-----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, PSebxc+08DlkuBuVuweekvXKZu9I69KdhxiuRnBkl3zzIQHspizqmfOtctyL2fbg 4pPuGTmqx9Z4a2UTTuGvrA== 0000711642-01-000040.txt : 20010330 0000711642-01-000040.hdr.sgml : 20010330 ACCESSION NUMBER: 0000711642-01-000040 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010329 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED INVESTORS INCOME PROPERTIES CENTRAL INDEX KEY: 0000830056 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 431542903 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: SEC FILE NUMBER: 000-17646 FILM NUMBER: 1583113 BUSINESS ADDRESS: STREET 1: 55 BEATTIE PLACE STREET 2: POST OFFICE BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 29602 MAIL ADDRESS: STREET 1: 1873 SOUTH BELLAIRE STREET STREET 2: 17TH FLOOR CITY: DENVER STATE: CO ZIP: 80222 10KSB 1 0001.txt FORM 10-KSB FORM 10-KSB--Annual or Transitional Report Under Section 13 or 15(d) Form 10-KSB [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required] For the fiscal year ended December 31, 2000 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required] For the transition period _________to _________ Commission file number 0-17646 UNITED INVESTORS INCOME PROPERTIES (Name of small business issuer in its charter) Missouri 43-1483942 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 55 Beattie Place, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 Issuer's telephone number Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: Units of Limited Partnership Interest (Title of class) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 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___ Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X] State issuer's revenues for its most recent fiscal year. $1,832,000 State the aggregate market value of the voting partnership interests held by non-affiliates computed by reference to the price at which the partnership interests were sold, or the average bid and asked prices of such partnership interests, as of December 31, 2000. No market exists for the limited partnership interests of the Registrant, and, therefore, no aggregate market value can be determined. DOCUMENTS INCORPORATED BY REFERENCE None PART I Item 1. Description of Business United Investors Income Properties (the "Registrant" or "Partnership"), a Missouri Limited Partnership, was organized as a limited partnership under the laws of the State of Missouri on June 23, 1988. The Partnership is governed by an Agreement of Limited Partnership dated July 27, 1988. United Investors Real Estate, Inc., a Delaware corporation, is the sole general partner ("UIRE" or the "General Partner") of the Partnership. UIRE was wholly-owned by MAE GP Corporation ("MAE GP"). Effective February 25, 1998, MAE GP was merged into Insignia Properties Trust ("IPT"), a subsidiary of Apartment Investment and Management Company ("AIMCO"). Thus the General Partner is now wholly-owned by AIMCO. The Partnership Agreement provides that the Partnership is to terminate on December 31, 2018 unless terminated prior to such date. Commencing on or about May 4, 1988, the Partnership offered, pursuant to a Registration Statement filed with the Securities and Exchange Commission ("SEC"), up to a maximum of 80,000 units of limited partnership interest (the "Units") at $250 per Unit with a minimum required purchase of eight Units or $2,000 (four Units or $1,000 for an Individual Retirement Account). The offering of Units terminated May 4, 1990. Upon termination of the offering, the Partnership had accepted subscriptions for 61,063 Units resulting in gross offering proceeds of approximately $15,266,000. Since its initial offering, the Registrant has not received, nor are limited partners required to make, additional capital contributions. The Partnership was engaged in the business of acquiring and operating multifamily residential and commercial real estate properties and other income producing real estate. The Partnership had acquired three multifamily residential properties, a medical office building, and an interest in a joint venture which owned a medical office building. The medical office building and the joint venture were sold December 30, 1999. The only remaining properties are residential properties. These remaining properties are further described in "Item 2. Description of Properties" below. The Registrant has no employees. Management and administrative services are provided by the General Partner and by agents retained by the General Partner. An affiliate of the General Partner has been providing such property management services. The real estate business in which the Partnership is engaged is highly competitive. There are other residential properties within the market area of the Partnership's properties. The number and quality of competitive properties, including those which may be managed by an affiliate of the General Partner in such market area, could have a material effect on the rental market for the apartments and the rents that may be charged for such apartments. While the General Partner and its affiliates own and/or control a significant number of apartment units in the United States, such units represent an insignificant percentage of total apartment units in the United States and competition for the apartments is local. Both the income and expenses of operating the properties owned by the Partnership are subject to factors outside of the Partnership's control, such as changes in the supply and demand for similar properties resulting from various market conditions, increases/decreases in unemployment or population shifts, changes in the availability of permanent mortgage financing, changes in zoning laws, or changes in patterns or needs of users. In addition, there are risks inherent in owning and operating residential properties because such properties are susceptible to the impact of economic and other conditions outside of the control of the Partnership. There have been, and it is possible there may be other, Federal, state and local legislation and regulations enacted relating to the protection of the environment. The Partnership is unable to predict the extent, if any, to which such new legislation or regulations might occur and the degree to which such existing or new legislation or regulations might adversely affect the properties owned by the Partnership. The Partnership monitors its properties for evidence of pollutants, toxins and other dangerous substances, including the presence of asbestos. In certain cases environmental testing has been performed, which resulted in no material adverse conditions or liabilities. In no case has the Partnership received notice that it is a potentially responsible party with respect to an environmental clean up site. A further description of the Partnership's business is included in Management's Discussion and Analysis or Plan of Operation" included in "Item 6" of this Form 10-KSB. Transfer of Control Pursuant to a series of transactions which closed on October 1, 1998 and February 26, 1999, Insignia Financial Group, Inc. ("Insignia") and IPT merged into AIMCO, a publicly traded real estate investment trust, with AIMCO being the surviving corporation (the "Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in the General Partner. The General Partner does not believe that this transaction has had or will have a material effect on the affairs and operations of the Partnership. Item 2. Description of Properties The following table sets forth the Partnership's investment in properties:
Date of Property Purchase Type of Ownership Use Bronson Place Apartments 11/01/88 Fee simple Apartment Mountlake Terrace, WA 70 units Defoors Crossing Apartments 05/01/89 Fee simple Apartment Atlanta, GA 60 units Meadow Wood Apartments 10/02/89 Fee simple Apartment Medford, OR 85 units
Schedule of Properties Set forth below for each of the Registrant's properties is the gross carrying value, accumulated depreciation, depreciable life, method of depreciation and Federal tax basis.
