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 OCTOBER 31, 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 December 1, 1997 was
59,168,706.
Total number of pages 11
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED OCTOBER 31,
(UNAUDITED)
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
REVENUES 1997 1996
---- ----
Rental and
related revenues $58,565 $46,618
Interest and dividend
income 942 1,165
------- -------
59,507 47,783
OPERATING EXPENSES ------ ------
Operating costs 15,004 11,487
Leasehold rents 168 165
Real estate and other
taxes 5,244 4,447
Interest expense 8,553 5,861
Depreciation and amortization 7,450 5,686
Provision for doubtful accounts,
net of recoveries (Note C) 855 567
----- -----
TOTAL OPERATING EXPENSES 37,274 28,213
------ ------
22,233 19,570
Administrative expenses 629 494
------ ------
INCOME BEFORE LOSS ON SALE
OF PROPERTY 21,604 19,076
Loss on sale of property (67) --
------- ------
NET INCOME 21,537 19,076
PREFERRED STOCK DIVIDEND (1,463) --
------- ------
NET INCOME APPLICABLE TO SHARES
OF BENEFICIAL INTEREST $20,074 $19,076
======= =======
NET INCOME PER SHARE OF BENEFICIAL INTEREST $ .34 $ .33
CASH DISTRIBUTION PER SHARE OF BENEFICIAL
INTEREST $ .365 $ .355
WEIGHTED AVERAGE SHARES OF BENEFICIAL
INTEREST OUTSTANDING 59,003 58,132
See accompanying notes to consolidated financial statements.
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
OCTOBER 31, JULY 31,
1997 1997
(UNAUDITED)
----------- -----------
ASSETS
Real estate, at cost
Land $ 241,400 $ 232,502
Buildings and improvements 1,080,114 1,045,273
----------- ----------
1,321,514 1,277,775
Less accumulated depreciation
and amortization 113,199 105,866
----------- ----------
1,208,315 1,171,909
Cash and cash equivalents 8,900 42,781
Marketable securities 2,067 2,034
Mortgages and notes receivable 22,954 23,107
Receivables
Trade and notes, net of allowance
for doubtful accounts 12,356 12,035
Other 1,463 1,464
Prepaid expenses and deferred charges 8,294 5,000
Other assets 2,765 2,814
----------- ----------
TOTAL ASSETS $ 1,267,114 $1,261,144
=========== ==========
LIABILITIES
Mortgages payable $ 64,999 $ 65,573
Notes payable, net of unamortized discount 412,672 412,634
Other liabilities 35,390 33,359
Tenants' security deposits 5,039 4,623
----------- ----------
TOTAL LIABILITIES 518,100 516,189
----------- ----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred shares, par value $1.00,
authorized 1,000,000 shares; issued
and outstanding (1997 - 150,000 Series A
Cumulative Preferred Shares, 1996 - none),
$75,000,000 redemption value 72,775 72,775
Shares of beneficial interest without par
value, unlimited authorization; issued
and outstanding (October 31, 1997 -
59,166,606; July 31, 1997 - 58,934,371) 743,198 738,011
Less loans receivable for the purchase of
shares of beneficial interest 2,771 2,814
Add unrealized gain on securities reported
at fair value 1,090 1,057
------ -----
814,292 809,029
Less distributions in excess of net
income 65,278 64,074
------ ------
TOTAL SHAREHOLDERS' EQUITY 749,014 744,955
TOTAL LIABILITIES AND SHAREHOLDERS' ------- -------
EQUITY $ 1,267,114 $1,261,144
=========== ==========
See accompanying notes to consolidated financial statements.
NEW PLAN REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED OCTOBER 31,
(UNAUDITED)(IN THOUSANDS)
1997 1996
OPERATING ACTIVITIES ---- ----
Net Income $ 21,537 $ 19,076
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 7,450 5,686
Loss on sale of property 67 --
------- -------
29,054 24,762
Changes in operating assets and
liabilities, net
Increase in trade and notes receivable (826) (675)
Decrease in other receivables 1 90
Increase in allowance for doubtful accounts 505 231
Increase in other liabilities 2,031 2,456
Increase in net sundry assets and liabilities (2,900) (2,833)
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 27,865 24,031
------ ------
INVESTING ACTIVITIES
Sale of marketable securities 15 32
Purchase of marketable securities (16) --
Purchase and improvement of properties (43,746) (101,666)
Costs from the sale of property (67) --
Repayment of mortgage notes receivable 152 12
------ -------
NET CASH USED IN INVESTING ACTIVITIES (43,662)(101,622)
-------- --------
FINANCING ACTIVITIES
Distributions to shareholders (22,741) (20,614)
Proceeds from the dividend reinvestment plan 4,300 3,785
Repayment of short-term debt -- (19,500)
Proceeds from the exercise of stock options 887 96
Proceeds from the sale of notes -- 133,000
Principal payments on mortgages (574) (94)
Repayment of loans receivable for the purchase
of shares of beneficial interest 44 26
------- --------
NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES (18,084) 96,699
-------- --------
(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (33,881) 19,108
Cash and cash equivalents at beginning of year 42,781 4,300
-------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 8,900 $ 23,408
========= =========
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, 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 three months ended
October 31, 1997 and 1996 were $81,000 and $0, respectively.
