Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 19, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | Howard Hughes Corp | ||
Entity Central Index Key | 1,498,828 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 4.2 | ||
Entity Common Stock, Shares Outstanding | 43,351,812 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Investment in real estate: | ||
Master Planned Community assets | $ 1,642,278 | $ 1,669,561 |
Buildings and equipment | 2,238,617 | 2,027,363 |
Less: accumulated depreciation | (321,882) | (245,814) |
Land | 277,932 | 320,936 |
Developments | 1,196,582 | 961,980 |
Net property and equipment | 5,033,527 | 4,734,026 |
Investment in Real Estate and Other Affiliates | 76,593 | 76,376 |
Net investment in real estate | 5,110,120 | 4,810,402 |
Cash and cash equivalents | 861,059 | 665,510 |
Accounts receivable, net | 13,041 | 9,883 |
Municipal Utility District receivables, net | 184,811 | 150,385 |
Notes receivable, net | 5,864 | 155 |
Deferred expenses, net | 80,901 | 64,531 |
Prepaid expenses and other assets, net | 473,268 | 666,516 |
Total assets | 6,729,064 | 6,367,382 |
Liabilities: | ||
Outstanding debt | 2,857,945 | 2,690,747 |
Deferred tax liabilities | 160,850 | 200,945 |
Warrant liabilities | 332,170 | |
Accounts payable and accrued expenses | 521,718 | 572,010 |
Total liabilities | 3,540,513 | 3,795,872 |
Commitments and Contingencies (see Note 10) | ||
Equity: | ||
Preferred stock: $.01 par value; 50,000,000 shares authorized, none issued | ||
Common stock: $.01 par value; 150,000,000 shares authorized, 43,300,253 shares issued and 43,270,880 outstanding as of December 31, 2017 and 39,802,064 shares issued and 39,790,003 outstanding as of December 31, 2016 | 433 | 398 |
Additional paid-in capital | 3,302,502 | 2,853,269 |
Accumulated deficit | (109,508) | (277,912) |
Accumulated other comprehensive loss | (6,965) | (6,786) |
Treasury stock, at cost, 29,373 shares and 12,061 shares as of December 31, 2017 and 2016, respectively | (3,476) | (1,231) |
Total stockholders' equity | 3,182,986 | 2,567,738 |
Noncontrolling interests | 5,565 | 3,772 |
Total equity | 3,188,551 | 2,571,510 |
Total liabilities and equity | $ 6,729,064 | $ 6,367,382 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 43,300,253 | 39,802,064 |
Common stock, shares outstanding | 43,270,880 | 39,790,003 |
Treasury stock, shares held | 29,373 | 12,061 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||
Condominium rights and unit sales | $ 464,251 | $ 485,634 | $ 305,284 |
Master Planned Community land sales | 248,595 | 215,318 | 187,399 |
Minimum rents | 183,025 | 173,268 | 150,760 |
Tenant recoveries | 45,814 | 44,330 | 39,542 |
Hospitality revenues | 76,020 | 62,252 | 45,374 |
Builder price participation | 22,835 | 21,386 | 26,846 |
Other land revenues | 28,166 | 16,232 | 14,803 |
Other rental and property revenues | 31,414 | 16,585 | 27,080 |
Total revenues | 1,100,120 | 1,035,005 | 797,088 |
Expenses: | |||
Condominium rights and unit cost of sales | 338,361 | 319,325 | 191,606 |
Master Planned Community cost of sales | 121,116 | 95,727 | 88,065 |
Master Planned Community operations | 38,777 | 42,371 | 44,907 |
Other property operating costs | 91,729 | 65,978 | 72,751 |
Rental property real estate taxes | 29,185 | 26,847 | 24,138 |
Rental property maintenance costs | 13,432 | 12,392 | 10,712 |
Hospitality operating costs | 56,362 | 49,359 | 34,839 |
Provision for doubtful accounts | 2,710 | 5,664 | 4,030 |
Demolition costs | 1,923 | 2,212 | 3,297 |
Development-related marketing costs | 20,504 | 22,184 | 25,466 |
General and administrative | 89,882 | 86,588 | 81,345 |
Depreciation and amortization | 132,252 | 95,864 | 98,997 |
Total expenses | 936,233 | 824,511 | 680,153 |
Operating income before other items | 163,887 | 210,494 | 116,935 |
Other: | |||
Provision for impairment | (35,734) | ||
Gains on sales of properties | 51,367 | 140,549 | |
Other (loss) income, net | 3,248 | 11,453 | 1,829 |
Total other | 54,615 | 116,268 | 1,829 |
Operating income | 218,502 | 326,762 | 118,764 |
Interest income | 4,043 | 1,359 | 586 |
Interest expense | (64,568) | (65,724) | (59,744) |
Loss on redemption of senior notes due 2021 | (46,410) | ||
Warrant liability (loss) gain | (43,443) | (24,410) | 58,320 |
Gain on acquisition of joint venture partner's interest | 23,332 | 27,088 | |
Gain (loss) on disposal of operating assets | 3,868 | (1,117) | 29,073 |
Equity in earnings from Real Estate and Other Affiliates | 25,498 | 56,818 | 3,721 |
Income before taxes | 120,822 | 320,776 | 150,720 |
(Benefit) provision for income taxes | 45,801 | (118,450) | (24,001) |
Net income | 166,623 | 202,326 | 126,719 |
Net loss (income) attributable to noncontrolling interests | 1,781 | (23) | |
Net income attributable to common stockholders | $ 168,404 | $ 202,303 | $ 126,719 |
Basic income per share: (in dollars per share) | $ 4.07 | $ 5.12 | $ 3.21 |
Diluted income per share: (in dollars per share) | $ 3.91 | $ 4.73 | $ 1.60 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Comprehensive income, net of tax: | ||||
Net income | $ 166,623 | $ 202,326 | $ 126,719 | |
Other comprehensive income (loss): | ||||
Interest rate swaps (a) | [1] | (9) | 2,196 | 40 |
Capitalized swap interest expense (b) | [2] | (170) | (203) | (217) |
Pension adjustment (c) | [3] | (890) | ||
Other comprehensive income (loss) | (179) | 1,103 | (177) | |
Comprehensive income | 166,444 | 203,429 | 126,542 | |
Comprehensive income attributable to noncontrolling interests | 1,781 | (23) | ||
Comprehensive income attributable to common stockholders | $ 168,225 | $ 203,406 | $ 126,542 | |
[1] | Net of deferred tax benefit of $0.3 million for the year ended December 31, 2017, and deferred tax expense of $1.3 million and $1.0 million for the years ended December 31, 2016 and 2015, respectively. | |||
[2] | Net of deferred tax benefit of $0.1 million, $0.1 million and $0.1 million for the years ended December 31, 2017, 2016 and 2015, respectively. | |||
[3] | Net of deferred tax benefit of $0, $0.5 million and $0 for the years ended December 31, 2017, 2016 and 2015, respectively. |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Interest rate swaps, deferred tax expense | $ 300 | $ 1,300 | $ 1,000 |
Capitalized swap interest, deferred tax benefit | 100 | 100 | 100 |
Pension adjustment, tax | $ 0 | $ (543) | $ 0 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) | Treasury Stock | Total Stockholders' Equity | Noncontrolling Interests | Total | |
Balance at the beginning of the period at Dec. 31, 2014 | $ 396 | $ 2,838,013 | $ (606,934) | $ (7,712) | $ 2,223,763 | $ 3,743 | $ 2,227,506 | ||
Balance at the beginning of the period, shares at Dec. 31, 2014 | 39,638,094 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 126,719 | 126,719 | 126,719 | ||||||
Adjustment to noncontrolling interest | 29 | 29 | |||||||
Interest rate swaps, net of tax | 40 | 40 | 40 | [1] | |||||
Capitalized swap interest, net of tax benefit | (217) | (217) | (217) | [2] | |||||
Stock plan activity | $ 2 | 9,810 | 9,812 | 9,812 | |||||
Stock plan activity, shares | 76,744 | ||||||||
Balance at the end of the period at Dec. 31, 2015 | $ 398 | 2,847,823 | (480,215) | (7,889) | 2,360,117 | 3,772 | 2,363,889 | ||
Balance at the end of the period, shares at Dec. 31, 2015 | 39,714,838 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 202,303 | 202,303 | 23 | 202,326 | |||||
Preferred dividend payment on behalf of subsidiary | (23) | (23) | |||||||
Interest rate swaps, net of tax | 2,196 | 2,196 | 2,196 | [1] | |||||
Pension adjustment, net of tax | (890) | (890) | (890) | ||||||
Capitalized swap interest, net of tax benefit | (203) | (203) | (203) | [2] | |||||
Acquisition of noncontrolling partner's interest | (5,000) | (5,000) | (5,000) | ||||||
Stock plan activity | 9,446 | 9,446 | 9,446 | ||||||
Stock plan activity, shares | 87,226 | ||||||||
Treasury stock activity | $ (1,231) | (1,231) | (1,231) | ||||||
Treasury stock activity, shares | (12,061) | ||||||||
Issuance of management warrants | 1,000 | 1,000 | 1,000 | ||||||
Balance at the end of the period at Dec. 31, 2016 | $ 398 | 2,853,269 | (277,912) | (6,786) | $ (1,231) | 2,567,738 | 3,772 | 2,571,510 | |
Balance at the end of the period, shares at Dec. 31, 2016 | 39,802,064 | (12,061) | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 168,404 | 168,404 | (1,781) | 166,623 | |||||
Preferred dividend payment on behalf of subsidiary | (12) | (12) | |||||||
Initial consolidation of HOAs | 3,586 | 3,586 | |||||||
Interest rate swaps, net of tax | (9) | (9) | (9) | [1] | |||||
Capitalized swap interest, net of tax benefit | (170) | (170) | (170) | [2] | |||||
Stock plan activity | $ 4 | 21,651 | $ (2,245) | 19,410 | 19,410 | ||||
Stock plan activity, shares | 445,736 | (17,312) | |||||||
Exercise of warrants | $ 31 | 375,582 | 375,613 | 375,613 | |||||
Exercise of warrants (in shares) | 3,052,453 | ||||||||
Issuance of management warrants | 52,000 | 52,000 | 52,000 | ||||||
Balance at the end of the period at Dec. 31, 2017 | $ 433 | $ 3,302,502 | $ (109,508) | $ (6,965) | $ (3,476) | $ 3,182,986 | $ 5,565 | $ 3,188,551 | |
Balance at the end of the period, shares at Dec. 31, 2017 | 43,300,253 | (29,373) | |||||||
[1] | Net of deferred tax benefit of $0.3 million for the year ended December 31, 2017, and deferred tax expense of $1.3 million and $1.0 million for the years ended December 31, 2016 and 2015, respectively. | ||||||||
[2] | Net of deferred tax benefit of $0.1 million, $0.1 million and $0.1 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
CONSOLIDATED STATEMENTS OF EQU8
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF EQUITY | |||
Interest rate swaps, tax | $ 323 | $ 1,345 | $ 966 |
Pension adjustment, tax | 0 | 543 | 0 |
Capitalized swap interest, tax (benefit) | $ 91 | $ 109 | $ 74 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows from Operating Activities: | |||
Net income | $ 166,623 | $ 202,326 | $ 126,719 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Depreciation | 116,401 | 81,878 | 82,275 |
Amortization | 15,851 | 13,986 | 16,722 |
Amortization of deferred financing costs | 5,587 | 6,977 | 5,734 |
Amortization of intangibles other than in-place leases | (1,327) | (1,857) | 462 |
Straight-line rent amortization | (5,401) | (7,401) | (4,985) |
Deferred income taxes | (43,463) | 113,698 | 21,152 |
Restricted stock and stock option amortization | 7,385 | 6,707 | 7,284 |
Net gains on sales and acquisitions of properties | (78,568) | (166,520) | (29,073) |
Loss on redemption of senior notes due 2021 | 46,410 | ||
Warrant liability loss (gain) | 43,443 | 24,410 | (58,320) |
Equity in earnings from Real Estate and Other Affiliates, net of distributions | (9,325) | (19,329) | 1,182 |
Provision for doubtful accounts | 2,710 | 5,664 | 4,030 |
Master Planned Community land acquisitions | (4,391) | (94) | (7,293) |
Master Planned Community development expenditures | (193,087) | (149,592) | (197,020) |
Master Planned Community cost of sales | 107,218 | 88,065 | 69,104 |
Condominium development expenditures | (352,813) | (330,720) | (191,313) |
Condominium rights and unit cost of sales | 338,361 | 319,325 | 191,606 |
Deferred rental income | 46,366 | ||
Provision for impairment | 35,734 | ||
Percentage of completion revenue recognition from sale of condominium rights and unit sales | (464,251) | (485,634) | (305,284) |
Net changes: | |||
Accounts receivable | 24,034 | 29,295 | 50,228 |
Prepaid expenses and other assets | 1,091 | 2,763 | (1,869) |
Change in restricted cash operating accounts | (9,418) | ||
Condominium deposits received | 315,901 | 465,701 | 81,881 |
Deferred expenses | (15,156) | (8,911) | (11,743) |
Accounts payable and accrued expenses | 8,181 | (46,322) | 29,867 |
Condominium deposits held in escrow | (315,901) | (465,701) | (81,881) |
Condominium deposits released from escrow | 613,692 | 348,745 | 177,724 |
Other, net | (755) | (4,278) | 375 |
Cash provided by operating activities | 319,032 | 58,915 | 23,930 |
Cash Flows from Investing Activities: | |||
Property and equipment expenditures | (6,968) | (9,662) | (15,439) |
Operating property improvements | (14,389) | (20,247) | (8,409) |
Property developments and redevelopments | (369,086) | (402,669) | (578,506) |
Reimbursement of development cost | 12,777 | 4,582 | |
Acquisition of assets | (23,299) | (25,480) | |
Proceeds from sales of properties | 88,384 | 410,917 | 25,139 |
Proceeds from insurance claims | 3,107 | ||
Investment in KR Holdings, LLC | 9,121 | ||
Note issued to Real Estate and Other Affiliates and third party | (5,252) | (25,000) | |
Proceeds from repayment of note to Real Estate and Other Affiliate | 25,000 | ||
Distributions from Real Estate and Other Affiliates | 16,550 | ||
Investments in Real Estate and Other Affiliates, net | (1,138) | (11,056) | (2,171) |
Change in restricted cash | (3,710) | (4,605) | (6,580) |
Other | 1,277 | ||
Cash used in investing activities | (322,681) | (38,563) | (575,568) |
Cash Flows from Financing Activities: | |||
Proceeds from mortgages, notes and loans payable | 1,501,290 | 535,505 | 583,822 |
Principal payments on mortgages, notes and loans payable | (1,350,226) | (333,302) | (103,808) |
Premium paid to redeem 2021 senior notes | (39,966) | ||
Special Improvement District bond funds released from (held in) escrow | 35,678 | 11,236 | (39,241) |
Deferred financing costs and bond issuance costs, net | (14,188) | (5,531) | (4,285) |
Taxes paid on stock options exercised and restricted stock vested | (11,672) | (1,231) | |
Issuance of management warrants | 52,000 | 1,000 | |
Acquisition of 1% partnership interest in GG Dr, LLC | (8,000) | ||
Stock options exercised | 22,708 | 180 | |
Issuance of noncontrolling interests | 3,586 | ||
Preferred dividend payment on behalf of REIT subsidiary | (12) | ||
Cash provided by financing activities | 199,198 | 199,857 | 436,488 |
Net change in cash and cash equivalents | 195,549 | 220,209 | (115,150) |
Cash and cash equivalents at beginning of period | 665,510 | 445,301 | 560,451 |
Cash and cash equivalents at end of period | 861,059 | 665,510 | 445,301 |
Supplemental Disclosure of Cash Flow Information: | |||
Interest paid | 129,022 | 123,687 | 99,296 |
Interest capitalized | 73,207 | 64,344 | 47,221 |
Income taxes paid (refunded), net | (19,381) | 11,191 | 3,318 |
Non-Cash Transactions: | |||
Special Improvement District bond transfers associated with land sales | 13,898 | 7,662 | 18,775 |
Property developments and redevelopments | 2,530 | ||
Accrued interest on construction loan borrowing | 1,559 | 4,386 | 2,863 |
MPC Land contributed to Real Estate Affiliate | 15,234 | ||
Exercise of Sponsor and Management Warrants | 375,581 | ||
Special Improvement District bond transfer to Real Estate Affiliate | (1,518) | ||
Capitalized stock compensation | 1,121 | 2,559 | $ 2,526 |
Acquisitions | |||
Developments | 18,066 | ||
Prepaid and other assets | (10,597) | ||
Mortgages, notes and loans payable | (2,834) | ||
Other liabilities | (4,635) | ||
Las Vegas 51s | |||
Non-Cash Transactions: | |||
Net assets acquired in the acquisition | 31,804 | ||
Constellation | |||
Non-Cash Transactions: | |||
Net assets acquired in the acquisition | $ 41,744 | ||
Millennium Six Pines | |||
Non-Cash Transactions: | |||
Net assets acquired in the acquisition | $ 30,191 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General The Howard Hughes Corporation (“HHC” or the “Company”) specializes in the development of Master Planned Communities (“MPCs”), the development of residential condominiums, and the ownership, management and development or repositioning of real estate assets currently generating revenues, also called operating assets, as well as other strategic real estate opportunities in the form of entitled and unentitled land and other development rights, also called strategic developments. We are a Delaware corporation that was formed on July 1, 2010. Unless the context otherwise requires, references to “we,” “us” and “our” refer to HHC and its subsidiaries. Management has evaluated all material events occurring subsequent to the date of the Consolidated Financial Statements up to the date and time this Annual Report is filed and concluded there were no events or transactions occurring during this period that required recognition or disclosure in the financial statements other than as mentioned herein. Principles of Consolidation and Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), with all intercompany balances eliminated. The presentation includes the accounts of the Company, and those entities in which we have a controlling financial interest. The Company also consolidates certain variable interest entities (“VIEs”) in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 810 Consolidation (“ASC 810”). The outside equity interests in certain entities controlled by the Company are reflected in the consolidated financial statements as a noncontrolling interest. Certain amounts in 2016 have been reclassified to conform to the 2017 presentation. Specifically, we have reclassified straight-line rent receivables of $39.1 million and $31.5 million from Accounts receivable to Prepaid expenses and other assets, net as of December 31, 2017 and 2016, respectively. 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. The estimates and assumptions include, but are not limited to, revenue recognition accounted for under the percentage of completion method, capitalization of development costs, provision for income taxes, recoverable amounts of receivables and deferred tax assets, initial valuations of tangible and intangible assets acquired and the related useful lives of assets upon which depreciation and amortization is based. Estimates and assumptions have also been made with respect to future revenues and costs, the fair value of warrants, debt and options granted. Actual results could differ from these and other estimates. Segments Segment information is prepared on the same basis that management reviews information for operational decision-making purposes. Management evaluates the performance of each of our real estate assets or investments individually and aggregates such properties into segments based on their economic characteristics and types of revenue streams. We operate in three business segments: (i) MPCs; (ii) Operating Assets; and (iii) Strategic Developments. Investment in Real Estate Master Planned Community Assets, Land, Buildings and Equipment Real estate assets are stated at cost less any provisions for impairments. Expenditures for significant improvements to our assets are capitalized. Tenant improvements relating to our operating assets are capitalized and depreciated over the shorter of their economic lives or the lease term. Maintenance and repair costs are charged to expense when incurred. We periodically review the estimated useful lives of properties. Depreciation or amortization expense is computed using the straight‑line method based upon the following estimated useful lives: Asset Type Years Location of Asset Buildings and improvements 10 - 45 Buildings and Equipment Equipment and fixtures 5 - 10 Buildings and Equipment Computer hardware and software, and vehicles 3 - 5 Prepaid expenses and other assets, net Tenant improvements Lesser of lease term or useful life Prepaid expenses and other assets, net Leasing costs Related lease term Prepaid expenses and other assets, net F rom time to time, we may reassess the development strategies for certain buildings and improvements which results in changes to our estimate of their remaining useful lives. As a result, we recognized an additional $25. 5 million, or $0.59 per diluted share, $1.0 million, or $0.02 per diluted share, and $17.1 million, or $0.40 per diluted share, in depreciation expense during the years ended December 31, 2017, 2016 and 2015, respectively, due to the change in useful lives of these buildings and improvements. Developments Development costs, which primarily include direct costs related to placing the asset in service associated with specific development properties, are capitalized as part of the property being developed. Construction and improvement costs incurred in connection with the development of new properties or the redevelopment of existing properties are capitalized before they are placed into service. Costs include planning, engineering, design, direct material, labor and subcontract costs. Real estate taxes, utilities, legal and professional fees, interest, insurance costs and certain employee costs incurred during construction periods are also capitalized. Capitalization commences when the development activities begin and ceases when a project is completed, put on hold or we decide to not move forward with a project. Capitalized costs related to a project where we have determined not to move forward are expensed. Capitalized interest costs are based on qualified expenditures and interest rates in place during the construction period. Demolition costs associated with these redevelopments are expensed as incurred. Once the assets are placed into service, they are depreciated in accordance with our policy. In the event that management no longer has the ability or intent to complete a development, the costs previously capitalized are evaluated for impairment. Our Developments consist of the following categories: December 31, (In thousands) 2017 2016 Land and improvements $ 202,875 $ 188,544 Development costs 675,691 567,650 Condominium projects 318,016 205,786 Total Developments $ 1,196,582 $ 961,980 Investment in Real Estate and Other Affiliates In the ordinary course of business, we enter into partnerships or joint ventures primarily for the development and operation of real estate assets which are referred to as “Real Estate and Other Affiliates.” We assess our joint ventures at inception to determine if any meet the qualifications of a variable interest entity (“VIE”). We consider a partnership or joint venture a VIE if: (a) the total equity investment is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other rights, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity); or (c) the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity and/or their rights to receive the expected residual returns of the entity, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Upon the occurrence of certain events outlined in ASC 810, we reassess our initial determination of whether the partnership or joint venture is a VIE. We also perform a qualitative assessment of each VIE to determine if we are the primary beneficiary. Under ASC 810, a company concludes that it is the primary beneficiary and consolidates the VIE if the company has both (a) the power to direct the economically significant activities of the entity and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The company considers the contractual agreements that define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties in determining if the company is the primary beneficiary. As required by ASC 810, management’s assessment of whether the company is the primary beneficiary of a VIE is continuously performed. We account for VIEs for which we are not considered to be the primary beneficiary, but have significant influence, using the equity method and investments in VIEs where we do not have significant influence on the joint venture’s operating and financial policies using the cost method. We account for investments in joint ventures where we own a non‑controlling interest using the equity method, and investments in joint ventures where we have virtually no influence on the joint venture’s operating and financial policies using the cost method. For cost method investments, we recognize earnings to the extent of distributions received from such investments. Under the equity method, the cost of our investment is adjusted for our share of the equity in earnings or losses of such Real Estate Affiliates from the date of investment and reduced by distributions received. Generally, the operating agreements with respect to our Real Estate and Other Affiliates provide that assets, liabilities and funding obligations are shared in accordance with our ownership percentages. We generally also share in the profit and losses, cash flows and other matters relating to our Real Estate Affiliates in accordance with our respective ownership percentages. For certain equity method investments, when the preferences on profit sharing on liquidation rights and priorities differ from the ownership percentages, we consider ASC 970 and apply the Hypothetical Liquidation Book Value (“HLBV”) method. Under this method, we recognize income or loss based on the change in our underlying share of the venture’s net assets on a hypothetical liquidation basis as of the reporting date. Acquisitions of Properties We account for the acquisition of real estate properties in accordance with ASC 805 Business Combinations (“ASC 805”). This methodology requires that assets acquired and liabilities assumed be recorded at their fair values on the date of acquisition. Costs directly related to asset acquisitions are considered additions to the purchase price and increase the cost basis recorded for the Investment in Real Estate. Acquisition costs related to the acquisition of a business are expensed as incurred. The fair value of tangible assets of an acquired property (which includes land, buildings, and improvements) is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land, buildings and improvements based on management’s determination of the fair value of these assets. The “as-if-vacant” values are derived from several sources which incorporate significant unobservable inputs that are classified as Level 3 inputs in the fair value hierarchy and primarily include a discounted cash flow analysis using discount and capitalization rates based on recent comparable market transactions, where available. The fair value of acquired intangible assets consisting of in-place, above-market and below-market leases is recorded based on a variety of considerations, some of which incorporate significant unobservable inputs that are classified as Level 3 inputs in the fair value hierarchy. In-place lease considerations include, but are not necessarily limited to: (1) the value associated with avoiding the cost of originating the acquired in-place leases (i.e., the market cost to execute a lease, including leasing commissions and tenant improvements); (2) the value associated with lost revenue related to tenant reimbursable operating costs incurred during the assumed lease-up period (i.e., real estate taxes, insurance and certain other operating expenses); and (3) the value associated with lost rental revenue from existing leases during the assumed lease-up period. Above-market and below-market leases are valued at the present value, using a discount rate that reflects the risks associated with the leases acquired, of the difference between (1) the contractual amounts to be paid pursuant to the in-place lease; and (2) management’s estimate of current market lease rates, measured over the remaining non-cancelable lease term, including any below-market renewal option periods. Impairment We review our long-lived assets (including those held by our Real Estate and Other Affiliates) for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized if the carrying amount of an asset is not recoverable and exceeds its fair value. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future economic conditions, such as occupancy, rental rates, capital requirements and sales values that could differ materially from actual results in future periods. If impairment indicators exist and it is expected that undiscounted cash flows generated by the asset are less than its carrying amount, less costs to sell in the case of assets classified as held for sale, an impairment provision is recorded to write-down the carrying amount of the asset to its fair value. Impairment indicators for our assets or projects within our MPC segment are assessed separately and include, but are not limited to, significant decreases in sales pace or average selling prices, significant increases in expected land development and construction costs or cancellation rates, and projected losses on expected future sales. MPC assets have extended life cycles that may last 20 to 40 years, or longer, and have few long‑term contractual cash flows. Further, MPC assets generally have minimal to no residual values because of their liquidating characteristics. MPC development periods often occur through several economic cycles. Subjective factors such as the expected timing of property development and sales, optimal development density and sales strategy impact the timing and amount of expected future cash flows and fair value. Impairment indicators for our Operating Assets segment are assessed separately for each property and include, but are not limited to, significant decreases in net operating income, significant decreases in occupancy, ongoing low occupancy and significant net operating losses. Impairment indicators for development costs in our Strategic Developments segment are assessed by project and include, but are not limited to, significant changes in projected completion dates, revenues or cash flows, development costs, market factors, significant decreases in comparable property sale prices and feasibility. The cash flow estimates used both for determining recoverability and estimating fair value are inherently judgmental and reflect current and projected trends in rental, occupancy, pricing, development costs, sales pace and capitalization rates, and estimated holding periods for the applicable assets. Although the estimated fair value of certain assets may be exceeded by the carrying amount, a real estate asset is only considered to be impaired when its carrying amount is not expected to be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is necessary, the excess of the carrying amount of the asset 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. The adjusted carrying amount, which represents the new cost basis of the asset, is depreciated over the remaining useful life of the asset or, for MPCs, is expensed as a cost of sales when land is sold. Assets that have been impaired will in the future have lower depreciation and cost of sale expenses. The impairment will have no impact on cash flow. With respect to our Investment in Real Estate and Other Affiliates, a series of operating losses of an underlying asset or other factors may indicate that a decrease in value has occurred which is other‑than‑temporary. The investment in each Real Estate and Other Affiliate is evaluated periodically and as deemed necessary for recoverability and valuation declines that are other‑than‑temporary. If the decrease in value of an Investment in a Real Estate and Other Affiliate is deemed to be other‑than‑temporary, our investment is reduced to its estimated fair value. In addition to the property‑specific impairment analysis that we perform on the underlying assets of the investment, we also consider the ownership, distribution preferences, limitations, and rights to sell and repurchase our ownership interests. For the years ended December 31, 2017, 2016 and 2015, we evaluated whether impairment indicators existed at any of our assets. In most instances, we concluded no impairment indicators were present. For the year ended December 31, 2016, we recognized an impairment charge for Park West during the third quarter of 2016 due to a change in strategy and reduction of the anticipated holding period. For the years ended December 31, 2017 and 2015, we concluded that there were no impairments. Please refer to Note 6 – Impairment in our Consolidated Financial Statements for additional information. Cash and Cash Equivalents Cash and Cash Equivalents consist of highly-liquid investments with maturities at date of purchase of three months or less and include registered money market mutual funds which are invested in United States Treasury bills that are valued at the net asset value of the underlying shares in the funds as of the close of business at the end of each period as well as deposits with major banks throughout the United States. Such deposits are in excess of FDIC limits and are placed with high quality institutions in order to minimize concentration of counterparty credit risk. Accounts Receivable, net Accounts receivable includes tenant rents, tenant recoveries and other receivables. We record allowances against our receivables that we consider uncollectible. These allowances are reviewed periodically and are adjusted based on management’s estimate of receivables that will not be realized in subsequent periods. Management exercises judgment in establishing these allowances and considers payment history, current credit status and if the tenant is currently occupying the space in developing these estimates. The following table summarizes the changes in allowance for doubtful accounts against our accounts receivables: (In thousands) 2017 2016 2015 Balance as of January 1 $ 7,799 $ 4,406 $ 7,619 Provision for doubtful accounts 2,710 5,664 4,030 Write-offs (1,209) (2,271) (7,243) Balance as of December 31, $ 9,300 $ 7,799 $ 4,406 The decrease in the provision for the year ended December 31, 2017 compared to 2016 is primarily due to the reserve for a termination fee for a tenant in 2016 and a delinquent paying tenant in 2016 at another property . The increase in the provision for the year ended December 31, 2016 compared to 2015 is consistent with the growth of the Operating Assets portfolio and increase in the number of tenants. The significant decrease in write-offs in the allowance for doubtful accounts in the year ended December 31, 2016 as compared to 2015 relates primarily to the recovery of uncollectible receivables from a tenant at an operating property that vacated its space. Notes Receivable, net Notes receivable, net includes non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, they are recorded at amortized cost less any provision for impairment. We will evaluate our notes receivable for impairment when it is probable the payment of interest and principal will not be made in accordance with the contractual terms of the note agreement. In the fourth quarter of 2017, we made an investment in a $5.3 million note collateralized by a building in Columbia. The note is carried at cost. Municipal Utility District Receivables, net In Houston, Texas, certain development costs are reimbursable through the creation of Municipal Utility Districts (“MUDs”), also known as Water Control and Improvement Districts), which are separate political subdivisions authorized by Article 16, Section 59 of the Texas Constitution and governed by the Texas Commission on Environmental Quality (“TCEQ”). MUDs are formed to provide municipal water, waste water, drainage services, recreational facilities and roads to those areas where they are currently unavailable through the regular city services. Typically, the developer advances funds for the creation of the facilities, which must be designed, bid and constructed in accordance with the City of Houston’s and TCEQ requirements. The developer initiates the MUD process by filing the applications for the formation of the MUD, and once the applications have been approved, a Board of Directors is elected for the MUD and given the authority to issue ad valorem tax bonds and the authority to tax residents. The MUD Board authorizes and approves all MUD development contracts and pay requests. MUD bond sale proceeds are used to reimburse the developer for its construction costs, including interest. MUD taxes are used to pay the debt service on the bonds and the operating expenses of the MUD. The Company estimates the costs it believes will be eligible for reimbursement as MUD receivables. Our MUD receivables are pledged as security to creditors under the debt facilities relating to our Bridgeland and The Woodlands MPCs. MUD receivables are shown net of an allowance of $0.8 million and $0.9 million as of December 31, 2017 and 2016, respectively, in the accompanying Consolidated Balance Sheets. Prepaid Expenses and Other Assets, net The major components of Prepaid expenses and other assets, net include condominium receivables and condominium deposits (as discussed below in Revenue Recognition and Related Matters), Special Improvement District (“SID”) receivables and Straight-line rent receivables. SID receivables are amounts due from SID bonds related to our MPCs. Proceeds from SID bonds are held in escrow by a third-party and are used to reimburse us for a portion of the development costs incurred in our Summerlin MPC. SID receivables are $26.4 million and $61.6 million as of December 31, 2017 and 2016, respectively. Income Taxes Deferred income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities using enacted tax rates currently in effect. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. An increase or decrease in the valuation allowance that results from a change in circumstances, and which causes a change in our judgment about the realizability of the related deferred tax asset, is included in the deferred tax provision. There are events or circumstances that could occur in the future that could limit the benefit of deferred tax assets. In addition, we recognize and report interest and penalties, if necessary, related to uncertain tax positions within our provision for income tax expense. In our MPCs, gains with respect to land sales, whether for commercial use or for single family residences, are reported for tax purposes either on the modified accrual method or on the percentage-of-completion method. Under the percentage-of-completion method, a gain is recognized for tax purposes as costs are incurred in satisfaction of contractual obligations. The method used for determining the percentage complete for income tax purposes is different than that used for financial statement purposes. Deferred Expenses, net Deferred expenses consist principally of leasing costs. Deferred leasing costs are amortized to amortization expense using the straight‑line method over periods that approximate the related lease terms. Deferred expenses are shown net of accumulated amortization of $18.9 million and $14.1 million as of December 31, 2017 and 2016, respectively. Deferred financing fees are amortized to interest expense over the terms of the respective financing agreements using the effective interest method (or other methods which approximate the effective interest method). Revenue Recognition and Related Matters Condominium Rights and Unit Sales Revenue recognition for contracted individual units in a condominium project are accounted for under the percentage of completion method when the following criteria are met: (a) construction is beyond a preliminary stage; (b) buyer is unable to require a refund of its deposit, except for non‑delivery of the unit; (c) sufficient units are sold to assure that it will not revert to a rental property; (d) sales prices are collectible; and (e) aggregate sales proceeds and costs can be reasonably estimated. Those units that do not meet the criteria use the full accrual method or deposit method which defers revenue recognition until the unit is closed. Revenue related to condominium sales will change when the new revenue recognition standard is adopted. See Recently Issued Accounting Pronouncements below. Revenue recognized on the percentage-of-completion method is based upon the ratio of project costs incurred to date compared to total estimated project cost. Total estimated project costs include direct costs such as the carrying value of our land, site planning, architectural, construction costs, financing costs and indirect cost allocations for certain infrastructure and amenity costs which benefit the project based upon the relative sales value of the units. Changes in estimated project costs impact the amount of revenue and profit recognized on a percentage of completion basis during the period in which they are determined. Revenue recognized in excess of amounts collected from buyers is classified as Condominium receivables and amounts collected from buyers in excess of revenue recognized to date are classified as Condominium deposits liability. Master Planned Community Land Sales Revenues from land sales are recognized using the full accrual method at closing, when title has passed to the buyer, adequate consideration for the land has been received and we have no continuing involvement with the property. Revenue that is not recognized under the full accrual method is deferred and recognized when the required obligations are met. When developed residential or commercial land is sold, the cost of sales includes actual costs incurred and estimates of future development costs benefiting the property sold through completion. In accordance with ASC 970, when developed land is sold, costs are allocated to each sold superpad or lot based upon the relative sales value of each superpad or lot. For purposes of allocating development costs, estimates of future revenues and development costs are re-evaluated throughout the year, with adjustments being allocated prospectively to the remaining parcels available for sale. For certain parcels of land, however, the specific identification method is used to determine the cost of sales, including acquired parcels that we do not intend to develop or for which development was complete at the date of acquisition. Minimum Rents and Tenant Recoveries Revenue associated with our operating assets includes minimum rent, percentage rent in lieu of fixed minimum rent, tenant recoveries and overage rent. Minimum rent revenues are recognized on a straight‑line basis over the terms of the related leases when collectability is reasonably assured and the tenant has taken possession of, or controls, the physical use of the leased asset. Percentage rent in lieu of fixed minimum rent is recognized as sales are reported from tenants. Minimum rent revenues also include amortization related to above and below‑market tenant leases on acquired properties. Recoveries from tenants are stipulated in the leases, are generally computed based upon a formula related to real estate taxes, insurance and other real estate operating expenses, and are generally recognized as revenues in the period the related costs are incurred. Overage rent is recognized on an accrual basis once tenant sales exceed contractual thresholds contained in the lease and is calculated by multiplying the tenant sales in excess of the minimum amount by a percentage defined in the lease. If the lease provides for tenant improvements, we determine whether the tenant improvements are owned by the tenant or by us. When we are the owner of the tenant improvements, rental revenue begins when the improvements are substantially complete. When the tenant is the owner of the tenant improvements, any tenant allowance funded by us is treated as a lease incentive and amortized as an adjustment to rental revenue over the lease term. Hospitality Revenues Revenue from our hospitality properties is primarily related to room rentals and food and beverage sales and is recognized as services are performed. Builder Price Participation Builder price participation revenue is based on an agreed-upon percentage of the sales price of homes closed in excess of contractual amounts established when the homebuilder buys lots from us. Revenue related to builder price participation rights is recognized as the underlying homes are sold by homebuilders and fluctuates based upon the number of homes closed that qualify for builder price participation payments. Other land revenues Other land revenues is primarily related to easement revenue, ground maintenance revenue and advertising revenue and is recognized as services are performed. Other rental and property revenues Other rental and property revenues is primarily related to baseball revenue, other tenant revenue and overage rent revenue and is recognized as services are performed. Marketing and advertising Our Strategic Development, Operating Assets and MPC segments incur various marketing and advertising costs as part of their development, branding, leasing or sales initiatives. These costs include special events, broadcasts, direct mail and online digital and social media programs, and they are expensed as incurred. Fair Value of Financial Instruments The carrying values of cash and cash equivalents, marketable securities, escrows, receivables, accounts payable, accrued expenses and other assets and liabilities are reasonable estimates of their fair values because of the short maturities of these instruments. Derivative Instruments and Hedging Activities Derivative instruments and hedging activities require management to make judgments on the nature of its derivatives and their effectiveness as hedges. These judgments determine if the changes in fair value of the derivative instruments are reported in the Consolidated Statements of Operations as a component of net income or as a component of comprehensive income and as a component of equity on the Consolidated Balance Sheets. While management believes its judgments are reasonable, a change in a derivative’s effectiveness as a hedge could materially affect expenses, net income and equity. The Company accounts for the effective portion of changes in the fair value of a derivative in other comprehensive income (loss) and subsequently reclassifies the effective portion to earnings over the term that the hedged transaction affects earnings. The Company accounts for the ineffective portion of changes in the fair value of a derivative directly in |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 2 EARNINGS PER SHARE Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) 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 options and nonvested stock issued under stock‑based compensation plans is computed using the treasury stock method. The dilutive effect of the Sponsor Warrants and Management Warrants is computed using the if‑converted method. Gains associated with the changes in the fair value of the Sponsor Warrants and Management Warrants are excluded from the numerator in computing diluted earnings per share because inclusion of such gains in the computation would be anti‑dilutive. Information related to our EPS calculations is summarized as follows: Year Ended December 31, (In thousands, except per share amounts) 2017 2016 2015 Basic EPS: Numerator: Net income $ 166,623 $ 202,326 $ 126,719 Net income attributable to noncontrolling interests 1,781 (23) — Net income attributable to common stockholders $ 168,404 $ 202,303 $ 126,719 Denominator: Weighted average basic common shares outstanding 41,364 39,492 39,470 Diluted EPS: Numerator: Net income attributable to common stockholders $ 168,404 $ 202,303 $ 126,719 Less: Warrant liability gain — — (58,320) Adjusted net income attributable to common stockholders $ 168,404 $ 202,303 $ 68,399 Denominator: Weighted average basic common shares outstanding 41,364 39,492 39,470 Restricted stock and stock options 279 343 411 Warrants 1,446 2,894 2,873 Weighted average diluted common shares outstanding 43,089 42,729 42,754 Basic income per share: $ 4.07 $ 5.12 $ 3.21 Diluted income per share: $ 3.91 $ 4.73 $ 1.60 The diluted EPS computation as of December 31, 2017 excludes 313,500 stock options because their inclusion would have been anti-dilutive and 161,155 shares of restricted stock because market conditions have not been met. The diluted EPS computation as of December 31, 2016 excludes 379,500 stock options because their inclusion would have been anti‑dilutive and 130,286 shares of restricted stock because market conditions have not been met. The diluted EPS computation as of December 31, 2015 excludes 141,776 stock options because their inclusion would have been anti‑dilutive. On February 23, 2018, we repurchased 475,920 of our shares of common stock in a private, unaffiliated transaction at an average purchase price of $120.33 per share for $57,267,454 in aggregate. The repurchase transaction was consummated on February 21, 2018, and was funded with cash on hand. |
