FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
COMMISSION FILE NUMBER 0-16815
NHP RETIREMENT HOUSING PARTNERS I
LIMITED PARTNERSHIP
(A DELAWARE LIMITED PARTNERSHIP)
(Exact name of registrant as specified in its charter)
DELAWARE 52-1453513
(State of other jurisdiction of incorporation or (I.R.S. Employer
organization) (Identification No.)
14160 DALLAS PARKWAY, SUITE 300
DALLAS, TX 75240
(Address of principal executive offices)
(Zip Code)
(972) 770-5600
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
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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PART I - FINANCIAL INFORMATION
Item 1 - FINANCIAL STATEMENTS
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NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
September 30, 1999 December 31, 1998
------------------ -----------------
(Unaudited)
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ASSETS
Cash and cash equivalents $ 5,474,425 $ 5,821,300
Other receivables 11,079 12,451
Pension notes issuance costs 267,764 357,017
Organization and offering costs - 77,615
Prepaid expenses 219,957 140,590
Rental property
Land 2,391,705 2,391,705
Building, net of accumulated depreciation of
$6,212,052 in 1999 and $5,783,775 in 1998 16,100,564 16,457,649
Other assets 3,973 4,473
------------- --------------
Total assets $ 24,469,467 $ 25,262,800
============= ==============
LIABILITIES AND PARTNERS' DEFICIT
Liabilities
Accounts payable $ 169,220 $ 301,673
Interest payable 14,430,586 13,142,863
Pension notes 20,157,826 20,157,826
Other liabilities 289,446 332,144
------------- --------------
35,047,078 33,934,506
------------- --------------
Partners' deficit
General partner (909,057) (849,832)
Assignor limited partners--42,691 investment
units outstanding (9,668,554) (7,821,874)
------------- --------------
Total partners' deficit (10,577,611) (8,671,706)
------------- --------------
Total liabilities and partners' deficit $ 24,469,467 $ 25,262,800
============= ==============
</TABLE>
See notes to financial statements
1
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<TABLE>
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NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three-months ended September 30,
1999 1998
---- ----
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REVENUE
Rental income $ 1,252,796 $ 4,010,841
Interest income 51,403 48,401
Other income 15,925 60,585
------------ ------------
1,320,124 4,119,827
------------ ------------
COSTS AND EXPENSES
Salaries, related benefits and overhead reimbursements 275,409 1,037,307
Management fees, dietary fees and other services 144,281 388,174
Administrative and marketing 33,558 133,268
Utilities 56,371 211,770
Maintenance 43,845 129,633
Resident services, other than salaries 12,013 80,619
Food services, other than salaries 133,511 415,236
Depreciation 143,494 446,800
Taxes and insurance 123,697 263,007
------------ ------------
966,179 3,105,814
------------ ------------
INCOME FROM RENTAL OPERATIONS 353,945 1,014,013
------------ ------------
OTHER INCOME (EXPENSES)
Gain on sale of properties - 9,276,111
Interest expense -- pension notes (803,291) (1,582,984)
Amortization of pension notes issuance costs (29,751) (63,698)
Amortization of organization and offering costs - (12,444)
Other (225,193) (111,458)
------------ ------------
(1,058,235) 7,505,527
------------ ------------
NET (LOSS) INCOME $ (704,290) $ 8,519,540
============ ============
NET (LOSS) INCOME PER ASSIGNEE INTEREST $ (16) $ 196
============ ============
</TABLE>
See notes to financial statements
2
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<TABLE>
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NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Nine-months ended September 30,
1999 1998
---- ----
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REVENUE
Rental income $ 3,804,078 $ 12,066,537
Interest income 133,834 116,343
Other income 56,820 195,512
------------ ------------
3,994,732 12,378,392
------------ ------------
COSTS AND EXPENSES
Salaries, related benefits and overhead reimbursements 815,217 3,066,387
Management fees, dietary fees and other services 383,122 1,151,039
Administrative and marketing 121,317 427,729
Utilities 202,699 687,579
Maintenance 135,997 377,199
Resident services, other than salaries 32,481 216,576
Food services, other than salaries 386,050 1,213,717
Depreciation 428,277 1,321,110
Taxes and insurance 388,947 850,905
------------ ------------
2,894,107 9,312,241
------------ ------------
INCOME FROM RENTAL OPERATIONS 1,100,625 3,066,151
------------ ------------
