<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>
<S> <C>
Date of Report (Date of earliest event reported): Commission File Number:
- ------------------------------------------------- -----------------------
September 30, 1998 1 - 12994
</TABLE>
THE MILLS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware 52-1802283
-------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1300 Wilson Boulevard, Suite 400, Arlington, Virginia 22209
-----------------------------------------------------------
(Address of principal executive offices - zip code)
(703)526-5000
-------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
(former name or former address, if changed since last report)
Not Applicable
- ------------------------------------------------------------------------------
<PAGE> 2
THE MILLS CORPORATION
FORM 8-K
INDEX
-----
ITEM 5. OTHER EVENTS
The Registrant made available additional operational information
concerning the Registrant, The Mills Corporation, and the properties
owned or managed by it as of September 30, 1998, in the form of a
Supplemental Information Package, a copy of which is included as an
exhibit to this filing. The Supplemental Information package is
available upon request as specified therein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements
NONE.
Exhibits:
<TABLE>
<CAPTION>
Page Number in
Exhibit No. Description Filing
- ----------- ----------- ------
<S> <C> <C>
99.1 Supplemental Information as 4
of September 30, 1998
</TABLE>
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: January 12, 1999
THE MILLS CORPORATION
By: /s/ Kenneth R. Parent
-----------------------
Kenneth R. Parent
Executive Vice President,
Chief Financial Officer, and
Treasurer (Principal Financial
and Accounting Officer)
<PAGE> 1
THE MILLS CORPORATION
SUPPLEMENTAL INFORMATION
TABLE OF CONTENTS
AS OF SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
INFORMATION PAGE
----------- ----
<S> <C>
Overview 5-6
Summary of Properties 7-8
Supplemental Financial Data 9
Property Operating Income 10-13
Occupancy Analysis 14
Lease Expiration Schedule 15-16
Rental Rate Analysis 17
Summary of Outstanding Consolidated Indebtedness 18
Summary of Outstanding Unconsolidated Indebtedness 19
Mills Gross Sales 20
Capital Expenditures 21-23
</TABLE>
<PAGE> 2
THE MILLS CORPORATION
OVERVIEW
THE COMPANY
The Mills Corporation (the "Company") is a fully integrated, self-managed real
estate investment trust ("REIT") .
The Company conducts all of its business through The Mills Limited Partnership
("the Operating Partnership"), in which it owns, as of September 30, 1998, a 1%
interest as the sole general partner and a 58.3% interest as a limited partner.
The Company, through the Operating Partnership, is engaged primarily in the
ownership, development, redevelopment, leasing, acquisition, expansion, and
management of super-regional, value and entertainment-oriented shopping centers
(the "Mills") and community shopping centers (the "Community Centers"). As of
September 30, 1998, the Operating Partnership owns or holds an interest in the
following operating properties:
<TABLE>
<CAPTION>
Mills Location
----- --------
<S> <C> <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)
Community Centers Location
----------------- --------
Butterfield Plaza Downers Grove, IL
Coopers Plaza Voorhees, NJ
Crosswinds Center St. Petersburg, FL
Fashion Place Columbia, SC
Germantown Commons Shopping Center Germantown, MD
Gwinnett Marketfair Duluth, GA
Liberty Plaza Philadelphia, PA
Montgomery Village Off-Price Center Gaithersburg, MD
Mount Prospect Plaza Mount Prospect, IL
West Falls Church Outlet Center Falls Church, VA
Western Hills Plaza Cincinnati, OH
</TABLE>
In addition to the operating properties, the Company is actively involved in the
pre-development or development of a number of new projects, including The Block
at Orange (Orange, California), Sawgrass Phase III Expansion (Sunrise, FL), Katy
Mills (Houston, TX), Concord Mills (Charlotte, NC), Opry Mills (Nashville, TN),
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 September 30,
1998 for the Company and Operating Partnership.
5
<PAGE> 3
THE MILLS CORPORATION
OVERVIEW
CAUTIONARY STATEMENT
Certain matters discussed in this form 8-K and the information incorporated by
reference herein contain "forward-looking statements" for purposes of Section
27A of the Securities Act of 1933, as amended (the "Securities Act") and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
relating to, without limitation, future economic performance, plans and
objectives of management for future operation and projections of revenue and
other financial items, demographic projections and federal income tax
considerations, which can be identified by the use of forward-looking
terminology such as "may", "will", "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 the Mills under development as of September 30, 1998:
<TABLE>
<CAPTION>
Approx. Approx.
Total Anchor Specialty
Approx. Store Store
Metropolitan Year Ownership GLA GLA GLA
Name/Location Area Serviced Opened Percentage (Sq. Ft.) (1) (sq. ft.) (1) (sq. ft.) (1)
------------- ------------- ------ ---------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mills
Potomac Mills...... Washington D.C./ 1985 100% 1,636,870 1,009,010 627,860
Woodbridge, VA Baltimore
Franklin Mills..... Philadelphia/ 1989 100% 1,720,867 1,123,476 597,391
Philadelphia, PA Wilmington
Sawgrass Mills..... Fort Lauderdale, FL/ 1990 100% 1,878,522 1,201,905 676,617
Sunrise, FL Miami/Palm Beach
Gurnee Mills...... Chicago/Milwaukee 1991 100% 1,653,978 1,020,676 633,302
Gurnee, IL
Ontario Mills...... Los Angeles 1996 50% 1,343,385 (4) 824,109 519,276
Ontario, CA
Grapevine Mills..... Dallas/Fort Worth 1997 37.5% 1,240,781 (5) 698,010 542,771
Grapevine, TX
Arizona Mills...... Phoenix 1997 36.8% 1,208,899 675,737 533,162
Tempe, AZ
----------- ------------ -----------
Mills Totals/Weighted Averages...................... 10,683,302 6,552,923 4,130,379
=========== ============ ===========
Community Centers (11 Centers) 2,220,348 1,378,956 841,392
=========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
12 Mos. Ended
Annualized No. of 9/30/98
Metropolitan Percent Base Anchor Specialty Store
Name/Location Area Serviced Leased (2) Rent (7) Stores (3) Sales PSF
------------- ------------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Mills
Potomac Mills...... Washington D.C./ 96% $ 20,849,541 17 $ 326
Woodbridge, VA Baltimore
Franklin Mills..... Philadelphia/ 96% 16,939,211 18 294
Philadelphia, PA Wilmington
Sawgrass Mills..... Fort Lauderdale, FL/ 97% 24,290,185 20 453
Sunrise, FL Miami/Palm Beach
Gurnee Mills...... Chicago/Milwaukee 95% 16,442,178 16 277
Gurnee, IL
Ontario Mills...... Los Angeles 99% 18,451,452 18 346
Ontario, CA
Grapevine Mills..... Dallas/Fort Worth 96% 20,683,833 16 N/A (6)
Grapevine, TX
Arizona Mills...... Phoenix 96% 18,864,242 15 N/A (6)
Tempe, AZ
-------------- ---------
Mills Totals/Weighted Averages........ 96% 136,520,642 120 $ 344
============== =========
Community Centers (11 Centers) 94% 18,587,510 28
============== =========
</TABLE>
(1) Includes 962,163 square feet of GLA owned by certain store tenants as
follows: Potomac Mills-80,000 square feet of GLA; Franklin Mills-208,602
square feet of GLA; Sawgrass Mills-281,774 square feet of GLA; Gurnee
Mills-250,806 square feet of GLA; Liberty Plaza-13,741 square feet of GLA;
West Falls Church- 2,240 square feet of GLA and On tario Mills-125,000
square feet of GLA.
(2) Percent Leased is defined as all space leased and for which rent is being
paid as of September 30, 1998, excluding tenants with leases having a term
of less than 1 year plus GLA owned by certain store tenants as described in
footnote (1).
(3) Anchor stores include all stores occupying more than 20,000 square feet.
(4) Ontario Mills can be expanded to contain approximately 1.7 million square
feet of GLA, including GLA owned by certain store tenants.
(5) Grapevine Mills can be expanded to contain approximately 1.5 million square
feet of GLA, including GLA owned by certain store tenants.
(6) 12 Mos. Ended 9/30/98 Specialty Store Sales PSF information is not
available for Grapevine Mills and Arizona Mills which commenced business
in October 1997 and November 1997, respectively.
(7) Annualized Base Rent is defined as the contractual minimum rent of tenants
comprising gross leaseable occupied area at 9/98 multiplied by 12.
7
<PAGE> 5
THE MILLS CORPORATION
SUMMARY OF PROPERTIES
MILLS UNDER DEVELOPMENT
<TABLE>
<CAPTION>
Actual/
Anticipated Anticipated Approx.
