FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT of 1934
For the transition period.........to.........
Commission file number 0-15675
DAVIDSON GROWTH PLUS, L.P.
(Exact name of small business issuer as specified in its charter)
Delaware 52-1462866
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (803) 239-1000
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) DAVIDSON GROWTH PLUS, L.P.
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
September 30, 1995
<S> <C> <C>
Assets
Cash:
Unrestricted $1,105,100
Restricted-tenant security deposits 111,340
Accounts receivable 6,592
Escrows for taxes and insurance 419,620
Restricted escrows 512,642
Other assets 441,971
Investment properties:
Land $ 4,649,770
Buildings and related personal property 18,645,717
23,295,487
Less accumulated depreciation (7,443,172) 15,852,315
$18,449,580
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 63,645
Tenant security deposits 109,847
Accrued taxes 314,398
Other liabilities 339,804
Subordinated management fee 161,043
Mortgage notes payable 12,359,811
Minority Interest 314,167
Partners' Capital (Deficit)
General partner $ (674,746)
Limited partners (28,371.75 units
issued and outstanding) 5,461,611 4,786,865
$18,449,580
</TABLE>
[FN]
See Accompanying Notes to Consolidated Financial Statements
b) DAVIDSON GROWTH PLUS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Rental income $1,168,574 $1,112,517 $3,496,459 $3,314,958
Other income 65,409 57,412 206,692 157,254
Total revenues 1,233,983 1,169,929 3,703,151 3,472,212
Expenses:
Operating 342,376 341,256 948,813 982,904
General and administrative 47,619 43,553 160,213 133,823
Property management fees 60,296 57,054 180,785 171,272
Maintenance 146,654 120,115 420,528 334,970
Depreciation 180,596 170,916 531,520 503,357
Interest 272,038 273,698 818,452 823,097
Property taxes 109,156 96,093 323,334 304,544
Subordinated partnership
management fee 4,265 2,224 13,405 4,449
Total expenses 1,163,000 1,104,909 3,397,050 3,258,416
Minority interest in net
income of joint venture (6,671) (9,336) (38,423) (34,987)
Loss on disposal of property (6,199) (13,947) (9,298) (13,947)
Net income $ 58,113 $ 41,737 $ 258,380 $ 164,862
Net income allocated to
general partners (3%) $ 1,743 $ 1,252 $ 7,751 $ 4,946
Net income allocated to
limited partners (97%) 56,370 40,485 250,629 159,916
$ 58,113 $ 41,737 $ 258,380 $ 164,862
Net income per limited
partnership unit $ 1.99 $ 1.43 $ 8.83 $ 5.64
</TABLE>
[FN]
See Accompanying Notes to Consolidated Financial Statements
c) DAVIDSON GROWTH PLUS, L.P.
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 28,371.75 $ 1,000 $28,375,750 $28,376,750
Partners' capital (deficit) at
December 31, 1994 28,371.75 $(640,843) $ 6,557,789 $ 5,916,946
Distributions for the nine
months ended September 30, 1995 -- (41,654) (1,346,807) (1,388,461)
Net income for the nine months
ended September 30, 1995 -- 7,751 250,629 258,380
Partners' capital (deficit) at
September 30, 1995 28,371.75 $(674,746) $ 5,461,611 $ 4,786,865
</TABLE>
[FN]
See Accompanying Notes to Consolidated Financial Statements
d) DAVIDSON GROWTH PLUS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 258,380 $ 164,862
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 531,520 503,357
Amortization of discounts and loan costs 72,829 67,174
Minority interest in net income of joint
venture 38,423 34,987
Loss on disposal of property 9,298 13,947
Change in accounts:
Restricted cash (180) (8,438)
Accounts receivable 1,712 266,082
Escrows for taxes and insurance (168,914) (166,088)
Accounts payable 3,415 (35,899)
Tenant security deposit liabilities 3,085 8,782
Accrued taxes 136,317 154,645
Other liabilities 87,965 (12,296)
Subordinated management fee 13,405 4,449
Net cash provided by operating activities 987,255 995,564
Cash flows from investing activities:
Property improvements and replacements (181,483) (150,179)
Deposits to restricted escrows (14,649) (19,202)
Receipts from restricted escrows 39,458 119,568
Net cash used in investing activities (156,674) (49,813)
Cash flows from financing activities:
Payments on mortgage notes payable (140,093) (129,792)
Distributions to partners (1,388,461) (289,830)
Distributions to minority interest (175,000) (93,531)
Loan costs -- (51,175)
Net cash used in financing activities (1,703,554) (564,328)
Net (decrease) increase in cash (872,973) 381,423
Cash at beginning of period 1,978,073 1,328,490
Cash at end of period $ 1,105,100 $1,709,913
Supplemental disclosure of cash flow information:
Cash paid for interest $ 745,623 $ 823,097
</TABLE>
[FN]
See Accompanying Notes to Consolidated Financial Statements
e) DAVIDSON GROWTH PLUS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the Managing General Partner, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the nine month
period ended September 30, 1995, are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 1995. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Partnership's annual report on Form 10-KSB for the
fiscal year ended December 31, 1994.
Certain reclassifications have been made to the 1994 information to conform
to the 1995 presentation.
Note B - Transactions with Affiliated Parties
Affiliates of Insignia Financial Group, Inc. ("Insignia") own the controlling
ownership interest in the Partnership s Managing General Partner, with certain
affiliates of Insignia providing property management and asset management
services to the Partnership.
