-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QCvuvjEcagSo1WHwD8Cyux4wNsRFNY+MgEXKuW1p6KOG6zzgATnfXg6iMtuLbi3H ELfz7v+h9BzfcjY6hEpxxw== 0000702276-97-000020.txt : 19970520 0000702276-97-000020.hdr.sgml : 19970520 ACCESSION NUMBER: 0000702276-97-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: QSR INCOME PROPERTIES LTD CENTRAL INDEX KEY: 0000783287 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 954084042 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15802 FILM NUMBER: 97606272 BUSINESS ADDRESS: STREET 1: 701 WESTERN AVE STREET 2: SUITE 200 CITY: GLENDALE STATE: CA ZIP: 91201-2397 BUSINESS PHONE: 8182448080 MAIL ADDRESS: STREET 1: 701 WESTERN AVE STREET 2: SUITE 200 CITY: GLENDALE STATE: CA ZIP: 91201 FORMER COMPANY: FORMER CONFORMED NAME: RR EQUITY PARTNERS LTD DATE OF NAME CHANGE: 19860422 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q-A [x] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934. For the period ended March 31, 1997 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the transition period from to ---------------- ---------------- Commission File Number 0-15802 QSR Income Properties, Ltd., a California Limited Partnership --------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 95-4084042 - ---------------------------------------- -------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 701 Western Avenue Glendale, California 91201-2394 - ---------------------------------------- -------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (818) 244-8080 -------------- Indicate by check mark whether the registrant (1) had 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 --- --- QSR INCOME PROPERTIES, LTD., a California Limited Partnership INDEX PART I. FINANCIAL INFORMATION Item 1. Condensed Balance Sheets at March 31, 1997 and December 31, 1996 2 Condensed Statements of Operations for the three months ended March 31, 1997 and 1996 3 Condensed Statement of Partners' Equity for the three months ended March 31, 1997 4 Condensed Statements of Cash Flows for the three months ended March 31, 1997 and 1996 5 Notes to Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 PART II. OTHER INFORMATION 9 QSR INCOME PROPERTIES, LTD., a California Limited Partnership CONDENSED BALANCE SHEETS
March 31, December 31, 1997 1996 -------------------------------------- (Unaudited) ASSETS Cash and cash equivalents $ 326,000 $ 1,816,000 Rent and other receivables - 1,000 Notes receivable 189,000 202,000 Facilities, at net realizable value 7,335,000 7,335,000 Other assets 119,000 46,000 -------------------------------------- Total assets $ 7,969,000 $ 9,400,000 ====================================== LIABILITIES AND PARTNERS' EQUITY Accounts payable $ 154,000 $ 157,000 Partners' equity: Limited partners' equity, $500 per unit, 52,004 units authorized, issued and outstanding 7,761,000 9,174,000 General partner's equity 54,000 69,000 -------------------------------------- Total partners' equity 7,815,000 9,243,000 -------------------------------------- Total liabilities and partners' equity $ 7,969,000 $ 9,400,000 ======================================
See accompanying notes to Condensed Financial Statements. 2 QSR INCOME PROPERTIES, LTD., a California Limited Partnership CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, --------------------------------- 1997 1996 --------------------------------- REVENUE: Lease income $293,000 $288,000 Interest income 16,000 25,000 --------------------------------- 309,000 313,000 --------------------------------- COSTS AND EXPENSES: Cost of operations 35,000 36,000 Depreciation and amortization - 58,000 Idle facility costs 5,000 8,000 Partnership administrative expenses 27,000 26,000 --------------------------------- 67,000 128,000 --------------------------------- NET INCOME $242,000 $185,000 ================================= Allocation of net income Limited partners $108,000 $169,000 General partner 134,000 16,000 --------------------------------- $242,000 $185,000 ================================= Limited partners' allocation per unit $ 2.08 $ 3.25 =================================
See accompanying notes to Condensed Financial Statements. 3 QSR INCOME PROPERTIES, LTD., a California Limited Partnership CONDENSED STATEMENTS OF PARTNERS' EQUITY (Unaudited)
Limited General Partners Partners Total ----------------------------------------------------------- Balance at December 31, 1996 $9,174,000 $ 69,000 $9,243,000 Net income 108,000 134,000 242,000 Distributions (1,521,000) (149,000) (1,670,000) ----------------------------------------------------------- Balance at March 31, 1997 $7,761,000 $ 54,000 $7,815,000 ===========================================================
