FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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 (NO FEE
REQUIRED)
For the transition period from...................to...........
Commission file number 0-11949
SILVER SCREEN PARTNERS, L.P.
(A Delaware Limited Partnership)
(Exact name of registrant as specified in its
Certificate and Agreement of Limited Partnership)
Delaware 13-3163899
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Chelsea Piers
Pier 62 - Suite 300
New York, New York 10011
- --------------------------------------- ----------
(Address of principal executive offices) (zip Code)
Registrant's telephone number, including area code: (212) 336-6700
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
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, and (2) has been subject to such requirements
for the past 90 days.
YES X NO
-------- ----------
1
<PAGE>
ITEM 1. FINANCIAL STATEMENTS.
The financial information set forth below is set forth in the June 30, 1997
Second Quarter Report of Silver Screen Partners, L.P. (the "Partnership") filed
herewith as Exhibit 20 and is incorporated herein by reference.
Balance Sheets -- June 30, 1997 and December 31, 1996.
Statements of Operations -- For the Three and Six Months ended June
30, 1997 and 1996.
Statements of Partners' Equity -- For the Six Months ended June 30,
1997 and the Year ended December 31, 1996.
Statements of Cash Flows -- For the Six Months ended June 30, 1997 and
1996.
Notes to Financial Statements.
The financial statements included herein are unaudited. In the opinion of
the management of the Partnership, all adjustments necessary for a fair
presentation of the results of operations have been included and all adjustments
are of a normal recurring nature. The results of operations for the three and
six months ended June 30, 1997 are not necessarily indicative of the results of
operations which may be expected for the entire year.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
---------------------
Revenues for the six months and quarter ended June 30, 1997 were
approximately $87,000 and $45,000, respectively, as compared with approximately
$89,000 and $43,000, for the comparable periods in 1996. Revenues for the six
months and second quarter of 1997 consisted of film revenues of approximately
$7,000 and $5,000, respectively, and interest income of approximately $80,000
and $40,000, while those for the comparable period in 1996 consisted of film
revenues of approximately $6,000 and $2,000, respectively, and interest income
of approximately $83,000 and $41,000. Film revenues continue to be infrequent
and unpredictable. Film revenues increased by approximately $1,000 from 1996 to
1997 while interest income decreased by approximately $3,000 from 1996 to 1997.
This is due to the decrease of interest rates from the previous year. Interest
rates for the first six months of 1997 ranged from 5.27% to 5.6%, while those
for the comparable period in 1996 ranged from 5.12% to 5.76%.
2
<PAGE>
Expenses for the six months and quarter ended June 30, 1997 were
approximately $66,000 and $31,000, respectively, as compared with approximately
$66,000 and $26,000 for the comparable periods in 1996. The Partnership expenses
remained constant.
The Partnership generated net income of approximately $21,000 for the six
months ended June 30, 1997, as compared with net income of approximately $22,000
for the comparable period in 1996.
The Partnership pre-licensed certain television rights (which became
available one year after theatrical release) on all of its films to a subsidiary
of HBO for a price determined by a formula designed to assure the Partnership a
return of 100% of its original investment in each completed film. As part of
this arrangement, HBO agreed to pay a minimum license fee of 50% of the
Partnership's investment in each film without regard to other film revenues
earned. Amounts due to the Partnership from HBO were payable five years after
the United States theatrical release of each film, but not later than August 31,
1991. The Partnership has received substantially all film revenues and the full
amount of license fees from HBO.
The Partnership financed seven films, all of which have been completed and
released in most media. Total budgets amounted to approximately $73,800,000, of
which substantially all has been expended. Accordingly, all Partnership funds
have been committed and the Partnership will not finance or purchase any
additional motion pictures.
The seven Partnership films are: "Flashpoint," released on August 31, 1984;
"Heaven Help Us," released on February 8, 1985; "Volunteers," released on August
16, 1985; "Sweet Dreams," released on October 2, 1985; "Head Office," released
on January 3, 1986; "The Hitcher," released on February 21, 1986; and "Odd
Jobs," released on March 7, 1986.
By the end of 1993, the U.S. home video rights to the Partnership's films
reverted to the Partnership. The Partnership plans to sell these rights, along
with any other residual rights to the films, and distribute net proceeds, if
any, to the investors. Negotiations regarding the sale of the U.S. home video
and ancillary rights to the Films were not concluded in 1996; the Partnership
currently expects to finalize the sale within 1997. In order to conclude this
sale, any contingent liabilities that the Partnership may have in respect of
residual obligations relating to the Films must be settled or assumed by the
buyer of the Partnership's rights. It is impossible to predict the extent to
which the Partnership's remaining assets will be required to be dedicated to
these contingent liabilities. To the extent that the Partnership has assets
remaining after such a settlement or assumption, such assets will be distributed
to the partners in accordance with the Partnership's partnership agreement.
