<PAGE> 1
As Filed Pursuant to Rule 424(b)(3)
Registration No. 033-99994
CORPORATE PROPERTY ASSOCIATES 12
INCORPORATED
SUPPLEMENT DATED APRIL 25, 1997 TO
PROSPECTUS DATED MARCH 6, 1997
(HEREINAFTER THE "PROSPECTUS")
SUMMARY OF THE SUPPLEMENT
EXPERTS (PAGE 1)
AUDITED FINANCIAL STATEMENTS (PAGE 2)
This section sets forth the Company's audited financial statements for the
years ended December 31, 1994, 1995 and 1996.
PRIOR PERFORMANCE TABLES (PAGE 10)
This section sets forth the Company's prior performance tables for the
periods ended December 31, 1996.
Capitalized terms not defined herein will have the meanings ascribed to
them in the Prospectus.
<PAGE> 2
EXPERTS
The consolidated balance sheets as of December 31, 1994, 1995 and 1996 and
the consolidated statements of operations, shareholders' equity and cash flows
for the period from inception (July 30, 1993) to December 31, 1993 and for the
years ended December 31, 1994, 1995 and 1996 of Corporate Property Associates 12
Incorporated and Subsidiaries, and the balance sheets of each of BB Property
Company and GENA Property Company as of December 31, 1994 and 1995 and the
Statements of income, partners' capital and cash flows for the years ended
December 31, 1994 and 1995, all included in this prospectus, have been included
herein in reliance on the reports of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
1
<PAGE> 3
AUDITED FINANCIAL STATEMENTS
INDEX OF FINANCIAL STATEMENTS:
Report of Independent Accountants.
Consolidated Balance Sheets of the Company as of December 31, 1994, 1995 and
1996.
Consolidated Statements of Operations of the Company for the years ended
December 31, 1994, 1995 and 1996.
Consolidated Statements of Shareholders' Equity of the Company for the years
ended December 31, 1994, 1995 and 1996.
Consolidated Statements of Cash Flows of the Company for the years ended
December 31, 1994, 1995 and 1996.
Notes to Consolidated Financial Statements.
Schedule of Real Estate and Accumulated Depreciation.
2
<PAGE> 4
REPORT of INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Corporate Property Associates 12 Incorporated
and Subsidiaries:
Our report on the consolidated financial statements of Corporate
Property Associates 12 Incorporated and Subsidiaries has been incorporated by
reference in this Form 10-K from page 5 of the 1996 Annual Report to
Shareholders of Corporate Property Associates 12 Incorporated and Subsidiaries.
In connection with our audits of such financial statements, we have also audited
the related financial statement schedule on pages 29 to 31 of this Form 10-K.
In our opinion, the financial statement schedule referred to above,
when considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
/s/Coopers & Lybrand L.L.P.
New York, New York
March 24, 1997
- 3 -
<PAGE> 5
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
ASSETS:
Real estate leased to others:
Accounted for under the
operating method:
Land $ 5,295,898 $ 17,325,553
Buildings 30,153,241 67,673,595
----------- ------------
35,449,139 84,999,148
Accumulated depreciation 390,307 1,337,513
----------- ------------
35,058,832 83,661,635
Net investment in direct financing leases $ 6,472,639 13,545,609 40,846,486
----------- ----------- ------------
Real estate leased to others 6,472,639 48,604,441 124,508,121
Equity investments 11,671,073 10,382,492 16,091,935
Cash and cash equivalents 10,661,712 20,239,764 50,893,314
Deferred offering costs 1,401,664 1,066,262 654,402
Accrued rents and interest receivable 141,716 271,146
Other assets 236,520 738,102 874,926
----------- ----------- ------------
Total assets $30,443,608 $81,172,777 $193,293,844
=========== =========== ============
LIABILITIES:
Limited recourse mortgage notes payable $ 3,328,417 $18,127,538 $ 46,286,159
Accounts payable to affiliates 2,163,364 2,499,284 2,258,581
Accounts payable and accrued expenses 76,084 104,141 256,136
Deferred acquisition fees payable to an affiliate 712,467 1,577,639 3,414,097
Dividends payable 345,751 1,189,830 2,094,191
Accrued interest payable 28,661 136,086 418,035
Prepaid rental income and security deposits 884,581 1,379,288
----------- ----------- ------------
Total liabilities 6,654,744 24,519,099 56,106,487
----------- ----------- ------------
Common stock, $.001 par value;
526,921 shares; issued and
outstanding; subject to redemption 5,269,210
SHAREHOLDERS' EQUITY:
Common stock, $.001 par value; authorized,
40,000,000 shares; issued and outstanding,
2,717,263, 6,027,868 and 15,668,403 shares
at December 31, 1994, 1995 and 1996 2,717 6,028 15,668
Additional paid-in capital 23,816,551 52,488,567 139,896,651
Dividends in excess of accumulated earnings (30,404) (1,110,127) (2,584,954)
----------- ----------- ------------
23,788,864 51,384,468 137,327,365
Less treasury stock at cost, 14,395 shares at
December 31, 1996 (140,008)
----------- ----------- ------------
Total shareholders' equity 23,788,864 51,384,468 137,187,357
----------- ----------- ------------
Total liabilities and
shareholders' equity $30,443,608 $81,172,777 $193,293,844
=========== =========== ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
- 4 -
<PAGE> 6
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
CONSOLIDATED STATEMENTS of OPERATIONS
For the years ended December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Revenues:
Interest income from direct financing
leases $ 357,625 $ 1,221,026 $ 4,559,544
Rental income from operating leases 2,111,998 5,000,989
Other interest income 107,702 660,623 1,873,094
---------- ----------- -----------
465,327 3,993,647 11,433,627
---------- ----------- -----------
Expenses:
Interest expense 147,256 1,260,189 3,525,774
Depreciation 390,307 947,206
General and administrative 728,919 942,074 1,488,793
Property expense 164,836 596,227 1,269,968
Amortization 6,638 12,797 34,085
---------- ----------- -----------
1,047,649 3,201,594 7,265,826
---------- ----------- -----------
(Loss) income before income from
equity investments (582,322) 792,053 4,167,801
Income from equity investments 554,571 1,322,990 2,042,400
---------- ----------- -----------
Net (loss) income $ (27,751) $2,115,043 $ 6,210,201
========== ========== ===========
Net (loss) income per common share $ (.03) $ .53 $ .60
========== ========== ===========
Weighted average shares outstanding 843,911 4,016,686 10,365,828
========== ========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
- 5 -
<PAGE> 7
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
CONSOLIDATED STATEMENTS of SHAREHOLDERS' EQUITY
For the years ended December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
Dividends in
Additional Excess of
Common Paid-in Accumulated Treasury
Stock Capital Earnings Stock Total
----- ------- -------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1993 $ 20 $ 199,980 $ (2,653) $ 197,347
2,697,263 Shares issued
at $10 per share,
net of offering costs of
$2,718,729 2,697 24,251,204 24,253,901
Dividends declared (634,633) (634,633)
Net loss (27,751) (27,751)
----------- ------------- ------------ ------------ ------------
Balance at December 31, 1994 2,717 23,816,551 (30,404) 23,788,864
3,837,526 Shares issued
at $10 per share,
net of offering costs of
$4,430,723 3,838 33,940,699 33,944,537
Common stock subject to
redemption; 526,921 shares (527) (5,268,683) (5,269,210)
Dividends declared (3,194,766) (3,194,766)
Net income 2,115,043 2,115,043
----------- ------------- ------------ ------------ ------------
Balance at December 31, 1995 6,028 52,488,567 (1,110,127) 51,384,468
9,117,364 Shares issued
at $10 per share,
net of offering costs of
$8,988,624 9,117 82,175,899 82,185,016
Dividends declared (7,684,030) (7,684,030)
Net income 6,210,201 6,210,201
Repurchase of 14,395 shares $ (140,008) (140,008)
Reclassification of common stock subject
to redemption at end of
redemption period, 523,171 shares 523 5,232,185 (998) 5,231,710
----------- ------------- ------------ ------------ ------------
Balance at December 31, 1996 $ 15,668 $ 139,896,651 $ (2,584,954) $ (140,008) $137,187,357
=========== ============= ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
- 6 -
<PAGE> 8
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
CONSOLIDATED STATEMENTS of CASH FLOWS
For the years ended December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (27,751) $ 2,115,043 $ 6,210,201
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization 6,638 403,104 981,291
Amortization of unearned income recognized on
direct financing leases greater than scheduled rents (5,406) (94,658) (164,456)
Income from equity investments in excess
of distributions received (71,462) (294,055)
(Increase) decrease in other assets (242,697) (240,609) 43,745
Increase in accrued rents and interest receivable (141,716) (129,430)
Increase in accounts payable and
accrued expenses (a) 48,960 49,721 59,859
Increase in accounts payable to affiliates (a) 782,903 649,658 263,293
Increase in accrued interest payable 28,661 107,425 281,949
Increase in prepaid rental income and security deposit 884,581 494,707
------------ ------------ ------------
Net cash provided by operating activities 591,308 3,661,087 7,747,104
------------ ------------ ------------
Cash flows from investing activities:
Refund of real estate purchase price 2,633,473
Purchase of stock warrants (124,000)
Capital (contributions in) distributions
from equity investments (1,219,030) 1,375,000 (5,158,908)
Distributions received from general partnerships in
excess of income from equity investments 64,866
Purchase of interests in equity investments from affiliate (9,933,092)
Purchases of real estate and other capitalized
costs (3,003,707) (41,577,236) (77,739,925)
------------ ------------ ------------
Net cash used in investing activities (14,090,963) (40,202,236) (80,389,360)
------------ ------------ ------------
</TABLE>
(Continued)
- 7 -
<PAGE> 9
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
CONSOLIDATED STATEMENTS of CASH FLOWS, Continued
For the years ended December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Cash flows from financing activities:
Proceeds from stock issuance, net of costs 24,253,901 33,944,537 82,185,016
Dividends paid (288,882) (2,350,687) (6,779,669)
Payments of mortgage principal (5,999) (262,013) (1,191,750)
Prepayment of mortgage payable (3,313,866) (2,949,629)
Proceeds from issuance of mortgages 18,375,000 32,300,000
Deferred financing costs (273,770) (90,654)
Purchase of treasury stock (140,008)
Redemption of stock (37,500)
------------ ------------ -------------
Net cash provided by financing activities 23,959,020 46,119,201 103,295,806
------------ ------------ -------------
Net increase in cash and cash equivalents 10,459,365 9,578,052 30,653,550
Cash and cash equivalents, beginning of period 202,347 10,661,712 20,239,764
------------ ------------ -------------
Cash and cash equivalents, end of period $ 10,661,712 $ 20,239,764 $ 50,893,314
============ ============ =============
</TABLE>
(a) Excludes changes in accounts payable and accrued expenses and accounts
payable to affiliates balances which relate to the raising of capital
(financing activities) rather than the Company's real estate operations.
Supplemental schedule of noncash investing and financing activities:
In connection with the purchase of an interest in real estate from an
affiliate during 1994, the Company assumed a $3,334,416 interest in a mortgage
loan obligation.
The accompanying notes are an integral part of the consolidated financial
statements.
- 8 -
<PAGE> 10
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Basis of Consolidation:
The consolidated financial statements include the accounts of
Corporate Property Associates 12 Incorporated and its
wholly-owned subsidiaries (collectively, the "Company").
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.
Real Estate Leased to Others:
Real estate is leased to others on a net lease basis, whereby the
tenant is generally responsible for all operating expenses
relating to the property, including property taxes, insurance,
maintenance, repairs, renewals and improvements.
The Company diversifies its real estate investments among various
corporate tenants engaged in different industries and by property
type throughout the United States.
The leases are accounted for under either the direct financing or
operating methods.
Direct financing method - Leases accounted for under the
direct financing method are recorded at their net
investment (Note 5). Unearned income is deferred and
amortized to income over the lease terms so as to produce
a constant periodic rate of return on the Company's net
investment in the lease.
Operating method - Real estate is recorded at cost,
revenue is recognized as rentals are earned and expenses
(including depreciation) are charged to operations as
incurred.
For properties under construction, interest on mortgages is
capitalized rather than expensed and rentals received are
recorded as a reduction of capitalized project (i.e.,
construction) costs in accordance with Statement of Financial
Accounting Standards No. 67.
Substantially all of the Company's leases provide for either
scheduled rent increases, periodic rent increases based on
formulas indexed to increases in the Consumer Price Index ("CPI")
or sales overrides.
The Company assesses the recoverability of its real estate assets
including residual interests based on projections of undiscounted
cash flows over the life of such assets. In the event that such
cash flows are insufficient, the assets are adjusted to their
estimated net realizable value.
Depreciation:
Depreciation is computed using the straight-line method over the
estimated useful lives of properties - generally 40 years.
Cash Equivalents:
The Company considers all short-term, highly liquid investments that
are both readily convertible to cash and have a maturity of
generally three months or less at the time of purchase to be cash
equivalents. Items classified as cash equivalents include
commercial paper and money market funds. At December 31, 1994,
1995 and 1996, the Company's cash and cash equivalents were held
in the custody of four financial institutions.
Continued
- 9 -
<PAGE> 11
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
Offering Costs:
Costs incurred in connection with the raising of capital through the
sale of common stock are charged to shareholders' equity upon the
issuance of shares to shareholders.
Federal Income Taxes:
The Company qualifies as a real estate investment trust ("REIT") for
the years ended December 31, 1994, 1995 and 1996 under the
Internal Revenue Code of 1986. The Company is not subject to
Federal income taxes, provided it distributes at least 95% of its
REIT taxable income to its shareholders and meets other
conditions.
Equity Investments:
The Company's interests in three general partnerships in which its
ownership interests range from 37% to 50%, are accounted for
under the equity method, i.e. at cost, increased or decreased by
the Company's share of earnings or losses, less distributions.
Other Assets:
Included in other assets are deferred charges and organization
costs. Deferred charges are costs incurred in connection with
mortgage financings and refinancing and are amortized on a
straight-line basis over the terms of the mortgages. Organization
costs incurred in connection with the formation of the Company
are deferred and amortized from the date of inception on a
straight-line basis over five years.
Deferred Acquisition Fees:
Fees are payable for services provided by Carey Property Advisors, a
Pennsylvania limited partnership (the "Advisor") of the Company
relating to the identification, evaluation, negotiation,
financing and purchase of properties. A portion of such fees are
deferred and are payable in annual installments with each
installment equal to .25% of the purchase price of the properties
over no less than eight years following the first anniversary of
the date a property was purchased. Payment of such fees is
subject to the 2%/25% guidelines (see Note 3).
2. Organization and Offering:
The Company was formed on July 30, 1993 under the General
Corporation Law of Maryland for the purpose of engaging in the
business of investing in and owning industrial and commercial
real estate. Subject to certain restrictions and limitations, the
business of the Company is managed by the Advisor.
An initial offering of the Company's shares which commenced on
February 18, 1994 concluded on January 26, 1996, at which time
the Company had issued an aggregate of 8,135,992 shares
($81,359,920). The Company filed a post-effective amendment in
March 1996, withdrawing from registration the balance of unsold
shares from such offering.
Continued
- 10 -
<PAGE> 12
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
Shareholders who purchased 526,921 shares ($5,269,210) of the
Company between March 31, 1995 and May 9, 1995 did not receive
updated financial statements of the Company within a specified
period, and the Company offered all shareholders who subscribed
shares between these dates, the opportunity to rescind such
purchases. Until the redemption period ended in May 1996, all
shares issued during that period were redeemable and, until the
end of the redemption period, were not classified as
shareholders' equity. Of the shares sold, 3,750 were redeemed.
On February 2, 1996, the Company commenced an offering (the
"Offering") for a maximum of 20,000,000 shares of common stock.
The shares are being offered to the public on a "best efforts"
basis by Carey Financial Corporation ("Carey Financial") and
other selected dealers at a price of $10 per share. It is
anticipated that approximately 87% of the funds raised in the
second offering will be invested in real estate with the
remaining funds used to establish a working capital reserve and
to pay the expenses and fees related to the Offering. In 1996,
the Company issued 7,534,534 shares ($75,345,340), pursuant to
the Offering, and since December 31, 1996 the Company has issued
an additional 2,890,081 shares ($28,900,810).
Deferred offering costs of $1,066,262 at December 31, 1995 represent
costs associated with the issuance of shares on January 5, 1996
and February 9, 1996 related to the prior offering and costs
associated with the current Offering which have been charged to
shareholders' equity upon the issuance of shares. Deferred
offering costs of $654,402 at December 31, 1996 represent costs
associated with the current Offering, including prepaid selling
commissions, which will be charged to shareholders' equity upon
the issuance of shares. (Also see Note 8).
3. Transactions with Related Parties:
Pursuant to its advisory agreement, the Advisor performs certain
services for the Company including the identification,
evaluation, negotiation, purchase and disposition of property and
the day-to-day administration and management of the Company. The
Advisor and certain affiliates receive fees and compensation in
connection with the Offering and the operation of the Company
including reimbursement for organization and offering expenses,
acquisition and structuring fees, reimbursement for expenses
incurred by the Advisor in connection with the administration of
the Company, asset management and performance fees, and loan
refinancing fees, and may ultimately receive subordinated
disposition and incentive fees, both of which are dependent on
the Company's performance. In connection with performing services
related to the Company's real estate purchases in 1994, 1995, and
1996, affiliates of the Company received structuring and
development fees of $494,769, $605,972 and $1,284,619,
respectively. Fees are paid only in connection with completed
transactions. The affiliate is entitled to receive deferred
acquisition fees of $3,414,097 over a period of no less than
eight years, subject to the 2%/25% guidelines limitation
described below.
The Company's asset management fee of 0.5% per annum of Average
Invested Assets (as defined in the Prospectus) and a performance
fee of 0.5% of Average Invested Assets are payable to the
Advisor. Asset management fees were $82,418 in 1994, $291,980 in
1995 and $631,051 in 1996 with performance fees in like amount.
General and administrative expense reimbursements consist
primarily of the actual cost of personnel needed to provide
administrative services necessary to the operation of the
Company. General and administrative expense reimbursements were
$589,385 in 1994, $618,591 in 1995 and $747,779 in 1996.
Continued
- 11 -
<PAGE> 13
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
In the future, real property may be acquired by limited
partnerships, REITs or other entities formed by affiliates of the
Advisor and, accordingly, transactions with related parties may
arise between the Company and affiliated entities. The Company's
interests in properties jointly held with affiliates range from
37% to 50%. The Company accounts for assets and liabilities
relating to tenants-in-common interests on a proportional basis.
Ownership interests in general partnerships and a limited
liability company, owned with an affiliate, are accounted for
under the equity method.
The Advisor shall reimburse the Company at least annually for the
amount by which operating expenses of the Company exceed the
2%/25% Guidelines (the greater of 2% of Average Invested Assets
or 25% of Net Income) as defined in the Prospectus. To the extent
that operating expenses payable or reimbursable by the Company
exceed the 2%/25% Guidelines and the Independent Directors find
that such expenses were justified based on such unusual and
nonrecurring factors which they deem sufficient, the Advisor may
be reimbursed in future years for the full amount or any portion
of such excess expenses, but only to the extent such
reimbursement would not cause the Company's operating expenses to
exceed the 2%/25% Guidelines in any such year.
For the years ended December 31, 1994, 1995 and 1996, fees
aggregating $69,322, $35,649 and $348,733, respectively, were
incurred for legal services in connection with the Company's
operations and public offering, respectively, with such services
provided by a firm in which the Secretary of the Company and of
the Corporate General Partner of the Advisor is a partner.
For the years ended December 31, 1994, 1995 and 1996, organization
and offering costs of approximately $1,244,000, $1,520,000 and
$1,820,000, respectively, were paid by the Advisor on behalf of
the Company.
The Company's accounts payable to affiliates were as follows at
December 31, 1994 1995 and 1996:
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Deferred offering costs $1,380,000 $1,066,262 $ 562,266
Asset management and performance fees 164,836 748,795 1,335,895
Interest accrued on deferred acquisition fees 106,175 285,168
Other operating costs 618,528 578,052 75,252
---------- ---------- ----------
$2,163,364 $2,499,284 $2,258,581
========== ========== ==========
</TABLE>
The Company is a participant in an agreement with W.P. Carey & Co.,
Inc. ("W.P. Carey") and certain affiliates for the purpose of
leasing office space used for the administration of real estate
entities and W.P. Carey and for sharing the associated costs.
Pursuant to the terms of the agreement, the Company's share of
rental, occupancy and leasehold improvement costs is based on
adjusted gross revenues, as defined. Net expenses incurred in
1995, the Company's first year of participation, and 1996 were
$11,248 and $26,851, respectively.
4. Real Estate Leased to Others Accounted for Under the Operating Method:
Scheduled future minimum rents, exclusive of renewals, under
noncancellable operating leases amount to approximately
$9,374,000 in each of the years 1997 through 2000; $9,431,000 in
2001 and aggregate approximately $158,301,000 through 2016.
Contingent rents were approximately $19,000 in 1995 and $9,000 in
1996.
Continued
- 12 -
<PAGE> 14
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
5. Net Investment in Direct Financing Leases:
Net investment in direct financing leases is summarized as follows:
<TABLE>
<CAPTION>
December 31,
------------
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Minimum lease payments
receivable $20,273,973 $ 35,500,209 $ 98,389,173
Unguaranteed residual value 6,467,233 13,445,545 40,581,966
----------- ------------ ------------
26,741,206 48,945,754 138,971,139
Less: Unearned income 20,268,567 35,400,145 98,124,653
----------- ------------ ------------
$ 6,472,639 $ 13,545,609 $ 40,846,486
=========== ============ ============
</TABLE>
Scheduled future minimum rents, exclusive of renewals, under
noncancellable direct financing leases are approximately
$5,167,000 in both 1997 and 1998, $5,272,000 in each of the years
1999 through 2001 and aggregate approximately $98,389,000 through
2018.
6. Mortgage Notes Payable:
Mortgage notes payable, all of which are limited recourse to the
Company, are collateralized by an assignment of various leases
and by real property with a carrying amount of approximately
$96,430,000. As of December 31, 1996, mortgage notes payable had
interest rates ranging from 8.03% to 10.25% per annum.
Scheduled principal payments during each of the next five years
following December 31, 1996 are as follows:
<TABLE>
<CAPTION>
Year Ending December 31,
------------------------
<S> <C>
1997 $ 1,539,426
1998 1,624,085
1999 1,703,546
2000 9,461,112
2001 4,353,037
Thereafter 27,604,953
-----------
Total $46,286,159
===========
</TABLE>
Interest paid was $118,595 in 1994, $1,152,764 in 1995 and
$3,243,825 in 1996.
In connection with the placement of mortgages, fees of $197,908,
$276,139 and $513,847 were paid to an affiliate of the Company in
1994, 1995 and 1996, respectively.
7. Dividends:
Dividends paid to shareholders consist of ordinary income, capital
gains, return of capital or a combination thereof for income tax
purposes. For the three years ended December 31, 1996, dividends
paid per share reported for tax purposes were as follows:
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Ordinary income $ 0.30 $ 0.76 $ 0.68
Return of capital 0.12
------ ------ ------
$ 0.30 $ 0.76 $ 0.80
====== ====== ======
</TABLE>
Continued
- 13 -
<PAGE> 15
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
Dividends payable at December 31, 1996 was comprised of dividends
declared of $.0159886 per share ($2,094,191) to shareholders of
record as of December 12, 1996. A dividend of $.2015 per share
was paid in January 1997.
8. Commitments and Contingencies:
The Company is liable for certain costs of its offerings which
include but are not limited to filing, legal, accounting,
printing and escrow fees, which are to be deducted from the gross
proceeds of the Offering and are presently estimated to aggregate
a maximum of $7,327,000 assuming a sale of 20,000,000 shares. The
Company is also liable for selling commissions of $0.60 (6%) per
Share sold and a Selected Dealer fee of $0.10 (1%) for each
Share.
The Company will reimburse Carey Financial for its costs (including
fees and expenses of its counsel) and for the costs of sales and
information meetings of Carey Financial's employees relating to
the Offering. The Company will reimburse Carey Financial for its
identified expenses incurred in connection with wholesaling
services provided to the Company. To the extent, if any, that
certain organization and offering costs, including all selling
commissions, exceed 10% of the gross proceeds of the Offering
(plus an additional 0.5% of gross proceeds for bona fide due
diligence expenses), such excess will be paid by the Advisor with
no recourse by or reimbursement to the Advisor.
