HIGHWOODS PROPERTIES, INC., 10-Q filed on 7/25/2013
Quarterly Report
Document and Entity Information Document
6 Months Ended
Jun. 30, 2013
Jul. 18, 2013
Entity Information [Line Items]
 
 
Entity Registrant Name
HIGHWOODS PROPERTIES INC. 
 
Entity Central Index Key
0000921082 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Jun. 30, 2013 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q2 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
84,483,948 
Entity Well-known Seasoned Issuer
Yes 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Highwoods Realty Limited Partnership [Member]
 
 
Entity Information [Line Items]
 
 
Entity Registrant Name
HIGHWOODS REALTY LIMITED PARTNERSHIP 
 
Entity Central Index Key
0000941713 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Non-accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Jun. 30, 2013 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q2 
 
Amendment Flag
false 
 
Entity Well-known Seasoned Issuer
Yes 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Real estate assets, at cost:
 
 
Land
$ 389,431 
$ 365,762 
Buildings and tenant improvements
3,482,057 
3,253,805 
Development in process
37,559 
21,198 
Land held for development
120,580 
115,416 
Total real estate assets
4,029,627 
3,756,181 
Less-accumulated depreciation
(978,777)
(929,598)
Net real estate assets
3,050,850 
2,826,583 
Real estate and other assets, net, held for sale
47,508 
Cash and cash equivalents
10,122 
13,783 
Restricted cash
15,987 
19,702 
Accounts receivable, net of allowance of $1,465 and $2,848, respectively
25,266 
23,073 
Mortgages and notes receivable, net of allowance of $376 and $182, respectively
25,583 
25,472 
Accrued straight-line rents receivable, net of allowance of $853 and $857, respectively
122,742 
115,030 
Investments in and advances to unconsolidated affiliates
65,272 
66,800 
Deferred financing and leasing costs, net of accumulated amortization of $85,548 and $76,840, respectively
181,802 
168,019 
Prepaid expenses and other assets, net of accumulated amortization of $12,561 and $12,318, respectively
41,959 
44,458 
Total Assets
3,539,583 
3,350,428 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:
 
 
Mortgages and notes payable
1,931,655 
1,859,162 
Accounts payable, accrued expenses and other liabilities
185,087 
172,146 
Financing obligations
28,392 
29,358 
Total Liabilities
2,145,134 
2,060,666 
Commitments and contingencies
   
   
Noncontrolling interests in the Operating Partnership
130,351 
124,869 
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; 29,077 shares issued and outstanding)
29,077 
29,077 
Common Stock, $.01 par value, 200,000,000 authorized shares; 83,968,412 and 80,311,437 shares issued and outstanding, respectively
840 
803 
Additional paid-in capital
2,160,698 
2,040,306 
Distributions in excess of net income available for common stockholders
(927,110)
(897,418)
Accumulated other comprehensive loss
(4,142)
(12,628)
Total Stockholders’ Equity
1,259,363 
1,160,140 
Noncontrolling interests in consolidated affiliates
4,735 
4,753 
Total Equity
1,264,098 
1,164,893 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity
3,539,583 
3,350,428 
Highwoods Realty Limited Partnership [Member]
 
 
Real estate assets, at cost:
 
 
Land
389,431 
365,762 
Buildings and tenant improvements
3,482,057 
3,253,805 
Development in process
37,559 
21,198 
Land held for development
120,580 
115,416 
Total real estate assets
4,029,627 
3,756,181 
Less-accumulated depreciation
(978,777)
(929,598)
Net real estate assets
3,050,850 
2,826,583 
Real estate and other assets, net, held for sale
47,508 
Cash and cash equivalents
10,205 
13,867 
Restricted cash
15,987 
19,702 
Accounts receivable, net of allowance of $1,465 and $2,848, respectively
25,266 
23,073 
Mortgages and notes receivable, net of allowance of $376 and $182, respectively
25,583 
25,472 
Accrued straight-line rents receivable, net of allowance of $853 and $857, respectively
122,742 
115,030 
Investments in and advances to unconsolidated affiliates
64,249 
65,813 
Deferred financing and leasing costs, net of accumulated amortization of $85,548 and $76,840, respectively
181,802 
168,019 
Prepaid expenses and other assets, net of accumulated amortization of $12,561 and $12,318, respectively
41,864 
44,458 
Total Assets
3,538,548 
3,349,525 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:
 
 
Mortgages and notes payable
1,931,655 
1,859,162 
Accounts payable, accrued expenses and other liabilities
185,041 
172,026 
Financing obligations
28,392 
29,358 
Total Liabilities
2,145,088 
2,060,546 
Commitments and contingencies
   
   
Redeemable Operating Partnership Units:
 
 
Common Units, 3,660,545 and 3,733,016 outstanding, respectively
130,351 
124,869 
Series A Preferred Units (liquidation preference $1,000 per unit), 29,077 units issued and outstanding
29,077 
29,077 
Total Redeemable Operating Partnership Units
159,428 
153,946 
Equity:
 
 
General partner Common Units, 872,201 and 836,356 outstanding, respectively
12,332 
11,427 
Limited partner Common Units, 82,687,402 and 79,066,272 outstanding, respectively
1,221,107 
1,131,481 
Accumulated other comprehensive loss
(4,142)
(12,628)
Noncontrolling interests in consolidated affiliates
4,735 
4,753 
Total Equity
1,234,032 
1,135,033 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity
$ 3,538,548 
$ 3,349,525 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 30, 2013
Dec. 31, 2012
Assets:
 
