UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 31, 1997
U.S. RESTAURANT PROPERTIES MASTER L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-9079 41-1541631
(STATE OF OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
5310 Harvest Hill Rd.
Suite 270, LB 168
Dallas, Texas 75230
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
972-387-1487
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
<PAGE>
U.S. RESTAURANT PROPERTIES MASTER L.P.
Explanatory Note..............................................................3
Item 2. Acquisition or Disposition of Assets..................................3
Item 7. Financial Statements, Pro Forma Information and Exhibits..............5
Financial Statement of RR Restaurants 1986-1 Properties
Sold to U.S. Restaurant Properties Master L.P.....................7
Financial Statement of Selected Properties Sold to
U.S. Restaurant Properties Master L.P.(Bruegger's Acquisition)...11
Financial Statement of Tulip Properties Limited Property
Sold to U.S. Restaurant Properties Master L.P....................17
Financial Statement of Sybra, Inc. Applicable to the Acquisition
of Seventy-Five Arby's Restaurant Properties by
U.S. Restaurant Properties Master L.P............................20
Pro forma Financial Information......................................22
Exhibit 23
(a) Consent of Deloitte & Touche, LLP
(b) Consent of Coopers & Lybrand, L.L.P.
2
<PAGE>
EXPLANATORY NOTE
U.S. Restaurant Properties Master L.P., a Delaware limited partnership (the
"Partnership") hereby amends its Form 8-K dated March 31, 1997 as filed with the
Securities and Exchange Commission on April 14, 1997 as follows:
The Partnership hereby submits the financial statements required for the
properties acquired in 1997 and proforma information as shown on Item 7 and as
further described in Item 2.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 30, 1997, U.S. Restaurant Properties Master L.P. acquired 61 Arby's(R)
restaurant properties and 14 leaseholds located in Florida, Michigan, Texas and
Pennsylvania from Sybra, Inc., a Michigan corporation and Valcor, Inc., a
Delaware corporation. The Acquisition was done pursuant to one asset purchase
agreement. The purchase price equaled $45,000,000 in cash and other capitalized
costs of approximately $1,289,000. In connection with this transaction, the
Partnership sold 222,222 partnership units to an affiliate of the Seller of the
Arby's restaurant properties for net proceeds of $6,000,000 under a separate
agreement. The Registrant used funds from operations, proceeds from the sale of
partnership units and its bank line of credit to fund this acquisition.
On March 31, 1997, U.S. Restaurant Properties Master L.P. (the "Registrant")
acquired seven restaurant properties located in Illinois and Indiana from RR
Restaurants 1986-1. This transaction in combination with other restaurant
properties acquired between January 1, 1997 and March 31, 1997 (date of
reportable event) are deemed significant in aggregate to the Registrant's total
assets as previously reported on Form 10-K. The RR Restaurants 1986-1
transaction consists of two Pizza Hut(R) restaurant properties, one Popeye's(R)
restaurant property, four regional brand restaurant properties. The acquisition
was done pursuant to one purchase and sales agreement. The purchase price
equaled $3,884,262 in cash and other capitalized costs of approximately $81,000.
The selling entity was RR Restaurants 1986-1, a California limited partnership.
The Registrant used its bank line of credit to fund this acquisition.
On March 17, 1997, the Registrant acquired 16 Bruegger's Bagel restaurant
properties located in New York, Minnesota, Iowa and North Carolina. These
restaurant properties are collectively referred to as the "Bruegger's
acquisition", The Bruegger's acquisition was done pursuant to 12 contribution
agreements. The sellers to this transaction included 12 limited partnerships
which consist of Ben Abba Limited Partnership, a New York limited partnership,
West Taft Road Limited Partnership, a New York limited partnership, Learned
Bagels Limited Partnership, a New York limited partnership, Sunnymorning Limited
Partnership, a Vermont limited partnership, Congress Street Partners, LTD, a
Vermont limited partnership, Hawkeye Preservation Limited Partnership, an Iowa
limited partnership, Riverside Limited Partnership, an Iowa limited partnership,
Bull City Bank Building Limited Partnership, a North Carolina limited
partnership, 104 W. Franklin Limited Partnership, a North Carolina limited
partnership, Hillsboro Wolfpack Limited Partnership, a North Carolina limited
partnership, Norstar Real Estate Limited Partnership, a Minnesota limited
partnership and Twin Cities II Limited Partnership, a Minnesota limited
partnership. The purchase price for the Bruegger's acquisition equaled
$10,790,750 in cash and 118,579 partnership units (valued at $28.00 per unit).
The other capitalized costs on this acquisition were approximately $344,000. The
partnership units are guaranteed to have a market value of $25.30 on the second
anniversary date of the closing. The partnership units market value on the
closing date equaled $28.00 per partnership unit. The Registrant used its bank
line of credit to fund the cash portion of the Bruegger's Acquisition.
3
<PAGE>
On March 11, 1997, the Registrant acquired one Chi-Chi's Restaurant located in
Florida from Tulip Properties Limited. The acquisition was done pursuant to one
sales and purchase agreement. The purchase price equaled $1,400,000 in cash and
other capitalized costs of approximately $21,000. The selling entity was Tulip
Properties Limited, a California limited partnership. The Registrant used its
bank line of credit to fund this transaction.
On February 27, 1997, March 24, 1997, and April 1, 1997 the Registrant acquired
two, one and three Schlotzsky's(R) restaurant properties, respectively from
Schlotzsky's Real Estate, Inc, a Texas corporation. The properties are located
in Arizona, Michigan, New Mexico, North Carolina, and Tennessee. The
acquisitions were done pursuant to five separate sale and purchase agreements.
These restaurant properties represent newly developed properties which do not
have any historical operations. The purchase price for these restaurant
properties equaled $4,796,738 in cash and other capitalized costs of
approximately $59,000. The Registrant used its bank line of credit to fund this
acquisition.
