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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                  

Commission file number 1-11690

 

SITE Centers Corp.

(Exact name of registrant as specified in its charter)

 

 

Ohio

 

34-1723097

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

   3300 Enterprise Parkway

Beachwood, OH

 

44122

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (216) 755-5500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Shares, Par Value $0.10 Per Share

 

SITC

 

New York Stock Exchange

 

 

 

 

 

Depositary Shares, each representing 1/20 of a share of 6.375% Class A Cumulative Redeemable Preferred Shares without Par Value

 

SITC PRA

 

New York Stock Exchange

 

 

 

 

 

Depositary Shares, each representing 1/20 of a share of 6.25% Class K Cumulative Redeemable Preferred Shares without Par Value

 

SITC PRK

 

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

     

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

  

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of April 24, 2020, the registrant had 193,149,243 shares of common stock, $0.10 par value per share, outstanding.

 

 

 


SITE Centers Corp.

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED March 31, 2020

 

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION

 

Item 1.

Financial Statements – Unaudited

 

 

Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019

2

 

Consolidated Statements of Operations for the Three Months Ended March 31, 2020 and 2019

3

 

Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2020 and 2019

4

 

Consolidated Statements of Equity for the Three Months Ended March 31, 2020 and 2019

5

 

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019

6

 

Notes to Condensed Consolidated Financial Statements

7

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

18

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

36

Item 4.

Controls and Procedures

37

 

 

 

PART II. OTHER INFORMATION

 

Item 1.

Legal Proceedings

38

Item 1A.

Risk Factors

38

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

39

Item 3.

Defaults Upon Senior Securities

39

Item 4.

Mine Safety Disclosures

39

Item 5.

Other Information

39

Item 6.

Exhibits

40

 

 

 

SIGNATURES

41

 

 

1


SITE Centers Corp.

CONSOLIDATED BALANCE SHEETS

(unaudited; in thousands, except share amounts)

 

 

March 31, 2020

 

 

December 31, 2019

 

Assets

 

 

 

 

 

 

 

Land

$

881,360

 

 

$

881,397

 

Buildings

 

3,289,988

 

 

 

3,277,440

 

Fixtures and tenant improvements

 

493,371

 

 

 

491,312

 

 

 

4,664,719

 

 

 

4,650,149

 

Less: Accumulated depreciation

 

(1,323,390

)

 

 

(1,289,148

)

 

 

3,341,329

 

 

 

3,361,001

 

Construction in progress and land

 

62,250

 

 

 

59,663

 

Total real estate assets, net

 

3,403,579

 

 

 

3,420,664

 

Investments in and advances to joint ventures, net

 

178,983

 

 

 

294,495

 

Investment in and advances to affiliate

 

190,105

 

 

 

190,105

 

Cash and cash equivalents

 

514,258

 

 

 

16,080

 

Restricted cash

 

106

 

 

 

3,053

 

Accounts receivable

 

56,436

 

 

 

60,594

 

Other assets, net

 

101,614

 

 

 

108,631

 

 

$

4,445,081

 

 

$

4,093,622

 

Liabilities and Equity

 

 

 

 

 

 

 

Unsecured indebtedness:

 

 

 

 

 

 

 

Senior notes, net

$

1,447,997

 

 

$

1,647,963

 

Term loan, net

 

99,504

 

 

 

99,460

 

Revolving credit facilities

 

645,000

 

 

 

5,000

 

 

 

2,192,501

 

 

 

1,752,423

 

Mortgage indebtedness, net

 

54,210

 

 

 

94,874

 

Total indebtedness

 

2,246,711

 

 

 

1,847,297

 

Accounts payable and other liabilities

 

186,845

 

 

 

220,811

 

Dividends payable

 

44,047

 

 

 

44,036

 

Total liabilities

 

2,477,603

 

 

 

2,112,144

 

Commitments and contingencies

 

 

 

 

 

 

 

SITE Centers Equity

 

 

 

 

 

 