 
Accounts receivable allowance
$ 1,465 
$ 2,848 
Mortgages and notes receivable allowance
376 
182 
Accrued straight-line rents receivable allowance
853 
857 
Deferred financing and leasing costs, accumulated amortization
85,548 
76,840 
Prepaid expenses and other assets, accumulated amortization
12,561 
12,318 
Preferred Stock, Dividend Rate, Percentage
8.625% 
8.625% 
Equity:
 
 
Series A Preferred Stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Series A Preferred Stock, authorized shares (in shares)
50,000,000 
50,000,000 
Series A Preferred Stock, liquidation preference (in dollars per share)
$ 1,000 
$ 1,000 
Series A Preferred Stock, shares issued (in shares)
29,077 
29,077 
Series A Preferred Stock, shares outstanding (in shares)
29,077 
29,077 
Common Stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Common Stock, authorized shares (in shares)
200,000,000 
200,000,000 
Common Stock, shares issued (in shares)
83,968,412 
80,311,437 
Common Stock, shares outstanding (in shares)
83,968,412 
80,311,437 
Highwoods Realty Limited Partnership [Member]
 
 
Assets:
 
 
Accounts receivable allowance
1,465 
2,848 
Mortgages and notes receivable allowance
376 
182 
Accrued straight-line rents receivable allowance
853 
857 
Deferred financing and leasing costs, accumulated amortization
85,548 
76,840 
Prepaid expenses and other assets, accumulated amortization
$ 12,561 
$ 12,318 
Redeemable Operating Partnership Units: [Abstract]
 
 
Redeemable Common Units outstanding (in shares)
3,660,545 
3,733,016 
Series A Preferred Units, liquidation preference (in dollars per share)
$ 1,000 
$ 1,000 
Series A Preferred Units, issued (in shares)
29,077 
29,077 
Series A Preferred Units, outstanding (in shares)
29,077 
29,077 
Common Units: [Abstract]
 
 
General partners' capital account, units outstanding (in shares)
872,201 
836,356 
Limited partners' capital account, units outstanding (in shares)
82,687,402 
79,066,272 
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Rental and other revenues
$ 138,515 
$ 126,728 
$ 274,631 
$ 250,762 
Operating expenses:
 
 
 
 
Rental property and other expenses
49,633 
45,884 
98,372 
90,066 
Depreciation and amortization
42,394 
38,991 
84,208 
75,687 
Impairments of real estate assets
1,066 
1,066 
General and administrative
8,397 
8,900 
18,979 
18,573 
Total operating expenses
101,490 
93,775 
202,625 
184,326 
Interest expense:
 
 
 
 
Contractual
22,398 
23,548 
45,196 
47,399 
Amortization of deferred financing costs
948 
900 
1,897 
1,802 
Financing obligations
(60)
(76)
61 
(152)
Total interest expense
23,286 
24,372 
47,154 
49,049 
Other income:
 
 
 
 
Interest and other income
1,617 
1,737 
3,400 
3,967 
Losses on debt extinguishment
(973)
(164)
(973)
Total other income
1,617 
764 
3,236 
2,994 
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates
15,356 
9,345 
28,088 
20,381 
Losses on disposition of property
(37)
(37)
Gains on for-sale residential condominiums
110 
175 
Equity in earnings of unconsolidated affiliates
913 
1,508 
1,349 
1,346 
Income from continuing operations
16,232 
10,963 
29,400 
21,902 
Discontinued operations:
 
 
 
 
Income from discontinued operations
184 
2,150 
245 
4,409 
Net gains on disposition of discontinued operations
13,163 
1,385 
13,694 
6,519 
Total discontinued operations
13,347 
3,535 
13,939 
10,928 
Net income
29,579 
14,498 
43,339 
32,830 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,243)
(686)
(1,824)
(1,513)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(187)
(223)
(390)
(407)
Dividends on Preferred Stock
(627)
(627)
(1,254)
(1,254)
Net income available for common stockholders
27,522 
12,962 
39,871 
29,656 
Earnings per Common Share – basic:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.18 
$ 0.13 
$ 0.33 
$ 0.26 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.15 
$ 0.04 
$ 0.16 
$ 0.14 
Net income available for common stockholders (in dollars per share)
$ 0.33 
$ 0.17 
$ 0.49 
$ 0.40 
Weighted average Common Shares outstanding - basic (in shares)
82,811 1 2
74,662 1 2
81,925 1 2
73,749 1 2
Earnings per Common Share - diluted:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.18 
$ 0.13 
$ 0.33 
$ 0.26 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.15 
$ 0.04 
$ 0.16 
$ 0.14 
Net income available for common stockholders (in dollars per share)
$ 0.33 
$ 0.17 
$ 0.49 
$ 0.40 
Weighted average Common Shares outstanding - diluted (in shares)
86,631 2
78,521 2
85,752 2
77,601 2
Dividends declared per Common Share (in dollars per share)
$ 0.425 
$ 0.425 
$ 0.850 
$ 0.850 
Net income available for common stockholders:
 
 
 
 
Income from continuing operations available for common stockholders
14,746 
9,596 
26,529 
19,259 
Income from discontinued operations available for common stockholders
12,776 
3,366 
13,342 
10,397 
Net income available for common stockholders
27,522 
12,962 
39,871 
29,656 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Rental and other revenues
138,515 
126,728 
274,631 
250,762 
Operating expenses:
 
 
 
