<PAGE> 1
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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, 1998 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:
(former name or former address, if changed since last report)
Not Applicable
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<PAGE> 2
THE MILLS CORPORATION
FORM 8-K
INDEX
ITEM 5. OTHER EVENTS
The Registrant made available additional operational information
concerning the Registrant, The Mills Corporation, and the properties owned
or managed by it as of June 30, 1998, in the form of a Supplemental
Information Package, a copy of which is included as an exhibit to this
filing. The Supplemental Information package is available upon request as
specified therein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements
NONE.
Exhibits:
<TABLE>
<CAPTION>
Page Number in
Exhibit No. Description Filing
- ----------- ----------- ------
<S> <C> <C>
99.1 Supplemental Information as 4
of June 30, 1998
</TABLE>
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities and 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 3, 1998
THE MILLS CORPORATION
By: /s/ Kenneth R. Parent
---------------------------------------
Kenneth R. Parent
Executive 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, 1998
<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
Summary of Outstanding Unconsolidated Indebtedness 19
Mills Gross Sales 20
Capital Expenditures 21-23
</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, which conducts all of its business through The Mills Limited
Partnership ("the Operating Partnership"), in which it owns, as of June 30,
1998, a 1% interest as the sole general partner and a 58.3% 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, 1998, the Operating Partnership owns or holds an
interest in the following operating properties:
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)
Grapevine Mills Grapevine, TX (Dallas/Fort Worth)
Arizona Mills Tempe, AZ (Phoenix)
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
In addition to the operating properties, the Company is actively involved in the
development of a number of new Mills, including The Block at Orange (Orange,
California), Katy Mills (Houston, TX), Meadowlands Mills (Carlstadt, NJ),
Concord Mills (Charlotte, NC), Vaughan Mills (Toronto, Canada), Opry Mills
(Nashville, TN) and Sawgrass Phase III Expansion (Sunrise, FL).
PURPOSE OF FILING
The purpose of this supplemental information package is to provide supplemental
information regarding the operations, assets and liabilities as of June 30, 1998
for the Company and Operating Partnership.
5
<PAGE> 3
THE MILLS CORPORATION
OVERVIEW
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 1934, as amended (the "Exchange Act")
relating to, without limitation, future economic performance, plans and
objectives of management for future operation 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 table sets forth certain information with respect to the
Properties and the Mills under development as of June 30, 1998:
<TABLE>
<CAPTION>
Approx. Approx. Approx.
Total Anchor Specialty
Approx. Store Store
Metropolitan Year Ownership GLA GLA GLA
Name/Location Area Serviced Opened Percentage (Sq. Ft.)(1) (sq. ft)(1) (sq. ft)(1)
------------- ------------- ------ ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
MILLS
Potomac Mills.............. Washington D.C./ 1985 100% 1,636,870 1,009,010 627,860
Woodbridge, VA Baltimore
Franklin Mills............. Philadelphia/ 1989 100% 1,718,719 1,122,466 596,253
Philadelphia, PA Wilmington
Sawgrass Mills............. Fort Lauderdale, FL/ 1990 100% 1,878,522 1,201,905 676,617
Sunrise, FL Miami/Palm Beach
Gurnee Mills............... Chicago/Milwaukee 1991 100% 1,653,482 1,020,676 632,806
Gurnee, IL
Ontario Mills.............. Los Angeles 1996 50% 1,325,984(4) 804,470 521,514
Ontario, CA
Grapevine Mills............ Dallas/Fort Worth 1997 37.5% 1,241,769(5) 698,670 543,099
Grapevine, TX
Arizona Mills.............. Phoenix 1997 36.8% 1,209,524 678,307 531,217
Tempe, AZ
========== =========== ==========
MILLS TOTALS/WEIGHTED AVERAGES................. 10,664,870 6,535,504 4,129,366
========== =========== ==========
COMMUNITY CENTERS (11 CENTERS) 2,220,013 1,378,956 841,057
========== =========== ==========
<CAPTION>
12 Mos. Ended
Annualized No. of 6/30/98
Metropolitan Percent Base Anchor Specialty Store
Name/Location Area Serviced Leased (2) Rent (7) Stores (3) Sales PSF
------------- ------------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
MILLS
Potomac Mills.............. Washington D.C./ 96% $20,837,604 17 $325
Woodbridge, VA Baltimore
Franklin Mills............. Philadelphia/ 95% 16,722,377 18 296
Philadelphia, PA Wilmington
Sawgrass Mills............. Fort Lauderdale, FL/ 99% 24,436,144 20 457
Sunrise, FL Miami/Palm Beach
Gurnee Mills............... Chicago/Milwaukee 96% 16,498,135 16 275
Gurnee, IL
Ontario Mills.............. Los Angeles 97% 17,486,415 17 350
Ontario, CA
Grapevine Mills............ Dallas/Fort Worth 94% 19,873,838 16 N/A(6)
Grapevine, TX
Arizona Mills.............. Phoenix 95% 18,572,776 15 N/A(6)
Tempe, AZ
=========== =====
MILLS TOTALS/WEIGHTED AVERAGES................. 96% 134,427,289 119 $346
=========== =====
COMMUNITY CENTERS (11 CENTERS) 92% 17,997,190 28
=========== =====
</TABLE>
(1) Includes 962,163 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; Liberty Plaza - 13,741
square feet of GLA; West Falls Church- 2,240 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, 1998, excluding tenants with leases having a term of
less than 1 year plus GLA owned by anchor store tenants.
(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) Grapevine Mills will contain approximately 1.5 million square feet of GLA,
including GLA owned by certain anchor store tenants, upon completion.
(6) 12 Mos. Ended 6/30/98 Specialty Store Sales PSF information is not
available for Grapevine Mills and Arizona Mills which commenced business
in October 1997 and November 1997, respectively.
(7) Annualized Base Rent is defined as the contractual minimum rent of tenants
comprising GLOA at 6/98 multiplied by 12.
7
<PAGE> 5
THE MILLS CORPORATION
SUMMARY OF PROPERTIES
PROJECTS UNDER DEVELOPMENT
<TABLE>
<CAPTION>
Actual/ Estimated Anchor
Anticipated Anticipated Approx. Aggregate Store
Metropolitan Construction Opening GLA Company Project Tenant
Name/Location Area Serviced Start Date(1) Date(1) (Sq. Ft.)(1,2) Ownership Cost(1) Commitments
------------- ------------- ------------- ------- -------------- --------- ------- -----------
(millions)
<S> <C> <C> <C> <C> <C> <C> <C>
The Block at Orange Los Angeles/ 1997 1998 811,000 50.0% $194 10
Orange, CA Orange County
Sawgrass Phase III Expansion Fort Lauderdale, FL/ 1997 1999 300,000 50.0% $ 66 3
Sunrise, FL Miami/Palm Beach
Katy Mills Houston 1998 1999 1,400,000 75.0% $225 10
Houston, TX
Concord Mills Charlotte 1998 1999 1,400,000 50.0% $217 9
Concord, NC
Opry Mills Nashville 1998 N/A(3) 1,200,000 66.7% $220 3
Nashville, TN
Vaughan Mills Toronto 1999 N/A(3) 1,400,000 N/A(3) $222 N/A(4)
Toronto, Canada
Meadowlands Mills New York City/ 1999 N/A(3) N/A(3) 66.7% N/A(4) N/A(5)
Carlstadt, NJ Northern New Jersey
</TABLE>
(1) Anticipated Construction Start Dates and Opening Dates, Project Costs and
Approximate GLA 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) Approximate GLA includes space that may be owned by certain anchor store
tenants.
(3) The ownership structure, budgets and/or start dates for these properties
have not yet been determined.
