##### 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 June 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
(State or other jurisdiction of 
incorporation or organization)
    
    20-3126457
(I.R.S. Employer
Identification No.)4401 Barclay Downs Drive, Suite 300Charlotte, North Carolina
(Address of principal executive offices)
    
    28209
(Zip code)
 (704) 940-2900
 
 Yes þ No o
 Yes
o No o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 Yes o No þ




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##### 



TABLE OF CONTENTS
 PagePART I FINANCIAL INFORMATION
    
    
    3Item 1 Financial Statements
    
    
    3Item 2 Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    24Item 3 Quantitative and Qualitative Disclosures about Market Risk
    
    
    39Item 4 Controls and Procedures
    
    
    40PART II Other Information
    
    
    40Item 1 Legal Proceedings
    
    
    40Item 1A Risk Factors
    
    
    40Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    42Item 3 Defaults Upon Senior Securities
    
    
    42Item 4 Removed and Reserved
    
    
    42Item 5 Other Information
    
    
    42Item 6 Exhibits
    
    
    42Exhibit 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
 June 30,
    
    
    December 31,2010
    
    
    2009AssetsReal estate properties:Land
    
    $
    37,269
    
    
    $
    33,139Buildings and improvements
    
    
    578,885
    
    
    
    527,985Less: Accumulated depreciation
    
    
    (106,004
    )
    
    
    (93,247
    )Net operating real estate properties
    
    
    510,150
    
    
    
    467,877Construction in progress
    
    
    7,951
    
    
    
    43,338Net real estate properties
    
    
    518,101
    
    
    
    511,215Cash and cash equivalents
    
    
    31,196
    
    
    
    25,914Restricted cash
    
    
    7,888
    
    
    
    3,060Tenant and accounts receivable, net of allowance of $2,624 in 2010 and $2,817 in 2009
    
    
    8,070
    
    
    
    12,993Goodwill
    
    
    102,195
    
    
    
    108,683Trade names and trademarks
    
    
    34,093
    
    
    
    41,240Intangible assets, net of accumulated amortization of $46,385 in 2010 and $43,313 in 2009
    
    
    18,670
    
    
    
    21,742Other assets
    
    
    24,018
    
    
    
    25,599Other assets  held for sale
    
    
    
    
    
    
    2,217Total assets
    
    $
    744,231
    
    
    $
    752,663Liabilities and equityMortgage notes payable
    
    $
    291,199
    
    
    $
    280,892Revolving credit facility
    
    
    55,000
    
    
    
    80,000Term loan
    
    
    50,000
    
    
    
    50,000Accounts payable
    
    
    11,081
    
    
    
    15,293Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    4,657
    
    
    
    13,189Deferred income taxes
    
    
    13,543
    
    
    
    15,993Other liabilities
    
    
    48,123
    
    
    
    47,312Other liabilities  held for sale
    
    
    
    
    
    
    2,204Total liabilities
    
    
    473,603
    
    
    
    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, 49,962 and 42,729 shares
issued and outstanding in 2010 and 2009, respectively
    
    
    500
    
    
    
    427Additional paid-in capital
    
    
    418,194
    
    
    
    370,593Accumulated other comprehensive loss
    
    
    (4,843
    )
    
    
    (1,861
    )Accumulated deficit
    
    
    (182,332
    )
    
    
    (164,321
    )Total Cogdell Spencer Inc. stockholders equity
    
    
    231,519
    
    
    
    204,838Noncontrolling interests:Real estate partnerships
    
    
    3,810
    
    
    
    5,220Operating partnership
    
    
    35,299
    
    
    
    37,722Total noncontrolling interests
    
    
    39,109
    
    
    
    42,942Total equity
    
    
    270,628
    
    
    
    247,780Total liabilities and equity
    
    $
    744,231
    
    
    $
    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 Six Months EndedJune 30, 2010
    
    
    June 30, 2009
    
    
    June 30, 2010
    
    
    June 30, 2009Revenues:Rental revenue
    
    $
    20,995
    
    
    $
    19,574
    
    
    $
    42,240
    
    
    $
    39,150Design-Build contract revenue and other sales
    
    
    15,236
    
    
    
    36,712
    
    
    
    50,672
    
    
    
    83,101Property management and other fees
    
    
    761
    
    
    
    863
    
    
    
    1,578
    
    
    
    1,713Development management and other income
    
    
    17
    
    
    
    227
    
    
    
    120
    
    
    
    3,027Total revenues
    
    
    37,009
    
    
    
    57,376
    
    
    
    94,610
    
    
    
    126,991Expenses:Property operating and management
    
    
    8,387
    
    
    
    7,821
    
    
    
    16,585
    
    
    
    15,686Design-Build contracts and development management
    
    
    11,407
    
    
    
    31,242
    
    
    
    36,026
    
    
    
    71,407Selling, general, and administrative
    
    
    9,345
    
    
    
    6,675
    
    
    
    15,165
    
    
    
    13,342Depreciation and amortization
    
    
    8,182
    
    
    
    8,943
    
    
    
    16,266
    
    
    
    19,020Impairment charges
    
    
    13,635
    
    
    
    
    
    
    
    13,635
    
    
    
    120,920Total expenses
    
    
    50,956
    
    
    
    54,681
    
    
    
    97,677
    
    
    
    240,375Income (loss) from continuing operations before other income (expense) and
income tax benefit
    
    
    (13,947
    )
    
    
    2,695
    
    
    
    (3,067
    )
    
    
    (113,384
    )Other income (expense):Interest and other income
    
    
    134
    
    
    
    139
    
    
    
    294
    
    
    
    295Interest expense
    
    
    (5,393
    )
    
    
    (5,559
    )
    
    
    (10,481
    )
    
    
    (11,550
    )Debt extinguishment and interest rate derivative expense
    
    
    (9
    )
    
    
    (2,490
    )
    
    
    (25
    )
    
    
    (2,490
    )Equity in earnings of unconsolidated real estate partnerships
    
    
    
    
    
    
    2
    
    
    
    3
    
    
    
    8Total other income (expense)
    
    
    (5,268
    )
    
    
    (7,908
    )
    
    
    (10,209
    )
    
    
    (13,737
    )Loss from continuing operations before income tax benefit
    
    
    (19,215
    )
    
    
    (5,213
    )
    
    
    (13,276
    )
    
    
    (127,121
    )Income tax benefit
    
    
    5,174
    
    
    
    2,208
    
    
    
    3,448
    
    
    
    21,834Net loss from continuing operations
    
    
    (14,041
    )
    
    
    (3,005
    )
    
    
    (9,828
    )
    
    
    (105,287
    )Discontinued operations:Income (loss) from discontinued operations
    
    
    24
    
    
    
    (45
    )
    
    
    6
    
    
    
    (87
    )Gain on sale of discontinued operations
    
    
    264
    
    
    
    
    
    
    
    264
    
    
    
    Total discontinued operations
    
    
    288
    
    
    
    (45
    )
    
    
    270
    
    
    
    (87
    )Net loss
    
    
    (13,753
    )
    
    
    (3,050
    )
    
    
    (9,558
    )
    
    
    (105,374
    )Net loss (income) attributable to the noncontrolling interest in:Real estate partnerships
    
    
    (177
    )
    
    
    (48
    )
    
    
    (489
    )
    
    
    (141
    )Operating partnership
    
    
    1,909
    
    
    
    783
    
    
    
    1,311
    
    
    
    32,982Net loss attributable to Cogdell Spencer Inc.
    
