-----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, E5YPjcqBUp11MTeOKXMGyId/kTk+u1azzUiyMFbbc7RvXqPs+IlUVaCisWZ3Cuxc ScNYSQuZ9gcmb4/2+iBM6A== 0000355804-96-000003.txt : 19960514 0000355804-96-000003.hdr.sgml : 19960514 ACCESSION NUMBER: 0000355804-96-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL PROPERTY INVESTORS 5 CENTRAL INDEX KEY: 0000355637 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 222385051 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-11095 FILM NUMBER: 96561529 BUSINESS ADDRESS: STREET 1: 5665 NORTHSIDE DR N W STE 370 CITY: ATLANTA STATE: GA ZIP: 30328 BUSINESS PHONE: 4049169090 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10QSB 1 FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Quarterly or Transitional Report (As last amended by 34-32231, eff. 6/3/93.) U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (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, 1996 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period.........to......... Commission file number 0-11095 NATIONAL PROPERTY INVESTORS 5 (Exact name of small business issuer as specified in its charter) California 22-2385051 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 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 a) NATIONAL PROPERTY INVESTORS 5 BALANCE SHEET (Unaudited) (in thousands, except unit data) March 31, 1996
Assets Cash and cash equivalents $ 1,984 Other assets 1,287 Investment properties: Land $ 2,457 Buildings and related personal property 30,124 32,581 Less accumulated depreciation (21,070) 11,511 $ 14,782 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable and accrued expenses $ 472 Tenant security deposits 121 Mortgage notes payable 14,680 Partners' Capital (Deficit) Limited partners' (82,513 units issued and $ 725 outstanding) General partner (1,216) (491) $ 14,782 See Accompanying Notes to Financial Statements
b) NATIONAL PROPERTY INVESTORS 5 STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended March 31, 1996 1995 Revenues: Rental income $ 1,368 $ 1,356 Other income 112 80 Total revenues 1,480 1,436 Expenses: Operating 767 822 Interest 333 344 Depreciation 324 359 General and administrative 80 58 Total expenses 1,504 1,583 Net loss $ (24) $ (147) Net loss allocated to general partner (3%) $ (1) $ (4) Net loss allocated to limited partners (97%) (23) (143) $ (24) $ (147) Net loss per limited partnership unit $ (.28) $ (1.73) See Accompanying Notes to Financial Statements
c) NATIONAL PROPERTY INVESTORS 5 STATEMENT OF PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 82,513 $ 1 $ 41,257 $ 41,258 Partners' capital (deficit) at December 31, 1995 82,513 $ (1,215) $ 748 $ (467) Net loss for the three months ended March 31, 1996 -- (1) (23) (24) Partners' capital (deficit) at March 31, 1996 82,513 $ (1,216) $ 725 $ (491) See Accompanying Notes to Financial Statements
d) NATIONAL PROPERTY INVESTORS 5 STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 1996 1995 Cash flows from operating activities: Net loss $ (24) $ (147) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 324 359 Amortization of loan costs 16 20 Change in accounts: Other assets (237) (149) Accounts payable and accrued expenses 223 40 Tenant security deposit liabilities (3) (4) Net cash provided by operating activities 299 119 Cash flows from investing activities: Property improvements and replacements (68) (29) Net cash used in investing activities (68) (29) Cash flows from financing activities: Payments of mortgage notes payable (49) (43) Net cash used in financing activities (49) (43) Net increase in cash and cash equivalents 182 47 Cash and cash equivalents at beginning of period 1,802 1,325 Cash and cash equivalents at end of period $ 1,984 $ 1,372 Supplemental information: Cash paid for interest $ 339 $ 324 See Accompanying Notes to Financial Statements
e) NATIONAL PROPERTY INVESTORS 5 NOTES TO FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited financial statements of National Property Investors 5 (the "Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. 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 the Managing General Partner, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 1996, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1996. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-K for the year ended December 31, 1995. Certain reclassifications have been made to the 1995 information to conform to the 1996 presentation. Note B - Transactions with Affiliated Parties The Partnership has no employees and is dependent on NPI Equity Investments, Inc. ("NPI Equity" or the "Managing General Partner") and its affiliates for the management and administration of all partnership activities. The Partnership Agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following transactions with affiliates of Insignia Financial Group, Inc. ("Insignia"), National Property Investors, Inc.("NPI"), and affiliates of NPI were charged to expense in 1996 and 1995:
For the Three Months Ended March 31, 1996 1995 Property management fees (included in operating expenses) $ 70,000 $ 69,000 Reimbursement for services of affiliates (included in general and administrative and operating expenses) 72,000 53,000
For the period of January 19, 1996, to March 31, 1996, the Partnership insured its properties under a master policy through an agency and insurer unaffiliated with the Managing General Partner. An affiliate of the Managing General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the Managing General Partner who received payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the Managing General Partner by virtue of the agent's obligations is not significant. Note B - Transactions with Affiliated Parties (continued) Included in operating expenses for the three months ended March 31, 1995, are insurance premiums of approximately $51,000 which were paid to the Managing General Partner under a master insurance policy arranged for by the Managing General Partner. NPI Equity is the general partner of the Partnership. NPI Equity is a wholly- owned subsidiary of NPI. On August 17, 1995, the stockholders of NPI entered into an agreement to sell to IFGP Corporation, a Delaware corporation, an affiliate of Insignia, a Delaware corporation, all of the issued and outstanding common stock of NPI for an aggregate purchase price of $1,000,000. The closing of the transactions contemplated by the above mentioned agreement (the "Closing") occurred on January 19, 1996. Upon the Closing, the officers and directors of NPI and the Managing General Partner resigned and IFGP Corporation caused new officers and directors of each of those entities