As filed with the Securities and Exchange Commission on July 8, 1997.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report: May 6, 1997
(Date of earliest event reported)
Inland Real Estate Corporation
(Exact name of registrant as specified in the charter)
Maryland 000-28382 36-3953261
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
2901 Butterfield Road
Oak Brook, Illinois 60521
(Address of Principal Executive Offices)
(630) 218-8000
(Registrant's telephone number including area code)
n/a
(Former name or former address, if changed since last report)
-1-
Item 7. Financial Statements and Exhibits
Index to Financial Statements
Page
Independent Auditors' Report........................................ F-1
Historical Summary of Gross Income and Direct Operating Expenses
for the year ended December 31, 1996 of Cobblers Mall............... F-2
Notes to Historical Summary of Gross Income and Direct Operating
Expenses for the year ended December 31, 1996 of Cobblers Mall...... F-3
Independent Auditors' Report........................................ F-5
Historical Summary of Gross Income and Direct Operating Expenses
for the year ended December 31, 1996 of Mallard Mall................ F-6
Notes to Historical Summary of Gross Income and Direct Operating
Expenses for the year ended December 31, 1996 of Mallard Mall....... F-7
Pro Forma Balance Sheet (unaudited) at March 31, 1996............... F-9
Notes to Pro Forma Balance Sheet (unaudited) at March 31, 1996...... F-11
Pro Forma Statement of Operations (unaudited) of the Company
for the year ended March 31, 1996................................... F-14
Notes to Pro Forma Statement of Operations (unaudited) for
the year ended March 31, 1996....................................... F-16
Pro Forma Statement of Operations (unaudited) of the Company
for the year ended December 31, 1996.............................. F-19
Notes to Pro Forma Statement of Operations (unaudited) for the
year ended December 31, 1996........................................ F-21
-2-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Inland Real Estate Corporation
(Registrant)
By: /s/ Kelly Tucek
Kelly Tucek
Chief Financial and Accounting
Officer
Date: July 8, 1997
-3-
Independent Auditors' Report
The Board of Directors
Inland Real Estate Corporation:
We have audited the accompanying Historical Summary of Gross Income and Direct
Operating Expenses (Historical Summary) of Cobblers Mall for the year ended
December 31, 1996. This Historical Summary is the responsibility of the
management of Inland Real Estate Corporation. Our responsibility is to express
an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Historical Summary is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Historical Summary. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the Historical Summary. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and
for inclusion in the Registration Statement on Form S-11 of Inland Real Estate
Corporation as described in note 2. The presentation is not intended to be a
complete presentation of Cobblers Mall's revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in
all material respects, the gross income and direct operating expenses described
in note 2 of Cobblers Mall for the year ended December 31, 1996, in conformity
with generally accepted accounting principles.
KPMG Peat Marwick LLP
Chicago, Illinois
April 25, 1997
F-1
Cobblers Mall
Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1996
Gross income:
Base rental income.............................. $1,014,342
Operating expense and real estate
tax recoveries................................ 376,560
-----------
Total gross income.............................. 1,390,902
-----------
Direct operating expenses:
Real estate taxes............................... 430,076
Operating expenses.............................. 80,537
Utilities....................................... 32,225
Insurance....................................... 5,185
-----------
Total direct operating expenses................. 548,023
-----------
Excess of gross income over direct
operating expenses.............................. $ 842,879
===========
See accompanying notes to historical summary of gross income and direct
operating expenses.
F-2
Cobblers Mall
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1996
1. Business
Cobblers Mall (Cobblers) is located in Elgin, Illinois. It consists of
approximately 103,000 square feet of gross leasable area and was
approximately 91% leased and occupied at December 31, 1996. Inland Real
Estate Corporation has signed a sale and purchase agreement for the
purchase of Cobblers from an unaffiliated third party (Seller).
2. Basis of Presentation
The Historical Summary of Gross Income and Direct Operating Expenses
(Historical Summary) has been prepared for the purpose of complying with
Rule 3-14 of the Securities and Exchange Commission Regulation S-X and for
inclusion in the Registration Statement on Form S-11 of Inland Real Estate
Corporation and is not intended to be a complete presentation of Cobbler's
revenues and expenses. The Historical Summary has been prepared on the
accrual basis of accounting and requires management of Cobblers to make
estimates and assumptions that affect the reported amounts of the revenues
and expenses during the reporting period. Actual results may differ from
those estimates.
3. Gross Income
Cobblers leases retail space under various lease agreements with its
tenants. All leases are accounted for as operating leases. The leases
include provisions under which Cobblers is reimbursed for common area, real
estate, and insurance costs. Operating expenses and real estate tax
recoveries reflected in the Historical Summary include amounts for 1996
expenses for which the tenants have not yet been billed. Certain leases
contain renewal options for various periods at various rental rates.
Base rentals are reported as income over the lease term as they become
receivable under the lease provisions. However, when rentals vary from a
straight-line basis due to short-term rent abatements or escalating rents
during the lease term, the income is recognized based on effective rental
rates. Related adjustments increased base rental income by $6,385 for the
year ended December 31, 1996.
F-3
Cobblers Mall
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1996
Minimum rents to be received from tenants under operating leases in effect
at December 31, 1996, are as follows:
Year Amount
---- ------
1997 $ 1,002,043
1998 989,849
1999 930,840
2000 861,813
2001 817,835
Thereafter 7,893,319
------------
$12,495,699
============
4. Direct Operating Expenses
Direct operating expenses include only those costs expected to be
comparable to the proposed future operations of Cobblers. Costs such as
mortgage interest, depreciation, amortization, management fees, and
professional fees are excluded from the Historical Summary.