9. Industry Segment Information:
The Company's operations consist of the investment in and the
leasing of industrial and commercial real estate. The financial
reporting sources of 1994, 1995 and 1996 lease revenues are as
follows:
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Per Statements of Operations:
Interest income from direct
financing leases $ 357,625 $1,221,026 $ 4,559,544
Rental income from operating leases 2,111,998 5,000,989
Adjustment:
Share of lease revenues from
equity investments 1,404,319 3,110,209 4,419,078
---------- ---------- -----------
$1,761,944 $6,443,233 $13,979,611
========== ========== ===========
</TABLE>
Continued
- 14 -
<PAGE> 16
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
In 1994, 1995 and 1996, the Company earned its share of net lease
revenues from its direct and indirect ownership of real estate
from the following lease obligors:
<TABLE>
<CAPTION>
1994 % 1995 % 1996 %
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Best Buy Co., Inc. (a) $1,143,383 65% $1,801,209 28% $ 1,797,435 13%
The Upper Deck Company (a) 1,312,643 9
Gensia, Inc. (a) 260,936 15 1,309,000 20 1,309,000 9
Applied Bioscience International, Inc. 173,600 3 1,302,000 9
Etec Systems, Inc. 1,210,652 19 1,208,583 9
Telos Corporation 1,166,936 8
Rheometric Scientific, Inc. 1,005,901 7
Q Clubs, Inc. 374,263 6 979,795 7
The Garden Companies, Inc. 432,804 7 816,400 6
Big V Holding Corporation 357,625 20 788,222 12 800,221 6
Lanxide Corporation 770,086 5
Del Monte Corporation 643,125 5
Wal-Mart Stores, Inc. 353,483 5 397,226 3
Spectrian Corporation 223,704 2
Celadon Group, Inc. 198,333 2
Garden Ridge Corporation 36,738
Knogo North America, Inc. 11,485
---------- --- ---------- --- ----------- ---
$1,761,944 100% $6,443,233 100% $13,979,611 100%
========== === ========== === =========== ===
</TABLE>
(a) Represents the Company's proportionate share of lease revenues from
its equity investment.
10. Purchases of Real Estate:
Spectrian Corporation:
On November 19, 1996, the Company purchased land and a building in
Sunnyvale, California for $17,644,000 and entered into a net
lease with Spectrian Corporation ("Spectrian"). The lease has a
term of 15 years with three five-year renewal terms, at the
option of the lessee, with an initial annual rent of $1,925,000.
Rent increases are scheduled every three years and are based on a
formula indexed to increases in CPI with such increase in any
single year capped at 4.5%.
The Company has received a commitment from a lender for a
$10,000,000 limited recourse mortgage loan to be collateralized
by the Spectrian property. If the commitment is exercised, the
loan will provide for monthly payments of principal and interest
at an annual interest rate of 7.75% and based on a 20-year
amortization schedule. A balloon payment would be due in 10
years.
Continued
- 15 -
<PAGE> 17
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
Garden Ridge Corporation:
On December 16, 1996 the Company purchased land and a building
subject to an existing net lease with Garden Ridge Corporation
("Garden Ridge") in Tulsa, Oklahoma for $8,062,000.
The lease has a remaining term of 19 years 4 months through April
2011 with four five-year renewal terms at an annual rent of
$854,164. Rent increases are scheduled every five years with the
first increase scheduled for May 2001. Each increase will be the
lower of 10% or the amount calculated based on a formula indexed
to increases in the CPI.
On December 27, 1996 the Company obtained a $4,600,000 limited
recourse mortgage loan collateralized by the Garden Ridge
property and an assignment of the Garden Ridge lease. The loan
provides for monthly principal and interest payments of $37,725
at an annual interest rate of 8.72% based on a 25-year
amortization schedule. The loan may be prepaid between January 1,
2001 and June 2006 subject to a prepayment premium. A balloon
payment of approximately $3,791,000 is due in January 2007.
Knogo North America, Inc.
On December 24, 1996, the Company purchased land and a building in
Hauppauge, New York for $4,925,000 and entered into a net lease
with Knogo North America, Inc. The lease has a term of 20 years
with a four-year renewal term, at the option of the lessee.
Annual rent is $2,096,000 and rent increases are scheduled every
three years with such increases based on a formula indexed to the
CPI.
In connection with performing services relating to the Company's
real estate purchases, affiliates of the Company received
acquisition fees of $197,908, $242,389 and $513,847 in 1994, 1995
and 1996, respectively.
Continued
- 16 -
<PAGE> 18
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
11. Equity Investments:
The Company holds a 37% interest in BB Property Company ("BB
Property"), a general partnership which net leases 17 retail
stores to Best Buy Co., Inc., a 50% interest in Gena Property
Company ("Gena"), a general partnership which net leases two
office buildings to Gensia, Inc. and a 50% interest in Cards
Limited Liability Company ("Cards LLC"), a general partnership
which net leases office and manufacturing facilities to The Upper
Deck Company. The interest in Cards LLC was purchased in January
1996. Summarized financial information of Gena, BB Property, and
Cards LLC is as follows:
(in thousands)
<TABLE>
<CAPTION>
GENA BB Property CARDS LLC
-------------------------------- --------------------------- ------------
December 31, December 31, December 31,
-------------------------------- --------------------------- ------------
1994 1995 1996 1994 1995 1996 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Land $ 4,500 $ 4,500 $ 4,500 $18,580 $18,580 $18,580
Buildings 18,429 18,429 18,429
Accumulated
depreciation (182) (642) (1,103)
Net investment
in direct
financing lease 27,352 27,261 27,159 $25,831
Other assets 232 750
-------- -------- -------- ------- ------- ------- -------
Total assets $ 22,979 $ 22,287 $ 21,826 $45,932 $45,841 $45,739 $26,581
======== ======== ======== ======= ======= ======= =======
Mortgage notes
payable $ 9,968 $ 12,241 $ 11,696 $31,884 $31,235 $30,525 $14,848
Other liabilities 83 141 136 240 235 230 856
-------- -------- -------- ------- ------- ------- -------
Total liabilities 10,051 12,382 11,832 32,124 31,470 30,755 15,704
Partners'
capital 12,928 9,905 9,994 13,808 14,371 14,984 10,877
-------- -------- -------- ------- ------- ------- -------
Total liabilities
and partners'
capital $ 22,979 $ 22,287 $ 21,826 $45,932 $45,841 $45,739 $26,581
======== ======== ======== ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
For the Year Ended December 31,
--------------------------------------------------------------------------
GENA BB Property CARDS LLC
---------------------------- ---------------------------- ---------
1994 1995 1996 1994 1995 1996 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Rental income from
operating leases $ 964 $2,618 $2,618 $1,989 $1,989 $1,989
Interest income from direct
financing leases 2,888 2,879 2,869 $2,625
Other 1 7
------ ------ ------ ------ ------ ------ ------
965 2,618 2,618 4,877 4,868 4,858 2,632
------ ------ ------ ------ ------ ------ ------
Interest expense on
mortgages 322 994 973 2,898 2,841 2,780 1,255
Depreciation expense 182 461 461
Other 15 5 3 6 4
------ ------ ------ ------ ------ ------ ------
504 1,470 1,439 2,898 2,844 2,786 1,259
------ ------ ------ ------ ------ ------ ------
Net income $ 461 $1,148 $1,179 $1,979 $2,024 $2,072 $1,373
====== ====== ====== ====== ====== ====== ======
</TABLE>
Continued
- 17 -
<PAGE> 19
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
12. Subsequent Events:
Scott Companies, Inc.
On January 23, 1997, the Company purchased land and a building in
San Leandro, California for $17,910,000 and entered into a net
lease agreement with Scott Company of California ("Scott").
Scott's parent company, Scott Companies, Inc., has
unconditionally guaranteed Scott's obligations under the lease.
The lease has a term of 20 years with three five-year renewal
terms, at the option of the lessee. Annual rent is $1,945,850
with rent increases scheduled every three years based on a
formula indexed to the CPI with any increase capped at 4% for any
lease year.
Childtime Childcare, Inc.
On January 29, 1997, the Company purchased land in Chandler,
Arizona; Fleming Island, Florida; and Sugar Land and New
Territory, Texas upon which four childcare centers are being
constructed pursuant to a construction agency and lease agreement
with Childtime Childcare, Inc. ("Childtime"). Total purchase and
project costs are estimated to be $3,930,000 with Childtime
having the obligation to fund any costs in excess of such amount
necessary to complete the project.
During the construction period, Childtime will pay monthly rent
based on an amount indexed to project costs advanced by the
Company. Upon the earlier of the completion of construction or
October 1, 1997, Childtime's rental obligation will be 11.20% of
total project costs with rent increases commencing in the fourth
lease year and every three years thereafter, with such increases
based on a formula indexed to increases in the CPI.
QMS, Inc.
On February 18, 1997, the Company purchased land and a building in
Mobile, Alabama for $13,874,000 and entered into a net lease
agreement with QMS, Inc. ("QMS"). The lease has a term of 15
years with six five-year renewal terms, at the option of the
lessee. Annual rent is $1,689,375 with rent increases scheduled
every three years based on a formula indexed to the CPI.
In connection with the purchase, the Company obtained a $7,200,000
limited recourse mortgage loan collateralized by the QMS property
and an assignment of the QMS lease. The loan provides for monthly
principal payments of $24,303 and annual interest at a rate
equivalent to a variable rate of either the lender's prime rate
plus 1.25% or the London Interbank Offered Rate plus 2.75% at the
Company's option. A balloon payment of approximately $5,766,000
will be due in February 2002.
The Company received warrants to purchase 100,000 shares of common
stock of QMS at a purchase price of $6.50 per share at any time
through December 2001. The warrant agreement allows for a
cashless exercise by which the Company may, in lieu of purchasing
all 100,000 shares, receive fewer shares based on the difference
between the then market price of QMS stock and the exercise
price.
Rheometric Scientific, Inc.
On February 20, 1997, the Company prepaid an existing mortgage loan
of $2,796,000 collateralized by the Rheometric Scientific, Inc.
("Rheometric") property. As amended, Rheometric's annual rent was
reduced to $805,361 from $1,181,000. The Company intends to
obtain new limited recourse mortgage financing on the Rheometric
property at which time annual rent will consist of an amount
equal to the sum of (i) debt service payments on the mortgage
loan, (ii) the difference
Continued
- 18 -
<PAGE> 20
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
between $6,000,000 and initial balance of the mortgage loan
multiplied by 14.7% and (iii) $35,000.
The Company had been granted warrants to purchase 464,160 shares of
Rheometric common stock at an exercise price of $2 at the time
the Rheometric property was purchased in February 1996. The
ability to exercise warrants for 331,543 shares had been
conditioned on the Company's paying off or refinancing the
existing mortgage loan by no later than February 23, 1997. With
the prepayment, all warrants are now exercisable at any time
prior to February 2011, with such exercises extendable to the
last day of any extended lease term.
In connection with modification of annual rent and the satisfaction
of the mortgage loan, annual cash flow from the Rheometric
property will increase by $416,000.
13. Etec Systems, Inc.:
In February 1995, the Company purchased land and an
office/manufacturing facility located in Hayward, California for
$11,859,000 and entered into a net lease agreement with Etec
Systems, Inc. ("Etec") with $6,250,000 of the purchase price
provided by limited recourse mortgage financing. The lease had a
term of 15 years, with four five-year renewal terms with annual
rent of $1,370,325 with such rent adjusted during the first five
lease years to reflect any increases or decreases in monthly debt
service payments due under the loan. The Company was granted
warrants to purchase 159,314 shares of Etec common stock.
In August 1996, the Company entered into a modification agreement
with Etec. In consideration for the Company's agreeing to cancel
its rights for 90,546 warrants, Etec refunded $2,633,473 of the
original purchase price of the property to the Company. The
refund was applied as a prepayment to the mortgage loan, and the
lender reamortized the loan. In addition, the existing lease was
modified to extend the initial term by nineteen months to August
31, 2011. Annual rent was reduced by $347,289 to $1,023,036,
subject to modification as described hereafter. The Company also
made a commitment to fund the construction of a 60,000 square
foot addition at the Etec property.
The funding of the addition will consist of three installments
through January 31, 1998 with the first installment of $5,000,000
made in February 1997. The lease terms will be modified upon each
installment payment. With the February 1997 installment, annual
rent increased by $574,000. For the second and third
installments, rent will increase by an amount equal to the
monthly amortization payment required to repay the installments
over the remaining initial term of the lease based on an annual
interest rate of 8.28% for contributions of up to $2,500,000 and
an annual interest rate of 8.43% for contributions in excess of
$2,500,000.
The commitment by the Company to fund the addition is for a maximum
of $9,000,000 including the $5,000,000 of mortgage financing,
plus structuring, development and acquisition fees payable to an
affiliate. In connection with the August 1996 loan prepayment,
the loan was modified from interest at a variable rate to a fixed
rate of 8.03%. Upon receipt of the $5,000,000 mortgage financing
for the first installment of the new construction, the existing
loan was increased to a balance of $8,220,000. The terms of the
loan were further modified to provide for $6,300,000 of the loan
to be at a fixed rate of 8.03% per annum and the remaining amount
at a variable rate with monthly principal payments based on a
15-year amortization schedule. A balloon payment of approximately
$6,479,000 will be due in February 2002.
Continued
- 19 -
<PAGE> 21
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
Etec has also agreed to allow the Company to exercise its remaining
68,764 warrants by either paying the cash exercise price or by a
cashless exercise in which the Company would receive shares equal
to the fair market value less the exercise price of such shares.
14. Disclosures About Fair Value of Financial Instruments:
The carrying amounts of cash, receivables and accounts payable and
accrued expenses approximate fair value because of the short
maturity of these items.
The Company estimates that the fair value of mortgage notes payable
at December 31, 1996 approximates the carrying value of such
mortgage notes. The fair value of the mortgage notes payable was
evaluated using a cash flow model with a discount rate which
takes into account the credit of the tenant and interest rate
risk.
In conjunction with executing a number of its leases, the Company
was granted warrants to purchase common stock of the lessee or
lease guarantor. To the extent that the lessee is not a publicly
traded company, the warrants were judged at the time of issuance
to be speculative in nature and a nominal cost basis is
attributed to them. The Company believes it is not practicable to
estimate the fair value of its stock warrants for closely-held
companies. For publicly traded companies, fair value represents
the amount by which quoted market value of common stock exceeds
the exercise price at December 31, 1996. The Company's warrants
for 68,768 shares of Etec common stock have a fair market value
of approximately $2,597,000. The Company's warrants for 15,500
shares of Lanxide Corporation ("Lanxide") common stock have a
fair market value of $23,250. The quoted market value per share
of Rheometric common stock at December 31, 1996 was lower than
the exercise price of the Rheometric warrants. The Etec, Lanxide
and Rheometric warrants are currently exercisable.
15. New Accounting Pronouncement:
In March 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" ("SFAS No. 128"), which established standards for
computing and presenting earnings per share. SFAS No. 128 will be
effective for financial statements issued for periods ending
after December 15, 1997. The impact of the adoption of this
statement is not expected to be material to the Company's
Consolidated Financial Statements.
- 20 -
<PAGE> 22
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
SCHEDULE III - REAL ESTATE
and ACCUMULATED DEPRECIATION
as of December 31, 1996
<TABLE>
<CAPTION>
Initial Cost to Cost
Company Capitalized
--------------------------- Subsequent to
Description Encumbrances Land Buildings Acquisition(a)
- ------------------------------------------------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Direct Financing Method:
Supermarkets
leased to
Big V Holding Corp. $3,324,025 $ 1,157,294 $ 5,254,309 $ 58,940
Manufacturing
facility leased to
The Garden
Companies, Inc. 3,402,705 1,544,265 5,430,735
Office/manufacturing
facility leased to
Rheometric
Scientific, Inc. 2,880,000 1,510,791 4,789,209 4,500
Office facility leased
to Telos Corporation 6,146,237 1,549,022 10,597,978 5,500
Research and develop-
ment facility leased to
Lanxide Corporation 4,326,017 1,390,122 7,281,878 7,421
----------- ----------- ----------- ----------
$20,078,984 $ 7,151,494 $33,354,109 $ 76,361
=========== =========== =========== ==========
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at which Carried
at Close of Period (e)
Increase in -----------------------------
Description Net investment(c) Total Date Acquired
- ------------------------------------------------- ----------------- ----------------------------- -------------
<S> <C> <C> <C>
Direct Financing Method:
Supermarkets
leased to
Big V Holding Corp. $ 264,522 $ 6,735,065 July 13, 1994
Manufacturing
facility leased to
The Garden
Companies, Inc. 6,975,000 June 20, 1995
Office/manufacturing
facility leased to
Rheometric
Scientific, Inc. 6,304,500 February 23, 1996
Office facility leased
to Telos Corporation 12,152,500 March 11, 1996
Research and develop-
ment facility leased to
Lanxide Corporation 8,679,421 March 28, 1996
----------- --------------
$ 264,522 $ 40,846,486
=========== ==============
</TABLE>
See accompanying notes to Schedule.
- 21 -
<PAGE> 23
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
SCHEDULE III - REAL ESTATE
and ACCUMULATED DEPRECIATION
as of December 31, 1996
<TABLE>
<CAPTION>
Initial Cost to Cost
Company Capitalized Decrease in
--------------------------- Subsequent to Net
Description Encumbrances Land Buildings Acquisition (a) Investment(b)
----------- -------------- ----------- ------------ --------------- -------------
<S> <C> <C> <C> <C> <C>
Operating Method:
Distribution facility leased
to Wal-Mart Stores, Inc. $ 2,425,659 $ 452,871 $ 3,325,910 $ 12,921
Office/Manufacturing
facility leased to
Etec Systems, Inc. 3,239,021 1,272,418 10,588,221 241 $ (2,633,473)
Health club facilities
leased to Q Clubs, Inc. 2,635,964 3,152,874 8,524,126
Warehouses and special
purpose facility leased
to Del Monte Corporation 5,933,844 305,733 9,922,646
Warehouse/office/
research facility leased
to Applied Bioscience
International, Inc 7,372,687 1,550,928 11,017,367 27,856
Distribution/warehouse
facility leased to
Celadon, Inc. 1,486,600 5,320,400 40,000
Office/research
facility leased to
Spectrian Corporation 5,570,775 12,073,204
Retail store leased
to Garden Ridge
Corporation 4,600,000 1,857,607 6,204,923
Office/distribution
facility leased to Knogo
North America, Inc. 1,603,488 3,321,512
----------- ------------ ------------ ----------- ------------
$26,207,175 $ 17,253,294 $ 60,375,663 $10,003,664 $(2,633,473)
=========== ============ ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
Life on which
Depreciation
Gross Amount at which Carried in Latest
at Close of Period (d)(e) Statement of
-------------------------------------------- Accumulated Operations
Description Land Buildings Total Depreciation(e) Date Acquired is Computed
- ------------------------------ ------------- ------------ ---------- --------------- ----------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Operating Method:
Distribution facility leased
to Wal-Mart Stores, Inc. $ 454,420 $ 3,337,282 $ 3,791,702 $ 156,435 February 10, 1995 40 yrs.
Office/Manufacturing
facility leased to
Etec Systems, Inc. 1,272,444 7,954,963 9,227,407 471,644 February 16, 1995 40 yrs.
Health club facilities
June 8, 1995 and
leased to Q Clubs, Inc. 3,152,874 8,524,126 11,677,000 200,174 July 25, 1996 40 yrs.
Warehouses and special
purpose facility leased
to Del Monte Corporation 376,360 9,852,019 10,228,379 112,738 November 9, 1995 40 yrs.
Warehouse/office/
research facility leased
to Applied Bioscience
International, Inc 1,550,985 11,045,166 12,596,151 310,075 November 13,1995 40 yrs.
Distribution/warehouse
facility leased to
Celadon, Inc. 1,486,600 5,360,400 6,847,000 38,795 September 19, 1996 40 yrs.
Office/research
facility leased to
Spectrian Corporation 5,570,775 12,073,204 17,643,979 37,729 November 19, 1996 40 yrs.
Retail store leased
to Garden Ridge
Corporation 1,857,607 6,204,923 8,062,530 6,463 December 16, 1996 40 yrs.
Office/distribution
facility leased to Knogo
North America, Inc. 1,603,488 3,321,512 4,925,000 3,460 December 24, 1996 40 yrs.
----------- ------------ ----------- -----------
$17,325,553 $67,673,595 $84,999,148 $ 1,337,513
=========== ============ =========== ===========
</TABLE>
See accompanying notes to Schedule.
- 22 -
<PAGE> 24
CORPORATE PROPERTY ASSOCIATES 12 INCORPORATED
and SUBSIDIARIES
NOTES to SCHEDULE III - REAL ESTATE
and ACCUMULATED DEPRECIATION
(a) Consists of the costs of improvements subsequent to purchase and
acquisition costs including legal fees, appraisal fees, title costs and
other related professional fees.
(b) Represents partial refund of purchase price.
(c) The increase (decrease) in net investment is due to the amortization of
unearned income producing a constant periodic rate of return on the net
investment which is more (less) than lease payments received.
(d) At December 31, 1996, the aggregate cost of real estate owned by
Registrant and its subsidiaries for Federal income tax purposes is
$125,581,113.
(e)
Reconciliation of Real Estate Accounted
for Under the Operating Method
<TABLE>
<CAPTION>
December 31,
--------------------------
1995 1996
----------- -----------
<S> <C> <C>
Balance at beginning
of year - $35,449,139
Purchase price adjustment (2,633,473)
Additions $35,449,139 52,183,482
----------- -----------
Balance at close of year $35,449,139 $84,999,148
=========== ===========
</TABLE>
Reconciliation of Accumulated Depreciation
<TABLE>
<CAPTION>
December 31,
-------------------------
1995 1996
--------- ----------
<S> <C> <C>
Balance at beginning
of year $ 390,307
Depreciation expense $ 390,307 947,206
--------- ----------
Balance at close of year $ 390,307 $1,337,513
========= ==========
</TABLE>
- 23 -
<PAGE> 25
PRIOR PERFORMANCE TABLES
The information presented in the following tables represents the historical
experience of the CPA(R) Programs for which the Affiliates of the Advisor of the
Company serve as general partners and the record of CPA(R) Programs in meeting
their investment objectives. These tables should be carefully reviewed by a
potential investor in considering an investment in the Company. These tables are
as follows:
Table I -- Experience in Raising and Investing Funds (on a percentage
basis)
Table II -- Compensation to Sponsor
Table III -- Operating Results of Prior Programs
Table V -- Sales or Dispositions of Properties
PERSONS WHO PURCHASE SHARES IN THE COMPANY WILL NOT THEREBY ACQUIRE ANY
OWNERSHIP INTEREST IN ANY OF THE CPA(R) PROGRAMS TO WHICH THESE TABLES RELATE.
IT SHOULD NOT BE ASSUMED THAT INVESTORS IN THE COMPANY WILL EXPERIENCE RESULTS
COMPARABLE TO THOSE EXPERIENCED BY INVESTORS IN THE CPA(R) PROGRAMS. SEE "PRIOR
OFFERINGS BY AFFILIATES" ELSEWHERE IN THIS PROSPECTUS.
The investment objectives of the Company and CPA(R) Programs are similar.
Additional information regarding prior public CPA(R) Programs can be
obtained from the Advisor by written request for a copy of the most recent
Annual Report filed on Form 10-K with the SEC or a copy of Table
VI -- Acquisition of Real Properties by Prior Public Programs included in Part
II of the Registration Statement to which this Prospectus relates, free of
charge.
The following terms used throughout the Prior Performance Tables are
defined below:
"Total acquisition cost" means the original mortgage financing at date
of purpose, cash payments (equity), and prepaid items and fees related to
purchase of property.
"GAAP" means generally accepted accounting principles.
"Cash generated from operations" means the excess or deficiency of
partnership operating cash receipts including interest on short-term
investments over partnership operating case expenditures.
