XML 92 R17.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Debt Obligations | 12 Months Ended
--- | ---
Dec. 31, 2014
Debt Disclosure [Abstract] |
DEBT OBLIGATIONS | DEBT OBLIGATIONS The following table sets forth information regarding the Company’s consolidated debt obligations outstanding at December 31, 2014 and 2013 (in thousands):
| December 31, 2014 |  | December 31, 2013 |  | Effective Interest Rate |  |  |  | Maturity Date
MORTGAGE DEBT: |  |  |  |  |  |  |  |  |
Tysons Corner | $ | 89,513 |  |  | $ | 91,395 |  |  | 5.36 | % |  |  |  | Aug 2015
One Commerce Square | 123,205 |  |  | 125,089 |  |  | 3.68 | % |  | (a) |  | Jan 2016
Two Logan Square | 87,767 |  |  | 88,583 |  |  | 7.57 | % |  |  |  | Apr 2016
Fairview Eleven Tower | 21,242 |  |  | 21,630 |  |  | 4.25 | % |  | (b) |  | Jan 2017
Two Commerce Square | 112,000 |  |  | 112,000 |  |  | 4.51 | % |  | (a) |  | Apr 2023
IRS Philadelphia Campus | 184,442 |  |  | 190,964 |  |  | 7.00 | % |  |  |  | Sep 2030
Cira South Garage | 37,765 |  |  | 40,101 |  |  | 7.12 | % |  |  |  | Sep 2030
Principal balance outstanding | 655,934 |  |  | 669,762 |  |  |  |  |  |  |  |
Plus: fair market value premiums (discounts), net | (1,344 | ) |  | 389 |  |  |  |  |  |  |  |
Total mortgage indebtedness | $ | 654,590 |  |  | $ | 670,151 |  |  |  |  |  |  |  |
UNSECURED DEBT: |  |  |  |  |  |  |  |  |  |
Three-Year Term Loan - Swapped to fixed | $ | — |  |  | $ | 150,000 |  |  | 2.60 | % |  | (c) |  | Feb 2015
Four-Year Term Loan | — |  |  | 100,000 |  |  | LIBOR + 1.75% |  |  | (c), (d) |  | Feb 2016
Seven-Year Term Loan - Swapped to fixed | 200,000 |  |  | 200,000 |  |  | 3.62 | % |  |  |  | Feb 2019
$250.0M 5.40% Guaranteed Notes due 2014 | — |  |  | 218,549 |  |  | 5.53 | % |  | (e) |  | Nov 2014
$250.0M 7.50% Guaranteed Notes due 2015 | — |  |  | 157,625 |  |  | 7.76 | % |  | (e) |  | May 2015
$250.0M 6.00% Guaranteed Notes due 2016 | 149,919 |  |  | 149,919 |  |  | 5.95 | % |  |  |  | Apr 2016
$300.0M 5.70% Guaranteed Notes due 2017 | 300,000 |  |  | 300,000 |  |  | 5.68 | % |  |  |  | May 2017
$325.0M 4.95% Guaranteed Notes due 2018 | 325,000 |  |  | 325,000 |  |  | 5.13 | % |  |  |  | Apr 2018
$250.0M 3.95% Guaranteed Notes due 2023 | 250,000 |  |  | 250,000 |  |  | 4.02 | % |  |  |  | Feb 2023
$250.0M 4.10% Guaranteed Notes due 2024 | 250,000 |  |  | — |  |  | 4.23 | % |  | (e) |  | Oct 2024
$250.0M 4.55% Guaranteed Notes due 2029 | 250,000 |  |  | — |  |  | 4.60 | % |  | (e) |  | Oct 2029
Indenture IA (Preferred Trust I) | 27,062 |  |  | 27,062 |  |  | 2.75 | % |  |  |  | Mar 2035
Indenture IB (Preferred Trust I) | 25,774 |  |  | 25,774 |  |  | 3.30 | % |  |  |  | Apr 2035
Indenture II (Preferred Trust II) | 25,774 |  |  | 25,774 |  |  | 3.09 | % |  |  |  | Jul 2035
Principal balance outstanding | 1,803,529 |  |  | 1,929,703 |  |  |  |  |  |  |  |
plus: original issue premium (discount), net | (6,811 | ) |  | (4,473 | ) |  |  |  |  |  |  |
Total unsecured indebtedness | $ | 1,796,718 |  |  | $ | 1,925,230 |  |  |  |  |  |  |  |
Total Debt Obligations | $ | 2,451,308 |  |  | $ | 2,595,381 |  |  |  |  |  |  |  |
(a) | This loan was assumed upon acquisition of the related properties on December 19, 2013. The interest rate reflects the market rate at the time of acquisition.
