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| MAC > SEC Filings for MAC > Form 8-K/A on 8-Feb-2013 | All Recent SEC Filings |
8-Feb-2013
Financial Statements and Exhibits
Listed below are the financial statements, pro forma financial information and exhibits furnished as part of this report:
(a) Financial statements under Rule 3-14 of Regulation S-X
Statements of Revenues and Certain Expenses for the Nine Months Ended September 30, 2012 (Unaudited) and the Year Ended December 31, 2011
Notes to Statements of Revenues and Certain Expenses for the Nine Months Ended September 30, 2012 (Unaudited) and the Year Ended December 31, 2011
(b) Pro forma financial information (Unaudited)
Pro Forma Consolidated Statement of Operations for the Nine Months Ended September 30, 2012
Notes to Pro Forma Consolidated Statement of Operations for the Nine Months Ended September 30, 2012
Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2011
Notes to Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2011
(c) Exhibits.
23.1 Consent of KPMG LLP, dated February 8, 2013
The Board of Directors of
The Macerich Company:
We have audited the accompanying statement of revenues and certain expenses (Historical Summary) of Kings Plaza (the Property) for the year ended December 31, 2011. This Historical Summary is the responsibility of the Property's management. Our responsibility is to express an opinion on this Historical Summary 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 Historical Summary is free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary, 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 as described in note 1. The presentation is not intended to be a complete presentation of the Property's revenues and certain expenses.
In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the revenues and certain expenses described in note 1 of Kings Plaza for the year ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
Los Angeles, California
February 8, 2013
KINGS PLAZA
STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(Dollars in thousands)
For the Nine Months
Ended September 30,
2012 For the Year Ended
(Unaudited) December 31, 2011
Revenues:
Minimum rents $ 26,928 $ 36,572
Percentage rents 113 147
Tenant recoveries 20,781 28,054
Other 2,787 4,247
Total revenues 50,609 69,020
Certain expenses:
Operations and maintenance 4,609 6,479
Real estate taxes 9,237 11,723
General and administrative 1,263 1,238
Ground rent 77 103
Insurance 527 670
Utilities 4,309 7,098
Security 813 1,363
Total certain expenses 20,835 28,674
Revenues in excess of certain expenses $ 29,774 $ 40,346
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The accompanying notes are an integral part of these statements of revenues and certain expenses.
NINE MONTHS ENDED SEPTEMBER 30, 2012 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31,
1. Summary of Significant Accounting Policies:
Basis of Presentation:
The accompanying statements of revenues and certain expenses relate to the operations of Kings Plaza, a 1,198,000 square foot regional shopping center in Brooklyn, New York, which is anchored by Macy's, Sears and Lowe's. The Macerich Company purchased Kings Plaza on November 28, 2012 and acquired, among other things, the real property, improvements, personal property and power plant.
The accompanying statements of revenues and certain expenses have been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and, accordingly are not representative of the actual results of operations of Kings Plaza for the nine months ended September 30, 2012 and the year ended December 31, 2011 due to the exclusion of the following expenses, which may not be comparable to the proposed future operations of the property:
† Depreciation and amortization,
† Management fees, and
† Mortgage interest expense since the center was refinanced on the date of acquisition.
Revenues:
Minimum rental revenues are recognized on a straight-line basis over the terms of the related leases. Percentage rents are recognized and accrued when tenants' specified sales targets have been met.
Estimated recoveries from certain tenants for their pro rata share of real estate taxes, insurance and other shopping center operating expenses are recognized as revenues in the period the applicable expenses are incurred. Other tenants pay a fixed rate and these tenant recoveries are recognized as revenues on a straight-line basis over the terms of the related leases.
Management Estimates:
Management has made a number of estimates and assumptions relating to the reporting and disclosure of revenues and certain expenses during the reporting period to prepare the statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles. Actual results could differ from these estimates.
Unaudited Interim Statement:
The statement of revenues and certain expenses for the nine months ended September 30, 2012 is unaudited. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the statement of revenues and certain expenses for the interim period have been made.
2. Future Rental Revenues:
Under existing non-cancelable operating lease agreements, tenants are committed to pay the following minimum rental payments to Kings Plaza:
Year Ending December 31,
2012 $ 30,302
2013 28,199
2014 25,937
2015 24,893
2016 23,823
Thereafter 137,579
$ 270,733
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3. Commitments and Contingencies:
The marina portion of Kings Plaza is subject to a non-cancelable operating ground lease. The lease expires on May 28, 2018, subject to options to extend the term of the lease. These extension options are at management's discretion, subject to certain conditions, which management believes will be met. Minimum future rental payments required under the lease are as follows:
Year Ending December 31,
2012 $ 103
2013 103
2014 103
2015 103
2016 103
Thereafter 147
$ 662
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4. Subsequent Events:
The management of Kings Plaza evaluated subsequent events through February 8, 2013, the date that these statements of revenues and certain expenses were issued.