Metropolitan Construction Opening GLA
Name/Location Area Serviced Start Date (1) Date (1) (Sq. Ft.) (1,2)
---------------------- -------------------- -------------- ---------- -----------------
<S> <C> <C> <C> <C>
The Block at Orange Los Angeles/ 1997 1998 (6) 811,000
Orange, CA Orange County
Sawgrass Phase III Expansion Fort Lauderdale, FL/ 1997 1999 300,000
Sunrise, FL Miami/Palm Beach
Katy Mills Houston 1998 1999 1,400,000
Houston, TX
Concord Mills Charlotte 1998 1999 1,400,000
Concord, NC
Opry Mills Nashville 1998 2000 1,200,000
Nashville, TN
Vaughan Mills Toronto 1999 N/A (3) 1,400,000
Vaughan, Ontario
Meadowlands Mills New York City/ 1999 N/A (3) N/A (3)
Carlstadt, NJ Northern New Jersey
</TABLE>
<TABLE>
<CAPTION>
Estimated Anchor
Aggregate Store
Metropolitan Company Project Cost Tenant
Name/Location Area Serviced Ownership (millions) (1) Commitments
---------------------- -------------------- ----------- -------------- ------------
<S> <C> <C> <C> <C>
The Block at Orange Los Angeles/ 50.0% $ 194 11
Orange, CA Orange County
Sawgrass Phase III Expansion Fort Lauderdale, FL/ 50.0% $ 66 3
Sunrise, FL Miami/Palm Beach
Katy Mills Houston 75.0% $ 248 12
Houston, TX
Concord Mills Charlotte 50.0% $ 217 10
Concord, NC
Opry Mills Nashville 66.7% $ 222 5
Nashville, TN
Vaughan Mills Toronto N/A (3) $ 222 N/A (4)
Vaughan, Ontario
Meadowlands Mills New York City/ 66.7% N/A (3) N/A (5)
Carlstadt, NJ Northern New Jersey
</TABLE>
(1) Anticipated Construction Start Dates and Opening Dates and Approximate GLA
may be subject to adjustment as a result of factors inherent in the
development process, some of which may not be under the direct control of
the Company.
(2) Approximate GLA includes space that may be owned by certain anchor store
tenants.
(3) The ownership structure, budgets, start dates and/or opening dates for these
properties have not yet been determined.
(4) The Company's leasing efforts have not yet commenced for this project.
(5) Leasing activity has not yet commenced for this project, however, the
Company has received letters of interest from 17 anchor store tenants.
(6) The project opened on November 19, 1998.
8
<PAGE> 6
THE MILLS CORPORATION
SUPPLEMENTAL FINANCIAL DATA
(IN THOUSANDS, EXCEPTS PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
September 30 September 30
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
REVENUES:
Minimum rent $25,229 $24,377 $74,802 $71,395
Percentage rent 573 1,043 1,972 3,165
Recoveries from tenants 12,361 11,952 36,534 34,924
Other property revenue 1,972 2,287 4,950 4,919
Fee income 3,006 2,056 7,750 6,417
Interest income 542 531 2,330 2,166
------------- ------------- ------------- -------------
Total revenues 43,683 42,246 128,338 122,986
EXPENSES:
Recoverable from tenants 11,121 10,842 32,021 31,531
Other property operating 1,288 1,498 3,995 4,699
General and administrative 2,311 2,499 7,295 6,736
Interest expense 11,146 9,424 33,060 31,468
Depreciation and amortization 9,114 9,151 27,411 25,998
------------- ------------- ------------- -------------
Total expenses 34,980 33,414 103,782 100,432
Other income/(expense) (454) 181 (540) 384
Equity in earnings of unconsolidated joint ventures 657 421 3,488 1,422
------------- ------------- ------------- -------------
Income before extraordinary item and minority interest 8,906 9,434 27,504 24,360
Extraordinary loss 0 0 (422) (8,060)
------------- ------------- ------------- -------------
Income before minority interest 8,906 9,434 27,082 16,300
Minority interest (3,621) (3,820) (11,049) (6,999)
------------- ------------- ------------- -------------
Net income $5,285 $5,614 $16,033 $9,301
============= ============= ============= =============
Net income per share before extraordinary item $0.23 $0.24 $0.71 $0.65
============= ============= ============= =============
Net income per share (Basic) $0.23 $0.24 $0.70 $0.43
============= ============= ============= =============
Net income per share (Diluted) $0.23 $0.24 $0.69 $0.43
============= ============= ============= =============
FUNDS FROM OPERATIONS (*):
Income before extraordinary item
and minority interest $8,906 $9,434 $27,504 $24,360
Adjustments:
Add: Depreciation and amortization of real estate
assets 8,222 8,370 24,591 23,817
Add: Real estate depreciation and amortization
of unconsolidated joint ventures 3,126 930 8,015 2,576
Add: Extraordinary loss on debt extinguishment of
unconsolidated joint ventures - - - 397
------------- ------------- ------------- -------------
Funds from operations $20,254 $18,734 $60,110 $51,150
============= ============= ============= =============
BASIC:
Weighted average shares 23,039 22,881 22,963 21,054
Weighted average shares and units 38,884 38,836 38,840 37,245
DILUTED:
Weighted average shares 23,386 23,450 23,360 21,516
Weighted average shares and units 39,231 39,404 39,237 37,708
</TABLE>
- ----------------------------------------
(*) The Company generally considers Funds From Operations ("FFO") a widely used
and appropriate measure of performance for an equity REIT which provides a
relevant basis for comparison among REITs. FFO as defined by National
Association of Real Estate Investment Trusts (NAREIT) means income (loss)
before minority interest (determined in accordance with Generally Accepted
Accounting Principles (GAAP)), excluding gains (losses) from debt
restructuring and sales of property, plus real estate related depreciation
and amortization and after adjustments for unconsolidated partnerships and
joint ventures. FFO is presented to assist investors in analyzing the
performance of the Company. The Company's method of calculating FFO may be
different from methods used by other REITs and, accordingly, may not be
comparable to such other REITs. FFO (i) does not represent cash flow from
operations as defined by GAAP, (ii) is not indicative of cash available to
fund all cash flow needs and liquidity, including its ability to make
distributions, and (iii) should not be considered as an alternative to net
income (determined in accordance with GAAP) for purposes of evaluating the
Company's operating performance.
9
<PAGE> 7
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH THE PROPERTY OPERATING INCOME FOR EACH OF THE
MILLS, MAINSTREET (THE COMPANY'S PUSH CART PROGRAM) AND THE COMMUNITY CENTERS.
THE PURPOSE OF THIS TABLE IS TO PROVIDE DETAILS ABOUT CERTAIN LINE ITEMS WITHIN
THE SUPPLEMENTAL FINANCIAL DATA SHOWN ON PAGE 9 AND IS NOT INTENDED TO BE A
REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE NINE MONTHS ENDED SEPTEMBER 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 $ 15,702 $ 12,710 $ 19,357 $ 12,489 $ 1,070 $ 13,474 $ 74,802
Percentage rent (2) 139 171 1,003 246 194 219 1,972
Recoveries from tenants 6,679 8,553 10,414 6,813 37 4,038 36,534
Other revenue 625 619 2,295 926 398 87 4,950
------------------------------------------------------------------------------------------
Total rental revenues 23,145 22,053 33,069 20,474 1,699 17,818 118,258
PROPERTY OPERATING COSTS:
Recoverable from tenants 5,565 6,724 9,376 6,079 - 4,277 32,021
Other operating 550 804 309 828 1,101 403 3,995
------------------------------------------------------------------------------------------
Total property operating costs 6,115 7,528 9,685 6,907 1,101 4,680 36,016
------------------------------------------------------------------------------------------
PROPERTY OPERATING INCOME $ 17,030 $ 14,525 $ 23,384 $ 13,567 $ 598 $ 13,138 $ 82,242
==========================================================================================
<CAPTION>
UNCONSOLIDATED JOINT VENTURES
Ontario Grapevine Arizona Other Total
------- --------- ------- ----- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C>
Minimum rent $ 14,114 $ 15,385 $ 14,317 $ 384 $ 44,200
Percentage rent (2) 191 176 134 - 501
Recoveries from tenants 6,550 6,288 5,755 21 18,614
Other revenue 1,324 1,456 1,214 7 4,001
----------------------------------------------------------------
Total rental revenues 22,179 23,305 21,420 412 67,316
PROPERTY OPERATING COSTS:
Recoverable from tenants 6,266 5,910 5,128 68 17,372
Other operating 1,138 931 1,362 398 3,829
----------------------------------------------------------------
Total property operating costs 7,404 6,841 6,490 466 21,201
----------------------------------------------------------------
PROPERTY OPERATING INCOME $ 14,775 $ 16,464 $ 14,930 $ (54) $ 46,115
================================================================
Mills Share (1) $ 6,127 $ 5,411 $ 5,501 $ (27) $ 17,011
================================================================
</TABLE>
(1) Based on Mills share of distributable cash flow for the nine months ended
September 30, 1998, excluding management fees.
