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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 March 31, 1999
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)
One Belle Meade Place, 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 Statements
RAINES ROAD, L.P.
(A Delaware Limited Partnership)
FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
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
March 31, December 31,
1999 1998
<S> <C> <C>
CASH $ 3,933 114,342
RESTRICTED CASH 140,769 140,769
HELD FOR INVESTMENT 5,599,928 5,599,928
Total Assets $ 5,744,630 $ 5,855,039
=========== ==========
LIABILITIES AND PARTNERS' DEFICIT
NOTE PAYABLE TO AFFILIATE $ 4,700,000 $ 4,700,000
ACCRUED INTEREST PAYABLE TO
AFFILIATE 3,210,334 3,072,634
ACCOUNTS PAYABLE & ACCRUED
EXPENSES 58,322 133,500
Total Liabilities 7,968,656 7,906,134
PARTNERS' DEFICIT:
Limited Partners ( 1,875 units
outstanding) (2,224,026) (2,051,095)
General Partner - -
Total Partners' deficit (2,224,026) (2,051,095)
Total Liabilities &
Partners' Deficit $ 5,744,630 $ 5,855,039
========== ==========
<FN>
See accompanying notes to financial statements.
/TABLE
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<TABLE>
RAINES ROAD, L.P.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three months ended
March 31,
1999 1998
<S> <C> <C>
REVENUES:
Interest $ - $ 3,331
Total Revenues - 3,331
EXPENSES:
Interest 141,000 141,000
Property Management Fees 750 750
Legal & Accounting 2,400 7,650
Architect & Engineering Fees - 7,926
Property Taxes 28,681 11,190
Other Administrative
Expenses 100 272
Total Expenses 172,931 168,788
Net Loss $ (172,931) $(165,457)
======== ========
<FN>
See accompanying notes to financial statements.
/TABLE
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<TABLE>
RAINES ROAD, L.P.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
1999 1998
<S> <C> <C>
Cash flows from operating activities:
Net Loss $(172,931) $ (165,457)
Adjustments to reconcile net
loss to net cash used
in operating activities:
Increase in accrued
interest payable 137,700 141,000
Decrease in accounts payable
and accrued expenses (75,178) (30,763)
Net cash used in operating
activities (110,409) (55,220)
NET DECREASE IN CASH (110,409) (55,220)
CASH AT JANUARY 1, 114,342 98,678
CASH AT MARCH 31, $ 3,933 $ 43,458
<FN>
See accompanying notes to financial statements.
/TABLE
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RAINES ROAD, L.P.
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS
For the Three Months Ended March 31, 1999 and 1998
(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, 1998. 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 esults of operations
for the three month period ended March 31, 1999 may not be
indicative of the results that may be expected for the year
ending December 31, 1999.
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 three months were as follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Property Management Fee $ 750 $ 750
Accounting Fees 400 -
C. COMPREHENSIVE INCOME
During the first three month periods ended March 31, 1999 and
1998, the Partnership had no components of other comprehensive
income. Accordingly, comprehensive income for each of the
periods was the same as net loss.<PAGE>
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Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations for the Quarter Ended March 31,
1999.
There have been no land sales during the first quarter of
1999.
Overall operations of the Registrant are comparable to
prior quarters with the following exception. The increase in
property tax expense is due to an increase in the assessed property
value and a change in the rate classification.
Financial Condition and Liquidity
As of April 30, 1999, the Registrant had $2,555 in cash reserves.
Operating expenses are primarily accounting fees which includes audit
and tax, and program management service fees. The cash reserves are
not sufficient to meet these expenses. If a sale of property occurs,
then funds will be available from sale proceeds. The General Partner
will assist the Registant in meeting operational needs through
affiliated loans as necessary.
Year 2000
In 1998, the Partnership initiated a plan ("Plan") to identify, and
remediate "Year 2000" issues within each of its significant
computer programs and certain equipment which contain
microprocessors. The Plan is addressing the issue of computer
programs and embedded computer chips being unable to distinguish
between the year 1900 and the year 2000, if a program or chip uses
only two digits rather than four to define the applicable year.
The Partnership has divided the Plan into five major phases-
assessment, planning, conversion, implementation and testing.
After completing the assessment and planning phases earlier year,
the Partnership is currently in the conversion, implementation, and
testing phases. Systems which have been determined not to be Year
2000 compliant are being either replaced or reprogrammed, and
thereafter tested for Year 2000 compliance. The Plan anticipates
that by mid-1999 the conversion, implementation and testing phases
will be completed. Management believes that the total remediation
costs for the Plan will not be material to the operations or
liquidity of the Partnership.
The Partnership is in the process of identifying and contacting
critical suppliers and other vendors whose computerized systems
interface with the Partnership's systems, regarding their plans and
progress in addressing their Year 2000 issues. The Partnership has
received varying information from such third parties on the state
of compliance or expected compliance. Contingency plans are being
developed in the event that any critical supplier or customer is
not compliant.
The failure to correct a material Year 2000 problem could result in
an interruption in, or failure of, certain normal business
activities or operations. Such failures could materially and
adversely affect the Partnership's operations, liquidity and
financial condition. Due to the general uncertainty inherent in
the Year 2000 problem, resulting in part from the uncertainty of
the Year 2000 readiness of third-party suppliers and customers, the
Partnership is unable to determine at this time whether the
consequences of Year 2000 failures will have a material impact on
the Partnership's operations, liquidity or financial condition.
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Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule for the First
Quarter of 1999.
(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: May 15, 1999 By: /s/ Steven D. Ezell
General Partner
By: 222 PARTNERS, INC.
General Partners
Date: May 15, 1999 By: /s/ Michael A. Hartley
Secretary/Treasurer
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 3,933
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5,599,928
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,744,630
<CURRENT-LIABILITIES> 58,322
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (2,224,026)
<TOTAL-LIABILITY-AND-EQUITY> 5,744,630
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 31,931
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 141,000
<INCOME-PRETAX> (172,931)
<INCOME-TAX> 0
<INCOME-CONTINUING> (172,931)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (172,931)
<EPS-PRIMARY> (92.23)
<EPS-DILUTED> (92.23)
</TABLE>
