East Providence, Rhode Island: Capital Properties, Inc. (OTCQX: CPTP) reported net income of
$2,163,000 and $1,430,000 for the years ended December 31, 2015 and 2014, respectively. Based
upon 6,599,912 shares outstanding, the basic income per common share for the same periods was
$.33 and $.22, respectively. Net income for 2015 included $163,000, or approximately $0.02 per
common share, due to a reduction in the Company’s deferred tax liability arising from 2014
legislation cutting the Rhode Island corporate income tax from 9% to 7% which became effective
on January 1, 2015. Under United States generally accepted accounting principles, the reduction
should have been reported in 2014. The Company has concluded that the understatement of 2014
net income, tax rate and shareholders’ equity was not material.
Leasing revenues for 2015 increased $320,000 from 2014 due to scheduled rent increases under
long-term land leases and increased rentals under short-term leases, offset in part by a decrease in
percentage rent under the Company’s lease with Lamar Outdoor Advertising, LLC. Leasing
expense for 2015 increased $15,000 from 2014 due to an increase in repairs and maintenance at the
Steeple Street Building.
Petroleum storage facility revenues for 2015 increased $457,000 due to Sprague Operating
Resources, LLC leasing the entire terminal for a full year as opposed to eight months in 2014.
Under a lease that terminated on April 30, 2014, the Company leased to Atlantic Trading &
Marketing, Inc. a portion of the storage capacity at the petroleum storage facility. Petroleum
storage facility expense for 2015 decreased $163,000 due to a reduction in insurance, professional
fees and depreciation expense resulting from certain assets becoming fully depreciated in 2015,
offset in part by an increase in payroll and related costs.
General and administrative expenses in 2015 increased $31,000 from 2014 due to an increase in
payroll and related costs.
For the years ended December 31, 2015 and 2014, bank loan interest expense was $113,000 and
$164,000, respectively. Interest paid on the bank loan was lower due to principal prepayments in
2015. The Company paid the bank loan in full in November 2015, resulting in the remaining
deferred financing fees of $49,000 being written off and included in interest expense in 2015.
The interest expense on the dividend notes remained at the same level ($589,000) in both years.