UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1998
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 0-11127
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BALCOR REALTY INVESTORS LTD.-82
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(Exact name of registrant as specified in its charter)
Illinois 36-3139801
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Rd.
Bannockburn, IL 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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Securities registered pursuant to Section 12(b) of the Act: None
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Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
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(Title of class)
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to
this Form 10-K. [ X ]
<PAGE>
PART I
Item 1. Business
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Balcor Realty Investors Ltd.- 82 (the "Registrant") is a limited partnership
formed in 1981 under the laws of the State of Illinois. The Registrant raised
$74,133,000 from sales of Limited Partnership Interests. The Registrant has
retained cash reserves from the sale of its real estate investments for
contingencies which exist or may arise. The Registrant's operations currently
consist of interest income earned on short-term investments and the payment of
administrative expenses.
The Registrant utilized the net offering proceeds to acquire fourteen real
property investments and has since disposed of all of these investments. The
Partnership Agreement provides that the proceeds of any sale or refinancing of
the Registrant's properties will not be reinvested in new acquisitions.
The Partnership Agreement provides for the dissolution of the Registrant upon
the occurrence of certain events, including the disposition of all interests in
real estate. The Registrant sold its final real estate investment in March
1997. The Registrant has retained a portion of the cash from the property sales
to satisfy obligations of the Registrant as well as to establish a reserve for
contingencies. The timing of the termination of the Registrant 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 Registrant
including, but not limited to, the lawsuits discussed in "Item 3. Legal
Proceedings". Due to this litigation, the Registrant will not be dissolved and
reserves will be held by the Registrant until the conclusion of all
contingencies. There can be no assurances as to the time frame for conclusion
of these contingencies.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources" for information regarding the
Registrant's Year 2000 readiness.
The Registrant no longer has an ownership interest in any real estate
investment. The General Partner is not aware of any material potential
liability relating to environmental issues or conditions affecting real estate
formerly owned by the Registrant.
<PAGE>
The officers and employees of Balcor Partners-XI, the General Partner of the
Registrant, and its affiliates perform services for the Registrant. The
Registrant currently has no employees engaged in its operations.
Item 2. Properties
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As of December 31, 1998, the Registrant did not own any properties.
In the opinion of the General Partner, the Registrant has obtained adequate
insurance coverage for property liability and property damage matters.
See Notes to Financial Statements for other information regarding former real
estate property investments.
Item 3. Legal Proceedings
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Klein, et al. vs. Lehman Brothers, Inc., et al.
- -----------------------------------------------
On August 30, 1996, a proposed class action complaint was filed, Lenore Klein,
et al. vs. Lehman Brothers, Inc., et al. (Superior Court of New Jersey, Law
Division, Union County, Docket No. Unn-L-5162-96). The complaint was amended on
each of October 18, 1996, December 5, 1997 and January 15, 1998. The
Registrant, additional limited partnerships which were sponsored by The Balcor
Company (together with the Registrant, the "Affiliated Partnerships"), The
Balcor Company, American Express Company, Lehman Brothers, Inc., Smith Barney,
Inc., American Express Financial Advisors, and other affiliated entities and
various individuals are named defendants in the action. The most recent amended
complaint, plaintiffs' Third Amended Complaint, alleges, among other things,
common law fraud and deceit, negligent misrepresentation, breach of contract,
breach of fiduciary duty and violation of certain New Jersey statutes relating
to the disclosure of information in the offering of limited partnership
interests in the Affiliated Partnerships, the marketing of interests in the
Affiliated Partnerships and the acquisition of real properties for the
Affiliated Partnerships. The Third Amended Complaint seeks judgment for
compensatory damages equal to the amount invested in the Affiliated
Partnerships by the proposed class plus interest; general damages for injuries
arising from the defendants' alleged actions; equitable relief, including
rescission, on certain counts; punitive damages; treble damages on certain
counts; recovery from the defendants of all profits received by them as a
result of their alleged actions relating to the Affiliated Partnerships;
attorneys' fees and other costs.
<PAGE>
In June 1998, the defendants filed a motion to dismiss the complaint for
failure to state a cause of action. Oral arguments were heard by the court on
August 21, 1998. On September 24, 1998, the judge issued a letter opinion
granting the defendants' motion to dismiss the complaint. On October 23, 1998,
the judge announced that he would enter an order dismissing the complaint
without prejudice, but stated that the plaintiffs would be required to file any
new pleading in a separate action and would not be allowed to amend the
existing complaint. The plaintiffs moved for a reconsideration of the judge's
ruling, which was denied on November 20, 1998. On December 28, 1998, plaintiffs
filed a notice of appeal from both the judge's October 23 and November 20, 1998
rulings.
On March 11, 1999, an order was entered by the Superior Court of New Jersey,
Appellate Division, dismissing the appeal in this action with prejudice.
Therefore, this will be the final report to investors regarding this matter.
Bruss et al. vs. Lehman Brothers, Inc., et al.
