UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended September 30, 1997
Commission File Number: 0-13559
LDP-III
(Exact name of registrant as specified in its governing instruments)
California 94-2911983
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P. O. Box 130, Carbondale, CO 81623
(Address of principal executive offices)
(970) 963-8007
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LDP-III
BALANCE SHEET, SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(Unaudited) (In thousands)
<CAPTION>
September 30, December 31,
1997 1996
<S> <C> <C>
INVESTMENTS IN REAL ESTATE:
Rental properties $ 10,553 $ 10,510
Accumulated depreciation (4,288) (4,086)
Rental properties - net 6,265 6,424
CASH AND CASH EQUIVALENTS
(including interest bearing deposits
of $128 in 1997 and $85 in 1996) 131 85
OTHER ASSETS:
Short-term investment $ 199 298
Accounts receivable 24 17
Prepaid expenses and deposits 4 4
Deferred loan costs and leasing commissions
(net of accumulated amortization of $510 in
1997 and $474 in 1996) 226 126
Total other assets 453 445
TOTAL $ 6,849 $ 6,954
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Notes payable $ 6,858 $ 6,891
Accounts payable 30 0
Other liabilities 165 133
Total liabilities 7,053 7,024
PARTNERS' EQUITY (204) (70)
TOTAL $ 6,849 $ 6,954
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LDP-III
STATEMENTS OF OPERATIONS
(Unaudited) (In thousands except per share amounts)
<CAPTION
Three Months Ended Nine Months Ended
September 30 September 30
1997 1996 1997 1996
<S> <C> <C> <C> <C>
REVENUE:
Rental $ 368 $ 317 $ 925 $ 970
Interest 5 6 14 15
Total revenue 373 323 939 985
EXPENSE:
Interest 124 167 426 518
Operating 92 104 267 340
Depreciation and amortization 82 75 239 276
General and administrative 33 60 140 153
Total expense 331 406 1,072 1,287
INCOME (LOSS) BEFORE GAIN FROM
SALE OF REAL PROPERTY 42 (83) (133) (302)
GAIN FROM SALE OF
REAL PROPERTY 0 223 0 223
NET INCOME (LOSS) 42 140 (133) (79)
NET INCOME (LOSS) PER
PARTNERSHIP UNIT:
Limited Partners 1 4 (4) (2)
General Partners 0 0 0 0
TOTAL 1 4 (4) (2)
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LDP-III
STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
AND THE YEAR ENDED DECEMBER 31, 1996
(Unaudited) (In thousands except unit amounts)
<CAPTION>
LIMITED PARTNERS
NUMBER OF GENERAL TOTAL
PARTNERSHIP PARTNER PARTNERS'
UNITS AMOUNT AMOUNT EQUITY
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1996 37,136 $ 679 0 $ 679
Net Loss - 1996 (193) 0 (193)
Distribution - 1996 (556) 0 (556)
BALANCE, DECEMBER 31, 1996 37,136 (70) 0 (70)
Net loss (133) 0 (133)
BALANCE, SEPTEMBER 30, 1997 37,136 $(204) $ 0 $(204)
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LDP-III
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited) (In thousands)
<CAPTION>
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ (133) $ (280)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation 202 276
Change in operating assets and liabilities:
Increase in other liabilities 33 12
(Increase) in accounts receivable (7) (27)
(Increase) in prepaid expenses and deposits (3) (1)
Increase in accounts payable 30 0
Net cash used by operating activities 122 (20)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sale of rental property 0 660
Capital expenditures (43) (46)
Decrease in short-term investment 99 0
Increase in deferred expenses (99) (38)
Net cash provided (used) in investing activities (43) 576
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable (33) (19)
Net cash provided (used) by financing activities (33) (19)
Increase in cash and cash equivalents 46 537
Cash and cash equivalents at beginning of period 85 410
Cash and cash equivalents at end of period $ 131 $ 947
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LDP-III
FINANCIAL NOTES
(In Thousands)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited financial statements should be read in
conjunction with the Partnership's 1996 Annual Report. These statements
have been prepared in accordance with the instructions to the Securities
and Exchange Commission Form 10-Q and do not include all of the informa-
tion and footnotes required by generally accepted accounting principles
for complete financial statements.
In the opinion of the general partner, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation
have been included. The results of operations for the nine months ended
September 30, 1997 and 1996, are not necessarily indicative of the results
that may be expected for the year ending December 31, 1997.
