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): March 3, 1998
----------------
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
- -------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
MARYLAND 87-0516235
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
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>
ITEMS 5. OTHER EVENTS
INDEX TO FINANCIAL STATEMENTS
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
PAGE
----
Report of Independent Accountants F-2
Consolidated Balance Sheet as of December 31, 1997 and 1996 F-3
Consolidated Statement of Operations
for the years ended December 31, 1997, 1996 and 1995 F-4
Consolidated Statement of Partners' Capital F-5
Consolidated Statement of Cash Flows
for the years ended December 31, 1997, 1996 and 1995 F-6
Notes to Consolidated Financial Statements F-7
Schedule II - Valuation and Qualifying Accounts F-18
Schedule III - Real Estate and Accumulated Depreciation F-19
2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
of Price Development Company, Limited Partnership
In our opinion, the consolidated financial statements listed in the
accompanying index, present fairly, in all material aspects, the financial
position of Price Development Company, Limited Partnership and its subsidiaries
at December 31, 1997 and 1996, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1997,
in conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
Price Waterhouse LLP
Salt Lake City, Utah
February 4, 1998
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
Real Estate Assets
Land $ 95,523 $ 69,714
Buildings 490,183 353,500
---------- ---------
585,706 423,214
Less: Accumulated Depreciation (98,404) (87,318)
---------- ---------
Operating Real Estate Assets 487,302 335,896
Real Estate Under Development 33,665 30,027
---------- ---------
Net Real Estate Assets 520,967 365,923
Cash 5,603 1,750
Restricted Cash 2,465 2,372
Accounts Receivable, Net 5,759 3,498
Deferred Charges, Net 7,536 6,512
Other Assets 3,354 1,305
---------- ---------
$ 545,684 $ 381,360
========== =========
LIABILITIES AND PARTNERS' CAPITAL
Borrowings $ 283,390 $ 162,375
Accounts Payable and Accrued Expenses 18,840 11,611
Accumulated Losses in Excess of Equity Investment -- 1,555
Other Liabilities 617 485
---------- ---------
302,847 176,026
---------- ---------
Minority Interests 1,830 668
---------- ---------
Commitments and Contingencies
PARTNERS' CAPITAL
General Partner 207,581 172,286
Limited Partners 33,426 32,380
---------- ---------
241,007 204,666
---------- ---------
$ 545,684 $ 381,360
========== =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS - EXCEPT PER PARTNERSHIP UNIT AMOUNTS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------
1997 1996 1995
--------- --------- ----------
<S> <C> <C> <C>
REVENUES
Minimum Rents $ 59,624 $ 52,447 $ 43,640
Percentage and Overage Rents 3,896 4,061 3,465
Recoveries from Tenants 18,199 15,557 12,252
Interest 546 549 1,231
Other 708 335 362
--------- --------- ----------
82,973 72,949 60,950
--------- --------- ----------
EXPENSES
Operating and Maintenance 12,990 11,240 8,288
Real Estate Taxes and Insurance 8,546 7,679 6,892
Advertising and Promotions 451 426 364
General and Administrative 5,447 5,060 4,845
Depreciation 11,802 10,230 9,610
Amortization of Deferred Financing Costs 969 1,085 1,256
Amortization of Deferred Leasing Costs 639 664 662
Interest 9,066 7,776 6,623
--------- --------- ----------
49,910 44,160 38,540
--------- --------- ----------
33,063 28,789 22,410
Minority Interest in Income of
Consolidated Partnerships (394) (389) (421)
Equity in Net Loss of Partnership Interest -- -- (184)
Gain on Sales of Real Estate 339 94 918
--------- --------- ----------
Income Before Extraordinary Item 33,008 28,494 22,723
Extraordinary Item - Loss on Extinguishment of Debt (162) -- --
--------- --------- ----------
Net Income $ 32,846 $ 28,494 $ 22,723
========= ========= ==========
Basic Earnings Per Partnership Unit:
Income Before Extraordinary Item $ 1.57 $ 1.45 $ 1.26
Extraordinary Item (.01) -- --
--------- --------- ----------
Net Income $ 1.56 $ 1.45 $ 1.26
========= ========= ==========
Diluted Earnings Per Partnership Unit:
Income Before Extraordinary Item $ 1.55 $ 1.44 $ 1.26
Extraordinary Item (.01) -- --
--------- --------- ----------
Net Income $ 1.54 $ 1.44 $ 1.26
========= ========= ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
GENERAL LIMITED
PARTNER PARTNERS TOTAL
--------- --------- ----------
<S> <C> <C> <C>
Partners' Capital at December 31, 1994 $ 127,550 $ 35,523 $ 163,073
Units Issued for Proceeds from Sale of Common Stock 52,888 -- 52,888
Units Issued Upon Exercise of Stock Options 976 -- 976
Distributions (23,881) (6,037) (29,918)
Net Income 18,071 4,652 22,723
--------- --------- ----------
Partners' Capital at December 31, 1995 175,604 34,138 209,742
Units Issued Upon Exercise of Stock Options 407 -- 407
Conversion of Limited Partners' Interests 164 (164) --
Distributions (27,139) (6,838) (33,977)
Net Income 23,250 5,244 28,494
--------- --------- ----------
Partners' Capital at December 31, 1996 172,286 32,380 204,666
Units Issued for Proceeds from Sale of Common Stock 38,632 -- 38,632
Units Issued Upon Exercise of Stock Options 220 -- 220
Conversion of Limited Partners' Interests 40 (40) --
Units Issued for Acquisition -- 1,863 1,863
Distributions (30,797) (6,423) (37,220)
Net Income 27,200 5,646 32,846
--------- --------- ----------
Partners' Capital at December 31, 1997 $ 207,581 $ 33,426 $ 241,007
========= ========= ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
Consolidated Statement of Cash Flows
(Dollars in thousands)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 32,846 $ 28,494 $ 22,723
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 11,802 10,230 9,610
Amortization 1,608 1,749 1,918
Minority Interest in Income of Consolidated Partnerships 394 389 421
Equity in Net Loss of Partnership Interest -- -- 184
Gain on Sales of Real Estate (339) (94) (918)