 
Rental property and other expenses
49,611 
45,825 
98,376 
89,945 
Depreciation and amortization
42,394 
38,991 
84,208 
75,687 
Impairments of real estate assets
1,066 
1,066 
General and administrative
8,419 
8,959 
18,975 
18,694 
Total operating expenses
101,490 
93,775 
202,625 
184,326 
Interest expense:
 
 
 
 
Contractual
22,398 
23,548 
45,196 
47,399 
Amortization of deferred financing costs
948 
900 
1,897 
1,802 
Financing obligations
(60)
(76)
61 
(152)
Total interest expense
23,286 
24,372 
47,154 
49,049 
Other income:
 
 
 
 
Interest and other income
1,617 
1,737 
3,400 
3,967 
Losses on debt extinguishment
(973)
(164)
(973)
Total other income
1,617 
764 
3,236 
2,994 
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates
15,356 
9,345 
28,088 
20,381 
Losses on disposition of property
(37)
(37)
Gains on for-sale residential condominiums
110 
175 
Equity in earnings of unconsolidated affiliates
916 
1,511 
1,299 
1,351 
Income from continuing operations
16,235 
10,966 
29,350 
21,907 
Discontinued operations:
 
 
 
 
Income from discontinued operations
184 
2,150 
245 
4,409 
Net gains on disposition of discontinued operations
13,163 
1,385 
13,694 
6,519 
Total discontinued operations
13,347 
3,535 
13,939 
10,928 
Net income
29,582 
14,501 
43,289 
32,835 
Net (income) attributable to noncontrolling interests in consolidated affiliates
(187)
(223)
(390)
(407)
Distributions on Preferred Units
(627)
(627)
(1,254)
(1,254)
Net income available for common unitholders
28,768 
13,651 
41,645 
31,174 
Earnings per Common Unit - basic:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
$ 0.18 
$ 0.13 
$ 0.33 
$ 0.26 
Income from discontinued operations available for common unitholders (in dollars per share)
$ 0.15 
$ 0.05 
$ 0.16 
$ 0.14 
Net income available for common unitholders (in dollars per share)
$ 0.33 
$ 0.18 
$ 0.49 
$ 0.40 
Weighted average Common Units outstanding - basic (in shares)
86,090 1 2 3
77,971 1 3
85,223 1 3
77,063 1 3
Earnings per Common Unit - diluted:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
0.18 
0.13 
0.33 
0.26 
Income from discontinued operations available for common unitholders (in dollars per share)
0.15 
0.04 
0.16 
0.14 
Net income available for common unitholders (in dollars per share)
0.33 
0.17 
0.49 
0.40 
Weighted average Common Units outstanding - diluted (in shares)
86,222 3
78,112 2 3
85,343 3
77,192 3
Distributions declared per Common Unit (in dollars per unit)
$ 0.425 
$ 0.425 
$ 0.850 
$ 0.850 
Net income available for common unitholders:
 
 
 
 
Income from continuing operations available for common unitholders
15,421 
10,116 
27,706 
20,246 
Total discontinued operations
13,347 
3,535 
13,939 
10,928 
Net income available for common unitholders
$ 28,768 
$ 13,651 
$ 41,645 
$ 31,174 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Comprehensive income:
 
 
 
 
Net income
$ 29,579 
$ 14,498 
$ 43,339 
$ 32,830 
Other comprehensive income:
 
 
 
 
Unrealized gains/(losses) on tax increment financing bond
(91)
296 
299 
583 
Unrealized gains/(losses) on cash flow hedges
6,319 
(7,481)
6,599 
(7,087)
Amortization of cash flow hedges
800 1
782 1
1,588 1
1,459 1
Total other comprehensive income/(loss)
7,028 
(6,403)
8,486 
(5,045)
Total comprehensive income
36,607 
8,095 
51,825 
27,785 
Less-comprehensive (income) attributable to noncontrolling interests
(1,430)
(909)
(2,214)
(1,920)
Comprehensive income attributable to common stockholders
35,177 
7,186 
49,611 
25,865 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Comprehensive income:
 
 
 
 
Net income
29,582 
14,501 
43,289 
32,835 
Other comprehensive income:
 
 
 
 
Unrealized gains/(losses) on tax increment financing bond
(91)
296 
299 
583 
Unrealized gains/(losses) on cash flow hedges
6,319 
(7,481)
6,599 
(7,087)
Amortization of cash flow hedges
800 
782 
1,588 
1,459 
Total other comprehensive income/(loss)
7,028 
(6,403)
8,486 
(5,045)
Total comprehensive income
36,610 
8,098 
51,775 
27,790 
Less-comprehensive (income) attributable to noncontrolling interests
(187)
(223)
(390)
(407)
Comprehensive income attributable to common stockholders
$ 36,423 
$ 7,875 
$ 51,385 
$ 27,383 
Consolidated Statements of Equity (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Highwoods Realty Limited Partnership [Member]
Common Stock [Member]
Series A Cumulative Redeemable Preferred Shares [Member]
General Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Limited Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Highwoods Realty Limited Partnership [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Highwoods Realty Limited Partnership [Member]
Distributions in Excess of Net Income Available for Common Stockholders [Member]
Balance at Dec. 31, 2011
$ 986,859 
$ 956,674 
$ 726 
$ 29,077 
$ 9,575 
$ 948,187 
$ 1,803,997 
$ (5,734)
$ (5,734)
$ 4,646 
$ 4,646 
$ (845,853)
Balance (in shares) at Dec. 31, 2011
 
