Delaware | 27-2963337 | |
(State or other jurisdiction of incorporating or organization) | (I.R.S. Employer Identification Number) | |
110 N. Wacker Dr., Chicago, IL | 60606 | |
(Address of principal executive offices) | (Zip Code) | |
(312) 960-5000 | ||
(Registrant’s telephone number, including area code) |
ý | Large accelerated filer | o | Accelerated filer |
o | Non-accelerated filer (Do not check if a smaller reporting company) | o | Smaller reporting company |
PAGE NUMBER | |||
Part I | FINANCIAL INFORMATION | ||
June 30, 2016 | December 31, 2015 | ||||||
(Dollars in thousands, except share and per share amounts) | |||||||
Assets: | |||||||
Investment in real estate: | |||||||
Land | $ | 3,554,471 | $ | 3,596,354 | |||
Buildings and equipment | 16,228,837 | 16,379,789 | |||||
Less accumulated depreciation | (2,605,947 | ) | (2,452,127 | ) | |||
Construction in progress | 311,757 | 308,903 | |||||
Net property and equipment | 17,489,118 | 17,832,919 | |||||
Investment in and loans to/from Unconsolidated Real Estate Affiliates | 3,609,486 | 3,506,040 | |||||
Net investment in real estate | 21,098,604 | 21,338,959 | |||||
Cash and cash equivalents | 226,283 | 356,895 | |||||
Accounts and notes receivable, net | 969,924 | 949,556 | |||||
Deferred expenses, net | 214,182 | 214,578 | |||||
Prepaid expenses and other assets | 952,535 | 997,334 | |||||
Assets held for disposition | 131,956 | 216,233 | |||||
Total assets | $ | 23,593,484 | $ | 24,073,555 | |||
Liabilities: | |||||||
Mortgages, notes and loans payable | $ | 13,714,730 | $ | 14,216,160 | |||
Investment in Unconsolidated Real Estate Affiliates | 39,160 | 38,488 | |||||
Accounts payable and accrued expenses | 682,925 | 784,493 | |||||
Dividend payable | 175,560 | 172,070 | |||||
Deferred tax liabilities | 1,642 | 1,289 | |||||
Junior subordinated notes | 206,200 | 206,200 | |||||
Liabilities held for disposition | 114,544 | 58,934 | |||||
Total liabilities | 14,934,761 | 15,477,634 | |||||
Redeemable noncontrolling interests: | |||||||
Preferred | 168,083 | 157,903 | |||||
Common | 142,167 | 129,724 | |||||
Total redeemable noncontrolling interests | 310,250 | 287,627 | |||||
Commitments and Contingencies | — | — | |||||
Equity: | |||||||
Common stock: | |||||||
11,000,000,000 shares authorized, $0.01 par value, 968,056,504 issued, 884,627,919 outstanding as of June 30, 2016, and 966,096,656 issued, 882,397,202 outstanding as of December 31, 2015 | 9,406 | 9,386 | |||||
Preferred Stock: | |||||||
500,000,000 shares authorized, $0.01 par value, 10,000,000 shares issued and outstanding as of June 30, 2016 and December 31, 2015 | 242,042 | 242,042 | |||||
Additional paid-in capital | 11,358,088 | 11,362,369 | |||||
Retained earnings (accumulated deficit) | (2,111,939 | ) | (2,141,549 | ) | |||
Accumulated other comprehensive loss | (69,131 | ) | (72,804 | ) | |||
Common stock in treasury, at cost, 55,969,390 shares as of June 30, 2016 and 56,240,259 shares as of December 31, 2015 | (1,122,628 | ) | (1,129,401 | ) | |||
Total stockholders’ equity | 8,305,838 | 8,270,043 | |||||
Noncontrolling interests in consolidated real estate affiliates | 20,448 | 24,712 | |||||
Noncontrolling interests related to long-term incentive plan common units | 22,187 | 13,539 | |||||
Total equity | 8,348,473 | 8,308,294 | |||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 23,593,484 | $ | 24,073,555 |
GENERAL GROWTH PROPERTIES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Dollars in thousands, except share and per share amounts) | |||||||||||||||
Revenues: | |||||||||||||||
Minimum rents | $ | 363,412 | $ | 361,556 | $ | 734,544 | $ | 735,669 | |||||||
Tenant recoveries | 169,763 | 168,043 | 342,211 | 345,525 | |||||||||||
Overage rents | 4,375 | 3,485 | 12,519 | 12,300 | |||||||||||
Management fees and other corporate revenues | 18,917 | 26,731 | 52,659 | 45,817 | |||||||||||
Other | 18,119 | 20,166 | 39,685 | 34,814 | |||||||||||
Total revenues | 574,586 | 579,981 | 1,181,618 | 1,174,125 | |||||||||||
Expenses: | |||||||||||||||
Real estate taxes | 57,309 | 56,496 | 115,412 | 112,483 | |||||||||||
Property maintenance costs | 11,955 | 12,903 | 29,438 | 32,784 | |||||||||||
Marketing | 2,738 | 3,754 | 4,792 | 8,576 | |||||||||||
Other property operating costs | 71,601 | 72,427 | 141,995 | 148,609 | |||||||||||
Provision for doubtful accounts | 1,710 | 1,306 | 5,111 | 4,577 | |||||||||||
Provision for loan loss | — | — | 36,069 | — | |||||||||||
Property management and other costs | 38,282 | 40,369 | 69,027 | 83,162 | |||||||||||
General and administrative | 14,650 | 12,322 | 28,076 | 24,769 | |||||||||||
Provision for impairment | 4,058 | — | 44,763 | — | |||||||||||
Depreciation and amortization | 156,248 | 152,849 | 316,919 | 328,797 | |||||||||||
Total expenses | 358,551 | 352,426 | 791,602 | 743,757 | |||||||||||
Operating income | 216,035 | 227,555 | 390,016 | 430,368 | |||||||||||
Interest and dividend income | 13,335 | 12,843 | 29,393 | 21,664 | |||||||||||
Interest expense | (148,366 | ) | (142,747 | ) | (296,043 | ) | (315,398 | ) | |||||||
Gain (loss) on foreign currency | 7,893 | 1,463 | 16,829 | (21,448 | ) | ||||||||||
Gain from changes in control of investment properties and other | 38,553 | 17,768 | 113,108 | 609,013 | |||||||||||
Income before income taxes, equity in income of Unconsolidated Real Estate Affiliates and allocation to noncontrolling interests | 127,450 | 116,882 | 253,303 | 724,199 | |||||||||||
Benefit from (provision for) income taxes | 2,242 | (74 | ) | (679 | ) | 11,085 | |||||||||
Equity in income of Unconsolidated Real Estate Affiliates | 34,618 | 13,278 | 92,108 | 24,530 | |||||||||||
Unconsolidated Real Estate Affiliates - gain on investment | 25,591 | 297,767 | 40,506 | 309,787 | |||||||||||
Net income | 189,901 | 427,853 | 385,238 | 1,069,601 | |||||||||||
Allocation to noncontrolling interests | (3,956 | ) | (5,913 | ) | (7,513 | ) | (12,932 | ) | |||||||
Net income attributable to General Growth Properties, Inc. | 185,945 | 421,940 | 377,725 | 1,056,669 | |||||||||||
Preferred Stock dividends | (3,983 | ) | (3,984 | ) | (7,967 | ) | (7,968 | ) | |||||||
Net income attributable to common stockholders | $ | 181,962 | $ | 417,956 | $ | 369,758 | $ | 1,048,701 | |||||||
Earnings Per Share: | |||||||||||||||
Basic | $ | 0.21 | $ | 0.47 | $ | 0.42 | $ | 1.18 | |||||||
Diluted | $ | 0.19 | $ | 0.44 | 0.39 | 1.10 | |||||||||
Dividends declared per share | $ | 0.19 | $ | 0.17 | $ | 0.38 | $ | 0.34 | |||||||
GENERAL GROWTH PROPERTIES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Continued) (UNAUDITED) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Dollars in thousands, except share and per share amounts) | |||||||||||||||
Comprehensive Income, Net: | |||||||||||||||
Net income | $ | 189,901 | $ | 427,853 | $ | 385,238 | $ | 1,069,601 | |||||||
Other comprehensive income (loss) | |||||||||||||||
Foreign currency translation | 8,673 | 2,912 | 15,634 | (14,806 | ) | ||||||||||
Reclassification adjustment for realized gains on available-for-sale securities included in net income | — | — | (11,978 | ) | — | ||||||||||
Net unrealized gains on other financial instruments | 11 | 21 | 20 | — | |||||||||||
Other comprehensive income (loss) | 8,684 | 2,933 | 3,676 | (14,806 | ) | ||||||||||
Comprehensive income | 198,585 | 430,786 | 388,914 | 1,054,795 | |||||||||||
Comprehensive income allocated to noncontrolling interests | (4,021 | ) | (5,935 | ) | (7,516 | ) | (12,725 | ) | |||||||
Comprehensive income attributable to General Growth Properties, Inc. | 194,564 | 424,851 | 381,398 | 1,042,070 | |||||||||||
Preferred Stock dividends | (3,983 | ) | (3,984 | ) | (7,967 | ) | (7,968 | ) | |||||||
Comprehensive income, net, attributable to common stockholders | $ | 190,581 | $ | 420,867 | $ | 373,431 | $ | 1,034,102 |
GENERAL GROWTH PROPERTIES, INC. CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) | |||||||||||||||||||||||||||||||
Common Stock | Preferred Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Common Stock in Treasury | Noncontrolling Interests in Consolidated Real Estate Affiliates and Long Term Incentive Plan Common Units | Total Equity | ||||||||||||||||||||||||
(Dollars in thousands, except for share amounts) | |||||||||||||||||||||||||||||||
Balance at January 1, 2015 | $ | 9,409 | $ | 242,042 | $ | 11,351,625 | $ | (2,822,740 | ) | $ | (51,753 | ) | $ | (1,122,664 | ) | $ | 79,601 | $ | 7,685,520 | ||||||||||||
Net income | 1,056,669 | 2,746 | 1,059,415 | ||||||||||||||||||||||||||||
Distributions to noncontrolling interests in consolidated Real Estate Affiliates | (52,778 | ) | (52,778 | ) | |||||||||||||||||||||||||||
Long Term Incentive Plan Common Unit grants, net (1,665,896 LTIP Units) | 5,557 | 5,557 | |||||||||||||||||||||||||||||
Restricted stock grants, net (231,926 common shares) | 2 | — | 1,869 | 1,871 | |||||||||||||||||||||||||||
Employee stock purchase program (99,080 common shares) | 1 | 2,226 | 2,227 | ||||||||||||||||||||||||||||
Stock option grants, net of forfeitures (1,046,515 common shares) | 10 | 26,811 | 26,821 | ||||||||||||||||||||||||||||
Treasury stock purchase (650,000 common shares) | (16,902 | ) | (16,902 | ) | |||||||||||||||||||||||||||
Cash dividends reinvested (DRIP) in stock (8,876 common shares) | 248 | 248 | |||||||||||||||||||||||||||||
Other comprehensive loss | (14,599 | ) | (14,599 | ) | |||||||||||||||||||||||||||
Cash distributions declared ($0.34 per share) | (301,280 | ) | (301,280 | ) | |||||||||||||||||||||||||||
Cash distributions on Preferred Stock | (7,968 | ) | (7,968 | ) | |||||||||||||||||||||||||||
Fair value adjustment for noncontrolling interest in Operating Partnership | 25,509 | 25,509 | |||||||||||||||||||||||||||||
Balance at June 30, 2015 | $ | 9,422 | $ | 242,042 | $ | 11,408,288 | $ | (2,075,319 | ) | $ | (66,352 | ) | $ | (1,139,566 | ) | $ | 35,126 | $ | 8,413,641 | ||||||||||||
GENERAL GROWTH PROPERTIES, INC. CONSOLIDATED STATEMENTS OF EQUITY (Continued) (UNAUDITED) | |||||||||||||||||||||||||||||||
Common Stock | Preferred Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Common Stock in Treasury | Noncontrolling Interests in Consolidated Real Estate Affiliates and Long Term Incentive Plan Common Units | Total Equity | ||||||||||||||||||||||||
(Dollars in thousands, except for share amounts) | |||||||||||||||||||||||||||||||
Balance at January 1, 2016 | $ | 9,386 | $ | 242,042 | $ | 11,362,369 | $ | (2,141,549 | ) | $ | (72,804 | ) | $ | (1,129,401 | ) | $ | 38,251 | $ | 8,308,294 | ||||||||||||
Net income | 377,725 | 1,073 | 378,798 | ||||||||||||||||||||||||||||
Distributions to noncontrolling interests in consolidated Real Estate Affiliates | (1,522 | ) | (1,522 | ) | |||||||||||||||||||||||||||
Acquisition/disposition of partner's noncontrolling interests in consolidated Real Estate Affiliates | (16,384 | ) | (2,971 | ) | (19,355 | ) | |||||||||||||||||||||||||
Long Term Incentive Plan Common Unit grants, net (684,216 LTIP Units) | 43 | (950 | ) | 7,804 | 6,897 | ||||||||||||||||||||||||||
Restricted stock grants, net (339,937 common shares) | 3 | — | 1,548 | 1,551 | |||||||||||||||||||||||||||
Employee stock purchase program (87,589 common shares) | 1 | 3,109 | 3,110 | ||||||||||||||||||||||||||||
Stock option grants, net of forfeitures (1,789,201 common shares) | 18 | 34,730 | 34,748 | ||||||||||||||||||||||||||||
Cancellation of repurchased common shares (270,869 common shares) | (2 | ) | (3,415 | ) | (3,356 | ) | 6,773 | — | |||||||||||||||||||||||
Cash dividends reinvested (DRIP) in stock (13,990 common shares) | — | — | 385 | (215 | ) | 170 | |||||||||||||||||||||||||
Other comprehensive income | 15,567 | 15,567 | |||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (11,894 | ) | (11,894 | ) | |||||||||||||||||||||||||||
Cash distributions declared ($0.38 per share) | (335,627 | ) | (335,627 | ) | |||||||||||||||||||||||||||
Cash distributions on Preferred Stock | (7,967 | ) | (7,967 | ) | |||||||||||||||||||||||||||
Fair value adjustment for noncontrolling interest in Operating Partnership | (24,297 | ) | (24,297 | ) | |||||||||||||||||||||||||||
Balance at June 30, 2016 | $ | 9,406 | $ | 242,042 | $ | 11,358,088 | $ | (2,111,939 | ) | $ | (69,131 | ) | $ | (1,122,628 | ) | $ | 42,635 | $ | 8,348,473 |
GENERAL GROWTH PROPERTIES, INC CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||
Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
(Dollars in thousands) | |||||||
Cash Flows provided by Operating Activities: | |||||||
Net income | $ | 385,238 | $ | 1,069,601 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Equity in income of Unconsolidated Real Estate Affiliates | (92,108 | ) | (24,530 | ) | |||
Distributions received from Unconsolidated Real Estate Affiliates | 51,632 | 19,533 | |||||
Provision for doubtful accounts | 5,111 | 4,577 | |||||
Depreciation and amortization | 316,919 | 328,797 | |||||
Amortization/write-off of deferred finance costs | 5,709 | 6,154 | |||||
Accretion/write-off of debt market rate adjustments | (630 | ) | 13,221 | ||||
Amortization of intangibles other than in-place leases | 24,956 | 33,416 | |||||
Straight-line rent amortization | (10,445 | ) | (15,388 | ) | |||
Deferred income taxes | (1,472 | ) | (16,111 | ) | |||
Gain on dispositions, net | (24,001 | ) | (2,174 | ) | |||
Unconsolidated Real Estate Affiliates - gain on investment, net | (40,506 | ) | (309,787 | ) | |||
Gain from changes in control of investment properties and other | (113,108 | ) | (609,013 | ) | |||
Provisions for impairment | 44,763 | — | |||||
Provisions for loan loss | 36,069 | — | |||||
(Gain) loss on foreign currency | (16,829 | ) | 21,448 | ||||
Net changes: | |||||||
Accounts and notes receivable, net | 2,052 | (3,458 | ) | ||||
Prepaid expenses and other assets | (9,280 | ) | 16,580 | ||||
Deferred expenses, net | (20,125 | ) | (22,340 | ) | |||
Restricted cash | 6,789 | 846 | |||||
Accounts payable and accrued expenses | (22,495 | ) | (42,500 | ) | |||
Other, net | 17,881 | 16,623 | |||||
Net cash provided by operating activities | 546,120 | 485,495 | |||||
Cash Flows provided by Investing Activities: | |||||||
Acquisition of real estate and property additions | (70,709 | ) | (341,365 | ) | |||
Development of real estate and property improvements | (233,502 | ) | (335,769 | ) | |||
Loans to joint venture partners | (43,364 | ) | (211,239 | ) | |||
Proceeds from repayment of loans to joint venture partners | 8,755 | — | |||||
Proceeds from sales of investment properties and Unconsolidated Real Estate Affiliates | 390,067 | 1,055,881 | |||||
Contributions to Unconsolidated Real Estate Affiliates | (78,476 | ) | (77,306 | ) | |||
Distributions received from Unconsolidated Real Estate Affiliates in excess of income | 40,682 | 101,399 | |||||
Proceeds from sale of marketable securities | 46,408 | — | |||||
(Increase) decrease in restricted cash | (102 | ) | 869 | ||||
Other, net | 36 | — | |||||
Net cash provided by investing activities | 59,795 | 192,470 | |||||
Cash Flows used in Financing Activities: | |||||||
Proceeds from refinancing/issuance of mortgages, notes and loans payable | 313,479 | 832,440 | |||||
Principal payments on mortgages, notes and loans payable | (694,233 | ) | (1,369,192 | ) | |||
Deferred finance costs | (13,672 | ) | (2,138 | ) | |||
Cash distributions to/acquisitions of noncontrolling interests in consolidated real estate affiliates | (22,609 | ) | (52,778 | ) | |||
Cash distributions paid to common stockholders | (335,505 | ) | (301,043 | ) | |||
Cash distributions reinvested (DRIP) in common stock | 385 | — | |||||
Cash distributions paid to preferred stockholders | (7,967 | ) | (7,968 | ) | |||
Cash distributions and redemptions paid to holders of common units | (2,124 | ) | (713 | ) | |||
Other, net | 25,719 | 26,349 | |||||
Net cash used in financing activities | (736,527 | ) | (875,043 | ) | |||
Net change in cash and cash equivalents | (130,612 | ) | (197,078 | ) | |||
Cash and cash equivalents at beginning of period | 356,895 | 372,471 | |||||
Cash and cash equivalents at end of period | $ | 226,283 | $ | 175,393 |
GENERAL GROWTH PROPERTIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (UNAUDITED) | |||||||
Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
(Dollars in thousands) | |||||||
Supplemental Disclosure of Cash Flow Information: | |||||||
Interest paid | $ | 292,108 | $ | 310,756 | |||
Interest capitalized | 2,599 | 7,063 | |||||
Income taxes paid | 2,348 | 6,291 | |||||
Accrued capital expenditures included in accounts payable and accrued expenses | 117,130 | 94,429 | |||||
Non-Cash acquisition of Treasury Shares | |||||||
Liabilities | — | (16,902 | ) | ||||
Equity | — | 16,902 | |||||
Sale of Ala Moana (Refer to Note 3) |
Years | |
Buildings and improvements | 10 - 45 |
Equipment and fixtures | 3 - 20 |
Tenant improvements | Shorter of useful life or applicable lease term |
Gross Asset | Accumulated Amortization | Net Carrying Amount | |||||||||
As of June 30, 2016 | |||||||||||
Tenant leases: | |||||||||||
In-place value | $ | 348,577 | $ | (230,113 | ) | $ | 118,464 | ||||
