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 AND EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND 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 November 27, 1995 was 57,441,422. Total number of pages 12 NEW PLAN REALTY TRUST AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED OCTOBER 31, (UNAUDITED) (IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS) 1995 1994 _______ _______ REVENUES ________ Rental income and related revenues $36,463 $29,138 Interest and dividend income 1,332 823 _______ _______ 37,795 29,961 _______ _______ OPERATING EXPENSES __________________ Operating costs 8,421 6,925 Leasehold rents 168 139 Real estate and other taxes 3,293 2,691 Interest expense 4,046 741 Depreciation and amortization 4,523 3,473 Provision for doubtful accounts, net of recoveries (Note C) 324 238 _______ _______ TOTAL OPERATING EXPENSES 20,775 14,207 _______ _______ Administrative expenses 747 495 _______ _______ INCOME BEFORE GAIN ON SALE OF SECURITIES 16,273 15,259 _______ _______ Gain on sale of securities, net 1 -- _______ _______ NET INCOME $16,274 $15,259 ======= ======= NET INCOME PER SHARE $ .31 $ 0.29 DIVIDENDS PER SHARE $ .345 $ 0.335 WEIGHTED AVERAGE SHARES OUTSTANDING 53,320 52,646 See accompanying notes to consolidated financial statements. NEW PLAN REALTY TRUST AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) OCTOBER 31, JULY 31, 1995 1995 (UNAUDITED) _________ ________ ASSETS ______ Real estate, at cost Land $139,511 $135,101 Buildings and improvements 655,520 629,979 ________ ________ 795,031 765,080 Less accumulated depreciation and amortization 68,464 64,00 ________ ________ 726,567 701,073 Cash and cash equivalents 26,299 51,889 Marketable securities 5,452 6,051 Mortgages and notes receivable 22,624 22,874 Receivables Trade and notes, net of allowance for doubtful accounts 8,334 6,864 Other 1,182 1,122 Prepaid expenses and deferred charges 6,331 5,056 Other assets 2,760 1,707 ________ ________ TOTAL ASSETS $799,549 796,636 ======== ======== LIABILITIES ___________ Mortgages payable $27,156 $27,295 Senior Notes, net of unamortized discount 179,389 179,357 Other liabilities 17,852 16,745 Tenants' security deposits 2,708 2,710 ________ ________ TOTAL LIABILITIES 227,105 226,107 ________ ________ 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 (October 31, 1995 - 53,441,422; July 31, 1995 - 52,262,565) 626,328 622,562 Less loans receivable for the purchase of shares of beneficial interest 3,260 3,370 Add unrealized gain on securities reported at fair value 324 182 ________ ________ 623,392 619,374 Less distributions in excess of net income 50,948 48,845 ________ ________ TOTAL SHAREHOLDERS' EQUITY 572,444 570,529 ________ ________ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $799,549 $796,636 ======== ======== See accompanying notes to consolidated financial statements. NEW PLAN REALTY TRUST AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTH ENDED OCTOBER 31, (UNAUDITED)(IN THOUSANDS) 1995 1994 ________ ________ OPERATING ACTIVITIES ____________________ Net Income $16,274 $15,259 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,523 3,473 _______ _______ 20,797 18,732 Gain on sale of securities, net (1) -- Changes in operating assets and liabilities, net Increase in trade and notes receivable (1,735) (208) Increase in other receivables (60) (204) Increase in allowance for doubtful accounts 265 230 Increase in other liabilities 1,107 1,243 Increase in net sundry assets and liabilities (2,362) (160) _______ _______ NET CASH PROVIDED BY OPERATING ACTIVITIES 18,011 19,633 _______ _______ INVESTING ACTIVITIES ____________________ Sales of marketable securities 740 302 Purchase and improvement of properties (29,951) (38,408) Repayment of mortgage notes receivable 250 9 _______ _______ NET CASH USED IN INVESTING ACTIVITIES (28,961) (38,097) _______ _______ FINANCING ACTIVITIES ____________________ Distributions to shareholders (18,377) (17,620) Issuance of shares of beneficial interest pursuant to dividend reinvestment plan 3,602 3,395 Issuance of shares of beneficial interest upon exercise of stock options 164 19 Repayment of short-term debt -- (7,500) Proceeds from short-term debt -- 39,000 Principal payments on mortgages (139) (81) Repayment of loans receivable for the purchase of shares of beneficial interest 110 2 _______ _______ NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES (14,640) 17,215 _______ _______ DECREASE IN CASH AND CASH EQUIVALENTS (25,590) (1,249) Cash and cash equivalents at beginning of year 51,889 3,116 _______ _______ CASH AND CASH EQUIVALENTS AT END OF PERIOD $26,299 $ 1,867 ======= ======= 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 periods ended October 31, 1995 and 1994 are not necessarily indicative of the results 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: Supplemental Cash Flow Information State and local income taxes paid for the three months ended October 31, 1995 and 1994 were $1,000 and $41,000, respectively. Interest paid for the three months ended October 31, 1995 and 1994 was $4,747,000 and $1,005,000, respectively. Interest costs capitalized for the three months ended October 31, 1995 were $35,000. Note C: Provision for Doubtful Accounts The provision for doubtful accounts is net of recoveries. For the three months ended October 31, 1995 and 1994, recoveries were $260,000 and $120,000, respectively. Note D: Purchase of Properties The Trust has entered into a contract to purchase eight shopping centers containing approximately 1.6 million gross