UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-14934
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DIVERSIFIED HISTORIC INVESTORS
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-2312037
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1609 WALNUT STREET, PHILADELPHIA, PA 19103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 557-9800
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: 11,609.6 Units
UNITS OF LIMITED PARTNERSHIP INTEREST
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(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 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. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Aggregate market value of Units held by non-affiliates of the
Registrant: Not Applicable*
* Securities not quoted in any trading market to Registrant's knowledge.
<PAGE>
PART I
Item 1. Business
a. General Development of Business
Diversified Historic Investors
("Registrant") is a limited partnership formed
in 1984 under Pennsylvania law. As of December
31, 1999, Registrant had outstanding 11,609.6
units of limited partnership interest (the
"Units").
Registrant is presently in its
operating stage. It originally owned eight
properties or interests therein. Partial or
complete interests in six properties have been
lost through foreclosure. See Item 2.
Properties, for a description thereof. It
currently owns two properties and a portion of
its original interest in one property. For a
discussion of the operations of the Registrant,
See Part II, Item 7. Management's Discussion
and Analysis of Financial Condition and Results
of Operations.
b. Financial Information about
Industry Segments
The Registrant operates in one
industry segment.
c. Narrative Description of Business
Registrant is in the business of
operating, holding, selling, exchanging and
otherwise dealing in and with real properties
containing improvements which are "Certified
Historic Structures," as such term is defined
in the Internal Revenue Code (the "Code"), for
use as apartments, offices, hotels and
commercial spaces, or any combination thereof,
or low income housing eligible for the tax
credit provided by Section 42 of the Code, and
such other uses as the Registrant's general
partner may deem appropriate.
Since the Registrant's inception,
all the properties acquired either by the
Registrant, or the subsidiary partnerships in
which it has an interest, have been
rehabilitated and certified as historic
structures and have received the related
investment tax credit. Each of the three
properties currently owned by the Registrant
are held for rental operations. At this time
it is anticipated that all the properties will
continue to be held for this purpose. At such
time as real property values begin to increase,
the Registrant will re-evaluate its investment
strategy regarding the properties.
As of December 31, 1999,
Registrant owned three properties located in
Pennsylvania. In total, the three properties
contain 41 apartment units and 6,188 square
feet ("sf") of commercial space. As of
December 31, 1999, 37 of the apartment units
were under lease at monthly rental rates
ranging from $675 to $1,500. In addition, all
of the commercial space was under lease at
annual rates ranging from $7.07 to $13.50 per
sf. Rental of the apartments and commercial
space is not expected to be seasonal. For
further discussion of the properties, see Item
2. Properties.
The Registrant is affected by and
subject to the general competitive conditions
of the residential and commercial real estate
industries. The properties currently owned by
the Registrant are all located in the Olde City
Historic District (the "District") in
Philadelphia, Pennsylvania in which there are
several similar historically certified
rehabilitated buildings. The Registrant's main
competitor in this market is Historic Landmarks
for Living which owns several similar
residential buildings in the District. The
District has recently re-emerged as a popular
place to live for young professionals and has
created a large demand for the apartments units
owned by the Registrant.
Registrant has no employees.
Registrant's activities are overseen by
Brandywine Construction & Management, Inc.,
("BCMI"), a real estate management firm.
d. Financial Information About
Foreign and Domestic Operations and Export
Sales.
See Item 8. Financial Statements
and Supplementary Data.
Item 2. Properties
As of the date hereof, Registrant
owned three properties, or interests therein.
A summary description of each property held at
December 31, 1999 is given below.
a. The Smythe Stores Condominium
Complex - consists of five adjoining buildings
located at 101-111 Arch Street, in the Olde
City Historic District (the "District") of
Philadelphia, Pennsylvania. In November, 1984,
the Registrant acquired 20 residential units of
the complex's 49 units as the 100% equity owner
of these units. The acquisition and
rehabilitation cost was $4,056,375 ($171 per
sf) funded by an equity contribution and a
series of condominium mortgages with an
original combined principal balance of
$2,440,000. The combined principal balance at
December 31, 1999 is $1,335,267. Each mortgage
bears interest at 12%. Scheduled interest
payments were made through April 1, 1988. At
that time, due to insufficient cash flow, the
Registrant ceased making payments. In 1990,
the lender was placed in receivership by the
Resolution Trust Corporation ("RTC"). The two
entities which purchased the mortgages from the
RTC each filed complaints for foreclosure due
to nonpayment. Foreclosure proceedings on nine
units were filed in the Court of Common Pleas,
Philadelphia County in the matter of Bruin
Holdings, Inc. ("Bruin") v. Diversified
Historic Investors and foreclosure proceedings
on eleven units were filed in the Court of
Common Pleas, Philadelphia County in the matter
of EMC Mortgage Corporation ("EMC") v.
Diversified Historic Investors. In March 1996,
the Bruin cases were settled and the nine
mortgages were sold. The Registrant entered
into an agreement with the new holder of the
mortgages whereby monthly payments of interest
are to be made in an amount equal to net
operating income. In December 1996, the eleven
units associated with the EMC cases were
foreclosed by the lender. During 1999, three
units were sold at sales prices of $555,880,
$369,637 and $376,404.
The remaining six units are
managed by BCMI. As of December 31, 1999, four
apartment units were under lease (66%) at
monthly rental rates ranging from $865 to
$1,500. All leases are renewable, one-year
leases. The occupancy for the previous four
years was 100% for 1998, 96% for 1997, 78% for
1996 and 85% for 1995. The monthly rental
range has been approximately the same since
1995. For tax purposes, this property has a
federal tax basis of $1,243,314 and is
depreciated using the straight-line method with
a useful life of 27.5 years. The annual real
estate taxes are $7,173 which is based on an
assessed value of $138,432 taxed at a rate of
$8.264 per $100. It is the opinion of the
management of the Registrant that the property
is adequately covered by insurance.
b. The Third Quarter Apartments -
consists of 17 apartments and 1,000 square feet
of commercial space located in the District at
47 North Third Street. In November, 1984, the
Registrant acquired the building and is the
100% equity owner of the property. The
property was acquired and rehabilitated for
$1,725,000 ($102 per sf), funded by an equity
contribution and two mortgage loans of $860,000
and $140,000. On June 1, 1993, the first
mortgage was modified. The terms of the
modification included the addition of all
accrued and unpaid interest to the principal
balance, changing the due date to October 1999
and revising the payment terms. In October
1998, the due date was extended to October
2003. The new payment terms require monthly
payments of interest equal to net operating
income, with a minimum of $6,833 per month.
