<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required)
For the fiscal year ended January 31, 1996
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (No Fee Required)
For the transition period from _______ to ________.
Commission File No. 1-7062
REALTY REFUND TRUST
- --------------------------------------------------------------------------------
(Exact Name of Registrant as specified in its Charter)
OHIO 34-6647590
- --------------------------------- ---------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
1385 Eaton Center, Cleveland, Ohio 44114
- --------------------------------------------------------------------------------
(Address of Principal Executive Office) (ZIP Code)
(216) 771-7663
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EXCHANGE ON WHICH REGISTERED
- ------------------- ------------------------------------
Shares of Beneficial
Interest New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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
----- -----
[Cover Continued on Following Page]
<PAGE> 2
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]
Aggregate market value of voting stock held by non-affiliates of the
Registrant as of March 10, 1997: $ 4,202,782 .
-------------
Indicate the number of shares outstanding of each of the
Registrant's classes of common stock, as of the latest
practicable date: 1,020,586
-------------
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 1996 Annual Report to Shareholders -- Part II.
<PAGE> 3
PART II
-------
Item 6. SELECTED FINANCIAL DATA.
-----------------------
Information in response to this item is set forth below:
Selected Financial Data
The following selected financial data of Realty Refund Trust for the five
years ended January 31, 1996, have been derived from the audited fianancial
statements of the Trust, which have been audited by Arthur Andersen LLP,
independent public accountants. All of the data should be read in conjunction
with the respective financial statements and related notes included herein.
SELECTED FINANCIAL DATA
-----------------------
<TABLE>
<CAPTION>
For the fiscal years
ended January 31, 1996 1995 1994 1993 1992
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total revenues $ 5,430,006 $ 6,592,051 $ 7,645,790 $ 6,979,119 $ 4,525,660
------------------------------------------------------------------------------------------
Net Income (loss) $ (7,554,351) $ 670,945 $ 955,121 $ (4,542,975) $ 1,755,862
------------------------------------------------------------------------------------------
Earnings per share $ (7.40) $ .66 $ .94 $ (4.45) $ 1.72
------------------------------------------------------------------------------------------
Cash dividends paid
and declared per share $ .50 $ .80 $ .86 $ 1.09 $ 1.72
------------------------------------------------------------------------------------------
Total assets $ 24,555,330 $ 45,165,356 $ 65,264,638 $ 70,428,842 $ 78,638,206
------------------------------------------------------------------------------------------
Bank and other borrowings $ 10,795,000 $ 16,810,000 $ 24,575,000 $ 23,525,000 $ 21,050,000
------------------------------------------------------------------------------------------
</TABLE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
-------------------------------------------
The Statements of Cash Flows of the Registrant for each of the three
fiscal years in the period ended January 31, 1996, are set forth below. All
other financial statements of the Registrant for such fiscal year and the notes
thereto (including the notes applicable to the Statements of Cash Flows) appear
on pages 9 through 11 and 13 through 18 of the Registrant's 1996 Annual Report,
which is filed as Exhibit 13 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended January 31,
1
<PAGE> 4
1996.
Statements of Cash Flows
------------------------
<TABLE>
<CAPTION>
For the years ended January 31, 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Interest received $ 3,190,122 $ 3,946,514 $ 4,999,019
Interest paid (2,018,092) (2,709,753) (3,552,499)
Cash payments to investment advisor and other suppliers (626,188) (784,514) (184,830)
Rental revenue received from real estate held for sale 2,240,784 2,319,157 2,306,103
Cash payments for operating costs of real estate held for sale (1,726,371) (2,268,734) (2,413,637)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 1,060,255 502,670 1,154,156
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activites:
Principal collected on mortgage loans receivable 13,087,769 23,158,635 6,391,543
Principal payments on mortgage loans payable (6,364,536) (12,439,672) (6,547,638)
Payments for tenant and building improvements (1,178,904) (621,977) (985,856)
Investments in mortgage loans receivable -- (2,050,000) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used for) investing activities 5,544,329 8,046,986 (1,141,951)
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Bank borrowings 2,550,000 5,800,000 4,250,000
Repayments of bank borrowings (8,065,000) (13,565,000) (8,200,000)
Payment of cash dividends (612,372) (796,057) (949,145)
Borrowings from (repayments to) related party (500,000) -- 5,000,000
Payment of financing fees -- -- (109,526)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash used for financing activities: (6,627,372) (8,561,057) (8,671)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash (22,788) (11,401) 3,534
Cash at beginning of year 39,073 50,474 46,940
- -----------------------------------------------------------------------------------------------------------------------------------
Cash at end of year $ 16,285 $ 39,073 $ 50,474
-------------------------------------------------------
Reconciliation of net income (loss) to net cash
provided by operating activities:
Net income (loss) $ (7,554,351) $ 670,945 $ 955,121
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Provision for writedown of loan receivable
from related party 5,000,000 -- --
Provision for writedown of real estate held for sale 3,000,00 -- --
Depreciation of building held for sale 264,873 243,783 --
Amortization of deferred financing costs, leasing
commissions and tenant improvement costs 192,719 131,257 97,087
Amortization of deferred loan fees (18,000) (27,234) (71,640)
Deferral of interest income -- (137,596) (273,735)
Decrease (increase) in interest receivable and other assets 220,781 (636,221) 78,250
Increase (decrease) in deposits and accrued expenses (45,767) 257,736 369,073
- -----------------------------------------------------------------------------------------------------------------------------------
$ 1,060,255 $ 502,670 $ 1,154,156
=======================================================
</TABLE>
The other financial statements and schedules required herein are filed as
"Financial Statement Schedules" pursuant to Item 14 of the Registrant's Annual
Report on Form 10-K for the fiscal year ended January 31, 1996.
2
<PAGE> 5
PART IV
-------
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
---------------------------------------------------
ON FORM 8-K.
-----------
(a) 1. See the Index to Financial Statements set forth on
page 21 of the Registrant's Annual Report on Form 10-K
for the fiscal year ended January 31, 1996, for a list
of financial statements and financial schedules included
or incorporated herein by reference.
2.1 The Financial Statements of Riverview Tower Limited
Partnership, a borrower of the Registrant (which
financial statements were audited by such borrower's
auditors), are set forth as Exhibit 99(b) hereto.
2.2 The Financial Statements of Pacific Place Partners,
LTD., a borrower of the Registrant (which financial
statements were audited by such borrower's auditors),
are set forth as Exhibit 99(c) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
January 31, 1996.
3. The exhibits filed as part of this report are set forth
on the Exhibit Index on pages 5 through 9 hereof and
each management contract or compensatory plan or
arrangement required to be filed as an exhibit hereto
has been marked with an asterisk on the Exhibit Index.
(b) No current reports on Form 8-K were filed during the last quarter
of fiscal year 1996.
3
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: March 14, 1997 REALTY REFUND TRUST
By: /s/ James H. Berick
----------------------
Name: James H. Berick
Title: President
4
<PAGE> 7
Index of Exhibits
-----------------
Exhibit
Number
- ------
3(a) First Amended and Restated Declaration of Trust (incorporated by
reference to Exhibit 3.1 of Registration Statement No. 2-40238
effective June 17, 1971).
3(b) By-Laws (incorporated by reference to Exhibit 3.2 of the
Registrant's Current Report on Form 8-K dated February 12, 1985
and filed with the Securities and Exchange Commission on February
13, 1985).
10(a)* Form of Advisory Agreement between the Registrant and the Advisor
(incorporated by reference to Exhibit 12.1 of Registration
Statement No. 2-40238 effective June 17, 1971).
10(b)* Amendment dated June 1, 1987 to Advisory Agreement between
Registrant and the Advisor (incorporated by reference to Exhibit
10(b) of the Registrant's Form 10-K for the fiscal year ended
January 31, 1994).
10(c)* Amendment dated June 1, 1988 to Advisory Agreement between the
Registrant and the Advisor (incorporated in Exhibit 10(c) of the
Registrant's Form 10-K for fiscal year ended January 31, 1995).
10(d)* Amendment dated June 1, 1989 to Advisory Agreement between the
Registrant and the Advisor (incorporated by reference to Exhibit
10(d) of the Registrant's Form 10-K for the fiscal year ended
January 31, 1990).
10(e)* Amendment dated June 1, 1990 to Advisory Agreement between the
Registrant and the Advisor (incorporated by reference to Exhibit
10(e) of the Registrant's Form 10-K for the fiscal year ended
January 31, 1991).
10(f)* Amendment dated June 1, 1991 to Advisory Agreement between the
Registrant and the Advisor (incorporated by reference to Exhibit
10(f) of the Registrant's Form 10-K for the fiscal year ended
January 31, 1992).
10(g)* Amendment dated June 1, 1992 to Advisory Agreement between the
Registrant and the Advisor (incorporated by reference to Exhibit
10(g) of the Registrant's Form 10-K for the fiscal year ended
January 31, 1993).
5
<PAGE> 8
10(h)* Amendment dated June 1, 1993 to Advisory Agreement between the
Registrant and the Advisor (incorporated by reference to Exhibit
10(h) of the Registrant's Form 10-K for the fiscal year ended
January 31, 1994).
10(i)* Amendment dated June 1, 1994 to Advisory Agreement between the
Registrant and the Advisor (incorporated by reference to Exhibit
10(i) of Registrant's Form 10-K for fiscal year ended January 31,
1995).
10(j)* Amendment dated June 1, 1995 to Advisory Agreement between the
Registrant and the Advisor.(1)
10(k) Credit Agreement dated July 18, 1990 between the Registrant and
the Bank (incorporated by reference to Exhibit 10(f) of the
Registrant's Form 10-K for the fiscal year ended January 31,
1991).
10(l) Extension Agreement dated June 27, 1991 to Credit Agreement
between the Registrant and the Bank (incorporated by reference to
Exhibit 10(g) of the Registrant's Form 10-K for the fiscal year
ended January 31, 1992).
10(m) Amendment and Waiver Agreement dated as of July 7, 1992 to Credit
Agreement between the Registrant and the Bank (incorporated by
reference to Exhibit 10.5 of the Registrant's Current Report on
Form 8-K dated March 16, 1993 and filed with the Securities and
Exchange Commission on March 24, 1993).
10(n) Security Agreement (Promissory Notes) dated as of July 7, 1992
between Registrant and the Bank (incorporated by reference to
Exhibit 10.6 of the Registrant's Current Report on Form 8-K dated
March 16, 1993 and filed with the Securities and Exchange
Commission on March 24, 1993).
10(o) Second Amendment dated March 16, 1993 to Credit Agreement between
the Registrant and the Bank (incorporated by reference to Exhibit
10.2 of the Registrant's Current Report on Form 8-K dated March
16, 1993 and filed with the Securities and Exchange Commission on
March 24, 1993).
10(p) Third Amendment dated as of July 28, 1994 between the Registrant
and the Bank (incorporated by reference to Exhibit 10(o) of the
Registrant's Form 10-K for the fiscal year ended January 31,
1995).
6
<PAGE> 9
10(q) Security Agreement (Promissory Notes) dated as of March 16, 1993
between Registrant and the Bank (incorporated by reference to
Exhibit 10.4 of the Registrant's Current Report on Form 8-K dated
March 16, 1993 and filed with the Securities and Exchange
Commission on March 24, 1993).
10(r) Fourth Amendment dated as of July 27, 1995 between the Registrant
and the Bank.(1)
10(s) Fifth Amendment dated as of January 29, 1996 between Registrant
and the Bank.(1)
10(t) Sixth Amendment dated April 16, 1996 between Registrant and the
Bank.(1)
10(u) Security Agreement (Inventory, Receivables and Equipment) dated
as of March 16, 1993 between Registrant and Bank (incorporated by
reference to Exhibit 10.3 of the Registrant's Current Report on
Form 8-K dated March 16, 1993 and filed with the Securities and
Exchange Commission on March 24, 1993).
10(v) Secured Note Purchase Agreement dated March 16, 1993 between the
Registrant and Alan M. Krause (incorporated by reference to
Exhibit 10.1 of the Registrant's Current Report on Form 8-K dated
March 16, 1993 and filed with the Securities and Exchange
Commission on March 24, 1993).
10(w)* Employment Agreement dated January 22, 1990 between the
Registrant and Alan M. Krause (incorporated by reference to
Exhibit 10(i) of the Registrant's Form 10-K for the fiscal year
ended January 31, 1992).
10(x)* Amendment No. 1 dated June 1, 1990 to Employment Agreement
between the Registrant and Alan M. Krause (incorporated by
reference to Exhibit 10(j) of the Registrant's Form 10-K for the
fiscal year ended January 31, 1992).
