SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K/A
AMENDMENT NO. 1
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) October 15, 1997
(August 6, 1997)
THE MACERICH COMPANY
(Exact Name of Registrant as Specified in Charter)
Maryland 1-12504 95-4448705
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
233 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. 1, 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 August 15, 1997 regarding
the acquisition of Stonewood Mall. The financial information also
includes financial statements for South Towne Center, acquired on
March 26, 1997.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
(a) Financial Statement of Business Acquired.
SOUTH TOWNE CENTER AND SOUTH TOWNE MARKETPLACE
Report of Independent Accountants F-1
Statement of Revenues and
Certain Expenses for the year
ended December 31, 1996 (audited) F-2
Notes to Financial Statements F-3 to F-5
(b) Pro Forma Financial Information (Unaudited).
Condensed Combined Statement of Income for
the year ended December 31, 1996 F-6
Condensed Combined Statement of Operations
for the six months ended June 30, 1997 F-7
Condensed Combined Balance Sheet as of
June 30, 1997 F-8
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 October
15,1997.
THE MACERICH COMPANY
By: /s/Thomas E. O'Hern
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Thomas E. O'Hern
Senior Vice President and
Chief Financial Officer
3
Report of Independent Auditors
To the Management of Macerich, Inc.
We have audited the combined statement of revenue and certain
expenses of South Towne Center and South Towne Marketplace ("the
Properties") as described in Note 1 for the year ended December 31,
1996. The combined statement of revenue and certain expenses is
the responsibility of the Properties' management. Our
responsibility is to express an opinion on the combined statement
of revenue and certain expenses 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
combined financial statement is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures made in the combined statement of revenue
and certain expenses. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall combined financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying combined statement of revenue and certain expenses
was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission, as described
in Note 1, and is not intended to be a complete presentation of the
Properties' revenue and expenses.
In our opinion, the combined statement of revenue and certain
expenses referred to above presents fairly, in all material
respects, the combined revenue and certain expenses, as described
in Note 1, for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
February 13, 1997
F-1
South Towne Center
and
South Towne Marketplace
Combined Statement of Revenues and Certain Expenses
For the Year Ended December 31, 1996
Revenue:
Base rents $5,220,424
Percentage rents 1,399,844
Expense reimbursements 2,022,291
Other 995,889
Total revenue 9,638,448
Expenses:
Repair and maintenance 1,086,263
Property operating 774,569
Property taxes 692,709
Promotion 477,819
Insurance 67,359
Total expenses 3,098,719
Revenue in excess of
certain expenses $6,539,729
See accompanying notes.
F-2
South Towne Investors
(an Illinois Limited Partnership)
and
ZML-South Towne Vacant, Inc. ("Marketplace")
Notes to Financial Statements
December 31, 1996
1. Summary of Significant Accounting Policies
The following is a summary of certain significant accounting
policies followed in the preparation of the accompanying combined
statement of revenue and certain expenses (the "Statement"). The
Statement is a representation of the management of South Towne
Center and South Towne Marketplace (the "Properties"), which is
responsible for its integrity and objectivity. For the year ended
December 31, 1996, South Towne Center contained approximately
695,000 square feet and was 94% occupied. South Towne Marketplace
contained approximately 305,000 square feet and was 100% occupied.
The Properties, which are shopping centers, are located in Sandy,
Utah.
Basis of Presentation
The Statement includes the combined revenue and certain expenses of
the Properties. The Statement has been prepared for the purpose of
complying with the rules and regulations of the Securities and
Exchange Commission. Accordingly, depreciation, interest and
management fees are not presented.
Use of Estimates
The preparation of the Statement in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of
revenue and certain expenses during the reporting period. Actual
results could differ from these estimates.
F-3
South Towne Investors
(an Illinois Limited Partnership)
and
ZML-South Towne Vacant, Inc. ("Marketplace")
Notes to Financial Statements (continued)
December 31, 1996
Summary of Significant Accounting Policies (continued)
Business Activity
Equities Properties and Development L.P., an affiliate of the
Properties, manages the shopping centers and, on behalf of the
Properties, leases tenant space under noncancellable operating
leases. The terms of the leases vary with the tenants. Legal fees
of $98,000 were paid to Rosenberg & Liebentritt P.C., an affiliate
of the Properties, related to tenant matters.
Revenue Recognition
Base rents attributable to leases are recorded when due from
tenants and are recorded on a straight-line basis. For the year
ended December 31, 1996, $453,000 of base rents in excess of
amounts billed were recognized as revenue. Certain of the leases
provide for additional rental revenue ("Percentage Rents") to be
paid based upon the level of sales achieved by the lessee. These
Percentage Rents are reflected on the accrual basis. The leases
also typically provide for tenant reimbursement of common area
maintenance and other operating expenses, which are included in the
accompanying Statement as expense reimbursements.
Development of South Towne Marketplace
For the first nine months of 1996, South Towne Marketplace was
under development. The shopping center was considered
substantially complete on September 30, 1996. All costs, including
real estate taxes and operating costs, were capitalized prior to
September 30, 1996, and the accompanying Statement only includes
the operations of South Towne Marketplace for the period from
October 1, 1996 to December 31, 1996, which includes revenue of
$523,000, expenses of $96,000 and revenues in excess of certain
expenses of $427,000.
F-4
South Towne Investors
(an Illinois Limited Partnership)
and
ZML-South Towne Vacant, Inc. ("Marketplace")
Notes to Financial Statements (continued)
December 31, 1996
1. Minimum Future Rentals
Minimum future rental revenue for the five years subsequent to
December 31, 1996, under noncancellable operating lease agreements,
are as follows (dollars in thousands):
1997 $ 6,632
1998 6,913
1999 7,224
2000 7,213
2001 7,113
Thereafter 49,993
$85,088
F-5
The following unaudited pro forma statement of operations has been prepared for the year ended December 31, 1996.
