-----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, IIZpZqul6RCM9CzYW2UbXb8gx0MYgBfVxPQUSFDDo4KqvWyoO+YtmTjVNlWzwzn3 TEe422s5wOL7hJtOObZOtQ== 0000830056-97-000010.txt : 19970813 0000830056-97-000010.hdr.sgml : 19970813 ACCESSION NUMBER: 0000830056-97-000010 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970812 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED INVESTORS INCOME PROPERTIES CENTRAL INDEX KEY: 0000830056 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 431483942 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-17646 FILM NUMBER: 97657149 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: P.O. 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 U.S. 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 June 30, 1997 [ ] 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 0-17646 UNITED INVESTORS INCOME PROPERTIES (Exact name of small business issuer as specified in its charter) Missouri 43-1483942 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) UNITED INVESTORS INCOME PROPERTIES BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 1997 Assets Cash and cash equivalents: Unrestricted $ 735 Restricted-tenant security deposits 56 Accounts receivable 8 Escrow for taxes and insurance 115 Other assets 67 Investment in Joint Venture 626 Investment properties: Land $ 1,862 Buildings and related personal property 10,390 12,252 Less accumulated depreciation (2,801) 9,451 $11,058 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 8 Tenant security deposits 56 Accrued taxes 29 Other liabilities 25 Partners' Capital (Deficit) General partner's $ (24) Limited partners' (61,063 units issued and outstanding) 10,964 10,940 $11,058 See Accompanying Notes to Financial Statements b) UNITED INVESTORS INCOME PROPERTIES STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 Revenues: Rental income $ 433 $ 407 $ 847 $ 791 Other income 29 31 51 59 Total revenues 462 438 898 850 Expenses: Operating 131 137 261 248 General and administrative 22 18 41 39 Maintenance 42 47 92 94 Depreciation 94 88 188 175 Property taxes 42 38 83 76 Total expenses 331 328 665 632 Equity in income of joint venture 9 12 13 18 Net income $ 140 $ 122 $ 246 $ 236 Net income allocated to general partner (1%) $ 1 $ 1 $ 2 $ 2 Net income allocated to limited partners (99%) 139 121 244 234 $ 140 $ 122 $ 246 $ 236 Net income per limited partnership unit $ 2.28 $ 1.98 $ 4.00 $ 3.83 See Accompanying Notes to Financial Statements
c) UNITED INVESTORS INCOME PROPERTIES STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (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, 1996 61,063 $ (23) $ 11,025 $ 11,002 Partners' distributions -- (3) (305) (308) Net income for the six months ended June 30, 1997 -- 2 244 246 Partners' (deficit) capital at June 30, 1997 61,063 $ (24) $ 10,964 $ 10,940 See Accompanying Notes to Financial Statements
d) UNITED INVESTORS INCOME PROPERTIES STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, 1997 1996 Cash flows from operating activities: Net income $ 246 $ 236 Adjustments to reconcile net income to net cash provided by operating activities: Equity in net income of joint venture (13) (18) Depreciation 188 175 Amortization of lease commissions 3 2 Change in accounts: Restricted cash (7) (4) Accounts receivable 1 (3) Escrows for taxes (46) (62) Other assets 15 (4) Accounts payable (9) 9 Tenant security deposit liabilities 7 4 Accrued taxes 29 29 Other liabilities 3 35 Net cash provided by operating activities 417 399 Cash flows from investing activities: Property improvements and replacements (65) (18) Distributions from joint venture 58 -- Net cash used in investing activities (7) (18) Cash flows from financing activities: Partners' distributions (308) (308) Net cash used in financing activities (308) (308) Net increase in unrestricted cash and cash equivalents 102 73 Unrestricted cash and cash equivalents at beginning of period 633 637 Unrestricted cash and cash equivalents at end of period $ 735 $ 710 See Accompanying Notes to Financial Statements
e) UNITED INVESTORS INCOME PROPERTIES NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements of United Investors Income Properties (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 United Investors Real Estate, Inc. (the "General Partner"), a Delaware corporation, 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, 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 fiscal year ended December 31, 1996. Certain reclassifications have been made to the 1996 information to conform to the 1997 presentation. NOTE B - BASIS OF ACCOUNTING The financial statements include the Partnership's operating divisions, Bronson Place Apartments, Defoors Crossing Apartments, Meadow Wood Apartments, and Peachtree Corners Medical Building. In addition, the Partnership owns a 35% interest in Corinth Square Associates ("Corinth"). The Partnership