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 May 31, 1997
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
Item 1. Financial Statements Page
Balance Sheets as of May 31, 1997
(Unaudited) and February 28, 1997 3
Statements of Operations for the three
months ended May 31, 1997 and 1996 (Unaudited) 4
Statements of Cash Flows for the three months
ended May 31, 1997 and 1996 (Unaudited) 5
Notes to Financial Statements as of May
31, 1997 (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
and Results of Operations 9
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
BALANCE SHEETS
May 31, 1997
(Unaudited) February 28, 1997
ASSETS
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Cash and cash equivalents 638,357 $ 629,975
Investment in operating partnerships 1,946,084 2,059,757
Note receivable 317,713 317,713
Accrued interest receivable 103,599 98,436
$ 3,005,753 $ 3,105,881
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Other liabilities $ 12,125 $ 10,000
Due to related parties 142,951 139,201
155,076 149,201
Partners' Equity (Deficit)
Limited partners 2,988,479 3,093,422
General partner (137,802) (136,742)
2,850,677 2,956,680
$ 3,005,753 $ 3,105,881
See notes to financial statements.
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MAY 31, 1997 AND 1996
(Unaudited)
1997 1996
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REVENUE
Interest $ 13,617 $ 11,420
EXPENSES
Operating 5,947 6,545
Income from operations 7,670 4,875
Equity in loss of operating partnerships (113,673) (154,131)
NET LOSS $ (106,003) $ (149,256)
NET LOSS PER UNIT OF LIMITED
PARTNERSHIP INTEREST
(800 units of limited partnership
interest) $ (131.18) $ (184.70)
See notes to financial statements.
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MAY 31, 1997 AND 1996
(Unaudited)
1997 1996
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CASH FLOW FROM OPERATING ACTIVITIES
Net loss $ (106,003) $ (149,256)
Adjustments to reconcile net loss to
net cash provided by operating activities
Equity in loss of operating partnerships 113,673 154,131
Increase in accrued interest receivable (5,163) (5,278)
Increase in other liabilities 2,125
Increase in due to related parties 3,750 3,750
Net cash provided by operating
activities 8,382 3,347
Net increase in cash and cash equivalents 8,382 3,347
Cash and cash equivalents at beginning of period 629,975 615,815
Cash and cash equivalents at end of period $ 638,357 $ 619,162
See notes to financial statements.
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997
(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. The results of operations are impacted
significantly by the results of operations of the Operating
Partnerships, which are provided on an unaudited basis during interim
periods. Accordingly, the accompanying financial statements are
dependent on such unaudited information. 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, 1997 and no material
contingencies exist which would require additional disclosures in the
report under Regulation S-X, Rule 10-01 paragragh A-5.
The results of operations for the three months ended May 31, 1997 are
not necessarily indicative of the results to be expected for the entire
year.
2. The investment in Operating Partnerships as of May 31, 1997 and February
28, 1997 is as follows:
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Amount paid to investee through
February 28, 1997 $ 16,388,000
Accumulated cash distributions fro
Operating Partnerships
through February 28, 1997 (3,180,441)
Equity in accumulated loss of
Operating Partnerships
through February 28, 1997 (11,147,802)
Balance, February 28, 1997 2,059,757
Equity in loss of Operating Partnerships
March 1, 1997 to May 31, 1997 (113,673)
Balance, May 31, 1997 $ 1,946,084
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
NOTES TO FINANCIAL STATEMENTS - continued
MAY 31, 1997
(Unaudited)
Note 2 - Continued
The combined balance sheets of the Operating Partnerships as of March
31, 1997 and December 31, 1996 are as follows:
March 31, 1997
(Unaudited) December 31, 1996
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ASSETS
Land $ 1,150,473 $ 1,150,473
Buildings and equipment(net of
accumulated depreciation
of $10,200,891 and 9,869,372) 42,408,325 42,739,754
Cash and cash equivalents 681,060 563,084
Tenant accounts receivable 31,618
Deferred costs 569,905 580,814
Mortgage escrow deposits 910,565 902,221
Tenant security deposits 630,000 630,000
Other assets 61,087 1,935
$ 46,443,033 $ 46,568,281
LIABILITIES AND PARTNERS EQUITY
Liabilities
Mortgages payable $ 26,957,073 $ 27,015,128
Notes payable 317,713 317,713
Accounts payable and accrued expenses 176,743 118,418
Accrued interest 235,451 230,288
Tenants' security deposits payable 630,000 630,000
Due to general partner and affiliates 1,695,224 1,660,566
30,012,204 29,972,113
Partners' equity
Wilder Richman Historic
Properties II, L.P. 1,946,084 2,059,757
General partner 14,484,745 14,536,411
16,430,829 16,596,168
$ 46,443,033 $ 46,568,281
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
NOTES TO FINANCIAL STATEMENTS - continued
MAY 31, 1997
(Unaudited)
Note 2 - Continued
The unaudited statements of the operations of the Operating Partnerships
for the three months ended March 31, 1997 and 1996 are as follows:
1997 1996
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REVENUE
Rent $ 1,433,847 $ 1,349,157
1,433,847 1,349,157
EXPENSES
Administrative 151,934 137,231
Operating 593,924 513,899
Management fees 42,859 40,475
Interest 468,044 470,815
Depreciation and amortization 342,425 342,425
1,559,186 1,504,845
NET LOSS $ (165,339) $ (155,688)
NET LOSS ALLOCATED TO
Wilder Richman Historic
Properties II, L.P. $ (113,673) $ (154,131)
General partner (51,666) (1,557)
$ (165,339) $ (155,688)
3. Additional information, including the audited February 28, 1997
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, 1997 on file with the
Securities and Exchange Commission.
