<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:
- ------------------------------------------------- -----------------------
March 31, 1999 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
- --------------------------------------------------------------------------------
<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 March 31, 1999, 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 March 31, 1999
</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: June 17, 1999 THE MILLS CORPORATION
By: /s/ Kenneth R. Parent
----------------------
Kenneth R. Parent
Executive Vice President, Finance
and Chief Financial Officer
(Principal Financial
and Accounting Officer)
<PAGE> 1
THE MILLS CORPORATION
SUPPLEMENTAL INFORMATION
TABLE OF CONTENTS
AS OF MARCH 31, 1999
<TABLE>
<CAPTION>
INFORMATION PAGE
- ----------- ----
<S> <C>
Overview 5-6
Summary of Operating Properties 7
Summary of Projects Under Development 8
Supplemental Financial Data 9
Property Operating Income 10-11
Unconsolidated Joint Venture Net Income and Funds From Operations 12
Occupancy Analysis 13
Lease Expiration Schedule 14-15
Rental Rate Analysis 16
Average Rent Analysis 17
Summary of Outstanding Consolidated Indebtedness 18
Summary of Outstanding Unconsolidated Indebtedness 19
Mills Gross Sales Analysis 20
Mills Comparable Sales Analysis 21
Capital Expenditures 22-24
</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 March 31, 1999, 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, retail and entertainment-oriented centers (the
"Mills" and "Block" projects) and community shopping centers (the "Community
Centers"). As of March 31, 1999, the Operating Partnership owns or holds an
interest in the following operating properties:
<TABLE>
<CAPTION>
Mills Location (Metropolitan Market Served)
----- -------------------------------------
<S> <C>
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)
Block
-----
The Block at Orange Orange, CA (Los Angeles)
Community Centers
-----------------
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
pre-development or development of a number of new projects, including Sawgrass
Phase III Expansion (Sunrise, FL), Katy Mills (Houston, TX), Concord Mills
(Charlotte, NC), Opry Mills (Nashville, TN), Arundel Mills (Dorchester, MD),
Vaughan Mills (Toronto, Canada), and Meadowlands Mills (Carlstadt, NJ).
PURPOSE OF FILING
The purpose of this supplemental information package is to provide supplemental
information regarding the operations, assets and liabilities as of March 31,
1999 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", "expect", "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 Mills under construction/development as of March 31, 1999:
<TABLE>
<CAPTION>
Anchor
Total Store
Metropolitan Year Ownership GLA GLA
Name/Location Area Serviced Opened Percentage (Sq. Ft.) (1) (sq.ft.) (1)
- ----------------------- ------------- ------ ---------- --------------- --------------
<S> <C> <C> <C> <C> <C>
MILLS
Potomac Mills............... Washington D.C./ 1985 100% 1,637,065 996,551
Woodbridge, VA Baltimore
Franklin Mills.............. Philadelphia/ 1989 100% 1,739,849 1,143,476
Philadelphia, PA Wilmington
Sawgrass Mills.............. Fort Lauderdale, FL/ 1990 100% 1,904,822 1,228,205
Sunrise, FL Miami/Palm Beach
Gurnee Mills................ Chicago/Milwaukee 1991 100% 1,653,978 1,020,676
Gurnee, IL
Ontario Mills............... Los Angeles 1996 50% 1,345,096 (4) 825,820
Ontario, CA
Grapevine Mills............. Dallas/Fort Worth 1997 37.5% 1,241,410 (5) 698,010
Grapevine, TX
Arizona Mills............... Phoenix 1997 36.8% 1,233,893 700,731
Tempe, AZ
----------------- -------------
MILLS TOTALS/WEIGHTED AVERAGES... 10,756,113 6,613,469
================= =============
The Block at Orange Los Angeles/Orange 1998 50% 642,554 359,701
County ================= =============
COMMUNITY CENTERS (11 CENTERS) 2,220,320 1,363,129
================= =============
<CAPTION>
Specialty 12 Mos. Ended
Store Annualized No. of 3/31/99
GLA Percent Base Anchor Specialty Store
Name/Location (sq.ft.) (1) Leased (2) Rent (6) Stores (3) Sales PSF
- ----------------------- -------------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
MILLS
Potomac Mills.............. 640,514 96% $ 21,159,941 17 $ 320
Woodbridge, VA
Franklin Mills............... 596,373 97% 18,467,441 19 299
Philadelphia, PA
Sawgrass Mills............ 676,617 98% 25,136,733 20 445
Sunrise, FL
Gurnee Mills................ 633,302 97% 17,379,709 16 281
Gurnee, IL
Ontario Mills................ 519,276 99% 18,473,903 18 347
Ontario, CA
Grapevine Mills............. 543,400 97% 20,558,779 16 296
Grapevine, TX
Arizona Mills................ 533,162 97% 19,343,692 15 294
Tempe, AZ
------------- ----------------- -------------
MILLS TOTALS/WEIGHTED AVERAGES... 4,142,644 97% $ 140,520,198 121 $ 330
============= ================= =============
The Block at Orange 282,853 94% $ 14,352,344 9 N/A (7)
============= ================= =============
COMMUNITY CENTERS (11 CENTERS) 857,191 88% $ 18,565,161 28
============= ================= =============
</TABLE>
(1) Includes 963,173 square feet of GLA owned by certain anchor store tenant as
follows: Potomac Mills-80,000 square feet of GLA; Franklin Mills-209,612
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) GLA leased is defined as follows: (I) all space leased and for which rent
is being paid as of March 1, 1999, excluding tenants with leases having a
term of less than 1 year plus GLA owned by store tenants described in
footnote (1).
(3) Anchor stores include all stores occupying more than 20,000 square feet and
certain store tenants 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) Annualized Base Rent is defined as the contractual minimum rent of tenants
comprising GLOA at 3/99 multiplied by 12, excluding tenants as noted in
footnote (1) and ground leases of 152,370 square feet at Franklin Mills and
16,595 square feet at Ontario Mills.
(7) 1999 sales per square foot information is not available for The Block at
Orange which commenced business in November 1998.
7
<PAGE> 5
THE MILLS CORPORATION
SUMMARY OF PROPERTIES
MILLS UNDER CONSTRUCTION/DEVELOPMENT
<TABLE>
<CAPTION>
Estimated
Anticipated Approx. Aggregate
Metropolitan Opening GLA Company Project
Name/Location Area Serviced Date (1) (Sq. Ft.) (1,2) Ownership Cost (1)
- --------------------- ------------- ----------- --------------- --------- -----------
(millions)
<S> <C> <C> <C> <C> <C>
Sawgrass Phase III Expansion Fort Lauderdale, FL/ Spring 300,000 50.0% $ 68
Sunrise, FL Miami/Palm Beach 1999 (6)
Katy Mills Houston Fall 1,200,000 62.5% $ 225
Houston, TX 1999
Concord Mills Charlotte Fall 1,400,000 37.5% $ 211
Concord, NC 1999
Opry Mills Nashville Spring 1,200,000 66.7% $ 222
Nashville, TN 2000
Arundel Mills Baltimore/ Fall 1,300,000 N/A (3) $ 222
Dorchester, MD Washington D.C. 2000
Vaughan Mills Toronto N/A (3) 1,400,000 N/A (3) N/A (3)
Toronto, Canada
Meadowlands Mills New York City/ N/A (3) N/A (3) 66.7% N/A (3)
Carlstadt, NJ Northern New Jersey
<CAPTION>
Anchor
Required Store
Equity from Percentage Tenant
Name/Location Company Pre-leased (7) Commitments
- --------------------- ----------- -------------- -----------
(millions)
<S> <C> <C> <C>
Sawgrass Phase III Expansion $ - 87% 4
Sunrise, FL
Katy Mills 26.25 57% 13
Houston, TX
Concord Mills 12.50 61% 11
Concord, NC
Opry Mills 50.00 25% 7
Nashville, TN
Arundel Mills N/A (3) N/A (4) N/A (4)
Dorchester, MD
Vaughan Mills N/A (3) N/A (4) N/A (4)
Toronto, Canada
Meadowlands Mills 35.00 N/A (5) N/A (5)
Carlstadt, NJ
</TABLE>
(1) Anticipated Opening Dates, Approximate GLA, and Estimated Aggregate Project
Cost 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, start dates and/or opening 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.
(6) The expansion opened on April 15, 1999.
(7) Consists of fully executed leases as of March 31, 1999.
