Attached files
file | filename |
---|---|
EX-32.1 - EXHIBIT 32.1 - CBL & ASSOCIATES PROPERTIES INC | exhibit321.htm |
EX-32.2 - EXHIBIT 32.2 - CBL & ASSOCIATES PROPERTIES INC | exhibit322.htm |
EX-31.1 - EXHIBIT 31.1 - CBL & ASSOCIATES PROPERTIES INC | exhibit311.htm |
EX-31.2 - EXHIBIT 31.2 - CBL & ASSOCIATES PROPERTIES INC | exhibit312.htm |
EX-12.1 - EXHIBIT 12.1 - CBL & ASSOCIATES PROPERTIES INC | exhibit121.htm |
EX-10.5.9 - EXHIBIT 10.5.9 - CBL & ASSOCIATES PROPERTIES INC | exhibit1059.htm |
EX-10.15.3 - EXHIBIT 10.15.3 - CBL & ASSOCIATES PROPERTIES INC | exhibit10153.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
______________
FORM
10-Q
______________
|
x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|
FOR
THE QUARTERLY PERIOD ENDED JUNE 30, 2010
Or
|
o TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
FOR
THE TRANSITION PERIOD FROM ____________ TO _______________
COMMISSION
FILE NO. 1-12494
______________
CBL
& ASSOCIATES PROPERTIES, INC.
(Exact
Name of registrant as specified in its charter)
______________
DELAWARE 62-1545718
(State
or other jurisdiction of incorporation or
organization) (I.R.S.
Employer Identification Number)
2030
Hamilton Place Blvd., Suite 500, Chattanooga,
TN 37421-6000
(Address
of principal executive office, including zip code)
423.855.0001
(Registrant’s
telephone number, including area code)
N/A
(Former
name, former address and former fiscal year, if changed since last
report)
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes x No
o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes o No
o
Indicate
by check mark whether the 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.
Large
accelerated filer x Accelerated filer o
Non-accelerated filer o(Do not check if smaller
reporting company) Smaller Reporting
Company o
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes o No
x
As of
August 4, 2010, there were 138,076,295 shares of common stock, par value $0.01
per share, outstanding.
1
CBL
& Associates Properties, Inc.
Table
of Contents
CBL
& Associates Properties, Inc.
(In
thousands, except share data)
(Unaudited)
ASSETS
|
June 30,
2010
|
December
31,
2009
|
||||||
Real
estate assets:
|
||||||||
Land
|
$ | 943,492 | $ | 946,750 | ||||
Buildings
and improvements
|
7,557,570 | 7,569,015 | ||||||
8,501,062 | 8,515,765 | |||||||
Less
accumulated depreciation
|
(1,612,950 | ) | (1,505,840 | ) | ||||
6,888,112 | 7,009,925 | |||||||
Developments
in progress
|
99,748 | 85,110 | ||||||
Net
investment in real estate assets
|
6,987,860 | 7,095,035 | ||||||
Cash
and cash equivalents
|
60,649 | 48,062 | ||||||
Receivables:
|
||||||||
Tenant,
net of allowance for doubtful accounts of $3,241 in 2010
and
$3,101 in 2009
|
69,268 | 73,170 | ||||||
Other
|
13,240 | 8,162 | ||||||
Mortgage
and other notes receivable
|
38,025 | 38,208 | ||||||
Investments
in unconsolidated affiliates
|
214,682 | 186,523 | ||||||
Intangible
lease assets and other assets
|
273,253 | 279,950 | ||||||
$ | 7,656,977 | $ | 7,729,110 | |||||
LIABILITIES,
REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
|
||||||||
Mortgage
and other indebtedness
|
$ | 5,455,867 | $ | 5,616,139 | ||||
Accounts
payable and accrued liabilities
|
290,347 | 248,333 | ||||||
Total
liabilities
|
5,746,214 | 5,864,472 | ||||||
Commitments
and contingencies (Notes 4 and 9)
|
||||||||
Redeemable
noncontrolling interests:
|
||||||||
Redeemable
noncontrolling partnership interests
|
25,933 | 22,689 | ||||||
Redeemable
noncontrolling preferred joint venture interest
|
421,562 | 421,570 | ||||||
Total
redeemable noncontrolling interests
|
447,495 | 444,259 | ||||||
Shareholders’
equity:
|
||||||||
Preferred
stock, $.01 par value, 15,000,000 shares authorized:
|
||||||||
7.75%
Series C Cumulative Redeemable Preferred Stock,
460,000
shares outstanding
|
5 | 5 | ||||||
7.375%
Series D Cumulative Redeemable Preferred Stock, 1,330,000
and
700,000 shares outstanding in 2010 and 2009, respectively
|
13 | 7 | ||||||
Common
stock, $.01 par value, 350,000,000 shares authorized,
138,075,609
and
137,888,408 issued and outstanding in 2010 and 2009,
respectively
|
1,381 | 1,379 | ||||||
Additional
paid-in capital
|
1,508,116 | 1,399,654 | ||||||
Accumulated
other comprehensive income
|
4,310 | 491 | ||||||
Accumulated
deficit
|
(335,173 | ) | (283,640 | ) | ||||
Total
shareholders’ equity
|
1,178,652 | 1,117,896 | ||||||
Noncontrolling
interests
|
284,616 | 302,483 | ||||||
Total
equity
|
1,463,268 | 1,420,379 | ||||||
$ | 7,656,977 | $ | 7,729,110 |
The
accompanying notes are an integral part of these balance
sheets.
3
CBL & Associates Properties,
Inc.
