-----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, Wk56TjLuYkwzTkOQfeaJLlo2VxQ/tgLcYLniTg8BVH0y1lBnSoljX765/8bN5IaR fEQqDj0ExH6GbX1NyUm50A== 0000800080-97-000004.txt : 19970507 0000800080-97-000004.hdr.sgml : 19970507 ACCESSION NUMBER: 0000800080-97-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970506 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOX STRATEGIC HOUSING INCOME PARTNERS CENTRAL INDEX KEY: 0000800080 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 943016373 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-16877 FILM NUMBER: 97596245 BUSINESS ADDRESS: STREET 1: 1 INSIGNIA FINANCIAL P O BOX 1089 STREET 2: C/O INSIGNIA FINANCIAL GROUP INC CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391513 MAIL ADDRESS: STREET 1: 1 INSIGNIA FINANCIAL P O BOX 1089 STREET 2: C/O INSIGNIA FINANCIAL GROUP INC CITY: GREENVILLE STATE: SC ZIP: 29602 FORMER COMPANY: FORMER CONFORMED NAME: FOX STRATEGIC HOUSING PARTNERS /CA/ DATE OF NAME CHANGE: 19870402 FORMER COMPANY: FORMER CONFORMED NAME: CENTURY PROPERTIES GROWTH FUND XXVI DATE OF NAME CHANGE: 19870208 10QSB 1 FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Quarterly or Transitional Report UNITED STATES 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 March 31, 1997 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 0-16877 FOX STRATEGIC HOUSING INCOME PARTNERS (Exact name of small business issuer as specified in its charter) California 94-3016373 (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) FOX STRATEGIC HOUSING INCOME PARTNERS CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) March 31, 1997 Assets Cash and cash equivalents $ 4,686 Receivables and deposits 181 Other assets 61 Investment properties: Land $ 3,119 Buildings and related personal property 18,116 21,235 Less accumulated depreciation (5,945) 15,290 $ 20,218 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 25 Tenant security deposits 64 Accrued taxes 152 Accrued interest 151 Other liabilities 41 Mortgage notes payable 8,321 Partners' Capital (Deficit): Limited partners' (26,111 units outstanding) $ 11,689 General partner's (225) 11,464 $ 20,218 See Accompanying Notes to Consolidated Financial Statements b) FOX STRATEGIC HOUSING INCOME PARTNERS CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended March 31, 1997 1996 Revenues: Rental income $ 735 $ 715 Other income 79 67 Total revenues 814 782 Expenses: Operating 352 349 Interest 233 228 Depreciation 154 149 General and administrative 59 86 Total expenses 798 812 Net income (loss) $ 16 $ (30) Net income (loss) allocated to general partner $ 3 $ (30) Net income (loss) allocated to limited partners 13 -- $ 16 $ (30) Net income (loss) per limited partnership unit $ .50 $ -- See Accompanying Notes to Consolidated Financial Statements c) FOX STRATEGIC HOUSING INCOME PARTNERS 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 26,111 $ -- $ 26,111 $ 26,111 Partners' (deficit) capital at December 31, 1996 26,111 $ (228) $ 11,676 $ 11,448 Net income for the three months ended March 31, 1997 -- 3 13 16 Partners' (deficit) capital at March 31, 1997 26,111 $ (225) $ 11,689 $ 11,464 See Accompanying Notes to Consolidated Financial Statements
d) FOX STRATEGIC HOUSING INCOME PARTNERS CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 1997 1996 Cash flows from operating activities: Net income (loss) $ 16 $ (30) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 154 149 Amortization of loan costs 10 10 Interest added to note payable principal 72 69 Change in accounts: Receivables and deposits 25 (139) Other assets (3) 2 Accounts payable (4) 25 Tenant security deposit liabilities (4) (4) Accrued taxes (8) 69 Accrued interest payable 151 149 Other liabilities (4) 46 Net cash provided by operating activities 405 346 Cash flows from investing activities: Property improvements and replacements (34) (19) Net cash used in investing activities (34) (19) Cash flows from financing activities: -- -- Net increase in cash and cash equivalents 371 327 Cash and cash equivalents at beginning of period 4,315 1,409 Cash and cash equivalents at end of period $ 4,686 $ 1,736 Supplemental information of non cash investing and financing activities: Beginning accrued interest added to note payable principal $ 358 $ 356 See Accompanying Notes to Consolidated Financial Statements
FOX STRATEGIC HOUSING INCOME PARTNERS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements of Fox Strategic Housing Income Partners (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 Fox Capital Management Corporation ("FCMC" or the "Managing General Partner"), a California corporation, 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, 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 year ended December 31, 1996. Certain reclassifications have been made to the 1996 information to conform to the 1997 presentation. NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES The Partnership 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. Fox Partners VIII, a California general partnership, is the general partner. The general partners of Fox Partners VIII are FCMC and Fox Realty Investors ("FRI"), a California general partnership. Pursuant to a series of transactions which closed during the first half of 1996, affiliates of Insignia Financial Group, Inc. ("Insignia") acquired all of the issued and outstanding shares of stock of FCMC, NPI Equity Investments II, Inc. ("NPI Equity"), the managing general partner of FRI, and National Property Investors, Inc. ("NPI"). In connection with these transactions, affiliates of Insignia appointed new officers and directors of NPI Equity and FCMC. The following transactions with affiliates of Insignia, NPI, and affiliates of NPI were incurred during the three month periods ended March 31, 1997 and 1996 (in thousands): For the Three Months Ended March 31 1997 1996 Property management fees (included in operating expenses) $ 38 $ 37 Reimbursement for services of affiliates (included in general and administrative and operating expenses) 26 46 For the period from January 19, 1996, to March 31, 1997, the Partnership insured its properties 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. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of two apartment complexes. The following table sets forth the average occupancy of the properties for the three months ended March 31, 1997 and 1996: Average Occupancy Property 1997 1996 Barrington Place Apartments Westlake, Ohio 96% 96% Wood View Apartments Atlanta, Georgia 92% 95% The Partnership's net income for the three months ended March 31, 1997, was approximately $16,000 versus a net loss of approximately $30,000 for the corresponding period of 1996. The increase in net income is primarily attributable to an increase in rental income and a decrease in general and administrative expenses. The rental income increase primarily relates to increased rental rates at both properties, which more than offset the reduction in an average occupancy at Wood View Apartments. The decrease in general and administrative expenses is due to a decrease in expense reimbursement paid to affiliates of the Managing General Partner. The decrease is directly related to the costs incurred in connection with the transition and relocation of the administration offices during the first quarter of 1996. Operating, interest, and depreciation expense remained consistent from the first quarter of 1996 to the first quarter of 1997. There were no major repairs and maintenance included in operating expenses during the three month periods ended March 31, 1997 and 1996. As part of the ongoing business plan of the Partnership, the Managing 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 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, 1997, the Partnership had unrestricted cash of approximately $4,686,000 as compared to approximately $1,736,000 at March 31, 1996. Net cash provided by operating activities increased primarily due to the increase in rental income and the decrease of general and administrative expenses as discussed above. The decrease in cash provided by investing activities is the result of an increase in property improvements and replacements. The Partnership's properties are cross-collateralized by a zero coupon first mortgage which secures the entire amount of the note payable. Interest accrues on the amount borrowed at a contract rate of 10.9 percent per annum, with the interest accrued added to principal each January and July. As of March 31, 1997, approximately $5,193,000 in accrued interest has been added to the principal of this note. The Partnership is or was required to repay a specified percentage of the then outstanding original principal amount of the loan as follows: 20 percent in August 1995, 20 percent in August 1996, and 30 percent in August 1997. In addition, provided that the Partnership has generated income in an amount as defined in the note agreement, it will be required to repay a specified percentage of the then outstanding accrued interest added to principal as follows: 20 percent in August 1995, 20 percent in August 1996, and 30 percent in August 1997. The remaining principal balance plus all accrued and unpaid interest is due in August 1998. In August 1995, the Partnership paid approximately $1,947,000 (which included $970,000 of accrued interest added to principal). In August 1996, the Partnership paid $782,000, which was 20 percent of the then outstanding original principal balance (no additional payment of accrued interest was required). In August 1997, the Partnership will have to pay approximately $938,000 of principal. 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 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 and accrued interest mature August 1, 1998, at 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, refinancings, and the availability of cash reserves. In addition, distributions may be limited by the debt repayments discussed above. No cash distributions were paid during 1996 or during the three months ended March 31, 1997. Cash distributions are expected to remain suspended as a result of the pending debt maturity which is discussed above. 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 March 31, 1997. SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FOX STRATEGIC HOUSING INCOME PARTNERS By: FOX PARTNERS VIII Its General Partner By: FOX CAPITAL MANAGEMENT CORPORATION Its Managing General Partner By: /s/William H. Jarrard, Jr. William H. Jarrard, Jr. President and Director By: /s/Ronald Uretta Ronald Uretta Vice President and Treasurer Date: May 6, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Fox Strategic Housing Income Partners 1997 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000800080 FOX STRATEGIC HOUSING INCOME PARTNERS 1,000 3-MOS DEC-31-1997 MAR-31-1997 4,686 0 0 0 0 0 21,235 5,945 20,218 0 8,321 0 0 0 11,464 20,218 0 814 0 0 798 0 233 0 0 0 0 0 0 16 .50 0 Registrant has an unclassified balance sheet. Multiplier is 1.
-----END PRIVACY-ENHANCED MESSAGE-----