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):

February 7, 2019

 

 

 

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))
x 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 February 7, 2019, Brookfield Property REIT Inc. (the “Company”) disclosed the following financial information:

 

The following is the Company’s balance sheet as at December 31, 2018 and December 31, 2017.

 

Brookfield Property REIT Inc.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

   December 31,
 2018
   December 31,
 2017
 
Assets:          
Investment in real estate:          
Land  $2,706,701   $4,013,874 
Buildings and equipment   10,774,079    16,957,720 
Less accumulated depreciation   (2,214,603)   (3,188,481)
Construction in progress   576,695    473,118 
Net property and equipment   11,842,872    18,256,231 
Investment in Unconsolidated Real Estate Affiliates   5,385,582    3,377,112 
Net investment in real estate   17,228,454    21,633,343 
Cash and cash equivalents   247,019    164,604 
Accounts receivable, net   222,562    334,081 
Notes receivable   256,937    417,558 
Deferred expenses, net   145,631    284,512 
Prepaid expenses and other assets   313,648    494,795 
Deferred tax assets, net   619,275    18,633 
Total assets  $19,033,526   $23,347,526 
Liabilities:          
Mortgages, notes and loans payable  $12,589,649   $12,832,459 
Investment in Unconsolidated Real Estate Affiliates   124,627    21,393 
Accounts payable and accrued expenses   953,369    919,432 
Dividend payable   4,668    219,508 
Junior subordinated notes   206,200    206,200 
Total liabilities   13,878,513    14,198,992 
Redeemable equity interests   2,305,895     
Redeemable noncontrolling interests   73,696    248,126 
Total redeemable interests   2,379,591    248,126 
Equity:          
Total stockholders' equity   1,221,826    55,379 
Noncontrolling interests   1,553,596    49,369 
Total equity   2,775,422    8,900,408 
Total liabilities, redeemable noncontrolling interests and equity  $19,033,526   $23,347,526 

 

 

 

 

The following is the Company’s income statement for the years ended December 31, 2018, December 31, 2017 and December 31, 2016.

 

Brookfield Property REIT Inc.

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

  

   Year Ended December 31, 
   2018   2017   2016 
Revenues:               
Minimum rents  $1,297,945   $1,455,039   $1,449,704 
Tenant recoveries   540,376    643,607    668,081 
Overage rents   29,659    34,874    42,534 
Management fees and other corporate revenues   125,776    105,144    95,814 
Other   70,278    89,198    90,313 
Total revenues   2,064,034    2,327,862    2,346,446 
Expenses:               
Real estate taxes   221,175    237,198    229,635 
Property maintenance costs   41,637    49,784    55,027 
Marketing   7,787    11,043    13,155 
Other property operating costs   253,210    286,168    282,591 
Provision for doubtful accounts   12,102    10,701    8,038 
Provision for loan loss           29,615 
Property management and other costs   172,554    145,251    138,602 
General and administrative   46,441    56,133    55,745 
Costs related to the BPY Transaction   202,523         
Provision for impairment   45,866        73,039 
Depreciation and amortization   633,063    693,327    660,746 
Total expenses   1,636,358    1,489,605    1,546,193 
Operating income   427,676    838,257    800,253 
Interest and dividend income   33,710    61,566    59,960 
Interest expense   (576,700)   (541,945)   (571,200)
(Loss) gain on foreign currency       (819)   14,087 
Gains from changes in control of investment properties and other, net   3,097,196    79,056    722,904 
Gain on extinguishment of debt   13,983    55,112     
Income before income taxes, equity in income of Unconsolidated Real Estate Affiliates, discontinued operations and allocation to noncontrolling interests   2,995,865    491,227    1,026,004 
Benefit from (provision for) income taxes   594,186    10,896    (901)
Equity in income of Unconsolidated Real Estate Affiliates   86,552    152,750    231,615 
Unconsolidated Real Estate Affiliates - gain on investment, net   487,166    12,000    51,555 
Net income   4,163,769    666,873    1,308,273 
Allocation to noncontrolling interests   (73,228)   (9,539)   (19,906)
Net income attributable to Brookfield Property REIT Inc.   4,090,541    657,334    1,288,367 

  

 

 

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On February 6, 2019, the Board of Directors (the “Board”) of the Company appointed Mr. Scott Cutler to the Board, effective February 6, 2019.

 

Mr. Cutler currently serves as Senior Vice President, Americas Marketplace of eBay Inc. and he has served in that role since 2017. Mr. Cutler previously served as President of StubHub, a separate independent entity within eBay Inc. from 2015 to 2017. Prior to joining eBay Inc., Mr. Cutler spent nine years at the New York Stock Exchange. Prior to his career at the New York Stock Exchange, Mr. Cutler spent several years in investment banking. Mr. Cutler is a member of the board of directors of Brookfield Property Partners Limited (the “BPY General Partner”), the general partner of Brookfield Property Partners L.P., and serves on the board of the Mental Health Association of New York City and on the National Advisory Committee of the BYU Marriott School of Management. Mr. Cutler holds a Bachelor of Science, Economics from Brigham Young University and a Juris Doctor from the University of California, Hastings College of Law.

 

Effective on February 6, 2019, Mr. Cutler will become eligible to receive the standard compensation provided by the Company to its other independent directors.

 

Consistent with the Joint Governance Agreement, dated as of August 28, 2018, between the Company and Brookfield Property Partners L.P., the BPY General Partner and BP US REIT LLC (formerly known as Brookfield Properties, Inc., a Delaware corporation), Mr. Cutler will serve as a member of the board of directors of the BPY General Partner.

 

 

Item 8.01. Other Events.

 

On February 6, 2019, the Board approved a modified “Dutch Auction” tender offer (subject to all appropriate filings with the Securities and Exchange Commission) to purchase shares of its class A stock, par value $0.01 per share, at a price of at least $19.00 per share but no more than $21.00 per share. Further details will be provided upon the launch of the tender offer.

 


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: February 7, 2019 By: /s/ Michelle Campbell
  Name: Michelle Campbell
  Title: Secretary

  

 


The following information was filed by Brookfield Property Reit Inc. (BPR) on Thursday, February 7, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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