As filed with the Securities and Exchange Commission on March 31, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: February 5, 1999
(Date of earliest event reported)
Inland Real Estate Corporation
(Exact name of registrant as specified in the charter)
Maryland 0-28382 36-3953261
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
2901 Butterfield Road
Oak Brook, Illinois 60523
(Address of Principal Executive Offices)
(630) 218-8000
(Registrant's telephone number including area code)
Not Applicable
(Former name or former address, if changed since last report)
-1-
Item 2. Acquisition or Disposition of Assets
We filed a Form 8-K on February 5, 1999 and a Form 8-K on February 24, 1999,
both without the requisite financial information. Accordingly, We are is
filing this Form 8-K/A. In addiiton, since our last Form 8-K filing on
February 24, 1999, we have acquired three additional properties.
Supervalue - Plymouth, Plymouth, Minnesota
On March 9, 1999, we purchased the entire fee simple interest in a single-user
retail center located at 3550 Vicksburg Lane North in Plymouth, Minnesota known
as "Supervalue - Plymouth." We purchased Supervalue - Plymouth from Corporate
Office Properties Trust, an unaffiliated third party, for approximately
$5,465,000 or approximately $80.95 per square foot. We paid the purchase price
for this property using cash and cash equivalents. We believe the purchase
price was fair and reasonable based on, among other things, an appraisal from a
third party that we received and presented to our board of directors.
Supervalue - Plymouth, built in 1991, is a one-story, single-user retail
center. Supervalue - Plymouth contains 67,510 leasable square feet. As of
March 30, 1999, Supervalue - Plymouth was 100% leased. We considered a variety
of factors including location, demographics, tenant mix, price per square foot,
existing rental rates compared to market rates, and occupancy rates. We
believe that the center is located within a vibrant economic area.
We do not anticipate making any significant repairs and improvements to
Supervalue - Plymouth over the next few years. However, if we were to make any
repairs or improvements, pursuant to the lease, the center's tenant would be
obligated to pay a substantial portion of any monies spent on repairs and
improvements.
The table below sets forth the occupancy rate at Supervalue - Plymouth
expressed as a percentage of total gross leasable area and the average annual
base rent per square foot:
Occupancy Rate Effective
as of Annual Rental
December 31, Rate Per Leasable
Year Ending of Each Year Square Ft
December 31, (%) ($)
------------ ------------ -------------
1998 100% 7.74
1997 100% 7.74
1996 100% 7.74
1995 100% 7.74
1994 100% 7.74
-2-
One tenant, Cub Foods, a grocery store, leases 100% of the total gross leasable
area of the property. This lease requires the tenant to pay base annual rent
on a monthly basis as follows:
Base Rent
Per Square
Approximate Foot Per
GLA % of Total Annum Lease Term
Lessee Leased GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Cub Foods 67,510 100 7.74 Current 03/06
For federal income tax purposes, our depreciable basis in Supervalue - Plymouth
will be approximately $4,100,000. When we calculate depreciation expense, for
tax purposes, we will use the straight-line method. We depreciate buildings
and improvements based upon estimated useful lives of 40 years.
On March 30, 1999, a total of 67,510 square feet was leased to one tenant at
Supervalue - Plymouth. The following tables set forth information with respect
to the lease at this single-user retail center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Cub Foods 67,510 03/06 - 522,813 7.74
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- - ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999-
2008 - - - 522,813 - - -
(1) We made no assumptions regarding the re-leasing of expired leases. It is the opinion of
our management that the space will be re-leased at market rates at the time of re-leasing.
</TABLE>
We received a letter appraisal prepared by an independent appraiser who is a
member in good standing of the American Institute of Real Estate Appraisers.
The appraisal reported a fair market value for the Supervalue - Plymouth
property, as of December 15, 1998, of $5,700,000. You should note that
appraisals are estimates of value and, therefore, you should not rely upon them
as a measure of true worth or realizable value.
-3-
Supervalue - Indianapolis, Indianapolis, Indiana
On March 9, 1999, we purchased the entire fee simple interest in a single-user
retail center located at 5835 West 10th Street in Indianapolis, Indiana known
as "Supervalue - Indianapolis." We purchased Supervalue - Indianapolis from
Corporate Office Properties Trust, an unaffiliated third party, for
approximately $5,734,000 or approximately $84.90 per square foot. We paid the
purchase price for this property using cash and cash equivalents. We believe
the purchase price was fair and reasonable based on, among other things, an
appraisal from a third party that we received and presented to our board of
directors.
Supervalue - Indianapolis, built in 1991, is a one-story, single-user retail
center. Supervalue - Indianapolis contains 67,541 leasable square feet. As of
March 30, 1999, Supervalue - Indianapolis was 100% leased. We considered a
variety of factors including location, demographics, tenant mix, price per
square foot, existing rental rates compared to market rates, and occupancy
rates. We believe that the center is located within a vibrant economic area.
We do not anticipate making any significant repairs and improvements to
Supervalue - Indianapolis over the next few years. However, if we were to make
any repairs or improvements, pursuant to the lease, the center's tenant would
be obligated to pay a substantial portion of any monies spent on repairs and
improvements.
The table below sets forth the occupancy rate at Supervalue - Indianapolis
expressed as a percentage of total gross leasable area and the average annual
base rent per square foot:
Occupancy Rate Effective
as of Annual Rental
December 31, Rate Per Leasable
Year Ending of Each Year Square Ft
December 31, (%) ($)
------------ ------------ -------------
1998 100% 8.12
1997 100% 8.12
1996 100% 8.12
1995 100% 8.12
1994 100% 8.12
One tenant, Cub Foods, a grocery store, leases 100% of the total gross leasable
area of the property. This lease requires the tenant to pay base annual rent
on a monthly basis as follows:
Base Rent
Per Square
Approximate Foot Per
GLA % of Total Annum Lease Term
Lessee Leased GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Cub Foods 67,541 100 8.12 Currently 11/11
-4-
For federal income tax purposes, our depreciable basis in Supervalue -
Indianapolis will be approximately $4,300,000. When we calculate depreciation
expense, for tax purposes, we will use the straight-line method. We depreciate
buildings and improvements based upon estimated useful lives of 40 years.
On March 30, 1999, a total of 67,541 square feet was leased to one tenant at
Supervalue - Indianapolis. The following tables set forth information with
respect to the lease at this single-user retail center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Cub Foods 67,541 11/11 - 548,196 8.12
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- - ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999-
2008 - - - 548,196 - - -
(1) We made no assumptions regarding the re-leasing of expired leases. It is the opinion of
our management that the space will be re-leased at market rates at the time of re-leasing.
</TABLE>
We received a letter appraisal prepared by an independent appraiser who is a
member in good standing of the American Institute of Real Estate Appraisers.
The appraisal reported a fair market value for the Supervalue - Indianapolis
property, as of January 1, 1999, of $5,800,000. You should note that
appraisals are estimates of value and, therefore, you should not rely upon them
as a measure of true worth or realizable value.
Gateway Square, Hinsdale, Illinois
On March 17, 1999, we purchased the entire fee simple interest in a
Neighborhood Retail Center located at 777 North York Road in Hinsdale, Illinois
known as "Gateway Square." We purchased Gateway Square from Aetna Real Estate
Associates, L.P., an unaffiliated third party, for approximately $6,940,000 or
approximately $172.85 per square foot. We paid the purchase price for this
property using cash and cash equivalents. We believe the purchase price was
fair and reasonable based on, among other things, an appraisal from a third
party that we received and presented to our board of directors.
-5-
Gateway Square, built in 1985, is a one-story, multi-tenant retail facility.
Gateway Square contains 40,150 leasable square feet. As of March 30, 1999,
Gateway Square was 96% leased. We considered a variety of factors including
location, demographics, tenant mix, price per square foot, existing rental
rates compared to market rates, and occupancy rates. We believe that the
center is located within a vibrant economic area.
We do not anticipate making any significant repairs and improvements to Gateway
Square over the next few years. However, if we were to make any repairs or
improvements, pursuant to the leases, the center's tenants would be obligated
to pay a substantial portion of any monies spent on repairs and improvements.
The table below sets forth the occupancy rate at Gateway Square expressed as a
percentage of total gross leasable area and the average annual base rent per
square foot:
Occupancy Rate Effective
as of Annual Rental
December 31, Rate Per Leasable
Year Ending of Each Year Square Ft
December 31, (%) ($)
------------ ------------ -------------
1998 96 17.69
1997 89 17.86
1996 97 16.79
1995 91 18.76
1994 97 17.46
One tenant, Calico Corners, a fabric store, leases more than 10% of the total
gross leasable area of the property. This lease requires the tenant to pay
base annual rent on a monthly basis as follows:
Base Rent
Per Square
Approximate Foot Per
GLA % of Total Annum Lease Term
Lessee Leased GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Calico Corners 5,046 12 14.25 Currently 12/00
For federal income tax purposes, our depreciable basis in Gateway Square will
be approximately $5,200,000. When we calculate depreciation expense, for tax
purposes, we will use the straight-line method. We depreciate buildings and
improvements based upon estimated useful lives of 40 years.
Real estate taxes payable in 1998 for the tax year ended 1998 are $79,499. The
real estate taxes payable were calculated by multiplying the assessed value by
a tax rate of .
-6-
On March 30, 1999, a total of 38,430 square feet was leased to nineteen tenants
at Gateway Square. The following tables set forth information with respect to
the amount of and expiration of the leases at this Neighborhood Retail Center:
Approximate Current Rent per
GLA Lease Renewal Annual Rent Square Foot
Lessee Leased Ends Option ($) ($)
------ ---------- ----- ------ ----------- -----------
Wolf Camera 2,300 08/02 1/5 yr. 55,200 24.00
Prime 'N Tender
Meats 1,340 12/01 - 29,145 21.75
Luv It 2,680 07/02 - 54,082 20.18
Gateway Cleaners 1,340 07/99 1/5 yr. 30,766 22.96
Avenue Eyewear 1,340 11/00 - 28,810 21.50
Present Dreams 1,054 09/01 - 22,239 21.10
TCBY Yogurt 1,043 09/99 - 24,417 23.41
Corner Cafe' &
Bakery 703 08/99 - 16,303 23.19
Hinsdale Clothiers 2,747 06/01 - 56,698 20.64
Roecker Cabinets 1,340 09/01 1/3 yr. 18,760 14.00
Sweet Thoughts 1,340 10/03 1/5 yr. 21,440 16.00
Gazebo Hair Design 3,020 05/00 1/5 yr. 53,454 17.70
Hua Ting Restaurant 2,650 12/03 1/5 yr. 45,395 17.13
Duck, Duck, Goose! 2,345 04/04 - 42,210 18.00
Pendleton 1,675 07/03 - 16,750 10.46
Egg Harbor Cafe' 3,977 02/01 1/5 yr. 79,540 20.00
Julia LTD 850 01/01 1/3 yr. 17,637 20.73
Calico Corners 5,046 12/00 - 71,906 14.25
J.S. Lizzadro
Jewelers 1,640 12/01 1/5 yr. 36,277 22.12
Vacant 1,720
-7-
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- - ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999 3 3,086 71,482 723,364 23.16 7.69 9.88
2000 3 9,406 154,169 660,810 16.39 23.43 23.33
2001 7 12,948 266,066 512,395 20.55 32.25 51.93
2002 2 4,980 110,059 248,004 22.10 12.40 44.38
2003 3 5,685 94,290 138,845 16.59 14.16 67.91
2004 1 2,345 44,555 44,555 19.00 5.84 100.00
2005-
2008 - - - - - - -
(1) We made no assumptions regarding the re-leasing of expired leases. It is the opinion of
our management that the space will be re-leased at market rates at the time of re-leasing.
</TABLE>
We received an appraisal prepared by an independent appraiser who is a member
in good standing of the American Institute of Real Estate Appraisers. The
appraisal reported a fair market value for the Gateway Square property, as of
January 29, 1999, of $7,600,000. You should note that appraisals are estimates
of value and, therefore, you should not rely upon them as a measure of true
worth or realizable value.
