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 March 31, 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 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 March 31, At December 31,
1997 1996
Assets
Real estate held for sale $1,497,736 $1,497,736
Cash and cash equivalents 823,414 1,478,513
Rent receivable 63,048 76,042
Total Assets $2,384,198 $3,052,291
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 51,177 $ 36,025
Due to Burger King Corporation --- 14,152
Distributions payable 161,149 812,096
Total Liabilities 212,326 862,273
Partners' Capital (Deficit):
General Partner (89,730) (88,823)
Limited Partners (15,000 units outstanding) 2,261,602 2,278,841
Total Partners' Capital 2,171,872 2,190,018
Total Liabilities and Partners' Capital $2,384,198 $3,052,291
STATEMENT OF PARTNERS' CAPITAL (DEFICIT)
For the three months ended March 31, 1997
General Limited
Partner Partners Total
Balance at December 31, 1996 $ (88,823) $2,278,841 $2,190,018
Net income 7,150 135,853 143,003
Distributions to partners (8,057) (153,092) (161,149)
Balance at March 31, 1997 $ (89,730) $2,261,602 $2,171,872
STATEMENTS OF OPERATIONS
For the three months ended March 31, 1997 1996
Income
Rent $ 215,810 $ 229,677
Interest 13,133 12,836
Miscellaneous 641 270
Total Income 229,584 242,783
Expenses
Ground lease rent 28,229 28,229
Management fee 18,758 20,145
Depreciation --- 27,635
General and administrative 39,594 12,747
Total Expenses 86,581 88,756
Net Income $ 143,003 $ 154,027
Net Income Allocated:
To the General Partner $ 7,150 $ 9,083
To the Limited Partners 135,853 144,944
$ 143,003 $ 154,027
Per limited partnership unit
(15,000 outstanding) $9.06 $9.66
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1997 1996
Cash Flows From Operating Activities
Net income $ 143,003 $ 154,027
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation --- 27,635
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Rent receivable 12,994 6,753
Accounts payable and accrued expenses 15,152 (5,930)
Due to Burger King Corporation (14,152) ---
Net cash provided by operating activities 156,997 182,485
Cash Flows From Financing Activities
Cash distributions to partners (812,096) (180,645)
Net cash used for financing activities (812,096) (180,645)
Net increase (decrease) in cash and cash equivalents (655,099) 1,840
Cash and cash equivalents, beginning of period 1,478,513 973,641
Cash and cash equivalents, end of period $ 823,414 $ 975,481
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 reoccurring
adjustments which are, in the opinion of management, necessary to present a
fair statement of financial position as of March 31, 1997, the results of
operations for the three-month periods ended March 31, 1997 and 1996, the
statement of partners' capital (deficit) for three-month period ended March 31,
1997 and the statements of cash flows for the three-month periods ended March
31, 1997 and 1996. Results of operations for the three-month period ended
March 31, 1997 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 March 31, 1997, the Partnership had a cash and cash equivalents balance of
$823,414, compared to $1,478,513 at December 31, 1996. The decrease is
primarily attributable to net proceeds received from the October 1, 1996 sale
of a restaurant property located in Wichita, Kansas, which were included in the
Partnership's cash balance at December 31, 1996. These funds were subsequently
distributed by the Partnership to the partners on January 30, 1997. The
Partnership's cash balance at March 31, 1997 consisted primarily of the
Partnership's working capital, cash flow from operations for the first 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 March 31, 1997, the
Partnership owned nine restaurant properties (hereinafter referred to
individually as a "Property" and, collectively, as the "Properties").
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 decided to commence marketing the Properties in the second
quarter of 1997 for a bulk sale to a single purchaser. 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 th e Properties can be completed during 1997, there can be no
assurances that such efforts will be successful. As a result of the
Partnership's intention to commence marketing 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 any sale of the Properties, 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 receivable decreased from $76,042 at December 31, 1996 to $63,048 at March
31, 1997. The decrease is primarily attributable to a decrease in percentage
rent earned by the Partnership as a result of a decrease in sales at certain of
the Properties in the first quarter of 1997 as compared to the fourth quarter
of 1996.
For the quarter ended March 31, 1997, the Partnership declared a distribution
of cash flow from operations in the amount of $161,149. On April 30, 1997, the
Partnership paid a cash distribution to the partners in the amount of $148,916.
The Partnership withheld $5,787 to pay state non-resident income tax and
Federal foreign withholding taxes and an additional $6,446 which 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 first quarter distribution of cash flow from operations paid
to Unitholders on April 30, 1997 in the amount of $10.21 per Unit, Unitholders
have received total cash distributions of $2,329.91 per original $1,000 Unit
since the inception of the Partnership. This total includes distributions of
cash flow from operations in the amount of $1,620.55 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 $143,003 for the three months ended
March 31, 1997, compared to $154,027 for the corresponding period in 1996. The
decrease is primarily attributable to a decrease in rental income and an
increase in general and administrative expenses, which was partially offset by
a decrease in depreciation expense.
Rental income decreased from $229,677 for the three months ended March 31, 1996
to $215,810 for the corresponding period in 1997. The decrease is primarily
attributable to the decrease in sales at certain of the Properties during the
1997 period and the sale of a Property located in Wichita, Kansas in the fourth
quarter of 1996.
No depreciation expense was recorded for the three months ended March 31, 1997,
compared to $27,635 for the corresponding period in 1996. Effective December
31, 1996, the Partnership will no longer record depreciation expense as a
result of the reclassification of the Properties as real estate held for sale
pursuant to Financial Accounting Standards No. 121.
General and administrative expenses totalled $39,594 for the three months ended
March 31, 1997, compared to $12,747 for the corresponding period in 1996.
During the 1997 period, 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 reimbursed
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 three month period covered by this
report.
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: May 14, 1997 BY: /s/ Rocco F. Andriola
Name: Rocco F. Andriola
Title: President, Director and
Chief Financial Officer
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<PERIOD-END> Mar-31-1997
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