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, 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 13
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
INDEX
Page
Part I: Financial Information
Item 1. Financial Statements:
Balance Sheets, September 30, 1997 and December 31, 1996 3-4
Statements of Operations for the Three Months
Ended September 30, 1997, and 1996 and the Nine Months
Ended September 30, 1997 and 1996 5
Statements of Cash Flows for the Nine Months Ended
September 30, 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
<PAGE>
<TABLE>
<CAPTION>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
BALANCE SHEETS
(Unaudited) (Audited)
September 30, 1997 December 31, 1996
------------------- -----------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 69,034 $ 163,915
Other current assets 0 31
---------- ----------
Total current assets 69,034 163,946
Long-term notes and accrued interest
receivable 139,531 127,668
Investments in local limited
partnerships 2,132,096 2,295,189
---------- ----------
Total assets $2,340,661 $2,586,803
========== ==========
(continued)
The accompanying notes are an integral part of
these financial statements.
3
<PAGE>
<CAPTION>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
BALANCE SHEETS (continued)
(Unaudited) (Audited)
September 30, 1997 December 31, 1996
------------------- -----------------
<S> <C> <C>
Liabilities and Partners' Deficit
Current liabilities:
Accounts payable to affiliates $ 50,776 $ 58,271
Accounts payable 3,792 1,000
Accrued expense -- 15,600
Accrued interest payable 478,286 385,901
------------ ------------
Total current liabilities 532,854 460,772
Purchase money notes 10,843,413 9,684,281
------------ ------------
Total liabilities 11,376,267 10,145,053
------------ ------------
Partners' deficit:
General partners:
Capital contributions 4,202 4,202
Capital distributions (22) --
Accumulated losses (191,125) (176,373)
------------ ------------
(186,945) (172,171)
------------ ------------
Limited partners (21,576 Units):
Capital contributions (net of
offering costs of $1,134,440) 9,649,520 9,649,520
Capital distributions (2,211) --
Accumulated losses (18,495,970) (17,035,599)
------------ ------------
(8,848,661) (7,386,079)
------------ ------------
Total partners' deficit (9,035,606) (7,558,250)
------------ ------------
Total liabilities and partners'
deficit $ 2,340,661 $ 2,586,803
============ ============
</TABLE>
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 Month Ended
September 30, September 30,
--------------------------- ---------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income $ 11,082 $ 6,076 $ 37,661 $ 20,648
Expenses:
Interest expense 568,723 480,631 1,621,465 1,404,540
General and administrative
expense 33,250 29,085 100,407 87,717
----------- ----------- ----------- -----------
Total expenses 601,973 509,716 1,721,872 1,492,257
----------- ----------- ----------- -----------
Loss before equity in local
limited partnership operations (590,891) (503,640) (1,684,211) (1,471,609)
----------- ----------- ----------- -----------
Equity in income (loss) of local
limited partnership investments 124,227 38,750 209,087 49,560
----------- ----------- ----------- -----------
Net Loss $ (466,664) $ (464,890) $(1,475,124) $(1,422,049)
=========== =========== =========== ===========
Net loss per Limited Partnership
Unit, based on 21,576 Units
outstanding in the first nine
months of 1997 and 1996 $ (21.41) $ (21.33) $ (67.69) $ (65.25)
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
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,
----------------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Cash distributions from local limited
partnerships $ 369,947 $ 288,086
Interest payments on purchase money notes (369,947) (290,553)
Cash paid for Partnership administration
expenses (120,710) (127,711)
Interest received 25,829 12,789
Net cash provided by ----------- -----------
operating activities (94,881) (117,389)
----------- -----------
Net decrease in cash and
cash equivalents (94,881) (117,389)
Cash and cash equivalents at:
Beginning of period 163,915 293,331
----------- -----------
End of period $ 69,034 $ 175,942
=========== ===========
Reconciliation of net loss to net cash provided by operating activities:
Net loss $(1,475,123) $(1,422,049)
Adjustments to reconcile net loss to net
cash used in operating activities:
Share of income of local limited
partnership investments (209,087) (49,560)
Cash distributions from local limited
partnerships 369,947 288,086
Interest expense added to purchase money
notes, net of discount amortization 1,159,132 924,074
Interest income added to long-term
notes receivable, net of discount
amortization, and interest received (11,863) (7,871)
Decrease (increase) in other current assets 31 11
(Decrease) increase in:
Accrued interest payable 92,385 189,913
Accounts payable to affiliates (7,495) (26,497)
Accounts payable 2,792 1,004
Accrued expenses (15,600) (14,500
Net cash used by operating ----------- -----------
activities $ (94,881) $ (117,389)
=========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
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,
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)
September 30, 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 (3,631,432) (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 22,345 --
----------- -----------
Investments in Local Limited Partnerships $ 2,132,096 $ 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 Nine Months Ended
September 30,
--------------------------
1997 1996
---- ----
Rental and other income $ 4,335,015 $ 3,890,563
Expenses:
Operating expenses 2,733,215 2,464,566
Interest expense 776,828 908,248
Depreciation and amortization 726,139 713,563
----------- -----------
Total expenses 4,236,182 4,086,377
----------- -----------
Net income(loss) $ 98,833 $ (195,814)
=========== ===========
Partnership's share of net income (loss) $ 98,750 $ (190,318)
=========== ===========
Other partners' share
of net income (loss) $ 83 $ (5,496)
=========== ===========
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, 1997 and 1996 and the share
of net loss in the above Summarized Statements of Operations consists of the
following:
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
---------------------------------
1997 1996
---- ----
<S> <C> <C>
Share of income (loss) in Local Limited
Partnership Investments in the
Partnership's Statement of Operations $ 209,087 $ 49,560
Partnership's share of income (loss) in the above
summarized Statements of Operations 98,750 (190,318)
--------- ---------
Difference $ 110,337 $ 239,878
========= =========
Partnership's unrecorded share of losses:
Linden Park $ 36,666 $ 165,293
Brierwood Ltd. 14,061 21,709
Brierwood II, Ltd. 3,967 9,032
Pine Forest Apartments, Ltd. 17,703 24,902
Surry Manor 15,595 18,942
Glendale Manor -- --
--------- ---------
Subtotal unrecorded losses 87,992 239,878
Cash Distributions from Glendale Manor
recorded as investment income 22,345 --
--------- ---------
Total $ 110,337 $ 239,878
========= =========
</TABLE>
(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.
