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Indebtedness | 12 Months Ended
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Dec. 31, 2011
Indebtedness |
Indebtedness |
Note 7. Indebtedness Our principal debt obligations at December 31, 2011 were: our $750,000 unsecured revolving credit facility; four public issuances of unsecured senior notes, including: $225,000 principal amount due 2012 at an annual interest rate of 8.625% (we repaid, at maturity, all $225,000 of these senior notes in January 2012), $250,000 principal amount due 2016 at an annual interest rate of 4.30%, $200,000 principal amount due 2020 at an annual interest rate of 6.75% and $300,000 principal amount due 2021 at an annual interest rate of 6.75%; and $847,404 aggregate principal amount of mortgages secured by 79 of our properties. The 79 mortgaged properties had a carrying value of $1,126,006 at December 31, 2011. We also have two properties subject to capital leases totaling $14,211 at December 31, 2011; these two properties had a carrying value of $16,027 at December 31, 2011. In connection with the acquisitions discussed in Note 3 above, during the year ended December 31, 2011, we assumed $217,317 of mortgage debt with a weighted average interest rate of 5.94% and a weighted average maturity of 5.3 years. We recorded the assumed mortgages at their fair value which approximated their outstanding principal balances. We determined the fair value of the assumed mortgages using a market approach based upon Level 2 inputs (significant other observable inputs) in the fair value hierarchy. In June 2011, we entered into a new $750,000 unsecured revolving credit facility with a group of 26 institutional lenders that we use for acquisitions, working capital and general business purposes. The new facility replaces our previous $550,000 unsecured revolving credit facility which had been scheduled to mature on December 31, 2011. In connection with this refinancing, we recorded a loss on early extinguishment of debt of $427 from the write off of unamortized deferred financing fees related to our previous $550,000 revolving credit facility. The maturity date of the new facility is June 24, 2015 and includes an option for us to extend the facility for one year to June 24, 2016 as well as includes a feature under which maximum borrowings may be increased up to $1,500,000 in certain circumstances. Interest paid under the new facility is set at LIBOR plus 160 basis points, subject to adjustments based on our credit ratings. We can borrow, repay and reborrow until maturity, and no principal repayment is due until maturity. The interest rate payable on borrowings under this revolving credit facility was 1.90% at December 31, 2011. In addition to interest, we pay certain fees to maintain this revolving credit facility and we amortize certain set up costs. Our revolving credit facility is available for acquisitions, working capital and general business purposes. As of December 31, 2011, we had no amounts outstanding and $750,000 available under this revolving credit facility. Our revolving credit facility contains financial covenants that require us to maintain financial ratios and a minimum net worth. We believe we were in compliance with these covenants and with the comparable covenants of our prior credit facility during the periods presented. In January 2011, we sold $250,000 of senior unsecured notes. The notes require interest at a fixed rate of 4.30% per annum and are due in 2016. Net proceeds from this sale of the notes, after underwriting discounts, fees and other expenses, were approximately $245,354. Interest on the notes is payable semi-annually in arrears. No principal payments are due until maturity. We used the net proceeds of this offering to repay $120,000 in borrowings under our revolving credit facility and for general business