<PAGE> 1
Page 1 of 20
Exhibit Index on
Page 12 of 20
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended May 31, 1996 Commission File Number 0-9086
BANKERS BUILDING LAND TRUST
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Illinois 36-6067489
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
AMCORE Bank N.A., Rockford
501 Seventh Street
Rockford, Illinois, Trustee 61104
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 815-968-2241
------------
Securities registered pursuant to Section 12(g) of the Act:
5,000 Units representing beneficial interest in the Registrant.
Indicate by check mark if disclosure of delinquent files pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the 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.
Yes X No
----- -----
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
----- -----
1
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PART I
Item 1. Business
Registrant, Bankers Building Land Trust (the "Trust") is a trust organized
under the laws of the State of Illinois, which is engaged in the single
business activity of holding title to certain land at the southwest corner of
Clark and West Adams Streets in Chicago, Illinois, collecting rent under the
lease described below and disbursing the net proceeds. The Trust was formed
under a Trust Agreement and Declaration of Trust (the "Trust Agreement") dated
June 1, 1926 with the National Bank of the Republic of Chicago, as Trustee, and
will terminate upon the occurrence of certain conditions set forth in the Trust
Agreement. In 1933, Illinois National Bank and Trust Company (the "Bank"), 501
Seventh Street, P.O. Box 1537, Rockford, Illinois 61110-0037 (AMCORE Bank
N.A., Rockford after 1985) became Trustee of the Trust (the "Trustee") as a
result of the resignation of the original Trustee. AMCORE Bank N.A., Rockford
utilizes AMCORE Trust Company ("Trust Company") to perform its duties as
Trustee. The Trust has no employees but the Trust Company currently employs
132 persons.
The sole assets of the Trust (the "Trust Estate") are the above-mentioned land
and cash. The Bankers Building, a 41 story office building which was completed
in 1927, is situated on the land owned by the Trust. The land is subject to a
99 year lease commencing on June 1, 1926 and expiring on May 31, 2025 (the
"Lease").
The annual rental for the leased property is $275,000 payable in equal
quarterly installments to the Trustee on the first day of March, June,
September and December of each year, plus fees and expenses of the Trustee.
The current Lessee is LaSalle National Bank as Trustee of Trust Number 49371
dated August 25, 1975 (the "Lessee"). The Trustee understands that the
beneficiary of Trust Number 49371 is Bankers Building Realty Co., an Illinois
limited partnership (the "Partnership"). The general partner of the
Partnership is Wexton Building Management. The limited partners of the
Partnership are 105 Partners (an Illinois Partnership), Norman Liebold, and
Gary Felsher. The Trustee has no information regarding either the Partnership
or its general partners.
Beneficial interest in the Trust is divided into 5,000 equal units (the
"Units") which are represented by Bankers Building Land Trust Certificates
(the "Certificates"). Each owner of a Certificate (the "Certificate Holder")
is distributed quarterly a pro rata portion of the rentals, which the Trustee
understands have equaled $55 per unit per year since the inception of the
Trust, except as described in Item 11. However, this amount may be reduced by
expenses of the Trustee which are not reimbursed by the Lessee.
2
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Page 3 of 20
Item 2. Properties
The sole asset of the Trust (other than cash) is property consisting of a fee
interest, subject to a 99 year lease entered into on June 1, 1926 and expiring
on May 31, 2025, in the land under the Bankers Building at 105 West Adams
Street, Chicago, Illinois. The land has an area of approximately 22,300
square feet and is located at the southwest corner of Clark and West Adams
Streets in the central business district of the City of Chicago in an area
known as the Loop. The land is improved with a 420,000 square foot 41 story
brick and steel frame commercial office building built in 1926-27 as a
condition of the Lease.
The Lease was recorded in the Cook County deed records on July 12, 1926 with
the original Lessee, Adams Clark Building Corporation, assuming the obligation
to wreck the existing buildings on the premises and construct a new office
building at a cost of not less than $4,650,000. The original lessors were
Ernest M. Jackson and Carrie M. Jackson, who after assigning their interest to
the Trust on July 10, 1926, shortly thereafter sold the Certificates for an
amount which the Trustee understands to have been approximately $1,000 per
Unit. The current Lessee of the trust property is LaSalle National Bank, as
Trustee of Trust Number 49371 dated August 25, 1975, which obtained the
leasehold interest by an Assignment dated August 25, 1975. The Lease provided
for an option to purchase the property for $5,500,000 but the option expired on
June 1, 1976 unexercised. There are no further options outstanding.
