SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (Date of Earliest Event Reported)
July 10, 2002
General Growth Properties, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-11656 42-1283895
-------- ------- ----------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
110 N. Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
(312) 960-5000
--------------
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
ONLY THOSE ITEMS AMENDED ARE REPORTED HEREIN.
The registrant hereby amends its Current Report on Form 8-K dated July 10,
2002 as follows:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Listed below are the financial statements, pro forma financial information
and exhibits filed as a part of this report:
(a) Financial Statements of Businesses acquired.
The combined statements of revenues and certain expenses of the properties
owned by Victoria Ward, Limited and the combined statements of revenues and
certain expenses of the properties owned by JP Realty, Inc. as listed in the
accompanying Index to Financial Statements and Pro Forma Financial Information
are filed as part of this Current Report on Form 8-K/A.
(b) Pro Forma Financial Information.
The pro forma financial information of General Growth Properties, Inc. (the
"Company") listed in the accompanying Index to Financial Statements and Pro
Forma Financial Information is filed as part of this Current Report on Form
8-K/A.
(c) Exhibits.
See Exhibit Index attached hereto and incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL GROWTH PROPERTIES, INC.
By: /s/ Bernard Freibaum
-----------------------------
Bernard Freibaum
Executive Vice President and
Chief Financial Officer
Date: September 20, 2002
EXHIBIT INDEX
EXHIBIT
NUMBER NAME
------- ----
2.1 Agreement and Plan of Merger among General Growth Properties, Inc., GGP Limited Partnership, GGP
Acquisition, L.L.C., GGP Acquisition II, L.L.C., JP Realty, Inc., and Price Development Company,
Limited Partnership, dated as of March 3, 2002.*
4.1 Certificate of Amendment and Restatement of Certificate of Designations, Preferences and Rights
creating 8.95% Cumulative Redeemable Preferred Stock, Series B.**
4.2 Certificate of Designations, Preferences and Rights of 8.5% Cumulative Convertible Preferred Stock,
Series C.**
4.3 Certificate of Designations, Preferences and Rights of 8.75% Cumulative Redeemable Preferred Stock,
Series D.**
4.4 Certificate of Designations, Preferences and Rights of 8.95% Cumulative Redeemable Preferred Stock,
Series E.**
4.5 Certificate of Designations, Preferences and Rights of 8.75% Cumulative Redeemable Preferred Stock,
Series F.**
4.6 Certificate of Correction of Certificate of Designations, Preferences and Rights of 8.95% Cumulative
Redeemable Preferred Stock, Series G.**
10.1 Voting Agreement, dated as of March 3, 2002.*
10.2 Joinder to Voting Agreement, dated as of June 14, 2002.**
10.3 Third Amendment to Second Amended and Restated Agreement of GGP Limited Partnership, dated as of
February 15, 2002.**
10.4 Amendment to Second Amended and Restated Agreement of GGP Limited Partnership, dated as of April 24,
2002.**
10.5 Fourth Amendment to Second Amended and Restated Agreement of GGP Limited Partnership, dated as of July
10, 2002.**
10.6 Redemption Rights Agreement (Common Units), dated July 10, 2002, by and among GGP Limited Partnership,
General Growth Properties, Inc. and the persons listed on the signature pages thereof.**
10.7 Redemption Rights Agreement (Series B Preferred Units), dated July 10, 2002, by and among GGP Limited
Partnership, General Growth Properties, Inc. and the persons listed on the signature pages thereof.**
23.1 Consent of KPMG LLP.
23.2 Consent of PricewaterhouseCoopers LLP-Independent Accountants.
* Incorporated by reference to the Company's Current Report on Form 8-K
dated March 3, 2002.
** Incorporated by reference to the Company's Current Report on Form
8-K dated July 10, 2002.
INDEX TO FINANCIAL STATEMENTS AND
PRO FORMA FINANCIAL INFORMATION
The following historical financial statements and pro forma financial
information is presented in accordance with Rule 3-14 and Article 11,
respectively, of Regulation S-X of the Securities and Exchange Commission. The
historical financial statements have been audited only for certain properties
acquired and, for such properties, for their respective most recent fiscal year
as the transactions relating to the properties acquired (as described in the
registrant's Current Report on Form 8-K dated May 28, 2002 and the registrant's
Current Report on Form 8-K dated July 10, 2002) are not with related parties and
the registrant, after reasonable inquiry, is not aware of any material factors
related to the properties not otherwise disclosed that would cause the reported
financial information to not be necessarily indicative of future operating
results. In accordance with Rule 3-14 of Regulation S-X of the Securities and
Exchange Commission, certain unaudited financial information for properties
acquired that are not individually significant has also been presented. In
addition, as the properties will be directly or indirectly owned by entities
that elect to be treated as REITs for Federal income tax purposes, a
presentation of estimated taxable operating results is not applicable.
VICTORIA WARD, LIMITED
Independent Auditors' Report..................................................................................... F-2
Statements of Revenues and Certain Expenses for the Year Ended December 31, 2001
(audited) and for the Period January 1 to May 27, 2002 (immediately prior to
acquisition) (Unaudited)....................................................................................... F-3
Notes to Statements of Revenues and Certain Expenses............................................................. F-4, F-5
JP REALTY, INC.
Report of Independent Accountants................................................................................ F-6
Statements of Revenues and Certain Expenses for the Year Ended December 31,
2001 and for the Six Months Ended June 30, 2002 (Unaudited).................................................... F-7
Notes to Statements of Revenues and Certain Expenses............................................................. F-8, F-9
GENERAL GROWTH PROPERTIES, INC.
Pro Forma Condensed Consolidated Statement of Operations for the Year
Ended December 31, 2001 (Unaudited)............................................................................ F-10
Notes to Pro Forma Condensed Consolidated Statement of Operations for the
Year Ended December 31, 2001 (Unaudited)....................................................................... F-11 to F-14
Pro Forma Condensed Consolidated Statement of Operations for the Six
Months Ended June 30, 2002 (Unaudited)......................................................................... F-15
Notes to Pro Forma Condensed Consolidated Statement of Operations for the
Six Months Ended June 30, 2002 (Unaudited)..................................................................... F-16 to F-18
Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2002
(Unaudited).................................................................................................... F-19, F-20
Notes to Pro Forma Condensed Consolidated Balance Sheet as of June 30,
2002 (Unaudited)............................................................................................... F-21, F-22
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholder of
Victoria Ward, Limited:
We have audited the accompanying statement of revenues and certain expenses of
the properties owned by Victoria Ward, Limited (the "Statement"), as defined in
note 1, for the year ended December 31, 2001. This Statement is the
responsibility of the management of Victoria Ward, Limited. Our responsibility
is to express an opinion on the Statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the Statement is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the Statement.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying Statement has been prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission for
inclusion in the Current Report on Form 8-K/A of General Growth Properties, Inc.
