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): AUGUST 6, 1998
----------------
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
- ------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<CAPTION>
MARYLAND 333-34835 87-0516235
- -------------------------------------------------------------------------------
<S> <C> <C>
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
</TABLE>
35 CENTURY PARK-WAY, SALT LAKE CITY, UTAH 84115
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices, Including Zip Code)
Registrant's Telephone Number, Including Area Code (801) 486-3911
--------------
N/A
- -------------------------------------------------------------------------------
(Former Name of Former Address, if Changed Since Last Report)
<PAGE> 1
ITEM 2. ACQUISITION OF ASSETS
On August 6, 1998, Price Spokane Limited Partnership acquired NorthTown
Mall. Price Spokane Limited Partnership is owned 99% by Price Development
Company, Limited Partnership (the "Operating Partnership") who is the limited
partner and 1% by Price NT Corp. who is the general partner. Price NT Corp. is
wholly owned by JP Realty, Inc. Price Development Company, Limited
Partnership, JP Realty, Inc., Price Spokane Limited Partnership and Price NT
Corp. collectively will be referred to as the Company (the "Company").
NorthTown Mall is an enclosed regional mall containing 952,262 square feet of
total gross leasable area ("Total GLA") located in Spokane Washington. The
major anchor department stores at NorthTown Mall are: The Bon Marche, Sears, JC
Penney, Mervyns and Emporium. At the time of its acquisition, NorthTown Mall
was 95.4% occupied based on Total GLA and had 88.8% of its mall shops occupied.
The purchase price paid for NorthTown Mall was $128,000,000 of which
$84,500,000 was financed utilizing a first mortgage provided by Morgan Stanley
and $43,500,000 was funded out of the Company's credit facilities with UBS AG
and Bank One, Arizona, NA. The Company purchased the mall from Sabey
Corporation, pursuant to a Real Estate Sales Agreement, the terms of which were
determined through arms-length negotiations between the parties.
The factors considered by the Company in determining the price to be paid
for the mall included its historical and/or expected cash flow, nature of the
tenants and terms of leases in place, occupancy rates, opportunities for
alternative and new tenancies, current operating costs and taxes on the mall
and anticipated changes therein under Company ownership and expansion areas
available, the physical condition and locations of the mall, the anticipated
effect on the Company's financial results and other factors. The Company took
into consideration capitalization rates at which it believes other shopping
centers have recently sold, and determined the price it was willing to pay
primarily on the factors discussed above relating to the mall and its fit with
the Company's operations.
NorthTown Mall contains an aggregate of 952,262 square feet of Total GLA,
of which 709,870 square feet is Company owned.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
FINANCIAL STATEMENTS
The statements of revenues and certain expenses included in this report
comprise the following:
A statement of revenues and certain expenses for the year ended December
31, 1997 and unaudited comparative interim information for the six months
ended June 30, 1998 and 1997 for NorthTown Mall.
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
Unaudited pro forma financial information for Price Development Company,
Limited Partnership is presented as follows:
Condensed consolidated balance sheet as of June 30, 1998
Condensed consolidated statement of operations for the six month period
ended June 30, 1998 and for the year ended December 31, 1997
Estimated twelve-month pro forma statement of taxable net operating
income and operating funds available
EXHIBITS - (23.1) Consent of Independent Accountants
<PAGE> 2
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
NORTHTOWN MALL
Report of Independent Accountants F-2
Historical Statement of Revenues and Certain Expenses for
the Year Ended December 31, 1997 F-3
Historical Statement of Revenues and Certain Expenses for
the Six-Month Periods Ended June 30, 1998 and 1997 (unaudited) F-4
Notes to Historical Statements of Revenues and Certain Expenses F-5
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
Pro Forma - Unaudited:
Condensed Consolidated Balance Sheet as of
June 30, 1998 F-6
Condensed Consolidated Statement of Operations for the Six-
Month Period Ended June 30, 1998 and for the Year
Ended December 31, 1997 F-8
Estimated Twelve-Month Pro Forma Statement of Taxable
Net Operating Income and Operating Funds Available F-13
<PAGE> 3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners' of
Price Development Company, Limited Partnership
We have audited the accompanying Historical Statement of Revenues and
Certain Expenses of NorthTown Mall for the year ended December 31, 1997
("Historical Statement"). This Historical Statement is the responsibility of
management. 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 Historical 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 presentation of
the Historical Statement. We believe that our audit provides a reasonable
basis for our opinion.