This statement gives effect to the acquisitions of South Towne Center and Stonewood Mall (the "Acquisition
Centers") as if the acquisitions were completed on January 1, 1996. This statement does not purport to be indicative
of the results of operations that actually would have resulted if the Registrant had owned those malls throughout the
period presented. This statement should be read in conjunction with the financial statements and notes thereto
included elsewhere herein.
The Macerich Company
Unaudited Pro Forma
Condensed Combined Statement of Operations
(all amounts in thousands)
Company results Pro forma Pro forma Pro forma
For the year Adjustment- Adjustment- Results
Ended South Towne Stonewood (Including the
December 31, Center Mall Acquisition Mall)
1996 Acquisition Acquisition December 31, 1996
(A)
Revenues:
Minimum Rents 99,061 5,220 8,491 112,772
Percentage Rents 6,142 1,400 469 8,011
Tenant Recoveries 47,648 2,022 2,868 52,538
Other 2,208 996 235 3,439
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Total revenues 155,059 9,638 12,063 176,760
Shopping center
expenses 50,792 3,099 3,202 57,093
REIT general and
administrative
expenses 2,378 2,378
Depreciation and
amortization 32,591 1,885 (B) 1,769 (B) 36,245
Interest expense 42,353 6,615 (c) 6,210 (c) 55,178
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Net income (loss)
before minority
interest,extraordinary
items and uncombined
joint ventures and
management
companies 26,945 (1,961) 882 25,866
Minority interest (D)(10,975) 720 (324) (10,579)
Income from
uncombined joint
ventures and management
companies 3,256 0 0 3,256
Extraordinary loss
on early
extinguishment
of debt (315) (315)
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Net income 18,911 (1,241) 558 18,228
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-------- ------- ------- --------
Net income
per share -
before
extraordinary items $0.92 $0.89
-------- --------
-------- --------
Net income per share $0.91 $0.88
-------- --------
-------- --------
Weighted average
number of shares
of common stock
outstanding 20,781 20,781
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(A) This information should be read in conjunction with The Macerich Company's (the "Company")
report on Form 10-K for the period ended December 31, 1996.
(A) Depreciation on the Acquisition malls is computed on the straight-line method over the estimated
useful life of 39 years.
(C) Interest expense is calculated assuming the entire purchase price was debt at a rate of Libor plus 1.25%.
(D) Minority interest represents the limited partners ownership interest in the Operating Partnership.
F-6
The following unaudited pro forma statement of operations has been prepared for the six months ended June 30, 1997.
This statement gives effect to the acquisitions of South Towne Center and Stonewood Mall (the "Acquisition Centers")as
if the acquisitions were 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 those malls throughout the period
presented. This statement should be read in conjunction with the financial statements and notes thereto included
elsewhere herein.
The Macerich Company
Unaudited Pro Forma
Condensed Combined Statement of Operations
(all amounts in thousands)
Pro forma Results
(Including the
Company results Pro forma Pro forma Acquisiton Centers)
for the six Adjustment- Adjustment- for the six
months ended South Towne Center Stonewood Mall months ended
June 30, 1997 Acquisition Acquisition June 30 , 1997
(A) (B) (B)
Revenues:
Minimum Rents 65,554 1,419 4,322 71,295
Percentage Rents 4,157 93 50 4,300
Tenant Recoveries 30,913 507 1,428 32,848
Other 2,029 19 72 2,120
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Total revenues 102,653 2,038 5,872 110,563
Shopping center
expenses 31,934 728 1,445 34,107
REIT general and
administrative
expenses 1,189 1,189
Depreciation and
amortization 19,681 471 (C) 885 (C) 21,037
Interest expense 31,163 1,654 (D) 3,105 (D) 35,922
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Net income (loss)
before minority
interest, uncombined
joint ventures
and extraordinary
loss 18,686 (815) 437 18,308
Minority interest (E) (6,323) 260 (139) (6,203)
Income from uncombined
joint ventures and
management companies 1,073 1,073
Extraorindary loss on
early retirement of
debt (512) (512)
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Net income 12,924 (555) 298 12,667
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Net income per
share before
extraordinary
loss $0.51 $0.50
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Net income
per share $0.50 $0.49
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Weighted average
number of shares
outstanding 25,901 25,901
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(A) This information should be read in conjunction with The Macerich Company's (the "Company")
report on Form 10-Q for the period ended June 30, 1997.
(B) Reflects results of operations on South Towne Center from January 1 to March 26, 1997.
The mall was acquired on March 27, 1997. Stonewood Mall was acquired on August 6, 1997.
The pro forma results above include Stonewood Mall from January 1 to June 30, 1997.
(C) Depreciation on the Acquisition malls is computed on the straight-line method over the estimated
useful life of 39 years.
(D) Interest expense is calculated assuming the entire purchase price was debt at a rate of Libor plus 1.25%.
(E) Minority interest represents the 38% ownership interest in the Operating Partnership not owned by the Company
F-7
The Macerich Company
Unaudited Pro Forma
Condensed Combined Balance Sheet
(all amounts in thousands)
Pro forma Condensed
Pro forma Balance Sheet
The Macerich Adjustment- (Including Stonewood
Company Stonewood Mall and South Towne
as reported Mall Center Acquisitions)
June 30, 1997 Acquisition June 30, 1997
Gross property 1,381,577 92,000 1,473,577
Total assets 1,269,800 92,000 1,361,800
Mortgages and loans 891,851 92,000 983,851
Minority interest 107,750 107,750
Common stock 257 257
Additional paid
in capital 231,616 231,616
Total liabilities
and
shareholder equity 1,269,800 92,000 1,361,800
F-8
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