SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X| Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1999, 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 No. 1-9510
FFP PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 75-2147570
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
2801 Glenda Avenue; Fort Worth, Texas 76117-4391
(Address of principal executive office, including zip code)
817/838-4700
(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 ___
Class A Units 2,234,262
(Number of limited partner units outstanding as of August 10, 1999)
<PAGE>
FFP Partners, L.P. and Subsidiary
Condensed Consolidated Balance Sheets
June 30, 1999, and December 31, 1998
(In thousands)
(Unaudited)
June 30, December 31,
1999 1998
Assets
Current assets -
Prepaid expenses and other current assets $299 $26
Investment in lease from affiliate 853 0
Note receivable from affiliate, current portion 268 0
Total curent assets 1,420 26
Real property -
Land and improvements 8,518 5,929
Buildings 21,034 21,329
Total real property, excluding depreciation 30,104 27,258
Accumulated depreciation (11,158) (10,574)
Total real property, net 18,946 16,684
Investment in lease from affiliate,
net of current portion 11,658 0
Note receivable from affiliate, net of
current portion 2,366 0
Other assets, net 40 94
Total assets $34,430 $16,804
Liabilities and Partners' Capital
Current liabilities -
Current installments of long-term debt $371 $148
Current installments of long-term debt
to affiliate 1,143 1,143
Accrued liabilities and due to affiliate 66 39
Unearned income from affiliate, current portion 799 0
Total current liabilities 2,379 1,330
Long-term debt, excluding current installments 9,521 297
Note payable to affiliate, excluding current
installments 12,487 13,058
Unearned income from affiliate, excluding
current portion 7,792 0
Total liabilities 32,179 14,685
Minority interests in subsidiary 910 857
Commitments and contingencies
Partners' capital -
Limited partners' capital 1,320 1,242
General partner's capital 21 20
Total partners' capital 1,341 1,262
Total liabilities and partners' capital $34,430 $16,804
See accompanying notes to Condensed Consolidated Financial Statements.
<PAGE>
FFP Partners, L.P., and Subsidiary
Condensed Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 1999 and 1998
(In thousands, except per unit data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
Revenues -
Rental income $752 $700 $1,457 $1,313
Gain on sale of property 0 0 0 52
Interest income 255 10 345 12
Total revenues 1,007 710 1,802 1,377
Expenses -
General and administrative
expenses 124 95 297 168
Depreciation and amortization 287 312 585 602
Interest expense 435 390 787 759
Total expenses 846 797 1,669 1,529
Net income/(loss) before
minority interest 96 (61) 80 (108)
Minority interest in subsidiary (65) 26 (53) 44
Net income/(loss) $96 $(61) $80 $(108)
Net income/(loss) per unit -
Basic $0.04 $(0.03) $0.04 $(0.05)
Diluted $0.04 $(0.03) $0.04 $(0.05)
Weighted average number of units
outstanding -
Basic 2,272 2,272 2,272 2,272
Diluted 2,280 2,272 2,277 2,272
See accompanying notes to Condensed Consolidated Financial Statements.
<PAGE>
FFP Partners, L.P. and Subsidiary
Condensed Consolidated Statement of Cash Flows
Six Months Ended June 30, 1999, and June 30, 1998
(In thousands)
(Unaudited)
June 30, June 30,
1999 1998
Cash Flows from Operating Activities -
Net (loss) $80 $(108)
Adjustments to reconcile net (loss) to
cash provided by operating activities -
Depreciation and amortization 585 602
Minority interest in subsidiary 53 (44)
Net change in operating assets
and liabilities (194) 54
Net cash provided/(used) by operating
activities 524 504
Cash Flows from Investing Activities -
Investments in leases with affiliate (12,511) 0
Unearned lease income from affiliate 8,592 0
Note receivable from affiliate (2,634) 0
Purchases of land and buildings (2,847) (2)
Net cash provided/(used)by
investing activities (9,400) (2)
Cash Flows from Financing Activities -
Proceeds from long-term debt 9,550 0
Payments on long-term debt (103) (502)
Payments on long-term debt to affiliate (571) 0
Net cash provided/(used) by financing
activities 8,876 (502)
Net Increase/(Decrease) in Cash $0 $0
Cash at beginning of period 0 0
Cash at end of period $0 $0
See accompanying notes to Condensed Consolidated Financial Statements.
