<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
<TABLE>
<CAPTION>
Date of Report (Date of earliest event reported): Commission File Number:
- ------------------------------------------------- -----------------------
<S> <C>
June 30, 1999 1 - 12994
</TABLE>
THE MILLS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<CAPTION>
Delaware 52-1802283
-------- ----------
<S> <C>
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
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 June 30, 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 June 30, 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: August 13, 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 JUNE 30, 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 10-13
Unconsolidated Joint Venture Net Income
and Funds From Operations 14-15
Occupancy Analysis 16
Lease Expiration Schedule 17-18
Rental Rate Analysis 19
Average Rent Analysis 20
Summary of Outstanding Consolidated Indebtedness 21
Summary of Outstanding Unconsolidated Indebtedness 22
Mills Gross Sales Analysis 23
Mills Comparable Sales Analysis 24
Capital Expenditures 25-27
</TABLE>
<PAGE> 2
THE MILLS CORPORATION
OVERVIEW
THE COMPANY
The Mills Corporation (the "Company") is a fully integrated, self-managed real
estate investment trust ("REIT").
The Company conducts all of its business through The Mills Limited Partnership
("the Operating Partnership"), in which it owns, as of June 30, 1999, a 1%
interest as the sole general partner and a 58.4% 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 June 30, 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)
The Oasis at Sawgrass Sunrise, FL (Ft. Lauderdale)
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 Katy
Mills (Houston, TX), Concord Mills (Charlotte, NC), Opry Mills (Nashville, TN),
Arundel Mills (Dorchester, MD), Sugarloaf Mills (Atlanta, GA), Vaughan Mills
(Toronto, Cananda), 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 June 30,
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 June 30, 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>
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% 1,845,342 1,168,725
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% 1,233,884 700,731
Tempe, AZ
The Oasis at Sawgrass Fort Lauderdale, FL/ 1999 50% 287,299 134,860
Sunrise, FL Miami/Palm Beach ---------- ----------
MILLS TOTALS/WEIGHTED AVERAGES.................. 10,983,923 6,688,849
========== ==========
The Block at Orange Los Angeles/Orange 1998 50% 644,652 359,701
County ========== ==========
COMMUNITY CENTERS (11 CENTERS) 2,220,320 1,363,129
========== ==========
<CAPTION>
Specialty 12 Mos. Ended
Store Annualized No. of 6/30/1999
Metropolitan GLA Percent Base Anchor Specialty Store
Name/Location Area Serviced (sq.ft.) (1) Leased (2) Rent (6) Stores (3) Sales PSF
------------- ------------- ------------- ---------- ------------ ---------- ---------
MILLS
<S> <C> <C> <C> <C> <C>
Potomac Mills............ Washington D.C./ 640,514 97% $ 21,716,099 17 $ 323
Woodbridge, VA Baltimore
Franklin Mills........... Philadelphia/ 596,373 96% 18,362,591 19 307
Philadelphia, PA Wilmington
Sawgrass Mills........... Fort Lauderdale, FL/ 676,617 98% 25,344,275 20 444
Sunrise, FL Miami/Palm Beach
Gurnee Mills............. Chicago/Milwaukee 633,302 96% 17,231,483 16 288
Gurnee, IL
Ontario Mills............ Los Angeles 519,276 99% 18,217,771 18 353
Ontario, CA
Grapevine Mills.......... Dallas/Fort Worth 543,400 97% 20,485,383 16 289
Grapevine, TX
Arizona Mills............ Phoenix 533,153 98% 19,445,025 16 295
Tempe, AZ
The Oasis at Sawgrass Fort Lauderdale, FL/ 152,439 74% 4,167,969 2 N/A (7)
Sunrise, FL Miami/Palm Beach --------- ------------ --------
MILLS TOTALS/WEIGHTED AVERAGES.................. 4,295,074 97% $144,970,596 124 $ 333
========= ============ ========
The Block at Orange Los Angeles/Orange 284,951 93% $ 14,325,861 9 N/A (7)
County ========= ============ ========
COMMUNITY CENTERS (11 CENTERS) 857,191 82% $ 17,472,944 25
========= ============ ========
</TABLE>
(1) Includes 963,173 square feet of gross leaseable area owned by certain
anchor store tenant as follows: Potomac Mills-80,000 square feet of gross
leaseable area; Franklin Mills-209,612 square feet of gross leaseable area;
Sawgrass Mills-281,774 square feet of gross leaseable area; Gurnee
Mills-250,806 square feet of gross leaseable area; Liberty Plaza - 13,741
square feet of gross leaseable area; West Falls Church- 2,240 square feet
of gross leaseable area and Ontario Mills - 125,000 square feet of gross
leaseable area.
(2) Gross leaseable area leased is defined as follows: all space leased and
for which rent is being paid as of June 1, 1999, excluding tenants with
leases having a term of less than 1 year plus gross leaseable area 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 gross
leaseable area, including gross leaseable area owned by certain anchor
store tenants, upon completion.
(5) Grapevine Mills will contain approximately 1.5 million square feet of gross
leaseable area, including gross leaseable area owned by certain anchor
store tenants, upon completion.
(6) Annualized Base Rent is defined as the contractual minimum rent of tenants
comprising gross leaseable occupied area at 6/99 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) Twelve months ended June 30, 1999 sales per square foot information is not
available for The Block at Orange and The Oasis at Sawgrass Mills which
commenced business in November 1998 and April 1999, respectively.
7
<PAGE> 5
THE MILLS CORPORATION
SUMMARY OF PROPERTIES
MILLS UNDER CONSTRUCTION/DEVELOPMENT
<TABLE>
<CAPTION>
Estimated Anchor
Anticipated Approx. Aggregate Required Store
Metropolitan Opening GLA Company Project Equity from Percentage Tenant
Name/Location Area Serviced Date (1) (Sq. Ft.) (1,2) Ownership Cost (1) Company Pre-leased (6) Commitments
- ----------------- ------------- ------------- -------------- ----------- --------- ----------- -------------- -----------
(millions) (millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Katy Mills Houston Fall 1,200,000 62.5% $ 229 26.25 63% 13
Houston, TX 1999
Concord Mills Charlotte Fall 1,400,000 37.5% $ 211 12.50 65% 12
Concord, NC 1999
Opry Mills Nashville Spring 1,200,000 66.7% $ 222 50.00 29% 7
Nashville, TN 2000
Arundel Mills Baltimore/ Fall 1,300,000 75% (7) $ 222 17.50 N/A (4) N/A (4)
Dorchester, MD Washington D.C. 2000
Sugarloaf Mills Atlanta Spring N/A (3) 50.0% N/A (3) 0.00 N/A (4) N/A (4)
Atlanta, GA 2001
Vaughan Mills Toronto 2001 1,400,000 N/A (3) N/A (3) N/A (3) N/A (4) N/A (4)
Toronto, Canada
Meadowlands Mills New York City/ 2002 N/A (3) 66.7% (7) N/A (3) N/A (3) N/A (5) N/A (5)
Carlstadt, NJ Northern New Jersey
</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 recently has begun leasing efforts for these projects and have
obtained various letters of interest.
(5) Leasing activity has not yet commenced for this project, however, the
Company has received letters of interest from 17 anchor store tenants.
(6) Consists of fully executed leases as of June 30, 1999.
(7) The Company's ownership percentage in Meadowlands Mills and Arundel Mills
will be 53.3% and 37.5%, respectively, once all joint venture partners have
executed their respective partnership agreements.
