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 June 30, 1997
{ } 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 June 30, 1997 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 7-8
Part II. Other Information
Item 1. through Item 6. 9
Signatures 10
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
Assets
<S> <C> <C>
Investment in real estate $26,875,970 $ 31,457,822
Cash and cash equivalents 8,122,247 694,405
Other assets
Accounts receivable 395,429 307,582
Financing costs, less accumulated amortization
of $18,000 and $15,000, respectively 12,003 15,003
Organization and start-up costs, less accumulated
amortization of $52,229 and $50,863, respectively - 1,366
407,432 323,951
$35,405,649 $ 32,476,178
Liabilities and Partners' Capital
Accounts payable and prepaid rent $ 43,470 $ 123,891
Due to affiliates 203,386 121,206
Real estate taxes payable 304,754 304,754
Note payable 3,061,000 3,061,000
3,612,610 3,610,851
Partners' Capital
General Partner 8,496 (20,782)
Assignee and Limited Partnership
Interests - $25 state value per
unit, 1,392,800 units outstanding 31,784,443 28,886,009
Subordinated Limited Partner 100 100
31,793,039 28,865,327
$35,405,649 $ 32,476,178
</TABLE>
See accompanying notes to financial statements
1
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
Revenues
<S> <C> <C> <C> <C>
Gain from sale of property $2,708,848 $ - $2,708,848 $ -
Parking lot rental 685,559 630,023 1,493,752 1,216,858
Interest income 9,313 3,195 13,425 6,007
3,403,720 633,218 4,216,025 1,222,865
Expenses
Administrative, due to affiliate 20,083 19,435 44,054 42,264
Professional fees 7,166 13,302 11,500 19,886
Management fees, due to affiliate 59,065 61,920 117,325 121,645
Interest expense 73,634 70,738 145,206 140,435
Depreciation of properties 43,083 43,472 86,583 86,944
Amortization of organization
and start-up costs and financing costs 1,500 4,110 4,365 8,220
204,531 212,977 409,033 419,394
Net earnings $3,199,189 $420,241 $3,806,992 $ 803,471
Net earnings per unit of assignee
and limited partnership interest $ 2.27 $ 0.30 $ 2.71 $ 0.57
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
Statements of Partners' Capital
For the Six Months Ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Assignee
and Limited Subordinated
Partnership Limited General
Interests Partner Partner Total
<S> <C> <C> <C> <C>
Balance at December 31, 1996 $28,886,009 $ 100 $ (20,782) $28,865,327
Net earnings 3,768,922 - 38,070 3,806,992
Distributions to partners (870,488) - (8,792) (879,280)
Balance at June 30, 1997 $31,784,443 $ 100 $ 8,496 $31,793,039
Balance at December 31, 1995 $28,865,048 $ 100 $ (20,993) $28,844,155
Net earnings 795,436 - 8,035 803,471
Distributions to partners (783,438) - (7,914) (791,352)
Balance at June 30, 1996 $28,877,046 $ 100 $ (20,872) $28,856,274
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997 June 30, 1996
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 3,806,992 $ 803,471
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation 86,583 86,944
Amortization 4,365 8,220
Gain from sale of property (2,708,848)
Changes in assets and liabilities
(Increase) decrease in accounts receivable (87,847) 3,659
Increase (decrease) in accounts payable and prepa (80,421) 66,922
Decrease in due to affiliates (37,820) (673)
Net cash provided by operating activities 983,004 968,543
Cash flows from investing activities
Sale of property, net 7,324,118 -
Additions to investment in real estate - (127,410)
Net cash provided by (used in) operating activities 7,324,118 (127,410)
Cash flows from financing activities
Proceeds from note borrowing - 116,000
Distributions to partners (879,280) (791,352)
Net cash used in financing activities (879,280) (675,352)
Net increase in cash and cash equivalents 7,427,842 165,781
Cash and cash equivalents
Beginning of period 694,405 367,930
End of period $ 8,122,247 $ 533,711
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
June 30, 1997
(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 1996 Annual Report.
Note 2 - 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 June 30, 1997 and December 31, 1996.
Note 3 - Investment in Real Estate
Investment in real estate is stated at the lower of fair value or cost,
net of accumulated depreciation, and includes all related acquisition costs of
the properties, and is summarized as follows:
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
<S> <C> <C>
Land $21,857,657 $26,356,118
Building 5,583,532 5,583,532
27,441,189 31,939,650
Less: accumulated depreciation (565,219) (481,828)
Total $26,875,970 $31,457,822
</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.
Note 4 - Related Party Transactions
The general partner earned an asset-based management fee of $59,065 and
$61,920 for advising the Fund and managing its investments during the three
months ended June 30, 1997 and 1996, respectively, and $117,325 and $121,645 for
the six months ended June 30, 1997 and 1996, 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.
Pursuant to the terms of the Lease Agreement, Central Parking System,
Inc., the Advisor, was paid a termination fee of $283,949 and is due an advisory
fee of $120,000 in connection with the sale of the Seattle property.
-5-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
June 30, 1997
(Unaudited)
Note 5 - 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 (8.5% at March 31,
1997) plus 1% per annum. The principal balance at June 30, 1997 and December 31,
1996 was $3,061,000 and is due and payable no later than July 17, 1997 under the
original terms of the note. Interest incurred on the outstanding principal
balance totaled $73,634 and $70,738 for the three months ended June 30, 1997 and
1996, respectively, and $145,206 and $140,435 for the six months ended June 30,
1997 and 1996, respectively.
