-----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, UaMoQ88FUfB9sPsy6Scg9T6r7dMkapHOxRpTL5xJ4r6yic4u7MPMvR/Jt1ipftQY J0bnxiOOCb3V5G7swvyoNA== 0000950123-97-007588.txt : 19970912 0000950123-97-007588.hdr.sgml : 19970912 ACCESSION NUMBER: 0000950123-97-007588 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 3 CENTRAL INDEX KEY: 0000350745 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 942708080 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 000-10322 FILM NUMBER: 97675384 BUSINESS ADDRESS: STREET 1: 50 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 2124921100 MAIL ADDRESS: STREET 1: 50 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10020 10-Q/A 1 CORPORATE PROPERTY ASSOCIATES 3 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 0-10322 CORPORATE PROPERTY ASSOCIATES 3 (Exact name of registrant as specified in its charter) CALIFORNIA 94-2708080 (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 3 (a California limited partnership) PART I Item 1. - FINANCIAL INFORMATION BALANCE SHEETS
December 31, March 31, 1996 1997 ----------- ----------- (Note) (Unaudited) ASSETS: Land and buildings, net of accumulated depreciation of $1,364,095 at December 31, 1996 and $1,207,398 at March 31, 1997 $ 4,709,275 $ 3,703,645 Net investment in direct financing leases 25,689,201 25,803,919 Real estate held for sale 1,589,114 Cash and cash equivalents 1,496,001 980,618 Other assets 635,873 948,815 ----------- ----------- Total assets $32,530,350 $33,026,111 =========== =========== LIABILITIES: Note payable to affiliate $ 500,000 $ 500,000 Accounts payable and accrued expenses 63,200 74,150 Accounts payable to affiliates 73,313 68,867 ----------- ----------- Total liabilities 636,513 643,017 ----------- ----------- PARTNERS' CAPITAL: General Partners 214,807 224,623 Limited Partners (66,000 Limited Partnership Units issued and outstanding) 31,679,030 32,158,471 ----------- ----------- Total partners' capital 31,893,837 32,383,094 ----------- ----------- Total liabilities and partners' capital $32,530,350 $33,026,111 =========== ===========
The accompanying notes are an integral part of the 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 3 (a California limited partnership) STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended March 31, 1996 March 31, 1997 -------------- -------------- Revenues: Interest income from direct financing leases $1,176,722 $1,199,237 Rental income from operating leases 76,261 370,223 Other interest income 23,635 11,390 ---------- ---------- 1,276,618 1,580,850 ---------- ---------- Expenses: Interest 38,835 10,286 Depreciation 47,407 54,189 General and administrative 86,144 88,669 Property expense 217,336 103,378 ---------- ---------- 389,722 256,522 ---------- ---------- Net income $ 886,896 $1,324,328 ========== ========== Net income allocated to General Partners $ 17,738 $ 26,487 ========== ========== Net income allocated to Limited Partners $ 869,158 $1,297,841 ========== ========== Net income per Unit: (66,000 Limited Partnership Units) $ 13.17 $ 19.66 ========== ==========
The accompanying notes are an integral part of the financial statements. -3- 4 CORPORATE PROPERTY ASSOCIATES 3 (a California limited partnership) STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31, --------------------------- 1996 1997 ----------- ----------- Cash flows from operating activities: Net income $ 886,896 $ 1,324,328 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 47,407 54,189 Income on direct financing leases in excess of scheduled rents and straight-line adjustments on operating leases (92,203) (188,043) Net change in operating assets and liabilities 23,246 (233,113) ----------- ----------- Net cash provided by operating activities 865,346 957,361 ----------- ----------- Cash flows from investing activities: Additional capitalized costs (637,673) Proceeds from sale of real estate 1,853,816 ----------- ----------- Net cash provided by (used in) investing activities 1,853,816 (637,673) ----------- ----------- Cash flows from financing activities: Distributions to partners (820,138) (835,071) Partial prepayment of note payable to affiliate (1,500,000) ----------- ----------- Net cash used in financing activities (2,320,138) (835,071) ----------- ----------- Net increase (decrease) in cash and cash equivalents 399,024 (515,383) Cash and cash equivalents, beginning of period 1,158,302 1,496,001 ----------- ----------- Cash and cash equivalents, end of period $ 1,557,326 $ 980,618 =========== =========== Supplemental disclosure of cash flows information: Interest paid $ 55,644 $ 10,286 =========== ===========
The accompanying notes are an integral part of the financial statements. -4- 5 CORPORATE PROPERTY ASSOCIATES 3 (a California limited partnership) NOTES TO 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 $16,671 $818,400 $12.40 ======= ======== ======
A distribution of $12.41 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 $45,262 and $59,321, respectively, and general and administrative expense reimbursements of $24,846 and $21,518, respectively. Management believes that ultimate payment of a preferred return to the General Partners of $731,823, 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 $24,613 and $17,584, respectively. -5- 6 CORPORATE PROPERTY ASSOCIATES 3 (a California limited partnership) NOTES TO 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 % ---- --- ---- --- Gibson Greetings, Inc. $ 636,133 51% $ 649,923 42% Cleo, Inc. 334,145 27 342,889 22 Hughes Markets, Inc. 76,261 6 242,349 15 AT&T Corporation 114,651 9 114,789 7 New Valley Corporation 91,793 7 91,637 6 Excel Telecommunications, Inc. 80,959 5 Sports & Recreation, Inc. 46,914 3 ---------- --- ---------- --- $1,252,983 100% $1,569,460 100% ========== === ========== ===
Note 5. Property in Moorestown, New Jersey: In April 1997, the Partnership and Corporate Property Associates 2 ("CPA(R):2"), an affiliate, who own a property in Moorestown, New Jersey as tenants-in-common with approximate 61% and 39% interests, respectively, entered into an agreement to sell the property for $4,500,000 (of which the Partnership's share is approximately $2,745,000), 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(R):2 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 its inspection of the property. If based on the inspection, the purchaser is not satisfied, the purchaser may elect to terminate the sales agreement. The sale is also contingent upon the purchaser 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 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 $1,589,114 carrying value of the property has been classified as real estate held for sale. -6- 7 CORPORATE PROPERTY ASSOCIATES 3 (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 3 (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-----