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
- -----
EXCHANGE ACT OF 1934.
For the quarterly period end June 30, 1998
---------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the transition period from to
------------ ------------
Commission file number 0-11127
-------
BALCOR REALTY INVESTORS LTD.-82
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-3139801
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road
Bannockburn, Illinois 60015
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
--------------
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
----- -----
<PAGE>
BALCOR REALTY INVESTORS LTD. - 82
(An Illinois Limited Partnership)
BALANCE SHEETS
June 30, 1998 and December 31, 1997
(Unaudited)
ASSETS
1998 1997
------------- -------------
Cash and cash equivalents $ 1,491,270 $ 2,042,608
Accounts and accrued interest receivable 6,514 14,922
------------- -------------
1,497,784 2,057,530
============= =============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 22,473 $ 12,680
Due to affiliates 37,384 25,746
------------- -------------
Total liabilities 59,857 38,426
------------- -------------
Commitments and contingencies
Limited Partners' capital
(74,133 Interests issued
and outstanding) 1,550,166 2,131,343
General Partner's deficit (112,239) (112,239)
------------- -------------
Total partners' capital 1,437,927 2,019,104
------------- -------------
$ 1,497,784 $ 2,057,530
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD. - 82
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the six months ended June 30, 1998 and 1997
(Unaudited)
1998 1997
------------- -------------
Income:
Rental and service $ 644,285
Interest on short-term investments $ 41,408 75,696
------------- -------------
Total income 41,408 719,981
------------- -------------
Expenses:
Interest on mortgage notes payable 126,547
Depreciation 62,414
Amortization of deferred expenses 7,307
Property operating 366,167
Real estate taxes 8,950 64,727
Property management fees 32,133
Administrative 117,888 130,882
------------- -------------
Total expenses 126,838 790,177
------------- -------------
Loss before gain on sale of
property and extraordinary item (85,430) (70,196)
Gain on sale of property 8,887,873
------------- -------------
(Loss) income before extraordinary item (85,430) 8,817,677
Extraordinary item:
Debt extinguishment expense (229,431)
------------- -------------
Net (loss) income $ (85,430) $ 8,588,246
============= =============
Income before extraordinary item
allocated to General Partner None $ 3,528,654
============= =============
(Loss)income before extraordinary item
allocated to Limited Partners $ (85,430) $ 5,289,023
============= =============
(Loss)income before extraordinary item
per Limited Partnership Interest
(74,133 issued and outstanding)
- Basic and Diluted $ (1.15) $ 71.34
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD. - 82
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the six months ended June 30, 1998 and 1997
(Unaudited)
(Continued)
1998 1997
------------- -------------
Extraordinary item allocated to
General Partner None $ (2,294)
============= =============
Extraordinary item allocated to
Limited Partners None $ (227,137)
============= =============
Extraordinary item per Limited
Partnership Interest (74,133
issued and outstanding)
- Basic and Diluted None $ (3.06)
============= =============
Net income allocated to General Partner None $ 3,526,360
============= =============
Net (loss) income allocated to
Limited Partners $ (85,430) $ 5,061,886
============= =============
Net (loss) income per Limited Partnership
Interest (74,133 issued and outstanding)
- Basic and Diluted $ (1.15) $ 68.28
============= =============
Distributions to Limited Partners $ 495,747 $ 8,080,497
============= =============
Distributions per Limited Partnership
Interest $ 6.69 $ 109.00
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD. - 82
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended June 30, 1998 and 1997
(Unaudited)
1998 1997
------------- -------------
Income:
Interest on short-term investments $ 19,917 $ 44,083
------------- -------------
Total income 19,917 44,083
------------- -------------
Expenses:
Property operating 46,924
Administrative 49,206 62,513
------------- -------------
Total expenses 49,206 109,437
------------- -------------
Net loss $ (29,289) $ (65,354)
============= =============
Net loss allocated to General Partner None None
============= =============
Net loss allocated to Limited Partners $ (29,289) $ (65,354)
============= =============
Net loss per Limited Partnership
Interest (74,133 issued and outstanding)
- Basic and Diluted $ (0.39) $ (0.88)
============= =============
Distribution to Limited Partners None $ 4,077,315
============= =============
Distribution per Limited Partnership Interest None $ 55.00
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD. - 82
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1998 and 1997
(Unaudited)
1998 1997
------------- -------------
Operating activities:
Net (loss) income $ (85,430) $ 8,588,246
Adjustments to reconcile net (loss)
income to net cash used in
operating activities:
Gain on sale of property (8,887,873)
Debt extinguishment expense 229,431
Depreciation of property 62,414
Amortization of deferred expenses 7,307
Net change in:
Accounts and accrued
interest receivable 8,408 58,596
Escrow deposits 284,574
Prepaid expenses 23,719
Accounts payable 9,793 (7,604)
Due to affiliates 11,638 (12,336)
Accrued liabilities (310,641)
Security deposits (47,624)
------------- -------------
Net cash used in
operating activities (55,591) (11,791)
------------- -------------
Investing activities:
Proceeds from sale of real estate 6,686,722
Payment of selling costs (369,746)
-------------
Net cash provided by investing activities 6,316,976
-------------
Financing activities:
Distributions to Limited Partners (495,747) (8,080,497)
Principal payments on mortgage
note payable (48,660)
Funding of capital improvement escrow (16,000)
Disbursements from capital
improvement escrow 52,106
------------- -------------
Net cash used in financing activities (495,747) (8,093,051)
------------- -------------
Net change in cash and cash equivalents (551,338) (1,787,866)
Cash and cash equivalents at beginning
of period 2,042,608 4,440,715
------------- -------------
Cash and cash equivalents at end of period $ 1,491,270 $ 2,652,849
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policies:
(a) The loss allocation between Limited Partners and the General Partner has
been adjusted for financial statement purposes in order that the capital
account balances more accurately reflect their remaining economic interests as
provided for in the Partnership Agreement.
