Capital Properties, Inc. (Amex: CPI) reported net income of $1,385,000 for the year ended December 31, 2007, resulting in a basic income per common share of $.42. For the year ended December 31, 2006, the Company had reported net income of $1,319,000, or $.40 per share.
Leasing revenues for 2007 increased $360,000 from 2006. Effective June 1, 2006, the Company entered into an Amended and Restated Agreement of Lease with Lamar Outdoor Advertising, which changed the contractual rental payments thereby extending the date on which the actual revenues would exceed revenues on a straight-line basis to 2022. As a result, the Company concluded that it should not presently record the receivable resulting from reporting leasing revenue on a straight-line basis. Prior to June 1, 2006, the Company had been recognizing revenue on this lease on a straight-line basis and, accordingly, recorded a reduction in leasing revenue of $187,000 for the year ended December 31, 2006, which amounts in part related to periods prior to 2006.
Therefore, as compared to 2006, leasing revenues in 2007 increased in part because the Company is no longer recognizing revenue on this lease on the straight-line basis. The increase in leasing revenue for 2007 is also due to the $100,000 received by the Company for settlement of a dispute with a former tenant and increases in rentals under the Company's short-term leases, including rentals from the building acquired by the Company in November 2007. Leasing expense decreased $97,000 due principally to lower real property taxes resulting from an existing tenant's assumption of all real property taxes on its parcel as of January 1, 2007.
Petroleum storage facility revenues for 2007 increased $527,000 from 2006 due principally to rent for a new 175,000 barrel tank effective August 2006, the annual cost-of-living adjustment effective May 1, 2007, and rental resulting from an increase in real property taxes reimbursed by the tenant as required by the Company's lease. Petroleum storage facility expenses increased $653,000 from 2006 due principally to payroll and related costs resulting from the hiring of a new employee and the payment of a bonus to the retiring president of the Facility, higher depreciation related to the new tank built in 2006, higher real estate taxes resulting principally from an increased assessment on the Facility (which amount was substantially reimbursed by the tenant), and higher legal fees associated with a Wilkesbarre Pier litigation.
General and administrative expenses increased $258,000 from 2006 due principally to payroll and related costs resulting from the payment of a bonus to the retiring president of the Company and higher professional fees in connection with the Company's filing status changing from a small business issuer to a non-accelerated filer for the year ended December 31, 2006, and the costs incurred in complying with Section 404(a) of the Sarbanes-Oxley Act of 2002. -- Capital Properties, Inc.
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