Cobblers has not received its final real estate tax bill for 1996. Real
estate tax expense is estimated based upon the 1995 bill. The difference
between this estimate and the final bill is not expected to have a
material impact on the Historical Summary.
F-4
Independent Auditors' Report
The Board of Directors
Inland Real Estate Corporation:
We have audited the accompanying Historical Summary of Gross Income and Direct
Operating Expenses (Historical Summary) of Mallard Mall for the year ended
December 31, 1996. This Historical Summary is the responsibility of the
management of Inland Real Estate Corporation. Our responsibility is to express
an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Historical Summary is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Historical Summary. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the Historical Summary. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and
for inclusion in the Registration Statement on Form S-11 of Inland Real Estate
Corporation as described in note 2. The presentation is not intended to be a
complete presentation of Mallard Mall's revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in
all material respects, the gross income and direct operating expenses described
in note 2 of Mallard Mall for the year ended December 31, 1996, in conformity
with generally accepted accounting principles.
KPMG Peat Marwick LLP
Chicago, Illinois
April 25, 1997
F-5
Mallard Mall
Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1996
Gross income:
Base rental income.............................. $ 992,972
Operating expense and real estate
tax recoveries................................ 412,024
-----------
Total gross income.............................. 1,404,996
-----------
Direct operating expenses:
Real estate taxes............................... 340,057
Operating expenses.............................. 63,829
Utilities....................................... 11,804
Insurance....................................... 4,400
-----------
Total direct operating expenses................. 420,090
-----------
Excess of gross income over direct
operating expenses.............................. $ 984,906
===========
See accompanying notes to historical summary of gross income and direct
operating expenses.
F-6
Mallard Mall
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1996
1. Business
Mallard Mall (Mallard) is located in Elk Grove Village, Illinois. It
consists of approximately 83,000 square feet of gross leasable area and was
approximately 92% leased and occupied at December 31, 1996. Inland Real
Estate Corporation has signed a sale and purchase agreement for the
purchase of Mallard from an unaffiliated third party (Seller).
2. Basis of Presentation
The Historical Summary of Gross Income and Direct Operating Expenses
(Historical Summary) has been prepared for the purpose of complying with
Rule 3-14 of the Securities and Exchange Commission Regulation S-X and for
inclusion in the Registration Statement on Form S-11 of Inland Real Estate
Corporation and is not intended to be a complete presentation of Mallard's
revenues and expenses. The Historical Summary has been prepared on the
accrual basis of accounting and requires management of Mallard to make
estimates and assumptions that affect the reported amounts of the revenues
and expenses during the reporting period. Actual results may differ from
those estimates.
3. Gross Income
Mallard leases retail space under various lease agreements with its
tenants. All leases are accounted for as operating leases. The leases
include provisions under which Mallard is reimbursed for common area, real
estate, and insurance costs. Operating expenses and real estate tax
recoveries reflected in the Historical Summary include amounts for 1996
expenses for which the tenants have not yet been billed. Certain leases
contain renewal options for various periods at various rental rates.
Base rentals are reported as income over the lease term as they become
receivable under the lease provisions. However, when rentals vary from a
straight-line basis due to short-term rent abatements or escalating rents
during the lease term, the income is recognized based on effective rental
rates. Related adjustments increased base rental income by $4,632 for the
year ended December 31, 1996.
F-7
Mallard Mall
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1996
Minimum rents to be received from tenants under operating leases in effect
at December 31, 1996, are as follows:
Year Amount
---- ------
1997 $ 1,067,063
1998 1,002,188
1999 960,074
2000 933,976
2001 934,328
Thereafter 8,459,805
------------
$13,357,434
============
4. Direct Operating Expenses
Direct operating expenses include only those costs expected to be
comparable to the proposed future operations of Mallard. Costs such as
mortgage interest, depreciation, amortization, management fees, and
professional fees are excluded from the Historical Summary.
Mallard has not received its final real estate tax bill for 1996. Real
estate tax expense is estimated based upon the 1995 bill. The difference
between this estimate and the final bill is not expected to have a
material impact on the Historical Summary.
F-8
Inland Real Estate Corporation
Pro Forma Balance Sheet
March 31, 1997
(unaudited)
The following unaudited Pro Forma Balance Sheet of the Company is presented to
give effect to the acquisitions of the Niles Shopping Center, Cobblers Mall,
Mallard Mall, Ameritech Outlot, Calumet Square, Sequoia Plaza, Highland Park
Dominicks, Schaumburg Dominicks and River Square as though these transactions
occurred March 31, 1997. This unaudited Pro Forma Balance Sheet should be read
in conjunction with the March 31, 1997 Financial Statements and the notes
thereto as included herein.
