<PAGE>
U.S. Securities and Exchange Commission
Operations Center, Stop 0-7
6432 General Green Way
Alexandria, Virginia 22312
Re: Urban Shopping Centers, Inc.
Commission File No. 1-12278
Form 10-Q
Gentlemen:
Transmitted, for the above-captioned registrant is the electronically filed
executed copy of registrant's current report on Form 10-Q for the quarter
ended March 31, 1998.
Thank you.
Very truly yours,
URBAN SHOPPING CENTERS, INC.
By: ADAM S. METZ
Executive Vice President, Chief Financial
Officer, Director of Acquisitions and
Chief Accounting Officer
ASM/go
Enclosures
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended March 31, 1998 Commission file number 1-12278
URBAN SHOPPING CENTERS, INC.
(Exact name of registrant as specified in its charter)
Maryland 36-3886885
(State of incorporation) (I.R.S. Employer Identification No.)
900 North Michigan Avenue, Suite 1500,
Chicago, Illinois 60611
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 915-2000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares of Common Stock and Unit Voting Common Stock, $.01 par
value, outstanding on May 6, 1998 were 17,335,494 and 407,935, respectively.
<PAGE>
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 18
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 27
Item 7A. Quantitative and Qualitative Disclosures about Market
Risk 30
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
URBAN SHOPPING CENTERS, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
($000's omitted, except share amounts)
ASSETS
------
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
Investment properties:
Land, including peripheral land parcels $ 152,913 $ 152,913
Buildings and improvements 1,073,537 1,072,673
Equipment, furniture and fixtures 3,203 3,297
Construction in progress 7,590 6,025
------------ ------------
1,237,243 1,234,908
Accumulated depreciation (134,874) (125,594)
------------ ------------
Investment properties, net of accumulated
depreciation 1,102,369 1,109,314
Investments in unconsolidated partnerships 122,768 118,800
Investment in the Management Company 16,598 15,058
Cash, cash equivalents and short-term
investments 2,706 1,268
Interest, rents and other receivables 20,378 21,096
Deferred expenses and other assets 13,788 15,440
------------ ------------
$ 1,278,607 $ 1,280,976
============ ============
<PAGE>
URBAN SHOPPING CENTERS, INC.
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
MARCH 31, DECEMBER 31,
1998 1997
------------ ------------
Liabilities:
Mortgage notes payable $ 664,067 $ 666,908
Land sale-leaseback proceeds 75,000 75,000
Deferred lease accrual 19,128 18,593
Accounts payable and other liabilities 44,064 38,538
Investments in unconsolidated partnerships 40,605 39,665
Commitments and contingencies
------------ ------------
Total liabilities 842,864 838,704
Minority interest 130,251 132,616
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000
shares authorized, issued and outstanding
2,999,400 shares in 1998 and 1997
(liquidation preference of $100,000) 30 30
Common stock, $.01 par value, authorized
140,000,000 shares, issued and outstanding
17,335,494 shares in 1998 and 17,259,408
shares in 1997 173 173
Unit voting stock, $.01 par value, authorized
5,000,000 shares, issued and outstanding
407,935 shares in 1998 and in 1997 4 4
Additional paid-in capital 461,199 459,738
Retained earnings (deficit) (155,914) (150,289)
------------ ------------
Total stockholders' equity 305,492 309,656
------------ ------------
$ 1,278,607 $ 1,280,976
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
URBAN SHOPPING CENTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
($000's omitted, except share amounts)
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Revenues:
Shopping center revenues:
Minimum rents $ 29,406 $ 21,543
Percentage rents 1,193 968
Recoveries from tenants 14,894 10,377
Other 1,026 444
------------ ------------
46,519 33,332
Interest income 389 386
------------ ------------
46,908 33,718
------------ ------------
Expenses:
Shopping center expenses 17,634 11,905
Mortgage and other interest 10,834 6,997
Ground rent 1,188 1,216
Depreciation and amortization 10,314 7,159
General and administrative 1,335 958
Write-off of assets 81 21
------------ ------------
41,386 28,256
------------ ------------
<PAGE>
URBAN SHOPPING CENTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
1998 1997
------------ ------------
Operating income 5,522 5,462
Income from unconsolidated partnerships 1,850 910
Loss from the Management Company (835) (150)
------------ ------------
Income before minority interest and
extraordinary item 6,537 6,222
Minority interest (1,997) (2,400)
------------ ------------
Income before extraordinary item 4,540 3,822
Extraordinary item from unconsolidated
partnership (net of minority interest) -- (88)
------------ ------------
Net income 4,540 3,734
Dividends on preferred stock (1,621) --
------------ ------------
Income applicable to common and unit
voting common stock $ 2,919 $ 3,734
============ ============
Basic income per common and unit voting
common share:
Before extraordinary item $ .16 $ .22
Extraordinary item -- --
------------ ------------
Net income $ .16 $ .22
============ ============
Diluted income per common and unit
voting common share:
Before extraordinary item $ .16 $ .22
Extraordinary item -- --
------------ ------------
Net income $ .16 $ .22
============ ============
Weighted average common and unit voting
common shares outstanding 17,719,039 17,218,782
============ ============
Dividends declared and paid per common
and unit voting common share $ .5250 $ .5075
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
URBAN SHOPPING CENTERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
($000's omitted, except share amounts)
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,540 $ 3,734
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 10,314 7,159
Write-off of assets 81 21
Provision for losses on accounts receivable 525 247
Income from unconsolidated partnerships (1,850) (910)
Loss from the Management Company 835 150
Minority interest 1,997 2,400
Deferred lease accrual 535 585
Extraordinary item -- 88
Other, net (457) (281)
Other changes in assets and liabilities:
Interest, rents and other receivables 435 (1,556)
Deferred expenses and other assets 1,005 41
Accounts payable and other liabilities 6,161 6,890
------------ ------------
Net cash provided by operating activities 24,121 18,568
------------ ------------
Cash flows from investing activities:
Additions to investment properties, net of
change in related payables (3,393) (18,821)
Cash contributions to unconsolidated
partnerships and the Management Company (6,109) (480)
Cash distributions from unconsolidated
partnerships and the Management Company 3,170 2,798
Other, net (52) (36)
------------ ------------
Net cash used in investing activities (6,384) (16,539)
------------ ------------
<PAGE>
URBAN SHOPPING CENTERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1998 1997
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of debt, net of
issuance costs 31,629 27,316
Proceeds from issuance of common stock
under option plan and unit incentive plan 1,867 3,273
Repayment of debt (34,591) (20,050)
Cash distributions to common unitholders (4,610) (3,702)
Cash distributions to preferred unitholders (490) (490)
Dividends paid (10,165) (8,767)
Other, net 58 --
------------ ------------
Net cash used in financing activities (16,302) (2,420)
------------ ------------
Net increase (decrease) in cash and cash
equivalents 1,435 (391)
Cash and cash equivalents at beginning of
period 1,143 5,151
------------ ------------
Cash and cash equivalents at end of period $ 2,578 $ 4,760
============ ============
Supplemental disclosure of cash flow
information:
Cash paid for mortgage and other interest,
net of amounts capitalized $ 10,587 $ 6,648
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998 AND 1997
(UNAUDITED)
($000's omitted, except share amounts)
Readers of this quarterly report should refer to the Company's audited
financial statements for the year ended December 31, 1997, which are
incorporated by reference in the Company's 1997 annual report on Form 10-K,
as certain disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.
