##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2010
 OR
 o
    
    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 001-32649
 COGDELL SPENCER INC.
  Maryland
    
    20-3126457(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)4401 Barclay Downs Drive, Suite 300Charlotte, North Carolina
    
    28209(Address of principal executive offices)
    
    (Zip code)
 (704) 940-2900
 
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o.(Do not check if a smaller reporting company)
 o þ




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##### 



TABLE OF CONTENTS
 PagePART I FINANCIAL INFORMATIONItem 1 Financial Statements
    
    
    3Item 2 Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    27Item 3 Quantitative and Qualitative Disclosures about Market Risk
    
    
    43Item 4 Controls and Procedures
    
    
    43PART II Other InformationItem 1 Legal Proceedings
    
    
    43Item 1A Risk Factors
    
    
    43Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    44Item 3 Defaults Upon Senior Securities
    
    
    44Item 4 Removed and Reserved
    
    
    44Item 5 Other Information
    
    
    44Item 6 Exhibits
    
    
    44Exhibit 31.1Exhibit 31.2Exhibit 32.1
   2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 COGDELL SPENCER INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2010
    
    
    2009AssetsReal estate properties:Land
    
    $
    37,269
    
    
    $
    33,139Buildings and improvements
    
    
    595,575
    
    
    
    527,985Less: Accumulated depreciation
    
    
    (112,581
    )
    
    
    (93,247
    )Net operating real estate properties
    
    
    520,263
    
    
    
    467,877Construction in progress
    
    
    15,120
    
    
    
    43,338Net real estate properties
    
    
    535,383
    
    
    
    511,215Cash and cash equivalents
    
    
    16,028
    
    
    
    25,914Restricted cash
    
    
    11,649
    
    
    
    3,060Tenant and accounts receivable, net of allowance of $2,701 in 2010 and $2,817 in 2009
    
    
    9,656
    
    
    
    12,993Goodwill
    
    
    102,195
    
    
    
    108,683Trade names and trademarks
    
    
    34,093
    
    
    
    41,240Intangible assets, net of accumulated amortization of $47,863 in 2010 and $43,313 in 2009
    
    
    20,025
    
    
    
    21,742Other assets
    
    
    23,642
    
    
    
    25,599Other assets  held for sale
    
    
    
    
    
    
    2,217Total assets
    
    $
    752,671
    
    
    $
    752,663Liabilities and equityMortgage notes payable
    
    $
    296,701
    
    
    $
    280,892Revolving credit facility
    
    
    65,000
    
    
    
    80,000Term loan
    
    
    50,000
    
    
    
    50,000Accounts payable
    
    
    11,814
    
    
    
    15,293Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    2,145
    
    
    
    13,189Deferred income taxes
    
    
    11,406
    
    
    
    15,993Other liabilities
    
    
    51,991
    
    
    
    47,312Other liabilities  held for sale
    
    
    
    
    
    
    2,204Total liabilities
    
    
    489,057
    
    
    
    504,883Commitments and contingenciesEquity:Cogdell Spencer Inc. stockholders equity:Preferred stock, $0.01 par value; 50,000 shares authorized, none issued or outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value; 200,000 shares authorized, 50,709 and 42,729 shares
issued and outstanding in 2010 and 2009, respectively
    
    
    507
    
    
    
    427Additional paid-in capital
    
    
    419,439
    
    
    
    370,593Accumulated other comprehensive loss
    
    
    (6,011
    )
    
    
    (1,861
    )Accumulated deficit
    
    
    (189,219
    )
    
    
    (164,321
    )Total Cogdell Spencer Inc. stockholders equity
    
    
    224,716
    
    
    
    204,838Noncontrolling interests:Real estate partnerships
    
    
    5,660
    
    
    
    5,220Operating partnership
    
    
    33,238
    
    
    
    37,722Total noncontrolling interests
    
    
    38,898
    
    
    
    42,942Total equity
    
    
    263,614
    
    
    
    247,780Total liabilities and equity
    
    $
    752,671
    
    
    $
    752,663
   3




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##### Table of Contents



COGDELL SPENCER INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Rental revenue
    
    $
    22,765
    
    
    $
    19,960
    
    
    $
    65,004
    
    
    $
    59,110Design-Build contract revenue and other sales
    
    
    15,734
    
    
    
    30,298
    
    
    
    66,406
    
    
    
    113,399Property management and other fees
    
    
    809
    
    
    
    816
    
    
    
    2,388
    
    
    
    2,530Development management and other income
    
    
    1
    
    
    
    239
    
    
    
    122
    
    
    
    3,266Total revenues
    
    
    39,309
    
    
    
    51,313
    
    
    
    133,920
    
    
    
    178,305Expenses:Property operating and management
    
    
    9,067
    
    
    
    8,103
    
    
    
    25,652
    
    
    
    23,789Design-Build contracts and development management
    
    
    13,806
    
    
    
    21,166
    
    
    
    49,832
    
    
    
    92,573Selling, general, and administrative
    
    
    6,684
    
    
    
    7,876
    
    
    
    21,850
    
    
    
    21,218Depreciation and amortization
    
    
    8,293
    
    
    
    8,012
    
    
    
    24,558
    
    
    
    27,032Impairment charges
    
    
    
    
    
    
    
    
    
    
    13,635
    
    
    
    120,920Total expenses
    
    
    37,850
    
    
    
    45,157
    
    
    
    135,527
    
    
    
    285,532Income (loss) from continuing operations before other income (expense) and
income tax benefit
    
    
    1,459
    
    
    
    6,156
    
    
    
    (1,607
    )
    
    
    (107,227
    )Other income (expense):Interest and other income
    
    
    151
    
    
    
    161
    
    
    
    446
    
    
    
    456Interest expense
    
    
    (5,851
    )
    
    
    (5,039
    )
    
    
    (16,332
    )
    
    
    (16,588
    )Debt extinguishment and interest rate derivative expense
    
    
    (7
    )
    
    
    (10
    )
    
    
    (32
    )
    
    
    (2,501
    )Equity in earnings (loss) of unconsolidated real estate partnerships
    
    
    3
    
    
    
    (4
    )
    
    
    5
    
    
    
    4Total other income (expense)
    
    
    (5,704
    )
    
    
    (4,892
    )
    
    
    (15,913
    )
    
    
    (18,629
    )Income (loss) from continuing operations before income tax benefit
    
    
    (4,245
    )
    
    
    1,264
    
    
    
    (17,520
    )
    
    
    (125,856
    )Income tax benefit
    
    
    2,294
    
    
    
    231
    
    
    
    5,741
    
    
    
    22,065Income (loss) from continuing operations
    
    
    (1,951
    )
    
    
    1,495
    
    
    
    (11,779
    )
    
    
    (103,791
    )Discontinued operations:Income (loss) from discontinued operations
    
    
    
    
    
    
    (39
    )
    
    
    6
    
    
    
    (127
    )Gain on sale of discontinued operations
    
    
    
    
    
    
    
    
    
    
    264
    
    
    
    Total discontinued operations
    
    
    
    
    
    
    (39
    )
    
    
    270
    
    
    
    (127
    )Net income (loss)
    
    
    (1,951
    )
    
    
    1,456
    
    
    
    (11,509
    )
    
    
    (103,918
    )Net (income) loss attributable to the noncontrolling interest in:Real estate partnerships
    
    
    (172
    )
    
    
    (17
    )
    
    
    (660
    )
    
    
    (158
    )Operating partnership
    
    
    285
    
    
    
    (191
    )
    
    
    1,595
    
    
    
    32,791Net income (loss) attributable to Cogdell Spencer Inc.
    
    $
    (1,838
    )
    
    $
    1,248
    
    
    $
    (10,574
    )
    
    $
    (71,285
    )Per share data  basic and diluted:Income (loss) from continuing operations attributable to Cogdell Spencer
Inc.
    
    $
    (0.04
    )
    
    $
    0.03
    
    
    $
    (0.24
    )
    
    $
    (2.43
    )Income (loss) from discontinued operations attributable to Cogdell Spencer
Inc.
    
    
    
    
    
    
    
    
    
    
    0.01
    
    
    
    Net income (loss) per share attributable to Cogdell Spencer Inc.
    
    $
    (0.04
    )
    
    $
    0.03
    
    
    $
    (0.23
    )
    
    $
    (2.43
    )Weighted average common shares  basic and diluted
    
    
    50,083
    
    
    
    42,539
    
    
    
    46,348
    
    
    
    29,299Net income (loss) attributable to Cogdell Spencer Inc.:Income (loss) from continuing operations, net of tax
    
    $
    (1,838
    )
    
    $
    1,281
    
    
    $
    (10,805
    )
    
    $
    (71,185
    )Income (loss) from discontinued operations
    
    
    
    
    
    
    (33
    )
    
    
    231
    
    
    
    (100
    )Net income (loss) attributable to Cogdell Spencer Inc.
    
