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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): Commission File Number:
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October 3, 2000 1 - 12994
THE MILLS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware 52-1802283
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1300 Wilson Boulevard, Suite 400, Arlington, Virginia 22209
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(Address of principal executive offices - zip code)
(703)526-5000
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(Registrant's telephone number, including area code)
(former name or former address, if changed since last report)
Not Applicable
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THE MILLS CORPORATION
FORM 8-K
INDEX
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
As reported in the report Form 8-K filed with the Securities and
Exchange Commission on August 18, 2000, affiliates of the Mills Corporation
("the Company") completed a transaction whereby the Company disposed of its
interests in Gwinnett Marketfair in Duluth, Georgia; Mount Prospect Plaza in
Mount Prospect Illinois; Western Hills Plaza in Cinncinati, Ohio; West Falls
Church in Falls Church, Virginia; Butterfield Plaza in Downers Grove, Illinois;
Coopers Plaza in Voorhees, New Jersey; Crosswinds Center in St. Petersburg,
Florida; Fashion Place in Columbia, South Carolina; Germantown Commons in
Germantown, Maryland; and Montgomery Village in Gaithersburg, Maryland
(collectively the "Disposed Properties") for an aggregate sales price of $142.0
million. The Disposed Properties were sold by the Company to Kejack, Inc., an
unrelated third party. The Company netted $25.5 million in proceeds and the
buyer assumed $111.0 million of existing debt. As anticipated in the Form 10-Q
filed with the Securities and Exchange Commission on August 14, 2000, the
Company invested approximately $9.0 million of the net proceeds from the sale of
the Disposed Properties into a low risk portfolio of single tenant A-rated
credit net leases. The investment was completed in two transactions. On
September 22, 2000, the Company acquired 25 net lease properties and on October
3, 2000, the Company acquired an additional 21 net lease properties
(collectively the "Acquired Properties"). The aggregate purchase price for the
Acquired Properties was $114.0 million. The aggregate sales price was determined
through arms-length negotiations. The Acquired Properties were sold to the
Company by Wolverine Equity Company 99J Limited Partnership (25 net lease
properties) and various investor corporations which were the beneficial owners
of various business trusts (21 net lease properties). The sellers were unrelated
third parties. The properties are all subject to single tenant net leases
operating as CVS. The leases are triple net leases that contain indemnification
for liabilities customarily associated with possession of the site (including,
without limitation, certain specified environmental liabilities). The tenants'
obligation under the leases are guaranteed by CVS Corporation, a Delaware
corporation. The Company assumed $105.2 million of existing debt and paid $8.8
million in cash from the net proceeds of the the Company's sale of the Disposed
Properties.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following unaudited, pro forma financial information and exhibits
are filed as part of this report:
A. Unaudited proforma financial information required pursuant to Article 11
of Regulation S-X:
(1) Pro Forma Consolidated Balance Sheet--
June 30, 2000
Pro Forma Consolidated Statement of Operations--
Year ended December 31, 1999
Pro Forma Consolidated Statement of Operations--
Six months ended June 30, 2000
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The unaudited pro forma consolidated balance sheet as of June 30, 2000
is based on the unaudited historical financial statements of the Disposed
Properties and the unaudited historical financial statements of the Acquired
Properties and the Company after giving effect to the acquistion and
dispositions as described in Item 2 as if the purchase and sale have been
consumated as of June 30, 2000.
The unaudited pro forma consolidated statement of operations for the
year ended December 31, 1999 is based, in part, on the unaudited historical
statements of income before extraordinary items of the Acquired Properties and
the Disposed Properties after giving effect to the acquisition and dispositions
as described in Item 2 as if the purchase and sale had been consumated on
January 1, 1999.
The unaudited pro forma consolidated statement of operations for the six
months ended June 30, 2000 is based, in part, on the unaudited historical
statements of income before extraordinary items of the Acquired Properties and
the Disposed Properties after giving effect to the acquisition and dispositions
as described in Item 2 as if the purchase and sale had been consumated on
January 1, 2000.
The unaudited pro forma financial statements have been prepared by the
Company based upon the statements of income before extraordinary items of the
Acquired Properties and the Disposed Properties. These unaudited pro forma
financial statements may not be indicative of the results that actually would
have occurred if the transactions had been in effect on the dates indicated or
which may be obtained in the future. The unaudited pro forma financial
statements should be read in conjunction with the the financial statements of
the Company including its Annual Report on Form 10-K for the year ended December
31, 1999 and the unaudited financial statements of the Company on Form 10-Q for
the six months ended June 30, 2000.
