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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934.
For the period ended September 30, 1995
or
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ___________ to ____________
Commission File Number 0-15802
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QSR Income Properties, Ltd., a California Limited Partnership
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(Exact name of registrant as specified in its charter)
California 95-4084042
- - ------------------------------------------ -------------------------
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
600 N. Brand Boulevard, Glendale, California 91203
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(Address of principal executive officer) (Zip Code)
Registrant's telephone number, including area code: (818) 244-8080
--------------
Indicate by check mark whether the registrant (1) had 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.
X
----- -----
Yes No
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QSR INCOME PROPERTIES, LTD.,
A CALIFORNIA LIMITED PARTNERSHIP
INDEX
PART I. FINANCIAL INFORMATION
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Item 1. Condensed Balance Sheets at September 30, 1995
and December 31, 1994 2
Condensed Statements of Operations for the three
and nine month periods ended September 30, 1995 and 1994 3
Condensed Statement of Partners' Equity for the
nine months ended September 30, 1995 4
Condensed Statements of Cash Flows for the nine
month periods ended September 30, 1995 and 1994 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7 - 8
PART II. OTHER INFORMATION 9
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QSR INCOME PROPERTIES, LTD.,
A CALIFORNIA LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
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September 30, December 31,
1995 1994
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(Unaudited)
<S> <C> <C>
ASSETS
------
Cash and cash equivalents $ 1,263,000 $ 1,115,000
Accounts receivable 8,000 15,000
Notes receivable 243,000 271,000
Facilities, net 10,962,000 11,149,000
----------- -----------
$12,476,000 $12,550,000
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Accounts payable $ 176,000 $ 159,000
Partners' equity:
Limited partners' equity, $500 per
unit, 52,004 units authorized,
issued and outstanding 12,201,000 12,291,000
General partner's equity 99,000 100,000
----------- -----------
Total partners' equity 12,300,000 12,391,000
----------- -----------
$12,476,000 $12,550,000
=========== ===========
</TABLE>
See accompanying notes to Condensed Financial Statements
2
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QSR INCOME PROPERTIES, LTD.,
A CALIFORNIA LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ----------------------
1995 1994 1995 1994
-------- -------- -------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Lease income $257,000 $252,000 $795,000 $763,000
Interest income 20,000 30,000 64,000 76,000
-------- -------- -------- --------
277,000 282,000 859,000 839,000
-------- -------- -------- --------
COSTS AND EXPENSES:
Cost of operations 35,000 41,000 104,000 103,000
Depreciation and amortization 62,000 62,000 187,000 187,000
Idle facility costs 10,000 7,000 31,000 25,000
Partnership administrative expenses 18,000 16,000 71,000 70,000
-------- -------- -------- --------
125,000 126,000 393,000 385,000
-------- -------- -------- --------
Net income $152,000 $156,000 $466,000 $454,000
======== ======== ======== ========
Allocation of net income
Limited partners $135,000 $144,000 $417,000 $416,000
General partner 17,000 12,000 49,000 38,000
-------- -------- -------- --------
$152,000 $156,000 $466,000 $454,000
======== ======== ======== ========
Limited partners' allocation per unit $ 2.66 $ 2.77 $ 8.02 $ 8.00
======== ======== ======== ========
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See accompanying notes to Condensed Financial Statements
3
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QSR INCOME PROPERTIES, LTD.,
A CALIFORNIA LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
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Limited General
Partners Partner Total
----------- --------- -----------
<S> <C> <C> <C>
Balances at December 31, 1994 $12,291,000 $100,000 $12,391,000
Net income 417,000 49,000 466,000
Distributions (507,000) (50,000) (557,000)
----------- -------- -----------
Balances at September 30, 1995 $12,201,000 $ 99,000 $12,300,000
=========== ======== ===========
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See accompanying notes to Condensed Financial Statements
4
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QSR INCOME PROPERTIES, LTD.,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
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<CAPTION>
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 466,000 $ 454,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 187,000 187,000
Decrease in accounts receivable 7,000 4,000
Increase (decrease) in accounts payable 17,000 (18,000)
---------- ----------
Total adjustments 211,000 173,000
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Net cash provided by operating activities 677,000 627,000
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Cash flows from investing activities:
Proceeds from notes receivable 28,000 28,000
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Net cash provided by investing activities 28,000 28,000
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Cash flows from financing activities:
Distributions paid to partners (557,000) (428,000)
---------- ----------
Net cash used in financing activities (557,000) (428,000)
---------- ----------
Net increase in cash and cash equivalents 148,000 227,000
Cash and cash equivalents at the beginning of the period 1,115,000 2,236,000
---------- ----------
Cash and cash equivalents at the end of the period $1,263,000 $2,463,000
========== ==========
</TABLE>
See accompanying notes to Condensed Financial Statements
5
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QSR INCOME PROPERTIES, LTD.,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. The accompanying unaudited condensed financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations, although management believes that the disclosures contained
herein are adequate to make the information presented not misleading. These
unaudited condensed financial statements should be read in conjunction with
the financial statements and related notes appearing in the Partnership's
Form 10-K for the year ended December 31, 1994.
