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 March 31, 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>
March 31, December 31,
1995 1994
(Note 1) (Unaudited) (Audited)
- -------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Investment in rental property
Land $ 1,817,097 $ 1,817,097
Buildings and building improvements 18,589,357 18,559,530
Personal property 3,447,566 3,433,316
------------ ------------
23,854,020 23,809,943
Less accumulated depreciation 9,545,281 9,351,107
------------ ------------
14,308,739 14,458,836
------------ ------------
Cash 309,617 248,928
Tenant security deposits 138,349 131,230
Loan costs, net of accumulated amortization
of $224,310 and $213,447 79,837 90,700
Other assets 587,374 545,147
------------ ------------
1,115,177 1,016,005
------------ ------------
$ 15,423,916 $ 15,474,841
============ ============
</TABLE>
LIABILITIES AND PARTNERS' CAPITAL
<TABLE>
<S> <C> <C>
Liabilities applicable to investment in rental property $ 8,106,534 $ 8,118,227
Mortgages payable
Other liabilities
Accounts payable 56,815 54,712
Accrued interest payable 66,020 66,020
Rents received in advance 14,086 18,222
Tenant security deposits 129,756 146,769
Other liabilities 139,684 195,345
----------- -----------
Total liaibilities 8,512,895 8,599,295
Partners' Capital
Limited Partners unit holders' 50,000 Units
authorized and outstanding 7,442,629 7,412,475
Special Limited Partner (492,939) (497,906)
General Partner (38,669) (39,023)
----------- -----------
Total Partners' Capital 6,911,021 6,875,546
----------- -----------
Total liabilities and partners' capital $15,423,916 $15,474,841
=========== ===========
</TABLE>
See notes to Financial Statements.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
STATEMENTS OF OPERATIONS
<TABLE>
Three Months Ended March 31, 1995 and 1994
(Unaudited) (Note 1) 1995 1994
<S> <C> <C>
Income
Rental $ 957,162 $ 857,514
Interest income 1,529 956
Other income 54,210 42,450
----------- -----------
1,012,901 900,920
----------- -----------
Expenses
Leasing 27,618 36,353
General and administrative 63,701 59,774
Management fees 58,637 53,199
Utilities 109,968 100,455
Repairs and maintenance 166,045 201,324
Insurance 43,800 39,718
Taxes 79,013 88,857
----------- -----------
Total operating expenses 548,782 579,680
Other expenses
Partnership expenses 29,317 34,869
Interest expense 194,290 195,354
Depreciation and amortization 205,037 195,063
----------- -----------
977,426 1,004,966
Total expenses
Net income (loss) $ 35,475 $ (104,046)
========== ============
Net income (loss) allocated to General Partner $ 354 $ (1,040)
=========== =============
Net income (loss) allocated to Limited Partner unit holders' $ 30,154 $ (103,006)
=========== ============
Net income (loss) allocated to Special Limited Partner $ 4,967 $ -
=========== ============
Net income (loss) allocated to each unit $ .60 $ (2.06)
============ =============
Weighted average number of units outstanding 50,000 50,000
=========== ============
</TABLE>
See notes to Financial Statements.
<PAGE>
STATEMENTS OF CASH FLOWS
<TABLE>
For the Three Months Ended
March 31, 1995 and 1994 (Unaudited) 1995 1994
Cash flow from operating activities:
<S> <C> <C>
Net income (loss) $ 35,475 $(104,046)
Adjustments to reconcile net loss to
net cash provided by (used in) operating activities:
Depreciation and amortization 205,037 195,063
Changes in assets and liabilities:
Increase in security deposits cash (7,119) (7,783)
(Increase) decrease in other assets (42,227) 18,868
Increase (decrease) in accounts payable 2,103 (34,350)
Decrease in prepaid rent (4,136) -
(Decrease) increase in tenant security deposits (17,013) 6,856
Decrease in other liabilities (55,661) (99,430)
---------- ----------
Net cash provided by (used in) operating activities 116,459 (24,822)
---------- ----------
Cash flow from investing activities:
Additions to buildings and improvements (44,077) (50,866)
---------- ----------
Net cash used in investing activities (44,077) (50,866)
---------- ----------
Cash flow from financing activities:
Principal payments on mortgage note (11,693) (10,629)
---------- ----------
Net cash used in financing activities (11,693) (10,629)
---------- ----------
Net increase (decrease) in cash 60,689 (86,317)
Cash, beginning of period 248,928 163,869
---------- ----------
Cash, end of period $ 309,617 $ 77,552
========== ==========
Supplemental disclosure of cash flow information
Cash paid for interest $ 194,290 $ 195,354
========== ==========
</TABLE>
See notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
Units of
For the Three Months Ended Limited Special Limited
March 31, 1995 and 1994 Partnership General Limited Partner/
(Unaudited) (Note 1) 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 - 354 4,967 30,154 35,475
--------- ---------- ----------- ---------- ----------
Balance,
March 31, 1995 50,000 $ (38,669) $ (492,939) $7,442,629 $6,911,021
========= ========== =========== ========== ==========
Balance,
December 31, 1993 50,000 $ (38,592) $(491,870) $ 7,449,127 $ 6,918,665
Net loss - (1,040) - (103,006) (104,046)
---------- --------- --------- ----------- -----------
Balance,
March 31, 1994 50,000 $ (39,632) $(491,870) $ 7,346,121 $ 6,814,619
========== ========= ========= =========== ===========
</TABLE>
See notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 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 $58,637 during the
three months ended March 31, 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 $35,475 for the three months ended March
31, 1995, compared to a net loss of $104,046 for the three months ended March
31, 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 12.4% for the first quarter of 1995
compared to the first quarter of 1994, primarily as a result of an 11.6%
increase in rental income. On an aggregate basis, average rents at the
Partnership's four properties have increased by 3.1% since the first quarter of
1994. In addition, overall average occupancy has increased from 88% to 93%. The
most significant improvement in occupancy occurred at Forestbrook Apartments,
where occupancy averaged 94% in the first quarter of 1995 compared to an 81%
average during the same period last year.
At the same time, direct operating costs of the Partnership's properties
declined by 5.3%, primarily as a result of a decrease in repair and maintenance
expenses. 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 $44,077
on capital improvements during the first quarter of 1995 compared to $50,866 in
the first quarter 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 $407,642 at March 31,
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 March 31, 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: May 13, 1995 By: /s/ Jonathan W. Wexler
Jonathan W. Wexler
Chief Financial Officer
Date: May 13, 1995 By: /s/ Richard J. McCready
Richard J. McCready
Vice President
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from unaudited financial statements for the
three month period ending March 31, 1995 and is
qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000802969
<NAME> Southeastern Income Properties Ltd Partnership
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1.00000
<CASH> 309,617
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 805,560
<PP&E> 23,854,020
<DEPRECIATION> 9,545,281
<TOTAL-ASSETS> 15,423,916
<CURRENT-LIABILITIES> 406,361
<BONDS> 8,106,534
<COMMON> 0
0
0
<OTHER-SE> 6,911,021
<TOTAL-LIABILITY-AND-EQUITY> 15,423,916
<SALES> 0
<TOTAL-REVENUES> 1,012,901
<CGS> 0
<TOTAL-COSTS> 548,782
<OTHER-EXPENSES> 234,354
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 194,290
<INCOME-PRETAX> 35,475
<INCOME-TAX> 0
<INCOME-CONTINUING> 35,475
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,475
<EPS-PRIMARY> 0.600
<EPS-DILUTED> 0.000
</TABLE>