    $
    (12,021
    )
    
    $
    (2,315
    )
    
    $
    (8,736
    )
    
    $
    (72,533
    )Per share data  basic and diluted:Loss from continuing operations attributable to Cogdell Spencer Inc.
    
    $
    (0.27
    )
    
    $
    (0.09
    )
    
    $
    (0.20
    )
    
    $
    (3.21
    )Income (loss) from discontinued operations attributable to Cogdell
Spencer Inc.
    
    
    0.01
    
    
    
    (0.00
    )
    
    
    0.00
    
    
    
    (0.00
    )Net loss per share attributable to Cogdell Spencer Inc.
    
    $
    (0.26
    )
    
    $
    (0.09
    )
    
    $
    (0.20
    )
    
    $
    (3.21
    )Weighted average common shares  basic and diluted
    
    
    46,111
    
    
    
    27,088
    
    
    
    44,449
    
    
    
    22,569Net income (loss) attributable to Cogdell Spencer Inc.:Loss from continuing operations, net of tax
    
    $
    (12,267
    )
    
    $
    (2,285
    )
    
    $
    (8,967
    )
    
    $
    (72,474
    )Income (loss) from discontinued operations
    
    
    246
    
    
    
    (30
    )
    
    
    231
    
    
    
    (59
    )Net loss attributable to Cogdell Spencer Inc.
    
    $
    (12,021
    )
    
    $
    (2,315
    )
    
    $
    (8,736
    )
    
    $
    (72,533
    )
   4




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##### Table of Contents



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, 2009
    
    $
    247,780
    
    
    
    
    
    
    $
    (164,321
    )
    
    $
    (1,861
    )
    
    $
    427
    
    
    $
    370,593
    
    
    $
    37,722
    
    
    $
    5,220Comprehensive income (loss):Net income (loss)
    
    
    (9,558
    )
    
    $
    (9,558
    )
    
    
    (8,736
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,311
    )
    
    
    489Unrealized loss on interest rate swaps,
net of tax
    
    
    (4,396
    )
    
    
    (4,396
    )
    
    
    
    
    
    
    (2,970
    )
    
    
    
    
    
    
    
    
    
    
    (493
    )
    
    
    (933
    )Comprehensive loss
    
    
    (13,954
    )
    
    $
    (13,954
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock, net of costs
    
    
    47,115
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71
    
    
    
    47,044
    
    
    
    
    
    
    
    Conversion of operating partnership units
to common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12
    )
    
    
    1
    
    
    
    357
    
    
    
    (346
    )
    
    
    Restricted stock and LTIP unit grants
    
    
    1,467
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    200
    
    
    
    1,266
    
    
    
    Dividends and distributions
    
    
    (11,780
    )
    
    
    
    
    
    
    (9,275
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,539
    )
    
    
    (966
    )Balance at June 30, 2010
    
    $
    270,628
    
    
    
    
    
    
    $
    (182,332
    )
    
    $
    (4,843
    )
    
    $
    500
    
    
    $
    418,194
    
    
    $
    35,299
    
    
    $
    3,810
   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
    
    
    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)
    
    
    (105,374
    )
    
    $
    (105,374
    )
    
    
    (72,533
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32,982
    )
    
    
    141Unrealized gain on interest rate swaps,
net of tax
    
    
    4,806
    
    
    
    4,806
    
    
    
    
    
    
    
    3,359
    
    
    
    
    
    
    
    
    
    
    
    531
    
    
    
    916Comprehensive loss
    
    
    (100,568
    )
    
    $
    (100,568
    )Issuance of common stock, net of costs
    
    
    76,527
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    230
    
    
    
    76,297
    
    
    
    
    
    
    
    Conversion of operating partnership units
to common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (474
    )
    
    
    18
    
    
    
    17,695
    
    
    
    (17,239
    )
    
    
    Restricted stock and LTIP unit grants
    
    
    818
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    738
    
    
    
    Amortization of restricted stock grants
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    18
    
    
    
    Dividends and distributions
    
    
    (11,311
    )
    
    
    
    
    
    
    (8,627
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,412
    )
    
    
    (272
    )Balance at June 30, 2009
    
    $
    248,510
    
    
    
    
    
    
    $
    (158,598
    )
    
    $
    (2,221
    )
    
    $
    425
    
    
    $
    369,484
    
    
    $
    33,978
    
    
    $
    5,442
   6




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##### Table of Contents



COGDELL SPENCER INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Six Months EndedJune 30, 2010
    
    
    June 30, 2009Operating activities:Net loss
    
    $
    (9,558
    )
    
    $
    (105,374
    )Adjustments to reconcile net loss to cash provided by operating activities:Depreciation and amortization (including amounts in discontinued operations)
    
    
    16,266
    
    
    
    19,089Amortization of acquired above market leases and acquired below market
leases, net (including amounts in discontinued operations)
    
    
    (233
    )
    
    
    (255
    )Straight-line rental revenue
    
    
    (452
    )
    
    
    (235
    )Amortization of deferred finance costs and debt premium
    
    
    774
    
    
    
    824Provision for bad debts
    
    
    (193
    )
    
    
    9Deferred income taxes
    
    
    (2,589
    )
    
    
    (21,223
    )Deferred tax expense on intersegment profits
    
    
    (1,078
    )
    
    
    (748
    )Equity-based compensation
    
    
    1,162
    
    
    
    868Equity in earnings of unconsolidated real estate partnerships
    
    
    (3
    )
    
    
    (8
    )Change in fair value of interest rate swap agreements
    
    
    (536
    )
    
    
    (315
    )Debt extinguishment and interest rate derivative expense
    
    
    25
    
    
    
    2,490Impairment 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
    
    
    5,829
    
    
    
    13,255Accounts payable and other liabilities
    
    
    (3,175
    )
    
    
    (17,640
    )Billings in excess of costs and estimated earnings on uncompleted contracts
    
    
    (8,532
    )
    
    
    4,531Net cash provided by operating activities
    
    
    11,078
    
    
    
    16,188Investing activities:Investment in real estate properties
    
    
    (22,023
    )
    
    
    (19,782
    )Proceeds from sales-type capital lease
    
    
    153
    
    
    
    153Proceeds from disposal of discontinued operations
    
    
    2,481
    
    
    
    Purchase of corporate property, plant and equipment
    
    
    (287
    )
    
    
    (1,287
    )Distributions received from unconsolidated real estate partnerships
    
    
    4
    
    
    
    5Increase in restricted cash
    
    
    (4,828
    )
    
    
    (118
    )Net cash used in investing activities
    
    
    (24,500
    )
    
    
    (21,029
    )Financing activities:Proceeds from mortgage notes payable
    
    
    14,047
    
    
    
    25,940Repayments of mortgage notes payable
    
    
    (5,948
    )
    
    
    (11,018
    )Proceeds from revolving credit facility
    
    
    4,000
    
    
    
