=========================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) January 6, 1997 (October 16, 1996) NEW PLAN REALTY TRUST (Exact Name of Registrant as Specified in Charter) Massachusetts 0-7532 13-1995781 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) IdentificationNo.) 1120 Avenue of the Americas, New York, New York 10036 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (212) 869-3000 (Former Name or Former Address, if Changed Since Last Report) =========================================================================== 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 hereunto duly authorized. Date: January 6, 1997 NEW PLAN REALTY TRUST By:/s/ Michael I. Brown Michael I. Brown Chief Financial Officer and Controller Item 2. Acquisition or disposition of assets New Plan Realty Trust (the "Trust) purchased five properties for an aggregate purchase price of approximately $39.2 million, which was paid in cash and was the estimated fair market value of such properties. Additional information regarding the five properties is set forth below. Gross Property Date of Acquisition Acres Leasable Area Seller Occupancy DILLSBURG SHOPPING CENTER Dillsburg, PA 10/16/96 22 66,048 Frank A. Nardo 100% Principal tenants are: Giant Foods, Thrift Drug, Radio Shack, Little Caesars RENAISSANCE CENTER EAST Las Vegas, NV 10/17/96 15 145,578 Renaissance Associates, LP 94% Principal tenant is: Lucky's RUTLAND PLAZA St. Petersburg, FL 11/1/96 13 149,857 Rutland Plaza Co., a 98% California LP Principal tenants are: Winn Dixie, Echerd Drugs, Big Lots DELCO PLAZA Sterling Heights, MI 11/14/96 15 154,853 Sterling Heights 100% Development, Inc. Principal tenants are: Baby Superstore, Bed Bath & Beyond, Durham's, Perry Drug SOUTHFIELD PLAZA SHOPPING CENTER Bridgeview, IL 12/3/96 18 206,844 General American Life 88% Insurance Co. Principal tenants are: Dominick's Foods, Value City, Walgreens <TABLE/> Audited statements of revenue and certain operating expenses and pro forma financial information reflecting the acquisition of the five properties are included in this Current Report on Form 8-K. Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits. (a) and (b) Financial Statements of Businesses Acquired and Pro Forma Financial Information. 1. Report of Eichler, Bergsman & Co., LLP, Independent Certified Public Accountants, dated December 6, 1996. 2. Certain properties acquired - Historical Summary of Combined Revenues and Certain Operating Expenses for the year ended July 31, 1996. 3. In addition, the following pro forma financial information is provided to reflect all five properties acquired: (i) New Plan Realty Trust and Subsidiaries - Information pursuant to Rule 3-14 of Regulation S-X. (ii) New Plan Realty Trust and Subsidiaries - Pro forma condensed consolidated financial statements (unaudited): (a) Pro forma condensed consolidated statement of income for the year ended July 31, 1996. (b) Pro forma condensed consolidated statement of income for the three months ended October 31, 1996. (c) Pro forma condensed consolidated balance sheet as of October 31, 1996. (d) Notes to pro forma condensed consolidated financial statements. (c) Exhibits Included herewith is Exhibit No. 23, the Consent of the Independent Accountants. New Plan Realty Trust 1120 Avenue of the Americas New York, New York 10036 INDEPENDENT AUDITOR'S REPORT We have audited the accompanying Historical Summary of Combined Revenues and Certain Operating Expenses of Southfield Plaza Shopping Center, Delco Plaza, Renaissance Center East, Rutland Plaza, and Dillsburg Shopping Center (the "Properties") for the year ended July 31, 1996. This Historical Summary is the responsibility of New Plan Realty Trust's management. Our responsibility is to express an opinion on this Historical Summary based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The Historical Summary has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, and its use for any other purpose may be inappropriate. Accordingly, as described in the Note to the Historical Summary, the statement excludes interest, depreciation and general and administrative expenses for the period and is not intended to be a complete presentation of the Properties' revenues and expenses. In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the revenues and certain operating expenses (exclusive of interest, depreciation and general and administrative expenses) in conformity with generally accepted accounting principles. EICHLER, BERGSMAN & CO., LLP New York, New York December 6, 1996 CERTAIN PROPERTIES ACQUIRED HISTORICAL SUMMARY OF COMBINED REVENUES AND CERTAIN OPERATING EXPENSES FOR THE YEAR ENDED JULY 31, 1996 (IN THOUSANDS) Rental income $5,108 Repairs and maintenance $ 360 Real estate taxes 664 Other operating expenses 422 1,446 ------ ----- Excess of revenues over certain operating expenses $3,662 ====== NOTE: The Historical Summary of Combined Revenues and Certain Operating Expenses relates to the operation of Southfield Plaza Shopping Center, Delco Plaza, Renaissance Center East, Rutland Plaza, and Dillsburg