<PAGE>
FFP Partners, L.P. and Subsidiary
Notes to Condensed Consolidated Financial Statements
June 30, 1999
(Unaudited)
1. Basis of Presentation
These Condensed Consolidated Financial Statements include the assets,
liabilities, and results of operations of FFP Partners, L.P., and its 60%-owned
subsidiary, FFP Properties, L.P., collectively referred to as the "Partnership."
The Condensed Consolidated Balance Sheet as of June 30, 1999, and the
Condensed Consolidated Statements of Operations and Condensed Consolidated
Statements of Cash Flows for the periods presented have been prepared by the
Partnership without audit. In the opinion of management, all adjustments,
consisting only of normal recurring adjustments, necessary to fairly present the
Partnership's financial position as of June 30, 1999, and the results of its
operations and cash flows for each of the periods presented, have been made.
Interim operating results are not necessarily indicative of results for the
entire year.
On December 28, 1997, the Partnership completed a restructuring which
resulted in the transfer of the convenience store, retail motor fuel, and other
businesses previously operated by it to FFP Marketing Company, Inc. ("FFP
Marketing"). In the restructuring, the Partnership retained the real estate used
in the retail businesses and leased those properties to FFP Marketing. As a
result of the restructuring, the Partnership's financial statements after the
restructuring are not comparable in a meaningful way to its financial statements
prior to the restructuring.
The notes to the audited consolidated financial statements which are included
in the Partnership's Annual Report on Form 10-K for the year ended December 31,
1998, include a description of accounting policies and additional information
pertinent to an understanding of these interim financial statements. That
information has not changed other than as a result of normal transactions in the
six months ended June 30, 1999, except as discussed below.
2. Change in Fiscal Year
Prior to the restructuring of the Partnership completed on December 28, 1997,
the Partnership prepared its financial statements on the basis of a fiscal year
which ended on the last Sunday in December. However, in connection with the
restructuring, the Partnership has changed its fiscal year to coincide with the
calendar year. Accordingly, the accompanying unaudited financial statements for
the periods ended June 30, 1998, include the calendar months then ended plus the
three-day period immediately following the restructuring through the end of 1997
(December 29 through December 31, 1997). The effect of including these three
additional days in financial statements for the period ended June 30, 1998, is
immaterial.
3. Long-Term Debt
In February 1999, the Partnership purchased 14 additional improved real
properties from a third party on which 12 convenience stores and two truck stops
are operational. The Partnership immediately leased the properties to FFP
Marketing under leases accounted for as operating leases for the land portion
and direct financing leases for the building portion, respectively. Each of
these leases have a 15-year term. The operating land leases provide for a
monthly rental aggregating approximately $28,000. The direct financing leases
provide for a monthly rental aggregating approximately $71,000. The aggregate of
these lease payments from FFP Marketing equals the Partnership's monthly
principal and interest payments payable under its acquisition debt. The leases
are "triple net" leases, under which FFP Marketing pays all taxes, insurance,
operating, and capital costs, and provide for an increase in rent payments after
each five-year period during the term of the leases based upon any increase in
the consumer price index.
In addition, the Partnership purchased inventory and equipment at the 14
locations for approximately $942,000 and $1,750,000, respectively. The
Partnership immediately sold this inventory and equipment to FFP Marketing in
exchange for a note receivable. The note bears interest at the prime rate and is
payable in monthly installments over 8 years.
The Partnership incurred long-term acquisition debt with a third party lender
in the original principal amount of $9,550,000, which is fully amortizable over
15 years with equal, monthly payments of principal and interest. FFP Marketing
guaranteed the Partnership's acquisition indebtedness. The amount of FFP
Marketing's monthly lease payments to the Partnership equals the Partnership's
monthly debt payments.
4. Income/(Loss) per Unit
A reconciliation of the denominator of the basic and diluted (loss) per unit
for general partner and limited partner units for the three and six months ended
June 30, 1999, and June 30, 1998, follows:
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1998 1998 1999 1998
(In thousands)
Weighted average number of units
outstanding 2,272 2,272 2,272 2,272
Effect of dilutive options 8 0 5 0
Weighted average number of units
outstanding, assuming dilution 2,280 2,272 2,277 2,272
Options to purchase 265,999 and 241,999 units were not included in the
computation of diluted net income/(loss) per unit for the three and six months
ended June 30, 1999, and June 30, 1998, respectively, because to do so would
have been anti-dilutive. Such options could potentially dilute basic net income
per unit in the future.