- ----------------------------------------------
On January 25, 1999, a proposed class action complaint was filed, Dorothy
Bruss, et al. vs. Lehman Brothers, Inc., et al. (Superior Court of New Jersey,
Law Division, Essex County, Docket No. L-000898-99). The Registrant,
additional limited partnerships which were sponsored by The Balcor Company
(together with the Registrant, the "Affiliated Partnerships"), The Balcor
Company, American Express Company, Lehman Brothers, Inc., Smith Barney, Inc.,
American Express Financial Corporation, and other affiliated entities and
various individuals are named defendants in the action. Lead counsel
representing the plaintiffs in this case is the same counsel representing the
plaintiffs in the Lenore Klein case discussed above. The complaint relates
largely to the same issues as those raised in the Lenore Klein case. The
complaint alleges, among other things, common law fraud and deceit, negligent
misrepresentation, breach of contract, breach of fiduciary duty and violation
of certain New Jersey and other similar state statutes relating to the
disclosure of information in the offering of limited partnership interests in
the Affiliated Partnerships, the marketing of interests in the Affiliated
Partnerships and the acquisition of real property for the Affiliated
Partnerships. The complaint seeks judgement for compensatory damages equal to
the amount invested in the Affiliated Partnerships by the proposed class plus
interest; general damages for injuries arising from the defendants' alleged
actions; equitable relief, including rescission on certain counts; punitive
damages; treble damages on certain counts; recovery from the Defendants of all
profits received by them as a result of their alleged actions relating to the
Affiliated Partnerships; and attorneys' fees and other costs.
<PAGE>
The defendants intend to vigorously contest this action. No class has been
certified as of this date. The Registrant believes that it has meritorious
defenses to contest the claims. It is not determinable at this time how the
outcome of this action will impact the remaining cash reserves of the
Registrant.
Item 4. Submission of Matters to a Vote of Security Holders
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No matters were submitted to a vote of the Limited Partners of the Registrant
during 1998.
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
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Matters
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There has not been an established public market for Limited Partnership
Interests and it is not anticipated that one will develop. For information
regarding distributions, see "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations-Liquidity and Capital Resources."
As of December 31, 1998, the number of record holders of Limited Partnership
Interests of the Registrant was 6,760.
Item 6. Selected Financial Data
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Year ended December 31,
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1998 1997 1996 1995 1994
---------- ---------- ----------- ----------- ---------
Total income $80,329 $796,322 $6,436,334 $7,524,577 $8,392,007
(Loss) income before
gains on sales of
properties and
extraordinary
items (130,005) (72,860) 496,141 759,384 (100,170)
Net (loss) income (130,005)8,585,582 12,397,719 4,003,564 5,423,112
Net (loss) income
per Limited Part-
nership Interest-
Basic and Diluted (1.75) 68.37 165.30 53.06 72.48
Total assets 1,469,998 2,057,530 11,702,171 20,030,290 26,891,815
Mortgage notes
payable None None 9,161,938 23,603,034 28,823,037
Cash distributions
per Limited Part-
nership Interest (A) 6.69 116.50 78.00 72.95 3.45
(A) This amount includes distributions of original capital of $6.69, $112.50,
$63.00 and $63.50 per Limited Partnership Interest during the years 1998, 1997,
1996 and 1995, respectively.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
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Results of Operations
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Operations
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Summary of Operations
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Balcor Realty Investors Ltd.-82 (the "Partnership") sold its remaining
properties in 1996 and 1997 and recognized gains in connection with the sales
of these properties. During 1998, administrative expenses were higher than
interest income earned on short-term investments. As a result, the Partnership
recognized a net loss for 1998 as compared to net income during 1997. Primarily
as a result of a lower gain resulting from the one property sale in 1997 as
compared to the gains recognized in connection with the two property sales in
1996, net income decreased during 1997 as compared to 1996. Further discussion
of the Partnership's operations is summarized below.
1998 Compared to 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 notes payable, depreciation,
amortization, property operating expense 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 1997 and January 1998. This
resulted in a decrease in interest income on short-term investments during 1998
as compared to 1997.
The Partnership recognized other income during 1997 in connection with a
partial refund of prior years' insurance premiums relating to the Partnership's
properties.
Real estate taxes ceased during 1997 due to the sale of the Balcones Woods
Apartments in March 1997. However, the Partnership paid additional 1997 real
estate taxes related to the property during 1998.
<PAGE>
During 1997, the Partnership wrote-off the remaining unamortized deferred
expenses of $229,431 in connection with the sale of the Balcones Woods
Apartments. This amount was recognized as debt extinguishment expense and
classified as an extraordinary item for financial statement purposes.
1997 Compared to 1996
- ---------------------
During 1996, the Partnership sold the Songbird-Phases I & II and the Eagles
Pointe apartment complexes and recognized gains on the sales totaling
$12,521,440. In 1997, the Partnership sold its remaining property, Balcones
Woods Apartments, as described above. As a result, rental and service income,
interest expense on mortgage notes payable, depreciation, amortization of
deferred expenses, property operating expense, real estate taxes and property
management fees decreased during 1997 as compared to 1996.
Higher average cash balances were available for investment in 1996 due to the
proceeds received in connection with the 1996 property sales prior to
distribution to Limited Partners. This resulted in a decrease in interest
income on short-term investments during 1997 as compared to 1996.