(4) The Company's leasing efforts have not yet commenced for these projects.
(5) Leasing activity has not yet commenced for this project, however, the
Company has received letters of interest from 17 anchor store tenants.
8
<PAGE> 6
SUPPLEMENTAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
REVENUES:
Minimum rent $ 25,036 $ 23,818 $ 49,573 $ 47,018
Percentage rent 233 1,003 1,399 2,122
Recoveries from tenants 12,109 11,422 24,173 22,972
Other property revenue 1,488 1,355 2,978 2,632
Fee income 3,365 1,846 4,744 4,361
Interest income 679 1,072 1,788 1,635
-------- -------- -------- --------
Total revenues 42,910 40,516 84,655 80,740
EXPENSES:
Recoverable from tenants 10,517 10,290 20,900 20,689
Other property operating 1,238 1,878 2,707 3,201
General and administrative 2,578 1,991 4,984 4,237
Interest expense 10,820 9,995 21,914 22,044
Depreciation and amortization 8,685 8,361 18,297 16,847
-------- -------- -------- --------
Total expenses 33,838 32,515 68,802 67,018
Other income/(expense) (43) (40) (86) 203
Equity in earnings of unconsolidated joint ventures 891 888 2,831 1,001
-------- -------- -------- --------
Income before extraordinary item and minority 9,920 8,849 18,598 14,926
interest
Extraordinary loss (422) (8,060) (422) (8,060)
-------- -------- -------- --------
Income before minority interest 9,498 789 18,176 6,866
Minority interest (3,870) (328) (7,428) (3,039)
-------- -------- -------- --------
Net income $ 5,628 $ 461 $ 10,748 $ 3,827
======== ======== ======== ========
Net income per share before extraordinary item $ 0.26 $ 0.24 $ 0.48 $ 0.41
======== ======== ======== ========
Net income per share (Basic) $ 0.25 $ 0.02 $ 0.47 $ 0.19
======== ======== ======== ========
Net income per share (Diluted) $ 0.24 $ 0.02 $ 0.46 $ 0.19
======== ======== ======== ========
FUNDS FROM OPERATIONS (*):
Income before extraordinary item
and minority interest $ 9,920 $ 8,849 $ 18,598 $ 14,926
Adjustments:
Add: Depreciation and amortization of real estate
assets 7,810 7,742 16,369 15,447
Add: Real estate depreciation and amortization
of unconsolidated joint ventures 2,555 924 4,889 1,646
Add: Extraordinary loss on debt extinguishment of
unconsolidated joint ventures -- -- -- 397
-------- -------- -------- --------
Funds from operations $ 20,285 $ 17,515 $ 39,856 $ 32,416
======== ======== ======== ========
Funds from operations per share (Basic) $ 0.52 $ 0.45 $ 1.03 $ 0.89
======== ======== ======== ========
Funds from operations per share (Diluted) $ 0.51 $ 0.44 $ 1.01 $ 0.88
======== ======== ======== ========
BASIC:
Weighted average shares 22,986 23,016 22,922 20,288
Weighted average shares and units 38,842 38,970 38,816 36,429
DILUTED:
Weighted average shares 23,589 23,444 23,532 20,676
Weighted average shares and units 39,445 39,398 39,425 36,818
</TABLE>
- ----------
(*) The Company generally considers Funds From Operations ("FFO") a widely
used and appropriate measure of performance for an equity REIT which
provides a relevant basis for comparison among REITs. FFO as defined by
National Association of Real Estate Investment Trusts (NAREIT) means
income (loss) before minority interest (determined in accordance with
Generally Accepted Accounting Principles (GAAP)), excluding gains (losses)
from debt restructuring and sales 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 the performance of the Company. The Company's method of
calculating FFO may be different from methods used by other REITs and,
accordingly, may not be comparable to such other REITs. FFO (i) does not
represent cash flow from operations as defined by GAAP, (ii) is not
indicative of cash available to fund all cash flow needs and liquidity,
including its ability to make distributions, and (iii) should not be
considered as an alternative to net income (determined in accordance with
GAAP) 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 NET INCOME FOR EACH OF THE MILLS, MAINSTREET
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 7.
FOR THE SIX MONTHS ENDED JUNE 30, 1998
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 $10,490 $ 8,346 $12,892 $ 8,375 $ 669 $ 8,801 $49,573
Percentage rent 124 158 621 194 102 200 1,399
Recoveries from tenants 4,448 5,662 6,969 4,471 20 2,603 24,173
Other revenue 341 430 1,301 607 223 76 2,978
------- ------- ------- ------- ------- ------- -------
Total rental revenues 15,403 14,596 21,783 13,647 1,014 11,680 78,123
PROPERTY OPERATING COSTS:
Recoverable from tenants 3,688 4,396 6,212 3,972 -- 2,632 20,900
Other operating 374 527 216 563 747 280 2,707
------- ------- ------- ------- ------- ------- -------
Total property operating costs 4,062 4,923 6,428 4,535 747 2,912 23,607
------- ------- ------- ------- ------- ------- -------
PROPERTY OPERATING INCOME 11,341 9,673 15,355 9,112 267 8,768 54,516
======= ======= ======= ======= ======= ======= =======
</TABLE>
UNCONSOLIDATED JOINT VENTURES
<TABLE>
<CAPTION>
Ontario Grapevine Arizona Other Total
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
RENTAL REVENUES:
Minimum rent $ 9,348 $10,031 $ 9,201 $ 267 $28,847
Percentage rent 204 178 233 -- 615
Recoveries from tenants 4,295 4,250 3,834 14 12,393
Other revenue 849 908 823 (12) 2,568
------- ------- ------- ------- -------
Total rental revenues 14,696 15,367 14,091 269 44,423
PROPERTY OPERATING COSTS
Recoverable from tenants 4,119 4,209 3,181 46 11,555
Other Operating 852 635 957 305 2,749
------- ------- ------- ------- -------
Total property operating costs 4,971 4,844 4,138 351 14,304
------- ------- ------- ------- -------
PROPERTY OPERATING INCOME 9,725 10,523 9,953 (82) 30,119
======= ======= ======= ======= =======
Mills Share (1) $ 2,572 $ 2,304 $ 2,355 $ (40) $ 7,191
======= ======= ======= ======= =======
</TABLE>
(1) Based on Mills' share of distributable cash flow for the six months ended
June 30, 1998, excluding management fees.
10
<PAGE> 8
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH THE NET INCOME FOR EACH OF THE MILLS, MAINSTREET
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 7.
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 -- 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 Other Total
------- ------- -------
<S> <C> <C> <C>
RENTAL REVENUES:
Minimum rent $ 8,341 $ 145 $ 8,486
Percentage rent 460 -- 460
Recoveries from tenants 3,502 4 3,506
Other revenue 784 23 807
------- ------- -------
Total rental revenues 13,087 172 13,259
PROPERTY OPERATING COSTS
Recoverable from tenants 3,591 38 3,629
Other operating 711 249 960
------- ------- -------
Total property operating costs 4,302 287 4,589
------- ------- -------
PROPERTY OPERATING INCOME $ 8,785 $ (115) $ 8,670
======= ======= =======
Mills Share (1) $ 3,599 $ (64) $ 3,535
======= ======= =======
</TABLE>
(1) Based on Mills' share of distributable cash flow for the six months ended
June 30, 1997, excluding management fees.
