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 September 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
September 30, December 31,
Assets 1995 1994
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 (1,934,144) (2,430,394)
1,875,404 2,517,602
Cash 985,052 3,128,790
Rent receivable 75,699 99,980
Settlement escrow receivable -- 95,260
Total Assets $ 2,936,155 $ 5,841,632
Liabilities and Partners' Capital
Liabilities:
Accounts payable and
accrued expenses $ 159,568 $ 250,273
Due to affiliates 2,600 1,749
Distributions payable 192,056 2,418,232
Total Liabilities 354,224 2,670,254
Partners' Capital (Deficit):
General Partner (85,691) (88,437)
Limited Partners
(15,000 units outstanding) 2,667,622 3,259,815
Total Partners' Capital 2,581,931 3,171,378
Total Liabilities and
Partners' Capital $ 2,936,155 $ 5,841,632
Statement of Partners' Capital (Deficit)
For the nine months ended September 30, 1995
Limited General
Partners Partner Total
Balance at December 31, 1994 $ 3,259,815 $ (88,437) $ 3,171,378
Net income 1,679,608 40,415 1,720,023
Distributions (2,271,801) (37,669) (2,309,470)
Balance at September 30, 1995 $ 2,667,622 $ (85,691) $ 2,581,931
Statements of Operations
Three months ended Nine months ended
September 30, September 30,
Income 1995 1994 1995 1994
Rental income $ 258,075 $ 468,499 $ 775,155 $ 1,432,175
Interest income 13,843 14,513 61,458 20,648
Other income 555 480 1,530 2,113
Total Income 272,473 483,492 838,143 1,454,936
Expenses
Depreciation 27,635 54,741 90,687 190,959
Ground lease rent 28,229 43,523 84,686 143,747
Management fee 22,985 42,608 69,048 128,952
General and administrative 70,392 76,690 126,714 182,241
Total Expenses 149,241 217,562 371,135 645,899
Income from operations 123,232 265,930 467,008 809,037
Other Income
Gains on sales of properties -- 783,667 1,253,015 783,667
Net Income $ 123,232 $ 1,049,597 $ 1,720,023 $ 1,592,704
Net Income Allocated:
To the General Partner $ 7,544 $ 23,871 $ 40,415 $ 57,837
To the Limited Partners 115,688 1,025,726 1,679,608 1,534,867
$ 123,232 $ 1,049,597 $ 1,720,023 $ 1,592,704
Per limited partnership
unit (15,000
outstanding) $ 7.71 $ 68.38 $ 111.97 $ 102.32
Statements of Cash Flows
For the nine months ended September 30, 1995 and 1994
Cash Flows from Operating Activities: 1995 1994
Net income $ 1,720,023 $ 1,592,704
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 90,687 190,959
Gains on sales of properties (1,253,015) (783,667)
Increase (decrease) in cash arising
from changes in operating assets
and liabilities:
Rent receivable 24,281 (39,371)
Settlement escrow 95,260 --
Accounts payable and accrued
expenses (90,705) 88,350
Due to affiliates 851 (2,353)
Net cash provided by operating activities 587,382 1,046,622
Cash Flows from Investing Activities:
Proceeds from sales of properties 1,804,526 2,116,218
Net cash provided by investing activities 1,804,526 2,116,218
Cash Flows from Financing Activities:
Cash distributions paid (4,535,646) (1,071,590)
Net cash used for financing activities (4,535,646) (1,071,590)
Net increase (decrease) in cash (2,143,738) 2,091,250
Cash at beginning of period 3,128,790 520,896
Cash at end of period $ 985,052 $ 2,612,146
<PAGE>
Notes to the Financial Statements
These unaudited interim financial statements should be read in conjunction with
Burger King Limited Partnership I's (the "Partnership") 1994 annual audited
financial statements within Form 10-K.
These unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of September 30, 1995 and the results of operations for the three
and nine-month periods ended September 30, 1995 and 1994, cash flows for the
nine-month periods ended September 30, 1995 and 1994 and the statement of
changes in partners' capital (deficit) for the nine-month period ended
September 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:
Dates Adjusted Net Gains
of Selling Book on
Stores Sales Prices* Values Sales
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 prices of the properties less legal costs related to the
sales of the properties.
