SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1996
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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 (847) 267-1600
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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BALCOR EQUITY PENSION INVESTORS-I
(AN ILLINOIS LIMITED PARTNERSHIP)
BALANCE SHEETS
March 31, 1996 and December 31, 1995
(UNAUDITED)
ASSETS
1996 1995
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Cash and cash equivlants $ 12,462,621 $ 11,305,552
Accounts and accrued interest receivable 283,784 436,233
Prepaid expenses 131,025 208,240
Deferred expenses, net of accumulated
amortization of $639,029 in 1996
and $610,552 in 1995 419,512 447,989
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13,296,942 12,398,014
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Investment in real estate:
Land 10,753,713 10,753,713
Buildings and improvements 94,459,569 94,459,569
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105,213,282 105,213,282
Less accumulated depreciation 42,069,419 41,143,863
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Investment in real estate, net
of accumulated depreciation 63,143,863 64,069,419
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$ 76,440,805 $ 76,467,433
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LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 241,750 $ 238,377
Due to affiliates 43,432 27,398
Accrued real estate taxes 229,805 204,076
Security deposits 485,463 491,955
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Total liabilities 1,000,450 961,806
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Affiliate's minority interest in
joint venture 1,414,978 1,336,859
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Limited Partners' capital (359,229
Partnership Interests issued and
outstanding) 74,257,635 74,471,189
General Partner's deficit (232,258) (302,421)
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Total partners' capital 74,025,377 74,168,768
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$ 76,440,805 $ 76,467,433
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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 March 31, 1996 and 1995
(UNAUDITED)
1996 1995
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Income:
Rental and service $ 4,104,082 $ 4,037,439
Interest on short-term investments 158,684 112,072
Interest on loan receivable 51,494
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Total income 4,262,766 4,201,005
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Expenses:
Depreciation 925,556 904,232
Amortization of deferred expense 28,477 26,694
Property operating 1,949,695 1,604,282
Real estate taxes 287,429 331,425
Property management fees 178,665 170,047
Administrative 103,964 139,767
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Total expenses 3,473,786 3,176,447
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Income before participation in joint
venture 788,980 1,024,558
Affiliate's minority interest in
income from joint venture (32,567) (32,588)
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Net income $ 756,413 $ 991,970
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Net income allocated to General Partner $ 160,143 $ 181,688
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Net income allocated to Limited Partners $ 596,270 $ 810,282
============== ==============
Net income per Limited
Partnership Interest (359,229 issued
and outstanding) $ 1.66 $ 2.26
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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 quarters ended March 31, 1996 and 1995
(UNAUDITED)
1996 1995
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Operating activities:
Net income $ 756,413 $ 991,970
Adjustments to reconcile net income
to net cash provided by operating
activities:
Affiliate's minority interest in
income from joint venture 32,567 32,588
Depreciation of properties 925,556 904,232
Amortization of deferred expenses 28,477 26,694
Net change in:
Accounts and accrued interest
receivable 152,449 (86,982)
Prepaid expenses 77,215 (56,220)
Accounts payable 3,373 2,783
Due to affiliates 16,034 45,250
Accrued real estate taxes 25,729 72,590
Escrow liabilities 14,485
Security deposits (6,492) (5,450)
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Net cash provided by
operating activities 2,011,321 1,941,940
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Investing activities:
Collection of principal payments
on loan receivable 43,219
Improvements to properties (58,394)
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Net cash used in investing
activities (15,175)
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Financing activities:
Distribution to Limited Partners (809,824) (1,157,338)
Distribution to General Partner (89,980) (128,593)
Contributions from joint venture
partner - affiliate 45,552
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Net cash used in financing activities (854,252) (1,285,931)
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Net change in cash and cash
equivalents 1,157,069 640,834
Cash and cash equivalents at
beginning of year 11,305,552 7,207,000
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Cash and cash equivalents at
end of period $ 12,462,621 $ 7,847,834
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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:
A reclassification has been made to the previously reported 1995 statements in
order to provide comparability with the 1996 statements. This reclassification
has not changed the 1995 results. In the opinion of management, all adjustments
necessary for a fair presentation have been made to the accompanying statements
for the quarter ended March 31, 1996, 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
quarter ended March 31, 1996 are:
Paid Payable
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Mortgage servicing fees $ 569 None
Reimbursement of expenses to
the General Partner, at cost 19,705 $43,432
3. Subsequent Event:
In April 1996, 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 first quarter of 1996.
