<PAGE> 1
Inland Real Estate Corporation
Sticker Supplement
Supplement No. 4 to the Company's Prospectus discloses information
regarding a recently completed acquisition of property, updates certain
information in the sections of the Prospectus headed "Risk Factors", "Estimated
Use of Proceeds of Offering", "Real Property Investments", "Plan of
Distribution" and discloses an increase in Distributions. Unless otherwise
defined, capitalized terms used herein shall have the same meaning as in the
Prospectus.
On October 18, 1996, the Company completed the acquisition of an
80,650 square foot Neighborhood Retail Center known as Six Corners Plaza
located at 3920 North Cicero Avenue, Chicago, Illinois for approximately $6.0
million. The center was purchased from an unaffiliated third party.
The Company commenced the "best efforts" Offering on July 24, 1996,
and as of October 22, 1996, the Company had accepted subscriptions for
1,394,244 shares ($12,617,913 net of Selling Commissions, the Marketing
Contribution and the Due Diligence Expense Allowance Fee). Inland Securities
Corporation, an Affiliate of the Advisor, serves as dealer manager of the
Offering and is entitled to receive selling commissions and certain other
amounts. As of September 30, 1996, Inland Securities Corporation was entitled
to receive commissions, the Marketing Contribution and the Due Diligence
Expense Allowance Fee totalling $905,456. An Affiliate of the Advisor is also
entitled to receive Property Management Fees for management and leasing
services.
<PAGE> 2
SUPPLEMENT NO. 4
DATED OCTOBER 25, 1996
TO THE PROSPECTUS DATED JULY 24, 1996
OF INLAND REAL ESTATE CORPORATION
This Supplement No. 4 is provided for the purpose of supplementing the
Prospectus dated July 24, 1996 of Inland Real Estate Corporation (the
"Company"), Supplement No. 1 to the Prospectus dated August 5, 1996
("Supplement No. 1"), Supplement No. 2 to the Prospectus dated August 19, 1996
("Supplement No. 2") and Supplement No. 3 to the Prospectus dated September 23,
1996 ("Supplement No. 3") (collectively "Supplements") and must be read in
conjunction therewith. Unless otherwise defined, capitalized terms used herein
shall have the same meaning as in the Prospectus or in the Supplements.
RISK FACTORS/ESTIMATED USE OF PROCEEDS OF OFFERING
Investors are advised that the Offering is not conditioned upon the
Company raising a minimum amount of proceeds. Therefore, the Company may not
raise proceeds sufficient to apply to any use other than payment of
organization and offering expenses associated with the Offering. Up to 12.61%
of the amount invested by any purchaser will be used by the Company to fund
various expenses associated with the Offering and a working capital reserve.
As a result, the Company estimates that only 87.39% of Gross Offering Proceeds
will be used to acquire properties if the Maximum Offering is sold. In
addition, although the Company anticipates that the total Public Offering
Expenses will approximately total 11.11% of the Gross Offering Proceeds,
investors are advised that these expenses may total up to 15% of Public
Offering Expenses.
INVESTMENT OBJECTIVES AND POLICIES
DISTRIBUTIONS
The Company's Board has approved an increase in Distributions,
beginning with the fourth quarter 1996, from the current level of $0.80 per
Share to $0.83 per Share.
REAL PROPERTY INVESTMENTS
SIX CORNERS PLAZA, CHICAGO, ILLINOIS
On October 18, 1996, the Company acquired a Neighborhood Retail Center
located at 3920 North Cicero Avenue in Chicago, Illinois known as Six Corners
Plaza ("Six Corners") from MBL Life Assurance Corporation, an unaffiliated
third party, for approximately $6.0 million. The purchase price was funded
using cash and cash equivalents. The purchase price was approximately $74 per
square foot, which the Company concluded was fair and reasonable and within the
range of values indicated in an appraisal received by the Company and presented
to the Company's board of directors.
Six Corners was built in 1966 and consists of a two-story building
aggregating 80,650 rentable square feet. As of October 1, 1996, Six Corners
was 96% leased. Tenants leasing more than 10% of the total square footage are
Bally's Chicago Health & Tennis Club ("Bally's"), which leases 45,803 square
feet, or approximately 57% of the rentable square feet, and Illinois Masonic,
which leases 15,338 square feet, or approximately 19% of the rentable square
feet. Bally's is a fitness and exercise center, and Illinois Masonic is a
medical center.
1
<PAGE> 3
In evaluating Six Corners as a potential acquisition, the Company
considered a variety of factors including location, demographics, tenant mix,
price per square foot, existing rental rates compared to market rates, and the
occupancy of the center. The Company believes that the center is located
within a vibrant economic area. According to a March 1996 study conducted by
Mid-America Real Estate Corporation which was based on 1990 census updates and
projections, the population within a three-mile radius of Six Corners is
412,159, with an estimated average household income in excess of $45,400 per
year, higher than the national average. Although 76% of the rentable square
feet at Six Corners is leased to two tenants, the Company's management believes
the superior demographics of the area surrounding the center, including high
population density, relatively high income and high vehicular traffic volume
near the center, meet the site evaluation criteria of many retailers.
Therefore, the Company's management believes that retenanting of any space
which is vacated in the future should be accomplished relatively quickly and at
rental rates comparable to those currently paid by the tenants at the facility.
The Company did not consider any other factors materially relevant to the
decision to acquire the property.
The Company does not anticipate making any significant repairs and
improvements to Six Corners over the next few years. A substantial portion of
any such cost would be paid by the tenants.
<TABLE>
<CAPTION>
Occupancy Rate
Year Ending as of December 31 Effective Annual Rental
December 31, of Each Year Per Square Foot
------------ -------------------- ---------------
<S> <C> <C>
1995 96% $12.06
</TABLE>
Information for prior years is not available to the Company.
The lease with Bally's requires Bally's to pay base rent equal to
$10.68 per square foot per annum payable monthly until July 31, 2010. The
lease also grants Bally's two options to renew the lease for separate five year
terms. If the first option is exercised, Bally's will be required to pay a
base rent of $12.67 per square foot per annum payable monthly from August 1,
2010. Thereafter, the price will increase 3% per year throughout both option
periods.
For federal income tax purposes, the Company's depreciable basis in
Six Corners will be approximately $4,590,000. Depreciation expense, for tax
purposes, will be computed using the straight-line method. Buildings and
improvements are depreciated based upon estimated useful lives of 40 years.
