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, 1999
{ } 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 September 30, 1999 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 7-9
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 10
Part II. Other Information
Item 1. through Item 6. 10
Signatures 11
<PAGE>
REALTY PARKING PROPERTIES L.P.
Balance Sheets
<TABLE>
<CAPTION>
Sept. 30,
1999 December 31,
(Unaudited) 1998
Assets
<S> <C> <C>
Investment in real estate $ 32,828,772 $ 32,922,333
Cash and cash equivalents 942,452 789,876
Accounts receivable 569,486 642,760
$ 34,340,710 $ 34,354,969
Liabilities and Partners' Capital
Accounts payable and accrued expenses $ 24,834 $ 31,241
Due to affiliate 30,857 32,690
Real estate taxes payable 280,500 280,500
336,191 344,431
Partners' Capital
General Partner (56,089) (55,969)
Assignee and Limited Partnership
Interests - $25 stated value per
unit, 1,909,127 units outstanding 34,060,508 34,066,407
Subordinated Limited Partner 100 100
34,004,519 34,010,538
$ 34,340,710 $ 34,354,969
</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,
1999 1998 1999 1998
Revenues
<S> <C> <C> <C> <C>
Parking lot rental $ 802,065 $ 842,772 $ 2,042,272 $ 2,067,978
Interest income 11,283 11,227 32,820 36,508
813,348 853,999 2,075,092 2,104,486
Expenses
Administrative, including amounts
to related party 26,427 25,611 85,785 83,334
Professional fees 4,500 17,800 15,822 31,282
Management fees to related party 8,863 10,528 31,034 33,174
Depreciation 31,187 31,187 93,561 93,561
70,977 85,126 226,202 241,351
Net earnings $ 742,371 $ 768,873 $ 1,848,890 $ 1,863,135
Net earnings per unit of assignee
and limited partnership interest-basic $ 0.38 $ 0.39 $ 0.95 $ 0.96
</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, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
Assignee
and Limited Subordinated
Partnership Limited General
Interests Partner Partner Total
<S> <C> <C> <C> <C>
Balance at December 31, 1998 $ 34,066,407 $ 100 $ (55,969) $ 34,010,538
Net earnings 1,811,912 - 36,978 1,848,890
Distributions to partners (1,817,811) - (37,098) (1,854,909)
Balance at September 30, 1999 $ 34,060,508 $ 100 $ (56,089) $ 34,004,519
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
</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, 1999 Sept. 30, 1998
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 1,848,890 $ 1,863,135
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) decrease in accounts receivable 73,274 (312,669)
Decrease in accounts payable and accrued expenses (6,407) (1,940)
Increase (decrease) in due to affiliate (1,833) 1,824
Net cash provided by operating activities 2,007,485 1,643,911
Cash flows from financing activities -
distributions to partners (1,854,909) (1,854,909)
Net increase (decrease) in cash and cash equivalents 152,576 (210,998)
Cash and cash equivalents
Beginning of period 789,876 1,057,674
End of period $ 942,452 $ 846,676
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
REALTY PARKING PROPERTIES L.P.
Notes to Financial Statements
September 30, 1999
(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 1998
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,
1999 and December 31, 1998.
(3) Investment in Real Estate
Investment in real estate is summarized as follows:
<TABLE>
<CAPTION>
September 30, 1999 December 31, 1998
<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 (1,015,526) (921,965)
Total $ 32,828,772 $32,922,333
</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 $8,863 and
$10,528 during the three months ended September 30, 1999 and 1998,
respectively, and $31,034 and $33,174 during the nine months ended
September 30, 1999 and 1998, respectively. The general partner was
reimbursed for certain costs incurred relating to administrative and
professional services of the Partnership totaling $21,994 and $22,295
for the three months ended September 30, 1999 and 1998, respectively,
and $74,983 and $76,807 for the nine months ended September 30, 1999
and 1998, 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, 1999
(Unaudited)
(6) Subsequent Event
On November 15, 1999, the Partnership intends to make a cash
distribution totaling $618,303 of which 98% will be allocated to
assignee and limited partners. The distribution is comprised of funds
provided by operations through September 30, 1999. Assignee and limited
partners will receive 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, 1999, the Partnership had a working capital position
that includes cash and cash equivalents of $942,452, accounts receivable (net of
real estate taxes) of $288,986, and accounts payable of $55,691. Cash and cash
equivalents decreased $62,230 during the quarter ended September 30, 1999. This
decrease represents the net effect of $556,073 in cash provided by operating
activities and distributions to investors of $618,303.
On November 15, 1999, the Partnership intends to make a cash
distribution totaling $618,303 of which 98% will be allocated to assignee and
limited partners. The distribution is comprised of funds provided by operations
through September 30, 1999.
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. It is anticipated that
remaining cash and cash equivalents will be sufficient to satisfy the
Partnership's liquidity requirements.
Results of Operations
Parking lot rental income includes base rents and percentage rents
earned pursuant to the lease agreements in effect during each period. The
Partnership leases its facilities to Allright Corporation (the "Advisor") under
terms that typically include a minimum rent calculated as a percentage of
certain acquisition costs. In addition, the lessee is obligated to pay
percentage rent, calculated as a percentage of gross parking revenues. Total
parking lot rents were $802,065 and $842,772 during the three months ended
September 30, 1999 and 1998, respectively, and $2,042,272 and $2,067,978 during
the nine months ended September 30, 1999 and 1998, respectively. During the
first nine months of 1999, the Partnership earned percentage rents at the
Birmingham, Denver and Milwaukee facilities totaling $286,962, representing a
$25,706 decrease over the same period in 1998. The decline in percentage rents
is largely attributable to lower revenues at the Denver facility, brought about
by an increase in the supply of parking around the property, and was anticipated
as the market absorbs the increased supply of parking.
