1
EXHIBIT 99.1
UNAUDITED PRO FORMA OPERATING AND FINANCIAL INFORMATION
The following tables set forth summary consolidated pro forma operating
and financial information of New Plan Excel Realty Trust, Inc. for the year
ended July 31, 1998 as if the merger of New Plan and Excel and each respective
entity's property acquisitions during its current fiscal year had occurred on
July 31, 1998 for balance sheet data and August 1, 1997 for income statement
data. Information with respect to Excel is as of June 30, 1998 for balance sheet
data and for the year ended June 30, 1998 for income statement data. The pro
forma data included herein may not be indicative of the actual results or
financial position had the merger of New Plan and Excel and the property
acquisitions occurred on the dates indicated.
The merger of New Plan and Excel has been accounted for as an acquisition
of Excel by New Plan using the purchase method of accounting. The pro forma
adjustments related to the merger are based on preliminary estimates of value.
Actual adjustments will be based on the results of various appraisals and
analysis of fair values.
2
NEW PLAN EXCEL REALTY TRUST, INC.
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEETS - UNAUDITED
(In Thousands)
New Plan Excel
Historical Historical Pro Forma
July 31, June 30, Combined Pro Forma
1998 (2A) 1998 (2A) Adjustments Totals
----------- ----------- ----------- -----------
ASSETS
Real estate, net $ 1,315,760 $ 902,133 $ 289,873(2B) $ 2,507,766
Cash 26,284 63,472 (12,200)(2C) 77,556
Accounts receivable, net 15,401 2,974 -- 18,375
Notes receivable - affiliates -- 66,616 -- 66,616
Notes receivable - other 13,878 30,975 -- 44,853
Other assets 13,202 21,153 10,556(2D) 44,911
----------- ----------- ----------- -----------
Total assets $ 1,384,525 $ 1,087,323 $ 288,229 $ 2,760,077
=========== =========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgages and other notes payable $ 576,888 $ 380,761 $ 9,083(2E) $ 966,732
Capital leases -- 27,229 -- 27,229
Accounts payable, accrued expenses and other
liabilities 43,110 18,755 -- 61,865
----------- ----------- ----------- -----------
Total liabilities 619,998 426,745 9,083 1,055,826
----------- ----------- ----------- -----------
Minority interest in partnership -- 41,249 -- 41,249
----------- ----------- ----------- -----------
Stockholders' Equity:
Preferred stock 72,775 28 (72,774)(2F) 29
Beneficial interests 759,853 -- (759,853)(2F) --
Common stock -- 234 646(2F) 880
Additional paid-in capital -- 661,260 1,068,934(2F) 1,730,194
Accumulated distributions in excess of net
income (66,608) (42,193) 42,193(2F) (66,608)
Loans receivable - purchase of shares (2,306) -- -- (2,306)
Unrealized gain on securities 813 -- -- 813
----------- ----------- ----------- -----------
Total stockholders' equity 764,527 619,329 279,146 1,663,002
----------- ----------- ----------- -----------
Total liabilities and stockholders' equity $ 1,384,525 $ 1,087,323 $ 288,229 $ 2,760,077
=========== =========== =========== ===========
The accompanying notes and management's assumptions are an integral part of this
statement.
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NEW PLAN EXCEL REALTY TRUST, INC.
PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF INCOME - UNAUDITED
FOR THE YEAR ENDED JULY
31, 1998 (In Thousands,
Except Per Share Amounts)
New Plan
New Plan Property Excel
Historical Acquisitions Historical Excel Property
Year Ended Aug. 1, 1997 Year Ended Acquisitions
July 31, to July 31, New Plan June 30, July 1, 1997 to Excel Legacy
1998 (3A) 1998 Pro Forma 1998 (3A) June 30, 1998 Spin-off
--------- ------------ --------- --------- ------------- --------
Revenues:
Rental $ 246,309 $ 12,894 $ 259,203 $ 113,069 $ 19,075 $ (3,703)
Interest and other 3,950 (266) 3,684 22,231 36 (2,101)
--------- --------- --------- --------- --------- ---------
Total revenue 250,259 12,628 262,887 135,300 19,111 (5,804)
--------- --------- --------- --------- --------- ---------
Expenses:
Property expenses 88,438 4,507 92,945 22,265 4,185 --
Interest 36,815 5,999 42,814 29,042 3,196 (2,016)
Depreciation and
amortization 31,622 1,749 33,371 15,111 2,215 (652)
General and administrative 2,770 -- 2,770 6,313 488 (1,154)
--------- --------- --------- --------- --------- ---------
Total expenses 159,645 12,255 171,900 72,731 10,084 (3,822)
--------- --------- --------- --------- --------- ---------
Income before real estate
sales, minority interest
and other 90,614 373 90,987 62,569 9,027 (1,982)
Minority interest -- -- -- (1,558) -- --
Gains on sales of securities
and other (41) -- (41) (2,229) -- --
Gain (loss) on sale of real
estate -- -- -- 516 -- --
--------- --------- --------- --------- --------- ---------
Net income $ 90,573 $ 373 $ 90,946 $ 59,298 $ 9,027 $ (1,982)
========= ========= ========= ========= ========= =========
Net income applicable to common
shares
Basic $ 84,723 $ 85,096 $ 44,673
--------- --------- ---------
Diluted $ 84,723 $ 85,096 $ 46,231
Basic net income per common
share $ 1.43 $ 1.43 $ 2.06
--------- --------- ---------
Diluted net income per common
share $ 1.42 $ 1.42 $ 1.95
========= ========= =========
Merger Combined Pro
Excel Pro Forma Forma
Pro Forma Adjustments Results
--------- ----------- -------
Revenues:
Rental $ 128,441 $ 243(3B) $ 387,887
Interest and other 20,166 -- 23,850
--------- --------- ---------
Total revenue 148,607 243 411,737
--------- --------- ---------
Expenses:
Property expenses 26,450 259(3C) 119,654
Interest 30,222 (2,502)(3D) 70,534
Depreciation and
amortization 16,674 7,495 (3E) 57,540
General and administrative 5,647 310(3F) 8,727
--------- --------- ---------
Total expenses 78,993 5,562 256,455
--------- --------- ---------
Income before real estate
sales, minority interest
and other 69,614 (5,319) 155,282
Minority interest (1,558) -- (1,558)
Gains on sales of securities
and other (2,229) -- (2,270)
Gain (loss) on sale of real
estate 516 -- 516
--------- --------- ---------
Net income $ 66,343 $ (5,319) $ 151,970
========= ========= =========
Net income applicable to common
shares
Basic $ 51,718 $ 131,495
--------- ---------
Diluted $ 53,276 $ 133,053
Basic net income per common
share $ 2.21 $ 1.50
--------- ---------
Diluted net income per common
share $ 2.09 $ 1.47
========= =========
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NEW PLAN EXCEL REALTY TRUST, INC.
PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF INCOME - UNAUDITED
FOR THE YEAR ENDED JULY 31, 1998
(In Thousands, Except Per Share Amounts)
(CONTINUED)
New Plan Excel
Property Property
New Plan Acquisitions Excel Acquisitions
Historical Aug. 1, Historical July 1,
Year Ended 1997 to Year Ended 1997 to Excel Excel
July 31, July 31, New Plan June 30, June 30, Legacy Pro
1998 3(A) 1998 Pro Forma 1998 3(A) 1998 Spin-off Forma
-------- ---- -------- -------- -------- ------ ---
Historical basic weighted average
number of common shares
outstanding 59,365 21,657
Historical diluted weighted average
number of common shares
outstanding 59,774 23,703
Pro forma basic weighted average
number of common shares
outstanding 59,365 1,775(3G) 23,432
Pro forma diluted weighted average
number of common shares
outstanding 59,774 1,775(3G) 25,478
Merger Combined
Pro Forma Pro Forma
Adjustments Results
--------- ---------
Historical basic weighted average
number of common shares
outstanding
Historical diluted weighted average
number of common shares
outstanding
Pro forma basic weighted average
number of common shares
outstanding 87,483
Pro forma diluted weighted average
number of common shares
outstanding 90,348
The accompanying notes and management's assumptions are an integral part of this
statement.
5
NEW PLAN EXCEL REALTY TRUST, INC.
NOTES AND MANAGEMENT'S ASSUMPTIONS TO PRO FORMA CONSOLIDATED CONDENSED
FINANCIAL INFORMATION - UNAUDITED
(In thousands, except per share amounts)
1. Summary of Accounting Treatment:
The exchange of New Plan Shares of Beneficial Interest for Excel Common
Stock in connection with the Merger is being accounted for as a reverse merger
for financial reporting purposes as if New Plan has acquired Excel. As such, the
assets and liabilities of Excel have been adjusted to fair value in connection
with the application of purchase accounting.
