-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S/SLXec6f0eeYXxzAAnLoloouJ/RW1IMFPacE2aSAf/IQdZAWAcrR+/fgjqzB+Rp TGrF0dYMjerPs42Z12hcMg== 0000950137-97-002940.txt : 19970912 0000950137-97-002940.hdr.sgml : 19970911 ACCESSION NUMBER: 0000950137-97-002940 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970619 ITEM INFORMATION: FILED AS OF DATE: 19970828 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL GROWTH PROPERTIES INC CENTRAL INDEX KEY: 0000895648 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 421283895 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-11656 FILM NUMBER: 97672089 BUSINESS ADDRESS: STREET 1: 55 WEST MONROE ST STREET 2: STE 3100 CITY: CHICAGO STATE: IL ZIP: 60603 BUSINESS PHONE: 3125515000 MAIL ADDRESS: STREET 1: 55 WEST MONROE ST STREET 2: STE 3100 CITY: CHICAGO STATE: IL ZIP: 60603 8-K/A 1 CURRENT REPORT 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JUNE 19, 1997 GENERAL GROWTH PROPERTIES, INC. ------------------------------------------------------ (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 1-11656 42-1283895 - ------------------------------------------------------------------------------- (STATE OR OTHER (COMMISSION (IRS EMPLOYER JURISDICTION OF FILE NUMBER) IDENTIFICATION NO.) INCORPORATION) 55 WEST MONROE ST., SUITE 3100, CHICAGO, ILLINOIS 60603 ----------------------------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (312) 551-5000 2 ONLY THOSE ITEMS AMENDED ARE REPORTED HEREIN. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. Listed below are the financial statements, pro forma financial information and exhibits filed as a part of this report: a. Financial Statements of Businesses Acquired. The financial statements of Market Place and Southlake Mall listed in the accompanying Index to Financial Statements and Pro Forma Financial Information are filed as part of this Current Report on Form 8-K/A. b. Pro Forma Financial Information. The pro forma financial information of General Growth Properties, Inc. listed in the accompanying Index to Financial Statements and Pro Forma Financial Information is filed as part of this Current Report on Form 8-K/A. c. Exhibits See Exhibit Index attached hereto and incorporated herein. 2 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. GENERAL GROWTH PROPERTIES, INC. By: /s/ Bernard Freibaum ---------------------------- Bernard Freibaum Executive Vice President and Chief Financial Officer Date: August 28, 1997 3 4 INDEX TO FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION The following financial statements and pro forma financial information are included in Item 7 of this Current Report on Form 8-K/A:
MARKET PLACE SHOPPING CENTER Page ---------------------------- ---- Independent Auditor's Report F-3 Statement of Revenues and Certain Expenses for the Year Ended December 31, 1996 F-4 Notes to Statement of Revenues and Certain Expenses F-5 SOUTHLAKE MALL -------------- Independent Accountants' Report F-8 Statement of Revenues and Certain Expenses for the Year Ended December 31, 1996 F-9 Notes to Statement of Revenues and Certain Expenses F-10 GENERAL GROWTH PROPERTIES, INC. ------------------------------- Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 1996 (Unaudited) F-12 Notes to Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 1996 (Unaudited) F-13 Pro Forma Condensed Consolidated Statement of Operations for the Three Months Ended March 31, 1997 (Unaudited) F-15 Notes to Pro Forma Condensed Consolidated Statement of Operations for the Three Months Ended March 31, 1997 (Unaudited) F-16 Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1997 (Unaudited) F-18 Notes to Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1997 (Unaudited) F-19
F-1 5 MARKET PLACE SHOPPING CENTER REPORT ON STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1996 F-2 6 SHEPARD SCHWARTZ & HARRIS LLP CERTIFIED PUBLIC ACCOUNTANTS 150 NORTH WACKER DRIVE CHICAGO, ILLINOIS 60606-1662 (312) 726-8353 INDEPENDENT AUDITORS' REPORT ---------------------------- To the Board of Directors General Growth Properties, Inc. We have audited the accompanying statement of revenues and certain expenses of Market Place Shopping Center for the year ended December 31, 1996. This financial statement is the responsibility of Market Place Shopping Center's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with certain rules and regulations of the Securities and Exchange Commission (for inclusion in the Form 8-K/A of General Growth Properties, Inc.) as described in Note B and is not intended to be a complete presentation of Market Place Shopping Center's revenues and