<PAGE> 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 JUNE 30, 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 0-9174
---------------------------------------------------------
CORPORATE PROPERTY ASSOCIATES
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
CALIFORNIA 94-2572215
- -------------------------------------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
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)
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last report)
</TABLE>
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
<PAGE> 2
CORPORATE PROPERTY ASSOCIATES
(a California limited partnership)
PART I
Item 1. - FINANCIAL INFORMATION
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
------------- ------------
(Note) (Unaudited)
<S> <C> <C>
ASSETS:
Land and buildings, net of
accumulated depreciation of
$18,252,546 at December 31, 1996 and
$18,705,454 at June 30, 1997 $ 14,851,807 $ 14,398,899
Net investment in direct financing leases 4,660,571 4,669,898
Real estate held for sale 434,339 434,339
Cash and cash equivalents 864,889 741,871
Accrued interest and rents receivable 397,309 538,425
Other assets 1,017,079 1,012,349
------------ ------------
Total assets $ 22,225,994 $ 21,795,781
============ ============
LIABILITIES:
Mortgage notes payable $ 13,429,484 $ 12,591,452
Accrued interest payable 108,755 101,842
Accounts payable and accrued expenses 83,443 47,105
Prepaid rental income and security deposits 198,610 218,610
Accounts payable to affiliates 45,840 116,679
------------ ------------
Total liabilities 13,866,132 13,075,688
------------ ------------
PARTNERS' CAPITAL:
General Partners (95,847) (92,245)
Limited Partners (40,000 Limited
Partnership Units issued and
outstanding) 8,455,709 8,812,338
------------ ------------
Total partners' capital 8,359,862 8,720,093
------------ ------------
Total liabilities and
partners' capital $ 22,225,994 $ 21,795,781
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
Note: The balance sheet at December 31, 1996 has been derived from the
audited financial statements at that date.
-2-
<PAGE> 3
CORPORATE PROPERTY ASSOCIATES
(a California limited partnership)
STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, 1996 June 30, 1997 June 30, 1996 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income from
operating leases $ 1,007,779 $ 985,144 $2,015,106 $1,976,750
Interest from direct
financing leases 128,964 124,342 257,927 247,745
Other interest income 6,520 10,994 19,662 24,568
Other income 5,852
----------- ----------- ---------- ----------
1,143,263 1,120,480 2,292,695 2,254,915
----------- ----------- ---------- ----------
Expenses:
Interest on mortgages 331,183 269,488 686,898 517,560
Depreciation 240,626 189,995 510,100 452,908
General and
administrative 48,926 59,645 103,470 126,088
Property expense 54,276 22,297 68,305 41,364
Amortization 15,550 22,702 22,320 39,892
----------- ----------- ---------- ----------
690,561 564,127 1,391,093 1,177,812
----------- ----------- ---------- ----------
Income before extra-
ordinary item 452,702 556,353 901,602 1,077,103
Extraordinary charge on
extinguishment of debt (255,438) (255,438)
----------- ----------- ---------- ----------
Net income $ 197,264 $ 556,353 $ 646,164 $1,077,103
=========== =========== ========== ==========
Net income allocated
to General Partners $ 1,973 $ 5,563 $ 6,462 $ 10,771
=========== =========== ========== ==========
Net income allocated
to Limited Partners $ 195,291 $ 550,790 $ 639,702 $1,066,332
=========== =========== ========== ==========
Net income per Unit
(40,000 Limited
Partnership Units):
Income before extra-
ordinary charge $ 11.20 $ 13.77 $ 22.31 $ 26.66
Extraordinary charge (6.32) (6.32)
----------- ----------- ---------- ----------
$ 4.88 $ 13.77 $ 15.99 $ 26.66
=========== =========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-3-
<PAGE> 4
CORPORATE PROPERTY ASSOCIATES
(a California limited partnership)
STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------------------------
1996 1997
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 646,164 $ 1,077,103
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 532,420 492,800
Other noncash adjustments 213,298 (43,077)
Net change in operating assets and liabilities (18,163) (100,297)
----------- -----------
Net cash provided by operating activities 1,373,719 1,426,529
----------- -----------
Cash flows from financing activities:
Distributions to partners (707,475) (711,515)
Prepayment of mortgage payable (6,194,941)
Proceeds from mortgage note payable 6,400,000
Deferred financing costs (158,149)
Prepayment charges paid on extinguishment of debt (255,438)
Payments of mortgage principal (673,430) (838,032)
----------- -----------
Net cash used in financing activities (1,598,433) (1,549,547)
----------- -----------
Net decrease in cash and cash equivalents (215,714) (123,018)
Cash and cash equivalents, beginning of period 872,864 864,889
----------- -----------
Cash and cash equivalents, end of period $ 657,150 $ 741,871
=========== ===========
Supplemental disclosure of cash flows information:
Interest paid $ 760,933 $ 524,473
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-4-
<PAGE> 5
CORPORATE PROPERTY ASSOCIATES
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Note 1. Basis of Presentation:
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (including normal recurring
accruals) considered necessary for a fair presentation have been included. For
further information, refer to the financial statements and footnotes thereto
included in the Partnership's Annual Report on Form 10-K for the year ended
December 31, 1996.
