<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 3
TO
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) DECEMBER 6, 1996
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 combined financial statement of Lansing Mall, Westwood Mall and
Lakeview Square Mall and the financial statement for Park 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: January 15, 1998
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:
LANSING MALL, WESTWOOD MALL AND LAKEVIEW SQUARE MALL Page
---------------------------------------------------- ----
Report of Independent Accountants F-3
Combined Statement of Revenues and Certain Expenses for
the Year Ended December 31, 1995 F-4
Notes to Combined Statement of Revenues and Certain
Expenses for the Year Ended December 31, 1995 F-5
PARK MALL
----------
Independent Auditor's Report F-7
Statement of Revenues and Certain Expenses for
the Year Ended December 31, 1995 F-8
Notes to Statement of Revenues and Certain Expenses
for the Year Ended December 31, 1995 F-9
GENERAL GROWTH PROPERTIES, INC.
-------------------------------
Pro Forma Condensed Consolidated Statement of
Operations for the Year Ended December 31, 1995 (Unaudited) F-14
Pro Forma Condensed Consolidated Statement of
Operations for the Nine Months Ended September 30, 1996 (Unaudited) F-17
Pro Forma Condensed Consolidated Balance Sheet
as of September 30, 1996 (Unaudited) F-20
F-1
<PAGE> 5
LANSING MALL, WESTWOOD MALL
AND LAKEVIEW SQUARE MALL
REPORT ON AUDIT OF THE COMBINED STATEMENT
OF REVENUES AND CERTAIN EXPENSES FOR
THE YEAR ENDED DECEMBER 31, 1995
F-2
<PAGE> 6
COOPERS
& LYBRAND L.L.P.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
General Growth Properties, Inc.
We have audited the accompanying combined statement of revenues and certain
expenses of the Lansing Mall, the Westwood Mall and the Lakeview Mall for the
year ended December 31, 1995. This financial statement is the responsibility
of the management of the properties. Our responsibility is to express an
opinion on this combined 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 combined 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 combined 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 combined
statement of revenue and certain expenses. We believe that our audit provides
a reasonable basis for our opinion.
The accompanying combined 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 certain expenses of the Lansing Mall, the Westwood Mall and the
Lakeview Square Mall.
In our opinion, the combined statement of revenues and certain expenses for the
year ended December 31, 1995 presents fairly, in all material respects, the
revenues and certain expenses of the Lansing Mall, the Westwood Mall and the
Lakeview Square Mall for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Detroit, Michigan
January 10, 1997
F-3
<PAGE> 7
LANSING MALL, WESTWOOD MALL AND LAKEVIEW SQUARE MALL
COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION> YEAR ENDED
DECEMBER 31,
1995
------------
<S> <C> <C>
Revenues:
Rental income, including percentage rentals $13,304,337
Tenants common area, property taxes, and insurance recovery 5,321,203
Interest income 203,529
Other income, principally sale of electric power 669,162
----------
19,498,231
-----------
Expenses:
Building and common area 3,190,433
Real estate taxes 1,108,188
Management fee 1,207,308
General and administrative 651,482
----------
6,157,411
----------
Revenues in excess of certain expenses $13,340,820
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE> 8
LANSING MALL, WESTWOOD MALL AND LAKEVIEW SQUARE MALL
NOTES TO COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES
1. BUSINESS:
The combined statement of revenues and certain expenses includes the
operations of the Lansing Mall, the Westwood Mall and the Lakeview Square
Mall (the "Malls"). The Malls, which are located throughout Michigan, were
transferred to General Growth Properties, Inc. (the "Company") on December
6, 1996, effective November 1, 1996.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
a. BASIS OF PRESENTATION: The accounts of each property are
combined in the statement of revenues and certain expenses. 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 properties.
b. REVENUE RECOGNITION: The Company recognizes rental revenue at
the time that the rental payments are received. The amount of rental
revenue recognized under this method approximates the amount of rental
revenue that would be recognized on a straight line basis over the
life of the lease.
c. ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles 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 Lansing Mall, Westwood Mall
and Lakeview Square Mall that have initial or remaining noncancelable lease
terms in excess of one year, as of December 31, 1995.