24
<PAGE> 26
TABLE I
EXPERIENCE IN RAISING AND INVESTING FUNDS AS OF DECEMBER 31, 1996
ON A PERCENTAGE BASIS
Table I includes information showing how investors' funds have been dealt
with in Prior Programs, the offerings of which have closed since January 1,
1993, particularly focusing on the percentage of the amount raised available for
investment (or total acquisition cost), the percentage of leverage used in
purchasing properties and the time frame for raising and investing funds. THE
INFORMATION IN THIS TABLE SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE
PERFORMANCE OF THE COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS
WILL NOT HAVE ANY OWNERSHIP IN THE CPA(R) PROGRAMS. MORTGAGE FINANCING FOR THE
CPA(R) PROGRAMS MAY HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS
FOR INVESTMENT BY SUCH PROGRAMS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY
ALTER CERTAIN OF THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CPA(R):10 CIP(TM) CPA:12
----------- ------------ ------------
<S> <C> <C> <C>
Dollar amount offered (net of discounts and
individual general partner contributions)..... $72,049,908 $141,590,601 156,609,783
Dollar amount raised............................ 100% 100% 100%
Less offering expenses:
Selling commissions........................... 6.82% 6.94% 5.93%
Organization expenses......................... 7.17% 5.31% 4.34%
Reserves (working capital)...................... 1.00% 1.00% 1.00%
Percent available for investment in real
estate........................................ 85.01% 86.75% 88.73%
Acquisition costs:
Cash down payments............................ 71.12% 77.44% 59.43%
Other costs capitalized....................... 0.82% 0.24% (.23)%
Acquisition fees.............................. 10.05% 9.03% 4.92%
Total acquisition costs (includes debt
financing)................................. 220.44% 195.99% 106.68%
Percent leverage (mortgage financing divided by
total acquisition costs)...................... 63% 56%(1) 40%
Date offering began............................. 6/20/90(2) 8/19/91(3) 2/18/94(4)
Length of offering (in months).................. 12 mos. 24 mos. 35 mos.
Months to invest 90% of amount available for
investment (from beginning of offering)....... 30 mos. 31 mos. N/A(5)
</TABLE>
FOOTNOTES
(1) Does not represent fully invested portfolio. Leverage percentage is
applicable only to initial property acquisitions.
(2) Remaining shares withdrawn 8/14/91.
(3) Remaining shares withdrawn 11/4/93.
(4) Remainings shares withdrawn 3/14/96, includes a second offering which
commenced 2/2/96.
(5) Program has not reached investment of 90% of amount available for
investment.
25
<PAGE> 27
TABLE II
COMPENSATION TO SPONSOR AS OF DECEMBER 31, 1996
Table II provides information as to Prior Programs that will enable an
investor to understand the significance of compensation paid to the sponsor and
its affiliates, as well as to understand how the compensation is spread over the
cycle of the programs. The information presented below is for compensation paid
since January 1, 1994. THE INFORMATION PRESENTED IN THIS TABLE SHOULD NOT BE
CONSIDERED AS INDICATIVE OF THE COMPENSATION WHICH WILL BE RECEIVED BY THE
ADVISOR AND AFFILIATES OF THE ADVISOR. THE COMPENSATION PAYABLE TO THE GENERAL
PARTNERS AND AFFILIATES OF THE CPA(R) PARTNERSHIPS DIFFERS FROM THE ENTITLEMENT
AND ALLOCATION OF COMPENSATION TO THE ADVISOR AND AFFILIATES OF THE ADVISOR. SEE
"MANAGEMENT COMPENSATION" AND "ESTIMATED USE OF PROCEEDS". PURCHASERS OF SHARES
OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY OWNERSHIP IN THE CPA(R) PROGRAMS.
<TABLE>
<CAPTION>
CPA(R):1-
CPA(R):10 CIP(TM) CPA(R):12
--------------- ------------ ------------
<S> <C> <C> <C>
Date offering(s) commenced........................ 1/16/79-6/20/90 8/19/91 2/18/94
2/2/96
Dollar amount raised (net of discounts and
individual general partner contributions)....... $ 472,763,521 $141,590,601 $156,609,783
Amount paid to sponsor from proceeds of offering:
Underwriting fees...............................
Acquisition fees-real estate commissions and
mortgage placement fees(1)................... 930,000 3,221,556 7,770,745
Other Fees........................................
Dollar amount of cash generated from operations
before deducting payments to sponsor............ 194,437,519 51,062,659 15,966,152
Amount paid to sponsor from operations:
Property management, leasing and asset
management fees(2)........................... 7,295,917 8,805,504 2,010,898
Reimbursements(2)............................... 3,859,421 1,815,619 1,955,755
Other (cash distributions to General
Partners)(2).................................... 7,367,216
Dollar amount of property sales and re-financing
before deducting payments to sponsor(2)......... 171,527,937 39,223,596 3,375,000
Amount paid to sponsor from property sales and
refinancing.....................................
</TABLE>
FOOTNOTES
(1) Represents acquisition fees paid to sponsor and its affiliates from January
1, 1994 through December 31, 1996.
(2) Represents actual performance or payments for the period from January 1,
1994 through December 31, 1996.
26
<PAGE> 28
TABLE III (1 OF 11)
OPERATING RESULTS OF PRIOR PROGRAMS
Table III includes information showing the start-up and operational phase of
Prior Programs, the offerings of which have been closed since December 31, 1979.
This Table is designed to provide the investor with information on the financial
operations of such Prior Programs. The results shown in this Table are in all
cases for years ended December 31. THE INFORMATION PRESENTED IN THIS TABLE
SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PARTNERSHIPS. MORTGAGE FINANCING FOR THE CPA(R)
PARTNERSHIPS MAY HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR
INVESTMENT BY SUCH PARTNERSHIPS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY
ALTER CERTAIN OF THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CPA(R):1
--------------------------------------------------------------
1979 1980 1981 1982 1983
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Gross Revenues..................................................... $2,636,185 $3,843,588 $4,427,993 $4,376,655 $4,322,546
Profit (loss) on sale of properties................................ N/A N/A N/A N/A 22,180(1)
Extraordinary charge on extinguishment of debt.....................
Write-down of property............................................. N/A N/A N/A N/A N/A
Less:
Operating expenses................................................ 160,387 252,758 238,058 181,922 169,613
Interest expense.................................................. 1,415,410 1,895,624 2,409.242 2,386,388 2,328,716
Depreciation...................................................... 821,484 1,275,778 1,275,792 1,275,792 1,275,792
Net income (Loss) GAAP Basis....................................... 238,904 419,428 504,901 532,553 570,605
Taxable income (Loss):
-- from operations................................................ 392,689 219,214 (108,663) (158,919) (173,788)
-- from gain (loss) on sale....................................... 0 0 0 0 22,180(1)
Cash generated from operations(6).................................. 985,982 1,512,434 1,504,769 1,500,263 1,438,191
Cash proceeds from
sales............................................................. 0 0 0 0 60,335(1)
Cash generated from refinancing.................................... 0 0 0 0 0
Cash generated from operations, sales and refinancing.............. 985,982 1,512,434 1,504,769 1,500,263 1,498,526
Less Cash distribution to investors................................
-- from operating cash flow(7).................................... 591,479 1,480,000 1,501,819 1,504,648 1,504,646
-- from sales and refinancing..................................... 0 0 0 0 0
Cash generated (deficiency) after cash distribution................ 394,503 32,434 2,950 (4,385) (6,120)
Less special items................................................. 0 0 0 0 0
Cash generated (deficiency) after cash distributions and special
items............................................................. 394,503 32,434 2,950 (4,385) (6,120)
TAX AND DISTRIBUTION DATA PER $1000 INVESTED
Federal Income Tax Results:
Ordinary income
(loss)........................................................... $23.65 $10.85 $(5.38) $(7.87) $(8.60)
Capital gain (loss)............................................... 0 0 0 0 1.10
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.............................................. 14.39 20.76 24.99 26.36 27,15
-- Return of capital.............................................. 21.23 52.50 49.35 48.12 47.33
Source (on cash basis):
-- Sales.......................................................... 0 0 0 0 0
-- Refinancing.................................................... 0 0 0 0 0
-- Operations..................................................... 35.62 73.26 74.34 74.48 74.48
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the Table
(original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program)..... N/A 100% 100% 100% 100%
<CAPTION>
1984 1985 1986 1987 1988
---------- ---------- ---------- ---------- ----------
<S> <<C> <C> <C>
Gross Revenues..................................................... $4,331,105 $4,187,199 $3,513,411 $6,584,410 $4,487,838
Profit (loss) on sale of properties................................ N/A N/A (38,915)(2) N/A N/A
Extraordinary charge on extinguishment of debt.....................
Write-down of property............................................. N/A N/A N/A N/A N/A
Less:
Operating expenses................................................ 145,516 276,287 630,225 766,707 811,685
Interest expense.................................................. 2,300,677 2,254,996 2,296,520 2,320,731 2,339,046
Depreciation...................................................... 1,272,999 1,266,962 1,507,133 1,520,842 1,318,492
Net income (Loss) GAAP Basis....................................... 611,913 388,954 (959,382) 1,976,130 18,615
Taxable income (Loss):
-- from operations................................................ (72,288) (49,859) (1,135,524) (125,052) 482,093
-- from gain (loss) on sale....................................... 0 0 (38,915)(2) 0 0
Cash generated from operations(6).................................. 1,481,113 1,221,045 736,214 1,078,838 1,908,203
Cash proceeds from
sales............................................................. 0 0 500,000(2) 0 0
Cash generated from refinancing.................................... 0 0 0 0 0
Cash generated from operations, sales and refinancing.............. 1,481,113 1,221,045 1,238,214 1,078,838 1,908,203
Less Cash distribution to investors................................
-- from operating cash flow(7).................................... 1,504,646 1,504,646 1,055,354 1,063,838 1,074,748
-- from sales and refinancing..................................... 0 0 0 0 0
Cash generated (deficiency) after cash distribution................ (23,533) (283,601) 180,860 15,000 23,455
Less special items................................................. 0 0 0 0 0
Cash generated (deficiency) after cash distributions and special
items............................................................. (23,533) (283,601) 180,860 15,000 23,455
TAX AND DISTRIBUTION DATA PER $1000 INVESTED
Federal Income Tax Results:
Ordinary income
(loss)........................................................... $(3.58) $(2.47) $(56.21) $(6.19) $23.86
Capital gain (loss)............................................... 0 0 (1.92) 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.............................................. 30.29 19.25 0 52.66 53.20
-- Return of capital.............................................. 44.19 55.23 52.24 0 0
Source (on cash basis):
-- Sales.......................................................... 0 0 0 0 0
-- Refinancing.................................................... 0 0 0 0 0
-- Operations..................................................... 74.48 74.48 52.24 52.66 53.20
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the Table
(original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program)..... 100% 100% 98.75% 98.75% 98.75%
<CAPTION>
1989 1990 1991 1992 1993
---------- ---------- ---------- ---------- ----------
Gross Revenues..................................................... $4,167,975 $4,162,465 $4,093,556 $4,102,112 $4,418,370
Profit (loss) on sale of properties................................ (231,288)(3) N/A (13,296)(5) N/A N/A
Extraordinary charge on extinguishment of debt.....................
Write-down of property............................................. 300,000(4) N/A N/A N/A N/A
Less:
Operating expenses................................................ 418,278 411,712 298,435 302,200 465,548
Interest expense.................................................. 1,916,134 1,840,553 1,750,596 1,682,798 1,672,658
Depreciation...................................................... 1,159,216 1,044,720 1,041,634 1,059,255 1,120,162
Net income (Loss) GAAP Basis....................................... 143,059 865,480 989,595 1,057,059 1,160,002
Taxable income (Loss):
-- from operations................................................ 1,175,040 1,199,289 852,971 812,956 1,098,352
-- from gain (loss) on sale....................................... (538,771)(3) 0 52,204(5) 0 0
Cash generated from operations(6).................................. 1,964,408 1,901,459 2,062,138 2,046,299 2,291,177
Cash proceeds from
sales............................................................. 0 0 160,000(5) 0 0
Cash generated from refinancing.................................... 0 0 0 0 0
Cash generated from operations, sales and refinancing.............. 1,964,408 1,901,459 2,222,138 2,046,299 2,291,177
Less Cash distribution to investors................................
-- from operating cash flow(7).................................... 1,092,527 1,162,424 1,226,667 1,242,828 1,258,990
-- from sales and refinancing..................................... 0 0 0 0 0
Cash generated (deficiency) after cash distribution................ 871,881 739,035 995,471 803,471 1,032,187
Less special items................................................. 0 0 0 0 0
Cash generated (deficiency) after cash distributions and special
items............................................................. 871,881 739,035 995,471 803,471 1,032,187
TAX AND DISTRIBUTION DATA PER $1000 INVESTED
Federal Income Tax Results:
Ordinary income
(loss)........................................................... $58.16 $59.36 $42.22 $40.24 $54.37
Capital gain (loss)............................................... (26.67) 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.............................................. 7.08 42.84 48.98 52.36 57.42
-- Return of capital.............................................. 47.00 14.70 11.74 9.16 4.90
Source (on cash basis):
-- Sales.......................................................... 0 0 0 0 0
-- Refinancing.................................................... 0 0 0 0 0
-- Operations..................................................... 54.08 57.54 60.72 61.52 62.32
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the Table
(original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program)..... 83.14% 83.14% 82.74% 82.74% 82.74%
<CAPTION>
1994 1995 1996
---------- ---------- ----------
Gross Revenues..................................................... $4,480,460 $4,830,618 $4,589,145
Profit (loss) on sale of properties................................ N/A N/A (22,871)(5)
Extraordinary charge on extinguishment of debt..................... (255,438)(6)
Write-down of property............................................. N/A N/A
Less:
Operating expenses................................................ 666,955 374,238 388,484
Interest expense.................................................. 1,598,614 1,524,837 1,280,995
Depreciation...................................................... 1,106,712 1,089,758 969,570
Net income (Loss) GAAP Basis....................................... 1,108,179 1,841,695 1,671,787
Taxable income (Loss):
-- from operations................................................ 930,049 1,841,051 1,540,197
-- from gain (loss) on sale....................................... 0 0 153,615
Cash generated from operations(6).................................. 2,216,472 2,666,179 2,826,531
Cash proceeds from
sales............................................................. 0 0 355,958
Cash generated from refinancing.................................... 0 0 0
Cash generated from operations, sales and refinancing.............. 2,216,472 2,666,179 3,182,489
Less Cash distribution to investors................................
-- from operating cash flow(7).................................... 1,269,699 1,313,535 1,417,554
-- from sales and refinancing..................................... 0 0
Cash generated (deficiency) after cash distribution................ 946,773 1,352,644 1,764,935
Less special items................................................. 0 0 0
Cash generated (deficiency) after cash distributions and special
items............................................................. 946,773 1,352,644 1,764,935
TAX AND DISTRIBUTION DATA PER $1000 INVESTED
Federal Income Tax Results:
Ordinary income
(loss)........................................................... $46.04 $91.13 $76.24
Capital gain (loss)............................................... 0 0 7.60
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.............................................. 54.85 65.02 70.17
-- Return of capital.............................................. 8.00 0 0
Source (on cash basis):
-- Sales.......................................................... 0 0 0
-- Refinancing.................................................... 0 0 0
-- Operations..................................................... 62.85 65.02 70.17
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the Table
(original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program)..... 82.74% 82.74% 82.46%
</TABLE>
FOOTNOTES
(1) Results from the sale of a one acre portion of the land which was a part of
the property net leased to Varo, Inc. The net proceeds from the sale of this
land were applied to repay a portion of the outstanding principal balance of
the mortgage loan to CPA(R):1 used to finance the acquisition of the
Property.
(2) Results from the sale of 11.37 acres of land which was a part of the
property net leased to the Gap Stores, Inc.
(3) Represents loss on disposition of the 2400 Industrial Lane Property as a
result of the transfer of the Partnership's interest in the Property.
(4) Represents write-down of the 2400 Industrial Lane Property.
(5) Results from the sale of properties net leased to Kobacker Stores, Inc.
(6) Result of refinancing mortgage loan on property leased to the Gap Inc.
27
<PAGE> 29
(7) For the years up to and including 1985, the figures for cash generated from
operations were derived from the Statements of Changes in Financial
Position, whereas for the years after 1985, the figures were derived from
the Statements of Cash Flows in accordance with SFAS, No. 95. In determining
Cash from Operations pursuant to the Statement of Cash Flows, the effects of
changes primarily in accrued liabilities, receivables and other assets are
taken into account but other items such as principal amortization of loans
are not included. Cash from operations pursuant to the Statement of Changes
in Financial Position includes the effect of loan amortization, but excludes
the effects of changes in accrued liabilities, receivables and other assets.
(8) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations in
prior years that has not previously been distributed.
NOTES
(1) CPA(R):1 made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1997 -- $17.60 and April,
1997 -- $17.62.
28
<PAGE> 30
TABLE III (2 OF 11)
OPERATING RESULTS OF PRIOR PROGRAMS
Table III includes information showing the start-up and operational phase of
Prior Programs, the offerings of which have been closed since December 31, 1979.
This Table is designed to provide the investor with information on the financial
operations of such Prior Programs. The results shown in this Table are in all
cases for years ended December 31. THE INFORMATION PRESENTED IN THIS TABLE
SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PARTNERSHIPS. MORTGAGE FINANCING FOR THE CPA(R)
PARTNERSHIPS MAY HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR
INVESTMENT BY SUCH PARTNERSHIPS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY
ALTER CERTAIN OF THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CPA(R):2
-------------------------------------------------
1980 1981 1982 1983
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Gross Revenues........................................................ $1,658,322 $4,092,794 $6,422,836 $9,793,731
Profit on sale of properties.......................................... N/A N/A N/A N/A
Extraordinary charge on extinguishment of debt........................ N/A N/A N/A N/A
Write-down of property................................................
Less:
Operating expenses................................................... 181,613 291,223 290,558 307,165
Interest expense..................................................... 197,038 606,089 3,341,880 6,511,201
Depreciation......................................................... 14,421 127,460 157,900 154,909
Net Income-GAAP Basis................................................. 1,265,250 3,068,022 2,632,498 2,820,456
Taxable Income (Loss):
-- from operations................................................... 630,885 2,003,000 (9,093) (1,168,795)
-- from gain on sale................................................. 0 0 0 0
-- from extraordinary charge......................................... 0 0 0 0
Cash generated from operations(3)..................................... 1,149,636 2,853,883 2,460,169 2,574,532
Cash generated from sales............................................. 0 0 0 0
Cash generated from refinancing....................................... 0 0 0 0
Cash generated from operations, sales and refinancing................. 1,149,636 2,853,883 2,460,169 2,574,532
Less: Cash distribution to investors:
-- from operating cash flow(4)....................................... 473,028 2,229,443 2,440,555 2,525,000
-- from sales and refinancing........................................ 0 0 0 0
Cash generated after cash distributions and special items............. 676,608 624,440 19,614 49,532
Less: Special items................................................... 0 0 0 0
Cash generated after cash distributions and special items............. 676,608 624,440 19,614 49,532
Tax and Distribution Data Per $1000 Invested
Federal Income Tax
Results:
Ordinary income (loss).............................................. $ 48.95 $ 72.11 $ (.33) $ (42.08)
Capital gain (loss)................................................. 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income................................................ 36.70 80.25 87.86 90.90
-- Return of capital................................................ 0 0 0 0
Source (on cash basis):
-- Sales............................................................ 0 0 0 0
-- Refinancing...................................................... 0 0 0 0
-- Operations....................................................... 36.70 80.25 87.86 90.90
Amount (in percentage terms) remaining invested in program properties
at the end of the last year reported in the Table (original total
acquisition cost of properties retained divided by original total
acquisition cost of all properties in program)....................... N/A N/A 100% 100%
<CAPTION>
1984 1985 1986 1987
---------- ---------- ---------- ----------
<S> <C<C>
Gross Revenues........................................................ $9,895,531 $9,960,370 $9,954,236 $9,694,869
Profit on sale of properties.......................................... N/A N/A 920,577(1) N/A
Extraordinary charge on extinguishment of debt........................ N/A N/A (894,945)(2) N/A
Write-down of property................................................
Less:
Operating expenses................................................... 346,920 364,373 393,350 480,635
Interest expense..................................................... 6,349,960 6,307,664 4,916,744 4,204,623
Depreciation......................................................... 154,909 155,782 314,560 475,162
Net Income-GAAP Basis................................................. 3,043,742 3,132,551 4,355,214 4,534,449
Taxable Income (Loss):
-- from operations................................................... (885,102) (532,969) 260,572 1,604,613
-- from gain on sale................................................. 0 0 2,035,116(1) 0
-- from extraordinary charge......................................... 0 0 (239,948)(2) 0
Cash generated from operations(3)..................................... 2,804,385 2,881,848 4,325,850 5,084,085
Cash generated from sales............................................. 0 0 5,441,434(1) 0
Cash generated from refinancing....................................... 0 0 0 0
Cash generated from operations, sales and refinancing................. 2,804,385 2,881,848 9,767,234 5,084,085
Less: Cash distribution to investors:
-- from operating cash flow(4)....................................... 2,547,000 2,657,778 3,691,774 3,435,000
-- from sales and refinancing........................................ 0 0 4,950,000 0
Cash generated after cash distributions and special items............. 257,385 224,070 1,125,510 1,649,085
Less: Special items................................................... 0 0 0 0
Cash generated after cash distributions and special items............. 257,385 224,070 1,125,510 1,649,085
Tax and Distribution Data Per $1000 Invested
Federal Income Tax
Results:
Ordinary income (loss).............................................. $ (30.78) $ (19.19) $ .73 $ 57.77
Capital gain (loss)................................................. 0 0 73.27 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income................................................ 91.70 95.68 156.79 123.66
-- Return of capital................................................ 0 0 156.11 0
Source (on cash basis):
-- Sales............................................................ 0 0 180.00 0
-- Refinancing...................................................... 0 0 0 0
-- Operations....................................................... 91.70 95.68 132.90 123.66
Amount (in percentage terms) remaining invested in program properties
at the end of the last year reported in the Table (original total
acquisition cost of properties retained divided by original total
acquisition cost of all properties in program)....................... 100% 100% 93.24% 93.24%
<CAPTION>
1988 1989 1990 1991
---------- ----------- ---------- ----------
Gross Revenues........................................................ $9,754,664 $10,013,889 $9,732,269 $9,756,071
Profit on sale of properties.......................................... N/A N/A N/A N/A
Extraordinary charge on extinguishment of debt........................ N/A N/A N/A N/A
Write-down of property................................................
Less:
Operating expenses................................................... 489,806 540,777 685,927 691,505
Interest expense..................................................... 4,074,729 3,856,045 3,771,706 3,595,406
Depreciation......................................................... 475,162 479,598 480,393 478,388
Net Income-GAAP Basis................................................. 4,714,967 5,137,469 4,794,243 4,990,772
Taxable Income (Loss):
-- from operations................................................... 1,997,924 2,600,538 2,461,101 2,874,398
-- from gain on sale................................................. 0 0 0 0
-- from extraordinary charge......................................... 0 0 0 0
Cash generated from operations(3)..................................... 5,096,066 5,502,770 5,298,252 5,389,873
Cash generated from sales............................................. 0 0 0 0
Cash generated from refinancing....................................... 0 0 0 0
Cash generated from operations, sales and refinancing................. 5,096,066 5,502,770 5,298,252 5,389,873
Less: Cash distribution to investors:
-- from operating cash flow(4)....................................... 3,506,667 3,645,000 3,773,333 3,832,222
-- from sales and refinancing........................................ 0 0 0 0
Cash generated after cash distributions and special items............. 1,589,399 1,857,770 1,524,919 1,557,651
Less: Special items................................................... 0 0 0 0
Cash generated after cash distributions and special items............. 1,589,399 1,857,770 1,524,919 1,557,651
Tax and Distribution Data Per $1000 Invested
Federal Income Tax
Results:
Ordinary income (loss).............................................. $ 71.93 $ 93.62 $ 88.60 $ 103.48
Capital gain (loss)................................................. 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income................................................ 126.24 131.22 135.84 137.96
-- Return of capital................................................ 0 0 0 0
Source (on cash basis):
-- Sales............................................................ 0 0 0 0
-- Refinancing...................................................... 0 0 0 0
-- Operations....................................................... 126.24 131.22 135.84 137.96
Amount (in percentage terms) remaining invested in program properties
at the end of the last year reported in the Table (original total
acquisition cost of properties retained divided by original total
acquisition cost of all properties in program)....................... 93.24% 93.24% 93.24% 93.24%
<CAPTION>
1992 1993 1994 1995
---------- ----------- ---------- ----------
Gross Revenues........................................................ $9,763,695 $ 6,665,727 $5,161,447 $5,185,804
Profit on sale of properties.......................................... N/A 8,377,679(5) 23,451(7) N/A
Extraordinary charge on extinguishment of debt........................ N/A (520,979)(6) N/A N/A
Write-down of property................................................ (841,889)(8) (445,551)(9)
Less:
Operating expenses................................................... 983,060 846,569 911,755 718,035
Interest expense..................................................... 3,337,825 2,142,199 1,593,880 1,351,797
Depreciation......................................................... 476,279 501,762 501,657 519,891
Net Income-GAAP Basis................................................. 4,966,531 10,190,008 1,732,055 2,596,081
Taxable Income (Loss):
-- from operations................................................... 3,574,899 1,924,220 1,368,123 5,114,606
-- from gain on sale................................................. 0 21,777,693 40,237 0
-- from extraordinary charge......................................... 0 0 0 0
Cash generated from operations(3)..................................... 5,513,940 3,977,769 2,770,535 6,164,009
Cash generated from sales............................................. 0 15,972,862 124,615 0
Cash generated from refinancing....................................... 0 0 0 0
Cash generated from operations, sales and refinancing................. 5,513,940 19,950,631 2,895,150 6,164,009
Less: Cash distribution to investors:
-- from operating cash flow(4)....................................... 3,898,333 2,691,111 1,458,890 1,491,667
-- from sales and refinancing........................................ 0 14,300,312 0 0
Cash generated after cash distributions and special items............. 1,615,607 2,959,208 1,436,260 4,672,342
Less: Special items................................................... 0 0 0 0
Cash generated after cash distributions and special items............. 1,615,607 2,959,208 1,436,260 4,672,342
Tax and Distribution Data Per $1000 Invested
Federal Income Tax
Results:
Ordinary income (loss).............................................. $ 128.70 $ 69.27 $ 49.25 $ 184.46
Capital gain (loss)................................................. 0 784.00 1.45 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income................................................ 140.34 366.84 52.52 53.72
-- Return of capital................................................ 0 250.04 0.00 0
Source (on cash basis):
-- Sales............................................................ 0 520.00 0 0
-- Refinancing...................................................... 0 0 0 0
-- Operations....................................................... 140.34 96.88 52.52 53.72
Amount (in percentage terms) remaining invested in program properties
at the end of the last year reported in the Table (original total
acquisition cost of properties retained divided by original total
acquisition cost of all properties in program)....................... 93.24% 61.97% 61.65% 61.65%
<CAPTION>
1996
----------
Gross Revenues........................................................ $4,590,963
Profit on sale of properties.......................................... N/A
Extraordinary charge on extinguishment of debt........................ N/A
Write-down of property................................................
