-----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, IHhWWYdGNKKxdHR90uoQStlVmeWuUDRiLcf9mbbYCA/5ahdhYZ5msGaUrgjVC6rg HkMS0S8P3VbZYWGRlz2vPw== 0000201529-96-000004.txt : 19960801 0000201529-96-000004.hdr.sgml : 19960801 ACCESSION NUMBER: 0000201529-96-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960731 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCCOMBS REALTY PARTNERS LTD CENTRAL INDEX KEY: 0000759198 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330068732 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-14570 FILM NUMBER: 96601986 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ 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: PO 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 June 30, 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 0-14570 MCCOMBS REALTY PARTNERS, LTD. (Exact name of small business issuer as specified in its charter) California 33-0068732 (State or other jurisdiction of (I.R.S. 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 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) MCCOMBS REALTY PARTNERS, LTD. CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands) June 30, 1996 Assets Cash and cash equivalents: Unrestricted $ 459 Restricted--tenant security deposits 30 Accounts receivable 7 Escrow for taxes 41 Restricted escrows 154 Other assets 182 Investment properties: Land $ 499 Buildings and related personal property 5,224 5,723 Less accumulated depreciation (2,943) 2,780 $ 3,653 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 23 Tenant security deposits 28 Accrued taxes 40 Other liabilities 95 Mortgage note payable 5,806 Partners' Capital (Deficit) General partner $ 2 Limited partners (22,036 units issued and outstanding) (2,341) (2,339) $ 3,653 See Accompanying Notes to Consolidated Financial Statements b) MCCOMBS REALTY PARTNERS, LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended Six Months Ended June 30, June 30, 1996 1995 1996 1995 Revenues: Rental income $ 337 $ 301 $ 672 $ 620 Other income 26 26 57 45 Total revenues 363 327 729 665 Expenses: Operating 106 106 220 200 General and administrative 14 13 24 21 Maintenance 35 27 95 43 Depreciation 47 41 93 81 Interest 122 222 285 406 Property taxes 20 30 40 65 Total expenses 344 439 757 816 Income(loss) before extraordinary gain (loss) 19 (112) (28) (151) Extraordinary loss on retirement of debt -- (128) -- (128) Extraordinary gain on forgiveness of debt -- 552 -- 552 Net income (loss) $ 19 $ 312 $ (28) $ 273 Net income (loss) allocated to general partner (1%) $ -- $ 3 $ -- $ 3 Net income (loss) allocated to limited partners (99%) 19 309 (28) 270 $ 19 $ 312 $ (28) $ 273 Per limited partnership unit: Net income (loss) before extraordinary item $ .88 $(5.03) $(1.24) $(6.78) Extraordinary loss on retirement of debt -- (5.78) -- (5.78) Extraordinary gain on forgiveness of debt -- 24.81 -- 24.81 Net income (loss) per limited partnership unit $ .88 $14.00 $(1.24) $12.25 See Accompanying Notes to Consolidated Financial Statements
c) MCCOMBS REALTY PARTNERS, LTD. CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except for unit data)
Limited Partnership General Limited Units Partner Partners Total Partners' capital (deficit) at December 31, 1995 22,036 $ 2 $ (2,313) $ (2,311) Net loss for the six months ended June 30, 1996 -- (28) (28) Partners' capital (deficit) at June 30, 1996 22,036 $ 2 $ (2,341) $ (2,339) See Accompanying Notes to Consolidated Financial Statements
d) MCCOMBS REALTY PARTNERS, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, 1996 1995 Cash flows from operating activities: Net (loss) income $ (28) $ 273 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation 93 81 Amortization of discounts and loan costs 10 94 Extraordinary loss on retirement of debt -- 128 Extraordinary gain on forgiveness of debt -- (552) Change in accounts: Restricted cash (3) 4 Accounts receivable 3 (8) Escrows for taxes (39) (1) Other assets (3) (5) Accounts payable (152) (16) Tenant security deposit liabilities 3 -- Accrued taxes 40 39 Other liabilities 25 10 Net cash (used in) provided by operating activities (51) 47 Cash flows from investing activities: Property improvements and replacements (120) (9) Deposits to restricted escrows (34) (92) Net cash used in investing activities (154) (101) Cash flows from financing activities: Payments on mortgage note payable (24) (16) Repayment of mortgage notes payable -- (5,163) Proceeds of mortgage notes payable -- 5,850 Loan costs -- (178) Net cash (used in) provided by financing activities (24) 493 Net (decrease) increase in cash and cash equivalents (229) 439 Cash and cash equivalents at beginning of period 688 212 Cash and cash equivalents at end of period $ 459 $ 651 Supplemental disclosure of cash flow information: Cash paid for interest $ 236 $ 312 See Accompanying Notes to Consolidated Financial Statements
e) MCCOMBS REALTY PARTNERS, LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited consolidated financial statements of McCombs Realty Partners, Ltd. ("Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Article 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, 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, 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 consolidated financial statements and footnotes thereto included in the annual report on Form 10-KSB for the year ended December 31, 1995, for the Partnership. Certain reclassifications have been made to the 1995 information to conform to the 1996 presentation. Note B - 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 services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. Property management fees are included in operating expense on the consolidated statement of operations. Reimbursements for services from affiliates are included in general and administrative expense in the consolidated statement of operations. The following transactions with Insignia Financial Group, Inc. and affiliates were charged to expense in 1996 and 1995: Six Months Ended June 30, 1996 1995 Property management fees $ 36 $ 31 Reimbursement for services from affiliates 19 14 The Partnership insures its property 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 C - Mortgage Notes Payable On June 29, 1995, the Partnership refinanced the four mortgages encumbering Lakewood at Pelham Apartments. The total indebtedness refinanced was approximately $5.7 million, net of discounts which carried stated interest rates from 0 to 