 

Class A—6.375% cumulative redeemable preferred shares, without par value, $500 liquidation value;

   750,000 shares authorized; 350,000 shares issued and outstanding at March 31, 2020 and

   December 31, 2019

 

175,000

 

 

 

175,000

 

Class K—6.25% cumulative redeemable preferred shares, without par value, $500 liquidation value;

   750,000 shares authorized; 300,000 shares issued and outstanding at March 31, 2020 and

   December 31, 2019

 

150,000

 

 

 

150,000

 

Common shares, with par value, $0.10 stated value; 300,000,000 shares authorized; 193,994,403 and

   193,823,409 shares issued at March 31, 2020 and December 31, 2019, respectively

 

19,399

 

 

 

19,382

 

Additional paid-in capital

 

5,703,521

 

 

 

5,700,400

 

Accumulated distributions in excess of net income

 

(4,075,813

)

 

 

(4,066,099

)

Deferred compensation obligation

 

5,994

 

 

 

7,929

 

Accumulated other comprehensive loss

 

(104

)

 

 

(491

)

Less: Common shares in treasury at cost: 1,097,130 and 325,318 shares at March 31, 2020 and

   December 31, 2019, respectively

 

(13,600

)

 

 

(7,707

)

Total SITE Centers shareholders' equity

 

1,964,397

 

 

 

1,978,414

 

Non-controlling interests

 

3,081

 

 

 

3,064

 

Total equity

 

1,967,478

 

 

 

1,981,478

 

 

$

4,445,081

 

 

$

4,093,622

 

 

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

 

2


SITE Centers Corp.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in thousands, except per share amounts)

 

Three Months

 

 

Ended March 31,

 

 

2020

 

 

2019

 

Revenues from operations:

 

 

 

 

 

 

 

Rental income

$

112,529

 

 

$

112,221

 

Fee and other income

 

16,781

 

 

 

18,801

 

 

 

129,310

 

 

 

131,022

 

Rental operation expenses:

 

 

 

 

 

 

 

Operating and maintenance

 

18,480

 

 

 

18,841

 

Real estate taxes

 

17,657

 

 

 

17,743

 

Impairment charges

 

 

 

 

620

 

General and administrative

 

11,376

 

 

 

14,112

 

Depreciation and amortization

 

42,993

 

 

 

42,608

 

 

 

90,506

 

 

 

93,924

 

Other income (expense):

 

 

 

 

 

 

 

Interest income

 

3,485

 

 

 

4,521

 

Interest expense

 

(20,587

)

 

 

(21,726

)

Other (expense) income, net

 

(17,409

)

 

 

153

 

 

 

(34,511

)

 

 

(17,052

)

Income before earnings from equity method investments and other items

 

4,293

 

 

 

20,046

 

Equity in net income of joint ventures

 

2,171

 

 

 

1,043

 

Reserve of preferred equity interests, net

 

(18,057

)

 

 

(1,099

)

Gain on sale of joint venture interest

 

45,681

 

 

 

 

Gain on disposition of real estate, net

 

773

 

 

 

16,377

 

Income before tax expense

 

34,861

 

 

 

36,367

 

Tax expense of taxable REIT subsidiaries and state franchise and income taxes

 

(233

)

 

 

(272

)

Net income

$

34,628

 

 

$

36,095

 

Income attributable to non-controlling interests, net

 

(295

)

 

 

(305

)

Net income attributable to SITE Centers

$

34,333

 

 

$

35,790

 

Preferred dividends

 

(5,133

)

 

 

(8,383

)

Net income attributable to common shareholders

$

29,200

 

 

$

27,407

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

Basic

$

0.15

 

 

$

0.15

 

Diluted

$

0.15

 

 

$

0.15

 

 

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

3


SITE Centers Corp.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  

(unaudited; in thousands)

 

 

Three Months

 

 

Ended March 31,

 

 

2020

 

 

2019

 

Net income

$

34,628

 

 

$

36,095

 

