-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jb0EfEq+/moJbY9y37ost64OQZkP8HsUZcGqOthShaplpOkSfM1K8ZkVmeeKugQV UoppPK4y0Z4kuZcnSylGcg== 0000950123-97-007587.txt : 19970912 0000950123-97-007587.hdr.sgml : 19970912 ACCESSION NUMBER: 0000950123-97-007587 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970904 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORPORATE PROPERTY ASSOCIATES 2 CENTRAL INDEX KEY: 0000312918 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 133022196 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 000-09727 FILM NUMBER: 97675383 BUSINESS ADDRESS: STREET 1: 50 ROCKEFELLER PLAZA 2ND FL CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 2124921100 MAIL ADDRESS: STREET 1: 50 ROCKEFELLER PLAZA 2ND FL CITY: NEW YORK STATE: NY ZIP: 10020 10-Q/A 1 CORPORATE PROPERTY ASSOCIATES 2 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A AMENDMENT NO. 1 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 1997 or [ ] TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-9727 CORPORATE PROPERTY ASSOCIATES 2 (Exact name of registrant as specified in its charter) CALIFORNIA 13-3022196 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 50 ROCKEFELLER PLAZA, NEW YORK, NEW YORK 10020 (Address of principal executive offices) (Zip Code)
(212) 492-1100 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) 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 (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. [ ] Yes [ ] No 2 CORPORATE PROPERTY ASSOCIATES 2 (a California limited partnership) PART I Item 1. - FINANCIAL INFORMATION CONSOLIDATED BALANCE SHEETS
December 31, March 31, 1996 1997 ----------- ----------- (Note) (Unaudited) ASSETS: Land and buildings, net of accumulated depreciation of $5,850,679 at December 31, 1996 and $11,756,075 $11,020,427 $5,844,629 at March 31, 1997 Net investment in direct financing leases 20,259,530 20,314,462 Real estate held for sale 1,024,095 Cash and cash equivalents 1,066,861 850,828 Other assets 600,057 719,674 ----------- ----------- Total assets $33,682,523 $33,929,486 =========== =========== LIABILITIES: Mortgage notes payable $ 7,787,061 $ 7,570,856 Accrued interest payable 75,233 72,155 Accounts payable and accrued expenses 66,050 78,670 Prepaid rental income and security deposits 283,694 283,694 Accounts payable to affiliates 63,447 57,706 ----------- ----------- Total liabilities 8,275,485 8,063,081 ----------- ----------- PARTNERS' CAPITAL: General Partners 208,334 212,928 Limited Partners (54,900 Limited Partnership Units issued and outstanding) 25,198,704 25,653,477 ----------- ----------- Total partners' capital 25,407,038 25,866,405 ----------- ----------- Total liabilities and partners' capital $33,682,523 $33,929,486 =========== ===========
The accompanying notes are an integral part of the consolidated financial statements. Note: The balance sheet at December 31, 1996 has been derived from the audited financial statements at that date. -2- 3 CORPORATE PROPERTY ASSOCIATES 2 (a California limited partnership) CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended March 31, 1996 March 31, 1997 -------------- -------------- Revenues: Rental income from operating leases $ 425,582 $ 534,986 Interest income from direct financing leases 672,229 676,101 Other interest income 10,710 15,827 ---------- ---------- 1,108,521 1,226,914 ---------- ---------- Expenses: Interest 179,948 141,205 Depreciation 125,233 129,855 General and administrative 69,951 69,875 Property expenses 133,930 71,582 Amortization 2,175 1,785 ---------- ---------- 511,237 414,302 ---------- ---------- Net income $ 597,284 $ 812,612 ========== ========== Net income allocated to General Partners $ 5,973 $ 8,126 ========== ========== Net income allocated to Limited Partners $ 591,311 $ 804,486 ========== ========== Net income per Unit: (54,900 Limited Partnership Units) $ 10.77 $ 14.65 ========== ==========
The accompanying notes are an integral part of the consolidated financial statements. -3- 4 CORPORATE PROPERTY ASSOCIATES 2 (a California limited partnership) CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31, ------------------------- 1996 1997 --------- ----------- Cash flows from operating activities: Net income $ 597,284 $ 812,612 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 127,408 131,640 Interest income on direct financing leases In excess of scheduled rents (46,986) (54,932) Net change in operating assets and liabilities (26,916) (117,601) --------- ----------- Net cash provided by operating activities 650,790 771,719 --------- ----------- Cash flows from investing activities: Additional capitalized costs (418,302) ----------- Net cash used in investing activities (418,302) ----------- Cash flows from financing activities: Distributions to partners (385,556) (353,245) Payments of note payable to affiliate (250,000) Payments on mortgage principal (256,142) (216,205) --------- ----------- Net cash used in financing activities (891,698) (569,450) --------- ----------- Net decrease in cash and cash equivalents (240,908) (216,033) Cash and cash equivalents, beginning of period 577,506 1,066,861 --------- ----------- Cash and cash equivalents, end of period $ 336,598 $ 850,828 ========= =========== Supplemental disclosure of cash flows information: Interest paid $ 182,864 $ 144,283 ========= ===========
