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SEC Filings



10-Q
MACERICH CO filed this Form 10-Q on 11/05/2018
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Depreciation and Amortization:
Depreciation and amortization decreased $8.9 million from 2017 to 2018. The decrease in depreciation and amortization is attributed to decreases of $3.4 million from the JV Transition Center, $3.4 million from the Disposition Properties, $2.0 million from the Same Centers and $0.1 million from the Redevelopment Properties.
Interest Expense:
Interest expense increased $9.6 million from 2017 to 2018. The increase in interest expense was attributed to an increase of $8.1 million from the Same Centers, $2.3 million from borrowings under the Company's line of credit, $2.1 million from the Financing Arrangement (See "Other Transactions and Events" in Management's Overview and Summary), $0.4 million from the Disposition Properties and $0.2 million from the Redevelopment Properties offset in part by a decrease of $3.5 million from the JV Transition Center. The increase in interest expense at the Same Centers is primarily due to the new loans on Green Acres Commons and Freehold Raceway Mall (See "Financing Activities" in Management's Overview and Summary).
The above interest expense items are net of capitalized interest, which increased from $9.4 million in 2017 to $12.8 million in 2018.
Equity in Income of Unconsolidated Joint Ventures:
Equity in income of unconsolidated joint ventures decreased $5.4 million from 2017 to 2018.
Gain (Loss) on Sale or Write Down of Assets, net:
The change in gain (loss) on sale or write down of assets, net was $37.7 million, resulting from a gain of $37.2 million in 2017 and a loss of $0.5 million in 2018. The change in gain (loss) on sale or write down of assets, net is primarily due to the gain of $59.7 million on the sale of Cascade Mall and Northgate Mall in 2017 (See "Acquisitions and Dispositions" in Management's Overview and Summary) and an impairment loss of $36.3 million on SouthPark Mall in 2018 offset in part by the gain of $46.2 million on the sale of a 75% ownership interest in Westside Pavilion in 2018 (See "Acquisitions and Dispositions" in Management's Overview and Summary) and an impairment loss of $12.0 million on Southridge Center in 2017. The impairment losses were due to the reduction in the estimated holding periods of the properties.
Net Income:
Net income decreased $67.4 million from 2017 to 2018, primarily due to the $37.7 million change in gain (loss) on sale or write down of assets, net and the $19.4 million costs related to shareholder activism in 2018, as discussed above.
Funds From Operations ("FFO"):
Primarily as a result of the factors mentioned above, FFO attributable to common stockholders and unit holders—diluted decreased 6.7% from $427.3 million in 2017 to $398.8 million in 2018. For a reconciliation of net income attributable to the Company, the most directly comparable GAAP financial measure, to FFO attributable to common stockholders and unit holders and FFO attributable to common stockholders and unit holders—diluted, see "Funds From Operations ("FFO")" below.
Operating Activities:
Cash provided by operating activities decreased $52.7 million from 2017 to 2018. The decrease is primarily due to the $19.4 million in costs related to shareholder activism in 2018 (See "Other Transactions and Events" in Management's Overview and Summary), changes in assets and liabilities and the results as discussed above.
Investing Activities:
Cash provided by investing activities increased $91.5 million from 2017 to 2018. The increase in cash provided by investing activities is primarily attributed to an increase in distributions from unconsolidated joint ventures of $315.2 million and a decrease in property improvements of $1.6 million offset in part by an increase in contributions to unconsolidated joint ventures of $98.7 million, a decrease in cash proceeds from the sale of assets of $85.4 million and an increase in development, redevelopment, expansion and renovation of properties costs of $42.6 million.
The increase in distributions from unconsolidated joint ventures is primarily due to the distribution of the Company's share of proceeds from the loans placed on Broadway Plaza and Fashion District Philadelphia (See "Financing Activities" in Management's Overview and Summary) and the sale of The Market at Estrella Falls and the sale of an ownership interest in an office building at Fashion District Philadelphia (See "Acquisitions and Dispositions" in Management's Overview and Summary) in 2018. The decrease in cash proceeds from the sale of assets is attributed to the sales of Cascade Mall and

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