(In
thousands, except per share data)
(Unaudited)
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
REVENUES:
|
||||||||||||||||
Minimum
rents
|
$ | 170,239 | $ | 170,491 | $ | 339,060 | $ | 342,428 | ||||||||
Percentage
rents
|
2,127 | 1,604 | 6,140 | 6,408 | ||||||||||||
Other
rents
|
4,598 | 4,142 | 9,174 | 8,422 | ||||||||||||
Tenant
reimbursements
|
76,347 | 81,695 | 156,170 | 163,179 | ||||||||||||
Management,
development and leasing fees
|
1,601 | 1,615 | 3,307 | 4,080 | ||||||||||||
Other
|
7,234 | 6,977 | 14,471 | 13,067 | ||||||||||||
Total
revenues
|
262,146 | 266,524 | 528,322 | 537,584 | ||||||||||||
EXPENSES:
|
||||||||||||||||
Property
operating
|
37,514 | 39,355 | 76,411 | 83,372 | ||||||||||||
Depreciation
and amortization
|
70,652 | 75,793 | 142,664 | 154,104 | ||||||||||||
Real
estate taxes
|
24,866 | 24,449 | 49,858 | 48,603 | ||||||||||||
Maintenance
and repairs
|
13,561 | 13,416 | 29,745 | 29,410 | ||||||||||||
General
and administrative
|
10,321 | 10,893 | 21,395 | 22,372 | ||||||||||||
Loss
on impairment of real estate
|
25,435 | - | 25,435 | - | ||||||||||||
Other
|
6,415 | 5,914 | 13,116 | 11,071 | ||||||||||||
Total
expenses
|
188,764 | 169,820 | 358,624 | 348,932 | ||||||||||||
Income
from operations
|
73,382 | 96,704 | 169,698 | 188,652 | ||||||||||||
Interest
and other income
|
948 | 1,362 | 1,999 | 2,943 | ||||||||||||
Interest
expense
|
(73,341 | ) | (72,842 | ) | (146,801 | ) | (144,727 | ) | ||||||||
Loss
on impairment of investment
|
- | - | - | (7,706 | ) | |||||||||||
Gain
(loss) on sales of real estate assets
|
1,149 | 72 | 2,015 | (67 | ) | |||||||||||
Equity
in earnings of unconsolidated affiliates
|
409 | 62 | 948 | 1,596 | ||||||||||||
Income
tax benefit (provision)
|
1,911 | (152 | ) | 3,788 | (755 | ) | ||||||||||
Income
from continuing operations
|
4,458 | 25,206 | 31,647 | 39,936 | ||||||||||||
Operating
income of discontinued operations
|
59 | 86 | 73 | 20 | ||||||||||||
Loss
on discontinued operations
|
- | (12 | ) | - | (72 | ) | ||||||||||
Net
income
|
4,517 | 25,280 | 31,720 | 39,884 | ||||||||||||
Net
(income) loss attributable to noncontrolling interests in:
|
||||||||||||||||
Operating
partnership
|
2,723 | (5,109 | ) | (1,387 | ) | (6,415 | ) | |||||||||
Other
consolidated subsidiaries
|
(6,124 | ) | (6,580 | ) | (12,261 | ) | (12,711 | ) | ||||||||
Net
income attributable to the Company
|
1,116 | 13,591 | 18,072 | 20,758 | ||||||||||||
Preferred
dividends
|
(8,358 | ) | (5,454 | ) | (14,386 | ) | (10,909 | ) | ||||||||
Net
income (loss) attributable to common shareholders
|
$ | (7,242 | ) | $ | 8,137 | $ | 3,686 | $ | 9,849 |
The
accompanying notes are an integral part of these statements.
4
CBL
& Associates Properties, Inc.
Condensed
Consolidated Statements of Operations
(In
thousands, except per share data)
(Unaudited)
(Continued)
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Basic
per share data:
|
||||||||||||||||
Income
(loss) from continuing operations, net of preferred
dividends
|
$ | (0.05 | ) | $ | 0.10 | $ | 0.03 | $ | 0.13 | |||||||
Discontinued
operations
|
- | - | - | - | ||||||||||||
Net
income (loss) attributable to common shareholders
|
$ | (0.05 | ) | $ | 0.10 | $ | 0.03 | $ | 0.13 | |||||||
Weighted
average common shares outstanding
|
138,068 | 82,187 | 138,018 | 74,341 | ||||||||||||
Diluted
per share data:
|
||||||||||||||||
Income
(loss) from continuing operations, net of preferred
dividends
|
$ | (0.05 | ) | $ | 0.10 | $ | 0.03 | $ | 0.13 | |||||||
Discontinued
operations
|
- | - | - | - | ||||||||||||
Net
income (loss) attributable to common shareholders
|
$ | (0.05 | ) | $ | 0.10 | $ | 0.03 | $ | 0.13 | |||||||
Weighted
average common and potential dilutive
common shares outstanding |
138,112 | 82,226 | 138,059 | 74,378 | ||||||||||||
Amounts
attributable to common shareholders:
|
||||||||||||||||
Income
(loss) from continuing operations, net of preferred
dividends
|
$ | (7,285 | ) | $ | 8,092 | $ | 3,633 | $ | 9,880 | |||||||
Discontinued
operations
|
43 | 45 | 53 | (31 | ) | |||||||||||
Net
income (loss) attributable to common shareholders
|
$ | (7,242 | ) | $ | 8,137 | $ | 3,686 | $ | 9,849 | |||||||
Dividends
declared per common share
|
$ | 0.20 | $ | 0.11 | $ | 0.40 | $ | 0.48 |
The
accompanying notes are an integral part of these statements.
5
CBL
& Associates Properties, Inc.