WARRANT LIABILITIES
WARRANT LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
WARRANT LIABILITIES | |
WARRANT LIABILITIES | NOTE 3 WARRANT LIABILITIES On November 9, 2010, we entered into warrant agreements with certain funds of Pershing Square Capital Management, L.P. (“Pershing Square”) to purchase 1,916,667 shares of our common stock at an exercise price of $50.00 per share (the “Sponsor Warrants”). Pershing Square exercised its Sponsor Warrants on June 30, 2017, resulting in a net issuance of 1,136,517 shares in accordance with the warrant provisions. In November 2010 and February 2011, we entered into certain warrant agreements (the “Management Warrants”) with David R. Weinreb, our Chief Executive Officer, Grant Herlitz, our President, and Andrew C. Richardson, our former Chief Financial Officer, in each case prior to his appointment to such position, to purchase 2,367,985, 315,731 and 178,971 shares, respectively, of our common stock. The Management Warrants were granted at fair value in exchange for a combined total of approximately $19.0 million in cash from such executives at the commencement of their respective employment. Mr. Weinreb and Mr. Herlitz’s warrants had an exercise price of $42.23 per share, and Mr. Richardson’s warrants had an exercise price of $54.50 per share. Mr. Herlitz exercised his Management Warrants in early January 2017, resulting in the net issuance of 198,184 shares in accordance with the warrant provisions. Mr. Herlitz also donated 6,850 shares to a charitable trust, which were net share settled for 4,400 shares in accordance with the warrant provisions. In February, March and June 2017, Mr. Richardson exercised his Management Warrants, resulting in the net issuance of 98,549 shares in accordance with the warrant provisions. In June 2017, Mr. Weinreb exercised his Management Warrants, resulting in the net issuance of 1,614,803 shares in accordance with the warrant provisions. As of December 31, 2017, all Sponsor Warrants and Management Warrants have been exercised. The fair values for the Sponsor Warrants and Management Warrants as of December 31, 2016 were recorded as liabilities in our Consolidated Balance Sheets because the holders of these warrants could require us to settle such warrants in cash upon a change of control. The estimated fair values for the outstanding Sponsor Warrants and Management Warrants totaled $332.2 million as of December 31, 2016. The fair values were estimated using an option pricing model and Level 3 inputs due to the unavailability of comparable market data, as further discussed in Note 7 – Fair Value of Financial Instruments . Decreases and increases in the fair value of the Sponsor and Management Warrants prior to their settlements in 2017 were recognized as warrant liability gains or losses in the Consolidated Statements of Operations in the years ending December 31, 2017, 2016 and 2015. On October 7, 2016, we entered into a warrant agreement with our new Chief Financial Officer, David R. O’Reilly, prior to his appointment to the position. Upon exercise of Mr. O’Reilly’s warrant, Mr. O’Reilly may acquire 50,125 shares of common stock at an exercise price of $112.08 per share. Mr. O’Reilly’s warrant was issued at fair value in exchange for a $1.0 million payment in cash from Mr. O’Reilly. The O’Reilly Warrant becomes exercisable on April 6, 2022, subject to earlier exercise upon certain change in control, separation and termination provisions. On June 16, 2017 and October 4, 2017, we also entered into new warrant agreements with Mr. Weinreb and Mr. Herlitz to acquire 1,965,409 shares and 87,951 shares of common stock for the purchase price of $50.0 million and $2.0 million, respectively. Mr. Weinreb’s new warrant becomes exercisable on June 15, 2022, at an exercise price of $124.64 per share, and Mr. Herlitz’s new warrant becomes exercisable on October 3, 2022, at an exercise price of $117.01 per share, subject to earlier exercise upon certain change in control, separation and termination provisions. The purchase prices paid by the respective executives for the O’Reilly Warrant and Mr. Weinreb’s and Mr. Herlitz’s new warrants, which qualify as equity instruments, are included within additional paid-in capital in the Consolidated Balance Sheets at December 31, 2017. |
ACQUISITIONS AND DISPOSITIONS
ACQUISITIONS AND DISPOSITIONS | 12 Months Ended |
Dec. 31, 2017 | |
ACQUISITIONS AND DISPOSITIONS | |
ACQUISITIONS AND DISPOSITIONS | NOTE 4 ACQUISITIONS AND DISPOSITIONS In the third and fourth quarters of 2017, we closed on the sales of five of our non-core assets for total proceeds of $52.6 million, resulting in a net gain of $23.1 million, of which $19.2 million and $3.9 million are included in Gains on sales of properties and Gains on sales of operating properties, respectively, on our Consolidated Statements of Operations. On December 28, 2017 (the “Constellation Acquisition Date”), we acquired our joint venture partner’s 50.0% interest in Constellation for $8.0 million in cash and 50% of the joint venture’s liabilities for a total of $16.0 million. Simultaneously with the buyout of this luxury apartment development, we replaced the joint venture’s existing $15.8 million construction loan with a $24.2 million mortgage at 4.07% maturing January 1, 2033. As a result of the change in control, we recognized a gain of $17.8 million in Gain on acquisition of joint venture partner's interest in conjunction with this acquisition relating to the step-up to fair value of the assets acquired. The following table summarizes the accounting of the purchase price: Asset Acquisition date fair value Building $ 38,213 Land 3,069 Improvements 957 Furniture, fixtures and equipment 590 Leases in place 714 Other identifiable assets 18 Total $ 43,561 Prior to the acquisition, we accounted for our investment in Constellation under the equity method within Investment in Real Estate and Other Affiliates and recognized a loss of $0.3 million in equity in earnings for the year to date period through the Constellation Acquisition Date. Revenues and pre-tax net income from operations included in the Consolidated Statements of Operations from the Constellation Acquisition Date through December 31, 2017 are not material. On March 1, 2017 (the “Las Vegas 51s Acquisition Date”), we acquired our joint venture partner’s 50.0% interest in the Las Vegas 51s minor league baseball team for $16.4 million and became the sole owner of this Triple-A baseball team. As a result of the change in control, we recognized a gain of $5.4 million in Gain on acquisition of joint venture partner's interest in conjunction with this acquisition relating to the step-up to fair value of the assets acquired. Using the income approach, the allocated fair values included a $0.4 million contingent liability recorded in Accounts payable and accrued expenses per the terms of the purchase agreement relating to a credit for the use of seats in a future stadium for the team, if and when constructed by us, $7.9 million in finite-lived intangibles, which have a weighted average amortization period of 11 years, and $24.9 million to indefinite-lived intangibles, primarily related to the franchise relationship agreement, all of which is recorded in Prepaid expenses and other assets, net. Accordingly, the values of assets acquired and liabilities assumed and consolidated into our financial statements total $36.0 million and $3.2 million, respectively, and are included in our Operating Assets segment. Prior to the acquisition, we accounted for our investment in the Las Vegas 51s under the equity method within Investment in Real Estate and Other Affiliates. The joint venture had revenues of $1.3 million, and we recognized a net loss of $0.2 million included in equity in earnings for the year ended December 31, 2017. Included in the Consolidated Statements of Operations from the Las Vegas 51s Acquisition Date through December 31, 2017 are revenues of $6.8 million and a pre-tax net loss from operations of $0.6 million. On January 18, 2017, we closed on a land sale of approximately 36 acres of our 100-acre property, Elk Grove Collection, for gross sales proceeds of $36.0 million, resulting in a pre-tax gain of $32.2 million. We plan to develop the remaining 64 acres. Commencement of construction is dependent on meeting internal pre-leasing and financing requirements for the project. On January 6, 2017, we acquired the 11.4-acre Macy’s store and parking lot at Landmark Mall in Alexandria, VA, for $22.2 million. The Macy’s parcel is adjacent to the Landmark Mall, which is in our Strategic Developments segment, and is located approximately nine miles from Washington, D.C. We plan to redevelop the mall and the Macy’s parcel into an open-air, mixed-use community. On December 29, 2016, we sold Park West, a non-core 249,177 square foot open-air shopping, dining and entertainment destination in Peoria, Arizona for net cash proceeds of $32.5 million, resulting in a loss of $1.1 million, net of transaction costs. This loss is in addition to an impairment charge recorded in the third quarter of 2016 to adjust the asset to fair value in anticipation of its sale (also see Note 6 – Impairment ). As this asset was unleveraged, the sale allowed us to redeploy the net cash proceeds into acquisitions and other existing developments. On December 20, 2016, we acquired the American City Building, a 117,098 square foot building in Columbia, Maryland, for $13.5 million. We are in the process of formulating redevelopment plans for this property. On December 19, 2016, we acquired One Mall North, a 97,500 square foot, office building in Columbia, Maryland, for $22.2 million. The office building parcel and surface parking total 5.37 acres. On July 20, 2016, we acquired our joint venture partner’s 18.57% interest in the 314-unit Millennium Six Pines Apartments for $4.0 million resulting in the dissolution of the joint venture and consolidation of the asset in our financial statements . Concurrently with the acquisition, we replaced the joint venture’s existing $37.7 million construction loan with a $42.5 million fixed rate loan at 3.39% maturing August 1, 2028. Total assets of $67.9 million and liabilities of $42.7 million, including the fixed rate loan noted above, were consolidated into our financial statements at fair value as of the acquisition date. In accordance with GAAP, we recognized a gain of $27.1 million in conjunction with this acquisition relating to the step-up to fair value of the assets acquired. Prior to the acquisition, we accounted for our investment in Millennium Six Pines Apartments under the equity method. We now own 100% of this Class A multi-family property located in The Woodlands Town Center. Included in the Consolidated Statements of Operations for the year ended December 31, 2016 are revenues of $2.7 million and a pre-tax net loss of $0.4 million since the acquisition date. On March 16, 2016, we sold the 80 South Street Assemblage for net cash proceeds of $378.3 million, resulting in a pre-tax gain of $140.5 million. 80 South Street Assemblage was comprised of a 42,694 square foot lot with certain air rights, providing total residential and commercial development rights of 817,784 square feet that had been acquired over the course of 2014 and 2015. On September 4, 2015, we sold The Club at Carlton Woods, its 36-hole golf and country club in The Woodlands, for net cash proceeds of $25.1 million, and purchaser’s assumption of net liabilities of $4.0 million, resulting in a pre-tax gain of $29.1 million. The property was comprised of total assets of $20.9 million and total liabilities of $24.9 million. The property was developed and operated by us as an amenity for selling residential lots in a gated community in The Woodlands. Most of the lots had been previously sold, and the sale of this property allowed us to redeploy capital to our development activities. |
INVESTMENT IN REAL ESTATE AND O
INVESTMENT IN REAL ESTATE AND OTHER AFFILIATES | 12 Months Ended |
Dec. 31, 2017 | |
REAL ESTATE AND OTHER AFFILIATES | |
REAL ESTATE AND OTHER AFFILIATES | NOTE 5 INVESTMENTS IN REAL ESTATE AND OTHER AFFILIATES Our investment in Real Estate and Other Affiliates that are reported in accordance with the equity and cost methods are as follows: Economic/Legal Ownership Carrying Value Share of Earnings/Dividends December 31, December 31, December 31, December 31, Year Ended December 31, ($ in thousands) 2017 2016 2017 2016 2017 2016 2015 Equity Method Investments Master Planned Communities: The Summit (a) — % — % $ 45,886 $ 32,653 $ 23,234 $ 43,501 $ — Operating Assets: Las Vegas 51s, LLC (b) (c) 100.00 50.00 — 11,062 (152) 12 152 Constellation (b) (c) 100.00 50.00 — 2,730 (323) (54) — The Metropolitan Downtown Columbia (d) 50.00 50.00 — (1,064) 390 (800) (13) Millennium Six Pines Apartments (b) 100.00 100.00 — — — 44 (1,165) Stewart Title of Montgomery County, TX 50.00 50.00 3,673 3,611 386 696 996 Woodlands Sarofim #1 20.00 20.00 2,696 2,683 53 182 166 Strategic Developments: Circle T Ranch and Power Center (a) 50.00 50.00 4,455 4,956 — 10,497 — HHMK Development 50.00 50.00 10 10 — — 549 KR Holdings 50.00 50.00 749 707 41 18 1,289 m.flats/TEN.M (a) 50.00 50.00 6,521 6,379 (415) — — 33 Peck Slip (a) 35.00 35.00 8,651 8,243 (643) 106 (e) — 72,641 71,970 22,571 54,202 1,974 Cost method investments 3,952 4,406 2,927 2,616 1,747 Investment in Real Estate and Other Affiliates $ 76,593 $ 76,376 $ 25,498 $ 56,818 $ 3,721 (a) Please refer to the discussion below for a description of the joint venture ownership structure. (b) We acquired our joint venture partner’s interest and have fully consolidated the assets and liabilities of the entity. See Note 4 – Acquisitions and Dispositions for additional information regarding this transaction. (c) Equity method VIE as of December 31, 2017. (d) The Metropolitan Downtown Columbia was in a deficit position of $2.6 million and $1.1 million at December 31, 2017 and December 31, 2016, respectively, due to distributions from operating cash flows in excess of basis. This deficit balance is presented in Accounts payable and accrued expenses at December 31, 2017. The deficit balance as of December 31, 2016 has been presented as previously reported. (e) The 33 Peck Slip hotel was closed in December 2016 for redevelopment and was transferred to the Strategic Developments segment as of January 1, 2017. The share of earnings for the year ended December 31, 2016 was recorded in the Operating Assets segment but is reflected above in the Strategic Developments segment for comparative purposes. As of December 31, 2017, we are not the primary beneficiary of any of the joint ventures listed above because we do not have the power to direct activities that most significantly impact the economic performance of the joint ventures, and therefore, we report our interests in accordance with the equity method. At December 31, 2017, our 33 Peck Slip VIE with an aggregate carrying value of $8.7 million does not have sufficient equity at risk to finance its operations without additional financial support, as further discussed below. Our maximum exposure to loss as a result of this investment is limited to the aggregate carrying value of the investment as we have not provided any guarantees or otherwise made firm commitments to fund amounts on behalf of this VIE. The aggregate carrying value of unconsolidated VIEs (Las Vegas 51s and Constellation at December 31, 2016, prior to our acquisition) was $13.8 million as of December 31, 2016, and was classified as Investment in Real Estate and Other Affiliates in the Consolidated Balance Sheets. As of December 31, 2017, approximately $183.9 million of indebtedness was secured by the properties owned by our Real Estate and Other Affiliates of which our share was approximately $85.0 million based upon our economic ownership. All of this indebtedness is without recourse to us. We are the primary beneficiary of three VIEs which are consolidated in the financial statements. The creditors of the consolidated VIEs do not have recourse to us. As of December 31, 2017, the carrying values of the assets and liabilities associated with the operations of the consolidated VIEs were $24.8 million and $2.7 million, respectively. As of December 31, 2016, the carrying values of the assets and liabilities associated with the operations of the consolidated VIEs were $21.7 million and $1.4 million, respectively. The assets of the VIEs are restricted for use only by the particular VIEs and are not available for our general operations. Significant activity for our investments in Real Estate Affiliates and the related accounting considerations are described below. The Summit During the first quarter of 2015, we formed DLV/HHPI Summerlin, LLC (“The Summit”) a joint venture with Discovery Land Company (“Discovery”), and we contributed land with a book basis of $13.4 million and transferred SID bonds related to such land with a carrying value of $1.3 million to the joint venture at the agreed upon capital contribution value of $125.4 million, or $226,000 per acre. Discovery is required to fund up to a maximum of $30.0 million of cash as their capital contribution and we have no further capital obligations. The gains on the contributed land will be recognized in Equity in earnings from Real Estate and Other Affiliates as the joint venture sells lots. After receipt of our capital contribution of $125.4 million and a 5.0% preferred return on such capital contribution, Discovery is entitled to cash distributions by the joint venture until it has received two times its equity contribution. Any further cash distributions are shared equally. Discovery is the manager of the project, and development began in the second quarter of 2015. Given the nature of the venture’s capital structure and the provisions for the liquidation of assets, our share of the venture’s income-producing activities will be recognized based on the HLBV method. Please refer to Note 1 – Summary of Significant Accounting Policies for a description of the HLBV method. Relevant financial statement information for The Summit is summarized as follows: December 31, (in millions) 2017 2016 Total Assets $ 166.9 $ Total Liabilities 118.9 Total Equity 48.0 Year Ended December 31, (in millions) 2017 2016 Revenues (a) $ $ Net income Gross Margin (a) Revenues related to land sales at the joint venture are recognized on a percentage of completion basis. Circle T Ranch and Power Center On June 1, 2016, the Westlake Retail Associates joint venture closed on a 72-acre land sale with an affiliate of Charles Schwab Corporation. The year ended December 31, 2016 reflects the recognition of $10.5 million in Equity in earnings from Real Estate and Other Affiliates resulting from the land sale. m.flats/TEN.M On October 4, 2013, we entered into a joint venture agreement with a local developer, Kettler, Inc., to construct an apartment complex with ground floor retail in Downtown Columbia, Maryland. We contributed approximately five acres of land having a book value of $4.0 million to the joint venture and subsequently incurred an additional $3.1 million in capitalized development costs for a total book value contribution of $7.1 million. Our land was valued at $23.4 million, or $53,500 per constructed unit. In January 2016, the joint venture closed on an $88.0 million construction loan which is non-recourse to us and bears interest at one-month LIBOR plus 2.40% with an initial maturity date of February 2020, with three, one-year extension options. Upon closing of the loan, Kettler, Inc. contributed $16.1 million in cash and $7.3 million was distributed to us, of which we subsequently reinvested $6.3 million in the project in 2016. We accounted for this transaction as a partial sale of the land for which we recognized a net profit of $0.2 million at December 31, 2016. 33 Peck Slip In January 2016, we entered into a joint venture to purchase a hotel located at 33 Peck Slip in the Seaport District of New York with a capital contribution of $6.0 million. We advanced a bridge loan of $25.0 million at a 5.0% interest rate to the joint venture at closing to expedite the acquisition, which was repaid in full in June 2016. In the second quarter of 2016, upon completion of a refinancing of the property with a $36.0 million redevelopment loan, we made additional capital contributions of $2.3 million in 2016 and $0.7 million in 2017. The 33 Peck Slip hotel was closed in December 2016 for redevelopment and was transferred to the Strategic Developments segment. Our total investment in the joint venture is $8.7 million as of December 31 , 2017. |
IMPAIRMENT
IMPAIRMENT | 12 Months Ended |
Dec. 31, 2017 | |
IMPAIRMENT | |
IMPAIRMENT | NOTE 6 IMPAIRMENT We review our real estate assets for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment or disposal of long‑lived assets in accordance with ASC 360 requires that if impairment indicators exist and expected undiscounted cash flows generated by the asset over our anticipated holding period are less than its carrying amount, an impairment provision should be recorded to write down the carrying amount of the asset to its fair value. The impairment analysis does not consider the timing of future cash flows and whether the asset is expected to earn an above or below-market rate of return. Each investment in Real Estate and Other Affiliates as discussed in Note 5 – Real Estate and Other Affiliates is evaluated periodically for recoverability and valuation declines that are other-than-temporary. If the decrease in value of our investment in a Real Estate and Other Affiliate is deemed to be other-than-temporary, our investment in such Real Estate and Other Affiliate is reduced to its estimated fair value. No impairment charges were recorded during the years ended December 31, 2017 and 2015. During the third quarter of 2016, we implemented a plan to sell Park West, a 249,177 square foot open-air shopping, dining and entertainment destination in Peoria, Arizona and recognized a $35.7 million impairment charge due to our shorter than previously anticipated holding period, adjusting the net carrying value down to its estimated fair market value. On December 29, 2016, we sold Park West for proceeds of $32.5 million, recognized a loss of $1.1 million, net of transaction costs, in conjunction with the sale and redeployed the net cash proceeds from this unleveraged asset into our existing developments. The following table summarizes our provision for impairment: Provision for impairment as of December 31, Impaired Asset Location Method of Determining Fair Value 2017 2016 2015 (In thousands) Operating Assets: Park West Peoria, AZ Discounted cash flow analysis using capitalization rate of 6.75% $ — $ 35,734 $ — |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 7 FAIR VALUE ASC 820, Fair Value Measurement , emphasizes that fair value is a market-based measurement that should be determined using assumptions market participants would use in pricing an asset or liability. The standard establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability used in measuring assets or liabilities at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the asset or liability. Assets or liabilities with readily available active quoted prices, or for which fair value can be measured from actively quoted prices, generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The following table presents the fair value measurement hierarchy levels required under ASC 820 for each of our assets and liabilities that are measured at fair value on a recurring basis: December 31, 2017 December 31, 2016 Fair Value Measurements Using Fair Value Measurements Using (In thousands) Total Quoted Prices Significant Significant Total Quoted Prices Significant Significant Assets: Cash equivalents $ 50,135 $ 50,135 $ — $ — $ 18 $ 18 $ — $ — Interest rate swap derivative assets 4,470 — 4,470 — — — — — Liabilities: Interest rate swap derivative liabilities 5,961 — 5,961 — (149) — (149) — Warrants — — — — 332,170 — — 332,170 Cash equivalents consist of registered money market mutual funds which are invested in United States Treasury bills that are valued at the net asset value of the underlying shares in the funds as of the close of business at the end of each period. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates derived from observable market interest rate curves. As discussed further in Note 3 – Warrant Liabilities , as of December 31, 2017, all Sponsor and Management warrants had been exercised. The following table presents a rollforward of the valuation of our Warrant liabilities: (In thousands) 2017 2016 2015 Balance as of January 1 $ 332,170 $ 307,760 $ 366,080 Warrant liability loss (gain) (a) 43,443 24,410 (58,320) Exercises of Sponsor and Management Warrants (375,613) — — Balance as of December 31 $ — $ 332,170 $ 307,760 (a) For 2017, this amount represents losses recognized relating to each warrant prior to the respective exercise date. For 2016, represents unrealized losses recorded for outstanding warrants at the end of the period. Changes in the fair value of the Sponsor Warrants and Management Warrants prior to exercise were recognized in net income as a warrant liability gain or loss . The valuation of warrants was based on an option pricing valuation model, utilizing inputs which were classified as Level 3 due to the unavailability of comparable market data. The inputs to the valuation model included the fair value of stock related to the warrants, exercise price and term of the warrants, expected volatility, risk-free interest rate, dividend yield and, as appropriate, a discount for lack of marketability. Generally, an increase in expected volatility would increase the fair value of the liability. The impact of the volatility on fair value diminished as the market value of the stock increased above the strike price. As the period of restriction lapsed, the market ability discount reduced to zero and increased the fair value of the warrants. The significant unobservable inputs used in the fair value measurement of our warrant liabilities as of December 31, 2016 were as follows: Unobservable Inputs Expected Marketability December 31, 2017 (c) N/A N/A December 31, 2016 31.0% 0.0% - 1.0% (a) Based on our implied equity volatility. (b) Marketability discount decreases as the contractual expiration date of the marketability restrictions approaches. (c) See Note 3 – Warrant Liabilities for additional information. The estimated fair values of our financial instruments that are not measured at fair value on a recurring basis are as follows: December 31, 2017 December 31, 2016 (In thousands) Fair Value Carrying Estimated Carrying Estimated Assets: Cash Level 1 $ 810,924 $ 810,924 $ 665,492 $ 665,492 Accounts receivable, net (a) Level 3 13,041 13,041 9,883 9,883 Notes receivable, net (b) Level 3 5,864 5,864 155 155 Liabilities: Fixed-rate debt (c) Level 2 $ 1,526,875 $ 1,554,766 $ 1,184,141 $ 1,224,573 Variable-rate debt (c) Level 2 1,350,914 1,350,914 1,524,319 1,524,319 (a) Accounts receivable, net is shown net of an allowance of $9.3 million and $7.9 million at December 31, 2017 and 2016, respectively. (b) Notes receivable, net is shown net of an allowance of $0.1 million at December 31, 2017 and 2016. (c) Excludes related unamortized financing costs. The fair value of our 2025 Notes, included in fixed-rate debt in the table above, is based upon the trade price closest to the end of the period presented. The fair value of other fixed-rate debt in the table above (please refer to Note 8 – Mortgages, Notes and Loans Payable in our Consolidated Financial Statements), was estimated based on a discounted future cash payment model, which includes risk premiums and a risk free rate derived from the current London Interbank Offered Rate (“LIBOR”) or U.S. Treasury obligation interest rates. The discount rates reflect our judgment as to what the approximate current lending rates for loans or groups of loans with similar maturities and credit quality would be if credit markets are operating efficiently and assuming that the debt is outstanding through maturity. The carrying amounts for our variable-rate debt approximate fair value given that the interest rates are variable and adjust with current market rates for instruments with similar risks and maturities. The carrying amounts of cash and cash equivalents and accounts receivable approximate fair value because of the short‑term maturity of these instruments. |
MORTGAGES, NOTES AND LOANS PAYA
MORTGAGES, NOTES AND LOANS PAYABLE, NET | 12 Months Ended |
Dec. 31, 2017 | |
MORTGAGES, NOTES AND LOANS PAYABLE | |
MORTGAGES, NOTES AND LOANS PAYABLE | NOTE 8 MORTGAGES, NOTES AND LOANS PAYABLE, NET Mortgages, notes and loans payable, net are summarized as follows: December 31, (In thousands) 2017 2016 Fixed-rate debt: Unsecured 5.375% Senior Notes $ 1,000,000 $ — Unsecured 6.875% Senior Notes — 750,000 Secured mortgages, notes and loans payable 499,299 390,118 Special Improvement District bonds 27,576 44,023 Variable-rate debt: Mortgages, notes and loans payable (a) 1,350,914 1,524,319 Unamortized bond issuance costs (6,898) (5,779) Deferred financing costs (12,946) (11,934) Total mortgages, notes and loans payable, net $ 2,857,945 $ 2,690,747 (a) As more fully described below, $428.3 million and $182.1 million of variable rate debt has been swapped to a fixed rate for the term of the related debt as of December 31, 2017 and 2016, respectively. The following table presents our mortgages, notes, and loans payable by property, presented within each segment in order of extended maturity date Maximum Carrying Value Initial / Extended Interest Facility December 31, December 31, ($ in thousands) Maturity (a) Rate Amount 2017 2016 Master Planned Communities Summerlin South SID Bonds - S124 December 2019 % $ 84 $ 123 Summerlin South SID Bonds - S128 December 2020 % 390 440 Summerlin South SID Bonds - S132 December 2020 % 912 1,268 The Woodlands Master Credit Facility April 2020 / April 2021 % (b) $ 180,000 150,000 150,000 Bridgeland Credit Facility November 2020 / November 2022 % (b) 65,000 65,000 65,000 Summerlin South SID Bonds - S151 June 2025 % 3,763 4,159 Summerlin South SID Bonds - S128C December 2030 % 4,283 4,600 Summerlin South SID Bonds - S159 June 2035 % 139 2,389 Summerlin West SID Bonds - S812 October 2035 % 15,193 27,459 Master Planned Communities Total 239,764 255,438 Operating Assets 1701 Lake Robbins April 2017 % — 4,600 Outlet Collection at Riverwalk October 2017 / October 2018 % (b) 53,841 53,841 55,778 1725-35 Hughes Landing Boulevard June 2018 / June 2019 % (b) 143,000 117,417 105,647 The Westin at The Woodlands (c) August 2018 / August 2019 % (b) 57,946 57,946 58,077 110 North Wacker (d) October 2019 % 18,926 22,704 Three Hughes Landing January 2018 / December 2019 % (b) 65,455 45,058 35,053 Lakeland Village Center at Bridgeland May 2018 / May 2020 % (b) 14,000 11,470 9,979 Embassy Suites at Hughes Landing October 2018 / October 2020 % (b) 37,100 31,245 29,461 The Woodlands Resort & Conference Center (c) December 2018 / December 2020 % (b) 65,500 65,500 70,000 One Merriweather February 2020 / February 2021 % (b) 49,929 42,332 23,588 Downtown Summerlin (e) September 2020 / September 2021 % (b) 274,088 274,088 302,981 Two Merriweather October 2020 / October 2021 % (b) 33,156 19,429 — HHC 242 Self-Storage October 2019 / October 2021 % (b) 6,658 6,243 3,708 HHC 2978 Self-Storage Facility January 2020 / January 2022 % (b) 6,368 5,634 1,715 70 Columbia Corporate Center May 2020 / May 2022 % (b)(f) 20,000 20,000 One Mall North May 2020 / May 2022 % (b)(f) 14,463 — 10-60 Columbia Corporate Centers (g) May 2020 / May 2022 % (b)(f) 80,000 20/25 Waterway Avenue May 2022 % 13,646 13,886 Millennium Waterway Apartments June 2022 % 55,095 55,584 Ward Village (h) September 2021 / September 2023 % (b) 238,718 238,718 9303 New Trails December 2023 % 12,003 12,378 4 Waterway Square December 2023 % 35,151 36,249 3831 Technology Forest Drive March 2026 % 21,954 22,383 Kewalo Basin Harbor September 2027 % (b) 11,562 — — Millennium Six Pines Apartments August 2028 % 42,500 42,500 3 Waterway Square August 2028 % 50,327 51,590 One Hughes Landing December 2029 % 52,000 52,000 Downtown Summerlin SID Bonds - S128 December 2030 % 2,812 3,350 Two Hughes Landing December 2030 % 48,000 48,000 One Lakes Edge March 2029 / March 2031 % 69,440 68,874 Constellation Apartments January 2033 % 24,200 — Hughes Landing Retail December 2036 % 35,000 35,000 Columbia Regional Building February 2037 % 25,000 22,188 Other Various % — 236 Operating Assets Total 1,589,438 1,526,227 Strategic Developments Waiea and Anaha November 2017 / November 2019 % (b) — 160,847 Ke Kilohana December 2019 / December 2020 % (b) 142,656 — — Ae`o December 2019 / December 2021 % (b) 230,000 33,603 — 100 Fellowship Drive May 2022 % (b) 51,426 1 — Aristocrat October 2022 % (b) 31,118 — — Two Summerlin October 2022 % (b) 33,432 — — Strategic Developments Total 33,604 160,847 Other corporate financing arrangements July 2018 % 14,983 15,948 Senior Notes October 2021 % — 750,000 Senior Notes March 2025 % 1,000,000 — Unamortized bond issuance costs (6,898) (5,779) Deferred financing costs (12,946) (11,934) Total mortgages, notes, and loans payable $ 2,857,945 $ 2,690,747 (a) Maturity dates presented include initial maturity date as well as the extended or final maturity date as contractually stated. Extension periods generally can be exercised at our option at the initial maturity date, subject to customary extension terms that are based on current property performance projections. Such extension terms may include, but are not limited to, minimum debt service coverage, minimum occupancy levels or condominium sales levels, as applicable and other performance criteria. In certain cases due to property performance not meeting covenants, we may have to paydown a portion of the loan in order to obtain the extension. (b) The interest rate presented is based on the one month LIBOR, three month LIBOR or Prime rate, as applicable, which was 1.49%, 1.61% and 4.50%, respectively, at December 31, 2017. (c) Based on current performance of The Westin at The Woodlands and The Woodlands Resort and Conference Center, a paydown may be required in order to exercise the extension option. (d) LIBOR on the $18.9 million outstanding principal balance is swapped to a 2.96% fixed-rate through maturity resulting an overall fixed rate of 5.21%. (e) The forward starting swaps related to this debt became effective on December 31, 2017. LIBOR on the $100.0 million of the outstanding principal balance is swapped to a 2.68% fixed-rate through maturity, LIBOR on another $100.0 million of the outstanding principal balance is swapped to a 2.62% fixed-rate through maturity, and LIBOR on $50.0 million of the outstanding principal balance is swapped to a 2.65% fixed-rate through maturity resulting in an overall rate of 4.69% (f) These three notes are part of one master facility, with all three respective properties collateralizing the total $114.5 million indebtedness. (g) LIBOR on $40.0 million of the outstanding principal balance is swapped to a 1.66% fixed-rate through maturity resulting in an overall fixed rate of 3.33%. (h) LIBOR on $119.4 million of the outstanding principal balance is swapped to a 1.14% fixed-rate through maturity resulting in an overall fixed rate of 3.82%. T he weighted average interest rate on our mortgages, notes and loans payable, excluding interest rate hedges, was 4.61% and 4.71% as of December 31, 2017 and 2016, respectively. Except for the items listed below, all of the mortgage debt is secured by the individual properties listed in the table above and is non-recourse to HHC: i. $1.0 billion of Senior Notes due 2025; ii. $274.1 million financing for the Downtown Summerlin development which has an initial maximum recourse of 35% of the outstanding balance, which will reduce to 15.0% upon achievement of a 1.15:1.0 debt service coverage ratio. The recourse further reduces to 10% upon achievement of a 1.25:1.0 debt service coverage ratio, a 90% occupancy level, and average tenant sales of at least $500.00 per net rentable square foot. As of December 31, 2017, 35% of the outstanding loan balance remains recourse to HHC; iii. $26.9 million, or 50% of the Outlet Collection at Riverwalk outstanding loan balance is recourse to HHC; iv. $15.0 million of Other Corporate Financing Arrangements; and v. $18.9 million of the 110 North Wacker mortgage. Certain of our loans contain provisions which grant the lender a security interest in the operating cash flow of the property that represents the collateral for the loan. Certain mortgage notes may be prepaid subject to a prepayment penalty equal to a yield maintenance premium, defeasance, or a percentage of the loan balance. As of December 31, 2017, land, buildings and equipment and developments with a net book value basis of $3.4 billion have been pledged as collateral for our mortgages, notes and loans payable. The following table summarizes the contractual obligations relating to our mortgages, notes and loans payable as of December 31, 2017 based on extended maturity dates: Mortgages, notes and loans payable (In thousands) principal payments 2018 $ 78,207 2019 256,338 2020 178,836 2021 467,010 2022 251,086 Thereafter 1,646,312 Total principal payments 2,877,789 Deferred financing costs, net and unamortized underwriting fees (19,844) Total mortgages, notes and loans payable $ 2,857,945 As of December 31, 2017, we were in compliance with all financial covenants included in the debt agreements governing our indebtedness. Master Planned Communities The Woodlands Master Credit Facility was amended and restated on July 31, 2015 to a $200.0 million maximum facility amount consisting of a $100.0 million term loan and a $100.0 million revolver (together, the “TWL Facility”). The TWL Facility bears interest at one-month LIBOR plus 2.75% and had an August 2016 initial maturity date with two, one–year extension options. In July 2016, we exercised our first one-year extension option, which reduced the total commitment to $175.0 million. Semi-annual principal payments of $25.0 million began on December 31, 2016 and continue through the second, optional one-year extension period. The TWL Facility and The Woodlands Resort & Conference Center loans are recourse to the entities that directly own The Woodlands operations. The TWL Facility also contains certain covenants that, among other things, require the maintenance of specified financial ratios, limit the incurrence of additional recourse indebtedness at The Woodlands, and limit distributions from The Woodlands to us based on a loan‑to‑value test. The amendment also modified certain covenants to allow for more construction loan guarantees by the entities that directly own The Woodlands than would otherwise have been permitted by the prior facility. On April 27, 2017, TWL Facility was refinanced to increase the facility by $30.0 million for a total of $180.0 million, providing