Certain Local Limited Partnerships have made payments on behalf of the
Partnership for non-resident state withholding taxes in accordance with state
income tax regulations. These amounts totaling $2,233 during the first nine
months of 1997 have been treated as distributions from the Local Limited
Partnerships and a distribution to the partners of Liberty Housing Partners
Limited Partnership.
4. Transactions with Affiliates
During the nine months ended September 30, 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 $45,004 $36,234
Partnership management fees 37,500 37,500
As of September 30, 1997 and December 31, 1996, accounts payable to
affiliates totalling $50,776 and $62,274, respectively, represent amounts owed
for reimbursements of Partnership administration expenses of $8,005 and $11,774,
respectively, and partnership management fees of $42,771 and $50,500,
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 nine months ended September
30, 1997, as defined in Section 17 of the Partnership Agreement, is as follows:
Interest income per Statement of Operations $ 37,661
Less: Interest income added to long-term notes
receivable, net of discount amortization ( 11,863)
General and administrative expenses per
Statement of Operations (100,407)
---------
Cash from Operations, as defined (74,609)
---------
Distributable Cash from Operations, as defined $ --
=========
10
<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
September 30,1997, was approximately $15,275,706. The aggregate outstanding
principal amount of the Purchase Money Notes reported on the Partnership's
Balance Sheet ($10,843,413 at September 30, 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 September 30, 1997, the unpaid principal amount of and accrued and
unpaid interest on the Linden Park Associates Limited Partnership Notes equalled
$2,454,066.
At September 30, 1997, the Partnership had reserves of $69,034 in cash
and cash equivalents. Accrued interest totaling $369,947 due on certain Purchase
Money Notes was received and distributed in the second quarter of 1997.
In 1997, the Partnership accrued interest of $11,732 on the Linden Park
Associates Limited Partnership Notes held by the Partnership and received
$20,280 of interest payments on these notes. As of September 30, 1997, the
outstanding balance of principal and accrued and unpaid interest receivable on
these notes amounted to $250,659.
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 $1,475,124 in the first nine
months of 1997 from $1,422,049 in the first nine months of 1996 primarily as a
result of the increase in the Partnership's interest expense of $216,925, net of
the increase in income of local limited partnership investments recognized of
$159,527.
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 $17,013 to $37,661 in the first nine months of
1997 compared to $20,648 in the first nine months of 1996. This increase is
primarily attributable to interest payments received on the Linden Park
Associates Limited Partnership Notes held by the Partnership.
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 interest expense increased to $1,621,465 in the first
nine months of 1997 from $1,404,540 in the first nine months of 1996. Such
increase is attributable to the accrual of interest under the Purchase Money
Notes.
The Partnership's equity in income from the Local Limited Partnerships
was $209,087 in the first nine months of 1997 and $49,560 in the first nine
months of 1996. The $159,527 increase in income recognized in the first nine
months of 1997 is attributable to an increase in the Partnership's share of net
income recorded of $137,182, plus the recognition of investment income of
$22,345 from a cash distribution from Glendale Manor which would have reduced
its investment amount balance below zero.
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
By: TNG Properties Inc.
Managing General Partner
By: /s/ Wilma R. Brooks
Wilma R. Brooks
Chief Financial Officer
Date: November 13, 1997
<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 September 30, 1997 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 69,034
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 69,034
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,340,661
<CURRENT-LIABILITIES> 532,854
<BONDS> 10,843,413
0
0
<COMMON> 0
<OTHER-SE> (9,035,606)
<TOTAL-LIABILITY-AND-EQUITY> 2,340,661
<SALES> 0
<TOTAL-REVENUES> 246,748
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 100,407
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,621,465
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,475,124)
<EPS-PRIMARY> (67.69)
<EPS-DILUTED> 0
</TABLE>
