U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
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 .
Commission File Number : 0-17151
PAINE WEBBER/CMJ PROPERTIES, LP
(Exact name of registrant as specified in its charter)
Delaware 04-2780288
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
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 1 of 9
PAINE WEBBER/CMJ PROPERTIES, LP
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
(In thousands of dollars)
ASSETS
March 31 December 31
Investments in local limited
partnerships, at equity $ 304 $ 201
Cash and cash equivalents 274 324
$ 578 $ 525
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable - affiliates $ 50 $ -
Accrued expenses 18 14
Partners' capital 510 511
$ 578 $ 525
STATEMENTS OF INCOME
For the three months ended March 31, 1995 and 1994
(Unaudited)
(In thousands of dollars, except per Unit information)
1995 1994
REVENUES:
Interest income $ 4 $ 4
EXPENSES:
Management fees 50 50
General and administrative 14 18
64 68
Operating loss (60) (64)
Partnership's share of local
limited partnerships' income 103 90
NET INCOME $ 43 $ 26
Net income per Limited Partnership Unit $4.96 $2.98
Cash distributions per Limited
Partnership Unit $5.00 $ -
The above net income and cash distributions per Limited Partnership Unit are
based upon the 8,745 Limited Partnership Units outstanding for each period.
See accompanying notes.
PAINE WEBBER/CMJ PROPERTIES, LP
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
For the three months ended March 31, 1995 and 1994
(Unaudited)
(In thousands of dollars)
General Limited
Partner Partners
Balance at December 31, 1993 $ (71) $ 573
Net income - 26
BALANCE AT MARCH 31, 1994 $ (71) $ 599
Balance at December 31, 1994 $ (71) $ 582
Cash distributions - (44)
Net income - 43
BALANCE AT MARCH 31, 1995 $ (71) $ 581
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1995 and 1994
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
(In thousands of dollars)
1995 1994
Cash flows from operating activities:
Net income $ 43 $ 26
Adjustments to reconcile net income
to net cash used for operating activities:
Partnership's share of local limited
partnerships' income (103) (90)
Changes in assets and liabilities:
Accounts payable - affiliates 50 44
Accrued expenses 4 5
Total adjustments (49) (41)
Net cash used for operating activities (6) (15)
Cash flows from financing activities:
Distributions to partners (44) -
Net decrease in cash and cash equivalents (50) (15)
Cash and cash equivalents, beginning of period 324 463
Cash and cash equivalents, end of period $ 274 $ 448
See accompanying notes.
1. General
The accompanying financial statements, footnotes and discussion should be
read in conjunction with the financial statements and footnotes contained in
the Partnership's Annual Report for the year ended December 31, 1994.
In the opinion of management, the accompanying financial statements,
which have not been audited, reflect all adjustments necessary to present
fairly the results for the interim period. All of the accounting
adjustments reflected in the accompanying interim financial statements are
of a normal recurring nature.
2. Local Limited Partnerships
The Partnership has investments in six local limited partnerships which
own operating investment properties, as discussed further in the Annual
Report. These local limited partnerships are accounted for on the equity
method. Under the equity method of accounting for limited partnership
interests, the investments are carried at cost adjusted for the
Partnership's share of the local limited partnership's earnings, losses and
distributions. Losses in excess of the investment in individual local
limited partnerships are not recognized currently, but rather, are offset
against future earnings from such entities. Distributions received from
investments in limited partnerships with carrying values of zero are
recorded as other income in the Partnership's income statement.
Summarized operating results of these local limited partnerships follow:
CONDENSED COMBINED SUMMARY OF OPERATIONS
For the three months ended March 31, 1995 and 1994
(Unaudited)
(In thousands of dollars)
1995 1994
Rental revenues, including
government subsidies $2,463 $ 2,463
Interest income 18 13
2,481 2,476
Property operating expenses 1,109 1,155
Interest expense 723 732
Depreciation and amortization 306 298
Real estate taxes 151 155
2,289 2,340
Net income $ 192 $ 136
Net income:
Partnership's share of combined
operations $ 165 $ 117
Local partners' share of combined
operations 27 19
$ 192 $ 136
RECONCILIATION OF PARTNERSHIP'S SHARE OF OPERATIONS:
1995 1994
Partnership's share of operations,
as shown above $ 165 $ 117
Losses in excess of basis not
recognized by Partnership 8 23
Income offset with prior year
unrecognized losses (70) (50)
Partnership's share of local limited
partnerships' income $ 103 $ 90
3. Related Party Transactions
The Adviser earned basic management fees of $50,000 during each of the three-
month periods ended March 31, 1995 and 1994. Accounts payable - affiliates
at March 31, 1995 consists of $50,000 of management fees payable to the
Adviser.
Included in general and administrative expenses for the three months ended
March 31, 1995 and 1994 is $7,000 and $10,000, respectively, representing
reimbursements to an affiliate of the Managing General Partner for providing
certain financial, accounting and investor communication services to the
Partnership.
Also included in general and administrative expenses for the three months
ended March 31, 1995 is $1,000, representing fees earned by Mitchell Hutchins
Institutional Investors, Inc. for managing the Partnership's cash assets.
