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FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2007 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ___________ Commission file number 0-2670 60 EAST 42ND ST. ASSOCIATES L.L.C. (Exact name of Registrant as specified in its charter) A New York Limited Liability Company 13-6077181 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 60 East 42nd Street, New York, New York 10165 (Address of principal executive offices) (Zip Code) (212) 687-8700 (Registrant's telephone number, including area code) N/A (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. Yes [ X ]. No [ ]. Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes [ ] No [ X ] . PART I. FINANCIAL INFORMATION Item 1. Financial Statements. 60 East 42nd St. Associates L.L.C. (A Limited Liability Company) Condensed Balance Sheets (Unaudited) September 30, 2007 December 31, 2006 Real estate: Buildings $16,960,000 $16,960,000 Less, accumulated depreciation 16,960,000 16,960,000 0 0 Building improvements and equipment 65,639,053 60,470,331 Less, accumulated depreciation 6,734,209 5,558,282 58,904,844 54,912,049 Land 7,240,000 7,240,000 Total real estate 66,144,844 62,152,049 Cash in banks and money market fund 135,056 224,526 Receivable from participants re: NYS estimated
tax 138,714 - Restricted cash for payment of building improvement
costs 9,031,383 2,325,912 Further additional rent due from lessee, a related
party 9,772,882 0 Leasing commissions 3,307,138 2,294,156 Less, accumulated amortization 773,827 474,497 2,533,311 1,819,659 Mortgage refinancing costs 2,111,087 2,111,087 Less, accumulated amortization 597,677 439,345 1,513,410 1,671,742 Total assets $89,269,600 $68,193,888 Liabilities and Members' Deficiency: Liabilities: First mortgage payable $83,731,327 $66,000,000 Due to lessee, a related party 277,370 6,470,258 Accrued additional payment for services to supervisor, a related party 949,569 0 Building improvement costs payable 7,080,909 6,163,849 Accrued mortgage interest and other expenses 446,815 293,839 Total liabilities 92,485,990 78,927,946 Members' deficiency (3,216,390) (10,734,058) Total liabilities and members' deficiency $89,269,600 $68,193,888 See notes to the condensed financial statements. 60 East 42nd St. Associates L.L.C. (A Limited Liability Company) Condensed Statements of Operations (Unaudited)
2007
2006 2007 2006 Revenues: Basic rent income, from a related party $ 1,381,474 $ 830,527 $3,169,885 $2,428,819 Advance of additional rent income from a related
party 263,450 263,450 790,350 790,350 Further additional rent from a related party 9,772,882 9,102,338 9,772,882 9,102,338 Total rent income 11,417,806 10,196,315 13,733,117 12,321,507 Dividend income 148,040 13,186 267,329 102,319 Miscellaneous income 0 0 1,500 0 Total revenues 11,565,846 10,209,501 14,001,946 12,423,826 Expenses: Interest on mortgage 1,119,608 837,713 3,015,308 2,513,138 Supervisory services, to a related party
7,845 7,845 23,535 23,535 Additional payment for services to supervisor, a
related party 949,569 910,164 949,569 910,164 Depreciation of building improvements and
equipment 403,852 339,332 1,175,927 994,524 Amortization of leasing commissions 120,035 72,428 299,330 200,964 Amortization of mortgage refinancing costs 52,777 52,777 158,332 158,332 Fees and miscellaneous 74,211 0 77,462 700 Total expenses 2,727,897 2,220,259 5,699,463 4,801,357 Net Income $8,837,949 $7,989,242 $8,302,483 $7,622,469 Income per $10,000 participation unit, based on 700 participation units outstanding during each period $12,625.64 $11,413.20 $11,860.69 $10,889.24 Total distributions $261,605 $261,605 $784,815 $784,815 Distributions per $10,000 participation unit consisted of the following: Income Return of Capital Total distributions $373.72 0 $373.72 $373.72 0 $373.72 $1,121.16 0 $1,121.16 $1,121.16 0 $1,121.16 At September 30, 2007 and 2006, there were
$7,000,000 of participation units outstanding. See notes to the condensed financial
statements. 60 East 42nd St. Associates L.L.C. (A Limited Liability Company) Statement of Members' Deficiency (Unaudited) For the Nine For the Year Months Ended Ended September 30, 2007 December 31, 2006 Members' deficiency: January 1, 2007 $(10,734,058) January 1, 2006 $(8,887,785) Add net income: January 1, 2007 through September 30, 2007 8,302,483 - January 1, 2006 through December 31, 2006 - 7,391,621 (2,431,575) (1,496,164) Less distributions: Monthly distributions: January 1, 2007 through September 30, 2007 784,815 - January 1, 2006 through December 31, 2006 - 1,046,420 Additional distribution on November 30, 2006 - 8,191,474 Total distributions 784,815 9,237,894 Members' deficiency: September 30, 2007 $(3,216,390) December 31, 2006 $(10,734,058) See notes to the condensed financial