See accompanying notes to Condensed Financial Statements. 4 QSR INCOME PROPERTIES, LTD., a California Limited Partnership CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31, --------------------------------------- 1997 1996 --------------------------------------- Cash flows from operating activities: Net income $ 242,000 $ 185,000 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization - 58,000 Increase in other assets (73,000) - Decrease in accounts receivable 1,000 7,000 Decrease in accounts payable (3,000) (1,000) --------------------------------------- Total adjustments (75,000) 64,000 --------------------------------------- Net cash provided by operating activities 167,000 249,000 --------------------------------------- Cash flows from financing activities: Proceeds from notes receivable 13,000 3,000 Distributions paid to partners (1,670,000) (185,000) --------------------------------------- Net cash used in financing activities (1,657,000) (182,000) --------------------------------------- Net (decrease) increase in cash and cash equivalents (1,490,000) 67,000 Cash and cash equivalents at the beginning of the period 1,816,000 1,630,000 --------------------------------------- Cash and cash equivalents at the end of the period $ 326,000 $ 1,697,000 =======================================
See accompanying notes to Condensed Financial Statments. 5 QSR INCOME PROPERTIES, LTD., a California Limited Partnership NOTES TO CONDENSED FINANCIAL STATEMENTS 1. The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures contained herein are adequate to make the information presented not misleading. These unaudited condensed financial statements should be read in conjunction with the financial statements and related notes appearing in the Partnership's Form 10-K for the year ended December 31, 1996. 2. In the opinion of management, the accompanying unaudited condensed financial statements reflect all adjustments, consisting of only normal accruals, necessary to present fairly the Partnership's financial position at March 31, 1997 and December 31, 1996, the results of its operations for the three months ended March 31, 1997 and 1996 and its cash flows for the three months then ended. 3. The results of operations for the three months ended March 31, 1997 are not necessarily indicative of the results expected for the full year. 4. In November 1995, the general partner decided to place the facility assets for sale and hired an investment banker to determine the valuation of the assets and solicit offers. Based on offers to buy the assets received, the general partner determined that the carrying value of the assets needed to be reduced by $2,350,000 to present the value of such assets at their net realizable value. Such valuation assumes costs to be incurred in the ordinary course of sale. On September 16, 1996, the general partner entered into a purchase and sale agreement with US Restaurants Properties Master LP ("USRPMLP"), a Delaware limited partnership and US Restaurants Properties Operating LP ("USRPOLP"), a Delaware limited partnership whereby the Partnership would sell its restaurant assets to USRPOLP for $7,571,234 and certain of its notes receivable at a price which provides USRPOLP with a 13.5% yield. USRPOLP will pay for the purchase of the assets with limited partnership units of USRPMLP. USRPMLP is a New York Stock Exchange traded master limited partnership traded under the symbol "USV." The transaction which is subject to certain contingencies, including approval by the limited partners of the Partnership is expected to close in the first half of 1997. The transaction is expected to be tax-free for most limited partners. After the sale of the Partnership's assets, the Partnership expects to liquidate, distributing to the Unitholders the limited partnership interests in USRPMLP and any cash reserves. 