UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended June 30, 2004

 

 

 

THE MILLS CORPORATION

THE MILLS LIMITED PARTNERSHIP

(Exact name of registrants as specified in their charters)

 

Delaware Delaware		1-12994 000-50694		52-1802283 52-1873369
(State or other jurisdiction of incorporation or organization)		(Commission File Nos.)		(I.R.S. Employer Identification Nos.)
1300 Wilson Boulevard, Suite 400, Arlington, Virginia 22209
(Address of principal executive offices—zip code)
(703) 526-5000
(Registrants’ telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)

 

 

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports) and (2) have been subject to such filing requirements for the past 90 days.

 

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate by check mark whether the registrants are accelerated filers (as defined in Exchange Act Rule 12b-2).

 

 

Indicate the number of shares outstanding of each of the issuers’ classes of common stock or units as of the latest practicable date.

 

As of July 23, 2004, 54,271,460 shares of Common Stock, par value $.01 per share, of The Mills Corporation and 64,457,447
Common Units of limited partnership interest of The Mills Limited Partnership were outstanding.

 

 

THE MILLS CORPORATION

THE MILLS LIMITED PARTNERSHIP

FORM 10-Q

INDEX

 

PART I.	FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements and Notes
	The Mills Corporation:
	Consolidated Balance Sheets as of June 30, 2004 and December 31, 2003	4
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2004 and 2003	5
	Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2004	6
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2004 and 2003	7
	Notes to Consolidated Financial Statements	8
	The Mills Limited Partnership:
	Consolidated Balance Sheets as of June 30, 2004 and December 31, 2003	16
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2004 and 2003	17
	Consolidated Statements of Partners’ Capital for the Six Months Ended June 30, 2004	18
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2004 and 2003	19
	Notes to Consolidated Financial Statements	20
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 2.	Changes in Securities, Use of Proceeds and Issuer’s Purchases of Equity Securities	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Submission of Matters to Vote of Security Holders	35
Item 5.	Other Information	36
Item 6.	Exhibits and Reports on Form 8-K	36
Signatures		37

 

This Form 10-Q includes information with respect to both The Mills Corporation (“TMC”) and The Mills Limited Partnership (“Mills LP”), in which TMC owned a 1% general partner interest and a 83.20% limited partner interest as of June 30, 2004.  Separate financial statements and accompanying notes are provided for each of TMC and Mills LP.  Except as specifically noted otherwise, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are presented as a single discussion with respect to both TMC and Mills LP since TMC conducts all of its business and owns all of its properties through Mills LP and Mills LP’s various subsidiaries.

 

Certain matters discussed in this Form 10-Q and the information incorporated by reference herein contain “forward-looking statements” for purposes of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations and are not guarantees of future performance.

 

Forward-looking statements, which can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “would be,” or “continue” or the negative thereof or other variations thereon or comparable terminology are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are:

 

2

 

•                                the general economic climate,

•                                the supply and demand for retail properties,

•                                interest rate levels and fluctuations in the exchange rates between the U.S. dollar and foreign currencies in countries where the Registrants have investments,

•                                the availability to the Registrants of financing for their development projects or acquisition activities,

•                                risks associated with the development, acquisition and operation of retail properties, including risks that the development of the project may not be completed on schedule or on budget, that the Registrants may not be able to lease available space to tenants at favorable rental rates, that tenants will not take occupancy or pay rent in accordance with their leases, or that development or operating costs may be greater than anticipated, and

•                                those risks described in the section entitled “Risk Factors” in The Mills Corporation’s Form 10-K for the year ended December 31, 2003 and The Mills Limited Partnership’s Form 10.

 

The Registrants undertake no duty or obligation to publicly announce any revisions to, or updates of, these forward-looking statements that may result from future events or circumstances.

 

3

 

PART I—FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements and Notes

 

THE MILLS CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

 

		June 30, 2004			December 31, 2003
		(Unaudited)
ASSETS
Income producing property:
Land and land improvements		$	529,034		$	420,181
Building and improvements		1,933,071			1,862,389
Furniture, fixtures and equipment		65,900			60,674
Less: Accumulated depreciation and amortization		(419,771		)	(402,936		)
Net income producing property		2,108,234			1,940,308
Land held for investment and/or sale		11,267			12,039
Construction in progress		633,603			292,290
Investment in unconsolidated joint ventures		517,813			822,624
Net real estate and development assets		3,270,917			3,067,261
Cash and cash equivalents		44,660			15,777
Restricted cash		37,816			37,484
Accounts receivable, net		109,753			76,910
Notes receivable		27,246			25,675
Deferred costs, net		76,369			60,469
Other assets		14,301			11,057
Total Assets		$	3,581,062		$	3,294,633
LIABILITIES AND STOCKHOLDERS’ EQUITY
Mortgages, notes and loans payable		$	2,260,462		$	2,119,314
Accounts payable and other liabilities		178,138			191,194
		2,438,600			2,310,508
Minority interests:
Mills LP		105,719			129,347
Consolidated joint ventures		148,673			—
Series B Cumulative Redeemable Preferred Stock, par value $.01, 4,300 shares authorized, issued and outstanding		107,500			107,500
Series C Cumulative Redeemable Preferred Stock, par value $.01, 3,500 shares authorized, issued and outstanding		87,500			87,500
Series E Cumulative Redeemable Preferred Stock, par value $.01, 8,545 shares authorized, issued and outstanding		213,625			213,625
Common stock, par value $.01, 100,000 shares authorized and 54,267 and 50,298 shares issued and outstanding at 2004 and 2003, respectively		543			503
Additional paid-in capital		972,955			930,965