-----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, OQqYKZnJsgX5lOVKdXyk30a4SQRvap3iNP7TrrazoL8aNafVXRzIGH0ZD/eOaDIi GubTxKKsF0YURi67l996SQ== 0000950130-96-001120.txt : 19960403 0000950130-96-001120.hdr.sgml : 19960403 ACCESSION NUMBER: 0000950130-96-001120 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960402 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORPORATE PROPERTY ASSOCIATES 5 CENTRAL INDEX KEY: 0000718075 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 133164925 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 000-11948 FILM NUMBER: 96543727 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-K405 1 FORM 10-K405 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the quarterly period DECEMBER 31, 1995 ended --------------------------------------------------- or [ ] TRANSITION REPORT PURSUANT TO 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to ----------- ---------- Commission file number 0-11948 ------- CORPORATE PROPERTY ASSOCIATES 5 ------------------------------- (Exact name of registrant as specified in its charter) CALIFORNIA 13-3164925 - ------------------------------------- -------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) - ------------------------------------- --------------------------- 50 ROCKEFELLER PLAZA, NEW YORK, NEW YORK 10020 - ----------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 492-1100 ----------------------------- Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered NONE NONE --------------- --------------- --------------- --------------- Securities registered pursuant to Section 12(g) of the Act: LIMITED PARTNERSHIP UNITS - -------------------------------------------------------------------------------- (Title of Class) - -------------------------------------------------------------------------------- (Title of Class) 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 Indicate by check mark if disclosure of deliquent filers pursuant to Item 405 of Regulation S-K ((S) 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] PART I ------ Item 1. Business. -------- Registrant is engaged in the business of investing in commercial and industrial real estate properties which are net leased to commercial and industrial entities. Registrant was organized as a California limited partnership on April 12, 1983. The General Partners of Registrant are Carey Corporate Property, Inc. (the "Corporate General Partner"), a Delaware corporation and William Polk Carey (the "Individual General Partner"). The Corporate General Partner is 79.9% owned by W. P. Carey & Co., Inc. ("W.P. Carey"), 10.1% owned by William P. Carey ("Carey") and 10% by Lehman Brothers, Inc. Affiliates of the Corporate General Partner and the Individual General Partner are also the General Partners of affiliates of Registrant, Corporate Property Associates ("CPA(R):1"), Corporate Property Associates 2 ("CPA(R):2"), Corporate Property Associates 3 ("CPA(R):3"), Corporate Property Associates 7 - a California limited partnership ("CPA(R):7"), Corporate Property Associates 8, L.P., a Delaware limited partnership ("CPA(R):8"), Corporate Property Associates 9, L.P., a Delaware limited partnership ("CPA(R):9"), and the advisor of Corporate Property Associates 10 Incorporated ("CPA(R):10"), Carey Institutional Properties Incorporated ("CIP^") and Corporate Property Associates 12 Incorporated ("CPA(R):12"). Registrant has a management agreement with Carey Corporate Property Management Company ("Carey Management"), a division of W.P. Carey. According to the terms of this agreement, Carey Management performs a variety of management services for Registrant. Registrant has entered into an agreement with Fifth Rock L.P., an affiliate, for the purpose of leasing office space. Reference is made to the Prospectus of Registrant dated August 2, 1983, as supplemented by a Supplement dated September 29, 1983, filed pursuant to Rules 424(b) and 424(c), respectively, under the Securities Act of 1933 and incorporated herein by reference (said Prospectus, as so supplemented, is hereinafter called the "Prospectus"). Registrant has two industry segments consisting of the investment in and the leasing of industrial and commercial real estate and the operation of a hotel business at three properties. See Selected Financial Data in Item 6 and Management's Discussion and Analysis in Item 7 for a summary of Registrant's operations. By assuming the operation of the hotel businesses from former tenants, Management intends to preserve the value of the underlying investment while generating a contribution to Registrant's operating cash flow. Also see the material contained in the Prospectus under the heading INVESTMENT OBJECTIVES AND POLICIES. The properties owned by Registrant are described in Item 2. Registrant's entire net proceeds from the public offering, less a working capital reserve have been fully invested in net leased commercial and industrial real estate since March 17, 1988, the date of Registrant's final real estate acquisition. Except for the three hotel properties and a vacant property in Elyria, Ohio, Registrant's properties are leased to corporate tenants under net leases. A net lease generally requires tenants to pay all operating expenses relating to the leased properties including maintenance, real estate taxes, insurance and utilities which under other forms of leases are often paid by the lessor. Lessees are required to include Registrant as an additional insured party on all insurance policies relating to the leased properties. In addition, substantially all of the net leases include indemnification provisions which require the lessees to indemnify Registrant and the General Partners for liabilities on all matters related to the leased properties. Registrant believes that the insurance and indemnity provided on its behalf by its lessees provides adequate coverage for property damage and any liability claims which may arise against Registrant's ownership interests. In addition to the insurance and indemnification provisions of the leases, Registrant has contingent property and liability insurance on its leased properties and primary property and liability coverages on its three hotel properties. Management believes that its insurance is adequate. To the extent that any lessees are not financially able to satisfy indemnification obligations which exceed insurance reimbursements, Registrant may incur the costs necessary to repair property and settle liabilities. -1- As described above, lessees generally retain the obligation for the operating expenses of their leased properties so that, other than rental income, there are no significant operating data reportable on Registrant's leased properties. Current rental income is reported in Note 9 to the Financial Statements in Item 8. As discussed in Item 7, Management's Discussion and Analysis, Registrant's leases generally provide for periodic rent increases which are either fixed or based on formulas indexed to increases in the Consumer Price Index. DeVlieg Bullard Inc. ("DeVlieg") and Penberthy Products, Inc. have purchase options which are exercisable in 1996 and Stoody Deloro Stellite, Inc. in 1997. Other leases provide for purchase options which are exercisable between 1998 and 1999. The purchase options generally provide for an exercise price based on the greater of fair market value, as defined in the lease, or a stated amount. As Registrant's objective has been to invest in properties which are occupied by a single corporate tenant and subject to long-term net leases with such lease obligation backed by the credit of the corporate lessee, Registrant's properties are not generally subject to the competitive conditions of local and regional real estate markets. In selecting its real estate investments, Registrant's strategy was to identify properties of material importance to the lessee so that the lessee may be more likely to extend its lease beyond the initial term or exercise a purchase option if such option was provided for in the lease agreement. None of Registrant's leases expire until 1999. Registrant is more likely to be affected by the financial condition of its lessees rather than the competitive conditions of the real estate marketplace. During 1995, Industrial General Corporation ("Industrial General") filed a voluntary petition of bankruptcy under Chapter 11 of the United States Bankruptcy Code. As a result, Registrant entered into a series of transactions, including terminating the Industrial General lease and selling the properties except for the Elyria property. The deterioration in the financial condition of Rochester Button Company and its effect on Registrant is fully described in Note 10 to the Financial Statements in Item 8. Registrant's strategy has been to diversify its investments among tenants, property types and industries with geographical diversification being only a secondary objective. In connection with the sale of the Industrial General properties, Registrant acquired limited partnership interests in G.I. Plastek L.P., a start-up operation at two of the properties sold to Industrial General. The Alpena, Rapid City and Petoskey businesses are seasonal in nature with occupancy rates for the year ended December 31, 1995 of 55%, 57% and 43%, respectively. The occupancy rates are substantially similar to prior years. Registrant is currently seeking an affiliation with another national hotel chain for the Rapid City hotel and has agreed with the lender to use its best efforts to sell this hotel. For the year ended December 31, 1995, revenues from properties occupied by lease obligors which accounted for 10% or more of the revenues of the industrial and commercial real estate segment of Registrant were as follows: GATX, 16%; Gould Inc., 13%; Spreckels Industries, Inc., 12% and DeVlieg, 10%. No other property owned by Registrant accounted for 10% or more of its total real estate operating revenue during 1995. Revenues from the industrial and commercial real estate segment represent approximately 54% of total revenues. See Note 9 to the Financial Statements in Item 8. For the year ended December 31, 1995, gross revenues from the hotel operations business segment were $6,768,000 (approximately 43% of total revenues). The hotel properties are located in Rapid City, South Dakota and Alpena and Petoskey, Michigan. Registrant has a 100% interest in the Rapid City hotel and 65% interests in the Alpena and Petoskey, Michigan hotels which are owned as tenants-in-common with CPA(R):6. Since December 31, 1995, Registrant sold the Helena, Montana property which was 60% occupied by IBM Corporation with the remaining 40% occupied by various other tenants. In 1994, Registrant voluntarily conducted Phase II reviews of certain of its properties based on the results of the Phase I environmental reviews contracted for in 1993. Registrant believes, based on the results of such reviews, that its leased properties are in substantial compliance with Federal and state environmental statutes and regulations. Portions of certain properties have been documented as having a limited degree of contamination, principally in connection with either leakage from underground storage tanks or surface spills from facility activities. Phase II investigations have been recommended for some properties based upon the Phase I reports. For those conditions which were identified, Registrant advised its tenants of such findings and of their obligations, if any, to perform any required remediation. Tenants are generally subject to environmental statutes and regulations regarding the discharge of hazardous materials and any related remediation obligations. In addition, Registrant's leases generally require tenants to indemnify Registrant from all liabilities and losses related to the leased properties. Accordingly, Management believes that the ultimate resolution of the aforementioned environmental matters will not have a material effect on Registrant's financial condition, liquidity or results of operations. -2- Registrant does not have any employees. The Corporate General Partner of Registrant together with its affiliates employ twelve individuals who perform accounting, secretarial and transfer services for Registrant. Gemisys, Inc. performs certain transfer services for Registrant and The Bank of New York performs certain banking services for Registrant. In addition, Registrant has entered into an agreement with Carey Management pursuant to which Carey Management provides certain management services to Registrant. W.P. Carey has substantially the same officers as the Corporate General Partner.
Item 2. Properties. LEASE TYPE OF OWNERSHIP OBLIGOR TYPE OF PROPERTY LOCATION INTEREST - ------------------------ -------------------- --------------- ----------------- SPRECKELS INDUSTRIES Manufacturing and Forrest City, Ownership of land INC. Office Facility Arkansas and building ARLEY MERCHANDISE Manufacturing Columbia and Ownership of land CORPORATION Facilities - Sumter, South and buildings (1) 2 locations Carolina ROCHESTER BUTTON Manufacturing Kenbridge, Ownership of land COMPANY Facilities - South Boston, and buildings (2) 2 locations Virginia PENN VIRGINIA Office and Duffield, Ownership of land CORPORATION Manufacturing Virginia and building (3) Facilities - Cuyahoga Falls, 3 locations Ohio and Broomall, Pennsylvania (4) Hotel Rapid City, Ownership of land South Dakota and buildings (1) (4) Hotels Petoskey and Ownership of 65% Alpena, interest in land Michigan and buildings (1) GATX LOGISTICS, Office and Warehouse Hodgkins, Ownership of land INC. Facility Illinois and building (1) EXIDE ELECTRONICS Office and Raleigh, Ownership of land CORPORATION Research Facility North Carolina and building (1) HARCOURT GENERAL Movie Theater Canton, Ownership of land CORPORATION Michigan and building (3) (5) Office, and Manufac- Elyria, Ownership of land turing Facility Ohio and buildings
-3-
LEASE TYPE OF OWNERSHIP OBLIGOR TYPE OF PROPERTY LOCATION INTEREST - --------------- ----------------- ---------- ------------------ GOULD, INC. Manufacturing and Oxnard, Ownership of land Research Facility California and building (1) DEVLIEG BULLARD, INC. Manufacturing Frankenmuth, Ownership of land Facilities - Michigan and buildings (3) 2 locations McMinnville, Tennessee PENBERTHY Manufacturing Prophetstown, Ownership of land PRODUCTS, INC. Facility Illinois and building (3) STOODY DELORO Manufacturing Goshen, Ownership of land STELLITE, INC. Facility Indiana and building (1) WINN-DIXIE Supermarket Montgomery, Ownership of land STORES, INC. Alabama and buildings (3) FMP/RAUMA, CO. Manufacturing Carthage, Ownership of land Facility New York and buildings
(1) These properties are encumbered by mortgage notes payable. (2) These properties are subject to a mortgage as collateral for loans issued by unaffiliated parties to the lessee. (3) These properties are encumbered by mortgages and/or lease assignments in connection with mortgage notes payable on other of Registrant's properties. (4) Registrant operates a hotel business at these properties. (5) This property is vacant. -4- The material terms of Registrant's leases with its significant tenants are summarized in the following table:
Registrant's Share Current Lease Lease of Current Square Rent Per Expiration Renewal Ownership Terms of Gross Obligor Annual Rents Footage Sq.Ft. (Mo/Year) Terms Interest Purchase Option Costs (1) - --------------- ------------ ------- -------- ----------- ------- ---------- ----------------- ------------ GATX $1,398,600 616,641 $2.27 10/99 YES 100% N/A $12,280,378 Logistics, Inc. Spreckels 1,161,170 265,000 4.38 12/12 YES 100 The greater of 5,500,000 Industries, fair market value Inc. or $5,500,000 Gould, 1,125,000 142,796 7.88 11/99 YES 100 Fair market value 9,875,087 Inc. DeVlieg 830,984 409,391 2.03 04/06 YES 100 The greater of 5,092,699 Bullard, fair market value Inc. or the sum of the purchase price, of $5,075,000, and any mortgage prepayment premium. Arley 600,000 255,600 3.56 06/02 YES 100 The greater of 7,808,555 Merchandise fair market value Corporation or the unpaid principal balance due on the mortgage loan.
(1) Includes original cost of investment and net increases or decreases to net investment subsequent to purchase. -5- The material terms on the mortgage debt of Registrant's properties is summarized in the following table:
Annual Mortgage Interest Balance Annual Debt Maturity Estimated Payment Lease Obligor Rate 12/31/95 Service Date Due at Maturity Prepayment Provisions - ------------------ -------- --------- ---------- --------- ----------------- --------------------------------- GATX Logistics, Inc. 8.63% $3,243,716 $399,480 07/98 $2,905,000 1% of the loan balance. Gould, Inc. 11.50 6,268,626 426,918 03/96 3,052,000 3% and decreasing by 1% each March. Arley Merchandise Corporation 10.00 4,754,940 570,000 06/95 4,619,000 Exide Electronics Corporation 10.88 1,410,410 170,293 04/96 1,400,000 Stoody Deloro Stellite, Inc. 10.50(1) 1,191,150 144,000(4) 01/97 1,071,000 Rapid City, South Dakota hotel property 3.25(2) 6,800,000 524,522(4) 05/15 6,800,000 Alpena, Michigan hotel property 6.40 - 9 4,875,000(3) 407,299 9/96- 9/15 257,250(3) Petoskey, Michigan hotel property 6.40 - 9 4,875,000(3) 407,584 9/96- 9/15 257,250(3)
(1) Variable rate at lender's prime plus 1.5%. (2) Interest rate is variable and resets weekly based on short-term tax exempt bond market rates. (3) Financing consists of a series of bonds maturing between 1996 and 2015 with interest rates varying from 6.4% to 9%. (4) Projected based on current estimate. -6- Item 3. Legal Proceedings. ----------------- As of the date hereof, Registrant is not party to any material pending legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders. --------------------------------------------------- No matter was submitted during the fourth quarter of the year ended December 31, 1995 to a vote of security holders, through the solicitation of proxies or otherwise. PART II ------- Item 5. Market for Registrant's Common Equity and Related ------------------------------------------------- Stockholder Matters. ------------------- Information with respect to Registrant's common equity is hereby incorporated by reference to page 28 of Registrant's Annual Report contained in Appendix A. Item 6. Selected Financial Data. ----------------------- Selected Financial Data are hereby incorporated by reference to page 1 of Registrant's Annual Report contained in Appendix A. Item 7. Management's Discussion and Analysis of Financial Condition ----------------------------------------------------------- and Results of Operations. ------------------------- Management's Discussion and Analysis are hereby incorporated by reference to pages 2 to 5 of Registrant's Annual Report contained in Appendix A. Item 8. Financial Statements and Supplementary Data. ------------------------------------------- The following financial statements and supplementary data are hereby incorporated by reference to pages 6 to 21 of Registrant's Annual Report contained in Appendix A: (i) Report of Independent Accountants. (ii) Balance Sheets as of December 31, 1994 and 1995. (iii) Statements of Income for the years ended December 31, 1993, 1994 and 1995. (iv) Statements of Partners' Capital for the years ended December 31, 1993, 1994 and 1995. (v) Statements of Cash Flows for the years ended December 31, 1993, 1994 and 1995. (vi) Notes to Financial Statements. Item 9. Disagreements on Accounting and Financial Disclosure. ---------------------------------------------------- NONE -7- PART III -------- Item 10. Directors and Executive Officers of the Registrant. -------------------------------------------------- Registrant has no officers or directors. The directors and executive officers of the Corporate General Partner are as follows:
Has Served as a Director and/or Name Age Positions Held Officer Since (1) - -------------------------------- --- ------------------------------------ ----------------- William Polk Carey 65 Chairman of the Board 4/84 Director Francis J. Carey 70 President 4/84 Director George E. Stoddard 79 Chairman of the Investment Committee 4/84 Director Raymond S. Clark 82 Chairman of the Executive Committee 4/84 Director Madelon DeVoe Talley 64 Vice Chairman of the Board 4/86 Director Barclay G. Jones III 35 Executive Vice President 4/84 Director Lawrence R. Klein 75 Chairman of the Economic Policy 4/84 Committee Director Claude Fernandez 43 Executive Vice President 4/84 Chief Administrative Officer Howard J. Altmann 32 Senior Vice President 8/90 H. Augustus Carey 38 Senior Vice President 8/88 John J. Park 31 Senior Vice President 7/91 Treasurer Michael D. Roberts 44 First Vice President 4/89 Controller