    2,000Repayments to revolving credit facility
    
    
    (29,000
    )
    
    
    (46,500
    )Repayment of term loan
    
    
    
    
    
    
    (50,000
    )Net proceeds from sale of common stock
    
    
    47,115
    
    
    
    76,527Dividends and distributions
    
    
    (10,173
    )
    
    
    (12,143
    )Distributions to noncontrolling interests in real estate partnerships
    
    
    (966
    )
    
    
    (272
    )Payment of financing costs
    
    
    (371
    )
    
    
    (953
    )Net cash provided by (used in) financing activities
    
    
    18,704
    
    
    
    (16,419
    )Increase (decrease) in cash and cash equivalents
    
    
    5,282
    
    
    
    (21,260
    )Balance at beginning of period
    
    
    25,914
    
    
    
    34,668Balance at end of period
    
    $
    31,196
    
    
    $
    13,408Supplemental disclosure of cash flow information:Cash paid for interest, net of capitalized interest
    
    $
    10,831
    
    
    $
    10,685Cash paid for income taxes
    
    $
    73
    
    
    $
    10Non-cash investing and financing activities:Investment in real estate properties included in accounts payable and other
liabilities
    
    $
    717
    
    
    $
    4,455Accrued dividends and distributions
    
    
    5,781
    
    
    
    5,007Operating Partnership Units converted into common stock
    
    
    357
    
    
    
    17,714Equity-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 as of August 6, 2010 (100% owned by the Company as of June 30, 2010);
 
    
    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




---



##### Table of Contents



June 30, 2010
    
    
    December 31, 2009Financial position:Total assets
    
    $
    55,052
    
    
    $
    54,725Total liabilities
    
    
    48,463
    
    
    
    48,672Members equity
    
    
    6,589
    
    
    
    6,053
 For the Three Months Ended
    
    
    For the Six Months EndedJune 30, 2010
    
    
    June 30, 2009
    
    
    June 30, 2010
    
    
    June 30, 2009Results of operations:Total revenues
    
    $
    3,072
    
    
    $
    3,091
    
    
    $
    6,197
    
    
    $
    6,232Operating and general and
administrative expenses
    
    
    1,460
    
    
    
    1,542
    
    
    
    2,922
    
    
    
    2,859Net income
    
    
    229
    
    
    
    143
    
    
    
    500
    
    
    
    556
 4. Business Segments
    11




---



##### Table of Contents



Design-BuildProperty
    
    
    and
    
    
    Intersegment
    
    
    UnallocatedOperations
    
    
    Development
    
    
    Eliminations
    
    
    and Other
    
    
    TotalRevenues:Rental revenue
    
    $
    21,018
    
    
    $
    
    
    
    $
    (23
    )
    
    $
    
    
    
    $
    20,995Design-Build contract revenue and other sales
    
    
    
    
    
    
    24,229
    
    
    
    (8,993
    )
    
    
    
    
    
    
    15,236Property management and other fees
    
    
    761
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    761Development management and other income
    
    
    
    
    
    
    2,266
    
    
    
    (2,249
    )
    
    
    
    
    
    
    17Total revenues
    
    
    21,779
    
    
    
    26,495
    
    
    
    (11,265
    )
    
    
    
    
    
    
    37,009Certain operating expenses:Property operating and management
    
    
    8,387
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,387Design-Build contracts and development management
    
    
    
    
    
    
    20,940
    
    
    
    (9,533
    )
    
    
    
    
    
    
    11,407Selling, general, and administrative
    
    
    
    
    
    
    4,606
    
    
    
    (23
    )
    
    
    
    
    
    
    4,583Impairment charges
    
    
    
    
    
    
    13,635
    
    
    
    
    
    
    
    
    
    
    
    13,635Total certain operating expenses
    
    
    8,387
    
    
    
    39,181
    
    
    
    (9,556
    )
    
    
    
    
    
    
    38,01213,392
    
    
    
    (12,686
    )
    
    
    (1,709
    )
    
    
    
    
    
    
    (1,003
    )Interest and other income
    
    
    134
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    134Corporate general and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,762
    )
    
    
    (4,762
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,393
    )
    
    
    (5,393
    )Interest rate derivative expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    (9
    )Benefit from income taxes applicable to funds from
operations modified
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,935
    
    
    
    4,935Non-real estate related depreciation and amortization
    
    
    
    
    
    
    (237
    )
    
    
    
    
    
    
    (60
    )
    
    
    (297
    )Earnings from unconsolidated real estate partnerships,
before real estate related depreciation and amortization
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    (479
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (479
    )Income from discontinued operations before gain on sale
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    31
    
    
    
    24Funds from operations modified (FFOM)
    
    
    13,043
    
    
    
    (12,923
    )
    
    
    (1,709
    )
    
    
    (5,258
    )
    
    
    (6,847
    )Amortization of intangibles related to purchase
accounting, net of income tax benefit
    
    
    (42
    )
    
    
    (571
    )
    
    
    
    
    
    
    239
    
    
    
    (374
    )Funds from operations (FFO)
    
    
    13,001
    
    
    
    (13,494
    )
    
    
    (1,709
    )
    
    
    (5,019
    )
    
    
    (7,221
    )Real estate related depreciation and amortization
    
    
    (7,275
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,275
    )Gain on sale of real estate property
    
    
    264
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    264Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    479
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    479Net income (loss)
    
    
    6,469
    
    
    
    (13,494
    )
    
    
    (1,709
    )
    
    
    (5,019
    )
    
    
    (13,753
    )Net income (loss) attributable to the noncontrolling interest in:Real estate partnerships
    
    
    (177
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (177
    )Operating partnership
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,909
    
    
    
    1,909Net income (loss) attributable to Cogdell Spencer Inc.
    
    $
    6,292
    
    
    $
    (13,494
    )
    
    $
    (1,709
    )
    
    $
    (3,110
    )
    
    $
    (12,021
    )Total assets
    
    $
    577,286
    
    
    $
    166,607
    
    
    $
    
    
    
    $
    338
    
    
    $
    744,231
  12




---



##### Table of Contents



Design-BuildProperty
    
    
    and
    
    
    Intersegment
    
    
    UnallocatedOperations
    
    
    Development
    
    
    Eliminations
    
    
    and Other
    
    
    TotalRevenues:Rental revenue
    
    $
    19,597
    
    
    $
    
    
    
    $
    (23
    )
    
    $
    
    
    
    $
    19,574Design-Build contract revenue and other sales
    
    
    
    
    
    
    42,009
    
    
    
    (5,297
    )
    
    
    
    
    
    
    36,712Property management and other fees
    
    
    863
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    863Development management and other income
    
    
    
    
    
    
    1,434
    
    
    
    (1,207
    )
    
    
    
    
    
    
    227Total revenues
    
    
    20,460
    
    
    
    43,443
    
    
    
    (6,527
    )
    
    
    
    
    
    
    57,376Certain operating expenses:Property operating and management
    
    
    7,821
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,821Design-Build contracts and development management
    
    
    
    
    
    
    35,948
    
    
    
    (4,706
    )
    
    
    
    
    
    
    31,242Selling, general, and administrative
    
    
    
    
    
    
    4,122
    
    
    