8
<PAGE> 6
THE MILLS CORPORATION
SUPPLEMENTAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
June 30 June 30
1999 1998 1999 1998
------- ------- ------- -------
STATEMENT OF OPERATIONS DATA:
REVENUES:
<S> <C> <C> <C> <C>
Minimum rent $25,948 $25,036 $51,965 $49,573
Percentage rent 338 233 534 1,399
Recoveries from tenants 13,173 12,109 26,505 24,173
Other property revenue 1,756 1,488 3,421 2,978
Fee income 2,662 3,365 5,990 4,744
Interest income 482 679 1,536 1,788
------- ------- ------- -------
Total revenues 44,359 42,910 89,951 84,655
EXPENSES:
Recoverable from tenants 11,488 10,517 23,210 20,900
Other property operating 1,252 1,238 2,454 2,707
General and administrative 2,960 2,578 5,884 4,984
Interest expense 11,647 10,820 22,770 21,914
Depreciation and amortization 8,776 8,685 17,393 18,297
------- ------- ------- -------
Total expenses 36,123 33,838 71,711 68,802
Other income/(expense) 519 (43) 340 (86)
Equity in earnings of unconsolidated joint ventures 2,643 891 3,660 2,831
------- ------- ------- -------
Income before extraordinary item and minority interest 11,398 9,920 22,240 18,598
Extraordinary losses on debt extinguishments 0 (422) (2,762) (422)
------- ------- ------- -------
Income before minority interest 11,398 9,498 19,478 18,176
Minority interest (4,628) (3,870) (7,913) (7,428)
------- ------- ------- -------
Net income $ 6,770 $ 5,628 $11,565 $10,748
======= ======= ======= =======
Income per share before extraordinary item (Basic) $ 0.29 $ 0.26 $ 0.57 $ 0.48
======= ======= ======= =======
Income per share before extraordinary item (Diluted) $ 0.29 $ 0.25 $ 0.57 $ 0.47
======= ======= ======= =======
Net income per share (Basic) $ 0.29 $ 0.25 $ 0.50 $ 0.47
======= ======= ======= =======
Net income per share (Diluted) $ 0.29 $ 0.24 $ 0.50 $ 0.46
======= ======= ======= =======
FUNDS FROM OPERATIONS (*):
Income before extraordinary item
and minority interest $11,398 $ 9,920 $22,240 $18,598
Adjustments:
Add: Depreciation and amortization of real estate
assets 7,774 7,810 15,488 16,369
Add: Real estate depreciation and amortization
of unconsolidated joint ventures 2,836 2,555 5,584 4,889
------- ------- ------- -------
Funds from operations $22,008 $20,285 $43,312 $39,856
======= ======= ======= =======
BASIC:
Weighted average shares 23,107 22,986 23,084 22,922
Weighted average shares and units 38,951 38,842 38,928 38,816
DILUTED:
Weighted average shares 23,640 23,589 23,432 23,532
Weighted average shares and units 39,484 39,445 39,277 39,425
</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 9 AND IS NOT
INTENDED TO BE A REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES.
FOR THE THREE MONTHS ENDED JUNE 30, 1999
WHOLLY OWNED PROPERTIES
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C> <C> <C>
Minimum rent $5,444 $4,757 $6,473 $4,388 $353 $4,533 $25,948
Percentage rent 18 18 150 29 66 57 338
Recoveries from tenants 2,447 2,950 3,865 2,386 31 1,494 13,173
Other revenue 195 303 819 286 144 9 1,756
-----------------------------------------------------------------------------------
Total rental revenues 8,104 8,028 11,307 7,089 594 6,093 41,215
PROPERTY OPERATING COSTS:
Recoverable from tenants 2,108 2,386 3,446 2,102 - 1,446 11,488
Other operating 111 266 124 115 428 208 1,252
-----------------------------------------------------------------------------------
Total property operating costs 2,219 2,652 3,570 2,217 428 1,654 12,740
-----------------------------------------------------------------------------------
PROPERTY OPERATING INCOME $5,885 $5,376 $7,737 $4,872 $166 $4,439 $28,475
===================================================================================
</TABLE>
UNCONSOLIDATED JOINT VENTURES
<TABLE>
<CAPTION>
Ontario Grapevine Arizona The Block The Oasis Other Total
------- --------- ------- --------- --------- ----- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C> <C> <C>
Minimum rent $4,805 $5,272 $5,289 $3,943 $983 $117 $20,409
Percentage rent 1 - - 3 - - 4
Recoveries from tenants 2,396 2,432 2,140 1,019 255 54 8,296
Other revenue 400 484 420 332 13 - 1,649
------------------------------------------------------------------------
Total rental revenues 7,602 8,188 7,849 5,297 1,251 171 30,358
PROPERTY OPERATING COSTS:
Recoverable from tenants 2,170 2,116 1,900 1,313 210 8 7,717
Other operating 56 369 332 318 106 55 1,236
------------------------------------------------------------------------
Total property operating costs 2,226 2,485 2,232 1,631 316 63 8,953
------------------------------------------------------------------------
PROPERTY OPERATING INCOME 5,376 5,703 5,617 3,666 935 108 21,405
========================================================================
</TABLE>
(1) Total property operating costs excludes management fees as follows:
Potomac Mills - $234, Franklin Mills - $200, Sawgrass Mills - $299, Gurnee
Mills - $191, Community Centers - $193, Ontario Mills - $201, Grapevine
Mills - $230, Arizona Mills - $202, The Block at Orange - $160 and The
Oasis - $32.
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 9 AND IS NOT
INTENDED TO BE A REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES.
FOR THE THREE MONTHS ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C> <C> <C>
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
------- --------- ------- ----- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C>
Minimum rent $4,662 $5,171 $4,768 $173 $14,774
Percentage rent (20) (2) 127 - 105
Recoveries from tenants 2,189 2,363 2,218 8 6,778
Other revenue 455 465 539 (12) 1,447
-----------------------------------------------------------------
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 248 70 466 115 899
-----------------------------------------------------------------
Total property operating costs 2,313 2,398 2,087 131 6,929
-----------------------------------------------------------------
PROPERTY OPERATING INCOME $4,973 $5,599 $5,565 $ 38 $16,175
=================================================================
</TABLE>
(1) Total property operating costs excludes management fees as follows:
Potomac Mills - $215, Franklin Mills - $182, Sawgrass Mills - $289, Gurnee
Mills - $190, Community Centers - $211, Ontario Mills - $198, Grapevine
Mills - $224, Arizona Mills - $90 and Other - $5.
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 (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 9 AND IS NOT INTENDED
TO BE A REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE SIX MONTHS ENDED JUNE 30, 1999
WHOLLY OWNED PROPERTIES
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C> <C> <C>
Minimum rent $10,797 $9,439 $12,970 $8,781 $754 $9,224 $51,965
Percentage rent 25 55 237 36 124 57 534
Recoveries from tenants 4,867 5,906 7,796 4,823 31 3,082 26,505
Other revenue 374 482 1,589 570 376 30 3,421
--------------------------------------------------------------------------------------
Total rental revenues 16,063 15,882 22,592 14,210 1,285 12,393 82,425
PROPERTY OPERATING COSTS:
Recoverable from tenants 4,234 4,722 7,002 4,252 - 3,000 23,210
Other operating 356 469 247 283 801 298 2,454
--------------------------------------------------------------------------------------
Total property operating costs 4,590 5,191 7,249 4,535 801 3,298 25,664
--------------------------------------------------------------------------------------
PROPERTY OPERATING INCOME 11,473 10,691 15,343 9,675 484 9,095 56,761
======================================================================================
</TABLE>
UNCONSOLIDATED JOINT VENTURES
<TABLE>
<CAPTION>
Ontario Grapevine Arizona The Block The Oasis Other Total
------- --------- ------- --------- --------- ----- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C> <C> <C>
Minimum rent $9,666 $10,623 $10,370 $7,839 $1,192 $131 $39,821
Percentage rent 1 - 110 3 - - 114
Recoveries from tenants 4,772 4,902 4,242 2,029 255 58 16,258
Other revenue 778 898 778 649 13 - 3,116
--------------------------------------------------------------------------------------
Total rental revenues 15,217 16,423 15,500 10,520 1,460 189 59,309
PROPERTY OPERATING COSTS
Recoverable from tenants 4,359 4,472 4,007 2,601 250 8 15,697
Other Operating 292 665 685 394 108 173 2,317
--------------------------------------------------------------------------------------
Total property operating costs 4,651 5,137 4,692 2,995 358 181 18,014
--------------------------------------------------------------------------------------
PROPERTY OPERATING INCOME 10,566 11,286 10,808 7,525 1,102 8 41,295
======================================================================================
</TABLE>
(1) Total property operating costs excludes management fees as follows: Potomac
Mills - $436, Franklin Mills - $393, Sawgrass Mills - $609, Gurnee Mills -
$388, Community Centers - $385, Ontario Mills - $383, Grapevine Mills -
$439, Arizona Mills - $350, The Block at Orange - $349, and The Oasis at
Sawgrass - $34.
