MAC - 6.30.2014- 10Q


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2014
Commission File No. 1-12504
THE MACERICH COMPANY
(Exact name of registrant as specified in its charter)
MARYLAND
 
95-4448705
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer Identification Number)
401 Wilshire Boulevard, Suite 700, Santa Monica, California 90401
 (Address of principal executive office, including zip code)
(310) 394-6000
 (Registrant's telephone number, including area code)
N/A
 (Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve (12) months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past ninety (90) days.
YES x       NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding twelve (12) months (or for such shorter period that the registrant was required to submit and post such files).
YES x        NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer x
 
Accelerated filer o
 
Non-accelerated filer o (Do not check if a smaller
reporting company)
 
Smaller reporting company  o 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES o       NO x
Number of shares outstanding as of July 31, 2014 of the registrant's common stock, par value $0.01 per share: 140,714,194 shares




THE MACERICH COMPANY
FORM 10-Q
INDEX
Part I
 
Financial Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Part II
 
Other Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2

Table of Contents


THE MACERICH COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
(Unaudited)
 
June 30,
2014
 
December 31,
2013
ASSETS:
 
 
 
Property, net
$
7,556,064

 
$
7,621,766

Cash and cash equivalents
56,500

 
69,715

Restricted cash
15,423

 
16,843

Tenant and other receivables, net
97,900

 
99,497

Deferred charges and other assets, net
506,778

 
533,058

Loans to unconsolidated joint ventures
3,396

 
2,756

Due from affiliates
29,192

 
30,132

Investments in unconsolidated joint ventures
797,010

 
701,483

Total assets
$
9,062,263

 
$
9,075,250

LIABILITIES AND EQUITY:
 
 
 
Mortgage notes payable:
 
 
 
Related parties
$
266,658

 
$
269,381

Others
4,106,731

 
4,145,809

Total
4,373,389

 
4,415,190

Bank and other notes payable
386,718

 
167,537

Accounts payable and accrued expenses
66,652

 
76,941

Other accrued liabilities
306,899

 
363,158

Distributions in excess of investments in unconsolidated joint ventures
261,073

 
252,192

Co-venture obligation
76,854

 
81,515

Total liabilities
5,471,585

 
5,356,533

Commitments and contingencies

 

Equity:
 
 
 
Stockholders' equity:
 
 
 
Common stock, $0.01 par value, 250,000,000 shares authorized, 140,907,420 and 140,733,683 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively
1,409

 
1,407

Additional paid-in capital
3,925,713

 
3,906,148

Accumulated deficit
(689,497
)
 
(548,806
)
Total stockholders' equity
3,237,625

 
3,358,749

Noncontrolling interests
353,053

 
359,968

Total equity
3,590,678

 
3,718,717

Total liabilities and equity
$
9,062,263

 
$
9,075,250

   The accompanying notes are an integral part of these consolidated financial statements.

3

Table of Contents

THE MACERICH COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
Revenues:
 
 
 
 
 
 
 
Minimum rents
$
149,220

 
$
140,214

 
$
300,852

 
$
277,241

Percentage rents
2,372

 
2,516

 
5,222

 
6,498

Tenant recoveries
83,375

 
81,674

 
174,850

 
160,632

Management Companies
8,776

 
10,301

 
16,897

 
20,451

Other
10,594

 
11,173

 
21,024

 
24,361

Total revenues
254,337

 
245,878

 
518,845

 
489,183

Expenses:
 
 
 
 
 
 
 
Shopping center and operating expenses
81,865

 
78,682

 
172,225

 
157,290

Management Companies' operating expenses
20,896

 
22,816

 
43,677

 
45,965

REIT general and administrative expenses
5,123

 
6,693

 
12,006

 
12,717

Depreciation and amortization
87,801

 
88,579

 
176,457

 
175,596

 
195,685

 
196,770

 
404,365

 
391,568

Interest expense:
 
 
 
 
 
 
 
Related parties
3,690

 
3,764

 
7,398

 
7,544

Other
42,110

 
46,611

 
84,740

 
92,513

 
45,800

 
50,375

 
92,138

 
100,057

(Gain) loss on extinguishment of debt, net

 
(1,943
)
 
358

 
(1,943
)
Total expenses
241,485

 
245,202

 
496,861

 
489,682

Equity in income of unconsolidated joint ventures
13,903

 
92,201

 
27,672

 
110,316

Co-venture expense
(2,212
)
 
(2,138
)
 
(4,032
)
 
(4,179
)
Income tax benefit
2,898

 
1,477

 
3,070

 
1,721

(Loss) gain on remeasurement, sale or write down of assets, net
(9,455
)
 
(798
)
 
(11,065
)
 
4,030

Income from continuing operations
17,986

 
91,418

 
37,629

 
111,389

Discontinued operations:
 
 
 
 
 
 
 
Gain on the disposition of assets, net

 
141,906

 

 
141,912

Income from discontinued operations

 
1,492

 

 
4,044

Total income from discontinued operations

 
143,398

 

 
145,956

Net income
17,986

 
234,816

 
37,629

 
257,345

Less net income attributable to noncontrolling interests
1,898

 
15,819

 
3,722

 
20,256

Net income attributable to the Company
$
16,088

 
$
218,997

 
$
33,907

 
$
237,089

Earnings per common share attributable to Company—basic:
 
 
 
 
 
 
 
Income from continuing operations
$
0.11

 
$
0.61

 
$
0.24

 
$
0.73

Discontinued operations

 
0.96

 

 
0.98

Net income attributable to common stockholders
$
0.11

 
$
1.57

 
$
0.24

 
$
1.71

Earnings per common share attributable to Company—diluted:
 
 
 
 
 
 
 
Income from continuing operations
$
0.11

 
$
0.61

 
$
0.24

 
$
0.73

Discontinued operations

 
0.96

 

 
0.98

Net income attributable to common stockholders
$
0.11

 
$
1.57

 
$
0.24

 
$
1.71

Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
140,894,000

 
139,372,000

 
140,831,000

 
138,460,000

Diluted
141,036,000

 
139,526,000

 
140,929,000

 
138,581,000

   The accompanying notes are an integral part of these consolidated financial statements.

