-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BuUq4E0/Mx2YBiUMfevVtflaUSgUynNx7jUzXPwd5Wpu+5qx03ekKWJwAr8EZWP1 CffucyOTtU8xDEWPYZMvnA== 0000909518-98-000173.txt : 19980310 0000909518-98-000173.hdr.sgml : 19980310 ACCESSION NUMBER: 0000909518-98-000173 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980131 FILED AS OF DATE: 19980309 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW PLAN REALTY TRUST CENTRAL INDEX KEY: 0000071519 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 131995781 STATE OF INCORPORATION: MA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08459 FILM NUMBER: 98560452 BUSINESS ADDRESS: STREET 1: 1120 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2128693000 MAIL ADDRESS: STREET 1: 1120 AVENUE OF THE AMERICAS STREET 2: 1120 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 10-Q 1 10Q FOR PERIOD END 01/31/98 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, 1998 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 (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, 1998 was 59,457,511. 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, 1998 1997 1998 1997 ---- ---- ---- ---- REVENUES Rental income and related revenues $60,827 $50,047 $119,392 $96,665 Interest and dividend income 1,018 1,100 1,960 2,265 ------- ------- -------- ------- 61,845 51,147 121,352 98,930 ------- ------- -------- ------- OPERATING EXPENSES Operating costs 15,252 12,638 30,256 24,125 Leasehold rents 153 160 321 325 Real estate and other taxes 5,664 4,580 10,908 9,027 Interest expense 8,660 7,085 17,213 12,946 Depreciation and amortization 7,683 6,181 15,133 11,867 Provision for doubtful accounts, net of recoveries (Note C) 1,163 976 2,018 1,543 ------ ----- ------- ------ TOTAL OPERATING EXPENSES 38,575 31,620 75,849 59,833 ------ ------ ------ ------ Administrative expenses 745 504 1,374 998 ------ ------ ------- ------ INCOME BEFORE GAIN (LOSS) ON SALE OF PROPERTY 22,525 19,023 44,129 38,099 Gain (loss) on sale of property __ 69 (67) 69 ------ ------ ------ ------ NET INCOME 22,525 19,092 44,062 38,168 PREFERRED DIVIDENDS (1,462) -- (2,925) -- ------ ------ ------ ------- NET INCOME APPLICABLE TO SHARES OF BENEFICIAL INTEREST $21,063 $19,092 $41,137 $38,168 ======= ======= ======= ======= BASIC EARNINGS PER SHARE (NOTE D) $.36 $.33 $.70 $.66 DILUTED EARNINGS PER SHARE (NOTE D) $.35 $.32 $.69 $.65 DIVIDENDS PER SHARE $.3675 $.3575 $.7325 $.7125 WEIGHTED AVERAGE SHARES OUTSTANDING BASIC (NOTE D) 59,228 58,337 59,116 58,235 WEIGHTED AVERAGE SHARES OUTSTANDING 59,720 58,666 59,514 58,489 DILUTED (NOTE D)
See accompanying notes to consolidated financial statements. 2
NEW PLAN REALTY TRUST AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN THOUSANDS) JANUARY 31, JULY 31, 1998 1997 ----------- -------- ASSETS - ------ Real estate, at cost Land $ 242,773 $ 232,502 Buildings and improvements 1,099,825 1,045,273 ---------- ---------- 1,342,598 1,277,775 Less accumulated depreciation and amortization 120,764 105,866 ---------- ---------- 1,221,834 1,171,909 Cash and cash equivalents 49,381 42,781 Marketable securities 2,004 2,034 Mortgages and notes receivable 22,882 23,107 Receivables: Trade and notes, net of allowance for doubtful accounts 15,212 12,035 Other 1,591 1,464 Prepaid expenses and deferred charges 9,694 5,000 Other assets 3,318 2,814 ---------- ---------- TOTAL ASSETS $1,325,916 $1,261,144 ========== ========== LIABILITIES - ----------- Mortgages payable $ 69,909 $ 65,573 Notes payable, net of unamortized discount 462,710 412,634 Other liabilities 33,142 33,359 Tenants' security deposits 5,189 4,623 ------- ------- TOTAL LIABILITIES 570,950 516,189 ======= ======= COMMITMENTS AND CONTINGENCIES - ----------------------------- SHAREHOLDERS' EQUITY - -------------------- Preferred shares, par value $1.00, authorized 1,000,000 shares; issued and outstanding (150,000 Series A Cumulative Preferred Shares), $75,000,000 redemption value 72,775 72,775 Shares of beneficial interest without par value, unlimited authorization; issued and outstanding (January 31, 1998 59,424,011; July 31, 1997 58,934,371) 749,553 738,011 Less loans receivable for the purchase of shares of beneficial interest 2,419 2,814 Add unrealized gain on securities reported at fair value 1,026 1,057 ---------- -------- 820,935 809,029 Less distributions in excess of net income 65,969 64,074 ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 754,966 744,955 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,325,916 $1,261,144 ========== ==========