 
72,647,697 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Units, net of tax withholdings
 
91,836 
 
 
918 
90,918 
 
 
 
 
Distributions paid on Common Units
 
(65,597)
 
 
(656)
(64,941)
 
 
 
 
Distributions paid on Preferred Units
 
(1,254)
 
 
(13)
(1,241)
 
 
 
 
Issuances of Common Stock - Shares
 
 
2,794,340 
 
 
 
 
 
 
 
 
 
Issuances of Common Stock, net of tax withholdings
91,836 
 
28 
 
 
91,808 
 
 
Conversions of Common Units to Common Stock - Shares
 
 
18,366 
 
 
 
 
 
 
 
 
 
Conversions of Common Units to Common Stock
631 
 
 
 
631 
 
 
Dividends on Common Stock
(62,787)
 
 
 
 
 
(62,787)
Dividends on Preferred Stock
(1,254)
 
 
 
 
 
(1,254)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(16,501)
 
 
 
(16,501)
 
 
Distributions to noncontrolling interests in consolidated affiliates
(460)
(460)
(460)
(460)
Issuances of restricted stock -shares
 
 
158,885 
 
 
 
 
 
 
 
 
 
Issuances of restricted stock
 
 
 
 
 
Share-based compensation expense, net of forfeitures
4,459 
4,459 
45 
4,414 
4,457 
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner
 
(14,438)
 
 
(144)
(14,294)
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,513)
 
 
 
 
 
(1,513)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(4)
(403)
   
407 
407 
(407)
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
Net income
32,830 
32,835 
328 
32,507 
32,830 
Other comprehensive income/(loss)
(5,045)
(5,045)
(5,045)
(5,045)
Total comprehensive income
27,785 
27,790 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2012
1,029,055 
999,010 
756 
29,077 
10,049 
995,147 
1,884,392 
(10,779)
(10,779)
4,593 
4,593 
(878,984)
Balance (in shares) at Jun. 30, 2012
 
 
75,619,288 
 
 
 
 
 
 
 
 
 
Balance at Mar. 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(686)
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
Net income
14,498 
14,501 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income/(loss)
(6,403)
(6,403)
 
 
 
 
 
 
 
 
 
 
Total comprehensive income
8,095 
8,098 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2012
1,029,055 
999,010 
 
 
 
 
 
 
 
 
 
 
Balance at Dec. 31, 2012
1,164,893 
1,135,033 
803 
29,077 
11,427 
1,131,481 
2,040,306 
(12,628)
(12,628)
4,753 
4,753 
(897,418)
Balance (in shares) at Dec. 31, 2012
80,311,437 
 
80,311,437 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Units, net of tax withholdings
 
122,490 
 
 
1,225 
121,265 
 
 
 
 
Distributions paid on Common Units
 
(72,355)
 
 
(724)
(71,631)
 
 
 
 
Distributions paid on Preferred Units
 
(1,254)
 
 
(13)
(1,241)
 
 
 
 
Issuances of Common Stock - Shares
 
 
3,434,687 
 
 
 
 
 
 
 
 
 
Issuances of Common Stock, net of tax withholdings
122,490 
 
34 
 
 
122,456 
 
 
Conversions of Common Units to Common Stock - Shares
 
 
72,471 
 
 
 
 
 
 
 
 
 
Conversions of Common Units to Common Stock
2,851 
 
 
 
2,851 
 
 
Dividends on Common Stock
(69,563)
 
 
 
   
 
 
(69,563)
Dividends on Preferred Stock
(1,254)
 
 
 
   
 
 
(1,254)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(9,649)
 
 
 
(9,649)
 
 
Distributions to noncontrolling interests in consolidated affiliates
(408)
(408)
(408)
(408)
Issuances of restricted stock -shares
 
 
151,630 
 
 
 
 
 
 
 
 
 
Issuances of restricted stock
 
 
 
 
 
Share-based compensation expense, net of forfeitures - Shares
 
 
(1,813)
 
 
 
 
 
 
 
 
 
Share-based compensation expense, net of forfeitures
4,737 
4,737 
47 
4,690 
4,734 
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner
 
(5,986)
 
 
(59)
(5,927)
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,824)
 
 
 
 
 
(1,824)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(4)
(386)
390 
390 
(390)
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
Net income
43,339 
43,289 
433 
42,856 
43,339 
Other comprehensive income/(loss)
8,486 
8,486 
8,486 
8,486 
Total comprehensive income
51,825 
51,775 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2013
1,264,098 
1,234,032 
840 
29,077 
12,332 
1,221,107 
2,160,698 
(4,142)
(4,142)
4,735 
4,735 
(927,110)
Balance (in shares) at Jun. 30, 2013
83,968,412 
 
83,968,412 
 
 
 
 
 
 
 
 
 
Balance at Mar. 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,243)
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
Net income
29,579 
29,582 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income/(loss)
7,028 
7,028 
 
 
 
 
 
 
 
 
 
 
Total comprehensive income
36,607 
36,610 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2013
$ 1,264,098 
$ 1,234,032 
 
 
 
 
 
 
 
 
 
 
Balance (in shares) at Jun. 30, 2013
83,968,412 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Operating activities:
 
