UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 8-K
_________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
November 1, 2018
_________________________
Brookfield
Property REIT Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-34948 | 27-2963337 |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 250 Vesey Street, 15th Floor, New York, NY | 10281 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (212) 417-7000
_________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act or Rule 12b-2 of the Exchange Act.
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.02. | Results of Operations and Financial Condition. |
On November 1, 2018, Brookfield Property REIT Inc. (the “Company”) disclosed the following financial information:
The following is the Company’s balance sheet as at September 30, 2018 and December 31, 2017.
Brookfield Property REIT Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| September 30, 2018 | December 31, 2017 | |||||||
| (Dollars in thousands) | ||||||||
| Assets: | ||||||||
| Investment in real estate: | ||||||||
| Land | $ | 2,745,90 5 | $ | 4,013,874 | ||||
| Buildings and equipment | 11,005,853 | 16,957,720 | ||||||
| Less accumulated depreciation | (2,183,128 | ) | (3,188,481 | ) | ||||
| Construction in progress | 525,169 | 473,118 | ||||||
| Net property and equipment | 12,093,799 | 18,256,231 | ||||||
| Investment in Unconsolidated Real Estate Affiliates | 5,197,113 | 3,377,112 | ||||||
| Net investment in real estate | 17,290,912 | 21,633,343 | ||||||
| Cash and cash equivalents | 260,716 | 164,604 | ||||||
| Accounts receivable, net | 221,535 | 334,081 | ||||||
| Notes receivable | 335,943 | 417,558 | ||||||
| Deferred expenses, net | 164,228 | 284,512 | ||||||
| Prepaid expenses and other assets | 292,746 | 494,795 | ||||||
| Deferred tax assets, net | 591,589 | 18,633 | ||||||
| Total assets | $ | 19,157,669 | $ | 23,347,526 | ||||
| Liabilities: | ||||||||
| Mortgages, notes and loans payable | $ | 13,012,731 | $ | 12,832,459 | ||||
| Investment in Unconsolidated Real Estate Affiliates | 123,701 | 21,393 | ||||||
| Accounts payable and accrued expenses | 876,166 | 919,432 | ||||||
| Dividend payable | 3,942 | 219,508 | ||||||
| Junior subordinated notes | 206,200 | 206,200 | ||||||
| Total liabilities | 14,222,740 | 14,198,992 | ||||||
| Redeemable equity interests | 3,080,808 | — | ||||||
| Redeemable noncontrolling interests | 73,581 | 248,126 | ||||||
| Total redeemable interests | 3,154,389 | 248,126 | ||||||
| Equity: | ||||||||
| Total stockholders' equity | 239,442 | 8,795,660 | ||||||
| Noncontrolling interests | 1,541,098 | 104,748 | ||||||
| Total equity | 1,780,540 | 8,900,408 | ||||||
| Total liabilities, redeemable interests, equity and Noncontrolling interests | $ | 19,157,669 | $ | 23,347,526 | ||||
The following is the Company’s income statement for the three and nine months ended September 30, 2018 and September 30, 2017.
Brookfield Property REIT Inc.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Minimum rents | $ | 309,983 | $ | 363,857 | $ | 1,057,817 | $ | 1,062,075 | ||||||||
| Tenant recoveries | 133,103 | 160,755 | 446,260 | 485,737 | ||||||||||||
| Overage rents | 4,681 | 4,582 | 14,853 | 13,799 | ||||||||||||
| Management fees and other corporate revenues | 30,483 | 28,806 | 82,278 | 77,797 | ||||||||||||
| Other | 14,899 | 20,357 | 49,250 | 61,079 | ||||||||||||
| Total revenues | 493,149 | 578,357 | 1,650,458 | 1,700,487 | ||||||||||||
| Expenses: | ||||||||||||||||
| Real estate taxes | 55,081 | 61,516 | 177,417 | 178,053 | ||||||||||||
| Property maintenance costs | 8,381 | 10,281 | 34,070 | 35,980 | ||||||||||||
| Marketing | 1,801 | 1,744 | 4,961 | 5,185 | ||||||||||||
| Other property operating costs | 66,327 | 75,848 | 209,832 | 214,742 | ||||||||||||
| Provision for doubtful accounts | 3,517 | 2,152 | 9,180 | 8,769 | ||||||||||||
| Property management and other costs | 43,763 | 35,195 | 119,932 | 115,334 | ||||||||||||
| General and administrative | 15,947 | 12,037 | 40,235 | 42,582 | ||||||||||||
| Costs related to the BPY Transaction | 204,159 | — | 204,159 | — | ||||||||||||
| Provision for impairment | 7,487 | — | 45,866 | — | ||||||||||||
| Depreciation and amortization | 156,401 | 161,278 | 515,437 | 505,875 | ||||||||||||
| Total expenses | 562,864 | 360,051 | 1,361,089 | 1,106,520 | ||||||||||||
| Operating income (loss) | (69,715 | ) | 218,306 | 289,369 | 593,967 | |||||||||||
| Interest and dividend income | 7,240 | 15,948 | 25,906 | 51,336 | ||||||||||||
| Interest expense | (144,632 | ) | (135,980 | ) | (423,120 | ) | (402,512 | ) | ||||||||
| Gain on foreign currency | — | 3,889 | — | 3,195 | ||||||||||||
| Gain on extinguishment of debt | — | — | — | 55,112 | ||||||||||||
| Gain from changes in control of investment properties and other, net | 2,850,017 | 95,165 | 2,862,681 | 79,325 | ||||||||||||
| Income before income taxes, equity in income of Unconsolidated Real Estate Affiliates and allocation to noncontrolling interests | 2,642,910 | 197,328 | 2,754,836 | 380,423 | ||||||||||||
| Benefit from (provision for) income taxes | 570,716 | (6,993 | ) | 571,018 | (15,347 | ) | ||||||||||
| Equity in income of Unconsolidated Real Estate Affiliates | 20,336 | 35,937 | 59,206 | 99,884 | ||||||||||||
| Unconsolidated Real Estate Affiliates - gain on investment, net | 478,293 | — | 488,654 | — | ||||||||||||
| Net income | 3,712,255 | 226,272 | 3,873,714 | 464,960 | ||||||||||||
| Allocation to noncontrolling interests | (28,981 | ) | (3,492 | ) | (32,790 | ) | (9,157 | ) | ||||||||
| Net income attributable to Brookfield Property REIT Inc. | 3,683,274 | 222,780 | 3,840,924 | 455,803 | ||||||||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BROOKFIELD PROPERTY REIT INC. | ||
| Date: November 1, 2018 | By: | /s/ Michelle Campbell |
| Name: | Michelle Campbell | |
| Title: | Secretary | |