expenses. In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of Market Place Shopping Center for the year ended December 31, 1996 in conformity with generally accepted accounting principles. Certified Public Accountants February 19, 1997 F-3 7 MARKET PLACE SHOPPING CENTER EXHIBIT A - -------------------------------------------------------------------------------- STATEMENT OF REVENUES AND CERTAIN EXPENSES Year Ended December 31, 1996 - -------------------------------------------------------------------------------- Revenues Rental income Minimum $ 6,002,461 Overage rent 42,307 ------------- Total 6,044,768 Tenant expense reimbursements 2,959,658 Sundry 320,278 Lease termination fee 175,500 Interest income 95,228 Marketing fund (net) 48,291 ------------- Total 9,643,723 ------------- Expenses Real estate taxes 1,196,076 Central plant expenses 504,444 Mall HVAC expenses 117,916 Common area expenses 806,311 Management fees 347,461 Bad debt expense 131,432 Professional fees 63,357 Insurance 28,941 Merchants' association fees 52,174 Repairs and maintenance 138,547 Sundry 69,305 Asbestos costs 11,493 ------------- Total 3,467,457 ------------- Revenues in excess of certain expenses $ 6,176,266 =============
The accompanying notes are an integral part of this statement. F-4 SHEPARD SCHWARTZ & HARRIS LLP 8 MARKET PLACE SHOPPING CENTER - -------------------------------------------------------------------------------- NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES Note 1 - Nature of Operations Market Place Shopping Center (the "Shopping Center") consists of a 689,000 square foot enclosed mall shopping center, a 117,000 square foot strip "Convenience Center" and a 14,600 square foot free standing cinema located in Champaign, Illinois. Three tenants lease approximately 66% of the enclosed mall shopping center and were responsible for approximately 23% of total revenue recognized in 1996. The Shopping Center was sold to General Growth Properties, Inc. (the "Company") on March 31, 1997. Note B - Summary of Significant Accounting Policies Basis of Presentation The statement is not representative of the actual operations for the period presented as certain expenses that may not be comparable to the expenses expected to be incurred in the future operations of the acquired property have been excluded in accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission. Expenses excluded consist of interest, depreciation, amortization, and other costs not directly related to the future operations of the property. Rental Income Income from operating leases with scheduled rent increases is recognized on a straight-line basis over the respective lease term regardless of when payments are due. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and certain expenses during the reporting period. Actual results could differ from those estimates. Advertising Costs The cost of advertising is expenses when incurred or the first time the advertising takes place. Income Taxes Market Place Shopping Center's taxable income is taxed at the individual level. No provision for income taxes is included in the accompanying financial statements. F-5 SHEPARD SCHWARTZ & HARRIS LLP 9 MARKET PLACE SHOPPING CENTER - -------------------------------------------------------------------------------- NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES Note C - Leasing Arrangements The Shopping Center's leases with tenants are classified as operating leases. Leases generally range from 1 to 10 years and usually provide for minimum rentals, overage rentals based on sales and sharing of certain operating costs. Minimum future rentals on noncancellable operating leases as of December 31, 1996 are as follows: Year Amount ------ ------------ 1997 $6,051,100 1998 5,796,800 1999 5,465,600 2000 5,305,000 2001 4,965,500 Thereafter 15,331,000 ------------ $42,915,000 ============
F-6 SHEPARD SCHWARTZ & HARRIS LLP 10 SOUTHLAKE MALL STATEMENT OF REVENUES AND CERTAIN EXPENSES DECEMBER 31, 1996 WITH INDEPENDENT ACCOUNTANTS' REPORT THEREON F-7 11 INDEPENDENT ACCOUNTANTS' REPORT The Owners Southlake Mall: We have audited the accompanying statement of revenues and certain expenses of the Southlake Mall for the year ended December 31, 1996. This financial statement is the responsibility of the management of the property. Our responsibility is to express an opinion on this statement of revenues and certain expenses based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenue and certain expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenue and certain expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statement of revenue