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 June 30, 1999
[ ] 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.)
100 Second Avenue, Needham, MA 02494
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (781) 444-5251
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 17
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
INDEX
Page
Part I: Financial Information
Item 1. Financial Statements:
Balance Sheets, June 30, 1999 and December 31, 1998 3-4
Statements of Operations for the Three Months
Ended June 30, 1999, and 1998 and the Six Months
Ended June 30, 1999 and 1998 5
Statements of Cash Flows for the Six Months Ended
June 30, 1999, and 1998 6
Notes to Financial Statements 7-10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-15
Part II: Other Information
Item 6. Exhibits and Reports on Form 8-K 16
2
<PAGE>
<TABLE>
<CAPTION>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
BALANCE SHEETS
(Unaudited) (Audited)
June 30, 1999 December 31, 1998
------------- -----------------
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 524,207 $ 42,284
Notes and accrued interest receivable,
current maturities 207,808 159,303
------------ ------------
Total current assets 732,015 201,587
Investments in local limited
partnerships 1,461,042 2,052,426
------------ ------------
Total assets $ 2,193,057 $ 2,254,013
============ ============
(continued)
3
<PAGE>
<CAPTION>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
BALANCE SHEETS (continued)
(Unaudited) (Audited)
June 30, 1999 December 31, 1998
------------- -----------------
Liabilities and Partners' Deficit
<S> <C> <C>
Current liabilities:
Purchase Money Notes, current maturities $ 11,402,499 $ 13,151,250
Accounts payable to affiliates 222,298 173,271
Accounts payable 19,913 2,659
Accrued expenses 10,000 16,500
Accrued interest payable 189,656 263,558
------------ ------------
Total current liabilities 11,844,366 13,607,238
Purchase money notes, net of current maturities 1,073,635 985,493
------------ ------------
Total liabilities 12,918,001 14,592,731
------------ ------------
Contingencies -- --
Partners' deficit:
General partners:
Capital contributions 4,202 4,202
Capital distributions (128) (72)
Accumulated losses (207,912) (224,106)
------------ ------------
(203,838) (219,976)
------------ ------------
Limited partners (21,566 Units at
June 30, 1999 and December 31, 1998):
Capital contributions (net of
offering costs of $1,134,440) 9,649,520 9,649,520
Capital distributions (12,707) (7,122)
Accumulated losses (20,157,919) (21,761,140)
------------ ------------
(10,521,106) (12,118,742)
------------ ------------
Total partners' deficit (10,724,944) (12,338,718)
------------ ------------
Total liabilities and partners'
deficit $ 2,193,057 $ 2,254,013
============ ============
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
--------------------------- ------------------------------
1999 1998 1999 1998
----- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income $ 81,673 $ 8,426 $ 94,640 $ 20,710
----------- ----------- ----------- -----------
Expenses:
Interest expense 386,406 642,294 1,135,343 1,265,737
General and
administrative expense 34,813 28,450 66,360 59,192
----------- ----------- ----------- -----------
Total expenses 421,219 670,744 1,201,703 1,324,929
----------- ----------- ----------- -----------
Loss before equity in
local limited
partnership operations (339,546) (662,318) (1,107,063) (1,304,219)
Equity in income (loss)
of local limited
partnership investments 56,744 (76,216) 72,369 26,975
----------- ----------- ----------- -----------
Net loss before extra-
ordinary items (282,802) (738,534) (1,034,694) (1,277,244)
=========== =========== =========== ===========
Extraordinary items:
Gain on sale of
investment In Fiddler's
Creek Apartments 2,654,107 -- 2,654,107 --
=========== =========== =========== ===========
Net income (loss) $ 2,371,305 $ (738,534) $ 1,619,413 $(1,277,244)
=========== =========== =========== ===========
Units used in computing
Basic Net Loss per
Limited Partnership
Unit 21,566 21,566 21,566 21,571
=========== =========== =========== ===========
Basic Net loss per
Limited Partnership
Unit before extra- $ (12.98) $ (33.90) $ (47.50) $ (58.62)
Ordinary items =========== =========== =========== ===========
Basic net income (loss)
per Limited Partnership $ 108.86 $ (33.90) $ 74.34 $ (58.62)
Unit =========== =========== =========== ===========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended
June 30,
---------------------------------
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Cash distributions from local limited