-8-
Item 7. Financial Statements and Exhibits
Index to Financial Statements
Page
Pro Forma Consolidated Balance Sheet (unaudited)
at September 30, 1998............................................. F- 1
Notes to Pro Forma Consolidated Balance Sheet (unaudited)
at September 30, 1998............................................. F- 3
Pro Forma Consolidated Statement of Operations (unaudited)
of the Company for the nine months ended September 30, 1998....... F- 9
Notes to Pro Forma Consolidated Statement of Operations (unaudited)
for the nine months ended September 30, 1998...................... F-11
Pro Forma Consolidated Statement of Operations (unaudited)
of the Company for the year ended December 31, 1997............... F-18
Notes to Pro Forma Consolidated Statement of Operations (unaudited)
for the year ended December 31, 1997.............................. F-20
Woodland Commons
Independent Auditors' Report........................................ F-51
Historical Summary of Gross Income and Direct Operating Expenses
for the year ended December 31, 1998 of Woodland Commons.......... F-52
Notes to the Historical Summary of Gross Income and Direct
Operating Expenses for the year ended December 31, 1998 of
Woodland Commons.................................................. F-53
Gateway Square Shopping Center
Independent Auditors' Report........................................ F-55
Historical Summary of Gross Income and Direct Operating Expenses
for the year ended December 31, 1998 of
Gateway Square Shopping Center.................................... F-56
Notes to the Historical Summary of Gross Income and Direct
Operating Expenses for the year ended December 31, 1998 of
Gateway Square Shopping Center.................................... F-57
-9-
SIGNATURE
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: March 31, 1999
-10-
Inland Real Estate Corporation
Pro Forma Consolidated Balance Sheet
September 30, 1998
(unaudited)
The following unaudited Pro Forma Consolidated Balance Sheet of the Company is
presented to give effect to the acquisitions of the properties indicated in
Note B of the Notes to the Pro Forma Consolidated Balance Sheet as though these
transactions occurred September 30, 1998. No Pro Forma adjustment was made for
the Staples Office Supply Store which was under construction at September 30,
1998 and the Circuit City-Traverse property which was constructed in 1998 and
significant operations had not commenced as of September 30, 1998. This
unaudited Pro Forma Consolidated Balance Sheet should be read in conjunction
with the September 30, 1998 Financial Statements and the notes thereto as filed
on Form 10-Q.
This unaudited Pro Forma Consolidated Balance Sheet is not necessarily
indicative of what the actual financial position would have been at September
30, 1998, 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
Inland Real Estate Corporation
Pro Forma Consolidated Balance Sheet
September 30, 1998
(unaudited)
September 30, September 30,
1998 Pro Forma 1998
Historical(A) Adjustments(B) Pro Forma
------------- ------------- --------------
Assets
- - ------
Net investment in
properties.................. $473,880,017 226,883,000 700,763,017
Cash and cash equivalents..... 106,277,855 (52,000) 106,225,855
Restricted cash............... 13,303,842 - 13,303,842
Accounts and rents
receivable.................. 10,935,833 1,816,480 12,752,313
Other assets.................. 9,891,843 188,688 10,080,531
------------- ------------- -------------
Total assets.................. $614,289,390 228,836,168 843,125,558
============= ============= =============
Liabilities and Stockholders' Equity
- - ------------------------------------
Accounts payable and accrued
expenses.................... $ 1,733,869 - 1,733,869
Accrued real estate taxes..... 12,859,623 2,032,498 14,892,121
Distributions payable (C)..... 3,345,717 - 3,345,717
Security deposits............. 1,282,675 380,788 1,663,463
Mortgages payable............. 178,106,593 29,929,000 208,035,593
Unearned income............... 1,263,271 - 1,263,271
Other liabilities............. 2,297,130 - 2,297,130
Due to Affiliates............. 820,632 - 820,632
------------- ------------- -------------
Total liabilities............. 201,709,510 32,342,286 234,051,796
------------- ------------- -------------
Minority interest (E)......... - 5,214,688 5,214,688
Common Stock (D).............. 467,923 202,197 670,120
Additional paid in capital
(net of Offering costs) (D). 426,379,560 191,076,997 617,456,557
Accumulated distributions in
excess of net income........ (14,267,603) - (14,267,603)
------------- ------------- -------------
Total Stockholders' equity.... 412,579,880 191,279,194 603,859,074
------------- ------------- -------------
Total liabilities and
Stockholders' equity........ $614,289,390 228,836,168 843,125,558
============= ============= =============
See accompanying notes to pro forma balance sheet.
F-2
<TABLE> Inland Real Estate Corporation
Notes to Pro Forma Consolidated Balance Sheet
(continued)
September 30, 1998
(unaudited)
(A) The September 30, 1998 Historical column represents the historical balance sheet as presented in
the September 30, 1998 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 September 30, 1998. The terms are described in the notes that
follow.
<CAPTION>
Pro Forma Adjustments
-----------------------------------------------------------------------------
Woodfield Edinburgh Springboro Riverplace Rose
Two Rivers Commons Festival Plaza Center Plaza
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C>
Assets
- - ------
Net investment in
properties................ 6,770,000 $27,000,000 9,107,000 9,295,000 6,065,000 2,753,000
Accounts and rents
receivable................ 18,300 352,000 - 90,500 78,500 59,000
------------ ------------ ------------ ------------ ------------ ------------
Total assets................ 6,788,300 $27,352,000 9,107,000 9,385,500 6,143,500 2,812,000
============ ============ ============ ============ ============ ============
Liabilities and Stockholders' Equity
- - ------------------------------------
Accrued real estate taxes... 18,300 374,750 - 90,500 78,500 59,000
Security deposits........... 6,666 100,355 8,402 6,134 11,924 -
Mortgage payable............ - - 4,625,000 - - -
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities........... 24,966 475,105 4,633,402 96,634 90,424 59,000
------------ ------------ ------------ ------------ ------------ ------------
Common Stock................ 7,149 28,411 4,729 9,819 6,399 2,910
Additional paid in capital
(net of Offering Costs)... 6,756,185 26,848,484 4,468,869 9,279,047 6,046,677 2,750,090
------------ ------------ ------------ ------------ ------------ ------------
Total Stockholders' equity.. 6,763,334 26,876,895 4,473,598 9,288,866 6,053,076 2,753,000
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities and
Stockholders' equity...... 6,788,300 $27,352,000 9,107,000 9,385,500 6,143,500 2,812,000
============ ============ ============ ============ ============ ============
F-3
F-3
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Balance Sheet
(continued)
September 30, 1998
(unaudited)
Pro Forma Adjustments
-----------------------------------------------------------------------------
Marketplace
at Six CarMax CarMax Park Hollywood Plymouth
Corners Tinley Park Schaumburg Center Video Collection
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Assets
- - ------
Net investment in
properties................ 18,875,000 18,900,000 20,600,000 15,500,000 1,351,000 6,626,000
Accounts and rents
receivable................ 172,000 - - 489,880 - -
------------ ------------ ------------ ------------ ------------ ------------
Total assets................ 19,047,000 18,900,000 20,600,000 15,989,880 1,351,000 6,626,000
============ ============ ============ ============ ============ ============
Liabilities and Stockholders' Equity
- - ------------------------------------
Accrued real estate taxes... 176,000 - - 662,000 - -
Security deposits........... - - - 43,317 - 14,250
Mortgage payable............ - - - - - -
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities........... 176,000 - - 705,317 - 14,250
------------ ------------ ------------ ------------ ------------ ------------
Common Stock................ 19,948 19,979 21,776 16,157 1,428 6,989
Additional paid in capital
(net of Offering Costs)... 18,851,052 18,880,021 20,578,224 15,268,406 1,349,572 6,604,761
------------ ------------ ------------ ------------ ------------ ------------
Total Stockholders' equity.. 7,671,000 18,900,000 20,600,000 15,284,563 1,351,000 6,611,750
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities and
Stockholders' equity...... 19,047,000 18,900,000 20,600,000 15,989,880 1,351,000 6,626,000
============ ============ ============ ============ ============ ============
F-4
F-4
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Balance Sheet
(continued)
September 30, 1998
(unaudited)
Pro Forma Adjustments
-----------------------------------------------------------------------------
Loehmann's Baytowne Woodland Supervalue Supervalue
Plaza Shoppes Commons Plymouth Indianapolis Gateway
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Assets
- - ------
Net investment in
properties................ 13,565,000 12,655,000 20,036,000 5,464,000 5,734,000 6,940,000
Accounts and rents
receivable................ 125,900 145,900 228,000 - - 56,500
------------ ------------ ------------ ------------ ------------ ------------
Total assets................ 13,690,900 12,800,900 20,264,000 5,464,000 5,734,000 6,996,500
============ ============ ============ ============ ============ ============
Liabilities and Stockholders' Equity
- - ------------------------------------
Accrued real estate taxes... 125,900 150,400 237,525 - - 59,623
Security deposits........... 8,960 7,062 118,621 - - 55,097
Mortgage payable............ - - 10,735,000 - - -
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities........... 134,860 157,462 11,091,146 - - 114,720
------------ ------------ ------------ ------------ ------------ ------------
Common Stock................ 14,330 13,365 9,696 5,776 6,061 7,275
Additional paid in capital
(net of Offering Costs)... 13,541,710 12,630,073 9,163,158 5,458,224 5,727,939 6,874,505
------------ ------------ ------------ ------------ ------------ ------------
Total Stockholders' equity.. 13,556,040 12,643,438 9,172,854 5,464,000 5,734,000 6,881,780
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities and
Stockholders' equity...... 13,690,900 12,800,900 20,264,000 5,464,000 5,734,000 6,996,500
============ ============ ============ ============ ============ ============
F-5
F-5
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Balance Sheet
(continued)
September 30, 1998
(unaudited)
Pro Forma Adjustments
-------------------------
Total
Joliet Pro Forma
Commons Adjustments
------------ ------------
<S> <C> <C>
Assets
- - ------
Net investment in
properties................ 19,647,000 226,883,000
Cash and cash equivalents... (52,000) (52,000)
Accounts and rents
receivable................ - 1,816,480
Other assets................ 188,688 188,688
------------ -----------
Total assets................ 19,783,688 228,836,168
============ ===========
Liabilities and Stockholders' Equity
- - ------------------------------------
Accrued real estate taxes... - 2,032,498
Security deposits........... - 380,788
Mortgage payable............ 14,569,000 29,929,000
------------ -----------
Total liabilities........... 14,569,000 32,342,286
------------ -----------
Minority interest........... 5,214,688 5,214,688
Common Stock................ - 202,197
Additional paid in capital
(net of Offering Costs)... - 191,076,997
------------ -----------
Total Stockholders' equity.. - 191,279,194
------------ -----------
Total liabilities and
Stockholders' equity...... 19,783,688 228,836,168
============ ===========
</TABLE>
F-6
F-6
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Balance Sheet
(continued)
September 30, 1998
(unaudited)
Acquisitions of Property:
On October 1, 1998, the Company acquired Two Rivers from an unaffiliated
third party for the purchase price of approximately $6,770,000 on an all
cash basis, funded from cash and cash equivalents.
On October 8, 1998, the Company acquired Woodfield Commons from an
unaffiliated third party for the purchase price of approximately
$27,000,000 on an all cash basis, funded from cash and cash equivalents.
On October 14, 1998, the Company acquired Edinburgh Festival Center from an
unaffiliated third party for the purchase price of approximately
$9,107,000. As part of the acquisition, the Company assumed an existing
first mortgage with a balance of $4,625,000. The balance of the purchase
price was funded from cash and cash equivalents.
On November 12, 1998, the Company acquired Springboro Plaza from an
unaffiliated third party for the purchase price of approximately $9,295,000
on an all cash basis, funded from cash and cash equivalents.
On November 12, 1998, the Company acquired Riverplace Center from an
unaffiliated third party for the purchase price of approximately $6,065,000
on an all cash basis, funded from cash and cash equivalents.