OTHER INCOME (EXPENSES)
Gain on sale of properties - 9,276,111
Interest expense -- pension notes (2,353,486) (4,748,950)
Amortization of pension notes issuance costs (89,253) (191,094)
Amortization of organization and offering costs (77,615) (37,332)
Other (464,638) (240,575)
------------ ------------
(2,984,992) 4,058,160
------------ ------------
NET (LOSS) INCOME $ (1,884,367) $ 7,124,311
============ ============
NET (LOSS) INCOME PER ASSIGNEE INTEREST $ (43) $ 164
============ ============
</TABLE>
See notes to financial statements
3
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<TABLE>
<CAPTION>
NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF PARTNERS' DEFICIT
(UNAUDITED)
ASSIGNOR LIMITED
GENERAL PARTNER PARTNER TOTAL
--------------- ---------------- -----
<S> <C> <C> <C>
Partners' deficit
at December 31, 1998 $ (849,832) $ (7,821,874) $ (8,671,706)
Distributions (21,538) - (21,538)
Net loss - nine-months
ended September 30, 1999 (37,687) (1,846,680) (1,884,367)
----------- ------------ -------------
Partners' deficit
at September 30, 1999 $ (909,057) $ (9,668,554) (10,577,611)
=========== ============ =============
Percentage interest
at September 30, 1999 2% 98% 100%
== === ====
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See notes to financial statements
4
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<TABLE>
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NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine-months ended September 30
1999 1998
---- ----
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CASH FLOWS FROM OPERATING ACTIVITES
Rent collections $ 3,805,450 $ 12,075,762
Interest received 133,834 116,343
Other income 56,820 195,512
Salary and related benefits (807,881) (3,077,341)
Management fees, dietary fees
and other services (384,773) (1,157,605)
Other operating expenses paid (1,991,832) (3,648,908)
Interest paid (1,065,763) (2,234,306)
------------ -------------
Net cash (used in) provided by
operating activities (254,145) 2,269,457
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITY
Capital expenditures (71,192) (527,073)
------------ -------------
Net cash used in investing activity (71,192) (527,073)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITY
Distributions (21,538) (45,598)
------------ -------------
Net cash used in financing activity (21,538) (45,598)
------------ -------------
Net (decrease) increase in cash and
cash equivalents (346,875) 1,696,786
Cash and cash equivalents
at beginning of period 5,821,300 4,495,733
------------ -------------
Cash and cash equivalents
at end of period $ 5,474,425 $ 6,192,519
============ =============
</TABLE>
See notes to financial statements
5
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<TABLE>
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NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
Nine-months ended September 30,
1999 1998
---- ----
RECONCILIATION OF NET LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
<S> <C> <C>
Net (loss) income $ (1,884,367) $ 7,124,311
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities
Gain on sale of properties - (9,276,111)
Depreciation 428,277 1,321,110
Amortization of organization and offering costs 77,615 37,332
Amortization of pension notes issuance costs 89,253 191,094
Changes in operating assets and liabilities
Other assets and receivables 1,872 47,112
Prepaid expenses (79,367) 25,122
Accounts payable (132,453) 562,351
Interest payable 1,287,723 2,514,644
Other liabilities (42,698) (277,508)
------------ ------------
Total adjustments 1,630,222 (4,854,854)
------------ ------------
Net cash (used in) provided by
operating activities $ (254,145) $ 2,269,457
============ ============
</TABLE>
See notes to financial statements
6
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NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
1. ACCOUNTING POLICIES
Nature of Business
NHP Retirement Housing Partners I Limited Partnership (the Partnership)
is a limited partnership organized under the laws of the State of
Delaware on March 10, 1986. The Partnership was formed for the purpose of
raising capital by issuing both Pension Notes (Pension Notes) to
tax-exempt investors and selling additional partnership interests in the
form of Assignee Interests (Interests) to taxable individuals. Interests
represent assignments of the limited partnership interests of the
Partnership issued to the Assignor Limited Partner, NHP RHP-I Assignor
Corporation. The proceeds from the sale of the Pension Notes and
Interests have been invested in residential rental properties for
retirement age occupants.
