UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-1668
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 95-4098476
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) identification No.)
3 World Financial Center, 29th Floor, New York, NY 10285
- - - - - - -------------------------------------------------- ------
(Address of principal executive offices) (Zip code)
(212) 526-3237
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(Registrant's telephone number, including area code)
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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Balance Sheets
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March 31, December 31,
Assets 1995 1994
Property and equipment:
Land $ 8,379,434 $ 8,379,434
Building and improvements 41,260,171 40,944,262
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49,639,605 49,323,696
Less accumulated depreciation (10,959,111) (10,527,620)
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38,680,494 38,796,076
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Restricted cash 539,620 289,853
Cash and cash equivalents 1,119,086 1,250,842
Accounts receivable 41,571 40,580
Prepaid expenses, net of accumulated
amortization of $156,681 in 1995 and
$139,590 in 1994 281,851 321,156
Other assets, net of accumulated
amortization of $200,503 in 1995 and
$192,984 in 1994 100,252 107,771
Deferred rent receivable 478,515 490,304
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Total Assets $41,241,389 $41,296,582
========== ==========
Liabilities and Partners' Capital (Deficit)
Liabilities:
Accounts payable and accrued expenses $ 422,772 $ 215,024
Due to affiliates 338,035 351,446
Security deposits payable 182,257 179,800
Secured note payable 14,308,073 14,361,692
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Total Liabilities 15,251,137 15,107,962
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Partners' Capital (Deficit):
General Partner (206,331) (206,331)
Limited Partners 26,196,583 26,394,951
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Total Partners' Capital 25,990,252 26,188,620
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Total Liabilities and Partners' Capital $41,241,389 $41,296,582
========== ==========
See accompanying notes to the financial statements.
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Statements of Operations
For the three months ended March 31, 1995 and 1994
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Income 1995 1994
- - - - - - ------------ --------- ---------
Rental $ 979,301 $ 992,550
Interest 24,552 10,176
Other -- 2,802
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Total Income 1,003,853 1,005,528
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Expenses
- - - - - - ------------
Depreciation and amortization 456,101 468,252
Property operating 434,415 431,708
Interest 277,913 281,900
General and administrative 33,792 55,362
Bad debt -- 4,024
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Total Expenses 1,202,221 1,241,246
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Net Loss $ (198,368) $ (235,718)
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Net Loss Allocated:
To the General Partner $ -- $ --
To the Limited Partners (198,368) (235,718)
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$ (198,368) $ (235,718)
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Per limited partnership unit
(5,540,000 outstanding) $(.04) $(.04)
========= =========
See accompanying notes to the financial statements.
----------------------------------------
Statement of Partners' Capital (Deficit)
For the three months ended March 31, 1995
-----------------------------------------
Limited General
Partners Partner Total
---------- -------- ----------
Balance at December 31, 1994 $26,394,951 $(206,331) $26,188,620
Net loss (198,368) -- (198,368)
---------- -------- ----------
Balance at March 31, 1995 $26,196,583 $(206,331) $25,990,252
========== ======== ==========
See accompanying notes to the financial statements.
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Statements of Cash Flows
For the three months ended March 31, 1995 and 1994
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Cash Flows from Operating Activities: 1995 1994
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Net loss $ (198,368) $ (235,718)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 456,101 468,252
Provision for losses on rent receivable -- 4,024
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Restricted cash - operating (249,767) (119,896)
Accounts receivable (991) (36,137)
Prepaid expenses 22,214 33,403
Deferred rent receivable 11,789 2,963
Accounts payable and accrued expenses 146,165 86,815
Due to affiliates (13,411) (201)
Security deposits payable 2,457 2,041
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Net cash provided by operating activities 176,189 205,546
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Cash Flows from Investing Activities:
Additions to real estate assets (315,909) (33,040)
Accounts payable - real estate assets 61,583 --
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Net cash used for investing activities (254,326) (33,040)
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Cash Flows from Financing Activities:
Payments of principal on note payable (53,619) (49,633)
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Net cash used for financing activities (53,619) (49,633)
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Net increase (decrease) in cash and cash equivalents (131,756) 122,873
Cash and cash equivalents at beginning of period 1,250,842 1,078,390
--------- ---------
Cash and cash equivalents at end of period $1,119,086 $1,201,263
========= =========
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ 277,913 $ 281,900
========= =========
See accompanying notes to the financial statements.