4

Table of Contents

THE MACERICH COMPANY
CONSOLIDATED STATEMENT OF EQUITY
(Dollars in thousands, except per share data)
(Unaudited)
 
Stockholders' Equity
 
 
 
 
 
Common Stock
 
 
 
 
 
 
 
 
 
 
 
Shares
 
Par
Value
 
Additional
Paid-in
Capital
 
Accumulated
Deficit
 
Total
Stockholders'
Equity
 
Noncontrolling
Interests
 
Total Equity
Balance at January 1, 2014
140,733,683

 
$
1,407

 
$
3,906,148

 
$
(548,806
)
 
$
3,358,749

 
$
359,968

 
$
3,718,717

Net income

 

 

 
33,907

 
33,907

 
3,722

 
37,629

Amortization of share and unit-based compensation plans
88,447

 
1

 
25,199

 

 
25,200

 

 
25,200

Employee stock purchases
13,957

 

 
645

 

 
645

 

 
645

Distributions paid ($1.24) per share

 

 

 
(174,598
)
 
(174,598
)
 

 
(174,598
)
Distributions to noncontrolling interests

 

 

 

 

 
(16,602
)
 
(16,602
)
Other

 

 
(92
)
 

 
(92
)
 

 
(92
)
Conversion of noncontrolling interests to common shares
71,333

 
1

 
983

 

 
984

 
(984
)
 

Redemption of noncontrolling interests

 

 
(147
)
 

 
(147
)
 
(74
)
 
(221
)
Adjustment of noncontrolling interest in Operating Partnership

 

 
(7,023
)
 

 
(7,023
)
 
7,023

 

Balance at June 30, 2014
140,907,420

 
$
1,409

 
$
3,925,713

 
$
(689,497
)
 
$
3,237,625

 
$
353,053

 
$
3,590,678

   The accompanying notes are an integral part of these consolidated financial statements.

5

Table of Contents

THE MACERICH COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
 
For the Six Months Ended June 30,
 
2014
 
2013
Cash flows from operating activities:
 
 
 
Net income
$
37,629

 
$
257,345

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Loss (gain) on extinguishment of debt
358

 
(1,943
)
Loss (gain) on remeasurement, sale or write down of assets, net
11,065

 
(4,030
)
Gain on the disposition of assets, net from discontinued operations

 
(141,912
)
Depreciation and amortization
180,374

 
191,431

Amortization of net premium on mortgage notes payable
(2,704
)
 
(4,464
)
Amortization of share and unit-based plans
20,839

 
8,780

Straight-line rent adjustment
(3,098
)
 
(3,851
)
Amortization of above and below-market leases
(2,719
)
 
(3,042
)
Provision for doubtful accounts
3,430

 
2,583

Income tax benefit
(3,070
)
 
(1,721
)
Equity in income of unconsolidated joint ventures
(27,672
)
 
(110,316
)
Distributions of income from unconsolidated joint ventures
177

 
8,022

Co-venture expense
4,032

 
4,179

Changes in assets and liabilities, net of acquisitions and dispositions:
 
 
 
Tenant and other receivables
10,966

 
8,624

Other assets
487

 
10,774

Due from affiliates
940

 
(349
)
Accounts payable and accrued expenses
(15,085
)
 
(3,653
)
Other accrued liabilities
(25,377
)
 
(33,670
)
Net cash provided by operating activities
190,572

 
182,787

Cash flows from investing activities:
 
 
 
Acquisitions of property
(15,233
)
 
(492,577
)
Development, redevelopment, expansion and renovation of properties
(82,457
)
 
(86,982
)
Property improvements
(14,597
)
 
(11,049
)
Issuance of notes receivable

 
(13,330
)
Proceeds from maturities of marketable securities

 
689

Deferred leasing costs
(13,772
)
 
(16,769
)
Distributions from unconsolidated joint ventures
33,382

 
220,102

Contributions to unconsolidated joint ventures
(108,316
)
 
(42,616
)
Collection of/loans to unconsolidated joint ventures, net
(640
)
 
596

Proceeds from sale of assets
25,414

 
315,059

Restricted cash
1,420

 
6,398

Net cash used in investing activities
(174,799
)
 
(120,479
)
 
 
 
 

6

Table of Contents

THE MACERICH COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Dollars in thousands)
(Unaudited)
 
For the Six Months Ended June 30,
 
2014
 
2013
Cash flows from financing activities:
 
 
 
Proceeds from mortgages, bank and other notes payable
301,655

 
2,093,503

Payments on mortgages, bank and other notes payable
(121,571
)
 
(2,156,635
)
Deferred financing costs
(603
)
 
(5,503
)
Net proceeds from stock offerings

 
171,174

Proceeds from share and unit-based plans
645

 
459

Redemption of noncontrolling interests
(221
)
 
(1,022
)
Contingent consideration paid
(9,000
)
 

Dividends and distributions
(191,200
)
 
(173,417
)
Distributions to co-venture partner
(8,693
)
 
(9,717
)
Net cash used in financing activities
(28,988
)
 
(81,158
)
Net decrease in cash and cash equivalents
(13,215
)
 
(18,850
)
Cash and cash equivalents, beginning of period
69,715

 
65,793

Cash and cash equivalents, end of period
$
56,500

 
$
46,943

Supplemental cash flow information:
 
 
 
Cash payments for interest, net of amounts capitalized
$
97,083

 
$
113,201

Non-cash transactions:
 
 
 
Accrued development costs included in accounts payable and accrued expenses and other accrued liabilities
$
24,933

 
$
23,063

Acquisition of property in exchange for investment in unconsolidated joint venture
$
15,767

 
$

Notes receivable issued in connection with sale of property
$
9,603

 
$

Application of deposit to acquire property
$

 
$
30,000

Conversion of noncontrolling interests to common shares
$
984

 
$
12,984

The accompanying notes are an integral part of these consolidated financial statements.