(1) BASIS OF PRESENTATION
In the opinion of management, all adjustments (consisting solely of
normal recurring adjustments) necessary for a fair presentation of the
consolidated financial statements have been included. The results for the
interim periods ended March 31, 1998 and 1997 are not necessarily indicative
of the results to be obtained for the full fiscal year.
The accompanying consolidated financial statements include the accounts
of the Company, Urban Shopping Centers, L.P. (the "Operating Partnership")
and all controlled affiliates. The effect of all significant intercompany
balances and transactions have been eliminated in the consolidated
presentation.
The equity method of accounting has been applied in the accompanying
consolidated financial statements with respect to the Company's interest in
Water Tower Joint Venture ("Water Tower Place"), Coral-CS/LTD Associates
("Coral Square Mall"), West Dade County Associates ("Miami International
Mall"), S. F. Shopping Centre Associates, L.P. ("San Francisco Shopping
Centre"), Copley Place Associates, LLC ("Copley Place"), Valencia Town
Center Associates, L.P. ("Valencia Town Center"), Citrus Park Venture and
Urban Retail Properties Co. (the "Management Company").
Certain amounts in the 1997 financial statements have been reclassified
to conform with the 1998 presentation.
Development costs, including interest and real estate taxes incurred in
connection with construction or expansion of certain investment properties,
are capitalized as a cost of the investment property and depreciated over the
estimated useful life of the related asset. During the three months ended
March 31, 1998 and 1997, the Company incurred interest of $11,405 and $7,964,
respectively, and capitalized interest of $571 and $967, respectively.
Cash and cash equivalents (which aggregated $2,578 and $1,143 at
March 31, 1998 and December 31, 1997, respectively) include a treasury money
market fund which invests principally in U.S. Treasury notes and bills ($777
and $207 at March 31, 1998 and December 31, 1997, respectively). Other
short-term investments (generally with original maturities of one year or
less) are generally held to maturity and aggregated $128 and $125 at
March 31, 1998 and December 31, 1997, respectively. Cash equivalents and
other short-term investments are held at cost which approximates market.
<PAGE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(1) BASIS OF PRESENTATION (Continued)
Accounting for Derivatives
The Company uses interest rate swap agreements as part of its interest
rate risk management strategy. These off-balance sheet derivatives are
classified as synthetic alterations. The criteria that must be satisfied by
synthetic alteration accounting are as follows: (i) the liability to be
converted has exposure to interest rate risk and (ii) the derivative is
designated and effective as a synthetic alteration of the liability.
Accrual accounting is applied for these derivatives treated as synthetic
alterations, and income and expense are recorded as adjustments of interest
expense. Fees, if any, related to these off-balance sheet investment products
are amortized on the interest method over the life of the derivative. If the
balance of the liability falls below that of the derivative, the excess
portion of the derivative is marked to market and the resulting gain or loss
included in income, as applicable. If a derivative is terminated independent
of the underlying debt, the gain or loss is deferred and amortized over the
remaining life of the derivative.
Derivatives that do not satisfy the criteria above would be carried at
market value with changes in market value to be recognized as current income
or expense.
(2) INVESTMENTS IN UNCONSOLIDATED PARTNERSHIPS
The accompanying consolidated financial statements include investments
in certain partnerships in which the Company does not own a controlling
interest. These investments are reported using the equity method. To the
extent the Company's investment basis differs from its share of the capital
of an unconsolidated partnership, such difference is amortized over the
depreciable lives of the unconsolidated partnership's investment assets.
Investments in unconsolidated partnerships consist of the following:
Name Property Company's Ownership
- -------------------------- ------------------------- -------------------
Water Tower Joint Venture Water Tower Place, 55% (a)
Chicago, IL
Coral-CS/LTD Associates Coral Square Mall, 50%
Coral Springs, FL
West Dade County Miami International Mall, 40%
Associates Miami, FL
S.F. Shopping Centre San Francisco Shopping Centre,
Associates, L.P. San Francisco, CA 50% (b)
Copley Place Associates, LLC Copley Place, Boston, MA 33% (c)
Valencia Town Center Valencia Town Center, 25% (d)
Associates, L.P. Valencia, CA
Citrus Park Venture Tampa, FL 50% (e)
<PAGE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(2) INVESTMENTS IN UNCONSOLIDATED PARTNERSHIPS (CONTINUED)
(a) The Company owns a 55% interest in a retail property (Water Tower Place)
through its investment in Water Tower Joint Venture ("WTJV"). All major
decisions concerning the retail property require the approval of both partners
of WTJV and thus the Company does not control the partnership. On
February 10, 1997, the Company refinanced the Water Tower Place $170,000 of
indebtedness. The new loan matures on February 1, 1999; however, it may be
extended for two one-year periods. Of the total $170,000, $160,000 bears
interest at LIBOR +1.125% and $10,000 bears interest at LIBOR +1.500%.
(b) On June 17, 1997, the Company made an investment in a partnership
resulting in a preferred 50% ownership interest in San Francisco Shopping
Centre.
(c) On August 1, 1997, the Company acquired a one-third equity interest in
Copley Place Associates, LLC.
(d) The outside partner has a right to all cash distributions until it has
received a return on and of its contributions to the partnership (as set
forth in the partnership agreement).