The accompanying Historical Statement was prepared on the basis described
in Note 2, for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission (for inclusion in the current report on Form
8-K of Price Development Company, Limited Partnership) and is not intended to
be a complete presentation of the revenues and expenses of NorthTown Mall.
In our opinion, the Historical Statement referred to above presents
fairly, in all material respects, the revenues and certain expenses of
NorthTown Mall, on the basis described in Note 2, for the year ended December
31, 1997, in conformity with generally accepted accounting principles.
/S/ PricewaterhouseCoopers LLP
- ----------------------------
PRICEWATERHOUSECOOPERS LLP
Salt Lake City, Utah
August 11, 1998
<PAGE> F-2
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NORTHTOWN MALL
HISTORICAL STATEMENT OF REVENUES AND CERTAIN EXPENSES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1997
------------------
<S> <C>
Revenues:
Minimum Rents $ 10,005,270
Percentage and Overage Rents 823,867
Recoveries from Tenants 3,986,940
---------------
14,816,077
---------------
Certain Expenses:
Operating and Maintenance 2,708,146
Real Estate Taxes 1,552,944
--------------
4,261,090
--------------
Revenue in Excess of Certain Expenses $ 10,554,987
==============
</TABLE>
See accompanying Notes to Historical Statements of Revenues and Certain Expenses
<PAGE> F-4
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NORTHTOWN MALL
HISTORICAL STATEMENT OF REVENUES AND CERTAIN EXPENSES
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX-MONTH PERIOD ENDED
----------------------------------
June 30, 1998 June 30, 1997
UNAUDITED) (UNAUDITED)
-------------- ---------------
<S> <C> <C>
Revenues:
Minimum Rents $ 4,946,346 $ 4,826,298
Percentage and Overage Rents 194,532 437,297
Recoveries From Tenants 1,986,489 2,075,171
------------ -------------
7,127,367 7,338,766
------------ -------------
Certain Expenses:
Operating and Maintenance 1,258,281 1,202,052
Real Estate Taxes 721,730 925,385
------------ -------------
1,980,011 2,127,437
------------ -------------
Revenues in Excess of Certain Expenses $ 5,147,356 $ 5,211,329
============ =============
</TABLE>
See accompanying Notes to Historical Statements of Revenues and Certain Expenses
<PAGE> F-4
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NORTHTOWN MALL
NOTES TO HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
- -------------------------------------------------------------------------------
1. OPERATION OF PROPERTY
The accompanying historical statement of revenues and certain expenses
relate to the operations of NorthTown Mall (the "Property") located in Spokane,
Washington. The property was originally built in 1955 as a shopping center and
has since undergone several expansions and remodelings. NorthTown Mall was
acquired by the Company on August 6, 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying historical statements of revenues and certain expenses
have been prepared on the accrual basis of accounting.
The accompanying financial statements are not representative of the
actual operations for the periods presented, as certain revenues and expenses,
which may not be comparable to the revenues and expenses to be earned or
incurred by the Company in the future operations of the Property, have been
excluded. Revenues excluded consist of revenue unrelated to the continuing
operations of the Property. Expenses excluded consist of interest,
depreciation of the building and improvements, amortization of deferred costs,
and other general and administrative costs not directly related to the future
operations of the Property.
USE OF ESTIMATES
The preparation of these statements in conformity with generally accepted
accounting principles required management to make estimates and assumptions
that affect the reported amounts of revenues and certain expenses during the
reporting period. Actual results could differ from these estimates.
INCOME RECOGNITION
Minimum rents are recognized using the straight-line basis. Percentage
rent revenues were recognized on an accrual basis based on annual amounts.
