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FORM 10-Q.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 31326, eff. 10/22/92.)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended June 30, 1998
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 Number: 33-26327
RAINES ROAD, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 62-1375245
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification)
4400 Harding Road, Suite 500, Nashville, Tennessee
37205 (Address of principal executive office) (Zip Code)
(615) 292-1040
(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 at least the past 90 days.
YES X NO
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statement.
RAINES ROAD, L.P.
(A Delaware Limited Partnership)
FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED June 30, 1998 AND 1997
INDEX
Financial Statements
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to financial statements 6
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<TABLE>
RAINES ROAD, L.P.
(A Limited Partnership)
BALANCE SHEETS
(Unaudited)
<CAPTION>
ASSETS
June 30, December 31,
1998 1997
<S> <C> <C>
CASH $ 26,220 $98,678
RESTRICTED CASH 380,198 380,198
LAND AND LAND IMPROVEMENTS 5,632,923 5,632,923
Total Assets $6,039,341 $ 6,111,799
=========== ==========
LIABILITIES AND PARTNERS' DEFICIT
NOTE PAYABLE TO AFFILIATE $4,700,000 $4,700,000
ACCRUED INTEREST PAYABLE TO
AFFILIATE 2,800,434 2,524,934
ACCOUNTS PAYABLE 260,564 282,942
TOTAL LIABILITIES 7,760,998 7,507,876
PARTNERS' DEFICIT:
Limited Partners (1,875
Units Outstanding) (1,721,657) (1,396,077)
General Partner - -
Total Partners' Deficit (1,721,657) (1,396,077)
Total Liabilities &
Partners' Deficit $6,039,341 $6,111,799
========== ==========
<FN>
See notes to financial statements.
/TABLE
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<TABLE>
RAINES ROAD, L.P.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Quarter to Date Year to Date
Ending June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
LAND SALES:
Gross Proceeds $ - $ 2,220,000 $ -$ 2,220,000
Cost of land and
improvements sold - (1,434,339) - (1,434,339)
Closing costs - (144,711) - (144,711)
Gain on land sales - 640,950 - 640,950
Interest - 870 3,331 1,104
------ ------ ------ ------
Total Revenues - 641,820 3,331 642,054
EXPENSES:
Property Tax & Penalties 11,190 5,518 22,380 5,518
Interest 141,000 141,000 282,000 282,000
Program Management Fees 750 750 1,500 1,500
Professional Services 3,734 8,108 11,384 12,908
Architect and Engineering
Fees 1,981 - 9,907 -
Administrative Expenses 1,468 8,501 1,740 10,974
Total Expenses 160,123 163,877 328,911 312,900
Net Income (Loss) $ (160,123)$477,943 $(325,580)$329,154
======= ======== ======= =======
<FN>
See notes to financial statements.
/TABLE
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<TABLE>
RAINES ROAD, L.P.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Six Months Ended
June 30,
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net Income (Loss) $ (325,580) $ 329,154
Adjustments to reconcile net
income (loss) to net cash used
in operating activities:
Cost of Land and Improvements sold - 1,434,339
Cost of Land and Improvements - (1,159,597)
Increase (decrease) in accrued
interest payable 275,500 (452,500)
Increase in construction payable - 1,109,141
Decrease in accounts payable (22,378) (41,829)
Increase in restricted cash - (1,093,620)
Increase in accounts receivable - (17,114)
------- --------
Net Cash used in
operating activities (72,458) 107,974
NET (DECREASE) INCREASE IN CASH (72,458) 107,974
CASH AT JANUARY 1, 98,678 41,633
CASH AT JUNE 30, $ 26,220 $ 149,607
Supplemental Disclosures of
Cash Flow Information:
Cash paid during the year
for interest $ - $ 725,000
======== ========
<FN>
See notes to financial statements.
/TABLE
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RAINES ROAD, L.P.
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS
For the Three and Six Months Ended June 30, 1998 and 1997
(Unaudited)
A. ACCOUNTING POLICIES
The unaudited financial statements presented herein have been
prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and note disclosures required by
generally accepted accounting principles. These statements should
be read in conjunction with the financial statements and notes
thereto included in the Partnership's Form 10-K for the year ended
December 31, 1997. In the opinion of management such financial
statements include all adjustments, consisting only of normal
recurring adjustments, necessary to summarize fairly the
Partnership's financial position and results of operations. The
results of operations for the six month period ended June 30, 1998
may not be indicative of the results that may be expected for the
year ending December 31, 1998.
B. RELATED PARTY TRANSACTIONS
The General Partner and its affiliates have been actively
involved in managing the property. Compensation earned for these
services for the first six months were as follows:
1998 1997
Program Management Fees $ 1,500 $ 1,500
Development Fee - 50,456
C. COMPREHENSIVE INCOME
Effective January 1, 1998, the Partnership adopted
Statement of Financial Accounting Standards (SFAS) No. 130.
Reporting Comprehensive Income. SFAS No. 130 establishes standards
for reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements
and requires that all components of comprehensive income be
reported in a financial statement that is displayed with the same
prominence as other financial statements. Comprehensive income is
defined as the change in equity of a business enterprise, during a
period, associated with transactions and other events and
circumstances from non-owner sources. It includes all changes in
equity during a period except those resulting from investments by
owners and distributions to owners. During the first three and six
month periods ended June 30, 1998 and 1997, the Partnership had no
components of comprehensive income. Accordingly, comprehensive
income for each of the periods was the same as net income(loss). <PAGE>
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
There have been no sales during the first six months of
1998.
Overall operations of the Registrant are comparable to
prior quarters with the following exception. The increase in
professional fees is due to higher accounting fees and the timing
of audit and tax payments. The increase in architect and
engineering fees in 1998 is due to the Registrant expensing certain
engineering fees that related to the sales in 1997. Engineering
fees are usually incurred in preparation for sales and development
and are usually treated as closing costs. The increase in
architect and engineering fees is not expected to continue.
The General Partner continues to monitor the impact of year 2000
issues on our computer systems and applications and has developed
a remediation plan. We expect the cost of upgrading computers and
software to be immaterial to the Registrant.
Financial Condition and Liquidity
As of July 31, 1998, the Registrant had $ 22,070 in cash
reserves. The General Partners believe that this amount is
sufficient to cover all development and operating needs of the
Registrant for the next year.
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Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) No 8-K's have been filed during this quarter.
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SIGNATURES
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, thereunto duly authorized.
RAINES ROAD, L.P.
By: 222 RAINES LTD.
General Partner
Date: August 14, 1998 By: /s/ Steven D. Ezell
General Partner
By: 222 PARTNERS, INC.
General Partners
Date: August 14, 1998 By: /s/ Michael A. Hartley
Secretary/Treasurer
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1998
<CASH> 26220
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0
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<NET-INCOME> (329580)
<EPS-PRIMARY> (173.64)
<EPS-DILUTED> (173.64)
</TABLE>