 
Net income
$ 43,339 
$ 32,830 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
84,767 
79,113 
Amortization of lease incentives and acquisition-related intangible assets and liabilities
(198)
180 
Share-based compensation expense
4,737 
4,459 
Allowance for losses on accounts and accrued straight-line rents receivable
380 
538 
Amortization of deferred financing costs
1,897 
1,802 
Amortization of cash flow hedges
1,588 
1,459 
Impairments of real estate assets
1,481 
Losses on debt extinguishment
164 
973 
Net gains on disposition of property
(13,657)
(6,519)
Gains on for-sale residential condominiums
(175)
Equity in earnings of unconsolidated affiliates
(1,349)
(1,346)
Changes in financing obligations
(391)
(584)
Distributions of earnings from unconsolidated affiliates
2,827 
2,225 
Changes in operating assets and liabilities:
 
 
Accounts receivable
2,295 
7,298 
Prepaid expenses and other assets
(2,284)
(3,158)
Accrued straight-line rents receivable
(8,009)
(9,415)
Accounts payable, accrued expenses and other liabilities
(661)
(16,352)
Net cash provided by operating activities
116,926 
93,328 
Investing activities:
 
 
Investments in acquired real estate and related intangible assets, net of cash acquired
(228,461)
Investments in development in process
(11,499)
(1,531)
Investments in tenant improvements and deferred leasing costs
(42,343)
(43,851)
Investments in building improvements
(26,466)
(19,758)
Net proceeds from disposition of real estate assets
60,381 
19,898 
Net proceeds from disposition of for-sale residential condominiums
2,492 
Distributions of capital from unconsolidated affiliates
435 
901 
Investments in and repayments of mortgages and notes receivable
(156)
1,544 
Investments in and advances/repayments to/from unconsolidated affiliates
(429)
(2,750)
Changes in restricted cash and other investing activities
7,853 
4,031 
Net cash used in investing activities
(240,685)
(39,024)
Financing activities:
 
 
Dividends on Common Stock
(69,563)
(62,787)
Dividends on Preferred Stock
(1,254)
(1,254)
Distributions to noncontrolling interests in the Operating Partnership
(3,140)
(3,158)
Distributions to noncontrolling interests in consolidated affiliates
(408)
(460)
Proceeds from the issuance of Common Stock
126,738 
95,289 
Costs paid for the issuance of Common Stock
(1,711)
(1,316)
Repurchase of shares related to tax withholdings
(2,537)
(2,137)
Borrowings on revolving credit facility
346,300 
106,300 
Repayments of revolving credit facility
(233,900)
(392,800)
Borrowings on mortgages and notes payable
225,000 
Repayments of mortgages and notes payable
(39,610)
(19,359)
Payments on financing obligations
(575)
(38)
Additions to deferred financing costs and other financing activities
(242)
(2,245)
Net cash provided by/(used in) financing activities
120,098 
(58,965)
Net decrease in cash and cash equivalents
(3,661)
(4,661)
Cash and cash equivalents at beginning of the period
13,783 
11,188 
Cash and cash equivalents at end of the period
10,122 
6,527 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
40,480 
48,063 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized gains/(losses) on cash flow hedges
6,599 
(7,087)
Conversions of Common Units to Common Stock
2,851 
631 
Changes in accrued capital expenditures
12,618 
(2,448)
Write-off of fully depreciated real estate assets
17,732 
28,629 
Write-off of fully amortized deferred financing and leasing costs
11,363 
8,765 
Unrealized gains on marketable securities of non-qualified deferred compensation plan
312 
216 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
9,649 
16,501 
Unrealized gains/(losses) on tax increment financing bond
299 
583 
Reduction of advances to unconsolidated affiliates related to acquisition activities
26,000 
Highwoods Realty Limited Partnership [Member]
 
 
Operating activities:
 
 
Net income
43,289 
32,835 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
84,767 
79,113 
Amortization of lease incentives and acquisition-related intangible assets and liabilities
(198)
180 
Share-based compensation expense
4,737 
4,459 
Allowance for losses on accounts and accrued straight-line rents receivable
380 
538 
Amortization of deferred financing costs
1,897 
1,802 
Amortization of cash flow hedges
1,588 
1,459 
Impairments of real estate assets
1,481 
Losses on debt extinguishment
164 
973 
Net gains on disposition of property
(13,657)
(6,519)
Gains on for-sale residential condominiums
(175)
Equity in earnings of unconsolidated affiliates
(1,299)
(1,351)
Changes in financing obligations
(391)
(584)
Distributions of earnings from unconsolidated affiliates
2,814 
2,211 
Changes in operating assets and liabilities:
 
 
Accounts receivable
2,295 
7,298 
Prepaid expenses and other assets
(2,189)
(3,077)
Accrued straight-line rents receivable
(8,009)
(9,415)
Accounts payable, accrued expenses and other liabilities
(587)
(16,413)
Net cash provided by operating activities
117,082 
93,334 
Investing activities:
 
 
Investments in acquired real estate and related intangible assets, net of cash acquired
(228,461)
Investments in development in process
(11,499)
(1,531)
Investments in tenant improvements and deferred leasing costs
(42,343)
(43,851)
Investments in building improvements
(26,466)
(19,758)
Net proceeds from disposition of real estate assets
60,381 
19,898 
Net proceeds from disposition of for-sale residential condominiums
2,492 
Distributions of capital from unconsolidated affiliates
435 
901 
Investments in and repayments of mortgages and notes receivable
(156)
1,544 
Investments in and advances/repayments to/from unconsolidated affiliates
(429)
(2,750)
Changes in restricted cash and other investing activities
7,853 
4,031 
Net cash used in investing activities
(240,685)
(39,024)
Financing activities:
 
