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 APRIL 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 1-8459
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 May 30, 1997 was 58,729,995.
Total number of pages 16
<PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
THREE MONTHS NINE MONTHS
ENDED ENDED
APRIL 30, APRIL 30,
1997 1996 1997 1996
---- ---- ---- ----
REVENUES
- --------
Rental income and
related revenues $51,054 $42,264 $147,719 $118,662
Interest and dividend
income 1,012 1,089 3,277 4,009
52,066 43,353 150,996 122,671
_______ _______ _______ _______
OPERATING EXPENSES
- -------------------
Operating costs 13,611 10,281 37,736 28,570
Leasehold rents 182 171 507 498
Real estate and
other taxes 4,479 4,055 13,506 11,324
Interest expense 6,812 4,452 19,758 12,908
Depreciation and amortization 6,385 5,254 18,252 14,556
Provision for doubtful accounts,
net of recoveries (Note C) 846 654 2,389 1,388
_______ _______ _______ _______
TOTAL OPERATING EXPENSES 32,315 24,867 92,148 69,244
_______ _______ _______ _______
Administrative expenses 527 687 1,525 2,125
_______ _______ _______ _______
INCOME BEFORE GAIN ON SALE
OF PROPERTY AND SECURITIES 19,224 17,799 57,323 51,302
(Loss)/gain on sale of property (144) (370) (75) 412
Gain/(loss) on sale
of securities, net 7 (132) 7 (131)
_______ _______ _______ ________
NET INCOME $19,087 $17,297 $57,255 $51,583
======= ======= ======= ========
NET INCOME PER SHARE $.32 $.30 $.98 $.92
DIVIDENDS PER SHARE $.36 $.35 $1.0725 $1.0425
WEIGHTED AVERAGE SHARES
OUTSTANDING 58,596 57,762 58,353 55,995
See accompanying notes to consolidated financial statements.
<PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)
APRIL 30, JULY 31,
1997 1996
--------- --------
ASSETS
- ------
Real estate, at cost
Land 204,368 $ 174,712
Buildings and improvements 926,559 803,230
------- ----------
1,130,927 977,942
Less accumulated depreciation
and amortization 99,652 82,524
------- ----------
1,031,275 895,418
Cash and cash equivalents 21,390 4,300
Marketable securities 2,133 2,096
Mortgages and notes receivable 22,419 23,598
Receivables:
Trade and notes, net of allowance
for doubtful accounts 11,918 11,586
Other 1,030 1,109
Prepaid expenses and deferred charges 7,200 5,084
Other assets 3,266 2,203
-------- --------
TOTAL ASSETS 1,100,631 $ 945,394
========= ==========
LIABILITIES
- -----------
Mortgages payable $58,748 $ 48,936
Credit facility -- 19,500
Notes payable, net of unamortized discount 342,597 189,490
Other liabilities 26,097 24,984
Tenants' security deposits 4,121 3,130
-------- ---------
TOTAL LIABILITIES 431,563 286,040
-------- ---------
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 (April 30, 1997 -
58,729,995; July 31, 1996 - 58,069,362) 733,643 719,080
Less loans receivable for the purchase of
shares of beneficial interest 2,848 3,083
Add unrealized gain on securities reported
at fair value 839 643
--------- ---------
731,634 716,640
Less distributions in excess of net income 62,566 57,286
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 669,068 659,354
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,100,631 $ 945,394
========== ==========
See accompanying notes to consolidated financial statements.<PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED APRIL 30,
(UNAUDITED)(IN THOUSANDS)
OPERATING ACTIVITIES
- --------------------
Net Income 57,255 $ 51,583
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 18,252 14,556
Loss/(gain) on sale of properties, net 75 (412)
(Gain)/loss on sale of securities, net (7) 131
75,575 65,858
Changes in operating assets and liabilities, net
Increase in trade and notes receivable (1,360) (4,540)
Decrease/(Increase) in other receivables 78 (102)
Increase in allowance for doubtful accounts 1,029 974
Increase in other liabilities 1,114 2,840
Increase in net sundry assets and liabilities (2,339) (2,112)
NET CASH PROVIDED BY OPERATING ACTIVITIES 74,097 62,918
INVESTING ACTIVITIES
- --------------------
Sale of marketable securities 164 3,575