Effective April 1, 1998 the Company has prospectively adopted the
provisions of Issue No. 98-9 ("EITF 98-9") Accounting For Contingent Rent in
Interim Financial Periods, which was issued on May 21, 1998 by the Financial
Accounting Standards Board Emerging Issues Task Force, which significantly
changes the Company's recognition of percentage and overage revenue in interim
periods. Prior to the adoption of EITF 98-9, the Company recognized percentage
and overage rents revenue monthly on an accrual basis based on estimated annual
amounts. Under the provisions of EITF 98-9 percentage and overage rents
revenue is recognized in the interim periods in which the specified target that
triggers the contingent rental income is achieved.
The Company has presented NorthTown Mall's Statement of Revenues and
Certain Expenses consistent with the Company's treatment of percentage and
overage rents.
<PAGE> F-5
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
- ------------------------------------------------------------------------------
UNAUDITED FINANCIAL INFORMATION
The interim financial data for the six month periods ended June 30, 1998
and 1997 is unaudited; however, in the opinion of Management, the interim data
includes all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the results for the interim periods. The
results for the periods presented are not necessarily indicative of the results
for the full year.
The following unaudited pro forma condensed consolidated balance sheet is
presented as if the acquisition of the NorthTown Mall on August 6, 1998 had
occurred as of June 30, 1998. This pro forma condensed consolidated balance
sheet should be read in conjunction with the pro forma condensed consolidated
statement of operations of the Operating Partnership presented herein and the
historical financial statements and notes thereto of the Operating Partnership
included in the Price Development Company, Limited Partnership, Forms 10-K and
10-Q for the year ended December 31, 1997 and the six month period ended June
30, 1998.
The unaudited pro forma condensed consolidated balance sheet does not
purport to represent what the actual financial position of the Operating
Partnership would have been at June 30, 1998, nor does it purport to represent
the future financial position of the Operating Partnership.
<PAGE> F-6
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1998 (DOLLARS IN THOUSANDS)
- ------------------------------------------------------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
OPERATING OPERATING
PARTNERSHIP PRO FORMA PARTNERSHIP
HISTORICAL ADJUSTMENTS (A) PRO FORMA
------------- -------------- -------------
<S> <C> <C> <C>
ASSETS
Net Real Estate Assets $ 546,806 $ 128,000 $ 674,806
Other Assets 21,832 530 22,362
-------------- ------------- -------------
$ 568,638 $ 128,530 $ 697,168
============== ============= =============
LIABILITIES AND PARTNERS' CAPITAL
Borrowings $ 297,103 $ 128,000 $ 425,103
Other Liabilities 32,250 530 32,780
-------------- ------------- -------------
329,353 128,530 457,883
-------------- ------------- -------------
Minority Interests 1,892 -- 1,892
-------------- ------------- -------------
Partners' Capital
General Partner 204,684 -- 204,684
Limited Partners 32,709 -- 32,709
-------------- ------------- -------------
237,393 -- 237,393
-------------- ------------- -------------
$ 568,638 $ 128,530 $ 697,168
============== ============= =============
</TABLE>
(A) Reflects the purchase of NorthTown Mall acquired on August 6, 1998 as if
the acquisition had occurred as of June 30, 1998.
<PAGE> F-7
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1998
AND FOR THE YEAR ENDED DECEMBER 31, 1997
- -------------------------------------------------------------------------------
(UNAUDITED)
On January 28, 1997, JP Realty, Inc. sold 1,500,000 shares of common
stock in an underwritten public offering at an offering price of $27.125 per
share. Net proceeds totaled $38,600,000 and were used to purchase additional
interests in Price Development Company, Limited Partnership (the "Operating
Partnership"). The Operating Partnership used the proceeds to reduce
borrowings outstanding under the $50,000,000 credit facility. On June 1, 1997,
the Operating Partnership acquired the remaining 70 percent interest in Silver
Lake Mall through the issuance of 72,000 Operating Partnership Units ("OP
Units") valued at $1,863,000 and the assumption of debt totaling $24,755,000.