As of December 31, 2015 | |||||||||||
Tenant leases: | |||||||||||
In-place value | $ | 409,637 | $ | (264,616 | ) | $ | 145,021 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Amortization/accretion effect on continuing operations | $ | (24,919 | ) | $ | (29,007 | ) | $ | (49,104 | ) | $ | (77,887 | ) |
Year | Amount | |||
2016 Remaining | $ | 41,895 | ||
2017 | 65,508 | |||
2018 | 42,620 | |||
2019 | 25,618 | |||
2020 | 17,545 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Management fees from affiliates | $ | 18,917 | $ | 26,731 | $ | 39,586 | $ | 45,817 | |||||||
Management fee expense | (7,812 | ) | (7,651 | ) | (15,714 | ) | (14,927 | ) | |||||||
Net management fees from affiliates | $ | 11,105 | $ | 19,080 | $ | 23,872 | $ | 30,890 |
• | Level 1 - defined as observable inputs such as quoted prices for identical assets or liabilities in active markets; |
• | Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and |
• | Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
Gain on Sale of Interests in Ala Moana Center | 25.0% | 12.5% | ||||
Total proceeds (net of transaction costs of $6.8 million and $2.5 million, respectively) | $ | 900.2 | $ | 451.0 | ||
Joint venture partner share of debt | 462.5 | 231.3 | ||||
Total consideration | 1,362.7 | 682.3 | ||||
Less: JV partner proportionate share of investment in Ala Moana Center and estimated development costs | (714.0 | ) | (357.9 | ) | ||
Total gain from changes in control of investment properties and other | 648.7 | — | ||||
Total Unconsolidated Real Estate Affiliates - gain on investment | — | 324.4 | ||||
Gain attributable to JV partner proportionate share of investment in Ala Moana Center at closing | 584.4 | 295.9 | ||||
Gain attributable to post-sale development activities through December 31, 2015 | 38.0 | 15.4 | ||||
Gain attributable to post-sale development activities for the six months ended June 30, 2016 | 12.5 | 6.2 | ||||
Estimated future gain from changes in control of investment properties and other | 13.8 | — | ||||
Estimated future Unconsolidated Real Estate Affiliates - gain on investment | $ | — | $ | 6.9 |
Total Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Provisions for impairment | ||||||||||||||
Six Months Ended June 30, 2016 | ||||||||||||||||||
Investments in real estate (1) | $ | 249,300 | $ | — | $ | 131,000 | $ | 118,300 | (44,763 | ) | ||||||||
(1) Refer to Note 2 for more information regarding impairment. |
Unobservable Quantitative Input | Range | |
Discount rates | 9.0% to 11.0% | |
Terminal capitalization rates | 9.0% to 10.0% |
Total Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Provision for loan loss | |||||||||||||||
Six Months Ended June 30, 2016 | |||||||||||||||||||
Notes Receivable | $ | 78,906 | $ | 78,906 | $ | — | $ | — | $ | (36,069 | ) |
June 30, 2016 | December 31, 2015 | |||||||||||||||
Carrying Amount (1) | Estimated Fair Value | Carrying Amount (1) | Estimated Fair Value | |||||||||||||
Fixed-rate debt | $ | 11,639,716 | $ | 12,456,696 | $ | 11,921,302 | $ | 12,247,451 | ||||||||
Variable-rate debt | 2,075,014 | 2,086,355 | 2,294,858 | 2,304,551 | ||||||||||||
$ | 13,714,730 | $ | 14,543,051 | $ | 14,216,160 | $ | 14,552,002 |
December 31, 2015 | ||||||||||||
Fair Value | Cost Basis | Unrealized Gain | ||||||||||
Marketable securities: | ||||||||||||
Seritage Growth Properties | $ | 45,278 | $ | 33,300 | $ | 11,978 |
June 30, 2016 | December 31, 2015 | ||||||
Condensed Combined Balance Sheets - Unconsolidated Real Estate Affiliates | |||||||
Assets: | |||||||
Land | $ | 2,053,290 | $ | 1,949,577 | |||
Buildings and equipment | 12,563,122 | 12,344,045 | |||||
Less accumulated depreciation | (3,303,009 | ) | (3,131,659 | ) | |||
Construction in progress | 575,536 | 828,521 | |||||
Net property and equipment | 11,888,939 | 11,990,484 | |||||
Investment in unconsolidated joint ventures | 457,860 | 421,778 | |||||
Net investment in real estate | 12,346,799 | 12,412,262 | |||||
Cash and cash equivalents | 418,941 | 426,470 | |||||
Accounts and notes receivable, net | 470,259 | 258,589 | |||||
Deferred expenses, net | 256,958 | 239,262 | |||||
Prepaid expenses and other assets | 403,710 | 472,123 | |||||
Total assets | $ | 13,896,667 | $ | 13,808,706 | |||
Liabilities and Owners’ Equity: | \ | ||||||
Mortgages, notes and loans payable | $ | 9,840,881 | $ | 9,812,378 | |||
Accounts payable, accrued expenses and other liabilities | 601,099 | 740,388 | |||||
Cumulative effect of foreign currency translation ("CFCT") | (48,838 | ) | (67,224 | ) | |||
Owners’ equity, excluding CFCT | 3,503,525 | 3,323,164 | |||||
Total liabilities and owners’ equity | $ | 13,896,667 | $ | 13,808,706 | |||
Investment In and Loans To/From Unconsolidated Real Estate Affiliates, Net: | |||||||
Owners’ equity | $ | 3,454,687 | $ | 3,255,940 | |||
Less: joint venture partners’ equity | (1,661,322 | ) | (1,518,581 | ) | |||
Plus: excess investment/basis differences | 1,596,961 | 1,550,193 | |||||
Investment in and loans to/from Unconsolidated Real Estate Affiliates, net (equity method) | 3,390,326 | 3,287,552 | |||||
Investment in and loans to/from Unconsolidated Real Estate Affiliates, net (cost method) | 180,000 | 180,000 | |||||
Investment in and loans to/from Unconsolidated Real Estate Affiliates, net | $ | 3,570,326 | $ | 3,467,552 | |||
Reconciliation - Investment In and Loans To/From Unconsolidated Real Estate Affiliates: | |||||||
Asset - Investment in and loans to/from Unconsolidated Real Estate Affiliates | $ | 3,609,486 | $ | 3,506,040 | |||
Liability - Investment in Unconsolidated Real Estate Affiliates | (39,160 | ) | (38,488 | ) | |||
Investment in and loans to/from Unconsolidated Real Estate Affiliates, net | $ | 3,570,326 | $ | 3,467,552 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Condensed Combined Statements of Income - Unconsolidated Real Estate Affiliates (1) | ||||||||||||||||
Revenues: | ||||||||||||||||
Minimum rents | $ | 263,649 | $ | 259,243 | $ | 521,771 | $ | 483,202 | ||||||||
Tenant recoveries | 112,727 | 110,654 | 228,173 | 208,679 | ||||||||||||
Overage rents | 4,276 | 5,517 | 11,803 | 11,668 | ||||||||||||
Condominium sales | 70,809 | — | 353,646 | — | ||||||||||||
Other | 11,848 | 12,526 | 23,953 | 25,055 | ||||||||||||
Total revenues | 463,309 | 387,940 | 1,139,346 | 728,604 | ||||||||||||
Expenses: | ||||||||||||||||
Real estate taxes | 25,806 | 35,536 | 56,352 | 62,416 | ||||||||||||
Property maintenance costs | 9,355 | 10,348 | 20,349 | 23,003 | ||||||||||||
Marketing | 3,685 | 3,974 | 12,193 | 7,954 | ||||||||||||
Other property operating costs | 51,457 | 50,989 | 101,968 | 98,558 | ||||||||||||
Condominium cost of sales | 51,627 | — | 257,848 | — | ||||||||||||
Provision for doubtful accounts | 5,683 | 927 | 9,414 | 4,264 | ||||||||||||
Property management and other costs (2) | 16,562 | 15,641 | 33,469 | 30,894 | ||||||||||||
General and administrative | 1,023 | 12,407 | 1,295 | 13,521 | ||||||||||||
Depreciation and amortization | 111,578 | 99,991 | 220,859 | 193,913 | ||||||||||||
Total expenses | 276,776 | 229,813 | 713,747 | 434,523 | ||||||||||||
Operating income | 186,533 | 158,127 | 425,599 | 294,081 | ||||||||||||
Interest income | 2,201 | 1,609 | 4,100 | 3,563 | ||||||||||||
Interest expense | (102,896 | ) | (108,688 | ) | (203,915 | ) | (200,985 | ) | ||||||||
Provision for income taxes | (205 | ) | (159 | ) | (374 | ) | (364 | ) | ||||||||
Equity in loss of unconsolidated joint ventures | (1,816 | ) | (302 | ) | (34,253 | ) | (482 | ) | ||||||||
Income from continuing operations | 83,817 | 50,587 | 191,157 | 95,813 | ||||||||||||
Allocation to noncontrolling interests | (42 | ) | (8 | ) | (74 | ) | (17 | ) | ||||||||
Net income attributable to the ventures | $ | 83,775 | $ | 50,579 | $ | 191,083 | $ | 95,796 | ||||||||
Equity In Income of Unconsolidated Real Estate Affiliates: | ||||||||||||||||
Net income attributable to the ventures | $ | 83,775 | $ | 50,579 | $ | 191,083 | $ | 95,796 | ||||||||
Joint venture partners’ share of income | (41,974 | ) | (24,321 | ) | (82,434 | ) | (46,564 | ) | ||||||||
Amortization of capital or basis differences | (7,183 | ) | (12,980 | ) | (16,541 | ) | (24,702 | ) | ||||||||
Equity in income of Unconsolidated Real Estate Affiliates | $ | 34,618 | $ | 13,278 | $ | 92,108 | $ | 24,530 |
June 30, 2016 (1) | Weighted-Average Interest Rate (2) | December 31, 2015 (3) | Weighted-Average Interest Rate (2) | |||||||||||
Fixed-rate debt: | ||||||||||||||
Collateralized mortgages, notes and loans payable (4) | $ | 11,639,716 | 4.43 | % | $ | 11,921,302 | 4.43 | % | ||||||
Total fixed-rate debt | 11,639,716 | 4.43 | % | 11,921,302 | 4.43 | % | ||||||||
Variable-rate debt: | ||||||||||||||
Collateralized mortgages, notes and loans payable (4) | 1,994,892 | 2.27 | % | 1,991,022 | 2.08 | % | ||||||||
Revolving credit facility (5) | 80,122 | 2.01 | % | 303,836 | 1.89 | % | ||||||||
Total variable-rate debt | 2,075,014 | 2.26 | % | 2,294,858 | 2.05 | % | ||||||||
Total Mortgages, notes and loans payable | $ | 13,714,730 | 4.10 | % | $ | 14,216,160 | 4.05 | % | ||||||
Junior subordinated notes | $ | 206,200 | 2.09 | % | $ | 206,200 | 1.77 | % |
June 30, 2016 (1) | Weighted-Average Interest Rate | December 31, 2015 (2) | Weighted-Average Interest Rate | |||||||||||
Unsecured debt: | ||||||||||||||
Revolving credit facility | $ | 90,000 | 2.01 | % | $ | 315,000 | 1.89 | % | ||||||
Total unsecured debt | $ | 90,000 | 2.01 | % | $ | 315,000 | 1.89 | % |
Initial Warrant Holder | Number of Warrants | Initial Exercise Price | |||||
Brookfield - A | 57,500,000 | $ | 10.75 | ||||
Brookfield - B | 16,430,000 | 10.50 | |||||
73,930,000 |
Exercise Price | |||||||||||
Record Date | Issuable Shares | Brookfield - A | Brookfield - B | ||||||||
April 15, 2015 | 87,856,714 | $ | 9.05 | $ | 8.84 | ||||||
July 15, 2015 | 88,433,357 | 8.99 | 8.78 | ||||||||
October 15, 2015 | 89,039,571 | 8.93 | 8.72 | ||||||||
December 15, 2015 | 89,697,535 | 8.86 | 8.66 | ||||||||
April 15, 2016 | 90,288,964 | 8.80 | 8.60 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Distributions to preferred GGPOP units | $ | (2,201 | ) | $ | (2,232 | ) | $ | (4,403 | ) | $ | (4,464 | ) | ||||
Net income allocation to noncontrolling interests in GGPOP from continuing operations (common units) | (1,092 | ) | (2,283 | ) | (2,039 | ) | (5,722 | ) | ||||||||
Net income allocation to noncontrolling interests in GGPOP from continuing operations (LTIP units) | (266 | ) | (887 | ) | (843 | ) | (1,793 | ) | ||||||||
Net income allocated to noncontrolling interest in consolidated real estate affiliates | (397 | ) | (511 | ) | (228 | ) | (953 | ) | ||||||||
Allocation to noncontrolling interests | (3,956 | ) | (5,913 | ) | (7,513 | ) | (12,932 | ) | ||||||||
Other comprehensive (income) loss allocated to noncontrolling interests | (65 | ) | (22 | ) | (3 | ) | 207 | |||||||||
Comprehensive income allocated to noncontrolling interests | $ | (4,021 | ) | $ | (5,935 | ) | $ | (7,516 | ) | $ | (12,725 | ) |
Number of Common Units for each Preferred Unit | Number of Contractual Preferred Units Outstanding as of June 30, 2016 | Converted Basis to Common Units Outstanding as of June 30, 2016 | Conversion Price | Redemption Value (1) | |||||||||||||
Series B | 3.00000 | 1,250 | 3,901 | $ | 16.66670 | $ | 116,313 | ||||||||||
Series D | 1.50821 | 533 | 835 | 33.15188 | 26,637 | ||||||||||||
Series E | 1.29836 | 503 | 679 | 38.51000 | 25,133 | ||||||||||||
$ | 168,083 |
Balance at January 1, 2015 | $ | 299,296 | |
Net income | 5,722 | ||
Distributions | (2,222 | ) | |
Redemption of GGPOP units | (713 | ) | |
Other comprehensive loss | (207 | ) | |
Fair value adjustment for noncontrolling interests in Operating Partnership | (25,509 | ) | |
Balance at June 30, 2015 | $ | 276,367 | |
Balance at January 1, 2016 | $ | 287,627 | |
Net income | 2,039 | ||
Distributions | (2,124 | ) | |
Redemption of GGPOP units | (1,592 | ) | |
Other comprehensive income | 3 | ||
Fair value adjustment for noncontrolling interests in Operating Partnership | 24,297 | ||
Balance at June 30, 2016 | $ | 310,250 |
Declaration Date | Record Date | Payment Date | Dividend Per Share | |||||
2016 | ||||||||
August 1 | October 14 | October 31, 2016 | $ | 0.20 | ||||
May 2 | July 15 | July 29, 2016 | 0.19 | |||||
February 1 | April 15 | April 29, 2016 | 0.19 | |||||
2015 | ||||||||
November 2 | December 15 | January 4, 2016 | $ | 0.19 | ||||
September 1 | October 15 | October 30, 2015 | 0.18 | |||||
May 21 | July 15 | July 31, 2015 | 0.17 | |||||
February 19 | April 15 | April 30, 2015 | 0.17 |
Declaration Date | Record Date | Payment Date | Dividend Per Share | |||||
2016 | ||||||||
August 1 | September 15 | October 3, 2016 | $ | 0.3984 | ||||
May 2 | June 15 | July 1, 2016 | 0.3984 | |||||
February 1 | April 15 | April 29, 2016 | 0.3984 | |||||
2015 | ||||||||
November 2 | December 15 | January 4, 2016 | $ | 0.3984 | ||||
September 1 | September 15 | October 1, 2015 | 0.3984 | |||||
May 21 | June 15 | July 1, 2015 | 0.3984 | |||||
February 19 | March 16 | April 1, 2015 | 0.3984 |
Foreign currency translation | Net unrealized gains (losses) on other financial instruments | Reclassification adjustment for realized gains on available-for-sale securities included in net income | Total | |||||||||||||
Balance at April 1, 2015 | $ | (69,312 | ) | $ | 49 | $ | — | $ | (69,263 | ) | ||||||
Other comprehensive income (loss) | 2,891 | 20 | — | 2,911 | ||||||||||||
Balance at June 30, 2015 | $ | (66,421 | ) | $ | 69 | $ | — | $ | (66,352 | ) | ||||||
Balance at April 1, 2016 | $ | (77,859 | ) | $ | 109 | $ | — | $ | (77,750 | ) | ||||||
Other comprehensive income (loss) | 8,608 | 11 | — | 8,619 | ||||||||||||
Balance at June 30, 2016 | $ | (69,251 | ) | $ | 120 | $ | — | $ | (69,131 | ) |
Foreign currency translation | Net unrealized gains (losses) on other financial instruments | Reclassification adjustment for realized gains on available-for-sale securities included in net income | Total | |||||||||||||
Balance at January 1, 2015 | $ | (51,823 | ) | $ | 70 | $ | — | $ | (51,753 | ) | ||||||
Other comprehensive income (loss) | (14,598 | ) | (1 | ) | — | (14,599 | ) | |||||||||
Balance at June 30, 2015 | $ | (66,421 | ) | $ | 69 | $ | — | $ | (66,352 | ) | ||||||
Balance at January 1, 2016 | $ | (84,798 | ) | $ | 100 | $ | 11,894 | $ | (72,804 | ) | ||||||
Other comprehensive income (loss) | 15,547 | 20 | (11,894 | ) | 3,673 | |||||||||||
Balance at June 30, 2016 | $ | (69,251 | ) | $ | 120 | $ | — | $ | (69,131 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Numerators - Basic and Diluted: | ||||||||||||||||
Net income | 189,901 | 427,853 | 385,238 | 1,069,601 | ||||||||||||
Preferred Stock dividends | (3,983 | ) | (3,984 | ) | (7,967 | ) | (7,968 | ) | ||||||||
Allocation to noncontrolling interests | (3,956 | ) | (5,913 | ) | (7,513 | ) | (12,932 | ) | ||||||||
Net income attributable to common stockholders | $ | 181,962 | $ | 417,956 | $ | 369,758 | $ | 1,048,701 | ||||||||
Denominators: | ||||||||||||||||
Weighted-average number of common shares outstanding - basic | 883,381 | 886,218 | 883,027 | 885,842 | ||||||||||||
Effect of dilutive securities | 68,909 | 66,371 | 68,202 | 67,644 | ||||||||||||
Weighted-average number of common shares outstanding - diluted | 952,290 | 952,589 | 951,229 | 953,486 | ||||||||||||
Anti-dilutive Securities: | ||||||||||||||||
Effect of Preferred Units | 5,415 | 5,472 | 5,415 | 5,472 | ||||||||||||
Effect of Common Units | 4,768 | 4,795 | 4,768 | 4,797 | ||||||||||||
Effect of LTIP Units | 1,775 | 1,732 | 1,759 | 1,495 | ||||||||||||
Weighted-average number of anti-dilutive securities | 11,958 | 11,999 | 11,942 | 11,764 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Stock options - Property management and other costs | $ | 1,666 | $ | 1,803 | $ | 3,153 | $ | 3,692 | |||||||
Stock options - General and administrative | 2,736 | 2,746 | 5,491 | 5,540 | |||||||||||
Restricted stock - Property management and other costs | 767 | 769 | 1,308 | 1,542 | |||||||||||
Restricted stock - General and administrative | 162 | 163 | 311 | 311 | |||||||||||
LTIP Units - Property management and other costs | 379 | 221 | 588 | 605 | |||||||||||
LTIP Units - General and administrative | 3,879 | 2,512 | 7,047 | 4,978 | |||||||||||
Total | $ | 9,589 | $ | 8,214 | $ | 17,898 | $ | 16,668 |
2016 | 2015 | ||||||||||||
Shares | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | ||||||||||
Stock options Outstanding at January 1, | 18,162,700 | $ | 17.51 | 19,744,224 | $ | 17.36 | |||||||
Granted | 91,261 | 26.07 | 267,253 | 29.15 | |||||||||
Exercised | (1,789,201 | ) | 14.59 | (1,046,515 | ) | 16.84 | |||||||
Forfeited | (223,748 | ) | 20.00 | (223,195 | ) | 19.98 | |||||||
Expired | (15,608 | ) | 17.91 | (3,332 | ) | 19.24 | |||||||
Stock options Outstanding at June 30, | 16,225,404 | $ | 17.85 | 18,738,435 | $ | 17.52 |
2016 | 2015 | ||||||||||||
Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | ||||||||||
LTIP Units Outstanding at January 1, | 1,724,747 | $ | 29.33 | — | $ | — | |||||||
