-----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, VYek0urqKZJXyNnIJa8U2NM+TnFHR6LRl0jgTpXBYWxv8Z0KJHotALaSTs36N88+ YsKGbZMnF9zzrv9B0P6rJQ== 0000914317-97-000569.txt : 19971117 0000914317-97-000569.hdr.sgml : 19971117 ACCESSION NUMBER: 0000914317-97-000569 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTEGRATED RESOURCES HIGH EQUITY PARTNERS SERIES 85 CENTRAL INDEX KEY: 0000730067 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 133239107 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14438 FILM NUMBER: 97721708 BUSINESS ADDRESS: STREET 1: 411 WEST PUTNAM AVE CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: 2038627000 MAIL ADDRESS: STREET 1: 411 WEST PUTNAM AVENUE CITY: GREENWICH STATE: CT ZIP: 06830 FORMER COMPANY: FORMER CONFORMED NAME: HIGH EQUITY PARTNERS SERIES 85 DATE OF NAME CHANGE: 19850626 FORMER COMPANY: FORMER CONFORMED NAME: RESOURCES HIGH EQUITY PARTNERS DATE OF NAME CHANGE: 19850203 10-Q 1 FORM 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997 Commission file number 0-14438 INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 A CALIFORNIA LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) CALIFORNIA 13-3239107 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 411 West Putnam Avenue, Greenwich, CT 06830 (Address of principal executive offices) (203) 862-7444 (Registrant's telephone number, including area code) None (Former name, former address and former fiscal year, if changed since last report) Indicate by check 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 [ ] INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 INDEX Part I. Financial Information: Balance Sheets - September 30, 1997 and December 31, 1996 Statements of Operations -- Three and Nine Months Ended September 30, 1997 and 1996 Statement of Partners' Equity -- Nine Months Ended September 30, 1997 Statements of Cash Flows -- Nine Months Ended September 30, 1997 and 1996 Notes to Financial Statements Management's Discussion and Analysis of Financial Condition and Results of Operations Part II. Other Information: Legal Proceedings, Exhibits and Reports on Form 8-K
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 BALANCE SHEETS September 30, December 31, 1997 1996 ----------- ----------- ASSETS Real estate ................................ $32,064,436 $32,154,253 Cash and cash equivalents .................. 5,524,704 4,870,517 Other assets ............................... 2,165,531 2,107,211 Receivables ................................ 291,813 158,204 ----------- ----------- $40,046,484 $39,290,185 =========== =========== LIABILITIES AND PARTNERS' EQUITY Accounts payable and accrued expenses ...... $ 1,540,421 $ 1,061,732 Distributions payable ...................... 395,799 252,638 Due to affiliates .......................... 280,185 1,164,121 ----------- ----------- 2,216,405 2,478,491 ----------- ----------- Commitments and contingencies PARTNERS' EQUITY: Limited partners' equity (400,010 units issued and outstanding) ..... 35,937,623 34,970,158 General partners' equity .............. 1,892,456 1,841,536 ----------- ----------- 37,830,079 36,811,694 ----------- ----------- $40,046,484 $39,290,185 =========== ===========
See notes to financial statements
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 STATEMENTS OF OPERATIONS For the Three Months Ended For the Nine Months Ended September 30, September 30, -------------------------- ------------------------- 1997 1996 1997 1996 ---------- ---------- ---------- ---------- Rental Revenue ......................... $2,172,283 $2,157,450 $6,926,885 $6,721,339 ---------- ---------- ---------- ---------- Costs and Expenses: Operating expenses ................ 900,086 854,081 2,629,694 2,537,699 Depreciation and amortization ..... 349,935 319,366 969,805 958,096 Partnership management fee ........ 227,043 227,043 681,129 681,131 Administrative expenses ........... 126,029 128,253 532,387 375,995 Property management fee ........... 64,045 63,614 204,378 200,473 ---------- ---------- ---------- ---------- 1,667,138 1,592,357 5,017,393 4,753,394 ---------- ---------- ---------- ---------- Income before interest and other income 505,145 565,093 1,909,492 1,967,945 Interest income ................... 55,533 39,651 146,628 92,834 Other income ...................... 23,030 22,654 69,660 52,464 ---------- ---------- ---------- ---------- Net income ............................. $ 583,708 $ 627,398 $2,125,780 $2,113,243 ========== ========== ========== ========== Net income attributable to: Limited partners .................. $ 554,523 $ 596,028 $2,019,491 $2,007,581 General partners .................. 29,185 31,370 106,289 105,662 ---------- ---------- ---------- ---------- Net income ............................. $ 583,708 $ 627,398 $2,125,780 $2,113,243 ========== ========== ========== ========== Net income per unit of limited Partnership interest (400,010 units outstanding) ...................... $ 1.39 $ 1.49 $ 5.05 $ 5.02 ========== ========== ========== ==========
See notes to financial statements
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 STATEMENT OF PARTNERS' EQUITY General Limited Partners' Partners' Equity Equity Total ------------ ------------ ------------ Balance, January 1, 1997 ........................ $ 1,841,536 $ 34,970,158 $ 36,811,694 Net income for the nine months ended September 30, 1997 ............ 106,289 2,019,491 2,125,780 Distributions as a return of capital for the nine months ended September 30, 1997 ($2.63 per . (55,369) (1,052,026) (1,107,395) ------------ ------------ ------------ limited partnership unit) Balance, September 30, 1997 ..................... $ 1,892,456 $ 35,937,623 $ 37,830,079 ============ ============ ============
