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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 23, 1999
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WESTFIELD AMERICA, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Missouri 1-12923 43-0758627
(State or Other Jurisdiction Commission file number (IRS Employer
of Incorporation) Identification Number)
11601 WILSHIRE BOULEVARD
12TH FLOOR
LOS ANGELES, CALIFORNIA 90025
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 310/445-2427
NO CHANGE
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 23, 1999, Westfield America, Inc. (the "Company") announced the
formation of a joint venture with J.P. Morgan Investment Management, Inc. for
two of its malls, Westfield Shoppingtown Valley Fair, in San Jose, CA
("Valley Fair"), and Westfield Shoppingtown UTC (formerly known as University
Towne Centre), in La Jolla, CA ("UTC"). The joint venture was effected
pursuant to the formation of a limited liability company called Valley Fair
UTC LLC. The related transactions involved the disposition on June 2, 1999
of Los Cerritos Mall to Macerich Company for $188 million (including the
assumption of $95 million of debt), the acquisition on June 2, 1999 of a 50%
interest in Valley Fair from The Rouse Company for $157,750,000 (including
the assumption of $50 million of debt), the disposition on June 23, 1999 of
such interest in Valley Fair to Valley Fair UTC LLC for the same amount and
the disposition on June 23, 1999 of a 50% interest in UTC to Valley Fair UTC
LLC for $91 million (including the assumption of $40.1 million of debt).
The dispositions and acquisitions were made through separate limited
liability companies wholly-owned by Westfield America Limited Partnership,
the operating partnership through which the Company conducts substantially
all of its business. The amount of consideration was determined by arm's
length negotiations. The funds for the Company's acquisition of the 50%
interest in Valley Fair from The Rouse Company came from the sale of Los
Cerritos and the Company's unsecured corporate credit facility. The proceeds
from the sale of 50% interests in Valley Fair and UTC were used to reduce
borrowings on the Company's unsecured corporate credit facility.
Valley Fair is a regional shopping center with 1,140,000 square feet of
gross leasable area. It has 158 specialty stores and three anchors: two
Macy's stores and Nordstrom.
UTC is a super regional shopping center with 1,035,000 square feet of
gross leasable area. It has 162 specialty stores and four anchors: Macy's,
Nordstrom, Robinsons-May and Sears.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) The Company will file financial statements of the business acquired
within sixty days of the date of this filing.
(b) Pro Forma financial Information
Page Reference
Form 8-K
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(c) Exhibits.
Exhibit No. Description of Exhibit
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99.1 Copy of the Press Release, dated June 23, 1999, issued
by the Company, publicly announcing the activities
reported therein.
2
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The unaudited Pro Forma Condensed Consolidated Balance Sheet is presented
assuming the Company sells 100% of Los Cerritos Mall to the Macerich Company
for $188 million (including the assumption of $95 million of debt), purchases
the 50% of Valley Fair that it did not previously own from The Rouse Company
for $157 million (including the assumption of $150 million of debt) and sells
50% of Valley Fair to J.P. Morgan Investment Management, Inc. for the same
amount and also sells 50% of UTC for $51 million (including the assumption of
$40.1 million of debt) as of March 31, 1999.
The unaudited Pro Forma Condensed Consolidated Balance Sheet should be read
in conjunction with the Consolidated Financial Statements of Westfield
America, Inc. and Subsidiaries included in the Company's Annual report on
Form 10-K for the fiscal year ended December 31, 1998 and Quarterly Report on
form 10-Q for the year calendar quarter ended March 31, 1999. In the
Company's opinion, all adjustments necessary to reflect the effects of
purchase of Valley Fair and the sale of Los Cerritos, Valley Fair and UTC
have been made.
The unaudited Pro Forma Condensed Consolidated Balance Sheet is not
necessarily indicative of what the actual financial position of the Company
would have been at March 31, 1999 nor does it purport to present the future
financial position of the Company.
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WESTFIELD AMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEETS
MARCH 31, 1999
(UNAUDITED)
(IN THOUSANDS)
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<CAPTION>
<S><C>
Historical(a) Pro Forma Pro Forma
Adjustments Consolidated
ASSETS
Net investment in real estate......................................... $ 3,699,565 $(319,469) $3,380,096
Cash and cash equivalents............................................. 27,568 (639) 26,929
Restricted cash....................................................... 16,418 - 16,418
Accounts and notes receivable, net of allowance of $9,656............. 44,034 (1,336) 42,699
Deferred expenses and other assets, net............................... 32,684 (1,659) 32,025
Total assets......................................................... $3,820,269 $ 322,103) $3,498,166
LIABILITIES AND SHAREHOLDERS' EQUITY
</TABLE>
LIABILITIES:
Notes payable and revolving credit facility $2,665,120$(316,630) $2,348,490
Accounts payable and accrued expenses88,376(5,473)82,903
Distribution payable36,071-36,071
Total liabilities2,789,567(322,103)2,467,464
Minority interest36,065-
Series C and D preferred stock275,000-275,000
Common stock731-731
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The unaudited Pro Forma Consolidated Statements of Income are presented as if
the Company sells 100% of Los Cerritos Mall to the Macerich Company for $188
million (including the assumption of $95 million of debt), purchases the 50%
of Valley Fair that it did not previously own from The Rouse Company for $157
million (including the assumption of $150 million of debt) and sells 50% of
Valley Fair to J.P. Morgan Investment Management, Inc. for the same amount
and also sells 50% of UTC for $51 million (including the assumption of $40.1
million of debt) as of March 31, 1999.