Material amounts, as described in note 1(b) to the Statement, that would not be
comparable to those resulting from the proposed future operations of the
properties owned by Victoria Ward, Limited are excluded and the Statement is not
intended to be a complete presentation of the revenues and expenses of the
properties owned by Victoria Ward, Limited.
In our opinion, the Statement referred to above presents fairly, in all material
respects, the revenues and certain expenses of the properties owned by Victoria
Ward, Limited for the year ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Honolulu, Hawaii
August 30, 2002
F-2
VICTORIA WARD, LIMITED
STATEMENTS OF REVENUES AND CERTAIN EXPENSES
YEAR ENDED DECEMBER 31, 2001(AUDITED) AND THE PERIOD
JANUARY 1 TO MAY 27, 2002 (UNAUDITED)
(DOLLARS IN THOUSANDS)
The statements of revenues and certain expenses, as shown below, present the
summarized results of operations of the properties owned by Victoria Ward,
Limited. On May 28, 2002, General Growth Properties, Inc. acquired the stock of
Victoria Ward, Limited, a privately held real estate corporation. The principal
Victoria Ward assets consist of land in Kakaako, central Honolulu, Hawaii as
described in Note 1.
Year Ended Period January 1 to
Dec 31, 2001 May 27, 2002
(audited) (unaudited)
------------ -------------------
Revenues:
Rentals, including real property tax reimbursement from tenants
of $424 for 2002 and $1,036 for 2001 (note 2) $25,395 $ 9,916
Common area maintenance reimbursements 5,154 2,191
Other 741 298
------- -------
Total Revenues 31,290 12,405
Certain Expenses:
Property maintenance and operation 10,680 3,227
Taxes, other than income 2,850 1,631
Salaries and wages 2,323 1,477
Other 884 289
------- -------
Total Certain Expenses 16,737 6,624
Revenues in excess of certain expenses $14,553 $ 5,781
======= =======
The accompanying notes are an integral part of these statements.
F-3
VICTORIA WARD, LIMITED
NOTES TO STATEMENTS OF REVENUES AND CERTAIN
EXPENSES YEAR ENDED DECEMBER 31, 2001 (AUDITED) AND THE PERIOD
JANUARY 1 TO MAY 27, 2002 (UNAUDITED)
(DOLLARS IN THOUSANDS)
(1) BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
(a) PROPERTY ACQUIRED
The accompanying statements of revenues and certain expenses include the
operations (see Basis of Presentation below) of the properties owned by Victoria
Ward, Limited, acquired by General Growth Properties, Inc. on May 28, 2002 for
approximately $250,000, including the assumption of approximately $50,000 of
existing debt, substantially all of which was repaid immediately following the
closing. The principal Victoria Ward, Limited assets consist of land in Kakaako,
central Honolulu, Hawaii, currently improved with, among other uses, an
entertainment, shopping, and dining district which includes Ward Entertainment
Center, Ward Warehouse, Ward Village, and Village Shops.
(b) BASIS OF PRESENTATION
The accompanying statements of revenues and certain expenses have been
prepared for the purpose of complying with certain rules and regulations of the
Securities and Exchange Commission and are not intended to be a complete
presentation of the actual operations of the properties owned by Victoria Ward,
Limited for the periods presented. Certain items may not be comparable to the
future operations of the properties owned by Victoria Ward, Limited. Excluded
items consist of interest expense, depreciation and amortization, gain on
securities received from demutualization, loss on disposition of rental
properties and equipment, federal and state income taxes and other costs not
directly related to the future operations of the properties owned by Victoria
Ward, Limited.
(c) REVENUE RECOGNITION
All leases are classified as operating leases. Rental revenue is recognized
on a straight-line basis over the term of the individual leases.
(d) USE OF ESTIMATES
The preparation of the statements of revenues and certain expenses in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of revenues and expenses during the periods presented. Actual
results could differ from these estimates.
F-4
VICTORIA WARD, LIMITED
NOTES TO STATEMENTS OF REVENUES AND CERTAIN
EXPENSES YEAR ENDED DECEMBER 31, 2001 (AUDITED) AND THE PERIOD
JANUARY 1, TO MAY 27, 2002 (UNAUDITED)
(DOLLARS IN THOUSANDS)
(2) RENTALS UNDER OPERATING LEASES
Principal operations consist of leasing building space and land to commercial
and industrial tenants under operating leases.
Contingent rentals are based upon a percentage of the tenant's gross sales and
amounted to approximately $1,778 for the year ended December 31, 2001.
At December 31, 2001, minimum future rental income on noncancelable operating
leases is as follows:
Year ending December 31:
2002............................................ $21,197
2003............................................ 20,415
2004............................................ 15,950
2005............................................ 12,108
2006............................................ 11,559
Thereafter...................................... 61,687
Minimum future rental income does not include amounts which are payable by
certain tenants based upon a percentage of their gross sales or as reimbursement
of operating expenses.
(3) UNAUDITED INTERIM STATEMENT
The Statement for the period January 1 to May 27, 2002 is unaudited. In the
opinion of management, all significant adjustments necessary for a fair
presentation of the Statement for the interim period have been included. The
results of operations for the interim period are not necessarily indicative of
the results to be expected for the full year of operation.
F-5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of
JP Realty, Inc.
In our opinion, the Statement of Revenues and Certain Expenses listed in the
accompanying index presents fairly, in all material respects, the revenues and
certain expenses of the properties owned by JP Realty, Inc. (the "Properties")
for the year ended December 31, 2001 in conformity with accounting principles
generally accepted in the United States of America. This financial statement is
the responsibility of the Properties' management; our responsibility is to
express an opinion on this financial statement based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United
States of America which require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenues and certain
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues and certain expenses, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the statement of revenues and certain expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for
purposes of complying with certain rules and regulations of the Securities and
Exchange Commission as described in Note 1 to the statement of revenues and
certain expenses and is not intended to be a complete presentation of the
revenues and expenses of the Properties.
/s/ PricewaterhouseCoopers LLP
Salt Lake City, Utah
January 30, 2002
F-6
JP REALTY, INC.
