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 March 31, 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
There are no Exhibits
Page 1 of 13
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
INDEX
Page
Part I: Financial Information
Financial Statements:
Balance Sheets, March 31, 1996 and December 31, 1995 3-4
Statements of Operations for the Three Months
Ended March 31, 1996, and 1995 5
Statements of Cash Flows for the Three Months Ended
March 31, 1996, and 1995 6
Notes to Financial Statements 7-10
Management's Discussion and Analysis of Financial Condition
and Results of Operations 11-12
2
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
BALANCE SHEETS
(Unaudited) (Audited)
March 31, 1996 December 31, 1995
-------------- -----------------
Assets
Current assets:
Cash and cash equivalents $ 399,712 $ 293,331
Other current assets 212 108
---------- ----------
Total current assets 399,924 293,439
Long-term notes and accrued interest
receivable 112,885 111,850
Investments in local limited
partnerships 2,455,174 2,559,088
---------- ----------
Total assets $2,967,983 $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)
March 31, 1996 December 31, 1995
-------------- -----------------
Liabilities and Partners' Deficit
Current liabilities:
Accounts payable to affiliates $ 93,449 $ 88,771
Accounts payable 49 --
Accrued expense 15,650 15,650
Accrued interest payable 304,463 304,628
------------ ------------
Total current liabilities 413,611 409,049
Purchase money notes 8,570,926 8,151,571
------------ ------------
Total liabilities 8,984,537 8,560,620
------------ ------------
Partners' deficit:
General partners:
Capital contributions 4,202 4,202
Accumulated losses (160,956) (156,753)
------------ ------------
(156,754) (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 (15,509,320) (15,093,212)
------------ ------------
(5,859,800) (5,443,692)
------------ ------------
Total partners' deficit (6,016,554) (5,596,243)
------------ ------------
Total liabilities and partners'
deficit $ 2,967,983 $ 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
March 31,
------------------------------
1996 1995
---- ----
<S> <C> <C>
Interest income $ 7,451 $ 8,185
Expenses:
Interest expense 419,190 356,721
General and administrative
expense 29,664 29,199
--------- ---------
Total expenses 448,854 385,920
--------- ---------
Loss before equity in local
limited partnership operations (441,403) (377,735)
Equity in income (loss) of local
limited partnership
investments 21,092 (16,100)
--------- ---------
Net loss $(420,311) $(393,835)
========= =========
Net loss per Limited Partnership Unit,
based on 21,576 Units outstanding at
March 31, 1996 and 21,616 units
outstanding at March 31, 1995 $ (19.29) $ (18.03)
========= ==========
</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 Three Months Ended
March 31,
----------------------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Cash distributions from local limited
partnerships $ 125,006 $ 39,017
Interest payments on purchase money notes - -
Cash paid for Partnership administration
expenses (24,937) (27,758)
Interest received 6,312 7,662
--------- ---------
Net cash provided by (used in)
operating activities 106,381 18,921
--------- ---------
Net increase (decrease) in cash and
cash equivalents 106,381 18,921
Cash and cash equivalents at:
Beginning of period 293,331 293,255
--------- ---------
End of period $ 399,712 $ 312,176
========= =========
Reconciliation of net loss to net cash provided by (used in) operating
activities:
Net loss $(420,311) $(393,835)
Adjustments to reconcile net loss to net
cash used in operating activities:
Share of (income) losses of local limited
partnership investments (21,092) 16,100
Cash distributions from local limited
partnerships 125,006 39,017
Interest expense added to purchase money
notes, net of discount amortization 419,189 356,721
Interest income added to long-term
notes receivable, net of discount
amortization, and interest received (1,035) (1,035)
Decrease (increase) in other current assets (103) (10,613)
(Decrease) increase in:
Accrued interest payable - -
Accounts payable to affiliates 4,678 12,190
Accounts payable 49 376
Accrued expenses - -
--------- ------
Net cash used in operating activities $ 106,381 $ 18,921
========== =========
</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").
The General Partners of the Partnership through December 27, 1995 were
Liberty Real Estate Corporation, which served as the Managing General Partner,
and LHP Associates Limited Partnership, which served as the Associate General
Partner. On December 27, 1995, Liberty Real Estate Corporation and LHP
Associates Limited Partnership withdrew from the Partnership and assigned and
transferred all of their interests in the Partnership to the Successor General
Partner, TNG Properties Inc., which was admitted to the Partnership as Successor
General Partner. TNG Properties Inc. serves as the Managing General Partner.
The Partnership Agreement authorized the sale of up to 30,010 units of
Limited Partnership Interest ("Units") of which 21,616 were subscribed for and
sold as of the completion of the offering on July 12, 1985.
Pursuant to terms of the Partnership Agreement, Profits or Losses for
Tax Purposes (other than from sales or refinancings) and Distributable Cash From
Operations, both as defined in the Partnership Agreement, are allocated 99% to
the Limited Partners and 1% to the General Partners. Different allocations of
profits or losses and cash distributions resulting from other events are
specified in the Partnership Agreement.
2. Significant Accounting Policies
In the opinion of the General Partners, the accompanying unaudited
financial statements contain all normal recurring adjustments necessary to
present fairly the financial position of the Partnership as of March 31, 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:
(Continued)
7
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
3. Investments in Local Limited Partnerships, continued
(Unaudited) (Audited)
March 31, 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 (3,821,756) (3,842,845)
Cash distributions received from Local
Limited Partnerships (3,090,874) (2,965,871)
----------- -----------
Investments in Local Limited Partnerships $ 2,455,174 $ 2,559,088
=========== ===========
Summarized financial information from the combined statements of
operations of all Local Limited Partnerships is as follows:
For the Three Months Ended
March 31,
--------------------------
1996 1995
---- ----
Rental and other income $ 1,298,838 $ 1,275,862
Expenses:
Operating expenses 822,541 825,780
Interest expense 302,749 309,103
Depreciation and amortization 237,855 237,855
----------- -----------
Total expenses 1,363,145 1,372,738
----------- -----------
Net loss $ (64,307) $ (96,876)
=========== ===========
Partnership's share of net loss $ (59,674) $ (95,659)
=========== ===========
Other partners' share
of net income (loss) $ (4,633) $ (1,217)
=========== ===========
(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 $80,766 difference between the Partnership's $21,092 share of income
(loss) in Local Limited Partnership investments in the Partnership's Statement
of Operations for the three months ended March 31, 1996 and the Partnership's
$59,674 share of loss in the above Summarized Statements of Operations consists
of the Partnership's unrecorded share of losses in Linden Park, Brierwood Ltd.,
Brierwood II, Ltd., Pine Forest Apartments, Ltd. and Surry Manor in the amounts
of $64,660, $1,300, $3,408, $9,573, and $1,825 respectively. Unrecorded losses
totalling $79,559 for the three months ended March 31, 1995 consists of Linden
Park--$62,410, Brierwood, Ltd.--$5,410, Brierwood II, Ltd.--$1,781, and Pine
Forest Apartments-- $9,958. The Partnership's investment in Surry Manor was
reduced to zero in the first quarter of 1996.
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 three months ended March 31, 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 $12,181 $16,093
Partnership management fees 12,500 12,500
As of March 31, 1996 and 1995, accounts payable to affiliates totalling
$93,449 and $18,392 respectively represents amounts owed for reimbursements of
Partnership administration expenses of $42,949 and $5,892 respectively and
partnership management fees of $50,500 and $12,500 respectively.
(Continued)
9
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
5. Statement of Distributable Cash from Operations
Distributable Cash From Operations for the three months ended March 31,
1996, as defined in Section 17 of the Partnership Agreement, is as follows:
Interest income per Statement of Operations $ 7,451
Less: Interest income added to long-term notes
receivable, net of discount amortization (3,954)
General and administrative expenses per
Statement of Operations (29,664)
--------
Cash from Operations, as defined $(26,167)
--------
Distributable Cash from Operations, as defined $ --
========
10
<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 March 31, 1995,
was approximately $14,470,480. The aggregate outstanding principal amount of the
Purchase Money Notes reported on the Partnership's Balance Sheet ($8,570,926 at
March 31, 1996), reflects a discount using an imputed interest rate of
approximately 19%, 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 March 31, 1996, the unpaid principal amount of and accrued and unpaid
interest on the Linden Park Associates Limited Partnership Notes equalled
$2,703,106.
At March 31, 1996, the Partnership's had reserves of $274,706, cash and cash
equivalents of $399,712, less interest payments due on the related Purchase
Money Notes from distributions received from Local Limited Partnerships
totalling $125,006. 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 $102,210. As of March 31, 1996, the
outstanding balance of principal and accrued and unpaid interest receivable on
these notes amounted to $276,013.
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 interest income reflects interest earned on reserves and
interest net of discount amortization on the long term notes receivable. Total
interest income decreased $734 to $7,451 in the first quarter of 1996 from the
first quarter of 1995. This decrease is attributable mainly to slightly lower
interest rates.
The Partnership's interest expense increased to $419,190 in 1996 from
$356,721 in the first quarter of 1995. Such increase is attributable to the
accrual of interest under the Purchase Money Notes.
11
<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 equity in income (loss) from the Local Limited
Partnerships was $21,092 in the first quarter of 1996 and $(16,100) in the first
quarter of 1995. The recognition of income in the first quarter of 1996 and
decrease in equity in loss of Local Limited Partnership investments since 1993
is primarily attributable to the fact that the Partnership did not record losses
for four Local Limited Partnerships because its related investment account in
such partnerships had already been reduced to zero and one for which a partial
recognition of loss reduced the related investment account to zero in the first
quarter of 1996. The Partnership did not record approximately $81,000 of net
losses for five Local Limited Partnerships in 1996; and $79,600 from four Local
Limited Partnerships in the first quarter of 1995. Total net losses reported
from the Local Limited Partnerships for the first quarter of 1996 decreased
approximately $32,000 from those recognized in the first quarter of 1995.
Because of the above discussed factors, net loss increased to $420,311 in
the first quarter of 1996 from $393,835 in the first quarter of 1995.
12
<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: May 15,1996
13
<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
period ended March 31, 1996 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 399,712
<SECURITIES> 0
<RECEIVABLES> 212
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 399,924
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,967,983
<CURRENT-LIABILITIES> 413,611
<BONDS> 8,570,926
0
0
<COMMON> 0
<OTHER-SE> (6,016,554)
<TOTAL-LIABILITY-AND-EQUITY> 2,967,983
<SALES> 0
<TOTAL-REVENUES> 28,543
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 29,664
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 419,190
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (420,311)
<EPS-PRIMARY> (19.29)
<EPS-DILUTED> 0
</TABLE>