statements. 60 East 42nd St. Associates L.L.C. (A Limited Liability Company) Condensed Statements of Cash Flows (Unaudited)
For the Nine Months For the Nine Months
Ended
Ended
September 30, 2007 September 30, 2006 Cash flows from operating activities: Net income $8,302,483 $ 7,622,469 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation of building improvements and equipment
1,175,927 994,524 Amortization of leasing commissions 299,330 200,964 Amortization of mortgage refinancing costs 158,332 158,332 Changes in operating assets and liabilities: Change in further additional rent due from lessee
(9,772,882) (9,102,338) Change in leasing commissions (1,012,982) (512,455) Change in accrued additional payment to
supervisor 949,569 910,164 Change in accrued mortgage interest and other
expenses 152,976 19,885 Net cash provided by operating activities 252,753 291,545 Cash flows from investing activities: Purchase of building improvements and
equipment (11,481,858) (6,549,487) Change in receivable from participants (138,714) (137,762) Change in restricted cash for payment of building
improvement costs (6,705,471) 2,042,168 Net cash used in investing activities (18,326,043) (4,645,081) Cash flows from financing activities: Proceeds from refinancing 18,000,000 4,500,000 Repayment of first mortgage payable (268,673) 0 Advances from lessee and others for building
improvements 1,037,308 506,849 Cash distributions to participants (784,815) (784,815) Net cash provided by financing activities 17,983,820 4,222,034 Net decrease in cash and cash equivalents (89,470) (131,502) Cash and cash equivalents, beginning of
period 224,526 235,893 Cash and cash equivalents, end of period $ 135,056 $ 104,391 Cash paid for: Interest $2,936,404 $2,493,253 See notes to the condensed financial
statements. 60 East 42nd St. Associates L.L.C. Condensed Statements of Cash Flows (Unaudited) For the Nine
Months
Ended September 30, 2007 2006 Supplemental disclosure of noncash investing and
financing activities: Short term debt payable to lessee and others
incurred for the purchase of building improvements
$0 $1,635,859 See notes to the condensed financial
statements. Notes to Condensed Financial Statements (Unaudited) Note A Interim Period Reporting In the opinion of management, the
accompanying unaudited condensed financial statements of 60 East 42nd St. Associates L.L.C. (the "Registrant") reflect
all adjustments, consisting of normal recurring accruals, necessary to present
fairly the financial position of Registrant as of September 30, 2007, its
results of operations for the three and nine months ended September 30, 2007 and
2006 and its cash flows for the nine months ended September 30, 2007 and 2006.
Information included in the condensed balance sheet as of December 31, 2006 has
been derived from the audited balance sheet included in Registrant's Form 10-K
for the year ended December 31, 2006 (the "10-K") previously filed with the
Securities and Exchange Commission (the "SEC"). Pursuant to rules and
regulations of the SEC, certain information and disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted from
these financial statements unless significant changes have taken place since the
end of the most recent fiscal year. Accordingly, these unaudited condensed
financial statements should be read in conjunction with the financial statements
and notes thereto and the other information contained in the 10-K. The results
of operations for the nine months ended September 30, 2007 are not necessarily
indicative of the results to be expected for the full year. Note B Organization Registrant was originally organized as a
partnership on September 25, 1958. On October 1, 1958, Registrant acquired fee
title to the Lincoln Building (the "Building") and the land thereunder, located
at 60 East 42nd Street, New York, New York (the "Property"). On November 28,
2001, Registrant converted to a limited liability company under New York law and
is now known as 60 East 42nd St. Associates
L.L.C. The conversion did not change any aspect of the assets and operations of
Registrant other than to protect its participants from liability to third
parties. Registrant's members are Peter L. Malkin, Anthony E. Malkin and Thomas
N. Keltner, Jr. (individually, a "Member" and, collectively, the "Members"),
each of whom also acts as an agent for holders of participations in the
Registrant (individually, a "Participant" and, collectively, "Participants").
