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, 1996
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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 (847) 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
March 31, 1996 and December 31, 1995
(UNAUDITED)
ASSETS
1996 1995
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Cash and cash equivalents $ 2,251,650 $ 2,406,064
Accounts and accrued interest receivable 103,041 40,445
Escrow deposits 833,500 961,250
Prepaid expenses 8,109 33,798
Deferred expenses, net of accumulated
amortization of $145,469 in 1996 and
$124,688 in 1995 270,156 290,937
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3,466,456 3,732,494
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Investment in real estate:
Land 2,871,183 2,871,183
Buildings and improvements 27,565,202 27,565,202
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30,436,385 30,436,385
Less accumulated depreciation 10,878,440 10,548,272
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Investment in real estate, net of
accumulated depreciation 19,557,945 19,888,113
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$ 23,024,401 $ 23,620,607
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LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 126,068 $ 137,181
Due to affiliates 20,875 13,933
Accrued liabilities - principally
real estate taxes 416,891 618,892
Security deposits 47,419 48,119
Mortgage note payable 12,535,392 12,568,420
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Total liabilities 13,146,645 13,386,545
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Limited Partners' capital (30,000
Interests issued and outstanding) 11,034,768 11,389,169
General Partner's deficit (1,157,012) (1,155,107)
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Total partners' capital 9,877,756 10,234,062
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$ 23,024,401 $ 23,620,607
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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, 1996 and 1995
(UNAUDITED)
1996 1995
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Income:
Rental $ 841,713 $ 741,655
Service 523,333 538,331
Interest on short-term investments 29,255 30,297
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Total income 1,394,301 1,310,283
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Expenses:
Interest on mortgage note payable 318,332 321,504
Depreciation 330,168 320,003
Amortization 20,781 20,781
Property operating 672,817 657,727
Real estate taxes 140,987 136,460
Property management fees 64,362 65,132
Administrative 37,350 43,807
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Total expenses 1,584,797 1,565,414
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Net loss $ (190,496) $ (255,131)
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Net loss allocated to General Partner $ (1,905) $ (2,551)
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Net loss allocated to Limited Partners $ (188,591) $ (252,580)
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Net loss per Limited Partnership Interest
(30,000 issued and outstanding) $ (6.29) $ (8.42)
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Distribution to Limited Partners $ 165,810 None
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Distribution per Limited Partnership
Interest $ 5.527 None
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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, 1996 and 1995
(UNAUDITED)
1996 1995
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Operating activities:
Net loss $ (190,496) $ (255,131)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation of property 330,168 320,003
Amortization of deferred expenses 20,781 20,781
Net change in:
Accounts and accrued interest
receivable (62,596) 16,368
Escrow deposits (16,176)
Prepaid expenses 25,689
Accounts payable (11,113) (37,061)
Due to affiliates 6,942 10,645
Accrued liabilities (202,001) (142,712)
Security deposits (700) 1,500
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Net cash used in operating activities (83,326) (81,783)
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Financing activities:
Distribution to Limited Partners (165,810)
Principal payments on mortgage note
payable (33,028) (29,856)
Release of capital improvement escrow 127,750
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Net cash used in financing activities (71,088) (29,856)
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Net change in cash and cash equivalents (154,414) (111,639)
Cash and cash equivalents at beginning
of year 2,406,064 1,819,294
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Cash and cash equivalents at end of period $ 2,251,650 $ 1,707,655
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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,
1996, and all such adjustments are of a normal and recurring nature.
2. Interest Expense:
During the quarters ended March 31, 1996 and 1995, the Partnership incurred and
paid interest expense on the mortgage note payable of $318,332 and $321,504,
respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1996 are:
Paid Payable
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Reimbursement of expenses to
the General Partner, at cost $7,361 $20,875
4. Subsequent Event:
In April 1996, the Partnership paid $165,810 ($5.527 per Interest) to the
holders of Limited Partnership Interests which represents a regular quarterly
distribution of available Net Cash Receipts for the first quarter of 1996.
<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 1995 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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Increased collections of percentage rents from tenants at the Centre were the
primary reason the Partnership's net loss decreased during the quarter ended
March 31, 1996 when compared to the same period in 1995. Further discussion of
the Partnership's operations is summarized below.
1996 Compared to 1995
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The Partnership receives rents from certain tenants based on a percentage of
their gross sales in excess of stipulated minimums. Higher sales for some
tenants at the Centre caused an increase in percentage rents which resulted in
an increase in rental income during 1996 when compared to 1995.
As a result of lower accounting fees incurred by the Partnership,
administrative expenses decreased during 1996 when compared to 1995.
Liquidity and Capital Resources
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The cash position of the Partnership decreased by approximately $154,000 as of
March 31, 1996 when compared to December 31, 1995. The Partnership used
approximately $83,000 to fund its operating activities. The operating
activities reflect the operations of the Centre, a semi-annual real estate tax
payment, interest income earned on short-term investments, and the payment of
administrative expenses of the Partnership. The Partnership used cash to fund
its financing activities which consist of the payment of distributions totaling
approximately $166,000 to Limited Partners, the payment of principal on the
mortgage note payable of approximately $33,000 and the release of approximately
$128,000 from the Partnership's capital improvement escrow.
As of March 31, 1996, the occupancy rate at the Centre was 82%, and during each
of 1996 and 1995, 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. Although the General Partner has
<PAGE>
no current plans to sell the property, the receipt of an attractive unsolicited
offer or changing market conditions could change this strategy.
In April 1996, the Partnership paid $165,810 ($5.527 per Interest) to the
holders of Limited Partnership Interests for the first quarter of 1996. The
level of the regular quarterly distribution is consistent with the amount
distributed for the fourth quarter of 1995. Including the April 1996
distribution, investors have received distributions of Net Cash Receipts of
$282.90 and Net Cash Proceeds of $263.08, totaling $545.98 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.
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 March 31,
1996 is attached hereto.
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter
ended March 31, 1996.
<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: May 14, 1996
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<PAGE>
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