On November 16, 1998, the Company acquired Rose Plaza from an unaffiliated
third party for the purchase price of approximately $2,753,000 on an all
cash basis, funded from cash and cash equivalents.
On November 30, 1998, the Company acquired Marketplace at Six Corners from
an unaffiliated third party for the purchase price of approximately
$18,875,000 on an all cash basis, funded from cash and cash equivalents.
On December 2, 1998, the Company acquired Carmax-Tinley Park from an
unaffiliated third party for the purchase price of approximately
$18,900,000 on an all cash basis, funded from cash and cash equivalents.
On December 2, 1998, the Company acquired Carmax-Schaumburg from an
unaffiliated third party for the purchase price of approximately
$20,600,000 on an all cash basis, funded from cash and cash equivalents.
On December 4, 1998, the Company acquired Park Center from an unaffiliated
third party for the purchase price of approximately $15,500,000 on an all
cash basis, funded from cash and cash equivalents.
On December 18, 1998, the Company acquired Hollywood Video-Hammond from an
unaffiliated third party for the purchase price of approximately $1,351,000
on an all cash basis, funded from cash and cash equivalents.
F-7
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Balance Sheet
(continued)
September 30, 1998
(unaudited)
On January 6, 1999, the Company acquired Plymouth Collection from an
unaffiliated third party for the purchase price of approximately $6,626,000
on an all cash basis, funded from cash and cash equivalents.
On February 1, 1999, the Company acquired Loehmann's Plaza from an
unaffiliated third party for the purchase price of approximately
$13,565,000 on an all cash basis, funded from cash and cash equivalents.
On February 8, 1999, the Company acquired Baytowne Shoppes from an
unaffiliated third party for the purchase price of approximately
$12,655,000 on an all cash basis, funded from cash and cash equivalents.
On February 10, 1999, the Company acquired Woodland Commons from an
unaffiliated third party for the purchase price of approximately
$20,036,000. As part of the acquisition, the Company assumed an existing
first mortgage with a balance of approximately $11,470,000. The balance of
the purchase price was funded from cash and cash equivalents.
On March 9, 1999, the Company acquired Supervalue - Plymouth from an
unaffiliated third party for the purchase price of approximately $5,464,000
on an all cash basis, funded from cash and cash equivalents.
On March 9, 1999, the Company acquired Supervalue - Indianapolis from an
unaffiliated third party for the purchase price of approximately $5,734,000
on an all cash basis, funded from cash and cash equivalents.
On March 17, 1999, the Company acquired Gateway from an unaffiliated third
party for the purchase price of approximately $6,940,000 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 $202,197,000, net of additional Offering
costs of $10,917,806 are reflected as received as of September 30, 1998,
prior to the purchase of the properties. Offering costs consist
principally of registration costs, printing and selling costs, including
commissions.
(E) The consolidated financial statements include the accounts of the Company
and the limited liability company ("LLC") which owns the Joliet Commons
Shopping Center. The Company entered into an LLC with an unaffiliated third
party (the "Seller") for the purchase of Joliet Commons. The transaction
was structured such that the Company contributed approximately $52,000 for
a 1% interest in an LLC and the Seller contributed a property with a value
of approximately $19,733,000 and debt of approximately $14,569,000 to the
LLC for a 99% interest. The Company is the managing member of the LLC. Due
to the Company's ability as managing member to directly control the LLC, it
is consolidated for financial reporting purposes. The Seller's interest is
reflected as a minority interest in the accompanying consolidated financial
statements.
F-8
Inland Real Estate Corporation
Pro Forma Consolidated Statement of Operations
For the nine months ended September 30, 1998
(unaudited)
The following unaudited Pro Forma Consolidated Statement of Operations of the
Company is presented to effect the acquisitions of the properties indicated in
Note B of the Notes to the Pro Forma Consolidated Statement of Operations as
though they occurred on the earlier of January 1, 1997 or the date operations
commenced. Pro forma adjustments for Oak Forest Commons, Downers Grove Market
and Hollywood Video-Hammond are as of March 5, 1998, March 25, 1998, and May 1,
1998, respectively, as these are the dates that operations commenced.
Construction was completed in the third quarter of 1998 for Carmax-Tinley Park,
Carmax-Schaumburg, Plymouth Collection and Circuit City-Traverse and
significant operations had not commenced. Therefore no pro forma adjustments
were made for these centers. Construction was not completed on the Staples
Office Supply Store and therefore, no pro forma adjustment has been made. This
unaudited Pro Forma Consolidated Statement of Operations should be read in
conjunction with the September 30, 1998 Financial Statements and the notes
thereto as filed on Form 10-Q.
This unaudited Pro Forma Consolidated Statement of Operations is not
necessarily indicative of what the actual results of operations would have been
for the nine months ended September 30, 1998, 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 Consolidated Statement of Operations
For the nine months ended September 30, 1998
(unaudited)
September 30,
1998 Pro Forma September 30,
Historical Adjustments 1998
(A) (B) Pro Forma
------------ ------------ -----------
Rental income..... $34,964,084 17,649,758 52,613,842
Additional rental
income.......... 11,767,354 6,504,035 18,271,389
Interest
income(C)....... 3,270,815 - 3,270,815
Other income...... 115,432 - 115,432
------------ ------------ ------------
Total income.... 50,117,685 24,153,792 74,271,478
------------ ------------ ------------
Professional services
and general and
administrative
fees............ 557,689 - 557,689
Advisor asset
management fee.(F) 1,252,815 1,746,220 2,999,035
Property operating
expenses........ 15,022,998 7,858,376 22,881,374
Interest expense.. 8,570,847 1,789,550 10,360,397
Depreciation (D).. 8,087,624 4,631,297 12,718,921
Amortization...... 157,892 - 157,892
Acquisition costs
expensed........ 212,129 - 212,129
------------ ------------ ------------
Total expenses.... 33,861,994 16,025,442 49,887,437
------------ ------------ ------------
16,255,691 8,128,350 24,384,041
Minority interest
in earnings (G). - 5,755 5,755
------------ ------------ ------------
Net income........ $16,255,691 8,122,595 24,378,286
============ ============ ============
Weighted average
common stock
outstanding (E). 36,811,187 57,030,887
============ ============
Net income per weighted
average common stock
outstanding, basic and
diluted (E)..... $ .44 .43
============ ============
See accompanying notes to pro forma consolidated statement of operations.
F-10
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
For the nine months ended September 30, 1998
(unaudited)
(A) The 1998 Historical column represents the historical statement of
operations of the Company for the nine months ended September 30, 1998
(unaudited), as filed with the SEC on Form 10-Q.
(B) Total pro forma adjustments for the nine months ended September 30, 1998
are as though the acquisitions of the following properties occurred the
earlier of January 1, 1997 or the date operations commenced and are based
on information provided by the seller. All properties were purchased on an
all cash basis except for Mill Creek, Schaumburg Plaza, Edinburgh Festival
and Woodland Commons. Pro forma adjustments for interest expense on these
properties were based on the following terms.
Mill Creek Shopping Center
As part of the acquisition of Mill Creek Shopping Center, the Company
assumed the existing mortgage loan of $9,500,000, maturing September 10,
1999, with the balance funded with cash and cash equivalents. The loan
requires interest only monthly payments at a rate of 8% per annum.
Schaumburg Plaza
As part of the acquisition of Schaumburg Plaza, the Company assumed the
existing debt of $3,924,183. The debt requires monthly interest only
payments at a rate of 9.25% per annum through September 2004 and then
requires principal and interest payments through December 2009 at a rate of
9.25% per annum based on a 30 year amortization schedule.
Edinburgh Festival
As part of the acquisition of Edinburgh Festival, the Company assumed the
existing first mortgage loan, maturing September 30, 2008, with a balance
of $4,625,000. The loan requires interest only monthly payments at a rate
of 6.30% per annum.
Woodland Commons
As part of the acquisition of Woodland Commons, the Company assumed the
existing first mortgage loan, maturing September 22, 2001, with a balance
of $11,470,000. The loan requires interest only monthly payments at a rate
of 6.24% per annum.
F-11
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the nine months ended September 30, 1998
(unaudited)
(B) Total pro forma adjustments for 1998 acquisitions are as though they were
acquired the earlier of January 1, 1997 or the date operations commenced.
West
Coopers Chicago Maple Lake Park Orland
Grove Dominick's Plaza Plaza Park
----------- ----------- ----------- ----------- -----------
Rental income..... $ 12,649 36,150 30,776 130,540 11,631
Additional rental
income.......... 9,364 - 11,154 49,688 5,600
----------- ----------- ----------- ----------- -----------
Total income...... 22,013 36,150 41,930 180,228 17,231
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 1,271 3,625 2,638 13,452 2,083
Property operating
expenses........ 10,754 1,085 13,041 60,970 7,200
Interest expense.. - - - - -
Depreciation...... 3,213 9,062 6,950 33,000 5,208
----------- ----------- ----------- ----------- -----------
Total expenses.... 15,238 13,772 22,629 107,422 14,492
----------- ----------- ----------- ----------- -----------
Net income (loss). $ 6,775 22,378 19,301 72,806 2,739
=========== =========== =========== =========== ===========
Homewood Wisner Mill Prairie Elmhurst
Plaza Plaza Creek Square City Center
----------- ----------- ----------- ----------- -----------
Rental income..... $ 29,096 29,958 180,896 78,950 84,667
Additional rental
income.......... 22,945 12,915 123,799 29,500 15,971
----------- ----------- ----------- ----------- -----------
Total income...... 52,041 42,873 304,695 108,450 100,637
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 2,812 2,738 18,933 7,750 3,979
Property operating
expenses........ 25,287 14,844 142,668 34,380 23,473
Interest expense.. - - 126,667 - -
Depreciation...... 6,970 6,880 45,417 21,950 9,948
----------- ----------- ----------- ----------- -----------
Total expenses.... 35,069 24,462 333,685 64,080 37,400
----------- ----------- ----------- ----------- -----------
Net income (loss). $ 16,972 18,411 (28,990) 44,370 63,238
=========== =========== =========== =========== ===========
F-12
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the nine months ended September 30, 1998
(unaudited)
St. James Chestnut Bergen Berwyn Western &
Crossing Court Plaza Plaza Howard
----------- ----------- ----------- ----------- -----------
Rental income..... $ 189,704 319,057 490,456 60,841 70,092
Additional rental
income.......... 54,985 82,340 190,947 50,285 24,948
----------- ----------- ----------- ----------- -----------
Total income...... 244,689 401,397 681,403 111,126 95,040
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 18,693 40,360 43,119 6,888 6,377
Property operating
expenses........ 65,996 134,035 227,516 57,382 34,369
Interest expense.. - - - - -
Depreciation...... 46,750 100,900 125,767 17,222 15,942
----------- ----------- ----------- ----------- -----------
Total expenses.... 131,439 275,295 396,402 81,492 56,688
----------- ----------- ----------- ----------- -----------
Net income (loss). $ 113,250 126,102 285,001 29,634 38,352
=========== =========== =========== =========== ===========
High Point Woodland Walgreens Schaumburg
Wauconda Center Heights Woodstock Plaza
----------- ----------- ----------- ----------- -----------
Rental income..... $ 80,746 331,704 342,420 48,013 373,663
Additional rental
income.......... 21,603 78,007 313,058 - 177,341
----------- ----------- ----------- ----------- -----------
Total income...... 102,349 409,711 655,478 48,013 551,004
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 6,313 32,787 46,400 5,035 34,935
Property operating
expenses........ 26,209 80,420 363,700 - 215,485
Interest expense.. - - - - 180,746
Depreciation...... 22,094 97,672 112,778 10,978 86,667
----------- ----------- ----------- ----------- -----------
Total expenses.... 54,616 210,879 522,878 16,013 517,833
----------- ----------- ----------- ----------- -----------
Net income (loss). $ 47,733 198,832 132,600 32,000 33,171
=========== =========== =========== =========== ===========
F-13
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the nine months ended September 30, 1998
(unaudited)
Winnetka Fairview Orland
Commons Eastgate Heights Greens
----------- ----------- ----------- -----------
Rental income..... $ 225,717 422,415 960,161 331,752
Additional rental
income.......... 161,656 123,597 239,250 446,300
----------- ----------- ----------- -----------
Total income...... 387,373 546,012 1,199,411 778,052
----------- ----------- ----------- -----------
Advisor asset
management fee.. 22,175 38,655 84,300 36,570
Property operating
expenses........ 134,458 148,597 295,680 365,860
Interest expense.. - - - -
Depreciation...... 46,667 86,250 210,769 91,425
----------- ----------- ----------- -----------
