-----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, Bnh0GqMoRZP373LYanxXa/+fCdCMrTOYUph9gJeMpz/O2Xm85Wq63RwZl1ueSi2n i67Zm3+yu6kDkLJ8rjH0iA== 0000808460-99-000005.txt : 19990517 0000808460-99-000005.hdr.sgml : 19990517 ACCESSION NUMBER: 0000808460-99-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONCORD MILESTONE PLUS L P CENTRAL INDEX KEY: 0000808460 STANDARD INDUSTRIAL CLASSIFICATION: LESSORS OF REAL PROPERTY, NEC [6519] IRS NUMBER: 521494615 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16757 FILM NUMBER: 99623003 BUSINESS ADDRESS: STREET 1: 5200 TOWN CENTER CIR STREET 2: 4TH FLOOR CITY: BOCA RATON STATE: FL ZIP: 33486 BUSINESS PHONE: 4073949260 10-Q 1 QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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: March 31, 1999 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-16757 CONCORD MILESTONE PLUS, L.P. (Exact Name of Registrant as Specified in its Charter) Delaware 52-1494615 (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 150 EAST PALMETTO PARK ROAD 4TH FLOOR BOCA RATON, FLORIDA 33432 (Address of Principal Executive Offices) (Zip Code) (561) 394-9260 Registrant's Telephone Number, Including Area Code 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 PART I - FINANCIAL INFORMATION Item 1. Financial Statements CONCORD MILESTONE PLUS, L.P. (a Limited Partnership) BALANCE SHEETS MARCH 31, 1999 (Unaudited) AND DECEMBER 31, 1998 ASSETS
March 31, 1999 December 31, 1998 Property, at cost Building and improvements $15,651,998 $15,630,448 Less: accumulated depreciation 6,172,498 6,017,284 ----------- ----------- Building and improvements, net 9,479,500 9,613,164 Land 10,987,034 10,987,034 ---------- ---------- Total property 20,466,534 20,600,198 Cash and cash equivalents 427,876 436,256 Accounts receivable 204,761 224,272 Restricted cash 320,059 231,930 Debt financing costs, net 266,336 274,170 Prepaid expenses and other assets, net 59,072 74,779 ------------- ------------- Total assets $21,744,638 $21,841,605 ========== ========== Liabilities: Mortgage loans payable $16,463,577 $16,513,054 Accrued interest 115,762 116,110 Accrued expenses and other liabilities 331,097 299,746 Accrued expenses payable to affiliates 15,841 45,641 ------------- ------------- Total liabilities 16,926,277 16,974,551 ---------- ---------- Commitments and Contingencies Partners' capital General partner (74,381) (73,894) Limited partners: Class A Interests, 1,518,800 4,892,742 4,940,948 Class B Interests, 2,111,072 - - ------------------ ------------------ Total partners' capital 4,818,361 4,867,054 ----------- ----------- Total liabilities and partners' capital $21,744,638 $21,841,605 ========== ==========
See Accompanying Notes to Financial Statements -2- CONCORD MILESTONE PLUS, L.P. (a Limited Partnership) STATEMENTS OF REVENUES AND EXPENSES (Unaudited) FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
March 31,1999 March 31, 1998 Revenues: Rent $648,090 $628,805 Reimbursed expenses 118,466 109,695 Interest and other income 3,633 2,662 ------------ ----------- Total revenues 770,189 741,162 ---------- --------- Expenses: Interest expense 336,495 339,387 Depreciation and amortization 165,844 171,801 Management and property expenses 210,175 177,139 Administrative and management fees to related party 38,774 33,181 Professional fees and other expenses 17,593 18,105 ---------- ---------- Total expenses 768,881 739,613 --------- --------- Net income $ 1,308 $ 1,549 ========== ========== Net income attributable to: Limited partners $1,295 $1,534 General partner 13 15 ----------- ------------ Net income $ 1,308 $ 1,549 ======== ========= Income per weighted average Limited Partnership 100 Class A Interests outstanding $ .09 $ .10 ========== =========== Weighted average number of 100 Class A interests outstanding 15,188 15,188 ======= ========
See Accompanying Notes to Financial Statements -3- CONCORD MILESTONE PLUS, L.P. (a Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (Unaudited) FOR THE THREE MONTHS ENDED MARCH 31, 1999
General Class A Total Partner Interests PARTNERS' CAPITAL (DEFICIT) January 1, 1999 $4,867,054 $(73,894) $4,940,948 Distributions (50,001) (500) (49,501) Net Income 1,308 13 1,295 ------------ ---------- ------------ PARTNERS' CAPITAL (DEFICIT) March 31, 1999 $4,818,361 $(74,381) $4,892,742 ========= ======= =========
See Accompanying Notes to Financial Statements -4- CONCORD MILESTONE PLUS, L.P. (a Limited Partnership) STATEMENTS OF CASH FLOWS (Unaudited) FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
