SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 1995
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 2-85270
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BALCOR EQUITY PENSION INVESTORS-I
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(Exact name of registrant as specified in its charter)
Illinois 36-3240345
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road
Bannockburn, Illinois 60015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 267-1600
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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<PAGE>
BALCOR EQUITY PENSION INVESTORS-I
(An Illinois Limited Partnership)
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
ASSETS
1995 1994
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Cash and cash equivalents $ 8,866,709 $ 7,207,000
Accounts and accrued interest receivable 344,549 164,885
Prepaid expenses 340,676 70,119
Deferred expenses, net of accumulated
amortization of $547,703 in 1995
and $467,624 in 1994 275,217 355,296
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9,827,151 7,797,300
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Investment in real estate:
Land 10,753,713 10,753,713
Buildings and improvements 93,671,997 93,613,603
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104,425,710 104,367,316
Less accumulated depreciation 40,181,759 37,467,239
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Investment in real estate, net
of accumulated depreciation 64,243,951 66,900,077
Investment in loan receivable 4,003,975 4,135,341
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68,247,926 71,035,418
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$ 78,075,077 $ 78,832,718
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LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 218,613 $ 211,676
Due to affiliates 21,047 102,217
Accrued real estate taxes 724,753 203,187
Escrow liabilities 72,670 16,088
Security deposits 504,032 512,606
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Total liabilities 1,541,115 1,045,774
Affiliate's participation in joint venture 1,453,661 1,482,721
Partners' capital (359,229 Limited
Partnership Interests issued and
outstanding) 75,080,301 76,304,223
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$ 78,075,077 $ 78,832,718
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-I
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the nine months ended September 30, 1995 and 1994
(Unaudited)
1995 1994
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Income:
Rental $ 11,060,224 $ 11,079,531
Service 1,445,470 1,555,463
Interest on short-term investments 344,221 246,258
Interest on loan receivable 152,772 159,453
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Total income 13,002,687 13,040,705
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Expenses:
Depreciation 2,714,520 2,674,251
Amortization of deferred expenses 80,079 79,598
Property operating 5,908,232 7,105,719
Real estate taxes 995,312 1,056,613
Property management fees 520,061 543,143
Administrative 466,184 511,607
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Total expenses 10,684,388 11,970,931
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Income before participation in joint venture 2,318,299 1,069,774
Affiliate's participation in (income) loss
from joint venture (70,555) 14,833
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Net income $ 2,247,744 $ 1,084,607
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Net income allocated to General Partner $ 472,410 $ 352,453
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Net income allocated to Limited Partners $ 1,775,334 $ 732,154
============== ==============
Net income per Limited Partnership
Interest (359,229 issued and outstanding)$ 4.94 $ 2.04
============== ==============
Distributions to General Partner $ 347,166 $ 385,779
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Distributions to Limited Partners $ 3,124,500 $ 3,472,014
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Distributions per Limited Partnership
Interest:
Taxable $ 6.75 $ 7.50
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Tax-exempt $ 8.99 $ 9.99
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-I
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended September 30, 1995 and 1994
(Unaudited)
1995 1994
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Income:
Rental $ 3,689,342 $ 3,820,943
Service 423,220 443,269
Interest on short-term investments 119,311 95,094
Interest on loan receivable 50,352 52,608
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Total income 4,282,225 4,411,914
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Expenses:
Depreciation 906,056 891,417
Amortization of deferred expenses 26,691 26,694
Property operating 2,144,826 2,620,581
Real estate taxes 332,502 340,762
Property management fees 172,036 182,239
Administrative 136,914 110,457
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Total expenses 3,719,025 4,172,150
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Income before participation in joint venture 563,200 239,764
Affiliate's participation in (income) loss
from joint venture (16,355) 10,324
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Net income $ 546,845 $ 250,088
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Net income allocated to General Partner $ 137,339 $ 106,346
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Net income allocated to Limited Partners $ 409,506 $ 143,742