Other comprehensive income:

 

 

 

 

 

 

 

Foreign currency translation, net

 

(785

)

 

 

187

 

Change in cash flow hedges reclassed to earnings

 

1,172

 

 

 

117

 

Total other comprehensive income

 

387

 

 

 

304

 

Comprehensive income

$

35,015

 

 

$

36,399

 

Total comprehensive income attributable to non-controlling interests

 

(295

)

 

 

(305

)

Total comprehensive income attributable to SITE Centers

$

34,720

 

 

$

36,094

 

 

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

 

4


SITE Centers Corp.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in thousands)

 

 

SITE Centers Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Shares

 

 

Common

Shares

 

 

Additional

Paid-in

Capital

 

 

Accumulated Distributions

in Excess of

Net Income

 

 

Deferred Compensation Obligation

 

 

Accumulated Other Comprehensive Loss

 

 

Treasury

Stock at

Cost

 

 

Non-

Controlling

Interests

 

 

Total

 

Balance, December 31, 2019

$

325,000

 

 

$

19,382

 

 

$

5,700,400

 

 

$

(4,066,099

)

 

$

7,929

 

 

$

(491

)

 

$

(7,707

)

 

$

3,064

 

 

$

1,981,478

 

Issuance of common shares related

   to stock plans

 

 

 

 

17

 

 

 

109

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

126

 

Repurchase of common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,500

)

 

 

 

 

 

(7,500

)

Stock-based compensation, net

 

 

 

 

 

 

 

3,012

 

 

 

 

 

 

(1,935

)

 

 

 

 

 

1,607

 

 

 

 

 

 

2,684

 

Distributions to non-controlling

   interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(278

)

 

 

(278

)

Dividends declared-common shares

 

 

 

 

 

 

 

 

 

 

(38,914

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(38,914

)

Dividends declared-preferred shares

 

 

 

 

 

 

 

 

 

 

(5,133

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,133

)

Comprehensive income

 

 

 

 

 

 

 

 

 

 

34,333

 

 

 

 

 

 

387

 

 

 

 

 

 

295

 

 

 

35,015

 

Balance, March 31, 2020

$

325,000

 

 

$

19,399

 

 

$

5,703,521

 

 

$

(4,075,813

)

 

$

5,994

 

 

$

(104

)

 

$

(13,600

)

 

$

3,081

 

 

$

1,967,478

 

 

 

SITE Centers Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Shares

 

 

Common

Shares

 

 

Additional

Paid-in

Capital

 

 

Accumulated Distributions

in Excess of

Net Income

 

 

Deferred Compensation Obligation

 

 

Accumulated Other Comprehensive Loss

 

 

Treasury

Stock at

Cost

 

 

Non-

Controlling

Interests

 

 

Total

 

Balance, December 31, 2018

$

525,000

 

 

$

18,471

 

 

$

5,544,220

 

 

$

(3,980,151

)

 

$

8,193

 

 

$

(1,381

)

 

$

(44,278

)

 

$

2,928

 

 

$

2,073,002

 

Issuance of common shares related

   to stock plans

 

 

 

 

1

 

 

 

31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32

 

Repurchase of common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,069

)

 

 

 

 

 

(14,069

)

Stock-based compensation, net

 

 

 

 

 

 

 

1,044

 

 

 

 

 

 

(239

)

 

 

 

 

 

1,644

 

 

 

 

 

 

2,449

 

Distributions to non-controlling

   interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(212

)

 

 

(212

)

Dividends declared-common shares

 

 

 

 

 

 

 

 

 

 

(36,252

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(36,252

)

Dividends declared-preferred shares

 

 

 

 

 

 

 

 

 

 

(8,383

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,383

)

Comprehensive income

 

 

 

 

 

 

 

 

 

 

35,790

 

 

 

 

 

 

304

 

 

 

 

 

 

305

 

 

 

36,399

 

Balance, March 31, 2019

$

525,000

 

 

$

18,472

 

