<PAGE> 1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): Commission File Number:
June 30, 1997 1-12994
THE MILLS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware 52-1802283
-------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1300 Wilson Boulevard, Suite 400, Arlington, Virginia 22209
-----------------------------------------------------------
(Address of principal executive offices - zip code)
(703) 526-5000
--------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Not Applicable
----------------
- --------------------------------------------------------------------------------
(former name or former address, if changed since last report)
<PAGE> 2
THE MILLS CORPORATION
FORM 8-K
INDEX
ITEM 5. OTHER EVENTS
The Registrant is making available additional operational information
concerning the Registrant and the properties owned or managed by it as
of June 30, 1997, in the form of a Supplemental Information Package,
a copy of which is included as an exhibit to this filing.
7. FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements
NONE.
Exhibits:
<TABLE>
<CAPTION>
Page Number in
Exhibit No. Description Filing
- ------------ ----------- ------
<S> <C> <C>
99 Supplemental Information as 4
of June 30, 1997
</TABLE>
<PAGE> 3
SIGNATURES
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 thereunto duly authorized.
Dated: November 13, 1997
THE MILLS CORPORATION
By: /s/ KENNETH R. PARENT
------------------------
Kenneth R. Parent
Senior Vice President,
Chief Financial Officer and
Treasurer
(Principal Financial and
Accounting Officer)
<PAGE> 1
THE MILLS CORPORATION
SUPPLEMENTAL INFORMATION
TABLE OF CONTENTS
AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
INFORMATION PAGE
------------ ----
<S> <C>
Overview 5-6
Summary of Properties 7-8
Supplemental Financial Data 9
Property Operating Income 10-13
Occupancy Analysis 14
Lease Expiration Schedule 15-16
Rental Rate Analysis 17
Summary of Outstanding Consolidated Indebtedness 18
Mills Gross Sales 19
Capital Expenditures 20-22
</TABLE>
<PAGE> 2
THE MILLS CORPORATION
OVERVIEW
THE COMPANY
The Mills Corporation (the "Company") is a fully integrated, self-managed real
estate investment trust ("REIT") .
The Company conducts all of its business through The Mills Limited
Partnership ("the Operating Partnership"), in which it owns, as of June 30,
1997, a 1% interest as the sole general partner and a 57.9% interest as a
limited partner. The Company, through the Operating Partnership, is engaged
primarily in the ownership, development, redevelopment, leasing, acquisition,
expansion, and management of super-regional, value and entertainment-oriented
outlet malls (the "Mills") and community shopping centers (the "Community
Centers"). As of June 30, 1997, the Operating Partnership owns or holds an
interest in the following operating properties:
<TABLE>
<S> <C>
Mills Location
----- --------
Franklin Mills Philadelphia, PA
Gurnee Mills Gurnee, IL (Chicago)
Potomac Mills Woodbridge, VA (Washington, DC)
Sawgrass Mills Sunrise, FL (Ft. Lauderdale)
Ontario Mills Ontario, CA (Los Angeles)
Community Centers Location
----------------- --------
Butterfield Plaza Downers Grove, IL
Coopers Plaza Voorhees, NJ
Crosswinds Center St. Petersburg, FL
Fashion Place Columbia, SC
Germantown Commons Shopping Center Germantown, MD
Gwinnett Marketfair Duluth, GA
Liberty Plaza Philadelphia, PA
Montgomery Village Off-Price Center Gaithersburg, MD
Mount Prospect Plaza Mount Prospect, IL
West Falls Church Outlet Center Falls Church, VA
Western Hills Plaza Cincinnati, OH
</TABLE>
In addition to the operating properties, the Company is actively involved in
the development of a number of new Mills, including Grapevine Mills (Dallas,
TX), Arizona Mills (Tempe, AZ), Mills City at Orange (Orange, California),
Katy Mills (Houston, TX), Meadowland Mills (Carlstadt, NJ), and Concord Mills
(Charlotte, NC).
PURPOSE OF SUPPLEMENTAL INFORMATION PACKAGE
The purpose of this Supplemental Information Package is to provide supplemental
information regarding (1) certain operational information and (2) debt
information as of June 30, 1997 for the Company and Operating Partnership.
5
<PAGE> 3
THE MILLS CORPORATION
OVERVIEW CONTINUED
CAUTIONARY STATEMENT
Certain matters discussed in this Form 8-K and the information incorporated by
reference herein contain "forward-looking statements" for purposes of Section
27A of the Securities Act of 1933, as amended (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1933, as amended (the "Exchange
Act") relating to, without limitation, future economic performance, plans and
objectives of management for future operations and projections of revenue and
other financial items, demographic projections and federal income tax
considerations, which can be identified by the use of forward-looking
terminology such as "may", "will", "except", "anticipate", "estimate" or
"continue" or the negative thereof or other variations thereon or comparable
terminology. Such forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
described in such forward-looking statements.
6
<PAGE> 4
THE MILLS CORPORATION
SUMMARY OF PROPERTIES
The following tables sets forth certain information with respect to the
Properties and the Mills under development as of June 30, 1997:
EXISTING PROPERTIES
<TABLE>
<CAPTION>
Approx.
Metropolitan Year GLA Percent
Name/Location Area Serviced Opened (Sq. Ft.) (1) Leased (2)
------------- ------------- ------ ------------- ----------
<S> <C> <C> <C>
MILLS
Potomac Mills........... Washington D.C./ 1985/1986 1,639,632 96%
Woodbridge, VA Baltimore
Franklin Mills ............ Philadelphia/ 1989 1,661,279 93%
Philadelphia, PA Wilmington
Sawgrass Mills........ Fort Lauderdale, FL/ 1990 1,878,577 97%
Sunrise, FL Miami/Palm Beach
Gurnee Mills............. Chicago/Milwaukee 1991 1,493,506 92%
Gurnee, IL
Ontario Mills............ Los Angeles 1996 1,272,666 (4) 96%
Ontario, CA
------------
MILLS TOTALS/WEIGHTED AVERAGES..................... 7,945,660 95%
============
COMMUNITY CENTERS (11 CENTERS) 2,205,985 87%
============
</TABLE>
<TABLE>
<CAPTION>
1996
No. of Speciality
Anchor Store Sales
Name/Location Stores (3) Per Sq. Ft.
---------------------- ---------- -----------
<S> <C> <C>
MILLS
Potomac Mills........... 17 $ 289
Woodbridge, VA
Franklin Mills ............ 17 254
Philadelphia, PA
Sawgrass Mills........ 21 407
Sunrise, FL
Gurnee Mills............. 14 252
Gurnee, IL
Ontario Mills............ 15 N/A (5)
Ontario, CA
--------------
MILLS TOTALS/WEIGHTED AVERAGES..................... 84 $ 307 (5)
==============
COMMUNITY CENTERS (11 CENTERS) 30 184
==============
</TABLE>
(1) Includes 946,182 square feet of GLA owned by certain anchor store tenant as
follows: Potomac Mills-80,000 square feet of GLA; Franklin Mills-208,602
square feet of GLA; Sawgrass Mills-281,774 square feet of GLA; Gurnee
Mills-250,806 square feet of GLA, and Ontario Mills-125,000 square feet of
GLA.