(b) | Represents the full debt amount of a property in a consolidated joint venture for which the Company maintains a 50% interest.
(c) | On September 16, 2014, the Company repaid all balances outstanding under its $150.0 million three-year term loan and its $100.0 million four-year term loan prior to the scheduled maturity dates of February 1, 2015 and February 1, 2016, respectively.
(d) | London Interbank Offered Rate (“LIBOR”).
(e) | On September 16, 2014, the Company closed on an underwritten offering of $250.0 million 4.10% Guaranteed Notes due 2024 (the "2024 Notes") and $250.0 million 4.55% Guaranteed Notes due 2029 (the "2029 Notes"). The Company used the net proceeds, together with cash on hand, to redeem the remaining outstanding balance of its 5.40% Guaranteed Notes due November 1, 2014 (the "2014 Notes") and its 7.50% Guaranteed Notes due May 15, 2015 (the "2015 Notes"). (See further discussion below).
During 2014, 2013, and 2012, the Company’s weighted-average effective interest rate on its mortgage notes payable was 5.72%, 5.73%, and 6.65%, respectively. As of December 31, 2014 and 2013, the net carrying value of the Company's Properties that are encumbered by mortgage indebtedness was $655.9 million and $669.8 million, respectively. On September 16, 2014, the Company closed on an underwritten offering of its 2024 Notes and 2029 Notes (as defined above). The 2024 Notes were priced at 99.388% of their face amount with a yield to maturity of 4.175%, representing a spread at the time of pricing of 1.70%. The 2029 Notes were priced at 99.191% of their face amount with a yield to maturity of 4.625%, representing a spread at the time of pricing of 2.15%. The 2024 Notes and 2029 Notes have been reflected net of discounts of $1.5 million and $2.0 million, respectively, in the consolidated balance sheet as of December 31, 2014. The Company used a portion of the net proceeds from the sale of the 2024 Notes and 2029 Notes, aggregating $492.9 million after the deduction for underwriting discounts and offering expenses, to fund its repurchase, through a tender offer, of a portion of 2014 Notes and 2015 Notes (as defined above). Specifically, on September 16, 2014, the Company funded, under the tender offer, $75.1 million in respect of the 2014 Notes and $42.7 million in respect of the 2015 Notes. The Company recognized a $2.6 million loss on early extinguishment of debt related to the total repurchase. On September 16, 2014, the Company repaid the entire $150.0 million three-year term loan and $100.0 million four-year term loan prior to their scheduled February 2015 and 2016 maturities, respectively. In connection with these repayments, the Company accelerated $0.3 million of deferred financing amortization expense and also incurred a $0.8 million charge on the termination of associated interest rate swap contracts, as reflected in the Company's consolidated statements of operations. See Note 9, "Risk Management and Use of Financial Instruments," for further information related to the termination of the interest rate swap contracts. On September 16, 2014, the Company gave notice of redemption, in full, of the $143.5 million of 2014 Notes that remained outstanding following completion of the tender offer. The Company completed the redemption of the 2014 Notes on October 16, 2014 at a cash redemption price of $1,026.88 per $1,000 principal amount of the 2014 Notes (inclusive of accrued interest to the redemption date). Also on September 16, 2014, the Company gave notice of redemption, in full, of the $114.9 million of 2015 Notes that remained outstanding following completion of the tender offer. The Company completed the redemption of the 2015 Notes on October 16, 2014 at a cash redemption price of $1,070.24 per $1,000 principal amount of the 2015 Notes (inclusive of accrued interest to the redemption date). The Company recognized a $5.0 million loss on early extinguishment of debt related to total repurchase. The following table provides additional information on the Company’s repurchase of $376.2 million in aggregate principal amount of its outstanding unsecured notes (consisting of the 2014 Notes and 2015 Notes, as indicated above) during the twelve months ended December 31, 2014 (in thousands):
Notes | Principal |  | Repurchase Amount (a) |  | Gain (Loss) on Early Extinguishment of Debt (b) |  | Acceleration of Deferred Financing Amortization
2014 5.40% Notes | $ | 218,549 |  |  | $ | 219,404 |  |  | $ | (855 | ) |  | $ | 9 |
2015 7.50% Notes | 157,625 |  |  | 164,364 |  |  | (6,739 | ) |  | 143 |
| $ | 376,174 |  |  | $ | 383,768 |  |  | $ | (7,594 | ) |  | $ | 152 |
During the year-ended December 31, 2013, the Company repurchased $29.3 million of its outstanding unsecured Notes in a series of transactions that are summarized in the following table (in thousands):
Notes | Principal |  | Repurchase Amount (a) |  | Gain (Loss) on Early Extinguishment of Debt (b) |  | Acceleration of Deferred Financing Amortization
2014 5.40% Notes | $ | 19,830 |  |  | $ | 20,853 |  |  | $ | (1,020 | ) |  | $ | 16 |
