SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
- --------------------------------------------------------------------------------
FORM 8-K/A
AMENDMENT NO. 2
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported)
September 11, 1998, (July 1, 1998)
THE MACERICH COMPANY
--------------------
(Exact name of Registrant as Specified in Charter)
Maryland 1-12504 94-4448705
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of (Commission (IRS employer
Incorporation) file number) Identification No.)
401 Wilshire Boulevard, Suite 700, Santa Monica, CA 90401
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (310) 394-6911
--------------
N/A
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
1
This Form 8-K/A, Amendment No. 2, is being filed for the purpose of filing the
financial statements and pro forma financial information required by Item 7 with
respect to the Current Report on Form 8-K filed by the registrant on July 10,
1998 regarding the acquisition of a regional mall from Westpal, L.L.C.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired - Westside Pavilion
Independent Auditors' Report F-1
Statements of Revenues and
Certain Expenses for the year ended
December 31, 1997 and the six months
ended June 30, 1998 (unaudited) F-2
Notes to Statements of Revenues F-3
and Certain Expenses
(b) Pro Forma Financial Information (unaudited)
Condensed Combined Statement of Operations for
the year ended December 31, 1997 F-4
Condensed Combined Statement of Operations for
the six months ended June 30, 1998 F-5
Condensed Combined Balance Sheet as of June 30, 1998 F-6
(c) Exhibits
23.1 Independent Auditors' Consent
2
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, The
Macerich Company has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized, in the City of Santa Monica, State of
California, on September 11, 1998.
THE MACERICH COMPANY
By: /s/ Thomas E. O'Hern
------------------------------
Thomas E. O'Hern
Senior Vice President and
Chief Financial Officer
3
INDEPENDENT AUDITORS' REPORT
To the Stockholders of Westpal, L.L.C.:
We have audited the statement of revenues and certain expenses of Westside
Pavilion (owned by Westpal, L.L.C.) for the year ended December 31, 1997. This
financial statement is the responsibility of Westside Pavilion's management.
Our responsibility is to express an opinion on the financial statement 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 financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion in the filing of Form 8-K/A of The Macerich
Company as a result of the acquisition of this property). Material amounts,
described in Note 1 to the statement of revenues and certain expenses, that
would not be comparable to those resulting from future operations of the
acquired property are excluded, and the statement is not intended to be a
complete presentation of the acquired property's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenues and certain expenses of Westside Pavilion
for the year ended December 31, 1997 in conformity with the basis of accounting
described above.
Deloitte & Touche LLP
July 29, 1998
Chicago, Illinois
F-1
WESTSIDE PAVILION
STATEMENTS OF REVENUES AND CERTAIN EXPENSES
YEAR ENDED DECEMBER 31, 1997 AND THE
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
1998 1997
(UNAUDITED)
REVENUES:
Mimimum rent $ 7,171,779 $ 14,312,922
Operating expenses recoveries 4,903,537 8,550,113
Percentage rent 32,280 33,102
Interest income 130,019 172,586
Other income 67,722 183,909
------------ ------------
Total revenues 12,305,337 23,252,632
CERTAIN EXPENSES:
Property operating 2,893,374 5,729,077
Real estate taxes 953,209 1,896,802
General and administrative 416,165 637,738
------------ ------------
Total certain expenses 4,262,748 8,263,617
------------ ------------
REVENUES IN EXCESS OF CERTAIN EXPENSES $ 8,042,589 $ 14,989,015
------------ ------------
------------ ------------
See notes to statements of revenues and certain expenses.
F-2
WESTSIDE PAVILION
NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES
YEAR ENDED DECEMBER 31, 1997 AND THE
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Westside Pavilion, a regional shopping center located in Los Angeles,
California, was acquired by The Macerich Company, effective July 1, 1998.
The statements of revenues and certain expenses include information related
to the operations of Westside Pavilion for the period from January 1, 1997
through December 31, 1997 and January 1, 1998 through June 30, 1998
(unaudited) as recorded by the previous owner, Westpal, L.L.C.
The accompanying historical financial statement information is presented in
conformity with Rule 3-14 of the Securities and Exchange Commission.