(2) The percentage rents for the nine months ended September 30, 1998, will not
be comparable with the prior year period due to the implementation in 1998
of EITF 98-9 (Emerging Issues Task Force) which does not allow the Company
to accrue percentage rents until the tenant's sales have reached the
breakpoints in the respective leases.
10
<PAGE> 8
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH THE PROPERTY OPERATING INCOME FOR EACH OF THE
MILLS, MAINSTREET (THE COMPANY'S PUSH CART PROGRAM) AND THE COMMUNITY CENTERS.
THE PURPOSE OF THIS TABLE IS TO PROVIDE DETAILS ABOUT CERTAIN LINE ITEMS WITHIN
THE SUPPLEMENTAL FINANCIAL DATA SHOWN ON PAGE 9 AND IS NOT INTENDED TO BE A
REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C> <C> <C>
Minimum rent $ 15,534 $ 11,952 $ 18,479 $ 11,440 $ 1,035 $ 12,955 $ 71,395
Percentage rent (2) 290 308 1,836 191 102 438 3,165
Recoveries from tenants 6,005 8,353 9,852 6,750 39 3,925 34,924
Other revenue 736 936 1,781 1,014 319 133 4,919
------------------------------------------------------------------------------------------
Total rental revenues 22,565 21,549 31,948 19,395 1,495 17,451 114,403
PROPERTY OPERATING COSTS:
Recoverable from tenants 5,133 7,120 8,983 6,132 - 4,163 31,531
Other operating 509 912 505 915 1,201 657 4,699
------------------------------------------------------------------------------------------
Total property operating costs 5,642 8,032 9,488 7,047 1,201 4,820 36,230
------------------------------------------------------------------------------------------
PROPERTY OPERATING INCOME $ 16,923 $ 13,517 $ 22,460 $ 12,348 $ 294 $ 12,631 $ 78,173
==========================================================================================
<CAPTION>
UNCONSOLIDATED JOINT VENTURES
Ontario Other Total
------- ----- -----
RENTAL REVENUES:
<S> <C> <C> <C>
Minimum rent $ 13,122 $ 231 $ 13,353
Percentage rent (2) 537 - 537
Recoveries from tenants 5,610 8 5,618
Other revenue 1,167 59 1,226
---------------------------------------
Total rental revenues 20,436 298 20,734
PROPERTY OPERATING COSTS:
Recoverable from tenants 5,662 150 5,812
Other operating 931 370 1,301
---------------------------------------
Total property operating costs 6,593 520 7,113
---------------------------------------
PROPERTY OPERATING INCOME $ 13,843 $ (222) $ 13,621
=======================================
Mills Share (1) $ 5,698 $ (129) $ 5,569
=======================================
</TABLE>
(1) Based on Mills share of distributable cash flow for the nine months ended
September 30, 1997, excluding management fees
(2) The percentage rents for the nine months ended September 30, 1997, will not
be comparable with the same period in 1998 due to the implementation in 1998
of EITF 98-9 (Emerging Issues Task Force) which does not allow the Company
to accrue percentage rents until the tenant's sales have reached the
breakpoints in the respective leases.
11
<PAGE> 9
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH THE PROPERTY OPERATING INCOME FOR EACH OF THE
MILLS, MAINSTREET (THE COMPANY'S PUSH CART PROGRAM) AND THE COMMUNITY CENTERS.
THE PURPOSE OF THIS TABLE IS TO PROVIDE DETAILS ABOUT CERTAIN LINE ITEMS WITHIN
THE SUPPLEMENTAL FINANCIAL DATA SHOWN ON PAGE 9 AND IS NOT INTENDED TO BE A
REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE THREE MONTHS ENDED SEPTEMBER 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 $ 5,212 $ 4,364 $ 6,465 $ 4,114 $ 401 $ 4,673 $ 25,229
Percentage rent (2) 15 13 382 52 92 19 573
Recoveries from tenants 2,231 2,891 3,445 2,342 17 1,435 12,361
Other revenue 284 189 994 319 175 11 1,972
------------------------------------------------------------------------------------------
Total rental revenues 7,742 7,457 11,286 6,827 685 6,138 40,135
PROPERTY OPERATING COSTS:
Recoverable from tenants 1,877 2,328 3,164 2,107 - 1,645 11,121
Other operating 176 277 93 265 354 123 1,288
------------------------------------------------------------------------------------------
Total property operating costs 2,053 2,605 3,257 2,372 354 1,768 12,409
------------------------------------------------------------------------------------------
PROPERTY OPERATING INCOME $ 5,689 $ 4,852 $ 8,029 $ 4,455 $ 331 $ 4,370 $ 27,726
==========================================================================================
<CAPTION>
UNCONSOLIDATED JOINT VENTURES
Ontario Grapevine Arizona Other Total
------- --------- ------- ----- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C>
Minimum rent $ 4,766 $ 5,354 $ 5,116 $ 117 $ 15,353
Percentage rent (2) (13) (2) (99) - (114)
Recoveries from tenants 2,255 2,038 1,921 7 6,221
Other revenue 475 548 391 19 1,433
----------------------------------------------------------------
Total rental revenues 7,483 7,938 7,329 143 22,893
PROPERTY OPERATING COSTS:
Recoverable from tenants 2,147 1,701 1,947 22 5,817
Other operating 286 296 405 93 1,080
----------------------------------------------------------------
Total property operating costs 2,433 1,997 2,352 115 7,654
----------------------------------------------------------------
PROPERTY OPERATING INCOME $ 5,050 $ 5,941 $ 4,977 $ 28 $ 15,996
================================================================
Mills Share (1) $ 2,052 $ 1,963 $ 1,834 $ 13 $ 5,862
================================================================
</TABLE>
(1) Based on Mills share of distributable cash flow for the three months ended
September 30, 1998, excluding management fees.
(2) The percentage rents for the three months ended September 30, 1998, will not
be comparable with the prior year period due to the implementation in 1998
of EITF 98-9 (Emerging Issues Task Force) which does not allow the Company
to accrue percentage rents until the tenant's sales have reached the
breakpoints in the respective leases.
12
<PAGE> 10
THE MILLS CORPORATION
PROPERTY OPERATING INCOME
(IN THOUSANDS)
(UNAUDITED)
THE FOLLOWING TABLE SETS FORTH THE PROPERTY OPERATING INCOME FOR EACH OF THE
MILLS, MAINSTREET (THE COMPANY'S PUSH CART PROGRAM) AND THE COMMUNITY CENTERS.
THE PURPOSE OF THIS TABLE IS TO PROVIDE DETAILS ABOUT CERTAIN LINE ITEMS WITHIN
THE SUPPLEMENTAL FINANCIAL DATA SHOWN ON PAGE 9 AND IS NOT INTENDED TO BE A
REPRESENTATION OF NET INCOME ACCORDING TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
Community
Potomac Franklin Sawgrass Gurnee Mainstreet Centers Total
------- -------- -------- ------ ---------- ------- -----
RENTAL REVENUES:
<S> <C> <C> <C> <C> <C> <C> <C>
Minimum rent $ 5,250 $ 4,138 $ 6,341 $ 3,907 $ 385 $ 4,356 $ 24,377
Percentage rent (2) 100 104 626 68 45 100 1,043
Recoveries from tenants 2,026 2,915 3,324 2,302 15 1,370 11,952
Other revenue 395 482 735 456 135 84 2,287
------------------------------------------------------------------------------------------
Total rental revenues 7,771 7,639 11,026 6,733 580 5,910 39,659
PROPERTY OPERATING COSTS:
Recoverable from tenants 1,707 2,451 3,030 2,104 - 1,550 10,842
Other operating 136 342 107 261 386 266 1,498
------------------------------------------------------------------------------------------
Total property operating costs 1,843 2,793 3,137 2,365 386 1,816 12,340
==========================================================================================
PROPERTY OPERATING INCOME $ 5,928 $ 4,846 $ 7,889 $ 4,368 $ 194 $ 4,094 $ 27,319
==========================================================================================
<CAPTION>
UNCONSOLIDATED JOINT VENTURES
Ontario Other Total
------- ----- -----
RENTAL REVENUES:
<S> <C> <C> <C>
Minimum rent $ 4,781 $ 86 $ 4,867
Percentage rent (2) 77 - 77
Recoveries from tenants 2,108 4 2,112
Other revenue 383 36 419
---------------------------------------
Total rental revenues 7,349 126 7,475
PROPERTY OPERATING COSTS:
Recoverable from tenants 2,071 112 2,183
Other operating 220 121 341
---------------------------------------
Total property operating costs 2,291 233 2,524
---------------------------------------
PROPERTY OPERATING INCOME $ 5,058 $ (107) $ 4,951
=======================================
Mills Share (1) $ 2,099 $ (65) $ 2,034
=======================================
</TABLE>
(1) Based on Mills share of distributable cash flow for the three months ended
September 30, 1997, excluding management fees
(2) The percentage rents for the three months ended September 30, 1997, will not
be comparable with the same period in 1998 due to the implementation in 1998
of EITF 98-9 (Emerging Issues Task Force) which does not allow the Company
to accrue percentage rents until the tenant's sales have reached the
breakpoints in the respective leases.