    $
    (1,838
    )
    
    $
    1,248
    
    
    $
    (10,574
    )
    
    $
    (71,285
    )
   4




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COGDELL SPENCER INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
 Cogdell Spencer Inc. StockholdersAccumulated
    
    
    
    
    
    
    
    
    
    
    Noncontrolling
    
    
    NoncontrollingOther
    
    
    
    
    
    
    Additional
    
    
    Interests in
    
    
    Interests inTotal
    
    
    Comprehensive
    
    
    Accumulated
    
    
    Comprehensive
    
    
    Common
    
    
    Paid-in
    
    
    Operating
    
    
    Real EstateEquity
    
    
    Loss
    
    
    Deficit
    
    
    Loss
    
    
    Stock
    
    
    Capital
    
    
    Partnership
    
    
    PartnershipsBalance at December 31, 2009
    
    $
    247,780
    
    
    
    
    
    
    $
    (164,321
    )
    
    $
    (1,861
    )
    
    $
    427
    
    
    $
    370,593
    
    
    $
    37,722
    
    
    $
    5,220Comprehensive income (loss):Net income (loss)
    
    
    (11,509
    )
    
    $
    (11,509
    )
    
    
    (10,574
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,595
    )
    
    
    660Unrealized loss on
interest rate swaps,
net of tax
    
    
    (6,076
    )
    
    
    (6,076
    )
    
    
    
    
    
    
    (4,099
    )
    
    
    
    
    
    
    
    
    
    
    (666
    )
    
    
    (1,311
    )Comprehensive loss
    
    
    (17,585
    )
    
    $
    (17,585
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock, net of
costs
    
    
    47,616
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72
    
    
    
    47,544
    
    
    
    
    
    
    
    Redemption of operating
partnership units
    
    
    (133
    )
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (39
    )
    
    
    (90
    )
    
    
    Conversion of operating
partnership units
to common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (47
    )
    
    
    2
    
    
    
    1,147
    
    
    
    (1,102
    )
    
    
    Issuance of limited partnership
interests in
real estate partnership
    
    
    2,376
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,376Restricted stock and LTIP unit grants
    
    
    1,465
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    194
    
    
    
    1,265
    
    
    
    Dividends and distributions
    
    
    (17,905
    )
    
    
    
    
    
    
    (14,324
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,296
    )
    
    
    (1,285
    )Balance at September 30, 2010
    
    $
    263,614
    
    
    
    
    
    
    $
    (189,219
    )
    
    $
    (6,011
    )
    
    $
    507
    
    
    $
    419,439
    
    
    $
    33,238
    
    
    $
    5,660
   5




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COGDELL SPENCER INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
 Cogdell Spencer Inc. StockholdersAccumulated
    
    
    
    
    
    
    
    
    
    
    Noncontrolling
    
    
    NoncontrollingOther
    
    
    
    
    
    
    Additional
    
    
    Interests in
    
    
    Interests inTotal
    
    
    Comprehensive
    
    
    Accumulated
    
    
    Comprehensive
    
    
    Common
    
    
    Paid-in
    
    
    Operating
    
    
    Real EstateEquity
    
    
    Income (Loss)
    
    
    Deficit
    
    
    Loss
    
    
    Stock
    
    
    Capital
    
    
    Partnership
    
    
    PartnershipsBalance at December 31, 2008
    
    $
    282,994
    
    
    
    
    
    
    $
    (77,438
    )
    
    $
    (5,106
    )
    
    $
    177
    
    
    $
    275,380
    
    
    $
    85,324
    
    
    $
    4,657Comprehensive loss:Net income (loss)
    
    
    (103,918
    )
    
    $
    (103,918
    )
    
    
    (71,285
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32,791
    )
    
    
    158Unrealized
gain on
interest
rate
swaps,
net of tax
    
    
    3,371
    
    
    
    3,371
    
    
    
    
    
    
    
    2,424
    
    
    
    
    
    
    
    
    
    
    
    366
    
    
    
    581Comprehensive loss
    
    
    (100,547
    )
    
    $
    (100,547
    )Issuance of common stock, net
of costs
    
    
    76,457
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    230
    
    
    
    76,227
    
    
    
    
    
    
    
    Conversion of operating
partnership units
to common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (478
    )
    
    
    18
    
    
    
    17,805
    
    
    
    (17,345
    )
    
    
    Restricted stock and LTIP unit
grants
    
    
    817
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    737
    
    
    
    Amorization of restricted
stock grants
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47
    
    
    
    28
    
    
    
    Dividends and distributions
    
    
    (16,572
    )
    
    
    
    
    
    
    (12,881
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,152
    )
    
    
    (539
    )Balance at September 30, 2009
    
    $
    243,224
    
    
    
    
    
    
    $
    (161,604
    )
    
    $
    (3,160
    )
    
    $
    425
    
    
    $
    369,539
    
    
    $
    33,167
    
    
    $
    4,857
   6




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##### Table of Contents



COGDELL SPENCER INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Nine Months EndedSeptember 30, 2010
    
    
    September 30, 2009Operating activities:Net loss
    
    $
    (11,509
    )
    
    $
    (103,918
    )Adjustments to reconcile net loss to cash provided by operating activities:Depreciation and amortization (including amounts in discontinued operations)
    
    
    24,558
    
    
    
    27,136Amortization of acquired above market leases and acquired below market
leases, net (including amounts in discontinued operations)
    
    
    (330
    )
    
    
    (410
    )Straight-line rental revenue
    
    
    (776
    )
    
    
    (407
    )Amortization of deferred finance costs and debt premium
    
    
    1,164
    
    
    
    1,190Provision for bad debts
    
    
    (116
    )
    
    
    1,642Deferred income taxes
    
    
    (4,873
    )
    
    
    (20,234
    )Deferred tax expense on intersegment profits
    
    
    (1,342
    )
    
    
    (1,068
    )Equity-based compensation
    
    
    1,160
    
    
    
    893Equity in earnings of unconsolidated real estate partnerships
    
    
    (5
    )
    
    
    (4
    )Change in fair value of interest rate swap agreements
    
    
    (670
    )
    
    
    (449
    )Debt extinguishment and interest rate derivative expense
    
    
    32
    
    
    
    2,501Impairment of goodwill, trade names and trademarks and intangible assets
    
    
    13,635
    
    
    
    120,920Gain on sale of real estate property
    
    
    (264
    )
    
    
    Changes in operating assets and liabilities:Tenant and accounts receivable and other assets
    
    
    4,110
    
    
    
    23,921Accounts payable and other liabilities
    
    
    282
    
    
    
    (15,059
    )Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    (11,044
    )
    
    
    6,191Net cash provided by operating activities
    
    
    14,012
    
    
    
    42,845Investing activities:Investment in real estate properties
    
    
    (32,825
    )
    
    
    (39,603
    )Proceeds from sales-type capital lease
    
    
    229
    
    
    
    229Proceeds from disposal of discontinued operations
    
    
    2,481
    
    
    
    Purchase of corporate property, plant and equipment
    
    
    (323
    )
    
    
    (1,586
    )Distributions received from unconsolidated real estate partnerships
    
    
    7
    
    
    
    8Increase in restricted cash
    
    
    (8,589
    )
    
    
    (224
    )Net cash used in investing activities
    
    
    (39,020
    )
    
    
    (41,176
    )Financing activities:Proceeds from mortgage notes payable
    
    
    20,650
    
    
    
    38,240Repayments of mortgage notes payable
    
    
    (22,622
    )
    
    
    (11,962
    )Proceeds from revolving credit facility
    
    
    14,000
    
    
    
    3,500Repayments to revolving credit facility
    
    
    (29,000
    )
    
    
    (48,000
    )Repayment of term loan
    
    
    
    
    
    
    (50,000
    )Net proceeds from sale of common stock
    
    
    47,616
    
    
    
    76,657Redemption of non-controlling interests in operating partnership
    
    
    (133
    )
    
    
    Dividends and distributions
    
    
    (15,887
    )
    
    
    (17,173
    )Equity contributions by partners in consolidated real estate partnerships
    
    
    2,376
    
    
    
    Distributions to noncontrolling interests in real estate partnerships
    
    
    (1,285
    )
    
    
    (539
    )Payment of financing costs
    
    
    (591
    )
    
    
    (1,287
    )Net cash provided by (used in) financing activities
    
    
    15,124
    
    
    
    (10,564
    )Decrease in cash and cash equivalents
    
    
    (9,884
    )
    
    
    (8,895
    )Balance at beginning of period
    
    
    25,914
    
    
    
    34,668Balance at end of period
    
    $
    16,030
    
    
    $
    25,773Supplemental disclosure of cash flow information:Cash paid for interest, net of capitalized interest
    
    $
    16,501
    
    
    $
    16,004Cash paid for income taxes
    
    $
    73
    
    
    $
    10Non-cash investing and financing activities:Investment in real estate properties included in accounts payable and
other liabilities
    
    $
    507
    
    
    $
    4,042Mortgage note payable assumed with purchase of real estate property
    
    
    15,580
    
    
    
    Accrued dividends and distributions
    
    
    5,839
    
    
    
    5,007Operating Partnership Units converted into common stock
    
    
    1,149
    
    
    
    17,345Equity-based compensation capitalized in real estate properties
    
    
    305
    
    
    
    
   7




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##### Table of Contents



COGDELL SPENCER INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Business
  2. Summary of Significant Accounting Policies
 Basis of Presentation
  Interim Financial Statements
  Use of Estimates in Financial Statements
   8




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##### Table of Contents



Concentrations and Credit Risk
    Fair Value
       Reclassification
   9




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##### Table of Contents



Recent Accounting Pronouncements
     3. Investments in Real Estate Partnerships
   
    
    Cogdell Spencer Medical Partners LLC, a Delaware limited liability company, founded
in 2008, has no assets or liabilities, and is 20.0% owned by the Company;
 
    
    BSB Health/MOB Limited Partnership No. 2, a Delaware limited partnership, founded in
2002, owns nine medical office buildings, and is 2.0% owned by the Company;
 
    
    Shannon Health/MOB Limited Partnership No. 1, a Delaware limited partnership,
founded in 2001, owns ten medical office buildings, and is 2.0% owned by the Company;
and
 
    
    McLeod Medical Partners, LLC, a South Carolina limited liability company, founded in
1982, owns three medical office buildings, and is 1.1% owned by the Company.
  
