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, 1998
[ ] 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, March 31, 1998 and December 31, 1997 3-4
Statements of Operations for the Three Months
Ended March 31, 1998, and 1997 5
Statements of Cash Flows for the Three Months Ended
March 31, 1998, and 1997 6
Notes to Financial Statements 7-10
Item 2. 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, 1998 December 31, 1997
--------------- -----------------
Assets
Current assets:
Cash and cash equivalents $ 258,194 $ 65,685
---------- ----------
Total current assets 258,194 65,685
Long-term notes and accrued interest
receivable 147,440 143,485
Investments in local limited
partnerships 1,935,783 2,019,775
---------- ----------
Total assets $2,341,417 $2,228,945
========== ==========
(continued)
3
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
BALANCE SHEETS (continued)
(Unaudited) (Audited)
March 31, 1998 December 31, 1997
--------------- -----------------
Liabilities and Partners' Deficit
Current liabilities:
Accounts payable to affiliates $ 99,774 $ 75,271
Accounts payable 21,212 1,410
Accrued expense -- 16,000
Accrued interest payable 370,165 370,165
------------ ------------
Total current liabilities 491,151 462,846
Purchase money notes 12,167,638 11,544,195
------------ ------------
Total liabilities 12,658,789 12,007,041
------------ ------------
Partners' deficit:
General partners:
Capital contributions 4,202 4,202
Capital distributions (28) (22)
Accumulated losses (203,937) (198,550)
------------ ------------
(199,763) (194,370)
------------ ------------
Limited partners (21,576 Units):
Capital contributions (net of
offering costs of $1,134,440) 9,649,520 9,649,520
Capital distributions (2,771) (2,211)
Accumulated losses (19,764,358) (19,231,035)
------------ ------------
(10,117,609) (9,583,726)
------------ ------------
Total partners' deficit (10,317,372) (9,778,096)
------------ ------------
Total liabilities and partners'
deficit $ 2,341,417 $ 2,228,945
============ ============
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,
-----------------------------
1998 1997
---- ----
Interest income $ 12,284 $ 17,227
Expenses:
Interest expense 623,443 514,668
General and administrative
expense 30,742 30,736
--------- ---------
Total expenses 654,185 545,404
--------- ---------
Loss before equity in local
limited partnership operations (641,901) (528,177)
--------- ---------
Equity in income of local
limited partnership
investments 103,191 49,506
--------- ---------
$(538,710) $(478,671)
========= =========
Net loss per Limited Partnership Unit,
based on 21,576 Units outstanding in the
first three months of 1998 and 1997 $ (24.72) $ (21.96)
========= =========
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,
---------------------------
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Cash distributions from local limited
partnerships $ 187,183 $ 369,947
Cash paid for Partnership administration
expenses (2,437) (30,236)
Interest received 8,329 13,216
--------- ---------
Net cash provided by
operating activities 193,075 352,927
--------- ---------
Cash Flows from financing activity:
Capital distributions (566) --
--------- ---------
Net cash used by financing
activity (566) --
--------- ---------
Net increase in cash and
cash equivalents 192,509 352,927
Cash and cash equivalents at:
Beginning of period 65,685 163,915
--------- ---------
End of period $ 258,194 $ 516,842
========= =========
Reconciliation of net loss to net cash provided by operating activities:
Net loss $(538,710) $(478,671)
Adjustments to reconcile net loss to net
cash used in operating activities:
Share of income of local limited
partnership investments (103,191) (49,506)
Cash distributions from local limited
partnerships 187,183 369,947
Interest expense added to purchase money
notes, net of discount amortization 623,443 514,668
Interest income added to long-term
notes receivable, net of discount
amortization, and interest received (3,955) (3,954)
Decrease (increase) in other current assets -- (57)
(Decrease) increase in:
Accounts payable to affiliates 24,503 500
Accounts payable 19,802 --
Accrued expenses (16,000) --
--------- ---------
Net cash provided by operating
activities $ 193,075 $ 352,927
========= =========
</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 March 31, 1998.
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, 1997.