and certain expenses. We believe that our audit provides a reasonable basis for our opinion. The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with certain rules and regulations of the Securities and Exchange Commission (for inclusion in the Form 8-K/A) as described in note 2 and is not intended to be a complete presentation of revenues and expenses of the Southlake Mall. In our opinion, the statement of revenues and certain expenses for the year ended December 31, 1996, presents fairly, in all material respects, the revenues and certain expenses of the Southlake Mall for the year ended December 31, 1996, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Atlanta, Georgia March 12, 1997 F-8 12 SOUTHLAKE MALL Statement of Revenues and Certain Expenses Year ended December 31, 1996 Revenues: Rental income $ 6,074,561 Tenants common area, property taxes, and insurance recovery 3,778,015 Interest income 84,275 Other income 675,300 ------------ 10,612,151 ------------ Expenses: Building and common area 2,356,776 Real estate taxes 759,478 General and administrative 539,358 ------------- 3,655,612 ------------- Revenues in excess of certain expenses $ 6,956,539 =============
See accompanying notes to statement of revenues and certain expenses. F-9 13 SOUTHLAKE MALL Notes to Statement of Revenues and Certain Expenses (1) Business -------- The statement of revenues and certain expenses includes the operations of the Southlake Mall (the "Mall"). The Mall, which is located in Georgia, was sold to General Growth Properties, Inc. (the "Company") on June 19, 1997. (2) Summary of Significant Accounting Policies ------------------------------------------ (a) Basis of Presentation --------------------- The financial statement is not representative of the actual operations for the period presented as certain expenses that may not be comparable to the expenses expected to be incurred in the future operations of the acquired properties have been excluded in accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission. Expenses excluded consist of interest, depreciation, amortization, and other costs not directly related to the future operations of the property. (b) Revenue Recognition ------------------- Income from operating leases with scheduled rent increases is recognized on a straight-line basis over the respective lease term regardless of when payments are due. (c) Estimates --------- The preparation of financial statements requires management to make estimates and assumptions. Actual results could differ from those estimates. (3) Leases ------ The following is a schedule, by year, of future minimum rental payments expected under executed operating leases of the Southlake Mall that have noncancelable lease terms, as of December 31, 1996. 1997 $ 5,368,404 1998 4,929,689 1999 4,460,062 2000 3,973,012 2001 and beyond 19,383,999 ----------- $38,115,166 ===========
F-10 14 GENERAL GROWTH PROPERTIES, INC. Pro Forma Financial Statements F-11 15 GENERAL GROWTH PROPERTIES, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (DOLLARS IN THOUSANDS - UNAUDITED)
Historical 1996 General Growth Property Pro Forma Properties, Inc.(1) Acquisitions Adjustments Pro Forma (1) --------------------- --------------------- --------------------- --------------------- Total Revenues $ 217,405 $ 25,228 $ - $ 242,633 Expenses: Property operating 73,241 7,459 - 80,700 Management fees 2,713 974 (557) (a) 3,130 Depreciation and amortization 39,809 - 3,878 (b) 43,687 --------------------- --------------------- --------------------- --------------------- Total Expenses 115,763 8,433 3,321 127,517 --------------------- --------------------- --------------------- --------------------- Operating Income 101,642 16,795 (3,321) 115,116 Interest expense, net (66,439) - (6,558) (c) (72,997) Equity in unconsolidated affiliates: Quail Springs 110 888 - 998 Town East - - - - Investment in GGMI (1,273) - - (1,273) CenterMark Properties, Inc. 9,397 - 953 (d) 10,350 GGP/Homart, Inc. 9,355 - - 9,355 --------------------- --------------------- --------------------- --------------------- Income before minority interest 52,792 17,683 (8,926) 61,549 Minority interest in Operating Partnership - - (22,952) (e) (22,952) -------------------- --------------------- -------------------- -------------------- Net Income $ 52,792 $ 17,683 $ (31,878) $ 38,597 ==================== ===================== ==================== ==================== 1997 Acquisitions ------------------------------------------------------- Other Pro Forma Market Place SouthLake Properties Adjustments Pro Forma --------------- --------------- --------------- --------------- --------------- Total