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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): SEPTEMBER 11,
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1997
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JP REALTY, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Maryland 1-12560 87-0515088
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification Number)
Incorporation)
35 CENTURY PARK-WAY, SALT LAKE CITY, UTAH 84115
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(Address of Principal Executive Offices, Including Zip Code)
Registrant's Telephone Number, Including Area Code: (801) 486-3911
N/A
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(Former Name of Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
In June 1997, JP Realty, Inc. (the "Company") acquired two enclosed
regional malls, Silver Lake Mall located in Coeur D'Alene, Idaho
and Visalia Mall located in Visalia, California. Prior to June
1997, the Company held a 30% interest in Silver Lake Mall. In June
1997, the Company acquired the remaining 70% interest in Silver
Lake Mall, Ltd., a limited partnership owning Silver Lake Mall, by
issuing 72,000 units of limited partner interest in Price
Development Company, Limited Partnership, the Company's operating
partnership, and assuming debt of $24,755,000. The Company
acquired Visalia Mall for $38,000,000, of which $37,000,000 was
paid out of the Company's credit facilities.
On January 28, 1997, the Company sold 1,500,000 shares of Common
Stock in an underwritten public offering at an offering price of
$27.125 per share. Net proceeds of the offering to the Company
totaled approximately $38,600,000.
The following unaudited pro forma condensed statement of operations
for the six-month period ended June 30, 1997 is presented as if the
acquisitions of Silver Lake Mall and Visalia Mall and the public
offering of Common Stock had occurred on January 1, 1997.
Pro forma information is based upon the historical consolidated
results of operations of the Company for the six-month period ended
June 30, 1997, giving effect to the transactions described above.
The unaudited pro forma condensed consolidated statement of
operations should be read in conjunction with the historical
financial statements and notes thereto of the Company included in
the Company's Forms 10-K and 10-Q for the year ended December 31,
1996 and the six-month period ended June 30, 1997, respectively.
The unaudited pro forma condensed consolidated statement of
operations is not necessarily indicative of what the actual results
of operations of the Company would have been assuming the
transactions had been completed as set forth above nor does it
purport to represent the Company's results of operations for future
periods.
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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1997
(Dollars in thousands, except per share data)
(UNAUDITED)
<TABLE>
Acquired
Properties and
Company Common Stock Company
Historical(A) Offering(B) Pro Forma
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<S> <C> <C> <C>
REVENUES
Minimum Rents $ 26,448 $ 3,222 $ 29,670
Percentage and
Overage Rents 1,992 64 2,056
Recoveries from
Tenants 8,053 1,444 9,497
Interest and
Other Income 499 (104)(C) 395
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36,992 4,626 41,618
EXPENSES
Operating Expenses
Before Depreciation
and Interest 12,044 1,718 13,762
Interest 3,166 1,659(D) 4,825
Depreciation and
Amortization 6,091 660(E) 6,751
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Net Operating
Income 15,691 589 16,280
Minority Interests in
Income of Consolidated
Partnerships (146) -- (146)
Gain of Sale of
Real Estate 339 -- 339
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Income Before
Minority Interests of
PDC Unitholders 15,884 589 16,473
Minority Interests of
PDC Unitholders (2,702) (148) (2,850)
Net Income $ 13,182 $ 441 $ 13,623
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Net Income Per Share
of Common Stock $ .76 $ .77
Weighted Average
Number of Common
Shares Outstanding 17,350,579 17,585,551
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(A) Reflects the Company's historical consolidated statement of
operations for the period January 1, 1997 to June 30, 1997.
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(B) Reflects revenues and certain expenses of the properties
acquired on June 1, 1997 and June 30, 1997 for the five
months ended May 31, 1997 and the six months ended June 30,
1997, respectively, and the common stock offering on January
28, 1997, as if consummated on January 1, 1997.
(C) Reflects a reduction in outside management fees for the
Company received for management services of Silver Lake Mall
prior to the acquisition.
(D) Reflects interest expense on borrowings outstanding under the
revolving credit facilities, drawn for purposes of the
acquisition of the properties, at a rate equal to the average
interest rate incurred under the credit facilities, and
interest on assumed debt at 8.5% fixed rate. A change in the
interest rate of 1/8% on the credit facility used to finance
the acquisition of the properties would result in $58
interest expense increase or decrease.
Interest expense is reduced for the period January 1, 1997
through February 11, 1997 by $289, reflecting the $38,600 in
net proceeds from the January 28, 1997 common stock offering.
The proceeds were used to retire borrowings outstanding on
the Company's $50,000 credit facility.
(E) Reflects depreciation on $52,831 of the purchase price
allocated to buildings over a 40-year useful life.
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The following unaudited statement is a pro forma estimate of
taxable income and funds available from operations of the Company
for the twelve month period ended June 30, 1997. The pro forma
statement is based on the Company's historical operating results
for the twelve-month period ended June 30, 1997 adjusted for the
effects of the Company's acquisition of the properties purchased on
June 1, 1997 and June 30, 1997 and the public offering of Common
Stock on January 28, 1997. This statement does not purport to
forecast actual operating results for any period in the future and
should be read in conjunction with the financial statements of the
Company.
<TABLE>
ESTIMATE OF TAXABLE NET OPERATING INCOME:
<S> <C>
Company historical net income before minority
interest, exclusive of depreciation and
amortization (Note 1). . . . . . . . . . . . . . . $ 42,830
Properties acquired on June 1, 1997 and June 30,
1997 - historical earnings from operations
before minority interest, as adjusted, exclusive
of depreciation and amortization (Note 2) . . . . . 3,552
Estimated tax depreciation and amortization for
the twelve month period ended June 30, 1997 (Note 3):
Tax depreciation and amortization . . . . . . . . . (13,272)
Pro forma tax depreciation for properties
acquired during 1997. . . . . . . . . . . . . . . . (1,321)
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Pro forma taxable income before allocation to
minority interest and dividends deduction . . . . . 31,789
Estimated allocation to minority interest (Note 4). . (5,499)
Estimated dividends deduction (Note 5). . . . . . . . (30,335)
$ (4,045)
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Pro forma taxable net operating income $ --
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ESTIMATE OF OPERATING FUNDS AVAILABLE:
Pro forma taxable income before allocation to
minority interest and dividends deduction $ 31,789
Add pro forma depreciation 14,593
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Estimated pro forma operating funds
available (Note 6) $ 46,382
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Note 1 - The historical earnings from operations represent the
Company's earnings from operations before minority
interest for the twelve months ended June 30, 1997 as
reflected in the Company's historical financial
statements.
Note 2 - The historical earnings from operations for the properties
acquired on June 1, 1997 and June 30, 1997 (the
"Properties") represent the revenues and certain expenses
for the twelve month period ended June 30, 1997.
Note 3 - Tax depreciation for the Company is based upon the
Company's tax basis in the Properties. The costs are
generally depreciated on a straight-line method over a
39-year life.
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Note 4 - Estimated allocation of taxable income to minority
interests is based on a 17.30 percent minority interest in
the operating partnership.
Note 5 - Estimated dividends deduction is based on 17,585,551 pro
forma shares outstanding at the dividend rate of $1.725
per share.
Note 6 - 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.
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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.
JP REALTY, INC.
Date September 11, 1997
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John Price
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
