SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1999
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-9541
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BALCOR EQUITY PROPERTIES LTD.-VIII
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(Exact name of registrant as specified in its charter)
Illinois 36-3011615
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road, Suite A200
Bannockburn, Illinois 60015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
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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
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BALCOR EQUITY PROPERTIES, LTD. - VIII
(An Illinois Limited Partnership)
BALANCE SHEETS
March 31, 1999 and December 31, 1998
(Unaudited)
ASSETS
1999 1998
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Cash and cash equivalents $ 856,974 $ 882,940
Prepaid expenses 1,896
Accrued interest receivable 3,455 3,780
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$ 862,325 $ 886,720
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LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 18,465 $ 28,259
Due to affiliates 24,600 22,085
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Total liabilities 43,065 50,344
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Commitments and contingencies
Limited Partners' capital (30,005
Interests issued and outstanding) 839,896 857,012
General Partner's deficit (20,636) (20,636)
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Total partners' capital 819,260 836,376
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$ 862,325 $ 886,720
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The accompanying notes are an integral part of the financial statements.
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BALCOR EQUITY PROPERTIES, LTD. - VIII
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1999 and 1998
(Unaudited)
1999 1998
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Income:
Interest on short-term investments $ 10,330 $ 12,971
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Total income 10,330 12,971
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Expenses:
Property operating 30,810
Administrative 27,446 68,297
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Total expenses 27,446 99,107
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Net loss $ (17,116) $ (86,136)
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Net loss allocated to General Partner None None
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Net loss allocated to Limited Partners $ (17,116) $ (86,136)
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Net loss per Limited Partners Interest
(30,005 issued and outstanding) - Basic
and Diluted $ (0.57) $ (2.87)
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The accompanying notes are an integral part of the financial statements.
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BALCOR EQUITY PROPERTIES, LTD. - VIII
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1999 and 1998
(Unaudited)
1999 1998
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Operating activities:
Net loss $ (17,116) $ (86,136)
Adjustments to reconcile net loss to net
cash used in operating activities:
Net change in:
Accounts and accrued interest
receivable 325 20,798
Prepaid expenses (1,896) (1,702)
Accounts payable (9,794) 233
Due to affiliates 2,515 5,451
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Net cash used in operating activities (25,966) (61,356)
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Net change in cash and cash equivalents (25,966) (61,356)
Cash and cash equivalents at beginning
of period 882,940 1,002,912
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Cash and cash equivalents at end of period $ 856,974 $ 941,556
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES LTD.-VIII
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the quarter ended March 31,
1999, and all such adjustments are of a normal and recurring nature.
2. Partnership Termination:
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. The Partnership sold its final real estate investment in July
1997. The Partnership has retained a portion of the cash to satisfy obligations
of the Partnership as well as to establish a reserve for contingencies. The
timing of the termination of the Partnership and final distribution of cash
will depend upon the nature and extent of liabilities and contingencies which
exist or may arise. Such contingencies may include legal and other fees and
costs stemming from litigation involving the Partnership including, but not
limited to, the lawsuit discussed in Note 4 of Notes to Financial Statements.
Due to this litigation, the Partnership will not be dissolved and reserves will
be held by the Partnership until the conclusion of all contingencies. There can
be no assurances as to the time frame for conclusion of these contingencies.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1999 are:
Paid Payable
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Reimbursement of expenses to
the General Partner, at cost $9,658 $24,600
4. Contingency:
The Partnership is currently involved in a lawsuit Masri vs. Lehman Brothers,
Inc., et. al., whereby the Partnership and certain affiliates were named as
defendants alleging claims involving certain state securities and common law
violations with regard to the adequacy and accuracy of disclosures of
information concerning, as well as marketing efforts related to, the offering
of the Limited Partnership Interests of the Partnership. The defendants
continue to vigorously contest this action. A plaintiff class has not been
certified in the action and, no determinations upon any significant issues have
been made. It is not determinable at this time how the outcome of this action
will impact the remaining cash reserves of the Partnership. The Partnership
believes it has meritorious defenses to contest the claims.
<PAGE>
BALCOR EQUITY PROPERTIES LTD.-VIII
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Equity Properties Ltd.-VIII (the "Partnership") was formed in 1979 to
invest in and operate income-producing real property. The Partnership raised
$30,005,000 through the sale of Limited Partnership Interests and utilized
these proceeds to acquire thirteen real property investments. As of March 31,
1999, the Partnership had no properties remaining in its portfolio.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1998 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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The operations of the Partnership in 1999 and 1998 consisted primarily of
administrative expenses which were partially offset by interest income earned
on short-term investments. In addition, the Partnership paid property operating
expenses in 1998 relating to properties sold in prior years. Primarily as a
result of these property operating expenses paid in 1998 and lower
administrative expenses in 1999, the Partnership's net loss decreased during
1999 as compared to 1998. Further discussion of the Partnership's operations is
summarized below.