<PAGE>
FFP Partners, L.P.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
General
FFP Partners, L.P. (the "Partnership") restructured its operations in
December 1997 by transferring its convenience store, retail motor fuel, and
other businesses to FFP Marketing Company, Inc. ("FFP Marketing"). In the
restructuring, the Partnership retained the real estate formerly used in the
retail businesses and now leases those properties to FFP Marketing. Accordingly,
no comparative income data exists for the Partnership for periods prior to 1998.
Substantially all of the Partnership's rental income is derived from the
various convenience store and other retail outlets that it leases to FFP
Marketing on a "triple net" basis. Under those leases, FFP Marketing as tenant,
instead of the Partnership as landlord, bears all taxes, insurance, operating
costs, and capital costs for the properties. The leases also provide for
increased rent payments after each five-year period during the term of the
leases in accordance with any increase in the consumers price index.
The Partnership may acquire additional real estate properties in the future.
Those properties may be leased to FFP Marketing or to others, although no
assurance exists that additional properties will be acquired. Future leases may
or may not be on a "triple-net" basis.
Results of Operations
Rent income of $752,000 and $1,457,000 in the three and six months ended June
30, 1999, represented increases of $52,000 and $144,000, respectively, or 7% and
11%, respectively, over rent income in the corresponding periods of the prior
year. Likewise, interest income of $255,000 and $345,000 in the second quarter
and first half of 1999 reflected improvement of $245,000 and $333,000,
respectively, or 2450% and 2780%, respectively, over interest and other income
in the corresponding periods of 1998. These increases resulted from additional
land rent and additional interest income from the direct financing leases
relating to the 14 properties acquired in February 1999. Rent and interest
income are expected to remain consistent with the second quarter in succeeding
quarters.
General and administrative expenses of $124,000 and $297,000 in the second
quarter and the first half of 1999, compared to $95,000 and $168,000 in the
corresponding periods of 1998, respectively, reflected increases of 31% and 77%,
respectively. These increases were largely due to additional costs incurred in
connection with the acquisition of the 14 additional properties in February 1999
and the preparation of the Partnership's income tax returns. Such preparation
costs were higher than in the prior year as a result of changing tax preparation
software companies after the prior tax software company discontinued that type
of business.
Interest expense increased to $435,000 in the second quarter of 1999,
compared to $390,000 in the second quarter of 1998, a 17% increase. Likewise,
interest expense rose to $787,000 in the first half of 1999, compared to
$759,000 for the first half of the prior year, an increase of 4%. Interest
expense for both periods increased as a result of long-term debt associated with
the additional properties acquired in February 1999. Increased interest expense
is expected to continue in the future as a result of the additional long-term
debt.
Cash flows provided by operating activities increased to $524,000 in the
first half of 1999, compared to $504,000 for the corresponding period of the
prior year, representing a 4% increase.
Comparison to REIT's
The Partnership is not a real estate investment trust ("REIT"), but its
activities are much like those of a REIT. One performance measure used within
the REIT industry is funds from operations ("FFO"). FFO, as defined by the
National Association of Real Estate Investment Trusts ("NAREIT"), means net
income (loss) (determined in accordance with generally accepted accounting
principles or "GAAP"), excluding gains (or losses) from debt restructurings, and
similar activities, and sales of properties, plus depreciation and amortization
of real estate assets, and after adjustments for unconsolidated partnerships and
joint ventures. FFO was developed by NAREIT as a relative measure of performance
and liquidity of an equity REIT in order to recognize that income-producing real
estate historically has not depreciated on the basis determined under GAAP.