7

Table of Contents

THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
1.
Organization:
The Macerich Company (the "Company") is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and community/power shopping centers (the "Centers") located throughout the United States.
The Company commenced operations effective with the completion of its initial public offering on March 16, 1994. As of June 30, 2014, the Company was the sole general partner of, and held a 93% ownership interest in, The Macerich Partnership, L.P. (the "Operating Partnership"). The Company was organized to qualify as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code").
The property management, leasing and redevelopment of the Company's portfolio is provided by the Company's management companies, Macerich Property Management Company, LLC, a single member Delaware limited liability company, Macerich Management Company, a California corporation, Macerich Arizona Partners LLC, a single member Arizona limited liability company, Macerich Arizona Management LLC, a single member Delaware limited liability company, Macerich Partners of Colorado LLC, a Colorado limited liability company, MACW Mall Management, Inc., a New York corporation, and MACW Property Management, LLC, a single member New York limited liability company. All seven of the management companies are collectively referred to herein as the "Management Companies."
All references to the Company in this Quarterly Report on Form 10-Q include the Company, those entities owned or controlled by the Company and predecessors of the Company, unless the context indicates otherwise.
2.
Summary of Significant Accounting Policies:
Basis of Presentation:
The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements and have not been audited by independent public accountants.
The accompanying consolidated financial statements include the accounts of the Company and the Operating Partnership. Investments in entities in which the Company has a controlling financial interest or entities that meet the definition of a variable interest entity in which the Company has, as a result of ownership, contractual or other financial interests, both the power to direct activities that most significantly impact the economic performance of the variable interest entity and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the variable interest entity are consolidated; otherwise they are accounted for under the equity method of accounting and are reflected as investments in unconsolidated joint ventures.
All intercompany accounts and transactions have been eliminated in the consolidated financial statements.
The unaudited interim consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the consolidated financial statements for the interim periods have been made. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accompanying consolidated balance sheet as of December 31, 2013 has been derived from the audited financial statements, but does not include all disclosures required by GAAP.

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Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
2. Summary of Significant Accounting Policies: (Continued)

Recent Accounting Pronouncements:
On April 10, 2014, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2014-08, which amends the definition of discontinued operations and requires additional disclosures for disposal transactions that do not meet the revised discontinued operations criteria. ASU 2014-08 is required to be adopted for fiscal years beginning after December 15, 2014, with early adoption permitted. The Company's early adoption of this pronouncement on January 1, 2014 did not have a material impact on the Company's consolidated financial statements.
3.
Earnings per Share ("EPS"):
The following table reconciles the numerator and denominator used in the computation of earnings per share for the three and six months ended June 30, 2014 and 2013 (shares in thousands):
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
Numerator
 
 
 
 
 
 
 
Income from continuing operations
$
17,986

 
$
91,418

 
$
37,629

 
$
111,389

Income from discontinued operations

 
143,398

 

 
145,956

Net income attributable to noncontrolling interests
(1,898
)
 
(15,819
)
 
(3,722
)
 
(20,256
)
Net income attributable to the Company
16,088

 
218,997

 
33,907

 
237,089

Allocation of earnings to participating securities
(120
)
 
(217
)
 
(248
)
 
(216
)
Numerator for basic and diluted earnings per share—net income attributable to common stockholders
$
15,968

 
$
218,780

 
$
33,659

 
$
236,873

Denominator
 
 
 
 
 
 
 
Denominator for basic earnings per share—weighted average number of common shares outstanding
140,894

 
139,372

 
140,831

 
138,460

Effect of dilutive securities:(1)
 
 
 
 
 
 
 
Share and unit-based compensation plans
142

 
154

 
98

 
121

Denominator for diluted earnings per share—weighted average number of common shares outstanding
141,036

 
139,526

 
140,929

 
138,581

Earnings per common share—basic:
 
 
 
 
 
 
 
Income from continuing operations
$
0.11

 
$
0.61

 
$
0.24

 
$
0.73

Discontinued operations

 
0.96

 

 
0.98

Net income attributable to common stockholders
$
0.11

 
$
1.57

 
$
0.24

 
$
1.71

Earnings per common share—diluted:
 
 
 
 
 
 
 
Income from continuing operations
$
0.11

 
$
0.61

 
$
0.24

 
$
0.73

Discontinued operations

 
0.96

 

 
0.98

Net income attributable to common stockholders
$
0.11

 
$
1.57

 
$
0.24

 
$
1.71

 
 
 
(1)
Diluted EPS excludes 184,304 convertible preferred units for the three and six months ended June 30, 2014 and 2013 as their impact was antidilutive.
Diluted EPS excludes 10,113,486 and 9,938,795 Operating Partnership units ("OP Units") for the three months ended June 30, 2014 and 2013, respectively, and 10,052,805 and 10,072,120 OP Units for the six months ended June 30, 2014 and 2013, respectively, as their impact was antidilutive.

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Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

4.
Investments in Unconsolidated Joint Ventures:
The Company has made the following recent investments and dispositions relating to its unconsolidated joint ventures:
On May 29, 2013, the Company's joint venture in Pacific Premier Retail LP sold Redmond Town Center Office, a 582,000 square foot office building in Redmond, Washington, for $185,000, resulting in a gain on the sale of assets of $89,157 to the joint venture. The Company's share of the gain was $44,424, which was included in equity in income of unconsolidated joint ventures. The Company used its share of the proceeds from the sale to pay down its line of credit and for general corporate purposes.
On June 12, 2013, the Company's joint venture in Pacific Premier Retail LP sold Kitsap Mall, an 846,000 square foot regional shopping center in Silverdale, Washington, for $127,000, resulting in a gain on the sale of assets of $55,150 to the joint venture. The Company's share of the gain was $28,127, which was included in equity in income of unconsolidated joint ventures. The Company used its share of the proceeds from the sale to pay down its line of credit and for general corporate purposes.
On August 1, 2013, the Company's joint venture in Pacific Premier Retail LP sold Redmond Town Center, a 695,000 square foot community center in Redmond, Washington, for $127,000, resulting in a gain on the sale of assets of $38,447 to the joint venture. The Company's share of the gain was $18,251, which was included in equity in income of unconsolidated joint ventures. The Company used its share of the proceeds from the sale to pay down its line of credit and for general corporate purposes.
On September 17, 2013, the Company’s joint venture in Camelback Colonnade, a 619,000 square foot community center in Phoenix, Arizona, was restructured. As a result of the restructuring, the Company’s ownership interest in Camelback Colonnade decreased from 73.2% to 67.5%. Prior to the restructuring, the Company had accounted for its investment in Camelback Colonnade under the equity method of accounting due to substantive participation rights held by the outside partners. Upon completion of the restructuring, these substantive participation rights were terminated and the Company obtained voting control of the joint venture. This transaction is referred to herein as the "Camelback Colonnade Restructuring." Since the date of the restructuring, the Company has included Camelback Colonnade in its consolidated financial statements (See Note 13Acquisitions).
On October 8, 2013, the Company's joint venture in Ridgmar Mall, a 1,273,000 square foot regional shopping center in Fort Worth, Texas, sold the property for $60,900, resulting in a gain on the sale of assets of $6,243 to the joint venture. The Company's share of the gain was $3,121, which was included in equity in income from joint ventures. The cash proceeds from the sale were used to pay off the $51,657 mortgage loan on the property and the remaining $9,243, net of closing costs, was distributed to the partners. The Company used its share of the proceeds from the sale to pay down its line of credit and for general corporate purposes.
On October 24, 2013, the Company acquired the remaining 33.3% ownership interest in Superstition Springs Center, a 1,082,000 square foot regional shopping center in Mesa, Arizona, that it did not own for $46,162. The purchase price was funded by a cash payment of $23,662 and the assumption of the third party's pro rata share of the mortgage note payable on the property of $22,500. Prior to the acquisition, the Company had accounted for its investment in Superstition Springs Center under the equity method. Since the date of acquisition, the Company has included Superstition Springs Center in its consolidated financial statements (See Note 13Acquisitions).
On June 4, 2014, the Company acquired the remaining 49.0% ownership interest in Cascade Mall, a 593,000 square foot regional shopping center in Burlington, Washington, that it did not own for a cash payment of $15,233. The Company purchased Cascade Mall from its joint venture in Pacific Premier Retail LP. Prior to the acquisition, the Company had accounted for its investment in Cascade Mall under the equity method. Since the date of acquisition, the Company has included Cascade Mall in its consolidated financial statements (See Note 13Acquisitions).