The property has been making payments of at
least the minimum amount of $6,833 per month in
order to keep the loan current. The first
mortgage has a principal balance at December
31, 1999 of $1,217,307 and bears interest at
12%. The second note has a principal balance
of $138,444, bears interest at 15%, and was due
in 1992. In 1991, the Registrant stopped
making scheduled mortgage payments. No notice
of default has yet been received from the
lender.
The property is managed by BCMI.
As of December 31, 1999, 16 of the units were
under lease (94%) at monthly rental rates
ranging from $675 to $1,200 and all of the
commercial space was under lease (100%) at an
annual rental rate of $13.50 per sf. All
residential leases are renewable, one-year
leases. The occupancy for the previous four
years was 94% for 1998, 88% for 1997, 93% for
1996 and 87% for 1995. The monthly rental
range has been approximately the same since
1995. The occupancy for the commercial space
has been 100% for 1998, 58% for 1997 and 100%
for 1996 and 1995. The annual rental rate was
$8.40 per sf for the previous four years. The
commercial lease at Third Quarter expires in
December of 2004 with a total annual rental of
$13,500, which is 7% of the gross annual rental
from the property. For tax purposes, this
property has a federal tax basis of $1,821,589
and is depreciated using the straight-line
method with a useful life of 27.5 years. The
annual real estate taxes are $17,454 which is
based on an assessed value of $211,200 taxed at
a rate of $8.264 per $100. It is the opinion
of the management of the Registrant that the
property is adequately covered by insurance.
c. Wistar Alley - located in the
District at 30-32 North Third Street, in
Philadelphia, Pennsylvania, consists of two
adjoining buildings which contain 18
residential units and 5,188 sf of commercial
area. The Registrant acquired the buildings in
December 1984 and is the 100% equity owner of
the property. The property was acquired and
rehabilitated for $2,230,000 ($101 per sf),
funded by an equity contribution and three
mortgage loans aggregating $1,400,000. On June
1, 1993, the first mortgage was modified. The
terms of the modification included the addition
of all accrued and unpaid interest to the
principal balance, changing the due date to
October 1998 and revising the payment terms. In
October 1998, the due date was extended to
October 2003. The new payment terms require
monthly payments of interest equal to net
operating income, with a minimum of $9,000 per
month. The property has not generated
sufficient cash flow to satisfy the minimum
requirement; however, the loan has not been
declared in default. The first mortgage has a
principal balance at December 31, 1999 of
$1,418,255 and bears interest at 2 1/2% over
the Federal Home Bank Board Cost of Funds Index
with a maximum of 14 1/2% and a minimum of 8
1/2%. The rate was 8 1/2% at December 31,
1999. The second and third notes have
principal balances at December 31, 1999 of
$380,114, and $96,689. The notes bear interest
at 11%, and prime plus 1 1/2%, therefore 10% at
December 31, 1999, respectively, and both
principal and interest are due at the earlier
of the sale of the Property or the year 2009.
The property is managed by BCMI.
As of December 31, 1999, 18 of the residential
units were under lease (95%) at monthly rents
ranging from $745 to $1,350 and all of the
commercial space was under lease (100%) at
annual rental rates ranging from $7.07 to
$11.00 per sf. All residential leases are
renewable, one-year leases. The occupancy for
the residential units for the previous four
years was 94% for 1998, 90% for 1997, 88% for
1996 and 83% for 1995. The monthly rental
range has been approximately the same since
1995. The occupancy for the commercial space
for the previous four years has been 100% for
1998, 100% for 1997, 100% for 1996 and 38% for
1995. The average annual rental rate has been
$6.64 to $10.45 per sf in 1998, $6.00 to $13.85
per sf in 1997, $5.14 to $13.85 per sf for 1996
and $13.85 per sf for 1995.
The following is a table showing
commercial lease expirations at Wistar Alley
for the next five years.
Total annual % of gross
Number of Total sf of rental annual rental
Years leases Expiring covered from property
expiring leases by expiring
leases
2000 0 0 0 0%
2001 0 0 0 0%
2002 2 5,188 $46,057 20%
2003 0 0 0 0%
2004 0 0 0 0%
For tax purposes, this property has
federal tax basis of $2,207,537 and is
depreciated using the straight-line method with
a useful life of 27.5 years. The annual real
estate taxes are $23,139 which is based on an
assessed value of $280,000 taxed at a rate of
$8.264 per $100. It is the opinion of the
management of the Registrant that the property
is adequately covered by insurance.
Item 3. Legal Proceedings
To the best of its knowledge,
Registrant is not party to, nor is any of its
property the subject of any pending material
legal proceedings.
Item 4. Submission of Matters to a Vote of
Security Holders
No matter was submitted during the
fiscal years covered by this report to a vote
of security holders.
PART II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters
a. There is no established public
trading market for the Units. Registrant does
not anticipate any such market will develop.
Trading in the Units occurs solely through
private transactions. The Registrant is not
aware of the prices at which trades occur.
Registrant's records indicate that 105 Units of
record were sold or exchanged in 1999.
b. As of December 31, 1999, there
were 1,235 record holders of Units.
c. Registrant did not declare any
cash dividends in 1999 or 1998.
Item 6. Selected Financial Data
The following selected financial data
are for the five years ended December 31, 1999.
The data should be read in conjunction with the
consolidated financial statements included
elsewhere herein. This data is not covered by
the independent auditors' report.
1999 1998 1997 1996 1995
Rental income $ 494,852 $ 486,864 $ 420,903 $ 480,731 $ 634,710
Interest income 1,557 1,569 620 623 527
Net income (loss) 396,475 (736,581) (810,675) (127,434) (178,506)
Net income (loss)
per unit 33.81 (62.81) (69.13) (10.86) (15.22)
Total assets 2,491,417 2,984,193 3,185,727 3,453,392 4,946,064
(net of
depreciation and
amortization)
Debt obligations 4,586,076 5,879,538 5,877,215 5,834,574 5,607,067
Note: See Part II, Item 7.3 Results of
Operations for a discussion of factors which
materially affect the comparability of the
information reflected in the above table.