1999 Compared to 1998
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Discussions of fluctuations between 1999 and 1998 refer to the quarters ended
March 31, 1999 and 1998.
As a result of lower average cash balances, interest income on short-term
investments decreased during 1999 when compared to 1998.
During 1998, the Partnership paid property operating expenses related to three
of the properties sold in 1997.
Primarily due to a decrease in accounting fees, administrative expenses
decreased during 1999 when compared to 1998.
Liquidity and Capital Resources
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The cash position of the Partnership decreased by approximately $26,000 as of
March 31, 1999 as compared to December 31, 1998 due to cash used in operating
activities for the payment of administrative expenses, which was partially
offset by interest income earned on short-term investments.
<PAGE>
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. The Partnership sold its final real estate investment in July
1997. The Partnership has retained a portion of the cash to satisfy obligations
of the Partnership as well as to establish a reserve for contingencies. The
timing of the termination of the Partnership and final distribution of cash
will depend upon the nature and extent of liabilities and contingencies which
exist or may arise. Such contingencies may include legal and other fees and
costs stemming from litigation involving the Partnership including, but not
limited to, the lawsuit discussed in Note 4 of Notes to Financial Statements.
Due to this litigation, the Partnership will not be dissolved and reserves will
be held by the Partnership until the conclusion of all contingencies. There can
be no assurances as to the time frame for conclusion of these contingencies.
Limited Partners have received distributions totaling $622.57 per $1,000
Interest, as well as certain tax benefits. Of this amount, $173.33 represents
Cash Flow from operations and $449.24 represents Net Cash Proceeds. No
distributions are anticipated to be made prior to the termination of the
Partnership. However, after paying final partnership expenses, any remaining
cash reserves will be distributed. Limited Partners will not recover all of
their original investment.
The Partnership sold all of its remaining real property investments and
distributed a majority of the proceeds from these sales to Limited Partners in
1996 and 1997. Since the Partnership no longer has any operating assets, the
number of computer systems and programs necessary to operate the Partnership
has been significantly reduced. The Partnership relies on third party vendors
to perform most of its functions and has implemented a plan to determine the
Year 2000 compliance status of these key vendors. The Partnership is within its
timeline for having these plans completed prior to the year 2000.
The Partnership's plan to determine the Year 2000 compliance status of its key
vendors involves the solicitation of information from these vendors through the
use of surveys, follow-up discussions and review of data where needed. The
Partnership has sent out surveys to these vendors and received back a majority
of these surveys. While the Partnership cannot guarantee Year 2000 compliance
by its key vendors, and in many cases will be relying on statements from these
vendors without independent verification, preliminary surveys indicate that the
key vendors performing services for the Partnership are aware of the issues and
are working on a solution to achieve compliance before the year 2000. The
Partnership is in the process of developing a contingency plan in the event any
of its key vendors are not Year 2000 compliant prior to the year 2000. As part
of its contingency plan, the Partnership will identify replacement vendors in
the event that current vendors are not substantially Year 2000 compliant by
June 30, 1999. The Partnership does not believe that failure by any of its key
vendors to be Year 2000 compliant by the year 2000 would have a material effect
on the business, financial position or results of operations of the
Partnership.
<PAGE>
BALCOR EQUITY PROPERTIES LTD.-VIII
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
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(3) Exhibits:
(3) The Amended and Restated Agreement of Limited Partnership previously filed
as Exhibit 2(a) to Amendment No. 5 to the Registrant's Registration Statement
on Form S-11 dated July 16, 1980 (Registration No. 2-63821) is incorporated
herein by reference.
(4) Certificate of Limited Partnership set forth as Exhibit 4 to Amendment
No. 2 to the Registrant's Registration Statement on Form S-11 dated
February 26, 1980 (Registration No. 2-63821) and Form of Confirmation regarding
Interests in the Registrant set forth as Exhibit 4.2 to the Registrant's Report
on Form 10-Q for the quarter ended June 30, 1992 (Commission File No. 0-9541)
are incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for the quarter ending March 31,
1999 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended March 31, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR EQUITY PROPERTIES LTD.-VIII
By: /s/Thomas E. Meador
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Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of BRI
Partners-79, the General Partner
By: /s/Jayne A. Kosik
-----------------------------
Jayne A. Kosik
Senior Managing Director and Chief Financial
Officer (Principal Accounting and Financial
Officer) of BRI Partners-79, the General
Partner
Date: May 7, 1999
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<PAGE>
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<PERIOD-END> MAR-31-1999
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0
0
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<LOSS-PROVISION> 0
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<INCOME-PRETAX> (17)
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<NET-INCOME> (17)
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