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Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
4. Investments in Unconsolidated Joint Ventures: (Continued)

Combined and condensed balance sheets and statements of operations are presented below for all unconsolidated joint ventures.
Combined and Condensed Balance Sheets of Unconsolidated Joint Ventures:
 
June 30,
2014
 
December 31,
2013
Assets(1):
 
 
 
Properties, net
$
3,546,003

 
$
3,435,737

Other assets
351,692

 
295,719

Total assets
$
3,897,695

 
$
3,731,456

Liabilities and partners' capital(1):
 
 
 
Mortgage notes payable(2)
$
3,495,673

 
$
3,518,215

Other liabilities
213,190

 
202,444

Company's capital (deficit)
62,527

 
(25,367
)
Outside partners' capital
126,305

 
36,164

Total liabilities and partners' capital
$
3,897,695

 
$
3,731,456

Investments in unconsolidated joint ventures:
 
 
 
Company's capital (deficit)
$
62,527

 
$
(25,367
)
Basis adjustment(3)
473,410

 
474,658

 
$
535,937

 
$
449,291

 
 
 
 
Assets—Investments in unconsolidated joint ventures
$
797,010

 
$
701,483

Liabilities—Distributions in excess of investments in unconsolidated joint ventures
(261,073
)
 
(252,192
)
 
$
535,937

 
$
449,291

 
 
 

11

Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
4. Investments in Unconsolidated Joint Ventures: (Continued)

(1)
These amounts include the assets and liabilities of the following joint ventures as of June 30, 2014 and December 31, 2013:
 
Pacific
Premier
Retail LP
 
Tysons
Corner LLC
As of June 30, 2014:
 
 
 
Total Assets
$
728,501

 
$
382,035

Total Liabilities
$
804,884

 
$
878,571

As of December 31, 2013:
 
 
 
Total Assets
$
775,012

 
$
356,871

Total Liabilities
$
812,725

 
$
887,413

(2)
Certain mortgage notes payable could become recourse debt to the Company should the joint venture be unable to discharge the obligations of the related debt. As of June 30, 2014 and December 31, 2013, a total of $33,540 could become recourse debt to the Company. As of June 30, 2014 and December 31, 2013, the Company had an indemnity agreement from a joint venture partner for $16,770 of the guaranteed amount.
Included in mortgage notes payable are amounts due to affiliates of Northwestern Mutual Life ("NML") of $706,584 and $712,455 as of June 30, 2014 and December 31, 2013, respectively. NML is considered a related party because it is a joint venture partner with the Company in Macerich Northwestern Associates—Broadway Plaza. Interest expense on these borrowings was $9,623 and $6,854 for the three months ended June 30, 2014 and 2013, respectively, and $19,347 and $13,797 for the six months ended June 30, 2014 and 2013, respectively.
(3)
The Company amortizes the difference between the cost of its investments in unconsolidated joint ventures and the book value of the underlying equity into income on a straight-line basis consistent with the lives of the underlying assets. The amortization of this difference was $855 and $2,334 for the three months ended June 30, 2014 and 2013, respectively, and $2,279 and $3,259 for the six months ended June 30, 2014 and 2013, respectively.


12

Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
4. Investments in Unconsolidated Joint Ventures: (Continued)

Combined and Condensed Statements of Operations of Unconsolidated Joint Ventures:

 
Pacific
Premier
Retail LP
 
Tysons
Corner
LLC
 
Other
Joint
Ventures
 
Total
Three Months Ended June 30, 2014
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
Minimum rents
$
25,654

 
$
15,696

 
$
56,289

 
$
97,639

Percentage rents
550

 
180

 
3,264

 
3,994

Tenant recoveries
11,379

 
11,489

 
24,260

 
47,128

Other
1,613

 
929

 
8,443

 
10,985

Total revenues
39,196

 
28,294

 
92,256

 
159,746

Expenses:
 
 
 
 
 
 
 
Shopping center and operating expenses
10,682

 
9,521

 
30,258

 
50,461

Interest expense
9,831

 
7,653

 
19,495

 
36,979

Depreciation and amortization
8,750

 
4,756

 
21,239

 
34,745

Total operating expenses
29,263

 
21,930

 
70,992

 
122,185

Loss on remeasurement, sale or write down of assets, net
(6,226
)
 

 
(42
)
 
(6,268
)
Net income
$
3,707

 
$
6,364

 
$
21,222

 
$
31,293

Company's equity in net income
$
1,218

 
$
1,611

 
$
11,074

 
$
13,903

Three Months Ended June 30, 2013
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
Minimum rents
$
31,221

 
$
15,685

 
$
59,969

 
$
106,875

Percentage rents
594

 
180

 
2,936

 
3,710

Tenant recoveries
14,486

 
11,697

 
26,688

 
52,871

Other
1,643

 
652

 
11,367

 
13,662

Total revenues
47,944

 
28,214

 
100,960

 
177,118

Expenses:
 
 
 
 
 
 
 