12
<PAGE> 10
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH 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 9 AND IS TO NOT INTENDED BE A
REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE SIX MONTHS ENDED JUNE 30, 1998
WHOLLY OWNED PROPERTIES
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C> <C> <C>
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
------- --------- ------- ----- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C>
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 446 181 777 296 1,700
------------------------------------------------------------
Total property operating costs 4,565 4,390 3,958 342 13,255
------------------------------------------------------------
PROPERTY OPERATING INCOME $10,131 $10,977 $10,133 $(73) $31,168
============================================================
</TABLE>
(1) Total property operating costs excludes management fees as follows: Potomac
Mills - $436, Franklin Mills - $366, Sawgrass Mills - $639, Gurnee Mills -
$370, Community Centers - $391, Ontario Mills - $406, Grapevine Mills -
$454, Arizona Mills - $180 and Other - $9.
13
<PAGE> 11
THE MILLS CORPORATION
UNCONSOLIDATED JOINT VENTURES
NET INCOME AND FUNDS FROM OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED JUNE 30, 1999
Ontario Grapevine Arizona The Block
------- --------- ------- ---------
<S> <C> <C> <C> <C>
REVENUES:
Minimum rent $ 4,805 $ 5,272 $ 5,289 $ 3,943
Percentage rent 1 - - 3
Recoveries from tenants 2,396 2,432 2,140 1,019
Interest income 142 476 35 607
Other revenue 400 484 420 332
--------------------------------------------------------
Total revenues 7,744 8,664 7,884 5,904
EXPENSES:
Recoverable from tenants (2,170) (2,116) (1,900) (1,313)
Other operating (1) (257) (599) (534) (478)
Interest expense (2,474) (2,503) (2,226) (1,826)
Depreciation and amortization (2,112) (2,255) (1,715) (2,373)
--------------------------------------------------------
Total Expenses (7,013) (7,473) (6,375) (5,990)
Gain (Loss) on Land Sales - - - -
Other - - (15) (6)
--------------------------------------------------------
NET INCOME 731 1,191 1,494 (92)
========================================================
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
Income before extraordinary items 731 1,191 1,494 (92)
Adjustments:
Add: Depreciation and amortization of
real estate assets 2,077 2,212 1,577 2,212
--------------------------------------------------------
TOTAL FUNDS FROM OPERATIONS $ 2,808 $ 3,403 $ 3,071 $ 2,120
========================================================
MILLS ALLOCATIONS:
Mills share of FFO 1,224 1,155 1,131 602
Management Fees due Mills 201 230 202 160
--------------------------------------------------------
Total Mills FFO $ 1,425 $ 1,385 $ 1,333 $ 762
========================================================
Mills share of net income $ 322 $ 416 $ 552 $ (3)
========================================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED JUNE 30, 1999
The Oasis Other Total
--------- ----- -----
<S> <C> <C> <C>
REVENUES:
Minimum rent $ 982 $ 118 $ 20,409
Percentage rent - - 4
Recoveries from tenants 255 54 8,296
Interest income 57 443 1,760
Other revenue 13 2 1,651
--------------------------------------
Total revenues 1,307 617 32,120
EXPENSES:
Recoverable from tenants (210) (8) (7,717)
Other operating (1) (138) (55) (2,061)
Interest expense (131) (98) (9,258)
Depreciation and amortization (550) - (9,005)
--------------------------------------
Total Expenses (1,029) (161) (28,041)
Gain (Loss) on Land Sales - 1,579 1,579
Other - - (21)
--------------------------------------
NET INCOME 278 2,035 5,637
======================================
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
Income before extraordinary items 278 2,035 5,637
Adjustments:
Add: Depreciation and amortization of
real estate assets 378 - 8,456
--------------------------------------
TOTAL FUNDS FROM OPERATIONS $ 656 $ 2,035 $ 14,093
======================================
MILLS ALLOCATIONS:
Mills share of FFO 192 1,178 5,482
Management Fees due Mills 32 - 825
--------------------------------------
Total Mills FFO $ 224 $ 1,178 $ 6,307
======================================
Mills share of net income $ 89 $ 1,267 $ 2,643
======================================
</TABLE>
(1) Total property operating costs includes management fees as follows:
Ontario Mills - $201, Grapevine Mills - $230, Arizona Mills - $202, The
Block at Orange - $160, and The Oasis - $32.
14
<PAGE> 12
THE MILLS CORPORATION
UNCONSOLIDATED JOINT VENTURES
NET INCOME AND FUNDS FROM OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
Ontario Grapevine Arizona The Block The Oasis Other Total
------- --------- ------- --------- --------- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES:
Minimum rent $ 9,666 $ 10,632 $ 10,370 $ 7,839 $ 1,192 $ 131 $ 39,821
Percentage rent 1 - 110 3 - - 114
Recoveries from tenants 4,772 4,902 4,242 2,029 255 58 16,258
Interest income 286 930 49 1,156 80 508 3,009
Other revenue 778 898 778 649 13 2 3,118
---------------------------------------------------------------------------------------------
Total revenues 15,503 17,353 15,549 11,676 1,540 699 62,320
EXPENSES:
Recoverable from tenants (4,359) (4,472) (4,007) (2,601) (250) (8) (15,697)
Other operating (1) (675) (1,104) (1,035) (743) (142) (173) (3,872)
Interest expense (4,947) (4,984) (4,476) (3,475) (131) (193) (18,206)
Depreciation and amortization (4,220) (4,473) (3,541) (4,344) (625) - (17,203)
---------------------------------------------------------------------------------------------
Total Expenses (14,201) (15,033) (13,059) (11,163) (1,148) (374) (54,978)
Gain (Loss) on Land Sales - - - - - 1,579 1,579
Other - - (30) (12) - - (42)
---------------------------------------------------------------------------------------------
NET INCOME 1,302 2,320 2,460 501 392 1,904 8,879
=============================================================================================
RECONCILIATION OF NET INCOME TO
FUNDS FROM OPERATIONS
Income before extraordinary items 1,302 2,320 2,460 501 392 1,904 8,879
Adjustments:
Add: Depreciation and amortization
of real estate assets 4,149 4,387 3,295 4,028 453 - 16,312
--------------------------------------------------------------------------------------------
TOTAL FUNDS FROM OPERATIONS $ 5,451 $ 6,707 $ 5,755 $ 4,529 $ 845 $ 1,904 $ 25,191
=============================================================================================
MILLS ALLOCATIONS:
Mills share of FFO 2,376 2,276 2,120 1,112 192 1,171 9,247
Management Fees due Mills 383 439 350 349 34 - 730
---------------------------------------------------------------------------------------------
Total Mills FFO $ 2,759 $ 2,715 $ 2,470 $ 1,461 $ 226 $ 1,171 $ 9,977
=============================================================================================
Mills share of net income $ 571 $ 799 $ 907 $ 123 $ 89 $ 1,171 $ 3,660
=============================================================================================
</TABLE>
(1) Total property operating costs includes management fees as follows:
Ontario Mills - $383, Grapevine Mills - $439, Arizona Mills - $350,
The Block at Orange - $349, and The Oasis at Sawgrass - $34.