<TABLE>
<S> <C>
1996 $12,032,172
1997 10,996,418
1998 9,911,782
1999 8,925,750
2000 and beyond 38,545,303
----------
$80,411,425
==========
</TABLE>
F-5
<PAGE> 9
PARK MALL
A PROJECT OF K-GAM LIMITED PARTNERSHIP,
FORMERLY THE KIVEL REVOCABLE TRUST
AUDITED STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
--------------
F-6
<PAGE> 10
ADDISON, ROBERTS & LUDWIG, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
General Growth Properties, Inc.
We have audited the statement of revenues and certain expenses of Park Mall, a
Project of K-GAM Limited Partnership, formerly the Kivel Revocable Trust for
the year ended December 31, 1995. These financial statements are the
responsibility of Park Mall's management. Our responsibility is to express an
opinion on these financial statements 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 was prepared for the purpose of complying with the
rules and regulations of the Securities and Exchange Commission for inclusion
in the Form 8-K/A of General Growth Properties, Inc. and is not intended to be
a complete presentation of Park Mall's revenues and expenses.
In our opinion, the financial statement referred to above present fairly, in
all material respects, the revenues and certain expenses of Park Mall for the
year ended December 31, 1995 in conformity with generally accepted accounting
principles.
ADDISON, ROBERTS & LUDWIG, P.C.
Tucson, Arizona
July 19, 1996
F-7
<PAGE> 11
PARK MALL
A PROJECT OF K-GAM LIMITED PARTNERSHIP,
FORMERLY THE KIVEL REVOCABLE TRUST
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
____________
<TABLE>
<S> <C>
Revenues $7,531,145
Certain Expenses:
Payroll and related costs 745,606
Property taxes 673,562
Utilities and telephone 248,397
Security 196,868
Maintenance and repairs 152,183
Property insurance 149,955
Advertising and promotion 126,771
Supplies 96,947
Other expenses 22,947
---------
Total certain expenses 2,413,236
Revenues in excess of certain expenses ---------
$5,117,909
=========
</TABLE>
The accompanying notes are an integral part of the financial statement.
F-8
<PAGE> 12
PARK MALL
A PROJECT OF K-GAM LIMITED PARTNERSHIP,
FORMERLY THE KIVEL REVOCABLE TRUST
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
___________
1. Basis of Presentation and Summary of Significant Accounting Policies
Park Mall
Park Mall (a project of K-GAM Limited Partnership, formerly the Kivel
Revocable Trust) ("the Project") is an air conditioned single level retail
shopping mall located in Tucson, Arizona. The one million plus square foot
facility was built in 1974. In addition to the three major department
stores (Dillard's, Macy's and Sears), the mall has nearly one hundred retail
or service shops. Macy's and Sears each own their pad, parking lot and
building which represents 420,000 square feet. Dillard's and the mall shops
represent 439,000 square feet of gross leasable area.
The property also includes an adjacent 12 acre parcel of land located east
of the mall which is available for future development.
Ownership
The Project was owned by the Kivel Revocable Trust with Joseph and Esther
Kivel as grantors for all periods until Mr. Kivel's death in 1995. In
August of 1995 the property was transferred to the K-GAM Limited
Partnership. The partnership's General Partner is K-GAM Management LLC
whose members are the Lee A. Kivel Trust of Trust B of the Kivel Revocable
Trust and the Foster D. Kivel Trust of Trust B of the Kivel Revocable Trust.
The trustees are Lee A. Kivel, Foster D. Kivel and Frederick P. Dooley.
Basis of Presentation
The statement is not representative of the actual operations of Park Mall
for the year presented. Certain expenses, primarily depreciation and
amortization expense, interest expense, management fees and certain
corporate expenses which have been excluded.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. Actual results could differ from those estimates.
