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, 1994 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 and 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 June 3, 1994 was 49,424,090.
Total number of Pages 10
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
APRIL 30, 1994 AND JULY 31, 1993
(UNAUDITED)
(IN THOUSANDS)
4/30/94 7/31/93
------------- -------------
ASSETS:
- - ---------------------------
Real estate, at cost
Land and buildings 559,103 $388,228
Less accumulated depreciation
and amortization 45,911 38,183
------------- -------------
513,192 350,045
Cash and cash equivalents 8,033 102,312
Marketable securities (Note B) 7,594 47,988
Mortgages and notes receivable 22,918 24,135
Trade and notes receivable 7,032 3,904
Other receivables 1,585 1,916
Prepaid expenses and deferred charges 3,128 1,465
Other assets 1,702 2,483
------------- -------------
TOTAL ASSETS $565,184 $534,248
============= =============
LIABILITIES:
- - ---------------------------
Mortgages payable $28,140 $23,321
Notes payable (Note C) 25,000 -
Accounts payable and other liabilities 8,669 8,808
Tenants' security deposits 2,072 1,548
------------- -------------
TOTAL LIABILITIES 63,881 33,677
SHAREHOLDERS' EQUITY:
- - ---------------------------
Shares of beneficial interest without
par value, unlimited authorization;
issued and outstanding** 541,464 530,901
Less:
Loans receivable for share purchases 2,480 2,761
Distributions in excess of
net income 37,681 27,569
------------- -------------
TOTAL SHAREHOLDERS' EQUITY 501,303 500,571
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $565,184 $534,248
============= =============
** SHARES ISSUED AND
OUTSTANDING 49,423 48,957
============= =============
See accompanying notes to consolidated financial statements.
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED
04/30/94 04/30/93 04/30/94 04/30/93
REVENUES ------------------ ------------------
- - -----------------------------
Rental income and
related revenues $25,388 $17,336 $69,268 $47,468
Interest and dividend
income 899 2,385 3,785 8,728
------------------ -----------------
26,287 19,721 73,053 56,196
------------------ -----------------
OPERATING EXPENSES
- - -----------------------------
Operating costs 6,167 3,956 15,783 10,370
Leasehold rents 135 109 387 328
Real estate and other
taxes 2,387 1,829 6,933 5,211
Mortgage and other interest 439 268 1,417 1,036
Interest on notes payable 201 201
Depreciation and amortization 3,023 2,015 8,241 5,482
Provision for doubtful accounts,
net of recoveries (Note E) 230 283 783 473
----------------- -----------------
12,582 8,460 33,745 22,900
----------------- -----------------
Administrative expenses 567 690 2,156 1,934
----------------- -----------------
INCOME BEFORE GAIN ON SALE
OF PROPERTY AND SECURITIES 13,138 10,571 37,152 31,362
----------------- -----------------
Gain on sale of property - - 460 -
Gain on sale of securities, net - 631 531 933
------------------ ------------------
NET INCOME $13,138 $11,202 $38,143 $32,295
================== ==================
NET INCOME PER SHARE $.27 $.23 $.78 $.67
DIVIDENDS PER SHARE $.33 $.3175 $.9825 $.9525
WEIGHTED AVERAGE SHARES
OUTSTANDING 49,310 48,701 49,148 48,554
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)(IN THOUSANDS)
(Note D)
Nine Months Ended April 30,
1993 1994
________ _______
OPERATING ACTIVITIES
Net Income $38,143 $32,295
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 8,241 5,482
________ _______
46,384 37,777
Gain on sale of property (460) -
Gain on sale of securities, net (531) (933)
Changes in operating assets and liabilities, net
Increase in trade and notes receivable (3,236) (469)
Decrease / (Increase) in other receivables 331 (230)
Increase in allowance for doubtful accounts 108 446
(Decrease) / increase in other liabilities (139) 301
Increase in net sundry assets and liabilities (288) (997)
_______ _______
NET CASH PROVIDED BY OPERATING ACTIVITIES 42,169 35,895
_______ ______
INVESTING ACTIVITIES
Sales of marketable securities 42,223 17,577
Purchases of marketable securities (1,298) (24,707)
Net proceeds from the sale of property 1,996 -
Purchase and improvement of properties (160,715) (63,798)
Increase in notes receivable (300) -
Repayment of mortgage notes receivable 1,517 9,411
______ ______
NET CASH USED IN INVESTING ACTIVITIES (116,577) (61,517)
______ ______
FINANCING ACTIVITIES
Distributions to shareholders (48,255) (46,227)
Issuance of shares of beneficial interest pursuant
to dividend reinvestment plan 10,276 8,087
Issuance of shares of beneficial interest upon
exercise of stock options 287 516
Proceeds from short term borrowing 25,000 -
Principal payments on mortgages (246) (855)
Repayment of mortgages (7,214) (5,238)
Repayment of loans receivable for the purchase of
shares of beneficial interest 281 512
______ ______
NET CASH USED IN FINANCING ACTIVITIES (19,871) (43,205)
______ ______
DECREASE IN CASH AND CASH EQUIVALENTS (94,279) (68,827)
Cash and cash equivalents at beginning of year 102,312 177,045
______ ______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $8,033 $108,218
See accompanying notes to consolidated financial statements.