2. Adjustments to Pro Forma Consolidated Condensed Balance Sheets
(A) Certain reclassifications have been made to the historical balance
sheets of New Plan and Excel in order to conform to the desired pro forma
combined condensed balance sheet presentation.
(B) Represents adjustments to record the Merger in accordance with the
purchase method of accounting based upon an assumed purchase price of Excel
stock of $905,175. The purchase price was calculated assuming a market value of
New Plan Shares of Beneficial Interest of $24.20 per share times the outstanding
shares of Excel Common Stock of 28,118,668 after the 20% stock dividend to the
current holders of Excel Common Stock. In addition, the Excel Preferred A Stock
of 2,126,380 shares has been valued at $28.75 per share and the Excel Preferred
B Stock of 630,000 shares has been valued at $24.90 per 1/10 of a share. All
share prices were determined by taking the average of the closing stock prices
10 days before and after the announced merger date of May 14, 1998. The total
purchase price is as follows:
Shares Total
Security Outstanding Value Per Share Consideration
- -------- ----------- --------------- -------------
Common Stock 28,118,668 $ 24.20 $ 680,472
Series A preferred stock 2,126,380 $ 28.75 61,133
Series B preferred stock
to depositary shares 630,000 $ 24.90 156,870
-----------
Total consideration 898,475
Merger and the Other Transaction
costs (see below) 6,700
-----------
Total purchase price $ 905,175
===========
Estimated fees and expenses related to the Merger are as follows:
Advisory fees $ 7,200
Accounting and legal 2,000
Other costs 3,000
-------
Total 12,200
Less Excel expenses 5,500
-------
New Plan transaction costs $ 6,700
=======
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NEW PLAN EXCEL REALTY TRUST, INC.
NOTES AND MANAGEMENT'S ASSUMPTIONS TO PRO FORMA
CONSOLIDATED CONDENSED FINANCIAL INFORMATION - UNAUDITED (Continued)
(In thousands, except per share amounts)
The adjustment to reflect investment in real estate:
Purchase price (see above) $ 905,175
Less historical book value of Excel equity (619,329)
Transaction costs to be paid by Excel and expensed thereby
reducing the historical book value of Excel 5,500
Adjustments to reflect certain assets and liabilities of Excel at fair value:
Other assets (see Note (D)) $ (10,556)
Mortgages and other notes payable (see Note (E)) 9,083
---------
(1,473)
---------
Adjustment required to reflect investment in real estate, net $ 289,873
=========
(C) To reflect the decrease in cash due to the estimated Merger costs $ (12,200)
=========
(D) Adjustments to other assets:
To eliminate Excel's asset related to the straight-lining of rent
related to leases $ (2,427)
To eliminate Excel's asset of deferred financing costs (2,912)
To eliminate Excel's asset of deferred leasing costs (1,083)
To eliminate Excel's assets of organizational costs and goodwill (37)
To adjust Excel's historical cost in ERT Development Corporation to
estimated fair market value of $17,257 17,015
---------
$ 10,556
=========
(E) To record a premium required to adjust mortgages and other notes payable to
fair value using estimated market rates ranging from 6.75% to 7.5% on
an instrument by instrument basis $ 9,083
=========
(F) To adjust stockholders' equity to reflect the issuance of Excel's common
stock to owners of New Plan's shares of beneficial interest as follows:
Cumulative
Additional Distributions
Preferred Beneficial Common Paid-in in Excess of
Stock Interests Stock Capital Net Income
----------- ----------- ----------- ----------- -----------
Exchange of New Plan Shares of
Beneficial Interest for Excel
Common Stock $ -- $ (759,853) $ 599 $ 759,254 $ --
Exchange of New Plan Preferred
Stock for Excel Preferred Stock (72,774) -- -- 72,774 --
Excel's historical Stockholders'
equity (28) -- (234) (661,260) 42,193
Value of Excel acquisition 28 -- 281 898,166 --
----------- ----------- ----------- ----------- -----------
$ (72,774) $ (759,853) $ 646 $ 1,068,934 $ 42,193
=========== =========== =========== =========== ===========
The historical cost of the other assets, including all accounts and notes
receivable, and liabilities of Excel are estimated to be their fair market
value.
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NEW PLAN EXCEL REALTY TRUST, INC.