Basis of Presentation
The accompanying balance sheet as of December 31, 1998, has been
derived from audited financial statements of the Partnership for the
year-ended December 31, 1998, and the accompanying unaudited financial
statements, as of September 30, 1999 and 1998, have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commmission. Certain information and note disclosures normally included
in the annual financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
those rules and regulations. For further information, refer to the
financial statements and notes thereto for the year ended December 31,
1998 included in the Partnership's Annual Report on Form 10-K filed with
the Securities and Exchange Commission on March 31, 1999.
In the opinion of management, the accompanying financial statements
contain all adjustments (all of which were normal recurring accruals)
necessary to present fairly the Partnership's financial position as of
September 30, 1999 and 1998, results of operations, changes in Partner's
deficit and cash flows for the three- and nine-month periods ended
September 30, 1999 and 1998. The results of operations for the nine-month
period ended September 30, 1999 are not necessarily indicative of the
results for the year ending December 31, 1999.
2. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES OF THE GENERAL
PARTNER
Until January 23, 1995, the sole general partner of the Partnership was
NHP/RHGP-1 Limited Partnership (NHP/RHGP-1). Effective January 23, 1995,
Capital Realty Group Senior Housing, Inc. (CRGSH) became the new sole
general partner of the Partnership.
On June 10, 1998, the sole owner of the General Partner, Capital Realty
Group Corporation, sold all of its shares of CRGSH common stock to
Retirement Associates, Inc. (Associates) for $855,000. The source of the
funds is a Promissory Note for $855,000 with a five-year term and bearing
an interest rate of 10 percent per annum. The interest will accrue on the
Promissory Note and be payable at the maturity of the Promissory Note.
Associates is the maker of the Note and Capital Realty Group Corporation
is the payee. Mr. Robert Lankford is the President of Associates and has
brokered and continues to broker real estate as an independent contractor
with affiliates of Capital Senior Living Corporation.
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As discussed below in Note 4, on September 30, 1998, the Partnership
sold its four wholly owned properties to Capital Senior Living Properties
2 - NHPCT, Inc., a wholly owned subsidiary of Capital Senior Living
Corporation (CSLC), for $40,650,000. An independent third-party appraiser
valued the assets at $40,425,000. In connection with this sale of
properties, Capital Realty Group Brokerage, Inc., an affiliate of CSLC,
and an affiliate of CRGSH until June 10, 1998, received $1,219,500 in
brokerage fees.
Personnel working at the Property sites and certain home office
personnel who perform services for the Partnership are employees of
Capital Senior Living, Inc. (CSL), an affiliate of CRGSH until June 10,
1998. The Partnership reimburses CSL for the salaries, related benefits,
and overhead reimbursements of such personnel as reflected in the
accompanying financial statements. Salary, related benefits and overhead
reimbursements reimbursed and expensed by the Partnership to CSL for the
third fiscal quarter ended September 30, 1999 and 1998, were $282,132 and
$1,037,307, respectively. Management fees, dietary fees and other
services reimbursed and expensed by the Partnership to CSL for the third
fiscal quarter ended September 30, 1999 and 1998, were $144,281 and
$388,174, respectively.
Distributions of $21,538 were made to the General Partner during the
nine-months ended September 30, 1999.
3. IMPAIRMENT OF RENTAL PROPERTY
Generally accepted accounting principles require that the Partnership
evaluate whether it is probable that the estimated undiscounted future
cash flows of its properties, taken individually, will be less than the
respective net book value of the properties. If such a shortfall exists
and is material, then a write-down is warranted. The Partnership performs
such evaluations on an on-going basis. During the nine-months ended
September 30, 1999, based on the Partnership's evaluation of its
property, the Partnership did not believe that any write-down was
warranted.
4. DISPOSITION OF RENTAL PROPERTY AND PARTIAL REDEMPTION OF PENSION NOTES
On September 30, 1998, the Partnership sold four properties to Capital
Senior Living Properties 2-NHPCT, Inc., a wholly owned subsidiary of
CSLC, for $40,650,000. The four properties sold were the Atrium at
Carmichael, Crosswood Oaks, The Heatherwood and the Veranda Club. After
the sale, The Amberleigh is the only remaining property in which the
Partnership has any interest. After payment of closing costs, the
Partnership netted $322,652 in cash proceeds from the sale after
$22,514,174 was allocated for partial redemption of Pension Notes,
$15,703,636 allocated for partial payment of deferred interest on the
redeemed Pension Notes, and $413,188 for payment of current interest due
on redeemed Pension Notes. The Partnership recognized a $9,276,111 gain
on sale of those properties at September 30, 1998.