Accordingly, the statements are not representative of the actual operations
for the year ended December 31, 1997 and the six months ended June 30, 1998
(unaudited) as certain expenses, which may not be comparable to the
expenses expected to be incurred in the future operations of the acquired
property, have been excluded. Expenses excluded consist of interest,
management fees, income taxes, and depreciation, and other costs not
directly related to the future operations of the acquired property.
MANAGEMENT'S USE OF ESTIMATES - The preparation of the statements requires
management to make estimates and assumptions that affect the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
RENTAL INCOME - Minimum rents are recognized on an accrual basis as earned,
which approximates the straight-line basis.
PROPERTY OPERATING EXPENSES - Property operating expenses consist primarily
of utilities, insurance, repairs and maintenance, security and safety,
cleaning, and other administrative expenses.
2. OPERATING LEASES
Operating revenue is principally obtained from tenant rentals under
noncancelable operating leases. Future minimum rentals under noncancelable
operating leases as of December 31, 1997 are approximately as follows:
1998 $ 13,104,600
1999 12,915,217
2000 12,331,991
2001 11,337,586
2002 9,999,189
Thereafter 41,062,418
-------------
Total $ 100,751,001
-------------
-------------
- --------------------------------------------------------------------------------
F-3
The following unaudited pro forma statement of operations has been prepared for
the year ended December 31, 1997. This statement gives effect to the acquisition
of the Westside Pavilion Mall as if the acquisition was completed on January 1,
1997. This statement does not purport to be indicative of the results of
operations that actually would have resulted if the Registrant had owned the
mall throughout the period presented.
THE MACERICH COMPANY
UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS
(ALL AMOUNTS IN THOUSANDS)
Company results Pro forma Pro forma Results
for the year Adjustment- for the year
ended Westside Pavilion ended
DEC 31, 1997 Acquisition DEC 31, 1997
------------ ----------- ------------
(A)
Revenues:
Minimum Rents 142,251 14,313 156,564
Percentage Rents 9,259 33 9,292
Tenant Recoveries 66,499 8,550 75,049
Other 3,205 356 3,561
------------------------------------------------------------------
Total revenues 221,214 23,252 244,466
Shopping center expenses 70,901 8,264 79,165
REIT general and administrative expenses 2,759 0 2,759
Depreciation and amortization 41,535 3,197 (B) 44,732
Interest expense 66,407 11,585 (C) 77,992
------------------------------------------------------------------
Net income (loss) before minority interest,
unconsolidated joint ventures and extraordinary loss 39,612 206 39,818
Gain on sale of asset 1,619 1,619
31.88% Minority interest (D) (10,567) (66) (10,633)
Income (loss) from unconsolidated joint
ventures and management companies (8,063) (8,063)
Extraordinary loss on early retirement of debt (555) (555)
------------------------------------------------------------------
Net income 22,046 140 22,186
------------------------------------------------------------------
------------------------------------------------------------------
BASIC EARNINGS PER SHARE:
Net income per share before extraordinary items $0.86 $0.87
--------------- --------------
--------------- --------------
Net income per share $0.85 $0.86
--------------- --------------
--------------- --------------
Weighted average number of shares outstanding 25,891 25,891
------------------------------------------------------------------
------------------------------------------------------------------
DILUTED EARNINGS PER SHARE:
Net income per share before extraordinary items $0.85 $0.84
--------------- --------------
--------------- --------------
Net income per share $0.84 $0.85
--------------- --------------
--------------- --------------
Weighted average number of shares outstanding 38,400 38,400
------------------------------------------------------------------
------------------------------------------------------------------
(A) This information should be read in conjunction with The Macerich
Company's (the Company) report on Form 10-K for the year ended
December 31, 1997.
(B) Depreciation on Westside Pavilion is computed on the straight-line
method over the estimated useful life of 40 years.
(C) Interest expense is based on the concurrent placed debt secured by
Westside Pavilion at the time of acquisition. The loan amount
was $100,000 with an effective interest rate of 6.65%. In addition,
$70,500 was borrowed on the Company's line of credit at 7% as of
June 30, 1998.
(D) Minority interest represents the ownership interest in the Operating
Partnership not owned by the Company.
F-4
The following unaudited pro forma statement of operations has been prepared for
the six months ended June 30, 1998. This statement gives effect to the
acquisition of the Westside Pavilion Mall as if the acquisition was completed on
January 1, 1998. This statement does not purport to be indicative of the
results of operations that actually would have resulted if the Registrant had
owned the mall throughout the period presented.
