UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of
- --------- the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 1999
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or
Transition Report Pursuant to Section 13 or 15(d) of
- --------- the Securities Exchange Act of 1934
For the Transition period from to
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Commission File Number: 0-15463
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MENDIK REAL ESTATE LIMITED PARTNERSHIP
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Exact Name of Registrant as Specified in its Charter
New York 11-2774249
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State or Other Jurisdiction of I.R.S. Employer Identification No.
Incorporation or Organization
3 World Financial Center, 29th Floor,
New York, NY Attn.: Andre Anderson 10285
- ------------------------------------ -----
Address of Principal Executive Offices Zip code
(212) 526-3183
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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
---- ----
<PAGE>
2
MENDIK REAL ESTATE LIMITED PARTNERSHIP
AND CONSOLIDATED VENTURE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
At March 31, At December 31,
1999 1998
(unaudited) (audited)
- --------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and cash equivalents $ 3,287,111 $50,641,931
Rent and other receivables 423,603 1,157,368
Due from affiliates 76,420 --
Other assets 5,000 5,000
- --------------------------------------------------------------------------------
Total Assets $ 3,792,134 $51,804,299
================================================================================
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 396,469 $ 941,067
Due to affiliates 357,318 480,615
Distribution payable -- 47,456,352
---------------------------
Total Liabilities 753,787 48,878,034
---------------------------
Partners' Capital (Deficit):
General Partners (349,176) (350,297)
Limited Partners (395,169 units outstanding) 3,387,523 3,276,562
---------------------------
Total Partners' Capital 3,038,347 2,926,265
- --------------------------------------------------------------------------------
Total Liabilities and Partners' Capital $ 3,792,134 $51,804,299
================================================================================
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (DEFICIT)
For the three months ended March 31, 1999
Special
Limited General Limited
Partners Partners Partner Total
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1998 $ 3,276,562 $ (350,297) $ -- $ 2,926,265
Net income 110,961 1,121 -- 112,082
- --------------------------------------------------------------------------------
Balance at March 31, 1999 $ 3,387,523 $ (349,176) $ -- $ 3,038,347
================================================================================
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE>
3
MENDIK REAL ESTATE LIMITED PARTNERSHIP
AND CONSOLIDATED VENTURE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended March 31,
1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Income
Rent $ -- $ 9,261,488
Interest 210,000 63,009
---------------------------
Total Income 210,000 9,324,497
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Expenses
Property operating -- 4,797,564
Amortization -- 49,183
Interest -- 1,387,394
General and administrative 97,918 42,516
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Total Expenses 97,918 6,276,657
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Income before minority interest 112,082 3,047,840
Minority interest in consolidated venture -- (954,606)
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Net Income $ 112,082 $ 2,093,234
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Net Income Allocated:
To the General Partners $ 1,121 $ 20,932
To the Special Limited Partner -- --
To the Limited Partners 110,961 2,072,302
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$ 112,082 $ 2,093,234
================================================================================
Per limited partnership unit
(395,169) outstanding: $.28 $ 5.24
- --------------------------------------------------------------------------------
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE>
4
MENDIK REAL ESTATE LIMITED PARTNERSHIP
AND CONSOLIDATED VENTURE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31,
1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net income $ 112,082 $ 2,093,234
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization -- 49,183
Minority interest in consolidated venture -- 954,606
Increase (decrease) in cash arising from changes in
operating assets and liabilities:
Restricted cash -- (140,547)
Rent and other receivables 733,765 174,385
Due from affiliates (76,420) --
Deferred rent receivable -- (484,629)
Other assets -- (4,218,643)
Accounts payable and accrued expenses (544,598) 1,680,251
Deferred income -- 213,834
Due to affiliates (123,297) (285,894)
Security deposits payable -- 44,386
Accrued interest payable -- 26,472
---------------------------
Net cash provided by operating activities 101,532 106,638
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Cash Flows From Investing Activities
Additions to real estate assets -- (114,717)
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Net cash used for investing activities -- (114,717)
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Cash Flows From Financing Activities
Distribution to partners (47,456,352) --
---------------------------
Net cash used for financing activities (47,456,352) --
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Net decrease in cash and cash equivalents (47,354,820) (8,079)
Cash and cash equivalents, beginning of period 50,641,931 4,786,697
- --------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 3,287,111 $ 4,778,618
================================================================================
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest $ -- $ 1,389,269
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</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE>
5
MENDIK REAL ESTATE LIMITED PARTNERSHIP
AND CONSOLIDATED VENTURE
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The unaudited consolidated financial statements should be read in conjunction
with the Partnership's annual 1998 audited financial statements within Form
10-K.