8
<PAGE> 6
THE MILLS CORPORATION
SUPPLEMENTAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
March 31
1999 1998
----------- -----------
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
REVENUES:
Minimum rent $26,017 $24,537
Percentage rent 196 1,166
Recoveries from tenants 13,332 12,064
Other property revenue 1,665 1,490
Fee income 3,328 1,379
Interest income 1,054 1,109
----------- -----------
Total revenues 45,592 41,745
EXPENSES:
Recoverable from tenants 11,722 10,383
Other property operating 1,202 1,489
General and administrative 2,924 2,406
Interest expense 11,123 11,094
Depreciation and amortization 8,617 9,612
----------- -----------
Total expenses 35,588 34,964
Other income/(expense) (179) (43)
Equity in earnings of unconsolidated joint ventures 1,017 1,940
----------- -----------
Income before extraordinary item and minority interest 10,842 8,678
Extraordinary losses on debt extinguishments (2,762) -
----------- -----------
Income before minority interest 8,080 8,678
Minority interest (3,285) (3,558)
----------- -----------
Net income $4,795 $5,120
=========== ===========
Income per share before extraordinary item $0.28 $0.22
=========== ===========
Net income per share (Basic) $0.21 $0.22
=========== ===========
Net income per share (Diluted) $0.21 $0.22
=========== ===========
FUNDS FROM OPERATIONS (*):
Income before extraordinary item
and minority interest $10,842 $8,678
Adjustments:
Add: Depreciation and amortization of real estate
assets 7,714 8,559
Add: Real estate depreciation and amortization
of unconsolidated joint ventures 2,748 2,334
----------- -----------
Funds from operations $21,304 $19,571
=========== ===========
BASIC:
Weighted average shares 23,111 22,910
Weighted average shares and units 38,956 38,842
DILUTED:
Weighted average shares 23,225 23,339
Weighted average shares and units 39,069 39,259
</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
the 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 PROPERTY OPERATING INCOME FOR EACH OF THE
MILLS, MAINSTREET (I.E. 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 11 AND IS NOT
INTENDED BE A REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES.
FOR THE THREE MONTHS ENDED MARCH 31, 1999
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 $5,353 $4,682 $6,497 $4,393 $401 $4,691 $26,017
Percentage rent 7 37 87 7 58 - 196
Recoveries from tenants 2,420 2,956 3,931 2,437 - 1,588 13,332
Other revenue 179 179 770 284 232 21 1,665
------------------------------------------------------------------------------------------
Total rental revenues 7,959 7,854 11,285 7,121 691 6,300 41,210
PROPERTY OPERATING COSTS:
Recoverable from tenants 2,126 2,336 3,556 2,150 0 1,554 11,722
Other operating 245 203 123 168 373 90 1,202
------------------------------------------------------------------------------------------
Total property
operating costs (1) 2,371 2,539 3,679 2,318 373 1,644 12,924
------------------------------------------------------------------------------------------
PROPERTY OPERATING INCOME 5,588 5,315 7,606 4,803 318 4,656 28,286
==========================================================================================
<CAPTION>
UNCONSOLIDATED JOINT VENTURES
Ontario Grapevine Arizona The Block Other Total
------- --------- ------- --------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
RENTAL REVENUES:
Minimum rent $ 4,861 $ 5,351 $ 5,081 $ 3,896 $ 223 $ 19,412
Percentage rent - - 110 - - 110
Recoveries from tenants 2,376 2,470 2,102 1,010 4 7,962
Other revenue 378 414 358 317 - 1,467
-----------------------------------------------------------------------------
Total rental revenues 7,615 8,235 7,651 5,223 227 28,951
PROPERTY OPERATING COSTS:
Recoverable from tenants 2,189 2,356 2,107 1,288 40 7,980
Other operating 236 296 353 76 120 1,081
-----------------------------------------------------------------------------
Total property
operating costs (1) 2,425 2,652 2,460 1,364 160 9,061
-----------------------------------------------------------------------------
PROPERTY OPERATING INCOME $ 5,190 $ 5,583 $ 5,191 $ 3,859 $ 67 $ 19,890
=============================================================================
</TABLE>
(1) Total property operating costs excludes management fees as follows:
Potomac Mills - $202, Franklin Mills - $193, Sawgrass Mills - $310, Gurnee
Mills - $197, Community Centers - $192, Ontario Mills - $182, Grapevine
Mills - $209, Arizona Mills - $148, The Block at Orange - $189 and Other -
$2.
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 (I.E. 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 11 AND IS NOT
INTENDED BE A REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES.
FOR THE THREE MONTHS ENDED MARCH 31, 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 $5,199 $4,147 $6,402 $4,173 $332 $4,284 $24,537
Percentage rent 107 144 621 171 45 78 1,166
Recoveries from tenants 2,216 2,781 3,480 2,269 11 1,307 12,064
Other revenue 146 218 700 296 104 26 1,490
-----------------------------------------------------------------------------------------------
Total rental revenues 7,668 7,290 11,203 6,909 492 5,695 39,257
PROPERTY OPERATING COSTS:
Recoverable from tenants 1,838 2,170 3,053 2,031 0 1,291 10,383
Other operating 216 244 140 348 356 165 1,469
-----------------------------------------------------------------------------------------------
Total property
operating costs (1) 2,054 2,414 3,193 2,379 356 1,456 11,852
-----------------------------------------------------------------------------------------------
PROPERTY OPERATING INCOME 5,614 4,876 8,010 4,530 136 4,239 27,405
===============================================================================================
<CAPTION>
UNCONSOLIDATED JOINT VENTURES
Ontario Grapevine Arizona Other Total
------- --------- ------- ----- -----
<S> <C> <C> <C> <C> <C>
RENTAL REVENUES:
Minimum rent $ 4,686 $ 4,860 $ 4,433 $ 94 $ 14,073
Percentage rent 224 180 106 - 510
Recoveries from tenants 2,106 1,887 1,616 6 5,615
Other revenue 394 443 284 - 1,121
-----------------------------------------------------------------
Total rental revenues 7,410 7,370 6,439 100 21,319
PROPERTY OPERATING COSTS:
Recoverable from tenants 2,054 1,881 1,560 30 5,525
Other operating 198 111 311 181 801
-----------------------------------------------------------------
Total property
operating costs (1) 2,252 1,992 1,871 211 6,326
-----------------------------------------------------------------
PROPERTY OPERATING INCOME $ 5,158 $ 5,378 $ 4,568 $ (111) $ 14,993
=================================================================
</TABLE>
(1) Total property operating costs excludes management fees as follows:
Potomac Mills - $221, Franklin Mills - $184, Sawgrass Mills - $350, Gurnee
Mills - $180, Community Centers - $180, Ontario Mills - $208, Grapevine
Mills - $230, Arizona Mills - $90 and Other - $4.
11
<PAGE> 9
] THE MILLS CORPORATION
UNCONSOLIDATED JOINT VENTURES
NET INCOME AND FUNDS FROM OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
Ontario Grapevine Arizona The Block Other Total
------- --------- ------- --------- ----- -----
<S> <C> <C> <C> <C> <C>
REVENUES:
Minimum rent $ 4,861 $ 5,351 $ 5,081 $ 3,896 $ 223 $ 19,412
Percentage rent - - 110 - - 110
Recoveries from tenants 2,376 2,470 2,102 1,010 4 7,962
Interest income 144 454 14 549 88 1,249
Other revenue 378 414 358 317 - 1,467
-------------------------------------------------------------------------------------
Total revenues 7,759 8,689 7,665 5,772 315 30,200
EXPENSES:
Recoverable from tenants (2,189) (2,356) (2,107) (1,288) (40) (7,980)
Other operating (418) (505) (501) (265) (122) (1,811)
Interest expense (2,473) (2,481) (2,250) (1,649) (95) (8,948)
Depreciation and amortization (2,108) (2,218) (1,826) (1,971) (75) (8,198)
-------------------------------------------------------------------------------------
Total Expenses (7,188) (7,560) (6,684) (5,173) (332) (26,937)
Gain (Loss) on Land Sales - - - - - -
Other - - (15) (6) - (21)
-------------------------------------------------------------------------------------
NET INCOME 571 1,129 966 593 (17) 3,242
=====================================================================================
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
Income before extraordinary items 571 1,129 966 593 (17) 3,242
Adjustments:
Add: Depreciation and
amortization of
real estate assets 2,072 2,175 1,718 1,816 75 7,856
-------------------------------------------------------------------------------------
TOTAL FUNDS FROM OPERATIONS $ 2,643 $ 3,304 $ 2,684 $ 2,409 $ 58 $ 11,098
=====================================================================================
MILLS ALLOCATIONS:
Mills share of FFO 1,152 1,121 989 510 (7) 3,765
Management Fees due Mills 182 209 148 189 2 730
-------------------------------------------------------------------------------------
Total Mills FFO $ 1,334 $ 1,330 $ 1,137 $ 699 $ (5) $ 4,495
=====================================================================================
Mills share of net income $ 249 $ 383 $ 356 $ 126 $ (96) $ 1,017
=====================================================================================
</TABLE>
(1) Total property operating costs includes management fees as follows:
Ontario Mills - $182, Grapevine Mills - $209, Arizona Mills - $148, The
Block at Orange - $189 and Other - $2.