Shopping center and operating expenses
14,269

 
8,519

 
34,790

 
57,578

Interest expense
11,293

 
1,784

 
20,929

 
34,006

Depreciation and amortization
10,720

 
4,501

 
23,299

 
38,520

Total operating expenses
36,282

 
14,804

 
79,018

 
130,104

Gain on remeasurement, sale or write down of assets, net
144,349

 

 
891

 
145,240

Net income
$
156,011

 
$
13,410

 
$
22,833

 
$
192,254

Company's equity in net income
$
78,426

 
$
5,161

 
$
8,614

 
$
92,201



13

Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
4. Investments in Unconsolidated Joint Ventures: (Continued)

 
Pacific
Premier
Retail LP
 
Tysons
Corner
LLC
 
Other
Joint
Ventures
 
Total
Six Months Ended June 30, 2014
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
Minimum rents
$
51,734

 
$
31,974

 
$
112,188

 
$
195,896

Percentage rents
1,209

 
604

 
4,232

 
6,045

Tenant recoveries
23,119

 
23,383

 
49,371

 
95,873

Other
2,690

 
1,616

 
16,298

 
20,604

Total revenues
78,752

 
57,577

 
182,089

 
318,418

Expenses:
 
 
 
 
 
 
 
Shopping center and operating expenses
21,813

 
19,680

 
64,138

 
105,631

Interest expense
19,929

 
15,483

 
39,066

 
74,478

Depreciation and amortization
17,548

 
9,358

 
42,762

 
69,668

Total operating expenses
59,290

 
44,521

 
145,966

 
249,777

Loss on remeasurement, sale or write down of assets, net
(6,312
)
 

 
(60
)
 
(6,372
)
Net income
$
13,150

 
$
13,056

 
$
36,063

 
$
62,269

Company's equity in net income
$
5,486

 
$
3,369

 
$
18,817

 
$
27,672

Six Months Ended June 30, 2013
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
Minimum rents
$
64,353

 
$
31,182

 
$
120,930

 
$
216,465

Percentage rents
1,583

 
746

 
4,238

 
6,567

Tenant recoveries
28,440

 
22,721

 
53,900

 
105,061

Other
2,894

 
1,570

 
18,780

 
23,244

Total revenues
97,270

 
56,219

 
197,848

 
351,337

Expenses:
 
 
 
 
 
 
 
Shopping center and operating expenses
28,717

 
17,001

 
70,961

 
116,679

Interest expense
22,867

 
4,024

 
45,046

 
71,937

Depreciation and amortization
21,630

 
8,931

 
45,120

 
75,681

Total operating expenses
73,214

 
29,956

 
161,127

 
264,297

Gain on remeasurement, sale or write down of assets, net
144,349

 

 
701

 
145,050

Net income
$
168,405

 
$
26,263

 
$
37,422

 
$
232,090

Company's equity in net income
$
84,117

 
$
10,038

 
$
16,161

 
$
110,316

Significant accounting policies used by the unconsolidated joint ventures are similar to those used by the Company.

14

Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

5.
Property:
Property consists of the following:
 
June 30,
2014
 
December 31,
2013
Land
$
1,716,154

 
$
1,707,005

Buildings and improvements
6,508,046

 
6,555,212

Tenant improvements
539,313

 
537,754

Equipment and furnishings
155,094

 
152,198

Construction in progress
285,816

 
229,169

 
9,204,423

 
9,181,338

Less accumulated depreciation
(1,648,359
)
 
(1,559,572
)
 
$
7,556,064

 
$
7,621,766

Depreciation expense was $68,017 and $65,737 for the three months ended June 30, 2014 and 2013, respectively, and $136,495 and $131,633 for the six months ended June 30, 2014 and 2013, respectively.
The (loss) gain on remeasurement, sale or write down of assets, net, for the three and six months ended June 30, 2014 includes an impairment loss of $8,516 due to the reduction of the estimated holding periods of three freestanding stores.
The (loss) gain on remeasurement, sale or write down of assets, net, for the six months ended June 30, 2014 includes the loss of $1,685 on the sales of Rotterdam Square, a 585,000 square foot regional shopping center in Schenectady, New York; Somersville Towne Center, a 348,000 square foot regional shopping center in Antioch, California; and Lake Square Mall, a 559,000 square foot regional shopping center in Leesburg, Florida. The (loss) gain on remeasurement, sale or write down of assets, net, includes the gains on the sale of land of $238 for the three and six months ended June 30, 2014 and $5,401 for the six months ended June 30, 2013.
In addition, the (loss) gain on remeasurement, sale or write down of assets, net, includes the write-off of development costs of $1,177 and $798 for the three months ended June 30, 2014 and 2013, respectively, and $1,102 and $1,371 for the six months ended June 30, 2014 and 2013, respectively.
6.
Tenant and Other Receivables, net:
Included in tenant and other receivables, net, is an allowance for doubtful accounts of $5,178 and $2,878 at June 30, 2014 and December 31, 2013, respectively. Also included in tenant and other receivables, net, are accrued percentage rents of $1,758 and $9,824 at June 30, 2014 and December 31, 2013, respectively, and a deferred rent receivable due to straight-line rent adjustments of $55,902 and $53,380 at June 30, 2014 and December 31, 2013, respectively.
On March 17, 2014, in connection with the sale of Lake Square Mall (See Note 5Property), the Company issued a note receivable for $6,500 that bears interest at an effective rate of 6.5% and matures on March 17, 2018 and a note receivable for $3,103 that bears interest at 5.0% and matures on December 31, 2014. The balance of each of these notes receivable at June 30, 2014 was $6,484 and $2,879, respectively. The notes are collateralized by a trust deed on Lake Square Mall.


