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 June 30, 1995
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: 0-11058
BURGER KING LIMITED PARTNERSHIP I
(Exact name of registrant as specified in its charter)
New York 13-3110947
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) identification No.)
3 World Financial Center, 29th Floor, New York, NY
Attention: Andre Anderson 10285
(Address of principal executive offices) (Zip code)
(212) 526-3237
(Registrant's telephone number, including area code)
Indicate by check mark whether the 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
Balance Sheets
June 30, December 31,
1995 1994
Assets
Real estate at cost:
Land $ 1,113,406 $ 1,415,906
Buildings 2,210,836 2,896,441
Fixtures and equipment 485,306 635,649
--------- ---------
3,809,548 4,947,996
Less - accumulated depreciation (1,906,509) (2,430,394)
--------- ---------
1,903,039 2,517,602
Cash 869,200 3,128,790
Rent receivable 87,011 99,980
Settlement escrow receivable -- 95,260
--------- ---------
Total Assets $ 2,859,250 $ 5,841,632
========= =========
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 135,075 $ 250,273
Due to affiliates 2,200 1,749
Distributions payable 76,204 2,418,232
--------- ---------
Total Liabilities 213,479 2,670,254
--------- ---------
Partners' Capital (Deficit):
General Partner (83,882) (88,437)
Limited Partners (15,000 units outstanding) 2,729,653 3,259,815
--------- ---------
Total Partners' Capital 2,645,771 3,171,378
--------- ---------
Total Liabilities and Partners' Capital $ 2,859,250 $ 5,841,632
========= =========
Statement of Partners' Capital (Deficit)
For the six months ended June 30, 1995
Limited General
Partners Partner Total
Balance at December 31, 1994 $ 3,259,815 $ (88,437) $ 3,171,378
Net income 1,563,920 32,871 1,596,791
Distributions (2,094,082) (28,316) (2,122,398)
--------- --------- ---------
Balance at June 30, 1995 $ 2,729,653 $ (83,882) $ 2,645,771
========= ========= =========
`` Statements of Operations
Three months ended Six months ended
June 30, June 30,
Income 1995 1994 1995 1994
Rental income $ 253,707 $ 501,475 $ 517,080 $ 963,676
Interest income 20,906 2,944 47,615 6,135
Other income 525 540 975 1,633
-------- -------- -------- --------
Total Income 275,138 504,959 565,670 971,444
-------- -------- -------- --------
Expenses
Depreciation 27,636 68,109 63,052 136,218
Ground lease rent 28,228 50,112 56,457 100,224
Management fee 22,548 45,136 46,063 86,344
General and administrative 29,287 75,056 56,322 105,551
-------- -------- -------- --------
Total Expenses 107,699 238,413 221,894 428,337
-------- -------- -------- --------
Income from operations 167,439 266,546 343,776 543,107
Other Income
Gains on sales of properties -- -- 1,253,015 --
-------- -------- -------- --------
Net Income $ 167,439 $ 266,546 $1,596,791 $ 543,107
======== ======== ======== ========
Net Income Allocated:
To the General Partner $ 9,753 $ 16,732 $ 32,871 $ 33,966
To the Limited Partners 157,686 249,814 1,563,920 509,141
-------- -------- -------- --------
$ 167,439 $ 266,546 $1,596,791 $ 543,107
======== ======== ======== ========
Per limited partnership unit
(15,000 outstanding) $ 10.51 $ 16.65 $ 104.26 $ 33.94
Statements of Cash Flows
For the six months ended June 30, 1995 and 1994
1995 1994
Cash Flows from Operating Activities:
Net income $ 1,596,791 $ 543,107
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 63,052 136,218
Gain on sale of properties (1,253,015) --
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Rent receivable 12,969 (40,087)
Settlement escrow 95,260 --
Accounts payable and accrued expenses (115,198) 40,067
Due to affiliates 451 (1,750)
--------- ---------
Net cash provided by operating activities 400,310 677,555
--------- ---------
Cash Flows from Investing Activities:
Proceeds from sale of properties 1,804,526 --
--------- ---------
Net cash provided by investing activities 1,804,526 --
--------- ---------
Cash Flows from Financing Activities:
Cash distributions paid (4,464,426) (742,267)
--------- ---------
Net cash used for financing activities (4,464,426) (742,267)
Net decrease in cash (2,259,590) (64,712)
Cash at beginning of period 3,128,790 520,896
--------- ---------
Cash at end of period $ 869,200 $ 456,184
========= =========
Notes to the Financial Statements
The unaudited interim financial statements should be read in conjunction with
Burger King Limited Partnership I's (the "Partnership") annual 1994 audited
financial statements within Form 10-K.
The unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of June 30, 1995 and the results of operations for the three and
six months ended June 30, 1995 and 1994, cash flows for the six months ended
June 30, 1995 and 1994 and the statement of changes in partners' capital
(deficit) for the six months ended June 30, 1995. Results of operations for
the period are not necessarily indicative of the results to be expected for the
full year.
The following significant events have occurred subsequent to fiscal year 1994,
which require disclosure in this interim report per Regulation S-X, Rule 10-01,
Paragraph (a)(5).
A. During the first quarter of 1995, the Partnership sold three properties as
follows:
Date Adjusted Net Gain
of Selling Book on
Store Sale Price* Value Sale
Washington, NC 3/08/95 $ 619,944 $ 180,837 $ 439,107
Carlsbad, NM 3/31/95 728,684 240,175 488,509
Big Spring, TX 3/31/95 455,898 130,499 325,399
------- ------- -------
$1,804,526 $ 551,511 $1,253,015
========= ======= =========
* Purchase price of the property less estimated legal costs related to
the sale of the property.
B. On September 23, 1994, the Partnership notified the Wisconsin Department of
Natural Resources ("WDNR") that petroleum and chlorinated compounds were
discovered at one of the Partnership's properties located in Greenfield,
Wisconsin (the "Greenfield Property"). The WDNR has indicated that under
Wisconsin state law, the Partnership will be responsible for remediating the
site. The Partnership has obtained a preliminary cost estimate to remediate
the site from an environmental consulting firm. Based on this estimate and in
accordance with the terms of the Partnership Agreement, the Partnership set
aside $300,000 from the net cash flow from operations to fund the potential
environmental remediation costs. BK I Realty Inc. (the "General Partner")
currently anticipates that the cost of the environmental remediation should be
recovered from the proceeds to be received from the eventual sale of the
Greenfield Property.
Part 1, Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
- -------------------------------
At June 30, 1995, the Partnership had a cash balance of $869,200 compared to
$3,128,790 at December 31, 1994. The balance at December 31, 1994 consisted
primarily of net proceeds of $2,583,571 from the sale of four properties and
cash flow from operations for the fourth quarter of 1994. A distribution of
$2,418,232 from such funds was made to the partners on January 30, 1995. The
Partnership's cash balance at June 30, 1995 consisted primarily of a reserve
established to fund certain potential environmental remediation costs with
respect to the Greenfield Property and cash flow from operations for the second
quarter of 1995.
On September 23, 1994, the Partnership notified the WDNR that petroleum and
chlorinated compounds were discovered at the Greenfield Property. The WDNR
has indicated that under Wisconsin state law, the Partnership will be
responsible for remediating the site. The Partnership has obtained a
preliminary cost estimate to remediate the site from an environmental
consulting firm. Based on this estimate and in accordance with the
Partnership Agreement, the Partnership set aside $300,000 from net cash flow
from operations to fund the potential environmental remediation costs. On May
26, 1995, the Partnership proposed site-specific soil clean-up standards
("Clean-up Standards") on the Greenfield Property for the WDNR's approval.
Until the WDNR approves the Clean-up Standards and the related costs of the
remediation can be assessed, it is extremely difficult to move forward with
the sale of the Partnership's remaining 10 properties (the "Properties"). As
a result, there can be no assurance that the Properties will be sold during
1995. Until all of the Properties are sold, the Partnership will continue to
operate the Properties, and it is intended that cash flow from operations will
be distributed to partners in accordance with the terms of the partnership
agreement dated December 14, 1981 (the "Partnership Agreement"). Upon the
sale of all the Properties, net sales proceeds will be distributed to the
partners and the Partnership will then be dissolved in accordance with the
terms of the Partnership Agreement.