In addition to the above acquisitions, 17 other properties (the "Other
Properties") were acquired in eight different transactions during the period
January 1, 1997 through April 30, 1997. The properties were purchased for an
aggregate cash purchase price of approximately $7,099,000. These properties
consisted of six Pizza Hut restaurant properties, two Arby's restaurant
properties, and nine regional chain restaurants. The Registrant used funds from
operations, proceeds from the sale of Partnership units, and its bank line of
credit to fund these acquistions.
The Sellers are not affiliated with the Registrant, any director or officer of
the Registrant or any associate of any such director or officer.
The purchase prices, which were negotiated with the Sellers, were determined
through internal analysis by the Registrant of historical cash flows and fair
market values of the acquired Properties.
4
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
a)(3) Combined Statement of Revenues and Certain Expenses of RR Restaurant
1986-1 Properties Sold to U.S.Restaurant Properties Master L.P.
for the year ended December 31, 1996
Combined Statement of Revenues and Certain Expenses of Selected
Properties Sold to U.S. Restaurant Properties Master L.P.
(Bruegger's Acquisition) for the year ended December 31, 1996
Statement of Revenues and Certain Expenses of Tulip Properties
Limited Property Sold to U.S. Restaurant Properties Master L.P.
for the year ended December 31, 1996
Statement of Revenues and Direct Operating Expenses Applicable to
the Acquisition of Seventy-Five Arby's Restaurant Properties by
U.S. Restaurant Properties Master L.P. for the year ended
December 28, 1996
b) Pro forma Financial Information
c) Exhibits
23 (a) Consent of Deloitte & Touche, LLP
23 (b) Consent of Coopers & Lybrand, L.L.P.
5
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
U.S. Restaurant Properties Master L.P.
We have audited the accompanying combined statement of revenues and certain
expenses of RR Restaurants 1986-1 (the "Partnership") Properties Sold to U.S.
Restaurant Properties Master L.P. for the year ended December 31, 1996. This
financial statement is the responsibility of the Partnership's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying combined statement of revenues and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of U.S.
Restaurant Properties Master L.P.. Material amounts, described in Note 1 to the
combined statement of revenues and certain expenses, that would not be
comparable to those resulting from the proposed future operations of the
properties sold to U.S. Restaurant Properties Master L.P. are excluded and the
statement is not intended to be a complete presentation of the revenues and
expenses of those properties.
In our opinion, such financial statement presents fairly, in all material
respects, the combined revenues and certain expenses of RR Restaurants 1986-1
Properties Sold to U.S. Restaurant Properties Master L.P. for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
DELIOTTE & TOUCHE LLP
Dallas, Texas
May 8, 1997
6
<PAGE>
RR RESTAURANT 1986-1 PROPERTIES SOLD TO U.S. RESTAURANT PROPERTIES MASTER L.P.
COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES
YEAR ENDED DECEMBER 31, 1996
DECEMBER 31,
1996
------------
RENTAL INCOME
Minimum $ 481,642
Percentage 2,603
Cost Reimbursement Revenue 80,273
------------
TOTAL RENTAL INCOME 564,518
DIRECT EXPENSES
Real Estate Taxes 78,872
Other Costs 1,401
------------
TOTAL DIRECT EXPENSES 80,273
------------
NET RENTAL INCOME $ 484,245
============
See Accompanying Notes To Statement.
7
<PAGE>
NOTES TO RR RESTAURANT 1986-1 PROPERTIES SOLD TO U.S.RESTAURANT PROPERTIES
MASTER L.P.
1. Summary Of Significant Accounting Policies
Nature Of Operations
The accompanying Combined Statement of Revenues and Certain Expenses
includes seven properties acquired by U.S. Restaurant Properties Master
L.P. from RR Restaurants 1986-1, a California limited partnership (the
"Partnership"). The statement does not include any revenues or expenses
related to any other properties owned by the Partnership. The properties
acquired include two Pizza Hut restaurant properties, one Popeye's
restaurant property, three regional brand restaurant properties and one
other rental property. In accordance with the Securities and Exchange
Commission Rule 3.14 the statement does not include expenses not
comparable to the proposed future operations of the properties such as
depreciation, interest, or any other costs that are not directly associated
with the property.
2. Use Of Estimates
The preparation of the statement in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of revenues and certain expenses during a
reporting period. Actual results could differ from those estimates.
3. Rental Income
All leases are triple net leases which require the lessee to pay all taxes,
assessments, insurance, maintenance costs and other charges related to
maintenance, repair and operation of the properties. Cost reimbursement
revenue represents amounts reimbursed by the tenants to the Partnership for
real estate taxes and other costs incurred. Certain information regarding
each property lease is set forth in the table below.
<TABLE>
<CAPTION>
MINIMUM
ANNUAL PERCENTAGE TERMINATION
LOCATION RENTAL RENTALS DATE
- --------------------- ------------------------------------------- ------------------------- ---------------------
<S> <C> <C> <C>
Aurora, IL $ 87,318 per year through 3/31/98 3.0% of sales in excess October 2003 plus
95,183 per year 4/1/98 through 3/31/01 of 14 times base rent two five-year
103,782 per year 4/1/01 through 10/6/03 renewal options
Carpentersville, IL 64,400 per year through 12/31/00 3.0% of sales in excess December 2003 plus
74,060 per year 1/1/01 through 12/31/05 of $1,400,000 two five-year
renewal options
DeKalb, IL 31,200 per year through 12/31/97 N/A December 1998 plus
35,400 per year through 12/31/98 one five-year
renewal option
Downer's Grove, IL 83,873 per year through 3/31/98 3.0% of sales in excess June 2003 plus two
91,427 per year 4/1/98 through 3/31/01 of 14 times base rent five-year renewal
99,687 per year 4/1/01 through 6/13/03 options
Bloomingdale, IL 62,100 per year through 10/29/99 2.0% of sales in excess October 2004 plus
71,415 per year 10/30/99 through of 16 times base rent two five-year
10/29/04 renewal options
Indianapolis, IN 78,831 per year through 1/31/99 2.0% of sales in excess January 2004 plus
91,387 per year 2/1/99 through 1/31/04 of $700,000 two five-year
renewal options
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
NOTES TO RR RESTAURANT 1986-1 PROPERTIES SOLD TO U.S. RESTAURANT PROPERTIES MASTER L.P.