Net proceeds from the sale of property 2,525 3,052
Purchase and improvement of properties (146,351)(129,823)
Repayment of mortgage notes receivable 1,179 571
------------------
NET CASH USED IN INVESTING ACTIVITIES (142,483)(122,625)
------------------
FINANCING ACTIVITIES
- --------------------
Distributions to shareholders (62,535) (58,554)
Issuance of shares of beneficial interest pursuant to
a public offering --- 81,228
Proceeds from the dividend reinvestment plan 7,978 11,513
Proceeds from the exercise of stock options 6,585 163
Principal payments on mortgages (288) (329)
Proceeds from the sale of notes 153,000 --
Repayment of short-term debt (19,500) --
Repayment of mortgages (3,616)
Repayment of loans receivable for the purchase
of share of beneficial interest 236 197
------- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES 85,476 30,602
------- -------
INCREASE/(DECREASE) IN CASH EQUIVALENTS 17,090 (29,105)
Cash and cash equivalents at beginning of year 4,300 51,889
------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 21,390 $ 22,784
======== ========
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 nine month periods ended April 30, 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 nine months ended April
30, 1997 was $820,000. There were no state and local taxes paid
for the nine months ended April 30, 1996.
Interest paid for the nine months ended April 30, 1997 and 1996
was $17,925,000 and $13,044,000, respectively.
Interest costs capitalized for the nine months ended April 30,
1997 and 1996 were $868,000 and $112,000, respectively.
The Trust entered into the following non-cash investing and
financing activities (in thousands) for the nine months ended
April 30,:
1997 1996
---- ----
Mortgage assumed upon the
purchase of a property $10,100,000 $21,500,000
Note C: Provision for Doubtful Accounts
The provision for doubtful accounts is net of recoveries. For
the nine months ended April 30, 1997 and 1996, recoveries were
$173,000 and $500,000, respectively. For the three months ended
April 30, 1997 and 1996, recoveries were $61,000 and $160,000,
respectively.
<PAGE>
Note D: Subsequent Events
In May 1997 the Trust sold two issues of unsecured notes
totalling $70.0 million: (i) a $40.0 million issue due May 15,
2000 with a variable interest rate which is initially 5.9125%,
and (ii) a $30.0 million issue due June 15, 2007 with an interest
rate of 7.35%.
In May and June 1997 the Trust purchased six properties (four
shopping centers and two apartment properties). The aggregate
purchase price, including a mortgage of $6.0 million, was
approximately $56.4 million.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
I. Liquidity and Capital Resources
On April 30, 1997 the Trust had approximately $23.5 million
in available cash, cash equivalents and marketable
securities.
During the nine month period ended April 30, 1997, the Trust
paid approximately $127.3 million to acquire eight shopping
centers (901,000 gross leasable square feet) and ten
apartment properties (2,678 units). In addition, $19.1
million was paid for improvements to properties and the
construction of the Six Flags Outlet Center. The outlet
center opened in April 1997.
Debt at April 30, 1997 consisted of $58.7 million of
mortgages payable and $343.9 million of notes payable.
During the nine months ended April 30, 1997, the Trust sold
six issues of unsecured notes totaling $153.0 million. Two
of the issues, equaling $10.0 million and $49.0 million,
have maturities of two and three years, respectively, and
have variable interest rates. The four other issues,
equaling $49.0 million, $25.0 million, and two issues each
equaling $10.0 million, mature in 30 years and have interest
rates of 5.95%, 7.65% and 7.68%, respectively. In addition,
the 30-year $49.0 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 $350.0 million
shelf registration statement allowing it to issue additional
equity or debt and, as part of the shelf registration,
commenced a $175.0 million medium term note program in
December 1996.