15

Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

7.
Deferred Charges and Other Assets, net:
Deferred charges and other assets, net, consist of the following:
 
June 30,
2014
 
December 31,
2013
Leasing
$
221,671

 
$
223,038

Financing
50,372

 
51,695

Intangible assets:
 
 
 
In-place lease values
190,390

 
205,651

Leasing commissions and legal costs
47,754

 
50,594

Above-market leases
114,493

 
118,770

Deferred tax assets
34,426

 
31,356

Deferred compensation plan assets
34,265

 
30,932

Other assets
61,916

 
65,793

 
755,287

 
777,829

Less accumulated amortization(1)
(248,509
)
 
(244,771
)
 
$
506,778

 
$
533,058


 
 
 
(1)
Accumulated amortization includes $88,752 and $89,141 relating to in-place lease values, leasing commissions and legal costs at June 30, 2014 and December 31, 2013, respectively. Amortization expense of in-place lease values, leasing commissions and legal costs was $11,360 and $14,424 for the three months ended June 30, 2014 and 2013, respectively, and $24,098 and $28,090 for the six months ended June 30, 2014 and 2013, respectively.
The allocated values of above-market leases and below-market leases consist of the following:
 
June 30,
2014
 
December 31,
2013
Above-Market Leases
 
 
 
Original allocated value
$
114,493

 
$
118,770

Less accumulated amortization
(51,628
)
 
(46,912
)
 
$
62,865

 
$
71,858

Below-Market Leases(1)
 
 
 
Original allocated value
$
186,398

 
$
187,537

Less accumulated amortization
(85,325
)
 
(79,271
)
 
$
101,073

 
$
108,266


 
 
 
(1)
Below-market leases are included in other accrued liabilities.


16

Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

8.
Mortgage Notes Payable:
Mortgage notes payable at June 30, 2014 and December 31, 2013 consist of the following:
 
 
Carrying Amount of Mortgage Notes(1)
 
 
 
 
 
 
 
 
June 30, 2014
 
December 31, 2013
 
 
 
 
 
 
Property Pledged as Collateral
 
Related Party
 
Other
 
Related Party
 
Other
 
Effective Interest
Rate(2)
 
Monthly
Debt
Service(3)
 
Maturity
Date(4)
Arrowhead Towne Center
 
$

 
$
232,388

 
$

 
$
236,028

 
2.76
%
 
$
1,131

 
2018
Camelback Colonnade
 

 
48,529

 

 
49,120

 
2.16
%
 
178

 
2015
Chandler Fashion Center(5)
 

 
200,000

 

 
200,000

 
3.77
%
 
625

 
2019
Danbury Fair Mall
 
115,712

 
115,712

 
117,120

 
117,120

 
5.53
%
 
1,538

 
2020
Deptford Mall
 

 
199,726

 

 
201,622

 
3.76
%
 
947

 
2023
Deptford Mall
 

 
14,419

 

 
14,551

 
6.46
%
 
101

 
2016
Eastland Mall
 

 
168,000

 

 
168,000

 
5.79
%
 
811

 
2016
Fashion Outlets of Chicago(6)
 

 
113,040

 

 
91,383

 
2.95
%
 
233

 
2017
Fashion Outlets of Niagara Falls USA
 

 
122,706

 

 
124,030

 
4.89
%
 
727

 
2020
Flagstaff Mall
 

 
37,000

 

 
37,000

 
5.03
%
 
151

 
2015
FlatIron Crossing
 

 
264,778

 

 
268,000

 
3.90
%
 
1,393

 
2021
Freehold Raceway Mall(5)
 

 
231,255

 

 
232,900

 
4.20
%
 
805

 
2018
Fresno Fashion Fair
 
78,754

 
78,753

 
79,391

 
79,390

 
6.76
%
 
1,104

 
2015
Great Northern Mall(7)
 

 
34,993

 

 
35,484

 
6.54
%
 
234

 
2015
Green Acres Mall
 

 
316,694

 

 
319,850

 
3.61
%
 
1,447

 
2021
Kings Plaza Shopping Center
 

 
485,674

 

 
490,548

 
3.67
%
 
2,229

 
2019
Northgate Mall(8)
 

 
64,000

 

 
64,000

 
3.03
%
 
128

 
2017
Oaks, The
 

 
212,239

 

 
214,239

 
4.14
%
 
1,064

 
2022
Pacific View
 

 
134,531

 

 
135,835

 
4.08
%
 
668

 
2022
Santa Monica Place
 

 
232,904

 

 
235,445

 
2.99
%
 
1,004

 
2018
SanTan Village Regional Center
 

 
135,222

 

 
136,629

 
3.14
%
 
589

 
2019
South Plains Mall(9)
 

 
72,089

 

 
99,833

 
4.78
%
 
383

 
2015
Superstition Springs Center
 

 
68,237

 

 
68,395

 
1.98
%
 
138

 
2016
Towne Mall
 

 
22,802

 

 
22,996

 
4.48
%
 
117

 
2022
Tucson La Encantada
 
72,192

 

 
72,870

 

 
4.23
%
 
368

 
2022
Valley Mall
 

 
41,765

 

 
42,155

 
5.85
%
 
280

 
2016
Valley River Center
 

 
120,000

 

 
120,000

 
5.59
%
 
558

 
2016
Victor Valley, Mall of(10)
 

 
90,000

 

 
90,000

 
2.71
%
 
180

 
2014
Vintage Faire Mall
 

 
98,370

 

 
99,083

 
5.81
%
 
586

 
2015
Westside Pavilion
 

 
150,905

 

 
152,173

 
4.49
%
 
783

 
2022
 
 
$
266,658

 
$
4,106,731

 
$
269,381

 
$
4,145,809

 
 

 
 

 
 

17

Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
8. Mortgage Notes Payable: (Continued)


(1)
The mortgage notes payable balances include the unamortized debt premiums (discounts). Debt premiums (discounts) represent the excess (deficiency) of the fair value of debt over (under) the principal value of debt assumed in various acquisitions and are amortized into interest expense over the remaining term of the related debt in a manner that approximates the effective interest method.
Debt premiums (discounts) consist of the following:
Property Pledged as Collateral
June 30,
2014
 
December 31,
2013
Arrowhead Towne Center
$
13,105

 
$
14,642

Camelback Colonnade
1,528

 
2,120

Deptford Mall
(11
)
 
(14
)
Fashion Outlets of Niagara Falls USA
5,878

 
6,342

Superstition Springs Center
737

 
895

Valley Mall
(175
)
 
(219
)
 