STATEMENTS OF REVENUES AND CERTAIN EXPENSES
YEAR ENDED DECEMBER 31, 2001 (AUDITED)
AND SIX MONTHS ENDED JUNE 30, 2002 (UNAUDITED)
(DOLLARS IN THOUSANDS)
The Statements of Revenues and Certain Expenses, as shown below, present the
summarized results of operations of the properties owned by JP Realty, Inc. On
July 10, 2002, General Growth Properties, Inc. (the "Company") the Company
acquired JP Realty, Inc., a publicly held real estate investment trust, and its
operating partnership subsidiary. JP Realty, Inc. owned or had an interest in 51
properties, including 18 enclosed regional mall centers, 26 anchored community
centers, one free-standing retail property and 6 mixed-use commercial/business
properties, containing an aggregate of over 15.2 million square feet of gross
leaseable area in 10 western states.
Six Months Ended
Year Ended June 30, 2002
December 31, 2001 (unaudited)
----------------- ----------------
Total Revenues $144,356 $ 71,325
Expenses:
Real Estate Taxes 13,213 6,494
Other Property Operating 30,912 16,123
Depreciation and Amortization -- --
-------- --------
Total Expenses 44,125 22,617
Revenues in Excess of Certain Expenses $100,231 $ 48,708
======== ========
The accompanying notes are an integral part of these statements.
F-7
JP REALTY, INC.
NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES
YEAR ENDED DECEMBER 31, 2001 (AUDITED)
AND SIX MONTHS ENDED JUNE 30, 2002
(UNAUDITED) (DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Statements of Revenues and Certain Expenses present the summarized
results of operations of the properties of JP Realty, Inc. (the "Properties") as
described below. On July 10, 2002, the Company acquired JP Realty, Inc., a
publicly held real estate investment trust, and its operating partnership
subsidiary. JP Realty owned or had an interest in 51 properties, including 18
enclosed regional mall centers, 26 anchored community centers, one free-standing
retail property and 6 mixed-use commercial/business properties, containing an
aggregate of over 15.2 million square feet of gross leaseable area in 10 western
states.
The accompanying statements have been prepared on the accrual basis of
accounting. The statements have been prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission and for
inclusion in a current report on Form 8-K/A of the Company. The statements are
not intended to be a complete presentation of the revenues and expenses of the
Properties for the six-month period ended June 30, 2002 (unaudited) and for the
year ended December 31, 2001 as certain expenses, primarily depreciation and
amortization expense, interest expense and other costs not directly related to
the future operations of the Properties have been excluded.
Revenue Recognition
Certain minimum rents are recognized monthly based upon amounts which are
currently due from tenants, when such amounts are not materially different than
recognizing the fixed cash flow over the initial term of the lease using the
straight-line method. Certain leases have in lieu rents which cover all rent
charges and recoveries and are recorded in minimum rents. All other minimum
rents are recognized using the straight-line method. The Properties recognize
revenues for Percentage and Overage Rents in the period earned, based upon the
accounting guidance issued by Staff Accounting Bulletin No. 101 "Revenue
Recognition". Recoveries from tenants for taxes, insurance and other shopping
center operating expenses are recognized as revenues in the period the
applicable costs are incurred.
Other Property Operating Expenses
Other property operating expenses represent the direct expenses of operating
the Properties including maintenance, repairs, insurance and advertising costs
as well as certain general and administrative expenses that are expected to
continue in the ongoing operation of the Properties. A provision for doubtful
accounts representing that portion of accounts receivable which is estimated to
be uncollectible has been included in other property operating expenses.
Expenditures for maintenance and repairs are charged to operations as incurred.
The Properties are owned by an entity which has elected to be taxed as a REIT
under the Internal Revenue Code of 1986, as amended. As a result, the Properties
are generally not subject to federal income taxation on its income.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions of
the reported amounts of revenues and certain expenses during the reporting
period. Actual results could differ from those estimates.
F-8
JP REALTY, INC.
NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES
YEAR ENDED DECEMBER 31, 2001 AND SIX
MONTHS ENDED JUNE 30, 2002
(UNAUDITED) (DOLLARS IN THOUSANDS)
2. FUTURE REVENUE RENTALS
The minimum future rentals based on noncancelable operating leases held as of
December 31, are as follows:
YEARS ENDING
2002............................................ $ 90,007
2003............................................ 82,907
2004............................................ 75,075
2005............................................ 66,798
2006............................................ 59,099
Thereafter...................................... 285,056
Minimum future rentals do not include amounts which are payable by certain
tenants based upon a percentage of their gross sales or as reimbursement of
operating expenses.
3. UNAUDITED INTERIM STATEMENT
The statement for the six-month period ended June 30, 2002 is unaudited. In
the opinion of management, all significant adjustments necessary for a fair
presentation of the statement for the interim period have been included. The
results of operations for the interim period is not necessarily indicative of
the results to be expected for the full year for the operation of the
Properties.
F-9
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2001
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS - UNAUDITED)
HISTORICAL HISTORICAL
GENERAL GROWTH HISTORICAL HISTORICAL OTHER
PROPERTIES, INC.(*) JP REALTY, INC. VICTORIA WARD, LIMITED ACQUISITIONS
------------------- --------------- ---------------------- -----------
Total revenues $ 803,709 $ 144,356 $ 31,290 $ 28,230
Expenses:
Real estate taxes 52,200 13,213 2,850 1,417
Other property operating 309,643 30,912 13,887 10,206
Depreciation and amortization 145,352 -- -- --
----------- ----------- ----------- -----------
Total expenses 507,195 44,125 16,737 11,623
----------- ----------- ----------- -----------
Operating income 296,514 100,231 14,553 16,607
Interest expense, net (209,622) -- -- (4,950)
Equity in income of unconsolidated
affiliates:
GGP/Homart 21,822 -- -- --
GGP/Homart II 23,995 -- -- 1,576
GGP/Teachers -- -- -- 21,640
Other joint ventures 17,749 -- -- --
----------- ----------- ----------- -----------
Income before minority interest 150,458 100,231 14,553 34,873
Allocations to minority interests (40,792) -- -- --
----------- ----------- ----------- -----------
Net income 109,666 100,231 14,553 34,873
Convertible preferred stock dividends (24,467) -- -- --
----------- ----------- ----------- -----------
Net income available to common stockholders $ 85,199 $ 100,231 $ 14,553 $ 34,873
=========== =========== =========== ===========
Weighted average shares outstanding-basic 52,845
Weighted average shares outstanding-diluted 52,907
Earnings per share-basic $ 1.61
Earnings per share-diluted $ 1.61
TOTAL GENERAL GROWTH
HISTORICAL PRO FORMA PROPERTIES, INC.