Rents of $275,000 per year with no provision for increase (except that interest
of 7% per annum is assessed for late payments) are payable under the Lease
quarterly in advance on the first day of March, June, September and December.
The Lease requires the Lessee to pay all taxes, assessments and other fees and
expenses, incurred in connection with the land or building including reasonable
compensation and expenses of the Trustee that would act to diminish the annual
net income distribution of $275,000 to the Certificate Holders. In addition,
the Lease provides for a trustee of insurance who is responsible for collecting
premiums from the Lessee and purchasing insurance for the Bankers Building.
At the termination of the Lease either by default or expiration, the Trust will
become the owner of the building and the property will no longer be subject to
any lease. It is unclear what value, if any, the building might have in the
year 2025 when the Lease expires. It is possible that the building may become
unsuitable for rental purposes prior to the expiration of the Lease. As the
Bankers Building gets older and requires more maintenance or remodeling in
order to be suitable for tenant occupancy, the Lessee or any successor may be
unwilling to make the financial outlays necessary to attract tenants in view of
the reversion of the building to the Trust in the year 2025. Accordingly, the
Trust may find it necessary to sell the property to the Lessee, or to someone
who can combine the Trust's interest in the property and the Lessee's interest
in the building into an economically feasible unit. If such a sale occurs
prior to the expiration of the Lease, there will be a distribution of the sale
proceeds to the Certificate Holders and a termination of the Trust. Presently,
the Trustee is not actively seeking a purchaser of the Trust Estate, but that
could change depending on the release of the bankruptcy proceeding described in
Items 3 and 7.
3
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Item 3. Legal Proceedings
The Trustee has filed its Appearance in the bankruptcy proceeding initiated by
beneficiary of the Lessee. See Item 7 for additional information.
There are no other material pending legal proceedings to which the Trustee is
a party or of which the property in the Trust is the subject.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the fourth quarter of the 1996 fiscal year to a
vote of Security Holders.
PART II
Item 5. Market for the Registrant's Common Stock and Related Security Holder
Matters
The Trustee understands that there is no regular market for the Certificates
but that certain brokers have from time to time handled occasional transactions
in the Certificates. The price for the Units in transactions in which the
Trustee was aware of the sales price was approximately $810 to $870 in fiscal
year 1996 and $790 to $850 in fiscal year 1995.
As of May 31, 1996, the number of Certificate Holders of record was 459. (See
Item 1. Business for a description of the distribution to Certificate Holders
of the proceeds payable under the Lease.)
4
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Item 6. Selected Financial Data
This selected financial data should be read in conjunction with the financial
statements and related notes of Bankers Building Land Trust appearing elsewhere
herein.
<TABLE>
<CAPTION>
Year ended May 31,
----------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Operating revenues:
Rent $ 275,000 $ 275,000 $ 275,000 $ 275,000 $ 275,000
Servicing fees 7,950 7,950 7,950 7,950 7,948
---------- ---------- ---------- ---------- ----------
Total operating
revenues 282,950 282,950 282,950 282,950 282,948
---------- ---------- ---------- ---------- ----------
Operating expenses:
Trustee fees and
other expenses 27,950 7,950 27,950 7,950 7,948
---------- ---------- ---------- ---------- ----------
Total operating
expenses 27,950 7,950 27,950 7,950 7,948
---------- ---------- ---------- ---------- ----------
Net income $ 255,000 $ 275,000 $ 255,000 $ 275,000 $ 275,000
========== ========== ========== ========== ==========
Distributions to
certificate
holders $ 255,000 $ 275,000 $ 255,000 $ 275,000 $ 275,000
========== ========== ========== ========== ==========
Total assets
at year-end $4,399,995 $4,329,335 $4,329,575 $4,329,041 $4,338,619
========== ========== ========== ========== ==========
</TABLE>
5
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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Due to the passive nature of the Registrant's activities, which generally
include only the collection of rent and the disbursements of these proceeds
less expenses to the Certificate Holders of the Registrant, there has been no
material variation in the Registrant's financial condition or results of
operations, during the year ended May 31, 1996. However, as described in Item
3, the beneficiary of the Lessee of the land has declared bankruptcy. The
Trustee is not able to determine the impact of this action unless there is
an uncured default under the terms of the Lease. In the event of such default,
the Trust will become the owner of the building situated on the land.
