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 March 31, 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.)
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>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The financial information set forth below is set forth in the March 31,
1997 First Quarter Report of Silver Screen Partners, L.P. (the "Partnership")
filed herewith as Exhibit 20 and is incorporated herein by reference.
Balance Sheets -- March 31, 1997 and December 31,
1996.
Statements of Operations -- For the Three Months
ended March 31, 1997 and 1996.
Statements of Partners' Equity -- For the Three
Months ended March 31, 1997 and the Year ended
December 31, 1996.
Statements of Cash Flows -- For the Three Months
ended March 31, 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 months
ended March 31, 1997 are not necessarily indicative of the results of operations
which may be expected for the entire year.
2
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
---------------------
Revenues for the three months ended March 31, 1997 were approximately
$43,000, as compared with approximately $46,000 for the comparable three months
in 1996. Revenues for the first three months of 1997 consisted of film revenues
of approximately $3,000 and investment revenues of approximately $40,000 while
those for the comparable period in 1996 consisted of film revenues of
approximately $4,000 and investment revenues of approximately $42,000. Film
revenues continue to be infrequent and unpredictable. Film revenues increased by
approximately $1,000 from 1996 to 1997. Interest income decreased by
approximately $2,000 from 1996 to 1997. This is due to the decrease in funds
available for investment from the previous year. Interest rates for the first
three months of 1997 ranged from 5.27% to 5.53%, while those for the comparable
period in 1996 ranged from 5.12% to 5.79%.
Expenses for the three months ended March 31, 1997 were approximately
$35,000 as compared with approximately $40,000 for the comparable period in
1996. The Partnership expenses in general decreased by approximately $5,000.
The Partnership generated net income of approximately $8,000 for the three
months ended March 31, 1997, as compared with net income of approximately $5,000
for the comparable period in 1996. The increase in net income is mainly due to a
decrease of expense.
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.
3
<PAGE>
By the end of 1993, the U.S. home video rights to the Partnership's films
reverted back to the Partnership. The Partnership plans to sell these rights,
along with any other residual rights to the Films, and distribute any net
proceeds received from such sale to the investors. The Partnership does not
expect these revenues to be significant. Negotiations regarding the sale of the
U.S. home video and ancillary rights to the Films were not concluded in 1996;
the Partnership currently hopes 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 Silver Screen partnership agreement.
During the quarter ended March 31, 1997, the Partnership made no cash
distributions to the Partners because revenues generated were insufficient to
warrant a distribution.
Liquidity and Capital Resources
-------------------------------
As of March 31, 1997, the General Partners' capital accounts reflect a
deficit of $719,855. 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
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 $106,600 (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.
Three Months Three Months
Ended Ended
March 31, 1997 March 31, 1996
-------------- --------------
Revenues
Film revenues .............................. $ 2,604 $ 3,856
Interest income ............................ 39,944 41,918
----------- -----------
42,548 45,774
Expenses
General and administrative
expenses .................................. 35,032 40,404
----------- -----------
Net income ................................... 7,516 5,370
=========== ===========
Net income (loss) per a $500
limited partnership
unit (based on 165,639
Units outstanding) ......................... $ .04 $ .03
=========== ===========
Cash distribution
per $500 limited
partnership unit ........................... $ 0.00 $ 0.00
=========== ===========
March 31, 1997 March 31, 1996
-------------- --------------
Total assets ................................. $ 2,991,225 $ 3,116,101
========== ==========
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 First Quarter Report
(b) The Partnership did not file any reports on Form
8-K during the quarter ended March 31, 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: May 14, 1997 By: /s/ Roland W. Betts
--------------------------------
Roland W. Betts, President
7
<PAGE>
Silver Screen Partners First Quarter Report
March 31, 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.
The negotiations regarding the sale of the U.S. home video and ancillary
rights to the films have taken longer to conclude than originally expected. We
anticipate that the Partnership will be dissolved by the end of 1997. The final
distribution will be paid at the time of dissolution.
Our Second Quarter Report will be mailed in July. 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)
- --------------------------
March 31, December 31,
1997 1996
----------- -----------
ASSETS
Current assets:
Cash ................................................ $ 1,766 $ 27,424
Temporary investments (at cost, plus accrued
interest which approximates market) .............. 2,989,459 2,992,626
---------- ----------
$2,991,225 $3,020,050
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Due to managing general partner ..................... $ 14,510 $ 351
---------- ----------
Total current liabilities ........................... 14,510 351
Other liabilities ................................... 952,663 1,003,163
---------- ----------
Total liabilities ................................... 967,173 1,003,514
---------- ----------
Partners' equity:
General partners .................................... (719,855) (719,930)
Limited partners .................................... 2,743,907 2,736,466
---------- ----------
Total partners' equity .............................. 2,024,052 2,016,536
---------- ----------
$2,991,225 $3,020,050
========== ==========
See notes to financial statements.
F-3
<PAGE>
Statements of Operations (Unaudited)
- ------------------------------------
Three Months Three Months
Ended Ended
March 31, 1997 March 31, 1996
-------------- --------------
REVENUES:
Film revenues .................................... $ 2,604 $ 3,856
Interest income .................................. 39,944 41,918
------- -------
42,548 45,774
COSTS AND EXPENSES:
General and administrative expenses .............. 35,032 40,404
------- -------
Net Income ....................................... $ 7,516 $ 5,370
======= =======
NET INCOME ALLOCATED TO:
General partners ................................. $ 75 $ 54
Limited partners ................................. 7,441 5,316
======= =======
$ 7,516 $ 5,370
======= =======
Net income per a $500 limited
partnership unit (based on
165,639 units outstanding) ..................... $ 0.04 $ 0.03
======= =======
See notes to financial statements
Statements of Partners' Equity (Unaudited)
- ------------------------------------------
Year Ended December 31, 1996
and Three Months Ended March 31, 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, three months 1997 .... 75 7,441 7,516
Distributions during
three months 1997 ............... -- -- --
----------- ----------- -----------
$ (719,855) $ 2,743,907 $ 2,024,052
=========== =========== ===========
See notes to financial statements.
F-4
<PAGE>
Statements of Cash Flows (Unaudited)
- ------------------------------------
Three Months Three Months
Ended Ended
March 31, March 31,
1997 1996
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................. $ 7,516 $ 5,370
Adjustments to reconcile net income to net
cash provided by operating activities:
(Increase) decrease in accrued interest receivable . (13,771) 503
Net change in operating assets and liabilities:
Increase in due to managing general partner ........ 14,159 11,373
Decrease in other liabilities ...................... (50,500) (23,188)
-------- --------
Net cash used in operating activities .................. (42,596) (5,942)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale (purchase) of temporary investments, net .......... 16,938 (4,224)
-------- --------
Net cash provided by (used in) investing activities .... 16,938 (4,224)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners .............................. -- --
-------- --------
Net cash used in financing activities .................. -- --
-------- --------
Net decrease in cash ................................... (25,658) (10,166)
Cash, beginning of year ................................ 27,424 28,031
-------- --------
Cash at end of three months ............................ $ 1,766 $ 17,865
======== ========
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 three months of 1997, the Partnership received
approximately $2,600 in film revenues.
Contingent Liability
- --------------------
The Partnership's tax returns were audited by the City of New York and
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 distribution of cash to the partners.
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>
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED BALANCE SHEET AS OF MARCH 31, 1997, AND THE STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED MARCH 31, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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