12
<PAGE> 10
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 3/99 % Shop GLA at 3/99 %
- ------- --------- ------- - -------- ------- -
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills 1,637,065 1,577,365 96.35% 640,514 600,885 93.81%
Franklin Mills 1,739,849 1,686,984 96.96% 596,373 543,508 91.14%
Sawgrass Mills 1,904,822 1,867,330 98.03% 676,617 659,125 97.41%
Gurnee Mills 1,653,978 1,602,909 96.91% 633,302 582,233 91.94%
----------------------------------------------- ---------------------------------------------
Total Mills 6,935,714 6,734,588 97.10% 2,546,806 2,385,751 93.68%
Butterfield 114,610 114,610 100.00% 72,677 72,677 100.00%
Coopers Crossing 173,509 173,509 100.00% 14,953 14,953 100.00%
Crosswinds 144,273 142,940 99.08% 23,298 21,965 94.28%
Fashion Place 147,950 131,918 89.16% 74,692 58,660 78.54%
Germantown 177,097 162,685 91.86% 130,341 115,929 88.94%
Gwinnett 194,503 184,913 95.07% 96,956 87,366 90.11%
Liberty Plaza 315,067 297,803 94.52% 52,320 35,056 67.00%
Montgomery Village 117,391 105,783 90.11% 80,986 69,378 85.67%
Mt. Prospect 298,600 289,807 97.06% 126,005 117,212 93.02%
West Falls Church 87,824 85,433 97.28% 49,983 47,592 95.22%
Western Hills 449,496 258,394 57.49% 134,980 103,098 76.38%
----------------------------------------------- ---------------------------------------------
2,220,320 1,947,795 87.73% 857,191 743,886 86.78%
----------------------------------------------- ---------------------------------------------
Total Wholly Owned 9,156,034 8,682,383 94.83% 3,403,997 3,129,637 91.94%
=============================================== =============================================
Joint Ventures:
Ontario Mills 1,345,096 1,332,952 99.10% 519,276 507,132 97.66%
Grapevine Mills 1,241,410 1,209,822 97.46% 543,400 511,812 94.19%
Arizona Mills 1,233,893 1,197,839 97.08% 533,162 497,108 93.24%
The Block at Orange 642,554 601,827 93.66% 282,853 242,126 85.60%
----------------------------------------------- ---------------------------------------------
Total Joint Ventures 4,462,953 4,342,440 97.30% 1,878,691 1,758,178 93.59%
=============================================== =============================================
Total Mills 10,756,113 10,475,201 97.39% 4,142,644 3,901,803 94.19%
=============================================== =============================================
Total Wholly Owned
and Joint Venture 13,618,987 13,024,823 95.64% 5,282,688 4,887,815 92.53%
=============================================== =============================================
<CAPTION>
TOTAL VACANT S.F.
Vacancies
Project Anchor Small Shop Total
- ------- ------ ---------- -----
<S> <C> <C> <C>
Potomac Mills 20,071 39,629 59,700
Franklin Mills 0 52,865 52,865
Sawgrass Mills 20,000 17,492 37,492
Gurnee Mills 0 51,069 51,069
------------------------------------------
Total Mills 40,071 161,055 201,126
Butterfield 0 0 0
Coopers Crossing 0 0 0
Crosswinds 0 1,333 1,333
Fashion Place 0 16,032 16,032
Germantown 0 14,412 14,412
Gwinnett 0 9,590 9,590
Liberty Plaza 0 17,264 17,264
Montgomery Village 0 11,608 11,608
Mt. Prospect 0 8,793 8,793
West Falls Church 0 2,391 2,391
Western Hills 159,220 31,882 191,102
------------------------------------------
159,220 113,305 272,525
------------------------------------------
Total Wholly Owned 199,291 274,360 473,651
==========================================
Joint Ventures:
Ontario Mills 0 12,144 12,144
Grapevine Mills 0 31,588 31,588
Arizona Mills 0 36,054 36,054
The Block at Orange 0 40,727 40,727
------------------------------------------
Total Joint Ventures 0 120,513 120,513
==========================================
Total Mills 40,071 240,841 280,912
==========================================
Total Wholly Owned
and Joint Venture 199,291 394,873 594,164
==========================================
</TABLE>
(1) Includes 963,173 square feet of GLA owned by certain store tenants as
follows: Potomac Mills-80,000 square feet of GLA; Franklin Mills-209,612
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. A ground lease at Franklin Mills of 152,370 square feet
and at 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 follows: (I) all space leased and for which rent
is being paid as of March 1, 1999, excluding tenants with leases that have
a term of less than 1 year (ii) GLA owned by certain store tenants.
13
<PAGE> 11
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 March 31,
1999 multiplied by 12.
<TABLE>
<CAPTION>
No. of 1999 (1) No. of 2000
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 42,212 316,590 7.50 1 41,321 309,908 7.50
Specialty 11 30,488 669,830 21.97 28 75,953 1,940,779 25.55
Food Court 2 1,567 85,934 54.84 3 2,331 155,647 66.77
---------------------------------------------- ---------------------------------------------
14 74,267 $ 1,072,354 $ 14.44 32 119,605 $ 2,406,334 $ 20.12
Franklin Mills:
Anchors (2) - - $ - $ - - - $ - $ -
Majors (2) - - - - 1 32,637 297,256 9.11
Specialty 23 78,202 1,781,659 22.78 23 86,312 1,847,995 21.41
Food Court 6 5,112 295,361 57.78 - - - -
---------------------------------------------- ---------------------------------------------
29 83,314 $ 2,077,020 $ 24.93 24 118,949 $ 2,145,251 $ 18.04
Sawgrass Mills:
Anchors (2) - - $ - $ - 1 78,619 $ 255,512 $ 3.25
Majors (2) - - - - 1 20,189 240,000 11.89
Specialty 3 2,697 149,810 55.55 61 207,935 4,948,054 23.80
Food Court 2 1,206 80,500 66.75 21 17,931 994,016 55.44
---------------------------------------------- ---------------------------------------------
5 3,903 $ 230,310 $ 59.01 84 324,674 $ 6,437,582 $ 19.83
Gurnee Mills:
Anchors (2) - - $ - $ - - - $ - $ -
Majors (2) - - - - - - - -
Specialty 12 49,554 913,356 18.43 18 54,734 1,007,363 18.40
Food Court - - - - 1 657 24,309 37.00
---------------------------------------------- ---------------------------------------------
12 49,554 $ 913,356 $ 18.43 19 55,391 $ 1,031,672 $ 18.63
Total w/o Joint Ventures:
Anchors (2) - - $ - $ - 1 78,619 $ 255,512 $ 3.25
Majors (2) 1 42,212 316,590 7.50 3 94,147 847,164 9.00
Specialty 49 160,941 3,514,655 21.84 130 424,934 9,744,191 22.93
Food Court 10 7,885 461,795 58.57 25 20,919 1,173,972 56.12
---------------------------------------------- ---------------------------------------------
60 211,038 $ 4,293,040 $ 20.34 159 618,619 $ 12,020,839 $ 19.43
============================================== ==============================================
</TABLE>
<TABLE>
<CAPTION>
No. of 2001 No. of After 2001
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) - - $ - $ - 5 530,633 $ 3,040,838 $ 5.73
Majors (2) 2 67,052 602,846 8.99 7 215,262 1,922,461 8.93
Specialty 26 67,684 1,757,763 25.97 114 416,575 9,961,874 23.91
Food Court 3 2,484 149,601 60.23 6 3,803 245,870 64.65
---------------------------------------------- ---------------------------------------------
31 137,220 $ 2,510,210 $ 18.29 132 1,166,273 $ 15,171,043 $ 13.01
Franklin Mills:
Anchors (2) 1 70,701 $ 484,302 $ 6.85 4 358,233 $ 2,970,753 $ 8.29
Majors (2) 1 25,127 178,402 7.10 9 294,796 2,887,632 9.80
Specialty 35 103,486 2,157,761 20.85 67 265,170 5,374,994 20.27
Food Court 2 1,000 37,990 37.99 6 4,226 153,336 36.28
---------------------------------------------- ---------------------------------------------
