<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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:
<TABLE>
<CAPTION>
MARKET PLACE SHOPPING CENTER Page
---------------------------- ----
<S> <C>
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
</TABLE>
F-1
<PAGE> 5
MARKET PLACE SHOPPING CENTER
REPORT ON
STATEMENT OF REVENUES AND
CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1996
F-2
<PAGE> 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
<PAGE> 7
MARKET PLACE SHOPPING CENTER EXHIBIT A
- --------------------------------------------------------------------------------
STATEMENT OF REVENUES AND CERTAIN EXPENSES
Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
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
=============
</TABLE>
The accompanying notes are an integral part of this statement.
F-4
SHEPARD SCHWARTZ & HARRIS LLP
<PAGE> 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
<PAGE> 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:
<TABLE>
Year Amount
------ ------------
<S> <C>
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
============
</TABLE>
F-6
SHEPARD SCHWARTZ & HARRIS LLP
<PAGE> 10
SOUTHLAKE MALL
STATEMENT OF REVENUES AND CERTAIN EXPENSES
DECEMBER 31, 1996
WITH INDEPENDENT ACCOUNTANTS' REPORT THEREON
F-7
<PAGE> 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
<PAGE> 12
SOUTHLAKE MALL
Statement of Revenues and Certain Expenses
Year ended December 31, 1996
<TABLE>
<S> <C>
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
=============
</TABLE>
See accompanying notes to statement of revenues and certain expenses.
F-9
<PAGE> 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.
<TABLE>
<S> <C>
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
===========
</TABLE>
F-10
<PAGE> 14
GENERAL GROWTH PROPERTIES, INC.
Pro Forma Financial Statements
F-11
<PAGE> 15
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS - UNAUDITED)
<TABLE>
<CAPTION>
Historical 1996
General Growth Property Pro Forma
Properties, Inc.(1) Acquisitions Adjustments Pro Forma (1)
--------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
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
==================== ===================== ==================== ====================
<CAPTION>
1997 Acquisitions
-------------------------------------------------------
Other Pro Forma
Market Place SouthLake Properties Adjustments Pro Forma
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
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
===============
</TABLE>
(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
<PAGE> 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
<PAGE> 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
<PAGE> 18
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(DOLLARS IN THOUSANDS - UNAUDITED)
<TABLE>
<CAPTION>
General Growth Market Other Pro Forma
Properties, Inc. (1) Place Southlake Properties Adjustments Pro Forma
------------------ ---------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
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
============
</TABLE>
(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
<PAGE> 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
<PAGE> 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
<PAGE> 21
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(DOLLARS IN THOUSANDS - UNAUDITED)
<TABLE>
<CAPTION>
Historical
General Growth Pro Forma
Properties, Inc.(1) Adjustments Pro Forma
-------------------- -------------------- --------------------
<S> <C> <C> <C>
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
==================== ===================== =====================
</TABLE>
(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
<PAGE> 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
<PAGE> 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
<PAGE> 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