Granted | 2,640,963 | 26.07 | 1,758,396 | 29.33 | |||||||||
Exercised | — | — | — | — | |||||||||
Forfeited | (38,862 | ) | 29.15 | (8,846 | ) | 29.15 | |||||||
Expired | — | — | — | — | |||||||||
LTIP Units Outstanding at June 30, | 4,326,848 | $ | 27.35 | 1,749,550 | $ | 29.33 |
June 30, 2016 | December 31, 2015 | |||||||
Trade receivables | $ | 94,159 | $ | 109,399 | ||||
Notes receivable | 645,352 | 614,305 | ||||||
Straight-line rent receivable | 243,947 | 236,589 | ||||||
Other accounts receivable | 4,336 | 3,918 | ||||||
Total accounts and notes receivable | 987,794 | 964,211 | ||||||
Provision for doubtful accounts | (17,870 | ) | (14,655 | ) | ||||
Total accounts and notes receivable, net | $ | 969,924 | $ | 949,556 |
June 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
Gross Asset | Accumulated Amortization | Balance | Gross Asset | Accumulated Amortization | Balance | ||||||||||||||||||
Intangible assets: | |||||||||||||||||||||||
Above-market tenant leases, net | $ | 572,054 | $ | (387,549 | ) | $ | 184,505 | $ | 644,728 | $ | (416,181 | ) | $ | 228,547 | |||||||||
Below-market ground leases, net | 118,994 | (11,747 | ) | 107,247 | 119,545 | (10,761 | ) | 108,784 | |||||||||||||||
Real estate tax stabilization agreement, net | 111,506 | (35,613 | ) | 75,893 | 111,506 | (32,458 | ) | 79,048 | |||||||||||||||
Total intangible assets | $ | 802,554 | $ | (434,909 | ) | $ | 367,645 | $ | 875,779 | $ | (459,400 | ) | $ | 416,379 | |||||||||
Remaining prepaid expenses and other assets: | |||||||||||||||||||||||
Security and escrow deposits | 82,539 | 87,818 | |||||||||||||||||||||
Prepaid expenses | 37,651 | 43,809 | |||||||||||||||||||||
Other non-tenant receivables (1) | 363,904 | 342,438 | |||||||||||||||||||||
Deferred tax, net of valuation allowances | 21,568 | 19,743 | |||||||||||||||||||||
Marketable securities | — | 45,278 | |||||||||||||||||||||
Other (2) | 79,228 | 41,869 | |||||||||||||||||||||
Total remaining prepaid expenses and other assets | 584,890 | 580,955 | |||||||||||||||||||||
Total prepaid expenses and other assets | $ | 952,535 | $ | 997,334 |
June 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
Gross Liability | Accumulated Accretion | Balance | Gross Liability | Accumulated Accretion | Balance | ||||||||||||||||||
Intangible liabilities: | |||||||||||||||||||||||
Below-market tenant leases, net | 315,676 | (184,284 | ) | $ | 131,392 | 356,115 | (203,474 | ) | $ | 152,641 | |||||||||||||
Above-market headquarters office leases, net | 15,268 | (9,475 | ) | 5,793 | 15,268 | (8,604 | ) | 6,664 | |||||||||||||||
Above-market ground leases, net | 9,127 | (2,074 | ) | 7,053 | 9,127 | (1,890 | ) | 7,237 | |||||||||||||||
Total intangible liabilities | $ | 340,071 | $ | (195,833 | ) | $ | 144,238 | $ | 380,510 | $ | (213,968 | ) | $ | 166,542 | |||||||||
Remaining Accounts payable and accrued expenses: | |||||||||||||||||||||||
Accrued interest | 46,996 | 46,129 | |||||||||||||||||||||
Accounts payable and accrued expenses | 62,306 | 64,954 | |||||||||||||||||||||
Accrued real estate taxes | 82,255 | 80,599 | |||||||||||||||||||||
Deferred gains/income | 102,253 | 125,701 | |||||||||||||||||||||
Accrued payroll and other employee liabilities | 45,063 | 66,970 | |||||||||||||||||||||
Construction payable | 117,130 | 158,027 | |||||||||||||||||||||
Tenant and other deposits | 25,707 | 25,296 | |||||||||||||||||||||
Insurance reserve liability | 16,879 | 15,780 | |||||||||||||||||||||
Capital lease obligations | 5,386 | 11,385 | |||||||||||||||||||||
Conditional asset retirement obligation liability | 5,773 | 5,927 | |||||||||||||||||||||
Other | 28,939 | 17,183 | |||||||||||||||||||||
Total remaining Accounts payable and accrued expenses | 538,687 | 617,951 | |||||||||||||||||||||
Total Accounts payable and accrued expenses | $ | 682,925 | $ | 784,493 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Contractual rent expense, including participation rent | $ | 2,139 | $ | 2,032 | $ | 4,246 | $ | 4,332 | ||||||||
Contractual rent expense, including participation rent and excluding amortization of above and below-market ground leases and straight-line rent | 1,560 | 1,444 | 3,086 | 3,141 |
ITEM 2 | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | positive leasing spreads; |
• | improved occupancy; |
• | value creation from redevelopment projects; and |
• | managing operating expenses. |
June 30, 2016 (1) | June 30, 2015 (1) | % Change | ||||||||
In-Place Rents per square foot (2) | ||||||||||
Consolidated Properties | $ | 67.03 | $ | 65.64 | 2.12 | % | ||||
Unconsolidated Properties | 92.66 | 89.00 | 4.11 | % | ||||||
Total Retail Properties | $ | 75.46 | $ | 73.28 | 2.97 | % | ||||
Percentage Leased | ||||||||||
Consolidated Properties | 96.0 | % | 95.8 | % | 20 bps | |||||
Unconsolidated Properties | 96.3 | % | 96.7 | % | (40) bps | |||||
Total Retail Properties | 96.1 | % | 96.1 | % | 0 bps | |||||
Tenant Sales Volume (All Less Anchors) (3) (4) | ||||||||||
Consolidated Properties | $ | 12,076 | $ | 11,839 | 2.00 | % | ||||
Unconsolidated Properties | 8,124 | 8,203 | (0.96 | )% | ||||||
Total Retail Properties | $ | 20,200 | $ | 20,042 | 0.79 | % | ||||
Tenant Sales per square foot (3) (4) | ||||||||||
Consolidated Properties | $ | 516 | $ | 518 | (0.39 | )% | ||||
Unconsolidated Properties | 723 | 764 | (5.37 | )% | ||||||
Total Retail Properties | $ | 583 | $ | 597 | (2.35 | )% | ||||
(1) Metrics exclude properties acquired in the year ended December 31, 2015 and the six months ended June 30, 2016 and certain other retail properties. | |||||
(2) Rent is presented on a contractual basis and consists of base minimum rent and common area costs. | |||||
(3) Tenant Sales Volume (All Less Anchors) is presented as total sales volume in millions of dollars and Tenant Sales <10,000 square feet is presented as sales per square foot in dollars. | |||||
(4) Excluding one property with unusual changes in sales productivity, tenant sales per square foot <10,000 square feet would have increased 0.1% and tenant sales all less anchors would have increased 2.8% on a trailing 12-month basis. |
# of Leases | SF | Term (in years) | Initial Rent PSF 1 | Expiring Rent PSF 2 | Initial Rent Spread | % Change | |||||||||||||||||
Trailing 12 Commencements | 1,482 | 4,082,564 | 7.0 | $ | 67.99 | $ | 59.82 | $ | 8.17 | 13.7 | % | ||||||||||||
2016 Commencements | 1,174 | 3,577,924 | 7.0 | $ | 67.00 | $ | 59.46 | $ | 7.54 | 12.7 | % | ||||||||||||
2017 Commencements | 144 | 529,075 | 5.6 | $ | 59.12 | $ | 52.97 | $ | 6.15 | 11.6 | % |
(1) Represents initial annual rent over the lease consisting of base minimum rent and common area maintenance. | |||||||||||
(2) Represents expiring rent at end of lease consisting of base minimum rent and common area maintenance. |
Three Months Ended June 30, | ||||||||||||||
2016 | 2015 | $ Change | % Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Components of Minimum rents: | ||||||||||||||
Base minimum rents | $ | 368,509 | $ | 358,936 | $ | 9,573 | 2.7 | % | ||||||
Lease termination income | 1,576 | 1,912 | (336 | ) | (17.6 | ) | ||||||||
Straight-line rent | 4,999 | 9,302 | (4,303 | ) | (46.3 | ) | ||||||||
Above and below-market tenant leases, net | (11,672 | ) | (8,594 | ) | (3,078 | ) | 35.8 | |||||||
Total Minimum rents | $ | 363,412 | $ | 361,556 | $ | 1,856 | 0.5 | % |
Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | $ Change | % Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Components of Minimum rents: | ||||||||||||||
Base minimum rents | $ | 736,089 | $ | 739,721 | $ | (3,632 | ) | (0.5 | )% | |||||
Lease termination income | 8,961 | 10,448 | (1,487 | ) | (14.2 | ) | ||||||||
Straight-line rent | 10,445 | 15,389 | (4,944 | ) | (32.1 | ) | ||||||||
Above and below-market tenant leases, net | (20,951 | ) | (29,889 | ) | 8,938 | (29.9 | ) | |||||||
Total Minimum rents | $ | 734,544 | $ | 735,669 | $ | (1,125 | ) | (0.2 | )% |
• | to obtain property-secured debt with laddered maturities; and |
• | to minimize the amount of debt that is cross-collateralized and/or recourse to us. |
Consolidated | Unconsolidated | ||||||
(Dollars in thousands) | |||||||
2016 | $ | 144,451 | $ | — | |||
2017 | 374,548 | 173,234 | |||||
2018 | 340,674 | 186,691 | |||||
2019 | 917,507 | 1,130,881 | |||||
2020 | 1,625,006 | 1,252,419 | |||||
Subsequent | 10,518,744 | 2,741,844 | |||||
Total | $ | 13,920,930 | $ | 5,485,069 |
Property | Description | GGP's Total Projected Share of Cost | GGP's Investment to Date1 | Expected Return on Investment2 | Stabilized Year | ||||||||
Major Development Summary (in millions, at share unless otherwise noted) | |||||||||||||
Under Construction | |||||||||||||
Ala Moana Center Honolulu, HI | Nordstrom box repositioning | 53 | 35 | 9-10% | 2018 | ||||||||
Staten Island Mall Staten Island, NY | Expansion | 199 | 18 | 8-9% | 2019 | ||||||||
Other Projects Various Malls | Redevelopment projects at various malls | 241 | 99 | 6-8% | 2017-2018 | ||||||||
Total Projects Under Construction | $ | 493 | $ | 152 | |||||||||
Projects in Pipeline | |||||||||||||
New Mall Development Norwalk, CT | Ground up mall development | 285 | 47 | 8-10% | 2020 | ||||||||
Other Projects Various Malls | Redevelopment projects at various malls | 267 | 90 | 8-9% | TBD | ||||||||
Total Projects in Pipeline | $ | 552 | $ | 137 |
Six Months Ended June 30, | ||||||||
2016 | 2015 | |||||||
(Dollars in thousands) | ||||||||
Operating capital expenditures | $ | 68,631 | $ | 67,696 | ||||
Tenant allowances and capitalized leasing costs | 71,390 | 76,047 | ||||||
Capitalized interest and capitalized overhead | 30,529 | 32,277 | ||||||
Total | $ | 170,550 | $ | 176,020 |
Declaration Date | Record Date | Payment Date | Dividend Per Share | ||
2016 | |||||
August 1 | October 14 | October 31, 2016 | $ | 0.20 | |
May 2 | July 15 | July 29, 2016 | 0.19 | ||
February 1 | April 15 | April 29, 2016 | 0.19 | ||
2015 | |||||
November 2 | December 15 | January 4, 2016 | $ | 0.19 | |
September 1 | October 15 | October 30, 2015 | 0.18 | ||
May 21 | July 15 | July 31, 2015 | 0.17 | ||
February 19 | April 15 | April 30, 2015 | 0.17 |
Declaration Date | Record Date | Payment Date | Dividend Per Share | ||
2016 | |||||
August 1 | September 15 | October 3, 2016 | $ | 0.3984 | |
May 2 | June 15 | July 1, 2016 | 0.3984 | ||
February 1 | April 15 | April 29, 2016 | 0.3984 | ||
2015 | |||||
November 2 | December 15 | January 4, 2016 | $ | 0.3984 | |
September 1 | September 15 | October 1, 2015 | 0.3984 | ||
May 21 | June 15 | July 1, 2015 | 0.3984 | ||
February 19 | March 16 | April 1, 2015 | 0.3984 |
• | in 2016, an increase in cash inflows from base minimum rents from new development, increase in occupancy and contractual rent steps; |
• | in 2016, a decrease in cash outflows for marketing expenses due to continued efforts to reduce operating costs and interest expense due to prior year refinancings; and |
• | in 2015, an increase in base minimum rents and related collections due to overall increase in permanent occupancy. |
• | in 2016, acquisition and development of real estate and property improvements, ($304.2) million; |
• | in 2016, proceeds from the sale of real estate and interests in unconsolidated real estate affiliates, $390.1 million; |
• | in 2016, proceeds from the sale of marketable securities, $46.4 million; |
• | in 2015, acquisition and development of real estate and property improvements, ($677.1) million; and |
• | in 2015, proceeds from the sale of real estate and interests in unconsolidated real estate affiliates, $1,055.9 million. |
• | in 2016, proceeds from the refinancing or issuance of mortgages, notes and loans payable of $313.5 million net of principal payments of ($694.2) million; |
• | in 2016, cash distributions paid to common stockholders of ($335.5) million; |
• | in 2015, proceeds from the refinancing or issuance of mortgages, notes, and loans payable, of $832 million net of principal payments of ($1,369) million; and |
• | in 2015, cash distributions paid to common stockholders of ($301.0) million. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Company NOI | $ | 577,135 | $ | 541,247 | $ | 1,184,183 | $ | 1,074,537 | |||||||
Adjustments for minimum rents, real estate taxes and other property operating costs | (5,529 | ) | (6,151 | ) | (11,100 | ) | (26,154 | ) | |||||||
Proportionate NOI | 571,606 | 535,096 | 1,173,083 | 1,048,383 | |||||||||||
Unconsolidated Properties | (166,625 | ) | (141,320 | ) | (354,237 | ) | (261,795 | ) | |||||||
NOI of Sold Interests | 1,957 | 8,089 | 6,021 | 25,780 | |||||||||||
Noncontrolling interest in NOI of Consolidated Properties | 3,417 | 4,490 | 7,344 | 8,901 | |||||||||||
Consolidated Properties | 410,355 | 406,355 | 832,211 | 821,269 | |||||||||||
Management fees and other corporate revenues | 18,917 | 26,731 | 52,659 | 45,817 | |||||||||||
Property management and other costs | (38,282 | ) | (40,369 | ) | (69,027 | ) | (83,162 | ) | |||||||
General and administrative | (14,649 | ) | (12,322 | ) | (28,076 | ) | (24,769 | ) | |||||||
Provision for impairment | (4,058 | ) | — | (44,763 | ) | — | |||||||||
Provision for loan loss | — | — | (36,069 | ) | — | ||||||||||
Depreciation and amortization | (156,248 | ) | (152,849 | ) | (316,919 | ) | (328,797 | ) | |||||||
Gain on sales of investment properties | — | 9 | — | 10 | |||||||||||
Operating Income | $ | 216,035 | $ | 227,555 | $ | 390,016 | $ | 430,368 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Company EBITDA | $ | 534,434 | $ | 501,620 | $ | 1,122,575 | $ | 991,053 | |||||||
Adjustments for minimum rents, real estate taxes, other property operating costs, and general and administrative | (5,529 | ) | (6,151 | ) | (11,100 | ) | (26,154 | ) | |||||||
Proportionate EBITDA | 528,905 | 495,469 | 1,111,475 | 964,899 | |||||||||||
Unconsolidated Properties | (157,689 | ) | (127,364 | ) | (336,543 | ) | (239,737 | ) | |||||||
EBITDA of sold interests | 1,837 | 7,970 | 5,771 | 25,445 | |||||||||||
Noncontrolling interest in EBITDA of Consolidated Properties | 3,288 | 4,320 | 7,064 | 8,548 | |||||||||||
Consolidated Properties | 376,341 | 380,395 | 787,767 | 759,155 | |||||||||||
Depreciation and amortization | (156,248 | ) | (152,849 | ) | (316,919 | ) | (328,797 | ) | |||||||
Interest income | 13,335 | 12,843 | 29,393 | 21,664 | |||||||||||
Interest expense | (148,366 | ) | (142,747 | ) | (296,043 | ) | (315,398 | ) | |||||||
Gain (loss) on foreign currency | 7,893 | 1,463 | 16,829 | (21,448 | ) | ||||||||||
Benefit from (provision for) income taxes | 2,242 | (74 | ) | (679 | ) | 11,085 | |||||||||
Provision for impairment excluded from FFO | (4,058 | ) | — | (44,763 | ) | — | |||||||||
Provision for loan loss | — | — | (36,069 | ) | — | ||||||||||
Equity in income of Unconsolidated Real Estate Affiliates | 34,618 | 13,278 | 92,108 | 24,530 | |||||||||||
Equity in income of Unconsolidated Real Estate Affiliates - gain on investment | 25,591 | 297,767 | 40,506 | 309,787 | |||||||||||
Gains from changes in control of investment properties and other | 38,553 | 17,768 | 113,108 | 609,013 | |||||||||||
Gain on sales of investment properties | — | 9 | — | 10 | |||||||||||
Allocation to noncontrolling interests | (3,956 | ) | (5,913 | ) | (7,513 | ) | (12,932 | ) | |||||||
Net income attributable to GGP | $ | 185,945 | $ | 421,940 | $ | 377,725 | $ | 1,056,669 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Company FFO | $ | 340,050 | $ | 318,551 | $ | 722,853 | $ | 627,886 | |||||||
Adjustments for minimum rents, property operating expenses, general and administrative, market rate adjustments, debt extinguishment, income taxes, and FFO from sold interests | 2,188 | (4,195 | ) | (17,305 | ) | (53,871 | ) | ||||||||
Proportionate FFO (1) | 342,238 | 314,356 | 705,548 | 574,015 | |||||||||||
Depreciation and amortization of capitalized real estate costs | (220,172 | ) | (210,694 | ) | (445,040 | ) | (440,563 | ) | |||||||
Gain from changes in control of investment properties and other | 38,553 | 17,768 | 113,108 | 609,013 | |||||||||||
Preferred stock dividends | 3,983 | 3,984 | 7,967 | 7,968 | |||||||||||
Gain (loss) on sales of investment properties | — | 8 | (1 | ) | 9 | ||||||||||
Equity in income of Unconsolidated Real Estate Affiliates - gain on investment | 25,591 | 297,767 | 40,506 | 309,787 | |||||||||||
Noncontrolling interests in depreciation of Consolidated Properties | 1,168 | 1,921 | 3,283 | 3,956 | |||||||||||
Provision for impairment excluded from FFO | (4,058 | ) | — | (44,763 | ) | — | |||||||||
Redeemable noncontrolling interests | (1,358 | ) | (3,170 | ) | (2,883 | ) | (7,516 | ) | |||||||
Net income attributable to GGP | $ | 185,945 | $ | 421,940 | $ | 377,725 | $ | 1,056,669 |
31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32.1 | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
32.2 | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