10(y)* Amendment No. 2 dated June 1, 1991 to Employment Agreement
between the Registrant and Alan M. Krause (incorporated by
reference to Exhibit 10(k) of the Registrant's Form 10-K for the
fiscal year ended January 31, 1992).
10(z)* Amendment No. 3 dated June 1, 1992 to Employment Agreement
between the Registrant and Alan M. Krause (incorporated by
reference to Exhibit 10(s) of the Registrant's Form 10-K for the
fiscal year ended January 31, 1993).
7
<PAGE> 10
10(aa)* Amendment No. 4 dated June 1, 1993 to Employment Agreement
between the Registrant and Alan M. Krause (incorporated by
reference to Exhibit 10(u) of the Registrant's Form 10-K for the
fiscal year ended January 31, 1994).
10(bb)* Amendment No. 5 dated June 1, 1994 to Employment Agreement
between the Registrant and Alan M. Krause (incorporated by
reference to Exhibit 10(x) of the Registrant's Form 10-K for the
fiscal year ended January 31, 1995).
10(cc)* Amendment No. 6 dated June 1, 1995 to Employment Agreement
between Registrant and Alan M. Krause.(1)
10(dd)* Employment Agreement dated January 22, 1990 between the
Registrant and James H. Berick (incorporated by reference to
Exhibit 10(l) of the Registrant's Form 10-K for the fiscal year
ended January 31, 1992).
10(ee)* Amendment No. 1 dated June 1, 1990 to Employment Agreement
between the Registrant and James H. Berick (incorporated by
reference to Exhibit 10(m) of the Registrant's Form 10-K for the
fiscal year ended January 31, 1992).
10(ff)* Amendment No. 2 dated June 1, 1991 to Employment Agreement
between the Registrant and James H. Berick (incorporated by
reference to Exhibit 10(n) of the Registrant's Form 10-K for the
fiscal year ended January 31, 1992).
10(gg)* Amendment No. 3 dated June 1, 1992 to Employment Agreement
between the Registrant and James H. Berick (incorporated by
reference to Exhibit 10(w) of the Registrant's Form 10-K for the
fiscal year ended January 31, 1993).
10(hh)* Amendment No. 4 dated June 1, 1993 to Employment Agreement
between the Registrant and James H. Berick (incorporated by
reference to Exhibit 10 (z) of the Registrant's Form 10-K for the
fiscal year ended January 31, 1994).
10(ii)* Amendment No. 5 dated June 1, 1994 to Employment Agreement
between the Registrant and James H. Berick (incorporated by
reference to Exhibit 10(dd) of the Registrant's Form 10-K for the
fiscal year ended January 31, 1995).
8
<PAGE> 11
10(jj)* Amendment No. 6 dated June 1, 1995 to Employment Agreement
between the Registrant and James H. Berick.(1)
13 The Registrant's 1996 Annual Report.(1)
23 Consent of Independent Public Accountants.
24 Powers of Attorney.(1)
27** Financial Data Schedule.(1)
99(a) Notice of Annual Meeting and Proxy Statement dated April 5, 1996
and Supplement to Proxy Statement dated April 11, 1996.(1)
99(b) Financial Statements of Riverview Tower Limited Partnership as at
December 31, 1993, 1994 and 1995.
99(c) Financial Statements of Pacific Place Partners, Ltd. as at
December 31, 1994 and 1995.(1)
*Management contract or compensatory plan or arrangement required
to be filed as an exhibit hereto.
**Filed only in electronic format pursuant to Item 601(b)(27) of
Regulation S-K.
(1) Previously filed.
9
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the application of our
report dated February 26, 1996 in Realty ReFund Trust's annual report to
shareholders incorporated by reference in this Form 10-K/A to the statements of
cash flows for each of the three years in the period ended January 31, 1996
included herein. It should be noted that we have performed no audit procedures
subsequent to February 26, 1996, the date of our report, except with respect to
the statements of cash flows for each of the three years in the period ended
January 31, 1996. Furthermore, we have not audited any financial statements of
Realty ReFund Trust as of any date or for any period subsequent to January 31,
1996 (date of audited financial statements included in annual report to
shareholders).
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Cleveland, Ohio,
March 12, 1997.
<PAGE> 1
Exhibit 99(b)
Financial Statements of Riverview Tower
Limited Partnership as at December 31, 1993, 1994 and 1995
<PAGE> 2
MALITZ, WEINSTEIN & RUBIN CO.
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
December 31, 1993
INDEX
-----
AUDITORS' REPORT
STATEMENT OF ASSETS, LIABILITIES AND EQUITY EXHIBIT A
- INCOME TAX BASIS
As At December 31, 1993
ANALYSIS OF PARTNERS' EQUITY - INCOME TAX BASIS SCHEDULE A-1
For The Year Ended December 31, 1993
STATEMENT OF REVENUES AND EXPENSES - INCOME TAX BASIS EXHIBIT B
For The Year Ended December 31, 1993
STATEMENT OF CASH FLOWS - INCOME TAX BASIS EXHIBIT C
For The Year Ended December 31, 1993
NOTES TO FINANCIAL STATEMENTS EXHIBIT D
- INCOME TAX BASIS
<PAGE> 3
Malitz Weinstein & Rubin Co.
CERTIFIED PUBLIC ACCOUNTANTS
3690 ORANGE PLACE - SUITE 250
CLEVELAND, OHIO 44122-4422
-----
TELEPHONE (216) 464-9560
-----
TELECOPIER (216) 464-2887
CHARLES P. MALITZ, CPA ROBERT W. BIATS
MILTON J. WEINSTEIN, CPA JENNIFER L. GARRIS
KIMBALL E. RUBIN, CPA KAREN M. CAROSCIO
JONATHAN P. ROGEN, CPA JUDITH R. BARTELL
SCOTT R. SWERESS, CPA February 18, 1994 GARY A. FERBER, CPA
STEVEN MARTON, CPA (1937-1990)
STEPHEN L. WOLF, CPA
INDEPENDENT AUDITOR'S REPORT
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
We have audited the accompanying statement of assets, liabilities and equity -
income tax basis of Riverview Tower Limited Partnership, A Limited Partnership,
as of December 31, 1993, and the related statements of revenues and
expenses - income tax basis, partners' equity - income tax basis and cash
flows - income tax basis for the year then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Riverview Tower Limited
Partnership, A Limited Partnership as of December 31, 1993, and the results of
its operations and its cash flows for the year then ended in conformity with
the income tax basis of accounting, as described in Note 1.
/s/ Malitz, Weinstein, & Rubin Co.
<PAGE> 4
<TABLE>
MALITZ, WEINSTEIN & RUBIN CO. CERTIFIED PUBLIC ACCOUNTANTS, CLEVELAND, OHIO
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
STATEMENT OF ASSETS, LIABILITIES AND EQUITY Exhibit A
- INCOME TAX BASIS
As At December 31, 1993
ASSETS
------
<S> <C>
Cash $9,162.
Accounts Receivable 506.
Escrow Receivable 159,722.
Prepaid Expenses 22,916.
Property and Equipment 16,705,077.
Less: Accumulated Depreciation
and Amortization (8,042,295.)
-----------
TOTAL ASSETS $8,855,088.
===========
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
LIABILITIES
Accounts Payable $2,092,044.
Accrued Interest and Real Estate Taxes 406,374.
Mortgage Payable 13,758,615.
-----------
Total Liabilities $16,257,O33.
PARTNERS' EQUITY - SCHEDULE A-1 (7,401,945.)
------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 8,855,088.
============
<FN>
SEE ACCOUNTANTS REPORT LETTER AND NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE> 5
MALITZ, WEINSTEIN & RUBIN CO. CERTIFIED PUBLIC ACCOUNTANTS. CLEVELAND, OHIO
Schedule A-1
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
ANALYSIS OF PARTNERS' EQUITY
- INCOME TAX BASIS
For The Year Ended December 31, 1993
<TABLE>
<CAPTION>
TRANSFERS
BALANCE TO LIMITED NET BALANCE
BEGINNING UNITS INCOME ENDING
------------- ---------- ----------- -------------
<S> <C> <C> <C> <C>
GENERAL PARTNERS $ (887,151.) $ 7O9,653. $ (19,984.) $ (197,482.)
LIMITED PARTNERS (5,765,442.) (709,653.) (729,368.) (7,204,463.)
------------- ---------- ----------- -------------
TOTALS $ (6,652,593.) $ -0- $ (749,352.) $ (7,401,945.)
============= ========== =========== =============
<FN>
SEE ACCOUNTANTS REPORT LETTER AND NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE> 6
MALITZ, WEINSTEIN & RUBIN CO. CERTIFIED PUBLIC ACCDUNTANTS. CLEVELAND, OHIO
Exhibit B
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
STATEMENT OF REVENUES AND EXPENSES
- INCOME TAX BASIS
For The Year Ended December 31, 1993
<TABLE>
<S> <C> <C>
INCOME
Rentals $2,177,816.
Excess Operating Charges 1,164,161.
Garage 321,682.
Antenna 128,301.
-----------
Total Income $3,791,960.
OPERATING EXPENSES
Custodial and Manager $264,383.
Elevator Maintenance 112,372.
Insurance 70,304.
Management Fees 230,689.
Office Expense 66,011.
Professional Fees 42,472.
Repairs and Maintenance 630,005.
Supplies (17,382.)
Taxes - Real Estate 258,343.
Taxes - Other 3,430.
Travel 570.
Utilities 881,481.
General Expenses 6,765.
-----------
Total Operating Expenses 2,549,443.
-----------
INCOME BEFORE INTEREST EXPENSE, DEPRECIATION
AND AMORTIZATION $1,242,517.
LESS: Interest Expense 1,214,005.
-----------
INCOME BEFORE DEPRECIATION AND AMORTIZATION $28,512.
LESS: Depreciation And Amortization 777,864.
-----------
NET INCOME FOR THE YEAR $(749,352.)
===========
<FN>
SEE ACCOUNTANTS REPORT LETTER AND NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE> 7
<TABLE>
MALITZ, WEINSTEIN & RUBIN CO. CERTIFIED PUBLIC ACCOUNTANTS. CLEVELAND, OHIO
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS Exhibit C
- INCOME TAX BASIS
For The Year Ended December 31, 1993
<S> <C> <C>
CASH GENERATED BY OPERATIONS:
Net Income $(749,352.)
Depreciation and Amortization 777,864.
-----------
Total $ 28,512.
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Current Assets - (Increase) Decrease
Receivables $(8,132.)
Prepaids (1,601.)
Current Liabilities - Increase (Decrease)
Accounts Payable 349,747.
Accrued Expenses and Taxes (42,860.)
-----------
Total 297,154.
-----------
NET CASH PROVIDED BY OPERATIONS $ 325,666.
INVESTING ACTIVITIES -0-
FINANCING ACTIVITIES
Decrease In Debt (325,666.)
-----------
INCREASE (DECREASE) IN CASH $ -0-
CASH BALANCE - BEGINNING 9,162.
-----------
CASH BALANCE - ENDING $ 9,162.
===========
SUPPLEMENTAL DISCLOSURE
Cash Paid During The Year For Interest $1,214,005.
===========
<FN>
SEE ACCOUNTANTS REPORT LETTER AND NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE> 8
MALITZ, WEINSTEIN & RUBIN CO. CERTIFIED PUBLIC ACCOUNTANTS. CLEVELAND, OHIO
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS Exhibit D
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
- -----------------------------------------
Basis of Accounting
-------------------
The accompanying financial statements have been prepared on the accrual
method of accounting used for federal income tax purposes. Consequently,
certain revenues and expenses are recognized in the determination of income
in different reporting periods than they would be if the financial
statements were prepared in conformity with generally accepted accounting
principles. Although income tax rules are used to determine the timing of
the reporting of revenues and expenses, nontaxable revenues and
nondeductible expenses are included in the determination of net income.
Net Income - Income Tax Basis
-----------------------------
In accordance with the Company's policy, net income - income tax basis
includes nontaxable revenue and nondeductible expenses in addition to taxable
revenue and deductible expenses.
Property and Equipment
----------------------
If an expenditure results in an asset having an estimated useful life that
extends beyond the year of acquisition, the expenditure is capitalized and
depreciated over the estimated useful life of the asset. Building,
improvements, and equipment are recorded at cost and are depreciated using
Straight-Line or Accelerated Cost Recovery Methods as follows:
<TABLE>
<S> <C> <C>
Buildings 19 Years ACRS - Straight-Line
Building Improvements 10 Years ACRS - Straight-Line
Equipment & Improvements 5 Years ACRS
</TABLE>
Accordingly, the depreciation and amortization recorded is not purported to
be an accurate reflection of economic depreciation and amortization.
Adjustments Necessary To Conform With Generally Accepted Accounting
-------------------------------------------------------------------
Principles (GAAP)
-----------------
As stated in the accountants report and previously in Note 1 of the Notes To
Financial Statements, the Company has used various depreciation and
amortization methods which do not conform to generally accepted accounting
principles (GAAP). Had the Company conformed to GAAP the accumulated
depreciation and amortization and partners' Capital accounts would be
adjusted as follows:
<TABLE>
<CAPTION>
BEGINNING ENDING
--------- ------
<S> <C> <C>
BALANCE SHEET
Accumulated Depreciation
and Amortization $(3,225,566.) $(3,664,018.)
============= =============
Partners' Capital $(2,613,052.) $(3,023,668.)
============= =============
STATEMENT OF OPERATIONS
Net Income For The Year $(409,940.)
===========
<FN>
SEE ACCOUNTANTS REPORT LETTER AND NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE> 9
MALITZ, WEINSTEIN & RUBIN CO. CERTIFIED PUBLIC ACCOUNTANTS. CLEVELAND, OHIO
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS Exhibit D
(Continued)
NOTE 2 - TRANSACTIONS WITH RELATED PARTY
- -----------------------------------------
The property, which is located in Toledo, Ohio is managed by the Mid-America
Management Corporation.
Accounts Payable in the amount of $1,890,218. are due to the management
company.
NOTE 3 - MORTGAGE PAYABLE
- --------------------------
The land and buildings owned by the Company are encumbered by mortgages
securing two notes; one to New York Life Insurance (due in 1999) and the
other to Realty Refund Trust (due in 1994). One of the limited partners of
the partnership is also Chairman of the Board of Realty Refund Trust.
The Company has a fixed monthly payment of $128,362. To the extent that
this amount will not satisfy the New York Life monthly payment and interest
on the Realty Refund Note, the shortfall will be added to the Realty Refund
note.
SEE ACCOUNTANTS REPORT LETTER AND NOTES TO FINANCIAL STATEMENTS
<PAGE> 10
RIVERVIEW TOWER LIMITED PARTNERSHIP
LIMITED PARTNERSHIP
FINANCIAL STATEMENTS
As At December 31, 1994
<PAGE> 11
MALITZ, WEINSTEIN & RUBIN CO.
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
December 31, 1994
INDEX
<TABLE>
AUDITORS' REPORT
<S> <C>
BALANCE SHEET EXHIBIT A
As At December 31, 1994
ANALYSIS OF PARTNERS' EQUITY SCHEDULE A-1
For The Year Ended December 31, 1994
STATEMENT OF OPERATIONS EXHIBIT B
For The Year Ended December 31, 1994
STATEMENT OF CHANGES IN CASH POSITION EXHIBIT C
For The Year Ended December 31, 1994
NOTES TO FINANCIAL STATEMENTS EXHIBIT D
SCHEDULE OF PROPERTY AND EQUIPMENT EXHIBIT E
For The Years Ended December 31, 1992, 1993 and 1994
SCHEDULE OF ACCUMULATED DEPRECIATION AND AMORTIZATION EXHIBIT F
OF PROPERTY AND EQUIPMENT
For The Years Ended December 31, 1992, 1993 and 1994
</TABLE>
<PAGE> 12
MALITZ, WEINSTEIN & RUBIN CO.
CERTIFIED PUBLIC ACCOUNTANTS
3690 ORANGE PLACE-SUITE 250
CLEVELAND, OHIO 44122-4422
---------------
Telephone (216) 464-9560
---------------
Telecopier (216) 464-2887
CHARLES P. MALITZ, CPA ROBERT W. BIATS
MILTON J. WEINSTEIN, CPA JENNIFER L. GARRIS
KIMBALL E. RUBIN, CPA GARY L. FERBER, CPA
STEVEN MARTON, CPA (1937-1990)
STEPHEN L. WOLF, CPA
KEVIN B. ROTENBERRY, CPA
February 24, 1995
INDEPENDENT AUDITOR'S REPORT
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
We have audited the accompanying balance sheet of Riverview Tower Limited
Partnership, A Limited Partnership, as of December 31, 1994, and the related
statements of partners' equity, operations and changes in cash position for the
year then ended. These financial statements and the schedules referred to
below are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and schedules based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Riverview Tower Limited Part-
nership, A Limited Partnership, as at December 31, 1994, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The information contained in Exhibits E and F is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. This information has been subjected to the audit-
ing procedures applied in our audit of the basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Malitz, Weinstein & Rubin Co.
<PAGE> 13
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
BALANCE SHEET Exhibit A
As At December 31, 1994
<TABLE>
<CAPTION>
ASSETS
-------
<S> <C>
Cash $ 150.
Accounts Receivable 183.
Escrow Receivable 163,377.
Prepaid Expenses 24,248.
Property and Equipment 16,705,077.
Less: Accumulated Depreciation and
Amortization (4,102,470.)
-------------
TOTAL ASSETS $ 12,790,565.
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
<S> <C>
LIABILITIES
Accounts Payable $ 320,001.
Accrued Interest and Real Estate Taxes 360,280.
Security Deposits 2,482.
Mortgage Payable 11,937,438.
-------------
Total Liabilities $ 12,620,201.
-------------
PARTNERS' EQUITY - SCHEDULE A-1 170,364.
-------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 12,790,565.
</TABLE>
<PAGE> 14
Schedule A-1
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
ANALYSIS OF PARTNERS' EQUITY
For The Year Ended December 31, 1994
<TABLE>
<CAPTION>
BALANCE NET BALANCE
BEGINNING INCOME ENDING
----------- ----------- ------------
<S> <C> <C> <C>
GENERAL PARTNERS $ (403,183.) $ 283,918. $ (119,265.)
LIMITED PARTNERS (2,620,485.) 2,910,114. 289,629.
TOTALS $(3,023,668.) $ 3,194,032. $ 170,364.
</TABLE>
<PAGE> 15
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS Exhibit B
For The Year Ended December 31, 1994
<TABLE>
<S> <C>
INCOME
Rentals $ 4,314,541.
Excess Operating and Tax Charges 2,656,961.