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 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 7 AND IS NOT INTENDED BE A REPRESENTATION OF NET INCOME ACCORDING
TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
FOR THE THREE MONTHS ENDED JUNE 30, 1998
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 $ 5,291 $ 4,199 $ 6,490 $ 4,202 $ 337 $ 4,517 $25,036
Percentage rent 17 14 -- 23 57 122 233
Recoveries from tenants 2,232 2,881 3,489 2,202 9 1,296 12,109
Other revenue 195 212 601 311 119 50 1,488
------- ------- ------- ------- ------- ------- -------
Total rental revenues 7,735 7,306 10,580 6,738 522 5,985 38,866
PROPERTY OPERATING COSTS:
Recoverable from tenants 1,850 2,226 3,159 1,941 -- 1,341 10,517
Other operating 158 283 76 215 391 115 1,238
------- ------- ------- ------- ------- ------- -------
Total property operating costs 2,008 2,509 3,235 2,156 391 1,456 11,755
------- ------- ------- ------- ------- ------- -------
PROPERTY OPERATING INCOME 5,727 4,797 7,345 4,582 131 4,529 27,111
======= ======= ======= ======= ======= ======= =======
</TABLE>
UNCONSOLIDATED JOINT VENTURES
<TABLE>
<CAPTION>
Ontario Grapevine Arizona Other Total
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
RENTAL REVENUES:
Minimum rent $ 4,662 $ 5,171 $ 4,768 $ 172 $14,773
Percentage rent (20) (2) 127 -- 105
Recoveries from tenants 2,189 2,363 2,218 8 6,778
Other revenue 455 465 539 (11) 1,448
------- ------- ------- ------- -------
Total rental revenues 7,286 7,997 7,652 169 23,104
PROPERTY OPERATING COSTS:
Recoverable from tenants 2,065 2,328 1,621 16 6,030
Other operating 446 294 556 121 1,417
------- ------- ------- ------- -------
Total property operating costs 2,511 2,622 2,177 137 7,447
------- ------- ------- ------- -------
PROPERTY OPERATING INCOME 4,775 5,375 5,475 32 15,657
======= ======= ======= ======= =======
Mills Share (1) $ 563 $ 612 $ 710 $ 15 1,900
======= ======= ======= ======= =======
</TABLE>
(1) Based on Mills' share of distributable cash flow for the three months
ended June 30, 1998, 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 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 7 AND IS NOT INTENDED 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 Other Total
------ ------ ------
<S> <C> <C> <C>
RENTAL REVENUES:
Minimum rent $4,350 $ 133 $4,483
Percentage rent 334 -- 334
Recoveries from tenants 1,808 4 1,812
Other revenue 397 22 419
------ ------ ------
Total rental revenues 6,889 159 7,048
PROPERTY OPERATING COSTS:
Recoverable from tenants 1,820 38 1,858
Other operating 469 158 627
------ ------ ------
Total property operating costs 2,289 196 2,485
------ ------ ------
PROPERTY OPERATING INCOME 4,600 (37) 4,563
====== ====== ======
Mills Share (1) $1,871 $ (24) $1,847
====== ====== ======
</TABLE>
(1) Based on Mills' share of distributable cash flow for the three months
ended June 30, 1997, excluding management fees.
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 6/98 % Shop GLA at 6/98 %
- ------- --------- ------- - -------- ------- -
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills 1,636,870 1,568,394 95.82% 627,860 591,914 94.27%
Franklin Mills 1,718,719 1,630,979 94.90% 596,253 508,513 85.28%
Sawgrass Mills 1,878,522 1,850,764 98.52% 676,617 668,859 98.85%
Gurnee Mills 1,653,482 1,589,542 96.13% 632,806 568,866 89.90%
----------------------------------------------- ----------------------------------------------
Total Mills 6,887,593 6,639,679 96.40% 2,533,536 2,338,152 92.29%
Butterfield 114,610 99,560 86.87% 72,677 57,627 79.29%
Coopers Crossing 173,509 173,509 100.00% 14,953 14,953 100.00%
Crosswinds 144,119 101,584 70.49% 23,298 17,535 75.26%
Fashion Place 147,950 127,058 85.88% 74,692 53,800 72.03%
Germantown 177,097 162,333 91.66% 130,341 115,577 88.67%
Gwinnett 194,719 186,079 95.56% 97,172 88,532 91.11%
Liberty Plaza 314,698 285,441 90.70% 38,210 8,953 23.43%
Montgomery Village 117,391 116,079 98.88% 80,986 79,674 98.38%
Mt. Prospect 298,600 288,763 96.71% 126,005 116,168 92.19%
West Falls Church 87,824 85,433 97.28% 47,743 45,352 94.99%
Western Hills 449,496 411,471 91.54% 134,980 126,563 93.76%
----------------------------------------------- ----------------------------------------------
2,220,013 2,037,310 91.77% 841,057 724,734 86.17%
----------------------------------------------- ----------------------------------------------
Total Wholly Owned 9,107,606 8,676,989 95.27% 3,374,593 3,062,886 90.76%
=============================================== ==============================================
Joint Ventures:
Ontario Mills 1,325,984 1,286,337 97.01% 521,514 481,867 92.40%
Grapevine Mills 1,241,769 1,168,157 94.07% 543,099 469,487 86.45%
Arizona Mills 1,209,524 1,143,615 94.55% 531,217 465,308 87.59%
----------------------------------------------- ----------------------------------------------
Total Joint Ventures 3,777,277 3,598,109 95.26% 1,595,830 1,416,662 88.77%
=============================================== ==============================================
Total Wholly Owned
and Joint Venture 12,884,883 12,275,098 95.27% 4,970,423 4,479,548 90.12%
=============================================== ==============================================
</TABLE>
<TABLE>
<CAPTION>
TOTAL VACANT S.F.
Vacancies
Project Anchor Small Shop Total
- ------- ------ ---------- -----
<S> <C> <C> <C>
Potomac Mills 32,530 35,946 68,476
Franklin Mills 0 87,740 87,740
Sawgrass Mills 20,000 7,758 27,758
Gurnee Mills 0 63,940 63,940
-------------------------------------------
Total Mills 52,530 195,384 247,914
Butterfield 0 15,050 15,050
Coopers Crossing 0 0 0
Crosswinds 36,772 5,763 42,535
Fashion Place 0 20,892 20,892
Germantown 0 14,764 14,764
Gwinnett 0 8,640 8,640
Liberty Plaza 0 29,257 29,257
Montgomery Village 0 1,312 1,312
Mt. Prospect 0 9,837 9,837
West Falls Church 0 2,391 2,391
Western Hills 29,608 8,417 38,025
-------------------------------------------
66,380 116,323 182,703
-------------------------------------------
Total Wholly Owned 118,910 311,707 430,617
===========================================
Joint Ventures:
Ontario Mills 0 39,647 39,647
Grapevine Mills 0 73,612 73,612
Arizona Mills 0 65,909 65,909
-------------------------------------------
Total Joint Ventures 0 179,168 179,168
===========================================
Total Wholly Owned
and Joint Venture 118,910 490,875 609,785
===========================================
</TABLE>
(1) Includes 962,163 square feet of GLA owned by certain anchor 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; Liberty Plaza- 13,741
square feet of GLA; West Falls Church- 2,240 square feet of GLA, and
Ontario Mills-125,000 square feet of GLA. Ground leases at Franklin
Mills of 152,370 square feet and Ontario Mills of 16,595 square feet
are also included.
(2) Anchor stores include all stores occupying more than 20,000 square
feet.
(3) GLA occupied is defined as all space leased (including GLA owned by
certain anchor store tenants) and for which rent is being paid as of
June 1, 1998, 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,
1998 multiplied by 12.