MINIMUM
ANNUAL PERCENTAGE TERMINATION
LOCATION RENTAL RENTALS DATE
- --------------------- ------------------------------------------- ------------------------- ---------------------
<S> <C> <C> <C>
Carmel, IN 73,920 per year through 7/18/97 N/A July 2004 plus two
82,790 per year 7/19/97 through 7/18/01 five-year renewal
92,725 per year 7/19/01 through 7/18/04 options
</TABLE>
The following is a schedule of minimum rental income on non-cancelable
leases as of December 31, 1996
1997 $ 485,338
1998 502,344
1999 487,793
2000 496,602
2001 518,746
Thereafter 1,251,353
------------
$ 3,742,176
============
9
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
U.S. Restaurant Properties Master L.P.
We have audited the accompanying combined statement of revenues and certain
expenses of Selected Properties Sold to U.S. Restaurant Properties Master L.P.
(Bruegger's Acquisition) for the year ended December 31, 1996. This financial
statement is the responsibility of the management of the Partnerships',
as defined in Note 1 to the combined statement of revenues and certain expenses.
Our responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying combined statement of revenues and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of U.S.
Restaurant Properties Master L.P.. Material amounts, described in Note 1 to the
combined statement of revenues and certain expenses, that would not be
comparable to those resulting from the proposed future operations of the
properties sold to U.S. Restaurant Properties Master L.P. are excluded and the
statement is not intended to be a complete presentation of the revenues and
expenses of those properties.
In our opinion, such financial statement presents fairly, in all material
respects, the combined revenues and certain expenses of Selected Properties Sold
to U.S. Restaurant Properties Master L.P. (Bruegger's Acquisition) for the year
ended December 31, 1996, in conformity with generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the basic
combined statement of revenues and certain expenses taken as a whole. The
additional information included in the supplemental statement of revenues and
certain expenses by location is presented for the purpose of additional analysis
and is not a required part of the basic combined statement of revenues and
certain expenses. The additional information is the responsibility of the
Partnerships' management. Such information has been subjected to the auditing
procedures applied in our audit of the basic combined statement of revenues and
certain expenses and, in our opinion, is fairly stated in all material respects
when considered in relation to the basic combined statement of revenues and
certain expenses taken as a whole.
DELIOTTE & TOUCHE LLP
Dallas, Texas
May 22, 1997
10
<PAGE>
<TABLE>
<CAPTION>
SELECTED PROPERTIES SOLD TO U.S. RESTAURANT PROPERTIES MASTER L.P. (BRUEGGER'S ACQUISITION)
COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES
YEAR ENDED DECEMBER 31, 1996
<S> <C>
DECEMBER 31,
1996
--------------
RENTAL INCOME
Minimum $ 1,031,162
Percentage 96,194
Cost reimbursement revenue 195,586
--------------
TOTAL RENTAL INCOME 1,322,942
DIRECT EXPENSES
Real estate taxes 182,784
Other costs 92,975
--------------
TOTAL DIRECT EXPENSES 275,759
--------------
NET RENTAL INCOME $ 1,047,183
=============
</TABLE>
See Accompanying Notes To Statement.
11
<PAGE>
NOTES TO SELECTED PROPERTIES SOLD TO U.S. RESTAURANT PROPERTIES MASTER L.P.
(BRUEGGER'S ACQUISITION)
1. Summary Of Significant Accounting Policies
Nature Of Operations
The accompanying Combined Statement of Revenues and Certain Expenses
includes properties acquired by U.S. Restaurant Properties Master L.P. from
Ben Abba Limited Partnership, a New York limited partnership; West Taft
Road Limited Partnership, a New York limited partnership; Learned Bagels
Limited Partnership, a New York limited partnership; Sunnymorning Limited
Partnership, a Vermont limited partnership; Congress Street Partners, LTD,
a Vermont limited partnership; Hawkeye Preservation Limited Partnership, an
Iowa limited partnership; Riverside Limited Partnership, an Iowa limited
partnership; Bull City Bank Building Limited Partnership, a North Carolina
limited partnership; 104 W. Franklin Limited Partnership, a North Carolina
limited partnership; Hillsboro Wolfpack Limited Partnership, a North
Carolina limited Partnership; Norstar Real Estate Limited Partnership, a
Minnesota limited partnership and Twin Cities II Limited Partnership, a
Minnesota limited partnership. Collectively the above entities are referred
to as (the "Partnerships"). All the properties acquired are operated as
Bruegger's Bagels restaurants. The statement does not include any revenues
or expenses related to any other properties owned by the Partnerships. In
accordance with the Securities and Exchange Commission Rule 3.14 the
statement does not include expenses not comparable to the proposed future
operations of the properties such as depreciation, interest, or any other
costs that are not directly associated with the properties.
2. Use Of Estimates
The preparation of the statement in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of revenues and certain expenses during a
reporting period. Actual results could differ from those estimates.
3. Rental Income
Certain leases during fiscal year 1996 were subject to certain floor
amounts that pertain to percentage rent and other reimbursable revenues. As
of December 31, 1996 new leases were signed making all leases going forward
"triple net" leases. A triple net lease requires the lessee to pay all
taxes, assessments, insurance, maintenance costs, and other charges related
to the maintenance, repair, and operation of the properties. Cost
reimbursement revenue represents amounts reimbursed by the tenants to the
Partnerships for real estate taxes and other costs incurred. Certain
information regarding each property lease is set forth in the table below.