Gross Carrying Accumulated Useful Federal Property Value Depreciation Life Method Tax Basis (in thousands) (in thousands) Bronson Place $ 3,687 $ 1,349 5-40 yrs S/L $ 2,461 Defoors Crossing 3,473 1,129 5-40 yrs S/L 2,311 Meadow Wood 3,826 1,260 5-40 yrs S/L 2,564 Totals $10,986 $ 3,738 $ 7,336
See "Note A" of the financial statements in "Item 7. Financial Statements" for a description of the Partnership's depreciation policy. Schedule of Rental Rates and Occupancy Average annual rental rates and occupancy for 2000 and 1999 for each property: Average Annual Average Annual Rental Rate Occupancy (per unit) Property 2000 1999 2000 1999 Bronson Place Apartments $9,629 $9,405 92% 93% Defoors Crossing Apartments 9,483 9,335 95% 95% Meadow Wood Apartments 7,408 7,189 97% 94% The General Partner attributes the increased occupancy at Meadow Wood Apartments to increased advertising and move in incentives and exterior improvements completed to increase the curb appeal of the property. As noted under "Item 1. Description of Business", the real estate industry is highly competitive. All of the properties of the Partnership are subject to competition from other residential apartment complexes in the localities in which they operate. The General Partner believes that all of the properties are adequately insured. Each residential property is an apartment complex which leases units for lease terms of one year or less. No residential tenant leases 10% or more of the available rental space. All of the properties are in good physical condition, subject to normal depreciation and deterioration as is typical for assets of this type and age. Schedule of Real Estate Taxes and Rates Real estate taxes and effective rates in 2000 for each property were: 2000 2000 Billing Rate (in thousands) Bronson Place Apartments $ 53 1.32% Defoors Crossing Apartments 52 1.59% Meadow Wood Apartments 56 1.44% Capital Improvements Bronson Place During the year ended December 31, 2000, the Partnership spent approximately $55,000 on capital improvements at Bronson Place Apartments, consisting primarily of structural improvements, appliances, plumbing upgrades, clubhouse renovations, and carpet and vinyl replacements. These improvements were funded from cash flow from operations. The Partnership is currently evaluating the capital improvement needs of the property for the upcoming year. The minimum amount to be budgeted is expected to be $275 per unit or $19,250. Additional improvements may be considered and will depend on the physical condition of the property as well as anticipated cash flow generated by the property. Defoors Crossing During the year ended December 31, 2000, the Partnership spent approximately $21,000 on capital improvements at Defoors Crossing Apartments, consisting primarily of carpet and vinyl replacements, swimming pool upgrades, and appliances. These improvements were funded from cash flow from operations. The Partnership is currently evaluating the capital improvement needs of the property for the upcoming year. The minimum amount to be budgeted is expected to be $275 per unit or $16,500. Additional improvements may be considered and will depend on the physical condition of the property as well as anticipated cash flow generated by the property. Meadow Wood During the year ended December 31, 2000, the Partnership spent approximately $75,000 on capital improvements at Meadow Wood Apartments, consisting primarily of carpet and vinyl replacements, appliances, and parking lot improvements. These improvements were funded from cash flow from operations. The Partnership is currently evaluating the capital improvement needs of the property for the upcoming year. The minimum amount to be budgeted is expected to be $275 per unit or $23,375. Additional improvements may be considered and will depend on the physical condition of the property as well as anticipated cash flow generated by the property. Item 3. Legal Proceedings The Partnership is unaware of any pending or outstanding litigation that is not of a routine nature arising in the ordinary course of business. Item 4. Submission of Matters to a Vote of Security Holders During the quarter ended December 31, 2000, no matters were submitted to a vote of Unit holders through the solicitation of proxies or otherwise. PART II Item 5. Market for Partnership Equity and Related Partner Matters The Partnership, a publicly-held limited partnership, offered 80,000 and sold 61,063 Limited Partnership Units during its offering period through May 4, 1990, aggregating approximately $15,266,000. The Partnership currently has 61,063 Limited Partnership Units outstanding and 1,454 holders of record. Affiliates of the General Partner owned 14,447 Units or 23.66% at December 31, 2000. No public trading market has developed for the Units, and it is not anticipated that such a market will develop in the future. The following table sets forth the distributions made by the Partnership for the years ended December 31, 1999 and 2000, and subsequent to December 31, 2000 (see "Item 6" for further details): Distributions Per Limited Aggregate Partnership Unit (in thousands) 01/01/99 - 12/31/99 $ 1,238 (1) $20.08 01/01/00 - 12/31/00 1,992 (2) 32.29 Subsequent to 12/31/00 286 (1) 4.63 (1) Distribution was made from cash from operations. (2) Consists of $989,000 of cash from operations and $1,003,000 of cash from the sales of Peachtree Corners Medical Building and Corinth Square Joint Venture. Future cash distributions will depend on the levels of net cash generated from operations, the availability of cash reserves, and the timing of financings and/or property sales. The Partnership's distribution policy is reviewed on a quarterly basis. There can be no assurance, however that the Partnership will generate sufficient funds from operations after required capital improvements to permit any additional distributions to its partners in the year 2001 or subsequent periods. See "Item 2. Description of Properties, Capital Improvements" for information relating to anticipated capital expenditures at the properties. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates currently own 14,447 limited partnership units in the Partnership representing 23.66% of the outstanding units. A number of these units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will make one or more additional offers to acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters, which would include without limitation, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the General Partner because of their affiliation with the General Partner. Item 6. Management's Discussion and Analysis or Plan of Operation The matters discussed in this Form 10-KSB contain certain forward-looking statements and involve risks and uncertainties (including changing market conditions, competitive and regulatory matters, etc.) detailed in the disclosures contained in this Form 10-KSB and the other filings with the Securities and Exchange Commission made by the Partnership from time to time. The discussion of the Partnership's business and results of operations, including forward-looking statements pertaining to such matters, does not take into account the effects of any changes to the Partnership's business and results of operations. Accordingly, actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including those identified herein. This item should be read in conjunction with the financial statements and other items contained elsewhere in this report. Results of Operations The Partnership realized net income of approximately $468,000 