Real estate taxes payable in 1996 for the tax year ended 1995 (the most recent
tax year for which information is available) were $217,643. The real estate
taxes payable were calculated by multiplying Six Corners' assessed value by an
equalizer of 2.1243 and a tax rate of 9.345%.
At October 1, 1996, a total of 77,550 square feet were leased to nine
tenants at Six Corners. The following tables set forth certain information
with respect to the amount of and expiration of leases at this Neighborhood
Retail Center.
2
<PAGE> 4
<TABLE>
<CAPTION>
Square Foot Renewal Current Percentage Rent per
Lessee Leased Lease Ends Options Annual Rent Rent Square Foot
------ ------ ---------- ------- ----------- ---- -----------
<S> <C> <C> <C> <C> <C> <C>
Bally's Chicago Health 45,803 7/2010 2/5 year $489,176 None $10.68
Club
Illinois Masonic (1) 13,988 3/1999 None $251,784 None $18.00
Illinois Masonic
Optometry Space (1) 1,350 3/1999 None $24,300 None $18.00
One Hour Photo 1,001 2/1997 None $17,017 None $17.00
Weight Watchers 2,844 8/1998 1/5 year $46,926 None $16.50
Payless Shoe Store 2,538 9/2002 None $44,451 None $17.55
Elegante Salon 1,725 10/2000 None $24,150 None $14.00
Video Update 6,975 9/2000 None $69,750 None $10.00
Supercuts 1,326 1/2005 None $21,852 None $16.48
Vacant 3,100
</TABLE>
(1) Both spaces are leased to Illinois Masonic.
<TABLE>
<CAPTION>
Percent of
Average Total Percent of
Base Rent Building Annual
Approx. GLA Annual Per Square GLA Base Rent
of Expiring Base Rent Foot Represented Represented
Number of Leases of Total Under by by
Year Ending Leases (square Expiring Annual Expiring Expiring Expiring
December 31, Expiring feet) Leases Base Rent (1) Leases Leases Leases
------------ -------- ----- ------ ------------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
1996 - - - $ 989,496 - - -
1997 1 1,001 $17,017 990,566 $17.00 1.24 1.72%
1998 1 2,844 48,348 1,009,065 17.00 3.53 4.79%
1999 2 15,338 276,084 974,420 18.00 19.02 28.33%
2000 2 8,700 93,900 713,322 10.79 10.79 13.16%
2001 - - - 632,975 - - -
2002 1 2,538 47,080 648,856 18.55 3.15 7.26%
2003 - - - 614,465 - - -
2004 - - - 629,470 - - -
2005 1 1,326 27,619 644,127 20.83 1.64 4.29%
</TABLE>
(1) No assumptions were made regarding the releasing of expired leases. It is
the opinion of the Company's management that the space will be released at
market rates.
The Company received an appraisal prepared by an independent appraiser
who is a member in good standing of the American Institute of Real Estate
Appraisers which reported a fair market value for the Six Corners property, as
of September 30, 1996, of $6.2 million. Appraisals are estimates of value and
should not, however, be relied on as a measure of true worth or realizable
value.
3
<PAGE> 5
PLAN OF DISTRIBUTION
The Company commenced the "best efforts" Offering on July 24, 1996, and
as of October 22, 1996, the Company had accepted subscriptions for 1,394,244
shares ($12,617,913 net of Selling Commissions, the Marketing Contribution and
the Due Diligence Expense Allowance Fee).
Inland Securities Corporation, an Affiliate of the Advisor, serves as
dealer manager of the Offering and is entitled to receive selling commissions
and certain other amounts. As of September 30, 1996, Inland Securities
Corporation was entitled to receive commissions, the Marketing Contribution and
the Due Diligence Expense Allowance Fee totalling $905,456. An Affiliate of
the Advisor is also entitled to receive Property Management Fees for management
and leasing services. The Company incurred and paid Property Management Fees
of $139,597 for the nine months ended September 30, 1996 and $46,791 for the
year ended December 31, 1995. The Advisor may also receive an annual Advisor
Asset Management Fee of not more than 1% of the Average Invested Assets, paid
quarterly. As of September 30, 1996, the Company had incurred Advisor Asset
Management Fees of $242,341, all of which remained unpaid on such date. As of
December 31, 1995, the Company had not incurred or paid any such fees.
Investors are advised that for sales made to individuals residing in the
State of Minnesota, warrants will be issued only to Inland Securities
Corporation. No one else may receive warrants as commissions for sales. This
provision does not apply to sales outside of Minnesota.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Pro Forma Balance Sheet (unaudited) at December 31, 1995 . . . . . . . . . . . . . . . . . . . F-1
Notes to Pro Forma Balance Sheet (unaudited) at December 31, 1995 . . . . . . . . . . . . . . . F-3
Pro Forma Statement of Operations (unaudited) of the Company
for the year ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6
Notes to Pro Forma Statement of Operations (unaudited)
for the year ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8
Pro Forma Balance Sheet (unaudited) at June 30, 1996 . . . . . . . . . . . . . . . . . . . . . F-18
Notes to Pro Forma Balance Sheet (unaudited) at June 30, 1996 . . . . . . . . . . . . . . . . . F-20
Pro Forma Statement of Operations (unaudited) of the Company
for the three months ended June 30, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . F-22
Notes to Pro Forma Statement of Operations (unaudited)
for the three months ended June 30, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . F-24
</TABLE>
4
<PAGE> 6
Inland Real Estate Corporation
Pro Forma Balance Sheet
December 31, 1995
(unaudited)
The following unaudited Pro Forma Balance Sheet of the Company is presented to
effect the acquisitions of Mundelein Plaza, the Regency Point Shopping Center,
Prospect Heights Plaza, Montgomery-Sears Shopping Center, the Zany Brainy
store, Salem Square, Hawthorn Village Commons and Six Corners as though these
transactions occurred December 31, 1995. This unaudited Pro Forma Balance
Sheet should be read in conjunction with the December 31, 1995 Financial
Statements and the notes thereto as filed on Form 10-K.
This unaudited Pro Forma Balance Sheet is not necessarily indicative of what
the actual financial position would have been at December 31, 1995, nor does it
purport to represent the future financial position of the Company. Unless
otherwise defined, capitalized terms used herein shall have the same meaning as
in the Prospectus.