Increase in Accounts Receivable (2,261) (786) (540)
Increase in Deferred Charges (1,128) (387) (1,428)
Increase in Accounts Payable and Accrued Expenses 3,368 3,774 887
Increase in Other Assets (1,917) (295) (138)
--------- --------- ---------
Net Cash Provided by Operating Activities 44,373 43,074 32,719
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Real Estate Assets, Developed or Acquired (137,560) (65,323) (69,300)
Proceeds from Sales of Real Estate 469 -- 1,281
(Increase) Decrease in Restricted Cash (93) 92 636
--------- --------- ---------
Net Cash Used in Investing Activities (137,184) (65,231) (67,383)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Borrowings 219,088 65,442 47,009
Repayment of Borrowings (123,320) (9,473) (49,344)
Deferred Financing Costs (1,503) -- --
Net Proceeds from Sale of Partnership Units 38,865 407 53,850
Capital Contributions by Minority Interests 1,000 -- --
Distributions to Partners (37,220) (33,977) (29,918)
Distributions to Minority Interests (246) (319) (258)
--------- --------- ---------
Net Cash Provided by Financing Activities 96,664 22,080 21,339
--------- --------- ---------
Net Increase (Decrease) in Cash 3,853 (77) (13,325)
Cash, Beginning of Period 1,750 1,827 15,152
--------- --------- ---------
Cash, End of Period $ 5,603 $ 1,750 $ 1,827
========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND PER PARTNERSHIP UNIT AMOUNTS)
1. BUSINESS AND BASIS OF PRESENTATION
BUSINESS
Price Development Company, Limited Partnership (the "Operating
Partnership") a Maryland Limited Partnership, is engaged in the business of
owning, leasing, managing, operating, developing and redeveloping regional
malls, community centers and other commercial properties. The Operating
Partnership's general partner, JP Realty, Inc. ("the Company"), is a real
estate investment trust ("REIT") as defined by the Internal Revenue Code and
owns an interest in and conducts its business activities through the Operating
Partnership. The Company owned an 82.7 and 81.7 percent general partnership
interest in the Operating Partnership at December 31, 1997 and 1996,
respectively, which owns a portfolio of 48 properties consisting of 15 enclosed
regional malls, 25 community centers, two free-standing retail properties and
six mixed-use commercial properties. The tenant base includes primarily
national, regional and local retailers; as such, the Company's credit risk is
concentrated in the retail industry.
BASIS OF PRESENTATION
The accompany consolidated financial statements include the accounts of
the Operating Partnership and all controlled affiliates. During 1995, the
Operating Partnership used the equity method to account for a 30 percent
limited partnership interest in a partnership owning a regional mall.
Commencing in 1996, the Operating Partnership discontinued recording its
proportionate interest in the losses generated by this partnership, as it was
not required to fund such losses. During 1997, the Operating Partnership
acquired the remaining 70 percent interest in this partnership.
The effect of all significant intercompany balances and transactions
have been eliminated in the consolidated presentation. Certain amounts in the
1996 and 1995 financial statements have been reclassified to conform with the
1997 presentation.
The preparation of these financial statements in conformity with
generally accepted accounting principles required management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2. SUMMARY OF SIGNIFICANT ACCOUNTING
REAL ESTATE ASSETS
Real estate assets are stated at cost less accumulated depreciation. At
each balance sheet date, the Operating Partnership reviews book values of real
estate assets for possible impairment based upon expectations of future
nondiscounted cash flows (excluding interest) from each property.
Costs directly related to the acquisition and development of real estate
assets, including overhead costs directly attributable to property development
are capitalized. Interest and real estate taxes incurred during the
development and construction period are capitalized.
Depreciation is computed on a straight-line basis generally over 40
years for buildings and four to ten years for equipment and fixtures. Tenant
improvements are capitalized and depreciated on a straight-line basis over the
life of the related lease. Expenditures for maintenance and repairs are
charged to operations as incurred. Major replacements and betterments which
improve or extend the life of the asset are capitalized and depreciated over
their estimated useful lives.
F-7
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND PER PARTNERSHIP UNIT AMOUNTS)
2. SUMMARY OF SIGNIFICANT ACCOUNTING (CONTINUED)
REVENUE RECOGNITION
Certain minimum rents are recognized monthly based upon amounts which are
currently due from tenants, when such amounts are not materially different than
recognizing the fixed cash flow over the initial term of the lease using the
straight-line method. All other minimum rents are recognized using the
straight-line method. Percentage rents are recognized monthly on an accrual
basis based on estimated annual amounts. The Operating Partnership receives
reimbursements from tenants for certain costs as provided in the lease
agreements. These costs consist of real estate taxes, insurance, common area
maintenance and other recoverable costs. Recoveries from tenants are
recognized monthly on an accrual basis based on estimated amounts.
An allowance for doubtful accounts has been provided against the portion
of tenant accounts receivable which is estimated to be uncollectible. Tenant
accounts receivable in the accompanying balance sheet are shown net of
allowance for doubtful accounts of $570 and $489 as of December 31, 1997 and
1996, respectively.
RESTRICTED CASH
Restricted cash reflects cash restricted under terms of a loan agreement
to be used for certain capital expenditures and funds held in reserve by a
trustee for interest payments on borrowings.
