1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/ / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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)
MARYLAND 87-0515088
- -------------------------------------------------------------------
(State of organization) (I.R.S. Employer
Identification No.)
35 CENTURY PARK-WAY
SALT LAKE CITY, UTAH
84115
- -------------------------------------------------------------------
(Address of principal executive offices)
(801) 486-3911
- -------------------------------------------------------------------
(Registrant's telephone number, including area code)
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
17,586,627 Shares of Common Stock were outstanding as of August 12,
1997
2
JP REALTY, INC.
FORM 10-Q
INDEX
-----
PART I: FINANCIAL INFORMATION PAGE
- ------------------------------ ----
Item 1. Financial Statements 3
Condensed Consolidated Balance Sheet of JP
Realty, Inc. as of June 30, 1997 and December
31, 1996. 4
Condensed Consolidated Statement of Operations
of JP Realty, Inc. for the Six Months Ended
June 30, 1997 and 1996. 5
Condensed Consolidated Statement of Operations
of JP Realty, Inc. for the Three Months Ended
June 30, 1997 and 1996. 6
Condensed Consolidated Statement of Cash Flows
of JP Realty, Inc. for the Six Months Ended
June 30, 1997 and 1996. 7
Notes to Financial Statements 8 to 9
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 10 to 12
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 12
PART II: Other Information PAGE
- ---------------------------- ----
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 14 to 15
3
PART I
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
The information furnished in the accompanying financial statements
listed in the index on page 2 consists only of 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 aforementioned financial
statements and Management's Discussion and Analysis of Financial
Condition and Results of Operations.
4
JP REALTY, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS)
(UNAUDITED)
June 30, December 31,
1997 1996
---------- ----------
ASSETS
Real Estate Assets, Including
Assets Under Development of
$46,463 and $30,027 . . . . . . . . $ 547,742 $ 453,241
Less: Accumulated Depreciation. . (92,278) (87,318)
----------- -----------
Net Real Estate Assets. . . . . . 455,464 365,923
Cash. . . . . . . . . . . . . . . . . 777 1,750
Restricted Cash . . . . . . . . . . . 2,063 2,372
Other Assets. . . . . . . . . . . . . 12,241 11,315
----------- -----------
$ 470,545 $ 381,360
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Borrowings. . . . . . . . . . . . . . $ 203,654 $ 162,375
Accounts Payable and Accrued Expenses 12,662 11,611
Dividends Payable . . . . . . . . . . 7,633 --
Accumulated Losses in Excess of
Equity Investment . . . . . . . . . -- 1,555
Other Liabilities . . . . . . . . . . 531 485
----------- -----------
224,480 176,026
----------- -----------
Minority Interest . . . . . . . . . . 36,769 32,778
----------- -----------
SHAREHOLDERS' EQUITY
Common Stock, $.0001 par value,
124,800,000 shares authorized,
17,385,727 shares and 15,873,553
shares issued and outstanding at
June 30, 1997 and December 31, 1996,
respectively. . . . . . . . . . . . 2 2
Price Group Stock, $.0001 par value,
200,000 shares authorized, issued and
outstanding . . . . . . . . . . . . -- --
Excess Stock, 75,000,000 shares
authorized. . . . . . . . . . . . . -- --
Additional Paid-in Capital. . . . . . 232,051 193,229
Accumulated Dividends in Excess of
Net Income. . . . . . . . . . . . . (22,757) (20,675)
----------- -----------
209,296 172,556
----------- -----------
$ 470,545 $ 381,360
=========== ===========
See accompanying notes to financial statements
5
JP REALTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
FOR THE SIX MONTHS ENDED JUNE 30,
---------------------------------
1997 1996
----------- -----------
Revenues:
Minimum Rents. . . . . . . . . . . $ 26,448 $ 25,389
Percentage and Overage Rents . . . 1,992 2,162
Recoveries from Tenants. . . . . . 8,053 7,334
Interest . . . . . . . . . . . . . 317 306
Other. . . . . . . . . . . . . . . 182 159
----------- -----------
36,992 35,350
----------- -----------
Expenses:
Operating and Maintenance. . . . . 5,544 5,458
Real Estate Taxes and Insurance. . 3,932 3,951
General and Administrative . . . . 2,568 2,590
Depreciation . . . . . . . . . . . 5,289 4,943
Amortization of Deferred
Financing Costs . . . . . . . . . 486 556
Amortization of Deferred
Leasing Costs . . . . . . . . . . 316 363
Interest . . . . . . . . . . . . . 3,166 3,562
----------- -----------
21,301 21,423
----------- -----------
15,691 13,927
Minority Interest in Income of
Consolidated Partnerships. . . . . (146) (146)
Gain on Sale of Real Estate . . . . 339 94
----------- -----------
Income Before Minority Interest of
PDC Unitholders. . . . . . . . . . 15,884 13,875
Minority Interest of PDC
Unitholders. . . . . . . . . . . . (2,702) (2,549)
----------- -----------
Net Income. . . . . . . . . . . . . $ 13,182 $ 11,326
=========== ===========
Earnings Per Share:
Net Income . . . . . . . . . . . . $ .76 $ .71
=========== ===========
Weighted Average Number of
Common Shares. . . . . . . . . . . 17,351 16,037
=========== ===========
See accompanying notes to financial statements
6
JP REALTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
FOR THE THREE MONTHS ENDED JUNE 30,
----------------------------------
1997 1996
----------- -----------
Revenues:
Minimum Rents. . . . . . . . . . . $ 13,241 $ 13,185
Percentage and Overage Rents . . . 989 1,243
Recoveries from Tenants. . . . . . 4,175 3,718
Interest . . . . . . . . . . . . . 98 183
Other. . . . . . . . . . . . . . . 114 79
----------- -----------
18,617 18,408
----------- -----------
Expenses:
Operating and Maintenance. . . . . 2,809 2,868
Real Estate Taxes and Insurance. . 2,026 2,046
General and Administrative . . . . 1,132 1,253
Depreciation . . . . . . . . . . . 2,647 2,565
Amortization of Deferred
Financing Costs . . . . . . . . . 232 264
Amortization of Deferred
Leasing Costs . . . . . . . . . . 145 189
Interest . . . . . . . . . . . . . 1,490 1,989
----------- -----------
10,481 11,174
----------- -----------
8,136 7,234
Minority Interest in Income
of Consolidated Partnerships. . . (75) (79)
Gain on Sale of Real Estate . . . . 339 --
----------- -----------
Income Before Minority Interest
of PDC Unitholders. . . . . . . . 8,400 7,155
Minority Interest of PDC
Unitholders . . . . . . . . . . . (1,432) (1,314)
----------- -----------
Net Income. . . . . . . . . . . . . $ 6,968 $ 5,841
=========== ===========
Earnings Per Share:
Net Income . . . . . . . . . . . . $ .40 $ .36
=========== ===========
Weighted Average Number of
Common Shares. . . . . . . . . . . 17,586 16,038
=========== ===========
See accompanying notes to financial statements
7
JP REALTY, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
FOR THE THREE MONTHS ENDED JUNE 30,
----------------------------------
1997 1996
----------- -----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES. . . . . . . . . . . . $ 22,382 $ 20,694
----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Real Estate Assets, Developed or
Acquired, Net of Payables . . . . (70,246) (39,714)
(Increase) Decrease in
Restricted Cash . . . . . . . . . 309 (578)
Net Cash (Used in) Investing
Activities. . . . . . . . . . . (69,937) (40,292)
----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from Borrowings. . . . . . 72,487 44,300
Repayments of Borrowings. . . . . . (55,962) (9,367)
Net Proceeds from Sale of
Common Stock. . . . . . . . . . . 38,632 --
Acquisition of PDC Units. . . . . . -- (705)
Proceeds from Minority Interests. . 1,000 --
Proceeds from Stock Option
Exercise. . . . . . . . . . . . . 145 87
Distributions to Minority
Interests . . . . . . . . . . . . (1,682) (1,718)
Deferred Financing Costs. . . . . . (406) --
Dividends Paid. . . . . . . . . . . (7,632) (6,718)
----------- -----------
Net Cash Provided by
Financing Activities. . . . . . 46,582 25,879
----------- -----------
Net Increase (Decrease) in Cash . . (973) 6,281
Cash, Beginning of Period . . . . . 1,750 1,827
----------- -----------
Cash, End of Period . . . . . . . . $ 777 $ 8,108
=========== ===========
SUPPLEMENTAL DISCLOSURE OF
NON-CASH TRANSACTIONS:
The following non-cash
transactions occurred:
Dividends Accrued not Paid. . . . . $ 7,633 $ 6,720
Purchase of the Remaining 70%
Interest in Silver Lake Mall:
72,000 PDC Units Issued . . . . . . $ 1,863 $ --
30% Equity Investment Consolidated. (1,555) --
Debt Assumed. . . . . . . . . . . . $ 24,755 --
----------- -----------
Total . . . . . . . . . . . . . . . $ 25,063 $ --
=========== ===========
See accompanying notes to financial statements
8
JP REALTY, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1. BUSINESS SUMMARY AND SIGNIFICANT ACCOUNTING POLICIES
Business
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 retail
chains 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 83%
general partner interest in Price Development Company, Limited
Partnership ("PDC").
2. SECONDARY OFFERING
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 of
approximately $38,600 were used to purchase additional interests in
PDC. PDC used the proceeds and additional operating cash to reduce
the $50,000 credit facility by $39,900.
3. BORROWINGS
In May 1997, the Company borrowed $8,000 to lend to Provo Mall
Development Co. Ltd., a consolidated partnership in which PDC is
the general partner, which purchased property in Provo, Utah for
the development of an enclosed regional mall. In June 1997, the
Company borrowed $9,000 to pay down a portion of the debt assumed
in the acquisition transaction with Silver Lake Mall (see Note 5)
and $37,000 to purchase Visalia Mall (see Note 5). The funds were
borrowed from the Company's $50,000 credit facility and $25,000
credit facility (collectively, the "Credit Facilities") resulting
in a balance outstanding as of June 30, 1997 of $58,100.
In June 1997, the Company assumed debt of $24,755 as part of
the acquisition of Silver Lake Mall (see Note 5) and retired debt
with $2,791 cash and $9,000 from the credit facility. As of June
30, 1997, borrowings on the debt are $12,964. The loan rate of
interest is 8.5% per annum and has a maturity date of October 1,
2000 when a balloon payment of $11,971 is due.
On July 30, 1996, Spokane Mall Development Co. Limited, a
consolidated partnership of which PDC is the General Partner,
entered into a $50,000 construction facility. The construction
facility will be used to fund the development and construction of
the Spokane Valley Mall in Spokane, Washington. The construction
loan has a three-year term with an optional two-year extension and
is secured by the Spokane Valley Mall and guaranteed by PDC. As of
June 30, 1997, borrowings on the loan were $32,430.
4. SFAS 128 DISCLOSURE
The Company is required to adopt Statement of Financial
Accounting Standard No. 128 ("SFAS 128"), Earnings Per Share as of
December 31, 1997; earlier application is not permitted. SFAS 128
specifies the computation, presentation, and disclosure
requirements for earnings per share. The Company does not believe
that the adoption of SFAS 128 will have a material effect on the
Company's method of calculation or display of earning per share
amounts.
9
JP REALTY, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
5. ACQUISITIONS AND PRO FORMA FINANCIAL INFORMATION
In June 1997, the Company acquired two enclosed regional
malls. Silver Lake Mall located in Coeur D'Alene, Idaho and
Visalia Mall located in Visalia, California. The Company acquired
the remaining 70% interest in Silver Lake Mall, Ltd. a limited
partnership owning Silver Lake Mall by issuing 72,000 PDC units and
assuming debt of $24,755. The Company acquired Visalia Mall for
$38,000 paying $1,000 from operations and $37,000 from borrowings
(Note 3).
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. On April 4, 1996 the Company acquired
the Grand Teton Mall located in Idaho Falls, Idaho for a purchase
price of $34,400. The unaudited pro forma financial information
for the six months ended June 30, 1997 is presented as if the
acquisitions of Silver Lake Mall and Visalia Mall and the public
offering of Common Stock had occurred on January 1, 1997. The
unaudited pro forma financial information for the six months ended
June 30, 1996 is presented as if the acquisitions of Silver Lake ,
Visalia, and Grand Teton Malls and the public offering of Common
Stock had occurred on January 1, 1996.
FOR THE SIX MONTHS ENDED JUNE 30,
---------------------------------
1997 1996
PRO FORMA PRO FORMA
----------- -----------
Total Revenues. . . . . . . . . . . $ 41,618 $ 41,018
Net Income. . . . . . . . . . . . . 13,623 12,393
Earnings Per
Share of Common Stock . . . . . . $ .77 $ .73
6. SHAREHOLDERS' EQUITY
The following table summarizes changes in shareholders equity
since December 31, 1995:
Accumulated
Additional Dividends in
Common Paid-in Excess of
Shares Stock Capital Net Income Total
---------- ------ --------- ----------- -------
Shareholders' Equity at
December 31, 1996 16,073,553 2 193,229 (20,675) 172,556
Stock Option Compensation -- -- 7 -- 7
Issued Shares Common Stock -
Additional Offering 1,500,000 -- 38,632 -- 38,632
Stock Options Exercised 7,910 -- 145 -- 145
PDC Units Converted 4,264 -- 39 -- 39
Net Income for the Period -- -- -- 13,182 13,182
Dividends Paid -- -- -- (7,632) (7,632)
Dividends Accrued -- -- -- (7,633) (7,633)
---------- ------- -------- ---------- ----------
Shareholders' Equity at
June 30, 1997 17,585,727 $ 2 $232,052 $ (22,758) $ 209,296
========== ======= ======== ========== ==========
10
ITEM 2. MANANGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
--------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
OVERVIEW
The Company completed its initial public offering on January
21, 1994, and conducts all of its business operations through its
83% controlling general partner interest in Price Development
Company, Limited Partnership ("PDC").
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 the Intermountain Region, as well as in
Oregon, Washington and California. The Company's existing
portfolio consists of 45 properties, including 13 enclosed regional
malls, 24 community centers, two freestanding retail properties and
six mixed-use commercial properties.
The Company's financial condition and results of operations
were positively impacted by the Company's April 1996 acquisition of
the Grand Teton Mall and June 1997 acquisitions of Silver Lake Mall
and Visalia Mall (June 30, 1997) as well as its development
activities which added a combined 1,308,000 square feet of GLA to
the retail portfolio and 24,000 square feet of GLA to the
commercial portfolio.
The Company completed an additional public offering in January
1997, raising approximately $40.7 million in gross proceeds through
the sale of 1,500,000 shares of its Common Stock.
RESULTS OF OPERATIONS
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1997 TO SIX MONTHS
ENDED JUNE 30, 1996 (DOLLARS IN THOUSANDS)
Total revenues for the six months ended June 30, 1997
increased $1,642 or 5% to $36,992 as compared to $35,350 in 1996.
This increase is primarily attributable to a $1,059 or 4% increase
in minimum rents to $26,448 as compared to $25,389 in 1996.
Additionally, percentage and overage rents decreased $170 or 8% to
$1,992 as compared to $2,162 in 1996.
The increase in minimum rents was primarily due to the April
1996 acquisition of the Grand Teton Mall and the June 1997
acquisition of Silver Lake Mall offset somewhat by certain
unexpected vacancies in the retail and commercial properties.
Recoveries from tenants increased $719 or 10% to $8,053 as
compared to $7,334 in 1996. Operating and maintenance which
increased $86 or 2% and real estate taxes and insurance decreased
$19. This increase is mainly due to the 1996 Grand Teton Mall
property acquisition and the June 1997 acquisition of Silver Lake
Mall. Grand Teton Mall tenant recoveries and operating expenses
were $339 and $415, respectively. Recoveries from tenants as a
percentage of property operating expenses for the six months ended
June 30, 1997 were 76% compared to 78% in 1996.
Depreciation and amortization increased $229 or 4% to $6,091
as compared to $5,862 in 1996. This increase is primarily due to
the acquisitions of Grand Teton Mall and Silver Lake Mall and the
increase in newly developed GLA.
Interest expense decreased $396 or 11% to $3,166 as compared
to $3,562 in 1996. This decrease was primarily a result of paying
down borrowings with proceeds from a public offering (see Note 2).
11
COMPARISON OF THREE MONTHS ENDED JUNE 30, 1997 TO THREE MONTHS
ENDED JUNE 30, 1996 (DOLLARS IN THOUSANDS)
Total revenues for the three months ended June 30, 1997
increased $209 or 1% to $18,617 as compared to $18,408 in 1996.
This increase is attributable to a $457 or 12% increase in
recoveries from Tenants to $4,175 as compared to $3,718 in 1996.
Additionally, minimum rents increased $56 to $13,241 as compared to
$13,185 in 1996 and percentage and overage rents decreased $254 or
20% to $989 as compared to $1,243 in 1996.
The June 1997 acquisition of the Silver Lake Mall, offset by
the impact of certain unexpected vacancies in retail and commercial
properties, was the primary reason for the quarterly minimum rent
increase and to the quarterly percentage and overage rent amount.
Operating and maintenance decreased $59 or 2% and real estate
taxes and insurance increased $20 or 1%. Recoveries from tenants
as a percentage of property operating expenses for the three months
ended June 30, 1997 were 76% compared to 76% in 1996.
Depreciation increased $82 or 3% to $2,647 as compared to
$2,656 in 1996. This increase is primarily due to the acquisition
of Silver Lake Mall and the increase in newly developed GLA.
Interest expense decreased $499 or 25% to $1,490 as compared
to $1,989 in 1996. This decrease was primarily a result of paying
down borrowings with proceeds from a public offering (see Note 2).
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal uses of capital resources have
historically been for distributions, 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"), the Company is among other
things 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 June 30, 1997, the Company
declared a distribution of $.435 per share payable July 22, 1997 to
the shareholders of record as of July 8, 1997.
The Company's principal source of capital is its cash flow
from operations generated from its real estate investments. As of
June 30, 1997, the Company's cash and restricted cash amounted to
approximately $2.8 million. In addition to its cash and restricted
cash, unused capacity under its Credit Facilities totaled $16.9
million. On January 28, 1997, the Company completed an additional
public offering of 1,500,000 shares of Common Stock, raising
approximately $40.7 million in gross proceeds. The net proceeds to
the Company of approximately $38.8 million were used to pay costs
of the offering and to reduce outstanding borrowings under the
Credit Facilities by approximately $38.6 million.
The Company expects to meet its short term cash requirements,
including recurring capital expenditures related to maintenance and
improvement of existing properties, through undistributed funds
from operations, cash balances and advances under the Credit
Facilities. Exclusive of construction and development activities,
capital expenditures (both revenue and non-revenue enhancing) for
the existing properties are budgeted in 1997 to be approximately
$4.2 million.
The Company's principal long-term capital requirements include
the repayment of principal on the $95 million mortgage debt, which
matures in 2001 and requires principal payments in an amount
necessary to reduce the debt to $83.1 million as of January 21,
2000, and the retirement of outstanding balances under the Credit
Facilities.
12
An additional long-term capital need of the Company is the
construction of the regional mall in Spokane, Washington, through
its consolidated partnership, Spokane Mall Development Co. Limited.
On July 30, 1996, the consolidated partnership entered into a $50
million construction facility to meet its development and
construction needs regarding the Spokane project. Completion of
the project, which is expected to contain approximately 750,000
square feet of total GLA, is anticipated to occur in August 1997.
The Company estimates the total cost of this project will be
approximately $67 million. The difference between the estimated
cost of the project and amount of the construction facility is
comprised of cost incurred to date for the purchase of land and
payment of fees and other development costs. As of June 30, 1997
borrowings on the loan were approximately $32.4 million.
The Company has initiated the development of an enclosed
regional mall in Provo, Utah through its consolidated partnership
Provo Mall Development Co. Ltd.. The Provo project will also
represent a future long-term capital need for the Company. The
Company expects to fund this project through advances under its
Credit Facilities in combination with construction financing. The
availability of financing and the status of other projects will
influence the Company's decision to proceed with, and the pace of,
the proposed Provo project.
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 Facilities,
together with alternative funding sources.
The Company intends to incur additional borrowings in the
future in a manner consistent with its policy of maintaining a
ratio of debt-to-total market capitalization of less than 50%. The
Company's ratio of debt-to-total market capitalization was
approximately 26% at June 30, 1997.
Certain statements set forth herein contain forward-looking
statements. Although the Company believes that the expectations
reflected in such forward-looking statements are based on
reasonable assumptions, the actual results may differ materially
from that set forth in the forward-looking statements. Certain
factors that might cause such differences include those relating to
changes in economic climate, local conditions, laws and
regulations, the relative illiquidity of real property investments,
the potential bankruptcy of tenants and the development,
redevelopment or expansion of properties. Consequently, such
forward-looking statements should be regarded solely as reflections
of the Companies current operating and development plans and
estimates. These plans and estimates are subject to revision from
time to time as additional information becomes available, and
actual results may differ from those indicated in the referenced
statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -------------------------------------------------------------------
Not Applicable.
13
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
- ------------------------------
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- ----------------------------------------
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
An Annual Meeting of Stockholders was held on April 30, 1997
in Salt Lake City, Utah. At the Annual Meeting, the stockholders
voted to elect seven directors to serve on the Company's Board of
Directors until the 1998 Annual Meeting of Stockholders and to
ratify the appointment of Price Waterhouse LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997.
The following votes were cast by the stockholders of the
Company with respect to the election of directors named in the
Proxy statement:
SHARES SHARES
VOTED VOTED SHARES
FOR AGAINST ABSTAINED
----------- ---------- ----------
Mr. John Price 15,418,620 53,569 0
Mr. G. Rex Frazier 15,418,620 53,569 0
Mr. Warren P. King 15,418,620 56,569 0
Mr. James A. Anderson 15,418,620 53,569 0
Mr. Sam W. Souvall 15,418,620 53,569 0
In addition, Messrs. Albert Sussman and Allen P. Martindale
were unanimously elected to serve as directors by the holder of the
Company's 200,000 shares of Price Group Stock.
The following votes were cast by the stockholders with respect
to the resolution to ratify the Board of Director's appointment of
Price Waterhouse LLP as the Company's independent auditors for the
fiscal year ending December 31, 1997.
SHARES SHARES
VOTED VOTED SHARES
FOR AGAINST ABSTAINED
----------- ---------- ----------
15,081,105 14,800 29,683
ITEM 5. OTHER INFORMATION
- --------------------------
Not applicable.
14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION
------- -----------
3.1 Amended and Restated Articles of Incorporation
the Company (3(a))*
3.2 Amended and Restated Bylaws of the Company (3(b))**
4.1 Specimen of Common Stock Certificate (4)*
10.1 Amended and Restated Agreement of Limited Partnership
of Price Development Company, Limited Partnership
(10(a))*
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(g))*
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))*
- ----------------------------
*Documents were previously filed with the Registration Statement on
Form S-11, File No. 33-68844, under the exhibit numbered in
parentheticals, and are incorporated herein by reference.
**Documents were previously filed with the Company's first quarter
1997 10-Q 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.
15
EXHIBIT
NUMBER DESCRIPTION
------- -----------
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))*
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 June 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
June 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 June 29,
1995
vii) Reaffirmation of Guaranty dated June 29, 1995
(b) Current Reports on Form 8-K
The Company filed on July 11, 1997, a current
Report on Form 8-K dated June 30, 1997 and filed
July 11, 1997 reporting the acquisition of the
remaining 70% interest in Silver Lake Mall located
in Couer D'Alene, Idaho and the Acquisition of
Visalia Mall located in Visalia, California.
The financial statements filed were as follows:
SILVER LAKE MALL AND VISALIA MALL
Statements of Revenues and Certain Expenses for
the Year Ended December 31, 1996
Statements of Revenues and Certain Expenses for
the Three Month Period Ended March 31, 1997
and 1996 (unaudited)
Notes to Statements of Revenues and Certain Expenses
JP REALTY, INC.
Pro Forma - Unaudited:
Condensed Consolidated Balance Sheet as of
March 31, 1997
Condensed Consolidated Statement of Operations
for the Three Month Period Ended March 31,
1997 and for the Year Ended December 31, 1996
Estimated Twelve Month Pro Forma Statement
of Taxable Net Operating Income and Operating
Funds Available
- ------------------------------
*Documents were previously filed with the Registration Statement on
Form S-11, File No. 33-68844, under the exhibit numbered in
parentheticals, and are incorporated herein by reference.
**Documents were previously filed with the Company's first quarter
1997 10-Q 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.
16
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.
JP REALTY, INC.
(Registrant)
August 12, 1997 /s/ John Price
- ------------------------------ --------------------------------
(Date) John Price
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
August 12, 1997 /s/ M. Scott Collins
- ------------------------------ -------------------------------
(Date) M. SCOTT COLLINS
VICE PRESIDENT--
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL &
ACCOUNTING OFFICER)