the ability to fund the development of Creekside Park Apartments or for other corporate purposes. The new facility bears interest at one-month LIBOR plus 2.75% with an initial maturity date of April 27, 2020 and a one-year extension option. The Summerlin MPC uses SID bonds to finance certain common infrastructure improvements. These bonds are issued by the municipalities and are secured by the assessments on the land. The majority of proceeds from each bond issued is held in a construction escrow and disbursed to us as infrastructure projects are completed, inspected by the municipalities and approved for reimbursement. Accordingly, the SID bonds have been classified as debt, and the Summerlin MPC pays the debt service on the bonds semi‑annually. As Summerlin sells land, the buyers assume a proportionate share of the bond obligation at closing, and the residential sales contracts provide for the reimbursement of the principal amounts that we previously paid with respect to such proportionate share of the bond. In the years ended December 31, 2017 and 2016, no new SID bonds were issued and $13.9 million and $7.7 million in obligations were assumed by buyers, respectively. O perating Assets On January 19, 2018, we paid off the $18.9 million mortgage loan for 110 North Wacker and settled the related swap asset of $0.3 million. On December 28, 2017, we closed on a $24.2 million non‑recourse financing for Constellation, a multi-family building located in Summerlin. The loan bears interest at 4.07% and matures on January 1, 2033. On December 5, 2017, we executed a modification of our $65.5 million Three Hughes Landing facility to extend the maturity 30 days to January 5, 2018. On January 5, 2018, we modified and extended the loan which bears interest at one-month LIBOR plus 2.60% with an initial maturity of December 5, 2018, with two, one-year extension options. On September 13, 2017, we modified and extended our $311.8 million Downtown Summerlin facility with a $30.0 million paydown. The modified loan has a maximum facility of $275.9 million and bears interest at one-month LIBOR plus 2.15% with a maturity of September 13, 2020, with one, one-year extension option. On August 11, 2017, we closed on a construction loan totaling $11.6 million for Kewalo Harbor, located in Honolulu, Hawai‘i, to be used for improvements benefitting our Ward Village development. The loan bears interest at one-month LIBOR plus 2.75% with a maturity of September 1, 2027. As of December 31, 2017, we had not drawn any proceeds under this loan. On April 6, 2017, we paid off a $4.6 million maturing mortgage loan that we assumed as part of the acquisition of 1701 Lake Robbins in July 2014. On January 19, 2017, we closed on a non‑recourse financing totaling $25.0 million replacing the $23.0 million construction loan on the Columbia Regional Building, a retail building located in Columbia, Maryland. The loan bears interest at 4.48% and matures on February 11, 2037. On January 17, 2017, we amended and restated our $80.0 million non-recourse mortgage financing for the 10-60 Columbia Corporate Center office buildings with a $94.5 million loan. Contemporaneously with this amendment, we received $14.5 million to purchase One Mall North, a 97,500 square foot office building in Columbia, Maryland. The loan bears interest at LIBOR plus 1.75% and has an initial maturity date of May 6, 2020, with two, one-year extension options. On June 27, 2017, we modified our $94.5 million non-recourse mortgage financing with a $114.5 million loan. This amendment added 70 Columbia Corporate Center, a 170,741 square foot office building in Columbia, Maryland, to the collateral pool and allowed us to draw $20.0 million and fully repay the outstanding balance of the existing indebtedness on the 70 Columbia Corporate Center note. On December 30, 2016, we amended and restated our $85.0 million mortgage financing for The Woodlands Resort & Conference Center with a $70.0 million mortgage. Contemporaneously with this amendment, we made a $15.0 million principal reduction payment as required by the loan agreement. The loan bears interest at LIBOR plus 3.25% and has an initial maturity date of December 30, 2018, with two, one-year extension options. On December 8, 2016, we modified the $36.6 million financing to $35.0 million for Hughes Landing Retail. The loan bears fixed interest at 3.50% and has an initial maturity date of December 8, 2036. On November 25, 2016, we amended and extended our $73.5 million construction loan for One Lakes Edge with a $71.9 million mortgage. Contemporaneously with this amendment, we made a $3.0 million principal reduction payment as required by the loan agreement. The loan bears interest at one-month LIBOR plus 3.50%. On February 23, 2017, we refinanced the One Lakes Edge construction loan with a 12-year Fannie Mae loan. The new loan amount is $69.4 million with a fixed rate of 4.50%. The loan is interest only for four years then begins amortizing on a 30-year basis. On October 24, 2016, we modified the $64.4 million construction financing to $56.1 million for Outlet Collection at Riverwalk. The loan bears interest at one-month LIBOR plus 2.75% and has an initial maturity date of October 24, 2017 with one, one–year extension option. On October 24, 2017, we exercised our one-year extension option on our $54.3 million Outlet Collection at Riverwalk facility which extended the maturity date to October 24, 2018. The initial recourse amount of 50.0% will be reduced to 25.0% upon the achievement of an 11.0% debt yield and a minimum level of tenant sales per square foot for 12 months. As of December 31, 2017, 50% of the outstanding loan balance remains recourse to us. On October 7, 2016, we closed on a $33.2 million non-recourse construction loan for Two Merriweather, bearing interest at one-month LIBOR plus 2.50% with an initial maturity date of October 7, 2020 and a one-year extension option. On September 12, 2016, we amended and restated the $238.7 million first mortgage secured by Ward Village. The non-recourse term loan bears interest at one-month LIBOR plus 2.50% with an initial maturity date of September 12, 2021, with two, one year extension options. $119.4 million of the outstanding principal balance is swapped at a 3.64% fixed-rate through maturity. There was no undrawn availability on this loan as of December 31, 2017. On February 25, 2016, we closed on a $49.9 million non-recourse construction loan for One Merriweather, bearing interest at one-month LIBOR plus 2.15% with an initial maturity date of February 25, 2020, with a one-year extension option. On January 27, 2016, we closed on a $6.4 million non-recourse construction loan for the HHC 2978 Self-Storage Facility, bearing interest at one-month LIBOR plus 2.60% with an initial maturity date of January 2020, with two, one-year extension options. Strategic Developments On January 25, 2018, we closed on a financing totaling $15.5 million for Lake Woodlands Crossing Retail, a project located in The Woodlands, Texas. The loan bears interest at LIBOR plus 1.80%, matures on January 25, 2023, and has an initial maximum recourse of 50% of the outstanding balance prior to completion of construction, at which point the repayment guarantee will reduce to 15% provided the project is 90% leased. On October 27, 2017, we repaid the $195.3 million outstanding on our construction loan relating to Waiea and Anaha in conjunction with closing on the sales of units at Anaha. On October 19, 2017, we closed on a construction loan totaling $64.6 million, of which $31.1 million will be used for development of Aristocrat and $33.5 million will be used for development of Two Summerlin. The loan bears interest at Wall Street Journal Prime plus 0.40% with a maturity of October 19, 2022. On May 31, 2017, we closed on a $51.4 million construction loan for 100 Fellowship Drive, located in The Woodlands. The loan bears interest at one-month LIBOR plus 1.50% with a maturity of May 31, 2022. On December 23, 2016, we closed on a $142.7 million partial recourse construction loan for Ke Kilohana, bearing interest at one-month LIBOR plus 3.25% with an initial maturity date of December 23, 2019 and a one-year extension option. On December 23, 2016, we closed on a $230.0 million non-recourse construction loan for Ae`o, bearing interest at one-month LIBOR plus 4.00% with a 4.50% floor and 2.50% LIBOR cap. The initial maturity date is December 23, 2019 with two, one-year extension options. Corporate On March 16, 2017, we issued $800.0 million in aggregate principal amount of 5.375% senior notes due March 15, 2025 (the “2025 Notes”) and completed a tender offer and consent solicitation for any and all of our $750.0 million existing 6.875% senior notes due October 1, 2021. We recognized a loss on redemption of $46.4 million in conjunction with this transaction. On June 12, 2017, we issued an additional $200.0 million of the 2025 Notes at a premium to par of 2.25%. Interest on the 2025 Notes is paid semi-annually, on March 15th and September 15th of each year, beginning on September 15, 2017. At any time prior to March 15, 2020, we may redeem all or a portion of the 2025 Notes at a redemption price equal to 100% of the principal plus a “make-whole” declining call premium. At any time prior to March 15, 2020, we may also redeem up to 35% of the 2025 Notes at a price of 105.375% with net cash proceeds of certain equity offerings, plus accrued and unpaid interest. The 2025 Notes contain customary terms and covenants and have no financial maintenance covenants. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
INCOME TAXES | NOTE 9 INCOME TAXES On December 22, 2017, President Trump signed into law H.R. 1, known as the “Tax Cuts and Jobs Act” (the “Tax Act”) that significantly changes the United States federal income tax system. The Tax Act includes a number of changes in existing law including a permanent reduction in the federal income tax rate from 35% to 21%. The rate reduction took effect on January 1, 2018. Deferred income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities using enacted tax rates currently in effect. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. As a result of the reduction in the federal income tax rate to 21% and other changes under the Tax Act that impact timing differences, we recorded a one-time transitional tax benefit of $101.7 million in our consolidated statement of operations related to the remeasurement of our net deferred tax liabilities. This provisional amount of $101.7 million is based on our current understanding of the impact of the Tax Act, which may change in the near future as notices and regulations regarding the Tax Act are issued. We need more time and further guidance to more accurately account for the tax law changes under ASC 740. While we feel confident we have accounted for the other material changes in the tax law correctly, any future notices or regulations further clarifying the law could alter our analysis. The provision for (benefit from) income taxes for the years ended December 31, 2017, 2016 and 2015 were as follows: (In thousands) 2017 2016 2015 Current $ $ 4,752 $ 2,849 Deferred (43,463) 113,698 21,152 Total $ $ 118,450 $ 24,001 Income tax expense is computed by applying the Federal corporate tax rate for the years ended December 31, 2017, 2016 and 2015 and is reconciled to the provision for income taxes as follows: (In thousands) 2017 2016 2015 Tax at statutory rate on earnings from continuing operations before income taxes $ 42,911 $ 112,264 $ 52,751 (Decrease) increase in valuation allowance, net (175) (1,326) 1,742 State income taxes, net of Federal income tax benefit 1,408 4,004 267 Tax benefit from Tax Act (101,688) — — Tax expense (benefit) from other change in rates, prior period adjustments and other permanent differences 2,941 (4,591) (7,361) Tax benefit on equity compensation (6,403) — — Non-deductible warrant liability loss (gain) 15,205 8,544 (20,412) Uncertain tax position benefit excluding interest — (407) (2,483) Uncertain tax position interest, net of Federal income tax benefit — (38) (503) Income tax (benefit) expense $ (45,801) $ 118,450 $ 24,001 Realization of a deferred tax benefit is dependent upon generating sufficient taxable income in future periods. Our net operating loss carryforwards are currently scheduled to expire in subsequent years through 2037. Some of the net operating loss carryforward amounts are subject to the separate return limitation year rules (“SRLY”). It is possible that in the future we could experience a change in control pursuant to Section 382 that could put limits on the benefit of deferred tax assets. On February 27, 2012, we entered into a Section 382 Rights Agreement, with a three-year term, to protect us from such an event and protect our deferred tax assets. On February 26, 2015, the Board of Directors extended the term of the Section 382 Rights Agreement to March 14, 2018, and our stockholders approved the terms on May 21, 2015. However, on January 2, 2018, the Board of Directors approved, and we entered into, an amendment to the Section 382 Rights Agreement to provide for an amended expiration date of January 2, 2018 and, as a result, the Section 382 Right Agreement was no longer in effect as of such date. Currently, our deferred tax assets are not protected by a Section 382 Rights Plan. As of December 31, 2017, the amounts and expiration dates of operating loss and tax credit carryforwards for tax purposes are as follows: Expiration (In thousands) Amount Date Net operating loss carryforwards - Federal $ 147,059 2024-2037 Net operating loss carryforwards - State 327,221 2018-2037 Capital loss carryforwards — n/a Tax credit carryforwards - Federal AMT 3,699 n/a As of December 31, 2017 and 2016, we had gross deferred tax assets totaling $172.4 million and $294.5 million, and gross deferred tax liabilities of $316.0 million and $476.8 million, respectively. We have established a valuation allowance in the amount of $17.3 million and $18.6 million as of December 31, 2017 and 2016, respectively, against certain deferred tax assets for which it is more likely than not that such deferred tax assets will not be realized. The tax effects of temporary differences and carryforwards included in the net deferred tax liabilities at December 31, 2017 and 2016 are summarized as follows: (In thousands) 2017 2016 Deferred tax assets: Operating and Strategic Developments properties, primarily differences in basis of assets and liabilities $ 92,210 $ 208,862 Interest deduction carryforwards 29,247 54,759 Operating loss and tax credit carryforwards 50,914 30,866 Total deferred tax assets 172,371 294,487 Valuation allowance (17,271) (18,635) Total net deferred tax assets $ 155,100 $ 275,852 Deferred tax liabilities: Property associated with MPCs, primarily differences in the tax basis of land assets and treatment of interest and other costs $ (157,181) $ (262,572) Operating and Strategic Developments properties, primarily differences in basis of assets and liabilities (60,430) (40,915) Deferred income (98,339) (173,310) Total deferred tax liabilities (315,950) (476,797) Total net deferred tax liabilities $ (160,850) $ (200,945) The deferred tax liability associated with the MPCs is largely attributable to the difference between the basis and value determined as of the date of the acquisition by our predecessors in 2004 adjusted for sales that have occurred since that time. The cash cost related to this deferred tax liability is dependent upon the sales price of future land sales and the method of accounting used for income tax purposes. The deferred tax liability related to deferred income is the difference between the income tax method of accounting and the financial statement method of accounting for prior sales of land in our MPCs. Although we believe our tax returns are correct, the final determination of tax examinations and any related litigation could be different from what was reported on the returns. In our opinion, we have made adequate tax provisions for years subject to examination. Generally, we are currently open to audit under the statute of limitations by the Internal Revenue Service as well as state taxing authorities for the years ended December 31, 2014 through 2016. We apply the generally accepted accounting principle related to accounting for uncertainty in income taxes, which prescribes a recognition threshold that a tax position is required to meet before recognition in the financial statements and provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. We recognize and report interest and penalties, if applicable, within our provision for income tax expense. We recognized potential interest expense related to the unrecognized tax benefits of $0.1 million for the year ended December 31, 2015. At December 31, 2017 and 2016, we had no unrecognized tax benefits and therefore recognized no interest expense. At December 31 2015, we had total unrecognized tax benefits of $36.5 million, excluding interest, of which none would impact our effective tax rate. A reconciliation of the change in our unrecognized tax benefits for the years ended December 31, 2017, 2016 and 2015 is as follows: (In thousands) 2017 2016 2015 Unrecognized tax benefits, opening balance $ — $ 36,524 $ 184,200 Gross increases - tax positions in prior period — — — Gross decreases - tax positions in prior periods — (36,524) (147,676) Unrecognized tax benefits, ending balance $ — $ — $ 36,524 The reduction in unrecognized tax benefits of $36.5 million between the period December 31, 2015 and December 31, 2016 was the result of our filing a request with the IRS to change our tax accounting method related to a subsidiary from an impermissible accounting method to a permissible accounting method which we expect to be approved. Periodically we make payments to taxing jurisdictions that reduce our uncertain tax benefits but are not included in the reconciliation above, as the position is not yet settled. We made no such payments in the years ending December 31, 2017, 2016 or 2015. As of December 31, 2017 and 2016, there are no unrecognized tax benefits. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 COMMITMENTS AND CONTINGENCIES 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. As of December 31, 2017 and December 31, 2016, we had outstanding letters of credit totaling $13.8 million and $6.5 million, and surety bonds totaling $88.5 million and $112.4 million, respectively. These letters of credit and bonds were issued primarily in connection with insurance requirements, special real estate assessments and construction obligations. We lease land or buildings at certain properties from third parties. Rental payments are expensed as incurred and have, to the extent applicable, been straight‑lined over the term of the lease. Contractual rental expense, including participation rent, was $8.6 million, $8.4 million and $9.1 million for 2017, 2016 and 2015, respectively. The amortization of above and below‑market ground leases and straight‑line rents included in the contractual rent amount was not significant. Our obligations for minimum rentals under non-cancelable operating leases are as follows: Subsequent/ (In thousands) 2018 2019 2020 2021 2022 Other Total Ground lease and other leasing commitments $ 8,769 $ 8,119 $ 8,259 $ 8,097 $ 7,430 $ 314,129 $ 354,803 Seaport District On June 27, 2013, the City of New York executed the amended and restated ground lease for Seaport District NYC. The restated lease terms provide for annual fixed base rent of $1.2 million starting July 1, 2013 with an expiration of December 30, 2072, including our options to extend. The rent escalates at 3.0% compounded annually. On July 1, 2048 the base rent will be adjusted to the higher of fair market value or the then base rent. In addition to the annual base rent, we are required to make annual payments of $210,000 toward maintenance of the East River esplanade as additional rent through the term of the lease. The additional rent escalates annually at the Consumer Price Index. Simultaneously with the execution of the lease, we executed a completion guaranty for the redevelopment of Pier 17. On January 11, 2017, we executed an amendment of the lease which, pursuant to our lease option, added an additional premise to the lease and modified other related provisions. The 2017 amendment provides for an appraisal update to be performed on completion of construction for the purposes of determining any additional rent. In the fourth quarter 2012, the historic area of Seaport District NYC suffered damage due to flooding as a result of Superstorm Sandy. Reconstruction efforts are ongoing and the property is only partially operating. We have received $54.8 million in insurance proceeds, and we recognized Other income of $0.7 million, $6.2 million and $0.3 million for the years ended December 31, 2017, 2016 and 2015, respectively, for the receipt of insurance proceeds related to our claim. Columbia In November 2016, the Howard County Council authorized the issuance of up to $90.0 million of TIF bonds for the Downtown Columbia Redevelopment District’s master plan. The Final Limited Offering Memorandum for the first tranche relates to the Merriweather District, and closing on the $48.2 million of Series 2017 A Special Obligation Bonds occurred in October 2017. In the Funding Agreement for the TIF, one of our wholly-owned subsidiaries, The Howard Research and Development Corporation, has agreed to complete certain defined public improvements and to indemnify Howard County, and we have guaranteed these obligations, with a limit of $1.0 million, expiring 36 months after bond issuance. |
OTHER ASSETS AND LIABILITIES
OTHER ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
OTHER ASSETS AND LIABILITIES | |
OTHER ASSETS AND LIABILITIES | NOTE 11 OTHER ASSETS AND LIABILITIES The following table summarizes the significant components of Prepaid expenses and other assets: December 31, (In thousands) 2017 2016 Condominium receivables (a) $ 158,516 $ 210,219 Condominium deposits 82,605 193,197 Straight-line rent 39,136 31,518 Security and escrow deposits 37,585 61,304 Intangibles 34,802 4,046 Special Improvement District receivable 26,430 61,603 Below-market ground leases 18,647 18,986 In-place leases 10,821 16,015 Above-market tenant leases 1,648 2,457 Equipment, net of accumulated depreciation of $6.9 million and $5.3 million, respectively 16,955 17,556 Prepaid expenses 11,731 11,177 Tenant incentives and other receivables 8,482 8,773 Interest rate swap derivative assets 4,470 — Federal income tax receivable 2,198 15,763 Other 19,242 13,902 $ 473,268 $ 666,516 (a) We expect $4.4 million related to Anaha will be collected in 2018, and $151.5 million and $2.7 million relating to Ae`o and Ke Kilohana, respectively, will be collected in 2019. The $193.2 million net decrease primarily relates to the following decreases: a $110.6 million decrease in condominium deposits due to net sales activity primarily at Waiea, Ae’o and Ke Kilohana; a decrease of $51.7 million in Condominium receivables due to closings at our Waiea and Anaha projects; a decrease of $35.2 million in Special Improvement District Receivable used to fund development costs incurred at Summerlin due to collections; a decrease of $23.7 million in security and escrow deposits primarily relating to the utilization of escrowed sales proceeds to fund remaining construction costs at Waiea; a $13.6 million decrease in Federal income tax receivables due to two IRS tax refunds; a $5.2 million decrease in In-place leases; and $2.0 million in other decreases related to above and below-market ground leases, Equipment and Tenant incentives related primarily to normally scheduled amortization. These decreases were offset by the following: an increase of $30.8 million in Intangible Assets due to our acquisition of our partner’s 50.0% interest in the Las Vegas 51s; an increase of $7.6 million in Straight-line rent due to additional Operating Assets placed in service during the year; a $5.3 million increase in Other assets relating a receivable recorded relating to reimbursable costs by the Howard County TIF District; an increase of $4.5 million in Interest rate swap derivative assets; and a $0.6 million increase in prepaid expenses. Accounts Payable and Accrued Expenses The following table summarizes the significant components of Accounts payable and accrued expenses: December 31, (In thousands) 2017 2016 Construction payables $ 217,838 $ 207,917 Condominium deposit liabilities 55,975 117,015 Deferred income 53,337 85,158 Accounts payable and accrued expenses 35,887 33,050 Tenant and other deposits 18,937 28,559 Accrued payroll and other employee liabilities 41,236 36,937 Accrued interest 20,322 16,897 Accrued real estate taxes 22,289 16,726 Straight-line ground rent liability 14,944 13,126 Interest rate swaps 5,961 (149) Above-market ground leases 293 1,762 Other 34,699 15,012 $ 521,718 $ 572,010 The $50.3 million net decrease in total accounts payable and accrued expenses primarily relates to the following decreases: $61.0 million in Condominium deposit liabilities for the towers under construction at Ward Village as the projects move toward completion; a decrease of $31.8 million in deferred income related to recognition of income from previously deferred land sales at our Summerlin and Bridgeland MPCs; a decrease of $9.6 million in tenant and other deposits primarily related to amortization of a tenant’s prepaid rent ; and a decrease of $1.5 million related to our Above-Market Ground Leases. These decreases were partially offset by the following increases: a $19.7 million increase in Other payables which primarily relates to costs of $13.4 million accrued for our Ward Village master plan common costs; an increase of $9.9 million in construction payables primarily due to continued development activities at both Ward Village and the Merriweather District; a $6.1 million increase in Interest rate swaps liability primarily due to a decrease in fair value of the forward-starting swaps; an increase of $1.8 million in Straight-line ground rent liability due to additional Operating Assets placed in service during the year. |
INTANGIBLES
INTANGIBLES | 12 Months Ended |
Dec. 31, 2017 | |
INTANGIBLES | |
INTANGIBLES | NOTE 12 INTANGIBLES The following table summarizes our intangible assets and liabilities: As of December 31, 2017 As of December 31, 2016 Gross Accumulated Net Gross Accumulated Net Asset (Amortization) Carrying Asset (Amortization) Carrying (In thousands) (Liability) / Accretion Amount (Liability) / Accretion Amount Intangible Assets: Indefinite lived intangibles $ 25,028 $ — $ 25,028 $ — $ — $ — Goodwill 1,307 — 1,307 1,307 — 1,307 Other intangibles 10,278 (1,812) 8,466 3,038 (299) 2,739 Tenant leases: In-place value 22,304 (11,483) 10,821 37,567 (21,552) 16,015 Above-market 4,171 (2,523) 1,648 4,879 (2,422) 2,457 Below-market (6,454) 2,688 (3,766) (6,618) 2,065 (4,553) Ground leases: Above-market (293) — (293) (1,955) 193 (1,762) Below-market 23,096 (4,449) 18,647 23,096 (4,110) 18,986 Total indefinite lived intangibles 26,335 1,307 Total amortizing intangibles 35,523 33,882 The tenant in-place, above-market and below-market lease intangible assets and the above-market and below-market ground lease intangible assets resulted from real estate acquisitions. The in‑place value, above-market value of tenant leases and below-market ground lease are included in Prepaid expenses and other assets in our Consolidated Balance Sheets and are amortized over periods that approximate the related lease terms. The above‑market ground lease and below‑market tenant leases are included in Accounts payable and accrued expenses as detailed in Note 11 – Other Assets and Other Liabilities and are amortized over the remaining non‑cancelable terms of the respective leases. Amortization/accretion of these intangible assets and liabilities decreased our pre-tax income (excluding the impact of noncontrolling interest and the provision for income taxes) by $8.9 million in 2017, $6.3 million in 2016 and $10.5 million in 2015. Future amortization/accretion is estimated to decrease pre-tax income (excluding the impact of noncontrolling interest and the provision for income taxes) by $5.0 million in 2018, $3.7 million in 2019, $2.3 million in 2020, $1.7 million in 2021 and $22.9 million thereafter. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2017 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 13 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We are exposed to interest rate risk related to our variable interest rate debt, and we manage this risk by utilizing interest rate derivatives. To add stability to interest costs by reducing our exposure to interest rate movements, we use interest rate swaps and caps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our fixed‑rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up‑front premium. Our interest rate caps are not currently designated as hedges, and therefore, any gain or loss is recognized in current period earnings. These derivatives are recorded on a gross basis at fair value . The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive Income (“AOCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings in Other (loss) income, net. During the year ended December 31, 2017, the ineffective portion is $0.7 million. During the years ended December 31, 2016 and 2015, the ineffective portion recorded in earnings was insignificant. Assessments of hedge effectiveness are performed quarterly using regression analysis and the measurement of hedge ineffectiveness is based on the hypothetical derivative method. We are exposed to credit risk in the event of non-performance by our derivative counterparties. We evaluate counterparty credit risk through monitoring the creditworthiness of counterparties, which includes review of debt ratings and financial performance. To mitigate its credit risk, we enter into agreements with counterparties we consider credit-worthy, such as large financial institutions with favorable credit ratings. As of December 31, 2017 and 2016, there were no termination events or events of default related to the interest rate swaps. If the derivative contracts are terminated prior to their maturity, the amounts previously recorded in AOCI are recognized into earnings over the period that the hedged transaction impacts earnings. If the hedging relationship is discontinued because it is probable that the forecasted transaction will not occur according to the original strategy, any related amounts previously recorded in AOCI are recognized in earnings immediately. The following table summarizes details related to our derivative contracts : Fixed Fair Value Asset (Liability) Notional Interest Effective Maturity December 31, December 31, (In thousands) Balance Sheet Location Amount Rate Date Date 2017 2016 Currently-paying contracts: Interest Rate Swap (a) Accounts payable and accrued expenses $ % 5/10/2011 10/31/2019 $ (286) $ (740) Interest Rate Swap (a) Prepaid expenses and other assets, net 5/6/2015 5/1/2020 299 (143) Interest Rate Swap (a) Prepaid expenses and other assets, net 10/3/2016 9/12/2021 4,007 3,368 Interest Rate Cap (b) Prepaid expenses and other assets, net 9/1/2017 8/31/2019 — — Interest Rate Cap (c) Prepaid expenses and other assets, net 12/22/2016 12/23/2019 164 768 Interest Rate Swap (a) (d) Accounts payable and accrued expenses 12/31/2017 12/31/2027 (1,124) (610) Interest Rate Swap (a) (d) Accounts payable and accrued expenses 12/31/2017 12/31/2027 (2,509) (1,479) Interest Rate Swap (a) (d) Accounts payable and accrued expenses 12/31/2017 12/31/2027 (2,042) (1,015) Total fair value derivative assets $ 4,470 $ 4,136 Total fair value derivative liabilities $ (5,961) $ (3,987) (a) Denotes derivatives designated as hedging instruments. (b) As of December 31, 2016, our $100.0 million interest rate cap with a 5.00% interest rate and an August 31, 2017 maturity date was in place and matured as scheduled. A new interest rate cap was entered into as detailed above and is not currently designated as a hedging instrument. Interest (income) expense included in the consolidated statements of operations for the year ended December 31, 2017 related to this contract is not material . (c) Denotes derivative contract that is not designated as a hedging instrument as of December 31, 2017. Interest (income) expense of $(0.6) million is included in the consolidated statements of operations for the year ended December 31, 2017, related to this contract. (d) Forward starting swaps were entered into in December 2015 and became effective as of December 31, 2017. The tables below present the effect of our derivative financial instrument on the Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015: Amount of Loss Recognized in AOCI on Derivative (Effective Portion) Year Ended December 31, Derivatives in Cash Flow Hedging Relationships 2017 2016 2015 Interest rate swaps $ (726) $ 831 $ (1,705) Amount of Loss Reclassified from AOCI into Operations (Effective Portion) Year Ended December 31, Location of Loss Reclassified from AOCI into Operations 2017 2016 2015 Interest expense $ (905) $ (1,364) $ (1,745) |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2017 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 14 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following tables summarize changes in Accumulated Other Comprehensive Income (Loss) by component, all of which are presented net of tax : Balance as of January 1, 2016 $ (7,889) Other comprehensive income (loss) before reclassifications (261) Loss reclassified from accumulated other comprehensive loss to net income 1,364 Net current-period other comprehensive income (loss) 1,103 Balance as of December 31, 2016 (6,786) Other comprehensive income (loss) before reclassifications (1,084) Loss reclassified from accumulated other comprehensive loss to net income 905 Net current-period other comprehensive income (loss) (179) Balance as of December 31, 2017 $ (6,965) The following table summarizes the amounts reclassified out of AOCI: Amounts reclassified from Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) Components Affected line items in the For the Year Ended (In thousands) Statements of Operations December 31, 2017 December 31, 2016 Losses on cash flow hedges Interest expense $ 1,443 $ 2,175 Provision for income taxes (538) (811) Total reclassifications for the period Net of tax $ 905 $ 1,364 |
STOCK-BASED PLANS
STOCK-BASED PLANS | 12 Months Ended |
Dec. 31, 2017 | |
STOCK-BASED PLANS | |
STOCK-BASED PLANS | NOTE 15 STOCK BASED PLANS On November 9, 2010 (the “Effective Date”), HHC adopted The Howard Hughes Corporation Amended and Restated 2010 Incentive Plan (the “Incentive Plan”). Pursuant to the Incentive Plan, 3,698,050 shares of HHC common stock were reserved for issuance. New shares are issued on exercise of options. The Incentive Plan provides for grants of options, stock appreciation rights, restricted stock, other stock‑based awards and market‑based compensation (collectively, “the Awards”). Directors, employees and consultants of HHC and its subsidiaries and affiliates are eligible for awards. The Incentive Plan is administered by the Compensation Committee of the Board of Directors (“Committee”). Option grant amounts are awarded by the Committee. Compensation costs for share‑based payment arrangements totaled $8.4 million, $9.4 million and $9.8 million, of which $1.1 million, $2.6 million and $2.5 million were capitalized for 2017, 2016, and 2015, respectively. As of December 31, 2017, there were a maximum of 2,032,473 shares available for future grant under our various stock plans. Stock Options The following tables summarize stock option activity: Weighted Average Aggregate Weighted Average Remaining Intrinsic Shares Exercise Price Contractual Term Value (In years) Stock options outstanding at January 1, 2015 1,046,490 $ 72.61 Granted 117,000 134.24 Exercised — — Forfeited (77,450) 103.84 Expired — — Stock options outstanding at December 31, 2015 1,086,040 $ 77.11 Granted 162,100 $ 109.42 Exercised (3,000) 60.33 Forfeited (68,500) 122.93 Expired — — Stock options outstanding at December 31, 2016 1,176,640 $ 78.87 Granted 58,000 $ 119.85 Exercised (395,482) 58.81 Forfeited (54,976) 105.17 Expired (1,000) 57.77 Stock options outstanding at December 31, 2017 783,182 $ 90.22 5.7 33,454,510 Stock options exercisable at December 31, 2017 306,182 $ 59.96 3.6 21,833,176 Stock options vested and expected to vest at December 31, 2017 772,990 $ 59.96 5.7 33,302,071 Information related to stock options outstanding as of December 31, 2017 is summarized below: Weighted Average Remaining Number Weighted Average Contractual Term Number Range of Exercise Prices Outstanding Exercise Price (In years) Exercisable $ 46.49 $ 55.82 23,290 $ 3.7 23,290 $ 57.77 $ 60.33 242,418 3.3 242,418 $ 61.64 $ 69.75 109,550 4.4 29,550 $ 81.80 $ 110.50 94,424 6.1 9,024 $ 112.64 $ 151.72 313,500 8.0 1,900 783,182 $ 5.7 306,182 The fair value on the grant date and the significant assumptions used in the Black‑Scholes option‑pricing model are as follows: As of December 31, 2017 2016 2015 Grant date fair value $ 34.51 $ 36.55 $ 44.45 Expected life of options (in years) 8.4 7.4 7.5 Risk-free interest rate 2.2 % 1.8 % 2.0 % Expected volatility 22.8 % 33.1 % 26.1 % Expected annual dividend per share — — — The computation of the expected volatility assumption used in the Black‑Scholes calculations is based on the median asset volatility of comparable companies as of each of the grant dates. Generally, options granted vest over requisite service periods or on a graduated scale based on total shareholder returns, expire ten years after the grant date and generally do not become exercisable until their restrictions on exercise lapses after the five –year anniversary of the grant date. For options that vest based on shareholder returns, the grant date fair values are calculated using a Monte-Carlo approach which simulates our stock price on the corresponding vesting dates before applying the Black-Scholes model. The balance of unamortized stock option expense as of December 31, 2017 is $7.9 million, which is expected to be recognized over a weighted‑average period of 3.0 years. Net of amounts capitalized relating to our developments, $1.6 million, $2.9 million and $2.6 million for the years ended December 31, 2017, 2016 and 2015, respectively, of expense associated with stock options are included in General and administrative expense in the accompanying Consolidated Statements of Operations. Restricted Stock Restricted stock awards issued under the Incentive Plan provide that shares awarded may not be sold or otherwise transferred until restrictions have lapsed as established by the Committee. In addition to the granting of restricted stock to certain members of management, we award restricted stock to our non‑employee directors as part of their annual retainer. The management awards vest over five years, and the restriction on the non‑employee director shares lapse on the date of our annual meeting of shareholders, or June 1 st of the award year, whichever is earlier. Generally, upon termination of employment or directorship, restricted stock units and restricted shares which have not vested are forfeited. The following table summarizes restricted stock activity: Weighted Average Grant Date Shares Fair Value Restricted stock outstanding at January 1, 2015 $ Granted 81,581 121.81 Vested (7,546) 147.56 Forfeited (4,169) 101.33 Restricted stock outstanding at December 31, 2015 242,556 $ 100.15 Granted 136,198 $ 67.80 Vested (37,670) 83.47 Forfeited (51,972) 90.14 Restricted stock outstanding at December 31, 2016 289,112 $ 88.88 Granted 177,385 $ 85.81 Vested (68,819) 88.58 Forfeited (43,482) 76.10 Restricted stock outstanding at December 31, 2017 354,196 $ 88.97 The grant date fair value of the restricted stock is based on the closing sales price of our common stock on the grant date. For restricted stock awards that vest based on shareholder returns, the grant date fair values are calculated using a Monte-Carlo approach which simulates our stock price on the corresponding vesting dates before applying the Black-Scholes model. Net of amounts capitalized relating to our developments, we recognized compensation expense of $5.7 million, $4.5 million and $4.7 million for the years ended December 31, 2017, 2016 and 2015, respectively, included in General and Administrative expense related to restricted stock awards in the accompanying Consolidated Statements of Operations. The fair value of restricted stock that vested during 2017 was $8.9 million. The balance of unamortized restricted stock expense as of December 31, 2017 was $20.3 million, which is expected to be recognized over a weighted‑average period of 4.2 years. |
RENTALS UNDER OPERATING LEASES
RENTALS UNDER OPERATING LEASES | 12 Months Ended |
Dec. 31, 2017 | |
RENTALS UNDER OPERATING LEASES | |
RENTALS UNDER OPERATING LEASES | NOTE 16 RENTALS UNDER OPERATING LEASES We receive rental income from the leasing of retail, office, multi-family and other space under operating leases. Such operating leases are with a variety of tenants. The minimum future rentals based on operating leases of our consolidated properties held as of December 31, 2017 are as follows: Total Minimum Year Rent (In thousands) 2018 $ 160,878 2019 173,404 2020 163,048 2021 166,703 2022 165,703 Subsequent 1,027,115 Total $ 1,856,851 Minimum future rentals exclude amounts which are payable by certain tenants based upon a percentage of their gross sales or as reimbursement of operating expenses and amortization of above-market and below‑market tenant leases. Percentage rent in lieu of fixed minimum rent recognized from tenants for the years ended December 31, 2017, 2016 and 2015 was $1.5 million, $2.4 million and $3.5 million, respectively. Overage rent of approximately $2.8 million, $3.6 million, and $3.6 million for 2017, 2016 and 2015, respectively, are included in Other rental and property revenues in our Consolidated Statements of Operations. |
SEGMENTS
SEGMENTS | 12 Months Ended |
Dec. 31, 2017 | |
SEGMENTS | |