13
<PAGE> 11
THE MILLS CORPORATION
OCCUPANCY ANALYSIS
<TABLE>
<CAPTION>
GROSS LEASED & OCCUPIED AREA (S.F.) (1)
GLA Occupied (3)
Project Total GLA at 9/98 %
- ------- --------- ------- -
<S> <C> <C> <C>
Potomac Mills 1,636,870 1,571,800 96.02%
Franklin Mills 1,720,867 1,644,444 95.56%
Sawgrass Mills 1,878,522 1,819,674 96.87%
Gurnee Mills 1,653,978 1,570,301 94.94%
--------------------------------------------------------
Total Mills 6,890,237 6,606,219 95.88%
Butterfield 114,610 104,610 91.27%
Coopers Crossing 173,509 173,509 100.00%
Crosswinds 144,119 141,438 98.14%
Fashion Place 147,950 127,058 85.88%
Germantown 177,097 161,309 91.09%
Gwinnett 194,719 186,079 95.56%
Liberty Plaza 315,033 292,807 92.94%
Montgomery Village 117,391 116,079 98.88%
Mt. Prospect 298,600 289,252 96.87%
West Falls Church 87,824 85,433 97.28%
Western Hills 449,496 412,521 91.77%
--------------------------------------------------------
2,220,348 2,090,095 94.13%
--------------------------------------------------------
Total Wholly Owned 9,110,585 8,696,314 95.45%
========================================================
Joint Ventures:
Ontario Mills 1,343,385 1,325,549 98.67%
Grapevine Mills 1,240,781 1,193,787 96.21%
Arizona Mills 1,208,899 1,159,996 95.95%
--------------------------------------------------------
Total Joint Ventures 3,793,065 3,679,332 97.00%
========================================================
Total Wholly Owned
and Joint Venture 12,903,650 12,375,646 95.91%
========================================================
</TABLE>
<TABLE>
<CAPTION>
GROSS LEASED & OCCUPIED AREA, NET OF ANCHORS (S.F) (2)
Total Small GLA Occupied (3)
Project Shop GLA at 9/98 %
- ------- -------- ------- -
<S> <C> <C> <C>
Potomac Mills 627,860 595,320 94.82%
Franklin Mills 597,391 520,968 87.21%
Sawgrass Mills 676,617 665,921 98.42%
Gurnee Mills 633,302 549,625 86.79%
---------------------------------------------------------
Total Mills 2,535,170 2,331,834 91.98%
Butterfield 72,677 62,677 86.24%
Coopers Crossing 14,953 14,953 100.00%
Crosswinds 23,298 20,617 88.49%
Fashion Place 74,692 53,800 72.03%
Germantown 130,341 114,553 87.89%
Gwinnett 97,172 88,532 91.11%
Liberty Plaza 38,545 16,319 42.34%
Montgomery Village 80,986 79,674 98.38%
Mt. Prospect 126,005 116,657 92.58%
West Falls Church 47,743 45,352 94.99%
Western Hills 134,980 127,610 94.54%
---------------------------------------------------------
841,392 740,744 88.04%
---------------------------------------------------------
Total Wholly Owned 3,376,562 3,072,578 91.00%
=========================================================
Joint Ventures:
Ontario Mills 519,276 501,440 96.57%
Grapevine Mills 542,771 495,777 91.34%
Arizona Mills 533,162 484,259 90.83%
---------------------------------------------------------
Total Joint Ventures 1,595,209 1,481,476 92.87%
=========================================================
Total Wholly Owned
and Joint Venture 4,971,771 4,554,054 91.60%
=========================================================
</TABLE>
<TABLE>
<CAPTION>
TOTAL VACANT S.F.
Vacancies
Project Anchor Small Shop Total
- ------- ------ ---------- -----
<S> <C> <C> <C>
Potomac Mills 32,530 32,540 65,070
Franklin Mills 0 76,423 76,423
Sawgrass Mills 48,152 10,696 58,848
Gurnee Mills 0 83,677 83,677
--------------------------------------------------------
Total Mills 80,682 203,336 284,018
Butterfield 0 10,000 10,000
Coopers Crossing 0 0 0
Crosswinds 0 2,681 2,681
Fashion Place 0 20,892 20,892
Germantown 0 15,788 15,788
Gwinnett 0 8,640 8,640
Liberty Plaza 0 22,226 22,226
Montgomery Village 0 1,312 1,312
Mt. Prospect 0 9,348 9,348
West Falls Church 0 2,391 2,391
Western Hills 29,605 7,370 36,975
--------------------------------------------------------
29,605 100,648 130,253
--------------------------------------------------------
Total Wholly Owned 110,287 303,984 414,271
========================================================
Joint Ventures:
Ontario Mills 0 17,836 17,836
Grapevine Mills 0 46,994 46,994
Arizona Mills 0 48,903 48,903
--------------------------------------------------------
Total Joint Ventures 0 113,733 113,733
========================================================
Total Wholly Owned
and Joint Venture 110,287 417,717 528,004
========================================================
</TABLE>
(1) Includes 962,163 square feet of GLA owned by certain tenant stores 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 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 September 1, 1998, excluding tenants with leases that
have a term of less than 1 year (ii) GLA owned by certain store tenants.
<PAGE> 12
THE MILLS CORPORATION
LEASE EXPIRATION SCHEDULE
The following table shows lease expirations assuming that none of the tenants
exercise renewal options. Except as described in footnote (1), the minimum rent
is the monthly contractual minimum rent of the expiring leases as of September
30, 1998 multiplied by 12.
<TABLE>
<CAPTION>
No. of 1998 (1)
Leases Annualized
Expiring Sq Ft Min. Rent psf
-------- ----- --------- ----
<S> <C> <C> <C> <C>
Potomac Mills:
Anchors (2) - - $ - $ -
Majors (2) - - - -
Specialty 15 41,232 1,251,007 30.34
Food Court 2 1,567 85,208 54.38
-----------------------------------------------
17 42,799 $ 1,336,215 $ 31.22
Franklin Mills:
Anchors (2) - - $ - $ -
Majors (2) - - - -
Specialty 5 19,608 317,579 16.20
Food Court - - - -
-----------------------------------------------
5 19,608 $ 317,579 $ 16.20
Sawgrass Mills:
Anchors (2) - - $ - $ -
Majors (2) - - - -
Specialty 4 10,941 262,822 24.02
Food Court - - - -
-----------------------------------------------
4 10,941 $ 262,822 $ 24.02
Gurnee Mills:
Anchors (2) - - $ - $ -
Majors (2) - - - -
Specialty 3 11,194 135,970 12.15
Food Court - - - -
-----------------------------------------------
3 11,194 $ 135,970 $ 12.15
Total w/o Joint Ventures:
Anchors (2) - - $ - $ -
Majors (2) - - - -
Specialty 27 82,975 1,967,378 23.71
Food Court 2 1,567 85,208 54.38
===============================================
29 84,542 $ 2,052,586 $ 24.28
===============================================
</TABLE>
<TABLE>
<CAPTION>
No. of 1999
Leases Annualized
Expiring Sq Ft Min. Rent psf
-------- ----- --------- ----
<S> <C> <C> <C> <C>
Potomac Mills:
Anchors (2) - - $ - $ -
Majors (2) 1 42,212 316,590 7.50
Specialty 22 76,727 1,532,007 19.97
Food Court - - - -
----------------------------------------------------
23 118,939 $ 1,848,597 $ 15.54
Franklin Mills:
Anchors (2) 1 100,200 $ 547,725 $ 5.47
Majors (2) 1 40,232 370,134 9.20
Specialty 27 84,252 1,943,497 23.07
Food Court 7 5,602 306,600 54.73
----------------------------------------------------
36 230,286 $ 3,167,956 $ 13.76
Sawgrass Mills:
Anchors (2) - - $ - $ -
Majors (2) - - - -
Specialty 6 7,418 289,690 39.05
Food Court 2 1,206 80,500 66.75
----------------------------------------------------
8 8,624 $ 370,190 $ 42.93
Gurnee Mills:
Anchors (2) - - $ - $ -
Majors (2) - - - -
Specialty 15 62,417 1,144,222 18.33
Food Court - - - -
----------------------------------------------------
15 62,417 $ 1,144,222 $ 18.33
Total w/o Joint Ventures:
Anchors (2) 1 100,200 $ 547,725 $ 5.47
Majors (2) 2 82,444 686,724 8.33
Specialty 70 230,814 4,909,416 21.27
Food Court 9 6,808 387,100 56.86
