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 September 30, 1995
{ } 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 September 30, 1995 Commission file number 000-20147
Realty Parking Properties II L.P.
(Exact Name of Registrant as Specified in its Charter)
Delaware 52-1710286
(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 II L.P.
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statement
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
Part II. Other Information
Item 1. through Item 6. 8
Signatures 9
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
Assets
<S> <C> <C>
Investment in real estate $31,581,511 $ 31,616,733
Cash and cash equivalents 344,878 367,930
Other assets
Accounts receivable 360,120 291,318
Financing costs, less accumulated amortization
of $10,500 and $9,000, respectively 19,503 21,003
Organization and start-up costs, less accumulated
amortization of $43,033 and $40,423, respectively 9,196 11,806
388,819 324,127
$32,315,208 $ 32,308,790
Liabilities and Partners' Capital
Accounts payable and accrued expenses $ 56,859 $ 39,541
Due to affiliates 199,140 197,594
Real estate taxes payable 282,500 282,500
Note payable 2,945,000 2,945,000
3,483,499 3,464,635
Partners' Capital
General Partner (21,118) (20,993)
Assignor Limited Partner
Assignment of limited partnership interests-
$25 stated value per unit, 1,392,760
units outstanding 28,851,809 28,864,130
Limited partnership interests-
$25 stated value per unit, 40 units outstanding 918 918
Subordinated Limited Partner 100 100
28,831,709 28,844,155
See accompanying notes to financial statements
1
</TABLE>
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
1996 1995
Revenues
<S> <C> <C>
Parking lot rental $ 586,835 $ 472,861
Interest income 2,812 4,063
589,647 476,924
Expenses
Administrative, due to affiliate 22,829 22,868
Professional fees 6,584 5,240
Management fees, due to affiliate 59,725 54,709
Interest expense 69,697 64,714
Depreciation of properties 43,472 43,805
Amortization of organization
and start-up costs and financing costs 4,110 4,110
206,417 195,446
Net earnings $ 383,230 $ 281,478
Net earnings per unit of assignee
limited partnership interest $ 0.27 $ 0.20
See accompanying notes to financial statements
2
</TABLE>
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Partners' Capital
For the Three Month's Ended March 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Assignor Limited Partner
Assignment
of Limited Limited Subordinated
Partnership Partnership Limited General
Interests Interests Partner Partner Total
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995$28,864,130 $ 918 $ 100 $ (20,993) $28,844,155
Net earnings 379,387 11 - 3,832 383,230
Distribution to partners (391,708) (11) - (3,957) (395,676)
Balance at March 31, 1996 $28,851,809 $ 918 $ 100 $ (21,118) $28,831,709
Balance at December 31, 1994$28,983,677 $ 921 $ 100 $ (19,784) $28,964,914
Net earnings 278,655 8 - 2,815 281,478
Distribution to partners (391,708) (11) - (3,957) (395,676)
Balance at March 31, 1995 $28,870,624 $ 918 $ 100 $ (20,926) $28,850,716
See accompanying notes to financial statements
3
</TABLE>
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1996 March 31, 1995
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 383,230 $ 281,478
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation 43,472 43,805
Amortization 4,110 4,110
Changes in assets and liabilities
Decrease (increase) in accounts receivable (68,802) 64,618
Increase (decrease) in accounts payable and accrued expenses 17,318 (42,856)
Increase in due to affiliates 1,546 7,886
Net cash provided by operating activities 380,874 359,041
Cash flows from investing activities -
additions to investment in real estate (8,250) (19,023)
Cash flows from financing activities
Proceeds from note borrowing - 252,000
Distribution to partners (395,676) (395,676)
Net cash used in financing activities (395,676) (143,676)
Net increase (decrease) in cash and cash equivalents (23,052) 196,342
Cash and cash equivalents
Beginning of period 367,930 249,548
End of period $ 344,878 $ 445,890
See accompanying notes to financial statements
4
</TABLE>
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
March 31, 1996
(Unaudited)
Note 1 - The Fund and Basis of Preparation
The accompanying financial statements of Realty Parking Properties II
L.P. (the "Fund") 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 1995 Annual Report.
Note 2 - New Accounting Pronouncement
In March 1995, The Financial Accounting Standards Boards (FASB) issued
Statement of Financial Accounting Standards No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
(Statement 121). Statement 121 provides guidance for recognition and measurement
of impairment of long-lived assets, certain identifiable intangibles and
goodwill related both to assets to be held and used and assets to be disposed
of. The Fund adopted Statement 121 during the first quarter of 1996 and the
adoption did not have any impact on its consolidated financial statements.
Note 3 - Cash and Cash Equivalents
The Fund considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. Cash and cash
equivalents consist of cash and a money market account and are stated at cost,
which approximates market value, at March 31, 1996 and December 31, 1995.
Note 4 - Investment in Real Estate
Investment in real estate is stated at the lower of net realizable
value or cost, net of accumulated depreciation, and includes the purchase price,
improvements and all costs of acquisition of parking sites acquired, and is
summarized as follows:
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
<S> <C> <C>
Land $26,356,120 $26,347,870
Building 5,579,443 5,579,443
31,935,563 31,927,313
Less: accumulated depreciation (354,052) (310,580)
Total $31,581,511 $31,616,733
</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.
-5-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
March 31, 1996
(Unaudited)
Note 5 - Related Party Transactions
The general partner earned an asset-based management fee of $59,725 and
$54,709 for advising the Fund and managing its investments during the three
months ended March 31, 1996 and 1995, respectively. This fee is equal to 0.75%
of the Fund's capital contributions invested in properties and 0.5% of capital
contributions temporarily held awaiting investment in properties. Additionally,
the general partner will be reimbursed for certain costs incurred relating to
administrative services and expenses of the Fund during the three months ended
March 31, 1996 and 1995, totaling $22,448 and $25,610, respectively.
