-----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, CvOfOSNN/FaRigkvb25bD09jxoVc99OpJoS7+uyUEAKhUBDIIvJe4i9EaUQkwzRv kxJzh219zld6wT4RnbNDog== 0000727745-98-000007.txt : 19981116 0000727745-98-000007.hdr.sgml : 19981116 ACCESSION NUMBER: 0000727745-98-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LDP III CENTRAL INDEX KEY: 0000727745 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942911983 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-13559 FILM NUMBER: 98746396 BUSINESS ADDRESS: STREET 1: P O BOX 130 CITY: CARBONDALE STATE: CO ZIP: 81623 BUSINESS PHONE: 3039638007 MAIL ADDRESS: STREET 1: PO BOX 130 CITY: CARBONDALE STATE: CO ZIP: 81623 FORMER COMPANY: FORMER CONFORMED NAME: LANDSING DIVERSIFIED PROPERTIES III DATE OF NAME CHANGE: 19910331 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended September 30, 1998 Commission File Number: 0-13559 LDP-III (Exact name of registrant as specified in its governing instruments) California 94-2911983 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) P. O. Box 130, Carbondale, Colorado 81623 (Address of principal executive offices) (970) 963-8007 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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 LDP-III CONSOLIDATED BALANCE SHEET, SEPTEMBER 30, 1998 AND DECEMBER 31, 1997 (Unaudited) (Dollars in thousands except Units)
September 30, December 31, 1998 1997 INVESTMENTS IN REAL ESTATE: Rental properties (including property for sale) $ 6,061 $ 5,985 Accumulated depreciation (2,969) (2,817) Rental properties - net 3,092 3,168 CASH AND CASH EQUIVALENTS (including interest bearing deposits of $200 in 1998 and $1,947 in 1997) 204 2,008 OTHER ASSETS: Accounts receivable 12 37 Prepaid expenses and deposits 4 1 Deferred organization costs, loan costs and leasing commissions (net of accumulated amortization of $384 in 1998 and $359 in 1997) 74 90 Total other assets 90 128 TOTAL $ 3,386 $ 5,304 LIABILITIES AND PARTNERS' EQUITY LIABILITIES: Notes payable $ 2,407 $ 2,452 Accounts payable 0 0 Other liabilities 83 133 Total liabilities 2,490 2,536 PARTNERS' EQUITY (Deficit) General Partners 0 0 Limited Partners 896 2,768 TOTAL $ 3,386 $ 5,304 Equity Units Authorized - Limited Partners 37,156 37,156 - General Partners 0 0 Equity Units Outstanding - Limited Partners 37,136 37,136 - General Partners 0 0 The accompanying notes are an integral part of the financial statements.
DP-III CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In thousands except per share amounts)
Three Months Ended Nine Months Ended September 30 September 30 1998 1997 1998 1997 REVENUE: Rental $ 172 $ 368 $ 493 $ 925 Interest 2 5 35 14 Total revenue 174 373 528 939 EXPENSE: Interest 56 124 168 426 Operating 83 92 234 267 Depreciation and amortization 61 82 177 239 General and administrative 38 33 148 140 Total expense 238 331 727 1,072 NET INCOME (LOSS) - Limited Partners $ (64) $ 42 (199) (133) - General Partners 0 0 0 0 NET INCOME (LOSS) PER PARTNERSHIP UNIT - Limited Partners (2) 1 (5) (4) - General Partners 0 0 0 0 The accompanying notes are an integral part of the financial statements.
LDP-III CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND THE YEAR ENDED DECEMBER 31, 1997 (Unaudited) (Dollars in thousands)
..LIMITED PARTNERS.. NUMBER OF GENERAL TOTAL PARTNERSHIP PARTNER PARTNERS' UNITS AMOUNT AMOUNT EQUITY BALANCE, JANUARY 1, 1997 37,136 $ (70) $ 0 $ (70) Income - 1997 2,838 2,838 BALANCE, DECEMBER 31, 1997 37,136 2,768 0 2,768 Net loss (199) (199) Distribution (1,671) (1,671) BALANCE, SEPTEMBER 30, 1998 37,136 $ 896 $ 0 $ 896 The accompanying notes are an integral part of the financial statements.
