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
March 13, 1996
(Date of report)
AMERICAN RESTAURANT PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
1-9606 48-1037438
(Commission File Number) (I.R.S. Employer
Identification No.)
555 North Woodlawn, Suite 3102
Wichita, Kansas 67208
(Address of principal executive offices) (Zip-Code)
Registrant's telephone number, including area code (316) 684-5119
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
-----------------------------------------------------
AND EXHIBITS
------------
(a) Exhibit No. Exhibits
----------- --------
99(a) Financial Statements of Business Acquired
1. Financial statements of Hospitality Group of
Oklahoma, Inc. as of December 27, 1995 and
for the year then ended.
99(b) Pro Forma Financial Information
1. Pro forma condensed combined consolidated balance
sheet for the Registrant as of December 26, 1995
(unaudited).
2. Pro forma condensed combined consolidated statement
of income for the Registrant for the year ended
December 26, 1995 (unaudited).
Note: The Registrant's investment in Oklahoma Magic, L.P. is
accounted for by the equity method.
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 hereunto duly authorized.
AMERICAN RESTAURANT PARTNERS, L.P.
(Registrant)
By: RMC AMERICAN MANAGEMENT, INC.
Managing General Partner
Date: 5/23/96 By: /s/ Hal W. McCoy
------- ----------------
Hal W. McCoy
President and
Chief Executive Officer
<PAGE>
Item 7
Exhibit No. 99(a)
FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form A- 8 No. 33- 20784) pertaining to the Class A Unit Option Plan of
American Restaurant Partners, L.P. of our report dated April 4, 1996, with
respect to the financial statements of Hospitality Group of Oklahoma, Inc.
included in its current Report (Form 8-K) dated March 13, 1996.
Hill, Harper & Associates, P.C.
/s/ Hill, Harper & Associates, P.C.
May 21, 1996
Brentwood, Tennessee
<PAGE>
HOSPITALITY GROUP
OF OKLAHOMA, INC.
Financial Statements
December 27, 1995
(With Independent Auditor's Report Thereon)
<PAGE>
Independent Auditor's Report
The Board of Directors
Hospitality Group of Oklahoma, Inc.:
We have audited the accompanying balance sheet of Hospitality Group of
Oklahoma, Inc. as of December 27, 1995 and the related statements of
operations, and changes in stockholders' deficit and cash flows for the year
ended. These financials are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements 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 statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
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.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hospitality Group of
Oklahoma at December 27, 1995, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Hill, Harper & Associates, P.C.
April 4, 1996
<PAGE>
HOSPITALITY GROUP OF OKLAHOMA, INC.
Balance Sheet
December 27, 1995
Assets
------
Current assets:
Cash $ 8,912
Other receivables 85,342
Inventory of food and supplies 134,686
Prepaid expenses 11,435
Deferred tax asset - current (note 8) 281,811
---------
Total current assets 522,186
---------
Land, buildings and equipment, less accumulated depreciated
of $4,757,199 (note 5) 1,866,709
---------
Other assets:
Notes receivable - affiliated company, net of allowance for
doubtful notes of $3,821,434 (note 4) 2,923,839
Franchise fees, less accumulated amortization of
$203,178 (note 2) 198,822
Organization costs, less accumulated amortization of $22,956 14,977
Loan cost, less accumulated amortization of $34,034 243,352
Deposits 49,478
Deferred tax asset - noncurrent (note 8) 1,521,713
Other 164,616
---------
Total other assets 5,116,797
---------
Total assets $ 7,505,692
=========
Liabilities and Stockholders' Deficit
-------------------------------------
Current liabilities:
Current portion of long-term debt (note 6) $ 463,137
Notes payable to related parties (note 3) 2,779,046
Notes payable to stockholders' (note 3) 365,497
Accounts payable 714,367
Sales taxes payable 106,843
Accrued income taxes payable (note 8) -
Accrued expenses and withholding taxes 284,659
---------
Total current liabilities 4,713,549
---------
Long-term debt, excluding current portion (note 6) 4,315,811
---------
Total liabilities 9,029,360
---------
Commitments (notes 6 & 7)
Stockholders' deficit
Common Stock of $1 par value. Authorized 200 shares
authorized; 2 shares issued and outstanding 2
Additional paid-in capital 1,484,402
Retained deficit (3,008,072)
---------
Total stockholders' deficit (1,523,668)
---------
Total liabilities and stockholders' deficit $ 7,505,692
=========
See accompanying notes to financial statements.