The members in Registrant hold senior positions at Wien & Malkin LLC ("Wien
& Malkin" or the "Supervisor"), 60 East 42nd Street, New York, New York,
which provides supervisory and other services to Registrant and to Lessee. See
Note E below. Wien & Malkin LLC, a limited liability
company, succeeded Wien & Malkin LLP, a limited liability partnership, on
November 30, 2006 without any change in duties, responsibilities, staffing,
operation, rights or compensation to it as Supervisor. Note C Lease Registrant does not operate the Property.
Registrant leases the Property to Lincoln Building Associates L.L.C. ("Lessee")
under a long-term net operating lease (the "Lease"), the current term of which
expires on September 30, 2008. In January, 2007, the Lessee exercised a 25-year
renewal option extending the Lease until September 30, 2033. Lessee is a New
York limited liability company whose members consist of, among others, entities
for the benefit of members of Peter L. Malkin's family. The Lease, as modified, provides that
Lessee is required to pay rent to Registrant as follows: (i) annual basic rent (the "Basic Rent")
equal to the sum of $24,000 for supervisory services payable to Supervisor plus
the constant annual mortgage charges on all mortgages. In the event of a
mortgage refinancing, unless there is an increase in the mortgage balance, the
annual basic rent will be modified and will be equal to the sum of $24,000 plus
an amount equal to the revised mortgage charges. In the event that such mortgage
refinancing results in an increase in the amount of outstanding principal
balance of the mortgage, the basic rent shall be equal to $24,000 plus an amount
equal to the product of the new debt service percentage rate under the
refinanced mortgage multiplied by the principal balance of the mortgage
immediately prior to the refinancing. In accordance with the Eighth Lease
Modification Agreement dated November 29, 2004, Basic Rent was increased to
cover debt service on the new $84,000,000 first mortgage. See Note D. The Basic
Rent will be increased or decreased upon the refinancing of the mortgages
provided that the aggregate principal balance of all mortgages now or hereafter
placed on the property does not exceed $84,000,000 plus refinancing costs. (ii) additional rent (the "Additional
Rent") equal to, on an annual basis, the lesser of (x) Lessee's net operating
income (as defined) for the lease year ending September 30 or (y) $1,053,800
($87,817 per month) and further additional rent ("Further Additional Rent")
equal to 50% of any remaining balance of Lessee's net operating income for such
lease year. (Lessee has no obligation to make any payment of Additional Rent or
Further Additional Rent until after Lessee has recouped any cumulative operating
loss accruing from and after September 30, 1977. There is currently no
accumulated operating loss against which to offset payment of Additional Rent or
Further Additional Rent.) The Lease also requires an advance against
Additional Rent equal to, on an annual basis, the lesser of (x) Lessee's net
operating income for the preceding lease year or (y) $1,053,800, which, in the
latter amount, will permit basic distributions to Participants at an annual rate
of approximately 14.95% per annum on their remaining cash investment in
Registrant; provided, however, if such advances exceed Lessee's net operating
income for any lease year, advances otherwise required during the subsequent
lease year shall be reduced by an amount equal to such excess until Lessee shall
have recovered, through retention of net operating income, the full amount of
such excess. After the Participants have received distributions equal to a
return of 14% per annum, $7,380 is paid to Supervisor from the advances against
Additional Rent. Lessee is required to make an annual
payment to Registrant of Further Additional Rent, which, as explained above, is
the amount representing 50% of the remaining net operating income reported by
Lessee for the lease year ending September 30th after deducting the advance
against additional rent. The Lease requires that the report be delivered by
Lessee to Registrant annually within 60 days after the end of each such lease
year. Since it is not practicable to estimate Further Additional Rent for the
lease year ending on the ensuing September 30th
which would be allocable to the first nine months of the lease year until
Lessee, pursuant to the Lease, renders to Registrant a report on the operation
of the Property, Registrant recognizes Further Additional Rent when earned from
the Lessee at the close of the lease year ending September 30th. For the lease year ended September 30,
2007, Lessee reported net operating income of $20,599,567. Lessee paid advances
against Additional Rent of $1,053,800 for that lease year prior to September 30,
2007 and Further Additional Rent of $9,772,882 subsequent to September 30, 2007.