DEFERRED CHARGES
Deferred charges consists principally of financing fees and leasing
commissions paid to third parties. These costs are amortized on a straight-
line basis over the terms of the respective agreements. Deferred charges in
the accompanying consolidated balance sheet are shown net of accumulated
amortization of $5,857 and $6,064 as of December 31, 1997 and 1996,
respectively.
INCOME TAXES
Income taxes have not been provided in the accompanying financial
statements as the tax effects of the Operating Partnership's operations accrue
directly to the partners.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Standards ("SFAS") No. 130 "Reporting Comprehensive
Income". SFAS No. 130 establishes standards for the reporting and display of
comprehensive income and its components in a full set of general purpose
financial statements. Comprehensive income is defined as the change in equity
of a business enterprise during a period from transactions and other event and
circumstances from nonowner sources. The new standard becomes effective for
the Operating Partnership for the year ending December 31, 1998, and requires
comparative information from earlier years to be restated to conform to the
requirements of this standard. The Operating Partnership does not expect this
pronouncement to materially impact the presentation or form of its financial
statements.
F-8
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND PER PARTNERSHIP UNIT AMOUNTS)
2. SUMMARY OF SIGNIFICANT ACCOUNTING (CONTINUED)
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information". SFAS No. 131 establishes standards
for disclosure about operating segments in annual financial statements and
selected information in interim financial reports. It also establishes
standards for related disclosures about products and services, geographic areas
and major customers. This statement supersedes SFAS No. 14, "Financial
Reporting for Segments of a Business Enterprise". The new standard becomes
effective for the Operating Partnership for the year ending December 31, 1998,
and requires that comparative information from earlier years be restated to
conform to the requirements of this standard.
3. ACQUISITIONS AND DEVELOPMENTS
ACQUISITIONS
On December 30, 1997, the Operating Partnership acquired Salem Center, a
mall located in Salem, Oregon for $32,500. The acquisition was financed
utilizing borrowings on its $200,000 unsecured credit facility.
On June 30, 1997, the Operating Partnership acquired Visalia Mall located
in Visalia, California for $38,000. The acquisition was financed principally
from borrowings.
On June 1, 1997, the Operating Partnership acquired the remaining 70%
interest in Silver Lake Mall, Ltd. a Limited Partnership owning Silver Lake
Mall located in Coeur d'Alene, Idaho. Prior to the acquisition, the Operating
Partnership held a 30% interest in the partnership. The acquisition was
financed by issuing 72,000 Operating Partnership Units ("OP Units") and
assuming debt totaling $24,755.
On April 4, 1996, the Operating Partnership acquired Grand Teton Mall
located in Idaho Falls, Idaho for approximately $34,400. The acquisition was
financed utilizing borrowings from a credit facility.
DEVELOPMENTS
The Operating Partnership through its consolidated partnership Spokane
Mall Development Company Limited Partnership, completed the development of
Spokane Valley Mall located in Spokane, Washington and held a grand opening on
August 13, 1997. The mall contains approximately 689,000 square feet of total
gross leasable area ("Total GLA"). The partnership expended a total of $57,855
for the development. At December 31, 1997, the Operating Partnership had
leased approximately 89% of the mall.
The Operating Partnership has initiated the development of Provo Towne
Centre, an enclosed regional mall in Provo, Utah through its consolidated
partnership Provo Mall Development Company, LTD. The mall will add
approximately 750,000 square feet of Total GLA. At December 31, 1997, the
partnership had expended $30,490 for development costs and anticipates
expending an additional $23,039 to complete the development during 1998.
F-9
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND PER PARTNERSHIP UNIT AMOUNTS)
4. BORROWINGS
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1997 1996
--------- ---------
<S> <C> <C>
Credit Facility, unsecured; weighted average interest at
6.75 percent during 1997 $ 127,000 $ --
Notes, secured by real estate; interest at 6.37 percent;
due in 2001 95,000 95,000
Construction Loan, secured by real estate; interest at
7.41 percent as of December 31, 1997, due in 1999 43,009 16,943
Mortgage payable, secured by real estate; interest at
8.5 percent, due in 2000 12,827 --
Other notes payable, secured by real estate; interest
ranging from 7.0 to 9.99; maturing 2000 to 2095 5,554 2,232
Credit Facility, secured by real estate; interest at
115 basis points over AAA commercial paper -- 44,000
Credit Facility, unsecured; interest at 175 basis points
over LIBOR -- 4,200
--------- ---------
$ 283,390 $ 162,375
========= =========
</TABLE>
CREDIT FACILITIES
On October 16, 1997, the Operating Partnership obtained a $150,000 three
year unsecured credit facility (the "1997 Credit Facility") from a group of
banks. On December 18, 1997, the amount was increase to $200,000. The
facility has a three year term and bears interest, at the option of the
Operating Partnership, at one, or a combination, of (i) the higher of the
federal funds rate plus 50 basis points or the prime rate, or (ii) LIBOR plus a
spread of 70 to 130 basis points. The LIBOR spread is determined by the
Operating Partnership's credit rating and/or leverage ratio. The 1997 Credit
Facility also includes a competitive bid option in the amount of $100,000 which
will allow the Operating Partnership to solicit bids for borrowings from the
bank group. The facility will be used for general purposes including
development, working capital, equity investments, repayment of amounts
outstanding under its other credit facilities, repayment of indebtedness and/or
amortization payments. The facility contains restrictive covenants including
limitations on the amount of secured and unsecured debt, and requires the
Operating Partnership to maintain certain financial ratios. At December 31,
1997, the Operating Partnership was in compliance with these covenants. For
the year ended December 31, 1997, the Operating Partnership paid commitment
fees totaling $50.