While FFO is one appropriate measure of performance of an equity REIT, it (i)
does not represent cash generated from operating activities determined in
accordance with GAAP (which, unlike FFO, generally reflects all cash effects of
transactions and other events that enter into the determination of net income),
(ii) is not necessarily indicative of cash flow available to fund cash needs,
and (iii) should not be considered as an alternative to net income determined in
accordance with GAAP as an indication of the Partnership's operating
performance, or to cash flow from operating activities determined in accordance
with GAAP as a measure of either liquidity or the Partnership's ability to make
distributions or to fund its other operations. The following table presents the
determination of FFO for the Partnership for the three and six month periods
ended June 30, 1999:
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
(In thousands, except per unit data)
Net income/(loss) before
minority interests $161 $(87) $133 ($152)
Adjustments -
(Gain) from early debt payoff 0 (11) 0 (11)
(Gains) from sales of properties 0 0 0 (52)
Depreciation and amortization 287 312 585 602
Funds from operations 448 214 718 387
Less - FFO attributable to minority
interests in subsidiary 179 85 287 154
Funds from operations attributable
to the Partnership $269 $129 $431 $233
FFO per unit (based on units outstanding
for diluted net income/(loss)
per unit calculations) $0.12 $0.06 $0.19 $0.10
Although the Partnership has generated positive funds from operations, it has
not made distributions to unitholders because substantially all cash generated
from the Partnership's operations is required for debt payments. In connection
with the possible refinancing of its debt referred to above, the Partnership is
seeking to extend the maturity of the debt, which could result in an increase in
the Partnership's net cash flow. However, there can be no assurance that the
Partnership will be successful in refinancing its debt or obtaining new loan
terms that would permit distributions, or if such refinancing is obtained, that
management will decide that distributions will be the best method of increasing
value to the Partnership's unitholders.
Liquidity and Capital Resources
The Partnership has contracted with FFP Marketing to provide administrative
and other services for the Partnership. Under this management agreement, FFP
Marketing makes payments on behalf of the Partnership and charges such payments
to its account while the rental income due to the Partnership from FFP Marketing
is applied to this account. Accordingly, the Partnership does not, at this time,
maintain separate cash accounts. However, as the Partnership grows and expands
its real estate holdings, it is expected to function more independently although
management anticipates that FFP Marketing will continue to provide various
administrative services to the Partnership for the foreseeable future.
Effective June 28, 1998, the Partnership, FFP Marketing, and the
Partnership's primary bank lender restructured the debt due to the lender for
which the Partnership and FFP Marketing had retained joint liability after their
December 1997 organizational restructuring. Under this agreement, the lender
released the Partnership from all obligations and required FFP Marketing to loan
the Partnership approximately $14,773,000 (the then current balance of those
obligations). The Partnership executed a note payable to FFP Marketing at that
time and pledged all of its real estate as security for that loan. In turn, FFP
Marketing pledged the note from the Partnership and the Partnership's real
estate as additional collateral on its debt to the lender. On June 28, 1999, FFP
Marketing repaid such lender in full, and such lender released such note and
real estate from all of its liens. As a result, as of June 30, 1999, the
Partnership continues to be indebted to FFP Marketing The terms of that loan
mirror the terms of the prior debt of FFP Marketing to the lender. The
Partnership is required to make monthly principal payments of $95,000 plus
accrued interest at the prime rate.
In April 1999, the Partnership executed a non-binding letter of intent with a
third party lender to provide refinancing of the Partnership's long-term debt
payable to FFP Marketing. The Partnership is currently seeking such refinancing,
which is expected to be secured by a deed of trust lien and security interest
covering 63 of the Partnership's properties. Such refinancing is expected to
provide for equal, monthly principal and interest payments over a 20-year
amortization period. The Partnership has not yet received a binding commitment
for such refinancing but does anticipate, but gives no assurance of, a closing
of such refinancing in the third quarter.
In February 1999, the Partnership purchased 14 additional improved real
properties from a third party on which 12 convenience stores and two truck stops
are operational. The Partnership immediately leased the properties to FFP
Marketing under leases accounted for as operating and direct financing leases,
respectively. Each lease has a 15-year term. The operating land leases provide
for a monthly rental aggregating $28,000. The direct financing leases provide
for a monthly rental aggregating $71,000. The aggregate of these lease payments
from FFP Marketing equals the Partnership's monthly principal and interest
payments payable under its acquisition debt. The leases are "triple net" leases,
under which FFP Marketing pays all taxes, insurance, operating, and capital
costs, and provide for an increase in rent payments after each five-year period
during the term of the leases based upon any increase in the consumer price
index.
In addition, the Partnership purchased inventory and equipment at the 14
locations for approximately $942,000 and $1,750,000, respectively. The
Partnership immediately sold this inventory and equipment to FFP Marketing in
exchange for a note receivable. The note bears interest at the prime rate and is
payable in monthly installments over 8 years.
The Partnership incurred long-term acquisition debt with a third party lender
in the original principal amount of $9,550,000, which is fully amortizable over
15 years with equal, monthly payments of principal and interest. FFP Marketing
guaranteed the Partnership's acquisition indebtedness. The amount of FFP
Marketing's monthly lease payments to the Partnership equals the Partnership's
monthly debt payments.