    
    Bonney Lake MOB Investors, LLC, a Washington limited liability company, founded in
2009, has one medical office building under construction, and is 61.7% owned by the
Company;
 
    
    Genesis Property Holdings, LLC, a Florida limited liability company, founded in
2007, owns one medical office building, and is 40.0% owned by the Company;
 
    
    Cogdell Health Campus MOB, LP, a Pennsylvania limited partnership, founded in 2006,
owns one medical office building, and is 80.9% owned by the Company;
 
    
    Mebane Medical Investors, LLC, a North Carolina limited liability company, founded
in 2006, owns one medical office building, and is 35.1% owned by the Company; and
 
    
    Rocky Mount MOB, LLC, a North Carolina limited liability company, founded in 2002,
owns one medical office building, and is 34.5% owned by the Company.
  10




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##### Table of Contents



September 30, 2010
    
    
    December 31, 2009Financial position:Total assets
    
    $
    54,276
    
    
    $
    54,725Total liabilities
    
    
    48,065
    
    
    
    48,672Members equity
    
    
    6,211
    
    
    
    6,053
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30, 2010
    
    
    September 30, 2009
    
    
    September 30, 2010
    
    
    September 30, 2009Results of operations:Total revenues
    
    $
    3,128
    
    
    $
    2,974
    
    
    $
    9,335
    
    
    $
    9,189Operating and general and
administrative expenses
    
    
    1,523
    
    
    
    1,624
    
    
    
    4,382
    
    
    
    4,503Net income (loss)
    
    
    89
    
    
    
    (137
    )
    
    
    571
    
    
    
    374
 4. Business Segments
   11




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##### Table of Contents



Design-BuildProperty
    
    
    and
    
    
    Intersegment
    
    
    UnallocatedOperations
    
    
    Development
    
    
    Eliminations
    
    
    and Other
    
    
    TotalRevenues:Rental revenue
    
    $
    22,788
    
    
    $
    
    
    
    $
    (23
    )
    
    $
    
    
    
    $
    22,765Design-Build contract revenue and other sales
    
    
    
    
    
    
    18,927
    
    
    
    (3,193
    )
    
    
    
    
    
    
    15,734Property management and other fees
    
    
    809
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    809Development management and other income
    
    
    
    
    
    
    2,290
    
    
    
    (2,289
    )
    
    
    
    
    
    
    1Total revenues
    
    
    23,597
    
    
    
    21,217
    
    
    
    (5,505
    )
    
    
    
    
    
    
    39,309Certain operating expenses:Property operating and management
    
    
    9,067
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,067Design-Build contracts and development management
    
    
    
    
    
    
    18,965
    
    
    
    (5,159
    )
    
    
    
    
    
    
    13,806Selling, general, and administrative
    
    
    
    
    
    
    4,226
    
    
    
    (23
    )
    
    
    
    
    
    
    4,203Total certain operating expenses
    
    
    9,067
    
    
    
    23,191
    
    
    
    (5,182
    )
    
    
    
    
    
    
    27,07614,530
    
    
    
    (1,974
    )
    
    
    (323
    )
    
    
    
    
    
    
    12,233Interest and other income
    
    
    145
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    151Corporate general and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,481
    )
    
    
    (2,481
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,851
    )
    
    
    (5,851
    )Interest rate derivative expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    (7
    )Benefit from income taxes applicable to funds from
operations modified
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,055
    
    
    
    2,055Non-real estate related depreciation and amortization
    
    
    
    
    
    
    (247
    )
    
    
    
    
    
    
    (61
    )
    
    
    (308
    )Earnings from unconsolidated real estate partnerships,
before real estate related depreciation and amortization
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    (476
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (476
    )Funds from operations modified (FFOM)
    
    
    14,205
    
    
    
    (2,221
    )
    
    
    (323
    )
    
    
    (6,339
    )
    
    
    5,322Amortization of intangibles related to purchase
accounting, net of income tax benefit
    
    
    (42
    )
    
    
    (571
    )
    
    
    
    
    
    
    239
    
    
    
    (374
    )Funds from operations (FFO)
    
    
    14,163
    
    
    
    (2,792
    )
    
    
    (323
    )
    
    
    (6,100
    )
    
    
    4,948Real estate related depreciation and amortization
    
    
    (7,375
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,375
    )Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    476
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    476Net income (loss)
    
    
    7,264
    
    
    
    (2,792
    )
    
    
    (323
    )
    
    
    (6,100
    )
    
    
    (1,951
    )Net income (loss) attributable to the noncontrolling interest in:Real estate partnerships
    
    
    (172
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (172
    )Operating partnership
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    285
    
    
    
    285Net income (loss) attributable to Cogdell Spencer Inc.
    
    $
    7,092
    
    
    $
    (2,792
    )
    
    $
    (323
    )
    
    $
    (5,815
    )
    
    $
    (1,838
    )Total assets
    
    $
    592,538
    
    
    $
    159,767
    
    
    $
    
    
    
    $
    366
    
    
    $
    752,671
  12




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##### Table of Contents



Design-BuildProperty
    
    
    and
    
    
    Intersegment
    
    
    UnallocatedOperations
    
    
    Development
    
    
    Eliminations
    
    
    and Other
    
    
    TotalRevenues:Rental revenue
    
    $
    19,983
    
    
    $
    
    
    
    $
    (23
    )
    
    $
    
    
    
    $
    19,960Design-Build contract revenue and other sales
    
    
    
    
    
    
    40,644
    
    
    
    (10,346
    )
    
    
    
    
    
    
    30,298Property management and other fees
    
    
    816
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    816Development management and other income
    
    
    
    
    
    
    723
    
    
    
    (484
    )
    
    
    
    
    
    
    239Total revenues
    
    
    20,799
    
    
    
    41,367
    
    
    
    (10,853
    )
    
    
    
    
    
    
    51,313Certain operating expenses:Property operating and management
    
    
    8,103
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,103Design-Build contracts and development management
    
    
    
    
    
    
    31,169
    
    
    
    (10,003
    )
    
    
    
    
    
    
    21,166Selling, general, and administrative
    
    
    
    
    
    
    6,098
    
    
    
    (23
    )
    
    
    
    
    
    
    6,075Total certain operating expenses
    
    
    8,103
    
    
    
    37,267
    
    
    
    (10,026
    )
    
    
    
    
    
    
    35,34412,696
    
    
    
    4,100
    
    
    
    (827
    )
    
    
    
    
    
    
    15,969Interest and other income
    
    
    134
    
    
    
    24
    
    
    
    
    
    
    
    3
    
    
    
    161Corporate general and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,801
    )
    
    
    (1,801
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,039
    )
    
    
    (5,039
    )Debt extinguishment and interest rate derivative expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10
    )
    
    
    (10
    )Benefit from income taxes applicable to funds from
operations modified
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    6Non-real estate related depreciation and amortization
    
    
    
    
    
    
    (190
    )
    
    
    
    
    
    
    (57
    )
    
    
    (247
    )Earnings from unconsolidated real estate partnerships,
before real estate related depreciation and amortization
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    (206
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (206
    )Income from discontinued operations, before real estate
related depreciation and amortization
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    (33
    )
    
    
    (4
    )Funds from operations modified (FFOM)
    
    
    12,652
    
    
    
    3,934
    
    
    
    (827
    )
    
    
    (6,931
    )
    
    
    8,828Amortization of intangibles related to purchase
accounting, net of income tax benefit
    
    
    (42
    )
    
    
    (536
    )
    
    
    
    
    
    
    225
    
    
    
    (353
    )Funds from operations (FFO)
    
    
    12,610
    
    
    
    3,398
    
    
    
    (827
    )
    
    
    (6,706
    )
    
    
    8,475Real estate related depreciation and amortization
    
    
    (7,225
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,225
    )Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    206
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    206Net income (loss)
    
    
    5,591
    
    
    
    3,398
    
    
    
    (827
    )
    
    
    (6,706
    )
    
    
    1,456Net loss attributable to the noncontrolling interest in:Real estate partnerships
    
    
    (17
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17
    )Operating partnership
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (191
    )
    
    
    (191
    )Net income (loss) attributable to Cogdell Spencer Inc.
    
