UNITED STATES
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
Exchange Act of 1934
For the period ended June 30, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ___________________ to _______________________
Commission file number 0-13520
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 04-2828131
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
210 South Street, 7th Floor, Boston, Massachusetts 02111-2725
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 423-8777
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.
[X] Yes [ ] No
Page 1 of 13
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
INDEX
Page
Part I: Financial Information
Financial Statements:
Balance Sheets, June 30, 1996 and December 31, 1995 3-4
Statements of Operations for the Three Months
Ended June 30, 1996, and 1995 and the Six Months 5
Ended June 30, 1996 and 1995
Statements of Cash Flows for the Six Months Ended
June 30, 1996, and 1995 6
Notes to Financial Statements 7-9
Management's Discussion and Analysis of Financial Condition
and Results of Operations 10-11
2
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
BALANCE SHEETS
(Unaudited) (Audited)
June 30, 1996 December 31, 1995
------------- -----------------
Assets
Current assets:
Cash and cash equivalents $ 225,821 $ 293,331
Other current assets 100 108
---------- ----------
Total current assets 225,921 293,439
Long-term notes and accrued interest
receivable 116,840 111,850
Investments in local limited
partnerships 2,281,813 2,559,088
---------- ----------
Total assets $2,624,574 $2,964,377
========== ==========
(continued)
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
BALANCE SHEETS (continued)
(Unaudited) (Audited)
June 30, 1996 December 31, 1995
------------- -----------------
Liabilities and Partners' Deficit
Current liabilities:
Accounts payable to affiliates $ 72,771 $ 88,771
Accounts payable - -
Accrued expense 15,650 15,650
Accrued interest payable 470,366 304,628
----------- -----------
Total current liabilities 558,787 409,049
Purchase money notes 8,619,189 8,151,571
----------- -----------
Total liabilities 9,177,976 8,560,620
----------- -----------
Partners' deficit:
General partners:
Capital contributions 4,202 4,202
Accumulated losses (166,325) (156,753)
----------- -----------
(162,123) (152,551)
----------- -----------
Limited partners (21,576 Units):
Capital contributions (net of
offering costs of $1,134,440) 9,649,520 9,649,520
Accumulated losses (16,040,799) (15,093,212)
----------- -----------
(6,391,279) (5,443,692)
----------- -----------
Total partners' deficit (6,553,402) (5,596,243)
----------- -----------
Total liabilities and partners'
deficit $ 2,624,574 $ 2,964,377
=========== ===========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30 June 30
-------------------------- ------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income $ 7,121 $ 9,989 $ 14,572 $ 18,174
Expenses:
Interest expense 504,720 382,748 923,909 739,469
General and administrative
expense 28,967 48,414 58,632 77,613
--------- --------- -------- --------
Total expenses 533,687 431,162 982,541 817,082
--------- --------- -------- --------
Loss before equity in local
limited partnership operations (526,566) (421,173) (967,969) (798,908)
--------- --------- --------- ---------
Equity in income (loss) of local
limited partnership
investments (10,282) 52,070 10,810 35,970
--------- --------- --------- ---------
Net loss $(536,848) $(369,103) $(957,159) $(762,938)
========= ========= ========= =========
Net loss per Limited Partnership Unit,
based on 21,576 Units outstanding
at June 30, 1996 and 21,616 units
outstanding at June 30, 1995 $ (24.63) $ (16.91) $ (43.92) $ (34.94)
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
------------------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Cash distributions from local limited
partnerships $ 288,086 $ 316,819
Interest payments on purchase money notes (290,553) (316,109)
Cash paid for Partnership administration
expenses (74,633) (67,090)
Interest received 9,590 12,331
--------- ----------
Net cash used in
operating activities (67,510) (54,049)
--------- ----------
Net decrease in cash and
cash equivalents (67,510) (54,049)
Cash and cash equivalents at:
Beginning of period 293,331 293,255
--------- ---------
End of period $ 225,821 $ 239,206
========= =========
Reconciliation of net loss to net cash provided by (used in) operating
activities:
Net loss $(957,159) $(762,938)
Adjustments to reconcile net loss to net
cash used in operating activities:
Share of (income) losses of local limited
partnership investments (10,810) (35,970)
Cash distributions from local limited
partnerships 288,086 316,819
Interest expense added to purchase money
notes, net of discount amortization 467,617 363,499
Interest income added to long-term
notes receivable, net of discount
amortization, and interest received (4,990) (6,698)
Decrease (increase) in other current assets 8 (20,711)
(Decrease) increase in:
Accrued interest payable 165,738 59,862
Accounts payable to affiliates (16,000) 31,748
Accounts payable - 340
--------- ---------
Net cash used in operating activities $ (67,510) $ (54,049)
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Organization of Partnership
Liberty Housing Partners Limited Partnership (the "Partnership") was
formed under the Massachusetts Uniform Limited Partnership Act on March 20, 1984
for the primary purpose of investing in other limited partnerships which own and
operate government assisted multi-family rental housing complexes (the "Local
Limited Partnerships").