purposes, including funding in part the acquisitions described in Note 3 above. In December 2011, we sold $300,000 of senior unsecured notes. The notes require interest at a fixed rate of 6.75% per annum and are due in 2021. Net proceeds from this sale of the notes, after underwriting discounts, fees and other expenses, were approximately $292,170. Interest on the notes is payable semi-annually in arrears. No principal payments are due until maturity. We used the net proceeds of this offering to repay $70,000 in borrowings under our revolving credit facility and for general business purposes, including funding in part the acquisitions described in Note 3 above. In April 2010, we sold $200,000 of senior unsecured notes. The notes require interest at a fixed rate of 6.75% per annum and are due in 2020. Net proceeds from the sale of the notes, after underwriting discounts, fees and other expenses, were approximately $194,945. Interest on the notes is payable semi-annually in arrears. No principal payments are due until maturity. We used the net proceeds of this offering to repay $58,000 in borrowings under our revolving credit facility, to fund the redemption of all $97,500 of our outstanding 7.875% senior notes due 2015 and for general business purposes, including funding in part the acquisitions described in Note 3 above. As described above, in April 2010 we called all of our outstanding 7.875% senior notes due 2015 for redemption on May 17, 2010. As a result of this redemption, we recorded a loss on early extinguishment of debt of $2,433 consisting of the debt prepayment premium of approximately $1,280 and the write off of unamortized deferred financing fees and debt discount of approximately $1,153. At December 31, 2011 and 2010, our additional outstanding debt consisted of the following:
|  |  |  |  |  | December 31, 2011 |  | December 31, 2010 |
--- | --- | --- | --- | --- | --- | --- | --- | --- | ---
Unsecured Debt |  | Coupon |  | Maturity |  | Face Amount |  | Unamortized Discount |  | Face Amount |  | Unamortized Discount |
Senior notes |  |  | 8.625% |  |  | 2012 |  | $ | 225,000 |  | $ | — |  | $ | 225,000 |  | $ | 128 |
Senior notes |  |  | 4.300% |  |  | 2016 |  |  | 250,000 |  |  | 2,154 |  |  | — |  |  | — |
Senior notes |  |  | 6.750% |  |  | 2020 |  |  | 200,000 |  |  | 1,777 |  |  | 200,000 |  |  | 1,992 |
Senior notes |  |  | 6.750% |  |  | 2021 |  |  | 300,000 |  |  | 5,299 |  |  | — |  |  | — |
Total unsecured debt |  |  |  |  |  |  |  | $ | 975,000 |  | $ | 9,230 |  | $ | 425,000 |  | $ | 2,120 |
|  | Principal Balance as of December 31, |  |  |  |  |  |  |  |  |  | Net Book Value of Collateral |
--- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ---
|  | Interest Rate |  |  |  | Number of Properties as Collateral |  | Initial Cost of Collateral |
Secured and Other Debt |  | 2011(1) |  | 2010(1) |  | Maturity |  | 2011 |  | 2010 |
Mortgage(2) |  | $ | 12,400 |  | $ | — |  |  | 6.03% |  |  | Mar 2012 |  | 1 |  | $ | 17,158 |  | $ | 17,076 |  | $ | — |
Mortgage |  |  | 2,356 |  |  | 2,419 |  |  | 6.73% |  |  | June 2012 |  | 1 |  |  | 4,450 |  |  | 3,696 |  |  | 3,780 |
Mortgages |  |  | 30,580 |  |  | 31,552 |  |  | 6.97% |  |  | July 2012 |  | 16 |  |  | 70,114 |  |  | 61,542 |  |  | 63,300 |
Mortgage(3) |  |  | 3,177 |  |  | — |  |  | 6.07% |  |  | Sept 2012 |  | 1 |  |  | 22,143 |  |  | 21,838 |  |  | — |
Mortgage |  |  | 4,224 |  |  | 4,307 |  |  | 6.50% |  |  | Jan 2013 |  | 1 |  |  | 7,560 |  |  | 7,406 |  |  | 7,450 |
Mortgages |  |  | 10,920 |  |  | 11,255 |  |  | 6.11% |  |  | Dec 2013 |  | 4 |  |  | 17,034 |  |  | 14,814 |  |  | 15,225 |
Mortgages |  |  | 14,009 |  |  | 14,245 |  |  | 6.91% |  |  | Dec 2013 |  | 2 |  |  | 36,359 |  |  | 33,702 |  |  | 34,347 |
Mortgages |  |  | 37,619 |  |  | — |  |  | 5.83% |  |  | June 2014 |  | 2 |  |  | 79,000 |  |  | 79,108 |  |  | — |