The Further Additional Rent of $9,772,882 represents 50% of the excess of the
Lessee's net operating income of $20,599,567 over $1,053,800, After deducting
$700 for annual New York State limited liability company filing fees, $200,000
added as a cash reserve for contingencies (there were no related charges to
expenses), $76,491 of costs (of which $74,211 was accrued at September 30, 2007)
(See Note F) that were incurred in response to an unaffiliated third party
tender offer and $949,569 as an additional required payment to Supervisor (See
Note E), the balance of $8,546,122 was distributed by the Registrant to the
Participants on November 30, 2007. For the lease year ended September 30,
2006, Lessee reported net operating income of $19,258,480. Lessee paid advances
against Additional Rent of $1,053,800 for that lease year prior to September 30,
2006 and Further Additional Rent of $9,102,338 subsequent to September 30, 2006.
The Further Additional Rent of $9,102,338 represents 50% of the excess of the
Lessee's net operating income of $19,258,480 over $1,053,800, After deducting
$700 for annual New York State limited liability company filing fees and
$910,164 as an additional required payment to Supervisor, the balance of
$8,191,474 was distributed by the Registrant to the Participants on November 30,
2006. As a result of its revenue recognition
policy, rental income for the year ending December 31st includes the advances of Additional Rent income
received from October 1st to December 31st but does not include any portion of Further
Additional Rent based on the Lessees' operations during that period. Note D First Mortgage Payable On November 29, 2004, a new first mortgage
("Mortgage") was placed on the Property in the amount of $84,000,000 with
Prudential Insurance Company of America to provide financing for the improvement
program described below. At closing, $49,000,000 was drawn to pay off the former
first mortgage with Morgan Guaranty Trust Company in the amount of $12,020,814
and the second mortgage in the amount of $27,979,186 with Emigrant Savings Bank.
The remaining $35,000,000 available under the Mortgage was drawn on various
dates through July 5, 2007. The remaining proceeds of $9,000,000 drawn at
closing and all subsequent draws have been or will be used to pay for
refinancing costs and capital improvements as needed. The initial draw of
$49,000,000 and all subsequent draws required constant equal monthly payments of
interest only, at the rate of 5.34% per annum, until July 5, 2007. Commencing
August 5, 2007, Registrant is required to repay the full $84,000,000 in equal
monthly payments of $507,838 applied to interest and then principal calculated
on a 25-year amortization schedule. The Mortgage matures on November 5,
2014. The Mortgage may be prepaid at any time, in
whole only, upon payment of a prepayment penalty based on a yield maintenance
formula. There is no prepayment penalty if the Mortgage is paid in full during
the last 60 days of the term. Refinancing costs of $2,111,087 were
capitalized by Registrant and are being amortized ratably over the term of the
Mortgage. In 1999, the Participants of Registrant and
the members in Lessee consented to a building improvements program (the
"Program") estimated to cost approximately $22,800,000. In 2000, the
Participants of Registrant and members in Lessee approved an increase in the
Program from $22,800,000 to approximately $28,000,000 under substantially the
same conditions as had previously been approved. To induce the Lessee to approve
the Program, Registrant agreed to grant to the Lessee, upon completion of the
Program, the right to further extensions of the Lease to 2083. The Program was
further increased in 2004 to up to $100,000,000. Such increase would extend the
lease beyond 2083, based on the net present benefit to Registrant of the
improvements made. The granting of such Lease extension rights upon completion
of the Program is expected to trigger a New York State Transfer Tax under
current tax rules, which will be paid from mortgage proceeds and/or the Lessee's
operating cash flow. As of September 30, 2007, the Registrant had incurred or
accrued costs related to the Program of approximately $65,600,000 and estimated
that the Program will be completed by 2008 and that costs upon completion will
be approximately $88,000,000. The Participants of Registrant and the members in
Lessee have approved increased refinancing of $16,000,000 from the total of
$84,000,000 provided by the Mortgage to up to $100,000,000. The balance of the