Item 8. Index to Financial Statements and Schedules
Pages
-----
Independent Auditor's Report F-l
Financial Statements:
Balance Sheets as of May 31, 1996 and 1995 F-2
Statements of Operations and Retained Earnings
for the years ended May 31, 1996, 1993 and 1994 F-3
Statements of Cash Flows for the years ended
May 31, 1996, 1995 and 1994 F-4
Notes to Financial Statements F-5 - F-6
Report of Independent Accountants 1
All schedules are omitted because they are not applicable, are not required, or
the information is included in the financial statements or footnotes thereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
The Trust has not reappointed Coopers & Lybrand L.L.P. as its auditors due to
the integration of their Rockford office with their Chicago office. The Trust
decided to return to a local firm, McGladrey & Pullen, LLP, in order to control
cost.
6
<PAGE> 7
Page 7 of 20
PART III
Item 10. Directors and Executive Officers of the Registrant
The Trust has no directors or executive officers. The Trust Company
administers the Trust pursuant to a Trust Agreement which sets out the
responsibilities and duties of the Trustee. Such duties include, but are not
limited to, the following tasks: keeping the register of names of the
Certificate Holders, maintaining records showing receipts and disbursements of
the Trust, collecting rents and distributing income to the Certificate Holders
and other ministerial duties relating to the operation of the Trust. The
self-executing provisions of the Trust Agreement and the 99 year Lease, along
with the passive nature of the Trust, limits the involvement of the Trustee to
the above activities. However, in the event of a default by the Lessee, the
Trustee has the authority to take such action as is necessary and proper for
the best interests of the Trust with respect to managing, leasing, operating,
selling or otherwise disposing of the Trust Estate. The Trustee may in the
event of default terminate the Trust by transferring title to the Certificate
Holders for them to hold as tenants in common. In addition, the Trustee is
empowered upon such default to sell a portion of or the entire Trust Estate and
distribute ratably the net proceeds of such sale after deducting all necessary
expenses of the sale including reasonable compensation for the Trustee. If
the Trust is not terminated by other provisions in the Trust Agreement, the
Trust will terminate 21 years after the death of the last to die of the persons
specified in the Trust Agreement. As of January 1996, the Trustee was aware of
one individual specified in the Trust Agreement who was still living.
Although not required to do so, the Trustee may in its absolute discretion seek
the advice of the Certificate Holders. If a majority interest of the
Certificate Holders agree on a course of action that is not inconsistent with
express provisions of the Trust Agreement, the Trustee may, but is not
obligated to, effectuate such course of action.
The Bank is chartered as a national bank and, as such, the Bank and the Trust
Company are under the supervision of, and subject to regular examination by,
the Comptroller of the Currency and, in the case of the Trust Company only, the
State of Illinois. In addition, the Bank is subject to the rules and
regulations of the Federal Reserve Board and the Federal Deposit Insurance
Corporation. As of May 31, 1996, the assets and deposits of the Bank were
approximately $1,437,434,000 and $1,400,483,000, respectively. The Trust
Company had approximately 4,300 accounts and the market value of assets held in
accounts over which the Trust Company exercised investment discretion was
approximately $2,216,617,000 as of May 31, 1996. The Trust Company consists of
132 employees and officers. The principal persons in the Trust Company are:
Roger Reno, Chairman of the Board; Carl J. Dargene, Vice Chairman of the Board;
Alan W. Kennebeck, President, and Chief Executive Officer; Lee R. Mayer,
Secretary; Marvin R. Anderson, Treasurer, Senior Vice President and Controller;
Jay R. Maddox, Executive Vice President, Trust Officer; Lillie L. Rude,
Executive Vice President and Trust Officer.