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 restaurant properties located in
Greenfield, Wisconsin (the "Greenfield Property"). The WDNR has indicated that
under Wisconsin state law, the Partnership is responsible for remediating the
site. 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. To date, the Partnership has not received a response from the WDNR
to the proposal. Until the WDNR approves the Clean-up Standards and the costs
of the remediation can be assessed, it is extremely difficult to move forward
with the sale of the Partnership's remaining 10 restaurant properties (the
"Properties"). Given the amount of time the WDNR is taking to review the
Partnership's proposal, BK I Realty Inc. (the "General Partner") does not
expect that the sale of the Properties will be concluded during 1995. In
accordance with the partnership agreement dated December 14, 1981 (the
"Partnership Agreement"), the Partnership has set aside $300,000 from net cash
flow from operations to fund potential environmental remediation costs in
connection with the Greenfield Property. 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 I, Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Liquidity and Capital Resources
At September 30, 1995, the Partnership had a cash balance of $985,052 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 of the Partnership on
January 30, 1995. The Partnership's cash balance at September 30, 1995
consisted primarily of cash flow from operations for the third quarter of 1995
and a reserve established to fund potential environmental remediation costs
with respect to the Greenfield Property.
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 is responsible for
remediating the site. On May 26, 1995, the Partnership proposed site-specific
soil Clean-up Standards on the Greenfield Property for the WDNR's approval. To
date, the Partnership has not received a response from the WDNR to the
proposal. Until the WDNR approves the Clean-up Standards and the costs of the
remediation can be assessed, it is extremely difficult to move forward with the
sale of the Properties. Given the amount of time the WDNR is taking to review
the Partnership's proposal, the General Partner does not expect that the sale
of the Properties will be concluded during 1995. In accordance with the
Partnership Agreement, the Partnership has set aside $300,000 from net cash
flow from operations to fund potential environmental remediation costs in
connection with the Greenfield Property. 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. 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 the partners of the Partnership in accordance with the
terms of the Partnership Agreement.
Rent receivable decreased from $99,980 at December 31, 1994 to $75,699 at
September 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 $159,568 at September 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 September 30, 1995 were $192,056, of which $179,589
was paid on October 30, 1995. The unpaid portion of $12,467 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 nine-month periods ended
September 30, 1995 of $123,232 and $1,720,023, respectively, compared to
$1,049,597 and $1,592,704, respectively, for the corresponding periods in 1994.
The $926,365 decrease for the three-month period ended September 30, 1995
compared to the same period in 1994 is primarily attributable to the absence of
gains on sales of properties in the third quarter of 1995, as compared to gains
on the sales of six properties in the third quarter of 1994 totalling $783,667.
Also contributing to the decline in net income was a decrease in rental income
as a result of the Partnership owning fewer properties during the 1995 period.
The $127,319 increase for the nine-month period ended September 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, as
compared to gains on the sales of six properties totalling $783,667 during the
third quarter in 1994. This was partially offset by a decrease in rental
income.
Rental income for the three and nine-month periods ended September 30, 1995 was
$258,075 and $775,155, respectively, compared to $468,499 and $1,432,175,
respectively, for the corresponding periods in 1994. The decreases are due to
the fact that there were fewer stores available to pay rent as a result of the
sales of 10 properties during the second half of 1994 and three properties in
the first quarter of 1995.
Interest income for the three and nine-month periods ended September 30, 1995
totalled $13,843 and $61,458, respectively, compared to $14,513 and $20,648,
respectively, for the corresponding periods in 1994. The increase for the
nine-month period is due to higher interest rates and a larger invested cash
balance as a result of proceeds received from the sales of properties during
1995.
Depreciation, ground lease rent and management fees all decreased for the three
and nine-month periods ended September 30, 1995 compared to the corresponding
periods in 1994, primarily due to the sales of the 10 properties in the second
half of 1994 and three properties in the first quarter of 1995.
General and administrative expenses for the three and nine months ended
September 30, 1995 totalled $70,392 and $126,714, respectively, compared to
$76,690 and $182,241, 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 nine months of 1995.<PAGE>
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K - No reports on Form 8-K
were filed during the quarter ended September
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: November 14, 1995 BY: /s/Rocco F. Andriola
Name: Rocco F. Andriola
Title: Director, President and
Chief Financial Officer
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 985,052
<SECURITIES> 000
<RECEIVABLES> 75,699
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 3,809,548
<DEPRECIATION> (1,934,144)
<TOTAL-ASSETS> 2,936,155
<CURRENT-LIABILITIES> 354,224
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 2,581,931
<TOTAL-LIABILITY-AND-EQUITY> 2,936,155
<SALES> 000
<TOTAL-REVENUES> 2,091,158
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 371,135
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 1,720,023
<INCOME-TAX> 000
<INCOME-CONTINUING> 1,720,023
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 1,720,023
<EPS-PRIMARY> 111.97
<EPS-DILUTED> 000
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