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 JANUARY 31, 1996
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 February 26, 1996 was 57,698,857.
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,
___________________ _________________
1996 1995 1996 1995
____ ____ ____ ____
REVENUES
________
Rental income and
related revenues $39,935 $31,227 $76,398 $60,365
Interest and dividend
income 1,588 835 2,920 1,658
________ ________ ________ ________
41,523 32,062 79,318 62,023
________ ________ ________ ________
OPERATING EXPENSES
__________________
Operating costs 9,868 7,632 18,289 14,557
Leasehold rents 159 138 327 277
Real estate and
other taxes 3,976 3,060 7,269 5,751
Interest expense 4,410 921 8,456 1,662
Depreciation and amortization 4,779 3,656 9,302 7,129
Provision for doubtful accounts,
net of recoveries (Note C) 410 131 734 369
TOTAL OPERATING EXPENSES 23,602 15,538 44,377 29,745
________ ________ ________ ________
Administrative expenses 691 677 1,438 1,172
________ ________ ________ ________
INCOME BEFORE GAIN ON SALE
OF PROPERTY AND SECURITIES 17,230 15,847 33,503 31,106
Gain on sale of property
Gain on sale of securities, net 782 782
________ ________ ________ ________
NET INCOME $18,012 $15,847 $34,286 $31,106
======== ======== ======== ========
NET INCOME PER SHARE $.31 $.30 $.62$.59
DIVIDENDS PER SHARE $.3475 $.3375$.6925$.6725
WEIGHTED AVERAGE SHARES
OUTSTANDING 56,942 52,792 55,131 52,719
See accompanying notes to consolidated financial statements.
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JANUARY 31,
1996 JULY 31,
(UNAUDITED) 1995
_________ ________
ASSETS
______
Real estate, at cost
Land $160,347 $135,101
Buildings and improvements 741,326 629,979
________ _______
901,673 765,080
Less accumulated depreciation
and amortization 72,826 64,007
________ _______
828,847 701,073
Cash and cash equivalents 26,015 51,889
Marketable securities 4,143 6,051
Mortgages and notes receivable 22,374 22,874
Receivables
Trade and notes, net of allowance
for doubtful accounts 10,546 6,864
Other 1,474 1,122
Prepaid expenses and deferred charges 6,363 5,056
Other assets 2,717 1,707
________ ________
TOTAL ASSETS $902,479 $796,636
======== ========
LIABILITIES
___________
Mortgages payable $44,939 $27,295
Senior Notes, net of unamortized discount 179,422 179,357
Other liabilities 19,404 16,745
Tenants' security deposits 2,816 2,710
________ ________
TOTAL LIABILITIES 246,581 226,107
________ ________
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 (January 31, 1996 -
57,698,857; July 31, 1995 - 52,262,565) 711,635 622,562
Less loans receivable for the purchase of
shares of beneficial interest 3,256 3,370
Add unrealized gain on securities reported
at fair value 437 182
________ ________
708,816 619,374
Less distributions in excess of net income 52,918 48,845
________ ________
TOTAL SHAREHOLDERS' EQUITY 655,898 570,529
________ ________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $902,479 $796,636
======== ========
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)
1996 1995
_______ _______
OPERATING ACTIVITIES
____________________
Net Income $34,286 $31,106
Adjustment to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 9,302 7,129
________ ________
43,588 38,235
Gain on sale of property (782) --
Gain on sale of securities, net (1) --
Changes in operating assets and
liabilities, net Increase in
trade and notes receivable (4,151) (844)
(Increase)/decrease in other
receivables (352) 198
Increase in allowance for
doubtful accounts 469 236
Increase in other liabilities 2,659 309
Increase in net sundry assets
and liabilities (2,278) (217)
________ ________
NET CASH PROVIDED BY OPERATING ACTIVITIES 39,152
________ ________
INVESTING ACTIVITIES
____________________
Sales of marketable securities 2,162 417
Net proceeds from the sale of property 3,052 --
Purchase and improvement of properties (117,712) (58,960)
Repayment of mortgage notes receivable 500 18
________ ________
NET CASH USED IN INVESTING ACTIVITIES (111,998) (58,525)
________ ________
FINANCING ACTIVITIES
____________________
Distributions to shareholders (38,359) (35,427)
Issuance of shares of beneficial
interest pursuant to a public offering 81,228 --
Issuance of shares of beneficial interest
pursuant to dividend reinvestment plan 7,681 6,884
Issuance of shares of beneficial interest
upon exercise of stock options 164 21
Proceeds from short-term debt 63,000
Repayment of short-term debt (7,500)
Principal payments on mortgages (239) (150)
Repayment of mortgages (3,617) --
Repayment of loans receivable for the purchase
of shares of beneficial interest 114 172
_______ _______
NET CASH PROVIDED BY FINANCING ACTIVITIES 46,972 27,000
_______ _______
(DECREASE)/INCREASE IN CASH AND
CASH EQUIVALENTS (25,874) 6,392
Cash and cash equivalents at beginning of year 51,889 3,116
_______ _______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $26,015 $ 9,508
======= =======
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, 1996 and 1995 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 six months ended January 31, 1995
were $81,000. There were no state and local taxes paid for the six months
ended January 31, 1996.
