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SEC Filings



10-Q
MACERICH CO filed this Form 10-Q on 08/03/2018
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Comparison of Six Months Ended June 30, 2018 and 2017
Revenues:
Rental revenue decreased by $13.7 million, or 4.5%, from 2017 to 2018. The decrease in rental revenue is attributed to a decrease of $5.3 million from the Disposition Properties, $4.8 million from the Redevelopment Properties and $3.6 million from the Same Centers. The amortization of above and below-market leases increased from $1.1 million in 2017 to $1.8 million in 2018. The amortization of straight-line rents increased from $4.5 million in 2017 to $5.4 million in 2018. Lease termination income decreased from $10.4 million in 2017 to $3.4 million in 2018. The decrease in rental revenue at the Same Centers was primarily due to a decrease in lease termination income.
Tenant recoveries decreased $6.5 million, or 4.6%, from 2017 to 2018. The decrease in tenant recoveries is attributed to a decrease of $4.4 million from the Same Centers, $1.7 million from the Redevelopment Properties and $0.4 million from the Disposition Properties.
Management Companies' revenue decreased from $21.9 million in 2017 to $21.0 million in 2018.
Shopping Center and Operating Expenses:
Shopping center and operating expenses decreased $4.3 million, or 3.0%, from 2017 to 2018. The decrease in shopping center and operating expenses is attributed to a decrease of $4.0 million from the Disposition Properties and $2.3 million from the Redevelopment Properties offset in part by an increase of $2.0 million from the Same Centers.
Management Companies' Operating Expenses:
Management Companies' operating expenses increased $4.6 million from 2017 to 2018. The increase is attributed to a one-time charge of $12.7 million in connection with the Company's reduction in work force in 2018 (See "Other Transactions and Events" in Management's Overview and Summary) offset in part by a reduction in payroll and share and unit-based compensation costs.
REIT General and Administrative Expenses:
REIT general and administrative expenses decreased $2.9 million from 2017 to 2018 due to a reduction in compensation costs.
Costs Related to Shareholder Activism
The Company incurred $19.4 million in costs related to shareholder activism in 2018 (See "Other Transactions and Events" in Management's Overview and Summary).
Depreciation and Amortization:
Depreciation and amortization decreased $7.5 million from 2017 to 2018. The decrease in depreciation and amortization is attributed to a decrease of $3.5 million from the Same Centers, $2.0 million from the Redevelopment Properties and $2.0 million from the Disposition Properties.
Interest Expense:
Interest expense increased $7.9 million from 2017 to 2018. The increase in interest expense was attributed to an increase of $4.9 million from the Same Centers, $3.1 million from the Financing Arrangement (See "Other Transactions and Events" in Management's Overview and Summary), $2.2 million from borrowings under the Company's line of credit and $0.2 million from the Disposition Properties offset in part by a decrease of $2.5 million from the Redevelopment Properties.
The above interest expense items are net of capitalized interest, which increased from $6.0 million in 2017 to $9.0 million in 2018.
Equity in Income of Unconsolidated Joint Ventures:
Equity in income of unconsolidated joint ventures decreased $0.2 million from 2017 to 2018.
(Loss) Gain on Sale or Write Down of Assets, net:
The change in (loss) gain on sale or write down of assets, net was $96.1 million, resulting from a gain of $49.1 million in 2017 and a loss of $47.0 million in 2018. The change in (loss) gain on sale or write down of assets, net is primarily due to impairment losses of $36.3 million on SouthPark Mall, $7.5 million on two freestanding stores, $1.7 million on Southridge Center and $1.0 million on Promenade at Casa Grande in 2018, the gain of $59.7 million on the sale of Cascade Mall and

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