rentable square feet for an aggregate price of approximately $117 million. The properties are located in Michigan (6), New York (1) and Ohio (1). The Trust is in the process of completing its due diligence review. Note E: Impact of New Accounting Statement In October 1995, the Financial Accounting Standards Board issued its Statement of Financial Accounting Standards No. 123 "Accounting for Stock- Based Compensation," which will be effective for financial statements issued for fiscal years beginning after December 15, 1995. The Trust is currently evaluating the impact of this statement. Note F: Subsequent Events On November 14, 1995 the Trust issued 4,000,000 shares of beneficial interest through a public offering. Proceeds received by the Trust, net of issuing costs and commissions, were $80,020,000. On November 10, 1995 the Trust's unsecured revolving credit facility, which provides for up to $100 million in borrowings, was extended to November 8, 1996. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS I. Liquidity and Capital Resources On October 31, 1995 the Trust had $31,751,000 in available cash, cash equivalents and marketable securities. During the three month period ended October 31, 1995, the Trust paid approximately $26,500,000 to acquire two shopping centers (396,000 gross leasable square feet) and one apartment property (208 units). Debt at October 31, 1995 consisted of $27,156,000 of mortgages payable and senior notes payable of $179,389,000. The dividend reinvestment program provided $3,602,000 during the three month period ended October 31, 1995. In addition, the Trust made dividend distributions of $18,377,000 to shareholders and paid $3,451,000 for improvements to existing properties. Funds from operations, defined as net income plus depreciation and amortization of real estate less gains from asset sales, increased $2,064,000 to $20,796,000 ($.39/share) from $18,732,000 ($.36/share) in the prior year's comparable three month period. The Trust has entered into a contract to purchase eight shopping centers containing approximately 1.6 million gross rentable square feet for an aggregate price of approximately $117 million. The properties are located in Michigan (6), New York (1) and Ohio (1). The Trust is in the process of completing its due diligence review. II. Results of operations for the three months ended October 31, 1995 and 1994 A. Revenues Rental income and related revenues increased $7.3 million to $36.5 million. The increase came primarily from the acquisition of properties. All property categories contributed to the revenue increase. Interest and dividend income increased $509,000 to $1,332,000. This was due primarily to higher investment balances from funds received from the sale of Senior Notes that had not yet been invested in real estate. B. Operating Expenses Operating costs and leasehold rents increased $1.5 million to $8.4 million. This was due to the aforementioned acquisition of properties. Real estate and other taxes increased $602,000 to $3.3 million. The major reason for the increase was the aforementioned acquisition of properties. Interest expense increased approximately $3.3 million to $4 million. The increase was due to the issuance of Senior Notes payable which were used to fund the Trust's property acquisition program. Depreciation and amortization of properties increased $1.1 million to $4.5 million. The increase came from the acquisition and expansion of properties. Provision for doubtful accounts, net recoveries, increased $86,000 to $324,000. Provisions for uncollectables increased $215,000 and recoveries increased $140,000. C. Administrative Expenses Administrative expenses for the current period are 2% of revenues. The $252,000 increase is due primarily to increased personnel related costs. III. Impact of New Accounting Statement In October 1995, the Financial Accounting Standards Board issued its Statement of Financial Accounting Standards No. 123 "Accounting for Stock- Based Compensation," which will be effective for financial statements issued for fiscal years beginning after December 15, 1995. The Trust is currently evaluating the impact of this statement. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit 11 - Statement Regarding Computation of Per Share Earnings 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/A Amendment No. 1 dated August 9, 1995 to Form 8-K filed July 25, 1995. This report contained item 7. 2. Form 8-K dated October 20, 1995 and 8-K/A Amendment No. 1 dated November 7, 1995 and are reports contained items 5 and 7. SIGNATURE _________ Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: December 7, 1995 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 27 Financial Data Schedule EXHIBIT 11 STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS _______________________________ For The Three Months ____________________ Ended10/31/1995 _______________ Primary EPS Fully Diluted ___________ _____________ 1 PROCEEDS UPON EXERCISE OF OPTIONS $41,218,425 $41,218,425 2 MARKET PRICE OF SHARES CLOSING $22,000 AVERAGE $22,083 5 TREASURY SHARES THAT COULD BE PURCHASED 1,866,523 1,875,565 6 OPTION SHARES OUTSTANDING 2,076,050 2,076,050 7 COMMON STOCK EQUIVALENTS (EXCESS SHARES UNDER OPTION OVER TREASURY SHARES THAT COULD BE REPURCHASED) 209,527 202,485 8 AVERAGE NUMBER OF SHARES OUTSTANDING 53,320,429 53,320,429 9 TOTAL OF COMMON AND COMMON EQUIVALENT SHARES 53,529,956 53,522,914 10 NET INCOME FOR THE PERIOD 16,273,915 16,273,915 11 EARNINGS PER SHARE .30 .30 12 REPORTED EARNINGS PER SHARE Not Applicable