reflects its interest in Corinth utilizing the equity method whereby the original investment is increased by advances to Corinth and the Partnership's share of Corinth earnings. The investment is reduced by distributions from Corinth and the Partnership's share of Corinth losses. NOTE C - 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 based on a percentage of revenue and for reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following payments were made to affiliates of Insignia for each of the six month periods ended June 30, 1997 and 1996 (in thousands): Six Months Ended June 30, 1997 1996 Property management fees (included in operating expenses) $42 $40 Reimbursement for services of affiliates (included in general and administrative expenses) 16 16 The Partnership insures its properties 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. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of three apartment complexes and a commercial office building. The following table sets forth the average occupancy of the properties for the six months ended June 30, 1997 and 1996: Average Occupancy Property 1997 1996 Bronson Place Apartments Mountlake Terrace, Washington 95% 93% Meadow Wood Apartments Medford, Oregon 91% 93% Defoors Crossing Apartments Atlanta, Georgia 92% 96% Peachtree Corners Medical Building Atlanta, Georgia 74% 49% The increase in occupancy at Peachtree Corners Medical Building is due to increased marketing efforts and property improvements made during the second and third quarters of 1996, to attract quality long-term tenants. The decrease in occupancy at Meadow Wood and Defoors Crossings Apartments is due to increased competition and a favorable housing market in the local community. The Partnership realized net income of $246,000 for the six months ended June 30, 1997, of which approximately $140,000 was income for the second quarter. The net income for the corresponding periods of 1996 was approximately $236,000 and approximately $122,000, respectively. The increase in net income, for the six months ended June 30, 1997, was primarily due to an increase in rental revenue resulting from the increase in occupancy at Peachtree Corners. Also contributing to the increased rental revenue was increased rental rates at all of the residential properties. The increase in rental income was partially offset by increased operating and depreciation expenses and decreased other income. Operating expenses increased during the six month period due to advertising and rental concessions at Defoors Crossing, which were incurred in an effort to increase occupancy at the property. Depreciation expenses increased primarily due to tenant improvements at Peachtree during the second and third quarters of 1996. Other income decreased due to fewer lease cancellation fees being earned at Defoors Crossing Apartments in 1997. Included in maintenance expense for the six months ended June 30, 1997 is approximately $5,000 of major repairs and maintenance comprised primarily of swimming pool repairs. Included in maintenance for the six months ended June 30, 1996 is approximately $16,000 of major repairs and maintenance comprised primarily of parking lot and exterior building repairs. 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 expenses. 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. At June 30, 1997, the Partnership held unrestricted cash and cash equivalents of $735,000 compared to $710,000 at June 30, 1996. Net cash provided by operating activities increased due to increased rental income and a decrease in deposits to tax and insurance escrows. Net cash provided by investing activities increased in 1997 due to cash distributions from the joint venture being received during the six months ended June 30, 1997, compared to no distributions in the six months ended June 30, 1996. 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. Distributions to partners of $308,000 were made during each of the six month periods ended June 30, 1997 and 1996, respectively. Future cash distributions will depend on the levels of net cash generated from operations, property sales and the availability of cash reserves. 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 June 30, 1997. SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. UNITED INVESTORS INCOME PROPERTIES By: United Investors Real Estate, Inc., Its 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: August 12, 1997 EX-27 2
5 This schedule contains summary financial information extracted from United Investors Income Properties 1997 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000830056 UNITED INVESTORS INCOME PROPERTIES 1,000 6-MOS DEC-31-1997 JUN-30-1997 735 0 8 0 0 0 12,252 2,801 11,058 0 0 0 0 0 10,940 11,058 0 898 0 0 665 0 0 0 0 0 0 0 0 246 4.00 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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