On November 7, 1997, the Operating Partnership borrowed $85,000 from the
1997 Credit Facility and utilized the proceeds to retire and cancel previously
existing credit facilities and to pay for development activities. Deferred
financing costs related to the canceled credit facilities were written-off
resulting in an extraordinary loss of $162. On December 29, 1997, the
Operating Partnership borrowed an additional $42,000 to pay for acquisition of
Salem Center (Note 3) and for development activities. At December 31, 1997 the
1997 Credit Facility had a balance of $127,000.
On March 8, 1995, the Operating Partnership entered into a $50,000
secured credit facility agreement which provided for a two year commitment with
an option to extend for an additional year (which option was exercised on
January 22, 1997). Borrowings under this agreement were collateralized by
certain real estate assets. The credit facility bore interest at a floating
rate equal to 115 basis points over the established rate of AAA commercial
paper and was guaranteed by the Company. For the year ended December 31, 1997
and 1996, the Operating Partnership paid commitment fees totaling $280 and
$200, respectively. On November 7, 1997, borrowings under this credit facility
were retired and the facility was canceled.
F-10
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND PER PARTNERSHIP UNIT AMOUNTS)
4. BORROWINGS (CONTINUED)
On January 22, 1996, the Operating Partnership entered into a $25,000
unsecured credit facility agreement which provided for a two year commitment
with an option to extend for an additional year (which option was exercised on
January 24, 1997). On October 6, 1997, the limit was raised to $40,000. For
the year ended December 31, 1997 and 1996, the Operating Partnership paid
commitment fees totaling $86 and $67, respectively. On November 7, 1997,
borrowings under this credit facility were retired and the facility was
canceled.
NOTES
On January 21, 1994, a subsidiary of the Operating Partnership issued
$95,000 in secured notes bearing interest at 6.37% per annum. The notes
require quarterly interest payments and a principal payment of $11,875 on
January 21, 2000 with the remaining balance due on January 21, 2001. The
subsidiary has an option to extend the notes to January 21, 2003.
CONSTRUCTION LOAN
On July 30, 1996, Spokane Mall Development Company Limited Partnership, a
consolidated partnership, of which the Operating Partnership is the general
partner, entered into a $50,000 construction facility. The loan bears interest
at a variable interest rate indexed to the LIBOR rate. The proceeds from this
facility have been used to fund the development and construction of the Spokane
Valley Mall in Spokane, Washington. The construction loan has a three year
term with an optional two year extension, is secured by the Spokane Valley Mall
and is guaranteed by the Operating Partnership. At December 31, 1997, the loan
had a balance of $43,009.
MORTGAGE PAYABLE
In June 1997, the Operating Partnership assumed a mortgage note of
$24,755 as part of the acquisition of Silver Lake Mall (Note 3) and retired
portions of the debt principally using borrowings under a credit facility. The
assumed debt bears interest at 8.5% per annum and has a maturity date of
October 1, 2000 when a balloon payment of $11,971 is due. At December 31, 1997
the loan had a balance of $12,827.
INTEREST RATE PROTECTION AGREEMENT
In December 1997, the Operating Partnership entered into an interest rate
protection agreement with a notional value of $100,000 and a forward yield of
5.74% based on the 10-year treasury note. This interest rate protection
agreement will be used to hedge the interest rate on an anticipated offering of
unsecured debt. At December 31, 1997, the fair value of this instrument, as
estimated by dealers was $0.
SCHEDULED PRINCIPAL REPAYMENTS
The following summarizes the scheduled maturities of borrowings at
December 31, 1997:
YEAR TOTAL
---- --------
1998 $ 560
1999 43,589
2000 151,145
2001 84,741
2002 41
Thereafter 3,314
--------
$283,390
========
F-11
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND PER PARTNERSHIP UNIT AMOUNTS)
5. CAPITAL TRANSACTIONS
The limited partners of the Operating Partnership have an option to
convert their OP Units into shares of the Company's common stock. The
Operating Partnership will issue an equivalent number of OP Units to the
Company as general partnership interests. In 1997, 4,000 OP Units were
converted into shares.
On January 28, 1997, the Company sold 1,500,000 shares of common stock in
an underwritten public offering at $27.13 per share. Net proceeds of $38,632
were contributed to the Operating Partnership in exchange for additional OP
Units and were principally used to repay indebtedness incurred by the Operating
Partnership to fund acquisition activities.
On August 7, 1995, the Company sold 2,750,000 shares of common stock in
an underwritten public offering at $20.50 per share. Net proceeds of $52,887
were contributed to the Operating Partnership in exchange for additional OP
Units and were principally used to repay indebtedness incurred by the Operating
Partnership to fund acquisition activities.
On June 1, 1997, the Operating Partnership issued 72,000 OP Units in the
acquisition of Silver Lake Mall (Note 3). The value of the OP Units at June 1,
1997 was $1,863 (Note 8).
6. RENTAL INCOME
Substantially all real estate held for investment is leased to retail and
commercial tenants under arrangements which generally require the tenants to
pay property taxes, insurance and maintenance charges. These operating leases
generally range from 1 to 25 years and provide for minimum monthly rents and in
certain instances percentage rents based on the tenants' sales.
All non-cancelable leases, assuming no new or renegotiated leases or
option extensions, in effect at December 31, 1997 provide for the following
minimum future rental income:
YEAR TOTAL
---- --------
1998 $ 54,604
1999 59,103
2000 53,420
2001 48,026
2002 41,316
Thereafter 243,117
--------
$ 499,586
========
F-12
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND PER PARTNERSHIP UNIT AMOUNTS)
7. COMMITMENTS AND CONTINGENCIES
Future minimum rental payments under the terms of all non-cancelable
operating leases under which the Operating Partnership is the lessee,
principally for ground leases, are as follows:
YEAR TOTAL
---- --------
1998 $ 971
1999 983
2000 986
2001 998
2002 1,011
Thereafter 27,323
--------
$ 32,272
========
The Operating Partnership is a defendant in certain litigation relating
to its business activities. Management does not believe that the resolution of
these matters will have a materially adverse effect upon the Operating
Partnership.
8. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
During the years ended December 31, 1997 and 1996, non-cash investing and
financing transactions included an increase in accounts payable of $3,861
related to development activities, the assumption of debt related to the
acquisition of Salem Center totaling $494 in December 1997, the assumption of
debt related to the acquisition of Silver Lake Mall totaling $24,755 in June
1997, and the write-off of capitalized tenant allowances of $406 and $159,
respectively. In addition, holders of OP Units elected to convert 4,000 and
16,000 OP Units, having a recorded value of $40 and $164, into common stock for
the years ended December 31, 1997 and 1996, respectively.
Interest paid (net of capitalized amounts of $3,509, $1,261 and $788, for
the years ended December 31, 1997, 1996 and 1995) aggregated $8,276, $7,707,
and $6,597, for the years ended December 31, 1997, 1996 and 1995, respectively.
Purchase of the remaining 70% interest in Silver Lake Mall, Ltd.:
72,000 Operating Partnership Units issued $ 1,863
Book value of 30% equity investment in Silver Lake Mall, Ltd. (1,555)
Debt assumed 24,755
---------
$ 25,063
=========
9. RELATED PARTY TRANSACTIONS
On January 2, 1996, the Operating Partnership purchased an interest in an
affiliated limited partnership for $1,200. The affiliated limited
partnership's only asset was its ownership in OP Units. In June 1996, the
affiliated limited partnership was liquidated and 66,000 OP Units were received
by the Operating Partnership in such liquidation. To account for this
transaction, the Operating Partnership recorded a reduction in minority
interest liability for the book value of the acquired partner's interest of
$705, and recognized the excess cost over book value of $495 as an asset on the
Operating Partnership's books. This excess cost is being amortized over 40
years.
The Operating Partnership leases computer services from Alta Computer
Services, Inc. ("Alta"). Alta is majority owned by three directors of the
Company. The Operating Partnership paid $200, $194 and $196 in 1997, 1996 and
1995, respectively, for such services.
F-13
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND PER PARTNERSHIP UNIT AMOUNTS)
9. RELATED PARTY TRANSACTIONS (CONTINUED)
The Operating Partnership has entered into a management agreement under
which the Operating Partnership performs certain accounting and management
functions on behalf of a company, whose majority owner is the Chairman of the
Board of Directors of the Company. Management fees collected by the Operating
Partnership under this agreement totaled $72 for each of the three years ended
December 31, 1997.
10. STOCK INCENTIVE PLAN
On October 26, 1993, the Company adopted the 1993 Stock Option Plan which
authorizes the discretionary grant by the Executive Compensation Committee, of
options intended to qualify as "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code, to key employees of the Company and
the discretionary grant of nonqualified stock options to key employees,
directors and consultants of the Company. The maximum number of shares of
common stock subject to option under the Company's Plan is 1,100,000. The
proceeds received by the Company upon exercise of options are contributed to
the Operating Partnership in exchange for the issuance of an equivalent number
of OP Units. No stock options may be granted after ten years from the date of
adoption and options must be granted at a price generally not less than the
fair market value of the Company's common stock at the date of grant. These
options vest over a period of one to five years.
A summary of the Company's stock option plan is set forth below:
<TABLE>
<CAPTION>
1997 1996 1995
---------------- ----------------- ------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 558,000 $ 17.99 494,000 $ 17.56 550,000 $ 17.54
Granted 7,000 25.38 107,000 20.02 7,000 19.13
Exercised (12,000) 18.64 (22,000) 17.57 (55,000) 17.50
Forfeited -- -- (21,000) 18.85 (8,000) 17.50
------- ------- ------- ------- ------- -------
Outstanding at end of year 553,000* $ 18.07 558,000 $ 17.99 494,000 $ 17.56
======= ======= ======= ======= ======= =======
Exercisable at end of year 277,000 $ 17.87 178,000 $ 17.77 96,000 $ 17.83
======= ======= ======= ======= ======= =======
</TABLE>
* The weighted average remaining contractual life of options outstanding as of
December 31, 1997 was 8 years. The range of option prices was $17.50 to
$25.38 per share.
F-14
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND PER PARTNERSHIP UNIT AMOUNTS)
10. STOCK INCENTIVE PLAN (CONTINUED)
The Operating Partnership has applied Accounting Principals Board Opinion
25 and selected interpretations in accounting for the plan. Accordingly, no
compensation costs have been recognized. Had compensation costs for the plan
been determined based on the fair value at the grant date for options granted
in 1997, 1996 and 1995, respectively, in accordance with the method required by
SFAS 123, "Accounting for Stock-Based Compensation", the Operating Partnership
net income and net income per OP Unit would have been reduced to the proforma
amounts as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Net income
As reported $ 32,846 $ 28,494 $ 22,723
Proforma $ 32,800 28,451 22,707
Basic net income per OP Unit
As reported $ 1.56 $ 1.45 $ 1.26
Proforma 1.55 1.45 1.26
Diluted net income per OP Unit
As reported $ 1.54 $ 1.44 $ 1.26
Proforma 1.54 1.44 1.26
</TABLE>
The fair value of each option grant was estimated on the date of grant
using the Black-Sholes options pricing model using the following assumptions:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Risk free interest rate 6.76% 5.50% 6.96%
Dividend yield 7.00% 7.00% 7.00%
Expected life 9 years 10 years 10 years
Expected volatility 16.50% 16.00% 20.00%
Weighted average per share
fair value of an option granted
during the year $ 2.53 $ 1.47 $ 2.34
</TABLE>
11. EMPLOYEE BENEFIT PLAN
The Company has a 401(k) profit sharing plan which permits participating
employees to defer up to a maximum of 15% of their compensation. The Company
matches 50% of the qualified employees' contributions up to a maximum of $1 per
employee each year. Employees working a minimum of 1,000 hours per year who
have completed at least one year of service and attained the age of 21 are
qualified to participate in the plan. The employees' contributions are
immediately vested. Additionally, the Company annually contributes 3% of base
salary to the plan for each qualified employee. Contributions from the
Company vest at 20% per year. The Company's contributions to the plan for the
years ended December 31, 1997, 1996 and 1995 were $225, $190, and $159,
respectively.