Less:
Operating expenses................................................... 735,018
Interest expense..................................................... 731,843
Depreciation......................................................... 499,320
Net Income-GAAP Basis................................................. 2,624,782
Taxable Income (Loss):
-- from operations................................................... 1,967,557
-- from gain on sale................................................. 0
-- from extraordinary charge......................................... 0
Cash generated from operations(3)..................................... 2,791,872
Cash generated from sales............................................. 0
Cash generated from refinancing....................................... 0
Cash generated from operations, sales and refinancing................. 2,791,872
Less: Cash distribution to investors:
-- from operating cash flow(4)....................................... 2,303,728
-- from sales and refinancing........................................ 0
Cash generated after cash distributions and special items............. 488,144
Less: Special items................................................... 0
Cash generated after cash distributions and special items............. 488,144
Tax and Distribution Data Per $1000 Invested
Federal Income Tax
Results:
Ordinary income (loss).............................................. $ 70.96
Capital gain (loss)................................................. 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income................................................ 83.09
-- Return of capital................................................ 0
Source (on cash basis):
-- Sales............................................................ 0
-- Refinancing...................................................... 0
-- Operations....................................................... 83.09
Amount (in percentage terms) remaining invested in program properties
at the end of the last year reported in the Table (original total
acquisition cost of properties retained divided by original total
acquisition cost of all properties in program)....................... 61.65%
</TABLE>
29
<PAGE> 31
FOOTNOTES
(1) Results from the sale of 3,441 square feet of land net leased to G.D. Searle
& Co. and sale of the property net leased to General Refractories Company.
(2) Represents unamortized balance of deferred charges in connection with
refinancing of mortgage loans on properties leased to Heekin Can Inc., Paper
Corporation of America and Gibson Greeting Cards, Inc.
(3) For the years up to and including 1985, the figures for cash generated
from operations were derived from the Statements of Changes in Financial
Position, whereas for the years after 1985, the figures were derived
from the Statements of Cash Flows in accordance with SFAS No. 95. In
determining Cash from Operations pursuant to the Statement of Cash
Flows, the effects of changes primarily in accrued liabilities,
receivables and other assets are taken into account but other items such
as principal amortization of loans are not included. Cash from
operations pursuant to the Statement of Changes in Financial Position
includes the effect of loan amortization, but excludes the effects of
changes in accrued liabilities, receivables and other assets.
(4) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations in
prior years that has not previously been distributed.
(5) Results from the sale of properties leased to Heekin Can, Inc.
(6) In connection with the sale of the Heekin properties, CPA(R):2 incurred an
extraordinary charge upon paying off the related mortgage loan.
(7) Results from the sale of property in Hammond, Louisiana leased to G.D.
Searle and Company.
(8) Represents write-down of the Moorestown, N.J. property.
(9) Represents write-down of the Reno, Nevada property.
NOTES
(1) CPA(R):2 made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1997 -- $12.74 and April,
1997 -- $12.76.
30
<PAGE> 32
TABLE III (3 OF 11)
OPERATING RESULTS OF PRIOR PROGRAMS
Table III includes information showing the start-up and operational phase or
Prior Programs, the offerings of which have been closed since December 31, 1979.
This Table is designed to provide the investor with information on the financial
operations of such Prior Programs. The results shown in this Table are in all
cases for years ended December 31. THE INFORMATION PRESENTED IN THIS TABLE
SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PARTNERSHIPS. MORTGAGE FINANCING FOR THE CPA(R)
PARTNERSHIPS MAY HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR
INVESTMENT BY SUCH PARTNERSHIPS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY
ALTER CERTAIN OF THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CPA(R):3
------------------------------------------------------------
1981 1982 1983 1984 1985
-------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Gross Revenues......................................................... $173,916 $7,746,826 $8,618,753 $8,798,595 $8,792,622
Profit on sale of properties........................................... N/A N/A N/A N/A N/A
Extraordinary charges on extinguishment of debt N/A N/A N/A N/A N/A
Write-down of property................................................. N/A N/A N/A N/A N/A
Other income...........................................................
Less:
Operating expenses.................................................... 54,011 384,169 369,246 506,660 502,561
Interest expense...................................................... 60,855 4,224,538 4,341,435 3,921,936 3,845,445
Depreciation.......................................................... 0 0 0 0 0
Net Income-GAAP Basis.................................................. 59,050 3,138,119 3,908,072 4,369,999 4,444,615
Taxable Income (Loss):
-- from operations.................................................... (190,312) (516,798) (194,879) 277,458 375,653
-- from gain on sale.................................................. 0 0 0 0 0
-- from extraordinary charge.......................................... 0 0 0 0 0
Cash generated from operations(3)...................................... 41,249 2,698,796 3,523,610 3,979,272 3,995,421
Cash generated from sales.............................................. 0 0 0 0 0
Cash generated from refinancing........................................ 0 0 0 0 0
Cash generated from other.............................................. 0 0 0 0 0
Cash generated from operations, sales, refinancing and other........... 41,249 2,698,796 3,523,610 3,979,272 3,995,421
Less: Cash distribution to investors:
-- from operating cash flow(4)........................................ 0 1,906,688 3,388,225 3,787,592 3,889,970
-- from sales and refinancing......................................... 0 0 0 0 0
-- other.............................................................. 0 0 0 0 0
Cash generated (deficiency) after cash distributions................... 41,249 792,108 135,385 191,680 105,451
Less: Special items.................................................... 0 0 0 0 0
Cash generated (deficiency) after cash distributions and special
items................................................................. 41,249 792,108 135,385 191,680 105,451
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income....................................................... $ (25.06) $ (19.36) $ (5.79) $ 8.24 $ 11.16
Capital gain.......................................................... 0 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis)
-- Investment income................................................. 0 71.42 100.62 112.48 116.52
-- Return of capital................................................. 0 0 0 0 0
Source (on cash basis):
-- Sales.............................................................. 0 0 0 0 0
-- Refinancing........................................................ 0 0 0 0 0
-- Other.............................................................. 0 0 0 0 0
-- Operations......................................................... 0 71.42 100.62 112.48 116.52
Amount (in percentage terms) remaining invested in program properties
at the end of the last year reported in the Table (original total
acquisition cost of properties retained divided by original total
acquisition cost of all properties in program)........................ N/A N/A 100% 100% 100%
<CAPTION>
1986 1987 1988 1989
----------- ----------- ---------- ----------
<S> <<C> <C> <C>
Gross Revenues......................................................... $ 8,720,462 $ 8,394,566 $8,582,478 $8,774,232
Profit on sale of properties........................................... 540,765(1) N/A N/A N/A
Extraordinary charges on extinguishment of debt (1,256,013)(2) N/A N/A N/A
Write-down of property................................................. N/A N/A N/A N/A
Other income...........................................................
Less:
Operating expenses.................................................... 496,570 583,208 568,793 622,281
Interest expense...................................................... 3,296,710 2,459,640 2,376,215 2,332,100
Depreciation.......................................................... 20,502 108,357 108,208 108,911
Net Income-GAAP Basis.................................................. 4,191,432 5,243,361 5,529,262 5,710,940
Taxable Income (Loss):
-- from operations.................................................... 708,829 2,492,141 2,938,913 3,240,014
-- from gain on sale.................................................. 3,373,025(1) 0 0 0
-- from extraordinary charge.......................................... (852,511)(2) 0 0 0
Cash generated from operations(3)...................................... 5,009,304 5,458,974 5,743,427 5,749,481
Cash generated from sales.............................................. 5,302,208(1) 0 0 0
Cash generated from refinancing........................................ 0 0 0 0
Cash generated from other.............................................. 0 0 0 0
Cash generated from operations, sales, refinancing and other........... 10,311,512 5,458,974 5,743,427 5,749,481
Less: Cash distribution to investors:
-- from operating cash flow(4)........................................ 4,125,001 4,073,945 3,830,020 4,131,061
-- from sales and refinancing......................................... 0 5,280,000 0 0
-- other.............................................................. 0 0 0 0
Cash generated (deficiency) after cash distributions................... 6,186,511 (3,894,971) 1,913,407 1,618,420
Less: Special items.................................................... 0 0 0 0
Cash generated (deficiency) after cash distributions and special
items................................................................. 6,186,511 (3,894,971) 1,913,407 1,618,420
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income....................................................... $ (3.21) $ 74.01 $ 87.28 $ 96.22
Capital gain.......................................................... 101.19 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis)
-- Investment income................................................. 122.50 155.71 113.74 122.68
-- Return of capital................................................. 0 123.68 0 0
Source (on cash basis):
-- Sales.............................................................. 0 160.0 0 0
-- Refinancing........................................................ 0 0 0 0
-- Other.............................................................. 0 0 0 0
-- Operations......................................................... 122.50 119.40 113.74 122.68
Amount (in percentage terms) remaining invested in program properties
at the end of the last year reported in the Table (original total
acquisition cost of properties retained divided by original total
acquisition cost of all properties in program)........................ 84.41% 84.41% 84.41% 84.41%
<CAPTION>
1990 1991 1992 1993
---------- ---------- ---------- -----------
Gross Revenues......................................................... $8,713,691 $8,699,175 $8,478,263 $ 7,554,227
Profit on sale of properties........................................... N/A N/A N/A N/A
Extraordinary charges on extinguishment of debt N/A N/A N/A N/A
Write-down of property................................................. N/A N/A N/A (1,302,318) (6)
Other income...........................................................
Less:
Operating expenses.................................................... 713,979 855,729 1,533,036 1,441,186
Interest expense...................................................... 2,184,359 2,073,632 1,936,878 1,734,434
Depreciation.......................................................... 108,434 108,272 108,132 147,229
Net Income-GAAP Basis.................................................. 5,706,919 5,631,542 4,900,217 2,929,060
Taxable Income (Loss):
-- from operations.................................................... 3,295,198 3,439,197 5,452,217 5,504,655
-- from gain on sale.................................................. 0 0 0 0
-- from extraordinary charge.......................................... 0 0 0 0
Cash generated from operations(3)...................................... 5,785,928 5,712,639 5,252,425 4,387,721
Cash generated from sales.............................................. 0 0 0 0
Cash generated from refinancing........................................ 0 0 0 0
Cash generated from other.............................................. 0 0 8,533,614(5) 2,260,792
Cash generated from operations, sales, refinancing and other........... 5,785,928 5,712,639 13,786,039 6,648,513
Less: Cash distribution to investors:
-- from operating cash flow(4)........................................ 4,469,143 4,649,632 4,925,081 4,606,531
-- from sales and refinancing......................................... 0 0 0 0
-- other.............................................................. 0 0 3,333,333(5) 0
Cash generated (deficiency) after cash distributions................... 1,316,785 1,063,007 5,527,625 2,041,982
Less: Special items.................................................... 0 0 0 0
Cash generated (deficiency) after cash distributions and special
items................................................................. 1,316,785 1,063,007 5,527,625 2,041,982
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income....................................................... $ 97.86 $ 102.13 $ 161.91 $ 163.47
Capital gain.......................................................... 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis)
-- Investment income................................................. 132.72 138.08 145.52 86.98
-- Return of capital................................................. 0 0 100.74 48.83
Source (on cash basis):
-- Sales.............................................................. 0 0 0 0
-- Refinancing........................................................ 0 0 0 0
-- Other.............................................................. 0 0 100.00(5) 0
-- Operations......................................................... 132.72 138.08 146.26 136.80
Amount (in percentage terms) remaining invested in program properties
at the end of the last year reported in the Table (original total
acquisition cost of properties retained divided by original total
acquisition cost of all properties in program)........................ 84.41% 84.41% 84.41% 84.41 %
<CAPTION>
1994 1995 1996
---------- ---------- -----------
Gross Revenues......................................................... $7,391,852 $7,249,265 5,730,082
Profit on sale of properties........................................... N/A N/A N/A
Extraordinary charges on extinguishment of debt N/A N/A N/A
Write-down of property................................................. (697,325)(7) (146,184)(8) N/A
Other income........................................................... 11,499,187(9) N/A
Less:
Operating expenses.................................................... 1,719,172 1,173,053 1,031,997
Interest expense...................................................... 1,602,175 1,255,047 75,158
Depreciation.......................................................... 158,367 198,590 188,893
Net Income-GAAP Basis.................................................. 3,214,813 15,975,567 4,434,034
Taxable Income (Loss):
-- from operations.................................................... 4,461,854 23,951,874 2,988,189
-- from gain on sale.................................................. 0 157,910
-- from extraordinary charge.......................................... 0 0
Cash generated from operations(3)...................................... 4,647,375 12,917,577 3,906,606
Cash generated from sales.............................................. 0 5,435,869(9) 1,853,816(10)
Cash generated from refinancing........................................ 0
Cash generated from other.............................................. 2,286,195 0 0
Cash generated from operations, sales, refinancing and other........... 6,933,570 18,353,446 5,760,422
Less: Cash distribution to investors:
-- from operating cash flow(4)........................................ 4,656,367 4,722,367 3,319,280
-- from sales and refinancing......................................... 0 0 0
-- other.............................................................. 0 8,000,000 0
Cash generated (deficiency) after cash distributions................... 2,277,203 5,631,079 2,441,142
Less: Special items.................................................... 0 0 0
Cash generated (deficiency) after cash distributions and special
items................................................................. 2,277,203 5,361,079 2,441,142
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income....................................................... $ 132.50 $ 711.33 $ 88.74
Capital gain.......................................................... 0 0 4.69
Cash Distributions to Investors:
Source (on GAAP basis)
-- Investment income................................................. 95.47 376.83 98.57
-- Return of capital................................................. 41.82 0 0
Source (on cash basis):
-- Sales.............................................................. 0 0 0
-- Refinancing........................................................ 0 0 0
-- Other.............................................................. 0 0 0
-- Operations......................................................... 138.28 140.24 98.57
Amount (in percentage terms) remaining invested in program properties
at the end of the last year reported in the Table (original total
acquisition cost of properties retained divided by original total
acquisition cost of all properties in program)........................ 84.41% 84.41% 68.83%
</TABLE>
FOOTNOTES
(1) Results from the sale of properties net leased to Commodities Corporation
and Knudsen Corporation.
(2) Represents unamortized balance of deferred charges in connection with
refinancing of mortgage loan on property net leased to Gibson Greeting
Cards, Inc. and pay-off of mortgage loan on property net leased to The
Leslie Fay Company.
(3) For the years up to and including 1985, the figures for cash generated from
operations were derived from the Statements of Changes in Financial
Position, whereas for the years after 1985, the figures were derived from
the Statements of Cash Flows in accordance with SFAS. No. 95. In
determining Cash from Operations pursuant to the Statement of Cash Flows,
the effects of changes primarily in accrued liabilities, receivables and
other assets are taken into account but other items such as principal
amortization of loans are not included. Cash from operations pursuant to
the Statement of Changes in Financial Position includes the effect of loan
amortization, but excludes the effects of changes in accrued liabilities,
receivables and other assets.
31
<PAGE> 33
(4) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations
in prior years that has not previously been distributed.
(5) Represents deposit received from Leslie Fay Co. in the amount of $8,533,614
for partial payment due under a purchase option for property it leases in
Wilkes Barre, Pennsylvania. $3,333,333 of this amount was distributed to
partners in July 1992.
(6) Represents write-down of the Moorestown, N.J. property.
(7) Represents write-down of the Reno, Nevada property.
(8) Represents write-down of the Leslie Fay property to net sales proceeds.
(9) Results of settlement with Leslie Fay.
(10) Represents sales proceeds of property in Wilkes Barre, Pennsylvania.
NOTES
(1) CPA(R):3 made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1997 -- $24.80 and April
1997 -- $24.82.
32
<PAGE> 34
TABLE III (4 OF 11)
OPERATING RESULTS OF PRIOR PROGRAMS
Table III includes information showing the start-up and operational phase of
Prior Programs, the offerings of which have been closed since December 31, 1979.
