FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended September 30, 1997
Commission File Number: 2-94509
LIF
(Exact name of registrant as specified in its governing instruments)
California 94-2969720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P. O. Box 130, Carbondale, Colorado 81623
(Address of principal executive offices)
(970) 963-8007
(Registrant's telephone number, including area code)
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.
Yes [ X ] No [ ]
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LIF
CONSOLIDATED BALANCE SHEETS, SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(Unaudited) (In thousands)
<CAPTION>
September 30, December 31,
1997 1996
<S> <C> <C>
ASSETS
INVESTMENTS IN REAL ESTATE:
Rental properties $ 10,431 $ 11,598
Accumulated depreciation (2,520) (2,282)
Rental properties - net 7,911 9,316
CASH AND CASH EQUIVALENTS (including interest
bearing deposits of $461 in 1997 and $282 in 1996) 471 388
OTHER ASSETS:
Accounts receivable 846 9
Prepaid expenses and deposits 122 29
Deferred organization costs and loan costs
(net of accumulated amortization of $179
in 1997 and $174 in 1996) 101 122
Total other assets 1,069 160
TOTAL $ 9,451 $ 9,864
LIABILITIES AND PARTNERS' EQUITY LIABILITIES:
Notes payable $ 6,662 $ 7,960
Accounts payable 884 29
Other liabilities 248 194
Total liabilities 7,794 8,183
Minority interest 0 75
PARTNERS' EQUITY 1,658 1,606
TOTAL $ 9,451 $ 9,864
See Financial Notes.
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LIF
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In thousands except per unit amounts)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1997 1996 1997 1996
<S> <C> <C> <C> <C>
REVENUE:
Rental $ 421 $ 393 $1,297 $1,141
Interest 49 6 50 27
Total revenue 470 399 1,347 1,168
EXPENSE:
Interest 164 160 527 481
Operating 169 156 507 446
Depreciation and amortization 90 82 260 268
General and administrative 34 39 150 167
Total expense 457 437 1,444 1,363
NET INCOME/(LOSS)
BEFORE SALE OF REAL PROPERTY $ 13 $ (38) $ (97) $ (195)
GAIN (LOSS) SALE OF REAL PROPERTY 563 0 563 40
NET INCOME (LOSS) 576 (38) 467 (155)
NET INCOME (LOSS) PER
PARTNERSHIP UNIT:
Limited Partners 45 (3) 36 (12)
General Partners 0 0 0 0
45 (3) 36 (12)
See Financial Notes.
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LIF
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND
THE YEAR ENDED DECEMBER 31, 1996
(Unaudited) (Dollars in thousands)
<CAPTION>
LIMITED PARTNERS
NUMBER OF GENERAL TOTAL
PARTNERSHIP PARTNER PARTNERS'
UNITS AMOUNT AMOUNT DEFICIT
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1996 12,820 $ 2,087 $ (158) $ 1,929
Net loss - 1996 (136) 0 (136)
Distributions - 1996 (192) (22) (214)
Contributions - 1996 0 27 27
BALANCE, DECEMBER 31, 1996 12,820 1,759 (153) 1,606
Net income 476 0 476
Adjustment - property sale (424) 0 (424)
BALANCE, SEPTEMBER 30, 1997 12,820 $ 1,811 $ (153) $ 1,658
See Financial Notes.
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LIF
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited) (In thousands)
<CAPTION>
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (97) $ (194)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 238 268
Change in operating assets and liabilities:
Increase in accounts receivable (837) (9)
Increase in prepaid expenses (93) (104)
Decrease in deferred expenses 21 20
Decrease in accounts payable (1) (21)
Increase in other liabilities 835 64
Net cash provided by operating activities 66 24
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in notes receivable 0 (54)
Capital expenditures (470) (914)
Sale of investment property 790 233
Net investor distributions 0 (6)
Partner's Contributions 0 3
Net cash used in investing activities 320 (738)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from financing 48 990
Payment on notes payable (350) (670)
Net cash provided (used) by financing activities (302) 320
Increase (decrease) in cash and cash equivalents 84 (394)
Cash and cash equivalents at beginning of period 387 655
Cash and cash equivalents at end of period $ 471 $ 262
See Financial Notes.
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LIF
FINANCIAL NOTES
(Dollars in thousands)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited financial statements should be read in conjunction
with the Partnership's 1996 Annual Report. These statements have been
prepared in accordance with the instructions to the Securities and Exchange
Commission Form 10-Q and do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements.
In the opinion of the general partner, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. The results of operations for the nine months ended September 30,
1997 and 1996, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997.
For purposes of the statement of cash flows, the Partnership considers all
highly liquid investments with a maturity of three months or less at the time
of purchase to be cash equivalent. The Partnership paid interest of $527 and
$481 for the nine months ended September 30, 1997 and 1996, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INTRODUCTION
LIF (the "Partnership") is a California limited partnership. Operations
commenced in November 1985.