Garage 382,448.
Antenna 142,841.
Total Income $ 7,496,791.
OPERATING EXPENSES
Custodial and Manager $ 302,628.
Elevator Maintenance 114,630.
Insurance 71,410.
Management Fees 120,000.
Office Expense 67,249.
Professional Fees 43,406.
Repairs and Maintenance 900,374.
Supplies (29,272.)
Taxes - Real Estate 271,360.
Taxes - Other 2,659.
Travel 155.
Utilities 854,087.
General Expenses 4,891.
Total Operating Expenses 2,723,577.
INCOME BEFORE INTEREST EXPENSE, DEPRECIATION
AND AMORTIZATION $ 4,773,214.
LESS: Interest Expense 1,140,730.
INCOME BEFORE DEPRECIATION AND AMORTIZATION 3,632,484.
LESS: Depreciation and Amortization 438,452.
NET INCOME FOR THE YEAR $ 3,194,032.
</TABLE>
<PAGE> 16
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN CASH POSITION Exhibit C
For The Year Ended December 31, 1994
<TABLE>
<S> <C>
CASH GENERATED BY OPERATIONS:
Net Income $ 3,194,032.
Depreciation Amortization 438,452.
--------------
Total 3,632,484.
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Current Assets - Increase (Decrease)
Receivables $ 323.
Prepaids and Escrows (4,987.)
Current Liabilities - Increase (Decrease)
Accounts Payable (1,772,043.)
Security Deposits 2,482.
Accrued Expenses and Taxes (46,094.)
--------------
Total (1,820,319.)
NET CASH PROVIDED BY OPERATIONS 1,812,165.
INVESTING ACTIVITIES -0-
FINANCING ACTIVITIES
Decrease In Debt (1,821,177.)
INCREASE (DECREASE) IN CASH $ (9,012.)
CASH BALANCE - BEGINNING 9,162.
CASH BALANCE - ENDING $ 150.
SUPPLEMENTAL DISCLOSURE
Cash Paid During The Year For Interest 1,112,312.
</TABLE>
<PAGE> 17
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS Exhibit D
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------
Accounting Method
-----------------
The Partnership keeps its records and prepares its financial statements on
the accrual basis.
Property and Equipment
----------------------
The fixed assets are recorded at cost and are being depreciated as follows:
<TABLE>
<S> <C> <C>
Buildings 40 Years Straight-Line
Building Improvements 40 Years Straight-Line
Equipment and Improvements 10 Years Straight-Line
</TABLE>
NOTE 2 - TRANSACTIONS WITH RELATED PARTY
- ----------------------------------------
The property, which is located in Toledo, Ohio is managed by the Mid America
Management Corporation.
Accounts Payable in the amount of $137,244. are due to the management
company.
<PAGE> 18
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS Exhibit D
(Continued)
NOTE 3 - MORTGAGE PAYABLE
The land and buildings owned by the Company are encumbered by mortgages
securing two notes; one to New York Life Insurance (due in 1999) and the
other to Realty Refund Trust (due in 1996). One of the limited partners of
the partnership is also Chairman of the Board of Realty Refund Trust.
The Company has a fixed monthly principal and interest payment of $74,195.
on the first mortgage plus an interest only payment on the Realty Refund
note at 10% per annum. In addition, the Company has agreed to pay $850,000.
against the outstanding amount due on January 1, 1995 and January 1, 1996.
The Company has also agreed to deposit with Realty Refund Trust in escrow
all excess cash flow. The funds will be made available for tenant improve-
ments or third party leasing commissions. The amount due for 1994 is
$304,291.
NOTE 4 - LEASE AMENDMENT AND EXTENSION
- --------------------------------------
On June 2, 1994, the Company modified its lease with Owens-Corning
Fiberglass Corporation as follows:
The tenant has extended its lease to December 31, 1996 and agreed to a lease
extension fee of $5,000,000. payable June, 1994, January, 1995 and January,
1996. There were also modifications of lease and operating expense payment
terms.
<PAGE> 19
<TABLE>
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
SCHEDULE OF PROPERTY AND EQUIPMENT Exhibit E
For The Years Ended December 31, 1992, 1993 and 1994
<CAPTION>
1992
----
BALANCE
AT BEGINNING ADDITIONS BALANCE AT END
OF PERIOD AT COST RETIREMENTS OF PERIOD
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Building $13,771,320. $13,771,320.
Building Improvements 1,473,220. 1,473,220.
Equipment 551,143. 551,143.
Land 887,000. 887,000.
------------ ------------ ------------ ------------
Total $16,682,683. $ -0-. $ -0-. $16,682,683.
============ ============ ============ ============
1993
----
Building $13,771,320. $13,771,320.
Building Improvements 1,473,220. 1,473,220.
Equipment 551,143. $ 22,394. 573,537.
Land 887,000. 887,000.
------------ ------------ ------------ ------------
Total $16,682,683. $ 22,394. $ -0-. $16,705,077.
============ ============ ============ ============
1994
----
Building $13,771,320. $13,771,320.
Building Improvements 1,473,220. 1,473,220.
Equipment 573,537. 573,537.
Land 887,000. 887,000.
------------ ------------ ------------ ------------
Total $16,705,077. $ -0-. $ -0-. $16,705,077.
============ ============ ============ ============
SEE ACCOUNTANTS REPORT LETTER AND NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE> 20
<TABLE>
RIVERVIEW TOWER LIMITED PARTNERSHIP
A LIMITED PARTNERSHIP
SCHEDULE OF ACCUMULATED DEPRECIATION AND AMORTIZATION Exhibit F
OF PROPERTY AND EQUIPMENT
For The Years Ended December 31, 1992, 1993 and 1994
<CAPTION>
1992
----
BALANCE ADDITIONS
AT BEGINNING CHARGED TO BALANCE AT END
PERIOD COSTS & EXPENSES RETIREMENTS OF PERIOD
------------ ---------------- ------------ --------------
<S> <C> <C> <C> <C>
Building $2,233,494. $344,283. $2,567,777.
Building Improvements 231,217. 36,816. 268,033.
Equipment 333,522. 56,234. 389,756.
----------- --------- ---------- -----------
Total $2,798,233. $437,333. $ -0- $3,225,566.
=========== ========= ========== ===========
<CAPTION>
1993
----
Building $2,567,777. $344,283. $2,912,060.