2. Significant Accounting Policies
In the opinion of the General Partner, the accompanying unaudited
financial statements contain all normal recurring adjustments necessary to
present fairly the financial position of the Partnership as of June 30, 1996.
The financial statements, which do not include all of the information and
footnote disclosures required by generally accepted accounting principles,
should be read in conjunction with the Partnership's Annual Report for the year
ended December 31, 1995.
3. Investments in Local Limited Partnerships
The following is a summary of cumulative activity for investments in
Local Limited Partnerships since their dates of acquisition:
<TABLE>
<CAPTION>
(Unaudited) (Audited)
June 30, December 31,
1996 1995
----------- -----------
<S> <C> <C>
Total acquisition cost to the Partnership $ 9,356,379 $ 9,356,379
Additional capital contributed by the
Partnership 11,425 11,425
Partnership's share of losses of Local
Limited Partnerships (3,832,037) (3,842,845)
Cash distributions received from Local
Limited Partnerships (3,253,954) (2,965,871)
----------- -----------
Investments in Local Limited Partnerships $ 2,281,813 $ 2,559,088
=========== ===========
</TABLE>
(Continued)
7
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
3. Investments in Local Limited Partnerships, continued
Summarized financial information from the combined statements of
operations of all Local Limited Partnerships is as follows:
For the Six Months Ended
June 30,
---------------------------
1996 1995
---- ----
Rental and other income $2,580,854 $2,555,794
Expenses:
Operating expenses 1,661,730 1,560,644
Interest expense 605,499 619,136
Depreciation and amortization 475,711 475,709
---------- ----------
Total expenses 2,742,940 2,655,489
---------- ----------
Net loss $ (162,086) $ (99,695)
========== ==========
Partnership's share of net loss $ (155,541) $ (98,854)
========== ==========
Other partners' share
of net income (loss) $ (6,545) $ (841)
========== ==========
The differences between the Partnership's share of income (loss) in
Local Limited Partnership investments in the Partnership's Statement of
Operations for the six months ended June 30, 1996 and 1995 and the share of loss
in the above Summarized Statements of Operations consists of the Partnership's
unrecorded share of losses as follows:
For the Six Months Ended
June 30,
---------------------------
1996 1995
---- ----
Share of income (loss) in Local Limited
Partnership Investments in the
Partnership's Statement of Operations $ 10,810 $ 35,970
Partnership's share of loss in the above
summarized Statements of Operations (155,541) (98,854)
-------- --------
Difference $166,351 $134,824
======== ========
Unrecorded losses:
Linden Park $129,830 $ 96,026
Brierwood Ltd. 7,566 11,718
Brierwood II, Ltd. 5,701 3,666
Pine Forest Apartments, Ltd. 18,917 23,414
Surry Manor 4,337 -
-------- --------
Total $166,351 $134,824
======== ========
(Continued)
8
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
3. Investments in Local Limited Partnerships, continued
The Partnership recorded its share of losses in Linden Park, Brierwood
Ltd., Brierwood II, Ltd., Pine Forest Apartments, Ltd., and Surry Manor until
its related investment was reduced to zero. Subsequent to that point, any cash
distributions received from these five partnerships have been or will be
recognized as investment income rather than as a reduction in Investment in
Local Limited Partnerships on the Partnership's Balance Sheet. The Partnership
is not obligated to make additional capital contributions to fund the deficit in
its capital accounts in these Local Limited Partnerships.
4. Transactions with Affiliates
During the six months ended June 30, 1996, and 1995 the Partnership
recognized general and administrative expenses owed to the current or
predecessor Managing General Partner, as follows:
1996 1995
---- ----
Reimbursement of Partnership
administration expenses $24,227 $29,043
Partnership management fees 25,000 25,000
As of June 30, 1996 and 1995, accounts payable to affiliates totalling
$72,771 and $37,950 respectively represents amounts owed for reimbursements of
Partnership administration expenses of $22,771 and $12,950 respectively and
partnership management fees of $50,000 and $25,000 respectively.