    $
    5,574
    
    
    $
    3,398
    
    
    $
    (827
    )
    
    $
    (6,897
    )
    
    $
    1,248Total assets
    
    $
    562,911
    
    
    $
    199,116
    
    
    $
    
    
    
    $
    476
    
    
    $
    762,503
  13




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##### Table of Contents



Design-BuildProperty
    
    
    and
    
    
    Intersegment
    
    
    UnallocatedOperations
    
    
    Development
    
    
    Eliminations
    
    
    and Other
    
    
    TotalRevenues:Rental revenue
    
    $
    65,073
    
    
    $
    
    
    
    $
    (69
    )
    
    $
    
    
    
    $
    65,004Design-Build contract revenue and other sales
    
    
    
    
    
    
    82,356
    
    
    
    (15,950
    )
    
    
    
    
    
    
    66,406Property management and other fees
    
    
    2,388
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,388Development management and other income
    
    
    
    
    
    
    5,444
    
    
    
    (5,322
    )
    
    
    
    
    
    
    122Total revenues
    
    
    67,461
    
    
    
    87,800
    
    
    
    (21,341
    )
    
    
    
    
    
    
    133,920Certain operating expenses:Property operating and management
    
    
    25,652
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,652Design-Build contracts and development management
    
    
    
    
    
    
    68,553
    
    
    
    (18,721
    )
    
    
    
    
    
    
    49,832Selling, general, and administrative
    
    
    
    
    
    
    12,721
    
    
    
    (69
    )
    
    
    
    
    
    
    12,652Impairment charges
    
    
    
    
    
    
    13,635
    
    
    
    
    
    
    
    
    
    
    
    13,635Total certain operating expenses
    
    
    25,652
    
    
    
    94,909
    
    
    
    (18,790
    )
    
    
    
    
    
    
    101,77141,809
    
    
    
    (7,109
    )
    
    
    (2,551
    )
    
    
    
    
    
    
    32,149Interest and other income
    
    
    419
    
    
    
    3
    
    
    
    
    
    
    
    24
    
    
    
    446Corporate general and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,198
    )
    
    
    (9,198
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,332
    )
    
    
    (16,332
    )Interest rate derivative expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32
    )
    
    
    (32
    )Benefit from income taxes applicable to funds from
operations modified
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,024
    
    
    
    5,024Non-real estate related depreciation and amortization
    
    
    
    
    
    
    (704
    )
    
    
    
    
    
    
    (179
    )
    
    
    (883
    )Earnings from unconsolidated real estate partnerships,
before real estate related depreciation and amortization
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    (1,571
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,571
    )Income from discontinued operations before gain on sale
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    6Funds from operations modified (FFOM)
    
    
    40,680
    
    
    
    (7,810
    )
    
    
    (2,551
    )
    
    
    (20,696
    )
    
    
    9,623Amortization of intangibles related to purchase
accounting, net of income tax benefit
    
    
    (127
    )
    
    
    (1,711
    )
    
    
    
    
    
    
    717
    
    
    
    (1,121
    )Funds from operations (FFO)
    
    
    40,553
    
    
    
    (9,521
    )
    
    
    (2,551
    )
    
    
    (19,979
    )
    
    
    8,502Real estate related depreciation and amortization
    
    
    (21,846
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,846
    )Gain on sale of real estate property
    
    
    264
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    264Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    1,571
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,571Net income (loss)
    
    
    20,542
    
    
    
    (9,521
    )
    
    
    (2,551
    )
    
    
    (19,979
    )
    
    
    (11,509
    )Net loss attributable to the noncontrolling interest in:Real estate partnerships
    
    
    (660
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (660
    )Operating partnership
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,595
    
    
    
    1,595Net income (loss) attributable to Cogdell Spencer Inc.
    
    $
    19,882
    
    
    $
    (9,521
    )
    
    $
    (2,551
    )
    
    $
    (18,384
    )
    
    $
    (10,574
    )Total assets
    
    $
    592,538
    
    
    $
    159,767
    
    
    $
    
    
    
    $
    366
    
    
    $
    752,671
  14




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##### Table of Contents



Design-BuildProperty
    
    
    and
    
    
    Intersegment
    
    
    UnallocatedOperations
    
    
    Development
    
    
    Eliminations
    
    
    and Other
    
    
    TotalRevenues:Rental revenue
    
    $
    59,179
    
    
    $
    
    
    
    $
    (69
    )
    
    $
    
    
    
    $
    59,110Design-Build contract revenue and other sales
    
    
    
    
    
    
    133,813
    
    
    
    (20,414
    )
    
    
    
    
    
    
    113,399Property management and other fees
    
    
    2,530
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,530Development management and other income
    
    
    
    
    
    
    5,793
    
    
    
    (2,527
    )
    
    
    
    
    
    
    3,266Total revenues
    
    
    61,709
    
    
    
    139,606
    
    
    
    (23,010
    )
    
    
    
    
    
    
    178,305Certain operating expenses:Property operating and management
    
    
    23,789
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,789Design-Build contracts and development management
    
    
    
    
    
    
    112,236
    
    
    
    (19,663
    )
    
    
    
    
    
    
    92,573Selling, general, and administrative
    
    
    
    
    
    
    14,758
    
    
    
    (69
    )
    
    
    
    
    
    
    14,689Impairment charges
    
    
    
    
    
    
    120,920
    
    
    
    
    
    
    
    
    
    
    
    120,920Total certain operating expenses
    
    
    23,789
    
    
    
    247,914
    
    
    
    (19,732
    )
    
    
    
    
    
    
    251,97137,920
    
    
    
    (108,308
    )
    
    
    (3,278
    )
    
    
    
    
    
    
    (73,666
    )Interest and other income
    
    
    404
    
    
    
    28
    
    
    
    
    
    
    
    24
    
    
    
    456Corporate general and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,529
    )
    
    
    (6,529
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,588
    )
    
    
    (16,588
    )Debt extinguishment and interest rate derivative expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,501
    )
    
    
    (2,501
    )Benefit from income taxes applicable to funds from
operations modified
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,316
    
    
    
    20,316Non-real estate related depreciation and amortization
    
    
    
    
    
    
    (580
    )
    
    
    
    
    
    
    (168
    )
    
    
    (748
    )Earnings from unconsolidated real estate partnerships,
before real estate related depreciation and amortization
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    (676
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (676
    )Income from discontinued operations, before real estate
related depreciation and amortization
    
    
    80
    
    
    
    
    
    
    
    
    
    
    
    (103
    )
    
    
    (23
    )Funds from operations modified (FFOM)
    
    
    37,741
    
    
    
    (108,860
    )
    
    
    (3,278
    )
    
    
    (5,549
    )
    
    
    (79,946
    )Amortization of intangibles related to purchase
accounting, net of income tax benefit
    
    
    (127
    )
    
    
    (4,357
    )
    
    
    
    
    
    
    1,749
    
    
    
    (2,735
    )Funds from operations (FFO)
    
    
    37,614
    
    
    
    (113,217
    )
    
    
    (3,278
    )
    
    
    (3,800
    )
    
    
    (82,681
    )Real estate related depreciation and amortization
    
    
    (21,913
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,913
    )Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    676
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    676Net income (loss)
    
    
    16,377
    
    
    
    (113,217
    )
    
    
    (3,278
    )
    
    
    (3,800
    )
    
    
    (103,918
    )Net income (loss) attributable to the noncontrolling interest in:Real estate partnerships
    
    
    (158
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (158
    )Operating partnership
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,791
    
    
    
    32,791Net income (loss) attributable to Cogdell Spencer Inc.
    
    $
    16,219
    
    
    $
    (113,217
    )
    
    $
    (3,278
    )
    
    $
    28,991
    
    
    $
    (71,285
    )Total assets
    
    $
    562,911
    
    
    $
    199,116
    
    
    $
    
    
    
    $
    476
    
    
    $
    762,503
 5. Acquisitions
  Building and improvements
    
    $
    13,796Land improvements
    
    
    10Acquired in place lease value and deferred leasing costs
    
    
    2,618Acquired below market ground lease
    
    
    214Total purchase price allocated, net of cash acquired
    
    $
    16,638
  15




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##### Table of Contents



For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenue
    
    $
    39,471
    
    
    $
    52,049
    
    
    $
    135,476
    
    
    $
    180,378Net income (loss)
    
    
    (2,350
    )
    
    
    1,470
    
    
    
    (11,822
    )
    
    
    (103,845
    )Net income (loss) attributable to Cogdell Spencer Inc.
    
    
    (2,183
    )
    
    
    1,260
    
    
    
    (10,842
    )
    
    
    (71,227
    )Net income (loss) per share attributable to Cogdell
Spencer Inc.  basic and diluted
    
    $
    (0.04
    )
    
    $
    0.03
    
    
    $
    (0.23
    )
    
    $
    (2.43
    )
 6. Discontinued Operations
  For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues-Rental revenues
    
    $
    
    
    
    $
    89
    
    
    $
    139
    
    
    $
    266Total revenues
    
    
    
    
    
    
    89
    
    
    
    139
    
    
    
    266Expenses:Property operating and management
    
    
    
    
    
    
    60
    
    
    
    130
    
    
    
    186Depreciation and amortization
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    104Interest expense
    
    
    
    
    
    
    33
    
    
    
    3
    
    
    
    103Total expenses
    
    
    
    
    
    
    128
    
    
    
    133
    
    
    
    393Income (loss) from discontinued operations
before gain on sale of real estate property
    
    
    
    
    
    
    (39
    )
    
    
    6
    
    
    
    (127
    )Gain on sale of real estate property
    
    
    
    
    
    
    
    
    
    
    264
    
    
    
    Total discontinued operations
    
    $
    
    
    
    $
    (39
    )
    
    $
    270
    
    
    $
    (127
    )
 7. Contracts
  September 30,
    
    
    December 31,2010
    
    
    2009Costs and estimated earnings on uncompleted contracts
    
    $
    44,753
    
    
    $
    79,374Billings to date
    
    
    (46,139
    )
    
    
    (90,701
    )Net billings in excess of costs and estimated earnings
    
    $
    (1,386
    )
    
    $
    (11,327
    )
  16




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##### Table of Contents



September 30,
    
    
    December 31,2010
    
    
    2009Costs and estimated earnings in excess of billings (1)
    
    $
    759
    
    
    $
    1,862Billings in excess of costs and estimated earnings
    
    
    (2,145
    )
    
    
    (13,189
    )Net billings in excess of costs and estimated earnings
    
    $
    (1,386
    )
    
    $
    (11,327
    )
 (1)
    
    Included in Other assets in the consolidated balance sheet 8. Goodwill and Intangible Assets
    Recorded Value as
    
    
    Fair Value Measurement as of June 30, 2010Description
    
    of June 30, 2010
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total LossesGoodwill
    
