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, 1997
[ ] 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
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
Item 1. Financial Statements:
Balance Sheets, March 31, 1997 and December 31, 1996 3-4
Statements of Operations for the Three Months
Ended March 31, 1997, and 1996 5
Statements of Cash Flows for the Three Months Ended
March 31, 1997, and 1996 6
Notes to Financial Statements 7-9
Item 2. 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)
March 31, 1997 December 31, 1996
----------------- -----------------
Assets
Current assets:
Cash and cash equivalents $ 516,842 $ 163,915
Other current assets 2,321 31
---------- ----------
Total current assets 519,163 163,946
Long-term notes and accrued interest
receivable 131,622 127,668
Investments in local limited
partnerships 1,972,515 2,295,189
---------- ----------
Total assets $2,623,300 $2,586,803
========== ==========
(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, 1997 December 31, 1996
----------------- -----------------
Liabilities and Partners' Deficit
Current liabilities:
Accounts payable to affiliates $ 58,771 $ 58,271
Accounts payable 1,000 1,000
Accrued expense 15,600 15,600
Accrued interest payable 385,901 385,901
------------ ------------
Total current liabilities 461,272 460,772
Purchase money notes 10,198,949 9,684,281
------------ ------------
Total liabilities 10,660,221 10,145,053
------------ ------------
Partners' deficit:
General partners:
Capital contributions 4,202 4,202
Accumulated losses (181,160) (176,373)
------------ ------------
(176,958) (172,171)
------------ ------------
Limited partners (21,576 Units):
Capital contributions (net of
offering costs of $1,134,440) 9,649,520 9,649,520
Accumulated losses (17,509,483) (17,035,599)
------------ ------------
(7,859,963) (7,386,079)
------------ ------------
Total partners' deficit (8,036,921) (7,558,250)
------------ ------------
Total liabilities and partners'
deficit $ 2,623,300 $ 2,586,803
============ ============
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)
For the Three Months Ended
March 31,
--------------------------
1997 1996
---- ----
Interest income $ 17,227 $ 7,451
Expenses:
Interest expense 514,668 419,190
General and administrative
expense 30,736 29,664
--------- ---------
Total expenses 545,404 448,854
--------- ---------
Loss before equity in income (loss)
of local limited partnership
investments (528,177) (441,403)
--------- ---------
Equity in income (loss) of local
limited partnership
investments 49,506 21,092
--------- ---------
Net loss $(478,671) $(420,311)
========= =========
Net loss per Limited Partnership
Unit, based on 21,576 Units
outstanding in the first three
months of 1997 and 1996 $ (21.96) $ (19.29)
========= =========
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)
For the Three Months Ended
March 31,
--------------------------
1997 1996
---- ----
Cash flows from operating activities:
Cash distributions from local limited
partnerships $ 369,947 $ 125,006
Cash paid for Partnership administration
expenses (30,236) (24,937)
Interest received 13,216 6,312
--------- ---------
Net cash provided by
operating activities 352,927 106,381
--------- ---------
Net increase in cash and
cash equivalents 352,927 106,381
Cash and cash equivalents at:
Beginning of period 163,915 293,331
--------- ---------
End of period $ 516,842 $ 399,712
========= =========
Reconciliation of net loss to net cash provided by operating activities:
Net loss $(478,671) $(420,311)
Adjustments to reconcile net loss to net
cash used in operating activities:
Share of income of local limited
partnership investments (49,506) (21,092)
Cash distributions from local limited
partnerships 369,947 125,006
Interest expense added to purchase money
notes, net of discount amortization 514,668 419,189
Interest income added to long-term
notes receivable, net of discount
amortization, and interest received (3,954) (1,035)
Decrease (increase) in other current assets (57) (103)
(Decrease) increase in:
Accounts payable to affiliates 500 4,678
Accounts payable -- 49
--------- ---------
Net cash provided by operating
activities $ 352,927 $ 106,381
========= =========
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 March 31, 1997.
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 audited financial
statements for the year ended December 31, 1996.