====================================================
82 420,266 $ 6,530,965 $ 15.54
====================================================
</TABLE>
<TABLE>
<CAPTION>
No. of 2000
Leases Annualized
Expiring Sq Ft Min. Rent psf
-------- ----- --------- ----
<S> <C> <C> <C> <C>
Potomac Mills:
Anchors (2) - - $ - $ -
Majors (2) 1 41,321 309,908 7.50
Specialty 30 79,446 2,020,063 25.43
Food Court 3 2,331 154,992 66.49
------------------------------------------------------
34 123,098 $ 2,484,963 $ 20.19
Franklin Mills:
Anchors (2) 1 60,115 $ 390,747 $ 6.50
Majors (2) 1 32,637 297,256 9.11
Specialty 24 91,218 1,924,633 21.10
Food Court - - - -
------------------------------------------------------
26 183,970 $ 2,612,636 $ 14.20
Sawgrass Mills:
Anchors (2) 1 78,619 $ 255,512 $ 3.25
Majors (2) 2 67,851 752,366 11.09
Specialty 63 208,506 4,913,084 23.56
Food Court 21 17,595 989,719 56.25
------------------------------------------------------
87 372,571 $ 6,910,681 $ 18.55
Gurnee Mills:
Anchors (2) - - $ - $ -
Majors (2) - - - -
Specialty 19 57,696 1,062,877 18.42
Food Court 1 657 22,995 35.00
------------------------------------------------------
20 58,353 $ 1,085,872 $ 18.61
Total w/o Joint Ventures:
Anchors (2) 2 138,734 $ 646,259 $ 4.66
Majors (2) 4 141,809 1,359,530 9.59
Specialty 136 436,866 9,920,657 22.71
Food Court 25 20,583 1,167,706 56.73
======================================================
167 737,992 $13,094,152 $ 17.74
======================================================
</TABLE>
<TABLE>
<CAPTION>
No. of After 2000
Leases Annualized
Expiring Sq Ft Min. Rent psf
-------- ----- --------- ----
<S> <C> <C> <C> <C>
Potomac Mills:
Anchors (2) 5 530,633 $ 3,040,838 $ 5.73
Majors (2) 9 282,314 2,639,360 9.35
Specialty 111 387,730 9,104,661 23.48
Food Court 9 6,287 394,907 62.81
--------------------------------------------------------
134 1,206,964 $ 15,179,766 $ 12.58
Franklin Mills:
Anchors (2) 3 268,619 $ 1,838,124 $ 6.84
Majors (2) 8 259,691 2,416,637 9.31
Specialty 89 315,552 6,414,303 20.33
Food Court 7 4,736 171,976 36.31
--------------------------------------------------------
107 848,598 $ 10,841,040 $ 12.78
Sawgrass Mills:
Anchors (2) 7 553,861 $ 3,765,905 $ 6.80
Majors (2) 6 171,648 2,036,199 11.86
Specialty 122 411,483 10,592,905 25.74
Food Court 8 8,772 351,483 40.07
--------------------------------------------------------
143 1,145,764 $ 16,746,492 $ 1462
Gurnee Mills:
Anchors (2) 6 534,985 $ 2,792,255 $ 5.22
Majors (2) 7 234,885 2,309,194 9.83
Specialty 115 398,999 7,965,526 19.96
Food Court 27 18,662 1,009,139 54.07
--------------------------------------------------------
155 1,187,531 $ 14,076,114 $ 11.85
Total w/o Joint Ventures:
Anchors (2) 21 1,888,098 $ 11,437,122 $ 6.06
Majors (2) 30 948,538 9,401,390 9.91
Specialty 437 1,513,764 34,077,395 22.51
Food Court 51 38,457 1,927,505 50.12
========================================================
539 4,388,857 $ 56,843,412 $ 12.95
========================================================
</TABLE>
<TABLE>
<CAPTION>
No. of Total
Leases Annualized
Expiring Sq Ft Min. Rent psf
-------- ----- --------- ---
<S> <C> <C> <C> <C>
Potomac Mills:
Anchors (2) 5 530,633 $ 3,040,838 $ 5.73
Majors (2) 11 365,847 3,265,858 8.93
Specialty 178 585,135 13,907,738 23.77
Food Court 14 10,185 635,107 62.36
-----------------------------------------------------
208 1,491,800 $ 20,849,541 $ 13.98
Franklin Mills:
Anchors (2) 5 428,934 $ 2,776,596 $ 6.47
Majors (2) 10 332,560 3,084,027 9.27
Specialty 145 510,630 10,600,012 20.76
Food Court 14 10,338 478,576 46.29
-----------------------------------------------------
174 1,282,462 $ 16,939,211 $ 13.21
Sawgrass Mills:
Anchors (2) 8 632,480 $ 4,021,417 $ 6.36
Majors (2) 8 239,499 2,788,565 11.64
Specialty 195 638,348 16,058,501 25.16
Food Court 31 27,573 1,421,702 51.56
-----------------------------------------------------
242 1,537,900 $ 24,290,185 $ 15.79
Gurnee Mills:
Anchors (2) 6 534,985 $ 2,792,255 $ 5.22
Majors (2) 7 234,885 2,309,194 9.83
Specialty 152 530,306 10,308,595 19.44
Food Court 28 19,319 1,032,134 53.43
-----------------------------------------------------
193 1,319,495 $ 16,442,178 $ 12.46
Total w/o Joint Ventures:
Anchors (2) 24 2,127,032 $ 12,631,106 $ 5.94
Majors (2) 36 1,172,791 11,447,644 9.76
Specialty 670 2,264,419 50,874,846 22.47
Food Court 87 67,415 3,567,519 52.92
=====================================================
817 5,631,657 $ 78,521,115 $ 13.94
=====================================================
</TABLE>
(1) The 1998 amounts represent the total square footage and total annualized
minimum rent that will expire during the last three months of 1998.
(2) For purposes of this schedule, 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..
<PAGE> 13
THE MILLS CORPORATION
LEASE EXPIRATION SCHEDULE
The following table shows lease expirations assuming that none of the tenants
exercise renewal options. Except as described in footnote (1), the minimum rent
is the monthly contractual minimum rent of the expiring leases as of September
30, 1998 multiplied by 12.
<TABLE>
<CAPTION>
No. of 1998 (1) No. of 1999
Leases Annualized Leases Annualized
Expiring Sq Ft Min. Rent psf Expiring Sq Ft Min. Rent psf
-------- ----- --------- --- -------- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ontario Mills:
Anchors (2) - - $ - $ - - - $ - $ -
Majors (2) - - - - - - - -
Specialty 1 2,739 96,000 35.05 5 9,433 253,848 26.91
Food Court - - - - - - - -
--------------------------------------------- --------------------------------------------
1 2,739 $ 96,000 $ 35.05 5 9,433 $ 253,848 $ 26.91
Arizona Mills:
Anchors (2) - - $ - $ - - - $ - $ -
Majors (2) - - - - - - - -
Specialty - - - - - - - -
Food Court - - - - - - - -
--------------------------------------------- --------------------------------------------
- - $ - $ - - - $ - -
Grapevine Mills:
Anchors (2) - - $ - $ - - - $ - $ -
Majors (2) - - - - - - - -
Specialty 2 2,836 81,058 28.58 2 7,979 202,672 25.40
Food Court - - - - - - - -
--------------------------------------------- --------------------------------------------
2 2,836 $ 81,058 $ 28.58 2 7,979 $ 202,672 $ 25.40
Total with Joint Ventures:
Anchors (2) - - $ - $ - 1 100,200 $ 547,725 $ 5.47
Majors (2) - - - - 2 82,444 686,724 8.33
Specialty 30 88,550 2,144,436 24.22 77 248,226 5,365,936 21.62
Food Court 2 1,567 85,208 54.38 9 6,808 387,100 56.86
--------------------------------------------- --------------------------------------------
32 90,117 $ 2,229,644 $ 24.74 89 437,678 $ 6,987,485 $ 15.96
============================================= ============================================
Community Centers:
Anchors (2) 1 56,949 $194,300 $ 3.41 - - $ - $ -
Majors (2) - - - - - - - -
Specialty 9 20,534 266,552 12.98 27 76,534 1,107,010 14.46
Food Court - - - - - - - -
--------------------------------------------- --------------------------------------------
10 77,483 $460,852 $ 5.95 27 76,534 $ 1,107,010 $ 14.46
============================================= ============================================
</TABLE>
<TABLE>
<CAPTION>
No. of 2000 No. of After 2000
Leases Annualized Leases Annualized
Expiring Sq Ft Min. Rent psf Expiring Sq Ft Min. Rent psf