(e) On June 23, 1995, the Company acquired a 50% interest in Citrus Park
Venture (a development parcel). Prior to August 1, 1997, the Company and the
Management Company each owned a 50% economic interest in Citrus Park Venture.
On August 1, 1997, the Company acquired the rights to the remaining 50%
economic interest in Citrus Park Venture from an affiliate of JMB Realty
Corporation ("JMB Realty") in a transaction valued at $8,212. In addition, a
bond offering of $26,700 to fund the roadwork surrounding the property was
completed by the Citrus Park Community Development District (the "CDD")
during the fourth quarter of 1996. The Operating Partnership assisted the CDD
in obtaining the financing for the roadwork by guaranteeing the irrevocable
letter of credit which supports the bonds.
<PAGE>
<TABLE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(2) INVESTMENTS IN UNCONSOLIDATED PARTNERSHIPS (CONTINUED)
Summarized financial information for the unconsolidated partnerships is
presented below.
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
Assets:
Investment properties, net $ 739,303 $ 738,757
Other assets 49,544 43,381
------------ ------------
Less liabilities:
Mortgage notes payable 561,670 562,251
Other liabilities 34,176 29,617
------------ ------------
Total capital 193,001 190,270
Less: Outside partners' capital 110,838 111,135
------------ ------------
Total investments in unconsolidated
partnerships $ 82,163 $ 79,135
============ ============
Total investments in unconsolidated
partnerships are presented in the
accompanying consolidated balance sheets
as follows:
Assets - Investments in unconsolidated
partnerships $ 122,768 $ 118,800
Liabilities - Investments in unconsolidated
partnerships 40,605 39,665
------------ ------------
$ 82,163 $ 79,135
============ ============
</TABLE>
<PAGE>
<TABLE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(2) INVESTMENTS IN UNCONSOLIDATED PARTNERSHIPS (CONTINUED)
Summarized financial information for the unconsolidated partnerships
- - continued
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
Revenues:
Shopping centers $ 39,371 $ 19,974
Interest income 261 122
Expenses:
Shopping centers (18,299) (9,019)
Mortgage and other interest and ground rent (10,691) (5,959)
Depreciation and amortization (5,704) (2,777)
------------ ------------
Income before extraordinary item 4,938 2,341
Extraordinary item -- (228)
------------ ------------
Net income $ 4,938 $ 2,113
============ ============
Company's share of:
Mortgage and other interest and ground rent $ (4,746) $ (2,534)
Depreciation and amortization (2,443) (1,156)
Income before extraordinary item 1,850 910
============ ============
</TABLE>
<PAGE>
<TABLE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(3) INVESTMENT IN THE MANAGEMENT COMPANY
The Company's consolidated financial statements present its investment in
the Management Company under the equity method of accounting.
Summarized financial information for the Management Company is presented
below.
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------ ------------
S> <C> <C>
Assets:
Investments in land parcels (a) $ 27,387 $ 27,451
Cash, cash equivalents and short-term
investments 1,154 1,805
Receivables and deferred expenses 16,880 16,097
------------ ------------
$ 45,421 $ 45,353
============ ============
Liabilities:
Notes payable (b) $ 70,000 $ 70,000
Accounts payable and other liabilities 4,081 5,652
------------ ------------
74,081 75,652
Owners' deficit (28,660) (30,299)
------------ ------------
$ 45,421 $ 45,353
============ ============
</TABLE>
<PAGE>
<TABLE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(3) INVESTMENT IN THE MANAGEMENT COMPANY (CONTINUED)
Summarized financial information for the Management Company - continued
THREE MONTHS ENDED
MARCH 31,
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
Revenues:
Management, leasing and development services $ 9,535 $ 8,690
Interest income 329 72
------------ ------------
9,864 8,762
------------ ------------
Expenses:
Management, leasing and development services 8,892 7,459
Mortgage and other interest 1,421 1,424
Depreciation and amortization 335 104
------------ ------------
10,648 8,987
------------ ------------
Operating loss (784) (225)
Income tax benefit 207 78
------------ ------------
Net loss $ (577) $ (147)
============ ============
</TABLE>
<PAGE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(3) INVESTMENT IN THE MANAGEMENT COMPANY (CONTINUED)
(a) Includes 50% of the outstanding mortgage loan of an affiliated joint
venture. The mortgage loan, with a 50% face value of $25,750, was acquired
for $19,312 resulting in a discount of $6,438. The loan bears interest at a
variable rate based on market interest rates (as defined) and is secured by
the affiliated joint venture's interest in a land parcel located in Chicago,
IL. Interest is recorded for financial reporting purposes when received.
Accordingly, accretion of the discount has also not been recorded. During
the fourth quarter of 1997, the Management Company wrote-down the carrying
value of the mortgage loan by $8,812, due to the uncertainty of realizing the
carrying value upon future sale or development.
(b) Includes $51,000 of indebtedness secured by the Management Company's
interest in certain management contracts and a guarantee secured by Penn
Square Mall Limited Partnership (a consolidated venture) which is secured by
Penn Square Mall. The $51,000 bears interest at 7.54% per annum and matures
on August 1, 2001. Also includes $9,000 of indebtedness owed to affiliates
of JMB Realty which bears interest at 7.0% per annum and matures on
September 1, 2001. The effective interest rate on the aggregate $60,000 of
indebtedness is 7.46% through September 1, 2001. The Management Company also
is indebted under a $10,000 note payable to the Company. Such note bears
interest at 12% per annum and matures on September 1, 2001.
The Management Company provides management, leasing and development
services to certain of the Company's consolidated and unconsolidated
investment properties, to affiliated entities and to third parties. During
1995, management contracts for six of the Company's consolidated investment
properties were terminated and new management contracts were entered into with
the Operating Partnership. In connection therewith, the Operating Partnership
entered into a service agreement with the Management Company to provide
supervisory services by Management Company personnel at 105% of the
Management Company's cost thereof. In the three months ended March 31, 1997,
the Management Company received such reimbursements from the Operating
Partnership of approximately $192. On January 1, 1998, these management
contracts were terminated and new management contracts were entered into with
the Management Company. Concurrently therewith, the foregoing service
agreement was terminated. In the three months ended March 31, 1998 and 1997,
management, leasing and development revenues of approximately $1,493 and
$2,260, respectively, resulted from services provided to affiliated entities.