SEGMENTS | NOTE 17 SEGMENTS We have three business segments which offer different products and services. Our three segments are managed separately because each requires different operating strategies or management expertise and are reflective of management’s operating philosophies and methods. In addition, our segments or assets within such segments could change in the future as development of certain properties commences or other operational or management changes occur. We do not distinguish or group our combined operations on a geographic basis. Furthermore, all operations are within the United States. Our reportable segments are as follows: · Master Planned Communities – includes the development and sale of land, in large‑scale, long‑term community development projects in and around Las Vegas, Nevada; Houston, Texas; and Columbia, Maryland. · Operating Assets – includes retail, office, hospitality and multi-family properties along with other real estate investments. These assets are currently generating revenues, and are comprised of commercial real estate properties recently developed or acquired by us, and properties where we believe there is an opportunity to redevelop, reposition, or sell to improve segment performance or to recycle capital. · Strategic Developments – includes our residential condominium and commercial property projects currently under development and all other properties held for development which have no substantial operations. Effective January 1, 2017, we moved the Seaport District NYC assets under construction and related activities to the Strategic Developments segment from the Operating Assets segment. Seaport District NYC operating properties and related operating results remain presented within the Operating Assets segment. The respective segment earnings and total segment assets presented in our financial statements and elsewhere in this Annual Report have been adjusted in all periods reported to reflect this change. Segment operating results for the years ended December 31, 2017, 2016 and 2015 are as follows: Year Ended December 31, (In thousands) 2017 2016 2015 Master Planned Communities Land sales $ 248,595 $ 215,318 $ 187,399 Builder price participation 22,835 21,386 26,846 Minimum rents (8) 384 797 Other land revenues 28,124 16,192 14,778 Other rental and property revenues (3) 24 45 Total revenues 299,543 253,304 229,865 Cost of sales – land 121,116 95,727 88,065 Land sales operations 38,777 42,371 44,907 Provision for doubtful accounts 2 — — Depreciation and amortization 323 311 640 Other income, net (3,500) — — Interest income (4) (59) (60) Interest expense (*) (24,288) (21,026) (18,053) Equity in (earnings) loss in Real Estate and Other Affiliates (23,234) (43,501) — Total expenses 109,192 73,823 115,499 MPC segment EBT 190,351 179,481 114,366 Operating Assets Minimum rents 182,468 172,437 149,064 Tenant recoveries 45,366 44,306 39,415 Hospitality revenues 76,020 62,252 45,374 Other rental and property revenues 23,701 16,170 25,453 Total revenues 327,555 295,165 259,306 Other property operating costs 71,748 60,506 68,078 Rental property real estate taxes 26,523 24,439 21,856 Rental property maintenance costs 12,872 12,033 10,236 Hospitality operating costs 56,362 49,359 34,839 Provision for doubtful accounts 2,710 5,601 3,998 Demolition costs 1,605 194 2,412 Provision for impairment — 35,734 — Development-related marketing costs 3,346 947 7,934 Depreciation and amortization 122,421 86,313 89,075 Other income, net 315 (4,601) (524) Interest income (22) (19) (37) Interest expense (*) 61,606 50,446 32,968 Equity in (earnings) loss in Real Estate and Other Affiliates (3,267) (2,802) (1,883) Total expenses 356,219 318,150 268,952 Operating Assets segment EBT (28,664) (22,985) (9,646) Strategic Developments Minimum rents 565 447 899 Tenant recoveries 448 24 127 Condominium rights and unit sales 464,251 485,634 305,284 Other land revenues 42 40 25 Other rental and property revenues 7,716 391 1,582 Total revenues 473,022 486,536 307,917 Condominium rights and unit cost of sales 338,361 319,325 191,606 Other property operating costs 19,981 5,472 4,673 Rental property real estate taxes 2,662 2,408 2,282 Rental property maintenance costs 560 359 476 Provision for (recovery of) doubtful accounts (2) 63 32 Demolition costs 318 2,018 885 Development-related marketing costs 17,158 21,237 17,532 Depreciation and amortization 1,210 2,744 3,240 Other income, net (108) (611) 104 Interest income (187) (500) (202) Interest expense (*) (25,280) (16,937) (8,453) Equity in (earnings) loss in Real Estate and Other Affiliates 550 (10,515) (1,838) Gains on sales of properties (51,242) (140,549) — Total expenses 303,981 184,514 210,337 Strategic Developments segment EBT 169,041 302,022 97,580 Total consolidated segment EBT $ 330,728 $ 458,518 $ 202,300 (*) Negative interest expense amounts are due to interest capitalized in our MPC and Strategic Developments segments related to Operating Assets segment debt and the Senior Notes. The following reconciles EBT to GAAP income (loss) before taxes: Reconciliation of EBT to income before taxes Year Ended December 31, (In thousands) 2017 2016 2015 MPC segment EBT $ 190,351 $ 179,481 $ 114,366 Operating Assets segment EBT (28,664) (22,985) (9,646) Strategic Developments segment EBT 169,041 302,022 97,580 Total consolidated segment EBT 330,728 458,518 202,300 Corporate and other items: General and administrative (89,882) (86,588) (81,345) Corporate interest expense, net (48,700) (52,460) (52,995) Warrant liability (loss) gain (43,443) (24,410) 58,320 Gain on acquisition of joint venture partner's interest 23,332 27,088 — Gain (loss) on disposal of operating assets 3,868 (1,117) 29,073 Corporate Gains on sales of properties 125 — — Equity in earnings in Real Estate and Other Affiliates (453) — — Loss on redemption of senior notes due 2021 (46,410) — — Corporate other (expense) income, net (45) 6,241 1,409 Corporate depreciation and amortization (8,298) (6,496) (6,042) Total Corporate and other items (209,906) (137,742) (51,580) Income before taxes $ 120,822 $ 320,776 $ 150,720 The following reconciles segment revenues to GAAP consolidated revenues: Reconciliation of Segment Basis Revenues to Revenues Year Ended December 31, (In thousands) 2017 2016 2015 Master Planned Communities $ 299,543 $ 253,304 $ 229,865 Operating Assets 327,555 295,165 259,306 Strategic Developments 473,022 486,536 307,917 Total revenues $ 1,100,120 $ 1,035,005 $ 797,088 The assets by segment and the reconciliation of total segment assets to the total assets in the Consolidated Balance Sheets are summarized as follows: December 31, (In thousands) 2017 2016 Master Planned Communities $ 1,999,090 $ 1,982,639 Operating Assets 2,489,177 2,344,949 Strategic Developments 1,511,612 1,451,460 Total segment assets 5,999,879 5,779,048 Corporate and other 729,185 588,334 Total assets $ 6,729,064 $ 6,367,382 The increase in the Operating Assets segment asset balance as of December 31, 2017 compared to 2016 is primarily due to placing One and Two Merriweather, HHC 242 and HHC 2978 Self-Storage in service as well as the acquisitions of our joint venture partners’ 50% interests in the Las Vegas 51s and Constellation, respectively, partially offset by the transfers of Landmark Mall, a portion of Ward Village Retail and our investment in 33 Peck Slip to Strategic Developments in 2017. The increase in the Strategic Developments segment asset balance as of December 31, 2017 compared to December 31, 2016 relates to transfers of Landmark Mall and 33 Peck Slip into the segment along with increased development expenditures primarily in the Seaport District and at our Ward condominium projects under construction. Ongoing predevelopment activities at various other projects also contributed to the increase, partially offset by the partial sale of The Elk Grove Collection and placing various assets in service. The increase in the Corporate and other asset balance as of December 31, 2017 compared to December 31, 2016 is primarily due to net proceeds received from the issuance of the 2025 Notes in March 2017. |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | NOTE 18 QUARTERLY FINANCIAL INFORMATION (UNAUDITED) 2017 First Second Third Fourth (In thousands, except share amounts) Quarter Quarter Quarter Quarter Total revenues $ 231,762 $ 308,639 $ 258,736 $ 300,983 Operating income 77,554 54,133 24,372 62,443 Net income 5,659 3,120 10,516 147,328 Net income attributable to common stockholders 5,659 3,120 10,504 149,121 Earnings per share: Basic 0.14 0.08 0.25 3.48 Diluted (a) 0.13 0.07 0.24 3.46 Weighted average shares outstanding: Basic 39,799 40,373 42,845 42,860 Diluted 42,757 43,051 43,267 43,120 2016 First Second Third Fourth (In thousands, except share amounts) Quarter Quarter Quarter Quarter Total revenues $ 240,680 $ 273,514 $ 242,265 $ 278,546 Operating income 192,970 73,636 784 59,372 Net income 143,765 6,970 7,996 43,595 Net income attributable to common stockholders 143,765 6,970 7,973 43,595 Earnings per share: Basic 3.64 0.18 0.20 1.10 Diluted (a) 2.69 0.16 0.19 1.02 Weighted average shares outstanding: Basic 39,473 39,492 39,502 39,502 Diluted 42,400 42,664 42,760 42,753 a) Diluted earnings per share includes the impact of warrants, in the money options and restricted stock. Net income used in the calculation of EPS was also adjusted for the warrant gain during the period, where applicable. |
SCHEDULE III - REAL ESTATE AND
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | 12 Months Ended |
Dec. 31, 2017 | |
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2017 Initial Cost (b) Costs Capitalized Subsequent to Acquisition (c) Gross Amounts at Which Carried at Close of Period (d) Buildings Buildings Buildings Date and and and Accumulated Date of Acquired / Name of Center Location Encumbrances (a) Land Improvements Land (e) Improvements (e)(f) Land Improvements (f) Total Depreciation (g) Construction Completed Bridgeland Bridgeland Cypress, TX $ 65,000 $ 260,223 $ — $ 198,685 $ 1,960 $ 458,908 $ 1,960 $ 460,868 $ (801) 2004 Lakeland Village Center at Bridgeland Cypress, TX 11,470 2,404 11,135 — 3,038 2,404 14,173 16,577 (335) 2016 Columbia American City Building Columbia, MD — — 13,534 — — — 13,534 13,534 — 2016 Aristocrat Columbia, MD — — 15,313 — — — 15,313 15,313 — 2017 10 - 70 Columbia Corporate Center Columbia, MD 100,000 24,685 94,824 — 18,680 24,685 113,504 138,189 (12,067) 2012/2014 Columbia Office Properties Columbia, MD — 1,175 14,913 — 268 1,175 15,181 16,356 (4,527) 1969/1972 Columbia Regional Building Columbia, MD 25,000 — 28,865 — 2,223 — 31,088 31,088 (3,213) 2014 Lakefront Columbia, MD — — 1,964 — — — 1,964 1,964 — 2004 Maryland Communities Columbia, MD — 457,552 — (440,924) 197 16,628 197 16,825 (150) 2004 Merriweather District Predevelopment Columbia, MD — — — — 76,808 — 76,808 76,808 — 2015 One Mall North Columbia, MD 14,463 7,822 10,818 — — 7,822 10,818 18,640 (335) 2016 One Merriweather Columbia, MD 42,332 1,433 58,936 — 8,065 1,433 67,001 68,434 (1,396) 2017 Ridgely Building Columbia, MD — 400 58,937 — (58,937) 400 — 400 — 2017 Two Merriweather Columbia, MD 19,429 1,019 4,931 — 25,691 1,019 30,622 31,641 (127) 2017 Seaport District Seaport Predevelopment New York, NY — — 7,641 — 581 — 8,222 8,222 — 2013 85 South Street New York, NY — 15,913 8,137 — 949 15,913 9,086 24,999 (1,985) 2014 Seaport District NYC - Tin Building New York, NY — — 8,290 — 5,022 — 13,312 13,312 — 2015 Seaport District NYC - Pier 17 New York, NY — — — — 344,168 — 344,168 344,168 — 2017 Seaport District NYC Historic District / Uplands New York, NY — — 7,884 — 105,078 — 112,962 112,962 (7,252) 2013 2016 Summerlin Constellation Las Vegas, NV 24,200 3,069 39,759 — — 3,069 39,759 42,828 — 2016 Downtown Summerlin (h) Las Vegas, NV 276,900 30,855 364,100 — 25,484 30,855 389,584 420,439 (42,046) 2014 Downtown Summerlin Apartments Las Vegas, NV — — — — 12,661 — 12,661 12,661 — 2017 Hockey Ground Lease Las Vegas, NV — — — 4,710 2,156 4,710 2,156 6,866 (33) 2017 Las Vegas 51s Las Vegas, NV — — 179 — — — 179 179 (40) 2017 Las Vegas Ballpark Las Vegas, NV — — — — 7,651 — 7,651 7,651 — 2017 Summerlin Las Vegas, NV 24,764 990,179 — (137,946) 1,186 852,233 1,186 853,419 (660) 2004 Two Summerlin Las Vegas, NV — — 18,676 — — — 18,676 18,676 — 2017 The Woodlands Creekside Park Apartments The Woodlands, TX — — — — 20,030 — 20,030 20,030 — 2017 Creekside Village Green The Woodlands, TX — — — 1,323 16,263 1,323 16,263 17,586 (1,590) 2015 Embassy Suites at Hughes Landing The Woodlands, TX 31,245 — 6,752 1,818 36,117 1,818 42,869 44,687 (3,029) 2015 100 Fellowship Drive The Woodlands, TX 1 — — — 21,691 — 21,691 21,691 — 2017 HHC 242 Self-Storage The Woodlands, TX 6,243 878 6,802 — 1,090 878 7,892 8,770 (208) 2017 HHC 2978 Self-Storage The Woodlands, TX 5,634 124 5,498 — 2,015 124 7,513 7,637 (160) 2017 One Hughes Landing The Woodlands, TX 52,000 1,678 34,761 — — 1,678 34,761 36,439 (6,287) 2013 Two Hughes Landing The Woodlands, TX 48,000 1,269 34,950 — — 1,269 34,950 36,219 (5,693) 2014 Three Hughes Landing The Woodlands, TX 45,058 2,626 46,372 — 21,638 2,626 68,010 70,636 (1,814) 2016 1725 Hughes Landing Boulevard The Woodlands, TX 58,815 1,351 36,764 — 30,252 1,351 67,016 68,367 (6,510) 2015 1735 Hughes Landing Boulevard The Woodlands, TX 58,602 3,709 97,651 — — 3,709 97,651 101,360 (9,292) 2015 Hughes Landing Retail The Woodlands, TX 35,000 5,184 — — 32,987 5,184 32,987 38,171 (3,145) 2015 1701 Lake Robbins The Woodlands, TX — 1,663 3,725 — 10 1,663 3,735 5,398 (320) 2014 Lake Woodlands Crossing Retail The Woodlands, TX — — 6,525 — — — 6,525 6,525 — 2017 2201 Lake Woodlands Drive The Woodlands, TX — 3,755 — — 47 3,755 47 3,802 (5) 1994 One Lakes Edge The Woodlands, TX 69,440 1,057 81,768 — — 1,057 81,768 82,825 (5,784) 2015 Millennium Six Pines Apartments The Woodlands, TX 42,500 4,000 54,624 7,225 — 11,225 54,624 65,849 (2,819) 2014 Millennium Waterway Apartments The Woodlands, TX 55,095 15,917 56,002 — 1,394 15,917 57,396 73,313 (12,898) 2010 9303 New Trails The Woodlands, TX 12,003 1,929 11,915 — 601 1,929 12,516 14,445 (2,182) 2008 3831 Technology Forest Drive The Woodlands, TX 21,954 514 14,194 — 1,703 514 15,897 16,411 (2,435) 2014 The Westin at the Woodlands The Woodlands, TX 57,946 22,473 — (20,520) 88,892 1,953 88,892 90,845 (5,229) 2016 The Woodlands The Woodlands, TX 150,000 269,411 9,814 (63,362) 6,793 206,049 16,607 222,656 (3,098) 2011 The Woodlands Parking Garages The Woodlands, TX — 5,857 — 1,529 11,837 7,386 11,837 19,223 (1,126) 2008/2009 The Woodlands Resort & Conference Center The Woodlands, TX 65,500 13,258 37,983 — 76,801 13,258 114,784 128,042 (15,795) 2014 20/25 Waterway Avenue The Woodlands, TX 13,646 2,346 8,871 — 775 2,346 9,646 11,992 (2,122) 20072009 Waterway Garage Retail The Woodlands, TX — 1,341 4,255 — 1,411 1,341 5,666 7,007 (1,169) 2011 3 Waterway Square The Woodlands, TX 50,327 748 — — 42,329 748 42,329 43,077 (9,387) 2013 4 Waterway Square The Woodlands, TX 35,151 1,430 51,553 — 4,288 1,430 55,841 57,271 (10,551) 2010 2000 Woodlands Parkway The Woodlands, TX — — — — 135 — 135 135 — 1997 1400 Woodloch Forest The Woodlands, TX — — — 1,570 14,341 1,570 14,341 15,911 (4,102) 1981 The Woodlands Hills The Woodlands Hills Conroe, TX — 99,284 — 9,176 — 108,460 — 108,460 — 2014 Ward Village Ae`o Honolulu, HI 33,603 9,795 85,046 (9,795) 51,818 — 136,864 136,864 — 2016 Anaha Honolulu, HI — 5,546 47,450 (5,546) (8,609) — 38,841 38,841 (2) 2014 2017 Ke Kilohana Honolulu, HI — 2,615 17,784 (2,615) 57,233 — 75,017 75,017 — 2016 Kewalo Harbor Honolulu, HI — — — 7,535 — 7,535 7,535 (1) 2017 Waiea Honolulu, HI — — 20,812 — 39,294 — 60,106 60,106 (3) 2014 2017 Ward Predevelopment Honolulu, HI — — 24,069 — 72,172 — 96,241 96,241 (59) 2013 2015 Ward Village Honolulu, HI 238,718 164,007 89,321 (77,860) 186,930 86,147 276,251 362,398 (61,380) 2002 Other AllenTowne Dallas, TX — 25,575 — (25,575) 25,886 — 25,886 25,886 — 2006 Bridges at Mint Hill Charlotte, NC — — — — 21,874 — 21,874 21,874 — 2007 Circle T Ranch and Power Center Dallas/Fort Worth, TX — — — — 229 — 229 229 — 2005 Cottonwood Mall Salt Lake City, UT — 7,613 42,987 (7,613) (21,440) — 21,547 21,547 — 2002 Landmark Mall Alexandria, VA — 28,396 67,235 (28,396) (12,652) — 54,583 54,583 (10) 2004 Outlet Collection at Riverwalk New Orleans, LA 53,841 — 94,513 — 1,161 — 95,674 95,674 (16,175) 2014 The Elk Grove Collection Elk Grove, CA — — — — 10,396 — 10,396 10,396 (5) 2003 110 North Wacker Chicago, IL 18,926 — 29,035 12,249 17,983 12,249 47,018 59,267 (34,165) 1957 West Windsor Princeton, NJ — — — — 26,158 — 26,158 26,158 (100) 2004 Total excluding Corporate, Deferred financing costs and Unamortized bond issuance costs 1,862,806 2,502,078 1,897,867 (581,867) 1,492,337 1,920,211 3,390,204 5,310,415 (303,617) Corporate Various 1,014,983 885 1,027 (885) 43,967 — 44,994 44,994 (18,265) Unamortized bond issuance costs N/A (6,898) — — — — — — — — Deferred financing costs N/A (12,946) — — — — — — — — Total $ 2,857,945 $ $ 1,898,894 $ (582,752) $ 1,536,304 $ $ 3,435,198 $ 5,355,409 $ (321,882) (a) See description of Encumbrances in Note 8 – Mortgages, Notes and Loans Payable of the Consolidated Financial Statements. (b) Initial cost for projects undergoing development or redevelopment is cost at end of first complete calendar year subsequent to opening. (c) For retail and other properties, costs capitalized subsequent to acquisitions is net of cost of disposals or other property write‑downs. For MPCs, costs capitalized subsequent to acquisitions are net of the cost of land sales. (d) The aggregate cost of land, building and improvements for federal income tax purposes is approximately $4.6 billion. (e) Reductions in Land reflect transfers to Buildings and Improvements for projects which we are internally developing. (f) Includes all amounts related to Developments. (g) Depreciation is computed based upon the useful lives below. (h) Downtown Summerlin includes ONE Summerlin office property, which was placed in service in 2015. Asset Type Years Location of Asset Buildings and improvements 10 - 45 Buildings and Equipment Equipment and fixtures 5 - 10 Buildings and Equipment Computer hardware and software, and vehicles 3 - 5 Prepaid expenses and other assets, net Tenant improvements Lesser of lease term or useful life Prepaid expenses and other assets, net Leasing costs Related lease term Prepaid expenses and other assets, net Reconciliation of Real Estate (In thousands) 2017 2016 2015 Balance at beginning of year $ 4,979,840 $ 4,774,632 $ 4,116,556 Change in land 93,833 122,446 95,095 Additions 790,183 830,896 834,346 Impairments — (35,734) — Dispositions and write-offs and land and condominium costs of sales (508,447) (712,400) (271,365) Balance at end of year $ 5,355,409 $ 4,979,840 $ 4,774,632 Reconciliation of Accumulated Depreciation (In thousands) 2017 2016 2015 Balance at beginning of year $ 245,814 $ 232,969 $ 157,182 Depreciation Expense 116,401 81,878 82,275 Dispositions and write-offs (40,333) (69,033) (6,488) Balance at end of year $ 321,882 $ 245,814 $ 232,969 |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), with all intercompany balances eliminated. The presentation includes the accounts of the Company, and those entities in which we have a controlling financial interest. The Company also consolidates certain variable interest entities (“VIEs”) in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 810 Consolidation (“ASC 810”). The outside equity interests in certain entities controlled by the Company are reflected in the consolidated financial statements as a noncontrolling interest. Certain amounts in 2016 have been reclassified to conform to the 2017 presentation. Specifically, we have reclassified straight-line rent receivables of $39.1 million and $31.5 million from Accounts receivable to Prepaid expenses and other assets, net as of December 31, 2017 and 2016, respectively. |
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. The estimates and assumptions include, but are not limited to, revenue recognition accounted for under the percentage of completion method, capitalization of development costs, provision for income taxes, recoverable amounts of receivables and deferred tax assets, initial valuations of tangible and intangible assets acquired and the related useful lives of assets upon which depreciation and amortization is based. Estimates and assumptions have also been made with respect to future revenues and costs, the fair value of warrants, debt and options granted. Actual results could differ from these and other estimates. |
Segments | Segments Segment information is prepared on the same basis that management reviews information for operational decision-making purposes. Management evaluates the performance of each of our real estate assets or investments individually and aggregates such properties into segments based on their economic characteristics and types of revenue streams. We operate in three business segments: (i) MPCs; (ii) Operating Assets; and (iii) Strategic Developments. |
Investment in Real Estate | Investment in Real Estate Master Planned Community Assets, Land, Buildings and Equipment Real estate assets are stated at cost less any provisions for impairments. Expenditures for significant improvements to our assets are capitalized. Tenant improvements relating to our operating assets are capitalized and depreciated over the shorter of their economic lives or the lease term. Maintenance and repair costs are charged to expense when incurred. We periodically review the estimated useful lives of properties. Depreciation or amortization expense is computed using the straight‑line method based upon the following estimated useful lives: Asset Type Years Location of Asset Buildings and improvements 10 - 45 Buildings and Equipment Equipment and fixtures 5 - 10 Buildings and Equipment Computer hardware and software, and vehicles 3 - 5 Prepaid expenses and other assets, net Tenant improvements Lesser of lease term or useful life Prepaid expenses and other assets, net Leasing costs Related lease term Prepaid expenses and other assets, net F rom time to time, we may reassess the development strategies for certain buildings and improvements which results in changes to our estimate of their remaining useful lives. As a result, we recognized an additional $25. 5 million, or $0.59 per diluted share, $1.0 million, or $0.02 per diluted share, and $17.1 million, or $0.40 per diluted share, in depreciation expense during the years ended December 31, 2017, 2016 and 2015, respectively, due to the change in useful lives of these buildings and improvements. Developments Development costs, which primarily include direct costs related to placing the asset in service associated with specific development properties, are capitalized as part of the property being developed. Construction and improvement costs incurred in connection with the development of new properties or the redevelopment of existing properties are capitalized before they are placed into service. Costs include planning, engineering, design, direct material, labor and subcontract costs. Real estate taxes, utilities, legal and professional fees, interest, insurance costs and certain employee costs incurred during construction periods are also capitalized. Capitalization commences when the development activities begin and ceases when a project is completed, put on hold or we decide to not move forward with a project. Capitalized costs related to a project where we have determined not to move forward are expensed. Capitalized interest costs are based on qualified expenditures and interest rates in place during the construction period. Demolition costs associated with these redevelopments are expensed as incurred. Once the assets are placed into service, they are depreciated in accordance with our policy. In the event that management no longer has the ability or intent to complete a development, the costs previously capitalized are evaluated for impairment. Our Developments consist of the following categories: December 31, (In thousands) 2017 2016 Land and improvements $ 202,875 $ 188,544 Development costs 675,691 567,650 Condominium projects 318,016 205,786 Total Developments $ 1,196,582 $ 961,980 |
Investment in Real Estate and Other Affiliates | December 31, (In thousands) 2017 2016 Land and improvements $ 202,875 $ 188,544 Development costs 675,691 567,650 Condominium projects 318,016 205,786 Total Developments $ 1,196,582 $ 961,980 Investment in Real Estate and Other Affiliates In the ordinary course of business, we enter into partnerships or joint ventures primarily for the development and operation of real estate assets which are referred to as “Real Estate and Other Affiliates.” We assess our joint ventures at inception to determine if any meet the qualifications of a variable interest entity (“VIE”). We consider a partnership or joint venture a VIE if: (a) the total equity investment is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other rights, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity); or (c) the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity and/or their rights to receive the expected residual returns of the entity, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Upon the occurrence of certain events outlined in ASC 810, we reassess our initial determination of whether the partnership or joint venture is a VIE. We also perform a qualitative assessment of each VIE to determine if we are the primary beneficiary. Under ASC 810, a company concludes that it is the primary beneficiary and consolidates the VIE if the company has both (a) the power to direct the economically significant activities of the entity and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The company considers the contractual agreements that define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties in determining if the company is the primary beneficiary. As required by ASC 810, management’s assessment of whether the company is the primary beneficiary of a VIE is continuously performed. We account for VIEs for which we are not considered to be the primary beneficiary, but have significant influence, using the equity method and investments in VIEs where we do not have significant influence on the joint venture’s operating and financial policies using the cost method. We account for investments in joint ventures where we own a non‑controlling interest using the equity method, and investments in joint ventures where we have virtually no influence on the joint venture’s operating and financial policies using the cost method. For cost method investments, we recognize earnings to the extent of distributions received from such investments. Under the equity method, the cost of our investment is adjusted for our share of the equity in earnings or losses of such Real Estate Affiliates from the date of investment and reduced by distributions received. Generally, the operating agreements with respect to our Real Estate and Other Affiliates provide that assets, liabilities and funding obligations are shared in accordance with our ownership percentages. We generally also share in the profit and losses, cash flows and other matters relating to our Real Estate Affiliates in accordance with our respective ownership percentages. For certain equity method investments, when the preferences on profit sharing on liquidation rights and priorities differ from the ownership percentages, we consider ASC 970 and apply the Hypothetical Liquidation Book Value (“HLBV”) method. Under this method, we recognize income or loss based on the change in our underlying share of the venture’s net assets on a hypothetical liquidation basis as of the reporting date. |
Acquisition of Properties | Acquisitions of Properties We account for the acquisition of real estate properties in accordance with ASC 805 Business Combinations (“ASC 805”). This methodology requires that assets acquired and liabilities assumed be recorded at their fair values on the date of acquisition. Costs directly related to asset acquisitions are considered additions to the purchase price and increase the cost basis recorded for the Investment in Real Estate. Acquisition costs related to the acquisition of a business are expensed as incurred. The fair value of tangible assets of an acquired property (which includes land, buildings, and improvements) is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land, buildings and improvements based on management’s determination of the fair value of these assets. The “as-if-vacant” values are derived from several sources which incorporate significant unobservable inputs that are classified as Level 3 inputs in the fair value hierarchy and primarily include a discounted cash flow analysis using discount and capitalization rates based on recent comparable market transactions, where available. The fair value of acquired intangible assets consisting of in-place, above-market and below-market leases is recorded based on a variety of considerations, some of which incorporate significant unobservable inputs that are classified as Level 3 inputs in the fair value hierarchy. In-place lease considerations include, but are not necessarily limited to: (1) the value associated with avoiding the cost of originating the acquired in-place leases (i.e., the market cost to execute a lease, including leasing commissions and tenant improvements); (2) the value associated with lost revenue related to tenant reimbursable operating costs incurred during the assumed lease-up period (i.e., real estate taxes, insurance and certain other operating expenses); and (3) the value associated with lost rental revenue from existing leases during the assumed lease-up period. Above-market and below-market leases are valued at the present value, using a discount rate that reflects the risks associated with the leases acquired, of the difference between (1) the contractual amounts to be paid pursuant to the in-place lease; and (2) management’s estimate of current market lease rates, measured over the remaining non-cancelable lease term, including any below-market renewal option periods. |
Impairment | Impairment We review our long-lived assets (including those held by our Real Estate and Other Affiliates) for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized if the carrying amount of an asset is not recoverable and exceeds its fair value. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future economic conditions, such as occupancy, rental rates, capital requirements and sales values that could differ materially from actual results in future periods. If impairment indicators exist and it is expected that undiscounted cash flows generated by the asset are less than its carrying amount, less costs to sell in the case of assets classified as held for sale, an impairment provision is recorded to write-down the carrying amount of the asset to its fair value. Impairment indicators for our assets or projects within our MPC segment are assessed separately and include, but are not limited to, significant decreases in sales pace or average selling prices, significant increases in expected land development and construction costs or cancellation rates, and projected losses on expected future sales. MPC assets have extended life cycles that may last 20 to 40 years, or longer, and have few long‑term contractual cash flows. Further, MPC assets generally have minimal to no residual values because of their liquidating characteristics. MPC development periods often occur through several economic cycles. Subjective factors such as the expected timing of property development and sales, optimal development density and sales strategy impact the timing and amount of expected future cash flows and fair value. Impairment indicators for our Operating Assets segment are assessed separately for each property and include, but are not limited to, significant decreases in net operating income, significant decreases in occupancy, ongoing low occupancy and significant net operating losses. Impairment indicators for development costs in our Strategic Developments segment are assessed by project and include, but are not limited to, significant changes in projected completion dates, revenues or cash flows, development costs, market factors, significant decreases in comparable property sale prices and feasibility. The cash flow estimates used both for determining recoverability and estimating fair value are inherently judgmental and reflect current and projected trends in rental, occupancy, pricing, development costs, sales pace and capitalization rates, and estimated holding periods for the applicable assets. Although the estimated fair value of certain assets may be exceeded by the carrying amount, a real estate asset is only considered to be impaired when its carrying amount is not expected to be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is necessary, the excess of the carrying amount of the asset 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. The adjusted carrying amount, which represents the new cost basis of the asset, is depreciated over the remaining useful life of the asset or, for MPCs, is expensed as a cost of sales when land is sold. Assets that have been impaired will in the future have lower depreciation and cost of sale expenses. The impairment will have no impact on cash flow. With respect to our Investment in Real Estate and Other Affiliates, a series of operating losses of an underlying asset or other factors may indicate that a decrease in value has occurred which is other‑than‑temporary. The investment in each Real Estate and Other Affiliate is evaluated periodically and as deemed necessary for recoverability and valuation declines that are other‑than‑temporary. If the decrease in value of an Investment in a Real Estate and Other Affiliate is deemed to be other‑than‑temporary, our investment is reduced to its estimated fair value. In addition to the property‑specific impairment analysis that we perform on the underlying assets of the investment, we also consider the ownership, distribution preferences, limitations, and rights to sell and repurchase our ownership interests. For the years ended December 31, 2017, 2016 and 2015, we evaluated whether impairment indicators existed at any of our assets. In most instances, we concluded no impairment indicators were present. For the year ended December 31, 2016, we recognized an impairment charge for Park West during the third quarter of 2016 due to a change in strategy and reduction of the anticipated holding period. For the years ended December 31, 2017 and 2015, we concluded that there were no impairments. Please refer to Note 6 – Impairment in our Consolidated Financial Statements for additional information. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and Cash Equivalents consist of highly-liquid investments with maturities at date of purchase of three months or less and include registered money market mutual funds which are invested in United States Treasury bills that are valued at the net asset value of the underlying shares in the funds as of the close of business at the end of each period as well as deposits with major banks throughout the United States. Such deposits are in excess of FDIC limits and are placed with high quality institutions in order to minimize concentration of counterparty credit risk. |
Receivable, net | Accounts Receivable, net Accounts receivable includes tenant rents, tenant recoveries and other receivables. We record allowances against our receivables that we consider uncollectible. These allowances are reviewed periodically and are adjusted based on management’s estimate of receivables that will not be realized in subsequent periods. Management exercises judgment in establishing these allowances and considers payment history, current credit status and if the tenant is currently occupying the space in developing these estimates. The following table summarizes the changes in allowance for doubtful accounts against our accounts receivables: (In thousands) 2017 2016 2015 Balance as of January 1 $ 7,799 $ 4,406 $ 7,619 Provision for doubtful accounts 2,710 5,664 4,030 Write-offs (1,209) (2,271) (7,243) Balance as of December 31, $ 9,300 $ 7,799 $ 4,406 The decrease in the provision for the year ended December 31, 2017 compared to 2016 is primarily due to the reserve for a termination fee for a tenant in 2016 and a delinquent paying tenant in 2016 at another property . The increase in the provision for the year ended December 31, 2016 compared to 2015 is consistent with the growth of the Operating Assets portfolio and increase in the number of tenants. The significant decrease in write-offs in the allowance for doubtful accounts in the year ended December 31, 2016 as compared to 2015 relates primarily to the recovery of uncollectible receivables from a tenant at an operating property that vacated its space. Notes Receivable, net Notes receivable, net includes non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, they are recorded at amortized cost less any provision for impairment. We will evaluate our notes receivable for impairment when it is probable the payment of interest and principal will not be made in accordance with the contractual terms of the note agreement. In the fourth quarter of 2017, we made an investment in a $5.3 million note collateralized by a building in Columbia. The note is carried at cost. Municipal Utility District Receivables, net In Houston, Texas, certain development costs are reimbursable through the creation of Municipal Utility Districts (“MUDs”), also known as Water Control and Improvement Districts), which are separate political subdivisions authorized by Article 16, Section 59 of the Texas Constitution and governed by the Texas Commission on Environmental Quality (“TCEQ”). MUDs are formed to provide municipal water, waste water, drainage services, recreational facilities and roads to those areas where they are currently unavailable through the regular city services. Typically, the developer advances funds for the creation of the facilities, which must be designed, bid and constructed in accordance with the City of Houston’s and TCEQ requirements. The developer initiates the MUD process by filing the applications for the formation of the MUD, and once the applications have been approved, a Board of Directors is elected for the MUD and given the authority to issue ad valorem tax bonds and the authority to tax residents. The MUD Board authorizes and approves all MUD development contracts and pay requests. MUD bond sale proceeds are used to reimburse the developer for its construction costs, including interest. MUD taxes are used to pay the debt service on the bonds and the operating expenses of the MUD. The Company estimates the costs it believes will be eligible for reimbursement as MUD receivables. Our MUD receivables are pledged as security to creditors under the debt facilities relating to our Bridgeland and The Woodlands MPCs. MUD receivables are shown net of an allowance of $0.8 million and $0.9 million as of December 31, 2017 and 2016, respectively, in the accompanying Consolidated Balance Sheets. |
Prepaid Expenses and Other Assets, net | Prepaid Expenses and Other Assets, net The major components of Prepaid expenses and other assets, net include condominium receivables and condominium deposits (as discussed below in Revenue Recognition and Related Matters), Special Improvement District (“SID”) receivables and Straight-line rent receivables. SID receivables are amounts due from SID bonds related to our MPCs. Proceeds from SID bonds are held in escrow by a third-party and are used to reimburse us for a portion of the development costs incurred in our Summerlin MPC. SID receivables are $26.4 million and $61.6 million as of December 31, 2017 and 2016, respectively. |
Income Taxes | Income Taxes Deferred income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities using enacted tax rates currently in effect. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. An increase or decrease in the valuation allowance that results from a change in circumstances, and which causes a change in our judgment about the realizability of the related deferred tax asset, is included in the deferred tax provision. There are events or circumstances that could occur in the future that could limit the benefit of deferred tax assets. In addition, we recognize and report interest and penalties, if necessary, related to uncertain tax positions within our provision for income tax expense. In our MPCs, gains with respect to land sales, whether for commercial use or for single family residences, are reported for tax purposes either on the modified accrual method or on the percentage-of-completion method. Under the percentage-of-completion method, a gain is recognized for tax purposes as costs are incurred in satisfaction of contractual obligations. The method used for determining the percentage complete for income tax purposes is different than that used for financial statement purposes. |
Deferred Expenses, net | Deferred Expenses, net Deferred expenses consist principally of leasing costs. Deferred leasing costs are amortized to amortization expense using the straight‑line method over periods that approximate the related lease terms. Deferred expenses are shown net of accumulated amortization of $18.9 million and $14.1 million as of December 31, 2017 and 2016, respectively. Deferred financing fees are amortized to interest expense over the terms of the respective financing agreements using the effective interest method (or other methods which approximate the effective interest method). |
