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 JANUARY 31, 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 1-8459
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 February 28, 1997 was
58,527,819.
Total number of pages 15
<PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
THREE MONTHS SIX MONTHS
ENDED ENDED
JANUARY 31, JANUARY 31,
1997 1996 1997 1996
REVENUES ---- ---- ---- ----
Rental income and
related revenues $50,047 $39,935 $96,665 $76,398
Interest and dividend
income 1,100 1,588 2,265 2,920
_______ _______ _______ _______
51,147 41,523 98,930 79,318
_______ _______ _______ _______
OPERATING EXPENSES
Operating costs 12,638 9,868 24,125 18,289
Leasehold rents 160 159 325 327
Real estate and
other taxes 4,580 3,976 9,027 7,269
Interest expense 7,085 4,410 12,946 8,456
Depreciation and
amortization 6,181 4,779 11,867 9,302
Provision for doubtful
accounts,
net of recoveries
(Note C) 976 410 1,543 734
_______ _______ _______ _______
TOTAL OPERATING
EXPENSES 31,620 23,602 59,833 44,377
_______ _______ _______ _______
Administrative
expenses 504 691 998 1,438
_______ _______ _______ _______
INCOME BEFORE GAIN
ON SALE
OF PROPERTY AND
SECURITIES 19,023 17,230 38,099 33,503
Gain on sale of
property 69 782 69 782
Gain on sale of
securities, net -- 1
_______ _______ _______ _______
NET INCOME $19,092 $18,012 $38,168 $34,286
======= ======= ======= =======
NET INCOME PER SHARE $.33 $.31 $.66 $.62
DIVIDENDS PER SHARE $.3575 $.3475 $.7125 $.6925
WEIGHTED AVERAGE SHARES
OUTSTANDING 58,337 56,942 58,235 55,131
See accompanying notes to consolidated financial statements.
<PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)
JANUARY 31, JULY 31,
1997 1996
----------- ---------
ASSETS
Real estate, at cost
Land $ 202,317 $ 174,712
Buildings and improvements 917,429 803,230
------- -------
1,119,746 977,942
Less accumulated depreciation
and amortization 93,869 82,524
------- -------
1,025,877 895,418
Cash and cash equivalents 24,755 4,300
Marketable securities 2,344 2,096
Mortgages and notes receivable 22,430 23,598
Receivables:
Trade and notes, net of allowance
for doubtful accounts 12,253 11,586
Other 995 1,109
Prepaid expenses and deferred charges 9,119 5,084
Other assets 2,427 2,203
------- ------
TOTAL ASSETS $1,100,200 $ 945,394
========== ==========
LIABILITIES
Mortgages payable $ 58,847 $ 48,936
Credit facility --- 19,500
Notes payable, net of unamortized discount 342,560 189,490
Other liabilities 28,252 24,984
Tenants' security deposits 3,890 3,130
---------- ---------
TOTAL LIABILITIES 433,549 286,040
---------- ---------
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 (January 31, 1997 -
58,525,019; July 31, 1996 -
58,069,362) 729,110 719,080
Less loans receivable for the
purchase of shares of beneficial
interest 2,903 3,083
Add unrealized gain on securities
reported at fair value 1,024 643
727,231 716,640
Less distributions in excess of net income 60,580 57,286
------ -------
TOTAL SHAREHOLDERS' EQUITY 666,651 659,354
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,100,200 $ 945,394
See accompanying notes to consolidated financial statements.
<PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JANUARY 31,
(UNAUDITED)(IN THOUSANDS)
1997 1996
OPERATING ACTIVITIES
Net Income $ 38,168 $ 34,286
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 11,867 9,302
Gain on sale of property (69) (782)
Gain on sale of securities, net --- (1)
------- ------
49,966 42,805
Changes in operating assets and liabilities, net
Increase in trade and notes receivable (1,709) (4,151)
Decrease/(Increase) in other receivables 114 (352)
Increase in allowance for doubtful accounts 1,042 469
Increase in other liabilities 3,268 2,659
Increase in net sundry assets and liabilities (3,594) (2,278)
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 49,087 39,152
INVESTING ACTIVITIES
Sale of marketable securities 132 2,162
Net proceeds from the sale of property 1,161 3,052
Purchase and improvement of properties (133,151) (117,712)
Repayment of mortgage notes receivable 1,168 500
NET CASH USED IN INVESTING ACTIVITIES (130,690) (111,998)
--------- ---------
FINANCING ACTIVITIES
Distributions to shareholders (41,463) (38,359)
Issuance of shares of beneficial interest
pursuant to a public offering --- 81,228
Proceeds from the dividend reinvestment plan 7,978 7,681
Proceeds from the exercise of stock options 2,052 164
Repayment of short-term debt (19,500) ---
Proceeds from the sale of notes 153,000 ---
Principal payments on mortgages (189) (239)
Repayment of mortgages --- (3,617)
Repayment of loans receivable for the purchase
of share of beneficial interest 180 114
----- ------
NET CASH PROVIDED BY/(USED IN)
FINANCING ACTIVITIES 102,058 46,972
------- ------
INCREASE/(DECREASE) IN CASH EQUIVALENTS 20,455 (25,874)
Cash and cash equivalents at beginning of year 4,300 51,889
------ --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 24,755 $ 26,015
======= ========
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 and six month periods ended January 31, 1997 and 1996
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 six months ended
January 31, 1997 were $820,000. There were no state and local
taxes paid for the six months ended January 31, 1996.
Interest paid, net of amounts capitalized, for the six months
ended January 31, 1997 and 1996 was $9,960,000 and $8,085,000,
respectively.
Interest costs capitalized for the six months ended January 31,
1997 and 1996 were $498,000 and $70,000, respectively.
The Trust entered into the following non-cash investing and
financing activities (in thousands) for the six months ended
January 31,
1997 1996
Mortgage obligations assumed upon the
purchase of property $10,100 $21,500<PAGE>
Note C: Provision for Doubtful Accounts
The provision for doubtful accounts is net of recoveries. For
the six months ended January 31, 1997 and 1996, recoveries were
$112,000 and $340,000, respectively. For the three months ended
January 31, 1997 and 1996, recoveries were $96,000 and $79,000,
respectively.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
I. Liquidity and Capital Resources
On January 31, 1997 the Trust had approximately $27.1
million in available cash, cash equivalents and marketable
securities.
During the six month period ended January 31, 1997, the
Trust paid approximately $119.4 million in cash to acquire
five shopping centers (723,000 gross leasable square feet)
and ten apartment properties (2,686 units). In addition,
$13.8 million was paid for improvements to existing
properties and the construction of the Six Flags Outlet
Center.
Debt at January 31, 1997 consisted of $58.8 million of
mortgages payable and $342.6 million of notes payable.
During the six months ended January 31, 1997, the Trust sold
six issues of unsecured notes totaling $153 million. Two of
the issues, $10 million and $49 million, have maturities of
two and three years, respectively, and have variable
interest rates. Four other issues, $49 million, $25
million, and two issues of $10 million each, mature in 30
years and carry interest rates of 5.95%, 7.65% and 7.68%,
respectively. In addition, the 30 year $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 the
Trust filed a $350 million shelf registration 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.
The Trust's dividend reinvestment program generated
approximately $8.0 million during the six month period ended
January 31, 1997. In addition, during such period the Trust
made dividend distributions of $41.5 million to
shareholders.
Funds from operations, defined as net income plus
depreciation and amortization of real estate less gains from
asset sales, increased $7.2 million to $50.0 million
($.86/share) from $42.8 million ($.78/share) in the prior
year's comparable six month period.
<PAGE>
II. Results of operations for the six months ended January 31,
1997 and 1996
A. Revenues
Total revenues increased approximately $19.6 million to
$98.9 million. The increase came primarily as a result
of the acquisition of 36 properties since July 31,
1995.
B. Operating Expenses
Operating costs and leasehold rents increased
approximately $5.8 million to $24.5 million, reflecting
the acquisition of properties.
Real estate and other taxes increased approximately
$1.8 million to $9.0 million. The principal reason for
this increase was the larger portfolio of properties.
Interest expense increased approximately $4.5 million
to $12.9 million. This increase was due to the
issuance, since November 1995, of $163 million of notes
which were used to fund the Trust's property
acquisition program.
Depreciation and amortization of properties increased
approximately $2.6 million to $11.9 million. This
increase was the result of the acquisition of
properties.
Provision for doubtful accounts, net of recoveries,
increased $.8 million to $1.5 million. This was due
primarily to an increase in delinquencies.
