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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended June 30, 1995 Commission file number 0-14557
POWER TEST INVESTORS LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
NEW YORK 11-2717079
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
125 Jericho Turnpike, Jericho, New York 11753
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(Address of principal executive offices) (Zip Code)
(516) 338 - 6000
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(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
---- ----
Registrant has 6,509,536 units of general and limited partnership interests
outstanding as of June 30, 1995.
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POWER TEST INVESTORS LIMITED PARTNERSHIP
INDEX
PART I. FINANCIAL INFORMATION Page Number
Item 1. Consolidated Financial Statements:
Balance Sheets - June 30, 1995 and December 31, 1994 1
Statements of Income - three and six months ended
June 30, 1995 and 1994 2
Statements of Cash Flows - six months ended
June 30, 1995 and 1994 3
Notes to Consolidated Financial Statements 4 - 5
Item 2. Management's Discussion and Analysis of Financial
Condition And Results of Operations 6
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
Signatures 7
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POWER TEST INVESTORS LIMITED PARTNERSHIP
(a New York limited partnership)
CONSOLIDATED BALANCE SHEETS
June 30, 1995 and December 31, 1994
June 30, December 31,
1995 1994
----------- -----------
(unaudited)
ASSETS
Cash and cash equivalents $ 2,608,002 $ 2,523,681
Net investment in direct financing leases 5,396,269 5,747,246
Fixed assets, at cost, net of accumulated
depreciation of $18,858,913 and
$18,523,870, respectively 31,348,988 31,903,386
Deferred charges, net of accumulated
amortization of $2,400,088 and $2,332,576,
respectively 217,647 285,159
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$39,570,906 $40,459,472
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LIABILITIES AND PARTNERS' CAPITAL
Accrued liabilities, primarily interest $341,623 $358,438
Mortgages payable 36,522,370 37,908,888
Partners' capital,
6,509,536 and 6,510,975 units of general
and limited partnership interests
outstanding, respectively 2,706,913 2,192,146
----------- ----------
$39,570,906 $40,459,472
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See accompanying notes.
1
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POWER TEST INVESTORS LIMITED PARTNERSHIP
(a New York limited partnership)
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three months ended June 30, Six months ended June 30,
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1995 1994 1995 1994
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Revenues:
Rental income $2,223,851 $2,290,077 $4,472,772 $4,581,592
Interest on direct
financing leases 265,706 299,299 539,795 605,640
Other income 47,741 408,266 587,214 490,213
---------- ---------- ---------- ----------
2,537,298 2,997,642 5,599,781 5,677,445
---------- ---------- ---------- ----------
Expenses:
Interest 884,752 886,236 1,771,212 1,756,198
General and administrative 225,164 184,935 418,073 365,047
Depreciation and
amortization 225,465 226,807 451,308 453,838
Income applicable to
minority interest 12,557 17,131 30,169 31,273
---------- ---------- ---------- ----------
1,347,938 1,315,109 2,670,762 2,606,356
---------- ---------- ---------- ----------
Net income $1,189,360 $1,682,533 $2,929,019 $3,071,089
========== ========== ========== ==========
Net income per unit $.18 $.26 $.45 $.47
========== ========== ========== ==========
Distributions per unit $.185 $.185 $.37 $.37
========== ========== ========== ==========
Weighted average units
outstanding 6,509,931 6,510,975 6,510,450 6,510,975
========== ========== ========== ==========
See accompanying notes.