(In
thousands, except per share data)
Equity
|
||||||||||||||||||||||||||||||||||||
Shareholders'
Equity
|
||||||||||||||||||||||||||||||||||||
Redeemable
Noncontrolling Partnership Interests
|
Preferred
Stock
|
Common
Stock
|
Additional
Paid-in Capital
|
Accumulated
Other Comprehensive Loss
|
Accumulated
Deficit
|
Total
Shareholders' Equity
|
Noncontrolling
Interests
|
Total
Equity
|
||||||||||||||||||||||||||||
Balance,
January 1, 2009
|
$ | 18,393 | $ | 12 | $ | 664 | $ | 993,941 | $ | (12,786 | ) | $ | (193,307 | ) | $ | 788,524 | $ | 380,472 | $ | 1,168,996 | ||||||||||||||||
Net
income
|
2,688 | - | - | - | - | 20,758 | 20,758 | 6,095 | 26,853 | |||||||||||||||||||||||||||
Other
comprehensive income:
|
||||||||||||||||||||||||||||||||||||
Net
unrealized gain (loss) on available-for-sale securities
|
193 | - | - | - | 192 | - | 192 | (249 | ) | (57 | ) | |||||||||||||||||||||||||
Net
unrealized gain on hedging instruments
|
342 | - | - | - | 3,053 | - | 3,053 | 1,728 | 4,781 | |||||||||||||||||||||||||||
Realized
loss on foreign currency translation adjustment
|
3 | - | - | - | 44 | - | 44 | 28 | 72 | |||||||||||||||||||||||||||
Net
unrealized gain on foreign currency translation
adjustment
|
350 | - | - | - | 2,529 | - | 2,529 | 1,300 | 3,829 | |||||||||||||||||||||||||||
Total
other comprehensive income
|
888 | 5,818 | 2,807 | 8,625 | ||||||||||||||||||||||||||||||||
Dividends
declared - common stock
|
- | - | - | - | - | (39,744 | ) | (39,744 | ) | - | (39,744 | ) | ||||||||||||||||||||||||
Dividends
declared - preferred stock
|
- | - | - | - | - | (10,909 | ) | (10,909 | ) | - | (10,909 | ) | ||||||||||||||||||||||||
Issuance
of common stock and restricted common stock
|
- | - | - | 414 | - | - | 414 | - | 414 | |||||||||||||||||||||||||||
Issuance
of common stock for dividend
|
- | - | 48 | 14,691 | - | - | 14,739 | - | 14,739 | |||||||||||||||||||||||||||
Issuance
of common stock in equity offering
|
- | - | 666 | 380,936 | - | - | 381,602 | - | 381,602 | |||||||||||||||||||||||||||
Cancellation
of restricted common stock
|
- | - | - | (117 | ) | - | - | (117 | ) | - | (117 | ) | ||||||||||||||||||||||||
Accrual
under deferred compensation arrangements
|
- | - | - | 39 | - | - | 39 | - | 39 | |||||||||||||||||||||||||||
Amortization
of deferred compensation
|
- | - | - | 1,515 | - | - | 1,515 | - | 1,515 | |||||||||||||||||||||||||||
Additions
to deferred financing costs
|
- | - | - | - | - | - | - | 23 | 23 | |||||||||||||||||||||||||||
Transfer
from noncontrolling interests to redeemable
noncontrolling
interests
|
82,970 | - | - | - | - | - | - | (82,970 | ) | (82,970 | ) | |||||||||||||||||||||||||
Issuance
of noncontrolling interests for distribution
|
- | - | - | - | - | - | - | 4,140 | 4,140 | |||||||||||||||||||||||||||
Distributions
to noncontrolling interests
|
(6,262 | ) | - | - | - | - | - | - | (29,062 | ) | (29,062 | ) | ||||||||||||||||||||||||
Purchase
of noncontrolling interest in other consolidated
subsidiaries
|
- | - | - | 217 | - | - | 217 | (717 | ) | (500 | ) | |||||||||||||||||||||||||
Adjustment
for noncontrolling interests
|
(6,238 | ) | - | - | 27,931 | - | - | 27,931 | (21,693 | ) | 6,238 | |||||||||||||||||||||||||
Adjustment
to record redeemable noncontrolling interests
at
redemption value
|
(647 | ) | - | - | 647 | - | - | 647 | - | 647 | ||||||||||||||||||||||||||
Balance,
June 30, 2009
|
$ | 91,792 | $ | 12 | $ | 1,378 | $ | 1,420,214 | $ | (6,968 | ) | $ | (223,202 | ) | $ | 1,191,434 | $ | 259,095 | $ | 1,450,529 |
The
accompanying notes are an integral part of these statements.
6
CBL
& Associates Properties, Inc.
Condensed
Consolidated Statements of Equity
(In
thousands, except per share data)
Equity
|
||||||||||||||||||||||||||||||||||||
Shareholders'
Equity
|
||||||||||||||||||||||||||||||||||||
Redeemable
Noncontrolling Partnership Interests
|
Preferred
Stock
|
Common
Stock
|
Additional
Paid-in Capital
|
Accumulated
Other Comprehensive Income
|
Accumulated
Deficit
|
Total
Shareholders' Equity
|
Noncontrolling
Interests
|
Total
Equity
|
||||||||||||||||||||||||||||
Balance,
January 1, 2010
|
$ | 22,689 | $ | 12 | $ | 1,379 | $ | 1,399,654 | $ | 491 | $ | (283,640 | ) | $ | 1,117,896 | $ | 302,483 | $ | 1,420,379 | |||||||||||||||||
Net
income
|
1,874 | - | - | - | - | 18,072 | 18,072 | 1,550 | 19,622 | |||||||||||||||||||||||||||
Other
comprehensive income (loss):
|
||||||||||||||||||||||||||||||||||||
Net
unrealized gain on available-for-sale securities
|
40 | - | - | - | 3,557 | - | 3,557 | 1,299 | 4,856 | |||||||||||||||||||||||||||
Net
unrealized gain on hedging instruments
|
12 | - | - | - | 1,101 | - | 1,101 | 402 | 1,503 | |||||||||||||||||||||||||||
Realized
loss on foreign currency translation adjustment
|
1 | - | - | - | 123 | - | 123 | 45 | 168 | |||||||||||||||||||||||||||
Net
unrealized gain (loss) on foreign currency translation
adjustment
|
(397 | ) | - | - | - | (962 | ) | - | (962 | ) | 1,203 | 241 | ||||||||||||||||||||||||
Total
other comprehensive income (loss)
|
(344 | ) | 3,819 | 2,949 | 6,768 | |||||||||||||||||||||||||||||||
Dividends
declared - common stock
|
- | - | - | - | - | (55,219 | ) | (55,219 | ) | - | (55,219 | ) | ||||||||||||||||||||||||
Dividends
declared - preferred stock
|
- | - | - | - | - | (14,386 | ) | (14,386 | ) | - | (14,386 | ) | ||||||||||||||||||||||||
Issuance
of preferred stock for equity offering
|
- | 6 | - | 121,262 | - | - | 121,268 | - | 121,268 | |||||||||||||||||||||||||||
Issuance
of common stock and restricted common stock
|
- | - | 1 | 121 | - | - | 122 | - | 122 | |||||||||||||||||||||||||||
Cancellation
of restricted common stock
|
- | - | - | (175 | ) | - | - | (175 | ) | - | (175 | ) | ||||||||||||||||||||||||
Exercise
of stock options
|
- | - | 1 | 941 | - | - | 942 | - | 942 | |||||||||||||||||||||||||||
Accrual
under deferred compensation arrangements
|
- | - | - | 16 | - | - | 16 | - | 16 | |||||||||||||||||||||||||||
Amortization
of deferred compensation
|
- | - | - | 1,485 | - | - | 1,485 | - | 1,485 | |||||||||||||||||||||||||||
Income
tax effect of share-based compensation
|
(10 | ) | - | - | (1,468 | ) | - | - | (1,468 | ) | (337 | ) | (1,805 | ) | ||||||||||||||||||||||
Distributions
to noncontrolling interests
|
(4,536 | ) | - | - | - | - | - | - | (29,489 | ) | (29,489 | ) | ||||||||||||||||||||||||
Adjustment
for noncontrolling interests
|
837 | - | - | (8,297 | ) | - | - | (8,297 | ) | 7,460 | (837 | ) | ||||||||||||||||||||||||
Adjustment
to record redeemable noncontrolling interests
at
redemption value
|
5,423 | - | - | (5,423 | ) | - | - | (5,423 | ) | - | (5,423 | ) | ||||||||||||||||||||||||
Balance,
June 30, 2010
|
$ | 25,933 | $ | 18 | $ | 1,381 | $ | 1,508,116 | $ | 4,310 | $ | (335,173 | ) | $ | 1,178,652 | $ | 284,616 | $ | 1,463,268 |
The
accompanying notes are an integral part of these statements.
