Maryland	77-0404318
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

Indicate by check mark whether the Exchange registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer o
Non-accelerated filer (Do not check if a smaller reporting company) o	Smaller reporting company o

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND OTHER COMPREHENSIVE INCOME

(unaudited)

(Dollars in thousands, except per share data)

		For the three months ended								For the nine months ended
		9-30-10				9-30-09				9-30-10				9-30-09
Revenue:
Rental and other income		$	225,783			$	213,165			$	658,040			$	631,392
Management, development and other fees			1,800				1,878				5,334				5,423
Total revenue			227,583				215,043				663,374				636,815
Expenses:
Operating expenses, excluding property taxes			69,848				66,693				200,575				195,226
Property taxes			23,402				21,093				69,695				61,871
Interest expense, net			44,262				41,205				128,260				108,215
Gain on extinguishment of debt, net			--				--				--				(1,062	)
Depreciation expense			58,628				52,987				171,956				153,992
General and administrative expense			7,039				5,750				19,975				18,388
Impairment loss - land holdings			--				--				--				20,302
Total expenses			203,179				187,728				590,461				556,932
Equity in income (loss) of unconsolidated entities			(325	)			190				364				4,139
Gain on sale of land			--				241				--				241
Income from continuing operations			24,079				27,746				73,277				84,263
Discontinued operations:
Income (loss) from discontinued operations			(99	)			3,685				1,917				10,991
Gain on sale of communities			--				26,670				72,220				26,670
Total discontinued operations			(99	)			30,355				74,137				37,661
Net income			23,980				58,101				147,414				121,924
Net (income) loss attributable to noncontrolling interests			674				53				890				1,329
Net income attributable to common stockholders		$	24,654			$	58,154			$	148,304			$	123,253
Other comprehensive income:
Unrealized (loss) gain on cash flow hedges			(314	)			521				(448	)			1,318
Comprehensive income		$	24,340			$	58,675			$	147,856			$	124,571
Earnings per common share - basic:
Income from continuing operations attributable to common stockholders		$	0.29			$	0.34			$	0.88			$	1.08
Discontinued operations attributable to common stockholders			--				0.38				0.89				0.47
Net income attributable to common stockholders		$	0.29			$	0.72			$	1.77			$	1.55
Earnings per common share - diluted:
Income from continuing operations attributable to common stockholders		$	0.29			$	0.34			$	0.88			$	1.07
Discontinued operations attributable to common stockholders			--				0.38				0.88				0.47
Net income attributable to common stockholders		$	0.29			$	0.72			$	1.76			$	1.54
Dividends per common share:		$	0.8925			$	0.8925			$	2.6775			$	2.6775

 

See accompanying notes to Condensed Consolidated Financial Statements.

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(Dollars in thousands)

		For the nine months ended
		9-30-10				9-30-09
Cash flows from operating activities:
Net income		$	147,414			$	121,924
Adjustments to reconcile net income to cash provided
by operating activities:
Depreciation expense			171,956				153,992
Depreciation expense from discontinued operations			371				7,701
Amortization of deferred financing costs and debt premium/discount			5,944				5,422
Amortization of stock-based compensation			4,536				4,887
Equity in income of unconsolidated entities and noncontrolling
interests, net of eliminations			852				(3,992	)
Impairment loss - land holdings			--				20,302
Gain on sale of real estate assets			(72,220	)			(26,911	)
Gain on extinguishment of debt, net			--				(1,062	)
Increase in cash in operating escrows			(294	)			(2,699	)
Increase in resident security deposits, prepaid expenses and other assets			(25,221	)			(17,711	)
Increase in accrued expenses, other liabilities and accrued interest payable			1,041				11,125
Net cash provided by operating activities			234,379				272,978
Cash flows from investing activities:
Development/redevelopment of real estate assets including
land acquisitions and deferred development costs			(330,251	)			(444,892	)
Capital expenditures - existing real estate assets			(9,683	)			(4,112	)
Capital expenditures - non-real estate assets			(517	)			(699	)
Proceeds from sale of real estate, net of selling costs			186,058				67,893
Decrease in payables for construction			(11,917	)			(14,742	)
Decrease in cash in construction escrows			32,940				66,492
Acquisition of mortgage note			(24,000	)			--
Decrease (increase) in investments in unconsolidated real estate entities			(20,977	)			382
Net cash used in investing activities			(178,347	)			(329,678	)
Cash flows from financing activities:
Issuance of common stock			322,257				102,442
Dividends paid			(222,081	)			(211,269	)
Payments under unsecured credit facility			--				(124,000	)
Issuance of mortgage notes payable and draws on construction loans			--				741,140
Repayments of mortgage notes payable			(29,433	)			(29,516	)
Issuance of unsecured notes			--				499,372
Repayment of unsecured notes			--				(420,936	)
Payment of deferred financing costs			(3,149	)			(11,635	)
Redemption of units for cash by minority partners			--				(202	)
Distributions to DownREIT partnership unitholders			(42	)			(39	)
Distributions to joint venture and profit-sharing partners			(164	)			--
Net cash provided by financing activities			67,388				545,357
Net increase in cash and cash equivalents			123,420				488,657
Cash and cash equivalents, beginning of period			105,691				65,678
Cash and cash equivalents, end of period		$	229,111			$	554,335
Cash paid during the period for interest, net of amount capitalized		$	125,190			$	101,059

See accompanying notes to Condensed Consolidated Financial Statements.