 

$

5,545,295

 

 

$

(3,988,996

)

 

$

7,954

 

 

$

(1,077

)

 

$

(56,703

)

 

$

3,021

 

 

$

2,052,966

 

 

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

5


SITE Centers Corp.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in thousands)

 

 

Three Months

 

 

Ended March 31,

 

 

2020

 

 

2019

 

Cash flow from operating activities:

 

 

 

 

 

 

 

Net income

$

34,628

 

 

$

36,095

 

Adjustments to reconcile net income to net cash flow provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

42,993

 

 

 

42,608

 

Stock-based compensation

 

18

 

 

 

2,917

 

Amortization and write-off of debt issuance costs and fair market value of debt adjustments

 

1,519

 

 

 

937

 

Loss on debt extinguishment

 

16,568

 

 

 

 

Equity in net income of joint ventures

 

(2,171

)

 

 

(1,043

)

Reserve of preferred equity interests, net

 

18,057

 

 

 

1,099

 

Operating cash distributions from joint ventures

 

2,121

 

 

 

2,336

 

Gain on sale of joint venture interest

 

(45,681

)

 

 

 

Gain on disposition of real estate, net

 

(773

)

 

 

(16,377

)

Impairment charges

 

 

 

 

620

 

Assumption of buildings due to ground lease termination

 

(3,025

)

 

 

 

Change in notes receivable accrued interest

 

664

 

 

 

266

 

Net change in accounts receivable

 

4,177

 

 

 

4,018

 

Net change in accounts payable and accrued expenses

 

(19,292

)

 

 

(19,132

)

Net change in other operating assets and liabilities

 

(13,953

)

 

 

(12,081

)

Total adjustments

 

1,222

 

 

 

6,168

 

Net cash flow provided by operating activities

 

35,850

 

 

 

42,263

 

Cash flow from investing activities:

 

 

 

 

 

 

 

Real estate developed and improvements to operating real estate

 

(23,022

)

 

 

(18,153

)

Proceeds from disposition of real estate

 

1,060

 

 

 

70,038

 

Proceeds from sale of joint venture interest

 

140,519

 

 

 

 

Equity contributions to joint ventures

 

(86

)

 

 

(47

)

Distributions from unconsolidated joint ventures

 

3,168

 

 

 

11,928

 

Repayment of joint venture advances, net

 

 

 

 

12,687

 

Repayment of notes receivable

 

7,500

 

 

 

 

Net transactions with RVI

 

 

 

 

7

 

Net cash flow provided by investing activities

 

129,139

 

 

 

76,460

 

Cash flow from financing activities:

 

 

 

 

 

 

 

Proceeds from (Repayment of) revolving credit facilities, net

 

640,000

 

 

 

(60,000

)

Repayment of senior notes, including repayment costs

 

(216,568

)

 

 

 

Repayment of term loan and mortgage debt

 

(40,436

)

 

 

(526

)

Repurchase of common shares in conjunction with equity award plans and dividend reinvestment plan

 

(948

)

 

 

(627

)

Repurchase of common shares

 

(7,500

)

 

 

(14,069

)

Distributions to non-controlling interests and redeemable operating partnership units

 

(278

)

 

 

(213

)

Dividends paid

 

(44,036

)

 

 

(45,262

)

Net cash flow provided by (used for) financing activities

 

330,234

 

 

 

(120,697

)

 

 

 

 

 

 

 

 

Effect of foreign exchange rate changes on cash and cash equivalents

 

8

 

 

 

(3

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

495,223

 

 

 

(1,974

)

Cash, cash equivalents and restricted cash, beginning of period

 

19,133

 

 

 

13,650

 

Cash, cash equivalents and restricted cash, end of period

$

514,364

 

 

$

11,673

 

 

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

 

 

6


Notes to Condensed Consolidated Financial Statements

1.