7
CBL
& Associates Properties, Inc.
(In
thousands)
(Unaudited)
Six Months Ended June 30,
|
||||||||
2010
|
2009
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income
|
$ | 31,720 | $ | 39,884 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
|
97,420 | 96,393 | ||||||
Amortization
|
47,058 | 62,142 | ||||||
Amortization
of deferred finance costs and debt premiums (discounts)
|
3,440 | (938 | ) | |||||
Net
amortization of above- and below-market leases
|
(1,735 | ) | (3,112 | ) | ||||
(Gain)
loss on sales of real estate assets
|
(2,015 | ) | 67 | |||||
Realized
foreign currency loss
|
169 | 75 | ||||||
Loss
on discontinued operations
|
- | 72 | ||||||
Write-off
of development projects
|
359 | 143 | ||||||
Share-based
compensation expense
|
1,561 | 1,875 | ||||||
Income
tax effect of share-based compensation
|
(1,815 | ) | - | |||||
Loss
on impairment of investment
|
- | 7,706 | ||||||
Loss
on impairment of real estate
|
25,435 | - | ||||||
Equity
in earnings of unconsolidated affiliates
|
(948 | ) | (1,596 | ) | ||||
Distributions
of earnings from unconsolidated affiliates
|
2,730 | 6,020 | ||||||
Provision
for doubtful accounts
|
1,745 | 3,797 | ||||||
Change
in deferred tax accounts
|
349 | 712 | ||||||
Changes
in:
|
||||||||
Tenant
and other receivables
|
(2,995 | ) | 639 | |||||
Other
assets
|
739 | (2,787 | ) | |||||
Accounts
payable and accrued liabilities
|
(21,297 | ) | (11,947 | ) | ||||
Net
cash provided by operating activities
|
181,920 | 199,145 | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Additions
to real estate assets
|
(45,417 | ) | (115,718 | ) | ||||
Distributions
from restricted cash
|
688 | 2,699 | ||||||
Proceeds
from sales of real estate assets
|
2,607 | 4,722 | ||||||
Additions
to mortgage notes receivable
|
- | (4,437 | ) | |||||
Payments
received on mortgage notes receivable
|
1,278 | 7,437 | ||||||
Additional
investments in and advances to unconsolidated affiliates
|
(24,750 | ) | (42,012 | ) | ||||
Distributions
in excess of equity in earnings of unconsolidated
affiliates
|
24,861 | 45,464 | ||||||
Changes
in other assets
|
(2,366 | ) | 15,439 | |||||
Net
cash used in investing activities
|
(43,099 | ) | (86,406 | ) |
The
accompanying notes are an integral part of these statements.
8
CBL
& Associates Properties, Inc.
Condensed
Consolidated Statements of Cash Flows
(In
thousands)
(Unaudited)
(Continued)
Six Months Ended June 30,
|
||||||||
2010
|
2009
|
|||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds
from mortgage and other indebtedness
|
$ | 371,323 | $ | 347,017 | ||||
Principal
payments on mortgage and other indebtedness
|
(528,867 | ) | (750,349 | ) | ||||
Additions
to deferred financing costs
|
(2,343 | ) | (4,075 | ) | ||||
Proceeds
from issuances of common stock
|
62 | 381,686 | ||||||
Proceeds
from issuances of preferred stock
|
121,268 | - | ||||||
Proceeds
from exercises of stock options
|
942 | - | ||||||
Income
tax effect of share-based compensation
|
1,815 | - | ||||||
Purchase
of noncontrolling interests in other consolidated
subsidiary
|
- | (500 | ) | |||||
Distributions
to noncontrolling interests
|
(41,550 | ) | (41,349 | ) | ||||
Dividends
paid to holders of preferred stock
|
(14,386 | ) | (10,909 | ) | ||||
Dividends
paid to common shareholders
|
(34,498 | ) | (34,405 | ) | ||||
Net
cash used in financing activities
|
(126,234 | ) | (112,884 | ) | ||||
EFFECT
OF FOREIGN EXCHANGE RATE CHANGES ON CASH
|
- | (293 | ) | |||||
NET
CHANGE IN CASH AND CASH EQUIVALENTS
|
12,587 | (438 | ) | |||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
48,062 | 51,227 | ||||||
CASH
AND CASH EQUIVALENTS, end of period
|
$ | 60,649 | $ | 50,789 | ||||
SUPPLEMENTAL
INFORMATION:
|
||||||||
Cash
paid for interest, net of amounts capitalized
|
$ | 142,088 | $ | 148,309 |
The
accompanying notes are an integral part of these statements.
9
CBL
& Associates Properties, Inc.
(In
thousands, except per share data)
Note
1 – Organization and Basis of Presentation
CBL &
Associates Properties, Inc. (“CBL”), a Delaware corporation, is a self-managed,
self-administered, fully integrated real estate investment trust (“REIT”) that
is engaged in the ownership, development, acquisition, leasing, management and
operation of regional shopping malls, open-air centers, community centers and
office properties. Its shopping center properties are located in 27
states, but are primarily in the southeastern and midwestern United
States.