partnerships $ 251,371 $ 187,183
Interest payments on purchase money notes (245,730) (186,617)
Uncashed interest payments on Purchase
Money Notes from prior years 841 --
Cash paid for Partnership administration
expenses (14,576) (22,225)
Interest received 12,207 12,800
----------- -----------
Net cash provided (used) by
operating activities 4,113 (8,859)
----------- -----------
Cash Flows from financing activity:
Capital distributions (5,641) (566)
----------- -----------
Net cash used by financing
activity (5,641) (566)
Cash Flows from extraordinary items:
Cash proceeds from sale of investment in
Fiddlers Creek Apartments 483,451 --
----------- -----------
Net Cash provided by extraordinary items 483,451 --
----------- -----------
Net increase in cash and cash equivalents 481,923 (9,425)
Cash and cash equivalents at:
Beginning of period 42,284 65,685
----------- -----------
End of period $ 524,207 $ 56,260
=========== ===========
Reconciliation of net loss before extraordinary items to net cash provided
(used) by operating activities:
Net loss before extraordinary items: $(1,034,694) $(1,277,244)
Adjustments to reconcile net loss to net
cash provided (used) by operating activities:
Share of income of local limited
partnership investments (72,369) (26,975)
Cash distributions from local limited
partnerships 251,371 187,183
Interest expense added to purchase money
notes, net of discount amortization 964,358 1,097,297
Interest income added to long-term
notes receivable, net of discount
amortization, and interest received (82,432) (7,909)
(Decrease) increase in:
Accrued interest payable (73,902) (18,178)
Accounts payable to affiliates 49,027 49,002
Accounts payable 17,254 3,965
Accrued expenses (14,500) (16,000)
----------- -----------
Net cash provided by operating
activities $ 4,113 $ (8,859)
=========== ===========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</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 June 30, 1999.
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, 1998.
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)
June 30, December 31,
1999 1998
----------- ------------
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 (3,517,940) (3,571,307)
Cash distributions received from Local
Limited Partnerships (4,069,572) (3,818,231)
Cash distributions received from Local
Limited Partnerships recognized as
Investment income 93,132 74,160
----------- -----------
Sale of Investment in Fiddler's
Creek Apartments (412,382) --
----------- -----------
Investments in Local Limited Partnerships $ 1,461,042 $ 2,052,426
=========== ===========
(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 Six Months Ended
June 30,
--------------------------------
1999 1998
---- ----
Rental and other income $ 2,704,338 $ 2,731,973
Expenses:
Operating expenses 1,747,669 1,884,244
Interest expense 506,319 506,946
Depreciation and amortization 489,155 488,655
----------- -----------
Total expenses 2,743,143 2,879,845
----------- -----------
Net income (loss) $ (38,805) $ (147,872)
=========== ===========
Partnership's share of net loss $ (37,668) $ (146,643)
=========== ===========
Other partners' share of net loss $ (1,137) $ (1,229)
=========== ===========
The differences between the Partnership's share of income (loss) in
Local Limited Partnership investments in the Partnership's Statement of
Operations for the six months ended June 30, 1999 and 1998 and the share of net
loss in the above Summarized Statements of Operations consists of the following:
For the Six Months Ended
June 30,
-------------------------
1999 1998
---- ----
Share of income in Local Limited
Partnership Investments in the
Partnership's Statement of Operations $ 72,369 $ 26,975
Partnership's share of loss in the
above summarized Statements of Operations (37,662) (146,643)
--------- ---------
Difference $ 110,037 $ 173,618
========= =========
Partnership's unrecorded share of losses (income):
Linden Park $ 54,521 $ 44,297
Briarwood Ltd. 8,131 12,989
Briarwood II, Ltd. 6,042 3,416
Pine Forest Apartments, Ltd. 5,995 13,066
Surry Manor 29,317 30,733
Glendale Manor -- 18,022
Prior year loss carry forward applied
against 1999 net income
Meadowwood (11,636) --
Glendale Manor (1,335) --
--------- ---------
Subtotal 91,035 122,523
Cash Distributions
recorded as investment income 19,002 51,095
--------- ---------
Total $ 110,037 $ 173,618
========= =========
(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, Glendale
Manor and Meadowwood, LTD., until its related investment was reduced to zero.