(1) Each officer and director of the Corporate General Partner will hold office until the next annual meeting of the Board of Directors and thereafter until his successor shall have been elected and shall have qualified or until his prior death, resignation or removal. William Polk Carey and Francis J. Carey are brothers and Raymond S. Clark is their brother-in-law. H. Augustus Carey is the nephew of William Polk Carey and Raymond S. Clark and the son of Francis J. Carey. A description of the business experience of each officer and director of the Corporate General Partner is set forth below: William Polk Carey, Chairman and Chief Executive Officer, has been active in lease financing since 1959 and a specialist in net leasing of corporate real estate property since 1964. Before founding W.P. Carey & Co., Inc. ("W.P. Carey") in 1973, he served as Chairman of the Executive Committee of Hubbard, -8- Westervelt & Mottelay (now Merrill Lynch Hubbard), head of Real Estate and Equipment Financing at Loeb Rhoades & Co. (now Lehman Brothers), head of Real Estate and Private Placements, Director of Corporate Finance and Vice Chairman of the Investment Banking Board of duPont Glore Forgan Inc. A graduate of the University of Pennsylvania's Wharton School of Finance, Mr. Carey is a Governor of the National Association of Real Estate Investment Trusts (NAREIT). He also serves on the boards of The Johns Hopkins University and its medical school, The James A. Baker III Institute for Public Policy at Rice University, and other educational and philanthropic institutions. He founded the Visiting Committee to the Economics Department of the University of Pennsylvania and co-founded with Dr. Lawrence R. Klein the Economics Research Institute at that university. Francis J. Carey was elected President and a Managing Director of W.P. Carey in April 1987, having served as a Director since its founding in 1973. He served as a member of the Executive Committee and Board of Managers of the Western Savings Bank of Philadelphia from 1972 until its takeover by another bank in 1982 and is former chairman of the Real Property, Probate and Trust Section of the Pennsylvania Bar Association. Mr. Carey served as a member of the Board of Overseers of the School of Arts and Sciences of the University of Pennsylvania from 1983 through 1990 and has served as a member of the Board of Trustees of the Investment Program Association since 1990. From April 1987 until August 1992, he served as counsel to Reed Smith Shaw & McClay, counsel for Registrant, the General Partners, the CPA(R) Partnerships and W.P. Carey and some of its affiliates. A real estate lawyer of more than 30 years' experience, he holds A.B. and J.D. degrees from the University of Pennsylvania. George E. Stoddard, Chief Investment Officer, was until 1979 head of the bond department of The Equitable Life Assurance Society of the United States, with responsibility for all activities related to Equitable's portfolio of corporate investments acquired through direct negotiation. Mr. Stoddard was associated with Equitable for over 30 years. He holds an A.B. degree from Brigham Young University, an M.B.A. from Harvard Business School and an LL.B. from Fordham University Law School. Raymond S. Clark is former President and Chief Executive Officer of the Canton Company of Baltimore and the Canton Railroad Company. A graduate of Harvard College and Yale Law School, he is presently a Director and Chairman of the Executive Committee of W.P. Carey and served as Chairman of the Board of W.P. Carey from its founding in 1973 until 1982. He is past Chairman of the Maryland Industrial Development Financing Authority. Madelon DeVoe Talley, Vice Chairman, is a member of the New York State Controller's Investment Committee, a Commissioner of the Port Authority of New York and New Jersey, former CIO of New York State Common Retirement Fund and New York State Teachers Retirement System. She also served as a managing director of Rothschild, Inc. and as the President of its asset management division. Besides her duties at W.P. Carey, Mrs. Talley is also a former Governor of the N.A.S.D. and is a director of Biocraft Laboratories, a New York Stock Exchange company. She is an alumna of Sarah Lawrence College and the graduate school of International Affairs at Columbia University. Barclay G. Jones III, Executive Vice President, Managing Director, and co-head of the Investment Department. Mr. Jones joined W.P. Carey as Assistant to the President in July 1982 after his graduation from the Wharton School of the University of Pennsylvania, where he majored in Finance and Economics. He was elected to the Board of Directors of W.P. Carey in April 1992. Mr. Jones is also a Director of the Wharton Business School Club of New York. -9- Lawrence R. Klein, Chairman of the Economic Policy Committee since 1984, is Benjamin Franklin Professor of Economics Emeritus at the University of Pennsylvania, having joined the faculty of Economics and the Wharton School in 1958. He holds earned degrees from the University of California at Berkeley and Massachusetts Institute of Technology and has been awarded the Nobel Prize in Economics as well as over 20 honorary degrees. Founder of Wharton Econometric Forecasting Associates, Inc., Dr. Klein has been counselor to various corporations, governments, and government agencies including the Federal Reserve Board and the President's Council of Economic Advisers. Claude Fernandez, Chief Administrative Officer, Managing Director, and Executive Vice President, joined W.P. Carey in 1983. Previously associated with Coldwell Banker, Inc. for two years and with Arthur Andersen & Co., he is a Certified Public Accountant. Mr. Fernandez received his B.S. degree in Accounting from New York University in 1975 and his M.B.A. in Finance from Columbia University Graduate School of Business in 1981. Howard J. Altmann, Senior Vice President, Investment Department, joined W.P. Carey in August 1990. He was a securities analyst at Goldman Sachs & Co. for the retail industry from 1986 to 1988. Mr. Altmann received his undergraduate degree in economics and finance from McGill University and his M.B.A. from the Stanford University Graduate School of Business. H. Augustus Carey, Senior Vice President, returned to W.P. Carey in 1988. Mr. Carey previously worked for W.P. Carey from 1979 to 1981 as Assistant to the President. Prior to rejoining W.P. Carey, Mr. Carey served as a loan officer of the North American Department of Kleinwort Benson Limited in London, England. He received an A.B. from Amherst College in 1979 and an M.Phil. in Management Studies from Oxford University in 1984. Mr. Carey is a trustee of the Oxford Management Centre Associates Council. John J. Park, Senior Vice President and Treasurer, joined W.P. Carey as an Investment Analyst in December 1987. Mr. Park received his undergraduate degree from Massachusetts Institute of Technology and his M.B.A. in Finance from New York University. Michael D. Roberts joined W. P. Carey as a Second Vice President and Assistant Controller in April 1989 and is currently First Vice President and Controller. Prior to joining W.P. Carey, Mr. Roberts was employed by Coopers & Lybrand, where he attained the title of audit manager. A certified public accountant, Mr. Roberts received a B.A. from Brandeis University and an M.B.A. from Northeastern University. The officers and directors of W.P. Carey are substantially the same as above. Item 11. Executive Compensation. ---------------------- Under the Amended Agreement of Limited Partnership of Registrant (the "Agreement"), 5% of Distributable Cash From Operations is payable to the Corporate General Partner and 1% of Distributable Cash From Operations is payable to the Individual General Partner. The Corporate General Partner and the Individual General Partner received $288,148 and $80,554 respectively, from Registrant as their share of Distributable Cash From Operations during the year ended December 31, 1995. As owner of 200 Limited Partnership Units, the Corporate General Partner received cash distributions of $13,580 during the year ended December 31, 1995. See Item 6 for the net income allocated to the General Partners under the Agreement. Registrant is not required to pay, and has not paid, any remuneration to the officers or directors of the Corporate General Partner, W.P. Carey or any other affiliate of Registrant during the year ended December 31, 1995. In the future, the Corporate General Partner will continue to receive 5% of Distributable Cash From Operations, the Individual General Partner will continue to receive 1% of Distributable Cash From Operations and each General Partner will continue to be allocated the same percentage of the profits and losses of Registrant as had been allocated in the past. For a description of the subordinated interest of the Corporate General Partner and the Individual General Partner in Cash From Sales and Cash From Financings, reference is made to the materials contained in the Prospectus under the heading MANAGEMENT COMPENSATION. -10- Item 12. Security Ownership of Certain Beneficial Owners and Management. -------------------------------------------------------------- As of December 31, 1995, no person owned of record or was known by Registrant to own beneficially more than 5% of the Limited Partnership Units of Registrant. The following table sets forth as of March 20, 1996 certain information as to the ownership by directors and executive officers of securities of Registrant:
Number of Units Name of and Nature of Percent Title of Class Beneficial Owner Beneficial Ownership (1) of Class - ---------------------- ---------------- ------------------------ ----------------- Limited Partnership Units William Polk Carey (1) 210 units .19% Raymond S. Clark 20 units .02 Francis J. Carey George E. Stoddard Madelon DeVoe Talley Barclay G. Jones III Lawrence R. Klein Claude Fernandez Howard J. Altmann H. Augustus Carey John J. Park Michael D. Roberts ___ ___ All executive officers and directors as a group (12 persons) 230 units .21% === ===
(1) As of March 20, 1996, the Corporate General Partner, Carey Corporate Property, Inc. ("Carey Property"), owned 200 Limited Partnership Units of Registrant. William Polk Carey, the majority shareholder of Carey Property, is the beneficial owner of these Units. There exists no arrangement, known to Registrant, the operation of which may at a subsequent date result in a change of control of Registrant. Item 13. Certain Relationships and Related Transactions. ---------------------------------------------- For a description of transactions and business relationships between Registrant and its affiliates and their directors and officers, see Notes 2 and 3 to the Financial Statements in Item 8. Michael B. Pollack, First Vice President and Secretary of the Corporate General Partner, is a partner of Reed Smith Shaw & McClay which is engaged to perform legal services for Registrant. No officer or director of the Corporate General Partner, W.P. Carey or any other affiliate of Registrant or any member of the immediate family or associated organization of any such officer or director was indebted to Registrant at any time since the beginning of Registrant's last fiscal year. -11- PART IV ------- Item 14. Exhibits, Financial Statement Schedules and Reports on ------------------------------------------------------ Form 8-K. -------- (a) 1. Financial Statements: -------------------- The following financial statements are filed as a part of this Report: Report of Independent Accountants. Balance Sheets as of December 31, 1994 and 1995. Statements of Income for the years ended December 31, 1993, 1994 and 1995. Statements of Partners' Capital for the years ended December 31, 1993, 1994 and 1995. Statements of Cash Flows for the years ended December 31, 1993, 1994 and 1995. Notes to Financial Statements. The financial statements are hereby incorporated by reference to pages 6 to 21 of Registrant's Annual Report contained in Appendix A. (a) 2. Financial Statement Schedule: ---------------------------- The following schedule is filed as a part of this Report: Schedule III -Real Estate and Accumulated Depreciation as of December 31, 1995. Notes to Schedule III. Schedule III and notes thereto are hereby incorporated by reference to pages 22 to 25 of Registrant's Annual Report contained in Appendix A. Financial Statement Schedules other than those listed above are omitted because the required information is given in the Financial Statements or the Notes thereto, or because the conditions requiring their filing do not exist. -12- (a) 3. Exhibits: -------- The following exhibits are filed as part of this Report. Documents other than those designated as being filed herewith are incorporated herein by reference.
Exhibit Method of No. Description Filing - ---------- --------------------------------------------- ------------------------- 3.1 Amended Agreement of Limited Partnership of Exhibit 3(B) to Amendment Registrant dated as of June 1, 1983. No. 2 to Registration Statement (Form S-11) No. 2-83092 4.1 $3,000,000 Promissory Note dated December 30, Exhibit 4.1 to Form 10-K 1983 from Registrant to Merrill Lynch filed April 10, 1984 Interfunding Inc. ("MLI"). 4.2 Mortgage dated December 30, 1983 from Exhibit 4.2 to Form 10-K Registrant to MLI. filed April 10, 1984 4.3 Assignment of Leases and Rents dated Exhibit 4.3 to Form 10-K December 30, 1983 from Registrant to MLI. filed April 10, 1984 4.4 $4,500,000 Mortgage Note dated January 2, Exhibit 4.6 to Form 10-K 1984 from Registrant to Empire of America filed April 10, 1984 FSA ("Empire"). 4.5 Deed of Trust, Mortgage, Deed to Secure Exhibit 4.7 to Form 10-K Debt, Security Agreement and Assignment filed April 10, 1984 dated January 2, 1984 from Registrant to Empire. 4.6 Assignment of Rents and Lessor's Interest Exhibit 4.8 to Form 10-K in Lease dated January 2, 1984 from filed April 10, 1984 Registrant to Empire. 4.7 $2,400,000 Deed of Trust Note dated Filed as Exhibit 4.7 to April 11, 1984 from Registrant to Mellon Registrant's Report on Bank, N.A. Form 8-K dated April 25, 1984 4.8 Deed of Trust and Security Agreement dated Filed as Exhibit 4.8 to April 11, 1984 from Registrant to Registrant's Report on Robert A. Johnson and John L. Ostby, as Form 8-K dated April 25, trustees for Mellon Bank, N.A., and 1984 Mellon Bank. 4.9 Assignment of Rentals and Leases dated Filed as Exhibit 4.9 to April 11, 1984 from Registrant, as assignor, Registrant's Report on to Mellon Bank, N.A., as assignee. Form 8-K dated April 25, 1984
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Exhibit Method of No. Description Filing - ----------- ----------------------------------------- -------------------------- 4.10 $3,000,000 Promissory Note dated June 29, Filed as Exhibit 4.1 to 1984 from Registrant to TRW Inc. Registrant's Report on Form 8-K dated July 26, 1984 4.11 $5,000,000 Promissory Note dated July 13, Filed as Exhibit 4.2 to 1984 from Registrant to FCA American Registrant's Report on Mortgage Corporation ("FCA"). Form 8-K dated July 26, 1984 4.12 Mortgage dated June 29, 1984 from Filed as Exhibit 4.3 to Registrant to TRW Inc. for the New York Registrant's Report on property. Form 8-K dated July 26, 1984 4.13 Purchase Money Deed to Secure Debt and Filed as Exhibit 4.4 to Security agreement from Registrant Registrant's Report on to TRW Inc. for the Georgia property. Form 8-K dated July 26, 1984 4.14 Assignment of Rents dated June 29, 1984 Filed as Exhibit 4.5 to by Registrant to TRW Inc. for the Registrant's Report on New York property. Form 8-K dated July 26, 1984 4.15 Assignment of Leases and Rents dated Filed as Exhibit 4.6 to June 29, 1984 by Registrant to TRW Inc. Registrant's Report on for the Georgia property. Form 8-K dated July 26, 1984 4.16 Mortgage, Security Agreement and Filed as Exhibit 4.7 to Assignment of Leases and Rents dated Registrant's Report on July 13, 1984 by Registrant to FCA. Form 8-K dated July 26, 1984 4.17 $3,000,000 Promissory Note dated Filed as Exhibit 4.17 to April 30, 1984 from Registrant to FCA. Registrant's Annual Report on Form 10-K dated March 29, 1985 4.18 Mortgage and Security Agreement dated Filed as Exhibit 4.18 to April 30, 1984 by Registrant to FCA. Registrant's Annual Report on Form 10-K dated March 29, 1985 4.19 Collateral Assignment of Leases and Rents Filed as Exhibit 4.19 to dated April 30, 1984 from Registrant Registrant's Annual Report to FCA. on Form 10-K dated March 29, 1985
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Exhibit Method of No. Description Filing - ----------- ------------------------------------------- -------------------------- 4.20 Mortgage and Security Agreement dated Filed as Exhibit 4.1 as of April 1, 1985 between Registrant to Registrant's and Lloyds Bank International Limited Report on Form 8-K ("Lloyds") and Texas Commerce Bank National dated May 8, 1985 Association ("Texas Commerce"). 4.21 Trust Indenture dated as of April 1, 1985 Filed as Exhibit 4.2 to between City of Rapid City, South Dakota Registrant's Report on ("Rapid City") and Texas Commerce. Form 8-K dated May 8, 1985 4.22 Loan Agreement dated as of April 1, Filed as Exhibit 4.3 to 1985 between Rapid City and Registrant. Registrant's Report on Form 8-K dated May 8, 1985 4.23 Assignment of Lease dated as of Filed as Exhibit 4.4 to April 1, 1985 between Rapid City and Registrant's Report on Registrant. Form 8-K dated May 8, 1985 4.24 Irrevocable Letter of Credit dated Filed as Exhibit 4.5 to April 24, 1985 from Lloyds to Texas Registrant's Report on Commerce. Form 8-K dated May 8, 1985 4.25 Bank Agreement dated as of April 1, Filed as Exhibit 4.6 to 1985 between Registrant, Lloyds and Registrant's Report on Lloyds International Corporation. Form 8-K dated May 8, 1985 4.26 $2,937,500 Promissory Note dated Filed as Exhibit 4.7 to May 1, 1985 from Registrant to Utah Registrant's Report on State Retirement Fund ("Utah State"). Form 8-K dated May 8, 1985 4.27 Deed of Trust, Security Agreement and Filed as Exhibit 4.8 to Financing Statement dated May 1, 1985 Registrant's Report on by Registrant to Utah State and Form 8-K dated May 8, 1985 Helena Abstract & Title Company. 4.28 Assignment of Rents and Leases dated Filed as Exhibit 4.9 to May 1, 1985 by Registrant to Utah State. Registrant's Report on Form 8-K dated May 8, 1985 4.29 Security Agreement dated May 1, 1985 Filed as Exhibit 4.10 to between Registrant and Utah State. Registrant's Report on Form 8-K dated May 8, 1985 4.30 Assignment of Lease dated May 1, 1985 Filed as Exhibit 4.11 to between Utah State and Registrant. Registrant's Report on Form 8-K dated May 8, 1985 4.31 Tenant Estoppel Certificate dated Filed as Exhibit 4.12 to April 24, 1985 by IBM. Registrant's Report on Form 8-K dated May 8, 1985
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Exhibit Method of No. Description Filing - ----------- ------------------------------------- ------------------------ 4.32 Escrow and Security Agreement between Filed as Exhibit 4.1 to Registrant, Rentar Industries Realty Registrant's Report on Corporation ("Rentar") and Exchange Form 8-K dated July 2, National Bank in Chicago dated 1985 June 7, 1985. 4.33 $1,200,000 Secured Promissory Note of Filed as Exhibit 4.2 to Rentar to Bankers Life Company Registrant's Report on ("Bankers") dated December 13, 1979. Form 8-K dated July 2, 1985 4.34 Mortgage from Rentar to Bankers dated Filed as Exhibit 4.3 to December 13, 1979. Registrant's Report on Form 8-K dated July 2, 1985 4.35 Collateral Assignment of Lease and Filed as Exhibit 4.4 to Rents from Rentar to Bankers dated Registrant's Report on December 13, 1979. Form 8-K dated July 2, 1985 4.36 $5,200,000 Promissory Note of Rentar Filed as Exhibit 4.5 to to B.B. Cohen & Co. ("Cohen") dated Registrant's Report on August 11, 1975. Form 8-K dated July 2, 1985 4.37 Mortgage from Rentar to Cohen dated Filed as Exhibit 4.6 to August 11, 1975. Registrant's Report on Form 8-K dated July 2, 1985 4.38 Assignment from Cohen to Equitable Filed as Exhibit 4.7 to Life Insurance Company of Iowa Registrant's Report on ("Equitable") dated October 8, 1975. Form 8-K dated July 2, 1985 4.39 Assignment of Rents from Rentar to Filed as Exhibit 4.8 to Cohen dated August 11, 1975. Registrant's Report on Form 8-K dated July 2, 1985 4.40 Assignment of Lessor's Interest in Filed as Exhibit 4.9 to Lease from Rentar to Cohen dated Registrant's Report on August 11, 1975. Form 8-K dated July 2, 1985 4.41 $3,600,000 Installment Mortgage Note Filed as Exhibit 4.10 to of Rentar to Draper and Kramer of Registrant's Report on California, Inc. ("Draper") dated Form 8-K dated July February 7, 1973. 2, 1985
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Exhibit Method of No. Description Filing - ----------- ---------------------------------------- ------------------------ 4.42 Mortgage from Rentar to Draper dated Filed as Exhibit 4.11 to February 7, 1973. Registrant's Report on Form 8-K dated July 2, 1985 4.43 Assignment from Draper to Bank of Filed as Exhibit 4.12 to America National Trust and Savings Registrant's Report on Association ("Bank of America") dated Form 8-K dated July August 23, 1979. 2, 1985 4.44 Assignment of Rents and Leases from Filed as Exhibit 4.13 to Rentar to Draper dated February 7, 1985. Registrant's Report on Form 8-K dated July 2, 1985 4.45 Agreement to Assign Contract of Sale Filed as Exhibit 4.1 to dated July 2, 1985 between American Registrant's Form 10-Q Industrial Warehouses, Inc. ("AIW") dated August 15, 1985 and Registrant. 4.46 Assignment of Rights in Contract of Filed as Exhibit 4.2 to Sale dated July 16, 1985 between AIW Registrant's Form 10-Q and Registrant. dated August 15, 1985 4.47 $4,600,000 Promissory Note dated Filed as Exhibit 4.1 to August 30, 1985 from Registrant to Registrant's Report on Mellon Bank, N.A. ("Mellon"). Form 8-K dated September 12, 1985 4.48 Mortgage and Security Agreement dated Filed as Exhibit 4.2 to August 30, 1985 between Registrant Registrant's Report on and Mellon (Elyria, OH). Form 8-K dated September 12, 1985 4.49 Mortgage and Security Agreement dated Filed as Exhibit 4.3 to August 30, 1985 between Registrant Registrant's Report on and Mellon (Bellville, OH). Form 8-K dated September 12, 1985 4.50 Mortgage and Security Agreement dated Filed as Exhibit 4.4 to August 30, 1985 between Registrant Registrant's Report on and Mellon (Forrest City, AR). Form 8-K dated September 12, 1985 4.51 Mortgage and Security Agreement dated Filed as Exhibit 4.5 to August 30, 1985 between Registrant Registrant's Report on and Mellon (Bald Knob, AR). Form 8-K dated September 12, 1985
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Exhibit Method of No. Description Filing - ----------- ---------------------------------------- ------------------------- 4.52 Mortgage and Security Agreement dated Filed as Exhibit 4.6 to August 30, 1985 between Registrant Registrant's Report on and Mellon (Saginaw, MI). Form 8-K dated September 12, 1985 4.53 Mortgage and Security Agreement dated Filed as Exhibit 4.7 to August 30, 1985 between Registrant Registrant's Report on and Mellon (Carthage, NY). Form 8-K dated September 12, 1985 4.54 Mortgage and Security Agreement dated Filed as Exhibit 4.8 to August 30, 1985 between Registrant Registrant's Report on and Mellon (Newburyport, MA). Form 8-K dated September 12, 1985 4.55 Assignment of Rentals and Leases Filed as Exhibit 4.9 to dated August 30, 1985 from Registrant Registrant's Report on to Mellon. Form 8-K dated September 12, 1985 4.56 Seller's/Lessee's Certificate dated Filed as Exhibit 4.1 to November 25, 1985 from Gould Inc. to Registrant's Report on Registrant. Form 8-K dated December 9, 1985 4.57 Assignment of Rights in Purchase Filed as Exhibit 4.2 to Agreement dated November 21, 1985 Registrant's Report on between JB Properties, as Assignor, Form 8-K dated and Registrant as Assignee. December 9, 1985 4.58 Mortgage, Assignment of Leases, and Filed as Exhibit 4.1 to Security Agreement dated as of Registrant's Report on January 30, 1986, between Registrant Form 8-K dated and CPA(R):6, collectively as Mortgagor, March 4, 1986 and Lloyds Bank Plc ("Lloyds") and Texas Commerce Bank National Association, as Trustee ("Texas Commerce"), collectively as Mortgagee. 4.59 Mortgage, Assignment of Leases and Exhibit 4.59 to Form 10-K Security and Security Agreement and Filed April 18, 1986 CPA(R):6, collectively as Mortgagor, and Lloyds and Texas Commerce, collectively as Mortgagee. 4.60 Mortgage, Assignment of Leases and Filed as Exhibit 4.2 to Security Agreement dated January 30, Registrant's Report on 1986 between Registrant, as Form 8-K dated Mortgagor, and Lloyds and Texas March 4, 1986 Commerce, collectively as Mortgagee, on Broomall, PA property.