    (23
    )
    
    
    
    
    
    
    4,099Total certain operating expenses
    
    
    7,821
    
    
    
    40,070
    
    
    
    (4,729
    )
    
    
    
    
    
    
    43,16212,639
    
    
    
    3,373
    
    
    
    (1,798
    )
    
    
    
    
    
    
    14,214Interest and other income
    
    
    129
    
    
    
    2
    
    
    
    
    
    
    
    8
    
    
    
    139Corporate general and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,576
    )
    
    
    (2,576
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,559
    )
    
    
    (5,559
    )Debt extinguishment and interest rate derivative expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,490
    )
    
    
    (2,490
    )Benefit from income taxes applicable to funds from
operations modified
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,670
    
    
    
    1,670Non-real estate related depreciation and amortization
    
    
    
    
    
    
    (196
    )
    
    
    
    
    
    
    (57
    )
    
    
    (253
    )Earnings from unconsolidated real estate partnerships,
before real estate related depreciation and amortization
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    (224
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (224
    )Income from discontinued operations
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    (35
    )
    
    
    (10
    )Funds from operations modified (FFOM)
    
    
    12,573
    
    
    
    3,179
    
    
    
    (1,798
    )
    
    
    (9,039
    )
    
    
    4,915Amortization of intangibles related to purchase
accounting, net of income tax benefit
    
    
    (42
    )
    
    
    (1,338
    )
    
    
    
    
    
    
    538
    
    
    
    (842
    )Funds from operations (FFO)
    
    
    12,531
    
    
    
    1,841
    
    
    
    (1,798
    )
    
    
    (8,501
    )
    
    
    4,073Real estate related depreciation and amortization
    
    
    (7,347
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,347
    )Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    224
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    224Net income (loss)
    
    
    5,408
    
    
    
    1,841
    
    
    
    (1,798
    )
    
    
    (8,501
    )
    
    
    (3,050
    )Net loss (income) attributable to the noncontrolling interest in:Real estate partnerships
    
    
    (48
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48
    )Operating partnership
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    783
    
    
    
    783Net income (loss) attributable to Cogdell Spencer Inc.
    
    $
    5,360
    
    
    $
    1,841
    
    
    $
    (1,798
    )
    
    $
    (7,718
    )
    
    $
    (2,315
    )Total assets
    
    $
    549,460
    
    
    $
    200,656
    
    
    $
    
    
    
    $
    852
    
    
    $
    750,968
  13




---



##### Table of Contents



Design-BuildProperty
    
    
    and
    
    
    Intersegment
    
    
    UnallocatedOperations
    
    
    Development
    
    
    Eliminations
    
    
    and Other
    
    
    TotalRevenues:Rental revenue
    
    $
    42,286
    
    
    $
    
    
    
    $
    (46
    )
    
    $
    
    
    
    $
    42,240Design-Build contract revenue and other sales
    
    
    
    
    
    
    63,429
    
    
    
    (12,757
    )
    
    
    
    
    
    
    50,672Property management and other fees
    
    
    1,578
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,578Development management and other income
    
    
    
    
    
    
    3,152
    
    
    
    (3,032
    )
    
    
    
    
    
    
    120Total revenues
    
    
    43,864
    
    
    
    66,581
    
    
    
    (15,835
    )
    
    
    
    
    
    
    94,610Certain operating expenses:Property operating and management
    
    
    16,585
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,585Design-Build contracts and development management
    
    
    
    
    
    
    49,588
    
    
    
    (13,562
    )
    
    
    
    
    
    
    36,026Selling, general, and administrative
    
    
    
    
    
    
    8,495
    
    
    
    (46
    )
    
    
    
    
    
    
    8,449Impairment charges
    
    
    
    
    
    
    13,635
    
    
    
    
    
    
    
    
    
    
    
    13,635Total certain operating expenses
    
    
    16,585
    
    
    
    71,718
    
    
    
    (13,608
    )
    
    
    
    
    
    
    74,69527,279
    
    
    
    (5,137
    )
    
    
    (2,227
    )
    
    
    
    
    
    
    19,915Interest and other income
    
    
    280
    
    
    
    3
    
    
    
    
    
    
    
    11
    
    
    
    294Corporate general and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,716
    )
    
    
    (6,716
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,481
    )
    
    
    (10,481
    )Interest rate derivative expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25
    )
    
    
    (25
    )Benefit from income taxes applicable to funds from
operations modified
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,970
    
    
    
    2,970Non-real estate related depreciation and amortization
    
    
    
    
    
    
    (457
    )
    
    
    
    
    
    
    (118
    )
    
    
    (575
    )Earnings from unconsolidated real estate partnerships,
before real estate related depreciation and amortization
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    (1,094
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,094
    )Income from discontinued operations before gain on sale
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    6Funds from operations modified (FFOM)
    
    
    26,483
    
    
    
    (5,591
    )
    
    
    (2,227
    )
    
    
    (14,362
    )
    
    
    4,303Amortization of intangibles related to purchase
accounting, net of income tax benefit
    
    
    (85
    )
    
    
    (1,141
    )
    
    
    
    
    
    
    478
    
    
    
    (748
    )Funds from operations (FFO)
    
    
    26,398
    
    
    
    (6,732
    )
    
    
    (2,227
    )
    
    
    (13,884
    )
    
    
    3,555Real estate related depreciation and amortization
    
    
    (14,471
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,471
    )Gain on sale of real estate property
    
    
    264
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    264Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    1,094
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,094Net income (loss)
    
    
    13,285
    
    
    
    (6,732
    )
    
    
    (2,227
    )
    
    
    (13,884
    )
    
    
    (9,558
    )Net loss attributable to the noncontrolling interest in:Real estate partnerships
    
    
    (489
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (489
    )Operating partnership
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,311
    
    
    
    1,311Net income (loss) attributable to Cogdell Spencer Inc.
    
    $
    12,796
    
    
    $
    (6,732
    )
    
    $
    (2,227
    )
    
    $
    (12,573
    )
    
    $
    (8,736
    )Total assets
    
    $
    577,286
    
    
    $
    166,607
    
    
    $
    
    
    
    $
    338
    
    
    $
    744,231
  14




---



##### Table of Contents



Design-BuildProperty
    
    
    and
    
    
    Intersegment
    
    
    UnallocatedOperations
    
    
    Development
    
    
    Eliminations
    
    
    and Other
    
    
    TotalRevenues:Rental revenue
    
    $
    39,197
    
    
    $
    
    
    
    $
    (47
    )
    
    $
    
    
    
    $
    39,150Design-Build contract revenue and other sales
    
    
    
    
    
    
    93,169
    
    
    
    (10,068
    )
    
    
    
    
    
    
    83,101Property management and other fees
    
    
    1,713
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,713Development management and other income
    
    
    
    
    
    
    5,070
    
    
    
    (2,043
    )
    
    
    
    
    
    
    3,027Total revenues
    
    
    40,910
    
    
    
    98,239
    
    
    
    (12,158
    )
    
    
    
    
    
    
    126,991Certain operating expenses:Property operating and management
    
    
    15,686
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,686Design-Build contracts and development management
    
    
    
    
    
    
    81,066
    
    
    