HOSPITALITY GROUP OF OKLAHOMA, INC.
Statement of Operations
For the Year ended December 27, 1995
Net sales $17,730,313
Cost of sales 4,966,031
----------
Gross profit 12,764,282
----------
Operating expenses:
Labor costs 5,334,128
Utilities, supplies, telephone, vehicles and other 1,801,020
Advertising (notes 2 and 3) 1,196,643
Maintenance 285,801
Occupancy 908,634
General and administrative (note 2) 1,315,363
Management fees - related party (note 3) 1,135,939
Depreciation 555,276
Amortization of other assets 47,160
Taxes, other than income, and miscellaneous financial expenses 251,409
----------
Total operating expenses 12,831,373
----------
Loss from operations (67,091)
----------
Other income (deductions):
Interest income (note 4) 259,054
Interest expense (note 3) (480,645)
Provision for doubtful note receivable (201,778)
Miscellaneous (10,997)
----------
Total other deductions (434,366)
----------
Loss before income taxes (501,457)
Income tax benefit (note 8) (104,668)
----------
Net loss $ (396,789)
==========
See accompanying notes to financial statements.
<TABLE>
HOSPITALITY GROUP OF OKLAHOMA, INC.
Statement of Changes in Stockholders' Deficit
For the Year ended December 27, 1995
<CAPTION>
Additional
Common Stock Preferred Stock Paid - in Retained
Shares Amount Shares Stock Capital Deficit Total
------ ------ ------ ----- --------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 28, 1994
as restated (note 11) 2 $ 2 600 $ 600,000 $ 469,998 $(2,611,283) $(1,541,283)
Contribution of net assets from National
Restaurant Corporation (note 10) - - (600) (600,000) 1,014,404 - 414,404
Net loss for December 27, 1995 - - - - - (396,789) (396,789)
---- ------- ----- ------- --------- ---------- ----------
Balance, December 27, 1995 2 $ 2 - $ - $1,484,402 $(3,008,072) $(1,523,668)
==== ======= ===== ======= ========= ========== ==========
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
HOSPITALITY GROUP OF OKLAHOMA, INC.
Statement of Cash Flows
For the Year ended December 27, 1995
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities:
- ------------------------------------
Net loss $ (396,789)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation 555,276
Amortization 47,160
Provision for doubtful note receivable 201,778
Deferred income tax (123,542)
Net changes in operating assets and liabilities:
Inventories (3,038)
Accounts receivable (10,142)
Prepaid expenses 1,413
Accounts payable and accrued expenses (995,121)
----------
Net cash used by operating activities (723,005)
----------
Cash flows from investing activities:
- ------------------------------------
Decrease in deposits and other assets (46,773)
Purchase of equipment and leasehold improvements (124,209)
----------
Net cash used by investing activities (170,982)
----------
Cash flows from financing activities:
- ------------------------------------
Proceeds from borrowings 1,417,000
Loan costs (64,906)
Advances to related company (213,786)
Advances from related company 332,516
Principal payments on long-term debt (335,984)
----------
Net cash provided by financing activities 1,134,840
----------
Net increase in cash and cash equivalents 240,853
Cash (overdraft) and cash equivalents, beginning of the year (231,941)
----------
Cash and cash equivalents, end of the year $ 8,912
==========
See accompanying notes to financial statements.
HOSPITALITY GROUP OF OKLAHOMA, INC.
Statements of Cash Flows, continued
For the Years ended December 27, 1995
Supplemental disclosures:
- ------------------------
Schedule of noncash financing transactions:
Interest added to notes receivable from affiliates $ 251,469
==========
Cash paid for:
Interest $ 398,262
==========
Income taxes $ 18,774
==========
Net assets contributed by National Restaurant
Corporation (note 10):
Assets contributed $ 3,464,900
Liabiities assumed 1,850,496
Preferred stock cancelled (600,000)
---------
Net assets contributed $ 1,014,404
=========
See accompanying notes to financial statements.
HOSPITALITY GROUP OF OKLAHOMA, INC.
Notes to Financial Statements
December 27, 1995
(1) Summary of Significant Accounting Policies
------------------------------------------
General
-------
The Company began operating Pizza Hut restaurants in Oklahoma in
December, 1986. The Company operates on a 52 or 53 week period with the
year ending on the last Wednesday in December.
Inventories
-----------
Inventories, consisting of food and supplies, are stated at the lower of
cost or market, with cost determined on a first-in, first-out method.
Initial smallwares are capitalized and amortized over three years.
Equipment and Leasehold Improvements
------------------------------------
Equipment and leasehold improvements are carried at cost. Maintenance,
repairs and minor renewals are expensed as incurred. Equipment is
depreciated on a straight-line method over its estimated useful life.
Leasehold improvements are amortized on a straight-line method over the
expected useful life of the improvements, not to exceed the lease period.
Income Taxes
------------
Income taxes are provided in the year transactions enter into the
determination of net earnings, regardless of when such transactions are
recognized for tax purposes.
Cash and Cash Equivalents
-------------------------
For purposes of the statement of cash flows, the Company considers cash
on hand, deposits held by financial institutions, and short-term debt
securities purchased with an original maturity of three months or less to
be cash or cash equivalents.
(2) Franchise Agreements
--------------------
Initial franchise fees are amortized over the life of the agreement on a
straight-line method. Royalties, based upon sales, of $699,210 for the
year ended December 27, 1995, were paid to franchisors.
In addition to royalties, the franchise agreements require minimum levels
of advertising based on sales. Furthermore, the franchise agreement
prohibits the Company's shareholders from transferring their shares of
stock without the franchisor's approval.
(3) Related Party Transactions
--------------------------
The Company has notes payable to stockholders in the amount of $365,497 at
December 27, 1995. The Company also has a notes payable to related
companies in the amount of 2,779,046 at December 27, 1995. These notes
are thirty day demand notes and accrue interest at 9 percent. Interest
expense on the aforementioned notes amounted to $82,383 for the year
ended December 27, 1995.
The Company purchased advertising and promotion from an affiliated
company. The affiliate's fees for such services are based on the actual
costs incurred and principally relate to the reimbursement of print and
media costs. The expense for such advertising was $497,433 for the year
ended December 27, 1995.
The Company receives accounting and management services from a related
party. Accounting and management fees incurred are based on 6.5% of the
Company's sales and amounted to $1,135,939 for the year ended
December 27, 1995.
HOSPITALITY GROUP OF OKLAHOMA, INC.
Notes to Financial Statements, continued
(4) Notes Receivable from Affiliates
--------------------------------
Notes receivable from affiliates are thirty day demand notes and accrue
interest at 9 percent. In accordance with managements expectations and
repayments received subsequent to the balance sheet date, the notes have
been presented as noncurrent as follows:
National Restaurant Corporation $ -
Delta Trades 43,330
Incor 3,821,434
Management Resources 556,554
Dominican Republic 319,355
Delta Development 1,069,018
Nashville Zoo 515,032
FSB Properties 26,649
Bread Only 273,438
Roasters Mid South, Inc. 120,463
---------
6,745,273
Less allowance for doubtful notes (3,821,434)
---------
$ 2,923,839
=========
Interest earned on the aforementioned notes amounted to $251,469 for the
year ended December 27, 1995. Consistent with prior years, any unpaid
accrued interest has been added to the balance of the above notes.
(5) Property and Equipment
----------------------
Property and equipment as of December 27, 1995, consists of the following:
Land $ 484,800
Building 57,500
Equipment 2,020,723
Automobiles 59,082
Leasehold improvements 3,958,710
Office equipment 43,093
---------
6,623,908
Accumulated depreciation 4,757,199
---------
$ 1,866,709
=========
Depreciation expense amounted to $555,276 for the year ended December 27,
1995.
HOSPITALITY GROUP OF OKLAHOMA, INC.
Notes to Financial Statements, continued
(6) Long-term debt
--------------
Long-term debt is summarized as follows:
Notes payable in monthly installments of
$59,812 including interest at 9.2%, maturing
from 1999 through 2005. The loans are secured
by all operating assets of certain Company
restaurants. $ 3,344,973
Note payable with interest rate at 9%, maturing
in 2004. The note is secured by leasehold
improvements. 22,386
Notes payable in monthly installments of $16,310
including interest at 9.3%, maturing 2007. The
loans are secured by all operating assets of
certain Company restaurants. 1,411,589
---------
4,778,948
Less current portion of long term debt 463,137
---------
$ 4,315,811
=========
A summary of long-term maturities of long-term debt is as follows:
Fiscal year
ending December
---------------
1996 $ 463,137
1997 474,737
1998 520,329
1999 558,928
2000 519,739
Thereafter 2,242,078
---------
$ 4,778,948
=========
(7) Commitments
-----------
Minimum annual rentals under noncancelable operating leases are
summarized as follows:
Fiscal year
ending December
---------------
1996 $ 711,539
1997 620,119
1998 569,978
1999 506,758
2000 369,779
Thereafter $ 2,471,563
Rental expense, including contingent rents, was $753,246 for the year
ended December 27, 1995. Contingent rentals based on sales amounted to
$49,661 for the year ended for December 27, 1995.