<TABLE>
<CAPTION>
MINIMUM
ANNUAL PERCENTAGE TERMINATION
LOCATION RENTAL RENTALS DATE
- --------------------- ------------------------------------------- ------------------------- --------------------
<S> <C> <C> <C>
Monroa Avenue $ 95,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
Rochester, NY of $1,583,333
Penn Avenue 76,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
Minneapolis, MN of $1,000,000
Syracuse, NY 60,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
of $1,000,000
Cedar Rapids, IA 35,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
of $600,000
Iowa Avenue 45,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
Iowa City, IA of $925,000
Sarasota, NY 52,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
of $960,000
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
NOTES TO SELECTED PROPERTIES SOLD TO U.S. RESTAURANT PROPERTIES MASTER L.P. BRUEGGER'S ACQUISITION)
MINIMUM
ANNUAL PERCENTAGE TERMINATION
LOCATION RENTAL RENTALS DATE
- --------------------- --------------------------------------------- ------------------------ --------------------
<C> <C> <C> <C>
32 Learned St. $125,000 for 1997 and 50% of any CPI-U N/A December 31, 2013
Albany, NY increase not to exceed 2.5% of prior
years minimum rent starting in
1998 through 12/31/13
Durham, NC 80,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
of $1,250,000
Chapel Hill, NC 70,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
of $1,166,667
14th Avenue 65,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
Minneapolis, MN of $1,000,000
Raleigh, NC 80,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
of $1,000,000
29 North Pearl 46,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
Albany, NY of $766,667
W. Lake St. 130,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
Minneapolis, MN of $1,500,000
Edina, MN 125,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
of $1,000,000
Riverside Dr. 90,000 per year through 12/31/13 6.0% of sales in excess December 31, 2013
Iowa City, IA of $1,500,000
Portland Avenue 26,000 for 1997 and 50% of any CPI-U N/A December 31, 2013
Minneapolis, MN increase not to exceed 2.5% of prior
years minimum rent starting in
1998 through 12/31/13
</TABLE>
The following is a schedule of minimum rental income on non-cancelable
leases as of December 31, 1996
1997 $ 1,200,000
1998 1,200,000
1999 1,200,000
2000 1,200,000
2001 1,200,000
Thereafter 14,400,000
------------
$20,400,000
============
4. Related Party Transactions
The General Partner of the selling partnerships is affiliated with the
entity(s) representing the tenants on all the properties sold to U.S.
Restaurant Properties Master L.P..
13
<PAGE>
<TABLE>
<CAPTION>
BRUEGGER'S BAGEL RESTAURANT PROPERTIES SOLD TO U.S. RESTAURANT PROPERTIES MASTER L.P.
SUPPLEMENTAL STATEMENT OF REVENUES AND CERTAIN EXPENSES - BY LOCATION
YEAR ENDED DECEMBER 31, 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MONROA AVE. PENN AVE IOWA AVE 32 LEARNED ST.
ROCHESTER MINNEAPOLIS N. SYRACUSE CEDAR RAPIDS IOWA CITY SARASOTA ALBANY DURHAM
NY MN NY NY IA NY NY NC
----------- ----------- ----------- ------------ --------- -------- -------------- --------
RENTAL INCOME
Minimum $ 87,500 $ 54,000 $ 58,876 $ 27,417 $ 35,000 $ 36,000 $ 143,575 $ 80,500
Percentage 0 0 0 0 1,525 22,178 0 0
Cost reimbursement revenue 17,616 18,739 5,424 2,976 4,702 7,216 9,972 7,363
------------ ----------- ----------- ------------ --------- -------- -------------- --------
TOTAL RENTAL INCOME 105,116 72,739 64,300 30,393 41,227 65,394 153,547 87,863
DIRECT EXPENSES
Real estate taxes 17,616 18,739 5,424 2,976 10,790 10,902 9,972 3,728
Other costs 0 0 0 0 0 0 0 21,135
------------ ----------- ----------- ------------ --------- -------- -------------- --------
TOTAL DIRECT EXPENSES 17,616 18,739 5,424 2,976 10,790 10,902 9,972 24,863
------------ ----------- ----------- ------------ --------- -------- -------------- --------
NET RENTAL INCOME $ 87,500 $ 54,000 $ 58,876 $ 27,417 $ 30,437 $ 54,492 $ 143,575 $ 63,000
============ =========== =========== ============ ========= ======== ============== ========
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
BRUEGGER'S BAGEL RESTAURANT PROPERTIES SOLD TO U.S. RESTAURANT PROPERTIES MASTER L.P.
SUPPLEMENTAL STATEMENT OF REVENUES AND CERTAIN EXPENSES - BY LOCATION (CONTINUED)
YEAR ENDED DECEMBER 31, 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
14TH AVE. 29 NORTH PEARL W. LAKE ST. RIVERSIDE DR PORTLAND AVE
CHAPEL HILL MINNEAPOLIS RELEIGH ALBANY MINNEAPOLIS EDINA IOWA CITY MINNEAPOLIS
NC MN NC NY MN MN IA MN
----------- ----------- --------- -------------- ----------- -------- ------------ -------------
RENTAL INCOME
Minimum $ 70,000 $ 85,000 $ 63,000 $ 55,875 $ 105,000 $ 28,800 $ 66,000 $ 34,619
Percentage 0 0 12,522 0 20,644 20,606 18,719 0
Cost reimbursement revenue 12,153 12,414 3,145 32,002 29,851 20,190 8,604 3,219
----------- ----------- --------- -------------- ----------- -------- ------------ -------------
TOTAL RENTAL INCOME 82,153 97,414 78,667 87,877 155,495 69,596 93,323 37,838
DIRECT EXPENSES
Real estate taxes 4,306 17,115 3,145 16,207 29,851 20,190 8,604 3,219
Other costs 25,847 15,299 0 28,795 0 0 0 1,899
----------- ----------- --------- -------------- ----------- -------- ------------ -------------
TOTAL DIRECT EXPENSES 30,153 32,414 3,145 45,002 29,851 20,190 8,604 5,118
----------- ----------- --------- -------------- ----------- -------- ------------ -------------
NET RENTAL INCOME $ 52,000 $ 65,000 $ 75,522 $ 42,875 $ 125,644 $ 49,406 $ 84,719 $ 32,720
=========== =========== ========= ============== =========== ======== ============ =============
</TABLE>
15
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
U.S. Restaurant Properties Master L.P.