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)
March 31, December 31,
1997 1996
----------- ------------
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 (3,800,788) (3,818,174)
Cash distributions received from Local
Limited Partnerships (3,626,621) (3,254,441)
Cash distributions received from Local
Limited Partnerships recognized as
investment income 32,120 --
----------- -----------
Investments in Local Limited Partnerships $ 1,972,515 $ 2,295,189
=========== ===========
(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 Three Months Ended
March 31,
--------------------------
1997 1996
---- ----
Rental and other income $ 1,325,511 $ 1,298,838
Expenses:
Operating expenses 857,679 822,541
Interest expense 258,943 302,749
Depreciation and amortization 242,047 237,855
----------- -----------
Total expenses 1,358,669 1,363,145
----------- -----------
Net loss $ (33,158) $ (64,307)
=========== ===========
Partnership's share of net loss $ (32,893) $ (59,674)
=========== ===========
Other partners' share
of net income (loss) $ (265) $ (4,633)
=========== ===========
The differences between the Partnership's share of income (loss) in
Local Limited Partnership investments in the Partnership's Statement of
Operations for the three months ended March 31, 1997 and 1996 and the share of
net loss in the above Summarized Statements of Operations consists of the
following:
For the Three Months Ended
March 31,
--------------------------
1997 1996
---- ----
Share of income (loss) in Local Limited
Partnership Investments in the
Partnership's Statement of Operations $ 49,506 $ 21,092
Partnership's share of loss in the above
summarized Statements of Operations (32,893) (59,674)
-------- --------
Difference $ 82,399 $ 80,766
======== ========
Partnership's unrecorded share of losses:
Linden Park $ 30,398 $ 64,660
Brierwood Ltd. 2,069 1,300
Brierwood II, Ltd. 1,304 3,408
Pine Forest Apartments, Ltd. 415 9,573
Surry Manor 14,007 1,825
Glendale Manor 2,086 --
-------- --------
Subtotal unrecorded losses 50,279 80,766
Cash Distributions from Glendale Manor
recorded as investment income 32,120 --
-------- --------
Total $ 82,399 $ 80,766
======== ========
(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., Surry Manor and Glendale
Manor until its related investment was reduced to zero. Subsequent to that
point, any cash distributions received from these six 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, 1997, and 1996 the Partnership
recognized general and administrative expenses owed to the Managing General
Partner, as follows:
1997 1996
---- ----
Reimbursement of Partnership
administration expenses $13,375 $12,181
Partnership management fees 12,500 12,500
As of March 31, 1997 and 1996, accounts payable to affiliates totalling
$58,771 and $93,449, respectively, represent amounts owed for reimbursements of
Partnership administration expenses of $7,771 and $42,949, respectively, and
partnership management fees of $51,000 and $50,500, respectively.
5. Statement of Distributable Cash from Operations
Distributable Cash From Operations for the three months ended March 31,
1997, as defined in Section 17 of the Partnership Agreement, is as follows:
Interest income per Statement of Operations $ 17,227
Less: Interest income added to long-term notes
receivable, net of discount amortization (3,954)
General and administrative expenses per
Statement of Operations (30,736)
--------
Cash from Operations, as defined (17,463)
--------
Distributable Cash from Operations, as defined $ --
========
9
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
ITEM 2. 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, 1997, was approximately $14,883,981. The aggregate outstanding principal
amount of the Purchase Money Notes reported on the Partnership's Balance Sheet
($10,198,949 at March 31, 1997), 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 March 31, 1997, the unpaid principal amount of and accrued and
unpaid interest on the Linden Park Associates Limited Partnership Notes equalled
$2,518,575.
At March 31, 1997, the Partnership had reserves of $146,895. This
consists of cash and cash equivalents of $516,842 less accrued interest totaling
$369,947 due on certain Purchase Money Notes from distributions received from
the related Local Limited Partnerships.
In 1997, the Partnership received $10,828 of interest payments on the
Linden Park Associates Limited Partnership Notes held by the Partnership, and
accrued unpaid interest of $74,533. As of March 31, 1997, the outstanding
balance of principal and accrued and unpaid interest receivable on these notes
amounted to $248,335.
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 $478,671 in the first three
months of 1997 from $420,311 in the first three months of 1996 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 increased $9,776 to $17,227 in the first three months of
1997 compared to $7,451 in the first three months of 1996. This increase is
primarily attributable to interest payments received on the Linden Park
Associates Limited Partnership Notes held by the Partnership.
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 $514,668 in the first
three months of 1997 from $419,190 in the first three months of 1996. 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 $49,506 in the first three months of 1997 and $21,092 in the
first three months of 1996. The $28,414 increase in income recognized in the
first three months of 1997 is attributable to the recognition of investment
income of $32,120 from a cash distribution from Glendale Manor which would have
reduced its investment amount balance below zero, net of a decrease in LHPLP's
share of net income recorded of $3,706.
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
By: TNG Properties Inc.
Managing General Partner
By: /s/ Wilma R. Brooks
Wilma R. Brooks
Chief Financial Officer
Date: 5/9/97
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
at and for the period ended March 31, 1997 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 516,842
<SECURITIES> 0
<RECEIVABLES> 88
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 519,163
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,623,300
<CURRENT-LIABILITIES> 461,272
<BONDS> 10,198,949
0
0
<COMMON> 0
<OTHER-SE> (8,036,921)
<TOTAL-LIABILITY-AND-EQUITY> 2,623,300
<SALES> 0
<TOTAL-REVENUES> 66,733
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 30,736
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 514,668
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (478,671)
<EPS-PRIMARY> (21.96)
<EPS-DILUTED> 0
</TABLE>
