<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 quarterly period ended June 30, 1998.
_____Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ____________ to ___________.
0-24816
(Commission File Number)
NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
Delaware 23-2610414
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(State of other jurisdiction (IRS Employer Identification No.)
incorporated or organization)
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230 S. Broad Street, Mezzanine
Philadelphia, Pennsylvania 19102
--------------------------------
(Address of principal executive offices)
Registrant's telephone number: 215-790-4700
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
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Indicate the number of units of limited partnership interest outstanding as of
the latest practicable date.
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<S> <C>
Units of Limited Partnership Interest 100,000 units
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(Class) (Outstanding at August 10, 1998)
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NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
INDEX
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Page No.
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PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements
Combined Balance Sheets
June 30, 1998 and December 31, 1997 3
Combined Statements of Operations and Changes in
Partners' Deficit
Three and Six Months ended June 30, 1998 and 1997 4
Combined Statements of Cash Flows
Six Months ended June 30, 1998 and 1997 5
Notes to Combined Financial Statements 6
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 7
PART II. OTHER INFORMATION
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Item 6. Reports on Form 8-K 9
SIGNATURES 10
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NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
(A LIMITED PARTNERSHIP)
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<CAPTION>
COMBINED BALANCE SHEETS
(IN THOUSANDS)
=========================================================================================================================
JUNE 30, DECEMBER 31,
1998 1997
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(UNAUDITED)
ASSETS
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Rental property, at cost:
Land $17,529 $17,970
Buildings 241,177 255,764
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258,706 273,734
Less accumulated depreciation 118,837 122,448
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Rental property, net 139,869 151,286
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Cash and cash equivalents 1,119 1,068
Restricted cash 1,249 1,412
Tenant accounts receivable, net of allowance
of $30 - 1998 and 1997 400 53
Unbilled rent receivable 870 882
Tenant leasing costs 92 117
Accounts receivable and other assets 707 667
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Total assets $144,306 $155,485
=========================================================================================================================
LIABILITIES AND PARTNERS' DEFICIT
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Wraparound mortgages payable $428,433 $446,712
Less unamortized discount based on imputed
interest rate of 12% 238,952 248,050
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Wraparound mortgages payable less
unamortized discount 189,481 198,662
Due to Pension Group 2,154 1,954
Other borrowings 493 593
Deferred revenue 1,090 396
Accounts payable and other liabilities 2,616 2,361
Finance lease obligation 2,650 2,650
Deposit on sale of property 2,051 2,440
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Total liabilities 200,535 209,056
Partners' deficit (56,229) (53,571)
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Total liabilities and partners' deficit $144,306 $155,485
=========================================================================================================================
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
3
<PAGE> 4
NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
(A LIMITED PARTNERSHIP)
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<CAPTION>
COMBINED STATEMENTS OF OPERATIONS AND CHANGES IN PARTNERS' DEFICIT (UNAUDITED)
(IN THOUSANDS, EXCEPT PER UNIT DATA)
================================================================================================================
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
----------------------------------------------------------------
1998 1997 1998 1997
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<S> <C> <C> <C> <C>
Income:
Rental income $5,360 $6,012 $11,135 $11,741
Other charges to tenants 1,766 1,974 3,611 3,845
Interest income 25 34 58 74
Other income 0 0 61 0
- ----------------------------------------------------------------------------------------------------------------
Total income 7,151 8,020 14,865 15,660
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Operating expenses:
Interest expense 4,710 5,997 10,242 11,763
Real estate taxes 1,323 1,509 2,646 3,019
Management fees 328 333 646 709
Common area maintenance expenses 495 627 1,104 1,371
Ground rent 118 134 297 324
Repairs and maintenance 83 73 229 244
General and administrative 204 166 670 259
Depreciation and amortization 2,063 2,265 4,165 4,462
- ----------------------------------------------------------------------------------------------------------------
Total operating expenses 9,324 11,104 19,999 22,151
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Operating loss (2,173) (3,084) (5,134) (6,491)
Other income:
Net (loss) gain on disposition of properties (610) 586 2,198 586
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Loss before extraordinary item (2,783) (2,498) (2,936) (5,905)
Extraordinary item:
Forgiveness of wraparound mortgages payable
on dispositions of properties 278 0 278 0
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Net loss (2,505) (2,498) (2,658) (5,905)
Partners' deficit:
Beginning of period (53,724) (41,778) (53,571) (38,371)
- ----------------------------------------------------------------------------------------------------------------
End of period ($56,229) ($44,276) ($56,229) ($44,276)
================================================================================================================
Net loss per unit ($25.05) ($24.98) ($26.58) ($59.05)