 
Distributions on Common Units
(72,355)
(65,597)
Distributions on Preferred Units
(1,254)
(1,254)
Distributions to noncontrolling interests in consolidated affiliates
(408)
(460)
Proceeds from the issuance of Common Units
126,738 
95,289 
Costs paid for the issuance of Common Units
(1,711)
(1,316)
Repurchase of units related to tax withholdings
(2,537)
(2,137)
Borrowings on revolving credit facility
346,300 
106,300 
Repayments of revolving credit facility
(233,900)
(392,800)
Borrowings on mortgages and notes payable
225,000 
Repayments of mortgages and notes payable
(39,610)
(19,359)
Payments on financing obligations
(575)
(38)
Additions to deferred financing costs and other financing activities
(747)
(2,458)
Net cash provided by/(used in) financing activities
119,941 
(58,830)
Net decrease in cash and cash equivalents
(3,662)
(4,520)
Cash and cash equivalents at beginning of the period
13,867 
11,151 
Cash and cash equivalents at end of the period
10,205 
6,631 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
40,480 
48,063 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized gains/(losses) on cash flow hedges
6,599 
(7,087)
Changes in accrued capital expenditures
12,618 
(2,448)
Write-off of fully depreciated real estate assets
17,732 
28,629 
Write-off of fully amortized deferred financing and leasing costs
11,363 
8,765 
Unrealized gains on marketable securities of non-qualified deferred compensation plan
312 
216 
Adjustment of Redeemable Common Units to fair value
5,482 
14,225 
Unrealized gains/(losses) on tax increment financing bond
299 
583 
Reduction of advances to unconsolidated affiliates related to acquisition activities
$ 0 
$ 26,000 
Description of Business and Significant Accounting Policies
Description of Business and Significant Accounting Policies
Description of Business and Significant Accounting Policies

Description of Business

Highwoods Properties, Inc. (the “Company”) is a fully-integrated, self-administered and self-managed equity real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. The Company conducts virtually all of its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At June 30, 2013, the Company and/or the Operating Partnership wholly owned: 291 in-service office, industrial and retail properties, comprising 29.6 million square feet; 634 acres of undeveloped land suitable for future development, of which 566 acres are considered core assets; and two office development properties. In addition, we owned interests (50.0% or less) in 30 in-service office properties, a rental residential development property and 11 acres of undeveloped land suitable for future development, which includes a 12.5% interest in a 261,000 square foot office property directly owned by the Company (not included in the Operating Partnership’s Consolidated Financial Statements).

The Company is the sole general partner of the Operating Partnership. At June 30, 2013, the Company owned all of the Preferred Units and 83.6 million, or 95.8%, of the Common Units in the Operating Partnership. Limited partners, including two directors of the Company, own the remaining 3.7 million Common Units. During the six months ended June 30, 2013, the Company redeemed 72,471 Common Units for a like number of shares of Common Stock. As a result of this activity, the percentage of Common Units owned by the Company increased from 95.6% at December 31, 2012 to 95.8% at June 30, 2013.

Common Stock Offerings
 
During the three and six months ended June 30, 2013, the Company issued 1,756,590 and 3,056,381 shares of Common Stock, respectively, under its equity sales agreements at an average gross sales price of $38.32 and $37.31 per share, respectively, and received net proceeds, after sales commissions, of $66.3 million and $112.3 million, respectively.

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Our Consolidated Balance Sheets at December 31, 2012 were retrospectively revised from previously reported amounts to reflect in real estate and other assets, net, held for sale those properties classified as held for sale during the three months ended June 30, 2013. Our Consolidated Statements of Income for the three and six months ended June 30, 2012 were retrospectively revised from previously reported amounts to reflect in discontinued operations the operations for those properties classified as discontinued operations.

The Company's Consolidated Financial Statements include the Operating Partnership, wholly owned subsidiaries and those entities in which the Company has the controlling interest. The Operating Partnership's Consolidated Financial Statements include wholly owned subsidiaries and those entities in which the Operating Partnership has the controlling interest. All intercompany transactions and accounts have been eliminated. At June 30, 2013 and December 31, 2012, we had involvement with, but are not the primary beneficiary in, an entity that we concluded to be a variable interest entity (see Note 3).

The unaudited interim consolidated financial statements and accompanying unaudited consolidated financial information, in the opinion of management, contain all adjustments (including normal recurring accruals) necessary for a fair presentation of our financial position, results of operations and cash flows. We have omitted certain notes and other information from the interim Consolidated Financial Statements presented in this Quarterly Report as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2012 Annual Report on Form 10-K.


1.    Description of Business and Significant Accounting Policies – Continued

Use of Estimates

The preparation of consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates.
Real Estate Assets
Real Estate Assets
Real Estate Assets
 
Acquisitions
 
During the second quarter of 2013, we acquired an office property in Atlanta, GA encompassing 553,000 square feet for a purchase price of $140.1 million.

During the first quarter of 2013, we acquired:

two office properties in Tampa, FL encompassing 372,000 square feet for a purchase price of $52.5 million,

two office properties in Greensboro, NC encompassing 195,000 square feet for a purchase price of $30.8 million, and

five acres of development land in Memphis, TN for a purchase price of $4.8 million.

During the three and six months ended June 30, 2013, we expensed $0.4 million and $0.9 million, respectively, of acquisition costs (included in general and administrative expenses) related to these acquisitions. The assets acquired and liabilities assumed were recorded at fair value as determined by management based on information available at the acquisition date and on current assumptions as to future operations.

