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 333-63723-04
RRC ACQUISITIONS, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-3210155
(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)
Not Applicable
(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)
The 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 ACQUISITIONS, 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 Acquisitions, Inc.:
We have audited the accompanying balance sheets of RRC Acquisitions, Inc. as of
December 31, 1998 and 1997, and the related statements of operations,
stockholder's equity, and cash flows for the years then ended. 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 Acquisitions, Inc. as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles.
KPMG LLP
Jacksonville, Florida
February 28, 1999
<PAGE>
RRC ACQUISITIONS, INC.
Balance Sheets
December 31, 1998 and 1997
1998 1997
------------ ------------
Assets
Cash restricted for tenant's
security deposits $ 26,645 30,714
Property and buildings, at cost:
Land 3,866,500 3,866,500
Buildings and improvements 14,172,640 14,019,614
------------ ------------
18,039,140 17,886,114
Less accumulated depreciation 447,889 86,841
------------ ------------
Net property and buildings 17,591,251 17,799,273
------------ ------------
Land held for investment 874,858 --
Other assets:
Accounts receivable and other assets 340,758 93,413
Deferred leasing costs, less accumulated
amortization (note 3) 50,688 7,411
------------ ------------
Total other assets 391,446 100,824
------------- ------------
$ 18,884,200 17,930,811
============ ============
Liabilities and Stockholder's Equity
Liabilities:
Accounts payable and other liabilities 282,948 188,264
Tenants' security deposits 26,645 30,714
------------- ------------
Total liabilities 309,593 218,978
------------- ------------
Stockholder's equity:
Common stock $.01 par value per share:
10,000 shares authorized, issued and
outstanding 100 100
Additional paid in capital 16,936,435 17,425,605
Retained earnings 1,638,072 286,128
------------ ------------
Total stockholder's equity 18,574,607 17,711,833
------------ ------------
18,884,200 17,930,811
============ ============
See accompanying notes to financial statements.
<PAGE>
RRC ACQUISITIONS, INC.
Statements of Operations
Years ended December 31, 1998 and 1997
1998 1997
----------------- ---------------
Revenues:
Rental income (note 2) $ 1,861,368 393,892
Tenant reimbursements and other income 550,990 113,528
---------------- ----------------
Total revenues 2,412,358 507,420
---------------- ----------------
Expenses:
Operating and maintenance (note 3) 178,663 25,875
Depreciation and amortization 369,239 87,277
General and administrative 188,849 44,082
Real estate taxes 323,664 64,058
---------------- ----------------
Total expenses 1,060,415 221,292
---------------- ----------------
Net income $ 1,351,943 286,128
================ ===============
See accompanying notes to financial statements.
<PAGE>
RRC ACQUISITIONS, INC.
Statements of Stockholder's Equity
Years ended December 31, 1998 and 1997
Additional; Total
Common Paid in Retained Stockholder's
Stock Capital Earnings Equity
------- ------------ ----------- ------------
Balance at December 31, 1996 $ 100 -- -- 100
Additional paid in capital -- 17,425,605 -- 17,425,605
Net income -- -- 286,128 286,128
------- ------------ ------------ -----------
Balance at December 31, 1997 100 17,425,605 286,128 17,711,833
Additional paid in capital
(dividends), net -- (1,364,027) -- (1,364,027)
Contribution of land -- 874,858 -- 874,858
Net income -- -- 1,351,943 1,351,943
-------- ------------ ----------- ------------
Balance at December 31, 1998 $ 100 16,936,436 1,638,071 18,574,607
======== ============ =========== ===========
See accompanying notes to financial statements.
<PAGE>
RRC ACQUISITIONS, INC.
Statements of Cash Flows
Years ended December 31, 1998 and 1997
1998 1997
----------- -----------
Cash flows from operating activities:
Net income $ 1,351,943 286,128
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 369,239 87,277
Deferred costs (51,468) (7,847)
Changes in assets and liabilities:
Accounts receivable and other assets (247,345) (86,907)
Accounts payable and other liabilities 94,684 (40,263)
Cash restricted for tenants' security deposits 4,069 -
Tenants' security deposits (4,069) -
-------------- ---------
Net cash provided by operating activities 1,517,053 238,388
-------------- ---------
Cash flows from investing activities - purchase
of and additions to property and buildings (153,026) (17,663,993)
-------------- ------------
Cash flows from financing activities-
additional paid in capital (dividends),
net (1,364,027) 17,425,605
-------------- -----------
Net change in cash - -
Cash at beginning of year - -
-------------- ------------
Cash at end of year $ - -
============== =============
Supplemental disclosure of non-cash
transactions:
Liabilities assumed in the acquisition of
property and buildings $ - 222,122
============== =============
Land contributed recorded as a capital
contribution $ 874,858 -
============== ============
See accompanying notes to financial
statements.
<PAGE>
RRC ACQUISITIONS, INC.
Notes to Financial Statements
December 31, 1998 and 1997
(1) Summary of Significant Accounting Policies
(a) Company Structure
RRC Acquisitions, Inc. (the Company) was formed as a Florida
corporation on November 16, 1993 for the purpose of acquiring,
leasing and operating shopping centers. The Company was inactive,
and thus had no operations, until November 10, 1997 when it
purchased Kingsdale Shopping Center, a 255,177 square foot
shopping center located in Columbus, Ohio, for approximately $17.9
million. Kingsdale, which was constructed during 1997, has a net
cost, for federal income tax purposes, of approximately $17.7
million at December 31, 1998. The Company is 100% owned by Regency
Realty Corporation (RRC).
On December 30, 1998, RRC FL Seven, Inc., a wholly-owned
subsidiary of RRC was merged into the Company. RRC FL Seven, Inc.
owned a single parcel of land and has no operations. The merger
was accounted for at the historical cost of RRC FL Seven, Inc.
since both entities are wholly-owned by RRC.
(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.
<PAGE>
RRC ACQUISITIONS, INC.
Notes to Financial Statements
December 31, 1998 and 1997
(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.
(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.
Recoverability 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.
<PAGE>
RRC ACQUISITIONS, INC.
Notes to Financial Statements
December 31, 1998 and 1997
(2) Leases
The Company has various tenant leases with terms that expire through
2006. 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 $ 1,675,011
2000 1,635,083
2001 1,185,606
2002 852,507
2003 602,920
Thereafter 2,995,315
----------------
$ 8,946,442
================
Most tenants are responsible for payment or reimbursement of their
proportionate share of taxes, insurance, and common area expenses.
During 1998, one tenant, Stein Mart, paid base rent of $197,868, which
exceeded 10% of the total minimum rent earned by the Company.
(3) Related Party Transactions
The Company paid fees for property management to RRC of $92,161 and
$19,640 for the years ended December 31, 1998 and 1997, respectively.
The Company paid tenant lease commissions to RRC of $51,468 and $7,847
for the years ended December 31, 1998 and 1997, respectively. Such
payments have been recorded as deferred leasing costs in the accompanying
balance sheets.
<PAGE>
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
Acquisitions, Inc. as of December 31, 1998 and 1997, and the related statements
of operations, stockholder's equity, and cash flows for the years then ended,
which report appears in the December 31, 1998, annual report on Form 10-K of RRC
Acquisitions, Inc.
KPMG LLP
Jacksonville, Florida
March 12, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM RRC
ACQUISITIONS, INC.'S FORM 10-K FOR THE YEAR ENDED 12/31/98
</LEGEND>
<CIK> 0001066250
<NAME> RRC ACQUISITIONS, INC.
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<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 26,645
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<RECEIVABLES> 340,758
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