-----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, S74rRg1jwNJTZY4lQIsIn2Zo9qzwf0szTdrk/CbWX4uFmix2w9N6jaQZpASvol4y jvzNyBjGpFVOlAWEIj3f7A== 0000783287-97-000004.txt : 19970814 0000783287-97-000004.hdr.sgml : 19970814 ACCESSION NUMBER: 0000783287-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 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: 97658579 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 [x] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934. For the period ended June 30, 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 June 30, 1997 and December 31, 1996 2 Condensed Statements of Operations for the three and six months ended June 30, 1997 and 1996 3 Condensed Statement of Partners' Equity for the six months ended June 30, 1997 4 Condensed Statements of Cash Flows for the six months ended June 30, 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 (Items 1 through 4 are not applicable) Item 5 - Other Information 9 QSR INCOME PROPERTIES, LTD., a California Limited Partnership CONDENSED BALANCE SHEETS
June 30, December 31, 1997 1996 -------------------------------------- (Unaudited) ASSETS Cash and cash equivalents $ 535,000 $ 1,816,000 Rent and other receivables 1,000 1,000 Notes receivable 180,000 202,000 Facilities, at net realizable value 7,335,000 7,335,000 Other assets 152,000 46,000 -------------------------------------- Total assets $ 8,203,000 $ 9,400,000 ====================================== LIABILITIES AND PARTNERS' EQUITY Accounts payable $ 165,000 $ 157,000 Partners' equity: Limited partners' equity, $500 per unit, 52,004 units authorized, issued and outstanding 7,982,000 9,174,000 General partner's equity 56,000 69,000 -------------------------------------- Total partners' equity 8,038,000 9,243,000 -------------------------------------- Total liabilities and partners' equity $ 8,203,000 $ 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 Six Months Ended June 30, June 30, -------------------------------------------------------------- 1997 1996 1997 1996 -------------------------------------------------------------- REVENUE: Lease income $ 282,000 $ 265,000 $ 575,000 $ 553,000 Interest income 8,000 26,000 24,000 51,000 -------------------------------------------------------------- 290,000 291,000 599,000 604,000 -------------------------------------------------------------- COSTS AND EXPENSES: Cost of operations 37,000 36,000 72,000 72,000 Depreciation and amortization - - - 58,000 Idle facility costs 5,000 5,000 10,000 13,000 Write-down of restaurant facilities - 2,350,000 - 2,350,000 Partnership administrative expenses 25,000 24,000 52,000 50,000 -------------------------------------------------------------- 67,000 2,415,000 134,000 2,543,000 -------------------------------------------------------------- NET INCOME (LOSS) $ 223,000 $ (2,124,000) $ 465,000 $ (1,939,000) ============================================================== Allocation of net income (loss) Limited partners $ 329,000 $ (1,949,000) General partner 136,000 10,000 ------------------------------- $ 465,000 $ (1,939,000) =============================== Limited partners' allocation per unit $ 6.33 $ (37.48) ===============================
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 Partner Total ----------------------------------------------------------- Balance at December 31, 1996 $ 9,174,000 $ 69,000 $ 9,243,000 Net income 329,000 136,000 465,000 Distributions (1,521,000) (149,000) (1,670,000) ----------------------------------------------------------- Balance at June 30, 1997 $ 7,982,000 $ 56,000 $ 8,038,000 ===========================================================
See accompanying notes to Condensed Financial Statements. 4 QSR INCOME PROPERTIES, LTD., a California Limited Partnership CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30, --------------------------------------- 1997 1996 --------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 465,000 $ (1,939,000) Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation and amortization - 58,000 Write-down of restaurant facilities - 2,350,000 Increase in rent and other receivables - (32,000) Increase in other assets (106,000) - Increase (decrease) in accounts payable 8,000 (1,000) --------------------------------------- Total adjustments (98,000) 2,375,000 --------------------------------------- Net cash provided by operating activities 367,000 436,000 --------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from notes receivable 22,000 6,000 Distributions paid to partners (1,670,000) (371,000) --------------------------------------- Net cash used in financing activities (1,648,000) (365,000) --------------------------------------- Net (decrease) increase in cash and cash equivalents (1,281,000) 71,000 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 $ 535,000 $ 1,701,000 =======================================
See accompanying notes to Condensed Financial Statements. 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 June 30, 1997 and December 31, 1996, the results of its operations for the six months ended June 30, 1997 and 1996 and its cash flows for the six months then ended. 3. The results of operations for the six months ended June 30, 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 expected to 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." On June 12, 1997, the general partner and USRPOLP amended the purchase and sale agreement to sell all of the Partnership's assets to USRPOLP for cash. The transaction was completed in July 1997. The Partnership expects to make its liquidating distribution in the third quarter of 1997. 6 QSR INCOME PROPERTIES, LTD., a California Limited Partnership MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS June 30, 1997 Results of Operations - --------------------- The Partnership's net income of $465,000 and net loss of $1,939,000 for the six months ended June 30, 1997 and 1996, respectively, represent an increase in income of $2,404,000. Excluding the $2,350,000 write-down of facilities related to the sale of the Partnership, net income increased $54,000 from $411,000 to $465,000 during the six months ended June 30, 1996 and 1997, respectively. 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 six months ended June 30, 1997 increased $22,000 over the same period in 1996 as a result of one additional facility being leased in 1997 compared to the same period in 1996. Included in lease income for the six months ended June 30, 1997 and 1996, respectively, is approximately $22,000 and $25,000 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 six months ended June 30, 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 six months ended June 30, 1997 compared to the same period in 1996. The decrease is the result of the Partnership's presentation of its properties at net realizable value and the discontinuation of the provision for depreciation. Liquidity and capital resources - ------------------------------- For the six months ended June 30, 1997, the Partnership's operating activities generated cash flow of $367,000. This represents a $69,000 decrease compared to the cash flow of $436,000 generated by the Partnership for the six months ended June 30, 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 six months ended June 30, 1997, the Partnership's distribution increased to $29.25 from $6.50 per Partnership unit for the six months ended June 30, 1996. Included in the distribution for the six months ended June 30, 1997 was a special distribution of $26.00 per Partnership unit. 7 Sale of assets - -------------- 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 expected to 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." On June 12, 1997, the general partner and USRPOLP amended the purchase and sale agreement to sell all of the Partnership's assets to USRPOLP for cash. The transaction was completed in July 1997. The Partnership expects to make its liquidating distribution in the third quarter of 1997. 8 PART II. OTHER INFORMATION Items 1 through 4 are not applicable. Item 5 Other Information ----------------- 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 expected to 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." On June 12, 1997, the general partner and USRPOLP amended the purchase and sale agreement to sell all of the Partnership's assets to USRPOLP for cash. The transaction was completed in July 1997. The Partnership expects to make its liquidating distribution in the third quarter of 1997. 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: August 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. $ 6-MOS DEC-31-1997 JAN-1-1997 JUN-30-1997 1 535,000 0 1,000 0 0 536,000 10,591,000 (3,256,000) 8,203,000 165,000 0 0 0 0 8,038,000 8,203,000 0 599,000 0 72,000 62,000 0 0 465,000 0 465,000 0 0 0 465,000 6.33 6.33
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