Item 7. Management's Discussion and Analysis
of Financial
Condition and Results of Operations
(1) Liquidity
At December 31, 1999, Registrant
had cash of approximately $11,813. Cash
generated from operations is used primarily to
fund operating expenses and debt service. If
cash flow proves to be insufficient, the
Registrant will attempt to negotiate with the
various lenders in order to remain current on
all obligations. The Registrant is not aware
of any additional sources of liquidity.
As of December 31, 1999,
Registrant had restricted cash of $74,163
consisting primarily of funds held as security
deposits and escrows for taxes. As a
consequence of these restrictions as to use,
Registrant does not deem these funds to be a
source of liquidity.
In recent years the Registrant has
realized significant losses, including the
foreclosure of five properties and a portion of
a sixth property, due to the properties'
inability to generate sufficient cash flow to
pay their operating expenses and debt service.
The Registrant has first mortgages in place on
each of its remaining properties that are
basically "cash-flow" mortgages, requiring all
available cash after payment of operating
expenses to be paid to the first mortgage
holder. Therefore it is unlikely that any cash
will be available to the Registrant to pay its
general and administrative expenses, to pay
debt service on the past-due subordinate
mortgage with respect to the Third Quarter or
to pay any debt service on the two accrual
mortgages with respect to Wistar Alley.
It is the Registrant's intention
to continue to hold the properties until they
can no longer meet debt service requirements
(or with respect to Third Quarter and Wistar
Alley, the lender seeks payment on the past due
mortgage) and the properties are foreclosed, or
the market value of the properties increases to
a point where they can be sold at a price which
is sufficient to repay the underlying
indebtedness.
Since the lenders have agreed
either to forebear from taking any foreclosure
action as long as cash flow payments are made,
to accrue all debt service in lieu of payment,
or have (in the case of Third Quarter) not
moved to declare a default for a substantial
period of time after the mortgage due date, the
Registrant believes it is appropriate to
continue presenting its financial statements on
a going concern basis.
(2) Capital Resources
Any capital expenditures needed
are generally replacement items and are funded
out of cash from operations or replacement
reserves, if any. The Registrant is not aware
of any factors which would cause historical
capital expenditures levels not to be
indicative of capital requirements in the
future and accordingly, does not believe that
it will have to commit material resources to
capital investment for the foreseeable future.
If the need for capital expenditures does
arise, the first mortgage holder for Third
Quarter, Wistar Alley and Smythe Stores has
agreed to fund capital expenditures. There
were no funds advanced during 1999 for capital
expenditures.
(3) Results of Operations
During 1999, Registrant recognized
income of $396,475 ($33.81 per limited
partnership unit) compared to a net loss of
$736,581 ($62.81 per limited partnership unit)
in 1998 compared to a net loss of $810,675
($69.13 per limited partnership unit) in 1997.
Rental income increased from
$420,903 in 1997 to $486,864 in 1998 to
$494,852 in 1999. The increase from 1998 to
1999 is the result of an increase at both Third
Quarter and Wistar Alley and a decrease at
Smythe Stores due to the sale of three
condominium units in 1999. Rental income at
Third Quarter increased due to an increase in
the average occupancy (93% to 96%) and an
increase in the average rental rates. Rental
income at Wistar Alley increased due to an
increase in the average rental rates. The
increase from 1997 to 1998 is the result of an
increase at all three properties due to an
increase in the average occupancy and the
average rental rates.
Rental operations expenses
decreased from $289,820 in 1997 to $285,652 in
1998 to $269,895 in 1999. The decrease from
1998 to 1999 is due to a decrease in rental
operations expense at Smythe Stores, partially
offset by an increase in rental operations
expense at Third Quarter and an increase in
maintenance expense at Wistar Alley. The
decrease at Smythe Stores is a result of the
sale of three condominium units. The increase
at Third Quarter is due to the increase in
average occupancy. Maintenance expense
increased at Wistar Alley due to an increase in
the turnover of apartment units. The decrease
from 1997 to 1998 is due to a decrease in
maintenance expense at Wistar Alley partially
offset by an increase in maintenance and
commissions expense at both Smythe Stores and
Third Quarter. Maintenance expense at Wistar
Alley decreased due to deferred maintenance
performed at the property in 1997. Maintenance
and commissions expense increased at Smythe
Stores and Third Quarter due to an increase in
the turnover of apartment units.
Interest expense decreased from
$638,892 in 1997 to $635,899 in 1998 to
$567,159 in 1999. The decrease in interest
expense from 1998 to 1999 is due to the sale of
the condominium units at Smythe Stores in 1999.
In 1999, income of $516,000 was
recognized at the Registrant's three properties
compared to a loss of $616,000 in 1998 and a
loss of $686,000 in 1997. A discussion of
property operations/activities follows:
In 1999, Registrant recognized
income of $755,000 at the six units owned at
the Smythe Stores Condominium complex including
$75,000 of depreciation expense compared to a
loss of $354,000 including $75,000 of
depreciation expense in 1998 and a loss of
$370,000 including $75,000 of depreciation
expense in 1997. Included in income for 1999
is a gain of $102,626 related to the sale of
three condominium units and an extraordinary
gain of $939,333 for the extinguishment of debt
related to those sales. The extraordinary gain
represents the excess of the debt extinguished
by the sales of the three condominium units
over the fair market value of the units.
Overall, exclusive of the gains, the property
would have recognized a loss of $287,000 for
1999 compared to a loss of $354,000 in 1998.
The decrease in the loss from 1998 to 1999 is
the result of a decrease in rental income
partially offset by a decrease in rental
operations expense including maintenance,
management fees, commissions and condominium
fees, and a decrease in interest expense. The
decrease in rental income, rental operations
and interest expense is due to the sale of the
three condominium units in 1999. The decrease
in the loss from 1997 to 1998 is the result of
an increase in rental income due to an increase
in the average rental rates, partially offset
by an increase in maintenance and commission
expense. Both maintenance and commissions
expense increased due to a higher turnover of
apartment units.
On June 30, 1992 Diversified
Historic Properties, Inc., co-partner of the
Registrant's general partner, assigned to D,
LTD (its parent) a note receivable from the
Registrant in the amount of $127,418 which
bears interest at 10% with the entire principal
and accrued interest due on June 30, 1997. On
October 8, 1993 D, LTD obtained a judgment in
the amount of $156,873 on this note in Common
Pleas Court for Philadelphia County,
Pennsylvania. The judgment accrues interest at
15%. Interest accrued was $6,713 during both
1998 and 1999. Payments on the judgment are to
be made from available cash flow from any of
the three properties and before any
distribution can be made to the Registrant's
limited partners. The balance of the note at
December 31, 1999 was $78,831.
