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
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EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1995
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-16717
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OUTLET CENTRE PARTNERS
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(Exact name of registrant as specified in its charter)
Illinois 36-3498737
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Balcor Plaza
4849 Golf Road, Skokie, Illinois 60077-9894
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 677-2900
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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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OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
ASSETS
1995 1994
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Cash and cash equivalents $ 1,707,655 $ 1,819,294
Accounts and accrued interest receivable 58,613 74,981
Escrow deposits 945,850 929,674
Deferred expenses, net of accumulated
amortization of $62,344 in 1995 and
$41,563 in 1994 353,281 374,062
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3,065,399 3,198,011
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Investment in real estate at cost:
Land 2,871,183 2,871,183
Buildings and improvements 27,299,367 27,299,367
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30,170,550 30,170,550
Less accumulated depreciation 9,545,268 9,225,265
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Investment in real estate, net of
accumulated depreciation 20,625,282 20,945,285
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$ 23,690,681 $ 24,143,296
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LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 167,093 $ 204,154
Due to affiliates 58,338 47,693
Accrued real estate taxes 403,128 545,840
Security deposits 50,802 49,302
Mortgage note payable 12,662,646 12,692,502
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Total liabilities 13,342,007 13,539,491
Partners' capital (30,000 Limited Partnership
Interests issued and outstanding) 10,348,674 10,603,805
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$ 23,690,681 $ 24,143,296
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The accompanying notes are an integral part of the financial statements.
<PAGE>
OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1995 and 1994
(Unaudited)
1995 1994
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Income:
Rental $ 741,655 $ 780,572
Service 538,331 547,359
Interest on short-term investments 30,297 9,419
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Total income 1,310,283 1,337,350
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Expenses:
Interest on mortgage note payable 321,504 277,239
Depreciation 320,003 306,771
Amortization 20,781 18,572
Property operating 657,727 632,077
Real estate taxes 136,460 179,776
Property management fees 65,132 54,742
Administrative 43,807 75,226
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Total expenses 1,565,414 1,544,403
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Net loss $ (255,131) $ (207,053)
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Net loss allocated to General Partner $ (2,551) $ (2,071)
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Net loss allocated to Limited Partners $ (252,580) $ (204,982)
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Net loss per Limited Partnership
Interest (30,000 issued and outstanding) $ (8.42) $ (6.83)
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The accompanying notes are an integral part of the financial statements.
<PAGE>
OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1995 and 1994
(Unaudited)
1995 1994
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Operating activities:
Net loss $ (255,131) $ (207,053)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation of property 320,003 306,771
Amortization of deferred expenses 20,781 18,572
Net change in:
Accounts and accrued interest
receivable 16,368 (16,276)
Escrow deposits (16,176)
Accounts payable (37,061) (196,224)
Due to affiliates 10,645 48,135
Accrued real estate taxes (142,712) (186,452)
Security deposits 1,500
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Net cash used in operating activities (81,783) (232,527)
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Investing activity:
Improvements to property (84,700)
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Cash used in investing activity (84,700)
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Financing activity:
Principal payments on mortgage note payable (29,856) (35,961)
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Cash used in financing activity (29,856) (35,961)
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Net change in cash and cash equivalents (111,639) (353,188)
Cash and cash equivalents at beginning of year 1,819,294 1,308,812
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Cash and cash equivalents at end of period $ 1,707,655 $ 955,624
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The accompanying notes are an integral part of the financial statements.
<PAGE>
OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the quarter ended March 31,
1995, and all such adjustments are of a normal and recurring nature.
2. Interest Expense:
During the quarters ended March 31, 1995 and 1994, the Partnership incurred and
paid interest expense on the mortgage note payable of $321,504 and $277,239,
respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1995 are:
Paid Payable
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Reimbursement of expenses to
the General Partner, at cost None $58,338
<PAGE>
OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Outlet Centre Partners (the "Partnership") was formed in 1987 and owns and
operates the Factory Outlet Centre (the "Centre") located in Bristol,
Wisconsin. The Partnership raised $30,000,000 through the sale of Limited
Partnership Interests and utilized these proceeds to acquire the Centre.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1994 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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Due primarily to slightly decreased property operations at the Centre and
increased interest expense due to the 1994 refinancing of the mortgage loan,
the Partnership's net loss increased during the quarter ended March 31, 1995 as
compared to the same period in 1994. Further discussion of the Partnership's
operations is summarized below.
1995 Compared to 1994
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As a result of higher interest rates and higher average cash balances, interest
on short-term investments increased during the quarter ended March 31, 1995 as
compared to the same period in 1994.
As a result of an increase in the principal balance and a higher interest rate
on the Centre's mortgage loan due to the June 1994 refinancing, interest
expense on mortgage note payable increased during the quarter ended March 31,
1995 as compared to the same period in 1994.
A lower assessed value levied by the local taxing authority resulted in a
decrease in real estate taxes during the quarter ended March 31, 1995 as
compared to the same period in 1994.
Property management fees are incurred as a percentage of rental and certain
service collections. Due to the timing of the receipt of rental and service
income, property management fees increased during the quarter ended March 31,
1995 as compared to the same period in 1994.
As a result of portfolio management costs incurred in connection with the June
1994 refinancing as well as lower investor communication and accounting
expenses in 1995, administrative expenses decreased during the quarter ended
March 31, 1995 as compared to the same period in 1994.
<PAGE>
Liquidity and Capital Resources
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The cash position of the Partnership decreased as of March 31, 1995 when
compared to December 31, 1994. The cash flow used in the Partnership's
operating activities reflects operations of the Centre, which included a semi-
annual real estate tax payment, plus interest income generated by short-term
investments, offset by administrative expenses of the Partnership. The
financing activity consisted of principal payments on the mortgage note
payable.
The August 1991 opening of the 2.4 million square foot Gurnee Mills outlet
center in Gurnee, Illinois, resulted in additional competition for the Centre.
At the present time, the General Partner's goal is to improve cash flow and
rebuild Partnership cash reserves before reinstating distributions to Limited
Partners. To date, investors have received distributions of Net Cash Receipts
of $266.315 and Net Cash Proceeds of $263.08, totaling $529.395 per $1,000
Interest.
As of March 31, 1995, the occupancy rate at the Centre was 89%, and during the
quarters ended March 31, 1995 and 1994, the Centre generated positive cash
flow, which is defined as an amount equal to the property's revenue receipts
less property related expenses, which include debt service payments.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits:
(4) Form of Subscription Agreement previously filed as Exhibit No. 4.1 to
Amendment No. 1 to the Registrant's Registration Statement on Form S-11 dated
April 2, 1987 (Registration No. 33-13097) and Form of Confirmation regarding
Interests in the Partnership set forth as Exhibit 4.2 to the Registrant's
Report on Form 10-Q for the quarter ended June 30, 1992 (Commission File No.
0-16717) are incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for the three month period
ending March 31, 1995 is attached hereto.
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter
ended March 31, 1995.
<PAGE>
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.
OUTLET CENTRE PARTNERS
By: /s/Thomas E. Meador
-----------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Partners-XXII, the General Partner
By: /s/Brian Parker
------------------------------
Brian Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Partners-XXII, the
General Partner
Date: May 12, 1995
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<PAGE>
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<PERIOD-END> MAR-31-1995
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<OTHER-SE> 10349
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