(2) Percent Leased is defined as all space leased and for which rent is being
paid as of June 30, 1997, excluding tenants with leases having a term of
less than 1 year.
(3) Anchor stores include all stores occupying more than 20,000 square feet and
tenant owned anchors described in footnote (1).
(4) Ontario Mills will contain approximately 1.7 million square feet of GLA,
including GLA owned by certain anchor store tenants, upon completion.
(5) 1996 Sales Per Square Foot information is not available for Ontario Mills
which had not completed its initial lease-up as of December 31, 1996.
7
<PAGE> 5
THE MILLS CORPORATION
SUMMARY OF PROPERTIES
MILLS UNDER DEVELOPMENT
<TABLE>
<CAPTION>
Actual/
Anticipated Anticipated Approx.
Metropolitan Construction Opening GLA Company
Name/Location Area Serviced Start Date (1) Date (1) (Sq. Ft.) Ownership
----------------- ------------- ----------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Grapevine Mills Dallas/Fort Worth 3rd Q '96 4th Q '97 1,500,000 37.5%
Grapevine, TX
Arizona Mills Phoenix 3rd Q '96 4th Q '97 1,200,000 36.8%
Tempe, AZ
Mills City at Orange Los Angeles/ 2nd Q '97 4th Q '98 800,000 50.0%
Orange, CA Orange County
Houston Mills Houston 1997 1999 1,600,000 75.0% (3)
Houston, TX
Concord Mills Charlotte 1997 1999 1,400,000 (5)
Concord, NC
Meadowlands Mills New York City/ 1999 (5) 1,700,000 (5)
Carlstadt, NJ Northern New Jersey
</TABLE>
<TABLE>
<CAPTION>
Estimated Anchor
Aggregate Store
Project Tenant
Name/Location Cost (2) Commitments
----------------- ------------- --------------
(millions)
<S> <C> <C>
Grapevine Mills $ 216 19
Grapevine, TX
Arizona Mills 188 13
Tempe, AZ
Mills City at Orange 181 7
Orange, CA
Houston Mills 200 N/A (4)
Houston, TX
Concord Mills 220 N/A (4)
Concord, NC
Meadowlands Mills (5) 18
Carlstadt, NJ
</TABLE>
(1) Anticipated Construction Start Dates and Opening Dates may be subject to
adjustment as a result of factors inherent in the development process, some
of which may not be under the direct control of the Company.
(2) Estimated Aggregate Project Cost is based on the Company's best estimate of
the underlying components, many of which may not be under the direct
control of the Company.
(3) Proposed ownership structure.
(4) Leasing activity has not yet commenced on these projects.
(5) The opening dates, ownership structure and budgets for these properties
have not yet been determined.
8
<PAGE> 6
THE MILLS CORPORATION
SUPPLEMENTAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AND PER SQUARE FOOT DATA)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Minimum rent $ 23,818 $ 23,434 $ 47,018 $ 46,332
Percentage rent 1,003 1,084 2,122 2,305
Recoveries from tenants 11,422 11,378 22,972 22,919
Other property revenue 1,355 1,176 2,632 2,437
Fee income 1,846 956 4,361 1,787
Interest income 1,072 739 1,635 1,193
---------- ---------- ---------- ----------
Total revenues 40,516 38,767 80,740 76,973
EXPENSES:
Recoverable from tenants 10,290 10,335 20,689 20,664
Other operating 1,878 1,820 3,201 3,528
General and administrative 1,991 2,081 4,237 4,189
Interest expense 9,995 11,130 22,044 22,719
Depreciation and amortization 8,361 9,547 16,847 19,596
---------- ---------- ---------- ----------
Total expenses 32,515 34,913 67,018 70,696
Other income (40) 478 203 2,216
Equity in earnings of unconsolidated joint ventures 888 - 1,001 -
---------- ---------- ---------- ----------
Income before extraordinary item and minority interest 8,849 4,332 14,926 8,493
Extraordinary loss on debt extinguishment (8,060) (153) (8,060) (983)
---------- ---------- ---------- ----------
Income before minority interest 789 4,179 6,866 7,510
Minority interest (328) (2,053) (3,039) (3,690)
---------- ---------- ---------- ----------
Net income $ 461 $ 2,126 $ 3,827 $ 3,820
========== ========== ========== ==========
Income per common share before extraordinary item $ 0.23 $ 0.13 $ 0.41 $ 0.26
========== ========== ========== ==========
Net income per common share $ 0.02 $ 0.13 $ 0.19 $ 0.23
========== ========== ========== ==========
Funds From Operations
Income before extraordinary item and minority interest $ 8,849 $ 4,332 $ 14,926 $ 8,493
Adjustments:
Add: Depreciation and amortization of real estate assets 7,742 8,156 15,447 16,862
Add: Loss on Sale of furniture, fixtures, and equipment - 776 - 776
Add: Real estate depreciation and amortization 924 - 1,646 -
of unconsolidated affiliates
Add: Extraordinary loss on debt extinguishment - - 397 -
of unconsolidated affiliates
---------- ---------- ---------- ----------
Funds from operations $ 17,515 $ 13,264 $ 32,416 $ 26,131
========== ========== ========== ==========
Funds From Operations per Share $ 0.45 $ 0.40 $ 0.88 $ 0.79
Weighted average shares and equivalent shares 22,950 16,906 20,541 16,906
Weighted average units and equivalent units 39,245 33,238 36,853 33,238
</TABLE>
(1) The company generally considers Funds from Operations to be a widely used
and appropriate measure of performance for an equity REIT which provides
a relevant basis for comparison among REITs. Funds from Operations (FFO)
as defined by the National Association of Real Estate Investment Trusts
(NAREIT) means income (loss) before minority interest (computed in
accordance with generally accepted accounting principles (GAAP))
excluding gains (or losses) from debt restructuring and sale of property,
plus real estate related depreciation and amortization and after
adjustments for unconsolidated partnerships and joint ventures. FFO is
presented to assist investors in analyzing performance of the Company.
The Company's method of calculating FFO may be different from methods
used by other REIT's, and, accordingly, may not be comparable to such
other REIT's. FFO (i) does not represent cash flow from operations as
defined by GAAP, (ii) is not indicative of cash available to fund cash
flow needs and liquidity, including its ability to make distributions and
(iii) should not be considered as an alternative to net income for
purposes of evaluating the Company's operating performance.
9
<PAGE> 7
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH THE PROPERTY OPERATING INCOME FOR EACH OF THE
MILLS, MAINSTREET (THE COMPANY'S PUSH CART PROGRAM) AND THE COMMUNITY CENTERS.