    $
    102,195
    
    
    $
    
    
    
    $
    
    
    
    $
    102,195
    
    
    $
    (6,488
    )Trade names and trademarks
    
    
    34,093
    
    
    
    
    
    
    
    
    
    
    
    34,093
    
    
    
    (7,147
    )Acquired signed contracts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,736
    
    
    
    Acquired proposals
    
    
    895
    
    
    
    
    
    
    
    
    
    
    
    1,101
    
    
    
    Acquired customer relationships
    
    
    1,399
    
    
    
    
    
    
    
    
    
    
    
    2,475
    
    
    
    $
    138,582
    
    
    $
    
    
    
    $
    
    
    
    $
    144,600
    
    
    $
    (13,635
    )
    17




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##### Table of Contents



Recorded Value as
    
    
    Fair Value Measurement as of March 31, 2009Description
    
    of March 31, 2009
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total LossesGoodwill
    
    $
    108,683
    
    
    $
    
    
    
    $
    
    
    
    $
    108,683
    
    
    $
    (71,755
    )Trade names and trademarks
    
    
    41,240
    
    
    
    
    
    
    
    
    
    
    
    41,240
    
    
    
    (34,728
    )Acquired signed contracts
    
    
    1,398
    
    
    
    
    
    
    
    
    
    
    
    5,281
    
    
    
    Acquired proposals
    
    
    2,129
    
    
    
    
    
    
    
    
    
    
    
    2,129
    
    
    
    (1,833
    )Acquired customer relationships
    
    
    1,789
    
    
    
    
    
    
    
    
    
    
    
    1,789
    
    
    
    (12,604
    )$
    155,239
    
    
    $
    
    
    
    $
    
    
    
    $
    159,122
    
    
    $
    (120,920
    )
       18




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##### Table of Contents



Recorded Value
    
    
    Amortization for the
    
    
    Impairment Charges
    
    
    Recorded Valueas of
    
    
    Three Months Ended
    
    
    Recorded as of
    
    
    as ofLocation of Asset
    
    September 30, 2010
    
    
    September 30, 2010
    
    
    September 30, 2010
    
    
    June 30, 2010Goodwill
    
    Goodwill
    
    $
    102,195
    
    
    
    n/a
    
    
    $
    
    
    
    $
    102,195Trade names and trademarks
    
    Trade names and trademarks
    
    
    34,093
    
    
    
    n/a
    
    
    
    
    
    
    
    34,093Acquired signed contracts
    
    Intangible assets
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    Acquired proposals
    
    Intangible assets
    
    
    447
    
    
    
    (448
    )
    
    
    
    
    
    
    895Acquired customer relationships
    
    Intangible assets
    
    
    1,276
    
    
    
    (123
    )
    
    
    
    
    
    
    1,399$
    138,011
    
    
    $
    (571
    )
    
    $
    
    
    
    $
    138,582
 Recorded Value
    
    
    Amortization for the
    
    
    Impairment Charges
    
    
    Recorded Valueas of
    
    
    Six Months Ended
    
    
    Recorded as of
    
    
    as ofLocation of Asset
    
    June 30, 2010
    
    
    June 30, 2010
    
    
    June 30, 2010
    
    
    December 31, 2009Goodwill
    
    Goodwill
    
    $
    102,195
    
    
    
    n/a
    
    
    $
    (6,488
    )
    
    $
    108,683Trade names and trademarks
    
    Trade names and trademarks
    
    
    34,093
    
    
    
    n/a
    
    
    
    (7,147
    )
    
    
    41,240Acquired signed contracts
    
    Intangible assets
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    Acquired proposals
    
    Intangible assets
    
    
    895
    
    
    
    (894
    )
    
    
    
    
    
    
    1,789Acquired customer relationships
    
    Intangible assets
    
    
    1,399
    
    
    
    (246
    )
    
    
    
    
    
    
    1,645$
    138,582
    
    
    $
    (1,140
    )
    
    $
    (13,635
    )
    
    $
    153,357
 Recorded Value
    
    
    Amortization for the
    
    
    Impairment Charges
    
    
    Recorded Valueas of
    
    
    Nine Months Ended
    
    
    Recorded as of
    
    
    as ofLocation of Asset
    
    December 31, 2009
    
    
    December 31, 2009
    
    
    March 31, 2009
    
    
    March 31, 2009Goodwill
    
    Goodwill
    
    $
    108,683
    
    
    
    n/a
    
    
    $
    (71,755
    )
    
    $
    108,683Trade names and trademarks
    
    Trade names and trademarks
    
    
    41,240
    
    
    
    n/a
    
    
    
    (34,728
    )
    
    
    41,240Acquired signed contracts
    
    Intangible assets
    
    
    
    
    
    $
    (1,398
    )
    
    
    
    
    
    
    1,398Acquired proposals
    
    Intangible assets
    
    
    1,789
    
    
    
    (340
    )
    
    
    (1,833
    )
    
    
    2,129Acquired customer relationships
    
    Intangible assets
    
    
    1,645
    
    
    
    (144
    )
    
    
    (12,604
    )
    
    
    1,789$
    153,357
    
    
    $
    (1,882
    )
    
    $
    (120,920
    )
    
    $
    155,239
  Nine Months Ended September 30, 2010
    
    
    Year Ended December 31, 2009Accumulated
    
    
    Net
    
    
    
    
    
    
    Accumulated
    
    
    NetGross Amount
    
    
    Impairment
    
    
    Carrying Value
    
    
    Gross Amount
    
    
    Impairment
    
    
    Carrying ValueGoodwill as of January 1
    
    $
    180,438
    
    
    $
    71,755
    
    
    $
    108,683
    
    
    $
    180,438
    
    
    $
    
    
    
    $
    180,438Accumulated impairment losses
    
    
    
    
    
    
    6,488
    
    
    
    (6,488
    )
    
    
    
    
    
    
    71,755
    
    
    
    (71,755
    )Goodwill at end of period
    
    $
    180,438
    
    
    $
    78,243
    
    
    $
    102,195
    
    
    $
    180,438
    
    
    $
    71,755
    
    
    $
    108,683Trade names and trademarks as of January 1
    
    $
    75,968
    
    
    $
    34,728
    
    
    $
    41,240
    
    
    $
    75,968
    
    
    $
    
    
    
    $
    75,968Accumulated impairment losses
    
    
    
    
    
    
    7,147
    
    
    
    (7,147
    )
    
    
    
    
    
    
    34,728
    
    
    
    (34,728
    )Trade names and trademarks at end of period
    
    $
    75,968
    
    
    $
    41,875
    
    
    $
    34,093
    
    
    $
    75,968
    
    
    $
    34,728
    
    
    $
    41,240
  September 30, 2010
    
    
    December 31, 2009Accumulated
    
    
    
    
    
    
    AccumulatedGross Amount
    
    
    Amortization
    
    
    Gross Amount
    
    
    AmortizationAcquired signed contracts
    
    $
    13,253
    
    
    $
    13,253
    
    
    $
    13,253
    
    
    $
    13,253Acquired proposals
    
    
    2,129
    
    
    
    1,682
    
    
    
    2,129
    
    
    
    340Acquired customer relationships
    
    
    1,789
    
    
    
    513
    
    
    
    1,789
    
    
    
    144Acquired above market leases
    
    
    1,559
    
    
    
    1,100
    
    
    
    1,559
    
    
    
    955Acquired in place lease value and deferred leasing costs
    
    
    43,284
    
    
    
    29,980
    
    
    
    40,666
    
    
    
    27,512Acquired ground leases
    
    
    3,777
    
    
    
    614
    
    
    
    3,562
    
    
    
    515Acquired property management contracts
    
    
    2,097
    
    
    
    721
    
    
    
    2,097
    
    
    
    594Total amortizing intangible assets
    
    $
    67,888
    
    
    $
    47,863
    
    
    $
    65,055
    
    
    $
    43,313
  19




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##### Table of Contents



FutureAmortizationFor the year ending:
    
    ExpenseRemainder of 2010
    
    $
    1,4342011
    
    
    3,8912012
    
    
    2,9022013
    
    
    1,9742014
    
    
    1,830Thereafter
    
    
    7,994$
    20,025
 9. Mortgage Notes Payable and Borrowing Agreements
 Scheduled Maturities
  For the year ending:
    
    TotalRemainder of 2010
    
    $
    7,4852011
    
    
    179,1862012
    
    
    24,8592013
    
    
    15,7222014
    
    
    63,071Thereafter
    
    
    121,308$
    411,631
      20




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##### Table of Contents



10. Derivative Financial Instruments
  As of September 30, 2010
    
    
    September 30, 2010
    
    
    December 31, 2009Notional
    
    
    
    
    
    
    
    
    Effective
    
    
    ExpirationEntity/Property
    
    Amount
    
    
    Receive Rate
    
    Pay Rate
    
    
    Date
    
    
    Date
    
    
    Asset
    
    
    Liability
    
    
    Asset
    
    
    LiabilityMEA Holdings, LLC
    
    $
    100,000
    
    
    1 Month LIBOR
    
    
    2.82
    %
    
    
    4/1/2008
    
    
    
    3/1/2011
    
    
    $
    
    
    
    $
    1,060
    
    
    $
    
    
    
    $
    2,397Cogdell Spencer LP
    
    
    30,000
    
    
    1 Month LIBOR
    
    
    3.11
    %
    
    
    10/15/2008
    
    
    
    3/10/2011
    
    
    
    
    
    
    
    375
    
    
    
    
    
    
    
