<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 September 30, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR
15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-13136
HOME PROPERTIES OF NEW YORK, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 16-1455126
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
850 Clinton Square, Rochester, New York 14604
(Address of principal executive offices) (Zip Code)
(716) 546-4900
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former
year, if changed since last report)
Indicate by check mark whether 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 X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
Class of Common Stock Outstanding at October 31, 1997
$.01 par value 8,841,521
Page 1 of 16
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HOME PROPERTIES OF NEW YORK, INC.
<TABLE>
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<CAPTION>
1997 1996
-------- --------
(Unaudited) (Note 1)
<S> <C> <C>
ASSETS
Real estate:
Land $ 43,156 $ 15,080
Buildings, improvements and equipment 341,394 246,693
-------- --------
384,550 261,773
Less: accumulated depreciation ( 43,903) ( 40,237)
-------- --------
Real estate, net 340,647 221,536
Cash and cash equivalents 1,123 1,523
Cash in escrows 7,857 5,637
Accounts receivable 2,527 2,185
Prepaid expenses 5,411 2,496
Deposit 520 1,900
Advances to affiliates 28,106 5,898
Deferred financing costs 1,515 1,616
Other assets 7,008 5,840
-------- --------
Total assets $394,714 $248,631
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes payable $160,401 $104,915
Notes payable 95 261
Line of credit 32,100 -
Accounts payable 4,918 2,024
Accrued interest payable 973 601
Accrued expenses and other liabilities 2,480 2,525
Security deposits 3,602 2,545
-------- --------
Total liabilities 204,569 112,871
-------- --------
Minority interest 78,972 52,730
-------- --------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 10,000,000
shares authorized; no shares issued - -
Common stock, $.01 par value; 30,000,000
shares authorized; 7,595,732 and 6,144,498 shares
issued and outstanding at September 30, 1997 and
December 31, 1996, respectively 76 61
Excess stock, $.01 par value; 10,000,000
shares authorized; no shares issued - -
Additional paid-in capital 131,594 98,092
Distributions in excess of accumulated earnings ( 17,963) ( 13,062)
Treasury stock, at cost, 20,000 shares (426) -
Officer and director notes for stock purchases ( 2,108) ( 2,061)
-------- --------
Total stockholders' equity 111,173 83,030
-------- --------
Total liabilities and stockholders' equity $394,714 $248,631
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
Page 2
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1997 1996
------- -------
<S> <C> <C>
Revenues:
Rental income $41,486 $30,665
Property other income 1,223 799
Other income 2,398 1,598
------- -------
Total revenues 45,107 33,062
------- -------
Expenses:
Operating and maintenance 20,692 15,992
General and administrative 1,306 1,077
Interest 7,737 6,635
Depreciation and amortization 7,447 5,800
------- -------
Total expenses 37,182 29,504
------- -------
Income before loss on disposition of
property and minority interest 7,925 3,558
Loss on disposition of property 2,155 -
------- -------
Income before minority interest 5,770 3,558
Minority interest 1,797 626
------- -------
Net income $ 3,973 $ 2,932
======= =======
Per share data:
Net income $.57 $.53
==== ====
Weighted average number of
shares outstanding 6,916,434 5,490,842
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
Page 3
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1997 1996
------- -------
<S> <C> <C>
Revenues:
Rental income $15,379 $10,930
Property other income 428 283
Other income 994 603
Total revenues 16,801 11,816
------- -------
Expenses:
Operating and maintenance 7,179 5,438
General and administrative 514 368
Interest 3,012 2,396
Depreciation and amortization 2,690 1,988
------- -------
Total expenses 13,395 10,190
------- -------
Income before loss on disposition of
property and minority interest 3,406 1,626
Loss on disposition of property 2,155 -
------- -------
Income before minority interest 1,251 1,626
Minority interest 423 285
------- -------
Net income $ 828 $ 1,341
======= =======
Per share data:
Net income $.11 $.24
==== ====
Weighted average number of
shares outstanding 7,325,543 5,646,418
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
Page 4
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED, IN THOUSANDS)
1997 1996
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,973 $ 2,932
------- -------
Adjustments to reconcile net income to net
cash provided by operating activities:
Equity in income of HP Management and Conifer 5 ( 106)
Realty
Income allocated to minority interest 1,797 626
Depreciation and amortization 8,021 6,232
Changes in assets and liabilities:
Other assets ( 3,874) ( 4,968)
Accounts payable and accrued liabilities 4,278 2,047
------- -------
Total adjustments 10,227 3,831
------- -------
Net cash provided by operating activities 14,200 6,763
------- -------
Cash flows used in investing activities:
Purchase of properties, net of mortgage notes assumed (44,636) ( 4,868)
Additions to properties (10,106) ( 4,962)
Deposits on property ( 520) -
Advances to affiliates (32,533) (11,686)
Payments on advances to affiliates 10,325 12,606
Sale of property 10,423 -
Other ( 158) 75
------- -------
Net cash used in investing activities (67,205) ( 8,835)
------- -------
Cash flows from financing activities:
Proceeds from sale of common stock 32,801 8,571
Purchase of Treasury Stock ( 426) -
Proceeds from mortgage and other notes payable 12,000 4,530
Payments of mortgage and other notes payable ( 9,019) ( 6,507)
Proceeds from line of credit 90,700 20,930
Payments on line of credit (58,600) (15,900)
Additions to deferred loan costs ( 473) ( 222)
Additions to cash escrows ( 2,220) ( 595)
Dividends and distributions paid (12,158) ( 8,493)
Capital contribution to minority interest - 206
------- -------
Net cash provided by financing activities 52,605 2,520
------- -------
Net increase (decrease) in cash ( 400) 448
Cash and cash equivalents:
Beginning of period 1,523 812
------- -------
End of period $ 1,123 $ 1,260
======= =======
Supplemental disclosure of cash flow information:
Cash paid for interest $ 6,921 $ 5,960
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
Page 5
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1. Unaudited Interim Financial Statements
The interim consolidated financial statements of Home
Properties of New York, Inc. (the "Company") are prepared
pursuant to the requirements for reporting on Form 10-Q.
Accordingly, certain disclosures accompanying annual
financial statements prepared in accordance with generally
accepted accounting principles are omitted. The year-end
balance sheet data was derived from audited financial
statements, but does not include all disclosures required by
generally accepted accounting principles. In the opinion of
management, all adjustments, consisting solely of normal
recurring adjustments, necessary for the fair presentation
of the consolidated financial statements for the interim
periods have been included. The current period's results of
operations are not necessarily indicative of results which
ultimately may be achieved for the year. The interim
consolidated financial statements and notes thereto should
be read in conjunction with the financial statements and
notes thereto included in the Company's Form 10-K, as filed
with the Securities and Exchange Commission on March 25,
1997.
2. Organization and Basis of Presentation
Organization
Home Properties of New York, Inc. (the " Company " ) was
formed in November 1993, as a Maryland corporation and is
engaged primarily in the ownership, management, acquisition
and development of residential apartment communities. On
August 4, 1994, the Company completed an initial public
offering ( " IPO " ) of 5,408,000 shares of common stock.
Net proceeds from the IPO of approximately $94,000 were
contributed to Home Properties of New York, L.P. (the "
Operating Partnership " ) in exchange for units representing
a 90.4% general partnership interest in the Operating
Partnership.
On January 1, 1996, the Operating Partnership acquired the
operations of Conifer Realty, Inc. and Conifer Development,
Inc. ("Conifer") and purchased certain of Conifer's assets
for a total acquisition price of $15,434. Conifer was
involved in the development and management of government-
assisted housing throughout New York State.
Page 6
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
2. Organization and Basis of Presentation (Continued)
Basis of Presentation
The accompanying consolidated financial statements include
the accounts of the Company and its 65.1% (82.9% at
September 30, 1996) general partnership interest in the
Operating Partnership.
All significant intercompany balances and transactions have
been eliminated in these consolidated financial statements.
3. Earnings Per Common Share
Earnings per common share amounts are based on the weighted
average number of common shares and common equivalent shares
(stock options) outstanding during the period. The
conversion of an Operating Partnership unit to common stock
will have no effect on earnings per common share as unit
holders and stockholders effectively share equally in the
net income of the Operating Partnership.