Although the Partnership expects that any future property acquisitions will
be centered on convenience stores and similar properties, it may also look for
opportunities in other types of investment property that yield an above average
return with an acceptable level of risk.
Year 2000 Computer Issues
The Year 2000 issue ("Y2K") is the result of computer software programs being
coded to use two digits rather than four to define the applicable year. Some of
computer programs that have date-sensitive coding may recognize a date using
"00" as the year 1900 rather than the year 2000. This coding could result in
system failures or miscalculations, causing disruptions of operations.
The Partnership relies upon FFP Marketing and its computer software and
hardware to manage the Partnership's rental activities. FFP Marketing also
utilizes computer programs in operating its own businesses. FFP Marketing has
provided the Partnership with the following summary of its Y2K program.
FFP Marketing has approached the Y2K issue in phases. A Y2K project office
manager, together with strong support from management, has designed a Y2K work
plan that is currently being implemented. The Y2K work plan includes: (1)
identifying and inventorying all Year 2000 tasks and items; (2) assigning
priorities to all tasks and items; (3) remediation of information systems ("IS")
application code, testing and reintegration to production, as well as testing
all replaced systems software and non-remediated applications; (4) contacting
third-party vendors to verify their compliance and perform selected interface
tests with major vendors; (5) determining FFP Marketing's Y2K responsibilities
to its subsidiaries and affiliates; and (6) establishing contingency
alternatives assuming worst-case scenarios.
FFP Marketing continues to progress favorably in its completion of the
various tasks and target dates identified in the Y2K work plan. FFP Marketing
believes it has identified and prioritized all major Y2K-related items. In
addition, many non-IS, merchandise, equipment, financial institution, insurance
and public utility vendors are being contacted, inquiring as to their readiness
and the readiness of their respective vendors. FFP Marketing will perform
follow-up efforts with the above vendors as required. Testing compliance with
major vendors is planned for the remainder of the year. The following reflects
management's assessment of FFP Marketing's Y2K state of readiness on June 30,
1999:
Estimated Estimated
Percentage Completion
Completed Date
Phase
Internal IS and Non-IS systems and
equipment:
Awareness 95% Dec 1999
Assessment 90% Oct 1999
Remediation 80% Oct 1999
Testing 50% Nov 1999
Contingency planning 30% Oct 1999
Suppliers, customers and third party
providers:
Awareness-identify companies 70% Sep 1999
Assessment questionnaire completed
by major suppliers 30% Oct 1999
Assessment review with third party
providers 30% Nov 1999
Review contractual commitments 10% Sep 1999
Risk assessment 50% Aug 1999
Contingency planning 40% Sep 1999
Testing as applicable 40% Oct 1999
FFP Marketing's estimates are judgmental and subject to error. It believes
that work should be significantly finished at the estimated completion date, but
FFP Marketing will continue to reevaluate awareness, send follow-up
questionnaires and update contingency plans as considered necessary.
FFP Marketing estimates that its cost of the Y2K project will be
approximately $500,000 to $750,000, of which about one-half will be capital
costs. The costs incurred to date approximate $400,000, with the remaining cost
for outside consultants software and hardware applications to be funded through
operating cash flow. This estimate includes costs related to the upgrade and/or
replacement of computer software and hardware; costs of remediated code testing
and test result verification; and the reintegration to production of all
remediated applications. In addition, the costs include the testing of
applications and software currently certified as Y2K compliant. FFP Marketing
does not separately track the internal costs incurred for the Y2K project, which
are primarily the related payroll costs for the IS and various user personnel
participating in the project.
Due to the general uncertainty inherent in the Y2K process, primarily due to
issues surrounding the Y2K readiness of third-party suppliers and vendors, a
reasonable worst-case scenario is difficult to determine at this time. FFP
Marketing does not anticipate more than temporary isolated disruptions
attributed to Y2K issues to affect either FFP Marketing or its primary vendors.
FFP Marketing is concentrating on four critical business areas in order to
identify, evaluate and determine the scenarios requiring the development of
contingency plans: (1) merchandise ordering and receipt, (2) petroleum products
ordering and receipt, (3) disruption of power at retail sites, and (4) cash
collection and disbursement systems. To the extent vendors are unable to deliver
products due to their own Year 2000 issues, FFP Marketing believes it will
generally have alternative sources for comparable products and does not expect
to experience any material business disruptions. Although considered unlikely,
the failure of public utility companies to provide telephone and electrical
service could have material consequences. Contingency planning efforts will
escalate as FFP Marketing continues to receive and evaluate responses from all
of its primary merchandise vendors and service providers. These contingency
plans are scheduled to be complete by September 1999.