-------- ----- --------- --- -------- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ontario Mills:
Anchors (2) - - $ - $ - 4 286,023 $ 1,883,132 $ 6.58
Majors (2) - - - - 13 413,086 5,137,114 12.44
Specialty 6 13,267 332,266 25.04 132 447,676 10,154,927 22.68
Food Court - - - - 3 11,730 594,165 50.65
--------------------------------------------- ---------------------------------------------------
6 13,267 $ 332,266 $ 25.04 152 1,158,515 $ 17,769,338 $ 15.34
Arizona Mills:
Anchors (2) - - $ - $ - 5 382,513 $ 3,144,419 $ 8.22
Majors (2) - - - - 10 293,224 4,160,598 14.19
Specialty 9 26,473 698,472 26.38 124 443,862 10,028,251 22.59
Food Court - - - - 1 13,924 832,502 59.79
--------------------------------------------- ---------------------------------------------------
9 26,473 $ 698,472 $ 26.38 140 1,133,523 $ 18,165,770 $ 16.03
Grapevine Mills:
Anchors (2) - - $ - $ - 3 315,042 $ 3,638,512 $ 11.55
Majors (2) - - - - 13 382,968 5,243,894 13.69
Specialty 9 17,277 473,076 27.38 138 456,153 10,352,701 22.70
Food Court - - - - 1 11,532 691,920 60.00
--------------------------------------------- ---------------------------------------------------
9 17,277 $ 473,076 $ 27.38 155 1,165,695 $ 19,927,027 $ 17.09
Total with Joint Ventures:
Anchors (2) 2 138,734 $ 646,259 $ 4.66 33 2,871,676 $ 20,103,185 $ 7.00
Majors (2) 4 141,809 1,359,530 9.59 66 2,037,816 23,942,996 11.75
Specialty 160 493,883 11,424,471 23.13 831 2,861,455 64,613,274 22.58
Food Court 25 20,583 1,167,706 56.73 56 75,643 4,046,092 53.49
--------------------------------------------- ---------------------------------------------------
191 795,009 $ 14,597,966 $ 18.36 986 7,846,590 $ 112,705,547 $ 14.36
============================================= ===================================================
Community Centers:
Anchors (2) - - $ - $ - 8 650,811 $ 4,211,709 $ 6.47
Majors (2) 1 21,007 273,091 13.00 18 581,967 4,066,567 6.99
Specialty 25 105,323 1,146,687 10.89 137 560,989 7,321,594 13.05
Food Court - - - - - - - -
--------------------------------------------- ---------------------------------------------------
26 126,330 $ 1,419,778 $ 11.24 163 1,793,767 $ 15,599,870 $ 8.70
============================================= ===================================================
</TABLE>
<TABLE>
<CAPTION>
No. of Total
Leases Annualized
Expiring Sq Ft Min. Rent psf
-------- ----- ---------- ---
<S> <C> <C> <C> <C>
Ontario Mills:
Anchors (2) 4 286,023 $ 1,883,132 $ 6.58
Majors (2) 13 413,086 5,137,114 12.44
Specialty 144 473,115 10,837,041 22.91
Food Court 3 11,730 594,165 50.65
-------------------------------------------------
164 1,183,954 $ 18,451,452 $ 15.58
Arizona Mills:
Anchors (2) 5 382,513 $ 3,144,419 $ 8.22
Majors (2) 10 293,224 4,160,598 14.19
Specialty 133 470,335 10,726,723 22.81
Food Court 1 13,924 832,502 59.79
-------------------------------------------------
149 1,159,996 $ 18,864,242 $ 16.26
Grapevine Mills:
Anchors (2) 3 315,042 $ 3,638,512 $ 11.55
Majors (2) 13 382,968 5,243,894 13.69
Specialty 151 484,245 11,109,507 22.94
Food Court 1 11,532 691,920 60.00
-------------------------------------------------
168 1,193,787 $ 20,683,833 $ 17.33
Total with Joint Ventures:
Anchors (2) 36 3,110,610 $ 21,297,169 $ 6.85
Majors (2) 72 2,262,069 25,989,250 11.49
Specialty 1,098 3,692,114 83,548,117 22.63
Food Court 92 104,601 5,686,106 54.36
-------------------------------------------------
1,298 9,169,394 $ 136,520,642 $ 14.89
=================================================
Community Centers:
Anchors (2) 9 707,760 $ 4,406,009 $ 6.23
Majors (2) 19 602,974 4,339,658 7.20
Specialty 198 763,380 9,841,843 12.89
Food Court - - - -
-------------------------------------------------
226 2,074,114 $ 18,587,510 $ 8.96
=================================================
</TABLE>
(1) The 1998 amounts represent the total square footage and total annualized
minimum rent that will expire during the last three months of 1998.
(2) For purposes of this schedule, anchor tenants are defined as any tenant
whose GLA equals or exceeds 50,000 sq. ft. and Major tenants are defined
as any tenant whose GLA equals or exceeds 20,000 sq. ft. but is less than
50,000 sq. ft..
16
<PAGE> 14
THE MILLS CORPORATION
RENTAL RATES
The following table sets forth the average base rent per leased square foot of
store openings and closings for each property for the nine months ended
September 30, 1998.
<TABLE>
<CAPTION>
Anchor Stores
---------------------------------------------------------------------------------
Store Openings Store Closings Releasing
During Year During Year Spread (1)
-------------------------- ------------------------ -----------------------
Average Average
Base Rent Total Base Rent Total
Per Sq. Ft. Sq. Ft. Per Sq. Ft. Sq. Ft.
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills $ 14.00 27,068 $ 10.00 32,530 $ 4.00 40.00%
Franklin Mills - - - - - -
Gurnee Mills - - - - - -
Sawgrass Mills 15.00 28,152 15.00 28,152 - -
------------ ---------- ------------ ---------- --------- --------
Total Mills $ 14.51 55,220 $12.32 60,682 $ 2.19 17.78%
============ ========== ============ ========== ========= ========
Ontario Mills $ - - $ - - - -
Grapevine Mills - - - - - -
Arizona Mills - - - - - -
------------ ---------- ------------ ---------- --------- --------
Total Joint Ventures $ - - $ - - N/A -
============ ========== ============ ========== ========= ========
Community Centers $ 6.65 168,584 $ - - N/A N/A
============ ========== ============ ========== ========= ========
</TABLE>
<TABLE>
<CAPTION>
Specialty Stores
---------------------------------------------------------------------------------
Store Openings Store Closings Releasing
During Year During Year Spread (1)
------------------------- ------------------------- ------------------------
Average Average
Base Rent Total Base Rent Total
Per Sq. Ft. Sq. Ft. Per Sq. Ft. Sq. Ft.
------------ --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills $ 25.28 51,374 $ 28.39 45,410 $ (3.11) -10.95%
Franklin Mills 18.87 111,391 17.33 102,492 1.54 8.88%
Gurnee Mills 24.61 50,236 18.15 81,700 6.46 35.61%
Sawgrass Mills 30.90 31,443 26.81 35,445 4.09 15.27%
------------ --------- ------------ --------- ---------- ---------
Total Mills $ 22.94 244,444 $ 20.75 265,047 $ 2.19 10.55%
============ ========= ============ ========= ========== =========
Ontario Mills $ 26.57 30,573 $ 27.76 24,642 $ (1.19) -4.29%
Grapevine Mills 22.50 11,651 23.79 20,357 (1.29) -5.41%
Arizona Mills - - 28.11 10,679 N/A N/A
------------ --------- ------------ --------- ---------- ---------
Total Joint Ventures $ 25.45 42,224 $ 26.38 55,678 $ (0.93) -3.52%
============ ========= ============ ========= ========== =========
Community Centers $ 14.91 55,276 $ 16.20 26,927 $ (1.29) -7.96%
============ ========= ============ ========= ========== =========
</TABLE>
(1) The releasing spread is calculated as the difference between per square
foot openings and per square foot closings for the nine months ended
September 30, 1998. Openings and closings include renewals but exclude
exercised options. The Releasing Spreads above are based on activity for
the 9 months ended September 30, 1998.
(2) The average base rent per square foot for store openings excludes initial
lease up.