In addition, the Management Company received reimbursements (at cost) of
payroll and other operating expenses from affiliated entities for activities
performed on such affiliated entities' behalf. Such reimbursements were
approximately $3,943 and $4,015 during the three months ended March 31, 1998
and 1997, respectively. Additionally, rent expense, including building
expenses, paid by the Management Company to affiliates of JMB Realty in the
three months ended March 31, 1998 and 1997 were $193 and $195, respectively.
<PAGE>
URBAN SHOPPING CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
($000's omitted, except share amounts)
(3) INVESTMENT IN THE MANAGEMENT COMPANY (CONTINUED)
The Company has options to purchase certain development parcels from the
Management Company at the lower of fair market value or 110% of allocable
costs (all terms as defined) until October 2000. In addition, the sale or
development of any development parcels by the Management Company is subject to
a right of first offer in favor of the Company on the same conditions as
described above.
(4) TRANSACTIONS WITH AFFILIATES (not disclosed elsewhere)
Costs and expenses for services provided by the Management Company and
the Operating Partnership to the Company's investment properties, including
the Company's share of unconsolidated investment properties, were as follows:
THREE MONTHS ENDED
MARCH 31,
--------------------
1998 1997
--------- --------
Property management and leasing services (a) $ 1,440 $ 950
Development services 210 423
--------- --------
$ 1,650 $ 1,373
========= ========
(a) Management services of $448 for the three months ended
March 31, 1997, provided by the Operating Partnership to certain consolidated
investment properties, and included above, have been eliminated in
consolidation. On January 1, 1998, these contracts were terminated and new
management contracts were entered into with the Management Company.
The Company has purchase options, until October 2000, with respect to
interests in certain improved retail properties in which JMB Realty and
certain of its affiliates ("JMB Partners") has an interest. In addition,
these interests may not be sold by JMB Partners without first offering such
interests to the Company at the lower of the option price or the then fair
market value of such property. The Company also has options, until
October 2000, to purchase certain retail development land parcels from JMB
Partners at the lower of fair market value or 110% of allocable cost (all
terms as defined). In addition, the sale or development of any development
parcels by JMB Partners is subject to a right of first offer in favor of the
Company at the same option price.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
FINANCIAL CONDITION. Net cash flows from operating activities increased
$5.6 million in the three months ended March 31, 1998 from the three months
ended March 31, 1997. This increase was primarily attributable to an increase
in rental operations as discussed below.
Net cash flows used in investing activities decreased $10.2 million in
the three months ended March 31, 1998 from the three months ended
March 31, 1997. This decrease was primarily attributable to a decrease in
additions to investment properties at Wolfchase Galleria resulting from its
completion and opening on February 26, 1997; partially offset by an increase
in cash contributions to Citrus Park Venture.
Net cash flows used in financing activities increased $13.9 million in
the three months ended March 31, 1998 from the three months ended
March 31, 1997. This increase was primarily attributable to (i) an increase in
the dividends paid resulting from the issuance of additional shares of common
stock, unit voting common stock and preferred stock in the second through
fourth quarters of 1997 and first quarter of 1998, (ii) an increase in the
distributions paid resulting from the issuance of common and preferred units
in connection with certain of the Company's 1997 acquisitions, (iii) an
increase in the quarterly distribution and dividend per unit and share,
respectively, beginning in the first quarter of 1998, (iv) a decrease in the
proceeds from shares of common stock issued during first quarter of 1998 as
compared to first quarter of 1997, and (v) a decrease in the net fundings of
the construction loan at Wolfchase Galleria due to the repayment of the
construction loan during second quarter of 1997.
At March 31, 1998, the Company and its consolidated ventures had cash,
cash equivalents and short-term investments of approximately $2.7 million.
On March 5, 1998, the Company paid $10.2 million to common and preferred
shareholders as a dividend of $.5250 per share representing its fourth quarter
1997 dividend. On March 5, 1998, the Operating Partnership paid $4.6 million
to its limited partners as a distribution of $.5250 per unit representing its
fourth quarter 1997 distribution.
CAPITALIZATION. At March 31, 1998, the Company's debt (including the
Company's share of debt of unconsolidated partnerships and the Management
Company) totaled $951.4 million of which $927.8 million is fixed rate debt and
$23.6 million is floating rate debt. On November 6, 1996, the Company entered
into an agreement with a lender for a one year $5.0 million unsecured revolving
line of credit, which on January 30, 1998, was amended to increase the line to
$7.5 million and extend the maturity to January 29, 1999. As of March 31,
1998, $4.3 million was outstanding on this line of credit. As of March 31,
1998, $29.3 million was outstanding on the Company's $90.0 million secured,
revolving line of credit. During the first quarter of 1998, the Company
entered into a seven year interest rate swap agreement on $10.0 million of its
floating rate indebtedness thereby fixing the all-in rate at 6.644%. Subsequent
to the end of the quarter, the Company entered into an interest rate swap
agreement with a maturity date of December 1, 2005 for the MainPlace
indebtedness thereby fixing the all-in interest rate at 6.25% commencing
May 1, 1998.
<PAGE>
Although there can be no assurances, the Company believes that operating
cash flows will be sufficient to service all Company debt and anticipates
repayment or refinancing when such amounts are due in the ordinary course of
its business. At March 31, 1998, the Company's ratio of Company debt to total
market capitalization (which includes the market value of issued and
outstanding shares of capital stock of the Company and of partnership
interests in the Operating Partnership not held by the Company, plus Company
debt) was approximately 49%, as illustrated by the table at the end of the
liquidity and capital resources section. The debt to total market
capitalization ratio is based upon the market value of the common stock and
indebtedness of the Company and, accordingly, will fluctuate with changes in
the value of the common stock (and the issuance of additional shares of
common stock, or other forms of capital, if any, and the amount of outstanding
indebtedness).
On November 13, 1997, the Company issued $100.0 million in cumulative
convertible redeemable preferred stock ("Preferred Stock") with a liquidation
preference of $33.34 per share. Quarterly dividends on the Preferred Stock
are equal to the greater of (i) $0.50 per share or (ii) the quarterly dividend
then payable on the shares of common stock into which the Preferred Stock is
convertible. The Preferred Stock is convertible into common stock, at the
option of the holder, at a conversion price of $33.34 per share (subject to
antidilution adjustments) at anytime after August 1998. After six years the
Preferred Stock may be redeemed, at the option of the Company, for cash at a
redemption price of $33.34 per share. The net proceeds of the issue, after
deducting transaction costs, were used to fund a portion of the November 14,
1997 acquisitions of Fox Valley Center and Hawthorn Center.
