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 September 30, 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
2355 Waukegan Rd., Bannockburn, Illinois 60015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 267-1600
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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
September 30, 1995 and December 31, 1994
(Unaudited)
ASSETS
1995 1994
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Cash and cash equivalents $ 1,962,755 $ 1,819,294
Accounts and accrued interest receivable 210,194 74,981
Escrow deposits 961,250 929,674
Prepaid expenses 56,760
Deferred expenses, net of accumulated
amortization of $103,907 in 1995 and
$41,563 in 1994 311,718 374,062
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3,502,677 3,198,011
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Investment in real estate at cost:
Land 2,871,183 2,871,183
Buildings and improvements 27,299,367 27,299,367
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30,170,550 30,170,550
Less accumulated depreciation 10,147,884 9,225,265
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Investment in real estate, net of
accumulated depreciation 20,022,666 20,945,285
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$ 23,525,343 $ 24,143,296
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LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 168,175 $ 204,154
Due to affiliates 15,263 47,693
Accrued real estate taxes 408,811 545,840
Security deposits 48,502 49,302
Mortgage note payable 12,600,625 12,692,502
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Total liabilities 13,241,376 13,539,491
Partners' capital (30,000 Limited Partnership
Interests issued and outstanding) 10,283,967 10,603,805
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$ 23,525,343 $ 24,143,296
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The accompanying notes are an integral part of the financial statements.
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OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the nine months ended September 30, 1995 and 1994
(Unaudited)
1995 1994
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Income:
Rental $ 2,249,667 $ 2,304,056
Service 1,705,356 1,736,281
Interest on short-term investments 76,938 35,978
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Total income 4,031,961 4,076,315
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Expenses:
Interest on mortgage note payable 962,203 901,022
Depreciation 922,619 920,314
Amortization 62,344 64,113
Property operating 1,643,803 1,454,558
Real estate taxes 408,811 538,533
Property management fees 187,681 181,992
Administrative 164,338 234,118
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Total expenses 4,351,799 4,294,650
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Net loss $ (319,838) $ (218,335)
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Net loss allocated to General Partner $ (3,198) $ (2,183)
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Net loss allocated to Limited Partners $ (316,640) $ (216,152)
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Net loss per Limited Partnership
Interest (30,000 issued and outstanding) $ (10.55) $ (7.20)
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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 September 30, 1995 and 1994
(Unaudited)
1995 1994
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Income:
Rental $ 759,742 $ 767,113
Service 550,726 510,740
Interest on short-term investments 21,831 13,688
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Total income 1,332,299 1,291,541
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Expenses:
Interest on mortgage note payable 319,958 322,975
Depreciation 307,539 306,771
Amortization 20,782 20,781
Property operating 534,831 494,436
Real estate taxes 129,639 178,981
Property management fees 56,153 56,021
Administrative 49,657 54,650
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Total expenses 1,418,559 1,434,615
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Net loss $ (86,260) $ (143,074)
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Net loss allocated to General Partner $ (862) $ (1,430)
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Net loss allocated to Limited Partners $ (85,398) $ (141,644)
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Net loss per Limited Partnership
Interest (30,000 issued and outstanding) $ (2.84) $ (4.72)
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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 nine months ended September 30, 1995 and 1994
(Unaudited)
1995 1994
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Operating activities:
Net loss $ (319,838) $ (218,335)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation of property 922,619 920,314
Amortization of deferred expenses 62,344 64,113
Net change in:
Accounts and accrued interest
receivable (135,213) 61,073
Escrow deposits (31,576) (14,949)
Prepaid expenses (56,760)
Accounts payable (35,979) (191,522)
Due to affiliates (32,430) 30,923
Accrued real estate taxes (137,029) (180,569)
Security deposits (800) (16,968)
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Net cash provided by operating activities 235,338 454,080
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Investing activity:
Improvements to property (265,670)
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Net cash used in investing activity (265,670)
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Financing activities:
Proceeds from refinancing of
mortgage note payable 12,750,000
Repayment of mortgage note payable (11,468,631)
Principal payments on mortgage note payable (91,877) (103,640)
Funding of capital improvement escrows (903,175)
Payment of deferred expenses (415,625)
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Net cash used in financing activities (91,877) (141,071)
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Net change in cash and cash equivalents 143,461 47,339
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 $ 1,962,755 $ 1,356,151
============= ============
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:
Several reclassifications have been made to the previously reported 1994
statements to conform with the classifications used in 1995. These
reclassifications have not changed the 1994 results. In the opinion of
management, all adjustments necessary for a fair presentation have been made to
the accompanying statements for the nine months and quarter ended September 30,
1995, and all such adjustments are of a normal and recurring nature.
2. Interest Expense:
During the nine months ended September 30, 1995 and 1994, the Partnership
incurred and paid interest expense on the mortgage note payable of $962,203 and
$901,022 respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
nine months and quarter ended September 30, 1995 are:
Paid
-----------------------
Nine Months Quarter Payable
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Reimbursement of expenses to
the General Partner, at cost $97,880 $12,252 $15,263
4. Subsequent Event:
In October 1995, the Partnership reinstated quarterly distributions to Limited
Partners and paid $165,810 ($5.527 per Interest) to the holders of Limited
Partnership Interests for the third quarter of 1995.
<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") 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 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 nine months ended September 30,
1995 as compared to the same period in 1994. Lower real estate tax expense
partially offset the decrease in property operations and resulted in a decrease
in the net loss during the quarter ended September 30, 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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Unless otherwise noted, discussions of fluctuations between 1995 and 1994 refer
to both the nine months and quarters ended September 30, 1995 and 1994.
As a result of higher interest rates and higher average cash balances, interest
on short-term investments increased during 1995 when compared to 1994.
Expenditures for tenant improvements incurred in 1995 related to leasing
activity in late 1994 have caused an increase in property operating expense
during 1995 when compared to 1994.
A lower assessed value levied by the local taxing authority resulted in a
decrease in real estate taxes during 1995 when compared to 1994.
As a result of legal and other professional fees incurred in connection with
the June 1994 refinancing, administrative expenses decreased during 1995 when
compared to 1994.
Liquidity and Capital Resources
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The cash position of the Partnership increased as of September 30, 1995 when
compared to December 31, 1994. Cash was generated by the Centre's net
<PAGE>
operations and interest income earned on short-term investments. This increase
was partially offset by the payment of administrative expenses of the
Partnership.
As of September 30, 1995, the occupancy rate at the Centre was 85%, and during
the nine months ended September 30, 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.
In January 1994, quarterly distributions to Limited Partners were suspended in
order to provide the working capital necessary to complete the refinancing of
the Centre's mortgage note payable. With the completion of the refinancing in
June 1994 and the subsequent replenishing of cash reserves from operations, the
Partnership resumed quarterly distributions in October 1995 and paid $165,810
($5.527 per Interest) to the holders of Limited Partnership Interests for the
third quarter of 1995. Including the October 1995 distribution, investors have
received distributions of Net Cash Receipts of $271.84 and Net Cash Proceeds of
$263.08, totaling $534.92 per $1,000 Interest.
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 period ending September
30, 1995 is attached hereto.
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter
ended September 30, 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 D. Parker
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Brian D. Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Partners-XXII, the
General Partner
Date: November 10, 1995
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<PAGE>
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<PERIOD-END> SEP-30-1995
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<OTHER-SE> 10284
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<TOTAL-COSTS> 2240
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<LOSS-PROVISION> 0
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<INCOME-PRETAX> (320)
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<CHANGES> 0
<NET-INCOME> (320)
<EPS-PRIMARY> (10.55)
<EPS-DILUTED> (10.55)
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