costs of the Program will be financed primarily by the $1,950,000 of restricted
cash in excess of building costs payable as of September 30, 2007 and the
additional $16,000,000 of loans previously approved, assuming such financing is
available. Note E Supervisory Services Registrant pays Supervisor for supervisory
services and disbursements. Basic fees for supervisory services are $24,000 per
annum, payable in equal monthly installments. The supervisory services provided to
Registrant by Supervisor include, but are not limited to, maintaining all of its
entity and Participant records, performing physical inspections of the Building,
providing or coordinating counsel services to Registrant, reviewing insurance
coverage and conducting annual supervisory review meetings, receipt of monthly
rent from Lessee, payment of monthly and additional distributions to the
Participants, payment of all other disbursements, confirmation of the payment of
real estate taxes, active review of financial statements submitted to Registrant
by Lessee and financial statements audited by and tax information prepared by
Registrant's independent registered public accounting firm, and distribution of
related materials to the Participants. Supervisor also prepares quarterly,
annual and other periodic filings with the SEC and applicable state
authorities. Registrant pays Supervisor for other
services at hourly rates. No remuneration was paid by Registrant
during the nine-month period ended September 30, 2007 to any of the Members as
such. Supervisor also receives a payment
("Additional Payment") equal to 10% of all distributions to Participants in
Registrant in any year in excess of the amount representing a return to them at
the rate of 14% per annum on their remaining cash investment in Registrant
(which remaining cash investment at September 30, 2007 was equal to the
Participants' original cash investment of $7,000,000). For tax purposes, such
additional payment is recognized as a profits interest, and the Supervisor is
treated as a partner, all without modifying each Participant's distributive
share of reportable income and cash distribution. Supervisor receives $7,380 a
year as an advance against the Additional Payment, which Registrant expenses
monthly. For the nine months ended September 30, 2007 and 2006,
Registrant incurred further charges for the Additional Payment of $949,569 and
$910,164, respectively. Reference is made to Note C above for a
description of the terms of the Lease between Registrant and Lessee. As of
September 30, 2007, Peter L. Malkin owned a member interest in Lessee. The
respective interests of the Members in Registrant and Lessee arise solely from
ownership of their respective Participations in Registrant and, in the case of
Peter L. Malkin, his individual ownership of a member interest in Lessee. The
Members as such receive no extra or special benefit not shared on a pro rata
basis with all other Participants in Registrant or members in Lessee. However,
all of the Members hold senior positions at Supervisor (which supervises
Registrant and Lessee) and, by reason of their positions at Supervisor, may
receive income attributable to supervisory or other remuneration paid to
Supervisor by Registrant and Lessee. Note F Fees and miscellaneous During the nine months ended September 30,
2007, the Registrant accrued $74,211 of charges in connection with tender offers
for participations commenced by unrelated third parties during 2006 and 2007,
including $53,162 charged by Wien & Malkin at its hourly rates that will be
paid during the fourth quarter of 2007. Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations. Forward Looking Statements Readers of this discussion are advised that
the discussion should be read in conjunction with the financial statements of
Registrant (including related notes thereto) appearing elsewhere in this Form
10-Q. Certain statements in this discussion may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements reflect Registrant's current expectations
regarding future results of operations, economic performance, financial
condition and achievements
of Registrant, and do not relate strictly to historical or current facts.
Registrant has tried, wherever possible, to identify these forward-looking
statements by using words such as "believe," "expect," "anticipate," "intend,"
"plan," "estimate" or words of similar meaning. Although Registrant believes that the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, such statements are subject to risks and uncertainties,
which may cause the actual results to differ materially from those projected.