39 200,314 $ 2,858,455 $ 14.27 86 922,425 $ 11,386,715 $ 12.34
Sawgrass Mills:
Anchors (2) 2 147,915 $ 1,101,435 $ 7.45 5 432,246 $ 2,836,951 $ 6.56
Majors (2) - - - - 8 247,462 2,994,677 12.10
Specialty 47 165,654 3,946,598 23.82 81 254,930 7,237,697 28.39
Food Court 5 4,313 217,503 50.43 3 4,459 133,980 30.05
---------------------------------------------- ---------------------------------------------
54 317,882 $ 5,265,536 $ 16.56 97 939,097 $ 13,203,305 $ 14.06
Gurnee Mills:
Anchors (2) 3 231,271 $ 1,381,540 $ 5.97 3 303,714 $ 1,410,715 $ 4.64
Majors (2) 1 40,752 289,339 7.10 6 194,133 2,079,304 10.71
Specialty 58 195,480 3,859,827 19.75 68 263,642 5,420,529 20.56
Food Court 14 10,061 569,153 56.57 12 8,105 424,274 52.35
---------------------------------------------- ---------------------------------------------
76 477,564 $ 6,099,859 $ 12.77 89 769,594 $ 9,334,822 $ 12.13
Total w/o Joint Ventures
Anchors (2) 6 449,887 $ 2,967,277 $ 6.60 17 1,624,826 $ 10,259,257 $ 6.31
Majors (2) 4 132,931 1,070,587 8.05 30 951,653 9,884,074 10.39
Specialty 166 532,304 11,721,949 22.02 330 1,200,317 27,995,094 23.32
Food Court 24 17,858 974,247 54.56 27 20,593 957,460 46.49
---------------------------------------------- ---------------------------------------------
200 1,132,980 $ 16,734,060 $ 14.77 404 3,797,389 $ 49,095,885 $ 12.93
============================================== ==============================================
</TABLE>
<TABLE>
<CAPTION>
No. of Total
Leases Annualized
Expiring Sq Ft Min. Rent psf
-------- ----- --------- ---
<S> <C> <C> <C> <C>
Potomac Mills:
Anchors (2) 5 530,633 $ 3,040,838 $ 5.73
Majors (2) 11 365,847 3,151,805 8.62
Specialty 179 590,700 14,330,246 24.26
Food Court 14 10,185 637,052 62.55
----------------------------------------------
209 1,497,365 $ 21,159,941 $ 14.13
Franklin Mills:
Anchors (2) 5 428,934 $ 3,455,055 $ 8.05
Majors (2) 11 352,560 3,363,290 9.54
Specialty 148 533,170 11,162,409 20.94
Food Court 14 10,338 486,687 47.08
----------------------------------------------
178 1,325,002 $ 18,467,441 $ 13.94
Sawgrass Mills:
Anchors (2) 8 658,780 $ 4,193,898 $ 6.37
Majors (2) 9 267,651 3,234,677 12.09
Specialty 192 631,216 16,282,159 25.79
Food Court 31 27,909 1,425,999 51.09
----------------------------------------------
240 1,585,556 $ 25,136,733 $ 15.85
Gurnee Mills:
Anchors (2) 6 534,985 $ 2,792,255 $ 5.22
Majors (2) 7 234,885 2,368,643 10.08
Specialty 156 563,410 11,201,075 19.88
Food Court 27 18,823 1,017,736 54.07
----------------------------------------------
196 1,352,103 $ 17,379,709 $ 12.85
Total w/o Joint Ventures
Anchors (2) 24 2,153,332 $ 13,482,046 $ 6.26
Majors (2) 38 1,220,943 12,118,415 9.93
Specialty 675 2,318,496 52,975,889 22.85
Food Court 86 67,255 3,567,474 53.04
----------------------------------------------
823 5,760,026 $ 82,143,824 $ 14.26
==============================================
</TABLE>
(1) The 1999 amounts represent the total square footage and total annualized
minimum rent that will expire during the last nine months of 1999.
(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..
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 March 31,
1999 multiplied by 12.
<TABLE>
<CAPTION>
No. of 1999 (1) No. of 2000 No. of
Leases Annualized Leases Annualized Leases
Expiring Sq Ft Min. Rent psf Expiring Sq Ft Min. Rent psf Expiring Sq Ft
-------- ----- --------- --- -------- ----- --------- --- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ontario Mills:
Anchors (2) - - $ - $ - - - $ - $ - - -
Majors (2) - - - - - - - - - -
Specialty 5 10,414 271,140 26.04 6 13,267 332,266 25.04 50 209,623
Food Court - - - - - - - - - -
------------------------------------------- ------------------------------------------ -----------------
5 10,414 $ 271,140 $26.04 6 13,267 $ 332,266 $25.04 50 209,623
Arizona Mills:
Anchors (2) - - $ - $ - - - $ - $ - - -
Majors (2) - - - - - - - - - -
Specialty - - - - 8 22,218 609,117 27.42 11 23,803
Food Court - - - - - - - - - -
------------------------------------------- ------------------------------------------ -----------------
- - $ - $ - 8 22,218 $ 609,117 $27.42 11 23,803
Grapevine Mills:
Anchors (2) - - $ - $ - - - $ - $ - - -
Majors (2) - - - - - - - - - -
Specialty 3 6,340 121,965 19.24 7 13,723 358,792 26.15 12 30,676
Food Court - - - - - - - - - -
------------------------------------------- ------------------------------------------ -----------------
3 6,340 $ 121,965 $19.24 7 13,723 $ 358,792 $26.15 12 30,676
Total with Joint Ventures:
Anchors (2) - - $ - $ - 1 78,619 $ 255,512 $ 3.25 6 449,887
Majors (2) 1 42,212 316,590 7.50 3 94,147 847,164 9.00 4 132,931
Specialty 57 177,695 3,907,760 21.99 151 474,142 11,044,366 23.29 239 796,406
Food Court 10 7,885 461,795 58.57 25 20,919 1,173,972 56.12 24 17,858
------------------------------------------- ------------------------------------------ -----------------
68 227,792 $4,686,145 $20.57 180 667,827 $13,321,014 $19.95 273 1,397,082
=========================================== ========================================== =================
The Block at Orange
Anchors (2) - - $ - $ - - - $ - $ - - -
Majors (2) - - - - - - - - - -
Specialty - - - - 2 826 72,210 87.42 6 5,910
Food Court - - - - - - - - - -
------------------------------------------- ------------------------------------------ -----------------
- - $ - $ - 2 826 $ 72,210 $87.42 6 5,910
Community Centers:
Anchors (2) - - $ - $ - - - $ - $ - - -
Majors (2) - - - - 1 21,007 278,343 13.25 1 24,300
Specialty 22 57,268 842,868 14.72 26 110,860 1,238,226 11.17 45 163,089
Food Court - - - - - - - - - -
------------------------------------------- ------------------------------------------ -----------------
22 57,268 $ 842,868 $14.72 27 131,867 $ 1,516,569 $11.50 46 187,389
=========================================== ========================================== =================
Totals
Anchors (2) - - $ - $ - 1 78,619 $ 255,512 $ 3.25 6 449,887
Majors (2) 1 42,212 316,590 7.50 4 115,154 1,125,507 9.77 5 157,231
Specialty 79 234,963 4,750,628 20.22 179 585,828 12,354,802 21.09 290 965,405
Food Court 10 7,885 461,795 58.57 25 20,919 1,173,972 56.12 24 17,858
------------------------------------------- ------------------------------------------ -----------------
90 285,060 $5,529,013 $19.40 209 800,520 $14,909,793 $18.63 325 1,590,381
=========================================== ========================================== =================
</TABLE>
<TABLE>
<CAPTION>
2001 No. of After 2001 No. of Total
Annualized Leases Annualized Leases Annualized
Min. Rent psf Expiring Sq Ft Min. Rent psf Expiring Sq Ft Min. Rent psf
-------- --- -------- ----- --------- --- -------- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ontario Mills:
Anchors (2) $ - $ - 4 286,023 $ 1,883,132 $ 6.58 4 286,023 $ 1,883,132 $ 6.58
Majors (2) - - 13 414,797 5,000,587 12.06 13 414,797 5,000,587 12.06
Specialty 4,093,677 19.53 85 245,503 6,298,936 25.66 146 478,807 10,996,019 22.97
Food Court - - 3 11,730 594,165 50.65 3 11,730 594,165 50.65
---------------------------------------------------------------- ---------------------------------------------
$ 4,093,677 $19.53 105 958,053 $ 13,776,820 $14.38 166 1,191,357 $ 18,473,903 $15.51