See notes to financial statements
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 STATEMENTS OF CASH FLOWS For The Nine Months Ended September 30, ---------------------------- 1997 1996 ----------- ----------- Cash Flows From Operating Activities: Net income .................................. $ 2,125,780 $ 2,113,243 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ........... 969,805 958,096 Straight-line adjustment for stepped lease rentals ......................... (46,902) (31,268) Changes in assets and liabilities: Accounts payable and accrued expenses ... 478,689 852,157 Receivables ............................. (133,609) (70,809) Due to affiliates ....................... (883,936) (69,003) Other assets ............................ (183,173) (225,458) ----------- ----------- Net cash provided by operating activities ... 2,326,654 3,526,958 ----------- ----------- Cash Flows From Investing Activities: Improvements to real estate ................. (708,233) (403,006) ----------- ----------- Cash Flows From Financing Activities: Distributions to partners ................... (964,234) (757,914) ----------- ----------- Increase In Cash And Cash Equivalents ............ 654,187 2,366,038 Cash And Cash Equivalents, Beginning of Year ..... 4,870,517 2,450,943 ----------- ----------- Cash And Cash Equivalents, End of Quarter ........ $ 5,524,704 $ 4,816,981 =========== ===========
See notes to financial statements INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 NOTES TO FINANCIAL STATEMENTS l. GENERAL The accompanying financial statements, notes and discussions should be read in conjunction with the financial statements, related notes and discussions contained in the Partnership's annual report on Form 10-K/A for the year ended December 31, 1996. The financial information contained herein is unaudited; however, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of such financial information have been included. 2. SIGNIFICANT ACCOUNTING POLICIES Impairment of Assets The Partnership evaluates the recoverability of the net carrying value of its real estate and related assets at least annually, and more often if circumstances dictate. If this review indicates that the carrying value of the property may not be recoverable, the Partnership estimates the future cash flows expected to result from the use of the property and its eventual disposition, generally over a five-year holding period. In performing this review, management takes into account, among other things, the existing occupancy, the expected leasing prospects of the property and the economic situation in the region where the property is located. If the sum of the expected future cash flows, undiscounted, is less than the carrying amount of the property, the Partnership recognizes an impairment loss, and reduces the carrying amount of the asset to its estimated fair value. Fair value is the amount at which the asset could be bought or sold in a current transaction between willing parties, that is, other than in a forced or liquidation sale. Management estimates fair value using discounted cash flows or market comparables, as most appropriate for each property. Independent certified appraisers are utilized to assist management, when warranted. Impairment write-downs recorded by the Partnership do not affect the tax basis of the assets and are not included in the determination of taxable income or loss. Because the cash flows used to evaluate the recoverability of the assets and their fair values are based upon projections of future economic events, such as property occupancy rates, rental rates, operating cost inflation and market capitalization rates, the amounts ultimately realized at disposition may differ materially from the net carrying values at the balance sheet dates. The cash flows and market comparables used in this process are based on good faith estimates and assumptions developed by management. Unanticipated events and circumstances may occur and some assumptions may not materialize; therefore, actual results may materially vary from the estimates. The Partnership may in the future provide additional write-downs, which could be material, if real estate markets or local economic conditions change. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 NOTES TO FINANCIAL STATEMENTS 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Recently Issued Accounting Pronouncements The Financial Accounting Standards Board has recently issued several new accounting pronouncements. Statement No. 128, "Earnings per Share" establishes standards for computing and presenting earnings per share, and is effective for financial statements for both interim and annual periods ending after December 15, 1997. Statement No. 129, "Disclosure of Information about Capital Structure" establishes standards for disclosing information about an entity's capital structure, and is effective for financial statements for periods ending after December 15, 1997. Statement No. 130, "Reporting Comprehensive Income" establishes standards for reporting and display of comprehensive income and its components and is effective for fiscal years beginning after December 15, 1997. Statement No. 131, "Disclosures about Segments of an Enterprise and Related Information" establishes standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to shareholders. It also establishes standards for related disclosures about products and services, geographic