-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, jByu6HKt5efECaz9JBdwx2B8e3bhnj0q2JVR8bgdy8suGXnXM6R+SkHGqYKP1126 lGOYNCAGansJ6s1e2A82rQ== 0000950109-95-001824.txt : 19950530 0000950109-95-001824.hdr.sgml : 19950530 ACCESSION NUMBER: 0000950109-95-001824 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORPORATE PROPERTY ASSOCIATES 4 CENTRAL INDEX KEY: 0000706005 STANDARD INDUSTRIAL CLASSIFICATION: 6512 IRS NUMBER: 133126150 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11982 FILM NUMBER: 95537592 BUSINESS ADDRESS: STREET 1: 50 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 2124921100 MAIL ADDRESS: STREET 1: 620 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10020 10-Q 1 FORM 10-Q -------------------------- OMB APPROVAL -------------------------- UNITED STATES OMB Number 3235-0070 SECURITIES AND EXCHANGE COMMISSION Expires October 31, 1995 Washington, D.C. 20549 Estimated average burden hours per response 190.00 -------------------------- 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 March 31, 1995 ------------------------- 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 0-11982 ---------------------------------------------------------- CORPORATE PROPERTY ASSOCIATES 4, a California limited partnership - - - - - - - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) CALIFORNIA 13-3126150 - - - - - - - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 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 CORPORATE PROPERTY ASSOCIATES 4, a California limited partnership INDEX Page No. -------- PART I ------ Item 1. - Financial Information* Balance Sheets, December 31, 1994 and March 31, 1995 2 Statements of Income for the three months ended March 31, 1994 and 1995 3 Statements of Cash Flows for the three months ended March 31, 1994 and 1995 4 Notes to Financial Statements 5-6 Item 2. - Management's Discussion of Operations 7 PART II ------- Item 6. - Exhibits and Reports on Form 8-K 8 Signatures 9 *The summarized financial information contained herein is unaudited; however in the opinion of management, all adjustments necessary for a fair presentation of such financial information have been included. - 1 - CORPORATE PROPERTY ASSOCIATES 4, a California limited partnership PART I ------ Item 1. - FINANCIAL INFORMATION ------------------------------- BALANCE SHEETS
December 31, March 31, 1994 1995 ------------- ------------ (Note) (Unaudited) ASSETS: Land and buildings, net of accumulated depreciation of $12,212,983 at December 31, 1994 and $12,501,992 at March 31, 1995 $22,375,100 $22,102,027 Net investment in direct financing leases 29,952,612 29,946,506 Cash and cash equivalents 2,509,451 2,505,908 Accrued interest and rents receivable 262,998 323,743 Other assets 1,007,653 1,112,616 ----------- ----------- Total assets $56,107,814 $55,990,800 =========== =========== LIABILITIES: Mortgage notes payable $26,367,583 $26,034,789 Accrued interest payable 193,839 189,018 Accounts payable and accrued expenses 610,264 512,389 Accounts payable to affiliates 31,427 36,885 Prepaid rental income 119,118 164,718 ----------- ----------- Total liabilities 27,322,231 26,937,799 ----------- ----------- PARTNERS' CAPITAL: General Partners (486,282) (470,237) Limited Partners (85,568 Limited Partnership Units issued and outstanding) 29,271,865 29,523,238 ----------- ----------- Total partners' capital 28,785,583 29,053,001 ----------- ----------- Total liabilities and partners' capital $56,107,814 $55,990,800 =========== ===========
The accompanying notes are an integral part of the financial statements. Note: The balance sheet at December 31, 1994 has been derived from the audited financial statements at that date. - 2 - CORPORATE PROPERTY ASSOCIATES 4, a California limited partnership STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended March 31, 1994 March 31, 1995 ------------------ -------------- Revenues: Rental income from operating leases $ 800,557 $ 808,127 Interest income from direct financing leases 1,353,970 1,353,017 Other interest income 24,656 26,658 Revenue of hotel operations 784,107 996,893 Other income 42,792 ---------- ---------- 2,963,290 3,227,487 ---------- ---------- Expenses: Interest on mortgages 594,678 594,519 Depreciation 282,920 289,009 General and administrative 118,182 140,263 Property expenses 148,519 93,130 Amortization 31,130 31,150 Operating expenses of hotel operations 503,136 589,468 ---------- ---------- 1,678,565 1,737,539 ---------- ---------- Net income $1,284,725 $1,489,948 ========== ========== Net income allocated to General Partners $ 77,083 $ 89,397 ========== ========== Net income allocated to Limited Partners $1,207,642 $1,400,551 ========== ========== Net income per Unit (85,568 Limited Partnership Units) $14.11 $16.37 ====== ======