101 | The following financial information from General Growth Properties, Inc.’s. Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, has been filed with the SEC on August 4, 2016, formatted in XBRL (Extensible Business Reporting Language): (1) Consolidated Balance Sheets, (2) Consolidated Statements of Comprehensive Income, (3) Consolidated Statements of Equity, (4) Consolidated Statements of Cash Flows and (5) Notes to Consolidated Financial Statements. |
GENERAL GROWTH PROPERTIES, INC. | ||
(Registrant) | ||
Date: August 4, 2016 | By: | /s/ Michael Berman |
Michael Berman | ||
Chief Financial Officer | ||
(on behalf of the Registrant) |
Incorporated by Reference Herein | ||||||||||
Exhibit Number | Description | Form | Exhibit | Filing Date | File No. | |||||
3.1 | Second Amended and Restated Bylaws of General Growth Properties, Inc. dated as of July 20, 2016. | 8-K | 3.1 | 7/21/2016 | 001-34948 | |||||
10.1 | Loan Agreement by and among certain subsidiaries of General Growth Properties, Inc. dated as of April 25, 2016. | 8-K | 99.1 | 4/29/2016 | 001-34948 | |||||
31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||
31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||
32.1 | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||
32.2 | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||
101 | The following financial information from General Growth Properties, Inc.’s. Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, has been filed with the SEC on August 4, 2016, formatted in XBRL (Extensible Business Reporting Language): (1) Consolidated Balance Sheets, (2) Consolidated Statements of Comprehensive Income, (3) Consolidated Statements of Equity, (4) Consolidated Statements of Cash Flows and (5) Notes to Consolidated Financial Statements. |
Date: August 4, 2016 | /s/ Sandeep Mathrani |
Sandeep Mathrani | |
Chief Executive Officer |
Date: August 4, 2016 | /s/ Michael Berman |
Michael Berman | |
Chief Financial Officer |
/s/ Sandeep Mathrani | |
Sandeep Mathrani | |
Chief Executive Officer | |
August 4, 2016 |
/s/ Michael Berman | |
Michael Berman | |
Chief Financial Officer | |
August 4, 2016 |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Aug. 02, 2016 |
|
Document and Entity Information | ||
Entity Registrant Name | General Growth Properties, Inc. | |
Entity Central Index Key | 0001496048 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 884,737,667 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 11,000,000,000 | 11,000,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued | 968,056,504 | 966,096,656 |
Common stock, shares outstanding | 884,627,919 | 882,397,202 |
Preferred Stock, shares authorized | 500,000,000 | 500,000,000 |
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares issued | 10,000,000 | 10,000,000 |
Preferred Stock, shares outstanding | 10,000,000 | 10,000,000 |
Common stock in treasury, shares | 55,969,390 | 56,240,259 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Revenues: | ||||
Minimum rents | $ 363,412,000 | $ 361,556,000 | $ 734,544,000 | $ 735,669,000 |
Tenant recoveries | 169,763,000 | 168,043,000 | 342,211,000 | 345,525,000 |
Overage rents | 4,375,000 | 3,485,000 | 12,519,000 | 12,300,000 |
Management fees and other corporate revenues | 18,917,000 | 26,731,000 | 52,659,000 | 45,817,000 |
Other | 18,119,000 | 20,166,000 | 39,685,000 | 34,814,000 |
Total revenues | 574,586,000 | 579,981,000 | 1,181,618,000 | 1,174,125,000 |
Expenses: | ||||
Real estate taxes | 57,309,000 | 56,496,000 | 115,412,000 | 112,483,000 |
Property maintenance costs | 11,955,000 | 12,903,000 | 29,438,000 | 32,784,000 |
Marketing | 2,738,000 | 3,754,000 | 4,792,000 | 8,576,000 |
Other property operating costs | 71,601,000 | 72,427,000 | 141,995,000 | 148,609,000 |
Provision for doubtful accounts | 1,710,000 | 1,306,000 | 5,111,000 | 4,577,000 |
Provision for loan loss | 0 | 0 | 36,069,000 | 0 |
Property management and other costs | 38,282,000 | 40,369,000 | 69,027,000 | 83,162,000 |
General and administrative | 14,650,000 | 12,322,000 | 28,076,000 | 24,769,000 |
Provision for impairment | 4,058,000 | 0 | 44,763,000 | 0 |
Depreciation and amortization | 156,248,000 | 152,849,000 | 316,919,000 | 328,797,000 |
Total expenses | 358,551,000 | 352,426,000 | 791,602,000 | 743,757,000 |
Operating income | 216,035,000 | 227,555,000 | 390,016,000 | 430,368,000 |
Interest and dividend income | 13,335,000 | 12,843,000 | 29,393,000 | 21,664,000 |
Interest expense | (148,366,000) | (142,747,000) | (296,043,000) | (315,398,000) |
Gain (loss) on foreign currency | 7,893,000 | 1,463,000 | 16,829,000 | (21,448,000) |
Gain from changes in control of investment properties and other | 38,553,000 | 17,768,000 | 113,108,000 | 609,013,000 |
Income before income taxes, equity in income of Unconsolidated Real Estate Affiliates and allocation to noncontrolling interests | 127,450,000 | 116,882,000 | 253,303,000 | 724,199,000 |
Benefit from (provision for) income taxes | 2,242,000 | (74,000) | (679,000) | 11,085,000 |
Equity in income of Unconsolidated Real Estate Affiliates | 34,618,000 | 13,278,000 | 92,108,000 | 24,530,000 |
Unconsolidated Real Estate Affiliates - gain on investment | 25,591,000 | 297,767,000 | 40,506,000 | 309,787,000 |
Net income | 189,901,000 | 427,853,000 | 385,238,000 | 1,069,601,000 |
Allocation to noncontrolling interests | (3,956,000) | (5,913,000) | (7,513,000) | (12,932,000) |
Net income attributable to General Growth Properties, Inc. | 185,945,000 | 421,940,000 | 377,725,000 | 1,056,669,000 |
Preferred Stock dividends | (3,983,000) | (3,984,000) | (7,967,000) | (7,968,000) |
Net income attributable to common stockholders | $ 181,962,000 | $ 417,956,000 | $ 369,758,000 | $ 1,048,701,000 |
Earnings Per Share: | ||||
Basic | $ 0.21 | $ 0.47 | $ 0.42 | $ 1.18 |
Diluted | 0.19 | 0.44 | 0.39 | 1.10 |
Dividends declared per share | $ 0.19 | $ 0.17 | $ 0.38 | $ 0.34 |
Comprehensive Income, Net: | ||||
Net income | $ 189,901,000 | $ 427,853,000 | $ 385,238,000 | $ 1,069,601,000 |
Other comprehensive income (loss) | ||||
Foreign currency translation | 8,673,000 | 2,912,000 | 15,634,000 | (14,806,000) |
Reclassification adjustment for realized gains on available-for-sale securities included in net income | 0 | 0 | (11,978,000) | 0 |
Net unrealized gains on other financial instruments | 11,000 | 21,000 | 20,000 | 0 |
Other comprehensive income (loss) | 8,684,000 | 2,933,000 | 3,676,000 | (14,806,000) |
Comprehensive income | 198,585,000 | 430,786,000 | 388,914,000 | 1,054,795,000 |
Comprehensive income allocated to noncontrolling interests | (4,021,000) | (5,935,000) | (7,516,000) | (12,725,000) |
Comprehensive income attributable to General Growth Properties, Inc. | 194,564,000 | 424,851,000 | 381,398,000 | 1,042,070,000 |
Preferred Stock dividends | (3,983,000) | (3,984,000) | (7,967,000) | (7,968,000) |
Comprehensive income, net, attributable to common stockholders | $ 190,581,000 | $ 420,867,000 | $ 373,431,000 | $ 1,034,102,000 |
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Statement of Stockholders' Equity [Abstract] | ||
Long Term Incentive Common Unit grants, net (in shares) | 684,216 | 1,665,896 |
Restricted stock grants (in shares) | 339,937 | 231,926 |
Employee stock purchase program (in shares) | 87,589 | 99,080 |
Stock option grants, net of forfeitures (in shares) | 1,789,201 | 1,046,515 |
Treasury stock purchase (in shares) | 650,000 | |
Cash dividends reinvested (DRIP) in stock (in shares) | 13,990 | 8,876 |
Cash distributions declared (in dollars per share) | $ 0.38 | $ 0.34 |
Cancellation of repurchased common shares (in shares) | 270,869 |
ORGANIZATION |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Readers of this Quarterly Report should refer to the Company’s (as defined below) audited consolidated financial statements for the year ended December 31, 2015 which are included in the Company’s Annual Report on Form 10-K (our "Annual Report") for the fiscal year ended December 31, 2015 (Commission File No. 1-34948), as certain footnote disclosures which would substantially duplicate those contained in our Annual Report have been omitted from this Quarterly Report. In the opinion of management, all adjustments necessary for a fair presentation (which include only normal recurring adjustments) have been included in this Quarterly Report. Capitalized terms used, but not defined in this Quarterly Report, have the same meanings as in our Annual Report. General General Growth Properties, Inc. ("GGP" or the "Company"), a Delaware corporation, was organized in July 2010 and is a self-administered and self-managed real estate investment trust, referred to as a "REIT". In these notes, the terms "we," "us" and "our" refer to GGP and its subsidiaries. GGP, through its subsidiaries and affiliates, is an owner and operator of retail properties. As of June 30, 2016, we are the owner, either entirely or with joint venture partners, of 128 retail properties. Substantially all of our business is conducted through GGP Operating Partnership, LP ("GGPOP"), GGP Nimbus, LP ("GGPN") and GGP Limited Partnership ("GGPLP", and together with GGPN and GGPOP, the "Operating Partnerships"), subsidiaries of GGP. The Operating Partnerships own an interest in the properties that are part of the consolidated financial statements of GGP. As of June 30, 2016, GGP held an approximate 99% common equity ownership (without giving effect to the potential conversion of the Preferred Units and LTIP Units as defined below) of the Operating Partnerships, while the remaining 1% is held by limited partners and certain previous contributors of properties to the Operating Partnerships or their predecessors. GGPOP is the general partner of, and owns a 1.5% equity interest in GGPN and GGPLP. GGPOP has common units of limited partnership ("Common Units"), which are redeemable for cash or, at our option, shares of GGP common stock. It also has preferred units of limited partnership interest ("Preferred Units"), of which, certain Preferred Units can be converted into Common Units and then redeemed for cash or, at our option, shares of GGP common stock (Note 9). GGPOP has full value long term incentive plan units and appreciation only long term incentive plan units (collectively "LTIP Units"), which are redeemable for cash or, at our option, shares of GGP common stock (Note 11). In addition to holding ownership interests in various joint ventures, the Operating Partnerships generally conduct their operations through General Growth Management, Inc. ("GGMI"), General Growth Services, Inc. ("GGSI"), and GGP REIT Services, LLC ("GGPRS"). GGMI and GGSI are taxable REIT subsidiaries ("TRS"s), which provide management, leasing, tenant coordination, business development, marketing, strategic partnership and other services for a majority of our Unconsolidated Real Estate Affiliates (defined below) and for substantially all of our Consolidated Properties, as defined below. GGSI also serves as a contractor to GGMI for these services. GGPRS generally provides financial, accounting, tax, legal, development, and other services to our Consolidated Properties. We refer to our ownership interests in properties in which we own a majority or controlling interest and are consolidated under accounting principles generally accepted in the United States of America ("GAAP") as the "Consolidated Properties." We also own interests in certain properties through joint venture entities in which we own a noncontrolling interest ("Unconsolidated Real Estate Affiliates") and we refer to those properties as the "Unconsolidated Properties." |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of GGP, our subsidiaries and joint ventures in which we have a controlling interest. For consolidated joint ventures, the noncontrolling partner’s share of the assets, liabilities and operations of the joint ventures (generally computed as the joint venture partner’s ownership percentage) is included in noncontrolling interests in consolidated real estate affiliates as permanent equity of the Company. Intercompany balances and transactions have been eliminated. Noncontrolling interests are included on our Consolidated Balance Sheets related to the Common, Preferred, and LTIP Units of GGPOP and are presented either as redeemable noncontrolling interests or as noncontrolling interests in our permanent equity. Each of the Operating Partnerships are variable interest entities as the limited partners do not have substantive kick-out rights or substantive participating rights. However, as the Company holds a majority voting interest in the Operating Partnerships, it qualifies for the exemption from providing certain of the disclosure requirements associated with variable interest entities. We operate in a single reportable segment, which includes the operation, development and management of retail and other rental properties. Our portfolio is targeted to a range of market sizes and consumer tastes. Each of our operating properties is considered a separate operating segment, as each property earns revenues and incurs expenses, individual operating results are reviewed and discrete financial information is available. The Company's chief operating decision maker is comprised of a team of several members of executive management who use Company NOI in assessing segment operating performance. We do not distinguish or group our consolidated operations based on geography, size or type for purposes of making property operating decisions. Our operating properties have similar economic characteristics and provide similar products and services to our tenants. There are no individual operating segments that are greater than 10% of combined revenue, Company NOI or combined assets. Further, all material operations are within the United States and no customer or tenant comprises more than 10% of consolidated revenues. As a result, the Company’s operating properties are aggregated into a single reportable segment. Reclassifications Expenses of $44 thousand and $158 thousand were reclassified from other property operating costs to marketing for the three months ended June 30, 2015 and the six months ended June 30, 2015, respectively, to conform prior periods to the current year presentation. The reclassification is a change from one acceptable presentation to another acceptable presentation. Properties Real estate assets are stated at cost less any provisions for impairments. Expenditures for significant betterments and improvements are capitalized. Maintenance and repairs are charged to expense when incurred. Construction and improvement costs incurred in connection with the development of new properties or the redevelopment of existing properties are capitalized. Real estate taxes, interest costs, and internal costs associated with leasing and development overhead incurred during construction periods are capitalized. Capitalization is based on qualified expenditures and interest rates. Capitalized real estate taxes, interest costs, and internal costs associated with leasing and development overhead are amortized over lives which are consistent with the related assets. Pre-development costs, which generally include legal and professional fees and other third-party costs directly related to the construction assets, are capitalized as part of the property being developed. In the event a development is no longer deemed to be probable of occurring, the capitalized costs are expensed (see also our impairment policies in this note below). We periodically review the estimated useful lives of our properties, and may adjust them as necessary. The estimated useful lives of our properties range from 10 - 45 years. Depreciation or amortization expense is computed using the straight-line method based upon the following estimated useful lives:
Acquisitions of Operating Properties (Note 3) Acquisitions of properties are accounted for utilizing the acquisition method of accounting and, accordingly, the results of operations of acquired properties have been included in the results of operations from the respective dates of acquisition. Estimates of future cash flows and other valuation techniques are used to allocate the purchase price of acquired property between land, buildings and improvements, equipment, assumed debt liabilities and identifiable intangible assets and liabilities such as amounts related to in-place tenant leases, acquired above and below-market tenant and ground leases, and tenant relationships. Identifiable intangible assets and liabilities are calculated for above-market and below-market tenant and ground leases where we are either the lessor or the lessee. The difference between the contractual rental rates and our estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases, including significantly below-market renewal options for which exercise of the renewal option appears to be reasonably assured. The remaining term of leases with renewal options at terms significantly below market reflect the assumed exercise of such below-market renewal options and assume the amortization period would coincide with the extended lease term. The gross asset balances of the in-place value of tenant leases are included in buildings and equipment in our Consolidated Balance Sheets.
