UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 For the fiscal year ended December
31, 1998
( )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------------
Commission File Number 333-63723-02
RRC FL FIVE, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-3248289
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
121 West Forsyth Street, Suite 200 (904) 356-7000
Jacksonville, Florida 32202 (Registrant's telephone No.)
(Address of principal executive offices) (zip code)
Securities registered pursuant to Section 12(b)
of the Act:
NONE
(Title of Class)
(Name of exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. YES ( ) NO (x )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. (X)
Registrant is a wholly owned subsidiary of Regency Realty Corporation.
Documents Incorporated by Reference
None
<PAGE>
TABLE OF CONTENTS
Form 10-K
Item
No.
Report Page
This filing constitutes a special financial report pursuant to Rule 5d-2 of the
Securities Exchange Act of 1934. This report contains only the financial
statements of the registrant for 1998, the last full fiscal year preceding the
fiscal year in which the registrant's registration statement on Form S-4 (No.
333-63723) became effective.
PART IV
Item 14.
Exhibits, Financial Statements, Schedules and Reports on Form 8-K..............1
(a) Financial Statements and Financial Statement Schedules:
The financial statements together with the report of KPMG LLP dated February 1,
1999, are listed on the index immediately preceding the financial statements at
the end of this report.
(b) Reports on Form 8-K: None
(c) Exhibits:
23.Consent of KPMG LLP
27.Financial Data Table
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
RRC FL FIVE, INC.
Date: March 17, 1999 By: /s/ Martin E. Stein, Jr.
------------------------
Martin E Stein, Jr., Chairman of the Board
and Chief Executive Officer
Date: March 17, 1999 By: /s/ Bruce M. Johnson
--------------------
Bruce M. Johnson, Managing Director and
Principal Financial Officer
Date: March 17, 1999 By: /s/ J. Christian Leavitt
------------------------
J. Christian Leavitt, Senior Vice President,
Finance and Principal Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Date: March 17, 1999 /s/ Martin E. Stein, Jr.
------------------------
Martin E. Stein, Jr., Chairman of the Board
and Chief Executive Officer
Date: March 17, 1999 /s/ Mary Lou Rogers
-------------------
Mary Lou Rogers, President, Chief Operating
Officer and Director
Date: March 17, 1999 /s/ Thomas B. Allin
-------------------
Thomas B. Allin, Director
<PAGE>
Independent Auditors' Report
The Board of Directors of Regency Realty Corporation and
RRC FL Five, Inc. :
We have audited the accompanying balance sheets of RRC FL Five, Inc. as of
December 31, 1998 and 1997, and the related statements of operations,
stockholder's equity, and cash flows for each of the years in the three-year
period ended December 31, 1998. 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 in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of RRC FL Five, Inc. as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
for each of the years in the three-year period ended December 31, 1998, in
conformity with generally accepted accounting principles.
KPMG LLP
Jacksonville, Florida
February 28, 1999
<PAGE>
RRC FL FIVE, INC.
Balance Sheets
December 31, 1998 and 1997
1998 1997
------------- ---------------
Assets
Cash restricted for tenants'
security deposits $ 73,860 48,653
Property and buildings, at
cost (note 2):
Land 2,751,094 2,751,094
Buildings and improvements 9,475,619 9,435,081
-------------- ---------------
12,226,713 12,186,175
Less accumulated depreciation 2,111,008 1,635,974
-------------- ---------------
Net property and buildings 10,115,705 10,550,201
--------------- ---------------
Other assets:
Escrow balances 21,044 64,252
Accounts receivable and other assets 186,472 238,530
Deferred costs, less accumulated
amortization (note 4) 224,638 230,481
-------------- -------------
Total other assets 432,154 533,263
-------------- -------------
$ 10,621,719 11,132,117
============== =============
Liabilities and Stockholder's
Equity
Liabilities:
Mortgage loan payable (note 2) 8,602,767 8,713,253
Accounts payable and other liabilities 73,463 5,241
Tenants' security deposits 73,860 48,653
------------- --------------
Total liabilities 8,750,090 8,767,147
-------------- --------------
Stockholder's equity:
Common stock $.01 par value per share:
10,000 shares authorized, issued and
outstanding 100 100
Additional paid in capital 3,139,319 3,250,449
Accumulated deficit (1,267,790) (885,579)
-------------- --------------
Total stockholder's equity 1,871,629 2,364,970
-------------- -------------
$ 10,621,719 11,132,117
============== =============
See accompanying notes to financial statements.
<PAGE>
RRC FL FIVE, INC.
