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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 Quarter Ended March 31, 1999
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 0-16285
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its partnership
agreement)
MARYLAND 52-1490861
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(State or other jurisdiction (I.R.S. Employer
of the organization) Identification No.)
100 Light Street - Baltimore, MD 21202
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(Address of principal executive offices) (Zip Code)
(410)539-0000
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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 Sections 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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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
STATEMENTS OF NET ASSETS IN LIQUIDATION
March 31, December 31,
1999 1998
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(Unaudited)
ASSETS (Liquidation Basis):
Investment in real estate $8,040,351 $8,040,351
Cash and cash equivalents 1,779,394 1,768,405
Tenant accounts receivable, 3,000 49,664
Due from related parties - 46,344
Escrow accounts - 7,495
Other assets 19,675 16,926
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Total assets 9,842,420 9,929,185
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LIABILITIES (Liquidation Basis):
Long-term debt 6,519,937 6,519,937
Interest payable 1,520,414 1,520,414
Accounts payable and accrued expenses 268,618 370,647
Security deposits 21,345 21,081
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Total liabilities 8,330,314 8,432,079
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Net assets in liquidation $1,512,106 $1,497,106
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The accompanying notes are an integral part of these statements.
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MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
STATEMENTS OF CHANGES OF NET ASSETS IN LIQUIDATION
for the periods from January 1, 1999 to March 31, 1999
and from January 1, 1998 to December 31, 1998
1999 1998
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(Unaudited)
Net assets in liquidation at beginning
of period $1,497,106 $7,566,201
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Increase (decrease) during the period:
Operating activities:
Net loss from operating activities (6,220) (184,659)
Interest income 21,220 115,564
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15,000 (69,095)
Liquidating activities:
Distributions to partners - (6,000,000)
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Net increase (decrease) in net assets
in liquidation 15,000 (6,069,095)
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Net assets in liquidation at end of period $1,512,106 $1,497,106
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The accompanying notes are an integral part of these statements.
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MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
Notes to Financial Statements
March 31, 1999
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NOTE A - BASIS OF PRESENTATION:
The accompanying unaudited financial statements of Mid-Atlantic Centers
Limited Partnership (the "Partnership") have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
necessary for a fair presentation have been included. All adjustments
made in the interim period were of a normal recurring nature. Operating
results of any interim period are not necessarily indicative of the
results that may be expected for a full year. These financial
statements should be read in conjunction with the financial statements
and notes thereto included in the Partnership's annual report on Form
10-K for the year ended December 31, 1998.
Liquidation Basis of Accounting
The accompanying statements of net assets in liquidation and statements
of changes of net assets in liquidation reflect the transactions of the
Partnership utilizing liquidation accounting concepts as required by
generally accepted accounting principles.
The Partnership adopted the liquidation basis of accounting effective
December 31, 1997. Under the liquidation basis of accounting, assets
are stated at their estimated net realizable values and liabilities are
stated at their anticipated payable amounts. The valuation of assets
and liabilities necessarily requires estimates and assumptions, and
there are uncertainties in carrying out the dissolution of the
Partnership. The actual values upon dissolution and costs associated
therewith could differ from the amounts recorded.
Investment in Real Estate
Investment in real estate consists of land, buildings and improvements
which are stated at estimated liquidation value and includes only
Tarrytown Mall Shopping Center presented as described in Note D - Plan
of Liquidation.
Cash and Cash Equivalents
The Partnership considers cash in banks, commercial paper and
repurchase agreements with original maturities of less than three
months to be cash and cash equivalents.
Use of 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 assets and
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liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
NOTE B - RELATED PARTY TRANSACTIONS:
During the quarter ended March 31, 1999, $6,337 was paid to Legg Mason
Realty Capital, Inc., an affiliate of a general partner, for
reimbursement of operating expenses.
At December 31, 1998, $37,654 and $8,690 were receivable from First
Washington Management, Inc. and Legg Mason Realty Capital, Inc.,
respectively, affiliates of the general partners, for reimbursement of
management fees as a result of accounting adjustments related to tenant
rents receivable. These amounts were paid to the Partnership during the
quarter ended March 31, 1999.
NOTE C - PARTNERSHIP ALLOCATIONS AND DISTRIBUTIONS:
Partnership allocations and distributions are made in the manner
prescribed by the Partnership Agreement and as more fully described in
Note E to the Partnership's financial statements in the annual report
on Form 10-K for the year ended December 31, 1998.
NOTE D - PLAN OF LIQUIDATION:
The disposition of Tarrytown Mall is expected to be resolved following
discussions with that center's mortgage lender. The Partnership
estimates its net equity in Tarrytown Mall at zero, reflecting an
appraised value of that property below the level of the outstanding
mortgage debt on the property. As a result, the carrying value of this
property has been adjusted at March 31, 1999 and December 31, 1998 to
the sum of the outstanding balance of the mortgage debt on the property
and accrued interest as of the respective dates.
The Partnership has offered to deed Tarrytown Mall to the second trust
lender in satisfaction of mortgage indebtedness encumbering the
property. Pursuant to the terms of the second trust mortgage
agreement, payment obligations with respect to the Tarrytown Mall
indebtedness are limited to funds generated by operations at that
property. An obligation in the amount of approximately $212,000 for
funds so generated is reflected as an account payable in the
Partnership's financial statements as of March 31, 1999 and December
31, 1998. Absent resolution of the terms of a voluntary transfer of
the center, the Partnership anticipates foreclosure of the property.