The Company believes that its cash generated from property operations
will provide the necessary funds on a short-term and long-term basis for its
operating expenses, interest expenses on outstanding indebtedness and
recurring capital expenditures and all dividends to the shareholders necessary
to satisfy the REIT requirements. Sources of capital for future acquisitions,
development and non-recurring capital expenditures, such as major building
renovations and expansions, as well as for scheduled principal payments,
including balloon payments, on the outstanding indebtedness are expected to be
obtained from the following sources: (i) excess funds available for
distribution, (ii) working capital reserves, (iii) additional Company or
property financing, (iv) proceeds from the sale of assets, including
outparcels and (v) additional equity raised in the public or private markets
(including the issuance of additional units and/or unit voting common stock).
Accordingly, the Company expects that it may incur additional indebtedness.
In light of current economic conditions, relative costs of debt and equity
capital, market values of properties, growth and acquisition opportunities and
other factors, the Company may consider an increase or decrease in its ratio
of Company debt to total market capitalization accordingly.
CAPITAL INVESTMENTS. On November 14, 1997, the Company acquired Fox
Valley Center and Hawthorn Center. The Company is in the process of renovating
Fox Valley Center at a cost of approximately $13.0 million. Work has begun on
the renovation and it is expected to be completed in the fourth quarter of
1998. In addition, the Company entered into a put option agreement with an
unaffiliated third party for the purchase of a regional mall. The
unaffiliated third party may exercise the put option from October 1, 1998
through December 31, 1998 for a purchase price to the Company of $115.0
million plus any capital expenditures incurred by the third party.
<PAGE>
The Company's current development project is the approximate 1.1 million
square foot Citrus Park Town Center ("Citrus Park") in Tampa, Florida.
Burdines, Dillard's, JCPenney and Sears have agreed to be anchor stores for
the project. Citrus Park is scheduled to open in March 1999. In addition,
an approximate 350,000 square foot community center opposite the regional
mall, Citrus Park Plaza, is also scheduled to open in March 1999. A bond
offering of $26.7 million to fund the roadwork surrounding the property was
completed by the Citrus Park Community Development District (the "CDD"). The
Operating Partnership assisted the CDD in obtaining the financing for the
roadwork by guaranteeing the irrevocable letter of credit which supports the
bonds.
The Company's next planned development project is scheduled to be the
Galleria at Roseville in Roseville, California, which is near Sacramento.
Current plans for Roseville to open in Fall 2000 are progressing on schedule.
Nordstrom and Sears have already committed to be two of the anchor stores for
the approximate 1.1 million square foot mall. Negotiations are underway with
two additional anchors.
Certain statements set forth herein contain forward-looking statements,
including, without limitation, statements relating to the timing and
anticipated capital expenditures of the Company's development programs and
acquisitions. Although the Company believes that the expectations reflected
in such forward-looking statements are based on reasonable assumptions, the
actual results may differ materially from those set forth in the forward-
looking statements. Certain factors that might cause such differences
include general economic conditions, local real estate conditions,
construction delays due to the unavailability of construction materials,
weather conditions or other delays beyond the control of the Company.
Consequently, such forward-looking statements should be regarded solely as
reflections of the Company's current operating and development and acquisition
plans and estimates. These plans and estimates are subject to revision from
time to time as additional information becomes available, and actual results
may differ from those indicated in the referenced statements.
<PAGE>
<TABLE>
<CAPTION>
100% PRO RATA
BALANCE OF SHARE OF
ANNUAL MORTGAGE MORTGAGE
($000's omitted, MATURITY INTEREST NOTES OWNERSHIP NOTES
except share amounts) DATE RATE PAYABLE INTEREST PAYABLE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Consolidated Entities:
Old Orchard Center Dec. 2009 6.9800% $ 167,583 100.0% $ 167,583
Oakbrook Center Oct. 2004 6.1375% 140,000 100.0% 140,000
MainPlace Oct. 1998 5.4066% (1) 80,000 100.0% 80,000
Wolfchase Galleria June 2007 7.8000% 79,542 100.0% 79,542
Fox Valley Center Nov. 2006 6.7500% 85,528 100.0% 85,528
Hawthorn Center Nov. 2008 6.7500% 77,864 100.0% 77,864
Operating Partnership (2) (2) 33,550 100.0% 33,550
- ----------------------------------------------------------------------------------------------------------------------
664,067 664,067
Unconsolidated Entities: (3)
Water Tower Place Feb. 1999 (4) (4) 170,000 55.0% 93,500
Coral Square Mall Dec. 2000 7.4000% 53,300 50.0% 26,650
Miami International Mall Dec. 2003 6.9100% 46,880 40.0% 18,752
San Francisco Shopping Centre July 2002 (5) 6.9045% 53,531 50.0% 26,766
Copley Place Aug. 2007 7.4400% 193,956 33.3% 64,652
Management Company Aug. 2001 7.5400% 51,000 95.0% 48,450
Management Company Sept. 2001 7.0000% 9,000 95.0% 8,550
- ----------------------------------------------------------------------------------------------------------------------
577,667 287,320
- ----------------------------------------------------------------------------------------------------------------------
Company debt $ 951,387
- ----------------------------------------------------------------------------------------------------------------------
Convertible preferred units (convertible into 1,018,282
common units) $ 28,000
Convertible preferred stock (convertible into 2,999,400
shares of common stock) $ 100,000
- ----------------------------------------------------------------------------------------------------------------------
Market value of equity interests as of March 31, 1998,
based upon 26,524,465 common shares, unit voting common
shares and common units at $33.00 per share/unit $ 875,307
- ----------------------------------------------------------------------------------------------------------------------
Total market capitalization $ 1,954,694
- ----------------------------------------------------------------------------------------------------------------------
Company debt to total market capitalization 49%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
(1) Subsequent to the end of the quarter, the Company entered into an
interest rate swap agreement with a maturity date of December 1, 2005 for the
MainPlace indebtedness thereby fixing the all-in interest rate at 6.25%
commencing May 1, 1998.