COMBINED ADJUSTMENTS PRO FORMA
----------- ----------- ----------------
Total revenues $ 1,007,585 $ 10,008 (a) $ 1,017,593
Expenses:
Real estate taxes 69,680 -- 69,680
Other property operating 364,648 -- 364,648
Depreciation and amortization 145,352 29,768 (b) 175,120
----------- ----------- -----------
Total expenses 579,680 29,768 609,448
----------- ----------- -----------
Operating income 427,905 (19,760) 408,145
Interest expense, net (214,572) (63,787)(c) (278,359)
Equity in income of unconsolidated
affiliates:
GGP/Homart 21,822 (1,851)(d) 19,971
GGP/Homart II 25,571 (1,630)(a) 23,941
GGP/Teachers 21,640 (19,203)(a) 2,437
Other joint ventures 17,749 -- 17,749
----------- ----------- -----------
Income before minority interest 300,115 (106,231) 193,884
Allocations to minority interests (40,792) (23,761)(e) (64,553)
----------- ----------- -----------
Net income 259,323 (129,992) 129,331
Convertible preferred stock dividends (24,467) -- (24,467)
----------- ----------- -----------
Net income available to common stockholders $ 234,856 $ (129,992) $ 104,864
=========== =========== ===========
Weighted average shares outstanding-basic 52,845
Weighted average shares outstanding-diluted 52,907
Earnings per share-basic $ 1.98
Earnings per share-diluted $ 1.98
(*) Excluding extraordinary items and current effect of accounting change
The accompanying notes are an integral part of these statements. For
alphabetical references, please refer to Note 3-Pro Forma Adjustments.
F-10
GENERAL GROWTH PROPERTIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS
YEAR ENDED DECEMBER 31, 2001
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS - UNAUDITED)
NOTE 1 PRO FORMA BASIS OF PRESENTATION
This unaudited pro forma condensed consolidated statement of operations of
General Growth Properties, Inc. (the "Company") is presented as if (i) the
acquisitions made in 2001 (Willowbrook Mall (acquired by GGP/Homart II, L.L.C.
as described below) and Tucson Mall) and (ii) the acquisitions made in 2002
(Victoria Ward, Limited, JP Realty, Inc., the properties comprising the GGP-TRS,
L.L.C. venture (Clackamas Town Center, Galleria at Tyler, Kenwood Towne Center
and Silver City Galleria) (collectively, the "GGP/Teachers' Properties"), Prince
Kuhio Plaza (acquired from GGP/Homart, Inc. as described below) and Pecanland
Mall) had all occurred on January 1, 2001. The total pro forma condensed
consolidated statement of operations reflects these transactions plus the effect
of the joint venture partner with respect to the GGP/Teachers' Properties (as
described below). In management's opinion, all adjustments necessary to reflect
these transactions have been included. Such pro forma condensed consolidated
statement of operations is based upon the historical information of General
Growth Properties, Inc., excluding extraordinary items and cumulative effect of
accounting change, and the historical information of each of the above-mentioned
entities for the year ended December 31, 2001. This unaudited pro forma
condensed consolidated statement of operations should be read in conjunction
with the Statements of Revenues and Certain Expenses included elsewhere in this
report and is not necessarily indicative of what actual results of General
Growth Properties, Inc. would have been if such transactions had been completed
as of January 1, 2001 nor does it purport to represent the results of operations
for future periods.
NOTE 2 ACQUISITIONS
During March 2001, GGP/Homart II, L.L.C., a joint venture in which the
Company has a 50% membership interest, acquired a 100% ownership interest in
Willowbrook Mall in Houston, Texas for a purchase price of approximately
$145,000. GGP/Homart II, L.L.C. financed the Willowbrook acquisition with a new
$102,000 10-year mortgage loan bearing interest at 6.93% per annum and
approximately $43,000 in financing proceeds from a new mortgage loan (bearing
interest at a rate per annum of LIBOR plus 75 basis points) collateralized by
the Stonebriar Centre in Frisco (Dallas), Texas.
On August 15 2001, GGP-Tucson Mall, L.L.C. ("GGP-Tucson"), a wholly-owned
subsidiary of the Company, completed its acquisition of Tucson Mall, a 1.3
million square foot enclosed regional mall in Tucson, Arizona. The aggregate
consideration paid by GGP-Tucson for Tucson Mall was approximately $180,000
(subject to prorations and to certain adjustments and payments to be made by
GGP-Tucson). The consideration was paid in the form of cash borrowed under the
Company's revolving line of credit and an approximately $150,000 short-term
floating rate acquisition loan (bearing interest at a rate per annum of LIBOR
plus 95 basis points) which was refinanced in December 2001.
F-11
GENERAL GROWTH PROPERTIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS
YEAR ENDED DECEMBER 31, 2001
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS - UNAUDITED)
On May 28, 2002, the Company acquired the stock of Victoria Ward, Limited, a
privately held real estate corporation. The total acquisition price was
approximately $250,000, including the assumption of approximately $50,000 of
existing debt, substantially all of which was repaid immediately following the
closing. The $250,000 total cash requirement was funded from the proceeds of the
sale of the Company's investment in marketable securities and from available
cash and cash equivalents. The principal Victoria Ward, Limited assets include
65 fee simple acres in Kakaako, central Honolulu, Hawaii, currently improved
with, among other uses, an entertainment, shopping and dining district which
includes Ward Entertainment Center, Ward Warehouse, Ward Village and Village
Shops. In total, Victoria Ward, Limited currently has 17 properties subject to
ground leases and 29 owned buildings containing in the aggregate approximately
878,000 square feet of retail space, as well as approximately 441,000 square
feet of office, commercial and industrial leaseable area.