2. In the opinion of management, the accompanying unaudited condensed financial
statements reflect all adjustments, consisting of only normal accruals,
necessary to present fairly the Partnership's financial position at September
30, 1995 and December 31, 1994, the results of its operations for the three
and nine months ended September 30, 1995 and 1994 and its cash flows for the
nine months then ended.
3. The results of operations for the three and nine months ended September 30,
1995 are not necessarily indicative of the results expected for the full
year.
6
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QSR INCOME PROPERTIES, LTD.,
A CALIFORNIA LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEPTEMBER 30, 1995
The Partnership was formed to acquired and operate pizza restaurants. All
twenty-three of the Partnership's restaurants were closed because of
disappointing operating results. Of the twenty-three restaurants closed, three
have been sold, three lease commitments have been terminated and fifteen
facilities have been leased to unaffiliated third parties. The Partnership is
continuing efforts to lease or sell its final two closed restaurants that have
not yet been redeployed. These properties may not be redeployable in the
foreseeable future because of current market conditions.
Results of Operations
- - ---------------------
The Partnership's net income for the three months ended September 30, 1995
decreased $4,000 over the same period in 1994. Net income for the nine months
ended September 30, 1995 increased $12,000 over the same period in 1994. The
decrease for the three months ended September 30, 1995 is due primarily to a
decrease in interest income. The increase in the nine months ended September
30, 1995 is primarily attributable to an increase in lease income.
Lease income for the three and nine months ended September 30, 1995
increased $5,000 and $32,000, respectively, over the same period in 1994 as the
result of scheduled escalations in lease income. Included in lease income for
the nine month periods ended September 30, 1995 and 1994 is approximately
$26,000 and $25,000, respectively, of additional lease income under a percentage
rent feature with respect to incremental sales above specified levels.
Interest income decreased $10,000 and $22,000 for the three and nine month
periods ended September 30, 1995 over the same periods in 1994 due to a decrease
in cash balances in 1995 over 1994 amounts. The decrease in cash balances is
due to a one-time special distribution in December 1994 aggregating $1,442,000.
Cost of operations for the nine month period ended September 30, 1995
remained stable compared to the same period in 1994. Cost of operations
increased $6,000 for the three month period ended September 30, 1995 over the
same period in 1994 due primarily to scheduled increases in ground lease expense
on facilities located on leased land.
7
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Idle facility costs increased slightly for the three and nine month period
ended September 30, 1995 over the same period in 1994 due to repair and
maintenance cost on its two closed facilities that have not yet been redeployed.
Liquidity and capital resources
- - -------------------------------
For the nine month period ended September 30, 1995, the Partnership's
activities generated cash flow of $677,000. This represents an increase over
cash flow of $627,000 generated by the Partnership for the nine month period
ended September 30, 1994. Cash flow from the Partnership's operations have been
sufficient to meet all current obligations of the Company.
For the three month period ended September 30, 1995 the Partnership made a
$3.25 distribution per Partnership unit. This distribution represents an
increase of $.75 per Partnership unit over the distribution for the same period
in 1994.
8
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PART II. OTHER INFORMATION
Items 1 through 5 are not applicable.
Item 6 Exhibits and Reports on Form 8-K.
---------------------------------
(a) The following exhibit is included herein:
(27) Financial Data Schedule
(b) Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: November 13, 1995
QSR Income Properties, Ltd.,
a California Limited Partnership
BY: /s/ B. Wayne Hughes
-------------------------------
B. Wayne Hughes
General Partner
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<CASH> 1,263,000
<SECURITIES> 0
<RECEIVABLES> 251,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,514,000
<PP&E> 13,983,000
<DEPRECIATION> (3,021,000)
<TOTAL-ASSETS> 12,476,000
<CURRENT-LIABILITIES> 176,000
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 12,300,000
<TOTAL-LIABILITY-AND-EQUITY> 12,476,000
<SALES> 0
<TOTAL-REVENUES> 859,000
<CGS> 0
<TOTAL-COSTS> 291,000
<OTHER-EXPENSES> 102,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 466,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 466,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 466,000
<EPS-PRIMARY> 8.02
<EPS-DILUTED> 0
</TABLE>
