SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------
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) April 22, 1998 (February 27,
1998)
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.)
401 Wilshire Boulevard, Suite 700, Santa Monica, CA 90401
---------------------------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (310) 394-6911
--------------
233 Wilshire Boulevard, Suite 700, Santa Monica, CA 90401
-------------------------------------------------------------
(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 March 4, 1998 regarding the acquisition of twelve regional
malls from the Equitable Life Assurance Society of the United States.
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, 1997 (audited) F-2
Notes to Financial Statements F-3 to F-4
(b) PRO FORMA FINANCIAL INFORMATION (UNAUDITED).
Condensed Combined Statement of Income for
the year ended December 31, 1997 F-5
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 April 23, 1998.
THE MACERICH COMPANY
By: /s/ THOMAS E. O'HERN
------------------------
Thomas E. O'Hern
Senior Vice President and
Chief Financial Officer
3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Equitable Life Assurance Society of the United States:
We have audited the accompanying Historical Statement of Gross Income and
Direct Operating Expenses of The Equitable Life Assurance Society of the
United States Separate Account No. 174 (the Account) for the year ended
December 31, 1997. This historical financial statement is the responsibility
of the Account's management, ERE Yarmouth. Our responsibility is to express
an opinion on this historical 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 historical statement.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation of the historical statement. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying historical statement 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 Account's revenues and expenses.
In our opinion, the historical statement referred to above presents fairly,
in all material respects, the gross income and direct operating expenses as
described in Note 1 of The Equitable Life Assurance Society Separate Account
No. 174 for the year ended December 31, 1997 in conformity with generally
accepted accounting principles.
Price Waterhouse LLP
Atlanta, Georgia
April 15, 1998
F-1
THE EQUITABLE LIFE ASSURANCE SOCIETY
SEPARATE ACCOUNT NO. 174
HISTORICAL STATEMENT OF GROSS INCOME AND
DIRECT OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS)
- --------------------------------------------------------------------------------
Gross Income
Minimum Rent $ 82,109
Common area maintenance reimbursements 17,410
Service recovery income 14,918
Real estate tax reimbursement 10,960
Percentage rent 4,414
Interest income 297
Bad debt expense (942)
Other 2,022
--------
Total gross income 131,188
Direct operating expense (excluding depreciation)
Common area maintenance 17,487
Real estate taxes 14,698
Advertising and promotion 6,916
Utilities 6,515
Property management fees 3,605
Leasing 1,939
Administrative and professional fees 807
Insurance 276
Other 1,163
--------
Total direct operating expenses (excluding depreciation) 53,406
--------
--------
Excess of gross income over direct operating
Expenses (excluding depreciation) $ 77,782
--------
F-2
THE EQUITABLE LIFE ASSURANCE SOCIETY
SEPARATE ACCOUNT NO. 174
NOTES TO HISTORICAL STATEMENT OF GROSS INCOME AND
DIRECT OPERATING EXPENSES
- -------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The accompanying historical statement of gross income and direct operating
expenses reflects the revenues and expenses of the Equitable Life
Assurance Society Separate Account No. 174 (the Account). In accordance
with Regulation S-X, Rule 3-14, items not comparable to the proposed
future operations of the properties, such as depreciation, interest
expense, investment management fees, third party appraisal fees and
financing expenses are excluded from the historical statement of gross
income and direct operating expenses. The Account was established as a
separate account of The Equitable Life Assurance Society of the United
States (Equitable) in conformity with the New York State Insurance Law for
the purpose of acquiring real estate investments on behalf of the Chase
Manhattan Bank, N.A. (the contract holder) as Trustee of the IBM
Retirement Plan (the Plan). Equitable engaged ERE Yarmouth (ERE) to act
as investment manager for the Account. On February 27, 1998, the
Account's real estate assets were purchased by SM Portfolio Partners, a
joint venture between affiliates of The Macerich Company and the Simon
DeBartolo Group.
On June 10, 1997, Equitable sold its wholly-owned subsidiary, ERE, to a
subsidiary of Lend Lease Corporation Limited. ERE operates under the name
ERE Yarmouth (Management) and continues to manage the Account for the
Plan.
