FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Mark One)
{ X } QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended June 30, 1998 Commission file number 0-17616
Realty Parking Properties L.P.
(Exact Name of Registrant as Specified in its Charter)
Delaware 52-1591575
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
225 East Redwood Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (410) 727-4083
N/A
(Former Name, Former Address, and Former Fiscal Year,
if Changed Since Last Report.)
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
<PAGE>
REALTY PARKING PROPERTIES L.P.
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets 1
Statements of Operations 2
Statements of Partners' Capital 3
Statements of Cash Flows 4
Notes to Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-8
Part II. Other Information
Item 1. through Item 6. 9
Signatures 10
<PAGE>
REALTY PARKING PROPERTIES L.P.
Balance Sheets
<TABLE>
<CAPTION>
Sept. 30,
1998 December 31,
(Unaudited) 1997
Assets
<S> <C> <C>
Investment in real estate $32,953,520 $ 33,047,081
Cash and cash equivalents 846,676 1,057,674
Accounts receivable 606,960 294,290
$34,407,156 $ 34,399,045
Liabilities and Partners' Capital
Accounts payable and accrued expenses $ 24,313 $ 26,253
Due to affiliate 32,823 30,998
Real estate taxes payable 294,290 294,290
351,426 351,541
Partners' Capital
General Partner (55,065) (55,230)
Assignee and Limited Partnership
Interests - $25 stated value per
unit, 1,909,127 units outstanding 34,110,695 34,102,634
Subordinated Limited Partner 100 100
34,055,730 34,047,504
$34,407,156 $ 34,399,045
</TABLE>
See accompanying notes to financial statements
1
<PAGE>
REALTY PARKING PROPERTIES L.P.
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1998 1997 1998 1997
Revenues
<S> <C> <C> <C> <C>
Parking lot rental $ 842,772 $ 698,948 $2,067,978 $1,904,154
Interest income 11,227 12,570 36,508 39,390
853,999 711,518 2,104,486 1,943,544
Expenses
Administrative, including amounts
to related party 25,611 26,357 83,334 99,990
Professional fees 17,800 4,500 31,282 13,290
Management fees to related party 10,528 9,029 33,174 29,477
Depreciation 31,187 31,187 93,561 93,561
85,126 71,073 241,351 236,318
Net earnings $ 768,873 $ 640,445 $1,863,135 $1,707,226
Net earnings per unit of assignee
and limited partnership interest-basic $ 0.39 $ 0.33 $ 0.96 $ 0.88
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
REALTY PARKING PROPERTIES L.P.
Statements of Partners' Capital
For the Nine Months Ended September 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
Assignee
and Limited Subordinated
Partnership Limited General
Interests Partner Partner Total
<S> <C> <C> <C> <C>
Balance at December 31, 1997 $ 34,102,634 $ 100 $ (55,230) $ 34,047,504
Net earnings 1,825,872 - 37,263 1,863,135
Distributions to partners (1,817,811) - (37,098) (1,854,909)
Balance at September 30, 1998 $ 34,110,695 $ 100 $ (55,065) $ 34,055,730
Balance at December 31, 1996 $ 34,320,308 $ 100 $ (50,788) $ 34,269,620
Net earnings 1,673,081 - 34,145 1,707,226
Distributions to partners (1,817,811) - (37,098) (1,854,909)
Balance at September 30, 1997 $ 34,175,578 $ 100 $ (53,741) $ 34,121,937
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
REALTY PARKING PROPERTIES L.P.
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
Sept. 30, 1998 Sept. 30, 1997
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 1,863,135 $ 1,707,226
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation of properties 93,561 93,561
Changes in assets and liabilities
Increase in accounts receivable (312,669) (57,983)
Decrease in accounts payable and accrued expenses (1,940) (5,222)
Increase (decrease) in due to affiliates 1,824 (7,165)
Net cash provided by operating activities 1,643,911 1,730,417
Cash flows from financing activities -
distributions to partners (1,854,909) (1,854,909)
Net decrease in cash and cash equivalents (210,998) (124,492)
Cash and cash equivalents
Beginning of period 1,057,674 1,134,392
End of period $ 846,676 $ 1,009,900
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
REALTY PARKING PROPERTIES L.P.
Notes to Financial Statements
September 30, 1998
(Unaudited)
(1) The Partnership and Basis of Preparation
The accompanying financial statements of Realty Parking Properties L.P.
