Back to GetFilings.com
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
--------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number 0-50268
The Newkirk Master Limited Partnership
--------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 11-3636084
- --------------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7 Bulfinch Place, Suite 500, Boston, MA 02114-9507
- --------------------------------------- --------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (617) 570-4600
--------------
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X|
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date. 6,310,512 Limited Partnership
Units Outstanding as of March 31, 2004.
1 of 27
Table of Contents
Page
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Consolidated Balance Sheet at March 31, 2004 and
Audited Consolidated Balance Sheet at December 31, 2003 ................................. 3
Unaudited Consolidated Statements of Operations for the Three Months
Ended March 31, 2004 and March 31, 2003.................................................. 4
Unaudited Consolidated Statement of Partners' Equity for the
Three Months Ended March 31, 2004........................................................ 5
Unaudited Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2004 and March 31, 2003........................................................ 6
Notes to Consolidated Unaudited Financial Statements..................................... 9
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations............................................................................ 15
Item 3. Quantitative and Qualitative Disclosures about Market Risk............................... 21
Item 4. Controls and Procedures.................................................................. 21
Part II. OTHER INFORMATION
Item 1. Legal Proceedings........................................................................ 22
Item 6. Exhibits and Reports on Form 8-K......................................................... 24
Signatures......................................................................................... 25
Exhibit Index...................................................................................... 26
2 of 27
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
THE NEWKIRK MASTER LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(In thousands, except unit data)
March 31, December 31,
2004 2003
----------- ------------
(Unaudited)
ASSETS
Real estate investments:
Land $ 32,643 $ 37,674
Land estates 43,998 45,204
Buildings and improvements 1,587,080 1,619,199
----------- -----------
Total real estate investments 1,663,721 1,702,077
Less accumulated depreciation and amortization (571,317) (572,840)
----------- -----------
Real estate investments, net 1,092,404 1,129,237
Real estate held for sale, net of accumulated depreciation of $19,429
and $19,692 36,832 59,481
Cash and cash equivalents, of which $5,166 and $5,148 is restricted 46,520 37,851
Receivables and deferred rental income (including $7,346 from
a related party) 77,416 97,845
Deferred costs, net of accumulated amortization of $31,580 and $29,638 20,210 22,993
Equity investments in limited partnerships 8,945 8,492
Other assets 26,306 27,240
Other assets of discontinued operations 325 955
----------- -----------
Total Assets $ 1,308,958 $ 1,384,094
=========== ===========
LIABILITIES, MINORITY INTERESTS AND PARTNERS' EQUITY
Liabilities:
Mortgage notes and accrued interest payable (including $14,727 and
$14,583 to a related party) $ 574,229 $ 615,993
Note payable 193,753 208,356
Contract right mortgage notes and accrued interest payable (including $266,238
and $296,035 to related parties) 372,023 401,132
Accounts payable and accrued expenses 8,935 15,427
Liabilities of discontinued operations 30,374 35,997
----------- -----------
Total Liabilities 1,179,314 1,276,905
Contingencies
Minority interests (39,069) (39,822)
Partners' equity (6,310,512 and 6,319,391 limited partnership
units outstanding) 168,713 147,011
----------- -----------
Total Liabilities, Minority Interests and Partners' Equity $ 1,308,958 $ 1,384,094
=========== ===========
See notes to consolidated financial statements.
3 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(In thousands, except unit and per unit data)
(Unaudited)
For the Three Months Ended
March 31,
---------------------------
2004 2003
----------- -----------
Revenue:
Rental income $ 64,162 $ 67,370
Interest income 602 931
Management fees 90 105
----------- -----------
Total revenue 64,854 68,406
----------- -----------
Expenses:
Interest 23,921 26,849
Depreciation 9,171 9,224
General and administrative 1,481 1,579
Amortization 711 1,006
Ground rent 801 820
State income taxes 319 207
----------- -----------
Total expenses 36,404 39,685
----------- -----------
Income from continuing operations before equity in income
from investments in limited partnerships and minority interest 28,450 28,721
Equity in income from investments in limited partnerships 620 564
Minority interest (4,016) (4,040)
----------- -----------
Income from continuing operations 25,054 25,245
----------- -----------
Discontinued operations:
Income from discontinued operations 349 13,998
Gain from disposal of real estate 7,669 26,087
----------- -----------
Income from discontinued operations 8,018 40,085
----------- -----------
Net income $ 33,072 $ 65,330
=========== ===========
Income from continuing operations per
limited partnership unit $ 3.97 $ 3.97
Income from discontinued operations per
limited partnership unit 1.27 6.30
----------- -----------
Net income per limited partnership unit $ 5.24 $ 10.27
=========== ===========
Distributions per limited partnership unit $ 1.75 $ 0.75
=========== ===========
Weighted average limited partnership units 6,313,888 6,359,048
=========== ===========
See notes to consolidated financial statements.
4 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2004
(In thousands, except unit data)
(Unaudited)
Limited
Partnership Partners'
Units Equity
----------- ----------
Balance at December 31, 2003 6,319,391 $ 147,011
Distributions -- (11,059)
Limited partner buyouts (8,879) (311)
Net income -- 33,072
---------- ----------
Balance at March 31, 2004 6,310,512 $ 168,713
========== ==========
See notes to consolidated financial statements.