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Exhibit Method of No. Description Filing - ----------- ------------------------------------------------ ------------------------- 4.61 Modification Agreement dated March 1, Exhibit 4.61 to Form 10-K 1986 in connection with the Mortgage, Filed April 18, 1986 Assignment of Leases and Security Agreement dated January 30, 1986 on Broomall, PA property. 4.62 Mortgage, Assignment of Leases and Filed as Exhibit 4.3 to Security Agreement dated January 30, Registrant's Report on 1986 between Registrant, as Form 8-K dated Mortgagor, and Lloyds and Texas March 4, 1986 Commerce, collectively as Mortgagee, on Cuyahoga Falls, OH property. 4.63 Modification Agreement dated March 1, Exhibit 4.63 to Form 10-K 1986 in connection with the Mortgage, Filed April 18, 1986 Assignment of Leases and Security Agreement dated January 30, 1986 on Cuyahoga Falls, OH property. 4.64 Deed of Trust, Assignment of Leases Filed as Exhibit 4.4 to and Security Agreement dated January Registrant's Report on 30, 1986, between Registrant, as Form 8-K dated Grantor, and Lawyers Title Insurance, March 4, 1986 as Trustee on Duffield, VA property. 4.65 Deed of Trust Modification Agreement Exhibit 4.65 to Form 10-K dated March 1, 1986 in connection Filed April 18, 1986 with the Deed of Trust, Assignment of Leases and Security Agreement dated January 30, 1986 on Duffield, VA property. 4.66 Trust Indenture dated as of January Filed as Exhibit 4.5 to 1, 1986 between Michigan Strategic Registrant's Report on Fund ("MSF") and Texas Commerce. Form 8-K dated March 4, 1986 4.67 Trust Indenture dated as of March 1, Exhibit 4.67 to Form 10-K 1986 among MSF and Texas Commerce. Filed April 18, 1986 4.68 Loan Agreement dated as of January 1, Filed as Exhibit 4.6 to 1986 among MSF, Registrant and CPA(R):6. Registrant's Report on Form 8-K dated March 4, 1986 4.69 Loan Agreement dated as of March 1, Exhibit 4.69 to Form 10-K 1986 among MSF, Registrant and CPA(R):6. Filed April 18, 1986 4.70 Irrevocable Letter of Credit dated Filed as Exhibit 4.7 to January 30, 1986 from Lloyds to Texas Registrant's Report on Commerce. Form 8-K dated March 4, 1986
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Exhibit Method of No. Description Filing - ----------- -------------------------------------- ------------------------- 4.71 Irrevocable Letter of Credit dated Exhibit 4.71 to Form 10-K March 6, 1986 from Lloyds to Texas Filed April 18, 1986 Commerce. 4.72 Bank Agreement dated as of January Filed as Exhibit 4.8 to 30, 1986 between Registrant and Registrant's Report on CPA(R):6, jointly and severally, and Form 8-K dated March Lloyds. 4, 1986 4.73 Bank Agreement dated as of March 1, Exhibit 4.73 to Form 10-K 1986 among Registrant and CPA(R):6, Filed April 18, 1986 jointly and severally, and Lloyds. 4.74 $3,700,000 Promissory Note dated Filed as Exhibit 4.9 to January 30, 1986 from CPA(R):5, as Registrant's Report on Payee, to Registrant and CPA(R):6, Form 8-K dated March collectively as Payor. 4, 1986 4.75 Deed of Trust, Assignment of Rents, Filed as Exhibit 4.10 to dated February 14, 1986 from Form 8-K dated March Registrant, as Trustor, to Chicago 4, 1986 Title Insurance Company, as Trustee, for the benefit of New York Life Insurance Company ("New York Life"), as Beneficiary. 4.76 $7,000,000 Promissory Note Secured by Filed as Exhibit 4.11 to Deed of Trust, dated February 18, Registrant's Report on 1986 from Registrant to New York Life. Form 8-K dated March 4, 1986 4.77 Assignment of Lessor's Interest in Filed as Exhibit 4.12 to Lease with Assignment of Rents, Registrant's Report on Income and Cash Collateral, dated Form 8-K dated March February 14, 1986, from Registrant to 4, 1986 New York Life. 4.78 $1,500,000 Promissory Note from Exhibit 4.78 to Form 10-K Registrant to First Southern Federal Filed April 18, 1986 Savings and Loan Association ("First Southern") dated March 10, 1986. 4.79 Deed of Trust, Assignment of Rents Exhibit 4.79 to Form 10-K and Security Agreement between Filed April 18, 1986 Registrant, William A. Mann, Trustee and for the benefit of First Southern dated March 10, 1986.
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Exhibit Method of No. Description Filing - ----------- ------------------------------------------ ------------------------- 4.80 Estoppel Certificate and Exhibit 4.80 to Form 10-K Subordination Attornment and Filed April 18, 1986 Recognition Agreement between First Southern and Exide dated March 10, 1986. 4.81 First Mortgage dated April 3, 1987 Filed as Exhibit 4.16 to by Registrant, as Mortgagor to Registrant's Report on Security Pacific Business Credit, Inc. Form 8-K dated April ("Security Pacific"), as Mortgagee 17, 1986 (Frankenmuth, MI property). 4.82 First Mortgage dated April 3, 1987 Filed as Exhibit 4.17 to by Registrant to Security Pacific Registrant's Report on (Prophetstown, IL property). Form 8-K dated April 17, 1986 4.83 Deed of Trust and Security Agreement Filed as Exhibit 4.18 to dated April 3, 1986 by Registrant to Registrant's Report on Security Pacific (McMinnville, TN Form 8-K dated April property). 17, 1986 4.84 Term Loan and Security Agreement Filed as Exhibit 4.19 to dated April 3, 1986 between Registrant's Report on Registrant and Security Pacific. Form 8-K dated April 17, 1986 4.85 $4,000,000 Promissory Note dated Filed as Exhibit 4.20 to April 3, 1986 from Registrant to Registrant's Report on Security Pacific. Form 8-K dated April 17, 1986 4.86 Assignment of Rents and Leases dated Filed as Exhibit 4.21 to April 3, 1986 by Registrant, as Registrant's Report on Assignor, to Security Pacific, as Form 8-K dated April Assignee. 17, 1986 4.87 Intercreditor Agreement dated April Filed as Exhibit 4.22 to 3, 1986 among Chrysler Capital Registrant's Report on Corporation, Barclays American/Business Form 8-K dated April Credit, Inc. Security Pacific, 17, 1986 Registrant and Stanwich Industries, Inc. 4.88 Letter of Agreement dated August 12, 1987 Filed as Exhibit 4.1 to from NCNB National Bank of Florida to Registrant's Report on Registrant. Form 8-K dated August 26, 1986 4.89 $3,400,000 Term Note dated August 12, 1987 Filed as Exhibit 4.2 to from Registrant, as Borrower, to NCNB - Registrant's Report on Florida, as the Bank. Form 8-K dated August 26, 1986
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Exhibit Method of No. Description Filing - ----------- --------------------------------------------- ------------------------- 4.90 Mortgage and Security Agreement dated as Filed as Exhibit 4.3 to of August 12, 1986 between Registrant, as Registrant's Report on Mortgagor and NCNB - Florida, as Mortgagee. Form 8-K dated August 26, 1986 4.91 Assignment of Leases and Rents and Consent Filed as Exhibit 4.3 to of Lessee dated as of August 12, 1986 from Registrant's Report on Registrant, as Assignor to NCNB - Florida, Form 8-K dated August as Assignee. 26, 1986 4.92 $1,500,000 First Mortgage Note dated Filed as Exhibit 4.1 to December 22, 1986 from the Registrant, as Registrant's Report on Borrower, to 1st Source Bank ("1st Source"), Form 8-K dated as Lender. January 7, 1987 4.93 Mortgage and Security Agreement dated Filed as Exhibit 4.2 to December 22, 1986 between the Registrant, Registrant's Report on as Borrower, and 1st Source, as Lender Form 8-K dated and Secured Party. January 7, 1987 4.94 $5,000,000 Promissory Note dated December 14, Filed as Exhibit 4.1 to 1987, from Registrant, as Borrower, to Registrant's Report on Prudential, as Lender. Form 8-K dated December 28, 1987 4.95 Unconditional Guaranty of Payment and Filed as Exhibit 4.2 to Performance dated December 14, 1987 from Registrant's Report on Arley, as Guarantor, to Prudential, as Form 8-K dated Lender. December 28, 1987 4.96 Mortgage and Security Agreement dated Filed as Exhibit 4.3 to December 14, 1987 between Registrant, as Registrant's Report on Mortgagor, and Prudential, as Mortgagee. Form 8-K dated December 28, 1987 4.97 Assignment of Leases, Rents, Issues, Filed as Exhibit 4.4 to Income and Profits dated December 14, 1987 Registrant's Report on from Registrant, as Assignor, to Form 8-K dated Prudential, as Assignee. December 28, 1987 4.98 Release of Mortgage dated December 31, 1987 Filed as Exhibit 4.1 to between TRW, as Lender, and Registrant, Registrant's Report on as Borrower. Form 8-K dated January 14, 1988 10.1 Agreement of Sale dated December 30, 1983 Exhibit 10.1 to Form 10-K between Eaton Corporation and Registrant. filed April 10, 1984 10.2 Lease Agreement dated December 30, 1983 Exhibit 10.2 to Form 10-K between Registrant, as landlord, and Yale filed April 10, 1984 Industrial Products, Inc. ("Yale"), as tenant.
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Exhibit Method of No. Description Filing - ------------ ------------------------------------------- -------------------------- 10.3 Agreement of Lease, Sale and Purchase dated Exhibit 10.3 to Form 10-K December 30, 1983 among Liberty Fabrics filed April 10, 1984 of New York, Inc. ("Liberty"), Registrant and Liberty Fabrics of New York ("Libco"). 10.4 Lease Agreement dated December 30, 1983 Exhibit 10.4 to Form 10-K between Liberty, as landlord, and Libco, filed April 10, 1984 as tenant. 10.5 Assignment of Lease dated January 2, 1984 Exhibit 10.5 to Form 10-K from Liberty to Registrant. filed April 10, 1984 10.6 Management Agreement between Registrant and Exhibit 10(B) to Amendment Carey Corporate Property Management, Inc. No. 2 to Registration Statement (Form S-11) No. 2-83092 10.7 Support Agreement among Registrant, Exhibit 10(C) to Amendment Fifth Carey Corporate Property, Inc. No. 2 to Registration and W.P. Carey & Co., Inc. Statement (Form S-11) No. 2-83092 10.8 Lease Agreement dated April 11, 1984 Filed as Exhibit 10.5 between Registrant, as Landlord, and to Registrant's Report Rochester Button Company, Inc., on Form 8-K dated ("Rochester") as Tenant. April 25, 1984 10.9 Guaranty dated April 11, 1984 from Filed as Exhibit 10.6 Alpine Geophysical Corporation to to Registrant's Report Registrant. on Form 8-K dated April 25, 1984 10.10 Agreement of Sale dated June 29, 1984 Filed as Exhibit 10.1 between TRW Inc. and Registrant. to Registrant's Report on Form 8-K dated July 26, 1984 10.11 Lease Agreement dated June 29, 1984 by Filed as Exhibit 10.2 Registrant as Landlord and J. H. Williams to Registrant's Report Industrial Products Inc. as Tenant for on Form 8-K dated the New York property. July 26, 1984 10.12 Lease Agreement dated June 29, 1984 Filed as Exhibit 10.3 by Registrant as Landlord and to Registrant's Report J. H. Williams Industrial Products, Inc. on Form 8-K dated as Tenant for the Georgia property. July 26, 1984
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Exhibit Method of No. Description Filing - ------------ ----------------------------------------- ------------------------- 10.13 Agreement Concerning Lease dated July 13, Filed as Exhibit 10.4 to 1984 by Shapiro & Son Bedspread Corp. as to Registrant's Report Tenant, Registrant as Borrower and FCA on Form 8-K dated as Lender. July 26, 1984 10.14 Guaranty dated July 13, 1984 from Filed as Exhibit 10.5 Hampshire Textile Corp. to Registrant. to Registrant's Report on Form 8-K dated July 26, 1984 10.15 Agreement Concerning Guaranty dated Filed as Exhibit 10.6 July 13, 1984 by Hampshire Textile to Registrant's Report Corp. as Guarantor, Registrant as on Form 8-K dated Borrower and FCA as Lender. July 26, 1984 10.16 Agreement Amending Lease Agreement Filed as Exhibit 10.16 dated April 30, 1984 between Registrant to Registrant's Annual and Yale. Report on Form 10-K dated March 29, 1985 10.17 Subordination, Non-Disturbance and Filed as Exhibit 10.17 Attornment Agreement dated April 30, to Registrant's Annual 1984 among FCA, Registrant and Yale. Report on Form 10-K dated March 29, 1985 10.18 Lease Agreement dated August 7, 1984 Filed as Exhibit 10.18 between Registrant, as Landlord and to Registrant's Annual Penn Virginia Resources Corporation Report on Form 10-K dated ("Resources") and Pennsylvania Crusher March 29, 1985 Corporation ("Crusher"), as Tenants. 10.19 Memorandum of Lease dated August 7, Filed as Exhibit 10.19 1984 between Registrant and Crusher to Registrant's Annual recorded in Summit County, Ohio. Report on Form 10-K dated March 29, 1985 10.20 Memorandum of Lease dated August 7, Filed as Exhibit 10.20 1984 between Registrant and Crusher to Registrant's Annual recorded in Delaware County, Report on Form 10-K dated Pennsylvania. March 29, 1985 10.21 Memorandum of Lease dated August 7, Filed as Exhibit 10.21 1984 between Registrant and Resources to Registrant's Annual recorded in Scott County, Virginia. Report on Form 10-K dated March 29, 1985 10.22 Lease Guaranty dated August 7, 1984 Filed as Exhibit 10.22 by Penn Virginia Corporation ("Penn to Registrant's Annual Virginia") to Registrant. Report on Form 10-K dated March 29, 1985
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Exhibit Method of No. Description Filing - ------------ ---------------------------------------------- -------------------------- 10.23 Lease Agreement dated April 24, Filed as Exhibit 10.6 to 1985 by and between Registrant Registrant's Report on as landlord and Mt. Rushmore Form 8-K dated May 8, 1985 Hotel Corporation ("Mt. Rushmore") as tenant. 10.24 Lease Guaranty dated April 24, Filed as Exhibit 10.7 to 1985 from Landmark Hotel Registrant's Report on Corporation ("Landmark") to Form 8-K dated May 8, 1985 Registrant. 10.25 Memorandum of lease dated Filed as Exhibit 10.8 to April 24, 1985 between Registrant's Report on Registrant and Mt. Rushmore. Form 8-K dated May 8, 1985 10.26 Lease Agreement dated May 24, 1982 Filed as Exhibit 10.9 to between Unitco Realty & Construction Co., Inc. Registrant's ("Unitco") as landlord and Report on Form 8-K International Business Machines dated May 8, 1985 Corporation ("IBM") as tenant as amended. 10.27 Lease Agreement between Filed as Exhibit 10.1 to Registrant as Landlord and Registrant's Report on Exide Electronics Corporation Form 8 K dated July 2, ("Exide") as Tenant dated June 1985 20, 1985. 10.28 Memorandum of Lease between Filed as Exhibit 10.2 to Registrant and Exide dated Registrant's Report on June 20, 1985. Form 8-K dated July 2, 1985 10.29 Guaranty from Exide Electronics Filed as Exhibit 10.3 to Group, Inc. ("Exide Registrant's Report on Electronics") to Registrant Form 8-K dated July 2, dated June 20, 1985. 1985 10.30 Lease Agreement between Filed as Exhibit 10.4 to Registrant as Landlord and Registrant's Report on Rentar as Tenant dated June 7, Form 8-K dated July 2, 1985. 1985 10.31 Memorandum of Lease between Filed as Exhibit 10.5 to Registrant and Rentar dated Registrant's Report on June 7, 1985. Form 8-K dated July 2, 1985
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Exhibit Method of No. Description Filing - ------------ ------------------------------------------ -------------------------- 10.32 Lease Agreement between Rentar Industries, Filed as Exhibit 10.6 to Inc., Rentar and Couzens Warehouse and Registrant's Report on Distributors Inc. ("Couzens"), as Landlord Form 8-K dated July 2, and General Motors Corporation ("GM"), as 1985 Tenant dated May 24, 1982. 10.33 Lease Agreement dated July 11, Filed as Exhibit 10.1 to 1985 between Registrant as Registrant's Form landlord and General Cinema 10-Q dated August Corp. ("GCC") as tenant. 15, 1985 10.34 Lease Guaranty dated July 16, Filed as Exhibit 10.2 to 1985 between Registrant and GCC. Registrant's Form 10-Q dated August 15, 1985 10.35 Memorandum of Lease dated Filed as Exhibit 10.3 to July 11, 1985 between Registrant's Form Registrant and GCC. 10-Q dated August 15, 1985 10.36 Lease Agreement dated Filed as Exhibit August 30, 1985 between 10.1 to Registrant and Industrial Registrant's General Corporation Report on Form 8-K ("Industrial") Mitts & Merrill, dated September Inc. ("Mitts"), PlasTek 12, 1985 Corporation ("PlasTek"). 10.37 Memorandum of Lease dated Filed as Exhibit 10.2 to August 30, 1985 between Registrant's Report on Registrant and Industrial, Form 8-K dated September Mitts and PlasTek. 12, 1985 10.38 Guaranty of Lease dated August Filed as Exhibit 10.3 to 30, 1985 between Registrant and Registrant's Report on Industrial. Form 8-K dated September 12, 1985 10.39 Non-Disturbance Agreement dated Filed as Exhibit 10.4 to August 30, 1985 among Registrant's Report on Registrant, Mellon, Industrial, Form 8-K dated September Mitts and PlasTek. 12, 1985 10.40 Lease Agreement dated November Filed as Exhibit 10.1 to 25, 1985 between Registrant, as Registrant's Report on Lessor, and Gould Inc., as Form 8-K dated December 9, Lessee. 1985
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Exhibit Method of No. Description Filing - ------------ ---------------------------------------- -------------------------- 10.41 Memorandum of Lease dated Filed as Exhibit 10.2 to November 21, 1985, between Registrant's Report on Registrant, as Landlord, and Form 8-K dated December 9, Gould Inc., as Tenant. 1985 10.42 Joint Venture Agreement dated Filed as Exhibit 10.1 to January 30, 1986 between Registrant's Report on Registrant and CPA(R):6. Form 8-K dated March 4, 1986 10.43 Lease Agreement dated as of Filed as Exhibit 10.2 to January 30, 1986 by and between Registrant's Report on Registrant and CPA(R):6, Form 8-K dated March 4, collectively as Landlord, and 1986 Great Lakes Hotel Corporation ("Great Lakes"), as Tenant. 10.44 Lease Agreement as of March 6, Exhibit 10.44 to Form 10-K 1986 by and between Registrant filed April 18, 1984 and CPA(R):6, collectively as Landlord, and Northwoods Hotel Corporation ("Northwoods"), as Tenant. 10.45 Memorandum of Lease dated Filed as Exhibit 10.3 to January 30, 1986 between Registrant's Report on Registrant and CPA(R):6, as Form 8-K dated March 4, Landlord, and Northwoods, as Tenant. 1986 10.46 Memorandum of Lease dated March Exhibit 10.46 to Form 10-K 6, 1986 between Registrant and CPA(R):6, filed April 18, 1984 as Landlord, and Northwoods, as Tenant. 10.47 Lease Guaranty dated January Filed as Exhibit 10.4 to 30, 1986 from Landmark Hotel Registrant's Report on Corporation ("Landmark"), as Form 8-K dated March 4, Guarantor, to Registrant and 1986 CPA(R):6, collectively, as Landlord. 10.48 Lease Guaranty dated March 6, Exhibit 10.48 to Form 10-K 1986 from Landmark, as filed April 18, 1984 Guarantor, to Registrant and CPA(R):6, collectively as Landlord. 10.49 Lease Agreement dated April 3, 1987 Filed as Exhibit 10.5 to by and between Registrant, as Landlord, Registrant's Report on and Stanwich, as Tenant. Form 8-K dated April 17, 1986
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Exhibit Method of No. Description Filing - ------------ ----------------------------------------------------------- ------------------------- 10.50 Memorandum of Lease dated April 3, Filed as Exhibit 10.6 to 1986 between Registrant, as Landlord, Registrant's Report on and Stanwich, as Tenant. Form 8-K dated April 17, 1986 10.51 Lease Agreement dated as of August 12, 1987 Filed as Exhibit 10.1 to by and between Registrant, as Landlord, Registrant's Report on and Pace Membership Warehouse, Inc. Form 8-K dated August ("Pace"), as Tenant. 26, 1986 10.52 Memorandum of Lease made as of August 12, Filed as Exhibit 10.1 to between Registrant and Pace. Registrant's Report on Form 8-K dated August 26, 1986 10.53 Lease Agreement dated December 22, 1987 Filed as Exhibit 10.1 to by and between Registrant, as Landlord, Registrant's Report on and Stoody, as Tenant. Form 8-K dated January 7, 1987 10.54 First Amendment to Lease dated December 14, Filed as Exhibit 10.1 to 1987 by and between Registrant, as Landlord, Registrant's Report on and Arley, as Tenant. Form 8-K dated December 28, 1987 10.55 Lease Subordination Agreement dated December Filed as Exhibit 10.2 to 14, 1987 by and among Registrant, as Landlord, Registrant's Report on Arley, as Tenant, and Prudential, as Lender. Form 8-K dated December 28, 1987 10.56 Lease Agreement dated March 10, 1988 by Filed as Exhibit 10.56 to and between Registrant, as Landlord, Form 10-K dated and Winn-Dixie, as Tenant. April 15, 1988 10.57 Lease Guaranty dated March 10, 1988 from Filed as Exhibit 10.57 to Winn-Dixie Stores, as Guarantor, to Form 10-K dated Registrant, as Lessor. April 15, 1988 10.58 Lease dated September 13, 1995 between G.I. Pastek Filed as Exhibit 10.1 to Limited Partnership, as Tenant, and G.I. Plastek Industrial Registrant's Form 8-K Properties Limited Partnership, as Landlord. dated September 29, 1995 28.1 General Warranty Deed dated December 28, Filed as Exhibit 28.1 1983 from Eaton Corporation to to Registrant's Report Registrant. on Form 8-K dated April 25, 1984 28.2 Quitclaim Deed dated January 31, 1984 Filed as Exhibit 28.2 from Eaton Corporation to Registrant. to Registrant's Report on Form 8-K dated April 25, 1984
