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, 1997
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 Incorporation or Organization I.R.S. Employer 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,
1997 1996
Assets
Real estate held for sale $1,497,736 $1,497,736
Cash and cash equivalents 813,468 1,478,513
Rent and other receivable 99,584 76,042
Total Assets $2,410,788 $3,052,291
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 46,477 $ 36,025
Due to Burger King Corporation -- 14,152
Distributions payable 151,203 812,096
Total Liabilities 197,680 862,273
Partners' Capital (Deficit):
General Partner (87,668) (88,823)
Limited Partners (15,000 units outstanding) 2,300,776 2,278,841
Total Partners' Capital 2,213,108 2,190,018
Total Liabilities and Partners' Capital $2,410,788 $3,052,291
Statement of Partners' Capital (Deficit)
For the six months ended June 30, 1997
General Limited
Partner Partners Total
Balance at December 31, 1996 $(88,823) $2,278,841 $2,190,018
Net income 16,450 312,546 328,996
Distributions to partners (15,295) (290,611) (305,906)
Balance at June 30, 1997 $(87,668) $2,300,776 $2,213,108
Statements of Operations
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
Income
Rental income $258,109 $295,674 $473,919 $525,351
Interest income 10,974 8,322 24,107 21,158
Miscellaneous income 540 360 1,181 630
Total Income 269,623 304,356 499,207 547,139
Expenses
Ground lease rent 28,228 28,228 56,457 56,457
Management fee 22,988 26,744 41,746 46,889
Depreciation -- 27,636 -- 55,271
General and administrative 32,414 13,335 72,008 26,082
Total Expenses 83,630 95,943 170,211 184,699
Net Income $185,993 $208,413 $328,996 $362,440
Net Income Allocated:
To the General Partner $ 9,300 $11,803 $16,450 $20,886
To the Limited Partners 176,693 196,610 312,546 341,554
$185,993 $208,413 $328,996 $362,440
Per limited partnership interest
(15,000 outstanding) $11.78 $13.11 $20.84 $22.77
Statements of Cash Flows
For the six months ended June 30, 1997 1996
Cash Flows From Operating Activities
Net income $ 328,996 $ 362,440
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation -- 55,271
Increase (decrease) in cash arising from changes in
operating assets and liabilities:
Rent and other receivable (23,542) (45,437)
Accounts payable and accrued expenses 10,452 (14,969)
Due to Burger King Corporation (14,152) --
Net cash provided by operating activities 301,754 357,305
Cash Flows From Financing Activities
Cash distributions to partners (966,799) (355,831)
Net cash used for financing activities (966,799) (355,831)
Net increase (decrease) in cash and cash equivalents (665,045) 1,474
Cash and cash equivalents, beginning of period 1,478,513 973,641
Cash and cash equivalents, end of period $ 813,468 $ 975,115
Notes to the Financial Statements
The unaudited financial statements should be read in conjunction
with Burger King Limited Partnership I's (the "Partnership") 1996
annual audited financial statements within Form 10-K.
The unaudited financial statements include all normal and
recurring adjustments which are, in the opinion of management,
necessary to present a fair statement of financial position as of
June 30, 1997 and the results of operations for the three- and
six- month periods ended June 30, 1997 and 1996 and cash flows
for the six-month periods ended June 30, 1997 and 1996 and the
statement of partners' capital (deficit) for the six-month period
ended June 30, 1997. Results of operations for the period are
not necessarily indicative of the results to be expected for the
full year.
Reclassification. Certain prior year amounts have been
reclassified in order to conform to the current year's
presentation.
No significant events have occurred subsequent to fiscal year
1996, and no material contingencies exist which would 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, 1997, the Partnership had a cash and cash equivalents
balance of $813,468, compared to $1,478,513 at December 31, 1996.
The decrease is primarily attributable to the distribution made
on January 30, 1997 of the net proceeds received from the sale of
a restaurant property located in Wichita, Kansas, which were
previously included in the Partnership's cash balance at December
31, 1996. The Partnership's cash balance at June 30, 1997
consisted primarily of the Partnership's working capital, cash
flow from operations for the second quarter of 1997 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,
1997, the Partnership owned nine restaurant properties
(hereinafter referred to individually as a "Property" and,
collectively, as the "Properties").
BK I Realty Inc., the general partner of the Partnership (the
"General Partner") has had discussions with a number of
institutions and other third parties interested in purchasing the
Partnership's nine remaining Properties. However, the
environmental issue at the Greenfield Property has delayed the
Partnership's efforts to complete a sale of the remaining
Properties. The Partnership had previously proposed site-
specific, clean-up standards for the Greenfield Property to the
Wisconsin Department of Natural Resources ("WDNR"), whose
response has taken significantly longer than originally
anticipated. In light of this unanticipated lengthy delay, the
General Partner has begun marketing the Partnership's remaining
nine Properties for sale and has engaged the services of Jones
Lang Wootton, a nationally recognized real estate broker, to
assist the Partnership in its marketing efforts. Upon the sale
of the Properties, the General Partner intends to distribute the
net sales proceeds in accordance with the terms of the
partnership agreement dated December 14, 1981 (the "Partnership
Agreement"). While the General Partner is hopeful that a sale of
the Properties can be completed during 1997, there can be no
assurances that such efforts will ultimately be successful. As a
result of the Partnership's efforts to market the Properties for
sale, the Properties have been reclassified on the Partnership's
balance sheet as real estate held for sale.