(the "Partnership") do not include all of the information and note
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles. The unaudited
interim financial statements reflect all adjustments which are, in the
opinion of management, necessary to a fair statement of the results for
the interim periods presented. All such adjustments are of a normal
recurring nature. The unaudited interim financial information should be
read in conjunction with the financial statements contained in the 1997
Annual Report.
(2) Cash and Cash Equivalents
The Partnership considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. Cash and
cash equivalents consist entirely of cash and money market accounts and
are stated at cost, which approximates market value at September 30,
1998 and December 31, 1997.
(3) Investment in Real Estate
Investment in real estate is stated at the lower of fair value or cost,
net of accumulated depreciation, and includes all related acquisition
costs of the properties, and is summarized as follows:
<TABLE>
<CAPTION>
September 30, 1998 December 31, 1997
<S> <C> <C>
Land $30,207,717 $30,207,717
Buildings 3,445,777 3,445,777
Land Improvements 190,804 190,804
33,844,298 33,844,298
Less: accumulated depreciation (890,778) (797,217)
Total $32,953,520 $33,047,081
</TABLE>
Depreciation of the garage structures is computed using the
straight-line method over 31.5 years for property placed in service
prior to January 1, 1994 and 39 years for property placed in service
after January 1, 1994.
(4) Related Party Transactions
The Partnership's general partner earned a management fee of $10,528
and $9,029 (1% of gross revenues of the properties and other sources of
income) during the three months ended September 30, 1998 and 1997,
respectively, and $33,174 and $29,477 during the nine months ended
September 30, 1998 and 1997, respectively. The general partner is
reimbursed for certain costs incurred relating to administrative and
professional services of the Partnership totaling $22,295 and $25,208
for the three months ended September 30, 1998 and 1997, respectively,
and $76,807 and $94,927 for the nine months ended September 30, 1998
and 1997, respectively.
(5) Net Earnings Per Unit of Assignee and Limited Partnership Interests
Net earnings per unit of assignee and limited partnership interests is
disclosed on the Statements of Operations and is based upon 1,909,127
units outstanding.
-5-
<PAGE>
REALTY PARKING PROPERTIES L.P.
Notes to Financial Statements
September 30, 1998
(Unaudited)
(6) Subsequent Event
On November 12, 1998, the Partnership made a cash distribution totaling
$618,303 of which 98% is allocated to assignee and limited partners.
This distribution was derived from funds provided by operations during
the quarter ended September 30, 1998. Assignee and limited partners
received a cash distribution of $.317 per original $25 unit.
-6-
<PAGE>
REALTY PARKING PROPERTIES L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At September 30, 1998, the Partnership had a working capital position
that includes cash and cash equivalents of $846,676 and accounts payable of
$57,136. Cash and cash equivalents decreased $74,673 during the third quarter of
1998. This decrease represents the net effect of $543,630 in cash provided by
operating activities and distributions to investors of $618,303. It is
anticipated that remaining cash and cash equivalents will be sufficient to
satisfy the Partnership's liquidity requirements.
On November 12, 1998, the Partnership made a distribution to investors
of $618,303 of which 98% was allocated to holders of assignee and limited
partnership units in accordance with the Partnership Agreement. The distribution
consisted of funds provided by operations during the quarter ended September 30,
1998.
The Partnership currently has no plans to use working capital to
perform major repairs or improvements to any of its properties and no
acquisitions of additional properties are anticipated.
Results of Operations
The Partnership leases its facilities to parking operators under terms
that typically include a minimum rent calculated as a percentage of certain
acquisition costs. In addition, lessees are typically obligated to pay
percentage rent, calculated as a percentage of gross parking revenues.
Total parking lot rents of $842,772 and $2,067,978 were earned in the
three and nine months ended September 30, 1998, respectively. These amounts
represent increases of 20% and 8%, respectively, from the same periods in 1997.
The increases are the result of additional percentage rents that were earned at
three of the Partnership's properties. During the first nine months of 1998, the
Partnership earned percentage rents at the Denver, Birmingham and Milwaukee
facilities totaling $81,055, $61,118 and $170,496, respectively. During the
first nine months of 1997, the Partnership earned percentage rent at only the
Birmingham and Milwaukee properties, which totaled $54,844 and $94,000,
respectively. The Denver facility earned percentage rent in 1998 due to an
increase in revenue brought about by a decrease in the supply of other parking.