CBL
conducts substantially all of its business through CBL & Associates Limited
Partnership (the “Operating Partnership”).At June 30, 2010, the Operating
Partnership owned controlling interests in 76 regional malls/open-air centers
(including one mixed-use center), 30 associated centers (each located adjacent
to a regional mall), ten community centers, and 13 office buildings, including
CBL’s corporate office building. The Operating Partnership consolidates the
financial statements of all entities in which it has a controlling financial
interest or where it is the primary beneficiary of a variable interest
entity. At June 30, 2010, the Operating Partnership owned
non-controlling interests in eight regional malls, four associated centers, four
community centers and six office buildings. Because one or more of the other
partners have substantive participating rights, the Operating Partnership does
not control these partnerships and joint ventures and, accordingly, accounts for
these investments using the equity method. The Operating Partnership
had a controlling interest in one community center, owned in a 75/25 joint
venture that was under construction at June 30, 2010. The Operating
Partnership also holds options to acquire certain development properties owned
by third parties.
CBL is
the 100% owner of two qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL
Holdings II, Inc. At June 30, 2010, CBL Holdings I, Inc., the sole general
partner of the Operating Partnership, owned a 1.1% general partner interest in
the Operating Partnership and CBL Holdings II, Inc. owned a 71.6% limited
partner interest for a combined interest held by CBL of 72.7%.
The
noncontrolling interest in the Operating Partnership is held primarily by CBL
& Associates, Inc. and its affiliates (collectively “CBL’s Predecessor”) and
by affiliates of The Richard E. Jacobs Group, Inc. (“Jacobs”). CBL’s Predecessor
contributed their interests in certain real estate properties and joint ventures
to the Operating Partnership in exchange for a limited partner interest when the
Operating Partnership was formed in November 1993. Jacobs contributed their
interests in certain real estate properties and joint ventures to the Operating
Partnership in exchange for limited partner interests when the Operating
Partnership acquired the majority of Jacobs’ interests in 23 properties in
January 2001 and the balance of such interests in February 2002. At June 30,
2010, CBL’s Predecessor owned a 9.8% limited partner interest, Jacobs owned a
12.1% limited partner interest and third parties owned a 5.4% limited partner
interest in the Operating Partnership. CBL’s Predecessor also owned
7.3 million shares of CBL’s common stock at June 30, 2010, for a total combined
effective interest of 13.6% in the Operating Partnership.
The
Operating Partnership conducts CBL’s property management and development
activities through CBL & Associates Management, Inc. (the “Management
Company”) to comply with certain requirements of the Internal Revenue Code of
1986, as amended (the “Code”). The Operating Partnership owns 100% of both of
the Management Company’s preferred stock and common stock.
CBL, the
Operating Partnership and the Management Company are collectively referred to
herein as “the Company”.
The
accompanying condensed consolidated financial statements are unaudited; however,
they have been prepared in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) for interim financial
information and in conjunction with the rules and regulations of the Securities
and Exchange Commission. Accordingly, they do not include all of the disclosures
required by GAAP for complete financial statements. In the opinion of
management, all adjustments (consisting solely of normal recurring matters)
necessary for a fair presentation of the financial statements for these interim
periods have been included. Material
10
In April
2009, the Company paid its first quarter dividend on its common stock of $0.37
per share in cash and shares of common stock. The Company issued
4,754,355 shares of its common stock in connection with the dividend, which
resulted in an increase of approximately 7.2% in the number of shares
outstanding. The Company elected to treat the issuance of its common
stock as a stock dividend for earnings per share (“EPS”) purposes pursuant to
accounting guidance that was in effect at that time. Therefore, all
share and per share information related to EPS was adjusted proportionately to
reflect the additional common stock issued on a retrospective
basis. However, in January 2010, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-01, Accounting for Stock Dividends,
Including Distributions to Shareholders with Components of Stock and Cash
(“ASU 2010-01”) requiring that stock dividends such as the one the Company made
in April 2009 be treated as a stock issuance that is reflected in share and per
share information related to EPS on a prospective basis. Pursuant to
the provisions of ASU 2010-01, the Company adopted this guidance on a
retrospective basis. Thus, the share and per share information
related to EPS for the three and six months ended June 30, 2009 as previously
presented in the Company’s Form 10-Q for the quarterly period ended June 30,
2009, has been revised herein to reflect this adoption.
The
Company has evaluated subsequent events through the date of issuance of these
financial statements.
These
condensed consolidated financial statements should be read in conjunction with
CBL’s audited consolidated financial statements and notes thereto included in
its Annual Report on Form 10-K for the year ended December 31, 2009, filed on
February 22, 2010, as amended.
Note 2 – New Accounting Guidance
Effective
January 1, 2010, the Company adopted ASU No. 2010-06, Fair Value Measurements and
Disclosures: Improving Disclosures about Fair Value Measurements (“ASU
2010-06”). ASU 2010-06 provides that significant transfers in or out
of measurements classified as Levels 1 or 2 should be disclosed separately along
with reasons for the transfers. Information regarding purchases,
sales, issuances and settlements related to measurements classified as Level 3
are also to be presented separately. Existing disclosures have been
updated to include fair value measurement disclosures for each class of assets
and liabilities and information regarding the valuation techniques and inputs
used to measure fair value in measurements classified as either Levels 2 or
3. The guidance was effective for fiscal years beginning after
December 15, 2009 excluding the provision relating to the rollforward of Level 3
activity which has been deferred until January 1, 2011. The adoption
did not have an impact on the Company’s condensed consolidated financial
statements.
Effective
January 1, 2010, the Company adopted ASU No. 2009-16, Transfers and Servicing: Accounting
for Transfers of Financial Assets (“ASU 2009-16”). The
guidance eliminates the concept of a “qualifying special-purpose entity,”
changes the requirements for derecognizing financial assets and requires
additional related disclosures. The adoption did not have an impact
on the Company’s condensed consolidated financial statements.
Effective
January 1, 2010, the Company adopted ASU No. 2009-17, Consolidations: Improvements to
Financial Reporting by Enterprises Involved with Variable Interest Entities
(“ASU 2009-17”). ASU 2009-17 modifies how a company determines
when an entity that is insufficiently capitalized or is not controlled through
voting, or similar, rights should be consolidated. The guidance
clarifies that the determination of whether a company is required to consolidate
an entity is based on, among other things, an entity’s purpose and design and a
company’s ability to direct the activities of the entity that most significantly
impact the entity’s economic performance. This guidance requires an
ongoing reassessment of whether a company is the primary beneficiary of a
variable interest entity. It also requires additional disclosure
about a company’s involvement in variable interest entities and any significant
changes in risk exposure due to that involvement. The adoption did
not have an impact on the Company’s condensed consolidated financial
statements.