The Fund accrued liabilities to Allright Corporation ("Allright")
totaling $116,967 at March 31, 1996 and December 31, 1995, for improvements made
to a certain property.
Note 6 - Note payable
On July 18, 1994 the Fund closed on its $5.6 million line of credit
agreement with a bank. Borrowings under the credit agreement bear interest on
the outstanding principal amount at the bank's prime rate (8.25% at March 31,
1996) plus 1% per annum. The principal balance at March 31, 1996 was $2,945,000
and is due and payable no later than July 17, 1997. Interest incurred on the
outstanding principal balance totaled $69,697 and $64,714, for the three months
ended March 31, 1996 and 1995, respectively.
Note 7 - Leases
The Fund generally leases the properties to Central and to Allright for
a period of ten years with an option to extend the leases for two additional
terms of five years. The minimum rents are 6.0% of certain acquisition costs in
the first year, 6.5% in the second year and 7.0% thereafter. The other terms of
the leases contain provisions with respect to Percentage Rents above minimum
returns and early termination of the leases in the event the properties are sold
by the Fund. Percentage rent is calculated and recorded at the end of each
property's lease year in accordance with lease terms and may not necessarily
reflect the period in which it is earned. Certain leases vary from the terms
outlined above in order to accommodate specific circumstances of an acquired
property. A more detailed discussion of the leases is contained in the 1995
Annual Report.
Note 8 - Net Earnings Per Unit of Assignee Limited Partnership Interest
Net earnings per unit of assignee limited partnership interest as
disclosed on the Statements of Operations is based upon 1,392,760 units
outstanding.
Note 9 - Subsequent Events
On May 14, the Fund made a cash distribution totaling $395,676 of which
99% is allocated to Unitholders. This distribution is derived from funds
provided by operations during the quarter ended March 31, 1996. Holders of Units
will receive a cash distribution of $.28 per $25 unit.
On April 29, 1996, the Fund borrowed $116,000 from its line of credit
in order to finance the cost of a certain property's improvements.
-6-
<PAGE>
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Liquidity and Capital Resources
Cash and cash equivalents decreased $23,052 during the first quarter of
1996. This decrease represents the net effect of $380,874 in cash provided by
operating activities, capital expenditures of $8,250, and distributions to
investors of $395,676.
On July 18, 1995 the Fund closed on a $5.6 million line of credit to be
used as necessary to complete the Fund's acquisition program, to supplement
working capital reserves, and to make distributions to partners. Borrowings
under the credit agreement bear interest at the bank's prime rate plus 1% per
annum and all borrowings are due and payable no later than July 17, 1997. The
Fund pays down the line of credit as operating cash becomes available, in order
to minimize interest expense, and draws against the line of credit as operating
cash needs arise. At March 31, 1996 the balance due on the note payable was
$2,945,000.
The Fund as substantially completed all major capital improvements
contemplated for its facilities. At March 31, 1996, the Fund had accrued
approximately $117,000 for capital improvements completed on behalf of the
Phoenix facility which were incurred prior to the end of the quarter. The cost
of these improvements will be funded from the Fund's line of credit. The Fund's
operations and its available line of credit provide sufficient capital to
satisfy the Fund's liquidity requirements.
On May 14, 1996, the Fund made a distribution to investors of $395,676.
This distribution was derived from cash provided by net earnings, before
depreciation and amortization, during the quarter ended March 31,1996.
Results of Operations
The Fund leases its facilities to parking operators under terms that
typically include a minimum rent calculated as a percentage of certain
acquisition costs. In addition, lessees are typically obligated to pay
percentage rent, calculated as a percentage of gross parking revenues.
During the first quarter of 1996, parking lot rental income increased
$113,974 as compared to the same period in 1995. This increase is primarily
attributable to percentage rents of $81,013 recognized at the Atlanta facility
during the quarter. Percentage rents of $54,862 were earned at the Atlanta
facility during 1995, but were not recognized until the second quarter of that
year due to the
<PAGE>
timing of their remittance to the Fund. Rental income also increased due to the
scheduled increases in minimum rents for several facilities.
Interest income was little changed from the prior year and Fund
expenses for the quarter were also consistent with 1995.
The Fund continues to examine opportunities for disposition of its
facilities. In accordance with the Fund's original investment strategy, it is
anticipated that the highest level returns will be obtained from property sales
to buyers who desire the site for a near term development project. The Fund is
particularly alert for such opportunities and is currently negotiating with
several parties who desire to purchase the Seattle property for the development
of a mid rise office building.
<PAGE>
REALTY PARKING PROPERTIES II L.P.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Inapplicable
Item 2. Changes in Securities
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: None
b) Reports on Form 8-K: None
-8-
<PAGE>
REALTY PARKING PROPERTIES II 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 II L.P.
DATE: 5/9/96 By: /s/ John M. Prugh
John M. Prugh
President and Director
Realty Parking Company II, Inc.
General Partner
DATE: 5/9/96 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Realty Parking Company II, Inc.
General Partner
-9-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with legend, if applicable)
</LEGEND>
<CIK> 871014
<NAME> Realty Parking Properties II L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 344,878
<SECURITIES> 0
<RECEIVABLES> 360,120
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 704,998
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 32,315,208
<CURRENT-LIABILITIES> 538,499
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 32,315,208
<SALES> 0
<TOTAL-REVENUES> 589,647
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 136,720
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 69,697
<INCOME-PRETAX> 383,230
<INCOME-TAX> 0
<INCOME-CONTINUING> 383,230
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 383,230
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
