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 March 31, 2000
{ } 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 March 31, 2000 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 Statements
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
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 9
Part II. Other Information
Item 1. through Item 6. 9
Signatures 10
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Balance Sheets
<TABLE>
<CAPTION>
March 31,
2000 December 31,
(Unaudited) 1999
------------------ -----------------
Assets
<S> <C> <C>
Investment in real estate $ 15,995,275 $ 19,684,020
Cash and cash equivalents 683,673 649,014
Accounts receivable 184,390 287,440
Note receivable 550,000 -
------------------ -----------------
$ 17,413,338 $ 20,620,474
================== =================
Liabilities and Partners' Capital
Accounts payable $ 65,012 $ 104,024
Due to affiliates 72,649 63,070
Real estate taxes payable 147,220 250,300
Note payable 2,086,000 2,086,000
------------------ -----------------
2,370,881 2,503,394
------------------ -----------------
Partners' Capital
General Partner - -
Assignee and Limited Partnership
Interests - $25 stated value per
unit, 1,392,800 units outstanding 15,042,357 18,116,980
Subordinated Limited Partner 100 100
------------------ -----------------
15,042,457 18,117,080
------------------ -----------------
$ 17,413,338 $ 20,620,474
================== =================
</TABLE>
See accompanying notes to financial statements
1
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
2000 1999
-------------------------------------
Revenues
<S> <C> <C>
Parking lot rental $ 342,877 $ 476,872
Interest income 44,899 4,691
------------------ -----------------
387,776 481,563
------------------ -----------------
Expenses
Administrative, including amounts to affiliate 28,273 24,327
Professional fees 5,000 6,000
Management fees to affiliate 31,868 52,008
Interest expense 45,457 50,576
Depreciation 15,535 43,083
Amortization - 1,500
---------------- -----------------
126,133 177,494
------------------ -----------------
Earnings from operations 261,643 304,069
Gain on sale of property, net 3,013,752 -
------------------ -----------------
Net earnings $ 3,275,395 $ 304,069
================== =================
Net earnings per unit of assignee and
limited partnership interest-basic $ 2.31 $ 0.22
================== =================
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
Realty Parking Properties II L.P.
Statements of Partners' Capital
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Assignee
and Limited Subordinated
Partnership Limited General
Interests Partner Partner Total
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1999 $ 18,116,980 $ 100 $ - $ 18,117,080
Net earnings 3,211,895 - 63,500 3,275,395
Distributions to partners -
Operations (220,053) - (2,223) (222,276)
Sales proceeds (6,066,465) - (61,277) (6,127,742)
----------------- ------------------ ------------------ -----------------
Balance at March 31, 2000 $ 15,042,357 $ 100 $ - $ 15,042,457
================= ================== ================== =================
Balance at December 31, 1998 $ 24,696,690 $ 100 $ (63,097) $ 24,633,693
Net earnings 301,028 - 3,041 304,069
Distribution to partners (363,416) - (3,671) (367,087)
----------------- ------------------ ------------------ -----------------
Balance at March 31, 1999 $ 24,634,302 $ 100 $ (63,727) $ 24,570,675
================= ================== ================== =================
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
2000 1999
-------------------------------------
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 3,275,395 $ 304,069
Adjustments to reconcile net earnings to net cash
provided by operating activities
Gain on sale of property, net (3,013,752) -
Depreciation 15,535 43,083
Amortization - 1,500
Changes in assets and liabilities
Increase in accounts receivable and
real estate taxes payable, net (30) (4,964)
Increase (decrease) in accounts payable (39,012) 6,648
Increase in due to affiliates 9,579 20,113
------------------ -----------------
Net cash provided by operating activities 247,715 370,449
------------------ -----------------
Cash flows from investing activities -
proceeds from sale of property, net 6,136,962 -
------------------ -----------------
Cash flows from financing activities -
distributions to partners (6,350,018) (367,087)
------------------ ----------------
Net increase in cash and cash equivalents 34,659 3,362
Cash and cash equivalents
Beginning of period 649,014 645,327
------------------ -----------------
End of period $ 683,673 $ 648,689
================== =================
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
March 31, 2000
(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 financial position, operating results and cash flows 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 1999 Annual Report.