<TABLE>
<CAPTION>
No. of 1998 (1) No. of 1999
Leases Annualized Leases Annualized
Expiring Sq Ft Min. Rent psf Expiring Sq Ft Min. Rent psf
-------- ----- --------- --- -------- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Potomac Mills:
Anchors (2) - - $ - $ - - - $ - $ -
Majors (2) 1 37,960 341,640 9.00 1 42,212 316,590 7.50
Specialty 21 49,402 1,576,166 31.90 22 79,284 1,545,075 19.49
Food Court 2 1,567 85,208 54.38 - - - -
----------------------------------------------------- ---------------------------------------------------
24 88,929 $ 2,003,014 $ 22.52 23 121,496 $1,861,665 $15.32
Franklin Mills:
Anchors (2) - - $ - $ - 1 100,200 $ 547,725 $ 5.47
Majors (2) 1 25,127 162,069 6.45 1 40,232 370,134 9.20
Specialty 8 23,676 465,161 19.65 28 88,219 2,022,838 22.93
Food Court - - - - 7 5,602 306,600 54.73
----------------------------------------------------- ---------------------------------------------------
9 48,803 $ 627,230 $ 12.85 37 234,253 $3,247,297 $13.86
Sawgrass Mills:
Anchors (2) - - $ - $ - - - $ - $ -
Majors (2) - - - - 1 28,152 422,280 15.00
Specialty 7 15,906 357,202 22.46 6 9,305 329,340 35.39
Food Court - - - - 2 1,206 80,500 66.75
----------------------------------------------------- ---------------------------------------------------
7 15,906 $ 357,202 $ 22.46 9 38,663 $ 832,120 $21.52
Gurnee Mills:
Anchors (2) - - $ - $ - - - $ - $ -
Majors (2) 1 40,752 262,850 6.45 - - - -
Specialty 11 48,836 743,245 15.22 18 63,153 1,197,352 18.96
Food Court - - - - - - - -
----------------------------------------------------- ---------------------------------------------------
12 89,588 $ 1,006,095 $ 11.23 18 63,153 $1,197,352 $18.96
Total w/o Joint Ventures:
Anchors (2) - - $ - $ - 1 100,200 $ 547,725 $ 5.47
Majors (2) 3 103,839 766,559 7.38 3 110,596 1,109,004 10.03
Specialty 47 137,820 3,141,774 22.80 74 239,961 5,094,605 21.23
Food Court 2 1,567 85,208 54.38 9 6,808 387,100 56.86
===================================================== ===================================================
52 243,226 $ 3,993,541 $ 16.42 87 457,565 $7,138,434 $15.60
===================================================== ===================================================
</TABLE>
<TABLE>
<CAPTION>
No. of 2000 No. of After 2000
Leases Annualized Leases Annualized
Expiring Sq Ft Min. Rent psf Expiring Sq Ft Min. Rent
-------- ----- --------- --- -------- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Potomac Mills:
Anchors (2) - - $ - $ - 5 530,633 $ 3,009,957
Majors (2) 1 41,321 309,908 7.50 8 244,354 2,297,720
Specialty 31 81,911 2,076,555 25.35 106 371,132 8,728,886
Food Court 3 2,331 154,992 66.49 9 6,287 394,907
---------------------------------------------------- -------------------------------------------
35 125,563 $ 2,541,455 $ 20.24 128 1,152,406 $ 14,431,470
Franklin Mills:
Anchors (2) 1 60,115 $ 390,747 $ 6.50 3 268,619 $ 1,838,124
Majors (2) 1 32,637 297,256 9.11 7 234,564 2,254,568
Specialty 27 95,193 2,064,869 21.69 77 290,438 5,797,310
Food Court - - - - 8 5,385 204,976
---------------------------------------------------- -------------------------------------------
29 187,945 $ 2,752,872 $ 14.65 95 799,006 $ 10,094,978
Sawgrass Mills:
Anchors (2) 1 78,619 $ 255,512 $ 3.25 7 553,861 $ 3,765,905
Majors (2) 2 67,851 752,366 11.09 6 171,648 2,036,199
Specialty 68 218,275 5,195,345 23.80 117 398,636 10,248,405
Food Court 21 17,595 989,719 56.25 7 7,936 299,651
---------------------------------------------------- -------------------------------------------
92 382,340 $ 7,192,942 $ 18.81 137 1,132,081 $ 16,350,160
Gurnee Mills:
Anchors (2) - - $ - $ - 6 534,985 $ 2,792,255
Majors (2) - - - - 6 194,133 2,032,037
Specialty 18 55,705 1,027,039 18.44 106 382,349 7,432,678
Food Court 1 657 22,995 35.00 26 18,166 987,684
---------------------------------------------------- -------------------------------------------
19 56,362 $ 1,050,034 $ 18.63 144 1,129,633 $ 13,244,654
Total w/o Joint Ventures:
Anchors (2) 2 138,734 $ 646,259 $ 4.66 21 1,888,098 $ 11,406,241
Majors (2) 4 141,809 1,359,530 9.59 27 844,699 8,620,524
Specialty 144 451,084 10,363,808 22.98 406 1,442,555 32,207,279
Food Court 25 20,583 1,167,706 56.73 50 37,774 1,887,218
==================================================== ===========================================
175 752,210 $ 13,537,303 $ 18.00 504 4,213,126 $ 54,121,262
==================================================== ===========================================
</TABLE>
<TABLE>
<CAPTION>
No. of Total
Leases Annualized
psf Expiring Sq Ft Min. Rent psf
--- -------- ----- --------- ---
<S> <C> <C> <C> <C> <C>
Potomac Mills:
Anchors (2) $ 5.67 5 530,633 $ 3,009,957 $ 5.67
Majors (2) 9.40 11 365,847 3,265,858 8.93
Specialty 23.52 180 581,729 13,926,682 23.94
Food Court 62.81 14 10,185 635,107 62.36
------------ ---------------------------------------------------------------
$12.52 210 1,488,394 $20,837,604 $ 14.00
Franklin Mills:
Anchors (2) $ 6.84 5 428,934 $ 2,776,596 $ 6.47
Majors (2) 9.61 10 332,560 3,084,027 9.27
Specialty 19.96 140 497,526 10,350,178 20.80
Food Court 38.06 15 10,987 511,576 46.56
------------ ---------------------------------------------------------------
$12.63 170 1,270,007 $16,722,377 $ 13.17
Sawgrass Mills:
Anchors (2) $ 6.80 8 632,480 $ 4,021,417 $ 6.36
Majors (2) 11.86 9 267,651 3,210,845 12.00
Specialty 25.71 198 642,122 16,130,292 25.12
Food Court 37.76 30 26,737 1,369,870 51.23
------------ ---------------------------------------------------------------
$14.44 245 1,568,990 $24,732,424 $ 15.76
Gurnee Mills:
Anchors (2) $ 5.22 6 534,985 $ 2,792,255 $ 5.22
Majors (2) 10.47 7 234,885 2,294,887 9.77
Specialty 19.44 153 550,043 10,400,314 18.91
Food Court 54.37 27 18,823 1,010,679 53.69
------------ ---------------------------------------------------------------
$11.72 193 1,338,736 $16,498,135 $ 12.32
Total w/o Joint Ventures:
Anchors (2) $ 6.04 24 2,127,032 $12,600,225 $ 5.92
Majors (2) 10.21 37 1,200,943 11,855,617 9.87
Specialty 22.33 671 2,271,420 50,807,466 22.37
Food Court 49.96 86 66,732 3,527,232 52.86
============ ===============================================================
$12.85 818 5,666,127 $78,790,540 $ 13.91
============ ===============================================================
</TABLE>
(1) The 1998 amounts represent the total square footage and total
annualized minimum rent that will expire during the last six months of
1998.