(2) Includes $29.3 million outstanding under the Company's $90.0 million
secured revolving line of credit. The line of credit, subject to lenders'
approval, may be extended for an additional one or two year period and is
currently subject to a floating rate of 0.85% over LIBOR (6.5375% at March
31, 1998). Also, includes $4.3 million outstanding under the Company's $7.5
million unsecured revolving line of credit bearing interest at the reference
rate minus 1.50% (6.50% at March 31, 1998). During the first quarter of 1998,
the Company entered into a seven year interest rate swap agreement on $10.0
million of its floating rate endebtedness thereby fixing the all-in interest
rate at 6.644%.
(3) Excludes Valencia Town Center as the Company is currently not entitled
to any cash distributions until the outside partner has received a return on
and of its contributions to the partnership.
(4) The loan matures on February 1, 1999; however, it may be extended for
two one-year periods. Of the total $170.0 million, $160.0 million bears
interest at LIBOR + 1.125% and $10.0 million bears interest at LIBOR + 1.500%
(6.8125% and 7.1875%, respectively at March 31, 1998).
(5) The loan matures on July 1, 2002; however, it may be extended for three
one-year periods.
REVIEW OF OPERATIONS
FUNDS FROM OPERATIONS. Funds from operations should not be considered
as an alternative to net income or any other GAAP measurement of performance
as an indicator of operating performance or as an alternative to cash flows
from operating, investing or financing activities as a measure of liquidity.
The chart below shows the calculation of funds from operations:
<PAGE>
<TABLE>
<CAPTION> THREE MONTHS ENDED
MARCH 31,
----------------------------
1998 1997
---------- ------------
<S> <C> <C>
Income before minority interest and
extraordinary item $ 6,537 $ 6,222
Plus depreciation and amortization 9,769 6,570
Plus Company's share of depreciation and
amortization from unconsolidated
partnerships and the Management Company 2,294 1,080
Less preferred unit distribution and
preferred stock dividends (2,111) (490)
---------- ------------
Total funds from operations $ 16,489 $ 13,382
========== ============
Company's share of funds from operations (a) $ 11,025 $ 9,385
========== ============
<FN>
(a) Based upon a weighted average of 26,500,221 and 24,552,791 common shares
and units outstanding for the three months ended March 31, 1998 and 1997,
respectively. Total common shares and units outstanding at March 31, 1998
and 1997, were 26,524,465 and 24,598,170, respectively.
</TABLE>
<PAGE>
<TABLE>
FUNDS AVAILABLE FOR DISTRIBUTION. The chart below shows the calculation
of funds available for distribution:
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
Total funds from operations $ 16,489 $ 13,382
Plus non-cash effect of Oakbrook Center
straight-lined ground rent and related
interest 813 822
Plus adjustment to reflect actual cash
received from the Management Company 809 125
Plus write-off of assets 81 21
Less straight-line rent adjustments (a) (551) (313)
------------ -----------
Total funds available for distribution $ 17,641 $ 14,037
============ ===========
Company's share of funds available for
distribution (b) $ 11,795 $ 9,844
============ ============
<FN>
(a) Includes the Company's share of unconsolidated partnerships.
(b) Based upon a weighted average of 26,500,221 and 24,552,791 common shares
and units outstanding for the three months ended March 31, 1998 and 1997,
respectively. Total common shares and units outstanding at March 31, 1998 and
1997, were 26,524,465 and 24,598,170, respectively.
</TABLE>
<PAGE>
SALES. Aggregate sales volume at the Company's regional malls for
those mall shops and anchors that report sales have increased 6.9% to $502
million in the three months ended March 31, 1998 from $469 million in the
three months ended March 31, 1997, including 1997 acquisitions and
developments. Excluding the development of Wolfchase Galleria, aggregate
sales volume increased 5.1% in the first quarter of 1998. Mall tenant sales
(excluding anchors and movie theaters) have increased 8.7% to $358 million in
the three months ended March 31, 1998 from $329 million in the same period for
1997, including 1997 acquisitions and development. Excluding Wolfchase
Galleria, mall tenant sales increased 6.5% in the first quarter of 1998.
Comparable reported mall tenant sales increased 4.5% in the three months
ended March 31, 1998 compared to the same period for 1997. Sales per square
foot for the rolling twelve months ended March 31, 1998 were $365 compared to
$361 for the twelve months ended December 31, 1997 and $350 for the twelve
months ended March 31, 1997. Excluding 1997 acquisitions, sales per square
foot for the twelve months ended March 31, 1998 were $369. All sales per
square foot figures exclude Wolfchase Galleria.
OCCUPANCY. The mall GLA was 90.4% occupied at March 31, 1998 as compared
to 91.6% at December 31, 1997 and 90.8% at March 31, 1997. The mall GLA was
92.3% leased at March 31, 1998.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE THREE MONTHS ENDED
MARCH 31, 1997
Shopping center revenues increased $13.2 million to $46.5 million in the
three months ended March 31, 1998 from $33.3 million in the three months ended
March 31, 1997. This increase was primarily a result of the Company's
acquisitions of Fox Valley Center and Hawthorn Center on November 14, 1997 and
due to Wolfchase Galleria having been open for the entire quarter in 1998 as
compared to a partial quarter in 1997.
Shopping center expenses, including depreciation and amortization,
increased $8.8 million to $27.9 million in the three months ended March 31,
1998 from $19.1 million in the same period for 1997. This increase was
primarily a result of the Company's acquisitions of Fox Valley Center and
Hawthorn Center on November 14, 1997 and due to Wolfchase Galleria having
been open for the entire quarter in 1998 as compared to a partial quarter in
1997.
Mortgage and other interest increased $3.8 million to $10.8 million in
the three months ended March 31, 1998 from $7.0 million in the same period
for 1997. This increase was primarily a result of the Company's acquisitions
of Fox Valley Center and Hawthorn Center on November 14, 1997 and due to
Wolfchase Galleria having been open for the entire quarter in 1998 as compared
to a partial quarter in 1997.
Income from unconsolidated partnerships increased $1.0 million to $1.9
million in the three months ended March 31, 1998 from $.9 million in the same
period for 1997. This increase was primarily attributable to the Company's
investment in a partnership resulting in a preferred 50% ownership interest
in San Francisco Shopping Centre on June 17, 1997 and the purchase of a
one-third equity interest in Copley Place on August 1, 1997.