The Partnership currently has an investment in Landsing Private Fund-21 ("LPF-
21") which owns one multi-family rental property; Cattle Creek Development
Partners ("CCDP"), which owns two retail rental properties; and Alpine Center
("ACP"), which owns one retail building currently under redevelopment. For
financial reporting purposes, the Partnership's investments are presented on a
consolidated basis.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1997, the Partnership's consolidated cash balance totaled
$471,000. Cash not required for current operations is placed in federally
insured financial instruments and money market funds which can be liquidated
as needed. It is the Partnership's intention to maintain adequate cash
reserves for its operations.
During the first nine months of 1997, the Partnership experienced a net
increase in cash of $84,000. As of September 30, 1997, cash totaled $471,000
versus a balance of $388,000 at December 31, 1996. Primary uses of cash
included capital expenditures of $470,000 and principal payments on notes
payable of $350,000, and net loss from operations of $97,000. Sources of cash
included proceeds from financing of $48,000 and sale of investment property of
$790,000. The General Partner expects Partnership operations to remain stable
for the remainder of the year.
RESULTS OF OPERATIONS
The Results of Operations for 1997 are not comparable to 1996. The different
number of properties operated cause comparisons of overall operations to be
misleading. It is meaningful, however, to compare the operations of the
properties operated continuously during the first nine months of 1997 and
1996.
The following represents the operations of the Partnership's properties held
continuously during the first nine months of 1997 and 1996:
<CAPTION>
1997 1996 % Change
<S> <C> <C> <C>
Rental Revenue $1,232 $1,106 + 12%
Operating Expense 469 439 + 7%
Net Operating Income 763 667 + 15%
Interest Expense $ 419 $ 438 - 5%
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Overall revenues increased 12% for the nine months ended September 30, 1997
relative to the same period in 1996. This increase was due to lower vacancies
at the Valley View Business Center and of the Whistler Point Apartments.
Property operating expenses increased 7% for the nine months ended September
30, 1997 relative to the same period in 1996. Interest expense decreased 5%
for 1997 compared to 1996.
OCCUPANCY
As of September 30, 1997 the Whistler Point Luxury Apartments were 95% leased.
Occupancy is expected to remain stable to slightly lower due to the increased
competition in the Boise, Idaho market.
As of September 30, 1997, Cattle Creek Development Partners' commercial
properties of Valley View Business Park and 701 Cooper Avenue Building were
87% and 100% leased, respectively.
The Alpine Center retail building is currently 67% leased up.
PROPERTY SALE
On September 26, 1997, the Partnership's investment in Alpine Center Partners
("ACP") sold 2 separate parts of it's commercial building, the Alpine Center.
A 45.90% interest in the Alpine Center building was sold to Open World
Investors, Ltd. for $1,388,900. ACP provided seller financing in the amount
of $963,900. Net cash, after closing costs, amounted to $421,000 to ACP. ACP
also sold a 40.20% interest in the Alpine Center building to Gary and Norma
Barr for $1,219,200 and provided seller financing in the amount of $844,200.
Net cash to ACP, after closing costs, amounted to $369,000.
Gary Barr is a related party to the registrant. He is the President of the
Managing Partner of the General Partner to LIF. Mr. Barr is also the
President of the General Partner to Open World Investors, Ltd.
ACP continues to hold a 1.96% tenant-in-common ownership interest in the
Alpine Center building along with three other tenants-in-common.
The cash proceeds from these sales were used by ACP to paydown debt, including
the short-term loan from LIF to ACP.
For book purposes in 1997, ACP incurred a gain from sales of property in the
amount of $563,069. For tax purposes, the sale will result in minimal gain or
loss as it will be accounted for as an Installment Sale for the portions
allocable to Phase I and Phase II. Phase II of the Alpine Center building
will be completed in mid- to late 1998.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) None
(b) The Partnership filed no reports on Form 8-K during the
quarter ended September 30, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LIF
Date: November 21, 1997 /s/ Gary K. Barr
Gary K. Barr, President
The Landsing Corporation, Sole Shareholder
of Landsing Equities Corporation
Managing Partner of the General Partner,
Partners '85
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 471
<SECURITIES> 0
<RECEIVABLES> 846
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 223
<PP&E> 10431
<DEPRECIATION> 2520
<TOTAL-ASSETS> 9451
<CURRENT-LIABILITIES> 884
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1658
<TOTAL-LIABILITY-AND-EQUITY> 9451
<SALES> 0
<TOTAL-REVENUES> 1347
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 917
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 527
<INCOME-PRETAX> 0
<INCOME-TAX> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 467
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