Expenses, net of depreciation, totaled $39,790 and $53,939 during the
three months ended September 30, 1999 and 1998, respectively, and $132,641 and
$147,790 during the nine months ended September 30, 1999 and 1998, respectively.
For the three and nine months ended September 30, 1999, the Partnership's
expenses have decreased from the same periods in 1998. Consulting services were
rendered at various facilities during 1998 that were not repeated in 1999.
Outlook
As the Partnership entered its tenth year, certain leases expired. The
following leases expired during 1999: Little Rock, Miami, Denver and Dayton. The
leases on the remaining properties will expire in 2000. To date, the Advisor has
exercised lease extensions under the same terms as those currently in existence
for the Little Rock, Miami and Denver properties. The Advisor notified the
Partnership that it would not extend its lease on the Dayton facility.
Management is currently reviewing several strategic alternatives for this
facility. Until a final alternative is determined, the facility will be operated
under a management contract with a national parking operator for a fee. Under
this arrangement, the return generated by the Dayton facility will decline by an
estimated $50,000 on an annual basis from the return under the previous lease
arrangement with the Advisor. It is still likely that most leases that expire in
2000 will be renewed under the existing terms, however, at least some leases of
properties similar to
7
<PAGE>
REALTY PARKING PROPERTIES L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Outlook (continued)
Dayton are likely to include terms less favorable than those contained in the
current lease arrangements. The renewal of leases on less favorable terms than
the existing lease arrangements is not expected to negatively impact the
Partnership's operating liquidity needs. However, the Partnership may need to
adjust its distribution rate to investors in the future to reflect the actual
terms of the lease renewals.
The Partnership, in accordance with its original investment strategy,
continues to examine opportunities for disposition of its facilities. While it
has been anticipated that the highest returns would be obtained from selling
properties for development potential, strong gains may also be earned from
selling properties based on their parking economics.
The Partnership has received strong interest in several of its
properties. A national firm has submitted Letters of Intent for the
Partnership's Denver and Milwaukee properties. In addition, an option agreement
was received for the Partnership's St. Paul-Tank property. Management has
reviewed the offers for the Milwaukee and St. Paul-Tank properties and is in the
process of negotiating contracts with the potential buyers. The Denver property
is owned jointly with Allright Corporation which has a Right of First Refusal.
Allright has decided to exercise its Right of First Refusal for the purchase of
the portion of the property it does not currently own in the amount of
$8,625,000. A sale date is currently scheduled for December 15, 1999. There is
no assurance that an acceptable contract can be negotiated on the Milwaukee
and/or St. Paul-Tank properties or that if negotiated, the buyers will close on
these properties or the Denver property.
Management continues to monitor the status of its Los Angeles property.
Downtown Los Angeles has not recovered from the early 90's recession. Economic
conditions in certain sections of the City have declined in recent years.
Management is hopeful that this situation will improve in the future in concert
with California's ongoing economic recovery.
During the first quarter, the Partnership's Advisor was acquired by
Central Parking Systems. While certain parking facilities could be run by
Central Parking Systems in the future, most facilities will continue to be
operated by the Advisor. All terms and conditions of the parking leases will
continue to remain in effect, whether the facilities are operated by the Advisor
or Central Parking Systems.
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 has
upgraded 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. All new system upgrades and
reprogramming efforts were substantially completed by October 29, 1999 and
system testing is currently underway. However,
8
<PAGE>
REALTY PARKING PROPERTIES L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Year 2000 (continued)
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.
The General Partner has incurred, and expects to incur additional
internal costs as well as other expenses to address the necessary testing and
implementation related to the Year 2000 issue. Costs are being expensed 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 lessee of the Partnership's parking properties as well as payors, suppliers
and vendors. The lessee has been queried on its Year 2000 readiness. Management
believes the lessee has addressed its concerns on a timely basis and will
continue to evaluate the lessee's Year 2000 readiness and develop contingency
plans as appropriate. To date, Management is not aware of any significant Year
2000 issue that could materially impact the lessee. There can be no assurance,
however, 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.
Management believes it has an effective program in place to resolve the
Year 2000 issue in a timely manner. Contingency plans involve system
enhancement, manual workarounds, and adjusting staffing strategies.
Nevertheless, Management believes that it could continue its normal business
operations if compliance is delayed. The General Partner does not believe that
the Year 2000 issue will materially impact the Partnership's results of
operations, liquidity, or capital resources.
9
<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
-10-
<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: 11/10/99 By: /s/ John M. Prugh
John M. Prugh
President and Director
Realty Parking Company, Inc.
General Partner
DATE: 11/10/99 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Realty Parking Company, Inc.
General Partner
-11-
<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-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 942,452
<SECURITIES> 0
<RECEIVABLES> 569,486
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,511,938
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 34,340,710
<CURRENT-LIABILITIES> 336,191
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 34,340,710
<SALES> 0
<TOTAL-REVENUES> 2,075,092
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 226,202
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,848,890
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,848,890
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,848,890
<EPS-BASIC> 0.950
<EPS-DILUTED> 0.000
</TABLE>