THE PURPOSE OF THIS TABLE IS TO PROVIDE DETAILS ABOUT CERTAIN LINE ITEMS WITHIN
THE SUPPLEMENTAL FINANCIAL DATA SHOWN ON PAGE 8 AND IS NOT INTENDED TO BE A
REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE SIX MONTHS ENDED JUNE 30, 1997
WHOLLY OWNED PROPERTIES
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
RENTAL REVENUES:
Minimum rent $10,284 $7,814 $12,138 $7,533 $650 $8,599 $47,018
Percentage rent 190 204 1,210 123 57 338 2,122
Recoveries from tenants 3,979 5,438 6,528 4,448 24 2,555 22,972
Other revenue 341 454 1,046 558 184 49 2,632
--------------------------------------------------------------------------------------------
Total rental revenues 14,794 13,910 20,922 12,662 915 11,541 74,744
PROPERTY OPERATING COSTS:
Recoverable from tenants 3,426 4,669 5,953 4,028 0 2,613 20,689
Other operating 373 570 398 654 815 391 3,201
--------------------------------------------------------------------------------------------
Total property operating costs 3,799 5,239 6,351 4,682 815 3,004 23,890
--------------------------------------------------------------------------------------------
PROPERTY OPERATING INCOME $10,995 $8,671 $14,571 $7,980 $100 $8,537 $50,854
============================================================================================
</TABLE>
UNCONSOLIDATED JOINT VENTURES
<TABLE>
<CAPTION>
Ontario
-------
<S> <C>
RENTAL REVENUES:
Minimum rent $8,341
Percentage rent 460
Recoveries from tenants 3,502
Other revenue 784
-------------
Total rental revenues 13,087
PROPERTY OPERATING COSTS:
Recoverable from tenants 3,591
Other operating 711
-------------
Total property operating costs 4,302
-------------
PROPERTY OPERATING INCOME $8,785
=============
Mills Share (1) $3,599
=============
</TABLE>
(1) Based on Mills share of distributable cash flow for the six months ended
June 30, 1997, excluding management fees.
10
<PAGE> 8
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH THE PROPERTY OPERATING INCOME FOR EACH OF THE
MILLS, MAINSTREET (THE COMPANY'S PUSH CART PROGRAM) AND THE COMMUNITY CENTERS.
THE PURPOSE OF THIS TABLE IS TO PROVIDE DETAILS ABOUT CERTAIN LINE ITEMS WITHIN
THE SUPPLEMENTAL FINANCIAL DATA SHOWN ON PAGE 8 AND IS NOT INTENDED TO BE A
REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
RENTAL REVENUES:
Minimum rent $10,004 $7,911 $11,607 $7,168 $599 $9,043 $46,332
Percentage rent 278 159 1,160 360 49 299 2,305
Recoveries from tenants 4,040 5,394 6,431 4,207 20 2,827 22,919
Other revenue 327 341 952 582 152 83 2,437
-----------------------------------------------------------------------------------------
Total rental revenues 14,649 13,805 20,150 12,317 820 12,252 73,993
PROPERTY OPERATING COSTS:
Recoverable from tenants 3,540 4,550 5,845 3,574 0 3,155 20,664
Other operating 642 816 216 684 741 429 3,528
-----------------------------------------------------------------------------------------
Total property operating costs 4,182 5,366 6,061 4,258 741 3,584 24,192
-----------------------------------------------------------------------------------------
PROPERTY OPERATING INCOME $10,467 $8,439 $14,089 $8,059 $79 $8,668 $49,801
=========================================================================================
</TABLE>
11
<PAGE> 9
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH THE PROPERTY OPERATING INCOME FOR EACH OF THE
MILLS, MAINSTREET (THE COMPANY'S PUSH CART PROGRAM) AND THE COMMUNITY CENTERS.
THE PURPOSE OF THIS TABLE IS TO PROVIDE DETAILS ABOUT CERTAIN LINE ITEMS WITHIN
THE SUPPLEMENTAL FINANCIAL DATA SHOWN ON PAGE 8 AND IS NOT INTENDED TO BE A
REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE THREE MONTHS ENDED JUNE 30, 1997
WHOLLY OWNED PROPERTIES
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
RENTAL REVENUES:
Minimum rent $5,133 $3,961 $6,221 $3,799 $359 $4,345 $23,818
Percentage rent 74 82 589 53 36 169 1,003
Recoveries from tenants 1,977 2,689 3,234 2,225 13 1,284 11,422
Other revenue 171 210 538 302 102 32 1,355
--------------------------------------------------------------------------------------------
Total rental revenues 7,355 6,942 10,582 6,379 510 5,830 37,598
PROPERTY OPERATING COSTS:
Recoverable from tenants 1,704 2,355 2,933 2,008 - 1,290 10,290
Other operating 170 478 267 309 428 226 1,878
--------------------------------------------------------------------------------------------
Total property operating costs 1,874 2,833 3,200 2,317 428 1,516 12,168
--------------------------------------------------------------------------------------------
PROPERTY OPERATING INCOME $5,481 $4,109 $7,382 $4,062 $82 $4,314 $25,430
============================================================================================
</TABLE>
UNCONSOLIDATED JOINT VENTURES
<TABLE>
<CAPTION>
Ontario
-------
<S> <C>
RENTAL REVENUES:
Minimum rent $4,350
Percentage rent 334
Recoveries from tenants 1,808
Other revenue 397
-------------
Total rental revenues 6,889
PROPERTY OPERATING COSTS:
Recoverable from tenants 1,820
Other operating 469
-------------
Total property operating costs 2,289
-------------
PROPERTY OPERATING INCOME $4,600
=============
Mills Share (1) $1,871
=============
</TABLE>
(1) Based on Mills share of distributable cash flow for the quarter, excluding
management fees.
12
<PAGE> 10
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH THE PROPERTY OPERATING INCOME FOR EACH OF THE
MILLS, MAINSTREET (THE COMPANY'S PUSH CART PROGRAM) AND THE COMMUNITY CENTERS.