F-15
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND PER PARTNERSHIP UNIT AMOUNTS)
12. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosures of estimated fair value were determined by
management using available market information. Considerable judgment is
necessary to interpret market data and develop estimated fair value.
Accordingly, the estimates presented herein are not necessarily indicative of
the amounts the Operating Partnership could realize on disposition of the
financial instruments. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value
amounts.
The carrying value of cash, accounts receivable, accounts payable and
accrued expenses at December 31, 1997 and 1996 are reasonable estimates of
their fair values because of the short maturity of these financial instruments.
Borrowings with an aggregate carrying value of $283,390 and $162,375 have
an estimated aggregate fair value of $283,533 and $158,287 at December 31, 1997
and 1996, respectively. Estimated fair value is based on interest rates
currently available to the Operating Partnership for issuance of borrowings
with similar terms and remaining maturities.
13. EARNINGS PER OP UNIT
Earnings per OP Unit have been computed pursuant to the provisions of
SFAS No. 128, "Earnings Per Share" which became effective after December 15,
1997; all periods prior thereto have been restated to conform with the
provisions of this Statement.
The following table provides a reconciliation of both income before
extraordinary items and the number of OP Units used in the computations of
"basic" earnings per OP Unit, which utilizes the weighted average number of OP
Units outstanding without regard to potentially dilutive OP Units and "diluted"
earnings per OP Units, which includes all such OP Units. Effect has been given
to the Company's Stock Option Plan (Note 10) since proceeds received by the
Company upon exercise of options are contributed to the Operating Partnership
in exchange for the issuance of an equivalent number of OP Units.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Income (Numerator):
Before extraordinary item $ 33,008 $ 28,494 $ 22,723
--------- --------- ---------
Applicable to OP Units $ 33,008 $ 28,494 $ 22,723
========= ========= =========
Shares (Denominator):
Basic-average OP Units outstanding 21,119 19,668 18,037
Add: Dilutive effect of stock options 166 85 66
--------- --------- ---------
Diluted OP Units 21,285 19,753 18,103
========= ========= =========
Per OP Unit - Income before extraordinary
item:
Basic $ 1.57 $ 1.45 $ 1.26
--------- --------- ---------
Diluted $ 1.55 $ 1.44 $ 1.26
========= ========= =========
</TABLE>
Options to purchase 553,000, 558,000 and 494,000 shares of common stock
were outstanding at December 31, 1997, 1996 and 1995, respectively (Note 10),
a portion of which has been reflected above using the treasury stock method.
F-16
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND PER PARTNERSHIP UNIT AMOUNTS)
14. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Financial information for each of the quarters in the years ended
December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH TOTAL
-------- -------- -------- -------- --------
YEAR ENDED
DECEMBER 31, 1997
- -----------------
<S> <C> <C> <C> <C> <C>
Total Revenues $ 18,375 $ 18,617 $ 21,773 $ 24,208 $ 82,973
Income Before Extraordinary Item, Gain on
Sale of Real Estate and Minority Interest 7,555 8,137 8,230 9,141 33,063
Net Income 7,456 8,368 8,137 8,885 32,846
Basic Earnings Per OP Unit .36 .39 .38 .43 1.56
Diluted Earnings Per OP Unit .36 .39 .38 .41 1.54
Distributions Declared Per OP Unit .435 .435 .435 .45 1.755
</TABLE>
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH TOTAL
-------- -------- -------- -------- --------
YEAR ENDED
DECEMBER 31, 1997
- -----------------
<S> <C> <C> <C> <C> <C>
Total Revenues $ 16,942 $ 18,407 $ 18,497 $ 19,103 $ 72,949
Income Before Extraordinary Item, Gain on
Sale of Real Estate and Minority Interest 6,693 7,234 7,088 7,774 28,789
Net Income 6,696 7,068 7,059 7,671 28,494
Basic Earnings Per OP Unit .34 .36 .36 .39 1.45
Diluted Earnings Per OP Unit .34 .36 .36 .38 1.44
Distributions Declared Per OP Unit .420 .420 .420 .435 1.695
</TABLE>
15. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The following unaudited proforma summary financial information for the
years ended December 31, 1997 and 1996, is presented as if the acquisitions of
Grand Teton Mall, Silver Lake Mall, Visalia Mall, Salem Center and the
additional common stock offering and additional units issued on January 22,
1997, had been consummated as of January 1, 1997 and January 1, 1996,
respectively:
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Revenues $ 92,602 $ 88,620
Income Before Extraordinary Item 33,858 31,531
Net Income 33,696 31,531
Basic Earnings Per OP Unit:
Income Before Extraordinary Item 1.59 1.48
Net Income 1.58 1.48
Diluted Earnings Per OP Unit:
Income Before Extraordinary Item 1.58 1.48
Net Income 1.57 1.48
</TABLE>
The proforma financial information summarized above is presented for
information purposes only and may not be indicative of what actual results of
operations would have been had the acquisitions and offering been completed as
of the beginning of the periods presented, nor does it purport to represent the
results of operations for future periods.