5. Statement of Distributable Cash from Operations
Distributable Cash From Operations for the six months ended June 30,
1996, as defined in Section 17 of the Partnership Agreement, is as follows:
Interest income per Statement of Operations $ 14,572
Less: Interest income added to long-term notes
receivable, net of discount amortization (7,909)
General and administrative expenses per
Statement of Operations (58,632)
---------
Cash from Operations, as defined (51,969)
---------
Distributable Cash from Operations, as defined $ -
=========
9
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The aggregate outstanding principal amount of and accrued and unpaid interest
on the Purchase Money Note obligations of the Partnership, as of June 30, 1996,
was approximately $14,666,340. The aggregate outstanding principal amount of the
Purchase Money Notes reported on the Partnership's Balance Sheet ($8,619,189 at
June 30, 1996), reflects a discount using an imputed interest rate of
approximately 21%, which was applied to the face amount of the notes on the
respective investment purchase dates and which is used to calculate an annual
interest accrued in accordance with generally accepted accounting principles
that will equate to the legal obligation expected at maturity of the notes.
As of June 30, 1996, the unpaid principal amount of and accrued and unpaid
interest on the Linden Park Associates Limited Partnership Notes equalled
$2,743,606.
At June 30, 1996, the Partnership's had reserves of $225,821 in cash and cash
equivalents. By April 30, 1996, distributable cash flow from seven of the Local
Limited Partnerships to which the Partnership delivered purchase money notes was
distributed to the Partnership in the amount of $288,086. On April 30, 1996, the
Partnership used such cash distributions to pay a portion of the accrued and
unpaid interest on the related Purchase Money Notes.
In 1996, the Partnership received $2,919 of interest payments on the long-term
purchase money notes of Linden Park Associates Limited Partnership held by the
Partnership, and accrued unpaid interest of $106,121. As of June 30, 1996, the
outstanding balance of principal and accrued and unpaid interest receivable on
these notes amounted to $279,924.
Partnership Operations
The Partnership is engaged solely in the business of owning interests in
the Local Limited Partnerships rather than the direct ownership of real estate.
The Partnership's net loss increased to $957,159 in the first half of
1996 from $762,938 in the first half of 1995 primarily as a result of an
increase in the Partnership's interest expense and decreases in its equity in
the income of the Local Limited Partnerships and interest income.
The Partnership's interest income reflects interest earned on reserves
and interest net of discount amortization on the long term notes receivable.
Total interest income decreased $3,602 to $14,572 in the first half of 1996 from
the first half of 1995. This decrease is attributable to both lower interest
rates and lower cash balances.
10
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Partnership Operations, continued
The Partnership's interest expense increased to $923,909 in 1996 from
$739,469 in the first half of 1995. Such increase is attributable to the accrual
of interest under the Purchase Money Notes.
The Partnership's equity in income (loss) from the Local Limited
Partnerships was $10,810 in the first half of 1996 and $35,970 in the first half
of 1995. The Partnership's share of total net losses reported from the Local
Limited Partnerships increased by $56,687. However, losses not recorded by the
Partnership from five Local Limited Partnerships, because its related investment
amount in such partnerships had already been reduced to zero, also increased by
$31,527, resulting in a net decrease of only $25,160 in income recognized.
11
<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.
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
By: TNG Properties Inc.
Managing General Partner
By: /s/ Michael A. Stoller
Michael A. Stoller
President and CEO
Date: August 8,1996
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from unaudited
financial statements of Liberty Housing Partners Limited Partnership for the
6 months ended June 30, 1996 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 225,821
<SECURITIES> 0
<RECEIVABLES> 100
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 225,921
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,624,574
<CURRENT-LIABILITIES> 558,787
<BONDS> 8,619,189
0
0
<COMMON> 0
<OTHER-SE> (6,553,402)
<TOTAL-LIABILITY-AND-EQUITY> 2,624,574
<SALES> 0
<TOTAL-REVENUES> 25,382
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 58,632
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 923,909
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (957,159)
<EPS-PRIMARY> (43.92)
<EPS-DILUTED> 0
</TABLE>