Revenue Recognition and Related Matters | Revenue Recognition and Related Matters Condominium Rights and Unit Sales Revenue recognition for contracted individual units in a condominium project are accounted for under the percentage of completion method when the following criteria are met: (a) construction is beyond a preliminary stage; (b) buyer is unable to require a refund of its deposit, except for non‑delivery of the unit; (c) sufficient units are sold to assure that it will not revert to a rental property; (d) sales prices are collectible; and (e) aggregate sales proceeds and costs can be reasonably estimated. Those units that do not meet the criteria use the full accrual method or deposit method which defers revenue recognition until the unit is closed. Revenue related to condominium sales will change when the new revenue recognition standard is adopted. See Recently Issued Accounting Pronouncements below. Revenue recognized on the percentage-of-completion method is based upon the ratio of project costs incurred to date compared to total estimated project cost. Total estimated project costs include direct costs such as the carrying value of our land, site planning, architectural, construction costs, financing costs and indirect cost allocations for certain infrastructure and amenity costs which benefit the project based upon the relative sales value of the units. Changes in estimated project costs impact the amount of revenue and profit recognized on a percentage of completion basis during the period in which they are determined. Revenue recognized in excess of amounts collected from buyers is classified as Condominium receivables and amounts collected from buyers in excess of revenue recognized to date are classified as Condominium deposits liability. Master Planned Community Land Sales Revenues from land sales are recognized using the full accrual method at closing, when title has passed to the buyer, adequate consideration for the land has been received and we have no continuing involvement with the property. Revenue that is not recognized under the full accrual method is deferred and recognized when the required obligations are met. When developed residential or commercial land is sold, the cost of sales includes actual costs incurred and estimates of future development costs benefiting the property sold through completion. In accordance with ASC 970, when developed land is sold, costs are allocated to each sold superpad or lot based upon the relative sales value of each superpad or lot. For purposes of allocating development costs, estimates of future revenues and development costs are re-evaluated throughout the year, with adjustments being allocated prospectively to the remaining parcels available for sale. For certain parcels of land, however, the specific identification method is used to determine the cost of sales, including acquired parcels that we do not intend to develop or for which development was complete at the date of acquisition. Minimum Rents and Tenant Recoveries Revenue associated with our operating assets includes minimum rent, percentage rent in lieu of fixed minimum rent, tenant recoveries and overage rent. Minimum rent revenues are recognized on a straight‑line basis over the terms of the related leases when collectability is reasonably assured and the tenant has taken possession of, or controls, the physical use of the leased asset. Percentage rent in lieu of fixed minimum rent is recognized as sales are reported from tenants. Minimum rent revenues also include amortization related to above and below‑market tenant leases on acquired properties. Recoveries from tenants are stipulated in the leases, are generally computed based upon a formula related to real estate taxes, insurance and other real estate operating expenses, and are generally recognized as revenues in the period the related costs are incurred. Overage rent is recognized on an accrual basis once tenant sales exceed contractual thresholds contained in the lease and is calculated by multiplying the tenant sales in excess of the minimum amount by a percentage defined in the lease. If the lease provides for tenant improvements, we determine whether the tenant improvements are owned by the tenant or by us. When we are the owner of the tenant improvements, rental revenue begins when the improvements are substantially complete. When the tenant is the owner of the tenant improvements, any tenant allowance funded by us is treated as a lease incentive and amortized as an adjustment to rental revenue over the lease term. Hospitality Revenues Revenue from our hospitality properties is primarily related to room rentals and food and beverage sales and is recognized as services are performed. Builder Price Participation Builder price participation revenue is based on an agreed-upon percentage of the sales price of homes closed in excess of contractual amounts established when the homebuilder buys lots from us. Revenue related to builder price participation rights is recognized as the underlying homes are sold by homebuilders and fluctuates based upon the number of homes closed that qualify for builder price participation payments. Other land revenues Other land revenues is primarily related to easement revenue, ground maintenance revenue and advertising revenue and is recognized as services are performed. Other rental and property revenues Other rental and property revenues is primarily related to baseball revenue, other tenant revenue and overage rent revenue and is recognized as services are performed. Marketing and advertising Our Strategic Development, Operating Assets and MPC segments incur various marketing and advertising costs as part of their development, branding, leasing or sales initiatives. These costs include special events, broadcasts, direct mail and online digital and social media programs, and they are expensed as incurred. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying values of cash and cash equivalents, marketable securities, escrows, receivables, accounts payable, accrued expenses and other assets and liabilities are reasonable estimates of their fair values because of the short maturities of these instruments. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Derivative instruments and hedging activities require management to make judgments on the nature of its derivatives and their effectiveness as hedges. These judgments determine if the changes in fair value of the derivative instruments are reported in the Consolidated Statements of Operations as a component of net income or as a component of comprehensive income and as a component of equity on the Consolidated Balance Sheets. While management believes its judgments are reasonable, a change in a derivative’s effectiveness as a hedge could materially affect expenses, net income and equity. The Company accounts for the effective portion of changes in the fair value of a derivative in other comprehensive income (loss) and subsequently reclassifies the effective portion to earnings over the term that the hedged transaction affects earnings. The Company accounts for the ineffective portion of changes in the fair value of a derivative directly in earnings. |
Stock-Based Compensation | Stock-Based Compensation At December 31, 2017, the Company has a stock-based employee compensation plan. We apply the provisions of ASC 718 Stock Compensation (“ASC 718”) which requires all share‑based payments to employees, including grants of employee stock options, to be recognized in the Consolidated Statements of Operations based on their fair values. All unvested options outstanding under our option plans have grant prices equal to the market price of the Company’s stock on the dates of grant. Compensation cost for restricted stock is determined based on fair market value of the Company’s stock at the date of grant. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The following is a summary of recently issued and other notable accounting pronouncements which relate to our business. In August 2017, the Financial Accounting Standards Board’s (“FASB”) issued Accounting Standards Update (“ASU”) 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities to enable entities to better portray the economic results of their risk management activities in their financial statements. The ASU expands an entity’s ability to hedge nonfinancial and financial risk components and reduce complexity in fair value hedges of interest rate risk and eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. The ASU also eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same Consolidated Statements of Operations line as the hedged item. The effective date of the standard is for fiscal periods, and interim periods within those years, beginning after December 15, 2018. The new standard must be adopted using a modified retrospective approach with early adoption permitted. We are currently evaluating the potential impact of this ASU on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting to provide clarity and reduce the diversity in practice and cost and complexity when applying the guidance in Topic 718, Compensation–Stock Compensation. Stakeholders observed that the definition of the term “modification” is broad and that its interpretation results in diversity in practice. The ASU states that when an entity concludes that a change is not substantive, then modification accounting does not apply. The effective date of the standard is for fiscal periods, and interim periods within those years, beginning after December 15, 2017. The new standard must be adopted prospectively to an award modified on or after the adoption date. Early adoption is permitted. Once adopted, HHC will apply this guidance to any modifications made to either the stock option or restricted stock award plans. In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) . The standard defines an “in-substance non-financial asset” as a financial asset promised to a counterparty in a contract if substantially all the fair value of the assets is concentrated in nonfinancial assets. The ASU also provides guidance for accounting for partial sales of non-financial assets such as real estate. The effective date of the standard is for fiscal periods, and interim periods within those years, beginning after December 15, 2017. The new standard must be adopted retrospectively with early adoption permitted. We are currently evaluating the potential impact of this ASU on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) . This standard is intended to simplify the subsequent measurement of goodwill by eliminating step two from the goodwill impairment test. Instead, an entity will perform only step one of its quantitative goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and then recognizing the impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. An entity will still have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative step one impairment test is necessary. The effective date of the standard is for fiscal periods, and interim periods within those years, beginning after December 15, 2019. The new standard must be adopted prospectively with early adoption permitted. We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements. In January 2017, the FASB formally issued, and we early adopted ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business , as permitted, on a prospective basis. The standard provides criteria to determine when an integrated set of assets and activities is not a business. The criteria requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. However, to be considered a business, the set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. Under the new guidance, the acquisition of a property with an in-place lease generally will no longer be accounted for as an acquisition of a business, but instead as an asset acquisition, meaning the transaction costs of such an acquisition will now be capitalized instead of expensed. Our adoption did not have a material impact on our accounting for acquisitions. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows – Restricted Cash , which requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The effective date of the standard is for fiscal periods, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period, but any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The new standard must be adopted retrospectively. ASU 2016-18 will impact our presentation of operating, investing and financing activities related to restricted cash on our consolidated statements of cash flows. In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control . The standard requires reporting entities to evaluate whether they should consolidate a variable interest entity (“VIE”) in certain situations involving entities under common control. Specifically, the standard changes the evaluation of whether a reporting entity is the primary beneficiary of a VIE by changing how a reporting entity that is a single decision maker of a VIE treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The new standard was effective January 1, 2017, and must be adopted retrospectively. We currently have no VIEs involving entities under common control, and accordingly, adoption of this ASU had no impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments . The standard addresses how certain cash receipts and payments are presented and classified in the statement of cash flows, including debt extinguishment costs, distributions from equity method investees and contingent consideration payments made after a business combination. The effective date of this standard is for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. The new standard must be adopted retrospectively. ASU 2016-15 will impact our presentation of operating, investing and financing activities related to certain cash receipts and payments on our consolidated statements of cash flows. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses . The standard modifies the impairment model for most financial assets, including trade accounts receivables and loans, and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. The effective date of the standard is for fiscal years, and for interim periods within those years, beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the adoption of ASU 2016-13 on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting . The standard amends several aspects of accounting for share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. We adopted the ASU as of January 1, 2017, and it did not have a material impact on our accounting for excess tax benefits and tax deficiencies as our stock compensation plans, which permit net-share settlement, had minimal vesting and exercise activity prior to January 1, 2017. The new guidance requires entities to recognize all income tax effects of awards in the Consolidated Statements of Operations when the awards vest or are settled, in contrast to prior guidance wherein such effects are recorded in additional paid-in capital (“APIC”). The amounts recorded in APIC prior to our adoption remain in APIC per the new standard. The new standard also allows an employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. Our plans allow us, at the employee’s request, to withhold shares with a fair value up to the amount of tax owed using the maximum statutory tax rate for the employee’s applicable jurisdiction. We elected to continue to estimate forfeitures as allowed by an election under the new guidance. Our consolidated statements of cash flows for the year ended December 31, 2017, 2016 and 2015 present excess tax benefits as an operating activity and employee taxes paid as a financing activity as required by ASU 2016-09. In February 2016, the FASB issued ASU 2016-02, Leases . ASU 2016-02 is codified in Accounting Standards Codification (“ASC”) 842. The standard amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The effective date of this standard is for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application. We are currently evaluating the impact of adopting ASU 2016-02 on our consolidated financial statements. We anticipate a material increase to our assets and liabilities as we will be required to capitalize our ground leases, office leases and certain office equipment where we are the lessee. We will also be considering certain services that are considered non-lease components such as common area maintenance under the new guidance. Upon adoption of ASC 842, these services will be accounted for under ASU 2014-09, Revenues from Contracts with Customers (Topic 606), which is further discussed below. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities which will require entities to recognize changes in equity investments with readily determinable fair values in net income. For equity investments without readily determinable fair values, the ASU permits the application of a measurement alternative using the cost of the investment, less any impairments, plus or minus changes resulting from observable price changes for an identical or similar investment of the same issuer. The effective date of the standard is for fiscal periods, and interim periods within those years, beginning after December 15, 2017, and must be adopted via a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. As all our equity investments do not have readily determinable fair values, the adoption of this ASU is not expected to have an impact on our consolidated financial statements. In May 2014, the FASB and International Accounting Standards Board issued ASU 2014-09. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The ASU requires companies to identify performance obligations in the contract, estimate the amount of variable consideration to include in the transaction price and allocate the transaction price to each separate performance obligation. The effective date of this standard is for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. We have concluded that after adoption we will no longer be able to recognize revenue for condominium projects on a percentage of completion basis. Adoption of the ASU will also impact the timing of recognition and classification of certain real estate selling costs, such as the costs related to our condominium model units. Currently, these selling costs are capitalized as real estate project costs and recognized as costs of sales on a percentage of completion basis in our consolidated financial statements. Under the new guidance, some of these costs may need to be expensed immediately or will be capitalized as property and equipment and depreciated over their estimated useful life. Entities have the option of using either a full retrospective or a modified retrospective approach. We have elected to apply a modified retrospective approach of adoption. Upon adoption of this ASU on January 1, 2018, since buyers are not required to pay us for performance under the sales contracts as the condominiums are constructed, revenue and cost of sales for condominium units sold will no longer be recognized until the construction is complete, the sale closes, and the title to the property has transferred to the buyer. Therefore, on the adoption date of this new standard, we will report an adjustment to reduce retained earnings by an estimated $70.0 - $90.0 million for amounts previously recognized in earnings on a percentage of completion basis for those sale contracts existing at December 31, 2017. This same amount will be reported in future periods when the sales close and title transfers to the buyer. |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Estimated Useful Lives | Asset Type Years Location of Asset Buildings and improvements 10 - 45 Buildings and Equipment Equipment and fixtures 5 - 10 Buildings and Equipment Computer hardware and software, and vehicles 3 - 5 Prepaid expenses and other assets, net Tenant improvements Lesser of lease term or useful life Prepaid expenses and other assets, net Leasing costs Related lease term Prepaid expenses and other assets, net |
Categories of Developments | December 31, (In thousands) 2017 2016 Land and improvements $ 202,875 $ 188,544 Development costs 675,691 567,650 Condominium projects 318,016 205,786 Total Developments $ 1,196,582 $ 961,980 |
Changes in Allowance for Doubtful Accounts | (In thousands) 2017 2016 2015 Balance as of January 1 $ 7,799 $ 4,406 $ 7,619 Provision for doubtful accounts 2,710 5,664 4,030 Write-offs (1,209) (2,271) (7,243) Balance as of December 31, $ 9,300 $ 7,799 $ 4,406 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
EARNINGS PER SHARE | |
Summary of EPS calculations | Year Ended December 31, (In thousands, except per share amounts) 2017 2016 2015 Basic EPS: Numerator: Net income $ 166,623 $ 202,326 $ 126,719 Net income attributable to noncontrolling interests 1,781 (23) — Net income attributable to common stockholders $ 168,404 $ 202,303 $ 126,719 Denominator: Weighted average basic common shares outstanding 41,364 39,492 39,470 Diluted EPS: Numerator: Net income attributable to common stockholders $ 168,404 $ 202,303 $ 126,719 Less: Warrant liability gain — — (58,320) Adjusted net income attributable to common stockholders $ 168,404 $ 202,303 $ 68,399 Denominator: Weighted average basic common shares outstanding 41,364 39,492 39,470 Restricted stock and stock options 279 343 411 Warrants 1,446 2,894 2,873 Weighted average diluted common shares outstanding 43,089 42,729 42,754 Basic income per share: $ 4.07 $ 5.12 $ 3.21 Diluted income per share: $ 3.91 $ 4.73 $ 1.60 |
ACQUISITIONS AND DISPOSITIONS (
ACQUISITIONS AND DISPOSITIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ACQUISITIONS AND DISPOSITIONS | |
Schedule of purchase price | Asset Acquisition date fair value Building $ 38,213 Land 3,069 Improvements 957 Furniture, fixtures and equipment 590 Leases in place 714 Other identifiable assets 18 Total $ 43,561 |
INVESTMENT IN REAL ESTATE AND33
INVESTMENT IN REAL ESTATE AND OTHER AFFILIATES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Investments in Real Estate and Other Affiliates | Economic/Legal Ownership Carrying Value Share of Earnings/Dividends December 31, December 31, December 31, December 31, Year Ended December 31, ($ in thousands) 2017 2016 2017 2016 2017 2016 2015 Equity Method Investments Master Planned Communities: The Summit (a) — % — % $ 45,886 $ 32,653 $ 23,234 $ 43,501 $ — Operating Assets: Las Vegas 51s, LLC (b) (c) 100.00 50.00 — 11,062 (152) 12 152 Constellation (b) (c) 100.00 50.00 — 2,730 (323) (54) — The Metropolitan Downtown Columbia (d) 50.00 50.00 — (1,064) 390 (800) (13) Millennium Six Pines Apartments (b) 100.00 100.00 — — — 44 (1,165) Stewart Title of Montgomery County, TX 50.00 50.00 3,673 3,611 386 696 996 Woodlands Sarofim #1 20.00 20.00 2,696 2,683 53 182 166 Strategic Developments: Circle T Ranch and Power Center (a) 50.00 50.00 4,455 4,956 — 10,497 — HHMK Development 50.00 50.00 10 10 — — 549 KR Holdings 50.00 50.00 749 707 41 18 1,289 m.flats/TEN.M (a) 50.00 50.00 6,521 6,379 (415) — — 33 Peck Slip (a) 35.00 35.00 8,651 8,243 (643) 106 (e) — 72,641 71,970 22,571 54,202 1,974 Cost method investments 3,952 4,406 2,927 2,616 1,747 Investment in Real Estate and Other Affiliates $ 76,593 $ 76,376 $ 25,498 $ 56,818 $ 3,721 (a) Please refer to the discussion below for a description of the joint venture ownership structure. (b) We acquired our joint venture partner’s interest and have fully consolidated the assets and liabilities of the entity. See Note 4 – Acquisitions and Dispositions for additional information regarding this transaction. (c) Equity method VIE as of December 31, 2017. (d) The Metropolitan Downtown Columbia was in a deficit position of $2.6 million and $1.1 million at December 31, 2017 and December 31, 2016, respectively, due to distributions from operating cash flows in excess of basis. This deficit balance is presented in Accounts payable and accrued expenses at December 31, 2017. The deficit balance as of December 31, 2016 has been presented as previously reported. (e) The 33 Peck Slip hotel was closed in December 2016 for redevelopment and was transferred to the Strategic Developments segment as of January 1, 2017. The share of earnings for the year ended December 31, 2016 was recorded in the Operating Assets segment but is reflected above in the Strategic Developments segment for comparative purposes. |
The Summit | |
Summary of Investments in Real Estate and Other Affiliates | December 31, (in millions) 2017 2016 Total Assets $ 166.9 $ Total Liabilities 118.9 Total Equity 48.0 Year Ended December 31, (in millions) 2017 2016 Revenues (a) $ $ Net income Gross Margin (a) Revenues related to land sales at the joint venture are recognized on a percentage of completion basis. |
IMPAIRMENT (Tables)
IMPAIRMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
IMPAIRMENT | |
Summary of Impaired Asset | Provision for impairment as of December 31, Impaired Asset Location Method of Determining Fair Value 2017 2016 2015 (In thousands) Operating Assets: Park West Peoria, AZ Discounted cash flow analysis using capitalization rate of 6.75% $ — $ 35,734 $ — |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE | |
Summary of Assets and Liabilities Measured on a Recurring Basis | December 31, 2017 December 31, 2016 Fair Value Measurements Using Fair Value Measurements Using (In thousands) Total Quoted Prices Significant Significant Total Quoted Prices Significant Significant Assets: Cash equivalents $ 50,135 $ 50,135 $ — $ — $ 18 $ 18 $ — $ — Interest rate swap derivative assets 4,470 — 4,470 — — — — — Liabilities: Interest rate swap derivative liabilities 5,961 — 5,961 — (149) — (149) — Warrants — — — — 332,170 — — 332,170 |
Rollforward of Sponsor and Management Warrants | (In thousands) 2017 2016 2015 Balance as of January 1 $ 332,170 $ 307,760 $ 366,080 Warrant liability loss (gain) (a) 43,443 24,410 (58,320) Exercises of Sponsor and Management Warrants (375,613) — — Balance as of December 31 $ — $ 332,170 $ 307,760 (a) For 2017, this amount represents losses recognized relating to each warrant prior to the respective exercise date. For 2016, represents unrealized losses recorded for outstanding warrants at the end of the period. Changes in the fair value of the Sponsor Warrants and Management Warrants prior to exercise were recognized in net income as a warrant liability gain or loss . |
Schedule of significant unobservable inputs used in the fair value measurement of warrants designated as Level 3 | Unobservable Inputs Expected Marketability December 31, 2017 (c) N/A N/A December 31, 2016 31.0% 0.0% - 1.0% (a) Based on our implied equity volatility. (b) Marketability discount decreases as the contractual expiration date of the marketability restrictions approaches. (c) See Note 3 – Warrant Liabilities for additional information. |
Summary of assets and liabilities that were measured at fair value on a non-recurring basis | December 31, 2017 December 31, 2016 (In thousands) Fair Value Carrying Estimated Carrying Estimated Assets: Cash Level 1 $ 810,924 $ 810,924 $ 665,492 $ 665,492 Accounts receivable, net (a) Level 3 13,041 13,041 9,883 9,883 Notes receivable, net (b) Level 3 5,864 5,864 155 155 Liabilities: Fixed-rate debt (c) Level 2 $ 1,526,875 $ 1,554,766 $ 1,184,141 $ 1,224,573 Variable-rate debt (c) Level 2 1,350,914 1,350,914 1,524,319 1,524,319 (a) Accounts receivable, net is shown net of an allowance of $9.3 million and $7.9 million at December 31, 2017 and 2016, respectively. (b) Notes receivable, net is shown net of an allowance of $0.1 million at December 31, 2017 and 2016. (c) Excludes related unamortized financing costs. |
MORTGAGES, NOTES AND LOANS PA36
MORTGAGES, NOTES AND LOANS PAYABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
MORTGAGES, NOTES AND LOANS PAYABLE | |
Summary of mortgages, notes and loans payable | December 31, (In thousands) 2017 2016 Fixed-rate debt: Unsecured 5.375% Senior Notes $ 1,000,000 $ — Unsecured 6.875% Senior Notes — 750,000 Secured mortgages, notes and loans payable 499,299 390,118 Special Improvement District bonds 27,576 44,023 Variable-rate debt: Mortgages, notes and loans payable (a) 1,350,914 1,524,319 Unamortized bond issuance costs (6,898) (5,779) Deferred financing costs (12,946) (11,934) Total mortgages, notes and loans payable, net $ 2,857,945 $ 2,690,747 (a) As more fully described below, $428.3 million and $182.1 million of variable rate debt has been swapped to a fixed rate for the term of the related debt as of December 31, 2017 and 2016, respectively. |
Schedule of mortgages, notes and loans payable by property | Maximum Carrying Value Initial / Extended Interest Facility December 31, December 31, ($ in thousands) Maturity (a) Rate Amount 2017 2016 Master Planned Communities Summerlin South SID Bonds - S124 December 2019 % $ 84 $ 123 Summerlin South SID Bonds - S128 December 2020 % 390 440 Summerlin South SID Bonds - S132 December 2020 % 912 1,268 The Woodlands Master Credit Facility April 2020 / April 2021 % (b) $ 180,000 150,000 150,000 Bridgeland Credit Facility November 2020 / November 2022 % (b) 65,000 65,000 65,000 Summerlin South SID Bonds - S151 June 2025 % 3,763 4,159 Summerlin South SID Bonds - S128C December 2030 % 4,283 4,600 Summerlin South SID Bonds - S159 June 2035 % 139 2,389 Summerlin West SID Bonds - S812 October 2035 % 15,193 27,459 Master Planned Communities Total 239,764 255,438 Operating Assets 1701 Lake Robbins April 2017 % — 4,600 Outlet Collection at Riverwalk October 2017 / October 2018 % (b) 53,841 53,841 55,778 1725-35 Hughes Landing Boulevard June 2018 / June 2019 % (b) 143,000 117,417 105,647 The Westin at The Woodlands (c) August 2018 / August 2019 % (b) 57,946 57,946 58,077 110 North Wacker (d) October 2019 % 18,926 22,704 Three Hughes Landing January 2018 / December 2019 % (b) 65,455 45,058 35,053 Lakeland Village Center at Bridgeland May 2018 / May 2020 % (b) 14,000 11,470 9,979 Embassy Suites at Hughes Landing October 2018 / October 2020 % (b) 37,100 31,245 29,461 The Woodlands Resort & Conference Center (c) December 2018 / December 2020 % (b) 65,500 65,500 70,000 One Merriweather February 2020 / February 2021 % (b) 49,929 42,332 23,588 Downtown Summerlin (e) September 2020 / September 2021 % (b) 274,088 274,088 302,981 Two Merriweather October 2020 / October 2021 % (b) 33,156 19,429 — HHC 242 Self-Storage October 2019 / October 2021 % (b) 6,658 6,243 3,708 HHC 2978 Self-Storage Facility January 2020 / January 2022 % (b) 6,368 5,634 1,715 70 Columbia Corporate Center May 2020 / May 2022 % (b)(f) 20,000 20,000 One Mall North May 2020 / May 2022 % (b)(f) 14,463 — 10-60 Columbia Corporate Centers (g) May 2020 / May 2022 % (b)(f) 80,000 20/25 Waterway Avenue May 2022 % 13,646 13,886 Millennium Waterway Apartments June 2022 % 55,095 55,584 Ward Village (h) September 2021 / September 2023 % (b) 238,718 238,718 9303 New Trails December 2023 % 12,003 12,378 4 Waterway Square December 2023 % 35,151 36,249 3831 Technology Forest Drive March 2026 % 21,954 22,383 Kewalo Basin Harbor September 2027 % (b) 11,562 — — Millennium Six Pines Apartments August 2028 % 42,500 42,500 3 Waterway Square August 2028 % 50,327 51,590 One Hughes Landing December 2029 % 52,000 52,000 Downtown Summerlin SID Bonds - S128 December 2030 % 2,812 3,350 Two Hughes Landing December 2030 % 48,000 48,000 One Lakes Edge March 2029 / March 2031 % 69,440 68,874 Constellation Apartments January 2033 % 24,200 — Hughes Landing Retail December 2036 % 35,000 35,000 Columbia Regional Building February 2037 % 25,000 22,188 Other Various % — 236 Operating Assets Total 1,589,438 1,526,227 Strategic Developments Waiea and Anaha November 2017 / November 2019 % (b) — 160,847 Ke Kilohana December 2019 / December 2020 % (b) 142,656 — — Ae`o December 2019 / December 2021 % (b) 230,000 33,603 — 100 Fellowship Drive May 2022 % (b) 51,426 1 — Aristocrat October 2022 % (b) 31,118 — — Two Summerlin October 2022 % (b) 33,432 — — Strategic Developments Total 33,604 160,847 Other corporate financing arrangements July 2018 % 14,983 15,948 Senior Notes October 2021 % — 750,000 Senior Notes March 2025 % 1,000,000 — Unamortized bond issuance costs (6,898) (5,779) Deferred financing costs (12,946) (11,934) Total mortgages, notes, and loans payable $ 2,857,945 $ 2,690,747 (a) Maturity dates presented include initial maturity date as well as the extended or final maturity date as contractually stated. Extension periods generally can be exercised at our option at the initial maturity date, subject to customary extension terms that are based on current property performance projections. Such extension terms may include, but are not limited to, minimum debt service coverage, minimum occupancy levels or condominium sales levels, as applicable and other performance criteria. In certain cases due to property performance not meeting covenants, we may have to paydown a portion of the loan in order to obtain the extension. (b) The interest rate presented is based on the one month LIBOR, three month LIBOR or Prime rate, as applicable, which was 1.49%, 1.61% and 4.50%, respectively, at December 31, 2017. (c) Based on current performance of The Westin at The Woodlands and The Woodlands Resort and Conference Center, a paydown may be required in order to exercise the extension option. (d) LIBOR on the $18.9 million outstanding principal balance is swapped to a 2.96% fixed-rate through maturity resulting an overall fixed rate of 5.21%. (e) The forward starting swaps related to this debt became effective on December 31, 2017. LIBOR on the $100.0 million of the outstanding principal balance is swapped to a 2.68% fixed-rate through maturity, LIBOR on another $100.0 million of the outstanding principal balance is swapped to a 2.62% fixed-rate through maturity, and LIBOR on $50.0 million of the outstanding principal balance is swapped to a 2.65% fixed-rate through maturity resulting in an overall rate of 4.69% (f) These three notes are part of one master facility, with all three respective properties collateralizing the total $114.5 million indebtedness. (g) LIBOR on $40.0 million of the outstanding principal balance is swapped to a 1.66% fixed-rate through maturity resulting in an overall fixed rate of 3.33%. (h) LIBOR on $119.4 million of the outstanding principal balance is swapped to a 1.14% fixed-rate through maturity resulting in an overall fixed rate of 3.82%. |
Summary of Contractual Obligations Relating to Mortgages, Notes, and Loans Payable | Mortgages, notes and loans payable (In thousands) principal payments 2018 $ 78,207 2019 256,338 2020 178,836 2021 467,010 2022 251,086 Thereafter 1,646,312 Total principal payments 2,877,789 Deferred financing costs, net and unamortized underwriting fees (19,844) Total mortgages, notes and loans payable $ 2,857,945 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
Schedule of provision for (benefit from) income taxes | (In thousands) 2017 2016 2015 Current $ $ 4,752 $ 2,849 Deferred (43,463) 113,698 21,152 Total $ $ 118,450 $ 24,001 |
Schedule of reconciliation of income tax expense computed by applying the Federal corporate tax rate to the provision for income taxes | (In thousands) 2017 2016 2015 Tax at statutory rate on earnings from continuing operations before income taxes $ 42,911 $ 112,264 $ 52,751 (Decrease) increase in valuation allowance, net (175) (1,326) 1,742 State income taxes, net of Federal income tax benefit 1,408 4,004 267 Tax benefit from Tax Act (101,688) — — Tax expense (benefit) from other change in rates, prior period adjustments and other permanent differences 2,941 (4,591) (7,361) Tax benefit on equity compensation (6,403) — — Non-deductible warrant liability loss (gain) 15,205 8,544 (20,412) Uncertain tax position benefit excluding interest — (407) (2,483) Uncertain tax position interest, net of Federal income tax benefit — (38) (503) Income tax (benefit) expense $ (45,801) $ 118,450 $ 24,001 |
Schedule of amounts and expiration dates of operating loss and tax credit carryforwards | Expiration (In thousands) Amount Date Net operating loss carryforwards - Federal $ 147,059 2024-2037 Net operating loss carryforwards - State 327,221 2018-2037 Capital loss carryforwards — n/a Tax credit carryforwards - Federal AMT 3,699 n/a |
Summary of tax effects of temporary differences and carryforwards included in net deferred tax liabilities | (In thousands) 2017 2016 Deferred tax assets: Operating and Strategic Developments properties, primarily differences in basis of assets and liabilities $ 92,210 $ 208,862 Interest deduction carryforwards 29,247 54,759 Operating loss and tax credit carryforwards 50,914 30,866 Total deferred tax assets 172,371 294,487 Valuation allowance (17,271) (18,635) Total net deferred tax assets $ 155,100 $ 275,852 Deferred tax liabilities: Property associated with MPCs, primarily differences in the tax basis of land assets and treatment of interest and other costs $ (157,181) $ (262,572) Operating and Strategic Developments properties, primarily differences in basis of assets and liabilities (60,430) (40,915) Deferred income (98,339) (173,310) Total deferred tax liabilities (315,950) (476,797) Total net deferred tax liabilities $ (160,850) $ (200,945) |
Reconciliation of Unrecognized Tax Benefits | (In thousands) 2017 2016 2015 Unrecognized tax benefits, opening balance $ — $ 36,524 $ 184,200 Gross increases - tax positions in prior period — — — Gross decreases - tax positions in prior periods — (36,524) (147,676) Unrecognized tax benefits, ending balance $ — $ — $ 36,524 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
Summary of Obligations for Minimum Rentals Under Non-Cancelable Operating Leases | Subsequent/ (In thousands) 2018 2019 2020 2021 2022 Other Total Ground lease and other leasing commitments $ 8,769 $ 8,119 $ 8,259 $ 8,097 $ 7,430 $ 314,129 $ 354,803 |
OTHER ASSETS AND LIABILITIES (T
OTHER ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
OTHER ASSETS AND LIABILITIES | |
Summary of the significant components of prepaid expenses and other assets | December 31, (In thousands) 2017 2016 Condominium receivables (a) $ 158,516 $ 210,219 Condominium deposits 82,605 193,197 Straight-line rent 39,136 31,518 Security and escrow deposits 37,585 61,304 Intangibles 34,802 4,046 Special Improvement District receivable 26,430 61,603 Below-market ground leases 18,647 18,986 In-place leases 10,821 16,015 Above-market tenant leases 1,648 2,457 Equipment, net of accumulated depreciation of $6.9 million and $5.3 million, respectively 16,955 17,556 Prepaid expenses 11,731 11,177 Tenant incentives and other receivables 8,482 8,773 Interest rate swap derivative assets 4,470 — Federal income tax receivable 2,198 15,763 Other 19,242 13,902 $ 473,268 $ 666,516 (a) We expect $4.4 million related to Anaha will be collected in 2018, and $151.5 million and $2.7 million relating to Ae`o and Ke Kilohana, respectively, will be collected in 2019. |
Summary of the significant components of accounts payable and accrued expenses | December 31, (In thousands) 2017 2016 Construction payables $ 217,838 $ 207,917 Condominium deposit liabilities 55,975 117,015 Deferred income 53,337 85,158 Accounts payable and accrued expenses 35,887 33,050 Tenant and other deposits 18,937 28,559 Accrued payroll and other employee liabilities 41,236 36,937 Accrued interest 20,322 16,897 Accrued real estate taxes 22,289 16,726 Straight-line ground rent liability 14,944 13,126 Interest rate swaps 5,961 (149) Above-market ground leases 293 1,762 Other 34,699 15,012 $ 521,718 $ 572,010 |
INTANGIBLES (Tables)
INTANGIBLES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INTANGIBLES | |
Summary of intangible assets and liabilities | As of December 31, 2017 As of December 31, 2016 Gross Accumulated Net Gross Accumulated Net Asset (Amortization) Carrying Asset (Amortization) Carrying (In thousands) (Liability) / Accretion Amount (Liability) / Accretion Amount Intangible Assets: Indefinite lived intangibles $ 25,028 $ — $ 25,028 $ — $ — $ — Goodwill 1,307 — 1,307 1,307 — 1,307 Other intangibles 10,278 (1,812) 8,466 3,038 (299) 2,739 Tenant leases: In-place value 22,304 (11,483) 10,821 37,567 (21,552) 16,015 Above-market 4,171 (2,523) 1,648 4,879 (2,422) 2,457 Below-market (6,454) 2,688 (3,766) (6,618) 2,065 (4,553) Ground leases: Above-market (293) — (293) (1,955) 193 (1,762) Below-market 23,096 (4,449) 18,647 23,096 (4,110) 18,986 Total indefinite lived intangibles 26,335 1,307 Total amortizing intangibles 35,523 33,882 |
DERIVATIVE INSTRUMENTS AND HE41
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
Summary of fair value of the Company's derivative financial instruments | Fixed Fair Value Asset (Liability) Notional Interest Effective Maturity December 31, December 31, (In thousands) Balance Sheet Location Amount Rate Date Date 2017 2016 Currently-paying contracts: Interest Rate Swap (a) Accounts payable and accrued expenses $ % 5/10/2011 10/31/2019 $ (286) $ (740) Interest Rate Swap (a) Prepaid expenses and other assets, net 5/6/2015 5/1/2020 299 (143) Interest Rate Swap (a) Prepaid expenses and other assets, net 10/3/2016 9/12/2021 4,007 3,368 Interest Rate Cap (b) Prepaid expenses and other assets, net 9/1/2017 8/31/2019 — — Interest Rate Cap (c) Prepaid expenses and other assets, net 12/22/2016 12/23/2019 164 768 Interest Rate Swap (a) (d) Accounts payable and accrued expenses 12/31/2017 12/31/2027 (1,124) (610) Interest Rate Swap (a) (d) Accounts payable and accrued expenses 12/31/2017 12/31/2027 (2,509) (1,479) Interest Rate Swap (a) (d) Accounts payable and accrued expenses 12/31/2017 12/31/2027 (2,042) (1,015) Total fair value derivative assets $ 4,470 $ 4,136 Total fair value derivative liabilities $ (5,961) $ (3,987) (a) Denotes derivatives designated as hedging instruments. (b) As of December 31, 2016, our $100.0 million interest rate cap with a 5.00% interest rate and an August 31, 2017 maturity date was in place and matured as scheduled. A new interest rate cap was entered into as detailed above and is not currently designated as a hedging instrument. Interest (income) expense included in the consolidated statements of operations for the year ended December 31, 2017 related to this contract is not material . (c) Denotes derivative contract that is not designated as a hedging instrument as of December 31, 2017. Interest (income) expense of $(0.6) million is included in the consolidated statements of operations for the year ended December 31, 2017, related to this contract. (d) Forward starting swaps were entered into in December 2015 and became effective as of December 31, 2017. |
Summary of effect of the Company's derivative financial instruments on the Condensed Consolidated Statements of Operations | Amount of Loss Recognized in AOCI on Derivative (Effective Portion) Year Ended December 31, Derivatives in Cash Flow Hedging Relationships 2017 2016 2015 Interest rate swaps $ (726) $ 831 $ (1,705) Amount of Loss Reclassified from AOCI into Operations (Effective Portion) Year Ended December 31, Location of Loss Reclassified from AOCI into Operations 2017 2016 2015 Interest expense $ (905) $ (1,364) $ (1,745) |
ACCUMULATED OTHER COMPREHENSI42
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |
Summary of AOCI | Balance as of January 1, 2016 $ (7,889) Other comprehensive income (loss) before reclassifications (261) Loss reclassified from accumulated other comprehensive loss to net income 1,364 Net current-period other comprehensive income (loss) 1,103 Balance as of December 31, 2016 (6,786) Other comprehensive income (loss) before reclassifications (1,084) Loss reclassified from accumulated other comprehensive loss to net income 905 Net current-period other comprehensive income (loss) (179) Balance as of December 31, 2017 $ (6,965) |
Summary of the amounts reclassified out of AOCI | Amounts reclassified from Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) Components Affected line items in the For the Year Ended (In thousands) Statements of Operations December 31, 2017 December 31, 2016 Losses on cash flow hedges Interest expense $ 1,443 $ 2,175 Provision for income taxes (538) (811) Total reclassifications for the period Net of tax $ 905 $ 1,364 |
STOCK-BASED PLANS (Tables)
STOCK-BASED PLANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
STOCK-BASED PLANS | |
Summary of stock option plan activity | Weighted Average Aggregate Weighted Average Remaining Intrinsic Shares Exercise Price Contractual Term Value (In years) Stock options outstanding at January 1, 2015 1,046,490 $ 72.61 Granted 117,000 134.24 Exercised — — Forfeited (77,450) 103.84 Expired — — Stock options outstanding at December 31, 2015 1,086,040 $ 77.11 Granted 162,100 $ 109.42 Exercised (3,000) 60.33 Forfeited (68,500) 122.93 Expired — — Stock options outstanding at December 31, 2016 1,176,640 $ 78.87 Granted 58,000 $ 119.85 Exercised (395,482) 58.81 Forfeited (54,976) 105.17 Expired (1,000) 57.77 Stock options outstanding at December 31, 2017 783,182 $ 90.22 5.7 33,454,510 Stock options exercisable at December 31, 2017 306,182 $ 59.96 3.6 21,833,176 Stock options vested and expected to vest at December 31, 2017 772,990 $ 59.96 5.7 33,302,071 |
Summary of information related to stock options outstanding | Weighted Average Remaining Number Weighted Average Contractual Term Number Range of Exercise Prices Outstanding Exercise Price (In years) Exercisable $ 46.49 $ 55.82 23,290 $ 3.7 23,290 $ 57.77 $ 60.33 242,418 3.3 242,418 $ 61.64 $ 69.75 109,550 4.4 29,550 $ 81.80 $ 110.50 94,424 6.1 9,024 $ 112.64 $ 151.72 313,500 8.0 1,900 783,182 $ 5.7 306,182 |
Summary of Significant Assumptions Used in Black-Scholes Option-Pricing Model | As of December 31, 2017 2016 2015 Grant date fair value $ 34.51 $ 36.55 $ 44.45 Expected life of options (in years) 8.4 7.4 7.5 Risk-free interest rate 2.2 % 1.8 % 2.0 % Expected volatility 22.8 % 33.1 % 26.1 % Expected annual dividend per share — — — |
Summary of restricted stock activity | Weighted Average Grant Date Shares Fair Value Restricted stock outstanding at January 1, 2015 $ Granted 81,581 121.81 Vested (7,546) 147.56 Forfeited (4,169) 101.33 Restricted stock outstanding at December 31, 2015 242,556 $ 100.15 Granted 136,198 $ 67.80 Vested (37,670) 83.47 Forfeited (51,972) 90.14 Restricted stock outstanding at December 31, 2016 289,112 $ 88.88 Granted 177,385 $ 85.81 Vested (68,819) 88.58 Forfeited (43,482) 76.10 Restricted stock outstanding at December 31, 2017 354,196 $ 88.97 |
RENTALS UNDER OPERATING LEASES
RENTALS UNDER OPERATING LEASES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
RENTALS UNDER OPERATING LEASES | |
Schedule of minimum future rentals under operating leases | Total Minimum Year Rent (In thousands) 2018 $ 160,878 2019 173,404 2020 163,048 2021 166,703 2022 165,703 Subsequent 1,027,115 Total $ 1,856,851 |
SEGMENTS (Tables)
SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SEGMENTS | |