areas, and major customers, and is effective for financial statements for periods beginning after December 15, 1997. Management does not believe that these new standards will have a material effect on the Partnership's reported operating results, per unit amounts, financial position or cash flow. Certain reclassifications were made to the prior period financial statements in order to conform them to the current period presentation. Results of operations for the nine months ended September 30, 1997 are not necessarily indicative of the results to be expected for the entire year. 3. CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES The Managing General Partner of the Partnership, Resources High Equity, Inc. is a wholly-owned subsidiary of Presidio Capital Corp., ("Presidio"). Presidio AGP Corp., which is a wholly-owned subsidiary of Presidio is the Associate General Partner (together with the Managing General Partner, the "General Partners"). The General Partners and affiliates of the General Partners are also engaged in businesses related to the acquisition and operation of real estate. Presidio is also the parent of other corporations that are or may in the future be engaged in businesses that may be in competition with the Partnership. Accordingly, conflicts of interest may arise between the Partnership and such other businesses. Subject to the rights ofthe Limited Partners, under the Limited Patnership Agreement, Presidio controls the Partnership through its indirect ownership of all the shares of the General Partners. On November 2, 1997 the Administrative Services INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 NOTES TO FINANCIAL STATEMENTS 3. CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (CONTINUED) Agreement with Wexford Management LLC ("Wexford"), the administrator for Presidio, expired pursuant to its terms. Pursuant to that agreement, Wexford had authority to designate directors of the General Partners. Effective November 3, 1997, Wexford and Presidio entered into an Administrative Services Agreement dated as of November 3, 1997 (the "ASA"). The ASA provides that Wexford will continue to provide consulting and administrative services to Presidio and its affiliates for a term of six months. During the quarter ended September 30, 1997, reimbursable expenses to Wexford by the Partnership amount to $23,650. The Partnership has a property management services agreement with Resources Supervisory Management Corp. ("Resources Supervisory"), an affiliate of the General Partners, to perform certain functions relating to the management of the properties of the Partnership. A portion of the property management fees were paid to unaffiliated management companies which are engaged for the purpose of performing the management functions for certain properties. For the quarters ended September 30, 1997 and 1996, Resources Supervisory was entitled to receive $64,045 and $63,614 respectively, of which $48,403 and $44,527 was paid to unaffiliated management companies, respectively. For the administration of the Partnership, the Managing General Partner is entitled to receive reimbursement of expenses up to a maximum of $150,000 per year (exclusive of the reimbursement expenses paid to Wexford ). For each of the quarters ended September 30, 1997 and 1996, the Managing General Partner was entitled to receive $37,500. For managing the affairs of the Partnership, the Managing General Partner is entitled to receive an annual partnership management fee equal to 1.05% of the amount of original gross proceeds paid or allocable to the acquisition of property by the Partnership. For each of the quarters ended September 30, 1997 and 1996, the Managing General Partner was entitled to receive $227,043. The General Partners are allocated 5% of the net income of the Partnership, which amounted to $29,185 and $31,370 for the quarters ended September 30, 1997 and 1996, respectively. They are also entitled to receive 5% of distributions, which amounted to $19,790 and $12,632 for the quarters ended September 30, 1997 and 1996, respectively. During the liquidation stage of the Partnership, the Managing General Partner or an affiliate may be entitled to receive certain fees, which are subordinated to the limited partners receiving their original invested capital and certain specified minimum returns on their investment. From July 1996 through October 1997, Millenium Funding II Corp., a wholly owned indirect subsidiary of Presidio, purchased 22,171 units of the Partnership from various limited partners. These units represent approximately 5.6% of the outstanding limited partnership units of the Partnership. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 NOTES TO FINANCIAL STATEMENTS 4. REAL ESTATE The following table is a summary of the Partnership's real estate as of:
September 30, December 31, 1997 1996 ------------ ------------ Land ................................... $ 11,056,966 $ 11,056,966 Building and improvements .............. 35,525,315 34,817,081 ------------ ------------ 46,582,281 45,874,047 Less: Accumulated depreciation ......... (14,517,845) (13,719,794) ------------ ------------ $ 32,064,436 $ 32,154,253 ============ ============
No write-downs for impairment were recorded for the nine months ended September 30, 1997 or 1996. 5. DISTRIBUTIONS PAYABLE
September 30, December 31, 1997 1996 -------- -------- Limited partners ($.94 and $.60 per unit) ........ $376,009 $240,006 General partners ................................. 19,790 12,632 -------- -------- $395,799 $252,638 ======== ========