March 31,1999 March 31, 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,308 $1,549 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 165,844 171,801 Change in operating assets and liabilities: Decrease (increase) in accounts receivable 19,511 (25,993) Decrease (increase) in prepaid expenses and other assets, net 12,911 (17,244) Decrease in accrued interest (348) (323) Increase (decrease) in accrued expenses and other liabilities 31,351 (4,762) Decrease in due to affiliate (29,800) (59,333) --------- -------- Net cash provided by operating activities 200,777 65,695 --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Property improvements (21,550) (15,741) --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase in restricted cash (88,129) (37,110) Principal repayments on mortgage loans payable (49,477) (46,610) Cash distributions to partners (50,001) 0 --------- ------------- Net cash used in financing activities (187,607) (83,720) NET DECREASE CASH AND CASH EQUIVALENTS (8,380) (33,766) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 436,256 257,905 -------- -------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 427,876 $ 224,139 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 336,843 $ 339,710 ========= ========
See Accompanying Notes to Financial Statements -5- CONCORD MILESTONE PLUS, L.P. (a Limited Partnership) NOTES TO FINANCIAL STATEMENTS (Unaudited) FOR THE THREE MONTHS ENDED MARCH 31, 1999 The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The financial statements as of and for the period ended March 31, 1999 and 1998 are unaudited. The results of operations for the interim periods are not necessarily indicative of the results of operations for the fiscal year. Certain information for 1998 has been reclassified to conform to the 1999 presentation. These financial statements should be read in conjunction with the financial statements and footnotes included thereto in the Partnership's financial statements filed on Form 10-K for the year ended December 31, 1998. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations General This Form 10-Q and documents incorporated herein by reference, if any, contain forward- looking statements that have been made within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are based on current expectations, estimates and projections about the Partnership's (as defined below) industry, management beliefs, and certain assumptions made by the Partnership's management and involve known and unknown risks, uncertainties and other factors. Such factors include, among other things, the following: general economic and business conditions, which will, among other things, affect the demand for retail space or retail goods, availability and creditworthiness of prospective tenants, lease rents and the terms and availability of financing; risks of real estate development and acquisition; governmental actions and initiatives; and environmental and safety requirements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. -6- Organization and Capitalization Concord Milestone Plus, L.P., a Delaware limited partnership (the "Partnership"), was formed on December 12, 1986, for the purpose of investing in existing income-producing commercial and industrial real estate. The Partnership began operations on August 20, 1987, and currently owns and operates three shopping centers located in Searcy, Arkansas; Valencia, California; and Green Valley, Arizona. The Partnership commenced a public offering on April 8, 1987 in order to fund the Partnership's real property acquisitions. The Partnership terminated its public offering on April 2, 1988 and was fully subscribed to with a total of 16,452 Bond Units and 15,188 Equity Units issued. Each Bond Unit consisted of $1,000 principal amount of Bonds and 36 Class B Interests. The Partnership redeemed all of the outstanding Bonds as of September 30, 1997 with the proceeds of three new fixed rate mortgage loans. Each Equity Unit consists of 100 Class A Interests and 100 Class B Interests. Capital contributions to the Partnership consisted of $15,187,840 from the sale of the Equity Units and $592,272 which represent the Class B Interests from the sale of the Bond Units. Impact of Year 2000 Year 2000 compliance programs and information systems modifications were initiated by the Partnership's affiliated management company, Milestone Property Management, Inc. ("MPMI"), in early 1998, in an attempt to ensure that these systems and key processes will remain functional. This objective is expected to be achieved either by modifying present systems using existing internal and external programming resources or by installing new system hardware and software, and by monitoring supplier, customer and other third party readiness. Such