SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 33-29987
Corporate Realty Income Trust I
(Exact name of registrant as specified in its charter)
Massachusetts 13-6931017
(State of organization) (I.R.S. Employer
identification No.)
388 Greenwich Street, 34th Floor, New York, New York 10013
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 816-8237
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.
Yes X No
<PAGE>
CORPORATE REALTY INCOME TRUST I
Index
Page No.
Part I Financial information 3
Balance Sheets --
June 30, 1996 and December 31, 1995 4
Statements of Income --
For the three months ended June 30, 1996 and 1995 5
Statements of Income --
For the six months ended June 30, 1996 and 1995 6
Statements of Cash Flows --
For the six months ended June 30, 1996 and 1995 7
Notes to the Financial Statements 8
Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Part II Other information 11
Signatures 12
<PAGE>
PART I. FINANCIAL INFORMATION
Item I. Financial Statements
The summarized financial information contained herein is unaudited; however, in
the opinion of management, all adjustments necessary for a fair presentation of
such financial information have been included.
<PAGE>
CORPORATE REALTY INCOME TRUST I
BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
<S> <C> <C>
ASSETS: (Unaudited)
Real estate, at cost:
Land $ 715,400 $ 715,400
Buildings 31,884,600 31,884,600
32,600,000 32,600,000
Less: accumulated depreciation 4,655,985 4,257,428
27,944,015 28,342,572
Cash and cash equivalents 782,042 531,435
Rent receivable - 206,510
Prepaid expenses 118,354 101,877
Deferred rent receivable 1,945,650 1,867,274
Deferred financing costs, net of
accumulated amortization of $132,162 in
1996 and $120,731 in 1995 93,996 105,427
Total assets $30,884,057 $31,155,095
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Mortgage loans payable $15,438,042 $15,470,369
Accrued expenses 59,636 80,652
Due to affiliates 43,631 9,590
Dividends payable 353,771 353,772
Total liabilities 15,895,080 15,914,383
Shareholders' equity:
Shares of beneficial interest $.10 par value;
20,000,000 shares authorized; 1,010,776
shares issued and outstanding 101,078 101,078
Additional paid-in-capital 14,887,899 15,139,634
Retained earnings - -
Total shareholder's equity 14,988,977 15,240,712
Total liabilities and shareholders' equity $30,884,057 $31,155,095
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CORPORATE REALTY INCOME TRUST I
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Income:
Rental $ 855,817 $ 906,598
Dividend and interest 9,455 6,088
865,272 912,686
Expenses:
Interest 352,043 353,529
Depreciation 199,279 199,279
General and administrative 40,661 40,899
Annual advisor fee 43,381 43,400
635,364 637,107
Net income $ 229,908 $ 275,579
Net income per share $ .23 $ .27
Dividend per share $ .35 $ .35
</TABLE>
See accompanying notes to financial statements
<PAGE>
CORPORATE REALTY INCOME TRUST I
STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Income:
Rental $ 1,711,633 $ 1,762,415
Dividend and interest 13,624 11,628
1,725,257 1,774,043
Expenses:
Interest 704,469 715,227
Depreciation 398,557 398,557
General and administrative 79,524 75,464
Annual advisor fee 86,899 85,617
1,269,449 1,274,865
Net income $ 455,808 $ 499,178
Net income per share $ .45 $ .49
Dividend per share $ .35 $ .35
</TABLE>
See accompanying notes to financial statements
<PAGE>
CORPORATE REALTY INCOME TRUST I
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 455,808 $ 499,178
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of
deferred financing costs 409,987 409,906
Interest accrued into the balance
of the mortgage payable - 24,486
Changes in assets and liabilities:
Decrease in rent receivable 206,510 (78,750)
Increase in prepaid expenses (16,477) (10,792)
Decrease in accrued expenses (21,016) (19,857)
Increase in deferred rent receivable (78,376) (163,012)
Increase in amount due to affiliate 34,041 2,468
Increase in financing costs - (2,463)
Total adjustments 534,669 161,986
Net cash provided by operating activities 990,477 661,164
Cash flows from financing activities:
Principal payments on mortgage (32,327) (29,410)
Dividends paid to shareholders (707,543) (707,544)
Net cash used in financing activities (739,870) (736,954)
Net increase (decrease) in cash and cash equivalents 250,607 (75,790)
Cash and cash equivalents at beginning of period 531,435 766,945
Cash and cash equivalents at end of period $ 782,042 $ 691,155
</TABLE>
Supplemental disclosure of cash flow information:
Cash paid for interest during the six months ended June 30, 1996 and 1995
amounted to $628,508 and $687,453, respectively.