F-1
<PAGE> 7
Inland Real Estate Corporation
Pro Forma Balance Sheet
December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
December 31,
December 31, 1995
1995 Pro Forma Pro Forma
Historical(A) Adjustments(B) Balance Sheet
<S> <C> <C> <C>
Assets
Net investment in
properties.................. $ 17,342,538 40,021,080 57,363,618
Cash and cash equivalents..... 738,931 - 738,931
Restricted cash............... 150,000 - 150,000
Accounts and rents
receivable.................. 333,823 698,277 1,032,100
Other assets.................. 185,585 39,550 225,135
------------- ------------ ------------
Total assets.................. $ 18,750,877 40,758,907 59,509,784
============= ============ ============
Liabilities and Stockholders' Equity
Accounts payable and accrued
expenses.................... $ 288,037 7,500 295,537
Accrued real estate taxes..... 374,180 884,821 1,259,001
Distributions payable (C)..... 129,532 - 129,532
Security deposits............. 54,483 67,763 122,246
Mortgage payable.............. 750,727 8,428,200 9,178,927
Notes payable to Affiliate.... 360,000 - 360,000
Other liabilities............. 178,852 - 178,852
------------- ------------ ------------
Total liabilities............. 2,135,811 9,388,284 11,524,095
------------- ------------ ------------
Common Stock.................. 19,996 36,478 56,474
Additional paid in capital
(net of Offering costs)..... 16,835,183 31,334,145 48,169,328
Accumulated distributions in
excess of net income........ (240,113) - (240,113)
------------- ------------ ------------
Total Stockholders' equity.... 16,615,066 31,370,623 47,985,689
------------- ------------ ------------
Total liabilities and
Stockholders' equity........ $ 18,750,877 40,758,907 59,509,784
============= ============ ============
</TABLE>
See accompanying notes to pro forma balance sheet.
F-2
<PAGE> 8
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
December 31, 1995
(unaudited)
(A) The December 31, 1995 Historical column represents the historical balance
sheet as presented in the December 31, 1995 10-K as filed with the SEC.
(B) The following pro forma adjustment relates to the acquisition of the
subject properties as though they were acquired on December 31, 1995. The
terms are described in the notes that follow.
<TABLE>
<CAPTION>
Pro Forma Adjustments
-------------------------------------------------------------
Mundelein Regency Prospect Montgomery- Zany
Plaza Point Heights Sears Brainy
--------- ---------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Assets
- ------
Net investment in
properties............. $ 5,658,230 5,700,000 2,165,000 3,419,000 2,455,000
Accounts and rent
receivable............. 84,375 16,867 38,771 27,842 -
Other assets............. - - - - -
------------ ------------ ----------- ------------ -----------
Total assets............. $ 5,742,605 5,716,867 2,203,771 3,446,842 2,455,000
============ ============ ============ ============ ===========
Liabilities and Stockholders' Equity
- ------------------------------------
Accounts payable and
accrued expenses....... $ 7,500 - - - -
Accrued real estate taxes 89,010 16,867 63,517 32,655 -
Security deposits........ 15,000 28,621 8,600 - -
Mortgage payable......... - 4,473,200 - - -
------------ ------------ ----------- ------------ -----------
Total liabilities........ 111,510 4,518,688 72,117 32,655 -
------------ ------------ ----------- ------------ -----------
Common Stock(D).......... 6,548 1,393 2,479 3,970 2,855
Additional paid in capital
(net of Offering
costs)(D).............. 5,624,547 1,196,786 2,129,175 3,410,217 2,452,145
------------ ------------ ----------- ------------ -----------
Total Stockholders'
equity................. 5,631,095 1,198,179 2,131,654 3,414,187 2,455,000
------------ ------------ ----------- ------------ -----------
Total liabilities and
Stockholders' equity... $ 5,742,605 5,716,867 2,203,771 3,446,842 2,455,000
============ ============ ============ ============ ===========
</TABLE>
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------------------------------------------
Hawthorn Total
Salem Village Six Pro Forma
Square Commons Corners Adjustment
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Assets
- ------
Net investment in
properties............. 6,173,850 8,450,000 6,000,000 40,021,080
Accounts and rent
receivable............. 270,729 194,400 65,293 698,277
Other assets............. - 39,550 - 39,550
------------ ----------- ----------- -----------
Total assets............. 6,444,579 8,683,950 6,065,293 40,758,907
============ =========== =========== ============
Liabilities and Stockholders' Equity
- ------------------------------------
Accounts payable and
accrued expenses....... - - - 7,500
Accrued real estate taxes 270,729 194,400 217,643 884,821
Security deposits........ - - 15,542 67,763
Mortgage payable......... - 3,955,000 - 8,428,200
------------ ----------- ----------- -----------
Total liabilities........ 270,729 4,149,400 233,185 9,388,284
------------ ----------- ----------- -----------
Common Stock(D).......... 7,179 5,273 6,781 36,478
Additional paid in capital
(net of Offering
costs)(D).............. 6,166,671 4,529,277 5,825,327 31,334,145
------------ ----------- ----------- -----------
Total Stockholders'
equity................. 6,173,850 4,534,550 5,832,108 31,370,623
------------ ----------- ----------- -----------
Total liabilities and
Stockholders' equity... 6,444,579 8,683,950 6,065,293 40,758,907
============ =========== =========== ============
</TABLE>
F-3
<PAGE> 9
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
December 31, 1995
(unaudited)
Acquisition of Mundelein Plaza, Mundelein, Illinois
On March 29, 1996, the Company acquired the Mundelein Plaza property
located in Mundelein, Illinois ("Mundelein Plaza") from an unaffiliated
third party for a purchase price of $5,658,230, including closing costs of
$8,230, on an all cash basis, funded from cash and cash equivalents.
Acquisition of Regency Point Shopping Center, Lockport, Illinois
On April 5, 1996, the Company completed the acquisition of the Regency
Point Shopping Center located in Lockport, Illinois ("Regency Point"), from
an unaffiliated third party for a purchase price of $5,700,000. As part of
the acquisition, the Company will assume the existing first mortgage loan
of $4,473,200 along with a related interest rate swap agreement, with the
balance funded with cash and cash equivalents.
The first mortgage loan has a floating interest rate of 180 basis points
over the 30-day LIBOR rate, which rate is adjusted monthly. The interest
rate swap agreement, in conjunction with the first mortgage, provides for
Bank One, Chicago, to receive from or pay to the Company the difference
between 6.11% and the 30-day LIBOR rate, so that the first mortgage loan
has an effective rate of 7.91% per annum. The first mortgage loan matures
in August 2000. The related interest rate swap agreement was terminated on
April 18, 1996 resulting in $48,419 proceeds to the Company. No pro forma
adjustment has been made as a result of this termination.
Acquisition of Prospect Heights Plaza, Prospect Heights, Illinois
On June 17, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $2,165,000 on an all cash basis,
funded from cash and cash equivalents.