The General Partner believes that the potential environmental
remediation costs associated with the Greenfield Property will
not exceed approximately $300,000 and, therefore, in accordance
with the Partnership Agreement, such amount has been set aside
from the Partnership's cash flow from operations to fund these
costs. If the proposed site-specific standards are approved by
the WDNR prior to the sale of the Greenfield Property, it is
expected that any of such reserves spent on the environmental
remediation should be recovered from the proceeds of the eventual
sale of the Greenfield Property. Therefore, any remediation
costs incurred prior to a sale of the Greenfield Property will be
capitalized and included in the carrying value of the Greenfield
Property. Alternatively, if the sale occurs prior to the receipt
of such approval, it is likely that any buyer will attribute a
discount to the value of the Greenfield Property in determining
an acceptable purchase price.
The General Partner believes that the Partnership will have
sufficient assets with which to pay any potential remediation
costs on the Greenfield Property. In the unlikely event that the
Partnership does not have sufficient assets with which to pay
such costs, the General Partner is unaware of any Federal or
State of Wisconsin environmental law imposing any personal
liability on the limited partners of the Partnership (the
"Unitholders") for their pro-rata share of the Partnership's
remediation costs. Therefore, except as otherwise provided for
in the Partnership Agreement, Unitholders may be liable for
Partnership obligations only to the extent of their respective
capital contributions.
Rent and other receivable increased from $76,042 at December 31,
1996 to $99,584 at June 30, 1997. The increase is primarily
attributable to the timing and remittance of rental payments.
Distributions payable at June 30, 1997 were $151,203, of which
$138,967 was paid on July 30, 1997. The unpaid portion of
$12,236 represents an amount equal to 4% of the quarterly
distributions of net cash flow from operations. Pursuant to the
terms of the Partnership Agreement, net cash flow from operations
is distributed on the basis of 95% to the Unitholders and 1% to
the General Partner with the remaining 4% being retained by the
Partnership as a contingent reserve (the "Contingent Reserve").
Unitholders are entitled to receive an annual return equal to
12.5% of their remaining invested capital. To the extent
Unitholders do not receive an annual return of 12.5%, the
Contingent Reserve is distributed to the Unitholders with the
remainder, if any, distributed to the General Partner.
Including the 1997 second quarter distribution of net cash flow
from operations which was paid to Unitholders on July 30, 1997 in
the amount of $9.17 per Unit, Unitholders have received total
cash distributions of $2,339.08 per original $1,000 Unit since
the inception of the Partnership. This total includes
distributions of net cash flow from operations in the amount of
$1,629.72 per Unit and distributions of net proceeds from the
sales of Properties in the amount of $709.36 per Unit.
Distributions of net sales proceeds represent returns of capital
which have reduced the size of each Unit from $1,000 to $290.64.
Results of Operations
The Partnership generated net income of $185,993 and $328,996 for
the three- and six-month periods ended June 30, 1997,
respectively, compared to $208,413 and $362,440 for the
corresponding periods in 1996. The decrease in net income for
both of the 1997 periods is primarily attributable to a decrease
in rental income and an increase in general and administrative
expenses. The decreases were partially offset by a lower
depreciation expense.
Rental income for the three- and six-month periods ended June 30,
1997 totaled $258,109 and $473,919, respectively, compared to
$295,674 and $525,351 for the corresponding periods in 1996. The
decreases for both periods are primarily attributable to the
decrease in sales at the Properties during the 1997 period which
was primarily the result of the sale of a Property located in
Wichita, Kansas in the fourth quarter of 1996.
Interest income for the three- and six-month periods ended June
30, 1997 totaled $10,974 and $24,107, respectively, compared to
$8,322 and $21,158 for the corresponding periods in 1996. The
increase in interest income for both periods is primarily
attributable to a higher cash balance invested by the Partnership
in the first and second quarters of 1997.
No depreciation expense was recorded for the three- or six-month
periods ended June 30, 1997, compared to $27,636 and $55,271 for
the corresponding periods in 1996. Effective December 31, 1996,
the Partnership ceased recording depreciation expense as a result
of the classification of the Properties as real estate held for
sale in accordance with Statements of Financial Accounting
Standards No. 121.
General and administrative expenses totaled $32,414 and $72,008
for the three- and six-month periods ended June 30, 1997,
respectively, compared to $13,335 and $26,082 for the
corresponding periods in 1996. During the 1997 periods, certain
expenses incurred by an unaffiliated third-party service provider
in servicing the Partnership, which were voluntarily absorbed by
affiliates of the General Partner in prior periods, were
reimbursable to the General Partner and its affiliates.
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, 1997.
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 14, 1997 BY: /s/Kenneth F. Boyle
Name: Kenneth F. Boyle
Title: President, Director and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Jun-30-1997
<CASH> 813,468
<SECURITIES> 000
<RECEIVABLES> 99,584
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 913,052
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 2,410,788
<CURRENT-LIABILITIES> 197,680
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 2,300,776
<TOTAL-LIABILITY-AND-EQUITY> 2,410,788
<SALES> 000
<TOTAL-REVENUES> 473,919
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 170,211
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 328,996
<INCOME-TAX> 000
<INCOME-CONTINUING> 328,996
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 328,996
<EPS-PRIMARY> 20.84
<EPS-DILUTED> 20.84
</TABLE>
