SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549-1004
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended - September 30, 1996
Commission File Number - 0-16415
CUMBERLAND HEALTHCARE, L.P. I-A
(Exact name of Registrant as specified in its Charter)
Delaware
(State or other jurisdiction of incorporation or organization)
59-2660778
(I.R.S. Employer Identification No.)
880 Carillon Parkway, St. Petersburg, Florida 33716
(Address of principal executive offices)
(813) 573-3800
Registrant's telephone number
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 and Exchange Act
of 1934 during the preceding 12 months (or 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
Title of Each Class Number of Units at
Units of Limited Partnership September 30, 1996
Interest: $1,000 per unit 30,000
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II, 1995 Form 10-K, filed with the
Securities and Exchange Commission on April 12, 1996,
Parts III and IV - Form S-11 Registration Statement
and all amendments and supplements thereto
File No. 33-4301
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
1996 1995
ASSETS (Audited)
Cash and Cash Equivalents $ 5,944,073 $ 1,626,628
Restricted Cash 34,513 59,272
Accounts Receivable (Net of Allowance of
$101,095 and $73,373) 1,090,173 705,511
Notes Receivable 1,000,000 0
Prepaid Expenses 115,974 74,681
Deferred Debt Costs (Net of Accumulated
Amortization of $51,179 and $42,336) 22,464 71,094
Intangible Assets (Net of Accumulated
Amortization of $41,606 and $33,285) 402,192 410,513
Investment Properties, at Cost (Net of
Accumulated Depreciation and Amortization
of $2,370,511 and $11,235,282) 5,035,486 19,159,419
Construction in Progress 0 74,324
Total Assets $ 13,644,875 $ 22,181,442
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accounts Payable $ 768,137 $ 955,713
Accrued Payroll 236,922 236,217
Interest Payable 0 34,646
Payable to Related Parties
- General Partner 2,524 11,054
- Affiliates 330,029 346,399
Mortgage Note Payable 1,264,419 7,946,917
Minority Interest 711,094 675,458
Total Liabilities 3,313,125 10,206,404
Partners' Equity:
Limited Partners (30,000 units outstanding
at September 30, 1996 and December 31, 1995) 10,403,615 12,261,618
General Partner (71,865) (286,580)
Total Partners' Equity 10,331,750 11,975,038
Total Liabilities and Partners' Equity $ 13,644,875 $ 22,181,442
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED
September 30, September 30,
1996 1995
Revenues:
Net Resident Service Revenues $ 5,726,182 $ 4,089,700
Rental Income 1,430,203 2,482,321
Interest Income 196,892 47,839
Total Revenues 7,353,277 6,619,860
Expenses:
Resident Service Expenses 5,020,123 3,555,560
Interest Expense - Affiliate 0 637
- Other 418,382 534,143
Rent Expense 125,393 225,212
Property Management Fees - General Partner 17,391 30,726
General and Administrative - Affiliates 13,049 20,095
- Other 120,697 118,735
Depreciation and Amortization 438,195 557,097
Total Expenses 6,153,230 5,042,205
Operating Income $ 1,200,047 $ 1,577,655
Minority Interest in Net (Income) Loss
of Consolidated Subsidiary (96,205) (44,033)
Income Before Extraordinary Items $ 1,103,842 $ 1,533,622
Extraordinary Items
Lease Termination Settlement 1,293,464 0
Gain on Sale of Assets 9,941,447 0
Net Income $ 12,338,753 $ 1,533,622
Allocation of Net Income
Limited Partners $ 12,091,978 $ 1,502,950
General Partner 246,775 30,672
Total Income $ 12,338,753 $ 1,533,622
Net Income Per $1,000 Limited Partnership Unit
Income Before Extraordinary Item $ 36.06 $ 50.10
Extraordinary Items 367.01 0
Net Income $ 403.07 $ 50.10
Number of Limited Partnership Units 30,000 30,000
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
September 30, September 30,
1996 1995
Revenues:
Net Resident Service Revenues $ 2,062,075 $ 1,288,563
Rental Income 143,321 855,851
Interest Income 60,827 19,908
Total Revenues 2,266,223 2,164,322
Expenses:
Resident Service Expenses 1,801,203 1,183,603
Interest Expense - Other 85,449 176,179
Rent Expense 0 75,070
Property Management Fees - General Partner 1,342 10,614
General and Administrative - Affiliates (5,405) 5,977
- Other 27,191 57,076
Depreciation and Amortization 107,493 185,785
Total Expenses 2,017,273 1,694,304
Operating Income $ 248,950 $ 470,018
Minority Interest in Net (Income) Loss
of Consolidated Subsidiary (37,243) (2,558)
Income Before Extraordinary Item $ 211,707 $ 467,460
Extraordinary Item
Gain on Sale of Assets 3,268,608 0
Net Income $ 3,480,315 $ 467,460
Allocation of Net Income
Limited Partners $ 3,410,709 $ 458,111
General Partner 69,606 9,349
Total Income $ 3,480,315 $ 467,460
Net Income Per $1,000 Limited Partnership Unit
Income Before Extraordinary Item $ 6.92 $ 15.27
Extraordinary Item 106.77 0
Net Income $ 113.69 $ 15.27
Number of Limited Partnership Units 30,000 30,000
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
September 30, September 30,
1996 1995
Cash Flows from Operating Activities:
Net Income $12,338,753 $ 1,533,622
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 438,195 557,097
Gain on Sale of Assets (9,941,447) 0
Minority Interest in Net Income (Loss)
of Consolidated Subsidiary 96,205 44,033
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Accounts Receivable (384,662) 294,288
(Increase) Decrease in Prepaid Expenses (41,293) (39,675)
(Increase) Decrease in Restricted Cash 24,759 (8,091)
Increase (Decrease) in Payable to Related
Parties (24,900) 4,613
Increase (Decrease) in Payables
and Accruals (221,517) 51,140
Net Cash Provided by Operating
Activities 2,284,093 2,437,027
Cash Flows from Investing Activities:
(Additions) to Investment Properties (100,201) (39,435)
(Additions) to Construction in Progress 0 (32,754)
Sale of Investment Properties 21,598,942 0
Net Cash Provided by (Used in)
Investing Activities 21,498,741 (72,189)
Cash Flows from Financing Activities:
Payments of Notes Payable (5,422,779) (759,356)
(Increase) Decrease in Deferred Debt Cost 0 12,246
Distribution to Partners:
Limited Partners (13,950,000) (1,500,000)
General Partner (32,060) (30,612)
Minority Interest (60,550) 0
Net Cash Provided by (Used in)
Financing Activities (19,465,389) (2,277,722)
Increase(Decrease)in Cash and Cash Equivalents 4,317,445 87,116
Cash and Cash Equivalents at Beginning of Period 1,626,628 1,202,175
Cash and Cash Equivalents at End of Period $ 5,944,073 $ 1,289,291
Supplemental Disclosure of Cash Flow Information:
Interest Paid $ 453,028 $ 540,124
Non-cash Items:
Sale of Investment Properties
Notes Receivable $ 1,000,000 $ 0
Assumed Mortgage 1,259,719 0
Miscellaneous Settlements (208,661) 0
Deferred Debt Cost Amortization 39,787 0
Total $ 2,090,845 $ 0
The accompanying notes are an integral part of these financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of Preparation
The unaudited financial statements presented herein have been prepared
in accordance with the instructions to Form 10-Q and do not include all of the
information and note disclosures required by generally accepted accounting
principles. These statements should be read in conjunction with the financial
statements and notes thereto included in the Partnership's Form 10-K for the
year ended December 31, 1995. In the opinion of management, these financial
statements include all adjustments, consisting only of normal recurring
adjustments, necessary to summarize fairly the Partnership's financial
position and results of operations. The results of operations for the period
may not be indicative of results to be expected for the year.