In 1999, Registrant incurred a
loss of $144,000 at the Third Quarter
Apartments including $72,000 of depreciation
and amortization expense compared to a loss of
$164,000 including $72,000 of depreciation and
amortization expense in 1998 and a loss of
$174,000 including $72,000 of depreciation and
amortization expense in 1997. The decrease in
the loss from 1998 to 1999 is the result of an
increase in rental income due to an increase in
the average occupancy (93% to 96%) and an
increase in the average rental rates partially
offset by an increase in rental operations
expense including management fees due to the
increase in average occupancy. The decrease in
the loss from 1997 to 1998 is the result of an
increase in rental income due to an increase in
the average occupancy (88% to 93%) and an
increase in the average rental rates partially
offset by an increase in maintenance and
commissions expense increased due to a higher
turnover of apartment units.
In 1999, Registrant incurred a
loss of $95,000 at Wistar Alley including
$88,000 of depreciation and amortization
expense compared to a loss of $98,000 including
$88,000 of depreciation and amortization
expense in 1998 and a loss of $142,000
including $87,000 of depreciation and
amortization expense in 1997. The decrease in
the loss from 1998 to 1999 is the result of an
increase in rental income due to an increase in
the average rental rates partially offset by an
increase in maintenance expense. Maintenance
expense increased due to an increase in the
turnover of apartment units. The decrease in
the loss from 1997 to 1998 is the result of an
increase in rental income due to an increase in
the average occupancy (90% to 96%) and an
increase in the average rental rates combined
with a decrease in maintenance expense due to
deferred maintenance performed at the property
in 1997.
Item7A. Quantitative and Qualitative
Disclosures about Market Risk
Not applicable.
Item 8. Financial Statements and
Supplementary Data
Registrant is not required to furnish
the supplementary financial information
referred to in Item 302 of Regulations S-K.
<PAGE>
Independent Auditor's Report
To the Partners of
Diversified Historic Investors
We have audited the accompanying consolidated
balance sheet of Diversified Historic Investors
(a Pennsylvania Limited Partnership) and
subsidiaries as of December 31, 1999 and 1998
and the related statements of operations,
changes in partners' equity and cash flows for
the years ended December 31, 1999, 1998 and
1997. These consolidated financial statements
are the responsibility of the Partnership's
management. Our responsibility is to express
an opinion on these consolidated financial
statements based on our audit.
We conducted our audit in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about
whether the consolidated financial statements
are free of material misstatement. An audit
includes examining, on a test basis, evidence
supporting the amounts and disclosures in the
consolidated financial statements. An audit
also includes assessing the accounting
principles used and significant estimates made
by management, as well as evaluating the
overall financial statement presentation. We
believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the consolidated financial
statements referred to above present fairly, in
all material respects, the financial position
of Diversified Historic Investors as of
December 31, 1999 and 1998, and the results of
operations and cash flows for the years ended
December 31, 1999, 1998 and 1997, in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming
an opinion on the basic financial statements
taken as a whole. The Schedule of Real Estate
and Accumulated Depreciation on page 24 is
presented for the purposes of additional
analysis and is not a required part of the
basic financial statements. Such information
has been subjected to the auditing procedures
applied in the audit of the basic financial
statements and, in our opinion, is fairly
stated in all material respects in relation to
the basic financial statements taken as a
whole.
Gross, Kreger & Passio, L.L.C.
Philadelphia, Pennsylvania
February 15, 2000
<PAGE>
DIVERSIFIED HISTORIC INVESTORS
(a limited partnership)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
Consolidated financial statements: Page
Consolidated Balance Sheets at December 31, 1999 and 1998 12
Consolidated Statements of Operations for the Years
Ended December 31, 1999, 1998, and 1997 13
Consolidated Statements of Changes in Partners'
Equity for the Years Ended December 31, 1999, 1998,and 1997 14
Consolidated Statements of Cash Flows for the Years
Ended December 31, 1999, 1998, and 1997 15
Notes to consolidated financial statements 16-22
Financial statement schedules:
Schedule XI - Real Estate and Accumulated Depreciation 24
Notes to Schedule XI 25
All other schedules are omitted because they are not applicable or
the required information is shown in the consolidated financial
statements or notes thereto.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS
(a limited partnership)
CONSOLIDATED BALANCE SHEETS
December 31, 1999 and 1998
Assets
1999 1998
Rental properties at cost:
Land $ 305,223 $ 310,833
Buildings and improvements 5,113,269 5,721,049
Furniture and fixtures 127,333 139,377
---------- ----------
5,545,825 6,171,259
Less - accumulated depreciation (3,158,976) (3,290,172)
---------- ----------
2,386,849 2,881,087
Cash and cash equivalents 11,813 12,884
Restricted cash 74,163 73,440
Accounts receivable 16,969 16,782
Other assets (net of accumulated
amortization of $30,510) 1,623 0
---------- ----------
Total $2,491,417 $2,984,193
========== ==========
Liabilities and Partners' Equity
Liabilities:
Debt obligations $4,586,076 $5,879,538
Accounts payable:
Trade 596,181 507,524
Related parties 436,357 399,548
Interest payable 1,863,947 1,573,798
Tenant security deposits 38,318 43,998
Other liabilities 8,619 14,343
---------- ----------
Total liabilities 7,529,498 8,418,749
Partners' equity (5,038,081) (5,434,556)
---------- ----------
Total $2,491,417 $2,984,193
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS
(a limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1999, 1998 and 1997
1999 1998 1997
Revenues:
Rental income $ 494,852 $ 486,864 $ 420,903
Gain on sale 102,626 0 0
Interest income 1,557 1,569 620
---------- ---------- ----------
Total revenues 599,035 488,433 421,523
---------- ---------- ----------
Costs and expenses:
Rental operations 269,895 285,652 289,820
General and administrative 69,840 69,840 69,830
Interest 567,159 635,899 638,892
Depreciation and amortization 234,999 233,623 233,656
---------- ---------- ----------
Total costs and expenses $1,141,893 $1,225,014 $1,232,198
---------- ---------- ----------
Loss before extraordinary item (542,858) (736,581) (810,675)
Extraordinary gain on extinguishment
of debt 939,333 0 0
---------- ---------- ----------
Net income (loss) $ 396,475 ($ 736,581) ($ 810,675)
========== ========== ==========
Net loss per limited partnership unit:
Loss before extraordinary item (46.29) (62.81) (69.13)
Extraordinary gain 80.10 0 0
---------- ---------- ----------
$ 33.81 ($ 62.81) ($ 69.13)
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS
(a limited partnership)
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
For the Years Ended December 31, 1999, 1998 and 1997
Diversified
Historic Limited Total
Advisors (1) Partners (2)
Percentage participation in
profit or loss 1% 99% 100%
Balance at December 31, 1996 ($130,738) ($3,756,562) ($3,887,300)
Net loss (8,107) (802,568) (810,675)
-------- ---------- ----------
Balance at December 31, 1997 (138,845) (4,559,130) (4,697,975)
Net loss (7,366) (729,215) (736,581)
-------- ---------- ----------
Balance at December 31, 1998 (146,211) (5,288,345) (5,434,556)
Net income 3,965 392,510 396,475
-------- ---------- ----------
Balance at December 31, 1999 ($142,246) ($4,895,835) ($5,038,081)
======== ========== ==========
(1) General Partner.