NOTES AND MANAGEMENT'S ASSUMPTIONS TO PRO FORMA
CONSOLIDATED CONDENSED FINANCIAL INFORMATION - UNAUDITED (Continued)
(In thousands, except per share amounts)
3. Adjustments To Pro Forma Consolidated Condensed Statements of Income
(A) Certain reclassifications have been made to the historical statements
of income of New Plan and Excel in order to conform to the desired pro forma
combined condensed statements of income presentation. The Consolidated Condensed
Statements of Income include pro forma adjustments for real estate acquisitions
that both companies have made within the past twelve months. The cash used to
acquire real estate by New Plan has been assumed to come from available cash in
savings and from new debt issues. The new debt issued by New Plan was assumed to
have an average interest rate of 6.8%. Depreciation expense on the New Plan
acquisitions was based on an estimated useful life of 40 years, using the
straight line method and allocating the cost between land and building at 20%
and 80%, respectively. The cash used to acquire real estate by Excel has been
assumed to come from approximately $223 million in equity offerings and the
issuance of $39 million in debt.
The following adjustments have been made to convert the operations of
Excel, which has reported operations on a calendar year basis, to a year ended
June 30, 1998 (this approximates the July 31 year end of New Plan).
Add:
Six Months Less: Year Ended
Year Ended, Ended Six Months Ended
Dec. 31, 1997 June 30, 1998 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
Revenues: $ 83,112 $ 63,486 $ 33,529 $ 113,069
Rental revenue 22,346 10,021 10,136 22,231
--------- --------- --------- ---------
Interest and other 105,458 73,507 43,665 135,300
--------- --------- --------- ---------
Total revenue
Expenses:
Property expenses 14,023 13,689 5,447 22,265
Interest 23,991 14,886 9,835 29,042
Depreciation and amortization 11,621 8,248 4,758 15,111
General and administrative 5,046 3,614 2,347 6,313
--------- --------- --------- ---------
Total expenses 54,681 40,437 22,387 72,731
--------- --------- --------- ---------
Income before real estate sales,
minority interest and other 50,777 33,070 21,278 62,569
Minority interest (816) (812) (70) (1,558)
Real estate gains on sale/impairments 523 286 293 516
Other (1,522) (707) -- (2,229)
--------- --------- --------- ---------
Net income $ 48,962 $ 31,837 $ 21,501 $ 59,298
========= ========= ========= =========
Basic net income per share $ 2.06 $ 0.98 $ 0.95 $ 2.06
========= ========= ========= =========
Diluted net income per share $ 1.97 $ 0.93 $ 0.93 $ 1.95
========= ========= ========= =========
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NEW PLAN EXCEL REALTY TRUST, INC.
NOTES AND MANAGEMENT'S ASSUMPTIONS TO PRO FORMA
CONSOLIDATED CONDENSED FINANCIAL INFORMATION - UNAUDITED (Continued)
(In thousands, except per share amounts)
(B) To recognize revenue from straight-lining rent related to
Excel's leases which will be reset in connection with the
Merger $ 243
(C) To reflect the decrease in amortization of Excel's deferred
leasing costs $ (259)
(D) To reflect the following adjustments to interest expense:
(1) To recognize the elimination of amortization of
deferred loan costs $ (763)
(2) To reflect the amortization of the premium required to
adjust Excel's mortgages and other notes payable to
fair value (1,739)
--------
Total adjustment $ (2,502)
========
(E) To reflect the increase in depreciation as a result of recording Excel's
real estate assets at fair value versus historical cost, utilizing an
estimated useful life of 40 years and allocating the cost between land and
buildings at 20% and 80%, respectively
Pro forma depreciation $ 23,840
Excel's historical depreciation (14,782)
Pro forma depreciation on property acquisitions (2,215)
Pro forma depreciation from Legacy spin-off 652
--------
Total adjustment $ 7,495
========
(F) To reflect the increase in general and administrative costs
mainly due to increased salary costs under new contractual
agreements $ 310
(G) To increase the weighted average shares outstanding for Excel for the
issuance of common stock and common stock equivalents for the purchase of
real estate by Excel. These shares have been accounted for on a pro forma
basis to be outstanding during the entire period presented
Basic 1,775
Diluted 1,775
(H) The pro forma weighted average number of common shares outstanding for the
periods are computed based on the historical weighted average shares
outstanding of New Plan and 1.2 times the pro forma weighted average shares
outstanding of Excel after giving effect to the issuance of common stock
equivalents for the purchase of real estate as noted in item (G) above.
(I) Includes pro forma effects of the acquisition of real estate properties by
New Plan.
(J) Reflects the decrease in net income applicable to common shares due to the
assumed issuance of Excel preferred securities on July 1, 1997