    (9,659
    )
    
    
    
    
    
    
    71,407Selling, general, and administrative
    
    
    
    
    
    
    8,660
    
    
    
    (47
    )
    
    
    
    
    
    
    8,613Impairment charges
    
    
    
    
    
    
    120,920
    
    
    
    
    
    
    
    
    
    
    
    120,920Total certain operating expenses
    
    
    15,686
    
    
    
    210,646
    
    
    
    (9,706
    )
    
    
    
    
    
    
    216,62625,224
    
    
    
    (112,407
    )
    
    
    (2,452
    )
    
    
    
    
    
    
    (89,635
    )Interest and other income
    
    
    270
    
    
    
    4
    
    
    
    
    
    
    
    21
    
    
    
    295Corporate general and administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,729
    )
    
    
    (4,729
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,550
    )
    
    
    (11,550
    )Debt extinguishment and interest rate derivative expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,490
    )
    
    
    (2,490
    )Benefit from income taxes applicable to funds from
operations modified
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,311
    
    
    
    20,311Non-real estate related depreciation and amortization
    
    
    
    
    
    
    (390
    )
    
    
    
    
    
    
    (111
    )
    
    
    (501
    )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
    
    
    (470
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (470
    )Income from discontinued operations
    
    
    52
    
    
    
    
    
    
    
    
    
    
    
    (70
    )
    
    
    (18
    )Funds from operations modified (FFOM)
    
    
    25,090
    
    
    
    (112,793
    )
    
    
    (2,452
    )
    
    
    1,382
    
    
    
    (88,773
    )Amortization of intangibles related to purchase
accounting, net of income tax benefit
    
    
    (85
    )
    
    
    (3,820
    )
    
    
    
    
    
    
    1,523
    
    
    
    (2,382
    )Funds from operations (FFO)
    
    
    25,005
    
    
    
    (116,613
    )
    
    
    (2,452
    )
    
    
    2,905
    
    
    
    (91,155
    )Real estate related depreciation and amortization
    
    
    (14,689
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,689
    )Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    470
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    470Net income (loss)
    
    
    10,786
    
    
    
    (116,613
    )
    
    
    (2,452
    )
    
    
    2,905
    
    
    
    (105,374
    )Net income (loss) attributable to the noncontrolling
interest in:Real estate partnerships
    
    
    (141
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (141
    )Operating partnership
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,982
    
    
    
    32,982Net income (loss) attributable to Cogdell Spencer Inc.
    
    $
    10,645
    
    
    $
    (116,613
    )
    
    $
    (2,452
    )
    
    $
    35,887
    
    
    $
    (72,533
    )Total assets
    
    $
    549,460
    
    
    $
    200,656
    
    
    $
    
    
    
    $
    852
    
    
    $
    750,968
  15




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##### Table of Contents



5. Discontinued Operations
  For the Three Months Ended
    
    
    For the Six Months EndedJune 30, 2010
    
    
    June 30, 2009
    
    
    June 30, 2010
    
    
    June 30, 2009Revenues-Rental revenues
    
    $
    61
    
    
    $
    89
    
    
    $
    139
    
    
    $
    177Total revenues
    
    
    61
    
    
    
    89
    
    
    
    139
    
    
    
    177Expenses:Property operating and management
    
    
    68
    
    
    
    64
    
    
    
    130
    
    
    
    125Depreciation and amortization
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    69Interest expense
    
    
    (31
    )
    
    
    35
    
    
    
    3
    
    
    
    69Total expenses
    
    
    37
    
    
    
    134
    
    
    
    133
    
    
    
    263Income (loss) from discontinued operations
before gain on sale of real estate
property
    
    
    24
    
    
    
    (45
    )
    
    
    6
    
    
    
    (86
    )Gain on sale of real estate property
    
    
    264
    
    
    
    
    
    
    
    264
    
    
    
    Total discontinued operations
    
    $
    288
    
    
    $
    (45
    )
    
    $
    270
    
    
    $
    (86
    )
 6. Contracts
  June 30,
    
    
    December 31,2010
    
    
    2009Costs and estimated earnings on uncompleted contracts
    
    $
    52,064
    
    
    $
    79,374Billings to date
    
    
    (54,801
    )
    
    
    (90,701
    )Net billings in excess of costs and estimated earnings
    
    $
    (2,737
    )
    
    $
    (11,327
    )
  June 30,
    
    
    December 31,2010
    
    
    2009Costs and estimated earnings in excess of billings (1)
    
    $
    1,920
    
    
    $
    1,862Billings in excess of costs and estimated earnings
    
    
    (4,657
    )
    
    
    (13,189
    )Net billings in excess of costs and estimated earnings
    
    $
    (2,737
    )
    
    $
    (11,327
    )
 (1)
    
    Included in Other assets in the consolidated balance sheet 7. 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
    )
  16




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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
    )
       17




---



##### Table of Contents



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
  Six Months Ended June 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
  June 30, 2010
    
    
    December 31, 2009Accumulated
    
    
    
    
    
    
    AccumulatedGross Amount
    
    
    Amortization
    
    
    Gross Amount
    
    
    AmortizationAcquired signed contracts
    
    $
    13,253
    
    
    $
    13,253
    
    
    $
    13,253
    
    
    $
    13,253Acquired proposals
    
    
    2,129
    
    
    
    1,234
    
    
    
    2,129
    
    
    
    340Acquired customer relationships
    
    
    1,789
    
    
    
    390
    
    
    
    1,789
    
    
    
    144Acquired above market leases
    
    
    1,559
    
    
    
    1,056
    
    
    
    1,559
    
    
    
    955Acquired in place lease value and
deferred leasing costs
    
    
    40,666
    
    
    
    29,194
    
    
    
    40,666
    
    
    
    27,512Acquired ground leases
    
    
    3,562
    
    
    
    579
    
    
    
    3,562
    
    
    
    515Acquired property management contracts
    
    
    2,097
    
    
    
    679
    
    
    
    2,097
    
    
    
    594Total amortizing intangible assets
    
    $
    65,055
    
    
    $
    46,385
    
    
    $
    65,055
    
    
    $
    43,313
  FutureAmortizationFor the year ending:
    
    ExpenseRemainder of 2010
    
    $
    2,7192011
    
    
    3,4522012
    
    
    2,4612013
    
    
    1,5342014
    
    
    1,390Thereafter
    
    
    7,114$
    18,670
  18




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##### Table of Contents



8. Mortgage Notes Payable and Borrowing Agreements
 Scheduled Maturities
  For the year ending:
    
    TotalRemainder of 2010
    
    $
    8,6072011
    
    
    169,2332012
    
    
    24,9002013
    
    
    15,7582014
    
    
    60,812Thereafter
    
    
    116,814$
    396,124
          19




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##### Table of Contents



9. Derivative Financial Instruments
  As of June 30, 2010
    
    
    June 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
    
    
    $
    
    
    
    $
    1,542
    
    
    $
    
    
    
    $
    2,397Cogdell Spencer LP
    
    
    30,000
    
    
    1 Month LIBOR
    
    
    3.11
    %
    
    
    10/15/2008
    
    
    
    3/10/2011
    
    
    
    
    
    
    
    541
    
    
    