The Macerich Company (the "Company")
The following unaudited pro forma consolidated financial information has been prepared to give effect to the Company's acquisition of Kings Plaza. The Company acquired Kings Plaza on November 28, 2012 for a final purchase price of $756.0 million. The purchase price was funded by a cash payment of $726.0 million and the issuance of $30.0 million of restricted common stock of the Company. The cash payment was funded by the placement of a $500.0 million mortgage note on the property and borrowings under the Company's line of credit.
The pro forma consolidated balance sheet has been presented as if the acquisition occurred on September 30, 2012 and the pro forma statements of operations have been presented as if the acquisition had occurred on January 1, 2011.
This pro forma consolidated financial information should be read in conjunction with the Company's consolidated financial statements included in the Company's Form 10-K for the year ended December 31, 2011, the Company's Form 10-Q for the quarterly period ended September 30, 2012, as filed with the Securities and Exchange Commission, and the statements of revenues and certain expenses of Kings Plaza and related notes thereto included elsewhere in this filing.
The purchase allocation adjustments made in connection with the unaudited pro forma consolidated financial statements are based on the information available at this time. Subsequent adjustments to the allocation may be made based on additional information.
The pro forma consolidated financial statements do not purport to represent the Company's financial position or results of operations that would actually have occurred assuming the acquisition of Kings Plaza along with the related financing transactions had all occurred on January 1, 2011; nor do they purport to project the Company's financial position or results of operations as of any future date or for any future period.
THE MACERICH COMPANY
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS OF SEPTEMBER 30, 2012
(Dollars in thousands)
The Company Pro Forma
(a) Pro Forma Adjustments Total
ASSETS:
Property, net $ 5,942,141 $ 714,589 (b) $ 6,656,730
Cash and cash equivalents 76,553 - 76,553
Restricted cash 61,743 2,240 (c) 63,983
Marketable securities 24,209 - 24,209
Tenant and other receivables, net 108,329 - 108,329
Deferred charges and other assets, net 359,228 66,653 (b)
7,901 (c)
4,554 (d) 438,336
Loans to unconsolidated joint ventures 3,334 - 3,334
Due from affiliates 7,595 - 7,595
Investments in unconsolidated joint
ventures 1,026,724 - 1,026,724
Total assets $ 7,609,856 $ 795,937 $ 8,405,793
LIABILITIES AND EQUITY:
Mortgage notes payable:
Related parties $ 275,871 $ - $ 275,871
Others 3,109,402 500,000 (c) 3,609,402
Total 3,385,273 500,000 3,885,273
Bank and other notes payable 404,239 235,786 (e) 640,025
Accounts payable and accrued expenses 74,754 - 74,754
Other accrued liabilities 278,198 25,242 (b)
4,909 (d) 308,349
Distributions in excess of investments
in unconsolidated joint ventures 86,666 - 86,666
Co-venture obligation 95,018 - 95,018
Total liabilities 4,324,148 765,937 5,090,085
Commitments and contingencies
Equity:
Stockholders' equity:
Common stock 1,363 5 (f) 1,368
Additional paid-in capital 3,671,351 29,995 (f) 3,701,346
Accumulated deficit (734,684 ) - (734,684 )
Total stockholders' equity 2,938,030 30,000 2,968,030
Noncontrolling interests 347,678 - 347,678
Total equity 3,285,708 30,000 3,315,708
Total liabilities and equity $ 7,609,856 $ 795,937 $ 8,405,793
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The accompanying notes are an integral part of this pro forma consolidated balance sheet (unaudited).
(a) This information represents the Company's historical consolidated balance sheet as of September 30, 2012, which was included in the Company's previously filed Quarterly Report on Form 10-Q for the quarter ended September 30, 2012.
(b) Includes the pro forma effect of the Company's acquisition of Kings Plaza. The purchase price was allocated to assets acquired and liabilities assumed based on fair values as follows:
Property, net $ 714,589 Deferred charges and other assets, net 66,653 Total assets acquired 781,242 Other accrued liabilities 25,242 Total liabilities assumed 25,242 Fair value of assets acquired, net $ 756,000 |
The purchase price allocation of Kings Plaza is preliminary and subject to change.
(c) Represents the pro forma effect of the Company's placement of a $500,000 mortgage note payable on the property. The mortgage note payable bears interest at an effective interest of 3.67% and matures on December 3, 2019. In accordance with the loan agreement, the Company has established a restricted cash account for $2,240 at the date of acquisition. The Company incurred origination costs of $7,901 in placement of this loan which are included in deferred charges and other assets, net, in the accompanying pro forma consolidated balance sheet.
(d) Includes certain pro ration adjustments related to the acquisition.
(e) Represents additional borrowings under the Company's line of credit to fund the acquisition.
(f) Represents the value of 535,265 restricted shares of common stock of the Company issued as part of the purchase price on November 28, 2012.
