-----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, FHOZj6nbHv2JGLI++KHKMTc26AC4/5d2YS4CHAtw4p45VYB+oQi2z3V7WPrOw9p4 QNBNBZ7PvQ3/mnS3KfKAeQ== 0000950123-97-007592.txt : 19970912 0000950123-97-007592.hdr.sgml : 19970912 ACCESSION NUMBER: 0000950123-97-007592 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970904 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORPORATE PROPERTY ASSOCIATES 7 CENTRAL INDEX KEY: 0000789459 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 133327950 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 000-15778 FILM NUMBER: 97675392 BUSINESS ADDRESS: STREET 1: 50 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 2124921100 MAIL ADDRESS: STREET 1: 50 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10020 10-Q/A 1 CORPORATE PROPERTY ASSOCIATES 7 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A AMENDMENT NO. 1 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 1997 or [ ] TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-15778 CORPORATE PROPERTY ASSOCIATES 7, A CALIFORNIA LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) CALIFORNIA 13-3327950 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 50 ROCKEFELLER PLAZA, NEW YORK, NEW YORK 10020 (Address of principal executive offices) (Zip Code)
(212) 492-1100 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. [ ] Yes [ ] No 2 CORPORATE PROPERTY ASSOCIATES 7 - a California limited partnership PART I Item 1. - FINANCIAL INFORMATION CONSOLIDATED BALANCE SHEETS
December 31, March 31, 1996 1997 ----------- ----------- (Note) (Unaudited) ASSETS: Land, buildings and personal property, net of accumulated depreciation of $11,101,853 at December 31, 1996 and $11,393,055 at March 31, 1997 $33,276,821 $33,008,269 Net investment in direct financing leases 15,542,368 10,844,344 Cash and cash equivalents 5,591,985 5,966,413 Real estate held for sale 4,698,024 Other assets 1,020,950 1,205,133 ----------- ----------- Total assets $55,432,124 $55,722,183 =========== =========== LIABILITIES: Mortgage notes payable $10,314,828 $10,228,716 Note payable 9,606,837 9,606,837 Accrued interest payable 324,737 321,477 Accounts payable and accrued expenses 676,737 632,505 Accounts payable to affiliates 113,485 121,657 Prepaid and deferred rental income 371,116 387,327 ----------- ----------- Total liabilities 21,407,740 21,298,519 ----------- ----------- PARTNERS' CAPITAL: General Partners 161,740 185,697 Limited Partners (45,209 Limited Partnership Units issued and outstanding) 33,862,644 34,237,967 ---------- ---------- Total partners' capital 34,024,384 34,423,664 ---------- ---------- Total liabilities and partners' capital $55,432,124 $55,722,183 =========== ===========
The accompanying notes are an integral part of the consolidated financial statements. Note: The balance sheet at December 31, 1996 has been derived from the audited consolidated financial statements at that date. -2- 3 CORPORATE PROPERTY ASSOCIATES 7 - a California limited partnership CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended March 31, 1996 March 31, 1997 -------------- -------------- Revenues: Rental income from operating leases $1,051,680 $1,111,914 Interest income from direct financing leases 557,020 551,844 Other interest income 62,782 66,039 Revenue of hotel operations 1,355,341 1,398,349 Other income 241,272 ---------- ---------- 3,026,823 3,369,418 ---------- ---------- Expenses: Interest 497,727 463,104 Operating expenses of hotel operations 1,009,592 1,022,703 Depreciation 286,370 291,202 General and administrative 104,000 157,127 Property expenses 105,112 111,733 Amortization 7,216 14,719 ---------- ---------- 2,010,017 2,060,588 ---------- ---------- Income before loss from equity investment and gain on sales of real estate 1,016,806 1,308,830 Loss from equity investment 32,803 30,379 ---------- ---------- Income before gain on sales of real estate 984,003 1,278,451 Gain on sales of real estate 74,729 ---------- ---------- Net income $1,058,732 $1,278,451 ========== ========== Net income allocated to General Partners $ 59,787 $ 76,707 ========== ========== Net income allocated to Limited Partners $ 998,945 $1,201,744 ========== ========== Net income per Unit (45,209 Limited Partnership Units) $ 22.10 $ 26.58 ========== ==========
The accompanying notes are an integral part of the consolidated financial statements. -3- 4 CORPORATE PROPERTY ASSOCIATES 7 - a California limited partnership CONSOLIDATED STATEMENTS of CASH FLOWS (UNAUDITED)
Three Months Ended March 31, --------------------------- 1996 1997 ----------- ----------- Cash flows from operating activities: Net income $ 1,058,732 $ 1,278,451 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 293,586 305,921 Other noncash items 37,284 37,284 Loss from equity investment 32,803 30,379 Gain on sales of real estate (74,729) Net change in operating assets and liabilities (163,851) (289,674) ----------- ----------- Net cash provided by operating activities 1,183,825 1,362,361 ----------- ----------- Cash flows from investing activities: Additional capitalized costs (29,463) (22,650) Distributions from equity investment 8,316 Net proceeds from sales of real estate 617,867 ----------- ----------- Net cash by provided by (used in) investing activities 596,720 (22,650) ----------- ----------- Cash flows from financing activities: Distributions to partners (863,780) (879,171) Payments on mortgage principal (367,585) (86,112) ----------- ----------- Net cash used in financing activities (1,231,365) (965,283) ----------- ----------- Net increase in cash and cash equivalents 549,180 374,428 Cash and cash equivalents, beginning of period 4,968,410 5,591,985 ----------- ----------- Cash and cash equivalents, end of period $ 5,517,590 $ 5,966,413 =========== =========== Supplemental disclosure of cash flows information: Interest paid $ 507,014 $ 466,364 =========== ===========