<PAGE> 13
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 6/99 % Shop GLA at 6/99 %
- ------- --------- ------- ----- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills 1,637,065 1,593,090 97.31% 640,514 616,610 96.27%
Franklin Mills 1,739,849 1,674,032 96.22% 596,373 530,556 88.96%
Sawgrass Mills 1,845,342 1,812,254 98.21% 676,617 663,529 98.07%
Gurnee Mills 1,653,978 1,590,164 96.14% 633,302 569,488 89.92%
---------------------------------------------------- -----------------------------------------------------
Total Mills 6,876,234 6,669,540 96.99% 2,546,806 2,380,183 93.46%
Butterfield 114,610 114,610 100.00% 72,677 72,677 100.00%
Coopers Plaza 173,509 115,115 66.35% 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 177,097 161,781 91.35% 130,341 115,025 88.25%
Gwinnett 194,503 188,513 96.92% 96,956 90,966 93.82%
Liberty Plaza 315,067 248,856 78.99% 52,320 39,458 75.42%
Montgomery Village 117,391 89,469 76.21% 80,986 53,064 65.52%
Mt. Prospect 298,600 291,207 97.52% 126,005 118,612 94.13%
West Falls Church 87,824 87,824 100.00% 49,983 49,983 100.00%
Western Hills 449,496 258,394 57.49% 134,980 103,098 76.38%
---------------------------------------------------- -----------------------------------------------------
2,220,320 1,830,627 82.45% 857,191 738,461 86.15%
---------------------------------------------------- -----------------------------------------------------
Total Wholly Owned 9,096,554 8,500,167 93.44% 3,403,997 3,118,644 91.62%
==================================================== =====================================================
Joint Ventures:
Ontario Mills 1,345,096 1,325,229 98.52% 519,276 499,409 96.17%
Grapevine Mills 1,241,410 1,207,403 97.26% 543,400 509,393 93.74%
Arizona Mills 1,233,884 1,203,069 97.50% 533,153 502,338 94.22%
The Block at Orange 644,652 602,459 93.45% 284,951 242,758 85.19%
The Oasis at Sawgrass 287,299 213,562 74.33% 152,439 78,702 51.63%
---------------------------------------------------- -----------------------------------------------------
Total Joint Venture 4,752,341 4,551,722 95.78% 2,033,219 1,832,600 90.13%
==================================================== =====================================================
Total Mills 10,983,923 10,618,803 96.68% 4,295,074 3,970,025 92.43%
==================================================== =====================================================
Total Wholly Owned
and Joint Venture 13,848,895 13,051,889 94.24% 5,437,216 4,951,244 91.06%
==================================================== =====================================================
<CAPTION>
TOTAL VACANT S.F.
Vacancies
Project Anchor Small Shop Total
- ------- ------ ----------- -----
<S> <C> <C> <C>
Potomac Mills 20,071 23,904 43,975
Franklin Mills 0 65,817 65,817
Sawgrass Mills 20,000 13,088 33,088
Gurnee Mills 0 63,814 63,814
----------------------------------------------
Total Mills 40,071 166,623 206,694
Butterfield 0 0 0
Coopers Plaza 58,394 0 58,394
Crosswinds 0 1,333 1,333
Fashion Place 0 16,032 16,032
Germantown 0 15,316 15,316
Gwinnett 0 5,990 5,990
Liberty Plaza 53,349 12,862 66,211
Montgomery Village 0 27,922 27,922
Mt. Prospect 0 7,393 7,393
West Falls Church 0 0 0
Western Hills 159,220 31,882 191,102
----------------------------------------------
270,963 118,730 389,693
----------------------------------------------
Total Wholly Owned 311,034 285,353 596,387
==============================================
Joint Ventures:
Ontario Mills 0 19,867 19,867
Grapevine Mills 0 34,007 34,007
Arizona Mills 0 30,815 30,815
The Block at Orange 0 42,193 42,193
The Oasis at Sawgrass
Mills 0 73,737 73,737
----------------------------------------------
Total Joint Ventures 0 200,619 200,619
==============================================
Total Mills 40,071 325,049 365,120
==============================================
Total Wholly Owned
and Joint Venture 311,034 485,972 797,006
==============================================
</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 June 1, 1999, excluding tenants with leases
that have a term of less than 1 year (ii) GLA owned by certain store
tenants.
16
<PAGE> 14
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,
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
---------- ------- -------------- -------- ---------- -------- --------------
<S> <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
Specialty 11 36,492 765,210 20.97 28 75,953 1,943,369
Food Court 2 1,567 85,934 54.84 3 2,331 155,647
------------------------------------------------ ----------------------------------
14 80,271 $ 1,167,734 $ 14.55 32 119,605 $ 2,408,924
Franklin Mills:
Anchors (2) - - $ - $ - - - $ -
Majors (2) - - - - 1 32,637 297,256
Specialty 18 63,346 1,485,405 23.45 24 96,958 2,008,643
Food Court 6 5,112 295,361 57.78 - - -
------------------------------------------------ ----------------------------------
24 68,458 $ 1,780,766 $ 26.01 25 129,595 $ 2,305,899
Sawgrass Mills:
Anchors (2,3) - - $ - $ - 1 78,619 $ 255,512
Majors (2) - - - - 1 20,189 240,000
Specialty 2 1,185 81,770 69.00 56 183,069 4,362,671
Food Court 2 1,206 80,500 66.75 21 17,595 994,014
------------------------------------------------ ----------------------------------
4 2,391 $ 162,270 $ 67.87 79 299,472 $ 5,852,197
Gurnee Mills:
Anchors (2) - - $ - $ - - - $ -
Majors (2) - - - - - - -
Specialty 9 41,606 786,996 18.92 18 58,986 1,044,827
Food Court - - - - 1 657 24,309
------------------------------------------------ ----------------------------------
9 41,606 $ 786,996 $ 18.92 19 59,643 $ 1,069,136
Total Mills w/o Joint Ventures:
Anchors (2) - - $ - $ - 1 78,619 $ 255,512
Majors (2) 1 42,212 316,590 7.50 3 94,147 847,164
Specialty 40 142,629 3,119,381 21.87 126 414,966 9,359,510
Food Court 10 7,885 461,795 58.57 25 20,583 1,173,970
------------------------------------------------ ----------------------------------
51 192,726 $ 3,897,766 $ 20.22 155 608,315 $ 11,636,156
================================================ ==================================
<CAPTION>
No. of 2001 No. of
Leases Annualized Leases
psf Expiring Sq Ft Min. Rent psf Expiring
---------- --------- -------- --------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills:
Anchors (2) $ - - - $ - $ - 5
Majors (2) 7.50 2 67,052 602,846 8.99 7
Specialty 25.59 26 67,684 1,778,913 26.28 118
Food Court 66.77 3 2,484 149,601 60.23 6
---------- -------------------------------------------------------------
$ 20.14 31 137,220 $ 2,531,360 $ 18.45 136
Franklin Mills:
Anchors (2) $ - 1 70,701 $ 484,302 $ 6.85 4
Majors (2) 9.11 1 25,127 178,402 7.10 9
Specialty 20.72 35 98,713 2,101,934 21.29 69
Food Court - 2 1,000 40,990 40.99 6
---------- -------------------------------------------------------------
$ 17.79 39 195,541 $ 2,805,628 $ 14.35 88
Sawgrass Mills:
Anchors (2,3) $ 3.25 2 147,915 $ 1,101,435 $ 7.45 5
Majors (2) 11.89 - - - - 8
Specialty 23.83 47 165,654 3,953,183 23.86 88
Food Court 56.49 5 4,313 217,503 50.43 2
---------- -------------------------------------------------------------
$ 19.54 54 317,882 $ 5,272,121 $ 16.59 103
Gurnee Mills:
Anchors (2) $ - 3 231,271 $ 1,381,540 $ 5.97 3
Majors (2) - 1 40,752 289,339 7.10 6
Specialty 17.71 55 181,894 3,610,174 19.85 73
Food Court 37.00 14 10,061 569,153 56.57 12
---------- -------------------------------------------------------------
$ 17.93 73 463,978 $ 5,850,206 $ 12.61 94
Total Mills w/o Joint Ventures:
Anchors (2) $ 3.25 6 449,887 $ 2,967,277 $ 6.60 17
Majors (2) 9.00 4 132,931 1,070,587 8.05 30
Specialty 22.55 163 513,945 11,444,204 22.27 348
Food Court 57.04 24 17,858 977,247 54.72 26
---------- -------------------------------------------------------------
$ 19.13 197 1,114,621 $ 16,459,315 $ 14.77 421
========== =============================================================
<CAPTION>
After 2001 No. of Total
Annualized Leases Annualized
Sq Ft Min. Rent psf Expiring Sq Ft Min. Rent psf
----------- ------------- ------- ---------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Potomac Mills:
Anchors (2) 530,633 $ 3,040,838 $ 5.73 5 530,633 $ 3,040,838 $ 5.73
Majors (2) 215,262 1,922,461 8.93 11 365,847 3,151,805 8.62
Specialty 426,296 10,398,912 24.39 183 606,425 14,886,404 24.55
Food Court 3,803 245,870 64.65 14 10,185 637,052 62.55
------------------------------------ ------------------------------------------------
1,175,994 $ 15,608,081 $ 13.27 213 1,513,090 $ 21,716,099 $ 14.35
Franklin Mills:
Anchors (2) 358,233 $ 3,021,003 $ 8.43 5 428,934 $ 3,505,305 $ 8.17
Majors (2) 294,796 2,887,632 9.80 11 352,560 3,363,290 9.54
Specialty 261,201 5,408,327 20.71 146 520,218 11,004,309 21.15
Food Court 4,226 153,336 36.28 14 10,338 489,687 47.37
------------------------------------ ------------------------------------------------
918,456 $ 11,470,298 $ 12.49 176 1,312,050 $ 18,362,591 $ 14.00
Sawgrass Mills:
Anchors (2,3) 432,246 $ 2,836,951 $ 6.56 8 658,780 $ 4,193,898 $ 6.37
Majors (2) 247,462 3,037,570 12.27 9 267,651 3,277,570 12.25
Specialty 286,884 8,101,018 28.24 193 636,792 16,498,642 25.91
Food Court 3,623 82,148 22.67 30 26,737 1,374,165 51.40
------------------------------------ ------------------------------------------------
970,215 $ 14,057,687 $ 14.49 240 1,589,960 $ 25,344,275 $ 15.94
Gurnee Mills:
Anchors (2) 303,714 $ 1,410,715 $ 4.64 6 534,985 $ 2,792,255 $ 5.22
Majors (2) 194,133 2,079,322 10.71 7 234,885 2,368,661 10.08
Specialty 268,179 5,601,505 20.89 155 550,665 11,043,502 20.05
Food Court 8,105 433,603 53.50 27 18,823 1,027,065 54.56
------------------------------------ ------------------------------------------------
774,131 $ 9,525,145 $ 12.30 195 1,339,358 $ 17,231,483 $ 12.87
Total Mills w/o Joint Ventures:
Anchors (2) 1,624,826 $ 10,309,507 $ 6.34 24 2,153,332 $ 13,532,296 $ 6.28
Majors (2) 951,653 9,926,985 10.43 38 1,220,943 12,161,326 9.96
Specialty 1,242,560 29,509,762 23.75 677 2,314,100 53,432,857 23.09
Food Court 19,757 914,957 46.31 85 66,083 3,527,969 53.39
------------------------------------ ------------------------------------------------
3,838,796 $ 50,661,211 $ 13.20 824 5,754,458 $ 82,654,448 $ 14.36
==================================== ================================================
</TABLE>
(1) The 1999 amounts represent the total square footage and total annualized
minimum rent that will expire during the last six 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..