During the quarter ended June 30, 1997, the Partnership made no cash
distributions to the Partners because revenues generated were insufficient to
warrant a distribution.
3
<PAGE>
Liquidity and Capital Resources
-------------------------------
As of June 30, 1997, the General Partners' capital accounts reflect a
deficit of $719,718. At or prior to dissolution this deficit will be reversed
through a special allocation to the limited partners. In view of the
Partnership's limited requirements for liquidity, short and long term
evaluations do not anticipate any effect of current capital account balances on
the Partnership's cash flow.
The Partnership has no material requirements for liquidity, other than its
general and administrative expenses and distributions to holders of Units of
limited partnership interests. Such sources are considered adequate for such
needs.
The Partnership's tax returns were audited by the City of New York and the
Partnership received assessments for unincorporated business tax of $675,887
covering the period from June 8, 1983 (inception) through December 31, 1990. It
was anticipated that additional assessments, approximately $70,000, would be
issued for the years subsequent to December 31, 1990. All assessments are
subject to interest.
The Partnership contested these assessments and on September 30, 1996, a
final settlement of $106,600 (including interest) was reached with the City of
New York and paid for all periods through December 31, 1995.
4
<PAGE>
ITEM 3. SELECTED FINANCIAL DATA.
SILVER SCREEN PARTNERS, L.P.
<TABLE>
<CAPTION>
Three Months Six Months Three Months Six Months
Ended Ended Ended Ended
June 30, 1997 June 30, 1997 June 30, 1996 June 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues
Film revenues ........... $ 4,559 $ 7,163 $ 1,658 $ 5,514
Interest income ......... 40,243 80,187 41,360 83,278
------------- ------------- ------------- -------------
$ 44,802 $ 87,350 $ 43,018 $ 88,792
Expenses
General and
administrative
expenses ................ 31,122 66,154 25,921 66,325
------------- ------------- ------------- -------------
Net income ................ $ 13,680 $ 21,196 $ 17,097 $ 22,467
============= ============= ============= =============
Net income per $500
limited partnership
unit (based on 165,639
Units outstanding) ...... $ 0.08 $ 0.13 $ 0.10 $ 0.13
============= ============= ============= =============
Total assets .............. June 30, 1997 June 30, 1996
------------- -------------
$ 2,873,211 $ 3,123,939
============= =============
</TABLE>
See notes to financial statements.
5
<PAGE>
PART 11. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit 20 -- 1997 Second Quarter Report
(b) The Partnership did not file any reports on Form
8-K during the quarter ended June 30, 1997.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
SILVER SCREEN PARTNERS, L.P.,
a Delaware limited partnership
By: Silver Screen Management, Inc.,
Managing General Partner
Date: August 14, 1997 By: /s/ Roland W. Betts
--------------------------------
Roland W. Betts, President
7
<PAGE>
SILVER SCREEN PARTNERS
Second Quarter Report
June 30, 1997
F-1
<PAGE>
Dear Limited Partner:
The Partnership has received all payments from HBO and has recovered at
least its full investment in each of its seven films. Cumulative distributions
to date total $88 million.
We anticipate that the Partnership will be dissolved by the end of 1997.
The final distribution, if any, will be paid at the time of dissolution.
Our Third Quarter Report will be mailed in October. If you need any
assistance in the meantime, please contact our Investor Relations Department
between the hours of 10 A.M. and 2 P.M., Eastern Standard Time.
Sincerely,
/s/ Roland W. Betts
- --------------------
Roland W. Betts
President
F-2
<PAGE>
BALANCE SHEETS (UNAUDITED)
- --------------------------
June 30, 1997 Dec. 31, 1996
------------- -------------
ASSETS
Current assets:
Cash ........................................... $ 29,861 $ 27,424
----------- -----------
Temporary investments (at cost,
plus accrued interest
which approximates market) ................... 2,843,350 2,992,626
----------- -----------
$ 2,873,211 $ 3,020,050
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Due to managing general partner ................ $ 5,316 $ 351
----------- -----------
Total current liabilities ...................... 5,316 351
Other liabilities .............................. 830,163 1,003,163
----------- -----------
Total liabilities .............................. 835,479 1,003,514
----------- -----------
Partners' equity:
General partners ............................... (719,718) (719,930)
Limited partners ............................... 2,757,450 2,736,466
----------- -----------
Total partners' equity ......................... 2,037,732 2,016,536
----------- -----------
$ 2,873,211 $ 3,020,050
=========== ===========
See notes to financial statements.
F-3
<PAGE>
STATEMENTS OF OPERATIONS (UNAUDITED)
- ------------------------------------
<TABLE>
<CAPTION>
Three Months Six Months Three Months Six Months
Ended Ended Ended Ended
June 30, 1997 June 30, 1997 June 30, 1996 June 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES:
Film revenues ................................ $ 4,559 $ 7,163 $ 1,658 $ 5,514
Interest income .............................. 40,243 80,187 41,360 83,278
------- ------- ------- -------
44,802 87,350 43,018 88,792
COSTS AND EXPENSES:
General and administrative expenses .......... 31,122 66,154 25,921 66,325
------- ------- ------- -------
Net Income ................................... $13,680 $21,196 $17,097 $22,467
======= ======= ======= =======
NET INCOME ALLOCATED TO:
General partners ............................. $ 137 $ 212 $ 171 $ 225
Limited partners ............................. 13,543 20,984 16,926 22,242
------- ------- ------- -------
$13,680 $21,196 $17,097 $22,467
======= ======= ======= =======
Net income per a $500
limited partnership unit
(based on 165,639 units outstanding) ....... $ 0.08 $ 0.13 $ 0.10 $ 0.13
======= ======= ======= =======
</TABLE>
See notes to financial statements
STATEMENTS OF PARTNERS' EQUITY (UNAUDITED)
- ------------------------------------------
Year Ended December 31, 1996
and Six Months Ended June 30, 1997
==========================================
General Limited
Partners Partners Total
----------- ----------- -----------
Balance, January 1, 1996 ......... $ (728,727) $ 1,865,581 $ 1,136,854
Net income, 1996 ................. 8,797 870,885 879,682
Distributions, 1996 .............. -- -- --
----------- ----------- -----------
Balance, December 31, 1996 ....... (719,930) 2,736,466 2,016,536
Net income, six months 1997 ...... 212 20,984 21,196
Distributions during
six months 1997 ................. -- -- --
----------- ----------- -----------
$ (719,718) $ 2,757,450 $ 2,037,732
=========== =========== ===========
See notes to financial statements.
F-4
<PAGE>
STATEMENTS OF CASH FLOWS (UNAUDITED)
- ------------------------------------
Six Months Six Months
Ended Ended
June 30, 1997 June 30, 1996
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ........................................... $ 21,196 $ 22,467
Adjustments to reconcile net income to net
cash provided by operating activities:
(Increase) decrease in
accrued interest receivable ..................... (23,713) 971
Net change in operating assets and liabilities:
Increase in due to managing general partner ...... 4,965 639
Decrease in other liabilities .................... (173,000) (21,713)
--------- ---------
Net cash (used in) provided by operating activities .. (170,552) 2,364
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale (purchase) of temporary investments, net ........ 172,989 (5,082)
--------- ---------
Net cash provided by (used in) investing activities .. 172,989 (5,082)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners ............................ -- --
--------- ---------
Net cash used in financing activities ................ -- --
--------- ---------
Net decrease in cash ................................. 2,437 (2,718)
Cash, beginning of year .............................. 27,424 28,031
--------- ---------
Cash at end of six months ............................ $ 29,861 $ 25,313
========= =========
See notes to financial statements.
F-5
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
TEMPORARY INVESTMENTS
- ---------------------
Temporary investments represent investments in commercial paper.
FILM REVENUES
- -------------
The film investments aggregated approximately $73,000,000 and have been
fully amortized. Film revenues are recognized when earned as reported by each
distributor. During the first six months of 1997, the Partnership received
$7,200 in film revenues.
CONTINGENT LIABILITY
- --------------------
The Partnership's tax returns were audited by the City of New York and the
partnership received assessments for unincorporated business tax of $675,887
covering the period from June 8, 1983 (inception) through December 31, 1990. It
was anticipated that additional assessments, approximating $70,000, would be
issued for the years subsequent to December 31, 1990. All assessments were
subject to interest.
The Partnership contested these assessments and on September 30, 1996, a
final settlement of $106,000 (including interest) was reached with the City of
New York and paid for all periods through December 31, 1995.
The Partnership expects to dissolve by the end of 1997 upon final
disposition of the remaining assets and payment of liabilities.
F-6
<PAGE>
Silver Screen Management, Inc.
Chelsea Piers-Pier 62
Suite 300
New York, NY 10011
(212) 336-6700
(c) 1997 Silver Screen Management, Inc.
F-7
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED BALANCE SHEET AS OF JUNE 30, 1997, AND THE STATEMENT OF OPERATIONS FOR
THE PERIOD ENDED JUNE 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 30
<SECURITIES> 2,843
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,873
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,873
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,038
<TOTAL-LIABILITY-AND-EQUITY> 2,873
<SALES> 7
<TOTAL-REVENUES> 87
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 66
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 21
<INCOME-TAX> 0
<INCOME-CONTINUING> 21
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21
<EPS-PRIMARY> 0.13
<EPS-DILUTED> 0
</TABLE>