modifications are expected to be completed by MPMI by September 1999. There have been no costs charged to the Partnership for the Year 2000 program being completed by MPMI. The Partnership does not anticipate that the costs of any required modifications by MPMI to its information technology or embedded technology systems will have a material adverse effect on its financial position, results of operations or liquidity, although there can be no assurances that this will be the case. MPMI has contacted many of the Partnership's major customers, suppliers and vendors to inquire about their Year 2000 compliance programs. MPMI has not received responses from all those contacted, but those who have responded do not indicate any problems at this time. In the event that MPMI or material third parties fail to complete their Year 2000 compliance programs successfully and on time, the Partnership's ability to operate its business, service tenants, bill or collect its revenue in a timely manner could be adversely affected. Although there can be no assurance that the conversion of the Partnership's systems will be successful or that the Partnership's key third-party relationships will have successful conversion programs, the General Partner does not expect that any such failure would have a material adverse effect on the financial position, results of operations or liquidity of the Partnership, although there can be no assurances that this will be the case. The Partnership has day-to-day operational contingency plans, and the General Partner is in the process of updating these plans for possible Year 2000 specific operational requirements. -7- Results of Operations Comparison of Three Months Ended March 31, 1999 to Three Months Ended March 31, 1998 The Partnership recognized net income of $1,308 for the three months ended March 31, 1999 as compared to income of $1,549 for the same period in 1998 due to the following factors: An increase in revenues of $29,027, or 3.9%, to $770,189 for the three months ended March 31, 1999 as compared to $741,162 for the three months ended March 31, 1998 primarily due to the following: (1) an increase in base rent revenue at the Valencia Property due to one new tenant, and at the Green Valley Property due to a net gain of three new tenants, and (2) an increase in reimbursed expenses due to an increase in management and property expenses. An increase in management and property expenses of $33,036, or 18.6%, to $210,175 for the three months ended March 31, 1999 as compared to $177,139 for the three months ended March 31, 1998 primarily due to the following: (1) common area expenses increasing as a result of increased minor repair and maintenance procedures at all three properties (2) an increase in insurance expense due to an additional policy required at the Valencia Property for earthquake coverage and (3) an increase in real estate taxes at the Green Valley Property. A decrease in depreciation and amortization expense of $5,957, or 3.5%, to $165,844 for the three months ended March 31, 1999 as compared to $171,801 for the three months ended March 31,1998 primarily due to certain assets reaching the end of their depreciable lives. An increase in administrative and management fees to related party of $5,593, or 16.9%, to $38,774 for the three months ended March 31, 1999 as compared to $33,181 for the three months ended March 31, 1998 due to management fees being properly calculated in accordance with the management agreement based on a percentage of gross revenues rather than a percentage of base rents and percentage rents as had been calculated prior to the fourth quarter of 1998. Liquidity and Capital Resources The General Partner believes that the Partnership's expected revenue and working capital is sufficient to meet the Partnership's current operating requirements for the remainder of the year. Nevertheless, because the cash revenues and expenses of the Partnership will depend on future facts and circumstances relating to the Partnership's properties, as well as market and other conditions beyond the control of the Partnership, a possibility exists that cash flow deficiencies may occur. The Partnership is currently in the process of completing several property improvements including parking lot repair, HVAC upgrades and a tenant buildout at the Searcy Property. The total cost is approximately $55,000 which will be paid during the second quarter of 1999. -8- The Partnership resumed making distributions commencing with the fourth quarter of 1998. A distribution of $50,001 was paid during February 1999. A distribution subsequent to the first quarter of 1999 of $50,000 will be paid during May 