See accompanying notes to consolidated financial statements. 3 NEW PLAN REALTY TRUST AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JANUARY 31, (UNAUDITED)(IN THOUSANDS)
1998 1997 ---- ---- OPERATING ACTIVITIES Net Income $ 44,062 $ 38,168 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 15,133 11,867 Loss (gain) on sale of property 67 (69) ------- -------- 59,262 49,966 Changes in operating assets and liabilities, net Increase in trade and notes receivable (3,993) (1,709) (Increase) decrease in other receivables (127) 114 Increase in allowance for doubtful accounts 816 1,042 (Decrease) increase in other liabilities (217) 3,268 Increase in net sundry assets and liabilities (4,794) (3,594) ------- -------- NET CASH PROVIDED BY OPERATING ACTIVITIES 50,947 49,087 ------- -------- INVESTING ACTIVITIES Sale of marketable securities 16 132 Purchase of marketable securities (17) -- Net proceeds from the sale of property (67) 1,161 Purchase and improvement of properties (58,635) (133,151) Repayment of mortgage notes receivable 225 1,168 ------- -------- NET CASH USED IN INVESTING ACTIVITIES (58,478) (130,690) ------- -------- FINANCING ACTIVITIES - -------------------- Distributions to shareholders (45,956) (41,463) Proceeds from the dividend reinvestment plan 8,856 7,978 Proceeds from the exercise of stock options 2,687 2,052 Repayment of short term debt (19,500) Proceeds from the sale of notes 50,000 153,000 Principal payments on mortgages (500) (189) Repayment of mortgages (1,351) -- Repayment of loans receivable for the purchase of share of beneficial interest 395 180 ------- -------- NET CASH PROVIDED BY FINANCING ACTIVITIES 14,131 102,058 ------- -------- INCREASE IN CASH EQUIVALENTS 6,600 20,455 Cash and cash equivalents at beginning of year 42,781 4,300 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 49,381 $ 24,755 ======== ========
See accompanying notes to consolidated financial statements. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ Note A: The accompanying unaudited consolidated financial statements have been prepared by the Trust pursuant to the rules of the Securities and Exchange Commission as they relaate to interim financial statements 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, 1998 and 1997 are not necessarily indicative of the results expected for the full year. These consolidated 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, 1998 and 1997 were $107,000 and $820,000, respectively. Interest paid, net of amounts capitalized, for the six months ended January 31, 1998 and 1997 was $16,853,000 and $9,960,000, respectively. Interest costs capitalized for the six months ended January 31, 1998 and 1997 were $0 and $498,000, respectively. The Trust entered into the following non cash investing and financing activities (in thousands) for the six months ended January 31, 1998 1997 ---- ---- Mortgage obligations assumed upon the purchase of property $6,187 $10,100 Note C: Provision for Doubtful Accounts The provision for doubtful accounts is net of recoveries. For the six months ended January 31, 1998 and 1997, recoveries were $42,000 and $112,000, respectively. For the three months ended January 31, 1998 and 1997, recoveries were $33,000 and $96,000, respectively. 5 Note D: On January 31, 1998 the Trust implemented Financial Accounting Standard No. 128 "Earnings Per Share". The following table sets forth the computation of average shares outstanding and basic earnings and diluted earnings per share. (Amounts in thousands except per share amounts.)