Effective January 1, 1999, with the consent of the Partnership, the
second trust lender of Tarrytown Mall Shopping Center assumed
management of that property. On January 6, 1999, that lender paid the
outstanding principal balance plus accrued interest on the first trust
mortgage secured by Tarrytown Mall which matured January 1, 1999, and
such payment was considered an advance under the second trust mortgage.
The mortgage escrow balances held by the first trust lender were
applied to pay down first trust mortgage principal.
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The general partners currently intend to make a final distribution to
the limited partners subsequent to the liquidation of all partnership
assets and satisfaction of all partnership liabilities. The net amount
ultimately available for distribution depends on factors which cannot
be predicted with certainty, particularly expenses of the Partnership
until completely liquidated.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
The matters discussed in this Form 10-Q include forward-looking
statements as contemplated by the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are statements which relate to
future operations, strategies, financial results, or other
developments. Forward-looking statements are necessarily based upon
estimates and assumptions that are inherently subject to significant
business, economic and competitive risks, uncertainties and
contingencies, many of which are beyond the Partnership's control and
many of which, with respect to future business decisions, are subject
to change. These risks, uncertainties and contingencies can affect
actual results and could cause actual results to differ materially from
those expressed in any forward-looking statements made by the
Partnership.
The General Partners approved a plan of liquidation effective December
31, 1997. The plan provides that the Partnership sell or otherwise
dispose of the Partnership's remaining shopping centers, liquidate all
assets remaining after sale of the shopping centers and distribute net
proceeds to the assignee limited partners. The Partnership adopted the
liquidation basis of accounting effective December 31, 1997. In
connection with the planned liquidation, the Partnership has recorded a
reserve for additional expenses to reflect the Partnership's estimate
of the costs associated with the liquidation.
CASH FLOW
The Partnership recorded a $10,989 net increase in cash and cash
equivalents in the three months ended March 31, 1999. The increase in
cash and cash equivalents is primarily attributable to interest income
from the temporary investment of proceeds from the sales of shopping
centers.
LIQUIDITY AND CAPITAL RESOURCES
The Partnership continues to own Tarrytown Mall Shopping Center and to
estimate its net equity in that center at zero, reflecting an appraised
value of Tarrytown Mall below non-recourse debt. No value was ascribed
to Tarrytown Mall (or the related escrow or other asset accounts) in
the estimated net asset value of the Partnership's portfolio at the end
of 1998. See Note D - Plan of Liquidation in the accompanying
financial statements for a discussion of the Partnership's intention
regarding disposition of this shopping center.
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The General Partners currently intend to make a final distribution to
Limited Partners subsequent to the liquidation of all partnership
assets and provision for all partnership liabilities. The General
Partners continue to estimate the net amount of the final distribution
to be in the range of $1.15 to $1.25 per Unit with the ultimate amount
particularly dependent on expenses of the Partnership until completely
liquidated.
RESULTS OF OPERATIONS
Because of the Partnership's activities pursuant to its plan to dispose
of its assets and liabilities, a comparison of the results of
operations is not meaningful. The Partnership's operating results have
been reflected on the statements of changes of net assets in
liquidation.
For the three months ended March 31, 1999, the Partnership incurred a
net operating loss of $6,220 and had interest income of $21,220. Net
operating loss for this period resulted primarily from adjustments made
to the provision for doubtful accounts based on an analysis of the
collectibility of tenant accounts receivable relating to centers sold
by the Partnership. Interest income resulted from the temporary
investment of proceeds from the sales of shopping centers.
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
27.1 Financial Data Schedule for the three months ended
March 31, 1999.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the Partnership during
the quarter ended March 31, 1999.
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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.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
By: Realty Capital IV Limited Partnership,
General Partner
By: LMRC IV, Inc., General Partner
Date: April 19, 1999 By: /s/ Richard J. Himelfarb
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Richard J. Himelfarb, President
By: FW Realty Limited Partnership,
General Partner
By: FW Corporation, General Partner
Date: April 19, 1999 By: /s/ William J. Wolfe
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William J. Wolfe, President
EXHIBIT INDEX
Exhibit
Number
27.1 Financial Data Schedule for the three months ended
March 31, 1999.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF NET ASSETS IN LIQUIDATION AND STATEMENT OF CHANGES OF NET
ASSETS IN LIQUIDATION. THE PARTNERSHIP'S FINANCIAL STATEMENTS ARE
PRESENTED UTILIZING THE LIQUIDATION BASIS OF ACCOUNTING.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> $1,779,394
<SECURITIES> $0
<RECEIVABLES> $3,000
<ALLOWANCES> $0
<INVENTORY> $0
<CURRENT-ASSETS> $0
<PP&E> $8,040,351
<DEPRECIATION> $0
<TOTAL-ASSETS> $9,842,420
<CURRENT-LIABILITIES> $0
<BONDS> $6,519,937
$0
$0
<COMMON> $0
<OTHER-SE> $1,512,106
<TOTAL-LIABILITY-AND-EQUITY> $9,842,420
<SALES> $0
<TOTAL-REVENUES> $0
<CGS> $0
<TOTAL-COSTS> $0
<OTHER-EXPENSES> $0
<LOSS-PROVISION> $0
<INTEREST-EXPENSE> $0
<INCOME-PRETAX> $15,000
<INCOME-TAX> $0
<INCOME-CONTINUING> $15,000
<DISCONTINUED> $0
<EXTRAORDINARY> $0
<CHANGES> $0
<NET-INCOME> $15,000
<EPS-PRIMARY> $0
<EPS-DILUTED> $0
</TABLE>