-28-
Exhibit Method of No. Description Filing - ------------ ---------------------------------------- ---------------------- 28.3 Deeds dated January 2, 1984 from Filed as Exhibit 28.3 Liberty to Registrant. to Registrant's Report on Form 8-K dated April 25, 1984 28.4 Bill of Sale dated January 2, 1984 Filed as Exhibit 28.4 from Liberty to Registrant. to Registrant's Report on Form 8-K dated April 25, 1984 28.5 General Warranty Deeds dated April 11, Filed as Exhibit 28.5 from Rochester to Registrant. to Registrant's Report on Form 8-K dated April 25, 1984 28.6 Bill of Sale dated April 11, 1984 Filed as Exhibit 28.6 from Rochester to Registrant. to Registrant's Report on Form 8-K dated April 25, 1984 28.7 General Warranty Deed dated June 29, Filed as Exhibit 28.1 1984 from TRW Inc. to Registrant for to Registrant's Report the New York property. on Form 8-K dated July 26, 1984 28.8 General Warranty Deed dated June 29, Filed as Exhibit 28.2 1984 from TRW Inc. as Grantor to Registrant's Report to Registrant as Grantee on Form 8-K dated for the Georgia property. July 26, 1984 28.9 Bill of Sale dated June 29, 1984 from Filed as Exhibit 28.3 TRW Inc. to Registrant. to Registrant's Report on Form 8-K dated July 26, 1984 28.10 Deed dated July 13, 1984 from Shapson Filed as Exhibit 28.4 Realty Corp. to Registrant. to Registrant's Report on Form 8-K dated July 26, 1984 28.11 Deed dated July 13, 1984 from Shapson Filed as Exhibit 28.5 Realty Corp. to Registrant. to Registrant's Report on Form 8-K dated July 26, 1984 28.12 Bill of Sale dated July 13, 1984 Filed as Exhibit 28.6 from Shapson Realty Corp. to Registrant. to Registrant's Report on Form 8-K dated July 26, 1984
-29-
Exhibit Method of No. Description Filing - ------------ -------------------------------------- --------------------------- 28.13 Deed dated August 7, 1984 from Filed as Exhibit 28.13 Resources to Registrant. to Registrant's Annual Report on Form 10-K dated March 29, 1985 28.14 General Warranty deed dated August 7, Filed as Exhibit 28.14 1984 from Crusher to Registrant. to Registrant's Annual Report on Form 10-K dated March 29, 1985 28.15 Deed dated August 7, 1984 from Crusher Filed as Exhibit 28.15 to Registrant. to Registrant's Annual Report on Form 10-K dated March 29, 1985 28.16 Warranty Deed dated April 24, 1985 Filed as Exhibit 28.4 to between Adventure Restaurant Corp. Registrant's Report on ("Adventure") and Registrant. Form 8-K dated May 8, 1985 28.17 Bill of Sale dated April 24, 1985 Filed as Exhibit 28.5 to from Adventure to Registrant. Registrant's Report on Form 8-K dated May 8, 1985 28.18 Warranty Deed dated May 1, 1985 Filed as Exhibit 28.6 to from Utah State to Registrant. Registrant's Report on Form 8-K dated May 8, 1985 28.19 Bill of Sale dated May 1, 1985 from Filed as Exhibit 28.7 to Utah State to Registrant. Registrant's Report on Form 8-K dated May 8, 1985 28.20 Real Estate Closing Agreement dated Filed as Exhibit 28.8 to May 1, 1985 between Registrant and Registrant's Report on Utah State. Form 8-K dated May 8, 1985 28.21 Deed from Design to Registrant Filed as Exhibit 28.1 to dated June 12, 1985. Registrant's Report on Form 8-K dated July 2, 1985 28.22 Bill of Sale of machinery, Filed as Exhibit 28.2 to equipment and other fixtures from Registrant's Report on Design to Registrant dated June 20, Form 8-K dated 1985. July 2, 1985 28.23 GM Waiver of Right of First Refusal Filed as Exhibit 28.3 to dated May 20, 1985. Registrant's Report on Form 8-K dated July 2, 1985
-30-
Exhibit Method of No. Description Filing - ------------ ----------------------------------- ------------------------ 28.24 Bill of Sale of air conditioner Filed as Exhibit 28.4 to from Exide to Registrant dated June Registrant's Report on 20, 1985. Form 8-K dated July 2, 1985 28.25 Special Warranty Deed from Rentar Filed as Exhibit 28.5 to to Registrant dated June 7, 1985. Registrant's Report on Form 8-K dated July 2, 1985 28.26 Bill of Sale of machinery, Filed as Exhibit 28.6 to equipment and personal property Registrant's Report on from Rentar to Registrant dated Form 8-K dated July June 7, 1985. 2, 1985 28.27 Warranty Deed dated July 11, 1985 Filed as Exhibit 28.1 to from GCC to Registrant. Registrant's Form 10-Q dated August 15, 1985 28.28 Bill of Sale dated July 16, 1985 Filed as Exhibit 28.2 to from GCC as seller to Registrant as Registrant's Form 10-Q buyer. dated August 15, 1985 28.29 Limited Warranty Deed dated August Filed as Exhibit 28.1 to 30, 1985 from Walco National Registrant's Report on Corporation ("Walco") to Registrant Form 8-K dated (Elyria, OH). September 12, 1985 28.30 Limited Warranty Deed dated August Filed as Exhibit 28.2 to 30, 1985 from Walco National Registrant's Report on Corporation ("Walco") to Registrant Form 8-K dated (Bellville, OH). September 12, 1985 28.31 Special Warranty Deed dated August Filed as Exhibit 28.3 to 30, 1985 from Walco to Registrant Registrant's Report on (Forrest City, AR). Form 8-K dated September 12, 1985 28.32 Special Warranty Deed dated August Filed as Exhibit 28.4 to 30, 1985 from Walco to Registrant Registrant's Report on (Bald Knob, AR). Form 8-K dated September 12, 1985 28.33 Warranty Deed dated August 30, 1985 Filed as Exhibit 28.5 to from Mitts to Registrant (Saginaw, Registrant's Report on MI). Form 8-K dated September 12, 1985
-31-
Exhibit Method of No. Description Filing - ------------ -------------------------------------------- ------------------------- 28.34 Deed dated August 30, 1985 from Filed as Exhibit 28.6 to Carthage Machine Company, Inc. to Registrant's Report on Registrant (Carthage, NY). Form 8-K dated September 12, 1985 28.35 Warranty Deed dated August 30, 1985 Filed as Exhibit 28.7 to from Walco to Registrant Registrant's Report on (Newburyport, MA). Form 8-K dated September 12, 1985 28.36 Bill of Sale dated August 30, 1985 Filed as Exhibit 28.9 to from Walco to Registrant (Elyria, OH). Registrant's Report on Form 8-K dated September 12, 1985 28.37 Bill of Sale dated August 30, 1985 Filed as Exhibit 28.10 to from Walco to Registrant (Bellville, OH). Registrant's Report on Form 8-K dated September 12, 1985 28.38 Bill of Sale dated August 30, 1985 Filed as Exhibit 28.11 to from Walco to Registrant (Forrest City, AR). Registrant's Report on Form 8-K dated September 12, 1985 28.39 Bill of Sale dated August 30, 1985 Filed as Exhibit 28.12 to from Walco to Registrant (Bald Knob, AR). Registrant's Report on Form 8-K dated September 12, 1985 28.40 Bill of Sale dated August 30, 1985 Filed as Exhibit 28.13 to from Walco to Registrant (Saginaw, MI). Registrant's Report on Form 8-K dated September 12, 1985 28.41 Bill of Sale dated August 30, 1985 Filed as Exhibit 28.14 to from Carthage to Registrant (Carthage, NY). Report on Form 8-K dated September 12, 1985 28.42 Bill of Sale dated August 30, 1985 Filed as Exhibit 28.15 to from Walco to Registrant (Newburyport, MA). Registrant's Report on Form 8-K dated September 12, 1985 28.43 Deed dated November 25, 1985 from Filed as Exhibit 28.1 to Gould Inc. to Registrant. Registrant's Report on Form 8-K dated December 9, 1985
-32-
Exhibit Method of No. Description Filing - ------------ ------------------------------------------ -------------------------- 28.44 Bill of Sale dated November 25, Filed as Exhibit 28.2 to 1985 from Gould Inc. to Registrant. Registrant's Report on Form 8-K dated December 9, 1985 28.45 Purchase Agreement dated July 25, Filed as Exhibit 28.3 to 1985 by Gould Inc., as Seller, with Registrant's Report on JB Properties, as Buyer. Form 8-K dated December 9, 1985 28.46 Warranty Deed dated January 30, 1986 Filed as Exhibit 28.1 to among Adventure Restaurant Corporation Registrant's Report on ("Adventure"), Registrant and CPA(R):6. Form 8-K dated March 4, 1986 28.47 Warranty Deed dated March 6, 1987 Exhibit 28.47 to Form 10-K among Adventure, Registrant and CPA(R):6. Filed April 17, 1986 28.48 Bill of Sale dated January 30, 1987 Filed as Exhibit 28.2 to from Adventure to Registrant and CPA(R):6. Registrant's Report on Form 8-K dated March 4, 1986 28.49 Bill of Sale dated March 6, 1987 Exhibit 28.49 to Form 10-K from Adventure to Registrant and CPA(R):6. Filed April 17, 1986 28.50 Bill of Sale dated April 3, 1986 from Filed as Exhibit 28.3 to Stanwich to Registrant. Registrant's Report on Form 8-K dated April 17, 1986 28.51 Warranty Deed dated April 3, 1986 from Filed as Exhibit 28.4 to Stanwich to Registrant (Frankenmuth, Registrant's Report on MI property). Form 8-K dated April 17, 1986 28.52 Warranty Deed dated April 3, 1986 from Filed as Exhibit 28.5 to Stanwich to Registrant (Prophetstown, Registrant's Report on IL property). Form 8-K dated April 17, 1986 28.53 Warranty Deed dated April 3, 1986 from Filed as Exhibit 28.6 to Stanwich to Registrant (McMinnville, Registrant's Report on TN property). Form 8-K dated April 17, 1986
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Exhibit Method of No. Description Filing - ------------ ------------------------------------------- ------------------------- 28.54 Seller/Lessee's Certificate dated Filed as Exhibit 28.7 to April 3, 1986 from Stanwich, as Seller, Registrant's Report on to Registrant, as Purchaser, and Form 8-K dated April 17, Security Pacific, as Lender. 1986 28.55 Seller/Lessee's Certificate dated Filed as Exhibit 28.1 to April 12, 1986 from Pace to Registrant. Registrant's Report on Form 8-K dated August 26, 1986 28.56 Special Warranty Deed made as of August 12, Filed as Exhibit 28.2 to 1986 between Pace, as Grantor, and Registrant's Report on Registrant, as Grantee. Form 8-K dated August 26, 1986 28.57 Bill of Sale dated August 12, 1987 Filed as Exhibit 28.3 to from Pace to Registrant. Registrant's Report on Form 8-K dated August 26, 1986 28.58 Bill of Sale dated December 22, 1987 Filed as Exhibit 28.1 to from Stoody to Registrant. Registrant's Report on Form 8-K dated January 7, 1987 28.59 Corporate Warranty Deed made as of December Filed as Exhibit 28.2 to 22, 1986 by Stoody, as Grantor, and Registrant's Report on Registrant, as Grantee. Form 8-K dated January 7, 1987 28.60 Seller/Lessee's Certificate dated Filed as Exhibit 28.3 to December 22, 1986 from Stoody, as Seller, Registrant's Report on to Registrant, as Purchaser. Form 8-K dated January 7, 1987 28.61 Indemnification Agreement by and between Filed as Exhibit 28.4 to the Registrant, as Borrower, 1st Source, Registrant's Report on as Lender, and Stoody, as Tenant. Form 8-K dated January 7, 1987 28.62 Agreement of Sale dated December 1, 1987 by Filed as Exhibit 28.1 to and between Registrant, as Seller, and Registrant's Report on Brondy, as Buyer. Form 8-K dated January 14, 1988
-34-
Exhibit Method of No. Description Filing - ------------ ------------------------------------------------ ------------------------ 28.63 First Amendment to Agreement of Sale dated Filed as Exhibit 28.2 to December 1, 1987 by and between Registrant, Registrant's Report on as Seller, and Brondy, as Buyer. Form 8-K dated January 14, 1988 28.64 Bill of Sale dated December 31, 1992 from Filed as Exhibit 28.3 to Registrant to Brondy. Registrant's Report on Form 8-K dated January 14, 1988 28.65 Bargain and Sale Deed dated December 30, 1987 Filed as Exhibit 28.4 to from Registrant, as party of the first part, Registrant's Report on to Brondy, as party of the second part. Form 8-K dated January 14, 1988 28.66 Warranty Deed dated March 10, 1988 between Filed as Exhibit 28.66 Winn-Dixie, as Grantor, and Registrant, Form 10-K dated as Grantee. April 15, 1988 28.67 Bill of Sale dated March 10, 1988 from Filed as Exhibit 28.67 Winn-Dixie, as Seller, to Registrant, Form 10-K dated as Purchaser. April 15, 1988 28.68 Seller's Certificate dated March 10, 1988 Filed as Exhibit 28.68 from Winn-Dixie, as Seller, to Registrant, Form 10-K dated as Purchaser. April 15, 1988 28.69 Prospectus of Registrant Filed as Exhibit 28.69 dated August 2, 1983. to Form 10K/A dated September 24, 1993 28.70 Supplement dated September 29, 1983 Filed as Exhibit 28.70 to Prospectus dated August 2, 1983. to Form 10K/A dated September 24, 1993 28.71 Press release dated June 30, 1993 Exhibit 28.1 to Form 8-K announcing the suspension of secondary dated July 12, 1993 market sales of Limited Partnership Units. 28.72 Agreement of Limited Partnership of G.I. Plastek Filed as Exhibit 28.1 to Limited Partnership dated September 8, 1995. Registrant's Form 8-K dated September 29, 1995
(b) Reports on Form 8-K ------------------- During the quarter ended December 31, 1995 the Registrant was not required to file any reports on Form 8-K. -35- SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) 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 5 (a California limited partnership) BY: CAREY CORPORATE PROPERTY, INC. 04/01/96 BY: /s/ Claude Fernandez -------------- ------------------------------ Date Claude Fernandez Executive Vice President and Chief Administrative Officer (Principal Financial Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. BY: CAREY CORPORATE PROPERTY, INC. William P. Carey Chairman of the Board and Director (Principal Executive Officer) Francis J. Carey President and Director George E. Stoddard BY: /s/ George E. Stoddard Chairman of the Investment ---------------------- Committee and Director George E.Stoddard Attorney in fact April 1, 1996 Dr. Lawrence R. Klein Chairman of the Economic Policy Committee and Director Madelon DeVoe Talley Vice Chairman of the Board of 04/01/96 BY: /s/ Claude Fernandez - -------- ----------------------- Date Claude Fernandez Executive Vice President and Chief Administrative Officer (Principal Financial Officer) 04/01/96 BY: /s/ Michael D. Roberts - -------- ----------------------- Date Michael D. Roberts First Vice President and Controller (Principal Accounting Officer)
-36- APPENDIX A TO FORM 10-K CORPORATE PROPERTY ASSOCIATES 5 (A CALIFORNIA LIMITED PARTNERSHIP) 1995 ANNUAL REPORT SELECTED FINANCIAL DATA - -------------------------------------------------------------------------------- (In thousands except per unit amounts)
1991 1992 1993 1994 1995 -------- ------- ------- ------- --------- OPERATING DATA: Revenues $15,167 $18,195 $18,261 $18,125 $ 15,768 Income before extraordinary 2,883 5,857 4,496 5,557 1,913 item Income before extraordinary item allocated: To General Partners 173 351 270 1,011 201 To Limited Partners 2,710 5,506 4,226 4,546 1,712 Per unit 23.94 48.64 37.34 40.16 15.12 Distributions attributable (1): To General Partners 345 348 350 352 365 To Limited Partners 5,400 5,445 5,489 5,516 7,635 Per unit 47.70 48.10 48.49 48.73 67.45 (2) Payment of mortgage principal (3) 923 915 826 725 463 BALANCE SHEET DATA: Total assets 108,247 95,637 93,950 92,366 72,268 Long-term obligations (4) 59,080 42,463 34,949 31,310 24,505
(1) Includes distributions attributable to the fourth quarter of each fiscal year payable in the following fiscal year less distributions in the first fiscal quarter attributable to the prior year. (2) 1995 distributions include a special distribution of $20 per Limited Partnership Unit. (3) Represents scheduled mortgage amortization paid. (4) Represents mortgage and note payable obligations due after more than one year. -1- MANAGEMENT'S DISCUSSION AND ANALYSIS - -------------------------------------------------------------------------------- Results of Operations --------------------- Net income for the year ended December 31, 1995 decreased by $3,526,000 as compared with net income for the year ended December 31, 1994. Income before gains in 1995 reflected a decrease of $3,016,000 when compared to 1994. Of such decrease, $1,980,000 was the result of noncash writedowns of assets to estimated fair value, as described below. The decrease in earnings was also attributable to a decrease in lease revenues and an increase in general and administrative expenses and was partially offset by decreases in interest and property expenses and an increase in other interest income. Of the $2,890,000 decrease in lease revenues, $2,738,000 was due to the disposition of properties leased to Pace Membership Warehouse, Inc. ("Pace") and Liberty Fabrics of New York ("Liberty Fabrics") in 1994 and Industrial General Corporation ("Industrial General") in 1995. In addition, lease revenues also decreased as the result of lower rentals from GATX Logistics, Inc. ("GATX"). In November 1994 a short-term lease with GATX expired at which time GATX and the Partnership replaced the short-term lease with a new five- year lease agreement. The increase in general and administrative expense was due to an increase in partnership level franchise taxes and the Partnership's office costs. There was a substantial increase in franchise taxes; accordingly, the accrual for such taxes has been increased at December 31, 1995. The increase in office expenses was due, in part, to nonrecurring costs in connection with the relocation of the Partnership's offices. The decrease in interest expense was primarily due to the payoff in 1994 of mortgages on the Pace, Liberty Fabrics and Spreckels Industries, Inc. ("Spreckels") properties in 1994 and the satisfaction of the mortgage loan on the Industrial General properties in 1995. The decrease in property expenses was due to costs incurred in 1994 in connection with the Partnership's assessment of its liquidity alternatives which included environmental reviews and property valuations. Other interest income increased due to higher cash balances held by the Partnership earlier in the year prior to the payment of a special distribution to partners of $2,287,000. In 1995, the Partnership wrote down the estimated net realizable value of the Partnership's hotel property in Rapid City. In connection with the sale of the Industrial General properties, the Partnership wrote off the remaining value of a property in Elyria, Ohio which was not included in the property sale and no longer subject to lease. In addition, the Partnership wrote off its preferred stock investment in and a note receivable from Rochester Button Company ("Rochester Button"), a lessee which has experienced financial difficulties. The Partnership had previously taken writedowns on the Rochester Button preferred stock and the estimated residual value of the Rochester Button properties in 1993. Earnings from the Partnership's hotel operations decreased by $109,000 to $1,527,000 as compared with 1994, a decrease of approximately 7%. The occupancy rate at the Petoskey, Michigan hotel declined to 43% in 1995 from 47% in 1994. As a result of this decrease which was caused by increased competition from a nearby resort area, the Partnership was only able to increase the average room rate at Petoskey by 0.6% in 1995. The occupancy rates at the Alpena, Michigan hotel property remained stable at 55% and the Partnership was able to increase the average room rate by slightly less than 5%. The Rapid City hotel's occupancy rate increased by approximately 2% to 57% with an increase in the average room rate of 2.5%. The overall increase in hotel revenues was entirely offset by an increase of 5.5% in operating costs. The revenues of all three hotels are seasonal in nature with earnings highly dependent on operating results during the summer months. The trend of decreases in lease revenues is expected to continue in 1996 as compared with 1995 due to the sale of the Industrial General properties in 1995 as well as the January 1996 sale of a multi-tenant office building in Helena, Montana. In 1995, the Helena property contributed lease revenues of $530,000 including $318,000 from the lease with IBM Corporation. In addition, revenues and earnings from the Rapid City hotel operation are likely to decrease as a result of an expected change in affiliation from Holiday Inn to another national hotel chain in 1996 or 1997. It is expected that the affiliation will be with a chain which has lower room rates than a Holiday Inn. Under the extension agreement with the issuer of the letter of credit which supports the $6,800,000 tax-exempt mortgage bonds collateralized by the Rapid City property, a substantial portion of the