F-9
<PAGE> 13
PARK MALL
A PROJECT OF K-GAM LIMITED PARTNERSHIP,
FORMERLY THE KIVEL REVOCABLE TRUST
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
_________
Revenue Recognition
Rent income is recognized when earned in accordance with tenant leases.
Rent concessions are not material. Percentage rental income and a portion
of property tax income are collected in the year following the year when it
is earned. Accrued rental income represents earned, unbilled percentage
rent revenue, and property tax revenue.
Advertising Costs
The cost of advertising, primarily paid to the Park Mall Merchants
Association, is expensed when incurred or when the first advertising takes
place. Park Mall does not participate in direct-response advertising which
requires the capitalization and amortization of related costs.
Income Taxes
Park Mall taxable income is taxed at the individual or trust level. No
provision for income taxes is included in the accompanying financial
statements.
F-10
<PAGE> 14
PARK MALL
A PROJECT OF K-GAM LIMITED PARTNERSHIP,
FORMERLY THE KIVEL REVOCABLE TRUST
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
__________
2. Tenant Leases
Shopping center space is leased to tenants pursuant to noncancelable
operating lease agreements. Tenant leases typically provide for guaranteed
minimum rent, percentage rent and other charges to cover certain operating
costs.
Following is a summary of future minimum tenant lease payments receivable
under noncancelable leases in excess of one year at December 31, 1995. The
summary excludes contingent rentals and amounts reimbursable by tenants for
property taxes, insurance and maintenance. Annual percentage rentals are
approximately $450,000. Lease terms range from month to month to 30 years.
<TABLE>
<CAPTION>
<S> <C>
1996 $4,534,587
1997 3,706,048
1998 3,055,178
1999 2,713,151
2000 2,178,708
Thereafter 6,856,014
----------
$23,043,686
</TABLE> ==========
3. Related Party Transactions
Park Mall is one of several projects or investments who share common
ownership. Receipts from all commonly owned properties are deposited to a
single cash account. Reports for payroll and rental taxes are filed on a
combined basis. Expenses are allocated based on actual payroll burden and
rental tax liability. Insurance premiums paid through the Park Mall
operating account are allocated based on property location to other projects
or investments. Expenses allocable to other projects or investments, which
were paid from the Park Mall operating account are reported as owner
distributions. These expenses include, but are not limited to, professional
fees and owner compensation.
Park Mall leases retail space to CALO Jewelers, Republic Food (Hungry Hut,
Mr. Pretzel/Star Port) and Sportsworld. These entities are owned by Kivel
family members.
Net rental revenue earned from these entities for the year ended December
31, 1995 is as follows:
<TABLE>
<S> <C>
1995
---------
Calo Jewelers $ 55,100
Hungry Hut 40,800
Mr. Pretzel/Star Port 31,800
Sportsworld 96,752
-------
$224,452
</TABLE> =======
F-11
<PAGE> 15
PARK MALL
A PROJECT OF K-GAM LIMITED PARTNERSHIP,
FORMERLY THE KIVEL REVOCABLE TRUST
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
___________
4. Commitments
The Project is committed to several operating leases for office and
maintenance equipment and vehicles. Rent expense for the year ended
December 3, 1995 was $9,334. Approximate future minimum lease payments of
all non-cancelable operating leases for the next five years follows:
<TABLE>
<S> <C>
1996 $15,232
1997 15,500
1998 7,432
1999 762
2000 0
------
$38,926
</TABLE> ======
F-12
<PAGE> 16
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA FINANCIAL STATEMENTS
F-13
<PAGE> 17
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(In thousands, except share amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
Historical Lakeview,
General Growth Lansing and Other
Properties, Inc.(1) Natick(2) Westwood Park Mall Properties Adjustments Pro Forma
---------------- ---------- ---------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Total Revenues $ 167,396 $ 28,963 $ 19,498 $ 7,531 $ 4,642 $ - $ 228,030
Expenses:
Property operating 61,505 5,686 4,950 2,413 1,634 - 76,188
Management fees 2,463 972 1,207 - - (434)(a) 4,208
Depreciation and amortization 30,855 - - - - 9,568 (b) 40,423
------------- ---------- ---------- ---------- ----------- --------- ----------
Total Expenses 94,823 6,658 6,157 2,413 1,634 9,134 120,819
------------- ---------- ---------- ---------- ----------- --------- ----------
Operating Income 72,573 22,305 13,341 5,118 3,008 (9,134) 107,211
Interest expense, net (46,334) - - - - (27,834)(c) (74,168)
Equity in unconsolidated affiliates:
CenterMark Properties, Inc. 8,628 - - - - (605)(d) 8,023
GGP/Homart, Inc. 646 - - - - 8,429 (2) 9,075
Quail Springs - - - - 927 - 927
------------ ---------- ---------- ---------- ----------- --------- ----------
Interest before minority interest 35,513 22,305 13,341 5,118 3,935 (29,144) 51,068
Minority interest in Operating
Partnership - - - - - (19,202)(e) (19,202)
------------- ---------- ---------- ---------- ----------- ----------- ----------
Net Income $ 35,513 $ 22,305 $ 13,341 $ 5,118 $ 3,935 $(48,346) $ 31,866
============= ========== ========== ========== =========== =========== ==========
Pro Forma Net Income per share(3) $ 1.09
==========
</TABLE>
Notes
(1)The historical operations reflect the operations for the year ended December
31, 1995 as reported by General Growth Properties, Inc. in its 1995 Form
10-K. The non-recurring gain on the sale of a portion of the investment in
CenterMark of $33,397 is not included in the above information.
(2)The historical amount reflects pre-acquisition amounts from January 1, 1995
through December 21, 1995 as reported by General Growth Properties, Inc. in
its Form 8-K/A filed March 5, 1996.
(3)Pro forma net income per share is based on the pro forma weighted average
common and common equivalent shares outstanding for 1995 of 29,168,488 and
excludes the effect of the non-recurring gain referred to in note (1).
The accompanying notes are an integral part of the Pro Forma
Consolidated Statement of Operations.
For Alphabetical references please refer to Note 3 Pro Forma
Adjustments.
F-14
<PAGE> 18
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(DOLLARS IN THOUSANDS - UNAUDITED)
NOTE 1 PRO FORMA BASIS OF PRESENTATION
This unaudited condensed consolidated statement of operations is presented as if
the follow-on stock offering of 4,500,000 common shares which occurred on May
23, 1995, the acquisition of 100% of Natick Mall and 38.2% of the common stock
of GGP/Homart, Inc. which occurred December 22, 1995, the sale of 25% and 35% of
the 40% interest in CenterMark Properties, Inc. which occurred on December 19,
1995, and July 1, 1996 respectively, and the acquisition of 100% of Lakeview
Square Mall, Lansing Mall, and Westwood Mall 100% of Park Mall, 100% of Sooner
Mall and 50% of Quail Springs Mall, which occurred in the fourth quarter of 1996
had all occurred on January 1, 1995. 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. 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, 1995 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).
F-15
<PAGE> 19
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(DOLLARS IN THOUSANDS - UNAUDITED)
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 entire year of 1995 for the acquisitions made in the fourth quarter of
1996.
(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 $277.2 million of mortgage debt bearing
interest at the weighted average rate of 7.25%. The Company also borrowed
approximately $301.7 million to fund the cash portion of the acquisitions.
Company indebtedness was reduced by $159.5 million with the proceeds from the
sale of CenterMark Properties. The follow-on offering in May of 1995 further
reduced debt by $87.9 million. 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 7.75%.
(d) EQUITY IN CENTERMARK
The adjustment of $0.6 million included in the 1995 pro forma statement of
operations reflects the reduction in ownership offset by the change from
the equity method of accounting to the cost method.
(e) MINORITY INTEREST
The pro forma income statement has been adjusted to reflect the allocation of
earnings to the minority interest.
