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 June 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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<PAGE>
OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
BALANCE SHEETS
June 30, 1995 and December 31, 1994
(Unaudited)
ASSETS
1995 1994
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Cash and cash equivalents $ 1,969,095 $ 1,819,294
Accounts and accrued interest receivable 101,033 74,981
Escrow deposits 957,400 929,674
Prepaid expenses 81,086
Deferred expenses, net of accumulated
amortization of $83,125 in 1995 and
$41,563 in 1994 332,500 374,062
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3,441,114 3,198,011
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Investment in real estate at cost:
Land 2,871,183 2,871,183
Buildings and improvements 27,299,367 27,299,367
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30,170,550 30,170,550
Less accumulated depreciation 9,840,345 9,225,265
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Investment in real estate, net of
accumulated depreciation 20,330,205 20,945,285
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$ 23,771,319 $ 24,143,296
============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 167,640 $ 204,154
Due to affiliates 5,583 47,693
Accrued real estate taxes 545,840 545,840
Security deposits 50,002 49,302
Mortgage note payable 12,632,027 12,692,502
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Total liabilities 13,401,092 13,539,491
Partners' capital (30,000 Limited Partnership
Interests issued and outstanding) 10,370,227 10,603,805
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$ 23,771,319 $ 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 six months ended June 30, 1995 and 1994
(Unaudited)
1995 1994
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Income:
Rental $ 1,569,925 $ 1,549,080
Service 1,074,630 1,212,954
Interest on short-term investments 55,107 22,740
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Total income 2,699,662 2,784,774
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Expenses:
Interest on mortgage note payable 642,245 578,047
Depreciation 615,080 613,543
Amortization 41,562 43,332
Property operating 1,108,972 960,122
Real estate taxes 279,172 359,552
Property management fees 131,528 125,971
Administrative 114,681 179,468
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Total expenses 2,933,240 2,860,035
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Net loss $ (233,578) $ (75,261)
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Net loss allocated to General Partner $ (2,336) $ (753)
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Net loss allocated to Limited Partners $ (231,242) $ (74,508)
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Net loss per Limited Partnership
Interest (30,000 issued and outstanding) $ (7.71) $ (2.48)
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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 June 30, 1995 and 1994
(Unaudited)
1995 1994
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Income:
Rental $ 828,270 $ 768,508
Service 536,299 665,595
Interest on short-term investments 24,810 13,321
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Total income 1,389,379 1,447,424
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Expenses:
Interest on mortgage note payable 320,741 300,808
Depreciation 295,077 306,772
Amortization 20,781 24,760
Property operating 451,245 328,045
Real estate taxes 142,712 179,776
Property management fees 66,396 71,229
Administrative 70,874 104,242
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Total expenses 1,367,826 1,315,632
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Net income $ 21,553 $ 131,792
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Net income allocated to General Partner $ 215 $ 1,318
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Net income allocated to Limited Partners $ 21,338 $ 130,474
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Net income per Limited Partnership
Interest (30,000 issued and outstanding) $ 0.71 $ 4.35
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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 six months ended June 30, 1995 and 1994
(Unaudited)
1995 1994
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Operating activities:
Net loss $ (233,578) $ (75,261)
Adjustments to reconcile net loss to net
cash provided by or used in operating
activities:
Depreciation of property 615,080 613,543
Amortization of deferred expenses 41,562 43,332
Net change in:
Accounts and accrued interest
receivable (26,052) (124,198)
Escrow deposits (27,726) (367,822)
Prepaid expenses (81,086)
Accounts payable (36,514) (187,224)
Due to affiliates (42,110) 63,742
Accrued real estate taxes (6,676)
Security deposits 700 (2,034)
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Net cash provided by or used in operating
activities 210,276 (42,598)
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Investing activity:
Improvements to property (168,576)
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Net cash used in investing activity (168,576)
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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 (60,475) (75,254)
Funding of capital improvement escrows (891,625)
Payment of deferred expenses (415,625)
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Net cash used in financing activities (60,475) (101,135)
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Net change in cash and cash equivalents 149,801 (312,309)
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 $ 1,969,095 $ 996,503
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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 six months and quarter
ended June 30, 1995, and all such adjustments are of a normal and recurring
nature.
2. Interest Expense:
During the six months ended June 30, 1995 and 1994, the Partnership incurred
and paid interest expense on the mortgage note payable of $642,245 and $578,047
respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
six months and quarter ended June 30, 1995 are:
Paid
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Six Months Quarter Payable
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Reimbursement of expenses to
the General Partner, at cost $85,628 $85,628 $5,583
<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 six months ended June 30, 1995
and the net income decreased during the quarter ended June 30, 1995 as
compared to the same periods in 1994. Further discussion of the
Partnership's operations is summarized below.
1995 Compared to 1994
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The Partnership bills tenants on a monthly basis for common area
maintenance, advertising costs and other operating expenses of the Centre
based on estimates. Adjustments are periodically made to these billings
once the Partnership has determined the actual amounts due. The periodic
adjustment of billings, combined with a decrease in the amount billable for
real estate tax reimbursements as a result of the decrease in real estate
taxes described below, have resulted in a decrease in service income during
the six months and quarter ended June 30, 1995 as compared to the same
periods in 1994.
As a result of higher interest rates and higher average cash balances,
interest on short-term investments increased during the six months and
quarter ended June 30, 1995 as compared to the same periods 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 six months
and quarter ended June 30, 1995 as compared to the same periods in 1994.
Expenditures for tenant improvements related to leasing activity in late
1994 have caused an increase in property operating expense during the six
months and quarter ended June 30, 1995 as compared to the same periods in
1994.
<PAGE>
A lower assessed value levied by the local taxing authority resulted in a
decrease in real estate taxes during the six months and quarter ended June
30, 1995 as compared to the same periods in 1994.
As a result of portfolio management, accounting and other professional fees
incurred in connection with the June 1994 refinancing, administrative
expenses decreased during the six months and quarter ended June 30, 1995 as
compared to the same periods in 1994.
Liquidity and Capital Resources
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The cash position of the Partnership increased as of June 30, 1995 when
compared to December 31, 1994. The cash flow provided by the Partnership's
operating activities reflects operations of the Centre, plus interest
income generated by short-term investments, which are partially offset by
administrative expenses of the Partnership. The financing activity
consisted of principal payments on the mortgage note payable.
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 June 30, 1995, the occupancy rate at the Centre was 86%, and during
the six months ended June 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.
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 June
30, 1995 is attached hereto.
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the
quarter ended June 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
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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: August 8, 1995
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<PAGE>
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