THE MACERICH COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012
(Dollars in thousands, except per share amounts)
The Company Kings Plaza Pro Forma Pro Forma
(a) (b) Adjustments Total
Revenues:
Minimum rents $ 356,551 $ 26,928 $ (38 )(c) $ 383,441
Percentage rents 11,938 113 - 12,051
Tenant recoveries 197,924 20,781 - 218,705
Management Companies 30,730 - - 30,730
Other 33,017 2,787 - 35,804
Total revenues 630,160 50,609 (38 ) 680,731
Expenses:
Shopping center and operating
expenses 198,258 20,835 255 (d) 219,348
Management Companies'
operating expenses 66,953 - - 66,953
REIT general and
administrative expenses 15,235 - - 15,235
Depreciation and amortization 217,548 - 15,776 (e) 233,324
497,994 20,835 16,031 534,860
Interest expense:
Related parties 11,588 - - 11,588
Other 116,855 - 18,473 (f) 135,328
128,443 - 18,473 146,916
Total expenses 626,437 20,835 34,504 681,776
Equity in income of
unconsolidated joint ventures 68,624 - - 68,624
Co-venture expense (4,462 ) - - (4,462 )
Income tax benefit 2,159 - - 2,159
Gain on remeasurement, sale or
write down of assets, net 40,603 - - 40,603
Income from continuing
operations 110,647 29,774 (34,542 ) 105,879
Less income from continuing
operations attributable to
noncontrolling interests 11,838 - (398 ) 11,440
Income from continuing
operations attributable to the
Company $ 98,809 $ 29,774 $ (34,144 ) $ 94,439
Earnings per common share
attributable to Company:
Income (loss) from continuing
operations - basic $ 0.74 $ (0.04 ) $ 0.70
Income (loss) from continuing
operations - diluted $ 0.74 $ (0.04 ) $ 0.70
Weighted average number of
common shares outstanding:
Basic 133,091,000 535,265 (g) 133,626,265
Diluted 133,187,000 535,265 (g) 133,722,265
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The accompanying notes are an integral part of this pro forma consolidated statement of operations (unaudited).
(a) This information represents the Company's historical consolidated statement of operations for the nine months ended September 30, 2012, which was included in the Company's previously filed Quarterly Report on Form 10-Q for the quarter ended September 30, 2012.
(b) This information represents revenues and certain expenses of Kings Plaza for the nine months ended September 30, 2012, which was included in this Current Report on Form 8-K/A.
(c) Represents the pro forma amortization of above and below market leases based on the purchase price allocation of Kings Plaza, which is based on the information available at this time. Subsequent adjustments to the allocation may be made based on additional information.
(d) Represents the pro forma amortization of a below market ground lease based on the purchase price allocation of Kings Plaza, which is based on the information available at this time. Subsequent adjustments to the allocation may be made based on additional information.
(e) Represents the pro forma depreciation and amortization expense based on the purchase price allocation of Kings Plaza, which is based on the information available at this time. Subsequent adjustments to the allocation may be made based on additional information.
(f) Represents interest expense on the $500,000 mortgage loan placed on the property and interest expense on the additional borrowings on the Company's line of credit.
(g) Represents the restricted shares of common stock of the Company issued as part of the purchase price of Kings Plaza.
THE MACERICH COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 2011
(Dollars in thousands, except per share amounts)
The Company Kings Plaza Pro Forma Pro Forma
(a) (b) Adjustments Total
Revenues:
Minimum rents $ 429,007 $ 36,572 $ 795 (c) $ 466,374
Percentage rents 19,175 147 - 19,322
Tenant recoveries 241,776 28,054 - 269,830
Management Companies 40,404 - - 40,404
Other 33,009 4,247 - 37,256
Total revenues 763,371 69,020 795 833,186
Expenses:
Shopping center and operating
expenses 242,298 28,674 340 (d) 271,312
Management Companies' operating
expenses 86,587 - - 86,587
REIT general and administrative
expenses 21,113 - - 21,113
Depreciation and amortization 252,075 - 22,648 (e) 274,723
602,073 28,674 22,988 653,735
Interest expense:
Related parties 16,743 - - 16,743
Other 162,965 - 24,475 (f) 187,440
179,708 - 24,475 204,183
Loss on early extinguishment of
debt, net 10,588 - - 10,588
Total expenses 792,369 28,674 47,463 868,506
Equity in income of
unconsolidated joint ventures 294,677 - - 294,677
Co-venture expense (5,806 ) - - (5,806 )
Income tax benefit 6,110 - - 6,110
Loss on remeasurement, sale or
write down of assets, net (22,037 ) - - (22,037 )
Income from continuing
operations 243,946 40,346 (46,668 ) 237,624
Less income from continuing
operations attributable to
noncontrolling interests 14,965 - (542 ) 14,423
Income from continuing
operations attributable to the
Company $ 228,981 $ 40,346 $ (46,126 ) $ 223,201
Earnings per common share
attributable to Company:
Income (loss) from continuing
operations - basic $ 1.70 $ (0.05 ) $ 1.65
Income (loss) from continuing
operations - diluted $ 1.70 $ (0.05 ) $ 1.65
Weighted average number of
common shares outstanding:
Basic 131,628,000 535,265 (g) 132,163,265
Diluted 131,628,000 535,265 (g) 132,163,265
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The accompanying notes are an integral part of this pro forma consolidated statement of operations (unaudited).
(a) This information represents the Company's historical consolidated . . .
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