2
<PAGE>
POWER TEST INVESTORS LIMITED PARTNERSHIP
(a New York limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30, 1995 and 1994
(unaudited)
1995 1994
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Cash flows from operating activities:
Net income $2,929,019 $3,071,089
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 451,308 453,838
Amortization of investment in direct
financing leases 350,977 298,950
Gain on dispositions of fixed assets (497,969) (455,723)
Minority interest 30,169 31,273
Changes in assets and liabilities:
Decrease in accrued liabilities (16,815) (15,174)
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Net cash provided by operating activities 3,246,689 3,384,253
---------- ----------
Cash flows from investing activities:
Proceeds from dispositions
of fixed assets 668,571 839,157
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Net cash provided by investing activities 668,571 839,157
---------- ----------
Cash flows used in financing activities:
Mortgage principal payments (1,386,518) (1,562,919)
Cash distributions (2,433,808) (2,434,075)
Purchase of treasury units (10,613) -
---------- ----------
Net cash used in financing activities (3,830,939) (3,996,994)
---------- ----------
Net increase in
cash and cash equivalents 84,321 226,416
Cash and cash equivalents at
beginning of period 2,523,681 1,983,574
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Cash and cash equivalents at
end of period $2,608,002 $2,209,990
========== ==========
Supplemental disclosure of cash flow
information -
Cash paid during the period for interest $1,787,611 $1,772,215
See accompanying notes.
3
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POWER TEST INVESTORS LIMITED PARTNERSHIP
(a New York limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1995
(unaudited)
1. Basis of Presentation:
The accompanying consolidated financial statements are unaudited but, in
the opinion of management, reflect all adjustments (consisting of normal
recurring accruals) necessary for a fair presentation.
2. Organization:
Power Test Investors Limited Partnership ("Partnership") is a New York
limited partnership which was formed in January 1985 to invest in and
become the limited partner in Power Test Realty Company Limited Partnership
("Operating Partnership"), also a New York limited partnership. The
Operating Partnership was formed to acquire, own, lease and sell or dispose
of certain of the assets ("Assets") formerly used in the petroleum
marketing operations of Getty Oil Company and Getty Refining and Marketing
Company located in the Northeastern and Mid- Atlantic states. The
Operating Partnership has leased to Getty Petroleum Corp. ("Getty") the
Assets which were acquired on February 1, 1985. The leases are principally
for initial periods of fifteen years expiring January 31, 2000 (subject to
multiple renewal periods through 2050) and currently provide for aggregate
annual rental payments of approximately $10,677,000. The general partner
of the Partnership and the Operating Partnership is CLS General Partnership
Corp. ("General Partner").
The limited partners of the Partnership contributed approximately 79% of
the capital of the Partnership and share pro rata with the General Partner
(which contributed approximately 21% of the capital of the Partnership) in
the financial and tax attributes of the Partnership. The Partnership
contributed 99% of the capital of the Operating Partnership and shares pro
rata with the General Partner (which contributed the remaining 1% of the
capital of the Operating Partnership) in the financial and tax attributes
of the Operating Partnership. In 1990 and 1991, the General Partner
purchased 38,933 and 46,000 units of limited partnership interests,
respectively, further increasing its ownership of the Partnership to
approximately 22.2%.
3. Consolidation:
The consolidated financial statements include the accounts of the
Partnership and the Operating Partnership. All significant intercompany
accounts and transactions have been eliminated.
The General Partner's share of the Operating Partnership's income for the
periods ended June 30, 1995 and 1994 has been reflected as "Income
applicable to minority interest" in the accompanying consolidated
statements of income.
4
4. Partners' Capital:
Total
General Limited Partners'
Partner Partners Capital
-------------- ------------- ------------
Balance, December 31, 1994 $ 414,748 $1,777,398 $2,192,146
Net income for the six months
ended June 30, 1995 651,290 2,277,729 2,929,019
Distributions to unitholders (560,565) (1,873,243) (2,433,808)
Purchase of treasury units - (10,613) (10,613)
Income applicable to minority
interest 30,169 - 30,169
--------- ---------- ----------
Balance, June 30, 1995 $ 535,642 $2,171,271 $2,706,913
========= ========== ==========
As of June 30, 1995 and December 31, 1994, the General Partner's minority
interest amounted to $19,460 and $14,305, respectively, which is included
in "Total Partners' Capital".
5. Sale of Property:
In accordance with the terms of the lease, the Operating Partnership, in
March 1995, sold a service station to Getty for eleven times the annual
rental, resulting in a net gain of $339,475 to the Partnership. The net
gain has been reflected in "Other income" in the accompanying consolidated
statement of income for the six month period ended June 30, 1995. During
1994, the Operating Partnership sold four service stations to Getty for
eleven times the annual rentals, as provided by the lease agreement with
Getty, resulting in a net gain to the Partnership of $389,863 and $455,723
for the three and six months ended June 30, 1994, respectively. The net
gains resulting from such sales have been reflected in "Other income" in
the accompanying consolidated statements of income.
6. Condemnation of Property:
The New Haven terminal was subject to a partial condemnation for a road
widening which resulted in a taking of approximately 5,100 square feet of
land during the quarter ended March 31, 1995. The lease was not terminated
but the rent was reduced from $207,212 to $192,648 per annum in accordance
with the terms of the lease. The Operating Partnership received $164,958,
and Getty received $150,042 of the condemnation award representing the
value of Getty's leasehold interest as determined by the formula set forth
in the lease. The condemnation resulted in a net gain of $158,494 to the
Partnership which has been reflected in "Other income" in the accompanying
consolidated statement of income for the six month period ended
June 30, 1995.
5
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The Partnership was formed to invest in and become the limited partner in
the Operating Partnership. The operations of the Operating Partnership
consist of leasing to Getty Petroleum Corp. all of its properties which
were acquired on February 1, 1985. The leases are principally for initial
periods of fifteen years expiring January 31, 2000 (subject to multiple
renewal periods through 2050) and currently provide for aggregate annual
payments of approximately $10,677,000.
The decrease in rental income for the three and six months ended June 30,
1995 as compared to the prior year periods is due to the sale of certain
properties.
The decrease in other income for the three months ended June 30, 1995 as
compared to the prior year period is principally due to a net gain of
$389,863 from the sale of three properties during the 1994 period. The
increase in other income for the six month period ended June 30, 1995 is
principally due to net gains of $339,475 from the sale of a property and
$158,494 resulting from the partial condemnation of the New Haven terminal,
as compared to a net gain of $455,723 from the sale of properties during
the six month period ended June 30, 1994. Other income also includes
interest income earned on investments for each of the respective periods.
In June 1995, the Partnership announced that it will purchase in the market
from time to time up to 150,000 of its units at prices not to exceed $7.50
per unit. The unit purchase program will continue until the end of the
year. During the quarter ended June 30, 1995, the Partnership purchased
1,439 units.
The Partnership has made quarterly cash distributions to its unitholders
since 1987. On September 1, 1995, a cash distribution of 18.5 cents per
unit will be paid to unitholders of record on August 1, 1995.
6
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Designation of Exhibit
in this Quarterly Report
on Form 10-Q Description of Exhibit
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27 Financial Data Schedule
(b) Reports on Form 8-K: None
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.
POWER TEST INVESTORS LIMITED PARTNERSHIP
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(Registrant)
By:____________________________________________
Leo Liebowitz, President, Treasurer and a
Director of CLS General Partnership Corp.,
the General Partner (Principal Financial
and Accounting Officer)
Dated: August 10, 1995
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF POWER TEST INVESTORS LIMITED
PARTNERSHIP AS OF JUNE 30, 1995 AND FOR THE SIX MONTHS THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL
STATEMENTS.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 2,608
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 50,208
<DEPRECIATION> 18,859
<TOTAL-ASSETS> 39,571
<CURRENT-LIABILITIES> 0
<BONDS> 36,522
<COMMON> 0
0
0
<OTHER-SE> 2,707
<TOTAL-LIABILITY-AND-EQUITY> 39,571
<SALES> 0
<TOTAL-REVENUES> 5,600
<CGS> 0
<TOTAL-COSTS> 451
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,771
<INCOME-PRETAX> 2,929
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,929
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,929
<EPS-PRIMARY> .45
<EPS-DILUTED> .45
</TABLE>