The accompanying notes are an integral part of the financial statements. - 3 - CORPORATE PROPERTY ASSOCIATES 4, a California limited partnership STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31, ------------------ 1994 1995 ---- ---- Cash flows from operating activities: Net income $ 1,284,725 $ 1,489,948 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 314,050 320,159 Other noncash items 5,154 3,152 Net change in operating assets and liabilities 141,956 (245,542) ----------- ----------- Net cash provided by operating activities 1,745,885 1,567,717 ----------- ----------- Cash flows from investing activities: Additional capitalized costs (274,643) (15,936) ----------- ----------- Net cash used in investing activities (274,643) (15,936) ----------- ----------- Cash flows from financing activities: Distributions to partners (1,217,979) (1,222,530) Payments on mortgage principal (257,443) (332,794) ----------- ----------- Net cash used in financing activities (1,475,422) (1,555,324) ----------- ----------- Net decrease in cash and cash equivalents (4,180) (3,543) Cash and cash equivalents, beginning of period 3,629,949 2,509,451 ----------- ----------- Cash and cash equivalents, end of period $ 3,625,769 $ 2,505,908 =========== =========== Supplemental disclosure of cash flows information: Interest paid $ 613,533 $ 599,340 =========== ===========
The accompanying notes are an integral part of the financial statements. - 4 - CORPORATE PROPERTY ASSOCIATES 4, 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, 1994. Note 2. Distributions to Partners: ------------------------- Distributions declared and paid to partners during the three months ended March 31, 1995 are summarized as follows:
Quarter Ended General Partners Limited Partners Per Limited Partner Unit ---------------- ---------------- ---------------- ------------------------ December 31, 1994 $73,352 $1,149,178 $13.43 ======= ========== ======
A distribution of $13.44 per Limited Partner Unit for the quarter ended March 31, 1995 was declared and paid in April 1995. Note 3. Transactions with Related Parties: --------------------------------- For the three-month periods ended March 31, 1994 and 1995, the Partnership incurred management fees of $28,692 and $27,003, respectively, and general and administrative expense reimbursements of $48,788 and $32,340, respectively, payable to an affiliate. 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, 1994 and 1995 were $12,411 and $44,386, respectively. - 5 - CORPORATE PROPERTY ASSOCIATES 4, 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 and the operation of a hotel business. For the three-month periods ended March 31, 1994 and 1995, the Partnership earned its total lease revenues (rental income plus interest income from financing leases) from the following lease obligors:
1994 % 1995 % ---------- ---- ---------- ---- Genesco, Inc. $ 523,755 24% $ 523,755 24% Simplicity Manufacturing, Inc. 499,178 23 499,178 23 Hughes Markets, Inc. 357,355 17 357,355 17 Brodart Co. 331,037 15 330,085 15 Continental Casualty Company 177,257 8 185,727 9 Family Dollar Stores, Inc. 140,400 7 136,800 6 Petrocon Engineering, Inc. 89,367 4 92,066 4 Winn-Dixie Stores, Inc. 36,178 2 36,178 2 ---------- --- ---------- --- $2,154,527 100% $2,161,144 100% ========== === ========== ===
Operating results of the hotel for the three-month periods ended March 31, 1994 and March 31, 1995 are summarized as follows:
1994 1995 ---------- ---------- Revenues $ 784,107 $ 996,893 Fees paid to hotel management company (25,857) (36,425) Other operating expenses (477,279) (553,043) --------- --------- Hotel operating income $ 280,971 $ 407,425 ========= =========
