transactions. The following are issuances of common stock of this program since inception through the completion of the program on May 11, 2010:

Period	Number of Shares Sold	Gross Proceeds		Net Proceeds		Average Sales Price
Fourth quarter 2009	871,600	$	39,830	$	38,916	$	45.70
First quarter 2010	1,285,700	60,092		58,856		46.74
Second quarter 2010	1,021,400	50,078		49,273		49.03
Total	3,178,700	$	150,000	$	147,045	$	47.19

On September 17, 2010, the Company initiated an At-The-Market (“ATM”) equity offering program through which it was authorized to sell up to 3.6 million shares of common stock from time to time in ATM offerings or negotiated transactions. There were no shares issued from this program during 2010 or during the fourth quarter of 2011. The following summarizes issuances of common stock from this program since inception through the completion of the program on May 11, 2012:

Period	Number of Shares Sold	Gross Proceeds		Net Proceeds		Average Sales Price
First quarter 2011	841,000	$	47,524	$	46,572	$	56.51
Second quarter 2011	1,485,707	90,102		88,299		60.65
Third quarter 2011	877,400	56,542		55,273		64.44
First quarter 2012	188,393	11,156		10,897		59.22
Second quarter 2012	207,500	13,224		12,957		63.73
Total	3,600,000	$	218,548	$	213,998	$	60.71

On May 14, 2012, the Company initiated another ATM equity offering program through which it is authorized to sell up to 4.4 million shares of common stock from time to time in ATM offerings or negotiated transactions. The following summarizes issuances of common stock from this program since inception through December 31, 2012:

Period	Number of Shares Sold	Gross Proceeds		Net Proceeds		Average Sales Price
Second quarter 2012	698,599	$	42,528	$	41,617	$	60.88
Third quarter 2012	1,262,125	80,303		78,682		63.63
Fourth quarter 2012	10,100	628		609		62.18
Total	1,970,824	$	123,459	$	120,908	$	62.64

The Company used the net proceeds from the ATM offerings primarily for general corporate purposes including acquisitions, development and redevelopment of apartment communities.

Public Equity Offering

On September 20, 2011, the Company publicly offered 6,000,000 shares of its common stock at a price of $58.50 per share, for net proceeds of $336,760 after underwriting discounts, commissions and offering expenses. All of the 6,000,000 shares offered were purchased and subsequently delivered on September 23, 2011.

Dividend Reinvestment Plan

The Company has a Dividend Reinvestment Plan (the “DRIP”). The DRIP provides the stockholders of the Company an opportunity to automatically invest their cash dividends in common stock. In addition, eligible participants may make monthly payments or other voluntary cash investments in shares of common stock. The maximum monthly investment without prior Company approval is currently $10. There is no discount offered on the investment. The Company can meet share demand under the DRIP through share repurchases by the transfer agent in the open market on the Company’s behalf or new share issuance.

Dividends

Stockholders are taxed on dividends and must report such dividends as ordinary income, capital gains, or return of capital. The Company has declared and paid a $2.64 distribution per common share (CUSIP 437306103) during its most recent fiscal year. Pursuant to Internal Revenue Code Section 857(b)(3)(C), for the year ended December 31, 2012, the Company designated the taxable composition of the following cash distributions to holders of common shares in the amounts set forth in the tables below:

					Distribution Type
Declaration Dates	Record Dates	Payable Dates	Distributions Per Share		Ordinary Taxable Dividend		Qualified Dividend		Return of Capital		Long- Term Capital Gain		Unrecaptured Sec. 1250 Gain
2/4/2012	2/16/2012	2/28/2012	$	0.66	75.9761	%	0.0000	%	21.7871	%	1.2194	%	1.0174	%
5/1/2012	5/15/2012	5/25/2012	$	0.66	75.9761	%	0.0000	%	21.7871	%	1.2194	%	1.0174	%
8/1/2012	8/14/2012	8/24/2012	$	0.66	75.9761	%	0.0000	%	21.7871	%	1.2194	%	1.0174	%
10/31/2012	11/15/2012	11/27/2012	$	0.66	75.9761	%	0.0000	%	21.7871	%	1.2194	%	1.0174	%

		Totals	$	2.64	75.9761	%	0.0000	%	21.7871	%	1.2194	%	1.0174	%

The taxable composition of cash distributions for each common share for 2011 and 2010 is as follows:

			Distribution Type
Year	Distributions Per Share		Ordinary Taxable Dividend		Qualified Dividend		Return of Capital		Long- Term Capital Gain		Unrecaptured Sec. 1250 Gain
2011	$	2.48	62.85	%	0.00	%	37.15	%	0.00	%	0.00	%
2010	$	2.32	53.73	%	0.00	%	46.27	%	0.00	%	0.00	%

Total Shares and Units Outstanding

At December 31, 2012, 51,508,142 common shares, and 10,455,593 UPREIT Units were outstanding for a total of 61,963,735 common share equivalents.

Earnings Per Share

Basic earnings per share (“EPS”) is computed as net income attributable to common stockholders divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock-based compensation including stock options (using the treasury stock method) and the conversion of any Senior Notes (through December 21, 2011). The exchange of an UPREIT Unit for a share of common stock has no effect on diluted EPS as unitholders and stockholders effectively share equally in the net income of the Operating Partnership. Income from continuing operations and discontinued operations is the same for both the basic and diluted calculation.

The reconciliation of basic and diluted earnings per share for the years ended December 31, 2012, 2011 and 2010, is as follows:

	2012			2011			2010
Numerator:
Income from continuing operations	$	80,942		$	43,786		$	23,935
Less: Income from continuing operations attributable to noncontrolling interest	(14,169		)	(8,997		)	(5,675		)
Income from continuing operations attributable to common stockholders	$	66,773		$	34,789		$	18,260
Discontinued operations	$	82,680		$	3,878		$	2,383
Less: Discontinued operations attributable to noncontrolling interest	(14,151		)	(811		)	(562		)
Discontinued operations attributable to common stockholders	$	68,529		$	3,067		$	1,821
Denominator:

Basic weighted average number of common shares outstanding	49,744,636			41,860,139			36,682,191
Effect of dilutive stock options	566,732			595,708			419,380
Effect of restricted shares	71,268			89,235			68,315
Diluted weighted average number of common shares outstanding	50,382,636			42,545,082			37,169,886
Earnings per common share:

Basic earnings per share:
Income from continuing operations	$	1.34		$	0.83		$	0.50
Discontinued operations	1.38			0.07			0.05
Net income attributable to common stockholders	$	2.72		$	0.90		$	0.55

Diluted earnings per share:
Income from continuing operations	$	1.33		$	0.82		$	0.49
Discontinued operations	1.36			0.07			0.05
Net income attributable to common stockholders	$	2.69		$	0.89		$	0.54

Unexercised stock options to purchase 334,659, 172,810 and 1,702,783 shares of the Company’s common stock were not included in the computations of diluted EPS because the options’ exercise prices were greater than the average market price of the Company’s stock during the years ended December 31, 2012, 2011 and 2010, respectively. In conjunction with the issuance of the Senior Notes, there were 331,257 potential shares issuable under certain circumstances, none of which were considered dilutive as of December 31, 2010.