SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
OR
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 1-12560
JP REALTY, INC.
---------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S>
<C> <C>
MARYLAND 87-0515088
-------- ----------
(State of incorporation) (I.R.S. Employer Identification No.)
35 CENTURY PARK-WAY
SALT LAKE CITY, UTAH 84115 (801) 486-3911
--------------------------- -------------
(Address of principal executive offices, (Registrant's telephone number, including area code)
including zip code)
</TABLE>
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No
[X]
17,350,847 Shares of Common Stock were outstanding as of November 11, 1999
<PAGE>
JP REALTY, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION PAGE
- ------------------------------ ----
<S> <C> <C>
Item 1. Financial Statements 3
- --------------------------------
Condensed Consolidated Balance Sheet as of September 30, 1999
and December 31, 1998 4
Condensed Consolidated Statement of Operations for the Three Months
and Nine Months ended September 30, 1999 and 1998 5
Condensed Consolidated Statement of Cash Flows for the
Nine Months ended September 30, 1999 and 1998 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
PART II: OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings 17
Item 2. Changes in Securities and Use of Proceeds 17
Item 3. Defaults Upon Senior Securities 17
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 5. Other Information 17
Item 6. Exhibits and Reports on Form 8-K 17
</TABLE>
<PAGE> 2
Certain matters discussed under the captions "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Quantitative and
Qualitative Disclosures About Market Risk" and elsewhere in this Quarterly
Report on Form 10-Q may constitute forward-looking statements for purposes of
Section 21E of the Securities Exchange Act of 1934, as amended, and as such may
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance and achievements of JP Realty, Inc. (the
"Company") to be materially different from future results, performance or
achievements expressed or implied by such forward-looking statements.
PART I
ITEM 1. FINANCIAL STATEMENTS
--------------------
The information furnished in the accompanying financial statements listed
in the index on page 2 of this Quarterly Report on Form 10-Q reflects only
normal recurring adjustments which are, in the opinion of management, necessary
for a fair presentation of the aforementioned financial statements for the
interim periods.
The aforementioned financial statements should be read in conjunction with
the notes to the financial statements and Management's Discussion and Analysis
of Financial Condition and Results of Operations and the Company's Quarterly
Reports on Form 10-Q for the three months ended March 31, 1999 and the six
months ended June 30, 1999 and Annual Report on Form 10-K for the year ended
December 31, 1998, including the financial statements and notes thereto.
<PAGE> 3
JP REALTY, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
---------
SEPTEMBER 30, DECEMBER 31,
1999 1998
--------------- ---------------
<S> <C> <C>
ASSETS
Real Estate Assets, Including Assets Under Development
of $34,405 and $28,073 $ 858,336 $ 815,756
Less: Accumulated Depreciation (129,452) (114,136)
--------------- ---------------
Net Real Estate Assets 728,884 701,620
Cash 3,717 5,123
Restricted Cash 4,012 3,605
Other Assets 21,443 22,807
--------------- ---------------
$ 758,056 $ 733,155
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Borrowings $ 393,443 $ 472,990
Accounts Payable and Accrued Expenses 17,804 20,411
Distributions Payable 9,895 --
Other Liabilities 815 798
--------------- ---------------
421,957 494,199
--------------- ---------------
Minority Interest 137,723 34,010
--------------- ---------------
Commitments and Contingencies
Shareholders' Equity
8.75% Series A Cumulative Redeemable Preferred Stock,
$.0001 par value, liquidation preference $25.00 per share,
510,000 shares authorized, none issued or outstanding -- --
8.95% Series B Cumulative Redeemable Preferred Stock,
$.0001 par value, liquidation preference $25.00 per share,
3,800,000 shares authorized, none issued or outstanding -- --
Series A Junior Participating Preferred Stock, $.0001 per share
3,060,000 shares authorized, none issued or outstanding -- --
Common Stock, $.0001 par value, 117,430,000 shares
authorized, 17,440,747 shares and 17,440,547 shares
issued and outstanding at September 30, 1999 and
December 31, 1998, respectively 2 2
Price Group Stock, $.0001 par value, 200,000 shares
authorized, issued and outstanding -- --
Excess Stock, 75,000,000 shares authorized,
none issued or outstanding -- --
Additional Paid-in Capital 233,074 233,061
Accumulated Distributions in Excess of Net Income (34,700) (28,117)
--------------- ---------------
198,376 204,946
--------------- ---------------
- --------- ---------------
198,376 204,946
--------------- ---------------
$ 758,056 $ 733,155
=============== ===============
</TABLE>
<PAGE> 4
JP REALTY, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
1999 1998 1999 1998
----------- ------------ ------------- -------------
Revenues
Minimum Rents $ 23,316 $ 19,976 $ 71,486 $ 56,053
Percentage and Overage Rents 1,088 1,180 3,226 3,489
Recoveries from Tenants 7,785 6,523 21,712 16,656
Interest 147 103 431 297
Other 62 176 271 373
----------- ------------ ------------- -------------
32,398 27,958 97,126 76,868
----------- ------------ ------------- -------------
Expenses
Operating and Maintenance 5,881 4,863 16,660 12,701
Real Estate Taxes and Insurance 3,398 2,994 10,236 8,291
General and Administrative 1,535 1,501 5,067 4,501
Depreciation 5,674 4,639 17,116 12,203
Amortization of Deferred Financing Costs 400 402 1,238 1,146
Amortization of Deferred Leasing Costs 137 162 482 504
Interest 6,324 5,563 21,023 13,359
----------- ------------ ------------- -------------
23,349 20,124 71,822 52,705
----------- ------------ ------------- -------------
9,049 7,834 25,304 24,163
Minority Interest in Loss (Income)
of Consolidated Partnerships 243 (68) (613) (205)
Gain on Sale of Real Estate -- 234 -- 234
----------- ------------ ------------- -------------
Income Before Minority Interest of the
Operating Partnership Unitholders and
Extraordinary Item 9,292 8,000 24,691 24,192
Minority Interest of the Operating
Partnership Unitholders (3,099) (1,376) (5,920) (4,164)
----------- ------------ ------------- -------------
Net Income Before Extraordinary Item 6,193 6,624 18,771 20,028
Extraordinary Item - Loss on
Extinguishment of Debt,
Net of Minority Interest of the
Operating Partnership Unitholders (801) -- (801) --
----------- ------------ ------------- -------------
Net Income $ 5,392 $ 6,624 $ 17,970 $ 20,028
=========== ============ ============= =============
Basic Earnings Per Share
Income Before Extraordinary Item $ 0.35 $ 0.38 $ 1.06 $ 1.14
Extraordinary Item (0.04) -- (0.04) --
----------- ------------ ------------- -------------
Net Income $ 0.31 $ 0.38 $ 1.02 $ 1.14
=========== ============ ============= =============
Diluted Earnings Per Share
Income Before Extraordinary Item $ 0.35 $ 0.37 $ 1.06 $ 1.13
Extraordinary Item (0.04) -- (0.04) --
----------- ------------ ------------- -------------
Net Income $ 0.31 $ 0.37 $ 1.02 $ 1.13
=========== ============ ============= =============
Basic Weighted Average Number
of Common Shares 17,641 17,619 17,641 17,617
Add: Dilutive Effect of Stock Options 41 89 45 120
----------- ------------ ------------- -------------
Diluted Weighted Average Number of Common Shares 17,682 17,708 17,686 17,737
=========== ============ ============= =============
</TABLE>
<PAGE> 5
JP REALTY, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
-----------------------------------
<S> <C> <C>
1999 1998
--------------- --------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 40,484 $ 40,427
--------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Real Estate Assets, Developed or Acquired,
Net of Accounts Payable (44,015) (184,075)
Proceeds from Sales of Real Estate Assets -- 276
Increase in Restricted Cash (407) (1,394)
--------------- --------------
Net Cash Used in Investing Activities (44,422) (185,193)
--------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Borrowings 74,516 260,977
Repayment of Borrowings (154,063) (99,432)
Proceeds from Stock Options Exercised -- 546
Proceeds from Issuance of Preferred Units 104,571 --
Distributions to Preferred Unitholders (2,025) --
Distributions to Minority Interest (3,470) (3,549)
Distributions to Shareholders (16,368) (15,820)
Deferred Financing Costs (629) (2,190)
--------------- --------------
Net Cash Provided by Financing Activities 2,532 140,532
--------------- --------------
Net Decrease in Cash (1,406) (4,234)
Cash, Beginning of Period 5,123 5,603
--------------- --------------
Cash, End of Period $ 3,717 $ 1,369
=============== ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 6
JP REALTY, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1. BUSINESS SUMMARY AND SIGNIFICANT ACCOUNTING POLICIES
JP Realty, Inc. (the "Company") is primarily engaged in the business of
owning, leasing, managing, operating, developing and redeveloping malls,
community centers and other commercial properties. The tenant base includes
primarily national, regional and local retail companies. Consequently, the
Company's credit risk is concentrated in the retail industry. The Company's
properties are owned and controlled by the Company through its 69% general
partnership interest, as of September 30, 1999, in Price Development Company,
Limited Partnership (the "Operating Partnership").
The interim financial data for the three and nine months ended September
30, 1999 and 1998, is unaudited; however, in the opinion of the Company's
management, the interim financial data includes all adjustments, consisting
only of normal recurring adjustments, necessary for a fair statement of the
results for the interim periods.
On April 1, 1998, the Company stopped accruing revenues for percentage
and overage rents based upon the adoption of Emerging Issues Task Force Issue
98-9. On January 1, 1999, the Company started accruing these revenues again on
a straight-line basis and will continue to do so as allowed by the Emerging
Issues Task Force in late 1998. Certain amounts in the 1998 financial
statements have been restated to conform with the 1999 presentation.
2. BORROWINGS
<TABLE>
<CAPTION>
SEPTEMBER 30,
1999
---------------
<S> <C>
Notes, unsecured; interest at 7.29%, maturing 2005 to 2008 $ 100,000
Mortgage payable, secured by real estate; interest at 6.68%,
due in 2008 83,667
Notes, secured by real estate; interest at 6.37%, due in 2001 61,223
Credit facility, unsecured; weighted average interest at 6.02%
during 1999, due in 2000 49,100
Construction loan, secured by real estate; interest at 6.94%
as of September 30, 1999, due in 2001 41,600
Construction loan, secured by real estate; interest at 6.94%
as of September 30, 1999, due in 2001 40,466
Mortgage payable, secured by real estate; interest at 8.5%,
due in 2000 12,254
Other notes payable, secured by real estate; interest ranging
from 7.0% to 9.99%, maturing 2000 to 2095 5,133
---------------
$ 393,443
===============
</TABLE>
On October 16, 1997, the Operating Partnership obtained a $150,000 three year
unsecured credit facility (the "Credit Facility") from a group of banks. On
December 18, 1997, the amount was increased 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 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 is used for
general corporate purposes including development, working capital, equity
investments, 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 September 30, 1999, the Operating Partnership was
in compliance with all of these covenants.
<PAGE> 7
2.BORROWINGS (CONTINUED)
The 100,000 notes have an interest rate of 7.29% payable semi annually on
March 11th and September 11th of each year. The Operating Partnership had
entered into an interest rate protection agreement in anticipation of issuing
these notes and received $270 as a result of terminating this agreement making
the effective rate of interest on these notes 7.24%.
For the nine months ended September 30, 1999, draws totaling $12,916 were
made on the construction loan facility collateralized by Provo Towne Centre for
development activities at the mall.
On July 30, 1999, the Company borrowed $5,905 from the Credit Facility to
reduce the principal outstanding on the Spokane Valley Mall construction loan.
The Company exercised the option to extend the construction loan to August
2001. The fee to extend the construction loan was $154.
On July 21, 1999, the Operating Partnership borrowed $33,777 from its Credit
Facility to reduce the notes secured by real estate from $95,000 to $61,223.
This transaction unencumbered four regional mall properties. Deferred
financing costs related to the reduction of the notes were written-off and
direct expenses, including a prepayment penalty, make up the extraordinary loss
of $801, net of minority interests of $184. Proceeds from the sale of
cumulative redeemable preferred units of the Operating Partnership were used to
pay down the amount outstanding on the line of credit by $104,511.
3. PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma summary financial information for the nine
months ended September 30, 1999 and 1998, is presented as if the acquisition of
NorthTown Mall (which occurred on August 6, 1998) and the issuance of Series A
and Series B preferred units (Note 4) had been consummated as of January 1,
1998.
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
---------------------------------------
1999 1998
--------------- --------------
<S> <C> <C>
Total Revenues $ 97,126 $ 85,183
Net Income $ 16,565 $ 16,354
Basic Earnings Per Share $ 0.94 $ 0.93
Diluted Earnings Per Share $ 0.94 $ 0.92
</TABLE>
The pro forma 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 acquisition of NorthTown Mall and issuance
of Series A and Series B preferred units been completed as of the beginning of
the periods presented, nor does it purport to represent the results of
operations for future periods.
4. MINORITY INTEREST
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
-------------- --------------
<S> <C> <C>
Preferred Unitholders $ 104,571 $
--
Common Unitholders 30,846 32,267
Consolidated Partnerships 2,306 1,743
-------------- -------------
$ 137,723 $ 34,010
============== =============
</TABLE>
<PAGE> 8
4. MINORITY INTEREST (CONTINUED)
In April 1999, the Operating Partnership issued 510,000 Series A 8.75%
cumulative redeemable preferred units (the "Series A Preferred Units") with a
liquidation value of twenty-five dollars per unit, in exchange for a gross
contribution of $12,750. The Operating Partnership used the proceeds, less
applicable transaction costs and expenses of $405, for the repayment of
borrowings outstanding under the Credit Facility. The Series A Preferred
Units, which may be redeemed by the Operating Partnership on or after April 23,
2004, have no stated maturity or mandatory redemption and are not convertible
into any other securities of the Operating Partnership. The Series A Preferred
Units are exchangeable at option of the preferred unitholder at a rate of one
Series A Preferred Unit for one share of the Company's Series A 8.75%
cumulative redeemable preferred stock beginning April 23, 2009 or earlier under
certain circumstances.
In July 1999, the Operating Partnership issued 3.8 million Series B 8.95%
cumulative redeemable preferred units (the "Series B Preferred Units") with a
liquidation value of twenty-five dollars per unit, in exchange for a gross
contribution of $95,000. The Company used the proceeds, less applicable
transaction costs and expenses of $2,774, to repay $90,000 in borrowings under
the Credit Facility and increase operating cash. The Series B Preferred Units,
which may be redeemed by the Operating Partnership on or after July 28, 2004,
have no stated maturity or mandatory redemption and are not convertible into
any other securities of the Operating Partnership. The Series B Preferred
Units are exchangeable at the option of the preferred unitholder at a rate of
one Series B Preferred Unit for one share of the Company's Series B 8.95%
cumulative redeemable preferred stock beginning July 28, 2009 or earlier under
certain circumstances.
The Operating Partnership makes quarterly distributions to the holders of the
Series A and Series B Preferred Units on the last day of each March, June,
September and December. For the nine months ended September 30, 1999 aggregate
distributions on the Series A and Series B Preferred Units were $490 and
$1,535, respectively.
5. SHAREHOLDERS' EQUITY
The following table summarizes changes in shareholders' equity since
December 31, 1998:
<TABLE>
<CAPTION>
ACCUMULATED
ADDITIONAL DISTRIBUTIONS
COMMON PAID-IN IN EXCESS OF
SHARES* STOCK CAPITAL NET INCOME TOTAL
---------- ------------ ------------ --------------- -----------
<S> <C> <C> <C> <C> <C>
Shareholders' Equity at December 31, 1998 17,640,547 $ 2 $ 233,061 $ (28,117) $ 204,946
Stock Option Compensation -- -- 11 -- 11
Issued Shares Common Stock -
Operating Partnership Units 200 -- 2 -- 2
Converted
Net Income for the Period -- -- -- 17,970 17,970
Distributions Paid -- -- -- (16,368) (16,368)
Distributions Accrued -- -- -- (8,185) (8,185)
----------- ------------ ------------ -------------- -----------
Shareholders' Equity at September 30, 1999 17,640,747 $ 2 $ 233,074 $ (34,700) $ 198,376
=========== ============ ============ ============== ===========
</TABLE>
--------------------------------
* Includes 200,000 outstanding shares of Price Group Stock
6. SHAREHOLDERS' RIGHTS PLAN
In August 1999, the Company adopted a shareholders' rights plan declaring
a dividend of one right for each share of the Company's Common Stock
outstanding on or after August 18, 1999. Pursuant to the plan, each right will
entitle holders of the Company's Common Stock to buy one unit (a "Unit") of
Series A Junior participating preferred stock (the "Junior Preferred Stock") at
an exercise price of seventy dollars. Each Unit will have substantially the
same economic and voting rights as one share
<PAGE> 9
6. SHAREHOLDERS' RIGHTS PLAN (CONTINUED)
of Common Stock. The rights will be exercisable, and will detach from the
Common Stock only (A) if a person or group (i) acquires 15% or more of the
outstanding shares of the Company's Common Stock; (ii) announces a tender or
exchange offer that, if consummated, would result in a person or group
beneficially owning 15% or more of the outstanding shares of the Company's
Common Stock; (iii) is declared by the Board of Directors to be an Adverse
Person (as defined in the plan) if such person or group beneficially owns 10%
or more of the outstanding shares of the Company's Common Stock; or, (iv)
acquires beneficial ownership of 40% or more of the outstanding shares of the
Company's Common Stock; or, (B) upon the occurrence of certain events involving
a consolidation, merger or sale or transfer of assets or earning power of the
Company. Upon the occurrence of certain triggering events, each right will
entitle the holder (other than the acquiring person or group) to purchase Units
(or, in certain circumstances, common stock of the acquiring person or group)
to purchase Units (or, in certain circumstances, common stock of the acquiring
person) with a value of twice the exercise price of the rights upon payment of
the exercise price. In connection with the rights plan 3,060,000 shares of
Junior Preferred Stock were reserved for issuance. The new rights are
redeemable by the Company under certain circumstances at $.0001 per right and
will expire, unless earlier redeemed, on August 11, 2009.
7. SEGMENT INFORMATION
In 1998, the Company adopted SFAS No. 131. The prior years' information
has been restated to present the Company's three reportable segments:
(1)regional malls, (2)community centers, and (3)commercial properties in
conformity with SFAS No. 131.
The accounting policies of the segments are the same as those described
in the "Summary of Significant Accounting Policies." Segment data includes
total revenues and property, net operating income (revenues less operating and
maintenance expense and real estate taxes and insurance expense ("Property
NOI")). The Company evaluates the performance of its segments and allocates
resources to them based on Property NOI.
At September 30, 1999, the regional mall segment consisted of 17 regional
malls in seven states containing approximately 9,810,000 square feet of total
gross leasable area ("GLA") and which range in size from approximately 296,000
to 1,171,000 square feet of total GLA.
The community center segment consists of 25 properties in seven states
containing over 3,185,000 square feet of total GLA and two freestanding retail
properties containing approximately 5,000 square feet of GLA.
The commercial properties include six mixed-use commercial/business
properties with 38 commercial buildings containing approximately 1,354,000
square feet of GLA which are located primarily in the Salt Lake City, Utah area
where the Company's headquarters is located.
The table below presents information about the Company's reportable
segments for the nine months ending September 30:
<TABLE>
<CAPTION>
REGIONAL COMMUNITY COMMERCIAL
MALLS CENTERS PROPERTIES OTHER TOTAL
---------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
1999
- ----
Total Revenues $ 75,406 $ 15,391 $ 5,540 $ 789 $ 97,126
Property Operating Expenses (1) (22,444) (3,154) (1,298) -- (26,896)
---------- ---------- ------------ ---------- ------------
Property NOI (2) 52,962 12,237 4,242 789 70,230
Unallocated Expenses (3) -- -- -- (44,926) (44,926)
Unallocated Minority Interest (4) -- -- -- (6,533) (6,533)
Unallocated Other (5) -- -- -- (801) (801)
Consolidated Net Income -- -- -- -- 17,970
Additions to Real Estate Assets 38,009 5,333 906 97 44,345
Total Assets (6) 627,669 84,073 30,968 15,346 758,056
</TABLE>
<PAGE> 10
7. SEGMENT INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
REGIONAL COMMUNITY COMMERCIAL
MALLS CENTERS PROPERTIES OTHER TOTAL
---------- ---------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
1998
- ----
Total Revenues $ 57,057 $ 13,347 $ 5,700 $ 764 $ 76,868
Property Operating Expenses (1) (16,749) (3,031) (1,212) -- (20,992)
---------- --------- ------------ --------- -----------
Property NOI (2) 40,308 10,316 4,488 764 55,876
Unallocated Expenses (3) -- -- -- (31,713) (31,713)
Unallocated Minority Interest (4) -- -- -- (4,369) (4,369)
Unallocated Other (5) -- -- -- 234 234
Consolidated Net Income -- -- -- -- 20,028
Additions (Deletions) to Real Estate 177,517 (2,545) 425 5,037 180,434
Assets
Total Assets (6) 594,483 76,461 31,219 12,919 715,082
</TABLE>
- -----------------------
(1) Property operating expenses consist of operating, maintenance, real
estate taxes and insurance as listed in the condensed consolidated
statement of operations.
(2) Total revenues minus property operating expenses.
(3) Unallocated expenses consist of general and administrative,
depreciation, amortization of deferred financing costs, amortization of
deferred leasing costs and interest as listed in the condensed
consolidated statement of operations.
(4) Unallocated minority interest includes minority interest in income of
consolidated partnerships and minority interest of the Operating
Partnership Unitholders as listed in the condensed consolidated
statement of operations.
(5) Unallocated other includes gain on sales of real estate and loss on
extinguishment of debt as listed in the consolidated statement of
operations.
(6) Unallocated other total assets include cash, corporate offices,
miscellaneous real estate and deferred financing costs.
8. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Price James, a consolidated partnership of the Operating Partnership,
received a building appraised at $2,000 in exchange for accounts receivable of
$43 and $1,957 for termination of a long-term ground lease, which amount was
recorded in minimum rents.
Holders of the Operating Partnership's common units of limited partner
interest elected to convert 200 and 285 common units having a recorded value of
$2 and $3, respectively, into an equal number of shares of Common Stock during
the nine months ended September 30, 1999 and 1998, respectively.
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30,
1999 1998
------------- -------------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
The following non-cash transactions occurred:
Distributions Accrued For Shareholders not Paid $ 8,185 $ 7,911
Distributions Accrued For Unitholders not Paid $ 1,710 $ 1,655
</TABLE>
9. SUBSEQUENT EVENTS
On October 19, 1999, the Board of Directors of the Company authorized a
common share repurchase program under which the Company is authorized to
purchase up to $25,000 million of its currently outstanding common shares from
time-to-time on the open market and in negotiated transactions. The Company as
of September 30, 1999 had approximately 17.6 million common shares outstanding.
On October 20, 1999, the Company held a grand opening of its newly
developed regional mall in Sierra Vista, Arizona. The Mall at Sierra Vista
added approximately 330,000 square feet of additional total GLA to the
Company's existing portfolio.
<PAGE> 11
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The following discussion should be read in conjunction with the
consolidated financial statements of the Company and the notes thereto
appearing elsewhere herein.
The Company is a fully integrated, self administered and self-managed
REIT primarily engaged in the ownership, leasing, management, operation,
development, redevelopment and acquisition of retail properties in Utah, Idaho,
Colorado, Arizona, Nevada, New Mexico and Wyoming (the "Intermountain Region"),
as well as in Oregon, Washington and California. The Company's existing
portfolio consists of 51 properties, including 18 enclosed regional malls, 25
community centers, two freestanding retail properties and six mixed-use
commercial properties.
The Company completed its initial public offering on January 21, 1994,
and conducts all of its business operations through, and held as of September
30, 1999, a 69% controlling general partner interest in, Price Development
Company, Limited Partnership (the "Operating Partnership").
The Company's operations before depreciation were positively impacted by
the August 1998 acquisition of NorthTown Mall as well as its development
activities. The development activities added a combined 1,028,000 square feet
of total gross leasable area ("GLA") to the retail portfolio (15,000 in March
1998, 491,000 in August 1998, and 522,000 in October 1998).
JP Realty, Inc., together with the Operating Partnership and its other
subsidiaries, shall be referred to herein as (the "Company").
CHANGE IN REVENUE RECOGNITION POLICY
On April 1, 1998, the Company stopped accruing revenues for percentage
and overage rents based upon the adoption of Emerging Issues Task Force Issue
98-9. On January 1, 1999, the Company started accruing these revenues again on
a straight-line basis and will continue to do so as allowed by the Emerging
Issues Task Force in late 1998. Certain amounts in the 1998 financial
statements have been restated to conform with the 1999 presentation.
RESULTS OF OPERATIONS
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1999 TO NINE MONTHS ENDED
SEPTEMBER 30, 1998 (DOLLARS IN THOUSANDS)
Total revenues for the nine months ended September 30, 1999 increased
$20,258 or 26% to $97,126 as compared to $76,868 in 1998. This increase is
primarily attributable to a $15,433 or 28% increase in minimum rents to $71,486
as compared to $56,053 in 1998. Additionally, percentage and overage rents
decreased $263 or 8% to $3,226 as compared to $3,489 in 1998. The decrease in
percentage and overage rents is primarily the result of changes in estimates
for the nine months and changes in leases made with tenants.
The August 1998 acquisition of NorthTown Mall, the August 1998 expansion
of Boise Towne Square, the October 1998 opening of Provo Towne Centre, and the
October 1998 addition of Sears to Red Cliffs Mall and Sears Tire and Battery to
Red Cliffs Plaza contributed $10,912 to the minimum rent increase and $308 to
percentage and overage rents. Minimum rents increased $1,957 from a non-cash
transaction in which a consolidated partnership of the Operating Partnership
received a building in exchange for cancellation of a long-term ground lease.
The remaining $2,564 increase in minimum rents was the result of increases
experienced for the balance of the property portfolio.
Revenues recognized from straight-line rents were $1,052 in 1999 and $622
in 1998.
Recoveries from tenants increased $5,056 or 30% to $21,712 as compared to
$16,656 in 1998. Property operating expenses, including operating and
maintenance, and real estate taxes and insurance increased $3,959 or 31% and
$1,945 or 23% respectively. The acquisition of NorthTown Mall, the opening of
Provo Towne Centre and the expansion of Boise Towne Square contributed $3,617
to recoveries from tenants, $3,733 to property operating expenses (including
operating and maintenance) and $1,460 to real estate taxes and insurance.
Recoveries from tenants as a percentage of property operating expenses were 81%
in 1999 compared to 79% in 1998.
<PAGE> 12
Depreciation and amortization increased $4,983 or 36% to $18,836 as
compared to $13,853 in 1998. This increase is primarily due to the acquisition
of the NorthTown Mall, changes in asset lives on certain tenant improvements
and the increase in newly developed GLA.
Interest expense increased $7,664 or 57% to $21,023 as compared to
$13,359 in 1998. This increase resulted from additional borrowings used to
acquire NorthTown Mall and newly constructed GLA and a decrease in capitalized
interest due to completed GLA. The reduction of borrowings outstanding, funded
by the sale of cumulative redeemable preferred units of the Operating
Partnership created a smaller percentage increase in interest expense.
Interest capitalized on projects under development was $1,887 in 1999 as
compared to $3,112 in 1998.
The Company's controlling interest in the Operating Partnership decreased
from 83% in 1998 to 69% in 1999. This decrease resulted primarily from the
issuance of cumulative redeemable preferred units of the Operating Partnership
in private placement sales. The income allocated to the minority interest of
the Operating Partnership unitholders as a result of issuing these preferred
units was $2,025.
During 1999 the Company's borrowings secured by real estate were reduced
by $33,777, which unencumbered four regional mall properties. Deferred
financing costs related to the transaction were written-off and direct
expenses, including a prepayment penalty, created an extraordinary loss of
$801, net of minority interest of $184. There were no extraordinary losses in
1998.
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1999 TO THREE MONTHS ENDED
SEPTEMBER 30, 1998 (DOLLARS IN THOUSANDS)
Total revenues for the three months ended September 30, 1999 increased
$4,440 or 16% to $32,398 as compared to $27,958 in 1998. This increase is
primarily attributable to a $3,340 or 17% increase in minimum rents to $23,316
as compared to $19,976 in 1998. Additionally, percentage and overage rents
decreased $92 or 8% to $1,088 as compared to $1,180 in 1998. The decrease in
percentage and overage rents is primarily the result of changes in estimates
for the three months and changes in leases made with tenants.
The August 1998 acquisition of NorthTown Mall, the August 1998 expansion
of Boise Towne Square, the October 1998 opening of Provo Towne Centre, and the
October 1998 addition of Sears to Red Cliffs Mall and Sears Tire and Battery to
Red Cliffs Plaza contributed $2,450 to the minimum rent increase. The
remaining $890 increase in minimum rents was the result of increases
experienced for the balance of the property portfolio.
Revenues recognized from straight-line rents were $429 in 1999 and $253
in 1998.
Recoveries from tenants increased $1,262 or 19% to $7,785 as compared to
$6,523 in 1998. Property operating expenses, including operating and
maintenance, and real estate taxes and insurance increased $1,018 or 21% and
$404 or 13%, respectively. The acquisition of NorthTown Mall, and the opening
of Provo Towne Centre contributed $877 to recoveries from tenants, $1,091 to
property operating expenses (including operating and maintenance) and $340 to
real estate taxes and insurance. Recoveries from tenants as a percentage of
property operating expenses were 84% in 1999 compared to 83% in 1998.
Depreciation and amortization increased $1,008 or 19% to $6,211 as
compared to $5,203 in 1998. This increase is primarily due to the acquisition
of the NorthTown Mall, changes in asset lives on certain tenant improvements
and the increase in newly developed GLA.
Interest expense increased $761 or 14% to $6,324 as compared to $5,563 in
1998. This increase resulted from additional borrowings used to acquire
NorthTown Mall and newly constructed GLA and a decrease in capitalized interest
due to completed GLA. The reduction of borrowings outstanding, funded by the
sale of cumulative redeemable preferred units of the Operating Partnership,
created a smaller percentage increase in interest expense. Interest
capitalized on projects under development was $848 in 1999 as compared to
$1,132 in 1998.
The Company's controlling interest in the Operating Partnership decreased
from 83% in 1998 to 72% in 1999. This decrease resulted primarily from the
issuance of cumulative redeemable preferred units of the Operating Partnership
in private placement sales. The income allocated to minority interest of the
Operating Partnership unitholders as a result of issuing these preferred units
was $1,814.
<PAGE> 13
During 1999 the Company's borrowings secured by real estate were reduced
by $33,777, which unencumbered four regional mall properties. Deferred
financing costs related to the transaction were written-off and direct
expenses, including a prepayment penalty, created an extraordinary loss of
$801, net of minority interest of $184. There were no extraordinary losses in
1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal uses of its liquidity and capital resources have
historically been for distributions, property acquisitions, property
development, expansion and renovation programs and debt repayment. To maintain
its qualification as a REIT under the Internal Revenue Code of 1986, as amended
(the "Code"), JP Realty, Inc. is required to distribute to its shareholders at
least 95% of its "Real Estate Investment Trust Taxable Income," as defined in
the Code. During the quarter ended September 30, 1999, the Company declared a
distribution of $.465 per share payable October 19, 1999 to the shareholders of
record as of October 7, 1999.
The Company's principal source of liquidity is its cash flow from
operations generated from its real estate investments. As of September 30,
1999, the Company's cash and restricted cash amounted to approximately $7.7
million. In addition to its cash and restricted cash, unused capacity under
the Credit Facility at September 30, 1999 totaled $141.4 million.
The Company expects to meet its short-term cash requirements, including
distributions, recurring capital expenditures related to maintenance and
improvement of existing properties, through undistributed funds from
operations, cash balances and advances under the Credit Facility.
The Company's principal long-term liquidity requirements will be the
repayment of the $61.2 million mortgage debt, which matures in 2001, the
repayment of the $100 million senior notes principal payable at $25 million a
year starting in March 2005, the repayment of the $83.7 million first mortgage,
which requires a balloon payment of approximately $74.1 million in September
2008, the repayment of outstanding balances under the $200 million Credit
Facility due October 2000, the repayment of $12.3 million first mortgage, which
requires a balloon payment of approximately $11.9 million in October 2000, and
the repayment of principal on the Spokane Valley Mall and Provo Town Centre
construction loans of approximately $41.6 million and $40.5 million due August
2001 and July 2001, respectively.
On October 20, 1999, the Company held a grand opening of its newly
developed regional mall in Sierra Vista, Arizona. The Mall at Sierra Vista
added approximately 330,000 square feet of additional total GLA to the
Company's existing portfolio. The remaining construction costs for completion
of the mall will be financed with the Credit Facility. Additional long-term
capital needs of the Company relates to the expansion of NorthTown Mall, a
regional mall in Spokane, Washington, through its consolidated partnership
Price Spokane, Limited Partnership. The project is expected to be completed in
the third quarter 2000 and will add approximately 100,000 square feet of GLA.
Costs incurred on the NorthTown Mall expansion are approximately $4.9 million,
which have been funded by the Credit Facility. Total costs for the project are
expected to be approximately $17 million. The Company is currently involved in
smaller expansion and renovation projects of its properties. The projects will
be financed by the Credit Facility. The Company is also contemplating the
expansion and renovation of several of its existing properties and additional
development projects and acquisitions as a means to expand its portfolio. The
Company does not expect to generate sufficient funds from operations to meet
such long-term needs and intends to finance these costs primarily through
advances under the Credit Facility together with equity and debt offerings and
individual property financing. The availability of such financing will
influence the Company's decision to proceed with, and the pace of, its
development and acquisition activities.
On April 23, 1999, the Operating Partnership issued 510,000 Series A
8.75% cumulative redeemable preferred units in a private placement. Each unit
represents a limited partnership interest with a liquidation value of twenty-
five dollars per unit. The Operating Partnership used the proceeds of
approximately $12.8 million, less applicable transaction costs and expenses of
approximately $0.4 million, for the partial repayment of borrowings outstanding
under the Credit Facility. On July 28, 1999, the Operating Partnership issued
3,800,000 Series B 8.95% cumulative redeemable perpetual preferred units in a
private placement. Each unit represents a limited partnership interest with a
liquidation value of twenty-five dollars per unit. The Company used the
contribution proceeds of $95 million, less applicable transaction costs and
expenses of approximately $2.8 million for the partial repayment of borrowings
outstanding under the Credit Facility and increase in operating cash.
Quarterly distributions to the Series A and Series B preferred unitholders are
due on the last day of each March, June, September and December.
On September 2, 1997, the Company and the Operating Partnership filed a
shelf registration statement on Form S-3 with the Securities and Exchange
Commission for the purpose of registering common stock, preferred stock,
depositary shares, common stock warrants, debt securities and guaranties. This
registration statement, when combined with the Company's unused portion
<PAGE> 14
of its previous shelf registration, would allow for up to $400 million of
securities to be offered by the Company and the Operating Partnership. On March
11, 1998, pursuant to this registration statement, the Operating Partnership
issued $100 million of ten-year senior unsecured notes bearing annual interest
at a rate of 7.29%. The Operating Partnership had entered into an interest rate
protection agreement in anticipation of issuing these notes and received
$270,000 as a result of terminating this agreement making the effective rate of
interest on these notes 7.24%. Interest payments on the unsecured notes are due
semi-annually on March 11th and September 11th of each year. Principal payments
of $25 million on the unsecured notes are due annually beginning March 2005. The
proceeds were used to partially repay outstanding borrowings under the Credit
Facility.
The Company intends to incur additional borrowings in the future in a
manner consistent with its policy of maintaining a conservative ratio of debt-
to-total market capitalization. The Company's ratio of debt-to-total market
capitalization was approximately 45% at September 30, 1999.
YEAR 2000 ISSUES
In the past, many computer software programs were written using two
digits rather than four to define the applicable year. As a result, date-
sensitive computer software may recognize a date using "00" as the year 1900
rather than the year 2000. This is generally referred to as the Year 2000
("Y2K") issue. If this situation occurs, the potential exists for computer
system failures or miscalculations by computer programs, which could disrupt
the Company's operations.
The Company has developed a comprehensive strategy for updating its
systems for Y2K compliance. The Company's information technology ("IT")
systems include software and hardware purchased from outside vendors, as well
as in-house developed software. The Company is confident that vendor developed
software and hardware has been made Y2K compliant through installing and
compliance testing vendor-provided Y2K updates. In-house developed software
has been identified and assessed. Modifications are being and will continue to
be made as necessary to bring such software into Y2K compliance and validate
such in-house developed compliance prior to the end of 1999.
The Company believes that the identification of the Company's non-IT
systems which may be impacted by the Y2K problem, including those relating to
property management (e.g. alarm systems and HVAC systems) has been completed,
and that modifications, validation and implementation of necessary changes will
be completed prior to December 1999.
The Company is also identifying third parties with which it has a
significant relationship that, in the event of a Y2K failure, could have a
material impact on its financial position or operating results. Third parties
include energy and utility suppliers, creditors, service and product suppliers
and the Company's significant tenants. These relationships, especially those
associated with certain suppliers and tenants, are material to the Company and
a Y2K failure for one or more of these parties could result in a material
adverse effect on the Company's operating results and financial position. The
Company continues to make inquiries of these third parties to assess their Y2K
readiness. The Company expects that this process will be on-going throughout
the current year.
The Company currently estimates that the costs to address Y2K issues,
which through September 30, 1999 totaled approximately $100,000, will not
exceed $200,000. Costs include incremental salary and fringe benefits for
personnel, hardware and software costs, and consulting and travel expenses
associated with addressing Y2K issues. These costs will be expensed as
incurred or, in the case of equipment or software replacement, will be
capitalized and depreciated over the expected useful life.
The worst case Y2K scenarios could be as insignificant as a minor
interruption in property management services provided to tenants at the
Company's properties resulting from unanticipated problems encountered in the
IT systems of the Company or any of the significant third parties with whom the
Company does business. The pervasiveness of the Y2K issue makes it likely that
previously unidentified issues will require remediation during the normal
course of business. In such a case, the Company anticipates that transactions
could be processed manually while IT and other systems are repaired and that
such interruptions would have a minor effect on the Company's operations. On
the other hand, a worst case Y2K scenario could be as far reaching as an
extended loss of utility service resulting from interruptions at the point of
power generation, on-line transmission, or local distribution to the Company's
Properties. Such an interruption could result in an inability to provide
tenants with access to their spaces thereby affecting the Company's ability to
collect rents and pay its obligations which could result in a material adverse
effect on the Company's operating results and financial position.
The statements contained in this Quarterly Report of Form 10-Q that are
not purely historical fact are forward looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including statements regarding the Company's
expectations, budgets, estimates, contemplations and Y2K compliance. All
forward
<PAGE> 15
looking statements included in this document are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward looking statement. It is important to
note that the Company's actual results could differ materially from those in
such forward looking statements. Certain factors that might cause such
differences include those relating to changes in economic climate, local
conditions, law and regulations, the availability of acceptable financing, the
relative illiquidity of real property investments, the potential bankruptcy of
tenants and the development, redevelopment or expansion of properties and
unexpected developments surrounding the Y2K issues.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's exposure to market risk is limited to fluctuations in the
general level of interest rates on its current and future fixed and variable
rate debt obligations. Even though its philosophy is to maintain a fairly low
tolerance to interest rate fluctuation risk, the Company is still vulnerable,
however, to significant fluctuations in interest rates on its variable rate
debt, on any future repricing or refinancing of its fixed rate debt and on
future debt.
The Company uses long-term and medium-term debt as a source of capital.
On September 30, 1999, the Company had $262,277,000 of fixed rate debt, which
consisted of $100,000,000 unsecured public bonds and $162,277,000 in mortgages
and notes secured by real estate. The various fixed rate debt instruments
mature starting in the year 2000 through 2095. The average rate of interest on
the fixed rate debt is 6.9%. When debt instruments of this type mature, the
Company typically refinances such debt at the then-existing market interest
rates which may be more or less than the interest rates on the maturing debt.
In addition, the Company may attempt to reduce interest rate risk associated
with a forecasted issuance of new fixed rate debt by entering into interest
rate protection agreements. The Company does not have any fixed rate debt
maturing in 1999.
The Company's Credit Facility and existing construction loans have
variable interest rates and any fluctuation in interest rates could increase or
decrease the Company's interest expense. At September 30, 1999, the Company
had approximately $131,166,000 in outstanding variable rate debt . If the
interest rate for the Company's variable rate debt increased or decreased by 1%
during 1999, the Company's interest rate expense on its outstanding variable
rate debt would increase or decrease, as the case may be, by approximately
$1,312,000.
Due to the uncertainty of fluctuations in interest rates and the specific
actions that might be taken by the Company to mitigate the impact of such
fluctuations and their possible effects, the foregoing sensitivity analysis
assumes no changes in the Company's financial structure.
<PAGE> 16
JP REALTY, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
PART II
ITEM 1. LEGAL PROCEEDINGS
-----------------
The Company is not aware of any pending or threatened litigation at this
time that will have a material adverse effect on the Company or any of its
properties.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
-----------------------------------------
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
Not applicable.
ITEM 5. OTHER INFORMATION
-----------------
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(A) EXHIBITS
<PAGE> 17
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C> <C>
3.1 Articles of Amendment and Restatement of the Company (3(a)){*}
3.2 Amended and Restated Bylaws of the Company (3(b)){**}
3.3 Articles Supplementary of the Company relating to the 8.75% Series A Cumulative
Redeemable Preferred Stock{***}
3.4 Articles Supplementary of the Company relating to the 8.95% Series B Cumulative
Redeemable Preferred Stock{***}
3.5 Articles Supplementary of the Company relating to the election to be subject to
Title 3, Subtitle 8 of the Maryland General Corporation Law{****}
3.6 Articles Supplementary of the Company relating to the Series A Junior Preferred
Stock{****}
3.7 Amendment to the Bylaws of the Company{****}
4.1 Specimen of Common Stock Certificate (4){*}
10.1 Second Amended and Restated Agreement of Limited Partnership of Price
Development Company, Limited Partnership{***}
10.2 Agreement of Limited Partnership of Price Financing Partnership, L.P. (10(b)){*}
10.3 Loan Agreements related to Mortgage Debt and related documents (10(c)){*}
i) Deed of Trust, Mortgage, Security Agreement and Assignment of Leases and Rents
of Price Financing Partnership, L.P.
ii) Intentionally Omitted
iii) Indenture between Price Capital Corp. and a Trustee
iv) Limited Guarantee Agreement (Guarantee of Collection) for outside investors
v) Limited Guarantee Agreement (Guarantee of Collection) for Price Group Investors
vi) Cash Collateral Account Security, Pledge and Assignment Agreement among Price
Financing Partnership, L.P., Price Capital Corp. and Continental Bank N.A.
vii) Note Issuance Agency Agreement between Price Capital Corp. and Price Financing
Partnership, L.P.
viii) Management and Leasing Agreement among Price Financing Partnership, L.P. and
Price Development Company, Limited Partnership
ix) Assignment of Management and Leasing Agreement of Price Financing Partnership,
L.P.
10.4 Employment and Non-Competition Agreement between the Company and John Price
(10(d)){*}
10.5 Indemnification Agreement for Directors and Officers (10(f)){*}
10.6 Registration Rights Agreement among the Company and the Limited Partners of
Price Development Company, Limited Partnership (10(g)){*}
10.7 Amendment No. 1 to Registration Rights Agreement, dated August 1, 1995, among
the Company and the Limited Partners of Price Development Company, Limited
Partnership{*****}
10.8 Exchange Agreement among the Company and the Limited Partners of Price
Development Company, Limited Partnership (10(h)){*}
10.9 1993 Stock Option Plan (10(i)){*}
10.10 Amendment to Groundlease between Price Development Company and Alvin Malstrom as
Trustee and C.F. Malstrom, dated December 31, 1985. (Groundlease for Plaza
9400) (10(j)){*}
10.11 Lease Agreement between The Corporation of the President of the Church of Jesus
Christ of Latter Day Saints and Price-James and Assumptions, dated September 24,
1979. (Groundlease for Anaheim Plaza) (10(k)){*}
10.12 Indenture of Lease between Ambrose and Zelda Motta and Cordova Village, dated
July 26, 1974, and Amendments and Transfers thereto. (Groundlease for Fort
Union Plaza) (10(l)){*}
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C> <C>
10.13 Lease Agreement between Advance Management Corporation and Price Rentals, Inc.
and dated August 1, 1975 and Amendments thereto. (Groundlease for Price
Fremont) (10(m)){*}
10.14 Groundlease between Aldo Rossi and Price Development Company, Dated September 1,
1989, and related documents. (Groundlease for Halsey Crossing) (10(n)){*}
10.15 Loan Agreements related to 1995 Credit Facility{*****}
i) Credit Agreement, dated March 8, 1995, between Price Development Company,
Limited Partnership and Lexington Mortgage Company
ii) Note dated March 8, 1995
iii) Guaranty of Payment dated March 8, 1995 between the Company and Lexington
Mortgage Company
iv) Cash Collateral Account Security, Pledge and Assignment Agreement dated March 8,
1995 between Price Development Company, Limited Partnership, Bank One, Utah,
N.A. and Lexington Mortgage Company
v) Amended and Restated Credit Agreement dated September 29, 1995 between Price
Development Company, Limited Partnership, Merrill Lynch Mortgage Capital, Inc.
and Capital Market Assurance Corporation
vi) Amendment to Cash collateral Account, Security, Pledge and Assignment Agreement
dated September 29, 1995
vii) Reaffirmation of Guaranty dated September 29, 1995
10.16 First Amendment to Second Amended and Restated Agreement of Limited Partnership
of Price Development Company, Limited Partnership{***}
10.17 Second Amendment to Second Amended and Restated Agreement of Limited Partnership
of Price Development Company, Limited Partnership{***}
10.18 Third Amendment to Second Amended and Restated Agreement of Limited Partnership
of Price Development Company, Limited Partnership
10.19 Rights Agreement between the Company and Chase Mellon Shareholder Services,
L.L.C., as Rights Agent{****}
27. Financial Data Schedule
- ------------------------
* Documents were previously filed with the Company's Registration Statement
on Form S-11, File No. 33-68844, under the exhibit numbered in
parenthetical, and are incorporated herein by reference.
** Document was previously filed with the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1998 and is incorporated herein
by reference.
*** Documents were previously filed with the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1999 and are incorporated herein
by reference.
**** Documents were previously filed with Company's Current Report on Form 8-
K, dated August 13, 1999, and are incorporated herein by reference.
***** Documents were previously filed with the Company's Annual Report of Form
10-K for the year ended December 31, 1995 and are incorporated herein by
reference.
(b) CURRENT REPORTS ON FORM 8-K
On August 13, 1999, the Company filed a current report on Form 8-K
reporting under Item 5 the adoption of its shareholder rights plan.
</TABLE>
<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 thereunto duly authorized.
<TABLE>
<CAPTION>
JP REALTY, INC.
(Registrant)
<S> <C>
November 12, 1999 /s/ G. Rex Frazier
----------------- --------------------------
(Date) G. Rex Frazier
PRESIDENT, CHIEF OPERATING OFFICER,
AND DIRECTOR
November 12, 1999 /s/ M. Scott Collins
----------------- --------------------------
(Date) M. Scott Collins
VICE PRESIDENT--CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL
& ACCOUNTING OFFICER)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C> <C>
3.1 Articles of Amendment and Restatement of the Company (3(a)){*}
3.2 Amended and Restated Bylaws of the Company (3(b)){**}
3.3 Articles Supplementary of the Company relating to the 8.75% Series A Cumulative
Redeemable Preferred Stock{***}
3.4 Articles Supplementary of the Company relating to the 8.95% Series B Cumulative
Redeemable Preferred Stock{***}
3.5 Articles Supplementary of the Company relating to the election to be subject to
Title 3, Subtitle 8 of the Maryland General Corporation Law{****}
3.6 Articles Supplementary of the Company relating to the Series A Junior Preferred
Stock{****}
3.7 Amendment to the Bylaws of the Company{****}
4.1 Specimen of Common Stock Certificate (4){*}
10.1 Second Amended and Restated Agreement of Limited Partnership of Price
Development Company, Limited Partnership{***}
10.2 Agreement of Limited Partnership of Price Financing Partnership, L.P. (10(b)){*}
10.3 Loan Agreements related to Mortgage Debt and related documents (10(c)){*}
i) Deed of Trust, Mortgage, Security Agreement and Assignment of Leases and Rents
of Price Financing Partnership, L.P.
ii) Intentionally Omitted
iii) Indenture between Price Capital Corp. and a Trustee
iv) Limited Guarantee Agreement (Guarantee of Collection) for outside investors
v) Limited Guarantee Agreement (Guarantee of Collection) for Price Group Investors
vi) Cash Collateral Account Security, Pledge and Assignment Agreement among Price
Financing Partnership, L.P., Price Capital Corp. and Continental Bank N.A.
vii) Note Issuance Agency Agreement between Price Capital Corp. and Price Financing
Partnership, L.P.
viii) Management and Leasing Agreement among Price Financing Partnership, L.P. and
Price Development Company, Limited Partnership
ix) Assignment of Management and Leasing Agreement of Price Financing Partnership,
L.P.
10.4 Employment and Non-Competition Agreement between the Company and John Price
(10(d)){*}
10.5 Indemnification Agreement for Directors and Officers (10(f)){*}
10.6 Registration Rights Agreement among the Company and the Limited Partners of
Price Development Company, Limited Partnership (10(g)){*}
10.7 Amendment No. 1 to Registration Rights Agreement, dated August 1, 1995, among
the Company and the Limited Partners of Price Development Company, Limited
Partnership{*****}
10.8 Exchange Agreement among the Company and the Limited Partners of Price
Development Company, Limited Partnership (10(h)){*}
10.9 1993 Stock Option Plan (10(i)){*}
10.10 Amendment to Groundlease between Price Development Company and Alvin Malstrom as
Trustee and C.F. Malstrom, dated December 31, 1985. (Groundlease for Plaza
9400) (10(j)){*}
10.11 Lease Agreement between The Corporation of the President of the Church of Jesus
Christ of Latter Day Saints and Price-James and Assumptions, dated September 24,
1979. (Groundlease for Anaheim Plaza) (10(k)){*}
10.12 Indenture of Lease between Ambrose and Zelda Motta and Cordova Village, dated
July 26, 1974, and Amendments and Transfers thereto. (Groundlease for Fort
Union Plaza) (10(l)){*}
</TABLE>
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<TABLE>
<CAPTION>
<S> <C> <C>
10.13 Lease Agreement between Advance Management Corporation and Price Rentals, Inc.
and dated August 1, 1975 and Amendments thereto. (Groundlease for Price
Fremont) (10(m)){*}
<C>
10.14 Groundlease between Aldo Rossi and Price Development Company, Dated September 1,
1989, and related documents. (Groundlease for Halsey Crossing) (10(n)){*}
10.15 Loan Agreements related to 1995 Credit Facility{*****}
i) Credit Agreement, dated March 8, 1995, between Price Development Company,
Limited Partnership and Lexington Mortgage Company
ii) Note dated March 8, 1995
iii) Guaranty of Payment dated March 8, 1995 between the Company and Lexington
Mortgage Company
iv) Cash Collateral Account Security, Pledge and Assignment Agreement dated March 8,
1995 between Price Development Company, Limited Partnership, Bank One, Utah,
N.A. and Lexington Mortgage Company
v) Amended and Restated Credit Agreement dated September 29, 1995 between Price
Development Company, Limited Partnership, Merrill Lynch Mortgage Capital, Inc.
and Capital Market Assurance Corporation
vi) Amendment to Cash collateral Account, Security, Pledge and Assignment Agreement
dated September 29, 1995
vii) Reaffirmation of Guaranty dated September 29, 1995
10.16 First Amendment to Second Amended and Restated Agreement of Limited Partnership
of Price Development Company, Limited Partnership{***}
10.17 Second Amendment to Second Amended and Restated Agreement of Limited Partnership
of Price Development Company, Limited Partnership{***}
10.18 Third Amendment to Second Amended and Restated Agreement of Limited Partnership
of Price Development Company, Limited Partnership
10.19 Rights Agreement between the Company and Chase Mellon Shareholder Services,
L.L.C., as Rights Agent{****}
27. Financial Data Schedule
- -----------------
* Documents were previously filed with the Company's Registration Statement
on Form S-11, File No. 33-68844, under the exhibit numbered in
parenthetical, and are incorporated herein by reference.
** Document was previously filed with the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1998 and is incorporated herein
by reference.
*** Documents were previously filed with the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1999 and are incorporated herein
by reference.
**** Documents were previously filed with Company's Current Report on Form 8-
K, dated August 13, 1999, and are incorporated herein by reference.
***** Documents were previously filed with the Company's Annual Report of Form
10-K for the year ended December 31, 1995 and are incorporated herein by
reference.
</TABLE>
THIRD AMENDMENT TO SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP
The undersigned, being the sole general partner of Price Development
Company, Limited Partnership (the "Partnership"), a limited partnership
formed under the Maryland Revised Uniform Limited Partnership Act and
pursuant to the terms of that certain Second Amended and Restate Agreement
of Limited Partnership, dated July 15, 1999 (the "Partnership Agreement"),
does hereby amend the Partnership Agreement as follows:
1. EXHIBIT OF PARTNERS AND PARTNERSHIP INTERESTS. EXHIBIT A to the
Partnership Agreement is hereby deleted in its entirety and replaced by
EXHIBIT A hereto which identifies each Partner of the Partnership, the
number of Partnership Units held by such Partner and such Partner's
respective Percentage Interest in the Partnership.
2. RATIFICATION. Except as expressly modified by this Third
Amendment, all of the provisions of the Partnership Agreement are affirmed
and ratified and remain in full force and effect.
Capitalized terms used but not defined in this Third Amendment shall
have the same meanings that are ascribed to them in the Partnership
Agreement.
Dated: October 1, 1999
JP REALTY, INC.,
as general partner
By: /s/ G. REX FRAZIER
---------------------
Name: G. Rex Frazier
Title: President
<PAGE>
EXHIBIT A
PARTNERS AND PARTNERSHIP INTERESTS
<TABLE>
<CAPTION>
Partnership Percentage
Name of Partner Units Interest
-------------------- ------------ -----------------
<S> <C> <C>
GENERAL PARTNER
JP Realty, Inc.
35 Century Park-Way
Salt Lake City, Utah 84115 17,640,747 82.74871%
LIMITED PARTNERS
Boise Mall Investment Company, Ltd. 824,411 3.86712%
Brown, Mike 125 0.00059%
Bybee, Terry 320 0.00150%
Cache Valley Mall Partnership, Ltd. 328,813 1.54239%
Chandler, Harry 100 0.00047%
Clauson, Pat 100 0.00047%
Cloward, Burke 35,460 0.16633%
Cordano, Alan 765 0.00359%
Cordano, James 1,531 0.00718%
Curtis, Greg 24 0.00011%
Curtis, Vardell 125 0.00059%
East Ridge Partnership 100 0.00047%
Enslow, Mike 320 0.00150%
Fairfax Holding, LLC 786,226 3.68801%
Frank, Alan 5,486 0.02573%
Frazier, G. Rex 3,680 0.01726%
Frei, Michael 6,817 0.03198%
Gillette, Jerry 100 0.00047%
Hall Investment Company 10,204 0.04786%
Hansen, Kenneth 5,102 0.02393%
JCP Realty, Inc. 350,460 1.64393%
KFC Advertising 5,487 0.02574%
Kelley, Chad 125 0.00059%
Kelley, Paul 25 0.00012%
King American Hospital, Ltd. 63,424 0.29751%
King Provo, Ltd. 64,872 0.30430%
King, Warren P. 6,244 0.02929%
Mendenhall, Paul K. 214 0.00100%
Mulkey, Tom 100 0.00047%
North Plains Development Company, Ltd. 19,033 0.08928%
North Plains Land Company, Ltd. 1,758 0.00825%
Olson, Carl 1,894 0.00888%
Orton, Byron 125 0.00059%
Peterson, Martin G. 692 0.00325%
Pine Ridge Development Company, Ltd. 77,641 0.36420%
Pine Ridge Land Company, Ltd. 5,176 0.02428%
Price, John 200 0.00094%
<PAGE>
Partnership Percentage
Name of Partner Units Interest
-------------------- ------------ -----------------
Price, Steven 350 0.00164%
Price 800 Company, Ltd. 156,615 0.73465%
Price Commerce, Ltd. 63,423 0.29750%
Price East Bay, Ltd. 37,157 0.17430%
Price Eugene Bailey Company, Ltd. 17,497 0.08207%
Price Fremont Company, Ltd. 166,315 0.78015%
Price Glendale Company, Ltd. 3,935 0.01846%
Price Orem Investment Company, Ltd. 66,747 0.31309%
Price Plaza 800 Company, Ltd. 12,199 0.05722%
Price Riverside Company, Ltd. 10,983 0.05152%
Price Rock Springs Company, Ltd. 11,100 0.05207%
Price Taywin Company, Ltd. 106,381 0.49901%
Priet, Nettie 100 0.00047%
Red Cliff Mall Investment Company 167,379 0.78514%
RMC Mall Corp. 41,518 0.19475%
Roebbelen Engineering 72,000 0.33774%
Souvall, Sam 23,371 0.10963%
Taycor Ltd. 35,462 0.16634%
Tech Park II Company, Ltd. 4,929 0.02312%
Timothy, Jodi 150 0.00070%
Vise, Phil 160 0.00075%
Watcott, Keith 35,460 0.16633%
Watkins, Gary 5,102 0.02393%
Wilcher, Abe 5,306 0.02489%
Wilcher, Lena 10,000 0.04691%
YSP 16,787 0.07874%
Total 21,318,452 100.00000%
------------ -------------
SSB Tax Advantaged Exchange Fund I, LLC 510,000 100.00000%1
------------ -------------
Belcrest Realty Corporation 2,775,000 73.02632%2
Belair Real Estate Corporation 1,025,000 26.97368%2
------------ -------------
3,800,000 100.00000%
------------ -------------
</TABLE>
- ----------------- ___________________________
1. Represents all of the Series A Preferred Units issued by the
Partnership.
2. Represents a percentage of the Series B Preferred Units issued
by the Partnership.
NYA 187756.9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JP
REALTY, INC. FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-END> SEP-30-1999 SEP-30-1998
<CASH> $ 7,729 $ 5,228
<SECURITIES> 0 0
<RECEIVABLES> 0<F1> 0<F1>
<ALLOWANCES> 0<F1> 0<F1>
<INVENTORY> 0 0
<CURRENT-ASSETS> 0<F2> 0<F2>
<PP&E> 0<F1> 0<F1>
<DEPRECIATION> 0<F1> 0<F1>
<TOTAL-ASSETS> 758,056 713,046
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 2 2
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 758,056 713,046
<SALES> 0 0
<TOTAL-REVENUES> 97,126 76,868
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 50,799<F3> 39,346<F4>
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 21,023 13,359
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 801 0
<CHANGES> 0 0
<NET-INCOME> 17,970 20,028
<EPS-BASIC> $1.02<F5> $1.14
<EPS-DILUTED> $1.02<F6> $1.13
<FN>
<F1>The Company utilizes a condensed balance sheet format for 10-Q reporting.
Amounts are included in Other Assets.
<F2>The financial statements reflect an unclassifed balance sheet due to the
nature of the Company's industry - Real Estate Investment Trust.
<F3>Amount is comprised of $71,822 of expenses less interest expense of $21,023
reflected elsewhere in this Financial Data Schedule.
<F4>Amount is comprised of $52,705 of expenses less interest expense of $13,359
reflected elsewhere in this Financial Data Schedule.
<F5>The Basis Earnings Per Share before Extraordinary item is $1.06 per share
with the Extraordinary item being a loss of $.04 per share.
<F6>Diluted Earnings Per Share before Extraordinary item is $1.06 per share
with the Extraordinary item being a loss of $0.04 per share.
</FN>
</TABLE>