 

 

 

●

As described in Note 4, “Stockholders’ Equity,” 102,984 shares of common stock valued at $7,777 were issued in connection with stock grants; 4,716 shares valued at $419 were issued through the Company’s dividend reinvestment plan; 46,852 shares valued at $3,990 were withheld to satisfy employees’ tax withholding and other liabilities; 1,300 shares valued at $39 were forfeited and 61,055 shares valued at $3,322 were issued to members of the board of directors in fulfillment of deferred stock awards for a net value of $7,489. In addition, the Company granted 126,484 options for common stock at a value of $2,460.

●	25 units of limited partnership, valued at $3, were presented for redemption to the DownREIT partnerships that issued such units and were acquired by the Company in exchange for an equal number of shares of the Company’s common stock.

●

The Company recorded an increase to other liabilities and a corresponding decrease to other comprehensive income of $448 and recorded an increase to prepaid expenses and other assets of $2,181, with a corresponding offset to the basis of unsecured notes, net to record the impact of the Company’s hedge accounting activity (as described in Note 5, “Derivative Instruments and Hedging Activities”).

●	Common dividends declared but not paid totaled $76,127.

●

The Company recorded an increase of $5,305 in redeemable noncontrolling interests with a corresponding decrease to accumulated earnings less dividends to adjust the redemption value associated with the put options held by joint venture partners and DownREIT partnership units. For further discussion of the nature and valuation of these items, see Note 11, “Fair Value”.

●	The Company recognized $4,812 in noncontrolling interest in conjunction with the consolidation of a Fund I subsidiary. See Note 6, “Investments in Real Estate Entities” for further discussion.

●

2,624,641 shares of common stock valued at $139,058 were issued as part of the special dividend declared in the fourth quarter of 2008; 169,851 shares of common stock valued at $8,360 were issued in connection with stock grants; 9,201 shares valued at $505 were issued through the Company’s dividend reinvestment plan; 33,006 shares valued at $1,502 were withheld to satisfy employees’ tax withholding and other liabilities and 1,031 shares valued at $147 were forfeited, for a net value of $146,274.  In addition, the Company granted 344,801 options for common stock at a value of $2,252.

●	The Company recorded a decrease to other liabilities and a corresponding increase to other comprehensive income of $1,318 to record the impact of the Company’s hedge accounting activity.

●	Common dividends declared but not paid totaled $72,595.

●	The Company recorded a decrease of $4,745 in redeemable noncontrolling interests with a corresponding increase to accumulated earnings less dividends to adjust the redemption value associated with the put options held by joint venture partners and DownREIT partnership units.

●

In May 2009, the Company obtained $93,440 in variable rate tax-exempt bond financing related to a Development Right (as defined elsewhere in this Form 10-Q), the proceeds of which will be held in escrow until requisitioned for construction funding. This loan provides an option for the Company to request an additional construction loan of up to $83,560 subject to the lender’s discretion.

 

 

 

 

 

 

		For the three months ended								For the nine months ended
		9-30-10				9-30-09				9-30-10				9-30-09
Basic and diluted shares outstanding
Weighted average common shares - basic			84,968,804				80,132,409				83,385,833				79,521,277
Weighted average DownREIT units outstanding			15,346				15,351				15,349				16,874
Effect of dilutive securities			784,546				461,517				728,712				631,942
Weighted average common shares - diluted			85,768,696				80,609,277				84,129,894				80,170,093
Calculation of Earnings per Share - basic
Net income attributable to common stockholders		$	24,654			$	58,154			$	148,304			$	123,253
Net income allocated to unvested restricted shares			(68	)			(182	)			(429	)			(389	)
Net income attributable to common stockholders, adjusted		$	24,586			$	57,972			$	147,875			$	122,864
Weighted average common shares - basic			84,968,804				80,132,409				83,385,833				79,521,277
Earnings per common share - basic		$	0.29			$	0.72			$	1.77			$	1.55
Calculation of Earnings per Share - diluted
Net income attributable to common stockholders		$	24,654			$	58,154			$	148,304			$	123,253
Add: noncontrolling interests of DownREIT unitholders in
consolidated partnerships, including discontinued operations			14				14				41				52
Adjusted net income attributable to common stockholders		$	24,668			$	58,168			$	148,345			$	123,305
Weighted average common shares - diluted			85,768,696				80,609,277				84,129,894				80,170,093
Earnings per common share - diluted		$	0.29			$	0.72			$	1.76			$	1.54

 

 

 

 

 

 

 

 

 

(1)	Balances at September 30, 2010 and December 31, 2009 exclude $1,950 and $2,220 respectively of debt discount, and $1,953 and ($228) respectively for basis adjustments, as reflected in unsecured notes on the Company's Condensed Consolidated Balance sheets.

●	In February 2010, the Company repaid a 6.47% fixed rate secured mortgage note in the amount of $13,961 in advance of its March 2012 scheduled maturity date.

●	In March 2010, the Company repaid a 6.95% fixed rate secured mortgage note in the amount of $11,226 in advance of its February 2025 scheduled maturity date.