<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 three additional
loans. As of March 31, 1996, the Partnership 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 1995 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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Increased tenant related expenditures at two of the Partnership's office
buildings resulted in a decrease in net income during the quarter ended March
31, 1996 as compared to the same period in 1995. Further discussion of the
Partnership's operations is summarized below.
1996 Compared to 1995
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Discussions of fluctuations between 1996 and 1995 refer to the quarters ended
March 31, 1996 and 1995.
Increased cash available for short-term investment, due primarily to the
Fairview III loan prepayment in December 1995, was the primary reason for an
increase in interest income on short-term investments during 1996 as compared
to 1995.
As a result of the Fairview Plaza III loan prepayment in 1995, interest income
on loan receivable ceased during 1996 as compared to 1995.
Increased snow removal costs, tax consultant expense and leasing costs at the
GSB Office Building in addition to increased janitorial costs, tax consultant
expense and tenant related expenditures at the 8280 Greensboro Drive Office
Building resulted in higher property operating expenses for 1996 as compared to
1995.
A lower assessed value and tax rate in 1996 at the Oxford Hills Apartments
resulted in a decrease in real estate tax expense in 1996 as compared to 1995.
Administrative expense decreased during 1996 as compared to 1995 as a result of
lower accounting and investor processing fees.
<PAGE>
Liquidity and Capital Resources
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The cash position of the Partnership increased by approximately $1,157,000 as
of March 31, 1996 as compared to December 31, 1995. Cash flow of approximately
$2,011,000 was provided by operating activities during 1996 consisting
primarily of cash generated from the operation of the Partnership's properties
and interest income from short-term investments which was partially offset by
the payment of administrative expenses. The Partnership's financing activities
consisted primarily of a distribution to Partners of approximately $900,000.
The Partnership defines cash flow generated from its properties as an amount
equal to the property's revenue receipts less property related expenditures.
For the quarter ended March 31, 1996 and 1995, all six of the properties
generated positive cash flow.
As of March 31, 1996, the occupancy rates of the Partnership's residential
properties ranged from 92% to 98% while rates for the commercial properties
ranged from 95% to 100%. 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.
In April 1996, 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 first quarter of 1996. In addition, during April 1996, the
Partnership paid $67,485 to the General Partner as its distributive share of
the Net Cash Receipts distributed for the first quarter of 1996 and made a
contribution of $22,495 to the Repurchase Fund. The level of this distribution
is consistent with that of the prior quarter. Including the April 1996
distribution, Limited Partners have received distributions aggregating
approximately $231 per $500 Taxable Interest, of which $218 represents Net Cash
Receipts and $13 represents Net Cash Proceeds and $326 per $500 Tax-exempt
Interest, of which $290 represents Net Cash Receipts and $36 represents Net
Cash Proceeds. The General Partner expects that the cash flow from property
operations should enable the Partnership to continue making quarterly
distributions to Limited Partners.
Changing interest rates can impact real estate values in several ways.
Generally, declining interest rates may lower the cost of capital allowing
buyers to pay more for a property whereas rising interest rates may increase
the cost of capital and lower the price of real estate.
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 quarter ending March 31,
1996 is attached hereto.
(b) Reports on Form 8-K: No Reports were filed on Form 8-K during the quarter
ended March 31, 1996.
<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
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Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Equity Partners-I, the General Partner
By: /s/Brian D. Parker
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Brian D. Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Equity Partners-I, the
General Partner
Date: May 14, 1996
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<PAGE>
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