Hospitality Group of Oklahoma, Inc.
Notes to Financial Statements, continued
(8) Income Taxes
------------
A reconcilation of the income tax provision at the federal statutory rate
to the income tax provision at the effective rate is as follows:
Income taxes computed at the federal statutory rate $ (170,529)
Non deductible penalties 59,267
Other immaterial items 6,595
---------
$ (104,668)
=========
The provision for income tax consists of the following:
Federal:
Current 18,774
Deferred (123,442)
---------
(104,668)
=========
The components of deferred taxes consist of the following:
Deferred tax assets:
Operating loss carryforwards $ 45,346
Depreciation 69,568
Inventory 236,465
Allowance for doubtful notes 1,452,145
---------
Total net deferred tax assets $ 1,803,524
=========
The company has net operating loss carryforwards for federal income taxes
amounting to $119,332 which expire December 2010.
HOSPITALITY GROUP OF OKLAHOMA, INC.
Notes to Financial Statements, continued
(9) Preferred Stock
---------------
On August 25, 1992, the Company's shareholders and board of directors
approved a charter amendment changing the number of authorized shares of
common stock from 1,000 to 200. The board of directors also authorized
the issuance of up to 1,000 shares of non-voting, preferred stock at a
par value of $1,000 per share. Further, the board of directors accepted
a subscription for 600 shares of the preferred stock, which was
subsequently issued, from National Restaurant Corporation, a related
company, in payment of the Company's note payable to National Restaurant
Corporation. During the year ended December 27, 1995, National Restaurant
Corporation contributed its assets to the Company (see note 10).
Simultaneous to the contribution the preferred stock was cancelled and
retired.
(10) Contribution of Net Assets
--------------------------
On April 19, 1995, the stockholders of National Restaurant Corporation
(NRC) agreed to contribute certain net assets to the Company as a
contribution of capital. These assets were contributed at historical
cost. The ownership of National Restaurant Corporation and the Company
are identical. After the contribution, National Restaurant Corporation
ceased all operations. The assets and liablities of NRC which were
contributed to the Company consist of the following:
Net assets contributed by NRC:
Accounts receivable - related party $ 2,384,879
Land and buildings 537,300
Equipment 40,041
Inventory 116,404
Deferred tax asset 190,901
Other assets 195,375
---------
3,464,900
Liabilities assumed by the Company:
Notes payable - related party 1,850,496
Preferred stock cancelled and retired (600,000)
---------
Net contributed capital $ 1,014,404
=========
HOSPITALITY GROUP OF OKLAHOMA, INC.
Notes to Financial Statements, continued
(11) Accounting Changes
------------------
Correction of a Departure from Generally Accepted Accounting
------------------------------------------------------------
Principles (GAAP)
-----------------
During prior years the Company elected not to provide a loss reserve for
a related party receivable in the amount of $3,117,284. The financial
condition of the debtor indicated that the loan was substantially
uncollectible. Accordingly, a loss reserve was warranted. Effective
December 27, 1995 the Company has elected to restate its prior periods
financial statements and provide the necessary loss reserve for this
related party receivable in conformity with generally accepted
accounting principles.
Correction of an Accounting Error
---------------------------------
Management has determined that an adjustment was necessary to properly
record inventory. In prior periods financial statements smallwares
were included in inventory, however, during the year ended December 27,
1995 it was determined that these items were improperly recorded as
assets in prior years, and should have been amortized and expensed in
prior years. The Company has elected to restate its prior financial
statements to correct these accounting errors and expense these items
in conformity with generally accepted accounting principles.
The above changes have the following effect on retained deficit:
Balance, December 28, 1994 as previously reported $ (291,645)
Restatement due to GAAP departure,
net of taxes of $1,184,568 (1,932,716)
Correction of accounting error,
net of taxes of $236,849 (386,922)
---------
Balance, December 28, 1994 as restated $(2,611,283)
=========
(12) Subsequent Event
----------------
On March 12, 1996, the Company contributed 100% of its restaurant
operating assets, including land, buildings, equipment, deposits and
franchise rights, to a newly formed limited partnership. The Company
received a 25% interest in the limited partnership, cash, and a note
receivable from the limited partnership. In addition, the limited
partnership assumed certain third party long term debt, accounts
payable and accrued expenses of the Company.
