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, 1995
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: 0-11058
BURGER KING LIMITED PARTNERSHIP I
(Exact name of registrant as specified in its charter)
New York 13-3110947
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) identification No.)
3 World Financial Center, 29th Floor, New York, NY 10285
(Address of principal executive offices) (Zip code)
(212) 526-3237
(Registrant's telephone number, including area code)
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
Balance Sheets
March 31, December 31,
Assets 1995 1994
Real estate at cost:
Land $ 1,113,406 $ 1,415,906
Buildings 2,210,836 2,896,441
Fixtures and equipment 485,306 635,649
3,809,548 4,947,996
Less - accumulated depreciation (1,878,873) (2,430,394)
1,930,675 2,517,602
Cash 2,339,065 3,128,790
Other receivable 459,850 0
Settlement escrow receivable 95,260
Rent receivable 63,789 99,980
Total Assets $ 4,793,379 $ 5,841,632
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 205,001 $ 250,273
Due to affiliates 4,414 1,749
Distributions payable 2,031,026 2,418,232
Total Liabilities 2,240,441 2,670,254
Partners' Capital (Deficit):
General Partner (89,904) (88,437)
Limited Partners
(15,000 units outstanding) 2,642,842 3,259,815
Total Partners' Capital 2,552,938 3,171,378
Total Liabilities and
Partners' Capital $ 4,793,379 $ 5,841,632
Statement of Partners' Capital (Deficit)
For the three months ended March 31, 1995
Limited General
Partners Partner Total
Balance at December 31, 1994 $ 3,259,815 $ (88,437) $ 3,171,378
Net income 1,406,234 23,118 1,429,352
Distributions (2,023,207) (24,585) (2,047,792)
Balance at March 31, 1995 $ 2,642,842 $ (89,904) $ 2,552,938
Statements of Operations
For the three months ended March 31, 1995 and 1994
Income 1995 1994
Rental income $ 263,373 $ 462,201
Interest income 26,709 3,191
Gain on sale of properties 1,253,015 0
Other income 450 1,093
Total Income 1,543,547 466,485
Expenses
Depreciation 35,416 68,109
Ground lease rent 28,229 50,112
Management fee 23,515 41,208
General and administrative 27,035 30,495
Total Expenses 114,195 189,924
Net Income $ 1,429,352 $ 276,561
Net Income Allocated:
To the General Partner $ 23,118 $ 17,234
To the Limited Partners 1,406,234 259,327
$ 1,429,352 $ 276,561
Per limited partnership
interest (15,000 outstanding) $ 93.75 $ 17.29
Statements of Cash Flows
For the three months ended March 31, 1995 and 1994
Cash Flows from Operating Activities: 1995 1994
Net income $ 1,429,352 $ 276,561
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation 35,416 68,109
Gain on sale of properties (1,253,015) 0
Increase (decrease) in cash arising
from changes in operating assets and
liabilities:
Settlement escrow 95,260 0
Rent receivable 36,191 (2,672)
Accounts payable and accrued expenses (45,272) (6,212)
Due to affiliates 2,665 (1,275)
Net cash provided by
operating activities 300,597 334,511
Cash Flows from Investing Activities:
Proceeds from sale of properties 1,344,676 0
Net cash provided by
investing activities 1,344,676 0
Cash Flows from Financing Activities:
Cash distributions to partners (2,434,998) (425,183)
Net cash used for
financing activities (2,434,998) (425,183)
Net decrease in cash (789,725) (90,672)
Cash at beginning of period 3,128,790 520,896
Cash at end of period $ 2,339,065 $ 430,224
Notes to the Financial Statements
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1994 audited financial statements within Form 10-K.
The unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of March 31, 1995 and the results of operations and cash flows for
the three months ended March 31, 1995 and 1994 and the statement of changes in
partners' capital (deficit) for the three months ended March 31, 1995. Results
of operations for the period are not necessarily indicative of the results to
be expected for the full year.
The following significant events have occurred subsequent to fiscal year 1994,
which require disclosure in this interim report per Regulation S-X, Rule 10-01,
Paragraph (a)(5).
A. During the first quarter of 1995, the Partnership sold three properties as
follows:
Date Adjusted Net Gain
of Selling Book on
Store Sale Price Value Sale
Washington, NC 03/10/95 $ 619,944 $ 180,837 $ 439,107
Carlsbad, NM 03/31/95 $ 728,684 $ 240,175 $ 488,509
Big Spring, TX 03/31/95 $ 455,898 $ 130,499 $ 325,399
$ 1,804,526 $ 551,511 $ 1,253,015
B. On September 23, 1994, the Partnership notified the Wisconsin Department of
Natural Resources ("WDNR") that petroleum and chlorinated compounds were
discovered at one of the Partnership's properties located in Greenfield,
Wisconsin. The WDNR has indicated that under Wisconsin state law, the
Partnership will be responsible for remediating the site. The Partnership has
obtained a preliminary cost estimate to remediate the site from an
environmental consulting firm. Based on this estimate and in accordance with
the terms of the Partnership Agreement, the Partnership set aside $300,000 from
the net cash flow from operations to fund the potential environmental
remediation costs. The General Partner believes that the cost of the
environmental remediation will be recovered from the proceeds received from the
sale of the restaurant.
Part 1, Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Liquidity and Capital Resources
At March 31, 1995, the Partnership had a cash balance of $2,339,065 compared to
$3,128,790 at December 31, 1994. The balance at December 31, 1994 consisted
primarily of net proceeds of $2,583,571 from the sale of four restaurants and
cash flow from operations for the fourth quarter of 1994. A distribution of
$2,418,232 from such funds was made to the partners on January 30, 1995. The
Partnership's cash balance at March 31, 1995 consisted primarily of net proceeds
from restaurant sales in the amount of $1,344,676 and cash flow from operations
for the first quarter of 1995.
On March 10, 1995, the Partnership sold a property located in Washington, NC
for net proceeds of $619,944 resulting in a gain of $439,107. On March 31,
1995, the Partnership sold two additional restaurants located in Carlsbad, NM
and Big Spring, TX for net proceeds of $1,184,582 resulting in a gain of
$813,908. The Partnership continues to market the remaining ten restaurants to
a number of prospective purchasers. Despite these efforts, there can be no
assurance that the restaurants will be sold in 1995. Upon the sale of the
remaining restaurants, net proceeds will be distributed to the partners and the
Partnership will then be dissolved in accordance with the terms of the
Partnership Agreement.
Rent receivable decreased to $63,789 at March 31, 1995 from $99,980 at December
31, 1994. The decrease is primarily attributable to a decrease in percentage
rent resulting from the sale of four restaurants during the last quarter of
1994. Accounts payable and accrued expenses decreased to $205,001 at March
31, 1995 from $250,273 at December 31, 1994 due primarily to the payment of
audit and legal fees incurred in connection with the sale of four restaurants
during the fourth quarter of 1994.
For the quarter ended March 31, 1995, the Partnership declared a distribution
in the amount of $2,047,792 which consisted of $1,945,110 of net proceeds from
the sale of three restaurants and $102,682 of cash flow from operations. The
distribution payable at March 31, 1995 was $2,031,026, representing the
distribution of $2,047,792, net of state non-resident withholding taxes of
$16,766. On April 28, 1995, the Partnership paid a cash distribution to the
partners in the amount of $2,028,124. The unpaid portion of $4,107
represents an amount equal to 4% of the quarterly distributions of net cash
flow from operations. Pursuant to the terms of the partnership agreement dated
December 14, 1981 (the "Partnership Agreement"), net cash flow from operations
is distributed on the basis of 95% to the limited partners and 1% to the
General Partner with the remaining 4% being retained by the Partnership as a
contingent reserve (the "Contingent Reserve"). The limited partners are
entitled to receive an annual return equal to 12.5% of their remaining invested
capital. To the extent the limited partners do not receive an annual return of
12.5%, the Contingent Reserve is distributed to the limited partners with the
remainder, if any, distributed to the General Partner.
On September 23, 1994, the Partnership notified the Wisconsin Department of
Natural Resources ("WDNR") that petroleum and chlorinated compounds were
discovered at one of the Partnership's properties located in Greenfield,
Wisconsin. The WDNR has indicated that under Wisconsin state law, the
Partnership will be responsible for remediating the site. The Partnership has
obtained a preliminary cost estimate to remediate the site from an
environmental consulting firm. Based on this estimate and in accordance with
the Partnership Agreement, the Partnership set aside $300,000 from net cash
flow from operations to fund the potential environmental remediation costs.
The General Partner believes that the cost of the environmental remediation
will be recovered from the proceeds from the sale of the restaurant.
Results of Operations
The Partnership generated net income for the three months ended March 31, 1995,
of $1,429,444 compared to $276,561 for the corresponding period in 1994.
The increase in net income during the first quarter of 1995 is primarily
attributable to the gain recognized on the sale of three restaurants located in
Washington, NC; Carlsbad, NM and Big Spring, TX . These properties were sold
for net proceeds of $1,804,526 resulting in a gain of $1,253,015.
Rental income for the three months ended March 31, 1995 was $263,373 compared
to $462,201 for the corresponding period in 1994. The decrease is primarily
due to the sale of ten restaurants during the third and fourth quarters of
1994.
Interest income increased for the three months ended March 31, 1995 to $26,709
compared to $3,191 for the corresponding period in 1994. The increase is due
to higher interest rates and a larger invested cash balance resulting from
property sales.
Depreciation, ground lease rent and management fees all decreased for the three
months ended March 31, 1995 compared to the corresponding period in 1994,
primarily due to the sale of the ten restaurants in the second half of 1994.
PART II OTHER INFORMATION
Items 1-4 Not applicable
Item 5 Other Information.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - No reports on Form 8-K were filed during
the quarter ended March 31, 1995.
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.
BURGER KING LIMITED PARTNERSHIP I
BY: BK I REALTY INC. General Partner
Date: May 12, 1995 BY: /s/ Rocco Andriola
Name: Rocco Andriola
Title: Director, President and
Chief Financial Officer