Total expenses.... 203,300 273,502 590,749 493,855
----------- ----------- ----------- -----------
Net income (loss). $ 184,073 272,510 608,662 284,197
=========== =========== =========== ===========
Bakers Edinburgh Woodfield Two
Shoes Festival Commons Rivers
----------- ----------- ----------- -----------
Rental income..... $ 75,000 620,500 1,441,375 509,060
Additional rental
income.......... - 277,719 666,497 109,400
----------- ----------- ----------- -----------
Total income...... 75,000 898,219 2,107,872 618,460
----------- ----------- ----------- -----------
Advisor asset
management fee.. 7,568 69,375 202,500 50,775
Property operating
expenses........ 3,375 309,407 768,083 138,290
Interest expense.. - 218,531 - -
Depreciation...... 18,919 173,438 506,250 126,938
----------- ----------- ----------- -----------
Total expenses.... 29,862 770,751 1,476,833 316,003
----------- ----------- ----------- -----------
Net income (loss). $ 45,138 127,468 631,039 302,457
=========== =========== =========== ===========
F-14
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the nine months ended September 30, 1998
(unaudited)
Marketplace
Park at Springboro Riverplace
Center Six Corners Plaza Center
----------- ----------- ----------- -----------
Rental income..... $1,040,235 1,339,500 673,355 450,186
Additional rental
income.......... 816,335 437,176 121,104 119,583
----------- ----------- ----------- -----------
Total income...... 1,856,570 1,776,676 794,459 569,769
----------- ----------- ----------- -----------
Advisor asset
management fee.. 16,250 141,563 69,713 45,488
Property operating
expenses........ 1,249,738 460,186 158,077 146,430
Interest expense.. - - - -
Depreciation...... 290,625 353,906 174,281 113,719
----------- ----------- ----------- -----------
Total expenses.... 1,556,613 955,655 402,071 305,637
----------- ----------- ----------- -----------
Net income (loss). $ 299,957 821,021 392,388 264,132
=========== =========== =========== ===========
Rose Joliet Hollywood Loehmann's Baytowne
Plaza Commons Video Plaza Shoppes
----------- ----------- ----------- ----------- -----------
Rental income..... $ 198,621 1,431,800 106,704 963,890 957,187
Additional rental
income.......... 56,244 458,557 1,861 356,620 217,772
----------- ----------- ----------- ----------- -----------
Total income...... 254,865 1,890,357 108,565 1,320,510 1,174,959
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 20,648 147,354 10,133 101,738 94,913
Property operating
expenses........ 64,846 517,584 6,746 323,220 335,511
Interest expense.. - 851,221 - - -
Depreciation...... 51,619 368,385 25,331 254,344 237,281
----------- ----------- ----------- ----------- -----------
Total expenses.... 137,113 1,884,544 42,210 679,302 667,705
----------- ----------- ----------- ----------- -----------
Minority interest
in earnings..... - 5,755 - - -
----------- ----------- ----------- ----------- -----------
Net income (loss). $ 117,752 58 66,355 641,208 507,254
=========== =========== =========== =========== ===========
F-15
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the nine months ended September 30, 1998
(unaudited)
Woodland Supervalue Supervalue Gateway
Commons Plymouth Indianapolis Square
----------- ----------- ------------ -----------
Rental income..... $1,655,790 392,109 411,147 511,245
Additional rental
income.......... 448,989 - - 170,925
----------- ----------- ------------ -----------
Total income...... 2,104,779 392,109 411,147 682,170
----------- ----------- ------------ -----------
Advisor asset
management fee.. 150,270 40,988 43,005 52,050
Property operating
expenses........ 643,662 17,645 18,502 213,665
Interest expense.. 502,385 - - -
Depreciation...... 375,675 102,469 107,513 130,125
----------- ----------- ------------ -----------
Total expenses.... 1,671,992 161,102 169,020 395,840
----------- ----------- ------------ -----------
Net income (loss). $ 432,787 231,007 242,127 286,330
=========== =========== ============ ===========
Total 1998
Acquisitions
Pro Forma
------------
Rental income..... $17,649,758
Additional rental
income.......... 6,504,035
------------
Total income...... 24,153,792
------------
Advisor asset
management fee.. 1,746,220
Property operating
expenses........ 7,858,376
Interest expense.. 1,789,550
Depreciation...... 4,631,297
------------
Total expenses.... 16,025,442
------------
Minority interest
in earnings..... 5,755
------------
Net income (loss). 8,122,595
============
F-16
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the nine months ended September 30, 1998
(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 nine months
ended September 30, 1998 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% per annum of the Average
Invested Assets (as defined).
(G) The consolidated financial statements include the accounts of the Company
and the limited liability company ("LLC") which owns the Joliet Commons
Shopping Center. The Company entered into an LLC with an unaffiliated third
party (the "Seller") for the purchase of Joliet Commons. The transaction
was structured such that the Company contributed approximately $52,000 for
a 1% interest in an LLC and the Seller contributed a property with a value
of approximately $19,733,000 and debt of approximately $14,569,000 to the
LLC for a 99% interest. The Company is the managing member of the LLC. Due
to the Company's ability as managing member to directly control the LLC, it
is consolidated for financial reporting purposes. The Seller's interest is
reflected as a minority interest in the accompanying consolidated financial
statements.
F-17
Inland Real Estate Corporation
Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1997
(unaudited)
The following unaudited Pro Forma Consolidated Statement of Operations of the
Company is presented to effect the acquisitions of the properties indicated in
Note B and Note C of the Notes to the Pro Forma Consolidated Statement of
Operations as though they occurred the earlier of January 1, 1997 or the date
operations commenced. No pro forma adjustments have been made for Orland Park,
Oak Forest Commons, Downers Grove Market, Marketplace at Six Corners, Carmax-
Tinley Park, Carmax-Schaumburg, Hollywood Video-Hammond, Plymouth Collection
and Circuit City-Traverse as these centers were completed in 1997 and 1998 and
no significant operations existed for the year ended December 31, 1997.
Construction had not begun on Staples Office Supply Store and Stuarts Crossing
and therefore, there were no operations for the year ended December 31, 1997.
This unaudited Pro Forma Consolidated Statement of Operations should be read in
conjunction with the December 31, 1997 Financial Statements and the notes
thereto as filed on Form 10-K.
This unaudited Pro Forma Consolidated Statement of Operations is not
necessarily indicative of what the actual results of operations would have been
for the year ended December 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-18
<TABLE>
Inland Real Estate Corporation
Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1997
(unaudited)
Pro Forma Adjustments
--------------------------------------
1997 1997 1998 1999
Historical Acquisitions Acquisitions Acquisitions 1997
(A) (B) (C) (D) Pro Forma
------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Rental income..... $21,112,365 9,903,951 25,207,592 6,394,035 62,617,943
Additional rental
income.......... 6,592,983 3,622,583 9,694,483 1,337,583 21,247,632
Interest
income(E)....... 1,615,520 - - - 1,615,520
Other income...... 100,717 - - - 100,717
------------ ------------ ------------ ------------ ------------
Total income.... 29,421,585 13,526,534 34,902,075 7,731,618 85,581,812
------------ ------------ ------------ ------------ ------------
Professional services
and general and
administrative
fees............ 482,954 - - - 482,954
Advisor asset
management fee.(H) 843,000 1,832,719 2,644,918 643,950 5,964,587
Property operating
expenses........ 8,863,024 4,476,786 12,646,256 2,075,856 28,061,922
Interest expense.. 5,654,564 1,338,640 2,419,903 884,674 10,297,781
Depreciation (F).. 4,556,445 2,371,640 6,584,222 1,609,875 15,122,182
Amortization...... 124,884 - - - 124,884
Acquisition costs
expensed........ 249,493 - - - 249,493
------------ ------------ ------------ ------------ ------------
Total expenses.... 20,774,364 10,019,785 24,295,299 5,214,355 60,303,803
------------ ------------ ------------ ------------ ------------
Minority interest
in earnings..... - - 25,086 - 25,086
------------ ------------ ------------ ------------ ------------
Net income...... $ 8,647,221 3,506,749 10,581,690 2,517,263 25,252,923
============ ============ ============ ============ ============
Weighted average
common stock
outstanding (G). 15,225,983 57,030,887
============ ============
Net income per weighted
average common stock
outstanding, basic and
diluted (G)..... $ .57 .44
============ ============
See accompanying notes to pro forma consolidated statement of operations.
</TABLE>
F-19
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1997
(unaudited)
(A) The 1997 Historical column represents the historical statement of
operations of the Company for the year ended December 31, 1997, as filed
with the SEC on Form 10-K.
(B) Total pro forma adjustments for the year ended December 31, 1997 are as
though the 1997 acquisitions of the following properties occurred the
earlier of January 1, 1997 or the date operations commenced (May 13, 1997
for the Glendale Heights Dominick's). All properties were purchased on an
all cash basis except for Maple Park, Aurora Commons, Lincoln Park Place
and Rivertree Court. Pro forma 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
which matured 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 which matured 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-20
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
For the year ended December 31, 1997
(unaudited)
Rivertree Court
As part of the acquisition of Rivertree Court, the Company assumed the
existing first mortgage loan, maturing January 1, 1999, with a balance of
$15,700,000. The loan requires interest only monthly payments at a rate of
10.03% per annum.
Fashion Square
As part of the acquisition of Fashion Square, the Company assumed the
existing bond financing, in the remaining principal balance of $6,200,000.
Monthly interest only payments are due on the financing through December 1,
2014 maturity date. The interest rate changes weekly and is currently
4.1%. The bond financing is secured by a Letter of Credit issued by
LaSalle National Bank, who receives an annual fee of 1.25% of the
outstanding principal balance.
F-21
<TABLE>
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
(B) Total pro forma adjustments for 1997 acquisitions are as though they were acquired the earlier of January 1, 1997 or
the date operations commenced.
<CAPTION>
Niles
Maple Park Aurora Lincoln Shopping Cobblers Mallard Calumet Ameritech
Place Commons Park Place Center Mall Mall Square Outlot
----------- ----------- ----------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Rental income..... $ 39,736 82,740 14,159 98,780 341,053 356,037 130,663 36,768
Additional rental
income.......... 8,168 26,594 5,714 39,507 189,843 138,412 146,565 8,091
----------- ----------- ----------- ----------- ----------- ------------ ----------- -----------
Total income...... 47,904 109,334 19,873 138,287 530,896 494,449 277,228 44,859
----------- ----------- ----------- ----------- ----------- ------------ ----------- -----------
Advisor asset
management fee.. - - - - - - - -
Property operating
expenses........ 10,039 30,055 6,352 43,952 205,189 161,720 152,445 9,746
Interest expense.. - - - - - - - -
Depreciation...... - - - - - - - -
----------- ----------- ----------- ----------- ----------- ------------ ----------- -----------
Total expenses.... 10,039 30,055 6,352 43,952 205,189 161,720 152,445 9,746
----------- ----------- ----------- ----------- ----------- ------------ ----------- -----------
Net income (loss). $ 37,865 79,279 13,521 94,335 325,707 332,729 124,783 35,113
=========== =========== =========== =========== =========== ============ =========== ===========
Highland Glendale
Schaumburg Sequoia Park River Rivertree Shorecrest Heights
Dominicks Plaza Dominicks Square Court Plaza Dominicks Party City
----------- ----------- ----------- ----------- ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Rental income..... $ 269,510 182,563 405,156 358,182 1,923,392 311,714 303,692 166,666
Additional rental
income.......... - 67,441 - 157,773 588,600 128,728 - 33,000
----------- ----------- ----------- ----------- ----------- ------------ ------------ -----------
Total income...... 269,510 250,004 405,156 515,955 2,511,992 440,442 303,692 199,666
----------- ----------- ----------- ----------- ----------- ------------ ------------ -----------
Advisor asset
management fee.. - - - - - - - -
Property operating
expenses........ 5,390 78,364 8,103 166,076 732,510 154,027 7,592 39,000
Interest expense.. - - - - - - - -
Depreciation...... - - - - - - - -
----------- ----------- ----------- ----------- ----------- ------------ ------------ -----------
Total expenses.... 5,390 78,364 8,103 166,076 732,510 154,027 7,592 39,000
----------- ----------- ----------- ----------- ----------- ------------ ------------ -----------
Net income (loss). $ 264,120 171,640 397,053 349,879 1,779,482 286,415 296,099 160,666
=========== =========== =========== =========== =========== ============ ============ ===========
F-22
F-22
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
(B) Total pro forma adjustments for 1997 acquisitions are as though they were acquired the earlier of January 1, 1997 or
the date operations commenced.