(2) 11,609.6 limited partnership units outstanding at December 31,
1999, 1998, and 1997.
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS
(a limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1999, 1998 and 1997
1999 1998 1997
Cash flows from operating activities:
Net income (loss) $ 396,475 ($736,581) ($810,675)
Adjustments to reconcile net loss
to net cash (used in) provided by
operating activities:
Gain on sale of units (102,626) 0 0
Extraordinary gain on extinguishment (939,333) 0 0
of debt
Depreciation and amortization 234,999 233,623 233,656
Changes in assets and liabilities:
Increase in restricted cash (723) (4,553) (824)
(Increase) decrease in accounts (187) (4,313) 46,113
receivable
Increase in other assets (1,623) 0 0
Increase in accounts payable - trade 88,657 134,402 108,151
Increase in accounts payable - related 36,809 36,809 39,099
parties
Increase in interest payable 290,149 343,657 355,834
(Decrease) increase in tenant security
deposits (5,680) 6,050 (2,281)
(Decrease) increase in other liabilities (5,724) 11,806 (434)
---------- ------- -------
Net cash (used in) provided by
activities: (8,807) 20,900 (31,361)
---------- ------- -------
Cash flows from investing activities:
Proceeds from the sale of units 1,301,921 0 0
Capital expenditures (502) (11,049) (14,587)
---------- ------- -------
Net cash used in investing
activities 1,301,419 (11,049) (14,587)
---------- ------- -------
Cash flows from financing activities:
Repayment of borrowings (1,301,921) 0 0
Borrowings under debt obligations 8,238 2,323 42,641
---------- ------- -------
Net cash provided by financing
activities: (1,293,683) 2,323 42,641
---------- ------- -------
(Decrease) increase in cash and cash
equivalents (1,071) 12,174 (3,307)
Cash and cash equivalents at beginning
of year 12,884 710 4,017
---------- ------- -------
Cash and cash equivalents at end of year $ 11,813 $12,884 $ 710
========== ======= =======
Supplemental Disclosure of Cash Flow
Information:
Cash paid during the year for interest $ 277,010 $292,242 $238,058
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS
(a limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - ORGANIZATION
Diversified Historic Investors (the "Partnership") was formed in March
1984, with Diversified Historic Advisors as the General Partner. Upon
the admission of additional limited partners, the initial limited
partner withdrew.
The Partnership was formed to acquire, rehabilitate, and manage real
properties which are certified historic structures as defined in the
Internal Revenue Code (the "Code"), or which were eligible for
designation as such, utilizing the mortgage financing and the net
proceeds from the sale of limited partnership units. Any
rehabilitations undertaken by the Partnership were done with a view to
obtaining certification of expenditures therefore as "qualified
rehabilitation expenditures" as defined in the Code.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the
preparation of the accompanying consolidated financial statements
follows:
1. Principles of Consolidation
These financial statements reflect all adjustments (consisting only of
normal recurring adjustments) which, in the opinion of the
Partnership's General Partner, are necessary for a fair statement of
the results for those years.
2. Depreciation
Depreciation is computed using the straight-line method over the
estimated useful lives of the assets. Buildings and improvements are
depreciated over 25 years and furniture and fixtures over five years.
3. Costs of Issuance
Costs incurred in connection with the offering and sale of limited
partnership units were charged against partners' equity as incurred.
4. Cash and Cash Equivalents
The Partnership considers all highly liquid instruments purchased with
a maturity of less than three months to be cash equivalents.
5. Net Income or Loss Per Limited Partnership Unit
The net income or loss per limited partnership unit is based on the
weighted average number of limited partnership units outstanding
during the period (11,609.6 in 1999, 1998, and 1997).
6. Income Taxes
Income taxes or credits resulting from earnings or losses are payable
by or accrue to the benefits of the partners; accordingly, no
provision has been made for income taxes in these financial
statements.
7. Restricted Cash
Restricted cash includes amounts held for tenant security deposits and
real estate tax reserves.
8. Revenue Recognition
Revenues are recognized when rental payments are due on a straight-
line basis. Rental payments received in advance are deferred until
earned.
9. Rental Properties
Rental properties are stated at cost. A provision for impairment of
value is recorded when a decline in value of property is determined to
be other than temporary as a result of one or more of the following:
(1) a property is offered for sale at a price below its current
carrying value, (2) a property has significant balloon payments due
within the foreseeable future for which the Partnership does not have
the resources to meet, and anticipates it will be unable to obtain
replacement financing or debt modification sufficient to allow it to
continue to hold the property over a reasonable period of time, (3) a
property has been, and is expected to continue, generating significant
operating deficits and the Partnership is unable or unwilling to
sustain such deficit results of operations, and has been unable to, or
anticipates it will be unable to, obtain debt modification, financing
or refinancing sufficient to allow it to continue to hold the property
for a reasonable period of time or, (4) a property's value has
declined based on management's expectations with respect to projected
future operational cash flows and prevailing economic conditions. An
impairment loss is indicated when the undiscounted sum of estimated
future cash flows from an asset, including estimated sales proceeds,
and assuming a reasonable period of ownership up to 5 years, is less
than the carrying amount of the asset. The impairment loss is
measured as the difference between the estimated fair value and the
carrying amount of the asset. In the absence of the above
circumstances, properties and improvements are stated at cost. An
analysis is done on an annual basis at December 31 of each year.
10. Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
NOTE C - GOING CONCERN
In recent years the Partnership has realized significant losses,
including the foreclosure of five properties and a portion of a sixth
property, due to the properties' inability to generate sufficient cash
flow to pay their operating expenses and debt service. The
Partnership has first mortgages in place on each of its remaining
properties that are basically "cash-flow" mortgages, requiring all
available cash after payment of operating expenses to be paid to the
first mortgage holder. Therefore it is unlikely that any cash will be
available to the Partnership to pay its general and administrative
expenses, to pay debt service on the past-due subordinate mortgage
with respect to the Third Quarter or to pay any debt service on the
two accrual mortgages with respect to Wistar Alley.
It is the Partnership's intention to continue to hold the properties
until they can no longer meet debt service requirements (or with
respect to Third Quarter and Wistar Alley, the lender seeks payment on
the past due mortgage) and the properties are foreclosed, or the
market value of the properties increases to a point where they can be
sold at a price which is sufficient to repay the underlying
indebtedness.
Since the lenders have agreed either to forebear from taking any
foreclosure action as long as cash flow payments are made, to accrue
all debt service in lieu of payment, or have (in the case of Third
Quarter) not moved to declare a default for a substantial period of
time after the mortgage due date, the Partnership believes it is
appropriate to continue presenting the financial statements on a going
concern basis.
NOTE D - PARTNERSHIP AGREEMENT
The significant terms of the amended and restated Agreement of Limited
Partnership (the "Agreement"), as they relate to the financial
statements, follow:
The Agreement provides that, beginning with the date of the admission
of subscribers as limited partners, all distributable cash from
operations (as defined) will be distributed 90% to the limited
partners and 10% to the General Partner.
All distributable cash from sales or refinancing will be distributed
to the limited partners equal to their Original Capital Contribution
plus an amount equal to 6% of their Original Capital Contribution per
annum on a cumulative basis less the sum of all prior distributions
and, thereafter, after receipts by certain affiliates of the General
partner of their subordinated real estate commissions, the limited
partners will receive 85% of cash from sales or refinancings.
Net income or loss from operations of the Partnership is allocated 1%
to the General Partner and 99% to the Limited Partners.
NOTE E - ACQUISITIONS
The Partnership acquired six properties and two general or limited
partnership interests during the period November 1984 to December
1986, as discussed below.
In November 1984, the Partnership purchased 20 residential apartments
located in Philadelphia, Pennsylvania for a cash capital contribution
of $4,056,475. The lender on eleven of the apartments foreclosed in
December 1996. In 1999, the Partnership sold 3 of the apartment
units.
Also in November 1984, the Partnership purchased a building located in
Philadelphia, Pennsylvania, consisting of 17 units and 1,000 square
feet of commercial space, for a cash capital contribution of
$1,725,000.
In December 1984, the Partnership purchased two adjoining buildings
located in Philadelphia, Pennsylvania, consisting of 18 residential
units and 4,500 square feet of commercial space, for a cash
contribution of $405,000.
In December 1984, the Partnership purchased a four-story building
located in Philadelphia, Pennsylvania, consisting of 22,200 square
feet of commercial space, for a cash capital contribution of $465,000.
The lender on the property foreclosed in 1992.
Also in December 1984, the Partnership acquired a building located in
Philadelphia, Pennsylvania, consisting of 14 residential units, for a
cash capital contribution of $160,000. The lender on the property
foreclosed in 1993.
In February 1985, the Partnership was admitted, with a 99% general
partner interest, to a Pennsylvania general partnership which owned 21
residential units located in East Greenwich, Rhode Island, for a cash
capital contribution of $3,600,000. The lender on the property
foreclosed in 1993.
In June 1985, the Partnership was admitted, with a 99.5% general
partner interest, to a Pennsylvania general partnership which owned a
building consisting of 50 residential units located in Reading,
Pennsylvania, for a cash capital contribution of $2,650,000. The
lender on the property foreclosed in 1995.
In December 1986, the Partnership acquired a building located in
Savannah, Georgia, consisting of 13 apartments and 7,820 square feet
of commercial space, for a cash capital contribution of $812,916. The
lender on the property foreclosed in 1993.
NOTE F- DEBT OBLIGATIONS
Debt obligations are as follows:
December 31,
1999 1998
------ ------
Mortgage loans, interest accrues at 12%, $1,335,267 $2,637,188
interest only payable monthly to the
extent of net operating income; principal
due 2015; collateralized by the related
rental properties
Mortgage loan, interest accrues at 12%, 1,217,307 1,213,303
interest only payable monthly to the
extent of net operating income with a
minimum of $6,833; principal due October
31, 2003; collateralized by the related
rental property
Mortgage loan, interest at 15%, payable 138,444 138,444
in equal monthly installments of $1,770
(including interest); due in 1992;
collateralized by the related rental
property (A)
Mortgage loan, interest accrues at 2 1/2% 1,418,255 1,413,800
over the Federal Home Bank Board Cost of
Funds Index with a maximum of 14 1/2% and
a minimum of 8 1/2%; therefore 8 1/2% at
December 31, 1999 and 1998, interest only
payable monthly to the extent of net
operating income with a minimum of
$9,000; principal due October 31, 2003;
collateralized by the related rental
property
Notes payable, interest at 11%; payable 380,114 380,114
monthly, based on the lesser of 75% of
cash flow from the operation of the
properties or certain stated amounts;
principal and all accrued interest is due
at the earlier of sale of the related
properties or 2009; collateralized by the
related rental property (B)
Notes payable, interest at prime plus 1 1/2%
(10% and 9.25% at December 31, 1999 and
1998, respectively); principal and
interest due upon sale of the related
property; collateralized by the related
rental property (C) 96,689 96,689
---------- ----------
$4,586,076 $5,879,538
========== ==========
(A) In 1991, the Partnership stopped making scheduled mortgage
payments. No notice of default has yet been received from the
lender. The interest in arrears amounts to $176,517 at December
31, 1999 which includes $20,767 for each of 1999, 1998 and 1997.
(B) Interest is no longer being accrued on these notes, since the
first mortgage is a cash flow mortgage and is not being serviced
to the extent of total interest due. The interest in arrears
amounts to $355,407 at December 31, 1998 which includes $41,813
for each of 1999, 1998 and 1997.