2015 7.50% Notes | 8,910 |  |  | 9,945 |  |  | (1,036 | ) |  | 23 |
2016 6.00% Notes | 510 |  |  | 571 |  |  | (63 | ) |  | 1 |
| $ | 29,250 |  |  | $ | 31,369 |  |  | $ | (2,119 | ) |  | $ | 40 |
During the year-ended December 31, 2012, the Company repurchased $165.0 million of its outstanding unsecured Notes in a series of transactions that are summarized in the following table (in thousands):
Notes | Principal |  | Repurchase Amount (a) (c) |  | Gain (Loss) on Early Extinguishment of Debt (b) |  | Acceleration of Deferred Financing Amortization
2012 5.75% Notes | $ | 301 |  |  | $ | 303 |  |  | $ | (2 | ) |  | $ | — |
2014 5.40% Notes | 4,302 |  |  | 4,566 |  |  | (264 | ) |  | 8 |
2015 7.50% Notes | 60,794 |  |  | 69,497 |  |  | (8,712 | ) |  | 183 |
2016 6.00% Notes | 99,571 |  |  | 112,541 |  |  | (13,024 | ) |  | 260 |
| $ | 164,968 |  |  | $ | 186,907 |  |  | $ | (22,002 | ) |  | $ | 451 |
(a) | Includes cash losses with respect to redemption of debt.
(b) | Includes unamortized balance of the original issue discount.
(c) | Does not include $151.2 million of 5.75% Guaranteed Notes due 2012 that matured.
The Parent Company unconditionally guarantees the unsecured debt obligations of the Operating Partnership (or is a co-borrower with the Operating Partnership) but does not by itself incur unsecured indebtedness. The Parent Company has no material assets other than its investment in the Operating Partnership. The Company utilizes its $600.0 million four-year unsecured revolving credit facility (the "Credit Facility") for general business purposes, including funding costs of acquisitions, developments and redevelopments and repayment of other debt. The scheduled maturity date of the Credit Facility in place at December 31, 2014 is February 1, 2016. The per annum variable interest rate on the outstanding balances is LIBOR plus 1.50%. The interest rate and facility fee are subject to adjustment upon a change in the Company’s unsecured debt ratings. There were no outstanding borrowings under the credit facility during the year-ended December 31, 2014. For the year-ended December 31, 2013, the weighted-average interest rate associated with the Credit Facility was 0.29%. As of December 31, 2014, the Company did not have any outstanding borrowings on its Credit Facility, with $4.3 million in letters of credit outstanding, leaving $595.7 million of unused availability under the Credit Facility. The Company has the option to increase the amounts available to be advanced under the Credit Facility, subject to customary conditions and limitations, by obtaining additional commitments from the current lenders and other financial institutions. The Company also has the option to extend the maturity date of the Credit Facility. The unsecured $200.0 million seven-year term loan (the "Term Loan") is subject to a prepayment penalty of 1.00% through February 1, 2015 with no penalty thereafter. The spread to LIBOR for LIBOR-based loans under the Credit Facility will depend on our unsecured senior debt credit rating. Based on the Company's current credit rating, the spread will be 150 basis points under the Credit Facility and 190 basis points under the seven-year term loan, respectively. At our option, advances under the Credit Facility and Term Loan may also bear interest at a per annum floating rate equal to the higher of the prime rate or the federal funds rate plus 0.50% per annum. The Credit Facility contains a competitive bid option that allows banks that are part of the lender consortium to bid to make loans to us at a reduced rate. The Company executed a hedging transaction that fix the rate on the Term Loan at a 3.623% average for its full term. The hedge commenced on February 1, 2012 and the rate is inclusive of the LIBOR spread based on our current investment grade rating. See Note 9, "Risk Management and Use of Financial Instruments," for details of the interest rate swaps entered into as of December 31, 2014. The Credit Facility and Term Loan contain financial and operating covenants and restrictions. The Company was in compliance with all such restrictions and financial covenants as of December 31, 2014. The Credit Facility restricts the Company's dividend distributions to the greater of 95% of funds from operations or the minimum amount necessary for the Company to maintain its status as a REIT. As of December 31, 2014, the Company’s aggregate scheduled principal payments of debt obligations, excluding amortization of discounts and premiums, were as follows (in thousands):
2015 | $ | 102,030 |
2016 | 367,703 |
2017 | 330,323 |
2018 | 336,954 |
2019 | 213,155 |
Thereafter | 1,109,298 |
Total principal payments | 2,459,463 |
Net unamortized premiums/(discounts) | (8,155 | )
Outstanding indebtedness | $ | 2,451,308 |

X
- Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: 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 3: 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 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration