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 September 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.)
27 Christina Street, Suite 203, Newton, MA 02161
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 244-2242
210 South Street, 7th Floor, Boston, MA 02111-2725
(Former address, if changed from last report)
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
There are no Exhibits
Page 1 of 12
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
INDEX
Page
Part I: Financial Information
Financial Statements:
Balance Sheets, September 30, 1996 and December 31, 1995 3-4
Statements of Operations for the Three Months
Ended September 30, 1996, and 1995 and the Nine Months 5
Ended September 30, 1996 and 1995
Statements of Cash Flows for the Nine Months Ended
September 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)
September 30, 1996 December 31, 1995
------------------ -----------------
Assets
Current assets:
Cash and cash equivalents $ 175,942 $ 293,331
Other current assets 97 108
---------- ----------
Total current assets 176,039 293,439
Long-term notes and accrued interest
receivable 119,721 111,850
Investments in local limited
partnerships 2,320,563 2,559,088
---------- ----------
Total assets $2,616,323 $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)
September 30, 1996 December 31, 1995
------------------ -----------------
Liabilities and Partners' Deficit
Current liabilities:
Accounts payable to affiliates $ 62,274 $ 88,771
Accounts payable 1,004 -
Accrued expense 1,150 15,650
Accrued interest payable 494,541 304,628
----------- -----------
Total current liabilities 558,969 409,049
Purchase money notes 9,075,646 8,151,571
----------- -----------
Total liabilities 9,634,615 8,560,620
----------- -----------
Partners' deficit:
General partners:
Capital contributions 4,202 4,202
Accumulated losses (170,974) (156,753)
----------- -----------
(166,772) (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 (16,501,040) (15,093,212)
----------- -----------
(6,851,520) (5,443,692)
----------- -----------
Total partners' deficit (7,018,292) (5,596,243)
----------- -----------
Total liabilities and partners'
deficit $ 2,616,323 $ 2,964,377
=========== ===========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
------------------------------- ------------------------
1996 1995 1996 1995
---- ----- ---- ----
<S> <C> <C> <C> <C>
Interest income $ 6,076 $ 7,176 $ 20,648 $ 25,350
Expenses:
Interest expense 480,631 403,018 1,404,540 1,142,487
General and administrative expense 29,085 19,735 87,717 97,348
--------- ---------- ------------ ------------
Total expenses 509,716 422,753 1,492,257 1,239,835
--------- ---------- ------------ ------------
Loss before equity in local
limited partnership operations (503,640) (415,577) (1,471,609) (1,214,485)
---------- ---------- ------------ ------------
Equity in income (loss) of local
limited partnership investments 38,750 (12,446) 49,560 23,524
---------- ---------- ------------ ------------
Net loss $ (464,890) $ (428,023) $ (1,422,049) $ (1,190,961)
========== ========== ============ ============
Net loss per Limited Partnership Unit,
based on 21,576 Units outstanding at
September 30, 1996 and 21,616 units
outstanding at September 30, 1995 $ (21.33) $ (19.61) $ (65.25) $ (54.55)
========== ========== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months Ended
September 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 (127,711) (88,551)
Interest received 12,789 15,686
---------- ------------
Net cash used in operating activities (117,389) (72,155)
---------- ------------
Net decrease in cash and cash equivalents (117,389) (72,155)
Cash and cash equivalents at:
Beginning of period 293,331 293,255
--------- ------------
End of period $ 175,942 $ 221,000
========= ============
Reconciliation of net loss to net cash used in operating activities:
Net loss $(1,422,049) $(1,190,961)
Adjustments to reconcile net loss to net
cash used in operating activities:
Share of income of local limited partnership investments (49,560) (23,524)
Cash distributions from local limited partnerships 288,086 316,819
Interest expense added to purchase money notes, net of discount amortization 924,074 746,247
Interest income added to long-term notes receivable, net of discount
amortization, and interest received (7,871) (10,653)
Decrease (increase) in other current assets 11 (38,882)
(Decrease) increase in:
Accrued interest payable 189,913 80,131
Accounts payable to affiliates (26,497) 48,668
Accounts payable 1,004 -
Accrued expenses (14,500) -
----------- ------------
Net cash used in operating activities $ (117,389) $ (72,155)
=========== ============
</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 September 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:
(Unaudited) (Audited)
September 30, December 31,
1996 1995
----------- ------------
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 (3,793,287) (3,842,845)
Cash distributions received from Local
Limited Partnerships (3,253,954) (2,965,871)
----------- ------------
Investments in Local Limited Partnerships $ 2,320,563 $ 2,559,088
============ ============
(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 Nine Months Ended
September 30,
-----------------------------
1996 1995
---- ----
Rental and other income $3,890,563 $3,808,310
Expenses:
Operating expenses 2,464,566 2,353,649
Interest expense 908,248 928,703
Depreciation and amortization 713,563 713,563
---------- ----------
Total expenses 4,086,377 3,995,915
---------- ----------
Net loss $ (195,814) $ (187,605)
=========== ===========
Partnership's share of net loss $ (190,318) $ (186,111)
=========== ===========
Other partners' share
of net income (loss) $ (5,496) $ (1,494)
========== ==========
The differences between the Partnership's share of income (loss) in
Local Limited Partnership investments in the Partnership's Statement of
Operations for the nine months ended September 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 Nine Months Ended
September 30,
--------------------------
1996 1995
---- ----
Share of income (loss) in Local Limited
Partnership Investments in the
Partnership's Statement of Operations $ 49,560 $ 23,524
Partnership's share of loss in the above
summarized Statements of Operations (190,318) (186,111)
-------- ---------
Difference $239,878 $209,635
======== ========
Unrecorded losses:
Linden Park $165,293 $152,035
Brierwood Ltd. 21,709 13,435
Brierwood II, Ltd. 9,032 4,753
Pine Forest Apartments, Ltd. 24,902 39,412
Surry Manor 18,942 -
--------- --------
Total $239,878 $209,635
======== ========
(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 nine months ended September 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 $36,234 $33,463
Partnership management fees 37,500 37,500
As of September 30, 1996 and 1995, accounts payable to affiliates
totalling $62,274 and $54,870, respectively, represent amounts owed for
reimbursements of Partnership administration expenses of $11,774 and $17,370,
respectively, and partnership management fees of $50,500 and $37,500,
respectively.
5. Statement of Distributable Cash from Operations
Distributable Cash From Operations for the nine months ended September
30, 1996, as defined in Section 17 of the Partnership Agreement, is as follows:
Interest income per Statement of Operations $ 20,648
Less: Interest income added to long-term notes
receivable, net of discount amortization (11,863)
General and administrative expenses per
Statement of Operations (87,717)
--------
Cash from Operations, as defined (78,932)
--------
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 September 30,
1996, was approximately $14,862,203. The aggregate outstanding principal amount
of the Purchase Money Notes reported on the Partnership's Balance Sheet
($9,075,646 at September 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 September 30, 1996, the unpaid principal amount of and accrued and
unpaid interest on the Linden Park Associates Limited Partnership Notes equalled
$2,757,011.
At September 30, 1996, the Partnership's had reserves of $175,942 in cash and
cash equivalents.
In 1996, the Partnership received $4,623 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 $108,958. As of September 30, 1996,
the outstanding balance of principal and accrued and unpaid interest receivable
on these notes amounted to $282,761.
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 $1,422,049 in the first nine
months of 1996 from $1,190,961 in the first nine months of 1995 primarily as a
result of the increase in the Partnership's interest expense.
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 $4,702 to $20,648 in the first nine months of
1996 from the first nine months 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 $1,404,540 in the first
nine months of 1996 from $1,142,487 in the first nine months 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 $49,560 in the first nine months of 1996 and $23,524 in the
first nine months of 1995. The Partnership's share of total net losses reported
from the Local Limited Partnerships increased by $4,207. 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,
increased by $30,243, resulting in a net increase of $26,036 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
President and CEO
By: TNG Properties Inc.
Managing General Partner
By: /s/
Wilma R. Brooks
Chief Financial Officer
Date: November 12, 1996
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited financial statements of Liberty Housing Partners Limited Partnership
for the period ended September 30, 1996 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 175,942
<SECURITIES> 0
<RECEIVABLES> 97
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 176,039
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,616,323
<CURRENT-LIABILITIES> 558,969
<BONDS> 9,075,646
0
0
<COMMON> 0
<OTHER-SE> (7,018,292)
<TOTAL-LIABILITY-AND-EQUITY> 2,616,323
<SALES> 0
<TOTAL-REVENUES> 70,208
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 87,717
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,404,540
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,422,049)
<EPS-PRIMARY> (65.25)
<EPS-DILUTED> 0
</TABLE>