In February 1997, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards
No. 128 - Earnings per Share (SFAS No. 128), which will be
effective for the Company's fiscal year ended December 31,
1997. SFAS No. 128 is intended to simplify the earnings per
share computations and make them more comparable from
company to company. The adoption of SFAS No. 128 is not
expected to have a significant impact on the Company's
earnings per share as currently determined.
Page 7
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
4. Pro Forma Financial Information
<TABLE>
<CAPTION>
Pro Forma Combined Statement of Operations
For the Nine Months Ended September 30, 1997
-------------------------------------------
Home
Properties ProForma Company
Historical Adjustment ProForma
<S> <C> <C> <C>
Revenue:
Rental income $41,486 $11,773 $53,259
Property other income 1,223 157 1,380
Other income 2,398 156 2,554
------- ------- -------
Total Revenues 45,107 12,086 57,193
------- ------- -------
Expenses:
Operating and Maintenance 20,692 5,734 26,426
General and administrative 1,306 150 1,456
Interest 7,737 3,721 11,458
Depreciation and amortization 7,447 1,601 9,048
------- ------- -------
Total Expenses 37,182 11,206 48,388
------- ------- -------
Income before loss on disposition
of property and minority interest 7,925 880 8,805
Loss on disposition of property 2,155 - 2,155
------- ------- -------
Income before minority interest $ 5,770 $ 880 6,650
======= =======
Minority Interest 2,463
-------
Net income $ 4,187
=======
Net income per common share $0.61
=====
Weighted average number of
shares outstanding 6,916,434
=========
</TABLE>
The pro forma information was prepared as if the
transactions related to the acquisition of Lake Grove
Apartments (on February 3, 1997), Royal Gardens Apartments
(on May 28, 1997), Philadelphia acquisition (on September
23, 1997) and 1600 East Avenue Apartments (on September 16,
1997) had occurred on January 1, 1997.
Adjustments to the pro forma combined statements of
operations for the nine months ended September 30, 1997,
consist principally of providing property net operating
activity and recording interest, depreciation and
amortization from January 1, 1997 to the acquisition date.
The Company completed an acquisition of Woodgate Place
Apartments, a 120 -unit apartment community in Rochester,
New York on June 30, 1997, and Mid Island Estates, a 232-
unit apartment community in Long Island, New York on July 1,
1997. The pro forma results for the nine months ended
September 30, 1997 would not have been materially different
if the properties had been acquired on January 1, 1997.
Therefore, no pro forma presentation has been prepared
reflecting these acquisitions.
Page 8
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion is based primarily on the consolidated
financial statements of Home Properties of New York, Inc. as of
September 30, 1997 and 1996 and for the nine-month and three-
month periods then ended. This information should be read in
conjunction with the accompanying consolidated financial
statements and notes thereto.
Forward-Looking Statements
This discussion contains forward-looking statements. Although
the Company believes expectations reflected in such forward-
looking statements are based on reasonable assumptions, it can
give no assurance that its expectations will be achieved.
Factors that may cause actual results to differ include general
economic and local real estate conditions, other conditions that
might affect operating expenses, the timely completion of
repositioning and current development activities within
anticipated budgets, the actual pace of future acquisitions and
developments and continued access to capital to fund growth.
Liquidity and Capital Resources
The Company's principal liquidity demands are expected to be
distributions to stockholders, capital improvements and repairs
and maintenance for the properties, acquisition of additional
properties, property development and debt repayment.
The Company intends to meet its short-term liquidity requirements
through net cash flows provided by operating activities and its
line of credit. The Company considers its ability to generate
cash to continue to be adequate to meet all operating
requirements and make distributions to its stockholders in
accordance with the provisions of the Internal Revenue Code, as
amended, applicable to REITs.