5 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(In thousands)
(Unaudited)
For the Three Months Ended
March 31,
--------------------------
2004 2003
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Continuing Operations:
Income from continuing operations $ 25,054 $ 25,245
Adjustments to reconcile income from continuing operations to
net cash provided by continuing operations:
Amortization of deferred costs and land estates 3,402 2,645
Depreciation expense 9,171 9,224
Net loss from early extinguishment of debt -- 28
Minority interest expense 4,016 4,040
Equity in income of limited partnerships (620) (564)
Changes in operating assets and liabilities:
Decrease in receivables and deferred rental income 20,394 17,321
(Decrease) increase in accounts payable and accrued expenses (397) 907
Decrease in accrued interest-mortgages and contract rights (7,212) (4,701)
Decrease (increase) in other assets 564 (851)
-------- --------
Net cash provided by continuing operations 54,372 53,294
-------- --------
Discontinued Operations:
Income from discontinued operations 8,018 40,085
Adjustments to reconcile income from discontinued
operations to net cash provided by discontinued operations:
Amortization of deferred costs and land estates 14 23
Depreciation expense 294 1,090
Net gain from early extinguishment of debt (4) (8,077)
Gain on diposal of real estate (7,669) (26,087)
Minority interest expense 108 121
Changes in assets and liabilities:
Net decrease in assets and liabilities of discontinued
operations (976) (2,584)
-------- --------
Net cash (used in) provided by discontinued operations (215) 4,571
-------- --------
Net cash provided by operating activities 54,157 57,865
-------- --------
(Continued)
See notes to consolidated financial statements.
6 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(In thousands)
(Unaudited)
For the Three Months Ended
March 31,
-------------------------
2004 2003
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Land additions $ (51) $ (250)
Net proceeds from disposal of real estate 51,662 37,085
Distributions from limited partnership interests 168 --
Cash related to previously unconsolidated limited partnerships -- 382
Investments in limited partnership interest -- (15)
-------- --------
Net cash provided by investing activities 51,779 37,202
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Satisfaction of mortgage notes $(28,478) $ (8,391)
Satisfaction of contract right mortgage notes (616) (898)
Principal payments of mortgage notes (37,613) (43,635)
Principal payments of note payable (14,603) (16,940)
Principal payments of contract right mortgage notes (1,148) (1,116)
Mortgage prepayment penalties -- (215)
Distributions to partners (11,059) (4,587)
Limited partner buyouts (311) (3,937)
Distributions to minority interests (3,439) (7)
Deferred costs -- (150)
-------- --------
Net cash used in financing activities (97,267) (79,876)
-------- --------
Net increase in cash and cash equivalents 8,669 15,191
Cash and Cash Equivalents at Beginning of Period 37,851 33,452
-------- --------
Cash and Cash Equivalents at End of Period $ 46,520 $ 48,643
======== ========
Supplemental Disclosure of Cash Flow Information:
Cash paid for state income taxes $ 46 $ 8
======== ========
Cash paid for interest $ 29,968 $ 49,228
======== ========
See notes to consolidated financial statements.
7 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(In thousands)
(Unaudited)
Supplemental Information
In January 2003, balances related to the issuance of 317,813 Units in the
Partnership for the various assets contributed to the Partnership were as
follows:
2003
--------------
(In thousands)
Real estate investments, net $ 36,836
Cash and cash equivalents 382
Receivables 3,557
Deferred costs, net 1,512
Equity investments in limited partnerships 6,335
Mortgage notes payable (61,057)
Accrued interest payable (1,134)
Accounts payable and accrued expenses (68)
Minority interests 24,687
--------
Partners' equity $ 11,050
========
In connection with the disposal of real estate, the purchaser of a property
assumed $94,918 of the Partnership's debt.
See notes to consolidated financial statements.
8 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FORM 10-Q MARCH 31, 2004
Note 1 - GENERAL
The Newkirk Master Limited Partnership (the "Partnership"), commenced
operations on January 1, 2002 following the completion of a transaction
(the "Exchange") involving the merger into wholly-owned subsidiaries of
the Partnership of 90 limited partnerships (the "Newkirk Partnerships"),
each of which owned commercial properties (the "Newkirk properties"), and
the acquisition by the Partnership of various assets, including those
related to the management or capital structure of the Newkirk
Partnerships.
The consolidated financial statements of the Partnership included herein
have been prepared by the Partnership, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted
pursuant to such rules and regulations, although the Partnership believes
that the disclosures contained herein are adequate to make the information
presented not misleading. These consolidated financial statements should
be read in conjunction with the consolidated financial statements and the
notes thereto included in the Partnership's Annual Report on Form 10-K for
the year ended December 31, 2003.
The consolidated financial statements reflect, in the opinion of the
Partnership, all adjustments (consisting of normal recurring adjustments)
necessary to present fairly the consolidated financial position and
results of operations for the respective periods in conformity with
accounting principles generally accepted in the United States of America
consistently applied.
The results of operations for the three months ended March 31, 2004 and
2003 are not necessarily indicative of the results to be expected for the
full year.
Note 2 - RELATED PARTY TRANSACTIONS
Winthrop Financial Associates, A Limited Partnership ("WFA"), an affiliate
of the "Newkirk Group," performs asset management services for the
Partnership and received a fee of $0.5 million for the three months ended
March 31, 2004 and 2003. The Newkirk Group, which managed the Newkirk
Partnerships, is comprised of certain affiliates of Apollo Real Estate
Fund III, L.P., ("Apollo"), Vornado Realty Trust and senior executives of
WFA.
9 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FORM 10-Q MARCH 31, 2004
Note 2 - RELATED PARTY TRANSACTIONS (Continued)
The Partnership provides certain asset management, investor and
administrative services to partnerships, whose general partners were
controlled by the Newkirk Group, and which were not merged into the
Partnership (the "Other Partnerships"). Control of the general partners of
these partnerships was acquired by the Partnership. The Partnership earned
$0.1 million of management fees for these services for the three months
ended March 31, 2004 and 2003. The Partnership had receivables for
management fees of $1.3 million and $1.1 million due from these
partnerships at March 31, 2004 and December 31, 2003, respectively.
The Partnership has an ownership interest in the three most junior
tranches of a securitized pool of first mortgages with respect to 31 first
mortgage loans encumbering 67 Partnership properties and 1 other property
controlled by affiliates of the general partner. The Partnership had a
loan receivable, net of discount, of $9.9 million and $9.8 million at
March 31, 2004 and December 31, 2003, respectively, and earned interest
income of $0.3 million and $0.4 million for the three months ended March
31, 2004 and 2003, related to this ownership interest.