Interest paid for the six months ended January 31, 1996 and 1995 was $8,085,000
and $2,640,000, respectively.
Interest costs capitalized for the six months ended January 31, 1996 and 1995
were $70,000 and $978,000, respectively.
The Trust entered into the following non-cash investing and financing
activities (in thousands) for the six months ended January 31,:
1996 1995
_______ ______
Mortgage obligations assumed upon $21,500 $5,443
the purchase of property
Note C: Provision for Doubtful Accounts
The provision for doubtful accounts is net of recoveries. For the six months
ended January 31, 1996 and 1995, recoveries were $340,000 and $344,000,
respectively. For the three months ended January 31, 1996 and 1995, recoveries
were $79,000 and $224,000, respectively.
Note D: Pro Forma Financial Information
The Trust acquired nine shopping centers and one apartment complex during the
six months ended January 31, 1996. The pro forma financial information for the
six months ended January 31, 1996 and 1995 shown below is based on the
historical statements of the Trust after giving effect to the acquisitions as
if such acquisitions took place on August 1, 1995 and 1994, respectively. The
approximately $131.5 million aggregate acquisition cost included an existing
mortgage and $110.0 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 dates indicated. Also, they may not
be indicative of the results that may be achieved in the future.
Six months ended January 31, 1996 1995
____________________________________________________
Pro forma total revenues $83,532 $66,237
Pro forma net income $35,064 $31,884
Pro forma earnings per share $.64 $.60
____________________________________________________
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 Compensa-
tion," 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.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
I. Liquidity and Capital Resources
On January 31, 1996 the Trust had $30.2 million in available cash, cash
equivalents and marketable securities.
During the six month period ended January 31, 1996, the Trust paid
approximately $110.0 million to acquire nine shopping centers (1.8 million
gross leasable square feet) and one apartment property (208 units). In
November 1995 the Trust sold a shopping center in Chinoe, Kentucky for
approximately $3.1 million.
Debt at January 31, 1996 consisted of $44.9 of mortgages payable and
Senior Notes payable of $179.4 million.
The dividend reinvestment program provided $7.7 million during the six
month period ended January 31, 1996. In addition, the Trust made dividend
distributions of $38.4 million to shareholders and spent $7.7 million in
expansion and improvements to properties.
Funds from operations, defined as net income plus depreciation and
amortization of real estate less gains from asset sales, increased $4.6
million to $42.8 ($.78/share) from $38.2 million ($.73/share) in the prior
year's comparable six month period.
In November 1995 the Trust issued 4,060,000 Shares of Beneficial Interest.
Proceeds, net of commissions and offering costs, were $81.2 million.
II. Results of operations for the six months ended January 31, 1996 and 1995
A. Revenues
Rental income and related revenues increased $16.0 million to $76.4
million. The increase came primarily from properties which were
acquired during the six months ended January 31, 1996 or were owned
less than the full six months ended January 31, 1995. In addition,
there was an increase in revenues in all categories of properties
owned in both periods.
Interest and dividend income increased $1.3 million to $2.9 million.
This was a result of higher investment balances in the current
period.
B. Operating Expenses
Operating costs and leasehold rents increased $3.8 million to $18.6
million. The increase was due primarily to the acquisition of
properties.
Real estate and other taxes increased $1.5 million to $7.3 million.
The increase was due primarily to the acquisition of properties.
Interest expense increased approximately $6.8 million to $8.5
million. The increase was due primarily to the issuance of Senior
Notes payable in the second half of fiscal 1995 which were used to
fund the Trust's property acquisition program.
Depreciation and amortization of properties increased $2.2 million to
$9.3 million. The increase was due primarily to the acquisition of
properties and the additional amortization resulting from increased
spending on tenant alterations.
Provision for doubtful accounts, net recoveries, increased $365,000
to $734,000. The increase was due to higher provisions for
uncollectible amounts.
C. Administrative Expenses
Administrative expenses are 1.8% of total revenues. The increase of
$266,000 is primarily due to higher personnel costs.
D. Gains on the Sale of Property and Securities
Gains on the sale of property and securities increased by $783,000.
During the current period the Trust sold a shopping center in Chinoe,
Kentucky. There were no sales in the preceding year's comparable
period.
III. Results of operations for the three months ended January 31, 1996 and 1995
A. Revenues
Rental income and related revenues increased $8.7 million to $39.9
million. The increase came primarily from properties which were
acquired during the three months ended January 31, 1996 or were owned
less than the full three months ended January 31, 1995. In addition,
there was an increase in revenues in all categories of properties
owned in both periods.