This Table is designed to provide the investor with information on the financial
operations of such Prior Programs. The results shown in this Table are in all
cases for years ended December 31. THE INFORMATION PRESENTED IN THIS TABLE
SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PARTNERSHIPS. MORTGAGE FINANCING FOR THE CPA(R)
PARTNERSHIPS MAY HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR
INVESTMENT BY SUCH PARTNERSHIPS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY
ALTER CERTAIN OF THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CPA(R):4
----------------------
1982 1983
-------- -----------
<S> <C> <C>
Gross Revenues.................................................................................... $ 5,916 $ 7,136,840
Profit on sale of properties...................................................................... N/A N/A
Extraordinary gain................................................................................ N/A N/A
Write-down of property............................................................................ N/A N/A
Extraordinary charge on extinguishment of debt.................................................... N/A N/A
Other............................................................................................. N/A N/A
Less:
Operating expenses............................................................................... 9,137 274,260
Interest expense................................................................................. 5,784 3,180,356
Depreciation..................................................................................... 1,302 346,155
Net Income (Loss)-GAAP Basis...................................................................... (10,307) 3,336,069
Taxable Income (Loss):
-- from operations............................................................................... (2,604) 781,413
-- from gain on sale............................................................................. 0 0
-- from extraordinary charge..................................................................... 0 0
-- other......................................................................................... 0 0
Cash generated from operations(6)................................................................. (3,135) 3,471,621
Cash generated from sales......................................................................... 0 0
Cash generated from refinancing................................................................... 0 0
Cash generated from other......................................................................... 0 0
Cash generated from operations, sales, refinancing and other...................................... (3,135) 3,471,621
Less: Cash distribution to investors:
-- from operating cash flow(8)................................................................... 0 2,345,537
-- from sales and refinancing.................................................................... 0 0
Cash generated (deficiency) after cash distributions.............................................. 0 1,126,084
Less: Special items............................................................................... 0 0
Cash generated (deficiency) after cash distributions and special items............................ 0 1,126,084
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)........................................................................... $ 0 $ 21.01
Other............................................................................................ 0 0
Capital gain..................................................................................... 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................................. 0 63.06
-- Return of capital............................................................................. 0 0
Source (on cash basis):
-- Sales......................................................................................... 0 0
-- Refinancing................................................................................... 0 0
-- Operations.................................................................................... 0 63.06
Amount (in percentage terms) remaining invested in program properties at the end of the last year
reported in the Table (original total acquisition cost of properties retained divided by original
total acquisition cost of all properties in program)............................................. N/A N/A
<CAPTION>
1984 1985
----------- -----------
<S> <C><C>
Gross Revenues.................................................................................... $10,976,004 $10,950,473
Profit on sale of properties...................................................................... N/A N/A
Extraordinary gain................................................................................ N/A N/A
Write-down of property............................................................................ N/A N/A
Extraordinary charge on extinguishment of debt.................................................... N/A N/A
Other............................................................................................. N/A N/A
Less:
Operating expenses............................................................................... 245,150 278,838
Interest expense................................................................................. 5,453,442 5,395,023
Depreciation..................................................................................... 808,870 828,303
Net Income (Loss)-GAAP Basis...................................................................... 4,468,542 4,448,309
Taxable Income (Loss):
-- from operations............................................................................... (281,447) (98,623)
-- from gain on sale............................................................................. 0 0
-- from extraordinary charge..................................................................... 0 0
-- other......................................................................................... 0 0
Cash generated from operations(6)................................................................. 4,787,836 4,728,701
Cash generated from sales......................................................................... 0 0
Cash generated from refinancing................................................................... 0 0
Cash generated from other......................................................................... 0 0
Cash generated from operations, sales, refinancing and other...................................... 4,787,836 4,728,701
Less: Cash distribution to investors:
-- from operating cash flow(8)................................................................... 4,565,144 4,603,376
-- from sales and refinancing.................................................................... 0 0
Cash generated (deficiency) after cash distributions.............................................. 222,692 125,325
Less: Special items............................................................................... 0 0
Cash generated (deficiency) after cash distributions and special items............................ 222,692 125,325
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)........................................................................... $ (6.18) $ (2.17)
Other............................................................................................ 0 0
Capital gain..................................................................................... 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................................. 98.18 97.73
-- Return of capital............................................................................. 2.12 3.41
Source (on cash basis):
-- Sales......................................................................................... 0 0
-- Refinancing................................................................................... 0 0
-- Operations.................................................................................... 100.30 101.14
Amount (in percentage terms) remaining invested in program properties at the end of the last year
reported in the Table (original total acquisition cost of properties retained divided by original
total acquisition cost of all properties in program)............................................. 100% 100%
<CAPTION>
1986 1987
----------- -----------
Gross Revenues.................................................................................... $10,021,241 $ 8,733,350
Profit on sale of properties...................................................................... 1,454,064(1) N/A
Extraordinary gain................................................................................ N/A N/A
Write-down of property............................................................................ (2,266,656)(2) N/A
Extraordinary charge on extinguishment of debt.................................................... N/A N/A
Other............................................................................................. N/A N/A
Less:
Operating expenses............................................................................... 529,941 566,780
Interest expense................................................................................. 5,149,287 4,101,592
Depreciation..................................................................................... 1,059,071 1,628,118
Net Income (Loss)-GAAP Basis...................................................................... 2,470,350 2,436,860
Taxable Income (Loss):
-- from operations............................................................................... (402,328) (433,637)
-- from gain on sale............................................................................. 4,047,994(1) 0
-- from extraordinary charge..................................................................... 0 0
-- other......................................................................................... 0 0
Cash generated from operations(6)................................................................. 4,857,156 4,115,421
Cash generated from sales......................................................................... 4,483,969(1) 0
Cash generated from refinancing................................................................... 0 0
Cash generated from other......................................................................... 0 0
Cash generated from operations, sales, refinancing and other...................................... 9,341,125 4,115,421
Less: Cash distribution to investors:
-- from operating cash flow(8)................................................................... 4,639,789 4,594,265
-- from sales and refinancing.................................................................... 0 1,711,359
Cash generated (deficiency) after cash distributions.............................................. 4,701,336 (2,190,203)
Less: Special items............................................................................... 0 0
Cash generated (deficiency) after cash distributions and special items............................ 4,701,336 (2,190,203)
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)........................................................................... $ (8.84) $ (9.52)
Other............................................................................................ 0 0
Capital gain..................................................................................... 88.94 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................................. 54.28 53.53
-- Return of capital............................................................................. 47.66 87.02
Source (on cash basis):
-- Sales......................................................................................... 0 40.00
-- Refinancing................................................................................... 0 0
-- Operations.................................................................................... 101.94 100.55
Amount (in percentage terms) remaining invested in program properties at the end of the last year
reported in the Table (original total acquisition cost of properties retained divided by original
total acquisition cost of all properties in program)............................................. 85.20% 85.20%
<CAPTION>
1988 1989
----------- -----------
Gross Revenues.................................................................................... $ 9,117,527 $ 9,393,587
Profit on sale of properties...................................................................... N/A N/A
Extraordinary gain................................................................................ N/A N/A
Write-down of property............................................................................ N/A N/A
Extraordinary charge on extinguishment of debt.................................................... (160,000)(4) (70,266)(5)
Other............................................................................................. N/A N/A
Less:
Operating expenses............................................................................... 538,523 614,235
Interest expense................................................................................. 3,805,805 3,552,960
Depreciation..................................................................................... 1,468,317 1,243,008
Net Income (Loss)-GAAP Basis...................................................................... 3,144,882 3,913,118
Taxable Income (Loss):
-- from operations............................................................................... 561,034 1,408,950
-- from gain on sale............................................................................. 0 0
-- from extraordinary charge..................................................................... (160,000)(4) (70,266)(5)
-- other......................................................................................... 0 0
Cash generated from operations(6)................................................................. 4,763,309 5,289,802
Cash generated from sales......................................................................... 0 0
Cash generated from refinancing................................................................... 0 0
Cash generated from other......................................................................... 0 0
Cash generated from operations, sales, refinancing and other...................................... 4,763,309 5,289,802
Less: Cash distribution to investors:
-- from operating cash flow(8)................................................................... 4,522,360 4,564,233
-- from sales and refinancing.................................................................... 0 0
Cash generated (deficiency) after cash distributions.............................................. 240,949 725,569
Less: Special items............................................................................... 0 0
Cash generated (deficiency) after cash distributions and special items............................ 240,949 725,569
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)........................................................................... $ 12.33 $ 29.41
Other............................................................................................ 0 0
Capital gain..................................................................................... 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................................. 69.10 85.97
-- Return of capital............................................................................. 30.26 14.31
Source (on cash basis):
-- Sales......................................................................................... 0 0
-- Refinancing................................................................................... 0 0
-- Operations.................................................................................... 99.36 100.28
Amount (in percentage terms) remaining invested in program properties at the end of the last year
reported in the Table (original total acquisition cost of properties retained divided by original
total acquisition cost of all properties in program)............................................. 85.20% 85.20%
<CAPTION>
1990 1991
----------- -----------
Gross Revenues.................................................................................... $ 9,694,000 $ 9,653,180
Profit on sale of properties...................................................................... N/A N/A
Extraordinary gain................................................................................ 2,080,304(3) N/A
Write-down of property............................................................................ (2,080,304)(2) N/A
Extraordinary charge on extinguishment of debt.................................................... N/A N/A
Other............................................................................................. N/A N/A
Less:
Operating expenses............................................................................... 752,499 790,950
Interest expense................................................................................. 3,504,016 3,441,293
Depreciation..................................................................................... 1,207,776 1,184,801
Net Income (Loss)-GAAP Basis...................................................................... 4,229,709 4,236,136
Taxable Income (Loss):
-- from operations............................................................................... 1,518,550 1,702,996
-- from gain on sale............................................................................. 0 0
-- from extraordinary charge..................................................................... 0 0
-- other......................................................................................... 0 0
Cash generated from operations(6)................................................................. 5,611,039 5,479,320
Cash generated from sales......................................................................... 0 0
Cash generated from refinancing................................................................... 0 0
Cash generated from other......................................................................... 0 0
Cash generated from operations, sales, refinancing and other...................................... 5,611,039 5,479,320
Less: Cash distribution to investors:
-- from operating cash flow(8)................................................................... 4,627,954 4,729,905
-- from sales and refinancing.................................................................... 0 0
Cash generated (deficiency) after cash distributions.............................................. 983,085 749,415
Less: Special items............................................................................... 0 0
Cash generated (deficiency) after cash distributions and special items............................ 983,085 749,415
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)........................................................................... $ 33.36 $ 37.42
Other............................................................................................ 0 0
Capital gain..................................................................................... 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................................. 92.93 93.07
-- Return of capital............................................................................. 8.75 10.85
Source (on cash basis):
-- Sales......................................................................................... 0 0
-- Refinancing................................................................................... 0 0
-- Operations.................................................................................... 101.68 103.92
Amount (in percentage terms) remaining invested in program properties at the end of the last year
reported in the Table (original total acquisition cost of properties retained divided by original
total acquisition cost of all properties in program)............................................. 85.20% 85.20%
<CAPTION>
1992 1993
----------- -----------
Gross Revenues.................................................................................... $ 9,959,144 $12,450,374
Profit on sale of properties...................................................................... N/A N/A
Extraordinary gain................................................................................ N/A 345,000(9)
Write-down of property............................................................................ N/A N/A
Extraordinary charge on extinguishment of debt.................................................... N/A N/A
Other............................................................................................. (44,308)(7) N/A
Less:
Operating expenses............................................................................... 1,647,627 3,375,359
Interest expense................................................................................. 3,309,359 2,987,868
Depreciation..................................................................................... 1,259,693 1,346,641
Net Income (Loss)-GAAP Basis...................................................................... 3,698,157 5,085,506
Taxable Income (Loss):
-- from operations............................................................................... 1,737,637 3,540,526
-- from gain on sale............................................................................. 0 957,340
-- from extraordinary charge..................................................................... 0 0
-- other......................................................................................... (14,801)(7) 0
Cash generated from operations(6)................................................................. 5,071,063 6,231,586
Cash generated from sales......................................................................... 0 0
Cash generated from refinancing................................................................... 0 0
Cash generated from other......................................................................... 14,195(7) 0
Cash generated from operations, sales, refinancing and other...................................... 5,085,258 6,231,586
Less: Cash distribution to investors:
-- from operating cash flow(8)................................................................... 4,819,116 4,854,619
-- from sales and refinancing.................................................................... 0 0
Cash generated (deficiency) after cash distributions.............................................. 266,142 1,376,967
Less: Special items............................................................................... 0 0
Cash generated (deficiency) after cash distributions and special items............................ 266,142 1,376,967
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)........................................................................... $ 38.18 $ 77.79
Other............................................................................................ (0.33) 0
Capital gain..................................................................................... 0 21.03
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................................. 81.25 106.66
-- Return of capital............................................................................. 24.63 0
Source (on cash basis):
-- Sales......................................................................................... 0 0
-- Refinancing................................................................................... 0 0
-- Operations.................................................................................... 105.88 106.66
Amount (in percentage terms) remaining invested in program properties at the end of the last year
reported in the Table (original total acquisition cost of properties retained divided by original
total acquisition cost of all properties in program)............................................. 85.20% 85.20%
<CAPTION>
1994 1995
----------- -----------
Gross Revenues.................................................................................... $11,570,621 $11,896,324
Profit on sale of properties...................................................................... N/A 3,330,098(10)
Extraordinary gain................................................................................ N/A N/A
Write-down of property............................................................................ N/A N/A
Extraordinary charge on extinguishment of debt.................................................... N/A N/A
Other............................................................................................. N/A N/A
Less:
Operating expenses............................................................................... 3,590,081 3,299,454
</TABLE>
33
<PAGE> 35
FOOTNOTES
(1) Results from the sale of properties net leased to Knudsen Corporation.
(2) Represents writedown of Beaumont, Texas property, formerly net leased to
Gulf Consolidated Services, Inc.
(3) Represents gain on restructuring of debt on Beaumont, Texas property
formerly net leased to Gulf Consolidated Services, Inc.
(4) Represents prepayment charge resulting from refinancing of the original
loan for property net leased to Simplicity Manufacturing, Inc.
(5) Represents prepayment charge resulting from refinancing of the original
loan for property net leased to Brodart Co.
(6) For the years up to and including 1985, the figures for cash generated from
operations were derived from the Statements of Changes in Financial
Position, whereas for the years after 1985, the figures were derived from
the Statements of Cash Flows in accordance with SFAS No. 95. In determining
Cash from Operations pursuant to the Statement of Cash Flows, the effects
of changes primarily in accrued liabilities, receivables and other assets
are taken into account, but other items such as principal amortization of
loans are not included. Cash from operations pursuant to the Statement of
Changes in Financial Position includes the effect of loan amortization, but
excludes the effects of changes in accrued liabilities, receivables and
other assets.
(7) Represents acquisition of hotel operations for a property formerly leased
to Integra-A Hotel and Restaurant Company.
(8) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations
in prior years that has not previously been distributed.
(9) Represents extinguishment of debt on the property located in Beaumont,
Texas.
(10) Results from sale of property net leased to Genesco, Inc.
(11) Includes equity income and net hotel operating results for 1996.
(12) Results from the exchange of a hotel property in Kenney, Louisiana for an
investment in American General Hospitality Operating Partnership L.D.
NOTES
(1) CPA(R):4 made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1997 -- $24.56; April,
1997 -- $24.58.
34
<PAGE> 36
TABLE III (5 OF 11)
OPERATING RESULTS OF PRIOR PROGRAMS
Table III includes information showing the start-up and operational phase
of Prior Programs, the offerings of which have been closed since December 31,
1979. This Table is designed to provide the investor with information on the
financial operations of such Prior Programs. The results shown in this Table are
in all cases for years ended December 31. THE INFORMATION PRESENTED IN THIS
TABLE SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PARTNERSHIPS. MORTGAGE FINANCING FOR THE CPA(R)
PARTNERSHIPS MAY HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR
INVESTMENT BY SUCH PARTNERSHIPS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY
ALTER CERTAIN OF THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CPA(R):5
-----------------------------------------------
1983 1984 1985 1986
-------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Gross Revenues.............................................................. $151,212 $7,692,603 $9,285,385 $12,857,025
Other....................................................................... N/A N/A N/A N/A
Profit (loss) on sale or disposition of properties.......................... N/A N/A N/A N/A
Extraordinary charge on extinguishment of debt.............................. N/A N/A N/A N/A
Write-down of property...................................................... N/A N/A N/A (860,000)(4)
Less:
Operating expenses......................................................... 81,016 195,585 363,490 493,702
Interest expenses.......................................................... 1,041 1,828,708 3,557,103 6,447,584
Depreciation............................................................... 0 90,662 890,342 2,300,987
Minority Interest.......................................................... N/A N/A N/A 80,834
Net Income-GAAP Basis....................................................... 69,155 5,577,648 4,474,450 2,673,918
Taxable Income (Loss):
-- from operations......................................................... 83,341 4,180,317 2,173,368 277,783
-- from gain (loss) on sale or disposition................................. 0 0 0 0
-- from other.............................................................. 0 0 0 0
Cash generated from operations(10).......................................... 77,254 5,612,247 5,157,259 6,550,334
Cash generated from sales................................................... 0 0 0 0
Cash generated from refinancing............................................. 0 0 0 0
Cash generated from operations, sales and refinancing....................... 77,254 5,612,247 5,157,259 6,550,334
Less: Cash distribution to investors:
-- from operating cash flow(11)............................................ 0 5,150,600 5,324,013 5,481,771
-- from sales and refinancing.............................................. 0 0 0 0
Cash generated (deficiency) after cash distributions........................ 77,254 461,647 (166,754) 1,068,563
Less: special items.........................................................
Cash generated (deficiency) after cash distributions and special items...... 77,254 461,647 (166,754) 1,068,563
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)..................................................... $ 1.38 $ 69.43 $ 36.09 $ 4.61
Capital gain (loss)........................................................ 0 0 0 0
Other...................................................................... 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income....................................................... 0 85.54 74.31 44.41
-- Return of capital....................................................... 0 0 14.11 46.63
Source (on cash basis):
-- Sales................................................................... 0 0 0 0
-- Refinancing............................................................. 0 0 0 0
-- Operations.............................................................. 0 85.54 88.42 91.04
Amount (in percentage terms) remaining invested in program properties at the
end of the last year reported in the Table (original total acquisition cost
of properties retained divided by original total acquisition cost of all
properties in program...................................................... N/A N/A N/A N/A
<CAPTION>
1987 1988 1989
----------- ----------- -----------
<S> <C><C>
Gross Revenues.............................................................. $14,405,568 $15,061,441 $15,324,326
Other....................................................................... N/A N/A N/A
Profit (loss) on sale or disposition of properties.......................... (457,484)(1) N/A 47,319(2)
Extraordinary charge on extinguishment of debt.............................. N/A N/A N/A
Write-down of property...................................................... N/A N/A N/A
Less:
Operating expenses......................................................... 1,327,685 758,159 1,305,074
Interest expenses.......................................................... 7,050,466 6,926,712 7,052,901
Depreciation............................................................... 2,506,914 2,637,104 2,632,299
Minority Interest.......................................................... 165,810 197,354 17,714
Net Income-GAAP Basis....................................................... 2,897,209 4,542,112 4,363,657
Taxable Income (Loss):
-- from operations......................................................... (1,015,507) 406,029 799,445
-- from gain (loss) on sale or disposition................................. (1,065,808) 0 87,421(2)
-- from other.............................................................. 0 0 0
Cash generated from operations(10).......................................... 5,622,209 6,571,710 6,911,989
Cash generated from sales................................................... 500,000(1) 0 239,362(2)
Cash generated from refinancing............................................. 0 0 0
Cash generated from operations, sales and refinancing....................... 6,122,209 6,571,710 7,151,351
Less: Cash distribution to investors:
-- from operating cash flow(11)............................................ 5,535,961 5,587,744 5,635,916
-- from sales and refinancing.............................................. 0 0 0
Cash generated (deficiency) after cash distributions........................ 586,248 983,966 1,515,435
Less: special items.........................................................
Cash generated (deficiency) after cash distributions and special items...... 586,248 983,966 1,515,435
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)..................................................... $ (16.87) $ 6.74 $ 13.28
Capital gain (loss)........................................................ (17.69) 0 1.45
Other...................................................................... 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income....................................................... 48.12 75.43 72.47
-- Return of capital....................................................... 43.82 17.37 21.13
Source (on cash basis):
-- Sales................................................................... 0 0 0
-- Refinancing............................................................. 0 0 0
-- Operations.............................................................. 91.94 92.80 93.60
Amount (in percentage terms) remaining invested in program properties at the
end of the last year reported in the Table (original total acquisition cost
of properties retained divided by original total acquisition cost of all
properties in program...................................................... N/A 98.51% 98.51%
<CAPTION>
1990 1991 1992
----------- ----------- -----------
Gross Revenues.............................................................. $14,912,517 $15,167,339 $18,195,423 (8)
Other....................................................................... N/A (103,595)(5) 1,872,534
Profit (loss) on sale or disposition of properties.......................... N/A (35,987)(6) (488,795)(9)
Extraordinary charge on extinguishment of debt.............................. (32,714)(3) N/A N/A
Write-down of property...................................................... N/A (300,000)(7) N/A
Less:
Operating expenses......................................................... 1,503,721 3,354,854 6,111,874
Interest expenses.......................................................... 6,512,534 6,042,335 5,293,044
Depreciation............................................................... 2,620,793 2,622,033 2,317,013
Minority Interest.......................................................... 114,721 (174,657) N/A
Net Income-GAAP Basis....................................................... 4,128,034 2,883,192 5,857,231
Taxable Income (Loss):
-- from operations......................................................... 857,331 1,077,650 1,530,150
-- from gain (loss) on sale or disposition................................. 488,066 (2,674)(6) 871,676
-- from other.............................................................. 0 (154,918)(5) 2,617,784(8)
Cash generated from operations(10).......................................... 5,895,617 5,278,070 6,202,200
Cash generated from sales................................................... 0 120,000(6) 0
Cash generated from refinancing............................................. 0 0 0
Cash generated from operations, sales and refinancing....................... 5,895,617 5,398,070 6,202,200
Less: Cash distribution to investors:
-- from operating cash flow(11)............................................ 5,684,084 5,732,256 5,780,425
-- from sales and refinancing.............................................. 0 0 0
Cash generated (deficiency) after cash distributions........................ 211,533 (334,186) 421,775
Less: special items.........................................................
Cash generated (deficiency) after cash distributions and special items...... 211,533 (334,186) 421,775
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)..................................................... $ 14.24 $ 17.90 $ 25.41
Capital gain (loss)........................................................ 0 (0.04) 14.48
Other...................................................................... 0 0 43.48
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income....................................................... 68.56 47.88 96.00
-- Return of capital....................................................... 25.84 47.32 0
Source (on cash basis):
-- Sales................................................................... 0 0 0
-- Refinancing............................................................. 0 0 0
-- Operations.............................................................. 94.40 95.20 96.00
Amount (in percentage terms) remaining invested in program properties at the
end of the last year reported in the Table (original total acquisition cost
of properties retained divided by original total acquisition cost of all
properties in program...................................................... 97.60% 97.45% 94.12 %
<CAPTION>
1993 1994 1995
----------- ----------- -----------
Gross Revenues.............................................................. $18,260,614 $18,125,156 $15,768,137
Other....................................................................... 214,978(12) N/A N/A
Profit (loss) on sale or disposition of properties.......................... N/A 1,242,614(14) 614,234 (16)
Extraordinary charge on extinguishment of debt.............................. N/A (117,619)(15) N/A
Write-down of property...................................................... (323,611)(13) 0 (1,980,550) (17)
Less:
Operating expenses......................................................... 6,417,993 7,111,014 6,927,470
Interest expenses.......................................................... 4,941,889 4,518,529 3,495,872
Depreciation............................................................... 2,295,887 2,181,432 2,065,781
Minority Interest.......................................................... N/A N/A N/A
Net Income-GAAP Basis....................................................... 4,496,212 5,439,186 1,912,698
Taxable Income (Loss):
-- from operations......................................................... 2,039,288 866,115 1,621,566
-- from gain (loss) on sale or disposition................................. 0 10,019,470 0
-- from other.............................................................. 0 0 0
Cash generated from operations(10).......................................... 6,241,041 6,292,833 4,688,070
Cash generated from sales................................................... 0 0 1,187,362(16)
Cash generated from refinancing............................................. 0 0 0
Cash generated from operations, sales and refinancing....................... 6,241,041 6,292,833 5,875,432
Less: Cash distribution to investors:
-- from operating cash flow(11)............................................ 5,828,596 5,862,314 8,054,982
-- from sales and refinancing.............................................. 0 0 0
Cash generated (deficiency) after cash distributions........................ 412,445 430,519 (2,179,550)
Less: special items......................................................... 0 0 0
Cash generated (deficiency) after cash distributions and special items...... 412,445 430,519 (2,179,550)
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)..................................................... $ 33.87 $ 14.87 $ 26.93
Capital gain (loss)........................................................ 0 166.40 0
Other...................................................................... 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income....................................................... 74.67 90.33 31.77
-- Return of capital....................................................... 22.13 7.03 102.01
Source (on cash basis):
-- Sales................................................................... 0 0 0
-- Refinancing............................................................. 0 0 0
-- Operations.............................................................. 96.80 97.36 133.78
Amount (in percentage terms) remaining invested in program properties at the
end of the last year reported in the Table (original total acquisition cost
of properties retained divided by original total acquisition cost of all
properties in program...................................................... 94.12% 92.97% 81.82%
<CAPTION>
1996
-----------
Gross Revenues.............................................................. $13,204,966
Other....................................................................... N/A
Profit (loss) on sale or disposition of properties.......................... 5,284,165(18)
Extraordinary charge on extinguishment of debt.............................. N/A
Write-down of property...................................................... (1,300,000)(19)
Less:
Operating expenses......................................................... 6,006,397
Interest expenses.......................................................... 2,075,230
Depreciation............................................................... 1,331,028
Minority Interest.......................................................... N/A
Net Income-GAAP Basis....................................................... 7,776,476
Taxable Income (Loss):
-- from operations......................................................... 1,690,288
-- from gain (loss) on sale or disposition................................. 8,338,765
-- from other.............................................................. 0
Cash generated from operations(10).......................................... 7,901,310
Cash generated from sales................................................... 8,583,803
Cash generated from refinancing............................................. 0
Cash generated from operations, sales and refinancing....................... 16,485,113
Less: Cash distribution to investors:
-- from operating cash flow(11)............................................ 4,456,949
-- from sales and refinancing.............................................. 0
Cash generated (deficiency) after cash distributions........................ 12,028,164
Less: special items......................................................... 0
Cash generated (deficiency) after cash distributions and special items...... 12,028,164
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)..................................................... $ 28.07
Capital gain (loss)........................................................ 141.45
Other...................................................................... 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income....................................................... 74.02
-- Return of capital....................................................... 0
Source (on cash basis):
-- Sales................................................................... 0
-- Refinancing............................................................. 0
-- Operations.............................................................. 74.02
Amount (in percentage terms) remaining invested in program properties at the
end of the last year reported in the Table (original total acquisition cost
of properties retained divided by original total acquisition cost of all
properties in program...................................................... 63.06%
</TABLE>
35
<PAGE> 37
FOOTNOTES
(1) Represents sale of Buffalo, New York property formerly net leased to
Williams Hand Tool, Inc.
(2) Represents exchange of property net leased to Industrial General
Corporation.
(3) Represents prepayment charge resulting from refinancing of the original
loan for property net leased to Pace Membership Warehouse, Inc.
(4) Represents write-down of Buffalo, New York property formerly net leased to
Williams Hand Tool, Inc.
(5) Represents acquisition of hotel operations for properties formerly leased
to subsidiaries of Landmark Hotel Corporation.
(6) Results from the sale of a 3.0815 acre parcel of land which was a portion
of the property net leased to Industrial General Corporation.
(7) Represents write-down of Columbus, Georgia property leased to Williams Hand
Tool, Inc.
(8) Represents a gain on release of mortgage escrow funds and related interest
income earned in the escrow reserve accounts for the hotel properties
located in Alpena and Petoskey, Michigan.
(9) Represents disposition of Columbus, Georgia property formerly leased to
Williams Hand Tool, Inc. and sale of a parcel of land in Elyria, Ohio
formerly leased to Industrial General Corporation.
(10) For the years up to and including 1985, the figures for cash generated from
operations were derived from the Statements of Changes in Financial
Position, whereas for the years after 1985, the figures were derived from
the Statements of Cash Flows in accordance with SFAS No. 95. In determining
Cash from Operations pursuant to the Statement of Cash Flows, the effects
of changes primarily in accrued liabilities, receivables and other assets
are taken into account but other items such as principal amortization of
loans are not included. Cash from operations pursuant to the Statement of
Changes in Financial Position includes the effect of loan amortization, but
excludes the effects of changes in accrued liabilities, receivables and
other assets.
(11) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations
in prior years that has not previously been distributed.
(12) Results from the settlement and lease termination agreement for the hotel
properties in Michigan.
(13) Represents write-down of the preferred stock investment and the estimated
residual value of the South Boston and Kenbridge, Virginia properties.
(14) Results from sale of the Tampa, Florida and the Forrest City, Arkansas
properties.
(15) Represents the extinguishment of debt on the Tampa, Florida property and
properties located in Gordonsville, Virginia and North Bergen, NJ.
(16) Results from sale of properties in Bold Knob, Arkansas, Ballville, Ohio,
Newburyport, Massachusetts, Gardensville, Virginia and North Bergen, New
Jersey.
(17) Represents the writedown of hotel property in Rapid City, South Dakota and
the property on Elepia, Ohio; and writing off the note receivable and
preferred stock of Rochester Butten Company.
(18) Represents sale of property in Hodgkins, Illinois leased to GATX Logistics,
Inc., property in Helena, Montana and a hotel property in Rapid City, South
Dakota.
(19) Represents write-down of hotel property in Rapid City, South Dakota.
NOTES
(1) CPA(R):5 made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1997 -- $16.90 and
April -- $16.68.
36
<PAGE> 38
TABLE III (6 OF 11)
OPERATING RESULTS OF PRIOR PROGRAMS
Table III includes information showing the start-up and operational phase of
Prior Programs, the offerings of which have been closed since December 31, 1979.