In February 1996, the Partnership reached a settlement with the seller
regarding the original purchase of the Balcones Woods Apartments and recognized
$216,750 of settlement income relating primarily to amounts received from the
seller under the management and guarantee agreement as well as construction
defects at the property.
The Partnership incurred legal, printing, postage and investor processing costs
in connection with responses to tender offers during 1996. In addition,
portfolio management and accounting fees decreased during 1997 due to the sales
of the Partnership's properties. As a result, administrative expenses decreased
in 1997 as compared to 1996.
During 1996, the Partnership wrote-off the remaining unamortized deferred
expenses in connection with the sales of the Songbird-Phases I & II and the
Eagles Pointe apartment complexes of $192,960 and $2,969, respectively. In
addition, the Partnership paid $423,933 in prepayment penalties in connection
with the sale of the Eagles Pointe Apartments. These amounts were recognized as
extraordinary items and classified as debt extinguishment expense for financial
statement purposes.
Liquidity and Capital Resources
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<PAGE>
The cash position of the Partnership decreased by approximately $579,000 as of
December 31, 1998 when compared to December 31, 1997 primarily due to the
distribution to Limited Partners of remaining available Net Cash Proceeds in
January 1998. The Partnership used cash of approximately $83,000 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. The Partnership sold its final real estate investment in March
1997. The Partnership has retained a portion of the cash from the 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 lawsuits discussed in "Item 3.
Legal Proceedings". 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.
The Partnership made distributions totaling $6.69, $116.50 and $78.00 per
Interest in 1998, 1997 and 1996, respectively. See Statement of Partner's
Capital (Deficit) for additional information. Distributions were comprised of
$6.69 of Net Cash Proceeds in 1998, $4.00 of Net Cash Receipts and $112.50 of
Net Cash Proceeds in 1997 and $15.00 of Net Cash Receipts and $63.00 of Net
Cash Proceeds in 1996.
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.
The Partnership has 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
<PAGE>
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.
Certain statements in this report constitute "forward looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. These
statements may include statements regarding income or losses as well as
assumptions relating to the foregoing.
The forward-looking statements made by the Partnership are subject to known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Partnership to differ from any
future results, performance or achievements expressed or implied by the
forward-looking statements.
Item 7a. Quantitative and Qualitative Disclosures About Market Risk
- -------------------------------------------------------------------
The supplemental financial information specified by Item 305 of Regulation S-K
is not applicable.
<PAGE>
Item 8. Financial Statements and Supplementary Data
- ---------------------------------------------------
See Index to Financial Statements in this Form 10-K.
The supplemental financial information specified by Item 302 of Regulation S-K
is not applicable.
The net effect of the differences between the financial statements and the tax
returns is summarized as follows:
December 31, 1998 December 31, 1997
------------------------ ------------------------
Financial Tax Financial Tax
Statements Returns Statements Returns
----------- ----------- ----------- -----------
Total assets $1,469,998 $9,765,253 $2,057,530 $10,347,466
Partners' capital
(deficit):
General Partner (112,239) (107,232) (112,239) (112,239)
Limited Partners 1,505,591 9,795,839 2,131,343 10,430,582
Net (loss) income:
General Partner None 5,007 3,517,457 1,702,664
Limited Partners (130,005) (138,996) 5,068,125 11,269,752
Per Limited
Partnership
Interest (1.75)(A) (1.87) 68.37(A) 152.02
(A) Amount represents basic and diluted net (loss) income per Limited
Partnership Interest.
Item 9. Changes in and Disagreements with Accountants on Accounting and
- -----------------------------------------------------------------------
Financial Disclosure
- --------------------
There have been no changes in or disagreements with accountants on any matter
of accounting principles, practices or financial statement disclosure.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
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(a) Neither the Registrant nor Balcor Partners-XI, its General Partner, has a
Board of Directors.
(b, c & e) The names, ages and business experience of the executive officers
and significant employees of the General Partner of the Registrant are as
follows:
TITLE OFFICERS
Chairman, President and Chief Thomas E. Meador
Executive Officer
Senior Vice President Alexander J. Darragh
Senior Managing Director, Chief Jayne A. Kosik
Financial Officer, Treasurer
and Assistant Secretary
Thomas E. Meador (age 51) joined Balcor in July 1979. He is Chairman,
President and Chief Executive Officer and has responsibility for all ongoing
day-to-day activities at Balcor. He is a member of the board of directors of
The Balcor Company. He is also a Senior Vice President of American Express
Company and is responsible for its real estate operations worldwide. Prior to
joining Balcor, Mr. Meador was employed at the Harris Trust and Savings Bank in
the commercial real estate division where he was involved in various lending
activities. Mr. Meador received his M.B.A. degree from the Indiana University
Graduate School of Business.
Mr. Meador is on the Board of Directors of Grubb & Ellis Company, a publicly
traded commercial real estate firm. Mr. Meador was elected to the Board of
Grubb & Ellis Company in May 1998. Mr. Meador is also a director of AMLI
Commercial Properties Trust, a private real estate investment trust that owns
office and industrial buildings in the Chicago, Illinois area. Mr. Meador was
elected to the Board of AMLI Commercial Properties Trust in August 1998.