The unaudited Pro Forma Consolidated Statements of Income should be read in
conjunction with the Consolidated Financial Statements of Westfield America,
Inc. and Subsidiaries included in the Company's Annual report on Form 10-K
for the fiscal year ended December 31, 1998 and Quarterly Report on form 10-Q
for the year calendar quarter ended March 31, 1999. In the Company's opinion,
all adjustments necessary to reflect the effects of purchase of Valley Fair
and the sale of Los Cerritos, Valley Fair and UTC have been made.
The unaudited Pro Forma Condensed Consolidated Statements of Income are not
necessarily indicative of what the actual results of operations of the
Company would have been assuming the transactions above had been consummated
as of the beginning of the year presented, nor do they purport to present the
future operations of the Company.
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WESTFIELD AMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Historical (a) Adjustments Consolidated
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<S> <C> <C> <C>
REVENUES:
Minimum rents $84,653 $(6,497) $78,156
Tenant recoveries 37,595 (3,135) 34,460
Percentage rents 3,101 (338) 2,763
Total revenue1 25,349 (9,970) 115,379
EXPENSES:
Operating 38,806 (2,885) 35,921
Management fees 2,478 (177) 2,301
Advisory fee 1,627 - 1,627
General and administrative 490 - 490
Depreciation and amortization 28,741 (2,520) 26,221
Total expenses 72,142 (5,582) 66,560
OPERATING INCOME53,207(4,388)48,819
INTEREST EXPENSE, net(49,144)3,056(46,088)
OTHER INCOME:
Equity in income of unconsolidated real estate partnerships 1,056 354 1,410
Interest and other income4,466-4,466
INCOME BEFORE MINORITY INTEREST:9,585(978)8,607
Minority interest (584)-(584)
NET INCOME$9,001$(978)$8,023
Net income allocable to preferred shares$8,625$8,625
Net income allocable to common shares376(602)
$9,001$8,023
EARNINGS PER SHARE:
Basic$0.00$0.00
Diluted$0.00$0.00
WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
Basic73,33873,338
Diluted74,32674,326
WESTFIELD AMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
For The Year Ended December 31, 1998
(Unaudited)
(In Thousands Except Per Share Amounts)
Historical (a)Pro Forma AdjustmentsPro Forma Consolidated
REVENUES:
Minimum rents$226,089$(7,192)$218,897
Tenant recoveries91,909(3,167)88,742
Percentage rents10,467(253)10,214
Total revenue 328,465(10,612) 317,853
EXPENSES:
Operating 97,359(2,809) 94,550
Management fees6,264(168)6,096
Advisory fee6,140-6,140
General and administrative1,519-1,519
Depreciation and amortization76,926(2,167)74,759
Total expenses188,208 (5,144)183,064
OPERATING INCOME140,257(5,468)134,789
INTEREST EXPENSE, net(106,852)3,288(103,564)
OTHER INCOME:
Equity in income of unconsolidated real estate partnerships5,9493,1059,054
Gain on sale of investments, net53,895-53,895
Interest and other income17,196(49) 17,147
INCOME BEFORE MINORITY INTEREST:110,445876111,321
Minority interest(4,257)-(4,257)
NET INCOME$106,188$876$107,064
Net income allocable to preferred shares$17,619$17,619
Net income allocable to common shares88,56989,445
$106,188$107,064
EARNINGS PER SHARE:
Basic$1.21 $1.22
Diluted$1.20$1.21
WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
Basic73,33473,334
Diluted73,90173,901
</TABLE>
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTFIELD AMERICA, INC.
Date: July 8, 1999 /s/ MARK A. STEFANEK
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Mark A. Stefanek
Chief Financial Officer and Treasurer
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INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
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99.1 Copy of the Press Release, dated June 23, 1999,
issued by the Company, publicly announcing the
activities reported therein.
