-----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, AXm+bZ3lqEYFp/Dao2HPmLXLIYnKStGDOjNcQVSuoPCQ+4sXkogOj2mCTBO9OJl0 RRYWN44VIuTcAZVvLcGQcg== 0000899140-01-500007.txt : 20010416 0000899140-01-500007.hdr.sgml : 20010416 ACCESSION NUMBER: 0000899140-01-500007 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20010131 ITEM INFORMATION: FILED AS OF DATE: 20010413 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CBL & ASSOCIATES PROPERTIES INC CENTRAL INDEX KEY: 0000910612 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 621545718 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-12494 FILM NUMBER: 1602400 BUSINESS ADDRESS: STREET 1: ONE PARK PLACE STREET 2: 6148 LEE HWY SUITE 300 CITY: CHATTANOOGA STATE: TN ZIP: 37421 BUSINESS PHONE: 4238550001 MAIL ADDRESS: STREET 1: 61048 LEE HIGHWAY SUITE 300 STREET 2: ONE PARK PLACE CITY: CHATTANOOGA STATE: TN ZIP: 37421 8-K/A 1 cbl877123a.txt AMENDMENT TO CURRENT REPORT ON FORM 8-K Securities and Exchange Commission Washington, D.C. 20549 Form 8-K/A (Amendment No. 1) Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) January 31, 2001 ---------------- CBL & Associates Properties, Inc. --------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-12494 62-1545718 - -------- ------- ---------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) One Park Place, 6148 Lee Highway, Chattanooga, Tennessee 37421 -------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's Telephone Number, including area code: (423) 855-0001 -------------- N/A ------------------------------------------------------------- (Former name or former address, if changed since last report) This Amendment No. 1 on Form 8-K/A is being filed to include the historical and pro forma financial information relating to the acquisition of certain properties by the Registrant from The Richard E. Jacobs Group on January 31, 2001. Item 7 of the Registrant's Current Report on Form 8-K dated January 31, 2001 relating to the acquisition is hereby amended to include the following: Item 7. Financial Statements and Exhibits. - ------------------------------------------ (a) Financial statement of the businesses acquired: see Exhibit 99.10. (b) Pro forma financial information: see Exhibit 99.11. (c) Exhibits: 3(i) Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference from Exhibit 99.4 of the Registrant's initial filing of its Form 8-K dated January 31, 2001). 23 Consent of Independent Accountant. 99.10 Financial Statement of The Richard E. Jacobs Group Combined Properties. 99.11 Unaudited Pro Forma Consolidated Financial Data. -2- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CBL & ASSOCIATES PROPERTIES, INC. By: /s/ John N. Foy ------------------------------ John N. Foy Vice Chairman, Chief Financial Officer and Treasurer Dated: April 13, 2001 -3- Exhibit Index ------------- Exhibit No. Description - ----------- ----------- 3(i) Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference from Exhibit 99.4 of the Registrant's initial filing of its Form 8-K dated January 31, 2001). 23 Independent Auditors' Consent. 99.10 Financial Statement of The Richard E. Jacobs Group Combined Properties. 99.11 Unaudited Pro Forma Consolidated Financial Data. EX-23 2 cbl877123b.txt INDEPENDENT AUDITORS' CONSENT EXHIBIT 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in the Registration Statement (Form S-3 No. 333-47041) of CBL & Associates Properties, Inc. and the Registration Statement (Form S-8 No. 33-73376) pertaining to the CBL & Associates Properties, Inc. 1993 Stock Incentive Plan of our report dated August 31, 2000 with respect to the Combined Statement of Certain Revenues and Certain Expenses of The Combined Properties of The Richard E. Jacobs Group for the year ended December 31, 1999 included in this current report on Form 8-K/A. /s/ DELOITTE & TOUCHE LLP Deloitte & Touche LLP Cleveland, Ohio April 12, 2001 EX-99.10 3 cbl877123c.txt FINANCIAL STATEMENT EXHIBIT 99.10 FINANCIAL STATEMENT OF THE RICHARD E. JACOBS GROUP COMBINED PROPERTIES. INDEX TO FINANCIAL STATEMENT OF THE RICHARD E. JACOBS GROUP COMBINED PROPERTIES Page ---- Independent Auditors' Report................................................ 2 Combined Statement of Certain Revenues and Certain Expenses for the Nine Months Ended September 30, 2000 (unaudited) and the Year Ended December 31, 1999......................................................... 3 Notes to Combined Statement of Certain Revenues and Certain Expenses........ 