This Table is designed to provide the investor with information on the financial
operations of such Prior Programs. The results shown in this Table are in all
cases for years ended December 31. THE INFORMATION PRESENTED IN THIS TABLE
SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PARTNERSHIPS. MORTGAGE FINANCING FOR THE CPA(R)
PARTNERSHIPS MAY HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR
INVESTMENT BY SUCH PARTNERSHIPS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY
ALTER CERTAIN OF THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CPA(R):6
--------------------------------------
1985 1986 1987
---------- ---------- ----------
<S> <C> <C> <C>
Gross Revenues....................................................................... $4,200,601 $6,432,252 $9,898,043
Gain on sale......................................................................... 0 0 0
Other................................................................................ 0 0 0
Extraordinary (charge) gain.......................................................... 0 0 0
Less:
Operating expenses.................................................................. 215,852 333,030 573,786
Interest expense.................................................................... 792,434 2,111,626 4,736,879
Depreciation........................................................................ 5,709 278,305 1,095,292
Net Income-GAAP Basis................................................................ 3,186,606 3,709,291 3,492,083
Taxable Income:
-- from operations.................................................................. 2,650,283 2,577,849 982,403
-- from gain on sale................................................................ 0 0 0
-- from extraordinary charge........................................................ 0 0 0
-- from other....................................................................... 0 0 0
Cash generated from operations(4).................................................... 3,194,889 4,509,489 5,239,285
Cash generated from sales............................................................ 0 0 0
Cash generated from refinancing...................................................... 0 0 0
Cash generated from other............................................................ 0 0 0
Cash generated from operations, sales, refinancing and other......................... 3,194,889 4,509,489 5,239,285
Less: Cash distribution to investors:
-- from operating cash flow(5)...................................................... 2,422,433 4,274,550 4,154,307
-- from sales and refinancing....................................................... 0 0 0
Cash generated (deficiency) after cash distributions................................. 772,456 234,939 1,084,978
Less: Special items................................................................. 0 0 0
Cash generated (deficiency) after cash distributions and
special items....................................................................... 772,456 234,939 1,084,978
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).............................................................. $ 51.96 $ 50.54 $ 19.26
Other............................................................................... 0 0 0
Capital gain........................................................................ 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................... 47.49 72.72 68.46
-- Return of capital............................................................... 0 7.85 12.98
Source (on cash basis):
-- Sales........................................................................... 0 0 0
-- Refinancing..................................................................... 0 0 0
-- Operations...................................................................... 47.49 80.57 81.44
Amount (in percentage terms) remaining invested in program properties at the end of
the last year reported in the Table (original total acquisition cost of properties
retained divided by original total acquisition cost of all properties in program)... N/A N/A N/A
<CAPTION>
1988 1989
----------- -----------
<S> <<C>
Gross Revenues....................................................................... $11,197,061 $10,904,247
Gain on sale......................................................................... 0 0
Other................................................................................ 0 0
Extraordinary (charge) gain.......................................................... 0 0
Less:
Operating expenses.................................................................. 558,887 575,222
Interest expense.................................................................... 5,416,130 5,388,140
Depreciation........................................................................ 1,405,857 1,418,340
Net Income-GAAP Basis................................................................ 3,816,187 3,522,545
Taxable Income:
-- from operations.................................................................. 1,219,990 1,218,257
-- from gain on sale................................................................ 0 0
-- from extraordinary charge........................................................ 0 0
-- from other....................................................................... 0 0
Cash generated from operations(4).................................................... 4,983,579 5,032,548
Cash generated from sales............................................................ 0 0
Cash generated from refinancing...................................................... 0 0
Cash generated from other............................................................ 0 0
Cash generated from operations, sales, refinancing and other......................... 4,983,579 5,032,548
Less: Cash distribution to investors:
-- from operating cash flow(5)...................................................... 4,198,176 4,247,146
-- from sales and refinancing....................................................... 0 0
Cash generated (deficiency) after cash distributions................................. 785,403 785,402
Less: Special items................................................................. 0 0
Cash generated (deficiency) after cash distributions and
special items....................................................................... 785,403 785,402
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).............................................................. $ 23.92 $ 23.88
Other............................................................................... 0 0
Capital gain........................................................................ 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................... 74.81 69.06
-- Return of capital............................................................... 7.49 14.20
Source (on cash basis):
-- Sales........................................................................... 0 0
-- Refinancing..................................................................... 0 0
-- Operations...................................................................... 82.30 83.26
Amount (in percentage terms) remaining invested in program properties at the end of
the last year reported in the Table (original total acquisition cost of properties
retained divided by original total acquisition cost of all properties in program)... 100% 100%
<CAPTION>
1990 1991 1992
----------- ------------ ------------
Gross Revenues....................................................................... $11,092,133 $ 11,406,582 $ 14,177,113
Gain on sale......................................................................... 0 0 0
Other................................................................................ 0 (55,783)(1) (75,211
)(3)
Extraordinary (charge) gain.......................................................... 0 (13,559)(2) 0
Less:
Operating expenses.................................................................. 802,183 1,078,174 2,858,645
Interest expense.................................................................... 5,269,354 5,222,844 5,319,971
Depreciation........................................................................ 1,418,339 1,418,968 1,668,951
Net Income-GAAP Basis................................................................ 3,602,257 3,617,254 4,254,335
Taxable Income:
-- from operations.................................................................. 1,338,235 1,831,848 2,227,427
-- from gain on sale................................................................ 0 0 0
-- from extraordinary charge........................................................ 0 (13,559)(2) 0
-- from other....................................................................... 0 (250,032)(1) 27,303
(3)
Cash generated from operations(4).................................................... 5,201,952 5,719,005 6,066,705
Cash generated from sales............................................................ 0 0 0
Cash generated from refinancing...................................................... 0 870,913 2,414,076
Cash generated from other............................................................ 0 0 17,008
(3)
Cash generated from operations, sales, refinancing and other......................... 5,201,952 6,589,918 8,497,789
Less: Cash distribution to investors:
-- from operating cash flow(5)...................................................... 4,316,026 4,421,586 4,633,297
-- from sales and refinancing....................................................... 0 0 0
Cash generated (deficiency) after cash distributions................................. 885,926 2,168,332 3,864,492
Less: Special items................................................................. 0 0 0
Cash generated (deficiency) after cash distributions and
special items....................................................................... 885,926 2,168,332 3,864,492
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).............................................................. $ 26.23 $ 35.65 $ 43.67
Other............................................................................... 0 0 0.54
Capital gain........................................................................ 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................... 70.62 70.91 83.40
-- Return of capital............................................................... 13.99 15.77 7.43
Source (on cash basis):
-- Sales........................................................................... 0 0 0
-- Refinancing..................................................................... 0 0 0
-- Operations...................................................................... 84.61 86.68 90.83
Amount (in percentage terms) remaining invested in program properties at the end of
the last year reported in the Table (original total acquisition cost of properties
retained divided by original total acquisition cost of all properties in program)... 100% 100% 100
%
<CAPTION>
1993 1994 1995
----------- ----------- -----------
Gross Revenues....................................................................... $15,387,180 $15,693,853 $16,737,899
Gain on sale......................................................................... 0 0 0
Other................................................................................ N/A N/A N/A
Extraordinary (charge) gain.......................................................... N/A N/A 2,088,268(6)
Less:
Operating expenses.................................................................. 4,706,491 5,933,070 4,942,528
Interest expense.................................................................... 5,122,703 5,040,589 4,499,692
Depreciation........................................................................ 1,637,678 1,621,029 1,525,011
Net Income-GAAP Basis................................................................ 3,920,308 3,099,165 7,858,936
Taxable Income:
-- from operations.................................................................. 2,091,787 1,156,303 7,871,636
-- from gain on sale................................................................ 0 0 0
-- from extraordinary charge........................................................ 0 0 0
-- from other....................................................................... 0 0 0
Cash generated from operations(4).................................................... 5,531,994 5,094,336 11,133,036
Cash generated from sales............................................................ 0 0 0
Cash generated from refinancing...................................................... 0 0 0
Cash generated from other............................................................ 0 0 0
Cash generated from operations, sales, refinancing and other......................... 5,531,994 5,094,336 11,133,036
Less: Cash distribution to investors:
-- from operating cash flow(5)...................................................... 4,676,223 4,704,691 4,736,359
-- from sales and refinancing....................................................... 0 0 0
Cash generated (deficiency) after cash distributions................................. 855,771 389,645 6,396,677
Less: Special items................................................................. 0 0 0
Cash generated (deficiency) after cash distributions and
special items....................................................................... 855,771 389,645 6,396,677
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).............................................................. $ 41.01 $ 22.67 $ 154.38
Other............................................................................... 0 0 0
Capital gain........................................................................ 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................... 76.85 60.76 92.89
-- Return of capital............................................................... 14.82 31.47 0
Source (on cash basis):
-- Sales........................................................................... 0 0 0
-- Refinancing..................................................................... 0 0 0
-- Operations...................................................................... 91.67 92.23 92.89
Amount (in percentage terms) remaining invested in program properties at the end of
the last year reported in the Table (original total acquisition cost of properties
retained divided by original total acquisition cost of all properties in program)... 100% 100% 100%
<CAPTION>
1996
-----------
Gross Revenues....................................................................... $16,537,296
Gain on sale......................................................................... 70,878(7)
Other................................................................................ N/A
Extraordinary (charge) gain.......................................................... N/A
Less:
Operating expenses.................................................................. 4,914,538
Interest expense.................................................................... 4,003,726
Depreciation........................................................................ 1,664,514
Net Income-GAAP Basis................................................................ 6,025,396
Taxable Income:
-- from operations.................................................................. 3,450,345
-- from gain on sale................................................................ 242,713
-- from extraordinary charge........................................................ 0
-- from other....................................................................... 0
Cash generated from operations(4).................................................... 7,615,526
Cash generated from sales............................................................ 0
Cash generated from refinancing...................................................... 0
Cash generated from other............................................................ 0
Cash generated from operations, sales, refinancing and other......................... 7,615,526
Less: Cash distribution to investors:
-- from operating cash flow(5)...................................................... 4,880,911
-- from sales and refinancing.......................................................
Cash generated (deficiency) after cash distributions................................. 2,734,615
Less: Special items................................................................. 0
Cash generated (deficiency) after cash distributions and
special items....................................................................... 2,734,615
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).............................................................. $ 67.67
Other............................................................................... 0
Capital gain........................................................................ 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................... 95.72
-- Return of capital............................................................... 0
Source (on cash basis):
-- Sales........................................................................... 0
-- Refinancing..................................................................... 0
-- Operations...................................................................... 95.72
Amount (in percentage terms) remaining invested in program properties at the end of
the last year reported in the Table (original total acquisition cost of properties
retained divided by original total acquisition cost of all properties in program)... 99.79%
</TABLE>
FOOTNOTES
(1) Represents acquisition of hotel operations for properties formerly leased to
subsidiaries of Landmark Hotel Corporation.
(2) Represents unamortized balance of deferred charges in connection with the
refinancing of the mortgage loan secured by a property leased to Martin
Marrietta Corporation.
(3) Represents acquisition of hotel operations for property formerly leased to
Integra-A Hotel and Restaurant Company.
(4) For the years up to and including 1985, the figures for cash generated from
operations were derived from the Statements of Changes in Financial
Position, whereas for the years after 1985, the figures were derived from
the Statements of Cash Flows in accordance with SFAS No. 95. In determining
Cash from Operations pursuant to the Statement of Cash Flows, the effects of
changes primarily in accrued liabilities, receivables and other assets are
taken into account, but other items such as principal amortization of loans
are not included. Cash from operations pursuant to the Statement of Changes
in Financial Position includes the effect of loan amortization, but excludes
the effects of changes in accrued liabilities, receivables and other assets.
37
<PAGE> 39
(5) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations in
prior years that has not previously been distributed.
(6) Represents gain on restructuring of debt on the property leased to Anthony's
Manufacturing Company, Inc.
(7) Result from the sale of two properties leased to Autozone, Inc.
NOTES
(1) CPA(R):6 made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1997 -- $24.25 and April,
1997 -- $24.27.
38
<PAGE> 40
TABLE III (7 OF 11)
OPERATING RESULTS OF PRIOR PROGRAMS
Table III includes information showing the start-up and operational phase of
Prior Programs, the offerings of which have been closed since December 31, 1979.
This Table is designed to provide the investor with information on the financial
operations of such Prior Programs. The results shown in this Table are in all
cases for years ended December 31. THE INFORMATION PRESENTED IN THIS TABLE
SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PARTNERSHIPS. MORTGAGE FINANCING FOR THE CPA(R)
PARTNERSHIPS MAY HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR
INVESTMENT BY SUCH PARTNERSHIPS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY
ALTER CERTAIN OF THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CPA(R):7
---------------------
1986 1987
-------- ----------
<S> <C> <C>
Gross Revenues................................................................................... $ 90,399 $4,119,934
Profit (loss) on sale of properties.............................................................. N/A N/A
Gain on sale of securities....................................................................... N/A N/A
Extraordinary gain charge........................................................................
Write-down of property........................................................................... N/A N/A
Other............................................................................................ N/A N/A
Less:
Operating expenses.............................................................................. 46,413 326,846
Interest expense................................................................................ 22,911 1,389,385
Depreciation.................................................................................... 0 131,567
Net Income-GAAP Basis............................................................................ 21,075 2,272,136
Taxable Income (Loss):
-- from operations.............................................................................. (51,877) 1,203,013
-- from gain (loss) on sales.................................................................... 0 0
-- other........................................................................................ 0 0
Cash generated from operations................................................................... 1,550,648 1,115,274
Cash generated from sales........................................................................ 0 0
Cash generated from refinancing.................................................................. 0 0
Cash generated from other........................................................................ 0 0
Cash generated from operations, sales, refinancing and other..................................... 1,550,648 1,115,274
Less: Cash distribution to investors:
-- from operating cash flow(6).................................................................. 0 1,363,271
-- from sales and refinancing................................................................... 0 0
Cash generated (deficiency) after cash distributions............................................. 1,550,648 (247,997)
Less: Special items.............................................................................. 0 0
Cash generated (deficiency) after cash distributions and special items........................... 1,550,648 (247,997)
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).......................................................................... $ (4.29) $ 24.98
Other........................................................................................... 0 0
Capital gain.................................................................................... 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................................ 0 60.60
-- Return of capital............................................................................ 0 0
Source (on cash basis):
-- Sales........................................................................................ 0 0
-- Refinancing.................................................................................. 0 0
-- Operations................................................................................... 0 60.60
Amount (in percentage terms) remaining invested in program properties at the end of the last
year reported in the Table (original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program)................................. N/A N/A
<CAPTION>
1988 1989
---------- -----------
<S> <C> <C>
Gross Revenues................................................................................... $9,066,142 $14,071,843
Profit (loss) on sale of properties.............................................................. N/A N/A
Gain on sale of securities....................................................................... 1,766,185(3) 48,158(3)
Extraordinary gain charge........................................................................
Write-down of property........................................................................... N/A N/A
Other............................................................................................ N/A N/A
Less:
Operating expenses.............................................................................. 1,848,463 5,576,552
Interest expense................................................................................ 3,479,631 4,657,478
Depreciation.................................................................................... 1,009,247 1,422,116
Net Income-GAAP Basis............................................................................ 4,494,986 2,463,855
Taxable Income (Loss):
-- from operations.............................................................................. 1,585,180 1,195,514
-- from gain (loss) on sales.................................................................... 1,766,185(3) 48,158(3)
-- other........................................................................................ 0 0
Cash generated from operations................................................................... 4,136,538 3,745,289
Cash generated from sales........................................................................ 1,766,185(3) 48,158(3)
Cash generated from refinancing.................................................................. 0 0
Cash generated from other........................................................................ 0 0
Cash generated from operations, sales, refinancing and other..................................... 5,902,723 3,793,447
Less: Cash distribution to investors:
-- from operating cash flow(6).................................................................. 3,902,233 3,940,765
-- from sales and refinancing................................................................... 0 0
Cash generated (deficiency) after cash distributions............................................. 2,000,490 (147,318)
Less: Special items.............................................................................. 0 0
Cash generated (deficiency) after cash distributions and special items........................... 2,000,490 (147,318)
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).......................................................................... $ 32.91 $ 24.82
Other........................................................................................... 0 0
Capital gain.................................................................................... 36.67 1.00
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................................ 81.02 51.16
-- Return of capital............................................................................ 0 30.66
Source (on cash basis):
-- Sales........................................................................................ 0 0
-- Refinancing.................................................................................. 0 0
-- Operations................................................................................... 81.02 81.82
Amount (in percentage terms) remaining invested in program properties at the end of the last
year reported in the Table (original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program)................................. N/A 100%
<CAPTION>
1990 1991
----------- -----------
Gross Revenues................................................................................... $13,725,684 $13,648,275
Profit (loss) on sale of properties.............................................................. 58,172(1) 54,197(4)
Gain on sale of securities....................................................................... 69,544(3) N/A
Extraordinary gain charge........................................................................
Write-down of property........................................................................... (500,000)(2) N/A
Other............................................................................................ N/A N/A
Less:
Operating expenses.............................................................................. 6,194,008 6,170,575
Interest expense................................................................................ 4,718,573 4,471,097
Depreciation.................................................................................... 1,567,896 1,607,889
Net Income-GAAP Basis............................................................................ 872,923 1,452,911
Taxable Income (Loss):
-- from operations.............................................................................. 3,689 746,150
-- from gain (loss) on sales.................................................................... 127,716(1)(3) 54,197(4)
-- other........................................................................................ 0 0
Cash generated from operations................................................................... 3,153,131 3,303,198
Cash generated from sales........................................................................ 245,324 183,430(4)
Cash generated from refinancing.................................................................. 0 978,087
Cash generated from other........................................................................ 0 0
Cash generated from operations, sales, refinancing and other..................................... 3,398,455 4,464,715
Less: Cash distribution to investors:
-- from operating cash flow(6).................................................................. 3,992,781 3,303,198
-- from sales and refinancing................................................................... 0 503,673
Cash generated (deficiency) after cash distributions............................................. (594,326) 657,844
Less: Special items.............................................................................. 0 0
Cash generated (deficiency) after cash distributions and special items........................... (594,326) 657,844
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).......................................................................... $ .08 $ 15.49
Other........................................................................................... 0 0
Capital gain.................................................................................... 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................................ 18.12 30.17
-- Return of capital............................................................................ 64.78 53.03
Source (on cash basis):
-- Sales........................................................................................ 0 0
-- Refinancing.................................................................................. 0 10.46
-- Operations................................................................................... 82.90 72.74
Amount (in percentage terms) remaining invested in program properties at the end of the last
year reported in the Table (original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program)................................. 99.86% 99.70%
<CAPTION>
1992 1993
----------- -----------
Gross Revenues................................................................................... $14,502,032 $12,243,029
Profit (loss) on sale of properties.............................................................. N/A (552,383)
(8)
Gain on sale of securities....................................................................... N/A N/A
Extraordinary gain charge........................................................................ 879,433(12)
Write-down of property........................................................................... N/A (3,303,228) (9)
Other............................................................................................ (141,723)(5) 435,106 (3)
Less:
Operating expenses.............................................................................. 6,404,695 4,485,628
Interest expense................................................................................ 4,155,956 3,324,398
Depreciation.................................................................................... 1,616,335 1,647,397
Net Income-GAAP Basis............................................................................ 2,183,323 244,534
Taxable Income (Loss):
-- from operations.............................................................................. 1,534,247 11,218,042
-- from gain (loss) on sales.................................................................... 0 2,093,467
-- other........................................................................................ 51,875(5) 283,740
Cash generated from operations................................................................... 4,489,865 4,135,048
Cash generated from sales........................................................................ 0 283,740
Cash generated from refinancing.................................................................. 0 1,047,890
Cash generated from other........................................................................ 32,313(5) 3,578
Cash generated from operations, sales, refinancing and other..................................... 4,522,178 5,470,256
Less: Cash distribution to investors:
-- from operating cash flow(6).................................................................. 3,388,324(7) 2,948,590
-- from sales and refinancing................................................................... 0 0
Cash generated (deficiency) after cash distributions............................................. 1,133,854 2,521,666
Less: Special items.............................................................................. 0 0
Cash generated (deficiency) after cash distributions and special items........................... 1,133,854 2,521,666
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).......................................................................... $ 31.85 $ 232.91
Other........................................................................................... 1.08 5.89
Capital gain.................................................................................... 0 43.47
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................................ 45.33 5.08
-- Return of capital............................................................................ 20.86 56.14
Source (on cash basis):
-- Sales........................................................................................ 0 0
-- Refinancing.................................................................................. 0 0
-- Operations................................................................................... 66.19 61.22
Amount (in percentage terms) remaining invested in program properties at the end of the last
year reported in the Table (original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program)................................. 99.70% 97.86 %
<CAPTION>
1994 1995
----------- -----------
Gross Revenues................................................................................... $13,840,052 $12,196,252
Profit (loss) on sale of properties.............................................................. 7,814,474(10) 1,019,362(13
)
Gain on sale of securities....................................................................... N/A 1,323,858(13)
Extraordinary gain charge........................................................................ (511,503)
Write-down of property........................................................................... (641,731)(11) (319,685)
(14)
Other............................................................................................ 986,155 111,226 (1
5)
Less:
Operating expenses.............................................................................. 4,336,235 4,986,585
Interest expense................................................................................ 3,537,640 2,456,129
Depreciation.................................................................................... 1,619,726 1,361,952
Net Income-GAAP Basis............................................................................ 11,993,846 5,526,347
Taxable Income (Loss):
-- from operations.............................................................................. 2,452,425 3,451,813
-- from gain (loss) on sales.................................................................... 10,460,324 0
-- other........................................................................................ 682,500 0
Cash generated from operations................................................................... 5,347,231 5,089,776
Cash generated from sales........................................................................ 14,662,004 1,546,019 (
13)
Cash generated from refinancing.................................................................. 700,000
Cash generated from other........................................................................ 38,281 31,457(16)
Cash generated from operations, sales, refinancing and other..................................... 20,747,516 6,667,252
Less: Cash distribution to investors:
-- from operating cash flow(6).................................................................. 3,246,729 10,434,626
-- from sales and refinancing................................................................... 0 0
Cash generated (deficiency) after cash distributions............................................. 17,500,787 (3,767,490)
Less: Special items.............................................................................. 0
Cash generated (deficiency) after cash distributions and special items........................... 17,500,787 (3,767,490)
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).......................................................................... $ 50.92 71.77
Other........................................................................................... 14.17 0
Capital gain.................................................................................... 217.18 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................................ 67.41 114.82
-- Return of capital............................................................................ 0 101.98
Source (on cash basis):
-- Sales........................................................................................ 0
-- Refinancing.................................................................................. 0
-- Operations................................................................................... 67.41 216.80
Amount (in percentage terms) remaining invested in program properties at the end of the last
year reported in the Table (original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program)................................. 83.50% 73.82%
<CAPTION>
1996
-----------
Gross Revenues................................................................................... $12,731,328
Profit (loss) on sale of properties.............................................................. 74,729(17)
Gain on sale of securities....................................................................... N/A
Extraordinary gain charge........................................................................ --
Write-down of property........................................................................... --
Other............................................................................................ (128,879)(15)
Less:
Operating expenses.............................................................................. 5,181,249
Interest expense................................................................................ 1,942,737
Depreciation.................................................................................... 1,154,088
Net Income-GAAP Basis............................................................................ 4,399,104
Taxable Income (Loss):
-- from operations.............................................................................. 3,856,378
-- from gain (loss) on sales.................................................................... (188,980)
-- other........................................................................................ 0
Cash generated from operations................................................................... 5,499,073
Cash generated from sales........................................................................ 617,867(17)
Cash generated from refinancing.................................................................. --
Cash generated from other........................................................................ 27,761(16)
Cash generated from operations, sales, refinancing and other..................................... 6,144,701
Less: Cash distribution to investors:
-- from operating cash flow(6).................................................................. 3,483,017
-- from sales and refinancing................................................................... 0
Cash generated (deficiency) after cash distributions............................................. 2,661,684
Less: Special items.............................................................................. 0
Cash generated (deficiency) after cash distributions and special items........................... 2,661,684
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).......................................................................... $ 80.18
Other........................................................................................... 0
Capital gain.................................................................................... (4.14)
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................................................ 91.47
-- Return of capital............................................................................ 0
Source (on cash basis):
-- Sales........................................................................................ 0
-- Refinancing.................................................................................. 0
-- Operations................................................................................... 72.42
Amount (in percentage terms) remaining invested in program properties at the end of the last
year reported in the Table (original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program)................................. 73.16%
</TABLE>
39
<PAGE> 41
FOOTNOTES
(1) Results from the sale of approximately 10 acres of land which was a portion
of the property net leased to Emb-Tex Corporation.
(2) Represents write-down of 10 properties formerly net leased to Yellow Front
Stores, Inc.
(3) Represents the gain on the sale of securities of Mid-Continent Bottlers,
Inc. and income from equity investments.
(4) Results of the sale of .22 acres of land formerly part of a property located
in Scottsdale, Arizona. See Table V.