10.5% with maturity dates ranging from June 1995 to October 1998. The new mortgage indebtedness of $5.85 million carries a stated interest rate of 8.1% and is amortized over 30 years with a balloon payment due July 1, 2005. As a result of the refinancing, the Partnership recognized an extraordinary loss on the retirement of debt of approximately $128,000 and an extraordinary gain on the forgiveness of debt of approximately $552,000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment property consists of one apartment complex. The following table sets forth the average occupancy of the property for the six month periods ended June 30, 1996 and 1995: Average Occupancy Property 1996 1995 Lakewood at Pelham Greenville, South Carolina 94% 95% Results of Operations The Partnership's net loss for the six months ended June 30, 1996, was approximately $28,000 as compared to net income of approximately $273,000 for the corresponding period in 1995. The Partnership recorded net income of approximately $19,000 for the three months ended June 30, 1996, as compared to net income of approximately $312,000 for the corresponding period in 1995. The decrease in net income for the three month period ended June 30, 1996, and the increase in net loss for the six month period ended June 30, 1996, is primarily attributable to the refinancing of Pelham Place Apartments on June 29, 1995, an increase in maintenance expense, and an increase in depreciation expense. As a result of the refinancing during the second quarter of 1995, the Partnership recognized an extraordinary gain on debt forgiveness of approximately $552,000 and an extraordinary loss on the retirement of debt of approximately $128,000. Maintenance expense increased as a result of painting and repairs performed at the investment property. Depreciation expense increased due to the acquisition of property improvements and replacements. Finally, net loss for the six month period ended June 30, 1996, increased due to an increase in general and administrative expense resulting from an increase in professional expenses, an increase in insurance expense and an increase in General Partner reimbursements. The increase in insurance expense is due to the purchase of additional partnership liability insurance that had not been purchased in previous periods. Offsetting the items noted above was a decrease in interest expense due to a decrease in the interest rate on the mortgage balance during the three and six month periods ended June 30, 1996, resulting from the refinancing in June 1995. Property tax expense for the three and six month periods ended June 30, 1996, decreased as compared to the three and six month periods ended June 30, 1995, due to an underpayment of 1993 taxes that were paid in the first quarter of 1995. Rental income increased for the three month period ended June 30, 1996, due to a rental rate increase in May 1996. Other income increased for the six months ended June 30, 1996, as compared to the six months ended June 30, 1995, due to an increase in interest income. Cash balances throughout the first six months of 1996 were higher as compared to the cash balances throughout the first six months of 1995. As part of the ongoing business plan of the Partnership, the 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 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, these is no guarantee that the General Partner will be able to sustain such a plan. Liquidity and Capital Resources At June 30, 1996, the Partnership had unrestricted cash of approximately $459,000 compared to approximately $651,000 at June 30, 1995. Net cash used in operating activities increased due to an increase in net loss as described above, a decrease in accounts payable, and an increase in the escrows for taxes. This increase in net cash used in operating activities was partially offset by an increase in other liabilities. Net cash used in investing activities increased as a result of increased purchases of property improvements and replacements. This increase in net cash used in investing activities was partially offset by decreased deposits to restricted escrows. Net cash used in financing activities increased as a result of the debt refinancing of Lakewood at Pelham in June 1995. On June 29, 1995, the Partnership refinanced the four mortgages encumbering Lakewood at Pelham Apartments. The total indebtedness refinanced was approximately $5.7 million, net of discounts, which carried stated interest rates from 0 to 10.5% with maturity dates ranging from June 1995 to October 1998. The new mortgage indebtedness of $5.85 million carries a stated interest rate of 8.1% and is amortized over 30 years with a balloon payment due July 1, 2005. As a result of the refinancing, the Partnership recognized an extraordinary loss on the retirement of debt of approximately $128,000 and an extraordinary gain on the forgiveness of debt of approximately $552,000. The Partnership has no material capital programs scheduled to be performed in 1996, although certain routine capital expenditures and maintenance expenses have been budgeted. These capital expenditures and maintenance expenses will be incurred only if cash is available from operations; is received from the capital reserve account; or from cash and cash equivalents on hand. 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 mortgage indebtedness of approximately $5,806,000 has a maturity date of July 1, 2005, at which time the property will be sold or refinanced. Future cash distributions will depend on the level of net cash generated from operations, a property sale, and the availability of cash reserves. No cash distributions were recorded in the first six months of 1996 or 1995 and none are expected for the remainder 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: None filed during the quarter ended June 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. MCCOMBS REALTY PARTNERS, LTD. By: CRPTEX, INC. the 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: July 31, 1996 EX-27 2
5 This schedule contains summary financial information extracted from McCombs Realty Partners 1996 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000759198 MCCOMBS REALTY PARTNERS LTD 1,000 6-MOS DEC-31-1996 JUN-30-1996 459 0 7 0 0 0 5,723 2,943 3,653 0 5,806 0 0 0 (2,339) 3,653 0 729 0 0 757 0 285 0 0 0 0 0 0 (28) (1.24) 0 The Registrant has an unclassified balance sheet.
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