(b) In the opinion of management, all adjustments necessary for a fair
presentation have been made to the accompanying statements for the six months
and quarter ended June 30, 1998, 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. During 1997, the Partnership sold its remaining property. The
Partnership has retained a portion of the cash from property sales 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 5 of Notes to the
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. Interest Expense:
During the six months ended June 30, 1997, the Partnership incurred interest
expense of $126,547 and paid interest expense of $147,831 on the mortgage note
payable.
4. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
six months and quarter ended June 30, 1998 are:
Paid
-------------------------
Six Months Quarter Payable
------------ --------- ---------
<PAGE>
Reimbursement of expenses to
the General Partner, at cost $ 8,875 $ 2,590 $ 37,384
5. Contingency:
The Partnership is currently involved in a lawsuit whereby the Partnership and
certain affiliates have been named as defendants alleging certain state
securities and common law violations with regard to the property acquisition
process of the Partnership, and to the adequacy and accuracy of disclosures of
information concerning, as well as the 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 yet been certified, and no determination of the merits have been made. It
is not determinable at this time whether or not an unfavorable decision in this
action would have a material adverse impact on the financial position of the
Partnership. The Partnership believes it has meritorious defenses to contest
the claims.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Realty Investors Ltd.-82 (the "Partnership") is a limited partnership
formed in 1981 to invest in and operate income-producing real property. The
Partnership raised $74,133,000 through the sale of Limited Partnership
Interests and utilized these proceeds to acquire fourteen real property
investments. As of June 30, 1998, the Partnership has 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 1997 for a more complete understanding of
the Partnership's financial position.
Operations
- ----------
Summary of Operations
- ---------------------
Administrative expenses were higher than interest income earned on short-term
investments during the six months and quarter ended June 30, 1998. This was the
primary reason the Partnership recognized a net loss for the six months and
quarter ended June 30, 1998. During 1997, the Partnership recognized a gain on
the sale of the Balcones Woods Apartments, which was the primary reason the
Partnership recognized net income for the six months ended June 30, 1997.
Administrative and property operating expenses were higher than interest income
earned on short term investments during the quarter ended June 30, 1997. This
was the primary reason the Partnership recognized a net loss during the quarter
ended June 30, 1997. Further discussion of the Partnership's operations is
summarized below.
1998 Compared to 1997
- ---------------------
Unless otherwise noted, discussions of fluctuations between 1998 and 1997 refer
to both the six months and quarters ended June 30, 1998 and 1997.
During 1997, the Partnership sold the Balcones Woods Apartments and recognized
a gain on sale of $8,887,873. As a result of the sale of this property, rental
and service income, interest expense on mortgage note payable, depreciation,
amortization, property operating, and property management fees ceased in 1997.
Higher average cash balances were available for investment during 1997 due to
the proceeds received in connection with the 1996 and 1997 property
sales prior to distribution to Limited Partners in January and April 1997. This
resulted in a decrease in interest income on short-term investments during 1998
as compared to 1997.
<PAGE>
Real estate taxes ceased during 1997 due to the sale of the Balcones Woods
Apartments in 1997. However, the Partnership paid additional 1997 real estate
taxes related to the Balcones Woods Apartments during 1998.