1999. The Partnership had suspended making distributions subsequent to the first quarter of 1997 due to the cost of addressing an environmental issue identified at the Valencia Property and payment of certain expenses relative to the refinancing. The Partnership did not resume distributions until unrestricted working capital levels were deemed adequate. During February 1999, the Partnership received notice from Abco, the principal anchor tenant at the Green Valley Property, that Abco would not be renewing its lease at the expiration of its current term on July 31, 1999. No replacement tenant has yet been identified, however, the Partnership has retained a large regional real estate brokerage firm to help market the space. Many of the tenants at the Green Valley Property have short term leases. It is not possible to determine the long-term effects of the failure of Abco to renew its lease. In the short term, however, the vacancy of the Abco space could have a material adverse effect on the results of operations at the Green Valley Property by impairing the Partnership's ability to retain other tenants or to renew their leases on favorable terms, by reducing traffic at the Property and negatively affecting percentage rents. In addition, the Partnership will incur expenses in leasing the space vacated by Abco to a new tenant, and the Partnership and cannot predict how soon such space will be leased and the terms of such new lease. Currently, approximately $150,000 of the Partnership's working capital is being held in escrow in connection with the refinancing by the holder of the first mortgage on the Green Valley Property (the "Lender") pending the resolution of the forthcoming Abco vacancy. The cash on hand at March 31, 1999 may be used to fund (a) costs associated with releasing the Abco space should the costs of releasing exceed the $150,000 already held in escrow by the Lender for this purpose (b) quarterly distributions to the partners depending on distributable cash flows and certain other conditions, and (c) other general Partnership purposes. Management is not aware of any other trends, events, commitments or uncertainties that will or are likely to materially impact the Partnership's liquidity. Net cash provided by operating activities of $200,777 for the three months ended March 31, 1999 included (i) net income of $1,308, (ii) non-cash adjustments of $165,844 for depreciation and amortization expense and (iii) a net change in operating assets and liabilities of $33,625. Net cash provided by operating activities of $65,695 for the three months ended March 31, 1998 included (i) a net income of $1,549 (ii) non-cash adjustments of $171,801 for depreciation and amortization expense and (iii) a net change in operating assets and liabilities of $107,655. Net cash used in investing activities of $21,550 for the three months ended March 31, 1999 was for capital expenditures for property improvements. Net cash used in investing activities of $15,741 for the three months ended March 31, 1998 was for capital expenditures for property improvements. -9- Net cash used in financing activities of $187,607 for the three months ended March 31, 1999 include (i) principal repayments on mortgage loans payable of $49,477, (ii) an increase in restricted cash of $88,129, and (iii) cash distributions to partners of $50,001. Net cash used in financing activities of $83,720 for the three months ended March 31, 1998 included (i) principal repayments on mortgage loans payable of $46,610 and (ii) an increase in restricted cash of $37,110. Item 3. Quantitative and Qualitative Disclosures About Market Risk. The Partnership is not subject to any material market risk from fluctuations on interest rates, foreign currency exchange rates, commodity prices or equity prices, and does not engage in any hedging transactions with respect to such risks. PART II - OTHER INFORMATION Item 6. Reports on Form 8-K (a) Exhibit 27 - Financial Data Schedule is included. (b) No reports on form 8-K were filed during the quarter covered by this Report. -10- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DATE: May 13, 1999 CONCORD MILESTONE PLUS, L.P. --------------------- ---------------------------- (Registrant) BY: CM PLUS CORPORATION General Partner By: /S/ Robert Mandor Robert Mandor Director and Vice President By: /S/ Patrick Kirse Patrick Kirse Treasurer and Controller -11- EX-27 2 FDS
5 1 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 427,876 0 204,761 0 0 0 26,639,032 6,172,498 21,744,638 0 16,463,577 0 0 0 4,818,361 21,744,638 0 770,189 0 432,386 0 0 336,495 1,308 0 0 0 0 0 1,308 0.09 0
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