This unaudited Pro Forma Balance Sheet is not necessarily indicative of what
the actual financial position would have been at March 31, 1997, 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-9
Inland Real Estate Corporation
Pro Forma Balance Sheet
March 31, 1997
(unaudited)
March 31,
March 31, 1997
1997 Pro Forma Pro Forma
Historical(A) Adjustments(B) Balance Sheet
------------- ------------- --------------
Assets
- ------
Net investment in
properties.................. $121,755,366 58,041,900 179,797,266
Cash and cash equivalents..... 22,647,158 - 22,647,158
Restricted cash............... 1,117,333 - 1,117,333
Accounts and rents
receivable.................. 2,666,872 1,551,196 4,218,068
Other assets.................. 3,323,680 - 3,323,680
------------- ------------- -------------
Total assets.................. $151,510,409 59,593,096 211,103,505
============= ============= =============
Liabilities and Stockholders' Equity
- ------------------------------------
Accounts payable and accrued
expenses.................... $ 1,318,463 - 1,318,463
Accrued real estate taxes..... 3,134,066 1,650,996 4,785,062
Distributions payable (C)..... 749,856 - 749,856
Security deposits............. 320,966 14,250 335,216
Mortgages payable............. 53,182,067 - 53,182,067
Unearned income............... 375,570 - 375,570
Due to Affiliates............. 247,191 - 247,191
------------- ------------- -------------
Total liabilities............. 59,328,179 1,665,246 60,993,425
------------- ------------- -------------
Common Stock (D).............. 108,280 67,358 175,638
Additional paid in capital
(net of Offering costs) (D). 94,623,475 57,860,492 152,483,967
Accumulated distributions in
excess of net income........ (2,549,525) - (2,549,525)
------------- ------------- -------------
Total Stockholders' equity.... 92,182,230 57,927,850 150,110,080
------------- ------------- -------------
Total liabilities and
Stockholders' equity........ $151,510,409 59,593,096 211,103,505
============= ============= =============
See accompanying notes to pro forma balance sheet.
F-10
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
March 31, 1997
(unaudited)
(A) The March 31, 1997 Historical column represents the historical balance
sheet as presented in the unaudited March 31, 1997 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 March 31, 1997. The
terms are described in the notes that follow.
Pro Forma Adjustments
--------------------------------------
Niles
Shopping Cobblers Mallard
Center Mall Mall
------------ ------------ ------------
Assets
- ------
Net investment in
properties............ $ 3,280,000 10,953,000 8,099,900
Accounts and rents
receivable............ 154,001 493,734 397,602
------------ ------------ ------------
Total assets............ $ 3,434,001 11,446,734 8,497,502
============ ============ ============
Liabilities and Stockholders' Equity
- ------------------------------------
Accrued real estate
taxes................. $ 154,001 542,971 429,322
Security deposits....... 14,250 - -
------------ ------------ ------------
Total liabilities....... 168,251 542,971 429,322
------------ ------------ ------------
Common Stock............ 3,797 12,679 9,382
Additional paid in capital
(net of Offering
Costs)................ 3,261,953 10,891,084 8,058,798
------------ ------------ ------------
Total Stockholders'
equity................ 3,265,750 10,903,763 8,068,180
------------ ------------ ------------
Total liabilities and
Stockholders' equity.. $ 3,434,001 11,446,734 8,497,502
============ ============ ============
F-11
<TABLE>
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
March 31, 1997
(unaudited)
(B) Continued
<CAPTION>
Pro Forma Adjustments
--------------------------------------------------------------------------
Highland Total
Ameritech Calumet Sequoia Park Schaumburg River Pro Forma
Outlot Square Plaza Dominicks Dominicks Square Adjustments
----------- ----------- ------------ ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
- ------
Net investment in
properties........... 1,050,000 2,108,000 3,010,000 12,800,000 10,691,000 6,050,000 58,041,900
Accounts and rents
receivable........... 6,941 176,750 123,968 - - 198,200 1,551,196
----------- ----------- ------------ ----------- ----------- ------------ -------------
Total assets........... 1,056,941 2,284,750 3,133,968 12,800,000 10,691,000 6,248,200 59,593,096
=========== =========== ============ =========== =========== ============ =============
Liabilities and Stockholders' Equity
- ------------------------------------
Accrued real estate
taxes................ $ 6,941 176,750 132,411 - - 208,600 1,650,996
Security deposits...... - - - - - - 14,250
----------- ----------- ------------ ----------- ----------- ------------ -------------
Total liabilities...... 6,941 176,750 132,411 - - 208,600 1,665,246
----------- ----------- ------------ ----------- ----------- ------------ -------------
Common Stock........... 1,221 2,451 3,490 14,884 12,431 7,023 67,358
Additional paid in capital
(net of Offering
Costs)............... $1,048,779 2,105,549 2,998,067 12,785,116 10,678,569 6,032,577 57,860,492
----------- ----------- ------------ ----------- ----------- ------------ -------------
Total Stockholders'
equity............... 1,050,000 2,108,000 3,001,557 12,800,000 10,691,000 6,039,600 57,927,850
----------- ----------- ------------ ----------- ----------- ------------ -------------
Total liabilities and
Stockholders' equity. 1,056,941 2,284,750 3,133,968 12,800,000 10,691,000 6,248,200 59,593,096
============ ============ ============ =========== =========== ============ =============
</TABLE>
F-12
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
March 31, 1997
(unaudited)
Acquisition of Properties:
On April 11, 1997, the Company acquired Niles Shopping Center, Niles,
Illinois from an unaffiliated third party for the purchase price of
$3,280,000 on an all cash basis, funded from cash and cash equivalents.
On May 6, 1997, the Company acquired Cobblers Mall, Elgin, Illinois from an
unaffiliated third party for the purchase price of $10,953,000 on an all
cash basis, funded from cash and cash equivalents.
On May 6, 1997, the Company acquired Mallard Mall, Elk Grove Village,
Illinois from an unaffiliated third party for the purchase price of
$8,099,900 on an all cash basis, funded from cash and cash equivalents.
On May 9, 1997, the Company acquired Ameritech Outlot, Joliet, Illinois
from an unaffiliated third party for the purchase price of $1,050,000 on an
all cash basis, funded from cash and cash equivalents.