<PAGE>
Item 7
Exhibit No. 99(b)
PRO FORMA FINANCIAL INFORMATION
The Registrant's investment in Oklahoma Magic, L.P. will be accounted
for using the equity method, with the results of Oklahoma Magic, L.P.'s
operations included in the Registrant's consolidated financial
statements from the date of acquisition.
The following Pro Forma Condensed Combined Consolidated Balance Sheet
is derived from the balance sheet of the Registrant including its
investment in Oklahoma Magic, L.P. as if the acquisition occurred on
December 26, 1995. Also presented is the Pro Forma Combined
Consolidated Statement of Income for the year ended December 26, 1995
including the results of Oklahoma Magic, L.P. assuming the acquisition
occurred at the beginning of the year. The pro forma information
presented is based on the historical financial statements of the
Registrant and Oklahoma Magic, L.P. for the period listed.
The pro forma results are not necessarily indicative of the results
which would have actually been attained if the acquisition had been
consummated on the date indicated, or the results that may be expected
in the future.
<PAGE>
<TABLE>
AMERICAN RESTAURANT PARTNERS, L.P.
PRO FORMA CONDENSED COMBINED CONSOLIDATED
BALANCE SHEET
December 26, 1995
(unaudited)
<CAPTION>
Pro forma
ASSETS Registrant Adjustments Combined
- -------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 782,348 $ $ 782,348
Certificate of deposit 232,219 232,219
Accounts receivable 76,605 76,605
Due from affiliates 24,549 24,549
Notes receivable from
affiliates - current portion 30,872 30,872
Inventories 300,413 300,413
Prepaid expenses 144,036 144,036
------------ ------------ ------------
Total current assets 1,591,042 1,591,042
Net property and equipment 12,475,753 12,475,753
Other assets:
Franchise rights, net 1,099,470 1,099,470
Notes receivable from affiliates 157,083 157,083
Deposit with affiliate 330,000 330,000
Investment in affiliate -- (1) 3,000,000 3,000,000
Other 480,998 480,998
------------ ------------ ------------
$ 16,134,346 $ 3,000,000 $ 19,134,346
============ ============ ============
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Current liabilities:
Notes payable $ -- (2)$ 3,000,000 $ 3,000,000
Accounts payable 1,903,977 1,903,977
Due to affiliates 62,292 62,292
Accrued payroll and other taxes 319,902 319,902
Accrued liabilities 786,598 786,598
Current portion of long-term debt 1,467,970 1,467,970
Current portion of obligations
under capital leases 68,833 68,833
------------ ------------ ------------
Total current liabilities 4,609,572 3,000,000 7,609,572
Other noncurrent liabilities 86,308 86,308
Long-term debt 9,056,792 9,056,792
Obligations under capital leases 1,662,746 1,662,746
General Partners' interest
in Operating Partnership 167,530 167,530
Partners' capital:
General Partners (3,784) (3,784)
Limited Partners:
Class A Income Preference 6,573,417 6,573,417
Classes B and C (4,688,254) (4,688,254)
Cost in excess of carrying value
of assets acquired (1,323,681) (1,323,681)
Notes receivable from employees (6,300) (6,300)
------------ ------------ ------------
Total partners' capital 551,398 0 551,398
------------ ------------ ------------
$ 16,134,346 $ 3,000,000 $ 19,134,346
============ ============ ============
<FN>
See accompanying notes to pro forma
combined consolidated financial statements.
</FN>
</TABLE>
<TABLE>
AMERICAN RESTAURANT PARTNERS, L.P.