(5) Represents acquisition of hotel operations for property formerly leased to
Integra-A Hotel and Restaurant Company.
(6)To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations in
prior years that has not previously been distributed.
(7) Includes $200,364 of distributions paid to the Corporate General Partner
attributable to 1991.
(8) Results from sale of properties located in Travelers Rest, South Carolina
and Phoenix, Arizona.
(9) Represents write-down of the Jupiter and Plant City, Florida properties.
(10) Results from sale of properties leased to Mid-Continent, Bottlers, Inc.
(11) Represents write-down of properties located in Fredricksburg, Virginia and
Jefferson, Georgia.
(12) Represents an extraordinary gain upon extinguishment of the Yellow Front
Stores, Inc. loan.
(13) Result of sale of the Jupiter, Florida Property.
(14) Represents writedown of Monte Vista, Colorado property.
(15) Represents earnings from discontinued operations and loss from equity
investments.
(16) Represents cash distributed from equity investments.
(17) Result of sale of property in Denham Springs, Louisiana leased to AutoZone,
Inc. and a property in Monte Vista, Colorado formerly leased to Yellow
Front Stores, Inc.
NOTES
(1) CPA(R):7 made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1997 -- $18.28 and April,
1997 -- $18.30.
40
<PAGE> 42
TABLE III (8 OF 11)
OPERATING RESULTS OF PRIOR PROGRAMS
Table III includes information showing the start-up and operational phase of
Prior Programs, the offerings of which have been closed since December 31, 1979.
This Table is designed to provide the investor with information on the financial
operations of such Prior Programs. The results shown in this Table are in all
cases for years ended December 31. THE INFORMATION PRESENTED IN THIS TABLE
SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PROGRAMS. MORTGAGE FINANCING FOR THE CPA(R) PROGRAMS MAY
HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR INVESTMENT BY
SUCH PROGRAMS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY ALTER CERTAIN OF
THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CPA(R):8
-------------------------
1988 1989
---------- -----------
<S> <C> <C>
Gross Revenues.................................................................................. $2,877,969 $11,744,379
Profit on sale of properties.................................................................... N/A N/A
Other........................................................................................... N/A N/A
Extraordinary charge............................................................................ N/A N/A
Less:
Operating expenses............................................................................. 322,625 934,022
Interest expense............................................................................... 939,460 4,871,609
Depreciation................................................................................... 214,618 877,918
Minority Interest.............................................................................. N/A N/A
Net Income-GAAP Basis........................................................................... 1,401,266 5,060,830
Taxable Income (Loss):
-- from operations............................................................................. 1,043,085 3,268,042
-- from gain on sale...........................................................................
-- from other.................................................................................. 0 0
-- from extraordinary charge................................................................... 0 0
Cash generated from operations.................................................................. 1,697,043 5,752,461
Cash generated from sales....................................................................... 0 0
Cash generated from refinancing................................................................. 0 0
Cash generated from other....................................................................... 0 0
Cash generated from operations, sales, refinancing and other.................................... 1,697,043 5,752,461
Less: Cash distribution to investors:
-- from operating cash flow(4)................................................................. 728,786 5,575,793
-- from sales and refinancing.................................................................. 0 0
Cash generated (deficiency) after cash distributions............................................ 968,257 176,668
Less: Special items............................................................................. 0 0
Cash generated (deficiency) after cash distributions and special items.......................... 968,257 176,668
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)....................................................................... $ 16.97 $ 43.41
Other........................................................................................ 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income......................................................................... 20.91 67.23
-- Return of capital......................................................................... 0 6.84
Source (on cash basis):
-- Sales..................................................................................... 0 0
-- Refinancing............................................................................... 0 0
-- Operations................................................................................ 20.91 74.07
Amount (in percentage terms) remaining invested in program properties at the end of the last
year reported in the Table (original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program).................................. N/A N/A
<CAPTION>
1990 1991
----------- -----------
<S> <C><C>
Gross Revenues.................................................................................. $14,120,755 $14,396,115
Profit on sale of properties.................................................................... N/A 1,736(1)
Other........................................................................................... N/A N/A
Extraordinary charge............................................................................ N/A N/A
Less:
Operating expenses............................................................................. 912,831 1,214,634
Interest expense............................................................................... 6,917,234 7,095,848
Depreciation................................................................................... 1,204,389 1,490,532
Minority Interest.............................................................................. N/A N/A
Net Income-GAAP Basis........................................................................... 5,086,301 4,596,837
Taxable Income (Loss):
-- from operations............................................................................. 2,910,667 2,819,692
-- from gain on sale...........................................................................
-- from other.................................................................................. 0 1,736(1)
-- from extraordinary charge................................................................... 0 0
Cash generated from operations.................................................................. 6,303,966 6,285,116
Cash generated from sales....................................................................... 0 7,991(1)
Cash generated from refinancing................................................................. 0 0
Cash generated from other....................................................................... 0 0
Cash generated from operations, sales, refinancing and other.................................... 6,303,966 6,293,107
Less: Cash distribution to investors:
-- from operating cash flow(4)................................................................. 6,165,188 6,225,409
-- from sales and refinancing.................................................................. 0 0
Cash generated (deficiency) after cash distributions............................................ 138,778 67,698
Less: Special items............................................................................. 0 0
Cash generated (deficiency) after cash distributions and special items.......................... 138,778 67,698
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)....................................................................... $ 38.67 $ 37.46
Other........................................................................................ 0 0.02(1)
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income......................................................................... 67.57 61.07
-- Return of capital......................................................................... 14.33 21.63
Source (on cash basis):
-- Sales..................................................................................... 0 0
-- Refinancing............................................................................... 0 0
-- Operations................................................................................ 81.90 82.70
Amount (in percentage terms) remaining invested in program properties at the end of the last
year reported in the Table (original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program).................................. 100% 99.99%
<CAPTION>
1992 1993
----------- -----------
Gross Revenues.................................................................................. $15,176,928 $18,060,581
Profit on sale of properties.................................................................... N/A N/A
Other........................................................................................... (51,219)(2) 21,111
Extraordinary charge............................................................................ N/A N/A
Less:
Operating expenses............................................................................. 2,227,334 4,151,151
Interest expense............................................................................... 6,943,303 6,737,293
Depreciation................................................................................... 1,642,518 1,935,624
Minority Interest.............................................................................. N/A N/A
Net Income-GAAP Basis........................................................................... 4,312,554 5,257,624
Taxable Income (Loss):
-- from operations............................................................................. 3,009,471 5,060,536
-- from gain on sale...........................................................................
-- from other.................................................................................. (17,110)(2) 0
-- from extraordinary charge................................................................... 0 0
Cash generated from operations.................................................................. 6,321,159 8,376,844
Cash generated from sales....................................................................... 0 0
Cash generated from refinancing................................................................. 0 0
Cash generated from other....................................................................... 16,408(2) 253,858
Cash generated from operations, sales, refinancing and other.................................... 6,337,567 8,630,702
Less: Cash distribution to investors:
-- from operating cash flow(4)................................................................. 6,285,600 6,327,785
-- from sales and refinancing.................................................................. 0 0
Cash generated (deficiency) after cash distributions............................................ 51,697 2,302,917
Less: Special items............................................................................. 0 0
Cash generated (deficiency) after cash distributions and special items.......................... 51,697 2,302,917
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)....................................................................... $ 39.98 $ 67.23
Other........................................................................................ (0.23)(2) 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income......................................................................... 57.29 69.84
-- Return of capital......................................................................... 26.21 14.22
Source (on cash basis):
-- Sales..................................................................................... 0 0
-- Refinancing............................................................................... 0 0
-- Operations................................................................................ 83.50 84.06
Amount (in percentage terms) remaining invested in program properties at the end of the last
year reported in the Table (original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program).................................. 99.99% 99.99%
<CAPTION>
1994 1995
----------- -----------
Gross Revenues.................................................................................. $18,804,769 $19,886,284
Profit on sale of properties.................................................................... N/A N/A
Other........................................................................................... 83,736 (62,359)(4)
Extraordinary charge............................................................................ (120,000)(3) N/A
Less:
Operating expenses............................................................................. 4,445,083 3,774,470
Interest expense............................................................................... 6,266,275 5,799,127
Depreciation................................................................................... 1,997,946 1,912,503
Minority Interest.............................................................................. N/A N/A
Net Income-GAAP Basis........................................................................... 5,892,029 8,337,825
Taxable Income (Loss):
-- from operations............................................................................. 4,565,116 7,475,178
-- from gain on sale...........................................................................
-- from other.................................................................................. 0 0
-- from extraordinary charge................................................................... 0 0
Cash generated from operations.................................................................. 8,627,436 10,271,234
Cash generated from sales....................................................................... 0
Cash generated from refinancing................................................................. 0 0
Cash generated from other....................................................................... 289,805 282,992(4)
Cash generated from operations, sales, refinancing and other.................................... 8,917,241 10,554,226
Less: Cash distribution to investors:
-- from operating cash flow(4)................................................................. 6,357,899 6,413,927
-- from sales and refinancing.................................................................. 0 0
Cash generated (deficiency) after cash distributions............................................ 2,559,342 4,140,299
Less: Special items............................................................................. 0 0
Cash generated (deficiency) after cash distributions and special items.......................... 2,559,342 4,140,299
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)....................................................................... $ 60.64 $ 99.55
Other........................................................................................ 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income......................................................................... 78.27 85.34
-- Return of capital......................................................................... 6.19 0
Source (on cash basis):
-- Sales..................................................................................... 0 0
-- Refinancing............................................................................... 0 0
-- Operations................................................................................ 84.46 85.34
Amount (in percentage terms) remaining invested in program properties at the end of the last
year reported in the Table (original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program).................................. 97.69% 97.69%
<CAPTION>
1996
-----------
Gross Revenues.................................................................................. $16,207,400(5)
Profit on sale of properties.................................................................... 21,697(6)
Other........................................................................................... 1,239,400(4)
Extraordinary charge............................................................................ N/A
Less:
Operating expenses............................................................................. 1,242,655
Interest expense............................................................................... 5,232,928
Depreciation................................................................................... 1,539,737
Minority Interest.............................................................................. N/A
Net Income-GAAP Basis........................................................................... 9,453,177
Taxable Income (Loss):
-- from operations............................................................................. 7,792,097
-- from gain on sale........................................................................... 50,641
-- from other.................................................................................. 0
-- from extraordinary charge................................................................... 0
Cash generated from operations.................................................................. 10,947,671
Cash generated from sales....................................................................... 154,499
Cash generated from refinancing................................................................. 0
Cash generated from other....................................................................... 161,795(4)
Cash generated from operations, sales, refinancing and other.................................... 11,263,965
Less: Cash distribution to investors:
-- from operating cash flow(4)................................................................. 6,549,558
-- from sales and refinancing.................................................................. 0
Cash generated (deficiency) after cash distributions............................................ 4,714,407
Less: Special items............................................................................. 0
Cash generated (deficiency) after cash distributions and special items.......................... 4,714,407
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)....................................................................... $ 103.77
Other........................................................................................ 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income......................................................................... 87.22
-- Return of capital......................................................................... 0
Source (on cash basis):
-- Sales..................................................................................... 0
-- Refinancing............................................................................... 0
-- Operations................................................................................ 87.22
Amount (in percentage terms) remaining invested in program properties at the end of the last
year reported in the Table (original total acquisition cost of properties retained divided by
original total acquisition cost of all properties in program).................................. 97.25%
</TABLE>
41
<PAGE> 43
FOOTNOTES
(1) Results from the sale of a parcel of land which was a portion of the
property net leased to Furon Company.
(2) Represents acquisition of hotel operations for property formerly leased to
Integra-A Hotel and Restaurant Company.
(3) Results from the refinancing of property leased to Detroit Diesel
Corporation.
(4) Includes of equity income for 1993, 1994, 1995 and 1996 income (loss) and
hotel operating results for 1996.
(5) Results from the exchange of a hotel property in Kennes, Louisiana for an
investment in American General Hospitality Operating Partnership L.P.
(6) Results from the sale of two properties leased to Furon Company.
NOTES
(1) CPA(R):8 made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1997 -- $22.00 and April,
1997 -- $22.02.
42
<PAGE> 44
TABLE III (9 OF 11)
OPERATING RESULTS OF PRIOR PROGRAMS
Table III includes information showing the start-up and operational phase of
Prior Programs, the offerings of which have been closed since December 31, 1979.
This Table is designed to provide the investor with information on the financial
operations of such Prior Programs. The results shown in this Table are in all
cases for years ended December 31. THE INFORMATION PRESENTED IN THIS TABLE
SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PROGRAMS. MORTGAGE FINANCING FOR THE CPA(R) PROGRAMS MAY
HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR INVESTMENT BY
SUCH PROGRAMS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY ALTER CERTAIN OF
THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CPA(R):9
-----------------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Gross Revenues............................. $ 2,543,943 $10,284,029 $12,514,907 $12,280,669 $12,216,612 $11,612,360 $11,946,610
Profit on sale of properties............... N/A N/A 1,731(1) N/A N/A N/A N/A
Other...................................... N/A N/A N/A N/A 658,052 669,020 (535,337)(6)
Write-down of property.....................
Extraordinary charge....................... N/A N/A N/A N/A N/A (480,000 (4) N/A
Less:
Operating expenses........................ 432,917 808,315 887,820 1,308,664 963,533 949,925 998,762
Interest expense.......................... 1,122,585 5,063,322 6,631,202 6,425,597 6,347,577 5,726,296 5,525,604
Depreciation.............................. 29,901 1,141,461 1,697,599 1,697,599 1,697,599 1,697,599 1,697,599
Minority Interest......................... N/A N/A N/A N/A N/A N/A N/A
Net Income-GAAP Basis...................... 958,540 3,270,931 3,300,017 2,848,809 3,865,955 3,427,560 3,189,308
Taxable Income (Loss):
-- from operations........................ 710,320 2,624,917 2,816,278 2,612,003 3,316,011 3,030,197 3,805,214
-- from gain on sale......................
-- from other............................. 0 0 1,731(1) 0 0 0 0
-- from extraordinary charge.............. 0 0 0 0 0 0 0
Cash generated from operations............. 1,784,343 3,895,420 5,662,385 5,211,896 5,906,190 5,807,477 5,921,560
Cash generated from sales.................. 0 0 1,897 0 522,878 0 0
Cash generated from refinancing............ 0 0 0 0 0 0 0
Cash generated from other.................. 0 0 0 0 0 484,044 463,274(7)
Cash generated from operations, sales,
refinancing and other..................... 1,784,343 3,895,420 5,664,282 5,211,896 6,429,068 6,291,521 6,384,834
Less: Cash distribution to investors:
-- from operating cash flow(4)............ 551,330 4,802,863 5,476,956 5,526,795 5,562,850 5,589,709 5,616,322
-- from sales and refinancing............. 0 0 0 0 0 0 0
Cash generated (deficiency) after cash
distributions............................. 1,233,013 (907,443) 187,326 (314,899) 866,218 701,812 768,512
Less: Special items........................ 0 0 0 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items........... 1,233,013 (907,443) 187,326 (314,899) 866,218 701,812 768,512
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss).................. $ 12.64 $ 39.38 $ 42.30 $ 39.24 $ 49.81 $ 45.51 $ 57.16
Capital gain............................
Other................................... 0 0 0.03(1) 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.................... 20.12 49.07 49.57 42.79 58.07 51.48 47.90
-- Return of capital.................... 0 22.98 32.65 40.23 25.49 32.48 36.45
Source (on cash basis):
-- Sales................................ 0 0 0 0 0 0 0
-- Refinancing.......................... 0 0 0 0 0 0 0
-- Operations........................... 20.12 72.05 82.22 83.02 83.56 83.96 84.36
Amount (in percentage terms) remaining
invested in program properties at the end
of the last year reported in the Table
(original total acquisition cost of
properties retained divided by original
total acquisition cost of all properties
in program)............................... N/A N/A 99.99% 99.99% 99.99% 99.99% 99.99%
<CAPTION>
CPA(R):10
----------------------------------------------------------------------------------
1996 1990 1991 1992 1993 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C><C> <C>
Gross Revenues............................. $12,074,578 $ 1,783,676 $11,169,869 $15,889,968 $16,128,694 $16,386,307
Profit on sale of properties............... 45,066(11) N/A N/A N/A N/A 1,177,284(5)
Other...................................... 658,416(9) N/A N/A N/A 1,478,086 1,529,736
Write-down of property.....................
Extraordinary charge....................... N/A N/A (40,818 N/A N/A (253,902)
Less:
Operating expenses........................ 564,905 393,287 1,358,840 2,241,255 2,511,268 2,894,710
Interest expense.......................... 5,360,760 711,223 5,149,717 7,460,861 8,082,223 8,151,222
Depreciation.............................. 1,677,253 230,176 1,242,512 1,756,126 1,944,589 1,945,769
Minority Interest......................... N/A 72,594 492,191 570,880 587,472 599,839
Net Income-GAAP Basis...................... 5,175,142 376,396 2,885,791 3,860,846 4,481,228 5,247,885
Taxable Income (Loss):
-- from operations........................ 4,431,434 452,075 2,958,235 3,059,213 2,697,330 2,618,952
-- from gain on sale...................... 106,024
-- from other............................. 0 0 0 0 0 823,905
-- from extraordinary charge.............. 0 0 (40,818 (2) 0 0 0
Cash generated from operations............. 6,162,302 496,208 4,881,135 6,071,495 6,284,822 6,311,466
Cash generated from sales.................. 324,126(11) 0 0 0 0 0
Cash generated from refinancing............ 0 0 0 0 0 0
Cash generated from other.................. 388,329(7) 0 0 0 0 0
Cash generated from operations, sales,
refinancing and other..................... 6,874,757 496,208 4,881,135 6,071,495 6,284,822 6,311,466
Less: Cash distribution to investors:
-- from operating cash flow(4)............ 5,643,736 0 4,266,821 5,860,479 5,916,386 5,950,669
-- from sales and refinancing............. 0 0 0 0 0 0
Cash generated (deficiency) after cash
distributions............................. 1,231,021 496,208 614,314 211,016 368,436 360,797
Less: Special items........................ 0 0 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items........... 1,231,021 496,208 614,314 211,016 368,436 360,797
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss).................. $ 66.56 $ 9.38 $ 40.42 $ 42.39 $ 37.37 $ 36.29
Capital gain............................ 0
Other................................... 0 0 0.00 0 0 11.42
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.................... 77.73 0 45.13 53.49 62.09 72.71
-- Return of capital.................... 7.04 0 21.60 27.71 19.88 9.74
Source (on cash basis):
-- Sales................................ 0 0 0 0 0 0
-- Refinancing.......................... 00 0 0 0 0
-- Operations........................... 84.77 0 66.73 81.20 81.98 82.45
Amount (in percentage terms) remaining
invested in program properties at the end
of the last year reported in the Table
(original total acquisition cost of
properties retained divided by original
total acquisition cost of all properties
in program)............................... 92.90% N/A N/A N/A 100% 93.93
%
<CAPTION>
1995 1996
----------- -----------
Gross Revenues............................. $16,131,750 $15,505,748
Profit on sale of properties............... N/A 1,051,823(13)
Other...................................... 1,595,406(9) 1,718,797(9)
Write-down of property..................... (7,519,431)(8) (1,753,139)(12)
Extraordinary charge.......................
Less:
Operating expenses........................ 2,887,021 3,030,780
Interest expense.......................... 8,310,440 7,911,209
Depreciation.............................. 1,967,631 2,007,557
Minority Interest......................... (1,881,218) 583,283
Net Income-GAAP Basis...................... (1,076,149) 2,990,400
Taxable Income (Loss):
-- from operations........................ 3,778,032 3,529,835
-- from gain on sale...................... 129,811
-- from other............................. 0
-- from extraordinary charge.............. 0 0
Cash generated from operations............. 6,263,624 6,656,840
Cash generated from sales.................. 5,122,501(10) 7,781,582(13)
Cash generated from refinancing............ 0 0
Cash generated from other.................. 0 0
Cash generated from operations, sales,
refinancing and other..................... 11,386,125 14,438,422
Less: Cash distribution to investors:
-- from operating cash flow(4)............ 5,975,481 5,981,514
-- from sales and refinancing............. 0 0
Cash generated (deficiency) after cash
distributions............................. 5,410,644 8,456,908
Less: Special items........................ 0 0
Cash generated (deficiency) after cash
distributions and special items........... 5,410,644 8,456,908
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss).................. $ 52.35 $ 48.98
Capital gain............................ 1.80
Other................................... 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.................... (14.93) 41.50
-- Return of capital.................... 97.81 41.50
Source (on cash basis):
-- Sales................................ 0 0
-- Refinancing.......................... 0 0
-- Operations........................... 82.88 83.00
Amount (in percentage terms) remaining
invested in program properties at the end
of the last year reported in the Table
(original total acquisition cost of
properties retained divided by original
total acquisition cost of all properties
in program)............................... 93.93% 82.27%
</TABLE>
43
<PAGE> 45
FOOTNOTES
(1) Results from the sale of a parcel of land which was a portion of the
property net leased to Furon Company.
(2) Represents loan prepayment charge resulting from refinancing of loan
secured by property located in Denton, Texas leased to K mart Corporation.
(3) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations
in prior years that has not previously been distributed.
(4) Results from the refinancing of property leased to Detroit Diesel
Corporation.
(5) Results from sale of properties leased to Data Documents Inc. and the Pace
Membership Warehouse, Inc.
(6) Represents write-off of investment in Limited Partnership and income from
Equity investments.
(7) Represents cash distributions from Equity investments in excess of income.
(8) Represents write-down of the Stamford, Connecticut property.
(9) Results of Equity investments for 1993, 1994, 1995 and 1996.
(10) Results of sale of Data Documents property.
(11) Results from the sale of two properties leased to Furon Company.
(12) Represents write-down of the Harvest Foods, Inc. properties.
(13) Results from the sale of properties leased to Safeway Stores Incorporated,
Empire of America Realty Credit Corp. and Best Buy Co., Inc.
NOTES
(1) CPA(R):9 made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1997 -- $21.24 and April,
1997 -- $21.24.
(2) CPA(R):10 made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1997 -- $20.75 and April,
1997 -- $17.55.
44
<PAGE> 46
TABLE III (10 OF 11)
OPERATING RESULTS OF PRIOR PROGRAMS
Table III includes information showing the start-up and operational phase of
Prior Programs, the offerings of which have been closed since December 31, 1979.
This Table is designed to provide the investor with information on the financial
operations of such Prior Programs. The results shown in this Table are in all
cases for years ended December 31. THE INFORMATION PRESENTED IN THIS TABLE
SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PROGRAMS. MORTGAGE FINANCING FOR THE CPA(R) PROGRAMS MAY
HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR INVESTMENT BY
SUCH PROGRAMS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY ALTER CERTAIN OF
THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CIP(TM)
-----------------------------------------------------------------------------------
1991 1992 1993 1994 1995 1996
--------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Gross Revenues.............................. $ 92,097 $5,306,275 $17,637,235 $25,958,329 $29,238,322 $32,546,638
Profit (loss) on sale of properties......... NA 1,535,763(2) 0 (7,630)(6)
Other....................................... 1,478,086 1,613,451 2,800,337(4) 3,633,869(4)(7)
Extraordinary charge........................ NA NA (401,269)(3) (275,000)(3)
Write-down of property...................... (1,753,455)
Less:
Operating expenses........................ 207,640 1,638,870 3,456,274 4,490,683 5,654,751 6,022,323
Interest expense.......................... 22,790 1,338,083 6,652,011 11,027,689 13,512,254 14,241,203
Depreciation.............................. 9,799 312,609 1,018,886 1,514,114 2,493,366 2,968,173
Minority Interest......................... 0 459,583 748,841 766,582
Net Income (Loss)-GAAP Basis................ (148,132) 2,016,713 7,990,823 11,615,474 9,228,178 10,146,141
Taxable Income (Loss):
-- from operations........................ (148,132) 1,880,687 6,450,406 7,806,855 9,638,818 10,048,321
-- from other............................. 0 0 0 656,796
-- from extraordinary charge.............. 0 0 0 0
Cash generated from operations.............. 73,399 2,913,159 0 12,086,809 13,008,549 15,346,178
Cash generated from sales................... 0 12,008,853 5,927,217(5) 2,044,260(6)
Cash generated from refinancing............. 0 160,000 --
Cash generated from other................... 0 0 2,003,099(4) 835,243(7)
Cash generated from operations, sales,
refinancing and other..................... 73,399 0 10,717,806 24,255,662 20,938,865 18,225,681
Less: Cash distribution to investors:
-- from operating cash flow(1)............ 2,915,819 8,122,156 11,358,858 11,452,669 12,488,221
-- from sales and refinancing............. 0 0 0 0
Cash generated (deficiency) after cash
distributions............................. 73,399 (2,660) 2,595,650 12,896,804 9,486,196 5,737,460
Less: Special items......................... 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items........... 73,399 (2,660) 2,595,650 12,896,804 9,486,196 5,737,460
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).................... $ (84.90) 29.24 $ 52.14 $ 55.10 $ 68.09 $ 63.43
Capital Gain.............................. 4.15
Other..................................... 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income...................... 31.35 64.59 80.17 65.19 64.05
-- Return of capital...................... 13.98 1.06 0 15.71 14.79
Source (on cash basis):
-- Sales.................................. 0 0 0 0
-- Refinancing............................ 0 0 0 0
-- Operations............................. 45.33 65.65 80.17 80.90 78.84
Amount (in percentage terms) remaining
invested in program properties at the end
of the last year reported in the Table
(original total acquisition cost of
properties retained divided by original
total acquisition cost of all properties
in program)............................... N/A N/A N/A N/A N/A N/A
</TABLE>
45
<PAGE> 47
FOOTNOTES
(1) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations in
prior years that has not previously been distributed.