    
    
    
    
    697St. Francis Community MOB LLC
    
    
    6,779
    
    
    1 Month LIBOR
    
    
    3.32
    %
    
    
    10/15/2008
    
    
    
    6/15/2011
    
    
    
    
    
    
    
    189
    
    
    
    
    
    
    
    246St. Francis Medical Plaza (Greenville)
    
    
    7,282
    
    
    1 Month LIBOR
    
    
    3.32
    %
    
    
    10/15/2008
    
    
    
    6/15/2011
    
    
    
    
    
    
    
    203
    
    
    
    
    
    
    
    264Beaufort Medical Plaza
    
    
    4,700
    
    
    1 Month LIBOR
    
    
    3.80
    %
    
    
    8/18/2008
    
    
    
    8/18/2011
    
    
    
    
    
    
    
    176
    
    
    
    
    
    
    
    216East Jefferson Medical Plaza
    
    
    11,600
    
    
    1 Month LIBOR
    
    
    1.80
    %
    
    
    1/15/2009
    
    
    
    12/23/2011
    
    
    
    
    
    
    
    205
    
    
    
    
    
    
    
    121River Hills Medical Plaza
    
    
    3,472
    
    
    1 Month LIBOR
    
    
    1.78
    %
    
    
    1/15/2009
    
    
    
    1/31/2012
    
    
    
    
    
    
    
    58
    
    
    
    
    
    
    
    33HealthPartners Medical Office Building
    
    
    5,900
    
    
    1 Month LIBOR
    
    
    3.55
    %
    
    
    6/1/2010
    
    
    
    11/1/2014
    
    
    
    
    
    
    
    855
    
    
    
    
    
    
    
    186Lancaster ASC MOB
    
    
    10,513
    
    
    1 Month LIBOR
    
    
    4.03
    %
    
    
    3/14/2008
    
    
    
    3/2/2015
    
    
    
    
    
    
    
    1,017
    
    
    
    
    
    
    
    567Woodlands Center for Specialized Medicine
    
    
    16,751
    
    
    1 Month LIBOR
    
    
    4.71
    %
    
    
    4/1/2010
    
    
    
    10/1/2018
    
    
    
    
    
    
    
    2,577
    
    
    
    
    
    
    
    1,166Medical Center Physicians Tower
    
    
    14,770
    
    
    1 Month LIBOR
    
    
    3.69
    %
    
    
    9/1/2010
    
    
    
    3/1/2019
    
    
    
    
    
    
    
    1,064
    
    
    
    271
    
    
    
    University Physicians  Grants Ferry
    
    
    10,439
    
    
    1 Month LIBOR
    
    
    3.70
    %
    
    
    10/1/2010
    
    
    
    4/1/2019
    
    
    
    
    
    
    
    729
    
    
    
    217
    
    
    
    $
    
    
    
    $
    9,156
    
    
    $
    488
    
    
    $
    5,893
  Three Months Ended June 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
    
    $
    (2,932
    )
    
    Interest Expense
    
    $
    (1,741
    )
    
    Interest rate derivative expense
    
    $
    (10
    )
  Six Months Ended June 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
    
    $
    (4,396
    )
    
    Interest Expense
    
    $
    (1,995
    )
    
    Interest rate derivative expense
    
    $
    (25
    )
  20




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##### Table of Contents



Three Months Ended June 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
    
    $
    4,970
    
    
    Interest Expense
    
    $
    (1,246
    )
    
    Interest rate derivative expense
    
    $
    (1,529
    )
  Six Months Ended June, 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
    
    $
    4,806
    
    
    Interest Expense
    
    $
    (2,740
    )
    
    Interest rate derivative expense
    
    $
    (1,529
    )
 
 (1)
    
    Refer to the Condensed Consolidated Statement of Changes in Equity of 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 ofJune 30, 2010Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Liabilities:Derivative financial instruments
    
    $
    (9,156
    )
    
    $
    
    
    
    $
    (9,156
    )
    
    $
    
 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
    )
    
    $
    
  21




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##### Table of Contents



10. Equity
 Cogdell Spencer Inc. Stockholders Equity
  For the Six Months EndedJune 30,
    
    
    June 30,2010
    
    
    2009Common stock shares at beginning of
period
    
    
    42,729
    
    
    
    17,699Issuance of common stock
    
    
    7,133
    
    
    
    23,000Conversion of OP Units to common stock
    
    
    65
    
    
    
    1,814Restricted stock grants
    
    
    35
    
    
    
    13Common stock shares at end of period
    
    
    49,962
    
    
    
    42,526
  For the Six Months EndedJune 30,
    
    
    June 30,2010
    
    
    2009Net loss attributable to Cogdell Spencer Inc.
    
    $
    (8,736
    )
    
    $
    (72,533
    )Increase in Cogdell Spencer Inc. additional paid-in capital
for the conversion of OP units into common stock
    
    
    357
    
    
    
    17,695Change from net loss attributable to Cogdell Spencer Inc. and
transfers from noncontrolling interests
    
    $
    (8,379
    )
    
    $
    (54,838
    )
  Noncontrolling Interests in Operating Partnership
   22




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##### Table of Contents



Dividends and Distributions
  11. Incentive and Share-Based Compensation
         WeightedRestricted
    
    
    
    
    
    
    AverageStock
    
    
    LTIP Units
    
    
    Grant PriceUnvested balance at December 31, 2009
    
    
    5
    
    
    
    120
    
    
    $
    15.43Granted
    
    
    35
    
    
    
    134
    
    
    
    6.49Vested
    
    
    (40
    )
    
    
    (139
    )
    
    
    6.28Unvested balance at June 30, 2010
    
    
    
    
    
    
    115
    
    
    $
    15.72
  23




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##### Table of Contents



12. Related Party Transactions
  13. Subsequent Events
    
 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;
    
    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;
  24




---



##### Table of Contents




    
    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;
    
    market trends; and
    
    projected capital expenditures.
   Overview
      25




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##### Table of Contents




    
    64 consolidated wholly-owned and joint venture properties, comprising a total of
approximately 3.5 million net rentable square feet and an overall leased percentage of
91.0%,
 
    
    One wholly-owned property in lease-up totaling approximately 0.1 million net rentable
square feet and is 75% leased,
 
    
    Three unconsolidated joint venture properties comprising a total of approximately 0.2
million net rentable square feet, and
 
    
    45 properties managed for third party clients comprising a total of approximately 2.1
million net rentable square feet.
  Critical Accounting Policies
   Acquisition of Real Estate
   26




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##### Table of Contents



Acquisition of Business
  Useful Lives of Assets
  Asset Impairment Valuation
    27




---



##### Table of Contents



Revenue Recognition
     28




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##### Table of Contents



REIT Qualification Requirements
  Results of Operations
  Business Segments
  Property Summary
  Three Months Ended
    
    
    Six Months EndedJune 30, 2010
    
    
    June 30, 2009
    
    
    June 30, 2010
    
    
    June 30, 2009Properties at beginning of the period
    
    
    63
    
    
    
    62
    
    
    
    62
    
    
    
    62Developments (including lease-up
properties)
    
    
    2
    
    
    
    
    
    
    
    3
    
    
    