(C) This note represents amounts owed to developers pursuant to
negative cash flow guarantees. Interest is no longer being
accrued on the remaining note, since the first mortgage is a cash
flow mortgage and is not being serviced to the extent of total
interest due. The interest in arrears amounts to $66,500 at
December 31, 1999 which includes $8,742, $9,488 and $9,613 for
1999, 1998 and 1997, respectively.
Approximate maturities of the mortgage loan obligations at December
31, 1999, for each of the succeeding five years are as follows:
2000 $ 138,444
2001 0
2002 0
2003 2,635,562
2004 0
Thereafter 1,812,070
----------
$4,586,076
==========
NOTE G - TRANSACTIONS WITH RELATED PARTIES
On June 30, 1992 Diversified Historic Properties, Inc., co-partner of
the Partnership's general partner, assigned to D, LTD (its parent) a
note receivable from the Partnership in the amount of $127,418 which
bears interest at 10% with the entire principal and accrued interest
due on June 30, 1997. On October 8, 1993 D, LTD obtained a judgment
in the amount of $156,873 on this note in Common Pleas Court for
Philadelphia County, Pennsylvania. The judgment accrues interest at
15%. Interest accrued was $6,713 during both 1998 and 1999. Payments
on the judgment are to be made from available cash flow and before any
distribution can be made to the Partnership's limited partners. The
balance of the note at December 31, 1999 is $78,831.
NOTE H - EXTRAORDINARY GAIN
During 1999, the Partnership sold three condominium units at the
Smythe Stores condominium complex. In connection with those sales,
$939,333 of debt was extinguished. The extraordinary gain represents
the excess of the debt extinguished over the fair market value of the
units.
NOTE I - INCOME TAX BASIS RECONCILIATION
Certain items enter into the determination of the results of
operations in different time periods for financial reporting ("book")
purposes and for income tax ("tax") purposes. Reconciliations of net
loss and partners' equity follow:
For the Years Ended December 31,
1999 1998 1997
------ ------ ------
Net income (loss) book $ 396,475 ($ 736,581) ($ 810,675)
Excess of book over tax depreciation 19,626 8,169 11,092
Difference between book and tax
basis of units sold 105,234 0 0
---------- ----------- ----------
Net income (loss) - tax $ 521,335 ($ 728,412) ($ 799,583)
========== ========== ==========
Partners' equity - book ($5,038,081) ($5,434,556) ($4,697,975)
Costs of issuance 1,393,762 1,393,762 1,393,762
Cumulative tax under book loss (593,451) (718,311) (726,480)
---------- ---------- ----------
Partners' equity - tax ($4,237,770) ($4,759,105) ($4,030,693)
========== ========== ==========
<PAGE>
SUPPLEMENTAL INFORMATION
<PAGE>
DIVERSIFIED HISTORIC INVESTORS
(a limited partnership)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
Cost
Capitalized
Initial Cost to Partnership (b) Subsequent to
Acquisition
Buildings
and Date of Date
Description (a) Encumbrances Land Improvements Improvements Constr. Acquired
(g)
6 condominium
apartment
units in ($106,626)(h)
Philadelphia,PA $1,335,267 $16,833 $1,944,427 14,569 1984 11/9/84
17 apartment
units
and 1,000
square feet
ofcommercial
space
Philadelphia,PA 1,355,751 120,000 1,744,097 55,126 1984 11/14/84
18 apartment
units and
5,188 square
feet of
commercial (h)
space in (45,079) 1984-
Philadelphia,PA 1,895,058 174,000 2,188,961 56,184 1985 12/14/84
---------- -------- ---------- -------
TOTAL $4,586,076 $310,833 $5,877,485 ($25,826)
========== ======== ========== =======
Gross Amount at which Carried
at December 31, 1999
Buildings
and Accumulated
Description Land Improvements Total (c) (e) Depreciation
(e) (f)
6
condominium
apartment
units in
Philadelphia,PA $ 11,223 $1,241,313 $1,252,536 $764,669
17 apartment
units
and 1,000
square feet
of
commercial
space
Philadelphia,PA 120,000 1,799,223 1,919,223 1,079,871
18 apartment
units
and 5,188
square feet
of
commercial
space
in
Philadelphia,PA 174,000 2,200,066 2,374,066 1,314,436
-------- ---------- ---------- ----------
TOTAL $305,223 $5,240,602 $5,545,825 $3,158,976
======== ========== ========== ==========
<PAGE>
DIVERSIFIED HISTORIC INVESTORS
(a limited partnership)
NOTES TO SCHEDULE XI
December 31, 1999
(A) All properties are certified historic structures as defined in
the Internal Revenue Code, or are eligible for designation as
such. The "date of construction" refers to the period in which
such properties were rehabilitated.
(B) Includes development/rehabilitation costs incurred pursuant to
development agreements entered into when the properties were
acquired.
(C) The aggregate cost of real estate owned at December 31, 1999, for
Federal income tax purposes is approximately $5,272,440.
However, the depreciable basis of buildings and improvements is
reduced for Federal income tax purposes by the investment tax
credit and the historic rehabilitation credit obtained.
(D) Development /rehabilitation was completed during 1986.
(E) Reconciliation of real estate:
1999 1998 1997
------ ------ ------
Balance at beginning of year $6,171,259 $6,160,210 $6,145,623
Additions during the year:
Improvements 502 11,049 14,587
---------- ---------- ----------
6,171,761 6,171,259 6,160,210
Deductions during the year:
Retirements (625,936) 0 0
---------- ---------- ----------
Balance at end of year $5,545,825 $6,171,259 $6,160,210
========== ========== ==========
Reconciliation of accumulated depreciation:
1999 1998 1997
------ ------ ------
Balance at beginning of year $3,290,172 $3,056,549 $2,822,893
Depreciation expense for the year 234,999 233,623 233,656
Retirements (366,195) 0 0
---------- ---------- ----------
Balance at end of year $3,158,976 $3,290,172 $3,056,549
========== ========== ==========
(F) See Note B to the financial statements for depreciation method
and lives.
(G) See Note F to the financial statements for further information.