THE MACERICH COMPANY
UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS
(ALL AMOUNTS IN THOUSANDS)
Company results Pro forma Pro forma Results
for the six months Adjustment- for the six months
ended Westside Pavilion ended
June 30, 1998 Acquisition June 30, 1998
------------- ----------- -------------
(A)
Revenues:
Minimum Rents 79,629 7,172 86,801
Percentage Rents 4,250 32 4,282
Tenant Recoveries 36,822 4,903 41,725
Other 1,881 198 2,079
------------------------------------------------------------------
Total revenues 122,582 12,305 134,887
Shopping center expenses 38,001 4,263 42,264
REIT general and administrative expenses 2,177 2,177
Depreciation and amortization 23,607 1,598 (B) 25,205
Interest expense 41,212 5,793 (C) 47,005
------------------------------------------------------------------
Net income (loss) before minority interest,
unconsolidated joint ventures and extraordinary loss 17,585 651 18,236
Gain on sale of asset 9 9
23.77% Minority interest (D) (6,190) (517) (6,707)
Income (loss) from unconsolidated joint
ventures and management companies 5,582 5,582
Extraordinary loss on early retirement of debt (90) (90)
------------------------------------------------------------------
Net income 16,896 134 17,030
less dividends to preferred shareholders 2,706 2,706
------------------------------------------------------------------
Net income available to common shareholders 14,190 134 14,324
------------------------------------------------------------------
------------------------------------------------------------------
BASIC EARNINGS PER SHARE:
Net income per share before extraordinary items $0.49 $0.49
--------------- --------------
--------------- --------------
Net income per share $0.49 $0.49
--------------- --------------
--------------- --------------
Weighted average number of shares outstanding 28,975 28,975
------------------------------------------------------------------
------------------------------------------------------------------
DILUTED EARNINGS PER SHARE:
Net income per share before extraordinary items $0.49 $0.50
--------------- --------------
--------------- --------------
Net income per share $0.49 $0.50
--------------- --------------
--------------- --------------
Weighted average number of shares outstanding 41,682 41,682
------------------------------------------------------------------
------------------------------------------------------------------
(A) This information should be read in conjunction with The Macerich
Company's (the Company) report on Form 10-Q for the quarter ended
June 30, 1998.
(B) Depreciation on Westside Pavilion is computed on the straight-line
method over the estimated useful life of 40 years.
(C) Interest expense is based on the concurrent placed debt secured by
Westside Pavilion at the time of acquisition. The loan amount
was $100,000 with an effective interest rate of 6.65%. In addition,
$70,500 was borrowed on the Company's line of credit at 7% as of
June 30, 1998.
(D) Minority interest represents the ownership interest in the Operating
Partnership not owned by the Company.
F-5
THE MACERICH COMPANY
UNAUDITED PRO FORMA
CONDENSED COMBINED BALANCE SHEET
(ALL AMOUNTS IN THOUSANDS)
Pro forma Pro forma
The Macerich Adjustment- Condensed
Company Westside Balance Sheet
as reported Pavilion
at June 30, 1998 Acquisition at June 30, 1998
---------------- ----------- ----------------
Gross property 1,742,436 170,500 1,912,936
Total assets 1,957,382 100,000 2,057,382
Mortgages and loans 1,188,791 100,000 1,288,791
Minority interest 161,680 161,680
Preferred stock 250,000 250,000
Common stock 325 325
Additional paid in capital 305,934 305,934
Total liabilities and shareholder equity 1,957,382 100,000 2,057,382
F-6
EXHIBIT INDEX
Exhibit
Number Description Page
- ------- ----------- ----
23.1 Independent Auditors' Consent
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
The Macerich Company on Forms S-3 (File Nos. 333-21157 and 333-38721) and
Forms S-8 (File Nos. 33-84040, 33-84038, 333-40667, 33-3584, 333-42309, and
333-42303) of our report dated July 29, 1998 on our audit of the Statement of
Revenues and Certain Expenses of Westside Pavilion for the year ended
December 31, 1997, which is included in this Form 8-K/A of The Macerich
Company dated September 11, 1998.
Deloitte & Touche LLP
September 11, 1998
Chicago, Illinois