(2) Anchor tenants are defined as any tenant whose GLA equals or exceeds
50,000 sq. ft. and Major tenants are defined as any tenant whose GLA
equals or exceeds 20,000 sq. ft. but is less than 50,000 sq. ft..
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,
1998 multiplied by 12.
<TABLE>
<CAPTION>
No. of 1998 (1) No. of 1999
Leases Annualized Leases Annualized
Expiring Sq Ft Min. Rent psf Expiring Sq Ft Min. Rent psf
-------- ----- --------- ---- -------- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ontario Mills:
Anchors(2) -- -- $ -- $ -- -- -- $ -- $ --
Majors (2) -- -- -- -- -- -- -- --
Specialty 1 2,739 96,000 35.05 4 7,675 208,140 27.12
Food Court -- -- -- -- -- -- -- --
-- ------- ---------- ------ -- ------- ---------- ------
1 2,739 $ 96,000 $35.05 4 7,675 $ 208,140 $27.12
Arizona Mills:
Anchors (2) -- -- $ -- $ -- -- -- $ -- $ --
Majors (2) -- -- -- -- -- -- -- --
Specialty -- -- -- -- -- -- -- --
Food Court -- -- -- -- -- 0 -- --
-- ------- ---------- ------ -- ------- ---------- ------
0 0 $ -- $ -- 0 0 $ -- $ --
Grapevine Mills:
Anchors (2) -- -- $ -- $ -- -- -- $ -- $ --
Majors (2) -- -- -- -- -- -- -- --
Specialty 2 2,836 81,058 28.58 2 7,979 202,672 25.40
Food Court -- -- -- -- -- -- -- --
-- ------- ---------- ------ -- ------- ---------- ------
2 2,836 $ 81,058 $28.58 2 7,979 $ 202,672 $25.40
Total with Joint Ventures:
Anchors (2) -- -- $ -- $ -- 1 100,200 $ 547,725 $ 5.47
Majors (2) 3 103,839 766,559 7.38 3 110,596 1,109,004 10.03
Specialty 50 143,395 3,318,832 23.14 80 255,615 5,505,417 21.54
Food Court 2 1,567 85,208 54.38 9 6,808 387,100 56.86
-- ------- ---------- ------ -- ------- ---------- ------
55 248,801 $4,170,599 $16.76 93 473,219 $7,549,246 $15.95
== ======= ========== ====== == ======= ========== ======
Community Centers:
Anchors (2) 1 56,949 $ 194,300 $ 3.41 -- -- $ -- $ --
Majors (2) -- -- -- -- -- -- -- --
Specialty 14 29,962 389,376 13.00 28 84,028 1,170,674 13.93
Food Court -- -- -- -- -- -- -- --
-- ------- ---------- ------ -- ------- ---------- ------
15 86,911 $ 583,676 $ 6.72 28 84,028 $1,170,674 $13.93
== ======= ========== ====== == ======= ========== ======
</TABLE>
<TABLE>
<CAPTION>
No. of 2000 No. of
Leases Annualized Leases
Expiring Sq Ft Min. Rent psf Expiring Sq Ft
-------- ----- --------- --- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Ontario Mills:
Anchors(2) -- -- $ -- $ -- 4 286,023
Majors (2) -- -- -- -- 12 393,447
Specialty 6 13,267 328,742 24.78 127 429,863
Food Court -- -- -- -- 3 11,728
--- ------- ---------- ----- --- ---------
6 13,267 $ 328,742 $24.78 146 1,121,061
Arizona Mills:
Anchors (2) -- -- $ -- $ -- 5 385,083
Majors (2) -- -- -- -- 10 293,224
Specialty 9 26,582 698,472 26.28 121 424,964
Food Court -- -- -- -- 1 13,762
--- ------- ---------- ----- --- ---------
9 26,582 $ 698,472 $26.28 137 1,117,033
Grapevine Mills:
Anchors (2) -- -- $ -- $ -- 3 315,702
Majors (2) -- -- -- -- 13 382,968
Specialty 9 17,277 473,076 27.38 127 429,863
Food Court -- -- -- -- 1 11,532
--- ------- ---------- ----- --- ---------
9 17,277 $ 473,076 $27.38 144 1,140,065
Total with Joint Ventures:
Anchors (2) 2 138,734 $ 646,259 $ 4.66 33 2,874,906
Majors (2) 4 141,809 1,359,530 9.59 62 1,914,338
Specialty 168 508,210 11,864,098 23.34 781 2,727,245
Food Court 25 20,583 1,167,706 56.73 55 74,796
--- ------- ---------- ----- --- ---------
199 809,336 $15,037,593 $18.58 931 7,591,285
=== ======= ========== ===== === =========
Community Centers:
Anchors (2) -- -- $ -- $ -- 8 650,811
Majors (2) 1 21,007 273,091 13.00 17 545,195
Specialty 25 105,323 1,137,560 10.80 129 528,054
Food Court -- -- -- -- -- --
--- ------- ---------- ----- --- ---------
26 126,330 $ 1,410,651 $11.17 154 1,724,060
=== ======= ========== ===== === =========
</TABLE>
<TABLE>
<CAPTION>
After 2000 No. of Total
Annualized Leases Annualized
Min. Rent psf Expiring Sq Ft Min. Rent psf
--------- --- -------- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C>
Ontario Mills:
Anchors(2) $ 1,883,132 $ 6.58 4 286,023 $ 1,883,132 $ 6.58
Majors (2) 4,640,544 11.79 12 393,447 4,640,544 11.79
Specialty 9,736,702 22.65 138 453,544 10,369,584 22.86
Food Court 593,155 50.58 3 11,728 593,155 50.58
------------ ------ --- --------- ------------ ------
$ 16,853,533 $15.03 157 1,144,742 $ 17,486,415 $15.28
Arizona Mills:
Anchors (2) $ 3,144,419 $ 8.17 5 385,083 $ 3,144,419 $ 8.17
Majors (2) 4,160,598 14.19 10 293,224 4,160,598 14.19
Specialty 9,736,785 22.91 130 451,546 10,435,257 23.11
Food Court 832,502 60.49 1 13,762 832,502 60.49
------------ ------ --- --------- ------------ ------
$ 17,874,304 $16.00 146 1,143,615 $ 18,572,776 $16.24
Grapevine Mills:
Anchors (2) $ 3,654,352 $11.58 3 315,702 $ 3,654,352 $11.58
Majors (2) 5,028,925 13.13 13 382,968 5,028,925 13.13
Specialty 9,741,835 22.66 140 457,955 10,498,641 22.93
Food Court 691,920 60.00 1 11,532 691,920 60.00
------------ ------ --- --------- ------------ ------
$ 19,117,032 $16.77 157 1,168,157 $ 19,873,838 $17.01
Total with Joint Ventures:
Anchors (2) $ 20,088,144 $ 6.99 36 3,113,840 $ 21,282,128 $ 6.83
Majors (2) 22,450,591 11.73 72 2,270,582 25,685,684 11.31
Specialty 61,422,601 22.52 1,079 3,634,465 82,110,948 22.59
Food Court 4,004,795 53.54 91 103,754 5,644,809 54.41
------------ ------ --- --------- ------------ ------
$107,966,131 $14.22 1,278 9,122,641 $134,723,569 $14.77
============ ====== ===== ========= ============ ======
Community Centers:
Anchors (2) $ 4,211,709 $ 6.47 9 707,760 $ 4,406,009 $ 6.23
Majors (2) 3,734,233 6.85 18 566,202 4,007,324 7.08
Specialty 6,886,247 13.04 196 747,367 9,583,857 12.82
Food Court -- -- -- -- -- --
------------ ------ --- --------- ------------ ------
$ 14,832,189 $ 8.60 223 2,021,329 $ 17,997,190 $ 8.90
============ ====== ===== ========= ============ ======
</TABLE>
(1) The 1998 amounts represent the total square footage and total
annualized minimum rent that will expire during the last six months of
1998.