PAINE WEBBER/CMJ PROPERTIES, LP
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Demand for government subsidized `low-income'' housing continues to exceed
the available supply, which allowed occupancy levels at all six of the
properties in which the Partnership has invested to be in the high 90s for the
quarter ended March 31, 1995. However, the effects on the Partnership's
operating property investments of the improving market conditions for multi-
family residential properties in general, while positive, are limited by the
government restrictions on rental rate increases. With the exception of The
Villages at Montpelier Apartments, which has only 20% of its units restricted
for low-income housing, cash flow from the properties in which the Partnership
has invested is restricted by the Department of Housing and Urban Development
("HUD") and other applicable state housing agencies, which set rental rates for
low-income units and require significant cash reserves to be established for
future capital improvements. A portion of these replacement reserve escrows are
scheduled to be used during 1995 at all six of the properties for both routine
and major improvements. Furthermore, a substantial amount of the revenues
generated by these properties comes from rental subsidy payments made by federal
or state housing agencies. In addition to limiting the cash flow potential
under improving market conditions, these features, which are characteristic of
all low-income housing properties, limit the pool of potential buyers for these
real estate assets. As a limited partner of the local limited partnerships, the
Partnership does not control property disposition decisions. At the present
time, management is not aware of any plans or intentions of the general partners
of these partnerships to sell any of the investment properties in the near
future.
At the present time, all six of the properties in which the Partnership has
invested are generating sufficient cash flow from operations to cover their
operating expenses and debt service payments, and all properties are generating
excess cash flow, a portion of which is being distributed to the Partnership on
an annual basis in accordance with the respective regulatory and limited
partnership agreements. During 1994, the Partnership received distributions
totalling approximately $407,000 from its six limited partnership investments.
The distributions received in 1994 represented the available cash flow for
distribution as of December 31, 1993, as determined by the general partners of
the local limited partnerships in accordance with the partnership, financing and
regulatory agreements. Distributions of 1994 cash flow are expected to be made
in the second quarter of 1995. The Managing General Partner expects that such
distributions will equal or exceed the amount of the prior year distributions.
The distributions received in 1994 were more than sufficient to cover the
Partnership's management fees and administrative expenses. Given the
improvements in cash flow and the strong operating performances of the
investment properties in recent years, management began the payment of regular
quarterly distributions in 1994 at an annual rate of 2% on original invested
capital. The first of such regular distribution payments was made on August 15,
1994 for the quarter ended June 30, 1994. At the present level, annual
distributions to the Limited and General Partners would total approximately
$177,000. Management intends to maintain distributions at the present level for
1995, unless actual results of operations, economic conditions or other factors
differ substantially from the assumptions used in setting the planned
distribution rate.
At March 31, 1995, the Partnership had available cash and cash equivalents
of $274,000, which it intends to use for its working capital requirements and
for distributions to partners. The source of future liquidity and distributions
to the partners is expected to be from cash generated from the operations of the
Partnership's real estate investments and from the proceeds received from the
sale or refinancing of the properties owned by the local limited partnerships or
from the sale of the Partnership's interests in the local limited partnerships.
Such sources of liquidity are expected to be sufficient to meet the
Partnership's needs on both a short-term and long-term basis.
RESULTS OF OPERATIONS
The Partnership recorded net income of $43,000 for the three months ended
March 31, 1995, as compared to net income of $26,000 for the same period in the
prior year. The increase in net income is the result of an increase in the
Partnership's share of local limited partnerships' income and a decrease in
general and administrative expenses. General and administrative expenses
declined slightly in the current period mainly due to a reduction in certain
costs reimbursable to an affiliate of the Managing General Partner for providing
financial, accounting and investor communication services to the Partnership.
In accordance with the equity method of accounting for limited partnership
interests, the Partnership does not recognize losses from investment properties
when losses exceed the Partnership's equity method basis in these properties.
Five of the six investments have an equity method basis of zero as of March 31,
1995. The Partnership's recorded share of local limited partnerships' income in
the current period consists of income of $103,000 from the Ramblewood Apartments
limited partnership. In the same three-month period in the prior year, income
of $90,000 from the operations of the Ramblewood Apartments was recorded. The
increase in income from the Ramblewood Apartments in the current period is
mainly the result of lower operating expenses and real estate taxes. In the
aggregate, the combined rental revenues of all six properties remained stable
compared to the first quarter of 1994 as a result of steady occupancy rates and
government restrictions on rental rate increases at the properties. Combined
total expenses of the six operating properties decreased by $51,000, primarily
due to a decrease in certain property operating expenses and real estate taxes.
PART II
OTHER INFORMATION
Item 1. through 5. NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: NONE
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed by the registrant during the quarter
for which this report is filed.
PAINE WEBBER/CMJ PROPERTIES, LP
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.
PAINE WEBBER/CMJ PROPERTIES, LP
By: PW SHELTER FUND, INC.
Managing General Partner
By: /s/ Walter V. Arnold
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Dated: May 12, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Partnership's interim financial statements for the three months ended March 31,
1995 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 274
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 274
<PP&E> 304
<DEPRECIATION> 0
<TOTAL-ASSETS> 578
<CURRENT-LIABILITIES> 68
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 510
<TOTAL-LIABILITY-AND-EQUITY> 578
<SALES> 0
<TOTAL-REVENUES> 107
<CGS> 0
<TOTAL-COSTS> 64
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 43
<INCOME-TAX> 0
<INCOME-CONTINUING> 43
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43
<EPS-PRIMARY> 4.96
<EPS-DILUTED> 4.96
</TABLE>