<PAGE>
Income from the Management Company decreased $.6 million to a $.8 million
loss in the three months ended March 31, 1998 from a $.2 million loss in the
same period for 1997. This decrease was primarily attributable to an increase
in payroll expense as a result of the incentive unit program and an increase
in depreciation expense as a result of the purchase of computer hardware and
software during 1997.
The extraordinary item (net of minority interest) of $.1 million in 1997
resulted from the write-off of deferred expenses and loan fees related to the
repayment of debt at Water Tower Place.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.1 Stock Certificate is hereby incorporated by reference to
Exhibit 4.1 to the Registrant's Form 10-Q (File No. 1-12278)
filed on November 19, 1993
4.2 Credit Agreement among Urban Shopping Centers, L.P., Union Bank
of Switzerland (New York Branch), Morgan Guaranty Trust Company
of New York and the several Lenders is hereby incorporated by
reference to Exhibit 4.11 to the Registrant's Form 10-Q (File
No. 1-2278) filed on November 9, 1995
4.3 Mortgage, Security Agreement, Assignment of Leases and Rents and
Fixture Filing dated as of February 10, 1997 made by LaSalle
National Trust, N.A. and Water Tower Joint Venture to and with
Lehman Brothers Holdings Inc. is hereby incorporated by
reference to Exhibit 4.8 to the Registrant's Form 10-Q (File No.
1-12278) filed on May 13, 1997
4.4 Promissory Note A dated as of February 10, 1997 by and between
Water Tower Joint Venture and Lehman Brothers Holdings Inc. is
hereby incorporated by reference to Exhibit 4.9 to the
Registrant's Form 10-Q (File No. 1-12278) filed on May 13, 1997
4.5 Promissory Note B dated as of February 10, 1997 by and between
Water Tower Joint Venture and Lehman Brothers Holdings Inc. is
hereby incorporated by reference to Exhibit 4.10 to the
Registrant's Form 10-Q (File No. 1-12278) filed on May 13, 1997
4.6 Mortgage, Security Agreement and Assignment of Rents dated as of
November 3, 1997 made by LaSalle National Bank and Oak Brook
Urban Venture, L.P. to and with USC Oakbrook, Inc., Goldman
Sachs Mitsui Marine Derivative Products, L.P. and Teachers'
Retirement System of the State of Illinois is hereby incorporated
by reference to Exhibit 4.6 to the Registrant's Form 10-K (File
No. 1-12278) filed on March 27, 1998
4.7 Fifth Amendment to Loan Agreement dated December 11, 1997 by and
among The Prudential Insurance Company of America, Old Orchard
Urban Limited Partnership and American National Bank and Trust
Company of Chicago is hereby incorporated by reference to
Exhibit 4.7 to the Registrant's Form 10-K (File No. 1-12278)
filed on March 27, 1998
10.1 Second Amended and Restated Agreement of Limited Partnership of
Urban Shopping Centers, L.P. is hereby incorporated by
reference to Exhibit 10.1 to the Registrant's Form 10-Q
(File No. 1-12278) filed on November 19, 1993
10.2 Corporate Services Agreement among the Registrant, Urban Shopping
Centers, L.P. and JMB Retail Properties Co. (now Urban Retail
Properties Co.) is hereby incorporated by reference to Exhibit
10.3 to the Registrant's Form 10-Q (File No. 1-12278) filed on
November 19, 1993
<PAGE>
10.3 JMB Realty Corporation Employee Savings Plan is hereby
incorporated by reference to Exhibit 10.4 to the Registrant's
Registration Statement on Form S-11 (No. 33-64488)
10.4 Retirement Plan for Employees of Amfac, Inc. and Subsidiaries is
hereby incorporated by reference to Exhibit 10.5 to the
Registrant's Registration Statement on Form S-11 (No. 33-64488)
10.5 Urban Shopping Centers 1993 Option Plan is hereby incorporated
by reference to Exhibit 10.6 to the Registrant's Form 10-Q (File
No. 1-12278) filed on November 19, 1993
10.6 Non-Competition Agreement between JMB Realty Corporation and the
Registrant is hereby incorporated by reference to Exhibit 10.7
to the Registrant's Form 10-Q (File No. 1-12278) filed on
November 19, 1993
10.7 Non-Competition Agreement between JMB Institutional Realty
Corporation and the Registrant is hereby incorporated by
reference to Exhibit 10.8 to the Registrant's Form 10-Q (File
No. 1-12278) filed on November 19, 1993
10.8 Non-Competition Agreement between Neil G. Bluhm and the
Registrant is hereby incorporated by reference to Exhibit 10.9
to the Registrant's Form 10-Q (File No. 1-12278) filed on
November 19, 1993
10.9 Non-Competition Agreement between Judd D. Malkin and the
Registrant is hereby incorporated by reference to Exhibit 10.10
to the Registrant's Form 10-Q (File No. 1-12278) filed on
November 19, 1993
10.10 Omnibus Agreement among Urban Shopping Centers, L.P., JMB
Properties Company, JMB Retail Properties Co. (now Urban Retail
Properties Co.) and the Registrant is hereby incorporated by
reference to Exhibit 10.12 to the Registrant's Form 10-Q (File
No. 1-12278) filed on November 19, 1993
10.11 Indemnification Agreement between the Registrant and its
Directors and Officers is hereby incorporated by reference to
Exhibit 10.13 to the Registrant's Form 10-Q (File No. 1-12278)
filed on November 19, 1993
10.12 Registration Rights and Lock-Up Agreement between the Registrant
and certain Investors is hereby incorporated by reference to
Exhibit 10.14 to the Registrant's Form 10-Q (File No. 1-12278)
filed on November 19, 1993
10.13 Stockholders Agreement between Center Partners, Ltd., Urban
Investment & Development Co., Urban-Water Tower Associates,
JMB/Miami Investors, L.P., Island Holidays, Ltd., Celtic Funding
Corporation and the Registrant is hereby incorporated by
reference to Exhibit 10.15 to the Registrant's Form 10-Q (File
No. 1-12278) filed on November 19, 1993
<PAGE>
10.14 Lease Agreement, dated December 31, 1990, by and between
Teachers' Retirement System of the State of Illinois and LaSalle
National Trust, N.A., as Trustee for Oakbrook Urban Venture, as
amended by the First Amendment to Lease Agreement and to Restated
and Amended Memorandum of Lease is hereby incorporated by
