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, 1996
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 I.R.S. Employer
of Incorporation or Organization Identification No.
3 World Financial Center, 29th Floor,
New York, NY Attn: Andre Anderson 10285-2900
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 At June 30, At December 31,
1996 1995
Assets
Real estate, at cost:
Land $1,113,406 $1,113,406
Buildings 2,210,836 2,210,836
Fixtures and equipment 485,306 485,306
3,809,548 3,809,548
Less accumulated depreciation (2,017,051) (1,961,780)
1,792,497 1,847,768
Cash and cash equivalents 975,115 973,641
Rent receivable 110,460 65,023
Total Assets $2,878,072 $2,886,432
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 122,899 $ 138,118
Due to affiliates 1,550 1,300
Distributions payable 182,119 180,645
Total liabilities 306,568 320,063
Partners' Capital (Deficit):
General Partner (82,067) (85,088)
Limited Partners (15,000 interests outstanding) 2,653,571 2,651,457
Total Partners' capital 2,571,504 2,566,369
Total Liabilities and Partners' Capital $2,878,072 $2,886,432
Statement of Partners' Capital (Deficit)
For the six months ended June 30, 1996
Limited General
Partners Partner Total
Balance at December 31, 1995 $2,651,457 $(85,088) $2,566,369
Net income 341,554 20,886 362,440
Distributions to partners (339,440) (17,865) (357,305)
Balance at June 30, 1996 $2,653,571 $(82,067) $2,571,504
Statements of Operations
Three months Six months
ended June 30, ended June 30,
1996 1995 1996 1995
Income
Rental income $295,674 $253,707 $525,351 $517,080
Interest income 8,322 20,906 21,158 47,615
Miscellaneous income 360 525 630 975
Total income 304,356 275,138 547,139 565,670
Expenses
Depreciation $ 27,636 $ 27,636 $ 55,271 $ 63,052
Ground lease rent 28,228 28,228 56,457 56,457
Management fee 26,744 22,548 46,889 46,063
General and administrative 13,335 29,287 26,082 56,322
Total expenses 95,943 107,699 184,699 221,894
Income from operations 208,413 167,439 362,440 343,776
Other Income
Gain on sales of properties --- --- --- 1,253,015
Net Income $208,413 $167,439 $362,440 $1,596,791
Net Income Allocated:
To the General Partner $ 11,803 $ 9,753 $ 20,886 $ 32,871
To the Limited Partners 196,610 157,686 341,554 1,563,920
$208,413 $167,439 $362,440 $1,596,791
Per limited partnership interest
(15,000 outstanding) $13.11 $10.51 $22.77 $104.26
Statements of Cash Flows
For the six months ended June 30, 1996 1995
Cash Flows From Operating Activities
Net income $362,440 $1,596,791
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 55,271 63,052
Gain on sale of properties --- (1,253,015)
Increase (decrease) in cash arising from
changes in operating assets and liabilities
Settlement escrow --- 95,260
Rent receivable (45,437) 12,969
Accounts payable and accrued expenses (15,219) (115,198)
Due to affiliates 250 451
Net cash provided by operating activities 357,305 400,310
Cash Flows From Investing Activities
Proceeds from sales of properties --- 1,804,526
Net cash provided by investing activities --- 1,804,526
Cash Flows From Financing Activities
Cash distributions to partners (355,831) (4,464,426)
Net cash used for financing activities (355,831) (4,464,426)
Net increase (decrease) in cash 1,474 (2,259,590)
Cash and cash equivalents, beginning of period 973,641 3,128,790
Cash and cash equivalents, end of period $975,115 $ 869,200
Notes to the Financial Statements
The unaudited financial statements should be read in conjunction with Burger
King Limited Partnership I's (the "Partnership") 1995 annual 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, 1996, the results of operations for the three and six
months ended June 30, 1996 and 1995, the statement of partners' capital
(deficit) for the six months ended June 30, 1996 and the statements of cash
flows for the six months ended June 30, 1996 and 1995. Results of operations
for the three and six months ended June 30, 1996 are not necessarily indicative
of the results to be expected for the full year.
No significant events have occurred subsequent to fiscal year 1995 which
require disclosure in this interim report per Regulation S-X, Rule 10-01,
Paragraph (a)(5).
Part I, Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
At June 30, 1996, the Partnership had a cash balance of $975,115, largely
unchanged from $973,641 at December 31, 1995. The Partnership's cash balance
at June 30, 1996 consisted primarily of the Partnership's working capital, cash
flow from operations for the second quarter of 1996 and a reserve established
to fund potential environment remediation costs with respect to one of the
Partnership's properties located in Greenfield, Wisconsin (the "Greenfield
Property"). At June 30, 1996, the Partnership owned 10 restaurant properties
(hereinafter referred to individually as a "Property" and, collectively, as the
"Properties").