6 QSR INCOME PROPERTIES, LTD., a California Limited Partnership MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS March 31, 1997 The Partnership was formed to acquire and operate pizza restaurants. All twenty-three of the Partnership's restaurants were closed because of disappointing operating results. Of the twenty-three restaurants closed, four have been sold, three lease commitments have been terminated and sixteen facilities have been leased to unaffiliated third parties. Results of Operations - --------------------- The Partnership's net income of $242,000 and $185,000 for the three months ended March 31, 1997 and 1996, respectively, represent an increase in income of $57,000. This increase is primarily attributable to a decrease in depreciation expense related to the valuation of the Partnership's facility assets at their net realizable value. Lease income for the three months ended March 30, 1997 increased $5,000 over the same period in 1996 as the result of one additional facility being leased in 1997 compared to the same period in 1996. Included in lease income for each of the three month periods ended March 31, 1997 and 1996 is approximately $17,000 of additional lease income under a percentage rent feature with respect to incremental sales above specified levels. Idle facility costs decreased $3,000 for the three months ended March 31, 1997 compared to the same period in 1996. The decrease was primarily attributable to decreases in utilities and property tax expenses associated with the Partnership's final restaurant facility redeployed in December 1996. Depreciation expense decreased $58,000 for the three months ended March 31, 1997 compared to the same period in 1995. The decrease is the result of the Partnership's presentation of its properties at net realizable value and the discontinuation of provisions for depreciation. Liquidity and capital resources - ------------------------------- For the three months ended March 31, 1997, the Partnership's activities generated cash flow of $167,000. This represents an $82,000 decrease compared to the cash flow of $249,000 generated by the Partnership for the three months ended March 31, 1996. The decrease is primarily attributable to capitalized costs related to the proposed sale of the Partnership's properties. Such costs are reflected in other assets. Cash flow from the Partnership's operations has been sufficient to meet all current obligations of the Company. For the three months ended March 31, 1997, the Partnership's distribution increased to $29.25 from $3.25 per Partnership unit for the three months ended March 31, 1996. Included in the distribution for the three months ended March 31, 1997 was a special distribution of $26.00 per Partnership unit. In November 1995, the general partner decided to place the facility assets for sale and hired an investment banker to determine the valuation of the assets and solicit offers. Based on offers to buy the assets received, the general 7 partner determined that the carrying value of the assets needed to be reduced by $2,350,000 to present the value of such assets at their net realizable value. Such valuation assumes costs to be incurred in the ordinary course of sale. On September 16, 1996, the general partner entered into a purchase and sale agreement with US Restaurants Properties Master LP ("USRPMLP"), a Delaware limited partnership and US Restaurants Properties Operating LP ("USRPOLP"), a Delaware limited partnership whereby the Partnership would sell its restaurant assets to USRPOLP for $7,571,234 and certain of its notes receivable at a price which provides USRPOLP with a 13.5% yield. USRPOLP will pay for the purchase of the assets with limited partnership units of USRPMLP. USRPMLP is a New York Stock Exchange traded master limited partnership traded under the symbol "USV." The transaction which is subject to certain contingencies, including approval by the limited partners of the Partnership is expected to close in the first half of 1997. The transaction is expected to be tax-free for most limited partners. After the sale of the Partnership's assets, the Partnership expects to liquidate, distributing to the Unitholders the limited partnership interests in USRPMLP and any cash reserves. 8 PART II. OTHER INFORMATION Items 1 through 5 are not applicable. Item 6 Exhibits and Reports on Form 8-K a) Exhibits - the following exhibit is included herein: (27) Financial Data Schedule b) Reports on 8-K - None 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. DATED: May 13, 1997 QSR Income Properties, Ltd., a California Limited Partnership BY: /s/ B. Wayne Hughes ------------------------------------ B. Wayne Hughes General Partner 9 EX-27 2 FDS --
5 0000783287 QSR INCOME PROPERTIES, LTD. 1 U.S. $ 3-MOS DEC-31-1997 JAN-1-1997 MAR-31-1997 1 326,000 0 0 0 0 326,000 10,591,000 (3,256,000) 7,969,000 154,000 0 0 0 0 7,815,000 7,969,000 0 309,000 0 35,000 32,000 0 0 242,000 0 242,000 0 0 0 242,000 2.08 2.08
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