-----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, MJBjE2daDQ0Mq6IQFHKzACXJgMOK4q3QzdRHZHRo1PmbFSbKVwocONrAyjurWtVy iayTCCKW/ALDHV7p/ILf7A== 0000831663-96-000002.txt : 19961113 0000831663-96-000002.hdr.sgml : 19961113 ACCESSION NUMBER: 0000831663-96-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED INVESTORS GROWTH PROPERTIES CENTRAL INDEX KEY: 0000831663 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 431483928 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-17645 FILM NUMBER: 96658010 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FIANACIAL PLAZA STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 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 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period.........to......... Commission file number 0-17645 UNITED INVESTORS GROWTH PROPERTIES (Exact name of small business issuer as specified in its charter) Missouri 43-1483928 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Issuer's telephone number (864) 239-1000 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) UNITED INVESTORS GROWTH PROPERTIES CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) September 30, 1996 Assets Cash: Unrestricted $ 331 Restricted-tenant security deposits 82 Accounts receivable, net of allowance of $52 21 Escrows for taxes and insurance 122 Restricted escrow 50 Other assets 180 Investment properties: Land $ 1,979 Buildings and related personal property 15,066 17,045 Less accumulated depreciation (4,117) 12,928 $13,714 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 43 Tenant security deposits 82 Accrued taxes 88 Other liabilities 114 Mortgage notes payable 12,930 Partners' Capital (Deficit) General partner $ (1) Limited partners (39,297 units issued and outstanding) 458 457 $13,714 See Accompanying Notes to Consolidated Financial Statements b) UNITED INVESTORS GROWTH PROPERTIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended Nine Months Ended September 30, September 30, 1996 1995 1996 1995 Revenues: Rental income $ 762 $ 823 $2,253 $2,664 Other income 25 50 74 124 Total revenues 787 873 2,327 2,788 Expenses: Operating 244 287 703 888 General and administrative 17 24 56 59 Maintenance 74 104 221 253 Depreciation 139 163 412 512 Interest 304 375 914 1,193 Property taxes 74 89 237 292 Total expenses 852 1,042 2,543 3,197 Minority interest in net (income)loss of joint venture -- (45) 4 (18) Gain on disposition of investment property -- 165 -- 165 Net loss $ (65) $ (49) $ (212) $ (262) Net (loss) income allocated to general partner $ (1) $ 77 $ (2) $ 74 Net loss allocated to limited partners (64) (126) (210) (336) $ (65) $ (49) $ (212) $ (262) Net loss per limited partnership unit $(1.63) $(3.19) $(5.34) $(8.56) See Accompanying Notes to Consolidated Financial Statements
c) UNITED INVESTORS GROWTH PROPERTIES CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 39,297 $ -- $ 9,824 $ 9,824 Partners' capital at December 31, 1995 39,297 $ 1 $ 668 $ 669 Net loss for the nine months ended September 30, 1996 -- (2) (210) (212) Partners' capital (deficit) at September 30, 1996 39,297 $ (1) $ 458 $ 457 See Accompanying Notes to Consolidated Financial Statements
d) UNITED INVESTORS GROWTH PROPERTIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended September 30, 1996 1995 Cash flows from operating activities: Net loss $ (212) $ (262) Adjustments to reconcile net loss to net cash provided by operating activities: Minority interest in net (income) loss of joint venture (4) 18 Depreciation 412 512 Amortization of intangible assets 52 94 Gain on sale of property -- (165) Change in accounts: Restricted cash (7) 13 Accounts receivable 17 (28) Escrows for taxes and insurance 6 16 Other assets (16) (33) Accounts payable (5) (11) Tenant security deposit liabilities 9 (15) Accrued property taxes 43 -- Other liabilities 13 (38) Net cash provided by operating activities 308 101 Cash flows from investing activities: Property improvements and replacements (59) (74) Proceeds from sale of property -- 3,990 Receipts from restricted escrows 68 -- Deposits to restricted escrows -- (15) Net cash provided by investing activities 9 3,901 Cash flows from financing activities: Distributions from minority interest -- 18 Liquidating distribution to minority interest (61) -- Repayment of mortgage notes payable -- (3,874) Payments of mortgage notes payable (125) (135) Net cash used in financing activities (186) (3,991) Net increase in cash 131 11 Cash at beginning of period 200 247 Cash at end of period $ 331 $ 258 Supplemental disclosure of cash flow information: Cash paid for interest $ 873 $ 1,157 See Accompanying Notes to Consolidated Financial Statements e) UNITED INVESTORS GROWTH PROPERTIES CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements of United Investors Growth Properties ("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 General Partner (United Investors Real Estate, Inc.), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 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-KSB for the fiscal year ended December 31, 1995. Certain reclassifications have been made to the 1995 information to conform to the 1996 presentation. NOTE B - BASIS OF ACCOUNTING The financial statements include the Partnership's operating divisions, Terrace Royale Apartments, Deerfield Apartments, and Greystone South Plaza Center. During the second quarter of 1994, Cheyenne Woods Apartments was restructured into a lower-tier partnership, known as Cheyenne Woods United Investors, L.P. ("Cheyenne"), in which United Investors Growth Properties is the 99.99% limited partner. Although legal ownership of the asset was transferred to a new entity, United Investors Growth Properties retained substantially all economic benefits from the property. The Partnership consolidates its interest in Cheyenne (whereby all accounts of Cheyenne are included in the consolidated financial statements of the Partnership with intercompany accounts being eliminated). In addition, the Partnership owned a 60% interest in Renaissance Village Associates ("Renaissance"). The Partnership consolidated its interest in Renaissance (whereby all accounts of the joint venture are included in the Partnership's financial statements with intercompany accounts being eliminated). The minority partner's share of the joint venture's net assets were reflected as minority interest in the balance sheet of the Partnership. Earnings and losses attributable to the minority partner's ownership of the joint venture were reflected as a reduction or addition to net income of the Partnership. In the third quarter of 1995, Renaissance Village Apartments was sold by Renaissance. In accordance with the partnership agreement, net income and net loss (as defined in the Partnership agreement, income or loss of the Partnership determined without regard to gain or loss from sale) shall be allocated 1% to the General Partner and 99% to the limited partners. Distributions are allocated 1% to the General Partner and 99% to the limited partners. NOTE B - BASIS OF ACCOUNTING (CONTINUED) Gain from a sale shall be allocated as follows: (a) first to each partner who has a negative capital account, an amount equal to (or in proportion to if less than) such partner's negative capital account balance and (b) second, 99% to the limited partners and 1% to the General Partner, until each limited partner has been allocated an amount equal to (or in proportion to if less than) the excess, if any, of such limited partner's adjusted capital investment over his capital account. Loss from a sale shall be allocated as follows: (a) first to each partner who has a positive capital account, an amount equal to (or in proportion to if less than) such partner's positive capital account balance and (b) second, 99% to the limited partners and 1% to the General Partner. Anything in the Partnership Agreement to the contrary notwithstanding, the interests of the General Partner, in the aggregate, in each material item of income, gain, loss deduction and credit of the Partnership will be equal to at least 1% of each item at all times during the existence of the Partnership. During the second quarter of 1996, a final distribution was made to the joint venturers and the joint venture was liquidated. NOTE C - REPURCHASE OF UNITS The partnership agreement for the Partnership contains a provision which states that the General Partner shall purchase up to 10% of the limited partnership units outstanding at the fifth anniversary date of the last Additional Closing Date and become a limited partner with respect to such units. Pursuant to this provision, the General Partner accepted repurchase notices representing 10% of the limited partnership units and, during the fourth quarter of 1995, the transfer of 3,926 units was effected. NOTE D - TRANSACTIONS WITH AFFILIATED PARTIES The Partnership has no employees and is dependent on the General Partner and its affiliates for the management and administration of all partnership activities. The partnership agreement provides for payments to affiliates for property management services and for reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. Property management fees are included in operating expenses. The following payments were made to affiliates of the General Partner for the nine months ended September 30, 1996 and 1995: 1996 1995 (in thousands) Property management fees $123 $143 Reimbursement