17
<PAGE> 15
THE MILLS CORPORATION
SUMMARY OF OUTSTANDING CONSOLIDATED INDEBTEDNESS
(DOLLARS IN THOUSANDS)
AS OF SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Principal
Balance Annual Interest Maturity
(000's) Term Rate Date
------- ---- ---- ----
<S> <C> <C> <C> <C>
Potomac Mills/Gurnee Mills:
Tranche A $206,816 Fixed 6.905% 12/17/26 (1)
Tranche B 27,000 Fixed 7.021% 12/17/26 (1)
Tranche C 15,000 Fixed 7.235% 12/17/26 (1)
Tranche D 30,000 Fixed 7.701% 12/17/26 (1)
Franklin Mills and Liberty Plaza 141,594 Fixed 7.667% 06/01/27 (3)
Sawgrass Mills:
Tranche A 115,000 Fixed 6.450% 01/18/01
Tranche B 10,000 Variable with cap 85 bp over Libor (6) 01/18/01
Tranche C 20,000 Variable with cap 230 bp over Libor (6) 01/18/01
Sawgrass Mills - Phase II 18,000 Fixed 6.970% 01/18/01
Western Hills 14,949 Fixed 7.675% 01/01/99 (9)
Nine Community Centers 67,510 Fixed 7.160% 01/31/01
Corporate Misc 844 Fixed 8.250% 10/31/00
Corporate Misc 2,400 Fixed 6.150% 07/15/99
Corporate Line of Credit 68,000 Variable 140 bp over Libor 04/01/00
Corporate Misc 15,000 Variable 125 bp over Libor 01/18/99 (17)
Sawgrass Residual 4,700 Variable 165 bp over Libor 01/18/01
----------
Total $756,813
==========
</TABLE>
<TABLE>
<CAPTION>
Annual Earliest day Recourse to
Interest at which debt Company or
(000's) can be repaid Op. Ptnrshp
------- ------------- -----------
<S> <C> <C> <C>
Potomac Mills/Gurnee Mills:
Tranche A $14,280 (2) 0%
Tranche B 1,896 (2) 0%
Tranche C 1,085 (2) 0%
Tranche D 2,310 (2) 0%
Franklin Mills and Liberty Plaza 10,856 (4) 0%
Sawgrass Mills:
Tranche A 7,418 (5) 0%
Tranche B 616 (7) (5) 0%
Tranche C 1,523 (7) (5) 0%
Sawgrass Mills - Phase II 1,255 (8) 0% (16)
Western Hills 1,147 (10) 0%
Nine Community Centers 4,834 (11) 0%
Corporate Misc 70 (13) 0%
Corporate Misc 148 (13) 0%
Corporate Line of Credit 4,565 (8), (12) 100%
Corporate Misc 984 (15) 100%
Sawgrass Residual 345 (14) 0%
----------
Total $53,332
==========
</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 to 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 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 5.3125%, which was the rate at September
30, 1998.
(8) Prepayable, in whole or in part, at any time without prepayment penalty.
(9) In December, 1998 the Company received an 3 month extension on this loan.
The maturity date is now April 1, 1999.
(10) 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.
(11) Prepayable, in whole or in part, at any time, upon 60 days prior notice to
the lender. The Company is required to pay a prepayment penalty, which
would equal to the greater of (i) 1% of the principal balance, or (ii) a
yield preservation payment.
(12) 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 9/30/98). The line of credit matures April 1, 2000 with a one-year
option to extend.
(13) Primarily corporate debt with maturities under one year. Prepayable, in
whole or in part, at any time without prepayment penalty.
(14) Prepayable, in whole or in part, at any time, upon 3 days prior notice to
lender without prepayment penalty.
(15) Prepayable, in whole or in part, at any time, upon 5 days prior notice to
lender without prepayment penalty.
(16) Principal is guaranteed by the Company if the Phase II project fails to
achieve a DSC ratio of 1.35 and a debt yield of 12.5%. As of
September 30, 1998, the guaranteed amount was 0%.
(17) The Company has two one-year options on this loan. In November, 1998 the
Company requested and received a one-year extension.
18
<PAGE> 16
THE MILLS CORPORATION
SUMMARY OF OUTSTANDING UNCONSOLIDATED INDEBTEDNESS
(Dollars in thousands)
AS OF SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Principal
Balance Total Annual Interest Maturity
(000's) Commitment Term Rate Date
------- ---------- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Arizona Mills $140,002 $145,000 Variable 130 bp over Libor (4),(5) 2/1/02
Grapevine Mills 155,000 155,000 Fixed 6.465% 9/1/32(9)
Ontario Mills 120,000 120,000 Fixed 7.277% (6) 2/6/02
City Block at Orange 51,629 136,000 Variable 165 bp over Libor (7) 1/22/02
Sawgrass Phase III 1,633 44,000 Variable 165 bp over Libor (8) 1/18/01
-------- --------
Total $468,264 $600,000 (15)
======== ========
</TABLE>
<TABLE>
<CAPTION>
Annual Earliest day Recourse to
Interest at which debt Company or
(000's) can be repaid Op. Ptnrshp
------- ------------- -----------
<S> <C> <C> <C>
Arizona Mills 9,258 (1) 9.2% (11)
Grapevine Mills 10,021 (2) 3.2% (12)
Ontario Mills 8,732 (3), (10) 0.0%
City Block at Orange 3,595 (4) (3) 100.0% (13)
Sawgrass Phase III 114 (4) (1) 100.0% (14)
-------
Total $31,720
=======
</TABLE>
(1) This indebtedness may be prepaid, in whole or in part, upon 5 business
days notice to the Administrative Agent.
(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.
(4) Calculated using 30-day LIBOR at 5.3125%, which was the rate at
September 30, 1998.
(5) The Applicable Margin may be reduced to 115 basis points if the Company
receives a "private letter bank loan rating equal to or better than "A-".
(6) Ontario Mills purchased a SWAP agreement which effectively fixes the
interest rate at a weighted average of 7.277%. The SWAP fixes the
interest rates in the following manner - 7.21% on the first $70 million
and 7.37% on the remaining $50 million. The SWAP agreement matures
simultaneously with the debt on 2/6/02. Upon early termination of the
SWAP agreement, Ontario Mills shall pay or receive commercially
reasonable breakage costs.
(7) Interest Rate shall be LIBOR plus (a) 165 basis points until the
following conditions have been satisfied: (i) the Construction Phase
Completion Date has occurred, (ii) the Grand Opening Date has occurred,
(iii) 33% of the Specialty Space has been and continues to be leased to
Specialty Tenants and 55% of the Anchor Space has been and continues to
be leased to Anchors, (iv) the DSC Ratio for any Calculation Period is
equal to or greater than 1.00 and (v) no Event of Default is continuing.
Once these conditions have been satisfied the Interest Rate shall be
LIBOR plus 150 bp. A further reduction to Libor plus 135 bp shall occur
once the DSC Ratio for any period is equal to or greater than 1.25.
Interest Rate will reduce to LIBOR plus 125 bp when the DSC Ratio for any
period is equal to or greater than 1.40. Interest Rate will reduce to
LIBOR plus 115 bp when the DSC Ratio for any period is equal to or
greater than 1.50.
(8) 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.
(9) 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.
(10) On November 2, 1998, the loan was repaid in full with the proceeds of a
new $145,000 non-recourse permanent loan. The new loan has a ten year
term with a fixed interest rate of 6.75%
(11) 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 September 30, 1998, the
Company's share of the Guaranteed Amount was reduced from 36.8% to 9.2%
according to the above formula.
(12) The Company and Simon Property (Texas) Group, L.P. have each guaranteed
$5,000 on this loan (3.2%). The guarantee terminates when the debt
service coverage for any twelve consecutive months is equal to or exceeds
1.5 to 1.0.
(13) Principal is guaranteed by the Company, reduced as follows: (i) as of
closing, the "Guaranteed Amount" was 100% of Loan Amount; (ii) upon
construction completion, grand opening and a Debt Service Coverage ratio
of 1.00 the Guaranteed Amount will reduce to 50%; (iii) upon achieving a
DSC Ratio of 1.25 the Guaranteed Amount will reduce to 25%; (iv) upon
achieving a DSC Ratio of 1.40 the Guaranteed Amount will reduce to 10%;
and (v) upon achieving a DSC Ratio of 1.50 the Guaranteed Amount will
reduce to 0%.
(14) 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%.
(15) On December 2, 1998, the Company and Simon Property Group, L.P. entered
into a construction loan commitment in the amount of $199,000 for Concord
Mills. This 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.