Summary of segment operating results | Year Ended December 31, (In thousands) 2017 2016 2015 Master Planned Communities Land sales $ 248,595 $ 215,318 $ 187,399 Builder price participation 22,835 21,386 26,846 Minimum rents (8) 384 797 Other land revenues 28,124 16,192 14,778 Other rental and property revenues (3) 24 45 Total revenues 299,543 253,304 229,865 Cost of sales – land 121,116 95,727 88,065 Land sales operations 38,777 42,371 44,907 Provision for doubtful accounts 2 — — Depreciation and amortization 323 311 640 Other income, net (3,500) — — Interest income (4) (59) (60) Interest expense (*) (24,288) (21,026) (18,053) Equity in (earnings) loss in Real Estate and Other Affiliates (23,234) (43,501) — Total expenses 109,192 73,823 115,499 MPC segment EBT 190,351 179,481 114,366 Operating Assets Minimum rents 182,468 172,437 149,064 Tenant recoveries 45,366 44,306 39,415 Hospitality revenues 76,020 62,252 45,374 Other rental and property revenues 23,701 16,170 25,453 Total revenues 327,555 295,165 259,306 Other property operating costs 71,748 60,506 68,078 Rental property real estate taxes 26,523 24,439 21,856 Rental property maintenance costs 12,872 12,033 10,236 Hospitality operating costs 56,362 49,359 34,839 Provision for doubtful accounts 2,710 5,601 3,998 Demolition costs 1,605 194 2,412 Provision for impairment — 35,734 — Development-related marketing costs 3,346 947 7,934 Depreciation and amortization 122,421 86,313 89,075 Other income, net 315 (4,601) (524) Interest income (22) (19) (37) Interest expense (*) 61,606 50,446 32,968 Equity in (earnings) loss in Real Estate and Other Affiliates (3,267) (2,802) (1,883) Total expenses 356,219 318,150 268,952 Operating Assets segment EBT (28,664) (22,985) (9,646) Strategic Developments Minimum rents 565 447 899 Tenant recoveries 448 24 127 Condominium rights and unit sales 464,251 485,634 305,284 Other land revenues 42 40 25 Other rental and property revenues 7,716 391 1,582 Total revenues 473,022 486,536 307,917 Condominium rights and unit cost of sales 338,361 319,325 191,606 Other property operating costs 19,981 5,472 4,673 Rental property real estate taxes 2,662 2,408 2,282 Rental property maintenance costs 560 359 476 Provision for (recovery of) doubtful accounts (2) 63 32 Demolition costs 318 2,018 885 Development-related marketing costs 17,158 21,237 17,532 Depreciation and amortization 1,210 2,744 3,240 Other income, net (108) (611) 104 Interest income (187) (500) (202) Interest expense (*) (25,280) (16,937) (8,453) Equity in (earnings) loss in Real Estate and Other Affiliates 550 (10,515) (1,838) Gains on sales of properties (51,242) (140,549) — Total expenses 303,981 184,514 210,337 Strategic Developments segment EBT 169,041 302,022 97,580 Total consolidated segment EBT $ 330,728 $ 458,518 $ 202,300 (*) Negative interest expense amounts are due to interest capitalized in our MPC and Strategic Developments segments related to Operating Assets segment debt and the Senior Notes. |
Reconciliation of EBT to GAAP income (loss) before taxes | Reconciliation of EBT to income before taxes Year Ended December 31, (In thousands) 2017 2016 2015 MPC segment EBT $ 190,351 $ 179,481 $ 114,366 Operating Assets segment EBT (28,664) (22,985) (9,646) Strategic Developments segment EBT 169,041 302,022 97,580 Total consolidated segment EBT 330,728 458,518 202,300 Corporate and other items: General and administrative (89,882) (86,588) (81,345) Corporate interest expense, net (48,700) (52,460) (52,995) Warrant liability (loss) gain (43,443) (24,410) 58,320 Gain on acquisition of joint venture partner's interest 23,332 27,088 — Gain (loss) on disposal of operating assets 3,868 (1,117) 29,073 Corporate Gains on sales of properties 125 — — Equity in earnings in Real Estate and Other Affiliates (453) — — Loss on redemption of senior notes due 2021 (46,410) — — Corporate other (expense) income, net (45) 6,241 1,409 Corporate depreciation and amortization (8,298) (6,496) (6,042) Total Corporate and other items (209,906) (137,742) (51,580) Income before taxes $ 120,822 $ 320,776 $ 150,720 |
Schedule of reconciliation of segment revenue to GAAP consolidated revenues | Reconciliation of Segment Basis Revenues to Revenues Year Ended December 31, (In thousands) 2017 2016 2015 Master Planned Communities $ 299,543 $ 253,304 $ 229,865 Operating Assets 327,555 295,165 259,306 Strategic Developments 473,022 486,536 307,917 Total revenues $ 1,100,120 $ 1,035,005 $ 797,088 |
Summary of assets by segment and the reconciliation of total segment assets to the total assets in the Condensed Consolidated Balance Sheets | December 31, (In thousands) 2017 2016 Master Planned Communities $ 1,999,090 $ 1,982,639 Operating Assets 2,489,177 2,344,949 Strategic Developments 1,511,612 1,451,460 Total segment assets 5,999,879 5,779,048 Corporate and other 729,185 588,334 Total assets $ 6,729,064 $ 6,367,382 |
QUARTERLY FINANCIAL INFORMATI46
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | |
Schedule of quarterly financial information | 2017 First Second Third Fourth (In thousands, except share amounts) Quarter Quarter Quarter Quarter Total revenues $ 231,762 $ 308,639 $ 258,736 $ 300,983 Operating income 77,554 54,133 24,372 62,443 Net income 5,659 3,120 10,516 147,328 Net income attributable to common stockholders 5,659 3,120 10,504 149,121 Earnings per share: Basic 0.14 0.08 0.25 3.48 Diluted (a) 0.13 0.07 0.24 3.46 Weighted average shares outstanding: Basic 39,799 40,373 42,845 42,860 Diluted 42,757 43,051 43,267 43,120 2016 First Second Third Fourth (In thousands, except share amounts) Quarter Quarter Quarter Quarter Total revenues $ 240,680 $ 273,514 $ 242,265 $ 278,546 Operating income 192,970 73,636 784 59,372 Net income 143,765 6,970 7,996 43,595 Net income attributable to common stockholders 143,765 6,970 7,973 43,595 Earnings per share: Basic 3.64 0.18 0.20 1.10 Diluted (a) 2.69 0.16 0.19 1.02 Weighted average shares outstanding: Basic 39,473 39,492 39,502 39,502 Diluted 42,400 42,664 42,760 42,753 Diluted earnings per share includes the impact of warrants, in the money options and restricted stock. Net income used in the calculation of EPS was also adjusted for the warrant gain during the period, where applicable. |
SUMMARY OF SIGNIFICANT ACCOUN47
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)segment$ / shares | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares | |
Amount of straight line rent receivables reclassified | $ 39,100 | $ 31,500 | |
Number of business segment | segment | 3 | ||
Adjustment to depreciation due to change in estimated useful life | $ 116,401 | 81,878 | $ 82,275 |
Impairments | 0 | (35,734) | 0 |
Notes receivable, net | 5,864 | 155 | |
MUDs receivables, net of allowances | 800 | 900 | |
SID receivables | 26,430 | 61,603 | |
Deferred leasing costs, accumulated amortization | 18,900 | 14,100 | |
Service Life | |||
Adjustment to depreciation due to change in estimated useful life | $ 25,500 | $ 1,000 | $ 17,100 |
Impact on diluted EPS resulting from depreciation adjustment | $ / shares | $ 0.59 | $ 0.02 | $ 0.40 |
Minimum | Master Planned Communities | |||
Estimated useful life of MPC assets | 20 years | ||
Maximum | Master Planned Communities | |||
Estimated useful life of MPC assets | 40 years | ||
Summerlin | |||
Notes receivable, net | $ 5,300 |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Summary of Asset Useful Lives, by Type) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Building and Building Improvements | Minimum | |
Estimated useful lives | 10 years |
Building and Building Improvements | Maximum | |
Estimated useful lives | 45 years |
Equipment and fixtures | Minimum | |
Estimated useful lives | 5 years |
Equipment and fixtures | Maximum | |
Estimated useful lives | 10 years |
Computer, Hardware and Software and Vehicles | Minimum | |
Estimated useful lives | 3 years |
Computer, Hardware and Software and Vehicles | Maximum | |
Estimated useful lives | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Summary of Developments by Category) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Developments | ||
Land and improvements | $ 202,875 | $ 188,544 |
Development costs | 675,691 | 567,650 |
Condominium projects | 318,016 | 205,786 |
Total Developments | $ 1,196,582 | $ 961,980 |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Summary of Changes in Allowance for Doubtful Accounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in allowance for doubtful accounts against accounts receivables: | |||
Balance at the beginning of the period | $ 7,900 | ||
Provision for doubtful accounts | 2,710 | $ 5,664 | $ 4,030 |
Balance at the end of the period | 9,300 | 7,900 | |
Allowance for doubtful accounts | |||
Changes in allowance for doubtful accounts against accounts receivables: | |||
Balance at the beginning of the period | 7,799 | 4,406 | 7,619 |
Provision for doubtful accounts | 2,710 | 5,664 | 4,030 |
Write-offs | (1,209) | (2,271) | (7,243) |
Balance at the end of the period | $ 9,300 | $ 7,799 | $ 4,406 |
SUMMARY OF SIGNIFICANT ACCOUN51
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Impact of New Accounting Standards) (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 109,508 | $ 277,912 | |
Proforma Adjustment | Accounting Standards Update 2014-09 | Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 70,000 | ||
Proforma Adjustment | Accounting Standards Update 2014-09 | Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 90,000 |
EARNINGS PER SHARE - (Informati
EARNINGS PER SHARE - (Information Related to EPS Calculation) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | |||||||||||
Net income | $ 147,328 | $ 10,516 | $ 3,120 | $ 5,659 | $ 43,595 | $ 7,996 | $ 6,970 | $ 143,765 | $ 166,623 | $ 202,326 | $ 126,719 |
Net loss (income) attributable to noncontrolling interests | 1,781 | (23) | |||||||||
Net income attributable to common stockholders | $ 149,121 | $ 10,504 | $ 3,120 | $ 5,659 | $ 43,595 | $ 7,973 | $ 6,970 | $ 143,765 | $ 168,404 | $ 202,303 | $ 126,719 |
Denominator: | |||||||||||
Weighted average basic common shares outstanding | 42,860,000 | 42,845,000 | 40,373,000 | 39,799,000 | 39,502,000 | 39,502,000 | 39,492,000 | 39,473,000 | 41,364 | 39,492 | 39,470 |
Numerator: | |||||||||||
Net income attributable to common stockholders | $ 149,121 | $ 10,504 | $ 3,120 | $ 5,659 | $ 43,595 | $ 7,973 | $ 6,970 | $ 143,765 | $ 168,404 | $ 202,303 | $ 126,719 |
Less: Warrant liability gain | (58,320) | ||||||||||
Adjusted net income attributable to common stockholders | $ 168,404 | $ 202,303 | $ 68,399 | ||||||||
Denominator: | |||||||||||
Weighted average basic common shares outstanding | 42,860,000 | 42,845,000 | 40,373,000 | 39,799,000 | 39,502,000 | 39,502,000 | 39,492,000 | 39,473,000 | 41,364 | 39,492 | 39,470 |
Restricted stock and stock options (in shares) | 279 | 343 | 411 | ||||||||
Warrants (in shares) | 1,446 | 2,894 | 2,873 | ||||||||
Weighted average diluted common shares outstanding | 43,120,000 | 43,267,000 | 43,051,000 | 42,757,000 | 42,753,000 | 42,760,000 | 42,664,000 | 42,400,000 | 43,089 | 42,729 | 42,754 |
Basic income per share: (in dollars per share) | $ 3.48 | $ 0.25 | $ 0.08 | $ 0.14 | $ 1.10 | $ 0.20 | $ 0.18 | $ 3.64 | $ 4.07 | $ 5.12 | $ 3.21 |
Diluted income per share: (in dollars per share) | $ 3.46 | $ 0.24 | $ 0.07 | $ 0.13 | $ 1.02 | $ 0.19 | $ 0.16 | $ 2.69 | $ 3.91 | $ 4.73 | $ 1.60 |
EARNINGS PER SHARE - (Narrative
EARNINGS PER SHARE - (Narrative) (Details) - USD ($) | Feb. 23, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Stock repurchased | ||||
Treasury stock activity, shares | 475,920 | |||
Shares acquired average price | $ 120.33 | |||
Treasury stock activity | $ 57,267,454 | $ 1,231,000 | ||
Stock Options | ||||
Antidilutive securities excluded from computation of diluted earnings per share | ||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 313,500 | 379,500 | 141,776 | |
Restricted Stock | ||||
Antidilutive securities excluded from computation of diluted earnings per share | ||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 161,155 | 130,286 |
WARRANT LIABILITIES (Details)
WARRANT LIABILITIES (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2017 | Oct. 07, 2016 | Jun. 30, 2017 | Jan. 31, 2017 | Feb. 28, 2011 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 04, 2017 | Aug. 29, 2017 | Jun. 16, 2017 | Nov. 09, 2010 |
Sponsors and Management Warrants | |||||||||||
Warrant liabilities | $ 332,170 | ||||||||||
Issuance of management warrants | $ 52,000 | 1,000 | |||||||||
Sponsors Warrants | |||||||||||
Sponsors and Management Warrants | |||||||||||
Exercise price (in dollars per share) | $ 50 | ||||||||||
Warrants outstanding | 1,916,667 | ||||||||||
Warrants exercised | 1,136,517 | ||||||||||
Warrant liabilities | $ 332,200 | ||||||||||
Management Warrants | |||||||||||
Sponsors and Management Warrants | |||||||||||
Proceeds from issuance of Management warrants | $ 19,000 | ||||||||||
Management Warrants | Chief Executive Officer | |||||||||||
Sponsors and Management Warrants | |||||||||||
Underlying shares associated with warrant | 2,367,985 | ||||||||||
Exercise price (in dollars per share) | $ 124.64 | ||||||||||
Total warrant price | $ 50,000 | ||||||||||
Number of shares called by warrants (in shares) | 1,965,409 | ||||||||||
Number of shares of common stock under warrants exercised | 1,614,803 | ||||||||||
Management Warrants | President | |||||||||||
Sponsors and Management Warrants | |||||||||||
Underlying shares associated with warrant | 315,731 | ||||||||||
Exercise price (in dollars per share) | $ 42.23 | $ 117.01 | |||||||||
Total warrant price | $ 2,000 | ||||||||||
Number of shares called by warrants (in shares) | 87,951 | ||||||||||
Number of shares donated to charitable trust | 6,850 | ||||||||||
Number of shares issued as per warrant provision for which share settled | 4,400 | ||||||||||
Warrants exercised | 198,184 | ||||||||||
Management Warrants | Chief Financial Officer | |||||||||||
Sponsors and Management Warrants | |||||||||||
Underlying shares associated with warrant | 178,971 | 98,549 | |||||||||
Exercise price (in dollars per share) | $ 112.08 | $ 54.50 | |||||||||
Number of shares called by warrants (in shares) | 50,125 | ||||||||||
Proceeds from issuance of Management warrants | $ 1,000 |
ACQUISITIONS AND DISPOSITIONS55
ACQUISITIONS AND DISPOSITIONS (Details) $ in Thousands | Mar. 01, 2017USD ($) | Jan. 28, 2017USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 12, 2017USD ($) |
Gain (loss) on disposal of operating assets | $ 3,868 | $ (1,117) | $ 29,073 | ||||||||||||
Corporate gains on sale of properties | 125 | ||||||||||||||
Portion of refinanced mortgage proceeds used to acquire partner's interest | 23,299 | 25,480 | |||||||||||||
Aggregate principal amount of debt issued | $ 200,000 | ||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||||||||||||||
Building | $ 38,213 | $ 38,213 | 38,213 | ||||||||||||
Land | 3,069 | 3,069 | 3,069 | ||||||||||||
Improvements | 957 | 957 | 957 | ||||||||||||
Furniture, fixtures and equipment | 590 | 590 | 590 | ||||||||||||
Lease in place | 714 | 714 | 714 | ||||||||||||
Other identifiable assets | 18 | 18 | 18 | ||||||||||||
Total assets | 43,561 | 43,561 | 43,561 | ||||||||||||
Payment to acquire JV partner's interest | 23,299 | 25,480 | |||||||||||||
Assets acquired and consolidated into financial statements | 43,561 | $ 43,561 | 43,561 | ||||||||||||
Equity in earnings from Real Estate and Other Affiliates | 25,498 | 56,818 | 3,721 | ||||||||||||
Revenues since the acquisition date | $ 300,983 | $ 258,736 | $ 308,639 | $ 231,762 | $ 278,546 | $ 242,265 | $ 273,514 | $ 240,680 | 1,100,120 | 1,035,005 | 797,088 | ||||
Pre-tax net loss since the acquisition date | $ 120,822 | $ 320,776 | $ 150,720 | ||||||||||||
Constellation | |||||||||||||||
Ownership interest (as a percent) | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||
Portion of refinanced mortgage proceeds used to acquire partner's interest | $ 8,000 | ||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||||||||||||||
Payment to acquire JV partner's interest | 8,000 | ||||||||||||||
Purchase price of acquisition | $ 16,000 | ||||||||||||||
Liabilities acquired percentage | 50.00% | ||||||||||||||
Gain recognized from acquisition | $ 17,800 | ||||||||||||||
Equity in earnings from Real Estate and Other Affiliates | $ 300 | ||||||||||||||
Constellation | Construction Loan Payable | |||||||||||||||
Construction loan | 15,800 | ||||||||||||||
Constellation | Constellation Note Payable | |||||||||||||||
Aggregate principal amount of debt issued | $ 24,200 | ||||||||||||||
Interest rate (as a percent) | 4.07% | ||||||||||||||
Las Vegas 51s | |||||||||||||||
Ownership interest (as a percent) | 50.00% | 50.00% | 50.00% | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||||||||||||||
Adjustment to allocate from identified finite-lived intangibles | $ 7,900 | $ 7,900 | $ 7,900 | ||||||||||||
Las Vegas 51s | |||||||||||||||
Portion of refinanced mortgage proceeds used to acquire partner's interest | $ 16,400 | ||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||||||||||||||
Total assets | $ 36,000 | ||||||||||||||
Economic/Legal Ownership | 50.00% | ||||||||||||||
Payment to acquire JV partner's interest | $ 16,400 | ||||||||||||||
Assets acquired and consolidated into financial statements | 36,000 | ||||||||||||||
Liabilities assumed and consolidated into financial statements | 3,200 | ||||||||||||||
Gain recognized from acquisition | $ 5,400 | ||||||||||||||
Contingent liability recorded per the terms of the purchase agreement | 400 | 400 | 400 | ||||||||||||
Adjustment to allocate from identified finite-lived intangibles | $ 24,900 | $ 24,900 | $ 24,900 | ||||||||||||
Acquired intangible assets weighted average amortization period | 11 years | ||||||||||||||
Equity in earnings from Real Estate and Other Affiliates | $ 200 | ||||||||||||||
Revenues since the acquisition date | 6,800 | ||||||||||||||
Pre-tax net loss since the acquisition date | (600) | ||||||||||||||
Five non-core assets | Disposal by Sale | |||||||||||||||
Number of assets sold | item | 5 | ||||||||||||||
Proceeds from Sale of Real Estate | $ 52,600 | ||||||||||||||
Gain (loss) on disposal of operating assets | $ 23,100 | ||||||||||||||
Corporate gains on sale of properties | 19,200 | ||||||||||||||
Gain (Loss) on Disposition of Business | $ 3,900 |
ACQUISITIONS AND DISPOSITIONS56
ACQUISITIONS AND DISPOSITIONS (Acquisitions) (Details) $ in Thousands | Mar. 01, 2017USD ($) | Jan. 18, 2017USD ($)a | Jan. 06, 2017USD ($)a | Dec. 29, 2016USD ($)ft² | Dec. 20, 2016USD ($)ft² | Dec. 19, 2016USD ($)a | Jul. 20, 2016USD ($)item | Jun. 01, 2016ft² | Mar. 16, 2016ft² | Sep. 04, 2015USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($)ft² | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 12, 2017USD ($) | Dec. 19, 2016ft² |
Acquisitions | |||||||||||||||||||||||
Area of land sold | ft² | 42,694 | ||||||||||||||||||||||
Corporate gains on sale of properties | $ 125 | ||||||||||||||||||||||
Payment to acquire JV partner's interest | 23,299 | $ 25,480 | |||||||||||||||||||||
Fixed loan | $ 200,000 | ||||||||||||||||||||||
Assets acquired and consolidated into financial statements | $ 43,561 | 43,561 | |||||||||||||||||||||
Revenues since the acquisition date | 300,983 | $ 258,736 | $ 308,639 | $ 231,762 | $ 278,546 | $ 242,265 | $ 273,514 | $ 240,680 | 1,100,120 | 1,035,005 | $ 797,088 | ||||||||||||
Pre-tax net loss since the acquisition date | 120,822 | 320,776 | 150,720 | ||||||||||||||||||||
Equity in earnings from Real Estate and Other Affiliates | 25,498 | 56,818 | $ 3,721 | ||||||||||||||||||||
Revenues | 58,600 | ||||||||||||||||||||||
Air rights with total residential and commercial development rights (in square feet) | ft² | 817,784 | ||||||||||||||||||||||
Buildings acquired consolidated | 38,213 | 38,213 | |||||||||||||||||||||
Land acquired consolidated | $ 3,069 | $ 3,069 | |||||||||||||||||||||
Landmark Mall | |||||||||||||||||||||||
Acquisitions | |||||||||||||||||||||||
Area of real estate property | a | 11.4 | ||||||||||||||||||||||
Purchase price of acquisition | $ 22,200 | ||||||||||||||||||||||
American City Building | |||||||||||||||||||||||
Acquisitions | |||||||||||||||||||||||
Area of real estate property | ft² | 117,098 | ||||||||||||||||||||||
Purchase price of acquisition | $ 13,500 | ||||||||||||||||||||||
One Mall North | |||||||||||||||||||||||
Acquisitions | |||||||||||||||||||||||
Area of real estate property | 5.37 | 97,500 | |||||||||||||||||||||
Purchase price of acquisition | $ 22,200 | ||||||||||||||||||||||
Millennium Six Pines Apartments | |||||||||||||||||||||||
Acquisitions | |||||||||||||||||||||||
Voting interest acquired (as a percent) | 18.57% | 100.00% | 100.00% | ||||||||||||||||||||
Payment to acquire JV partner's interest | $ 4,000 | ||||||||||||||||||||||
Construction loan | 37,700 | ||||||||||||||||||||||
Fixed loan | $ 42,500 | ||||||||||||||||||||||
Interest rate (as a percent) | 3.39% | ||||||||||||||||||||||
Assets acquired and consolidated into financial statements | $ 67,900 | ||||||||||||||||||||||
Liabilities assumed and consolidated into financial statements | 42,700 | ||||||||||||||||||||||
Revenues since the acquisition date | 2,700 | ||||||||||||||||||||||
Pre-tax net loss since the acquisition date | (400) | ||||||||||||||||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain | $ 27,100 | ||||||||||||||||||||||
Number of units | item | 314 | ||||||||||||||||||||||
Circle T Ranch and Power Center | |||||||||||||||||||||||
Acquisitions | |||||||||||||||||||||||
Area of land sold | ft² | 72 | ||||||||||||||||||||||
Equity in earnings from Real Estate and Other Affiliates | $ 10,500 | ||||||||||||||||||||||
Las Vegas 51s | |||||||||||||||||||||||
Acquisitions | |||||||||||||||||||||||
Payment to acquire JV partner's interest | $ 16,400 | ||||||||||||||||||||||
Assets acquired and consolidated into financial statements | 36,000 | ||||||||||||||||||||||
Liabilities assumed and consolidated into financial statements | 3,200 | ||||||||||||||||||||||
Revenues since the acquisition date | $ 6,800 | ||||||||||||||||||||||
Pre-tax net loss since the acquisition date | (600) | ||||||||||||||||||||||
Equity in earnings from Real Estate and Other Affiliates | 200 | ||||||||||||||||||||||
Revenues | $ 1,300 | ||||||||||||||||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain | $ 5,400 | ||||||||||||||||||||||
The Club at Carlton Woods | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||||||||||||||||||
Acquisitions | |||||||||||||||||||||||
Proceeds from dispositions | $ 25,100 | ||||||||||||||||||||||
Liabilities assumed by purchaser | 4,000 | ||||||||||||||||||||||
Gain on sale of The Club at Carlton Woods | 29,100 | ||||||||||||||||||||||
Total assets | 20,900 | ||||||||||||||||||||||
Total liabilities | $ 24,900 | ||||||||||||||||||||||
The Outlet Collection, Elk Grove | |||||||||||||||||||||||
Acquisitions | |||||||||||||||||||||||
Area of land | a | 100 | ||||||||||||||||||||||
Number of acres under development | a | 64 | ||||||||||||||||||||||
The Outlet Collection, Elk Grove | Disposal by Sale | |||||||||||||||||||||||
Acquisitions | |||||||||||||||||||||||
Area of land sold | a | 36 | ||||||||||||||||||||||
Proceeds from Sale of Real Estate | $ 36,000 | ||||||||||||||||||||||
Corporate gains on sale of properties | $ 32,200 | ||||||||||||||||||||||
Park West | Disposal by Sale | |||||||||||||||||||||||
Acquisitions | |||||||||||||||||||||||
Proceeds from Sale of Real Estate | $ 32,500 | ||||||||||||||||||||||
Corporate gains on sale of properties | $ (1,100) | ||||||||||||||||||||||
Area of real estate property | ft² | 249,177 | 249,177 |
INVESTMENT IN REAL ESTATE AND57
INVESTMENT IN REAL ESTATE AND OTHER AFFILIATES (Summary of Investments in Real Estate and Other Affiliates) (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Mar. 01, 2017 | |
Investment in Real Estate and Other Affiliates | ||||
Carrying Value | $ 76,593 | $ 76,376 | ||
Economic/Legal Ownership | $ 25,498 | 56,818 | $ 3,721 | |
Aggregate carrying value of unconsolidated VIEs | 13,800 | |||
Number of variable interest entities in which entity is primary beneficiary | item | 3 | |||
Carrying values of the liabilities associated with the operations of the consolidated VIEs | $ 2,700 | 1,400 | ||
Carrying values of the assets associated with the operations of the consolidated VIEs | 24,800 | 21,700 | ||
Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Carrying Value | 76,593 | 76,376 | ||
Cost-method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Carrying Value | 3,952 | 4,406 | ||
Economic/Legal Ownership | 2,927 | 2,616 | 1,747 | |
Las Vegas 51s | ||||
Investment in Real Estate and Other Affiliates | ||||
Economic/Legal Ownership | 50.00% | |||
Economic/Legal Ownership | $ 200 | |||
Circle T Ranch and Power Center | ||||
Investment in Real Estate and Other Affiliates | ||||
Economic/Legal Ownership | $ 10,500 | |||
33 Peck Slip | Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Economic/Legal Ownership | 35.00% | 35.00% | ||
Carrying Value | $ 8,651 | $ 8,243 | ||
Economic/Legal Ownership | (643) | 106 | ||
Accounts Payable and Accrued Liabilities | The Metropolitan Downtown Columbia | ||||
Investment in Real Estate and Other Affiliates | ||||
Carrying Value | (2,600) | (1,100) | ||
Master Planned Communities | The Summit | Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Carrying Value | 45,886 | 32,653 | ||
Economic/Legal Ownership | $ 23,234 | $ 43,501 | ||
Operating Assets | Las Vegas 51s | Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Economic/Legal Ownership | 100.00% | 50.00% | ||
Carrying Value | $ 11,062 | |||
Economic/Legal Ownership | $ (152) | $ 12 | 152 | |
Operating Assets | Constellation | Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Economic/Legal Ownership | 100.00% | 50.00% | ||
Carrying Value | $ 2,730 | |||
Economic/Legal Ownership | $ (323) | $ (54) | ||
Operating Assets | The Metropolitan Downtown Columbia | Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Economic/Legal Ownership | 50.00% | 50.00% | ||
Carrying Value | $ (1,064) | |||
Economic/Legal Ownership | $ 390 | $ (800) | (13) | |
Operating Assets | Millennium Six Pines Apartments | Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Economic/Legal Ownership | 100.00% | 100.00% | ||
Economic/Legal Ownership | $ 44 | (1,165) | ||
Operating Assets | Stewart Title of Montgomery County, TX | Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Economic/Legal Ownership | 50.00% | 50.00% | ||
Carrying Value | $ 3,673 | $ 3,611 | ||
Economic/Legal Ownership | $ 386 | $ 696 | 996 | |
Operating Assets | Woodlands Sarofim 1 | Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Economic/Legal Ownership | 20.00% | 20.00% | ||
Carrying Value | $ 2,696 | $ 2,683 | ||
Economic/Legal Ownership | 53 | 182 | 166 | |
Strategic Developments | Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Carrying Value | 72,641 | 71,970 | ||
Economic/Legal Ownership | $ 22,571 | $ 54,202 | 1,974 | |
Strategic Developments | Circle T Ranch and Power Center | Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Economic/Legal Ownership | 50.00% | 50.00% | ||
Carrying Value | $ 4,455 | $ 4,956 | ||
Economic/Legal Ownership | $ 10,497 | |||
Strategic Developments | HHMK Development LLC | Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Economic/Legal Ownership | 50.00% | 50.00% | ||
Carrying Value | $ 10 | $ 10 | ||
Economic/Legal Ownership | 549 | |||
Strategic Developments | KR Holdings LLC | Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Economic/Legal Ownership | 50.00% | 50.00% | ||
Carrying Value | $ 749 | $ 707 | ||
Economic/Legal Ownership | $ 41 | $ 18 | $ 1,289 | |
Strategic Developments | m.flats/TEN.M | Equity Method Investments | ||||
Investment in Real Estate and Other Affiliates | ||||
Economic/Legal Ownership | 50.00% | 50.00% | ||
Carrying Value | $ 6,521 | $ 6,379 | ||
Economic/Legal Ownership | (415) | |||
Unconsolidated Properties | ||||
Investment in Real Estate and Other Affiliates | ||||
Secured debt | 183,900 | |||
Share of the entity in secured debt | $ 85,000 |
INVESTMENT IN REAL ESTATE AND58
INVESTMENT IN REAL ESTATE AND OTHER AFFILIATES (Narrative) (Details) | Jun. 01, 2016ft² | Mar. 16, 2016ft² | Oct. 04, 2013USD ($)a | Jan. 31, 2016USD ($) | Mar. 31, 2015USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2016USD ($) |
Real Estate and Other Affiliates | |||||||||
Revenues | $ 58,600,000 | ||||||||
Net income | 23,200,000 | ||||||||
Gross margin | 31,200,000 | ||||||||
Area of land sold | ft² | 42,694 | ||||||||
Equity in earnings | 25,498,000 | $ 56,818,000 | $ 3,721,000 | ||||||
Gain recognized on the sale of Redlands Promenade | 125,000 | ||||||||
Land | 277,932,000 | 320,936,000 | |||||||
Land sales | 248,595,000 | 215,318,000 | $ 187,399,000 | ||||||
The Summit | |||||||||
Real Estate and Other Affiliates | |||||||||
Preferred return, on capital (as a percent) | 5.00% | ||||||||
Entitlement of distribution by joint venture (in times) | item | 2 | ||||||||
Total assets | 166,900,000 | 151,400,000 | |||||||
Total liabilities | 118,900,000 | 116,600,000 | |||||||
Equity | 48,000,000 | 34,800,000 | |||||||
Revenues | 79,800,000 | ||||||||
Net income | 43,500,000 | ||||||||
Gross margin | 47,100,000 | ||||||||
Circle T Ranch and Power Center | |||||||||
Real Estate and Other Affiliates | |||||||||
Area of land sold | ft² | 72 | ||||||||
Equity in earnings | 10,500,000 | ||||||||
m.flats/TEN.M | |||||||||
Real Estate and Other Affiliates | |||||||||
Fair value of the land contributed to joint venture | $ 4,000,000 | ||||||||
Transaction value of the land contributed to joint venture | $ 23,400,000 | ||||||||
Area of land contributed to the joint venture (in acres) | a | 5 | ||||||||
Additional capitalized development costs incurred resulting from contribution of land | $ 3,100,000 | ||||||||
Total book value contribution | 7,100,000 | ||||||||
Transaction value, per constructed unit of land contributed to joint venture | $ 53,500,000,000 | ||||||||
Distribution of the cash contributed by joint venture partner | $ 7,300,000 | ||||||||
Contribution made till date | 6,300,000 | ||||||||
Gain recognized on the sale of Redlands Promenade | 200,000 | ||||||||
m.flats/TEN.M | Kettler Inc | |||||||||
Real Estate and Other Affiliates | |||||||||
Amount funded in cash to joint venture | 16,100,000 | ||||||||
m.flats/TEN.M | Construction Loan Payable | |||||||||
Real Estate and Other Affiliates | |||||||||
Non-recourse construction loan | $ 88,000,000 | ||||||||
Option to extend, term | 1 year | ||||||||
33 Peck Slip | |||||||||
Real Estate and Other Affiliates | |||||||||
Amount funded in cash to joint venture | 700,000 | 2,300,000 | |||||||
Capital contribution | $ 6,000,000 | ||||||||
Investment in joint venture | 8,700,000 | ||||||||
33 Peck Slip | Bridge Loan | |||||||||
Real Estate and Other Affiliates | |||||||||
Amount of bridge loan | $ 25,000,000 | ||||||||
Interest rate margin (as a percent) | 5.00% | ||||||||
33 Peck Slip | Construction Loan Payable | |||||||||
Real Estate and Other Affiliates | |||||||||
Redevelopment loan | $ 36,000,000 | ||||||||
Equity Method Investments | The Summit | |||||||||
Real Estate and Other Affiliates | |||||||||
Fair value of the land contributed to joint venture | $ 13,400,000 | ||||||||
SID Bonds transferred to a joint venture | 1,300,000 | ||||||||
Transaction value of the land contributed to joint venture | 125,400,000 | ||||||||
Value of land contributed to joint venture, price per acre | 226,000 | ||||||||
Equity Method Investments | The Summit | Maximum | |||||||||
Real Estate and Other Affiliates | |||||||||
Maximum capital contribution required | $ 30,000,000 | ||||||||
Equity Method Investments | 33 Peck Slip | |||||||||
Real Estate and Other Affiliates | |||||||||
Equity in earnings | $ (643,000) | $ 106,000 | |||||||
One Month LIBOR | |||||||||
Real Estate and Other Affiliates | |||||||||
Interest rate margin (as a percent) | 1.49% | ||||||||
One Month LIBOR | m.flats/TEN.M | Construction Loan Payable | |||||||||
Real Estate and Other Affiliates | |||||||||
Interest rate margin (as a percent) | 2.40% |
IMPAIRMENT (Details)
IMPAIRMENT (Details) | Dec. 29, 2016USD ($)ft² | Sep. 30, 2016USD ($)ft² | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Gain recognized on the sale of Redlands Promenade | $ 125,000 | ||||
Capitalization rate (as a percent) | 6.75% | 6.75% | 6.75% | ||
Provision for impairment | $ 0 | $ (35,734,000) | $ 0 | ||
Impairment on real estate | $ 0 | $ 0 | |||
Park West | |||||
Provision for impairment | $ 35,734 | ||||
Park West | Disposal by Sale | |||||
Area of Real Estate Property | ft² | 249,177 | 249,177 | |||
Gain recognized on the sale of Redlands Promenade | $ (1,100,000) | ||||
Provision for impairment | $ 35,700,000 | ||||
Proceeds from Sale of Real Estate | $ 32,500,000 |
FAIR VALUE (Assets and Liabilit
FAIR VALUE (Assets and Liabilities Measured on a Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Interest rate swaps | $ 149 | |
Liabilities | ||
Interest rate swaps | $ 5,961 | |
Warrants | 332,170 | |
Recurring | ||
Assets: | ||
Cash equivalents | 50,135 | 18 |
Interest rate swaps | 4,470 | 149 |
Liabilities | ||
Interest rate swaps | 5,961 | |
Warrants | 332,170 | |
Recurring | Level 1 | ||
Assets: | ||
Cash equivalents | 50,135 | 18 |
Recurring | Level 2 | ||
Assets: | ||
Interest rate swaps | 4,470 | 149 |
Liabilities | ||
Interest rate swaps | $ 5,961 | |
Recurring | Level 3 | ||
Liabilities | ||
Warrants | $ 332,170 |
FAIR VALUE (Reconciliation of W
FAIR VALUE (Reconciliation of Warrants Using Level 3 Inputs) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) | |||
Exercises of Sponsor and Management Warrants | $ 375,613 | ||
Warrant | |||
Reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) | |||
Balance at the beginning of the period | 332,170 | $ 307,760 | $ 366,080 |
Warrant liability loss (gain) | 43,443 | 24,410 | (58,320) |
Exercises of Sponsor and Management Warrants | $ (375,613) | ||
Balance at the end of the period | $ 332,170 | $ 307,760 | |
Expected Volatility (as a percent) | 31.00% | ||
Warrant | Minimum | |||
Reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) | |||
Marketability discount (as a percent) | 0.00% | ||
Warrant | Maximum | |||
Reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) | |||
Marketability discount (as a percent) | 1.00% |
FAIR VALUE (Assets and Liabil62
FAIR VALUE (Assets and Liabilities Measured on a Nonrecurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Liabilities: | ||
Allowance, Accounts receivable | $ 9,300 | $ 7,900 |
Allowance, Notes receivable | 100 | 100 |
Recurring | ||
Assets: | ||
Cash | 50,135 | 18 |
Recurring | Reported Value Measurement | ||
Assets: | ||
Notes receivable, net | 5,864 | 155 |
Recurring | Estimate of Fair Value Measurement | ||
Assets: | ||
Notes receivable, net | 5,864 | 155 |
Recurring | Level 1 | ||
Assets: | ||
Cash | 50,135 | 18 |
Recurring | Level 1 | Reported Value Measurement | ||
Assets: | ||
Cash | 810,924 | 665,492 |
Recurring | Level 1 | Estimate of Fair Value Measurement | ||
Assets: | ||
Cash | 810,924 | 665,492 |
Recurring | Level 2 | Reported Value Measurement | ||
Liabilities: | ||
Fixed-rate debt | 1,526,875 | 1,184,141 |
Variable-rate debt | 1,350,914 | 1,524,319 |
Recurring | Level 2 | Estimate of Fair Value Measurement | ||
Liabilities: | ||
Fixed-rate debt | 1,554,766 | 1,224,573 |
Variable-rate debt | 1,350,914 | 1,524,319 |
Recurring | Level 3 | Reported Value Measurement | ||
Assets: | ||
Accounts receivable, net | 13,041 | 9,883 |
Recurring | Level 3 | Estimate of Fair Value Measurement | ||
Assets: | ||
Accounts receivable, net | $ 13,041 | $ 9,883 |
MORTGAGES, NOTES AND LOANS PA63
MORTGAGES, NOTES AND LOANS PAYABLE, NET (Summary of Mortgages, Notes and Loans Payable) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 16, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Unamortized bond issuance costs | $ (6,898) | $ (5,779) | |
Deferred Financing Costs | (12,946) | (11,934) | |
Total | 2,857,945 | 2,690,747 | |
Amount of variable-rate debt swapped to fixed rate | 428,300 | 182,100 | |
5.375% senior notes due March 15, 2025 | |||
Debt Instrument [Line Items] | |||
Fixed-rate debt: | $ 1,000,000 | ||
Interest rate (as a percent) | 5.375% | 5.375% | |
Senior Notes 6.875 Percent Due 2021 | |||
Debt Instrument [Line Items] | |||
Fixed-rate debt: | 750,000 | ||
Interest rate (as a percent) | 6.875% | 6.875% | |
Secured Mortgages, Notes and Loans Payable | |||
Debt Instrument [Line Items] | |||
Fixed-rate debt: | $ 499,299 | 390,118 | |
Variable-rate debt: | 1,350,914 | 1,524,319 | |
Special Improvement District Bonds | |||
Debt Instrument [Line Items] | |||
Fixed-rate debt: | $ 27,576 | $ 44,023 |
MORTGAGES, NOTES AND LOANS PA64
MORTGAGES, NOTES AND LOANS PAYABLE, NET (Schedule of Debt by Property) (Details) | Jan. 25, 2018USD ($) | Jan. 19, 2018USD ($) | Dec. 05, 2017USD ($)item | Oct. 27, 2017USD ($) | Oct. 24, 2017USD ($) | Oct. 19, 2017USD ($) | Sep. 13, 2017USD ($)item | Aug. 11, 2017USD ($) | Jul. 14, 2017USD ($) | Apr. 27, 2017USD ($) | Apr. 06, 2017USD ($) | Mar. 16, 2017USD ($) | Jan. 17, 2017USD ($)ft²Option | Dec. 30, 2016USD ($)Option | Nov. 25, 2016USD ($) | Oct. 24, 2016USD ($)Option | Oct. 23, 2016Option | Oct. 07, 2016USD ($) | Sep. 12, 2016USD ($)Option | Feb. 25, 2016USD ($) | Jan. 27, 2016item | Dec. 20, 2015Option | May 31, 2017USD ($) | Jul. 31, 2016USD ($) | Dec. 31, 2017USD ($)facilityitem | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 27, 2017USD ($)ft² | Jun. 12, 2017USD ($) | Jan. 19, 2017USD ($) | Dec. 28, 2016USD ($) | Dec. 08, 2016USD ($) | Dec. 30, 2015USD ($) |
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 2,877,789,000 | ||||||||||||||||||||||||||||||||
Unamortized underwriting fees | (6,898,000) | $ (5,779,000) | |||||||||||||||||||||||||||||||
Unamortized bond issuance costs | (6,898,000) | (5,779,000) | |||||||||||||||||||||||||||||||
Deferred Financing Costs | (12,946,000) | (11,934,000) | |||||||||||||||||||||||||||||||
Total | 2,857,945,000 | 2,690,747,000 | |||||||||||||||||||||||||||||||
Aggregate principal amount of debt issued | $ 200,000,000 | ||||||||||||||||||||||||||||||||
Repayments of debt | 1,350,226,000 | 333,302,000 | $ 103,808,000 | ||||||||||||||||||||||||||||||
Debt instrument, issuance at premium to par | 2.25% | ||||||||||||||||||||||||||||||||
Redemption price percentage of principal | 100.00% | ||||||||||||||||||||||||||||||||
Outstanding principal balance of debt that is swapped to fixed rate through maturity | 428,300,000 | $ 182,100,000 | |||||||||||||||||||||||||||||||
Loss on redemption of senior notes due 2021 | $ 46,400,000 | $ 46,410,000 | |||||||||||||||||||||||||||||||
Weighted average interest rate (as a percent) | 4.61% | 4.71% | |||||||||||||||||||||||||||||||
Net cash proceeds received from issuance | $ 1,501,290,000 | $ 535,505,000 | $ 583,822,000 | ||||||||||||||||||||||||||||||
Interest rate swap derivative assets | $ 4,470,000 | 4,136,000 | |||||||||||||||||||||||||||||||
One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 1.49% | ||||||||||||||||||||||||||||||||
Three Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 1.61% | ||||||||||||||||||||||||||||||||
Prime Rate | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 4.50% | ||||||||||||||||||||||||||||||||
Other Financing Arrangements | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.00% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 14,983,000 | 15,948,000 | |||||||||||||||||||||||||||||||
Other Financing Arrangements | Recourse Debt | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 15,000,000 | ||||||||||||||||||||||||||||||||
Senior Notes 6.875 Percent Due 2021 | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 6.875% | 6.875% | |||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | 750,000,000 | ||||||||||||||||||||||||||||||||
Aggregate principal amount of debt issued | $ 750,000,000 | ||||||||||||||||||||||||||||||||
5.375% senior notes due March 15, 2025 | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 5.375% | 5.375% | |||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 1,000,000,000 | ||||||||||||||||||||||||||||||||
Aggregate principal amount of debt issued | $ 800,000,000 | ||||||||||||||||||||||||||||||||
Redemption price percentage of principal | 35.00% | ||||||||||||||||||||||||||||||||
Redemption price percentage at which Notes can be redeemed | 105.375% | ||||||||||||||||||||||||||||||||
10 - 70 Columbia Corporate Center | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 94,500,000 | ||||||||||||||||||||||||||||||||
Woodlands Properties | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Land, buildings and equipment and developments in progress pledged as collateral | 3,400,000,000 | ||||||||||||||||||||||||||||||||
One Mall North | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Number of extension options | Option | 2 | ||||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Net worth required to be maintained | $ 14,500,000 | ||||||||||||||||||||||||||||||||
Area of land | ft² | 97,500 | ||||||||||||||||||||||||||||||||
One Mall North | LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 1.75% | ||||||||||||||||||||||||||||||||
Master Planned Communities | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 239,764,000 | 255,438,000 | |||||||||||||||||||||||||||||||
Master Planned Communities | The Woodlands Master Credit Facility | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.24% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 180,000,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 150,000,000 | 150,000,000 | |||||||||||||||||||||||||||||||
Master Planned Communities | Revolving Credit Facility | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Facility Amount | $ 180,000,000 | ||||||||||||||||||||||||||||||||
Maximum additional borrowing amount | $ 30,000,000 | ||||||||||||||||||||||||||||||||
Extension period at borrower's option | 1 year | ||||||||||||||||||||||||||||||||
Master Planned Communities | Revolving Credit Facility | One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 2.75% | ||||||||||||||||||||||||||||||||
Master Planned Communities | Bridgeland | Bridgeland Credit Facility | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.76% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 65,000,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | 65,000,000 | 65,000,000 | |||||||||||||||||||||||||||||||
Master Planned Communities | Summerlin | Special Improvement District Bonds | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Bond obligation | $ 13,900,000 | 7,700,000 | |||||||||||||||||||||||||||||||
Master Planned Communities | Summerlin South | S124 | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 5.95% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 84,000 | 123,000 | |||||||||||||||||||||||||||||||
Master Planned Communities | Summerlin South | S128 | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 7.30% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 390,000 | 440,000 | |||||||||||||||||||||||||||||||
Master Planned Communities | Summerlin South | S132 | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 6.00% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 912,000 | 1,268,000 | |||||||||||||||||||||||||||||||
Master Planned Communities | Summerlin South | S151 | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 6.00% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 3,763,000 | 4,159,000 | |||||||||||||||||||||||||||||||