Affiliates and executives of the Newkirk Group owned $17.3 million of a
$161.7 million Real Estate Mortgage Investment Conduit ("REMIC") which was
secured by the contract rights payable at March 31, 2003. The affiliates
and executives of the Newkirk Group earned $0.6 million of interest income
during the three months ended March 31, 2003. The affiliates and
executives were repaid when T-Two Partners purchased the T-1 Certificate
as discussed in the following paragraph.
T-Two Partners, an affiliate of the Newkirk Group, is the 100% beneficial
owner of the contract rights. T-Two Partners owned the portion of the
contract rights referred to as the T-2 Certificate and during 2003,
purchased the portion of the contract rights referred to as the T-1
Certificate. The Partnership incurred $5.6 million and $2.8 million of
interest expense on these contract rights during the three months ended
March 31, 2004 and 2003, respectively. Contract right mortgage notes and
accrued interest payable includes $266.2 million and $296.0 million due to
T-Two Partners at March 31, 2004 and December 31, 2003, respectively. The
Partnership had the right to acquire T-Two Partners' interest in the
contract rights in January 2008 by acquiring T-Two Partners in exchange
for Units. The Newkirk Group had the right to require the Partnership to
purchase this interest in December 2007 in exchange for Units. During
2003, the Partnership and the owners of T-Two Partners modified these
rights. The Partnership can now exercise their option anytime between
November 24, 2006 and November 24, 2009.
In addition, the purchase price is payable in cash rather than Units. The
owners of T-Two Partners agreed to eliminate their put option which could
require the Partnership to purchase T-Two Partners in December 2007 and
the Partnership agreed to guarantee repayment of the "T-Two Loan". During
November 2003, the Partnership obtained a $208.5 million loan, which had
an outstanding balance of $193.8 million at March 31, 2004. At the same
time that the Partnership obtained the loan, T-Two Partners obtained a
$316.5 million loan. This loan is referred to as the T-Two Loan. T-Two
Partners also agreed to provide a credit line to the Partnership bearing
interest at LIBOR plus 450 basis points. If the Partnership exercises
10 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FORM 10-Q MARCH 31, 2004
Note 2 - RELATED PARTY TRANSACTIONS (Continued)
the option, the purchase price is to be calculated as follows: the sum of
$316.5 million plus T-Two Partners' costs of obtaining the T-Two Loan
(approximately $7.3 million) and administering the trust that holds the
contract rights, together with interest on the foregoing sum at the
effective rate of interest paid by T-Two Partners on the T-Two Loan, less
all payments made from and after November 24, 2003 on the contract rights.
T-Two Partners will reimburse the Partnership for approximately $7.3
million of closing costs incurred in connection with the note payable and
the T-Two Loan, together with interest thereon at a rate equal to LIBOR
plus 450 basis points. The Partnership earned interest income of $0.1
million during the three months ended March 31, 2004.
An affiliate of the general partner owns a portion of the second mortgage
indebtedness of a property in which the Partnership has an interest. The
second mortgage payable and accrued interest owned by the affiliate
aggregated $14.7 million and $14.6 million at March 31, 2004 and December
31, 2003, respectively. Included in interest expense is $0.2 million
related to this second mortgage payable for the three months ended March
31, 2004 and 2003.
Note 3 - CONTINGENCIES
Legal
In July 2002, an action was commenced in the Connecticut Superior Court
against, among others, the Partnership's general partner and various
affiliates of the Partnership's general partner. Plaintiffs are four
limited partners of three of the Newkirk Partnerships. The action alleges,
among other things, that the price paid to non-accredited investors in
connection with the Exchange was unfair and did not fairly compensate them
for the value of their partnership interests. The complaint also alleges
that the exchange values assigned in the Exchange to certain assets
contributed by affiliates of the Partnership's general partner were too
high in comparison to the exchange values assigned to the Newkirk
Partnerships, that the option arrangement relating to the Partnership's
potential acquisition in the future of the T-2 Certificate, which
represents an interest in a grantor trust, the mortgage assets of which
consist of contract rights secured by the Partnership's real properties as
well as other properties owned by other partnerships that are controlled
by affiliates of the Partnership's general partner, was unfair to limited
partners and that the disclosure document used in connection with the
Exchange contained various misrepresentations and/or omissions of material
facts. The complaint seeks to have the action classified as a class action
as well as compensatory and punitive damages in an unspecified amount. The
defendants have denied and continue to deny the allegations of the
complaint. In order to avoid the expenses, distraction, and uncertainties
of litigation, the defendants entered into a settlement agreement dated
December 31, 2003 to settle the litigation, which settlement agreement was
subject to court approval. On April 16, 2004, after notice to the
purported class members and a hearing on whether to approve the
settlement, the Court approved the settlement, the payment of plaintiffs'
attorneys' fees and costs from the settlement proceeds, payment of
incentive fees to certain named plaintiffs from the settlement proceeds,
and a plan of allocation of the settlement proceeds submitted by
plaintiffs' counsel. The settlement
11 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FORM 10-Q MARCH 31, 2004
Note 3 - CONTINGENCIES (Continued)
Legal (Continued)
provides for the following material terms: (i) the Newkirk Group will
convey to unitholders of the Newkirk Partnerships who are unaffiliated
with the general partner and who received limited partnership units in the
Exchange, units in the Partnership equal to 1% of the outstanding units;
(ii) the Partnership will pay $1.5 million to an escrow agent for the
benefit of unaffiliated unitholders; and (iii) the Partnership will pay
$2.0 million to an escrow agent for the benefit of unitholders of the
Newkirk Partnerships who were entitled to receive cash in the Exchange. In
addition, the Partnership, in order to facilitate the settlement, entered
into an agreement with T-Two Partners and its equityholders pursuant to
which the Partnership has the right to acquire substantially all of the
assets of T-Two Partners or a 100% ownership interest in T-Two Partners at
any time between November 24, 2006 and November 24, 2009. The Partnership
accrued $3.5 million with respect to this matter, which is included in
general and administrative expense in the consolidated statement of
operations for the year ended December 31, 2003.