(2) Anchor tenants are defined as any tenant whose GLA equals or exceeds
50,000 sq. ft. and Major tenants are defined as any tenant whose GLA
equals or exceeds 20,000 sq. ft. but is less than 50,000 sq. ft..
16
<PAGE> 14
THE MILLS CORPORATION
Rental Rates
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,
1998.
<TABLE>
<CAPTION>
Anchor Stores
-----------------------------------------------------------------
Store Openings Store Closings Releasing
During Year During Year Spread (1)
-------------------- -------------------- ----------------
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 $ 14.00 27,068 $ 10.00 32,530 $ 4.00 40.00%
Franklin Mills -- -- -- -- -- --
Gurnee Mills -- -- -- -- -- --
Sawgrass Mills -- -- -- -- -- --
------- ------- ------- ------- -------
Total Mills $ 14.00 27,068 $ 10.00 32,530 $ 4.00 40.00%
======= ======= ======= ======= ======= =======
Ontario Mills $ -- -- $ -- -- $ -- --
Grapevine Mills -- -- -- -- -- --
Arizona Mills -- -- -- -- -- --
------- ------- ------- ------- -------
Total Joint Ventures $ -- -- $ -- -- $ -- --
======= ======= ======= ======= ======= =======
Community Centers $ 6.00 131,812 $ -- -- N/A N/A
======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Specialty Stores
----------------------------------------------------------------------------
Store Openings Store Closings Releasing
During Year During Year Spread (1)
------------------------- -------------------- -----------------------
Average Average
Base Rent Total Base Rent Total
Per Sq. Ft.(2) Sq. Ft. Per Sq. Ft. Sq. Ft.
------------ ------ ---------- -------
<S> C> <C> <C> <C> <C> <C>
Potomac Mills $ 25.12 31,008 $ 26.47 28,450 $ (1.35) -5.10%
Franklin Mills 19.71 60,327 17.25 63,883 2.46 14.24%
Gurnee Mills 28.37 19,561 19.27 31,784 9.10 47.21%
Sawgrass Mills 29.22 29,500 24.99 30,564 4.23 16.93%
------- ------- ------- ------- ------- -------
Total Mills $ 24.11 140,396 $ 20.89 154,681 $ 3.22 15.41%
======= ======= ======= ======= ======= =======
Ontario Mills $ 29.58 7,549 $ 26.61 19,431 $ 2.97 11.18%
Grapevine Mills 25.03 6,764 23.79 20,357 1.24 5.21%
Arizona Mills -- -- 26.90 6,165 N/A N/A
------- ------- ------- ------- ------- -------
Total Joint Ventures $ 27.43 14,313 $ 25.40 45,953 $ 2.03 8.00%
======= ======= ======= ======= ======= =======
Community Centers $ 13.76 26,614 $ 18.59 12,501 $ (4.83) -26.00%
======= ======= ======= ======= ======= =======
</TABLE>
(1) The releasing spread is calculated as the difference between per square
foot openings and per square foot closings for the six months ended
June 30, 1998. Openings and closings include renewals but exclude
exercised options. The Releasing Spreads above are based on activity
for the six months ended June 30, 1998. Due to this limited time
period, the indicated spreads may not be representative of annualized
leasing spreads.
(2) The average base rent per square foot for store openings excludes
initial lease up.
17
<PAGE> 15
THE MILLS CORPORATION
SUMMARY OF OUTSTANDING CONSOLIDATED INDEBTEDNESS
(DOLLARS IN THOUSANDS)
AS OF JUNE 30, 1998
<TABLE>
<CAPTION>
Principal
Balance Annual Interest
Mortgage/Loan (000's) Term Rate
- ------------- -------- ---- --------------
<S> <C> <C> <C>
Potomac Mills/Gurnee Mills:
Tranche A $207,597 Fixed 6.905%
Tranche B 27,000 Fixed 7.021%
Tranche C 15,000 Fixed 7.235%
Tranche D 30,000 Fixed 7.701%
Franklin Mills and Liberty Plaza 128,919 Fixed 7.813%
Sawgrass Mills:
Tranche A 115,000 Fixed 6.450%
Tranche B 10,000 Variable with cap 85 bp over Libor (6)
Tranche C 20,000 Variable with cap 230 bp over Libor (6)
Sawgrass Mills - Phase II 18,000 Fixed 6.970%
Western Hills 14,949 Fixed 7.675%
Nine Community Centers 68,177 Fixed 7.160%
Corporate Misc 936 Fixed 8.250%
Corporate Misc 2,400 Fixed 6.150%
Corporate Line of Credit 60,000 Variable 140 bp over Libor
Corporate Misc 15,000 Variable 125 bp over Libor
Sawgrass Residual 4,700 Variable 165 bp over Libor
========
Total $737,678
========
</TABLE>
<TABLE>
<CAPTION>
Annual Earliest day Recourse to
Maturity Interest at which debt Company or
Mortgage/Loan Date (000's) can be repaid Op. Ptnrshp
- ------------- ---------- ------- ------------- -----------
<S> <C> <C> <C> <C>
Potomac Mills/Gurnee Mills:
Tranche A 12/17/26 (1) $14,335 (2) 0%
Tranche B 12/17/26 (1) 1,896 (2) 0%
Tranche C 12/17/26 (1) 1,085 (2) 0%
Tranche D 12/17/26 (1) 2,310 (2) 0%
Franklin Mills and Liberty Plaza 6/1/27 (3) 10,073 (4) 0%
Sawgrass Mills:
Tranche A 1/18/01 7,418 (5) 0%
Tranche B 1/18/01 651 (5), (7) 0%
Tranche C 1/18/01 1,592 (5), (7) 0%
Sawgrass Mills - Phase II 1/18/01 1,255 (7), (8) 100% (15)
Western Hills 1/1/99 1,147 (9) 0%
Nine Community Centers 1/31/01 4,881 (10) 0%
Corporate Misc 10/31/00 77 (12) 0%
Corporate Misc 7/15/98 148 (12) 0%
Corporate Line of Credit 4/1/00 4,236 (8), (11) 100%
Corporate Misc 1/18/99 1,037 (14) 100%
Sawgrass Residual 1/18/01 358 (13) 0%
=======
Total $52,499
=======
</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 at least 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. On September 4, 1998, the loan was
increased by $13,000 to $143,000. The additional $13,000 will bear an
interest rate at 6.22%.
(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 5.6602%, which was the rate at June 30,
1998.
(8) Prepayable, in whole or in part, at any time without prepayment penalty.
(9) This indebtedness may be prepaid, 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 is 1.5% of the outstanding principal. During
the last three months of its term, the indebtedness may be prepaid without
penalty.
(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, which would equal to the greater of
(i) 1% of the principal balance, or (ii) a yield preservation payment.
(11) The total commitment under the Line of Credit is $100,000. Funds are
available subject to certain performance measures and restrictive
covenants. This loan bears interest at a variable rate ranging from 100 bp
to 165 bp over Libor subject to certain leverage tests (Libor + 140 bp at
6/30/98). The line of credit matures April 1, 2000.
(12) Primarily corporate debt with maturities under one year. Prepayable, in
whole or in part, at any time without prepayment penalty.
(13) Prepayable, in whole or in part, at any time, upon 3 days prior notice to
lender without prepayment penalty.
(14) Prepayable, in whole or in part, at any time, upon 5 days prior notice to
lender without prepayment penalty.
