SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): DECEMBER 30, 1997
----------------
JP REALTY, INC.
- --------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
MARYLAND 1-12560 87-0515088
- --------------------------- ----------- --------------
(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>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
This From 8-K/A Amendment No. 1, is being filed for the purpose of filing
the financial statements and pro forma financial information required by Item 7
with respect to the Current Report on Form 8-K dated December 30, 1997 filed by
the registrant on January 13, 1998 regarding the acquisition of a real estate
property known as Salem Center.
(a) FINANCIAL STATEMENTS OF PROPERTY ACQUIRED:
SALEM CENTER
Report of Independent Accountants F-1
Statement of Revenues and Certain Expenses for
the Year Ended December 31, 1996 F-2
Statements of Revenues and Certain Expenses for
the Nine Month Period Ended September 30, 1997
and 1996 (unaudited) F-3
Notes to Financial Statements F-4
(b) PROFORMA FINANCIAL INFORMATION (UNAUDITED):
JP REALTY, INC.
Condensed Consolidated Balance Sheet as of September 30, 1997 F-5
Condensed Consolidated Statements of Operations for
the Nine Month Period ended September 30, 1997
and the Year Ended December 31, 1996 F-7
Estimated Twelve Month Pro Forma Statement of Net
Operating Income and Operating Funds Available F-12
(c) EXHIBIT:
(23.1) Consent of Independent Accountants F-15
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
JP Realty, Inc. and the Partners of
Price Development Company, Limited Partnership
We have audited the accompanying statement of revenues and certain
expenses of Salem Center for the year ended December 31, 1996. This historical
statement is the responsibility of management. Our responsibility is to
express an opinion on this historical statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the historical statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the historical statement. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the historical statement. We believe that our audit provides a reasonable
basis for our opinion.
The accompanying historical statement was prepared on the basis described
in Note 2, for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission (for inclusion in the current report on Form
8-K of JP Realty, Inc. and Price Development Company, Limited Partnership) and
is not intended to be a complete presentation of the revenues and expenses of
Salem Center.
In our opinion, the historical statement referred to above presents
fairly, in all material respects, the revenues and certain expenses of Salem
Center, on the basis described in Note 2, for the year ended December 31, 1996,
in conformity with generally accepted accounting principles.
PRICE WATERHOUSE LLP
Salt Lake City, Utah
January 22, 1998
<PAGE>
JP REALTY, INC.
SALEM CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1996
------------------
<S> <C>
Revenues
Minimum Rents $ 3,057,431
Percentage and Overage Rents 235,516
Recoveries from Tenants 1,441,375
4,734,322
Certain Expenses
Operating and Maintenance 1,546,425
Real Estate Taxes 400,175
1,946,600
Revenues in Excess of Certain Expenses $ 2,787,722
</TABLE>
See accompanying notes to Statements of Revenues and Certain Expenses
<PAGE>
JP REALTY, INC.
SALEM CENTER
STATEMENTS OF REVENUES AND CERTAIN EXPENSES
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
FOR THE NINE FOR THE NINE
MONTH PERIOD MONTH PERIOD
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996
------------- -------------
<S> <C> <C>
Revenues
Minimum Rents $ 2,415,504 $ 2,239,989
Percentage and Overage Rents 127,883 162,966
Recoveries from Tenants 1,124,443 1,057,042
3,667,830 3,459,997
Certain Expenses
Operating and Maintenance 1,184,946 1,125,270
Real Estate Taxes 302,562 297,700
1,487,508 1,422,970
------------ -----------
Revenues in Excess of Certain Expenses $ 2,180,322 $ 2,037,027
============ ===========
</TABLE>
See accompanying notes to Statements of Revenues and Certain Expenses
<PAGE>
JP REALTY, INC.
SALEM CENTER
NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES
1. OPERATION OF PROPERTY
The accompanying statements of revenues and certain expenses relate to the
operations of Salem Center (the "Property") located in Salem, Oregon. The
Property was opened in 1980. On December 30, 1997, JP Realty, Inc. (the
"Company") through its subsidiary Price Development Company, Limited
Partnership, (the "Operating Partnership") acquired the Property for
$32,500,000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying statements of revenues and certain expenses have been
prepared on the accrual basis of accounting.
