SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 21, 1999
FFP PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 1-9510 75-2147570
(State or other jurisdiction of (Commission (IRS employer
incorporation or organization) File Number) Identification No.)
2801 Glenda Avenue, Fort Worth, Texas 76117-4391
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 817/838-4700
Not applicable
(Former name or former address, if changed since last report)
<PAGE>
ITEM 4
KPMG LLP ("KPMG") served as the registrant's independent accountant to audit
the consolidated financial statements of the registrant for each of its two most
recent years ended December 31, 1998, and December 31, 1997. In November and
December 1999, the registrant sought proposals from four accounting firms,
including KPMG and Grant Thornton LLP ("Grant Thornton"), with respect to the
audit of the registrant's consolidated financial statements for its fiscal year
ending December 31, 1999.
On December 15, 1999, the registrant vebally advised KMPG that, as part of
the registrant's effort to reduce general and administrative expenses,
management would recommend a dismissal of KPMG as the registrant's outside
accounting firm to audit the registrant's consolidated financial statements for
its fiscal year ending December 31, 1999 and the engagement of Grant Thornton in
that capacity. On December 21, 1999, the audit committee of the registrant's
board of Directors approved these actions.
The reports of KPMG on the financial statements of the registrant for its two
most recent years do not contain an adverse opinion or a disclaimer of opinion,
and were not qualified or modified as to uncertainty, audit scope, or accounting
principles.
There were no disagreements between the registrant and KPMG during the
registrant's two most recent fiscal years or any subsequent interim period
preceding the dismissal as to any matter of accounting principles or practices,
financial statement disclosure, or auditing scope of procedure. After its audit
of the registrant's financial statements for its fiscal year ended December 31,
1998, KPMG advised the registrant that certain internal control matters
constituted material weaknesses and reportable conditions. During its fiscal
year 1999, the registrant has taken remedial action in an attempt to rectify and
improve each of these matters. The audit committee of the board of directors of
the registrant has discussed these matters with KPMG, and the registrant has
authorized KPMG to respond fully to the inquiries of Grant Thornton about these
matters.
On October 15, 1999, the registrant closed new financing with a 20-year term
from a third party lender and repaid in full its long-term indebtedness then
payable to FFP Marketing Company, Inc. ("FFP Marketing"). As a condition of that
new financing, on the same date, the registrant and FFP Marketing both executed
a new real estate lease with a 20-year term, and FFP Marketing exercised options
to extend the term of prior real estate leases to a 20-year term, for land and
buildings at 63 convenience store locations owned by the registrant and operated
by FFP Marketing.
At the time of the registrant's preparation of Form 10-Q for its third
quarter of 1999, which was filed prior to the dismissal of KPMG as registrant's
accounting firm, KPMG concluded that such 20-year real estate leases should be
accounted for as direct financing leases instead of operating leases. The
determination as to whether these lease should be treated as direct financing
leases or operating leases for accounting purposes could materially impact the
financial statements of registrant for its 1999 fiscal year. As of the date of
the filing of this Form 8-K, registrant has not yet determined the correct
accounting treatment of such leases because it has not yet completed its review
of all of the relevant factual matters necessary to make such a determination.
Therefore, this issue was not resolved to the satisfaction of KPMG prior to its
dismissal. As of this date, registrant has not sought the opinion, advice or
views of Grant Thornton as to this issue or any other accounting principle, and
this issue had no bearing on the registrant's decision to change auditing firms.
Item 7. Financial Statements and Exhibits
(a) Not applicable
(b) Not applicble
(c) Exhibits
16.1 Letter of KPMG LLP dated December 29, 1999
<PAGE>
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 hereunto duly authorized.
Dated: December 29, 1999 FFP PARTNERS, L.P.
(Registrant)
By: FFP Real Estate Trust,
sole general partner
By: /s/ Craig T. Scott
Craig T. Scott
Vice President - Finance
December 29, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
We were previously principal accountants for FFP Partners, L.P. and, under
the date of March 30, 1999 we reported on the consolidated financial statements
of FFP Partners, L.P. and subsidiary as of December 31, 1998 and December 28,
1997 and for the year ended December 31, 1998. On December 15, 1999, our
appointment as principal accountants was terminated. We have read FFP Partners,
L.P.'s statements included under Item 4 of its Form 8-K dated December 29, 1999,
and we agree with such statements except that we are not in a position to agree
or disagree with FFP Partners, L.P.'s stated reason for changing principal
accountants, statement that the change was approved by the audit committee of
the Board of Directors, statement regarding the remedial action taken in fiscal
1999 to address material weaknesses and reportable conditions in internal
controls, statement regarding registrant not yet determining correct accounting
treatment of leases as described in the last paragraph of Item 4, and the last
sentence in such Item 4 regarding FFP Partners, L.P.'s contact with Grant
Thornton or the fact that the disclosed unresolved issue had no bearing on its
decision to dismiss us.
KPMG LLP
Fort Worth, Texas
