10-Q 1 e10-q.txt NATIONAL PROPERTY QUARTERLY REPORT 6/30/2000 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, 2000. ___ 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 ----------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 23-2610414 ---------------------------- -------------------------------- (State of other jurisdiction (IRS Employer Identification No.) incorporated or organization) 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 _____ Indicate the number of units of limited partnership interest outstanding as of the latest practicable date. Units of Limited Partnership Interest 97,752 units -------------------------------------------- -------------------------------- (Class) (Outstanding at August 10, 2000) 2 NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP INDEX Page No. -------- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Combined Balance Sheets June 30, 2000 and December 31, 1999 3 Combined Statements of Operations and Changes in Partners' Deficit Three and Six Months ended June 30, 2000 and 1999 4 Combined Statements of Cash Flows Six Months ended June 30, 2000 and 1999 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 Item 6. Reports on Form 8-K 9 SIGNATURES 10 3 NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP (A LIMITED PARTNERSHIP) COMBINED BALANCE SHEETS (IN THOUSANDS)
JUNE 30, DECEMBER 31, 2000 1999 (UNAUDITED) ----------- ------------ ASSETS Rental property, at cost: Land $ 15,444 $ 15,293 Buildings 218,651 215,676 --------- --------- 234,095 230,969 Less: accumulated depreciation 117,858 114,302 --------- --------- Rental property, net 116,237 116,667 Cash and cash equivalents 2,705 2,527 Restricted cash 3,295 2,316 Tenant accounts receivable, net of allowance of $30 - 2000 and 1999 352 312 Unbilled rent receivable 547 531 Tenant leasing costs 41 50 Accounts receivable and other assets 1,271 1,684 --------- --------- Total assets $ 124,448 $ 124,087 ========= ========= LIABILITIES AND PARTNERS' DEFICIT Wraparound mortgages payable $ 300,963 $ 300,782 Less: unamortized discount based on imputed interest rate of 12% 152,531 156,559 --------- --------- Wraparound mortgages payable less unamortized discount 148,432 144,223 Due to Pension Groups -- 189 Other borrowings 770 770 Deferred revenue 767 556 Accounts payable and other liabilities 2,219 1,989 Finance lease obligation 2,650 2,650 Deposit on sale of property 2,051 2,051 --------- --------- Total liabilities 156,889 152,428 Partners' deficit (32,441) (28,341) --------- --------- Total liabilities and partners' deficit $ 124,448 $ 124,087 ========= =========
See accompanying notes to combined financial statements 3 4 NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP (A LIMITED PARTNERSHIP) 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, -------------------------- -------------------------- 2000 1999 2000 1999 ----------- ------------ ----------- ----------- Income: Rental income $ 4,838 $ 4,774 $ 9,676 $ 9,359 Other charges to tenants 1,365 1,321 2,740 2,595 Interest income 62 49 121 101 -------- -------- -------- -------- Total income 6,265 6,144 12,537 12,055 -------- -------- -------- -------- Operating expenses: Interest expense 4,062 3,962 8,167 8,031 Real estate taxes 1,234 1,172 2,465 2,344 Management fees 276 283 550 582 Common area maintenance expenses 411 447 1,071 1,012 Ground rent 107 102 272 260 Repairs and maintenance 73 140 158 293 General and administrative 201 196 296 327 Depreciation 1,788 1,792 3,556 3,574 Amortization 38 46 72 92 -------- -------- -------- -------- Total operating expenses 8,190 8,140 16,607 16,515 -------- -------- -------- -------- Operating loss (1,925) (1,996) (4,070) (4,460) Other expense: Net loss on disposition of properties (30) -- (30) (1,478) -------- -------- -------- -------- Loss before extraordinary gain (1,955) (1,996) (4,100) (5,938) Extraordinary gain: Forgiveness of wraparound mortgages payable on dispositions of properties -- -- -- 2,074 -------- -------- -------- -------- Net loss (1,955) (1,996) (4,100) (3,864) Partners' deficit: Beginning of period (30,486) (23,486) (28,341) (21,618) -------- -------- -------- -------- End of period ($32,441) ($25,482) ($32,441) ($25,482) ======== ======== ======== ======== Net loss per unit ($ 20.00) ($ 20.42) ($ 41.94) ($ 39.53) ======== ======== ======== ========
See accompanying notes to combined financial statements. 4 5 NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP (A LIMITED PARTNERSHIP) COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
SIX MONTHS ENDED JUNE 30, --------------------------- 2000 1999 --------------------------- Cash flows from operating activities: Net loss ($4,100) ($3,864) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 3,556 3,574 Amortization of discount 4,028 3,582 Net loss (gain) on disposition of properties including forgiveness of wraparound mortgages payable 30 (596) Increase in tenant accounts receivable (40) (139) (Increase) decrease in unbilled rent receivable (16) 299 Decrease in tenant leasing costs 9 10 Decrease in accounts receivable and other assets 413 65 Increase (decrease) in accounts payable and other liabilities 230 (276) Increase in deferred revenue 211 1,260 ------- ------- Net cash provided by operating activities 4,321 3,915 ------- ------- Cash flows from financing activities: Payments on wraparound mortgages (3,384) (3,263) Decrease in due to Pension Groups (189) -- Proceeds from other borrowings -- 350 Proceeds from additional debt 3,565 -- ------- ------- Net cash used in financing activities (8) (2,913) ------- ------- Cash flows from investing activities: Acquisition of properties (2,170) (270) Improvements to rental property (986) (858) ------- ------- Net cash used in investing activities (3,156) (1,128) ------- ------- Increase (decrease) in cash and cash equivalents 1,157 (126) Cash and cash equivalents: Beginning of period 4,843 5,650 ------- ------- End of period $ 6,000 $ 5,524 ======= =======
