-----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, VvSyzFf4Q7RBiqeuU+visuHD3e4Ur0Q+fSmVaR3dZ9wSdOMldLDakaQFRJAsnZIb DdAdE3G76BjC5lPkd6Q5nQ== 0000910643-97-000010.txt : 19970311 0000910643-97-000010.hdr.sgml : 19970311 ACCESSION NUMBER: 0000910643-97-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970131 FILED AS OF DATE: 19970310 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: 1934 Act SEC FILE NUMBER: 001-08459 FILM NUMBER: 97553604 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 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 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. 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. 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. 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 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. 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. 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. 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. 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. 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 EX-11 2 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 EX-12 3 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. EX-12 4 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 EX-27 5
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. 6-MOS JUL-31-1997 JAN-31-1997 24,755 2,344 12,253 5,018 0 0 1,119,746 93,869 1,100,199 0 401,407 726,206 0 0 (59,556) 1,100,199 0 98,930 0 45,344 998 1,544 12,946 38,168 0 38,168 0 0 0 38,168 .66 .66
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