<CAPTION>
Roselle Wilson Terramere Iroquois Fashion Naper West
Eagle Countryside Plaza Plaza Center Square Plaza
----------- ----------- ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Rental income..... $ 307,980 256,000 136,100 419,563 1,376,053 808,935 1,578,508
Additional rental
income.......... 77,500 - 50,500 376,745 446,667 543,963 588,773
----------- ----------- ----------- ----------- ----------- ------------ ------------
Total income...... 385,480 256,000 186,600 793,309 1,822,720 1,352,897 2,167,281
----------- ----------- ----------- ----------- ----------- ------------ ------------
Advisor asset
management fee.. - - - - - - -
Property operating
expenses........ 100,000 87,000 61,100 406,416 551,333 741,680 718,696
Interest expense.. - - - - - - -
Depreciation...... - - - - - - -
----------- ----------- ----------- ----------- ----------- ------------ ------------
Total expenses.... 100,000 87,000 61,100 406,416 551,333 741,680 718,696
----------- ----------- ----------- ----------- ----------- ------------ ------------
Net income (loss). $ 285,480 169,000 125,500 389,892 1,271,387 611,217 1,448,585
=========== =========== =========== =========== =========== ============ ============
Total
1997
Pro Forma Acquisitions
Adjustments Pro Forma
----------- -------------
<S> <C> <C>
Rental income..... $ - 9,903,951
Additional rental
income.......... - 3,622,583
----------- ------------
Total income...... - 13,526,534
----------- ------------
Advisor asset
management fee.. 1,832,719 1,832,719
Property operating
expenses........ - 4,476,786
Interest expense.. 1,338,640 1,338,640
Depreciation...... 2,371,640 2,371,640
----------- ------------
Total expenses.... 5,542,999 10,019,785
----------- ------------
Net income (loss). $(5,542,999) 3,506,749
=========== ============
</TABLE>
F-23
F-23
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
(C) Total pro forma adjustments for 1998 acquisitions are as though they were
acquired the earlier of January 1, 1997 or the date operations commenced.
All properties were purchased on an all cash basis except Edinburgh
Festival. The pro forma adjustment for interest expense on this property
was based on the following terms:
As part of the acquisition of Edinburgh Festival, the Company assumed the
existing first mortgage loan, maturing September 30, 2008, with a balance
of $4,625,000. The loan requires interest only monthly payments at a rate
of 6.30% per annum.
West
Woodfield Coopers Chicago Maple Lake Park
Plaza Grove Dominick's Plaza Plaza
----------- ----------- ----------- ----------- -----------
Rental income..... $2,235,315 577,096 628,320 369,317 1,216,080
Additional rental
income.......... 755,071 401,492 - 129,431 472,163
----------- ----------- ----------- ----------- -----------
Total income...... 2,990,386 978,588 628,320 498,748 1,688,243
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 192,000 58,000 63,000 31,650 122,750
Property operating
expenses........ 873,792 488,067 18,850 133,667 543,398
Interest expense.. - - - - -
Depreciation...... 483,000 146,600 157,500 83,400 293,000
----------- ----------- ----------- ----------- -----------
Total expenses.... 1,548,792 692,667 239,350 248,717 959,148
----------- ----------- ----------- ----------- -----------
Net income (loss). $1,441,594 285,921 388,970 250,031 729,095
=========== =========== =========== =========== ===========
F-24
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
December 31, 1997
(unaudited)
Homewood Wisner Elmhurst Mill Prairie
Plaza Plaza City Center Creek Square
----------- ----------- ----------- ----------- -----------
Rental income..... $ 220,375 206,312 508,377 1,085,374 315,796
Additional rental
income.......... 132,016 59,636 95,827 725,135 87,777
----------- ----------- ----------- ----------- -----------
Total income...... 332,391 265,948 604,204 1,810,509 403,573
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 19,363 18,853 47,750 113,600 31,000
Property operating
expenses........ 166,951 101,312 140,836 823,792 130,448
Interest expense.. - - - 760,000 -
Depreciation...... 46,500 45,900 119,375 272,500 87,800
----------- ----------- ----------- ----------- -----------
Total expenses.... 232,814 166,065 307,961 1,969,892 249,248
----------- ----------- ----------- ----------- -----------
Net income (loss). $ 99,577 99,883 296,243 (159,383) 154,325
=========== =========== =========== =========== ===========
St. James Chestnut Bergen Western & Berwyn
Crossing Court Plaza Howard Plaza
----------- ----------- ----------- ----------- -----------
Rental income..... $ 720,615 1,197,317 1,681,564 210,288 176,345
Additional rental
income.......... 183,197 306,682 980,649 69,180 131,460
----------- ----------- ----------- ----------- -----------
Total income...... 903,812 1,503,999 2,662,213 279,468 307,805
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 74,770 161,440 172,477 19,130 18,370
Property operating
expenses........ 265,225 593,967 1,105,206 88,145 147,830
Interest expense.. - - - - -
Depreciation...... 187,000 403,600 431,200 47,825 45,925
----------- ----------- ----------- ----------- -----------
Total expenses.... 526,995 1,159,007 1,708,883 155,100 212,125
----------- ----------- ----------- ----------- -----------
Net income (loss). $ 376,817 344,992 953,330 124,368 95,680
=========== =========== =========== =========== ===========
F-25
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
December 31, 1997
(unaudited)
High Point Woodland Walgreens Winnetka
Wauconda Center Heights Woodstock Commons
----------- ----------- ----------- ----------- -----------
Rental income..... $ 230,703 1,078,701 684,840 110,800 453,321
Additional rental
income.......... 72,913 251,518 754,544 - 343,033
----------- ----------- ----------- ----------- -----------
Total income...... 303,616 1,330,219 1,439,384 110,800 796,354
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 25,250 103,540 96,000 11,620 44,350
Property operating
expenses........ 72,912 305,583 844,901 4,986 327,566
Interest expense.. - - - - -
Depreciation...... 63,125 308,437 233,333 25,333 93,333
----------- ----------- ----------- ----------- -----------
Total expenses.... 161,287 717,560 1,174,234 41,939 465,249
----------- ----------- ----------- ----------- -----------
Net income (loss). $ 142,329 612,659 265,150 68,861 331,105
=========== =========== =========== =========== ===========
Fairview
Schaumburg Park Heights Orland
Plaza Eastgate Center Plaza Greens
----------- ----------- ----------- ----------- -----------
Rental income..... $ 734,658 844,830 1,386,980 1,280,215 442,337
Additional rental
income.......... 315,191 200,749 532,465 315,356 492,656
----------- ----------- ----------- ----------- -----------
Total income...... 1,049,849 1,045,579 1,919,445 1,595,571 934,993
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 69,873 77,310 155,000 112,410 51,000
Property operating
expenses........ 511,999 436,950 1,210,493 385,880 469,956
Interest expense.. 379,254 - - - -
Depreciation...... 173,333 172,500 387,500 283,333 126,667
----------- ----------- ----------- ----------- -----------
Total expenses.... 1,134,459 686,760 1,752,993 781,623 647,623
----------- ----------- ----------- ----------- -----------
Net income (loss). $ (84,610) 358,819 166,452 813,948 287,370
=========== =========== =========== =========== ===========
F-26
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
December 31, 1997
(unaudited)
Edinburgh
Bakers Festival Woodfield Two Springboro
Shoes Center Commons Rivers Plaza
----------- ----------- ----------- ----------- -----------
Rental income..... $ 100,000 413,667 1,921,834 678,750 897,806
Additional rental
income.......... - 168,097 643,583 147,199 129,002
----------- ----------- ----------- ----------- -----------
Total income...... 100,000 581,764 2,565,417 825,949 1,026,808
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 9,630 45,535 270,000 67,700 92,946
Property operating
expenses........ 4,500 201,513 976,853 179,718 203,712
Interest expense.. - 145,687 - - -
Depreciation...... 10,667 113,333 675,000 163,333 232,366
----------- ----------- ----------- ----------- -----------
Total expenses.... 24,797 506,068 1,921,853 410,751 529,024
----------- ----------- ----------- ----------- -----------
Net income (loss). $ 75,203 75,696 643,564 415,198 497,784
=========== =========== =========== =========== ===========
Total 1998
Riverplace Rose Joliet Acquisitions
Center Place Commons Pro Forma
----------- ----------- ----------- ------------
Rental income..... 600,248 110,345 1,909,066 25,207,592
Additional rental
income.......... 169,381 31,200 597,880 9,694,483
----------- ----------- ----------- ------------
Total income...... 769,629 141,545 2,506,946 34,902,075
----------- ----------- ----------- ------------
Advisor asset
management fee.. 60,659 11,470 196,472 2,644,918
Property operating
expenses........ 190,688 37,569 658,991 12,646,256
Interest expense.. - - 1,134,962 2,419,903
Depreciation...... 151,647 28,676 491,181 6,584,222
----------- ----------- ----------- ------------
Total expenses.... 402,994 77,715 2,481,606 24,295,299
----------- ----------- ----------- ------------
Minority interest
in earnings..... - - 25,086 25,086
----------- ----------- ----------- -----------
Net income........ 366,635 63,830 254 10,581,690
=========== =========== =========== ============
F-27
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Woodfield Plaza, Schaumburg, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Woodfield Plaza
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $2,235,315 - 2,235,315
Additional rental income.. 755,071 - 755,071
----------- ----------- -----------
Total income.............. 2,990,386 - 2,990,386
----------- ----------- -----------
Advisor asset
management fee.......... - 192,000 192,000
Property operating
expenses................ 801,632 72,160 873,792
Depreciation.............. - 483,000 483,000
----------- ----------- -----------
Total expenses............ 801,632 747,160 1,548,792
----------- ----------- -----------
Net income (loss)......... $2,188,754 (747,160) 1,441,594
=========== =========== ===========
Acquisition of Coopers Grove, Country Club Hills, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Coopers Grove
-----------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 577,096 - 577,096
Additional rental income.. 401,492 - 401,492
----------- ----------- -----------
Total income.............. 978,588 - 978,588
----------- ----------- -----------
Advisor asset
management fee.......... - 58,000 58,000
Property operating
expenses................ 428,031 60,036 488,067
Depreciation.............. - 146,600 146,600
----------- ----------- -----------
Total expenses............ 428,031 264,636 692,667
----------- ----------- -----------
Net income (loss)......... $ 550,557 (264,636) 285,921
=========== =========== ===========
F-28
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of West Chicago Dominick's, West Chicago, Illinois
This pro forma adjustment reflects the purchase of West Chicago Dominick's
as if the Company had acquired the property as of January 1, 1997, and is
based on information provided by the Seller.