Dispositions

During the second quarter of 2013, we sold:

five industrial properties in Atlanta, GA for a sale price of $4.5 million (after $0.1 million in closing credits to buyer for free rent) and recorded a gain on disposition of discontinued operations of less than $0.1 million;

six industrial properties and a land parcel in a single transaction in Atlanta, GA for a sale price of $38.7 million (before $1.8 million in closing credits to buyer for unfunded tenant improvements and after $1.3 million in closing credits to buyer for free rent) and recorded a gain on disposition of discontinued operations of $13.2 million; and

two industrial properties in Atlanta, GA for a sale price of $4.8 million and recorded a loss on disposition of discontinued operations of less than $0.1 million.

During the first quarter of 2013, we sold two office properties in Orlando, FL for a sale price of $14.6 million (before $0.8 million in closing credits to buyer for unfunded tenant improvements) and recorded a loss on disposition of discontinued operations of $0.3 million.

In connection with the disposition of an office property in Jackson, MS in the third quarter of 2012, we had the right to receive additional cash consideration of up to $1.5 million upon the satisfaction of a certain post-closing requirement. The post-closing requirement was satisfied and the cash consideration was received during the first quarter of 2013. Accordingly, we recognized $1.5 million in additional gain on disposition of discontinued operations in the first quarter of 2013.

2.    Real Estate Assets - Continued

Impairments

During the second quarter of 2013, we recorded impairments of real estate assets of $1.1 million on four properties in a single office park in Winston-Salem, NC. These impairments were due to a change in the assumed timing of future dispositions and leasing assumptions, which reduced the future expected cash flows from the properties.

During the first quarter of 2013, we recorded impairments of real estate assets of $0.4 million on two industrial properties in Atlanta, GA and recorded impairments of real estate assets held for sale of $0.7 million on five industrial properties in Atlanta, GA. These properties were subsequently sold in the second quarter of 2013 and are classified as discontinued operations. These impairments were due to a change in the assumed timing of future dispositions and leasing assumptions, which reduced the future expected cash flows from the properties.
Mortgages and Notes Receivable
Mortgages and Notes Receivable
Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

 
June 30,
2013
 
December 31,
2012
Seller financing (first mortgages)
$
16,113

 
$
15,853

Less allowance

 

 
16,113

 
15,853

Mortgage receivable
8,715

 
8,648

Less allowance

 

 
8,715

 
8,648

Promissory notes
1,131

 
1,153

Less allowance
(376
)
 
(182
)
 
755

 
971

Mortgages and notes receivable, net
$
25,583

 
$
25,472



During 2010, we provided seller financing in conjunction with two disposition transactions. The seller financing is evidenced by first mortgages secured by the assignment of rents and the underlying real estate assets.

During 2012, we provided secured acquisition financing to a third party. We also agreed to loan such third party $8.4 million on a secured basis to fund future infrastructure development. As of June 30, 2013, $0.1 million has been funded to the third party for infrastructure development. We concluded this arrangement to be an interest in a variable interest entity. However, since we do not have the power to direct matters that most significantly impact the activities of the entity, we do not qualify as the primary beneficiary. Accordingly, the entity is not consolidated. Our risk of loss with respect to this arrangement is limited to the carrying value of the mortgage receivable and the future infrastructure development funding commitment.

We evaluate the ability to collect our mortgages and notes receivable by monitoring the leasing statistics and/or market fundamentals of these assets. As of June 30, 2013, our mortgages and notes receivable were not in default and there were no other indicators of impairment.


3.    Mortgages and Notes Receivable - Continued

The following table sets forth our notes receivable allowance, which relates only to promissory notes:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2013
 
2012
 
2013
 
2012
Beginning notes receivable allowance
$
437

 
$
122

 
$
182

 
$
61

Recoveries/write-offs/other
(61
)
 
(4
)
 
194

 
57

Total notes receivable allowance
$
376

 
$
118

 
$
376

 
$
118

Investments In and Advances To Affiliates
Investments In and Advances To Affiliates
Investments in and Advances to Affiliates

Unconsolidated Affiliates

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

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

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2013
 
2012
 
2013
 
2012
Income Statements:
 
 
 
 
 
 
 
Rental and other revenues
$
23,935

 
$
26,049

 
$
47,451

 
$
50,869

Expenses:
 
 
 
 
 
 
 
Rental property and other expenses
11,739

 
12,666

 
22,948

 
24,082

Depreciation and amortization
6,227

 
5,919

 
12,373

 
12,484

Impairments of real estate assets

 

 
4,790

 
7,180

Interest expense
4,689

 
5,267

 
9,428

 
11,097

Total expenses
22,655

 
23,852

 
49,539

 
54,843

Income/(loss) before disposition of properties
1,280

 
2,197

 
(2,088
)
 
(3,974
)
Gains on disposition of properties
43

 
6,275

 
67

 
6,275

Net income/(loss)
$
1,323

 
$
8,472

 
$
(2,021
)
 
$
2,301

The Company's share of:
 
 
 
 
 
 
 
Depreciation and amortization
$
2,092

 
$
1,675

 
$
4,107

 
$
3,773

Impairments of real estate assets
$

 
$

 
$
1,020

 
$
1,002

Interest expense
$
1,732

 
$
1,843

 
$
3,484

 
$
3,823

Gains on disposition of properties
$
10

 
$

 
$
431

 
$

Net income
$
571

 
$
1,133

 
$
575

 
$
338

 
 
 
 
 
 
 
 