Statements of Operations
Years ended December 31, 1998, 1997 and 1996
1998 1997 1996
------------- -------------- -------------
Revenue:
Rental income (note 3) $ 1,102,604 1,035,342 1,048,489
Tenant reimbursements 340,879 305,979 381,809
Other income 52,652 54,143 109,289
-------------- -------------- -----------
Total revenue 1,496,135 1,395,464 1,539,587
-------------- -------------- -----------
Expenses:
Operating and maintenance
(note 4) 245,502 255,702 267,789
Depreciation and amortization 531,614 520,571 514,085
General and administrative 56,718 55,456 70,329
Real estate taxes 221,446 226,336 233,880
Interest 823,066 833,446 843,036
-------------- -------------- --------------
Total expenses 1,878,346 1,891,511 1,929,119
-------------- -------------- --------------
Net loss $ (382,211) (496,047) (389,532)
============== ============== ==============
See accompanying notes to financial statements.
<PAGE>
RRC FL FIVE, INC.
Statements of Stockholder's Equity
December 31, 1998, 1997 and 1996
Additional Total
Common Paid In Accumulated Stockholder's
Stock Capital Deficit Equity
--------- ---------- -------- ------------
Balance at December 31, 1995 $ 100 3,183,351 -- 3,183,451
Additional paid in capital
(dividends), net -- (118,055) -- (118,055)
Net loss -- -- (389,532) (389,532)
--------- --------- ----------- -----------
Balance at December 31, 1996 100 3,065,296 (389,532) 2,675,864
Additional paid in capital
(dividends), net -- 185,153 -- 185,153
Net loss -- -- (496,047) (496,047)
--------- --------- ---------- -----------
Balance at December 31, 1997 100 3,250,449 (885,579) 2,364,970
Additional paid in capital
(dividends), net -- (111,130) -- (111,130)
Net loss -- -- (382,211) (382,211)
---------- ---------- ---------- ----------
Balance at December 31, 1998 $ 100 3,139,319 (1,267,790) 1,871,629
=========== ========== =========== ===========
See accompanying notes to financial statements.
<PAGE>
RRC FL FIVE, INC.
Statements of Cash Flows
Years ended December 31, 1998, 1997 and 1996
1998 1997 1996
----------- ----------- -----------
Cash flows from operating activities:
Net loss $(382,211) (496,047) (389,532)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization 531,614 520,571 514,085
Deferred costs (50,737) (45,900) (26,145)
Changes in assets and liabilities:
Escrow balances 43,208 (19,710) 27,569
Accounts receivable and other assets 52,058 (11,537) 121,458
Accounts payable and other liabilities 68,222 (15,132) 21,066
Cash restricted for tenants' security
deposits (25,207) (214) 27,075
Tenants' security deposits 25,207 214 (27,075)
--------- -------- ---------
Net cash provided by (used in)
operating activities 262,154 (67,755) 268,501
---------- ---------- ----------
Cash flows from investing activities
- - additions to property and buildings (40,538) (7,248) (42,437)
---------- ---------- ----------
Cash flows from financing activities:
Principal payments on mortgage loan (110,486) (110,150) (108,009)
Additional paid in capital (dividends), net (111,130) 185,153 (118,055)
---------- ---------- ----------
Net cash (used in) provided by
financing activities (221,616) 75,003 (226,064)
---------- ---------- ----------
Net change in cash -- -- --
Cash at beginning of year -- -- --
---------- ---------- ----------
Cash at end of year $ -- -- --
========== ========== ==========
Supplemental disclosure of cash flow
information:
Cash paid for interest $ 823,066 833,446 843,036
========== ========== ==========
See accompanying notes to financial statements.
<PAGE>
RRC FL FIVE, INC.
Notes to Financial Statements
December 31, 1998, 1997 and 1996
(1) Summary of Significant Accounting Policies
(a) Company Structure
RRC FL Five, Inc. (the Company) was formed as a Florida
corporation for the purpose of acquiring, leasing and operating
Aventura Shopping Center a 102,876 square foot shopping center
located in Miami, Florida. The Company is 100% owned by Regency
Realty Corporation (RRC). Aventura, which was constructed during
1974, was acquired in 1994 for approximately $12.1 million. At
December 31, 1998, its net cost, for federal income tax purposes
was approximately $2.0 million.
(b) Method of Accounting
The accompanying financial statements were prepared on the accrual
basis of accounting. No provision for income taxes is made because
the Company is a qualified REIT subsidiary of RRC, and accordingly
such subsidiaries are not subject to income taxes under the
Internal Revenue Code.
(c) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the Company's
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.
(d) Property and Buildings
Property and building are recorded at cost. Major additions and
improvements to property and buildings are capitalized to the
property accounts, while replacements, maintenance, and repairs
which do not improve or extend the useful lives of the respective
assets are reflected in operations. Depreciation is computed using
the straight-line method over the estimated useful lives of the
property and buildings, which is 39 years for buildings and
improvements and the life of the lease term for tenant
improvements.
