-----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, FEbt3/9NIZEySpHaUwrYDO9Vraj9ucoXDl1qPwlpe/PnBp+ZbMYgagTWRLfv6v6m 8dEoIeX0Jb8FjHMNBzF2YQ== 0000721673-96-000007.txt : 19960515 0000721673-96-000007.hdr.sgml : 19960515 ACCESSION NUMBER: 0000721673-96-000007 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PREFERRED PROPERTIES FUND 80 CENTRAL INDEX KEY: 0000312903 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 942599964 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-09508 FILM NUMBER: 96564139 BUSINESS ADDRESS: STREET 1: 5665 NORTHSIDE DR NW STREET 2: STE 370 CITY: ATLANTA STATE: GA ZIP: 30328 BUSINESS PHONE: 4049169090 MAIL ADDRESS: STREET 1: POST & HEYMANN STREET 2: 5665 NORTHSIDE DR NW CITY: ATLANTA STATE: GA ZIP: 30328 FORMER COMPANY: FORMER CONFORMED NAME: MONTGOMERY PROPERTIES FUND 80 DATE OF NAME CHANGE: 19791024 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 March 31, 1996 or [ ] 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 0-9508 PREFERRED PROPERTIES FUND 80 (Exact name of small business issuer as specified in its charter) California 94-2599964 (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) (Zip Code) Issuer's telephone number (864) 239-1000 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 . PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) PREFERRED PROPERTIES FUND 80 CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) March 31, 1996 Assets Cash and cash equivalents $ 604 Other assets 75 Deferred costs, net 53 Investment properties: Land $ 1,059 Buildings and related personal property 4,286 5,345 Less accumulated depreciation (1,774) 3,571 $ 4,303 Liabilities and Partners' Deficit Liabilities Accrued expenses and other liabilities $ 157 Note payable 5,400 Promissory notes: Principal 250 Deferred interest payable 181 Partners' Deficit: General partners $ (882) Limited partners (19,997 units (803) (1,685) $ 4,303 See Accompanying Notes to Consolidated Financial Statements
b) PREFERRED PROPERTIES FUND 80 CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per unit data)
Three Months Ended March 31, 1996 1995 Revenues: Rental income $ 213 $ 199 Interest income 5 39 Total revenues 218 238 Expenses: Operating 29 21 Interest 137 134 Depreciation 28 28 General and administrative 51 68 Total expenses 245 251 Net loss $ (27) $ (13) Net loss allocated to general partners (5%) $ (1) $ (1) Net loss allocated to limited partners (95%) (26) (12) Net loss $ (27) $ (13) Net loss per limited partnership unit $ (1.30) $ (.60) See Accompanying Notes to Consolidated Financial Statements
c) PREFERRED PROPERTIES FUND 80 CONSOLIDATED STATEMENT OF PARTNERS' DEFICIT (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partners' Partners' Total Original capital contributions 19,997 $ 100 $ 19,997 $ 20,097 Partners' deficit at December 31, 1995 19,997 $ (881) $ (777) $ (1,658) Net loss for the three months ended March 31, 1996 -- (1) (26) (27) Partners' deficit at March 31, 1996 19,997 $ (882) $ (803) $ (1,685) See Accompanying Notes to Consolidated Financial Statements
d) PREFERRED PROPERTIES FUND 80 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 1996 1995 Cash flows from operating activities: Net loss $ (27) $ (13) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 28 28 Amortization 4 2 Change in accounts: Other assets (46) 82 Accrued expenses and other liabilities 52 (70) Net cash provided by operating activities 11 29 Cash flows from investing activities: Net cash provided by investing activities -- -- Cash flows from financing activities: Notes payable principal payments (15) (18) Joint venture partner distributions -- (9) Retirement of promissory notes -- (166) Purchase of minority interest in joint venture -- (10) Cash distributions to limited partners -- (1,301) Net cash used in financing activities (15) (1,504) Net decrease in cash and cash equivalents (4) (1,475) Cash and cash equivalents at beginning of period 608 2,498 Cash and cash equivalents at end of period $ 604 $ 1,023 Supplemental disclosure of cash flow information: Interest paid in cash during the period $ 137 $ 204 See Accompanying Notes to Consolidated Financial Statements
e) PREFERRED PROPERTIES FUND 80 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited financial statements of Preferred Properties Fund 80 (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 NPI Equity Investment II, Inc. ("NPI Equity" or 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 Preferred Properties Fund 80 has no employees and is dependent on 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 Insignia Financial Group, Inc. ("Insignia"), National Property Investors, Inc. ("NPI Inc."), and affiliates were charged to expense in 1996 and 1995:
For the Three Months Ended March 31, 1996 1995 (in thousands) Reimbursement for services of affiliates (included in general and administrative expenses) $35 $44
For the period from January 19, 1996, to March 31, 1996, the Partnership insured its property 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. On December 6, 1993, NPI Equity II became the managing partner of FRI and assumed operational control over Fox Capital Management Corporation ("FCMC"), an affiliate of FRI. As a result, NPI Equity II became responsible for the operation and management of the business and affairs of the Registrant and the other investment partnerships sponsored by FRI and/or FCMC. NPI Equity II is a wholly-owned subsidiary of NPI, Inc. The individuals who had served previously as partners of FRI and as officers and directors of FCMC contributed their general partnership interests in FRI to a newly formed limited partnership, Portfolio Realty Associates, L.P. ("PRA"), in exchange for limited partnership interests in PRA. In the foregoing capacity, such partners continue to hold indirectly certain economic interests in the Registrant and such other investment partnerships, but ceased to be responsible for the operation and management of the Registrant and such other partnerships. On August 17, 1995, the stockholders of NPI, Inc. 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, Inc. 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, Inc., FCMC and the Managing General Partner resigned and IFGP Corporation caused new officers and directors of each of those entities to be elected. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment property consists of one commercial complex. The property remains fully occupied by two tenants. The Partnership's net loss for the three months ended March 31, 1996, was approximately $27,000 versus an approximate $13,000 net loss for the same period of 1995. The increase in the net loss is attributable to a decrease in interest income and an increase in operating expense. The decrease in interest income is due to a reduction in cash reserves as compared to the first quarter of 1995. Operating expense increased due to an increase in tax expense in 1996. Partially offsetting the increase in net loss was a decrease in general and administrative expense due to a reduction in General Partner reimbursements for services of affiliates and legal fees. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of its investment property to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. 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 $604,000 as compared to $1,023,000 at March 31, 1995. Net cash provided by operating activities decreased primarily as a result of the increase in net loss as discussed above. Other assets increased due to increased tenant reimbursements, receivables and increased tax escrows which also resulted in a reduction in cash provided by operations. Net cash used in financing activities decreased due to the partnership not making distributions in the first quarter of 1996 and the retirement of promissory notes in 1995. The Partnership's interest in the joint venture was terminated in 1995 resulting in a reduction of cash used in financing activities 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 property 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 first mortgage indebtedness of $4,100,000 is amortized over 25 years with a balloon payment due April 1, 1997. The ground lease of $1,300,000 requires interest only payments and matures April 1, 1998. Future cash distributions will depend on the levels of cash generated from operations, a property sale, and the availability of cash reserves. Cash distributions totaling approximately $1,300,000 were paid in the first quarter of 1995. No cash distributions were paid during the first quarter of 1996. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: 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 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. PREFERRED PROPERTIES FUND 80 By: MONTGOMERY REALTY COMPANY - 80, Its General Partner By: FOX REALTY INVESTORS, the Managing General Partner of the General Partner By: NPI Equity Investments II, Inc., Managing Partner /s/William H. Jarrard, Jr. William H. Jarrard, Jr. President and Director /s/Ronald Uretta Ronald Uretta Principal Financial Officer and Principal Accounting Officer Date: May 14, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Preferred Properties Fund 80 1996 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000312903 PREFERRED PROPERTIES FUND 80 1,000 3-MOS DEC-31-1996 MAR-31-1996 604 0 0 0 0 0 5,345 1,774 4,303 0 5,400 0 0 0 (1,685) 4,303 0 218 0 0 245 0 137 0 0 (27) 0 0 0 (27) (1.30) 0 The Registrant has an unclassified balance sheet.
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