On
February 24, 2010, the FASB issued ASU No. 2010-09, Subsequent Events: Amendments to
Certain Recognition and Disclosure Requirements (“ASU
2010-09”). ASU 2010-09 amends the disclosure provision related to
subsequent events by removing the requirement for an SEC filer to disclose a
date through which
11
Note 3 – Fair Value Measurements
The
Company has categorized its financial assets and financial liabilities that are
recorded at fair value into a hierarchy based on whether the inputs to valuation
techniques are observable or unobservable. The fair value hierarchy
contains three levels of inputs that may be used to measure fair value as
follows:
Level 1 –
Inputs represent quoted prices in active markets for identical assets and
liabilities as of the measurement date.
Level 2 –
Inputs, other than those included in Level 1, represent observable measurements
for similar instruments in active markets, or identical or similar instruments
in markets that are not active, and observable measurements or market data for
instruments with substantially the full term of the asset or
liability.
Level 3 –
Inputs represent unobservable measurements, supported by little, if any, market
activity, and require considerable assumptions that are significant to the fair
value of the asset or liability. Market valuations must often be
determined using discounted cash flow methodologies, pricing models or similar
techniques based on the Company’s assumptions and best judgment.
The
following tables set forth information regarding the Company’s financial
instruments that are measured at fair value in the condensed consolidated
balance sheets as of June 30, 2010 and December 31, 2009:
Fair
Value Measurements at Reporting Date Using
|
||||||||||||||||
Fair
Value at
June
30, 2010
|
Quoted
Prices
in
Active
Markets
for
Identical
Assets
(Level
1)
|
Significant
Other
Observable
Inputs
(Level
2)
|
Significant
Unobservable
Inputs
(Level
3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale
securities
|
$ | 8,935 | $ | 8,935 | $ | - | $ | - | ||||||||
Privately
held debt and equity securities
|
2,475 | - | - | 2,475 | ||||||||||||
Interest
rate caps
|
21 | - | 21 | - | ||||||||||||
Liabilities:
|
||||||||||||||||
Interest
rate swaps
|
$ | 1,197 | $ | - | $ | 1,197 | $ | - |
Fair
Value Measurements at Reporting Date Using
|
||||||||||||||||
Fair
Value at
December
31, 2009
|
Quoted
Prices
in
Active
Markets
for
Identical
Assets
(Level
1)
|
Significant
Other
Observable
Inputs
(Level
2)
|
Significant
Unobservable
Inputs
(Level
3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale
securities
|
$ | 4,039 | $ | 4,039 | $ | - | $ | - | ||||||||
Privately
held debt and equity securities
|
2,475 | - | - | 2,475 | ||||||||||||
Interest
rate cap
|
2 | - | 2 | - | ||||||||||||
Liabilities:
|
||||||||||||||||
Interest
rate swaps
|
$ | 2,907 | $ | - | $ | 2,907 | $ | - |
Intangible
lease assets and other assets in the condensed consolidated balance sheets
include marketable securities consisting of corporate equity securities that are
classified as available for sale. Net unrealized gains and losses on
available-for-sale securities that are deemed to be temporary in nature are
recorded as a component of accumulated other comprehensive income in redeemable
noncontrolling interests, shareholders’ equity and
12
Gross
Unrealized
|
||||||||||||||||
Adjusted
Cost
|
Gains
|
Losses
|
Fair
Value
|
|||||||||||||
June
30, 2010
|
$ | 4,207 | $ | 4,732 | $ | 4 | $ | 8,935 | ||||||||
December
31, 2009
|
$ | 4,207 | $ | - | $ | 168 | $ | 4,039 |
The
Company holds a secured convertible promissory note from, and a warrant to
acquire shares of, Jinsheng Group (“Jinsheng”), in which the Company also holds
a cost-method investment. The secured convertible note is
non-interest bearing and is secured by shares of Jinsheng. Since the
secured convertible note is non-interest bearing and there is no active market
for Jinsheng’s debt, the Company performed an analysis on the note considering
credit risk and discounting factors to determine the fair value. The
warrant was initially valued using estimated share price and volatility
variables in a Black Scholes model. Due to the significant estimates
and assumptions used in the valuation of the note and warrant, the Company has
classified these under Level 3. As part of its investment review as
of March 31, 2009, the Company determined that its investment in Jinsheng was
impaired on an other than temporary basis due to a decline in expected future
cash flows as a result of declining occupancy and sales related to the then
downturn of the real estate market in China. An impairment charge of
$2,400 was recorded in the Company’s condensed consolidated statement of
operations for the six month period ended June 30, 2009, to reduce the carrying
values of the secured convertible note and warrant to their estimated fair
values. The Company performed qualitative and quantitative analyses
of its investment as of June 30, 2010 and determined that the current balance of
the secured convertible note and warrant of $2,475 is not
impaired. See Note 4 for further
discussion.
The
Company uses interest rate swaps to mitigate the effect of interest rate
movements on its variable-rate debt. The Company currently has two
interest rate swaps included in accounts payable and accrued liabilities and two
interest rate caps included in intangible lease assets and other assets in the
accompanying condensed consolidated balance sheets that qualify as hedging
instruments and are designated as cash flow hedges. The swaps and
caps have predominantly met the effectiveness test criteria since inception and
changes in their fair values are, thus, primarily reported in other
comprehensive income and are reclassified into earnings in the same period or
periods during which the hedged items affect earnings. The fair
values of the Company’s interest rate hedge instruments, classified under Level
2, are determined using a proprietary model which is based on prevailing market
data for contracts with matching durations, current and anticipated London
Interbank Offered Rate (“LIBOR”) information, consideration of the Company’s
credit standing, credit risk of the counterparties and reasonable estimates
about relevant future market conditions. See Note 5 for further
information regarding the Company’s interest rate hedging activity.
The
carrying values of cash and cash equivalents, receivables, accounts payable and
accrued liabilities are reasonable estimates of their fair values because of the
short-term nature of these financial instruments. Based on the
interest rates for similar financial instruments, the carrying value of mortgage
notes receivable is a reasonable estimate of fair value. The
estimated fair value of mortgage and other indebtedness was $5,823,793 and
$5,830,722 at June 30, 2010 and December 31, 2009, respectively. The
estimated fair value was calculated by discounting future cash flows for the
notes payable using estimated market rates at which similar loans would be made
currently.