(3) For lease expiration purposes, Sawgrass Mills includes 59,480 square feet of
gross leaseable area that is now part of Sawgrass Mills Phase III (The
Oasis), since the rent associated with the square footage is assigned to
Sawgrass Mills due to project loan requirements.
17
<PAGE> 15
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,
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>
Ontario Mills:
Anchors (2) - - $ - $ - - - $ - $ -
Majors (2) - - - - - - - -
Specialty 5 10,361 316,955 30.59 5 11,104 278,191 25.05
Food Court - - - - - - - -
---------------------------------------------- ---------------------------------------------------
5 10,361 $ 316,955 $ 30.59 5 11,104 $ 278,191 $ 25.05
Grapevine Mills:
Anchors (2) - - $ - $ - - - $ - $ -
Majors (2) - - - - - - - -
Specialty 3 6,340 121,965 19.24 7 13,723 358,792 26.15
Food Court - - - - - - - -
---------------------------------------------- ---------------------------------------------------
3 6,340 $ 121,965 $ 19.24 7 13,723 $ 358,792 $ 26.15
Arizona Mills:
Anchors (2) - - $ - $ - - - $ - $ -
Majors (2) - - - - - - - -
Specialty - - - - 7 19,992 546,761 27.35
Food Court - - - - - - - -
---------------------------------------------- ---------------------------------------------------
- - $ - $ - 7 19,992 $ 546,761 $ 27.35
The Oasis at Sawgrass
Anchors (2,3) - - $ - $ - - - $ - $ -
Majors (2) - - - - - - - -
Specialty - - - - - - - -
Food Court - - - - - - - -
---------------------------------------------- ---------------------------------------------------
- - $ - $ - - - $ - $ -
Total Mills with 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 48 159,330 3,558,301 22.33 145 459,785 10,543,254 22.93
Food Court 10 7,885 461,795 58.57 25 20,583 1,173,970 57.04
---------------------------------------------- ---------------------------------------------------
59 209,427 $ 4,336,686 $ 20.71 174 653,134 $ 12,819,900 $ 19.63
============================================== ===================================================
The Block at Orange
Anchors (2) - - $ - $ - - - $ - $ -
Majors (2) - - - - - - - -
Specialty - - - - 2 826 72,210 87.42
Food Court - - - - - - - -
---------------------------------------------- ---------------------------------------------------
- - $ - $ - 2 826 $ 72,210 $ 87.42
Community Centers:
Anchors (2) - - $ - $ - - - $ - $ -
Majors (2) - - - - 1 21,007 278,343 13.25
Specialty 20 59,739 871,578 14.59 25 109,276 1,218,804 11.15
Food Court - - - - - - - -
---------------------------------------------- ---------------------------------------------------
20 59,739 $ 871,578 $ 14.59 26 130,283 $ 1,497,147 $ 11.49
============================================== ===================================================
Totals
Anchors (2) - - $ - $ - 1 78,619 $ 255,512 $ 3.25
Majors (2) 1 42,212 316,590 7.50 4 115,154 1,125,507 9.77
Specialty 68 219,069 4,429,879 20.22 172 569,887 11,834,268 20.77
Food Court 10 7,885 461,795 58.57 25 20,583 1,173,970 57.04
---------------------------------------------- ---------------------------------------------------
79 269,166 $ 5,208,264 $ 19.35 202 784,243 $ 14,389,257 $ 18.35
============================================== ===================================================
<CAPTION>
No. of 2001 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) - - - - 13 414,797
Specialty 49 208,043 4,031,309 19.38 83 241,576
Food Court - - - - 3 11,730
------------------------------------------------------ -------------------------
49 208,043 $ 4,031,309 $ 19.38 103 954,126
Grapevine Mills:
Anchors (2) - - $ - $ - 3 315,042
Majors (2) - - - - 13 382,968
Specialty 11 28,115 640,769 22.79 130 451,415
Food Court - - - - 1 9,800
------------------------------------------------------ -------------------------
11 28,115 $ 640,769 $ 22.79 147 1,159,225
Arizona Mills:
Anchors (2) - - $ - $ - 5 382,513
Majors (2) - - - - 11 318,218
Specialty 11 23,803 636,079 26.72 118 444,619
Food Court - - - - 1 13,924
------------------------------------------------------ -------------------------
11 23,803 $ 636,079 $ 26.72 135 1,159,274
The Oasis at Sawgrass
Anchors (2,3) - - $ - $ - 1 32,802
Majors (2) - - - - 2 42,578
Specialty - - - - 21 78,702
Food Court - - - - - -
------------------------------------------------------ -------------------------
- - $ - $ - 24 154,082
Total Mills with Joint Ventures:
Anchors (2) 6 449,887 $ 2,967,277 $ 6.60 30 2,641,206
Majors (2) 4 132,931 1,070,587 8.05 69 2,110,214
Specialty 234 773,906 16,752,361 21.65 700 2,458,872
Food Court 24 17,858 977,247 54.72 31 55,211
------------------------------------------------------ -------------------------
268 1,374,582 $ 21,767,472 $ 15.84 830 7,265,503
====================================================== =========================
The Block at Orange
Anchors (2) - - $ - $ - 2 172,785
Majors (2) - - - - 7 186,916
Specialty 6 5,910 224,875 38.05 65 223,084
Food Court - - - - 10 12,938
------------------------------------------------------ -------------------------
6 5,910 $ 224,875 $ 38.05 84 595,723
Community Centers:
Anchors (2) - - $ - $ - 6 466,402
Majors (2) 1 24,300 133,650 5.50 17 557,821
Specialty 46 164,759 2,159,806 13.11 106 411,342
Food Court - - - - - -
------------------------------------------------------ -------------------------
47 189,059 $ 2,293,456 $ 12.13 129 1,435,565
====================================================== =========================
Totals
Anchors (2) 6 449,887 $ 2,967,277 $ 6.60 38 3,280,393
Majors (2) 5 157,231 1,204,237 7.66 93 2,854,951
Specialty 286 944,575 19,137,042 20.26 871 3,093,298
Food Court 24 17,858 977,247 54.72 41 68,149
------------------------------------------------------ -------------------------
321 1,569,551 $ 24,285,803 $ 15.47 1,043 9,296,791
====================================================== =========================
<CAPTION>
After 2001 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) 5,000,587 12.06 13 414,797 5,000,587 12.06
Specialty 6,113,432 25.31 142 471,084 10,739,887 22.80
Food Court 594,165 50.65 3 11,730 594,165 50.65
---------------------------- ----------------------------------------------------
$ 13,591,316 $ 14.24 162 1,183,634 $ 18,217,771 $ 15.39
Grapevine Mills:
Anchors (2) $ 3,638,510 $ 11.55 3 315,042 $ 3,638,510 $ 11.55