THE PURPOSE OF THIS TABLE IS TO PROVIDE DETAILS ABOUT CERTAIN LINE ITEMS WITHIN
THE SUPPLEMENTAL FINANCIAL DATA SHOWN ON PAGE 8 AND IS NOT INTENDED TO BE A
REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE THREE MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
RENTAL REVENUES:
Minimum rent $5,170 $3,924 $5,822 $3,612 $324 $4,582 $23,434
Percentage rent 149 25 585 145 30 150 1,084
Recoveries from tenants 2,005 2,663 3,159 2,113 12 1,426 11,378
Other revenue 120 135 508 287 84 42 1,176
------------------------------------------------------------------------------------------
Total rental revenues 7,444 6,747 10,074 6,157 450 6,200 37,072
PROPERTY OPERATING COSTS:
Recoverable from tenants 1,777 2,340 2,853 1,768 - 1,597 10,335
Other operating 354 462 47 373 371 213 1,820
------------------------------------------------------------------------------------------
Total property operating costs 2,131 2,802 2,900 2,141 371 1,810 12,155
------------------------------------------------------------------------------------------
PROPERTY OPERATING INCOME $5,313 $3,945 $7,174 $4,016 $79 $4,390 $24,917
==========================================================================================
</TABLE>
13
<PAGE> 11
THE MILLS CORPORATION
OCCUPANCY ANALYSIS
<TABLE>
<CAPTION>
GROSS LEASED & OCCUPIED AREA (S.F.) (1) GROSS LEASED & OCCUPIED AREA, NET OF ANCHORS (S.F) (2)
GLA Occupied (3) Total Small GLA Occupied (3)
Project Total GLA at 6/97 % Shop GLA at 6/97 %
- ------- --------- ------- - -------- ------- -
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills 1,639,632 1,579,536 96.33% 633,302 573,206 90.51%
Franklin Mills 1,661,279 1,539,087 92.64% 607,781 520,507 85.64%
Sawgrass Mills 1,878,577 1,821,857 96.98% 684,894 648,174 94.64%
Gurnee Mills 1,493,506 1,373,858 91.99% 634,399 549,010 86.54%
-------------------------------------------------- -------------------------------------------------
Total Mills 6,672,994 6,314,338 94.63% 2,560,376 2,290,897 89.48%
Butterfield 114,610 96,240 83.97% 72,677 54,307 74.72%
Coopers Crossing 173,509 173,509 100.00% 14,953 14,953 100.00%
Crosswinds 144,119 137,023 95.08% 23,298 16,202 69.54%
Fashion Place 147,950 114,068 77.10% 74,692 40,810 54.64%
Germantown 177,097 167,101 94.36% 130,341 120,345 92.33%
Gwinnett 194,374 191,674 98.61% 96,827 94,127 97.21%
Liberty Plaza 301,138 136,488 45.32% 20,965 5,553 26.49%
Montgomery Village 117,391 102,829 87.60% 80,986 66,424 82.02%
Mt. Prospect 298,477 284,179 95.21% 125,882 111,584 88.64%
West Falls Church 87,824 83,410 94.97% 47,743 43,329 90.75%
Western Hills 449,496 435,111 96.80% 134,980 120,595 89.34%
-------------------------------------------------- -------------------------------------------------
2,205,985 1,921,632 87.11% 823,344 688,229 83.59%
-------------------------------------------------- -------------------------------------------------
Total Wholly Owned 8,878,979 8,235,970 92.76% 3,383,720 2,979,126 88.04%
================================================== =================================================
Joint Ventures
Ontario Mills 1,272,666 1,219,722 95.84% 529,045 476,101 89.99%
-------------------------------------------------- -------------------------------------------------
Total Joint Ventures 1,272,666 1,219,722 95.84% 529,045 476,101 89.99%
================================================== =================================================
Total Wholly Owned
and Joint Venture 10,151,645 9,455,692 93.14% 3,912,765 3,455,227 88.31%
================================================== =================================================
</TABLE>
<TABLE>
<CAPTION>
TOTAL VACANT S.F.
Vacancies
Project Anchor Small Shop Total
- ------- ------ ---------- -----
<S> <C> <C> <C>
Potomac Mills 0 60,096 60,096
Franklin Mills 34,918 87,274 122,192
Sawgrass Mills 20,000 36,720 56,720
Gurnee Mills 34,259 85,389 119,648
--------------------------------------------------
Total Mills 89,177 269,479 358,656
Butterfield 0 18,370 18,370
Coopers Crossing 0 0 0
Crosswinds 0 7,096 7,096
Fashion Place 0 33,882 33,882
Germantown 0 9,996 9,996
Gwinnett 0 2,700 2,700
Liberty Plaza 149,238 15,412 164,650
Montgomery Village 0 14,562 14,562
Mt. Prospect 0 14,298 14,298
West Falls Church 0 4,414 4,414
Western Hills 0 14,385 14,385
--------------------------------------------------
149,238 135,115 284,353
--------------------------------------------------
Total Wholly Owned 238,415 404,594 643,009
==================================================
Joint Ventures
Ontario Mills 0 52,944 52,944
--------------------------------------------------
Total Joint Ventures 0 52,944 52,944
==================================================
Total Wholly Owned
and Joint Venture 238,415 457,538 695,953
==================================================
</TABLE>
(1) Includes 946,182 square feet of GLA owned by certain anchor store tenants
as follows: Potomac Mills-80,000 square feet of GLA; Franklin
Mills-208,602 square feet of GLA; Sawgrass Mills-281,774 square feet of
GLA; Gurnee Mills-250,806 square feet of GLA, and Ontario Mills-125,000
square feet of GLA. A ground lease at Franklin Mills of 152,370 square
feet is also included.
(2) Anchor stores include all stores occupying more than 20,000 square feet.
(3) GLA occupied is defined as all space leased and for which rent is being
paid as of June 30, 1997, excluding tenants with leases that have a term
of less than 1 year.
14
<PAGE> 12
THE MILLS CORPORATION
LEASE EXPIRATION SCHEDULE
The following table shows lease expirations assuming that none of the tenants
exercise renewal options. Except as described in footnote (1), the minimum rent
is the monthly contractual minimum rent of the expiring leases as of June 30,
1997 multiplied by 12.
<TABLE>
<CAPTION>
1997 (1) 1998
Annualized Annualized
Sq Ft Min. Rent psf Sq Ft Min. Rent psf
----- --------- --- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills:
Anchors - $ - $ - - $ - $ -
Majors - - - 37,960 341,640 9.00
Specialty 56,745 1,095,358 19.30 78,632 2,299,246 29.24
Food Court - - - 1,567 85,208 54.38
---------------------------------------- ---------------------------------------
56,745 $ 1,095,358 $ 19.30 118,159 $ 2,726,094 $ 23.07
Franklin Mills:
Anchors - $ - $ - - $ - $ -
Majors - - - 48,381 222,069 4.59
Specialty 62,179 958,456 15.41 39,724 749,846 18.88
Food Court - - - - - -
---------------------------------------- ---------------------------------------
62,179 $ 958,456 $ 15.41 88,105 $ 971,915 $ 11.03
Sawgrass Mills:
Anchors - $ - $ - - $ - $ -
Majors - - - - - -
Specialty 16,577 471,883 28.47 41,525 985,139 23.72
Food Court - - - - - -
---------------------------------------- ---------------------------------------
16,577 $ 471,883 $ 28.47 41,525 $ 985,139 $ 23.72
Gurnee Mills:
Anchors - $ - $ - - $ - $ -
Majors - - - 40,752 262,850 6.45
Specialty 65,054 1,080,476 16.61 89,040 1,481,029 16.63
Food Court - - - - - -
---------------------------------------- ---------------------------------------
65,054 $ 1,080,476 $ 16.61 129,792 $ 1,743,879 $ 13.44
Total Mills without Ontario:
Anchors - $ - $ - - $ - $ -
Majors - - - 127,093 826,559 6.50
Specialty 200,555 3,606,173 17.98 248,921 5,515,260 22.16
Food Court - - - 1,567 85,208 54.38
---------------------------------------- ---------------------------------------
200,555 $ 3,606,173 $ 17.98 377,581 $ 6,427,027 $ 17.02