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Net income per Limited Partnership
Interest (359,229 issued and outstanding)$ 1.14 $ 0.40
============== ==============
Distribution to General Partner $ 89,980 $ 128,593
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Distribution to Limited Partners $ 809,824 $ 1,157,338
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Distribution per Limited Partnership
Interest:
Taxable $ 1.75 $ 2.50
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Tax-exempt $ 2.33 $ 3.33
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-I
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the nine months ended September 30, 1995 and 1994
(Unaudited)
1995 1994
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Operating activities:
Net income $ 2,247,744 $ 1,084,607
Adjustments to reconcile net income
to net cash provided by operating
activities:
Affiliate's participation in income
(loss) from joint venture 70,555 (14,833)
Depreciation of properties 2,714,520 2,674,251
Amortization of deferred expenses 80,079 79,598
Net change in:
Accounts and accrued interest
receivable (179,664) 240,364
Prepaid expenses (270,557) (28,696)
Accounts payable 6,937 (563,519)
Due to affiliates (81,170) 98,336
Accrued real estate taxes 521,566 511,284
Escrow liabilities 56,582 62,496
Security deposits (8,574) (5,265)
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Net cash provided by operating activities 5,158,018 4,138,623
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Investing activities:
Collection of principal payments on loan
receivable 131,366 124,684
Improvements to properties (58,394) (738,434)
Payment of deferred expenses (27,921)
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Net cash provided by or (used in)
investing activities 72,972 (641,671)
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Financing activities:
Distributions to Limited Partners (3,124,500) (3,472,014)
Distributions to General Partner (347,166) (385,779)
Capital contributions from joint venture
partner - affiliate 45,065
Distributions to joint venture partner -
affiliate (99,615) (17,999)
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Net cash used in financing activities (3,571,281) (3,830,727)
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Net change in cash and cash equivalents 1,659,709 (333,775)
Cash and cash equivalents at beginning
of period 7,207,000 8,252,048
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Cash and cash equivalents at end of period $ 8,866,709 $ 7,918,273
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-I
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the nine months and quarter
ended September 30, 1995, and all such adjustments are of a normal and
recurring nature.
2. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
nine months ended September 30, 1995 are:
Paid
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Nine Months Quarter Payable
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Mortgage servicing fees $ 7,218 $ 2,406 $ 802
Reimbursement of expenses to
the General Partner, at cost 234,586 30,567 20,245
3. Subsequent Event:
In October 1995, the Partnership paid $809,824 ($1.75 per Taxable Interest and
$2.33 per Tax-exempt Interest) to the holders of Limited Partnership Interests
representing the quarterly distribution for the third quarter of 1995.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-I
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Equity Pension Investors-I (the "Partnership") is a limited partnership
formed in 1983 to make first mortgage loans and to invest in and operate
income-producing real property. The Partnership raised $179,614,500 from sales
of Limited Partnership Interests and utilized these proceeds to fund six loans
and acquire three real property investments. The Partnership accepted deeds in
lieu of foreclosure on two of the loans, acquired one of its collateral
properties at a foreclosure sale, and accepted prepayments on two additional
loans. As of September 30, 1995, the Partnership has one loan and operates six
properties.
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 1994 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Net Income
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Reduced tenant related expenditures at two of the Partnership's office
buildings and lower expenditures for interior upgrades at the Oxford Hills
Apartments resulted in an increase in net income during the nine months and
quarter ended September 30, 1995 as compared to the same periods in 1994.
Further discussion of the Partnership's operations is summarized below.
1995 Compared to 1994
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Unless otherwise noted, discussions of fluctuations between 1995 and 1994 refer
to both the quarter and nine months ended September 30, 1995 and 1994.
The Fairview Plaza III Office Building loan is on non-accrual status, whereby
income is recorded only as cash payments are received from the borrower.
Pursuant to the terms of the January 1992 modification of the loan, the
Partnership received payments totaling approximately $291,000 during each of
the nine months ended September 30, 1995 and 1994. Of the amounts received,
approximately $160,000 was recorded as interest income and $131,000 as a
principal reduction in 1995, and approximately $166,000 as interest income and
$125,000 as a principal reduction in 1994. Interest income is presented net of
mortgage servicing fees in the financial statements.
