SECURITIES AND EXCHANGE COMMISSION
Washington, DC
-------------------------
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 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 0-17793
Wilder Richman Historic Properties II, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 13-3481443
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
599 W. Putnam Avenue
Greenwich, Connecticut 06830
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (203) 869-0900
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 filing requirements
for the past 90 days.
Yes X No
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
Part I - Financial Information
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Table of Contents PAGE
Item 1. - Financial Statements
Balance Sheets as of November 30, 1995 (Unaudited)
and February 28, 1995 3
Statements of Operations for the three and nine month periods ended
November 30, 1995 (Unaudited) and November 30, 1994
(Unaudited) 4
Statements of Cash Flows for the nine months ended November 30, 1995
(Unaudited) and November 30, 1994 (Unaudited) 5
Notes to Financial Statements as of November 30, 1995 (Unaudited) 6
Item 2. - Management's Discussion and Analysis of Financial
Conditions and Results of Operations 9
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2
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
BALANCE SHEETS
November 30, 1995
ASSETS (Unaudited) February 28, 1995
<S> <C> <C>
Cash and cash equivalents $ 29,141 $ 30,836
Restricted cash 582,287 582,287
Investment in operating partnerships 2,823,486 3,605,130
Note receivable 317,713 317,713
Accrued interest receivable 72,335 56,560
-------------- --------------
$ 3,824,962 $ 4,592,526
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Other liabilities $ 10,000 $ 10,000
Due to related parties 120,451 109,201
------------- -------------
130,451 119,201
------------- -------------
COMMITMENTS AND CONTINGENCIES
PARTNERS' EQUITY (DEFICIT)
Limited partners 3,823,874 4,594,900
General partner (129,363) (121,575)
------------ ------------
3,694,511 4,473,325
------------ ------------
$3,824,962 $ 4,592,526
========== ===========
See notes to financial statements.
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3
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Three Months Nine Months Three Months
Ended Ended Ended Ended
November 30, 1995 November 30, 1995 November 30, 1994 November 30, 1994
REVENUES
<S> <C> <C> <C> <C>
Interest $ 31,985 $ 11,503 $ 23,143 $ 7,579
-------------- ------------- ------------- --------------
EXPENSES
Operating 29,155 8,355 27,894 5,424
--------------- --------------- -------------- ---------------
Income/(loss) from operations 2,830 3,148 (4,751) 2,155
Equity in loss of operating
partnerships (781,644) (216,812) (874,308) (342,381)
------------- ------------ ------------ ------------
NET LOSS $ (778,814) $ (213,664) $ (879,059) $ (340,226)
============ =========== =========== ===========
NET LOSS PER UNIT OF
LIMITED PARTNERSHIP
INTEREST $ (963.78) $ (264.41) $ (1,087.84) $ (421.03)
============= ============ =========== ============
See notes to financial statements.
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4
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Nine Months
Ended Ended
November 30, 1995 November 30, 1994
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net loss $ (778,814) $ (879,059)
Adjustments to reconcile net loss to
net cash used in operating activities:
Equity in loss of operating partnerships 781,644 874,308
Increase in interest receivable (15,775) (15,775)
Increase in due to related parties 11,250 11,250
-------------- ----------------
Net cash used in operating activities (1,695) (9,276)
-------------- ----------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,695) (9,276)
CASH AND CASH EQUIVALENTS, beginning of period 30,836 38,572
------------- ---------------
CASH AND CASH EQUIVALENTS, end of period $ 29,141 $ 29,296
============ ==============
See notes to financial statements.
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5
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1995
(Unaudited)
1. The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information. They do not include all information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of the General Partner,
the financial statements include all adjustments necessary to reflect
fairly the results of the interim periods presented. All adjustments
are of a normal recurring nature. No significant events have occurred
subsequent to February 28, 1995 and no material contingencies exist
which would require additional disclosure in the report under
Regulation S-X, Rule 10-01 paragraph A-5.
The results of operations for the nine months ended November 30, 1995
are not necessarily indicative of the results to be expected for the
entire year.
2. The investment in Operating Partnerships as of February 28, 1995 and November 30, 1995 is as follows:
<S> <C>
Amount paid to investee through February 28, 1995 $16,388,000
Accumulated cash distributions from Operating Partnerships
through February 28, 1995 (3,180,441)
Equity in accumulated loss of Operating Partnerships
through December 31, 1994 (9,602,429)
-------------
Balance as of February 28, 1995 3,605,130
Equity in loss of Operating Partnerships for the nine months ended
September 30, 1995 (781,644)
--------------
Balance as of November 30, 1995 $ 2,823,486
============
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The Local Partnerships' combined balance sheets as of September 30,
1995 (unaudited) and December 31, 1994 and the combined statements of
operations for the nine months ended September 30, 1995 and 1994
(unaudited) are reflected on pages 7 and 8.