LDP-III CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (Unaudited) (In thousands)
1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (199) $ (133) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation 177 202 Change in operating assets and liabilities: Increase in accounts receivable 25 (7) Increase in prepaid expenses and deposits (3) (3) Increase in accounts payable 0 30 Increase in other liabilities (2) 33 Net cash provided by (used in) operating activities (2) 122 CASH FLOWS FROM INVESTING ACTIVITIES: Decrease in short term investments 0 99 Capital expenditures and construction (78) (43) (Increase )decrease in deferred expenses (6) (99) Net cash used in investing activities (84) (43) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on notes payable (45) (33) Net (distributions) contributions (1,672) 0 Net cash used in financing activities (1,717) (33) Increase (decrease) in cash and cash equivalents (1,804) 46 Cash and cash equivalents at beginning of period 2,008 85 Cash and cash equivalents at end of period $ 204 $ 131 The accompanying notes are an integral part of the financial statements.
LDP-III FINANCIAL NOTES 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited consolidated financial statements should be read in conjunction with the Partnership's 1997 Annual Report. These consolidated statements have been prepared in accordance with the instructions to the Securities and Exchange Commission Form 10-Q and 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, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated results of operations for the nine months ended September 30, 1998 and 1997, are not necessarily indicative of the results that may be expected for the year ending December 31, 1998. Organization - LDP-III (the "Partnership") is a limited partnership organized under the laws of the state of California for the purpose of acquiring, operating, holding for investment, and ultimately selling income producing real estate. Landsing Partners-III (the "General Partner") is a California General Partnership whose partners are Landsing Equities Corporation and Partners '84. LDP-III was formed on August 30, 1983, and shall continue until December 31, 2033, unless sooner terminated. The Partnership commenced operations on December 9, 1983, with the acquisition of the first property. The Partnership owns one building located in Idaho, which is a commercial office building with numerous tenants. Investment in Subsidiary - On December 3, 1992 the Partnership transferred two of its properties, the 533 Cabot Building and the 391 Forbes Building to its wholly owned subsidiary, LDP-III Realty Service Corporation, which filed bankruptcy under Chapter 11 of the Federal Bankruptcy Code. During 1993, the U.S. Bankruptcy case was dismissed and the 533 Cabot Building was disposed of. In 1996, 391 Forbes Building was sold and the subsidiary dissolved. For financial reporting purposes the Partnership consolidated the operation of the subsidiary with that of the Partnership. All significant intercompany transactions and balances have been eliminated. Rental Properties - Rental properties are stated at the lower of cost or recoverable value. Depreciation is computed by the straight- line method over estimated useful lives ranging from five to forty years. Tenant improvements are amortized over the lives of the related tenant leases which range from one to ten years. Major additions are capitalized at cost, while maintenance and repairs which do not improve or extend the life of the respective assets are expensed currently. When assets are retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts, and any gain or loss on disposal is included in the results of operations. Loan Costs and Leasing Commissions - Amounts paid to obtain loans are deferred and amortized over the lives of the related notes payable, which range from four to ten years. Leasing commissions are amortized over the lives of the tenant leases which range from one to ten years. Cash and Cash Equivalents - The Partnership considers all highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents. Short-Term Investments - The Partnership invests in short-term federally insured certificates of deposits which mature on a date in excess of three months from the date of purchase. The cost of these investments approximates market value. Income Taxes - No provision for Federal or state income taxes has been made in the financial statements because these taxes are the obligation of the partners. Net Loss Per Partnership Unit - Net loss per Partnership unit is based on weighted average units outstanding after giving effect to net income (loss) allocated to the General Partner. Concentrations of Credit Risk - The Partnership's financial instruments that are exposed to concentrations of credit risk consist primarily of its cash and cash equivalents. The Partnership's cash and cash equivalents are maintained in various accounts in FDIC insured institutions. This investment policy limits the Partnership's exposure to concentrations of credit risks. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Impairment of Long-Lived Assets - The Partnership adopted Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of" during 1996. SFAS No. 121 requires that long-lived assets and certain identifiable intangibles to be held and used or disposed of by an entity and be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. During 1997 and 1996, the Partnership determined that no impairment loss need be recognized for applicable assets of continuing operations. Accounting Pronouncements - In June 1996, the Financial Accounting Standards Board issued Statement No. 125 Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities. This Statement is effective for transactions occurring after December 31, 1996. However, transactions such as securities lending, repurchase agreements, dollar rolls, and similar secured financing arrangements are not subject to the provisions of SFAS No. 125 until January 1, 1998. The standard provides that, following a transfer of financial assets, an entity is to recognize the financial and servicing assets it controls and the liabilities it has incurred, derecognize financial assets when control has been surrendered and derecognize liabilities when extinguished. The adoption of SFAS No. 125 had no impact on the Partnership's financial statements. The impact of the delayed provisions is also not expected to be material. In June 1997, the FASB issued Statement No. 130 Reporting Comprehensive Income (SFAS No. 130) and Statement No. 131, Disclosures about Segments of an Enterprise and Related Information (SFAS No. 131) Each of the new statements is effective for periods beginning after December 15, 1997, and requires that certain additional information be reported in the financial statements and related notes. The Partnership will adopt these SFAS in 1998 but does not expect an impact on its 1998 financial statements. Year 2000 - The Partnership is aware of the Year 2000 conversion issue. It is Management's assertion that the current accounting system utilized by the Partnership has the capability to accommodate the Year 2000 issue. Adequate Capital Resources - The General Partner believes that despite the fact the Partnership has continued to operate at a net loss before gain from the sale of properties, the Partnership has adequate capital resources to continue operations. Operating results at Jefferson Place in Idaho, the only remaining property, indicate the property is operating at a positive cash flow position. The California property, 1201 Cadillac, was sold for profit in December 1997. Proceeds of the sale increased cash reserves and allowed the Partnership to make a cash distribution to limited partners in March 1998. The General Partner believes that due to the disposition of certain properties and the stability of the remaining property in the portfolio, that operations will generate positive cash flow. In the event the Partnership must liquidate its assets, management believes the costs of the assets will be recovered and excess funds would be available after satisfaction of all liabilities. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION LDP-III is a California limited partnership formed in August 1983. The Partnership's business consists of a single segment -- equity investments in leveraged income-producing real estate. The Partnership's current portfolio consists of fee title ownership of one property. The Partnership's property investment is: Jefferson Place Office Building, Boise. Jefferson Place has been placed on the market for sale. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1998, the Partnership's consolidated cash and cash equivalents balance totaled $204,000. Cash not required for current operations is placed in federally insured financial instruments and money market funds which can be liquidated as needed. The Partnership has invested $99,000 in short-term federally insured certificates of deposit which mature on a date less than 90 days or 3 months from the date of purchase. Due to this characteristic, these deposits are classified as "cash equivalents." During the nine months ended September 30, 1998, the Partnership experienced a net decrease in cash and cash equivalents of $1,804,000. As of September 30, 1998, cash and cash equivalents totaled $204,000 versus a balance of $2,008,000 December 31, 1997. Management believes the cash flow from operations of the remaining property, Jefferson Place, will be sufficient to cover the operating costs of the Partnership. In March, 1998, the Partnership paid a distribution of $45 per unit to unit holders of record on February 28, 1998. RESULTS OF OPERATIONS The following represents the operations of the property held continuously during the first nine months of 1998 and 1997:
1998 1997 % Change Rental Revenue $ 493 $ 498 N/A Operating Expense 146 142 + 3% Net Operating Income 347 356 - 2% Interest Expense 168 176 - 5%
Overall, revenues decreased slightly for the nine months ended September 30, 1998 relative to the same period in 1997. The decrease was due to the loss of one tenant at Jefferson Place. The Jefferson Place Office Building is currently 96% occupied. Property operating expenses increased 3% for the nine months ended September 30, 1998 relative to the same period in 1997. The Partnership general and administrative expense increased $8,000 in 1998 relative to the same period in 1997 due to marketing the property for sale. Jefferson Place is currently under contract to be sold. There is no guarantee that such sale will occur as the Seller has a financing contingency. If the property does sell, under the terms of the current sales contract, the Partnership will be dissolved. INFLATION The Partnership's rental revenues in certain overbuilt real estate markets, including Boise and the San Francisco Bay Area, have not followed the overall inflationary trends of the economy. In the future, the General Partner believes market rate rents in those areas will more closely follow or exceed inflation. Operating costs for properties in most of the Partnership's markets have continued to follow inflationary trends. It is not expected that the Partnership will be materially impacted by inflationary forces in the near term. PART II. OTHER INFORMATION All items in Part II have been omitted since they are inapplicable or the answer is negative. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LDP-III Date: November 15, 1998 /s/ Gary K. Barr Gary K. Barr, President Landsing Equities Corporation Managing Partner of the General Partner Landsing Partners-III EX-27 2 ART. 5 FDS SEP-30-98
5 1000 9-MOS DEC-31-1998 SEP-30-1998 204 0 12 0 0 78 6,061 (2,969) 3,386 83 0 0 0 0 896 3,386 0 528 0 0 559 0 168 0 0 0 0 0 0 (199) 0 0
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