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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 March 31, 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
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POWER TEST INVESTORS LIMITED PARTNERSHIP
INDEX
PART I. FINANCIAL INFORMATION Page Number
Item 1. Consolidated Financial Statements:
Balance Sheets - March 31, 1995 and December 31, 1994 1
Statements of Income - three months ended
March 31, 1995 and 1994 2
Statements of Cash Flows - three months ended
March 31, 1995 and 1994 3
Notes to Consolidated Financial Statements 4 - 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 8
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POWER TEST INVESTORS LIMITED PARTNERSHIP
(a New York limited partnership)
CONSOLIDATED BALANCE SHEETS
March 31, 1995 and December 31, 1994
March 31, December 31,
1995 1994
(unaudited)
- -------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 2,812,012 $ 2,523,681
Receivable-condemnation, net 164,958 --
Net investment in direct financing leases 5,575,949 5,747,246
Fixed assets, at cost, net of accumulated
depreciation of $18,667,204 and $18,523,870,
respectively 31,540,697 31,903,386
Deferred charges, net of accumulated amortization
of $2,366,332 and $2,332,576, respectively 251,403 285,159
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$40,345,019 $40,459,472
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accrued liabilities, primarily interest $ 311,226 $ 358,438
Mortgages payable 37,301,413 37,908,888
Partners' capital, 6,510,975 units of
general and limited partnership interests
issued and outstanding 2,732,380 2,192,146
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$40,345,019 $40,459,472
=========== ===========
See accompanying notes.
1
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POWER TEST INVESTORS LIMITED PARTNERSHIP
(a New York limited partnership)
CONSOLIDATED STATEMENTS OF INCOME
Three months ended March 31, 1995 and 1994
(unaudited)
1995 1994
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Revenues:
Rental income $2,248,921 $2,291,515
Interest on direct financing leases 274,089 306,341
Other income 539,473 81,947
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3,062,483 2,679,803
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Expenses:
Interest 886,460 869,962
General and administrative 192,909 180,112
Depreciation and amortization 225,843 227,031
Income applicable to minority interest 17,612 14,142
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1,322,824 1,291,247
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Net income $1,739,659 $1,388,556
========== ==========
Net income per unit $ .27 $ .21
========== ==========
Distributions per unit $ .185 $ .185
========== ==========
Weighted average units outstanding 6,510,975 6,510,975
========== ==========
See accompanying notes.
2
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POWER TEST INVESTORS LIMITED PARTNERSHIP
(a New York limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31, 1995 and 1994
(unaudited)
1995 1994
- -------------------------------------------------------------------------------
Cash flows from operating activities:
Net income $1,739,659 $1,388,556
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 225,843 227,031
Amortization of investment in direct
financing leases 171,297 145,954
(Gain) on dispositions of fixed assets (497,969) (65,860)
Minority interest 17,612 14,142
Changes in assets and liabilities:
Increase in receivable-condemnation, net (164,958) --
Decrease in accrued liabilities (47,212) (16,907)
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Net cash provided by operating activities 1,444,272 1,692,916
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Cash flows from investing activities:
Proceeds from dispositions of fixed assets 668,571 92,257
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Net cash provided by investing activities 668,571 92,257
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Cash flows used in financing activities:
Mortgage principal payments (607,475) (761,612)
Cash distributions (1,217,037) (1,217,037)
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Net cash used in financing activities (1,824,512) (1,978,649)
---------- ----------
Net increase (decrease) in cash and cash equivalents 288,331 (193,476)
Cash and cash equivalents at beginning of period 2,523,681 1,983,574
---------- ----------
Cash and cash equivalents at end of period $2,812,012 $1,790,098
========== ==========
Supplemental disclosure of cash flow information -
Cash paid during the period for interest $ 887,542 $ 881,295
See accompanying notes.
3
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POWER TEST INVESTORS LIMITED PARTNERSHIP
(a New York limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31,1995
(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%.
4
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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 three
months ended March 31, 1995 and 1994 has been reflected as "Income applicable
to minority interest" in the accompanying consolidated statements of income.
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 three months
ended March 31, 1995 386,739 1,352,920 1,739,659
Distributions to unitholders (280,283) (936,754) (1,217,037)
Income applicable to minority interest 17,612 -- 17,612
--------- ---------- ----------
Balance, March 31, 1995 $ 538,816 $2,193,564 $2,732,380
========= ========== ==========
As of March 31, 1995 and December 31, 1994, the General Partner's minority
interest amounted to $19,410 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 three months ended March 31, 1995.
6. Condemnation of Property:
The New Haven terminal was subject to a partial condemnation for a road
widening which has resulted in a taking of approximately 5,100 square feet of
land. The lease was not terminated but the rent has been reduced by $14,564
per annum in accordance with the terms of the lease. Under the provisions of
the lease agreement, the Operating Partnership will receive $164,958
5
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and Getty will receive $150,042 of the condemnation award. 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
three months ended March 31, 1995.
6
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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 months ended March 31, 1995 as
compared to the prior year period is due to the sale of certain properties.
The increase in other income for the three months ended March 31, 1995 as
compared to the prior year period is principally due to a net gain of $339,475
from the sale of a property in March 1995 and a net gain of $158,494 resulting
from the partial condemnation of the New Haven terminal, as compared to a net
gain of $65,860 from the sale of a property in January 1994. Other income also
includes interest income earned on investments for each of the respective
periods.
The increase in interest expense for the three months ended March 31, 1995 as
compared to the 1994 period was principally due to an increase in the prime
rate, partially offset by a reduction of the principal balances under the
Operating Partnership's outstanding mortgages.
The Partnership has made quarterly cash distributions to its unitholders since
1987. On June 1, 1995, a cash distribution of 18.5 cents per unit will be paid
to unitholders of record on May 1, 1995.
7
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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: May 12, 1995
8
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<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 MARCH 31, 1995 AND FOR THE THREE MONTHS THEN ENDED AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 2,812
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 50,208
<DEPRECIATION> 18,667
<TOTAL-ASSETS> 40,345
<CURRENT-LIABILITIES> 0
<BONDS> 37,301
<COMMON> 0
0
0
<OTHER-SE> 2,732
<TOTAL-LIABILITY-AND-EQUITY> 40,345
<SALES> 0
<TOTAL-REVENUES> 3,062
<CGS> 0
<TOTAL-COSTS> 226
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 886
<INCOME-PRETAX> 1,740
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,740
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,740
<EPS-PRIMARY> .27
<EPS-DILUTED> .27
</TABLE>