for the year ended December 31, 2000, compared to a net loss of approximately $540,000 for the year ended December 31, 1999. The increase in net income for the year ended December 31, 2000, is primarily due to the impairment loss on and sale of the discontinued operation of Peachtree Corners Medical Building in December 1999, as discussed below, and the equity in the loss of the joint venture due to the sale of Corinth Square Joint Venture on December 30, 1999, as discussed below. Excluding the sale and the operations of the discontinued operation and the equity in income (loss) of the joint venture, the Partnership had income of approximately $463,000 and $489,000 for the years ended December 31, 2000 and 1999, respectively. Income decreased due to an increase in total expenses partially offset by an increase in total revenues. Total expenses increased for the year ended December 31, 2000 primarily due to increased depreciation, property tax, and operating expenses which were partially offset by decreased general and administrative expenses. Depreciation expense increased due to capital improvements completed during the past twelve months. Property tax expense increased due to a tax refund received by Meadow Wood Apartments in 1999. Operating expenses increased due to an increase in advertising at Bronson Place Apartments and Defoors Crossing Apartments and increased maintenance expenses at Bronson Place Apartments. General and administrative expense decreased for the year ended December 31, 2000 primarily due to a decrease in professional fees related to the oversight of the Partnership. Included in general and administrative expenses are reimbursements to the General Partner allowed under the Partnership Agreement associated with its management of the Partnership. Costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement are also included. The increase in total revenues for the year ended December 31, 2000 was due to an increase in rental income, which was partially offset by a slight decrease in other income. Rental income increased primarily due to increased average annual rental rates at all of the Partnership's properties and improved occupancy at Meadow Wood Apartments which more than offset the slight decrease in occupancy at Bronson Place Apartments. Other income decreased slightly due to a decrease in lease cancellation fees at all of the Partnership's properties. The Partnership had a 35% investment in Corinth Square Joint Venture ("Joint Venture"). For the year ended December 31, 2000, the Partnership realized equity in the income of the Joint Venture property of approximately $10,000, and for the year ended December 31, 1999, the Partnership realized equity in the loss on the sale of the joint venture property of approximately $209,000, and equity in the income of the joint venture of approximately $19,000 (excluding the loss on sale) (see "Note C - Investment in Corinth Square Joint Venture"). On December 30, 1999, the Joint Venture sold its only investment property, Corinth Square, to an unaffiliated third party. The sale resulted in net proceeds of approximately $1,143,000 after payment of closing costs, resulting in a loss on sale of approximately $598,000. The Partnership's 1999 pro-rata share of this loss is approximately $209,000. During the third quarter of 1999, the Partnership determined that the Peachtree Corners Medical Building located in Atlanta, Georgia, with a carrying value of approximately $1,451,000, was impaired and its value was written down by approximately $600,000. The fair value was based upon current economic conditions and projected future operational cash flows. In December 1999, Peachtree Corners Medical Building was sold to an unaffiliated party for $700,000. After payment of closing expenses, the net sales proceeds received by the Partnership were approximately $615,000. For financial statement purposes, the sale resulted in a loss of approximately $246,000. Peachtree Corners Medical Building was the last commercial property in the commercial segment of the Partnership. Due to the sale of this property in December 1999, the results of the commercial segment have been classified as "(Loss) income from discontinued operation" and "Impairment loss on discontinued operation" for the years ended December 31, 2000 and 1999. Revenues for this property were approximately $6,000 and $151,000 for the years ended December 31, 2000 and 1999, respectively. The Partnership realized a loss from discontinued operation of approximately $5,000 during the year ended December 31, 2000 and income from discontinued operation of approximately $7,000 during the year ended December 31, 1999. As part of the ongoing business plan of the Partnership, the 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 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. 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 General Partner will be able to sustain such a plan. Liquidity and Capital Resources At December 31, 2000, the Partnership had cash and cash equivalents of approximately $332,000 compared to approximately $1,167,000 at December 31, 1999. Cash and cash equivalents decreased by approximately $835,000 from the Partnership's year ended December 31, 1999, due to approximately $1,992,000 of cash used in financing activities, which was partially offset by approximately $889,000 of cash provided by operating activities and approximately $268,000 of cash provided by investing activities. Cash used in financing activities consisted of distributions paid to the partners. Cash provided by investing activities consisted primarily of proceeds from the sale of the Corinth Square Joint Venture property and, to a lesser extent, distributions received from the Joint Venture, which were partially offset by property improvements and replacements. The Partnership invests its working capital reserves in money market accounts. 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 various properties to adequately maintain the physical assets and other operating needs of the Partnership and to comply with Federal, state, and local legal and regulatory requirements. The Partnership is currently evaluating the capital improvement needs of the properties for the upcoming year. The minimum amount to be budgeted is expected to be $275 per unit or $59,125. Additional improvements may be considered and will depend on the physical condition of the properties as well as anticipated cash flow generated by the properties. The Partnership's current assets are thought to be sufficient for any near-term needs (exclusive of capital improvements) of the Partnership. During the year ended December 31, 2000, the Partnership paid distributions of cash generated from the sale of Peachtree Corners Medical Building and Corinth Square Joint Venture of approximately $1,003,000 (approximately $993,000 to the limited partners or $16.26 per limited partnership unit) and approximately $989,000 of cash generated from operations (approximately $979,000 to the limited partners or $16.03 per limited partnership unit). Subsequent to December 31, 2000, the Partnership declared distributions from operations of approximately $286,000 (approximately $283,000 to the limited partners or $4.63 per limited partnership unit). During the year ended December 31, 1999, the Partnership paid distributions of cash generated from operations of approximately $1,238,000 (approximately $1,226,000 to the limited partners or $20.08 per limited partnership unit). Future cash distributions will depend on the levels of net cash generated from operations, the availability of cash reserves, and the timing of financings and/or property sales. The Partnership's distribution policy is reviewed on a quarterly basis. There can be no assurance, however, that the Partnership will generate sufficient funds from operations after required capital improvements to permit any additional distributions to its partners during the year 2001 or subsequent periods. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates currently own 14,447 limited partnership units in the Partnership representing 23.66% of the outstanding units. A number of these units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will make one or more additional offers to acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters, which would include without limitation, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the General Partner because of their affiliation with the General Partner. Item 7. Financial Statements UNITED INVESTORS INCOME PROPERTIES LIST OF FINANCIAL STATEMENTS Independent Auditors' Report Balance Sheet - December 31, 2000 Statements of Operations - Years ended December 31, 2000 and 1999 Statements of Changes in Partners' (Deficit) Capital - Years ended December 31, 2000 and 1999 Statements of Cash Flows - Years ended December 31, 2000 and 1999 Notes to Financial Statements Independent Auditors' Report The Partners United Investors Income Properties We have audited the accompanying balance sheet of United Investors Income Properties (the "Partnership") as of December 31, 2000, and the related statements of operations, changes in partners' (deficit) capital and cash flows for each of the years in the two-year period ended December 31, 2000. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Partnership as of December 31, 2000, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. /s/KPMG LLP Greenville, South Carolina February 15, 2001 UNITED INVESTORS INCOME PROPERTIES BALANCE SHEET (in thousands, except unit data) December 31, 2000
Assets Cash and cash equivalents $ 332 Receivables and deposits 47 Other assets 41 Investment properties (Note F): Land $ 1,522 Buildings and related personal property 9,464 10,986 Less accumulated depreciation (3,738) 7,248 $ 7,668 Liabilities and Partners' (Deficit) Capital Liabilities Accounts payable $ 21 Tenant security deposit liabilities 51 Other liabilities 92 Partners' (Deficit) Capital General partner $ (56) Limited partners (61,063 units issued and outstanding) 7,560 7,504 $ 7,668
See Accompanying Notes to Financial Statements UNITED INVESTORS INCOME PROPERTIES STATEMENTS OF OPERATIONS (in thousands, except unit data)
Years Ended December 31, 2000 1999 Revenues: Rental income $ 1,697 $ 1,675 Other income 135 139 Total revenues 1,832 1,814 Expenses: Operating 691 663 General and administrative 131 168 Depreciation 387 361 Property taxes 160 133 Total expenses 1,369 1,325 Income before equity in income (loss) of joint venture and discontinued operation 463 489 Equity in income (loss) of joint venture 10 (190) Income from continuing operations 473 299 (Loss) income from discontinued operation (5) 7 Impairment loss on discontinued operation -- (600) Loss on sale of discontinued operation -- (246) Net income (loss) (Note H) $ 468 $ (540) Net income (loss) allocated to general partner (1%) 5 (5) Net income (loss) allocated to limited partners (99%) 463 (535) $ 468 $ (540) Per limited partnership unit: Income from continuing operations $ 7.66 $ 4.85 (Loss) income from discontinued operation (0.08) 0.11 Impairment loss on discontinued operation -- (9.73) Loss on sale of discontinued operation -- (3.99) Net income (loss) $ 7.58 $ (8.76) Distributions per limited partnership unit $ 32.29 $ 20.08
See Accompanying Notes to Financial Statements UNITED INVESTORS INCOME PROPERTIES STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 61,063 $ -- $15,266 $15,266 Partners' (deficit) capital at December 31, 1998 61,063 $ (24) $10,830 $10,806 Distributions to partners -- (12) (1,226) (1,238) Net loss for the year ended December 31, 1999 -- (5) (535) (540) Partners' (deficit) capital at December 31, 1999 61,063 (41) 9,069 9,028 Distributions to partners -- (20) (1,972) (1,992) Net income for the year ended December 31, 2000 -- 5 463 468 Partners' (deficit) capital at December 31, 2000 61,063 $ (56) $ 7,560 $ 7,504
See Accompanying Notes to Financial Statements UNITED INVESTORS INCOME PROPERTIES STATEMENTS OF CASH FLOWS (in thousands)
Year Ended December 31, 2000 1999 Cash flows from operating activities: Net income (loss) $ 468 $ (540) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Equity in net (income) loss of joint venture (10) 190 Depreciation 387 425 Impairment loss on discontinued operation -- 600 Loss on sale of discontinued operation -- 246 Amortization of lease commissions -- 7 Change in accounts: Receivables and deposits 107 20 Other assets (3) 19 Accounts payable (57) 53 Tenant security deposit liabilities 8 (16) Accrued property taxes -- (7) Other liabilities (11) 56 Net cash provided by operating activities 889 1,053 Cash flows from investing activities: Property improvements and replacements (151) (231) Distributions from joint venture 19 40 Proceeds from sale of discontinued operation -- 615 Proceeds from sale of joint venture property 400 -- Net cash provided by investing activities 268 424 Cash flows used in financing activities: Distributions to partners (1,992) (1,238) Net (decrease) increase in cash and cash equivalents (835) 239 Cash and cash equivalents at beginning of year 1,167 928 Cash and cash equivalents at end of year $ 332 $ 1,167 Supplemental disclosure of non-cash activity: Sale of joint venture in exchange for receivable from affiliate $ -- $ 400
See Accompanying Notes to Financial Statements UNITED INVESTORS INCOME PROPERTIES NOTES TO FINANCIAL STATEMENTS December 31, 2000 Note A - Organization and Significant Accounting Policies Organization: United Investors Income Properties (the "Partnership" or "Registrant"), a Missouri Limited Partnership, was organized in June 1988, with the initial group of limited partners being admitted on July 27, 1988. Additional partners were admitted through May 1990. United Investors Real Estate, Inc., a Delaware Corporation, is the sole general partner ("UIRE" or the "General Partner") of the Partnership. UIRE was wholly-owned by MAE GP Corporation ("MAE GP"). Effective February 25, 1998, MAE GP was merged into Insignia Properties Trust ("IPT"), a subsidiary of Apartment Investment and Management Company ("AIMCO"). Thus, the General Partner is a subsidiary of AIMCO (see "Note B - Transfer of Control"). The Partnership Agreement states that the Partnership is to terminate on December 31, 2018, unless terminated prior to such date. As of December 31, 2000, the Partnership operates two residential properties in the northwest and one residential property in the south. Cash and cash equivalents: Includes cash on hand, in banks and money market accounts. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Cash balances include approximately $300,000 at December 31, 2000 that are maintained by the affiliated management company on behalf of affiliated entities in cash concentration accounts. Allocations of profits, losses and distributions: In accordance with the partnership agreement, all profits, losses and distributions are to be allocated 1% to the General Partner and 99% to the limited partners. Tenant Security Deposits: The Partnership requires security deposits from lessees for the duration of the lease and such deposits are included in receivables and deposits. Deposits are refunded when the tenant vacates, provided the tenant has not damaged its space and is current on its rental payments. Investment Properties: Investment properties consist of three apartment complexes and are stated at cost. Acquisition fees are capitalized as a cost of real estate. In accordance with 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", the Partnership records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. Costs of investment properties that have been permanently impaired have been written down to appraisal or estimated fair market value. No adjustment for impairment of value was recorded for the year ended December 31, 2000. During the year ended December 31, 1999, the Partnership determined that Peachtree Corners Medical Building located in Atlanta, Georgia, with a carrying value of approximately $1,451,000, was impaired and its value was written down by approximately $600,000. The fair value was based upon current economic conditions and projected future operational cash flows. The property was sold on December 30, 1999 (see "Note E - Impairment Loss and Sale of Discontinued Operation"). Depreciation: Depreciation is provided by the straight-line method over the estimated lives of the apartment properties and related personal property. For Federal income tax purposes, the accelerated cost recovery method is used (1) for real property over 15 years for additions prior to March 16, 1984, 18 years for additions after March 15, 1984, and before May 9, 1985, and 19 years for additions after May 8, 1985, and before January 1, 1987, and (2) for personal property over 5 years for additions prior to January 1, 1987. As a result of the Tax Reform Act of 1986, for additions after December 31, 1986, the modified accelerated cost recovery method is used for depreciation of (1) real property additions over 27 1/2 years and (2) personal property additions over 5 years. Fair Value of Financial Instruments: SFAS No. 107, "Disclosures about Fair Value of Financial Instruments", as amended by SFAS No. 119, "Disclosures about Derivative Financial Instruments and Fair Value of Financial Instruments", requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. Fair value is defined in the SFAS as the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Partnership believes that the carrying amount of its financial instruments approximates their fair value due to the short term maturity of these instruments. Leases: The Partnership leases its residential properties under short-term operating leases. Lease terms are generally one year or less in duration. The Partnership recognizes income as earned on its leases. In addition, the General Partner's policy is to offer rental concessions during periods of declining occupancy or in response to heavy competition from other similar complexes in the area. Concessions are charged against rental income as incurred. Uses of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Advertising: The Partnership expenses the costs of advertising as incurred. Advertising expense for its residential properties, included in operating expense, was approximately $49,000 and $37,000 for the years ended December 31, 2000 and 1999, respectively. Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information" established 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. It also establishes standards for related disclosures about products and services, geographic areas, and major customers (see "Note I" for detailed disclosure of the Partnership's segments). Note B - Transfer of Control Pursuant to a series of transactions which closed on October 1, 1998 and February 26, 1999, Insignia Financial Group, Inc. and IPT merged into AIMCO, a publicly traded real estate investment trust, with AIMCO being the surviving corporation (the "Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in the General Partner. The General Partner does not believe that this transaction has had or will have a material effect on the affairs and operations of the Partnership. Note C - Investment in Corinth Square Joint Venture The Partnership had a 35% investment in Corinth Square Joint Venture ("Joint Venture") with United Investors Income Properties II, an affiliated partnership in which the General Partner is also the sole general partner. The Partnership reflects its interest in the Joint Venture utilizing the equity method, whereby the original investment is increased by advances to the Joint Venture and by the Partnership's share of the earnings of the Joint Venture. The investment is decreased by distributions from the Joint Venture and by the Partnership's share of losses of the Joint Venture. On December 30, 1999, the Joint Venture sold its only investment property, Corinth Square, to an unaffiliated third party. The sale resulted in net proceeds of approximately $1,143,000 after payment of closing costs, resulting in a loss on sale of approximately $598,000. The Partnership's 1999 pro-rata share of this loss is approximately $209,000. The net proceeds were received by United Investors Income Properties II, of which approximately $400,000 was the Partnership's pro-rata share. This amount was received by the Partnership in January 2000. There are no assets or liabilities remaining on the balance sheet of Corinth Square at December 31, 2000. The condensed profit and loss statement of the Joint Venture for the years ended December 31, 2000 and 1999, is summarized as follows (in thousands): 2000 1999 Revenue $ 12 $ 378 Costs and expenses (3) (323) Income before gain (loss) on sale of property 9 55 Gain (loss) on sale of property 20 (598) Net income (loss) $ 29 $ (543) The Partnership's 35% equity interest in the loss on the sale of the Joint Venture property for the year ended December 31, 1999, was approximately $209,000. The equity interest in the income of the Joint Venture for the years ended December 31, 2000 and 1999 was approximately $10,000 and $19,000, respectively. Note D - Distributions During the year ended December 31, 2000, the Partnership paid distributions of cash generated from the sale of Peachtree Corners Medical Building and Corinth Square Joint Venture of approximately $1,003,000 (approximately $993,000 to the limited partners or $16.26 per limited partnership unit) and approximately $989,000 of cash generated from operations (approximately $979,000 to the limited partners or $16.03 per limited partnership unit). Subsequent to December 31, 2000, the Partnership declared distributions from operations of approximately $286,000 (approximately $283,000 to the limited partners or $4.63 per limited partnership unit). During the year ended December 31, 1999, the Partnership paid distributions of cash generated from operations of approximately $1,238,000 (approximately $1,226,000 to the limited partners or $20.08 per limited partnership unit). Note E - Impairment Loss and Sale of Discontinued Operation During the year ended December 31, 1999, the Partnership determined that the Peachtree Corners Medical Building located in Atlanta, Georgia, with a carrying value of approximately, $1,451,000 was impaired and its value was written down by approximately $600,000. The fair value was based upon current economic conditions and projected future operational cash flows. In December 1999, Peachtree Corners Medical Building was sold to an unaffiliated party for $700,000. After payment of closing expenses, the net sales proceeds received by the Partnership were approximately $615,000. For financial statement purposes, the