On May 30, 1997, the Company acquired Schaumburg Dominick's, Schaumburg,
Illinois from an unaffiliated third party for the purchase price of
$10,691,000 on an all cash basis, funded from cash and cash equivalents.
On June 2, 1997, the Company acquired Calumet Square, Calumet, Illinois
from an unaffiliated third party for the purchase price of $2,108,000 on an
all cash basis, funded from cash and cash equivalents.
On June 16, 1997, the Company acquired Sequoia Plaza, Milwaukee, Wisconsin
from an unaffiliated third party for the purchase price of $3,010,000 on an
all cash basis, funded from cash and cash equivalents.
On June 16, 1997, the Company acquired Highland Park Dominick's, Highland
Park, Illinois from an unaffiliated third party for the purchase price of
$12,800,000 on an all cash basis, funded from cash and cash equivalents.
On June 19, 1997, the Company acquired River Square, Naperville, Illinois
from an unaffiliated third party for the purchase price of $6,050,000 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 $67,358,000, net of additional Offering
costs of $9,430,150 are reflected as received as of March 31, 1997, prior
to the purchase of the properties. Offering costs consist principally of
registration costs, printing and selling costs, including commissions.
F-13
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the three months ended March 31, 1997
(unaudited)
The following unaudited Pro Forma Statement of Operations of the Company is
presented to effect the acquisitions of Maple Park Place Shopping Center,
Aurora Commons Shopping Center, Lincoln Park Place Shopping Center, Niles
Shopping Center, Cobblers Mall, Mallard Mall, Ameritech Outlot, Calumet Square,
Sequoia Plaza, Highland Park Dominicks, Schaumburg Dominicks and River Square
as though they occurred on January 1, 1997. This unaudited Pro Forma Statement
of Operations should be read in conjunction with the March 31, 1997 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 three months
ended March 31, 1997, 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-14
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the three months ended March 31, 1997
(unaudited)
Pro Forma Adjustments
-----------------------
1997 1997
Historical Acquisitions 1997
(A) (B) Pro Forma
----------- ----------- -----------
Rental income..... $3,603,584 1,541,859 5,145,443
Additional rental
income.......... 1,061,507 543,025 1,604,532
Interest
income(C)....... 156,436 - 156,436
Other income...... 36,244 - 36,244
----------- ----------- ------------
Total income.... 4,857,771 2,084,884 6,942,655
----------- ----------- ------------
Professional services
and general and
administrative
fees............ 85,158 - 85,158
Advisor asset
management fee.(F) 233,337 145,105 378,442
Property operating
expenses........ 1,859,461 605,341 2,464,802
Interest expense.. 1,005,741 26,718 1,032,459
Depreciation (D).. 741,920 389,312 1,131,232
Amortization...... 38,364 - 38,364
Acquisition costs
expensed........ 9,090 - 9,090
----------- ----------- ------------
Total expenses.... 3,973,071 1,166,476 5,139,547
----------- ----------- ------------
Net income...... $ 884,700 918,408 1,803,108
=========== =========== ============
Weighted average
common stock shares
outstanding (E). 9,384,792 16,120,592
=========== ============
Net income per weighted
average common stock
outstanding (E). $ .09 .11
=========== ============
See accompanying notes to pro forma statement of operations.
F-15
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
For the three months ended March 31, 1997
(unaudited)
(A) The 1997 Historical column represents the historical statement of
operations of the Company for the three months ended March 31, 1997
(unaudited), as filed with the SEC on Form 10-Q.
(B) Total pro forma adjustments for the three months ended March 31, 1997 are
as though the 1997 acquisitions of the following properties occurred on
January 1, 1997 on an all cash basis except for Maple Park, Aurora Commons
and Lincoln Park Place. Proforma adjustments for interest expense on these
properties were based on the following terms.
Maple Park Shopping Center
The Company funded the purchase using (i) the proceeds of a short-term loan
maturing April 7, 1997 in the amount of $8 million from Inland Mortgage
Investment Corporation ("IMIC"), an affiliate of the Company (the "Short-
Term Loan"), and (ii) cash and cash equivalents. The Short-Term Loan bears
interest at a rate of 9.0% per annum and requires a loan fee of 1/4%.
Aurora Commons Shopping Center
As part of the acquisition of Aurora Commons Shopping Center, the Company
assumed the existing mortgage loan, maturing December 31, 2001, with the
balance funded with cash and cash equivalents. The loan bears interest at
a rate of 9% per annum with monthly payments of principal and interest on
the first day of each month.
Lincoln Park Place Shopping Center
The Company funded the purchase of Lincoln Park Place Shopping Center using
the proceeds of a short-term loan maturing February 7, 1997 in the amount
of $2,016,110 from Inland Mortgage Investment Corporation ("IMIC"), an
affiliate of the Company (the "Short-Term Loan"). The Company did not pay
any fees in connection with the Short-Term Loan, which bears interest at a
rate of 9% per annum.
F-16
<TABLE>
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the three months ended March 31, 1997
(unaudited)
(B) Total pro forma adjustments for 1997 acquisitions are as though they were acquired January 1, 1997.