Note 2 - Cash and Cash Equivalents
The Fund considers all short-term investments with maturities of three months or
less at dates of purchase as 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, 2000 and December 31, 1999.
Note 3 - Investment in Real Estate
Investment in real estate is summarized as follows:
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
<S> <C> <C>
Land $ 14,938,208 $ 15,716,812
Building 1,432,654 4,839,732
16,370,862 20,556,544
Less: accumulated depreciation (375,587) (872,524)
Total $ 15,995,275 $ 19,684,020
</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 - Sale of Property
On January 31, 2000, the Fund sold its Dallas-Metro, Texas property for
$7,000,000, including cash of $6,450,000 and a second lien promissory note of
$550,000. The Fund's investment in the property was $3,673,210, net of
accumulated depreciation of $512,472. The capital gain from the sale totaled
$3,013,752, net of expenses of $313,038. The second lien promissory note of
$550,000 is secured by a Second Deed of Trust and is due on October 31, 2000.
Interest on the unpaid principal balance accrues at the rate of 15% per annum.
-5-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
March 31, 2000
(Unaudited)
Note 5 - Related Party Transactions
The General Partner earned an asset-based management fee of $31,868 and $52,008
for advising the Fund and managing its investments during the three months ended
March 31, 2000 and 1999, respectively. This fee is equal to 0.75% of the Fund's
capital contributions invested in certain properties or fair values based on
updated appraisals for certain other properties. Additionally, the General
Partner was reimbursed for certain costs incurred relating to administrative
services for the Fund totaling $40,781 and $22,488 during the three months ended
March 31, 2000 and 1999, respectively.
Note 6 - Note payable
The Fund has a $3.5 million line of credit agreement with a bank. The interest
rate on outstanding borrowings is the bank's prime rate, 9% at March 31, 2000.
The line of credit expires in July 2000. The line of credit is expected to be
repaid from sales proceeds throughout 2000 and will be extended beyond its
maturity, if necessary. The collateral security provision of the loan agreement
provides for the assignment of the Fund's rights as a lessor to its interest in
the parking lot leases, contracts and income. The principal balance outstanding
at March 31, 2000 and December 31, 1999 was $2,086,000. Interest paid on the
outstanding principal balance totaled $45,457 and $50,576 for the three months
ended March 31, 2000 and 1999, respectively.
Note 7 - 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 8 - Subsequent Events
On April 5, 2000, the Fund received a $350,000 payment from the issuer of the
promissory note. The Fund used the cash to reduce the principal balance on the
note payable.
-6-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
The Fund does not contemplate making any major improvements to it properties
during 2000.
At March 31, 2000, the Fund had a working capital position that includes
cash and cash equivalents of $683,673, accounts receivable (net of real estate
taxes payable) of $37,170, and accounts payable and accrued expenses of
$137,661. Cash and cash equivalents increased $34,659 during the quarter ended
March 31, 2000. This increase represents the net effect of $247,715 in cash
provided by operating activities, $6,136,962 from the sale of a property, a
quarterly cash distribution to investors of $222,276 and a sale proceeds
distribution to investors of $6,127,742. It is anticipated that remaining cash
and cash equivalents, current operations and the available line of credit will
provide sufficient capital to satisfy the Fund's liquidity requirements.
On May 12, 2000, the Fund plans to make a cash distribution totaling
$232,279, of which 99% will be allocated to Assignee and Limited Partners.
Assignee and Limited Partners will receive a cash distribution of approximately
$.17 per unit.