See accompanying notes to combined financial statements. 5 6 NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP (A LIMITED PARTNERSHIP) Notes to Combined Financial Statements (Unaudited) June 30, 2000 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, 1999. 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% collectively by EBL&S, Inc., the managing general partner, and Feldman International, Inc. ("FII"), the equity general partner. 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 7 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 49 properties at June 30, 2000 and 1999. In January and March 1999, portions of the Cahokia, Illinois property were conveyed to the underlying mortgage lender and sold, respectively, pursuant to the Plan of Reorganization of Cahokia Associates. In October 1999 and March 2000, the Minot, North Dakota property was sold and the Painesville, Ohio property was purchased, respectively, in a transaction structured to be a tax-free exchange in accordance with Section 1031 of the Internal Revenue Code. In June 2000, a portion of the Sparks, Nevada property was conveyed to the State of Nevada pursuant to a road widening project. Income increased for the three and six month periods ended June 30, 2000 versus June 30, 1999 by $121,000 and $482,000, respectively. The increase was primarily due to increased rental income arising from increased leasing activity, and increased other charges to tenants arising from increased real estate tax and common area maintenance expenses. The increase was partially offset by decreased rental income and other charges to tenants arising from the above property transactions. Operating expenses increased for the three and six month periods ended June 30, 2000 versus June 30, 1999 by $50,000 and $92,000, respectively. The increase in operating expenses was primarily due to increases in real estate tax expenses. There was a net loss on disposition of properties for the six month periods ended June 30, 2000 and June 30, 1999 of $30,000 and $1,478,000, respectively. This was due to the dispositions of a portion of the Sparks property in June 2000 and portions of the Cahokia property in January and March 1999, respectively. Forgiveness of wraparound mortgages payable on dispositions of properties for the six month period ended June 30, 1999 resulted from the dispositions of portions of the Cahokia property as described above. 7 8 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 operating activities for the six month period ended June 30, 2000 was $4,321,000. Net cash used in financing and investing activities was $8,000 and $3,156,000, respectively. As a result of the above, there was a $1,157,000 increase in cash for the six months ended June 30, 2000. During 1999 and 2000, NPAMLP had two outstanding lines of credit with E & H Properties, Inc. (E & H), a related party, under which E & H would advance up to $1,250,000 to NPAMLP for the purposes of making capital and tenant improvements to the properties (the NPAMLP Lines). The NPAMLP Lines include a $1,000,000 and a $250,000 line of credit. Pursuant to the NPAMLP Lines, the obligation of E & H to make advances to NPAMLP is at all times in the sole and absolute discretion of E & H. As of June 30, 2000, there were $770,000 of advances under the NPAMLP Lines. As of June 30, 2000, the third party underlying mortgages were current for all the properties except the properties located in Fairfield, Iowa; Huron, South Dakota; Wahpeton, North Dakota and Washington, Iowa. These properties are encumbered by the same mortgage and the Fairfield, Wahpeton and Washington properties were leased to the same tenant as of June 30, 2000. In June 1999 the loan matured and had a balloon payment due. The tenant at these properties is seeking to enforce a provision of its lease whereby NPAMLP, as landlord, would be required to convey the four properties at a price defined in the lease. NPAMLP disputes this interpretation of the lease and in July 1999, filed an action for declaratory judgement in the United States District Court for the Eastern District of Pennsylvania to resolve this matter. If NPAMLP were required to convey these four properties, it would result in a loss on disposition of properties of approximately $85,000. In March 2000, the third party underlying mortgage on the Ardmore, Oklahoma property was refinanced. The refinancing provided NPAMLP with approximately $1,492,000 in funds to be used for the purposes of making capital and tenant improvements to the Ardmore property and the other properties of NPAMLP. As of June 30, 2000, approximately $155,000 has been used for these purposes. As of June 30, 2000, NPAMLP was obligated for approximately $591,000 of capital commitments which are primarily for roof replacement, asphalt repairs, heating and air conditioning units and tenant fit-out costs. 8 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, 2000. 9 10 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, 2000 -------------------------------------------- By: EBL&S, Inc., its managing general partner --------------------------------------------- By: /s/ Edward B. Lipkin --------------------------------------------- Name: Edward B. Lipkin Title: Director By: Feldman International, Inc., its equity general partner --------------------------------------------- By: /s/ Robert McKinney --------------------------------------------- Name: Robert McKinney Title: Director 10