To the extent that the Company does not satisfy its long-term
liquidity requirements through net cash flows provided by
operating activities and the line of credit, it intends to
satisfy such requirements through the issuance of UPREIT units,
proceeds from the Dividend Reinvestment Plan, property debt
financing, or issuing additional common shares or shares of the
Company's preferred stock. As of February 28, 1997, the
Company's Form S-3 Registration Statement was declared effective
relating to the issuance of up to $100 million of shares of
common stock or other securities. During 1997, 3,184 apartment
units have been purchased at a total price of $127 million,
including issuance of UPREIT units valued at approximately $28
million. In addition, $18 million has been raised during the
first nine months through the Company's Dividend Reinvestment
Plan, as well as $15 million raised through the sale of common
stock from the Company's $100 million shelf registration.
The Company's Board of Directors approved a stock repurchase
program under which the Company may repurchase up to one million
shares of its outstanding common stock. The Board's action did
not establish a target price or a specific timetable for
repurchase. During June 1997, the Company repurchased 20,000
shares at a cost of $.426 million.
The Company has an unsecured line of credit of $50 million with
an available balance of $17.9 million at September 30, 1997.
Borrowings under the line of credit bear interest at 1.25% over
the one-month LIBOR rate. Accordingly, increases in interest
rates will increase the Company's interest expense and as a
result will effect the Company's results of operations and
financial condition. The line of credit expires on September 4,
1999, with a one year extension at the Company's option.
As of September 30, 1997, the weighted average rate of interest
on mortgage debt is 7.7% and the weighted average maturity is 6.0
years. Most of the debt is fixed rate, with only 18% variable
rate debt. This limits the exposure to changes in interest
rates, minimizing the effect on results of operations and
financial condition.
Page 9
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Management believes that net cash flows provided by operating
activities and the line of credit will be sufficient to satisfy
the Company's cash requirements for the next one to two years.
The following table sets forth information regarding the mortgage
indebtedness at September 30, 1997.
<TABLE>
<CAPTION>
Principal
Interest Balance as of
Rate as of Maturity September 30, 1997
Communities Location September 30, 1997 Date (000's)
- ------------------------- ----------------- ------------------ -------- ------------------
<S> <C> <C> <C> <C>
Fixed Rate
Landon Court Philadelphia, PA 7.75% 11/01/98 1,201
Conifer Court Syracuse, NY 10.53% 11/01/99 407
Valley Park South Bethlehem, PA 8.50% 01/01/00 9,650
Perinton, Riverton and Rochester and
Waterfalls Buffalo, NY 6.75% (1) 08/01/00 12,010
Executive House Philadelphia, PA 8.50% 06/01/01 2,600
Harmark Village Square Philadelphia, PA 8.50% 06/01/01 2,925
Karen Court Philadelphia, PA 8.00% 09/01/01 1,320
Patricia Court Philadelphia, PA 8.00% 09/01/01 1,737
Springwood Philadelphia, PA 8.50% 11/01/01 1,523
Valley View Philadelphia, PA 8.50% 11/01/01 3,452
Royal Gardens Piscataway, NJ 7.66% 08/01/02 11,960
Williamstowne Village Buffalo, NY 7.37% (2) 10/27/02 9,897
Brook Hill Rochester, NY 7.75% 11/01/02 4,962
Garden Village Buffalo, NY 7.75% 11/01/02 4,670
1600 Elmwood Rochester, NY 7.75% 11/01/02 5,449
Village Green Syracuse, NY 7.75% 11/01/02 4,865
Chesterfield Philadelphia, PA 8.25% 01/01/03 6,849
Hamlet Court Rochester, NY 8.25% 05/01/03 1,817
Curren Terrace Philadelphia, PA 8.355% 11/01/03 9,763
Fairview Heights Ithaca, NY 7.71% (3) 11/30/03 4,014
Finger Lakes Manor Rochester, NY 7.71% (3) 11/30/03 4,014
Glen Manor Philadelphia, PA 8.125% 05/01/04 3,764
Springcreek/Meadows Rochester, NY 7.63% (4) 08/01/04 3,209
Idylwood Buffalo, NY 8.625% 11/01/05 9,410
Mid Island Estates Bay Shore, NY 7.25% (5) 05/01/06 6,675
Newcastle Rochester, NY 6.00% (6) 07/31/06 6,150
Raintree Island Buffalo, NY 8.50% 11/01/06 6,518
Woodgate Place Rochester, NY 7.865% 11/01/07 3,480
Conifer Village Syracuse, NY 7.20% 06/01/10 2,910
Village Green
(Fairways) Syracuse, NY 8.23% 10/01/19 4,531
Raintree Island Buffalo, NY 8.50% 05/01/20 1,205
Harborside Manor Syracuse, NY 8.92% 07/01/27 4,234
-------
157,171
</TABLE>
Page 10
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
<TABLE>
<CAPTION>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION CONT'D
Interest Balance as of
Rate as of Maturity September 30, 1997
Communities Location September 30, 1997 Date (000's)
<S> <C> <C> <C> <C>
Floating Rate
Westminster Syracuse, NY 30 day LIBOR+1.75% 12/31/97 3,230
--------
Subtotal 160,401
Line of Credit
Unsecured N/A 30 day LIBOR+1.25% On Demand 32,100
--------
$192,501
========
</TABLE>
(1) Fixed through August 4, 1999, then prime +.5% until maturity.