(15) Principal is guaranteed by the Company, reduced as follows: (i) as
of closing, the "Guaranteed Amount" was 100% of the loan amount (ii) upon
achieving a DSC ratio of 1.35 and a debt yield of 12.5% will reduce to
0%.
18
<PAGE> 16
THE MILLS CORPORATION
SUMMARY OF OUTSTANDING UNCONSOLIDATED INDEBTEDNESS
(Dollars in thousands)
AS OF JUNE 30, 1998
<TABLE>
<CAPTION>
Principal
Balance Total Annual Interest Maturity
Mortgage/Loan (000's) Commitment Term Rate Date
- ------------- --------- ---------- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Arizona Mills $140,002 $145,000 Variable 130 bp over Libor (4),(5) 2/1/02
Grapevine Mills 130,597 155,000 Variable 120 bp over Libor (4) 4/24/01
Ontario Mills 120,000 120,000 Fixed 7.277% (6) 2/6/02
City Block at Orange 13,397 136,000 Variable 165 bp over Libor (4),(7) 1/22/02
Sawgrass Phase III 614 44,000 Variable 165 bp over Libor (4) 1/18/01
======== ========
Total $404,610 $600,000
======== ========
</TABLE>
<TABLE>
<CAPTION>
Annual Earliest day Recourse to
Interest at which debt Company or
Mortgage/Loan (000's) can be repaid Op. Ptnrshp
- ------------- ------- ------------- -----------
<S> <C> <C> <C>
Arizona Mills 9,744 (1) 18.4% (8)
Grapevine Mills 8,959 (2) 15.0% (9)
Ontario Mills 8,732 (3) 0.0%
City Block at Orange 979 (3) 100.0% (10)
Sawgrass Phase III 45 (1) 100.0% (11)
=======
Total $28,459
=======
</TABLE>
(1) This indebtedness may be prepaid, in whole or in part, upon 5 business
days notice to the Administrative Agent. provided that (I) any partial
prepayment shall
(2) This indebtedness may be prepaid, in whole or in part, upon 3 business
days notice to the Administrative Agent.
(3) The Company shall have the right to make prepayments of the Loan, without
penalty. or premium (other than the imposition of interest at the Default
Rate
(4) Calculated using 30-day LIBOR at 5.6602%, which was the rate at June 30,
1998.
(5) The Applicable Margin may be reduced to 115 basis points if the Company
receives a "private letter bank loan rating equal to or better than "A-".
(6) Ontario Mills purchased a SWAP agreement which effectively fixes the
interest rate at a weighted average of 7.277%. The SWAP fixes the interest
rates in the following manner - 7.21% on the first $70 million and 7.37%
on the remaining $50 million. The SWAP agreement matures simultaneously
with the debt on 2/6/02. Upon early termination of the SWAP agreement,
Ontario Mills shall pay or receive commercially reasonable breakage costs.
(7) Interest Rate shall be LIBOR plus (a) 165 basis points until the following
conditions have been satisfied: (i) the Construction Phase Completion Date
has occurred, (ii) the Grand Opening Date has occurred, (iii) 33% of the
Specialty Space has been and continues to be leased to Specialty Tenants
and 55% of the Anchor Space has been and continues to be leased to
Anchors, (iv) the DSC Ratio for any Calculation Period is equal to or
greater than 1.00 and (v) no Event of Default is continuing. Once these
conditions have been satisfied the Interest Rate shall be LIBOR plus 150
bp. A further reduction to Libor plus 135 bp shall occur once the DSC
Ratio for any period is equal to or greater than 1.25. Interest Rate will
reduce to LIBOR plus 125 bp when the DSC Ratio for any period is equal to
or greater than 1.40. Interest Rate will reduce to LIBOR plus 115 bp when
the DSC Ratio for any period is equal to or greater than 1.50.
(8) Principal is guaranteed on a several basis by each partner (the Company's
share is 36.8%) reduced as follows: (i) as of closing, the "Guaranteed
Amount" was 100% of Loan Amount; (ii) upon completion of construction,
opening and achieving $16,000 of "In-Place Minimum Rent," the Guaranteed
Amount will reduce to 50%; (iii) upon achieving a 13.5% "Debt Yield,"
("Debt Yield" is defined as EBITDA to total loan commitment) the
Guaranteed Amount will reduce to 25% of the Loan Amount; (iv) upon
achieving a 15% "Debt Yield," the Guaranteed Amount will reduce to 15% of
the Loan Amount; and (v) upon achieving a 17% Debt Yield and an appraised
value indicating a loan to value ratio of no greater than 55%, the
Guaranteed Amount will reduce to $0. As of June 30, 1998, the Company's
share of the Guaranteed Amount was 18.4% according to the above formula.
(9) Principal is guaranteed joint and several between the Company and Simon
DeBartolo Group, Inc. and at June 30, 1998, the amount guaranteed was 15%
of the outstanding principal balance. On August 18, 1998, this loan was
repaid in full with the proceeds of a new $155,000 non-recourse permanent
loan. This new loan has a ten year term with a fixed interest rate of
6.47%. The Company and Simon DeBartolo Group, Inc. have guaranteed $5,000
each on this new loan. This guarantee terminates when the debt service
coverage ratio for any twelve consecutive months is equal to, or exceeds
1.50 to 1.00.
(10) Principal is guaranteed by the Company, reduced as follows: (i) as of
closing, the "Guaranteed Amount" was 100% of Loan Amount; (ii) upon
construction completion, grand opening and a Debt Service Coverage ratio
of 1.00 the Guaranteed Amount will reduce to 50%; (ii) upon achieving a
DSC Ratio of 1.25 the Guaranteed Amount will reduce to 25%; (iii) upon
achieving a DSC Ratio of 1.40 the Guaranteed Amount will reduce to 10%;
and (iv) upon achieving a DSC Ratio of 1.50 the Guaranteed Amount will
reduce to 0%.
(11) Principal is guaranteed by the Company, reduced as follows: (i) as
of closing, the "Guaranteed Amount" was 100% of the loan amount (ii) upon
achieving a DSC Ratio of 1.35, and a debt yield greater than or equal to
12.5% will reduce to 0%.