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,
1998 1997
----------- -----------
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 (3,692,377) (3,744,473)
Cash distributions received from Local
Limited Partnerships (3,813,804) (3,603,556)
Cash distributions received from Local
Limited Partnerships recognized as
investment income 74,160 --
----------- -----------
Investments in Local Limited Partnerships $ 1,935,783 $ 2,019,775
=========== ===========
(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,
---------------------------
1998 1997
---- ----
Rental and other income $ 1,365,510 $ 1,325,511
Expenses:
Operating expenses 857,567 857,679
Interest expense 253,473 258,943
Depreciation and amortization 244,491 242,047
----------- -----------
Total expenses 1,355,531 1,358,699
----------- -----------
Net income(loss) $ 9,979 $ (33,158)
=========== ===========
Partnership's share of net income (loss) $ 9,714 $ (32,893)
=========== ===========
Other partners' share of net income (loss) $ 265 $ (265)
=========== ===========
The differences between the Partnership's share of income in Local
Limited Partnership investments in the Partnership's Statement of Operations for
the three months ended March 31, 1998 and 1997 and the share of net income
(loss) in the above Summarized Statements of Operations consists of the
following:
For the Three Months Ended
March 31,
--------------------------
1998 1997
---- ----
Share of income in Local Limited
Partnership Investments in the
Partnership's Statement of Operations $103,191 $ 49,506
Partnership's share of income (loss) in the
above summarized Statements of Operations 9,714 (32,893)
-------- --------
Difference $ 93,477 $ 82,399
======== ========
Partnership's unrecorded share of losses:
Linden Park $ 23,999 $ 30,398
Brierwood Ltd. 7,558 2,069
Brierwood II, Ltd. 1,723 1,304
Pine Forest Apartments, Ltd. 6,105 415
Surry Manor 887 14,007
Glendale Manor 2,110 2,086
-------- --------
Subtotal unrecorded losses 42,382 50,279
Cash Distributions
recorded as investment income 51,095 32,120
-------- --------
Total $ 93,477 $ 82,399
======== ========
(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 $566 during the first three
months of 1998 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 three months ended March 31, 1998, and 1997 the Partnership
recognized general and administrative expenses owed to the Managing General
Partner, as follows:
1998 1997
---- ----
Reimbursement of Partnership
administration expenses $12,003 $13,375
Partnership management fees 12,500 12,500
As of March 31, 1998 and December 31, 1997, accounts payable to
affiliates totaling $99,774 and $75,271, respectively, represent amounts owed
for reimbursements of Partnership administration expenses of $32,003 and
$20,000, respectively, and partnership management fees of $67,771 and $55,271,
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,
1998, as defined in Section 17 of the Partnership Agreement, is as follows:
Interest income per Statement of Operations $12,284
Less: Interest income added to long-term notes
receivable, net of discount amortization (3,955)
General and administrative expenses per
Statement of Operations (30,742)
--------
Cash from Operations, as defined (22,413)
--------
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 March
31,1998, was approximately $15,311,175. The aggregate outstanding principal
amount of the Purchase Money Notes reported on the Partnership's Balance Sheet
($12,167,638 at March 31, 1998), 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, 1998, the unpaid principal amount of and accrued and
unpaid interest on the Linden Park Associates Limited Partnership Notes equaled
$2,411,664.
At March 31, 1998, the Partnership had reserves of $71,577. This
consists of cash and cash equivalents of $258,194 less accrued interest totaling
$186,617 due on certain Purchase Money Notes from distributions received from
the related Local Limited Partnerships.
In 1998, the Partnership accrued interest of $11,732 on the Linden Park
Associates Limited Partnership Notes held by the Partnership and received $7,777
of interest payments on these notes. As of March 31, 1998, the outstanding
balance of principal and accrued and unpaid interest receivable on these notes
amounted to $243,226, prior to unamortized discount of $95,786.
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 $538,710 in the first three
months of 1998 from $478,671 in the first three months of 1997 primarily as a
result of the increase in the Partnership's interest expense of $108,775, net of
the increase in income of local limited partnership investments recognized of
$53,685.
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 $4,943 to $12,284 in the first three months of
1998 compared to $17,227 in the first three months of 1997. This decrease is
attributable to lower interest payments received on the Linden Park Associates
Limited Partnership Notes held by the Partnership and due to lower cash balances
maintained 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 $623,443 in the first
three months of 1998 from $514,668 in the first three months of 1997. 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 $103,191 in the first three months of 1998 and $49,506 in the first three
months of 1997. The $53,685 increase in income recognized in the first three
months of 1998 is attributable to an increase of $34,710 in the Partnership's
recorded share of the net income of the Local Limited Partnerships, plus an
increase of $18,975 in cash distributions which would have reduced the related
investment balances 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.
IBERTY 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: May 13, 1998
<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, 1998 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 258,194
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 258,194
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,341,417
<CURRENT-LIABILITIES> 491,151
<BONDS> 12,167,638
0
0
<COMMON> 0
<OTHER-SE> (10,317,372)
<TOTAL-LIABILITY-AND-EQUITY> 2,341,417
<SALES> 0
<TOTAL-REVENUES> 115,475
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 30,742
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 623,443
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (538,710)
<EPS-PRIMARY> (24.72)
<EPS-DILUTED> 0
</TABLE>
