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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): November 17, 1998
WESTFIELD AMERICA, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MISSOURI 1-12923 43-0758627
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(State or Other Jurisdiction Commission file (IRS EMPLOYER IDENTIFICATION
of incorporation) number NUMBER)
11601 WILSHIRE BOULEVARD
12TH FLOOR
LOS ANGELES, CALIFORNIA 90025
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
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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 5. Other Events.
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On November 17, 1998, Westfield America, Inc. (the Company") acquired the
remaining 58% interest in Topanga Plaza that the Company did not already own.
The acquisition was made pursuant to a Partnership Interest Purchase Agreement,
dated as of November 17, 1998 between JMB Income Properties, LTD. XII and the
Company.
The Company paid a total consideration of approximately $86.0 million,
including the assumption of the Company's pro rata share of mortgage
indebtedness totaling approximately $33.0 million. The amount of consideration
was determined by arm's length negotiations. The funds for this acquisition came
from borrowings under a bridge facility provided by Union Bank of Switzerland.
Topanga Plaza is a 1,050,000 square foot super regional shopping center
located in Canoga Park, California. The center is anchored by Nordstrom,
Robinson's-May, Montgomery Ward and Sears and has 130 specialty stores.
Item 7. Financial Statements and Exhibits.
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(a) Financial statements of Topanga Plaza acquired pursuant to a Partnership
Interest Purchase Agreement Agreement, dated November 17, 1998 between JMB
Income Properties, LTD. XII and the Company.
Index to Statement of Certain Revenue and Expenses
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<TABLE>
<CAPTION>
Page Reference
Combined Statement of Revenue and Certain Expenses Form 8-K
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<S> <C>
Topanga Plaza
-- Independent Auditors' Report F-1
-- Statement of Certain Revenue and
Expenses for the year ended December 31, 1997 F-2
-- Notes to Combined Statement of Certain
Revenues and Expenses F-3
</TABLE>
(a) Exhibits.
Exhibit No. Description of Exhibit
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23 Consent of Independent Auditors -
Ernst & Young LLP
i
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Report of Independent Auditors
To the Board of Directors
Westfield America, Inc.
We have audited the accompanying statement of certain revenues and expenses of
Topanga Plaza for the year ended December 31, 1997. The above mentioned
statement is the responsibility of management. Our responsibility is to express
an opinion on the above mentioned statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the above mentioned statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the above mentioned statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the above
mentioned statement. We believe that our audit provides a reasonable basis for
our opinion.
The accompanying statement of certain revenues and expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission. As described in Note 1 to the statement of certain revenues
and expenses, certain revenues and expenses that would not be comparable to
those resulting from the proposed future operations of Topanga Plaza are
excluded, and the above mentioned statement is not intended to be a complete
presentation of the revenues and expenses of the property.
In our opinion, the statement referred to above presents fairly, in all material
respects, the certain revenues and expenses of Topanga Plaza for the year ended
December 31, 1997 in conformity with generally accepted accounting principles.
Los Angeles, California /s/ Ernst & Young LLP
January 19, 1998
F-1
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TOPANGA PLAZA
Statement of Certain Revenues and Expenses
(In Thousands)
For the year ended December 31, 1997
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Revenues
Minimum rents $10,547
Tenant recoveries 5,911
Percentage rent 184
Specialty leasing 1,035
Miscellaneous 39
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Total revenues 17,716
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Expenses
Operating expenses 4,300
Property taxes 754
Insurance 516
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Total expenses 5,570
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Excess of certain revenues over expenses $12,146
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</TABLE>
See accompanying notes to statement of certain revenues and expenses.
F-2
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TOPANGA PLAZA
Notes to Statement of Certain Revenues and Expenses
For the year ended December 31, 1997
1. Organization and Basis of Presentation
The accompanying statement of certain revenues and expenses includes the
accounts of Topanga Plaza (the "Property"), a super-regional shopping center
in Canoga Park, California. In November 1998, Westfield America, Inc. (WEA)
purchased the 58% interest in the shopping center it did not already own
from its joint venture partner, JMB Income Properties, Ltd. - XII.