Three Months Ended Six Months Ended January 31, January 31, 1998 1997 1998 1997 ---- ---- ---- ----- Basic EPS Computation - --------------------- Net income $22,525 $19,092 $44,062 $38,168 Less preferred stock dividends (1,462) -- (2,925) -- ------- ------- ------- ------- Net income available to shares of beneficial interest $21,063 $19,092 $41,137 $38,168 ======= ======= ======= ======= Weighted average shares outstanding 59,228 58,337 59,116 58,235 Basic EPS $ .36 $ .33 $ .70 $ .66 Diluted EPS Computation - ----------------------- Proceeds from assumed exercise of stock options $81,924 $39,379 $81,826 $38,470 Average price of shares during the period $24.940 $23.651 $24.214 $22.615 Treasury shares re purchasable 3,285 1,665 3,379 1,701 Option shares assumed exercised 3,777 1,994 3,777 1,955 ------ ------ ------ ------ Diluted potential shares 492 329 398 254 Weighted average shares outstanding 59,228 58,337 59,116 58,235 ------ ------ ------ ------ Adjusted weighted average shares outstanding 59,720 58,666 59,514 58,489 ======= ====== ====== ====== Net income available to shares of beneficial interest $21,063 $19,092 $41,137 $38,168 Diluted EPS $ .35 $ .32 $ .69 $ .65
6 Note E: Computation of Basic and Diluted Earnings Per Share The following sets forth the computation of basic and diluted earnings per share in accordance with Financial Accounting Standard No. 128 "Earnings Per Share" for the preceding five fiscal years ending July 31. (Amounts are in thousands except per share amounts.)
For the Years Ended July 31, ---------------------------- 1997 1996 1995 1994 1993 ---- ---- ---- ---- ---- Proceeds from assumed exercise of stock options $49,307 $30,753 $30,050 $34,807 $31,429 Weighted average price of shares $22.688 $21.223 $21.042 $23.052 $23.542 Treasury shares re purchasable 2,173 1,449 1,428 1,510 1,335 Option shares assumed exercised 2,447 1,607 1,574 1,776 1,625 ------- ------- ------- ------- ------- Diluted potential of shares 274 158 146 266 290 Weighted average shares outstanding 58,461 56,484 52,894 49,502 48,838 ------- ------- ------- ------- ------- Adjusted weighted average shares outstanding 58,735 56,642 53,040 49,768 49,128 ======= ======= ======= ======= ======= Net income applicable to shares of beneficial interest $76,576 $70,521 $62,716 $52,317 $43,229 Basic EPS $ 1.31 $ 1.25 $ 1.19 $ 1.06 $ 0.89 Diluted EPS $ 1.30 $ 1.25 $ 1.18 $ 1.05 $ 0.88
7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS I. Liquidity and Capital Resources On January 31, 1998 the Trust had approximately $51.4 million in available cash, cash equivalents and marketable securities. During the six month period ended January 31, 1998, the Trust paid approximately $38.5 million in cash and assumed mortgage debt of approximately $6.2 million to acquire four shopping centers (579,000 gross leasable square feet) and three apartment properties (964 units). In addition, $20.1 million was paid for improvements to existing properties and the construction of the Six Flags Factory Outlet Center. Debt at January 31, 1998 consisted of $69.9 million of mortgages payable and $462.7 million of notes payable, net of unamortized discount. During the six months ended January 31, 1998, the Trust sold an issue of unsecured notes totaling $50 million. The issue matures in 31 years and has an annual interest rate of 6.9%. The Trust's dividend reinvestment program generated approximately $8.9 million during the six month period ended January 31, 1998. In addition, during such period the Trust made dividend distributions of $43.3 million to holders of shares of beneficial interest and $2.7 million to preferred stock shareholders. Funds from operations applicable to shares of beneficial interest, defined as net income plus depreciation and amortization of real estate less gains from asset sales less preferred stock dividends, increased $6.4 million to $56.3 million ($.95 per share diluted) from $50.0 million ($.85 per share diluted) in the prior year's comparable six month