Alexander J. Darragh (age 44) joined Balcor in September 1988 and is
responsible for real estate advisory services for Balcor and American Express
Company. Mr. Darragh received masters' degrees in Urban Geography from Queen's
University and in Urban Planning from Northwestern University.
<PAGE>
Jayne A. Kosik (age 41) joined Balcor in August 1982 and, as Chief Financial
Officer, is responsible for Balcor's financial, human resources and treasury
functions. Ms. Kosik is also a member of the board of directors of The Balcor
Company. From June 1989 until October 1996, Ms. Kosik had supervisory
responsibility for accounting functions relating to Balcor's public and private
partnerships. She is also Treasurer and a Senior Managing Director of The
Balcor Company. Ms. Kosik is a Certified Public Accountant.
(d) There is no family relationship between any of the foregoing officers.
(e) None of the foregoing officers or employees are currently involved in any
material legal proceedings nor were any such proceedings terminated during the
fourth quarter of 1998.
Item 11. Executive Compensation
- -------------------------------
The Registrant has not paid and does not propose to pay any remuneration to the
executive officers and directors of the General Partner. The executive officers
receive compensation from The Balcor Company (but not from the Registrant) for
services performed for various affiliated entities, which may include services
performed for the Registrant. However, the General Partner believes that any
such compensation attributable to services performed for the Registrant is
immaterial to the Registrant. See Note 9 of Notes to Financial Statements for
the information relating to transactions with affiliates.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------
(a) The following entities are the sole Limited Partners which own
beneficially more than 5% of the outstanding Limited Partnership Interests of
the Registrant:
Name and Amount and
Address of Nature of Percent
Beneficial Beneficial of
Title of Class Owner Ownership Class
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Limited WIG 82 6,436.64 8.68%
Partnership Partners Limited
Interests Chicago, Partnership
Illinois Interests
<PAGE>
Limited Metropolitan 3,248.34 4.38%
Partnership Acquisition VII Limited
Interests Greensville, Partnership
South Carolina Interests
While Metropolitan Acquisition VII individually owns less than 5% of the
Interests, for purposes of this Item 12, Metropolitan Acquisition VII is an
affiliate of WIG 82 Partners and, collectively, they own 13.06% of the
Interests.
(b) Neither Balcor Partners-XI nor its officers or partners own any Limited
Partnership Interests of the Registrant.
Relatives of the officers and affiliates of the General Partner do not own any
Limited Partnership Interests.
In addition, Balcor LP Corp., an affiliate of the General Partner, holds title
to 45 Limited Partnership Interests in the Partnership due exclusively to
instances in which Limited Partners abandoned title to their Limited
Partnership Interests. Balcor LP Corp. is a nominee holder only of such
Interests and has disclaimed any economic or beneficial ownership in said
Interests. All distributions of cash payable with respect to such Interests
held by Balcor LP Corp. are returned to the Partnership for distribution to
other Limited Partners in accordance with the Partnership Agreement.
(c) The Registrant is not aware of any arrangements, the operation of which may
result in a change of control of the Registrant.
Item 13. Certain Relationships and Related Transactions
- -------------------------------------------------------
(a & b) See Note 4 of Notes to Financial Statements for information relating to
the Partnership Agreement and the allocation of distributions and profits and
losses.
See Note 9 of Notes to Financial Statements for additional information relating
to transactions with affiliates.
(c) No management person is indebted to the Registrant.
(d) The Registrant has no outstanding agreements with any promoters.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K
- ------------------------------------------------------------------------
(a)
(1 & 2) See Index to Financial Statements in this Form 10-K.
(3) Exhibits:
(3) The Amended and Restated Agreement of Limited Partnership set forth as
Exhibit 3 to Post-Effective Amendment No. 1 to the Registrant's Registration
Statement on Form S-11 dated January 15, 1982 (Registration No. 2-74358), is
incorporated herein by reference.
(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 are incorporated herein by
reference.
(27) Financial Data Schedule of the Registrant for 1998 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended December 31, 1998.