---------------------------------
Notes to the Financial Statements
---------------------------------
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1994 audited financial statements within Form 10-K.
The unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of March 31, 1995 and the results of operations and cash flows for
the three months ended March 31, 1995 and 1994 and statement of changes in
partners' capital (deficit) for the three months ended March 31, 1995. Results
of operations for the period are not necessarily indicative of the results to
be expected for the full year.
No significant events have occurred subsequent to fiscal year 1994, and no
material contingencies exist, which would require disclosure in this interim
report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
-----------------------------------------------------
Part I, Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
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Liquidity and Capital Resources
- - - - - - -------------------------------
At March 31, 1995, the Partnership had cash and cash equivalents of $1,119,086,
compared with $1,250,842 at December 31, 1994. The decrease is attributable to
expenditures for building and tenant improvements and principal payments on the
note payable exceeding net cash from operations. At March 31, 1995, the
Partnership had restricted cash reserves, comprised of security deposits and
insurance and real estate tax escrows, of $539,620 compared with $289,853 at
December 31, 1994. The increase is attributable to the Partnership's monthly
funding of insurance and real estate tax escrows. The required semi-annual
real estate tax payment was due and paid April 10, 1995.
As of March 31, 1995, prepaid expenses declined to $281,851 from $321,156 at
December 31, 1994. The decrease is primarily attributable to the amortization
of prepaid insurance and prepaid leasing commissions, partially offset by
additional leasing commissions paid during the first quarter of 1995.
Accounts payable and accrued expenses increased from $215,024 at December 31,
1994 to $422,772 at March 31, 1995. The increase is primarily due to the
accrual of real estate taxes and payables relating to building and tenant
improvements.
The General Partner executed two new leases during the quarter totalling 2,668
square feet. However, a tenant representing 1,922 square feet left upon
expiration of its lease in March 1995. As a result, the Property was 69%
occupied at March 31, 1995, compared to 68% at year-end 1994.
In order to lease vacant space at the Property, the Partnership must pay
leasing commissions and tenant improvement costs associated with new leases.
The amount of such costs remains uncertain at this time and will depend upon
the amount of space leased and the extent of required tenant improvements. The
General Partner intends to fund such costs from net cash flow from operations
and Partnership cash reserves, to the extent possible. If necessary, the
General Partner will seek additional borrowings.
Results of Operations
- - - - - - ---------------------
For the three months ended March 31, 1995 and 1994, Partnership operations
resulted in net losses of $198,368 and $235,718, respectively. The decrease in
net loss is primarily due to lower general and administrative expenses.
Rental income for the three months ended March 31, 1995 totalled $979,301,
relatively unchanged from $992,550 for the corresponding period in 1994.
Interest income totalled $24,552 for the three months ended March 31, 1995,
compared with $10,176 for the corresponding period in 1994. The increase is
attributable to higher rates of interest earned on the Partnership's cash
balances in the first quarter 1995 compared with the first quarter 1994.
Property operating expenses were $434,415 for the three months ended March 31,
1995, largely unchanged from $431,708 for the corresponding period in 1994.
The slight increase is primarily due to higher advertising and insurance
expenses in 1995 partially offset by lower contract services and utility
expenses.
General and administrative services decreased from $55,362 for the period ended
March 31, 1994 to $33,792 for the period ended March 31, 1995. The $21,570
decrease primarily resulted from lower partnership servicing fees for
accounting, investor reporting and tax preparation.
PART II OTHER INFORMATION
Items 1-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - No reports on Form 8-K
were filed during the quarter ended March 31, 1995.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Partnership has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.
BY: MEDICAL OFFICE PROPERTIES INC.
General Partner
Date: May 12, 1995 BY: /s/Rocco Andriola
Director, President and Chief
Financial Officer
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