For purposes of the statement of cash flows, the Partnership considers all
highly liquid investments with a maturity of three months or less from the
date of purchase to be cash equivalents. The Partnership paid interest of
$426 and $518 for the nine months ended September 30, 1997, and 1996,
respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
LDP-III is a California limited partnership formed in August 1983. The
Partnership's business consists of a single segment -- equity investments in
leveraged income-producing real estate.
At September 30, 1997, the Partnership's portfolio consisted of fee title
ownership of two properties located in two geographic areas. The
Partnership's property investments are: Jefferson Place Office Building,
Boise, Idaho and 1201 Cadillac Court Building, Milpitas, California.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1997, the Partnership had a cash balance totaling
approximately $131,000. Cash reserves not needed for current operations are
placed in temporary high-grade investments which can be readily liquidated.
The Partnership has invested $199,000 in short-term federally insured
certificates of deposit which mature on a date in excess of 90 days from the
date of purchase. Due to this characteristic, these deposits are classified
as "short-term investments" rather than as "cash and cash equivalents."
During the first nine months of 1997, the Partnership experienced an increase
in cash of $46,000. Short-term investments decreased by $99,000. Primary
uses of cash were: $142,000 for capital expenditures, leasing commissions and
loan costs, and $33,000 for principal payments on notes payable. Operating
activities contributed $122,000 to cash. As of September 30, 1997, cash and
cash equivalents totaled $131,000 versus a balance of $85,000 at December 31,
1996, while short-term investments at September 30, 1997 totaled $199,000
versus a balance of $298,000 on December 31, 1996.
Management believes the cash flow from operations of the remaining two
properties, Jefferson Place and 1201 Cadillac, will be sufficient to cover the
operating costs of the Partnership. The Partnership has successfully
negotiated a new lease with the sole tenant at 1201 Cadillac, which will
significantly increase revenues for 1997 and thereafter.
Short-term investments (cash reserve) of $199,000 should remain in tact for
the balance of 1997.
The Partnership does not plan any cash distributions to its limited partners
in 1997. All sale and loan proceeds realized by the Partnership will be used
primarily to make cash distributions.
RESULTS OF OPERATIONS
The results of operations for 1997 are not comparable to 1996. Variables
between years such as number of properties operated and number of properties
sold cause comparisons of operations overall to be misleading. It is
meaningful however to compare the operations of those properties operated
continuously during the first nine months of 1997 and 1996.
The following represents the operations of those properties held continuously
during the first nine months of 1997 and 1996:
<CAPTION>
1997 1996 % Change
<S> <C> <C> <C>
Rental Revenue $ 925 $ 844 + 12%
Operating Expense 267 301 - 12%
Net Operating Income 658 543 + 22%
Interest Expense $ 426 $ 455 - 7%
</TABLE>
Overall, revenues increased 12% for the nine months ended September 30, 1997
relative to the same period in 1996. The increase is a result of new lease
revenue on the 1201 Cadillac property.
Market Conditions in Boise and the San Francisco Bay Area have stabilized.
Property operating expenses decreased 12% for the nine months ended September
30, 1997 relative to the same period in 1996.
Leased occupancy remained stable during the nine months ended September 30,
1997. The Jefferson Place Office Building is currently 96% leased, while the
1201 Cadillac property remains fully leased.
PROPERTY SALE
During the third quarter, 1201 Cadillac was marketed for sale and placed under
contract. While the contract has some contingencies, it is expected the
property will be sold during the fourth quarter.
INFLATION
In past years, the Partnership's rental revenues in certain over built real
estate markets, including Boise and the San Francisco Bay Area, have not
followed the overall inflationary trends of the economy. In the future, the
General Partner believes market rate rents in those areas will more closely
follow or exceed inflation. Operating costs for properties in most of the
Partnership's markets have continued to follow inflationary trends. It is not
expected that the Partnership will be materially impacted by inflationary
forces in the near term.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) None
(b) None
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LDP-III
Date: November 14, 1997 /s/ Gary K. Barr
Gary K. Barr, President
Landsing Equities Corporation
Managing General Partner
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 131
<SECURITIES> 0
<RECEIVABLES> 24
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 203
<PP&E> 10553
<DEPRECIATION> 4288
<TOTAL-ASSETS> 6849
<CURRENT-LIABILITIES> 195
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (204)
<TOTAL-LIABILITY-AND-EQUITY> 6849
<SALES> 0
<TOTAL-REVENUES> 939
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 646
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 426
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (133)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