4 1 INDEPENDENT AUDITORS' REPORT To the Owners of The Richard E. Jacobs Group Combined Properties Cleveland, Ohio We have audited the accompanying combined statement of certain revenues and certain expenses of the Combined Properties (owned by The Richard E. Jacobs Group and listed in Note 1 to the combined statement) for the year ended December 31, 1999. These properties are under common ownership. This combined statement is the responsibility of The Richard E. Jacobs Group's management. Our responsibility is to express an opinion on the combined statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the combined statement. We believe that our audit provides a reasonable basis for our opinion. The accompanying combined statement of certain revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the filing of Form 8-K of CBL & Associates Properties, Inc. as a result of the acquisition of the Combined Properties). Material amounts, described in Note 1 to the combined statement of certain revenues and certain expenses, that would not be directly attributable to those resulting from future operations of the acquired properties are excluded, and the combined statement is not intended to be a complete presentation of the acquired properties' revenues and expenses. In our opinion, such combined statement presents fairly, in all material respects, the combined certain revenues and certain expenses described in Note 1 to the combined statement of certain revenues and certain expenses for the year ended December 31, 1999 in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Cleveland, Ohio August 31, 2000 2 THE COMBINED PROPERTIES OF THE RICHARD E. JACOBS GROUP COMBINED STATEMENT OF CERTAIN REVENUES AND CERTAIN EXPENSES NINE MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1999 (Dollars in Thousands) - --------------------------------------------------------------------------------
Nine Months Ended September 30, 2000 Year Ended (unaudited) December 31, 1999 ------------------ ----------------- CERTAIN REVENUES: Minimum rents $100,975 $132,955 Tenant recoveries 43,793 59,025 Percentage rents 4,025 9,684 Other rents 1,440 1,794 Other income 1,030 1,006 -------- -------- Total certain revenues 151,263 204,464 -------- -------- CERTAIN EXPENSES: Property operating expenses (Notes 3 and 5) 24,342 31,996 Maintenance and repairs 12,746 17,326 Real estate taxes 12,558 16,630 -------- -------- Total certain expenses 49,646 65,952 -------- -------- CERTAIN REVENUES IN EXCESS OF CERTAIN EXPENSES $101,617 $138,512 ======== ======== See notes to combined statement of certain revenues and certain expenses.
3 THE COMBINED PROPERTIES OF THE RICHARD E. JACOBS GROUP NOTES TO COMBINED STATEMENT OF CERTAIN REVENUES AND CERTAIN EXPENSES NINE MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1999 (Dollars in Thousands) - -------------------------------------------------------------------------------- 1. ORGANIZATION AND BASIS OF PRESENTATION Organization - The Richard E. Jacobs Group ("The Jacobs Group") is divesting its interest in 21 enclosed regional malls (and two associated centers) in a sale to CBL & Associates Properties, Inc. ("CBL"), a self-managed, self-administered, fully-integrated real estate investment trust company. Basis of Presentation - The accompanying combined statement of certain revenues and certain expenses includes information related to the operations of the 21 malls (and two associated centers) which are the subject of the CBL purchase for the nine months ended September 30, 2000 (unaudited) and the year ended December 31, 1999. The accompanying combined statement of certain revenues and certain expenses was prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission. Accordingly, the combined statement is not representative of the actual operations for the periods presented as certain revenues and expenses, which may not be directly attributable to the revenues and expenses expected to be incurred in the future operations of the acquired properties, have been excluded. Revenues excluded consist of interest income and realized gains and losses on marketable securities. Expenses excluded consist of management, leasing, interest, income taxes, depreciation and amortization and other costs not directly attributable to the future operations of the acquired properties. The properties included in the combined statement and The Jacobs Group's ownership interest in each entity are as follows:
The Jacobs Group's % Entity Property Ownership - ------ -------- -------------------- Brookfield Square Joint Venture Brookfield Square Mall 100.00% Cary Venture Limited Partnership Cary Towne Center 80.00 C.V. Investments CherryVale Mall 100.00 Charleston Joint Venture Citadel Mall 100.00 Columbia Joint Venture Columbia Mall 79.00 Eastgate Company Eastgate Mall and Crossings (a) 53.85 Madison Joint Venture East Towne Mall 65.00 West Towne Mall and Crossing (a) 65.00 JG Saginaw LLC Fashion Square Mall 100.00 Lexington Joint Venture Fayette Mall 100.00 JG Winston-Salem LLC Hanes Mall 100.00 Jefferson Mall Company Jefferson Mall 87.25 Kentucky Oaks Mall Company Kentucky Oaks Mall 40.00 Midland Venture Limited Partnership Midland Mall 40.00 North Charleston Joint Venture Northwoods Mall 100.00 Old Hickory Mall Venture Old Hickory Mall 100.00 4 The Jacobs Group's % Entity Property Ownership - ------ -------- -------------------- Parkdale Mall Associates Parkdale Mall 100.00 JG Randolph LLC Randolph Mall 100.00 Racine Joint Venture Regency Mall 100.00 Towne Mall Towne Mall 100.00 Wausau Joint Venture Wausau Center 100.00
(a) Includes associated centers. After giving effect to The Jacobs Group's ownership interest in the combined properties, The Jacobs Group's share of Certain Revenues in Excess of Certain Expenses is $87,096 for the nine months ended September 30, 2000 (unaudited) and $118,259 for the year ended December 31, 1999. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition - Minimum rents are recognized on a straight line basis over the terms of the related leases. Percentage rents, which are based upon the level of sales achieved by the lessee, are recognized when the contractual sales levels are achieved. Recoveries from tenants for common area maintenance, real estate taxes, insurance and other shopping center operating expenses are recognized as revenues in the period the applicable costs are incurred. Property Operating Expenses - Property operating expenses consist primarily of common area maintenance, utilities, insurance, advertising and promotion and other operating expenses. Concentration of Credit Risk - The combined properties' tenant base includes primarily national and regional retail chains and local retailers and, consequently, the combined properties' credit risk is concentrated in the retail industry. Use of Estimates - The preparation of the combined statement of certain revenues and certain expenses requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Interim Period - The unaudited combined statement of certain revenues and certain expenses for the nine months ended September 30, 2000 has been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and all of such adjustments were of a normal recurring nature. Operating results for the period from January 1, 2000 to September 30, 2000 are not necessarily indicative of future Operating results. 3. TRANSACTIONS WITH AFFILIATES Affiliated entities of The Jacobs Group provide accounting, legal, architectural, engineering, tenant coordination and lease administration services to 20 of the 21 combined properties as well as to the two associated centers. Most services are based upon an hourly rate for the actual hours of work performed by employees of the affiliates. Fees included in the combined statement related to agreements with affiliates were $1,634 for the nine months ended September 30, 2000 (unaudited) and $3,031 for the year ended December 31, 1999. 5 4. RENTAL INCOME UNDER OPERATING LEASES As of December 31, 1999, future minimum rental income due on noncancelable operating leases that expire at various dates through 2029 was as follows: 2000......................... $112,011 2001......................... 101,627 2002......................... 89,636 2003......................... 78,774 2004......................... 63,523 2005 and thereafter.......... 234,013 --------- $679,584 ========= In addition, substantially all of the retail leases include provisions for percentage rent based on sales volume and reimbursements for certain real estate taxes and operating costs. 5. GROUND LEASE COMMITMENTS Certain of the combined properties lease land under noncancelable leases which expire at various dates through 2022, with options to renew for additional periods. The leases are accounted for as operating leases. Each of these leases requires a base rent and one provides for additional rent based on a percentage of cash flow. For the nine months ended September 30, 2000 (unaudited), the base rent and additional ground rent were $75 and $111, respectively. For the year ended December 31, 1999, the base rent and additional ground rent were $103 and $127, respectively. The following is a schedule of future minimum rental payments under noncancelable operating leases as of December 31, 1999: 2000.......................... $ 101 2001.......................... 100 2002.......................... 100 2003.......................... 100 2004.......................... 100 2005 and thereafter........... 