On December 31, 2002, a derivative action was commenced in the Dallas
County Texas District Court by a limited partner of Eastgar Associates,
L.P. ("Eastgar") against, among others, the general partners of Eastgar
and affiliates of the Newkirk Partnerships. The Partnership owns a 60.5%
limited partnership interest in Eastgar and also controls the general
partner of that partnership. The complaint alleges that the defendants
have charged Eastgar excessive management fees and have unfairly prevented
Eastgar from prepaying and refinancing its mortgage indebtedness. The
complaint seeks compensatory and punitive damages in an unspecified
amount, attorneys' fees and expenses, an accounting, and a declaration of
the parties' future rights and obligations regarding management fees and
the refinancing of mortgage indebtedness. The defendants have denied and
continue to deny the allegations of the complaint. In order to avoid the
expenses, distraction and uncertainties of litigation, the defendants
entered into an agreement to settle the litigation for a $137,500 payment
by the defendants and to charge an asset management fee of $35,000 per
year, adjusted for changes in the Consumer Price Index and as may be
adjusted for extraordinary circumstances by Eastgar's general partner.
After payment of court-approved attorneys' fees and expenses, the
remaining balance would be distributed to Eastgar's limited partners other
than the Partnership or its affiliates. The settlement also sets the
management fees to be charged to Eastgar, subject to any changes that
Eastgar may approve in the future consistent with its fiduciary duty. The
settlement has been, as required, approved by the trial court after notice
to the limited partners of Eastgar. The Partnership accrued $137,500 with
respect to this matter, which is included in general and administrative
expense in the consolidated statement of operations for the year ended
December 31, 2003.
12 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FORM 10-Q MARCH 31, 2004
Note 4 - DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE
During the three months ended March 31, 2004, the Partnership sold 11
properties for a combined net sales price of $51.7 million. After
satisfying existing mortgage indebtedness and other costs and adjustments,
the net sales proceeds were approximately $21.0 million of which $14.6
million was applied to a principal payment on the note payable to Fleet.
The Partnership recognized a net gain on sale of these properties of $7.7
million. During the three months ended March 31, 2003, the Partnership
sold 7 properties for a combined net sales price of $132.0 million. The
Partnership recognized a net gain on sale of these properties of $26.1
million. The sale and operations of these properties for all periods
presented have been recorded as discontinued operations in accordance with
the provisions of Statement of Financial Accounting Standards ("SFAS") No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets." In
addition, the Partnership has classified properties which have met all of
the criteria of SFAS No. 144 as real estate held for sale in the
accompanying consolidated balance sheets and has classified the operations
of the properties and the sold properties as discontinued operations in
the accompanying consolidated statement of operations.
Discontinued operations for the three months ended March 31, 2004 and 2003
are summarized as follows (in thousands):
2004 2003
-------- --------
Revenue $ 1,663 $ 11,517
Expenses (1,318) (5,596)
Net gain from early extinguishment of debt 4 8,077
Gain from disposal of real estate 7,669 26,087
-------- --------
Income from discontinued operations $ 8,018 $ 40,085
======== ========
Expenses include interest expense to related parties of $.5 million and
$.4 million, for the three months ended March 31, 2004 and 2003,
respectively.
Other assets of discontinued operations at March 31, 2004 and December 31,
2003 are summarized as follows (in thousands):
2004 2003
---- ----
Receivables $286 $734
Other assets 39 221
---- ----
$325 $955
==== ====
13 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FORM 10-Q MARCH 31, 2004
Note 4 - DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE (Continued)
Liabilities of discontinued operations at March 31, 2004 and December 31,
2003 are summarized as follows (in thousands):
2004 2003
------- -------
Mortgage notes and accrued interest payable $ 1,467 $30,371
Contract right mortgage notes and accrued
interest payable (including $28,907 and
$5,626 to related parties) 28,907 5,626
------- -------
$30,374 $35,997
======= =======
Note 5 - SUBSEQUENT EVENTS
During April and May 2004, the Partnership sold 5 properties to
unaffiliated third parties for a combined net sales price of $5.5 million.
For financial reporting purposes, the Partnership expects to recognize a
net gain on sale of these properties of approximately $1.6 million during
the second quarter.
In connection with a January 2003 transaction where the Partnership
acquired interests in nine limited partnerships, the Partnership has an
option to acquire additional limited partnership interests in two of the
partnerships. On April 1, 2004, the Partnership exercised its option and
acquired limited partnership interests in the two Partnerships in exchange
for 15,539 units of the Partnership.
14 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 2004
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain statements contained herein constitute forward-looking statements.
Forward-looking statements include information relating to the
Partnership's intent, belief or current expectations.
We identify forward-looking statements in this Form 10-Q by using words or
phrases such as "anticipate," "believe," "estimate," "expect," "intend,"
"may be," "objective," "plan," "predict," "project" and "will be" and
similar words or phrases (or the negative thereof).
The forward-looking information involves important risks and uncertainties
that could cause our actual results, performance or achievements to differ
materially from our anticipated results, performance or achievements
expressed or implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, those set forth in our
Annual Report on Form 10-K for the year ended December 31, 2003 under
"Forward-Looking Statements."
Although we believe the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, we cannot assure you
that such expectations will be attained or that any deviations will not be
material. We disclaim any obligation or undertaking to disseminate to you
any updates or revisions to any forward-looking statement contained in
this Form 10-Q to reflect any change in our expectations or any changes in
events, conditions or circumstances on which any statement is based.