Primarily as a result of lower accounting and portfolio management fees,
administrative expenses decreased during 1998 as compared to 1997. This
decrease was partially offset by an increase in legal fees incurred in
connection with the litigation discussed in Note 5 of Notes to the Financial
Statements.
During 1997, the Partnership wrote-off the remaining unamortized deferred
expenses in connection with the sale of the Balcones Woods Apartments of
$229,431. This amount was recognized as debt extinguishment expense and
classified as an extraordinary item for financial statements purposes.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership decreased by approximately $551,000 as of
June 30, 1998 when compared to December 31, 1997 primarily due to the
distribution of remaining available Net Cash Proceeds in January 1998. The
Partnership used cash of approximately $56,000 in its operating activities to
pay administrative expenses and real estate taxes related to the Balcones Woods
Apartments, which were partially offset by interest income earned on short-term
investments. The Partnership used cash in its financing activities of
approximately $496,000 to pay a distribution to Limited Partners.
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. During 1997, the Partnership sold its remaining property. The
Partnership has retained a portion of the cash from property sales to satisfy
obligations of the Partnership as well as 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 5 of Notes to the
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
conclusions of these contingencies.
To date, Limited Partners have received distributions of Net Cash Receipts of
$46.90 and Net Cash Proceeds of $555.69, totaling $602.59 per $1,000 Interest,
as well as certain tax benefits. No additional 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.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
- -------------
(4) Certificate of Limited Partnership set forth as Exhibit 4.1 to Amendment
No. 1 to the Registrant's Registration Statement on Form S-11 dated December
11, 1981 (Registration No. 2-74358), 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. 0-11127)
are incorporated herein by reference.
(10)(a)(i) Agreement of Sale and attachments there to relating to the sale of
the Eagles Pointe Apartments, Norcross, Georgia previously filed as Exhibit
(2)(a) to the Registrant's Current Report on Form 8-K dated July 22, 1996, is
incorporated herein by reference.
(ii) First Amendment to Agreement of Sale relating to the sale of Eagles
Pointe Apartments, Norcross, Georgia, previously filed as Exhibit (10)(a)(ii)
to the Registrant's Report on Form 10-Q for the quarter ended September 30,
1996, is incorporated herein by reference.
(b)(i) Agreement of sale relating to the sale of the Songbird Apartments, Phase
I and Phase II, San Antonio, Texas, previously filed as Exhibit (2)(b) to the
Registrant's Current Report on Form 8-K dated July 22, 1996, is incorporated
herein by reference.
(ii) Letter Agreements relating to the sale of the Songbird Apartments, Phase I
and Phase II, San Antonio, Texas, dated August 15, 1996, August 20, 1996, and
August 26, 1996, previously filed as Exhibit (10)(b)(ii) to the Registrant's
Report on Form 10-Q for the quarter ended September 30, 1996, are incorporated
herein by reference.
(c)(i) Agreement of Sale and attachment thereto relating to the sale of the
Balcones Woods Apartments, Austin, Texas, previously filed as Exhibit (2) to
the Registrant's Current Report on Form 8-K dated February 11, 1997, is
incorporated herein by reference.
(ii) First Amendment to Agreement of Sale relating to the sale of Balcones
Woods Apartments, Austin, Texas, previously filed as Exhibit (10)(c)(ii) to the
Registrant's Report on Form 10-K for the year ended December 31, 1996, is
incorporated herein by reference.
(iii) Letter Agreements dated February 24, 1997 and February 26, 1997 relating
to the sale of Balcones Woods Apartments, Austin, Texas, previously filed as
<PAGE>
Exhibit (10)(c)(iii) to the Registrant's Report on Form 10-K for the year ended
December 31, 1996, is incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for the six months ending June
30, 1998 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended June 30, 1998.
<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 REALTY INVESTORS LTD.-82
By: /s/ Thomas E. Meador
-----------------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Partners-XI, the General Partner
By: /s/ Jayne A. Kosik
-----------------------------
Jayne A. Kosik
Senior Managing Director and Chief
Financial Officer (Principal Accounting
Officer) of Balcor Partners-XI, the
General Partner
Date: August 12, 1998
--------------------------
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 1491
<SECURITIES> 0
<RECEIVABLES> 7
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1498
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1498
<CURRENT-LIABILITIES> 60
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1438
<TOTAL-LIABILITY-AND-EQUITY> 1498
<SALES> 0
<TOTAL-REVENUES> 41
<CGS> 0
<TOTAL-COSTS> 9
<OTHER-EXPENSES> 118
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (86)
<INCOME-TAX> 0
<INCOME-CONTINUING> (86)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (86)
<EPS-PRIMARY> (1.15)
<EPS-DILUTED> (1.15)
</TABLE>