cash generated from the Rapid City property will be used to increase certain reserve balances thereby reducing the cash flow available to the Partnership for paying distributions. Although there are several rent increases scheduled on Partnership leases in 1996, 1997 and 1998, such increases will not be sufficient to replace the combined effect of the above-mentioned reductions in lease revenues and the expected decrease in hotel earnings at Rapid City. The Partnership has invested $1,750,000 in the redeemable, preferred limited partnership interest in a start-up operation at two of the former Industrial General -2- properties. Although there is a stated cumulative return , there is no assurance that there will be any distributions from this investment during 1996. Interest expense should continue to decrease due to satisfaction of the Industrial General loan in 1995 and the mortgage loan on the Helena property which was assumed by the purchaser of the property when it was sold in January 1996 as well as regular principal payments on its remaining mortgage loan obligations. Net income in 1994 increased to $5,439,000 as compared with net income of $4,496,000 in 1993; however, cash provided from operating activities remained stable. After adjusting 1994 results for the net gain on sales of real estate and extraordinary charges on the extinguishment of the related mortgage debt and 1993 results for the writedown to net realizable value of certain assets and the gain on the release of an escrow fund, income for 1994 would have reflected a decrease of $291,000. Such decrease was due to an increase in property expenses and a decrease in lease revenues and was partially offset by decreases in interest expense and depreciation expense. Lease revenues decreased as a result of an adjustment to the January 1993 rent increase on the lease with Spreckels during 1994, and the termination of the lease with Pace in November 1994 in connection with the sale of the property. The decreases in lease revenues were partially offset by a rental increase in 1994 on the lease with Liberty prior to its termination in December 1994 and new leases for the remaining space at the Helena, Montana office property. A new lease agreement with GATX slightly reduced revenues for the period subsequent to the lease extension agreement. Interest expense decreased as the result of a reduction in the annual interest rate in December 1993 on the Liberty mortgage loan from 12% to 7%, the benefit of the July 1993 refinancing of the loan on the GATX property at a lower rate of interest, the declining interest component on the Partnership's amortizing debt and payoff in November 1994 of the Pace and Spreckels mortgage loans. Depreciation expense decreased primarily as the result of certain assets for which the component life method is used becoming fully depreciated in 1994. Property expense increased as the result of costs incurred in connection with the evaluation of liquidity alternatives. In 1994, net income included a gain due to the sale of the Pace property and a loss on the sale of the Forrest City, Arkansas property formerly leased to IGC, which contributed an aggregate net gain of $1,243,000 to 1994 net income. The extraordinary charge of $118,000 on extinguishment of debt resulted from the payment of premiums to lenders on the liquidation of two mortgage loans and the related writeoff of the deferred financing costs on such loans. The Partnership's earnings from hotel operations decreased by $25,000 in 1994 as compared with 1993. Revenues from the Rapid City hotel increased by only .3% as the result of an increase in beverage revenues and a slight increase in the average room rate; however, these increases were partially offset by an increase in operating expenses. The occupancy rate at the Rapid City hotel remained stable. Revenues for the Petoskey Holiday Inn increased by 3% with the occupancy rate for the hotel increasing by 1% to 47%. The Petoskey revenue increase was due to increases in food and beverage revenues. Revenues for the Alpena Holiday Inn were unchanged from the prior year with the occupancy rate remaining at 55% and no change in the average room rate. Because of the net and long-term nature of the Partnership's leases, inflation and changing prices have not unfavorably affected the Partnership's revenues and net income. Except for the Penn Virginia Corporation lease, all of the Partnership's net leases have provisions providing for rent increases based on formulas indexed to increases in the Consumer Price Index ("CPI") and may include caps on such CPI increases, sales overrides or scheduled mandatory increases which could increase operating revenues in the future. Future rent increases may be affected by changes in the method of the calculation of the CPI. Although there are indications that there may be legislation which considers changes to the CPI methodology, the Partnership cannot predict the outcome of proposed changes relating to the CPI formula. As the rate of inflation has been moderate in recent years, the Partnership believes that hotel operations may not be significantly impacted by changing prices. Management believes that reasonable increases in costs may be partially or entirely passed through by increases in room rates. Financial Condition ------------------- Other than the three hotel properties operated by the Partnership and a property in Elyria, Ohio, all of the Partnership's properties are leased to corporate tenants under net leases which generally require tenants to pay all operating expenses relating to the leased properties. The Partnership depends on relatively stable operating cash flow from its net leases and operating properties to meet operating expenses, service its debt, fund distributions and maintain adequate cash reserves. The Partnership maintains a working capital reserve to fund major outlays such as capital improvements on its properties and balloon debt -3- payments. Such expenditures may also be funded from additional borrowing on the Partnership's real estate portfolio. The Partnership's cash and cash equivalents were $2,301,000 at December 31, 1995. As a real estate limited partnership, the Partnership has distributed, since its inception, a substantial portion of its cash flow to its partners. The Partnership's current strategy has been to utilize its cash flow from operations and its cash reserves to fund an increasing rate of distributions and fund necessary improvements at several of its properties. During 1995, cash provided from operations of $4,688,000 was not fully sufficient to fund quarterly distributions to partners of $5,768,000 and pay scheduled principal payments on the Partnership's mortgage debt. The Partnership also paid a special distribution of $2,287,000 ($20 per Limited Partnership Unit), such distribution was paid from the proceeds of sales executed in 1994. Management gives consideration to its projections of cash flows as well as the Partnership's current cash balances in determining the distributions paid to limited partners. Accordingly, distributions paid may exceed net income per Limited Partnership. This is because net income is impacted by noncash charges such as depreciation, amortization and writedowns to net realizable value. During the five-year period ended December 31, 1995, distributions have exceeded net income on a per Unit basis by $23.66, $11.06, $9.50 and $52.78 in 1991, 1993, 1994 and 1995, respectively. The Partnership's investing activities in 1995 included the receipt of $3,387,000 from the sale of the Industrial General properties. Such proceeds were used to purchase limited partner interests for $1,750,175 in G.I. Plastek L.P. ("Plastek"), a start-up operation at two of the Industrial General properties, with the remaining sales proceeds used to pay off the mortgage loan on the Industrial General properties. For its investment, the Partnership will be entitled to a cumulative, nonparticipating return of 10% ($175,000 per annum) and 17.5% of all cash distributions paid in excess of the preferred, nonparticipating distributions. Cash returns on this investment are conditioned upon the ability of Plastek to generate sufficient cash flow to pay distributions to its partners. There can be no assurance that this investment will currently generate such cash return. In 1995, the Partnership funded $1,079,000 of capital improvements including approximately $675,000 for the hotel properties, primarily at Alpena and Petoskey, and $430,000 of improvements at the Helena, Montana property including replacement of heating, ventilation and air conditioning systems. A significant portion of the improvements at the Helena property were subsidized by the local utility company. The Partnership is committed to meeting the requirements of the Holiday Inn core modernization plan to upgrade the physical plant of the Alpena and Petoskey hotels in order to retain the Holiday Inn franchise for these properties. The Partnership's share of costs necessary to meet the requirements under the modernization plan, as approved by Holiday Inn, are approximately $754,000. The Partnership concluded in 1994 that the return on investment from the estimated $1,925,000 costs of upgrading the Rapid City hotel, necessary to comply with the Holiday Inn plan, would not justify compliance with the plan. The Partnership is seeking an affiliation with another hotel chain, which the Partnership estimates will require it to fund $500,000 of capital improvements in order to obtain such affiliation. As a result of extending the letter of credit supporting the $6,800,000 tax-exempt bonds used to purchase the Rapid City hotel in 1985 ("Rapid City bonds"), the Partnership has agreed to use its best efforts to sell the hotel prior to the expiration of the letter of credit in November 1997. The Partnership is obligated under the extension agreement to deposit 50% of the cash flow from the hotel operation in existing escrow accounts. A portion or all of such balances will be available to the issuer of the letter of credit if sales proceeds are not sufficient to fully redeem the tax-exempt bonds on the property. Although the Partnership is committed to attempt to sell the property prior to the expiration of the extension period, there can be no assurance that a sale will be executed. At December 31, 1995, deposits in escrow accounts for the Rapid City property amounted to $2,295,000. The Partnership's financing activities over the past several years have primarily consisted of paying quarterly distributions to partners and meeting scheduled principal payments installments on its mortgage debt. In connection with the sale of the Liberty Fabrics, Pace and Industrial General properties, the Partnership paid off the mortgage loans on those properties. In 1994, the Partnership also paid off the mortgage loan on the Spreckels property and, in 1995, made a partial prepayment of $144,000 on the 13.48% note payable to an affiliate. The Partnership's $4,755,000 mortgage loan on properties leased to Arley Merchandise Corporation has matured. Although the Partnership and the lender have had discussions regarding extending the maturity of the loan, no agreement has been reached and the amounts are due on demand by the lender. No demand has yet been made for full payment. There are balloon payments of $7,491,000 on the mortgage loans collateralized by the Exide Electronics Corporation and Gould, Inc. properties due in 1996 and -4- $1,071,000 and $2,905,000 of balloon payments on mortgage loans collateralized by the Stoody Deloro Stellite, Inc. and GATX properties in 1997 and 1998, respectively. Although the Partnership will attempt to be pay these balloon payments by seeking refinancing, there can be no assurance that the Partnership will obtain such new financing. As all of these loans are limited recourse obligations, the Partnership is responsible for each balloon payment only to the extent of its interest in the encumbered properties because the holder of each such obligation has recourse only to the property collateralizing such debt. In the event that the Partnership is unable to refinance the debt, it could attempt to restructure the debt with the existing lenders or sell properties and use the sales proceeds to retire mortgage debt. In the event that the Partnership does not sell the Rapid City property prior to the end of the extension term, the bondholders would have recourse solely to the issuer of the letter of credit who, in turn, would have recourse solely to the property and the specially designated escrow accounts. Starting in 1996, the Partnership's tax-exempt mortgage financing on the Alpena and Petoskey properties will start to require principal payments. The bonds on Alpena and Petoskey properties are collateralized by the hotels as well as mortgages and or lease assignments on eight of the Partnership's properties, leased to five lessees. DeVlieg Bullard, Inc. and Penberthy Products, Inc. have purchase options on their leased properties in 1996. In the event that the options are exercised, the Partnership would realize at least $6,150,000, based on an exercise price of the greater of fair market value or $6,150,000. If the options are exercised, future operating cash flow would decrease by $1,013,000. Neither lessee has yet indicated whether it intends to exercise its option. In the event that the options are not exercised, the leases will remain in full force. Cash flow from operations will be adversely affected by an expected decrease in earnings from hotel operations, the requirement to fund reserve accounts, and the uncertainty of any current cash return on the Plastek investment. Accordingly, this will reduce the funds available for distributions. Management is currently evaluating offers for the sale of certain properties. In the event of such sales, a substantial portion of the proceeds will probably be used to pay off maturing debt. While the proposed sales would benefit the financial condition of the Partnership, future cash flow from operations would decrease. Accordingly, it is expected that the rate of distributions will be reduced to a level where cash flow from operations would be sufficient to fund on-going distributions, scheduled principal payment installments and an increase in cash reserves. In 1994, the Partnership voluntarily conducted Phase II reviews of certain of its properties based on the results of the Phase I environmental reviews conducted in 1993. The Partnership believes, based on the results of such reviews, that its leased properties are in substantial compliance with Federal and state environmental statutes and regulations. Portions of certain properties have been documented as having a limited degree of contamination, principally in connection with either leakage from underground storage tanks or surface spills from facility activities. For those conditions which were identified, the Partnership advised its tenants of such findings and of their obligations, if any, to perform any required remediation. All of the Partnership's properties are subject to environmental statutes and regulations regarding the discharge of hazardous materials and any related remediation obligations. Except for the three hotel properties and a property in Elyria, Ohio, all of the properties are currently net leased to corporate tenants. The Partnership normally structures its leases to require tenants to comply with all laws. In addition, substantially all of the Partnership's net leases include indemnification provisions which require tenants to indemnify the Partnership from all liabilities and losses related to their operations at the leased properties. If the Partnership undertakes to clean up or remediate any of its leased properties, the General Partners believe that in most cases the Partnership will be entitled to full reimbursement from tenants for such costs. Further, in the event that the Partnership either is responsible or becomes responsible for such costs because of a tenant's failure to fulfill its obligations the General Partners believe that the ultimate resolution of the aforementioned environmental matters will not have a material adverse effect on the Partnership's financial condition, liquidity or results of operations. Effective January 1, 1995, the Partnership adopted the provisions of Statement of Financial Accounting Standards No. 121 - Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of ("SFAS 121"). Pursuant to SFAS 121, the Partnership assesses the recoverability of its real estate assets, including residual interests, based on projections of cash flows over the life of such assets. In the event that such cash flows are insufficient, the assets are adjusted to their estimated net realizable value. The adoption of SFAS 121 did not have a material effect of the Partnership's financial condition or results of operations. -5- REPORT of INDEPENDENT ACCOUNTANTS To the Partners of Corporate Property Associates 5: We have audited the accompanying balance sheets of Corporate Property Associates 5 (a California limited partnership) as of December 31, 1994 and 1995, and the related statements of income, partners' capital and cash flows for each of the three years in the period ended December 31, 1995. We have also audited the financial statement schedule included on pages 22 to 25 of this Annual Report. These financial statements and financial statement schedule are the responsibility of the General Partners. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the General Partners, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Corporate Property Associates 5 (a California limited partnership) as of December 31, 1994 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. In addition, in our opinion, the Schedule of Real Estate and Accumulated Depreciation as of December 31, 1995, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the financial information required to be included therein pursuant to Securities and Exchange Commission Regulation S-X Rule 12-28. /s/Coopers & Lybrand L.L.P. New York, New York March 22, 1996 -6- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) BALANCE SHEETS December 31, 1994 and 1995
1994 1995 ------------ ------------- ASSETS: Real estate leased to others: Accounted for under the operating method: Land $ 5,022,767 $ 4,722,767 Buildings 40,519,068 34,271,786 ----------- ----------- 45,541,835 38,994,553 Accumulated depreciation 13,182,621 12,371,727 ----------- ----------- 32,359,214 26,622,826 Net investment in direct financing leases 25,925,844 19,352,938 ----------- ----------- Real estate leased to others 58,285,058 45,975,764 Operating real estate, net of accumulated depreciation of $7,393,500 in 1994 and $4,265,218 in 1995 14,374,649 7,735,809 Real estate held for sale 7,006,938 10,388,398 Cash and cash equivalents 7,926,845 2,300,682 Funds in escrow 2,665,179 2,977,622 Accrued interest and rents receivable, net of reserve for uncollected rent of $165,164 in 1995 267,515 9,634 Investment in limited partnership 1,750,175 Other assets, net of accumulated amortization of $96,990 in 1994 and $130,589 in 1995 1,839,711 1,130,318 ----------- ----------- Total assets $92,365,895 $72,268,402 =========== =========== LIABILITIES: Mortgage notes payable $39,449,033 $36,065,145 Note payable to affiliate 1,295,000 1,151,000 Accrued interest payable 184,349 170,877 Accounts payable and accrued expenses 617,812 572,267 Accounts payable to affiliates 113,928 144,553 Prepaid rental income 119,601 3,051 Deferred gains, net of accumulated amortization of $174,110 in 1994 and $245,788 in 1995 1,438,271 1,366,593 Deferred sales proceeds 9,359,000 Other liabilities 1,900,554 1,048,853 ----------- ----------- Total liabilities 54,477,548 40,522,339 ----------- ----------- Commitments and contingencies PARTNERS' CAPITAL: General Partners (94,987) (262,961) Limited Partners (113,200 Limited Partnership Units issued and outstanding) 37,983,334 32,009,024 ----------- ----------- Total partners' capital 37,888,347 31,746,063 ----------- ----------- Total liabilities and partners' capital $92,365,895 $72,268,402 =========== ===========
The accompanying notes are an integral part of the financial statements. -7- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) STATEMENTS of INCOME For the years ended December 31, 1993, 1994 and 1995