for services of affiliates 24 $23 NOTE D - TRANSACTIONS WITH AFFILIATED PARTIES (CONTINUED) The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the General Partner. An affiliate of the 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 General Partner who receives payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the General Partner by virtue of the agent's obligations is not significant. NOTE E - SALE OF INVESTMENT PROPERTY On August 30, 1995, Renaissance Village Apartments was sold to an unaffiliated party, Kauri Investments, Ltd. The Partnership recognized a gain on the sale of approximately $165,000. The minority interest share of this gain was approximately $66,000. The joint venture was liquidated during the second quarter of 1996 with the Partnership retaining approximately $92,000 and the minority interest holder receiving approximately $61,000 as liquidating dividends. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of three apartment complexes and a retail center. The following table sets forth the average occupancy of the properties for the nine month periods ended September 30, 1996 and 1995: Average Occupancy Property 1996 1995 Terrace Royale Apartments Bothell, Washington 97% 93% Cheyenne Woods Apartments North Las Vegas, Nevada 98% 97% Greystone South Plaza Center Lenexa, Kansas 77% 81% Deerfield Apartments Memphis, Tennessee 98% 98% The decrease in occupancy at Greystone South was due to tenants vacating the property resulting in a net decrease of 2,700 square feet occupied at September 30, 1996. The Partnership realized a net loss of $212,000 for the nine months ended September 30, 1996, of which $65,000 was realized during the third quarter. The corresponding net loss for 1995 was $262,000 and $49,000, respectively. The decrease in the net loss was primarily due to the sale of Renaissance Village in August of 1995. Renaissance generated $525,000 in revenues and $645,000 in expenses during the nine months ending September 30, 1995. The absence of this property explains the overall decreases in rental revenues and total expenses. Also contributing to the decreased net loss was an increase in rental revenues at the remaining properties resulting from increased occupancy and rental rate increases. The operating results, excluding the impact of the Renaissance Village sale, generated a decrease in net loss of $82,000. This is primarily due to the increase in rental revenues discussed above partially offset by an increase in maintenance expense of $9,000. The maintenance expense increase is attributable to landscaping and exterior improvements at Deerfield and Cheyenne Woods, respectively. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment 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 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 General Partner will be able to sustain such a plan. At September 30, 1996, the Partnership held unrestricted cash of $331,000 compared to $258,000 at September 30, 1995. Net cash provided by operating activities increased due to decreased expenses and interest payments (which offset the decreased revenues) resulting from the sale of Renaissance Village. Net cash provided by investing activities decreased as a result of the benefit of the proceeds from the sale of Renaissance Village in 1995. Net cash used in financing activities decreased due to the repayment of the Renaissance Village mortgage caused by the sale of the property in 1995. 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 $12,930,000 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. Other than the liquidating distribution related to Renaissance Village, no cash distributions were made in 1995 or during the first nine months of 1996. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibit 27 - Financial Data Schedule b) Reports on Form 8-K: None filed during the quarter ended September 30, 1996. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. UNITED INVESTORS GROWTH PROPERTIES (A Missouri Limited Partnership) By: United Investors Real Estate, Inc., a Delaware corporation, its General Partner By: /s/Carroll D. Vinson Carroll D. Vinson President By: /s/Robert D. Long, Jr. Robert D. Long, Jr. Vice President/CAO Date: November 12, 1996 EX-27 2
5 This schedule contains summary financial information extracted from United Investors Growth Properties 1996 Third Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000831663 UNITED INVESTORS GROWTH PROPERTIES 1,000 9-MOS DEC-31-1996 SEP-30-1996 331 0 73 52 0 0 17,045 4,117 13,714 0 12,930 0 0 0 457 13,714 0 2,327 0 0 2,543 0 914 0 0 0 0 0 0 (212) (5.34) 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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