Such factors include, but are not limited to, the following: general economic
and business conditions, which will, among other things, affect demand for
rental space, the availability of prospective tenants, lease rents and the
availability of financing; adverse changes in Registrant's real estate market,
including, among other things, competition with other real estate owners, risks
of real estate development and acquisitions; governmental actions and
initiatives; and environmental/safety requirements. Financial Condition and Results of
Operations Registrant was organized for the purpose of
acquiring the Property subject to a net operating lease held by Lessee.
Registrant is required to pay, from Basic Rent under the Lease, mortgage charges
and amounts for supervisory services. Registrant is required to pay from
Additional Rent and Further Additional Rent the additional payment to Supervisor
and then to distribute the balance of such Additional Rent and Further
Additional Rent to the Participants. See Note C to the condensed financial
statements herein. Under the Lease, Lessee has assumed sole responsibility for
the condition, operation, repair, maintenance and management of the Property.
Registrant is not required to maintain substantial reserves or otherwise
maintain liquid assets to defray any operating expenses of the Property. Registrant does not pay dividends. During
the nine month period ended September 30, 2007, Registrant made regular monthly
distributions of $124.57 for each $10,000 participation ($1,494.89 per annum for
each $10,000 participation). There are no restrictions on Registrant's present
or future ability to make distributions; however, the amount of such
distributions, particularly distributions of Additional Rent and Further
Additional Rent, depends on the ability of Lessee to make payments of Basic
Rent, Additional Rent and Further Additional Rent to Registrant. Registrant
expects to make distributions so long as it receives the payments provided for
under the Lease. On November 30, 2007, Registrant made an
additional distribution of $12,209 for each $10,000 Participation. Such
distribution is derived from Further Additional Rent paid by the Lessee
subsequent to September 30, 2007 in accordance with the terms of the Lease after
deducting the Additional Payment to Supervisor, establishment of a cash reserve
for contingencies, annual New York State Limited Liability Company filing fee
and costs incurred in response to an unaffiliated third party tender offer. See
Notes C, E and F to the condensed financial statements herein. Registrant's results of operations are
affected primarily by the amount of rent payable to it under the Lease. The
amount of Additional Rent and Further Additional Rent payable to Registrant is
affected by the New York City economy and real estate rental market, which is
difficult for management to forecast. The following summarizes, with respect to
the current period and the corresponding period of the previous year, the
material factors regarding Registrant's results of operations for such
periods: Total revenues increased for the nine-month
period ended September 30, 2007 as compared with the nine-month period ended
September 30, 2006. Such increase is the result of an increase in Basic Rent
income to cover an increase in debt service, an increase in Further Additional
Rent and an increase in dividend income resulting from the short-term investment
of proceeds from the additional draws on the Mortgage for the nine-month period
ended September 30, 2007 as compared with the nine-month period ended September
30, 2006. Total expenses increased for the nine-month
period ended September 30, 2007 as compared with the nine-month period ended
September 30, 2006. Such increase was primarily attributable to an increase in
interest on the Mortgage payable by Registrant, an increase in the additional
payment to supervisor, depreciation of building improvements and equipment as a
result primarily of the improvement program, amortization of leasing commissions
and tender offer costs for the nine-month period ended September 30, 2007 as
compared with the nine-month period ended September 30, 2006. Liquidity and Capital Resources Registrant's liquidity has not
significantly changed at September 30, 2007 as compared with September 30, 2006. Costs relating
to the improvement program were funded from a portion of proceeds of the
Mortgage of $84,000,000, all of which has been drawn at September 30, 2007. The
Participants of Registrant and the members in Lessee have approved increased
refinancing of $16,000,000 from the total of $84,000,000 provided by the
Mortgage to up to $100,000,000. Registrant may from
time to time set cash aside for contingent liabilities. Amortization payments due under the
Mortgage commenced August 5, 2007, calculated on a 25-year amortization
schedule. The Mortgage matures on November 5, 2014. Registrant does not maintain
any reserve to cover the payments of such mortgage indebtedness at maturity.