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 ("SEC") and, in the opinion of the Trust, include all
adjustments (consisting of normal recurring accruals) necessary for a fair
presentation of financial position, results of operations and cash flows.
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 nine months ended April 30, 1994 are not necessarily indicative of
the results to be expected for the full year. It is suggested that these
financial statements 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: Marketable securities
Equity securities are carried at the lower of cost or market while
debt securities are carried at cost.
Marketable securities consist of the following (in thousands):
4/30/94 7/31/93
------- -------
Equity securities 978 1,151
Debt securities 4,639 38,915
Insured bank
certificates of deposit 1,977 7,922
------- -------
7,594 47,988
======= =======
The aggregate market value of the marketable securities at April 30,
1994 and July 31, 1993 was $7,696,000 and $48,464,000, respectively.
Note C: Notes Payable
At December 30, 1993 the Trust entered into a 364 day unsecured
revolving credit facility providing for borrowings of up to $65
million. At the time of borrowing the Trust can choose from three
interest rate options. There are restrictive covenants that place a
ceiling on total indebtedness of the lesser of 50% of tangible net
worth or 250,000,000, a ceiling on mortgage indebtedness of
105,000,000, a minimum interest coverage ratio of 2.5 to 1 and a
minimum tangible net worth of 400,000,000. At April 30, 1994, the
average interest rate on outstanding notes was 4.58%.
Note D: Supplemental Cash Flow Information
State and local income taxes paid for the nine months ended April 30,
1994 and 1993 were $108,000 and $127,000, respectively.
Interest paid for the nine months ended April 30, 1994 and 1993 was
$1,914,000 and $1,178,000, respectively.
Interest costs capitalized for the nine months ended April 30, 1994
was $296,000.
The Trust entered into the following non-cash investing and financing
activities (in thousands):
April 30,
1994 1993
Loans to employees to exercise stock
options $ 319
Mortgage obligation assumed upon the
purchase of property $12,019 9,309
Accrued liability to be paid upon the
completion of a property expansion 3,506
Note E: Provision for Doubtful Accounts
The provision for doubtful accounts is net of recoveries. For the
none months ended April 30, 1994 and 1993 recoveries were $201,000 and
$409,000, respectively. For the three months ended April 30, 1994 and
1993 recoveries were $27,000 and $20,000, respectively.
Note F: Subsequent Events
Subsequent to April 30, 1994, the Trust purchased four shopping
centers for an aggregate purchase price of approximately $26,000,000.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
I. Liquidity and Capital Resources
On April 30, 1994 the Trust had $15,627,000 in
available cash, cash equivalents and marketable
securities.
During the nine month period ended April 30, 1994 the
Trust paid approximately $147,300,000 to acquire eleven
shopping centers (1.8 million gross leasable square
feet), three apartment properties (834 units) and the
capital stock of Factory Merchants Malls, Inc. whose
assets consisted of three factory outlet centers
(565,000 gross leasable square feet). The amount paid
does not include assumed mortgages in the amount of
$12,019,000.