The accompanying notes are an integral part of the consolidated financial statements. -4- 5 CORPORATE PROPERTY ASSOCIATES 7 - a California limited partnership NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Basis of Presentation: The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the financial statements and footnotes there to included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1996. Note 2. Distributions to Partners: Distributions declared and paid to partners during the three months ended March 31, 1997 are summarized as follows:
Quarter Ended General Partners Limited Partners Per Limited Partner Unit - ----------------- ---------------- ---------------- ------------------------ December 31, 1996 $52,750 $826,421 $18.28 ======= ======== ======
A distribution of $18.30 per Limited Partner Unit for the quarter ended March 31, 1997 was declared and paid in April 1997. Note 3. Transactions with Related Parties: For the three-month periods ended March 31, 1996 and 1997, the Partnership incurred management fees of $23,720 and $29,106, respectively, and general and administrative expense reimbursements of $37,499 and $52,597, respectively. Management believes that ultimate payment of a preferred return to the General Partners of $805,015, based upon cumulative proceeds of sales of assets, is reasonably possible but not probable, as defined pursuant to Statement of Financial Accounting Standards No. 5. The Partnership, in conjunction with certain affiliates, is a participant in a cost sharing agreement for the purpose of renting and occupying office space. Under the agreement, the Partnership pays its proportionate share of rent and other costs of occupancy. Net expenses incurred for the three months ended March 31, 1996 and 1997 were $21,223 and $21,615 respectively. -5- 6 CORPORATE PROPERTY ASSOCIATES 7 - a California limited partnership NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED) Note 4. Industry Segment Information: The Partnership's operations consist of the investment in and the leasing of industrial and commercial real estate and the operation of a hotel business. For the three-month periods ended March 31, 1996 and 1997, the Partnership earned its lease revenues (rental income plus interest income from financing leases) from the following lease obligors:
1996 % 1997 % ---- --- ---- --- Advanced System Applications, Inc. $ 394,658 25% $ 381,131 23% The Gap, Inc. 231,892 14 231,892 14 KSG, Inc. 205,726 13 203,609 12 Sybron Acquisition Company 204,800 12 204,800 12 Swiss M-Tex, L.P. 133,205 8 129,774 8 AutoZone, Inc. 105,194 7 98,400 6 Other 77,110 5 97,249 6 CSK Auto Parts, Inc. 97,208 6 97,208 6 NVRyan L.P. 72,889 5 72,889 4 United States Postal Service 60,788 4 NYNEX Corporation 53,900 3 53,900 3 Winn-Dixie Stores, Inc. 32,118 2 32,118 2 ---------- --- ---------- --- $1,608,700 100% $1,663,758 100% ========== === ========== ===
Results for the Partnership's hotel operations of a Holiday Inn in Livonia, Michigan for the three-month periods ended March 31, 1996 and 1997 are summarized as follows:
1996 1997 ----------- ----------- Revenues $ 1,355,341 $ 1,398,349 Fees paid to hotel management company (36,314) (40,779) Other operating expenses (973,278) (981,924) ----------- ----------- Hotel operating income $ 345,749 $ 375,646 =========== ===========
Note 5. Real Estate Held For Sale: In December 1996, KSG, Inc. ("KSG") notified the Partnership that it was exercising its option to purchase the property it leases from the Partnership in Hazelwood, Missouri. The exercise price will be the greater of $4,698,000 (the Partnership's purchase price for the property in March 1987) or fair market value as encumbered by the lease. The option provides that the sale of the property occur no later than March 8, 1998. An appraisal process to determine fair market value has commenced. Annual cash flow from the KSG property is approximately $820,000, -6- 7 CORPORATE PROPERTY ASSOCIATES 7 - a California limited partnership SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CORPORATE PROPERTY ASSOCIATES 7 - a California limited partnership By: SEVENTH CAREY CORPORATE PROPERTY, INC. 09/03/97 BY: /s/ Steven M. Berzin - ---------------- --------------------------------- Date Steven M. Berzin Executive Vice President and Chief Financial Officer (Principal Financial Officer) 09/03/97 BY: /s/ Claude Fernandez - ---------------- --------------------------------- Date Claude Fernandez Executive Vice President and Chief Administrative Officer (Principal Accounting Officer) -7- -----END PRIVACY-ENHANCED MESSAGE-----