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Total pages: 47
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 December 31, 1997
Commission file number 000-16757
CONCORD MILESTONE PLUS, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 52-1494615
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
150 EAST PALMETTO PARK ROAD, 4TH FLOOR
BOCA RATON, FLORIDA 33432
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (561) 394-9260
-------------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Class A Interests ("Class A Interests"), each such interest representing an
assignment of one Class A Limited Partnership Interest held by CMP Beneficial
Corp., a Delaware corporation (the "Assignor"), under the Amended and Restated
Agreement of Limited Partnership (the "Partnership Agreement") of Concord
Milestone Plus, L.P.
(Title of Class)
Class B Interests ("Class B Interests"), each such interest representing an
assignment of one Class B Limited Partnership Interest held by the Assignor
under the Partnership Agreement.
(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.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K 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
The Class A and Class B Interests are not traded on any established public
trading market.
DOCUMENTS INCORPORATED BY REFERENCE NONE
1
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PART I
Item 1. Business.
(a) General Development of Business.
Concord Milestone Plus, L.P. (the "Partnership") was organized
as a Delaware limited partnership on December 12, 1986 with CM Plus Corporation,
a Delaware corporation (the "General Partner"), as its general partner. The
General Partner is wholly owned by Concord Assets Group, Inc. ("Concord"). The
Partnership is engaged in the business of owning and operating three shopping
centers. CMP Beneficial Corp., a wholly owned subsidiary of Concord, was
organized under Delaware law in December 1986 for the sole purpose of holding
limited partnership interests in the Partnership for the benefit of holders of
the Class A Interests and Class B Interests and has engaged in no business
activities other than fulfilling its obligations under the Amended and Restated
Agreement of Limited Partnership of the Partnership (the "Partnership
Agreement").
(b) Industry Segment Information.
The Partnership has only one industry segment, commercial real
estate. See Item 8, "Financial Statements and Supplementary Data", of this
report for a summary of the Partnership's operations for the last three fiscal
years.
(c) Narrative Description of Business.
The Partnership was formed for the purpose of investing in
existing income-producing commercial and industrial real estate, such as
shopping centers, office buildings, free-standing commercial buildings,
warehouses and distribution centers. The Partnership currently owns and operates
three shopping centers, one located in Searcy, Arkansas (the "Searcy Property"),
one located in Valencia, California (the "Valencia Property") and one located in
Green Valley, Arizona (the "Green Valley Property").
The amount of revenues attributable to the Searcy Property, the
Valencia Property and the Green Valley Property (collectively, the "Properties")
from tenants not affiliated with the Partnership was (i) $457,514, $1,303,348
and $1,262,050, respectively, for the fiscal year ended December 31, 1997; (ii)
$409,186, $1,354,547 and $1,196,679, respectively, for the fiscal year ended
December 31, 1996; and (iii) $441,239, $1,388,592 and $1,204,137, respectively,
for the fiscal year ended December 31, 1995.
See Item 2, "Properties", of this Report for additional
information as to the Properties, including a description of the competitive
conditions affecting them.
1
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Employees
The Partnership employs six people at the Green Valley Property
and one person at the Searcy Property who provide general maintenance and
security services. Milestone Property Management, Inc., an affiliate of the
General Partner, provides all management services for the Partnership and is
reimbursed for its cost of administrative services provided to the Partnership,
including the pro rata cost of personnel. Aside from its officers, the General
Partner has no employees. See Item 11, "Compensation", of this Report.
Item 2. Properties.
The Properties consist of three shopping centers: the Searcy Property, the
Valencia Property and the Green Valley Property. For the purposes of this
section, the following is a glossary of terms:
a. Occupancy rate - The rate of the actual leased area (square
footage) to gross leaseable area (square footage) as of the
end of the fiscal year (December 31).
b. Leasable area - The area (square footage) for which rent can
be charged.
c. Average effective annual rental per square foot - The
average rental rate received per square foot of leased space
taking rental concessions and discounts into consideration.
d. Total rent - Minimum annual base rent plus percentage rental
revenue.
Refinancing of Bonds Payable
As of September 30, 1997, the Partnership, with the assistance
of Tri-Stone Mortgage Company, an affiliate of the General Partner, closed three
new fixed rate first mortgage loans (the "Mortgage Loans") from Westco Real
Estate Finance Corp. (the "Lender") in the amounts of $2,865,000, $8,445,000 and
$5,400,000, respectively. Tri-Stone Mortgage Company did not receive any
compensation for its services. All three Mortgage Loans are secured by first
mortgages on all three of the Properties. Prior to September 30, 1997, the
Properties were encumbered by mortgages granted by the Partnership to United
States Trust Company of New York, as trustee for the benefit of the holders of
the Partnership's Escalating Rate Collateralized Mortgage Bonds due November 30,
1997 (the "Bonds"). The Partnership used the proceeds of the Mortgage Loans and
available cash to redeem all of the outstanding Bonds. An aggregate of
$17,015,650 was paid to the holders of the Bonds in connection with such
redemption, of which $16,452,000 was applied to prepay the principal of the
Bonds and $563,650 was applied to pay interest accrued on the Bonds through the
redemption date.
2
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The Mortgage Loans and related terms at December 31, 1997 for
the Properties are summarized as follows:
Principal Monthly
Balance at Payments of
December Interest Principal
Property/Location 31, 1997 Rate % and Interest
- ----------------- -------------- ------ ------------
Searcy, AR $2,861,153 8.125 $21,640
Valencia, CA 8,429,458 8.125 65,881
Green Valley, AZ 5,392,963 8.250 41,252
--------- ------
Total $16,683,574 $128,773
========== =======
The Mortgage Loans require payments of principal and interest through
and including September 1, 2007. On October 1, 2007, the balance of principal
and interest is estimated to be $2,505,981, $7,003,227, and $4,738,096 for the
Searcy, Valencia and Green Valley Properties, respectively, and will be due and
payable. Subsequent to October 31, 2003 and prior to May 31, 2007, each Mortgage
Loan may be prepaid in whole but not in part on any payment date with a
prepayment penalty equal to the greater of (i) 1% of the outstanding principal
balance at such time, or (ii) the excess, if any, of the present value of the
remaining scheduled principal and interest payments (including any balloon
payment), discounted at the Discount Rate (as defined below), over the amount of
principal being prepaid. The Mortgage Loans may be prepaid without penalty on
any payment date after May 31, 2007. The Discount Rate is a rate determined as
of the week ending prior to the prepayment date and is based on the published
rates of U.S. Government securities having maturities approximating the maturity
date of the Mortgage Loans. The Mortgage Loans are each secured by first
mortgages on all three of the Partnership's Properties and a default under any
of the Mortgage Loans constitutes a default on all of the Mortgage Loans. Each
mortgage may be released at the Partnership's option after the corresponding
Mortgage Loan is fully paid provided that no event of default exists under any
of the Mortgage Loans, the mortgagee has not given the Partnership notice of any
event which, with the passage of time, would constitute an event of default, and
certain other conditions are satisfied.
In connection with the Green Valley Mortgage Loan, the Partnership has
deposited $150,000 into an escrow account (the "Green Valley Escrow Account")
with the Lender. The funds held in the Green Valley Escrow Account may be
released upon the execution of a new lease or renewal lease, with a termination
date of July 31, 2004 or later, by Abco, a tenant of the Green Valley Property
and the satisfaction of certain other conditions.
3
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In connection with the Valencia Mortgage Loan, the Partnership
deposited $45,000 into an escrow account (the "Valencia Escrow Account") with
the Lender. Such amount was released to the Partnership during February 1998
after a certain environmental condition existing at the Property was shown to
require no further action to the satisfaction of the State of California
Environmental Protection Agency Department of Toxic Substances Contract
("DOTSC"). The cost of the various tests, studies, legal representation and
negotiations with the DOTSC relating to the resolution of this environmental
problem was approximately $71,000, all of which was accrued and expensed during
1997.
CM Plus Corporation, the general partner of the Partnership, guarantees
certain limited recourse obligations under the Mortgage Loans.
The Searcy Property
Searcy, Arkansas
Location. The Searcy Property is situated on an irregularly shaped
parcel of approximately 10.78 acres, which has frontages on Race Avenue and
Front Street in the City of Searcy, Arkansas. Searcy, the county seat of White
County, is located in the central portion of the State of Arkansas,
approximately 50 miles northeast of Little Rock, Arkansas.
The Searcy Property is part of a larger shopping complex known as the
Town and Country Plaza. In addition to the Searcy Property, the Town and Country
Plaza consists of an approximately seven acre parcel (formerly the site of a
free-standing Wal-Mart department store) and five adjacent out parcels totaling
3.86 acres.
The Searcy Property is situated on the west side of Front Street, just
west of U.S. Route 64, 67 and 167, and the south side of State Route 36 (Race
Avenue). The Searcy Property is part of a two-mile stretch of commercial
development along Race Avenue that is the main shopping area for the city,
county and surrounding areas. Searcy's marketing area includes all of White
County and portions of surrounding counties. Town and Country Plaza comprises
the major portion of this main shopping area. Race Avenue is densely improved
with strip shopping centers, car dealerships, fast food franchises, motels,
restaurants, gas stations, banks, a hospital, a vocational-technical school and
free-standing commercial businesses.
Description. The Searcy Property, which was completed in July 1985, is
a one-story masonry and steel building whose exterior is painted concrete block
with masonry, brick and glass fronts. The Searcy Property contains 78,436 gross
leasable square feet divided into nine units. The entire Town and Country Plaza
has parking for 970 cars of which approximately 570 parking spaces are allocated
to the Searcy Property.
Operating and Tenant Information. As of March 4, 1998, there were eight
tenants (including two anchor tenants) and one vacancy at the Searcy Property.
The occupancy rate was 95.5%, 92.9% and 95.5% for 1997, 1996 and 1995,
respectively. The average effective annual rental per square foot was $5.57,
$5.24, and $5.33 for 1997, 1996, and 1995, respectively.
4
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The two anchor tenants, a J.C. Penney department store and a Stage
Store ("Stage"), occupy 10% or more of the gross leasable area of the Searcy
Property. J.C. Penney, a clothing and apparel department store, occupies 39,396
square feet or 50.2% of the gross leasable area of the Searcy Property. Stage, a
clothing and apparel store, occupies 15,600 square feet or 19.9% of the gross
leasable area of the Searcy Property. The principal provisions of the leases
with these anchor tenants are summarized below.
J.C. Penney operates its department store under a lease that commenced
October 2, 1985, as amended on November 5, 1996, and originally expired December
31, 2007, subject to eight five-year renewal options exercisable by J.C. Penney.
On November 5, 1996, the lease was amended, to allow for J.C. Penney's
expansion. Pursuant to the amendment, the expanded store opened for business on
September 1, 1997, thereby changing the expiration date to 10 years from the
expanded store opening date (August 31, 2007). The expansion includes 12,902
square feet of additional land, which includes 5,600 square feet of pad space
previously occupied by smaller tenants. In 1997, J.C. Penney built on the 7,302
square feet of unoccupied land. The additional annual base rent due to the
expansion was $40,000 and, as of January 1, 1997, the annual minimum base rent
increased to $205,600 ($5.21 per square foot). The lease provides for annual
percentage rent equal to 1.5% of the tenant's gross receipts in excess of
$11,820,004. The total rent received from J.C. Penney in 1997 was $205,600. In
addition, J.C. Penney is required to reimburse the Partnership (as an offset
against percentage rent) a pro rata share of any increases in real estate taxes
over the highest tax paid by the Partnership during any of the first three years
of operation. J.C. Penney is also required to reimburse the Partnership for
common area maintenance expenses in annual amounts per square foot of tenant
space as follows: $.20 for years 1-5, $.25 for years 6-10, $.30 for years 11-15,
$.35 for years 16-20 and $.50 during the option periods. J.C. Penney is required
to maintain comprehensive public liability insurance of not less than $1,000,000
per occurrence of bodily injury or death and not less than $100,000 per
occurrence for property damage.
J.C. Penney has the right to discontinue use of the premises as a J.C.
Penney retail store business, or sublet or assign the premises, at any time.
This right is subject to certain notice requirements and the Partnership's
option to cancel the lease. As long as the lease remains in effect after 30 days
of discontinued use, J.C. Penney must pay, in addition to the annual minimum
rent, additional rent equal to the average of the amounts paid as percentage
rent for each lease year during the period between the commencement of the lease
and the time when it discontinues use of the premises.
Stage has given notice of its intention to discontinue its operations
effective April 30, 1998. Stage will still be responsible for the basic minimum
rental and the average of the amounts actually received each lease year under
the provisions for contingent additional rentals including real estate taxes,
common area maintenance and insurance. The annual minimum rent is $81,900 ($5.25
per square foot). The total rent received from Stage in 1997 was $81,900.
5
<PAGE>
The other six tenants at the Searcy Property provide a variety of goods
and services, including furniture, family shoes, ladies apparel and jewelry.
These leases have varying lease terms ranging from 2 to 14 years and provide for
annual minimum rents aggregating $104,793 and ranging from $6.00 per square foot
to $9.00 per square foot (a weighted average of $7.54 per square foot). Most of
the leases contain provisions for additional rent calculated as a specified
percentage of the tenant's gross receipts above fixed minimum amounts and for
reimbursement of all or a portion of the tenant's pro rata share of real estate
taxes, insurance and common area maintenance expenses. One tenant leasing 1,560
square feet is on a month to month rental agreement.
The following table shows selected lease expiration information for the
Searcy Property (assuming no renewals or cancellations):
Gross % of Total
Year of Number of Leasable Annual Annual
Expiration Leases Area Minimum Minimum
of Lease Expiring (Sq.Ft.) Rent Rent
- ------------ --------- --------- ---------- ---------
1998 1 2,867 $24,513 6.3%
1999 2 4,800 28,800 7.3%
2000 1 5,973 (1) ---
2001 2 20,280 124,020 31.6%
2007 1 39,396 205,600 52.4%
Month to
Month 1 1,560 9,360 2.4%
Vacancies 3,560 --- ---
-- ------ --------- -------
Total 8 78,436 $392,293 100.0%
= ====== ========= ======
(1) This tenant currently pays 4% of gross sales in
lieu of all rental obligations
Real estate taxes on the Searcy Property are based on a tax rate
of 3.41% of assessed valuation. The current assessed valuation of the Searcy
Property is approximately $754,000 and real estate taxes for 1997 were
approximately $26,000. Real estate taxes are subject to increases in the future
that may result from reassessment and/or increases in the tax rate.
The Partnership's adjusted federal income tax basis for the
Searcy Property is approximately $3,207,000 of which $430,000 is allocated to
land and $2,777,000 to the building and improvements. For financial statement
purposes, the Partnership depreciates the cost of the building over 31.5 years
and improvements over 5 to 12 years using the straight-line method of cost
recovery. In the opinion of the General Partner, the Searcy Property is
adequately insured.
6
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Competition. There are three shopping centers within two miles
to the west of the Town and Country Plaza on Race Avenue. The first shopping
center consists of a Goody's department store and a Heilig-Meyers furniture
store. The second shopping center consists of a Fred's discount store, Warehouse
Foods, a Sears catalog store and two satellite stores. The third center consists
of a Kroger food store and a Revco drugstore. Directly across the street from
the Searcy Property is a Wal-Mart superstore. The Wal-Mart which relocated from
the Town and Country Plaza in 1992, has since vacated and subdivided its
superstore. Books-A-Million, Anthony's (owned by Stage), Hibetts Sports and TSC
Tractor Supply currently occupy this space.
Old Orchard Shopping Center
Valencia, California
Location. The Valencia Property is situated on an approximately
9.94-acre parcel that has frontages on Lyons Avenue and Orchard Village Road in
the town of Valencia, California. Valencia is located in the Santa Clarita
Valley in Los Angeles County, approximately 35 miles north of Los Angeles. Old
Orchard Shopping Center is located on the northwest corner of Lyons Avenue and
Orchard Village Road in a heavily developed commercial area. Lyons Avenue is
improved with shopping centers, fast food restaurants, housing developments and
free standing convenience stores. The surrounding area is densely populated with
apartments, condominiums and single family residences.
In 1996, a 78,000 square foot shopping center opened on Old
Orchard Street across from the Valencia Property. This center includes a 46,000
square foot Ralph's Supermarket, a 16,000 square foot drugstore and 16,000
square feet of smaller stores. This shopping center has had an adverse impact on
tenant sales but it has not materially adversely affected the occupancy rate at
the Valencia Property.
Description of the Property. Old Orchard Shopping center is an
eight building, one-story masonry and steel shopping center complex that was
originally constructed in 1965. During 1985 and 1986 the shopping center was
renovated and enlarged to 103,413 square feet of gross leasable area. The
exterior construction is pre-cast concrete, fluted block and decorative tile.
The shopping center has over 500 parking spaces.
Operating and Tenant Information. As of March 4, 1998 there were
20 tenants (including two anchor tenants) and three vacancies at the Valencia
Property. The occupancy rate was 93.9, 97.1%, and 100%, in 1997, 1996, and 1995,
respectively. The average effective annual rental per square foot was $11.43,
$11.98 and $11.65 for 1997, 1996, and 1995, respectively.
The two anchor tenants, Lucky Stores, Inc. ("Lucky Stores"), a
full service grocery store, and Rite Aid Pharmacy ("Rite Aid") (which purchased
Thrifty during 1997), a full service drug store, occupy 10% or more of the gross
leasable area of the Valencia Property. Lucky Stores occupies 31,842 square feet
or 30.8% of the gross leasable area of the Valencia Property. Thrifty occupies
18,125 square feet or 17.5% of the gross leasable area of the Valencia Property.
The principal provisions of the leases with these anchor tenants are summarized
below.
7
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Lucky Stores operates under a lease that commenced on July 1,
1986 and expires June 30, 2006, subject to four five-year renewal options
exercisable by Lucky Stores. The annual base rent is $300,000 per year ($9.42
per square foot). The lease also provides for percentage rent equal to 1.25% of
gross annual sales in excess of $38,000,000, less amounts paid by Lucky Stores
for property taxes and assessments and insurance premiums. The total rent
received from Lucky Stores in 1997 was $300,000. If the Valencia Property is
occupied or used for specified, prohibited purposes, the percentage used in
calculating percentage rent will be reduced to an amount not less than .625%.
Lucky Stores is required to reimburse the Partnership for a pro rata share of
real estate taxes, insurance and common area maintenance expenses (but Lucky
Stores' consent is required for any single expenditure regarding the
maintenance, insurance and lighting of the Property in excess of $5,000). Lucky
Stores has the right to assign or sublet the lease.
Rite Aid operates under a lease that commenced on March 25, 1965
and expires May 31, 2005, subject to four five-year renewal options exercisable
by Rite Aid. Rent is payable monthly in an amount equal to 3% of the tenant's
gross sales for the previous month, but not less than $45,000 annually. The
total rent received from Rite Aid in 1997 was $109,787. Rite Aid is not required
to reimburse the Partnership for any real estate taxes or operating expenses.
Rite Aid may not sublet or assign its space without prior written consent of the
Partnership, except to one of its affiliates.
The other 18 stores in the Old Orchard Shopping Center are
leased to tenants providing a variety of goods and services, including
automotive, fast food, gourmet food, apparel, banking, hardware, specialty
gifts, beauty supplies, dry cleaning and hairstyling. These leases have varying
lease terms ranging from 3 to 35 years and provide for annual minimum rents
aggregating $721,845 and ranging from $9.69 per square foot to $30.90 per square
foot (a weighted average of $15.31 per square foot). Many of the leases contain
provisions pursuant to which the Partnership is entitled to participate in
specified percentages of tenant's gross receipts above fixed minimum amounts and
to receive reimbursement for the tenant's pro rata share of operating expenses,
including real estate taxes, insurance and common area maintenance expenses. In
addition, many of the leases provide that after the lease expires the tenant may
continue to occupy the space subject to the existing lease, except that annual
minimum rent will increase by 25% to 50%.
The following table shows selected lease expiration and vacancy
information for the Valencia Property (assuming no renewals or cancellations):
8
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Gross % of Total
Year of Number of Leasable Annual Annual
Expiration Leases Area Minimum Minimum
of Lease Expiring (Sq.Ft.) Rent Rent
------------ ------------- --------- ---------- ---------
1998 5 11,752 $197,003 18.5%
1999 3 6,700 115,771 10.9%
2000 3 11,880 117,598 11.0%
2002 4 7,090 155,502 14.6%
2003 1 420 10,053 .9%
2005 3 27,429 170,910 16.0%
2006 1 31,842 300,000 28.1%
Vacancies - 6,300 -
--- -------- --------- -------
Total 20 103,413 $1,066,837 100.0%
== ======= ========= ======
The Valencia Property is subject to real estate taxes at the
rate of 1.44% of assessed valuation. The current assessed valuation of the
Valencia Property is $8,961,000 and the total tax for 1997 on the Valencia
Property was approximately $128,600. Real estate taxes are subject to increases
in the future that may result from reassessment and/or increases in the tax
rate.
The Partnership's adjusted federal income tax basis for the
Valencia Property is $11,102,000 of which $6,500,000 is allocated to land and
$4,602,000 is allocated to the buildings and improvements. For financial
statement purposes the Partnership depreciates the cost of the buildings over
31.5 years and improvements over 5 to 10 years using the straight-line method of
cost recovery. In the opinion of the General Partner, the Valencia Property is
adequately insured.
Competition. Within two miles of the Valencia Property there are
competing shopping facilities at Newhall Plaza with a Von's Food Store and 10
satellite stores, Granary Square with a Hughes Food Market, Long's Drugstore and
26 satellite stores, a Safeway Supermarket complimented by 14 satellite stores
and the Alpha Beta Center with Alpha Beta Food stores and 16 satellite stores.
In 1992, a strip center anchored by a Ralph's Foods opened within a mile of the
Valencia Property.
Green Valley Mall
Green Valley, Arizona
Location. The Green Valley Property, a mall complex known as the
Green Valley Mall, is situated on an approximately 21.31-acre parcel in the Town
of Green Valley, Arizona. It has frontages on Interstate 19 and Esperenza
Boulevard, with additional access from La Canada Road. Green Valley is a planned
adult community located in Pima County in the Santa Cruz River Valley
approximately 25 miles south of Tucson. Green Valley has two hotels and a number
of office buildings, several community centers and six 18 hole golf courses. The
Green Valley Property is located at intersection 65 of Interstate 19 and
Esperenza Boulevard and serves Pima County, as well as Santa Cruz County to the
south.
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Description of the Property. Green Valley Mall is an open-air
shopping complex originally built in the 1960's and expanded at various times
throughout the 1970's and 1980's. The shopping center is comprised of several
buildings, including some that are free standing, totaling 194,000 gross
leasable square feet (adjusted by 1,400 square feet representing the mall office
and maintenance space). The exterior construction is a combination of adobe
block, split face block and painted concrete block. The mall has approximately
975 parking spaces.
Operating and Tenant Information. As of March 4, 1998, there
were 73 tenants (including three anchor tenants) and 10 vacancies at the Green
Valley Property. The anchor tenants are an ABCO Supermarket (the only tenant
that occupies 10% or more of the gross leasable area of the Green Valley
Property), an Ace Hardware store, and Beall's Outlet. The occupancy rate was
89.3%, 90.2%, and 92.0%, for 1997, 1996, and 1995, respectively. The average
effective annual rental per square foot was $5.87, $5.52, and $5.25, for 1997,
1996, and 1995, respectively.
ABCO Supermarket occupies 38,983 square feet or approximately
20% of the gross leasable area of the Green Valley Property. The principal
provisions of the lease with this anchor tenant are summarized below.
ABCO Supermarket operates its store under a lease that expires
July 31, 1999, subject to five five-year renewal options exercisable by ABCO
Supermarket. The annual base rent is $68,060 ($1.75 per square foot). The lease
provides for annual percentage rent equal to 1% of annual gross sales in excess
of $4,000,000. The total rent received from ABCO Supermarket in 1997 was
$97,290. The tenant is required to reimburse the Partnership a pro rata share of
real estate taxes and common area maintenance expenses and is required to
maintain liability insurance of not less than $300,000 for personal injury or
death of any one person, $500,000 for injury or death of any number of persons
in any one incident, and $100,000 for damage to property resulting from any one
incident. ABCO Supermarket may not sublet the space or assign the lease without
the Partnership's consent.
The other 72 tenants in the mall provide a wide variety of
retail goods and services, including fast food, apparel, hairstyling, insurance,
books, specialty gifts, mortgage services, accounting, greenery, printing, and
banking. These leases have varying lease terms ranging from 1 to 25 years and
provide for payment of annual minimum rents aggregating $904,754 and ranging
from $.78 per square foot to $16.72 per square foot (a weighted average of
approximately $6.74 per square foot). Some of the leases contain provisions
pursuant to which the Partnership is entitled to participate in a specified
percentage of the tenant's gross receipts above fixed minimum amounts. Most of
the leases require the tenant to reimburse the Partnership for all or some
portion of the tenant's pro rata share of operating expenses including real
estate taxes, insurance and common area maintenance expenses.
The following table shows selected lease expiration (assuming no
renewals or cancellations) and vacancy information:
10
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Gross % of Total
Year of Number of Leasable Annual Annual
Expiration Leases Area Minimum Minimum
of Lease Expiring (Sq.Ft.) Rent Rent
------------ ------------- -------- --------- ---------
1998 20 28,906 $160,827 16.5%
1999 19 56,985 227,239 23.4%
2000 16 37,106 299,491 30.8%
2001 10 25,866 166,514 17.1%
2002 4 7,731 73,917 7.6%
2003 2 4,866 26,644 2.7%
Month to month 2 11,760 18,182 1.9%
Vacancies - 20,780 - -
--- ------ -------- -------
Total 73 194,000 $972,814 100.0%
== ======= ======= ======
Real estate taxes on the Green Valley Property are based on a
primary tax rate of 7.43% per $100 of assessed value and a secondary tax rate of
4.13% per $100 of assessed value. The Green Valley Property is currently
assessed at $1,390,000 for purposes of the primary rate and $1,757,000 for
purposes of the secondary rate. Real estate taxes for 1997 are approximately
$176,000. Real estate taxes are subject to increases in the future that may
result from reassessment and/or increases in the tax rate.
The Partnership's adjusted federal income tax basis for the
Green Valley Property is $9,525,000, of which $5,100,000 is allocated to land
and $4,425,000 to the buildings and improvements. For financial statement
purposes, the Partnership depreciates the cost of the buildings over 31.5 years
and improvements over 5 to 10 years using the straight-line method of cost
recovery. In the opinion of the General Partner, the Green Valley Property is
adequately insured.
In 1993 and 1994, the General Partner determined, based on the
current market conditions and projected future cash flows that the Partnership's
investment in the Green Valley Property was impaired and recorded a $1,000,000
and $1,085,932, non-cash charge against earnings to write-down the property,
respectively. In 1997, 1996 and 1995, the General Partner determined that an
additional write-down was not necessary based on the projected future cash flows
of the Property.
Competition. The Green Valley Property competes directly with
the 142,500 square foot Continental Shopping Plaza located at Continental Road
and Interstate 19 approximately one mile south of the Green Valley Property. The
Continental Shopping Plaza is anchored by a Safeway Supermarket. There is a
shopping center located 3 miles to the north of the Green Valley Property in the
newly incorporated town of Sahuarita. This shopping center includes a 65,000
square foot Wal-Mart Department Store and a 42,000 square foot Bashas' Food
Store as anchor tenants plus 25,000 square feet of space for local tenants.
Another center, which is located to the north of the
11
<PAGE>
Green Valley Property, was anchored by a 45,000 square foot Kmart and 10,000
square feet of space for local tenants, and closed during 1995. A quadruplex
theater is planned for the vacant Kmart to be opened in March of 1999. Since the
incorporation of this town, several large areas have been rezoned for commercial
development. One area located 2.5 miles north of Green Valley, called "The
Quorum", was actively developed within the last 18 months. New development
consists of a Full Service Gas Station/Dairy Queen with car wash, a new Holiday
Inn Express, Dorson's Furniture Store, Golf etc., Carpet One, a Bar & Grill, and
a Burger King which will open March of 1998.
Commitments and Contingencies
Investments in real property create a potential for
environmental liability on the part of the owner, operator or developer of such
real property. If hazardous substances are discovered on or emanating from any
of the Properties, the Partnership and/or others may be held strictly liable for
all costs and liabilities relating to the clean-up of such hazardous substances.
The Partnership is not aware of any other environmental conditions that will
have a material effect on the financial statements.
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
12
<PAGE>
PART II
Item 5. Market for Registrant's Units and Related Security Holders Matters.
(a) Class A and Class B Interests are not traded on any
established public trading market and no organized market has developed for the
interests in the Partnership. Sales of the Class A and Class B Interests occur
from time to time through independent broker-dealers, but to the best of the
Partnership's knowledge, there are no market makers for the interests. Recently
published information relating to other real estate limited partnerships (which
may not be analogous to the Partnership) indicates that sales of limited
partnership interests in those partnerships occur at substantial discounts from
the amounts of the original investments.
(b) As of March 4, 1998, 1,518,800 Class A Interests and
2,111,072 Class B Interests were held by approximately 1,363 and 1,460 holders,
respectively.
(c) The Partnership is a limited partnership and, accordingly,
does not pay dividends. It does, however, make quarterly distributions of cash
to its partners depending upon distributable cash flow and certain other
conditions. Such distributions were suspended subsequent to the first quarter of
1997 due to the cost of addressing an environmental issue identified at the
Valencia Property and payment of certain expenses.
Pursuant to the Partnership Agreement, distributable cash flow
(as defined) for each fiscal quarter is distributed as follows: (i) first, 99%
to the holders of the Class A Interests as a group and 1% to the General Partner
until the holders of the Class A Interests have received an amount of cumulative
distributions necessary to provide such holders with a non-compounded 10.5%
cumulative annual return (determined in accordance with the Partnership
Agreement); (ii) next, 90% to the holders of the Class A Interests and 10% to
the General Partner until the holders of the Class A Interests have received
distributions of distributable capital proceeds (i.e., net proceeds of a sale or
other disposition or a refinancing of Properties available for distribution) and
uninvested offering proceeds equal to $10.00 for each Class A Interest plus an
amount of cumulative distributions necessary to provide such holders with a
cumulative, non-compounded 12.5% annual return (determined in accordance with
the Partnership Agreement on their Adjusted Priority Base Amount as defined) (a
"12.5% Priority Return"); and (iii) thereafter, 85% to the holders of the Class
B Interests, 5% to the holders of the Class A Interests and 10% to the General
Partner.
Pursuant to the Partnership Agreement, distributable capital
proceeds are distributed as follows: (i) first, 100% to the holders of the Class
A Interests as a group until they have received distributions of distributable
capital proceeds and uninvested offering proceeds equal to $10.00 for each Class
A Interest plus an amount of cumulative distributions necessary to provide such
holders with a 12.5% Priority Return; and (ii) thereafter, 85% to the holders of
the Class B Interests and 15% to the General Partner.
13
<PAGE>
Distributable cash flow, as defined in the Partnership
Agreement, means, with respect to any period, (i) revenues and payments (which
do not include refundable deposits or unearned rent) of the Partnership received
in cash during such period, and reserves set aside out of revenues during prior
periods and no longer needed for the Partnership's business, but not including
cash proceeds attributable to a capital transaction (as defined), Bond proceeds
or capital contributions (as defined), less (ii) the sum of (A) amounts paid in
cash by the Partnership during such period for operating expenses of the
Partnership (excluding amounts paid from reserves or funds provided by capital
contributions or loans), for debt payments, and for compensation to a removed
General Partner and other fees or payments to the General Partner, (B) any
capital expenditures with respect to Properties, and (C) any amount set aside
for the restoration, increase or creation of reserves. Distributable cash flow
is deemed to include the amount of any income tax withheld with respect to
revenues that are includable in distributable cash flow.
During its two most recent fiscal years, the Partnership has
made the following cash distributions with respect to the Class A Interests:
Amount of Portion
Distribution Distribution Representing
With Respect Per 100 Class a Return of
To Quarter Ended: A Interests (1) Capital (2)
----------------- --------------- -------------
March 31, 1997 $3.29 $3.29
June 30, 1997 (3) $0 $0
September 30, 1997 (3) $0 $0
December 31, 1997 (3) $0 $0
March 31, 1996 $3.29 $3.29
June 30, 1996 $3.29 $3.29
September 30, 1996 $3.06 $3.06
December 31, 1996 $3.30 $3.30
- ---------------------------------
(1) The amounts listed represent distributions of distributable
cash flow.
(2) That portion of the total "Amount of Distribution per 100
Class A Interests" which is a return of capital. Return of
capital is defined as distributions in excess of cumulative
net income.
(3) The Partnership suspended making distributions subsequent to
the first quarter of 1997 due to cost of addressing an
environmental issue identified at the Valencia, Property,
and payment of certain expenses relative to the refinancing.
There have been no distributions with respect to the Class B Interests.
14
<PAGE>
In general, profits are allocated annually among the holders of
Class A Interests and Class B Interests and the General Partner, first in the
ratio and to the extent that they receive distributions of distributable cash
flow. Profits will next be allocated 100% to holders of Class A Interests until
their capital accounts equal the greater of zero or their Adjusted Priority Base
Amounts (as defined in the Partnership Agreement) plus their 12.5% Priority
Return. Any additional profits will be allocated to the holders of Class B
Interests and the General Partner to increase their capital accounts to reflect
the manner in which they are expected to share in further distributions.
Gain arising upon the sale of a Property or otherwise is
allocated first to holders of Class A Interests and Class B Interests and the
General Partner to eliminate any deficits in their capital accounts, and then to
the holders of the Class A Interests and Class B Interests and the General
Partner to increase their capital accounts to reflect the manner in which they
are expected to share in further distributions.
In general, losses are allocated first to the holders of Class B
Interests and the General Partner in the ratio and to the extent of any positive
balances in their capital accounts; then, to the holders of Class A Interests to
the extent of any positive balances in their capital accounts; and finally, 100%
to the General Partner.
Item 6. Selected Financial Data.
The following page sets forth a summary of the selected
financial information for the Partnership. The information below should be read
in conjunction with the audited financial statements.
Notes to Selected Financial Data Schedule:
(a) All income allocated with respect to Equity Units was
allocated with respect to the 100 Class A Interests in each such unit. No income
was allocated with respect to Class B Interests.
(b) The net (loss) income per 100 Class A Interests has been
calculated by dividing the net (loss) income for the period by the average
number of Class A Interests outstanding for the period and multiplying that
quotient by 100.
(c) Distributions have been allocated based upon the dates that
Class A Interests were issued. Distributions with respect to each fiscal quarter
of the Partnership are paid 60 days following the end of that fiscal quarter. No
distributions were paid with respect to Class B Interests.
(d) Return of Capital is defined as distributions in excess of
cumulative net income.
(e) The net losses for 1994 and 1993 include write-downs of
$1,085,932 and $1,000,000, respectively, for impairment of the Green Valley
Property.
15
<PAGE>
CONCORD MILESTONE PLUS, L.P.
(A Limited Partnership)
Selected Financial Data
<TABLE>
<CAPTION>
For Years Ended December31,
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ -----------------
<S> ..................................... <C> <C> <C> <C> <C>
Operating Statement Data:
Revenue .................................$ 3,046,796 $ 3,009,663 $ 3,061,279 $ 3,156,657 $ 3,106,835
Net loss ................................ (271,920) (238,119) (307,810) (1,317,075)(e) (1,225,028)(e)
Balance Sheet Data:
Total assets ............................ 22,051,864 22,086,775 22,537,617 23,005,298 24,386,240
Long term debt .......................... 16,683,574 16,473,060 16,425,967 16,334,737 16,217,540
Total liabilities ....................... 17,216,080 16,877,282 16,893,481 16,853,645 16,717,506
Statement of Partners' (Deficit) Capital:
General Partner .................... (74,207) (70,470) (66,124) (61,049) (45,878)
Class A Interests .................. 4,909,991 5,279,963 5,710,260 6,212,702 7,714,612
Class B Interests .................. 0 0 0 0 0
Total .............................. 4,835,784 5,209,493 5,644,136 6,151,653 7,668,734
Per 100 Class A Interests (a):
Net loss (b): ...................... (17.90) (15.68) (20.27) (86.72) (80.66)
Distributions (c): ................. 3.29 12.94 13.15 13.04 29.34
Return of Capital (d): ............. 3.29 12.94 13.15 13.04 29.34
</TABLE>
See Notes to Selected Financial Data
16
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General
The Partnership commenced a public offering of Equity Units and
Bond Units (together, "Units") on April 8, 1987 in order to fund the
Partnership's real property acquisitions. The Partnership terminated the public
offering of Units on April 2, 1988. On April 14, 1988, the Partnership held its
final closing on the sale of Units. The Partnership was fully subscribed to with
a total of 16,452 Bond Units and 15,188 Equity Units from which the Partnership
received aggregate net proceeds (after deduction of sales commissions, discounts
and selling agent's expense otherwise required to be reimbursed to the General
Partner and its Affiliates) of $29,285,960. Of such total amounts, 15,954 Bond
Units and 15,188 Equity Units were sold by the Partnership during 1988 from
which the Partnership received net proceeds (after deduction of sales
commissions, discounts and selling agent's expense allowance and credit for
organization and offering expenses) of $19,599,176. The Partnership purchased
three shopping centers with the proceeds from this offering. No further
acquisitions are planned and the Partnership has no plans to raise additional
capital.
On September 30, 1997, the Partnership closed three new fixed
rate first mortgage loans in the amounts of $2,865,000, $8,445,000 and
$5,400,000, respectively. All three Mortgage Loans are secured by first
mortgages on the Searcy Property, the Valencia Property, and the Green Valley
Property. The Partnership used the proceeds of the Mortgage Loans and available
cash to redeem all of the outstanding Bonds. The Mortgage Loans are described in
further detail in Item 2.
Properties Section.
The Partnership has an agreement with Milestone Property
Management, Inc. ("MPMI"), an affiliate of the General Partner, to provide
management services to the Properties. In addition, MPMI is responsible for
leasing space at the properties and actively monitors all vacancies to ensure
the highest occupancy rate possible. All leasing is performed by MPMI and the
terms of the leases are negotiated on a lease by lease basis.
Year 2000 Compliance
The Partnership has and will continue to make certain
investments in its software systems and applications to ensure that the
Partnership is year 2000 compliant. It is anticipated that the project will be
completed by internal staff without significant contributions from outside
contractors. Management believes that the financial impact to the Partnership of
ensuring its year 2000 compliance has not been and is not anticipated to be
material to the Partnership's financial position or results of operations.
17
<PAGE>
Changes in Competitive Conditions
Searcy Property
The Searcy Property has experienced a revitalization over the
past three years after the Partnership found it necessary to negotiate rent
reductions to prevent vacancies in 1994.
On September 1, 1997, the J.C. Penney expansion was completed
and the new expanded store opened for business. The expansion increased their
existing space by 12,902 square feet. The General Partner believes the 1997
expansion has had a positive effect on the center and should increase the
traffic for the other tenants. The subdivision and leasing of the former
Wal-Mart superstore has had both a positive and negative effect on the center.
Books-A-Million, Hibetts Sports, TSC Tractor and Anthony's (owned by Stage)
currently occupy this space. The General Partner believes these new stores,
especially the bookstore, will continue to be an excellent draw to the center.
However, effective April 30, 1998, Stage will vacate its store primarily due to
their purchase of Anthony's. Stage, which occupies 15,600 square feet, continues
to be obligated under its lease until August 2001; therefore cash flows from the
property is not expected to be materially affected until such lease expires.
Valencia Property
The Valencia Property has a number of competing shopping
facilities within the immediate area. In the spring of 1996, a 78,000 square
foot shopping center opened on Old Orchard Street across from the Valencia
Property. This center includes a 46,000 square foot Ralph's Supermarket, a
16,000 square foot drugstore and 16,000 square feet of smaller stores. This
shopping center had an adverse impact on tenant sales as evidenced by a drop in
percentage rent revenue in 1997 but it has not materially adversely affected the
occupancy rate at the Valencia Property.
Green Valley Property
Strong competition in the surrounding areas caused the General
Partner to make capital improvements (such as canopies, painting, new signage
and general appearance) at the Green Valley Property. Although occupancy has
been down slightly over the past three years, the average effective annual
rental per square foot has increased over the same period. Continued development
of both commercial and residential areas is expected in the Green Valley area.
The General Partner believes it will have continued success in negotiating lease
renewals and bringing new tenants into the center.
18
<PAGE>
In 1993 and 1994, the General Partner determined, based on the
current market conditions and projected future cash flows, that the
Partnership's investment in the Green Valley Property was impaired and recorded
a $1,000,000 and $1,085,932, non-cash charge against earnings to write-down the
property, respectively. During 1997, 1996 and 1995, the General Partner
determined that an additional write-down was not necessary based on the
projected future cash flows of the Property.
Results of Operations
Comparison of Year Ended December 31, 1997 to 1996.
Revenues of the Partnership increased $37,133, or 1.23%, to
$3,046,796 in 1997 from $3,009,663 in 1996 primarily due to the net effect of
the following:
(1) Rent - A decrease in base rent of $40,230, or 1.56%, to $2,543,384 in 1997
from $2,583,614 in 1996 primarily due to a decrease in percentage rent
revenue at the Valencia Property due to decreased tenant sales and a drop
in the occupancy rate to 93.9% in 1997 from 97.1% in 1996.
(2) Reimbursed Expenses - An increase in reimbursed expenses of $71,869, or
17.73%, to $477,312 in 1997 from $405,443 in 1996 primarily due to
increased recovery percentages on both common area expenses and real estate
taxes. Additionally, refunds given to tenants in 1996, due to an incorrect
billing in a prior year, were charged to revenue in 1996.
(3) Other Income - An increase in other income of $5,494 primarily due to
transfer fees paid by an investor in 1997.
Management and property expenses remained consistent, increasing
only $13,846, or 1.72% to $816,817 from $802,971 in 1996, due to concerted
efforts by management to contain costs at the Properties.
Professional fees and other expenses increased $77,674, or
74.45%, to $181,998 in 1997 from $104,324 in 1996, primarily due to the costs
associated with the investigation and subsequent resolution of chemical
contamination in the soil at a site at the Valencia Property.
Interest expense increased $32,967, or 2.10%, to $1,602,762 in
1997 from $1,569,795 in 1996 primarily due to the scheduled increase in the
interest rate on the Bonds from 9.50% in 1996 to 10.0% in 1997.
Depreciation and amortization expense decreased $54,271, or
8.50%, to $584,414 in 1997 from $638,685 in 1996, primarily due to a decrease in
amortization of net bond premium and discount in 1997.
19
<PAGE>
Comparison of Year Ended December 31, 1996 to 1995.
Revenues of the Partnership decreased $51,616, or 1.69%, to
$3,009,663 in 1996 from $3,061,279 in 1995 primarily due to the net effect of
the following:
(1) Rent - An increase of $10,107, or 0.39%, to $2,583,614 in 1996 from
$2,573,507 in 1995. Rent increased due to the net effect of a large new
tenant at the Valencia Property increasing rental revenue; a decrease in
rents due to a drop in the occupancy at the Searcy Property; and a decrease
in tenant sales at the Valencia Property, which decreased percentage rents.
(2) Reimbursed Expenses - A decrease of $50,103, or 11.00%, to $405,443 in 1996
from $455,546 in 1995. Reimbursed expenses decreased due to lower
reimbursed sales tax income due to a decline in the sales tax rate from 2%
to 1% at the Green Valley Property; and refunds given to tenants in 1996
due to an incorrect billing in a prior year which were charged to revenue
in 1996.
(3) Other Income - A decrease in other income of $11,620 primarily due to
reduced interest income on lower average cash balances in 1996 than in
1995.
Management and property expenses decreased $100,715, or 11.14%,
to $802,971 in 1996 from $903,686 in 1995 primarily due to the net effect of the
following:
(1) Searcy Property - A decrease in management and property expenses at the
Searcy Property of $5,517, or 6.88%, to $74,516 in 1996 from $80,233 in
1995. Management and property expenses declined in 1996 primarily as a
result of a general decrease in operating expenses in 1996.
(2) Valencia Property - A decrease in management and property expenses at the
Valencia Property of $29,497, or 11.91%, to $218,095 in 1996 from $247,592
in 1995. Management and property expenses declined in 1996 primarily due to
a decrease in insurance expense of approximately $18,000 due to a lower
premium in 1996.
(3) Green Valley Property - A decrease in management and property expenses at
the Green Valley Property of $65,701, or 11.41%, to $510,160 in 1996 from
$575,861 in 1995. Management and property expenses declined in 1996
primarily due to (1) a decrease in sales tax expense of approximately
$12,000 due to a decrease in the tax rate to 1% in 1996 from 2% in 1995,
(2) a decrease in repairs and maintenance of approximately $23,000 and (3)
a decrease in insurance expense of approximately $14,000 due to a lower
premium in 1996.
20
<PAGE>
Professional fees and other expenses decreased $37,272, or
26.32%, to $104,324 in 1996 from $141,596 in 1995 primarily due to the net
effect of (1) a decrease in legal fees of approximately $51,000 due to the
settlement in 1995 of a civil rights suit brought against it by a former
employee, and (2) an increase in accounting fees of approximately $10,000 due to
an increase in audit fees in 1996.
Interest expense increased $44,557, or 2.92%, to $1,569,795 in
1996 from $1,525,238 in 1995 primarily due to the scheduled increase in the
interest rate on the Bonds from 9.50% in 1995 to 10.0% in 1996.
Depreciation and amortization expense decreased $18,525, or
2.82%, to 638,685 in 1996 from $657,210 in 1995 primarily due to the net effect
of (1) an increase in depreciation expense of approximately $27,000 due to
building improvement expenditures in 1996, and (2) a decrease in amortization
expense of approximately $46,000 due to a decrease in the amortization of the
net bond premium and discount in 1996.
Liquidity and Capital Resources
The General Partner believes that the Partnership's expected
revenue and working capital is sufficient to meet the Partnership's current
operating requirements for the remainder of the year. Nevertheless, because the
cash revenues and expenses of the Partnership will depend on future facts and
circumstances relating to the Partnership's properties, as well as market and
other conditions beyond the control of the Partnership, a possibility exists
that cash flow deficiencies may occur. Currently, a significant amount of the
Partnership's working capital is still in the control of the Lender as funds
held in escrow pending resolution of certain circumstances even though $45,000
deposited into an escrow account was released during February 1998 as certain
environmental improvements to the Valencia Property were satisfactorily
completed and approved by the State of California Environmental Protection
Agency. There are currently no material commitments for capital expenditures.
The Partnership suspended making distributions subsequent to the
first quarter of 1997 due to the cost of addressing an environmental issue
identified at the Valencia Property and payment of certain expenses relative to
the refinancing. However, future debt service payments on the Mortgage Loans
will be approximately $100,000 lower per year than the annualized 1997 scheduled
payments on the redeemed Bonds. The Partnership is anticipating resuming
distributions as soon as the Partnership's working capital requirements are
funded.
Management is not aware of any other trends, events, commitments
or uncertainties that will or are likely to materially impact the Partnership's
liquidity.
Net cash provided by operating activities of $479,718 for the
year ended December 31, 1997 was comprised of (i) net loss of $271,920, (ii)
adjustments of $584,414 for depreciation and amortization and (iii) a net change
in operating assets and liabilities of $167,224.
21
<PAGE>
Net cash provided by operating activities of $414,368 for the
year ended December 31, 1996 was comprised of (i) net loss of $238,119, (ii)
adjustment of $638,685 for depreciation and amortization, and (iii) a net change
in operating assets and liability of $13,802.
Net cash used in investing activities of $94,486 for the year
ended December 31, 1997 was comprised of capital expenditures for building
improvements.
Net cash used in investing activities of $110,596 for the year
ended December 31, 1996 was comprised of capital expenditures for building
improvements and other assets at all three properties.
Net cash used in financing activities of $453,447 for the year
ended December 31, 1997 included (i) redemption of Bonds payable of $16,452,000,
(ii) funds held in escrow of $269,895, (iii) debt financing costs of $313,337,
(iv) proceeds from mortgages loans payable of $16,710,000, (v) principal
repayments on mortgages loans payable of $26,426 and (vi) cash distributions to
partners of $101,789.
Net cash used in financing activities of $196,524 for the year
ended December 31, 1996 was comprised of cash distributions to partners.
New Accounting Standards
In February 1998, the Financial Accounting Standards Board ("FASB")issued
Statement of Financial Accounting Standards ("SFAS") No 132, "Employers
Disclosures about Pensions and Other Postretirement Benefits." SFAS No. 132
revises employers disclosures about pension and other postretirement benefit
plans. It standardizes the disclosure requirements for pensions and other
postretirement benefits to the extent practicable, requires additional
information on changes in the benefit obligations and fair values of plan assets
that will facilitate financial analysis, and eliminates certain disclosures that
are no longer as useful as they were when FASB Statements No. 87, "Employers
Accounting for Pensions", No. 88, "Employers Accounting for Settlements and
Curtailments of Defined Benefit Pension Plans and for Termination Benefits", and
No. 106, "Employers Accounting for Postretirement Benefits Other Than Pensions",
were issued. SFAS No. 132 suggests combined formats for presentation of pension
and other postretirement benefit disclosures. SFAS No. 132 also permits reduced
disclosures for nonpublic entities.
SFAS No. 132 is effective for fiscal years beginning after December 15,
1997. It is not anticipated that this statement will have any material effect on
disclosures presented by the Partnership.
22
<PAGE>
In June 1997, the FASB issued SFAS No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes standards for reporting and
display of comprehensive income and its components in a full set of general
purpose financial statements. Enterprises that have no items of other
comprehensive income in any period presented are excluded from the scope of this
Statement.
SFAS No. 130 is effective for both interim and annual periods
beginning after December 15, 1997. Comparative financial statements provided for
earlier periods are required to be reclassified to reflect the provisions of
this statement. Because the Partnership has no items of other comprehensive
income, SFAS No. 130 will not have any material effect on current or prior
period financial statement displays presented by the Partnership.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131 establishes
standards for the way public business enterprises report information about
operating segments in annual financial statements and requires those enterprises
to report selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about products and services, geographic areas and major customers.
SFAS No. 131 is effective for financial statements periods
beginning after December 15, 1997. SFAS No. 131 will not have any material
effect on current or prior period segment disclosures presented by the
Partnership, because the Partnership operates as a single segment.
Item 8. Financial Statements and Supplementary Data.
The financial statements and supplementary data, shown by index
on page 36, begin on page 37 of this Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
23
<PAGE>
PART III
Item 10. Directors and Officers of the Registrant.
The names, offices held and the ages of the directors and
executive officers of the General Partner and of CMP Beneficial Corp. are as
follows:
Has Served As a
Director and/or
Name Age Position Held Officer Since (1)
- --------------------- --- ------------------ -----------------
Leonard S. Mandor (3) 51 President Inception (2)
and Director
Robert A. Mandor (3) 45 Vice President Inception
and Director
Harvey Shore 52 Vice President December 24, 1987
Joseph P. Otto 44 Vice President October 3, 1997
and Secretary
Patrick Kirse 29 Treasurer and October 3, 1997
Controller
- ----------------------------------
(1) Each director and officer of the General Partner and CMP
Beneficial Corp. will hold office until the next annual
meeting of the General Partner and CMP Beneficial Corp.
and until his successor is elected and qualified.
(2) The General Partner was incorporated on December 12, 1986
and CMP Beneficial Corp. was incorporated on December
18,1986.
(3) Robert A. Mandor and Leonard S. Mandor are brothers.
LEONARD S. MANDOR is the Chief Executive Officer and a Director of Concord.
Mr. Mandor is the Chairman of the Board, Chief Executive Officer and a Director
of Milestone Properties, Inc. Mr. Mandor has been associated with Concord since
its inception in 1981.
ROBERT A. MANDOR is the President and a Director of Concord. For at least
the past five years he has served as the President, Chief Financial Officer, and
a Director of Milestone Properties, Inc. Mr. Mandor has been associated with
Concord since its inception.
24
<PAGE>
HARVEY SHORE joined Concord in 1983 and is a Senior Vice President. He also
serves as a Senior Vice President and Secretary of Milestone Properties, Inc.
Before joining Concord he worked at Chase Manhattan Bank as a Vice President.
JOSEPH P. OTTO was appointed Vice President and Secretary of the
Partnership by the Board in October 1997 to fill a vacancy. Mr. Otto is also a
Vice President of Concord and has been associated with Concord since 1984. Mr.
Otto is also a Vice President and Director of Milestone Properties, Inc.
PATRICK S. KIRSE also serves as a Vice President of Milestone Properties,
Inc. He is a CPA licensed in the state of Missouri. Before joining Milestone he
worked as a senior auditor with Deloitte & Touche LLP.
On February 2, 1995, the Securities and Exchange Commission filed
a civil complaint against Concord in the United States District Court for the
District of Columbia in connection with the proxy solicitation conducted with
respect to the merger of Concord Milestone Income Fund, L.P. and Concord
Milestone Income Fund II, L.P. into a publicly held corporation, Milestone
Properties, Inc., in 1990. The complaint alleged that Concord violated the
anti-fraud provisions of the Securities Exchange Act of 1934 through the forgery
of investors' signatures on proxy cards and further alleged that Concord failed
to provide certain investors in the affected partnerships with lists of
partners, as required under the proxy rules. In April, 1995, Concord consented,
without admitting or denying the Commission's allegations, to the entry of a
final judgment ordering it to pay a civil penalty of $500,000 and enjoining it
from violating Section 17(a) of the Securities Act of 1933 and Sections 10(b)
and 14(a) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14a-7
thereafter.
Compliance with Section 16(a) of the Exchange Act.
Based on the General Partner's review of Forms 3, 4 and 5
furnished to the Partnership, there were no late reports filed during 1997.
Item 11. Compensation.
During 1997, the Partnership paid or accrued:
(i) Pursuant to the Partnership Agreement, $1,018 to the General
Partner as a distribution of distributable cash flow (See
Item 5 "Market for Registrant's Units and Related Security
Holders Matters" of this Report for a description of
distributable cash flow).
(ii) $25,000 to Milestone Property Management, Inc. ("MPMI"), an
affiliate of the General Partner, for administrative
services rendered to the Partnership. Pursuant to an
agreement between MPMI and the Partnership, the Partnership
reimburses MPMI for administrative services provided to the
Partnership, such as payroll, rent, supplies and utilities,
in an amount equal to $25,000 per year.
25
<PAGE>
(iii) $107,725 to MPMI for property management fees for the fiscal
year ended December 31, 1997. Pursuant to the management
agreement between the Partnership and MPMI, property
management fees are equal to a percentage of gross revenues
not to exceed 5 percent for multiple tenant property for
which MPMI performs leasing services, 3 percent for multiple
tenant property for which MPMI does not perform leasing
services and 1 percent for single tenant property. The
management fees are 3 percent for the Searcy Property, 4
percent for the Valencia Property and 5 percent for the
Green Valley Property. The management fee for any Property
may not exceed competitive fees for comparable services
reasonably available to the Partnership in the same
geographic area as the property in question. Gross revenues
are defined in the management agreement to mean, with
respect to each Property, all base, additional and
percentage rents collected from the Property but exclude all
other receipts or income with respect to that Property, such
as, (i) receipts arising out of any sale of assets or of all
or part of the Property, condemnation proceeds and other
items of a similar nature; (ii) payments made by tenants for
over-standard finish out improvements or other amortization;
(iii) income derived from interest on investments, security
deposits utility deposits; (iv) proceeds of claims under
insurance policies; (v) abatements or reductions of taxes;
(vi) security deposits made by tenants; or (vii) any
portions of rentals which are specifically designated as
amortization of, or interest on, tenant moving expenses,
takeover expenses or similar items in the nature of advances
by the Partnership.
No officer, director, or employee of the General Partner received
any direct compensation from the Partnership during the fiscal year ended
December 31, 1997.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) The General Partner does not know of any beneficial owner of
five percent or more of the issued and outstanding Class A Interests. The
General Partner knows of only one owner of five percent or more of the issued
and outstanding Class B Interests, the information as to which is set forth
below as of March 4, 1998:
Amount and
Nature of Percent
Title Name and Address of Beneficial of
of Class Beneficial Owner Ownership Class
Class B The Guardian Life 572,292* 27.1%
Interests Insurance Company
of America
203 Park Avenue South
New York, NY 10003
- -----------------------
26
<PAGE>
* To the best of the Partnership's knowledge, The Guardian Life
Insurance Company of America has sole voting power and investment
power with respect to these securities.
(b) The General Partner, together with its affiliates and the
officers and directors of the General Partner, own less than 1% of the issued
and outstanding Class A Interests and less than 1% of the issued and outstanding
Class B Interests.
The number of shares of stock, no par value, of Concord (which is
the parent of the General Partner) beneficially owned by all directors of the
General Partner and CMP Beneficial Corp. and all directors and officers of the
General Partner and CMP Beneficial Corp. as a group as of March 4, 1998 is set
forth in the following table:
Amount and
Nature of Percent
Name of Beneficial of
Beneficial Owner Ownership Class
----------------- --------- ------
Leonard S. Mandor 267 67%
Robert A. Mandor 133 33%
Item 13. Certain Relationships and Related Transactions.
See Items 1, "Business," 5, "Market for Registrant's Units and
Related Security Holders Matters," 10, "Directors and Officers of the
Registrant," and 11, "Compensation," of this Report for details. See also Note 5
of the Notes to Financial Statements of the Partnership's Financial Statements
included in this Report.
27
<PAGE>
PART IV
Item 14. Exhibits, Financial Statements, Financial Schedule, and Reports on Form
8-K.
(a) Financial Statements and Financial Schedule
See Index to Financial Statements and Financial Schedule
included herewith on page 34 of this Report.
(b) No reports of Form 8-K were filed for the three months ended
December 31, 1997.
(c) Exhibits:
Location of
Exhibit in
Sequential
Exhibit Numbering
Number Description of Document System
3.1 Amended and Restated Agreement of Limited Partnership
of Concord Milestone Plus, L.P. Incorporated herein by
reference to Exhibit A to the Registrant's Prospectus
included as Part I of the Registrant's Post-Effective
Amendment No. 3 to the Registrant's Registration Statement
on Form S-11 (the "Registration Statement") which was
declared effective on April 3, 1987.
3.2 Amendment No. 1 to Amended and Restated Agreement of
Limited Partnership of Concord Milestone Plus, L.P.,
included as Exhibit 3.2 to Registrant's Form 10-K for
the fiscal year ended December 31, 1987 ("1987 Form
10-K"), which is incorporated herein by reference.
3.3 Amendment No. 2 to Amended and Restated Agreement of
Limited Partnership of Concord Milestone Plus, L.P.
included as Exhibit 3.3 to the 1987 Form 10-K,
which is incorporated herein by reference.
3.4 Amendment No. 3 to Amended and Restated Agreement of
Limited Partnership of Concord Milestone Plus, L.P.
included as Exhibit 3.4 to the 1987 Form 10-K,
which is incorporated herein by reference.
28
<PAGE>
3.5 Amendment No. 4 to Amended and Restated Agreement of
Limited Partnership of Concord Milestone Plus, L.P.
included as Exhibit 3.5 to the 1987 Form 10-K,
which is incorporated herein by reference.
3.6 Amendment No. 5 to Amended and Restated Agreement of
Limited Partnership of Concord Milestone Plus, L.P.
included as Exhibit 3.6 to Registrant's Form 10-K
for the fiscal year ended December 31, 1988, which is
incorporated herein by reference.
4. Form of Indenture relating to Escalating Rate Collateralized
Mortgage Bonds due November 30, 1997 between Concord Milestone
Plus, L.P. and United States Trust Company of New York, as
Trustee. Incorporated herein by reference to Exhibit 4 to the
Registration Statement.
4.1 Form of Supplemental Indenture. Incorporated herein
by reference to Exhibit 4.7 to the Registrant's
Post-Effective Amendment No. 1 ("Post-Effective
Amendment No. 1") to the Registration Statement.
4.2 Form of Escalating Rate Collateralized Mortgage Bond
due November 30, 1997 included as Exhibit 4.2 to the
1987 Form 10-K, which is incorporated herein by
reference.
4.3 Form of certificate evidencing Class A Interests
included as Exhibit 4.3 to the 1987 Form 10-K,
which is incorporated herein by reference.
4.4 Form of certificate evidencing Class B Interests
included as Exhibit 4.4 to the 1987 Form 10-K,
which is incorporated herein by reference.
10.1 Property purchase agreements. Incorporated herein by
reference to Exhibit 10.1 to the Registration
Statement.
10.2 Form of property management agreement. Incorporated
herein by reference to Exhibit 10.2 of the
Registration Statement.
29
<PAGE>
10.3 First Amendment to Management Agreement by and between
Concord Milestone Plus, L.P. and Concord Assets
Management, Inc. Incorporated herein by reference to
Exhibit 10.3 of the 1988 Form 10-K.
10.4 Second Amendment to Management Agreement by and
between Concord Milestone Plus, L.P. and Concord Assets
Management, Inc. Incorporated herein by reference to
Exhibit 10.4 of the 1988 Form 10-K.
10.5 Omitted intentionally.
10.6 Omitted intentionally.
10.7 Mortgage Promissory Note executed by Concord Milestone
Plus, L.P. in favor of United States Trust Company of
New York, as trustee, in the principal amount of
$7,523,500 and secured by a mortgage on certain
property located in Valencia, California.
Incorporated herein by reference to Exhibit 10.5 to
the 1987 Form 10-K.
10.8 Mortgage Promissory Note executed by Concord Milestone
Plus, L.P. in favor of United States Trust Company as
trustee, in the principal amount of $6,296,000 and
secured by a mortgage on a certain property located in
Green Valley, Arizona. Incorporated herein by
reference to Exhibit 10.8 to the 1988 Form 10-K.
10.9 Deed of Trust and Uniform Commercial Code Security
Agreement and Financing Statement with Assignment of
Leases, Rents and Profits executed by Concord
Milestone Plus, L.P. in favor of United States Trust
Company of New York, as trustee, with respect to
property located in Valencia, California.
Incorporated herein by reference to Exhibit 10.6 to
the 1987 Form 10-K.
30
<PAGE>
10.10 Mortgage Deed of Trust and Uniform Commercial Code
Security Agreement and Financing Statement with
Assignment of Leases, Rents and Profits, in favor of
United States Trust Company of New York, as trustee,
with respect to certain property located in Green
Valley, Arizona. Incorporated herein by reference to
Exhibit 10.10 to the 1988 Form 10-K.
10.11 Amended and Restated Mortgage Promissory Note executed
by Concord Milestone Plus, L.P. in favor of United
States Trust Company of New York, as trustee, in the
principal amount of $2,632,500 and secured by a
mortgage on certain property located in Searcy,
Arkansas. Incorporated herein by reference to Exhibit
10.7 of the 1987 Form 10-K.
10.12 Mortgage, Deed of Trust and Uniform Commercial Code
Security Agreement and Financing Statement with
Assignment of Leases, Rents and profits by Concord
Milestone Plus, L.P. in favor of United States Trust
Company of New York, as trustee, with respect to
property located in Searcy, Arkansas. Incorporated
herein by reference to Exhibit 10.8 of the 1987
Form 10-K.
10.13 Modification of Mortgage, Deed of Trust and Uniform
Commercial Code Security Agreement and Financing
statement with Assignment of Leases, Rents and Profits
by Concord Milestone Plus, L.P. in favor of United
States Trust Company of New York, as trustee, with
respect to property located in Searcy, Arkansas.
Incorporated herein by reference to Exhibit 10.9 of
the 1987 Form 10-K.
10.14 Second Modification to Mortgage, Deed of Trust and
Uniform Commercial Code Security Agreement and
Financing Statement with Assignment of Leases, Rents
and Profits by Concord Milestone Plus, L.P. in favor
of United States Trust Company of New York, as
trustee, with respect to property located in Searcy,
Arkansas. Incorporated herein by reference to Exhibit
10.10 of the 1987 Form 10-K.
31
<PAGE>
10.15 Fixed Rate Note, dated September 23, 1997, executed by the
Partnership in favor of Lender, relating to the property located
in Green Valley, Arizona. Incorporated herein by reference to
Exhibit 10.1 of the Partnership's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1997 (the "September 1997
10-Q").
10.16 Mortgage, Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing, dated September 23, 1997, executed
by the Partnership for the benefit of Lender, relating to the
property located in Green Valley, Arizona. Incorporated herein by
reference to Exhibit
10.2 of the September 1997 10-Q.
10.17 Assignment of Leases and Rents, dated September 23, 1997, executed
by the Partnership for the benefit of Lender, relating to the
property located in Green Valley, Arizona. Incorporated herein by
reference to Exhibit 10.3 of the September 1997 10-Q.
10.18 Environmental Liabilities Agreement, dated September 23, 1997,
executed by the Partnership and CM Plus Corporation for the
benefit of Lender, relating to the property located in Green
Valley, Arizona. Incorporated herein by reference to Exhibit 10.4
of the September 1997 10-Q.
10.19 Tenant Occupancy Escrow and Security Agreement, dated September
23, 1997, by and between the Partnership and the Lender, relating
to the property located in Green Valley, Arizona. Incorporated
herein by reference to Exhibit 10.5 of the September 1997 10-Q.
10.20 Fixed Rate Note, dated September 23, 1997, executed by the
Partnership in favor of Lender, relating to the property located
in Searcy, Arkansas. Incorporated herein by reference to Exhibit
10.6 of the September 1997 10-Q.
10.21 Mortgage, Deed of Trust and Security Agreement, dated September
23, 1997, executed by the Partnership for the benefit of Lender,
relating to the property located in Searcy, Arkansas. Incorporated
herein by reference to Exhibit 10.7 of the September 1997 10-Q.
32
<PAGE>
10.22 Assignment of Leases and Rents, dated September 23, 1997, executed
by the Partnership for the benefit of Lender, relating to the
property located in Searcy, Arkansas. Incorporated herein by
reference to Exhibit 10.8 of the September 1997 10-Q.
10.23 Environmental Liabilities Agreement, dated September 23, 1997,
executed by the Partnership and CM Plus Corporation for the
benefit of Lender, relating to the property located in Searcy,
Arkansas. Incorporated herein by reference to Exhibit 10.9 of the
September 1997 10-Q.
10.24 Fixed Rate Note, dated September 23, 1997, executed by the
Partnership in favor of Lender, relating to the property located
in Valencia, California. Incorporated herein by reference to
Exhibit 10.10 of the September 1997 10-Q.
10.25 Deed of Trust, Assignment of leases, and Rents, Security Agreement
and Fixture Filing, dated September 23, 1997, executed by the
Partnership for the benefit of Lender, relating to the property
located in Valencia, California. Incorporated herein by reference
to Exhibit 10.11 of the September 1997 10-Q.
10.26 Assignment of Leases and Rents, dated September 23, 1997, executed
by the Partnership for the benefit of Lender, relating to the
property located in Valencia, California. Incorporated herein by
reference to Exhibit 10.12 of the September 1997 10-Q.
10.27 Environmental Liabilities Agreement, dated September 23, 1997,
executed by the Partnership and CM Plus Corporation for the
benefit of Lender, relating to the property located in Valencia,
California. Incorporated herein by reference to Exhibit 10.13 of
the September 1997 10-Q.
10.28 Environmental Escrow and Security Agreement, dated September 23,
1997, by and between the Partnership and the Lender, relating to
the property located in Valencia, California. Incorporated herein
by reference to Exhibit 10.14 of the September 1997 10-Q.
33
<PAGE>
27. Financial Data Schedule Article 5 included for Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) purposes only. This Schedule contains
summary financial information extracted from the consolidated balance
sheets and consolidated statements of revenues and expenses of the
Partnership as of and for the fiscal year ended December 31, 1997, and is
qualified in its entirety by reference to such financial statements.
34
<PAGE>
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 thereunder duly authorized on March 20, 1998.
CONCORD MILESTONE PLUS, L.P.
By: CM PLUS CORPORATION,
General Partner
By: /s/ Leonard S. Mandor
Leonard S. Mandor, President
CMP BENEFICIAL CORP.
(Registrant of Beneficial Interests)
By: /s/ Leonard S. Mandor
Leonard S. Mandor, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed by the following persons in the capacities and on the dates
indicated.
By: /s/ Leonard S. Mandor March 20, 1998
-----------------------------------------------
Leonard S. Mandor
President (Principal Executive Officer)
and Director of CM Plus
Corporation and CMP Beneficial Corp.
By: /s/ Robert A. Mandor March 20, 1998
-----------------------------------------------
Robert A. Mandor
Vice President and Director of CM Plus
Corporation and CMP Beneficial Corp.
By: /s/ Patrick Kirse March 20, 1998
-----------------------------------------------
Patrick Kirse
Treasurer and Controller (Principal
Accounting Officer) of CM Plus
Corporation and CMP Beneficial Corp.
35
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL SCHEDULE
Page No.
1.Financial Statements:
a. Concord Milestone Plus, L.P.
1. Independent Auditors' Report ............................. 37
2. Balance Sheets, December 31, 1997 and December 31, 1996.. 38
3. Statements of Revenues and Expenses for the Years Ended
December 31, 1997, 1996 and 1995 ......................... 39
4. Statements of Changes in Partners' Capital for the Years
Ended December 31, 1997, 1996, 1995 ...................... 40
5. Statements of Cash Flows for the Years Ended December
31, 1997, 1996 and 1995 ................................. 41
6. Notes to Financial Statements ............................ 42
2.Financial Schedule:
a. Real Estate and Accumulated Depreciation (Schedule III) ...... 51
b. Schedules not filed:
All Schedules except Schedule III have been omitted as the
required information is not applicable or the information is
shown in the financial statements or notes thereto.
36
<PAGE>
INDEPENDENT AUDITORS' REPORT
Concord Milestone Plus, L.P.:
We have audited the accompanying balance sheets of Concord Milestone Plus, L.P.
(the "Partnership") as of December 31, 1997 and 1996 and the related statements
of revenues and expenses, changes in partners' capital and cash flows for each
of the three years in the period ended December 31, 1997. Our audits also
included the financial statement schedule of real estate and accumulated
depreciation. These financial statements and the financial statement schedule of
real estate and accumulated depreciation are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on the
financial statements and the financial statement schedule of real estate and
accumulated depreciation 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, such financial statements present fairly, in all material
respects, the financial position of Concord Milestone Plus, L.P. at December 31,
1997 and 1996 and the results of its operations, changes in partners' capital
and its cash flows for each of the three years in the period ended December 31,
1997 in conformity with generally accepted accounting principles. Also, in our
opinion, the financial statement schedule of real estate and accumulated
depreciation, when considered in relation to the basic financial statements,
presents fairly, in all material respects, the information set forth therein.
/s/ Deloitte & Touche, LLP
New York, New York
March 20, 1998
37
<PAGE>
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
BALANCE SHEETS
DECEMBER 31, 1997 and 1996
<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
<S> <C> <C>
Property, at cost
Building and improvements .................................................................. $ 15,453,945 $ 15,359,462
Less: accumulated depreciation ............................................................. 5,413,087 4,829,534
------------ ------------
Building and improvements, net ............................................................. 10,040,858 10,529,928
Land ....................................................................................... 10,987,034 10,987,034
------------ ------------
Total property ............................................................................. 21,027,892 21,516,962
Cash and cash equivalents ..................................................................... 257,905 326,120
Accounts receivable ........................................................................... 123,152 146,728
Restricted cash ............................................................................... 269,895 --
Debt financing costs, net ..................................................................... 305,504 --
Prepaid expenses and other assets, net ........................................................ 67,516 96,965
------------ ------------
Total assets ............................................................................... $ 22,051,864 $ 22,086,775
============ ============
Liabilities:
Mortgage loans payable ........................................................................ $ 16,683,574 --
Bonds payable, net ............................................................................ -- $ 16,473,060
Accrued interest .............................................................................. 117,308 137,100
Accrued expenses and other liabilities ........................................................ 341,263 255,137
Accrued expenses payable to affiliates ........................................................ 73,935 11,985
------------ ------------
Total liabilities .......................................................................... 17,216,080 16,877,282
------------ ------------
Commitments and Contingencies
Partners' capital
General partner ............................................................................ (74,207) (70,470)
Limited partners:
Class A Interests, 1,518,800 ............................................................. 4,909,991 5,279,963
Class B Interests, 2,111,072 ............................................................. -- --
------------ ------------
Total partners' capital .................................................................... 4,835,784 5,209,493
------------ ------------
Total liabilities and partners' capital .................................................... $ 22,051,864 $ 22,086,775
============ ============
</TABLE>
See Accompanying Notes to Financial Statements
38
<PAGE>
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF REVENUES AND EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
December 31, December 31, December 31,
1997 1996 1995
<S> <C> <C> <C>
Revenues:
Rent ...................................................................... $ 2,543,384 $ 2,583,614 $ 2,573,507
Reimbursed expenses ....................................................... 477,312 405,443 455,546
Interest and other income ................................................. 26,100 20,606 32,226
----------- ----------- -----------
Total revenues ......................................................... 3,046,796 3,009,663 3,061,279
----------- ----------- -----------
Expenses:
Interest expense .......................................................... 1,602,762 1,569,795 1,525,238
Depreciation and amortization ............................................. 584,414 638,685 657,210
Management and property expenses .......................................... 816,817 802,971 903,686
Administrative and management fees
to related party ....................................................... 132,725 132,007 141,359
Professional fees and other expenses ...................................... 181,998 104,324 141,596
----------- ----------- -----------
Total expenses ......................................................... 3,318,716 3,247,782 3,369,089
----------- ----------- -----------
Net loss ............................................................... $ (271,920) $ (238,119) $ (307,810)
=========== =========== ===========
Net loss attributable to:
Limited partners ....................................................... $ (269,201) $ (235,738) $ (304,732)
General partner ........................................................ (2,719) (2,381) (3,078)
----------- ----------- -----------
Net loss .................................................................. $ (271,920) $ (238,119) $ (307,810)
=========== =========== ===========
Loss per weighted average
Limited Partnership 100 Class A
Interests outstanding ..................................................... $ (17.90) $ (15.68) $ (20.27)
=========== =========== ===========
Weighted average number of 100
Class A interests outstanding ............................................. 15,188 15,188 15,188
=========== =========== ===========
</TABLE>
See Accompanying Notes to Financial Statements
39
<PAGE>
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31,1997, 1996 and 1995
<TABLE>
<CAPTION>
General Class A Class B
Total Partner Interests Interests
<S> <C> <C> <C> <C>
PARTNERS' CAPITAL (DEFICIT)
December 31, 1994 $6,151,653 $(61,049) $6,212,702 -
Distributions (199,707) (1,997) (197,710) -
Net Loss (307,810) (3,078) (304,732) -
---------- -------- ---------- -------------
PARTNERS' CAPITAL (DEFICIT)
December 31, 1995 5,644,136 (66,124) 5,710,260 -
Distributions (196,524) (1,965) (194,559) -
Net Loss (238,119) (2,381) (235,738) -
---------- -------- ---------- -------------
PARTNERS' CAPITAL (DEFICIT)
December 31, 1996 5,209,493 (70,470) 5,279,963 -
---------- -------- ---------- -------------
Distributions (101,789) (1,018) (100,771) -
Net Loss (271,920) (2,719) (269,201) -
--------- ------- --------- -------------
PARTNERS' CAPITAL (DEFICIT)
December 31, 1997 $4,835,784 $(74,207) $4,909,991 -
========= ======== ========= =============
</TABLE>
See Accompanying Notes to Financial Statements
40
<PAGE>
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
December 31, December 31, December 31,
1997 1996 1995
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(271,920) $(238,119) $(307,810)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 584,414 638,685 657,210
Change in operating assets and liabilities - net:
Decrease (increase) in accounts receivable 23,576 (32,631) 55,714
Decrease (increase) in prepaid expenses and other assets, net 15,364 61,846 (21,230)
Decrease (increase) in due from affiliate, net - 47,879 (47,879)
(Decrease) increase in accrued interest (19,792) 6,854 3,428
Increase (decrease) in accrued expenses and other liabilities 86,126 (82,131) (15,995)
Increase (decrease) in accrued expenses payable to affiliates 61,950 11,985 (38,827)
------------- ---------- ----------
Net cash provided by operating activities 479,718 414,368 284,611
------------ --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property improvements (94,486) (96,984) (210,052)
Purchase of other asset - (13,612) -
---------- --------- ----------
Net cash used in investing activities (94,486) (110,596) (210,052)
---------- --------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of bonds payable (16,452,000) - -
Restricted cash (269,895) - -
Debt financing costs (313,337) - -
Proceeds from mortgage loans payable 16,710,000 - -
Principal repayments on mortgage loans payable (26,426) - -
Cash distributions to partners (101,789) (196,524) (199,707)
----------- -------- --------
Net cash used in financing activities (453,447) (196,524) (199,707)
----------- -------- --------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS (68,215) 107,248 (125,148)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 326,120 218,872 344,020
----------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 257,905 $ 326,120 $ 218,872
=========== ========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for interest $1,622,554 $1,562,941 $1,521,810
========== ========== =========
</TABLE>
See Accompanying Notes to Financial Statements
41
<PAGE>
CONCORD MILESTONE PLUS, L.P.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997, 1996 and 1995
1. Organization and Capitalization
Concord Milestone Plus, L.P., a Delaware limited partnership (the
"Partnership"), was formed on December 12, 1986, to invest in existing
income-producing commercial and industrial real estate, such as shopping
centers, office buildings, free-standing commercial warehouses and distribution
centers. Currently, the Partnership owns and operates three shopping centers
(the "Properties"), one located in Searcy, Arkansas (the "Searcy Property"), one
located in Valencia, California (the "Valencia Property") and one located in
Green Valley, Arizona (the "Green Valley Property").
The Partnership commenced a public offering on April 8, 1987 in order to fund
the Partnership's real property acquisitions. The Partnership terminated its
public offering on April 2, 1988 and was fully subscribed to with a total of
16,452 Bond Units and 15,188 Equity Units issued. Each Bond Unit consisted of
$1,000 principal amount of the Partnership's Escalating Rate Collateralized
Mortgage Bonds (the "Bonds") due November 30, 1997 and 36 Class B Interests
("Class B Interests"), each such interest representing an assignment of one
Class B Limited Partnership Interest held by CMP Benefit Corp., a Delaware
corporation (the "Assignor"), under the Amended and Restated Agreement of
Limited Partnership of the Partnership Agreement (the "Partnership Agreement").
Each Equity Unit consisted of 100 Class A Interests ("Class A Interests"), each
interest representing an assignment of one Class A Limited Partnership Interest
held by the Assignor under the Partnership Agreement, and 100 Class B Interests.
Capital contributions to the Partnership consisted of $15,187,840 from the sale
of the Equity Units and $592,272 from the sale of the Class B Interests that
comprised the Bond Units.
2. Summary of Significant Accounting Policies
Basis of Accounting, Fiscal Year
The Partnership's records are maintained on the accrual basis of accounting for
both financial and tax purposes. Its fiscal year is the calendar year.
Cash and Cash Equivalents
The Partnership considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
42
<PAGE>
Base Rents
Base rents are recognized on a straight-line basis over the terms of the related
leases, including free rent, if any, and lease step ups.
Property
Property is carried at cost, and depreciated on a straight-line basis over the
estimated useful life of 31.5 years. Building improvements are carried at cost,
and depreciated on a straight-line basis using an estimate useful life of 5
years. Leasehold improvements are amortized on a straight-line basis over the
lesser of the estimated useful life or the remaining term of the lease.
The Partnership's policy is to quarterly assess any impairment in value by
making a comparison of the current and projected operating cash flows of each of
its properties over its remaining useful life, on an undiscounted basis, to the
carrying amount of such property. Such carrying amount would be adjusted, if
necessary, to the estimated fair value to reflect an impairment in the value of
the asset. The Partnership determined that an adjustment to the carrying amount
of its property was not necessary in 1997, 1996 and 1995.
43
<PAGE>
Income Taxes
The Partnership makes no provision for income taxes because all income and
losses are allocated to the partners and holders of Class A Interests and Class
B Interests for inclusion in their respective tax returns. The tax bases of the
Partnership's net assets and liabilities are $2,792,337 and 2,699,056 higher
than the amounts reported for financial statement purposes at December 31, 1997
and 1996,respectively, due to the utilization of different estimated useful
lives for the depreciation of property for tax and financial reporting purposes
and the write-down of property during 1993 and 1994 for financial reporting
purposes.
Discount on Bonds Payable and Debt Financing Costs
The Partnership amortized the original issue discount on bonds payable using the
effective interest method over the term of the Bonds. The costs to obtain the
new Mortgage Loans were capitalized and are being amortized over the term of
such mortgages using the effective interest method.
Loss Per Class A Interest
In February 1997, the FASB issued SFAS No. 128, "Earnings per Share" which
establishes standards for computing and presenting earnings per share. The new
standard replaces the presentation of primary earnings per share prescribed by
Accounting Principles Board Opinion No. 15 ("APB 15"), "Earnings per Share" with
a presentation of basic earnings per share and also requires dual presentation
of basic and diluted earnings per share on the face of the statement of
operations for all entities with complex capital structures. The Partnership has
no dilutive interests. Loss per Class A interest amounts are computed by
dividing net loss allocable to the limited partners by the weighted average
number of 100 Class A Interests outstanding during the year. SFAS No. 128 will
not have any material effect on current or prior period financial statement
displays presented by the Partnership.
Capital Structure
In February 1997, the FASB issued SFAS No. 129, "Disclosure of
Information About Capital Structure." SFAS No. 129 establishes certain standards
for disclosing information about an entity's capital structure. SFAS No. 129 is
effective for financial statement periods ending after December 15, 1997. SFAS
No. 129 will not have any material effect on current or prior period financial
statement displays presented by the Partnership.
44
<PAGE>
Use of Estimates in the Preparation of Financial Statements
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.
Reclassifications
Certain reclassifications were made to the accompanying 1995 and 1996 financial
statements to conform with the 1997 presentation.
3. Partnership Agreement
Pursuant to the terms of the Partnership Agreement the general partner of the
Partnership, CM Plus Corporation, a Delaware corporation (the "General
Partner"), is liable for all general obligations of the Partnership to the
extent not paid by the Partnership.
Holders of Class A Interests and Class B Interests are not liable for expenses,
liabilities or obligations of the Partnership beyond the amount of their
contributed capital.
45
<PAGE>
All distributable cash, capital proceeds, profit, gain or loss from Partnership
operations are generally allocated 1 percent to the General Partner and 99
percent to the holders of Class A Interests. The holders of Class B Interests
were specifically allocated certain organization and offering expenses to the
extent of their positive capital account balances, thus reducing their account
balance to zero. After the holders of Class A Interests have received the 12.5
percent Priority Return (as defined in the Partnership Agreement) all
distributable cash is allocated in a ratio of 85 percent to the holders of Class
B Interests, 5 percent to the holders of Class A Interests and 10 percent to the
General Partner.
Since the inception of the Partnership, all income and distributable cash with
respect to the Equity Units has been allocated to the holders of Class A
Interests because they have not received the 12.5 percent Priority Return.
Therefore, no income has been allocated to the holders of Class B Interests.
4. Properties
On August 20, 1987, the Partnership purchased the Searcy Property, a shopping
center in Searcy, Arkansas from Concord Milestone Plus of Arkansas Limited
Partnership, an affiliated entity, for $4,050,000.
On January 22, 1988, the Partnership purchased the Valencia Property, a shopping
center in Valencia, California from Concord Milestone Plus of California Limited
Partnership, an affiliated entity, for $11,575,000.
On April 15, 1988, the Partnership purchased the Green Valley Property, a
shopping center in Green Valley, Arizona from Concord Milestone Plus of Arizona
Limited Partnership, an affiliated entity, for $9,687,000.
46
<PAGE>
Minimum base rental income under non-cancelable tenant lease agreements, having
lease terms expiring from one to nine years, at December 31, 1997 are as
follows:
Year Ended
December 31 Amount
1998 $2,456,745
1999 2,025,503
2000 1,648,368
2001 1,286,345
2002 997,996
Thereafter 2,767,333
Total $11,182,290
The above table does not include contingent rental amounts. The total contingent
rentals received in 1997, 1996, and 1995 were $163,307, $188,716, and $185,117,
respectively. A majority of the leases contain provisions for additional rent
calculated as a specified percentage of the tenant's gross receipts above fixed
minimum amounts and for reimbursement of all or a portion of the tenant's pro
rata share of real estate taxes, insurance and common area maintenance expenses.
There was no tenant in 1997 whose rents exceed 10% of the Partnership's total
revenue.
5. Related Party Transactions
The Partnership pays fees for customary property management services
("Management Fees") equal to a percentage of gross revenues from the Properties,
not to exceed 5 percent. The Management Fees are 3 percent for the Searcy
Property, 4 percent for the Valencia Property and 5 percent for the Green Valley
Property. Management Fees incurred for the years ended December 31, 1997, 1996,
and 1995 were $107,725, $107,007, and $116,359, respectively. Management Fees
are payable to Milestone Property Management, Inc., a Delaware corporation and
affiliate of the General Partner ("MPMI").
The Partnership also paid $25,000 to MPMI for administrative services for the
years ended December 31, 1997, 1996 and 1995.
As of December 31, 1997 and 1996, the Partnership accrued $33,542 and $11,985,
respectively, payable to Milestone Properties, Inc. ("MPI"), an affiliate of the
General Partner for administrative and management fees. Additionally, as of
December 31, 1997, the Partnership owes $40,393 to Concord Assets Group, an
affiliate, relating to funds borrowed in conjunction with the bond refinancing.
Tri-Stone Mortgage Company, an affiliate of the General Partner, assisted the
Partnership in obtaining three new fixed rate Mortgage Loans. No fee was paid to
Tri-Stone for their assistance.
47
<PAGE>
6. Mortgage Loans Payable
As of September 30, 1997, the Partnership, with the assistance of Tri-Stone
Mortgage Company, an affiliate of the General Partner, closed three new fixed
rate first mortgage loans (the "Mortgage Loans") from Westco Real Estate Finance
Corp. (the "Lender") in the amounts of $2,865,000, $8,445,000 and $5,400,000,
respectively. All three Mortgage Loans are secured by cross-collateralized first
mortgages on the Partnership's shopping centers. Prior to September 30, 1997,
the shopping centers were encumbered by mortgages granted by the Partnership for
the benefit of the holders of the Partnership's Bonds. The Partnership used the
proceeds of the Mortgage Loans and available cash to redeem all of the
outstanding Bonds. An aggregate of $17,015,650 was paid to the holders of the
Bonds in connection with such redemption, of which $16,452,000 was applied to
prepay the principal of the Bonds and $563,650 was applied to pay interest
accrued on the Bonds through the redemption date.
Bonds Payable consist of Bonds outstanding at December 31, 1996 in the principal
amount of $16,452,000. The Bonds had an effective interest rate of 9.66%.
The Mortgage Loans and related terms at December 31, 1997 are summarized as
follows:
Principal Monthly
Balance at Payments of
December Interest Principal
Property/Location 31, 1997 Rate % and Interest
----------------- -------------- ------ ------------
Searcy, AR $2,861,153 8.125 $21,640
Valencia, CA 8,429,458 8.125 65,881
Green Valley, AZ 5,392,963 8.250 41,252
--------- ------
Total $16,683,574 $128,773
========== =======
The Mortgage Loans require payments of principal and interest through and
including September 1, 2007. On October 1, 2007, the balance of principal and
interest estimated to be $2,505,981, $7,003,227, and $4,738,096 for the Searcy,
Valencia and Green Valley Properties, respectively, will be due and payable.
Subsequent to October 31, 2003 and prior to May 31, 2007 each Mortgage Loan may
be prepaid in whole but not in part on any payment date with a prepayment
penalty equal to the greater of (i) 1% of the outstanding principal balance at
such time, or (ii) the excess, if any, of the present value of the remaining
scheduled principal and interest payments (including any balloon payment) over
the amount of principal being prepaid. The Mortgage Loans may be prepaid without
penalty on any payment date after May 31, 2007.
48
<PAGE>
The scheduled principal payments of the Mortgage Loans at December 31, 1997 are
as follows:
Year Ending
December 31
1998 $170,520
1999 185,171
2000 197,149
2001 218,023
2002 236,758
Thereafter 15,675,953
Total $16,683,574
In connection with the Green Valley Mortgage Loan, the Partnership has deposited
$150,000 into an escrow account with the lender. The funds held in this escrow
account may be released upon the execution of a new lease or renewal lease, with
a termination date of July 31, 2004 or later, by a specified tenant of the Green
Valley shopping center and the satisfaction of certain other conditions.
In connection with the Valencia Mortgage Loan, the Partnership deposited $45,000
into an escrow account with the lender. The funds held were released during
February 1998 following the issuance of a "No Further Action" letter by the
Department of Toxic Substance Control, a branch of the State of California
Environmental Protection Agency ("CalEPA").
CM Plus Corporation, the general partner of the Partnership, guarantees certain
limited recourse obligations under the Mortgage Loans.
7. Commitments and Contingencies
In conjunction with the refinancing of the Bonds, the lender engaged an
independent environmental and geotechnical consulting firm to perform
environmental due diligence on the properties at the Partnership's expense.
After various tests, the consultant identified chemical contamination in the
soil at a site at the Old Orchard Shopping Center in Valencia, California which
it believed was attributable to improper handling of dry cleaning solvent by a
tenant and its predecessors. During February 1998, the CalEPA issued a No
Further Action letter with respect to the investigation and remediation at the
Valencia Property. The cost to satisfactorily remedy this environmental problem
was approximately $71,000, which was expensed during 1997.
49
<PAGE>
Investments in real property create a potential for environmental liability on
the part of the owner, operator or developer of such real property. If hazardous
substances are discovered on or emanating from any of the Properties, the
Partnership and/or others may be held strictly liable for all costs and
liabilities relating to the clean-up of such hazardous substances. The
Partnership is not aware of any other environmental conditions that will have a
material effect on the financial statements.
50
<PAGE>
CONCORD MILESTONE PLUS, L.P.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Costs
Capitalized
Subsequent Gross Amount at
Initial Cost to Acquisition which Carried at Close of Period (A)
--------------------------- ------------- -------------------------------------
Land
Building & Building & Building &
Description and Location Encumbrances Land Improvements Improvements Land Improvements Total
- ------------------------------- ------------ ------------ ------------ ------------ ----------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Town & Country Plaza $2,861,153 $430,000 $3,620,000 $385,142 $430,000 $4,005,142 $4,435,142
Searcy, AR
Old Orchard Shopping Center 8,429,458 6,500,000 5,075,000 1,336,406 6,500,000 6,416,906 12,916,906
Valencia, CA
Green Valley Mall 5,392,963 5,100,000 4,587,000 1,493,363 4,057,034 5,031,897 9,088,931
Green Valley, AZ --------- --------- --------- --------- --------- --------- ---------
$16,683,574 $12,030,000 $13,282,000 $3,214,911 $10,987,034 $15,453,945 $26,440,979
========== ========== ========== ========= ========== ========== ==========
Accumulated Date Depreciation
Description and Location Depreciation(B) Acquired Life
- ------------------------------- -------------- ------------ --------
<S> <C> <C> <C>
Town & Country Plaza $1,324,345 08/20/87 31.5 years
Searcy, AR
Old Orchard Shopping Center 2,062,402 01/22/88 31.5 years
Valencia, CA
Green Valley Mall 2,026,340 04/15/88 31.5 years
Green Valley, AZ ---------
$5,413,087
=========
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
{A) Reconciliation of investment properties owned:
Beginning balance $26,346,496 $26,249,510 $26,039,458 $27,050,431 $27,787,658
Property acquisitions/improvements 94,483 96,986 210,052 74,959 262,773
Write-down of property 0 0 0 (1,085,932) (1,000,000)
---------- ----------- ------------ ----------- -----------
Balance at end of period $26,440,979 $26,346,496 $26,249,510 $26,039,458 $27,050,431
========== ========== ========== ========== ==========
(B) Reconciliation of accumulated depreciation:
Beginning balance $4,829,534 $4,253,132 $3,695,110 $3,122,666 $2,570,521
Depreciation expense 583,553 576,402 558,022 572,444 552,145
----------- ----------- ----------- ----------- -----------
Balance at end of period $ 5,413,087 $4,829,534 $4,253,132 $3,695,110 $3,122,666
========== ========= ========= ========= =========
</TABLE>
51
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 257,905
<SECURITIES> 0
<RECEIVABLES> 123,152
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 26,440,979
<DEPRECIATION> 5,413,087
<TOTAL-ASSETS> 22,051,864
<CURRENT-LIABILITIES> 0
<BONDS> 16,683,574
0
0
<COMMON> 0
<OTHER-SE> 4,835,784
<TOTAL-LIABILITY-AND-EQUITY> 22,051,864
<SALES> 0
<TOTAL-REVENUES> 3,046,796
<CGS> 0
<TOTAL-COSTS> 1,715,954
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,602,762
<INCOME-PRETAX> (271,920)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (271,920)
<EPS-PRIMARY> (17.90)
<EPS-DILUTED> (17.90)
</TABLE>