Acquisition of Montgomery-Sears, Montgomery, Illinois
On June 17, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $3,419,000 on an all cash basis,
funded from cash and cash equivalents.
Acquisition of Zany Brainy, Wheaton, Illinois
On July 1, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $2,455,000 on an all cash basis,
funded from cash and cash equivalents.
F-4
<PAGE> 10
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
December 31, 1995
(unaudited)
Acquisition of Salem Square, Countryside, Illinois
On August 2, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $6,173,850, on an all cash basis,
funded from cash and cash equivalents.
Acquisition of Hawthorn Village Commons, Vernon Hills, Illinois
On August 15, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $8,450,000.
The Company funded the purchase using: (i) the proceeds of a
short-term loan maturing August 23, 1996 in the amount of $2.9 million
from Inland Mortgage Investment Corporation ("IMIC"), an Affiliate of the
Company (the "Short-Term Loan"), and (ii) cash and cash equivalents.
The Company did not pay any fees in connection with the Short-Term
Loan, which bears interest at a rate of eight percent per annum. A
majority of the Company's board, including a majority of the Independent
Directors has approved the terms and conditions of the Short-Term Loan.
The Company repaid the Short-Term Loan using the proceeds of a
loan (the "Mortgage Loan") in the amount of $3,955,000 from an
unaffiliated lender. The Company paid a 1% origination fee to the
lender of the Mortgage Loan. The Mortgage Loan has a term of five
years and, prior to the maturity date, requires payments of interest
only, at an annual rate of 7.85%.
Acquisition of Six Corners, Chicago, Illinois
On October 18, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of $6,000,000, on an all
cash basis, funded from cash and cash equivalents.
(C) No pro forma assumptions have been made for the additional payment of
distributions resulting from the additional proceeds raised.
(D) Additional Offering Proceeds of $36,478,000, net of additional
Offering costs of $5,107,377, are reflected as received as of
December 31, 1995, prior to the purchase of the properties.
Offering costs consist principally of registration costs, printing
and selling costs, including commissions.
F-5
<PAGE> 11
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the year ended December 31, 1995
(unaudited)
The following unaudited Pro Forma Statement of Operations of the Company is
presented to effect the acquisitions of the Walgreens/Decatur property, Eagle
Crest Shopping Center, Montgomery-Goodyear property, Nantucket Square Shopping
Center, Mundelein Plaza, Regency Point Shopping Center, Prospect Heights Plaza,
Montgomery-Sears Shopping Center, Salem Square, Hawthorn Village Commons and
Six Corners as of January 1, 1995. Hartford/Naperville Plaza, Antioch Plaza
and the Zany Brainy store were constructed in 1995 and acquired shortly after
construction was completed and as such, the unaudited Pro Forma Statement of
Operations of the Company is presented to effect these acquisitions as of
August 17, 1995, September 1, 1995 and November 22, 1995, respectively, the
date occupancy commenced at these properties. This unaudited Pro Forma
Statement of Operations should be read in conjunction with the December 31,
1995 Financial Statements and the notes thereto as filed on Form 10-K.
This unaudited Pro Forma Statement of Operations is not necessarily indicative
of what the actual results of operations would have been for the year ended
December 31, 1995, nor does it purport to represent the future results of
operations of the Company. Unless otherwise defined, capitalized terms used
herein shall have the same meaning as in the Prospectus.
F-6
<PAGE> 12
Inland Real Estate Corporation
Pro Forma Statement of Operations
for the year ended December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Pro Forma Adjustments
1995 1995 1996
Historical Acquisitions Acquisitions 1995
(A) (B) (C) Pro Forma
<S> <C> <C> <C> <C>
Rental
income.......... $ 869,485 585,614 4,073,892 5,528,991
Additional
rental income... 228,024 162,536 1,232,019 1,622,579
Interest
income (D)...... 82,913 - - 82,913
----------- ----------- ----------- -----------
Total income.... 1,180,422 748,150 5,305,911 7,234,483
----------- ----------- ----------- -----------
Professional
services and
general and
administrative 23,132 - - 23,132
Property operating
expenses........ 326,721 275,218 1,927,980 2,529,919
Interest expense.. 164,161 429,997 662,368 1,256,526
Depreciation (E).. 169,894 111,767 922,722 1,204,383
----------- ----------- ----------- -----------
Total expenses.... 683,908 816,982 3,513,070 5,013,960
----------- ----------- ----------- -----------
Net income(loss) $ 496,514 (68,832) 1,792,841 2,220,523
=========== =========== =========== ===========
Weighted average
common stock shares
outstanding (F). 943,156 4,583,456
=========== ===========
Net income per weighted
average common stock
outstanding (F). $ .53 .48
=========== ===========
</TABLE>
See accompanying notes to pro forma statement of operations.
F-7
<PAGE> 13
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
For the year ended December 31, 1995
(unaudited)
(A) The December 31, 1995 Historical column represents the historical statement
of operations of the Company for the year ended December 31, 1995, as filed
with the SEC on Form 10-K.
(B) Total pro forma adjustments for the year ended December 31, 1995 are as
though the acquisitions were acquired the earlier of January 1, 1995 or
date that operations commenced.
<TABLE>
<CAPTION>
Pro Forma Adjustments
-----------------------------------------------------------------------------------------
Hartford Total
Montgomery- Naperville Nantucket Antioch 1995
Walgreens Eagle Crest Goodyear Plaza Square Plaza Pro Forma
---------- ----------- ----------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Rental
income.......... $ 10,651 95,232 101,359 15,077 340,545 22,750 585,614
Additional
Rental income... - 2,218 19,203 662 140,453 - 162,536
---------- ---------- ----------- --------- --------- -------- ---------
Total income.... 10,651 97,450 120,562 15,739 480,998 22,750 748,150
---------- ---------- ----------- --------- --------- -------- ---------
Property operating
expenses........ 533 17,376 47,758 3,436 205,903 212 275,218
Interest expense.. 4,840 77,170 46,325 13,625 267,137 20,900 429,997
Depreciation (E).. 3,141 16,324 20,682 8,867 57,357 5,396 111,767
---------- ---------- ----------- --------- --------- -------- ---------
Total expenses.... 8,514 110,870 114,765 25,928 530,397 26,508 816,982
---------- ---------- ----------- --------- --------- -------- ---------
Net income(loss) $ 2,137 (13,420) 5,797 (10,189) (49,399) (3,758) (68,832)
=========== =========== ============ =========== ============ ============ ============
</TABLE>
F-8
<PAGE> 14
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Walgreens/Decatur, Decatur, Illinois
In conjunction with the acquisition, the Company assumed a portion of the
first mortgage loan with a balance of $775,000. This mortgage has an
interest rate of 7.655%, amortizes over a 25-year period and matures May
31, 2004. The Company is responsible for monthly payments of principal
and interest of $5,689. The pro forma adjustment for interest expense for
the period prior to acquisition was estimated using the described loan
terms.