Effective July 17, 1997, the line of credit agreement was amended to a
maximum $3.5 million capacity, the interest rate on outstanding borrowings was
reduced to the bank's prime rate and the commitment was extended for an
additional three years, until July 17, 2000. All other terms and the outstanding
balance remain the same.
Note 6 - Net Earnings Per Unit of Assignee and Limited Partnership Interest
Net earnings per unit of assignee and limited partnership interest as
disclosed on the Statements of Operations is based upon 1,392,800 units
outstanding.
Note 7 - Distribution of Sale Proceeds
On July 11, 1997 the Fund made a cash distribution totaling $7,204,116
of which 99% was allocated to assignee and limited partners. This distribution
was derived from funds provided by the sale of the Seattle property on June 26,
1997. Holders of Units received a cash distribution of $5.12 per $25 unit.
Note 8 - Subsequent Event
On August 13, 1997 the Fund will make a cash distribution totaling
$439,640 of which 99% will be allocated to assignee and limited partners. This
distribution is derived from funds provided by operations during the quarter
ended June 30, 1997. Holders of Units will receive a cash distribution of $.31
per $25 unit.
-6-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
Cash and cash equivalents increased $7,545,047 during the second
quarter of 1997. This increase represents the net effect of $660,569 in cash
provided by operating activities, a distribution to investors of $439,640 and
cash proceeds from the sale of the Seattle property of $7,324,118.
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 (8.5% at March 31,
1997) plus 1% per annum. The principal balance at June 30, 1997 and December 31,
1996 was $3,061,000 and is due and payable no later than July 17, 1997 under the
original terms of the note. Interest incurred on the outstanding principal
balance totaled $73,634 and $70,738 for the three months ended June 30, 1997 and
1996, respectively, and $145,206 and $140,435 for the six months ended June 30,
1997 and 1996, respectively.
Effective July 17, 1997, the line of credit agreement was amended to a
maximum $3.5 million capacity, the interest rate on outstanding borrowings was
reduced to the bank's prime rate and the commitment was extended for an
additional three years, until July 17, 2000. All other terms and the outstanding
balance remain the same.
The Fund has substantially completed all major capital improvements
contemplated for its facilities. The Fund's operations and its available line of
credit provide sufficient capital to satisfy the Fund's liquidity requirements.
On July 11, 1997, the Fund made a distribution to investors of
$7,204,116 of which 99% was allocated to holders of assignee and limited
partnership units in accordance with the Partnership Agreement. This
distribution was derived from funds provided by the sale of the Seattle property
on June 26, 1997.
On August 13, 1997, the Fund will make a distribution to investors of
$439,640 of which 99% will be allocated to holders of assignee and limited
partnership units in accordance with the Partnership Agreement. This
distribution is derived from cash provided by operating activities during the
quarter ended June 30, 1997.
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.
On June 26, 1997, the Fund sold its 66,179 square foot parcel of land
in Seattle, Washington for $8,000,000. The Fund's investment in the property was
$4,495,268, net of accumulated depreciation of $3,195. The capital gain from the
sale totaled $2,708,848, net of expenses of $795,884.
The sale of Seattle facility will reduce the Fund's annual rental
revenues by $313,656, a 15% decline on 1997 base rentals (excluding the effect
of any percentage rents). Additionally, the Fund's annual management fee expense
will be reduced by approximately $33,700.
During the three and six months ended June 30, 1997, parking lot rental
income totaled $685,559 and $1,493,752 representing increases over the same
periods in 1996 of 9% and 23%, respectively. The increases are primarily
attributable to percentage rents earned at the Atlanta, Dallas Metro, San
Francisco and Phoenix facilities which totaled $454,671 and $201,736 during the
six months ended June 30, 1997 and 1996, respectively. It should be noted, while
the amount of percentage rent earned at the Atlanta facility for 1997 ($283,908)
and 1996 ($81,013) is impressive, it is unlikely that this facility will realize
percentage rent in the foreseeable future. The facility's close proximity to the
Olympic Games' Centennial Park permitted it to earn substantial revenues during
the Olympic events. In addition, approximately 150 parking spaces had been
leased for two years to the Atlanta Committee for the Olympic Games (ACOG).
-7-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations (continued)
Interest income increased during the three and six months ended June
30, 1997, when compared to 1996, due to higher average cash balances. Expenses
decreased during the three and six months ended June 30, 1997, when compared to
1996, primarily due to lower professional fees incurred.
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 returns will be obtained from property sales to
buyers who desire the site for a near term development project.
-8-
<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:
Form 8-K dated June 26, 1997 described the Fund's sale
of a 66,179 square foot parcel of land in Seattle,
Washington.
-9-
<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: 8/8/97 By: /s/ John M. Prugh
John M. Prugh
President and Director
Realty Parking Company II, Inc.
General Partner
DATE: 8/8/97 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Realty Parking Company II, Inc.
General Partner
-10-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with legend, if applicable)
</LEGEND>
<CIK> 871014
<NAME> Realty Parking Properties II
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 8,122,247
<SECURITIES> 0
<RECEIVABLES> 3,995,429
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,117,676
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 35,405,649
<CURRENT-LIABILITIES> 551,610
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 35,405,649
<SALES> 0
<TOTAL-REVENUES> 4,216,025
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 263,827
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 145,206
<INCOME-PRETAX> 3,806,992
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,806,992
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,806,992
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