$
21,062

 
$
23,766

(2)
The interest rate disclosed represents the effective interest rate, including the debt premiums (discounts) and deferred finance costs.
(3)
The monthly debt service represents the payment of principal and interest.
(4)
The maturity date assumes that all extension options are fully exercised and that the Company does not opt to refinance the debt prior to these dates. These extension options are at the Company's discretion, subject to certain conditions, which the Company believes will be met.
(5)
A 49.9% interest in the loan has been assumed by a third party in connection with a co-venture arrangement (See Note 10Co-Venture Arrangement).
(6)
The construction loan on the property allows for borrowings of up to $140,000, bears interest at LIBOR plus 2.50% and matures on March 5, 2017, including extension options. At June 30, 2014 and December 31, 2013, the total interest rate was 2.95% and 2.96%, respectively.
(7)
On March 24, 2014, the loan was extended to January 1, 2015.
(8)
The loan bears interest at LIBOR plus 2.25% and matures on March 1, 2017. At June 30, 2014 and December 31, 2013, the total interest rate was 3.03% and 3.04%, respectively.
(9)
On February 7, 2014, the Company paid off in full one of the two loans on the property, which resulted in a loss of $358 on the early extinguishment of debt.
(10)
The loan bears interest at LIBOR plus 2.25% and matures on November 6, 2014. At June 30, 2014 and December 31, 2013, the total interest rate was 2.71% and 2.73%, respectively.
Most of the mortgage loan agreements contain a prepayment penalty provision for the early extinguishment of the debt.
Most of the Company's mortgage notes payable are secured by the properties on which they are placed and are non-recourse to the Company. As of June 30, 2014 and December 31, 2013, a total of $88,019 and $77,192, respectively, of the mortgage notes payable could become recourse to the Company.
The Company expects that all loan maturities during the next twelve months will be refinanced, restructured, extended and/or paid-off from the Company's line of credit or with cash on hand.
Total interest expense capitalized was $3,098 and $2,874 for the three months ended June 30, 2014 and 2013, respectively, and $5,583 and $5,342 during the six months ended June 30, 2014 and 2013, respectively.
Related party mortgage notes payable are amounts due to affiliates of NML. See Note 16Related Party Transactions for interest expense associated with loans from NML.

18

Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
8. Mortgage Notes Payable: (Continued)

The estimated fair value (Level 2 measurement) of mortgage notes payable at June 30, 2014 and December 31, 2013 was $4,450,277 and $4,500,177, respectively, based on current interest rates for comparable loans. The method for computing fair value was determined using a present value model and an interest rate that included a credit value adjustment based on the estimated value of the property that serves as collateral for the underlying debt.
9.
Bank and Other Notes Payable:
Bank and other notes payable consist of the following:
Line of Credit:
The Company has a $1,500,000 revolving line of credit that initially bore interest at LIBOR plus a spread of 1.75% to 3.0%, depending on the Company's overall leverage levels, and was to mature on May 2, 2015 with a one-year extension option. The line of credit had the ability to be expanded, depending on certain conditions, up to a total facility of $2,000,000 less the outstanding balance of the $125,000 unsecured term loan as described below.
On August 6, 2013, the Company's line of credit was amended and extended. The amended facility provides for an interest rate of LIBOR plus a spread of 1.38% to 2.0%, depending on the Company's overall leverage levels, and matures on August 6, 2018. Based on the Company's leverage level as of June 30, 2014, the borrowing rate on the facility was LIBOR plus 1.38%. In addition, the line of credit can be expanded, depending on certain conditions, up to a total facility of $2,000,000 (without giving effect to the $125,000 unsecured term loan described below).
As of June 30, 2014 and December 31, 2013, borrowings under the line of credit were $250,000 and $30,000, respectively, at an average interest rate of 2.17% and 1.85%, respectively. The estimated fair value (Level 2 measurement) of the line of credit at June 30, 2014 and December 31, 2013 was $239,362 and $28,214, respectively, based on a present value model using a credit interest rate spread offered to the Company for comparable debt.
Term Loan:
On December 8, 2011, the Company obtained a $125,000 unsecured term loan under the line of credit that bears interest at LIBOR plus a spread of 1.95% to 3.20%, depending on the Company's overall leverage level, and matures on December 8, 2018. Based on the Company's current leverage level as of June 30, 2014, the borrowing rate was LIBOR plus 1.95%. As of June 30, 2014 and December 31, 2013, the total interest rate was 2.25% and 2.51%, respectively. The estimated fair value (Level 2 measurement) of the term loan at June 30, 2014 and December 31, 2013 was $119,688 and $120,802, respectively, based on a present value model using a credit interest rate spread offered to the Company for comparable debt.
Prasada Note:
On March 29, 2013, the Company issued a $13,330 note payable that bears interest at 5.25% and matures on March 29, 2016. The note payable is collateralized by a portion of a development reimbursement agreement with the City of Surprise, Arizona. At June 30, 2014 and December 31, 2013, the note had a balance of $11,718 and $12,537, respectively. The estimated fair value (Level 2 measurement) of the note at June 30, 2014 and December 31, 2013 was $12,189 and $13,114, respectively, based on current interest rates for comparable notes. The method for computing fair value was determined using a present value model and an interest rate that included a credit value adjustment based on the estimated value of the collateral for the underlying debt.
As of June 30, 2014 and December 31, 2013, the Company was in compliance with all applicable financial loan covenants.

19

Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)