    Properties at end of the period
    
    
    65
    
    
    
    62
    
    
    
    65
    
    
    
    62
 Year EndedDecember 31,2009Properties at January 1
    
    
    62Developments
    
    
    1Discontinued operations
    
    
    (1
    )Properties at December 31
    
    
    62
  29




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##### Table of Contents



Comparison of the three and six months ended June 30, 2010 and 2009
 Funds from Operations Modified (FFOM)
    For the Three Months Ended
    
    
    For the Six Months EndedJune 30, 2010
    
    
    June 30, 2009
    
    
    June 30, 2010
    
    
    June 30, 2009FFOM attributable to:Property operations
    
    $
    13,043
    
    
    $
    12,573
    
    
    $
    26,483
    
    
    $
    25,090Design-Build and development, excluding
impairment charges
    
    
    712
    
    
    
    3,179
    
    
    
    8,044
    
    
    
    8,127Intersegment eliminations
    
    
    (1,709
    )
    
    
    (1,798
    )
    
    
    (2,227
    )
    
    
    (2,452
    )Unallocated and other, excluding non-recurring events
    
    
    (5,500
    )
    
    
    (7,519
    )
    
    
    (14,604
    )
    
    
    (16,272
    )FFOM, excluding non-recurring events
and impairment charges
    
    
    6,546
    
    
    
    6,435
    
    
    
    17,696
    
    
    
    14,493Non-recurring events and impairment charges:Goodwill and intangible asset impairment
charges, net of tax benefit
    
    
    (10,848
    )
    
    
    
    
    
    
    (10,848
    )
    
    
    (101,746
    )CEO retirement compensation expense,
net of tax benefit
    
    
    (2,545
    )
    
    
    
    
    
    
    (2,545
    )
    
    
    Debt extinguishment and interest rate
derivative expense, net of income
tax benefit
    
    
    
    
    
    
    (1,520
    )
    
    
    
    
    
    
    (1,520
    )FFOM
    
    $
    (6,847
    )
    
    $
    4,915
    
    
    $
    4,303
    
    
    $
    (88,773
    )
  30




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##### Table of Contents



For the Three Months Ended
    
    
    For the Six Months EndedJune 30, 2010
    
    
    June 30, 2009
    
    
    June 30, 2010
    
    
    June 30, 2009Net loss
    
    $
    (13,753
    )
    
    $
    (3,050
    )
    
    $
    (9,558
    )
    
    $
    (105,374
    )Add:Real estate related depreciation and amortization:Wholly-owned and consolidated properties,
including amounts in discontinued operations
    
    
    7,272
    
    
    
    7,344
    
    
    
    14,465
    
    
    
    14,684Unconsolidated real estate partnerships
    
    
    3
    
    
    
    3
    
    
    
    6
    
    
    
    5Less:Noncontrolling interests in real estate partnerships,
before real estate related depreciation and
amortization
    
    
    (479
    )
    
    
    (224
    )
    
    
    (1,094
    )
    
    
    (470
    )Gain on sale of real estate property
    
    
    (264
    )
    
    
    
    
    
    
    (264
    )
    
    
    Funds from Operations (FFO)
    
    
    (7,221
    )
    
    
    4,073
    
    
    
    3,555
    
    
    
    (91,155
    )Amortization of intangibles related to purchase
accounting, net of income tax benefit
    
    
    374
    
    
    
    842
    
    
    
    748
    
    
    
    2,382Funds from Operations Modified (FFOM)
    
    $
    (6,847
    )
    
    $
    4,915
    
    
    $
    4,303
    
    
    $
    (88,773
    )
 FFOM attributable to Property Operations, net of intersegment eliminations
  For the Three Months EndedJune 30, 2010
    
    
    June 30, 2009Rental revenue, net of intersegment eliminations of $23 in
2010 and 2009
    
    $
    20,995
    
    
    $
    19,574Property management and other fee revenue
    
    
    761
    
    
    
    863Property operating and management expenses
    
    
    (8,387
    )
    
    
    (7,821
    )Other income (expense)
    
    
    134
    
    
    
    129Earnings from unconsolidated real estate partnerships,
before real estate related depreciation and amortization
    
    
    3
    
    
    
    4Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    (479
    )
    
    
    (224
    )Income from discontinued operations, before real estate
related depreciation and amortization and gain on sale
    
    
    (7
    )
    
    
    25FFOM, net of intersegment eliminations
    
    $
    13,020
    
    
    $
    12,550
 For the Six Months EndedJune 30, 2010
    
    
    June 30, 2009Rental revenue, net of intersegment eliminations of
$46 in 2010 and $47 in 2009
    
    $
    42,240
    
    
    $
    39,150Property management and other fee revenue
    
    
    1,578
    
    
    
    1,713Property operating and management expenses
    
    
    (16,585
    )
    
    
    (15,686
    )Other income (expense)
    
    
    280
    
    
    
    270Earnings from unconsolidated real estate partnerships,
before real estate related depreciation and amortization
    
    
    9
    
    
    
    8Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization
    
    
    (1,094
    )
    
    
    (470
    )Income from discontinued operations, before real estate
related depreciation and amortization and gain on sale
    
    
    9
    
    
    
    58FFOM, net of intersegment eliminations
    
    $
    26,437
    
    
    $
    25,043
    31




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##### Table of Contents



FFOM attributable to Design-Build and Development, net of intersegment eliminations
  For the Three Months EndedJune 30, 2010
    
    
    June 30, 2009Design-Build contract revenue and other sales, net of intersegment eliminations
of $8,993 in 2010 and $5,297 in 2009
    
    $
    15,236
    
    
    $
    36,712Development management and other income, net of intersegment eliminations
of $2,249 in 2010 and $1,207 in 2009
    
    
    17
    
    
    
    227Design-Build contract and development management expenses, net of intersegment
eliminations of $9,533 in 2010 and $4,706 in 2009
    
    
    (11,407
    )
    
    
    (31,242
    )Selling, general, and administrative expenses, net of intersegment eliminations
of $23 in 2010 and 2009
    
    
    (4,583
    )
    
    
    (4,099
    )Other income (expense)
    
    
    
    
    
    
    2Depreciation and amortization
    
    
    (237
    )
    
    
    (196
    )FFOM, excluding impairment charge, net of intersegment eliminations
    
    
    (974
    )
    
    
    1,404Goodwill and intangible asset impairment charges
    
    
    (13,635
    )
    
    
    FFOM, net of intersegment eliminations
    
    $
    (14,609
    )
    
    $
    1,404
 For the Six Months EndedJune 30, 2010
    
    
    June 30, 2009Design-Build contract revenue and other sales, net of intersegment eliminations
of $12,757 in 2010 and $10,068 in 2009
    
    $
    50,672
    
    
    $
    83,101Development management and other income, net of intersegment eliminations
of $3,032 in 2010 and $2,043 in 2009
    
    
    120
    
    
    
    3,027Design-Build contract and development management expenses, net of intersegment
eliminations of $13,562 in 2010 and $9,659 in 2009
    
    
    (36,026
    )
    
    
    (71,407
    )Selling, general, and administrative expenses, net of intersegment eliminations
of $46 in 2010 and $47 in 2009
    