West Chicago Dominick's
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 628,320 - 628,320
Additional rental income.. - - -
----------- ----------- -----------
Total income.............. 628,320 - 628,320
----------- ----------- -----------
Advisor asset
management fee.......... - 63,000 63,000
Property operating
expenses................ - 18,850 18,850
Depreciation.............. - 157,500 157,500
----------- ----------- -----------
Total expenses............ - 239,350 239,350
----------- ----------- -----------
Net income (loss)......... $ 628,320 (239,350) 388,970
=========== =========== ===========
Acquisition of Maple Plaza, Downers Grove, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Maple Plaza
-----------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 369,317 - 369,317
Additional rental income.. 129,431 - 129,431
----------- ----------- -----------
Total income.............. 498,748 - 498,748
----------- ----------- -----------
Advisor asset
management fee.......... - 31,650 31,650
Property operating
expenses................ 133,667 - 133,667
Depreciation.............. - 83,400 83,400
----------- ----------- -----------
Total expenses............ 133,667 115,050 248,717
----------- ----------- -----------
Net income (loss)......... $ 365,081 (115,050) 250,031
=========== =========== ===========
F-29
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Lake Park Plaza, Michigan City, Indiana
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Lake Park Plaza
-----------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $1,216,080 - 1,216,080
Additional rental income.. 472,163 - 472,163
----------- ----------- -----------
Total income.............. 1,688,243 - 1,688,243
----------- ----------- -----------
Advisor asset
management fee.......... - 122,750 122,750
Property operating
expenses................ 467,427 75,971 543,398
Depreciation.............. - 293,000 293,000
----------- ----------- -----------
Total expenses............ 467,427 491,721 959,148
----------- ----------- -----------
Net income (loss)......... $1,220,816 (491,721) 729,095
=========== =========== ===========
Acquisition of Homewood Plaza, Homewood, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X to the Pro Forma Adjustments:
Homewood Plaza
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 200,375 - 200,375
Additional rental income.. 132,016 - 132,016
----------- ----------- -----------
Total income.............. 332,391 - 332,391
----------- ----------- -----------
Advisor asset
management fee.......... - 19,363 19,363
Property operating
expenses................ 166,951 - 166,951
Depreciation.............. - 46,500 46,500
----------- ----------- -----------
Total expenses............ 166,951 65,863 232,814
----------- ----------- -----------
Net income (loss)......... $ 165,440 (65,863) 99,577
=========== =========== ===========
F-30
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Wisner Plaza, Chicago, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X to the Pro Forma Adjustments:
Wisner Plaza
-----------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 206,312 - 206,312
Additional rental income.. 59,636 - 59,636
----------- ----------- -----------
Total income.............. 265,948 - 265,948
----------- ----------- -----------
Advisor asset
management fee.......... - 18,853 18,853
Property operating
expenses................ 101,312 - 101,312
Depreciation.............. - 45,900 45,900
----------- ----------- -----------
Total expenses............ 101,312 64,753 166,065
----------- ----------- -----------
Net income (loss)......... $ 164,636 (64,753) 99,883
=========== =========== ===========
Acquisition of Elmhurst City Center, Elmhurst, Illinois
This pro forma adjustment reflects the purchase of Elmhurst City Center as
if the Company had acquired the property as of January 1, 1997, and is
based on information provided by the Seller.
Elmhurst City Center
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 508,377 - 508,377
Additional rental income.. 95,827 - 95,827
----------- ----------- -----------
Total income.............. 604,204 - 604,204
----------- ----------- -----------
Advisor asset
management fee.......... - 47,750 47,750
Property operating
expenses................ 140,836 - 140,836
Depreciation.............. - 119,375 119,375
----------- ----------- -----------
Total expenses............ 140,836 167,125 307,961
----------- ----------- -----------
Net income (loss)......... $ 463,368 (167,125) 296,243
=========== =========== ===========
F-31
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Mill Creek, Palos Park, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Mill Creek
-----------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $1,085,374 - 1,085,374
Additional rental income.. 725,135 - 725,135
----------- ----------- -----------
Total income.............. 1,810,509 - 1,810,509
----------- ----------- -----------
Advisor asset
management fee.......... - 113,600 113,600
Property operating
expenses................ 778,792 45,000 823,792
Interest expense.......... - 760,000 760,000
Depreciation.............. - 272,500 272,500
----------- ----------- -----------
Total expenses............ 778,792 1,191,100 1,969,892
----------- ----------- -----------
Net income (loss)......... $1,031,537 (1,191,100) (159,383)
=========== =========== ===========
Acquisition of Prairie Square, Sun Prairie, Wisconsin
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X to the Pro Forma Adjustments:
Prairie Square
-----------------------------------
Year Ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 315,796 - 315,796
Additional rental income.. 87,777 - 87,777
----------- ----------- -----------
Total income.............. 403,573 - 403,573
----------- ----------- -----------
Advisor asset
management fee.......... - 31,000 31,000
Property operating
expenses................ 130,448 - 130,448
Depreciation.............. - 87,800 87,800
----------- ----------- -----------
Total expenses............ 130,448 118,800 249,248
----------- ----------- -----------
Net income (loss)......... $ 273,125 (118,800) 154,325
=========== =========== ===========
F-32
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of St. James Crossing, Westmont, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
St. James Crossing
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 720,615 - 720,615
Additional rental income.. 183,197 - 183,197
----------- ----------- -----------
Total income.............. 903,812 - 903,812
----------- ----------- -----------
Advisor asset
management fee.......... - 74,770 74,770
Property operating
expenses................ 257,225 8,000 265,225
Depreciation.............. - 187,000 187,000
----------- ----------- -----------
Total expenses............ 257,225 269,770 526,995
----------- ----------- -----------
Net income (loss)......... $ 646,587 (269,770) 376,817
=========== =========== ===========
Acquisition of Chestnut Court, Darien, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Chestnut Court
-----------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $1,197,317 - 1,197,317
Lease termination income.. 765,504 (765,504) -
Additional rental income.. 306,682 - 306,682
----------- ----------- -----------
Total income.............. 2,269,503 (765,504) 1,503,999
----------- ----------- -----------
Advisor asset
management fee.......... - 161,440 161,440
Property operating
expenses................ 593,967 - 593,967
Depreciation.............. - 403,600 403,600
----------- ----------- -----------
Total expenses............ 593,967 565,040 1,159,007
----------- ----------- -----------
Net income (loss)......... $1,675,536 (1,330,544) 344,992
=========== =========== ===========
F-33
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Bergen Plaza, Oakdale, Minnesota
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Bergen Plaza
-----------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $1,681,564 - 1,681,564
Additional rental income.. 980,649 - 980,649
----------- ----------- -----------
Total income.............. 2,662,213 - 2,662,213
----------- ----------- -----------
Advisor asset
management fee.......... - 172,477 172,477
Property operating
expenses................ 1,105,206 - 1,105,206
Depreciation.............. - 431,200 431,200
----------- ----------- -----------
Total expenses............ 1,105,206 603,677 1,708,883
----------- ----------- -----------
Net income (loss)......... $1,557,007 (603,677) 953,330
=========== =========== ===========
Acquisition of Western & Howard, Chicago, Illinois
This pro forma adjustment reflects the purchase of Western & Howard as if
the Company had acquired the property as of January 1, 1997, and is based
on information provided by the Seller.
Western & Howard
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 210,288 - 210,288
Additional rental income.. 69,180 - 69,180
----------- ----------- -----------
Total income.............. 279,468 - 279,468
----------- ----------- -----------
Advisor asset
management fee.......... - 19,130 19,130
Property operating
expenses................ 88,145 - 88,145
Depreciation.............. - 47,825 47,825
----------- ----------- -----------
Total expenses............ 88,145 66,955 155,100
----------- ----------- -----------
Net income (loss)......... $ 191,323 (66,955) 124,368
=========== =========== ===========
F-34
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Berwyn Plaza, Berwyn, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Berwyn Plaza
-----------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 176,345 - 176,345
Additional rental income.. 131,460 - 131,460
----------- ----------- -----------
Total income.............. 307,805 - 307,805
----------- ----------- -----------
Advisor asset
management fee.......... - 18,370 18,730
Property operating
expenses................ 135,830 12,000 147,830
Depreciation.............. - 45,925 45,925
----------- ----------- -----------
Total expenses............ 135,830 76,295 212,125
----------- ----------- -----------
Net income (loss)......... $ 171,975 (76,295) 95,680
=========== =========== ===========
Acquisition of Wauconda, Wauconda, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Wauconda
-----------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 230,703 - 230,703
Additional rental income.. 72,913 - 72,913
----------- ----------- -----------
Total income.............. 303,616 - 303,616
----------- ----------- -----------
Advisor asset
management fee.......... - 25,250 25,250
Property operating
expenses................ 72,912 - 72,912
Depreciation.............. - 63,125 63,125
----------- ----------- -----------
Total expenses............ 72,912 88,375 161,287
----------- ----------- -----------
Net income (loss)......... $ 230,704 (88,375) 142,329
=========== =========== ===========
F-35
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of High Point Centre, Madison, Wisconsin
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
High Point Centre
-----------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $1,078,701 - 1,078,701
Additional rental income.. 251,518 - 251,518
----------- ----------- -----------
Total income.............. 1,330,219 - 1,330,219
----------- ----------- -----------
Advisor asset
management fee.......... - 103,540 103,540
Property operating
expenses................ 258,583 47,000 305,583
Depreciation.............. - 308,437 308,437
----------- ----------- -----------
Total expenses............ 258,583 458,977 717,560
----------- ----------- -----------
Net income (loss)......... $1,071,636 (458,977) 612,659
=========== =========== ===========
Acquisition of Woodland Heights, Streamwood, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Woodland Heights
-----------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 684,840 - 684,840
Additional rental income.. 754,544 - 754,544
----------- ----------- -----------
Total income.............. 1,439,384 - 1,439,384
----------- ----------- -----------
Advisor asset
management fee.......... - 96,000 96,000
Property operating
expenses................ 844,901 - 844,901
Depreciation.............. - 233,333 233,333
----------- ----------- -----------
Total expenses............ 844,901 329,333 1,174,234
----------- ----------- -----------
Net income (loss)......... $ 594,483 (329,333) 265,150
=========== =========== ===========
F-36
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Walgreens, Woodstock, Illinois
This pro forma adjustment reflects the purchase of the Walgreens property
as if the Company had acquired the property as of January 1, 1997, and is
based on information provided by the seller.
Walgreens
------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 110,800 - 110,800
Additional rental income.. - - -
----------- ----------- -----------
Total income.............. 110,800 - 110,800
----------- ----------- -----------
Advisor asset
management fee.......... - 11,620 11,620
Property operating
expenses................ - 4,986 4,986
Depreciation.............. - 25,333 25,333
----------- ----------- -----------
Total expenses............ - 41,939 41,939
----------- ----------- -----------
Net income (loss)......... $ 110,800 (41,939) 68,861
=========== =========== ===========
Acquisition of Winnetka Commons, New Hope, Minnesota
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Winnetka Commons
-----------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 453,321 - 453,321
Additional rental income.. 343,033 - 343,033
----------- ----------- -----------
Total income.............. 796,354 - 796,354
----------- ----------- -----------
Advisor asset
management fee.......... - 44,350 44,350
Property operating
expenses................ 327,566 - 327,566
Depreciation.............. - 93,333 93,333
----------- ----------- -----------
Total expenses............ 327,566 137,683 465,249
----------- ----------- -----------
Net income (loss)......... $ 468,788 (137,683) 331,105
=========== =========== ===========
F-37
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Schaumburg Plaza, Schaumburg, Illinois
This pro forma adjustment reflects the purchase of Schaumburg Plaza as if
the Company had acquired the property as of January 1, 1997, and is based
on information provided by the Seller.