Liquidity and Capital Resources
At March 31, 2004, your partnership owned an interest in 220 Newkirk
properties and limited partnership interests in seven partnerships which
own 37 properties whose operations are consolidated for financial
reporting purposes. Almost all of the properties are leased to one or more
tenants pursuant to net leases with original lease terms, subject to
extensions, ranging between approximately twenty and twenty-five years.
Approximately 92% of the original lease terms expire between 2005 and
2009. At March 31, 2004, there are six properties which are vacant and not
leased which represent approximately 111,000 square feet of your
partnership's Newkirk properties. The remaining 18,905,000 square feet or
99.4% are leased. Your partnership also holds subordinated interests in a
securitized pool of notes evidencing first mortgage indebtedness secured
by certain of your partnership's properties as well as other properties,
limited partnership interests in various partnerships that own commercial
net-leased properties, an interest in a management company that provides
services for your partnership as well as other real estate partnerships,
ground leases, remainder interests or the right to acquire remainder
interests in various properties and miscellaneous other assets. In
addition, your partnership, or an affiliate of your general partner,
controls the general partner of the real estate limited partnerships in
which your partnership owns limited partnership interests, and your
partnership has an option to acquire in the future second mortgage debt
secured by a substantial number of your partnership's properties as well
as the properties owned by nine other partnerships.
Your partnership receives rental income from its properties which is its
primary source of liquidity. Pursuant to the terms of the leases, the
tenants are responsible for substantially all of the operating expenses
with respect to the properties, including maintenance, capital
improvements, insurance and taxes. If a tenant fails to exercise its
renewal option or exercises its option to terminate its lease
15 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 2004
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
Liquidity and Capital Resources (Continued)
early, your partnership will be required to either sell the property or
procure a new tenant. If your partnership attempts to procure a new
tenant, it will be competing for new tenants in the then current rental
markets, which may not be able to support terms as favorable as those
contained in the original lease options.
The level of liquidity based on cash and cash equivalents experienced an
$8,669,000 increase at March 31, 2004 as compared to December 31, 2003.
The increase was due to net cash provided by operating activities of
$54,157,000 and net cash provided by investing activities of $51,779,000,
which were substantially offset by net cash used in financing activities
of $97,267,000. Cash provided by operations consisted of $54,372,000 from
continuing operations, partially offset by $215,000 used in discontinued
operations. Cash provided by investing activities included $51,662,000 of
net proceeds from disposal of real estate and partnership distributions
received from your partnerships equity investments of $168,000, which were
partially offset by land acquisitions of $51,000. Cash used in financing
activities consisted primarily of mortgage loan and contract right
mortgage loan payoffs of $29,094,000, principal payments on mortgage,
contract right and notes payable of $53,364,000, partner distributions of
$11,059,000, distributions to minority interests of $3,439,000 and limited
partner buyouts of $311,000. At March 31, 2004, your partnership had
$46,520,000, of which $5,166,000 is restricted, in cash reserves which
were invested primarily in money market mutual funds.
Off-Balance Sheet Arrangements
On November 24, 2003, at the same time as your partnership obtained its
loan from Fleet National Bank, T-Two Partners obtained a $316,526,573 loan
from Fleet National Bank. We refer to this loan as the T-Two Loan. The
interest rate, maturity date and principal terms of the T-Two Loan are the
same as your partnership's loan. The T-Two Loan is secured by all the
assets of T-Two Partners, including the second mortgage loans receivable
from your partnership. Your partnership guaranteed repayment of the T-Two
Loan to Fleet National Bank. In consideration for your partnership's
guarantee, the owners of T-Two Partners agreed to the elimination of their
put option, and to provide a credit line to your partnership bearing
interest at LIBOR plus 450 basis points. Any amounts advanced to your
partnership under the credit line would have to be repaid in full before
your partnership could purchase the interests in T-Two Partners if your
partnership exercises the purchase option described below. There are no
amounts that have been advanced under the credit line.
Your partnership's call option had previously provided for the acquisition
of the interests in T-Two Partners in January 2008 in exchange for a
number of units in your partnership to be determined at the time of
exercise based on an agreed-upon formula. Your partnership and the owners
of T-Two Partners modified your partnership's option in certain respects.
First, the option can now be exercised by your partnership at any time
between November 24, 2006 and November 24, 2009. Second, the purchase
price is payable in cash rather than units in your partnership. Finally,
the formula for determining the purchase price payable by your partnership
if it exercises the option has been revised in a manner that your
partnership's general partner believes to be significantly more
16 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 2004
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
Off-Balance Sheet Arrangements (Continued)
favorable to your partnership than the formula previously in effect.
Specifically, the purchase price is calculated as follows: the sum of
$316,526,573 plus T-Two Partners' costs of obtaining the T-Two Loan
(approximately $7,346,000) and administering the trust that holds the
second mortgage loans, together with interest on the foregoing sum at the
effective rate of interest paid by T-Two Partners on the T-Two Loan, less
all payments made from and after November 24, 2003 on the second mortgage
loans.
Other Matters
In November 2002, your partnership received a notice from Albertson's,
Inc., indicating that it intended to exercise its right to terminate the
lease for the supermarket property located in Stuart, Florida. In
accordance with the economic discontinuance provision of its lease,
Albertson's made a rejectable offer to purchase the property for an amount
stipulated in the lease of approximately $631,000. Your partnership
elected to reject the offer. As a result of the rejection, your
partnership was required to payoff the first mortgage encumbering the
property, which had a balance of approximately $531,000. Your partnership
satisfied the first mortgage using its cash reserves. Your partnership has
entered into a contract to sell the property for a price in excess of the
rejectable offer price. The sale, which is contingent upon the purchaser
completing its due diligence, is expected to occur, if at all, in the
second quarter of 2004.
