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 OCTOBER 31, 1996
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 1-8459
NEW PLAN REALTY TRUST AND SUBSIDIARIES
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 13-1995781
(State or other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
1120 Avenue of the Americas, New York, New York 10036
(Address of Principal Executive Office) (Zip Code)
212-869-3000
Registrant's Telephone Number
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
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
The number of shares outstanding at December 2, 1996 was
58,291,121.
Total number of pages 12
<PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED OCTOBER 31,
(UNAUDITED)
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
REVENUES 1996 1995
- -------- ----- -------
Rental and
related revenues $ 46,618 $ 36,463
Interest and dividend
income 1,165 1,332
------- --------
47,783 37,795
------- --------
OPERATING EXPENSES
- ------------------
Operating costs 11,487 8,421
Leasehold rents 165 168
Real estate and other
taxes 4,447 3,293
Interest expense 5,861 4,046
Depreciation and amortization 5,686 4,523
Provision for doubtful accounts,
net of recoveries (Note C) 567 324
------ ------
TOTAL OPERATING EXPENSES 28,213 20,775
------ ------
19,570 17,020
Administrative expenses 494 747
------- --------
INCOME BEFORE GAIN ON SALE
OF SECURITIES 19,076 16,273
Gain on sale of securities, net -- 1
-------- --------
NET INCOME $ 19,076 $ 16,274
======== ========
NET INCOME PER SHARE $ .33 $ .31
DIVIDENDS PER SHARE $ .355 $ .345
WEIGHTED AVERAGE SHARES
OUTSTANDING 58,132 53,320
See accompanying notes to consolidated financial statements.
<PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
OCTOBER 31, JULY 31,
1996 1996
(UNAUDITED)
----------- --------
ASSETS
Real estate, at cost
Land $ 193,516 $ 174,712
Buildings and improvements 886,092 803,230
----------- ----------
1,079,608 977,942
Less accumulated depreciation
and amortization 88,129 82,524
---------- ----------
991,479 895,418
Cash and cash equivalents 23,408 4,300
Marketable securities 2,264 2,096
Mortgages and notes receivable 23,586 23,598
Receivables
Trade and notes, net of allowance
for doubtful accounts 12,030 11,586
Other 1,019 1,109
Prepaid expenses and deferred charges 7,936 5,084
Other assets 2,653 2,203
------- -------
TOTAL ASSETS $ 1,064,375 $ 945,394
============= ==========
LIABILITIES
- -----------
Mortgages payable $ 48,842 $ 48,936
Credit facility -- 19,500
Notes payable, net of unamortized discount 322,525 189,490
Other liabilities 27,440 24,984
Tenants' security deposits 3,645 3,130
-------- ---------
TOTAL LIABILITIES 402,452 286,040
========= =========
COMMITMENTS AND CONTINGENCIES
- -----------------------------
SHAREHOLDERS' EQUITY
- --------------------
Preferred shares, par value $1.00,
authorized 1,000,000 shares; none issued
Shares of beneficial interest without par
value, unlimited authorization; issued
and outstanding (October 31, 1996 -
58,256,652; July 31, 1996 - 58,069,362) 722,961 719,080
Less loans receivable for the purchase of
shares of beneficial interest 3,057 3,083
Add unrealized gain on securities reported
at fair value 843 643
------ -------
720,747 716,640
Less distributions in excess of net
income 58,824 57,286
------ ------
TOTAL SHAREHOLDERS' EQUITY 661,923 659,354
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 1,064,375 $945,394
=========== ========
See accompanying notes to consolidated financial statements.
<PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED OCTOBER 31,
(UNAUDITED)(IN THOUSANDS)
1996 1995
OPERATING ACTIVITIES ---- ----
- --------------------
Net Income $19,076 $16,274
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 5,686 4,523
Gain on sale of securities, net -- (1)
------- ------
24,762 20,796
Changes in operating assets and liabilities, net
Increase in trade and notes receivable (675) (1,735)
Decrease/(Increase) in other receivables 90 (60)
Increase in allowance for doubtful accounts 231 265
Increase in other liabilities 2,456 1,107
Increase in net sundry assets and
liabilities (2,833) (2,362)
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 24,031 18,011
------- -------
INVESTING ACTIVITIES
- --------------------
Sales of marketable securities 32 740
Purchase and improvement of properties (101,666) (29,951)
Repayment of mortgage notes receivable 12 250
-------- -------
NET CASH USED IN INVESTING ACTIVITIES (101,622) (28,961)
-------- --------
FINANCING ACTIVITIES
- --------------------
Distributions to shareholders (20,614) (18,377)
Proceeds from the dividend reinvestment plan 3,785 3,602
Proceeds from the exercise of stock options 96 164
Repayment of short-term debt (19,500) --
Proceeds from the sale of notes 133,000 --
Principal payments on mortgages (94) (139)
Repayment of loans receivable for the purchase
of shares of beneficial interest 26 110
------- -------
NET CASH PROVIDED BY/(USED IN)
FINANCING ACTIVITIES 96,699 (14,640)
------- --------
INCREASE/(DECREASE) IN CASH AND
CASH EQUIVALENTS 19,108 (25,590)
Cash and cash equivalents at beginning of year 4,300 51,889
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $23,408 $26,299
======= =======
See accompanying notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
Note A:
The accompanying unaudited condensed consolidated financial
statements have been prepared by the Trust pursuant to the rules
of the Securities and Exchange Commission ("SEC") and, in the
opinion of the Trust, include all adjustments (consisting of
normal recurring adjustments) necessary for a fair presentation
of financial position, results of operations and cash flows in
accordance with generally accepted accounting principles.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such SEC rules. The Trust believes that the
disclosures made are adequate to make the information presented
not misleading. The consolidated statements of income for the
three month periods ended October 31, 1996 and 1995 are not
necessarily indicative of the results expected for the full year.