Such distributions were paid in the quarters subsequent to September 30, 1997 and December 31, 1996, respectively. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 NOTES TO FINANCIAL STATEMENTS 6. DUE TO AFFILIATES
September 30, December 31, 1997 1996 ---------- ---------- Partnership management fee ................... $ 227,043 $ 227,044 Settlement and litigation cost reimbursement (Note 7) ..................................... -- 824,510 Property management fee ...................... 15,642 75,067 Non-accountable expense reimbursement ........ 37,500 37,500 ---------- ---------- $ 280,185 $1,164,121 ========== ==========
Such amounts were paid in the quarters subsequent to September 30, 1997 and December 31, 1996, respectively. 7. COMMITMENTS AND CONTINGENCIES On or about May 11, 1993 High Equity Partners L.P. - Series 86 ("HEP-86"), an affiliated partnership, was advised of the existence of an action (the "California Action') in which a complaint (the "HEP Complaint") was filed in the Superior Court for the State of California for the County of Los Angeles (the "Court") on behalf of a purported class consisting of all of the purchasers of limited partnership interests in HEP-86. On April 7, 1994 the plaintiffs were granted leave to file an amended complaint (the "Amended Complaint"). On November 30, 1995, after the Court preliminarily approved a settlement of the California Action but ultimately declined to grant final approval and after the Court granted motions to intervene, the original and Intervening Plaintiffs filed a Consolidated Class and Derivative Action Complaint (the "Consolidated Complaint") against the Administrative and Investment General Partners of HEP-86, the managing general partner of the Partnership, the managing general partner of HEP-88 and the indirect corporate parent of the General Partners. The Consolidated Complaint alleged various state law class and derivative claims, including claims for breach of fiduciary duties; breach of contract; unfair and fraudulent business practices under California Bus. & Prof. Code Sec. 17200; negligence; dissolution, accounting and receivership; fraud; and negligent misrepresentation. The Consolidated Complaint alleged, among other things, that the general partners caused a waste of HEP Partnership assets by collecting management fees in lieu of pursuing a strategy to maximize the value of the investments owned by the limited partners; that the general partners breached their duty INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 NOTES TO FINANCIAL STATEMENTS 7. COMMITMENTS AND CONTINGENCIES (CONTINUED) of loyalty and due care to the limited partners by expropriating management fees from the partnerships without trying to run the HEP Partnerships for the purposes for which they are intended; that the general partners are acting improperly to enrich themselves in their position of control over the HEP Partnerships and that their actions prevent non-affiliated entities from making and completing tender offers to purchase HEP Partnership Units; that by refusing to seek the sale of the HEP Partnerships' properties, the general partners have diminished the value of the limited partners' equity in the HEP Partnerships; that the general partners have taken a heavily overvalued partnership asset management fee; and that limited partnership units were sold and marketed through the use of false and misleading statements. On February 24, 1997, after the Court again preliminarily approved a settlement of the California Action but again ultimately declined to grant final approval, the Court recused itself from considering a motion to intervene and to file a new complaint in intervention by two of the objectors to the Revised Settlement, granted the request of one plaintiffs' law firm to withdraw as class counsel and scheduled future hearings on various matters. Thereafter, the Intervening Plaintiffs filed and then revised an Amended Consolidated Class Action and Derivative Action Complaint (the Second Amended Consolidated Complaint) which asserts many of the same claims as the Consolidated Complaint, eliminates certain legal infirmities from that Consolidated Complaint, and presents more detailed factual allegations. In particular, that pleading no longer asserts claims of fraud and negligent misrepresentation. The General Partners believed that the Second Amended Consolidated Complaint continued to be subject to challenge on legal grounds and filed demurrers and a motion to strike. On October 7, 1997, the Court granted substantial portions of these motions. Thereafter, the General Partners served answers denying the allegations and asserting numerous affirmative defenses. The Limited Partnership Agreement provides for indemnification of the General Partners and their affiliates in certain circumstances. The Partnership has agreed to reimburse the General Partners for their actual costs incurred in defending this litigation and the costs of preparing settlement materials. Through December 31, 1996, the General Partners had billed the Partnership a total of $824,510 for these costs which was paid in February 1997. The General Partners believe that each of the claims asserted in the Consolidated Complaint are meritless and intend to continue to vigorously defend the California Action. It is impossible at this time to predict what the defense of the California Action will cost, the Partnership's financial exposure as a result of the indemnification agreement discussed above, and whether the costs of defending could adversely affect the Managing General Partner's ability to perform its obligations to the Partnership. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES Working capital reserves are temporarily invested in short-term instruments and, together with cash flow from operations, are expected to be sufficient to fund future capital improvements to the Partnership's properties. As of September 30, 1997, total working capital reserves amounted to approximately $3,426,000. The Partnership intends to distribute to its partners less than all of its future cash flow from operations in order to assure adequate reserves for capital improvements and lease procurement costs. During the nine months ended September 30, 1997, cash and cash equivalents increased $654,187 as a result of cash provided by operations in excess of capital expenditures and distributions to partners. The Partnership's primary source of funds is cash flow from the operation of its properties, principally rents received from tenants, which amounted to $2,326,654 for the nine months ended September 30, 1997. The Partnership used $708,233 for capital expenditures related to capital and tenant improvements to the properties and $964,234 for distributions to partners for the nine months ended September 30, 1997. The Partnership expects to continue to utilize a portion of its cash flow from operations to pay for various capital and tenant improvements to the properties and leasing commission, the amount of which cannot be predicted with certainty. Capital and tenant improvements and leasing commissions may in the future exceed the Partnership's cash flow from operations. In that event, the Partnership would utilize the remaining working capital reserves or sell one or more properties. Except as discussed herein, management is not aware of trends, events, commitments or uncertainties that will have significant impact on liquidity. RESULTS OF OPERATIONS The Partnership experienced a slight increase in net income for the nine months ended September 30, 1997 compared to the same period in the prior year due primarily to higher rental revenues, interest income, and other income, partially offset by higher costs and expenses during 1997. Net income for the three months ended September 30, 1997 decreased compared to the prior period due to higher costs and expenses, partially offset by higher rental revenues, interest income and other income. Rental revenues increased at Southport and 568 Broadway during the nine and three months ended September 30, 1997 compared to 1996, primarily due to higher percentage rents collected during 1997 at Southport and lease renewals at 568 Broadway at rates higher than those in 1996. These increases were partially offset by lower rental revenues at Westbrook for both current periods, primarily due to lower occupancy rates in 1997 as compared to the same periods in 1996. Costs and expenses increased during the nine and three months ended September 30, 1997 compared to the same periods in 1996, primarily due to increase in operating and administrative expenses. Operating expenses increased during both periods in 1997 due to higher repairs and maintenance costs at Southport and Century Park and higher utility expenses at various properties due to higher occupancy and service rates. Administrative expenses increased due to higher legal and accounting fees during both periods in 1997 related to ongoing litigation. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Interest income increased due to higher cash balances during the nine and three months ended September 30, 1997 compared to the same periods in 1996. Other income increased during the nine months ended September 30, 1997 compared to the same period in 1996 due to a greater number of investor transfers, which result in transfer fees received by the Partnership. Inflation is not expected to have a material impact on the Partnership's operations or financial position. Legal Proceedings The Partnership is a party to certain litigation. See Note 7 to the financial statements for a description thereof. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 Part II. - Other Information Item 1 - Legal Proceedings (a) See Management's Discussion and Analysis of Financial Condition and Results of Operations and Notes to Financial Statements - Note 7 which is herein incorporated by reference. Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits: There were no exhibits filed. (b) Reports on Form 8-K: Current report on Form 8-K dated August 7, 1997. Current report on Form 8-K dated September 19, 1997. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - SEPTEMBER 30, 1997 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. Integrated Resources High Equity Partners, Series 85, A California Limited Partnership By: Resources High Equity, Inc., Managing General Partner Dated: November 14, 1997 By: /S/ Richard Sabella ------------------- Richard Sabella President (Duly Authorized Officer) Dated: November 14, 1997 By: /S/ Kevin Reardon ----------------- Kevin Reardon Vice President, Secretary and Treasurer (Principal Financial and Accounting Officer) EX-27 2
5 The schedule contains summary information extracted from the financial statements of the September 30, 1997 Form 10-Q of Integrated Resources High Equity Partners, Series 85 and is qualified in its entirety by reference to such financial statements. 9-MOS DEC-31-1997 SEP-30-1997 5,524,704 0 291,813 0 0 0 0 0 40,046,484 0 0 0 0 0 37,830,079 40,046,484 0 6,926,885 0 2,629,694 2,387,699 0 0 2,125,780 0 2,125,780 0 0 0 2,125,780 0 0
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