-----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, IIYWCw4HhzZQDkDmH9jKZIU622/StAZlpKDI1A9dnjvuT/c1k7JfINicfRSNUc4H pYpEfpFR+ubzB8etjAFT5w== 0000831663-97-000004.txt : 19970808 0000831663-97-000004.hdr.sgml : 19970808 ACCESSION NUMBER: 0000831663-97-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970807 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: 97653235 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 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 June 30, 1997 [ ] 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 0-17645 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) (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) UNITED INVESTORS GROWTH PROPERTIES CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 1997 Assets Cash and cash equivalents: Unrestricted $ 428 Restricted-tenant security deposits 84 Accounts receivable, net of allowance of $55 30 Escrows for taxes and insurance 104 Restricted escrow 50 Other assets 163 Investment properties: Land $ 1,979 Buildings and related personal property 15,124 17,103 Less accumulated depreciation (4,532) 12,571 $13,430 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 81 Tenant security deposits 84 Accrued taxes 91 Other liabilities 132 Mortgage notes payable 12,772 Partners' Capital (Deficit) General partner's $ (3) Limited partners' (39,297 units issued and outstanding) 273 270 $13,430 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 Six Months Ended June 30, June 30, 1997 1996 1997 1996 Revenues: Rental income $ 746 $ 739 $1,471 $1,491 Other income 38 29 75 49 Total revenues 784 768 1,546 1,540 Expenses: Operating 255 247 483 457 General and administrative 21 16 41 39 Maintenance 80 91 142 149 Depreciation 138 137 276 273 Interest 287 330 574 610 Property taxes 80 83 161 163 Total expenses 861 904 1,677 1,691 Minority interest in net loss of joint venture -- 4 -- 4 Net loss $ (77) $ (132) $ (131) $ (147) Net loss allocated to general partner (1%) $ (1) $ (1) $ (1) $ (1) Net loss allocated to limited partners (99%) (76) (131) (130) (146) $ (77) $ (132) $ (131) $ (147) Net loss per limited partnership unit $(1.93) $(3.33) $(3.31) $(3.72) 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's Partners' Total Original capital contributions 39,297 $ -- $ 9,824 $ 9,824 Partners' (deficit) capital at December 31, 1996 39,297 $ (2) $ 403 $ 401 Net loss for the six months ended June 30, 1997 -- (1) (130) (131) Partners' (deficit) capital at June 30, 1997 39,297 $ (3) $ 273 $ 270 See Accompanying Notes to Consolidated Financial Statements
d) UNITED INVESTORS GROWTH PROPERTIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, 1997 1996 Cash flows from operating activities: Net loss $ (131) $ (147) Adjustments to reconcile net loss to net cash provided by operating activities: Minority interest in net loss of joint venture -- (4) Depreciation 276 273 Amortization of loan costs, lease commissions and loan premiums (15) 36 Change in accounts: Restricted cash (6) (5) Accounts receivable (8) 17 Escrows for taxes and insurance 11 (32) Other assets (38) 9 Accounts payable 27 (2) Tenant security deposit liabilities 5 7 Accrued property taxes 49 49 Other liabilities 2 (3) Net cash provided by operating activities 172 198 Cash flows from investing activities: Property improvements and replacements (43) (38) Receipts from restricted escrows -- 68 Net cash (used in) provided by investing activities (43) 30 Cash flows from financing activities: Liquidating distribution to minority interest -- (61) Payments of mortgage notes payable (91) (82) Loan costs paid (9) -- Net cash used in financing activities (100) (143) Net increase in unrestricted cash and cash equivalents 29 85 Unrestricted cash and cash equivalents at beginning of period 399 200 Unrestricted cash and cash equivalents at end of period $ 428 $ 285 Supplemental disclosure of cash flow information: Cash paid for interest $ 593 $ 584 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 United Investors Real Estate, Inc. (the "General Partner"), a Delaware corporation, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 1997, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1997. 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, 1996. Certain reclassifications have been made to the 1996 information to conform to the 1997 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 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"). During the third quarter of 1995, Renaissance Village Apartments was sold. During the second quarter of 1996, a final distribution was made to the joint venturers and the joint venture was liquidated. (see "Note D" of the Notes to Consolidated Financial Statements). NOTE C - 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. The following payments were made to affiliates of the General Partner for the six months ended June 30, 1997 and 1996 (in thousands): 1997 1996 Property management fees (included in operating expenses) $79 $82 Reimbursement for services of affiliates (included in general and administrative expenses) 16 16 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 D - 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 distributions. 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 six month periods ended June 30, 1997 and 1996: Average Occupancy Property 1997 1996 Terrace Royale Apartments Bothell, Washington 94% 96% Cheyenne Woods Apartments North Las Vegas, Nevada 95% 98% Greystone South Plaza Center Lenexa, Kansas 78% 77% Deerfield Apartments Memphis, Tennessee 86% 98% The General Partner attributes the occupancy decrease at Deerfield to road construction in front of the apartment complex. The road construction was completed in 1997 and the General Partner anticipates occupancy will increase as a result. At June 30, 1997, occupancy had increased to 93%. The Partnership realized a net loss of approximately $131,000 for the six months ended June 30, 1997, compared to a net loss of approximately $147,000 for the corresponding period of 1996. The net loss for the three months ended June 30, 1997, was approximately $77,000 compared to a net loss of approximately $132,000 for the three months ended June 30, 1996. The decrease in the net loss is attributable to increased other income and decreased interest expense in 1997. Other income increased primarily due to lease cancellation fees at the residential properties. Interest expense decreased due to a reduction in interest on the Greystone mortgage note. Included in operating expense for the six months ended June 30, 1997, is approximately $13,000 of major repairs and maintenance comprised primarily of exterior building repairs and landscaping. Included in operating expense for the six months ended June 30, 1996 is approximately $36,000 of major repairs and maintenance comprised primarily of exterior building repairs and landscaping. 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 June 30, 1997, the Partnership had unrestricted cash and cash equivalents of $428,000 compared to $285,000 at June 30, 1996. Net cash provided by operating activities decreased primarily due to increased lease commission payments during 1997. Net cash provided by investing activities decreased primarily due to no restricted escrow receipts in 1997 compared to $68,000 in 1996. Net cash used in financing activities decreased due to a liquidating distribution being made to the minority interest in Renaissance Village in 1996. 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 $12,772,000 matures at various times with balloon payments due at maturity before 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 1996 or during the first six months of 1997. Currently, the General Partner is negotiating to refinance the mortgage note payable encumbering Cheyenne Woods. The current note has an interest rate of 10.50% and is scheduled to mature May of 1999. As a result of the refinancing, $9,000 of loan costs have been paid during the six months ended June 30, 1997. 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: None filed during the quarter ended June 30, 1997. SIGNATURES In accordance with 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. UNITED INVESTORS GROWTH PROPERTIES By: United Investors Real Estate, Inc. 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: August 7, 1997 EX-27 2
5 This schedule contains summary financial information extracted from United Investors Growth Properties 1997 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000831663 UNITED INVESTORS GROWTH PROPERTIES 1,000 6-MOS DEC-31-1997 JUN-30-1997 428 0 85 55 0 0 17,103 4,532 15,430 0 12,772 0 0 0 270 13,430 0 1,546 0 0 1,677 0 574 0 0 0 0 0 0 (131) (3.31) 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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