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<PAGE>
FORM 10-Q
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
June 30, 1999 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 June 30, 1999
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
Balance Sheets 3-4
Statements of Operations 5-6
Statements of Changes in Partners' Equity 7
Statements of Cash Flows 8
Notes to Financial Statements 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 10
PART II. OTHER INFORMATION 11
SIGNATURE 12
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
VENETIAN PARK ASSOCIATES, LTD.
(A California Limited Partnership)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------- ------------
(unaudited) (audited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 48,270 $ 38,050
Tenants' Rents Receivable 1,526 2,309
Tenants' Security Deposits 98,637 97,232
Prepaid Expenses 17,945 25,660
Insurance Receivable 38,016 158,642
---------- ----------
TOTAL CURRENT ASSETS 204,394 321,893
RESTRICTED DEPOSITS & FUNDED RESERVES:
Mortgage Escrow Deposits 68,489 62,560
Reserve for Replacements 165,948 166,672
---------- ----------
TOTAL RESTRICTED DEPOSITS & RESERVES 234,437 229,232
Fixed Assets, Net 6,464,009 6,603,181
OTHER ASSETS:
Prepaid Loan Fees 17,344 17,816
Deposits 2,660 726
---------- ----------
TOTAL OTHER ASSETS 20,004 18,542
TOTAL ASSETS $6,922,844 $7,172,848
---------- ----------
---------- ----------
</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>
JUNE 30, DECEMBER 31,
1999 1998
---------- -----------
(unaudited) (audited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts Payable & accrued expenses $ 83,505 $ 186,969
Accrued Expenses - Fire Damage 7,158 0
Accrued Interest 35,466 35,466
Tenants' Prepaid Rents 12,737 5,998
Tenants' Security Deposits 93,070 89,251
Current Portion of Long Term Debt 137,777 137,777
---------- ----------
TOTAL CURRENT LIABILITIES 369,713 455,461
OTHER LIABILITIES:
Mortgage Payable - 1st Trust Deed 5,128,642 5,194,852
---------- ----------
TOTAL OTHER LIABILITIES 5,128,642 5,194,852
Partners Equity 1,424,489 1,522,535
TOTAL LIABILITIES AND PARTNERS EQUITY $6,922,844 $7,172,848
---------- ----------
---------- ----------
</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
June 30, June 30,
1999 1998
------------ ------------
<S> <C> <C>
Operating Revenue:
Rental Income $404,309 $378,375
Other Rental and Interest Income 10,455 13,645
-------- --------
TOTAL OPERATING REVENUE 414,764 392,020
-------- --------
Operating Expenses:
Repair and Maintenance 99,786 58,894
Utilities 47,216 45,647
Managers Salaries 57,289 47,070
Management Fees 20,738 22,970
General and Administrative 36,883 16,786
Real Property Taxes and Insurance 33,694 32,895
Financial Expenses 110,050 110,966
Depreciation 69,586 69,044
Amortization 236 236
-------- --------
TOTAL OPERATING EXPENSES 475,478 404,508
-------- --------
NET INCOME (LOSS) FROM OPERATIONS $(60,714) $(12,488)
-------- --------
-------- --------
NET INCOME (LOSS) FROM OPERATIONS
(6,041 Limited Partnership units issued and outstanding) $ (10.05) $ (2.07)
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these Financial Statements. 5
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
June 30, June 30,
1999 1998
---------- ----------
<S> <C> <C>
Operating Revenue:
Rental Income $789,475 $763,009
Other Rental and Interest Income 29,927 30,013
-------- --------
TOTAL OPERATING REVENUE 819,402 793,022
Operating Expenses:
Repair and Maintenance 154,651 78,030
Utilities 94,354 93,886
Managers Salaries 110,717 91,363
Management Fees 41,059 43,045
General and Administrative 91,326 74,348
Real Property Taxes and Insurance 67,389 65,791
Financial Expenses 218,308 220,958
Depreciation 139,172 138,088
Amortization 472 478
-------- --------
TOTAL OPERATING EXPENSES 917,448 805,987
NET INCOME (LOSS) FROM OPERATIONS $(98,046) $(12,965)
-------- --------
-------- --------
NET INCOME (LOSS) PER UNIT
(6041 LIMITED PARTNERSHIP UNITS ISSUED AND OUTSTANDING) $ (16.23) $ (2.15)
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these Financial Statements. 6
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A California Limited Partnership)
STATEMENT OF PARTNER'S EQUITY
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
June 30,
1999
-----------
<S> <C>
BALANCE AT JANUARY 1, 1999 $1,522,535
Net income (loss) (98,046)
Cash Distributions 0
-----------
BALANCE AT JUNE 30, 1999 $1,424,489
-----------
-----------
</TABLE>
The accompanying notes are an integral part of these Financial Statements. 7
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