Building Improvements 268,033. 36,816. 304,849.
Equipment 389,756. 57,353. 447,109.
----------- --------- ---------- -----------
Total $3,225,566. $438,452. $ -0- $3,664,018.
=========== ========= ========== ===========
<CAPTION>
1994
----
Building $2,912,060. $344,283. $3,256,343.
Building Improvements 304,849. 36,816. 341,665.
Equipment 447,109. 57,353. 504,462.
----------- --------- ---------- -----------
Total $3,664,018. $438,452. $ -0- $4,102,470.
=========== ========= ========== ===========
SEE ACCOUNTANTS REPORT LETTER AND NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE> 21
THE RIVERVIEW TOWER LIMITED PARTNERSHIP
FINANCIAL REPORT
DECEMBER 31, 1995
<PAGE> 22
THE RIVERVIEW TOWER LIMITED PARTNERSHIP
CONTENTS
- --------------------------------------------------------------------------------
Page
----
AUDITORS' REPORT ON THE FINANCIAL STATEMENTS 1
FINANCIAL STATEMENTS
Balance sheet 2
Statement of income 3
Statement of partners' equity 4
Statement of cash flows 5
Notes to financial statements 6-7
AUDITORS' REPORT ON ACCOMPANYING INFORMATION 8
ACCOMPANYING INFORMATION
Schedules of property and equipment 9
Schedules of accumulated depreciation and amortization
of property and equipment 10
<PAGE> 23
[LOGO] [HAUSSER & TAYLOR LETTERHEAD]
Partners
The Riverview Tower Limited Partnership
Cleveland, Ohio
Independent Auditors' Report
----------------------------
We have audited the accompanying statement of assets, liabilities and
partners' deficit - income tax basis of The Riverview Tower Limited Partnership
as of December 31, 1995, and the related statements of revenues and expenses,
partners' deficit, and cash flows - income tax basis for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the financial statements, the Partnership's
policy is to prepare its financial statements on the accounting basis used for
income tax purposes, which is a comprehensive basis of accounting other than
generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the assets, liabilities, and partners' deficit of The
Riverview Tower Limited Partnership as of December 31, 1995, and its revenues
and expenses, partners' deficit, and cash flows for the year then ended, on the
basis of accounting described in the Organization and Summary of Significant
Accounting Policies.
/s/ Hausser & Taylor
Cleveland, Ohio
February 23, 1996
-1-
<PAGE> 24
THE RIVERVIEW TOWER LIMITED PARTNERSHIP
BALANCE SHEET
December 31, 1995
-----------------
<TABLE>
<CAPTION>
ASSETS
- ------
<S> <C> <C>
RENTAL PROPERTY
Land $ 887,000
Building and improvements 15,264,693
Equipment 598,257
-----------
Total 16,749,950
Less accumulated depreciation 4,518,193
-----------
Net rental property $12,231,757
OTHER ASSETS
Cash 150
Accounts receivable 44,533
Prepaid expenses 22,846
Real estate escrow 149,017
Capital reserve escrow 214,291
-----------
Total other assets 430,837
-----------
$12,662,594
===========
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
LIABILITIES
Accounts payable $ 148,316
Accrued interest and real estate taxes 365,075
Security deposits 2,482
Mortgage notes payable 10,413,780
-----------
Total liabilities $10,929,653
PARTNERS' EQUITY 1,732,941
-----------
$12,662,594
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE> 25
THE RIVERVIEW TOWER LIMITED PARTNERSHIP
STATEMENT OF INCOME
Year Ended December 31, 1995
----------------------------
<TABLE>
<CAPTION>
INCOME
<S> <C> <C>
Rental income $3,631,044
Garage 390,413
Antenna 154,855
Excess operating and other pass through charges 1,925,473
----------
Total income $6,101,785
EXPENSES
Custodial and manager expenses 180,286
Depreciation and amortization 415,723
Elevator maintenance 123,746
Insurance 70,302
Interest expense 944,283
Management fees 120,000
Office expense and miscellaneous 128,220
Office salaries 55,132
Professional fees 34,623
Repairs and maintenance 743,561
Security expense 22,419
Sellers' fee 90,000
Supplies 36,462
Taxes - payroll 15,726
Taxes - personal property 2,427
Taxes - real estate 286,871
Travel 1,696
Utilities 1,267,731
----------
Total expenses 4,539,208
----------
NET INCOME $1,562,577
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 26
THE RIVERVIEW TOWER LIMITED PARTNERSHIP
STATEMENT OF PARTNERS' EQUITY
Year Ended December 31, 1995
----------------------------
<TABLE>
<CAPTION>
Balance Net Balance
Beginning Income Distributions Ending
--------- ------ ------------- ------
<S> <C> <C> <C> <C>
GENERAL PARTNERS $ (119,265) $ 208,344 $ - $ 89,079
LIMITED PARTNERS 289,629 1,354,233 - 1,643,862
------------ ----------- ----------- -----------
TOTAL $ 170,364 $ 1,562,577 $ - $ 1,732,941
============ =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE> 27
THE RIVERVIEW TOWER LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
Year Ended December 31, 1995
----------------------------
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 1,562,577
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization $ 415,723
Changes in assets and liabilities:
Increase in accounts receivable (44,350)
Decrease in prepaid expenses 1,402
Decrease in escrow receivables (199,931)
Decrease in accounts payable (171,685)
Increase in accrued interest and taxes 4,795
Total adjustments ------- 5,954
---------
Net cash provided by operating activities 1,568,531
CASH FLOWS FROM INVESTING ACTIVITIES
Building improvements and equipment purchases (44,873)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term debt (1,523,658)
---------
NET CHANGE IN CASH --
CASH - BEGINNING OF YEAR 150
---------
CASH - END OF YEAR $ 150
=========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 944,283
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE> 28
THE RIVERVIEW TOWER LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Purpose - The Riverview Tower Limited Partnership is an Ohio limited
partnership formed for the purpose of owning, leasing and operating an
office building in Toledo, Ohio. The Partnership commenced operations
on July 26, 1985.
B. Use of Estimates - 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.
C. Concentration Account - An affiliate of the general partner utilizes a
concentration account for the various properties it manages. In this
way excess cash for all properties may be invested on a short term
basis and cash disbursements made on behalf of each separate
partnership are funded when necessary.
D. Property and Improvements - The building and related improvements are
being depreciated on straight-line or accelerated cost recovery
methods over periods dictated by statutory requirements.