These financial statements should be read in conjunction with the
audited financial statements and notes thereto included in the
Trust's latest annual report on Form 10-K.
Note B: Supplemental Cash Flow Information
State and local income taxes paid for the three months ended
October 31, 1996 and 1995 were none and $1,000, respectively.
Interest paid for the three months ended October 31, 1996 and
1995 was $5,260,000 and $4,747,000, respectively.
Interest costs capitalized for the three months ended October 31,
1996 were $198,000.
Note C: Provision for Doubtful Accounts
The provision for doubtful accounts is net of recoveries. For
the three months ended October 31, 1996 and 1995, recoveries were
$16,000 and $260,000, respectively.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
I. Liquidity and Capital Resources
On October 31, 1996 the Trust had approximately $25.7
million in available cash, cash equivalents and marketable
securities.
During the three month period ended October 31, 1996, the
Trust paid approximately $94.9 million to acquire two
shopping centers (212,000 gross leasable square feet) and 11
apartment properties (2,368 units).
Debt at October 31, 1996 consisted of $48.8 million of
mortgages payable and $322.5 million of notes payable.
During the quarter ended October 31, 1996, the Trust sold
four issues of unsecured notes totaling $133 million. Two
of the issues, $10 million and $49 million, have maturities
of two and three years, respectively, and have variable
interest rates. The other issues, $49 million and $25
million, mature in 30 years and carry interest rates of
5.95% and 7.65% respectively. In addition, the $49 million
note, at the option of the holder, is repayable at face
value on November 2, 1998 and November 2, 2006. In November
1996 additional unsecured notes of $20 million due in 30
years with an interest rate of 7.68% were issued. The Trust
also filed a $350 million shelf registration in November
1996 allowing it to issue additional equity or debt and as
part of the shelf registration commenced a $175 million
medium term note program in December 1996.
In October 1996 the Trust concluded an unsecured revolving
credit agreement with The Bank of New York which provides
for up to $50 million in borrowing until October 28, 1997.
There are restrictive covenants that limit total
indebtedness to 50% of total capitalization, mortgage debt
to 40% of total capitalization. The credit agreement also
requires a minimum interest coverage ratio of 2 to 1 and a
minimum tangible net worth of $500 million.
The Trust's dividend reinvestment program provided $3.8
million during the three month period ended October 31,
1996. In addition, the Trust made dividend distributions of
$20.6 million to shareholders and paid $6.8 million for
improvements to existing properties and the construction of
the Six Flags Outlet Center in Jackson Township, N.J. Six
Flags will open later in the fiscal year.
Funds from operations, defined as net income plus
depreciation and amortization of real estate less gains from
asset sales, increased $4.0 million to $24.8 million shares
($.43/share) from $20.8 million ($.39/share) in the prior
year's comparable three month period.
II. Results of operations for the three months ended October 31,
1996 and 1995
A. Revenues
Total revenues increased approximately $10.0 million to
$47.8 million. The increase came primarily as a result
of the acquisition of 32 properties since July 1995.
B. Operating Expenses
Operating costs and leasehold rents increased
approximately $3.1 million to $11.7 million, reflecting
the acquisition of properties.
Real estate and other taxes increased approximately
$1.2 million to $4.4 million. The principal reason for
this increase was the larger portfolio of properties.
Interest expense increased approximately $1.8 million
to $5.9 million. This increase was due to the
issuance, since November 1995, of $143 million of notes
which were used to fund the Trust's property
acquisition program.
Depreciation and amortization of properties increased
approximately $1.2 million to $5.7 million. This
increase was the result of the acquisition of
properties.