1993 1994 1995 ----------- ------------ ----------- Revenues: Rental income $ 5,772,677 $ 5,606,618 $ 4,642,686 Interest income from direct financing leases 5,863,542 5,805,643 3,879,125 Other interest income 90,231 117,325 307,951 Revenue of hotel operations 6,534,164 6,595,570 6,768,268 Other income 170,107 ---------- ----------- ----------- 18,260,614 18,125,156 15,768,137 ----------- ----------- ----------- Expenses: Interest 4,941,889 4,518,529 3,495,872 Depreciation 2,295,887 2,181,422 2,065,781 General and administrative 563,278 571,189 841,920 Property expenses 923,713 1,516,194 810,581 Amortization 57,904 63,932 33,599 Writedown to net realizable value 323,611 1,980,550 Operating expense of hotel operations 4,873,098 4,959,699 5,241,370 ----------- ----------- ----------- 13,979,380 13,810,965 14,469,673 ----------- ----------- ----------- Income before gains and extraordinary item 4,281,234 4,314,191 1,298,464 Gain on release of escrow funds 214,978 Net gains on sale of real estate 1,242,614 614,234 ----------- ----------- ----------- Income before extraordinary charge 4,496,212 5,556,805 1,912,698 Extraordinary charge on extinguishment of debt 117,619 ----------- ----------- ----------- Net income $ 4,496,212 $ 5,439,186 $ 1,912,698 =========== =========== =========== Net income allocated to: Individual General Partner $ 44,962 $ 171,409 $ 52,520 =========== =========== =========== Corporate General Partner $ 224,811 $ 832,262 $ 148,208 =========== =========== =========== Limited Partners $ 4,226,439 $ 4,435,515 $ 1,711,970 =========== =========== =========== Net income per Limited Partnership Unit (113,200 Units outstanding) Income before extraordinary charge $37.34 $40.16 $15.12 Extraordinary charge (.98) ----------- ----------- ----------- $37.34 $39.18 $15.12 =========== =========== ===========
The accompanying notes are an integral part of the financial statements. -8- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) STATEMENTS of PARTNERS' CAPITAL For the years ended December 31, 1993, 1994 and 1995
Partners' Capital Accounts ----------------------------------- Limited Partners' General Limited Amount Per Total Partners Partners Unit (a) ----- -------- -------- ------------- Balance, December 31, 1992 $39,643,859 $ (666,977) $40,310,836 $356 Distributions (5,828,596) (349,716) (5,478,880) (48) Net income, 1993 4,496,212 269,773 4,226,439 37 ----------- ---------- ----------- ---- Balance, December 31, 1993 38,311,475 (746,920) 39,058,395 345 Distributions (5,862,314) (351,738) (5,510,576) (49) Net income, 1994 5,439,186 1,003,671 4,435,515 39 ----------- ---------- ----------- ---- Balance, December 31, 1994 37,888,347 (94,987) 37,983,334 335 Distributions (8,054,982) (368,702) (7,686,280) (68) Net income, 1995 1,912,698 200,728 1,711,970 15 ----------- ---------- ----------- ---- Balance, December 31, 1995 $31,746,063 $ (262,961) $32,009,024 $282 =========== ========== =========== ====
(a) Based on 113,200 Units issued and outstanding during all periods. The accompanying notes are an integral part of the financial statements. -9- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) STATEMENTS of CASH FLOWS For the years ended December 31, 1993, 1994 and 1995
1993 1994 1995 ------------ ------------- ------------- Cash flows from operating activities: Net income $ 4,496,212 $ 5,439,186 $ 1,912,698 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,353,791 2,245,354 2,099,380 Amortization of deferred gains (72,064) (71,609) (71,678) Cash receipts on operating and financing leases greater than income recognized 203,629 8,388 13,162 Writedown to net realizable value 323,611 1,980,550 Gain on release of escrow funds (214,977) Extraordinary charge on extinguishment of debt 117,619 Net gain on sale of real estate (1,242,614) (614,234) Net change in operating assets and liabilities (849,161) (203,491) (631,808) ----------- ------------ ------------ Net cash provided by operating activities 6,241,041 6,292,833 4,688,070 ----------- ------------ ------------ Cash flows from investing activities: Issuance of note receivable (188,910) Additional capitalized costs (622,637) (407,538) (1,078,951) Proceeds on sale and transfer of real estate 17,009,000 3,387,362 Purchase of limited partnership interests (1,750,175) ----------- ------------ ------------ Net cash (used in) provided by investing activities (622,637) 16,412,552 558,236 ----------- ------------ ------------ Cash flows from financing activities: Distributions to partners (5,828,596) (5,862,314) (8,054,982) Prepayments of mortgage payable (2,964,228) (10,413,985) (2,200,000) Proceeds from new mortgages 3,500,000 Payments on mortgage principal (825,740) (725,239) (463,487) Partial prepayment of note payable to affiliate (144,000) Deferred financing costs (162,977) (1,247) (10,000) Funds released from escrow accounts 214,977 Payment made on extinguishment of debt (70,000) ----------- ------------ ------------ Net cash used in financing activities (6,066,564) (17,072,785) (10,872,469) ----------- ------------ ------------ Net (decrease) increase in cash and cash equivalents (448,160) 5,632,600 (5,626,163) Cash and cash equivalents, beginning of year 2,742,405 2,294,245 7,926,845 ----------- ------------ ------------ Cash and cash equivalents, end of year $ 2,294,245 $ 7,926,845 $ 2,300,682 =========== ============ ============
Supplemental Schedule of noncash investing and financing activity: In connection with the sale of a property in 1995, the purchaser assumed a mortgage loan principal obligation of $720,401 and accrued interest thereon of $5,780. The accompanying notes are an integral part of the financial statements. -10- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) NOTES to FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies: ------------------------------------------ Use of Estimates: ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Real Estate Leased to Others: ---------------------------- Real estate is leased to others on a net lease basis, whereby the tenant is generally responsible for all operating expenses relating to the property, including property taxes, insurance, maintenance, repairs, renewals and improvements. The Partnership diversifies its real estate investments among various corporate tenants engaged in different industries and by property type throughout the United States. The leases are accounted for under either the direct financing or operating methods. Such methods are described below: Direct financing method - Leases accounted for under the direct ----------------------- financing method are recorded at their net investment (Note 5). Unearned income is deferred and amortized to income over the lease terms so as to produce a constant periodic rate of return on the Partnership's net investment in the lease. Operating method - Under this method, real estate is recorded at ---------------- cost, revenue is recognized as rentals are earned and expenses (including depreciation) are charged to operations as incurred. When scheduled rents vary during the lease term, income is recognized on a straight-line basis so as to produce a constant periodic rent. Substantially all of the Partnership's leases provide for either scheduled rent increases, periodic rent increases based on formulas indexed to increases in the Consumer Price Index or sales overrides. Operating Real Estate: --------------------- Land, buildings and personal property are carried at cost. Major renewals and improvements are capitalized to the property accounts, while replacements, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed currently. Long-Lived Assets: ----------------- Effective January 1, 1995, the Partnership adopted the provisions of Statement of Financial Accounting Standards No. 121 -Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of ("SFAS 121"). Pursuant to SFAS 121, the Partnership assesses the recoverability of its real estate assets, including residual interests, based on projections of cash flows over the life of such assets. In the event that such cash flows are insufficient, the assets are adjusted to their estimated net realizable value. The adoption of SFAS 121 did not have a material effect of the Partnership's financial condition or results of operations. Real Estate Held for Sale: ------------------------- Real estate held for sale is accounted for at the lower of cost or fair value less cost of sale. Continued -11- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) NOTES to FINANCIAL STATEMENTS, Continued Depreciation: ------------ Depreciation is being computed using the straight-line method over the estimated useful lives of components of the particular properties, which range from 5 to 30 years. Cash Equivalents: ---------------- Corporate Property Associates 5 (the "Partnership") considers all short- term, highly liquid investments that are both readily convertible to cash and have a maturity of generally three months or less at the time of purchase to be cash equivalents. Items classified as cash equivalents include commercial paper and money market funds. Substantially all of the Partnership's cash and cash equivalents at December 31, 1994 and 1995 were held in the custody of three financial institutions. Investment in Limited Partnership --------------------------------- The Partnership's 17.5% investment in an unaffiliated limited partnership is accounted for under the cost method, i.e., income is recorded based on distributions received from the net accumulated earnings of the limited investee. Other Assets and Liabilities: ---------------------------- Included in other assets are costs incurred in connection with mortgage note financings and refinancings which are amortized on a straight- line basis over the terms of the mortgages. Included in other liabilities is deferred rental income which is the aggregate difference for operating method leases between scheduled rents which vary during the lease term and rent recognized on a straight-line basis. Deferred Gains: -------------- Deferred gains consist of assets acquired in excess of liabilities assumed in connection with acquiring the operations of a hotel property in Rapid City, South Dakota and certain funds received in connection with the two loan refinancings. The deferred gains are being amortized on a straight-line basis over 20 and 24 years, respectively. Income Taxes: ------------ A partnership is not liable for income taxes as each partner recognizes his proportionate share of the partnership income or loss in his tax return. Accordingly, no provision for income taxes is recognized for financial statement purposes. 2. Partnership Agreement: --------------------- The Partnership was organized on April 12, 1983 under the Uniform Limited Partnership Act of the State of California for the purpose of engaging in the business of investing in and leasing industrial and commercial real estate. The Corporate General Partner purchased 200 Limited Partnership Units in connection with the Partnership's public offering. All the Units were sold prior to December 21, 1983, at which time the offering terminated. The Partnership will terminate on December 31, 2005, or sooner, in accordance with the terms of the Amended Agreement of Limited Partnership (the "Agreement"). Continued -12- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) NOTES to FINANCIAL STATEMENTS, Continued The Agreement provides that the General Partners are allocated 6% (1% to the Individual General Partner, William P. Carey, and 5% to the Corporate General Partner, Carey Corporate Property, Inc.) and the Limited Partners are allocated 94% of the profits and losses as well as distributions of Distributable Cash From Operations, as defined. The General Partners may be entitled to receive incentive fees during the liquidation stage of the Partnership. A division of W. P. Carey, & Co., Inc. ("W.P. Carey"), an affiliate, is engaged in the real estate brokerage business. The Partnership may sell properties through the division and pay subordinated real estate commissions as provided in the Agreement. The division could ultimately earn a real estate commission of up to approximately $782,000 due to the disposition of certain properties between 1987 and 1995, which amount will be retained by the Partnership unless the subordination provisions of the Agreement are satisfied. In accordance with the Agreement, the General Partners were allocated a portion of the 1994 and 1995 gains on sale of property as well as the related tax gain in order to reduce their negative balances. The Partnership paid a special distribution of proceeds from a property sale (see Note 7) which distribution was allocated 1% to the Individual General Partner and 99% to the Limited Partners in accordance with the Agreement. 3. Transactions with Related Parties: --------------------------------- The Partnership holds a 65% interest as tenants-in-common in hotel properties in Alpena and Petoskey, Michigan with Corporate Property Associates 6 ("CPA(R):6"), an affiliate which owns the remaining 35% interest. The Partnership accounts for its interest in the Alpena and Petoskey properties on a proportional basis. Under the Agreement, W.P. Carey and other affiliates are also entitled to receive a property management fee and reimbursement of certain expenses incurred in connection with the Partnership's operations. General and administrative expense reimbursements consist primarily of the actual cost of personnel needed in providing administrative services necessary to the operation of the Partnership. Property management fee and general and administrative expense reimbursements are summarized as follows:
1993 1994 1995 -------- -------- -------- Property management fee $155,872 $156,947 $116,825 General and administrative expense reimbursements 129,536 178,840 117,584 -------- -------- -------- $285,408 $335,787 $234,409 ======== ======== ========
During 1993, 1994 and 1995, fees aggregating $214,331, $339,112 and $180,242 respectively, were incurred for legal services performed by a firm in which the Secretary of the Corporate General Partner and other affiliates is a partner. The mortgage loans on the Alpena and Petoskey properties consist of tax- exempt bond obligations of $7,500,000 for each property of which the Partnership's share of each is $4,875,000. The bonds are also collateralized by mortgage and/or lease assignments on eight other Partnership properties. In the event of default, the bondholders have recourse to the Partnership's collateral to the full extent of the outstanding balance of the bonds including the portion of the obligation applicable to CPA(R)6. In connection with restructuring the bond obligation in 1992, the Partnership received cash and other consideration from CPA(R)6. Continued -13- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) NOTES to FINANCIAL STATEMENTS, Continued The Partnership is a participant in an agreement with W.P. Carey and other affiliates for the purpose of leasing office space used for the administration of real estate entities and W.P. Carey and for sharing the associated costs. Pursuant to the terms of the agreement, the Partnership's share of rental, occupancy and leasehold improvement costs is based on adjusted gross revenues, as defined. Net expenses incurred in 1993, 1994 and 1995 were $67,282, $76,426 and $182,843, respectively. The increase in 1995 expenses was due, in part, to certain nonrecurring items related to the relocation of the Partnership's offices. 4. Real Estate Leased to Others Accounted for Under the Operating Method --------------------------------------------------------------------- and Operating Real Estate: ------------------------- A. Real Estate Leased to Others: ---------------------------- The scheduled minimum future rentals, exclusive of renewals, under noncancellable operating leases amount to approximately $4,420,000 in 1996, $4,380,000 in 1997, $4,314,000 in 1998, $3,879,000 in 1999, $1,130,000 in 2000 and aggregate approximately $22,271,000 through 2010. Contingent rentals were approximately $84,000, $106,000 and $5,000 in 1993, 1994 and 1995, respectively. B. Operating Real Estate: --------------------- Operating real estate, at cost, is summarized as follows:
December 31, ------------------------ 1994 1995 ----------- ----------- Land $ 1,422,050 $ 479,050 Buildings 17,827,250 9,603,750 Personal property 2,518,849 1,918,227 ----------- ----------- 21,768,149 12,001,027 Less: Accumulated depreciation 7,393,500 4,265,218 ----------- ----------- $14,374,649 $ 7,735,809 =========== ===========
In 1995, the assets of a property were reclassified as real estate held for sale (see Note 13). 5. Net Investment in Direct Financing Leases: ----------------------------------------- Net investment in direct financing leases is summarized as follows:
December 31, ---------------------------- 1994 1995 ------------ ------------ Minimum lease payments receivable $48,603,210 $34,887,327 Unguaranteed residual value 24,019,552 17,495,677 ----------- ----------- 72,622,762 52,383,004 Less: Unearned income 46,696,918 33,030,066 ----------- ----------- $25,925,844 $19,352,938 =========== ===========
The scheduled minimum future rentals, exclusive of renewals, under noncancellable financing leases amount to approximately $2,656,000 in 1996, $2,654,000 in each of the years from 1997 to 2000 and aggregate approximately $34,887,000 through 2012. Contingent rentals were approximately $1,078,000, $995,000 and $758,000 in 1993, 1994 and 1995, respectively. Continued -14- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) NOTES to FINANCIAL STATEMENTS, Continued 6. Mortgage Notes Payable and Note Payable to Affiliate: ---------------------------------------------------- A. Mortgage Notes Payable ----------------------- The Partnership's mortgage notes payable are limited recourse obligations and are collateralized by lease assignments and by real property with a carrying amount of approximately $64,560,000, before accumulated depreciation. As of December 31, 1995, mortgage notes payable bear interest at rates varying from 4.95% to 11.875% per annum and mature from 1996 to 2015. Scheduled principal payments during each of the next five years following December 31, 1995 and thereafter, including a mortgage loan subject to acceleration, are as follows:
Year Ending December 31, ------------------------ 1996 $12,710,708 1997 8,268,550 1998 3,273,321 1999 299,160 2000 321,021 Thereafter 11,192,385 ----------- Total $36,065,145 ===========
B. Note Payable to Affiliate: ------------------------- A note payable to CPA(R):6 of $1,151,000 provides for payments of interest only at a rate of 13.48% per annum through August 1, 1999, at which time the interest rate will reset to the Applicable Federal Rate (as defined in the Internal Revenue Code of 1986). The note, which is a recourse obligation of the Partnership, matures on May 1, 2012, at which time a balloon payment for any unpaid principal is due. The note may be prepaid in part or whole at any time. Interest paid was $5,031,606, $4,642,849 and $3,554,413 in 1993, 1994 and 1995, respectively. 7. Distributions to Partners: -------------------------- Distributions declared and paid to partners are summarized as follows:
Limited Year Ending Distributions Paid to Distributions Paid to Partners' Per December 31, General Partners Limited Partners Unit Amount - ------------------------ --------------------- --------------------- ------------- 1993 $349,716 $5,478,880 $48.40 ======== ========== ====== 1994 $351,738 $5,510,576 $48.68 ======== ========== ====== 1995: Quarterly distributions $345,833 $5,422,280 $47.90 Special distribution 22,869 2,264,000 20.00 -------- ---------- ------ Total 1995 $368,702 $7,686,280 $67.90 ======== ========== ======
Distributions of $84,900 to the General Partners and $1,330,100 to the Limited Partners for the quarter ended December 31, 1995 were declared and paid in January 1996. 8. Income for Federal Tax Purposes: ------------------------------- Income for financial statement purposes differs from income for Federal income tax purposes because of the difference in the treatment of certain items for income tax purposes and financial statement purposes. A reconciliation of accounting differences is as follows: Continued -15- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) NOTES to FINANCIAL STATEMENTS, Continued