The unaudited consolidated interim financial statements include all normal and
reoccurring adjustments which are, in the opinion of management, necessary to
present a fair statement of financial position as of March 31, 1999 and the
results of operations for the three months ended March 31, 1999 and 1998,
statements of cash flows for the three months ended March 31, 1999 and 1998 and
the statement of partners' capital (deficit) for the three months ended March
31, 1999. Results of operations for the period are not necessarily indicative of
the results to be expected for the full year.
The following significant events occurred subsequent to fiscal year 1998, and no
material contingency exists which would require disclosure in this interim
report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
As a result of the sale of the Properties, the Partnership paid a cash
distribution to Limited Partners, totaling $47,456,352 on February 2, 1999.
<PAGE>
6
MENDIK REAL ESTATE LIMITED PARTNERSHIP
AND CONSOLIDATED VENTURE
Part I, Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
On November 17, 1998, the Partnership completed the sale of its ownership
interests in its Properties (the "Sale") to affiliates of Vornado Realty Trust,
a publicly-traded real estate investment trust ("Vornado") and an affiliate of
Mendik RELP Corporation, a General Partner, for a selling price of $52,212,198,
net of the Partnership's share of existing mortgage debt on Two Park Avenue and
Saxon Woods, litigation settlement costs, and closing adjustments. The
Partnership's approximate 60% interest in Two Park Avenue was sold for
approximately $34.6 million, after deducting $39 million of existing mortgage
debt. The sales proceeds were a combination of cash and common stock of Vornado.
The remaining 40% interest in the Park Avenue Property was owned by an affiliate
of Vornado. Saxon Woods Corporate Center and 330 West 34th Street were purchased
for an aggregate price of $30 million in cash. The Sale resulted in a gain on
sale of real estate of $3,581,009 which was reflected in the Partnership's
results of operations for the year ended December 31, 1998.
The Sale was completed as part of the settlement of three purported class action
lawsuits that were brought in the Supreme Court of the State of New York for New
York County (the "Court") against the General Partners of the Partnership and
certain affiliates of Mendik RELP Corporation by certain limited partners of the
Partnership (the "Settlement"). The Sale occurred following the Court's judgment
of approval of the Settlement, which became final on November 6, 1998.
As a result of the completion of the Sale, the Partnership paid a cash
distribution to the Limited Partners on February 2, 1999, in the amount of
$82.45 per Class A Unit and $182.91 per Class B Unit. Certain funds have been
set aside to provide for the Partnership's ongoing liabilities and expenses
through dissolution. Any cash remaining after payment of these expenses will be
distributed to the Limited Partners when the Partnership is dissolved. The
General Partners are currently in the process of winding up the Partnership's
affairs, and expect to dissolve the Partnership during 1999.
At December 31, 1998, the Partnership had a distribution payable totaling
$47,456,352, which distribution was paid on February 2, 1999 to Limited
Partners. A distribution of Vornado common shares was made to the limited
partners in 1998 for those investors electing to receive Vornado common shares
instead of cash. Such distribution represents net proceeds from the Sale and a
portion of the Partnership's cash reserves. Certain funds have been set aside to
provide for the Partnership's ongoing liabilities and expenses through
dissolution. Any cash remaining after payment of these expenses will be
distributed to the Limited Partners when the Partnership is dissolved.