On June 30, 1997, the Operating Partnership acquired Visalia Mall for
$38,000,000, utilizing $37,000,000 in borrowings under an existing credit
facility and $593,000 in cash and $407,000 was paid in the form of property in
a 1031 tax free exchange. On December 30, 1997, the Operating Partnership
acquired the Salem Center for $32,500,000, utilizing borrowings from the
Operating Partnership's $200,000,000 unsecured credit facility. On August 6,
1998 Price Spokane Limited Partnership acquired NorthTown Mall. Price Spokane
Limited Partnership is owned 99% by the Operating Partnership who is the
Limited Partner and 1% by Price NT Corp. who is the General Partner and is
wholly owned by JP Realty, Inc. NorthTown Mall was acquired for $128,000,000
utilizing financing of $84,500,000 from a first mortgage loan provided by
Morgan Stanley Mortgage Capital, Inc. and $43,500,000 from borrowings from the
Operating Partnership's unsecured credit facilities. The unaudited pro forma
condensed statement of operations for the six month period ended June 30, 1998
is presented as if acquisition of the property purchased on August 6, 1998 had
occurred on January 1, 1997. The unaudited proforma condensed statement of
operations for the year ended December 31, 1997, is presented as if the public
offering of common stock and purchase of additional units, and the acquisition
of the properties purchased on June 1, 1997, June 30, 1997, December 30, 1997
and August 6, 1998 had occurred on January 1, 1997.
Pro forma information is based upon the historical consolidated results
of operations of the Operating Partnership for the six month period ended June
30, 1998 and for the year ended December 31, 1997, giving effect to the
transactions described above. The pro forma condensed consolidated statements
of operations should be read in conjunction with the pro forma condensed
consolidated balance sheet of the Operating Partnership presented herein and
the historical financial statements and notes thereto of the Operating
Partnership included in the Price Development Company, Limited Partnership,
Forms 10-K and 10-Q for the year ended December 31, 1997 and the six month
period ended June 30, 1998.
The unaudited pro forma condensed consolidated statements of operations
are not necessarily indicative of what the actual results of operations of the
Operating Partnership would have been assuming the transactions had been
completed as set forth above, nor does it purport to represent the Operating
Partnership's results of operations for future periods.
<PAGE> F-8
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1998 (IN THOUSANDS, EXCEPT PER
PARTNERSHIP UNIT DATA)
- -------------------------------------------------------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
OPERATING OPERATING
PARTNERSHIP ACQUIRED PARTNERSHIP
HISTORICAL(A) PROPERTY PRO FORMA
------------- -------------- -------------
<S> <C> <C> <C>
Revenues:
Minimum Rents $ 36,077 $ 4,946(B) $ 41,023
Percentage and Overage Rents 1,185 195(B) 1,380
Recoveries from Tenants 10,133 1,986(B) 12,119
Interest and Other Income 391 -- 391
------------- ------------- -------------
47,786 7,127 54,913
Expenses:
Operating Expenses Before
Depreciation and Interest 16,135 1,980(B) 18,115
Interest 7,796 4,221(C) 12,017
Depreciation and Amortization 8,650 1,541(D) 10,191
------------- ------------ -------------
Net Operating Income (Loss) 15,205 (615) 14,590
Minority Interests in
Income of Consolidated
Partnerships (196) -- (137)
------------- ------------ -------------
Net Income (Loss) 15,009 (615) $ 14,394
============= ============ =============
Per Partnership Unit Amounts
- Net Income:
Basic $ .70 $ .68
============= =============
Diluted $ .70 $ .67
============= =============
Weighted Average Partnership
Units Outstanding:
Basic 21,293 21,293
============= ============
Diluted 21,421 21,421(E)
============= ============
</TABLE>
<PAGE> F-9
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1998 (DOLLARS IN THOUSANDS)
- -------------------------------------------------------------------------------
(UNAUDITED)
(A) Reflects the Price Development Company, Limited Partnership historical
consolidated statement of operations for the period January 1, 1998 to
June 30, 1998.
(B) Reflects revenues and certain expenses of the Property acquired on August
6, 1998 for the six months ended June 30, 1998.
(C) Reflects interest expense on $43,500 outstanding under the revolving
credit facilities, drawn for purposes of the acquisition of the Property,
at a rate equal to the average interest rate incurred under the credit
facilities, and interest on $84,500 of new first mortgage debt at a 6.68%
fixed rate. A change in the interest rate of 1/8% on the revolving
credit facilities used to finance the acquisition of the property would
result in approximately $27 interest expense increase or decrease for the
six months ended June 30, 1998.
