<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1997
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or
[ ] TRANSITION REPORT PURSUANT TO 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
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Commission file number 0-17620
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CORPORATE PROPERTY ASSOCIATES 8, L.P., A DELAWARE LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 13-3469700
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
50 ROCKEFELLER PLAZA, NEW YORK, NEW YORK 10020
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(Address of principal executive offices) (Zip Code)
(212) 492-1100
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
[ ] Yes [ ] No
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CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
PART I
Item 1. - FINANCIAL INFORMATION
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30
1996 1997
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(Note) (Unaudited)
<S> <C> <C>
ASSETS:
Land, buildings and personal property,
net of accumulated depreciation of
$10,293,440 at December 31, 1996 and
$9,570,323 at June 30, 1997 $ 48,699,455 $ 42,364,192
Net investment in direct financing leases 47,095,414 52,723,914
Equity investments 6,513,068 6,328,444
Cash and cash equivalents 4,850,145 6,497,813
Other assets 1,471,121 1,750,756
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Total assets $ 108,629,203 $109,665,119
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LIABILITIES:
Mortgage notes payable $ 44,139,958 $ 43,598,288
Note payable 5,102,144 5,102,144
Accrued interest payable 473,317 446,081
Accounts payable and accrued expenses 274,822 284,707
Accounts payable to affiliates 209,112 290,837
Prepaid and deferred rental income and
security deposits 698,443 679,690
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Total liabilities 50,897,796 50,401,747
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PARTNERS' CAPITAL:
General Partners (103,774) 49,423
Limited Partners (67,582 Limited
Partnership Units issued and outstanding) 57,835,181 59,213,949
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Total partners' capital 57,731,407 59,263,372
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Total liabilities and
partners' capital $ 108,629,203 $109,665,119
============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
Note:The balance sheet at December 31, 1996 has been derived from the audited
financial statements at that date.
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CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, 1996 June 30, 1997 June 30, 1996 June 30, 1997
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<S> <C> <C> <C> <C>
Revenues:
Rental income from
operating leases $ 2,269,648 $2,326,720 $ 4,493,720 $4,649,957
Interest from direct
financing leases 1,604,118 1,612,771 3,208,587 3,226,819
Other interest income 83,800 73,508 143,373 123,483
Other income 244,342 244,342 213,155
4,201,908 4,012,999 8,090,022 8,213,414
----------- ---------- ----------- ----------
Expenses:
Interest on mortgages
and note payable 1,346,999 1,109,440 2,708,327 2,257,962
Depreciation 354,445 349,346 824,177 706,763
General and administrative 199,443 279,318 345,829 465,011
Property expense 132,988 179,658 210,375 300,097
Amortization 9,277 7,643 18,554 15,287
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2,043,152 1,925,405 4,107,262 3,745,120
----------- ---------- ----------- ----------
Income before (loss)
income from
equity investments 2,158,756 2,087,594 3,982,760 4,468,294
(Loss) income from equity
investments (14,104) 209,778 (29,112) 369,182
Earnings from hotel operations 432,738 933,031
----------- ---------- ----------- ----------
Net income $ 2,577,390 $2,297,372 $ 4,886,679 $4,837,476
=========== ========== =========== ==========
Net income allocated
to General Partners $ 257,739 $ 229,738 $ 488,668 $ 483,748
=========== ========== =========== ==========
Net income allocated
to Limited Partners $ 2,319,651 $2,067,634 $ 4,398,011 $4,353,728
=========== ========== =========== ==========
Net income per Unit:
(67,582 Limited
Partnership Units) $ 34.33 $ 30.59 $ 65.08 $ 64.42
=========== ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 4
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
STATEMENTS of CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------------
1996 1997
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,886,679 $ 4,837,476
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 842,731 722,050
Other noncash items 147,180 90,598
Loss from equity investments 29,112
Net change in operating assets and liabilities (744,352 (282,424)
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Net cash provided by operating activities 5,161,350 5,367,700
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Cash flows from investing activities:
Distributions from equity investments in excess of equity income 142,224 184,624
Additional capitalized costs (153,342)
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Net cash (used in) provided by investing activities (11,118 184,624
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Cash flows from financing activities:
Distributions to partners (3,257,453 (3,305,511)
Proceeds from issuance of mortgage 4,000,000 4,099,560
Prepayment of mortgage payable (3,901,431 (4,021,244)
Deferred financing costs (57,475)
Payments on mortgage principal (1,174,227 (619,986)
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Net cash used by financing activities (4,333,111 (3,904,656)
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Net increase in cash and cash equivalents 817,121 1,647,668
Cash and cash equivalents, beginning of period 5,119,385 4,850,145
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Cash and cash equivalents, end of period $ 5,936,506 $ 6,497,813
=========== ============
Supplemental disclosure of cash flows information:
Interest paid $ 2,808,067 $ 2,285,198
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During the six-month period ended June 30, 1997, a lease was reclassified as
follows:
Land and buildings, net of accumulated depreciation of $1,429,880 $ (5,628,500)
Net investment in direct financing leases 5,628,500
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$ -
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</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 5
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Note 1. Basis of Presentation:
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. For further information, refer to the financial statements and
footnotes thereto included in the Partnership's Annual Report on Form 10-K for
the year ended December 31, 1996.
Note 2. Distributions to Partners:
Distributions declared and paid to partners during the six months ended June
30, 1997 are summarized as follows:
<TABLE>
<CAPTION>
Quarter Ended General Partners Limited Partners Per Limited Partner Unit
- ----------------- ---------------- ---------------- ------------------------
<S> <C> <C> <C>
December 31, 1996 $165,200 $1,486,804 $22.00
======== ========== ======
March 31, 1997 $165,351 $1,488,156 $22.02
======== ========== ======
</TABLE>
A distribution of $22.04 per Limited Partner Unit for the quarter ended June 30,
1997 was declared and paid in July 1997.
Note 3. Transactions with Related Parties:
For the three-month and six-month periods ended June 30, 1996, the Partnership
incurred leasing fees of $3,146 and $6,194, respectively, and general and
administrative expense reimbursements of $38,489 and $61,335, respectively,
payable to an affiliate. For the three-month and six-month periods ended June
30, 1997, the Partnership incurred leasing fees of $6,814 and $12,429,
respectively, and general and administrative expense reimbursements of $50,873
and $108,394, respectively, payable to an affiliate. Management believes that
ultimate payment of a preferred return to the General Partners of $53,055,
based upon cumulative proceeds of sales of assets, is reasonably possible but
not probable, as defined pursuant to Statement of Financial Accounting
Standards No. 5.
The Partnership, in conjunction with certain affiliates, is a participant in a
cost sharing agreement for the purpose of renting and occupying office space.
Under the agreement, the Partnership pays its proportionate share of rent and
other costs of occupancy. Net expenses incurred for the six months ended June
30, 1996 and 1997 were $80,163 and $64,937, respectively.
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CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
Note 4. Industry Segment Information:
The Partnership's operations consist of the direct and indirect investment in
and the leasing of industrial and commercial real estate. For the six-month
periods ended June 30, 1996 and 1997, the Partnership earned its real estate
leasing revenues (rental income plus interest income from financing leases)
from its directly owned real estate investments as follows:
<TABLE>
<CAPTION>
1996 % 1997 %
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<S> <C> <C> <C> <C>
Lease Obligor:
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Advanced System Applications, Inc. $1,539,547 20% $1,504,547 19%
Sybron Acquisition Company 1,245,960 16 1,245,960 16
Dr Pepper Bottling Company of Texas 999,500 13 999,500 13
Amerisig, Inc. 697,187 9 756,709 10
High Voltage Engineering Corporation 591,623 8 587,291 7
Orbital Sciences Corporation 488,689 6 488,689 6
United Stationers Supply Co. 406,354 5 406,354 5
Furon Company 416,283 6 389,950 5
Detroit Diesel Corporation 364,539 5 364,539 5
AutoZone, Inc. 262,195 3 262,195 3
NVRyan L.P. 229,536 3 247,759 3
U.S. Postal Service 79,942 1 239,825 3
Mayfair Molded Products Corporation 230,377 3 230,377 3
Winn-Dixie Stores, Inc. 67,250 1 67,250 1
Other 54,975 1 57,481 1
Federal Express Corporation 28,350 28,350
---------- --- ---------- ---
$7,702,307 100% $7,876,776 100%
========== === ========== ===
</TABLE>
Note 5. Investment in Operating Partnership:
The Partnership owns 493,664 limited partnership units in American General
Hospitality Operating Partnership, L.P., the operating partnership of American
General Hospitality Corporation ("AGH"), a publicly-traded real estate
investment trust. The Partnership's investment in the operating partnership is
accounted for under the equity method. As of August 1, 1997, the Partnership
has the right to convert the limited partnership units on a one-for-one basis
to shares of common stock in AGH.
AGH's unaudited financial statements reported total assets of $369,974,000 and
shareholders' equity of $279,960,000 as of March 31, 1997 and total revenues of
$9,903,000 and net income of $4,053,000 for the three months ended March 31,
1997.
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CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
Note 6. Properties Leased to Furon Company:
The Partnership and CPA(R):9, an affiliate, own properties leased to Furon
Company ("Furon") with 32.28% and 67.72% interests, respectively. On June 20,
1997, the Furon lease was restated and amended in connection with a transaction
which resulted in the Partnership and CPA(R):9 relinquishing ownership of
properties in Mt. Pleasant, Texas and Milwaukee, Wisconsin in exchange for a
property in Aurora, Ohio. No cash was paid or received in connection with the
exchange. As amended, the initial lease was extended by five years from July
2007 to July 2012. The Partnership's share of annual rent of $779,900 was
unchanged with the next rent increase scheduled for February 1999.
In connection with the exchange, the Partnership and CPA(R):9 refinanced an
existing limited recourse loan of $4,021,244 collateralized by the Furon
properties which bore interest at an annual interest rate of 10.40% and
obtained a new limited recourse loan of $4,099,600. The new loan will initially
require monthly payments of interest and principal of $78,403 at an annual
interest rate of 8.42% and is based on a 17 1/2 year amortization schedule. If
Furon's credit rating is downgraded, the annual interest rate on the loan may
be increased to 9.02%. In July 2002, the interest rate is scheduled to be reset
to the Treasury Yield Percentage plus 5%, subject to certain adjustments. The
loan will mature in July 2012, at which time a balloon payment will be due. The
mortgage lenders have the right to exercise a put option in July 2002 which
would, if exercised, require the Partnership and CPA(R):9 to purchase the loan.
The Partnership and CPA(R):9 may prepay the loan without any prepayment premium
at the interest reset date.
As a result of the refinancing, annual cash flow will increase by $26,067. As
the exchange of properties is a nonmonetary transaction for financial reporting
purposes, no gain or loss has been recognized.
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<PAGE> 8
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CORPORATE PROPERTY ASSOCIATES 8, L.P.,
a Delaware limited partnership
By: EIGHTH CAREY CORPORATE PROPERTY, INC.
09/03/97 By: /s/ Steven M. Berzin
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Date Steven M. Berzin
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
09/03/97 By: /s/ Claude Fernandez
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Date Claude Fernandez
Executive Vice President and
Chief Administrative Officer
(Principal Accounting Officer)
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