E. Income Taxes - No provision for income taxes is necessary because any
income or loss is includible in the tax returns of the partners.
NOTE 2. MORTGAGE NOTES PAYABLE
The land and building owned by the Partnership are encumbered by
mortgages securing two notes; one to New York Life Insurance (due in
1999) and the other to Realty Refund Trust (due in 1996). One of the
limited partners of the Partnership is also Chairman of the Board of
Realty Refund Trust.
The Partnership has a fixed monthly principal and interest (at 6.05%)
payment of $74,195 on the first mortgage plus an interest only payment
on the Realty Refund note at 10% per annum. In addition, the
Partnership has agreed to pay $850,000 against the outstanding amount
due on January 1, 1996.
Principal payments on the mortgage notes payable as of December 31,
1995 are as follows:
1996 $ 7,854,792
1997 756,263
1998 803,308
1999 999,417
Total ----------
$ 10,413,780
==========
The fair value of the Partnership's long-term debt is estimated based
on borrowing rates currently available to the Partnership for bank
loans with similar terms and maturities and approximates the carrying
value.
-6-
<PAGE> 29
THE RIVERVIEW TOWER LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3. TRANSACTIONS WITH RELATED PARTY
The property is managed by the Mid-America Management Corporation.
Accounts receivable in the amount of $41,405 are due from the
management company.
The Partnership is obligated to pay a management fee to Mid-America
Management Corporation for certain services with respect to the
operations of the Partnership. The amount of the fee included in
expense for the year ended December 31, 1995 is $120,000.
NOTE 4. OPERATING LEASES
The Partnership's operating revenue is principally obtained from
tenants through rental payments as provided for under noncancelable
operating leases. The tenant leases typically provide for fixed
minimum rent and reimbursement of real estate taxes and operating
costs.
The following is a schedule of minimum future rentals on noncancelable
operating leases as of December 31, 1995 for the next five years:
1996 $ 2,418,850
1997 137,660
1998 42,700
1999 19,540
2000 19,200
$ ---------
Total 2,637,950
=========
NOTE 5. LEASE AMENDMENT AND EXTENSION
On June 2, 1994, the Partnership modified its lease with Owens-Corning
Fiberglas Corporation as follows:
The tenant has extended its lease to December 31, 1996 and agreed to a
lease extension fee of $5,000,000 payable as follows:
June 1994 $ 2,000,000
January 1995 1,500,000
January 1996 1,500,000
Total $ ---------
5,000,000
=========
There were also modifications of lease and operating expense payment
terms.
NOTE 6. SUBSEQUENT EVENTS
The Partnership's principal tenant has not renewed its lease and is
expected to vacate the premises during 1996.
The Partnership has listed the building with a broker and is
attempting to dispose of the property.
-7-
<PAGE> 30
[LOGO] [HAUSER & TAYLOR LETTERHEAD]
Partners
The Riverview Tower Limited Partnership
Cleveland, Ohio
Our audit was made for the purpose of forming an opinion of the basic
financial statements for the year ended December 31, 1995, taken as a whole. The
accompanying information is presented for purposes of additional analysis and is
not a required part of the basic financial statements. The information has been
subjected to the auditing procedures applied in our audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
The supplemental information for 1994 and 1993 which follows was audited by
other accountants whose report dated February 25, 1995, indicated that the
supplemental information is fairly stated in all material respects.
/s/ Hausser & Taylor
Cleveland, Ohio
February 23, 1996
-8-
<PAGE> 31
THE RIVERVIEW TOWER LIMITED PARTNERSHIP
SCHEDULES OF PROPERTY AND EQUIPMENT
Years Ended December 31, 1995, 1994, and 1993
---------------------------------------------
<TABLE>
<CAPTION>
1995
------------------------------------------------------------
Balance
At Beginning Additions Balance At
of Period At Cost Retirements End of Period
---------- -------- ----------- -------------
<S> <C> <C> <C> <C>
Building $13,771,320 $13,771,320
Building improvements 1,473,220 $ 20,152 1,493,372
Equipment 573,537 24,721 598,258
Land 887,000 887,000
---------- --------- ----------- ----------
Total $16,705,077 $ 44,873 $ -- $16,749,950
========== ========= =========== ==========
1994
------------------------------------------------------------
Building $13,771,320 $13,771,320
Building improvements 1,473,220 1,473,220
Equipment 573,537 573,537
Land 887,000 887,000
---------- --------- ----------- ----------
Total $16,705,077 $ -- $ -- $16,705,077
========== ========= =========== ==========
1993
------------------------------------------------------------
Building $13,771,320 $13,771,320
Building improvements 1,473,220 1,473,220
Equipment 551,143 $ 22,394 573,537
Land 887,000 887,000
---------- --------- ----------- ----------
Total $16,682,683 $ 22,394 $ -- $16,705,077
========== ========= =========== ==========
</TABLE>
-9-
<PAGE> 32
THE RIVERVIEW TOWER LIMITED PARTNERSHIP
SCHEDULES OF ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY AND EQUIPMENT
Years Ended December 31, 1995, 1994, and 1993
---------------------------------------------
<TABLE>
<CAPTION>
1995
------------------------------------------------------------
Additions
Balance Charged To
At Beginning Costs and Balance At
of Period Expenses Retirements End of Period
---------- -------- ----------- -------------
<S> <C> <C> <C> <C>
Building $ 3,256,343 $ 344,283 $ 3,600,626
Building improvements 341,665 37,320 378,985
Equipment 504,462 34,120 538,582
---------- --------- ----------- ----------
Total $ 4,102,470 $ 415,723 $ -- $ 4,518,193
========== ========= =========== ==========
1994
------------------------------------------------------------
Building $ 2,912,060 $ 344,283 $ 3,256,343
Building improvements 304,849 36,816 341,665
Equipment 447,109 57,353 504,462
---------- --------- ----------- ----------
Total $ 3,664,018 $ 438,452 $ -- $ 4,102,470
========== ========= =========== ==========
1993
------------------------------------------------------------
Building $ 2,567,777 $ 344,283 $ 2,912,060
Building improvements 268,033 36,816 304,849
Equipment 389,756 57,353 447,109
---------- --------- ----------- ----------
Total $ 3,225,566 $ 438,452 $ -- $ 3,664,018
========== ========= =========== ==========
</TABLE>
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