1,442 ------- $1,943 ======= 6 EX-99.11 4 cbl877123d.txt UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA EXHIBIT 99.11 PRO FORMA CONSOLIDATED FINANCIAL DATA Pro forma consolidated statement of operations for the nine months ended September 30, 2000 (unaudited) 3 Pro forma consolidated statement of operations for the year ended December 31, 1999 (unaudited) 5 Pro forma consolidated balance sheet as of September 30, 2000 (unaudited) 7 1 UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA The following unaudited pro forma consolidated financial statements are based on the historical consolidated financial statements of CBL & Associates Properties, Inc. (the "Company") and the properties, consolidated and adjusted to give effect to the acquisition and the transactions contemplated thereby (including any related financing), as described in the notes thereto. Certain amounts in the financial statements of the properties have been reclassified to conform to the Company's presentation. These statement should be read in conjunction with (1) the audited historical financial statements and notes thereto of the Company for the year ended December 31, 1999, which are incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1999, (2) the unaudited historical financial statements and notes thereto of the Company for the period ended September 30, 2000, which are incorporated by reference from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, and (3) the historical financial statement of the properties included elsewhere in this Form 8-K/A. The unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2000 and for the year ended December 31, 1999 present the results for our Company and the properties as if the acquisition had occurred at the beginning of the earliest period presented. The accompanying unaudited pro forma consolidated balance sheet as of September 30, 2000 gives effect to the acquisition as of that date. The pro forma financial statements assume that the closing of all interests in the properties occured at such time, rather than over a period of time as contemplated for certain properties. See "The Master Contribution Agreement -- Structure of the Acquisition - Multiple Contributions." The pro forma statements include interests purchased from non-Jacobs partners in the following properties:
Interests Purchased from Non- All Jacobs Interests Entity Property Partners Purchased - ------ -------- --------- --------- Eastgate Company Eastgate Mall and Crossings 46.15% 100.00% Jefferson Mall Company Jefferson Mall 12.75 100.00 Kentucky Oaks Mall Company Kentucky Oaks Mall 10.00 50.00 Midland Venture Limited Partnership Midland Mall 60.00 100.00
The pro forma adjustments are based upon preliminary estimates, information currently available and certain assumptions that management believes are reasonable under the circumstances. The Company's actual consolidated financial statements will reflect the effects of the acquisition on and after the applicable closing date rather than the dates indicated above. The unaudited pro forma consolidated financial statements neither purport to represent what the consolidated results of operations or financial condition actually would have been had the acquisition and related transactions in fact occurred on the assumed date, nor do they purport to project the consolidated results of operations and financial position for any future period. The acquisition will be accounted for by the purchase method and, therefore, assets and liabilities of the properties will be recorded based on their estimated fair values. Allocations included in the pro forma statements are based on analysis which is not yet completed. 2 CBL & ASSOCIATES PROPERTIES, INC. For The Nine Months Ended September 30, 2000 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share amounts)
CBL Jacobs Pro Forma Pro Forma Historical Properties Adjustments (a) Adjustments (b) Consolidated ---------- ---------- --------------- --------------- ------------ Revenues: Minimum rents $167,806 $100,975 $(16,983) $ -- $251,798 Percentage rents 7,458 4,025 (503) -- 10,980 Other rents 2,668 1,440 (48) -- 4,060 Tenant reimbursements 78,757 43,793 (6,905) -- 115,645 Management development and leasing fees 3,135 -- -- 260 (c) 3,395 Interest and other 3,663 1,030 (342) -- 4,351 -------- -------- --------- --------- -------- Total revenues 263,487 151,263 (24,781) 260 390,229 -------- -------- --------- --------- -------- Expenses: Property operating 41,698 24,342 (3,019) -- 63,021 Depreciation and amortization 45,002 -- -- 17,042 (d) 62,044 Real estate taxes 22,501 12,558 (3,213) -- 