<CAPTION>
Niles
Maple Park Aurora Lincoln Shopping Cobblers Mallard Calumet
Place Commons Park Place Center Mall Mall Square
----------- ----------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Rental income..... 39,736 82,740 14,159 98,780 255,790 267,028 78,398
Additional rental
income.......... 8,168 26,594 5,714 39,507 142,382 103,809 87,939
----------- ----------- ----------- ----------- ----------- ------------ -----------
Total income...... 47,904 109,334 19,873 138,287 398,172 370,837 166,337
----------- ----------- ----------- ----------- ----------- ------------ -----------
Advisor asset
management fee.. - - - - - - -
Property operating
expenses........ 10,039 30,055 6,352 43,952 153,892 121,290 91,467
Interest expense.. - - - - - - -
Depreciation...... - - - - - - -
----------- ----------- ----------- ----------- ----------- ------------ -----------
Total expenses.... 10,039 30,055 6,352 43,952 153,892 121,290 91,467
----------- ----------- ----------- ----------- ----------- ------------ -----------
Net income (loss). 37,865 79,279 13,521 94,335 244,280 249,547 74,870
=========== =========== =========== =========== =========== =========== ============
Total
Highland 1997
Ameritech Schaumburg Sequoia Park River Pro Forma Acquisitions
Outlot Dominicks Plaza Dominicks Square Adjustments Pro Forma
----------- ----------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Rental income..... 27,576 161,706 99,580 220,994 195,372 - 1,541,859
Additional rental
income.......... 6,068 - 36,786 - 86,058 - 543,025
----------- ----------- ----------- ----------- ----------- ------------ ------------
Total income...... 33,644 161,706 136,366 220,994 281,430 - 2,084,884
----------- ----------- ----------- ----------- ----------- ------------ ------------
Advisor asset
management fee.. - - - - - 145,105 145,105
Property operating
expenses........ 7,309 3,234 42,744 4,420 90,587 - 605,341
Interest expense.. - - - - - 26,718 26,718
Depreciation...... - - - - - 389,312 389,312
----------- ----------- ----------- ----------- ----------- ------------ ------------
Total expenses.... 7,309 3,234 42,744 4,420 90,587 561,135 1,166,476
----------- ----------- ----------- ----------- ----------- ------------ ------------
Net income (loss). 26,335 158,472 93,622 216,574 190,843 (561,135) 918,408
=========== =========== =========== =========== =========== ============ ============
</TABLE>
F-17
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the three months ended March 31, 1997
(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 three months
ended March 31, 1997 was calculated by estimating the additional shares
sold to purchase each of the Company's properties on a weighted average
basis.
(F) Advisor Asset Management Fees are calculated as 1% of the Average Invested
Assets (as defined).
F-18
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the year ended December 31, 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, Six Corners Plaza, Spring
Hill Fashion Corner, Crestwood Plaza Shopping Center, Park St. Claire, Lansing
Square Shopping Center, Summit of Park Ridge, Maple Park Place Shopping Center,
Aurora Commons Shopping Center, Lincoln Park Place Shopping Center, Niles
Shopping Center, Cobblers Mall, Mallard Mall, Calumet Square, Ameritech Outlot,
Sequoia Plaza, Highland Park Dominicks, Schaumburg Dominicks and River Square
as though they occurred the earlier of January 1, 1996 or the date operations
commenced. Grand and Hunt Club and the Quarry Outlot were constructed in 1996,
and had not commenced significant operations prior to acquisition, therefore,
no operations relating to these properties are presented on the unaudited Pro
Forma Statement of Operations for December 31, 1996. This unaudited Pro Forma
Statement of Operations should be read in conjunction with the December 31,
1996 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, 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-19
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the year ended December 31, 1996
(unaudited)
Pro Forma Adjustments
------------------------
1996 1996 1997
Historical Acquisitions Acquisitions 1996
(A) (B) (C) Pro Forma
----------- ------------ ----------- -----------
Rental income..... $4,467,903 6,127,326 8,636,819 19,232,048
Additional rental
income.......... 1,336,809 3,198,250 2,531,865 7,066,924
Interest
income(E)....... 438,188 - - 438,188
Other income...... 84,834 - - 84,834
----------- ----------- ----------- ------------
Total income.... 6,327,734 9,325,576 11,168,684 26,821,994
----------- ----------- ----------- ------------
Professional services
and general and
administrative
fees............ 183,559 - - 183,559
Advisor asset
management fee.(I) 238,108 708,222 869,040 1,815,370
Property operating
expenses........ 1,873,174 3,656,698 3,107,123 8,636,995
Interest expense.. 597,485 949,958 1,784,433 3,331,876
Depreciation (F).. 939,144 1,448,017 2,232,111 4,619,272
Amortization (H).. 17,367 11,428 6,457 35,252
Acquisition costs
expensed........ 26,676 - - 26,676
----------- ----------- ----------- ------------
Total expenses.... 3,875,513 6,774,323 7,999,164 18,649,000
----------- ----------- ----------- ------------
Net income...... $2,452,221 2,551,253 3,169,520 8,172,994
=========== =========== =========== ============
Weighted average
common stock shares
outstanding (G). 4,494,620 12,110,720
=========== ============
Net income per weighted
average common stock
outstanding (G). $ .55 .67
=========== ============
See accompanying notes to pro forma statement of operations.
F-20
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
For the year ended December 31, 1996
(unaudited)
(A) The 1996 Historical column represents the historical statement of
operations of the Company for the year ended December 31, 1996, as filed
with the SEC on Form 10-K.
(B) Total pro forma adjustments for the year ended December 31, 1996 are as
though the 1996 acquisitions of the following properties occurred on
January 1, 1996 on an all cash basis except for Regency Point, Hawthorn
Village Commons, Crestwood and Lansing Square. Proforma adjustments for
interest expense on these properties were based on the following terms.
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.