Revenues $ 9,644 $ 10,612 $ 6,862 $ - $ 269,751 Expenses: Property operating 3,120 3,656 3,185 - 90,661 Management fees 348 - 328 (376)(a) 3,430 Depreciation and amortization - - - 3,794 (b) 47,481 --------------- --------------- --------------- --------------- --------------- Total Expenses 3,468 3,656 3,513 3,418 141,572 --------------- --------------- --------------- --------------- --------------- Operating Income 6,176 6,956 3,349 (3,418) 128,179 Interest expense, net - - - (7,335)(c) (80,332) Equity in unconsolidated affiliates: Quail Springs - - - - 998 Town East - - 3,032 - 3,032 Investment in GGMI - - - - (1,273) CenterMark Properties, Inc. - - - (10,350)(d) - GGP/Homart, Inc. - - - - 9,355 --------------- --------------- --------------- --------------- --------------- Income before minority interest 6,176 6,956 6,381 (21,103) 59,959 Minority interest in Operating Partnership - - - 314 (e) (22,638) --------------- --------------- --------------- --------------- --------------- Net Income $ 6,176 $ 6,956 $ 6,381 $ (20,789) $ 37,321 =============== =============== =============== =============== =============== Proforma Net Income per share(2) $ 1.26 ===============
(1) Amounts are from the statements and footnotes included in the 1996 Form 10-K except that the non-recurring gain on sale of a portion of the CenterMark stock and the extraordinary item are excluded. (2) Pro Forma earnings per share are based on 29,717,353 proforma average shares outstanding. The accompanying notes are an integral part of the Pro Forma Condensed Consolidated Statement of Operations. For alphabetical references please refer to Note 3 Pro Forma Adjustments. F-12 16 GENERAL GROWTH PROPERTIES, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (DOLLARS IN THOUSANDS - UNAUDITED) NOTE 1 PRO FORMA BASIS OF PRESENTATION This unaudited condensed consolidated statement of operations is presented as if the sale of CenterMark Properties, Inc. ("CenterMark") and the acquisitions made in 1996 (Sooner Fashion Mall, Quail Springs Mall, Lakeview Square Mall, Lansing Mall and Westwood Mall) and in 1997 (Market Place Shopping Center, Century Plaza, Town East Mall and Southlake Mall), had all occurred on January 1, 1996. In management's opinion, all adjustments necessary to reflect these transactions have been included. Such pro forma statement of operations is based upon the historical information of General Growth Properties, Inc. excluding the non-recurring gain on sale of a portion of CenterMark stock and extraordinary item and each of the above-mentioned entities. This unaudited pro forma statement of operations is not necessarily indicative of what actual results of General Growth Properties, Inc. would have been assuming such transactions had been completed as of January 1, 1996 nor does it purport to represent the results of operations for future periods. NOTE 2 ACQUISITIONS/DISPOSITIONS On June 28, 1996, Westfield U.S. Investments, Pty. Limited exercised its option to acquire the remaining 30% of the outstanding CenterMark stock from General Growth Properties (the "Company") in two transactions. The first payment in the amount of $87.0 million was received on July 1, 1996, and the second payment in the amount of $130.5 million was received on January 2, 1997. During the fourth quarter of 1996, the Company acquired a 100% ownership interest in five properties, Park Mall, Sooner Fashion Mall, Lakeview Square, Lansing Mall and Westwood Mall, and a 50% interest in Quail Springs Mall. On October 4, 1996, Park Mall in Tucson, Arizona was acquired for one million shares of newly issued common stock ($25.0 million) and the payment of $24.0 million in cash. Sooner Fashion Mall and 50% of Quail Springs Mall, in Norman and Oklahoma City, Oklahoma, respectively, were acquired on November 27, 1996, for 895,928 newly issued common shares ($24.8 million), the assumption of $8.6 million of mortgage debt and the payment of $16.7 million in cash. On December 6, 1996, the Company acquired Lakeview Square, Lansing Mall and Westwood Mall, all located in south central Michigan for an aggregate purchase price of $132.1 million. The purchase price consisted of $92.4 million of mortgage debt assumption, of which $4.4 million was retired at closing, and 1,445,000 newly issued Operating Partnership Units ($39.7 million). These acquisitions along with the applicable pro forma information was reported in Amendment No. 2 to Form 8-K/A filed on February 18, 1997. On March 31, 1997, the Company acquired a 100% interest in Market Place Mall for a cash purchase price of approximately $70.0 million which was funded by an unsecured short-term facility. Market Place Mall is located in Champaign, Illinois. F-13 17 During the second quarter of 1997, the Company also acquired a 100% ownership interest in two other properties, Century Plaza Shopping Center, Southlake Mall and a 50% interest in Town East Mall. Century Plaza Shopping Center located in Birmingham, Alabama was acquired on May 1, 1997 for $31.8 million in cash. Southlake Mall was acquired on June 19, 1997, for a purchase price of $67.0 million. The purchase price consisted of $45.1 million of mortgage debt assumption, $11.5 million (353,537 units) of newly issued Operating Partnership Units, and $10.4 million in cash. Southlake Mall is located in Atlanta, Georgia. On June 11, 1997, the Company acquired a 50% interest in Town East Mall, located in Mesquite, Texas for $56.6 million. The consideration included approximately $27.5 million in cash, the assumption of approximately $27.9 million of mortgage indebtedness and the assumption of $1.1 million in net current liabilities. NOTE 3 PRO FORMA ADJUSTMENTS (a) MANAGEMENT FEES The management fee adjustment represents the difference in management costs charged and/or allocated to the properties by the previous owner and the new rate charged by General Growth Management, Inc. (b) DEPRECIATION AND AMORTIZATION Depreciation and amortization is adjusted to include additional amounts related to the periods from January 1, 1996 to the dates of acquisition for the 1996 acquisitions and for the entire year of 1996 for the acquisitions made in 1997. (c) INTEREST EXPENSE Interest expense increased due to a combination of debt assumption, increased corporate borrowings and the repayment of outstanding indebtedness with the proceeds from the sale of CenterMark. In connection with the acquisitions described above, the Company assumed $169.6 million of mortgage debt bearing interest at the weighted average rate of 9.35%. The Company also borrowed approximately $184.8 million to fund the cash portion of the acquisitions. Company indebtedness was reduced by $217.5 million with the proceeds from the sale of CenterMark Properties. The pro forma interest expense on new borrowings and the interest expense reduction from the use of the CenterMark proceeds was calculated using an interest rate of 7.34%. (d) EQUITY IN CENTERMARK The adjustment of $1.0 million included in the 1996 Pro Forma filed in the Company's Form 10-K reflects the reduction in ownership offset by the change from the equity method of accounting to the cost method. The Company, prior to January 2, 1997, had owned a minority interest in CenterMark Properties, and as a result of the sale an adjustment of $10.4 million was made to remove the income previously recognized from the pro forma income statement. (e) MINORITY INTEREST The pro forma income statement has been adjusted to reflect the allocation of earnings to the minority interest. F-14 18 GENERAL GROWTH PROPERTIES, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 (DOLLARS IN THOUSANDS - UNAUDITED)
General Growth Market Other Pro Forma Properties, Inc. (1) Place Southlake Properties Adjustments Pro Forma ------------------ ---------- ------------- ------------- ------------- ------------ Total Revenues $ 65,328 $ 2,421 $ 2,426 $ 1,673 $ - $ 71,848 Expenses: Property operating 23,007 749 906 699 - 25,361 Management fees 750 83 84 85 (177)(a) 825 Depreciation and amortization 11,162 - - - 949 (b) 12,111 ------------------ ---------- ------------- ------------- ------------- ------------ Total Expenses 34,919 832 990 784 772 38,297 ------------------ ---------- ------------- ------------- ------------- ------------ Operating Income 30,409 1,589 1,436 889 (772) 33,551 Interest expense, net (15,439) - - - (4,186)(c) (19,625) Equity in unconsolidated affiliates: Quail Springs 327 - - - - 327 Town East - - - 713 - 713 Investment in GGMI (273) - - - - (273) CenterMark Properties, Inc. - - - - - - GGP/Homart, Inc. 1,824) - - - - 1,824 ------------------ ---------- ------------- ------------- ------------- ------------ Income before minority interest 16,848 1,589 1,436 1,602 (4,958) 16,517 Minority interest in Operating Partnership - - - - (6,155)(d) (6,155) ------------------ ---------- ------------- ------------- ------------- ------------ Net Income $ 16,848 $ 1,589 $ 1,436 $ 1,602 $ (11,113) $ 10,362 ================== ========== ============= ============= ============= ============ Proforma Net Income per share(2) $ 0.34 ============