At December 31, 1997, approximately 51%, 23% and 12% of the Account's real
estate investments at value are located in the West North Central, East
North Central and Northeast regions, respectively, of the United States as
defined by the National Council of Real Estate Investment Fiduciaries.
The preparation of financial statements in conformity with generally
accepted accounting principles 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.
2. REVENUE RECOGNITION
Rental income from tenants is recognized when contractually due, the total
of which is not materially different from rents calculated under the
straight-line method.
Percentage rents are recognized after the tenants' reported sales have
exceeded the applicable sales breakpoint. Revenues associated with tenant
reimbursement are recognized in the period in which the expenses are
incurred based upon the provision of tenant leases. Lease termination
fees are included in other income and recognized upon termination of a
tenant's lease, which generally coincides with the receipt of cash.
3. ADVERTISING AND PROMOTION
Advertising and promotion costs are expensed as incurred.
F-3
THE EQUITABLE LIFE ASSURANCE SOCIETY
SEPARATE ACCOUNT NO. 174
NOTES TO HISTORICAL STATEMENT OF GROSS INCOME AND
DIRECT OPERATING EXPENSES
- -------------------------------------------------------------------------------
4. PROPERTY MANAGEMENT FEES
Property management fees are non-recoverable fees which are expensed as
incurred.
5. LEASES
Minimum future rentals to be received on real estate properties under
noncancellable operating leases in effect as of December 31, 1997 are as
follows:
YEAR ENDING
DECEMBER 31,
1998 $ 74
1999 69
2000 64
2001 57
2002 51
Thereafter 186
------
Total $ 501
------
F-4
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 twelve malls from the Equitable Life Assurance Society of
the United States (the "ERE/Yarmouth portfolio") 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
(IN THOUSANDS)
PRO FORMA RESULTS
COMPANY PRO FORMA (INCLUDING THE
RESULTS ADJUSTMENT- ERE/YARMOUTH
FOR THE YEAR ERE/YARMOUTH ACQUISITION FOR THE
ENDED PORTFOLIO YEAR ENDED
DEC. 31, 1997 ACQUISITION DEC. 31, 1997
Revenues:
Minimum Rents 142,251 142,251
Percentage Rents 9,259 9,259
Tenant Recoveries 66,499 66,499
Other 3,205 3,205
----------------------------------------
Total Revenues 221,214 221,214
Shopping center expenses 70,901 70,901
REIT general and administrative expenses 2,759 2,759
Depreciation and amortization 41,535 41,535
Interest expense 66,407 4,900 (C) 71,307
-----------------------------------------
Net Income (loss) before minority interest,
uncombined joint ventures and extraordinary loss 39,612 (4,900) 34,712
Gain on sale of asset 1,619 1,619
Minority interest (D) (10,567) (436) (11,003)
Income (loss) from uncombined joint ventures and
Management companies (8,063) 12,776 (B) 4,713
Extraordinary loss on early retirement of debt (555) (555)
-----------------------------------------
Net Income 22,046 7,439 29,485
-----------------------------------------
-----------------------------------------
BASIC EARNINGS PER SHARE:
Net income per share before extraordinary items $0.86 $0.92
-----------------------------------------
-----------------------------------------
Net income per share $0.85 $0.91
-----------------------------------------
-----------------------------------------
Weighted average number of shares outstanding 25,891 6,506 (E) 32,397
-----------------------------------------
-----------------------------------------
DILUTED EARNINGS PER SHARE:
Net income per share before extraordinary items $0.85 $0.91
-----------------------------------------
-----------------------------------------
Net income per share $0.84 $0.90
-----------------------------------------
-----------------------------------------
Weighted average number of shares outstanding 26,312 6,506 32,818
-----------------------------------------
-----------------------------------------
(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 the Acquisition malls is computed on the straight-line
method over the estimated useful life of 40 years.
(C) Interest expense is calculated on the additional $70,000 borrowed on the
Company's line of credit for the closing of this acquisition. Interest is
calculated at LIBOR plus 1.365%, totaling 7.0%
(D) Minority interest represents the 32% ownership interest in the Operating
Partnership not owned by the Company.
(E) Reflects the issuance of equity, the proceeds of which were used for the
ERE/Yarmouth portfolio acquisition.
F-5