C. Administrative Expenses
Administrative expenses as a percent of revenue
declined to 1% from 1.8%. This was due to increased
revenue from newly acquired properties. Administrative
costs do not change in direct proportion to revenues
due to economies of scale.
D. Gain on Sale of Property and Securities
During the current period the Trust sold a shopping
center in Annville, Pennsylvania. The gain was
$69,000. In the prior year's comparable period, the
sale of a shopping center in Chinoe, Kentucky resulted
in a gain of $782,000.
<PAGE>
III. Results of operations for the three months ended January 31,
1997 and 1996
A. Revenues
Total revenues increased approximately $9.6 million to
$51.1 million. The increase was a result of the
acquisition of 33 properties since October 31, 1995.
B. Operating Expenses
Operating costs and leasehold rents increased
approximately $2.8 million to $12.8 million, reflecting
the acquisition of properties.
Real estate and other taxes increased approximately $.6
million to $4.6 million. The principal reason for this
increase was the larger portfolio of properties.
Interest expense increased approximately $2.7 million
to $7.1 million. This increase was due to the
issuance, since November 1995, of $163 million of notes
which were used to fund the Trust's property
acquisition program.
Depreciation and amortization of properties increased
approximately $1.4 million to $6.2 million. This
increase was the result of the acquisition of
properties.
Provision for doubtful accounts, net of recoveries,
increased $.6 million to $1.0 million. This was due
primarily to an increase in delinquencies.
C. Administrative Expenses
Administrative expenses as a percent of revenue
declined to 1% from 1.7%. This was due to increased
revenue from newly acquired properties. Administrative
costs do not change in direct proportion to revenues
due to economies of scale.
D. Gain on Sale of Property and Securities
During the current period the Trust sold a shopping
center in Annville, Pennsylvania. The gain was
$69,000. In the prior year's comparable period, the
sale of a shopping center in Chinoe, Kentucky resulted
in a gain of $782,000.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
An annual meeting of shareholders was held on December 10,
1996. Proxies for the meeting were solicited by the registrant
pursuant to Regulation 14 under the Securities Exchange Act of
1934; there was no solicitation in opposition to management's
nominees as listed in the proxy statement and all of such
nominees were elected.
Election of Trustees:
(a) Votes of 50,532,286.598 shares were cast for the
election of Norman Gold as a Trustee; votes of
491,833.827 were withheld.
(b) Votes of 50,533,354.036 shares were cast for the
election of Dean Bernstein as a Trustee; votes of
490,766.389 were withheld.
(c) Votes of 50,548,028.866 shares were cast for the
election of James M. Steuterman as a Trustee;
votes of 476.091.559 were withheld.
There were no abstentions or broker non-votes in connection
with this proposal.
<PAGE>
Item 5. Other Information
(Unaudited) Pro Forma Financial Information
The Trust acquired five shopping centers and ten apartment
complexes during the six months ended January 31, 1997. The pro
forma financial information for the six months ended January 31,
1997 shown below is based on historical statements of the Trust
after giving effect to the acquisitions as if such acquisitions
took place on August 1, 1996. The approximately $129.5 million
aggregate acquisition cost included an existing mortgage and
$119.4 million in cash.
The pro forma financial information is presented for
informational purposes only and may not be indicative of results
that would have actually occurred if the acquisitions had been in
effect on the date indicated. Also, they may not be indicative
of the results that may be achieved in the future. The pro forma
financial information should be read in connection with the
Trust's annual report in Form 10-K for the year ended July 31,
1996 and the unaudited Financial Statement included in this Form
10-Q.
NEW PLAN REALTY TRUST AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
SIX MONTHS ENDED JANUARY 31, 1997
(In thousands except for per share amounts)
PRO
FORMA
AS HISTORICAL PRO FORMA OTHER AS
REPORTED ACQUISITION(1) ADJUSTMENTS ADJUSTMENTS ADJUSTED
---------- ------------- ----------- ----------- --------
REVENUES:
RENTAL
REVENUES $96,665 $ 3,805 $ 219(5) $100,689
INTEREST
AND
DIVIDENDS 2,265 ($1,422)(2) 843
TOTAL REVENUE 98,930 3,805 (1,422) 219 101,532
OPERATING
EXPENSES:
OPERATING
COST 35,020 1,235 36,255
INTEREST EXPENSE 12,946 141 (3) 13,087
DEPRECIATION
EXPENSE 11,867 415 (4) 12,282
TOTAL OPERATING
EXPENSES 59,833 1,235 556 61,624
OTHER DEDUCTIONS 998 998
OTHER INCOME 69 69
NET INCOME $38,168 $ 2,570 ($1,978) $ 219 $ 38,979
NET INCOME PER
SHARE $ .66 $ .67
AVERAGE SHARES
OUTSTANDING 58,235 58,235
Notes:
(1) Represents historical results of acquired properties for the period
prior to acquisition.
