-----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, LNG+dyqR3FREoH7X8pBuH/fo9DpMN22qsecvFXE+qOY8rkX5dfir708WUlyC6wWi HFFyc572P12YWmsJbhqX8A== 0000910643-97-000067.txt : 19970612 0000910643-97-000067.hdr.sgml : 19970612 ACCESSION NUMBER: 0000910643-97-000067 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970430 FILED AS OF DATE: 19970611 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: 97622214 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 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 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. 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. 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. 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. 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. 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. 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.
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 ----------- --------- ---------- ---------- ------ ------------ 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.
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 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 EX-11 2 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 EX-12.1 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: 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. EX-12.2 4 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 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. 3-MOS JUL-31-1997 APR-30-1997 21,390 2,133 11,918 5,005 0 0 1,130,928 99,653 1,100,631 0 401,346 730,795 0 0 (61,727) 1,100,631 0 150,997 0 70,002 1,525 2,389 19,758 57,255 0 57,255 0 0 0 57,255 .98 .98
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