Your partnership has also received notice from Albertsons exercising a
purchase option in accordance with their lease on fifteen of your
partnership's properties. Your partnership has rejected ten of the offers
and in April 2004 sold one of the properties where it had rejected the
offer. Your partnership is still considering the remaining 5 offers which
provide for an aggregate purchase price of $2.1 million . If any of those
offers are accepted, the sale would be effective July 1, 2004 for 10
properties, October 1, 2004 for 3 properties and February 1, 2005 for 1
property. Albertsons has exercised its right to to extend its lease on the
fourteen remaining properties owned by your partnership until December 31,
2005 for 10 properties, March 31, 2006 for 3 properties and July 31, 2006
for 1 property. Rent during this extension period will be at renewal
rates. Albertsons will also have a series of five year renewal options.
On January 1, 2003, your partnership acquired from the Newkirk Group, an
affiliate of your partnership's general partner, limited partnership
interests in nine real estate limited partnerships that own net-leased
commercial properties. The limited partnership interests acquired by your
partnership ranged between 4.9% and 57.75% of each partnership and were
acquired in exchange for 317,813 limited partnership units of your
partnership. In January 2004, your partnership notified the Newkirk Group
that it intends to exercise its option to purchase the additional limited
partnership interests in two of the partnerships. These additional limited
partnership interests were acquired as of April 1, 2004 in exchange for
15,539 units. In determining the number of units issuable to the affiliate
in exchange for such interests, your partnership's general partner
estimated
17 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 2004
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
Other Matters (Continued)
the value of nine real estate limited partnerships utilizing a discounted
cash flow approach similar to that which was used to determine exchange
values for Newkirk partnerships as part of the exchange to arrive at an
original value of $22,704,776 for the limited partnership interests for
the limited partnership units acquired in January 2003. The limited
partnership units acquired in April 2004 were valued at $1,110,000. This
value included a $394,000 deduction from the original valuation in order
to reflect a 2003 property sale. Your partnership's general partner then
estimated the per unit value of your partnership in order to determine the
number of units allocable to the affiliate for its interest in the limited
partnerships. The $71.44 estimated per unit value of your partnership was
derived from the aggregate value ascribed to your partnership in the
exchange, as adjusted to reflect the proceeds from your partnership's
indebtedness to Fleet National Bank that were distributed to limited
partners following the exchange. During 2002, appraisals were obtained for
each of the properties owned by the nine real estate limited partnerships.
The aggregate appraised value of all of the properties was $288,675,000.
Based solely on your partnership's ownership interests in the nine
partnerships, $25,049,842 of the appraised value would be attributable to
the interests owned by your partnership. In August 2003, your partnership
acquired an additional 9.9% interest in one of those limited partnerships
for a cash purchase price of $525,000.
Results of Operations
Comparison of the three months ended March 31, 2004 to the three
months ended March 31, 2003.
Income from Continuing Operations
Income from continuing operations decreased by $191,000 to $25,054,000 for
the three months ended March 31, 2004 from $25,245,000 for the three
months ended March 31, 2003. As more fully described below, this decrease
is attributable to a decrease in total revenue of $3,552,000, which was
substantially offset by a decrease in total expenses of $3,281,000, an
increase in equity in income from investments in limited partnerships of
$56,000 and a decrease in minority interest expense of $24,000.
Rental Income
Rental income decreased by $3,208,000 or approximately 5% to $64,162,000
for the three months ended March 31, 2004 from $67,370,000 for the three
months ended March 31, 2003. The decrease was primarily due to the impact
of the second through fourth quarter 2003 and the first quarter 2004 lease
renewals at lower renewal rates.
Interest Income
Interest income decreased by $329,000 or approximately 35% to $602,000 for
the three months ended March 31, 2004 from $931,000 for the three months
ended March 31, 2003. The decrease was due to the payoff of a loan
receivable, lower loan receivable balances and overall lower interest
18 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 2004
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
Results of Operations (Continued)
rates on invested cash balances.
Management Fees
Management fees decreased by $15,000 or approximately 14% to $90,000 for
the three months ended March 31, 2004 from $105,000 for the three months
ended March 31, 2003. The decrease is attributable to fewer properties
under management.
Interest Expense
Interest expense decreased by $2,928,000 or approximately 11% to
$23,921,000 for the three months ended March 31, 2004 compared to
$26,849,000 for the three months ended March 31, 2003. The decrease was
primarily due to loan payoffs during the period and normal scheduled
principal payments.
Depreciation
Depreciation expense decreased by $53,000 or approximately 1% to
$9,171,000 for the three months ended March 31, 2004 compared to
$9,224,000 for the three months ended March 31, 2003. The decrease is
primarily attributable to the retirement of assets.
General and Administrative
General and administrative expenses decreased by $98,000 or approximately
6% to $1,481,000 for the three months ended March 31, 2004 compared to
$1,579,000 for the three months ended March 31, 2003. The decrease is
primarily the result of lower professional fees incurred related to legal
proceedings and filings with the Securities and Exchange Commission.
Amortization Expense
Amortization expense decreased by $295,000 or approximately 29% to
$711,000 for the three months ended March 31, 2004 compared to $1,006,000
for the three months ended March 31, 2003. The decrease is the result of
the purchase of remainder interests associated with land estates during
2003 and decreased loan amortization expense related to the Fleet debt.
The new loan amortization is primarily classified as interest expense.
Ground Rent
Ground rent expense decreased by $19,000 or approximately 2% to $801,000
for the three months ended March 31, 2004 compared to $820,000 the three
months ended March 31, 2003 as a result of land purchases in 2003.
19 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 2004
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
Results of Operations (Continued)
State Income Taxes
State income tax expense increased by $112,000 or approximately 54% to
$319,000 for the three months ended March 31, 2004 compared to $207,000
for the three months ended March 31, 2003. The increase is the result of
several states commencing partnership income tax requirements.