sale resulted in a loss of approximately $246,000. Peachtree Corners Medical Building was the last commercial property in the commercial segment of the Partnership. Due to the sale of this property in December 1999, the results of the commercial segment have been classified as "(Loss) income from discontinued operation" and "Impairment loss on discontinued operation" for the years ended December 31, 2000 and 1999. Revenues for this property were approximately $6,000 and $151,000 for the years ended December 31, 2000 and 1999, respectively. The Partnership realized a loss from discontinued operation of approximately $5,000 during the year ended December 31, 2000 and income from discontinued operation of approximately $7,000 during the year ended December 31, 1999. Note F - Real Estate and Accumulated Depreciation Initial Cost To Partnership Buildings Net Costs and Related Capitalized Personal Subsequent to Description Land Property Acquisition (in thousands) (in thousands) Bronson Place Apartments $ 501 $ 2,568 $ 618 Defoors Crossing Apartments 520 2,480 473 Meadow Wood Apartments 501 2,884 441 Totals $ 1,522 $ 7,932 $ 1,532
Gross Amount At Which Carried At December 31, 2000 (in thousands) Buildings And Related Personal Accumulated Date of Date Depreciable Description Land Property Total Depreciation Construction Acquired Life-Years (in thousands) Bronson Place $ 501 $ 3,186 $ 3,687 $ 1,349 1988 11/01/88 5-40 Defoors Crossing 520 2,953 3,473 1,129 1988 05/01/89 5-40 Meadow Wood 501 3,325 3,826 1,260 1988 10/02/89 5-40 Totals $ 1,522 $ 9,464 $10,986 $ 3,738
Reconciliation of "Real Estate and Accumulated Depreciation": Years Ended December 31, 2000 1999 (in thousands) Investment Properties Balance at beginning of year $10,835 $12,513 Property improvements 151 231 Impairment loss on discontinued operation -- (600) Sale of discontinued operation -- (1,309) Balance at end of year $10,986 $10,835 Accumulated Depreciation Balance at beginning of year $ 3,351 $ 3,400 Amounts charged to expense 387 361 Sale of discontinued operation -- (410) Balance at end of year $ 3,738 $ 3,351 The aggregate cost of the real estate for Federal income tax purposes at December 31, 2000 and 1999, is approximately $11,103,000 and $10,952,000, respectively. The accumulated depreciation taken for Federal income tax purposes at December 31, 2000 and 1999, is approximately $3,767,000 and $3,323,000, respectively. Note G - 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 for reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following payments were made to affiliates of the General Partner during the years ended December 31, 2000 and 1999: 2000 1999 (in thousands) Property management fees (included in operating expenses) $ 92 $ 90 Reimbursement for services of affiliates (included in general and administrative expenses and investment properties) 47 38 Due to affiliate (included in other liabilities) 21 21 During the years ended December 31, 2000 and 1999, affiliates of the General Partner were entitled to receive 5% of gross receipts from all of the Partnership's residential properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $92,000 and $90,000 for the years ended December 31, 2000 and 1999, respectively. An affiliate of the General Partner received reimbursement of accountable administrative expenses amounting to approximately $47,000 and $38,000 for the years ended December 31, 2000 and 1999, respectively. For acting as real estate broker in connection with the 1999 sale of Peachtree Corners Medical Building, the General Partner earned a real estate commission of approximately $21,000. The commission was accrued at December 31, 1999 and 2000 and is included in other liabilities. However, this amount is not payable until the limited partners receive an amount equal to their adjusted capital investment and a cumulative distribution equal to an 8% annual return from the last additional closing date or, if greater, a 6% cumulative annual return from their date of admission to the Partnership. At December 31, 2000, the limited partners had not received their return. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates currently own 14,447 limited partnership units in the Partnership representing 23.66% of the outstanding units. A number of these units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will make one or more additional offers to acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters, which would include without limitation, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the General Partner because of their affiliation with the General Partner. Note H - Income Taxes The Partnership received a ruling from the Internal Revenue Service that it is to be classified as a partnership for Federal income tax purposes. Accordingly, no provision for income taxes is made in the financial statements of the Partnership. Taxable income or loss of the Partnership is reported in the income tax returns of its partners. The following is a reconciliation between net income (loss) as reported in the financial statements and Federal taxable income (loss) allocated to the partners in the Partnership's tax return for the years ended December 31, 2000 and 1999 (in thousands, except unit data): 2000 1999 Net income (loss) as reported $ 468 $ (540) Add (deduct): Deferred revenue and other liabilities 13 6 Depreciation differences (57) (29) Federal taxable income (loss) $ 424 $ (563) Federal taxable income (loss) per limited partnership unit $ 6.87 $(9.13) The following is a reconciliation between the Partnership's reported amounts and Federal tax basis of net assets at December 31, 2000 (in thousands): Net assets as reported $ 7,504 Differences in basis of assets and liabilities Deferred revenue and other liabilities (36) Accumulated depreciation (29) Commercial property at cost 118 Deferred charges and other assets 3 Other 8 Syndication costs 1,902 Net assets - tax basis $ 9,470 Note I - Segment Reporting Description of the types of products and services from which the reportable segment derives its revenues: The Partnership had two reportable segments: residential properties and commercial property. The Partnership's residential segment consists of three apartment complexes one each located in Mountlake Terrace, Washington; Atlanta, Georgia; and Medford, Oregon. The Partnership rents apartment units to tenants for terms that are typically twelve months or less. The commercial property segment consisted of a medical building located in Atlanta, Georgia. On December 30, 1999, the commercial property held by the Partnership was sold to an unrelated party. Therefore, the commercial segment is reflected as discontinued operations (see "Note E - Impairment Loss and Sale of Discontinued Operation" for further information regarding the commercial property sale). Measurement of segment profit or loss: The Partnership evaluates performance based on segment profit (loss) before depreciation. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Factors management used to identify the enterprise's reportable segment: The Partnership's reportable segments are investment properties that offer different products and services. The reportable segments are each managed separately because they provide distinct services with different types of products and customers. Segment information for the years ended December 31, 2000 and 1999 is shown in the tables below (in thousands). The "Other" column includes Partnership administration related items and income and expense not allocated to the reportable segments.