F-16
<PAGE> 20
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(In thousands, except share amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
Historical Lakeview,
General Growth Lansing and Other
Properties, Inc.(1) Westwood Park Mall Properties Adjustments Pro Forma
------------------ ----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Total Revenues $ 154,982 $ 14,253 $ 4,980 $ 3,461 $ - $ 177,676
Expenses:
Property operating 52,200 3,835 1,516 1,338 - 58,889
Management fees 1,325 877 - - (481)(a) 1,721
Depreciation and amortization 28,128 - - - 3,529 (b) 31,657
------------ ----------- ----------- ------------- ----------- -----------
Total Expenses 81,653 4,712 1,516 1,338 3,048 92,267
------------ ----------- ----------- ------------- ----------- -----------
Operating Income 73,329 9,541 3,464 2,123 (3,048) 85,409
Interest expense, net (50,137) - - - (5,623)(c) (55,760)
Equity in unconsolidated affiliates:
General Growth Management, Inc. 565 - - - - 565
CenterMark Properties, Inc. 6,350 - - - 953 (d) 7,303
GGP/Homart, Inc. 5,765 - - - - 5,765
Quail Springs - - - 593 - 593
------------ ----------- ----------- ------------- ----------- -----------
Interest before minority interest 35,872 9,541 3,464 2,716 (7,718) 43,875
Minority interest in Operating
Partnership - - - - (16,453)(e) (16,453)
------------ ----------- ----------- ------------- ----------- -----------
Net Income $ 35,872 $ 9,541 $ 3,464 $ 2,716 $ (24,171) $ 27,422
============ =========== =========== ============= =========== ===========
Pro Forma Net Income per share(2) $ 0.93
-----------
</TABLE>
Notes
(1) The historical operations reflect the operations for the nine months ended
September 30, 1996 as reported by General Growth Properties, Inc.
in its Form 10-Q adjusted for the reclassification of the management company
operations to the equity method. The non-recurring gain on the sale of a
portion of the investment in CenterMark of $43,820 and the extraordinary item
related to the early retirement of debt of $2,291 are not included in the above
information.
(2) Pro forma net income per share is based on the pro forma weighted average
common and common equivalent shares outstanding for the nine months ended
September 30, 1996 of 29,357,756 and excludes the effect of the non-recurring
gain and extraordinary item referred to in note (1).
The accompanying notes are an integral part of the Pro Forma
Consolidated Statement of Operations.
For Alphabetical references please refer to Note 3 Pro Forma
Adjustments.
F-17
<PAGE> 21
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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 1996 acquisitions
of Park Mall, Lakeview Square Mall, Lansing Mall, Westwood Mall, Sooner Fashion
Mall and Quail Springs 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 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, 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 final 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).
F-18
<PAGE> 22
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(DOLLARS IN THOUSANDS - UNAUDITED)
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
nine months ended September 30, 1996, for the acquisitions made in 1996.
(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 $101.0 million of mortgage
debt bearing interest at the weighted average rate of 9.60%. The Company also
borrowed approximately $40.7 million to fund the cash portion of the
acquisitions. Company indebtedness was reduced by $87.0 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 7.34%.
(d) EQUITY IN CENTERMARK
The adjustment of $1.0 million included in the 1996 pro forma statement of
operations reflects the reduction in ownership offset by the change
from the equity method of accounting to the cost method.
(e) MINORITY INTEREST
The pro forma income statement has been adjusted to reflect the allocation of
earnings to the minority interest.