Acquisition of Eagle Crest Shopping Center, Naperville, Illinois
As part of the acquisition, the Company assumed a portion of the first
mortgage loan with a balance of $3,534,000, as well as entering into a
loan agreement with Inland Property Sales, Inc. ("IPS"), an Affiliate of
the Advisor, for the balance of the purchase price for $1,212,427. The
first mortgage bears interest at 9.5% per annum and the loan to IPS bears
interest at 10.5%. The pro forma adjustment for interest expense for the
period prior to acquisition was estimated using the described loan terms.
Acquisition of Montgomery-Goodyear, Montgomery, Illinois
As part of the acquisition, the Company entered into a loan agreement with
Inland Mortgage Investment Corporation ("IMIC"), an affiliate of the
Advisor, for $600,000 which bears interest of 10.9% per annum. The pro
forma adjustment for interest expense for the period prior to acquisition
was estimated using the described loan terms.
Acquisition of Hartford/Naperville Plaza, Naperville, Illinois
In conjunction with the acquisition, the Company entered into a loan
agreement with IMIC for $600,000 which bears interest of 10.9% per annum.
The pro forma adjustment for interest expense was estimated using the
described loan terms.
Acquisition of Nantucket Square Shopping Center, Schaumburg, Illinois
As part of the acquisition, the Company entered into a loan agreement with
IMIC for $3,550,000 which bears interest of 10.5% per annum. The pro
forma adjustment for interest expense for the period prior to acquisition
was estimated using the described loan terms.
F-9
<PAGE> 15
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Antioch Plaza, Antioch, Illinois
This pro forma adjustment reflects the purchase of the Antioch Plaza
property as if the Company had purchased the property as of September 1,
1995, the date the first tenant occupied this newly constructed property.
The pro forma adjustment for operations for the period September 1, 1995
to December 28, 1995 (date of acquisition) was estimated using applicable
lease information. Blockbuster Video was the only tenant occupying the
property during that period. No pro forma adjustment was made for real
estate tax expense and the related recovery income since the property was
vacant land for most of 1995 and the amount would be difficult to estimate
and have an immaterial effect.
As part of the acquisition, the Company entered into a loan agreement with
Inland Real Estate Investment Corporation, an affiliate of the Advisor,
for $660,000 which bears interest of 9.5% per annum. The pro forma
adjustment for interest expense was estimated using the described loan
terms.
F-10
<PAGE> 16
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
(C) Total pro forma adjustments for 1996 Acquisitions as though they were
acquired the earlier of January 1, 1995 or date that operations
commenced.
<TABLE>
<CAPTION>
Pro Forma Adjustments
-------------------------------------------------
Mundelein Regency Prospect Montgomery-
Plaza Point Heights Sears
---------- ------- -------- -----------
<S> <C> <C> <C> <C>
Rental
income.......... $ 639,124 541,085 164,152 327,610
Additional
Rental income... 66,669 63,294 116,175 76,182
----------- ----------- ----------- -----------
Total income.... 705,793 604,379 280,327 403,792
----------- ----------- ----------- -----------
Property operating
expenses........ 141,482 71,615 180,819 102,067
Interest expense.. - 351,900 - -
Depreciation (E).. 128,233 162,500 46,900 83,200
----------- ----------- ----------- -----------
Total expenses.... 269,715 586,015 227,719 185,267
----------- ----------- ----------- -----------
Net income...... $ 436,078 18,364 52,608 218,525
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Pro Forma Adjustments
----------------------------------------------------------------
Hawthorn Total
Zany Salem Village Six 1995
Brainy Square Commons Corners Pro Forma
--------- --------- --------- ------- ---------
<S> <C> <C> <C> <C> <C>
Rental
income.......... 28,643 717,522 970,313 685,443 4,073,892
Additional
Rental income... 5,030 387,179 353,145 164,345 1,232,019
--------- --------- --------- -------- ---------
Total income.... 33,673 1,104,701 1,323,458 849,788 5,305,911
--------- --------- --------- -------- ---------
Property operating
expenses........ 5,502 435,021 407,404 584,070 1,927,980
Interest expense.. - - 310,468 - 662,368
Depreciation (E).. 4,422 150,000 194,467 153,000 922,722
--------- --------- --------- -------- ---------
Total expenses.... 9,924 585,021 912,339 737,070 3,513,070
--------- --------- --------- -------- ---------
Net income...... 23,749 519,680 411,119 112,718 1,792,841
========= ========== =========== =========== ==========
</TABLE>
F-11
<PAGE> 17
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Mundelein Plaza, Mundelein, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Mundelein Plaza
*As Pro Forma
Reported Adjustments Total
<S> <C> <C> <C>
Rental income.................... $ 639,124 - 639,124
Additional rental income......... 66,669 - 66,669
----------- ----------- ----------
Total income..................... 705,793 - 705,793
----------- ----------- ----------
Property operating expenses...... 141,482 - 141,482
Interest expense................. - - -
Depreciation (E)................. - 128,233 128,233
Total expenses................... 141,482 128,233 269,715
----------- ----------- ----------
Net income....................... $ 564,311 (128,233) 436,078
=========== =========== ==========
</TABLE>
Acquisition of Regency Point, Lockport, Illinois
As part of the acquisition, the Company will assume the existing first
mortgage loan of $4,473,200, along with a related interest rate swap
agreement.
The first mortgage loan has a floating interest rate of 180 basis points
over the 30-day LIBOR rate, which rate is adjusted monthly. The interest
rate swap agreement, in conjunction with the first mortgage, provides for
Bank One, Chicago, to receive from or pay to the Company the difference
between 6.11% and the 30-day LIBOR rate, so that the first mortgage loan
has an effective rate of 7.91% per annum. The pro forma adjustment for
interest expense for 1995 was estimated using the described loan terms.
The related interest rate swap agreement was terminated on April 18, 1996
resulting in $48,419 proceeds to the Company. The pro forma adjustment
does not give effect to the termination of this agreement.