    697St. Francis Community MOB LLC
    
    
    6,733
    
    
    1 Month LIBOR
    
    
    3.32
    %
    
    
    10/15/2008
    
    
    
    6/15/2011
    
    
    
    
    
    
    
    153
    
    
    
    
    
    
    
    246St. Francis Medical Plaza (Greenville)
    
    
    7,233
    
    
    1 Month LIBOR
    
    
    3.32
    %
    
    
    10/15/2008
    
    
    
    6/15/2011
    
    
    
    
    
    
    
    164
    
    
    
    
    
    
    
    264Beaufort Medical Plaza
    
    
    4,668
    
    
    1 Month LIBOR
    
    
    3.80
    %
    
    
    8/18/2008
    
    
    
    8/18/2011
    
    
    
    
    
    
    
    148
    
    
    
    
    
    
    
    216East Jefferson Medical Plaza
    
    
    11,600
    
    
    1 Month LIBOR
    
    
    1.80
    %
    
    
    1/15/2009
    
    
    
    12/23/2011
    
    
    
    
    
    
    
    215
    
    
    
    
    
    
    
    121River Hills Medical Plaza
    
    
    3,384
    
    
    1 Month LIBOR
    
    
    1.78
    %
    
    
    1/15/2009
    
    
    
    1/31/2012
    
    
    
    
    
    
    
    62
    
    
    
    
    
    
    
    33HealthPartners Medical Office Building
    
    
    5,900
    
    
    1 Month LIBOR
    
    
    3.55
    %
    
    
    6/1/2010
    
    
    
    11/1/2014
    
    
    
    
    
    
    
    1,121
    
    
    
    
    
    
    
    186Lancaster ASC MOB
    
    
    10,452
    
    
    1 Month LIBOR
    
    
    4.03
    %
    
    
    3/14/2008
    
    
    
    3/2/2015
    
    
    
    
    
    
    
    1,221
    
    
    
    
    
    
    
    567Woodlands Center for Specialized Medicine
    
    
    16,682
    
    
    1 Month LIBOR
    
    
    4.71
    %
    
    
    4/1/2010
    
    
    
    10/1/2018
    
    
    
    
    
    
    
    3,144
    
    
    
    
    
    
    
    1,166Medical Center Physicians Tower
    
    
    14,770
    
    
    1 Month LIBOR
    
    
    3.69
    %
    
    
    9/1/2010
    
    
    
    3/1/2019
    
    
    
    
    
    
    
    1,191
    
    
    
    271
    
    
    
    University Physicians  Grants Ferry
    
    
    10,439
    
    
    1 Month LIBOR
    
    
    3.70
    %
    
    
    10/1/2010
    
    
    
    4/1/2019
    
    
    
    
    
    
    
    1,717
    
    
    
    217
    
    
    
    $
    
    
    
    $
    10,571
    
    
    $
    488
    
    
    $
    5,893
  21




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##### Table of Contents



Three Months Ended September 30, 2010Location of Gain or
    
    
    Gain or (Loss)(Loss) Reclassified
    
    
    Reclassified fromGain or (Loss)
    
    
    from AOCI,
    
    
    AOCI,Recognized in AOCI,
    
    
    Noncontrolling
    
    
    NoncontrollingNoncontrolling
    
    
    Interests in
    
    
    Interests inInterests in
    
    
    Operating
    
    
    Operating
    
    
    Location of Gain or
    
    
    Gain or (Loss)Operating
    
    
    Partnership, and
    
    
    Partnership, and
    
    
    (Loss) Recognized -
    
    
    Recognized -Partnership, and
    
    
    Noncontrolling
    
    
    Noncontrolling
    
    
    Ineffective Portion
    
    
    Ineffective PortionNoncontrolling
    
    
    Interests in Real
    
    
    Interests in Real
    
    
    and Amount
    
    
    and AmountInterests in Real
    
    
    Estate Partnerships
    
    
    Estate Partnerships
    
    
    Excluded from
    
    
    Excluded fromEstate Partnerships -
    
    
    into Income -
    
    
    into Income -
    
    
    Effectiveness
    
    
    EffectivenessEffective Portion (1)
    
    
    Effective Portion
    
    
    Effective Portion (1)
    
    
    Testing

    
    TestingInterest rate swap agreements
    
    $
    (1,680
    )
    
    Interest Expense
    
    $
    (1,309
    )
    
    Interest rate derivative expense
    
    $
    (7
    )
  Three Months Ended September 30, 2009Location of Gain or
    
    
    Gain or (Loss)(Loss) Reclassified
    
    
    Reclassified fromGain or (Loss)
    
    
    from AOCI,
    
    
    AOCI,Recognized in AOCI,
    
    
    Noncontrolling
    
    
    NoncontrollingNoncontrolling
    
    
    Interests in
    
    
    Interests inInterests in
    
    
    Operating
    
    
    Operating
    
    
    Location of Gain or
    
    
    Gain or (Loss)Operating
    
    
    Partnership, and
    
    
    Partnership, and
    
    
    (Loss) Recognized -
    
    
    Recognized -Partnership, and
    
    
    Noncontrolling
    
    
    Noncontrolling
    
    
    Ineffective Portion
    
    
    Ineffective PortionNoncontrolling
    
    
    Interests in Real
    
    
    Interests in Real
    
    
    and Amount
    
    
    and AmountInterests in Real
    
    
    Estate Partnerships
    
    
    Estate Partnerships
    
    
    Excluded from
    
    
    Excluded fromEstate Partnerships -
    
    
    into Income -
    
    
    into Income -
    
    
    Effectiveness
    
    
    EffectivenessEffective Portion (1)
    
    
    Effective Portion
    
    
    Effective Portion (1)
    
    
    Testing

    
    TestingInterest rate swap agreements
    
    $
    (1,435
    )
    
    Interest Expense
    
    $
    (649
    )
    
    Interest rate derivative expense
    
    $
    (10
    )
  Nine Months Ended September 30, 2010Location of Gain or
    
    
    Gain or (Loss)(Loss) Reclassified
    
    
    Reclassified fromGain or (Loss)
    
    
    from AOCI,
    
    
    AOCI,Recognized in AOCI,
    
    
    Noncontrolling
    
    
    NoncontrollingNoncontrolling
    
    
    Interests in
    
    
    Interests inInterests in
    
    
    Operating
    
    
    Operating
    
    
    Location of Gain or
    
    
    Gain or (Loss)Operating
    
    
    Partnership, and
    
    
    Partnership, and
    
    
    (Loss) Recognized -
    
    
    Recognized -Partnership, and
    
    
    Noncontrolling
    
    
    Noncontrolling
    
    
    Ineffective Portion
    
    
    Ineffective PortionNoncontrolling
    
    
    Interests in Real
    
    
    Interests in Real
    
    
    and Amount
    
    
    and AmountInterests in Real
    
    
    Estate Partnerships
    
    
    Estate Partnerships
    
    
    Excluded from
    
    
    Excluded fromEstate Partnerships -
    
    
    into Income -
    
    
    into Income -
    
    
    Effectiveness
    
    
    EffectivenessEffective Portion (1)
    
    
    Effective Portion
    
    
    Effective Portion (1)
    
    
    Testing
    
    TestingInterest rate swap agreements
    
    $
    (6,076
    )
    
    Interest Expense
    
    $
    (3,304
    )
    
    Interest rate derivative expense
    
    $
    (32
    )
  22




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##### Table of Contents



Nine Months Ended September 30, 2009Location of Gain or
    
    
    Gain or (Loss)(Loss) Reclassified
    
    
    Reclassified fromGain or (Loss)
    
    
    from AOCI,
    
    
    AOCI,Recognized in AOCI,
    
    
    Noncontrolling
    
    
    NoncontrollingNoncontrolling
    
    
    Interests in
    
    
    Interests inInterests in
    
    
    Operating
    
    
    Operating
    
    
    Location of Gain or
    
    
    Gain or (Loss)Operating
    
    
    Partnership, and
    
    
    Partnership, and
    
    
    (Loss) Recognized -
    
    
    Recognized -Partnership, and
    
    
    Noncontrolling
    
    
    Noncontrolling
    
    
    Ineffective Portion
    
    
    Ineffective PortionNoncontrolling
    
    
    Interests in Real
    
    
    Interests in Real
    
    
    and Amount
    
    
    and AmountInterests in Real
    
    
    Estate Partnerships
    
    
    Estate Partnerships
    
    
    Excluded from
    
    
    Excluded fromEstate Partnerships -
    
    
    into Income -
    
    
    into Income -
    
    
    Effectiveness
    
    
    EffectivenessEffective Portion (1)
    
    
    Effective Portion
    
    
    Effective Portion (1)
    
    
    Testing

    
    TestingInterest rate swap
agreements
    
    $
    3,371
    
    
    Interest Expense
    
    $
    (3,389
    )
    
    Interest rate derivative expense
    
    $
    (1,539
    )
 
 (1)
    
    Refer to the Condensed Consolidated Statement of Changes in Equity in this Form
10-Q, which summarizes the activity in Unrealized gain on interest rate swaps, net of tax related
to the interest rate swap agreements.  Fair Value Measurements as ofSeptember 30, 2010Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Liabilities-Derivative financial instruments
    
    $
    10,571
    
    
    $
    
    
    
    $
    10,571
    
    
    $
    
 Fair Value Measurements as ofDecember 31, 2009Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Assets-Derivative financial instruments
    
    $
    488
    
    
    $
    
    
    
    $
    488
    
    
    $
    Liabilities-Derivative financial instruments
    
    $
    (5,893
    )
    
    $
    
    
    
    $
    (5,893
    )
    
    $
    
    23




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##### Table of Contents



11. Equity
 Cogdell Spencer Inc. Stockholders Equity
  For the Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009Shares of common stock at beginning of period
    
    
    42,729
    
    
    
    17,699Issuance of common stock
    
    
    7,208
    
    
    
    23,000Conversion of OP units to common stock
    
    
    215
    
    
    
    1,835Restricted stock grants
    
    
    557
    
    
    
    13Shares of common stock at end of period
    
    
    50,709
    
    
    
    42,547
  For the Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009Net loss attributable to Cogdell Spencer Inc.
    
