<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 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 0-11982
CORPORATE PROPERTY ASSOCIATES 4, A CALIFORNIA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
CALIFORNIA 13-3126150
(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)
</TABLE>
(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
<PAGE> 2
CORPORATE PROPERTY ASSOCIATES 4,
a California limited partnership
PART I
Item 1. - FINANCIAL INFORMATION
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, March 31,
1996 1997
----------- -----------
(Note) (Unaudited)
<S> <C> <C>
ASSETS:
Land and buildings, net of
accumulated depreciation of
$13,487,845 at December 31, 1996 and
$13,698,777 at March 31, 1997 $13,577,116 $13,366,184
Net investment in direct
financing leases 18,193,555 6,184,984
Real estate held for sale 12,000,000
Cash and cash equivalents 4,668,645 2,654,271
Other assets 1,628,031 2,126,702
Equity investment 3,999,632 3,965,239
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Total assets $42,066,979 $40,297,380
=========== ===========
LIABILITIES:
Mortgage notes payable $10,699,799 $ 8,074,656
Accrued interest payable 82,827 63,720
Accounts payable and accrued expenses 288,509 271,164
Accounts payable to affiliates 146,447 130,703
Prepaid rental income 46,800
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Total liabilities 11,264,382 8,540,243
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PARTNERS' CAPITAL:
General Partners 210,626 267,899
Limited Partners (85,528 Limited
Partnership Units issued and
outstanding at December 31, 1996
and March 31, 1997) 30,591,971 31,489,238
----------- -----------
Total partners' capital 30,802,597 31,757,137
----------- -----------
Total liabilities and
partners' capital $42,066,979 $40,297,380
=========== ===========
</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.
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CORPORATE PROPERTY ASSOCIATES 4,
a California limited partnership
STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1996 March 31, 1997
-------------- --------------
<S> <C> <C>
Revenues:
Rental income from operating leases $ 835,341 $1,636,624
Interest income from direct financing leases 828,134 826,794
Other interest income 95,356 51,852
Other income 186,395
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1,758,831 2,701,665
---------- ----------
Expenses:
Interest on mortgages 435,472 289,839
Depreciation 276,615 210,932
General and administrative 90,888 154,626
Property expenses 67,060 113,851
Amortization 25,767 7,759
---------- ----------
895,802 777,007
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Income before income from
equity investments 863,029 1,924,658
Income from equity investment 147,205
Earnings from hotel operation 432,793
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Net income $1,295,822 $2,071,863
========== ==========
Net income allocated to
General Partners $ 77,749 $ 124,312
========== ==========
Net income allocated to
Limited Partners $1,218,073 $1,947,551
========== ==========
Net income per Unit
(85,568 and 85,528
Limited Partnership
Units at March 31, 1996 and 1997) $ 14.24 $ 22.77
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 4
CORPORATE PROPERTY ASSOCIATES 4,
a California limited partnership
STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
1996 1997
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,295,822 $ 2,071,863
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 302,382 218,691
Scheduled rents in excess of (less than) income
on direct financing leases and straight-line
adjustments on operating leases 2,803 (352,650)
Net change in operating assets and liabilities (28,448) (244,205)
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Net cash provided by operating activities 1,572,559 1,693,699
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Cash flows from investing activities:
Additional capitalized costs (3,394)
Distributions from equity investment in excess of equity income 34,393
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Net cash (used in) provided by investing activities (3,394) 34,393
----------- -----------
Cash flows from financing activities:
Distributions to partners (1,109,563) (1,117,323)
Payments on mortgage principal (230,616) (220,143)
Prepayment of mortgage payable (2,405,000)
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Net cash used in financing activities (1,340,179) (3,742,466)
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Net increase (decrease) in cash and cash equivalents 228,986 (2,014,374)
Cash and cash equivalents, beginning of period 7,579,071 4,668,645
----------- -----------
Cash and cash equivalents, end of period $ 7,808,057 $ 2,654,271
=========== ===========
Supplemental disclosure of cash flows information:
Interest paid $ 438,686 $ 308,946
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
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CORPORATE PROPERTY ASSOCIATES 4,
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 (consisting of 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 three months ended March
31, 1997 are summarized as follows:
<TABLE>
<CAPTION>
Quarter Ended General Partners Limited Partners Per Limited Partner Unit
- ----------------- ---------------- ---------------- ------------------------
<S> <C> <C> <C>
December 31, 1996 $67,039 $1,050,284 $12.28
======= ========== ======
</TABLE>
A distribution of $12.29 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 $22,024 and $66,637 respectively, and general and
administrative expense reimbursements of $22,941 and $64,833 respectively,
payable to an affiliate. Management believes that ultimate payment of a
preferred return to the General Partners of $857,754, 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 $18,412 and $22,027 respectively.
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CORPORATE PROPERTY ASSOCIATES 4,
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 three-month periods ended March
31, 1996 and 1997, the Partnership earned its total lease revenues (rental
income plus interest income from financing leases) from the following lease
obligors:
<TABLE>
<CAPTION>
1996 % 1997 %
---- --- ---- ---
<S> <C> <C> <C> <C>
Hughes Markets, Inc. $ 378,797 23% $1,203,649 49%
Simplicity Manufacturing, Inc. 499,178 30 499,178 20
Brodart Co. 328,956 20 327,616 13
Continental Casualty Company 189,962 11 189,962 8
Family Dollar Stores, Inc. 136,800 8 140,400 6
Petrocon Engineering, Inc. 93,604 6 66,435 3
Winn-Dixie Stores, Inc. 36,178 2 36,178 1
---------- --- ---------- ---
$1,663,475 100% $2,463,418 100%
========== === ========== ===
</TABLE>
Note 5. Equity Investment:
The Partnership owns 427,008 limited partnership units in American General
Hospitality Operating Partnership, L.P., the operating partnership of American
General Hospitality Corporation ("AGH"), a publicly-traded real estate
investment trust. The Partnership's investment in the operating partnership is
accounted for under the equity method.
AGH's audited financial statements reported total assets of $243,115,000 and
shareholders' equity of $127,461,000 as of December 31, 1996 and, total revenues
of $13,496,000 and net income of $5,129,000 for the period from July 31, 1996
through December 31, 1996.
Note 6. Real Estate Held For Sale:
On March 25, 1997, Simplicity Manufacturing, Inc. ("Simplicity") notified the
Partnership that it was exercising its option to purchase the property it leases
from the Partnership in Port Washington, Wisconsin on April 1, 1998.
The option price will be the greater of $9,684,000 or fair market value, capped
at $12,000,000. An appraisal process to determine fair market value has
commenced.
After paying the limited recourse mortgage loan, the Partnership will realize
cash proceeds of up to $7,678,000 and no less than $5,362,000, before any
selling costs. Annual cash flow from the property (rent less mortgage debt
service on the property) is $934,000.
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CORPORATE PROPERTY ASSOCIATES 4,
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 4,
a California limited partnership
By: 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)
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