The Denver Pavilions, a $200 million retail project, is being constructed on two
city blocks that had previously been used for parking. The Denver facility may
experience a decrease in revenues once the Denver Pavilions opens for business,
as it has approximately 900 parking spaces. The increase in percentage rent at
the Milwaukee facility is largely attributable to construction on the Milwaukee
Convention Center. The Milwaukee garage is adjacent to the convention center and
has been the primary parking location for many of the construction workers. At
the completion of construction, it is anticipated that revenues will decline due
to the loss of these parkers.
Expenses during the three and nine months ended September 30, 1998, net
of depreciation, totaled $53,939 and $147,790, representing increases of 35% and
4% over the same periods in 1997. The net increase in expenses is the result of
increased professional fees related to consulting services performed at various
facilities.
As the Partnership approaches its tenth year, certain leases will
commence expiring in mid-1999. In anticipation, management is closely reviewing
the operating plans for each property. If the Partnership continues to own its
properties after the expiration of their initial lease terms, it is likely that
most leases would be renewed on terms that are similar or improved over current
terms. At least a couple of leases, however, are likely to include terms less
favorable than contained in the current arrangements.
-7-
<PAGE>
REALTY PARKING PROPERTIES L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Year 2000
The General Partner is aware of the issues associated with the
programming code in many existing computer systems (the "Year 2000" issue) as
the millennium approaches. The General Partner has conducted a review of its
computer systems to identify hardware and software affected by the Year 2000
issue. This issue affects computer systems having date sensitive programs that
may not properly recognize the Year 2000. Systems that do not properly recognize
such information could generate erroneous data or cause a system to fail
resulting in business interruption.
With respect to its existing computer systems, the General Partner is
upgrading, generally in order to meet the demands of its expanding business. In
the process, the General Partner is taking steps to identify, correct and/or
reprogram and test its existing systems for Year 2000 compliance. It is
anticipated that all new system upgrades or reprogramming efforts will be
completed by mid-1999, allowing adequate time for testing. The General Partner
presently believes that with modification to existing software the Year 2000
issue can be mitigated. However, given the complexity of the Year 2000 issues,
there can be no assurances that the General Partner will be able to address the
problem without costs and uncertainties that might affect future financial
results of the Partnership or cause reported financial information of the
Partnership not to be necessarily indicative of future operating results or
future financial condition.
The General Partner has incurred, and expects to incur additional,
internal costs as well as other expenses to address the necessary software
upgrades, training, data conversion, testing and implementation related to the
Year 2000 issue. Such costs are being expenses as incurred. The General Partner
does not expect the amounts required to be expensed to have a material effect on
the Partnership's financial position or results of operations. The Year 2000
issue is expected to affect the systems of various entities with which the
Partnership and the General Partner interact including the Advisor of the
Partnership's parking properties as well as payors, suppliers and vendors. There
can be no assurance that data produced by systems of other entities on which the
General Partner's systems rely will be converted on a timely basis or that a
failure by another entity's systems to be Year 2000 compliant will not have a
material adverse effect on the Partnership.
The Partnership is in the process of developing a contingency plan and
will continue to monitor the progress of the Advisor of the Partnership's
parking properties as well as payors, suppliers and vendors.
-8-
<PAGE>
REALTY PARKING PROPERTIES L.P.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Inapplicable
Item 2. Changes in Securities
Inapplicable
Item 3. Defaults upon Senior Securities
Inapplicable
Item 4. Submission of Matters to a Vote of Security Holders
Inapplicable
Item 5. Other Information
Inapplicable
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits: None
b) Reports on Form 8-K: None
-9-
<PAGE>
REALTY PARKING PROPERTIES L.P.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
REALTY PARKING PROPERTIES L.P.
DATE: 11/13/98 By: /s/ John M. Prugh
John M. Prugh
President and Director
Realty Parking Company, Inc.
General Partner
DATE: 11/13/98 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Realty Parking Company, Inc.
General Partner
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with legend, if applicable)
</LEGEND>
<CIK> 0000841127
<NAME> Realty Parking Properties L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-1-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 846,676
<SECURITIES> 0
<RECEIVABLES> 606,960
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,453,635
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 34,407,156
<CURRENT-LIABILITIES> 351,426
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 34,407,156
<SALES> 0
<TOTAL-REVENUES> 2,104,486
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 241,351
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,863,135
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,863,135
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,863,135
<EPS-PRIMARY> 0.960
<EPS-DILUTED> 0.000
</TABLE>