(2) Results from sale of property leased to Data Documents, Inc.
(3) Result of refinancing mortgage loans on property leased to TBWA Chait/Day.
(4) Results of Equity Investments for 1993, 1994, 1995 and 1996 income (loss)
and cash distributed.
(5) Results of Sale of Data Documents property.
(6) Loss on sale of properties based to Safeway Stores, Incorporated.
(7) Gain on sale of 22,500 Garden Ridge Corporation common stock warrants.
NOTES
(1) CIP(TM) made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1996 -- $20.52; and April, 1997 --
$20.54.
46
<PAGE> 48
TABLE III (11 OF 11)
OPERATING RESULTS OF PRIOR PROGRAMS
<TABLE>
<CAPTION>
CPA12
-----------------------------------------------------
1993 1994 1995 1996
-------- -------- --------- ----------
<S> <C> <C> <C> <C>
Gross Revenues....................................................... $ 2,558 $465,327 $3,993,647 $11,433,627
Profit on sale of properties......................................... --
Extraordinary charges on extinguishment of debt...................... --
Other................................................................ 554,571 1,322,990(1) 2,042,400(1)
Write-down of property............................................... --
Less:
Operating expenses................................................. 5,211 900,393 1,551,098 2,792,846
Interest expense................................................... 147,256 1,260,189 3,525,774
Depreciation....................................................... 390,307 947,206
Net Income-GAAP Basis................................................ (2,653) (27,751) 2,115,043 6,210,201
Taxable Income (Loss):
-- from operations................................................. (2,653) 390,164 2,375,613 5,670,787
-- from gain on sale............................................... --
-- from extraordinary charge....................................... --
Cash generated from operations(3).................................... 2,807 591,308 3,661,087 7,747,104
Cash generated from sales............................................ 1,375,000(1) --
Cash generated from refinancing......................................
Cash generated from other............................................
Cash generated from operations, sales, refinancing and other......... 2,807 591,308 5,036,087 7,747,104
Less: Cash distribution to investors:
-- from operating cash flow(4)..................................... 2,350,687 6,779,669
-- from sales and refinancing...................................... --
-- other........................................................... --
Cash generated (deficiency) after cash distributions................. 2,807 591,308 2,685,400 967,435
Less: Special items.................................................. --
Cash generated (deficiency) after cash distributions and special
items.............................................................. 2,807 591,308 2,685,400 967,435
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income.................................................. (.13) 14.36 59.14 54.71
Capital gain.....................................................
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............................................. $52.66 $59.91
-- Return of capital............................................. 5.87 5.49
Source (on cash basis):
-- Sales.........................................................
-- Refinancing...................................................
-- Other.........................................................
-- Operations.................................................... 58.53 65.40
Amount (in percentage terms) remaining invested in program properties
at the end of the last year reported in the Table (original total
acquisition cost of properties retained divided by original total
acquisition cost of all properties in program)..................... N/A N/A N/A N/A
</TABLE>
FOOTNOTE
(1) Results of Equity Investments income (loss) and cash distributed.
NOTE
(1) CPA(R) made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1997 -- $20.15 and April,
1997 -- $20.17.
47
<PAGE> 49
TABLE V
SALES OR DISPOSITIONS OF PROPERTIES AS OF DECEMBER 31, 1996
Table V provides information on the sales and dispositions of property held
by Prior Programs since January 1, 1993. THE INFORMATION IN THIS TABLE SHOULD
NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE PERFORMANCE OF THE COMPANY.
PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY OWNERSHIP
IN THE CPA(R). PARTNERSHIPS.
<TABLE>
<CAPTION>
SELLING PRICE NET OF
CLOSING COSTS AND GAAP
ADJUSTMENTS
--------------------------
CASH
RECEIVED MORTGAGE
NET OF BALANCE
DATE DATE OF CLOSING AT TIME
PROPERTY ACQUIRED SALE COSTS OF SALE
- -------------------------------------------------------------------------------- -------- -------- ------------ -----------
<S> <C> <C> <C> <C>
Heekin Can Inc.(2).............................................................. 11/30/82 4/27/93 $ 16,969,719 $11,927,709
Swiss M-Tex, L.P.(3)............................................................ 8/26/87 8/13/93 166,600 0
Phoenix, Arizona(4)............................................................. 1/29/88 12/2/93 881,290 0
G.D. Searle and Co.(5).......................................................... 5/15/80 1/4/94 124,615 0
Plant City, Florida(6).......................................................... 3/31/89 4/15/94 1,200,000 0
Jefferson, Georgia(7)........................................................... 3/31/89 8/5/94 844,778 0
Mid Continental Bottlers, Inc.(8)............................................... 12/31/86 10/14/94 13,904,680 3,895,320
Pace Membership Warehouse, Inc.(9).............................................. 8/12/86 11/10/94 3,639,563 3,290,437
Pace Membership Warehouse, Inc.(10)............................................. 12/23/92 11/10/94 3,466,100 3,500,000
Data Documents, Inc.(11)........................................................ 3/18/93 11/28/94 7,710,740 7,721,000
Industrial General Corporation(12).............................................. 8/30/85 12/30/94 4,062 645,938
Industrial General Corporation(16).............................................. 8/30/85 9/14/95 466,961 2,920,401
Liberty Fabrics of New York(17)................................................. 1/3/84 12/3/95 5,509,000 3,850,000
Genesco, Inc.(18)............................................................... 6/2/83 6/30/95 9,477,492 5,722,508
Jupiter, Florida(19)............................................................ 12/11/86 12/20/95 1,546,020 2,602,883
Leslie Fay Company(20).......................................................... 4/30/82 1/10/96 14,053,816 0
Helena, Montana(21)............................................................. 5/1/85 1/19/96 1,741,261 2,866,324
Autozone, Inc.(22).............................................................. 5/2/86 1/26/96 0 627,106
Safeway Stores, Inc.(23)........................................................ 12/19/91 1/26/96 4,649,270 0
& 2/15/96
Autozone, Inc.(24).............................................................. 8/24/87 2/12/96 431,779 0
Monte Vista, Colorado(25)....................................................... 1/29/88 2/14/96 186,090 0
Empire of America Credit Corp.(26).............................................. 6/28/91 3/15/96 3,583,013 4,442,872
GATX Logistics, Inc.(27)........................................................ 6/7/86 4/9/96 9,428,270 3,208,526
Best Buy Co. Inc.(28)........................................................... 10/16/92 5/16/96 1,593,559 1,509,371
Furon Company(29)............................................................... 1/29/90 9/9/96 478,626 892,180
Rapid City, South Dakota(30) 4/24/85 10/1/96 (290,728) 4,505,000
Kobacker Stores, Inc.(31)....................................................... 1/17/79 10/17/96 216,451 139,507
------------ -----------
$101,983,027 $64,267,082
============== =============
<CAPTION>
PURCHASE
MONEY ADJUSTMENTS
MORTGAGE RESULTING TOTAL
TAKEN FROM PROCEEDS
BACK BY APPLICATION RECEIVED
PROPERTY PROGRAM OF GAAP FROM SALE
- -------------------------------------------------------------------------------- -------- ----------- ------------
<S> <C>
Heekin Can Inc.(2).............................................................. 0 None $ 28,897,428
Swiss M-Tex, L.P.(3)............................................................ 0 None 166,600
Phoenix, Arizona(4)............................................................. 0 None 881,290
G.D. Searle and Co.(5).......................................................... 0 None 124,615
Plant City, Florida(6).......................................................... 0 None 1,200,000
Jefferson, Georgia(7)........................................................... 0 None 844,778
Mid Continental Bottlers, Inc.(8)............................................... 0 None 17,800,000
Pace Membership Warehouse, Inc.(9).............................................. 0 None 6,930,000
Pace Membership Warehouse, Inc.(10)............................................. 0 None 6,966,100
Data Documents, Inc.(11)........................................................ 0 None 15,431,740
Industrial General Corporation(12).............................................. 0 None 650,000
Industrial General Corporation(16).............................................. 0 None 3,387,362
Liberty Fabrics of New York(17)................................................. 0 None 9,359,000
Genesco, Inc.(18)............................................................... 0 None 15,200,000
Jupiter, Florida(19)............................................................ 0 None 4,148,903
Leslie Fay Company(20).......................................................... 0 None 14,053,816
Helena, Montana(21)............................................................. 0 None 4,607,585
Autozone, Inc.(22).............................................................. 0 None 627,106
Safeway Stores, Inc.(23)........................................................ 0 None 4,649,270
Autozone, Inc.(24).............................................................. 0 None 431,779
Monte Vista, Colorado(25)....................................................... 0 None 186,090
Empire of America Credit Corp.(26).............................................. 0 None 8,025,885
GATX Logistics, Inc.(27)........................................................ 0 None 12,636,796
Best Buy Co. Inc.(28)........................................................... 0 None 3,102,930
Furon Company(29)............................................................... 0 None 1,370,806
Rapid City, South Dakota(30) 0 None 4,214,272
Kobacker Stores, Inc.(31)....................................................... 0 None 355,958
------------
0 -- $166,250,109
==============
<CAPTION>
COST OF PROPERTIES INCLUDING CLOSING
AND SOFT COSTS(15)
----------------------------------------
TOTAL
ACQUISITION
COST,
CAPITAL
ORIGINAL ORIGINAL IMPROVEMENT,
EQUITY MORTGAGE CLOSING AND
PROPERTY INVESTMENT FINANCING SOFT COSTS
- -------------------------------------------------------------------------------- ----------- ----------- ------------
Heekin Can Inc.(2).............................................................. $ 0 $21,000,000 $ 21,000,000
Swiss M-Tex, L.P.(3)............................................................ 10,114 0 10,114
Phoenix, Arizona(4)............................................................. 768,377 960,826 1,729,203
G.D. Searle and Co.(5).......................................................... 218,038 0 218,038
Plant City, Florida(6).......................................................... 934,075 1,370,064 2,304,139
Jefferson, Georgia(7)........................................................... 893,466 1,310,496 2,203,962
Mid Continental Bottlers, Inc.(8)............................................... 4,945,126 5,040,000 9,985,126
Pace Membership Warehouse, Inc.(9).............................................. 2,433,500 3,400,000 5,833,500
Pace Membership Warehouse, Inc.(10)............................................. 3,149,314 3,500,000 6,649,314
Data Documents, Inc.(11)........................................................ 5,455,634 8,000,000 13,455,634
Industrial General Corporation(12).............................................. 759,902 777,352 1,537,254
Industrial General Corporation(16).............................................. 3,055,324 3,124,940 6,180,264
Liberty Fabrics of New York(17)................................................. 2,500,000 4,500,000 7,000,000
Genesco, Inc.(18)............................................................... 5,102,128 6,600,000 11,702,128
Jupiter, Florida(19)............................................................ 2,766,322 4,000,000 7,855,572
Leslie Fay Company(20).......................................................... 4,000,000 5,400,000 9,400,000
Helena, Montana(21)............................................................. 4,012,908 2,937,500 6,950,408
Autozone, Inc.(22).............................................................. 242,508 280,136 522,644
Safeway Stores, Inc.(23)........................................................ 5,541,790 0 5,541,790
Autozone, Inc.(24).............................................................. 357,050 0 357,050
Monte Vista, Colorado(25)....................................................... 259,422 358,869 618,291
Empire of America Credit Corp.(26).............................................. 2,830,000 4,500,000 7,463,792
GATX Logistics, Inc.(27)........................................................ 8,780,378 3,500,000 12,280,378
Best Buy Co. Inc.(28)........................................................... 835,000 1,600,000 2,538,839
Furon Company(29)............................................................... 618,777 932,240 1,551,017
Rapid City, South Dakota(30) 3,100,000 6,800,000 10,515,701
Kobacker Stores, Inc.(31)....................................................... 166,882 211,949 378,831
----------- ----------- ------------
$63,736,035 $90,104,372 $155,782,989
============= ============= ==============
<CAPTION>
EXCESS
(DEFICIENCY)
OF OPERATING
RECEIPTS OVER
CASH
PROPERTY EXPENDITURES(13)
- -------------------------------------------------------------------------------- ----------------
Heekin Can Inc.(2).............................................................. $ 13,385,278
Swiss M-Tex, L.P.(3)............................................................ --(14)
Phoenix, Arizona(4)............................................................. 59,750
G.D. Searle and Co.(5).......................................................... 249,998
Plant City, Florida(6).......................................................... 964,989
Jefferson, Georgia(7)........................................................... 855,611
Mid Continental Bottlers, Inc.(8)............................................... 10,004,008
Pace Membership Warehouse, Inc.(9).............................................. 2,485,104
Pace Membership Warehouse, Inc.(10)............................................. 439,632
Data Documents, Inc.(11)........................................................ 941,446
Industrial General Corporation(12).............................................. 1,143,549
Industrial General Corporation(16).............................................. 4,596,363
Liberty Fabrics of New York(17)................................................. 6,139,226
Genesco, Inc.(18)............................................................... 12,865,450
Jupiter, Florida(19)............................................................ 1,207,991
Leslie Fay Company(20).......................................................... 17,810,804
Helena, Montana(21)............................................................. 4,923,483
Autozone, Inc.(22).............................................................. 254,234
Safeway Stores, Inc.(23)........................................................ 1,852,277
Autozone, Inc.(24).............................................................. 303,583
Monte Vista, Colorado(25)....................................................... 96,429
Empire of America Credit Corp.(26).............................................. 1,571,108
GATX Logistics, Inc.(27)........................................................ 16,661,862
Best Buy Co. Inc.(28)........................................................... 520,071
Furon Company(29)............................................................... 416,119
Rapid City, South Dakota(30) 3,470,494
Kobacker Stores, Inc.(31)....................................................... 209,139
-------
$103,427,998
==================
</TABLE>
FOOTNOTES
(1) Not used.
(2) On November 30, 1982, CPA(R):2 purchased three improved properties and net
leased them to Heekin Can, Inc., ("Heekin"). On April 27, 1993, the
properties were sold back to Heekin pursuant to a purchase option granted
to Heekin at the time of purchase. The properties were sold for
$29,377,679, representing a gain of $8,377,679 over the $21,000,000 cost
basis.
(3) On August 26, 1987, CPA(R):7 purchased 40.2 acres and net leased the land
to Emb-Tex Corporation and subsequently leased the land to Swiss M-Tex,
L.P. On August 13, 1993, an approximately .86 acre parcel of land was sold
for $166,600 net of closing costs representing a gain of $156,486 over the
$10,114 cost basis.
(4) On January 29, 1988, CPA(R):7 purchased 10 improved properties and net
leased them to Yellow Front Stores, Inc. On December 23, 1993, the Phoenix,
Arizona property was sold for $881,290, net of closing costs representing a
loss of $847,913 over the $1,729,203 cost basis of the property.
(5) On May 15, 1980, CPA(R):2 purchased an improved property and net leased it
to G.D. Searle and Co. On January 4, 1994 the property was sold for
$124,615, net of closing costs representing a loss of $93,423 over the
$218,038 cost basis of the property.
(6) On March 31, 1989 CPA(R):7 and CPA(R):8 purchased six improved properties
and net leased them to NV Ryan L.P. with 37.037% and 62.963%, respectively.
On April 15, 1994 the Plant City, Florida property was sold for $1,200,000
representing a loss of $1,104,139 over the $2,304,139 cost basis of the
property.
(7) On August 5, 1994 the Jefferson, Georgia property which was formerly leased
to NV Ryan L.P. by CPA(R):7 and CPA(R):8 was sold for $844,778, net of
closing costs representing a loss of $1,359,184 over the $2,203,962 cost
basis of the property.
(8) On December 31, 1986, CPA(R):7 purchased eight improved properties and net
leased them to Mid-Continent Bottlers, Inc. and subsequently transferred
the interest in one property to another tenant. On October 14, 1994, the
remaining seven properties were sold for $17,800,000 representing a gain of
$7,814,874 over the $9,985,126 cost basis of the property.
(9) On August 12, 1986, CPA(R):5 purchased an improved property which was
subsequently leased to Pace Membership Warehouse, Inc. On November 10,
1994, the property was sold for $6,930,000 net of closing costs
representing a gain of $1,096,500 over the $5,833,500 cost basis of the
property.
(10) On December 23, 1992, CPA(R)10 purchased an improved property and net
leased it to Pace Membership Warehouse, Inc. On November 10, 1994, the
property was sold for $6,966,100 net of closing costs, representing a gain
of $316,786 over the $6,649,314 cost basis of the property.
(11) On March 18, 1993 CPA(R):10 and CIP(]) purchased five improved properties
and net leased them to Data Documents, Inc. with 22.22% and 77.78%
interests, respectively. On November 28, 1994, the properties were sold for
$15,431,740 net of closing costs representing a gain of $1,976,706 over the
$13,455,034 cost basis of the property.
(12) On August 30, 1985, CPA(R):5 purchased seven improved properties and net
leased them to Industrial General Corporation. On December 30, 1994, the
Forrest City, Arkansas property was sold for $650,000 net of closing costs,
representing a loss of $887,254 over the $1,537,254 cost basis of the
property.
(13) Operating receipts include rental income from the properties as well as
certain receipts from the settlement of bankruptcy claims, where
applicable. The net excess (deficiency) presented is for the entire period
the property was owned by the applicable Partnership. No amounts are
presented for partial land sales since such amounts are negligible.
(14) The property sold represented only a portion of the property owned by the
partnership and no receipts or expenses have been separately allocated.
(15) The term "soft costs" refers to miscellaneous closing costs such as
accounting fees, legal fees, title insurance costs and survey costs.
(16) On August 30, 1985, CPA(R):5 purchased seven properties and net leased them
to Industrial General Corporation. On September 14, 1995, the Bald Knob,
Belville and Newbury port properties were sold for $3,387,362 net of
closing cost, representing a loss of $2,792,902 over the $6,180,264 cost
basis of the property.
48
<PAGE> 50
(17) On January 3, 1984, CPA(R):5 purchased properties in Gardensville, Virginia
and in North Bergen, New Jersey and leased them to Liberty Fabrics. On
December 31, 1995, CPA recognized a gain on sale of $2,359,000 in
connection with the sale.
(18) On June 2, 1983 CPA(R):4 purchased a property in Allentown, Pennsylvania
and leased it to Genesco, Inc. On June 30, 1995 the property was sold for
$15,200,000 net of closing costs representing a gain of $3,497,872 over the
$11,702,128 costs basis of the property.
(19) On December 11, 1986 CPA(R):7 purchased a food service facility. On
December 20, 1995 the facility and operations were sold for $4,148,903
representing a loss of $3,706,669 over the $7,855,572 cost basis of the
property.
(20) On April 30, 1993, CPA(R):3 purchased a warehouse property in Wilkes-Barre,
Pennsylvania and leased it to the Leslie Fay Company. On January 10, 1996
CPA(R):3 sold the property recognizing a gain of $4,653,816 over the cost
basis of the property. Cash received net of closing cost of $14,303,816,
included two lump sum payments of $7,200,000 and $5,000,000 from Leslie Fay
in connection with settlement agreement regarding a purchase option which
did not ultimately result in the sale of the property to Leslie Fay. A
third purchased the property for $1,853,816, net of selling costs.
(21) On May 1, 1985, CPA(R):5 purchased an office building in Helena, Montana
and was assigned an existing net lease with IBM Corporation which
subsequently reduced its occupancy from 100% to 40% leasable space.
CPA(R):5 subsequently leased the remaining space to various other tenants.
On January 19, 1996 CPA(R):5 recognized a loss of $2,342,023 over cost
basis of the property.
(22) On May 2, 1986 CPA(R):6 purchased property in Dalton, Georgia and
Birmingham, Alabama and leased them to Autozone, Inc. On January 26, 1996
and April 26, 1996 the properties were sold for $627,106 net of selling
cost. CPA(R):6 recognized gains on sales over the cost basis of the
properties of $104,462 in connection with sales.
(23) On December 19, 1991, CPA(R):10 and CIP purchased three supermarkets
subject to existing net leases with Safeway Stores, Inc. as
tenants-in-common, each with 50% ownership interests. On January 26, 1996
and February 15, 1996 CPA(R):10 and CIP sold the Glendale, Arizona and
Escondido, California properties, respectively. CPA(R):10 and CIP
recognized a net loss on both sales of $892,250 over the cost basis of the
properties.
(24) On August 28, 1987, CPA(R):7 purchased seven improved properties and net
leased them to Autozone, Inc. On February 12, 1996 the Denham Spring,
Louisiana property and was sold for $431,779 representing a gain of $74,729
over the $357,050 cost basis of the property.
(25) On January 29, 1988 CPA(R):7 purchased 10 improved properties and net
leased them to Yellow Front Stores, Inc. The Yellow Front lease was
ultimately terminated and the property was released. On February 14, 1996
the Monte Vista, Colorado property was sold for $186,090, net of closings
costs representing a loss of $432,201 over the $618,291 cost basis of the
property.
(26) On June 28, 1991, CPA(R):10 purchased an office building occupied by Empire
of America Realty Credit Corp. ("Empire") for $7,330,000 of which
$4,500,000 was financed by a mortgage loan. On March 15, 1996, CPA(R):10
accepted Empire's purchase offer of $8,500,000 and recognized a net gain on
sale of $562,093 over the original cost of the property.
(27) On June 7, 1985, CPA(R):5 purchased a warehouse property in Hodgkins,
Illinois which was net leased to General Motors Corporation. In November
1993, the General Motors Corporation lease terminated and CPA(R):5 entered
into a new lease with GATX Logistics, Inc. On April 4, 1996, CPA(R):5
recognized a gain on sale of $356,418 over the cost basis of the property.
(28) On October 16, 1992, CPA(R):10 purchased land and a retail store for
$2,435,000 subject to an existing net lease with Sports Town, Inc. Best Buy
Co., Inc. subsequently assumed the lease. CPA(R):10 obtained a $1,600,000
mortgage loan for this property in September 1993. On May 16, 1996,
CPA(R):10 sold the retail store for $3,250,000 and recognized a gain of
$564,091 over the original cost basis of the property.
(29) On January 29, 1990 CPA(R):8 and CPA(R):9 purchased nine properties as
tenants-in-common and leased them to the Furon Company. On September 9,
1996, two properties were sold in Liverpool, Pennsylvania and the other in
Twinsburg, Ohio, CPA 8 and 9 recognized a loss of $189,211 over the cost
basis of the two properties.
(30) On April 24, 1985, CPA(R):5 purchased a hotel in Rapid City, South Dakota
which it operated as a Holiday Inn. On October 1, 1996, the hotel property
and its operations were sold for $4,105,000. CPA(R):5 recognized a loss of
$6,301,429 over the cost basis of the property. The mortgage balance at the
time of sale of $6,800,000 is presented net of sinking fund reserves of
$2,295,000 which were applied as principal payments at the time of sale.
The net cash received on sale was $290,728 less than the amount necessary
to pay the remaining mortgage principal balance.
(31) On January 17, 1979, CPA(R):1 purchased fifteen properties located in
California, Ohio and Indiana and net leased these properties to Kobacker
Stores, Inc. On October 17, 1996, Kobacker exercised options under the
terms of its leases for properties in Eastlake and Cleveland, Ohio to
purchase such properties for stated purchase prices of $165,000 and
$200,000, respectively, resulting in a loss of $22,873 over the cost basis
of the properties.
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