Majors (2) 5,038,296 13.16 13 382,968 5,038,296 13.16
Specialty 10,099,051 22.37 151 499,593 11,220,577 22.46
Food Court 588,000 60.00 1 9,800 588,000 60.00
---------------------------- ----------------------------------------------------
$ 19,363,857 $ 16.70 168 1,207,403 $ 20,485,383 $ 16.97
Arizona Mills:
Anchors (2) $ 3,138,643 $ 8.21 5 382,513 $ 3,138,643 $ 8.21
Majors (2) 4,400,131 13.83 11 318,218 4,400,131 13.83
Specialty 9,890,909 22.25 136 488,414 11,073,749 22.67
Food Court 832,502 59.79 1 13,924 832,502 59.79
---------------------------- ----------------------------------------------------
$ 18,262,185 $ 15.75 153 1,203,069 $ 19,445,025 $ 16.16
The Oasis at Sawgrass
Anchors (2,3) $ 615,322 $ 18.76 1 32,802 $ 615,322 $ 18.76
Majors (2) 882,869 20.74 2 42,578 882,869 20.74
Specialty 2,669,778 33.92 21 78,702 2,669,778 33.92
Food Court - - - - - -
---------------------------- ----------------------------------------------------
$ 4,167,969 $ 27.05 24 154,082 $ 4,167,969 $ 27.05
Total Mills with Joint Ventures:
Anchors (2) $ 19,585,114 $ 7.42 37 3,169,712 $ 22,807,903 $ 7.20
Majors (2) 25,248,868 11.97 77 2,379,504 27,483,209 11.55
Specialty 58,282,932 23.70 1,127 3,851,893 89,136,848 23.14
Food Court 2,929,624 53.06 90 101,537 5,542,636 54.59
---------------------------- ----------------------------------------------------
$ 106,046,538 $ 14.60 1,331 9,502,646 $ 144,970,596 $ 15.26
============================ ====================================================
The Block at Orange
Anchors (2) $ 3,473,326 $ 20.10 2 172,785 $ 3,473,326 $ 20.10
Majors (2) 2,839,831 15.19 7 186,916 2,839,831 15.19
Specialty 6,757,498 30.29 73 229,820 7,054,583 30.70
Food Court 958,121 74.05 10 12,938 958,121 74.05
---------------------------- ----------------------------------------------------
$ 14,028,776 $ 23.55 92 602,459 $ 14,325,861 $ 23.78
Community Centers:
Anchors (2) $ 3,202,616 $ 6.87 6 466,402 $ 3,202,616 $ 6.87
Majors (2) 3,939,691 7.06 19 603,128 4,351,684 7.22
Specialty 5,668,456 13.78 197 745,116 9,918,644 13.31
Food Court - - - - - -
---------------------------- ----------------------------------------------------
$ 12,810,763 $ 8.92 222 1,814,646 $ 17,472,944 $ 9.63
============================ ====================================================
Totals
Anchors (2) $ 26,261,056 $ 8.01 45 3,808,899 $ 29,483,845 $ 7.74
Majors (2) 32,028,390 11.22 103 3,169,548 34,674,724 10.94
Specialty 68,039,108 22.00 1,397 4,826,829 106,110,075 21.98
Food Court 3,887,745 57.05 100 114,475 6,500,757 56.79
---------------------------- ----------------------------------------------------
$ 130,216,299 $ 14.01 1,645 11,919,751 $ 176,769,401 $ 14.83
============================ ====================================================
</TABLE>
(1) The 1999 amounts represent the total square footage and total annualized
minimum rent that will expire during the last six 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..
(3) For lease expiration
purposes, The Oasis excludes 59,480 square feet of gross leaseable area,
since the rent associated with the square footage is assigned to Sawgrass
Mills due to project loan requirements.
18
<PAGE> 16
RENTAL RATES (1)
The following table sets forth the average base rent per leased square foot of
store openings and closings for each property for the six months ended June 30,
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 39,275 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 18.84 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 $26.41 58,887 $24.16 40,368 $ 2.25 9.33%
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 31.87%
FRANKLIN MILLS 1999 $24.82 18,039 $20.30 36,460 $ 4.52 22.31%
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 $22.18 29,092 $18.28 52,359 $ 3.90 21.35%
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 $43.04 11,707 $35.78 16,996 $ 7.26 20.28%
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 $27.24 8,913 $31.17 14,229 $(3.93) (12.61%)
1998 27.34 35,616 27.64 26,400 (0.30) (6.26%)
TOTAL MILLS 1999 $26.81 126,638 $23.22 160,412 $ 3.59 15.48%
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 six months ended June
30, 1999 and twelve months ended December 31, 1998, 1997, 1996. Openings
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
19
<PAGE> 17
AVERAGE RENTS
The following table sets forth, for each of the last three years and the six
months 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
PERCENT -----------------------------------------------------------------
LEASED (1) TOTAL PER SQ. FT. TOTAL PER SQ. FT.
---------- -------------- -------------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
POTOMAC MILLS
1999 (2nd Qtr) 97% $ 22,184,725 $14.75 $ 6,216,527 $6.93
1998 95 21,443,619 14.43 6,001,966 6.75
1997 96 20,980,272 14.04 6,284,111 6.86
1996 96 20,865,975 14.00 6,142,999 6.76
FRANKLIN MILLS
1999 (2nd Qtr) 96% 19,384,676 13.14 7,075,424 7.58
1998 94 17,689,143 12.38 6,050,348 6.61
1997 92 16,549,052 11.47 5,700,661 6.05
1996 92 16,318,689 11.40 5,291,698 5.67
SAWGRASS MILLS
1999 (2) (2nd Qtr) 98% 27,707,425 17.81 7,485,284 8.12
1998 (2) 98 26,969,276 17.29 7,265,079 8.13
1997 (2) 97 26,448,955 17.08 7,384,896 8.28
1996 98 25,787,924 16.55 7,150,346 8.03
GURNEE MILLS
1999 (2nd Qtr) 97% 18,367,129 13.56 5,218,213 6.78
1998 96 17,525,250 13.06 5,022,342 6.52
1997 91 15,900,406 13.80 4,418,036 7.42
1996 90 15,340,496 13.62 3,823,991 6.78
ONTARIO MILLS
1999 (2nd Qtr) 99% 20,028,525 16.61 7,415,372 10.58
1998 98 19,516,934 16.50 7,300,086 10.61
1997 95 18,708,479 17.11 6,358,058 10.11
GRAPEVINE MILLS
1999 (2nd Qtr) 98% 21,608,028 17.84 8,925,976 12.79
1998 95 21,108,019 18.03 8,797,950 12.74
ARIZONA MILLS
1999 (2nd Qtr) 97% 21,048,978 17.63 7,862,015 11.35
1998 95 19,165,290 16.82 7,262,540 10.83
TOTAL - MILLS
1999 (2nd Qtr) 97% $ 150,329,486 $15.78 $50,198,811 $8.94
1998 96 143,417,531 15.41 47,700,311 8.65
1997 94 98,587,164 14.65 30,145,762 7.58
1996 94 78,313,084 13.97 22,409,034 6.80
THE BLOCK AT ORANGE
1999 (2nd Qtr) 94% 15,949,838 26.43 6,795,685 18.89
TOTAL (INCL THE BLOCK)
1999 (2nd Qtr) 97% 165,279,324 16.41 56,994,496 9.54
</TABLE>
<TABLE>
<CAPTION>
MINIMUM RENT PLUS PERCENTAGE RENTS
----------------------------------
SPECIALTY STORES
---------------------------------
TOTAL PER SQ. FT.