(c) Exhibits: See item 14(a)(3) above.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of l934, 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/ Jayne A. Kosik
---------------------------
Jayne A. Kosik
Senior Managing Director and Chief
Financial Officer (Principal
Accounting and Financial Officer)
of Balcor Partners-XI, the General
Partner
Date: March 19, 1999
--------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
- ---------------------- ------------------------------- ------------
President and Chief Executive
Officer (Principal Executive
Officer) of Balcor Partners-XI,
/s/ Thomas E. Meador the General Partner March 19, 1999
- -------------------- --------------
Thomas E. Meador
Senior Managing Director and
Chief Financial Officer
(Principal Accounting and Financial
Officer) of Balcor Partners-XI, the
General Partner
/s/ Jayne A. Kosik March 19, 1999
- ------------------ --------------
Jayne A. Kosik
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Report of Independent Accountants
Financial Statements:
Balance Sheets, December 31, 1998 and 1997
Statements of Partners' Capital (Deficit), for the years ended December 31,
1998, 1997 and 1996
Statements of Income and Expenses, for the years ended December 31, 1998, 1997
and 1996
Statements of Cash Flows, for the years ended December 31, 1998, 1997 and 1996
Notes to Financial Statements
Financial Statement Schedules are omitted for the reason that they are
inapplicable or equivalent information has been included elsewhere herein.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Balcor Realty Investors Ltd.-82:
In our opinion, the accompanying balance sheets and the related statements of
partners' capital (deficit), of income and expenses and of cash flows present
fairly, in all material respects, the financial position of Balcor Realty
Investors Ltd.-82 An Illinois Limited Partnership (the "Partnership") at
December 31, 1998 and 1997, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles. 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 of these statements in accordance with
generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
As described in Note 2 to the financial statements, the partnership agreement
provides for the dissolution of the Partnership upon the disposition of all its
real estate interests. As of December 31, 1998, the Partnership no longer has
an ownership interest in any real estate investment. Upon resolution of the
litigation described in Note 13 to the financial statements, the Partnership
intends to cease operations and dissolve.
PricewaterhouseCoopers LLP
Chicago, Illinois
March 17, 1999
<PAGE>
BALCOR REALTY INVESTORS LTD.- 82
(An Illinois Limited Partnership)
BALANCE SHEETS
December 31, 1998 and 1997
ASSETS
1998 1997
-------------- --------------
Cash and cash equivalents $ 1,463,768 $ 2,042,608
Accounts and accrued interest receivable 6,230 14,922
-------------- --------------
$ 1,469,998 $ 2,057,530
============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 54,999 $ 12,680
Due to affiliates 21,647 25,746
-------------- --------------
Total liabilities 76,646 38,426
-------------- --------------
Commitments and contingencies
Limited Partners' capital
(74,133 Interests issued
and outstanding) 1,505,591 2,131,343
General Partners' deficit (112,239) (112,239)
-------------- --------------
Total partners' capital 1,393,352 2,019,104
-------------- --------------
$ 1,469,998 $ 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 PARTNERS' CAPITAL (DEFICIT)
for the years ended December 31, 1998, 1997 and 1996
Partners' Capital (Deficit) Accounts
------------------------------------------
General Limited
Total Partner Partners
-------------- ------------- -------------
Balance at December 31, 1995 $ (4,259,179) $ (3,773,519) $ (485,660)
Cash distributions to
Limited Partners (A) (5,782,374) (5,782,374)
Deemed distribution (B) (286,149) (286,149)
Net income for the year
ended December 31, 1996 12,397,719 143,823 12,253,896
-------------- ------------- -------------
Balance at December 31, 1996 2,070,017 (3,629,696) 5,699,713
Cash distributions to
Limited Partners (A) (8,636,495) (8,636,495)
Net income for the year
ended December 31, 1997 8,585,582 3,517,457 5,068,125
-------------- ------------- -------------
Balance at December 31, 1997 2,019,104 (112,239) 2,131,343
Cash distribution to
Limited Partners(A) (495,747) (495,747)
Net loss for the year
ended December 31, 1998 (130,005) (130,005)
-------------- ------------- -------------
Balance at December 31, 1998 $ 1,393,352 $ (112,239) $ 1,505,591
============== ============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD.- 82
(An Illinois Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
for the years ended December 31, 1998, 1997 and 1996
(Continued)
(A) Summary of cash distributions paid per Limited Partnership Interest:
1998 1997 1996
-------------- ------------- -------------
First Quarter $ 6.69 $ 54.00 $ 4.00
Second Quarter None 55.00 4.00
Third Quarter None 7.50 24.00
Fourth Quarter None None 46.00
(B) This amount represents a state withholding tax paid on behalf of the
Limited Partners relating to the gain on the sale of Eagles Pointe
Apartments.