(2) Fixed through November 1, 2000, then prime +.5% until maturity.
(3) Fixed through April 30, 2000, then prime +.5% until maturity.
(4) Fixed through July 31, 2000, then prime +.5% until maturity.
(5) Fixed through March 31, 1998; 7.5%. April 1, 1998 through March 31,
2001; then 7.75% until maturity.
(6) Fixed through July 31, 1999, then variable.
Page 11
<PAGE>
Results of Operations
Comparison of nine months ended September 30, 1997 to the same
period in 1996
The Company had 22 apartment communities with 5,404 units, one
small ancillary convenience shopping area and a 202 site
manufactured home community which were owned during both the nine
and three-month periods being presented (the "Core Properties").
The Company has acquired
23 apartment communities with 4,352 units from March 6, 1996
through September 30, 1997 (the "Acquired Communities"). The
inclusion of these Acquired Communities generally accounted for
the significant changes in operating results for the nine and
three months ended September 30, 1997.
Of the $10,821,000 increase in rental income, $9,600,000 is
attributable to the Acquired Communities. The balance of this
increase, which is from the Core Properties, was the result of an
increase of 3.3% in weighted average rental rates, plus an
increase in occupancy from 94.0% to 95.0%.
Of the $424,000 increase in property other income, $235,000 is
attributable to the Acquired Communities. Most of the balance of
this increase is from the Company's share of income/loss from
various general partnership interests.
Other income increased by $800,000, the majority from an increase
in interest income from advances to affiliates (see detail
presented on page 14).
Of the $4,700,000 increase in operating and maintenance expenses,
$4,564,000 is attributable to the Acquired Communities. The
balance for the Core Properties represents a 1.0% increase over
1996. The major areas of increase in the Core Properties
occurred in personnel and real estate taxes. Helping offset this
were reductions to insurance and snow removal costs.
General and administrative expense increased in 1997 by $229,000,
or 21%. However, general and administrative expenses as a
percentage of total revenues decreased from 3.3% in 1996 to 2.9%
in 1997.
Comparison of three months ended September 30, 1997 to the same
period in 1996
Of the $4,449,000 increase in rental income, $3,986,000 is
attributable to the Acquired communities. The balance of this
increase, which is from the Core Properties, was the result of an
increase of 3.0% in weighted average rental rates, plus an
increase in occupancy from 94.0% to 95.9%.
Of the $145,000 increase in property other income, $110,000 is
attributable to the Acquired Communities. The balance of this
increase is from the Company's share of income/loss from various
general partnership interests.
Other income increased by $391,000, the majority from an increase
in interest income from advances to affiliates (see detail
presented on page 14).
Of the $1,741,000 increase in operating and maintenance expenses,
$1,766,000 is attributable to the Acquired Communities. The
balance for the Core Properties represents a 0.5% decrease over
1996. Core Property operating expenses included reductions in
utility costs, advertising expenses and insurance rates, offset,
in part, by increases in site-level personnel expense and real
property taxes.
General and administrative expense increased in 1997 by $146,000,
or 40%. However, general and administrative expenses as a
percentage of total revenues was 3.1% for both periods presented.