Provision for doubtful accounts, net of recoveries,
increased $243,000 to $567,000. This was due primarily
to a decrease in the amount of bad debt recovery.
C. Administrative Expenses
Administrative expenses as a percent of revenue
declined to 1% from 2%. This was due to increased
revenue from newly acquired properties. These costs do
not change in direct proportion to revenues due to
economies of scale.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
Exhibit 11 - Statement Regarding Computation of
Per Share Earnings
Exhibit 12.1 - Ratio of Earnings to Fixed Charges
Exhibit 12.2 - Calculation of Ratio of Earnings to
Fixed Charges Three Months Ended
October 31, 1996
Exhibit 27 - Financial Data Schedule (This
exhibit is filed for EDGAR filing
purposes only.)
(b) During the period covered by this report the Trust
filed the following:
1. Form 8-K dated August 19, 1996. This report
contained items 5 and 7.
SIGNATURE
---------
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.
Dated: December 12, 1996
NEW PLAN REALTY TRUST
By:/s/ Michael I. Brown
--------------------
MICHAEL I. BROWN
Chief Financial Officer,
Controller<PAGE>
EXHIBIT INDEX
Number Description Page
- ------ ----------- ----
11 Statement Regarding Computation
of Per Share Earnings 10
12.1 Ratio of Earnings to Fixed Charges 11
12.2 Calculation of Ratio of Earnings
to Fixed Charges 12
27 Financial Data Schedule
STATEMENT REGARDING COMPUTATION
OF PER SHARE EARNINGS
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
For The Three Months
Ended 10/31/96
Primary EPS Fully Diluted
----------- -------------
1. PROCEEDS UPON EXERCISE OF OPTIONS $41,345 $41,345
2. MARKET PRICE OF SHARES
CLOSING $21.625
AVERAGE $21.223
5. TREASURY SHARES PURCHASEABLE FROM
OPTION PROCEEDS 1,948 1,912
6. OPTION SHARES OUTSTANDING 2,094 2,094
7. COMMON STOCK EQUIVALENTS (EXCESS SHARES
UNDER OPTION OVER TREASURY SHARES THAT
COULD BE REPURCHASED) 146 182
8. AVERAGE NUMBER OF SHARES OUTSTANDING 58,132 58,132
9. TOTAL OF COMMON AND COMMON EQUIVALENT
SHARES 58,278 58,314
10. NET INCOME FOR THE PERIOD $19,076 $19,076
11. EARNINGS PER SHARE .33 .33
12. REPORTED EARNINGS PER SHARE Not Applicable
EXHIBIT 12.1
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to
fixed charges for the periods indicated:
1992 1993 1994 1995 1996 3 Months ended
- ---- ---- ---- ---- ---- 10/31/96
--------------
28.5 23.6 17.0 8.1 4.9 4.1
To date, the Trust has not issued any preferred shares;
therefore, the ratio of earnings to combined fixed charges and
preferred share dividends are unchanged from the ratios presented
in this section. For purposes of computing these ratios,
earnings have been calculated by adding fixed charges (excluding
capitalized interest) to income (loss) before income taxes and
extraordinary items. Fixed charges consist of interest costs,
whether expensed or capitalized, the interest component of rental
expense, if any, and amortization of debt discounts and issue
costs, whether expensed or capitalized.
EXHIBIT 12.2
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
THREE MONTHS ENDED OCTOBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS)
EARNINGS:
Net income $19,076
Interest expense 5,861
Other adjustments 201
-------
$25,138
=======
FIXED CHARGES:
Interest expense $ 5,861
Capitalized interest 198
Other adjustments 81
-------
$ 6,140
=======
RATIO OF EARNINGS TO FIXED CHARGES 4.1
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This Schedule contains summary financial information
extracted from the consolidated balance sheets and consolidated
statements of income and is qualified in its entirety by
reference to such financial statements.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> OCT-31-1996
<CASH> 23,408
<SECURITIES> 2,264
<RECEIVABLES> 12,030
<ALLOWANCES> 4,207
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,079,608
<DEPRECIATION> 88,129
<TOTAL-ASSETS> 1,064,376
<CURRENT-LIABILITIES> 0
<BONDS> 371,368
<COMMON> 719,904
0
0
<OTHER-SE> (57,981)
<TOTAL-LIABILITY-AND-EQUITY> 1,064,376
<SALES> 0
<TOTAL-REVENUES> 47,783
<CGS> 0
<TOTAL-COSTS> 21,784
<OTHER-EXPENSES> 494
<LOSS-PROVISION> 567
<INTEREST-EXPENSE> 5,861
<INCOME-PRETAX> 19,076
<INCOME-TAX> 0
<INCOME-CONTINUING> 19,076
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,076
<EPS-PRIMARY> .33
<EPS-DILUTED> .33
</TABLE>