6
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
NOTES TO FINANCIAL STATEMENTS (continued)
NOVEMBER 30, 1995
(Unaudited)
Note 2 - Continued
The combined balance sheets of the Operating Partnerships as of November 30,
1995 (unaudited) and December 31, 1994 are as follows:
November 30, 1995 December 31, 1994
----------------- -----------------
Assets
<S> <C> <C>
Land $ 1,150,473 $ 1,150,473
Buildings and equipment (net of accumulated
depreciation of $8,224,519 and $7,229,966,
respectively) 44,415,393 45,379,160
Cash and cash equivalents 81,283 164,855
Deferred costs 635,356 668,082
Mortgage escrow deposits 732,682 357,272
Tenant security deposits 535,891 490,882
Other assets 23,049 37,094
Real estate tax receivable 208,442 208,442
--------------- ---------------
$ 47,782,569 $ 48,456,260
============ ============
Liabilities
Mortgages payable $ 27,291,165 $ 27,446,018
Notes payable 635,427 635,427
Accounts payable and accrued expenses 232,927 118,439
Accrued interest 275,073 243,752
Tenants' security deposits payable 535,891 490,882
Due to general partner and affiliates 1,397,377 1,317,494
-------------- --------------
30,367,860 30,252,012
------------- -------------
Partners' equity
Wilder Richman Historic Properties II, L.P. 2,823,486 3,605,130
General partner 14,591,223 14,599,118
------------- -------------
17,414,709 18,204,248
------------- -------------
$ 47,782,569 $ 48,456,260
============ ============
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7
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
NOTES TO FINANCIAL STATEMENTS (continued)
NOVEMBER 30, 1995
(Unaudited)
Note 2 - Continued
The unaudited combined statements of operations of the Operating Partnerships
for the nine months ended September 30, 1995 and 1994 are as follows:
Nine Months Nine Months
Ended Ended
September 30, 1995 September 30, 1994
Revenues
<S> <C> <C>
Rent $ 3,831,713 $ 3,824,537
----------- ------------
Expenses
Administrative 517,098 476,587
Operating 1,507,941 1,623,449
Management fees 114,951 114,736
Interest 1,453,983 1,459,883
Depreciation and amortization 1,027,279 1,033,021
------------ -------------
4,621,252 4,707,676
------------ -------------
Net Loss $ (789,539) $ (883,139)
=========== ============
Net Loss Allocated to
Wilder Richman Historic Properties II, L.P. $ (781,644) $ (874,308)
General partner (7,895) (8,831)
-------------- ---------------
$ (789,539) $ (883,139)
=========== ============
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3. Additional information, including the audited February 28, 1995
Financial Statements and the Summary of Significant Accounting
Policies, is included in the Partnership's Annual Report on Form 10-K
for the fiscal year ended February 28, 1995 on file with the Securities
and Exchange Commission.
8
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations
As of November 30, 1995, Wilder Richman Historic Properties II, L.P.
(the "Partnership") experienced few changes in its financial
condition as compared to February 28, 1995, with the exception of the
investment in the Operating Partnerships resulting from the equity in
loss of Operating Partnerships for the nine months ended September
30, 1995.
In connection with the modification of the mortgages of the Operating
Partnerships in June, 1992, the Partnership advanced cash in the
amount of $317,713 in 1992 to provide assistance to the Operating
Partnerships principally in covering costs associated with the
modification of the mortgages. In addition, the Partnership provided
the mortgage lender with a letter of credit in an outstanding amount
of $582,287 (after deducting $17,713 for operating shortfalls in
1992) for the purpose of covering future operating deficits of the
Operating Partnerships. The outstanding balance of the letter of
credit is secured by cash in the amount of $582,287 which is
deposited in an interest-bearing account and is reflected as
restricted cash in the accompanying balance sheet. In addition, there
is a matching letter of credit provided by Chase Manhattan Bank
("Chase") on behalf of the Operating General Partner, leaving a total
amount of $1,164,574 to cover operating shortfalls of the Operating
Partnerships until such letters of credit are released. Under the
terms of the loan documents, the operating deficit letters of credit
are to be released upon the later of (i) the date on which the
Operating Partnerships satisfy the lender as to the debt service
coverage ratio requirement on the mortgages or (ii) January 1, 1996
(to coincide with the expiration of Federal income tax recapture of
the rehabilitation credits). For the nine month period ended November
30, 1995, the Partnership accrued interest of $15,775 on such
advances and has accrued aggregate interest on such advances of
$72,335 as of November 30, 1995. See additional discussion below
concerning the release of the letters of credit.
