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<PAGE>
FORM 10Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended Commission File
March 31, 1998 No. 0-11980
VENETIAN PARK ASSOCIATES
(Exact name of Registrant as specified in its charter)
California 95-3887496
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
3250 Ocean Park Blvd., Ste. 380
Santa Monica, CA 90405
(Address of Principal Executive Offices, Including Zip Code)
Registrant's telephone number, including area code:
(310) 450-6866
-------------------------------------
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 .
--- ---
Indicate the number of shares (units) outstanding of each of the issuer's
classes of common stock (units) as of the latest practicable date
(applicable only to corporate issuer) 6,041 limited partnership units
issued and outstanding.
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A California Limited Partnership)
REPORT ON FORM 10-Q
For the Quarter Ended March 31, 1998
INDEX
<TABLE>
<CAPTION>
PAGE NO.
PART I. FINANCIAL INFORMATION
<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS:
Balance Sheets 3-4
Statements of Operations 5
Statements of Changes in Partners' Equity 6
Statements of Cash Flows 7
Notes to Financial Statements 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 9
PART II. OTHER INFORMATION 10
SIGNATURE 11
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
VENETIAN PARK ASSOCIATES, LTD.
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------ ------------
(UNAUDITED) (AUDITED)
CURRENT ASSETS:
<S> <C> <C>
Cash $ 48,105 $ 51,337
Tenants' Rents Receivable 3,135 2,778
Tenants' Security Deposits 109,281 108,486
Prepaid Expenses 11,508 24,019
------------ ------------
TOTAL CURRENT ASSETS 172,029 186,620
------------ ------------
RESTRICTED DEPOSITS & FUNDED RESERVES:
Mortgage Escrow Deposits 108,632 66,682
Reserve for Replacements 147,793 141,500
------------ ------------
TOTAL RESTRICTED DEPOSITS & RESERVES 256,425 208,182
------------ ------------
Fixed Assets, Net 6,791,247 6,860,291
------------ ------------
OTHER ASSETS:
Prepaid Loan Fees 18,530 18,769
Deposits 0 13
------------ ------------
TOTAL OTHER ASSETS 18,530 18,782
------------ ------------
TOTAL ASSETS $ 7,238,231 $ 7,273,875
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these Financial Statements. 3
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
LIABILITIES AND PARTNERS' EQUITY
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------ ------------
(UNAUDITED) (AUDITED)
CURRENT LIABILITIES:
<S> <C> <C>
Accounts Payable & Accrued Expenses $ 88,960 $ 88,656
Accrued Interest 35,466 35,466
Tenants' Prepaid Rents 3,249 1,276
Tenants' Security Deposits 93,122 100,178
Current Portion of Long Term Debt 127,095 127,095
------------ ------------
TOTAL CURRENT LIABILITIES 347,892 352,671
------------ ------------
OTHER LIABILITIES:
Mortgage Payable - 1st Trust Deed 5,282,548 5,312,939
------------ ------------
TOTAL OTHER LIABILITIES 5,282,548 5,312,939
------------ ------------
Partners Equity 1,607,791 1,608,265
------------ ------------
TOTAL LIABILITIES AND PARTNERS EQUITY $ 7,238,231 $ 7,273,875
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these Financial Statements. 4
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
1998 1997
----------- -----------
<S> <C> <C>
Operating Revenue:
Rental Income $384,634 $357,095
Other Rental and Interest Income 16,368 18,414
-------- --------
TOTAL OPERATING REVENUE 401,002 375,509
-------- --------
Operating Expenses:
Repair and Maintenance 19,136 55,847
Utilities 48,239 45,769
Managers Salaries 44,293 43,753
Management Fees 20,075 18,775
General and Administrative 57,562 55,783
Real Property Taxes and Insurance 32,896 33,998
Financial Expenses 109,992 112,230
Depreciation 69,044 70,086
Amortization 239 239
-------- --------
TOTAL OPERATING EXPENSES 401,476 436,480
-------- --------
NET INCOME (LOSS) FROM OPERATIONS $ (474) $(60,971)
-------- --------
-------- --------
NET INCOME (LOSS) PER UNIT
(6041 Limited Partnership units issued and outstanding) $ (0.08) $ (10.09)
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these Financial Statements. 5
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENT OF PARTNER'S EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
1998
------------
<S> <C>
Balance at January 1, 1998 $1,608,265
Net income (loss) (474)
Cash Distributions 0
------------
BALANCE AT MARCH 31, 1998 $1,607,791
------------
------------
</TABLE>
The accompanying notes are an integral part of these Financial Statements. 6
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
1998 1997
------------- ------------
<S> <C> <C>
Cash flows from operating activities: Net Income/(Loss) $ (474) $ (60,971)
-------- ---------
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation and amortization 69,283 70,325
Change in assets - (increase) decrease:
Tenant rents receivable (357) 0
Tenants security deposits (795) (26,056)
Prepaid expenses 12,511 12,700
Restricted deposits and reserves (48,243) (19,714)
Deposits 13 39
Change in liabilities - increase (decrease):
Accounts payable and accrued expenses 304 5,641
Tenants prepaid rents 1,973 (1,568)
Tenants security deposit payable (7,056) (5,004)
-------- ---------
Total adjustments 27,633 36,363
-------- ---------
Net cash flow provided by (used in) operating
activities: 27,159 (24,608)
-------- ---------
Cash flow from financing activities:
Principal reduction of long-term debt (30,391) (28,155)
Capital distributions to partners 0 (61,020)
-------- ---------
Net cash used by financing activities (30,391) (89,175)
-------- ---------
Net increase (decrease) in cash (3,232) (113,783)
Cash at beginning of Period 51,337 286,908
-------- ---------
Cash at end of Period $ 48,105 $ 173,125
-------- ---------
-------- ---------
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest expense $103,984 $ 103,182
State franchise tax $ 800 $ 800
</TABLE>
The accompanying notes are an integral part of these Financial Statements. 7
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1998
1) BASIS OF PRESENTATION
See the Form 10-K for the Year Ended December 31, 1997 for appropriate
disclosure to the Financial Statements. The Financial Statements included
in the 10-Q omit substantially all disclosures.
2) ADJUSTING ENTRIES
All adjustments which are necessary for a fair presentation of the
Financial Statements have been made to the Financial Statements presented.
All such adjustments are of a normal recurring nature.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
GENERAL
Operating income during the first quarter this year was $401,002 vs.
$375,509 during last year's first quarter, an increase of $25,493. Net
Income this year through March 31 was a negative cash flow of $474 vs. a
negative cash flow of $60,971 during the corresponding quarter last year,
an improvement of $60,497.
Rental Collection this year through March 31 was $384,634 vs. $357,095 last
year through the same date, an increase of $27,539. Because the rental
market is showing gradual signs of improvements, rental discounts continue
to decline.
Total Operating Expenses were $401,476 during the 1998 first quarter vs.
$436,480 during the 1997 first quarter, a cut of $35,004. We have one of
the best on-site maintenance and painting staffs we've had in many years
and they're helping us hold down expenses by performing much of the work on
site that had previously been contracted out to independent firms.
Cash in bank on March 31, 1998 was $48,105 vs. $51,337 at the same time the
year before. Tenant Security Deposits on hand stood at $ $109,281 vs.
$108,486 at the same time last year. On March 31, 1998, the Property's FHA
replacement reserve account stood at $147,793 vs. $141,500 on the same date
last year.
When the vacancy factor, now running at approximately 12%, is reduced to
more acceptable levels, we shall move to refinance the Property in order to
lower mortgage payments and at the same time generate sufficient funds to
replace the roof and complete the exterior paint program at the Property.
LIQUIDITY AND CAPITAL RESOURCES
Although this year's first quarter operating results are substantially
improved over last year's first quarter, no cash distributions can be made
until the Property generates a more substantial ongoing cash flow than that
which now prevails.
9
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable
ITEM 2. CHANGES IN SECURITIES
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) EXHIBITS
Exhibits other than those listed have been omitted because they
are nonexistent, inapplicable or because the required information
is given in the Financial Statements or notes thereto.
b) REPORTS ON FORM 8-K
Not Applicable
10
<PAGE>
SIGNATURE
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 in the City of Santa Monica of
California.
VENETIAN PARK ASSOCIATES, LTD.
(A California Limited Partnership)
DATED: May 4, 1998 By /s/ NORMAN JACOBSON
--------------------------------
Norman Jacobson
General Partner
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 413,811
<SECURITIES> 0
<RECEIVABLES> 33,173
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 446,984
<PP&E> 11,015,288
<DEPRECIATION> 4,224,041
<TOTAL-ASSETS> 7,238,231
<CURRENT-LIABILITIES> 347,892
<BONDS> 5,282,548
0
0
<COMMON> 0
<OTHER-SE> 1,607,791
<TOTAL-LIABILITY-AND-EQUITY> 7,238,231
<SALES> 0
<TOTAL-REVENUES> 401,002
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 291,484
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 109,992
<INCOME-PRETAX> (474)
<INCOME-TAX> 0
<INCOME-CONTINUING> (474)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (474)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
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