The Trust's dividend reinvestment program provided $8.0
million during the nine month period ended April 30, 1997.
In addition, the Trust made dividend distributions of $62.5
million to shareholders.
Funds from operations, defined as net income plus
depreciation and amortization of real estate less gains from
asset sales, increased $9.7 million to $75.6 million
($1.30/share) from $65.9 million ($1.18/share) in the prior
year's comparable nine month period.
II. Results of operations for the nine months ended April 30,
1997 and 1996
A. Revenues
Total revenues increased approximately $28.3 million to
$151.0 million. The increase came primarily as a
result of the acquisition of 39 properties since July
31, 1995.
B. Operating Expenses
Operating costs and leasehold rents increased
approximately $9.2 million to $38.2 million, reflecting
the acquisition of properties.
Real estate and other taxes increased approximately
$2.2 million to $13.5 million. The principal reason
for this increase was the larger portfolio of
properties.
Interest expense increased approximately $6.9 million
to $19.8 million. This increase was due to an increase
in outstanding mortgages and notes payable.
Depreciation and amortization of properties increased
approximately $3.7 million to $18.3 million. This
increase was primarily the result of the acquisition of
properties.
Provision for doubtful accounts, net of recoveries,
increased $1.0 million to $2.4 million. This was due
primarily to a decrease in the amount of bad debt
recoveries and an increase in rental revenues.
C. Administrative Expenses
Administrative expenses as a percent of revenue
declined to 1.0% 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/(Loss) on the Sale of Properties and Securities
During the current period the Trust sold all or a
portion of its shopping centers in Annville,
Pennsylvania, Lumberton, North Carolina, and
Parkersburg, West Virginia. In the prior year's
comparable period shopping centers in Chinoe, Kentucky
and New Bern, North Carolina were sold. These
transactions resulted in a net loss of $75,000 in the
current period and a net gain of $412,000 in the prior
year's comparable period.
III. Results of operations for the three months ended April 30,
1997 and 1996
A. Revenues
Total revenues increased approximately $8.7 million to
$52.1 million. The increase came primarily as a result
of the acquisition of 29 properties since January 31,
1996.
B. Operating Expenses
Operating costs and leasehold rents increased
approximately $3.3 million to $13.8 million, reflecting
the acquisition of properties.
Real estate and other taxes increased approximately
$0.4 million to $4.5 million. The principal reason for
this increase was the larger portfolio of properties.
Interest expense increased approximately $2.4 million
to $6.8 million. This increase was due to outstanding
mortgages and notes payable.
Depreciation and amortization of properties increased
approximately $1.1 million to $6.4 million. This
increase was the result of the acquisition of
properties.
Provision for doubtful accounts, net of recoveries,
increased $192,000 to $845,000. This increase was due
primarily to a decrease in the amount of bad debt
recovery and an increase in rental revenues.
C. Administrative Expenses
Administrative expenses as a percent of revenue
declined to 1.0% from 1.6%. 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/(Loss) on the Sale of Properties and Securities
During the current period all or a portion of the
shopping centers in Parkersburg, West Virginia and
Lumberton, North Carolina were sold. In the prior
year's comparable period a shopping center in New Bern,
North Carolina was sold. These transactions resulted
in a net loss of $144,000 in the current period and a
loss of $370,000 in the prior year's comparable period.
<PAGE>
PART II - OTHER INFORMATION
Item 4. None.
Item 5. Other Information
(Unaudited) Pro Forma Financial Information
The Trust acquired eight shopping centers and ten apartment
complexes during the nine months ended April 30, 1997. The pro
forma financial information for the nine months ended April 30,
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 $137.4 million
aggregate acquisition cost was funded by the assumption of an
existing mortgage and $127.3 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.