The accompanying notes are an integral part of the consolidated financial statements. -4- 5 CORPORATE PROPERTY ASSOCIATES 2 (a California limited partnership) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Basis of Presentation: The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1996. Note 2. Distributions to Partners: Distributions declared and paid to partners during the three months ended March 31, 1997 are summarized as follows:
Quarter Ended General Partners Limited Partners Per Limited Partner Unit - ----------------- ---------------- ---------------- ------------------------ December 31, 1996 $3,532 $349,713 $6.37 ====== ======== =====
A distribution of $6.38 per Limited Partner Unit for the quarter ended March 31, 1997 was declared and paid in April 1997. Note 3. Transactions with Related Parties: For the three-month periods ended March 31,1996 and 1997, the Partnership incurred management fees of $22,460 and $33,135, respectively, and general and administrative expense reimbursements of $15,179 and $15,354, respectively, payable to an affiliate. Management believes that ultimate payment of a preferred return to the General Partners of $1,048,845, based upon cumulative proceeds of sales of assets, is reasonably possible but not probable, as defined pursuant to Statement of Financial Accounting Standards No. 5. The Partnership, in conjunction with certain affiliates, is a participant in a cost sharing agreement for the purpose of renting and occupying office space. Under the agreement, the Partnership pays its proportionate share of rent and other costs of occupancy. Net expenses incurred for the three months ended March 31, 1996 and 1997 were $16,084 and $12,028, respectively. -5- 6 CORPORATE PROPERTY ASSOCIATES 2 (a California limited partnership) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED) Note 4. Industry Segment Information: The Partnership's operations consist of the investment in and the leasing of industrial and commercial real estate. For the three-month periods ended March 31, 1996 and 1997, the Partnership earned its total operating revenues (rental income plus interest income from financing leases) from the following lease obligors:
1996 % 1997 % ---- --- ---- --- Unisource Worldwide, Inc. $ 329,168 30% $ 329,168 27% Prefinish Metals Incorporated 238,052 22 241,316 20 Gibson Greetings, Inc. 207,281 19 208,006 17 Cleo, Inc. 109,994 10 113,152 9 AT&T Corporation 73,984 7 74,073 6 New Valley Corporation 59,233 5 59,132 5 Excel Telecommunications, Inc. 52,241 4 B&G Contract Packaging, Inc. 42,000 4 Maybelline Products Co., Inc. 39,000 3 39,000 3 Sports & Recreation, Inc. 30,273 3 Other 41,099 4 22,726 2 ---------- --- ---------- --- $1,097,811 100% $1,211,087 100% ========== === ========== ===
Note 5. Property in Moorestown, New Jersey: In April 1997, the Partnership and Corporate Property Associates 3 ("CPA:3"), an affiliate, who own a property in Moorestown, New Jersey as tenants-in-common with 39% and 61% interests, respectively, entered into an agreement to sell the property for $4,500,000 (of which the Partnership's share is approximately $1,755,000), less selling costs. The property is currently subject to a net lease with Sports & Recreation, Inc. ("Sports & Recreation"). During 1996, Sports & Recreation indicated to the Partnership and CPA:3 that it had decided not to occupy the property and would seek to terminate the lease. Sports & Recreation has continued to meet its lease obligations. The sales agreement provides the purchaser a period of 90 days to complete the inspection of the property. If based on the inspections, the purchaser is not satisfied, the purchaser may elect to terminate the sales agreement. The sale is also contingent upon reaching a lease termination agreement with Sports and Recreation and obtaining permits and approvals from the Township of Moorestown prior to October 1, 1997. If all of the conditions are met, the sale will occur between August 1, 1997 and December 15, 1997. There is no assurance that the sale will be completed. In connection with the proposed sale, the $1,024,095 carrying value of the property has been classified as real estate held for sale. -6- 7 CORPORATE PROPERTY ASSOCIATES 2 (a California limited partnership) SIGNATURES 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. CORPORATE PROPERTY ASSOCIATES 2 (a California limited partnership) By: W.P. CAREY & CO., INC. 09/03/97 BY: /s/ Steven M. Berzin - ---------------- ------------------------------------ Date Steven M. Berzin Executive Vice President and Chief Financial Officer (Principal Financial Officer) 09/03/97 BY: /s/ Claude Fernandez - ---------------- ------------------------------------ Date Claude Fernandez Executive Vice President and Chief Administrative Officer (Principal Accounting Officer) -7- -----END PRIVACY-ENHANCED MESSAGE-----