Operating Cash Balances and Other Assets
- ----------------------------------------
The Partnership's cash balances were $3,287,111 at March 31, 1999, decreasing
from $50,641,931 at December 31, 1998. The decrease is due to distributions paid
to unitholders.
Rent and other receivables totaled $423,603 at March 31, 1999, compared to
$1,157,368 at December 31, 1998. The $733,765 decrease is primarily due to the
collection of rents receivable from certain tenants at the Partnership's former
Properties.
Liabilities
- -----------
Accounts payable and accrued expenses decreased by $544,598 to $396,469 at March
31, 1999, compared to $941,067 at December 31, 1998. The decrease is the result
of payment of 1998 expenses and lower 1999 expenses due to the sale of the
properties' interests at November 17, 1998.
<PAGE>
7
MENDIK REAL ESTATE LIMITED PARTNERSHIP
AND CONSOLIDATED VENTURE
Results of Operations
- ---------------------
For the three-month period ended March 31, 1999, interest income was $210,000,
compared to $63,009 for the three-month period ended March 31, 1998. The
increase is primarily due to higher average cash balances maintained by the
Partnership in 1999 due to the sale of the properties.
For the three months ended March 31, 1999, the Partnership generated net income
of $112,082, compared to $2,093,234 for the corresponding period in 1998. The
decrease in net income is primarily attributable to the sale of the properties
on November 17, 1998.
Rental income for the three months ended March 31, 1999 totaled $-0-, compared
to $9,261,488 for the corresponding period in 1998. The decrease is the result
of the sale of the properties on November 17, 1998.
Property operating expenses totaled $-0- for the three months ended March 31,
1999, compared to $4,797,564 for the corresponding period in 1998. The decrease
is the result of the sale of the properties on November 17, 1998.
Amortization expense for the three months ended March 31, 1999 totaled $-0-,
compared to $49,183 for the corresponding period in 1998. The mortgage costs
were charged against the sale of the properties on November 17, 1998. The
decrease in amortization expense is due to the transfer of the Partnership's
loan to the buyers of the properties.
Interest expense for the three months ended March 31, 1999 is $-0-, compared to
$1,387,394 for the corresponding period in 1998 as a result of the mortgages and
loans that were assigned to the buyers at the sale of the properties on November
17, 1998.
General and administrative expenses totaled $97,918 for the three months ended
March 31, 1999, compared to $42,516 for the corresponding period in 1998. The
increase is primarily the result of overaccrual of legal, audit and other
professional fees as of December 31, 1997.
Part II Other Information
Items 1-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits -
(27) Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the three-month period
covered by this report.
<PAGE>
8
MENDIK REAL ESTATE LIMITED PARTNERSHIP
AND CONSOLIDATED VENTURE
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.
MENDIK REAL ESTATE LIMITED PARTNERSHIP
BY: NY REAL ESTATE SERVICES 1 INC.
General Partner
Date: May 17, 1999 BY: /s/Mark J. Marcucci
--------------------------------------------
Name: Mark J. Marcucci
Title: President and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Mar-31-1999
<CASH> 3,287,111
<SECURITIES> 000
<RECEIVABLES> 423,603
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 3,792,134
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 3,792,134
<CURRENT-LIABILITIES> 396,469
<BONDS> 000
000
000
<COMMON> 000
<OTHER-SE> 3,038,347
<TOTAL-LIABILITY-AND-EQUITY> 3,792,134
<SALES> 000
<TOTAL-REVENUES> 210,000
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 97,918
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 112,082
<INCOME-TAX> 000
<INCOME-CONTINUING> 112,082
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 112,082
<EPS-PRIMARY> .28
<EPS-DILUTED> .28
</TABLE>