In October 1998, the Partnership recognized approximately $1,856,485 of
additional interest expense paid on redeemed Pension Notes resulting from
the difference between the stated interest rate of 13 percent on the
Pension Notes and the accrued interest rate of approximately 9 percent
recorded by the Partnership under the effective interest rate method. Due
to the partial redemption of Pension Notes, the Partnership recognized
$525,891 of losses on early extinguishment of debt relating to the write
off of issuance and organization costs on Pension Notes that were
redeemed.
5. LEGAL PROCEEDINGS
On or about October 23, 1998, an Interest holder filed a putative class
action complaint on behalf of certain holders of Interests in NHP in the
Delaware Court of Chancery against the Partnership, CSLC, Capital Senior
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Living Properties 2 - NHPCT, Inc. and CRGSH (the Defendants). This
Interest holder purchased 90 Interests in the Partnership in February
1993 for $180. The complaint alleges, among other things, that the
Defendants breached, or aided and abetted a breach of, the express and
implied terms of the Partnership Agreement in connection with the sale of
four properties by the Partnership to Capital Senior Living Properties 2
- NHPCT, Inc. Capital Senior Living Properties 2 - NHPCT, Inc. is an
affiliate of Capital Senior Living, Inc., the current manager of The
Amberleigh. The complaint seeks, among other relief, rescission of the
sale of these properties and unspecified damages. The Partnership
believes the complaint is without merit and is vigorously defending
itself in this action. The Partnership has filed a Motion to Dismiss in
this case, which is pending.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The following schedule summarizes the occupancy levels at The Amberleigh in
which the Partnership has a 99.9 percent partnership interest.
Available September 30 September 30
Units 1999 1998
----- ---- ----
The Amberleigh
At Woodstream Farms
Williamsville, New York 271 91% 98%
On November 5, 1997, the Partnership purchased approximately 3.10 acres of
land adjacent to The Amberleigh for potential future expansion (the Expansion)
for $500,000 plus closing costs. The General Partner is considering the
Expansion as an additional means to add to the residual value of the
Partnership. This Expansion also would preclude competitors or other potential
purchasers of the site from blocking visibility of the existing facility to the
main vehicular trafficway. If the Partnership decides to proceed with the
Expansion, there can be no assurance that licensure will be granted by the
regulatory authorities in New York to allow this Expansion or that a lender will
finance this development and at favorable rates.
Rent collections for the nine-month period decreased to $3,805,450 in 1999
from $12,075,762 in 1998. Salaries, management fees and other operating expenses
paid likewise decreased, from $7,883,854 in 1998 to $3,184,486 in 1999.
Decreases in both rent collections and operating expenses were due to the sale
of the four Partnership properties on September 30, 1998.
Cash generated from rental operations prior to the payment of interest
expense was insufficient to pay all of the interest on the Pension Notes
currently payable, which was $1,065,763 for the nine-month period ended
September 30, 1999. Net cash (used) provided from operations, after the payment
of interest expense, during the nine-months ended September 30, 1999 and 1998
was ($254,145) and $2,269,457, respectively. Interest on the Pension Notes bears
stated simple interest at 13 percent rate per annum, and is paid on a 7 percent
rate per annum. It is accrued, however, under the effective interest method at a
rate of approximately 9 percent per annum compounded quarterly, which totaled
$2,353,486 and $4,748,950 for the nine-months ended September 30, 1999 and 1998,
respectively. The remaining 6 percent unpaid portion is due at maturity. Total
accrued and unpaid interest amounted to $14,430,586 and $13,142,863 at September
30, 1999 and December 31, 1998, respectively.
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Capital expenditures decreased $455,881 from $527,073 in 1998 to $71,192
in 1999 due to the sale of four Partnership properties.
Cash and cash equivalents at September 30, 1999 and December 31, 1998
amounted to $5,474,425 and $5,821,300, respectively.
Future funds may not be available to meet operating requirements, including
the ultimate payment of principal and deferred interest on the Pension Notes.
This cash need has caused the General Partner to determine that it is not
financially appropriate to make distributions to Interest holders.
Since 1993, cash generated from operations has been sufficient to meet the
Partnership's minimum interest payment requirements with exception of the
current nine-months ended September 30, 1999. The Partnership estimates total
unpaid interest and principal will approximate $38 million at December 31, 2001,
the maturity date of the Pension Notes, which is in excess of projected cash
reserves at that time. Accordingly, the disposition and/or refinancing value of
the remaining property will need to be sufficient to fund the amount in excess
of projected cash reserves on the Pension Notes upon their maturity.