13
The
following table sets forth information regarding the Company’s assets that are
measured at fair value on a nonrecurring basis:
Fair
Value Measurements at Reporting Date Using
|
||||||||||||||||||||
Fair
Value at
June
30, 2010
|
Quoted
Prices
in
Active
Markets
for
Identical
Assets
(Level
1)
|
Significant
Other
Observable
Inputs
(Level
2)
|
Significant
Unobservable
Inputs
(Level
3)
|
Total
Loss
|
||||||||||||||||
Assets:
|
||||||||||||||||||||
Long-lived
assets
|
$ | 11,969 | $ | - | $ | - | $ | 11,969 | $ | 25,435 |
The
Company evaluates the carrying value of long-lived assets to be held and used
when events or changes in circumstances warrant such a review. The carrying
value of a long-lived asset is considered impaired when its estimated future
undiscounted cash flows are less than its carrying value. If it is determined
that impairment has occurred, the amount of the impairment charge is equal to
the excess of the asset’s carrying value over its estimated fair value. The
Company’s estimates of undiscounted cash flows expected to be generated by each
property are based on a number of assumptions such as leasing expectations,
operating budgets, estimated useful lives, future maintenance expenditures,
intent to hold for use and capitalization rates. These assumptions
are subject to economic and market uncertainties including, but not limited to,
demand for space, competition for tenants, changes in market rental rates and
costs to operate each property. As these factors are difficult to predict and
are subject to future events that may alter the assumptions used, the future
cash flows estimated in the Company’s impairment analyses may not be
achieved.
During
the course of the Company’s normal quarterly impairment review process for the
second quarter of 2010, it was determined that a write-down of the depreciated
book value of Oak Hollow Mall in High Point, NC, to its estimated fair value was
necessary, resulting in a non-cash loss on impairment of real estate assets of
$25,435 for the three and six months ended June 30, 2010. Subsequent
to June 30, 2010, the Company entered into a contract to sell this property,
subject to due diligence and customary closing conditions, for a sales price
that is significantly less than the property’s carrying value. The
impending sale was considered in the quarterly impairment review process, which
resulted in a fair value of $11,578. If the sale of this property
closes in accordance with the terms of the current contract, the lender of the
non-recourse loan secured by this property with a principal balance of $39,559
as of June 30, 2010 has agreed to modify the outstanding principal balance of
the loan to equal the net sales price of the property. See Note 9 for additional information.
The
revenues of Oak Hollow Mall accounted for approximately 0.4% of total
consolidated revenues for the trailing twelve months ended June 30,
2010. A reconciliation of the property’s carrying values for the six
months ended June 30, 2010 is as follows:
Oak
Hollow
Mall
|
||||
Beginning
carrying value, January 1, 2010
|
$ | 37,287 | ||
Capital
expenditures
|
512 | |||
Depreciation
expense
|
(786 | ) | ||
Loss
on impairment of real estate
|
(25,435 | ) | ||
Ending
carrying value, June 30, 2010
|
$ | 11,578 |
14
Note 4 – Unconsolidated Affiliates, Noncontrolling Interests and
Cost Method Investments
Unconsolidated
Affiliates
At June
30, 2010, the Company had investments in the following 20 entities, which are
accounted for using the equity method of accounting:
Joint
Venture
|
Property
Name
|
Company's
Interest
|
|||||
CBL-TRS
Joint Venture, LLC
|
Friendly
Center, The Shops at Friendly Center and a portfolio of six office
buildings
|
50.0 | % | ||||
CBL-TRS
Joint Venture II, LLC
|
Renaissance
Center
|
50.0 | % | ||||
Governor’s
Square IB
|
Governor’s
Plaza
|
50.0 | % | ||||
Governor’s
Square Company
|
Governor’s
Square
|
47.5 | % | ||||
High
Pointe Commons, LP
|
High
Pointe Commons
|
50.0 | % | ||||
High
Pointe Commons II-HAP, LP
|
High
Pointe Commons - Christmas Tree Shop
|
50.0 | % | ||||
Imperial
Valley Mall L.P.
|
Imperial
Valley Mall
|
60.0 | % | ||||
Imperial
Valley Peripheral L.P.
|
Imperial
Valley Mall (vacant land)
|
60.0 | % | ||||
JG
Gulf Coast Town Center LLC
|
Gulf
Coast Town Center
|
50.0 | % | ||||
Kentucky
Oaks Mall Company
|
Kentucky
Oaks Mall
|
50.0 | % | ||||
Mall
of South Carolina L.P.
|
Coastal
Grand—Myrtle Beach
|
50.0 | % | ||||
Mall
of South Carolina Outparcel L.P.
|
Coastal
Grand—Myrtle Beach (vacant land)
|
50.0 | % | ||||
Mall
Shopping Center Company
|
Plaza
del Sol (1)
|
50.6 | % | ||||
Parkway
Place L.P.
|
Parkway
Place
|
50.0 | % | ||||
Port
Orange I, LLC
|
The
Pavilion at Port Orange Phase I
|
50.0 | % | ||||
Port
Orange II, LLC
|
The
Pavilion at Port Orange Phase II
|
50.0 | % | ||||
Triangle
Town Member LLC
|
Triangle
Town Center, Triangle Town Commons and Triangle Town Place
|
50.0 | % | ||||
West
Melbourne I, LLC
|
Hammock
Landing Phase I
|
50.0 | % | ||||
West
Melbourne II, LLC
|
Hammock
Landing Phase II
|
50.0 | % | ||||
York
Town Center, LP
|
York
Town Center
|
50.0 | % |
(1) | Plaza del Sol was sold in June 2010. |
Although
the Company has majority ownership of certain of these joint ventures, it has
evaluated these investments and concluded that the other partners or owners in
these joint ventures have substantive participating rights, such as approvals
of:
·
|
the
pro forma for the development and construction of the project and any
material deviations or modifications
thereto;
|
·
|
the
site plan and any material deviations or modifications
thereto;
|
·
|
the
conceptual design of the project and the initial plans and specifications
for the project and any material deviations or modifications
thereto;
|
·
|
any
acquisition/construction loans or any permanent
financings/refinancings;
|
·
|
the
annual operating budgets and any material deviations or modifications
thereto;
|
·
|
the
initial leasing plan and leasing parameters and any material deviations or
modifications thereto; and
|
·
|
any
material acquisitions or dispositions with respect to the
project.
|
As a
result of the joint control over these joint ventures, the Company accounts for
these investments using the equity method of accounting.