Master Planned Communities | Summerlin South | S128C | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 6.05% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 4,283,000 | 4,600,000 | |||||||||||||||||||||||||||||||
Master Planned Communities | Summerlin South | S159 | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 6.00% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 139,000 | 2,389,000 | |||||||||||||||||||||||||||||||
Master Planned Communities | Summerlin West | S812 | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 6.00% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 15,193,000 | 27,459,000 | |||||||||||||||||||||||||||||||
Master Planned Communities | Woodlands Properties | Line of Credit | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Facility Amount | 200,000,000 | ||||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Maximum facility amount at first extension option | $ 175,000,000 | ||||||||||||||||||||||||||||||||
Maximum facility amount at second extension option | $ 25,000,000 | ||||||||||||||||||||||||||||||||
Master Planned Communities | Woodlands Properties | Term Loan | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Facility Amount | 100,000,000 | ||||||||||||||||||||||||||||||||
Master Planned Communities | Woodlands Properties | Revolving Credit Facility | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Facility Amount | 100,000,000 | ||||||||||||||||||||||||||||||||
Operating Assets | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 1,589,438,000 | 1,526,227,000 | |||||||||||||||||||||||||||||||
Operating Assets | Other | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.60% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | 236,000 | ||||||||||||||||||||||||||||||||
Operating Assets | Downtown Summerlin | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.69% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 275,900,000 | $ 274,088,000 | |||||||||||||||||||||||||||||||
Outstanding balance | $ 311,800,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | 274,088,000 | 302,981,000 | |||||||||||||||||||||||||||||||
Repayments of debt | $ 30,000,000 | ||||||||||||||||||||||||||||||||
Number of extension options | item | 1 | ||||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Operating Assets | Downtown Summerlin | Swap one | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Outstanding balance | $ 100,000,000 | ||||||||||||||||||||||||||||||||
Fixed interest rate per swap (as a percent) | 2.68% | ||||||||||||||||||||||||||||||||
Operating Assets | Downtown Summerlin | Swap two | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Outstanding balance | $ 100,000,000 | ||||||||||||||||||||||||||||||||
Fixed interest rate per swap (as a percent) | 2.62% | ||||||||||||||||||||||||||||||||
Operating Assets | Downtown Summerlin | Swap three | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Outstanding balance | $ 50,000,000 | ||||||||||||||||||||||||||||||||
Fixed interest rate per swap (as a percent) | 2.65% | ||||||||||||||||||||||||||||||||
Operating Assets | Downtown Summerlin | One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 2.15% | ||||||||||||||||||||||||||||||||
Operating Assets | Downtown Summerlin | Recourse Debt | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Total | $ 274,100,000 | ||||||||||||||||||||||||||||||||
Maximum percent recourse | 35.00% | ||||||||||||||||||||||||||||||||
Maximum recourse upon completion of the project and achievement of debt service coverage ratio | 15.00% | ||||||||||||||||||||||||||||||||
Maximum percentage recourse upon achievement of conditions | 10.00% | ||||||||||||||||||||||||||||||||
Debt service coverage ratio to be achieved for reduction in maximum recourse | 1.15 | ||||||||||||||||||||||||||||||||
Debt service coverage ratio to be achieved for further reduction in maximum recourse | 1.25 | ||||||||||||||||||||||||||||||||
Minimum average tenant sales per net rentable square foot to be achieved for further reduction in maximum recourse | $ 500 | ||||||||||||||||||||||||||||||||
Occupancy percentage | 90.00% | ||||||||||||||||||||||||||||||||
Recourse on loan (as a percent) | 35.00% | ||||||||||||||||||||||||||||||||
Operating Assets | Downtown Summerlin | S128 | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 6.05% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 2,812,000 | 3,350,000 | |||||||||||||||||||||||||||||||
Operating Assets | Two Merriweather Columbia, MD | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.99% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 33,156,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 19,429,000 | ||||||||||||||||||||||||||||||||
Operating Assets | 1701 Lake Robbins | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 5.81% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | 4,600,000 | ||||||||||||||||||||||||||||||||
Repayments of debt | $ 4,600,000 | ||||||||||||||||||||||||||||||||
Operating Assets | 1725-35 Hughes Landing Boulevard | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.14% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 143,000,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 117,417,000 | 105,647,000 | |||||||||||||||||||||||||||||||
Operating Assets | 10 - 70 Columbia Corporate Center | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.49% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 20,000,000 | 20,000,000 | |||||||||||||||||||||||||||||||
Immediate advance on loan after modification of agreement | $ 20,000,000 | ||||||||||||||||||||||||||||||||
Area of real estate property acquired (in square foot) | ft² | 170,741 | ||||||||||||||||||||||||||||||||
Operating Assets | The Westin at the woodlands | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.14% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 57,946,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 57,946,000 | 58,077,000 | |||||||||||||||||||||||||||||||
Operating Assets | 110 N Wacker | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 5.21% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 18,900,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 18,926,000 | 22,704,000 | |||||||||||||||||||||||||||||||
Repayments of debt | $ 18,900,000 | ||||||||||||||||||||||||||||||||
Fixed interest rate per swap (as a percent) | 2.96% | ||||||||||||||||||||||||||||||||
Interest rate swap derivative assets | $ 300,000 | ||||||||||||||||||||||||||||||||
Operating Assets | Outlet at Riverwalk Properties | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.24% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 54,300,000 | $ 53,841,000 | |||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | 53,841,000 | 55,778,000 | |||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Operating Assets | Outlet at Riverwalk Properties | Construction Loan Payable | Recourse Debt | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 26,900,000 | ||||||||||||||||||||||||||||||||
Recourse on loan (as a percent) | 50.00% | ||||||||||||||||||||||||||||||||
Operating Assets | Three Hughes Landing | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.84% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 65,455,000 | ||||||||||||||||||||||||||||||||
Outstanding balance | $ 65,500,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 45,058,000 | 35,053,000 | |||||||||||||||||||||||||||||||
Number of extension options | item | 2 | ||||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Operating Assets | Three Hughes Landing | One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 2.60% | ||||||||||||||||||||||||||||||||
Operating Assets | Lakeland Village Center | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.84% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 14,000,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 11,470,000 | 9,979,000 | |||||||||||||||||||||||||||||||
Operating Assets | Embassy Suites at Hughes Landing | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.99% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 37,100,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 31,245,000 | 29,461,000 | |||||||||||||||||||||||||||||||
Operating Assets | The Woodlands Resort and Conference Center | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.74% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 65,500,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 70,000,000 | $ 65,500,000 | 70,000,000 | $ 85,000,000 | |||||||||||||||||||||||||||||
Number of extension options | Option | 2 | ||||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Operating Assets | The Woodlands Resort and Conference Center | One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 2.75% | ||||||||||||||||||||||||||||||||
Operating Assets | The Woodlands Resort and Conference Center | The Woodlands Master Credit Facility | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Number of extension options | Option | 2 | ||||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Annual principal payment | $ 15,000,000 | ||||||||||||||||||||||||||||||||
Operating Assets | The Woodlands Resort and Conference Center | The Woodlands Master Credit Facility | LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 3.25% | ||||||||||||||||||||||||||||||||
Operating Assets | One Merriweather | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.64% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 49,900,000 | $ 49,929,000 | |||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 42,332,000 | 23,588,000 | |||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Operating Assets | One Merriweather | One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 2.15% | ||||||||||||||||||||||||||||||||
Operating Assets | HHC 242 Self Storage Facility | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.09% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 6,658,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 6,243,000 | 3,708,000 | |||||||||||||||||||||||||||||||
Operating Assets | 10-60 Columbia Corporate Center | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.33% | ||||||||||||||||||||||||||||||||
Outstanding balance | $ 40,000,000 | ||||||||||||||||||||||||||||||||
Fixed interest rate per swap (as a percent) | 1.66% | ||||||||||||||||||||||||||||||||
Operating Assets | 20/25 Waterway Avenue | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.79% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 13,646,000 | 13,886,000 | |||||||||||||||||||||||||||||||
Operating Assets | Millennium Waterway Apartments | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.75% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 55,095,000 | 55,584,000 | |||||||||||||||||||||||||||||||
Operating Assets | Two Merriweather | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Facility Amount | $ 33,200,000 | ||||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Operating Assets | Two Merriweather | One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Variable rate basis (as a percent) | 2.50% | ||||||||||||||||||||||||||||||||
Operating Assets | Ward Village | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.82% | ||||||||||||||||||||||||||||||||
Outstanding balance | $ 119,400,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 238,718,000 | 238,718,000 | |||||||||||||||||||||||||||||||
Number of extension options | Option | 2 | ||||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Fixed interest rate per swap (as a percent) | 1.14% | ||||||||||||||||||||||||||||||||
Operating Assets | Ward Village | One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 2.50% | ||||||||||||||||||||||||||||||||
Operating Assets | Ward Village | Interest rate swap contracts | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Outstanding balance | $ 119,400,000 | ||||||||||||||||||||||||||||||||
Fixed interest rate per swap (as a percent) | 3.64% | ||||||||||||||||||||||||||||||||
Undrawn and available borrowing capacity | $ 0 | ||||||||||||||||||||||||||||||||
Operating Assets | 9303 New Trails | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.88% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 12,003,000 | 12,378,000 | |||||||||||||||||||||||||||||||
Operating Assets | 4 Waterway Square | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.88% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 35,151,000 | 36,249,000 | |||||||||||||||||||||||||||||||
Operating Assets | 3831 Technology Forest Drive | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.50% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 21,954,000 | 22,383,000 | |||||||||||||||||||||||||||||||
Operating Assets | Kewalo Harbor | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.24% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 11,562,000 | ||||||||||||||||||||||||||||||||
Aggregate principal amount of debt issued | $ 11,600,000 | ||||||||||||||||||||||||||||||||
Operating Assets | Kewalo Harbor | One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 2.75% | ||||||||||||||||||||||||||||||||
Operating Assets | Millennium Six Pines Apartments | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.39% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 42,500,000 | 42,500,000 | |||||||||||||||||||||||||||||||
Operating Assets | 3 Waterway Square | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.94% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 50,327,000 | 51,590,000 | |||||||||||||||||||||||||||||||
Operating Assets | One Lakes Edge | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.50% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 71,900,000 | $ 69,440,000 | 68,874,000 | ||||||||||||||||||||||||||||||
Operating Assets | One Lakes Edge | Construction Loan Payable | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Variable rate basis (as a percent) | 3.50% | ||||||||||||||||||||||||||||||||
Annual principal payment | $ 3,000,000 | ||||||||||||||||||||||||||||||||
Operating Assets | One Lakes Edge | Fannie Mae | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Debt refinanced | $ 69,400,000 | ||||||||||||||||||||||||||||||||
Term of debt instrument | 12 years | ||||||||||||||||||||||||||||||||
Fixed interest rate (as a percent) | 4.50% | ||||||||||||||||||||||||||||||||
Interest Period | 4 years | ||||||||||||||||||||||||||||||||
Amortization Period | 30 years | ||||||||||||||||||||||||||||||||
Operating Assets | Constellation | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.07% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 24,200,000 | ||||||||||||||||||||||||||||||||
Operating Assets | One Hughes Landing | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.30% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 52,000,000 | 52,000,000 | |||||||||||||||||||||||||||||||
Operating Assets | Two Hughes Landing | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.20% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 48,000,000 | 48,000,000 | |||||||||||||||||||||||||||||||
Operating Assets | Hughes Landing Retail | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.50% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 35,000,000 | 35,000,000 | |||||||||||||||||||||||||||||||
Operating Assets | Hughes Landing Retail | Construction Loan Payable | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 36,600,000 | ||||||||||||||||||||||||||||||||
Fixed interest rate (as a percent) | 3.50% | ||||||||||||||||||||||||||||||||
Operating Assets | Columbia Regional Building | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.48% | 4.48% | |||||||||||||||||||||||||||||||
Facility Amount | $ 23,000,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 25,000,000 | 22,188,000 | $ 25,000,000 | ||||||||||||||||||||||||||||||
Operating Assets | HHC 2978 Self-Storage Facility | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.09% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 6,368,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 5,634,000 | 1,715,000 | |||||||||||||||||||||||||||||||
Operating Assets | HHC 2978 Self-Storage Facility | Construction Loan Payable | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Number of extension options | item | 2 | ||||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Operating Assets | HHC 2978 Self-Storage Facility | Construction Loan Payable | One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 2.60% | ||||||||||||||||||||||||||||||||
Operating Assets | Outlet Collection at Riverwalk | Construction Loan Payable | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 64,400,000 | ||||||||||||||||||||||||||||||||
Maximum percent recourse | 50.00% | ||||||||||||||||||||||||||||||||
Maximum percentage recourse upon achievement of conditions | 25.00% | ||||||||||||||||||||||||||||||||
Debt yield to achieve the reduced maximum percentage recourse | 11.00% | ||||||||||||||||||||||||||||||||
Time period of minimum level of tenant sales needed to achieve the reduced maximum percent recourse | 12 years | ||||||||||||||||||||||||||||||||
Number of extension options | Option | 1 | ||||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Recourse on loan (as a percent) | 50.00% | ||||||||||||||||||||||||||||||||
Operating Assets | Outlet Collection at Riverwalk | Construction Loan Payable | One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Variable rate basis (as a percent) | 2.75% | ||||||||||||||||||||||||||||||||
Operating Assets | One Mall North | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.74% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 14,463,000 | ||||||||||||||||||||||||||||||||
Operating Assets | Constellation | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.07% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 24,200,000 | ||||||||||||||||||||||||||||||||
Operating Assets | 10-60 Columbia and One mall north Building | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.33% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 114,500,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 80,000,000 | 80,000,000 | |||||||||||||||||||||||||||||||
Aggregate principal amount of debt issued | $ 94,500,000 | ||||||||||||||||||||||||||||||||
Operating Assets | One mall north Building,10-60 and 70 Columbia corporate Center | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Facility Amount | $ 114,500,000 | ||||||||||||||||||||||||||||||||
Number of notes in master facility | item | 3 | ||||||||||||||||||||||||||||||||
Number of master facilities | facility | 1 | ||||||||||||||||||||||||||||||||
Strategic Developments | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 33,604,000 | 160,847,000 | |||||||||||||||||||||||||||||||
Strategic Developments | Summerlin | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Aggregate principal amount of debt issued | $ 64,600,000 | ||||||||||||||||||||||||||||||||
Strategic Developments | Summerlin | Wall Street Journal Prime | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 0.40% | ||||||||||||||||||||||||||||||||
Strategic Developments | Aristocrat | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.90% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 31,118,000 | ||||||||||||||||||||||||||||||||
Strategic Developments | Two Summerlin | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.90% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 33,432,000 | ||||||||||||||||||||||||||||||||
Strategic Developments | Waiea And Anaha Condominiums | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 8.24% | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 160,847,000 | ||||||||||||||||||||||||||||||||
Repayments of debt | $ 195,300,000 | ||||||||||||||||||||||||||||||||
Strategic Developments | Ke Kilohana | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 4.74% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 142,656,000 | ||||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Strategic Developments | Ke Kilohana | One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 3.25% | ||||||||||||||||||||||||||||||||
Strategic Developments | Ae'o | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 5.49% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 230,000,000 | ||||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | $ 33,603,000 | ||||||||||||||||||||||||||||||||
Number of extension options | Option | 2 | ||||||||||||||||||||||||||||||||
Option to extend, term | 1 year | ||||||||||||||||||||||||||||||||
Strategic Developments | Ae'o | One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 4.00% | ||||||||||||||||||||||||||||||||
Strategic Developments | Ae'o | Floor | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 4.50% | ||||||||||||||||||||||||||||||||
Strategic Developments | Ae'o | Interest Rate Cap | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 2.50% | ||||||||||||||||||||||||||||||||
Strategic Developments | 100 Fellowship Drive | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 2.99% | ||||||||||||||||||||||||||||||||
Facility Amount | $ 51,400,000 | $ 51,426,000 | |||||||||||||||||||||||||||||||
Mortgages, notes, and loans payable, gross | 1,000 | ||||||||||||||||||||||||||||||||
Strategic Developments | 100 Fellowship Drive | One Month LIBOR | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 1.50% | ||||||||||||||||||||||||||||||||
Strategic Developments | Lake Woodlands Crossing Retail | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Aggregate principal amount of debt issued | $ 15,500,000 | ||||||||||||||||||||||||||||||||
Interest rate margin (as a percent) | 1.80% | ||||||||||||||||||||||||||||||||
Maximum percent recourse | 50.00% | ||||||||||||||||||||||||||||||||
Maximum percentage recourse upon achievement of conditions | 15.00% | ||||||||||||||||||||||||||||||||
Percentage leased to achieve reduced recourse percentage upon completion | 90.00% | ||||||||||||||||||||||||||||||||
Corporate | |||||||||||||||||||||||||||||||||
Mortgages, notes and loans payable | |||||||||||||||||||||||||||||||||
Loss on redemption of senior notes due 2021 | $ 46,410,000 |
MORTGAGES, NOTES AND LOANS PA65
MORTGAGES, NOTES AND LOANS PAYABLE, NET (Contractual Obligations Based on Final Maturity Dates) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Mortgages, notes and loans payable principal payments | ||
2,018 | $ 78,207 | |
2,019 | 256,338 | |
2,020 | 178,836 | |
2,021 | 467,010 | |
2,022 | 251,086 | |
Thereafter | 1,646,312 | |
Total | 2,877,789 | |
Deferred financing costs, net and unamortized underwriting fees | (19,844) | |
Total | $ 2,857,945 | $ 2,690,747 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 22, 2017 | Feb. 27, 2012 | Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2016 |
Federal income tax rate | 35.00% | |||||
One-time transition benefit | $ 101,700 | |||||
Section 382 Rights Agreement term | 3 years | |||||
Gross deferred tax assets | 172,371 | $ 294,487 | ||||
Deferred tax liabilities | (315,950) | (476,797) | ||||
Valuation allowance | (17,271) | (18,635) | ||||
Interest expense related to unrecognized tax benefits | $ 100 | |||||
Unrecognized tax benefits, excluding accrued interest, which could significantly increase or decrease during the next twelve months | $ 0 | $ 0 | ||||
Scenario Forecast | ||||||
Federal income tax rate | 21.00% |
INCOME TAXES (Provision for (Be
INCOME TAXES (Provision for (Benefit from) Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Provision for (benefit from) income taxes | |||
Current | $ (2,338) | $ 4,752 | $ 2,849 |
Deferred income taxes | (43,463) | 113,698 | 21,152 |
Provision for (benefit from) income taxes | $ (45,801) | $ 118,450 | $ 24,001 |
INCOME TAXES (Computation of In
INCOME TAXES (Computation of Income Tax Expense by Applying Federal Corporate Tax Rate) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of income tax expense computed by applying the Federal corporate tax rate to the provision for income taxes | |||
Tax at statutory rate on earnings from continuing operations before income taxes | $ 42,911 | $ 112,264 | $ 52,751 |
(Decrease) increase in valuation allowance, net | (175) | (1,326) | 1,742 |
State income taxes, net of Federal income tax benefit | 1,408 | 4,004 | 267 |
Tax benefit from Tax Act | (101,688) | ||
Tax expense (benefit) from other change in rates, prior period adjustments and other permanent differences | 2,941 | (4,591) | (7,361) |
Tax benefit on equity compensation | (6,403) | ||
Non-deductible warrant liability (gain) loss | 15,205 | 8,544 | (20,412) |
Uncertain tax position (benefit) expense, excluding interest | (407) | (2,483) | |
Uncertain tax position interest, net of Federal income tax benefit | (38) | (503) | |
Provision for (benefit from) income taxes | $ (45,801) | $ 118,450 | $ 24,001 |
INCOME TAXES (Summary of Amount
INCOME TAXES (Summary of Amounts and Expiration Dates of Operating Loss and Tax Credit Carryforwards) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Operating Loss Carryforwards [Line Items] | |
Tax credit carryforwards - Federal AMT | $ 3,699 |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 147,059 |
State | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 327,221 |
INCOME TAXES (Summary of Tax Ef
INCOME TAXES (Summary of Tax Effects and Temporary Differences Included in Net Deferred Tax Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Operating and Strategic Development properties, primary differences in basis of assets and liabilities | $ 92,210 | $ 208,862 |
Interest deduction carryforwards | 29,247 | 54,759 |
Operating loss and tax credit carryforwards | 50,914 | 30,866 |
Total deferred tax assets | 172,371 | 294,487 |
Valuation allowance | (17,271) | (18,635) |
Total net deferred tax assets | 155,100 | 275,852 |
Deferred tax liabilities: | ||
Property Associated with Master Planned Communities, primarily differences in the tax basis of land assets and treatment of interest and other costs | (157,181) | (262,572) |
Operating and Strategic Development properties, primarily differences in basis of assets and liabilities | (60,430) | (40,915) |
Deferred income | (98,339) | (173,310) |
Total deferred tax liabilities | (315,950) | (476,797) |
Net deferred tax liabilities | $ (160,850) | $ (200,945) |
INCOME TAXES (Reconciliation of
INCOME TAXES (Reconciliation of Changes to Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Unrecognized tax benefits | ||
Unrecognized Tax Benefits, Beginning Balance | $ 36,524 | $ 184,200 |
Gross decreases - tax positions in prior periods | $ (36,524) | (147,676) |
Unrecognized Tax Benefits, Ending Balance | $ 36,524 |
COMMITMENTS AND CONTINGENCIES72
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Jun. 27, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 |
Commitments | |||||
Letters of Credit Outstanding, Amount | $ 13,800,000 | $ 6,500,000 | $ 13,800,000 | ||
Amount of outstanding surety bonds | 88,500,000 | 112,400,000 | 88,500,000 | ||
South Street Seaport Ground Lease | |||||
Commitments | |||||
Annual fixed rent | $ 1,200,000 | ||||
Annual rent escalation rate (as a percent) | 3.00% | ||||
Additional annual rent payments to be made through the term of the lease | $ 210,000 | ||||
Damage Due to Flooding | |||||
Commitments | |||||
Insurance recoveries collected | $ 54,800,000 | ||||
Gain on insurance recoveries, recognized in other income | $ 700,000 | $ 6,200,000 | $ 300,000 |
COMMITMENTS AND CONTINGENCIES73
COMMITMENTS AND CONTINGENCIES (Minimum Rentals Under Non-Cancelable Operating Leases) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Contractual obligations relating to long-term commitments | ||||
Contractual rental expense, including participation rent | $ 8,600 | $ 8,400 | $ 9,100 | |
Ground lease payments | ||||
2,018 | 8,769 | |||
2,019 | 8,119 | |||
2,020 | 8,259 | |||
2,021 | 8,097 | |||
2,022 | 7,430 | |||
Subsequent/Other | 314,129 | |||
Total | $ 354,803 | |||
Downtown columbia | ||||
Contractual obligations relating to long-term commitments | ||||
TIF bonds authorized amount | $ 90,000 | |||
TIF bonds receivable | 48,200 | |||
Downtown columbia | Guarantee Obligations [Member] | ||||
Contractual obligations relating to long-term commitments | ||||
Guarantee amount | $ 1,000 | |||
Period for guarantee | 36 months |
OTHER ASSETS AND LIABILITIES (D
OTHER ASSETS AND LIABILITIES (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Mar. 16, 2017 | |
Prepaid Expenses and Other Assets | ||||||
Condominium deposits | $ 82,605 | $ 193,197 | ||||
Condominium receivables | 158,516 | 210,219 | ||||
SID receivables | 26,430 | 61,603 | ||||
Straight-line rent | 39,136 | 31,518 | ||||
Equipment, net of accumulated depreciation of $6.9 million and $4.9 million, respectively | 16,955 | 17,556 | ||||
Other equipment accumulated depreciation | 6,900 | 5,300 | ||||
Security and escrow deposits | 37,585 | 61,304 | ||||
Tenant incentives and other receivables | 8,482 | 8,773 | ||||
Prepaid expenses | 11,731 | 11,177 | ||||
Federal income tax receivable | 2,198 | 15,763 | ||||
Intangibles | 34,802 | 4,046 | ||||
Interest rate swap derivative asset | 4,470 | |||||
Other | 19,242 | 13,902 | ||||
Total prepaid expenses and other assets | $ 473,268 | 666,516 | ||||
Number of IRS tax refunds | item | 2 | |||||
Reimbursement from a tenant | $ 45,814 | 44,330 | $ 39,542 | |||
Accounts Payable and Accrued Expenses | ||||||
Construction payables | 217,838 | 207,917 | ||||
Deferred income | 53,337 | 85,158 | ||||
Condominium deposit liabilities | 55,975 | 117,015 | ||||
Accounts payable and accrued expenses | 35,887 | 33,050 | ||||
Tenant and other deposits | 18,937 | 28,559 | ||||
Accrued interest | 20,322 | 16,897 | ||||
Accrued payroll and other employee liabilities | 41,236 | 36,937 | ||||
Accrued real estate taxes | 22,289 | 16,726 | ||||
Interest Rate Swaps | (149) | |||||
Interest rate swaps | 5,961 | |||||
Straight-line ground rent liability | 14,944 | 13,126 | ||||
Above-market ground leases | 293 | 1,762 | ||||
Other | 34,699 | 15,012 | ||||
Total accounts payable and accrued expenses | 521,718 | 572,010 | ||||
Increase in accounts payable and accrued expenses | $ (50,300) | |||||
Senior Notes 6.875 Percent Due 2021 | ||||||
Accounts Payable and Accrued Expenses | ||||||
Interest rate (as a percent) | 6.875% | 6.875% | ||||
Las Vegas 51s | ||||||
Prepaid Expenses and Other Assets | ||||||
Voting interest acquired (as a percent) | 50.00% | |||||
Prepaid Expenses and Other Current Assets | ||||||
Prepaid Expenses and Other Assets | ||||||
Increase (Decrease) in Prepaid Expense | $ 600 | |||||
Decrease in prepaid expenses and other assets | (193,200) | |||||
Increase (Decrease) in straight line rent | 7,600 | |||||
Increase (decrease) in derivative assets | 4,500 | |||||
Decrease in condominium deposits | 110,600 | |||||
Increase (Decrease) in security and escrow deposits | 23,700 | |||||
Other net | 5,300 | |||||
Increase (Decrease) in in-place leases | 5,200 | |||||
decrease in federal income tax receivable | (13,600) | |||||
Decrease in other receivables | 2,000 | |||||
Prepaid Expenses and Other Current Assets | Las Vegas 51s | ||||||
Prepaid Expenses and Other Assets | ||||||
Increase (decrease) in intangibles | $ 30,800 | |||||
Voting interest acquired (as a percent) | 50.00% | |||||
Accounts Payable and Accrued Liabilities | ||||||
Accounts Payable and Accrued Expenses | ||||||
Decrease in deferred income | $ (31,800) | |||||
Other increases in other payables | (19,700) | |||||
Accrued common costs | 13,400 | |||||
Other immaterial decreases | (9,600) | |||||
Increase Decrease in Straight-line Ground Rent | 1,800 | |||||
Increase in interest rate swap liability | 6,100 | |||||
Waiea And Anaha Condominiums | ||||||
Prepaid Expenses and Other Assets | ||||||
Increase (Decrease) in condominium receivables | 51,700 | |||||
Summerlin | Prepaid Expenses and Other Current Assets | ||||||
Prepaid Expenses and Other Assets | ||||||
decrease in Special Improvement District receivables | 35,200 | |||||
Ward Village | Accounts Payable and Accrued Liabilities | ||||||
Accounts Payable and Accrued Expenses | ||||||
Decrease in condominium deposits liability | (61,000) | |||||
Decrease in construction payables | 9,900 | |||||
Leases, Acquired-in-Place | ||||||
Prepaid Expenses and Other Assets | ||||||
Net carrying amount | 10,821 | 16,015 | ||||
Ground Leases below Market | ||||||
Prepaid Expenses and Other Assets | ||||||
Net carrying amount | 18,647 | 18,986 | ||||
Tenant Leases above Market | ||||||
Prepaid Expenses and Other Assets | ||||||
Net carrying amount | 1,648 | 2,457 | ||||
Ground Leases above Market | ||||||
Prepaid Expenses and Other Assets | ||||||
Net carrying amount | 1,648 | $ 2,457 | ||||
Ground Leases above Market | Accounts Payable and Accrued Liabilities | ||||||
Accounts Payable and Accrued Expenses | ||||||
Other immaterial decreases | $ (1,500) | |||||
Scenario Forecast | Waiea And Anaha Condominiums | ||||||
Prepaid Expenses and Other Assets | ||||||
Decrease receivable | $ 4,400 | |||||
Scenario Forecast | Ae'o | ||||||
Prepaid Expenses and Other Assets | ||||||
Decrease receivable | $ 151,500 | |||||
Scenario Forecast | Ke Kilohana | ||||||
Prepaid Expenses and Other Assets | ||||||
Decrease receivable | $ 2,700 |
INTANGIBLES (Details)
INTANGIBLES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible assets and liabilities | |||
Indefinite lived intangibles | $ 25,028 | ||
Goodwill | 1,307 | $ 1,307 | |
Total indefinite lived intangibles | 26,335 | 1,307 | |
Total amortizing intangibles | 35,523 | 33,882 | |
Amortization/accretion of intangible assets and liabilities | 8,900 | 6,300 | $ 10,500 |
Estimated future amortization | |||
2,018 | 5,000 | ||
2,019 | 3,700 | ||
2,020 | 2,300 | ||
2,021 | 1,700 | ||
Thereafter | 22,900 | ||
Other Intangible Asset | |||
Intangible assets and liabilities | |||
Gross Assets | 10,278 | 3,038 | |
Accumulated Amortization | (1,812) | (299) | |
Net Carrying Amount | 8,466 | 2,739 | |
Leases, Acquired-in-Place | |||
Intangible assets and liabilities | |||
Gross Assets | 22,304 | 37,567 | |
Accumulated Amortization | (11,483) | (21,552) | |
Net Carrying Amount | 10,821 | 16,015 | |
Tenant Leases above Market | |||
Intangible assets and liabilities | |||
Gross Assets | 4,171 | 4,879 | |
Accumulated Amortization | (2,523) | (2,422) | |
Net Carrying Amount | 1,648 | 2,457 | |
Tenant Leases below Market | |||
Intangible assets and liabilities | |||
Gross Liability | (6,454) | (6,618) | |
Accumulated Accretion | 2,688 | 2,065 | |
Net Carrying Amount | 3,766 | 4,553 | |
Ground Leases above Market | |||
Intangible assets and liabilities | |||
Indefinite lived intangible liabilities | (293) | ||
Gross Liability | (1,955) | ||
Accumulated Accretion | 193 | ||
Net Carrying Amount | 1,648 | 2,457 | |
Net Carrying Amount | 1,762 | ||
Ground Leases below Market | |||
Intangible assets and liabilities | |||
Gross Assets | 23,096 | 23,096 | |
Accumulated Amortization | (4,449) | (4,110) | |
Net Carrying Amount | $ 18,647 | $ 18,986 |
DERIVATIVE INSTRUMENTS AND HE76
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Summary of the Notional Amount and Fair Value of Derivatives) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair value of derivative instruments | ||
Total fair value derivative assets | $ 4,470 | $ 4,136 |
Total fair value derivative liabilities | (5,961) | (3,987) |
Ineffective portion | 700 | |
Interest rate swap contracts | Designated as Hedging Instrument | Accounts Payable and Accrued Liabilities | Fixed Interest Rate 2.96%, Maturing October 2019 | ||
Fair value of derivative instruments | ||
Notional Amount | $ 18,926 | |
Fixed Interest Rate | 2.96% | |
Total fair value derivative liabilities | $ (286) | (740) |
Interest rate swap contracts | Designated as Hedging Instrument | Accounts Payable and Accrued Liabilities | Fixed Interest Rate 1.66%, Maturing May 2020 | ||
Fair value of derivative instruments | ||
Notional Amount | $ 40,000 | |
Fixed Interest Rate | 1.66% | |
Total fair value derivative assets | $ 299 | |
Total fair value derivative liabilities | (143) | |
Interest rate swap contracts | Designated as Hedging Instrument | Accounts Payable and Accrued Liabilities | Fixed Interest Rate 1.14%, Maturing September 2021 | ||
Fair value of derivative instruments | ||
Notional Amount | $ 119,359 | |
Fixed Interest Rate | 1.14% | |
Total fair value derivative assets | $ 4,007 | 3,368 |
Interest rate swap contracts | Designated as Hedging Instrument | Accounts Payable and Accrued Liabilities | Fixed Interest Rate 2.65%, Maturing December 2027 | ||
Fair value of derivative instruments | ||
Notional Amount | $ 50,000 | |
Fixed Interest Rate | 2.65% | |
Total fair value derivative liabilities | $ (1,124) | (610) |
Interest rate swap contracts | Designated as Hedging Instrument | Accounts Payable and Accrued Liabilities | Fixed Interest Rate 2.68%, Maturing December 2027 | ||
Fair value of derivative instruments | ||
Notional Amount | $ 100,000 | |
Fixed Interest Rate | 2.68% | |
Total fair value derivative liabilities | $ (2,509) | (1,479) |
Interest rate swap contracts | Designated as Hedging Instrument | Accounts Payable and Accrued Liabilities | Fixed Interest Rate 2.62%, Maturing December 2027 | ||
Fair value of derivative instruments | ||
Notional Amount | $ 100,000 | |
Fixed Interest Rate | 2.62% | |
Total fair value derivative liabilities | $ (2,042) | (1,015) |
Interest Rate Cap | Designated as Hedging Instrument | Accounts Payable and Accrued Liabilities | Fixed Interest Rate 5.00%, Maturing August 2017 | ||
Fair value of derivative instruments | ||
Notional Amount | $ 75,000 | |
Fixed Interest Rate | 5.00% | |
Interest Rate Cap | Designated as Hedging Instrument | Accounts Payable and Accrued Liabilities | Fixed Interest Rate 5.00 Maturing August 2019 | ||
Fair value of derivative instruments | ||
Notional Amount | $ 100,000 | |
Fixed Interest Rate | 5.00% | |
Interest Rate Cap | Not Designated as Hedging Instrument, Economic Hedge | Accounts Payable and Accrued Liabilities | Fixed Interest Rate 2.50%, Maturing December 2019 | ||
Fair value of derivative instruments | ||
Notional Amount | $ 230,000 | |
Fixed Interest Rate | 2.50% | |
Total fair value derivative assets | $ 164 | $ 768 |
Interest (income) expense | $ (600) |
DERIVATIVE INSTRUMENTS AND HE77
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Impact of Financial Instruments on Statement of Operations) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest Expense [Member] | |||
Effect of the Company's derivative financial instruments on the income statement | |||
Amount of Gain (Loss) Reclassified from AOCI into Earnings | $ (905) | $ (1,364) | $ (1,745) |
Cash Flow Hedging | Interest rate swap contracts | |||
Effect of the Company's derivative financial instruments on the income statement | |||
Amount of Gain (Loss) Recognized in OCI | $ (726) | $ 831 | $ (1,705) |
ACCUMULATED OTHER COMPREHENSI78
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Summary of Changes in Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |||
Balance at the beginning of the period | $ (6,786) | $ (7,889) | |
Other comprehensive income (loss) before reclassifications | (1,084) | (261) | |
Loss reclassified from accumulated other comprehensive loss to net income (loss) | 905 | 1,364 | |
Other comprehensive income (loss) | (179) | 1,103 | $ (177) |
Balance at the end of the period | $ (6,965) | $ (6,786) | $ (7,889) |
ACCUMULATED OTHER COMPREHENSI79
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Summary of Amounts Reclassified Out of AOCI) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reclassifications out of accumulated other comprehensive income (loss) | ||
Loss reclassified from accumulated other comprehensive loss to net income (loss) | $ 905 | $ 1,364 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||
Reclassifications out of accumulated other comprehensive income (loss) | ||
Loss reclassified from accumulated other comprehensive loss to net income (loss) | 905 | 1,364 |
Interest rate swap contracts | Reclassification out of Accumulated Other Comprehensive Income [Member] | Provision For Income Taxes | ||
Reclassifications out of accumulated other comprehensive income (loss) | ||
Loss reclassified from accumulated other comprehensive loss to net income (loss) | (538) | (811) |
Losses on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income [Member] | Interest Expense [Member] | ||
Reclassifications out of accumulated other comprehensive income (loss) | ||
Loss reclassified from accumulated other comprehensive loss to net income (loss) | $ 1,443 | $ 2,175 |
STOCK-BASED PLANS (Summary of S
STOCK-BASED PLANS (Summary of Stock Option Activity) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 09, 2010 | |
Stock Options | ||||
Shares of common stock reserved for issuance | 3,698,050 | |||
Stock options outstanding at the beginning of the period (in shares) | 1,176,640 | 1,086,040 | 1,046,490 | |
Granted (in shares) | 58,000 | 162,100 | 117,000 | |
Exercised (in shares) | (395,482) | (3,000) | ||
Forfeited (in shares) | (54,976) | (68,500) | (77,450) | |
Expired (in shares) | (1,000) | |||
Stock options outstanding at the end of the period (in shares) | 783,182 | 1,176,640 | 1,086,040 | |
Stock options exercisable at the end of the period (in shares) | 306,182 | |||
Remaining unvested options outstanding and expected to vest (in shares) | 772,990 | |||
Weighted Average Exercise Price | ||||
Stock options outstanding at the beginning of the period (in dollars per share) | $ 78.87 | $ 77.11 | $ 72.61 | |
Granted (in dollars per share) | 119.85 | 109.42 | 134.24 | |
Exercised (in dollars per share) | 58.81 | 60.33 | ||
Forfeited (in dollars per share) | 105.17 | 122.93 | 103.84 | |
Expired (in dollars per share) | 57.77 | |||
Stock options outstanding at the end of the period (in dollars per share) | 90.22 | $ 78.87 | $ 77.11 | |
Stock options exercisable at the end of the period (in dollars per share) | 59.96 | |||
Stock options expected to vest at the end of the period (in dollars per share) | $ 59.96 | |||
Weighted average remaining contractual term of stock options outstanding | 5 years 8 months 12 days | |||
Weighted average remaining contractual term of stock options exercisable | 3 years 7 months 6 days | |||
Weighted average remaining contractual term of stock options expected to vest | 5 years 8 months 12 days | |||
Aggregate intrinsic value | $ 33,454,510 | |||
Aggregate intrinsic value of stock options exercisable | 21,833,176 | |||
Aggregate intrinsic value of stock options expected to vest | 33,302,071 | |||
Significant assumptions used in Black-Scholes option-pricing model | ||||
Stock based compensation expense | $ 7,385,000 | $ 6,707,000 | $ 7,284,000 | |
Maximum | ||||
Stock Options | ||||
Maximum number of shares available for future grant | 2,032,473 | |||
Stock Options | ||||
Stock Options | ||||
Share based compensation costs capitalized | $ 1,100,000 | $ 2,600,000 | $ 2,500,000 | |
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | $ 90.22 | |||
Number Outstanding (in shares) | 783,182 | |||
Weighted Average Remaining Contractual Term | 5 years 8 months 12 days | |||
Number Exercisable (in shares) | 306,182 | |||
Significant assumptions used in Black-Scholes option-pricing model | ||||
Weighted average grant date fair value (in dollars per share) | $ 34.51 | $ 36.55 | $ 44.45 | |
Weighted-average expected life of options | 8 years 4 months 24 days | 7 years 4 months 24 days | 7 years 6 months | |
Weighted-average risk-free interest rate (as a percent) | 2.20% | 1.80% | 2.00% | |
Weighted-average expected volatility (as a percent) | 22.80% | 33.10% | 26.10% | |
Expiration period | 10 years | |||
Unamortized stock option expense | $ 7,900,000 | |||
Stock based compensation expense | $ 8,400,000 | $ 9,400,000 | $ 9,800,000 | |