Mortgage(3) |  |  | 5,215 |  |  | — |  |  | 5.65% |  |  | June 2015 |  | — |  |  | — |  |  | — |  |  | — |
Mortgage |  |  | 11,747 |  |  | — |  |  | 6.37% |  |  | July 2015 |  | 1 |  |  | 14,849 |  |  | 14,697 |  |  | — |
Mortgages |  |  | 13,310 |  |  | — |  |  | 5.66% |  |  | July 2015 |  | 3 |  |  | 26,606 |  |  | 26,377 |  |  | — |
Mortgage |  |  | 2,946 |  |  | — |  |  | 5.88% |  |  | July 2015 |  | 1 |  |  | 15,397 |  |  | 15,173 |  |  | — |
Mortgage |  |  | 4,684 |  |  | — |  |  | 5.81% |  |  | Oct 2015 |  | 1 |  |  | 8,600 |  |  | 8,532 |  |  | — |
Mortgage |  |  | 6,581 |  |  | — |  |  | 5.97% |  |  | Apr 2016 |  | 1 |  |  | 10,272 |  |  | 10,194 |  |  | — |
Mortgage |  |  | 93,133 |  |  | — |  |  | 5.924% |  |  | Nov 2016 |  | 2 |  |  | 157,500 |  |  | 157,640 |  |  | — |
Mortgage |  |  | 12,695 |  |  | — |  |  | 6.25% |  |  | Nov 2016 |  | 1 |  |  | 22,102 |  |  | 21,984 |  |  | — |
Mortgages |  |  | 47,688 |  |  | 48,565 |  |  | 6.54% |  |  | May 2017 |  | 8 |  |  | 62,500 |  |  | 57,873 |  |  | 59,067 |
Mortgage(4) |  |  | 300,669 |  |  | 303,948 |  |  | 6.71% |  |  | Sept 2019 |  | 28 |  |  | 617,161 |  |  | 505,214 |  |  | 506,805 |
Mortgage(4) |  |  | 200,078 |  |  | 202,449 |  |  | 6.39% |  |  | Sept 2019 |  | — |  |  | — |  |  | — |  |  | — |
Mortgage(5) |  |  | 3,515 |  |  | 3,742 |  |  | 7.31% |  |  | Jan 2022 |  | 1 |  |  | 18,827 |  |  | 17,243 |  |  | 17,703 |
Mortgage(5) |  |  | 1,725 |  |  | 1,833 |  |  | 7.85% |  |  | Jan 2022 |  | — |  |  | — |  |  | — |  |  | — |
Mortgage |  |  | 3,619 |  |  | — |  |  | 6.25% |  |  | Jan 2033 |  | 1 |  |  | 5,200 |  |  | 4,807 |  |  | — |
Mortgage |  |  | 9,623 |  |  | — |  |  | 5.95% |  |  | Sept 2038 |  | 2 |  |  | 11,425 |  |  | 19,589 |  |  | — |
Bonds |  |  | 14,700 |  |  | 14,700 |  |  | 5.875% |  |  | Dec 2027 |  | 1 |  |  | 34,307 |  |  | 27,503 |  |  | 28,409 |
Capital leases |  |  | 14,211 |  |  | 14,575 |  |  | 7.7% |  |  | Apr 2026 |  | 2 |  |  | 28,601 |  |  | 16,027 |  |  | 17,983 |
Total secured |  | $ | 861,424 |  | $ | 653,590 |  |  |  |  |  |  |  |  |  | $ | 1,287,165 |  | $ | 1,142,035 |  | $ | 754,069 |
(1) The principle balances are the amounts stated in the contracts. In accordance with generally accepted accounting principles, our carrying values and recorded interest expense may be different because of market conditions at the time we assumed certain of these debts. As of December 31, 2011 and 2010, the unamortized net premiums on certain of these mortgages were $191 and $420, respectively. (2) In February 2012 we repaid this debt. (3) These two mortgages are collateralized by one property acquired in June 2011. (4) These two mortgages were closed in August 2009 and are collateralized by 28 properties. A part of the loan requires interest at a fixed rate of 6.71% and a part of the loan requires interest at a variable rate which was partially protected by an interest rate hedge provided by the lender, FNMA, and was effectively at 6.39% on December 31, 2011. (5) These two mortgages are collateralized by one MOB property acquired in July 2008. We include amortization of capital lease assets in depreciation expense. Assets encumbered by capital leases had a net book value of $14,211 and $14,575 at December 31, 2011 and 2010, respectively. Interest on our unsecured senior notes and our bonds is payable semi-annually in arrears; however, no principal repayments are due until maturity. Required monthly payments on our mortgages include principal and interest. Payments under our capital leases are due monthly. Required principal payments on our outstanding debt as of December 31, 2011, are as follows:
2012 |  | $ | 286,119 |
2013 |  |  | 41,316 |
2014 |  |  | 49,161 |
2015 |  |  | 48,967 |
2016 |  |  | 360,587 |
Thereafter |  |  | 1,050,274 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 + Details
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