======================================== =======================================
</TABLE>
<TABLE>
<CAPTION>
1999 After 1999
Annualized Annualized
Sq Ft Min. Rent psf Sq Ft Min. Rent psf
----- --------- --- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills:
Anchors - $ - $ - 601,385 $ 3,383,509 $ 5.63
Majors 42,212 316,590 7.50 244,773 2,179,822 8.91
Specialty 69,284 1,417,491 20.46 359,070 8,570,382 23.87
Food Court - - - 7,908 498,337 63.02
----------------------------------------- ---------------------------------------
111,496 $ 1,734,081 $ 15.55 1,213,136 $ 14,632,050 $ 12.06
Franklin Mills:
Anchors 100,200 $ 547,725 $ 5.47 259,766 $ 1,415,049 $ 5.45
Majors 40,232 370,134 9.20 209,029 2,068,054 9.89
Specialty 89,093 2,097,257 23.54 318,061 6,306,386 19.83
Food Court 6,229 365,562 58.69 5,221 209,976 40.22
----------------------------------------- ---------------------------------------
235,754 $ 3,380,678 $ 14.34 792,077 $ 9,999,465 $ 12.62
Sawgrass Mills:
Anchors - $ - $ - 632,480 $ 4,021,417 $ 6.36
Majors 28,152 422,280 15.00 231,277 2,683,534 11.60
Specialty 10,958 387,195 35.33 552,377 13,110,709 23.74
Food Court 1,206 77,500 64.26 25,531 1,279,387 50.11
----------------------------------------- ---------------------------------------
40,316 $ 886,975 $ 22.00 1,441,665 $ 21,095,047 $ 14.63
Gurnee Mills:
Anchors - $ - $ - 397,784 $ 2,392,255 $ 6.01
Majors - - - 135,506 1,492,631 11.02
Specialty 52,521 1,001,068 19.06 325,945 6,271,322 19.24
Food Court - - - 16,450 917,483 55.77
----------------------------------------- ---------------------------------------
52,521 $ 1,001,068 $ 19.06 875,685 $ 11,073,691 $ 12.65
Total Mills without Ontario:
Anchors 100,200 $ 547,725 $ 5.47 1,891,415 $ 11,212,230 $ 5.93
Majors 110,596 1,109,004 10.03 820,585 8,424,041 10.27
Specialty 221,856 4,903,011 22.10 1,555,453 34,258,799 22.02
Food Court 7,435 443,062 59.59 55,110 2,905,183 52.72
----------------------------------------- ---------------------------------------
440,087 $ 7,002,802 $ 15.91 4,322,563 $ 56,800,253 $ 13.14
========================================= =======================================
</TABLE>
<TABLE>
<CAPTION>
Total
Annualized
Sq Ft Min. Rent psf
----- --------- ---
<S> <C> <C> <C>
Potomac Mills:
Anchors 601,385 $ 3,383,509 $ 5.63
Majors 324,945 2,838,052 8.73
Specialty 563,731 13,382,477 23.74
Food Court 9,475 583,545 61.59
------------------------------------------
1,499,536 $ 20,187,583 $ 13.46
Franklin Mills:
Anchors 359,966 $ 1,962,774 $ 5.45
Majors 297,642 2,660,257 8.94
Specialty 509,057 10,111,945 19.86
Food Court 11,450 575,538 50.27
------------------------------------------
1,178,115 $ 15,310,514 $ 13.00
Sawgrass Mills:
Anchors 632,480 $ 4,021,417 $ 6.36
Majors 259,429 3,105,814 11.97
Specialty 621,437 14,954,926 24.07
Food Court 26,737 1,356,887 50.75
------------------------------------------
1,540,083 $ 23,439,044 $ 15.22
Gurnee Mills:
Anchors 397,784 $ 2,392,255 $ 6.01
Majors 176,258 1,755,481 9.96
Specialty 532,560 9,833,895 18.47
Food Court 16,450 917,483 55.77
------------------------------------------
1,123,052 $ 14,899,114 $ 13.27
Total Mills without Ontario:
Anchors 1,991,615 $ 11,759,955 $ 5.90
Majors 1,058,274 10,359,604 9.79
Specialty 2,226,785 48,283,243 21.68
Food Court 64,112 3,433,453 53.55
------------------------------------------
5,340,786 $ 73,836,255 $ 13.82
==========================================
</TABLE>
(1) The 1997 amounts represent the total square footage and total annualized
minimum rent that will expire during the last six months of 1997.
15
<PAGE> 13
THE MILLS CORPORATION
LEASE EXPIRATION SCHEDULE
The following table shows lease expirations assuming that none of the tenants
exercise renewal options. Except as described in footnote (1), the minimum rent
is the monthly contractual minimum rent of the expiring leases as of June 30,
1997 multiplied by 12.
<TABLE>
<CAPTION>
1997 (1) 1998
Annualized Annualized
Sq Ft Min. Rent psf Sq Ft Min. Rent psf
----- --------- --- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C>
Ontario Mills:
Anchors - $ - $ - - $ - $ -
Majors - - - - - -
Specialty 2,739 115,628 42.22 - - -
Food Court - - - - - -
-------------------------------------- --------------------------------------
2,739 $ 115,628 $ 42.22 0 $ - $ -
Total Mills with Ontario:
Anchors - $ - $ - - $ - $ -
Majors - - - 127,093 826,559 6.50
Specialty 203,294 3,721,801 18.31 248,921 5,515,260 22.16
Food Court - - - 1,567 85,208 54.38
-------------------------------------- --------------------------------------
203,294 $ 3,721,801 $ 18.31 377,581 $ 6,427,027 $ 17.02
====================================== ======================================
Community Centers:
Anchors - $ - $ - 56,949 $ 194,300 $ 3.41
Majors - - - 78,452 524,864 6.69
Specialty 80,236 1,074,602 13.39 96,333 1,254,168 13.02
Food Court - - - - - -
-------------------------------------- --------------------------------------
80,236 $ 1,074,602 $ 13.39 231,734 $ 1,973,332 $ 8.52
====================================== ======================================
</TABLE>
<TABLE>
<CAPTION>
1999 After 1999
Annualized Annualized
Sq Ft Min. Rent psf Sq Ft Min. Rent psf
----- --------- --- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C>
Ontario Mills:
Anchors - $ - $ - 286,023 $ 1,883,132 $ 6.58
Majors - - - 332,598 3,759,596 11.30
Specialty 9,915 261,900 26.41 452,119 10,480,418 23.18
Food Court - - - 11,328 553,155 48.83
------------------------------------- ----------------------------------------
9,915 $ 261,900 $ 26.41 1,082,068 $ 16,676,301 $ 15.41
Total Mills with Ontario:
Anchors 100,200 $ 547,725 $ 5.47 2,177,438 $ 13,095,362 $ 6.01
Majors 110,596 1,109,004 10.03 1,153,183 12,183,637 10.57
Specialty 231,771 5,164,911 22.28 2,007,572 44,739,217 22.29
Food Court 7,435 443,062 59.59 66,438 3,458,338 52.05
------------------------------------- ----------------------------------------
450,002 $ 7,264,702 $ 16.14 5,404,631 $ 73,476,554 $ 13.60
===================================== ========================================
Community Centers:
Anchors - $ - $ - 395,679 $ 2,284,022 $ 5.77
Majors - - - 700,083 4,840,122 6.91
Specialty 87,537 1,262,013 14.42 426,363 5,538,085 12.99
Food Court - - - - - -
------------------------------------- ----------------------------------------
87,537 $ 1,262,013 $ 14.42 1,522,125 $ 12,662,229 $ 8.32
===================================== ========================================
</TABLE>
<TABLE>
<CAPTION>
Total
Annualized
Sq Ft Min. Rent psf
----- --------- ---
<S> <C> <C> <C>
Ontario Mills:
Anchors 286,023 $ 1,883,132 $ 6.58
Majors 332,598 3,759,596 11.30
Specialty 464,773 10,857,946 23.36
Food Court 11,328 553,155 48.83
-----------------------------------------
1,094,722 $ 17,053,829 $ 15.58
Total Mills with Ontario:
Anchors 2,277,638 $ 13,643,087 $ 5.99
Majors 1,390,872 14,119,200 10.15
Specialty 2,691,558 59,141,189 21.97
Food Court 75,440 3,986,608 52.84
-----------------------------------------
6,435,508 $ 90,890,084 $ 14.12
=========================================
Community Centers:
Anchors 452,628 $ 2,478,322 $ 5.48
Majors 778,535 5,364,986 6.89
Specialty 690,469 9,128,868 13.22
Food Court - - -
-----------------------------------------
1,921,632 $ 16,972,176 $ 8.83
=========================================
</TABLE>
(1) The 1997 amounts represent the total square footage and total annualized
minimum rent that will expire during the last six months of 1997.