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 years ended December 31, 1998, 1997 and 1996
1998 1997 1996
-------------- ------------- -------------
Income:
Rental and service $ 644,285 $ 6,037,856
Interest on short-term
investments $ 80,329 133,138 181,728
Other income 18,899
Settlement income 216,750
-------------- ------------- -------------
Total income 80,329 796,322 6,436,334
-------------- ------------- -------------
Expenses:
Interest on mortgage
notes payable 126,547 1,639,926
Depreciation 62,414 652,174
Amortization of deferred
expenses 7,307 57,528
Property operating 360,943 2,327,464
Real estate taxes 8,950 64,727 569,790
Property management fees 32,133 281,843
Administrative 201,384 215,111 411,468
-------------- ------------- -------------
Total expenses 210,334 869,182 5,940,193
-------------- ------------- -------------
(Loss) income before gains
on sales of properties
and extraordinary items (130,005) (72,860) 496,141
Gains on sales of properties 8,887,873 12,521,440
-------------- ------------- -------------
(Loss) income before
extraordinary items (130,005) 8,815,013 13,017,581
Extraordinary items:
Debt extinguishment expense (229,431) (619,862)
-------------- ------------- -------------
Net (loss) income $ (130,005) $ 8,585,582 $ 12,397,719
============== ============= =============
Income before extraordinary
items allocated to General
Partner None $ 3,611,453 $ 150,021
============== ============= =============
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 years ended December 31, 1998, 1997 and 1996
(Continued)
1998 1997 1996
-------------- ------------- -------------
(Loss) income before
extraordinary items allocated
to Limited Partners $ (130,005) $ 5,203,560 $ 12,867,560
============== ============= =============
(Loss) income before
extraordinary items per
Limited Partnership Interest
(74,133 issued and outstanding)
-Basic and Diluted $ (1.75) $ 70.20 $ 173.58
============== ============= =============
Extraordinary items allocated
to General Partner None $ (93,996) $ (6,199)
============== ============= =============
Extraordinary items allocated
to Limited Partners None $ (135,435) $ (613,663)
============== ============= =============
Extraordinary items per Limited
Partnership Interest (74,133
issued and outstanding)-
Basic and Diluted None $ (1.83) $ (8.28)
============== ============= =============
Net income allocated to
General Partner None $ 3,517,457 $ 143,822
============== ============= =============
Net (loss) income allocated to
Limited Partners $ (130,005) $ 5,068,125 $ 12,253,897
============== ============= =============
Net (loss) income per Limited
Partnership Interest (74,133
issued and outstanding)-
Basic and Diluted $ (1.75) $ 68.37 $ 165.30
============== ============= =============
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 years ended December 31, 1998, 1997 and 1996
1998 1997 1996
-------------- ------------- -------------
Operating activities:
Net (loss) income $ (130,005) $ 8,585,582 $ 12,397,719
Adjustments to reconcile net
(loss) income to net cash
(used in) or provided by
operating activities:
Gains on sales of
properties (8,887,873) (12,521,440)
Debt extinguishment expense 229,431 195,929
Depreciation of properties 62,414 652,174
Amortization of deferred
expenses 7,307 57,528
Net change in:
Escrow deposits 245,881 291,266
Accounts and accrued
interest receivable 8,692 60,602 (57,701)
Prepaid expenses 23,719 42,879
Accounts payable 42,319 (34,318) 6,611
Due to affiliates (4,099) (39,207) 44,320
Accrued liabilities (310,641) (179,913)
Security deposits (47,624) (87,237)
-------------- ------------- -------------
Net cash (used in) or provided
by operating activities (83,093) (104,727) 842,135
-------------- ------------- -------------
Investing activities:
Proceeds from redemption of
restricted investment 1,230,000
Proceeds from sale of
real estate 6,686,722 14,759,501
Payment of selling costs (369,746) (660,654)
------------- -------------
Net cash provided by
investing activities 6,316,976 15,328,847
------------- -------------
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 years ended December 31, 1998, 1997 and 1996
(continued)
1998 1997 1996
-------------- ------------- -------------
Financing activities:
Distributions to
Limited Partners $ (495,747) $ (8,636,495) $ (5,782,374)
Deemed distribution (286,149)
Repayment of mortgage note
payable (7,066,611)
Principal payments on
mortgage notes payable (48,660) (358,986)
Funding of capital
improvement escrows (16,000) (144,034)
Disbursements from capital
improvement escrows 90,799 322,576
-------------- ------------- -------------
Net cash used in
financing activities (495,747) (8,610,356) (13,315,578)
-------------- ------------- -------------
Net change in cash and cash
equivalents (578,840) (2,398,107) 2,855,404
Cash and cash equivalents at
beginning of year 2,042,608 4,440,715 1,585,311
-------------- ------------- -------------
Cash and cash equivalents at
end of year $ 1,463,768 $ 2,042,608 $ 4,440,715
============== ============= =============
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. Nature of the Partnership's Business:
Balcor Realty Investors Ltd.-82 (the "Partnership") has retained cash reserves
from the sale of its real estate investments for contingencies which exist or
may arise. The Partnership's operations currently consist of interest income
earned on short-term investments and the payment of administrative expenses.
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 March
1997. The Partnership has retained a portion of the cash from the 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 lawsuits discussed in Note 13 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. Accounting Policies:
(a) The preparation of the financial statements in conformity with generally
accepted accounting principles requires the General Partner to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could vary from those estimates.
(b) Depreciation expense was computed using straight-line and accelerated
methods. Rates used in the determination of depreciation were based upon the
following estimated useful lives:
Years
-----
Buildings and improvements 20 to 30
Furniture and fixtures 5
Maintenance and repairs were charged to expense when incurred. Expenditures for
improvements were charged to the related asset account.
<PAGE>
Interest incurred while properties were under construction was capitalized.
As properties were sold, the related costs and accumulated depreciation were
removed from the respective accounts. Any gain or loss on disposition was
recognized in accordance with generally accepted accounting principles.
(c) The Partnership recorded its investments in real estate at the lower of
cost or fair value, and periodically assessed, but not less than on an annual
basis, possible impairment to the value of its properties. The General Partner
estimated the fair value of its properties based on the current sales price
less estimated closing costs. The General Partner determined that no impairment
in value had occurred prior to the sales of the properties. The General Partner
considered the method referred to above to result in a reasonable measurement
of a property's fair value, unless other factors affecting the property's value
indicated otherwise.