1993 1994 1995 ------------ ------------ ------------ Net income per Statements of Income $ 4,496,212 $ 5,439,186 $ 1,912,698 Excess tax depreciation (3,032,191) (2,979,063) (2,399,357) Writedowns of assets 323,611 1,980,550 Difference in gains or losses on dispositions of property 8,776,856 (157,203) Other 251,656 (351,394) 284,878 ----------- ----------- ----------- Income reported for Federal income tax purposes $ 2,039,288 $10,885,585 $ 1,621,566 =========== =========== ===========
9. Industry Segment Information: ---------------------------- The Partnership's operations consist primarily of the investment in and the leasing of industrial and commercial real estate and the operations of three hotel properties. In 1993, 1994 and 1995, the Partnership earned its total leasing revenues (rental income plus interest income from financing leases) from the following lease obligors:
1993 % 1994 % 1995 % ----------- ---- ----------- ---- ---------- ---- GATX Logistics, Inc. $ 181,475 2% $ 1,834,350 16% $1,398,600 16% Gould, Inc. 1,125,000 10 1,125,000 10 1,132,500 13 Spreckels Industries, Inc. 1,161,170 10 880,264 8 1,020,717 12 DeVlieg Bullard, Inc. 830,984 7 830,984 7 830,984 10 Industrial General Corporation 1,385,643 12 1,385,643 12 637,321 8 Arley Merchandise Corporation 600,000 5 600,000 5 600,000 7 Penn Virginia Corporation 498,750 4 498,750 5 498,750 6 Exide Electronics Corporation 485,726 4 485,726 4 528,926 6 Stoody Deloro Stellite, Inc. 369,669 3 380,325 3 404,719 5 IBM Corporation 318,097 3 318,097 3 318,097 4 Harcourt General Corporation 233,750 2 233,750 2 233,750 3 Other 104,907 1 146,342 1 212,383 2 Rochester Button Company 179,515 1 204,743 2 199,968 2 Winn Dixie Stores, Inc. 191,534 2 191,534 2 191,534 2 Penberthy Products, Inc. 182,529 2 182,529 2 182,529 2 FMP/Rauma Company 124,430 1 124,430 1 131,033 2 Pace Membership Warehouse, Inc. 722,061 6 601,718 5 Liberty Fabrics of New York 1,200,954 10 1,388,076 12 General Motors Corporation 1,740,025 15 ----------- --- ----------- --- ---------- --- $11,636,219 100% $11,412,261 100% $8,521,811 100% =========== === =========== === ========== ===
-16- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) NOTES to FINANCIAL STATEMENTS, Continued The Partnership's share of the operating results for the three hotel properties are as follows:
1993 1994 1995 ------------ ------------ ------------ Revenues $ 6,534,164 $ 6,595,570 $ 6,768,268 Management fees (148,220) (131,911) (143,498) Other operating expenses (4,724,878) (4,827,788) (5,097,872) ----------- ----------- ----------- Partnership share of hotel operating income $ 1,661,066 $ 1,635,871 $ 1,526,898 =========== =========== ===========
10. Rochester Button Company: ------------------------ In June 1992, the Partnership and Rochester Button Company ("RBC") entered into restructuring and lease modification agreements for properties leased by RBC in South Boston and Kenbridge, Virginia. Under the restructuring agreement, the Partnership agreed to exchange a $300,000 subordinated promissory note made by RBC and approximately $66,000 of deferred interest thereon for 300 shares of preferred stock ($1,000 par value, 5%). Under the lease modification, annual rentals under the lease were increased from $200,000 to $249,000 and the Partnership agreed to forego collection of $275,000 of deferred rents for the period from the inception of the lease through June 30, 1992. Based on the Partnership's participation in the support of RBC operations subsequent to the restructuring and lease modification agreements and RBC's financial condition, Management reevaluated the fair value of its aforementioned preferred stock investment and the estimated residual value of the RBC properties. Accordingly, the Partnership charged $266,000 as a writedown to the estimated net realizable value of the preferred stock investment and approximately $58,000 as a writedown of the estimated residual value of the RBC properties at December 31, 1993. In January 1994, the Partnership agreed to lend $250,000 to RBC at an annual interest rate of 9% evidenced by a subordinated promissory note. The note requires monthly interest only payments with monthly payments of principal commencing on November 30,1995 and continuing through October 31, 1998. In 1995, the Partnership incurred a charge of $288,910 in writing off the note receivable and preferred stock as a result of RBC experiencing financial difficulties and its inability to pay dividends and debt service installments in a timely manner. In addition, the Partnership has incurred a charge on uncollected rents of $165,164 at December 31, 1995. Continued -17- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) NOTES to FINANCIAL STATEMENTS, Continued 11. Funds in Escrow: --------------- Funds in escrow at December 31, 1994 and 1995, consist of reserves and escrow funds for the hotel properties and related mortgage debt.
December 31, ---------------------- 1994 1995 ---------- ---------- Security reserve on Rapid City property $1,650,000 $1,895,000 Debt service escrow account on Alpena and Petoskey properties 412,100 412,100 Hotel furniture, fixture and equipment reserves 203,079 270,522 Special escrow accounts on Rapid City hotel property 400,000 400,000 ---------- ---------- $2,665,179 $2,977,622 ========== ==========
12. Gains and Losses on the Sale of Real Estate: ------------------------------------------- A. Pace Membership Warehouse, Inc.: ------------------------------- On November 10, 1994, Pace Membership Warehouse, Inc. ("Pace"), a former subsidiary of Kmart corporation ("Kmart"), purchased a property in Tampa, Florida owned by the Partnership and a property owned by Corporate Property Associates 10 Incorporated ("CPA(R) 10"), an affiliate, in Des Moines, Iowa for an aggregate purchase price of $14,150,000. In connection with Kmart's sale of Pace's business operations in 1994, the acquirer did not assume the operations at the Pace properties. Based on the provisions in the Pace leases, the Partnership and CPA(R):10 were able to negotiate the sale of the properties. Pursuant to a fairness opinion performed by an independent investment banking firm, $7,000,000 of the purchase price was allocated to the Partnership. A portion of the Partnership's proceeds from the sale were used to satisfy the remaining $3,290,437 mortgage balance on the Tampa property. In connection with the sale, the Partnership recognized a gain of $2,129,868. As a result of the prepayment of the loan, the Partnership incurred a $70,000 prepayment premium and wrote off the remaining $31,977 of unamortized financing costs on the loan, resulting in an extraordinary charge on the extinguishment of debt of $101,977. B. Industrial General Corp.: ------------------------ In August 1985, the Partnership purchased from and net leased to Industrial General Corporation ("IGC") and certain of its wholly-owned subsidiaries, seven properties located in Elyria and Bellville, Ohio, Forrest City and Bald Knob, Arkansas, Carthage, New York and Newburyport, Massachusetts for $9,100,000. Subsequent to the purchase, the Partnership agreed to exchange the Saginaw property for an expansion of the Newburyport facility, severed the Carthage property from the lease and entered into a lease with FMP/Rauma Company ("FMP") and sold the Forrest City property. On December 30, 1994, the Partnership sold the Forrest City property for $650,000 and recognized a loss of $887,000. Continued -18- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) NOTES to FINANCIAL STATEMENTS, Continued On July 28, 1995, IGC filed a voluntary petition of bankruptcy under Chapter 11 of the United States Bankruptcy Code. In connection with an asset acquisition of the plastics division of IGC, on September 14, 1995, the Partnership entered into a series of transactions which resulted in the termination of the IGC lease, the sale of the Bald Knob, Bellville and Newburyport properties and the full satisfaction of the mortgage loan obligation collateralized by all of the IGC properties and the FMP property which had been scheduled to mature on September 1, 1995. In connection with the sale of the Bald Knob property to IGC, the Partnership received cash of $987,362 and IGC, with the consent of the mortgage lender, assumed a mortgage obligation of $720,401 and accrued interest of $5,780. Additionally, the Partnership is scheduled to receive an additional $200,000 from IGC over an eight-month period. The Bellville and Newburyport properties were sold for $2,400,000 in cash to G.I. Plastek Industrial Properties Limited Partnership ("Plastek Properties"), an affiliate of G.I. Plastek Limited Partnership ("Plastek") which acquired the assets of the IGC plastics division. The Partnership used $2,200,000 of the proceeds to pay off the remaining balance on the matured mortgage loan obligation on the IGC and FMP properties. In connection with the sale of the three properties, the Partnership realized a loss of $1,719,828. The Partnership also purchased limited partnership interests in Plastek. The Partnership made capital contributions of $175 and $1,750,000 for Class A and Class B limited partnership interests, respectively. The Class A interest provides for a 17.5% participation in the profits and losses of Plastek after payment of preferred returns to Class B interests. Class B interests are entitled to a cumulative preferred return of 10% on their contributions; however, it does not participate in nor receive other allocations of any gains or losses of Plastek. The Class B interest is redeemable on September 8, 2000. The Partnership retains ownership of the Elyria property, which is vacant and not subject to lease. Although the Partnership is attempting to sell the property, it has initiated a plan to mothball the property. Plastek has agreed to contribute up to $100,000 toward mothballing the Elyria property and has committed to pay real estate taxes and insurance for up to three years. Based on the appraised value of the property and the costs that would need to be incurred to prepare the property for sale or lease, the Partnership has written off the value of the property and recognized a charge of $691,640. C. Liberty Fabrics of New York: --------------------------- In January 1984, the Partnership purchased properties in Gordonsville, Virginia and in North Bergen, New Jersey for $7,000,000 and entered into a net lease with Liberty Fabrics of New York ("Liberty"). In December 1993, Liberty notified the Partnership of its intention to exercise its purchase option on the properties. Pursuant to the lease, the purchase price would be the greater of $7,000,000 or fair market value as encumbered by the lease. On October 18, 1994, Liberty filed suit to compel the Partnership to transfer title of the properties to Liberty for $9,359,000, the fair market value which had been determined pursuant to the purchase option appraisal process. Because the Partnership believed fair market value of the properties exceeded $9,359,000, Management challenged the Liberty suit to seek a higher purchase price. Continued -19- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) NOTES to FINANCIAL STATEMENTS, Continued On December 29, 1994, the Partnership and Liberty terminated the lease and agreed that the properties would be transferred to Liberty for $9,359,000, subject to a final determination of the fair value of the property. If the fair market value was determined to be greater than $9,359,000, Liberty would have the right within 30 days of the determination to rescind the transfer, in which case all proceeds would be returned to Liberty, title of the properties transferred back to the Partnership and Liberty would pay all rents in arrears for the period from the initial transfer of title to Liberty. In January 1996, the Court ruled in favor of Liberty. As a result of this ruling, Liberty no longer has the right to rescind the transaction. Accordingly, the Partnership has recognized a gain in 1995 on the sale of the properties of $2,334,062. 13. Hotel Property in Rapid City, South Dakota: ------------------------------------------ The Partnership owns a hotel property in Rapid City, South Dakota which it currently operates as a Holiday Inn. In September 1994, the Partnership was advised by Holiday Inn that the Partnership would have to make significant capital improvements to the hotel by January 1997 pursuant to Holiday Inn's core modernization plan or surrender its license to operate as a Holiday Inn by that time. The estimated costs of complying with the core modernization plan were estimated by the Partnership to be $1,925,000. The Partnership concluded that it will be too costly to comply with the plan and is currently planning to seek an affiliation with another national hotel chain. In order to obtain such affiliation, the Partnership estimates that the hotel will need approximately $500,000 in capital improvements. As it is expected that the average room rate will be lower as the result of any change in affiliation, the Partnership's cash flow from the Rapid City property is expected to decrease. Accordingly, the Partnership has reevaluated the net realizable value of the property and has recognized a noncash charge of $1,000,000 on the writedown. The hotel was purchased in 1985 with $6,800,000 of tax-exempt bonds which are supported by a letter of credit issued by a third party. The letter of credit which originally expired in May 1995 has been extended through October 1997. In connection with an extension agreement executed on November 30, 1995, the Partnership has agreed to use its best efforts to sell the hotel property by October 1997. Under the extension agreement, the Partnership is obligated for each twelve month period ended October 31, to deposit 50% of the cash flow from the hotel operation in either the security reserve or special escrow account (see Note 11) with the initial twelve month period commencing on October 1, 1995. The Partnership is committed to seek a sales price of no less than the outstanding principal balance less (i) the balances in the security reserve and escrow balances, (ii) the usual and customary costs of selling the property, (iii) and any amounts advanced by the Partnership to operate and maintain the hotel business including amounts used to convert the hotel from a Holiday Inn to the franchisee of another hotel chain. As of December 31, 1995 the outstanding principal balance on the mortgage bonds of $6,800,000 was in excess of the combined balance of the security Continued -20- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) NOTES to FINANCIAL STATEMENTS, Continued reserve and escrow funds by $4,505,000. The amounts the Partnership will ultimately realize on the sale of the property could differ materially from the amounts assumed in arriving at the Partnership's estimate of net realizable value of the property. The property has been reclassified as real estate held for sale in the accompanying Financial Statements. 14. Environmental Matters: --------------------- All of the Partnership's properties, other than the hotel properties and a property in Elyria, Ohio, are currently leased to corporate tenants, all of which are subject to environmental statutes and regulations regarding the discharge of hazardous materials and related remediation obligations. The Partnership generally structures a lease to require the tenant to comply with all laws. In addition, substantially all of the Partnership's net leases include provisions which require tenants to indemnify the Partnership from all liabilities and losses related to their operations at the leased properties. The costs for remediation, which are expected to be performed and paid by the affected tenant, are not expected to be material. In the event that the Partnership absorbs a portion of any costs because of a tenant's failure to fulfill its obligations, the General Partners believe such expenditures will not have a material adverse effect on the Partnership's financial condition, liquidity or results of operations. In 1994, based on the results of Phase I environmental reviews performed in 1993, the Partnership voluntarily conducted Phase II environmental reviews on certain of its properties. The Partnership believes, based on the results of Phase I and Phase II reviews, that its leased properties are in substantial compliance with Federal and state environmental statutes and regulations. Portions of certain properties have been documented as having a limited degree of contamination, principally in connection with surface spills from facility activities and leakage from underground storage tanks. For those conditions which were identified, the Partnership has advised the affected tenants of the Phase II findings and of their obligations to perform required remediation. 15. Subsequent Event: ---------------- In May 1985, the Partnership purchased an office building in Helena, Montana for $6,262,983 of which $2,937,500 was supplied by limited recourse mortgage financing. The Partnership was assigned an existing net lease with International Business Machines Corporation ("IBM") as tenant. In 1992, the Partnership modified the lease and the loan with IBM. IBM subsequently vacated 40% of the building which the Partnership subsequently leased to various other tenants. On January 19, 1996, the Partnership sold the property for $4,800,000 including the purchaser's assumption of the existing mortgage loan on the property. In connection with the sale, the $4,780,274 carrying cost of the property has been reclassed to real estate held for sale. 16. Disclosure on Fair Value of Financial Instruments: -------------------------------------------------- The carrying amounts of cash, receivables and accounts payable and accrued expenses approximate fair value because of the short maturity of these items. The Partnership estimates that the fair value of mortgage notes payable approximates the carrying amount of such mortgage notes at December 31, 1995. The fair value of debt instruments was evaluated using a discounted cash flow model with discount rates which take into account the credit of the tenants and interest rate risk. The carrying amount of the Partnership's limited partnership investment in Plastek, which interest was purchased in September 1995 and which is accounted for under the cost method, approximates fair value. -21- PAGE> CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION as of December 31, 1995
Initial Cost to Partnership Costs --------------------------------------- Capitalized Decrease Personal Subsequent to in Net Description Encumbrances Land Buildings Property Acquisition(a) Investment(b) - --------------------------- ------------ ----------- ----------- ----------- ------------- ------------- Operating method: Manufacturing facilities leased to Arley Merchandise Corporation $ 4,754,940 $ 256,000 $ 7,544,000 $ 8,555 Manufacturing and office leased to Penn Virginia Corporation 453,192 3,246,808 3,112 Warehouse and distribution facility leased to GATX Logistics, Inc. 3,248,716 762,000 11,275,466 242,912 Land leased to Exide Electronics Corporation 163,634 1,170,000 Motion picture theater leased to Harcourt General Corporation 243,000 1,927,000 25,424 Office and research facility leased to Gould, Inc. 6,128,446 1,422,000 8,418,500 34,587 Retail store leased to Winn Dixie Stores, Inc. 414,700 1,525,872 21,425 Office/Manufacturing facility in Elyria, Ohio 122,884 568,756 $ (691,640) ----------- ---------- ----------- ----------- ----------- $14,295,736 $4,843,776 $34,506,402 $ 336,015 $ (691,640) =========== ========== =========== =========== =========== Operating real estate (e): Hotel properties located in Alpena, Michigan $ 4,875,000 $ 136,500 $ 4,905,875 $ 482,625 $ 557,811 Petoskey, Michigan 4,875,000 342,550 4,684,875 497,575 393,216 ----------- ----------- ----------- ----------- ----------- $ 9,750,000 $ 479,050 $ 9,590,750 $ 980,200 $ 951,027 =========== =========== =========== =========== =========== Real estate held for sale: Hotel property located in Rapid City, South Dakota $ 6,800,000 $ 943,000 $ 8,223,500 $ 733,500 $ 542,947 $(1,000,000) Office building in Helena, Montana 2,856,413 300,000 5,962,983 687,425 ----------- ----------- ----------- ----------- ----------- ----------- $ 9,656,413 $ 1,243,000 $14,186,483 $ 733,500 $ 1,230,372 $(1,000,000) =========== =========== =========== =========== =========== ===========