On July 10, 2002, the Company acquired JP Realty, Inc. ("JP Realty"), a
publicly held real estate investment trust, and its operating partnership
subsidiary, Price Development Company, Limited Partnership ("PDC"). The total
acquisition price was approximately $1,100,000 which included the assumption of
approximately $460,000 in existing debt and approximately $116,000 of existing
preferred operating units. Pursuant to the terms of the agreement, the
outstanding shares of JP Realty common stock were converted into $26.10 per
share of cash (approximately $431,470). Holders of common units of limited
partnership interest in PDC were entitled to receive $26.10 per unit in cash or,
at the election of the holder, .522 8.5% Series B Cumulative Preferred Units of
limited partnership interest of GGP Limited Partnership (the "Series B Units")
(convertible into common units of limited partnership interest of GGP Limited
Partnership based on a conversion price of $50 per unit). Based upon the
elections of such holders, 1,426,393 Series B Units were issued and the holders
of the remaining common units of limited partnership interest of PDC received
approximately $23,600 in cash. JP Realty owned or had an interest in 51
properties, including 18 enclosed regional mall centers, 26 anchored community
centers, one free-standing retail property and 6 mixed-use commercial/business
properties, containing an aggregate of over 15.2 million square feet of gross
leaseable area in 10 western states. The cash portion of the acquisition price
was funded from the net proceeds of certain new mortgage loans, a new $350,000
acquisition loan, and available cash and cash equivalents. The new acquisition
loan bears interest at a rate of per annum of LIBOR plus 150 basis points,
provides for periodic principal payments (including from certain refinancing
proceeds) and matures in July 2003.
On August 5, 2002 the Company acquired from GGP/Homart, Inc., a joint venture in
which the Company has a 50% common stock interest, the Prince Kuhio Plaza in
Hilo, Hawaii for approximately $39,000. Prince Kuhio Plaza, which contains
approximately 504,000 square feet of gross leaseable area, was acquired by the
assumption by the Company of approximately $24,000 of financing and the payment
to GGP/Homart, Inc. of $7,500 in cash and $7,500 in the form of a promissory
note. Immediately following the acquisition, GGP/Homart, Inc. paid a dividend of
$15,000 to its two co-investors, paid in the form of $7,500 in cash to its
independent institutional joint venture partner and the $7,500 promissory note
to the Company. Upon receipt of the promissory note as a dividend, the Company
caused the promissory note to GGP/Homart, Inc. to be cancelled.
F-12
GENERAL GROWTH PROPERTIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS
YEAR ENDED DECEMBER 31, 2001
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS - UNAUDITED)
On August 26, 2002, the Company formed a new 50/50 joint venture with
Teachers' Retirement System of the State of Illinois ("Illinois Teachers"). Upon
formation of the new joint venture, GGP-TRS L.L.C. ("GGP/Teachers"), Clackamas
Town Center in Portland, Oregon, which was 100% owned by Illinois Teachers, was
contributed to the new joint venture. In addition, concurrent with its
formation, GGP/Teachers acquired Galleria at Tyler in Riverside, California,
Kenwood Towne Centre in Cincinnati, Ohio, and Silver City Galleria in Taunton,
Massachusetts, from an institutional investor for an aggregate purchase price of
approximately $475,000. An existing $75,000 fixed rate nonrecourse loan on
Silver City Galleria, bearing interest at a rate per annum of 7.41 %, was
assumed and three new nonrecourse acquisition loans totaling approximately
$337,000 were obtained. The new loans bear interest at a weighted average rate
per annum of LIBOR plus 76 basis points. The Company's share (approximately
$112,000) of the equity of GGP/Teachers was funded by a portion of new unsecured
loans that total $150,000 and bear interest at LIBOR plus 100 basis points.
On September 12, 2002, the Company acquired a 100% ownership interest in
Pecanland Mall, in Monroe, Louisiana. The aggregate purchase price was
approximately $72,000 which consisted of the assumption of an existing $50,000
mortgage loan bearing interest at 6.5% plus other proceeds from new unsecured
loans.
NOTE 3 PRO FORMA ADJUSTMENTS
(a) Revenues and equity in income of joint ventures
The adjustments to revenues and equity in income of joint ventures primarily
represents the additional interest cost of certain loans related to the
acquisitions, the differences in amounts charged and/or allocated to the
properties owned by the joint ventures by the previous owners and the fees
charged by General Growth Management, Inc. and additional depreciation expense
based on the cost of the acquired properties.
(b) Depreciation and Amortization
Depreciation and amortization is adjusted to include additional amounts
related to the periods from January 1, 2001 to the dates of acquisition for the
2001 acquisitions and for the entire year of 2001 for the acquisitions made in
2002.
(c) Interest Expense, net
Interest expense increased due to a combination of debt assumption and
increased borrowings. In connection with the acquisitions described above, the
Company assumed approximately $538,000 of mortgage debt (excluding the amounts
immediately repaid related to the Victoria Ward acquisition) bearing interest at
the weighted average rate of 5.38%. The Company also incurred approximately
$726,000 of borrowings to fund the cash portion of the acquisitions. The pro
forma interest expense on new borrowings was calculated using the interest rates
described above and using LIBOR equal to approximately 3.70%.
F-13
GENERAL GROWTH PROPERTIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS
YEAR ENDED DECEMBER 31, 2001
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS - UNAUDITED)
Since the interest rates on certain of the loans assumed or obtained in
conjunction with the acquisitions on based on a spread over LIBOR, the rates
will periodically change. If the interest rate on such variable rate loans
increase or decrease by 12.5 basis points, the interest expense will increase or
decrease by approximately $1,320, including the Company's share of the effect on
the unconsolidated affiliates of approximately $217.
(d) GGP/Homart, Inc.
Reflects the reduction in the equity in income of GGP/Homart, Inc. due to
the acquisition by the Company of Prince Kuhio Plaza.
(e) Minority Interest
The pro forma condensed consolidated statement of operations has been
adjusted to reflect the allocation of earnings to the minority interests.
F-14
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2002
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS - UNAUDITED)
HISTORICAL
HISTORICAL VICTORIA WARD, LIMITED HISTORICAL
GENERAL GROWTH HISTORICAL (THE PERIOD JANUARY 1 OTHER 2002
PROPERTIES, INC.(*) JP REALTY, INC. TO MAY 27, 2002) ACQUISITIONS
------------------- --------------- ---------------------- ------------
Total revenues $ 414,729 $ 71,325 $ 12,405 $ 9,230
Expenses:
Real estate taxes 27,534 6,494 1,631 374
Other property operating 134,128 16,123 4,993 2,820
Depreciation and amortization 78,564 -- -- --
--------- --------- --------- ---------
Total expenses 240,226 22,617 6,624 3,194
--------- --------- --------- ---------
Operating income 174,503 48,708 5,781 6,036
Interest expense, net (94,543) -- -- (2,309)
Equity in income of unconsolidated
affiliates:
GGP/Homart 7,949 -- -- --
GGP/Homart II 9,739 -- -- --
GGP/Teachers -- -- -- 10,902
Other joint ventures 10,557 -- -- --
--------- --------- --------- ---------
Income before minority interest 108,205 48,708 5,781 14,629
Allocations to minority interests (29,825) -- -- --
--------- --------- --------- ---------
Net income 78,380 48,708 5,781 14,629
Convertible preferred stock dividends (12,234) -- -- --
--------- --------- --------- ---------
Net income available to common stockholders $ 66,146 $ 48,708 $ 5,781 $ 14,629
========= ========= ========= =========
Weighted average shares outstanding-basic 62,058
Weighted average shares outstanding-diluted 62,193
Earnings per share-basic $ 1.07
Earnings per share-diluted $ 1.06
TOTAL GENERAL GROWTH
HISTORICAL PRO FORMA PROPERTIES, INC.