Therefore, repayment of the Mortgage will depend on Registrant's ability to
arrange a refinancing. Assuming
that the Property continues to generate an annual net profit in future years
comparable to that in past years, and assuming further that current real estate
trends continue in the geographic area in which the Property is located,
Registrant anticipates that the value of the Property would be well in excess of
the amount of the mortgage balance at maturity. Registrant anticipates that funds for
working capital for the Property will be provided by rental payments received
from the Lessee and, to the extent necessary, from additional capital investment
by the members in Lessee and/or external financing. However, as noted above,
Registrant has no requirement to maintain substantial reserves to defray any
operating expenses of the Property. Registrant has the following contractual
obligations: Payments due by
period Less than More than Long-Term Debt Obligations $84,000,000 $1,663,118 $3,604,267 $4,009,560 $74,723,055 Capital Lease Obligations 0 0 0 0 0 Purchase Obligations 0 0 0 0 0 Other Long-Term Liabilities Reflected on the
Registrant's Balance Sheet 0 0 0 0 0 Total $84,000,000 $1,663,118 $3,604,267 $4,009,560 $74,723,055 Inflation Registrant believes that there has been no
material change in the impact of inflation on its operations since the filing of
its report on Form 10-K for the year ended December 31, 2006. Security Ownership As of September 30, 2007, the Members in
Registrant owned of record and beneficially an aggregate $25,833 of
participations in Registrant, representing 0.37% of the currently outstanding
participations therein. As of September 30, 2007, certain of the
Members in Registrant held additional participations in Registrant as
follows: Peter L. Malkin owned of record as trustee
or co-trustee an aggregate of $169,047 of participations. Peter L. Malkin
disclaims any beneficial ownership of such participations. Entities for the benefit of members of
Peter L. Malkin's family owned of record and beneficially $116,112 of
participations. Peter L. Malkin disclaims any beneficial ownership of such
participations, except that related family trusts or entities are required to
complete scheduled payments to him. Anthony E. Malkin owned of record as
co-trustee an aggregate of $25,000 of participations. Anthony E. Malkin
disclaims any beneficial ownership of such participations. Item 4T. Controls and Procedures.
PART II. OTHER INFORMATION Item 1. Legal Proceedings.
For the Three
Months
For the Nine Months
Ended September
30,
Ended September 30,
Contractual Obligations
Total
1 year
1-3 years
3-5 years
5 years
Wien & Malkin and Peter L. Malkin, a member in Registrant, were engaged in a proceeding with Lessee's former managing agent, Helmsley-Spear, Inc. commenced in 1997, concerning the management, leasing, and supervision of the property that is subject to the Lease to Lessee. In this connection, certain costs for legal and professional fees and other expenses have been paid and incurred by Wien & Malkin and Mr. Malkin, and certain costs for filings to terminate such proceeding may be incurred in the future. Wien & Malkin and Mr. Malkin have represented that such costs will be recovered only to the extent that (a) a competent tribunal authorizes payment or (b) an investor voluntarily agrees that his or her proportionate share be paid. Accordingly, Registrant's allocable share of such costs is as yet undetermined, and Registrant has not provided for the expense and related liability with respect to such costs in its financial statements. As a result of the August 29, 2006 settlement agreement, which included termination of this proceeding, Registrant will not recognize any gains or losses from this proceeding other than the possible charges for the aforementioned fees and expenses.
Item 6. Exhibits
The exhibits hereto are being incorporated by reference.
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.
The individual signing this report on behalf of Registrant is Attorney-in-Fact for Registrant and each of the Members in Registrant, pursuant to Powers of Attorney, dated October 9, 2003, October 22, 2003 and October 23, 2003 (collectively, the "Power").
60 EAST 42ND ST. ASSOCIATES L.L.C.
(Registrant)
By: /s/ Mark Labell
Mark Labell, Attorney-in-Fact*
Dated: January 22, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the undersigned as Attorney-in-Fact for each of the Members in Registrant, pursuant to the Power, on behalf of Registrant on the date indicated.
By: /s/ Mark Labell
Mark Labell, Attorney-in-Fact*
Dated: January 22, 2008
*Mr. Labell supervises accounting functions for Registrant.