7
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Page 8 of 20
Item 11. Executive Compensation
Unless paid by the Lessee, the Trustee is entitled to reasonable compensation
out of the gross rental proceeds payable under the Lease for its services and
management of the Trust and reimbursement for expenses reasonably incurred in
connection with the administration of the Trust. In the event the Trustee
renders extraordinary services to the Trust, it is entitled to additional
reasonable compensation from the same sources. Such amounts are payable from
the gross income or proceeds of the Trust Estate prior to distribution of the
net proceeds to the Certificate Holders. The Lease requires the Lessee to pay
the Trustee its compensation and any amount incurred in connection with the
Trust's administration which would otherwise be payable out of the gross income
of the Trust Estate and would act to reduce the net income of $55 per year per
Unit ($275,000/5,000 Units = $55) that was intended under the Lease for
distribution to the Certificate Holders. The current Trustee is not aware of
any period during which the Certificate Holders were entitled to receive their
distribution of $55 per annum per Certificate and received less than this
amount except for the years ended May 31, 1987, May 31, 1994, and May 31, 1996.
During 1987, the Trust incurred a $5,000 fee for an appraisal of the land
owned by the Trust. The distribution for 1987 was $54 per Certificate. During
1994, the Trust incurred a $20,000 legal fee. The distribution for 1994 was
$51 per certificate. During 1996, the Trust accrued $20,000 in legal fees.
The distribution for 1996 was $51 per certificate. Reduced distributions could
occur if the Lessee or any successor defaulted under the Lease and the Trustee
was unable to lease or sell the building and land or if the Lessee or any
successor refused to pay or reimburse the Trustee for expenses of the Trust.
As provided in the Lease, the Lessee is currently reimbursing the Trustee for
the costs associated with the reporting requirements of the Securities Exchange
Act of 1934, as amended.
The Lease requires the Lessee to pay rents quarterly in advance. Payment to
the Certificate Holders is not made until the first day of the following
quarter. The Trust Agreement does not obligate the Trustee to pay interest to
the Certificate Holders for the interest earned, if any, during the period in
which the Trustee has receipt of the rents but is not yet obligated to make
distributions to the Certificate Holders. Total trust fees were $7,950 for the
year ended May 31, 1996.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table lists the beneficial ownership of the Trust's certificates
of beneficial interest with respect to all persons known by the Trust as of May
31, 1996 to be beneficial owners of more than five percent of such
certificates.
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner Amount of Beneficial Interest Percent of Class
- ------------------------------------ ----------------------------- ----------------
<S> <C> <C>
Cede & Co. 2,668 53.36%
Box 222
Bowling Green Station
New York, NY 10004
Smith Barney Shearson 308 6.16%
388 Greenwich Street
New York, NY 10013
</TABLE>
8
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Page 9 of 20
Item 13. Certain Relationships and Related Transactions
See Item 12. above.
9
<PAGE> 10
Page 10 of 20
PART IV
Item 14. Exhibits, Financial Statements, Schedules, and Reports on Form 8-K
(a) See Item 8. Index to Financial Statements and Schedules on Page 6.
(b) See "Exhibit Index" on Page 11.
(c) During the second quarter, a report on Form 8-K was filed October 6, 1995
notifying the SEC of the bankruptcy of the lessee.
During the third quarter, a report on Form 8-K was filed December 19, 1995
notifying the SEC of unpaid real estate taxes. In addition, a report
on Form 8-K was filed February 16, 1996 notifying the SEC of the
subsequent payment of delinquent real estate taxes and possible
termination of the Lease.
During the fourth quarter, a report on Form 8-K was filed April 23, 1996
notifying the SEC of the suspension of the notice of Lease termination.
Subsequent to the year end, a report on Form 8-K was filed August 7, 1996
notifying the SEC of the change in accountants.