    
    (8,449
    )
    
    
    (8,613
    )Other income (expense)
    
    
    3
    
    
    
    4Depreciation and amortization
    
    
    (457
    )
    
    
    (390
    )FFOM, excluding impairment charge, net of intersegment eliminations
    
    
    5,863
    
    
    
    5,722Goodwill and intangible asset impairment charges
    
    
    (13,635
    )
    
    
    (120,920
    )FFOM, net of intersegment eliminations
    
    $
    (7,772
    )
    
    $
    (115,198
    )
     32




---



##### Table of Contents



Selling, general, and administrative
  Depreciation and amortization
  Impairment charges
   Interest expense
   33




---



##### Table of Contents



Income tax benefit (expense)
   Cash Flows
 Comparison of the six months ended June 30, 2010 and 2009
  For the Six Months EndedJune 30, 2010
    
    
    June 30, 2009Net income (loss) plus non-cash adjustments
    
    $
    16,956
    
    
    $
    16,042Changes in operating assets and liabilities
    
    
    (5,878
    )
    
    
    146Net cash provided by operating activities
    
    $
    11,078
    
    
    $
    16,188
    For the Six Months EndedJune 30, 2010
    
    
    June 30, 2009Development,
redevelopment, and acquisitions
    
    $
    20,660
    
    
    $
    17,954Second generation tenant improvements
    
    
    1,321
    
    
    
    1,353Recurring property capital expenditures
    
    
    42
    
    
    
    475Investment in real estate properties
    
    $
    22,023
    
    
    $
    19,782
   34




---



##### Table of Contents



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
    
    
    $
    4,161
    
    
    $
    24,700Bonney Lake MOB Investors, LLC
    
    Bonney Lakes, WA
    
    
    3Q 2011
    
    
    
    56,000
    
    
    
    1,671
    
    
    
    17,700Land and pre-construction developments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,119
    
    
    
    136,000
    
    
    $
    7,951
    
    
    $
    42,400
 Liquidity and Capital Resources
        35




---



##### Table of Contents



Financial Covenant
    
    June 30, 2010Maximum total leverage ratio (0.70 to 1.00)
    
    0.48 to 1.00Maximum real estate leverage ratio (0.70 to 1.00)
    
    0.53 to 1.00Minimum fixed charge coverage ratio (1.50 to 1.00)
    
    2.40 to 1.00Minimum consolidated tangible net worth ($182,032)
    
    $272,120Maximum total debt to real estate value ratio (0.90 to 1.00)
    
    0.61 to 1.00
    Financial Covenant
    
    June 30, 2010Minimum adjusted consolidated EBITDA
to consolidated fixed charges (2.00 to 1.00)
    
    4.12 to 1.00Maximum consolidated senior indebtedness to
adjusted consolidated EBITDA (3.50 to 1.00,
with a one-time ability to exceed 3.50 to 1.00,
but not greater than 3.75 to 1.00)
    
    2.39 to 1.00Maximum consolidated indebtedness to adjusted
consolidated EBITDA (5.50 to 1.00)
    
    2.39 to 1.00
    36




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##### Table of Contents



Short-Term Liquidity Needs
       Long-Term Liquidity Needs
   37




---



##### Table of Contents



Contractual Obligations
  Remainder of2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    TotalObligation:Long-term debt principal
payments and maturities (1)
    
    $
    8,607
    
    
    $
    169,233
    
    
    $
    24,900
    
    
    $
    15,758
    
    
    $
    60,812
    
    
    $
    116,813
    
    
    $
    396,123Standby letters of credit (2)
    
    
    6,821
    
    
    
    1,186
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,007Interest payments (3)
    
    
    16,718
    
    
    
    12,990
    
    
    
    10,630
    
    
    
    9,606
    
    
    
    7,957
    
    
    
    17,149
    
    
    
    75,050Purchase commitments (4)
    
    
    638
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    638Ground and air rights leases (5)
    
    
    401
    
    
    
    801
    
    
    
    439
    
    
    
    407
    
    
    
    407
    
    
    
    11,223
    
    
    
    13,678Operating leases (6)
    
    
    2,715
    
    
    
    4,886
    
    
    
    4,120
    
    
    
    3,280
    
    
    
    3,248
    
    
    
    23,621
    
    
    
    41,870Total
    
    $
    35,900
    
    
    $
    189,096
    
    
    $
    40,089
    
    
    $
    29,051
    
    
    $
    72,424
    
    
    $
    168,806
    
    
    $
    535,366
 
 (1)
    
    Includes notes payable under the Companys 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.(3)
    
    Assumes one-month LIBOR of 0.35% and Prime Rate of 3.25%, which were the rates as of
June 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.  38




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##### Table of Contents



Off-Balance Sheet Arrangements
  Real Estate Taxes
  Inflation
  Seasonality
  Recent Accounting Pronouncements
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     39




---



##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
    
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  Risks Related to Recent Healthcare Legislation
 Healthcare legislation and adverse trends in healthcare provider operations may negatively affect
the Companys lease revenues and its ability to make distributions to its stockholders.
  
    
    changes in the demand for and methods of delivering healthcare services;
 
    
    changes in third party reimbursement policies;
 
    
    substantial competition for patients among healthcare providers;
 
    
    continued pressure by private and governmental payors to reduce payments to
providers of services; and
 
    
    increased scrutiny of billing, referral and other practices by U.S. federal and
state authorities.
  Reductions in reimbursement from third party payors, including Medicare and Medicaid, could
adversely affect the profitability of the Companys tenants and hinder their ability to make rent
payments to the Company.
   40




---



##### Table of Contents



The healthcare industry is heavily regulated, and new laws or regulations, changes to existing laws
or regulations, loss of licensure or failure to obtain licensure could result in the inability of
the Companys tenants to make rent payments to the Company.
    The Companys tenants are subject to the Stark Law and fraud and abuse laws, the violation of which
by a tenant may jeopardize the tenants ability to make rent payments to the Company.
   41




---



##### Table of Contents




    
    the Federal Anti-Kickback Statute, which prohibits, among other things, the offer,
payment, solicitation or receipt of any form of remuneration in return for, or to
induce, the referral of Medicare and Medicaid patients;
 
    
    the Stark Law, which, subject to specific exceptions, restricts physicians who
have financial relationships with healthcare providers from making referrals for
specifically designated health services for which payment may be made under Medicare
or Medicaid programs to an entity with which the physician, or an immediate family
member, has a financial relationship;
 
    
    the False Claims Act, which prohibits any person from knowingly presenting false
or fraudulent claims for payment to the federal government, including under the
Medicare and Medicaid programs; and
 
    
    the Civil Monetary Penalties Law, which authorizes the Department of Health and
Human Services to impose monetary penalties for certain fraudulent acts.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Issuer Purchases of Equity Securities
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. REMOVED AND RESERVED
 
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 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.
  42




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##### Table of Contents



SIGNATURES
  COGDELL SPENCER INC.RegistrantDate: August 9, 2010
    /s/ Frank C. SpencerFrank C. SpencerPresident and Chief Executive OfficerDate: August 9, 2010
    /s/ Charles M. HandyCharles M. HandySenior Vice President and Chief Financial Officer  43