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FORM 10-Q.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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 September 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 NINE MONTHS ENDED SEPTEMBER 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
September 30, December 31,
1998 1997
<S> <C> <C>
CASH $ 22,333 $ 98,678
RESTRICTED CASH 380,198 380,198
LAND AND LAND IMPROVEMENTS
HELD FOR INVESTMENT 5,632,923 5,632,923
Total Assets $6,035,454 $6,111,799
=========== ==========
LIABILITIES AND PARTNERS' DEFICIT
NOTE PAYABLE TO AFFILIATE $4,700,000 $4,700,000
ACCRUED INTEREST PAYABLE TO
AFFILIATE 2,939,134 2,524,934
ACCOUNTS PAYABLE 318,507 282,942
Total Liabilities 7,957,641 7,507,876
PARTNERS' DEFICIT:
Limited Partners ( 1,875 units
outstanding) (1,922,187) (1,396,077)
General Partner - -
Total Partners' deficit (1,922,187) (1,396,077)
Total Liabilities &
Partners' Deficit $6,035,454 $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 September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
REVENUES:
LAND SALES:
Gross Proceeds $ - $ - $ - $2,220,000
Cost of Land
and Improvements Sold - - - (1,434,339)
Closing Costs - - - (144,711)
Gain on Land Sales - - - 640,950
Interest - - 3,331 6,335
------ ------ ------ --------
Total Revenues - - 3,331 647,285
EXPENSES:
Property Tax & Penalties 57,943 60,960 80,323 66,478
Interest 141,000 141,000 423,000 423,000
Program Management Fees 750 750 2,250 2,250
Professional Services 400 7,875 11,784 20,783
Architect & Engineering
Fees 437 850 10,344 850
Administrative Expenses - - 1,740 10,975
Total Expenses 200,530 211,435 529,441 524,336
Net (Loss) Income $(200,530)(211,435) $(526,110) $122,949
======= ======== ========= ========
<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>
Nine Months Ended
September 30,
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net (Loss) Income $(526,110) $ 122,949
Adjustments to reconcile net
(loss) income to net cash
(used) provided by operating
activities:
Cost of Land & Improv. Sold - 1,434,339
Cost of Land & Improvements - (1,200,628)
Increase (decrease) in
Accrued Interest Payable 414,200 (311,500)
Increase in Construction Pay. - 1,109,141
Increase in Accts. Payable 35,565 19,131
Increase in Restricted Cash (1,098,851)
------- --------
Net Cash (Used) provided
in Operating Activities: (76,345) 74,581
NET (DECREASE) INCREASE IN CASH (76,345) 74,581
CASH AT JANUARY 1, 98,678 41,633
CASH AT SEPTEMBER 30, $ 22,333 $116,214
======= =======
Supplemental Disclosures of
Cash Flow Information:
Cash Paid During the Year
For Interest $ 8,800 $734,500
====== =======
<FN>
See notes to financial statements.
</TABLE>
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RAINES ROAD, L.P.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three and Nine Months Ended September 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 nine month period ended September 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
were as follows:
1998 1997
Program Management Fee $ 2,250 $ 2,250
Development Fee $ - $ 50,456
Accounting Fees $ 1,700 $ 1,600
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 three and nine month periods
ended September 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>
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
There have been no sales during the first nine months of 1998.
Overall operations of the Registrant are comparable to prior
quarters with the following exception. Interest income has
decreased from 1997 to 1998 due to lower cash balances. Property
tax expense increased due to a new assessed value of the property
in 1998. The General Partner believes the assessment is overstated
and is contesting the increase. The decrease in office
administration expenses is due to an exceptional item in 1997.
Property tax services of $7,500 were recorded in 1997. The
increase in architect and engineering fees in 1998 is due to
delayed development work related to the 1997 sales.
The General Partner has evaluated the impact of year 2000 issues on
our computer systems and applications. The Registrant is affected
by a single personal computer and a commercial software package.
Both are Y2K compliant.
Financial Condition and Liquidity
As of October 30, 1998, the Registrant had $ 21,583 in cash
reserves. Operating expenses are primarily accounting fees which
include audit and tax, and program management service fees. The
cash reserves are not expected to sufficiently meet the operating
needs of the Registrant for the next year. If a sale of property
occurs, then funds may be available from sale proceeds. Otherwise,
the General Partner expects the Registrant to meet operational
needs through affiliated loans if necessary.
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: November 21, 1998 By: /s/ Steven D. Ezell
General Partner
By: 222 PARTNERS, INC.
General Partners
Date: November 21, 1998 By: /s/ Michael A. Hartley
Secretary/Treasurer
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<CASH> 22,333
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5,632,923
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,035,454
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (1,922,187)
<TOTAL-LIABILITY-AND-EQUITY> 6,035,454
<SALES> 0
<TOTAL-REVENUES> 3,331
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 106,441
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 423,000
<INCOME-PRETAX> (526,110)
<INCOME-TAX> 0
<INCOME-CONTINUING> (526,110)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (526,110)
<EPS-PRIMARY> (280.59)
<EPS-DILUTED> (280.59)
</TABLE>