Interest paid for the three months ended October 31, 1997 and
1996 was $8,852,000 and $5,260,000, respectively.
Note C: Provision for Doubtful Accounts
The provision for doubtful accounts is net of recoveries; for the
three months ended October 31, 1997 and 1996, recoveries were
$10,000 and $16,000, respectively.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
I. Liquidity and Capital Resources
On October 31, 1997 the Trust had approximately $11.0
million in available cash, cash equivalents and marketable
securities.
During the three month period ended October 31, 1997, the
Trust paid approximately $37.7 million to acquire three
shopping centers (479,000 gross leasable square feet) and
two apartment properties (604 units).
Debt at October 31, 1997 consisted of $65.0 million of
mortgages payable and $412.7 million of notes payable.
In November 1997 the Trust renewed its unsecured revolving
credit agreement with The Bank of New York which provides
for up to $50 million in borrowing through November 1998.
There are restrictive covenants that limit total
indebtedness to 50% of total capitalization, and mortgage
debt to 40% of total capitalization. The credit agreement
also requires a minimum interest coverage ratio of 2 to 1
and a minimum tangible net worth of $500 million.
The Trust's dividend reinvestment program provided $4.3
million during the three month period ended October 31,
1997. In addition, the Trust made dividend distributions of
$22.7 million to shareholders and paid $6.0 million for
improvements to existing properties.
Funds from operations applicable to shares of beneficial
interest, defined as net income plus depreciation and
amortization of real estate plus losses from asset sales
less preferred stock dividends, increased $2.8 million to
$27.6 million ($.47/share) from $24.8 million ($.43/share)
in the prior year's comparable three month period.
II. Results of operations for the three months ended October 31,
1997 and 1996
A. Revenues
Total revenues increased approximately $11.7 million to
$59.5 million. The increase came primarily as a result
of the acquisition of 34 properties since July 1996 and
the opening of the Six Flags Factory Outlet in the
Spring of 1997.
B. Operating Expenses
Operating costs and leasehold rents increased
approximately $3.5 million to $15.2 million, reflecting
the acquisition of properties.
Real estate and other taxes increased approximately $.8
million to $5.2 million. The principal reason for this
increase was the larger portfolio of properties.
Interest expense increased approximately $2.7 million
to $8.6 million. This increase was due to the
issuance, since October 1996 of $164 million of notes
which were used to fund the Trust's property
acquisition program.
Depreciation and amortization of properties increased
approximately $1.8 million to $7.5 million. This
increase was the result of the acquisition of
properties.
Provision for doubtful accounts, net of recoveries,
increased $288,000 to $855,000. This was due to an
increase in delinquencies and a higher level of
revenue.
C. Administrative Expenses
Administrative expenses as a percent of revenue was
constant at 1% compared to last year's comparable
period.
III. New Accounting Standards
During 1997, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards: (i) No. 128
"Earnings Per Share" ("SFAS 128"), which will be effective
for financial statements for both interim and annual periods
ending after December 15, 1997, (ii) No. 129 "Disclosure of
Information About Capital Structure" ("SFAS 129"), which is
effective for fiscal years ending after December 15, 1997,
(iii) No. 130 "Reporting Comprehensive Income" ("SFAS 130"),
which is for fiscal years beginning after December 15, 1997,
and (iv) No. 131 "Disclosures About Segments of an
Enterprise and Related Information" ("SFAS 131"), which is
for fiscal years beginning after December 15, 1997.
Management believes that the implementation of SFAS 128, 129
and 130 will not have a material impact on the Trust's
financial statements. The Trust has yet to determine the
impact of SFAS 131.
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 12.1 - Ratio of Earnings to Fixed Charges
Exhibit 12.2 - Calculation of Ratio of Earnings to
Fixed Charges Three Months Ended
October 31, 1997
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:
Form 8-K/A, Amendment 1 dated September 19, 1997.
This report amended Form 8-K dated July 31, 1997.
It contains items 5 and 7.
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: December 9, 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 10
12.1 Ratio of Earnings to Fixed Charges 11
12.2 Calculation of Ratio of Earnings
to Fixed Charges 11
27 Financial Data Schedule 12