    $
    (10,574
    )
    
    $
    (71,285
    )Increase in Cogdell Spencer Inc. additional paid-in capital for the
conversion of OP units into common stock
    
    
    1,147
    
    
    
    17,805Change from net loss attributable to Cogdell Spencer Inc. and
transfers from noncontrolling interests
    
    $
    (9,427
    )
    
    $
    (53,480
    )
   Noncontrolling Interests in Operating Partnership
  Dividends and Distributions
   24




---



##### Table of Contents



12. Incentive and Share-Based Compensation
           25




---



##### Table of Contents



WeightedRestricted
    
    
    
    
    
    
    AverageStock
    
    
    LTIP Units
    
    
    Grant PriceUnvested balance at December 31, 2009
    
    
    5
    
    
    
    120
    
    
    $
    15.43Granted
    
    
    556
    
    
    
    134
    
    
    
    6.37Vested
    
    
    (40
    )
    
    
    (139
    )
    
    
    6.28Unvested balance at September 30, 2010
    
    
    521
    
    
    
    115
    
    
    $
    7.96
 13. Related Party Transactions
   26




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 When used in this discussion and elsewhere in this Quarterly Report on Form 10-Q , the words
believes, anticipates, projects, should, estimates, expects, and similar expressions
are intended to identify forward-looking statements with the meaning of that term in Section 27A of
the Securities Act of 1933, as amended (the Securities Act), and in Section 21F of the Securities
and Exchange Act of 1934, as amended. Actual results may differ materially due to uncertainties
including:
 
    
    the Companys business strategy;
 
    
    the Companys ability to comply with financial covenants in its debt instruments;
 
    
    the Companys access to capital;
 
    
    the Companys ability to obtain future financing
arrangements, including refinancing existing arrangements;
 
    
    estimates relating to the Companys future distributions;
 
    
    the Companys understanding of the Companys competition;
 
    
    the Companys ability to renew the Companys ground leases;
 
    
    legislative and regulatory changes (including changes to laws governing the taxation of REITs
and individuals);
 
    
    increases in costs of borrowing as a result of changes in interest rates and other factors;
 
    
    the Companys ability to maintain its qualification as a REIT due to economic, market, legal,
tax or other considerations;
 
    
    changes in the reimbursement available to the Companys tenants by government or private payors;
 
    
    the Companys tenants ability to make rent payments;
 
    
    defaults by tenants and customers;
 
    
    access to financing by customers;
 
    
    delays in project starts and cancellations by customers;
 
    
    the Companys ability to convert design-build project
opportunities into new engagements for the Company;
 
    
    market trends; and
 
    
    projected capital expenditures.
    27




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##### Table of Contents



Overview
      
    
    65 consolidated wholly-owned and joint venture properties, comprising a total of
approximately 3.6 million net rentable square feet, 91.4% leased;
 
    
    One wholly-owned property in the lease-up phase, comprising approximately 0.1 million
net rentable square feet, 75% leased and income producing with the remaining 25.0% leased
and under construction for a third quarter 2011 scheduled date of occupancy;
 
    
    Three unconsolidated joint venture properties comprising a total of approximately 0.2
million net rentable square feet; and
 
    
    44 properties managed for third party clients comprising a total of approximately 2.0
million net rentable square feet.
   28




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##### Table of Contents



Critical Accounting Policies
   Acquisition of Real Estate
  Acquisition of Business
   29




---



##### Table of Contents



Useful Lives of Assets
  Asset Impairment Valuation
      30




---



##### Table of Contents



Revenue Recognition
       31




---



##### Table of Contents



REIT Qualification Requirements
  Results of Operations
  Business Segments
  Property Summary
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Properties at beginning of the period
    
    
    65
    
    
    
    62
    
    
    
    62
    
    
    
    62Developments (including lease-up properties)
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    Acquisitions
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    Properties at end of the period
    
    
    66
    
    
    
    62
    
    
    
    66
    
    
    
    62
 Year EndedDecember 31,2009Properties at January 1
    
    
    62Developments
    
    
    1Discontinued operations
    
    
    (1
    )Properties at December 31
    
    
    62
   Comparison of the three and nine months ended September 30, 2010 and 2009
 Funds from Operations Modified (FFOM)
   32




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##### Table of Contents



For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009FFOM attributable to:Property operations
    
    $
    14,205
    
    
    $
    12,653
    
    
    $
    40,680
    
    
    $
    37,742Design-Build and development,
excluding
impairment charges
    
    
    (2,221
    )
    
    
    3,934
    
    
    
    5,825
    
    
    
    12,060Intersegment eliminations
    
    
    (323
    )
    
    
    (827
    )
    
    
    (2,551
    )
    
    
    (3,278
    )Unallocated and other, excluding
non-recurring events
    
    
    (6,339
    )
    
    
    (6,932
    )
    
    
    (20,938
    )
    
    
    (23,204
    )FFOM, excluding non-recurring events
and impairment charges
    
    
    5,322
    
    
    
    8,828
    
    
    
    23,016
    
    
    
    23,320Non-recurring events and impairment charges:Goodwill and intangible asset
impairment
charges, net of tax benefit
    
    
    
    
    
    
    
    
    
    
    (10,848
    )
    
    
    (101,746
    )CEO retirement compensation expense,
net of tax benefit
    
    
    
    
    
    
    
    
    
    
    (2,545
    )
    
    
    Debt extinguishment and interest rate
derivative expense, net of income
tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,520
    )FFOM
    
    $
    5,322
    
    
    $
    8,828
    
    
    $
    9,623
    
    
    $
    (79,946
    )
  For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net income (loss)
    
    $
    (1,951
    )
    
    $
    1,456
    
    
    $
    (11,509
    )
    
    $
    (103,918
    )Add:Real estate related depreciation and amortization:Wholly-owned and consolidated properties,
including amounts in discontinued operations
    
    
    7,372
    
    
    
    7,222
    
    
    
    21,837
    
    
    
    21,905Unconsolidated real estate partnerships
    
    
    3
    
    
    
    3
    
    
    
    9
    
    
    
    8Less:Noncontrolling interests in real estate partnerships,
before real estate related depreciation and
amortization
    
    
    (476
    )
    
    
    (206
    )
    
    
    (1,571
    )
    
    
    (676
    )Gain on sale of real estate property
    
    
    
    
    
    
    
    
    
    
    (264
    )
    
    
    Funds from Operations (FFO)
    
    
    4,948
    
    
    
    8,475
    
    
    
    8,502
    
    
    
    (82,681
    )Amortization of intangibles related to purchase
accounting, net of income tax benefit
    
    
    374
    
    
    
    353
    
    
    
    1,121
    
    
    
    2,735Funds from Operations Modified (FFOM)
    
    $
    5,322
    
    
    $
    8,828
    
    
    $
    9,623
    
    
    $
    (79,946
    )
  33




---



##### Table of Contents



FFOM attributable to Property Operations, net of intersegment eliminations
  For the Three Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009Rental revenue, net of intersegment eliminations of $23 in 2010 and 2009
    
    $
    22,765
    
    
    $
    19,960Property management and other fee revenue
    
    
    809
    
    
    
    816Property operating and management expenses
    
    
    (9,067
    )
    
    
    (8,103
    )Interest and other income
    
    
    145
    
    
    
    134Earnings (loss) from unconsolidated real estate partnerships,
before real estate related depreciation and amortization
    
    
    6
    
    
    
    (1
    )Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    (476
    )
    
    
    (206
    )Income from discontinued operations, before real estate
related depreciation and amortization and gain on sale
    
    
    
    
    
    
    30FFOM, net of intersegment eliminations
    
    $
    14,182
    
    
    $
    12,630
 For the Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009Rental revenue, net of intersegment eliminations of
$69 in 2010 and 2009
    
    $
    65,004
    
    
    $
    59,110Property management and other fee revenue
    
    
    2,388
    
    
    
    2,530Property operating and management expenses
    
    
    (25,652
    )
    
    
    (23,789
    )Interest and other income
    
    
    419
    
    
    
    404Earnings from unconsolidated real estate partnerships,
before real estate related depreciation and amortization
    
    
    14
    
    
    
    13Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    (1,571
    )
    
    
    (676
    )Income from discontinued operations, before real estate
related depreciation and amortization and gain on sale
    
    
    9
    
    
    
    81FFOM, net of intersegment eliminations
    
    $
    40,611
    
    
    $
    37,673
    34




---



##### Table of Contents



FFOM attributable to Design-Build and Development, net of intersegment eliminations
  For the Three Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009Design-Build contract revenue and other sales, net of intersegment eliminations
of $3,193 in 2010 and $10,346 in 2009
    
    $
    15,734
    
    
    $
    30,298Development management and other income, net of intersegment eliminations
of $2,289 in 2010 and $484 in 2009
    
    
    1
    
    
    
    239Design-Build contract and development management expenses, net of intersegment
eliminations of $5,159 in 2010 and $10,003 in 2009
    
    
    (13,806
    )
    