period. II. Results of operations for the six months ended January 31, 1998 and 1997 A. Revenues Total revenues increased approximately $22.4 million to $121.4 million. The increase came primarily as a result of the acquisition of 36 properties since July 31, 1996 and the opening of the Six Flags Factory Outlet Center in March 1997. B. Operating Expenses Operating costs and leasehold rents increased approximately $6.1 million to $30.6 million, reflecting the acquisition of properties. Real estate and other taxes increased approximately $1.9 million to $10.9 million. The principal reason for this increase was the larger portfolio of properties. Interest expense increased approximately $4.3 million to $17.2 million. This increase was due to 8 the issuance, since January 1997, of $120 million of notes which were used to fund the Trust's property acquisition program. Depreciation and amortization of properties increased approximately $3.3 million to $15.1 million. This increase was the result of the acquisition of properties. Provision for doubtful accounts, net of recoveries, increased $475,000 to $2.0 million. As a percentage of rental revenue, this expense was 1.7% in the current period compared to 1.6% in the prior year's period. C. Administrative Expenses Administrative expenses as a percent of revenue was 1.1% in the current period compared to 1% in the prior comparable period. Costs increased in personnel and professional fee categories. III. Results of operations for the three months ended January 31, 1998 and 1997 A. Revenues Total revenues increased approximately $10.7 million to $61.8 million. The increase was a result of the acquisition of 25 properties since October 31, 1996 and the opening of the Six Flags Factory Outlet Center in March 1997. B. Operating Expenses Operating costs and leasehold rents increased approximately $2.6 million to $15.4 million, reflecting the acquisition of properties. Real estate and other taxes increased approximately $1.1 million to $5.7 million. The principal reason for this increase was the larger portfolio of properties. Interest expense increased approximately $1.6 million to $8.7 million. This increase was due to the issuance, since November 1996, of $120 million of notes which were used to fund the Trust's property acquisition program. Depreciation and amortization of properties increased approximately $1.5 million to $7.7 million. This increase was the result of the acquisition of properties. Provision for doubtful accounts, net of recoveries, increased $.2 million to $1.2 million. As a percentage of rental revenue, the expense was approximately 1.9% in both periods. C. Administrative Expenses Administrative expenses as a percent of revenue was 1.2% in the current period compared to 1.0% in the comparable prior year's period. Costs increased in the personnel and professional fee categories. 9 D. Gain on Sale of Property and Securities In the prior year's comparable period, the sale of a shopping center in Annville, Pennsylvania resulted in a gain of $69,000. There were no asset sales in the current period. IV. New Accounting Standards During 1997 and 1998, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards: (i) No. 129 "Disclosure of Information About Capital Structure" ("SFAS 129"), which is effective for fiscal years ending after December 15, 1997, (ii) No. 130 "Reporting Comprehensive Income" ("SFAS 130"), which is for fiscal years beginning after December 15, 1997, (iii) No. 131 "Disclosures About Segments of an Enterprise and Related Information" ("SFAS 131"), which is for fiscal years beginning after December 15, 1997 and (iv) No. 132 "Employers' Disclosures about Pensions and Other Postretirement Benefits ("SFAS 132), which is effective for fiscal years beginning after December 15, 1997. Management believes that the implementation of SFAS 129, 130 and 132 will not have a material impact on the Trust's financial statements. The Trust has yet to determine the impact of SFAS 131. 