June 30, June 30,
1999 1998
---------- -----------
<S> <C> <C>
Cash flows from operating activities: Net Income/(Loss) $ (98,046) $(12,965)
--------- --------
Adjustments to reconcile net (loss) income to net cash provided by operating
activities:
Depreciation and amortization 139,644 138,566
Change in assets - (increase) decrease:
Tenants' rents receivable 783 (22,890)
Insurance receivables 120,626 0
Tenants security deposits (1,405) 5,463
Prepaid expenses 7,715 8,194
Restricted deposits and reserves (5,205) (23,886)
Deposits (1,934) (9,987)
Change in liabilities - increase (decrease):
Accounts payable and accrued expenses (103,464) (26,821)
Accrued Expenses - Fire Damage 7,158 0
Tenants prepaid rents 6,739 5,562
Tenants security deposit payable 3,819 (11,059)
--------- --------
Total adjustments 174,476 63,142
--------- --------
NET CASH FLOW PROVIDED BY (USED IN) OPERATING ACTIVITIES: 76,430 50,177
--------- --------
Cash flow from financing activities:
Principal reduction of long-term debt (66,210) (61,368)
Capital distributions to partners 0 0
--------- --------
Net cash used by financing activities (66,210) (61,368)
--------- --------
NET INCREASE (DECREASE) IN CASH 10,220 (11,191)
CASH AT BEGINNING OF PERIOD 38,050 51,337
--------- --------
CASH AT END OF PERIOD $ 48,270 $ 40,146
--------- --------
--------- --------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest expense $ 203,794 $207,382
State franchise tax $ 800 $ 800
</TABLE>
The accompanying notes are an integral part of these Financial Statements. 8
<PAGE>
VENETIAN PARK ASSOCIATES, LTD.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED JUNE 30, 1999
1) BASIS OF PRESENTATION
See the Form 10-K for the year ended December 31, 1998 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.
Page 9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
GENERAL
Operating income for the 1999 first half of 1999 WAS $819,402 vs.
$793,022 during the corresponding period last year, an improvement of
$26,380. Because of rehabilitation costs the property sustained a cash
operating loss of $98,046 this year through June 30 vs. a cash
operating loss of $12,965 during the corresponding period last year.
Whether for the purposes of sale, refinancing or retention, we must
continue the necessary repairs and/or replacements as it's paying off
in the form of notably increased occupancy.
The scheduled monthly rent roll for June, 1999, was $160,380 vs.
$153,142 at the same time last year, an increase of $7,238 or 4.73%.
rental losses (vacancies, delinquencies and rental discounts) were
$157,527 during the 1999 first half vs. $146,614 during the previous
year's first half, an increase of $10,913. The increase in rental
losses was sustained despite, and not because of, a reduction in rental
incentives from $20,633 last year to $18,003 last year.
Operating expenses during the quarter ended June 30, 1999 were $917,448
vs. $805,987 during the corresponding period last year, an increase of
$111,461 due primarily to increases in variable expenses, repairs and
maintenance, replacements and fixed expenses.
On June 30, the Property's FHA Replacement Reserve Account had a
balance of $165,948. The Property's cash accounts stood at $146,907
(including $98,637 in tenant refundable security deposits) vs. $143,169
last year at the same time.
LIQUIDITY AND CAPITAL RESOURCES
The partnership did not declare nor cash were distributed to the
partners for the second quarter of June 30, 1999 until the property
generates a more substantial ongoing cash flow than that which now
prevail.
Page 10
<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 OF 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
Page 11
<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: August 9, 1999 /s/ Norman Jacobson
----------------------------
Norman Jacobson
General Partner
Page 12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 381,344
<SECURITIES> 0
<RECEIVABLES> 77,491
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 458,835
<PP&E> 11,071,027
<DEPRECIATION> 4,607,018
<TOTAL-ASSETS> 6,922,844
<CURRENT-LIABILITIES> 369,713
<BONDS> 5,128,642
0
0
<COMMON> 0
<OTHER-SE> 1,424,489
<TOTAL-LIABILITY-AND-EQUITY> 6,922,844
<SALES> 0
<TOTAL-REVENUES> 819,402
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 559,496
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 357,952
<INCOME-PRETAX> (98,046)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (98,046)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
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