Arizona Mills:
Anchors (2) $ - $ - 5 382,513 $ 3,138,643 $ 8.21 5 382,513 $ 3,138,643 $ 8.21
Majors (2) - - 11 318,218 4,410,302 13.86 11 318,218 4,410,302 13.86
Specialty 636,079 26.72 116 437,163 9,717,049 22.23 135 483,184 10,962,245 22.69
Food Court - - 1 13,924 832,502 59.79 1 13,924 832,502 59.79
---------------------------------------------------------------- ---------------------------------------------
$ 636,079 $26.72 133 1,151,818 $ 18,098,496 $15.71 152 1,197,839 $ 19,343,692 $16.15
Grapevine Mills:
Anchors (2) $ - $ - 3 315,042 $ 3,638,510 $11.55 3 315,042 $ 3,638,510 $11.55
Majors (2) - - 13 382,968 5,038,296 13.16 13 382,968 5,038,296 13.16
Specialty 691,989 22.56 131 451,273 10,121,227 22.43 153 502,012 11,293,973 22.50
Food Court - - 1 9,800 588,000 60.00 1 9,800 588,000 60.00
---------------------------------------------------------------- ---------------------------------------------
$ 691,989 $22.56 148 1,159,083 $ 19,386,033 $16.73 170 1,209,822 $ 20,558,779 $16.99
Total with Joint Ventures:
Anchors (2) $ 2,967,277 $ 6.60 29 2,608,404 $ 18,919,542 $ 7.25 36 3,136,910 $ 22,142,331 $ 7.06
Majors (2) 1,070,587 8.05 67 2,067,636 24,333,259 11.77 75 2,336,926 26,567,600 11.37
Specialty 17,143,694 21.53 662 2,334,256 54,132,306 23.19 1,109 3,782,499 86,228,126 22.80
Food Court 974,247 54.56 32 56,047 2,972,127 53.03 91 102,709 5,582,141 54.35
---------------------------------------------------------------- ---------------------------------------------
$22,155,805 $15.86 790 7,066,343 $100,357,234 $14.20 1,311 9,359,044 $140,520,198 $15.01
===================== ======================================= =============================================
The Block at Orange
Anchors (2) $ - $ - 2 172,785 $ 3,473,326 $20.10 2 172,785 $ 3,473,326 $20.10
Majors (2) - - 7 186,916 2,839,831 15.19 7 186,916 2,839,831 15.19
Specialty 224,875 38.05 65 222,452 6,783,981 30.50 73 229,188 7,081,066 30.90
Food Court - - 10 12,938 958,121 74.05 10 12,938 958,121 74.05
---------------------------------------------------------------- ---------------------------------------------
$ 224,875 $38.05 84 595,091 $ 14,055,259 $23.62 92 601,827 $ 14,352,344 $23.85
Community Centers:
Anchors (2) $ - $ - 8 578,145 $ 4,331,709 $ 7.49 8 578,145 $ 4,331,709 $ 7.49
Majors (2) 133,650 5.50 17 557,821 3,939,691 7.06 19 603,128 4,351,684 7.22
Specialty 2,119,933 13.00 101 419,324 5,680,741 13.55 194 750,541 9,881,768 13.17
Food Court - - - - - - - - - -
---------------------------------------------------------------- ---------------------------------------------
$ 2,253,583 $12.03 126 1,555,290 $ 13,952,141 $ 8.97 221 1,931,814 $ 18,565,161 $ 9.61
================================================================ =============================================
Totals
Anchors (2) $ 2,967,277 $ 6.60 39 3,359,334 $ 26,724,577 $ 7.96 46 3,887,840 $ 29,947,366 $ 7.70
Majors (2) 1,204,237 7.66 91 2,812,373 31,112,781 11.06 101 3,126,970 33,759,115 10.80
Specialty 19,488,502 20.19 828 2,976,032 66,597,028 22.38 1,376 4,762,228 103,190,960 21.67
Food Court 974,247 54.56 42 68,985 3,930,248 56.97 101 115,647 6,540,262 56.55
---------------------------------------------------------------- ---------------------------------------------
$24,634,263 $15.49 1,000 9,216,724 $128,364,634 $13.93 1,624 11,892,685 $173,437,703 $14.58
===================== ======================================== =============================================
</TABLE>
(1) The 1999 amounts represent the total square footage and total annualized
minimum rent that will expire during the last nine months of 1999.
(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
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 three months ended March
31, 1999 and twelve months ended December 31, 1998, 1997, and 1996.
<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> <C>
POTOMAC MILLS 1999 $ - - $ - - $ - -
1998 11.52 65,028 9.46 70,490 2.06 21.75%
1997 7.71 73,432 6.30 97,820 1.41 22.33%
1996 11.43 33,406 11.55 15,178 (0.12) (1.04%)
FRANKLIN MILLS 1999 $ - - $ - - $ - -
1998 13.33 100,127 6.49 85,242 6.85 105.60%
1997 11.27 85,072 7.53 85,072 3.74 49.74%
1996 10.41 18,247 10.25 20,000 0.16 1.56%
GURNEE MILLS 1999 $ - - $ - - $ - -
1998 7.10 40,752 6.45 40,752 0.65 10.08%
1997 4.92 184,259(3) - - N/A N/A
1996 30.00 20,000 - - N/A N/A
SAWGRASS MILLS 1999 $ - - $ - - $ - -
1998 15.00 28,152 15.00 28,152 - -
1997 8.91 50,579 8.93 50,579 (0.02) (0.21%)
1996 26.39 20,000 14.86 - 11.53 77.59%
ONTARIO MILLS 1999 $ - - $ - - $ - -
1998 - - - -
TOTAL MILLS 1999 $ - - $ - - $ - -
1998 11.94 234,059 8.48 224,636 3.46 40.86%
1997 7.33 393,342 7.32 233,471 0.01 0.15%
1996 18.54 91,653 12.95 74,453 5.59 43.17%
</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> <C>
POTOMAC MILLS 1999 $25.13 36,475 $23.85 32,681 $ 1.28 5.36%
1998 27.68 70,769 27.91 62,034 (0.23) (0.79%)
1997 22.78 128,964 21.77 127,191 1.00 4.61%
1996 23.64 83,594 21.80 66,607 1.84 8.44%
FRANKLIN MILLS 1999 $24.46 5,963 $19.32 11,432 $ 5.14 26.61%
1998 19.18 150,869 17.65 113,961 1.53 8.65%
1997 20.16 112,670 19.34 106,202 0.83 4.29%
1996 20.08 73,880 18.61 115,416 1.47 7.90%
GURNEE MILLS 1999 $19.76 22,462 $17.86 32,984 $ 1.90 10.64%
1998 21.07 99,886 18.59 88,220 2.48 13.35%
1997 20.75 101,771 19.24 104,086 1.51 7.87%
1996 19.01 74,447 18.63 71,457 0.38 2.04%
SAWGRASS MILLS 1999 $43.19 3,305 $34.14 12,998 $ 9.05 26.50%
1998 32.52 48,268 26.32 49,373 6.20 23.54%
1997 30.00 72,188 24.57 64,626 5.42 22.08%
1996 29.63 58,904 22.24 57,770 7.39 33.23%
ONTARIO MILLS 1999 $32.00 4,416 $32.00 2,009 $ - -
1998 27.34 35,616 27.64 26,400 (0.30) (1.08%)
TOTAL MILLS 1999 $24.65 71,621 $22.77 92,104 $ 1.87 8.23%
1998 23.43 405,408 21.80 339,988 1.63 7.49%
1997 22.83 415,593 20.92 402,105 1.90 9.10%
1996 22.76 290,825 19.97 311,250 2.79 13.97%
</TABLE>
(1) The Block at Orange, Grapevine Mills and Arizona Mills are excluded from
this analysis, due to still being in their initial lease-up phase.
Additionally, Ontario Mills for 1997 is excluded.
(2) The releasing spread is calculated as the difference between per square foot
openings and per square foot closings for the three months ended March 31,
1999 and twelve months ended December 31, 1998, 1997, 1996. Opening and
closings include renewals but exclude exercised options.
(3) Consists primarily of expansion space related to two anchor stores, Bass
Pro and Computer City, comprising 125,000 sq. ft. and 25,000 sq. ft.,
respectively. The Bass Pro lease is expected to provide substantial
percentage rent in addition to the base rent detailed above.
Note: Totals may not sum due to rounding
16
<PAGE> 14
AVERAGE RENTS
The following table sets forth, for each of the last three years and the first
quarter of 1999 annualized, certain information regarding operating trends with
respect to the existing Mills and The Block at Orange.
<TABLE>
<CAPTION>
MINIMUM RENT PLUS PERCENTAGE RENTS
------------------------------------------------------------------
AVERAGE TOTAL STORES ANCHOR STORES SPECIALTY STORES
PERCENT -------------------------- ------------------------- --------------------------
LEASED (1) TOTAL PER SQ. FT. TOTAL PER SQ. FT. TOTAL PER SQ. FT.