PRO FORMA COMBINED CONSOLIDATED
STATEMENT OF INCOME
Year ended December 26, 1995
(unaudited)
<CAPTION>
Pro forma
Registrant Adjustments Combined
------------ ------------ ------------
<S> <C> <C> <C>
Net sales $ 40,004,295 $ $ 40,004,295
Operating costs and expenses:
Cost of sales 10,599,422 10,599,422
Restaurant labor and benefits 10,444,896 10,444,896
Advertising 2,549,729 2,549,729
Other restaurant operating
expenses exclusive of
depreciation and amortization 7,367,758 7,367,758
General and administrative:
Management fees - related party 2,776,768 2,776,768
Other 864,553 864,553
Depreciation and amortization 1,511,158 1,511,158
Equity in loss of affiliate -- (3) 20,045 20,045
------------ ------------ ------------
Income from operations 3,890,011 (20,045) 3,869,966
Interest income 46,334 46,334
Interest expense (1,287,776) (4) (292,500) (1,580,276)
------------ ------------ ------------
(1,241,442) (292,500) (1,533,942)
------------ ------------ ------------
Income before extraordinary item 2,648,569 (312,545) 2,336,024
Extraordinary loss on early
extinguishment of debt 142,491 142,491
------------ ------------ ------------
Income before General Partners'
interest in income of
Operating Partnership 2,506,078 (312,545) 2,193,533
General Partners' interest in
income of Operating Partnership 25,061 (5) (3,125) 21,935
------------ ------------ ------------
Net income $ 2,481,017 $ (309,420) $ 2,171,598
============ ============ ============
Net income allocated to Partners:
Class A Income Preference $ 519,316 $ (64,766) $ 454,550
Class B $ 737,783 $ (92,012) $ 645,770
Class C $ 1,223,918 $ (152,642) $ 1,071,278
Weighted average number of Partnership
units outstanding during period:
Class A Income Preference 824,978 824,978
Class B 1,172,025 1,172,025
Class C 1,944,299 1,944,299
Income before extraordinary item per Partnership
interest:
Class A Income Preference $ 0.67 $ 0.08 $ 0.59
Class B $ 0.67 $ 0.08 $ 0.59
Class C $ 0.67 $ 0.08 $ 0.59
Extraordinary loss per Partnership interest:
Class A Income Preference $ 0.04 $ 0.04
Class B $ 0.04 $ 0.04
Class C $ 0.04 $ 0.04
Net income per Partnership interest:
Class A Income Preference $ 0.63 $ 0.08 $ 0.55
Class B $ 0.63 $ 0.08 $ 0.55
Class C $ 0.63 $ 0.08 $ 0.55
<FN>
See accompanying notes to pro forma
combined consolidated financial statements.
</FN>
</TABLE>
AMERICAN RESTAURANT PARTNERS, L.P.
NOTES TO PRO FORMA COMBINED CONSOLIDATED
FINANCIAL STATEMENTS
(unaudited)
ACQUISITION OF ASSETS
- ---------------------
On March 13, 1996, American Restaurant Partners, L.P.(the "Registrant"),
through its wholly-owned subsidiary, American Pizza Partners, L.P.,
purchased a 45% interest in a newly formed limited partnership that will
own and operate thirty-three Pizza Hut restaurants in Oklahoma. The name
of the new partnership is Oklahoma Magic, L.P. ("Magic"). The remaining
ownership interests are held by Restaurant Management Company of Wichita,
Inc. (29.25%), an affiliate of the Registrant, Hospitality Group of
Oklahoma, Inc. (25%), the former owners of the thirty-three Oklahoma
restaurants, and RMC American Management, Inc. (RAM)(.75%), the managing
general partner of the Registrant. RAM is also the managing general
partner of Magic.
The Registrant paid $3.0 million in cash for its 45% interest in the new
partnership. Intrust Bank in Wichita has interim financed the $3.0
million until such time as permanent financing can be obtained.
PRO FORMA ADJUSTMENTS
- ---------------------
The pro forma combined consolidated financial statements use the equity
method of accounting for the Registrant's investment in Oklahoma Magic,
L.P. and the adjustments to the pro forma condensed combined consolidated
balance sheet at December 26, 1995 reflect the effects of the acquisition
on that date. The pro forma adjustments to the pro forma combined
consolidated statement of income for the year ended December 26, 1995
have been prepared as if the acquisition occurred at the beginning of the
year.
1. Records the Registrant's original investment in Oklahoma Magic, L.P.
2. Records the $3,000,000 note payable obtained to finance the
Registrant's investment in Oklahoma Magic, L.P.
3. Reflects the Registrant's 45% interest in Oklahoma Magic's pro forma
net loss for the year ended December 26, 1995.
4. Reflects interest expense calculated at 9.75% representing the cost
of financing the Registrant's investment in Oklahoma Magic, L.P.
5. Reflects General Partners' interest in the pro forma adjustment
amounts.
6. Pro forma earnings per Partnership interest of net income have been
allocated in the same manner required by the Partnership Agreements for
the allocation of taxable income and loss.