16
<PAGE> 14
THE MILLS CORPORATION
RENTAL RATES (1)
The following table sets forth, the average base rent per leased square foot of
store openings and closings for each property for the six months ended June 30,
1997.
<TABLE>
<CAPTION>
Anchor Stores
------------------------------------------------------------------------------------------
Store Openings Store Closings Releasing
During Year During Year Spread (2)
---------------------------- --------------------------- ----------------------
Average Average
Base Rent Total Base Rent Total
Per Sq. Ft. Sq. Ft. Per Sq. Ft. Sq. Ft.
----------- ----------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills $ - - $ - - $ - -
Franklin Mills 17.66 26,900 7.22 26,900 10.44 144.60%
Gurnee Mills - - - - - -
Sawgrass Mills - - - - - -
--------- ----------- -------- ---------- --------- --------
Total Mills $ 17.66 26,900 $ 7.22 26,900 $ 10.44 144.60%
========= =========== ======== ========== ========= ========
Community Centers $ - - $ - - $ - -
========= =========== ======== ========== ========= ========
</TABLE>
<TABLE>
<CAPTION>
Specialty Stores
--------------------------------------------------------------------------------------
Store Openings Store Closings Releasing
During Year During Year Spread (2)
-------------------------- --------------------------- ----------------------
Average Average
Base Rent Total Base Rent Total
Per Sq. Ft. Sq. Ft. Per Sq. Ft. Sq. Ft.
------------ --------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills $ 24.21 39,948 $ 22.95 54,713 $ 1.26 5.47%
Franklin Mills 20.25 72,793 20.18 57,887 0.07 0.34%
Gurnee Mills 20.92 46,247 18.60 80,641 2.32 12.48%
Sawgrass Mills 30.59 31,968 23.40 45,847 7.19 30.74%
--------- --------- --------- --------- -------- -------
Total Mills $ 22.97 190,956 $ 20.90 239,088 $ 2.07 9.92%
========= ========= ========= ========= ======== =======
Community Centers $ 15.47 41,252 $ 15.12 63,118 $ 0.35 2.32%
========= ========= ========= ========= ======== =======
</TABLE>
(1) Ontario Mills is excluded from this analysis, due to its still being in
its initial lease up phase.
(2) The releasing spread is calculated as the difference between per square
foot openings and per square foot closings. Openings and closings include
renewals but exclude exercised options.
17
<PAGE> 15
THE MILLS CORPORATION
SUMMARY OF OUTSTANDING CONSOLIDATED INDEBTEDNESS
(DOLLARS IN THOUSANDS)
AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Principal
Balance Annual Interest Maturity
Secured Property (000's) Term Rate Date
- ---------------- ------- ---- ---- ----
<S> <C> <C> <C> <C>
Potomac Mills/Gurnee Mills:
Tranche A $210,583 Fixed 6.905% 12/17/26 (1)
Tranche B 27,000 Fixed 7.021% 12/17/26 (1)
Tranche C 15,000 Fixed 7.235% 12/17/26 (1)
Tranche D 30,000 Fixed 7.701% 12/17/26 (1)
Franklin Mills and Liberty Plaza
Mortgage Loan 110,000 Fixed 7.882% 6/1/27 (3)
Sawgrass Mills:
Tranche A 115,000 Fixed 6.450% 1/18/01
Tranche B 10,000 Variable with cap 85 bp over Libor (6) 1/18/01
Tranche C 20,000 Variable with cap 230 bp over Libor (6) 1/18/01
Sawgrass Mills - Phase II 12,000 Variable 235 bp over Libor 7/31/98
Western Hills 14,949 Fixed 7.675% 1/1/99
Nine Community Centers 73,097 Fixed 7.160% 1/31/01
Revolving Master Repurchase
Agreement - Variable 125 bp over Libor
Line of Credit (13) - Variable 300 bp over Libor 10/31/98
Other 1,284 Fixed 7% weighted ave.
------------
Total $638,913
============
</TABLE>
<TABLE>
<CAPTION>
Annual Earliest day
Interest at which debt
Secured Property (000's) can be repaid
- ---------------- -------- -------------
<S> <C> <C>
Potomac Mills/Gurnee Mills:
Tranche A $14,541 (2)
Tranche B 1,896 (2)
Tranche C 1,085 (2)
Tranche D 2,310 (2)
Franklin Mills and Liberty Plaza
Mortgage Loan 8,670 (4)
Sawgrass Mills:
Tranche A 7,418 (5)
Tranche B 654 (7) (5)
Tranche C 1,598 (7) (5)
Sawgrass Mills - Phase II 965 (7) (8)
Western Hills 1,140 (9)
Nine Community Centers 5,314 (10)
Revolving Master Repurchase
Agreement - (11)
Line of Credit (13) - (11)
Other 90 (12)
-----------
Total $45,681
===========
</TABLE>
(1) This indebtedness is a 30 year amortizing loan with an anticipated
balloon repayment on December 18, 2003. In the event the mortgage
loan is not repaid by the anticipated balloon repayment date, the
annual interest rate for each tranche will be increased by 2% per
annum in excess of the stated interest rate. In addition, excess cash
flow available after payment of the increased interest rate and
scheduled amortization will be used to reduce the principal balance of
the loan. Principal repayments are based on the scheduled
amortization, assuming a 7% mortgage interest rate, over a 30 year
period, with the monthly amortization payments being applied
sequentially, beginning with Tranche A to reduce the principal
balance.