Nature of Business and Financial Statement Presentation

Nature of Business

SITE Centers Corp. and its related consolidated real estate subsidiaries (collectively, the “Company” or “SITE Centers”) and unconsolidated joint ventures are primarily engaged in the business of acquiring, owning, developing, redeveloping, expanding, leasing, financing and managing shopping centers.  Unless otherwise provided, references herein to the Company or SITE Centers include SITE Centers Corp. and its wholly-owned subsidiaries and consolidated joint ventures.  The Company’s tenant base primarily includes national and regional retail chains and local tenants.  Consequently, the Company’s credit risk is concentrated in the retail industry.  

Use of Estimates in Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the year.  Actual results could differ from those estimates.  

Unaudited Interim Financial Statements

These financial statements have been prepared by the Company in accordance with GAAP for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission.  Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements.  However, in the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the results of the periods presented.  The results of operations for the three months ended March 31, 2020 and 2019, are not necessarily indicative of the results that may be expected for the full year.  These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Principles of Consolidation

The consolidated financial statements include the results of the Company and all entities in which the Company has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity (“VIE”).  All significant inter-company balances and transactions have been eliminated in consolidation.  Investments in real estate joint ventures in which the Company has the ability to exercise significant influence, but does not have financial or operating control, are accounted for using the equity method of accounting.  Accordingly, the Company’s share of the earnings (or loss) of these joint ventures is included in consolidated net income (loss).  

The Company has two unconsolidated joint ventures included in the Company’s joint venture investments that are considered VIEs for which the Company is not the primary beneficiary.  The Company’s maximum exposure to losses associated with these VIEs is limited to its aggregate investment, which was $94.5 million and $114.0 million as of March 31, 2020 and December 31, 2019, respectively.  

Statements of Cash Flows and Supplemental Disclosure of Non-Cash Investing and Financing Information

Non-cash investing and financing activities are summarized as follows (in millions):

 

Three Months

 

 

Ended March 31,

 

 

2020

 

 

2019

 

Dividends declared, but not paid

$

44.0

 

 

$

44.6

 

Accounts payable related to construction in progress

 

7.7

 

 

 

8.8

 

Assumption of buildings due to ground lease terminations

 

3.0

 

 

 

 

7


Common Shares

The Company declared common share dividends of $0.20 per share for the three months ended March 31, 2020 and 2019, respectively.

New Accounting Standard

Accounting for Credit Losses

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued an amendment on measurement of credit losses on financial assets held by a reporting entity at each reporting date (Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses, “Topic 326”). The guidance requires the use of a new current expected credit loss ("CECL") model in estimating allowances for doubtful accounts with respect to accounts receivable, straight-line rents receivable and notes receivable. The CECL model requires that the Company estimate its lifetime expected credit loss with respect to these receivables and record allowances that, when deducted from the balance of the receivables, represent the estimated net amounts expected to be collected. This guidance is effective for fiscal years, and for interim reporting periods within those fiscal years, beginning after December 15, 2019.  In November 2018, the FASB issued ASU 2018-19, to clarify that operating lease receivables recorded by lessors are explicitly excluded from the scope of Topic 326.  The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

Accounting for Leases During COVID-19 Pandemic

In April 2020, the FASB issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of COVID-19. Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated with the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A clarifies that entities may elect to not evaluate whether lease-related relief that lessors provide to mitigate the economic effects of COVID-19 on lessees is a lease modification under Topic 842, Leases. Instead, an entity that elects not to evaluate whether a concession directly related to COVID-19 is a modification can then elect whether to apply the modification guidance (i.e. assume the relief was always contemplated by the contract or assume the relief was not contemplated by the contract). Both lessees and lessors may make this election. The Company is evaluating its election on a disaggregated basis, with such election applied consistently to leases with similar characteristics and similar circumstances.  The future impact of the Lease Modification Q&A is dependent upon the extent of lease concessions granted to tenants as a result of COVID-19 in future periods and the elections made by the Company at the time of entering into such concessions.

2.

