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28
Year Ended December 31,
2012 2011 2010
(Amounts in thousands, except per share data)
Computation of FFO allocable to Common Shares:
Net income ............................................................................................................ $ 943,035 $ 836,459 $ 696,114
Add back – depreciation and amortization, including amounts classified
as discontinued operations ........................................................................
358,103
358,525
354,386
Add back – depreciation from unconsolidated real estate investments .......... 75,648 64,677 61,110
Eliminate – gains on sale and impairment charges related to real estate
investments, including discontinued operations and our equity share
of unconsolidated real estate investments .................................................
(14,778)
(12,797)
(7,573)
FFO allocable to equity holders ............................................................................ 1,362,008 1,246,864 1,104,037
Less allocation of FFO to:
Noncontrolling equity interests ................................................................... (6,828) (15,539) (25,915)
Preferred shareholders ................................................................................. (266,937) (260,462) (240,634)
Equity Shares, Series A ............................................................................... - - (30,877)
Restricted share unitholders ........................................................................ (4,247) (2,817) (2,645)
FFO allocable to Common Shares ........................................................................ $ 1,083,996 $ 968,046 $ 803,966
Diluted weighted average common shares outstanding ........................................ 171,664 170,750 169,772
FFO per share ....................................................................................................... $ 6.31 $ 5.67 $ 4.74
In discussions with the investment community, we often discuss “Core FFO” per share, which represents
FFO per share, adjusted to exclude the impact of i) foreign currency gains and losses, representing a gain of
$8.9 million in 2012, and losses totaling $7.3 million and $42.3 million in 2011 and 2010, respectively, ii) EITF D-
42 income allocations, including our equity share of PSB, representing a reduction of FFO totaling $68.9 million,
$32.6 million and $35.8 million in 2012, 2011 and 2010, respectively, and ii) the aggregate net impact of
impairment charges with respect to non-real estate assets, contingency accruals, our equity share of PSB’s lease
termination benefits, and costs associated with the acquisition of real estate facilities, representing an aggregate net
reduction in FFO per share of $0.02, $0.03 and $0.02 in 2012, 2011 and 2010, respectively.
We present Core FFO per share because we believe it is a helpful measure in understanding our results of
operations, as we believe that the items noted above that are included in FFO per share, but excluded from Core
FFO per share, are not indicative of our ongoing earnings. We also believe that the analyst community, likewise,
reviews our Core FFO (or similar measures using different terminology) when evaluating our Company. Core FFO
is not a substitute for net income, earnings per share or cash flow from operations. Because other REITs may not
compute Core FFO in the same manner as we do, may not use the same terminology, or may not present such a
measure, Core FFO may not be comparable among REITs.
The following table reconciles from FFO per share to Core FFO per share:
Year Ended December 31,
2012
2011
Percentage
Change
2011
2010
Percentage
Change
FFO per share ............................................................... $ 6.31 $ 5.67 11.3% $ 5.67 $ 4.74 19.6%
Eliminate the per share impact of items excluded
from Core FFO:
Foreign currency exchange (gain) loss .................... (0.05) 0.04 0.04 0.25
Application of EITF D-42 ......................................... 0.40 0.19 0.19 0.21
Other items, net ......................................................... 0.02 0.03 0.03 0.02
Core FFO per share ...................................................... $ 6.68 $ 5.93 12.6% $ 5.93 $ 5.22 13.6%