19
<PAGE> 17
THE MILLS CORPORATION
GROSS SALES
AS OF JUNE 30, 1998
<TABLE>
<CAPTION>
Twelve Months ended June 30, 1998 Twelve Months ended June 30, 1997
---------------------------------------- ------------------------------------------------
Sq Ft Sales psf Sq Ft Sales psf
----- ----- --- ----- ----- ---
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills:
Anchor/Majors 900,790 $ 182,803,850 $ 203 963,921 $ 187,279,375 $ 194
Specialty 569,668 185,316,710 325 570,592 172,231,896 302
Temporary/Kiosk - 5,658,316 - - 3,149,190 -
--------- ------------- ----- --------- ------------- -----
1,470,458 $ 373,778,876 $ 254 1,534,513 $ 362,660,461 $ 236
Franklin Mills:
Anchor/Majors 953,450 $ 163,778,433 $ 172 890,598 $ 166,007,612 $ 186
Specialty 486,816 144,027,916 296 488,811 133,376,417 273
Temporary/Kiosk - 6,715,160 - - 5,972,351 -
--------- ------------- ----- --------- ------------- -----
1,440,266 $ 314,521,509 $ 218 1,379,409 $ 305,356,380 $ 221
Sawgrass Mills:
Anchor/Majors 1,178,685 $ 363,419,337 $ 308 1,172,016 $ 361,023,125 $ 308
Specialty 662,902 302,721,081 457 652,186 278,106,635 426
Temporary/Kiosk - 13,849,610 - - 12,485,546 -
--------- ------------- ----- --------- ------------- -----
1,841,587 $ 679,990,028 $ 369 1,824,202 $ 651,615,306 $ 357
Gurnee Mills:
Anchor/Majors 768,982 $ 122,817,959 $ 160 656,360 $ 100,605,643 $ 153
Specialty 569,449 156,873,021 275 556,850 144,133,417 259
Temporary/Kiosk - 8,238,684 - - 7,077,134 -
--------- ------------- ----- --------- ------------- -----
1,338,431 $ 287,929,664 $ 215 1,213,210 $ 251,816,194 $ 208
Ontario Mills:
Anchor/Majors 815,486 $ 136,057,937 $ 167 N/A (3) N/A (3) N/A (3)
Specialty 464,882 162,477,554 350 N/A (3) N/A (3) N/A (3)
Temporary/Kiosk - 7,244,442 - N/A (3) N/A (3) N/A (3)
--------- ------------- ----- --------- ------------- -----
1,280,368 $ 305,779,933 $ 239 N/A (3) N/A (3) N/A (3)
Total Mills
Anchor/Majors 4,617,393 $ 968,877,516 $ 210 3,682,895 $ 814,915,755 $ 221
Specialty 2,753,717 951,416,282 346 2,268,439 727,848,365 321
Temporary Kiosk - 41,706,212 - - 28,684,221 -
--------- ------------- ----- --------- ------------- -----
7,371,110 $ 1,962,000,010 $ 266 5,951,334 $ 1,571,448,341 $ 264
========= =============== ===== ========= =============== =====
</TABLE>
<TABLE>
<CAPTION>
Twelve Months ended December 31, 1997
---------------------------------------------
Sq Ft Sales psf
----- ----- ---
<S> <C> <C> <C>
Potomac Mills:
Anchor/Majors 910,288 $ 184,834,466 $ 203
Specialty 566,004 179,387,582 317
Temporary/Kiosk - 4,490,966 -
--------- ------------- -----
1,476,292 $ 368,713,014 $ 250
Franklin Mills:
Anchor/Majors 904,677 $ 163,692,900 $ 181
Specialty 487,463 142,341,207 292
Temporary/Kiosk - 6,388,496 -
--------- ------------- -----
1,392,140 $ 312,422,603 $ 224
Sawgrass Mills:
Anchor/Majors 1,173,109 $ 365,821,871 $ 312
Specialty 655,233 295,180,646 450
Temporary/Kiosk - 13,962,865 -
--------- ------------- -----
1,828,342 $ 674,965,382 $ 369
Gurnee Mills:
Anchor/Majors 681,640 $ 103,395,397 $ 152
Specialty 561,633 150,055,052 267
Temporary/Kiosk - 8,860,293 -
--------- ------------- -----
1,243,273 $ 262,310,742 $ 211
Ontario Mills:
Anchor/Majors 768,629 $ 133,724,268 $ 174
Specialty 454,598 159,284,318 350
Temporary/Kiosk - 6,866,186 -
--------- ------------- -----
1,223,227 $ 299,874,772 $ 245
Total Mills
Anchor/Majors 4,438,343 $ 951,468,902 $ 214
Specialty 2,724,931 926,248,805 340
Temporary Kiosk - 40,568,806 -
--------- ------------- -----
7,163,274 $ 1,918,286,513 $ 268
========= =============== =====
</TABLE>
(1) Grapevine Mills and Arizona Mills are excluded from this analysis since
they did not open until October 1997 and November 1997, respectively and
do not have 12 months of sales data for comparison.
(2) Anchor/Major sales include sales from certain anchor tenants that own
their parcels.
(3) Sales data for Ontario Mills for the Twelve Months ended June 30, 1997 is
not available as Ontario Mills did not open until November 1996.
20
<PAGE> 18
THE MILLS CORPORATION
CAPITAL EXPENDITURES
EXISTING MILLS AND EXISTING COMMUNITY CENTERS COMBINED (9)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1998 1997 1996
--------------- ------------- -------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 506,260 $ 435,742 $ 328,974
Per Square Foot (2) 0.04 0.05 0.04
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 2,160,759 $ 5,143,206 $ 4,228,743
Per Square Foot Improved (4) 8.30 11.90 12.71
Per Square Foot (2) 0.18 0.62 0.52
TOTAL RECURRING COSTS
Costs $ 2,667,019 $ 5,579,948 $ 4,557,717
Per Square Foot (2) 0.22 0.67 0.56
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 2,342,536 (7) $ 41,571,485 (7) $ 8,079,220
Per Square Foot Improved (5) 23.78 76.69 44.93
Per Square Foot (2) 0.20 5.03 0.99
WORK IN PROCESS (6)
Cummulative Costs $ 7,640,937 $ 4,703,992 --
Cummulative Per Square Foot Improved (8) 37.91 14.59 --
</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
(3) Tenant Improvements/Leasing costs include tenant specific costs including
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) Includes expansion costs at Franklin Mills and Gurnee Mills and
non-recurring remerchandising costs. Excludes costs relating to Sawgrass
Phase III expansion.
(8) Calculated as Work In Process divided by GLA of all space with work in
process.
(9) Includes Ontario Mills, Grapevine Mills, and Arizona Mills costs and
square footages for second generation tenants.
21
<PAGE> 19
THE MILLS CORPORATION
CAPITAL EXPENDITURES
EXISTING MILLS (9)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1998 1997 1996
---------------- -------------- --------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 388,271 $ 388,003 $ 246,522
Per Square Foot (2) 0.04 0.06 0.04
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 1,352,614 $ 4,518,073 $ 3,549,312
Per Square Foot Improved (4) 11.47 13.35 12.94
Per Square Foot (2) 0.14 0.75 0.60
TOTAL RECURRING COSTS
Costs $ 1,740,885 $ 4,906,076 $ 3,795,834
Per Square Foot (2) 0.18 0.81 0.64
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 1,999,645 (7) $ 41,010,815 (7) $ 7,746,906
Per Square Foot Improved (5) 28.93 78.37 50.00
Per Square Foot (2) 0.21 6.77 1.30
WORK IN PROCESS (6)
Cummulative Costs $ 6,642,563 $ 3,989,739 --
Cummulative Per Square Foot Improved (8) 57.11 31.27 --
</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
(3) Tenant Improvements/Leasing costs include tenant specific costs including
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) Includes expansion costs at Franklin Mills and Gurnee Mills and
non-recurring remerchandising costs. Excludes costs relating to Sawgrass
Phase III expansion.
(8) Calculated as Work In Process divided by GLA of all space with work in
process.
(9) Includes Ontario Mills, Grapevine Mills, and Arizona Mills costs and
square footages for second generation tenants.
22
<PAGE> 20
THE MILLS CORPORATION
CAPITAL EXPENDITURES
COMMUNITY CENTERS
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1998 1997 1996
------------- ----------- ------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 117,989 $ 47,739 $ 82,452
Per Square Foot (2) 0.05 0.02 0.04
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 808,145 $ 625,133 $ 679,431
Per Square Foot Improved (4) 5.68 6.68 15.06
Per Square Foot (1) 0.37 0.28 0.31
TOTAL RECURRING COSTS
Costs $ 926,134 $ 672,872 $ 761,883
Per Square Foot (2) 0.42 0.31 0.35
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 342,891 $ 560,670 $ 332,314
Per Square Foot Improved (5) 11.66 13.73 13.35
Per Square Foot (2) 0.16 0.25 0.15
WORK IN PROCESS (6)
Cummulative Costs $ 998,374 $ 714,253 --
Cummulative Per Square Foot Improved (7) 11.71 3.66 --
</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 tenants) of the Community Centers
(3) Tenant Improvements/Leasing costs include tenant specific costs including
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.
23