================================================================================================================
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
4
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NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
(A LIMITED PARTNERSHIP)
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COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
=================================================================================
SIX MONTHS
ENDED
JUNE 30,
------------------------------
1998 1997
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Cash flows from operating activities:
Net loss ($2,658) ($5,905)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 4,065 4,319
Amortization of discount 4,476 4,569
Net gain on disposition of properties
including forgiveness of wraparound
mortgages payable (2,476) (586)
(Increase) decrease in tenant accounts
receivable (347) 87
Decrease in unbilled rent receivable 12 176
Decrease in tenant leasing costs 25 90
(Increase) decrease in accounts
receivable and other assets (40) 84
Increase (decrease) in accounts payable
and other liabilities 255 (346)
Increase (decrease) in deferred revenue 694 (46)
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Net cash provided by operating activities 4,006 2,442
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Cash flows from financing activities:
Payments on wraparound mortgages (3,537) (4,769)
Increase in due to Pension Group 200 1,674
Proceeds from other borrowings 0 358
Repayment of other borrowings (100) 0
Proceeds from additional debt 0 549
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Net cash used in financing activities (3,437) (2,188)
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Cash flows from investing activities:
Disposition of properties 46 586
Improvements to rental property (338) (1,033)
Decrease in deposit on sale of property (389) 0
- ---------------------------------------------------------------------------------
Net cash used in investing activities (681) (447)
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Decrease in cash and cash equivalents (112) (193)
Cash and cash equivalents:
Beginning of period 2,480 2,897
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End of period $2,368 $2,704
=================================================================================
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
5
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NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
(A LIMITED PARTNERSHIP)
Notes to Combined Financial Statements (Unaudited)
June 30, 1998
(in thousands)
Note 1: Basis of Presentation
The accompanying unaudited combined financial statements have been prepared in
accordance with the instructions to Form 10-Q and therefore do not include all
information and footnotes necessary for presentation of financial position,
results of operations, and cash flows required by generally accepted accounting
principles for complete financial statements. The information furnished reflects
all adjustments (consisting of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair summary of the financial position,
results of operations and cash flows for the interim periods presented. The
financial statements should be read in conjunction with the financial statements
and notes thereto filed with Form 10-K for the year ended December 31, 1997.
Note 2: Formation and Description of Business
National Property Analysts Master Limited Partnership (NPAMLP), a limited
partnership, was formed effective January 1, 1990. NPAMLP is owned 99% by the
limited partners and 1% by the general partner, EBL&S, Inc.
The properties included in NPAMLP consist primarily of regional shopping centers
or malls with national retailers as anchor tenants. The ownership and operations
of these properties have been combined in NPAMLP.
The combined financial statements include the accounts of partnerships that
contributed their interests to NPAMLP and certain partnerships whose partnership
interests were not contributed as of the effective date of NPAMLP's formation on
January 1, 1990, but were allocated their interests in NPAMLP as if they were
contributed on January 1, 1990.
6
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NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
(A LIMITED PARTNERSHIP)
Management's Discussion and Analysis of Results of Operations and Financial
Condition
Results of Operations
NPAMLP owned 53 properties at June 30, 1998 versus 57 at June 30, 1997. In July
1997, the Maplewood, Missouri property was sold. In February 1998, the East
Meadow property was conveyed to the underlying mortgage lender pursuant to the
Plan of Reorganization of East Meadow Associates. In May 1998, the Las Vegas,
Nevada and La Mesa, California properties were conveyed to the purchaser of the
properties' future interest in accordance with the 1995 agreements of sale.
Income decreased for the three and six month periods ended June 30, 1998 versus
June 30, 1997 by $869,000 and $795,000, respectively. The decrease was primarily
due to decreased rental income arising from property dispositions and the
absence of substantial 1997 tenant termination fee income.
Operating expenses decreased for the three and six month periods ended June 30,
1998 versus June 30, 1997 by $1,780,000 and $2,152,000, respectively. The
decrease in operating expenses was primarily due to decreases in interest, real
estate tax and common area maintenance expenses resulting from property
dispositions. The additional variance in operating expense for the six month
period was primarily due to an increase in legal fees.
Net gain on disposition of properties for the three and six month periods ended
June 30, 1998 versus June 30, 1997 decreased by $1,196,000 and increased by
$1,612,000, respectively. The variances were due to the dispositions of the Las
Vegas, Nevada and La Mesa, California properties in May 1998, which produced a
net loss on disposition of properties of $30,000 and $433,000, respectively; the
dispositions of the East Meadow, New York property and a portion of the Temple
Terrace, Florida property in February 1998, which produced a net gain on
disposition of properties of $2,600,000 and $61,000, respectively; and the
disposition of two outparcels of the Cottage Grove, Minnesota property in the
second quarter of 1997, which produced a net gain on disposition of properties
of $586,000.