Non-cash transactions:
Dividends declared and unpaid as of June 30, 1996 and 1995 amounted to
$353,772.
See accompanying notes to financial statements.
<PAGE>
CORPORATE REALTY INCOME TRUST
I
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(Unaudited)
1. GENERAL
The accompanying financial statements and related notes of Corporate
Realty Income Trust I (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial reporting and
with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, certain information and footnote disclosures normally included in
financial statements prepared under generally accepted accounting principles
have been condensed or omitted pursuant to such regulations. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation of the Company's financial
position, results of operations and cash flows have been included. These
financial statements should be read in conjunction with the Company's Form 10-K
for the year ended December 31, 1995.
The amount of net income per share was calculated using the number of
shares outstanding of 1,010,776 for the periods ended June 30, 1996 and 1995.
Dividends declared as of June 30, 1996 and 1995 amounted to $.35 per share.
2. RENTAL INCOME
In accordance with the Financial Accounting Standards Board Statement
No. 13, "Accounting for Leases," the Company recognizes rental income on a
straight-line basis over the fixed term of the lease period. Rental income is
net of the rent due to Circuit City under the terms of the ground lease.
Deferred rent receivable represents unbilled future rentals. The following
reconciles rental income received to rental income recognized for the three
months ended June 30, 1996 and 1995.
<TABLE>
<CAPTION>
For the three months For the six months
ended June 30, ended June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Rental income received $846,629 $816,628 $1,633,257 $1,599,403
Deferred rent 39,188 89,970 78,376 163,012
Rental income recognized $855,817 $906,598 $1,711,633 $1,762,415
</TABLE>
<PAGE>
CORPORATE REALTY INCOME TRUST I
NOTES TO FINANCIAL STATEMENTS (CONT'D)
JUNE 30, 1996
(Unaudited)
3. TRANSACTIONS WITH AFFILIATES
The Company maintains an interest-bearing customer account with Smith
Barney Inc. For the three and six months ended June 30, 1996 and 1995, the
Company earned interest on this account of $9,455 and $13,624, respectively and
$6,088 and $11,628, respectively. For purposes of these financial statements,
the Company considers this account to be cash.
The Company incurred expenses of $20,000 for the six months ended June 30,
1996 for administrative services performed by the Advisor which was paid as of
June 30, 1996. The Advisor earned $86,899 of the annual advisor fee for the
six months ended June 30, 1996, of which $43,381 was unpaid as of such date.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996
Liquidity and Capital Resources
At June 30, 1996, the Company had cash of approximately $884,000 which was
invested in an interest bearing account. Of this amount, approximately
$438,000 represented a working capital reserve, $353,771 was reserved to pay
the quarterly dividend in August 1996 and the balance was reserved for
operations.
The Company expects sufficient cash flow to be generated from operations to
meet its current operating and debt service requirements on a short-term and
long-term basis. The Company's only significant liabilities are mortgages
aggregating approximately $15,438,042, maturing at various dates in
approximately four to six years. The Company anticipates satisfying these
mortgages with the proceeds of refinancings or sales of the underlying
properties.
Results of Operations
Net income for the three and six months ended June 30, 1996 decreased slightly
from the corresponding periods in 1995 due to an adjustment in the calculation
of straight-line rent. However, actual rental income received increased due to
the increase in rental income from the Circuit City building which became
effective March 1, 1995. This increase in rental income increased the amount
of cash available for investment which resulted in increased interest income
in 1996. The Company completed the property acquisition stage of its life
cycle in 1992 and has been in the portfolio management stage since the
beginning of 1993. As a result, rental income and related expenses are
comparable for the quarters ended March 31, 1996 and 1995.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - 27.1 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter in
which this report is filed.
<PAGE>
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 REALTY INCOME TRUST I
(Registrant)
Dated: August 13, 1996 By: /s/
James C. Cowles
Chairman, President, and Treasurer
Dated: August 13, 1996 By: /s/
Valerie A. St. John
Controller
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27.1
FINANCIAL DATA SCHEDULE
CORPORATE REALTY INCOME TRUST I
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTERLY PERIOD ENDED JUNE
30, 1996 AS REPORTED ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 782,042
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 900,396
<PP&E> 32,600,000
<DEPRECIATION> 4,655,985
<TOTAL-ASSETS> 30,884,057
<CURRENT-LIABILITIES> 457,038
<BONDS> 0
0
0
<COMMON> 101,078
<OTHER-SE> 14,887,899
<TOTAL-LIABILITY-AND-EQUITY> 30,884,057
<SALES> 855,817
<TOTAL-REVENUES> 865,272
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 283,321
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 352,043
<INCOME-PRETAX> 229,908
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 229,908
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