(d) Deferred expenses consisted of mortgage financing fees which were amortized
over the terms of the respective agreements. Upon sale, any remaining balance
was recognized as debt extinguishment expense and classified as an
extraordinary item.
(e) Revenue is recognized on an accrual basis in accordance with generally
accepted accounting principles.
(f) The Partnership calculates the fair value of its financial instruments
based on estimates using present value techniques. The Partnership includes
this additional information in the notes to the financial statements when the
fair value is different than the carrying value of those financial instruments.
When the fair value reasonably approximates the carrying value, no additional
disclosure is made.
(g) For financial statement purposes, prior to 1997, the partners were
allocated income and losses in accordance with the provisions in the
Partnership Agreement. In order for the capital account balances to more
accurately reflect the partners' remaining economic interests in the
Partnership, the income (loss) allocations have been adjusted.
(h) Cash and cash equivalents include all unrestricted highly liquid
investments with an original maturity of three months or less. Cash is held or
invested in one financial institution.
(i) The Partnership is not liable for Federal income taxes and each partner
recognizes his proportionate share of the Partnership income or loss in his tax
return; therefore, no provision for income taxes is made in the financial
statements of the Partnership.
(j) Statement of Financial Accounting Standards, No. 128, "Earnings per Share"
was adopted by the Partnership effective for the year-ended December 31, 1997
and has been applied to the prior earnings period presented in the financial
statements. Since the Partnership has no dilutive securities, there is no
difference between basic and diluted net (loss) income per Limited Partnership
Interest.
<PAGE>
(k) Certain reclassifications of prior years information were made to conform
to the 1998 presentation.
4. Partnership Agreement:
The Partnership was organized during June 1981. The Partnership Agreement
provided for the admission of Limited Partners through the sale of up to 75,000
Limited Partnership Interests at $1,000 per Interest, 74,133 of which were sold
on or prior to May 29, 1982, the termination date of the offering.
The Partnership Agreement generally provides that the General Partner will be
allocated 5% and Limited Partners 95% of the profits and losses. However, it
further provides that profits and losses from property dispositions will be
allocated 1% to the General Partner and 99% to Limited Partners. For financial
statement purposes, prior to 1997, the partners were allocated income and
losses in accordance with the provisions in the Partnership Agreement. In order
for the capital account balances to more accurately reflect the partners'
remaining economic interests in the Partnership, the income (loss) allocations
have been adjusted.
One hundred percent of Net Cash Receipts available for distribution was
distributed to the holders of Interests. Under certain circumstances, the
General Partner would have participated in the Net Cash Proceeds from (i) the
refinancing of Partnership properties and (ii) the sale of Partnership
properties. The General Partner's participation was limited to 15% of the
excess Net Cash Proceeds after the return of Original Capital plus a 3% per
annum cumulative distribution on Adjusted Original Capital to the holders of
Interests. Since the required subordination levels were not met, the General
Partner has not received any distributions of Net Cash Receipts or Net Cash
Proceeds during the lifetime of the Partnership.
5. Mortgage Note Payable:
During 1997 and 1996, the Partnership incurred interest expense on mortgage
notes payable of $126,547 and $1,639,926 and paid interest expense on mortgage
notes payable of $147,831 and $1,655,049, respectively.
6. Seller's Participation in Joint Venture:
The Balcones Woods Apartments was owned by a joint venture between the
Partnership and the seller. Consequently, the seller retained an interest in
the property through an interest in the joint venture. All assets, liabilities,
income and expenses of the joint venture were included in the financial
statements of the Partnership with the appropriate deduction from income, if
any, for the seller's participation in the joint venture. The property was sold
in March 1997. The seller did not receive any of the sales proceeds.
7. Management Agreement:
The Partnership's properties were managed by a third party management company
prior to the sale of the properties. These management agreements provided for
annual fees of 5% of gross operating receipts.
<PAGE>
8. Tax Accounting:
The Partnership keeps its books in accordance with the Internal Revenue Code,
rules and regulations promulgated thereunder and existing interpretations
thereof. The accompanying financial statements, which are prepared in
accordance with generally accepted accounting principles, will differ from the
tax returns due to the different treatment of various items as specified in the
Internal Revenue Code. The net effect of these accounting differences is that
the net loss for 1998 in the financial statements is $3,984 less than the
taxable loss for the same period.
9. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates are:
Year Ended Year Ended Year Ended
12/31/98 12/31/97 12/31/96
----------------- ----------------- -----------------
Paid Payable Paid Payable Paid Payable
------ --------- ------ --------- ------ ---------
Reimbursement of
expenses to
General Partner,
at cost:
Accounting $7,196 $4,906 $21,969 $6,531 $14,097 $11,335
Data processing 2,224 872 1,979 None 419 None
Legal 5,304 3,662 14,798 4,366 11,454 9,210
Portfolio
management 17,710 12,207 44,058 13,932 49,695 40,296
Other 917 None 4,112 917 5,114 4,112
Prior to May 1995, the Partnership participated in an insurance deductible
program with other affiliated partnerships in which the program paid claims up
to the amount of the deductible under the master insurance policy for its
properties. The program was administered by an affiliate of the General Partner
who received no fee for administering the program. However, the General Partner
was reimbursed for program expenses. The Partnership paid premiums to the
deductible insurance program relating to claims for periods prior to May 1,
1995 of $8,062 in 1996.