Revenue Recognition

Fee and Other Income on the consolidated statements of operations includes revenue from contracts with customers and other property-related income, primarily composed of theater income, and is recognized in the period earned as follows (in thousands):

 

Three Months

 

 

Ended March 31,

 

 

2020

 

 

2019

 

Revenue from contracts:

 

 

 

 

 

 

 

Asset and property management fees

$

9,325

 

 

$

11,531

 

Leasing commissions

 

2,996

 

 

 

1,499

 

Development fees

 

870

 

 

 

553

 

Disposition fees

 

1,556

 

 

 

1,202

 

Credit facility guaranty and refinancing fees

 

 

 

 

1,800

 

Total revenue from contracts with customers

 

14,747

 

 

 

16,585

 

Other property income:

 

 

 

 

 

 

 

Other

 

2,034

 

 

 

2,216

 

Total fee and other income

$

16,781

 

 

$

18,801

 

 

8


3.

Investments in and Advances to Joint Ventures

At March 31, 2020 and December 31, 2019, the Company had ownership interests in various unconsolidated joint ventures that had an investment in 78 and 100 shopping center properties, respectively.  Condensed combined financial information of the Company’s unconsolidated joint venture investments is as follows (in thousands):

 

March 31, 2020

 

 

December 31, 2019

 

Condensed Combined Balance Sheets

 

 

 

 

 

 

 

Land

$

556,291

 

 

$

895,427

 

Buildings

 

1,687,612

 

 

 

2,583,053

 

Fixtures and tenant improvements

 

154,278

 

 

 

233,303

 

 

 

2,398,181

 

 

 

3,711,783

 

Less: Accumulated depreciation

 

(548,541

)

 

 

(949,879

)

 

 

1,849,640

 

 

 

2,761,904

 

Construction in progress and land

 

52,603

 

 

 

58,855

 

Real estate, net

 

1,902,243

 

 

 

2,820,759

 

Cash and restricted cash

 

59,184

 

 

 

109,260

 

Receivables, net

 

22,442

 

 

 

37,191

 

Other assets, net

 

105,457

 

 

 

147,129

 

 

$

2,089,326

 

 

$

3,114,339

 

 

 

 

 

 

 

 

 

Mortgage debt

$

1,434,981

 

 

$

1,640,146

 

Notes and accrued interest payable to the Company

 

4,896

 

 

 

4,975

 

Other liabilities

 

97,384

 

 

 

142,754

 

 

 

1,537,261

 

 

 

1,787,875

 

Redeemable preferred equity SITE Centers (A)

 

218,315

 

 

 

217,871

 

Accumulated equity

 

333,750

 

 

 

1,108,593

 

 

$

2,089,326

 

 

$

3,114,339

 

 

 

 

 

 

 

 

 

Company's share of accumulated equity

$

74,165

 

 

$

186,247

 

Redeemable preferred equity, net (B)

 

93,909

 

 

 

112,589

 

Basis differentials

 

7,518

 

 

 

(6,864

)

Deferred development fees, net of portion related to the Company's interest

 

(1,505

)

 

 

(2,452

)

Amounts payable to the Company

 

4,896

 

 

 

4,975

 

Investments in and Advances to Joint Ventures, net

$

178,983

 

 

$

294,495

 

 

(A)

Includes PIK that the Company has accrued since March 2017 of $18.4 million and $17.3 million at March 31, 2020 and December 31, 2019, respectively, which, in each case, was fully reserved.  

 

(B)

Amount is net of the valuation allowance of $106.0 million and $87.9 million at March 31, 2020 and December 31, 2019, respectively, and the fully reserved PIK.  

9


 

Three Months

 

 

Ended March 31,

 

 

2020

 

 

2019

 

Condensed Combined Statements of Operations

 

 

 

 

 

 

 

Revenues from operations

$

85,621

 

 

$

109,103

 

Expenses from operations:

 

 

 

 

 

 

 

Operating expenses

 

24,415

 

 

 

30,061

 

Impairment charges