Additionally, the General Partner is considering the Expansion as an additional
means to add to the residual value of the Partnership. If the Partnership
decides to proceed with the Expansion, there can be no assurance that licensure
will be granted by the regulatory authorities in New York to allow this
Expansion or that a lender will finance this development and at favorable rates.
RESULTS OF OPERATIONS
The Partnership's net loss for the nine-months ended September 30, 1999
includes rental operations from the Partnership's property. The net loss also
includes depreciation, amortization of Pension Notes issuance costs,
amortization of organization and offering costs, and accrued Pension Note
interest expense, which are noncash in nature.
The Partnership net income (loss) decreased from $7,124,311 to ($1,884,367)
for the nine-month period ended September 30, 1998 and 1999, respectively. Net
income (loss) per interest decreased from $164 to ($43) for the nine-month
period ended September 30, 1998 and 1999, respectively. The decrease in the
Partnership's net income (loss) was principally due to the recognition of a
$9,276,111 gain on the sale of the four Partnership properties on September 30,
1998. Total revenues for the nine-month period decreased from $12,378,392 in
1998 to $3,994,732 in 1999. Total operating costs and expenses likewise
decreased from $9,312,241 in 1998 to $2,894,107 in 1999. Decreases in both
revenues and operating costs were due to the sale of the four Partnership
properties on September 30, 1998. Pension Notes interest expense decreased from
$4,748,950 to $2,353,486 for the nine-month period ended September 30, 1998 and
1999, respectively, due to the partial redemption of Pension Notes in 1998.
Amortization of Pension Notes issuance costs decreased from $191,094 to $89,253
for the nine-month period ended September 30, 1998 and 1999, respectively, due
to the write-off of certain issuance costs upon redemption of the Pension Notes
in 1998. Amortization of organization and offering costs increased from $37,332
to $77,615 for the nine-month period ended September 30, 1998 and 1999,
respectively, due to the write off of $68,599 in organization costs required
under the American Institute of Certified Public Accountants Statement of
Position 98-5, Reporting Costs of Start-up Activities. Other expenses relating
to Partnership administration increased from $240,575 to $464,638 for the
nine-month period ended September 30, 1998 and 1999, respectively, due to
increased professional fees, due primarily to the litigation.
YEAR 2000 ISSUE
The year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of the
Partnership's computer programs or hardware that have date-sensitive software or
embedded chips may recognize the year 2000 as a date other than the year 2000.
10
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This could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices or engage in similar normal business activities.
Based on ongoing assessments, the Partnership has developed a program
to modify or replace significant portions of its software and certain hardware,
which are generally PC-based systems, so that those systems will properly
recognize and utilize dates beyond December 31, 1999. The Partnership has
substantially completed software reprogramming and software and hardware
replacement as of September 30, 1999, with 100 percent completion targeted for
December 31, 1999. The costs of the completed and future modifications and
replacement of hardware and software for the systems of the managing agent is
expected to result in expenditures of approximately $100,000. However, the
Partnership expects to incur $5,000 or less of allocated costs for the
completion of the managing agent's year 2000 initiative. All of the
Partnership's systems have been upgraded with the exception of its general
ledger program. The general ledger program is year 2000 compliant, however, some
of the reporting tools used in conjunction with the general ledger will not work
properly with the current version of the Partnership's general ledger after
December 31, 1999. As a result of this issue, the Partnership is currently in
the process of upgrading its current general ledger and reporting software and
expects this process to be completed by December 31, 1999. The Partnership
presently believes that these modifications and replacement of existing software
and certain hardware will mitigate the year 2000 issue. However, if such
modifications and replacements are not completed timely, the year 2000 issue
could have a material impact on the operations of the Partnership.
The Partnership has completed a survey requiring written responses from
its critical service providers in 1999. Based on the responses from the
Partnership's critical service providers, 90 to 95 percent of the respondents
indicated that they are currently year 2000 compliant and the remaining
respondents indicate that they will be year 2000 compliant by the end of the
year. The Partnership is therefore not aware of any external critical service
provider with a year 2000 issue that would materially impact the Partnership's
results of operations, liquidity or capital resources. However, the Partnership
has no other means of determining whether or ensuring that its critical service
providers are or will be year 2000-ready. The inability of critical services
providers to complete their year 2000 resolution process in a timely fashion
could materially impact the Partnership.