(2) Optional payments of principal are not permitted prior to December 17,
1999. After such date, prepayments, in whole or in part, are
permitted upon 15 days notice. In addition, the Company is required
to pay a prepayment penalty equal to the greater of (i) 1% of the
remaining principal balance or (ii) a yield preservation payment.
Generally, yield preservation payments are intended to compensate the
lender for the total amount of interest it would have earned on the
indebtedness but for the repayment, less the amount of interest that
the lender could earn if it invested the repayment amount in United
States Treasury obligations or other similar securities from the date
of the repayment through the maturity date of the indebtedness.
(3) This indebtedness is a 30 year amortizing loan with an anticipated
balloon repayment on May 5, 2007. In the event the mortgage loan is
not repaid by the anticipated balloon repayment date, the annual
interest rate will be increased by 5% per annum in excess of the
stated interest rate. In addition, excess cash flow available after
payment of the increased interest rate and scheduled amortization will
be used to reduce the principal balance of the loan. The loan balance
can be increased to $165,000 through May 4, 1998, subject to certain
financial requirements relating to increases over $130,000. The loan
amount was increased to $130,000 on August 8, 1997.
(4) This indebtedness may be prepaid, without a prepayment penalty,
beginning 180 days prior to May 5, 2007. Prior to that date, there
is no right to prepay the indebtedness, except that $12.5 million of
the principal balance, which has been allocated to the Liberty Plaza
shopping center, may be defeased through the establishment of
defeasance collateral (which may include government or agency
securities that have the full faith and credit of the United States
government).
(5) Optional payments of principal on Tranche A of this indebtedness are
not permitted prior to June 20, 2000 other than in connection with
certain casualty or condemnation events occurring with respect to
Sawgrass Mills. On and after such date, Tranche A may be prepaid in
full, but not in part, without any prepayment penalty. Optional
prepayments of Tranches B and C of the indebtedness may be made, in
whole or in part, at any time without any prepayment penalty, but only
if payments of interest are current with respect to each outstanding
Tranche and an event of default is not then continuing.
(6) The loan agreement provides for a cap on LIBOR at 14% for the life of
the loan.
(7) Calculated using 30-day LIBOR at 5.69%, which was the rate at June 30,
1997.
(8) Prepayable at any time, in whole or in part, at any time without
prepayment penalty.
(9) Prepayable, in whole or in part, upon 30 days notice to the lender and
the payment of a prepayment penalty. The penalty percentage due on
prepayment at any time during the six months ending June 30, 1997 is
3% of the outstanding principal amount. Thereafter, the penalty
decreases by 0.5% per six month period to a minimum of 1.5%. During
the last three months of its term, the indebtedness may be prepaid
without penalty or premium.
(10) Prepayable, in whole or in part, at any time, upon 60 days prior
notice to the lender. Only in the case of a partial prepayment is the
Company required to pay a prepayment penalty equal to the greater of
(i) 1% of the principal balance, or (ii) a yield preservation payment.
(11) Prepayable, in whole or in part, at any time without prepayment
penalty.
(12) Primarily corporate debt with maturities under one year. Prepayable,
in whole or in part, at any time without prepayment penalty.
(13) The Line of Credit totals $40,000 none of which was outstanding at
June 30, 1997. As of July 15, 1997, the availability under the line
was increased to $60,000. Funds are available subject to certain
performance measures and restrictive covenants.
18
<PAGE> 16
THE MILLS CORPORATION
MILLS GROSS SALES
AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
Twelve Months ended June 30, 1997 Twelve Months ended June 30, 1996
---------------------------------- ----------------------------------
Sq Ft Sales psf Sq Ft Sales psf
----- ----- --- ----- ----- ---
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills:
Anchor/Majors 963,921 $ 187,279,375 $ 194 967,038 $ 176,991,322 $ 183
Specialty 570,592 172,231,896 302 582,762 166,562,947 286
Temporary/Kiosk - 3,149,190 - - 2,623,013 -
--------------------------------------------------- ----------------------------------------------
1,534,513 $ 362,660,461 $ 236 1,549,800 $ 346,177,282 $ 223
Franklin Mills:
Anchor/Majors 890,598 $ 166,007,612 $ 186 913,908 $ 160,903,723 $ 176
Specialty 488,811 133,376,417 273 507,499 122,744,786 242
Temporary/Kiosk - 5,972,351 - - 3,654,530 -
--------------------------------------------------- ----------------------------------------------
1,379,409 $ 305,356,380 $ 221 1,421,407 $ 287,303,039 $ 202
Sawgrass Mills:
Anchor/Majors 1,172,016 $ 361,023,125 $ 308 1,144,821 $ 333,689,350 $ 291
Specialty 652,186 278,106,635 426 635,579 256,781,636 404
Temporary/Kiosk - 12,485,546 - - 11,328,713 -
--------------------------------------------------- ----------------------------------------------
1,824,202 $ 651,615,306 $ 357 1,780,400 $ 601,799,699 $ 338
Gurnee Mills:
Anchor/Majors 656,360 $ 100,605,643 $ 153 658,246 $ 90,148,488 $ 137
Specialty 556,850 144,133,417 259 550,510 139,002,624 252
Temporary/Kiosk - 7,077,134 - - 6,573,929 -
--------------------------------------------------- ----------------------------------------------
1,213,210 $ 251,816,194 $ 208 1,208,756 $ 235,725,041 $ 195
Total Mills
Anchor/Majors 3,682,895 $ 814,915,755 $ 221 3,684,013 $ 761,732,883 $ 207
Specialty 2,268,439 727,848,365 321 2,276,350 685,091,993 301
Temporary Kiosk - 28,684,221 - - 24,180,185 -
--------------------------------------------------- ----------------------------------------------
5,951,334 $ 1,571,448,341 $ 264 5,960,363 $ 1,471,005,061 $ 247
=================================================== ==============================================
</TABLE>
<TABLE>
<CAPTION>
Twelve Months ended December 31, 1996
--------------------------------------
Sq Ft Sales psf
----- ----- ---
<S> <C> <C> <C>
Potomac Mills:
Anchor/Majors 988,700 $ 183,164,739 $ 185
Specialty 581,470 168,199,660 289
Temporary/Kiosk - 3,003,098 -
------------------------------------------
1,570,170 $ 354,367,497 $ 226
Franklin Mills:
Anchor/Majors 906,949 $ 163,200,049 $ 180
Specialty 497,697 126,589,740 254
Temporary/Kiosk - 5,554,831 -
------------------------------------------
1,404,646 $ 295,344,620 $ 210
Sawgrass Mills:
Anchor/Majors 1,172,016 $ 353,980,590 $ 302
Specialty 667,926 271,682,972 407
Temporary/Kiosk - 12,499,092 -
------------------------------------------
1,839,942 $ 638,162,654 $ 347
Gurnee Mills:
Anchor/Majors 646,360 $ 96,374,480 $ 149
Specialty 561,914 141,852,985 252
Temporary/Kiosk - 6,082,243 -
------------------------------------------
1,208,274 $ 244,309,708 $ 202
Total Mills
Anchor/Majors 3,714,025 $ 796,719,858 $ 215
Specialty 2,309,007 708,325,357 307
Temporary Kiosk - 27,139,264 -
------------------------------------------
6,023,032 $ 1,532,184,479 $ 254
==========================================
</TABLE>
(1) Ontario Mills is excluded from this analysis since it did not open until
November 1996 and does not have 12 months of sales for comparison.