The above-market tenant leases and below-market ground leases are included in prepaid expenses and other assets (Note 13). The below-market tenant leases, above-market ground leases and above-market headquarters office lease are included in accounts payable and accrued expenses (Note 14) in our Consolidated Balance Sheets. Amortization/accretion of all intangibles, including the intangibles in Note 13 and Note 14, had the following effects on our Income from continuing operations:
Future amortization/accretion of all intangibles, including the intangibles in Note 13 and Note 14, is estimated to decrease results from continuing operations as follows:
Marketable Securities Marketable securities are comprised of equity securities that are classified as available-for-sale. Available-for-sale securities are presented in prepaid expenses and other assets on our Consolidated Balance Sheets at fair value. Unrealized gains and losses resulting from the mark-to-market of these securities are included in other comprehensive income (loss). Realized gains and losses are recognized in earnings only upon the sale of the securities and are recorded based on the weighted average cost of such securities. During the six months ended June 30, 2016, we recognized gains of $13.1 million in management fees and other corporate revenues on the Consolidated Statements of Comprehensive Income from the sale of Seritage Growth Properties stock. Investments in Unconsolidated Real Estate Affiliates (Note 5) We account for investments in joint ventures where we own a non-controlling joint interest using either the equity method or the cost method. If we have significant influence but not control over the the investment, we utilize the equity method. If we have neither control nor significant influence, we utilize the cost method. Under the equity method, the cost of our investment is adjusted for our share of the earnings of such Unconsolidated Real Estate Affiliates from the date of acquisition, increased by our contributions and reduced by distributions received. To determine the method of accounting for partially owned joint ventures, we evaluate the characteristics of associated entities and determine whether an entity is a variable interest entity ("VIE"). A limited partnership or other similar entity is considered a VIE unless a simple majority of limited partners (excluding limited partners that are under common control with the general partner) have substantive kick-out rights or participating rights. If an entity is determined to be a VIE, we determine which party is the primary beneficiary by analyzing whether we have both the power to direct the entity's significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. Significant judgments and assumptions inherent in this analysis include the nature of the entity's operations, future cash flow projections, the entity's financing and capital structure, and contractual relationship and terms. We consolidate a VIE when we have determined that we are the primary beneficiary. Primary risks associated with our VIEs include the potential of funding the entities' debt obligations or making additional contributions to fund the entities' operations. Generally, the operating agreements with respect to our Unconsolidated Real Estate Affiliates provide that assets, liabilities and funding obligations are shared in accordance with our ownership percentages. Therefore, we generally also share in the profit and losses, cash flows and other matters relating to our Unconsolidated Real Estate Affiliates in accordance with our respective ownership percentages. Except for Retained Debt (as described in Note 5), differences between the carrying amount of our investment in the Unconsolidated Real Estate Affiliates and our share of the underlying equity of our Unconsolidated Real Estate Affiliates are typically amortized over lives ranging from 5 to 45 years. When cumulative distributions exceed our investment in the joint venture, the investment is reported as a liability in our consolidated financial statements. The liability is limited to our maximum potential obligation to fund contractual obligations, including recourse related to certain debt obligations. Partially owned, non-variable interest joint ventures over which we have controlling financial interest are consolidated in our consolidated financial statements. In determining if we have a controlling financial interest, we consider factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Partially owned joint ventures where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method. To the extent that we contribute assets to a joint venture accounted for using the equity method, our investment in the joint venture is recorded at our cost basis in the assets that were contributed to the joint venture. We will recognize gains and losses on the contribution of our real estate to joint ventures, relating solely to the outside partner’s interest, to the extent the buyer is independent of the Company, the collection of the sales price is reasonably assured, and we will not be required to support the operations of the property or its related obligations to an extent greater than our proportionate interest. The combined summarized financial information of unconsolidated joint ventures is disclosed in Note 5 to the Consolidated Financial Statements. We continually analyze and assess reconsideration events, including changes in the factors mentioned above, to determine if the consolidation treatment remains appropriate. Decisions regarding consolidation of partially owned entities frequently require significant judgment by our management. Revenue Recognition and Related Matters Minimum rents are recognized on a straight-line basis over the terms of the related operating leases, including the effect of any free rent periods. Minimum rents also include lease termination income collected from tenants to allow for the tenant to vacate their space prior to their scheduled termination dates, as well as, accretion related to above-market and below-market tenant leases on acquired properties and properties that were recorded at fair value at the emergence from bankruptcy. Overage rent is paid by a tenant when the tenant's sales exceed an agreed upon minimum amount and is recognized on an accrual basis once tenant sales exceed contractual tenant lease thresholds and is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the lease. Tenant recoveries are established in the leases or computed based upon a formula related to real estate taxes, insurance and other property operating expenses and are generally recognized as revenues in the period the related costs are incurred. Real estate sales are recognized whenever (1) a sale is consummated, (2) the buyer has demonstrated an adequate commitment to pay for the property, (3) the Company’s receivable is not subject to future subordination, and (4) the Company has transferred to the buyer the risks and rewards of ownership and does not have continuing involvement. Unless all conditions are met, recognition of all or a portion of the profit shall be postponed. We provide an allowance for doubtful accounts against the portion of accounts receivable, including straight-line rents, which is estimated to be uncollectible. Such allowances are reviewed periodically based upon our recovery experience. Management Fees and Other Corporate Revenues Management fees and other corporate revenues primarily represent management and leasing fees, development fees, financing fees and fees for other ancillary services performed for the benefit of certain of the Unconsolidated Real Estate Affiliates. Management fees are reported at 100% of the revenue earned from the joint venture in management fees and other corporate revenues on our Consolidated Statements of Comprehensive Income. Our share of the management fee expense incurred by the Unconsolidated Real Estate Affiliates is reported within equity in income of Unconsolidated Real Estate Affiliates on our Consolidated Statements of Comprehensive Income and in property management and other costs in the Condensed Combined Statements of Income in Note 5. The following table summarizes the management fees from affiliates and our share of the management fee expense:
Impairment Operating properties We regularly review our consolidated properties for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment indicators are assessed separately for each property and include, but are not limited to, significant decreases in real estate property net operating income, significant decreases in occupancy percentage, debt maturities and management’s intent with respect to the properties and prevailing market conditions. If an indicator of potential impairment exists, the property is tested for recoverability by comparing its carrying amount to the estimated future undiscounted cash flows. Although the carrying amount may exceed the estimated fair value of certain properties, a real estate asset is only considered to be impaired when its carrying amount cannot be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is determined to be necessary, the excess of the carrying amount of the property over its estimated fair value is expensed to operations. In addition, the impairment provision is allocated proportionately to adjust the carrying amount of the asset group. The adjusted carrying amount, which represents the new cost basis of the property, is depreciated over the remaining useful life of the property. Although we may market a property for sale, there can be no assurance that the transaction will occur until the sale is finalized. However, GAAP requires us to utilize the Company’s expected holding period of our properties when assessing recoverability. If we cannot recover the carrying value of these properties within the planned holding period, we will estimate the fair values of the assets and record impairment charges for properties when the estimated fair value is less than their carrying value. Impairment indicators for pre-development costs, which are typically costs incurred during the beginning stages of a potential development and construction in progress, are assessed by project and include, but are not limited to, significant changes in the Company’s plans with respect to the project, significant changes in projected completion dates, tenant demand, anticipated revenues or cash flows, development costs, market factors and sustainability of development projects. Impairment charges are recorded in the Consolidated Statements of Comprehensive Income when the carrying value of a property is not recoverable and it exceeds the estimated fair value of the property, which can occur in accounting periods preceding disposition and/or in the period of disposition. During the three months ended June 30, 2016, we recorded a $4.1 million impairment charge on our Consolidated Statements of Comprehensive Income related to one operating property. During the period, we received a bona fide purchase offer for the property which was less than its carrying value. During the six months ended June 30, 2016, we recorded a $44.8 million impairment charge on our Consolidated Statements of Comprehensive Income related to three operating properties. During the period, we received bona fide purchase offers for two properties which were less than their respective carrying values. The other property had non-recourse debt maturing during the three months ended June 30, 2016 that exceeded the fair value of the operating property. This property was transferred to a special servicer during the six months ended June 30, 2016. No provisions for impairment were recognized for the three and six months ended June 30, 2015. Changes in economic and operating conditions that occur subsequent to our review of recoverability of our properties could impact the assumptions used in that assessment and could result in future impairment if assumptions regarding those properties differ from actual results. Investment in Unconsolidated Real Estate Affiliates A series of operating losses of an investee or other factors may indicate that an other-than-temporary decline in value of our investment in an Unconsolidated Real Estate Affiliate has occurred. The investment in each of the Unconsolidated Real Estate Affiliates is evaluated for valuation declines below the carrying amount. Accordingly, in addition to the property-specific impairment analysis that we perform for such joint ventures (as part of our operating property impairment process described above), we also considered whether there were other-than-temporary declines with respect to the carrying values of our Unconsolidated Real Estate Affiliates. No impairments related to our investments in Unconsolidated Real Estate Affiliates were recognized for the three and six months ended June 30, 2016 and 2015. Changes in economic and operating conditions that occur subsequent to our review of recoverability of our investments in Unconsolidated Real Estate Affiliates could impact the assumptions used in that assessment and could result in future impairment if assumptions regarding those investments differ from actual results. Fair Value Measurements (Note 4) The accounting principles for fair value measurements establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:
Note 4 includes a discussion of properties measured at fair value on a non-recurring basis using Level 2 and Level 3 inputs and the fair value of debt, which is estimated on a recurring basis using Level 2 and Level 3 inputs. Note 4 also includes a discussion of available-for-sale securities measured at fair value on a recurring basis using Level 1 inputs. Note 9 includes a discussion of certain redeemable noncontrolling interests that are measured at fair value using Level 1 inputs. Concentrations of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents. We are exposed to credit risk with respect to cash held at various financial institutions and access to our credit facility. Our credit risk exposure with regard to our cash and the $1.5 billion, including the accordion, available under our credit facility is spread among a diversified group of investment grade financial institutions. We had $90.0 million and $315.0 million outstanding under our credit facility as of June 30, 2016 and December 31, 2015, respectively. Recently Issued Accounting Pronouncements Effective January 1, 2016, the Financial Accounting Standards Board ("FASB") issued an update that required us to evaluate whether we should consolidate certain legal entities. Specifically, the amendments: (i) modified the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities, (ii) eliminated the presumption that a general partner should consolidate a limited partnership, (iii) affected the consolidation analysis of reporting entities that are involved with VIEs, and (iv) provided a scope exception for certain entities. The adoption of this standard did not materially impact our consolidated financial statements. Effective January 1, 2016, companies are required to present debt issuance costs related to a recognized debt liability (excluding revolving credit facility) as a direct deduction from the carrying amount of that debt liability on the balance sheet. The recognition and measurement guidance for debt issuance costs will not be affected. We elected to early adopt this pronouncement as of December 31, 2015 which resulted in the reclassification of unamortized capitalized loan fees from deferred expenses to a direct reduction of the Company’s indebtedness on our Consolidated Balance Sheets for all periods presented in our Annual Report for the fiscal year ended December 31, 2015. Effective January 1, 2018, companies will be required to apply a five-step model in accounting for revenue arising from contracts with customers. The core principle of the revenue model is that a company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Lease contracts will be excluded from this revenue recognition criteria; however, the sale of real estate will be required to follow the new model. Expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to this pronouncement. The new standard can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. The Company is evaluating the potential impact of this pronouncement on its consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02 which will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under ASU 2016-02, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Lessor accounting remains substantially similar to current GAAP. In addition, disclosures of leasing activities are to be expanded to include qualitative along with specific quantitative information. For public entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-02 mandates a modified retrospective transition method. The Company is evaluating the potential impact of this pronouncement on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-07 which eliminates the requirement for retrospective application of equity method accounting when an investment previously accounted for by another method initially qualifies for the equity method. This standard is effective for all entities for fiscal years beginning after December 15, 2016 with earlier application permitted. The Company does not expect the adoption of this standard to materially impact its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13 which changes the model for the measurement of credit losses on financial instruments. Specifically, the amendments in the ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this ASU will be effective January 1, 2020 with early adoption permitted on January 1, 2019. The Company is evaluating the potential impact of this pronouncement on its consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. For example, estimates and assumptions have been made with respect to fair values of assets and liabilities for purposes of applying the acquisition method of accounting, the useful lives of assets, capitalization of development and leasing costs, provision for income taxes, recoverable amounts of receivables and deferred taxes, provision for loan loss, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to acquisitions, impairment of long-lived assets, litigation related accruals and disclosures and fair value of debt. Actual results could differ from these and other estimates. |
ACQUISITIONS, SALES AND JOINT VENTURE ACTIVITY |
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ACQUISITIONS, SALES AND JOINT VENTURE ACTIVITY | ACQUISITIONS, SALES AND JOINT VENTURE ACTIVITY On June 30, 2016, we closed on the acquisition of a property through a joint venture located at 218 West 57th Street in New York City for $81.5 million. In connection with the acquisition, we provided a $53.0 million mortgage loan to the joint venture that bears interest at LIBOR plus 3.4%, subject to terms and conditions in the loan agreement, and matures on June 30, 2019, with two one year extension options. We own a 50% interest in the joint venture and our share of equity was $15.1 million including prorated working capital. We also provided our joint venture partner with a $7.3 million loan upon closing. On June 30, 2016, we closed on the sale of our 49.8% interest in One Stockton Partners, LLC in San Francisco, California to our joint venture partner for $49.8 million. In connection with the sale, $16.3 million in mortgage debt was assumed. This transaction netted proceeds of approximately $33.5 million and resulted in a gain of $22.7 million recognized in Unconsolidated Real Estate Affiliates - gain on investment on our Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2016. In addition to the sale, the joint venture partner made an $8.0 million repayment of a note receivable. On June 28, 2016, we closed on the sale of the office building and parking garage at Pioneer Place in Portland, Oregon for $121.8 million. This transaction netted proceeds of approximately $116.0 million and resulted in a gain on sale of $35.5 million recognized in gain from changes in control of investment properties and other for the three and six months ended June 30, 2016. On February 2, 2016, we closed on the acquisition of our joint venture partner's 25% interest in Spokane Valley Mall in Spokane, Washington for $37.5 million. This transaction resulted in a reduction of additional paid-in capital of $16.4 million due to the acquisition of our partner's noncontrolling interest. On January 29, 2016 we closed on the sale of our 75% interest in Provo Towne Center in Provo, Utah to our joint venture partner for $37.5 million. Mortgage debt of $31.1 million was repaid upon closing. This transaction netted proceeds of approximately $2.8 million and resulted in a loss of $6.7 million recognized in gain from changes in control of investment properties and other for the six months ended June 30, 2016. On January 29, 2016, we closed on the sale of our 10% interest in 522 Fifth Avenue in New York City to our joint venture partner for $25.0 million, inclusive of the repayment of previously existing notes receivable from our joint venture partner. We received proceeds of $10.0 million upon closing and will receive the remaining $15.0 million in proceeds on December 1, 2016. This transaction resulted in a gain on sale of $11.0 million recognized in Unconsolidated Real Estate Affiliates - gain on investment for the six months ended June 30, 2016. On January 15, 2016, we closed on the sale of Eastridge Mall in San Jose, California for $225.0 million. This transaction netted proceeds of approximately $216.3 million and resulted in a gain on sale of $71.8 million recognized in gain from changes in control of investment properties and other for the six months ended June 30, 2016. On January 8, 2016, we closed on the sale of our 50% interest in Owings Mills Mall in Owings Mills, Maryland to our joint venture partner for $11.6 million. This transaction netted proceeds of approximately $11.6 million and resulted in a gain on sale of $0.6 million recognized in Unconsolidated Real Estate Affiliates - gain on investment for the six months ended June 30, 2016. On April 27, 2015, we sold the office portion of 200 Lafayette in New York City for $124.5 million. In connection with the transaction, debt of $67.0 million was repaid. The transaction netted proceeds of approximately $49.4 million and resulted in a gain on sale of $11.9 million recognized in gain from changes in control of investment properties and other on our Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015. On April 17, 2015, we closed on the acquisition of a property through a joint venture partner, the Crown Building, which is located at 730 Fifth Avenue in New York City was acquired for $1.78 billion, which was funded with $1.25 billion of secured debt. We have an effective 50% interest in the retail portion of the property. GGP and Jeff Sutton own, redevelop, lease and manage the retail portion of the property which was $1.30 billion of the purchase price. Vladislav Doronin’s Capital Group and Michael Shvo own, redevelop, lease and manage the office tower which was $475.0 million of the purchase price. The office tower will be redeveloped into luxury residential condominiums. At acquisition, our share of the retail property purchase price was $650.0 million, and our share of the equity was $208.5 million. In connection with the acquisition, we provided $204.3 million in loans to our joint venture partners - a $100.0 million loan to Jeff Sutton and a $104.3 million loan to Doronin/Shvo. On April 1, 2015, we closed on the acquisition of property through a joint venture located at 85 Fifth Avenue in New York City for $86.0 million. The acquisition was funded with $60.0 million of secured debt. We own a 50% interest in the joint venture and our share of the equity was $14.0 million. In connection with the acquisition, we provided a $7.0 million loan to our joint venture partner. On March 31, 2015, we acquired a 50% interest in a joint venture with Sears Holdings Corporation that owns anchor pads and in-place leases at 12 stores located at our properties for approximately $165.0 million. Subsequently, Sears Holdings Corporation sold its investment in the joint venture to Seritage Growth Properties, which was an affiliated company. On December 14, 2015, GGP entered into agreements with two of its joint ventures to assign interest in 4 of the 12 anchor pads to the joint ventures. For the assignment and transfer of the assigned interests, GGP received net consideration of $74.0 million. On January 29, 2015, we sold our 50% interest in a joint venture that owns Trails Village in Las Vegas, Nevada for $27.6 million. In connection with the sale, mortgage debt of $5.75 million was repaid. The transaction netted proceeds of approximately $22.0 million and resulted in a gain of $12.0 million recognized in Unconsolidated Real Estate Affiliates - gain on investment on our Consolidated Statements of Comprehensive Income. On February 27, 2015, we sold a 25% interest in Ala Moana Center in Honolulu, Hawaii for net proceeds of $907.0 million. We received $670.0 million at closing and will receive the remaining proceeds of $237.0 million upon completion of the redevelopment and expansion. Subsequently on April 10, 2015, we sold an additional 12.5% interest in Ala Moana Center for net proceeds of $453.5 million to another joint venture partner. We received $335.0 million at closing and will receive the remaining proceeds of $118.5 million upon completion of the redevelopment and expansion. As a result, our joint venture partners own a combined 37.5% economic interest in the joint venture. Upon sale of the 25% interest in Ala Moana Center and in accordance with applicable accounting standards for real estate sales with future development required, we recognized a $584.4 million gain on change in control of investment properties and other as of the closing date calculated on the percentage of the basis (real estate asset carrying value of Ala Moana Center and development costs incurred to date) as compared to the total estimated costs expected to be incurred through completion of the development. During the three months ended June 30, 2016, we recognized an additional $5.7 million gain on change of control of investment properties and other using the percentage of completion method for the construction completed from the closing date on February 27, 2015 through June 30, 2016. During the six months ended June 30, 2016, we recognized an additional $12.5 million gain on change of control of investment properties and other using the percentage of completion method for the construction completed from the closing date on February 27, 2015 through June 30, 2016. We will recognize an additional $13.8 million gain on change of control of investment properties and other through substantial completion of construction. Upon sale of the 12.5% interest in Ala Moana Center and in accordance with applicable accounting standards for real estate sales with future development required, we recognized a $295.9 million gain in Unconsolidated Real Estate Affiliates - gain on investment as of the closing date calculated on the percentage of the basis (real estate asset carrying value of Ala Moana Center and development costs incurred to date) as compared to the total estimated costs expected to be incurred through completion of the development. During the three months ended June 30, 2016, we recognized an additional $2.9 million gain in Unconsolidated Real Estate Affiliates - gain on investment using the percentage of completion method for the construction completed from the closing date on April 10, 2015 through June 30, 2016. During the six months ended June 30, 2016, we recognized an additional $6.2 million gain in Unconsolidated Real Estate Affiliates - gain on investment using the percentage of completion method for the construction completed from the closing date on April 10, 2015 through June 30, 2016. We will recognize an additional $6.9 million gain in Unconsolidated Real Estate Affiliates - gain on investment through substantial completion of construction. We account for the 62.5% interest in the joint venture that owns Ala Moana Center under the equity method of accounting (Note 5) because we share control over major decisions with the joint venture partners which resulted in the partners obtaining substantive participating rights. Ala Moana Center was previously wholly owned by GGP and accounted for on a consolidated basis. The table below summarizes the gain calculation ($ in millions) for the 25% and 12.5% interests sold:
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FAIR VALUE |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | FAIR VALUE Nonrecurring Fair Value of Operating Properties We estimate fair value relating to impairment assessments based upon discounted cash flow and direct capitalization models that include all projected cash inflows and outflows over a specific holding period, or the negotiated sales price, if applicable. Such projected cash flows are comprised of contractual rental revenues and forecasted rental revenues and expenses based upon market conditions and expectations for growth. Capitalization rates and discount rates utilized in these models are based on a reasonable range of current market rates for each property analyzed. Based upon these inputs, we determined that our valuations of properties using a discounted cash flow or a direct capitalization model were classified within Level 3 of the fair value hierarchy. For our properties for which the estimated fair value was based on negotiated sales prices, we determined that our valuation was classified within Level 2 of the fair value hierarchy.