F-19
<PAGE> 23
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(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 $ 152,339 $ 20,907 (a) $ 173,246
Buildings and equipment 1,133,586 188,192 (a) 1,321,778
Less accumulated depreciation (178,159) - (178,159)
Developments in progress 19,448 - 19,448
------------------ --------------- --------------
Net property and equipment 1,127,214 209,099 (a) 1,336,313
Investment in CenterMark 67,687 - 67,687
Investment in GGP/Homart 188,691 - 188,691
Investment in Quail Springs Mall 14,966 (b) 14,966
------------------ --------------- --------------
Net investment in real estate 1,383,592 224,065 1,607,657
Cash and cash equivalents 5,398 - 5,398
Tenant receivables, net 19,799 - 19,799
Investment in and note receivable - -
from General Growth Management, Inc. 55,353 - 55,353
Other assets 36,809 - 36,809
------------------ --------------- --------------
Total Assets $ 1,500,951 $ 224,065 $ 1,725,016
================== =============== ==============
Liabilities and Stockholders' Equity
Mortgage notes and contracts payable $ 998,814 $ 133,089 (d) $ 1,131,903
Distributions payable 1,068 - 1,068
Accounts payable and accrued expenses 44,764 1,538 (c) 46,302
------------------ --------------- --------------
1,044,646 134,627 1,179,273
Minority interest in Operating Partnership 169,037 31,906 (e) 200,943
Stockholders' equity 287,268 57,532 (e) 344,800
------------------ --------------- --------------
Total Liabilities and Equity $ 1,500,951 $ 224,065 $ 1,725,016
================== =============== ==============
</TABLE>
(1) Amounts are from the statements included in the Form 10-Q for the quarter
ended September 30, 1996.
The accompanying notes are an integral part of the Pro Forma Consolidated
Balance Sheet.
For Alphabetical references please refer to Note 2 Pro Forma Adjustments.
F-20
<PAGE> 24
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(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 Park Mall, Lakeview Mall, Lansing
Mall, Westwood Mall, Sooner Fashion Mall and a 50% interest in Quail Springs
Mall all occurred on September 30, 1996. In management's 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:
Park Mall $ 49,950
Forbes Cohen (Lakeview, Lansing, Westwood) 132,149
Sooner Fashion Mall 27,000
-------------
$ 209,099
=============
Allocated to:
Land $ 20,907
Buildings and equipment 188,192
------------
$ 209,099
============
(b) Investment in Quail Springs Mall
Acquisition of 50% interest (net of debt assumption) $ 14,966
(c) Working capital assumed by the Company at closing.
(d) Mortgage Notes Payable
Debt incurred was as follows:
Park Mall $ 23,995
Forbes Cohen (including debt assumed) 92,411
Sooner Fashion Mall 1,717
Investment in Quail Springs Mall 14,966
------------
$ 133,089
============
(e) Minority Interest and Stockholders Equity
Operating Partnership Units
were issued for a portion of
Forbes Cohen acquisition cost $ 39,738
Common Stock issued for:
Sooner Fashion Mall 24,950
Park Mall 24,750
-----------
Total Additional Equity 89,438
Less adjustment to minority interest for additional
equity as determined by the relationship of
the units to common shares at September 30, 1996 31,906
-----------
$ 57,532
===========
F-21
<PAGE> 25
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
23a Consent of Coopers & Lybrand L.L.P.
Independent Accountants
23b Consent of Addison, Roberts & Ludwig, P.C.
Independent Auditors
F-22
<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. 333-11067, 333-15907,
333-17021, 333-23035, 333-37247, 333-37383 and 333-41603) and on Forms S-8
(File Nos. 33-79372, 333-07241, 333-11237 and 333-28449) of our report dated
January 10, 1997 on our audit of the Combined Statement of Revenues and Certain
Expenses of the Lansing Mall, the Westwood Mall and Lakeview Square Mall for
the year ended December 31, 1995 which report is included in this Form 8-K/A
Amendment No. 3 of General Growth Properties, Inc. dated December 6, 1996.
COOPERS & LYBRAND L.L.P.
Detroit, Michigan
January 12, 1998
<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. 333-11067, 333-15907,
333-17021, 333-23035, 333-37247, 333-37383 and 333-41603) and on Forms S-8 (File
Nos. 33-79372, 333-07241, 333-11237 and 333-28449) of our report dated July 19,
1996 on our audit of the Statement of Revenues and Certain Expenses of Park Mall
for the year ended December 31, 1995 which report is included in this Form
8-K/A-Amendment No. 3 of General Growth Properties, Inc. dated December 6, 1996.
ADDISON, ROBERTS & LUDWIG, P.C.
Tucson, Arizona
January 12, 1998