The Partnership had been required to post a $1,230,000 letter of credit as
additional collateral for the Eagles Pointe Apartments mortgage note payable.
An affiliate of the General Partner originally had been providing a guarantee
for this letter of credit. During 1993, the Partnership pledged $1,230,000 from
its cash reserves as cash collateral for the letter of credit in place of the
affiliate's guarantee. The amount pledged as collateral was invested in
short-term instruments pursuant to the terms of the pledge agreement with the
lending institution. Interest earned on this amount accumulated for the benefit
of the Partnership. The Partnership obtained a release of the funds in July
1996, upon meeting certain criteria pursuant to the terms of the loan
agreement.
<PAGE>
10. Property Sales:
(a) In March 1997, the Partnership sold the Balcones Woods Apartments for
$15,800,000. The purchaser of the property took title subject to the existing
first mortgage loan in the amount of $9,113,278, which represents a noncash
transaction to the Partnership. Accordingly, the noncash aspect of this
transaction is not presented in the Partnership's Statements of Cash Flows.
From the proceeds of the sale, the Partnership paid $369,746 in selling costs.
The basis of the property was $6,542,381, which is net of accumulated
depreciation of $5,118,951. For financial statement purposes, the Partnership
recognized a gain of $8,887,873 from the sale of this property.
(b) In October 1996, the Partnership sold the Eagles Pointe Apartments in an
all cash sale for $11,075,000. From the proceeds of the sale, the Partnership
paid $7,066,611 to the third party mortgage holder in full satisfaction of the
first and second mortgage loans, and paid $298,233 in selling costs and
$423,933 of prepayment penalties. In addition, the Partnership paid a state
withholding tax of $286,149 on behalf of the Limited Partners relating to the
gain on the sale of the property which has been recorded as a deemed
distribution for financial statement purposes. The basis of the property was
$3,938,156, which is net of accumulated depreciation of $4,161,190. For
financial statement purposes, the Partnership recognized a gain of $6,838,611
from the sale of this property.
(c) In September 1996, the Partnership sold the Songbird-Phases I & II
Apartments in an all cash sale for $10,700,000. The purchaser of the property
took title subject to the existing first mortgage loan in the amount of
$7,015,499, which represents a noncash transaction to the Partnership.
Accordingly, the noncash aspect of this transaction is not presented in the
Partnership's Statements of Cash Flows. From the proceeds of the sale, the
Partnership paid $362,421 in selling costs. The basis of the property was
$4,654,750, which is net of accumulated depreciation of $4,211,703. For
financial statement purposes, the Partnership recognized a gain of $5,682,829
from the sale of this property.
11. Extraordinary Items:
(a) In March 1997, the Partnership sold the Balcones Woods Apartments. In
connection with the sale, the Partnership wrote-off the remaining unamortized
deferred expenses in the amount of $229,431. This amount was recognized as an
extraordinary item and classified as debt extinguishment expense.
(b) In September 1996, the Partnership sold the Songbird-Phases I & II
Apartments. In connection with the sale, the Partnership wrote-off the
remaining unamortized deferred expenses in the amount of $192,960. This amount
was recognized as an extraordinary item and classified as debt extinguishment
expense.
(c) In October 1996, the Partnership sold the Eagles Pointe Apartments. In
connection with the sale, the Partnership paid $423,933 of prepayment penalties
and wrote-off the remaining unamortized deferred expenses in the amount of
$2,969. These amounts were recognized as an extraordinary item and classified
as debt extinguishment expense.
<PAGE>
12. Settlement Income:
In February 1996, the Partnership reached a settlement with the seller
regarding the original purchase of the Balcones Woods Apartments and recognized
$216,750 of settlement income relating primarily to amounts received from the
seller under the management and guarantee agreement as well as construction
defects at the property.
13. Contingency:
The Partnership is currently involved in a lawsuit, Bruss, et al. vs. Lehman
Brothers, Inc., et al., whereby the Partnership and certain affiliates have been
named as defendants alleging substantially similar claims involving 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 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 this action. The Bruss complaint was filed on
January 25, 1999. 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 this claim.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 1464
<SECURITIES> 0
<RECEIVABLES> 6
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1470
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1470
<CURRENT-LIABILITIES> 77
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1393
<TOTAL-LIABILITY-AND-EQUITY> 1470
<SALES> 0
<TOTAL-REVENUES> 80
<CGS> 0
<TOTAL-COSTS> 9
<OTHER-EXPENSES> 201
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (130)
<INCOME-TAX> 0
<INCOME-CONTINUING> (130)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (130)
<EPS-PRIMARY> (1.75)
<EPS-DILUTED> (1.75)
</TABLE>