Nonrecurring Fair Value of Notes Receivable We estimate fair value relating to the note receivable from Rique (defined in Note 12). Based on current information and events, we believe it is probable that we will be unable to collect all amounts due according to the contractual terms of the note receivable. As the Rique note receivable is a collateral dependent loan, we have estimated the provision for loss based on the fair value of the market price of the Aliansce (defined in Note 12) shares which serve as the collateral for the loan. Based on the market price and Brazilian Real exchange rate of the Aliansce stock, the note is measured at fair value on our Consolidated Balance Sheets using Level 1 inputs and included in accounts and notes receivable, net. The fair value is shown below.
Disclosure of Fair Value of Financial Instruments The fair values of our financial instruments approximate their carrying amount in our consolidated financial statements except for debt. Management’s estimates of fair value are presented below for our debt as of June 30, 2016 and December 31, 2015.
(1) Includes market rate adjustments of $32.4 million and $33.0 million and deferred financing costs of $47.7 million and $40.2 million as of June 30, 2016 and December 31, 2015, respectively. The fair value of our Junior Subordinated Notes approximates their carrying amount as of June 30, 2016 and December 31, 2015. We estimated the fair value of mortgages, notes and other loans payable using Level 2 and Level 3 inputs based on recent financing transactions, estimates of the fair value of the property that serves as collateral for such debt, historical risk premiums for loans of comparable quality, current London Interbank Offered Rate ("LIBOR"), U.S. treasury obligation interest rates and on the discounted estimated future cash payments to be made on such debt. The discount rates estimated reflect our judgment as to what the approximate current lending rates for loans or groups of loans with similar maturities and assume that the debt is outstanding through maturity. We have utilized market information as available or present value techniques to estimate the amounts required to be disclosed. Since such amounts are estimates that are based on limited available market information for similar transactions and do not acknowledge transfer or other repayment restrictions that may exist in specific loans, it is unlikely that the estimated fair value of any such debt could be realized by immediate settlement of the obligation. Recurring Fair Value of Marketable Securities Marketable securities are measured at fair value on our Consolidated Balance Sheets using Level 1 inputs and included in Prepaid expenses and other assets. The fair values are shown below.
During the six months ended June 30, 2016, we divested the entire investment in Seritage Growth Properties, recognized a gain of $13.1 million in management fees and other corporate revenues, and reclassified $12.0 million out of other comprehensive income (loss). |
UNCONSOLIDATED REAL ESTATE AFFILIATES |
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UNCONSOLIDATED REAL ESTATE AFFILIATES | UNCONSOLIDATED REAL ESTATE AFFILIATES Following is summarized financial information for all of our Unconsolidated Real Estate Affiliates accounted for using the equity method and a reconciliation to our total investment in Unconsolidated Real Estate Affiliates, inclusive of investments accounted for using the cost method (Note 2).
(1) The Condensed Combined Statements of Income - Unconsolidated Real Estate Affiliates include income from Ala Moana Center subsequent to the formation of the joint venture on February 27, 2015. (2) Includes management fees charged to the unconsolidated joint ventures by GGMI and GGSI. The Unconsolidated Real Estate Affiliates represents our investments in real estate joint ventures that are not consolidated. We hold interests in 25 domestic joint ventures, comprising 41 U.S. retail properties and one joint venture in Brazil. Generally, we share in the profits and losses, cash flows and other matters relating to our investments in Unconsolidated Real Estate Affiliates in accordance with our respective ownership percentages. We manage most of the properties owned by these joint ventures. We account for investments in joint ventures where we own a non-controlling joint interest using either the equity method or the cost method. If we have significant influence but not control over the the investment, we utilize the equity method. If we have neither control or significant influence, we utilize the cost method. On March 7, 2014, we formed a joint venture, AMX Partners, LLC ("AMX"), with Kahikolu Partners, LLC ("MKB") for the purpose of constructing a luxury residential condominium tower on a site located within the Ala Moana Shopping Center. AMX commenced recognizing revenues and cost of sales from the sale of condominiums using the percentage of completion method during the six months ended June 30, 2016. In accordance with GAAP, sales of condominiums have been recognized using the percentage of completion method. Under this method, revenue is recognized when (1) construction is beyond a preliminary stage, (2) buyers are unable to receive refunds of down-payments except in the event of non-delivery, (3) a substantial percentage of the condominiums are under firm contracts, (4) collection of the sales price is reasonably assured and (5) sales proceeds and costs can be reasonably estimated. The revenue from condominium sales is calculated based on the percentage of completion, as determined by the construction contract costs incurred to date in relation to the total estimated construction costs. On March 24, 2016, Kenwood Towne Centre in Cincinnati, Ohio (property included in a joint venture of which we are 50% owner) acquired fee title to a portion of the property previously held under ground lease for a gross purchase price of $43.0 million. Unconsolidated Mortgages, Notes and Loans Payable, and Retained Debt Our proportionate share of the mortgages, notes and loans payable of the unconsolidated joint ventures was $5.1 billion as of June 30, 2016 and December 31, 2015, including Retained Debt (as defined below). There can be no assurance that the Unconsolidated Properties will be able to refinance or restructure such debt on acceptable terms or otherwise, or that joint venture operations or contributions by us and/or our partners will be sufficient to repay such loans. We have debt obligations in excess of our pro rata share of the debt for one of our Unconsolidated Real Estate Affiliates ("Retained Debt"). This Retained Debt represents distributed debt proceeds of the Unconsolidated Real Estate Affiliates in excess of our pro rata share of the non-recourse mortgage indebtedness. The proceeds of the Retained Debt which were distributed to us are included as a reduction in our investment in Unconsolidated Real Estate Affiliates. We had retained debt of $87.2 million at one property as of June 30, 2016, and $87.9 million as of December 31, 2015. We are obligated to contribute funds on an ongoing basis, as needed, to our Unconsolidated Real Estate Affiliates in amounts sufficient to pay debt service on such Retained Debt. If we do not contribute such funds, our distributions from such Unconsolidated Real Estate Affiliates, or our interest in, could be reduced to the extent of such deficiencies. As of June 30, 2016, we do not anticipate an inability to perform on our obligations with respect to Retained Debt. |
MORTGAGES, NOTES AND LOANS PAYABLE |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MORTGAGES, NOTES AND LOANS PAYABLE | MORTGAGES, NOTES AND LOANS PAYABLE Mortgages, notes and loans payable and the weighted-average interest rates are summarized as follows:
(1) Includes $32.4 million of market rate adjustments and $47.7 million of deferred financing costs. (2) Represents the weighted-average interest rates on our contractual principal balances. (3) Includes $33.0 million of market rate adjustments and $40.2 million of deferred financing costs. (4) $1.4 billion of the variable-rate balance is cross-collateralized. (5) Includes deferred financing costs, which are shown as a reduction to the debt balance. See table below for the balance excluding deferred financing costs. Collateralized Mortgages, Notes and Loans Payable As of June 30, 2016, $18.3 billion of land, buildings and equipment (before accumulated depreciation) and construction in progress have been pledged as collateral for our mortgages, notes and loans payable. Certain of these consolidated secured loans, representing $1.4 billion of debt, are cross-collateralized with other properties. Although a majority of the $13.6 billion of fixed and variable rate collateralized mortgages, notes and loans payable are non-recourse, $823.1 million of such mortgages, notes and loans payable are recourse to the Company as guarantees on secured financings. In addition, certain mortgage loans contain other credit enhancement provisions which have been provided by GGP. Certain mortgages, notes and loans payable may be prepaid but are generally subject to a prepayment penalty equal to a yield-maintenance premium, defeasance or a percentage of the loan balance. On April 25, 2016, we amended our $1.4 billion loan secured by cross-collateralized mortgages on 15 properties. The interest rate remained consistent at the London Interbank Offered Rate ("LIBOR") plus 1.75%, however, we were able to decrease the recourse from 100% to 50% and extend the term for three years. The loan now matures April 25, 2019, with two one year extension options. We did not refinance any other consolidated mortgage notes during the six months ended June 30, 2016. During the year ended December 31, 2015, we refinanced consolidated mortgage notes totaling $710.0 million at four properties and generated net proceeds of $240.9 million. The prior loans totaling $469.1 million had a weighted-average term-to-maturity of 1.3 years, and a weighted-average interest rate of 5.6%. The new loans have a weighted-average term-to-maturity of 10.0 years,and a weighted-average interest rate of 3.8%. In addition, we paid down $594.3 million of consolidated mortgage notes at five properties. The prior loans had a weighted-average term-to-maturity of 1.5 years, and a weighted-average interest rate of 5.3%. We also obtained new mortgage notes totaling $250.0 million on two properties with a weighted-average term-to-maturity of 10.0 years and a weighted-average interest rate of 4.3%. Corporate and Other Unsecured Loans We have certain unsecured debt obligations, the terms of which are described below:
(1) Excludes deferred financing costs of $10.0 million in 2016 that decrease the total amount that appears outstanding in our Consolidated Balance Sheets. (2) Excludes deferred financing costs of $11.2 million in 2015 that decrease the total amount that appears outstanding in our Consolidated Balance Sheets. Our revolving credit facility (the "Facility") as amended on October 30, 2015, provides for revolving loans of up to $1.1 billion. The Facility has an uncommitted accordion feature for a total facility of up to $1.5 billion. The Facility is scheduled to mature in October 2020 and is unsecured. Borrowings under the Facility bear interest at a rate equal to LIBOR plus 130 to 190 basis points or at a base rate plus 30 to 90 basis points, which is determined by the Company’s leverage level. The Facility contains certain restrictive covenants which limit material changes in the nature of our business conducted, including, but not limited to, mergers, dissolutions or liquidations, dispositions of assets, liens, incurrence of additional indebtedness, dividends, transactions with affiliates, prepayment of subordinated debt, negative pledges and changes in fiscal periods. In addition, we are required not to exceed a maximum net debt-to-value ratio, a maximum leverage ratio and a minimum net cash interest coverage ratio; we are not aware of any instances of non-compliance with such covenants as of June 30, 2016. As of June 30, 2016, $90.0 million was outstanding on the Facility. Junior Subordinated Notes GGP Capital Trust I, a Delaware statutory trust (the "Trust") and a wholly-owned subsidiary of GGPN, completed a private placement of $200.0 million of trust preferred securities ("TRUPS") in 2006. The Trust also issued $6.2 million of Common Securities to GGPOP. The Trust used the proceeds from the sale of the TRUPS and Common Securities to purchase $206.2 million of floating rate Junior subordinated notes of GGPOP due 2036. Distributions on the TRUPS are equal to LIBOR plus 1.45%. Distributions are cumulative and accrue from the date of original issuance. The TRUPS mature on April 30, 2036, but may be redeemed beginning on April 30, 2011 if the Trust exercises its right to redeem a like amount of Junior subordinated notes. The Junior subordinated notes bear interest at LIBOR plus 1.45% and are fully recourse to the Company. Though the Trust currently is a wholly-owned subsidiary of GGPN, we are not the primary beneficiary of the Trust and, accordingly, it is not consolidated for accounting purposes. We have recorded the Junior subordinated notes as a liability and our common equity interest in the Trust as prepaid expenses and other assets in our Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015. Letters of Credit and Surety Bonds We had outstanding letters of credit and surety bonds of $50.0 million as of June 30, 2016 and $76.1 million as of December 31, 2015. These letters of credit and bonds were issued primarily in connection with insurance requirements, special real estate assessments and construction obligations. We are not aware of any instances of non-compliance with our financial covenants related to our mortgages, notes and loans payable as of June 30, 2016, with the exception of one mortgage loan. A special servicer is currently managing the operations of the property securing the mortgage loan. |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES We have elected to be taxed as a REIT under the Internal Revenue Code. We intend to maintain REIT status. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of our taxable ordinary income. In addition, the Company is required to meet certain asset and income tests. As a REIT, we will generally not be subject to corporate level Federal income tax on taxable income we distribute currently to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to Federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income or property, and to Federal income and excise taxes on our undistributed taxable income and capital gains. We are currently statutorily open to audit by the Internal Revenue Service for the years ended December 31, 2012 through 2015 and are statutorily open to audit by state taxing authorities for the years ended December 31, 2011 through 2015. We have no unrecognized tax benefits recorded pursuant to uncertain tax positions as of June 30, 2016. |
WARRANTS |
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WARRANTS | WARRANTS Brookfield owns 73,930,000 warrants (the "Warrants") to purchase common stock of GGP with an initial weighted average exercise price of $10.70. Each Warrant was fully vested upon issuance, has a term of seven years and expires on November 9, 2017. Below is a summary of Warrants that were originally issued and are still outstanding.
The exercise prices of the Warrants are subject to adjustment for future dividends, stock dividends, distribution of assets, stock splits or reverse splits of our common stock or certain other events. In accordance with the agreement, these calculations adjust both the exercise price and the number of shares issuable for the originally issued 73,930,000 Warrants. During 2015 and 2016, the number of shares issuable upon exercise of the outstanding Warrants changed as follows:
Brookfield has the option for 57,500,000 Warrants to either full share settle (i.e. deliver cash for the exercise price of the Warrants in the amount of approximately $618 million in exchange for approximately 70 million shares of common stock) or net share settle. The remaining 16,430,000 Warrants owned or managed by Brookfield must be net share settled. As of June 30, 2016, the Warrants are exercisable into approximately 64 million common shares of the Company, at a weighted-average exercise price of approximately $8.76 per share. Due to their ownership of Warrants, Brookfield’s potential ownership of the Company may change as a result of payments of dividends and changes in our stock price. |
EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS | EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS Allocation to Noncontrolling Interests Noncontrolling interests consists of the redeemable interests related to GGPOP Common, Preferred and LTIP Units and the noncontrolling interest in our consolidated joint ventures. The following table reflects the activity included in the allocation to noncontrolling interests.