reference to Exhibit 10.16 to the Registrant's Registration
Statement on Form S-11 (No. 33-64488)
10.15 Second Amendment to Lease Agreement by and between Teachers'
Retirement System of the State of Illinois and LaSalle National
Trust, N.A., as Trustee for Oakbrook Urban Venture, L.P. is
hereby incorporated by reference to Exhibit 10.17 to the
Registrant's Form 10-Q (File No. 1-12278) filed on November 19,
1993
10.16 Net Ground Rental Lease Agreement with respect to Penn Square
Mall, as amended by Amendment of Net Ground Rental Lease and as
further amended by Second Amendment of Net Ground Rental Lease
is hereby incorporated by reference to Exhibit 10.18 to the
Registrant's Registration Statement on Form S-11 (No. 33-64488)
10.17 Ground Lease by and between The Newhall Land and Farming Company
and Valencia Town Center Associates is hereby incorporated by
reference to Exhibit 10.19 to the Registrant's Registration
Statement on Form S-11 (No. 33-64488)
10.18 Restated Employment Agreement between Matthew S. Dominski and
the Registrant is hereby incorporated by reference to Exhibit
10.19 to the Registrant's Form 10-K (File No. 1-12278) filed
on March 25, 1994
10.19 Third Amendment to Lease Agreement by and between Teachers'
Retirement System of the State of Illinois and LaSalle National
Trust, N.A., as Trustee for Oakbrook Urban Venture, L.P. is
hereby incorporated by reference to Exhibit 10.20 to the
Registrant's Form 10-K (File No. 1-12278) filed on March 25, 1994
10.20 First Amendment to Second Amended and Restated Agreement of
Limited Partnership of Urban Shopping Centers, L.P. is hereby
incorporated by reference to Exhibit 10.21 to the Registrant's
Form 10-Q (File No. 1-12278) filed on August 9, 1995
10.21 First and Second Amendments to Urban Shopping Centers 1993
Option Plan are hereby incorporated by reference to Exhibit
10.22 to the Registrant's Form 10-Q (File No. 1-12278) filed on
August 9, 1995
10.22 Urban Shopping Centers 1996 Incentive Unit Program is hereby
incorporated by reference to Exhibit 10.1 to the Registrant's
Form 8-K filed on November 25, 1996
10.23 Second Amendment to Second Amended and Restated Agreement of
Limited Partnership of Urban Shopping Centers, L.P. is hereby
incorporated by reference to Exhibit 10.23 to the Registrant's
Form 10-K (File No. 1-12278) filed on March 31, 1997
<PAGE>
10.24 Agreement for Purchase and Sale of Partnership Interest by and
between ZML-00 Associates Limited Partnership, Urban Shopping
Centers, L.P., USC Old Orchard, Inc., and H. Rigel Barber,
Gary A. Nickele and Jeffery A. Gluskin, as owner trustees of the
Old Orchard Trust, is hereby incorporated by reference to Exhibit
10.24 to the Registrant's Form 10-K (File No. 1-12278) filed on
March 31, 1997
10.25 Amended and Restated Agreement of Limited Partnership of Old
Orchard Urban Limited Partnership by and between USC Old
Orchard, Inc. and Urban Shopping Centers, L.P. is hereby
incorporate by reference to Exhibit 10.25 to the Registrant's
Form 10-K (File No. 1-12278) filed on March 31, 1997
10.26 Third Amendment to Urban Shopping Centers 1993 Option Plan is
hereby incorporated by reference to Exhibit 10.26 to the
Registrant's Form 10-Q (File No. 1-12278) filed on May 13, 1997
10.27 Hawthorn, L.P. Agreement of Purchase and Sale of Partnership
Interest dated November 14, 1997 is hereby incorporated by
reference to Exhibit 10.1 to the Registrant's Form 8-K/A filed
on December 22, 1997
10.28 Fox Valley Mall LLC Agreement of Purchase and Sale of Membership
Interest dated November 14, 1997 is hereby incorporated by
reference to Exhibit 10.2 to the Registrant's Form 8-K/A filed on
December 22, 1997
10.29 Registration Rights Agreement between the Company and Security
Capital Preferred Growth Incorporated dated November 13, 1997
is hereby incorporated by reference to Exhibit 10.5 to the
Registrant's form 8-K/A filed on December 22, 1997
10.30 Third Amendment to Second Amended and Restated Agreement of
Limited Partnership of Urban Shopping Centers, L.P. is hereby
incorporated by reference to Exhibit 10.7 to the Registrant's
Form 8-K/A filed on December 22, 1997
27.1 Financial Data Schedule
Although certain additional long-term debt instruments of the
Registrant have been excluded from Exhibit 4 above, pursuant to Rule
601(b)(4)(iii), the Registrant commits to provide copies of such
agreements to the Securities and Exchange Commission upon request.
(b) No reports on Form 8-K were filed during the first quarter of 1998.
Item 7a. Quantitative And Qualitative Disclosures About Market Risk
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
URBAN SHOPPING CENTERS, INC.
By: ADAM S. METZ
Executive Vice President, Chief Financial
Officer, Director of Acquisitions and Chief
Accounting Officer
Date: May 7, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person in the capacity and on
the date indicated.
ADAM S. METZ
Executive Vice President, Chief Financial
Officer, Director of Acquisitions and Chief
Accounting Officer
Date: May 7, 1998
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FINANCIAL STATEMENTS INCLUDED IN ITS REPORT ON FORM 10-Q FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN SUCH REPORT.
</LEGEND>
<CIK> 0000907077
<NAME> URBAN SHOPPING CENTERS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,706
<SECURITIES> 0
<RECEIVABLES> 20,378
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 23,084
<PP&E> 1,237,243
<DEPRECIATION> (134,874)
<TOTAL-ASSETS> 1,278,607
<CURRENT-LIABILITIES> 44,064
<BONDS> 664,067
0
30
<COMMON> 173
<OTHER-SE> 305,289
<TOTAL-LIABILITY-AND-EQUITY> 1,278,607
<SALES> 46,519
<TOTAL-REVENUES> 46,908
<CGS> 0
<TOTAL-COSTS> 27,948
<OTHER-EXPENSES> 2,604
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,834
<INCOME-PRETAX> 5,522
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,540
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,919
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