19
<PAGE> 17
THE MILLS CORPORATION
GROSS SALES
AS OF SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Twelve Months ended September 30, 1998 Twelve Months ended September 30, 1997
------------------------------------------------- -----------------------------------------------------
Sq Ft Sales psf Sq Ft Sales psf
----- ----- --- ----- ----- ---
<S> <C> <C> <C> <C> <C> <C>
Potomac Mills:
Anchor/Majors 899,424 $ 186,521,953 $ 207 963,272 $ 187,185,990 $ 194
Specialty 571,082 185,932,544 326 572,960 174,570,350 305
Temporary/Kiosk - 6,985,853 - - 2,730,714 -
-------------------------------------------------- -----------------------------------------------------
1,470,506 $ 379,440,350 $ 258 1,536,232 $ 364,487,054 $ 237
Franklin Mills:
Anchor/Majors 976,512 $ 163,371,002 $ 167 889,033 $ 164,123,740 $ 185
Specialty 503,938 147,931,968 294 492,636 138,991,640 282
Temporary/Kiosk - 4,279,323 - - 5,767,447 -
-------------------------------------------------- -----------------------------------------------------
1,480,450 $ 315,582,293 $ 213 1,381,669 $ 308,882,827 $ 224
Sawgrass Mills:
Anchor/Majors 1,171,647 $ 356,448,960 $ 304 1,172,066 $ 364,381,272 $ 311
Specialty 666,950 301,898,936 453 651,815 286,943,557 440
Temporary/Kiosk - 12,947,770 - - 12,306,568 -
-------------------------------------------------- -----------------------------------------------------
1,838,597 $ 671,295,666 $ 365 1,823,881 $ 663,631,397 $ 364
Gurnee Mills:
Anchor/Majors 811,690 $ 134,915,392 $ 166 658,445 $ 99,217,050 $ 151
Specialty 571,208 158,379,065 277 556,347 145,784,363 262
Temporary/Kiosk - 7,491,381 - - 8,132,465 -
-------------------------------------------------- -----------------------------------------------------
1,382,898 $ 300,785,838 $ 218 1,214,792 $ 253,133,878 $ 208
Ontario Mills:
Anchor/Majors 825,593 $ 136,743,331 $ 166 N/A (3) N/A (3) N/A (3)
Specialty 476,471 164,766,035 346 N/A (3) N/A (3) N/A (3)
Temporary/Kiosk - 7,553,640 - N/A (3) N/A (3) N/A (3)
-------------------------------------------------- -----------------------------------------------------
1,302,064 $ 309,063,006 $ 237 N/A (3) N/A (3) N/A (3)
Total Mills
Anchor/Majors 4,684,866 $ 978,000,638 $ 209 3,682,816 $ 814,908,052 $ 221
Specialty 2,789,649 958,908,548 344 2,273,758 746,289,910 328
Temporary Kiosk - 39,257,967 - - 28,937,194 -
-------------------------------------------------- -----------------------------------------------------
7,474,515 $ 1,976,167,153 $ 264 5,956,574 $ 1,590,135,156 $ 267
================================================== =====================================================
</TABLE>
<TABLE>
<CAPTION>
Twelve Months ended December 31, 1997
--------------------------------------------
Sq Ft Sales psf
----- ----- ---
<S> <C> <C> <C>
Potomac Mills:
Anchor/Majors 910,288 $ 184,834,466 $ 203
Specialty 566,004 179,387,582 317
Temporary/Kiosk - 4,490,966 -
--------------------------------------------
1,476,292 $ 368,713,014 $ 250
Franklin Mills:
Anchor/Majors 904,677 $ 163,692,900 $ 181
Specialty 487,463 142,341,207 292
Temporary/Kiosk - 6,388,496 -
--------------------------------------------
1,392,140 $ 312,422,603 $ 224
Sawgrass Mills:
Anchor/Majors 1,173,109 $ 365,821,871 $ 312
Specialty 655,233 295,180,646 450
Temporary/Kiosk - 13,962,865 -
--------------------------------------------
1,828,342 $ 674,965,382 $ 369
Gurnee Mills:
Anchor/Majors 681,640 $ 103,395,397 $ 152
Specialty 561,633 150,055,052 267
Temporary/Kiosk - 8,860,293 -
--------------------------------------------
1,243,273 $ 262,310,742 $ 211
Ontario Mills:
Anchor/Majors 768,629 $ 133,724,268 $ 174
Specialty 454,598 159,284,318 350
Temporary/Kiosk - 6,866,186 -
--------------------------------------------
1,223,227 $ 299,874,772 $ 245
Total Mills
Anchor/Majors 4,438,343 $ 951,468,902 $ 214
Specialty 2,724,931 926,248,805 340
Temporary Kiosk - 40,568,806 -
--------------------------------------------
7,163,274 $ 1,918,286,513 $ 268
============================================
</TABLE>
(1) Grapevine Mills and Arizona Mills are excluded from this analysis since
they did not open until October 1997 and November 1997, respectively and
do not have 12 months of sales data for comparison.
(2) Anchor/Major sales include sales from certain anchor tenants that own
their parcels.
(3) Sales data for Ontario Mills for the Twelve Months ended September 30,
1997 is not available as Ontario Mills did not open until November 1996.
20
<PAGE> 18
THE MILLS CORPORATION
CAPITAL EXPENDITURES
EXISTING MILLS AND EXISTING COMMUNITY CENTERS COMBINED (9)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1998 1997 1996
------------------ ---- ----
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 604,126 $ 435,742 $ 328,974
Per Square Foot (2) 0.05 0.05 0.04
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 2,589,439 $ 5,143,206 $ 4,228,743
Per Square Foot Improved (4) 6.99 11.90 12.71
Per Square Foot (2) 0.22 0.62 0.52
TOTAL RECURRING COSTS
Costs $ 3,193,565 $ 5,579,948 $ 4,557,717
Per Square Foot (2) 0.27 0.67 0.56
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 5,538,054 (7) $ 41,571,485 (7) $ 8,079,220
Per Square Foot Improved (5) 26.62 76.69 44.93
Per Square Foot (2) 0.46 5.03 0.99
WORK IN PROCESS (6)
Cummulative Costs $ 10,239,280 $ 4,703,992 -
Cummulative Per Square Foot Improved (8) 45.63 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.
21
<PAGE> 19
THE MILLS CORPORATION
CAPITAL EXPENDITURES
EXISTING MILLS (9)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1998 1997 1996
------------------ ---- ----
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 502,106 $ 388,003 $ 246,522
Per Square Foot (2) 0.05 0.06 0.04
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 1,649,731 $ 4,518,073 $ 3,549,312 (4)
Per Square Foot Improved (4) 8.27 13.35 12.94
Per Square Foot (2) 0.17 0.75 0.60
TOTAL RECURRING COSTS
Costs $ 2,151,837 $ 4,906,076 $ 3,795,834
Per Square Foot (2) 0.22 0.81 0.64
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 5,027,032 (7) $ 41,010,815 (7) $ 7,746,906
Per Square Foot Improved (5) 36.93 78.37 50.00
Per Square Foot (2) 0.52 6.77 1.30
WORK IN PROCESS (6)
Cummulative Costs $ 9,056,062 $ 3,989,739 -
Cummulative Per Square Foot Improved (8) 51.82 31.27 -
</TABLE>
(1) Recurring non-tenant capital expenditures include expenditures that are
not tenant related nor recoverable from tenants.
(2) Includes annual costs divided by total GLA (excluding space owned by
certain anchor store tenants) of the Properties.
(3) Tenant Improvements/Leasing costs include tenant specific costs including
tenant improvements, tenant allowances and capitalized internal leasing
costs.
(4) Calculated as Recurring Tenant Improvements/Leasing Costs divided by GLA
of all Recurring Store Openings (including spaces requiring no
expenditures).
(5) Calculated as Non-Recurring Tenant Improvements/Leasing Costs divided by
GLA of all Non-Recurring Store Openings.
(6) Work in process that will be shown as Recurring or Non-Recurring when the
work is completed.
(7) Includes expansion costs at Franklin Mills and Gurnee Mills and
non-recurring remerchandising costs. Excludes costs relating to Sawgrass
Phase III expansion.
(8) Calculated as Work In Process divided by GLA of all space with work in
process.
(9) Includes Ontario Mills, Grapevine Mills, and Arizona Mills costs and
square footages for second generation tenants.
22
<PAGE> 20
THE MILLS CORPORATION
CAPITAL EXPENDITURES
COMMUNITY CENTERS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1998 1997 1996
------------------ ---- ----
<S> <C> <C> <C>
RECURRING NON-TENANT CAPITAL EXPENDITURES (1)
Costs $ 102,020 $ 47,739 $ 82,452
Per Square Foot (2) 0.05 0.02 0.04
RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 939,708 $ 625,133 $ 679,431
Per Square Foot Improved (4) 5.50 6.68 15.06
Per Square Foot (1) 0.43 0.28 0.31
TOTAL RECURRING COSTS
Costs $ 1,041,728 $ 672,872 $ 761,883
Per Square Foot (2) 0.47 0.31 0.35
NON RECURRING TENANT IMPROVEMENTS/LEASING COSTS (3)
Costs $ 511,023 $ 560,670 $ 332,314
Per Square Foot Improved (5) 7.10 13.73 13.35
Per Square Foot (2) 0.23 0.25 0.15
WORK IN PROCESS (6)
Cummulative Costs $ 1,183,218 $ 714,253 -
Cummulative Per Square Foot Improved (7) 23.84 3.66 -
</TABLE>
(1) Recurring non-tenant capital expenditures include expenditures that are
not tenant related nor recoverable from tenants.
(2) Includes annual costs divided by total GLA (excluding space owned by
certain tenants) of the Community Centers.
(3) Tenant Improvements/Leasing costs include tenant specific costs including
tenant improvements, tenant allowances and capitalized internal leasing
costs.
(4) Calculated as Recurring Tenant Improvements/Leasing Costs divided by GLA
of all Recurring Store Openings (including spaces requiring no
expenditures).
(5) Calculated as Non-Recurring Tenant Improvements/Leasing Costs divided by
GLA of all Non-Recurring Store Openings.
(6) Work in process that will be shown as Recurring or Non-Recurring when the
work is completed.
(7) Calculated as Work In Process divided by GLA of all space with work in
process.
23