(2) Anchor/Major sales have been adjusted to include sales from certain anchor
tenants who own their parcels.
19
<PAGE> 17
THE MILLS CORPORATION
CAPITAL EXPENDITURES
EXISTING MILLS AND EXISTING COMMUNITY CENTERS COMBINED
<TABLE>
<CAPTION>
Six Months Ending
June 30, 1997 1996 1995
-------------------- --------------- ----------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 134,339 $ 328,974 $ 230,024
Per Square Foot (2) 0.02 0.04 0.03
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 675,360 $ 4,228,743 (4) $ 2,043,279
Per Square Foot Improved (5) 3.75 12.71 5.52
Per Square Foot (2) 0.08 0.52 0.25
TOTAL RECURRING COSTS
Costs $ 809,699 $ 4,557,717 $ 2,273,303
Per Square Foot (2) 0.10 0.56 0.28
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (2)
Costs $ 312,289 $ 8,079,220 $ 1,093,624 (6)
Per Square Foot Improved (7) 14.99 44.93 17.10
Per Square Foot (2) - 0.99 0.23
WORK IN PROCESS (8)
Costs $ 10,506,636 (9) - -
Per Square Foot Improved (10) 6.75 - -
</TABLE>
(1) Recurring non-tenant capital expenditures include expenditures that are
not tenant related nor recoverable from tenants.
(2) Includes annual costs divided by total GLA (excluding space owned by
certain anchor store tenants) of the Properties (excluding Ontario Mills).
(3) Tenant Improvements/Leasing costs include tenant specific costs for tenant
improvements, tenant allowances and capitalized internal leasing costs.
(4) Includes $1,487,754 incurred with respect to three significant tenants at
Potomac Mills totaling approximately 53,000 square feet of GLA. Without
these three tenants the per square foot improved and per square foot
Recurring Tenant Improvements/Leasing Costs would have totaled $9.80 and
$0.33, respectively.
(5) Calculated as Recurring Tenant Improvements/Leasing Costs divided by GLA
of all Recurring Store Openings (including spaces requiring no
expenditures).
(6) Sawgrass Phase II expansion costs have been excluded from this analysis.
(7) Calculated as Non-Recurring Tenant Improvements/Leasing Costs divided by
GLA of all Non-Recurring Store Openings.
(8) Work in process that will be shown as Recurring or Non-Recurring when the
work is completed.
(9) Includes expansion costs at Franklin Mills and Gurnee Mills.
(10) Calculated as Work In Process divided by GLA of all space with work in
process.
20
<PAGE> 18
THE MILLS CORPORATION
CAPITAL EXPENDITURES
EXISTING MILLS
<TABLE>
<CAPTION>
Six Months Ending
June 30, 1997 1996 1995
----------------------- -------------- ---------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 117,539 $ 246,522 $ 191,613
Per Square Foot (2) 0.02 0.04 0.03
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 586,869 $ 3,549,312 (4) $ 1,488,391
Per Square Foot Improved (5) 4.03 12.94 4.85
Per Square Foot (2) 0.10 0.60 0.25
TOTAL RECURRING COSTS
Costs $ 704,408 $ 3,795,834 $ 1,680,004 (6)
Per Square Foot (2) 0.12 0.64 0.28
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 189,346 $ 7,746,906 $ 1,636,001
Per Square Foot Improved (7) 14.49 50.00 21.69
Per Square Foot (2) - 1.30 0.27
WORK IN PROCESS (7)
Costs $ 10,096,494 - -
Per Square Foot Improved 17.42 - -
</TABLE>
(1) Recurring non-tenant capital expenditures include expenditures that are
not tenant related nor recoverable from tenants.
(2) Includes annual costs divided by total GLA (excluding space owned by
certain anchor store tenants) of the Properties (excluding Ontario Mills).
(3) Tenant Improvements/Leasing costs include tenant specific costs for tenant
improvements, tenant allowances and capitalized internal leasing costs.
(4) Includes $1,487,754 incurred with respect to three significant tenants at
Potomac Mills totaling approximately 53,000 square feet of GLA. Without
these three tenants the per square foot improved and per square foot
Recurring Tenant Improvements/Leasing Costs would have totaled $9.32 and
$0.34, respectively.
(5) Calculated as Recurring Tenant Improvements/Leasing Costs divided by GLA
of all Recurring Store Openings (including spaces requiring no
expenditures).
(6) Sawgrass Phase II expansion costs have been excluded from this analysis.
(7) Calculated as Non-Recurring Tenant Improvements/Leasing Costs divided by
GLA of all Non-Recurring Store Openings.
(8) Work in process that will be shown as Recurring or Non-Recurring when the
work is completed.
(9) Includes expansion costs at Franklin Mills and Gurnee Mills.
(10) Calculated as Work In Process divided by GLA of all space with work in
process.
21
<PAGE> 19
THE MILLS CORPORATION
CAPITAL EXPENDITURES
COMMUNITY CENTERS
<TABLE>
<CAPTION>
Six Months Ending
June 30, 1997 1996 1995
-------------------- ---------------- ------------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 16,800 $ 82,452 $ 38,411
Per Square Foot (2) 0.01 0.04 0.02
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 88,491 $ 679,431 $ 554,888
Per Square Foot Improved (4) 2.56 15.06 9.54
Per Square Foot (1) 0.04 0.31 0.25
TOTAL RECURRING COSTS
Costs $ 105,291 $ 761,883 $ 593,299
Per Square Foot (2) 0.05 0.35 0.27
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 122,942 $ 332,314 $ 267,622
Per Square Foot Improved (5) 15.84 13.35 7.46
Per Square Foot (2) - 0.15 0.12
WORK IN PROCESS (6)
Costs $ 410,142 - -
Per Square Foot Improved (7) 0.42 - -
</TABLE>
(1) Recurring non-tenant capital expenditures include expenditures that are
not tenant related nor recoverable from tenants.
(2) Includes annual costs divided by total GLA (excluding space owned by
certain anchor store tenants) of the Community Centers.
(3) Tenant Improvements/Leasing costs include tenant specific costs for tenant
improvements, tenant allowances and capitalized internal leasing costs.
(4) Calculated as Recurring Tenant Improvements/Leasing Costs divided by GLA
of all Recurring Store Openings (including spaces requiring no
expenditures).
(5) Calculated as Non-Recurring Tenant Improvements/Leasing Costs divided by
GLA of all Non-Recurring Store Openings.
(6) Work in process that will be shown as Recurring or Non-Recurring when the
work is completed.
(7) Calculated as Work In Process divided by GLA of all space with work in
process.
22