Shopping Center (the "Properties") while under ownership previous to New Plan Realty Trust. The Summary includes the revenues and expenses of one property for the twelve months ended August 31, 1996. The Properties are shopping centers. The Summary has been prepared on the accrual method of accounting. Operating expenses include maintenance and repair expenses, utilities, real estate taxes, insurance and certain other expenses. In accordance with the regulations of the Securities and Exchange Commission, mortgage interest expense, depreciation, and general and administrative costs have been excluded from operating expenses, as they are dependent upon a particular owner, purchase price or financial arrangement. Minimum future rentals for the years ended July 31 under existing commercial operating leases at shopping centers being reported on are approximately as follows (in thousands); 1997 $4,371 2000 $ 3,345 1998 4,080 2001 3,004 1999 3,778 Thereafter 16,157 The above assumes that all leases which expire are not renewed, therefore, neither renewal rentals nor rentals from replacement tenants are included. Minimum future rentals do not include contingent rentals which may be received under certain leases on the basis of percentage of reported tenants' sales volumes, increases in Consumer Price Indices, common area maintenance charges and real estate tax reimbursement. NEW PLAN REALTY TRUST AND SUBSIDIARIES INFORMATION PURSUANT TO RULE 3-14 OF REGULATION S-X Part I MANAGEMENT ASSESSMENT Management's assessment of the five properties prior to acquisition includes, but is not limited to, the quality of the tenant base, regional demographics, the competitive environment, operating expenses and local property taxes. In addition, the physical aspect of the five properties, location, condition and quality of design and construction are evaluated. Management also always conducts Phase I environmental tests. All factors, when viewed in their entirety, have met management's acquisition criteria. Management is not aware of any material factors relating to the acquisition other than those discussed above. Part II ESTIMATES OF TAXABLE OPERATING INCOME AND FUNDS GENERATED FROM CERTAIN PROPERTIES ACQUIRED (UNAUDITED) a. The following presents an estimate of taxable operating income and funds generated from the operation of the acquired five properties for the year ended July 31, 1996 based on the Historical Summary of Combined Revenues and Certain Operating Expenses. These estimated results do not purport to present expected results of operations for the five properties in the future and were prepared on the basis described in the accompanying notes which should be read in conjunction herewith. Estimates of taxable operating income (In Thousands) Operating income before depreciation expense $3,662(*) Less: Estimated depreciation 785 --------- Estimated taxable operating income $2,877(*) ========== Estimates of funds generated: Estimates taxable operating income $2,877 Add: Estimated depreciation 785 ------- Estimate of funds generated $3,662(*) ========= (*) Estimates of operating income, net taxable income and funds generated do not include approximately $565,000 of revenue from leases that commenced during or subsequent to the year ended July 31, 1996. - ---------------------- b. Estimated taxable income for New Plan Realty Trust (including the five properties) for the year ended July 31, 1996 and the three months ended October 31, 1996 is approximately the same as Pro Forma net income reported on the Pro Forma Condensed Statements of Income (Unaudited). NEW PLAN REALTY TRUST AND SUBSIDIARIES NOTES TO ESTIMATES OF TAXABLE OPERATING INCOME AND FUNDS GENERATED FROM CERTAIN PROPERTIES ACQUIRED (UNAUDITED) Basis of Presentation 1. Estimated depreciation was based upon an allocation of the purchase price to land (20%) and building (80%) with the depreciation being taken over a 40 year life using the straight line method. 2. No income taxes have been provided because New Plan Realty Trust is taxed as a real estate investment trust under the provisions of the Internal Revenue Code. Accordingly, the Trust does not pay Federal income tax whenever income distributed to shareholders is equal to at least 95% of real estate investment trust taxable income and certain other conditions are met. NEW PLAN REALTY TRUST AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The pro forma condensed consolidated statements of income for the year ended July 31, 1996 and the three months ended October 31, 1996 reflect the acquisition of the five properties as if the transactions had occurred on August 1, 1995. This pro forma information is based on the historical statement of the Trust after giving effect to the acquisition of the five properties. The following unaudited condensed consolidated balance sheet as of October 31, 1996 reflects the acquisition of the five properties. The unaudited pro forma condensed consolidated financial statements have been prepared by New Plan Realty Trust management. The unaudited pro forma condensed consolidated statements of income may not be indicative of the results that would have actually occurred had the acquisitions been made on the date indicated or that may be achieved in the future. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with New Plan Realty Trust's audited consolidated financial statements as of July 31, 1996 and for the year then ended and the accompanying notes (which are contained in the Trust's Form 10-K for the year ended July 31, 1996). NEW PLAN REALTY TRUST AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) YEAR ENDED JULY 31, 1996 (In thousands except for per share amounts) PREVIOUSLY REPORTED (4) AS HISTORICAL PRO FORMA HISTORICAL PRO FORMA REVISED REPORTED ACQUISITON ADJUSTMENTS PRO FORMA ACQUISITION ADJUSTMENTS PRO FORMA RENTAL REVENUES $162,821 $5,108 $ 565 (2) $168,494 $13,526 $182,020 INTEREST AND DIVIDENDS 4,785 (947) (2) 3,838 ($1,120) 2,718 ------- ------ ---------- ------- ------- -------- -------- TOTAL REVENUE 167,606 5,108 (382) 172,332 13,526 (1,120) 184,738 OPERATING COSTS 57,302 1,446 58,748 5,104 63,852 DEPRECIATION EXPENSE 20,004 785 (2,3) 20,789 1,508 22,297 INTEREST EXPENSE 17,561 1,149 (2) 18,710 3,490 22,200 ------ ------ --------- ------- ------ ------- -------- TOTAL OPERATING EXPENSE 94,867 1,446 1,934 98,247 5,104 4,998 108,349 ------- ------ ------ -------- ------- ------ --------- 72,739 3,662 (2,316) 74,085 8,422 (6,118) 76,389 OTHER DEDUCTIONS 2,616 2,616 2,616 OTHER INCOME 398 398 398 ------- ------- ------- -------- ------- -------- -------- NET INCOME $ 70,521 $3,662 ($2,316) $ 71,867 $ 8,422 ($6,118) $ 74,171 ======== ======= ======== ======== ======= ======== ======== NET INCOME PER SHARE $ 1.25 $ 1.27 $ 1.31 AVERAGE SHARES OUTSTANDING 56,484 56,484 56,484 SEE ACCOMPANYING NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) TABLE/ NEW PLAN REALTY TRUST AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) THREE MONTHS ENDED OCTOBER 31, 1996 (In thousands except for per share amounts) HISTORICAL PRO FORMA AS REPORTED ACQUISITION ADJUSTMENTS PRO FORMA ----------- ----------- ----------- --------- REVENUES: RENTAL REVENUES $46,618 $ 1,277 $ 25 (2) $47,920 INTEREST AND DIVIDENDS 1,165 (207) (2) 958 ------- ------- --------- ------- TOTAL REVENUE 47,783 1,277 (182) 48,878 OPERATING EXPENSES: OPERATING COST 16,666 362 (29) (2) 16,999 DEPRECIATION EXPENSE 5,686 180 (2,3) 5,866 INTEREST EXPENSE 5,861 5,861 ------ ------- --------- ------ TOTAL OPERATING EXPENSES 28,213 362 151 28,726 ------- ------- --------- ------- 19,570 915 (333) 20,152 OTHER DEDUCTIONS 494 494 ------- -------- --------- ------- NET INCOME $19,076 $ 915 $ (333) $19,658 ======= ======== ========= ======= NET INCOME PER SHARE $ .33 $ .34 AVERAGE SHARES OUTSTANDING 58,132 58,132 SEE ACCOMPANYING NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NEW PLAN REALTY TRUST AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) AS OF OCTOBER 31, 1996 (In Thousands) ASSETS: REAL ESTATE $ 991,479 $20,667 $1,012,146 CASH, CASH EQUIVALENTS, MARKETABLE SECURITIES AND OTHER INVESTMENTS 25,672 (20,667) 5,005 OTHER 47,224 47,224 ---------- --------- TOTAL ASSETS $1,064,375 $1,064,375 ========== ========== LIABILITIES: MORTGAGES PAYABLE $ 48,842 $ 48,842 NOTES PAYABLE 322,525 322,525 OTHER LIABILITIES 31,085 31,085 ---------- ---------- 402,452 402,452 SHAREHOLDERS' EQUITY 661,923 661,923 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,064,375 $1,064,375 ========== ========== SEE ACCOMPANYING NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NEW PLAN REALTY TRUST AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Pro Forma Adjustments reflect the acquisition of the five properties using cash on hand and increased borrowings. 2. Pro Forma Adjustments to the unaudited Pro Forma Condensed Consolidated Statement of Income for the year ended July 31, 1996 and for the three months ended October 31, 1996 include adjustments to reflect the acquisition of the five properties as if they had been acquired on August 1, 1995 (See Note 3.) These adjustments include a reduction in interest income due to the use of cash and cash equivalents to purchase the aforementioned properties and an increase in interest expense due to an increase in debt to partially finance such acquisitions. The interest rate used for calculating the reduction in interest income was 4%, representing the average rate of interest earned on the Trust's cash balances. The interest rate used for calculating the interest expense was approximately 7.4%, the weighted average interest rate on notes payable. In addition, the adjustment to Rental Revenue reflects transactions that occurred during or subsequent to the year ended July 31, 1996 and are not fully reflected in the historical acquisition amounts. 3. Estimated depreciation was based upon an allocation of the purchase price to land (20%) and building (80%) with the depreciation being taken over a 40 year life using the straight line method. 4. Refer to Form 8-K dated November 4, 1996 for previously reported amounts. EXHIBIT INDEX Exhibit Number Description 23 Consent of Independent Accountants