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As filed with the Securities and Exchange Commission on April 1, 1997
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) March 12, 1997
VORNADO REALTY TRUST
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(Exact Name of Registrant as Specified in Its Charter)
Maryland
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(State or Other Jurisdiction of Incorporation)
1-11954 22-1657560
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(Commission File Number) (IRS Employer Identification No.)
Park 80 West, Plaza II, Saddle Brook, New Jersey 07663
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(Address of Principal Executive Offices) (Zip Code)
(201) 587-1000
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of businesses acquired. The financial
statements included as Annex F in the Company's Current Report on Form 8-K,
dated March 12, 1997, as filed with the Securities and Exchange Commission on
March 26, 1997, are hereby deleted and replaced by the following:
Annex Financial Statements
F Financial statements for the years ended December 31, 1996,
1995 and 1994 for B&B Park Avenue L.P. (a Limited Partnership)
(including independent auditors' report)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
VORNADO REALTY TRUST
Dated: April 1, 1997 By: /s/ Joseph Macnow
-------------------
Joseph Macnow
Vice President --
Chief Financial Officer
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INDEX TO ANNEXES
Annex Financial Statements Page
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F Financial statements for the years ended December 31, 1996,
1995 and 1994 for B&B Park Avenue L.P. (a Limited Partnership)
(including independent auditors' report)
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Annex F
B&B PARK AVENUE L.P.
(A LIMITED PARTNERSHIP)
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
AND
INDEPENDENT AUDITORS' REPORT
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B&B PARK AVENUE L.P.
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
TABLE OF CONTENTS
Independent Auditors' Report 1
Financial Statements
Balance Sheet at December 31, 1996 and 1995 2
Statement of Operations 3
Statement of Cash Flows 4
Statement of Changes in Partners' Capital 5
Notes to Financial Statements 6-9
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FRIEDMAN 1700 BROADWAY
ALPREN & NEW YORK, NY 10019
GREEN LLP 212-582-1600
CERTIFIED PUBLIC ACCOUNTANTS FAX 212-265-4761
INDEPENDENT AUDITORS' REPORT
TO THE PARTNERS OF B&B PARK AVENUE L.P.
We have audited the accompanying balance sheet of B&B PARK AVENUE L.P. (a
limited partnership) as of December 31, 1996 and 1995, and the related
statements of operations, cash flows and changes in partners' capital for each
of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the managing general partner. Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of Two Park Company, a
general partnership, the investment in which, as discussed in Note 4 to the
financial statements, is accounted for by the equity method of accounting. The
investment in Two Park Company was $17,935,304 and $17,543,118 as of December
31, 1996 and 1995, respectively, and the distributive share of its net income
(loss) was $392,186, $(382,500) and $(637,607) for the years ended December 31,
1996, 1995 and 1994, respectively. The financial statements of Two Park Company
were audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to the amounts included for Two Park Company, is
based solely on the reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
managing general partner, as well as evaluating the overall financial statement
presentation. We believe that our audits and the reports of other auditors
provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of B&B PARK AVENUE L.P. as of December 31, 1996 and 1995,
and the results of its operations and its cash flows for each of the three years
in the period ended December 31, 1996, in conformity with generally accepted
accounting principles.
/s/ FRIEDMAN ALPREN & GREEN LLP
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January 15, 1997, except for
Note 2, as to which the date
is March 12, 1997
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B&B PARK AVENUE L.P.
BALANCE SHEET
DECEMBER 31, 1996 AND 1995
1996 1995
------------ -----------
ASSETS
Investment in Two Park Company - Notes 4 and 5 $17,935,304 $17,543,118
Cash 371 145,691
Due from maintenance services company - Note 6 712 78,064
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$17,936,387 $17,766,873
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accrued expenses $ 9,200 $ 9,700
Partners' capital 17,927,187 17,757,173
----------- -----------
$17,936,387 $17,766,873
=========== ===========
The accompanying notes are an integral part of these financial statements.
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B&B PARK AVENUE L.P.
STATEMENT OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
--------- ---------- ---------
Revenues
Distributive share of net income (loss) from
Two Park Company $ 392,186 $(382,500) $(637,607)
Rebate, maintenance services company -
Note 6 49,712 82,377 79,795
Interest income 3,612 1,044 --
--------- --------- ---------
445,510 (299,079) (557,812)
Expenses
Professional fees 60,496 82,610 45,608
--------- --------- ---------
Net income (loss) $ 385,014 $(381,689) $(603,420)
========= ========= =========
The accompanying notes are an integral part of these financial statements.
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B&B PARK AVENUE L.P.
STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
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Cash flows from operating activities
Net income (loss) $ 385,014 $(381,689) $(603,420)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities
Distributive share of net (income) loss from
Two Park Company (392,186) 382,500 637,607
Changes in assets and liabilities
Due from maintenance services company 77,352 ( 2,727) ( 29)
Accrued expenses ( 500) ( 10,700) 15,400
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Net cash provided by (used in)
operating activities 69,680 ( 12,616) 49,558
Cash flows from financing activities
Distributions to partners (215,000) -- --
--------- --------- ---------
Net decrease in cash (145,320) ( 12,616) 49,558
Cash, beginning of year 145,691 158,307 108,749
--------- --------- ---------
Cash, end of year $ 371 $ 145,691 $ 158,307
========= ========= =========
The accompanying notes are an integral part of these financial statements.
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B&B PARK AVENUE L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Limited Partners
---------------------------
General Partners
------------------------------- Carborundum
Nancy Mendik Center Bernard H.
Total Creek, Inc. Corporation Joint Venture Mendik
------------ ------------ ------------- --------------- -----------
Balance, December 31, 1993 $ 18,742,282 $ 58,492 $ (160,423) $ 18,844,213 $ --
Net loss (603,420) (6,004) ( 3,017) (594,399) --
------------ ------------ ------------ ------------ ------------
Balance, December 31, 1994 18,138,862 52,488 (163,440) 18,249,814 --
Net loss (381,689) (3,798) ( 1,908) (375,983) --
------------ ------------ ------------ ------------ ------------
Balance, December 31, 1995 17,757,173 48,690 (165,348) 17,873,831 --
Net income 385,014 3,830 1,926 379,258 --
Distributions (215,000) (2,150) -- (212,850) --
------------ ------------ ------------ ------------ ------------
Balance, December 31, 1996 $ 17,927,187 $ 50,370 $ (163,422) $ 18,040,239 $ -0-
============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
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B&B PARK AVENUE L.P.
NOTES TO FINANCIAL STATEMENTS
1 - ORGANIZATION
B&B Park Avenue L.P., a Delaware limited partnership, was organized on
December 15, 1986 to acquire a 40% general partnership interest in Two Park
Company. The property located at Two Park Avenue, New York, New York was
acquired by Two Park Company on December 22, 1986.
2 - TRANSFER OF OWNERSHIP
Pursuant to a solicitation contained in a private placement memorandum
dated November 11, 1996, the Partnership obtained the consent of its
partners to participate in an offering of shares of common stock in
accordance with a preliminary registration statement filed with the
Securities and Exchange Commission on December 18, 1996. On March 12, 1997,
the managing general partner entered into an agreement with Vornado Realty
Trust, a publicly traded real estate investment trust ("REIT"). The
partners will be resolicited to obtain their consents to participate in
this transaction, under terms and conditions similar to those stated in the
private placement memorandum dated November 11, 1996. The REIT is a fully
integrated, self-administered and self-managed real estate company which
has qualified as a real estate investment trust for Federal income tax
purposes. Upon completion of the transaction, it is anticipated that the
Partnership will be owned by a company controlled by the REIT.
3 - THE PARTNERSHIP AGREEMENT
Capital Contributions
Of the total initial capital, $37,425,103 was contributed by Delaware
Acres, Inc. (CLP) and $378,031 by New York Acres, Inc. (CGP). On September
30, 1992, the partnership interests of CLP and CGP were transferred to
Carborundum Center Joint Venture (MGP) and Nancy Creek, Inc. (Nancy Creek),
respectively. Additional capital contributions required for improvements
and leasing costs of the property are to be contributed by MGP. Mendik
Corporation (Mendco) and Bernard H. Mendik (Mendik) are not required to
make cash contributions.
Distributions
Net cash from operations is to be distributed as follows: After
repaying loans as required, 99% to MGP, until an amount equal to an 8%
annual preferred return (as defined) has been received, and 1% to the
general partners (as defined); then 99% to Mendik and 1% to Mendco until
Mendik has received his special preferred return (as defined); then 85% to
MGP, 14% to Mendik and 1% to the general partners until all distributions
to Nancy Creek aggregate $200,000; all remaining cash: 85% to MGP, 14% to
Mendik and 1% to Mendco.
(Continued)
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B&B PARK AVENUE L.P.
NOTES TO FINANCIAL STATEMENTS
3 - THE PARTNERSHIP AGREEMENT (Continued)
Distributions (Continued)
Net proceeds from sales and refinancing will be distributed as
follows: first, 99% to MGP and 1% to Nancy Creek until each has received an
8% cumulative return (as defined); then to MGP and Nancy Creek until each
has received its adjusted total capital (as defined); then 99% to Mendik
and 1% to Mendco until Mendik has received the unpaid special cumulative
return (as defined); then 50% to Mendco and 50% to MGP until each has
received its unpaid deferred incentive share (as defined); finally, the
remainder, 79.17% to MGP, 20.33% to Mendik and .5% to Mendco.
Allocation of Loss or Income
Net losses will be allocated first to the extent that capital accounts
exceed certain amounts, as defined. However, as this criterion does not
presently exist, net losses are allocated .995% to Nancy Creek, 98.505% to
MGP and .5% to Mendco.
Net income will generally be allocated in the same manner as cash is
distributed.
4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The managing general partner uses estimates and assumptions in
preparing financial statements. Those estimates and assumptions affect the
reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities, and the reported revenues and expenses.
Investment in Two Park Company
The investment in Two Park Company is recorded on the equity method,
reflecting cost adjusted for the Partnership's interest in the net income
or losses of, and distributions from, that partnership.
As of December 31, 1996, the managing general partner of Two Park
Company concluded that the total estimated undiscounted future cash flow to
be generated by its property, from operations and its eventual disposition,
over an estimated holding period is less than its carrying value. As a
result, Two Park Company recorded a write-down of $50,148,556 at December
31, 1996 to reduce the property's carrying value to its estimated fair
value. The Partnership had previously determined that, prior to 1993, its
investment in Two Park Company had declined in value and that such decline
was deemed to be other than temporary. Accordingly, the investment was
written down by $25,000,000 prior to 1993, and the Partnership's 1996
financial statements do not reflect its distributive share of the 1996
write-down by Two Park Company. The difference between the carrying amount
(Continued)
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B&B PARK AVENUE L.P.
NOTES TO FINANCIAL STATEMENTS
4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Investment in Two Park Company (Continued)
of the investment and the underlying equity in the investee is being
amortized over the life of the property, with amortization being reflected
as reductions in the distributive share of net losses from Two Park
Company.
Income Taxes
The Partnership is not a taxpaying entity for income tax purposes and,
accordingly, no provision has been made for income taxes. The partners'
allocable shares of the Partnership's taxable income or loss are reportable
on their income tax returns.
Concentration of Credit Risk for Cash
Cash at December 31, 1995 included approximately $18,000 in excess of
amounts insured by the Federal Deposit Insurance Corporation.
5 - INVESTMENT IN TWO PARK COMPANY
Summarized financial information of Two Park Company is as follows:
1996 1995
----------------- -----------------
Balance Sheet
Assets
Property and improvements $ 99,905,783 $ 153,245,733
Cash and short-term investments 6,257,952 6,046,711
Receivables 10,604,302 8,644,599
Prepaid expenses 6,701,968 7,561,649
Unamortized costs 325,509 576,103
----------------- -----------------
$ 123,795,514 $ 176,074,795
================= =================
Liabilities and Partners' Capital
Mortgage payable $ 65,000,000 $ 65,000,000
Accrued interest payable 553,263 553,263
Accounts payable and accrued expenses 1,064,802 1,245,535
Security deposits payable 450,398 594,200
Deferred income 6,515,337 7,355,711
Improvements payable 31,007 227,289
Partners' capital 50,180,707 101,098,797
----------------- -----------------
$ 123,795,514 $ 176,074,795
================= =================
(Continued)
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B&B PARK AVENUE L.P.
NOTES TO FINANCIAL STATEMENTS
5 - INVESTMENT IN TWO PARK COMPANY (Continued)
1996 1995 1994
------------ ------------ ------------
Statement of Operations
Revenues $ 25,457,784 $ 23,895,802 $ 22,890,880
Expenses 11,500,589 11,519,811 11,588,807
------------ ------------ ------------
Income before interest expense,
depreciation and amortization
and write-down of property and
improvements 13,957,195 12,375,991 11,302,073
------------ ------------ ------------
Interest expense 6,532,083 7,533,674 7,619,110
Depreciation and amortization 8,194,646 7,548,566 7,026,980
Loss on write-down of property and
improvements 50,148,556 -- --
------------ ------------ ------------
64,875,285 15,082,240 14,646,090
------------ ------------ ------------
Net loss $(50,918,090) $ (2,706,249) $ (3,344,017)
============ ============ ============
6 - RELATED PARTY TRANSACTION
Maintenance services for the Two Park Avenue property are provided by
a company that is controlled by a stockholder of a general partner of the
Partnership (Mendik). As defined in the maintenance contract, the
Partnership is entitled to receive a 20% share of the profits realized by
the maintenance services company from the performance of tenant services.
The Partnership's share of profits realized from tenant services for the
years ended December 31, 1996, 1995 and 1994 was $49,712, $82,377 and
$79,795, respectively.
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