(e) Revenue Recognition
The Company leases space to tenants under agreements with varying
terms. Leases are accounted for as operating leases with minimum
rent recognized on a straight-line basis over the term of the
lease regardless of when payments are due. Contingent rentals are
included in income in the period earned.
<PAGE>
RRC FL FIVE, INC.
Notes to Financial Statements
December 31, 1998, 1997 and 1996
(f) Deferred Costs
Deferred costs consist of costs associated with leasing the
property. Such costs are deferred and amortized using the
straight-line method over the terms of the respective leases.
(g) Cash and Cash Equivalents
For the purposes of the statement of cash flows, the Company
considers all instruments with a maturity of 90 days or less at
purchase to be cash equivalents.
(h) Impairment of Long-Lived Assets
The Company follows the provisions of Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed Of." This
Statement requires that long-lived assets be reviewed for
impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.
Recoverablility of assets to be held and used is measured by
comparison of the carrying amount of an asset to future net cash
flows expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amounts of the assets
exceed their fair value, less costs to sell.
(i) Earnings per Share
Since all of the outstanding shares of the Company are owned by
RRC, management has determined that calculation and presentation
of earnings per share would not be meaningful.
(2) Mortgage Loan Payable
Mortgage note payable to a bank, bearing interest at 9.5% per annum,
payable in monthly installments of $78,633, including principal and
interest, maturing on March 1, 2002. The mortgage loan is secured by the
property and buildings of the Company.
Principal maturities on the mortgage loan is as follows:
Year ending December 31, Amount
1999 $ 131,978
2000 145,076
2001 159,475
2002 8,166,238
----------------
$ 8,602,767
================
<PAGE>
RRC FL FIVE, INC.
Notes to Financial Statements
December 31, 1998, 1997 and 1996
(3) Leases
The Company has various tenant leases with terms that expire through
2009. Future minimum rental payments under noncancelable operating leases
as of December 31, 1998, including renewed terms and new tenants, are as
follows:
Year ending December 31, Amount
1999 $ 969,883
2000 944,224
2001 898,641
2002 870,047
2003 746,744
Thereafter 1,801,969
----------------
$ 6,231,508
=================
Most tenants are responsible for payment or reimbursement of their
proportionate share of taxes, insurance, and common area expenses.
During 1998, Bankunited and Safra Republic Bank paid base rent of
$152,229 and $318,750, respectively, which exceeded 10% of the total
minimum rent earned by the Company.
During each of 1997 and 1996, one tenant, Publix Supermarkets, paid
minimum rents totaling $107,724, which exceeded 10% of the total minimum
rent earned by the Company.
(4) Related Party Transactions
The Company paid fees for property management to RRC of $55,557, $55,252,
and $60,170 for the years ended December 31, 1998, 1997 and 1996,
respectively. In addition, during 1996 the Company paid RRG, an affiliate
of RRC, $9,000, for asset management services.
The Company paid tenant lease commissions to RRC of $50,737, 45,900, and
$26,145 for the years ended December 31, 1998, 1997 and 1996,
respectively. Such payments have been recorded as deferred leasing costs
in the accompanying balance sheets.
Exhibit 23
Independent Auditors' Consent
The Board of Directors
Regency Realty Corporation:
We consent to incorporation by reference in the registration statements (No.
333-72899) on Form S-3 and (No. 333-63723) on Form S-4 of Regency Centers, L.P.,
of our report dated February 28, 1999, relating to the balance sheets of RRC FL
Five, Inc. as of December 31, 1998 and 1997, and the related statements of
operations, stockholder's equity, and cash flows for each of the years in the
three year period ended December 31, 1998, which report appears in the December
31, 1998, annual report on Form 10-K of RRC FL Five, Inc.
KPMG LLP
Jacksonville, Florida
March 12, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM RRC
FL FIVE, INC.'S ANNUAL REPORT FOR THE YEAR ENDED 12/31/98
</LEGEND>
<CIK> 0001066248
<NAME> RRC FL FIVE, INC
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 73,860
<SECURITIES> 0
<RECEIVABLES> 186,472
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 12,226,713
<DEPRECIATION> 2,111,008
<TOTAL-ASSETS> 10,621,719
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 100
<OTHER-SE> 1,871,529
<TOTAL-LIABILITY-AND-EQUITY> 10,621,719
<SALES> 0
<TOTAL-REVENUES> 1,496,135
<CGS> 0
<TOTAL-COSTS> 466,948
<OTHER-EXPENSES> 531,614
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 823,066
<INCOME-PRETAX> (382,211)
<INCOME-TAX> 0
<INCOME-CONTINUING> (382,211)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (382,211)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