COMBINED ADJUSTMENTS PRO FORMA
---------- ----------- ---------
Total revenues $ 507,689 $ 4,864 (a) $ 512,553
Expenses:
Real estate taxes 36,033 -- 36,033
Other property operating 158,064 -- 158,064
Depreciation and amortization 78,564 13,300 (b) 91,864
--------- --------- ---------
Total expenses 272,661 13,300 285,961
--------- --------- ---------
Operating income 235,028 (8,436) 226,592
Interest expense, net (96,852) (23,332)(c) (120,184)
Equity in income of unconsolidated
affiliates:
GGP/Homart 7,949 (1,193)(d) 6,756
GGP/Homart II 9,739 -- 9,739
GGP/Teachers 10,902 (8,023)(a) 2,879
Other joint ventures 10,557 -- 10,557
--------- --------- ---------
Income before minority interest 177,323 (40,984) 136,339
Allocations to minority interests (29,825) (13,770)(e) (43,611)
--------- --------- ---------
Net income 147,498 (54,770) 92,728
Convertible preferred stock dividends (12,234) -- (12,234)
--------- --------- ---------
Net income available to common stockholders $ 135,264 $ (54,770) $ 80,494
========= ========= =========
Weighted average shares outstanding-basic 62,058
Weighted average shares outstanding-diluted 62,193
Earnings per share-basic $ 1.30
Earnings per share-diluted $ 1.29
(*) Excluding extraordinary items
The accompanying notes are an integral part of these statements. For
alphabetical references, please refer to Note 3-Pro Forma Adjustments.
F-15
GENERAL GROWTH PROPERTIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2002
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS - UNAUDITED)
NOTE 1 PRO FORMA BASIS OF PRESENTATION
This unaudited pro forma condensed consolidated statement of operations of
General Growth Properties, Inc. ("the Company") is presented as if the
acquisitions made in 2002 (Victoria Ward, Limited, JP Realty, Inc., the
properties comprising of the GGP-TRS, L.L.C. venture (Clackamas Town Center,
Galleria at Tyler, Kenwood Towne Centre and Silver City Galleria) (collectively,
the "GGP/Teachers' Properties"), Prince Kuhio Plaza (acquired from GGP/Homart,
Inc. as described below) and Pecanland Mall) had all occurred on January 1,
2001. The total pro forma condensed consolidated statement of operations
reflects these transactions plus the effect of the joint venture partnership
with respect to the GGP/Teachers' Properties (as described below). In
management's opinion, all adjustments necessary to reflect these transactions
have been included. Such pro forma condensed consolidated statement of
operations is based upon the historical information of General Growth
Properties, Inc., excluding extraordinary items, and the historical information
of each of the above-mentioned entities from January 1 to May 27, 2002
(immediately prior to acquisition) for Victoria Ward, Limited and for the six
months ended June 30, 2002 for the remaining properties. This unaudited pro
forma condensed consolidated statement of operations should be read in
conjunction with the "Statements of Revenues and Certain Expenses" included
elsewhere in this report and is not necessarily indicative of what actual
results of General Growth Properties, Inc. would have been assuming such
transactions had been completed as of January 1, 2001 nor does it purport to
represent the results of operations for future periods.
NOTE 2 ACQUISITIONS
On May 28, 2002, the Company acquired the stock of Victoria Ward, Limited, a
privately held real estate corporation. The total acquisition price was
approximately $250,000, including the assumption of approximately $50,000 of
existing debt, substantially all of which was repaid immediately following the
closing. The $250,000 total cash requirement was funded from the proceeds of the
sale of Company's investment in marketable securities and from available cash
and cash equivalents. The principal Victoria Ward, Limited assets include 65 fee
simple acres in Kakaako, central Honolulu, Hawaii, currently improved with,
among other uses, an entertainment, shopping and dining district which includes
Ward Entertainment Center, Ward Warehouse, Ward Village and Village Shops. In
total, Victoria Ward, Limited currently has 17 properties subject to ground
leases and 29 owned buildings containing in the aggregate approximately 878,000
square feet of retail space, as well as approximately 441,000 square feet of
office, commercial and industrial leaseable area.
On July 10, 2002, the Company acquired JP Realty, Inc. ("JP Realty"), a
publicly held real estate investment trust, and its operating partnership
subsidiary, Price Development Company, Limited Partnership ("PDC"). The total
acquisition price was approximately $1,100,000 which included the assumption of
approximately $460,000 in existing debt and approximately $116,000 of existing
preferred operating units. Pursuant to the terms of the agreement, the
outstanding shares of JP Realty common stock were converted into $26.10 per
share of cash (approximately $431,470). Holders of common units of limited
partnership interest in PDC were entitled to receive $26.10 per unit in cash or,
at the election of the holder, .522 8.5% Series B Cumulative Preferred Units of
limited partnership interest of GGP Limited Partnership (the "Series B Units")
(convertible into common units of limited partnership interest of GGP Limited
Partnership based on a conversion price of $50 per unit). Based upon the
elections of such holders, 1,426,393 Series B Units were issued and the holders
of the remaining common units of limited partnership interest of PDC received
approximately $23,600 in cash.
F-16
GENERAL GROWTH PROPERTIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2002
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS - UNAUDITED)
JP Realty owned or had an interest in 51 properties, including 18 enclosed
regional mall centers, 26 anchored community centers, one free-standing retail
property and 6 mixed-use commercial/business properties, containing an aggregate
of over 15.2 million square feet of GLA in 10 western states. The cash portion
of the acquisition price was funded from the net proceeds of certain new
mortgage loans, a new $350,000 acquisition loan, and available cash and cash
equivalents. The new acquisition loan bears interest at a rate of per annum of
LIBOR plus 150 basis points, provides for periodic principal payments (including
from certain refinancing proceeds) and matures in July 2003.