(D) Reflects depreciation on approximately $121,000 of the purchase price
allocated to buildings, over a 40-year useful life and amortization on
loan fees of $530 over a 10 year life.
(E) Based upon 21,421,000 diluted partnership units outstanding. The number
of partnership units assumed to be outstanding include 128,000 shares
from dilutive stock options of JP Realty, Inc. which have the right to
purchase partnership units.
<PAGE> F-11
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997 (DOLLARS IN THOUSANDS, EXCEPT PER
PARTNERSHIP UNIT DATA)
- ------------------------------------------------------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
Acquired
Operating Properties and Operating
Partnership Common Stock Partnership
Historical(A) Offering(B) Pro Forma
-------------- ------------ -------------
<S> <C> <C> <C>
Revenues:
Minimum Rents $ 59,624 $ 16,527 $ 76,151
Percentage and Overage Rents 3,896 1,096 4,992
Recoveries from Tenants 18,199 6,926 25,125
Interest and Other Income 1,254 (104)(C) 1,150
-------------- ------------ -------------
82,973 24,445 107,418
Expenses:
Operating Expenses Before
Depreciation, Amortization and Interest 27,434 7,943 35,377
Interest 9,066 12,546 21,612
Depreciation and Amortization 13,410 4,467 17,877
-------------- ------------ -------------
Net Operating Income (Loss) 33,063 (511) 32,552
Minority Interests in Income
of Consolidated Partnerships (394) -- (394)
Gain on Sale of Real Estate 339 -- 339
-------------- ------------ -------------
Income (Loss) Before Extraordinary Item 33,008 (511) 32,497
Per Partnership Unit Amounts -
Income Before Extraordinary Item:
Basic $ 1.57 $ 1.53
============== =============
Diluted $ 1.55 $ 1.52
============== =============
Weighted Average Partnership
Units Outstanding:
Basic 21,119 21,234
============== =============
Diluted 21,285 21,400(D)
============== =============
</TABLE>
<PAGE> F-11
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997 (DOLLARS IN THOUSANDS)
- ------------------------------------------------------------------------------
(UNAUDITED)
(A) Reflects the Price Development Company, Limited Partnership historical
consolidated statement of operations for the year ended December 31,
1997.
(B) Reflects revenues and certain expenses of the properties acquired on June
1, June 30, December 30, 1997 and August 6, 1998 for the year December
31, 1997 and the common stock offering on January 28, 1997, the proceeds
of which were used to purchase additional partnership units, as if
consummated on January 1, 1997 as follows:
<TABLE>
<CAPTION>
Silver Lake Visalia Salem NorthTown Common Stock
Mall Mall Mall Mall Offering Total
---------- --------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Minimum Rents $ 1,058 $ 2,164 $ 3,300 $ 10,005 $ -- $ 16,527
Percentage and Overage
Rents 37 27 208 824 -- 1,096
Recoveries from Tenants 410 1,034 1,495 3,987 -- 6,926
Operating Expenses 441 1,277 1,964 4,261 -- 7,943
Interest (1) 732 1,339 2,353 8,444 (322) 12,546
Depreciation and
amortization(2) 219 398 770 3,080 -- 4,467
</TABLE>
(1) Reflects the adjustment to record interest expense on $122,000
outstanding under the revolving credit facilities, drawn for
purposes of the acquisitions, at a rate equal to the average
interest rate incurred under the credit facilities, and interest
on $12,997 of assumed debt at a 8.5% fixed rate, and interest on
$84,500 of new first mortgage debt at a 6.68% fixed rate. A
change in the interest rate of 1/8% on the revolving credit
facilities used to finance the acquisition of the properties would
result in $153 interest expense increase or decrease.
Interest expense is reduced by using the $38,600 in net proceeds
from the January 28, 1997 common stock offering. The proceeds
were used to retire borrowings outstanding on the Operating
Partnership's credit facilities.
(2) Reflects the adjustment to record depreciation on approximately
$205,000 of the purchase price allocated to buildings, over a 40-
year useful life and amortization based on loan fees of $530 over
a 10 year life.
(C) Adjustment reflects a reduction in outside management fees for the
Operating Partnership received for management services provided to
Silver Lake Mall prior to the acquisition.