Equity in Income from Investments in Limited Partnerships
Equity in income from investments in limited partnerships increased by
$56,000 or approximately 10% to $620,000 for the three months ended March
31, 2004 compared to $564,000 for the three months ended March 31, 2003.
The increase is the result of lower interest expense at the limited
partnerships due to normal debt amortization.
Minority Interest Expense
Minority interest expense decreased by $24,000 or approximately 1% to
$4,016,000 for the three months ended March 31, 2004 compared to
$4,040,000 for the three months ended March 31, 2003. The decrease was the
result of slightly lower earnings at the non-wholly owned consolidated
properties.
Discontinued Operations
During the three months ended March 31, 2004, the Partnership sold 11
properties for a combined net sales price of approximately $51,662,000.
The Partnership recognized a net gain on disposal of these properties of
$7,669,000. The sale and operations of these properties for all periods
presented have been recorded as discontinued operations.
During the three months ended March 31, 2003, the Partnership sold 7
properties for a combined net sales price of $132,003,000. The Partnership
recognized a net gain on sale of these properties of $26,087,000.
20 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 2004
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Your partnership has both fixed and variable rate debt, as well as one
interest rate cap. All financial instruments were entered into for other
than trading purposes. A change in interest rates on the fixed rate
portion of the debt portfolio or the interest rate cap impacts the net
financial instrument position, but has no impact on interest incurred or
cash flows. A change in interest rates on the variable portion of the debt
portfolio impacts the interest incurred and cash flows, but does not
impact the net financial instrument position.
At March 31, 2004, your partnership had one loan which had a variable
interest rate. The loan which had an outstanding balance of $193.8 million
at March 31, 2004, was obtained in November 2003 and has a three-year
term. Interest on the outstanding balance accrues at a rate equal to, at
your partnership's option, either, (i) LIBOR rate (as defined) plus 450
basis points or (ii) the bank's prime rate plus 250 basis points. Your
partnership purchased an interest rate cap on the loan so that the
interest rate would be capped at 9.5%.
Your partnership elected to pay the loan based on the LIBOR rate. The
following table shows what the annual effect of a change in the LIBOR rate
(1.21% at March 31, 2004) will have on interest expense based upon
increases up to the cap of 9.5% all in interest rate.
Change in LIBOR
(In thousands)
------------------------------------------
1% 2% 3% 3.79%
-- -- -- -----
Additional interest expense $1,938 $3,875 $5,813 $7,343
Item 4. CONTROLS AND PROCEDURES
The Partnership's management, with the participation of the Partnership's
Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of the Partnership's disclosure controls and procedures (as
such term is defined in Rule 13a-15(e) under the Securities Exchange Act
of 1934, as amended) as of the end of the period covered by this report.
Based on such evaluation, the Partnership's Chief Executive Officer and
Chief Financial Officer have concluded that, as of the end of such period,
the Partnership's disclosure controls and procedures are effective.
There have not been any changes in the Partnership's internal controls
over financial reporting (as defined in Rule 13a-15(f) under the
Securities and Exchange Act of 1934, as amended) during the fiscal quarter
to which this report relates that have materially affected, or are
reasonably likely to materially affect, the Partnership's internal
controls over financial reporting.
21 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 2004
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Legal
In July 2002, an action was commenced in the Connecticut Superior Court
against, among others, the Partnership's general partner and various
affiliates of the Partnership's general partner. Plaintiffs are four
limited partners of three of the Newkirk Partnerships. The action alleges,
among other things, that the price paid to non-accredited investors in
connection with the Exchange was unfair and did not fairly compensate them
for the value of their partnership interests. The complaint also alleges
that the exchange values assigned in the Exchange to certain assets
contributed by affiliates of the Partnership's general partner were too
high in comparison to the exchange values assigned to the Newkirk
Partnerships, that the option arrangement relating to the Partnership's
potential acquisition in the future of the T-2 Certificate, which
represents an interest in a grantor trust, the mortgage assets of which
consist of contract rights secured by the Partnership's real properties as
well as other properties owned by other partnerships that are controlled
by affiliates of the Partnership's general partner, was unfair to limited
partners and that the disclosure document used in connection with the
Exchange contained various misrepresentations and/or omissions of material
facts. The complaint seeks to have the action classified as a class action
as well as compensatory and punitive damages in an unspecified amount. The
defendants have denied and continue to deny the allegations of the
complaint. In order to avoid the expenses, distraction, and uncertainties
of litigation, the defendants entered into a settlement agreement dated
December 31, 2003 to settle the litigation, which settlement agreement was
subject to court approval. On April 16, 2004, after notice to the
purported class members and a hearing on whether to approve the
settlement, the Court approved the settlement, the payment of plaintiffs'
attorneys' fees and costs from the settlement proceeds, payment of
incentive fees to certain named plaintiffs from the settlement proceeds,
and a plan of allocation of the settlement proceeds submitted by
plaintiffs' counsel. The settlement provides for the following material
terms: (i) the Newkirk Group will convey to unitholders of the Newkirk
Partnerships who are unaffiliated with the general partner and who
received limited partnership units in the Exchange, units in the
Partnership equal to 1% of the outstanding units; (ii) the Partnership
will pay $1.5 million to an escrow agent for the benefit of unaffiliated
unitholders; and (iii) the Partnership will pay $2.0 million to an escrow
agent for the benefit of unitholders of the Newkirk Partnerships who were
entitled to receive cash in the Exchange. In addition, the Partnership, in
order to facilitate the settlement, entered into an agreement with T-Two
Partners and its equityholders pursuant to which the Partnership has the
right to acquire substantially all of the assets of T-Two Partners or a
100% ownership interest in T-Two Partners at any time between November 24,
2006 and November 24, 2009. The Partnership accrued $3.5 million with
respect to this matter, which is included in general and administrative
expense in the consolidated statement of operations for the year ended
December 31, 2003.