Reclassification
Certain items in the 1995 financial statements have been reclassified
for comparative purposes to conform with the financial statement presentation
used in the 1996 statements.
Consolidation
The accompanying consolidated financial statements include the accounts
of the company and all of its subsidiaries. Intercompany transactions and
balances have been eliminated. Minority interest is accounted for by using
the equity method.
NOTE 2 - COMPENSATION, REIMBURSEMENTS, AND ACCRUALS FOR
GENERAL PARTNERS AND AFFILIATES:
The General Partner and affiliates are entitled to the following types
of compensation and reimbursement for costs and expenses incurred for the
Partnership for the nine months ended September 30, 1996. General and
Administrative costs and fees are net of the $166,296 allocation made to
resident service expenses for costs directly related to the nursing homes.
Property Management Fees $ 17,391
General and Administrative Costs and Fees $ 13,049
Cash Distributions $ 32,060
NOTE 3 - INVESTMENT PROPERTIES
As of September 30, 1996 the Partnership owned, directly or through
limited partnership investments, an interest in three nursing home properties.
A summary of the Partnership's investment properties is as follows:
Operated
Land $ 1,534,105
Buildings 4,550,469
Furniture and Fixtures 1,321,423
Investment Properties, at Cost 7,405,997
Less: Accumulated Depreciation
and Amortization (2,370,511)
Net Book Value $ 5,035,486
The Partnership, directly or through a manager, operates three skilled
nursing facilities. Paramount Chateau, a 99-bed facility located in
California, for the nine months ended September 30, 1996, had an average
occupancy rate of 85% that was comprised of 8% private, 10% Medicare, 81%
Medicaid and 1% HMO. The average reimbursement rates were $96, $254, $73 and
$83 per day for private, Medicare, Medicaid, and HMO, respectively. The
average monthly revenue was $252,225. Pacific Palms, a 99-bed facility
located in California, for the nine months ended September 30, 1996 had an
average occupancy rate of 34% that was comprised of 10% private, 8% Medicare,
60% Medicaid and 22% HMO. The average reimbursement rates were $102, $214,
$73 and $201 per day for private, Medicare, Medicaid and HMO, respectively.
The average monthly revenue was $132,279. Olympic Healthcare, a 60-bed
skilled nursing facility with a 24-bed assisted living wing located in Sequim,
Washington, for the nine months ended September 30, 1996, had an average
occupancy in the skilled nursing facility of 95% that was comprised of 36%
private, 11% Medicare and 53% Medicaid. The average reimbursement rates in
the skilled nursing facility were $99, $210 and $96 per day for private,
Medicare and Medicaid, respectively. The average monthly revenue was
$197,642. The 24-bed assisted living wing maintained an average occupancy of
77% that was comprised of 33% private and 67% Medicaid. The average
reimbursement rates were $61 and $54 per day for private and Medicaid,
respectively. The average monthly revenue was $31,613.
NOTE 4 - EXTRAORDINARY ITEM
On October 25, 1995, a Lease Termination Agreement was signed by
Cumberland Healthcare and FHP, Inc. relating to FHP-Norwalk (f/k/a Rancho Los
Padres) whereby Cumberland would receive an early lease termination payment. A
Management Agreement was also signed whereby Cumberland would become the
interim operator of the facility. Pursuant to the Lease Termination
Agreement, $1,566,174 was placed in escrow, and payment was contingent upon
Cumberland obtaining the appropriate license to operate and maintain the FHP-
Norwalk facility. In January 1996, the state of California - Department of
Health Services issued a license to Cumberland Healthcare to operate and
maintain Pacific Palms Skilled Nursing (f/k/a FHP-Norwalk, f/k/a Rancho Los
Padres). After various prorations, working capital advances and interest
earned, the net distribution from the escrow account to Cumberland was
$1,534,334 which is recorded as lease termination settlement, interest income
and deferred revenue in the period ending March 31, 1996.