The accompanying statement of certain revenues and expenses is presented on
the accrual basis of accounting in conformity with Rule 3-14 of Regulation
S-X of the Securities and Exchange Commission and, accordingly, is not
representative of the actual results of operations for the period presented
because certain revenues and expenses, which may not be comparable to those
expected to be experienced by WEA in the proposed future operations of
Topanga Plaza, have been excluded, including interest income, straight-lined
rents, earthquake recovery revenues, management fees, income taxes, interest
expense and depreciation and amortization.
An audited statement is being presented for the most recent fiscal year
available instead of the three most recent years based on the following: (i)
the property was acquired from an unaffiliated party and (ii) based on WEA's
management's prior operating experience with this Property, the Company is
not aware of any material factors that would cause this financial
information not to be necessarily indicative of future operating results
other than the factors specifically omitted by WEA as described above.
2. Summary of Significant Accounting Policies
Revenue Recognition
Shopping center space is generally leased to specialty retailers under
leases which are accounted for as operating leases. Minimum rent revenues
are recognized on an accrual basis over the respective lease term.
Percentage rents are recognized on an accrual basis as earned. Recoveries
from retailers are recognized as income during the period the applicable
costs are incurred.
F-3
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TOPANGA PLAZA
Notes to Statement of Certain Revenues and Expenses, Continued
2. Summary of Significant Accounting Policies, continued:
Bad Debts
Management periodically evaluates the collectibility of amounts billed to
retailers and accrued recoveries from retailers and adjusts the allowance for
doubtful accounts to reflect the amounts estimated to be uncollectible.
Amounts determined to be uncollectible are included in minimum rents.
Maintenance and Repairs
Maintenance and repairs are charged to operations as incurred.
Use of Estimates
The preparation of the statement of certain revenues and expenses in
accordance with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of certain
revenues and expenses during the reporting periods. Actual results could
differ from those estimates.
3. Property Rentals
Future minimum rental revenues under noncancelable operating leases as of
December 31, 1997, are as follows:
<TABLE>
<S> <C>
1998 $10,470
1999 10,277
2000 9,902
2001 9,646
2002 9,024
Thereafter 25,281
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$74,600
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</TABLE>
These amounts do not include percentage rentals that may be received under
certain leases on the basis of tenant sales in excess of stipulated minimums.
F-4
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TOPANGA PLAZA
Notes to Statement of Certain Revenues and Expenses, Continued
4. Commitments and Contingencies
Topanga Plaza is, from time to time, involved in various claims and legal
actions arising in the ordinary course of business. Although the final
outcome of these legal matters cannot be determined, it is management's
opinion, based in part on advice of legal counsel, that the final resolution
of these matters will not have a material adverse effect on the results of
operations of Topanga Plaza.
5. Transactions with Related Parties
WEA subcontracts its management obligations under the existing management
and leasing agreements to Westfield Management Company ("WMC"). WMC is owned
indirectly by Westfield Holdings Limited, which has an ownership interest in
WEA.
WMC is reimbursed for mall related overhead and payroll costs recoverable
from tenants in accordance with their leases. Reimbursements to WMC of
recoverable property operating costs for the years ended December 31, 1997
totaled $1,087.
F-5
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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.
WESTFIELD AMERICA, INC.
Date: February 3, 1999 /s/ Irv Hepner
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Irv Hepner
Secretary
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INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
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23 Consent of Independent Accountants - Ernst & Young LLP.
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EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration statement (No.
333-52977) on Form S-3 of Westfield America, Inc. of our report dated January
19, 1998, with respect to the statement of certain revenues and expenses of
Topanga Plaza for the year ended December 31, 1997, which reports appears in the
Form 8-K of Westfield America, Inc. dated February 3, 1999, filed with the
Securities and Exchange Commission.
/s/Ernst & Young LLP
Los Angeles, California
February 3, 1999
