<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the quarterly period ended DECEMBER 31, 1996
-------------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
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)
CALIFORNIA 13-3126150
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
50 ROCKEFELLER PLAZA, NEW YORK, NEW YORK 10020
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 492-1100
-----------------------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE NONE
- ------------------------------- --------------------------------------
- ------------------------------- --------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP UNITS
- --------------------------------------------------------------------------------
(Title of Class)
- --------------------------------------------------------------------------------
(Title of Class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of 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. [X]
Aggregate market value of the voting stock held by non-affiliates of
Registrant: There is no active market for Limited Partnership Units.
<PAGE> 2
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements:
The following financial statements are filed as a part of this Report:
Report of Independent Accountants.
Balance Sheets, December 31, 1995 and 1996.
Statements of Income, for the years ended December 31, 1994, 1995 and 1996.
Statements of Partners' Capital, for the years ended December 31, 1994, 1995
and 1996.
Statements of Cash Flows, for the years ended December 31, 1994, 1995 and
1996.
Notes to Financial Statements.
The financial statements are hereby incorporated by reference to pages 6 to
19 of Registrant's Annual Report contained in Appendix A.
(a) 2. Financial Statements of Material Properties:
Property in Port Washington, Wisconsin leased to Simplicity
Manufacturing, Inc.
Report of Independent Accountants.
Statements of Net Assets as of December 31, 1995 and 1996.
Statements of Operations and Changes in Net Assets, for the years ended
December 31, 1994, 1995 and 1996.
Statements of Cash Flows, for the years ended December 31, 1994, 1995 and
1996.
Notes to Financial Statements.
The financial statements of material properties are contained herewith in
Item 14 on pages 14 to 19.
12
<PAGE> 3
(a) 3. Financial Statement Schedule:
The following schedule is filed as a part of this Report:
Schedule III - Real Estate and Accumulated Depreciation as of December 31,
1996.
Notes to Schedule III.
Schedule III and notes thereto are hereby incorporated by reference to pages
20 to 22 of Registrant's Annual Report contained in Appendix A.
Financial Statement Schedules other than those listed above are
omitted because the required information is given in the Financial Statements,
including the Notes thereto, or because the conditions requiring their filing do
not exist.
-13-
<PAGE> 4
REPORT of INDEPENDENT ACCOUNTANTS
To the Partners of
Corporate Property Associates 4,
a California limited partnership
We have audited the accompanying statement of net assets of
Property in Port Washington, Wisconsin leased to Simplicity Manufacturing, Inc.,
as of December 31, 1995 and 1996, and the related statements of operations and
changes in net assets and cash flows for each of the three years in the period
ended December 31, 1996. These financial statements are the responsibility of
the General Partners. 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 audits
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 the General Partners, 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 net assets of Property in Port
Washington, Wisconsin leased to Simplicity Manufacturing, Inc., as of December
31, 1995 and 1996, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
New York, New York
June 12, 1997
- 14-
<PAGE> 5
CORPORATE PROPERTY ASSOCIATES 4,
a California limited partnership
STATEMENTS OF NET ASSETS of PROPERTY in
PORT WASHINGTON, WISCONSIN LEASED to
SIMPLICITY MANUFACTURING, INC.
(as described in Note 1)
December 31, 1995 and 1996
<TABLE>
<CAPTION>
1995 1996
----------- -----------
<S> <C> <C>
ASSETS:
Net investment in direct financing leases $12,000,000 $12,000,000
Deferred financing costs, net of accumulated
amortization of $171,798 in 1995
and $194,704 in 1996 57,262 34,356
Accrued rents receivable 166,392 166,392
----------- -----------
Total assets $12,223,654 $12,200,748
=========== ===========
LIABILITIES:
Mortgage notes payable $ 5,535,028 $ 5,031,101
Accrued interest payable 48,524 44,106
----------- -----------
Total liabilities 5,583,552 5,075,207
----------- -----------
NET ASSETS:
Net assets 6,640,102 7,125,541
----------- -----------
Total liabilities and
net assets $12,223,654 $12,200,748
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-15-
<PAGE> 6
CORPORATE PROPERTY ASSOCIATES 4,
a California limited partnership
STATEMENTS of OPERATIONS and CHANGES IN NET ASSETS
of PROPERTY in PORT WASHINGTON, WISCONSIN
LEASED to SIMPLICITY MANUFACTURING, INC.
For the years ended December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
1994 1995 1996
----------- ----------- -----------
<S> <C> <C> <C>
Revenues from leased property $ 1,996,710 $ 1,996,710 $ 1,996,710
----------- ----------- -----------
Property management fee 19,967 19,967 19,967
Other expenses 12,808
Amortization of deferred financing costs 22,906 22,906 22,906
Interest on mortgage 650,104 604,580 554,029
----------- ----------- -----------
692,977 647,453 609,710
----------- ----------- -----------
Excess of revenues over expenses 1,303,733 1,349,257 1,387,000
----------- ----------- -----------
Transfers to partnership (914,369) (914,370) (901,561)
Net assets, beginning of year 5,815,851 6,205,215 6,640,102
----------- ----------- -----------
Net assets, end of year $ 6,205,215 $ 6,640,102 $ 7,125,541
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-16-
<PAGE> 7
CORPORATE PROPERTY ASSOCIATES 4,
a California limited partnership
STATEMENTS of CASH FLOWS of
PROPERTY in PORT WASHINGTON, WISCONSIN
LEASED to SIMPLICITY MANUFACTURING, INC.
For the years ended December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
1994 1995 1996
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Excess of revenues over expenses $ 1,303,733 $ 1,349,257 $ 1,387,000
Adjustments to reconcile excess of revenues
over expenses to net cash provided by
operating activities:
Amortization 22,906 22,906 22,906
Decrease in accrued interest payable (3,584) (3,978) (4,418)
----------- ----------- -----------
Net cash provided by operating activities $ 1,323,055 $ 1,368,185 $ 1,405,488
=========== =========== ===========
Cash flows from financing activities:
Payments of mortgage principal $ (408,686) $ (453,815) $ (503,927)
Transfers to Partnership (914,369) (914,370) (901,561)
----------- ----------- -----------
Net cash used in financing activities $(1,323,055) $(1,368,185) $(1,405,488)
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-17-
<PAGE> 8
CORPORATE PROPERTY ASSOCIATES 4,
a California limited partnership
NOTES to FINANCIAL STATEMENTS of PROPERTY in
PORT WASHINGTON, WISCONSIN LEASED to
SIMPLICITY MANUFACTURING, INC.
1. Basis of Presentation:
Corporate Property Associates 4 (the "Partnership") is engaged in the net
leasing of industrial and commercial real estate. During 1983, the Partnership
entered into a direct financing lease with Simplicity Manufacturing, Inc.
("Simplicity") and the accompanying financial statements reflect the component
investment of the Partnership in the net assets and the related revenues and
expenses directly associated with such component lease investment.
Under the net lease agreement, Simplicity is responsible for all operating
expenses relating to the property, including property taxes, insurance,
maintenance, repairs, renewals and improvements. A property management fee of 1%
of revenues has been included in the financial statements as the property
management fee, payable to an affiliate, is required under the Partnership's
Amended Agreement of Partnership.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The recoverability of real estate assets, including residual interests, is
assessed based on projections of cash flows over the life of such assets. In the
event that such cash flows are insufficient, the assets are adjusted to their
estimated net realizable value.
2. Net Investment in Direct Financing Lease:
The lease has been accounted for under the direct financing method. A lease
accounted for under the direct financing method is recorded at its net
investment. Unearned income is deferred and amortized to income over the lease
term so as to produce a constant periodic rate of return on the Partnership's
net investment in the lease.
The net investment in the direct financing lease is summarized as follows:
<TABLE>
<CAPTION>
December 31,
------------
1995 1996
----------- -----------
<S> <C> <C>
Minimum lease payments
receivable $12,288,750 $10,593,750
Unguaranteed residual value 12,000,000 12,000,000
----------- -----------
24,288,750 22,593,750
Less: Unearned income 12,288,750 10,593,750
----------- -----------
$12,000,000 $12,000,000
=========== ===========
</TABLE>
Scheduled future minimum rents, exclusive of renewals, under the
noncancellable lease amount to $1,695,000 in each of the years 1997 through 2001
and aggregate $10,593,750 through March 2003 (See Note 5). Contingent rents were
$301,710 in each of the years 1994, 1995 and 1996.
-18-
<PAGE> 9
CORPORATE PROPERTY ASSOCIATES 4,
a California limited partnership
NOTES to FINANCIAL STATEMENTS of PROPERTY in
PORT WASHINGTON, WISCONSIN LEASED to
SIMPLICITY MANUFACTURING, INC., Continued
3. Mortgage Notes Payable:
The mortgage loan on the Simplicity property is a limited recourse
obligation and is collateralized by real property with a carrying value of
$12,000,000 and by an assignment of the lease. The mortgage note payable bears
interest at an annual rate of 10.52% and is scheduled to mature on July 1, 1998.
Scheduled principal payments are as follows:
<TABLE>
<CAPTION>
Year Ending December 31,
------------------------
<S> <C>
1997 $ 559,572
1998 4,471,529
----------
Total $5,031,101
==========
</TABLE>
Interest paid was $653,688, $608,558 and $558,447 in 1994, 1995 and 1996,
respectively. Management estimates that the fair value of the mortgage
approximates the carrying amount at December 31, 1996.
4. Subsequent Event:
On March 25, 1997, Simplicity notified the Partnership that it was
exercising its option to purchase the property on April 1, 1998. The option
price is the greater of $9,684,000 or fair market value, capped at $12,000,000.
-19-
<PAGE> 10
(a) 4. Exhibits:
The following exhibits are filed as part of this Report. Documents other
than those designated as being filed herewith are incorporated herein by
reference.
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ----------------------
<S> <C> <C>
3.1 Amended Agreement of Limited Partnership of Exhibit 3(B) to Regis-
Registrant dated as of September 30, 1982. tration Statement (Form
S-11) No. 2-79041
4.1 $4,500,000 Promissory Note dated December 30, Exhibit 4(B)(1) to Post-
1982 from Registrant to The Mutual Benefit Effective Amendment No. 1
Life Insurance Company. to Registration Statement
(Form S-11) No. 2-79041
4.2 Mortgage and Security Agreement dated Exhibit 4(B)(4) to Post-
December 30, 1982 between Registrant and Effective Amendment No. 1
The Mutual Benefit Life Insurance Company. to Registration Statement
(Form S-11) No. 2-79041
4.3 Assignment of Lessor's and Landlord's Exhibit 4(B)(5) to Post-
Interest in Leases, Rents and Profits Effective Amendment No. 1
dated December 30, 1982 from Registrant to Registration Statement
to The Mutual Benefit Life Insurance (Form S-11) No. 2-79041
Company.
4.4 $8,000,000 Promissory Note dated March 3, Exhibit 4.1 to Form 8-K
1983 from Registrant to Sunkist Service filed March 17, 1983
Company.
4.5 Mortgage with Assignment of Leases and Exhibit 4.3 to Form 8-K
Rents and Security Agreement dated as of filed March 17, 1983
March 3, 1983 from Registrant to Sunkist
Service Company.
4.6 Assignment of Lease and Rents dated Exhibit 4.4 to Form 8-K
March 3, 1983 from Registrant to Sunkist filed March 17, 1983
Service Company.
4.12 $3,800,000 Promissory Note dated July 1, Exhibit 4.1 to Form 8-K
1983 from Registrant to CP 4 Corp. dated July 14, 1983
4.13 Mortgage and Security Agreement dated Exhibit 4.2 to Form 8-K
July 1, 1983 from Registrant to CP 4 Corp. dated July 14, 1983
4.14 Assignment of Leases, Rents and Profits Exhibit 4.3 to Form 8-K
dated July 1, 1983 from Registrant to dated July 14, 1983
CP 4 Corp.
4.15 $2,750,000 Promissory Note dated Exhibit 4.1 to Form 8-K
August 11, 1983 from Registrant to FCA dated November 2, 1983
American Mortgage Corporation ("FCA").
4.16 Deed of Trust, Mortgage with Assignments of Leases Exhibit 4.2 to Form 8-K
and Rents and Security Agreements dated as of dated November 2, 1983
August 11, 1983 from Registrant to Harry M. Roberts, Jr.,
as trustee for FCA.
</TABLE>
-20-
<PAGE> 11
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ------------------
<S> <C> <C>
4.17 Assignment of Lease and Rents dated Exhibit 4.3 to Form 8-K
August 11, 1983 from Registrant to FCA. dated November 2, 1983
4.18 $4,300,000 Promissory Note dated Exhibit 4.4 to Form 8-K
October 17, 1983 from Registrant to dated November 2, 1983
Bankers Life Company ("Bankers").
4.19 Deed of Trust dated October 17, 1983 Exhibit 4.5 to Form 8-K
from Registrant to Howard T. Ayres, Jr., dated November 2, 1983
as trustee for Bankers.
4.20 Collateral Assignment of Lease and Exhibit 4.6 to Form 8-K
Agreement dated October 17, 1983 from dated November 2, 1983
Registrant, as assignor, ARC Automation
Services, Inc. ("ARC"), as lessee, and
American Express Insurance Services,
Inc. ("American Express"), as guarantor,
to Bankers, as assignee.
4.21 $3,500,000 Deed of Trust Note dated Exhibit 4.21 to Form 10-K
December 14, 1983 from Registrant to dated March 31, 1984
Mellon Bank, N.A. ("Mellon").
4.22 Deed of Trust and Security Agreement Exhibit 4.22 to Form 10-K
dated December 14, 1983 between dated March 31, 1984
Registrant and John H. Noblitt, as
trustee for Mellon.
4.23 Assignment of Rentals and Leases dated Exhibit 4.23 to Form 10-K
December 14, 1983 from Registrant to dated March 31, 1984
Mellon.
4.24 Agreement for Sale and Sale of Property and Exhibit 4.1 to Form 10-K
Escrow Instructions, dated October 17, 1986, dated November 6, 1986
by and between Registrant and CPA(R):3,
collectively as Seller, and Kraft, Inc.
("Kraft"), as Purchaser.
4.25 Agreement for Sale and Sale of Property and Exhibit 4.2 to Form 10-K
Escrow Instructions, dated October 17, 1986, dated November 6, 1986
by and between Registrant and CPA(R):3,
collectively as Seller, and Hughes Markets,
Inc. ("Hughes"), as Purchaser.
4.26 Letter Agreement dated October 17, 1986 from Exhibit 4.3 to Form 8-K
Registrant and CPA(R):3, and agreed to and dated November 6, 1986
accepted by Kraft and Hughes.
4.27 Guaranty made as of October 21, 1986 by Exhibit 4.4 to Form 8-K
Hughes, as Guarantor, to Registrant and dated November 6, 1986
CPA(R):3.
10.3 Real Estate Purchase Agreement dated Exhibit 10.1 to Form 8-K
January 19, 1983 between Allis-Chalmers filed March 17, 1983
Corporation, as seller and Gibson
Realty, Inc., as purchaser.
</TABLE>
-21-
<PAGE> 12
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
--- ----------- -------------------
<S> <C> <C>
10.4 Assignment of Real Estate Purchase Exhibit 10.2 to Form 8-K
Agreement dated March 3, 1983 from Gibson filed March 17, 1983
Realty, Inc., as assignor, to Registrant,
as assignee.
10.5 Lease Agreement dated March 3, 1983 Exhibit 10.3 to Form 8-K
between Registrant, as landlord, and filed March 17, 1983
Simplicity Manufacturing, Inc. as
tenant, for two properties in Port
Washington, Wisconsin.
10.6 Management Agreement between Registrant Exhibit 10(B) to Amendment
and Carey Corporate Property Management, No. 2 to Registration
Inc. Statement (Form S-11)
No. 2-79041
10.7 Support Agreement among Registrant, Exhibit 10(C) to Amendment
Fourth Carey Corporate Property, Inc. No. 2 Registration
and W.P. Carey & Co., Inc. Statement (Form S-11)
No. 2-79041
10.8 Lease Agreement dated June 1, 1983 between Exhibit 10.1 to Form 8-K
Registrant and CPA(R):3, as landlord, and dated June 22, 1983
Knudsen Corporation, as tenant.
10.9 Agreement dated June 1, 1983 between Exhibit 10.2 to Form 8-K
Registrant and CPA(R):3, as landlord, and dated June 22, 1983
Knudsen, as tenant.
10.11 Lease Agreement dated July 1, 1983 between Exhibit 10.1 to Form 8-K
Registrant, as landlord, and Broco, as dated July 14, 1983
tenant.
10.13 Lease Agreement dated October 17, 1983 Exhibit 10.2 to Form 8-K
between Registrant, as landlord, and dated November 2, 1983
ARC, as tenant.
10.15 Purchase Agreement dated February 23, 1983 Exhibit 10.15 to Form 10-K
between J.D.N. Enterprises, Inc. and dated March 31, 1984
Winn-Dixie Montgomery, Inc. ("Winn-Dixie").
10.16 Assignment of Purchase Agreement dated Exhibit 10.16 to Form 10-K
March 7, 1984 from Winn-Dixie to dated March 31, 1984
Registrant.
10.18 Lease Agreement dated March 7, 1984 Exhibit 10.18 to Form 10-K
between Registrant, as landlord, and dated March 31, 1984
Winn-Dixie, as tenant.
10.19 Lease Guaranty dated March 7, 1984 Exhibit 10.19 to Form 10-K
from Winn-Dixie, Stores, Inc. to dated March 31, 1984
Registrant.
10.20 Second Amendment of Lease entered into as of Exhibit 10.1 to Form 8-K
October 21, 1986, by and between Registrant dated November 6, 1986
and CPA(R):3, collectively as Landlord, and
Santee Dairies, Inc., as Tenant.
</TABLE>
-22-
<PAGE> 13
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- --------------------
<S> <C> <C>
10.21 Lease Agreement dated June 14, 1988 Exhibit 10.1 to Form 8-K
by and between Registrant and CPA(R);8, dated June 29, 1988
together, as Landlord, and Integra,
as Tenant.
28.1 Exchange and Conveyance of Property Deed Exhibit 28.1 to Form 8-K
dated June 14, 1988 from Integra, as dated June 29, 1988
Transferor, to Registrant, as Transferee.
28.2 Bill of Sale dated June 14, 1988 from Exhibit 28.2 to Form 8-K
Integra, as Seller, to Registrant and dated June 29, 1988
CPA(R):8, together, as Purchaser.
28.3 Seller/Lessee's Certificate dated June 14, Exhibit 28.3 to Form 8-K
1988 from Integra, as Seller, to Registrant dated June 29, 1988
and CPA(R):8, together, as Purchaser.
28.4 Prospectus of Registrant Exhibit 28.4 to Form 10-K/A
dated October 28, 1982. dated September 24, 1993
28.5 Supplement dated December 2, 1982 Exhibit 28.5 to Form 10-K/A
to Prospectus dated October 28, 1982. dated September 24, 1993
28.6 Supplement dated January 11, 1983 Exhibit 28.6 to Form 10-K/A
to Prospectus dated October 28, 1982. dated September 24, 1993
28.7 Supplement dated May 25, 1983 Exhibit 28.7 to Form 10-K/A
to Prospectus dated October 28, 1982. dated September 24, 1993
28.8 Press release dated June 30, 1993 Exhibit 28.1 to Form 8-K
announcing the suspension of secondary dated July 12, 1993
market sales of Limited Partnership Units.
</TABLE>
(b) Reports on Form 8-K
During the quarter ended December 31, 1996 the Registrant was not
required to file any reports on Form 8-K.
-23-
<PAGE> 14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
06/23/97 BY: /s/ Claude Fernandez
---------- ---------------------------
Date Claude Fernandez
Executive Vice President and
Chief Administrative Officer
(Principal Financial Officer)
-24-