-------------- ---------------
<S> <C> <C>
POTOMAC MILLS
1999 (2nd Qtr) $15,968,198 $26.29
1998 15,441,653 25.91
1997 14,696,161 25.44
1996 14,722,976 23.32
FRANKLIN MILLS
1999 (2nd Qtr) 12,309,252 22.75
1998 11,638,795 22.64
1997 10,848,391 21.68
1996 11,026,991 22.16
SAWGRASS MILLS
1999 (2) (2nd Qtr) 20,222,141 30.50
1998 (2) 19,704,197 29.57
1997 (2) 19,064,059 29.04
1996 18,637,578 27.90
GURNEE MILLS
1999 (2nd Qtr) 13,148,916 22.50
1998 12,502,908 21.85
1997 11,482,370 20.63
1996 11,516,505 20.50
ONTARIO MILLS
1999 (2nd Qtr) 12,613,153 24.99
1998 12,216,848 24.68
1997 12,350,421 26.59
GRAPEVINE MILLS
1999 (2nd Qtr) 12,682,053 24.73
1998 12,310,069 25.63
ARIZONA MILLS
1999 (2nd Qtr) 13,186,962 26.28
1998 11,902,750 25.41
TOTAL - MILLS
1999 (2nd Qtr) $100,130,675 $25.57
1998 95,717,220 25.24
1997 68,441,402 24.84
1996 55,904,050 24.21
THE BLOCK AT ORANGE
1999 (2nd Qtr) 9,154,153 37.54
TOTAL (INCL THE BLOCK)
1999 (2nd Qtr) 109,284,828 26.28
</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
$1,285,711 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.
20
<PAGE> 18
THE MILLS CORPORATION
SUMMARY OF OUTSTANDING CONSOLIDATED INDEBTEDNESS
(DOLLARS IN THOUSANDS)
AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
Principal Annual
Balance Annual Interest Maturity Interest
(000's) Term Rate Date (000's)
------- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Potomac Mills/Gurnee Mills:
Tranche A $204,392 Fixed 6.905% 12/17/26 (1) $14,112
Tranche B 27,000 Fixed 7.021% 12/17/26 (1) 1,896
Tranche C 15,000 Fixed 7.235% 12/17/26 (1) 1,085
Tranche D 30,000 Fixed 7.701% 12/17/26 (1) 2,310
Franklin Mills and Liberty Plaza
Tranche A 108,042 Fixed 7.882% 6/1/27 (3) 8,516
Mortgage Loan 19,664 Fixed 7.440% 6/1/27 (3) 1,463
Mortgage Loan 12,891 Fixed 6.220% 6/1/27 (3) 802
Sawgrass Mills:
Tranche A 115,000 Fixed 6.450% 1/18/01 7,418
Tranche B 10,000 Variable with cap 85 bp over Libor (6) 1/18/01 609 (7)
Tranche C 20,000 Variable with cap 230 bp over Libor (6) 1/18/01 1,507 (7)
Sawgrass Mills - Phase II 18,000 Fixed 6.970% 1/18/01 1,255
Ten Community Centers 112,135 Fixed 7.300% 2/1/29 8,186
Concord Mills Residual III 8,275 Variable 200 bp over Libor 12/31/00 599
---------- ------------
Total Property Mortgages 700,399 49,758
---------- ------------
Sawgrass Mills Mezzanine Loan 57,000 Variable 475 bp over Libor 10/1/00 5,692 (7)
Corporate Misc 556 Fixed 8.250% 10/31/00 46
Corporate Misc 2,400 Fixed 6.200% 7/15/00 149
Corporate Line of Credit 54,000 Variable 150 bp over Libor 4/1/00 3,638 (7)
Corporate Misc 15,000 Variable 125 bp over Libor 1/18/00 973 (7)
Sawgrass Residual 4,700 Variable 165 bp over Libor 1/18/01 324 (7)
---------- ------------
Total $834,055 $60,580
========== ============
<CAPTION>
Earliest day Recourse to
at which debt Company or
can be repaid Op. Ptnrshp
------------- -----------
<S> <C> <C>
Potomac Mills/Gurnee Mills:
Tranche A (2) 0%
Tranche B (2) 0%
Tranche C (2) 0%
Tranche D (2) 0%
Franklin Mills and Liberty Plaza
Tranche A (4) 0%
Mortgage Loan (4) 0%
Mortgage Loan
Sawgrass Mills:
Tranche A (5) 0%
Tranche B (5) 0%
Tranche C (5) 0%
Sawgrass Mills - Phase II (8) 0% (14)
Ten Community Centers (15) 0%
Concord Mills Residual III (16) 100%
Total Property Mortgages
Sawgrass Mills Mezzanine Loan (17) 0% (18)
Corporate Misc (11) 0%
Corporate Misc (11) 0%
Corporate Line of Credit (8), (10) 100%
Corporate Misc (13) 100%
Sawgrass Residual (12) 0%
Total
</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 5.23625%, which was the rate at June 30,
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 June 30, 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.
(17) Optional payments of principal are not permitted prior to September 11,
1999. After September 11, 1999 but before December 11, 1999, the
indebtedness may be prepaid in whole or in part with at least 5 business
days notice with a prepayment premium equal to 1% of the principal
indebtedness being repaid. After December 11, 1999, the indebtedness may
be prepaid in whole or in part with at least 5 business days notice without
a prepayment fee.
(18) The loan is secured by the Company's interest in the property.
21
<PAGE> 19
THE MILLS CORPORATION
SUMMARY OF OUTSTANDING UNCONSOLIDATED INDEBTEDNESS
(DOLLARS IN THOUSANDS)
AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
Principal Annual
Balance Total Annual Interest Maturity Interest
(000's) Commitment Term Rate Date (000's)
------- ---------- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C>
Arizona Mills $142,214 $142,214 Variable 130 bp over Libor (4),(5) 2/1/02 9,295
Grapevine Mills 155,000 155,000 Fixed 6.465% 9/1/32 (8) 10,021
Ontario Mills 144,295 145,000 Fixed 6.750% 12/1/28 (9) 9,740
City Block at Orange 126,255 136,000 Variable 165 bp over Libor (6) 1/22/02 8,694 (4)
Sawgrass Phase III 34,247 44,000 Variable 165 bp over Libor (7) 1/18/01 2,358 (4)
Concord Mills 83,102 199,000 Variable 135 bp over Libor 12/2/01 5,473 (4)
Katy Mills 41,832 168,000 Variable 200 bp over Libor 3/31/02 3,027 (4)
Katy Mills Bridge
Loan 1,062 25,000 Variable 275 bp over Libor 3/31/01 85 (4)
---------- ------------ ---------
Total $728,007 $1,014,214 $48,694
========== ============ =========
<CAPTION>
Earliest day Recourse to
at which debt Company or
can be repaid Op. Ptnrshp
------------- -----------
<S> <C> <C>
Arizona Mills (1) 9.2% (10)
Grapevine Mills (2) 0.0%
Ontario Mills (3) 0.0%
City Block at Orange (3) 26.9% (11)
Sawgrass Phase III (16) 100.0% (12)
Concord Mills (2) 50.0% (13)
Katy Mills (16) 100.0% (14)
Katy Mills Bridge
Loan (16) 100.0% (15)
Total
</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 5.23625%, which was the rate at June 30,
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-".
(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 June 30, 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; (ii) upon
construction completion, grand opening and a Debt Service Coverage ratio
of 1.00 the Guaranteed Amount will reduce to $68,000; (iii) upon achieving
a DSC ratio of 1.25 the Guaranteed Amount will reduce to $34,000; (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%. As of June 30, 1999 the guarantee amount was $34,000.
(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%.
As of June 30, 1999, the guarantee amount was 100%.
(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 is used
to bridge tax increment financing bonds. The principal is guaranteed by
the Company during the period in which the bridge loan is outstanding.
The loan was repaid in July, 1999.
(16) This indebtedness may be prepaid, in whole or in part, upon 5 business
days notice to the Administrative Agent.