Note 2. Distributions to Partners:
Distributions declared and paid to partners during the six months ended June 30,
1997 are summarized as follows:
<TABLE>
<CAPTION>
Quarter Ended General Partners Limited Partners Per Limited Partnership Unit
------------- ---------------- ---------------- ----------------------------
<S> <C> <C> <C>
December 31, 1996 $3,556 $352,000 $8.80
====== ======== =====
March 31, 1997 $3,559 $352,400 $8.81
====== ======== =====
</TABLE>
A distribution of $8.82 per Limited Partner Unit for the quarter ended June 30,
1997 was declared and paid in July 1997.
Note 3. Transactions with Related Parties:
For the three-month and six-month periods ended June 30, 1996, the Partnership
incurred property management fees of $14,219 and $24,375, respectively and
general and administrative expense reimbursements of $11,089 and $21,606,
respectively, payable to an affiliate. For the three-month and six-month periods
ended June 30, 1997, the Partnership incurred property management fees of
$14,395 and $30,644, respectively and general and administrative expense
reimbursements of $13,362 and $25,149, respectively, payable to an affiliate.
Management believes that ultimate payment of a preferred return to the General
Partners of $144,773, 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 six months ended June
30, 1996 and 1997 were $16,296 and $15,640, respectively.
-5-
<PAGE> 6
CORPORATE PROPERTY ASSOCIATES
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
Note 4. Industry Segment Information:
The Partnership's operations consist of the investment in and the leasing of
industrial and commercial real estate. For the six-month periods ended June 30,
1996 and 1997, the Partnership earned its total operating revenues (rental
income plus interest income from financing leases) from the following lease
obligors:
<TABLE>
<CAPTION>
1996 % 1997 %
---------- ---- ---------- ----
<S> <C> <C> <C> <C>
Prefinish Metals Incorporated $ 718,887 31% $ 725,643 33%
The Gap, Inc. 612,997 27 612,997 28
IMO Industries, Inc. 423,371 19 385,250 17
Unisource Worldwide, Inc. 164,740 7 165,679 7
Broomfield Tech Center Corporation 150,068 7 150,068 7
Kobacker Stores, Inc. 151,770 7 133,658 6
Winn-Dixie Stores, Inc. 51,200 2 51,200 2
---------- --- ---------- ---
$2,273,033 100% $2,224,495 100%
========== === ========== ===
</TABLE>
Note 5. Real Estate Held for Sale:
On September 17, 1996, the Partnership entered into a purchase and sale
agreement for the sale of the Partnership's property in Louisville, Kentucky,
leased to Winn-Dixie Stores, Inc. ("Winn-Dixie") for $1,100,000, less selling
costs, which include a 5% brokerage commission. The sales transaction is
scheduled to occur on August 11, 1997. The Winn-Dixie lease provides annual
rentals of $102,000 and is scheduled to expire in December 1999.
-6-
<PAGE> 7
CORPORATE PROPERTY ASSOCIATES
(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
(a California limited partnership)
By: W.P. CAREY & CO., INC.
09/03/97 By: /s/ Steven M. Berzin
-------- ----------------------------------
Date Steven M. Berzin
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
09/03/97 By: /s/ Claude Fernandez
-------- ----------------------------------
Date Claude Fernandez
Executive Vice President and
Chief Administrative Officer
(Principal Accounting Officer)
-7-