The Company's share of net income
$
571

 
$
1,133

 
$
575

 
$
338

Adjustments for management and other fees
342

 
375

 
774

 
1,008

Equity in earnings of unconsolidated affiliates
$
913

 
$
1,508

 
$
1,349

 
$
1,346




4.    Investments in and Advances to Affiliates - Continued

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

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2013
 
2012
 
2013
 
2012
Income Statements:
 
 
 
 
 
 
 
Rental and other revenues
$
22,892

 
$
25,057

 
$
45,371

 
$
48,854

Expenses:
 
 
 
 
 
 
 
Rental property and other expenses
11,087

 
12,076

 
21,695

 
22,877

Depreciation and amortization
5,915

 
5,607

 
11,750

 
11,861

Impairments of real estate assets

 

 
4,790

 
7,180

Interest expense
4,532

 
5,103

 
9,110

 
10,766

Total expenses
21,534

 
22,786

 
47,345

 
52,684

Income/(loss) before disposition of properties
1,358

 
2,271

 
(1,974
)
 
(3,830
)
Gains on disposition of properties
43

 
6,275

 
67

 
6,275

Net income/(loss)
$
1,401

 
$
8,546

 
$
(1,907
)
 
$
2,445

The Operating Partnership's share of:
 
 
 
 
 
 
 
Depreciation and amortization
$
2,053

 
$
1,636

 
$
4,029

 
$
3,695

Impairments of real estate assets
$

 
$

 
$
1,020

 
$
1,002

Interest expense
$
1,712

 
$
1,823

 
$
3,444

 
$
3,782

Gains on disposition of properties
$
10

 
$

 
$
431

 
$

Net income
$
582

 
$
1,142

 
$
590

 
$
356

 
 
 
 
 
 
 
 
The Operating Partnership's share of net income
$
582

 
$
1,142

 
$
590

 
$
356

Adjustments for management and other fees
334

 
369

 
709

 
995

Equity in earnings of unconsolidated affiliates
$
916

 
$
1,511

 
$
1,299

 
$
1,351



4.    Investments in and Advances to Affiliates - Continued

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

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

During the first quarter of 2013, DLF I recorded impairments of real estate assets of $4.8 million on an office property in Atlanta, GA and an office property in Charlotte, NC.  We recorded $1.0 million as our share of this impairment charge through equity in earnings of unconsolidated affiliates.  These impairments were due to a change in the assumed timing of future dispositions and leasing assumptions, which reduced the future expected cash flows from the properties.

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

During the first quarter of 2013, DLF II sold an office property to unrelated third parties for a sale price of $10.1 million (after $0.3 million in closing credits to buyer for free rent) and recorded a gain on disposition of property of less than $0.1 million. As our cost basis is different from the basis reflected at the joint venture level, we recorded $0.4 million of gain through equity in earnings of unconsolidated affiliates.
Intangible Assets and Below Market Lease Liabilities
Intangible Assets and Below Market Lease Liabilities
Intangible Assets and Below Market Lease Liabilities
 
The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:
 
 
June 30,
2013
 
December 31,
2012
Assets:
 
 
 
Deferred financing costs
$
21,368

 
$
21,759

Less accumulated amortization
(9,528
)
 
(7,862
)
 
11,840

 
13,897

Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)
245,982

 
223,100

Less accumulated amortization
(76,020
)
 
(68,978
)
 
169,962

 
154,122

Deferred financing and leasing costs, net
$
181,802

 
$
168,019

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
45,415

 
$
37,019

Less accumulated amortization
(5,350
)
 
(3,383
)
 
$
40,065

 
$
33,636


5.    Intangible Assets and Below Market Lease Liabilities - Continued

The following table sets forth amortization of intangible assets and acquisition-related below market lease liabilities:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2013
 
2012
 
2013
 
2012
Amortization of deferred financing costs
$
948

 
$
900

 
$
1,897

 
$
1,802

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
8,123

 
$
7,180

 
$
16,431

 
$
13,505

Amortization of lease incentives (in rental and other revenues)
$
344

 
$
330

 
$
725

 
$
664

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
484

 
$
324

 
$
951

 
$
594

Amortization of acquisition-related intangible assets (in rental property and other expenses)
$
139

 
$

 
$
276

 
$

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(1,031
)
 
$
(553
)
 
$
(2,153
)
 
$
(1,097
)

The following table sets forth scheduled future amortization of intangible assets and below market lease liabilities:

 
 
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)
July 1 through December 31, 2013
 
$
1,828

 
$
17,283

 
$
621

 
$
1,032

 
$
277

 
$
(2,856
)
2014
 
3,241

 
30,455

 
1,160

 
1,817

 
553

 
(5,080
)
2015
 
2,606

 
24,935

 
932

 
1,438

 
553

 
(4,367
)
2016
 
1,508

 
20,563

 
738

 
1,085

 
553

 
(4,293
)
2017
 
1,220

 
17,526

 
664

 
951

 
553

 
(4,037
)
Thereafter
 
1,437

 
41,368

 
2,107

 
1,156

 
1,642

 
(19,432
)
 
 
$
11,840

 
$
152,130

 
$
6,222

 
$
7,479

 
$
4,131

 
$
(40,065
)
Weighted average remaining amortization periods as of June 30, 2013 (in years)
 
5.4

 
6.4

 
7.6

 
5.1

 
8.0

 
9.2



The following table sets forth the intangible assets acquired and below market lease liabilities assumed as a result of 2013 acquisition activity: