-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nv8rED/+f9ZRxpEaEM9nAxxd95VX/uEKIdAmJvxW0sGb+SOvGoXHHu2zod7Cu0OH mAMbIB4RbebyQXw8M//WaA== 0000950152-02-008132.txt : 20021107 0000950152-02-008132.hdr.sgml : 20021107 20021107142309 ACCESSION NUMBER: 0000950152-02-008132 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20021107 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: JDN REALTY CORP CENTRAL INDEX KEY: 0000916836 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 581468053 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: 1934 Act SEC FILE NUMBER: 001-12844 FILM NUMBER: 02812361 BUSINESS ADDRESS: STREET 1: 359 EAST PACES FERRY ROAD STREET 2: STE 400 CITY: ATLANTA STATE: GA ZIP: 30305 BUSINESS PHONE: 4042623252 MAIL ADDRESS: STREET 1: 3359 EAST PACES FERRY RD STREET 2: STE 400 CITY: ATLANTA STATE: GA ZIP: 30305 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DEVELOPERS DIVERSIFIED REALTY CORP CENTRAL INDEX KEY: 0000894315 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 341723097 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 3300 ENTERPRISE PARKWAY CITY: BEACHWOOD STATE: OH ZIP: 44122 BUSINESS PHONE: 2167555500 MAIL ADDRESS: STREET 1: 3300 ENTERPRISE PARKWAY CITY: BEACHWOOD STATE: OH ZIP: 44122 425 1 l97139ae425.txt DEVELOPERS DIVERSIFIED/JDN REALTY * FORM 425 Filed by Developers Diversified Realty Corporation pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: JDN Realty Corporation Registration Statement No. 333-100889 On November 5, 2002, JDN Realty Corporation disseminated the following press release: ### FOR IMMEDIATE RELEASE Contact: Charles N. Talbert Director of Investor Relations (404) 262-3252 JDN REALTY CORPORATION ANNOUNCES THIRD QUARTER 2002 RESULTS ATLANTA, GA (November 5, 2002) - JDN Realty Corporation (NYSE: JDN) today announced results for the quarter ended September 30, 2002. For the third quarter, diluted funds from operations per share, a supplemental measure of REIT performance, was $0.30 compared with diluted funds from operations per share of $0.47 for the third quarter of 2001. Funds from operations was $10.4 million compared with funds from operations for the third quarter of 2001 of $15.5 million. Net income attributable to common shareholders was $5.9 million, or $0.17 per share on a diluted basis, compared with net income attributable to common shareholders for the third quarter of 2001 of $17.0 million, or $0.52 per share on a diluted basis. Total revenues were $25.1 million, compared with total revenues of $23.5 million for the third quarter of 2001. For the nine months ended September 30, 2002, diluted funds from operations per share was $0.94 compared with diluted funds from operations per share of $(0.37) for the nine months ended September 30, 2001. Funds from operations was $32.6 million compared with funds from operations for the nine months ended September 30, 2001 of $(11.9) million. Net income attributable to common shareholders was $17.8 million, or $0.51 per share on a diluted basis, compared with net loss attributable to common shareholders for the nine months ended September 30, 2001, of $(14.0) million, or $(0.43) per share on a diluted basis. Total revenues were $77.6 million compared with total revenues of $73.6 million for the comparable period last year. Results for the nine months ended September 30, 2001 included litigation charges of $43.8 million, or $1.34 per share. On October 4, 2002, the Company entered into an Agreement and Plan of Merger with Developers Diversified Realty Corporation (NYSE: DDR) pursuant to which the Company's common shareholders will receive 0.518 of a share of DDR common stock in exchange for each share of the Company's common stock. In addition, the Company's preferred shareholders will receive for each share of the Company's preferred stock one share of a class of DDR voting preferred stock, with similar terms and conditions as the Company's preferred stock. The Board of Directors of each of JDN and DDR has unanimously approved the transaction. The completion of this transaction, which is expected to occur in the first quarter of 2003, is subject to approval of the merger and the merger agreement by JDN shareholders, approval of the issuance of additional DDR common shares by the DDR shareholders, and other closing conditions described in the merger agreement, including JDN entering into a closing agreement with the Internal Revenue Service with respect to certain REIT qualification issues. For 2002, the Company expects funds from operations per share on a diluted basis to be in the range of $1.22 to $1.25. This range is based upon a number of assumptions for the remainder of the year, including the following: delivery of approximately $45.6 million of projects out of the development pipeline at an aggregate yield of approximately 9.60%; disposition of approximately $40.7 million in operating properties at a weighted average cap rate of 9.75%; and non-operating land sales gains of approximately $2.1 million. During the third quarter of 2002, anchor tenants of the Company opened stores in Brandon, Florida; Grandville, Michigan; St. John, Missouri; Irving, Texas; and Mesquite, Texas. These openings, including non-anchor tenant deliveries, totaled 225,057 square feet of Company-owned gross leasable area (GLA), representing an investment of approximately $29.5 million. As of September 30, 2002, the Company's development activity included 14 projects under construction containing 1.1 million square feet of Company-owned GLA, representing an investment, upon completion, of approximately $161.6 million, of which $120.0 million has already been expended. The Company sold three shopping center properties for gross proceeds of $11.4 million and sold $4.0 million of non-operating real estate for an aggregate gain of $1.3 million during the third quarter of 2002. As of September 30, 2002, the Company had executed sales contracts on three operating shopping centers or portions of operating shopping centers and 18 tracts of land, totaling $37.9 million. For the third quarter of 2002, the Company announced the following leasing and property management information: - - On a same-property basis, annualized base rent per leased square foot increased 1.7% to $8.47 as of September 30, 2002, from $8.33 as of September 30, 2001; - - At the end of the quarter, the Company's portfolio was 93.0% leased; - - 25 lease renewals took effect at an average decreased rent of 1.4%; and - - 89 tenants incurred contractual rental increases averaging 5.9%. The Company paid a cash dividend on its common stock of $0.27 per share on September 30, 2002, to shareholders of record on September 13, 2002. In addition, the Company paid a cash dividend on its 9 3/8% Series A Cumulative Redeemable Preferred Stock of $0.586 per share on September 30, 2002, to shareholders of record on September 13, 2002. JDN Realty Corporation is a real estate company specializing in the development and management of retail shopping centers. Headquartered in Atlanta, Georgia, the Company owns and operates directly or indirectly 99 properties, containing approximately 11.4 million square feet of gross leasable area, located in 20 states. The common stock and preferred stock of JDN Realty Corporation are listed on the New York Stock Exchange under the symbols "JDN" and "JDNPrA", respectively. For additional information, visit the Company's home page on the Internet at http://www.jdnrealty.com. Management has included herein certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used, statements which are not historical in nature including the words "anticipate," "estimate," "should," "expect," "believe," "intend" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are, by their nature, subject to known and unknown risks and uncertainties. Forward-looking statements include statements regarding the following: (1) expected outcome of the proposed merger; (2) expected range of FFO per share for 2002; (3) expected returns from the Company's development pipeline; (4) expected dispositions of real estate and estimated gains therefrom; and (5) amount and timing of shopping centers delivered from the development pipeline. Among the factors that could cause actual results to differ materially from those anticipated are the following, particularly in light of the proposed merger: changes in the composition of senior management; the outcome of the closing agreement with the Internal Revenue Service on certain REIT qualification issues; the ability of the Company to close the proposed merger on the expected timetable and the disclosed terms; the ability to retain key employees; business conditions and the general economy, especially as they affect interest rates and value-oriented retailers; the federal, state and local regulatory environment; the ability to refinance or extend maturing debt obligations on acceptable terms; the availability of debt and equity capital with acceptable terms and conditions including, without limitation, the availability of bank credit to fund development and redevelopment activities; the ability to sell operating shopping center properties and parcels of land as projected and upon economically favorable terms; the availability of new development opportunities; changes in the financial condition or corporate strategy of or business relations with primary retail tenants, or the loss of one or more of the Company's primary retail tenants or their ability to pay rent; the ability to fund, complete and lease existing development and redevelopment projects on schedule and within budget; and the ability of the Company to maintain its qualification as a REIT. Other risks, uncertainties and factors that could cause actual results to differ materially from those projected are detailed from time to time in press releases and reports filed by JDN Realty Corporation with the Securities and Exchange Commission, including Forms 8-K, 10-Q and 10-K. For example, see "Risk Factors" under Part I, Item 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2001. The Company assumes no obligation to publicly release any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. ADDITIONAL INFORMATION CONCERNING THE MERGER AND WHERE YOU CAN FIND IT DDR has filed a registration statement on Form S-4, containing a joint proxy statement/prospectus and other relevant documents, with the SEC concerning the proposed merger transaction between DDR and JDN. YOU ARE URGED TO READ THE REGISTRATION STATEMENT CONTAINING THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT DDR, JDN AND THE MERGER. You may obtain the registration statement containing the joint proxy statement/prospectus and other documents free of charge at the SEC's web site, www.sec.gov. In addition, you may obtain documents filed with the SEC by DDR free of charge by requesting them in writing from DDR Investor Relations, 3300 Enterprise Parkway, Beachwood, Ohio 44122, telephone: (216) 755-5500. You may obtain documents filed with the SEC by JDN free of charge by requesting them in writing from JDN Investor Relations, 359 E. Paces Ferry Road, Suite 400, Atlanta, Georgia 30305, telephone: (404) 262-3252. DDR and JDN, and their respective directors and executive officers and other members of their management and employees, may be deemed to be participants in the solicitation of proxies from the stockholders of DDR and JDN in connection with the merger. Information about the directors and executive officers of DDR and their ownership of DDR shares is set forth in the proxy statement for DDR's 2002 annual meeting of shareholders. Information about the directors and executive officers of JDN and their ownership of JDN stock is set forth in the proxy statement for JDN's 2002 annual meeting of stockholders. Investors may obtain additional information regarding the interests of such participants by reading the joint proxy statement/prospectus. ### JDN REALTY CORPORATION CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31, 2002 2001 ------------- ------------ (Unaudited) (In Thousands) ASSETS Shopping center properties, at cost: Land $ 349,019 $ 289,296 Buildings and improvements 630,576 624,759 Property under development 124,188 188,484 ------------ ------------ 1,103,783 1,102,539 Less: accumulated depreciation and amortization (98,310) (88,152) Property held for sale 37,928 -- ------------ ------------ Shopping center properties, net 1,043,401 1,014,387 Restricted cash - escrow 814 1,815 Accounts receivable 18,920 17,160 Investments in and advances to unconsolidated entities 12,178 12,628 Deferred costs, net of amortization 3,841 6,238 Other assets 13,707 13,235 ------------ ------------ $ 1,092,861 $ 1,065,463 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Unsecured notes payable $ 234,806 $ 234,759 Secured line of credit and term loan 230,000 230,000 Mortgage notes payable 141,263 96,362 Accounts payable and accrued expenses 15,224 27,633 Other liabilities 15,897 14,191 ------------ ------------ Total liabilities 637,190 602,945 Third party investors' interest 2,996 2,999 Shareholders' Equity Preferred stock, par value $.01 per share - authorized 20,000,000 shares: 9 3/8% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25 per share, issued and outstanding 2,000,000 shares in 2002 and 2001, respectively 20 20 Common stock, par value $.01 per share - authorized 150,000,000 shares, issued and outstanding 34,793,745 and 34,795,045 shares in 2002 and 2001, respectively 348 348 Paid-in capital 465,544 475,264 Accumulated other comprehensive loss (1,390) (4,266) Accumulated deficit (11,847) (11,847) ------------ ------------ 452,675 459,519 ------------ ------------ $ 1,092,861 $ 1,065,463 ============ ============
JDN REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended September 30, 2002 2001 ------- ------- (In thousands) Revenues: Minimum and percentage rates $21,457 $20,202 Recoveries from tenants 3,425 3,182 Other revenue 171 77 ------- ------- Total revenues 25,053 23,461 Operating expenses: Operating and maintenance 2,321 2,269 Real estate taxes 2,421 1,820 General and administrative 2,932 2,607 Impairment loss -- 1,002 Depreciation and amortization 5,317 5,201 Settlement expense -- (3,825) ------- ------- Total operating expenses 12,991 9,074 ------- ------- Income from operations 12,062 14,387 Other income (expense): Interest expense, net (8,516) (7,347) Other income (expense), net 256 (196) Equity in net income (loss) of unconsolidated entities 154 (1) ------- ------- Income from continuing operations before minority interest in net income of consolidated subsidiaries and net gain on real estate sales 3,956 6,843 Minority interest in net income of consolidated subsidiaries (38) (46) ------- ------- Income from continuing operations before net gain on real estate sales 3,918 6,797 Net gain on real estate sales Depreciated -- 7,393 Undepreciated 1,332 2,788 ------- ------- Income from continuing operations 5,250 16,978 Discontinued operations: Income from operating properties sold or held for sale 717 1,160 Gain on disposal of depreciated properties 1,087 -- ------- ------- Net income 7,054 18,138 Dividends to preferred shareholders (1,172) (1,172) ------- ------- Net income attributable to common shareholders $ 5,882 $16,966 ======= ======= Income per common share - basic: Income from continuing operations (net of preferred dividends) $ 0.12 $ 0.48 Discontinued operations 0.05 0.04 ------- ------- Net income attributable to common shareholders $ 0.17 $ 0.52 ======= ======= Income per common share - diluted: Income from continuing operations (net of preferred dividends) $ 0.12 $ 0.48 Discontinued operations 0.05 0.04 ------- ------- Net income attributable to common shareholders $ 0.17 $ 0.52 ======= ======= Dividends per common share $ 0.27 $ 0.27 ======= =======
JDN REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Nine Months Ended September 30, 2002 2001 -------- -------- (In thousands) Revenues: Minimum and percentage rents $ 63,041 $ 62,297 Recoveries from tenants 11,142 10,468 Other revenue 3,430 782 -------- -------- Total revenues 77,613 73,547 Operating expenses: Operating and maintenance 7,204 7,620 Real estate taxes 7,150 5,556 General and administrative 8,735 8,709 Corporate investigation and legal costs -- 982 Impairment loss 200 1,323 Depreciation and amortization 15,528 15,433 Settlement expense -- 43,785 -------- -------- Total operating expenses 38,817 83,408 -------- -------- Income (loss) from operations 38,796 (9,861) Other income (expense): Interest expense, net (24,276) (23,562) Other income (expense), net (1,238) 203 Equity in net income (loss) of unconsolidated entities 411 (358) -------- -------- Income (loss) from continuing operations before minority interest in net income of consolidated subsidiaries and net gain on real estate sales 13,693 (33,578) Minority interest in net income of consolidated subsidiaries (116) (130) -------- -------- Income (loss) from continuing operations before net gain on real estate sales 13,577 (33,708) Net gain on real estate sales Depreciated -- 16,673 Undepreciated 2,781 5,323 -------- -------- Income (loss) from continuing operations 16,358 (11,712) Discontinued operations: Income from operating properties sold or held for sale 2,796 3,480 Gain on disposal of depreciated properties, net