(1) Amounts are from the statements included in the Form 10-Q for the quarter ended March 31, 1997 except that the non-recurring gain on sale of a portion of the CenterMark stock and the extraordinary item are excluded. (2) Pro Forma earnings per share are based on 30,789,539 proforma average shares outstanding. The accompanying notes are an integral part of the Pro Forma Condensed Consolidated Statement of Operations. For alphabetical references please refer to Note 3 Pro Forma Adjustments. F-15 19 GENERAL GROWTH PROPERTIES, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 (DOLLARS IN THOUSANDS - UNAUDITED) NOTE 1 PRO FORMA BASIS OF PRESENTATION This unaudited condensed consolidated statement of operations is presented as if the sale of CenterMark Properties, Inc. ("CenterMark") and the 1997 acquisitions of Market Place Shopping Center, Century Plaza, Town East Mall and Southlake Mall, had all occurred on January 1, 1997. In management's opinion, all adjustments necessary to reflect these transactions have been included. Such pro forma statement of operations is based upon the historical information of General Growth Properties, Inc. excluding the non-recurring gain on the sale of a portion of CenterMark stock and extraordinary item and each of the above-mentioned entities. This unaudited pro forma statement of operations is not necessarily indicative of what actual results of General Growth Properties, Inc. would have been assuming such transactions had been completed as of January 1, 1997 nor does it purport to represent the results of operations for future periods. NOTE 2 ACQUISITIONS/DISPOSITIONS On June 28, 1996, Westfield U.S. Investments, Pty. Limited exercised its option to acquire the remaining 30% of the outstanding CenterMark stock from General Growth Properties (the "Company") in two transactions. The final payment in the amount of $130.5 million was received on January 2, 1997. On March 31, 1997, the Company acquired a 100% interest in Market Place Mall for a cash purchase price of approximately $70.0 million which was funded by an unsecured short-term facility. Market Place Mall is located in Champaign, Illinois. During the second quarter of 1997, the Company also acquired a 100% ownership interest in two other properties, Century Plaza Shopping Center, Southlake Mall and a 50% interest in Town East Mall. Century Plaza Shopping Center located in Birmingham, Alabama was acquired on May 1, 1997 for $31.8 million in cash. Southlake Mall was acquired on June 19, 1997, for a purchase price of $67.0 million. The purchase price consisted of $45.1 million of mortgage debt assumption, $11.5 million (353,537 units) of newly issued Operating Partnership Units, and $10.4 million in cash. Southlake Mall is located in Atlanta, Georgia. On June 11, 1997, the Company acquired a 50% interest in Town East Mall, located in Mesquite, Texas for $56.6 million. The consideration included approximately $27.5 million in cash, the assumption of approximately $27.9 million of mortgage indebtedness and the assumption of $1.1 million in net current liabilities. F-16 20 NOTE 3 PRO FORMA ADJUSTMENTS (a) MANAGEMENT FEES The management fee adjustment represents the difference in management costs charged and/or allocated to the properties by the previous owner and the new rate charged by General Growth Management, Inc. (b) DEPRECIATION AND AMORTIZATION Depreciation and amortization is adjusted to include additional amounts for the three months ended March 31, 1997, for the acquisitions made in 1997. (c) INTEREST EXPENSE Interest expense increased due to a combination of debt assumption, increased corporate borrowings and the repayment of outstanding indebtedness with the proceeds from the sale of CenterMark. In connection with the acquisitions described above, the Company assumed $73.0 million of mortgage debt bearing interest at the weighted average rate of 9.00%. The Company also borrowed approximately $140.9 million to fund the cash portion of the acquisitions. Company indebtedness was reduced by $130.5 million with the proceeds from the sale of CenterMark Properties. The pro forma interest expense on new borrowings and the interest expense reduction savings from the use of the CenterMark proceeds was calculated using an interest rate of 7.22%. (d) MINORITY INTEREST F-17 21 GENERAL GROWTH PROPERTIES, INC. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET MARCH 31, 1997 (DOLLARS IN THOUSANDS - UNAUDITED)