Stock Options | Minimum | ||||
Significant assumptions used in Black-Scholes option-pricing model | ||||
Exercisable period | 5 years | |||
Stock Options | General and Administrative Expense | ||||
Significant assumptions used in Black-Scholes option-pricing model | ||||
Stock based compensation expense | $ 1,600,000 | $ 2,900,000 | $ 2,600,000 | |
Stock Options | $46.49 - 55.82 | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | $ 51.39 | |||
Number Outstanding (in shares) | 23,290 | |||
Weighted Average Remaining Contractual Term | 3 years 8 months 12 days | |||
Number Exercisable (in shares) | 23,290 | |||
Stock Options | $46.49 - 55.82 | Minimum | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | $ 46.49 | |||
Stock Options | $46.49 - 55.82 | Maximum | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | 55.82 | |||
Stock Options | $57.77 - 60.33 | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | $ 58.06 | |||
Number Outstanding (in shares) | 242,418 | |||
Weighted Average Remaining Contractual Term | 3 years 3 months 18 days | |||
Number Exercisable (in shares) | 242,418 | |||
Stock Options | $57.77 - 60.33 | Minimum | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | $ 57.77 | |||
Stock Options | $57.77 - 60.33 | Maximum | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | 60.33 | |||
Stock Options | $61.64 - 69.75 | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | $ 65.93 | |||
Number Outstanding (in shares) | 109,550 | |||
Weighted Average Remaining Contractual Term | 4 years 4 months 24 days | |||
Number Exercisable (in shares) | 29,550 | |||
Stock Options | $61.64 - 69.75 | Minimum | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | $ 61.64 | |||
Stock Options | $61.64 - 69.75 | Maximum | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | 69.75 | |||
Stock Options | $81.80 - 110.50 | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | $ 98.13 | |||
Number Outstanding (in shares) | 94,424 | |||
Weighted Average Remaining Contractual Term | 6 years 1 month 6 days | |||
Number Exercisable (in shares) | 9,024 | |||
Stock Options | $81.80 - 110.50 | Minimum | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | $ 81.80 | |||
Stock Options | $81.80 - 110.50 | Maximum | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | 110.50 | |||
Stock Options | $112.64 - 151.72 | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | $ 124.07 | |||
Number Outstanding (in shares) | 313,500 | |||
Weighted Average Remaining Contractual Term | 8 years | |||
Number Exercisable (in shares) | 1,900 | |||
Stock Options | $112.64 - 151.72 | Minimum | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | $ 112.64 | |||
Stock Options | $112.64 - 151.72 | Maximum | ||||
Exercise price range of stock options | ||||
Exercise Price (in dollars per share) | $ 151.72 |
STOCK-BASED PLANS (Summary of R
STOCK-BASED PLANS (Summary of Restricted Stock Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted Average Grant Date Fair Value | ||||
Stock based compensation expense | $ 7,385 | $ 6,707 | $ 7,284 | |
Restricted Stock | ||||
Restricted stock activity | ||||
Vesting period | 5 years | |||
Restricted stock outstanding at the beginning of the period (in shares) | 289,112 | 242,556 | 172,690 | |
Granted (in shares) | 177,385 | 136,198 | 81,581 | |
Vested (in shares) | (68,819) | (37,670) | (7,546) | |
Forfeited (in shares) | (43,482) | (51,972) | (4,169) | |
Restricted stock outstanding at the end of the period (in shares) | 354,196 | 289,112 | 242,556 | 172,690 |
Weighted Average Grant Date Fair Value | ||||
Restricted stock outstanding at the beginning of the period (in dollars per share) | $ 88.88 | $ 100.15 | $ 121.81 | |
Granted (in dollars per share) | 85.81 | 67.80 | $ 121.81 | |
Vested (in dollars per share) | 88.58 | 83.47 | 147.56 | |
Forfeited (in dollars per share) | 76.10 | 90.14 | 101.33 | |
Restricted stock outstanding at the end of the period (in dollars per share) | $ 88.97 | $ 88.88 | $ 100.15 | $ 121.81 |
Fair value of restricted stock vested | $ 8,900 | |||
Unamortized restricted stock expense | $ 20,300 | |||
Weighted-average period for recognition of unamortized restricted stock expense | 4 years 2 months 12 days | |||
Restricted Stock | General and Administrative Expense | ||||
Weighted Average Grant Date Fair Value | ||||
Stock based compensation expense | $ 5,700 | $ 4,500 | $ 4,700 | |
Stock Options | ||||
Weighted Average Grant Date Fair Value | ||||
Stock based compensation expense | 8,400 | 9,400 | 9,800 | |
Share based compensation costs capitalized | $ 1,100 | 2,600 | 2,500 | |
Weighted-average period for recognition of unamortized restricted stock expense | 3 years | |||
Stock Options | General and Administrative Expense | ||||
Weighted Average Grant Date Fair Value | ||||
Stock based compensation expense | $ 1,600 | $ 2,900 | $ 2,600 |
RENTALS UNDER OPERATING LEASE82
RENTALS UNDER OPERATING LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Total Minimum Rent | |||
2,018 | $ 160,878 | ||
2,019 | 173,404 | ||
2,020 | 163,048 | ||
2,021 | 166,703 | ||
2,022 | 165,703 | ||
Subsequent | 1,027,115 | ||
Total | 1,856,851 | ||
Percentage rent in lieu of fixed minimum rent | 1,500 | $ 2,400 | $ 3,500 |
Overage rent | $ 2,800 | $ 3,600 | $ 3,600 |
SEGMENTS (Summary of Segment Op
SEGMENTS (Summary of Segment Operating Results) (Details) $ in Thousands | Mar. 16, 2017USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Segments reporting | ||||||||||||
Number of reportable segments | segment | 3 | |||||||||||
Land sales | $ 248,595 | $ 215,318 | $ 187,399 | |||||||||
Builder price participation | 22,835 | 21,386 | 26,846 | |||||||||
Minimum rents | 183,025 | 173,268 | 150,760 | |||||||||
Other land revenues | 28,166 | 16,232 | 14,803 | |||||||||
Other rental and property revenues | 31,414 | 16,585 | 27,080 | |||||||||
Total revenues | $ 300,983 | $ 258,736 | $ 308,639 | $ 231,762 | $ 278,546 | $ 242,265 | $ 273,514 | $ 240,680 | 1,100,120 | 1,035,005 | 797,088 | |
Tenant recoveries | 45,814 | 44,330 | 39,542 | |||||||||
Condominium rights and unit sales | 464,251 | 485,634 | 305,284 | |||||||||
Hospitality revenues | 76,020 | 62,252 | 45,374 | |||||||||
Cost of sales - land | 121,116 | 95,727 | 88,065 | |||||||||
Other property operating costs | 91,729 | 65,978 | 72,751 | |||||||||
Rental property real estate taxes | 29,185 | 26,847 | 24,138 | |||||||||
Rental property maintenance costs | 13,432 | 12,392 | 10,712 | |||||||||
Hospitality operating costs | 56,362 | 49,359 | 34,839 | |||||||||
Provision for (recovery of) doubtful accounts | 2,710 | 5,664 | 4,030 | |||||||||
Demolition costs | 1,923 | 2,212 | 3,297 | |||||||||
Provision for impairment | 35,734 | |||||||||||
Development-related marketing costs | 20,504 | 22,184 | 25,466 | |||||||||
Depreciation and amortization | 132,252 | 95,864 | 98,997 | |||||||||
Other income, net | (54,615) | (116,268) | (1,829) | |||||||||
Interest income | (4,043) | (1,359) | (586) | |||||||||
Equity in earnings in Real Estate and Other Affiliates | (25,498) | (56,818) | (3,721) | |||||||||
Gain on sale of 80 South Street Assemblage | (51,367) | (140,549) | ||||||||||
Loss on redemption of senior notes due 2021 | $ 46,400 | 46,410 | ||||||||||
Operating Segments | ||||||||||||
Segments reporting | ||||||||||||
REP segment EBT | 330,728 | 458,518 | 202,300 | |||||||||
Operating Segments | Master Planned Communities | ||||||||||||
Segments reporting | ||||||||||||
Land sales | 248,595 | 215,318 | 187,399 | |||||||||
Builder price participation | 22,835 | 21,386 | 26,846 | |||||||||
Minimum rents | (8) | 384 | 797 | |||||||||
Other land revenues | 28,124 | 16,192 | 14,778 | |||||||||
Other rental and property revenues | (3) | 24 | 45 | |||||||||
Total revenues | 299,543 | 253,304 | 229,865 | |||||||||
Cost of sales - land | 121,116 | 95,727 | 88,065 | |||||||||
Land sales operations | 38,777 | 42,371 | 44,907 | |||||||||
Provision for (recovery of) doubtful accounts | 2 | |||||||||||
Depreciation and amortization | 323 | 311 | 640 | |||||||||
Other income, net | (3,500) | |||||||||||
Interest income | (4) | (59) | (60) | |||||||||
Interest expense | (24,288) | (21,026) | (18,053) | |||||||||
Equity in earnings in Real Estate and Other Affiliates | (23,234) | (43,501) | ||||||||||
Total expenses | 109,192 | 73,823 | 115,499 | |||||||||
REP segment EBT | 190,351 | 179,481 | 114,366 | |||||||||
Operating Segments | Operating Assets | ||||||||||||
Segments reporting | ||||||||||||
Minimum rents | 182,468 | 172,437 | 149,064 | |||||||||
Other rental and property revenues | 23,701 | 16,170 | 25,453 | |||||||||
Total revenues | 327,555 | 295,165 | 259,306 | |||||||||
Tenant recoveries | 45,366 | 44,306 | 39,415 | |||||||||
Hospitality revenues | 76,020 | 62,252 | 45,374 | |||||||||
Other property operating costs | 71,748 | 60,506 | 68,078 | |||||||||
Rental property real estate taxes | 26,523 | 24,439 | 21,856 | |||||||||
Rental property maintenance costs | 12,872 | 12,033 | 10,236 | |||||||||
Hospitality operating costs | 56,362 | 49,359 | 34,839 | |||||||||
Provision for (recovery of) doubtful accounts | 2,710 | 5,601 | 3,998 | |||||||||
Demolition costs | 1,605 | 194 | 2,412 | |||||||||
Provision for impairment | 35,734 | |||||||||||
Development-related marketing costs | 3,346 | 947 | 7,934 | |||||||||
Depreciation and amortization | 122,421 | 86,313 | 89,075 | |||||||||
Other income, net | 315 | (4,601) | (524) | |||||||||
Interest income | (22) | (19) | (37) | |||||||||
Interest expense | 61,606 | 50,446 | 32,968 | |||||||||
Equity in earnings in Real Estate and Other Affiliates | (3,267) | (2,802) | (1,883) | |||||||||
Total expenses | 356,219 | 318,150 | 268,952 | |||||||||
REP segment EBT | (28,664) | (22,985) | (9,646) | |||||||||
Operating Segments | Strategic Developments | ||||||||||||
Segments reporting | ||||||||||||
Minimum rents | 565 | 447 | 899 | |||||||||
Other land revenues | 42 | 40 | 25 | |||||||||
Other rental and property revenues | 7,716 | 391 | 1,582 | |||||||||
Total revenues | 473,022 | 486,536 | 307,917 | |||||||||
Tenant recoveries | 448 | 24 | 127 | |||||||||
Condominium rights and unit sales | 464,251 | 485,634 | 305,284 | |||||||||
Condominium rights and unit cost of sales | 338,361 | 319,325 | 191,606 | |||||||||
Other property operating costs | 19,981 | 5,472 | 4,673 | |||||||||
Rental property real estate taxes | 2,662 | 2,408 | 2,282 | |||||||||
Rental property maintenance costs | 560 | 359 | 476 | |||||||||
Provision for (recovery of) doubtful accounts | (2) | 63 | 32 | |||||||||
Demolition costs | 318 | 2,018 | 885 | |||||||||
Development-related marketing costs | 17,158 | 21,237 | 17,532 | |||||||||
Depreciation and amortization | 1,210 | 2,744 | 3,240 | |||||||||
Other income, net | (108) | (611) | 104 | |||||||||
Interest income | (187) | (500) | (202) | |||||||||
Interest expense | (25,280) | (16,937) | (8,453) | |||||||||
Equity in earnings in Real Estate and Other Affiliates | 550 | (10,515) | (1,838) | |||||||||
Gain on sale of 80 South Street Assemblage | (51,242) | (140,549) | ||||||||||
Total expenses | 303,981 | 184,514 | 210,337 | |||||||||
REP segment EBT | $ 169,041 | $ 302,022 | $ 97,580 | |||||||||
Las Vegas 51s | ||||||||||||
Segments reporting | ||||||||||||
Voting interest acquired (as a percent) | 50.00% | 50.00% |
SEGMENTS (Reconciliation of EBT
SEGMENTS (Reconciliation of EBT to Income (Loss) Before Taxes) (Details) - USD ($) $ in Thousands | Mar. 16, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Reconciliation of REP EBT to GAAP net income (loss) | ||||
General and administrative | $ (89,882) | $ (86,588) | $ (81,345) | |
Warrant liability (loss) gain | (43,443) | (24,410) | 58,320 | |
Gain on acquisition of joint venture partner’s interest | 23,332 | 27,088 | ||
Gain (loss) on disposal of operating assets | 3,868 | (1,117) | 29,073 | |
Corporate gains on sale of properties | 125 | |||
Equity in earnings in Real Estate and Other Affiliates | (25,498) | (56,818) | (3,721) | |
Loss on redemption of senior notes due 2021 | $ (46,400) | (46,410) | ||
Corporate other (expense) income, net | 54,615 | 116,268 | 1,829 | |
Corporate depreciation and amortization | (132,252) | (95,864) | (98,997) | |
Operating Expenses | (936,233) | (824,511) | (680,153) | |
Income before taxes | 120,822 | 320,776 | 150,720 | |
Corporate | ||||
Reconciliation of REP EBT to GAAP net income (loss) | ||||
General and administrative | (89,882) | (86,588) | (81,345) | |
Corporate interest expense, net | (48,700) | (52,460) | (52,995) | |
Warrant liability (loss) gain | (43,443) | (24,410) | 58,320 | |
Gain on acquisition of joint venture partner’s interest | 23,332 | 27,088 | ||
Gain (loss) on disposal of operating assets | 3,868 | (1,117) | 29,073 | |
Equity in earnings in Real Estate and Other Affiliates | (453) | |||
Loss on redemption of senior notes due 2021 | (46,410) | |||
Corporate other (expense) income, net | (45) | 6,241 | 1,409 | |
Corporate depreciation and amortization | (8,298) | (6,496) | (6,042) | |
Operating Expenses | (209,906) | (137,742) | (51,580) | |
Operating Segments | ||||
Reconciliation of REP EBT to GAAP net income (loss) | ||||
REP EBT | 330,728 | 458,518 | 202,300 | |
Master Planned Communities | Operating Segments | ||||
Reconciliation of REP EBT to GAAP net income (loss) | ||||
REP EBT | 190,351 | 179,481 | 114,366 | |
Equity in earnings in Real Estate and Other Affiliates | (23,234) | (43,501) | ||
Corporate other (expense) income, net | 3,500 | |||
Corporate depreciation and amortization | (323) | (311) | (640) | |
Operating Assets | Operating Segments | ||||
Reconciliation of REP EBT to GAAP net income (loss) | ||||
REP EBT | (28,664) | (22,985) | (9,646) | |
Equity in earnings in Real Estate and Other Affiliates | (3,267) | (2,802) | (1,883) | |
Corporate other (expense) income, net | (315) | 4,601 | 524 | |
Corporate depreciation and amortization | (122,421) | (86,313) | (89,075) | |
Strategic Developments | Operating Segments | ||||
Reconciliation of REP EBT to GAAP net income (loss) | ||||
REP EBT | 169,041 | 302,022 | 97,580 | |
Equity in earnings in Real Estate and Other Affiliates | 550 | (10,515) | (1,838) | |
Corporate other (expense) income, net | 108 | 611 | (104) | |
Corporate depreciation and amortization | $ (1,210) | $ (2,744) | $ (3,240) |
SEGMENTS (Reconciliation of Seg
SEGMENTS (Reconciliation of Segment Revenue to Consolidated Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Segment Basis Revenues to GAAP Revenues | |||||||||||
Total revenues | $ 300,983 | $ 258,736 | $ 308,639 | $ 231,762 | $ 278,546 | $ 242,265 | $ 273,514 | $ 240,680 | $ 1,100,120 | $ 1,035,005 | $ 797,088 |
Master Planned Communities | Operating Segments | |||||||||||
Reconciliation of Segment Basis Revenues to GAAP Revenues | |||||||||||
Total revenues | 299,543 | 253,304 | 229,865 | ||||||||
Operating Assets | Operating Segments | |||||||||||
Reconciliation of Segment Basis Revenues to GAAP Revenues | |||||||||||
Total revenues | 327,555 | 295,165 | 259,306 | ||||||||
Strategic Developments | Operating Segments | |||||||||||
Reconciliation of Segment Basis Revenues to GAAP Revenues | |||||||||||
Total revenues | $ 473,022 | $ 486,536 | $ 307,917 |
SEGMENTS (Summary of Assets by
SEGMENTS (Summary of Assets by Segment and Reconciliation of Segment Assets to Total Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 28, 2017 | Dec. 31, 2016 |
Reconciliation of total segment assets to total assets | |||
Assets | $ 6,729,064 | $ 6,367,382 | |
Las Vegas 51s | |||
Reconciliation of total segment assets to total assets | |||
Ownership interest (as a percent) | 50.00% | ||
Constellation | |||
Reconciliation of total segment assets to total assets | |||
Ownership interest (as a percent) | 50.00% | 50.00% | |
Operating Segments | |||
Reconciliation of total segment assets to total assets | |||
Assets | $ 5,999,879 | 5,779,048 | |
Operating Segments | Master Planned Communities | |||
Reconciliation of total segment assets to total assets | |||
Assets | 1,999,090 | 1,982,639 | |
Operating Segments | Operating Assets | |||
Reconciliation of total segment assets to total assets | |||
Assets | 2,489,177 | 2,344,949 | |
Operating Segments | Strategic Developments | |||
Reconciliation of total segment assets to total assets | |||
Assets | 1,511,612 | 1,451,460 | |
Corporate | |||
Reconciliation of total segment assets to total assets | |||
Assets | $ 729,185 | $ 588,334 |
QUARTERLY FINANCIAL INFORMATI87
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | |||||||||||
Total revenues | $ 300,983 | $ 258,736 | $ 308,639 | $ 231,762 | $ 278,546 | $ 242,265 | $ 273,514 | $ 240,680 | $ 1,100,120 | $ 1,035,005 | $ 797,088 |
Operating income | 62,443 | 24,372 | 54,133 | 77,554 | 59,372 | 784 | 73,636 | 192,970 | 218,502 | 326,762 | 118,764 |
Net income | 147,328 | 10,516 | 3,120 | 5,659 | 43,595 | 7,996 | 6,970 | 143,765 | 166,623 | 202,326 | 126,719 |
Net income attributable to common stockholders | $ 149,121 | $ 10,504 | $ 3,120 | $ 5,659 | $ 43,595 | $ 7,973 | $ 6,970 | $ 143,765 | $ 168,404 | $ 202,303 | $ 126,719 |
EARNINGS PER SHARE | |||||||||||
Basic earnings (loss) per share: (in dollars per share) | $ 3.48 | $ 0.25 | $ 0.08 | $ 0.14 | $ 1.10 | $ 0.20 | $ 0.18 | $ 3.64 | $ 4.07 | $ 5.12 | $ 3.21 |
Diluted earnings (loss) per share: (in dollars per share) | $ 3.46 | $ 0.24 | $ 0.07 | $ 0.13 | $ 1.02 | $ 0.19 | $ 0.16 | $ 2.69 | $ 3.91 | $ 4.73 | $ 1.60 |
Weighted average shares outstanding: | |||||||||||
Basic (in shares) | 42,860,000 | 42,845,000 | 40,373,000 | 39,799,000 | 39,502,000 | 39,502,000 | 39,492,000 | 39,473,000 | 41,364 | 39,492 | 39,470 |
Diluted (in shares) | 43,120,000 | 43,267,000 | 43,051,000 | 42,757,000 | 42,753,000 | 42,760,000 | 42,664,000 | 42,400,000 | 43,089 | 42,729 | 42,754 |
Schedule III - REAL ESTATE AN88
Schedule III - REAL ESTATE AND ACCUMLATED DEPRECIATION (Information by Property) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | $ 1,862,806 | |||
Encumbrances | 2,857,945 | |||
Initial Cost | ||||
Land | 2,502,078 | |||
Land | 2,502,963 | |||
Buildings and Improvements | 1,897,867 | |||
Buildings and Improvements | 1,898,894 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | (581,867) | |||
Land | (582,752) | |||
Buildings and Improvements | 1,492,337 | |||
Building and Improvements | 1,536,304 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,920,211 | |||
Land | 1,920,211 | |||
Building and Improvements | 3,435,198 | |||
Buildings and Improvements | 3,390,204 | |||
Total | 5,310,415 | |||
Total | 5,355,409 | $ 4,979,840 | $ 4,774,632 | $ 4,116,556 |
Accumulated Depreciation | (303,617) | |||
Accumulated Depreciation | (321,882) | (245,814) | $ (232,969) | $ (157,182) |
Unamortized bond issuance costs | (6,898) | (5,779) | ||
Deferred Financing Costs | (12,946) | $ (11,934) | ||
Aggregate cost of land, building and improvements for federal income tax purposes | 4,600,000 | |||
Bridgeland | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 65,000 | |||
Initial Cost | ||||
Land | 260,223 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | 198,685 | |||
Buildings and Improvements | 1,960 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 458,908 | |||
Buildings and Improvements | 1,960 | |||
Total | 460,868 | |||
Accumulated Depreciation | (801) | |||
Lakeland Village Center at Bridgeland Cypress, TX | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 11,470 | |||
Initial Cost | ||||
Land | 2,404 | |||
Buildings and Improvements | 11,135 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 3,038 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 2,404 | |||
Buildings and Improvements | 14,173 | |||
Total | 16,577 | |||
Accumulated Depreciation | (335) | |||
American City Building | ||||
Initial Cost | ||||
Buildings and Improvements | 13,534 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 13,534 | |||
Total | 13,534 | |||
Aristocrat | ||||
Initial Cost | ||||
Buildings and Improvements | 15,313 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 15,313 | |||
Total | 15,313 | |||
10 - 70 Columbia Corporate Center | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 100,000 | |||
Initial Cost | ||||
Land | 24,685 | |||
Buildings and Improvements | 94,824 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 18,680 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 24,685 | |||
Buildings and Improvements | 113,504 | |||
Total | 138,189 | |||
Accumulated Depreciation | (12,067) | |||
Columbia Office Properties | ||||
Initial Cost | ||||
Land | 1,175 | |||
Buildings and Improvements | 14,913 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 268 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,175 | |||
Buildings and Improvements | 15,181 | |||
Total | 16,356 | |||
Accumulated Depreciation | (4,527) | |||
Columbia Regional Building | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 25,000 | |||
Initial Cost | ||||
Buildings and Improvements | 28,865 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 2,223 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 31,088 | |||
Total | 31,088 | |||
Accumulated Depreciation | (3,213) | |||
Lakefront | ||||
Initial Cost | ||||
Buildings and Improvements | 1,964 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 1,964 | |||
Total | 1,964 | |||
Maryland Communities | ||||
Initial Cost | ||||
Land | 457,552 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | (440,924) | |||
Buildings and Improvements | 197 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 16,628 | |||
Buildings and Improvements | 197 | |||
Total | 16,825 | |||
Accumulated Depreciation | (150) | |||
Merriweather District Predevelopment | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 76,808 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 76,808 | |||
Total | 76,808 | |||
One Mall North | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 14,463 | |||
Initial Cost | ||||
Land | 7,822 | |||
Buildings and Improvements | 10,818 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 7,822 | |||
Buildings and Improvements | 10,818 | |||
Total | 18,640 | |||
Accumulated Depreciation | (335) | |||
One Merriweather | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 42,332 | |||
Initial Cost | ||||
Land | 1,433 | |||
Buildings and Improvements | 58,936 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 8,065 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,433 | |||
Buildings and Improvements | 67,001 | |||
Total | 68,434 | |||
Accumulated Depreciation | (1,396) | |||
Ridgely Building | ||||
Initial Cost | ||||
Land | 400 | |||
Buildings and Improvements | 58,937 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | (58,937) | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 400 | |||
Total | 400 | |||
Two Merriweather | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 19,429 | |||
Initial Cost | ||||
Land | 1,019 | |||
Buildings and Improvements | 4,931 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 25,691 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,019 | |||
Buildings and Improvements | 30,622 | |||
Total | 31,641 | |||
Accumulated Depreciation | (127) | |||
Seaport Predevelopment | ||||
Initial Cost | ||||
Buildings and Improvements | 7,641 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 581 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 8,222 | |||
Total | 8,222 | |||
85 South Street | ||||
Initial Cost | ||||
Land | 15,913 | |||
Buildings and Improvements | 8,137 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 949 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 15,913 | |||
Buildings and Improvements | 9,086 | |||
Total | 24,999 | |||
Accumulated Depreciation | (1,985) | |||
Seaport Tin Building New York, NY | ||||
Initial Cost | ||||
Buildings and Improvements | 8,290 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 5,022 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 13,312 | |||
Total | 13,312 | |||
South Street Seaport - Pier 17 | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 344,168 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 344,168 | |||
Total | 344,168 | |||
South Street Seaport Historic District / Uplands | ||||
Initial Cost | ||||
Buildings and Improvements | 7,884 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 105,078 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 112,962 | |||
Total | 112,962 | |||
Accumulated Depreciation | (7,252) | |||
Constellation | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 24,200 | |||
Initial Cost | ||||
Land | 3,069 | |||
Buildings and Improvements | 39,759 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 3,069 | |||
Buildings and Improvements | 39,759 | |||
Total | 42,828 | |||
Downtown Summerlin | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 276,900 | |||
Initial Cost | ||||
Land | 30,855 | |||
Buildings and Improvements | 364,100 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 25,484 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 30,855 | |||
Buildings and Improvements | 389,584 | |||
Total | 420,439 | |||
Accumulated Depreciation | (42,046) | |||
Downtown Summerlin Apartments | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 12,661 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 12,661 | |||
Total | 12,661 | |||
Hockey Ground Lease | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Land | 4,710 | |||
Buildings and Improvements | 2,156 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 4,710 | |||
Buildings and Improvements | 2,156 | |||
Total | 6,866 | |||
Accumulated Depreciation | (33) | |||
Las Vegas 51s | ||||
Initial Cost | ||||
Buildings and Improvements | 179 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 179 | |||
Total | 179 | |||
Accumulated Depreciation | (40) | |||
Las Vegas Ballpark | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 7,651 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 7,651 | |||
Total | 7,651 | |||
Summerlin | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 24,764 | |||
Initial Cost | ||||
Land | 990,179 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | (137,946) | |||
Buildings and Improvements | 1,186 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 852,233 | |||
Buildings and Improvements | 1,186 | |||
Total | 853,419 | |||
Accumulated Depreciation | (660) | |||
Two Summerlin | ||||
Initial Cost | ||||
Buildings and Improvements | 18,676 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 18,676 | |||
Total | 18,676 | |||
Creekside Park Apartments | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 20,030 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 20,030 | |||
Total | 20,030 | |||
Creekside Village Green | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Land | 1,323 | |||
Buildings and Improvements | 16,263 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,323 | |||
Buildings and Improvements | 16,263 | |||
Total | 17,586 | |||
Accumulated Depreciation | (1,590) | |||
Embassy Suites at Hughes Landing | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 31,245 | |||
Initial Cost | ||||
Buildings and Improvements | 6,752 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | 1,818 | |||
Buildings and Improvements | 36,117 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,818 | |||
Buildings and Improvements | 42,869 | |||
Total | 44,687 | |||
Accumulated Depreciation | (3,029) | |||
100 Fellowship Drive | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 1 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 21,691 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 21,691 | |||
Total | 21,691 | |||
HHC 242 Self-Storage Woodlands, TX | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 6,243 | |||
Initial Cost | ||||
Land | 878 | |||
Buildings and Improvements | 6,802 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 1,090 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 878 | |||
Buildings and Improvements | 7,892 | |||
Total | 8,770 | |||
Accumulated Depreciation | (208) | |||
HHC 2978 Self-Storage Woodlands, TX | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 5,634 | |||
Initial Cost | ||||
Land | 124 | |||
Buildings and Improvements | 5,498 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 2,015 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 124 | |||
Buildings and Improvements | 7,513 | |||
Total | 7,637 | |||
Accumulated Depreciation | (160) | |||
One Hughes Landing | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 52,000 | |||
Initial Cost | ||||
Land | 1,678 | |||
Buildings and Improvements | 34,761 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,678 | |||
Buildings and Improvements | 34,761 | |||
Total | 36,439 | |||
Accumulated Depreciation | (6,287) | |||
Two Hughes Landing | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 48,000 | |||
Initial Cost | ||||
Land | 1,269 | |||
Buildings and Improvements | 34,950 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,269 | |||
Buildings and Improvements | 34,950 | |||
Total | 36,219 | |||
Accumulated Depreciation | (5,693) | |||
Three Hughes Landing | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 45,058 | |||
Initial Cost | ||||
Land | 2,626 | |||
Buildings and Improvements | 46,372 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 21,638 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 2,626 | |||
Buildings and Improvements | 68,010 | |||
Total | 70,636 | |||
Accumulated Depreciation | (1,814) | |||
1725 Hughes Landing Boulevard | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 58,815 | |||
Initial Cost | ||||
Land | 1,351 | |||
Buildings and Improvements | 36,764 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 30,252 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,351 | |||
Buildings and Improvements | 67,016 | |||
Total | 68,367 | |||
Accumulated Depreciation | (6,510) | |||
1735 Hughes Landing Boulevard | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 58,602 | |||
Initial Cost | ||||
Land | 3,709 | |||
Buildings and Improvements | 97,651 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 3,709 | |||
Buildings and Improvements | 97,651 | |||
Total | 101,360 | |||
Accumulated Depreciation | (9,292) | |||
Hughes Landing Retail | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 35,000 | |||
Initial Cost | ||||
Land | 5,184 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 32,987 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 5,184 | |||
Buildings and Improvements | 32,987 | |||
Total | 38,171 | |||
Accumulated Depreciation | (3,145) | |||
1701 Lake Robbins | ||||
Initial Cost | ||||
Land | 1,663 | |||
Buildings and Improvements | 3,725 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 10 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,663 | |||
Buildings and Improvements | 3,735 | |||
Total | 5,398 | |||
Accumulated Depreciation | (320) | |||
Lake Woodlands Crossing Retail | ||||
Initial Cost | ||||
Buildings and Improvements | 6,525 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 6,525 | |||
Total | 6,525 | |||
2201 Lake Woodlands Drive | ||||
Initial Cost | ||||
Land | 3,755 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 47 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 3,755 | |||
Buildings and Improvements | 47 | |||
Total | 3,802 | |||
Accumulated Depreciation | (5) | |||
One Lakes Edge | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 69,440 | |||
Initial Cost | ||||
Land | 1,057 | |||
Buildings and Improvements | 81,768 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,057 | |||
Buildings and Improvements | 81,768 | |||
Total | 82,825 | |||
Accumulated Depreciation | (5,784) | |||
Millennium Six Pines Apartments Woodlands, TX | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 42,500 | |||
Initial Cost | ||||
Land | 4,000 | |||
Buildings and Improvements | 54,624 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | 7,225 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 11,225 | |||
Buildings and Improvements | 54,624 | |||
Total | 65,849 | |||
Accumulated Depreciation | (2,819) | |||
Millennium Waterway Apartments | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 55,095 | |||
Initial Cost | ||||
Land | 15,917 | |||
Buildings and Improvements | 56,002 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 1,394 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 15,917 | |||
Buildings and Improvements | 57,396 | |||
Total | 73,313 | |||
Accumulated Depreciation | (12,898) | |||
9303 New Trails | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 12,003 | |||
Initial Cost | ||||
Land | 1,929 | |||
Buildings and Improvements | 11,915 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 601 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,929 | |||
Buildings and Improvements | 12,516 | |||
Total | 14,445 | |||
Accumulated Depreciation | (2,182) | |||
3831 Technology Forest Drive | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 21,954 | |||
Initial Cost | ||||
Land | 514 | |||
Buildings and Improvements | 14,194 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 1,703 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 514 | |||
Buildings and Improvements | 15,897 | |||
Total | 16,411 | |||
Accumulated Depreciation | (2,435) | |||
The Westin at the Woodlands Woodlands, TX | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 57,946 | |||
Initial Cost | ||||
Land | 22,473 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | (20,520) | |||
Buildings and Improvements | 88,892 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,953 | |||
Buildings and Improvements | 88,892 | |||
Total | 90,845 | |||
Accumulated Depreciation | (5,229) | |||
The Woodlands | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 150,000 | |||
Initial Cost | ||||
Land | 269,411 | |||
Buildings and Improvements | 9,814 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | (63,362) | |||
Buildings and Improvements | 6,793 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 206,049 | |||
Buildings and Improvements | 16,607 | |||
Total | 222,656 | |||
Accumulated Depreciation | (3,098) | |||
Woodlands Parking Garages | ||||
Initial Cost | ||||
Land | 5,857 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | 1,529 | |||
Buildings and Improvements | 11,837 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 7,386 | |||
Buildings and Improvements | 11,837 | |||
Total | 19,223 | |||
Accumulated Depreciation | (1,126) | |||
The Woodlands Resort and Conference Center | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 65,500 | |||
Initial Cost | ||||
Land | 13,258 | |||
Buildings and Improvements | 37,983 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 76,801 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 13,258 | |||
Buildings and Improvements | 114,784 | |||
Total | 128,042 | |||
Accumulated Depreciation | (15,795) | |||
20/25 Waterway Avenue | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 13,646 | |||
Initial Cost | ||||
Land | 2,346 | |||
Buildings and Improvements | 8,871 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 775 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 2,346 | |||
Buildings and Improvements | 9,646 | |||
Total | 11,992 | |||
Accumulated Depreciation | (2,122) | |||
Waterway Garage Retail | ||||
Initial Cost | ||||
Land | 1,341 | |||
Buildings and Improvements | 4,255 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 1,411 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,341 | |||
Buildings and Improvements | 5,666 | |||
Total | 7,007 | |||
Accumulated Depreciation | (1,169) | |||
3 Waterway Square | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 50,327 | |||
Initial Cost | ||||
Land | 748 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 42,329 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 748 | |||
Buildings and Improvements | 42,329 | |||
Total | 43,077 | |||
Accumulated Depreciation | (9,387) | |||
4 Waterway Square | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 35,151 | |||
Initial Cost | ||||
Land | 1,430 | |||
Buildings and Improvements | 51,553 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 4,288 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,430 | |||
Buildings and Improvements | 55,841 | |||
Total | 57,271 | |||
Accumulated Depreciation | (10,551) | |||
2000 Woodlands Parkway | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 135 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 135 | |||
Total | 135 | |||
1400 Woodloch Forest | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Land | 1,570 | |||
Buildings and Improvements | 14,341 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 1,570 | |||
Buildings and Improvements | 14,341 | |||
Total | 15,911 | |||
Accumulated Depreciation | (4,102) | |||
The Woodlands Hills | ||||
Initial Cost | ||||
Land | 99,284 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | 9,176 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 108,460 | |||
Total | 108,460 | |||
Ae'o | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 33,603 | |||
Initial Cost | ||||
Land | 9,795 | |||
Buildings and Improvements | 85,046 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | (9,795) | |||
Buildings and Improvements | 51,818 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 136,864 | |||
Total | 136,864 | |||
Anaha Condominiums | ||||
Initial Cost | ||||
Land | 5,546 | |||
Buildings and Improvements | 47,450 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | (5,546) | |||
Buildings and Improvements | (8,609) | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 38,841 | |||
Total | 38,841 | |||
Accumulated Depreciation | (2) | |||
Ke Kilohana | ||||
Initial Cost | ||||
Land | 2,615 | |||
Buildings and Improvements | 17,784 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | (2,615) | |||
Buildings and Improvements | 57,233 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 75,017 | |||
Total | 75,017 | |||
Kewalo Harbor | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 7,535 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 7,535 | |||
Total | 7,535 | |||
Accumulated Depreciation | (1) | |||
Waiea | ||||
Initial Cost | ||||
Buildings and Improvements | 20,812 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 39,294 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 60,106 | |||
Total | 60,106 | |||
Accumulated Depreciation | (3) | |||
Ward Predevelopment | ||||
Initial Cost | ||||
Buildings and Improvements | 24,069 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 72,172 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 96,241 | |||
Total | 96,241 | |||
Accumulated Depreciation | (59) | |||
Ward Village | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 238,718 | |||
Initial Cost | ||||
Land | 164,007 | |||
Buildings and Improvements | 89,321 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | (77,860) | |||
Buildings and Improvements | 186,930 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 86,147 | |||
Buildings and Improvements | 276,251 | |||
Total | 362,398 | |||
Accumulated Depreciation | (61,380) | |||
Allentowne | ||||
Initial Cost | ||||
Land | 25,575 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | (25,575) | |||
Buildings and Improvements | 25,886 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 25,886 | |||
Total | 25,886 | |||
Bridges at Mint Hill LLC | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 21,874 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 21,874 | |||
Total | 21,874 | |||
Circle T Ranch and Power Center | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 229 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 229 | |||
Total | 229 | |||
Cottonwood Mall | ||||
Initial Cost | ||||
Land | 7,613 | |||
Buildings and Improvements | 42,987 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | (7,613) | |||
Buildings and Improvements | (21,440) | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 21,547 | |||
Total | 21,547 | |||
Landmark Mall | ||||
Initial Cost | ||||
Land | 28,396 | |||
Buildings and Improvements | 67,235 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | (28,396) | |||
Buildings and Improvements | (12,652) | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 54,583 | |||
Total | 54,583 | |||
Accumulated Depreciation | (10) | |||
Outlet Collection at Riverwalk | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 53,841 | |||
Initial Cost | ||||
Buildings and Improvements | 94,513 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 1,161 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 95,674 | |||
Total | 95,674 | |||
Accumulated Depreciation | (16,175) | |||
The Elk Grove Collection | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 10,396 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 10,396 | |||
Total | 10,396 | |||
Accumulated Depreciation | (5) | |||
110 N Wacker | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 18,926 | |||
Initial Cost | ||||
Buildings and Improvements | 29,035 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | 12,249 | |||
Buildings and Improvements | 17,983 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Land | 12,249 | |||
Buildings and Improvements | 47,018 | |||
Total | 59,267 | |||
Accumulated Depreciation | (34,165) | |||
West Windsor | ||||
Costs Capitalized Subsequent to Acquisition | ||||
Buildings and Improvements | 26,158 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Buildings and Improvements | 26,158 | |||
Total | 26,158 | |||
Accumulated Depreciation | (100) | |||
Corporate Segment | ||||
REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||
Encumbrances | 1,014,983 | |||
Initial Cost | ||||
Land | 885 | |||
Buildings and Improvements | 1,027 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Land | (885) | |||
Building and Improvements | 43,967 | |||
Gross Amounts at Which Carried at Close of Period | ||||
Building and Improvements | 44,994 | |||
Total | 44,994 | |||
Accumulated Depreciation | $ 18,265 |
Schedule III - REAL ESTATE AN89
Schedule III - REAL ESTATE AND ACCUMLATED DEPRECIATION (Reconciliation of Real Estate and Accumulated Depreciation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Real Estate | |||
Balance at beginning of year | $ 4,979,840 | $ 4,774,632 | $ 4,116,556 |
Change in land | 93,833 | 122,446 | 95,095 |
Additions | 790,183 | 830,896 | 834,346 |
Impairments | 0 | (35,734) | 0 |
Dispositions and write-offs and land costs of sales | (508,447) | (712,400) | (271,365) |
Balance at end of year | 5,355,409 | 4,979,840 | 4,774,632 |
Reconciliation of Accumulated Depreciation | |||
Balance at beginning of year | 245,814 | 232,969 | 157,182 |
Depreciation expense | 116,401 | 81,878 | 82,275 |
Dispositions and write-offs | (40,333) | (69,033) | (6,488) |
Balance at end of year | $ 321,882 | $ 245,814 | $ 232,969 |
Building and Building Improvements | Minimum | |||
REAL ESTATE AND ACCUMULATED DEPRECIATION | |||
Estimated useful lives of assets | 10 years | ||
Building and Building Improvements | Maximum | |||
REAL ESTATE AND ACCUMULATED DEPRECIATION | |||
Estimated useful lives of assets | 45 years | ||
Equipment and fixtures | Minimum | |||
REAL ESTATE AND ACCUMULATED DEPRECIATION | |||
Estimated useful lives of assets | 5 years | ||
Equipment and fixtures | Maximum | |||
REAL ESTATE AND ACCUMULATED DEPRECIATION | |||
Estimated useful lives of assets | 10 years | ||
Computer, Hardware and Software and Vehicles | Minimum | |||
REAL ESTATE AND ACCUMULATED DEPRECIATION | |||
Estimated useful lives of assets | 3 years | ||
Computer, Hardware and Software and Vehicles | Maximum | |||
REAL ESTATE AND ACCUMULATED DEPRECIATION | |||
Estimated useful lives of assets | 5 years |