Debt at April 30, 1994 consisted of $28,140,000 of mortgages
payable and short term notes payable of $25,000,000. The notes
payable are the result of the use of the Trust's $65,000,000
unsecured revolving credit facility which was put into place in
December, 1993. The Trust expects to increase the unsecured
revolving credit facility to $100 million.
The dividend reinvestment program provided $10,276,000
during the nine month period ended April 30, 1994. In
addition, the Trust made dividend distributions of
$48,255,000 to shareholders, paid $147,300,000 to
acquire new properties and spent approximately
$13,400,000 in improvements to properties.
Funds from operations (net income plus depreciation and
amortization of properties less gains from asset sales) increased
$8,549,000 to $45,393,000 from $36,844,000 in the prior year's
comparable nine month period.
II. Results of operations for the nine months ended April 30, 1994
and 1993
A. Revenues
Rental income and related revenues increased
$21,800,000 to $69,268,000. The increase was primarily
due to the acquisition of new properties which were
present in the current period but not in the prior
period. This was coupled with a rise in revenues in
all categories of properties owned in both periods.
Interest and dividend income decreased $4,943,000 due a
significantly reduced investment base during this
period compared to the prior year and the repayment of
mortgages receivable by the borrower. The lower
investment base is a result of the purchase of 25
properties (four factory outlet centers, 17 shopping
centers, 4 apartments) since July 31, 1992.
B. Operating Expenses
Operating costs and leasehold rents increased by
$5,472,000 to $16,170,000. The increase was due
primarily to the acquisition of new properties.
Real estate and other taxes increased by $1,722,000 to
$6,933,000. The increase was due to new property
acquisitions.
Interest expense increased $582,000 to $1,618,000. Mortgage
interest increased due to a higher level of debt caused by the
assumption of mortgages with the purchase of three properties,
out of 25, since August 1, 1992. The increase in interest
expense on notes payable was a result of use, for the first time,
of the Trust's $65 million unsecured line of credit.
Depreciation and amortization of properties increased
due to the acquisition of 25 properties.
Provision for doubtful accounts, net of recoveries
increased principally because provisions for losses
were higher and recoveries of previously reserved
uncollectible amounts were lower than in the comparable
period of the prior year.
C. Other (Income) and Expenses
Administrative expenses as a percentage of total
revenues decreased to 3.0% from 3.4%.
III. Results of operations for the three months ended April 30, 1994 and
1993
A. Revenues
Rental income and related revenues increased $8,052,000
to $25,388,000. The increase was due to the
acquisition of new properties which were present in the
current period but not in the prior period.
Interest and dividend income decreased $1,486,000 due a
significantly reduced investment base during this
period compared to the prior year. The lower investment
base is a result of the purchase of 21 properties
(three factory outlet centers, 14 shopping centers,
four apartments) since January 31, 1993.
B. Operating Expenses
Operating costs and leasehold rents increased by
$2,237,000 to $6,302,000. The increase was due
primarily to the acquisition of new properties.
Real estate and other taxes increased by $558,000 to
$2,387,000. The increase was due to new property
acquisitions.
Depreciation and amortization of properties increased
due to the acquisition of properties.
C. Other (Income) and Expenses
Administrative expenses as a percentage of total
revenues decreased to 2.2% from 3.5%.
Gains from the sale of securities were lower in the
current period. This is a non recurring item and there
were no transactions in the current period.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) During the period covered by this report the Trust filed the
following four Current Reports:
Form 8-K dated August 3, 1993 and Form 8-K/A containing
Amendment No. 1 dated October 6, 1993
Form 8-K dated November 17, 1993, Form 8-K/A
containing Amendment No. 1 dated January 13, 1994 and
Form 8-K/A containing Amendment No. 2 dated April 20,
1994.
Form 8-K dated February 10, 1994.
Form 8-K dated April 7, 1994
The Form 8-K filings summarized the acquisition of certain
assets.
(c) During the period covered by this report the Trust filed a Form
S-3 dated April 28, 1994. This preliminary prospectus
registered up to $250,000,000 of one or more of the following
securities: debt securities, preferred shares, depositary
shares, common shares, warrants.
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 9, 1994
NEW PLAN REALTY TRUST
By: /s/ Michael I. Brown
________________________
MICHAEL I. BROWN
Chief Financial Officer