FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
(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, 2004
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to _____
For Quarter Ended March 31, 2004 Commission file number 0-17616
Realty Parking Properties L.P.
(Exact Name of Registrant as Specified in its Charter)
Delaware 52-1591575
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
300 East Lombard Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (410) 727-4083
(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______
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act).
Yes No X___
REALTY PARKING PROPERTIES L.P.
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets 1
Statements of Operations 2
Statements of Partners' Capital 3
Statements of Cash Flows 4
Notes to Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-8
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 8
Item 4. Controls and procedures 8
Part II. Other Information
Item 1. through Item 6. 9-12
Signatures 13
REALTY PARKING PROPERTIES L.P.
Balance Sheets
March 31,
2004 December 31,
(Unaudited) 2003
-------------------- -------------------
Assets
Property held for sale $ 793,083 $ 793,083
Cash and cash equivalents 523,899 551,224
Other assets 20,038 21,880
-------------------- -------------------
$ 1,337,020 $ 1,366,187
==================== ===================
Liabilities and Partners' Capital
Liabilities
Accounts payable and accrued expenses $ 37,489 $ 52,124
Due to affiliate 22,539 26,958
-------------------- -------------------
60,028 79,082
-------------------- -------------------
Partners' Capital
General Partner (202) -
Assignee and Limited Partnership
Interests - $25 stated value per
unit, 1,909,127 units outstanding 1,277,094 1,287,005
Subordinated Limited Partner 100 100
-------------------- -------------------
1,276,992 1,287,105
-------------------- -------------------
$ 1,337,020 $ 1,366,187
==================== ===================
See accompanying notes to financial statements
1
REALTY PARKING PROPERTIES L.P.
Statements of Operations
(Unaudited)
Three Months Ended
March 31, March 31,
2004 2003
-----------------------------------------
Revenues
Interest income $ 785 $ 2,072
-------------------- -------------------
Expenses
Administrative, including amounts
to related party 20,346 39,210
Professional fees 6,500 6,500
-------------------- -------------------
26,846 45,710
-------------------- -------------------
Loss from continuing operations (26,061) (43,638)
Discontinued operations 15,948 229,395
-------------------- -------------------
Net earnings (loss) $ (10,113) $ 185,757
==================== ===================
Net earnings (loss) per unit of assignee
and limited partnership interest-basic
Continuing operations $ (0.01) $ (0.02)
Discontinued operations - 0.12
-------------------- -------------------
Total $ (0.01) $ 0.10
==================== ===================
See accompanying notes to financial statements
2
REALTY PARKING PROPERTIES L.P.
Statements of Partners' Capital
Three Months Ended March 31, 2004 and 2003
(Unaudited)
Assignee
and Limited Subordinated
Partnership Limited General
Interests Partner Partner Total
-----------------------------------------------------------------------------------
Balance at December 31, 2003 $ 1,287,005 $ 100 $ - $ 1,287,105
Net earnings (loss) (9,911) - (202) (10,113)
------------------ ------------------- -------------------- -------------------
Balance at March 31, 2004 $ 1,277,094 $ 100 $ (202) $ 1,276,992
================== =================== ==================== ===================
Balance at December 31, 2002 $ 14,417,101 $ 100 $ - $ 14,417,201
Net earnings 182,042 - 3,715 185,757
Distribution to partners-operations (266,206) - (5,433) (271,639)
------------------ ------------------- -------------------- -------------------
Balance at March 31, 2003 $ 14,332,937 $ 100 $ (1,718) $ 14,331,319
================== =================== ==================== ===================
See accompanying notes to financial statements
3
REALTY PARKING PROPERTIES L.P.
Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31, March 31,
2004 2003
--------------------------------------
Cash flows from operating activities
Net earnings (loss) $ (10,113) $ 185,757
Adjustments to reconcile net earnings (loss) to net
cash provided by (used in) operating activities
Depreciation - 8,980
Changes in assets and liabilities
Decrease (increase) in other assets 1,842 (3,769)
Decrease in accounts payable and
accrued expenses (14,635) (9,371)
Decrease in due to affiliate (4,419) (1,766)
-------------------- -------------------
Net cash provided by (used in) operating activities (27,325) 179,831
-------------------- -------------------
Cash flows from financing activities -
distribution to partners - (271,639)
-------------------- -------------------
Net decrease in cash and cash equivalents (27,325) (91,808)
Cash and cash equivalents
Beginning of period 551,224 687,402
-------------------- -------------------
End of period $ 523,899 $ 595,594
==================== ===================
See accompanying notes to financial statements
4
REALTY PARKING PROPERTIES L.P.