Increased cash available for short-term investment and higher average interest
rates were the primary reasons for an increase in interest income on short-term
investments during 1995 as compared to the same periods in 1994.
Decreased tenant related expenditures at the Pacific Center and GSB office
buildings and lower expenditures for interior upgrades at the Oxford Hills
Apartments resulted in lower property operating expenses for 1995 as compared
to the same periods in 1994.
<PAGE>
Administrative expense increased for the quarter ended September 30, 1995 as
compared to the same period in 1994 due to an increase in third party
professional fees.
The Pacific Center Office Building generated income in 1995 due to lower tenant
related expenditures, which resulted in affiliated participation in income from
the joint venture for 1995 as compared to a loss during 1994.
Liquidity and Capital Resources
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The cash position of the Partnership increased as of September 30, 1995 as
compared to December 31, 1994. The increase resulted primarily from the cash
flow generated from the operation of the Partnership's properties, a portion of
which was used for distributions to Limited Partners and the General Partner.
The Partnership defines cash flow generated from its properties as an amount
equal to the property's revenue receipts less property related expenditures.
During the first nine months of 1995 and 1994, all six of the Partnership's
properties generated positive cash flow. Many rental markets continue to remain
extremely competitive; therefore, the General Partner's goals are to maintain
high occupancy levels while increasing rents where possible and to monitor and
control operating expenses and capital improvement requirements at the
properties. As of September 30, 1995, the occupancy rates of the Partnership's
residential properties ranged from 95% to 98% and the commercial properties
ranged from 93% to 100%.
In October 1995, the Partnership paid $809,824 ($1.75 per Taxable Interest and
$2.33 per Tax-exempt Interest) to Limited Partners, representing the quarterly
distribution for the third quarter of 1995. In addition, during October 1995,
the Partnership paid $67,485 to the General Partner as its distributive share
of the cash flow distributed for the third quarter of 1995 and made a
contribution of $22,495 to the Repurchase Fund. The level of this distribution
was consistent with the amount distributed for the second quarter of 1995.
Including the October 1995 distribution, Limited Partners have received
distributions aggregating approximately $228 per $500 Taxable Interest and $320
per $500 Tax-exempt Interest. The General Partner expects that the cash flow
from property operations and debt service payments on the mortgage loan should
enable the Partnership to continue making quarterly distributions to Limited
Partners.
During the nine months ended September 30, 1995, the General Partner used
amounts placed in the Repurchase Fund to repurchase 588 Interests from Limited
Partners at a cost of $165,179.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-I
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits:
(4) Certificate of Limited Partnership set forth as Exhibit 4.1 to Amendment
No. 2 to the Registrant's Registration Statement on Form S-11 dated October 4,
1983 (Registration No. 2-85270) 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. 2-85270) are
incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for the nine month period ending
September 30, 1995 is attached hereto.
(b) Reports on Form 8-K: A Current Report on Form 8-K dated September 14,
1995, as amended by Form 8-K/A dated October 27, 1995, was filed reporting a
change in the Registrant's certifying public accountants.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR EQUITY PENSION INVESTORS-I
By: /s/Thomas E. Meador
-----------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Equity Partners-I, the General Partner
By: /s/Brian D. Parker
------------------------------
Brian D. Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Equity Partners-I, the
General Partner
Date: November 8, 1995
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<PAGE>
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<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 8867
<SECURITIES> 0
<RECEIVABLES> 4349
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9552
<PP&E> 104426
<DEPRECIATION> 40182
<TOTAL-ASSETS> 78075
<CURRENT-LIABILITIES> 1541
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 75080
<TOTAL-LIABILITY-AND-EQUITY> 78075
<SALES> 0
<TOTAL-REVENUES> 12932
<CGS> 0
<TOTAL-COSTS> 7424
<OTHER-EXPENSES> 3260
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2248
<INCOME-TAX> 0
<INCOME-CONTINUING> 2248
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<CHANGES> 0
<NET-INCOME> 2248
<EPS-PRIMARY> 4.94
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