We have audited the accompanying statement of revenues and certain expenses of
Tulip Properties Limited (the "Partnership") Property Sold to U.S. Restaurant
Properties Master L.P. for the year ended December 31, 1996. This financial
statement is the responsibility of the Partnership's management. Our
responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in the Form 8-K of U.S. Restaurant Properties
Master L.P.. Material amounts, described in Note 1 to the statement of revenues
and certain expenses, that would not be comparable to those resulting from the
proposed future operations of the property sold to U.S. Restaurant Properties
Master L.P. are excluded and the statement is not intended to be a complete
presentation of the revenues and expenses of this property.
In our opinion, such financial statement presents fairly, in all material
respects, the revenues and certain expenses of the Tulip Properties Limited
Property Sold to U.S. Restaurant Properties Master L.P. for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
DELIOTTE & TOUCHE LLP
Dallas, Texas
May 27, 1997
16
<PAGE>
TULIP PROPERTIES LIMITED PROPERTY SOLD TO U.S. RESTAURANT PROPERTIES MASTER L.P.
STATEMENT OF REVENUES AND CERTAIN EXPENSES
YEAR ENDED DECEMBER 31, 1996
DECEMBER 31,
1996
--------------
RENTAL INCOME
Minimum $ 176,040
Cost reimbursement revenue 12,323
--------------
TOTAL RENTAL INCOME 188,363
DIRECT EXPENSES
Other costs 12,323
--------------
TOTAL DIRECT EXPENSES 12,323
--------------
NET RENTAL INCOME $ 176,040
==============
See Accompanying Notes To Statement.
17
<PAGE>
NOTES TO TULIP PROPERTIES LIMITED PROPERTY SOLD TO U.S. RESTAURANT PROPERTIES
MASTER L.P.
1. Summary Of Significant Accounting Policies
Nature Of Operations
The accompanying Statement of Revenues and Direct Operating Expenses
includes one property acquired by U.S. Restaurant Properties Master L.P.
from Tulip Properties Limited, a California limited partnership (the
"Partnership"). The statement does not include any revenues or expenses
related to any other properties owned by the Partnership. The property
acquired is operated as a Chi-Chi's restaurant. In accordance with the
Securities and Exchange Commission Rule 3.14 the statement does not
include expenses not comparable to the proposed future operations of the
property such as depreciation, interest, or any other costs that are not
directly associated with the property.
2. Use Of Estimates
The preparation of the statement in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of revenues and certain expenses during a
reporting period. Actual results could differ from those estimates.
3. Rental Income
The lease is a "triple net" lease which requires the lessee to pay all
taxes, assessments, insurance, maintenance costs and other charges related
to maintenance, repair and operation of the properties. Cost reimbursement
revenue represents amounts reimbursed by the tenant to the Partnership for
other costs incurred. Certain information regarding the property lease is
set forth in the table below.
<TABLE>
<CAPTION>
MINIMUM
ANNUAL PERCENTAGE TERMINATION
LOCATION RENTAL RENTALS DATE
- ------------------- --------------------------------------------- ----------------------- --------------------
<S> <C> <C> <C>
Kissimmee, FL $178,963 per year through 7/29/97 with N/A July 2010 plus four
yearly increases in the Consumer five-year renewal
Price Index with a 4% cap and a options
five-year "Look-back" provision.
</TABLE>
The following is a schedule of minimum rental income on non-cancelable
leases as of December 31,1996
1997 $ 178,963
1998 178,963
1999 178,963
2000 178,963
2001 178,963
Thereafter 1,536,099
==========
$2,430,914
==========
18
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors
Sybra, Inc.:
We have audited the accompanying Statement of Revenues and Direct Operating
Expenses Applicable to the Acquisition of Seventy-Five Arby's Restaurant
Properties by U.S. Restaurant Properties Master L.P. for the year ended December
28, 1996. This financial statement is the responsibility of Sybra, Inc.'s
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenues and Direct Operating Expenses was
prepared for the purpose of complying with rules and regulations of the
Securities and Exchange Commission and for inclusion in the current report on
Form 8-K/A of U.S. Restaurant Properties Master L.P. This statement is not
intended to be a complete presentation of revenues and expenses of the
seventy-five Arby's restaurant properties acquired by U.S. Restaurant Properties
Master L.P.
In our opinion, the Statement of Revenues and Direct Operating Expenses referred
to above presents fairly, in all material respects, the revenues and direct
operating expenses described in Note 1 of the seventy-five Arby's restaurant
properties acquired by U.S. Restaurant Properties Master L.P. for the year ended
December 28, 1996, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
May 28, 1997
19
<PAGE>
<TABLE>
<CAPTION>
SYBRA, INC.
STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES
APPLICABLE TO THE ACQUISITION OF SEVENTY-FIVE ARBY'S RESTAURANT PROPERTIES
BY U.S. RESTAURANT PROPERTIES MASTER L.P.
YEAR ENDED DECEMBER 28, 1996
<S> <C>
REVENUES: $ 56,354,940
------------
DIRECT OPERATING EXPENSES
Cost of sales 15,285,436
Wages and related expenses 10,945,389
Management salaries 5,346,387
Advertising 4,754,988
Restaurant expense 2,330,341
Royalties 1,898,836
Utilities 1,736,484
Repairs and maintenance 1,458,964
Insurance 263,228
Other 426,434
TOTAL DIRECT OPERATING EXPENSES 44,446,487
------------
EXCESS OF REVENUES OVER DIRECT
OPERATING EXPENSES $ 11,908,453
============
See accompanying notes to the Statement of Revenues and Direct Operating Expenses.
</TABLE>
20
<PAGE>
SYBRA, INC.
NOTES TO STATEMENT OF REVENUE AND DIRECT OPERATING EXPENSES
APPLICABLE TO THE ACQUISITION OF SEVENTY-FIVE ARBY'S RESTAURANT
PROPERTIES BY U.S. RESTAURANT PROPERTIES MASTER L.P.
YEAR ENDED DECEMBER 28, 1996
1. BASIS OF PRESENTATION
Sybra, Inc.(the "Company") is a Michigan corporation formed on January 17, 1967
to develop, own, and operate Arby's fast food restaurants under the terms of a
development agreement with Arby's Inc. During the year ended December 28, 1996,
the Company was a wholly-owned subsidiary of Valcor, Inc., which is a wholly-
owned subsidiary of Valhi, Inc. (NYSE: VHI). Effective April 30, 1997, the
Company is a wholly-owned subsidiary of I.C.H. Corporation.
The accompanying Statement of Revenues and Direct Operating Expenses Applicable
to the Acquisition of Seventy-Five Arby's Restaurant Properties by U.S.
Restaurant Properties Master L.P. ("U.S. Restaurant") includes only the
seventy-five Arby's restaurant properties acquired by U.S. Restaurant. The
statement does not include any revenues or expenses related to the remaining
properties owned by the Company. The statement does not include depreciation and
amortization, interest, estimated restaurant closing expenses, income taxes and
allocated general and administrative expenses.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FISCAL YEAR - The Company operates on a 52 or 53 week fiscal year. The fiscal
year ended December 28, 1996 consisted of 52 weeks.
MANAGEMENT ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of revenues and
direct operating expenses during the reporting period. Ultimate actual results
may, in some instances, differ from previously estimated amounts.
RESTAURANT SALES - Sales are recorded at the time of the cash retail sale.
3. ROYALTIES
Royalties paid to Arby's, Inc. are based on a percentage of sales in accordance
with the franchise agreement.
21
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The following March 31, 1997 unaudited Pro Forma Consolidated Balance
Sheet of U.S. Restaurant Properties Master L.P. (the "Partnership") consists of
the Partnership's March 31, 1997 balance sheet adjusted on a pro forma basis to
reflect as of March 31, 1997 (a) the purchase of 87 properties for $51,903,000
acquired between April 1, and April 30, 1997 (see item 2); (b) the acquisition
of three non-operating properties for $2,352,000, between April 1 and April 30,
1997 (see item 2); (c) the additional borrowings required to purchase the
properties acquired. The unaudited Pro Forma Consolidated Balance Sheet is not
necessarily indicative of what the actual financial position of the Partnership
would have been at March 31, 1997 had all of these transactions occurred as of
such date and it does not purport to represent the future financial position of
the Partnership.
The unaudited Pro Forma Condensed Consolidated Statements of Income for
the year ended December 31, 1996 and the three months ended March 31, 1997 are
presented as if the following has occurred as of January 1, 1996. (a) the
purchase of 300 properties for $175,493,000 including the value of 503,415 Units
valued at $11,222,000 completed since December 31, 1995 (b) the acquisition of
six non-operating properties for $4,856,000, between January 1 and April 30,
1997 (c) the issuance of 1,800,000 units in June 1996 with net proceeds of
$40,203,000 (d) the issuance of 598,126 units in three separate transactions to
individual investors with net proceeds of $15,500,000 (e) the additional
borrowings of $59,694,000 required to purchase the properties acquired. The
unaudited Pro Forma Consolidated Statements of Income are not necessarily
indicative of what the actual results of operations of the Partnership would
have been assuming the transactions described above had been completed as of
January 1, 1996 and 1997, respectively, nor do they purport to represent the
results of operations for future periods.
22
<PAGE>
<TABLE>
<CAPTION>
U.S. RESTAURANT PROPERTIES MASTER L.P.
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(Unaudited)
(In thousands)
Operating
Property Non-Operating
Historical Acquisitions(a) Property (b) Pro Forma
------------ ----------------- --------------- -----------
<S> <C> <C> <C> <C>
Cash and equivalents $ 1,953 $ - $ - $ 1,953
Receivables, net 1,500 1,500
Deferred rent receivable 719 719
Purchase deposits and escrows 3,605 (741) (2,328) 536
Prepaid expenses 1,277 1,277
Notes receivable 1,352 1,352
Notes receivable - related parties 2,907 2,907
Net investments in direct financing leases 16,550 16,550
Land 65,903 10,380 471 76,754
Buildings and leasehold improvements, net 90,378 41,523 1,881 133,782
Machinery and equipment, net 2,875 2,875
Intangibles, net 12,602 12,602
------------ ----------------- --------------- -----------
$ 201,621 $ 51,162 $ 24 $ 252,807
============ ================= =============== ===========
Accounts payable $ 1,829 $ 228 $ 24 $ 2,081
Deferred rent payable 72 72
Deferred gain on sale of property 590 590
Lines of credit 52,780 35,434 88,214
Notes payable 40,000 40,000
Capitalized lease obligations 312 312
General Partner's capital 1,132 1,132
Limited Partner's capital 104,906 15,500 120,406
------------ ----------------- --------------- -----------
$ 201,621 $ 51,162 $ 24 $ 252,807
============ ================= =============== ===========
</TABLE>
See Notes to Pro Forma Consolidated Balance Sheet.
23
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
(a) Reflects pro forma adjustments for 1997 acquisitions completed since March
31, 1997 which consist of the purchase of 87 operating properties and the
borrowings required to complete the purchase of these properties as
follows:
<TABLE>
<CAPTION>
Number of
Properties Operating
---------- ---------
<S> <C> <C>
Pizza Hut 4 2,661
Arby's 75 46,289
Popeye's 1 337
Other 7 2,616
---------- ---------
87 51,903
========== =========
Total of land, buildings and leasehold improvements,
machinery and equipment, and intangibles 51,903
Less purchase deposits paid from cash flow
from operations (741)
Less security deposit escrow received (228)
Less proceeds from sale of stock (15,500)
---------
Increase in line of credit and notes payable 35,434
=========
</TABLE>
The respective purchase price for the properties has been allocated between
land, building, machinery, and intangibles on a preliminary basis. Final
determination of the proper allocation between these accounts will be made prior
to finalizing the financial statements for the year ended December 31, 1997.
Management does not expect material adjustments to occur.
(b) Reflects pro forma adjustments for 1997 acquisitions completed since March
31, 1997 which consist of the purchase of 3 non-operating properties and
the borrowings required to complete the purchase of these properties as
follows:
<TABLE>
<CAPTION>
Number of
Properties Operating
---------- ---------
<S> <C> <C>
Schlotzsky's 3 2,352
---------- ---------
3 2,352
========== =========
Total of land, buildings and leasehold improvements,
machinery and equipment, and intangibles 2,352
Less purchase deposits paid from cash flow
from operations (2,328)
Less security deposit escrow received (24)
---------
Increase in line of credit and notes payable 0
=========
</TABLE>
The respective purchase price for the properties has been allocated between
land, building, machinery, and intangibles on a preliminary basis. Final
determination of the proper allocation between these accounts will be made prior
to finalizing the financial statements for the year ended December 31, 1997.
Management does not expect material adjustments to occur.
24
<PAGE>
<TABLE>
<CAPTION>
U.S. RESTAURANT PROPERTIES MASTER L.P.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 31, 1996
(Unaudited)
(In thousands, except per unit data)
Non-Operating
Historical Acquisitions Schlotzsky's RR Restaurants Bruegger's Chi-Chi's Arby's Other Pro Forma
(a) (b) (c) (d) (e) (f) (g)
---------- ------------ ------------ -------------- ---------- --------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues from leased
properties
Rental income $ 16,346 $ 7,365 $ 695 $ 688 $ 1,200 $ 179 $5,328 $1,016 $ 32,817
Amortization of
unearned income on
direct financing
leases 1,978 1,978
---------- ------------ ------------ -------------- ---------- --------- --------- ------- --------
Total Revenues 18,324 7,365 695 688 1,200 179 5,328 1,016 34,795
Expenses
Rent 2,080 232 2,312
Depreciation and
amortization 3,978 1,855(h) 194(h) 158(h) 446(h) 46(h) 1,851(h) 285(h) 8,813
Taxes,general and
administrative 2,461 684(i) 48(i) 39(i) 105(i) 14(i) 450(i) 71(i) 3,872
Interest expense
(income), net 2,364 3,038(j) 269(j) 219(j) 616(j) 79(j) 2,561(j) 407(j) 9,553
----------- ------------ ------------ --------------- ---------- --------- --------- -------- --------
Total Expenses 10,883 5,809 511 416 1,167 139 4,862 763 24,550
Gain on sale of
equipment 32 32
----------- ------------ ------------ --------------- ---------- --------- --------- -------- --------
Net income $ 7,473 $ 1,556 $ 184 $ 272 $ 33 $ 40 $ 466 $ 253 $ 10,277
=========== ============ ============ =============== ========== ========= ========= ======== ========
Net income allocable
to unitholders $ 7,325 $ 1,525 $ 180 $ 267 $ 32 $ 39 $ 457 $ 248 $ 10,073
Average number of
outstanding units 6,107 119 222 7,774
Net income per unit $ 1.20 $ 1.30
</TABLE>
See Notes to Pro Forma Consolidated Statement of Income.
25
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(a) Reflects pro forma adjustments to operations for the 1996 acquisitions,
comprised of 184 properties acquired on various dates from January 1, 1996
through December 31, 1996.
(b) Reflects pro forma adjustments to operations based on executed lease
information for the non-operating Schlotzsky's acquisitions comprised of
six properties acquired on various dates from January 1, 1996 through April
30, 1997.
(c) Reflects pro forma adjustments to operations based on historical financial
information for the RR Restaurants acquisition comprised of seven properties
acquired on March 31, 1997.
(d) Reflects pro forma adjustments to operations based on historical financial
information for the Bruegger's acquisition comprised of 16 properties
acquired on March 17, 1997.
(e) Reflects pro forma adjustments to operations based on historical financial
information for the Chi-Chi's acquisition comprised of one property acquired
on March 11, 1997.
(f) Reflects pro forma adjustments to operations based on historical financial
information for the Arby's acquisition comprised of 75 properties acquired
on April 30, 1997.
(g) Reflects pro forma adjustments to operations based on historical financial
information for 17 other properties acquired in eight separate transactions,
on various dates from January 1, 1996 through April 30, 1997.
(h) Reflects pro forma increase in depreciation expense related to the purchase
price of the respective properties. Depreciation is computed using the
straight-line method over the estimated useful lives of building, leasehold
improvements, machinery and equipment which range from 10 to 20 years.
(i) Reflects pro forma increase in general and administrative expense
attributable to the increase in fees due to the managing general partner.
Such increase is comprised of 1% of the contracted purchase price for the
respective properties and 25% of the cash flow received with respect to
such additional properties in excess of the cash flow representing a 12%
rate of return.