Notes to Financial Statements
March 31, 2004
(Unaudited)
Note 1 - The Partnership and Basis of Preparation
The accompanying financial statements of Realty Parking Properties L.P. (the
"Partnership") do not include all of the information and note disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America. The unaudited
interim financial statements reflect all adjustments, which are, in the opinion
of management, necessary for a fair statement of financial position, operating
results and cash flows for the interim periods presented. All such adjustments
are of a normal recurring nature. The unaudited interim financial information
should be read in conjunction with the financial statements contained in the
2003 Annual Report.
Note 2 - Cash and Cash Equivalents
The Partnership considers all short-term investments with maturities of three
months or less at dates of purchase as cash equivalents. Cash and cash
equivalents consist of cash and money market accounts and are stated at cost,
which approximated market value at March 31, 2004 and December 31, 2003.
Note 3 - Property Held for Sale and Discontinued Operations
At March 31, 2004 and December 31, 2003, the Partnership classified its
remaining property in Kansas City as held for sale in the balance sheet, as
noted below. In accordance with the provisions of SFAS No. 144, the results of
operations of this property and the five properties sold during 2003 are
reported in discontinued operations. Income from discontinued operations is
summarized as follows:
[OBJECT OMITTED]
The Partnership's Kansas City property is subject to a contract of sale. The
prospective buyer is in its due diligence period and there is no assurance that
the contract will result in a sale. The Partnership's investment in the property
is $793,083, net of depreciation of $385,796 and an impairment loss of $906,500,
recorded in 2003 to reflect the fair value of the property less estimated
expenses associated with the sale.
5
REALTY PARKING PROPERTIES L.P.
Notes to Financial Statements
March 31, 2004
(Unaudited)
Note 4 - Related Party Transactions
The General Partner earned property management fees of $612 and $4,511 (1% of
the gross revenues of the properties and other sources of income) during the
three months ended March 31, 2004 and 2003, respectively (which were recorded in
discontinued operations). The General Partner was reimbursed for certain costs
incurred relating to administrative and professional services of the Partnership
totaling $22,539 and $24,070 for the three months ended March 31, 2004 and 2003,
respectively.
Note 5 - Net Earnings(Loss) Per Unit of Assignee and
Limited Partnership Interest
Net earnings (loss) per unit of assignee and limited partnership interest is
disclosed on the statements of operations and is based upon 1,909,127 units
outstanding.
6
REALTY PARKING PROPERTIES L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At March 31, 2004, the Partnership had a working capital position that
included cash and cash equivalents of $523,899, and accounts payable and accrued
expenses of $60,028. Cash and cash equivalents decreased $27,325 during the
first quarter of 2004, as a result of operating activities.
The Partnership has suspended distributions pending the sale of its
final property in Kansas City. A final liquidating distribution will be made
upon completion of its sale.
Results of Operations
In accordance with the provisions of Statement of Financial Accounting
Standards No. 144 "Accounting for the Impairment or Disposal of Long-Lived
Assets" (SFAS No. 144), the statements of operations present income from
continuing operations and from discontinued operations. Discontinued operations
include the operating results of the Kansas City property held for sale at March
31, 2004, and the five properties sold in 2003. The prior year amounts for these
properties have been reclassified to discontinued operations as required by SFAS
No. 144. The following discussion and analysis of the results of operations
conforms to this presentation in the statements of operations.
Continuing Operations
Continuing operations includes interest earned on cash and cash
equivalents and administrative expenses and professional fees not directly
identifiable with a specific property sold or held for sale.
Expenses incurred during the three months ended March 31, 2004 totaled
$26,846 reflecting a decrease of $18,864 from the same period in 2003. The
decrease is the result of lower administrative expenses, as a result of the five
property sales in 2003.
Discontinued Operations
Discontinued operations reflect parking revenue from the Partnership's
property in Kansas City property held for sale at March 31, 2004 and the five
properties sold in 2003.
Parking lot revenue of $27,500 was earned during the three months ended
March 31, 2004, reflecting a decrease of $236,886 from the same period in 2003.
The decrease is the result of the five property sales in 2003.
Expenses incurred during the three months ended March 31, 2004 totaled
$11,552 reflecting a decrease of $23,439 from the same period in 2003. The
decrease is the result of the five property sales in 2003.
The Partnership's Kansas City property is subject to a contract of
sale. The prospective buyer is in its due diligence period and there is no
assurance that the contract will result in a sale. The Partnership's investment
in the property is $793,083, net of depreciation of $385,796 and an impairment
loss of $906,500, recorded in 2003 to reflect the fair value of the property
less estimated expenses associated with the sale.
7
REALTY PARKING PROPERTIES L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Critical Accounting Policies
Critical accounting policies are those that are both important to the
presentation of financial condition and results of operations and require
management's most difficult, complex or subjective judgments. The Partnership's
critical accounting policy relates to the evaluation of impairment of long-lived
assets.
If events or changes in circumstances indicate that the carrying value
of a property to be held and used may be impaired, a recoverability analysis is
performed based on estimated undiscounted cash flows to be generated from the
property in the future. If the analysis indicates that the carrying value is not
recoverable from future cash flows, the property is written down to its
estimated fair value and an impairment loss is recognized. If the Partnership
decides to sell a property, it evaluates the recoverability of the carrying
amount of the assets. If the evaluation indicates that the carrying value is not
recoverable from estimated net sales proceeds, the property is written down to
estimated fair value less costs to sell and an impairment loss is recognized.
The estimates of cash flows and fair values of the properties are based on
current market conditions and consider matters such as each of the parking
properties' parking rates, operating expenses and/or the terms of a net lease
with a parking operator, recent sales data for comparable properties and, where
applicable, contracts or the results of negotiations with purchasers or
prospective purchasers. These estimates are subject to revision as market
conditions, and the Partnership's assessment of them, change.
PART I. FINANCIAL INFORMATION
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Inapplicable
Item 4. Controls and Procedures
An evaluation was performed under the supervision of management,
including the Chief Executive Officer and Chief Financial Officer of
the General Partner, of the effectiveness as of March 31, 2004 of the
design and operation of disclosure controls and procedures as defined
in Rule 13a-15 of the rules promulgated under the Securities and
Exchange Act of 1934, as amended. Based on that evaluation, the Chief
Executive Officer and Chief Financial Officer of the General Partner
concluded that the design and operation of these disclosure controls
and procedures were effective. No changes in the Partnership's
internal control over financial reporting occurred during the last
fiscal quarter that have materially affected, or are reasonably likely
to materially affect, the Partnership's internal control over
financial reporting.
8
REALTY PARKING PROPERTIES L.P.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Inapplicable
Item 2. Changes in Securities, Use of Proceeds and Issuer
Purchaser of Equity Securities
Inapplicable
Item 3. Defaults upon Senior Securities
Inapplicable
Item 4. Submission of Matters to a Vote of Security Holders
Inapplicable
Item 5. Other Information
Inapplicable
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
(31.1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
(31.2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
(32) Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
b. Reports on Form 8-K:
None
9
Exhibit 31.1
REALTY PARKING PROPERTIES L.P.
Certification of Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, John M. Prugh, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Realty Parking
Properties L.P.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures [as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)] for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: 5/11/04 By: /s/ John M. Prugh
John M. Prugh
Chief Executive Officer
Realty Parking Company, Inc.
General Partner
10
Exhibit 31.2
REALTY PARKING PROPERTIES L.P.
Certification of Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Timothy M. Gisriel, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Realty Parking
Properties L.P.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures [as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)] for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: 5/11/04 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Chief Financial Officer
Realty Parking Company, Inc.
General Partner
11
Exhibit 32
REALTY PARKING PROPERTIES L.P.
CERTIFICATION PURSUANT TO
18 U.S.C. ss. 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the filing of Realty Parking Properties L.P.'s (the
"Partnership") Quarterly Report on Form 10-Q for the period ending September 30,
2003 with the Securities and Exchange Commission on the date hereof (the
"Report"), We certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and
(2) The information contained in the Report fairly
presents, in all material respects, the financial
condition and results of operations of the
Partnership.
Date: 5/11/04 By: /s/ John M. Prugh
John M. Prugh
Chief Executive Officer
Realty Parking Company, Inc.
General Partner
Date: 5/11/04 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Chief Financial Officer
Realty Parking Company, Inc.
General Partner
12
REALTY PARKING PROPERTIES L.P.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
REALTY PARKING PROPERTIES L.P.
DATE: 5/11/04 By: /s/ John M. Prugh
John M. Prugh
President and Director
Realty Parking Company, Inc.
General Partner
DATE: 5/11/04 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Realty Parking Company, Inc.
General Partner
13