F-12
<PAGE> 18
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Regency Point
*As Pro Forma
Reported Adjustments Total
<S> <C> <C> <C>
Rental income.................... $ 541,085 - 541,085
Additional rental income......... 63,294 - 63,294
----------- ----------- ----------
Total income..................... 604,379 - 604,379
----------- ----------- ----------
Property operating expenses...... 71,615 - 71,615
Interest expense................. - 351,900 351,900
Depreciation (E)................. - 162,500 162,500
----------- ----------- ----------
Total expenses................... 71,615 514,400 586,015
----------- ----------- ----------
Net income....................... $ 532,764 (514,400) 18,364
=========== =========== ==========
</TABLE>
Acquisition of Prospect Heights Plaza, Prospect Heights, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Prospect Heights
*As Pro Forma
Reported Adjustments Total
<S> <C> <C> <C>
Rental income.................... $ 164,152 - 164,152
Additional rental income......... 116,175 - 116,175
----------- ----------- ----------
Total income..................... 280,327 - 280,327
----------- ----------- ----------
Property operating expenses...... 180,819 - 180,819
Interest expense................. - - -
Depreciation (E)................. - 46,900 46,900
----------- ----------- ----------
Total expenses................... 180,819 46,900 227,719
----------- ----------- ----------
Net income....................... $ 99,508 (46,900) 52,608
=========== =========== ==========
</TABLE>
F-13
<PAGE> 19
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Montgomery-Sears, Montgomery, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Montgomery-Sears
*As Pro Forma
Reported Adjustments Total
<S> <C> <C> <C>
Rental income.................... $ 327,610 - 327,610
Additional rental income......... 76,182 - 76,182
----------- ----------- -----------
Total income..................... 403,792 - 403,792
----------- ----------- -----------
Property operating expenses...... 102,067 - 102,067
Interest expense................. - - -
Depreciation (E)................. - 83,200 83,200
----------- ----------- -----------
Total expenses................... 102,067 83,200 185,267
----------- ----------- -----------
Net income....................... $ 301,725 (83,200) 218,525
=========== =========== ===========
</TABLE>
Acquisition of Zany Brainy, Wheaton, Illinois
This pro forma adjustment reflects the purchase of Zany Brainy as if the
Company had purchased the property as of January 1, 1995. Operations for
this property for the period from November 22, 1995 (date of occupancy) to
December 31, 1995 were estimated using the lease and operating expense
information supplied by the seller. This property was purchased on an all
cash basis.
F-14
<PAGE> 20
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Salem Square, Countryside, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Salem Square
*As Pro Forma
Reported Adjustments Total
<S> <C> <C> <C>
Rental income.................... $ 717,522 - 717,522
Additional rental income......... 387,179 - 387,179
----------- ----------- -----------
Total income..................... 1,104,701 - 1,104,701
----------- ----------- -----------
Property operating expenses...... 435,021 - 435,021
Interest expense................. - - -
Depreciation (E)................. - 150,000 150,000
----------- ----------- -----------
Total expenses................... 435,021 150,000 585,021
----------- ----------- -----------
Net income....................... $ 669,680 (150,000) 519,680
=========== =========== ===========
</TABLE>
Acquisition of Hawthorn Village Commons, Vernon Hills, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Hawthorn Village Commons
*As Pro Forma
Reported Adjustments Total
<S> <C> <C> <C>
Rental income.................... $ 970,313 - 970,313
Additional rental income......... 353,145 - 353,145
----------- ----------- -----------
Total income..................... 1,323,458 - 1,323,458
----------- ----------- -----------
Property operating expenses...... 407,404 - 407,404
Interest expense................. - 310,468 310,468
Depreciation (E)................. - 194,467 194,467
----------- ----------- -----------
Total expenses................... 407,404 504,935 912,339
----------- ----------- -----------
Net income....................... $ 916,054 (504,935) 411,119
=========== =========== ===========
</TABLE>
F-15
<PAGE> 21
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
The Company funded the purchase of Hawthorn Village Commons using: (i) the
proceeds of a short-term loan maturing August 23, 1996 in the amount of
$2.9 million from Inland Mortgage Investment Corporation ("IMIC"), an
Affiliate of the Company (the "Short-Term Loan"), and (ii) cash and cash
equivalents. The Company did not pay any fees in connection with the
Short-Term Loan, which bears interest at a rate of eight percent per
annum. A majority of the Company's board, including a majority of the
Independent Directors has approved the terms and conditions of the Short-
Term Loan. The Company repaid the Short-Term Loan using the proceeds
of a loan (the "Mortgage Loan") in the amount of $3,955,000 from
an unaffiliated lender. The Company has paid a 1% origination fee to the
lender of the Mortgage Loan. The Mortgage Loan has a term of five
years and, prior to the maturity date, requires payments of interest
only, at an annual rate of 7.85%.
Acquisition of Six Corners, Chicago, Illinois
This proforma adjustment reflects the purchase of Six Corners as if the
Company had acquired the property as of January 1, 1995. The year ended
December 31, 1995 is based on the Historical Summary of Gross Income and
Direct Operating Expenses for the year ended June 30, 1996 prepared in
accordance with Rule 3-14 of Regulation S-X and information provided by
the seller.
<TABLE>
<CAPTION>
Six Corners
Year Ended
December 31, Pro Forma
1995 Adjustments Total
<S> <C> <C> <C>
Rental income.................... $ 685,443 - 685,443
Additional rental income......... 164,345 - 164,345
----------- ----------- -----------
Total income..................... 849,788 - 849,788
----------- ----------- -----------
Property operating expenses...... 584,070 - 584,070
Interest expense................. - - -
Depreciation (E)................. - 153,000 153,000
----------- ----------- -----------
Total expenses................... 584,070 153,000 737,070
----------- ----------- -----------
Net income....................... $ 265,718 (153,000) 112,718
=========== =========== ===========
</TABLE>
F-16
<PAGE> 22
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
(D) No pro forma adjustment has been made relating to interest income which
would have been earned on the additional Offering Proceeds raised.
(E) Depreciation expense is computed using the straight-line method, based
upon an estimated useful life of thirty years.
(F) The pro forma weighted average common stock shares for the year ended
December 31, 1995 was calculated by estimating the additional shares sold
to purchase each of the Company's properties on a weighted average basis.
F-17
<PAGE> 23
Inland Real Estate Corporation
Pro Forma Balance Sheet
June 30, 1996
(unaudited)
The following unaudited Pro Forma Balance Sheet of the Company is presented to
effect the acquisition of the Zany Brainy store, Salem Square, Hawthorn Village
Commons and Six Corners as though these transactions occurred June 30, 1996.