On August 5, 2002 the Company acquired from GGP/Homart, Inc., a joint venture
in which the Company has a 50% common stock interest, the Prince Kuhio Plaza in
Hilo, Hawaii for approximately $39,000. Prince Kuhio Plaza, which contains
approximately 504,000 square feet of gross leaseable area, was acquired by the
assumption by the Company of approximately $24,000 of financing and the payment
to GGP/Homart, Inc., of $7,500 in cash and $7,500 in the form of a promissory
note. Immediately following the acquisition, GGP/Homart, Inc. paid a dividend of
$15,000 to its two co-investors, paid in the form of $7,500 in cash to its
independent institutional joint venture partner and the $7,500 promissory note
to the Company. Upon receipt of the promissory note as a dividend, the Company
caused the promissory note to GGP/Homart, Inc. to be cancelled.
On August 26, 2002, the Company formed a new 50/50 joint venture with
Teachers' Retirement System of the State of Illinois ("Illinois Teachers"). Upon
formation of the new joint venture, GGP-TRS L.L.C. ("GGP/Teachers"), Clackamas
Town Center in Portland, Oregon, which was 100% owned by Illinois Teachers, was
contributed to the new joint venture. In addition, concurrent with its
formation, GGP/Teachers acquired Galleria at Tyler in Riverside, California,
Kenwood Towne Centre in Cincinnati, Ohio, and Silver City Galleria in Taunton,
Massachusetts, from an institutional investor for an aggregate purchase price of
approximately $475,000. An existing $75,000 fixed rate nonrecourse loan on
Silver City Galleria, bearing interest at a rate per annum of 7.41%, was assumed
and three new nonrecourse acquisition loans totaling approximately $337,000 were
obtained. The new loans bear interest at a weighted average rate of LIBOR plus
76 basis points. General Growth's share (approximately $112,000) of the equity
of GGP/Teachers was funded by primarily by a portion of new unsecured loans that
total $150,000 and bear interest at LIBOR plus 100 basis points.
On September 12, 2002, the Company acquired a 100% ownership interest in
Pecanland Mall, in Monroe, Louisiana. The aggregate purchase price was
approximately $72,000 which consisted of the assumption of an existing $50,000
mortgage loan bearing interest at 6.5% plus other proceeds from new unsecured
loans.
NOTE 3 PRO FORMA ADJUSTMENTS
(a) Revenues and equity in income of joint ventures
The adjustments to revenues and equity in income of joint ventures primarily
represents the additional interest cost of certain loans related to the
acquisitions, the differences in amounts charged and/or allocated to the
properties owned by the joint ventures by the previous owners and the fees
charged by General Growth Management, Inc. and additional depreciation expense
based on the cost of the acquired properties.
F-17
GENERAL GROWTH PROPERTIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2002
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS - UNAUDITED)
(b) Depreciation and Amortization
Depreciation and amortization is adjusted to include additional amounts
related to the six months ended June 30, 2002 for the acquisitions made in 2002.
(c) Interest Expense, net
Interest income has been reduced by the interest income earned on the
marketable securities held by the Company which were used to fund a portion of
the acquisition costs of the properties. Interest expense increased due to a
combination of debt assumption and increased borrowings. In connection with the
acquisitions described above, the Company assumed $538,000 of mortgage debt
(excluding the amounts immediately repaid related to the Victoria Ward
acquisition) bearing interest at the weighted average rate of 5.38%. The Company
also issued approximately $576,000 of borrowings to fund the cash portion of the
acquisitions. The pro forma interest expense on new borrowings was calculated
using the interest rates described above and LIBOR equal to approximately 1.85%.
Since the interest rates on certain of the loans assumed or obtained in
conjunction with the acquisitions on based on a spread over LIBOR, the rates
will periodically change. If the interest rate on such variable rate loans
increase or decrease by 12.5 basis points, the interest expense will increase or
decrease by approximately $602, including the Company's share of the effect on
the unconsolidated affiliates of approximately $105.
(d) GGP/Homart, Inc.
Reflects the reduction in the equity in income of GGP/Homart, Inc. due to
the acquisition by the Company of Prince Kuhio Plaza.
(e) Minority Interest
The pro forma condensed consolidated statement of operations has been
adjusted to reflect the allocation of earnings to the minority interests.
F-18
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2002
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS - UNAUDITED)
HISTORICAL HISTORICAL TOTAL GENERAL GROWTH
GENERAL GROWTH HISTORICAL OTHER 2002 HISTORICAL PRO FORMA PROPERTIES, INC.
PROPERTIES, INC. JP REALTY, INC. ACQUISITIONS COMBINED ADJUSTMENTS PRO FORMA
---------------- --------------- ------------ ----------- ----------- -----------
Investment in real estate:
Land $ 810,848 $ 110,439 $ 7,121 $ 928,408 $ 184,811(a) $ 1,113,219
Building and equipment 4,541,096 833,460 79,950 5,454,506 32,479(a) 5,486,985
---------------- -------------- ------------ ----------- ----------- -----------
5,351,944 943,899 87,071 6,382,914 217,290 6,600,204
Less accumulated depreciation (700,526) (193,107) (9,270) (902,903) 202,377(d) (700,526)
---------------- -------------- ------------ ----------- ----------- -----------
4,651,418 750,792 77,801 5,480,011 419,667 5,899,678
Development in progress 80,017 3,683 46 83,746 -- 83,746
---------------- -------------- ------------ ----------- ----------- -----------
Net property and equipment 4,731,435 754,475 77,847 5,563,757 419,667 5,983,424
Investment in GGP/Homart 208,675 -- -- 208,675 (19,280)(c) 189,395
Investment in GGP/Homart-II 143,991 -- -- 143,991 -- 143,991
Investment in GGP/Teachers -- -- -- -- 111,842(h) 111,842
Investment in other joint ventures 256,772 -- -- 256,772 -- 256,772
---------------- -------------- ------------ ----------- ----------- -----------
Net investment in real estate 5,340,873 754,475 77,847 6,173,195 512,229 6,685,424
Cash 79,166 10,849 439 90,454 -- 90,454
Tenant accounts receivable, net 97,856 10,675 956 109,487 (6,315)(d) 103,172
Deferred expenses, net 103,912 7,881 2,731 114,524 (7,881)(d) 106,643
Notes receivable -- 2,017 -- 2,017 (13)(d) 2,004
Prepaid and other assets 35,485 4,967 605 41,057 (108)(d) 40,949
---------------- -------------- ------------ ----------- ----------- -----------
TOTAL ASSETS $ 5,657,292 $ 790,864 $ 82,578 $ 6,530,734 $ 497,912 $ 7,028,646
================ ============== ============ =========== =========== ===========
F-19
GENERAL GROWTH PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET-CONTINUED
JUNE 30, 2002
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS - UNAUDITED)
HISTORICAL HISTORICAL
GENERAL GROWTH HISTORICAL OTHER 2002
PROPERTIES, INC. JP REALTY, INC. ACQUISITIONS
---------------- --------------- ------------
Mortgage notes and other debt payable $ 3,360,655 $ -- $ 74,035
Distributions payable 63,683 -- --
Network discontinuance reserve 4,582 -- --
Accounts payable and accrued expenses 100,275 19,655 1,388
----------- ----------- -----------
TOTAL LIABILITIES 3,529,195 19,655 75,423
Minority interest:
Preferred Units 240,000 112,327 --
Common Units 368,215 28,452 --
Preferred stock 337,500 -- --
Common stock - par value 6,221 2 --
Additional paid-in capital 1,538,654 239,896 --
Retained earnings (accumulated deficit) (344,526) 390,532 7,155
Notes receivable-common stock purchase (8,971) -- --
Accumulated other comprehensive gains (losses) (8,996) -- --
----------- ----------- -----------
Total $ 5,657,292 $ 790,864 $ 82,578
=========== =========== ===========
TOTAL GENERAL GROWTH
HISTORICAL PRO FORMA PROPERTIES, INC.