10
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Page 11 of 20
SIGNATURES
Pursuant to the requirements of Date August 21, 1995
------------------------
the Securities Exchange Act of Bankers Building Land Trust
-----------------------------
(Registrant)
1934, the Registrant has duly
AMCORE Bank N.A.,
caused this report to be signed By Rockford, Trustee
--------------------------
on its behalf by the undersigned, By /s/ Patricia N. Fong
--------------------------
Patricia N. Fong,
thereunto duly authorized. Assistant Vice President
and Trust Officer
11
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Page 11 of 20
SIGNATURES
Pursuant to the requirements of Date August 21, 1995
-----------------------
the Securities Exchange Act of Bankers Building Land Trust
----------------------------
(Registrant)
1934, the Registrant has duly
AMCORE Bank N.A.,
caused this report to be signed By Rockford, Trustee
-------------------------
on its behalf by the undersigned, By /s/ Patricia N. Fong
--------------------------
Patricia N. Fong,
thereunto duly authorized. Vice President
and Trust Officer
11
<PAGE> 13
Page 12 of 20
EXHIBIT INDEX
The following exhibits are filed with this Registration Statement:
4.01 Trust Agreement and Declaration of Trust dated June 1, 1926, naming the
National Bank of the Republic of Chicago as Trustee, (previously filed in
paper as Exhibit 1 to the Registrant's Form 10 Registration Statement, File
No. 0-9086, and incorporated herein by reference).
10.01 Indenture of Lease dated June 1, 1926, between Ernest A. Jackson and
Carrie M. Jackson and Adams Clark Building Corporation, (previously filed in
paper as Exhibit 2 to the Registrant's Form 10 Registration Statement, File
No. 0-9086, and incorporated herein by reference).
10.02 Trustee's deed dated June 27, 1933, from the National Bank of the
Republic of Chicago as Trustee, to the Illinois National Bank and Trust
Company, as Trustee, (previously filed in paper as Exhibit 3 to the
Registrant's Form 10 Registration Statement, File No. 0-9086, and incorporated
herein by reference).
12
<PAGE> 14
CONTENTS
- -----------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT F-1
- -----------------------------------------------------------------
FINANCIAL STATEMENTS
Balance sheets F-2
Statements of operations and retained earnings F-3
Statements of cash flows F-4
Notes to financial statements F-5 - F-6
- -----------------------------------------------------------------
<PAGE> 15
[MCGLADREY & PULLEN, LLP LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Trustee
Bankers Building Land Trust
Rockford, Illinois
We have audited the accompanying balance sheet of Bankers Building Land Trust
as of May 31, 1996, and the related statements of operations and retained
earnings, and cash flows for the year then ended. These financial statements
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit 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 management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the 1996 financial statements referred to above present fairly,
in all material respects, the financial position of Bankers Building Land Trust
as of May 31, 1996, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting
principles.
/s/ McGladrey & Pullen, LLP
Rockford, Illinois
July 19, 1996
F-1
<PAGE> 16
BANKERS BUILDING LAND TRUST
BALANCE SHEETS
MAY 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
- ------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Cash $ 149,995 $ 79,335
Land subject to operating lease 4,250,000 4,250,000
-----------------------------
TOTAL ASSETS $ 4,399,995 $ 4,329,335
=============================
LIABILITIES AND CERTIFICATE HOLDERS' EQUITY
Liabilities
Due to certificate holders $ 48,750 $ 73,013
Deferred rental income 68,750 -
Advance from lessee 11,995 5,822
Accrued legal fees 20,000 -
-----------------------------
TOTAL LIABILITIES 149,495 78,835
Certificate holders' equity
Certificates of beneficial interest
5,000 units issued and outstanding 4,250,000 4,250,000
Retained earnings 500 500
-----------------------------
TOTAL CERTIFICATE HOLDERS' EQUITY 4,250,500 4,250,500
-----------------------------
TOTAL LIABILITIES AND CERTIFICATE HOLDERS'
EQUITY $ 4,399,995 $ 4,329,335
=============================
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE> 17
BANKERS BUILDING LAND TRUST
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
YEARS ENDED MAY 31, 1996, 1995, AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues:
Rent $ 275,000 $ 275,000 $ 275,000
Servicing fees 7,950 7,950 7,950
------------------------------------------
Total operating revenues 282,950 282,950 282,950
Operating Expenses:
Trustee fees and other expenses 27,950 7,950 27,950
------------------------------------------
Net income 255,000 275,000 255,000
------------------------------------------
Retained earnings, beginning of year 500 500 500
Distributions to certificate holders 255,000 275,000 255,000
------------------------------------------
Retained earnings, end of year $ 500 $ 500 $ 500
==========================================
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE> 18
BANKERS BUILDING LAND TRUST
STATEMENTS OF CASH FLOWS
YEARS ENDED MAY 31, 1996, 1995, AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income $ 255,000 $ 275,000 $ 255,000
Adjustments to reconcile net income to
net cash provided by operating activities:
(Decrease) in due to certificate holders (24,263) (2,216) (586)
Increase in deferred rental income 68,750 - -
Increase in advance from lessee 6,173 1,976 1,120
Increase in accrued legal fees 20,000 - -
---------------------------------------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 325,660 274,760 255,534
---------------------------------------------
Cash Flows From Financing Activities
Distributions to certificate holders,
NET CASH (USED IN) FINANCING ACTIVITIES (255,000) (275,000) (255,000)
---------------------------------------------
NET INCREASE (DECREASE) IN CASH 70,660 (240) 534
Cash:
Beginning 79,335 79,575 79,041
---------------------------------------------
Ending $ 149,995 $ 79,335 $ 79,575
=============================================
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE> 19
BANKERS BUILDING LAND TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Note 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of business: Bankers Building Land Trust is a trust organized under the
laws of the State of Illinois which is engaged in the single business activity
of holding title to certain land in Chicago, Illinois, collecting rent from the
lease of the land and disbursing the net proceeds to the holders of
certificates of beneficial interest.