In March 1998, Main Line Pension Group (the "Pension Group") agreed to the
forgiveness of $95,426,000 of Wraparound mortgage obligations with related
discounts of $57,256,000, of which $13,908,000 of Wraparound mortgage
obligations with related discounts of $4,441,000 were written off with the
dispositions of the East Meadow, New York and Las Vegas, Nevada properties
during the 1st and 2nd quarters of 1998. In addition, the Pension Group agreed
to the forgiveness of $1,954,000 which is due to the Pension Group for past due
payments. On May 12, 1998, the Pension Group agreed to defer the effective date
of these forgivenesses to September 1, 1998. The total resulting gain of
$30,657,000 will be reported in the third quarter of this year.
7
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NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
(A LIMITED PARTNERSHIP)
Management's Discussion and Analysis of Results of Operations and Financial
Condition
Liquidity and Capital Resources
Net cash provided by operations for the six month period ended June 30, 1998 was
$4,006,000. Net cash used in financing and investing activities was $3,437,000
and $681,000, respectively. As a result of the above, there was a $112,000
decrease in cash for the six months ended June 30, 1998.
As of June 30, 1998, the underlying mortgages were current for all the
properties except for the properties located in Ardmore, Oklahoma, Cahokia,
Illinois, North Augusta, South Carolina, Temple Terrace, Florida and Wichita,
Kansas. The second mortgage loan on the Ardmore property is significantly past
due and there are no plans to bring this loan current. NPAMLP has not received
any notice from the holder of this loan in seven years. As of June 30, 1998, the
underlying mortgage loan on the Cahokia property was delinquent four months. In
May 1998, the lender holding the mortgage loan commenced foreclosure proceedings
on the Cahokia property. As of June 30, 1998, the underlying mortgage loans on
the North Augusta and Wichita properties had matured and had balloon payments
due. In July, NPAMLP negotiated an extension of the underlying mortgage on the
North Augusta property. NPAMLP has continued to service the underlying mortgage
on the Wichita property and the lender has not declared a default. In June 1998,
NPAMLP entered into a contract for the sale of the Wichita property, which is
expected to be consummated during the third quarter of this year. NPAMLP intends
to utilize the proceeds from the sale to satisfy the delinquent amount. As of
June 30, 1998, the mortgage loan on the Temple Terrace property was delinquent.
The lender has declared a default with respect to this mortgage. The Temple
Terrace property is owned by Ocala Realty Associates (Ocala), which in October
1996 filed for protection under Chapter 11 of the U.S. Bankruptcy Code. Ocala
has been operating as a Debtor-In-Possession since the filing date. A Plan of
Reorganization was confirmed by the Bankruptcy court in July. Ocala entered into
a contract for sale of the Temple Terrace property, which is expected to be
consummated during the third quarter of this year. NPAMLP intends to utilize
proceeds from the sale to satisfy the delinquent amount.
In September 1996, NPAMLP obtained a $1,000,000 line of credit from Firstrust
Bank. Proceeds from the line of credit are utilized for capital and tenant
improvements to the properties. At June 30, 1998, $493,000 has been advanced
under this line of credit.
As of June 30, 1998, NPAMLP was obligated for approximately $258,000 of capital
commitments which are primarily for roof repairs and replacements.
8
<PAGE> 9
PART II
Item 6(B). Reports on Form 8-K
The registrant was not required to file any current reports on
Form 8-K during the three months ended June 30, 1998.
9
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
National Property Analysts Master Limited
Partnership
-------------------------------------------------------
(Registrant)
Date: August 10, 1998
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By: EBL&S, Inc., its sole general partner
---------------------------------------------------
By: /s/ Edward B. Lipkin
---------------------------------------------------
Name: Edward B. Lipkin
Title: President and Principal Financial Officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,368
<SECURITIES> 0
<RECEIVABLES> 430
<ALLOWANCES> 30
<INVENTORY> 0
<CURRENT-ASSETS> 2,768
<PP&E> 258,706
<DEPRECIATION> 118,837
<TOTAL-ASSETS> 144,306
<CURRENT-LIABILITIES> 3,706
<BONDS> 189,481
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 144,306
<SALES> 0
<TOTAL-REVENUES> 7,151
<CGS> 0
<TOTAL-COSTS> 2,551
<OTHER-EXPENSES> 2,673
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,710
<INCOME-PRETAX> (2,783)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,783)
<DISCONTINUED> 0
<EXTRAORDINARY> 278
<CHANGES> 0
<NET-INCOME> (2,505)
<EPS-PRIMARY> (25.05)
<EPS-DILUTED> (25.05)
</TABLE>