15
Condensed
combined financial statement information for the unconsolidated affiliates is as
follows:
Total
for the Three
Months
Ended June 30,
|
Company's
Share for the Three
Months
Ended June 30,
|
|||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues
|
$ | 38,331 | $ | 39,940 | $ | 21,686 | $ | 22,817 | ||||||||
Depreciation
and amortization expense
|
(14,286 | ) | (13,071 | ) | (8,403 | ) | (7,471 | ) | ||||||||
Interest
expense
|
(13,858 | ) | (12,691 | ) | (8,449 | ) | (7,426 | ) | ||||||||
Other
operating expenses
|
(11,295 | ) | (13,490 | ) | (4,647 | ) | (7,942 | ) | ||||||||
Gain
on sales of real estate assets
|
1,412 | 701 | 170 | 82 | ||||||||||||
Operating
income of discontinued operations
|
103 | 4 | 52 | 2 | ||||||||||||
Net
income
|
$ | 407 | $ | 1,393 | $ | 409 | $ | 62 |
Total
for the Six
Months
Ended June 30,
|
Company's
Share for the Six
Months
Ended June 30,
|
|||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues
|
$ | 77,373 | $ | 81,096 | $ | 42,311 | $ | 47,343 | ||||||||
Depreciation
and amortization expense
|
(27,244 | ) | (25,539 | ) | (15,205 | ) | (14,895 | ) | ||||||||
Interest
expense
|
(27,701 | ) | (25,234 | ) | (15,612 | ) | (15,218 | ) | ||||||||
Other
operating expenses
|
(23,627 | ) | (27,045 | ) | (10,753 | ) | (16,303 | ) | ||||||||
Gain
on sales of real estate assets
|
1,290 | 1,689 | 121 | 646 | ||||||||||||
Operating
income of discontinued operations
|
170 | 46 | 86 | 23 | ||||||||||||
Net
income
|
$ | 261 | $ | 5,013 | $ | 948 | $ | 1,596 |
Mall
Shopping Center Company
In June
2010, the Company’s 50.6% owned unconsolidated joint venture, Mall Shopping
Center Company, sold Plaza del Sol in Del Rio, TX. The joint venture
recognized a gain of $1,244 from the sale, of which the Company’s share was $75,
net of the excess of its basis over its underlying equity in the amount of
$554. The results of operations of Mall Shopping Center Company have
been reclassified to discontinued operations in the tables above for all periods
presented.
CBL
Macapa
In
September 2008, the Company entered into a condominium partnership agreement
with several individual investors to acquire a 60% interest in a new retail
development in Macapa, Brazil. The Company provided total funding of
$1,189 related to the development. In December 2009, the Company
entered into an agreement to sell its 60% interest in this partnership with one
of the condominium partnership’s investors for a gross sales price of $1,263,
less closing costs for a net sales price of $1,201. The sale closed
in March 2010. Upon closing, the buyer paid $200 and gave the Company
two notes receivable totaling $1,001, both with an interest rate of 10%, for the
remaining balance of the purchase price. There was no gain or loss on
this sale. On April 22, 2010, the buyer paid the first note of $300,
due on April 23, 2010, plus applicable interest. Upon maturity of the
second note of $701, due on June 8, 2010, the buyer requested additional time
for payment. The Company and buyer have agreed to revised terms
regarding the second note of which the buyer will pay monthly installments of
$45 from July 2010 to June 2011, with a final balloon installment of $161 due in
July 2011. Interest on the revised note is payable at
maturity.Noncontrolling
Interests
Noncontrolling
interests includes the aggregate noncontrolling partnership interest in the
Operating Partnership that is not owned by the Company and for which each of the
noncontrolling limited partners has the right to exchange all or a portion of
its partnership interests for shares of the Company’s common stock, or at the
Company’s election, their cash equivalent. Noncontrolling interests
also includes the aggregate noncontrolling ownership interest in the Company’s
other consolidated subsidiaries that is held by third parties and for which the
related partnership agreements either do not include redemption
16
provisions
or are subject to redemption provisions that do not require classification
outside of permanent equity. As of June 30, 2010, the total
noncontrolling interests of $284,616 consisted of third-party interests in the
Operating Partnership and in other consolidated subsidiaries of $283,737 and
$879, respectively. The total noncontrolling interests at December
31, 2009 of $302,483 consisted of third-party interests in the Operating
Partnership and in other consolidated subsidiaries of $301,808 and $675,
respectively.
Redeemable
noncontrolling interests includes a noncontrolling partnership interest in the
Operating Partnership that is not owned by the Company and for which the
partnership agreement includes redemption provisions that may require the
Company to redeem the partnership interest for real
property. Redeemable noncontrolling interests also includes the
aggregate noncontrolling ownership interest in other consolidated subsidiaries
that is held by third parties and for which the related partnership agreements
contain redemption provisions at the holder’s election that allow for redemption
through cash and/or properties. The total redeemable noncontrolling
partnership interests of $25,933 as of June 30, 2010 consisted of third-party
interests in the Operating Partnership and in the Company’s consolidated
subsidiary that provides security and maintenance services to third parties of
$19,461 and $6,472, respectively. At December 31, 2009, the total
redeemable noncontrolling partnership interests of $22,689 consisted of
third-party interests in the Operating Partnership and in the Company’s
consolidated security and maintenance services subsidiary of $16,194 and $6,495,
respectively.
The
redeemable noncontrolling preferred joint venture interest includes the
preferred joint venture units (“PJV units”) issued to the Westfield Group
(“Westfield”) for the acquisition of certain properties during
2007. See Note 9 for additional information
related to the PJV units. Activity related to the redeemable
noncontrolling preferred joint venture interest represented by the PJV units is
as follows:
Six
Months Ended
June
30,
|
||||||||
2010
|
2009
|
|||||||
Beginning
Balance
|
$ | 421,570 | $ | 421,279 | ||||
Net
income attributable to redeemable noncontrolling
preferred
joint venture interest
|
10,217 | 10,343 | ||||||
Distributions
to redeemable noncontrolling preferred
joint
venture interest
|
(10,225 | ) | (10,165 | ) | ||||
Ending
|