Schaumburg Plaza
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 734,658 - 734,658
Additional rental income.. 315,191 - 315,191
----------- ----------- -----------
Total income.............. 1,049,849 - 1,049,849
----------- ----------- -----------
Advisor asset
management fee.......... - 69,873 69,873
Property operating
expenses................ 511,999 - 511,999
Interest expense.......... 379,254 - 379,254
Depreciation.............. - 173,333 173,333
----------- ----------- -----------
Total expenses............ 891,253 243,206 1,134,459
----------- ----------- -----------
Net income (loss)......... $ 158,596 (243,206) (84,610)
=========== =========== ===========
Acquisition of Eastgate, Lombard, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Eastgate
------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 844,830 - 844,830
Additional rental income.. 200,749 - 200,749
----------- ----------- -----------
Total income.............. 1,045,579 - 1,045,579
----------- ----------- -----------
Advisor asset
management fee.......... - 77,310 77,310
Property operating
expenses................ 436,950 - 436,950
Depreciation.............. - 172,500 172,500
----------- ----------- -----------
Total expenses............ 436,950 249,810 686,760
----------- ----------- -----------
Net income (loss)......... $ 608,629 (249,810) 358,819
=========== =========== ===========
F-38
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Park Center, Tinley Park, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Park Center
------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $1,386,980 - 1,386,980
Additional rental income.. 532,465 - 532,465
----------- ----------- -----------
Total income.............. 1,919,445 - 1,919,445
----------- ----------- -----------
Advisor asset
management fee.......... - 155,000 155,000
Property operating
expenses................ 1,191,299 19,194 1,210,493
Depreciation.............. - 387,500 387,500
----------- ----------- -----------
Total expenses............ 1,191,299 561,694 1,752,993
----------- ----------- -----------
Net income (loss)......... $ 728,146 (561,694) 166,452
=========== =========== ===========
Acquisition of Fairview Heights Plaza, Fairview Heights, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Fairview Heights
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $1,280,215 - 1,280,215
Additional rental income.. 315,356 - 315,356
----------- ----------- -----------
Total income.............. 1,595,571 - 1,595,571
----------- ----------- -----------
Advisor asset
management fee.......... - 112,410 112,410
Property operating
expenses................ 377,902 7,978 385,880
Depreciation.............. - 283,333 283,333
----------- ----------- -----------
Total expenses............ 377,902 403,721 781,623
----------- ----------- -----------
Net income (loss)......... $1,217,669 (403,721) 813,948
=========== =========== ===========
F-39
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Orland Greens, Orland Park, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Orland Greens
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 442,337 - 442,337
Additional rental income.. 492,656 - 492,656
----------- ----------- -----------
Total income.............. 934,993 - 934,993
----------- ----------- -----------
Advisor asset
management fee.......... - 51,000 51,000
Property operating
expenses................ 465,281 4,675 469,956
Depreciation.............. - 126,667 126,667
----------- ----------- -----------
Total expenses............ 465,281 182,342 647,623
----------- ----------- -----------
Net income (loss)......... $ 469,712 (182,342) 287,370
=========== =========== ===========
Acquisition of Bakers Shoes, Chicago, Illinois
This pro forma adjustment reflects the purchase of Bakers Shoes as if the
Company had acquired the property as of January 1, 1997, and is based on
information provided by the Seller.
Bakers Shoes
------------------------------------
Year Ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 100,000 - 100,000
Additional rental income.. - - -
----------- ----------- -----------
Total income.............. 100,000 - 100,000
----------- ----------- -----------
Advisor asset
management fee.......... - 9,630 9,630
Property operating
expenses................ 4,500 - 4,500
Depreciation.............. - 10,667 10,667
----------- ----------- -----------
Total expenses............ 4,500 20,297 24,797
----------- ----------- -----------
Net income (loss)......... $ 95,500 (20,297) 75,203
=========== =========== ===========
F-40
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Edinburgh Festival Center, Brooklyn Park, Minnesota
Reconciliation of Gross income and Direct Operating Expenses for the period
from July 1, 1997 (commencement of operations) to December 31, 1997
prepared in accordance with Rule 3.14 of Regulation S-X (*) to the Pro
Forma Adjustments:
Edinburgh Festival Center
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 413,667 - 413,667
Additional rental income.. 168,097 - 168,097
----------- ----------- -----------
Total income.............. 581,764 - 581,764
----------- ----------- -----------
Advisor asset
management fee.......... - 45,535 45,535
Property operating
expenses................ 201,513 - 201,513
Interest expense.......... 145,687 - 145,687
Depreciation.............. - 113,333 113,333
----------- ----------- -----------
Total expenses............ 347,200 158,868 506,068
----------- ----------- -----------
Net income (loss)......... $ 234,564 (158,868) 75,696
=========== =========== ===========
Acquisition of Woodfield Commons, Schaumburg, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Woodfield Commons
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $1,921,834 - 1,921,834
Additional rental income.. 643,583 - 643,583
----------- ----------- -----------
Total income.............. 2,565,417 - 2,565,417
----------- ----------- -----------
Advisor asset
management fee.......... - 270,000 270,000
Property operating
expenses................ 931,032 45,821 976,853
Depreciation.............. - 675,000 675,000
----------- ----------- -----------
Total expenses............ 931,032 990,821 1,921,853
----------- ----------- -----------
Net income (loss)......... $1,634,385 (990,821) 643,564
=========== =========== ===========
F-41
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Two Rivers, Bolingbrook, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X (*) to the Pro Forma Adjustments:
Two Rivers
-------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income............. $ 678,750 - 678,750
Additional rental income.. 147,199 - 147,199
----------- ----------- -----------
Total income.............. 825,949 - 825,949
----------- ----------- -----------
Advisor asset
management fee.......... - 67,700 67,700
Property operating
expenses................ 179,718 - 179,718
Depreciation.............. - 163,333 163,333
----------- ----------- -----------
Total expenses............ 179,718 231,033 410,751
----------- ----------- -----------
Net income (loss)......... $ 646,231 (231,033) 415,198
=========== =========== ===========
Acquisition of Springboro Plaza, Springboro, Ohio
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X to the Pro Forma Adjustments:
Springboro Plaza
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 897,806 - 897,806
Additional rental income.. 129,002 - 129,002
----------- ----------- -----------
Total income.............. 1,026,808 - 1,026,808
----------- ----------- -----------
Advisor asset
management fee.......... - 92,946 92,946
Property operating
expenses................ 184,841 18,871 203,712
Depreciation.............. - 232,366 232,366
----------- ----------- -----------
Total expenses............ 184,841 344,183 529,024
----------- ----------- -----------
Net income (loss)......... $ 841,967 (344,183) 497,784
=========== =========== ===========
F-42
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Riverplace Center, Noblesville, Indiana
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X to the Pro Forma Adjustments:
Riverplace Center
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 600,248 - 600,248
Additional rental income.. 169,381 - 169,381
----------- ----------- -----------
Total income.............. 769,629 - 769,629
----------- ----------- -----------
Advisor asset
management fee.......... - 60,659 60,659
Property operating
expenses................ 173,304 17,384 190,688
Depreciation.............. - 151,647 151,647
----------- ----------- -----------
Total expenses............ 173,304 229,690 402,994
----------- ----------- -----------
Net income (loss)......... $ 596,325 (229,690) 366,635
=========== =========== ===========
Acquisition of Rose Plaza, Elmwood Park, Illinois
This pro forma adjustment reflects the purchase of Rose Plaza as if the
Company had acquired the property as of August 1, 1997 (the date operations
commenced), and is based on information provided by the Seller.
Rose Plaza
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 110,345 - 110,345
Additional rental income.. 31,200 - 31,200
----------- ----------- -----------
Total income.............. 141,545 - 141,545
----------- ----------- -----------
Advisor asset
management fee.......... - 11,470 11,470
Property operating
expenses................ 37,569 - 37,569
Depreciation.............. - 28,676 28,676
----------- ----------- -----------
Total expenses............ 37,569 40,146 77,715
----------- ----------- -----------
Net income (loss)......... $ 103,976 (40,146) 63,830
=========== =========== ===========
F-43
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Joliet Commons, Joliet, Illinois
Reconciliation of Gross income and Direct Operating Expenses for the year
ended December 31, 1997 prepared in accordance with Rule 3.14 of Regulation
S-X to the Pro Forma Adjustments:
Joliet Commons
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $1,909,066 - 1,909,066
Additional rental income.. 597,880 - 597,880
----------- ----------- -----------
Total income.............. 2,506,946 - 2,506,946
----------- ----------- -----------
Advisor asset
management fee.......... - 196,472 196,472
Property operating
expenses................ 676,002 (17,011) 658,991
Interest expense.......... - 1,134,962 1,134,962
Depreciation.............. - 491,181 491,181
----------- ----------- -----------
Total expenses............ 676,002 1,805,604 2,481,606
----------- ----------- -----------
1,830,944 (1,805,604) 25,340
Minority interest in
earnings................. - - 25,086
----------- ---------- -----------
Net income (loss)......... $1,830,944 (1,805,604) 254
=========== =========== ===========
F-44
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
(D) Total pro forma adjustments for 1999 acquisitions are as though they were
acquired the earlier of January 1, 1997.
All properties were purchased on an all cash basis except Woodfield
Commons. The pro forma adjustment for interest expense on this property
was based on the following terms:
As part of the acquisition of Woodfield Commons, the Company assumed the
existing first mortgage loan, maturing September 22, 2001, with a balance
of $11,470,000. The loan requires interest only monthly payments at a rate
of 6.24% per annum.
Loehmann's Baytowne Woodland Supervalue Supervalue
Plaza Shoppes Commons Plymouth Indianapolis
----------- ----------- ----------- ----------- -----------
Rental income..... $1,285,191 1,276,249 2,122,905 522,813 548,196
Additional rental
income.......... 349,558 220,340 572,614 - -
----------- ----------- ----------- ----------- -----------
Total income...... 1,634,749 1,496,589 2,695,519 522,813 548,196
----------- ----------- ----------- ----------- -----------
Advisor asset
management fee.. 135,650 126,550 200,360 54,650 57,340
Property operating
expenses........ 469,997 325,554 716,491 23,526 24,669
Interest expense.. - - 715,728 - -
Depreciation...... 339,125 316,375 669,846 136,625 143,350
----------- ----------- ----------- ----------- -----------
Total expenses.... 944,772 768,479 2,302,425 214,801 225,359
----------- ----------- ----------- ----------- -----------
Net income (loss). $ 689,977 728,110 393,093 308,012 322,837
=========== =========== =========== =========== ===========
F-45
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Total 1999
Gateway Acquisitions
Square Pro Forma
----------- -----------
Rental income..... $ 638,681 6,394,035
Additional rental
income.......... 195,071 1,337,583
----------- -----------
Total income...... 833,752 7,731,618
----------- -----------
Advisor asset
management fee.. 69,400 643,950
Property operating
expenses........ 515,619 2,075,856
Interest expense.. - 884,674
Depreciation...... 173,500 1,609,875
----------- -----------
Total expenses.... 758,519 5,214,355
----------- -----------
Net income (loss). $ 75,233 2,517,263
=========== ===========
F-46
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Loehmann's Plaza, Brookfield, Wisconsin
This pro forma adjustment reflects the purchase of Loehmann's Plaza as if
the Company had acquired the property as of January 1, 1997, and is based
on information provided by the Seller.
Loehmann's Plaza
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $1,285,191 - 1,285,191
Additional rental income.. 349,558 - 349,558
----------- ----------- -----------
Total income.............. 1,634,749 - 1,634,749
----------- ----------- -----------
Advisor asset
management fee.......... - 135,650 135,650
Property operating
expenses................ 461,497 8,500 469,997
Depreciation.............. - 339,125 339,125
----------- ----------- -----------
Total expenses............ 461,497 483,275 944,772
----------- ----------- -----------
Net income (loss)......... $ 993,252 (483,275) 689,977
=========== =========== ===========
Acquisition of Baytowne Shoppes, Champaign, Illinois
This pro forma adjustment reflects the purchase of Baytowne Shoppes as if
the Company had acquired the property as of January 1, 1997, and is based
on information provided by the Seller.
Baytowne Shoppes
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $1,276,249 - 1,276,249
Additional rental income.. 220,340 - 220,340
----------- ----------- -----------
Total income.............. 1,496,589 - 1,496,589
----------- ----------- -----------
Advisor asset
management fee.......... - 126,550 126,550
Property operating
expenses................ 306,554 19,000 325,554
Depreciation.............. - 316,375 316,375
----------- ----------- -----------
Total expenses............ 306,554 461,925 768,479
----------- ----------- -----------
Net income (loss)......... $1,190,035 (461,925) 728,110
=========== =========== ===========
F-47
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Woodland Commons, Buffalo Grove, Illinois
This pro forma adjustment reflects the purchase of Woodland Commons as if
the Company had acquired the property as of January 1, 1997, and is based
on information provided by the Seller.