The costs of the Y2K project and the date on which FFP Marketing plans to
complete the Y2K modifications are based on its management's best estimates,
which were derived utilizing numerous assumptions of future events including the
continued availability of certain resources, third-party modification plans and
other factors. As a result, there can be no assurance that these forward-looking
estimates will be achieved and the actual costs. Vendor compliance could differ
materially from FFP Marketing's current expectations and result in a material
financial risk. In addition, while FFP Marketing is making significant efforts
in addressing all anticipated Y2K risks within its control, this event is
unprecedented. Consequently, there can be no assurance that the Y2K issue will
not have a material adverse impact on FFP Marketing's or the Partnership's
operating results and financial condition.
Forward-Looking Statements
Certain of the statements made in this report are "forward-looking"
statements that involve inherent risks and uncertainties. As defined by the U.S.
Private Securities Litigation Reform Act of 1995, "forward-looking" statements
include information about the Partnership that is based on the beliefs of
management and the assumptions made by, and information currently available to,
management. In making such forward-looking statements, the Partnership is
relying upon the "statutory safe harbors" contained in the applicable statutes
and the rules, regulations and releases of the Securities and Exchange
Commission. Statements that should generally be considered forward-looking
include, but are not limited to, those that contain the words "estimate,"
"anticipate," "in the opinion of management," "expects," "believes," and similar
phrases. Among the factors that could cause actual results to differ materially
from the statements made are the following: changes in real estate conditions,
including rental rates and the construction or availability of competing
properties; changes in the industry in which the Partnership's sole tenant
competes; changes in general economic conditions; the ability of management to
identify acquisitions and investment opportunities meeting the investment
objectives of the Partnership; the timely leasing of unoccupied properties;
timely releasing of currently occupied properties upon expiration of the current
leases or the default of the current tenant; a risk of leasing all of the
Partnership's properties to only one tenant; the Partnership's ability to
generate funds sufficient to meet its debt service payments and other operating
expenses; the inability of the Partnership to control the management and
operation of its tenant and the businesses conducted on the Partnership's
properties; financing risks, including the availability, or lack of
availability, of funds to service or refinance existing debt and to finance
acquisitions of additional property, changes in interest rates associated with
its variable rate debt; the possibility that the Partnership's existing debt,
which requires a so-called "balloon" payment of principal in November 2000, may
be refinanced at a higher interest rate or on other terms less favorable to the
Partnership than at present; the existence of complex tax regulations relating
to the Partnership's status as a publicly-traded real estate partnership and, if
achieved, to its status as a real estate investment trust and the adverse
consequences of the failure to qualify as such; and other risks detailed from
time to time in the Partnership's filings with the Securities and Exchange
Commission. Given these uncertainties, readers are cautioned not to place undue
reliance on the forward-looking statements. The Partnership undertakes no
obligation to publicly release the results of any revisions to these
forward-looking statements that may be made to reflect any future events or
circumstances.
Should one or more of these risks or uncertainties materialize, or should any
underlying assumptions prove incorrect, actual results or outcomes may vary
materially from those described herein as anticipated, believed, estimated,
expected, or intended.
<PAGE>
EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
27 Financial Data Schedule [included in electronic filing only].
Reports on Form 8-K
The Partnership did not file any reports on Form 8-K for the quarter covered
by this Report on Form 10-Q.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
FFP PARTNERS, L.P.
Registrant
By: FFP Real Estate Trust
sole general partner
Date: August 19, 1999 By: /s/ Craig T. Scott
-----------------------------------
Craig T. Scott
Vice President - Finance,
Chief Financial Officer and
General Counsel
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,420
<PP&E> 30,104
<DEPRECIATION> 11,158
<TOTAL-ASSETS> 34,430
<CURRENT-LIABILITIES> 2,379
<BONDS> 22,008
0
0
<COMMON> 1,341
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 34,430
<SALES> 1,457
<TOTAL-REVENUES> 1,802
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 787
<INCOME-PRETAX> 80
<INCOME-TAX> 0
<INCOME-CONTINUING> 80
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 80
<EPS-BASIC> 0.04
<EPS-DILUTED> 0.04
</TABLE>