---------- ----------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
POTOMAC MILLS
1999 (1st Qtr) 96% $22,002,151 $14.67 $6,209,731 $6.93 $15,792,420 $26.16
1998 95 21,443,619 14.43 6,001,966 6.75 15,441,653 25.91
1997 96 20,980,272 14.04 6,284,111 6.86 14,696,161 25.44
1996 96 20,865,975 14.00 6,142,999 6.76 14,722,976 23.32
FRANKLIN MILLS
1999 (1st Qtr) 97% 19,261,215 13.04 7,025,980 7.52 12,235,235 22.51
1998 94 17,689,143 12.38 6,050,348 6.61 11,638,795 22.64
1997 92 16,549,052 11.47 5,700,661 6.05 10,848,391 21.68
1996 92 16,318,689 11.40 5,291,698 5.67 11,026,991 22.16
SAWGRASS MILLS
1999(2) (1st Qtr) 98% 27,674,233 17.49 7,470,008 8.14 20,204,225 30.41
1998(2) 98 26,969,276 17.29 7,265,079 8.13 19,704,197 29.57
1997(2) 97 26,448,955 17.08 7,384,896 8.28 19,064,059 29.04
1996 98 25,787,924 16.55 7,150,346 8.03 18,637,578 27.90
GURNEE MILLS
1999 (1st Qtr) 97% 18,404,036 13.53 5,216,055 6.78 13,187,981 22.34
1998 96 17,525,250 13.06 5,022,342 6.52 12,502,908 21.85
1997 91 15,900,406 13.80 4,418,036 7.42 11,482,370 20.63
1996 90 15,340,496 13.62 3,823,991 6.78 11,516,505 20.50
ONTARIO MILLS
1999 (1st Qtr) 99% 20,155,999 16.69 7,426,486 10.60 12,729,513 25.10
1998 98 19,516,934 16.50 7,300,086 10.61 12,216,848 24.68
1997 95 18,708,479 17.11 6,358,058 10.11 12,350,421 26.59
GRAPEVINE MILLS
1999 (1st Qtr) 98% 21,892,260 18.07 8,974,701 12.86 12,917,559 25.17
1998 95 21,108,019 18.03 8,797,950 12.74 12,310,069 25.63
ARIZONA MILLS
1999 (1st Qtr) 97% 20,672,106 17.44 7,527,955 11.00 13,144,151 26.23
1998 95 19,165,290 16.82 7,262,540 10.83 11,902,750 25.41
TOTAL-MILLS
1999 (1st Qtr) 97% $150,062,000 $15.76 $49,850,916 $ 8.90 $100,211,084 $25.54
1998 96 143,417,531 15.41 47,700,311 8.65 95,717,220 25.24
1997 94 98,587,164 14.65 30,145,762 7.58 68,441,402 24.84
1996 94 78,313,084 13.97 22,409,034 6.80 55,904,050 24.21
THE BLOCK AT ORANGE
1999 (1st Qtr) 94% 15,810,478 26.23 6,592,900 18.33 9,217,578 37.92
TOTAL (INCL. THE BLOCK)
1999 (1st Qtr) 97% 165,872,478 16.38 56,443,816 9.47 109,428,662 26.26
</TABLE>
- --------------------------
(1) Average percent leased is defined as total average space leased and for
which rent was being paid excluding tenants with leases having a term of
less than one year.
(2) Annual rent excludes $500,000 of ground lease rent for 1999 and $800,000 of
ground lease rent for 1998 and 1997.
Note: The above amounts do not include Mainstreet retail income of $693,683 for
the first quarter of 1999, $2,205,661 for 1998, $2,066,991 for 1997, and
$2,088,000 for 1996. 1999 includes an estimate of annualized percentage
rents.
17
<PAGE> 15
THE MILLS CORPORATION
SUMMARY OF OUTSTANDING CONSOLIDATED INDEBTEDNESS
(Dollars in thousands)
AS OF MARCH 31, 1999
<TABLE>
<CAPTION>
Principal
Balance Annual Interest Maturity
(000's) Term Rate Date
------- ---- ---- ----
<S> <C> <C> <C> <C>
Potomac Mills/Gurnee Mills:
Tranche A $205,214 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
Tranche A 108,304 Fixed 7.882% 06/01/27 (3)
Mortgage Loan 19,715 Fixed 7.440% 06/01/27 (3)
Mortgage Loan 12,932 Fixed 6.220% 06/01/27 (3)
Franklin Mills and Liberty Plaza 141,298 Fixed 7.649% 06/01/27 (3)
Sawgrass Mills:
Tranche A 115,000 Fixed 6.450% 01/18/01
Tranche B 10,000 Variable with cap 85 bp over Libor (6) 01/18/01
Tranche C 20,000 Variable with cap 230 bp over Libor (6) 01/18/01
Sawgrass Mills - Phase II 18,000 Fixed 6.970% 01/18/01
Ten Community Centers 112,354 Fixed 7.300% 02/01/29
Concord Mills Residual III 7,305 Variable 200 bp over Libor 12/31/00
------------
Total Property Mortgages 700,824
------------
Corporate Misc 654 Fixed 8.250% 10/31/00
Corporate Misc 2,400 Fixed 6.200% 07/15/99
Corporate Line of Credit 96,000 Variable 140 bp over Libor 04/01/00
Corporate Misc 15,000 Variable 125 bp over Libor 01/18/00
Sawgrass Residual 4,700 Variable 165 bp over Libor 01/18/01
------------
Total $819,578
============
</TABLE>
<TABLE>
<CAPTION>
Annual Earliest day Recourse to
Interest at which debt Company or
(000's) can be repaid Op. Ptnrshp
------- ------------- -----------
<S> <C> <C> <C>
Potomac Mills/Gurnee Mills:
Tranche A $14,169 (2) 0%
Tranche B 1,896 (2) 0%
Tranche C 1,085 (2) 0%
Tranche D 2,310 (2) 0%
Franklin Mills and Liberty Plaza 0%
Tranche A 8,537 (4) 0%
Mortgage Loan 1,467 (4) 0%
Mortgage Loan 804
Franklin Mills and Liberty Plaza 10,808 (4) 0%
Sawgrass Mills:
Tranche A 7,418 (5) 0%
Tranche B 579 (7) (5) 0%
Tranche C 1,447 (7) (5) 0%
Sawgrass Mills - Phase II 1,255 (8) 0% (14)
Ten Community Centers 8,202 (15) 0%
Concord Mills Residual III 507 (7) (16) 100%
----------
Total Property Mortgages 49,676
----------
Corporate Misc 54 (11) 0%
Corporate Misc 149 (11) 0%
Corporate Line of Credit 6,084 (7) (8), (10) 100%
Corporate Misc 928 (7) (13) 100%
Sawgrass Residual 310 (7) (12) 0%
----------
Total $57,201
==========
</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.
(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 4.93719%, which was the rate at March
31, 1999.
(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) 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 3/31/99). The line of credit matures April 1, 2000 with a
one-year option to extend.
(11) Primarily corporate debt with maturities under one year. Prepayable, in
whole or in part, at any time without prepayment penalty.
(12) Prepayable, in whole or in part, at any time, upon 3 days prior notice
to lender without prepayment penalty.
(13) Prepayable, in whole or in part, at any time, upon 5 days prior notice
to lender without prepayment penalty.
(14) Principal is guaranteed by the Company if the Phase II project fails to
achieve a DSC (debt service coverage) ratio of 1.35 and a debt yield of
12.5%. As of March 31, 1999, the guaranteed amount was 0%.
(15) The indebtedness is a 30 year amortizing loan with an anticipated
balloon repayment date of February 1, 2009. Interest is payable at a
fixed rate of 7.30%. The principal is guaranteed by the Company. In
the event the mortgage is not repaid by the anticipated balloon
repayment date, the interest rate will be the greater of (I) the loan
interest rate plus 2% or (ii) the yield calculated by the linear
interpolation of the yields of noncallable United States Treasury
obligations with terms (one longer and one shorter) most nearly
approximating the period from such date of determination to the
anticipated repayment date.
(16) The total commitment under this loan is $9,000. Funds are available
subject to certain performance measures and restrictive covenants.
Interest accrues at 200 bp over LIBOR. The indebtedness matures on
December 31, 2000.
18
<PAGE> 16
THE MILLS CORPORATION
SUMMARY OF OUTSTANDING UNCONSOLIDATED INDEBTEDNESS
(Dollars in thousands)
AS OF MARCH 31, 1999
<TABLE>
<CAPTION>
Principal
Balance Total Annual Interest Maturity
(000's) Commitment Term Rate Date
------- ---------- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Arizona Mills $142,214 $142,214 Variable 130 bp over Libor (4),(5) 02/01/02
Grapevine Mills 155,000 155,000 Fixed 6.465% 09/01/32 (8)
Ontario Mills 144,524 145,000 Fixed 6.750% 12/01/28 (9)
City Block at Orange 121,003 136,000 Variable 165 bp over Libor (6) 01/22/02
Sawgrass Phase III 20,799 44,000 Variable 165 bp over Libor (7) 01/18/01
Concord Mills 44,540 199,000 Variable 135 bp over Libor 12/02/01
Katy Mills 4,376 168,000 Variable 200 bp over Libor 03/31/02
Katy Mills Bridge Loan 13,339 25,000 Variable 275 bp over Libor 03/31/01
----------- -------------
Total $645,795 $1,014,214
=========== =============
</TABLE>
<TABLE>
<CAPTION>
Annual Earliest day Recourse to
Interest at which debt Company or
(000's) can be repaid Op. Ptnrshp
------- ------------- -----------
<S> <C> <C> <C>
Arizona Mills 8,870 (1) 9.2% (10)
Grapevine Mills 10,021 (2) 0.0%
Ontario Mills 9,755 (3) 0.0%
City Block at Orange 7,971 (4) (3) 28.1% (11)
Sawgrass Phase III 1,370 (4) (16) 100.0% (12)
Concord Mills 2,800 (4) (2) 50.0% (13)
Katy Mills 304 (4) (16) 100.0% (14)
Katy Mills Bridge Loan 1,025 (4) (16) 100.0% (15)
----------
Total $42,116
==========
</TABLE>
(1) The indebtedness may be prepaid, in whole or in part, upon 5 business days
notice to the Administrative Agent, provided that (I) an partial prepayment
shall be in principal amount of not less than $1 million and an integral
multiple of $100,000; and (ii) each prepayment under this shall include all
interest accrued on the amount of principal prepaid (and all late charges
and other sums that may be payable) through the date of prepayment.