<TABLE>
<CAPTION>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
NINE MONTHS ENDED APRIL 30, 1997
(In thousands except for per share amounts)
HISTORICAL PRO FORMA OTHER
ACQUI ADJUST- ADJUST- PRO FORMA AS
AS REPORTED SITION(1) MENTS PRO FORMA MENTS ADJUSTED
----------- --------- ---------- ---------- ------ ------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
RENTAL REVENUES $147,719 $4,793 $152,512 $219(5) $152,731
INTEREST AND DIVIDENDS 3,277 ($584) (2) 2,693 2,693
TOTAL REVENUE 150,996 4,793 (584) 155,205 219 155,424
OPERATING EXPENSES:
OPERATING COST 54,138 1,702 55,840 55,840
INTEREST EXPENSE 19,758 1,153 (3) 20,911 20,911
DEPRECIATION EXPENSE 18,252 714 (4) 18,966 18,966
TOTAL OPERATING EXPENSES 92,148 1,702 1,867 95,717 95,717
OTHER DEDUCTIONS 1,525 1,525 1,525
LOSS ON SALE OF PROPERTIES,
AND SECURITIES NET
68 68 68
NET INCOME $57,255 $3,091 ($2,451) $57,895 $219 $58,114
NET INCOME PER SHARE $ .98 $ .99 $ 1.00
AVERAGE SHARES OUTSTANDING 58,353 58,353 58,353
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 additional borrowings required to acquire these properties.
The weighted average interest rate is 6.53%.
(4) The Pro Forma Adjustment for depreciation is an estimate of the depreciation expense for the portion of the nine month period
that predates the Trust's ownership. The estimated useful life of the real estate is forty years.
(5) Other Adjustments are a result of revenue from leases executed after the acquisition.
</TABLE>
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
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.
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: June 11, 1997
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 14
12.1 Ratio of Earnings to Fixed Charges 15
12.2 Calculation of Ratio of Earnings
to Fixed Charges 16
27 Financial Data Schedule
EXHIBIT 11
STATEMENT REGARDING COMPUTATION
OF PER SHARE EARNINGS
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
-------------------------------------------
Proceeds upon exercise of options $ 39,443 $ 39,44
Market price of shares
Closing $ 21.75
Average $ 22.79
Treasury shares purchasable from option
proceeds 1,730 1,813
Option shares outstanding 1,991 1,991
Common stock equivalents (excess shares
under option over treasury shares that
could be repurchased) 261 178
Average number of shares outstanding 58,353 58,353
Total of common and common equivalent
shares 58,614 58,531
Net income for the period $ 57,255 $ 57,255
Earnings per share $ .98 $ .98
Reported earnings per share $ .98 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:
9 Months
ended
1992 1993 1994 1995 1996 4/30/97
- ---- ---- ---- ---- ---- -------
28.8 23.6 17.0 8.1 4.9 3.7
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 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
NINE MONTHS ENDED APRIL 30, 1997
(DOLLAR AMOUNTS IN THOUSANDS)
EARNINGS:
Net income $57,255
Interest expense 19,758
Other adjustments 394
------
$77,407
=======
FIXED CHARGES:
Interest expense $19,758
Capitalized interest 868
Other adjustments 248
------
$20,874
=======
RATIO OF EARNINGS TO
FIXED CHARGES 3.7
<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> APR-30-1997
<CASH> 21,390
<SECURITIES> 2,133
<RECEIVABLES> 11,918
<ALLOWANCES> 5,005
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,130,928
<DEPRECIATION> 99,653
<TOTAL-ASSETS> 1,100,631
<CURRENT-LIABILITIES> 0
<BONDS> 401,346
<COMMON> 730,795
0
0
<OTHER-SE> (61,727)
<TOTAL-LIABILITY-AND-EQUITY> 1,100,631
<SALES> 0
<TOTAL-REVENUES> 150,997
<CGS> 0
<TOTAL-COSTS> 70,002
<OTHER-EXPENSES> 1,525
<LOSS-PROVISION> 2,389
<INTEREST-EXPENSE> 19,758
<INCOME-PRETAX> 57,255
<INCOME-TAX> 0
<INCOME-CONTINUING> 57,255
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57,255
<EPS-PRIMARY> .98
<EPS-DILUTED> .98
</TABLE>
