SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1995 Commission File Number 0-16848
SOUTHEASTERN INCOME PROPERTIES LIMITED PARTNERSHIP
Virginia 54-1350850
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One International Place, Boston, MA 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 330-8600
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_________
<PAGE>
BALANCE SHEETS
<TABLE>
June 30, December 31,
1995 1994
(Unaudited) (Audited)
ASSETS
<S> <C> <C>
Investment in rental property
Land $ 1,817,097 $ 1,817,097
Buildings and building improvements 18,641,273 18,559,530
Personal property 3,466,828 3,433,316
------------ ------------
23,925,198 23,809,943
Less accumulated depreciation 9,744,292 9,351,107
------------ ------------
14,180,906 14,458,836
------------ ------------
Cash 467,135 248,928
Tenant security deposits 143,426 131,230
Loan costs, net of accumulated amortization
of $235,172 and $213,447 68,975 90,700
Other assets 638,104 545,147
------------ ------------
1,317,640 1,016,005
------------ ------------
$ 15,498,546 $ 15,474,841
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities applicable to investment in rental property
Mortgages payable $ 8,094,559 $ 8,118,227
Other liabilities
Accounts payable 21,464 54,712
Accrued interest payable 66,020 66,020
Rents received in advance 14,444 18,222
Tenant security deposits 134,487 146,769
Other liabilities 206,694 195,345
----------- -----------
Total liabilities 8,537,668 8,599,295
Partners' Capital
Limited Partners unit holders' 50,000 Units
authorized and outstanding 7,477,936 7,412,475
Special Limited Partner (479,394) (497,906)
General Partner (37,664) (39,023)
----------- -----------
Total Partners' Capital 6,960,878 6,875,546
----------- -----------
Total liabilities and partners' capital $15,498,546 $15,474,841
=========== ===========
See notes to Financial Statements.
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
STATEMENTS OF OPERATIONS
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Income
Rental $ 992,442 $ 905,592 $ 1,949,604 $ 1,763,106
Interest income 5,681 1,083 7,210 2,039
Other income 50,945 51,721 105,155 94,171
----------- ----------- ----------- -----------
1,049,068 958,396 2,061,969 1,859,316
----------- ----------- ----------- -----------
Expenses
Leasing 26,060 30,983 53,678 67,336
General and administrative 68,053 62,645 131,754 122,419
Management fees 41,920 37,347 100,557 90,546
Utilities 69,124 72,007 179,092 172,462
Repairs and maintenance 197,745 200,356 363,790 401,680
Insurance 44,617 38,515 88,417 78,233
Taxes 72,515 85,958 151,528 174,815
----------- ----------- ----------- -----------
Total Operating Expenses 520,034 527,811 1,068,816 1,107,491
Other Expenses
Partnership expenses 24,791 39,914 54,108 74,783
Interest expense 194,008 195,097 388,298 390,451
Depreciation and amortization 209,873 204,907 414,910 399,972
----------- ----------- ----------- ----------
Total Expenses 948,706 967,729 1,926,132 1,972,697
----------- ----------- ----------- ----------
Net income (loss) $ 100,362 $ (9,333) $ 135,837 $ (113,381)
=========== ============ ============ ===========
Net income (loss) allocated to
General Partner $ 1,003 $ (93) $ 1,359 $ (1,134)
============= ============= ============= ============
Net income (loss) allocated to
Limited Partner Unit Holders $ 85,308 $ (9,240) $ 115,461 $ (112,247)
============ ============ ============ ===========
Net income allocated to Special
Limited Partner $ 14,051 $ 0 $ 19,017 $ 0
============ ============= ============= ==============
Net income (loss) allocated to each
unit L.P. $ 1.71 $ (0.18) $ 2.31 $ (2.24)
============= ============ ============== =============
See notes to Financial Statements.
</TABLE>
<PAGE>
STATEMENTS OF CASH FLOWS
<TABLE>
For the Six Months Ended
June 30, 1995 and 1994 (Unaudited) 1995 1994
Cash flow from operating activities:
<S> <C> <C>
Net income (loss) $ 135,837 $ (113,381)
Adjustments to reconcile net loss to
net cash provided by (used in) operating activities:
Depreciation and amortization 414,910 399,972
Changes in assets and liabilities:
Increase in security deposits cash (12,196) (18,169)
Increase in other assets (92,957) (70)
Decrease in accounts payable (33,248) (107,317)
Decrease in prepaid rent (3,778) -
(Decrease) increase in tenant security deposits (12,282) 13,929
Increase (decrease) in other liabilities 11,349 (34,628)
---------- ----------
Net cash provided by operating activities 407,635 140,336
---------- ----------
Cash flow from investing activities:
Additions to buildings and improvements (115,255) (169,218)
---------- ----------
Net cash used in investing activities (115,255) (169,218)
---------- ----------
Cash flow from financing activities:
Principal payments on mortgage note (23,668) (21,516)
Cash distributions paid to partners (50,505) -
---------- -------
Net cash used in financing activities (74,173) (21,516)
---------- ----------
Net increase (decrease) in cash 218,207 (50,398)
Cash, beginning of period 248,928 163,869
---------- ----------
Cash, end of period $ 467,135 $ 113,471
========== ==========
Supplemental disclosure of cash flow information
Cash paid during the year for interest $ 388,298 $ 390,451
========== ==========
See notes to Financial Statements.
</TABLE>
<PAGE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
Units of
For the Six Months Ended Limited Special Limited
June 30, 1995 and 1994 Partnership General Limited Partner/
(Unaudited) Interest Partner Partner Unitholder Total
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1994 50,000 $ (39,023) $ (497,906) $ 7,412,475 $ 6,875,546
Net income - 1,359 19,017 115,461 135,837
Distributions - - (505) (50,000) (50,505)
-------- ---------- ----------- ----------- -----------
Balance, June 30, 1995 50,000 $ (37,664) $ (479,394) $ 7,477,936 $ 6,960,878
======== ========== =========== =========== ===========
Balance, December 31, 1993 50,000 $ (38,592) $ (491,870) $ 7,449,127 $ 6,918,665
Net loss - (1,134) - (112,247) (113,381)
-------- --------- ----------- ----------- -----------
Balance, June 30, 1994 50,000 $ (39,726) $ (491,870) $ 7,336,880 $ 6,805,284
======== ========= =========== =========== ===========
See notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1995
(Unaudited)
1. ORGANIZATION
Southeastern Income Properties Limited Partnership (the "Partnership")
was organized under the Virginia Uniform Limited Partnership Act on November 21,
1985 for the purpose of acquiring, owning, operating, and ultimately selling
residential apartment complexes located primarily in the southeastern United
States. The original general partner of the Partnership was K-A Southeastern
Income Properties Limited Partnership, a Virginia Limited Partnership (the
"Original General Partner"). The general partners of the Original General
Partner are Glade M. Knight, Ben T. Austin, III and Southeast Real Properties
Corporation.
On February 12, 1992, Winthrop Southeast Limited Partnership, a Delaware
limited partnership ("WSLP") was admitted as the general partner of the
Partnership, while the Original General Partner's interest in the Partnership
was converted to a special limited partnership interest. The general partner of
WSLP is Eight Winthrop Properties, Inc. ("Eight Winthrop"), a Delaware
corporation, which is wholly-owned by First Winthrop Corporation, a Delaware
corporation, which in turn is wholly-owned by Winthrop Financial Associates, A
Limited Partnership, a Maryland limited partnership ("WFA").
The Partnership was initially capitalized with contributions of $100
from the Original General Partner and $100 from SIP Assignor Corporation, a
Virginia corporation (the "Assignor Limited Partner"). On September 26, 1986,
the Partnership filed a Registration Statement on Form S-11 (Registration No.
33-9085, the "Registration Statement") with the Securities and Exchange
Commission (the "Commission") with respect to the public offering of assignee
units of limited partnership interest ("Units") in the Partnership. The
Registration Statement, covering the offering of 50,000 Units at a purchase
price of $500 per Unit (an aggregate of $25,000,000) was declared effective on
January 7, 1987. The offering concluded on June 29, 1987, at which time all
50,000 Units had been sold to investor limited partners (the "Limited
Partners").
The Partnership's only business is acquiring, owning, operating and
ultimately selling residential apartment complexes. The Partnership's investment
objectives and policies are described on Pages 31-38 under the caption
"Investment Objective and Policies" of the Registrant's Prospectus dated January
7, 1987 as filed pursuant to Rule 424(b) on January 12, 1987 (the "Prospectus"),
which description is incorporated herein by this reference. Although WSLP does
not intend to change the business or the investment objectives of the
Partnership, based upon such factors as market conditions, the level of
refinancing debt in place with respect to the properties and the cost of the
capital improvements and maintenance necessary to keep the properties
competitive in their markets, WSLP may conclude that the interests of the
Limited Partners would be best served by holding the properties for a longer
term than was initially anticipated. If the liquidation of the Partnership is
delayed, the Limited Partners will not have the opportunity to receive the
return of their investment at the time they may have originally anticipated.
The Partnership invested $20,593,101 of the original offering proceeds
(net of sales commissions and sales and organization costs, but including
acquisition fees and expenses) in four residential properties. All four
properties were acquired by the Partnership directly. Two of the properties were
acquired prior to the completion of the public offering of the Units, while the
other two were acquired subsequent to the offering.
2. ACCOUNTING AND FINANCIAL REPORT POLICIES
The condensed consolidated financial statements included herein have
been prepared by the Registrant, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. The Registrant's
accounting and financial reporting policies are in conformity with generally
accepted accounting principles and include adjustments in interim periods
considered necessary for a fair presentation of the results of operations.
Certain information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. It is suggested that these consolidated financial statements be
read in conjunction with the consolidated financial statements and notes thereto
included in the Registrant's latest annual report on Form 10-K.
<PAGE>
2. ACCOUNTING AND FINANCIAL REPORT POLICIES - Continued
The accompanying consolidated financial statements reflect the
Partnership's results of operations for an interim period and are not
necessarily indicative of the results of operations for the year ending December
31, 1995.
3. TAXABLE INCOME
The Partnership's results of operations on a tax basis are expected to
differ from the net income for financial reporting purposes primarily due to the
accounting differences in the recognition of depreciation and amortization.
4. RELATED PARTY TRANSACTIONS
Property management fees paid or accrued by the Partnership to Winthrop
Management, an affiliate of the General Partners, totalled $41,920 during the
three months ended June 30, 1995.
<PAGE>
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Partnership generated net income of $100,362 for the quarter ended June 30,
1995 versus a loss of $9,333 for the comparable period in 1994. For the six
months ended June 30, 1995, the Partnership generated net income of $135,837
compared to a net loss of $113,381 for the six months ended June 30, 1994. As a
result of the Partnership's improved operating results, the Partnership resumed
making cash distributions to limited partners. The cash distribution amounted to
$50,000 in the aggregate, or $1.00 per investment unit.
The Partnership's income increased by 9.5% for the second quarter of 1995
compared to the second quarter of 1994 and increased 10.9% for the six months
ended June 30, 1995 compared to the same period in 1994. The increase is
primarily attributable to a 10.6% increase in rental income for the year to
date. On an aggregate basis, average rents at the Partnership's four properties
have increased by 4.3% since the first six months of 1994. In addition, overall
average occupancy has increased from 89% to 94%. The most significant
improvement in occupancy occurred at Forestbrook Apartments, where occupancy
averaged 94% in the first six months of 1995 compared to an 82% average during
the same period last year.
At the same time, direct operating costs of the Partnership's properties
declined by 3.5% for the first six months of 1995, primarily as a result of a
decrease in repair and maintenance expenses and lower real estate taxes at
Pelham Ridge and Forestbrook. The Partnership's other expenses, including
interest expense, depreciation and amortization remained relatively constant.
The markets in which the properties are located are currently stable. The
Partnership continues to make capital improvements to the properties to enhance
their competitiveness within their local markets. The Partnership spent $115,255
on capital improvements during the first half of 1995 compared to $169,218 in
the first half of 1994. At two of the properties (Forestbrook and Sterlingwood),
a portion of the capital improvements is funded by replacement reserves held by
the mortgage lenders, with the balance being funded from operations. The balance
of these replacement reserves was $428,852 at June 30, 1995. Capital
improvements from the other two properties are funded entirely from operations.
The results of operations in future quarters may differ from the results of
operations for the quarter ended June 30, 1995, due to inflation and changing
economic conditions which could affect occupancy levels, rental rates and
operating expenses.
<PAGE>
PART II - OTHER INFORMATION
All items are inapplicable.
SIGNATURE
Pursuant to 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.
SOUTHEASTERN INCOME PROPERTIES
LIMITED PARTNERSHIP
By: Winthrop Southeastern Limited Partnership
Its General Partner
By: Eight Winthrop Properties, Inc.
Its General Partner
Date: August 11, 1995 By: /s/Richard J. McCready
Richard J. McCready
Chief Operating Officer
Date: August 11, 1995 By: /s/Thomas C. Staples
Thomas C. Staples
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from unaudited financial statements for the
six month period ending June 30, 1995 and is
qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000802969
<NAME> Southeastern Income Properties L
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1.00000
<CASH> 467,135
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 850,505
<PP&E> 23,925,198
<DEPRECIATION> 9,744,292
<TOTAL-ASSETS> 15,498,546
<CURRENT-LIABILITIES> 443,109
<BONDS> 8,094,559
<COMMON> 0
0
0
<OTHER-SE> 6,960,878
<TOTAL-LIABILITY-AND-EQUITY> 15,498,546
<SALES> 0
<TOTAL-REVENUES> 2,061,969
<CGS> 0
<TOTAL-COSTS> 1,068,816
<OTHER-EXPENSES> 469,018
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 388,298
<INCOME-PRETAX> 135,837
<INCOME-TAX> 0
<INCOME-CONTINUING> 135,837
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 135,837
<EPS-PRIMARY> 2.310
<EPS-DILUTED> 0.000
</TABLE>
