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 June 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 June 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>
June 30,
1999 December 31,
(Unaudited) 1998
Assets
<S> <C> <C>
Investment in real estate $32,859,960 $ 32,922,333
Cash and cash equivalents 1,004,682 789,876
Accounts receivable 350,500 642,760
$34,215,142 $ 34,354,969
Liabilities and Partners' Capital
Accounts payable and accrued expenses $ 15,719 $ 31,241
Due to affiliate 38,473 32,690
Real estate taxes payable 280,500 280,500
334,692 344,431
Partners' Capital
General Partner (58,571) (55,969)
Assignee and Limited Partnership
Interests - $25 stated value per
unit, 1,909,127 units outstanding 33,938,921 34,066,407
Subordinated Limited Partner 100 100
33,880,450 34,010,538
$34,215,142 $ 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 Six Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
Revenues
<S> <C> <C> <C> <C>
Parking lot rental $655,103 $640,103 $1,240,206 $1,225,206
Interest income 11,435 12,653 21,537 25,281
666,538 652,756 1,261,743 1,250,487
Expenses
Administrative, including amounts
to related party 30,268 27,019 59,359 57,723
Professional fees 6,822 6,836 11,322 13,482
Management fees to related party 10,134 10,682 22,171 22,646
Depreciation 31,187 31,187 62,373 62,374
78,411 75,724 155,225 156,225
Net earnings $588,127 $577,032 $1,106,518 $1,094,262
Net earnings per unit of assignee
and limited partnership interest-basic $ 0.30 $ 0.30 $ 0.57 $ 0.56
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
REALTY PARKING PROPERTIES L.P.
Statements of Partners' Capital
For the Six Months Ended June 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 1,084,388 - 22,130 1,106,518
Distributions to partners (1,211,874) - (24,732) (1,236,606)
Balance at June 30, 1999 $ 33,938,921 $ 100 $ (58,571) $ 33,880,450
Balance at December 31, 1997 $ 34,102,634 $ 100 $ (55,230) $ 34,047,504
Net earnings 1,072,377 - 21,885 1,094,262
Distributions to partners (1,211,874) - (24,732) (1,236,606)
Balance at June 30, 1998 $ 33,963,137 $ 100 $ (58,077) $ 33,905,160
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
REALTY PARKING PROPERTIES L.P.
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1999 June 30, 1998
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 1,106,518 $ 1,094,262
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation of properties 62,373 62,374
Changes in assets and liabilities
(Increase) decrease in accounts receivable 292,260 (55,000)
Decrease in accounts payable and accrued expenses (15,522) (6,710)
Increase in due to affiliate 5,783 5,355
Net cash provided by operating activities 1,451,412 1,100,281
Cash flows from financing activities -
distributions to partners (1,236,606) (1,236,606)
Net increase (decrease) in cash and cash equivalents 214,806 (136,325)
Cash and cash equivalents
Beginning of period 789,876 1,057,674
End of period $ 1,004,682 $ 921,349
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
REALTY PARKING PROPERTIES L.P.
Notes to Financial Statements
June 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 June 30, 1999
and December 31, 1998.
(3) Investment in Real Estate
Investment in real estate is summarized as follows:
<TABLE>
<CAPTION>
June 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 (984,338) (921,965)
Total $32,859,960 $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 $10,134
and $10,682 during the three months ended June 30, 1999 and 1998,
respectively, and $22,171 and $22,646 during the six months ended June
30, 1999 and 1998, respectively. The general partner was reimbursed for
certain costs incurred relating to administrative and professional
services of the Partnership totaling $28,339 and $25,671 for the three
months ended June 30, 1999 and 1998, respectively, and $52,989 and
$54,512 for the six months ended June 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
June 30, 1999
(Unaudited)
(6) Subsequent Event
On August 13, 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 June 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 June 30, 1999, the Partnership had a working capital position that
includes cash and cash equivalents of $1,004,682 and accounts payable of
$54,192. Cash and cash equivalents decreased $70,448 during the quarter ended
June 30, 1999. This decrease represents the net effect of $547,855 in cash
provided by operating activities and distributions to investors of $618,303.
On August 13, 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
June 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 $655,103 and $640,103 during the three months ended June
30, 1999 and 1998, respectively, and $1,240,206 and $1,225,206 during the six
months ended June 30, 1999 and 1998, respectively. During the first six months
of 1999, the Partnership earned percentage rent at the Birmingham facility
totaling $70,000, representing a $15,000 increase over the same period in 1998.
Expenses, net of depreciation, totaled $47,224 and $44,537 during the
three months ended June 30, 1999 and 1998, respectively, and $92,851 and $93,851
during the six months ended June 30, 1999 and 1998, respectively. For the three
and six months ended June 30, 1999, the Partnership's expenses have remained
consistent with the same periods in 1998.
As the Partnership approached its tenth year certain leases commenced
expiring. The following leases expire 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. It is
expected that the Advisor will notify the Partnership of its intentions for the
Dayton facility in the next few months. It is likely that most leases will be
renewed under the existing terms, however, at least some leases are likely to
include terms less favorable than those contained in the current arrangements.
Outlook
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.
7
<PAGE>
REALTY PARKING PROPERTIES L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Outlook (continued)
During the second quarter of 1999, a national firm submitted Letters of
Intent for the Partnership's Denver and Milwaukee properties. In addition, an
option agreement was received for a portion of 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
the Right of First Refusal. Allright is currently reviewing the terms of the
Letter of Intent and will notify the Partnership of its intentions regarding the
purchase of the portion of the property it does not currently own. If Allright
elects not to purchase the property Management will commence negotiating a
contract with the firm who submitted the Letter of Intent.
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 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 September 30, 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.
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 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.
8
<PAGE>
REALTY PARKING PROPERTIES L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Year 2000 (continued)
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 is addressing and resolving 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 I. FINANCIAL INFORMATION
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Inapplicable
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Inapplicable
Item 2. Changes in Securities and Use of Proceeds
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: Financial Data Schedule
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: 8/10/99 By: /s/ John M. Prugh
John M. Prugh
President and Director
Realty Parking Company, Inc.
General Partner
DATE: 8/10/99 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,004,682
<SECURITIES> 0
<RECEIVABLES> 350,500
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,355,182
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 34,215,142
<CURRENT-LIABILITIES> 334,692
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 34,215,142
<SALES> 0
<TOTAL-REVENUES> 1,261,743
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 155,225
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,106,518
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,106,518
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,106,518
<EPS-BASIC> 0.570
<EPS-DILUTED> 0.000
</TABLE>