Gross Amount at which Carried Life on which at Close of Period (c)(d) Depreciation in ---------------------------------- Latest Statement Personal Accumulated of Operations Description Land Buildings Property Total Depreciation(d) Date Acquired is Computed - --------------------------- ---- -------- -------- --------- ---------------- ---------------- ---------------- Operating method: Manufacturing facilities leased to Arley Merchandise Corporation $ 256,000 $ 7,552,555 $ 7,808,555 $ 2,139,841 July 13, 1984 30 yrs. Manufacturing and office leased to Penn Virginia Corporation 453,192 3,249,920 3,703,112 2,296,411 August 7, 1984 5-30 yrs. Warehouse and distribution facility leased to GATX Logistics, Inc. 762,000 11,518,378 12,280,378 4,004,685 June 7, 1985 30 yrs. Land leased to Exide Electronics Corporation 1,170,000 1,170,000 N/A June 20, 1985 30 yrs. Motion picture theater leased to Harcourt General Corporation 243,000 1,952,424 2,195,424 680,634 July 17, 1985 30 yrs. Office and research facility leased to Gould, Inc. 1,423,875 8,451,212 9,875,087 2,843,991 November 25, 1985 30 yrs. Retail store leased to Winn Dixie Stores, Inc. 414,700 1,547,297 1,961,997 406,165 March 17, 1988 30 yrs. Office/Manufacturing facility in Elyria, Ohio August 30, 1995 N/A ---------- ----------- ----------- ----------- $4,722,767 $34,271,786 $38,994,553 $12,371,727 ========== =========== =========== =========== Operating real estate (e): Hotel properties located in Alpena, Michigan $ 136,500 $ 4,912,375 $1,033,936 $ 6,082,811 $ 2,150,430 March 6, 1987 7-30 yrs. Petoskey, Michigan 342,550 $ 4,691,375 884,291 5,918,216 2,114,788 January 30, 1987 7-30 yrs. ---------- ----------- ---------- ----------- ----------- $ 479,050 $ 9,603,750 $1,918,227 $12,001,027 $ 4,265,218 ========== =========== ========== =========== =========== Real estate held for sale: Hotel property located in Rapid City, South Dakota $ 943,000 $ 7,223,500 $1,276,447 $ 9,442,947 $ 3,834,823 April 24, 1985 30 yrs. Office building in Helena, Montana 300,000 6,650,408 6,950,408 2,170,134 May 1, 1985 30 yrs. ---------- ----------- ---------- ----------- ----------- $1,243,000 $13,873,908 $1,276,447 $16,393,355 $ 6,004,957 ========== =========== ========== =========== ===========
See accompanying notes to Schedule. -22- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION as of December 31, 1995
Gross Amount Initial Cost to Cost at which Partnership Capitalized Decrease in Carried --------------- Subsequent to Net at Close of Date Description Encumbrances Land Buildings Acquisition (a) Investment (b) Period (c) Acquired - --------------------------- ------------ ---------- --------------- --------------- -------------- ------------- ----------- Direct financing method: Manufacturing facility to Spreckels December 30, Industries, Inc. $ 444,730 $ 5,055,270 $5,500,000 1983 Manufacturing facility leased to Rochester April 11, Button Company, Inc. 86,663 2,815,596 $ 4,429 $(949,427) 1,957,261 1984 Office and research facility leased to Exide Electronics June 20, Corporation $1,228,996 2,030,000 1,500 2,031,500 1985 Manufacturing facilities leased to April 3, DeVlieg Bullard, Inc. 310,032 4,782,667 5,092,699 1986 Manufacturing facilities leased to Penberthy Products, April 3, Inc. 48,968 1,028,333 1,077,301 1986 Manufacturing facilities leased December 22, to Stoody Company 1,134,000 200,000 2,800,000 3,000,000 1986 Manufacturing facilities leased August 30, to FMP/Rauma, Co. 24,750 669,427 694,177 1985 ---------- ---------- ----------- ---------- --------- ----------- $2,362,996 $1,115,143 $19,181,293 $ 5,929 $(949,427) $19,352,938 ========== ========== =========== ========== ========= ===========
See accompanying notes to Schedule. -23- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) NOTES TO SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION (a) Consists of additional costs capitalized and acquisition costs, including legal fees, appraisal fees, title costs and other related professional fees, property acquired in connection with acquiring hotel assets and purchases of equipment for hotel operations. (b) The decrease in net investment is due to the amortization of unearned income producing constant periodic rate on the net investment in direct financing leases, which is less than lease payments received and the writedown of properties to net realizable value. (c) At December 31, 1995, the aggregate cost of real estate owned for Federal income tax purposes is $88,310,178. (d)
Reconciliation of Real Estate Accounted --------------------------------------- for Under the Operating Method ------------------------------ December 31, -------------------------- 1994 1995 ------------ ------------ Balance at beginning of period $51,192,770 $45,541,835 Additions during period 182,565 403,126 Sale of property (5,833,500) Reclassification to real estate held for sale (6,950,408) ----------- ----------- Balance at close of period $45,541,835 $38,994,553 =========== ===========
Reconciliation of Accumulated Depreciation ------------------------------------------ December 31, -------------------------- 1994 1995 ------------ ------------ Balance at beginning of period $12,661,291 $13,182,621 Depreciation expense for the period 1,484,698 1,359,240 Sale of property (963,368) Reclassification to real estate held for sale (2,170,134) ----------- ----------- Balance at close of period $13,182,621 $12,371,727 =========== ===========
-24- CORPORATE PROPERTY ASSOCIATES 5 (a California limited partnership) NOTES TO SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION- Continued (e) Reconciliation of Operating Real Estate ---------------------------------------
December 31, ------------------------- 1994 1995 ------------ ----------- Balance at beginning of period $21,543,176 $21,768,149 Disposals during period (1,239) Additions during period 226,212 675,825 Reclassification to real estate held for sale (9,442,947) Writedown to net realizable value (1,000,000) ----------- ----------- Balance at close of period $21,768,149 $12,001,027 =========== ===========
Reconciliation of Accumulated Depreciation for ----------------------------------------------- Operating Real Estate --------------------- December 31, ---------- 1994 1995 ---------- ----------- Balance at beginning of period $6,696,776 $ 7,393,500 Reclassification to real estate held for sale (3,834,823) Depreciation expense for the period 696,724 706,541 ---------- ----------- Balance at close of period $7,393,500 $ 4,265,218 ========== ===========
-25- PROPERTIES - --------------------------------------------------------------------------------
LEASE TYPE OF OWNERSHIP OBLIGOR TYPE OF PROPERTY LOCATION INTEREST - ------------------------ -------------------- --------------- ------------------ SPRECKELS INDUSTRIES Manufacturing and Forrest City, Ownership of land INC. Office Facility Arkansas and building ARLEY MERCHANDISE Manufacturing Columbia and Ownership of land CORPORATION Facilities - Sumter, South and buildings (1) 2 locations Carolina ROCHESTER BUTTON Manufacturing Kenbridge, Ownership of land COMPANY Facilities - South Boston, and buildings (2) 2 locations Virginia PENN VIRGINIA Office and Duffield, Ownership of land CORPORATION Manufacturing Virginia and building (3) Facilities - Cuyahoga Falls, 3 locations Ohio and Broomall, Pennsylvania (4) Hotel Rapid City, Ownership of land South Dakota and buildings (1) (4) Hotels Petoskey and Ownership of 65% Alpena, interest in land Michigan and buildings (1) GATX LOGISTICS, Office and Warehouse Hodgkins, Ownership of land INC. Facility Illinois and building (1) EXIDE ELECTRONICS Office and Raleigh, Ownership of land CORPORATION Research Facility North Carolina and building (1) HARCOURT GENERAL Movie Theatre Canton, Ownership of land CORPORATION Michigan and building (3) (5) Office, and Elyria, Ownership of land Manufacturing Ohio and building Facility
-26-
LEASE TYPE OF OWNERSHIP OBLIGOR TYPE OF PROPERTY LOCATION INTEREST - -------------------- ----------------- ---------- ------------------ GOULD, INC. Manufacturing and Oxnard, Ownership of land Research Facility California and building (1) DEVLIEG BULLARD, INC. Manufacturing Frankenmuth, Ownership of land Facilities - Michigan and buildings (3) 2 locations McMinnville, Tennessee PENBERTHY Manufacturing Prophestown, Ownership of land PRODUCTS, INC. Facility Illinois and building (3) STOODY DELORO Manufacturing Goshen, Ownership of land STELLITE, INC. Facility Indiana and building (1) WINN-DIXIE Supermarket Montgomery, Ownership of land STORES, INC. Alabama and buildings (3) FMP/RAUMA, CO. Manufacturing Carthage, Ownership of land Facility New York and buildings
(1) These properties are encumbered by mortgage notes payable. (2) These properties are subject to a mortgage as collateral for loans issued by unaffiliated parties to the lessee. (3) These properties are encumbered by mortgages and/or lease assignments in connection with mortgage notes payable on other of the Partnership's properties. (4) The Partnership operates a hotel business at these properties. (5) This property is vacant. -27- MARKET FOR THE PARTNERSHIP'S EQUITY AND RELATED UNITHOLDER MATTERS - -------------------------------------------------------------------------------- Except for limited or sporadic transactions, there is no established public trading market for the Limited Partnership Units of the Partnership. As of December 31, 1995, there were 3,565 holders of record of the Limited Partnership Units of the Partnership. In accordance with the requirements of the Partnership's Amended Agreement of Limited Partnership (the "Agreement") the Corporate General Partner expects to continue to make quarterly distributions of Distributable Cash From Operations, as defined, in the Agreement. The following table shows the frequency and amount of distributions paid per Unit since 1992:
Cash Distributions Paid Per Unit -------------------------------- 1993 1994 1995 ------ ------ ------ First quarter $12.06 $12.15 $12.20 Second quarter 12.09 12.16 32.21 (a) Third quarter 12.11 12.18 11.74 Fourth quarter 12.14 12.19 11.75 ------ ------ ------ $48.40 $48.68 $67.90 ====== ====== ======
(a) Includes a special distribution of $20 per Unit. REPORT ON FORM 10-K - -------------------------------------------------------------------------------- The Corporate General Partner will supply to any owner of Limited Partnership Units, upon written request and without charge, a copy of the Annual Report on Form 10-K for the year ended December 31, 1995 as filed with the Securities and Exchange Commission. -28- DIRECTORS AND SENIOR OFFICERS - -------------------------------------------------------------------------------- The Partnership has no officers or directors. The senior officers and directors of the Corporate General Partner are as follows: William Polk Carey Chairman of the Board Director Francis J. Carey President Director George E. Stoddard Chairman of the Investment Committee Director Raymond S. Clark Chairman of the Executive Committee Director Madelon DeVoe Talley Vice Chairman of the Board Director Barclay G. Jones III Executive Vice President Director Lawrence R. Klein Chairman of the Economic Policy Committee Director Claude Fernandez Executive Vice President Chief Administrative Officer Howard J. Altmann Senior Vice President H. Augustus Carey Senior Vice President John J. Park Senior Vice President Treasurer Debra E. Bigler First Vice President Ted G. Lagried First Vice President Anthony S. Mohl First Vice President Michael D. Roberts First Vice President Controller The directors and senior officers of W.P. Carey & Co., Inc. are substantially the same as above. A description of the business experience of each officer and director of the Corporate General Partner is set forth below: William Polk Carey, Chairman and Chief Executive Officer, has been active in lease financing since 1959 and a specialist in net leasing of corporate real estate property since 1964. Before founding W.P. Carey & Co., Inc. ("W.P. Carey") in 1973, he served as Chairman of the Executive Committee of Hubbard, Westervelt & Mottelay (now Merrill Lynch Hubbard), head of Real Estate and Equipment Financing at Loeb Rhoades & Co. (now Lehman Brothers), head of Real Estate and Private Placements, Director of Corporate Finance and Vice Chairman of the Investment Banking Board of duPont Glore Forgan Inc. A graduate of the University of Pennsylvania's Wharton School of Finance, Mr. Carey is a Governor of the National Association of Real Estate Investment Trusts (NAREIT). He also serves on the boards of The Johns Hopkins University and its medical school, The James A. Baker III Institute for Public Policy at Rice University, and other educational and philanthropic institutions. He founded the Visiting Committee to the Economics Department of the University of Pennsylvania and co-founded with Dr. Lawrence R. Klein the Economics Research Institute at that university. -29- Francis J. Carey was elected President and a Managing Director of W.P. Carey in April 1987, having served as a Director since its founding in 1973. He served as a member of the Executive Committee and Board of Managers of the Western Savings Bank of Philadelphia from 1972 until its takeover by another bank in 1982 and is former chairman of the Real Property, Probate and Trust Section of the Pennsylvania Bar Association. Mr. Carey served as a member of the Board of Overseers of the School of Arts and Sciences of the University of Pennsylvania from 1983 through 1990 and has served as a member of the Board of Trustees of the Investment Program Association since 1990. From April 1987 until August 1992, he served as counsel to Reed Smith Shaw & McClay, counsel for Registrant, the General Partners, the CPA(R) Partnerships and W.P. Carey and some of its affiliates. A real estate lawyer of more than 30 years' experience, he holds A.B. and J.D. degrees from the University of Pennsylvania. George E. Stoddard, Chief Investment Officer, was until 1979 head of the bond department of The Equitable Life Assurance Society of the United States, with responsibility for all activities related to Equitable's portfolio of corporate investments acquired through direct negotiation. Mr. Stoddard was associated with Equitable for over 30 years. He holds an A.B. degree from Brigham Young University, an M.B.A. from Harvard Business School and an LL.B. from Fordham University Law School. Raymond S. Clark is former President and Chief Executive Officer of the Canton Company of Baltimore and the Canton Railroad Company. A graduate of Harvard College and Yale Law School, he is presently a Director and Chairman of the Executive Committee of W.P. Carey and served as Chairman of the Board of W.P. Carey from its founding in 1973 until 1982. He is past Chairman of the Maryland Industrial Development Financing Authority. Madelon DeVoe Talley, Vice Chairman, is a member of the New York State Controller's Investment Committee, a Commissioner of the Port Authority of New York and New Jersey, former CIO of New York State Common Retirement Fund and New York State Teachers Retirement System. She also served as a managing director of Rothschild, Inc. and as the President of its asset management division. Besides her duties at W.P. Carey, Mrs. Talley is also a former Governor of the N.A.S.D. and is a director of Biocraft Laboratories, a New York Stock Exchange company. She is an alumna of Sarah Lawrence College and the graduate school of International Affairs at Columbia University. Barclay G. Jones III, Executive Vice President, Managing Director, and co-head of the Investment Department. Mr. Jones joined W.P. Carey as Assistant to the President in July 1982 after his graduation from the Wharton School of the University of Pennsylvania, where he majored in Finance and Economics. He was elected to the Board of Directors of W.P. Carey in April 1992. Mr. Jones is also a Director of the Wharton Business School Club of New York. Lawrence R. Klein, Chairman of the Economic Policy Committee since 1984, is Benjamin Franklin Professor of Economics Emeritus at the University of Pennsylvania, having joined the faculty of Economics and the Wharton School in 1958. He holds earned degrees from the University of California at Berkeley and Massachusetts Institute of Technology and has been awarded the Nobel Prize in Economics as well as over 20 honorary degrees. Founder of Wharton Econometric Forecasting Associates, Inc., Dr. Klein has been counselor to various corporations, governments, and government agencies including the Federal Reserve Board and the President's Council of Economic Advisers. Claude Fernandez, Chief Administrative Officer, Managing Director, and Executive Vice President, joined W.P. Carey in 1983. Previously associated with Coldwell Banker, Inc. for two years and with Arthur Andersen & Co., he is a Certified Public Accountant. Mr. Fernandez received his B.S. degree in Accounting from New York University in 1975 and his M.B.A. in Finance from Columbia University Graduate School of Business in 1981. Howard J. Altmann, Senior Vice President, Investment Department, joined W.P. Carey in August 1990. He was a securities analyst at Goldman Sachs & Co. for the retail industry from 1986 to 1988. Mr. Altmann received his undergraduate degree in economics and finance from McGill University and his M.B.A. from the Stanford University Graduate School of Business. -30- H. Augustus Carey, Senior Vice President, returned to W.P. Carey in 1988. Mr. Carey previously worked for W.P. Carey from 1979 to 1981 as Assistant to the President. Prior to rejoining W.P. Carey, Mr. Carey served as a loan officer of the North American Department of Kleinwort Benson Limited in London, England. He received an A.B. from Amherst College in 1979 and an M.Phil. in Management Studies from Oxford University in 1984. Mr. Carey is a trustee of the Oxford Management Centre Associates Council. John J. Park, Senior Vice President and Treasurer, joined W.P. Carey as an Investment Analyst in December 1987. Mr. Park received his undergraduate degree from Massachusetts Institute of Technology and his M.B.A. in Finance from New York University. Debra E. Bigler, First Vice President, joined W.P. Carey in 1989 as an assistant marketing director, rising to her present position where she bears responsibility for investor services throughout the southern United States. She was previously employed by E. F. Hutton & Company for nine years where she began as a Marketing Associate in Private Placement, Sales and Marketing and was then promoted to Regional Director. Ted G. Lagreid, First Vice President, joined W.P. Carey in 1994 and is regional director responsible for investor services in the western United States. Prior to joining the firm, he was a Vice President with Shurgard Capital Group, then for Sun America where he was an executive in its mutual funds group. He earned an A.B. from the University of Washington, received an M.P.A. from the University of Puget Sound and then spent eight years in the city of Seattle's Office of Management and Budget and Department of Community Development. Mr. Lagreid was a commissioner of the City of Oakland, California, serving on its Community and Economic Advisory Commission. Anthony S. Mohl, First Vice President, Director of Portfolio Management, joined W.P. Carey as Assistant to the President after receiving his M.B.A. from the Columbia University Graduate School of Business. Mr. Mohl was employed as an analyst in the strategic planning group at Kurt Salmon Associates after receiving an undergraduate degree from Wesleyan University. Michael D. Roberts joined W. P. Carey as a Second Vice President and Assistant Controller in April 1989 and is currently First Vice President and Controller. Prior to joining W.P. Carey, Mr. Roberts was employed by Coopers & Lybrand, where he attained the title of audit manager. A certified public accountant, Mr. Roberts received a B.A. from Brandeis University and an M.B.A. from Northeastern University. -31- EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENT YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 2,300,682 0 174,798 165,164 0 3,440,634 80,736,916 16,636,945 72,268,402 1,939,601 37,216,145 0 0 0 31,746,063 72,268,402 0 15,768,137 0 0 6,893,871 1,980,550 3,495,872 1,912,698 0 1,912,698 0 0 0 1,912,698 15.12 15.12
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