The Fund has a $3.5 million line of credit agreement with a bank. The
interest rate on outstanding borrowings is the bank's prime rate, 9% at March
31, 2000. The line of credit expires in July 2000. The line of credit is
expected to be repaid from sales proceeds throughout 2000 and will be extended
beyond its maturity, if necessary. The collateral security provision of the loan
agreement provides for the assignment of the Fund's rights as a lessor to its
interest in the parking lot leases, contracts and income. The principal balance
outstanding at March 31, 2000 and December 31, 1999 was $2,086,000.
Results of Operations
Sale
On January 31, 2000, the Fund sold its Dallas-Metro, Texas property for
$7,000,000, including cash of $6,450,000 and a second lien promissory note of
$550,000. The Fund's investment in the property was $3,673,210, net of
accumulated depreciation of $512,472. The capital gain from the sale totaled
$3,013,752, net of expenses of $313,038. The second lien promissory note of
$550,000 is secured by a Second Deed of Trust and is due on or Before October
31, 2000. Interest on the unpaid principal balance accrues at the rate of 15%
per annum.
On April 5, 2000, the Fund received a $350,000 payment from the issuer of
the promissory note. The Fund used the cash to reduce the principal balance on
the note payable.
Operations
Parking lot rental income includes base rents and percentage rents earned
pursuant to lease agreements in effect during each period. The Fund leases its
facilities to the Advisor under terms that typically include a minimum rent
calculated as a percentage of certain acquisition costs. In addition, the
Advisor is typically obligated to pay percentage rent, calculated as a
percentage of gross parking revenues.
Total parking lots rents of $342,877 were earned during the first quarter of
2000, reflecting a $133,995 decrease from 1999. The decrease is primarily the
result of the sale of three properties during 1999 and the sale of the
Dallas-Metro garage in January 2000.
Interest income totaling $44,899 was earned during the first quarter of
2000, reflecting a $40,208 increase over 1999. The increased is primarily a
result of higher cash balances during the first quarter of 2000 (from property
sales) and the interest earned on the note receivable.
-7-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations (continued)
Expenses in 2000, net of depreciation and amortization, totaled $110,598,
reflecting a $22,313 decrease from 1999. The decrease is primarily due to lower
management fees as a result of the three properties that were sold during 1999
and the property that was sold in January 2000. In addition, interest expense
decreased due to the lower balance on the note payable.
Outlook
On March 10, 2000, the buyer for the San Diego-B property decided to proceed
with the purchase of the property, which it will continue to use as a parking
facility. The sale is tentatively set to close on May 15, 2000. Management is
also in discussions with the County of San Diego for the sale of the San
Diego-Union property. A portion of the proceeds from the sales of these two
properties will be used to payoff the Fund's line of credit with the bank. There
is no assurance, however, that the prospective buyers will close on the
properties.
-8-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
PART I. FINANCIAL INFORMATION
Item 3. Quantitative and Qualitative Disclosures About Market Risk
No significant change in the Fund's market risk has occurred
since December 31, 1999.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Inapplicable
Item 2. Changes in Securities and Use of Proceeds
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: Financial Data Schedule
b) Reports on Form 8-K:
Form 8-K dated January 31, 2000 described the
Fund's sale of a 600-car parking garage located in
Dallas, Texas.
-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: 5/11/00 By: /s/ John M. Prugh
John M. Prugh
President and Director
Realty Parking Company II, Inc.
General Partner
DATE: 5/11/00 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Realty Parking Company II, Inc.
General Partner
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with legend, if applicable)
</LEGEND>
<CIK> 0000871014
<NAME> Realty Parking Properties II L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-1-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 683,673
<SECURITIES> 0
<RECEIVABLES> 734,390
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,418,063
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,413,338
<CURRENT-LIABILITIES> 284,881
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 17,413,338
<SALES> 0
<TOTAL-REVENUES> 3,401,528
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 80,676
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45,457
<INCOME-PRETAX> 3,275,395
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,275,395
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,275,395
<EPS-BASIC> 2.310
<EPS-DILUTED> 0.000
</TABLE>