F-17
<PAGE>
SCHEDULE II
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT
BEGINNING CHARGED TO BALANCE AT
OF YEAR EXPENSE DEDUCTIONS END OF YEAR
--------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Year ended December 31, 1997
Allowance for uncollectible accounts $ 489 $ 346 $ 265 $ 570
Year ended December 31, 1996
Allowance for uncollectible accounts $ 504 $ 340 $ 355 $ 489
Year ended December 31, 1995
Allowance for uncollectible accounts $ 437 $ 258 $ 191 $ 504
</TABLE>
F-18
<PAGE>
SCHEDULE III
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH CARRIED
INITIAL COSTS CAPITALIZED AT CLOSE OF PERIOD
----------------------- SUBSEQUENT ----------------------------
RELATED BUILDING & TO BLDG. &
ENCUMBRANCES LAND IMPROVEMENTS ACQUISITION LAND IMPROV. TOTAL(1)
------------ ---- ------------ ----------- ---- ------- --------
DESCRIPTION
-----------
<S> <C> <C> <C> <C> <C> <C> <C>
MALLS:
Animas Valley Mall, Farmington, NM $ -- $ 3,902 $24,059 $ 28 $ 3,902 $24,087 $27,989
Boise Towne Square, Boise, ID 32,475 6,512 -- 37,045 6,512 37,045 43,557
Cache Valley Mall, Logan, UT 5,781 909 -- 8,419 909 8,419 9,328
Cottonwood Mall, Salt Lake City, UT 19,857 7,514 20,776 30,851 7,514 51,627 59,141
Eastridge Mall, Casper, WY -- 4,300 19,896 3,421 4,300 23,318 27,618
Grand Teton Mall, Idaho Falls, ID -- 5,802 28,614 92 5,802 28,706 34,508
North Plains Mall, Clovis, NM 5,472 1,592 -- 10,863 1,592 10,863 12,455
Pine Ridge Mall, Pocatello, ID 10,019 1,883 -- 21,566 1,883 21,566 23,449
Red Cliffs Mall, St. George, UT 6,132 903 -- 12,846 903 12,846 13,749
Salem Center Mall, Salem, OR -- 1,704 30,504 -- 1,704 30,504 32,208
Silver Lake Mall, Coeur d'Alene, ID 12,827 4,055 21,379 181 4,055 21,560 25,615
Spokane Valley Mall, Spokane, WA 43,009 6,645 34,341 16,869 6,645 51,210 57,855
Three Rivers Mall, Kelso, WA 10,175 1,977 -- 20,380 1,977 20,380 22,357
Visalia Mall, Visalia, CA -- 6,146 31,812 834 6,146 32,645 38,791
White Mountain Mall, Rock Springs, WY 5,083 1,120 -- 15,789 1,120 15,789 16,909
COMMUNITY CENTERS &
FREE-STANDING RETAIL:
Alameda Plaza, Pocatello, ID -- 500 -- 3,365 500 3,365 3,865
Anaheim Plaza, Anaheim, CA -- -- -- 54 -- 54 54
Austin Bluffs Plaza,
Colorado Springs, CO -- 1,488 -- 1,943 1,488 1,943 3,431
Bailey Hills Plaza, Eugene, OR -- 157 -- 317 157 317 474
Bank One, Nephi, UT -- 17 183 -- 17 183 200
Baskin Robbins 17th St.,
Idaho Falls, ID -- 9 67 7 9 74 83
Boise Plaza, Boise, ID -- 322 -- 1,382 322 1,382 1,704
Boise Towne Plaza, Boise, ID -- 3,316 4,243 1,049 3,316 5,292 8,608
Cottonwood Square, Salt Lake City, UT -- 1,926 3,535 -- 1,926 3,535 5,461
Division Crossing, Portland, OR -- 2,429 -- 4,483 2,429 4,483 6,912
Fort Union Plaza, Salt Lake City, UT -- 21 -- 1,673 21 1,673 1,694
Fremont Plaza, Las Vegas, NV -- -- -- 2,254 -- 2,254 2,254
Fry's Shopping Plaza, Glendale, AZ -- 353 -- 4,582 1,254 3,682 4,936
Gateway Crossing, Bountiful, UT -- 3,644 -- 8,480 3,644 8,480 12,124
ACCUMULATED DATE OF DATE DEPRECIABLE
DEPRECIATION CONSTRUCTION ACQUIRED LIVES-YEARS
- ------------ ------------ -------- -----------
<C> <C> <C> <C>
$ 1,518 -- 1995 40
12,455 1987-88 1985-86 5-40
4,209 1975-76 1973-75 10-40
18,048 1981-87 1980 4-40
1,321 -- 1995 40
1,252 -- 1996 40
3,409 1984-85 1979-84 10-40
7,916 1979-81 1979 10-40
2,913 1989-90 1989 3-40
-- -- 1997 40
293 -- 1997 40
475 1990-97 1990 40
4,971 1986-87 1984 10-40
397 -- 1997 40
6,053 1977-78 1977 40
1,837 1973 1973 40
30 1980-81 1979 40
594 1985 1979 3-40
51 1988-89 1988 40
140 -- 1976 40
18 -- 1988 40
900 1970-71 1970 40
15 1996-97 1996-97 40
177 -- 1995 40
813 1990-91 1990 20-40
628 1979-84 -- 40
1,132 1976-80 -- 40
1,544 1980-81 1980 40
1,052 1990-92 1990 40
</TABLE>
F-19
<PAGE>
SCHEDULE III
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH CARRIED
INITIAL COSTS CAPITALIZED AT CLOSE OF PERIOD
-------------------- SUBSEQUENT -----------------------------
RELATED BUILDING & TO BLDG. &
ENCUMBRANCES LAND IMPROVEMENTS ACQUISITION LAND IMPROV. TOTAL(1)
------------ ---- ------------ ----------- ---- ------- --------
DESCRIPTION
-----------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMUNITY CENTERS &