Woodland Commons
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $2,122,905 - 2,122,905
Additional rental income.. 572,614 - 572,614
----------- ----------- -----------
Total income.............. 2,695,518 - 2,695,518
----------- ----------- -----------
Advisor asset
management fee.......... - 200,360 200,360
Property operating
expenses................ 674,991 41,500 716,491
Interest expense.......... 715,728 - 715,728
Depreciation.............. - 669,846 669,846
----------- ----------- -----------
Total expenses............ 1,390,719 911,706 2,302,425
----------- ----------- -----------
Net income (loss)......... $1,304,799 (911,706) 393,093
=========== =========== ===========
Acquisition of Supervalue-Plymouth, Plymouth, Minnesota
This pro forma adjustment reflects the purchase of Supervalue-Plymouth as
if the Company had acquired the property as of January 1, 1997, and is
based on information provided by the Seller.
Supervalue-Plymouth
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 522,813 - 512,813
Additional rental income.. - - -
----------- ----------- -----------
Total income.............. 522,813 - 522,813
----------- ----------- -----------
Advisor asset
management fee.......... - 54,650 54,650
Property operating
expenses................ 23,526 - 23,526
Depreciation.............. - 136,625 136,625
----------- ----------- -----------
Total expenses............ 23,526 191,275 214,801
----------- ----------- -----------
Net income (loss)......... $ 499,287 (191,275) 308,012
=========== =========== ===========
F-48
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(unaudited)
Acquisition of Supervalue-Indianapolis, Indianapolis, Indiana
This pro forma adjustment reflects the purchase of Supervalue-Indianapolis
as if the Company had acquired the property as of January 1, 1997, and is
based on information provided by the Seller.
Supervalue-Indianapolis
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 548,196 - 548,196
Additional rental income.. - - -
----------- ----------- -----------
Total income.............. 548,196 - 548,196
----------- ----------- -----------
Advisor asset
management fee.......... - 57,340 57,340
Property operating
expenses................ 24,669 - 24,669
Depreciation.............. - 143,350 143,350
----------- ----------- -----------
Total expenses............ 24,669 200,690 225,359
----------- ----------- -----------
Net income (loss)......... $ 523,527 (200,690) 322,837
=========== =========== ===========
Acquisition of Gateway Square, Hinsdale, Illinois
This pro forma adjustment reflects the purchase of Gateway Square as if the
Company had acquired the property as of January 1, 1997, and is based on
information provided by the Seller.
Gateway Square
-------------------------------------
Year ended
December 31, Pro Forma
1997 Adjustments Total
----------- ----------- -----------
Rental income............. $ 638,681 - 638,681
Additional rental income.. 195,071 - 195,071
----------- ----------- -----------
Total income.............. 833,752 - 833,752
----------- ----------- -----------
Advisor asset
management fee.......... - 69,400 69,400
Property operating
expenses................ 511,319 4,300 515,619
Depreciation.............. - 173,500 173,500
----------- ----------- -----------
Total expenses............ 511,319 247,200 758,519
----------- ----------- -----------
Net income (loss)......... $ 322,433 (247,200) 75,233
=========== =========== ===========
F-49
Inland Real Estate Corporation
Notes to Pro Forma Consolidated Statement of Operations
(continued)
For the year ended December 31, 1997
(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, 1997 was calculated by estimating the additional shares sold
to purchase each of the Company's properties on a weighted average basis.
(H) Advisor Asset Management Fees are calculated as 1% of the Average Invested
Assets (as defined).
(I) The consolidated financial statements include the accounts of the Company
and the limited liability company ("LLC") which owns the Joliet Commons
Shopping Center. The Company entered into an LLC with an unaffiliated third
party (the "Seller") for the purchase of Joliet Commons. The transaction
was structured such that the Company contributed approximately $52,000 for
a 1% interest in an LLC and the Seller contributed a property with a value
of approximately $19,733,000 and debt of approximately $14,569,000 to the
LLC for a 99% interest. The Company is the managing member of the LLC. Due
to the Company's ability as managing member to directly control the LLC, it
is consolidated for financial reporting purposes. The Seller's interest is
reflected as a minority interest in the accompanying consolidated financial
statements.
F-50
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 Woodland Commons for the year ended
December 31, 1998. 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 Current Report on Form 8-K of Inland Real Estate
Corporation, as described in note 2. The presentation is not intended to be a
complete presentation of Woodland Commons' 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 Woodland Commons for the year ended December 31, 1998, in
conformity with generally accepted accounting principles.
KPMG LLP
Chicago, Illinois
February 8, 1999
F-51
Woodland Commons
Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1998
Gross income:
Base rental income.............................. $2,263,916
Operating expense and real estate
tax recoveries................................ 598,652
-----------
Total Gross Income.............................. 2,862,568
-----------
Direct operating expenses:
Operating expenses.............................. 259,370
Bad debt expense................................ 72,770
Real estate taxes............................... 323,298
Utilities....................................... 63,466
Insurance....................................... 10,496
Management fees................................. 81,016
Interest expense................................ 669,908
-----------
Total direct operating expenses................. 1,480,324
-----------
Excess of gross income over
direct operating expenses..................... $1,382,244
===========
See accompanying notes to historical summary of gross income and direct
operating expenses.
F-52
Woodland Commons
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1998
1. Business
Woodland Commons is located in Buffalo Grove, Illinois. It consists of
approximately 170,000 square feet of gross leasable area of which 100% was
leased and occupied at December 31, 1998. Approximately 41% of Woodland
Commons is leased to one tenant representing approximately 35% of base
rental income. Inland Real Estate Corporation has signed a sale and
purchase agreement for the purchase of Woodland Commons 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 Current Report on Form 8-K of Inland Real Estate
Corporation and is not intended to be a complete presentation of Woodland
Commons' revenues and expenses. The Historical Summary has been prepared
on the accrual basis of accounting and requires management of Woodland
Commons 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
Woodland Commons leases retail space under various lease agreements with
its tenants. All leases are accounted for as operating leases. The leases
include provisions under which Woodland Commons is reimbursed for common
area, real estate, and insurance costs. Certain of the leases provide for
payment of contingent rentals based on a percentage applied to the amounts
by which the tenants' sales exceed predetermined levels. No contingent
rentals were earned during 1998. Operating expenses and real estate tax
recoveries reflected in the Historical Summary include amounts for 1998
expenses for which the tenants have not yet been billed. Certain leases
contain renewal options at 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 $62,424 for the
year ended December 31, 1998.
F-53
Woodland Commons
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1998
Minimum rents to be received from tenants under operating leases in effect
at December 31, 1998 are as follows:
Year Amount
---- ------
1999 $ 2,166,574
2000 1,983,782
2001 1,785,410
2002 1,560,028
2003 1,424,542
Thereafter 8,340,005
-----------
$17,260,341
===========
4. Direct Operating Expenses
Direct operating expenses include only those costs expected to be
comparable to the proposed future operations of Woodland Commons. Costs
such as mortgage interest, depreciation, amortization and professional fees
are excluded from the Historical Summary.
Woodland Commons is managed pursuant to the terms of a management agreement
for an annual fee of 3% gross revenues (as defined). Subsequent to the
sale of Woodland Commons (note 1), Woodland Commons will be managed by an
affiliate of Inland Real Estate Corporation and the current management
agreement will cease. Any new management agreement may cause future
management fees to differ from the amounts reflected in the Historical
Summary.
Woodland Commons had not received the final tax bill for 1998. Real estate
tax expense is estimated based upon bills for 1997. The difference between
the estimated and the final tax bill is not expected to have a material
impact on the Historical Summary.
Inland Real Estate Corporation will assume the outstanding mortgage debt
related to Woodland Commons of $10,735,710 in connection with the
acquisition after a $735,193 principal paydown. The assumed debt which
matures on September 22, 2001, has an annual fixed interest rate of 6.24%
and requires payments of interest only.
F-54
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 Gateway Square Shopping Center for
the year ended December 31, 1998. 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 Current Report on Form 8-K of Inland Real Estate
Corporation, as described in note 2. The presentation is not intended to be a
complete presentation of Gateway Square Shopping Center'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 Gateway Square Shopping Center for the year ended December 31,
1998, in conformity with generally accepted accounting principles.
KPMG LLP
Chicago, Illinois
February 24, 1999
F-55
Gateway Square Shopping Center
Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1998
Gross income:
Base rental income.............................. $ 681,661
Operating expense and real estate
tax recoveries................................ 227,901
Percentage rental income........................ 1,089
-----------
Total gross income.............................. 910,651
-----------
Direct operating expenses:
Operating expenses.............................. 111,905
Real estate taxes............................... 83,474
Utilities....................................... 43,207
Insurance....................................... 6,288
Management fees................................. 36,515
-----------
Total direct operating expenses................. 281,389
-----------
Excess of gross income over
direct operating expenses..................... $ 629,262
===========
See accompanying notes to historical summary of gross income and direct
operating expenses.
F-56
Gateway Square Shopping Center
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1998
1. Business
Gateway Square Shopping Center (Gateway Square) is located in Hinsdale,
Illinois. It consists of approximately 40,150 square feet of gross
leasable area and was approximately 96% leased and approximately 93%
occupied at December 31, 1998. Approximately 22% of Gateway Square is
leased to two tenants representing approximately 22% of base rental income.
Inland Real Estate Corporation has signed a sale and purchase agreement for
the purchase of Gateway Square 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 Current Report on Form 8-K of Inland Real Estate
Corporation and is not intended to be a complete presentation of Gateway
Square's revenues and expenses. The Historical Summary has been prepared
on the accrual basis of accounting and requires management of Gateway
Square 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
Gateway Square leases retail space under various lease agreements with its
tenants. All leases are accounted for as operating leases. The leases
include provisions under which Gateway Square is reimbursed for common
area, real estate, and insurance costs. Certain of the leases provide for
payment of contingent rentals based on a percentage applied to the amount
by which the tenants' sales exceed predetermined levels. Certain leases
contain renewal options at 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 $2,573 for the
year ended December 31, 1998.
F-57
Gateway Square Shopping Center
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1998
Minimum rents to be received from tenants under operating leases in effect
at December 31, 1998 are as follows:
Year Amount
---- ------
1999 $ 670,170
2000 577,969
2001 342,020
2002 159,451
2003 80,718
-----------
$ 1,830,328
===========
4. Direct Operating Expenses
Direct operating expenses include only those costs expected to be
comparable to the proposed future operations of Gateway Square. Costs such
as mortgage interest, depreciation, amortization and professional fees are
excluded from the Historical Summary.
Gateway Square had not received its final real estate tax bill for 1998.
Real estate tax expense is estimated based upon bills for 1997. The
difference between the estimate and the final tax bill is not expected to
have a material impact on the Historical Summary.
An affiliate of the seller provides management services for Gateway square
based on a percentage of gross income for such services. Subsequent to the
sale of Gateway Square (note 1), Gateway Square will be managed by an
affiliate of Inland Real Estate Corporation and the current management
agreement will cease. Any new management agreement may cause future
management fees to differ from the amounts reflected in the Historical
Summary.
F-58
Consent of KPMG LLP
The Board of Directors
Inland Real Estate Corporation
We consent to incorporation by reference in the registration statement (No.
333-70699) on Form S-3 of Inland Real Estate Corporation of our report dated
February 8, 1999, relating to the historical summary of gross income and direct
operating expenses of Woodland Commons for the year ended December 31, 1998 and
our report dated February 24, 1999, relating to the historical summary of gross
income and direct operating expenses of Gateway Square Shopping Center for the
year ended December 31, 1998, which reports appear in the Current Report on
Form 8-K of Inland Real Estate Corporation dated March 31, 1999.
/s/ KPMG LLP
Chicago, Illinois
March 31, 1999