    
    (21,166
    )Selling, general, and administrative expenses, net of intersegment eliminations
of $23 in 2010 and 2009
    
    
    (4,203
    )
    
    
    (6,075
    )Interest and other income
    
    
    
    
    
    
    24Depreciation and amortization
    
    
    (247
    )
    
    
    (190
    )FFOM, excluding impairment charge, net of intersegment eliminations
    
    
    (2,521
    )
    
    
    3,130Goodwill and intangible asset impairment charges
    
    
    
    
    
    
    FFOM, net of intersegment eliminations
    
    $
    (2,521
    )
    
    $
    3,130
 For the Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009Design-Build contract revenue and other sales, net of intersegment eliminations
of $15,950 in 2010 and $20,414 in 2009
    
    $
    66,406
    
    
    $
    113,399Development management and other income, net of intersegment eliminations
of $5,322 in 2010 and $2,527 in 2009
    
    
    122
    
    
    
    3,266Design-Build contract and development management expenses, net of intersegment
eliminations of $18,721 in 2010 and $19,663 in 2009
    
    
    (49,832
    )
    
    
    (92,573
    )Selling, general, and administrative expenses, net of intersegment eliminations
of $69 in 2010 and 2009
    
    
    (12,652
    )
    
    
    (14,689
    )Interest and other income
    
    
    3
    
    
    
    28Depreciation and amortization
    
    
    (704
    )
    
    
    (580
    )FFOM, excluding impairment charge, net of intersegment eliminations
    
    
    3,343
    
    
    
    8,851Goodwill and intangible asset impairment charges
    
    
    (13,635
    )
    
    
    (120,920
    )FFOM, net of intersegment eliminations
    
    $
    (10,292
    )
    
    $
    (112,069
    )
     35




---



##### Table of Contents



Selling, general, and administrative
   Depreciation and amortization
   Impairment charges
   36




---



##### Table of Contents



Interest expense
   Income tax benefit (expense)
   Cash Flows
 Comparison of the nine months ended September 30, 2010 and 2009
  For the Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009Net loss plus non-cash adjustments
    
    $
    20,664
    
    
    $
    27,792Changes in operating assets and liabilities
    
    
    (6,652
    )
    
    
    15,053Net cash provided by operating activities
    
    $
    14,012
    
    
    $
    42,845
   37




---



##### Table of Contents



For the Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009Development, redevelopment, and acquisitions
    
    $
    29,757
    
    
    $
    36,603Second generation tenant improvements
    
    
    2,703
    
    
    
    2,832Recurring property capital expenditures
    
    
    365
    
    
    
    168Investment in real estate properties
    
    $
    32,825
    
    
    $
    39,603
  Construction in Progress
  EstimatedEstimated
    
    Net Rentable
    
    
    Investment
    
    
    TotalProperty
    
    Location
    
    Completion Date
    
    Square Feet
    
    
    to Date
    
    
    InvestmentGood Sam MOB Investors, LLC
    
    Puyallup, WA
    
    3Q 2011
    
    
    80,000
    
    
    $
    5,981
    
    
    $
    24,700Bonney Lake MOB Investors, LLC
    
    Bonney Lake, WA
    
    3Q 2011
    
    
    56,000
    
    
    
    7,112
    
    
    
    17,700Land and pre-construction developments
    
    
    
    
    
    
    
    
    
    
    2,027
    
    
    
    136,000
    
    
    $
    15,120
    
    
    $
    42,400
 Liquidity and Capital Resources
     38




---



##### Table of Contents



Financial Covenant
    
    September 30, 2010Maximum total leverage ratio (0.70 to 1.00)
    
    0.49 to 1.00Maximum real estate leverage ratio (0.70 to 1.00)
    
    0.52 to 1.00Minimum fixed charge coverage ratio (1.50 to 1.00)
    
    2.11 to 1.00Minimum consolidated tangible net worth ($182,457)
    
    $247,329Maximum total debt to real estate value ratio (0.90 to 1.00)
    
    0.59 to 1.00
     39




---



##### Table of Contents



Financial Covenant
    
    September 30, 2010Minimum adjusted consolidated EBITDA
to consolidated fixed charges (2.00 to 1.00)
    
    2.83 to 1.00Maximum consolidated senior indebtedness to
adjusted consolidated EBITDA (3.50 to 1.00,
with the ability to exceed 3.50 to 1.00 in one quarter,
but not to exceed 3.75 to 1.00 in such quarter)
    
    3.49 to 1.00Maximum consolidated indebtedness to adjusted
consolidated EBITDA (5.50 to 1.00)
    
    3.53 to 1.00
    Short-Term Liquidity Needs
      40




---



##### Table of Contents



Long-Term Liquidity Needs
     41




---



##### Table of Contents



Contractual Obligations
  Remainder of2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    TotalObligation:Long-term
debt principal payments and maturities (1)
    
    $
    7,485
    
    
    $
    179,186
    
    
    $
    24,859
    
    
    $
    15,722
    
    
    $
    63,071
    
    
    $
    121,309
    
    
    $
    411,632Standby letters of credit (2)
    
    
    6,601
    
    
    
    1,586
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,187Interest payments (3)
    
    
    3,853
    
    
    
    13,204
    
    
    
    10,884
    
    
    
    9,865
    
    
    
    8,204
    
    
    
    17,914
    
    
    
    63,924Purchase commitments (4)
    
    
    714
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    714Ground and air rights leases (5)
    
    
    200
    
    
    
    801
    
    
    
    801
    
    
    
    439
    
    
    
    407
    
    
    
    11,327
    
    
    
    13,975Operating leases (6)
    
    
    1,416
    
    
    
    4,925
    
    
    
    4,277
    
    
    
    3,515
    
    
    
    3,439
    
    
    
    24,346
    
    
    
    41,918Total
    
    $
    20,269
    
    
    $
    199,702
    
    
    $
    40,821
    
    
    $
    29,541
    
    
    $
    75,121
    
    
    $
    174,896
    
    
    $
    540,350
 
 (1)
    
    Includes notes payable under the Credit Facility and the Term Loan.(2)
    
    As collateral for performance, the Company is contingently liable under standby
letters of credit, which also reduces the availability under the Credit Facility.(3)
    
    Assumes one-month LIBOR of 0.26% and a Prime Rate of 3.25%, which were the rates as
of September 30, 2010.(4)
    
    These purchase commitments are related to the Companys development projects that
are currently under construction. The Company has a committed construction loan that will fund the
obligation.(5)
    
    Substantially all of the ground and air rights leases effectively limit our control
over various aspects of the operation of the applicable property, restrict our ability to transfer
the property and allow the lessor the right of first refusal to purchase the building and
improvements. All of the ground leases provide for the property to revert to the lessor for no
consideration upon the expiration or earlier termination of the ground or air rights lease.(6)
    
    Payments under operating lease agreements relate to several of our properties
equipment and office space leases. The future minimum lease commitments under these leases are as
indicated. Off-Balance Sheet Arrangements
  Real Estate Taxes
  Inflation
  Seasonality
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##### Table of Contents



Recent Accounting Pronouncements
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
 ITEM 4. CONTROLS AND PROCEDURES
    
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
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##### Table of Contents



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Issuer Purchases of Equity Securities
  Total Number ofEquity Securities
    
    
    Approximate DollarAverage
    
    
    Purchased as Part
    
    
    Value of EquityTotal Number of
    
    
    Price Paid
    
    
    of Publicly
    
    
    Securities that MayEquity Securities
    
    
    Per Equity
    
    
    Announced Plans
    
    
    Yet Be PurchasedFor the Month Ended
    
    Purchased
    
    
    Security
    
    
    or Programs
    
    
    Under the PlanAugust 1 - August 31, 2010
    
    
    18,000
    
    
    $
    7.40
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    18,000
    
    
    $
    7.40
    
    
    
    N/A
    
    
    
    N/A
 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. REMOVED AND RESERVED
 
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 10.1
    
    
    Employment Agreement, dated September 20, 2010, by and between Cogdell Spencer Inc. and
Raymond William Braun, incorporated by reference to Exhibit 10.1 of the Companys Current
Report on Form 8-K filed with the SEC on September 24, 2010.10.2
    
    
    Employment Agreement, dated as of September 20, 2010, by and between Erdman Company and Scott
A. Ransom, incorporated by reference to Exhibit 10.2 of the Companys Current Report on Form
8-K filed with the SEC on September 24, 2010.10.3
    
    
    Award Restricted Stock Award Agreement, incorporated by reference to Exhibit 10.3 of the
Companys Current Report on Form 8-K filed with the SEC on September 24, 2010.10.4
    
    
    Performance Award Restricted Stock Award Agreement, incorporated by reference to Exhibit 10.4
of the Companys Current Report on Form 8-K filed with the SEC on September 24, 2010.10.5
    
    
    Subscription Agreement, effective as of September 20, 2010, by and between Cogdell Spencer
Inc. and Raymond William Braun, incorporated by reference to Exhibit 10.5 of the Companys
Current Report on Form 8-K filed with the SEC on September 24, 2010.31.1
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of
2002.31.2
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of
2002.32.1
    
    
    Certification of Chief Executive and Chief Financial Officer pursuant to 18 U.S.C. Section
1350 as adapted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  44




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##### Table of Contents



SIGNATURES
  COGDELL SPENCER INC.RegistrantDate: November 9, 2010
    /s/ Raymond W. BraunRaymond W. BraunPresident and Chief Executive OfficerDate: November 9, 2010
    /s/ Charles M. HandyCharles M. HandyExecutive Vice President and Chief Financial Officer  45