A summary of the Trust's significant accounting policies follows:
Accounting estimates: The preparation of financial statements requires
management to make estimates and assumptions that affect the reported amounts
in the financial statements and the accompanying notes. Actual results could
differ from those estimates.
Financial instruments: The Trust has no financial instruments for which the
carrying value differs materially from fair value.
Land valuations: The land has been valued at its cost to the parties that
established the Trust in 1926 based upon information obtained from the records
of the Cook County Recorder.
Deferred rental income: The Trust defers rental income received in advance of
the period for which the rent applies. This is amortized into income over the
rental period on a straight-line basis.
Reclassification: Certain items have been reclassified in the 1995 financial
statements to be consistent with the presentation of the 1996 financial
statements.
NOTE 2. LEASE
The Trust is the lessor of approximately 22,300 square feet of land located on
the southwest corner of Clark and West Adams Streets in the central business
district of the City of Chicago. The lease commenced on June 1, 1926 and
expires on May 31, 2025. The annual rental, payable in quarterly installments
for the leased property is $275,000 plus fees and expenses of the trustee.
The following is a schedule by years of minimum future rental income on the
lease as of May 31, 1996:
<TABLE>
<CAPTION>
Year Ending May 31:
- ---------------------
<S> <C>
1,997 $ 275,000
1,998 275,000
1,999 275,000
2,000 275,000
2,001 275,000
Thereafter 6,600,000
------------
Total minimum
future rentals $ 7,975,000
</TABLE> ============
F-5
<PAGE> 20
NOTE 2. LEASE (CONTINUED)
The lessee of the land has declared bankruptcy. The outcome of how these
bankruptcy proceedings will affect this lease cannot be determined, other
than that under the terms of the lease, the ownership of the building situated
on the land, in the event of default, will revert to the Trust.
NOTE 3. INCOME TAXES
The Trust is considered a partnership for income tax purposes. The Trust has
been deemed to have made an election out of the partnership's provisions of the
Internal Revenue Code. Therefore, no partnership income tax returns are filed
on behalf of the trust. Distributions to certificate holders are taxable to
the certificate holders, and reported by means of an information return.
Accordingly, no provision for income taxes has been made in the financial
statements.
F-6
<PAGE> 1
Exhibit 23
[COOPERS & LYBRAND L.L.P. LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustee
Bankers Building Land Trust
Rockford, Illinois
We have audited the accompanying balance sheet of Bankers Building Land Trust
as of May 31, 1995, and the related statements of operations and retained
earnings, and cash flows for each of the two years in the period ended May 31,
1995. These financial statements are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements 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 management, 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 Bankers Building Land Trust as
of May 31, 1995, and the results of its operations and its cash flows for each
of the two years in the period ended May 31, 1995, in conformity with generally
accepted accounting principles.
Coopers & Lybrand L.L.P.
Rockford, Illinois
June 22, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-1-1995
<PERIOD-END> MAY-1-1996
<EXCHANGE-RATE> 1
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0
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