The Partnership has assessed its exposure to operating equipment, and
such exposure it not significant due to the nature of the Partnership's
business.
The Partnership operates in a relatively low technology dependent
industry and does not anticipate any industry or Partnership specific year 2000
risks beyond those discussed above. Significant year 2000 problems could result
in the Partnership not having timely the operating information necessary to
efficiently manage and monitor its business activities. This could result in
disruptions in operation, including, among other things, a temporary inability
to process transactions, send invoices or engage in similar normal business
activities. The Partnership does not foresee year 2000 issues affecting the
day-to-day operations of its senior living communities due to their limited use
of technology and the Partnership's evaluation of their operating equipment. The
Partnership considers the possibility of significant year 2000 problems, based
on the evaluation of our internal systems and the response from our critical
service providers, to be remote.
The Partnership's management believes it has an effective program in
place to resolve the year 2000 issue in a timely manner. As noted above, the
Partnership has completed most but not all necessary phases of its year 2000
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program. In the event that the Partnership does not complete the current program
or any additional phases, the Partnership could incur disruptions to its
operations. In addition, disruptions in the economy generally resulting from
year 2000 issues also could materially adversely affect the Partnership. The
Partnership could be subject to litigation or computer systems failure. The
amount of potential liability and cost cannot be reasonably estimated at this
time.
The Partnership currently has no contingency plans in place in the
event it does not complete all phases of its year 2000 program. The Partnership
plans to continue to monitor the status of completion of its year 2000
initiatives to determine whether such a plan is necessary.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Partnership's primary market risk exposure is from fluctuations in
interest rates and the effects of those fluctuations on the market values of its
cash equivalent short-term investments. The cash equivalent short-term
investments consist primarily of overnight investments that are not
significantly exposed to interest rate risk, except to the extent that changes
in interest rates will ultimately affect the amount of interest income earned on
these investments.
PART II
Item 1. LEGAL PROCEEDINGS
On or about October 23, 1998, an Interest holder filed a putative class
action complaint on behalf of certain holders of Interests in NHP in the
Delaware Court of Chancery against the Partnership, CSLC, Capital Senior Living
Properties 2 - NHPCT, Inc. and CRGSH (the Defendants). This Interests holder
purchased 90 Interests in the Partnership in February 1993 for $180. The
complaint alleges, among other things, that the Defendants breached, or aided
and abetted a breach of, the express and implied terms of the Partnership
Agreement in connection with the sale of four properties by the Partnership to
Capital Senior Living Properties 2 - NHPCT, Inc. Capital Senior Living
Properties 2 - NHPCT, Inc. is an affiliate of Capital Senior Living, Inc., the
current manager of The Amberleigh. The complaint seeks, among other relief,
rescission of the sale of these properties and unspecified damages. The
Partnership believes the complaint is without merit and intends to vigorously
defend itself in this action. The Partnership has filed a Motion to Dismiss in
this case, which is pending.
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
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Item 5. Other information
None
Item 6. Exhibits and reports on Form 8-K
(A) Exhibit
27.1 Financial data schedule
(B) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NHP Retirement Housing Partners I Limited Partnership
by: Capital Realty Group Senior Housing, Inc.
General Partner
By: /s/ Robert Lankford
-------------------------------------------
Robert Lankford
President and Chief Financial Officer
Date: November ____, 1999
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<LEGEND>
NHP Financial Data Schedule
</LEGEND>
<CIK> 0000793730
<NAME> NHP Retirement Housting, L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 5,474,425
<SECURITIES> 0
<RECEIVABLES> 11,079
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 24,704,321
<DEPRECIATION> (6,212,052)
<TOTAL-ASSETS> 24,469,467
<CURRENT-LIABILITIES> 0
<BONDS> 20,157,826
0
0
<COMMON> 0
<OTHER-SE> (10,577,611)
<TOTAL-LIABILITY-AND-EQUITY> 24,469,467
<SALES> 0
<TOTAL-REVENUES> 3,994,732
<CGS> 0
<TOTAL-COSTS> 2,894,107
<OTHER-EXPENSES> 631,506
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,353,496
<INCOME-PRETAX> (1,884,367)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,884,367)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