The accompanying statements are not representative of the actual
operations for the period presented, as certain revenues and expenses, which
may not be comparable to the revenues and expenses to be earned or incurred by
the Company in the future operations of the Property, have been excluded.
Revenues excluded consist of interest and other revenues unrelated to the
continuing operations of the Property. Expenses excluded consist of interest,
depreciation of building and improvements, amortization of deferred costs, and
other general and administrative costs not directly related to the future
operations of the Property.
USE OF ESTIMATES
The preparation of these statements in conformity with generally accepted
accounting principles required management to make estimates and assumptions
that affect the reported amounts of revenue and certain expenses during the
reporting period. Actual results could differ from these estimates.
INCOME RECOGNITION
Minimum rents are recognized using the straight-line basis. Percentage
rent revenues are considered earned when tenant's sales exceed the minimum
annual sales volume required for percentage rent under terms of the lease
agreement.
UNAUDITED FINANCIAL INFORMATION
The interim financial data for the nine month period ended September 30,
1997 and 1996 is unaudited; however, in the opinion of the Company, the interim
data includes all adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of the results for the interim periods. The
results for the periods presented are not necessarily indicative of the results
for the full year.
<PAGE>
JP REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
(UNAUDITED)
The following unaudited pro forma condensed consolidated balance sheet is
presented as if the acquisition of the Property acquired on December 30, 1997
had occurred as of September 30, 1997. This pro forma condensed consolidated
balance sheet should be read in conjunction with the pro forma condensed
consolidated statements of operations of the Company presented herein and the
historical financial statements and notes thereto of the Company included in
the JP Realty, Inc. Forms 10-K and 10-Q for the year ended December 31, 1996
and the nine month period ended September 30, 1997, respectively.
The unaudited pro forma condensed consolidated balance sheet does not
purport to represent what the actual financial position of the Company would
have been at September 30, 1997, nor does it purport to represent the future
financial position of the Company.
<PAGE>
JP REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997 (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
Company Pro Forma Company
HISTORICAL ADJUSTMENTS(A) PRO FORMA
---------- ------------- ---------
<S> <C> <C> <C>
ASSETS
Net Real Estate Assets $ 467,838 $ 32,500 $ 500,338
Other Assets 19,910 -- 19,910
-------- ----------- ---------
$ 487,748 $ 32,500 $ 520,248
========= =========== =========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Borrowings $ 216,456 $ 32,500 $ 248,956
Other Liabilities 27,841 - 27,841
244,297 32,500 276,797
Minority Interests 34,951 - 34,951
Shareholders' Equity
Common Stock 2 -- 2
Additional Paid-in Capital 232,130 -- 232,130
Accumulated Dividends in
Excess of Net Income (23,632) -- (23,632)
208,500 -- 208,500
--------- -------- ---------
$ 487,748 $ 32,500 $ 520,248
========= ======== =========
</TABLE>
(A) Reflects the Property acquired on December 30, 1997 as if the acquisition
had occurred as of September 30, 1997. The acquisition was financed with
$32,000 borrowed from the $200,000 unsecured credit facility and the
assumption of $500 in debt.
<PAGE>
JP REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1997
AND FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
On April 4, 1996, the Operating Partnership acquired the Grand Teton
Mall. 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 to the Company totaled $38,600,000 and were used to purchase
additional interests in the Operating Partnership. The Operating Partnership
used the proceeds to reduce borrowings outstanding under the $50,000,000 credit
facility. On June 1, 1997, the Operating Partnership acquired the remaining
70 percent interest in Silver Lake Mall through the issuance of 72,000
Operating Partnership Units ("OP Units") valued at $1,863,000 and the
assumption of debt totaling $24,755,000. On June 30, 1997, the Operating
Partnership acquired Visalia Mall for $38,000,000, utilizing $37,000,000 in
borrowings under an existing credit facility and $1,000,000 in cash. On
December 30, 1997, the Operating Partnership acquired the Salem Center for
$32,500,000, utilizing borrowings from the Operating Partnership's $200,000,000
unsecured credit facility. The unaudited pro forma condensed statement of
operations for the nine month period ended September 30, 1997 is presented as
if the public offering of common stock, the acquisition of the properties
purchased on June 1, 1997, June 30, 1997 and December 30, 1997 had occurred on
January 1, 1997. The unaudited proforma condensed statement of operations for
the year ended December 31, 1996, is presented as if the public offering of
common stock, the acquisition of the properties purchased on April 4, 1996,
June 1, 1997, June 30, 1997 and December 30, 1997 had occurred on January 1,
1996.
Pro forma information is based upon the historical consolidated results of
operations of the Company for the nine month period ended September 30, 1997
and for the year ended December 31, 1996, giving effect to the transactions
described above. The pro forma condensed consolidated statements of operations
should be read in conjunction with the pro forma condensed consolidated balance
sheet of the Company presented herein and the historical financial statements
and notes thereto of the Company included in the JP Realty, Inc. Forms 10-K and
10-Q for the year ended December 31, 1996 and the nine month period ended
September 30, 1997, respectively.
The unaudited pro forma condensed consolidated statements of operations are 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.
<PAGE>
JP REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1997 (IN THOUSANDS, EXCEPT PER
SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ACQUIRED
PROPERTY AND
COMPANY COMMON STOCK COMPANY
HISTORICAL(A) OFFERING(B) PRO FORMA
------------ ----------- ---------
<S> <C> <C> <C>
REVENUES
Minimum Rents $ 41,761 $ 5,637 $ 47,398
Percentage and Overage Rents 3,087 192 3,279
Recoveries from Tenants 12,911 2,568 15,479
Interest and Other Income 1,006 (104)(C) 902
58,765 8,293 67,058
EXPENSES
Operating Expenses Before
Depreciation and Interest 19,368 3,206 22,574
Interest 5,899 3,183 9,082
Depreciation and Amortization 9,576 1,188 10,764
Net Operating Income 23,922 716 24,638
Minority Interests in
Income of Consolidated
Partnerships (209) -- (209)
Gain on Sale of Real Estate 339 -- 339
Income Before Minority Interests
of OP Unitholders 24,052 716 24,768
Minority Interests of
OP Unitholders (4,110) (175) (4,285)
--------- -------- --------
Net Income $ 19,942 $ 541 $ 20,483
========= ======== ========
Net Income Per Share of
Common Stock $ 1.14 $ 1.17
========= ========
Weighted Average Shares
Outstanding $ 17,430 $ 17,584(D)
========= ========
</TABLE>
<PAGE>
JP REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1997 (DOLLARS IN THOUSANDS)
(UNAUDITED)
(A) Reflects the JP Realty, Inc. historical consolidated statement of
operations for the period January 1, 1997 to September 30, 1997.
(B) Reflects revenues and expenses of the properties acquired on June 1, June
30, and December 30, 1997, respectively, for the nine months ended
September 30, 1997 and the common stock offering on January 28, 1997, as
if consummated on January 1, 1997 as follows:
<TABLE>
<CAPTION>
Silver Lake Visalia Salem Common
MALL MALL CENTER OFFERING TOTAL
------- ------ ------- -------- ------
<S> <C> <C> <C> <C> <C>
Minimum Rents $ 1,058 $ 2,164 $ 2,415 $ -- $ 5,637
Percentage and Overage Rent 37 27 128 -- 192
Recoveries from Tenants 410 1,034 1,124 -- 2,568
Operating Expenses 441 1,277 1,488 -- 3,206
Interest (1) 699 1,193 1,580 (289) 3,183
Depreciation (2) 217 395 576 -- 1,188
</TABLE>
(1)Reflects interest expense on $78,500 outstanding under the revolving
credit facilities, drawn for purpose of the acquisitions of the
properties, at a rate equal to the average interest rate incurred
under the credit facilities, and interest on $12,997 of assumed debt
at 8.5% fixed rate. A change in the interest rate of 1/8% on the
credit facilities used to finance the acquisition of the properties
would result in $74 interest expense increase or decrease for the nine
months ended September 30, 1997.