This unaudited Pro Forma Balance Sheet should be read in conjunction with the
June 30, 1996 Financial Statements and the notes thereto as filed on Form 10-Q.
This unaudited Pro Forma Balance Sheet is not necessarily indicative of what
the actual financial position would have been at June 30, 1996, nor does it
purport to represent the future financial position of the Company. Unless
otherwise defined, capitalized terms used herein shall have the same meaning as
in the Prospectus.
F-18
<PAGE> 24
Inland Real Estate Corporation
Pro Forma Balance Sheet
June 30, 1996
(unaudited)
<TABLE>
<CAPTION>
June 30,
June 30, 1996
1996 Pro Forma Pro Forma
Historical(A) Adjustments(B) Balance Sheet
<S> <C> <C> <C>
Assets
Net investment in
properties.................. $ 34,031,575 23,078,850 57,110,425
Cash and cash equivalents..... 9,190,952 - 9,190,952
Accounts and rents
receivable.................. 799,181 757,027 1,556,208
Other assets.................. 138,189 39,550 177,739
------------ ----------- -----------
Total assets.................. $ 44,159,897 23,875,427 68,035,324
============ =========== ===========
Liabilities and Stockholders' Equity
Accounts payable and accrued
expenses.................... $ 329,746 - 329,746
Accrued real estate taxes..... 730,398 801,655 1,532,053
Distributions payable (C)..... 269,137 - 269,137
Security deposits............. 108,354 15,542 123,896
Mortgage payable.............. 5,205,586 3,955,000 9,160,586
Other liabilities............. 96,817 - 96,817
Due to Affiliates............. 545,878 - 545,878
------------ ----------- -----------
Total liabilities............. 7,285,916 4,472,197 12,058,113
------------ ----------- -----------
Common Stock.................. 43,270 22,212 65,482
Additional paid in capital
(net of Offering costs)..... 37,525,808 19,081,018 56,606,826
Accumulated distributions in
excess of net income........ (695,097) - (695,097)
------------ ----------- -----------
Total Stockholders' equity.... 36,873,981 19,103,230 55,977,211
------------ ----------- -----------
Total liabilities and
Stockholders' equity........ $ 44,159,897 23,875,427 68,035,324
============ =========== ===========
</TABLE>
See accompanying notes to pro forma balance sheet.
F-19
<PAGE> 25
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
June 30, 1996
(unaudited)
(A) The June 30, 1996 Historical column represents the historical balance sheet
as presented in the June 30, 1996 10-Q as filed with the SEC.
(B) The following pro forma adjustment relates to the acquisition of the
subject properties as though they were acquired on June 30, 1996. The
terms are described in the notes that follow.
<TABLE>
<CAPTION>
Pro Forma Adjustments
Hawthorn Total
Zany Salem Village Six Pro Forma
Brainy Square Commons Corners Adjustments
<S> <C> <C> <C> <C> <C>
Assets
Net investment in
properties........... $2,455,000 6,173,850 8,450,000 6,000,000 23,078,850
Accounts and rents
receivable........... - 262,606 188,218 306,203 757,027
Other assets........... - - 39,550 - 39,550
----------- ----------- ----------- ----------- -----------
Total assets........... $2,455,000 6,436,456 8,677,768 6,306,203 23,875,427
=========== =========== =========== =========== ===========
Liabilities and Stockholders' Equity
Accrued real estate
taxes................ $ - 270,728 194,440 336,487 801,655
Security deposits...... - - - 15,542 15,542
Mortgage payable....... - - 3,955,000 - 3,955,000
----------- ----------- ----------- ----------- -----------
Total liabilities...... - 270,728 4,149,440 352,029 4,772,197
----------- ----------- ----------- ----------- -----------
Common Stock (D)....... $ 2,855 7,169 5,265 6,923 22,212
Additional paid in
capital (net of
Offering Costs)(D)... 2,452,145 6,158,559 4,523,063 5,947,251 19,081,018
----------- ----------- ----------- ----------- -----------
Total Stockholders'
equity............... 2,455,000 6,165,728 4,528,328 5,954,174 19,103,230
----------- ----------- ----------- ----------- -----------
Total liabilities and
Stockholders' equity. $2,455,000 6,436,456 8,677,768 6,306,203 23,875,427
=========== =========== =========== =========== ===========
</TABLE>
F-20
<PAGE> 26
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
June 30, 1996
(unaudited)
Acquisition of the Zany Brainy Store, Wheaton, Illinois
On July 1, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $2,455,000 on an all cash basis,
funded from cash and cash equivalents.
Acquisition of Salem Square, Countryside, Illinois
On August 2, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $6,173,850, on an all cash basis,
funded from cash and cash equivalents.
Acquisition of Hawthorn Village Commons, Vernon Hills, Illinois
On August 15, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $8,450,000.
The Company funded the purchase using: (i) the proceeds of a short-term
loan maturing August 23, 1996 in the amount of $2.9 million from Inland
Mortgage Investment Corporation ("IMIC"), an Affiliate of the Company (the
"Short-Term Loan"), and (ii) cash and cash equivalents. The Company did
not pay any fees in connection with the Short-Term Loan, which bears
interest at a rate of eight percent per annum. A majority of the Company's
board, including a majority of the Independent Directors has approved the
terms and conditions of the Short-Term Loan. The Company repaid the
Short-Term Loan using the proceeds of a loan (the "Mortgage Loan") in
the amount of $3,955,000 from an unaffiliated lender. The Company has
paid a 1% origination fee to the lender of the Mortgage Loan. The
Mortgage Loan has a term of five years and, prior to the maturity
date, requires payments of interest only, at an annual rate of 7.85%.
Acquisition of Six Corners, Chicago, Illinois
On October 18, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of $6,000,000, on an all
cash basis, funded from cash and cash equivalents.
(C) No pro forma assumptions have been made for the additional payment of
distributions resulting from the additional proceeds raised.
(D) Additional Oferring Proceeds of $22,212,000, net of additional Offering
costs of $3,108,770 are reflected as received as of June 30, 1996, prior to
the purchase of the properties. Offering costs consist principally of
registration costs, printing and selling costs, including commissions.
F-21
<PAGE> 27
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the six months ended June 30, 1996
(unaudited)
The following unaudited Pro Forma Statement of Operations of the Company is
presented to effect the acquisitions of Mundelein Plaza, Regency Point Shopping
Center, Prospect Heights Plaza, Montgomery-Sears Shopping Center, the Zany
Brainy store, Salem Square, Hawthorn Village Commons and Six Corners as of
January 1, 1996. This unaudited Pro Forma Statement of Operations should be
read in conjunction with the June 30, 1996 Financial Statements and the notes
thereto as filed on Form 10-Q.