Interest and dividend income increased $753,000 to $1.6 million.
This was a result of higher investment balances in the current
period.
B. Operating Expenses
Operating costs and leasehold rents increased $2.3 million to $10.0
million. The increase was due primarily to the acquisition of
properties.
Real estate and other taxes increased approximately $916,000 to $4.0
million. The increase was due primarily to the acquisition of
properties.
Interest expense increased approximately $3.5 million to $4.4
million. The increase was due primarily to the issuance of Senior
Notes payable in the second half of fiscal 1995 which were used to
fund the Trust's property acquisition program.
Depreciation and amortization of properties increased $1.1 million to
$4.8 million. The increase was due primarily to the acquisition of
properties and the additional amortization resulting from a higher
level of spending on tenant alterations.
Provision for doubtful accounts, net recoveries, increased $279,000
to $410,000. The increase is due to a lower level of bad debt
recoveries and higher provisions for uncollectibles in the current
period.
C. Administrative Expenses
Administrative costs for the current period are 1.7% of revenues, a
decrease from the prior period's 2.1%.
D. Gains on the Sale of Property
Gains on the sale of property increased by $782,000 because of the
sale of a shopping center in Chinoe, Kentucky. There were no
property sales in the prior comparable period.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
An annual meeting of shareholders was held on December 13, 1995. Proxies
for the meeting were solicited by the registrant pursuant to Regulation 14
under the Securities Exchange Act of 1934.
There were no solicitations in opposition to management's nominees as
listed in the proxy statement under Proposal One and all of such nominees were
elected. In addition, there were no solicitations in opposition to
management's Proposals Two, Three, Four and Five as listed in the proxy
statement and all of such Proposals received the necessary votes for approval
by the shareholders.
1. Proposal One - Election of Trustees
(a) Votes of 48,645,675.964 shares were cast for the election of
Melvin Newman as a Trustee; votes of 577,874.195 were withheld.
(b) 48,711,892.283 shares were cast for the election of Raymond H.
Bottorf as a Trustee; votes of 511,657.876 were withheld.
(c) Votes of 48,713,898.609 shares were cast for the election of
Gregory White as a Trustee; votes of 509,651.550 were withheld.
There were no abstentions or broker non-votes in connection with
Proposal One.
2. Proposal Two - An Amendment to the Trust's Declaration of Trust
Relating to the Duration of the Trust.
Votes of 48,516,547.932 were cast for Proposal Two; votes of
227,685.073 were against; votes of 479,317.154 abstained. There
were no broker non-votes.
3. Proposal Three - An Amendment to the Trust's Declaration of Trust
Relating to Certain Transactions with Affiliates.
Votes of 36,077,419.691 were cast for Proposal Three; votes of
1,157,584.631 were against; votes of 683,307.837 abstained. There
were 11,305,238 broker non-votes.
4. Proposal Four - An Amendment to the Trust's Declaration of Trust
Relating to the Size of the Board of Trustees.
Votes of 47,017,120.401 were cast for Proposal Three; votes of
1,578,895.167 were against; votes of 627,534.591 abstained. There
were no broker non-votes.
5. Proposal Five - An Amendment to the Trust's Declaration of Trust
Relating to Share Ownership Limitations.
Votes of 48,042,556.562 were cast for Proposal Three; votes of
505,388.264 were against; votes of 675,605.333 abstained. There
were no broker non-votes.
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 November 9, 1995 to Form 8-K
filed October 20, 1995. This report contained items 5 and 7.
2. Form 8-K/A Amendment No. 2, dated December 22, 1995 to Form 8-K
filed October 20, 1995. This report contained items 2 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: March 8, 1996
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 Six Months
Ended 1/31/1996
_______________
Primary EPS Fully Diluted
___________ _____________
1 PROCEEDS UPON EXERCISE OF OPTIONS $41,135,425 $41,135,425
2 MARKET PRICE OF SHARES
CLOSING $22.000
AVERAGE $21.692
5 TREASURY SHARES THAT COULD BE PURCHASED 1,896,341 1,869,792
6 OPTION SHARES OUTSTANDING 2,072,050 2,072,050
7 COMMON STOCK EQUIVALENTS (EXCESS SHARES
UNDER OPTION OVER TREASURY SHARES THAT
COULD BE REPURCHASED) 175,709 202,258
8 AVERAGE NUMBER OF SHARES OUTSTANDING 55,131,368 55,131,368
9 TOTAL OF COMMON AND COMMON EQUIVALENT SHARES 55,307,077 55,333,626
10 NET INCOME FOR THE PERIOD $34,286,000 $34,286,000
11 EARNINGS PER SHARE $0.62 $0.62
12 REPORTED EARNINGS PER SHARE $0.62 Not applicable