Crestwood Plaza Shopping Center
As part of the December 27, 1996 purchase of Crestwood Plaza, the Company
assumed the existing first mortgage loan of $1,330,253.
F-21
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Lansing Square Shopping Center
The Company funded the purchase using: (i) the proceeds of five long-term
loans totaling $12,850,000 from LaSalle Bank of which approximately
$8,000,000 was used to purchase this property and (ii) cash and cash
equivalents. The Company paid a one point fee in connection with these
long-term loans. The loans have a term of seven years and, prior to the
maturity date, require payments of interest only, at 7.6%, fixed for five
years with the remaining two years at prime plus 1/2%.
Total pro forma adjustments for 1996 acquisitions are as though they were
acquired the earlier of January 1, 1996 or date that operations commenced
(related to Zany Brainy).
Mundelein Regency Prospect Montgomery- Zany
Plaza Point Heights Sears Brainy
----------- ----------- ----------- ----------- -----------
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
----------- ----------- ----------- ----------- -----------
Total income...... 196,356 155,305 172,698 220,712 161,633
----------- ----------- ----------- ----------- -----------
Property operating
expenses........ 53,986 19,046 91,364 66,944 30,331
----------- ----------- ----------- ----------- -----------
Total expenses.... 53,986 19,046 91,364 66,944 30,331
----------- ----------- ----------- ----------- -----------
Net income........ $ 142,370 136,259 81,334 153,768 131,302
=========== =========== =========== =========== ===========
F-22
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Hawthorn
Salem Village Six Spring
Square Commons Corners Hill Crestwood
----------- ----------- ----------- ----------- -----------
Rental income..... $ 422,146 548,667 790,888 948,906 203,007
Additional rental
income.......... 260,832 270,570 517,804 234,837 69,315
----------- ----------- ----------- ----------- -----------
Total income...... 682,978 819,237 1,308,692 1,183,743 272,322
----------- ----------- ----------- ----------- -----------
Property operating
expenses........ 270,756 293,132 640,772 300,842 78,450
----------- ----------- ----------- ----------- -----------
Total expenses.... 270,756 293,132 640,772 300,842 78,450
----------- ----------- ----------- ----------- -----------
Net income........ $ 412,222 526,105 667,920 882,901 193,872
=========== =========== =========== =========== ===========
Total
1996
Park Lansing Park Pro Forma Acquisitions
St. Claire Square Ridge Adjustments Pro Forma
----------- ----------- ----------- ----------- ------------
Rental income..... $ 178,596 2,001,855 340,315 - 6,127,326
Additional rental
income.......... 62,194 1,332,149 236,791 - 3,198,250
----------- ----------- ----------- ----------- -----------
Total income...... 240,790 3,334,004 577,106 - 9,325,576
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. - - - 708,222 708,222
Property operating
expenses........ 103,386 1,507,941 299,748 - 3,656,698
Interest Expense.. - - - 949,958 949,958
Depreciation...... - - - 1,448,017 1,448,017
Amortization...... - - - 11,428 11,428
----------- ----------- ----------- ----------- -----------
Total expenses.... 103,386 1,507,941 299,748 3,117,625 6,774,323
----------- ----------- ----------- ----------- -----------
Net income (loss). $ 137,404 1,826,063 277,358 (3,117,625) 2,551,253
=========== =========== =========== =========== ===========
F-23
<TABLE> Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
(C) Total pro forma adjustments for 1997 acquisitions are as though they were
acquired the earlier of January 1, 1996 or the date operations commenced.
<CAPTION>
Niles
Maple Park Aurora Lincoln Shopping Cobblers Mallard Calumet
Place Commons Park Place Center Mall Mall Square
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Rental income..... 1,844,314 1,341,448 228,218 375,349 1,014,342 992,972 222,072
Additional rental
income.......... 405,864 534,247 111,997 104,619 376,560 412,024 179,854
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total income...... 2,250,178 1,875,695 340,215 479,968 1,390,902 1,404,996 401,926
----------- ----------- ----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 152,621 115,000 21,000 32,800 109,530 80,999 21,080
Property operating
expenses........ 444,390 632,131 130,176 141,974 548,023 420,090 214,748
Interest expense.. 720,000 882,983 181,450 - - - -
Depreciation...... 404,905 334,573 42,260 81,600 273,825 202,498 52,700
Amortization...... 2,857 - 3,600 - - - -
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total expenses.... 1,724,773 1,964,687 378,486 256,374 931,378 703,587 228,528
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss). 525,405 (88,992) (38,271) 223,594 459,524 701,409 113,398
=========== =========== =========== =========== =========== =========== ===========
Total
Highland 1997
Ameritech Schaumburg Sequoia Park River Acquisitions
Outlot Dominicks Plaza Dominicks Square Pro Forma
----------- ----------- ----------- ----------- ----------- ------------
<C> <C> <C> <C> <C>
Rental income..... 106,283 646,825 361,986 883,976 619,034 8,636,819
Additional rental
income.......... 18,265 - 135,404 - 253,031 2,531,865
----------- ----------- ----------- ----------- ----------- -----------
Total income...... 124,548 646,825 497,390 883,976 872,065 11,168,684
----------- ----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 10,500 106,910 30,100 128,000 60,500 869,040
Property operating
expenses........ 18,500 12,937 164,126 17,680 362,348 3,107,123
Interest expense.. - - - - - 1,784,433
Depreciation...... 26,250 267,000 75,250 320,000 151,250 2,232,111
Amortization...... - - - - - 6,457
----------- ----------- ----------- ----------- ----------- -----------
Total expenses.... 55,250 386,847 269,476 465,680 574,098 7,999,164
----------- ----------- ----------- ----------- ----------- -----------
Net income (loss). 69,298 259,978 227,914 418,296 297,967 3,169,520
=========== =========== =========== =========== =========== ===========
</TABLE>
F-24
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Acquisition of Maple Park Shopping Center, Bolingbrook, Illinois
The Company funded the purchase using (i) the proceeds of a short-term loan
maturing April 7, 1997 in the amount of $8 million from Inland Mortgage
Investment Corporation ("IMIC"), an affiliate of the Company (the "Short-
Term Loan"), and (ii) cash and cash equivalents. The Short-Term Loan bears
interest at a rate of 9.0% per annum and requires a loan fee of 1/4%.