Note 5. Property Leased to Agency Management Systems, Inc.: -------------------------------------------------- The Partnership and Agency Management Systems, Inc. ("Agency Management"), which leases a property in College Station, Texas, and the lease guarantor, Continental Casualty Company, agreed to amend the existing lease effective February 1, 1995, subject to the consent of the property's mortgage lender. In exchange for the Partnership's funding of approximately $105,000 in capital improvements at the property, Agency Management's monthly rental increased from $59,086 to $61,844. The amended lease also provides for a scheduled rental increase on August 1, 1996 to $64,306 per month through October 31, 1998 at which time the lease term expires. The mortgage lender consented to the transaction on April 27, 1995. - 6 - CORPORATE PROPERTY ASSOCIATES 4, a California limited partnership Item 2. - MANAGEMENT'S DISCUSSION OF OPERATIONS ----------------------------------------------- Net income for the three-month period ended March 31, 1995 increased by $205,000 as compared with net income for the three-month period ended March 31, 1994. The increase is due to an increase in earnings of $126,000 from hotel operations, other income of $43,000 and a significant decrease in property expenses. The increase in hotel earnings resulted from the ability of the hotel's new manager to increase the average daily room rate for noncorporate customers with no significant change in occupancy rates, which reflected a modest increase to 86%. Other income reflects a concession allowed to the Partnership by a vendor which had been accrued as a payable at December 31, 1994. Property expenses decreased due to costs incurred in 1994 in connection with the assessment of liquidity alternatives. Lease revenues were unchanged for the comparable periods. There has been no material change in the Partnership's financial condition since December 31, 1994 and Management believes that the current cash balance of $2,506,000 and cash provided from operating activities will be sufficient to meet the Partnership's current cash requirements which currently consist solely of paying quarterly distributions, meeting scheduled debt service obligations and funding replacements of furniture, fixtures and equipment for the hotel operations. As noted in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1994, future liquidity may be impacted by the anticipated termination of the Hughes Markets, Inc. lease in April 1996 and the Partnership's share of annual carrying costs for the property, which, if vacant, is estimated to be $467,000. In addition, the Partnership's share of the upgrade necessary to meet the Holiday Inn modernization plan is estimated to amount to $300,000 and would need to be invested over the next two years if the Partnership decides to retain its current Holiday Inn franchise. Management believes that such upgrade will be required even if the hotel does not retain its affiliation as a Holiday Inn. Included in other assets on the accompanying balance sheet at March 31, 1995, is a furniture, fixture and equipment reserve account of $339,000 which would be available to fund any necessary upgrade. The reserve account is funded by allocating 5% of hotel revenues to the reserve account. The Partnership amended its lease with Agency Management Systems, Inc. in which the Partnership agreed to fund improvements of approximately $105,000 in exchange for two scheduled rent increases over the remaining term of the lease. - 7 - CORPORATE PROPERTY ASSOCIATES 4, a California limited partnership PART II ------- Item 6. - EXHIBITS AND REPORTS ON FORM 8-K ------------------------------------------ (a) Exhibits: None (b) Reports on Form 8-K: During the quarter ended March 31, 1995, the Partnership was not required to file any reports on Form 8-K. - 8 - CORPORATE PROPERTY ASSOCIATES 4, 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 4, a California limited partnership By: CAREY CORPORATE PROPERTY, INC. 05/10/95 By: /s/ Claude Fernandez -------------- ------------------------------ Date Claude Fernandez Executive Vice President and Chief Administrative Officer (Principal Financial Officer) 05/10/95 By: /s/ Michael D. Roberts -------------- ------------------------------- Date Michael D. Roberts First Vice President and Controller (Principal Accounting Officer) - 9 - EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from Form 10-Q for the quarterly period ended March 31, 1995 and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 2,505,908 0 323,743 0 0 1,112,616 64,550,525 12,501,992 55,990,800 903,010 26,034,789 0 0 0 29,053,001 55,990,800 0 3,227,487 0 0 553,552 0 594,519 1,489,948 0 1,489,948 0 0 0 1,489,948 16.37 16.37
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