On September 23, 1994, the Partnership notified the Wisconsin Department of
Natural Resources (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 clean-up standards
("Clean-up Standards") for the Greenfield Property to the WDNR. The WDNR
recently requested additional information which will require the Partnership to
complete additional modeling efforts in order to substantiate the site-specific
clean-up standards originally proposed by the Partnership. In June 1996, the
Partnership submitted a proposal to the WDNR for the completion of this
modeling and is currently awaiting its response. Once the remediation issue is
resolved and costs associated with an approved remediation plan have been
determined, the General Partner believes that it will be in a better position
to attempt to sell the remaining Properties and distribute the net proceeds
from the sale in accordance with the terms of the partnership agreement dated
December 14, 1981 (the "Partnership Agreement").
In accordance with the terms of the Partnership Agreement, the Partnership has
set aside $300,000 of cash flow from operations to fund potential environment
remediation costs in connection with the Greenfield Property. The General
Partner believes that the cost of the environmental remediation should be
recovered from the proceeds 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 increased from $65,023 at December 31, 1995 to $110,460 at June
30, 1996. The increase is primarily attributable to an increase in percentage
rent as a result of an increase in sales at the Properties for the second
quarter of 1996.
Accounts payable and accrued expenses decreased from $138,118 at December 31,
1995 to $122,899 at June 30, 1996. The decrease is primarily attributable to
the payment of the Partnership's 1995 annual audit and tax fees.
Distributions payable at June 30, 1996 were $182,119, of which $167,827 was
paid on July 31, 1996. The unpaid portion of $14,292 represents an amount equal
to 4% of the quarterly distributions 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 on the basis of 95% to the limited
partners of the Partnership (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"). The Limited Partners are entitled to
receive a priority return equal to 12.5% per annum on their remaining invested
capital. To the extent the Limited Partners do not receive an annual return of
12.5%, 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 of $208,413 and $362,440 for the three and
six months ended June 30, 1996, respectively, compared to $167,439 and
$1,596,791 for the corresponding periods in 1995. The increase in net income
for the second quarter of 1996 is primarily attributable to an increase in
rental income and, to a lesser extent, a decrease in general and administrative
expenses. The decrease in net income for the six-month period ended June 30,
1996 is primarily due to a gain on sales of three Properties recognized by the
Partnership during the first quarter of 1995 totaling $1,253,015. Excluding
the gain on sales of Properties, the Partnership generated net income totaling
$343,776 during the first six months of 1995.
Rental income for the three- and six-month periods ended June 30, 1996 totaled
$295,674 and $525,351, respectively, compared to $253,707 and $517,080 for the
corresponding periods in 1995. The increases in rental income for both periods
are primarily attributable to increases in food and beverage sales at the
Properties which resulted in an increase in percentage rental income. Rental
income for the six-month period ended June 30, 1996 increased from the
corresponding period in 1995 despite the fact that there were fewer stores
available to pay rent during most of the first quarter of 1996 as compared with
the first quarter of 1995 as a result of the sales of three Properties in March
1995.
Interest income for the three- and six-month periods ended June 30, 1996
totaled $8,322 and $21,158, respectively, compared to $20,906 and $47,615 for
the corresponding periods in 1995. The decreases in interest income for both
periods are primarily attributable to a decrease in the cash invested by the
Partnership in the first and second quarters of 1996. During the first and
second quarters of 1995, the Partnership received interest income on the net
proceeds from the sales of four Properties in December 1994 and three
Properties in March 1995. These proceeds were subsequently distributed to the
partners on April 28, 1995.
Depreciation expense for the three- and six-month periods ended June 30, 1996
totaled $27,636 and $55,271, respectively, compared to $27,636 and $63,052 for
the corresponding periods in 1995. The decrease in depreciation expense for the
six-month period ended June 30, 1996 is due to the sale of three Properties in
March 1995.
General and administrative expenses totaled $13,335 and $26,082 for the three-
and six-month periods ended June 30, 1996, respectively, compared to $29,287
and $56,322 for the corresponding periods in 1995. The decreases in general
and administrative expenses are primarily attributable to a decrease in
environmental consulting costs and other professional fees incurred by the
Partnership in connection with the Greenfield Property.
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 June 30, 1996
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 13, 1996 BY: /s/ Rocco F. Andriola
Name: Rocco F. Andriola
President, Director and
Chief Financial Officer
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Jun-30-1996
<CASH> 975,115
<SECURITIES> 0
<RECEIVABLES> 110,460
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,085,575
<PP&E> 3,809,548
<DEPRECIATION> 2,017,051
<TOTAL-ASSETS> 2,878,072
<CURRENT-LIABILITIES> 306,568
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,571,504
<TOTAL-LIABILITY-AND-EQUITY> 2,878,072
<SALES> 0
<TOTAL-REVENUES> 547,139
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 184,699
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 362,440
<INCOME-TAX> 0
<INCOME-CONTINUING> 362,440
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 362,440
<EPS-PRIMARY> 22.77
<EPS-DILUTED> 0
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