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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: October 18, 2000 THE MILLS CORPORATION
By: /s/ Kenneth R. Parent
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Kenneth R. Parent
Executive Vice President, Finance
and Chief Financial Officer
(Principal Financial and Accounting Officer)
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THE MILLS CORPORATION
PRO-FORMA CONSOLIDATED BALANCE SHEET
(Unaudited)
(IN THOUSANDS)
JUNE 30, 2000
<TABLE>
<CAPTION>
THE MILLS DISPOSED ACQUIRED PRO-FORMA
CORPORATION PROPERTIES PROPERTIES CONSOLIDATED
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<S> <C> <C> <C> <C>
ASSETS
Income producing property:
Land and land improvements $ 171,127 $ (33,612) $ 32,938 $ 170,453
Building and improvements 736,718 (110,752) 81,054 707,020
Furniture, fixtures and equipment 42,595 (67) 42,528
Less: accumulated depreciation and amortization (252,900) 42,884 (210,016)
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Total income producing property 697,540 (101,547) 113,992 709,985
Land held for sale for investment and/or sale 9,879 9,879
Real estate development in progress 49,113 (99) 49,014
Investment in unconsolidated joint ventures 221,479 221,479
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Total real estate and development assets 978,011 (101,646) 113,992 990,357
Cash and cash equivalents 1,471 25,895 (9,189) 18,177
Restricted cash 14,276 (1,667) 12,609
Accounts receivable, net 30,726 (15,486) 15,240
Notes receivable 8,659 (20) 8,639
Deferred costs, net 49,527 (9,224) 366 40,669
Other assets 5,886 (49) 5,837
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TOTAL ASSETS $1,088,556 $(102,197) $105,169 $1,091,528
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LIABILITES AND STOCKHOLDERS' EQUITY
Mortgages, notes and loans payable $ 944,540 $(111,197) $105,169 $ 938,512
Accounts payable and other liabilities 66,579 (3,141) 63,438
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Total liabilities 1,011,119 (114,338) 105,169 1,001,950
Minority interests 31,269 4,903 (A) 36,172
STOCKHOLDERS' EQUITY
Common stock $.01 par value, authorized 100,000,000
shares, issued and outstanding 23,368,589 and
23,192,041 shares in 2000 and 1999, respectively 232 232
Additional paid-in capital 443,994 443,994
Accumulated deficit (394,332) 7,238 (A) (387,094)
Unamortized restricted stock award (3,726) (3,726)
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Total stockholders' equity 46,168 7,238 - 53,406
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,088,556 $(102,197) $105,169 $1,091,528
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</TABLE>
(A) Reflects gain on sale of which $4.9 million has been allocated to minority
interests
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THE MILLS CORPORATION
PRO-FORMA CONSOLIDATED STATEMENT OF INCOME
BEFORE EXTRAORDINARY ITEMS
(Unaudited)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
THE MILLS DISPOSED ACQUIRED PRO-FORMA
CORPORATION PROPERTIES PROPERTIES CONSOLIDATED
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<S> <C> <C> <C> <C>
REVENUES:
Minimum rent $ 104,407 $(15,800) $10,064 $ 98,671
Percentage rent 3,677 (91) 3,586
Recoveries from tenants 51,680 (4,980) 46,700
Other property revenue 8,778 (460) 8,318
Management fee income 4,891 4,891
Other fee income 8,647 8,647
Interest income 2,605 2,605
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184,685 (21,331) 10,064 173,418
EXPENSES:
Recoverable from tenants 44,464 (5,965) 38,499
Other operating 6,184 (799) 5,385
General and administrative 12,416 12,416
Interest expense 46,808 (8,105) 8,141 46,844
Depreciation and amortization 36,669 (4,544) 2,026 (A) 34,151
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146,541 (19,413) 10,167 137,295
Other income/(expense) (1,828) (1,828)
Equity in earnings of unconsolidated joint ventures 12,287 12,287
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Income/(loss) before extraordinary items and minority interests 48,603 (1,918) (103) 46,582
Minority interests (19,740) 779 42 (18,919)
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Income/(loss) before extraordinary items and after minority interests $ 28,863 $ (1,139) $ (61) $ 27,663
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PER SHARE INFORMATION:
Income/(loss) before extraordinary items - basic $ 1.25 $ (0.05) $ - $ 1.20
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Income/(loss) before extraordinary items - diluted $ 1.24 $ (0.05) $ - $ 1.19
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</TABLE>
(A) Based on useful lives of 40 years.
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THE MILLS CORPORATION
PRO-FORMA CONSOLIDATED STATEMENT OF INCOME
BEFORE EXTRAORDINARY ITEMS
(Unaudited)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
THE MILLS DISPOSED ACQUIRED PRO-FORMA
CORPORATION PROPERTIES PROPERTIES CONSOLIDATED
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<S> <C> <C> <C> <C>
REVENUES:
Minimum rent $51,922 $ (7,809) $5,032 $ 49,145
Percentage rent 637 (93) 544
Recoveries from tenants 26,528 (2,540) 23,988
Other property revenue 4,500 (438) 4,062
Management fee income 3,614 3,614
Other fee income 4,912 4,912
Interest income 1,312 1,312
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93,425 (10,880) 5,032 87,577
EXPENSES:
Recoverable from tenants 22,648 (2,465) 20,183
Other operating 2,359 (426) 1,933
General and administrative 7,135 7,135
Interest expense 27,263 (4,111) 4,071 27,223
Depreciation and amortization 19,233 (2,229) 1,013 (A) 18,017
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78,638 (9,231) 5,084 74,491
Other income/(expense) (700) (700)
Equity in earnings of unconsolidated joint ventures 4,189 4,189
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Income/(loss) before extraordinary items and minority interests 18,276 (1,649) (52) 16,576
Minority interests (7,395) 667 21 (6,707)
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Income/(loss) before extraordinary items and after minority interests $10,881 $ (982) $ (31) $ 9,869
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PER SHARE INFORMATION:
Income/(loss) before extraordinary items - basic $ 0.47 $ (0.04) $ - $ 0.43
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Income/(loss) before extraordinary items - diluted $ 0.47 $ (0.04) $ - $ 0.43
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</TABLE>
(A) Based on useful lives of 40 years.