to be elected. Note C - Tenant-In-Common Property The Partnership currently owns The Village Apartments, as a tenant-in-common with National Property Investors 6 ("NPI 6"), an affiliated public limited partnership. NPI 6 acquired a 75.972 percent undivided interest with the Partnership owning the remaining 24.028 percent. The property is accounted for using the proportionate consolidation method. The financial statements and supplementary data reflect the Partnership's 24.028 percent proportionate share of historical cost of this property. The condensed, combined balance sheets of The Village Apartments and the Partnership's proportionate share of assets, liabilities and equity at March 31, 1996, and the condensed, combined statements of operations of The Village Apartments and the Partnership's proportionate share of revenues and expenses for the periods ended March 31, 1996 and 1995, are summarized as follows: (In thousands) PROPORTIONATE COMBINED SHARE March 31, March 31, 1996 1996 Total assets, primarily real estate $12,925 $ 3,046 Liabilities, primarily a mortgage payable $11,553 $ 2,776 Equity 1,372 270 Total liabilities and equity $12,925 $ 3,046
COMBINED PROPORTIONATE SHARE March 31, March 31, March 31, March 31, 1996 1995 1996 1995 Total revenues $ 1,073 $ 1,082 $ 257 $ 259 Operating and other expenses $ 600 $ 550 $ 143 $ 132 Depreciation 181 186 44 44 Mortgage interest 251 254 60 61 Total expenses 1,032 990 247 237 Net income $ 41 $ 92 $ 10 $ 22
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS The Partnership's investment properties consist of four apartment complexes. The following table sets forth the average occupancy of the properties for the three months ended March 31, 1996 and 1995: Average Occupancy Property 1996 1995 The Springs of Altamonte Apartments Altamonte Springs, Florida 96% 96% Oakwood Village at Lake Nan Apartments Winter Park, Florida 91% 97% Palisades Apartments Montgomery, Alabama 88% 94% The Village Apartments (1) Voorhees, New Jersey 91% 95% (1) This property was purchased as a tenancy in common with National Property Investors 6, an affiliated public partnership, which acquired a 75.972% undivided interest, with the Partnership owning the remaining 24.028%. The Managing General Partner attributes the decreases in occupancy at Oakwood Village and the Palisades to increases in rental rates at the respective properties. While occupancy at the properties declined in the first quarter of 1996, when compared to the first quarter of 1995, rental income at the properties increased. The Village experienced a decline in occupancy as the result of an extremely cold winter causing unusually high electric bills for the tenants. Turnover increased as tenants moved to competing properties which offered gas heating. Occupancy at The Village is expected to improve in the spring as the weather becomes warmer. The Partnership's net loss for the three months ended March 31, 1996, was approximately $24,000 compared to a net loss of approximately $147,000 for the corresponding period of 1995. The decrease in net loss is primarily attributable to an increase in other income and a decrease in operating expenses. The increase in other income is primarily due to increased interest income resulting from increased cash reserves held by the Partnership. Also contributing to the increase in other income was an increase in lease cancellation fees at all of the Partnership's properties in 1996. Operating expenses declined due to a reduction in maintenance expense at all of the Partnership's properties. Partially offsetting these decreases to expense was an increase in general and administrative expenses resulting from increased expense reimbursements related to the operation of two partnership administration offices during the first quarter of 1996 and the relocation of the partnership administration offices during the same period. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expense. As part of this plan, the Managing General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the Managing General Partner will be able to sustain such a plan. At March 31, 1996, the Partnership had unrestricted cash of $1,984,000, as compared to $1,372,000 at March 31, 1995. Net cash provided by operating activities increased primarily as a result of the decrease in net loss as discussed above. Also contributing to the increase in cash provided by operating activities was an increase in prepayments of rent. The increase in cash used in investing activities is due to increased property improvements and replacements in 1996. The Managing General Partner has extended to the Partnership a $500,000 line of credit. At the present time, the Partnership has no outstanding amounts due under this line of credit, and the Managing General Partner does not anticipate the need to borrow in the near future. Other than cash and cash equivalents the line of credit is the Partnership's only unused source of liquidity. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the various properties to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of $14,680,000 matures at various times with balloon payments due at maturity at which time the properties will either be refinanced or sold. Future cash distributions will depend on the levels of net cash generated from operations, property sales and the availability of cash reserves. No cash distributions were made in 1995 or during the first three months of 1996. At this time, it appears that the original investment objective of capital growth from the inception of the Partnership will not be attained and that investors will not receive a return of all of their invested capital. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: A Form 8-K dated January 19, 1996, was filed reporting the change in control of the Registrant. 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. NATIONAL PROPERTY INVESTORS 5 By: NPI EQUITY INVESTMENTS, INC. Its Managing General Partner By: /s/William H. Jarrard, Jr. William H. Jarrard, Jr. President and Director By: /s/Ronald Uretta Ronald Uretta Principal Financial Officer and Principal Accounting Officer Date: May 13, 1996 EX-27 2
5 This schedule contains summary financial information extracted from National Property Investors 5 1996 First Quarter 10-QSB and is qaulifed in it's entirety bty by reference to such 10-QSB filing. 0000355637 NATIONAL PROPERTY INVESTORS 5 1,000 3-MOS DEC-31-1996 MAR-31-1996 1,984 0 0 0 0 0 32,581 21,070 14,782 0 14,680 0 0 0 (491) 14,782 0 1,480 0 0 1,504 0 333 0 0 0 0 0 0 (24) (.28) 0 The Registrant has an unclassified balance sheet.
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