FREE-STANDING RETAIL (CONTINUED):
Halsey Crossing, Gresham, OR -- -- -- 2,302 -- 2,302 2,302
North Temple Shops, Salt Lake City, UT -- 60 -- 177 60 177 237
Orem Plaza Center Street, Orem, UT -- 371 330 1,091 344 1,448 1,792
Orem Plaza State Street, Orem, UT -- 126 -- 687 126 687 813
Plaza 800, Sparks, NV -- 33 2,969 38 33 3,007 3,040
Plaza 9400, Sandy, UT -- -- -- 4,514 -- 4,514 4,514
Red Cliffs Plaza, St. George, UT -- -- 2,403 -- -- 2,403 2,403
River Pointe Plaza, West Jordan, UT -- 1,130 -- 2,668 1,130 2,668 3,798
Riverside Plaza, Provo, UT -- 427 1,886 1,289 427 3,175 3,602
Twin Falls Crossing, Twin Falls, ID -- 125 -- 776 125 776 901
University Crossing, Orem, UT -- 230 -- 4,424 230 4,424 4,654
Woodlands Village, Flagstaff, AZ -- 2,068 5,329 228 2,068 5,557 7,625
Yellowstone Square, Idaho Falls, ID -- 355 -- 4,552 355 4,552 4,907
COMMERCIAL:
First Security Place, Boise, ID -- 300 -- 3,249 300 3,249 3,549
Price Business Center - Commerce Park,
West Valley City, UT -- 415 2,109 8,509 1,147 9,886 11,033
Price Business Center-Pioneer Square,
Salt Lake City, UT -- 658 -- 10,468 658 10,468 11,126
Price Business Center-South Main,
Salt Lake City, UT -- 317 -- 2,469 317 2,469 2,786
Price Business Center-Timesquare,
Salt Lake City, UT -- 581 -- 9,019 581 9,019 9,600
Sears-Eastbay, Provo, UT 1,927 275 -- 2,079 275 2,079 2,354
OTHER REAL ESTATE:
Provo Towne Centre, Provo, UT 3,000 13,829 16,661 -- 13,829 16,661 30,490
Miscellaneous Real Estate -- 3,471 17 7,029 3,471 7,045 10,516
-------- ------- -------- -------- ------- -------- --------
TOTAL $155,763 $93,917 $251,113 $274,341 $95,523 $523,848 $619,371
======== ======= ======== ======== ======= ======== ========
ACCUMULATED DATE OF DATE DEPRECIABLE
DEPRECIATION CONSTRUCTION ACQUIRED LIVES-YEARS
- ------------ ------------ -------- -----------
<C> <C> <C> <C>
492 1989-91 -- 4-40
83 1970 1970 40
592 1976-87 1973 10-40
345 1975 1973 29-40
1,665 1974 -- 40
1,916 1976-84 -- 10-40
195 1994-95 1994-95 40
727 1987-88 1986-87 5-40
1,461 1978-81 1977 40
407 1976 1975 40
1,681 1971-92 1971 40
455 -- 1994 40
2,554 1972-77 1972 40
1,471 1978-80 1978 10-40
1,349 1980 1973-95 40
3,311 1974-92 1973 3-40
1,298 1967-82 1966-81 3-40
3,544 1974-80 1972-80 5-40
457 1989-90 1989 40
-- 1997(2) 1997 40
240 -- 1980-95 40
-------
$98,404
=======
</TABLE>
- ---------------------------
(1) The aggregate cost for Federal Income Tax purposes was approximately
$642,645 at December 31, 1997.
(2) Construction in progress as of December 31, 1997.
F-20
<PAGE>
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
A summary of activity for real estate investments and accumulated
depreciation is as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Real Estate Investments:
Balance at Beginning of Year $ 453,241 $ 388,205 $ 321,242
Acquisitions 96,615 37,055 59,081
Improvements 69,921 28,268 9,903
Disposition of Property (406) (287) (2,021)
--------- --------- ---------
Balance at End of Year $ 619,371 $ 453,241 $ 388,205
========= ========= =========
Accumulated Depreciation:
Balance at Beginning of Year $ 87,318 $ 77,462 $ 69,660
Depreciation 11,492 10,015 9,386
Depreciation of Disposed Property (406) (159) (1,584)
--------- --------- ---------
Balance at End of Year $ 98,404 $ 87,318 $ 77,462
========= ========= =========
</TABLE>
F-21
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements - None
(b) Pro Forma Financial Information - None
(c) Exhibits
23 - Consent of Accountants
<PAGE>
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
By: JP Realty, Inc. as a General Partner
Date: March 3, 1998 By: /s/ M. Scott Collins
--------------------- --------------------------------------
M. Scott Collins, Vice-President--Chief
Financial Officer and Treasurer
<PAGE>
EXHIBIT INDEX
EXHIBIT NO.
- -----------
23 Consent of Accountants
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statements on Form S-3 (No. 333-34835
and No. 333-34835-01) of Price Development Company, Limited Partnership of
our report dated February 4, 1998 appearing on page F-2 of this Form 8-K.
Price Waterhouse LLP
Salt Lake City, Utah
March 3, 1998