31,846 Maintenance and repairs 14,703 12,746 (1,469) -- 25,980 General and administrative 13,120 -- -- -- 13,120 Interest 70,562 -- -- 53,805 (e) 124,367 Other 62 -- -- -- 62 -------- -------- --------- --------- -------- Total expenses 207,648 49,646 (7,701) 70,847 320,440 -------- -------- --------- --------- -------- Income from operations 55,839 101,617 (17,080) (70,587) 69,789 Gain on sales of real estate assets 13,275 -- -- -- 13,275 Equity in earnings of unconsolidated affiliates 2,585 -- 10,337 (6,934)(f) 5,988 Minority interest in earnings: Operating partnership (21,346) -- -- (19,975)(g) (41,321) Shopping center properties (1,022) -- (2,187) 2,165 (h) (1,044) -------- -------- --------- --------- -------- Net Income before extraordinary item 49,331 101,617 (8,930) (95,331) 46,687 Preferred dividends (4,851) -- -- -- (4,851) -------- -------- --------- --------- -------- Net income before extraordinary item available to common shareholders $44,480 $101,617 $(8,930) $(95,331) $41,836 ======== ======== ========= ========= ======== Basic per share data: Net income $ 1.79 $ 1.68 ======== ======== Weighted average common shares outstanding: 24,845 24,845 Diluted per share data: Net income $ 1.78 $ 1.67 ======== ======== Weighted average common shares and potential dilutive common shares outstanding 24,983 24,983 (a) Reflects adjustments to record Jacobs' investments in certain joint ventures under the equity method of accounting. These joint ventures include East Towne Mall, Kentucky Oaks Mall and West Towne Mall. The proportionate results of these properties are recorded in equity in earnings of unconsolidated affiliates. Minority interest in earnings consists of the non-acquired partners' interests in Cary Mall and Columbia Mall. 3 (b) The pro forma information does not include any incremental general and administrative costs to be incurred in connection with the acquisition of the Jacobs properties. (c) Represents management fees earned from properties accounted for under the equity method of accounting. (d) Represents depreciation expense on acquired assets over 40 years. (e) Represents actual interest expense on $726.1 million of assumed debt, amortization of credit fees and interest expense on the $120 million acquisition loan for the nine months ended September 30, 2000. The average interest rate for the period is assumed to be 7.8%. This balance sheet debt of $726.1 million, plus the share of debt accounted for under the equity method of accounting of $66.0 million, less the share of debt of non-acquired partners of $20.8 million, equals the $771.3 million of debt assumed as part of the transaction. (f) Represents adjustments to properties accounted for under the equity method of accounting for depreciation of $2,262 management fees of $531 and interest expense of $4,141 on Jacobs' share of debt of $66.0 million. (g) Represents pro forma minority interest in earnings of the Operating Partnership as if the SCUs were issued on January 1, 2000. (h) Represents minority interest in pro forma adjustments for depreciation of $419, management fees of $156 and interest expense of $1,590.
4 CBL & ASSOCIATES PROPERTIES, INC. For The Year Ended December 31, 1999 PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share amounts)
CBL Jacobs Pro Forma Pro Forma Historical Properties Adjustments (a) Adjustments (b) Consolidated ---------- ---------- --------------- --------------- ------------ Revenues: Minimum rents $203,022 $132,955 $ (23,078) $ -- $312,899 Percentage rents 7,356 9,684 (1,220) -- 15,820 Other rents 5,442 1,794 (237) -- 6,999 Tenant reimbursements 89,774 59,025 (9,461) -- 139,338 Management development and leasing fees 7,818 -- -- 851 (c) 8,669 Interest and other 4,191 1,006 (264) -- 4,933 -------- -------- --------- -------- -------- Total revenues 317,603 204,464 (34,260) 851 488,658 -------- -------- --------- -------- -------- Expenses: Property operating 50,832 31,996 (3,244) -- 79,584 Depreciation and amortization 53,551 -- -- 22,723 (d) 76,274 Real estate taxes 27,580 16,630 (4,139) -- 40,071 Maintenance and repairs 17,783 17,326 (1,687) -- 33,422 General and administrative 16,214 -- -- -- 16,214 Interest 82,505 -- -- 69,857 (e) 152,362 Other 1,674 -- -- -- 1,674 -------- -------- --------- -------- -------- Total expenses 250,139 65,952 (9,070) 92,580 399,601 -------- -------- --------- -------- -------- Income from operations 67,464 138,512 (25,190) (91,729) 89,057 Gain on sale of real estate assets 8,357 -- -- -- 8,357 Equity in earnings of unconsolidated affiliates 3,263 -- 14,905 (9,315)(f) 8,853 Minority interest in earnings: Operating partnership (23,264) -- -- (25,588)(g) (48,852) Shopping center properties (1,225) -- (2,947) 2,759 (h) (1,413) -------- -------- --------- -------- -------- Net income 54,595 138,512 (13,232) (123,873) 56,002 Preferred dividends (6,468) -- -- -- (6,468) -------- -------- --------- -------- -------- Net income available to common shareholders $ 48,127 $138,512 ($13,232) ($123,873) $ 49,534 ======== ======== ========= ======== ======== Basic per share data: Net income $ 1.95 $ 2.01 ========= ======== Weighted average common shares 24,647 24,647 outstanding: Diluted per share data: Net income $ 1.94 $ 1.99 ======== ======== Weighted average common shares and potential dilutive common shares outstanding 24,834 24,834 (a) Reflects adjustments to record Jacobs' investments in certain joint ventures under the equity method of accounting. These joint ventures include East Towne Mall, Kentucky Oaks Mall and West Towne Mall. The proportionate results of these properties is recorded in equity in earnings of unconsolidated affiliates. Minority interest in earnings consists of the non-acquired partners' interests in Cary Mall and Columbia Mall. 5 (b) The pro forma information does not include any incremental general and administrative costs to be incurred in connection with the acquisition of the Jacobs properties. (c) Represents management fees earned from properties accounted for under the equity method of accounting. (d) Represents depreciation expense on acquired assets over 40 years. (e) Represents actual interest expense on $726.1 million of assumed debt, amortization of credit fees and interest expense on the $120 million acquisition loan for the year ended December 31, 1999. The average interest rate for the period is assumed to be 6.9%. This balance sheet debt of $726.1 million, plus the share of debt accounted for under the equity method of accounting of $66.0 million, less the share of debt of non-acquired partners of $20.8 million, equals the $771.3 million of debt being assumed as part of the transaction. (f) Represents adjustments to properties accounted for under the equity method of accounting for depreciation of $3,013 management fees of $708 and interest expense of $5,595 on Jacobs' share of debt of $66.0 million. (g) Represents pro forma minority interest in earnings of the Operating Partnership as if the SCUs were issued on January 1, 1999. (h) Represents minority interest in pro forma adjustments for depreciation of $558, management fees of $200 and interest expense of $2,001.
6 CBL & ASSOCIATES PROPERTIES, INC. As of September 30, 2000 PROFORMA CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts)
Pro Forma CBL Acquisition Pro Forma Historical Adjustments (a) Consolidated ---------- --------------- ------------ ASSETS REAL ESTATE ASSETS: Land $ 284,764 $ 215,653 $ 500,417 Building and improvements 1,857,567 908,927 2,766,494 ---------- ---------- ---------- 2,142,331 1,124,580 3,266,911 Less: Accumulated depreciation (259,467) -- (259,467) ---------- ---------- ---------- 1,882,864 1,124,580 3,007,444 Developments in progress 129,982 -- 129,982 ---------- ---------- ---------- Net investment in real estate assets 2,012,846 1,124,580 3,137,426 CASH AND CASH EQUIVALENTS 5,544 -- 5,544 CASH IN ESCROW 9,751 2,697 12,448 RECEIVABLES: Tenant net of allowance for doubtful accounts of $1,854 27,904 -- 27,904 Other 3,296 -- 3,296 INVESTMENT IN UNCONSOLIDATED AFFILIATES (3,586) 71,128 67,542 MORTGAGE NOTES RECEIVABLE 8,694 6,913 15,607 OTHER ASSETS 18,537 4,390 22,927 ---------- ---------- ---------- $2,082,986 $1,209,708 $3,292,694 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY MORTGAGE NOTES PAYABLE $1,399,326 $ 846,098 $2,245,424 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 59,245 13,465 72,710 ---------- ---------- ---------- Total liabilities 1,458,571 859,563 2,318,134 ---------- ---------- ---------- COMMITMENTS AND CONTINGENCIES MINORITY INTEREST 180,326 427,700 608,026 ---------- ---------- ---------- SHAREHOLDERS' EQUITY: Preferred stock, $.01 par value, 5,000,000 Shares authorized, 2,875,000 shares issued and outstanding 29 -- 29 Common stock, $.01 par value. 95,000,000 shares authorized, 25,012,707 shares issued and outstanding 250 -- 250 Additional paid-in capital 461,205 (77,555) 383,650 Accumulated deficit (17,395) -- (17,395) ---------- ---------- ---------- Total shareholders' equity 444,089 (77,555) 366,534 ---------- ---------- ---------- $2,082,986 $1,209,708 $3,292,694 ========== ========== ========== (a) Represents the acquisition of the properties and allocation of the consideration to assets acquired and liabilities assumed.
7 -----END PRIVACY-ENHANCED MESSAGE-----