EXHIBIT INDEX
Number |
Document |
Page* |
3 (a) |
Attached hereto as Exhibit 3 (c) is Registrant's Consent and Operating Agreement dated as of November 28, 2001 as a Limited Liability Company, which incorporates by reference the Registrant's prior Partnership Agreement, dated September 25, 1958, which was filed by letter dated March 31, 1981 (Commission File No. 0-2670) filed as Exhibit No. 1 to Registrant's Registraion Statement on Form S-1 as amended (the "Registration Statement"), and is itself incorporated by reference as an exhibit hereto. |
|
3 (b) |
Amended Business Certificate of Registrant filed with the Clerk of New York County on November 28, 1997, reflecting a change in the Partners of Registrant, was filed as Exhibit 3(b) to Registrant's 10-Q for the quarter ended March 31, 1998, and is incorporated by reference as an exhibit hereto. |
|
3 (c) |
Registrant's Consent and Operating Agreement dated as of November 28, 2001 |
|
3 (d) |
Certificate of Conversion of Registrant to a limited liability company dated November 28, 2001 filed with the New York Secretary of State on December 3, 2001. |
|
| ||
|
Document |
Page* |
24 |
Powers of Attorney dated October 9, 2003, October 22, 2003 and October 23, 2003 between Partners of Registrant and Mark Labell which is filed as Exhibit 24 to Registrant's 10-Q for the quarter ended September 30, 2003 and is incorporated by reference as an exhibit hereto. |
|
31.1 |
Certification of Mark Labell, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
31.2 |
Certification of Mark Labell, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
32.1 |
Certification of Mark Labell, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
32.2 |
Certification of Mark Labell, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
* Page references are based on sequential numbering system.
Exhibit 31.1
CERTIFICATIONS
I, Mark Labell, certify that:
Date: January 22, 2008
By /s/ Mark Labell
Name: Mark Labell
Title: Senior Vice President, Finance
Wien & Malkin LLC, Supervisor of 60 East 42nd St. Associates L.L.C.
Exhibit 31.2
CERTIFICATIONS
I, Mark Labell, certify that:
Date: January 22, 2008
By /s/ Mark Labell
Name: Mark Labell
Title:Senior Member of Financial/Accounting Staff
Wien & Malkin LLC, Supervisor of 60 East 42nd St. Associates L.L.C.
Exhibit 32.1
Certification Pursuant to 18 U.S.C., Section 1350 as adopted
Pursuant to Section 906
of Sarbanes - Oxley Act of 2002
The undersigned, Mark Labell, is signing this Chief Executive Officer certification as Senior Vice President, Finance of Wien & Malkin LLC, the supervisor* of 60 East 42nd St. Associates L.L.C. ("Registrant") to certify that:
September 30, 2007 (the "Report") fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
Dated: January 22, 2008
By /s/ Mark Labell
Mark Labell
Senior Vice President, Finance
Wien & Malkin LLC, Supervisor
*Registrant's organizational documents do not provide for a Chief Executive Officer or other officer with equivalent rights and duties. As described in the Report, Registrant is a limited liability company which is supervised by Wien & Malkin LLC. Accordingly, this Chief Executive Officer certification is being signed by a senior executive of Registrant's supervisor.
Exhibit 32.2
Certification Pursuant to 18 U.S.C., Section 1350 as adopted
Pursuant to Section 906
of Sarbanes - Oxley Act of 2002
The undersigned, Mark Labell, is signing this Chief Financial Officer certification as a senior member of the financial/accounting staff of Wien & Malkin LLC, the supervisor* of 60 East 42nd St. Associates L.L.C. ("Registrant"), to certify that:
September 30, 2007 (the "Report") fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
Dated: January 22, 2008
By /s/ Mark Labell
Mark Labell
Senior Vice President, Finance
Wien & Malkin LLC, Supervisor
*Registrant's organizational documents do not provide for a Chief Financial Officer or other officer with equivalent rights and duties. As described in the Report, Registrant is a limited liability company which is supervised by Wien & Malkin LLC. Accordingly, this Chief Financial Officer certification is being signed by a senior member of the financial/accounting staff of Registrant'
s supervisor. -----END PRIVACY-ENHANCED MESSAGE-----