(D) Based upon 21,400,000 partnership units outstanding. The number of
partnership units assumed to be outstanding include the 1,500,000 shares
sold in the January 28, 1997 offering and 166,000 shares from dilutive
stock options of JP Realty, Inc. which have the right to purchase
operating partnership units.
<PAGE> F-12
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
ESTIMATED TWELVE-MONTH PRO FORMA STATEMENT
OF TAXABLE NET OPERATING INCOME AND OPERATING FUNDS AVAILABLE (DOLLARS IN
THOUSANDS)
- -------------------------------------------------------------------------------
(Unaudited)
The following unaudited statement is a pro forma estimate of taxable net
operating income and operating funds available of the Operating Partnership for
a twelve-month period. The pro forma statement is based on the Operating
Partnership's historical operating results for a twelve-month period ended
December 31, 1997 adjusted for the effects of the Operating Partnership's
acquisition of the properties purchased on June 1, 1997, June 30, 1997,
December 30, 1997 and August 6, 1998. This statement does not purport to
forecast actual taxable net operating income and operating funds available for
any period in the future.
This statement should be read in conjunction with (i) the financial
statements of the Operating Partnership and (ii) the pro forma condensed
financial statements of the Operating Partnership.
<TABLE>
<CAPTION>
<S> <C>
ESTIMATE OF TAXABLE NET OPERATING INCOME:
Operating Partnership historical income, exclusive of
depreciation and amortization (Note 1) $ 46,539
Properties acquired on June 1, 1997, June 30, 1997,
December 30, 1997 and August 6, 1998 - Pro Forma loss,
exclusive of depreciation and amortization (Note 2) 3,956
Estimated tax depreciation and amortization (Note 3):
1997 tax depreciation and amortization (14,952)
Pro forma tax depreciation for property acquired during 1998 (1,514)
--------
(16,466)
--------
Pro forma taxable net operating income $ 34,029
========
ESTIMATE OF OPERATING FUNDS AVAILABLE:
Pro forma taxable net operating income $ 34,029
Add pro forma tax depreciation and amortization 16,466
--------
Estimated pro forma operating funds available (Note 4) $ 50,495
========
<PAGE> F-13
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
ESTIMATED TWELVE-MONTH PRO FORMA STATEMENT
OF TAXABLE NET OPERATING INCOME AND OPERATING FUNDS AVAILABLE
- ------------------------------------------------------------------------------
(Unaudited)
Note 1 - The historical income before minority interests of Operating
Partnership unitholders, exclusive of depreciation and amortization
represent the Operating Partnership's income exclusive of depreciation
and amortization for the twelve months ended December 31, 1997 as
reflected in the Operating Partnership's historical financial
statements.
Note 2 - The Pro forma loss, exclusive of depreciation and amortization for the
properties acquired on June 1, 1997, June 30, 1997, December 30, 1997
and August 6, 1998 loss referred to in the pro forma condensed
consolidated statement of operations for the year ended December 31,
1997 included elsewhere herein.
Note 3 - Tax depreciation for the Operating Partnership is based upon the
Operating Partnership's tax basis in the Property. The costs are
generally depreciated on a straight-line method over a 40-year life.
Note 4 - Operating funds available does not represent cash generated from
operating activities in accordance with generally accepted accounting
principles and is not necessarily indicative of cash available to fund
cash needs.
<PAGE> F-14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PRICE DEVELOPMENT COMPANY,
LIMITED PARTNERSHIP
(Registrant)
By: JP Realty, Inc., its
General Partner
AUGUST 17, 1998 /s/ G. Rex Frazier
Date ------------------- --------------------------------------
G. Rex Frazier President, Chief Operating Officer,
and Director Of JP Realty, Inc.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-34835 and
No. 333-34835-01) of Price Development Company, Limited Partnership of our
report dated August 11, 1998 relating to the historical statements of revenues
and certain expenses of NorthTown Mall for the year ended December 31, 1997,
which appears in the Current Report on Form 8-K of Price Development Company,
Limited Partnership dated August 11, 1998
PricewaterhouseCoopers LLP
- -----------------------------
PRICEWATERHOUSECOOPERS LLP
Salt Lake City, Utah
August 17, 1998
</TABLE>