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Maple Park Place
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income.................... $1,844,314 - 1,844,314
Additional rental income......... 405,864 - 405,864
----------- ----------- -----------
Total income..................... 2,250,178 - 2,250,178
----------- ----------- -----------
Advisor asset management fee..... - 152,621 152,621
Property operating expenses...... 444,390 - 444,390
Interest expense................. - 720,000 720,000
Depreciation..................... - 404,905 404,905
Amortization..................... - 2,857 2,857
----------- ----------- -----------
Total expenses................... 444,390 1,280,383 1,724,773
----------- ----------- -----------
Net income (loss)................ $1,807,788 (1,280,383) 525,405
=========== =========== ===========
Acquisition of Aurora Commons Shopping Center, Aurora, Illinois
As part of the acquisition of Aurora Commons Shopping Center, the Company
assumed the existing mortgage loan, maturing December 31, 2001, with the
balance funded with cash and cash equivalents. The loan bears interest at
a rate of 9% per annum with monthly payments of principal and interest on
the first day of each month.
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Aurora Commons
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income.................... $1,314,448 - 1,341,448
Additional rental income......... 534,247 - 534,247
----------- ----------- -----------
Total income..................... 1,875,695 - 1,875,695
----------- ----------- -----------
Advisor asset management fee..... - 115,000 115,000
Property operating expenses...... 659,205 (27,074) 632,131
Interest expense................. - 882,983 882,983
Depreciation..................... - 334,573 334,573
----------- ----------- -----------
Total expenses................... 659,205 1,193,482 1,964,687
----------- ----------- -----------
Net income (loss)................ $1,216,490 (1,193,482) (88,992)
=========== =========== ===========
F-25
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Acquisition of Lincoln Park Place Shopping Center, Chicago, Illinois
The Company funded the purchase of Lincoln Park Place Shopping Center using
the proceeds of a short-term loan maturing February 7, 1997 in the amount
of $2,016,110 from Inland Mortgage Investment Corporation ("IMIC"), an
affiliate of the Company (the "Short-Term Loan"). The Company did not pay
any fees in connection with the Short-Term Loan, which bears interest at a
rate of 9% per annum.
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Lincoln Park Place
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income.................... $ 228,218 - 228,218
Additional rental income......... 111,997 - 111,997
----------- ----------- -----------
Total income..................... 340,215 - 340,215
----------- ----------- -----------
Advisor asset management fee..... - 21,000 21,000
Property operating expenses...... 130,176 - 130,176
Interest expense................. - 181,450 181,450
Depreciation..................... - 42,260 42,260
Amortization..................... - 3,600 3,600
----------- ----------- -----------
Total expenses................... 130,176 248,310 378,486
----------- ----------- -----------
Net income (loss)................ $ 210,039 (248,310) (38,271)
=========== =========== ===========
Acquisition of Niles Shopping Center, Niles, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Niles Shopping Center
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income.................... $ 375,349 - 375,349
Additional rental income......... 104,619 - 104,619
----------- ----------- -----------
Total income..................... 479,968 - 479,968
----------- ----------- -----------
Advisor asset management fee..... - 32,800 32,800
Property operating expenses...... 141,974 - 141,974
Depreciation..................... - 81,600 81,600
----------- ----------- -----------
Total expenses................... 141,974 114,400 256,374
----------- ----------- -----------
Net income (loss)................ $ 337,995 (114,400) 223,594
=========== =========== ===========
F-26
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Acquisition of Cobblers Mall, Elgin, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Cobblers Mall
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income.................... $1,014,342 - 1,014,342
Additional rental income......... 376,560 - 376,560
----------- ----------- -----------
Total income..................... 1,390,902 - 1,390,902
----------- ----------- -----------
Advisor asset
management fee................. - 109,530 109,530
Property operating
expenses....................... 548,023 - 548,023
Depreciation..................... - 273,825 273,825
----------- ----------- -----------
Total expenses................... 548,023 383,355 931,378
----------- ----------- -----------
Net income (loss)................ $ 842,879 (383,355) 459,524
=========== =========== ===========
Acquisition of Mallard Mall, Elk Grove Village, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Mallard Mall
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income.................... $ 992,972 - 992,972
Additional rental income......... 412,024 - 412,024
----------- ----------- -----------
Total income..................... 1,404,996 - 1,404,996
----------- ----------- -----------
Advisor asset
management fee................. - 80,999 80,999
Property operating
expenses....................... 420,090 - 420,090
Depreciation..................... - 202,498 202,498
----------- ----------- -----------
Total expenses................... 420,090 283,497 703,587
----------- ----------- -----------
Net income (loss)................ $ 984,906 (283,497) 701,409
=========== =========== ===========
F-27
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Acquisition of Calumet Square Shopping Center, Calumet City, Illinois
This pro forma adjustment reflects the purchase of Calumet Square as if the
Company had acquired the property as of January 1, 1996 and is based on
information provided by the Seller.
