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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
[ ] 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 LENDERS, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 62-1375240
(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 LENDERS, 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 LENDERS, L.P.
(A Limited Partnership)
BALANCE SHEETS
(Unaudited)
<CAPTION>
ASSETS
March 31, December 31,
1999 1998
<S> <C> <C>
CASH $ 37 362
NOTE RECEIVABLE FROM AFFILIATE 4,700,000 4,700,000
INTEREST RECEIVABLE FROM AFFILIATE,
net of allowance for impairmant of
$1,580,711 924,623 927,923
LOAN COSTS, less accumulated
amortization of $175,261
in 1999 and $170,814 in 1998 55,989 60,436
Total Asssets $ 5,680,649 5,688,721
========= =========
LIABILITIES AND PARTNERS' EQUITY
PARTNERS' EQUITY:
Limited Partners (5,625 units
outstanding) $ 5,680,649 $ 5,688,721
General Partner - -
Total Partners'equity 5,680,649 5,688,721
Total Liabilities &
Partners' Equity $ 5,680,649 5,688,721
========= =========
<FN> See accompanying notes to financial statements.
/TABLE
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<TABLE>
RAINES LENDERS, L.P.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three months ended
March 31,
1999 1998
<S>
<C> <C>
REVENUES:
Interest Income $ - $ 141,340
EXPENSES:
Legal & Accounting 1,275 6,300
Mortgage Servicing Fee 2,250 2,250
General & Administration 100 272
Amortization 4,447 4,447
Total Expenses 8,072 13,269
NET INCOME (LOSS) $ (8,072) $128,071
======== ========
<FN>
See accompanying notes to financial statements
/TABLE
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<TABLE>
RAINES LENDERS, 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 Income (Loss) $ (8,072) $128,071
Adjustments to reconcile Net Income
(Loss) to Net Cash used in Operating
Activities:
Amortization 4,447 4,447
Decrease (Increase) in Interest
Receivable from Affiliate 3,300 (141,000)
Increase in Accounts Payable - 1,472
Net cash used in Operating Activities (325) (7,010)
NET DECREASE IN CASH (325) (7,010)
CASH AT JANUARY 1, 362 9,092
CASH AT MARCH 31, $ 37 $ 2,082
======= =======
<FN>
See accompanying notes to financial statements.
/TABLE
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RAINES LENDERS, 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 results 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 Partnership, and
complying with the terms of the Lender Financing.
Compensation earned for these services were as follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Mortgage Servicing Fee $2,250 $2,250
Accounting Fees 400 -
</TABLE>
<PAGE>
RAINES LENDERS, L.P.
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS
For the Three Months Ended March 31, 1999
(continued) (Unaudited)
C. COMPREHENSIVE INCOME
During the 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 income (loss).
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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.
The Partnership's primary business is to lend monies to Raines
Road, L.P. ("the Borrower"). The Registrant continues its policy
begun in 1998 of not recognizing interest income for financial
reporting purposes on the Lender Financing. The Lender financing
has been placed on non-accrual status in accordance with the
Registrant's policy for impaired notes. These adjustments to
interest income and the receivable balance are for financial
reporting purposes only. Interest income continues to recognized
for tax and loan payment purposes. There are no interest or
principal payments due to the Partnership until the Property
securing the Partnership's loan or portions thereof are sold, or
December 31, 2001, whichever is earlier.
Due to the nature of the Registrant, all activity is a result of
transactions in Raines Road, L.P., the loan holder. The Borrower
had no property sales during the first quarter of 1999. The
cumulative applicable principal balance unpaid as of March 31, 1999
is $1,677,707 and is payable from future sales proceeds after all
accrued interest is paid.
Except for the decrease in interest, operations of the Registrant
are minimal and have remained comparable to prior quarters.
Financial Condition and Liquidity
As of March 31, 1999,the Registrant had $37 in cash reserves.
This balance is not sufficient to meet the operating needs of the
Registrant. Unless the Borrower makes a payment from sale proceeds
or released cash reserves on the Lender Financing to provide the
Registrant with sufficient operating funds, the General Partner
will assist the Registrant in meeting operational needs through
affiliated loans.
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.<PAGE>
<PAGE> 9
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 LENDERS, 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> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 37
<SECURITIES> 0
<RECEIVABLES> 5,624,623
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,680,649
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,680,649
<TOTAL-LIABILITY-AND-EQUITY> 5,680,649
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,072
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (8,072)
<INCOME-TAX> 0
<INCOME-CONTINUING> (8,072)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,072)
<EPS-PRIMARY> (1.44)
<EPS-DILUTED> (1.44)
</TABLE>