(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 and a late charge, as the case may be following the occurrence of
an Event of Default under any of the Loan Documents), in whole or in part,
upon not less than 5 Business Days prior written notice to Lender. No
prepayment of all or part of the Loan, including any mandatory prepayment
of the Loan made as a result of an acceleration of the Loan or pursuant to
the immediately preceding sentence, shall be permitted unless same is made
together with the payment of all interest accrued on the Loan through the
date of prepayment and an amount equal to all Breakage Costs and
reasonable, out-of-pocket attorneys' fees and disbursements incurred by
Lender and any participants in good faith as a result of the prepayment.
(4) Calculated using 30-day LIBOR at 4.93719%, which was the rate at March
31, 1999.
(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-".
makes a commercially reasonable result) less the amount owed to it under
the SWAP.
(6) 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.
(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 and the project has achieved a DSC ratio of 1.00, the interest
rate shall be LIBOR plus 150 bp; (ii) the project has achieved a DSC ratio
of 1.30 and a debt yield of 12.0% for a minimum of three months, the
interest rate shall be LIBOR plus 125 bp; (iii) the project has achieved a
DSC ratio of 1.35 and a debt yield of 12.5% for a subsequent three months,
the interest rate will be LIBOR plus 110 bp.
(8) This indebtedness is a 30 year amortizing loan with an anticipated
repayment date on October 1, 2008. The loan has an interest only period
through September 1, 2002. In the event the mortgage loan is not repaid by
the anticipated balloon repayment date, the annual interest rate will be
the greater of (I) the loan interest rate plus 2% or (ii) the yield
calculated by linear interpolation of the yields of noncallable United
States Treasury obligations with terms (one longer and one shorter) most
nearly approximating the period from such date of determination to the
anticipated repayment date.
(9) This indebtedness is a 30 year amortizing loan with an anticipated
repayment date on December 1, 2008. In the event the mortgage is not
repaid by the anticipated balloon repayment date, the annual interest rate
will be the greater of (I) the loan interest rate plus 5% or (ii) the
Treasury Rate plus 5%.
(10) 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 March 31, 1999, the Company's share of the Guaranteed
Amount was reduced from 36.8% to 9.2% according to the above formula. (11)
Principal is guaranteed by the Company, reduced as follows: (i) as of
closing, the "Guaranteed Amount" was 100% of Loan Amount up to $68,000;
(ii) upon construction completion, grand opening and a Debt Service
Coverage ratio of 1.00 the Guaranteed Amount will reduce to 50%; (iii) upon
achieving a DSC Ratio of 1.25 the Guaranteed Amount will reduce to 25%;
(iv) upon achieving a DSC Ratio of 1.40 the Guaranteed Amount will reduce
to 10%; and (v) upon achieving a DSC Ratio of 1.50 the Guaranteed Amount
will reduce to 0%.
(12) Principal is guaranteed by the Company, reduced as follows: (I) as of
closing, the "Guaranteed Amount" was 100% of Loan Amount; (ii) upon
achieving a DSC Ratio of 1.35 and a debt yield of 12.5% will reduce to 0%.
(13) The loan commitment has a term of three years with two one-year options.
The interest rate will be Libor plus 135 basis points until completion and
occupancy requirements are met. Once achieved, the interest rate will be
Libor plus 120 basis points. The interest rate can be further reduced to
Libor plus 110 basis points when the project achieves a debt service
coverage for three months of 1.35. The new loan is guaranteed severally
by the Company (50%) and Simon Property Group, L.P. (50%) and can be
reduced as follows: (I) as of closing, the "Guaranteed Amount" was 100% of
loan amount; (ii) 50% upon achieving completion and occupancy
requirements; (iii) 35% upon achieving a DSC ratio of 1.20 for three
consecutive months; (iv) 20% upon achieving a DSC ratio of 1.35 for three
consecutive months subsequent to the prior condition.
(14) The loan commitment has a term of three years with a one-year extension
option. The principal is guaranteed by the Company and can be reduced as
follows: (I) as of closing, the "Guaranteed Amount" was 100% of loan
amount; (ii) upon completion of construction, grand opening and a Debt
Service Coverage ratio of 1.00 the Guaranteed Amount will reduce to 50%;
(iii) upon achieving a Debt Service Coverage ratio of 1.25 the Guaranteed
Amount will reduce to 25%.
(15) The bridge loan commitment has a term of two years. The loan will be used
to bridge tax increment financing bonds that will be sold later in 1999.
The principal is guaranteed by the Company during the period in which the
bridge loan is outstanding.
(16) This indebtedness may be prepaid, in whole or in part, upon 5 business
days notice to the Administrative Agent.
19
<PAGE> 17
THE MILLS CORPORATION
GROSS SALES
MARCH 31, 1999
<TABLE>
<CAPTION>
Twelve Months ended March 31, 1999
----------------------------------
Sq Ft Sales psf
----- ----- ---
<S> <C> <C> <C>
Potomac Mills:
Anchor/Majors 904,826 $ 194,776,724 $ 215
Specialty 584,059 187,087,091 320
Temporary/Kiosk - 5,077,507 -
-------------------------------------------------
1,488,885 $ 386,941,322 $ 260
Franklin Mills:
Anchor/Majors 981,348 $ 156,995,958 $ 160
Specialty 540,324 161,506,770 299
Temporary/Kiosk - 2,924,479 -
-------------------------------------------------
1,521,672 $ 321,427,207 $ 211
Sawgrass Mills:
Anchor/Majors 1,226,593 $ 347,580,604 $ 283
Specialty 663,410 295,500,839 445
Temporary/Kiosk - 9,933,193 -
-------------------------------------------------
1,890,003 $ 653,014,636 $ 346
Gurnee Mills:
Anchor/Majors 825,925 $ 140,331,068 $ 170
Specialty 572,137 160,611,454 281
Temporary/Kiosk - 6,416,242 -
-------------------------------------------------
1,398,062 $ 307,358,764 $ 220
Ontario Mills:
Anchor/Majors 839,068 $ 135,438,800 $ 161
Specialty 484,657 168,313,818 347
Temporary/Kiosk - 8,204,025 -
-------------------------------------------------
1,323,725 $ 311,956,643 $ 236
Total Mills w/o Grapvine Mills and Arizona Mills
Anchor/Majors 4,777,760 $ 975,123,154 $ 204
Specialty 2,844,587 973,019,972 342
Temporary/Kiosk - 32,555,446 -
-------------------------------------------------
7,622,347 $ 1,980,698,572 $ 260
Grapevine Mills:
Anchor/Majors 689,039 $ 114,761,275 $ 167
Specialty 494,393 146,276,684 296
Temporary/Kiosk - 9,210,464 -
-------------------------------------------------
1,183,432 $ 270,248,423 $ 228
Arizona Mills:
Anchor/Majors 673,225 $ 113,937,091 $ 169
Specialty 470,756 138,589,961 294
Temporary/Kiosk - 10,433,707 -
-------------------------------------------------
1,143,981 $ 262,960,759 $ 230
Total Mills
Anchor/Majors 6,140,024 $ 1,203,821,520 $ 196
Specialty 3,809,736 1,257,886,617 330
Temporary Kiosk - 52,199,617 -
-------------------------------------------------
9,949,760 $ 2,513,907,754 $ 253
=================================================
</TABLE>
<TABLE>
<CAPTION>
Twelve Months ended March 31, 1998
----------------------------------
Sq Ft Sales psf
----- ----- ---
<S> <C> <C> <C>
Potomac Mills:
Anchor/Majors 902,156 $ 185,775,637 206
Specialty 571,757 182,300,631 319
Temporary/Kiosk - 4,327,838 -
----------------------------------------
1,473,913 $ 372,404,106 $ 253
Franklin Mills:
Anchor/Majors 926,469 $ 163,387,229 $ 176
Specialty 490,661 144,628,204 295
Temporary/Kiosk - 6,714,689 -
----------------------------------------