Historical General Growth Pro Forma Properties, Inc.(1) Adjustments Pro Forma -------------------- -------------------- -------------------- Assets Investment in real estate: Land $ 180,263 $ 9,864 (a) $ 190,127 Buildings and equipment 1,416,729 88,721 (a) 1,505,450 Less accumulated depreciation (198,943) - (198,943) Developments in progress 47,006 - 47,006 -------------------- -------------------- -------------------- Net property and equipment 1,445,055 98,585 (a) 1,543,640 Investment in GGP/Homart 194,751 - 194,751 Investment in Quail Springs Mall 15,516 - 15,516 Investment in Town East Mall - 28,659 (b) 28,659 -------------------- -------------------- -------------------- Net investment in real estate 1,655,322 127,244 1,782,566 Cash and cash equivalents 13,645 - 13,645 Tenant receivables, net 28,418 230 (c) 28,648 Investment in and note receivable from General Growth Management, Inc. 48,483 - 48,483 Other assets 36,506 1,039 (c) 37,545 -------------------- -------------------- -------------------- Total Assets $ 1,782,374 $ 128,513 $ 1,910,887 ==================== ==================== ==================== Liabilities and Stockholders' Equity Mortgage notes and contracts payable $ 1,131,128 $ 116,029 (d) $ 1,247,157 Distributions payable 21,926 - 21,926 Accounts payable and accrued expenses 53,439 994 (c) 54,433 -------------------- --------------------- --------------------- Total Liabilities 1,206,493 117,023 1,323,516 Minority interest in Operating Partnership 211,143 6,882 (e) 218,025 Stockholders' equity 364,738 4,608 (e) 369,346 -------------------- --------------------- --------------------- Total Liabilities and Equity $ 1,782,374 $ 128,513 $ 1,910,887 ==================== ===================== =====================
(1) Amounts are from the statements included in the Form 10-Q for the quarter ended March 31, 1997. The accompanying notes are an integral part of the Pro Forma Condensed Consolidated Balance Sheet. For Alphabetical references please refer to Note 2 Pro Forma Adjustments. F-18 22 GENERAL GROWTH PROPERTIES, INC. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET MARCH 31, 1997 (DOLLARS IN THOUSANDS - UNAUDITED) NOTE 1 PRO FORMA BASIS OF PRESENTATION This unaudited condensed consolidated balance sheet is presented as if the acquisitions of the 100% ownership interest in Century Plaza Shopping Center and Southlake Mall and a 50% interest in Town East Mall had all occurred on March 31, 1997. Market Place Mall was acquired on March 31, 1997, and is, therefore, already included in the General Growth Properties, Inc. balance sheet as of March 31, 1997. In managements opinion, all adjustments necessary to reflect these transactions have been included. NOTE 2 PRO FORMA ADJUSTMENTS (a) Investment in Real Estate Asset additions are as follows: Century Plaza $ 31,478 Southlake Mall 67,107 -------- $ 98,585 ======== Allocated to: Land $ 9,864 Buildings and equipment 88,721 -------- $ 98,585 (b) Investment in Town East Mall ======== Acquisition of 50% interest (net of debt assumption) $ 28,659 ======== (c) Working capital assumed by the Company at closing. (d) Mortgage Notes Payable Debt incurred was as follows: Century Plaza $ 31,740 Southlake Mall (including debt assumed) 55,630 Investment in Town East Mall 28,659 -------- $116,029 ======== (e) Minority Interest Operating Partnership Units were issued for a portion of Southlake Mall acquisition cost 11,490 Less adjustment to minority interest for additional stockholders' equity as determined by the relationship of units to common shares at March 31, 1997 4,608 -------- $ 6,882 ======== F-19 EX-23.A 2 CONSENT OF INDEPENDENT ACCOUNTANTS 1 Exhibit 23a CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Registration Statements of General Growth Properties, Inc. on Forms S-3 (File Nos. 33-90556, 333-11067, 333-15907, 333-17021, 333-23035 and 333-32861) and on Forms S-8 (File Nos. 33-79372, 333-07241, 333-11237 and 333-28449) of our report dated February 19, 1997 on our audit of the Statement of Revenues and Certain Expenses of Market Place Shopping Center for the year ended December 31, 1996 which report is included in this Form 8-K/A of General Growth Properties, Inc. dated August 28, 1997. SHEPARD SCHWARTZ & HARRIS LLP August 28, 1997 EX-23.B 3 CONSENT OF INDEPENDENT AUDITORS 1 Exhibit 23b CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statements of General Growth Properties, Inc. on Forms S-3 (File Nos. 33-90556, 333-11067, 333-15907, 333-17021, 333-23035 and 333-32861) and on Forms S-8 (File Nos. 33-79372, 333-07241, 333-11237 and 333-28449) of our report dated March 12, 1997 on our audit of the Statement of Revenues and Certain Expenses of Southlake Mall for the year ended December 31, 1996 which report is included in this Form 8-K/A of General Growth Properties, Inc. dated August 28, 1997. KPMG PEAT MARWICK LLP Atlanta, Georgia August 28, 1997 -----END PRIVACY-ENHANCED MESSAGE-----