Under the terms of the loan documents as modified in 1992, the
Operating General Partner provided a letter of credit to the lender,
in addition to the operating deficit letters of credit discussed
above, in the amount of approximately $4.2 million (the "Capital
Letter of Credit") for the purpose of revising the base loan amount
in the event revenues of the complex were not sufficient to cover
operating costs and debt service. Under the terms of the loan
documents, the Capital Letter of Credit is to be released upon the
date on which the Operating Partnerships satisfy the lender as to the
debt service coverage ratio requirement on the mortgages. During
April, 1995, the Operating General Partner submitted to the lender
the operating statement of the complex for 1994, reflecting that the
1994 operations satisfied the debt service coverage ratio
requirement. Such submission was reviewed by the lender and was
approved in June, 1995. Accordingly, the Capital Letter of Credit was
returned to the Operating General Partner by the lender. The annual
letter of credit fees incurred by the Operating Partnerships on such
balance were approximately $24,000 per annum. In addition, the
Operating General Partner entered into an agreement with Chase on
July 5, 1995 whereby Chase agreed to release the Operating
Partnerships from substantially all of the outstanding liabilities
owed to Chase in connection with outstanding advances and accrued
interest thereon (discussed above) in return for the release of its
outstanding letter of credit of approximately $600,000 on January 1,
1996. Notwithstanding such agreement, the outstanding liability and
accrued interest thereon are reflected in the combined balance sheet
of the Operating Partnerships as of September 30, 1995 included in
Note 2 to the accompanying financial statements. As of January 15,
1996, the Operating General Partner is awaiting the delivery of the
Chase letter of credit from the lender. Upon such receipt, the
Operating General Partner will deliver the letter of credit to Chase
at which time it is expected that Chase will release the Operating
Partnerships of such liabilities pursuant to the agreement and
release cash escrow of approximately $60,000 held in connection with
the agreement.
The Partnership's results from operations during the nine months
ended November 30, 1995 were comparable to the nine months ended
November 30, 1994. The Partnership's operating results are dependent
upon the operating results of the Operating Partnerships and are
significantly impacted by the Operating Partnerships' policies. For
9
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations (continued)
the period March 1, 1995 through November 30, 1995, the statement of
operations reflects a net loss of $778,814, which includes equity in
loss of Operating Partnerships of $781,644, inclusive of depreciation
and amortization. For the period March 1, 1994 through November 30,
1994, the statement of operations reflects a net loss of $879,059,
which includes equity in loss of Operating Partnerships of $874,308,
inclusive of depreciation and amortization.
The Operating Partnerships reported a net loss during the nine month
period ended September 30, 1995 of $789,539, inclusive of
depreciation and amortization expenses of $1,027,279. The Operating
Partnerships reported a net loss during the nine month period ended
September 30, 1994 of $883,139, inclusive of depreciation and
amortization expenses of $1,033,021. The principal reason for the
smaller loss in 1995 is the reduction in effective real estate taxes
in 1995 (approximately $538,000) compared to effective 1994 real
estate taxes (approximately $780,000 per annum) based on the then
current assessment, which was disputed and subsequently modified. The
operating results of the Operating Partnerships for the nine months
ended September 30, 1995 reflect positive cash flow of approximately
$108,000 after deducting principal amortization under the mortgages
(approximately $155,000), deposits to required escrows (approximately
$101,000), and adding accrued fees to affiliates of the Operating
General Partner and the General Partner (approximately $96,000),
depreciation and amortization of deferred financing costs
(approximately $1,027,000) and accrued interest to Chase and the
Partnership (approximately $31,000). The property's performance will
be dependent on the ability to lease units at similar or better
rental rates as lease terms expire. The Operating Partnerships did
not receive any advances from the Partnership under its letter of
credit obligation (discussed above) during the nine month period
ended September 30, 1995.
Although for the near future the Operating Partnerships are expected
to avoid mortgage default as a result of the modified mortgages,
management is continuing to examine methods to increase occupancy
rates and economize operating expenses. The future operating results
of the complex will be extremely dependent on market conditions and
therefore may be subject to significant volatility. The expiration
period for potential historic tax credit recapture was November 1995.
Based upon the satisfaction of conditions necessary to release the
operating deficit letters of credit (discussed above), the Operating
General Partner has corresponded with the lender requesting the
release of the Partnership's letter of credit, which is expected to
occur in the very near future.
10
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
Part II - Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits:
Exhibit #: Description:
27 Financial Data Schedule
b. Reports on Form 8-K
None
11
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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.
WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
By: Wilder Richman Historic Corporation
General Partner
Dated: January 16, 1996 /s/ Richard Paul Richman
------------------------
Richard Paul Richman
President and Chief
Executive Officer
12
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<LEGEND>
This schedule contains summary financial information extracted from the
quarter ended 1995 Form 10-Q Consolidated Balance Sheets and Consolidated
Statements of Operations as of November 30, 1995 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000827830
<NAME> Neal Ludeke
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> FEB-28-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> NOV-30-1995
<CASH> 29,141
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,824,962
<CURRENT-LIABILITIES> 10,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,694,511
<TOTAL-LIABILITY-AND-EQUITY> 3,824,962
<SALES> 0
<TOTAL-REVENUES> 31,985
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 29,155
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (778,814)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (778,814)
<EPS-PRIMARY> (963.78)
<EPS-DILUTED> 0
</TABLE>