1,417,130 $ 314,730,122 $ 222
Sawgrass Mills:
Anchor/Majors 1,181,031 $ 365,306,764 $ 309
Specialty 658,356 299,256,758 455
Temporary/Kiosk - 13,434,274 -
----------------------------------------
1,839,387 $ 677,997,796 $ 369
Gurnee Mills:
Anchor/Majors 726,275 $ 114,546,657 $ 158
Specialty 566,091 153,765,635 272
Temporary/Kiosk - 9,153,925 -
----------------------------------------
1,292,366 $ 277,466,217 $ 215
Ontario Mills:
Anchor/Majors 795,317 $ 137,280,930 $ 173
Specialty 464,654 159,427,646 343
Temporary/Kiosk - 6,911,918 -
----------------------------------------
1,259,971 $ 303,620,494 $ 241
Total Mills w/o Grapvine Mills and Arizona Mills
Anchor/Majors 4,531,248 $ 966,297,217 $ 213
Specialty 2,751,519 939,378,874 341
Temporary/Kiosk - 40,542,644 -
----------------------------------------
7,282,767 $ 1,946,218,735 $ 267
Grapevine Mills:
Anchor/Majors N/A (1) N/A (1) N/A (1)
Specialty N/A (1) N/A (1) N/A (1)
Temporary/Kiosk N/A (1) N/A (1) N/A (1)
----------------------------------------
N/A (1) N/A (1) N/A (1)
Arizona Mills:
Anchor/Majors N/A (1) N/A (1) N/A (1)
Specialty N/A (1) N/A (1) N/A (1)
Temporary/Kiosk N/A (1) N/A (1) N/A (1)
----------------------------------------
N/A (1) N/A (1) N/A (1)
Total Mills
Anchor/Majors 4,531,248 $ 966,297,217 $ 213
Specialty 2,751,519 939,378,874 341
Temporary Kiosk - 40,542,644 -
----------------------------------------
7,282,767 $ 1,946,218,735 $ 267
========================================
</TABLE>
<TABLE>
<CAPTION>
Twelve Months ended December 31, 1998
-------------------------------------
Sq Ft Sales psf
----- ----- ---
<S> <C> <C> <C>
Potomac Mills:
Anchor/Majors 951,043 $ 191,678,102 $ 202
Specialty 580,658 185,618,081 320
Temporary/Kiosk - 5,155,021 -
-------------------------------------------
1,531,701 $ 382,451,204 $ 250
Franklin Mills:
Anchor/Majors 971,940 $ 155,395,973 $ 160
Specialty 527,403 155,109,858 294
Temporary/Kiosk - 3,496,367 -
-------------------------------------------
1,499,343 $ 314,002,198 $ 209
Sawgrass Mills:
Anchor/Majors 1,174,642 $ 353,258,477 $ 301
Specialty 664,466 297,963,690 448
Temporary/Kiosk - 10,588,716 -
-------------------------------------------
1,839,108 $ 661,810,883 $ 360
Gurnee Mills:
Anchor/Majors 831,201 $ 141,156,686 $ 170
Specialty 565,887 159,651,566 282
Temporary/Kiosk - 6,515,341 -
-------------------------------------------
1,397,088 $ 307,323,593 $ 220
Ontario Mills:
Anchor/Majors 823,815 $ 136,055,601 $ 165
Specialty 482,653 166,299,546 345
Temporary/Kiosk - 8,188,974 -
-------------------------------------------
1,306,468 $ 310,544,121 $ 238
Total Mills w/o Grapvine Mills and Arizona Mills
Anchor/Majors 4,752,641 $ 977,544,839 $ 206
Specialty 2,821,067 964,642,741 342
Temporary/Kiosk - 33,944,419 -
-------------------------------------------
7,573,708 $ 1,976,131,999 $ 261
Grapevine Mills:
Anchor/Majors 657,994 $ 117,597,419 $ 179
Specialty 481,255 144,338,088 300
Temporary/Kiosk - 9,710,374 -
-------------------------------------------
1,139,249 $ 271,645,881 $ 238
Arizona Mills:
Anchor/Majors 669,035 $ 113,812,451 $ 170
Specialty 455,674 137,253,170 301
Temporary/Kiosk - 8,300,350 -
-------------------------------------------
1,124,709 $ 259,365,971 $ 231
Total Mills
Anchor/Majors 6,079,670 $ 1,208,954,709 $ 199
Specialty 3,757,996 1,246,233,999 332
Temporary Kiosk - 51,955,143 -
-------------------------------------------
9,837,666 $ 2,507,143,851 $ 255
===========================================
</TABLE>
(1) Anchor/Major sales include sales from certain anchor tenants that own
their parcels.
20
<PAGE> 18
THE MILLS CORPORATION
COMPARABLE SPECIALTY STORES TENANT SALES
FIRST QUARTER 1999 VS. FIRST QUARTER 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
March 31, 1999 March 31, 1998
Year to Date Year to Date Percentage
Sales Sales Change
-------------------- ---------------- ------------------
<S> <C> <C> <C>
Specialty Stores:
- -----------------
Potomac Mills: $33,267 $31,937 4.2%
Franklin Mills: $24,200 $23,052 5.0%
Sawgrass Mills: $66,759 $69,421 -3.8%
Gurnee Mills: $27,494 $27,792 -1.1%
Ontario Mills: $35,031 $33,538 4.5%
---------------- ------------- -------------
Total $186,751 $185,740 0.5%
================ ============= =============
</TABLE>
Note: Comparable sales presented above are based on tenant reported sales for
the first quarter of 1999 versus the first quarter of 1998 and include those
tenants that have been in occupancy for the past 15 months. Properties with
less than 24 months of operations have been excluded.
21
<PAGE> 19
THE MILLS CORPORATION
CAPITAL EXPENDITURES
MILLS AND COMMUNITY CENTERS COMBINED (9)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1999 1998 1997
--------------------- ----------------- -----------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 33,570 $ 1,453,123 $ 435,742
Per Square Foot (2) 0.00 0.12 0.05
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 859,490 $ 5,467,329 $ 5,143,206
Per Square Foot Improved (4) 8.57 7.85 11.90
Per Square Foot (2) 0.07 0.46 0.62
Total Recurring Costs
Costs $ 893,060 $ 6,920,452 $ 5,578,948
Per Square Foot (2) 0.07 0.58 0.67
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 1,412,080 (7) $ 18,911,845 (7) $ 41,571,485 (7)
Per Square Foot Improved (5) 111.35 71.68 73.69
Per Square Foot (2) 0.12 1.58 5.03
WORK IN PROCESS (6)
Cummulative Costs $ 10,519,025 $ 8,447,326 $ 4,703,992
Cummulative Per Square Foot Improved (8) 32.68 25.99 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 for Franklin Mills and Gurnee Mills and
non-recurring remerchandising costs. Excludes expansion costs for
Sawgrass Phase III.
(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 (tenants that have leased
spaces subsequent to initial lease up for those spaces).
22
<PAGE> 20
THE MILLS CORPORATION
CAPITAL EXPENDITURES
MILLS PORTFOLIO (9)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1999 1998 1997
-------------------- ---------------- ------------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 10,678 $ 949,095 $ 388,003
Per Square Foot (2) 0.00 0.10 0.06
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 794,225 $ 4,274,398 $ 4,518,073
Per Square Foot Improved (4) 12.40 8.53 13.35
Per Square Foot (2) 0.08 0.44 0.75
TOTAL RECURRING COSTS
Costs $ 804,903 $ 5,223,493 $ 4,906,076
Per Square Foot (2) 0.08 0.54 0.81
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 1,412,080 (7) $ 18,175,677 (7) $ 41,010,815 (7)
Per Square Foot Improved (5) 111.35 96.48 78.37
Per Square Foot (2) 0.14 1.86 6.77
WORK IN PROCESS (6)
Cummulative Costs $ 7,402,885 $ 6,779,660 $ 3,989,739
Cummulative Per Square Foot Improved (8) 45.24 38.45 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 (tenants that have leased
spaces subsequent to initial lease up for those spaces).
23
<PAGE> 21
THE MILLS CORPORATION
CAPITAL EXPENDITURES
COMMUNITY CENTERS
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1999 1998 1997
-------------------- -------------- --------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 22,892 $ 504,028 $ 47,739
Per Square Foot (2) 0.01 0.23 0.02
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 65,265 $ 1,192,931 $ 625,133
Per Square Foot Improved (4) 1.80 6.10 6.68
Per Square Foot (1) 0.03 0.54 0.28
TOTAL RECURRING COSTS
Costs $ 88,157 $ 1,696,959 $ 672,872
Per Square Foot (2) 0.04 0.77 0.31
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ - $ 736,168 $ 560,670
Per Square Foot Improved (5) - 9.76 13.73
Per Square Foot (2) - 0.33 0.25
WORK IN PROCESS (6)
Cummulative Costs $ 3,116,140 $ 1,667,666 $ 714,253
Cummulative Per Square Foot Improved (7) 19.69 11.22 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.
24