22
<PAGE> 20
THE MILLS CORPORATION
GROSS SALES
JUNE 30, 1999
<TABLE>
<CAPTION>
Twelve Months ended June 30, 1999 Twelve Months ended June 30, 1998
--------------------------------- ---------------------------------
Sq Ft Sales psf Sq Ft Sales psf
----- ----- --- ----- ----- ---
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills:
Anchor/Majors 904,826 $ 200,551,312 $ 222 900,790 $ 182,803,850 203
Specialty 587,957 190,018,961 323 569,668 185,316,710 325
Temporary/Kiosk - 4,114,097 - - 5,658,316 -
----------------------------------------------- -----------------------------------------
1,492,783 $ 394,684,370 $ 264 1,470,458 $ 373,778,876 $ 254
Franklin Mills:
Anchor/Majors 968,092 $ 153,244,354 $ 158 953,450 $ 163,778,433 $ 172
Specialty 542,651 166,811,030 307 486,816 144,027,916 296
Temporary/Kiosk - 4,793,768 - - 6,715,160 -
----------------------------------------------- -----------------------------------------
1,510,743 $ 324,849,152 $ 215 1,440,266 $ 314,521,509 $ 218
Sawgrass Mills:
Anchor/Majors 1,109,979 $ 334,669,756 $ 302 1,178,685 $ 363,419,337 $ 308
Specialty 661,947 293,734,248 444 662,902 302,721,081 457
Temporary/Kiosk - 17,740,081 - - 13,849,610 -
----------------------------------------------- -----------------------------------------
1,771,926 $ 646,144,085 $ 365 1,841,587 $ 679,990,028 $ 369
Gurnee Mills:
Anchor/Majors 825,725 $ 145,319,645 $ 176 768,982 $ 122,817,959 $ 160
Specialty 558,324 160,927,535 288 569,449 156,873,021 275
Temporary/Kiosk - 7,585,941 - - 8,238,684 -
----------------------------------------------- -----------------------------------------
1,384,049 $ 313,833,121 $ 228 1,338,431 $ 287,929,664 $ 215
Ontario Mills:
Anchor/Majors 842,304 $ 139,662,513 $ 166 815,486 $ 136,057,937 $ 167
Specialty 483,315 170,723,896 353 464,882 162,477,554 350
Temporary/Kiosk - 7,915,682 - - 7,244,442 -
----------------------------------------------- -----------------------------------------
1,325,619 $ 318,302,091 $ 240 1,280,368 $ 305,779,933 $ 239
Total Mills w/o Grapvine
Mills and Arizona Mills
Anchor/Majors 4,650,926 $ 973,447,580 $ 209 4,617,393 $ 968,877,516 $ 210
Specialty 2,834,194 982,215,670 347 2,753,717 951,416,282 346
Temporary/Kiosk - 42,149,569 - - 41,706,212 -
----------------------------------------------- -----------------------------------------
7,485,120 $ 1,997,812,819 $ 267 7,371,110 $ 1,962,000,010 $ 266
Grapevine Mills:
Anchor/Majors 701,060 $ 114,973,392 $ 164 N/A (1) N/A (1) N/A (1)
Specialty 505,258 145,973,287 289 N/A (1) N/A (1) N/A (1)
Temporary/Kiosk - 8,763,636 - N/A (1) N/A (1) N/A (1)
----------------------------------------------- -----------------------------------------
1,206,318 $ 269,710,315 $ 224 N/A (1) N/A (1) N/A (1)
Arizona Mills:
Anchor/Majors 692,169 $ 115,040,237 $ 166 N/A (1) N/A (1) N/A (1)
Specialty 476,805 140,772,419 295 N/A (1) N/A (1) N/A (1)
Temporary/Kiosk - 12,364,708 - N/A (1) N/A (1) N/A (1)
----------------------------------------------- -----------------------------------------
1,168,974 $ 268,177,364 $ 229 N/A (1) N/A (1) N/A (1)
Total Mills
Anchor/Majors 6,044,155 $ 1,203,461,209 $ 199 4,617,393 $ 968,877,516 $ 210
Specialty 3,816,257 1,268,961,376 333 2,753,717 951,416,282 346
Temporary Kiosk - 63,277,913 - - 41,706,212 -
----------------------------------------------- -----------------------------------------
9,860,412 $ 2,535,700,498 $ 257 7,371,110 $ 1,962,000,010 $ 266
=============================================== =========================================
<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.
23
<PAGE> 21
THE MILLS CORPORATION
COMPARABLE SPECIALTY STORES TENANT SALES
SIX MONTHS 1999 VS. SIX MONTHS 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
YTD YTD
June 30, 1999 June 30, 1998 Percentage
Sales Sales Change
----- ----- ------
<S> <C> <C> <C>
Specialty Stores:
- -----------------
Potomac Mills: $71,544 $69,393 3.1%
Franklin Mills: $49,569 $48,916 1.3%
Sawgrass Mills: $127,653 $132,863 -3.9%
Gurnee Mills: $55,182 $55,009 0.3%
Ontario Mills $66,024 $62,417 5.8%
---------------- ---------------- ----------------
Total $369,972 $368,598 0.4%
================ ================ ================
</TABLE>
Note: Comparable sales presented above are based on tenant reported sales
for the six months of 1999 versus the six months of 1998 and include
only those tenants that have been in occupancy for the past 18
months. Properties that have less than 24 months of operations have
been excluded.
24
<PAGE> 22
THE MILLS CORPORATION
CAPITAL EXPENDITURES
MILLS AND COMMUNITY CENTERS COMBINED (9)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1999 1998 1997
----------------- ---------------- ----------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 125,536 $ 1,453,123 $ 435,742
Per Square Foot (2) 0.01 0.12 0.05
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 1,681,375 $ 5,467,329 $ 5,143,206
Per Square Foot Improved (4) 15.29 7.85 11.90
Per Square Foot (2) 0.14 0.46 0.62
TOTAL RECURRING COSTS
Costs $ 1,806,910 $ 6,920,452 $ 5,578,948
Per Square Foot (2) 0.15 0.58 0.67
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 4,750,080 (7) $ 18,911,845 (7) $ 41,571,485 (7)
Per Square Foot Improved (5) 71.65 71.68 73.69
Per Square Foot (2) 0.40 1.58 5.03
WORK IN PROCESS (6)
Cummulative Costs $ 12,215,876 $ 8,447,326 $ 4,703,992
Cummulative Per Square Foot Improved (8) 37.62 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).
25
<PAGE> 23
THE MILLS CORPORATION
CAPITAL EXPENDITURES
MILLS PORTFOLIO (9)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1999 1998 1997
----------------- ---------------- ----------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 60,851 $ 949,095 $ 388,003
Per Square Foot (2) 0.01 0.10 0.06
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 1,562,003 $ 4,274,398 $ 4,518,073
Per Square Foot Improved (4) 15.22 8.53 13.35
Per Square Foot (2) 0.16 0.44 0.75
TOTAL RECURRING COSTS
Costs $ 1,622,854 $ 5,223,493 $ 4,906,076
Per Square Foot (2) 0.17 0.54 0.81
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 4,335,491 (7) $ 18,175,677 (7) $ 41,010,815 (7)
Per Square Foot Improved (5) 105.45 96.48 78.37
Per Square Foot (2) 0.44 1.86 6.77
WORK IN PROCESS (6)
Cummulative Costs $ 8,934,271 $ 6,779,660 $ 3,989,739
Cummulative Per Square Foot Improved (8) 50.92 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).
26
<PAGE> 24
THE MILLS CORPORATION
CAPITAL EXPENDITURES
COMMUNITY CENTERS
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1999 1998 1997
----------------- ---------------- ----------------
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 64,685 $ 504,028 $ 47,739
Per Square Foot (2) 0.03 0.23 0.02
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 119,372 $ 1,192,931 $ 625,133
Per Square Foot Improved (4) 16.35 6.10 6.68
Per Square Foot (1) 0.05 0.54 0.28
TOTAL RECURRING COSTS
Costs $ 184,056 $ 1,696,959 $ 672,872
Per Square Foot (2) 0.08 0.77 0.31
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 414,589 $ 736,168 $ 560,670
Per Square Foot Improved (5) 16.46 9.76 13.73
Per Square Foot (2) 0.19 0.33 0.25
WORK IN PROCESS (6)
Cummulative Costs $ 3,281,605 $ 1,667,666 $ 714,253
Cummulative Per Square Foot Improved (7) 21.98 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.
27