On December 31, 2002, a derivative action was commenced in the Dallas
County Texas District Court by a limited partner of Eastgar Associates,
L.P. ("Eastgar") against, among others, the general partners of Eastgar
and affiliates of the Newkirk Partnerships. The Partnership owns a 60.5%
limited partnership interest in Eastgar and also controls the general
partner of that partnership. The complaint alleges that the defendants
have charged Eastgar excessive management fees and have unfairly prevented
Eastgar from prepaying and refinancing its mortgage indebtedness. The
22 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 2004
PART II - OTHER INFORMATION
(Continued)
Item 1. LEGAL PROCEEDINGS (Continued)
complaint seeks compensatory and punitive damages in an unspecified
amount, attorneys' fees and expenses, an accounting, and a declaration of
the parties' future rights and obligations regarding management fees and
the refinancing of mortgage indebtedness. The defendants have denied and
continue to deny the allegations of the complaint. In order to avoid the
expenses, distraction and uncertainties of litigation, the defendants
entered into an agreement to settle the litigation for a $137,500 payment
by the defendants and to charge an asset management fee of $35,000 per
year, adjusted for changes in the Consumer Price Index and as may be
adjusted for extraordinary circumstances by Eastgar's general partner.
After payment of court-approved attorneys' fees and expenses, the
remaining balance would be distributed to Eastgar's limited partners other
than the Partnership or its affiliates. The settlement also sets the
management fees to be charged to Eastgar, subject to any changes that
Eastgar may approve in the future consistent with its fiduciary duty. The
settlement has been, as required, approved by the trial court after notice
to the limited partners of Eastgar. The Partnership accrued $137,500 with
respect to this matter, which is included in general and administrative
expense in the consolidated statement of operations for the year ended
December 31, 2003.
23 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 2004
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibits required by Item 601 of Regulation S-K are filed herewith
or incorporated herein by reference and are listed in the attached
Exhibit Index.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the period ended March 31,
2004.
24 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 2004
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE NEWKIRK MASTER LIMITED PARTNERSHIP
BY: MLP GP LLC
General Partner
BY: NEWKIRK MLP CORP
Manager
BY: /s/ Michael L. Ashner
------------------------------
Michael L. Ashner
Chief Executive Officer
BY: /s/ Thomas C. Staples
------------------------------
Thomas C. Staples
Chief Financial Officer
Dated: May 17, 2004
25 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 2004
Exhibit Index
Exhibit Description
- ------- -----------
2.1 Agreement and Plan of Merger between the Newkirk Master Limited
Partnership and each of the Merger Partnerships set forth on
Schedule A, dated December 6, 2001 (incorporated by reference to
exhibit 2.1 of the Partnership's Form 10 filed April 30, 2003).
2.2 Assignment and Assumption Agreement by and between Newkirk Stock
LLC, The Newkirk Master Limited Partnership, Newkirk NL Holdings
LLC and VNK Corp. dated as of December 26, 2001 (incorporated by
reference to exhibit 2.2 of the Partnership's Form 10 filed April
30, 2003).
2.3 Assignment and Assumption Agreement by and between Newkirk
Eastgar LLC, Newkirk Partner Interest LLC, The Newkirk Master
Limited Partnership and Newkirk MLP Unit LLC dated as of December
26, 2001 (incorporated by reference to exhibit 2.3 of the
Partnership's Form 10 filed April 30, 2003).
2.4 Assignment and Assumption Agreement by and between Vornado Realty
L.P., Vornado Newkirk LLC, The Newkirk Master Limited
Partnership, and Newkirk MLP Unit LLC, dated as of December 26,
2001 (incorporated by reference to exhibit 2.4 of the
Partnership's Form 10 filed April 30, 2003).
2.5 Assignment and Assumption Agreement between Newkirk RE Associates
LLC, The Newkirk Master Limited Partnership, Newkirk RE Holdings
and Vornado Newkirk LLC dated as of December 26, 2001
(incorporated by reference to exhibit 2.5 of the Partnership's
Form 10 filed April 30, 2003).
2.6 Assignment and Assumption Agreement by and between Newkirk
Associates LLC, The Newkirk Master Limited Partnership, Newkirk
NL Holdings LLC and Vornado Newkirk LLC dated as of December 26,
2001 (incorporated by reference to exhibit 2.6 of the
Partnership's Form 10 filed April 30, 2003).
2.7 Agreement and Plan of Merger by and between The Newkirk Master
Limited Partnership, Lanmar Associates Limited Partnership and
Newkirk Lanmar L.P., dated as of December 6, 2001 (incorporated
by reference to exhibit 2.7 of the Partnership's Form 10 filed
April 30, 2003).
3. Certificate of Limited Partnership of the Newkirk Master Limited
Partnership (incorporated by reference to exhibit 3 of the
Partnership's Form 10 filed April 30, 2003).
4.1 Agreement of Limited Partnership of The Newkirk Master Limited
Partnership, by and among MLP GP LLC, Newkirk Manager Corp. and
all other persons who shall, pursuant to the Exchange or
otherwise become limited partners of the Partnership, dated as of
October 23, 2001 (incorporated by reference to exhibit 4.1 of the
Partnership's Form 10 filed April 30, 2003).
26 of 27
THE NEWKIRK MASTER LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 2004
Exhibit Index
(Continued)
Exhibit Description
- ------- -----------
4.2 Additional provisions incorporated by reference into the
Agreement of Limited Partnership of the Newkirk Master Limited
Partnership (incorporated by reference to exhibit 4.2 of the
Partnership's Form 10 filed April 30, 2003).
4.3 Limited Liability Agreement of MLP GP LLC (incorporated by
reference to exhibit 4.3 of the Partnership's Form 10 filed April
30, 2003).
31.1 Chief Executive Officer's Certificate, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
31.2 Chief Financial Officer's Certificate, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
32 Certificate of Chief Executive Officer and Chief Financial
Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
27 of 27