of impairment loss 1,615 (320) Gain on disposal of undepreciated properties 730 -- -------- -------- Income (loss) before extraordinary item and cumulative effect of change in accounting principle 21,499 (8,552) Extraordinary item -- (1,608) -------- -------- Income (loss) before cumulative effect of change in accounting principle 21,499 (10,160) Cumulative effect of change in accounting principle (172) (280) -------- -------- Net income (loss) 21,327 (10,440) Dividends to preferred shareholders (3,516) (3,516) -------- -------- Net income (loss) attributable to common shareholders $ 17,811 $(13,956) ======== ======== Income (loss) per common share - basic: Income (loss) from continuing operations (net of preferred dividends) $ 0.37 $ (0.47) Discontinued operations 0.15 0.10 Extraordinary item -- (0.05) Cumulative effect of change in accounting principle (0.01) (0.01) -------- -------- Net income (loss) attributable to common shareholders $ 0.51 $ (0.43) ======== ======== Income (loss) per common share - diluted: Income (loss) from continuing operations (net of preferred dividends) $ 0.37 $ (0.47) Discontinued operations 0.15 0.10 Extraordinary item -- (0.05) Cumulative effect of change in accounting principle (0.01) (0.01) -------- -------- Net income (loss) attributable to common shareholders $ 0.51 $ (0.43) ======== ======== Dividends per common share $ 0.81 $ 0.87 ======== ========
JDN REALTY CORPORATION FUNDS FROM OPERATIONS CALCULATION FUNDS AVAILABLE FOR DISTRIBUTION CALCULATION
(Dollars in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2002 2001 2002 2001 -------------- -------------- ------------- -------------- FUNDS FROM OPERATIONS: Net income (loss) attributable to common shareholders $ 5,882 $ 16,966 $ 17,811 $ (13,956) Depreciation of real estate assets 4,796 5,037 14,760 14,987 Amortization of tenant allowances and tenant improvements 117 113 338 330 Amortization of deferred leasing costs 254 212 703 623 Impairment losses on operating shopping centers -- 522 -- 818 Net gain on real estate sales -- (7,393) -- (16,673) Gain on disposal of operating properties, net of impairment loss (1,087) -- (1,615) -- Extraordinary items -- -- -- 1,608 Change in accounting principle -- -- 172 280 Adjustments related to activities in unconsolidated entities 231 10 460 44 -------------- -------------- ------------- -------------- FFO $ 10,373 $ 15,467 $ 32,629 $ (11,939) ============== ============== ============= ============== Weighted average common shares outstanding (in thousands): Basic 34,627 32,591 34,600 32,560 ============== ============== ============= ============== Diluted 34,737 32,699 34,738 32,560 ============== ============== ============= ============== FFO per common shares: Basic $ 0.30 $ 0.47 $ 0.94 $ (0.37) ============== ============== ============= ============== Diluted $ 0.30 $ 0.47 $ 0.94 $ (0.37) ============== ============== ============= ============== FUNDS AVAILABLE FOR DISTRIBUTION: FFO $ 10,373 $ 15,467 $ 32,629 $ (11,939) Adjustments: Amortization of deferred loan costs 1,166 1,080 3,443 3,563 Other depreciation and amortization 174 195 518 563 Straight-line rent (353) (252) (1,069) (836) Tenant allowances, tenant improvements and leasing commissions (242) (149) (369) (241) Building improvements (112) (107) (568) (697) -------------- -------------- ------------- -------------- Funds available for distribution $ 11,006 $ 16,234 $ 34,584 $ (9,587) ============== ============== ============= ============== Funds available for distribution per common share: Basic $ 0.32 $ 0.50 $ 1.00 $ (0.29) ============== ============== ============= ============== Diluted $ 0.32 $ 0.50 $ 1.00 $ (0.29) ============== ============== ============= ============== Dividends per common share $ 0.27 $ 0.27 $ 0.81 $ 0.87 ============== ============== ============= ============== Payout ratio of FFO: Basic 90.1% 56.9% 85.9% -237.3% ============== ============== ============= ============== Diluted 90.4% 57.1% 86.2% -237.3% ============== ============== ============= ============== Payout ratio of funds available for distribution: Basic 84.9% 54.2% 81.0% -295.5% ============== ============== ============= ============== Diluted 85.2% 54.4% 81.4% -295.5% ============== ============== ============= ==============
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