Rent receivable decreased from $99,980 at December 31, 1994 to $87,011 at June
30, 1995. The decrease is primarily attributable to a decrease in percentage
rent as a result of the sale of 10 properties during the second half of 1994
and, to a lesser extent, the sale of three properties during the first quarter
of 1995.
Accounts payable and accrued expenses decreased from $250,273 at December 31,
1994 to $135,075 at June 30, 1995. The decrease is primarily attributable to
legal fees incurred in connection with the sale of four properties during the
fourth quarter of 1994, and, to a lesser extent, timing of the payment of the
Partnership's annual audit and tax fees.
Distributions payable at June 30, 1995 were $76,204, of which $69,112 was paid
on August 1, 1995. The unpaid portion of $7,092 represents an amount equal to
4% of the quarterly distribution of net cash flow from operations which is
required to be retained pursuant to the terms of the Partnership Agreement.
Net cash flow from operations is distributed 95% to the limited partners and 1%
to the General Partner with the remaining 4% being retained by the Partnership
as a contingent reserve (the "Contingent Reserve"). To the extent the limited
partners do not receive an annual return of 12.5% of their remaining invested
capital, the Contingent Reserve is distributed to the limited partners with the
remainder, if any, distributed to the General Partner.
Results of Operations
- ---------------------
The Partnership generated net income for the three and six months ended June
30, 1995 of $167,439 and $1,596,791, respectively, compared to $266,546 and
$543,107 for the corresponding periods in 1994. The $99,107 decrease for the
three months ended June 30, 1995 compared to the same period in 1994 is
primarily attributable to a decrease in rental income as a result of the
Partnership owning fewer properties during the 1995 period. The $1,053,684
increase for the six months ended June 30, 1995 compared to the same period in
1994 is primarily due to gains on the sales of three properties during the
first quarter of 1995 which totalled $1,253,015, partially offset by a decrease
in rental income.
Rental income for the three and six months ended June 30, 1995 was $253,707 and
$517,080, respectively, compared to $501,475 and $963,676, respectively, for
the corresponding periods in 1994. The decreases are due to the sale of 10
properties during the third and fourth quarters of 1994 and three properties in
the first quarter of 1995.
Interest income increased for the three and six months ended June 30, 1995 to
$20,906 and $47,615, respectively, compared to $2,944 and $6,135, respectively,
for the corresponding periods in 1994. The increases are due to higher
interest rates and a larger invested cash balance during the 1995 periods as a
result of proceeds received from the sales of properties.
Depreciation, ground lease rent and management fees all decreased for the three
and six months ended June 30, 1995 compared to the corresponding periods in
1994, primarily due to the sale of the 10 properties in the second half of 1994
and the three properties in the first quarter of 1995.
General and administrative expenses for the three and six months ended June 30,
1995 totalled $29,287 and $56,322, respectively, compared to $75,056 and
$105,551, respectively, for the corresponding periods in 1994. The decreases
are primarily attributable to a decrease in legal fees incurred by the
Partnership during the first six months of 1995.
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - No reports on Form 8-K were filed during
the quarter ended June 30, 1995.
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, thereunto duly authorized.
BURGER KING LIMITED PARTNERSHIP I
BY: BK I REALTY INC.
General Partner
Date: August 11, 1995 BY: /s/Rocco Andriola
-----------------
Name: Rocco Andriola
Title: Director, President and
Chief Financial Officer
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 869,200
<SECURITIES> 000
<RECEIVABLES> 87,011
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 956,211
<PP&E> 3,809,548
<DEPRECIATION> (1,906,509)
<TOTAL-ASSETS> 2,859,250
<CURRENT-LIABILITIES> 213,479
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 2,645,771
<TOTAL-LIABILITY-AND-EQUITY> 2,859,250
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<TOTAL-REVENUES> 1,818,685
<CGS> 000
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<INCOME-TAX> 000
<INCOME-CONTINUING> 1,596,791
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 1,596,791
<EPS-PRIMARY> 104.26
<EPS-DILUTED> 000
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