Calumet Square
-------------------------------------
Year ended
December 31, Pro Forma
1996 Adjustments Total
----------- ----------- -----------
Rental income............. $ 222,072 - 222,072
Additional rental income.. 179,854 - 179,854
----------- ----------- -----------
Total income.............. 401,926 - 401,926
----------- ----------- -----------
Advisor asset
management fee.......... - 21,080 21,080
Property operating
expenses................ 214,748 - 214,748
Depreciation.............. - 52,700 52,700
----------- ----------- -----------
Total expenses............ 214,748 73,780 288,528
----------- ----------- -----------
Net income (loss)......... $ 187,178 (73,780) 113,398
=========== =========== ===========
Acquisition of Ameritech Outlot, Joliet, Illinois
This pro forma adjustment reflects the purchase of Ameritech as if the
Company had acquired the property as of January 1, 1996 and is based on
information provided by the Seller.
Ameritech Outlot
-------------------------------------
Year ended
December 31, Pro Forma
1996 Adjustments Total
----------- ----------- -----------
Rental income............. $ 106,283 - 106,283
Additional rental income.. 18,265 - 18,265
----------- ----------- -----------
Total income.............. 124,548 - 124,548
----------- ----------- -----------
Advisor asset
management fee.......... - 10,500 10,500
Property operating
expenses................ 18,500 - 18,500
Depreciation.............. - 26,250 26,250
----------- ----------- -----------
Total expenses............ 18,500 36,750 55,250
----------- ----------- -----------
Net income (loss)......... $ 106,048 (36,750) 69,298
=========== =========== ===========
F-28
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Acquisition of Dominicks, Schaumburg, Illinois
This pro forma adjustment reflects the purchase of Schaumburg Dominicks as
if the Company had acquired the property as of June 1, 1996, the date
operations commenced and is based on information provided by the Seller.
Schaumburg Dominicks
-------------------------------------
Year ended
December 31, Pro Forma
1996 Adjustments Total
----------- ----------- -----------
Rental income............. $ 646,825 - 646,825
Additional rental income.. - - -
----------- ----------- -----------
Total income.............. 646,825 - 646,825
----------- ----------- -----------
Advisor asset
management fee.......... - 106,910 106,910
Property operating
expenses................ 12,937 - 12,937
Depreciation.............. - 267,000 267,000
----------- ----------- -----------
Total expenses............ 12,937 373,910 386,847
----------- ----------- -----------
Net income (loss)......... $ 633,888 (373,910) 259,978
=========== =========== ===========
Acquisition of Sequoia Plaza, Milwaukee, Wisconsin
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1996 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Sequoia Plaza
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 361,986 - 361,986
Additional rental income.. 135,404 - 135,404
----------- ----------- -----------
Total income.............. 497,390 - 497,390
----------- ----------- -----------
Advisor asset
management fee.......... - 30,100 30,100
Property operating
expenses................ 164,126 - 164,126
Depreciation.............. - 75,250 75,250
----------- ----------- -----------
Total expenses............ 164,126 105,350 269,476
----------- ----------- -----------
Net income (loss)......... $ 333,264 (105,350) 227,914
=========== =========== ===========
F-29
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
Acquisition of Dominicks, Highland Park, Illinois
This pro forma adjustment reflects the purchase of Highland Park Dominicks
as if the Company had acquired the property as of May 1, 1996, the date
operations commenced and is based on information provided by the Seller.
Highland Park Dominicks
-------------------------------------
Year ended
December 31, Pro Forma
1996 Adjustments Total
----------- ----------- -----------
Rental income............. $ 883,976 - 883,976
Additional rental income.. - - -
----------- ----------- -----------
Total income.............. 883,976 - 883,976
----------- ----------- -----------
Advisor asset
management fee.......... - 128,000 128,000
Property operating
expenses................ 17,680 - 17,680
Depreciation.............. - 320,000 320,000
----------- ----------- -----------
Total expenses............ 17,680 448,000 465,680
----------- ----------- -----------
Net income (loss)......... $ 866,296 (448,000) 418,296
=========== =========== ===========
Acquisition of River Square, Naperville, Illinois
This pro forma adjustment reflects the purchase of Highland Park Dominicks
as if the Company had acquired the property as of May 1, 1996, the date
operations commenced and is based on information provided by the Seller.
River Square
-----------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 619,034 - 619,034
Additional rental income.. 253,031 - 253,031
----------- ----------- -----------
Total income.............. 872,065 - 872,065
----------- ----------- -----------
Advisor asset
management fee.......... - 60,500 60,500
Property operating
expenses................ 362,348 - 362,348
Depreciation.............. - 151,250 151,250
----------- ----------- -----------
Total expenses............ 362,348 211,750 574,098
----------- ----------- -----------
Net income (loss)......... $ 509,717 (211,750) 297,967
=========== =========== ===========
F-30
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1996
(unaudited)
(E) No pro forma adjustment has been made relating to interest income which
would have been earned on the additional Offering Proceeds raised.
(F) Depreciation expense is computed using the straight-line method, based upon
an estimated useful life of thirty years.
(G) The pro forma weighted average common stock shares for the year ended
December 31, 1996 was calculated by estimating the additional shares sold
to purchase each of the Company's properties on a weighted average basis.
(H) Loan fees are amortized over the term of the related loan.
(I) Advisor Asset Management Fees are calculated as 1% of the Average Invested
Assets (as defined).
F-31