This unaudited Pro Forma Statement of Operations is not necessarily indicative
of what the actual results of operations would have been for the six months
ended June 30, 1996, nor does it purport to represent the future financial
position of the Company. Unless otherwise defined, capitalized terms used
herein shall have the same meaning as in the Prospectus.
F-22
<PAGE> 28
Inland Real Estate Corporation
Pro Forma Statement of Operations
for the six months ended June 30, 1996
(unaudited)
<TABLE>
<CAPTION>
1996 Total
Historical Pro Forma 1996
(A) Adjustments(B) Pro Forma
<S> <C> <C> <C>
Rental income............... $ 1,320,636 1,959,780 3,280,416
Additional rental income.... 389,624 933,811 1,323,435
Interest income (C)......... 124,589 - 124,589
Other income................ 52,806 - 52,806
------------- -------------- ------------
Total income.............. 1,887,655 2,893,591 4,781,246
------------- -------------- ------------
Professional services and
general and
administrative fees....... 104,311 - 104,311
Advisor asset management
fee....................... 125,532 189,968 315,500
Property operating expenses. 518,722 1,123,513 1,642,235
Interest expense............ 107,127 243,234 350,361
Depreciation (D)............ 277,500 418,037 695,537
Amortization................ 2,746 - 2,746
Acquisition costs expensed.. 17,150 - 17,150
------------- -------------- ------------
Total expenses.............. 1,153,088 1,974,752 3,127,840
------------- -------------- ------------
Net income................ $ 734,567 918,839 1,653,406
============= ============== ============
Weighted average
common stock shares
outstanding (E)........... 3,558,960 5,744,560
============= ===========
Net income per weighted
average common stock
outstanding (E)........... $ .25 .29
============= ===========
</TABLE>
See accompanying notes to pro forma statement of operations.
F-23
<PAGE> 29
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
For the six months ended June 30, 1996
(unaudited)
(A) The June 30, 1996 Historical column represents the historical statement of
operations of the Company for the six months ended June 30, 1996, as filed
with the SEC on Form 10-Q.
(B) Total pro forma adjustments for the six months ended June 30, 1996 are as
though the acquisitions of the following properties occurred on January 1,
1996 on an all cash basis except for the following:
Regency Point
In the purchase of Regency Point the Company assumed the existing first
mortgage loan of $4,473,200, along with a related interest rate swap
agreement. The first mortgage loan has a floating interest rate of 180
basis points over the 30-day LIBOR rate, which rate is adjusted monthly.
The interest rate swap agreement, in conjunction with the first mortgage,
provides for Bank One, Chicago, to receive from or pay to the Company the
difference between 6.11% and the 30-day LIBOR rate, so that the first
mortgage loan has an effective rate of 7.91% per annum. The pro forma
adjustment for interest expense for 1996 was estimated using the described
loan terms. The related interest rate swap agreement was terminated on
April 18, 1996 resulting in $48,419 proceeds to the Company. The pro forma
adjustment does not give effect to the termination of this agreement.
Hawthorn Village Commons
The Company funded the purchase of Hawthorn Village Commons using: (i) the
proceeds of a short-term loan maturing August 23, 1996 in the amount of
$2.9 million from Inland Mortgage Investment Corporation ("IMIC"), an
Affiliate of the Company (the "Short-Term Loan"), and (ii) cash and cash
equivalents. The Company did not pay any fees in connection with the
Short-Term Loan, which bears interest at a rate of eight percent per annum.
A majority of the Company's board, including a majority of the Independent
Directors has approved the terms and conditions of the Short-Term Loan.
The Company repaid the Short-Term Loan using the proceeds of a loan
(the "Mortgage Loan") in the amount of $3,955,000 from an unaffiliated
lender. The Company has paid a 1% origination fee to the lender of
the Mortgage Loan. The Mortgage Loan has a term of five years and,
prior to the maturity date, requires payments of interest only, at
an annual rate of 7.85%.
F-24
<PAGE> 30
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the six months ended June 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Mundelein Regency Prospect Montgomery- Zany
Plaza Point Heights Sears Brainy
---------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Rental income..... $ 163,381 139,271 89,105 163,700 137,489
Additional rental
income.......... 32,975 16,034 83,593 57,012 24,144
Interest income... - - - - -
---------- --------- --------- --------- ---------
Total income...... 196,356 155,305 172,698 220,712 161,633
Professional services
and general and
administrative.. - - - - -
Advisor asset
management fee.. - - - - -
Property operating
expenses........ 53,986 19,046 91,364 66,944 30,331
Interest expense.. - - - - -
Depreciation (D).. - - - - -
---------- --------- --------- --------- ---------
Total expenses.... 53,986 19,046 91,364 66,944 30,331
---------- --------- --------- --------- ---------
Net income........ $ 142,370 136,259 81,334 153,768 131,302
========== ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Hawthorn
Salem Village Six Pro Forma
Square Commons Corners Adjustments Total
---------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Rental income..... 341,273 426,053 499,508 - 1,959,780
Additional rental
income.......... 212,817 180,202 327,034 - 933,811
Interest income... - - - - -
----------- --------- --------- ---------- -----------
Total income...... 554,090 606,255 826,542 - 2,893,591
----------- --------- --------- ---------- -----------
Professional servi
and general and
administrative.. - - - - -
Advisor asset
management fee.. - - - 189,968 189,968
Property operating
expenses........ 240,177 216,967 404,698 - 1,123,513
Interest expense.. - - - 243,234 243,234
Depreciation (D).. - - - 418,037 418,037
----------- --------- --------- ---------- -----------
Total expenses.... 240,177 216,967 - 851,239 1,974,752
----------- --------- --------- ---------- -----------
Net income........ 313,913 389,288 421,844 (851,239) 918,839
=========== ========= ========= ========== ===========
</TABLE>
F-25
<PAGE> 31
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the six months ended June 30, 1996
(unaudited)
(C) No pro forma adjustment has been made relating to interest income which
would have been earned on the additional Offering Proceeds raised.
(D) Depreciation expense is computed using the straight-line method, based upon
an estimated useful life of thirty years.
(E) The pro forma weighted average common stock shares for the six months ended
June 30, 1996 was calculated by estimating the additional shares sold to
purchase each of the Company's properties on a weighted average basis.
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