Cumberland Healthcare, L.P. I-A ("Cumberland") and Life Care Centers of
America, Inc. ("LCCA"), effective August 4, 1995, entered into a Purchase and
Sale Agreement pursuant to which LCCA agreed to acquire seven nursing homes
from Cumberland for an aggregate purchase price of $17,900,000, subject to
certain prorations and adjustments. Cumberland owns six of these homes and
leases the seventh from an independent owner. The purchase price paid by LCCA
was as follows:
(a) LCCA assumed the indebtedness secured by a mortgage on the Rimrock
Facility of $1,259,719;
(b) LCCA delivered a purchase money note in the amount of $1,000,000
guaranteed by its principal shareholder to the Partnership ("the LCCA Note").
The LCCA Note matures on the fifth anniversary of its issuance date of May 29,
1996 but may be accelerated at the option of the Partnership at the end of two
years. A portion of the accrued interest is payable monthly and the balance
is due on the maturity of the LCCA Note. However, if the Partnership
exercises its right to call the Note after two years, the accrued interest
which would otherwise be due at maturity will be canceled;
(c) Funds were wired in the amount of $1,829,930 to payoff the existing
loan on the Sun City facility; and
(d) The balance of the purchase price was paid in cash at closing by
federal funds wire transfer to the Partnership of $13,803,952.
Closing of the LCCA transaction was contingent upon approval of the plan
by a majority interest of the Limited Partners which was obtained on May 8,
1996. The sale resulted in a gain of $6,672,839.
Cumberland Healthcare, L.P. I-C ("Cumberland, I-C") and Arbor Health
Care Company ("Arbor") entered into a purchase and sale agreement effective
September 19, 1996, pursuant to which Arbor agreed to purchase a nursing home
currently leased to Arbor by Cumberland, I-C. The purchase price was
$5,750,000 subject to certain prorations and adjustments. Sales proceeds of
$2,121,254 were wired to the property's mortgagor, The Provident Bank, in full
payment of the mortgage. The balance of $3,618,662, net of closing costs, was
wired to Cumberland, I-C. This sale resulted in recognition of a gain to the
Partnership of $3,268,608.
After the May 29, 1996 sale to LCCA and the September 19, 1996 sale to
Arbor,the Partnership has two 99-bed skilled nursing facilities in southern
California and a 50% interest in a 60-bed skilled nursing facility in
Washington which also has a 24-bed assisted living wing.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net resident service revenues increased by $1,636,482 (40.0%) for the
nine months ended September 30, 1996, as compared to the same period in 1995.
This increase is primarily due to the conversion of Pacific Palms (f/k/a FHP-
Norwalk, f/k/a Rancho Los Padres) from a leased facility (FHP-Norwalk) to an
operated facility effective January 1, 1996, resulting in nine months of
resident services revenue in the first nine months of 1996, while there was
none for the same period in 1995. Resident services expenses increased
$1,464,563 (41.2%) for the nine months ended September 30, 1996, as compared
to the same period in 1995. This increase is due to an increase in nursing
expenses from the use of additional ancillary services needed to accommodate
the higher resident acuity level and the conversion of Pacific Palms (f/k/a
FHP - Norwalk, f/k/a Rancho Los Padres) from a leased facility (FHP-Norwalk)
to an operated facility effective January 1, 1996, resulting in nine months of
resident services expense in the first nine months of 1996, while there was
none for the same period in 1995.
Rental income decreased by $1,052,118 (42.4%) for the nine months ended
September 30, 1996, as compared to the same period in 1995. This decrease is
due to the conversion of Pacific Palms (f/k/a FHP-Norwalk, f/k/a Rancho Los
Padres) from a leased facility (FHP-Norwalk) to an operated facility,
effective January 1, 1996, the sale of seven nursing homes to LCCA which
closed on May 29, 1996, and the sale of one nursing home to Arbor on September
19, 1996.