Noncontrolling Interests The noncontrolling interest related to the Common, Preferred, and LTIP Units of GGPOP are presented either as redeemable noncontrolling interests or as noncontrolling interests in our permanent equity on our Consolidated Balance Sheets. Classification as redeemable or permanent equity is considered on a tranche-by-tranche basis and is dependent on whether we could be required, under certain events outside of our control, to redeem the securities for cash by the holders of the securities. Those tranches for which we could be required to redeem the security for cash are included in redeemable equity. If we control the decision to redeem the securities for cash, the securities are classified as permanent equity. The Common and Preferred Units of GGPOP are recorded at the greater of the carrying amount adjusted for the noncontrolling interest’s share of the allocation of income or loss (and its share of other comprehensive income or loss) and dividends or their redemption value (i.e. fair value) as of each measurement date. The excess of the fair value over the carrying amount from period to period is recorded within additional paid-in capital in our Consolidated Balance Sheets. Allocation to noncontrolling interests is presented as an adjustment to net income to arrive at Net income (loss) attributable to General Growth Properties, Inc. The common redeemable noncontrolling interests have been recorded at fair value for all periods presented. One tranche of preferred redeemable noncontrolling interests has been recorded at fair value, while the other tranches of preferred redeemable noncontrolling interests have been recorded at carrying value. Generally, the holders of the Common Units share in any distributions by GGPOP with our common stockholders. However, the GGPOP operating partnership agreement permits distributions solely to GGP if such distributions were required to allow GGP to comply with the REIT distribution requirements or to avoid the imposition of excise tax. Under certain circumstances, the conversion rate for each Common Unit is required to be adjusted to give effect to stock distributions. If the holders had requested redemption of the Common and Preferred Units as of June 30, 2016, the aggregate amount of cash we would have paid would have been $142.2 million and $168.1 million, respectively. GGPOP issued Preferred Units that are convertible into Common Units of GGPOP at the rates below (subject to adjustment). The holder may convert the Preferred Units into Common Units of GGPOP at any time, subject to certain restrictions. The Common Units are convertible into common stock at approximately a one-to-one ratio at the current stock price.
(1) The conversion price of Series B preferred units is lower than the GGP June 30, 2016 closing common stock price of $29.82; therefore, the June 30, 2016 common stock price of $29.82, and an additional conversion rate of 1.0397624 shares is used to calculate the Series B redemption value. The following table reflects the activity of the redeemable noncontrolling interests for the six months ended June 30, 2016, and 2015.
Common Stock Dividend Our Board of Directors declared common stock dividends during 2016 and 2015 as follows:
Our Dividend Reinvestment Plan ("DRIP") provides eligible holders of GGP’s common stock with a convenient method of increasing their investment in the Company by reinvesting all or a portion of cash dividends in additional shares of common stock. Eligible stockholders who enroll in the DRIP on or before the fourth business day preceding the record date for a dividend payment will be able to have that dividend reinvested. As a result of the DRIP elections, 13,990 shares were issued during the six months ended June 30, 2016 and 8,876 shares were issued during the six months ended June 30, 2015. Preferred Stock On February 13, 2013, we issued, in a public offering, 10,000,000 shares of 6.375% Series A Cumulative Perpetual Preferred Stock (the "Preferred Stock") at a price of $25.00 per share, resulting in net proceeds of $242.0 million after issuance costs. The Preferred Stock is recorded net of issuance costs within equity on our Consolidated Balance Sheets, and accrues a quarterly dividend at an annual rate of 6.375%. The dividend is paid in arrears in preference to dividends on our common stock, and reduces net income available to common stockholders, and therefore, earnings per share. The Preferred Stock does not have a stated maturity date but we may redeem the Preferred Stock after February 12, 2018, for $25.00 per share plus all accrued and unpaid dividends. We may redeem the Preferred Stock prior to February 12, 2018, in limited circumstances that preserve ownership limits and/or our status as a REIT, as well as during certain circumstances surrounding a change of control. Upon certain circumstances surrounding a change of control, holders of Preferred Stock may elect to convert each share of their Preferred Stock into a number of shares of GGP common stock equivalent to $25.00 plus accrued and unpaid dividends, but not to exceed a cap of 2.4679 common shares (subject to certain adjustments related to GGP common share splits, subdivisions, or combinations). Our Board of Directors declared preferred stock dividends during 2016 and 2015 as follows:
Accumulated Other Comprehensive Loss The following table reflects the activity of the components of accumulated other comprehensive loss for the three months ended June 30, 2016, and 2015:
The following table reflects the activity of the components of accumulated other comprehensive loss for the six months ended June 30, 2016, and 2015:
Realized gains from the sale of available-for-sale securities are included in management fees and other corporate revenues. |
EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share ("EPS") is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted EPS is computed after adjusting the numerator and denominator of the basic EPS computation for the effects of all potentially dilutive common shares. The dilutive effect of the Warrants and the dilutive effect of options and their equivalents (including fixed awards and nonvested stock issued under stock-based compensation plans), are computed using the "treasury" method. Information related to our EPS calculations is summarized as follows:
For the three and six months ended June 30, 2016 and 2015, dilutive options and dilutive shares related to the Warrants are included in the denominator of EPS. Outstanding Common Units and LTIP Units have also been excluded from the diluted earnings per share calculation because including such units would also require that the share of GGPOP income attributable to such units be added back to net income therefore resulting in no effect on EPS. Outstanding Preferred Units have been excluded from the diluted EPS calculation for all periods presented because including the Preferred Units would also require that the Preferred Units dividend be added back to the net income, resulting in anti-dilution. GGP owned 55,969,390 and 56,619,390 shares of treasury stock as of June 30, 2016 and 2015, respectively. These shares are presented as common stock in treasury, at cost, on our Consolidated Balance Sheets. Accordingly, these shares have been excluded from the calculation of EPS. |
STOCK-BASED COMPENSATION PLANS |
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STOCK-BASED COMPENSATION PLANS | STOCK-BASED COMPENSATION PLANS The General Growth Properties, Inc. 2010 Equity Plan (the ‘‘Equity Plan’’) reserved for issuance of 4% of outstanding shares on a fully diluted basis. The Equity Plan provides for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, other stock-based awards and performance-based compensation (collectively, the ‘‘Awards’’). Directors, officers and other employees of GGP’s and its subsidiaries and affiliates are eligible for the Awards. The Equity Plan is not subject to the Employee Retirement Income Security Act of 1974, as amended. No participant may be granted more than 4,000,000 shares, or the equivalent dollar value of such shares, in any year. Options granted under the Equity Plan will be designated as either nonqualified stock options or incentive stock options. An option granted as an incentive stock option will, to the extent it fails to qualify as an incentive stock option, be treated as a nonqualified option. The exercise price of an option may not be less than the fair value of a share of GGP’s common stock on the date of grant. The term of each option will be determined prior to the date of grant, but may not exceed 10 years. On November 12, 2014, the Company’s Equity Plan was amended to allow for the grant of LTIP Units to certain officers, directors, and employees of the Company as an alternative to the Company’s stock options or restricted stock. LTIP Units are classes of partnership interests that under certain conditions, including vesting, are convertible by the holder into common units, which are redeemable by the holder for common shares on a one-to-one ratio (subject to adjustment for changes to GGP’s capital structure) or for the cash value of such shares at the option of the Company. On February 17, 2016, the Company’s Equity Plan was amended to allow for the grant of restricted stock or LTIP Units to certain officers, directors, and employees of the Company that vest based on the achievement of certain established metrics that are based on the performance of the Company. Compensation expense related to stock-based compensation plans for the three and six months ended June 30, 2016, and 2015 is summarized in the following table in thousands:
The following tables summarize stock option and LTIP Unit activity for the Equity Plan for GGP for the six months ended June 30, 2016, and 2015:
There was no significant restricted stock activity for the six months ended June 30, 2016 and 2015. |
ACCOUNTS AND NOTES RECEIVABLE, NET |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTS AND NOTES RECEIVABLE, NET | ACCOUNTS AND NOTES RECEIVABLE, NET The following table summarizes the significant components of Accounts and notes receivable, net.
On November 11, 2015, we entered into a promissory note with our joint venture partner, Ashkenazy Holding Co., LLC ("AHC"), in which we lent $57.6 million that bears interest at 8% per annum. The note is collateralized by AHC's equity in Miami Design District Associates, which is part of the AACMDD Group, LLC joint venture ("AACMDD"). We have an option through November 15, 2016 to purchase the collateral in exchange for cancellation of the note. If the option is exercised, the closing date will be on January 16, 2017 and all amounts previously paid by AHC must be repaid to AHC. On September 17, 2015, we entered into a promissory note with our joint venture partner, AHC, in which we lent $40.4 million that bears interest at 6% per annum. The note is collateralized by AHC's equity in Miami Design District Associates, which is part of AACMDD. We have an option whereby we can send notice up to 30 days prior to the maturity date of September 17, 2017 to purchase the collateral in exchange for cancellation of the note. If the option is exercised, all amounts previously paid by AHC must be repaid to AHC. On June 30, 2015, we entered into a promissory note with our joint venture partner MKB (defined in Note 5), in which we would lend MKB up to $80 million for capital calls after an initial contribution of $80 million by MKB and until the joint venture secured construction financing. This loan bears interest at LIBOR plus 6% and is secured by MKB's partnership interest in AMX, which is constructing a luxury residential condominium tower on a site located within the Ala Moana Shopping Center. As of June 30, 2016, there was $15.8 million outstanding on this loan. Construction financing closed during the third quarter of 2015. Notes receivable includes $204.3 million of notes receivables from our joint venture partners related to the acquisition of 730 Fifth Avenue in New York, New York. The first note was issued for $104.3 million, bears interest at 8.0% compounded annually and matures on February 12, 2025. The second note was issued for $100.0 million to the joint venture partner acquiring the office portion of the property and bears interest at LIBOR plus 13.2% subject to terms and conditions in the loan agreement and matures on April 17, 2025. As of June 30, 2016, there was $226.3 million outstanding on these loans. Also included in notes receivable is $118.0 million and $48.9 million due from our joint venture partner related to the acquisition of the properties at 685 Fifth Avenue and 530 Fifth Avenue in New York, New York. The notes receivable bear interest at 7.5% and 9% respectively. Interest is compounded quarterly with accrued but unpaid interest increasing the loan balance. The notes are collateralized by our partner's ownership interest in the joint ventures. The loans mature on June 27, 2024 and June 18, 2024, respectively. Included in notes receivable is a $78.9 million note receivable issued to Rique Empreendimentos e Participacoes Ltda. ("Rique") in conjunction with our sale of Aliansce Shopping Centers, S.A. ("Aliansce") to Rique and Canada Pension Plan Investment Board on September 30, 2013. The note receivable is denominated in Brazilian Reais, bears interest at an effective interest rate of approximately 14%, is collateralized by shares of common stock in Aliansce, and requires annual principal and interest payments over the term. During the six months ended June 30, 2016, we determined, based on current information and events, that it is probable that we will be unable to collect all amounts due according to the contractual terms of the receivable. As the note receivable is a collateral dependent loan, we have estimated the provision for loss based on the fair value of the market price of the Aliansce shares which serve as the collateral for the loan. During the six months ended June 30, 2016, we recognized a $36.1 million loss on the note recorded in the provision for loan loss on the Consolidated Statements of Comprehensive Income based on the value of the collateral and included accrued interest of $7.5 million in the provision for loan loss. We recognized the impact of changes in the exchange rate on the note receivable as gain or loss on foreign currency in our Consolidated Statements of Comprehensive Income. On July 29, 2016, we settled the note receivable issued to Rique (Note 12) in exchange for approximately 18.3 million shares in Aliansce, resulting in a 11.3% ownership in Aliansce (Note 17). |
PREPAID EXPENSES AND OTHER ASSETS |
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Prepaid Expense and Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PREPAID EXPENSES AND OTHER ASSETS | PREPAID EXPENSES AND OTHER ASSETS The following table summarizes the significant components of Prepaid expenses and other assets.
(1) Includes receivable due from our joint venture partners due upon completion of the redevelopment at Ala Moana (Note 3). (2) Includes receivable due from our joint venture partners related to the acquisition of 218 West 57th Street (Note 3). |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table summarizes the significant components of Accounts payable and accrued expenses.
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LITIGATION |
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LITIGATION | |
LITIGATION | LITIGATION In the normal course of business, from time to time, we are involved in legal proceedings relating to the ownership and operations of our properties. In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a material effect on our consolidated financial position, results of operations or liquidity. Neither the Company nor any of the Unconsolidated Real Estate Affiliates is currently involved in any material pending legal proceedings nor, to our knowledge, is any material legal proceeding currently threatened against the Company or any of the Unconsolidated Real Estate Affiliates. |
COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES We lease land or buildings at certain properties from third parties. The leases generally provide us with a right of first refusal in the event of a proposed sale of the property by the landlord. Rental payments are expensed as incurred and have been straight-lined over the term of the lease, to the extent applicable. The following is a summary of our contractual rental expense as presented in our Consolidated Statements of Comprehensive Income:
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SUBSEQUENT EVENTS |
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Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On July 21, 2016, we sold Newgate Mall located in Ogden, Utah for a sales price of $69.5 million. We received proceeds of approximately $8.4 million. On July 29, 2016, we settled the note receivable issued to Rique (Note 12) in exchange for approximately 18.3 million shares in Aliansce, resulting in a 11.3% ownership in Aliansce. On July 29, 2016, we sold a 50% interest in Fashion Show located in Las Vegas, Nevada to TIAA-CREF Global Investments, LLC ("TIAACREF") for a sales price of $1.25 billion. We received proceeds of approximately $814 million in July and will receive the remaining $16 million in the third quarter. On August 1, 2016, we sold Rogue Valley Mall located in Medford, Oregon for a sales price of $61.5 million. We received proceeds of approximately $6.4 million. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of GGP, our subsidiaries and joint ventures in which we have a controlling interest. For consolidated joint ventures, the noncontrolling partner’s share of the assets, liabilities and operations of the joint ventures (generally computed as the joint venture partner’s ownership percentage) is included in noncontrolling interests in consolidated real estate affiliates as permanent equity of the Company. Intercompany balances and transactions have been eliminated. Noncontrolling interests are included on our Consolidated Balance Sheets related to the Common, Preferred, and LTIP Units of GGPOP and are presented either as redeemable noncontrolling interests or as noncontrolling interests in our permanent equity. Each of the Operating Partnerships are variable interest entities as the limited partners do not have substantive kick-out rights or substantive participating rights. However, as the Company holds a majority voting interest in the Operating Partnerships, it qualifies for the exemption from providing certain of the disclosure requirements associated with variable interest entities. We operate in a single reportable segment, which includes the operation, development and management of retail and other rental properties. Our portfolio is targeted to a range of market sizes and consumer tastes. Each of our operating properties is considered a separate operating segment, as each property earns revenues and incurs expenses, individual operating results are reviewed and discrete financial information is available. The Company's chief operating decision maker is comprised of a team of several members of executive management who use Company NOI in assessing segment operating performance. We do not distinguish or group our consolidated operations based on geography, size or type for purposes of making property operating decisions. Our operating properties have similar economic characteristics and provide similar products and services to our tenants. There are no individual operating segments that are greater than 10% of combined revenue, Company NOI or combined assets. Further, all material operations are within the United States and no customer or tenant comprises more than 10% of consolidated revenues. As a result, the Company’s operating properties are aggregated into a single reportable segment. |
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Properties | Properties Real estate assets are stated at cost less any provisions for impairments. Expenditures for significant betterments and improvements are capitalized. Maintenance and repairs are charged to expense when incurred. Construction and improvement costs incurred in connection with the development of new properties or the redevelopment of existing properties are capitalized. Real estate taxes, interest costs, and internal costs associated with leasing and development overhead incurred during construction periods are capitalized. Capitalization is based on qualified expenditures and interest rates. Capitalized real estate taxes, interest costs, and internal costs associated with leasing and development overhead are amortized over lives which are consistent with the related assets. Pre-development costs, which generally include legal and professional fees and other third-party costs directly related to the construction assets, are capitalized as part of the property being developed. In the event a development is no longer deemed to be probable of occurring, the capitalized costs are expensed (see also our impairment policies in this note below). We periodically review the estimated useful lives of our properties, and may adjust them as necessary. The estimated useful lives of our properties range from 10 - 45 years. Depreciation or amortization expense is computed using the straight-line method based upon the following estimated useful lives:
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Acquisitions of Operating Properties | Acquisitions of Operating Properties (Note 3) Acquisitions of properties are accounted for utilizing the acquisition method of accounting and, accordingly, the results of operations of acquired properties have been included in the results of operations from the respective dates of acquisition. Estimates of future cash flows and other valuation techniques are used to allocate the purchase price of acquired property between land, buildings and improvements, equipment, assumed debt liabilities and identifiable intangible assets and liabilities such as amounts related to in-place tenant leases, acquired above and below-market tenant and ground leases, and tenant relationships. Identifiable intangible assets and liabilities are calculated for above-market and below-market tenant and ground leases where we are either the lessor or the lessee. The difference between the contractual rental rates and our estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases, including significantly below-market renewal options for which exercise of the renewal option appears to be reasonably assured. The remaining term of leases with renewal options at terms significantly below market reflect the assumed exercise of such below-market renewal options and assume the amortization period would coincide with the extended lease term. |
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Management Fees and Other Corporate Revenues | Management Fees and Other Corporate Revenues Management fees and other corporate revenues primarily represent management and leasing fees, development fees, financing fees and fees for other ancillary services performed for the benefit of certain of the Unconsolidated Real Estate Affiliates. Management fees are reported at 100% of the revenue earned from the joint venture in management fees and other corporate revenues on our Consolidated Statements of Comprehensive Income. Our share of the management fee expense incurred by the Unconsolidated Real Estate Affiliates is reported within equity in income of Unconsolidated Real Estate Affiliates on our Consolidated Statements of Comprehensive Income and in property management and other costs in the Condensed Combined Statements of Income in Note 5. |