Interest expense is reduced by using the $38,600 in net proceeds from
the January 28, 1997 common stock offering. The proceeds were used to
retire borrowings outstanding on the Operating Partnership's $50,000
credit facility.
(2)Reflects depreciation on $83,627 of the purchase price allocated to
buildings, over a 40-year useful life.
(C) Adjustment reflects a reduction in outside management fees for the
Operating Partnership received for management services of Silver Lake
Mall prior to the acquisition.
(D) Based upon 17,381,000 shares of Common Stock and 200,000 shares of Price
Group stock outstanding. The number of shares assumed to be outstanding
include the 1,500,000 shares sold in the January 28, 1997 offering.
Earnings per share will be unaffected by partners who elect to exchange
OP Units in the operating partnership on a one-for-one basis for common
stock of the Company, as holders of such Units and stockholders
effectively share equally in the net income of the Operating Partnership.
<PAGE>
JP REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS, EXCEPT PER SHARE
DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ACQUIRED
PROPERTIES AND
COMPANY COMMON STOCK COMPANY
HISTORICAL(A) OFFERING(B) PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
Revenues
Minimum Rents $ 52,447 $ 10,707 $ 63,154
Percentage and Overage Rents 4,061 574 4,635
Recoveries from Tenants 15,557 4,538 20,095
Interest and Other Income 884 (148)(C) 736
72,949 15,671 88,620
Expenses
Operating Expenses Before
Depreciation and Interest 24,405 5,832 30,237
Interest 7,776 4,249 12,025
Depreciation and Amortization 11,979 2,270 14,249
Net Operating Income 28,789 3,320 32,109
Minority Interests in Income
of Consolidated Partnerships (269) -- (269)
Gain on Sale of Real Estate 94 -- 94
Income Before Minority
Interests of OP Unitholders 28,614 3,320 31,934
Minority Interests of
OP Unitholders (5,244) (289) (5,533)
Net Income $ 23,370 $ 3,031 $ 26,401
Net Income Per Share
of Common Stock $ 1.46 $ 1.50
Weighted average shares
outstanding $ 16,048 $ 17,348(D)
</TABLE>
<PAGE>
JP REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996 (DOLLARS IN THOUSANDS)
(UNAUDITED)
(A) Reflects the JP Realty, Inc. historical consolidated statement of
operations for the year ended December 31, 1996.
(B) Reflects revenues and expenses of the properties acquired on June 1, June
30, and December 30, 1997 for the year ended December 31, 1996 and the
revenues and expenses for the purchase of Grand Teton Mall on April 4,
1996 and the common stock offering on January 28, 1997, as if consummated
on January 1, 1996 as follows:
<TABLE>
<CAPTION>
Grand Teton Silver Lake Visalia Salem Common Stock
MALL MALL MALL MALL OFFERING TOTAL
------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Minimum Rents $ 866 $ 2,520 $ 4,264 $ 3,057 $ -- $ 10,707
Percentage and Overage
Rent 46 154 138 236 -- 574
Recoveries from Tenants 239 1,040 1,815 1,444 -- 4,538
Operating Expenses 339 1,240 2,306 1,947 -- 5,832
Interest (1) 550 1,690 2,405 2,113 (2,509) 4,249
Depreciation (2) 179 525 796 770 -- 2,270
</TABLE>
(1)Reflects interest expense on $112,500 outstanding under the revolving
credit facilities, drawn for purposes of the acquisitions, at a rate
equal to the average interest rate incurred under the credit
facilities, and interest on $12,997 of assumed debt at a 8.5% fixed
rate. A change in the interest rate of 1/8% on the credit facilities
used to finance the acquisition of the properties would result in $141
interest expense increase or decrease.
Interest expense is reduced by using the $38,600 in net proceeds from
the January 28, 1997 common stock offering. The proceeds were used to
retire borrowings outstanding on the Operating Partnership's $50,000
credit facility.
(2)Reflects depreciation on $112,241 of the purchase price allocated to
buildings, over a 40-year useful life.
(C) Adjustment reflects a reduction in outside management fees for the
Operating Partnership received for management services of Silver Lake Mall
prior to the acquisition.
(D) Based upon 17,348,000 shares of Common Stock and 200,000 shares of Price
Group stock outstanding. The number of shares assumed to be outstanding
include the 1,500,000 shares sold in the January 28, 1997 offering.
Earnings per share will be unaffected by partners who elect to exchange OP
Units in the operating partnership on a one-for-one basis for common stock
of the Company, as holders of such Units and stockholders effectively
share equally in the net income of the operating partnership.
<PAGE>
JP REALTY INC.
ESTIMATED TWELVE-MONTH PRO FORMA STATEMENT
OF TAXABLE NET OPERATING INCOME AND OPERATING FUNDS AVAILABLE (DOLLARS IN
THOUSANDS)
(Unaudited)
The following unaudited statement is a pro forma estimate of taxable income and
funds available from operations of the Company for the year ended December 31,
1996. The pro forma statement is based on the Company's historical operating
results for the twelve-month period ended December 31, 1996 adjusted for the
effects of the Company's acquisition of the Properties purchased on June 1,
June 30, and December 30, 1997. This statement does not purport to forecast
actual operating results for any period in the future.
This statement should be read in conjunction with (i) the financial statements
of the Company and (ii) the pro forma condensed financial statements of the
Company.
ESTIMATE OF TAXABLE NET OPERATING INCOME:
Company historical net income before minority interest, exclusive of
depreciation and amortization (Note 1).....................$ 40,593
Properties acquired on June 1, June 30, and December 30, 1997 - historical
earnings from operations before minority interest, as adjusted, exclusive of
depreciation and amortization (Note 2) 5,590
Estimated 1996 tax depreciation and amortization (Note 3):
1996 tax depreciation and amortization (13,337)
Pro forma tax depreciation for Properties acquired during 1997 (2,270)
Pro forma taxable income before allocation to minority
interest and dividends deduction 30,576
Estimated allocation to minority interest (Note 4) (5,290)
Estimated dividends deduction (Note 5)...................... (29,734)
Pro forma net operating loss................................$ (4,445)
Pro forma taxable net operating income......................$ --
ESTIMATE OF OPERATING FUNDS AVAILABLE:
Pro forma taxable income before allocation to minority
interest and dividends deduction..........................$ 30,576
Add pro forma depreciation.................................. 15,607
Estimated pro forma operating funds available (Note 6)......$ 46,183
<PAGE>
JP REALTY INC.
ESTIMATED TWELVE-MONTH PRO FORMA STATEMENT
OF TAXABLE NET OPERATING INCOME AND OPERATING FUNDS AVAILABLE
(Unaudited)
Note 1 -The historical earnings from operations represent the Company's
earnings from operations before minority interest for the twelve months
ended December 31, 1996 as reflected in the Company's historical
financial statement.
Note 2 -The historical earnings from operations for the Properties acquired on
June 1, June 30, and December 30, 1997 represent the revenues and
certain expenses as referred to in the pro forma condensed consolidated
statement of operations for the year ended December 31, 1996 included
elsewhere herein.
Note 3 -Tax depreciation for the Company is based upon the Company's tax basis
in the Property. The costs are generally depreciated on a straight-
line method over a 40-year life.
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 17,348,000 pro forma
common shares outstanding at the dividend rate of $1.70 per share,
and 200,000 shares of Price Group Stock outstanding at a dividend
rate of $1.36 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.
<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.
JP REALTY, INC.
Date: FEBRUARY 3, 1998 /s/ M. Scott Collins
-----------------------
M. Scott Collins
VICE-PRESIDENT AND
CHIEF FINANCIAL OFFICER
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 33-93752, No.
333-3624, No. 333-34835 and No. 333-34835-01) and in the Prospectus
constituting part of the Registration Statement on Form S-8 (No. 333-3550) of
JP Realty, Inc. of our report dated January 22, 1998 relating to the statement
of revenues and certain expenses of Salem Center for the year ended December
31, 1996, which appears in the Current Report on Form 8-K/A Amendment No. 1 of
JP Realty, Inc. dated December 30, 1997.
PRICE WATERHOUSE LLP
Salt Lake City, Utah
February 3, 1998