COMBINED ADJUSTMENTS PRO FORMA
----------- ----------- ----------------
Mortgage notes and other debt payable $ 3,434,690 $ 1,045,653 (b),(d) $ 4,480,343
Distributions payable 63,683 -- 63,683
Network discontinuance reserve 4,582 -- 4,582
Accounts payable and accrued expenses 121,318 1,566 (d) 122,884
----------- ----------- -----------
TOTAL LIABILITIES 3,624,273 1,047,219 4,671,492
Minority interest:
Preferred Units 352,327 74,743 (e) 427,070
Common Units 396,667 (26,758)(g) 369,909
Preferred stock 337,500 -- 337,500
Common stock - par value 6,223 (2)(f) 6,221
Additional paid-in capital 1,778,550 (239,896)(f) 1,538,654
Retained earnings (accumulated deficit) 53,161 (357,394)(i) (304,233)
Notes receivable-common stock purchase (8,971) -- (8,971)
Accumulated other comprehensive gains (losses) (8,996) -- (8,996)
----------- ----------- -----------
Total $ 6,530,734 $ 497,912 $ 7,028,646
=========== =========== ===========
The accompanying notes are an integral part of these statements. For
alphabetical references, please refer to Note 2-Pro Forma Adjustments.
F-20
GENERAL GROWTH PROPERTIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2002
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS - UNAUDITED)
NOTE 1 PRO FORMA BASIS OF PRESENTATION
This unaudited condensed consolidated balance sheet is presented as if (i)
the acquisitions made in 2002 subsequent to June 2002 (JP Realty, Inc. the
properties comprising the GGP-TRS, L.L.C. ("GGP/Teachers") venture (Clackamas
Town Center, Galleria at Tyler, Kenwood Towne Centre and Silver City Galleria),
Prince Kuhio Plaza and Pecanland Mall, had all occurred on June 30, 2002. In
management's opinion, all adjustments necessary to reflect these transactions
have been included.
The cost of the acquired assets and assumed liabilities described in this
Form 8-K/A are based on their respective fair values. The aggregate fair value
of the assets acquired and liabilities assumed in the purchases were
approximately $1,325,000 and $580,000, respectively. The purchase allocation
adjustments made in connection with the development the unaudited pro forma
condensed consolidated financial statements are based on the information
available at this time. Subsequent adjustments and refinements to the allocation
may be made based on additional information.
TOTAL GENERAL GROWTH
HISTORICAL PRO FORMA PROPERTIES, INC.
COMBINED ADJUSTMENTS PRO FORMA
---------- ----------- ----------------
NOTE 2 PRO FORMA ADJUSTMENTS
(a) Investment in Real Estate
Asset additions are as follows:
Prince Kuhio and Pecanland acquisitions ..... $ 87,071 $ 23,572 $ 110,643
JP Realty,Inc ............................... 943,899 193,718 1,137,617
---------- ---------- ----------
$1,030,970 $ 217,290 $1,248,260
========== ========== ==========
Allocated to:
Land ...................................... $ 117,560 $ 184,811 $ 302,371
Buildings and equipment ................... 913,410 32,479 945,889
---------- ---------- ----------
$1,030,970 $ 217,290 $1,248,260
========== ========== ==========
(b) Mortgage Notes and other Debt Payable
Additional debt related to the acquisitions:
JP Realty, Inc. acquisition loan .......... $ 350,000
JP Realty, Inc. assumed debt............... 463,000
GGP/Teachers acquisition loans ............ 150,000
New mortgage loans for JP Realty, Inc.
and Pecanland acquisitions ............. 76,000
----------
$1,039,000
==========
F-21
GENERAL GROWTH PROPERTIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2002
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS, - UNAUDITED)
(c) Reflect reduction in investment in GGP/Homart, Inc. for Prince Kuhio
acquisition by the Company.
(d) Adjustments in other assets and liabilities to reflect acquisitions at their
fair market value.
TOTAL GENERAL GROWTH
HISTORICAL PRO FORMA PROPERTIES, INC.
COMBINED ADJUSTMENTS PRO FORMA
---------- ----------- ----------------
(e) Preferred Units of minority interest
Preferred Price Development Company
Units assumed for a portion of the
JP Realty, Inc. acquisition cost (and reflected
at liquidation value) ................................... $112,327 $ 3,423 $115,750
Existing GGP Limited Partnership
Preferred Units ............................................. 240,000 -- 240,000
Preferred GGP Limited Partnership
Units issued for a portion
of the JP Realty, Inc. acquisition cost .................. -- 71,320 71,320
-------- -------- --------
Total Preferred Units ....................................... $352,327 $ 74,743 $427,070
======== ======== ========
(f) Reflect redemption of JP Realty, Inc. common stock
(g) Common Units of Price Development Company assumed for a portion of the JP
Realty, Inc. acquisition cost.
(h) Reflect the Company's equity investment in GGP/Teachers.
(i) Reflect net effect on retained earnings (accumulated deficit) of all pro
forma adjustments.
F-22