10 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, 1997. 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. Proposal One: Election of three Trustees (a) Votes of 50,354,236 shares were cast for the election of William Newman as a Trustee; votes of 926,703 were withheld. (b) Votes of 50,383,039 shares were cast for the election of Arnold Laubich as a Trustee; votes of 897,900 were withheld. (c) Votes of 50,379,353 shares were cast for the election of John Wetzler as a Trustee; votes of 901,586 were withheld. There were no abstentions or broker non votes in connection with this proposal. Proposal Two: To vote upon approval of the Trust's 1997 Stock Option Plan. The Plan was approved. Broker For Against Abstain Non Vote - --- ------- ------- -------- 47,331,202 2,976,603 973,034 100 Proposal Three (A): Approving the Amendment to the Amended and Restated Declaration of Trust of New Plan Realty Trust relating to the elimination of the limitation on the number of Preferred Shares that may be issued by the Trust. The amendment was not approved because the required two thirds majority of outstanding shares was not achieved. Broker For Against Abstain Non Vote - --- ------- ------- -------- 31,765,700 2,296,475 975,898 16,242,866 Proposal Three (B): Approving the Amendment to the Ammended and Restated Declaration of Trust of New Plan Realty Trust relating to the ability to grant the holders of Preferred Shares voting rights with respect to the election of Trustees under certain limited circumstances. The amendment was not approved because the required two thirds majority of outstanding shares was not achieved. Broker For Against Abstain Non Vote - --- ------- ------- -------- 31,863,127 2,190,137 984,811 16,242,864 11 Item 6. Exhibits and Reports on Form 8 K -------------------------------- (a) Exhibits: 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 January 23, 1998. 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: March 9, 1998 NEW PLAN REALTY TRUST By:/s/ Michael I. Brown ------------------- MICHAEL I. BROWN Chief Financial Officer, Controller 12 EXHIBIT INDEX Number Description - ------ ----------- 12.1 Ratio of Earnings to Fixed Charges 12.2 Calculation of Ratio of Earnings to Fixed Charges 27 Financial Data Schedule 13 NYFS05...:\40\65240\0003\91\FRM3068L.420 EX-12.1 2 RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12.1 RATIO OF EARNINGS TO FIXED CHARGES ---------------------------------- The ratio of earnings to fixed charges for the six months ended January 31, 1998 is: 3.0 For purposes of computing these ratios, earnings have been calculated by adding fixed charges (excluding capitalized interest and preferred stock dividends) to income before extraordinary items. Fixed charges consist of interest costs, whether expensed or capitalized, preferred stock dividend requirements, the interest component of rental expense, if any, and amortization of debt discounts and issue costs, whether expensed or capitalized. EX-12.2 3 CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12.2 CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES ------------------------------------------------- SIX MONTHS ENDED JANUARY 31, 1998 --------------------------------- (DOLLAR AMOUNTS IN THOUSANDS) ----------------------------- EARNINGS: Net income $44,062 Interest expense (including debt discount and debt issuing costs) 17,213 Capitalized interest Other adjustments 324 ------- $61,599 ======= FIXED CHARGES: Interest expense (including debt discount and debt issuing costs) $17,213 Capitalized interest -- Preferred stock dividends 2,925 Other adjustments 146 ------- $20,284 ======= RATIO OF EARNINGS TO FIXED CHARGES 3.0 EX-27 4 FINANCIAL DATA SCHEDULE
5 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. 1,000 6-MOS JUL-31-1998 JAN-31-1998 49,381 2,004 15,212 6,397 0 0 1,342,598 120,764 1,325,916 0 532,619 0 72,775 749,553 (64,943) 1,325,916 0 121,352 0 56,619 1,374 2,018 17,213 44,062 0 44,062 0 0 0 44,062 0.70 0.69
-----END PRIVACY-ENHANCED MESSAGE-----