(H) In connection with the purchase of certain of the properties, the
sellers agreed to reimburse the Partnership for cash flow
deficits, as defined, of these properties. Such reimbursements
were treated as a reduction of amounts allocated to the buildings
and improvements account.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
a. Identification of Directors - Registrant has no
directors.
b. Identification of Executive Officers
The General Partner of the Registrant is Diversified
Historic Advisors (DHA), a Pennsylvania general partnership. The
partners of DHA are as follows:
Name Age Position Term of Office Period Served
SWDHA, Inc. -- Partner in DHA No fixed term Since May 1997
EPK, Inc. -- Partner in DHA No fixed term Since May 1997
For further description of DHA, see paragraph e. of this
Item. There is no arrangement or understanding between either person
named above and any other person pursuant to which any person was or
is to be selected as an officer.
c. Identification of Certain Significant Employees.
Registrant has no employees. Its administrative and operational
functions are carried out by a separate property management and
partnership administration firm engaged by the Registrant.
d. Family Relationships. None.
e. Business Experience. DHA is a general partnership formed
in March 1984. The General Partner is responsible for the management
and control of the Registrant's affairs and has general responsibility
and authority in conducting its operations.
On May 13, 1997, SWDHA, Inc. replaced Gerald Katzoff and EPK,
Inc. replaced Diversified Historic Properties, Inc. ("DHP") as
partners of DHA. Spencer Wertheimer, the President of SWDHA, Inc., is
an attorney with extensive experience in real estate activities
ventures.
EPK, Inc. is a Delaware corporation formed for the purpose of
managing properties or interests therein. EPK, Inc. is a wholly-owned
subsidiary of D, LTD, an entity formed in 1985 to act as the holding
company for various corporations engaged in the development and
management of historically certified properties and conventional real
estate as well as a provider of financial (non-banking) services.
The officers and directors of EPK, Inc. are described below.
Spencer Wertheimer was appointed on May 13, 1997 as
President, Treasurer and Sole Director of EPK, Inc. Mr. Wertheimer is
an attorney with extensive experience in real estate activities
ventures.
Donna M. Zanghi (age 42) was appointed on May 13, 1997 as
Vice President and Secretary of EPK, Inc. Ms. Zanghi previously
served as Secretary and Treasurer of DHP since June 14, 1993 and as a
Director and Secretary/Treasurer of D, LTD. She was associated with
DHP and its affiliates since 1984 except for the period from December
1986 to June 1989 and the period from November 1, 1992 to June 14,
1993.
Michele F. Rudoi (age 34) was appointed on May 13, 1997 as
Assistant Secretary of EPK, Inc. Ms. Rudoi previously served as
Assistant Secretary and Director of both D, LTD and DHP since January
27, 1993.
Item 11. Executive Compensation
a. Cash Compensation - During 1999, Registrant has paid no
cash compensation to DHA, any partner therein or any person named in
paragraph c. of Item 10.
b. Compensation Pursuant to Plans - Registrant has no plan
pursuant to which compensation was paid or distributed during 1999, or
is proposed to be paid or distributed in the future, to DHA, any
partner therein, or any person named in paragraph c. of Item 10 of
this report.
c. Other Compensation - No compensation not referred to in
paragraph a. or paragraph b. of this Item was paid or distributed
during 1999 to DHA, any partner therein, or any person named in
paragraph c. of Item 10.
d. Compensation of Directors - Registrant has no directors.
e. Termination of Employment and Change of Control
Arrangement - Registrant has no compensatory plan or arrangement, with
respect to any individual, which results or will result from the
resignation or retirement of any individual, or any termination of
such individual's employment with Registrant or from a change in
control of Registrant or a change in such individual's
responsibilities following such a change in control.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
a. Security Ownership of Certain Beneficial Owners - No
person is known to Registrant to be the beneficial owner of more than
five percent of the issued and outstanding Units.
b. Security Ownership of Management - No equity securities
of Registrant are beneficially owned by any person named in paragraph
c. of Item 10.
c. Changes in Control - Registrant does not know of any
arrangement, the operation of which may at a subsequent date result in
a change in control of Registrant.
Item 13. Certain Relationships and Related Transactions
Pursuant to Registrant's Amended and Restated Agreement of
Limited Partnership, DHA is entitled to 10% of Registrant's
distributable cash from operations in each year. There was no such
share allocable to DHA for fiscal years 1997 through 1999.
a. Certain Business Relationships - Registrant has no
directors.
b. Indebtedness of Management - No executive officer or
significant employee of Registrant, Registrant's general partner (or
any employee thereof), or any affiliate of any such person, is or has
at any time been indebted to Registrant.
PART IV
Item 14. (A) Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
1. Financial Statements:
a. Consolidated Balance Sheets at December 31, 1999 and 1998.
b. Consolidated Statements of Operations for the Years
Ended December 31, 1999, 1998 and 1997.
c. Consolidated Statements of Changes in Partners' Equity for the
Years Ended December 31, 1999, 1998 and 1997.
d. Consolidated Statements of Cash Flows for the Years Ended
December 31, 1999, 1998 and 1997.
e. Notes to consolidated financial statements.
2. Financial statement schedules:
a. Schedule XI- Real Estate and Accumulated Depreciation.
b. Notes to Schedule XI.
3. Exhibits:
(a) Exhibit Number Document
3 Registrant's Amended and
Restated Certificate of
Limited Partnership and
Agreement of Limited
Partnership, previously
filed as part of Amendment
No. 2 of Registrant's
Registration Statement on
Form S-11, are
incorporated herein by
reference.
21 Subsidiaries of the
Registrant are listed in
Item 2. Properties of this
Form 10-K.
(b) Reports on Form 8-K:
No reports were filed on Form 8-K during the
quarter ended December 31, 1999.
(c) Exhibits:
See Item 14(A)(3) above.
<PAGE>
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) 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.
DIVERSIFIED HISTORIC INVESTORS
Date: August 22, 2000 By: Diversified Historic Advisors, General Partner
---------------
By: EPK, Inc., Partner
By: /s/ Spencer Wertheimer
-----------------------
SPENCER WERTHEIMER
President and Treasurer
By: /s/ Michele F. Rudoi
-----------------------
MICHELE F. RUDOI,
Assistant Secretary
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
Signature Capacity Date
DIVERSIFIED HISTORIC ADVISORS General Partner
By: EPK, Inc., Partner
By:/s/ Spencer Wertheimer August 22, 2000
---------------------- ---------------
SPENCER WERTHEIMER
President and Treasurer
By:/s/ Michele F. Rudoi August 22, 2000
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MICHELE F. RUDOI,
Assistant Secretary