Subsequent to that point, any cash distributions received from these seven
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 $5,641 during the first six
months of 1999 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 six months ended June 30, 1999, and 1998 the Partnership
recognized general and administrative expenses owed to the Managing General
Partner, as follows:
1999 1998
---- ----
Reimbursement of Partnership
Administration expenses $25,019 $24,026
Partnership management fees 25,000 25,000
As of June 30, 1999 and December 31, 1998, accounts payable to
affiliates totaling $222,298 and $124,273, respectively, represent amounts owed
for reimbursements of Partnership administration expenses of $92,027 and
$44,002, respectively, and partnership management fees of $130,271 and $80,271,
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 six months ended June 30,
1999, as defined in Section 17 of the Partnership Agreement, is as follows:
Interest income per Statement of Operations $ 94,640
Less: Interest income added to long-term notes
receivable, net of discount amortization (82,342)
General and administrative expenses per
Statement of Operations (66,360)
--------
Cash from Operations, as defined (54,062)
--------
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 ("PMN") obligations of the Partnership, as
of June 30,1999, was $12,888,086. The aggregate outstanding principal amount of
the Purchase Money Notes reported on the Partnership's Balance Sheet
($12,476,134 at June 30, 1999), 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.
The decrease in PMN obligations from December 31, 1998 to June 30, 1999
reflects $2,624,966 in PMN obligations assumed by the purchaser of the
Partnership's interest in Fiddlers Creek Apartments. On May 28, 1999, the
Partnership sold its interest in Fiddlers Creek Apartments in exchange for
$483,451 in cash and assumption of the PMN obligations. After transaction
expenses, the Partnership recognized a gain estimated to be $2,654,107 on the
sale of the investment. In connection with the sale, the Partnership is required
to remit withholding taxes of approximately $242,100 to the state of North
Carolina. The benefit of this payment will be allocated among the Partnership's
units of limited partnership. The Partnership anticipates that approximately
$150,000 of the remaining cash will be distributed to the Partnership's unit
holders.
As of June 30, 1999, the unpaid principal amount of and accrued and
unpaid interest on the Linden Park Associates Limited Partnership Notes equaled
$2,398,422.
At June 30, 1999, the Partnership had reserves of $89,097, including
$48,341 retained from the proceeds of the Fiddlers Creek transaction. The
reserves also include $841 for checks issued to certain Purchase Money Note
holders for interest which have never been cashed. This amount is also included
in accrued interest payable.
In 1999, the Partnership accrued interest of $18,093 on the Linden Park
Associates Limited Partnership Notes held by the Partnership and received
$10,185 of interest payments on these notes. In June 1999 the Partnership wrote
off the unamortized discount balance of $74,524, which is also included in
interest income. On July 15, 1999 Linden Park Associates Limited Partnership
refinanced their existing debt and paid in full the principal and accrued and
unpaid interest on these notes. (See further discussion below). As of June 30,
1999, the outstanding balance of principal and accrued and unpaid interest
receivable on these notes amounted to $207,808. This amount reflects a reduction
of $33,928, payable as consulting fees in connection with the Fiddlers Creek
transaction.
The liquidity of the Local Limited Partnerships in which the
Partnership has invested is dependent on the ability of the respective Local
Limited Partnerships, which own and operate government assisted multi-family
rental housing complexes, to generate cash flow sufficient to fund operations
and debt service and to maintain working capital reserves. Each of the Local
Limited Partnerships is regulated by government agencies which require monthly
funding of certain operating and capital improvements reserves and which
regulate the amount of cash to be distributed to owners.
11
<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, continued
Each Local Limited Partnership's source of funds is rental income
received from tenants and government subsidies. Certain of the Local Limited
Partnership's receive rental income pursuant to Section 8 rental assistance
contracts which expire beginning in 1999 and continuing through 2000. Under the
Multifamily Assisted Housing and Reform and Affordability Act (MAHRAA) of 1997,
Congress set forth the legislation for a permanent "mark-to-market" program and
provided for permanent authority for the renewal of Section 8 Contracts. On
September 11, 1998, HUD issued an interim rule to provide clarification of the
implementation of the mark-to-market program. Owners with Section 8 contracts
expiring after September 30, 1998 are subject to the provisions of MAHRAA. As
such, each Local Limited Partnership may choose to either opt out of the Section
8 program, request mortgage restructuring and renewal of the Section 8 contract,
or request renewal of the Section 8 contract without mortgage restructuring.
Each option contains a specific set of rules and procedures that must be
followed in order to comply with the requirements of MAHRAA. Management is
reviewing the status of each Local Limited Partnership with the local General
Partner to determine which option under the MAHRAA should be exercised by the
Local Limited Partnership.
The Purchase Money Notes outstanding for ten of the twelve properties
now held in this portfolio start to become due in September 1999. In order to
pay at maturity the Purchase Money Notes with respect to any particular Local
Limited Partnership, the Partnership will most likely be required to (a) sell
its interest in the Local Limited Partnership for a price equal to or greater
than the amounts due under the associated notes (b) obtain financing in an
amount sufficient to repay the notes or (c) cause the Local Limited Partnership
to sell or refinance its housing project in a transaction sufficient to repay
indebtedness encumbering the project and generate net proceeds to the
Partnership sufficient to enable the Partnership to repay the notes.
Alternatively, the Partnership could seek extension or modification of the
payment terms of the Purchase Money Notes. It does not appear that the principal
and accrued interest due can be realized or supported by the current value of
most of the respective properties, through either a sale or refinancing.
The Partnership continues to explore options for resolving the Purchase
Money Notes. In connection with these efforts the partnership engaged the
General Partner of Linden Park Associates Limited Partnership (G.P.) to assist
with the workout or liquidation of the Partnership's portfolio. The terms of the
engagement provide for the payment of certain fees and expenses. These fees and
expenses will be paid from the principal and interest from the Linden Park
Associates Limited Partnership notes held by the Partnership. If the workout or
liquidation of the entire portfolio is successfully completed the Partnership's
entire interest in these notes will have been exhausted. As of June 30, 1999,the
consulting fees due to the G.P. from the successful sale of the Partnership's
investment in Fiddlers Creek Apartments is $33,928. In the first six months of
1999, the Partnership has reimbursed the G.P. for travel expenses and expenses
for accounting and legal fees incurred totaling $7,396.
12
<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, continued
As part of the agreement with the G.P., the Partnership granted the G.P.
an option to acquire the Partnership's interest (and that of its affiliate
Liberty LGP Limited Partnership) in Linden Park Associates Limited Partnership
which may be exercised through March 2002 at a purchase price of $400,000
through March 2000 and increasing by $100,000 each year thereafter. On July 15,
1999, the interests in Linden Park Associates were sold pursuant to an exercise
of this option.
Management is currently in negotiation with the general partners of the
Glendale Manor, Surry Manor, Oxford Homes, Williamston Homes and Fuquay Varina
partnerships regarding the purchase of the Partnership's interests in these five
projects. Management has proposed a five-year extension of the PMN's relating to
the Osuna Apartments project to the General Partners. Management has also
entered into negotiations with the general partner of Briarwood I & II, Pine
Forest and Meadowwood Apartments. Management presently anticipates selling the
Partnership's 94% Limited Partnership interests in these properties by year-end.
Discussions have also been held with the general partners of Compass West
Apartments. Management presently anticipates a written agreement within the
third quarter of 1999 to sell the Partnership's 98% interest in that project. No
assurance can be given that the Partnership will be able to obtain any of these
agreements or extensions.
If Partnership funds are insufficient to pay when due the PMN's, the
holders of the PMN's will have the right to foreclose on the Partnership's
interest in the respective Local Limited Partnership. The sale or other
disposition by the Partnership of its interests in the Local Limited
Partnerships, including in connection with such a foreclosure, is likely to
result in recapture of previously claimed tax losses to the Partnership and may
have other adverse tax consequences to the Partnership and to the Limited
Partners. Such recapture may cause some or all of the Limited Partners to have
taxable income from the Partnership without cash distributions from the
Partnership with which to satisfy the tax liability resulting therefrom.
The only sources of Partnership funds are (i) distributions from the
Local Limited Partnerships (substantially all of which are presently required to
be applied to payment of interest accruing on the PMN's), and (ii) Partnership
reserves.
13
<PAGE>
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
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 operating loss decreased to $1,034,694 in the first
six months of 1999 from $1,277,244 in the first six months of 1998. On May 28,
the Partnership sold its investment in Fiddlers Creek Apartments. The
Partnership realized a net gain of $2,654,107, determined as follows:
Cash received $ 483,451
Liability for Purchase Money Notes, current maturities,
assumed by purchaser 2,624,966
Less: Investment in local limited partnership interest sold (412,382)
Less: Partial transfer of the Partnership's notes and accrued
interest receivable from Linden Park Associates Limited
Partnership paid as consulting fees due in connection with
the disposition (33,928)
Less: Legal fees (8,000)
-----------
Gain on sale of investment in Fiddlers Creek Apartments $ 2,654,107
===========
The Partnership's interest income reflects interest earned on reserves,
interest net of discount amortization on the notes receivable and the write-off
of the unamortized discount on the current notes receivable in the second
quarter of 1999. Total interest income was $94,640 and $20,710 for the first six
months of 1999 and 1998, respectively. The difference is primarily due to the
write-off the unamortized discount of $74,524.
The Partnership's interest expense decreased to $1,135,343 in the first
six months of 1999 from $1,265,737 in the first six months of 1998. Such
decrease is attributable to the sale of the Fiddlers Creek investment, which
included the assumption of the related PMN's on May 28, 1999.
The Partnership's equity in income from the Local Limited Partnerships
was $72,369 in the first six months of 1999 and $26,975 in the first six months
of 1998. The $45,394 increase in income recognized in the first six months of
1999 is attributable to an increase of $108,975 in net income from the combined
statements of operations of all Local Limited Partnerships, net of a decrease in
cash distributions recognized as investment income of $32,093 and a decrease in
unrecorded losses of $4,239. The increase in net income of the Local Limited
Partnerships is primarily attributable to the sale of investment in Fiddlers
Creek Apartments and reduced repair and maintenance expenses recognized in the
first six months of 1999 versus 1998 on four operating properties.
14
<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 Year 2000 issue may affect the Partnership's operations as a result
of issues arising from systems and services utilized by the Managing General
Partner or by various Local Limited Partnerships. The Managing General Partner
has inventoried its systems and equipment that may require correction for Year
2000 issues. Management has received certifications from their principal
software provider that all of the core components of the primary software system
critical to the Partnership's operation are Year 2000 compliant. In addition,
the primary network system, its operating system and certain personal computers
attached to that system have been upgraded and are deemed to be Year 2000
compliant.
The auditors for each Local Limited Partnership have reviewed the Year
2000 status of such partnerships. Based on the information reported to the
Partnership by such auditors, management expects that the critical systems
utilized by the Local Limited Partnerships will be timely rendered Year 2000
compliant at little cost to the Local Limited Partnerships.
The Partnership does not expect that any failure of the Managing General
Partnership's systems on which it depends to be Year 2000 compliant would have a
material adverse effect on the Partnership. However, the failure of systems on
which a Local Limited Partnership depends could result in adverse effects,
including the failure to properly account for and process income and expenses
and the failure to properly operate the property. The Partnership cannot
presently predict whether such effects would have a material and adverse effect
on the Local Limited Partnerships, and as a result, the Partnership.
15
<PAGE>
Part II
Other Information
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K.
On June 16, 1999, the Partnership filed a Current Report on Form 8-K to
report the disposition on May 28, 1999 of its limited partners interest in
Fiddlers Creek Apartments. The Form 8-K was amended on August 9, 1999, to
include pro forma financial information for the Partnership, reflecting the
disposition.
On July 26, 1999, the Partnership filed a Current Report on Form 8-K to
report the disposition on July 15, 1999 of its limited partner interest in
Linden Park Associates Limited Partnership.
16
<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: 8/14/99
17
<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 June 30, 1999 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 524,207
<SECURITIES> 0
<RECEIVABLES> 0
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0
0
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