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
JUNE 23, 1999
FOR MORE INFORMATION, CONTACT:
PATRICIA HEALY, WESTFIELD, (310) 445-2407
BRIDGET SMITH, J.P. MORGAN (212) 837-1200
WESTFIELD AMERICA, INC. (NYSE:WEA) PARTNERS WITH J.P. MORGAN
OF FLAGSHIP PROPERTIES
THE COMPANIES FORM JOINT VENTURE IN WESTFIELD SHOPPINGTOWNS VALLEY FAIR AND UTC
LOS ANGELES, CA, JUNE 23, 1999 B Westfield America, Inc. (NYSE:WEA) announced
today that it has formed an approximately $500 million joint venture with
J.P. Morgan Investment Management, Inc. for two of its premier regional
shopping malls: Westfield Shoppingtown Valley Fair, in San Jose, CA, and
Westfield Shoppingtown UTC (formerly known as University Towne Centre), in La
Jolla, CA. J.P. Morgan will acquire a 50 percent interest in the properties
for approximately $130 million in equity plus the assumption of approximately
$120 million in debt.
"When we sold Los Cerritos to Macerich and purchased the remaining 50 percent
interest in Valley Fair from the Rouse Company in May, it was our intention
at that time to bring in a joint venture partner to help underwrite Valley
Fair's redevelopment," said Peter Lowy, president, Westfield America. "This
joint venture not only will help us to finance the expansion currently
underway at Valley Fair, but also will enable us to reduce debt and free up
capital to finance the future growth of the company."
"We are excited about the opportunity to invest in two of the premier
shopping centers on the West Coast with a first-class regional mall operator
with an unmatched franchise in California," said Larry Ellman, member of J.P.
Morgan Investment Management's acquisition team responsible for the
transaction. "The centers are leaders in two markets which offer some of the
most attractive demographics in California. The expansion of Valley Fair
will further solidify its position in the Silicon Valley and should provide
the partnership with significant near-term value creation. We believe that
this transaction
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PAGE 2 B WESTFIELD AMERICA/J.P. MORGAN JOINT VENTURE
will provide our investors with attractive long-term returns and represents a
continuing expansion of our national retail investment program."
A $150 million redevelopment is underway at Westfield Shoppingtown Valley
Fair. The redevelopment will include a 225,000 square foot Nordstrom and
approximately 275,000 square feet of speciality stores. It will be completed
in stages with total project completion planned for fall 2001. The
construction of a new parking structure adding 1400 spaces was completed in
early June. Construction financing is being provided by CIBC World Markets
and HypoVereinsbank AG.
Westfield Shoppingtown Valley Fair is one of the premier regional shopping
malls in the country. It was opened in 1986 and has 1,140,000 square feet.
It is anchored by Nordstrom and two Macy's stores, and has 158 specialty
stores. Total sales in 1998 at Valley Fair were $522 million and the
specialty stores produced $648 per square foot of sales.
A super regional shopping mall with 1,035,000 square feet, Westfield
Shoppingtown UTC was opened in 1977 and is anchored by Nordstrom, Macy's,
Robinsons-May and Sears. It has 162 specialty stores. Total sales in 1998
at UTC were $309 million and the specialty stores produced $393 per square
foot of sales.
Westfield acquired both centers last year as part of its acquisition of the
TrizecHahn portfolio.
Westfield America, Inc. (NYSE:WEA), a real estate investment trust, is one of
the nation's leading owners of regional shopping centers. The company owns
interests in 37 major shopping centers, branded Westfield Shoppingtowns.
Westfield Shoppingtowns are home to more than 4,600 specialty stores, serve
10% of the U.S. population and comprise 34.6 million square feet of leasable
space in California, Colorado, Connecticut, Maryland, Missouri, New York,
North Carolina and Washington. For more information, visit the company's web
site at www.westsfieldamerica.com.
J.P. Morgan is a global financial firm that has built an international
reputation for excellence in serving the needs of corporations, governments,
institutions and individuals. The firm manages $321 billion in assets for
defined benefit and defined contribution plans, proprietary mutual funds,
third party mutual funds, and high net worth individuals. J.P. Morgan's
commitment to real estate is evidenced by its 28-year history of successful
investing and more than 70 real estate professionals who manage both private
and public
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PAGE 2 B WESTFIELD AMERICA/J.P. MORGAN JOINT VENTURE
real estate portfolios. Morgan's broad investment capabilities and framework
for analyzing opportunities in today's complex real estate markets provides
critical insights for its institutional clients. Real estate research at
Morgan draws on the work of economists, capital markets researchers, equity
analysts, and fixed income specialists with strategic investment decisions
being derived from all inputs.
With the exception of the historical information, the matters discussed in
this press release include forward-looking statements that involve risks and
uncertainties. Actual results may vary substantially as a result of a
variety of factors. Among the important factors that could cause actual
results to differ are the effects of competition; unforeseen construction
risks; changes in capital markets; trends in the retail industry; and
geo-graphic locations of shopping centers. These and other risk factors are
discussed in the company's recent filings with the Securities and Exchange
Commission on Forms 8-K, 10-Q and 10-K. The reader is directed to these
reports for a further discussion of important factors, which could cause
actual results to differ materially from those in the forward-looking
statements.
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