2000 Residential Commercial Other Totals (discontinued) Rental income $1,697 $ -- $ -- $1,697 Other income 132 -- 3 135 Depreciation 387 -- -- 387 General and administrative expense -- -- 131 131 Loss from discontinued operation -- (5) -- (5) Equity in income of joint venture -- -- 10 10 Segment profit (loss) 591 (5) (118) 468 Total assets 7,650 -- 18 7,668 Capital expenditures for investment properties 151 -- -- 151 1999 Residential Commercial Other Totals (discontinued) Rental income $1,675 $ -- $ -- $1,675 Other income 116 -- 23 139 Depreciation 361 -- -- 361 General and administrative expense -- -- 168 168 Income from discontinued operation -- 7 -- 7 Impairment loss on discontinued operation -- (600) -- (600) Loss on sale of discontinued operation -- (246) -- (246) Equity in loss of joint venture -- -- (190) (190) Segment profit (loss) 634 (839) (335) (540) Total assets 8,041 -- 1,211 9,252 Capital expenditures for investment properties 231 -- -- 231
Note J - Legal Proceedings The Partnership is unaware of any pending or outstanding litigation that is not of a routine nature arising in the ordinary course of business. Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. PART III Item 9. Directors, Executive Officers, Promoters and Control Persons, Compliance with Section 16(a) of the Exchange Act United Investors Income Properties (the "Registrant" or the "Partnership") has no officers or directors. The names of the directors and executive officers of United Investors Real Estate, Inc. ("UIRE" or the "General Partner"), their ages and the nature of all positions with UIRE presently held by them are set forth below. There are no family relationships between or among any officers and directors. Name Age Position Patrick J. Foye 43 Executive Vice President and Director Martha L. Long 41 Senior Vice President and Controller Patrick J. Foye has been Executive Vice President and Director of the General Partner since October 1, 1998. Mr. Foye has served as Executive Vice President of AIMCO since May 1998. Prior to joining AIMCO, Mr. Foye was a partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to 1998 and was Managing Partner of the firm's Brussels, Budapest and Moscow offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the Long Island Power Authority and serves as a member of the New York State Privatization Council. He received a B.A. from Fordham College and a J.D. from Fordham University Law School. Martha L. Long has been Senior Vice President and Controller of the General Partner since October 1998 as a result of the acquisition of Insignia Financial Group, Inc. As of February 2001, Ms. Long was also appointed head of the service business for AIMCO. From June 1994 until January 1997, she was the Controller for Insignia, and was promoted to Senior Vice President - Finance and Controller in January 1997, retaining that title until October 1998. From 1988 to June 1994, Ms. Long was Senior Vice President and Controller for The First Savings Bank, FSB in Greenville, South Carolina. One or more of the above persons are also directors and/or officers of a general partner (or general partner of a general partner) of limited partnerships which either have a class of securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, or are subject to the reporting requirements of Section 15(d) of such Act. Further, one or more of the above persons are also directors and/or officers of Apartment Investment and Management Company and the general partner of AIMCO Properties, L.P., entities that have a class of securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, or are subject to the reporting requirements of Section 15 (d) of such Act. The executive officers and director of the General Partner fulfill the obligations of the Audit Committee and oversee the Partnership's financial reporting process on behalf of the General Partner. Management has the primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the executive officers and director of the General Partner reviewed the audited financial statements with management including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The executive officers and director of the General Partner reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, their judgments as to the quality, not just the acceptability, of the Partnership's accounting principles and such other matters as are required to be discussed with the Audit Committee or its equivalent under generally accepted auditing standards. In addition, the Partnership has discussed with the independent auditors the auditors' independence from management and the Partnership including the matters in the written disclosures required by the Independence Standards Board and considered the compatibility of non-audit services with the auditors' independence. The executive officers and director of the General Partner discussed with the Partnership's independent auditors the overall scope and plans for their audit. In reliance on the reviews and discussions referred to above, the executive officers and director of the General Partner has approved the inclusion of the audited financial statements in the Form 10-KSB for the year ended December 31, 2000 for filing with the Securities and Exchange Commission. The General Partner has reappointed KPMG LLP as independent auditors to audit the financial statements of the Partnership for the current fiscal year. Fees for the last fiscal year were annual audit services of approximately $37,000 and non-audit services (principally tax-related) of approximately $15,000. Item 10. Executive Compensation No remuneration was paid by the Partnership to any officer or director of the General Partner during the year ended December 31, 2000. Item 11. Security Ownership of Certain Beneficial Owners and Management The following table sets forth those persons or entities known by the Registrant to be the beneficial owner of more than 5% of the Limited Partnership Units of the Registrant as of December 31, 2000 and the ownership interests in limited partnership units of the General Partner and its affiliates. Entity Number of Units Percentage United Investors Real Estate Inc. 950 1.56% (an affiliate of AIMCO) Insignia Properties LP 88 0.14% (an affiliate of AIMCO) AIMCO Properties LP 13,409 21.96% (an affiliate of AIMCO) United Investors Real Estate Inc. and Insignia Properties LP are both indirectly ultimately owned by AIMCO. Their business address is 55 Beattie Place, Greenville, South Carolina 29602. AIMCO Properties LP is indirectly ultimately controlled by AIMCO. Its business address is 2000 South Colorado Boulevard, Denver, Colorado 80222. Item 12. Certain Relationships and Related Transactions 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 for reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following payments were made to affiliates of the General Partner during the years ended December 31, 2000 and 1999: 2000 1999 (in thousands) Property management fees $ 92 $ 90 Reimbursement for services of affiliates 47 38 Due to affiliate 21 21 During the years ended December 31, 2000 and 1999, affiliates of the General partner were entitled to receive 5% of gross receipts from all of the Partnership's residential properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $92,000 and $90,000 for the years ended December 31, 2000 and 1999, respectively. An affiliate of the General Partner received reimbursement of accountable administrative expenses amounting to approximately $47,000 and $38,000 for the years ended December 31, 2000 and 1999, respectively. For acting as real estate broker in connection with the 1999 sale of Peachtree Corners Medical Building, the General Partner earned a real estate commission of approximately $21,000. The commission was accrued at December 31, 1999 and 2000 and is included in other liabilities. However, this amount is not payable until the limited partners receive an amount equal to their adjusted capital investment and a cumulative distribution equal to an 8% annual return from the last additional closing date or, if greater, a 6% cumulative annual return from his date of admission to the Partnership. At December 31, 2000, the limited partners had not received their return. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates currently own 14,447 limited partnership units in the Partnership representing 23.66% of the outstanding units. A number of these units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will make one or more additional offers to acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters, which would include without limitation, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the General Partner because of their affiliation with the General Partner. Item 13. Exhibits and Reports on Form 8-K (a) Exhibits: None. (b) Reports on Form 8-K filed during the quarter ended December 31, 2000: None. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. UNITED INVESTORS INCOME PROPERTIES By: United Investors Real Estate, Inc. Its General Partner By: /s/Patrick J. Foye Patrick J. Foye Executive Vice President By: /s/Martha L. Long Martha L. Long Senior Vice President and Controller Date: In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on the date indicated. /s/Patrick J. Foye Executive Vice President Date: Patrick J. Foye and Director /s/Martha L. Long Senior Vice President Date: Martha L. Long and Controller INDEX TO EXHIBITS Exhibit 1 Form of Dealer Manager Agreement between the General Partner and the Dealer Manager, including Form of Soliciting Broker Agreement; incorporated by reference to Exhibit 1 to Partnership's Amendment to Registration Statement (File No. 33-20350) previously filed on May 2, 1988. 1.1 Amendment to Dealer Manager Agreement; incorporated by reference to Exhibit 1.1 to Post-Effective Amendment No. 2 to Partnership's Registration Statement previously filed on March 21, 1989. 4.1 Form of Subscription Agreement; incorporated by reference as part of the Prospectus of Partnership contained in Partnership's Amendment to Registration Statement previously filed on May 2, 1988. 4.2 Form of Agreement of Limited Partnership of Partnership; incorporated by reference as part of the Prospectus of Partnership contained in Partnership's Amendment to Registration Statement previously filed on May 2, 1988. 4.3 Tenth Amendment to Agreement of Limited Partnership of Partnership; incorporated by reference to Exhibit 4.3 to Partnership's Quarterly Report on Form 10-Q previously filed on May 15, 1989. 10.1 Escrow Agreement among the Partnership, the General Partner, the Dealer Manager, and Boston Safe Deposit & Trust Company; incorporated by reference to Exhibit 10.1 to Partnership's Amendment to Registration Statement previously filed on May 2, 1988. 10.1.1 Amendment to Escrow Agreement; incorporated by reference to Exhibit 10.1.1 to Post-Effective Amendment No. 5 to Partnership's Registration Statement previously filed on October 19, 1989. 10.2 Agreement of Purchase and Sale, dated June 22, 1988, between United Investors Real Estate, Inc., as nominee for United Investors Income Properties, as purchaser, and Nilsen/Bay Ridge Development, Inc. and MBIV Development, as seller, relating to Bronson Place Apartments; incorporated by reference to Exhibit 10.1 to Partnership's Quarterly Report on Form 10-Q previously filed on August 11, 1988. 10.3 Agreement of Purchase and Sale, dated October 20, 1988, between United Investors Real Estate, Inc., as purchaser, and Defoors Crossing Associates, Ltd., as seller, relating to Defoors Crossing Apartments, and amendments thereto; incorporated by reference to Exhibit 10.3 to Post-Effective Amendment No.1 to Partnership's Registration Statement previously filed on February 1, 1989. 10.4 Agreement of Purchase and Sale, dated June 29, 1989, between United Investors Real Estate, Inc., as purchaser and CMW Properties, as seller, relating to Meadow Wood Apartments, and amendments thereto; incorporated by reference to Exhibit 10.4 to Partnership's Current Report on Form 8-K previously filed on October 17, 1989. 10.5 Agreement of Purchase and Sale, dated December 21, 1989, between United Investors Real Estate, Inc., as purchaser, and Corners Medical Group, Inc., as seller, relating to Peachtree Corners Medical Building, and amendments thereto; incorporated by reference to Exhibit 10.5 to Partnership's Quarterly Report on Form 10-Q previously filed on May 15, 1990. 10.6 Agreement of Purchase and Sale, dated June 29, 1990, between United Investors Real Estate, Inc., as purchaser, and American Fire Sprinkler Corporation, as seller, relating to Corinth Square Professional Building; incorporated by reference to Exhibit 10.6 to Partnership's Quarterly Report on Form 10-Q previously filed on August 15, 1990. 10.7 Agreement of Joint Venture of Corinth Square Associates dated October 1, 1990, between the Partnership and United Investors Income Properties II; incorporated by reference to Exhibit 4.4 to Partnership's Current Report on Form 8-K previously filed on October 23, 1990. 10.8 Stock Purchase Agreement dated December 4, 1992, showing the purchase of 100% of the outstanding stock of United Investors Real Estate, Inc. by MAE GP Corporation; incorporated by reference to Exhibit 10.8 to Partnership's Current Report on Form 8-K previously filed on December 31, 1992. 10.9 Purchase and Sale Contract between Registrant and Cadle's Peachtree Medical Building, an Ohio Limited Liability Company, dated December 30, 1999; Incorporated by reference to Exhibit 10.9 to the Partnership's Annual Report on Form 10-KSB dated December 31, 1999. 10.10Addendum to Purchase and Sale Contract between Registrant and Cadle's Peachtree Medical Building, an Ohio Limited Liability Company, dated December 30, 1999; Incorporated by reference to Exhibit 10.10 to the Partnership's Annual Report on Form 10-KSB dated December 31, 1999. 10.11Purchase and Sale Contract between Corinth Square Associates and The Cadle Company, an Ohio Corporation, dated December 30, 1999 relating to Corinth Square Professional Building; Incorporated by reference to Exhibit 10.11 to the Partnership's Annual Report on Form 10-KSB dated December 31, 1999. 10.12Addendum to Purchase and Sale Contract between Corinth Square Associates and The Cadle Company, an Ohio Corporation, dated December 30, 1999 relating to Corinth Square Professional Building; Incorporated by reference to Exhibit 10.12 to the Partnership's Annual Report on Form 10-KSB dated December 31, 1999. 16 Letter dated October 1, 1998 from the Registrant's former accountant incorporated by reference to Exhibit (c) filed with Registrant's Current Report on Form 8-K/A dated September 23, 1998. -----END PRIVACY-ENHANCED MESSAGE-----