Page 12
<PAGE>
Funds From Operations
Management considers funds from operations to be an appropriate
measure of performance of an equity REIT. The National
Association of Real Estate Investment Trusts ("NAREIT") revised
White Paper definition of funds from operations is income (loss)
before gains (losses) from the sale of property and extraordinary
items, before minority interest in the Operating Partnership,
plus real estate depreciation. Management believes that in order
to facilitate a clear understanding of the combined historical
operating results of the Company, funds from operations should be
considered in conjunction with net income as presented in the
consolidated financial statements included elsewhere herein.
Funds from operations does not represent cash generated from
operating activities in accordance with generally accepted
accounting principles and is not necessarily indicative of cash
available to fund cash needs. Funds from operations should not
be considered as an alternative to net income as an indication of
the Company's performance or to cash flow as a measure of
liquidity.
The calculation of funds from operations for the previous six
quarters are presented below:
<TABLE>
<CAPTION>
Sept. 30 June 30 March 31 Dec. 31 Sept. 30 June 30
1997 1997 1997 1996 1996 1996
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 828 $1,876 $1,269 $1,215 $1,341 $ 928
Minority interest 423 802 572 271 285 194
Extraordinary item - - - - - -
Depreciation from real property 2,654 2,389 2,305 2,241 1,955 1,876
Depreciation from real property
from unconsolidated entities 76 76 4 183 69 69
(Gain) Loss from sale of property 2,155 - - - ( 3) 11
------ ------ ------ ------ ------ ------
FFO $6,136 $5,143 $4,150 $3,910 $3,647 $3,078
====== ====== ====== ====== ====== ======
Weighted average common shares/
units outstanding 10,827.1 10,139.1 9,254.7 7,168.4 6,849.4 6,617.6
======== ======== ======= ======= ====== =======
</TABLE>
All REITs may not be using the strict White Paper definition for
new FFO. Accordingly, the above presentation may not be
comparable to other similarly titled measures of FFO of other REITs.
Inflation
Substantially all of the leases at the communities are for a term
of one year or less, which enables the Company to seek increased
rents upon renewal of existing leases or commencement of new
leases. These short-term leases minimize the potential adverse
effect of inflation on rental income, although residents may
leave without penalty at the end of their lease terms and may do
so if rents are increased significantly.
Declaration of Dividend
On October 28, 1997, the Board of Directors approved a dividend
of $.45 per share for the period from July 1, 1997 to September
30, 1997. This is the equivalent of an annual distribution of
$1.80 per share. The dividend is payable November 25, 1997 to
shareholders of record on November 13, 1997.
Page 13
<PAGE>
Subsequent Events
On October 16, 1997, the Company acquired 452 apartment units in
three communities located in Buffalo, New York. The purchase
price of $11.3 million was paid in cash drawn under the Company's
unsecured line of credit facility.
On October 29, 1997, the Company acquired 3,106 apartment units
in 11 communities located in Detroit, Michigan. The total
purchase price of $105 million included the assumption of
existing debt of approximately $35 million plus the issuance of
UPREIT units valued at approximately $70 million. The Company
will pay $1.8 million in prepayment penalties to restructure the
assumed debt, which will be expensed during the fourth quarter.
In November 1997, the Company acquired 230 apartment units in two
communities located in Rochester, New York for $6.6 million and
148 apartment units in one community located in Pittsburgh,
Pennsylvania for $3.0 million.
In October 1997, the Company sold 1,000,000 newly-issued shares
of common stock to BancAmerica Robertson Stephens. Net proceeds
of $25.8 million were used to repay outstandings under the
Company's unsecured line of credit facility.