(2) The Pro Forma Adjustment resulting in a reduction of interest and
dividend revenue is due to use of cash to acquire these properties.
The interest rate used was 4%.
(3) The Pro Forma Adjustment for interest expense is a result of the
assumption of a mortgage upon the acquisition of a property for the
period that predates the acquisition of the property.
(4) The Pro Forma Adjustment for depreciation is an estimate of the
depreciation expense for the portion of the six month period that
predates the Trust's ownership.
(5) Other Adjustments are a result of revenue from leases executed
after the acquisition.<PAGE>
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
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 and filed November 4, 1996.
This report contains items 2 and 7.
2. Form 8-K dated and filed December 12, 1996.
This report contains items 5 and 7.
3. Form 8-K dated and filed January 6, 1997.
This report contains items 2 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: March 10, 1997
NEW PLAN REALTY TRUST
By:/s/ Michael I. Brown
---------------------
MICHAEL I. BROWN
Chief Financial Officer,
Controller
EXHIBIT INDEX
Number Description Page
11 Statement Regarding Computation
of Per Share Earnings 13
12.1 Ratio of Earnings to Fixed Charges 14
12.2 Calculation of Ratio of Earnings
to Fixed Charges 15
27 Financial Data Schedule
EXHIBIT 11
STATEMENT REGARDING COMPUTATION
OF PER SHARE EARNINGS
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
For The Six Months
Ended 1/31/97
Primary EPS Fully Diluted
----------- -------------
Option shares assumed to be exercised 2,002 2,002
Proceeds upon exercise of options $39,657 $39,657
Market price of shares
Closing $23.875
Average $22.615
Treasury shares purchasable from
option proceeds 1,754 1,661
Common stock equivalents (excess
shares under option over treasury
shares thatcould be repurchased) 248 341
Average number of shares outstanding 58,235 58,235
Total of common and common equivalent
shares 58,483 58,576
Net income for the period $38,168 $38,168
Earnings per share $.65 $.65
Reported earnings per share $.66 Not Applicable
<PAGE>
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:
6 months
ended
1992 1993 1994 1995 1996 1/31/97
- ---- ---- ---- ---- ---- ---------
28.5 23.6 17.0 8.1 4.9 3.8
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
SIX MONTHS ENDED JANUARY 31, 1997
(DOLLAR AMOUNTS IN THOUSANDS)
EARNINGS:
Net income $38,168
Interest expense 12,946
Other adjustments 290
-------
$51,404
=======
FIXED CHARGES:
Interest expense $12,946
Capitalized interest 498
Other adjustments 161
-------
$13,605
=======
RATIO OF EARNINGS TO FIXED CHARGES 3.8
<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> 6-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> JAN-31-1997
<CASH> 24,755
<SECURITIES> 2,344
<RECEIVABLES> 12,253
<ALLOWANCES> 5,018
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,119,746
<DEPRECIATION> 93,869
<TOTAL-ASSETS> 1,100,199
<CURRENT-LIABILITIES> 0
<BONDS> 401,407
<COMMON> 726,206
0
0
<OTHER-SE> (59,556)
<TOTAL-LIABILITY-AND-EQUITY> 1,100,199
<SALES> 0
<TOTAL-REVENUES> 98,930
<CGS> 0
<TOTAL-COSTS> 45,344
<OTHER-EXPENSES> 998
<LOSS-PROVISION> 1,544
<INTEREST-EXPENSE> 12,946
<INCOME-PRETAX> 38,168
<INCOME-TAX> 0
<INCOME-CONTINUING> 38,168
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,168
<EPS-PRIMARY> .66
<EPS-DILUTED> .66
</TABLE>