(j) Reflects the pro forma adjustment to interest expense as a result of the
purchase of the respective properties. Pro forma interest expense is based
on the increase in debt outstanding and borrowings for payment of
distributions on units issued on a pro forma basis using interest rates
based on the Partnership's credit arrangements which are as follows:
Principal Interest Rate
Series A Senior Secured Guaranteed Notes $12,500 8.00%
Series B Senior Secured Guaranteed Notes 27,500 8.30%
Line of credit 95,000 7.18%
26
<PAGE>
<TABLE>
<CAPTION>
U.S. RESTAURANT PROPERTIES MASTER L.P.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the three months ended March 31, 1997
(Unaudited)
(In thousands, except per unit data)
Non-Operating
Historical Schlotzsky's RR Restaurants Bruegger's Chi-Chi's Arby's Other Pro Forma
(a) (b) (c) (d) (e) (f)
---------- ------------ -------------- ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues from leased
properties
Rental income $ 5,709 $ 155 $ 172 $ 257 $ 35 $1,132 $ 233 $ 7,893
Amortization of
unearned income on
direct financing
leases 444 444
---------- ------------ --------------- ---------- ---------- --------- --------- ---------
Total Revenues 6,153 155 172 257 35 1,132 233 8,337
Expenses
Rent 589 589
Depreciation and
amortization 1,566 35(g) 26(g) 74(g) 8(g) 463(g) 64(g) 2,236
Taxes,general and
administrative 762 10(h) 8(h) 22(h) 3(h) 94(h) 15(h) 914
Interest expense
(income), net 1,284 67(i) 55(i) 154(i) 20(i) 640(i) 102(i) 2,322
---------- ------------ --------------- ---------- ---------- --------- --------- ---------
Total Expenses 4,201 112 89 250 31 1,197 181 6,601
---------- ------------ --------------- ---------- ---------- --------- --------- ---------
Net income $ 1,952 $ 43 $ 83 $ 7 $ 4 $ 135 $ 52 $ 2,276
========== ============ =============== ========== ========== ========= ========= =========
Net income allocable
to unitholders $ 1,913 $ 42 $ 81 $ 7 $ 4 $ 132 $ 51 $ 2,230
Average number of
outstanding units 7,078 119 222 7,774
Net income per unit $ 0.27 $ 0.29
</TABLE>
See Notes to Pro Forma Consolidated Statement of Income.
27
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(a) Reflects pro forma adjustments to operations based on executed lease
information for the non-operating Schlotzsky's acquisitions comprised of
six properties acquired on various dates from January 1, 1996 through April
30, 1997.
(b) Reflects pro forma adjustments to operations based on historical financial
information for the RR Restaurants acquisition comprised of seven properties
acquired on March 31, 1997.
(c) Reflects pro forma adjustments to operations based on historical financial
information for the Bruegger's acquisition comprised of 16 properties
acquired on March 17, 1997.
(d) Reflects pro forma adjustments to operations based on historical financial
information for the Chi-Chi's acquisition comprised of one property acquired
on March 11, 1997.
(e) Reflects pro forma adjustments to operations based on historical financial
information for the Arby's acquisition comprised of 75 properties acquired
on April 30, 1997.
(f) Reflects pro forma adjustments to operations based on historical financial
information for 17 other properties acquired in eight separate transactions,
on various dates from January 1, 1996 through April 30, 1997.
(g) Reflects pro forma increase in depreciation expense related to the purchase
price of the respective properties. Depreciation is computed using the
straight-line method over the estimated useful lives of building, leasehold
improvements, machinery and equipment which range from 10 to 20 years.
(h) Reflects pro forma increase in general and administrative expense
attributable to the increase in fees due to the managing general partner.
Such increase is comprised of 1% of the contracted purchase price for the
respective properties and 25% of the cash flow received with respect to
such additional properties in excess of the cash flow representing a 12%
rate of return.
(i) Reflects the pro forma adjustment to interest expense as a result of the
purchase of the respective properties. Pro forma interest expense is based
on the increase in debt outstanding and borrowings for payment of
distributions on units issued on a pro forma basis using interest rates
based on the Partnership's credit arrangements which are as follows:
Principal Interest Rate
Series A Senior Secured Guaranteed Notes $12,500 8.00%
Series B Senior Secured Guaranteed Notes 27,500 8.30%
Line of credit 95,000 7.18%
28
<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.
Date: May 30, 1997 U.S. RESTAURANT PROPERTIES MASTER L.P.
By: QSV PROPERTIES, INC.
its Managing General Partner
By: /s/
---------------------------------
Robert J. Stetson
President, Chief Executive Officer
29
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement
No.333-21403 of U.S. Restaurant Properties Master L.P. on Form S-4 of our
report dated May 8, 1997, with respect to the combined statement of revenues
and certain expenses of RR Restaurants 1986-1 Properties Sold to U.S. Restaurant
Properties Master L.P. for the year ended December 31, 1996; our report dated
May 22, 1997, with respect to the combined statement of revenues and certain
expenses of Selected Properties Sold to U.S. Restaurant Properties Master L.P.
(Bruegger's Acquisition) for the year ended December 31, 1996; and our report
dated May 27, 1997 with respect to the statement of revenues and certain
expenses of Tulip Properties Limited Property Sold to U.S. Restaurant Properties
Master L.P.for the year ended December 31, 1996,appearing in this Current report
on Form 8-K/A of U.S. Restaurant Properties Master L.P. dated March 31, 1997.
/s/ DELOITTE & TOUCHE LLP
Dallas, Texas
May 28, 1997
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation in this current report on Form 8-K/A of U.S.
Restaurant Properties Master L.P. of our report dated May 28, 1997, on our
audit of the Statement of Revenues and Direct Operating Expenses Applicable to
Seventy-Five Arby's Restaurant Properties Acquired by U.S. Restaurant Properties
Master L.P. for the year ended December 28, 1996.
/s/ COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
May 29, 1997