Other Income
Other income for the nine and three-months ended September 30,
1997 and 1996 is summarized as follows:
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30 September 30
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Management fees $ 375 $ 325 $127 $ 64
Development fees 645 645 39 79
Interest income 1,270 463 675 160
Other 114 60 43 29
Management Companies ( 6) 105 110 271
------ ------ ---- ----
$2,398 $1,598 $994 $603
====== ====== ==== ====
</TABLE>
Certain property management, leasing and development activities
are performed by Home Properties Management, Inc. and Conifer
Realty Corporation (the "Management Companies"). The Operating
Partnership owns non-voting common stock in the Management
Companies which entitles the Operating Partnership to receive 99%
of the economic interest in the Management Companies. The
Company's share of income from the Management Companies for the
nine and three months ended September 30, 1997 and 1996 is
summarized as follows:
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30 September 30
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Management fees $2,180 $2,250 $ 748 $774
Development fees 1,854 1,361 931 706
Miscellaneous 83 65 38 18
General and administrative ( 3,818) (3,392) (1,489) (1,144)
Other expenses ( 305) ( 178) ( 117) ( 80)
------- ------- ------- -------
Net income ($ 6) $ 106 $ 111 $ 274
======= ======= ======= =======
Company's share ($ 6) $ 105 $ 110 $ 271
======= ======= ======= =======
</TABLE>
Page 14
<PAGE>
PART II - OTHER INFORMATION
HOME PROPERTIES OF NEW YORK, INC.
Item 6. Exhibits and Reports or Form 8-K
(a) Exhibits: There are no exhibits which are filed
with, or incorporated by reference, to this
report.
(b) Reports or Form 8-K:
* Form 8-K was filed on September 26, 1997, date of
report September 4, 1997, to file exhibits updating
1934 Act filings in anticipation of an offering under a
registration statement.
* Form 8-K was filed on October 3, 1997, date of
report September 4, 1997, with respect to items 2
disclosures concerning the acquisition of 13 multi-
family residential properties in two separate
transactions and the disposition of one multi-family
residential property to an affiliated partnership. In
addition, there were various item 5 disclosures
including: the closing of a $50 million unsecured
credit facility; the signing of a non-binding letter of
intent to acquire 3,106 apartment units; and amendments
to the partnership agreement governing the Operating
Partnership.
* Form 8-K was filed on October 7, 1997, date of
report October 7, 1997, with respect to an item 2
disclosure concerning entering into an agreement to
acquire 11 multi-family residential properties in
Detroit, Michigan.
* Form 8-K was filed on October 9, 1997, date of
report September 7, 1997, with respect to an item 5
disclosure concerning entering into an underwriting
agreement to sell 1,000,000 shares of common stock at a
price of $25.75 per share.
* Form 8-K was filed on October 9, 1997, date of
report October 7, 1997, with respect to an item 5
disclosure concerning increasing the number of shares
of the Company's common stock available for cash
purchases under the Company's Dividend Reinvestment,
Stock Purchase, Resident Stock Purchase and Employee
Stock Purchase Plan.
* Form 8-K was filed on October 31, 1997, date of
report June 30, 1997, with respect to an item 2
disclosure concerning the acquisition of 3 multi-family
residential properties.
Page 15
<PAGE>
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.
HOME PROPERTIES OF NEW YORK, INC.
(Registrant)
Date: November 13, 1997
--------------------------
By: /s/ David P. Gardner
--------------------------
David P. Gardner
Vice President
Chief Financial Officer and Treasurer
Date: November 13, 1997
--------------------------
By: /s/ Norman Leenhouts
--------------------------
Norman Leenhouts
Chairman and Co-Chief
Executive Officer
Page 16 of 16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
HOME PROPERTIES OF NEW YORK, INC.'S FINANCIAL STATEMENTS CONTAINED IN ITS
SEPTEMBER 30, 1997 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 1,123
<SECURITIES> 0
<RECEIVABLES> 2,527
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 384,550
<DEPRECIATION> 43,903
<TOTAL-ASSETS> 394,714
<CURRENT-LIABILITIES> 0
<BONDS> 160,401
0
0
<COMMON> 76
<OTHER-SE> 111,097
<TOTAL-LIABILITY-AND-EQUITY> 394,714
<SALES> 0
<TOTAL-REVENUES> 45,107
<CGS> 0
<TOTAL-COSTS> 29,445
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,155
<INTEREST-EXPENSE> 7,737
<INCOME-PRETAX> 5,770
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,973
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,973
<EPS-PRIMARY> .57
<EPS-DILUTED> .57
</TABLE>