10.
Co-Venture Arrangement:
On September 30, 2009, the Company formed a joint venture, whereby a third party acquired a 49.9% interest in Freehold Raceway Mall and Chandler Fashion Center.
As a result of the Company having certain rights under the agreement to repurchase the assets after the seventh year of the venture formation, the transaction did not qualify for sale treatment. The Company, however, is not obligated to repurchase the assets. The transaction has been accounted for as a profit-sharing arrangement, and accordingly the assets, liabilities and operations of the properties remain on the books of the Company and a co-venture obligation was established for the amount of $168,154, representing the net cash proceeds received from the third party. The co-venture obligation is increased for the allocation of income to the co-venture partner and decreased for distributions to the co-venture partner. The co-venture obligation was $76,854 and $81,515 at June 30, 2014 and December 31, 2013, respectively.
11. Noncontrolling Interests:
The Company allocates net income of the Operating Partnership based on the weighted average ownership interest during the period. The net income of the Operating Partnership that is not attributable to the Company is reflected in the consolidated statements of operations as noncontrolling interests. The Company adjusts the noncontrolling interests in the Operating Partnership at the end of each period to reflect its ownership interest in the Company. The Company had a 93% ownership interest in the Operating Partnership as of June 30, 2014 and December 31, 2013. The remaining 7% limited partnership interest as of June 30, 2014 and December 31, 2013 was owned by certain of the Company's executive officers and directors, certain of their affiliates, and other third party investors in the form of OP Units. The OP Units may be redeemed for shares of stock or cash, at the Company's option. The redemption value for each OP Unit as of any balance sheet date is the amount equal to the average of the closing price per share of the Company's common stock, par value $0.01 per share, as reported on the New York Stock Exchange for the 10 trading days ending on the respective balance sheet date. Accordingly, as of June 30, 2014 and December 31, 2013, the aggregate redemption value of the then-outstanding OP Units not owned by the Company was $672,472 and $587,917, respectively.
The Company issued common and preferred units of MACWH, LP in April 2005 in connection with the acquisition of the Wilmorite portfolio. The common and preferred units of MACWH, LP are redeemable at the election of the holder, the Company may redeem them for cash or shares of the Company's stock at the Company's option and they are classified as permanent equity.
Included in permanent equity are outside ownership interests in various consolidated joint ventures. The joint ventures do not have rights that require the Company to redeem the ownership interests in either cash or stock.
12.
Stockholders' Equity:
On August 17, 2012, the Company entered into an equity distribution agreement ("Distribution Agreement") with a number of sales agents to issue and sell, from time to time, shares of common stock, par value $0.01 per share, having an aggregate offering price of up to $500,000 (the “Shares”). Sales of the Shares, if any, may be made in privately negotiated transactions and/or any other method permitted by law, including sales deemed to be an “at the market” offering, which includes sales made directly on the New York Stock Exchange or sales made to or through a market maker other than on an exchange. The Company will pay each sales agent a commission that will not exceed, but may be lower than, 2% of the gross proceeds of the Shares sold through such sales agent under the Distribution Agreement.
During the year ended December 31, 2012, the Company sold 2,961,903 shares of common stock under the ATM Program in exchange for aggregate gross proceeds of $177,896 and net proceeds of $175,649 after commissions and other transaction costs. During the year ended December 31, 2013, the Company sold 2,456,956 shares of common stock under the ATM Program in exchange for aggregate gross proceeds of $173,011 and net proceeds of $171,102 after commissions and other transaction costs. The proceeds from the sales were used to pay down the Company's line of credit. The Company did not sell any shares under the ATM Program during the three or six months ended June 30, 2014.

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THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
12. Stockholders' Equity: (Continued)

    
As of June 30, 2014, $149,093 of the Shares remained available to be sold under the ATM Program. Actual future sales will depend upon a variety of factors including but not limited to market conditions, the trading price of the Company's common stock and the Company's capital needs. The Company has no obligation to sell the remaining Shares available for sale under the ATM Program.    
13.
Acquisitions:
Green Acres Mall:
On January 24, 2013, the Company acquired Green Acres Mall, a 1,793,000 square foot regional shopping center in Valley Stream, New York, for a purchase price of $500,000. A purchase deposit of $30,000 was funded during the year ended December 31, 2012, and the remaining $470,000 was funded upon closing of the acquisition. The cash payment made at the time of closing was provided by the placement of a mortgage note payable on the property that allowed for borrowings of up to $325,000 and from borrowings under the Company's line of credit. Concurrent with the acquisition, the Company borrowed $100,000 on the loan. On January 31, 2013, the Company exercised its option to borrow the remaining $225,000 on the loan. The acquisition was completed to acquire another prominent shopping center in the New York metropolitan area.
The following is a summary of the allocation of the fair value of Green Acres Mall:
Property
$
477,673

Deferred charges
45,130

Other assets
19,125

Total assets acquired
541,928

Other accrued liabilities
41,928

Total liabilities assumed
41,928

Fair value of acquired net assets
$
500,000

The Company determined that the purchase price represented the fair value of the assets acquired and liabilities assumed.
Since the date of acquisition, the Company has included Green Acres Mall in its consolidated financial statements.
Green Acres Adjacent:
On April 25, 2013, the Company acquired a 19 acre parcel of land adjacent to Green Acres Mall for $22,577. The payment was provided by borrowings from the Company's line of credit. The acquisition was completed to allow for future expansion of Green Acres Mall.

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Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
13. Acquisitions: (Continued)

Camelback Colonnade Restructuring:
On September 17, 2013, the Company’s joint venture in Camelback Colonnade was restructured. As a result of the restructuring, the Company’s ownership interest in Camelback Colonnade decreased from 73.2% to 67.5%. Prior to the restructuring, the Company had accounted for its investment in Camelback Colonnade under the equity method of accounting due to substantive participation rights held by the outside partners. Upon completion of the restructuring, these substantive participation rights were terminated and the Company obtained voting control of the joint venture (See Note 4Investments in Unconsolidated Joint Ventures).
The following is a summary of the allocation of the fair value of Camelback Colonnade:
Property
$
98,160

Deferred charges
8,284

Cash and cash equivalents
1,280

Restricted cash
1,139

Tenant receivables
615

Other assets
380

Total assets acquired
109,858

Mortgage note payable
49,465

Accounts payable
54

Other accrued liabilities
4,752

Total liabilities assumed
54,271

Fair value of acquired net assets (at 100% ownership)
$
55,587


The Company recognized the following remeasurement gain on the Camelback Colonnade Restructuring:
Fair value of existing ownership interest (at 73.2% ownership)
$
41,690

Carrying value of investment
(5,349
)
Gain on remeasurement
$
36,341

Since the date of the restructuring, the Company has included Camelback Colonnade in its consolidated financial statements.
Superstition Springs Center:
On October 24, 2013, the Company acquired the remaining 33.3% ownership interest in Superstition Springs Center that it did not own for $46,162. The purchase price was funded by a cash payment of $23,662 and the assumption of the third party's pro rata share of the mortgage note payable on the property of $22,500. Prior to the acquisition, the Company had accounted for its investment under the equity method (See Note 4Investments in Unconsolidated Joint Ventures). As a result of this transaction, the Company obtained 100% ownership of Superstition Springs Center. The acquisition was completed in order to gain 100% ownership and control over this asset.

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Table of Contents
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
13. Acquisitions: (Continued)

The following is a summary of the allocation of the fair value of Superstition Springs Center:
Property
$
114,373

Deferred charges
12,353

Cash and cash equivalents
8,894

Tenant receivables
51

Other assets
11,535

Total assets acquired
147,206

Mortgage note payable
68,448

Accounts payable
119

Other accrued liabilities
7,637

Total liabilities assumed
76,204

Fair value of acquired net assets (at 100% ownership)
$
71,002


The Company determined that the purchase price represented the fair value of the additional ownership interest in Superstition Springs Center that was acquired.
Fair value of existing ownership interest (at 66.7% ownership)
$
47,340

Carrying value of investment
(32,476