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Impairment | Impairment Operating properties We regularly review our consolidated properties for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment indicators are assessed separately for each property and include, but are not limited to, significant decreases in real estate property net operating income, significant decreases in occupancy percentage, debt maturities and management’s intent with respect to the properties and prevailing market conditions. If an indicator of potential impairment exists, the property is tested for recoverability by comparing its carrying amount to the estimated future undiscounted cash flows. Although the carrying amount may exceed the estimated fair value of certain properties, a real estate asset is only considered to be impaired when its carrying amount cannot be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is determined to be necessary, the excess of the carrying amount of the property over its estimated fair value is expensed to operations. In addition, the impairment provision is allocated proportionately to adjust the carrying amount of the asset group. The adjusted carrying amount, which represents the new cost basis of the property, is depreciated over the remaining useful life of the property. Although we may market a property for sale, there can be no assurance that the transaction will occur until the sale is finalized. However, GAAP requires us to utilize the Company’s expected holding period of our properties when assessing recoverability. If we cannot recover the carrying value of these properties within the planned holding period, we will estimate the fair values of the assets and record impairment charges for properties when the estimated fair value is less than their carrying value. Impairment indicators for pre-development costs, which are typically costs incurred during the beginning stages of a potential development and construction in progress, are assessed by project and include, but are not limited to, significant changes in the Company’s plans with respect to the project, significant changes in projected completion dates, tenant demand, anticipated revenues or cash flows, development costs, market factors and sustainability of development projects. Impairment charges are recorded in the Consolidated Statements of Comprehensive Income when the carrying value of a property is not recoverable and it exceeds the estimated fair value of the property, which can occur in accounting periods preceding disposition and/or in the period of disposition. During the three months ended June 30, 2016, we recorded a $4.1 million impairment charge on our Consolidated Statements of Comprehensive Income related to one operating property. During the period, we received a bona fide purchase offer for the property which was less than its carrying value. During the six months ended June 30, 2016, we recorded a $44.8 million impairment charge on our Consolidated Statements of Comprehensive Income related to three operating properties. During the period, we received bona fide purchase offers for two properties which were less than their respective carrying values. The other property had non-recourse debt maturing during the three months ended June 30, 2016 that exceeded the fair value of the operating property. This property was transferred to a special servicer during the six months ended June 30, 2016. No provisions for impairment were recognized for the three and six months ended June 30, 2015. Changes in economic and operating conditions that occur subsequent to our review of recoverability of our properties could impact the assumptions used in that assessment and could result in future impairment if assumptions regarding those properties differ from actual results. Investment in Unconsolidated Real Estate Affiliates A series of operating losses of an investee or other factors may indicate that an other-than-temporary decline in value of our investment in an Unconsolidated Real Estate Affiliate has occurred. The investment in each of the Unconsolidated Real Estate Affiliates is evaluated for valuation declines below the carrying amount. Accordingly, in addition to the property-specific impairment analysis that we perform for such joint ventures (as part of our operating property impairment process described above), we also considered whether there were other-than-temporary declines with respect to the carrying values of our Unconsolidated Real Estate Affiliates. No impairments related to our investments in Unconsolidated Real Estate Affiliates were recognized for the three and six months ended June 30, 2016 and 2015. Changes in economic and operating conditions that occur subsequent to our review of recoverability of our investments in Unconsolidated Real Estate Affiliates could impact the assumptions used in that assessment and could result in future impairment if assumptions regarding those investments differ from actual results. |
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Fair Value Measurements | Fair Value Measurements (Note 4) The accounting principles for fair value measurements establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:
Note 4 includes a discussion of properties measured at fair value on a non-recurring basis using Level 2 and Level 3 inputs and the fair value of debt, which is estimated on a recurring basis using Level 2 and Level 3 inputs. Note 4 also includes a discussion of available-for-sale securities measured at fair value on a recurring basis using Level 1 inputs. Note 9 includes a discussion of certain redeemable noncontrolling interests that are measured at fair value using Level 1 inputs. |
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Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents. We are exposed to credit risk with respect to cash held at various financial institutions and access to our credit facility. |
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Effective January 1, 2016, the Financial Accounting Standards Board ("FASB") issued an update that required us to evaluate whether we should consolidate certain legal entities. Specifically, the amendments: (i) modified the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities, (ii) eliminated the presumption that a general partner should consolidate a limited partnership, (iii) affected the consolidation analysis of reporting entities that are involved with VIEs, and (iv) provided a scope exception for certain entities. The adoption of this standard did not materially impact our consolidated financial statements. Effective January 1, 2016, companies are required to present debt issuance costs related to a recognized debt liability (excluding revolving credit facility) as a direct deduction from the carrying amount of that debt liability on the balance sheet. The recognition and measurement guidance for debt issuance costs will not be affected. We elected to early adopt this pronouncement as of December 31, 2015 which resulted in the reclassification of unamortized capitalized loan fees from deferred expenses to a direct reduction of the Company’s indebtedness on our Consolidated Balance Sheets for all periods presented in our Annual Report for the fiscal year ended December 31, 2015. Effective January 1, 2018, companies will be required to apply a five-step model in accounting for revenue arising from contracts with customers. The core principle of the revenue model is that a company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Lease contracts will be excluded from this revenue recognition criteria; however, the sale of real estate will be required to follow the new model. Expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to this pronouncement. The new standard can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. The Company is evaluating the potential impact of this pronouncement on its consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02 which will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under ASU 2016-02, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Lessor accounting remains substantially similar to current GAAP. In addition, disclosures of leasing activities are to be expanded to include qualitative along with specific quantitative information. For public entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-02 mandates a modified retrospective transition method. The Company is evaluating the potential impact of this pronouncement on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-07 which eliminates the requirement for retrospective application of equity method accounting when an investment previously accounted for by another method initially qualifies for the equity method. This standard is effective for all entities for fiscal years beginning after December 15, 2016 with earlier application permitted. The Company does not expect the adoption of this standard to materially impact its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13 which changes the model for the measurement of credit losses on financial instruments. Specifically, the amendments in the ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this ASU will be effective January 1, 2020 with early adoption permitted on January 1, 2019. The Company is evaluating the potential impact of this pronouncement on its consolidated financial statements. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. For example, estimates and assumptions have been made with respect to fair values of assets and liabilities for purposes of applying the acquisition method of accounting, the useful lives of assets, capitalization of development and leasing costs, provision for income taxes, recoverable amounts of receivables and deferred taxes, provision for loan loss, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to acquisitions, impairment of long-lived assets, litigation related accruals and disclosures and fair value of debt. Actual results could differ from these and other estimates. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of estimated useful lives of properties | Depreciation or amortization expense is computed using the straight-line method based upon the following estimated useful lives:
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Schedule of gross asset balances of in-place value of tenant leases | The gross asset balances of the in-place value of tenant leases are included in buildings and equipment in our Consolidated Balance Sheets.
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Schedule of effects of amortization/accretion of all intangibles on Income (loss) from continuing operations | Amortization/accretion of all intangibles, including the intangibles in Note 13 and Note 14, had the following effects on our Income from continuing operations:
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Schedule of future amortization/accretion of all intangibles, estimated to decrease results from continuing operations | Future amortization/accretion of all intangibles, including the intangibles in Note 13 and Note 14, is estimated to decrease results from continuing operations as follows:
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Summary of management fees from affiliates and entity's share of management fee expense | The following table summarizes the management fees from affiliates and our share of the management fee expense:
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ACQUISITIONS, SALES AND JOINT VENTURE ACTIVITY (Table) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain Calculation | The table below summarizes the gain calculation ($ in millions) for the 25% and 12.5% interests sold:
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FAIR VALUE (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Measured on Recurring and Nonrecurring Basis |
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Unobservable Quantitative Input |
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Fair Value of Debt | Management’s estimates of fair value are presented below for our debt as of June 30, 2016 and December 31, 2015.
(1) Includes market rate adjustments of $32.4 million and $33.0 million and deferred financing costs of $47.7 million and $40.2 million as of June 30, 2016 and December 31, 2015, respectively. |
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Fair Value of Marketable Securities | The fair value is shown below.
Marketable securities are measured at fair value on our Consolidated Balance Sheets using Level 1 inputs and included in Prepaid expenses and other assets. The fair values are shown below.
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UNCONSOLIDATED REAL ESTATE AFFILIATES (Tables) |
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UNCONSOLIDATED REAL ESTATE AFFILIATES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of summarized financial information for Unconsolidated Real Estate Affiliates |
(1) The Condensed Combined Statements of Income - Unconsolidated Real Estate Affiliates include income from Ala Moana Center subsequent to the formation of the joint venture on February 27, 2015. (2) Includes management fees charged to the unconsolidated joint ventures by GGMI and GGSI. |
MORTGAGES, NOTES AND LOANS PAYABLE (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of mortgages, notes and loans payable and weighted average interest rates | Mortgages, notes and loans payable and the weighted-average interest rates are summarized as follows:
(1) Includes $32.4 million of market rate adjustments and $47.7 million of deferred financing costs. (2) Represents the weighted-average interest rates on our contractual principal balances. (3) Includes $33.0 million of market rate adjustments and $40.2 million of deferred financing costs. (4) $1.4 billion of the variable-rate balance is cross-collateralized. (5) Includes deferred financing costs, which are shown as a reduction to the debt balance. See table below for the balance excluding deferred financing costs. |
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Schedule of terms of unsecured debt obligations | We have certain unsecured debt obligations, the terms of which are described below:
(1) Excludes deferred financing costs of $10.0 million in 2016 that decrease the total amount that appears outstanding in our Consolidated Balance Sheets. (2) Excludes deferred financing costs of $11.2 million in 2015 that decrease the total amount that appears outstanding in our Consolidated Balance Sheets. |
WARRANTS (Tables) |
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Schedule of Warrants initially received | Below is a summary of Warrants that were originally issued and are still outstanding.
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Schedule of change in shares issuable upon exercise of outstanding Warrants | During 2015 and 2016, the number of shares issuable upon exercise of the outstanding Warrants changed as follows:
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EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS (Tables) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of activity included in allocation to noncontrolling interests | The following table reflects the activity included in the allocation to noncontrolling interests.
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Schedule of redeemable noncontrolling interests | The Common Units are convertible into common stock at approximately a one-to-one ratio at the current stock price.
(1) The conversion price of Series B preferred units is lower than the GGP June 30, 2016 closing common stock price of $29.82; therefore, the June 30, 2016 common stock price of $29.82, and an additional conversion rate of 1.0397624 shares is used to calculate the Series B redemption value. |
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Schedule of activity of redeemable noncontrolling interests | The following table reflects the activity of the redeemable noncontrolling interests for the six months ended June 30, 2016, and 2015.
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Summary of dividends declared | Our Board of Directors declared common stock dividends during 2016 and 2015 as follows:
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Schedule of Preferred Dividends Payable | Our Board of Directors declared preferred stock dividends during 2016 and 2015 as follows:
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Schedule of accumulated other comprehensive loss | The following table reflects the activity of the components of accumulated other comprehensive loss for the three months ended June 30, 2016, and 2015:
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EARNINGS PER SHARE (Tables) |
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of information related to EPS calculations | Information related to our EPS calculations is summarized as follows:
|
STOCK-BASED COMPENSATION PLANS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of compensation expense related to stock-based compensation plans | Compensation expense related to stock-based compensation plans for the three and six months ended June 30, 2016, and 2015 is summarized in the following table in thousands:
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Summary of stock option activity | The following tables summarize stock option and LTIP Unit activity for the Equity Plan for GGP for the six months ended June 30, 2016, and 2015:
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Summary of LTIP Unit activity |
|
ACCOUNTS AND NOTES RECEIVABLE, NET (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of significant components of Accounts and notes receivable, net | The following table summarizes the significant components of Accounts and notes receivable, net.
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PREPAID EXPENSES AND OTHER ASSETS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expense and Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of significant components of Prepaid expenses and other assets | The following table summarizes the significant components of Prepaid expenses and other assets.
(1) Includes receivable due from our joint venture partners due upon completion of the redevelopment at Ala Moana (Note 3). (2) Includes receivable due from our joint venture partners related to the acquisition of 218 West 57th Street (Note 3). |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of significant components of Accounts payable and accrued expenses | The following table summarizes the significant components of Accounts payable and accrued expenses.
|
COMMITMENTS AND CONTINGENCIES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of contractual rental expense | The following is a summary of our contractual rental expense as presented in our Consolidated Statements of Comprehensive Income:
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Acquisitions of Operating Properties (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Acquisitions of operating properties | |||||
Gross Asset | $ 802,554 | $ 802,554 | $ 875,779 | ||
Accumulated Amortization | (434,909) | (434,909) | (459,400) | ||
Balance | 367,645 | 367,645 | 416,379 | ||
Amortization/accretion effect on continuing operations | (24,919) | $ (29,007) | (49,104) | $ (77,887) | |
Future amortization/accretion of intangibles | |||||
2016 Remaining | 41,895 | 41,895 | |||
2017 | 65,508 | 65,508 | |||
2018 | 42,620 | 42,620 | |||
2019 | 25,618 | 25,618 | |||
2020 | 17,545 | 17,545 | |||
Tenant leases, In-place value | |||||
Acquisitions of operating properties | |||||
Gross Asset | 348,577 | 348,577 | 409,637 | ||
Accumulated Amortization | (230,113) | (230,113) | (264,616) | ||
Balance | $ 118,464 | $ 118,464 | $ 145,021 |
INCOME TAXES (Details) |
3 Months Ended |
---|---|
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Required minimum percentage distribution of ordinary taxable income to stockholders to qualify as a REIT | 90.00% |
Period of disqualification of REIT status | 4 years |
WARRANTS (Details 2) shares in Millions, $ in Millions |
Jun. 30, 2016
USD ($)
warrant
shares
|
Oct. 15, 2015
warrant
|
Jul. 15, 2015
warrant
|
Apr. 15, 2015
warrant
|
Nov. 09, 2010
warrant
|
---|---|---|---|---|---|
WARRANT LIABILITY | |||||
Issuable Shares | 89,039,571 | 88,433,357 | 87,856,714 | 73,930,000 | |
The Brookfield Investor | |||||
WARRANT LIABILITY | |||||
Number of Warrants | 57,500,000 | ||||
Warrant option exercise price | $ | $ 618 | ||||
Common Stock Shares Issued in Warrant Settlement Transaction | shares | 70 | ||||
Issuable Shares | 64,000,000 |
EARNINGS PER SHARE (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Numerators - Basic and Diluted: | |||||
Net income | $ 189,901 | $ 427,853 | $ 385,238 | $ 1,069,601 | |
Preferred Stock dividends | (3,983) | (3,984) | (7,967) | (7,968) | |
Allocation to noncontrolling interests | (3,956) | (5,913) | (7,513) | (12,932) | |
Net income attributable to common stockholders | $ 181,962 | $ 417,956 | $ 369,758 | $ 1,048,701 | |
Denominators: | |||||
Weighted-average number of common shares outstanding - basic | 883,381,000 | 886,218,000 | 883,027,000 | 885,842,000 | |
Effect of dilutive securities | 68,909,000 | 66,371,000 | 68,202,000 | 67,644,000 | |
Weighted-average number of common shares outstanding - diluted | 952,290,000 | 952,589,000 | 951,229,000 | 953,486,000 | |
Anti-dilutive Securities | 11,958,000 | 11,999,000 | 11,942,000 | 11,764,000 | |
Common stock in treasury, shares | 55,969,390 | 56,619,390 | 55,969,390 | 56,619,390 | 56,240,259 |
Preferred Units | |||||
Denominators: | |||||
Anti-dilutive Securities | 5,415,000 | 5,472,000 | 5,415,000 | 5,472,000 | |
Common Units | |||||
Denominators: | |||||
Anti-dilutive Securities | 4,768,000 | 4,795,000 | 4,768,000 | 4,797,000 | |
LTIP Common Units | |||||
Denominators: | |||||
Anti-dilutive Securities | 1,775,000 | 1,732,000 | 1,759,000 | 1,495,000 |
STOCK-BASED COMPENSATION PLANS (Details) |
3 Months Ended |
---|---|
Jun. 30, 2016
shares
| |
Stock-Based Compensation Plans | |
Shares of common stock reserved for issuance as a percentage of outstanding shares on a fully diluted basis | 4.00% |
Maximum number of shares that can be granted to participant | 4,000,000 |
Stock options | Maximum | Certain employees | |
Stock-Based Compensation Plans | |
Term of awards | 10 years |
STOCK-BASED COMPENSATION PLANS (Details 3) - $ / shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Shares | ||
Exercised (in shares) | (1,789,201) | (1,046,515) |
LTIP Common Units | ||
Shares | ||
Stock options Outstanding at the beginning of the period (in shares) | 1,724,747 | 0 |
Granted (in shares) | 2,640,963 | 1,758,396 |
Exercised (in shares) | 0 | 0 |
Forfeited (in shares) | (38,862) | (8,846) |
Expired (in shares) | 0 | 0 |
Stock options Outstanding at the end of the period (in shares) | 4,326,848 | 1,749,550 |
Weighted Average Exercise Price | ||
Stock options Outstanding at the beginning of the period (in dollars per share) | $ 29.33 | $ 0.00 |
Granted (in dollars per share) | 26.07 | 29.33 |
Exercised (in dollars per share) | 0.00 | 0.00 |
Forfeited (in dollars per share) | 29.15 | 29.15 |
Expired (in dollars per share) | 0.00 | 0.00 |
Stock options Outstanding at the end of the period (in dollars per share) | $ 27.35 | $ 29.33 |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Contractual rent expense, including participation rent | $ 2,139 | $ 2,032 | $ 4,246 | $ 4,332 |
Contractual rent expense, including participation rent and excluding amortization of above and below-market ground leases and straight-line rent | $ 1,560 | $ 1,444 | $ 3,086 | $ 3,141 |
SUBSEQUENT EVENTS (Details) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Aug. 01, 2016 |
Jul. 29, 2016 |
Jul. 21, 2016 |
Jan. 29, 2016 |
Sep. 30, 2016 |
|
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Gross sales price | $ 61.5 | $ 1,250.0 | $ 69.5 | ||
Proceeds from Sale of Property, Plant, and Equipment | $ 6.4 | $ 8.4 | |||
Investment Owned, Balance, Shares | 18.3 | ||||
Sale of Stock, Percentage of Ownership after Transaction | 11.30% | ||||
Ownership in Investment Properties by Joint Venture Percentage | 50.00% | ||||
Cash Paid to Acquire Interest in Joint Venture by Co Venturer | $ 814.0 | $ 16.0 | |||
Provo Towne Centre [Member] | |||||
Subsequent Event [Line Items] | |||||
Gross sales price | $ 37.5 | ||||
Proceeds from Sale of Property, Plant, and Equipment | $ 2.8 | ||||
Ownership in Investment Properties by Joint Venture Percentage | 0.00% |
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