Interest income increased by $149,053 (311.6%) for the nine months ended
September 30, 1996, as compared to the same period in 1995. This increase is
due to increased cash balances in interest bearing accounts. These increased
balances are from the proceeds of the lease termination and the sale of the
seven nursing homes.
Interest expense decreased by $116,398 (21.7%) for the nine months ended
September 30, 1996, as compared to the same period in 1995. This decrease
resulted from a reduction of the average level of debt. The debt decreased
due to the retirement or assumption of debt of $3,074,027 with the sale of
seven nursing homes to LCCA and $2,110,513 with the sale of one nursing home
to Arbor.
General and Administrative - Affiliates decreased by $7,046 (35.1%) for
the nine months ended September 30, 1996, compared to the same period in 1995,
due to an increase in the percentage of travel and overhead of affiliates
directly related to and allocated to resident service expenses while total
General and Administrative remained stable.
Depreciation and Amortization expense decreased by $118,902 for the nine
months ended September 30, 1996, as compared to the same period in 1995. This
decrease was primarily due to the net effect of increased depreciation from
the new laundry facility placed in service at Paramount Chateau in January
1996 and decreased depreciation from the seven nursing homes sold to LCCA in
May 1996.
Cumberland Healthcare, L.P. I-A ("Cumberland") and Life Care Centers of
America, Inc. ("LCCA"), effective August 4, 1995, entered into a Purchase and
Sale Agreement pursuant to which LCCA agreed to acquire seven nursing homes
from Cumberland for an aggregate purchase price of $17,900,000, subject to
certain prorations and adjustments. Cumberland owns six of these homes and
leases the seventh from an independent owner. Closing of the LCCA
transaction was contingent upon approval of the plan by a majority interest of
the Limited Partners which was obtained on May 8, 1996. The sale resulted in a
gain of $6,672,839 for the nine months ended September 30, 1996.
Cumberland Healthcare, L.P. I-C ("Cumberland, I-C") and Arbor Health
Care Company ("Arbor") entered into a purchase and sale agreement effective
September 19, 1996, pursuant to which Arbor agreed to purchase a nursing home
for $5,750,000. This sale resulted in recognition of a gain of $3,268,608 for
the three months and nine months ending September 30, 1996.
On October 25, 1995, a Lease Termination Agreement was signed by
Cumberland and FHP, Inc. relating to FHP-Norwalk f/k/a Rancho Los Padres (Note
4) whereby Cumberland would receive an early lease termination payment. A
Management Agreement was also signed whereby Cumberland would become the
interim operator of the facility. Pursuant to the Lease Terminaiton
Agreement, $1,566,174 was placed in escrow, and payment was contingent upon
Cumberland obtaining the appropriate license to operate and maintain the FHP-
Norwalk facility. In January 1996, the state of California - Department of
Health Services issued a license to Cumberland Healthcare to operate and
maintian Pacific Palms Skilled Nursing f/k/a FHP-Norwalk f/k/a Rancho Los
Padres. This resulted in the recognition of revenue of $1,293,464 for lease
termination settlement for the nine months ended September 30, 1996.
Net resident service revenues increased by $773,512 (60.0%) for the
three months ended September 30, 1996, as compared to the same period in 1995.
This increase is primarily due to the conversion of Pacific Palms (f/k/a FHP-
Norwalk, f/k/a Rancho Los Padres) from a leased facility (FHP-Norwalk) to an
operated facility effective January 1, 1996 resulting in three months of
resident services revenues in 1996 compared to none in the same period in
1995. Resident services expenses increased $617,600 (52.2%) for the three
months ended September 30, 1996, as compared to the same period in 1995. This
increase is due to an increase in nursing expenses from the use of additional
ancillary services needed to accommodate the higher resident acuity level and
the conversion of Pacific Palms (f/k/a FHP, Norwalk, f/k/a Rancho Los Padres)
from a leased facility (FHP-Norwalk) to an operated facility effective January
1, 1996 resulting in three months of resident services expense in 1996
compared to none in the same period in 1995.
Rental income decreased by $712,530 (83.3%) for the three months ended
September 30, 1996, as compared to the same period in 1995. This decrease is
due to the conversion of Pacific Palms (f/k/a FHP-Norwalk, f/k/a Rancho Los
Padres) from a leased facility (FHP-Norwalk) to an operated facility effective
January 1, 1996 therefore there was three months of lease income in 1995 while
there was none for the same period in 1996. Also, the sale of seven nursing
homes to LCCA on May 29, 1996 resulted in three months of lease income in 1995
while there was none for the same period in 1996.
Interest income increased by $40,919 (205.5%) for the three months ended
September 30, 1996, as compared to the same period in 1995. This increase is
due to increased cash balances in interest bearing accounts resulting from the
proceeds received from the sale of seven nursing homes to LCCA and the FHP
lease termination payment.
General and Administrative - Other expense decreased by $29,885 (109.9%)
for the three months ended September 30, 1996, as compared to the same period
in 1995. This decrease is due to the increase in direct allocations to
resident services expenses of accounting and legal fees incurred by affiliates
on behalf of the operated nursing homes while total General and Administrative
remained stable.
General and Administrative - Affiliates expense decreased by $11,382 for
the three months ended September 30, 1996, compared to the same period in
1995, due to an increase in the allocation of the travel and overhead of
affiliates directly to resident service expenses while total General and
Administrative remained stable.
Depreciation and Amortization expense decreased by $78,292 for the three
months ended September 30, 1996, as compared to the same period in 1995. This
decrease was primarily due to the net effect of increased depreciation from
the new laundry facility placed in service at Paramount Chateau in January
1996 and decreased depreciation from the seven nursing homes sold to LCCA in
May 1996.
Cumberland Healthcare, L.P. I-C ("Cumberland, I-C") and Arbor Health
Care Company ("Arbor") entered into a purchase and sale agreement effective
September 19, 1996, pursuant to which Arbor agreed to purchase a nursing home
for $5,750,000. This sale resulted in recognition of a gain of $3,268,608 for
the three months and nine months ending September 30, 1996.
The primary sources of funds for the period ended September 30, 1996, were
rental income, revenues from nursing home operations, proceeds from the sale
of seven California nursing homes, lease termination settlement and collection
of accounts receivable. These funds were used to pay nursing home expenses,
make cash distributions to the partners and reduce the amount of outstanding
indebtedness. As of September 30, 1996, the Partnership has an interest in
three nursing homes that have a combined net book value of $5,035,486. Net
book value is not necessarily representative of market value.
In the opinion of the General Partner, there are no material trends,
favorable or unfavorable, in the Partnership's capital resources. The
resources will be sufficient to meet the Partnership's needs for the next 12
to 24 months. These sources include cash flows from operations, rental income
and current cash reserves.
Short-term liquidity requirements consist of funds needed to meet
commitments for debt service and administrative and operational expenses.
These short term needs will be funded by cash at September 30, 1996, plus 1996
interest income and cash flows from operations. However, if the future
changes in the healthcare market would require extensive capital expenditures
by the Partnership in order for its facilities to meet new licensure and/or
marketplace standards, the Partnership may be required to seek additional
capital sources or increase its long term debt in order to meet potential
future expenditure requirements. The General Partner is unable at this time
to predict the extent of future capital expenditure needs of the facilities
resulting from future changes in the nursing home industry.
Mortgage obligations coming due within the next three (3) years will be
reviewed prior to their due dates. Based on the Partnership's evaluation of
each property and its corresponding mortgage, current interest rates,
availability of funds and other relevant factors, each mortgage will be either
refinanced, paid off or the property abandoned. If needed for mortgage
funding, the Partnership has available income from rental property, facility
operational cash flows and current cash balances.
