Mills to Restate, Retrench

Real estate developer Mills (MLS Quote) pulled the plug on 10 projects, bid adieu to 17 officers in a cost-cutting move and said it would restate earnings going back five years.

The Arlington, Va., shopping mall developer said it would take $77 million in charges to write off the discarded predevelopment projects and the severance pay for the officers. Mills also established a Best Practices Office to improve its accounting and took a $1 million expense for consultants hired to set up that shop.

Mills said it will restate its audited financial results from 2000 through 2004 and its unaudited quarterly results for 2005 to correct accounting errors related primarily to certain investments by a wholly-owned taxable REIT subsidiary, Mills Enterprises, and changes in the accrual of the compensation expense related to its long-term incentive plan. The restatement will cut the company's loss for the first nine months by 3 cents a share but it will also slash net income by 3 cents a share for 2004, 8 cents in 2003 and 23 cents in 2002. ...