Quarterly report pursuant to Section 13 or 15(d)

Real Estate and Other, Net

v2.4.0.8
Real Estate and Other, Net
9 Months Ended
Nov. 02, 2013
Real Estate and Other, Net [Abstract]  
Real Estate and Other, Net
Real Estate and Other, Net
Real estate and other consists of ongoing operating income from our real estate subsidiaries whose investments are in REITs, as well as investments in joint ventures that own regional mall properties. Real estate and other also includes net gains from the sale of facilities and equipment that are no longer used in operations, asset impairments and other non-operating charges and credits. The composition of real estate and other, net was as follows:
 
 
Three Months Ended
 
Nine Months Ended
($ in millions)
November 2,
2013
 
October 27,
2012
 
November 2,
2013
 
October 27,
2012
Gain on sale or redemption of non-operating assets, net:
 
 
 
 
 
 
 
Redemption of SPG REIT units
$

 
$

 
$

 
$
(200
)
Sale of CBL & Associates Properties, Inc. (CBL) REIT shares

 
(15
)
 

 
(15
)
Sale of leveraged leases

 
(28
)
 

 
(28
)
Sale of investment in joint ventures
(23
)
 
(151
)
 
(85
)
 
(151
)
Sale of other non-operating assets
(1
)
 
(3
)
 
(1
)
 
(3
)
Net gain on sale or redemption of non-operating assets
(24
)
 
(197
)
 
(86
)
 
(397
)
Dividend income from REITs

 
(1
)
 

 
(6
)
Investment income from joint ventures
(1
)
 
(3
)
 
(5
)
 
(9
)
Gain on sale of operating assets

 

 
(18
)
 

Other
(2
)
 
4

 
(8
)
 

Real estate and other (income)/expense, net
$
(27
)
 
$
(197
)
 
$
(117
)
 
$
(412
)

REIT Assets
On July 20, 2012, SPG redeemed two million of our REIT units at a price of $124.00 per unit for a total redemption price of $246 million, net of fees. As of the market close on July 19, 2012, the SPG REIT units had a fair market value of $158.13 per unit. In connection with the redemption, we realized a net gain of $200 million determined using the first-in-first-out method for determining the cost of REIT units sold. Following the transaction, we continue to hold approximately 205,000 REIT units in SPG.

On October 23, 2012, we sold all of our CBL REIT shares at a price of $21.35 per share for a total price of $40 million, net of fees. In connection with the sale, we realized a net gain of $15 million.

Leveraged Leases
During the third quarter of 2012, we sold all of our leveraged lease assets for $146 million, net of fees. The investments in the leveraged lease assets as of the dates of the sales were $118 million and we recorded a net gain of $28 million.
Joint Venture
During the third quarter of 2013, we sold our investment in three joint ventures for $32 million, resulting in a net gain of $23 million. During the second quarter of 2013, we sold our investment in a joint venture for $55 million, resulting in a net gain of $62 million. The gain exceeded the cash proceeds as a result of distributions of cash related to refinancing transactions in prior periods that were recorded as net reductions in the carrying amount of the investment. The net book value of the joint venture investment was a negative $7 million and was included in Other liabilities in the unaudited Interim Consolidated Balance Sheets.

During the third quarter of 2012, we sold our investments in four joint ventures for $90 million, resulting in net gains totaling $151 million. The gain exceeded the cash proceeds as a result of distributions of cash related to refinancing transactions in prior periods that were recorded as net reductions in the carrying amount of the investments. The cumulative net book value of the joint venture investments was a negative $61 million.



Other Non-Operating Assets
During the third quarter of 2013, we sold approximately 10 acres of excess land for net proceeds and gain of $1 million. During the third quarter of 2012, we sold a building used in our former drugstore operations for net proceeds and a gain of $3 million.
Operating Assets
During the first quarter of 2013, we sold our leasehold interest of a former department store location with a net book value of $2 million for net proceeds of $18 million, realizing a gain of $16 million. During the second quarter of 2013, we sold two properties, realizing a gain of $2 million.