The following payments were made to Insignia and its affiliates for the nine
months ended September 30, 1995, and September 30, 1994:
1995 1994
Property management fees $180,785 $171,272
Data processing services 2,164 1,800
Marketing services 3,126 3,142
Reimbursement for services
of affiliates 104,692 101,007
The Partnership insures its properties under a master policy through an
agency and insurer unaffiliated with the Managing General Partner. An
affiliate of the Managing General Partner acquired, in the acquisition of a
business, certain financial obligations from an insurance agency which was
later acquired by the agent who placed the current year's master policy. The
current agent assumed the financial obligations to the affiliate of the
Managing General Partner, who receives payments on these obligations from the
agent. The amount of the Partnership's insurance premiums accruing to the
benefit of the affiliate of the Managing General Partner by virtue of the
agent's obligations is not significant.
Subordinated partnership management fees of $161,043 had not been paid to the
Managing General Partner as of September 30, 1995. Of this amount, $13,405
relates to the nine months ended September 30, 1995.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of three apartment
complexes. The following table sets forth the average occupancy of the
properties for the nine months ended September 30, 1995, and September 30,
1994:
Average
Occupancy
1995 1994
The Fairway Apartments
Plano, Texas 97% 96%
The Village Apartments
Brandon, Florida 98% 97%
Brighton Crest Apartments
Marietta, Georgia 95% 95%
The Partnership had net income of $258,380 for the nine months ended
September 30, 1995, compared to net income of $164,862 for the nine months ended
September 30, 1994. The Partnership had net income of $58,113 for the three
months ended September 30, 1995, compared to net income of $41,737 for the three
months ended September 30, 1994. Rental income increased for the three and nine
months ended September 30, 1995, due to slight increases in occupancy at The
Fairway and The Village and increases in rental rates at all of the properties.
The increase in other income for the nine months ended September 30, 1995, was
primarily due to a tax refund of $20,352 received in the first quarter related
to The Village's property value reassessment. Also, the increase was impacted
by increased interest income resulting from higher average cash balances during
the nine months ended September 30, 1995.
The increase in general and administrative expense for the nine months ended
September 30, 1995, was due to increases in mailing and printing costs, taxes
and other fees, and other miscellaneous administrative costs. The increase in
maintenance expense for the three and nine months ended September 30, 1995, was
due to major landscaping totalling approximately $43,000, interior and exterior
painting totalling approximately $7,000 and wallpaper replacement totalling
approximately $12,000 at Brighton Crest. In addition, The Fairway replaced all
of the tenant mailboxes and planted trees at a cost of approximately $20,000 and
replaced countertops in several of the apartment units totalling approximately
$16,000. The increase in property taxes for the three and nine months ended
September 30, 1995, was due to penalties related to 1994 past due taxes at
Brighton Crest which were under appeal. The appeal was denied during 1995. The
loss on disposal of property related to roof replacements at The Fairway.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expense. As part of this plan, the Managing General Partner attempts to protect
the Partnership from the burden of inflation-related increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due
to changing market conditions, which can result in the use of rental concessions
and rental reductions to offset softening market conditions, there is no
guarantee that the Managing General Partner will be able to sustain such a plan.
The Partnership had unrestricted cash of $1,105,100 at September 30, 1995, as
compared to unrestricted cash of $1,709,913 at September 30, 1994. Net cash
provided by operating activities remained stable for the period ended September
30, 1995, due to decreases in accounts receivable and accrued taxes offset by
increases in accounts payable and accrued other liabilities. Net cash used in
investing activities increased due to increased property improvements and
replacements in combination with reduced receipts from restricted escrows. Net
cash used in financing activities increased primarily due to increased
distributions to partners.
The sufficiency of existing liquid assets to meet future liquidity and
capital expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership. Such assets are currently thought
to be sufficient for any near-term needs of the Partnership. The mortgage
indebtedness of $12,359,811, net of discount, is amortized over 21.42 years to
28.67 years with balloon payments due in 2002 and 2003 at which time the
individual properties will either be refinanced or sold. Future cash
distributions will depend on the levels of net cash generated from operations,
property sales and the availability of cash reserves. Cash distributions of
$1,388,461 to the partners and $175,000 to the minority interest holder were
paid during the nine months ended September 30, 1995.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K:
None filed during the quarter ended September 30, 1995.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DAVIDSON GROWTH PLUS L.P.
BY: Davidson Diversified Properties, Inc.,
Managing General Partner
By: /s/Carroll D. Vinson
Carroll D. Vinson
President
By: /s/Robert D. Long, Jr.
Robert D. Long, Jr.
Controller and Principal
Accounting Officer
Date: November 7, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Davidson
Growth Plus L.P. 1995 Third Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB.
</LEGEND>
<CIK> 0000795757
<NAME> DAVIDSON GROWTH PLUS L.P.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,105,100
<SECURITIES> 0
<RECEIVABLES> 6,592
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,597,265
<PP&E> 23,295,487
<DEPRECIATION> 7,443,172
<TOTAL-ASSETS> 18,449,580
<CURRENT-LIABILITIES> 827,693
<BONDS> 12,359,811
<COMMON> 0
0
0
<OTHER-SE> 4,786,865
<TOTAL-LIABILITY-AND-EQUITY> 18,449,580
<SALES> 0
<TOTAL-REVENUES> 3,703,151
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,397,050
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 818,452
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 258,380
<EPS-PRIMARY> 8.83
<EPS-DILUTED> 0
</TABLE>