The cash balance, not including restricted cash, at September 30, 1996,
was $5,944,073. The Partnership had net income of $12,338,753. After
adjusting for depreciation, amortization, and changes in operating assets and
liabilities, net cash provided by operating activities was $2,284,093. The
net cash provided by investing activities was $21,498,741 which includes fixed
asset additions and the sale of investment properties. The net cash used in
financing activities was $19,465,389 and consisted of principal payments on
notes payable and distributions to partners. Significant changes to the
balance sheet which affected the cash flow of the Partnership for the period
primarily due to the start-up of operations of Pacific Palms (f/k/a FHP-
Norwalk, f/k/a Rancho Los Padres) with its accounts receivable increasing from
zero to $478,928. This was due to delays in licensing approval, slow billing
and a normal increase in Accounts Receivable. Prepaid expenses increased
$41,293 primarily from an increase in insurance rates and the additional
premium for Pacific Palms which was previously paid by the lessee. Restricted
cash decreased by $24,759 due to the net effect of increased patient trust
balances of $12,315 and the release of $37,074 from the FHP capital
improvements escrow account as part of the lease termination agreement.
Additions to investment properties increased primarily from $74,324 being
capitalized upon completion of a laundry addition at Paramount Chateau The
sale of the seven nursing homes to LCCA provided $15,848,942 in cash proceeds
upon closing at May 29, 1996. The sale of one nursing home to Arbor provided
$3,618,663 in cash proceeds upon closing at September 19, 1996. Mortgage
Notes Payable decreased by $5,422,779 primarily due to the payment of debt on
the Sun City facility of $1,814,307 from proceeds of the LCCA sale of the
seven nursing homes, the assumption by LCCA of the $1,259,719 debt on the
Rimrock facility and the payment of debt on the Hillcrest facility of
$2,110,513 from proceeds from the sale of the facility to Arbor.
Cash distributions to Limited Partners were discontinued during the
first quarter of 1988 and resumed in February 1992. The 1995 distribution to
Limited Partners totaled $1,500,000 (5% of the original capital of
$30,000,000). The February 1996 distribution to the Limited Partners was
$750,000 (2.5% of the original capital of $30,000,000). The July 1996
distribution to the Limited Partners was $13,200,000 (44% of the original
capital of $30,000,000). Future distributions will be at a level that is
warranted by the cash flow and profits of the Partnership.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits filed with this Report - None
(b) Reports on Form 8-K - None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, this report has been signed by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
CUMBERLAND HEALTHCARE, L.P. I-A
By: Medical Investments Partners
By: RJ Health Properties, Inc.
Managing General Partner
Date: December 5, 1996 By: /s/Fred E. Whaley
President and Director
Date: December 5, 1996 By: /s/J. Davenport Mosby, III
Vice President and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMAITON EXTRACTED FROM
THE QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED SEPTEMBER 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 5,944,073
<SECURITIES> 0
<RECEIVABLES> 1,191,268
<ALLOWANCES> 101,095
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 7,405,997
<DEPRECIATION> 2,370,511
<TOTAL-ASSETS> 13,644,875
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 1,975,513
0
0
<COMMON> 0
<OTHER-SE> 10,331,750
<TOTAL-LIABILITY-AND-EQUITY> 13,644,875
<SALES> 0
<TOTAL-REVENUES> 7,353,277
<CGS> 0
<TOTAL-COSTS> 5,145,516
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 418,382
<INCOME-PRETAX> 12,338,753
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,103,842
<DISCONTINUED> 0
<EXTRAORDINARY> 11,234,911
<CHANGES> 0
<NET-INCOME> 12,338,753
<EPS-PRIMARY> 403.07<F2>
<EPS-DILUTED> 403.07<F2>
<FN>
<F1>REGISTRANT HAS AN UNCLASSIFIED BALANCE SHEET
<F2>EPS-IS NET INCOME PER $1,000 LIMITED PARTNERSHIP UNIT
</FN>
</TABLE>