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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 May 31, 1997, Wilder Richman Historic Properties II, L.P. (the
"Partnership") experienced few changes in its financial condition as
compared to February 28, 1997, with the exception of the investment in
the Operating Partnerships resulting from the equity in loss of
Operating Partnerships for the three months ended March 31, 1997. Cash
and cash equivalents of the Partnership includes approximately
$582,000 which was previously held in an operating deficit escrow
established in connection with the refinancing of the mortgages of the
Operating Partnerships. Pursuant to the Partnership Agreement, such
funds may be held or utilized for other Partnership purposes in the
discretion of the General Partner. Presently, the General Partner
intends for the Partnership to continue to hold such funds. The
Partnership's advance to the Operating Partnerships in the amount of
$317,713 in connection with the refinancing of the mortgages remains
outstanding. For the three months ended May 31, 1997, the Partnership
accrued interest of $5,163 on such advance and has accrued aggregate
interest on such advance of $103,599 as of May 31, 1997. Because of
the outstanding advance, the Operating Partnerships are subject to
restrictions concerning cash flow distributions. Cash flow, if any,
generated subsequent to 1995 may be retained by the Operating
Partnerships or may be distributed at the discretion of management. If
distributed, such cash flow distributions must follow the priority of
(i) accrued interest owing to the Partnership, (ii) principal owing to
the Partnership and (iii) thereafter, pursuant to the terms of the
limited partnership agreements of the Operating Partnerships. Although
recent rental market conditions have been strong, management has been
accumulating reserves to protect against potential adverse changes in
market conditions and unanticipated expenses. Accordingly, the
Partnership does not anticipate making significant cash flow
distributions in the near future and cannot determine the extent of
cash flow distributions over the long term. In addition to its cash
balances, the Operating Partnerships balance in the replacement
reserve account, which is controlled by the lender to be used for
certain repairs or capital improvements, was approximately $610,000 as
of March 31, 1997. The Operating Partnerships are required to deposit
$16,667 per month into the replacement reserve through June 1997 and
$5,400 per month thereafter.
As of March 31, 1997, the Operating Partnerships liquidity is improved
compared to December 31, 1996, with cash and cash equivalents having
increased by approximately $118,000 and the replacement reserve having
increased by approximately $52,000. However, accounts payable and
accrued expenses increased by approximately $58,000 and due to general
partner and affiliates increased by approximately $35,000 due to the
accrual of management fees and investor service fees.
The Partnership's operating results are dependent upon the operating
results of the Operating Partnership and are significantly impacted \
by the Operating Partnerships' policies. The Partnership
accounts for its investment in the Operating Partnerships in
accordance with the equity method of accounting, under which the
investment is carried at cost and is adjusted for the Partnerships
share of the Operating Partnerships results of operations and by any
cash distributions received. Equity in loss of each investment in
Operating Partnership allocated to the Partnership is recognized to
the extent of the Partnership's investment balance in each Operatin
Partnership. Any equity in loss in excess of the Partnership's
investment balance in an Operating Partnership is allocated to
other partners' capital in any Operating Partnership. As a result, the
equity in loss of investment in Local Partnerships is expected to
decrease as the Partnership's investment balances in the respective
Operating Partnerships become zero. However, the combined
statements of operations of the Operating Partnerships reflected
in Note 2 to the Partnership's financial statements include the
operating results of all Operating Partnerships, regardless of the
Partnership's investment balances.
For the three months ended May 31, 1997, the statement of
operations of the Partnership reflects a net loss of $106,003, which
includes equity in loss of Operating Partnerships of $113,673.
Nonrecognition of losses of the Partnership's investment in Dixon
Mills Phase I during the three months ended May 31, 1997 was
approximately $50,000 in accordance with the equity method of
accounting. The Operating Partnerships reported a net loss during
the three months ended March 31, 1997 of $165,399, inclusive of
depreciation and amortization of $342,425. However, the
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)
Operating Partnerships generated cash flow after required debt service
payments and required replacement reserve deposits of approximately
$108,000 during the three months ended March 31, 1997, which
includes principal amortization under the mortgages (approximately
$58,000) and deposits to required escrows (approximately $52,000),
and excludes accrued fees to affiliates of the Operating General
Partner and the General Partner (approximately $37,000) and accrued
interest to the Partnership (approximately $5,000). The Operating
Partnerships did not utilize any replacement reserves during the three
months ended March 31, 1997.
For the three months ended May 31, 1996, the statement of
operations of the Partnership reflects a net loss of $149,256, which
includes equity in loss of Operating Partnerships of $154,131. The
Operating Partnerships reported a net loss during the three months
ended March 31, 1996 of $155,688, inclusive of depreciation and
amortization of $342,425. However, the Operating Partnerships
generated cash flow for the three months ended March 31, 1996 of
approximately $128,000, which includes principal amortization
under the mortgages (approximately $54,000) and deposits to required
escrows (approximately $44,000), and excludes accrued fees to
affiliates of the Operating General Partner and the General
Partner (approximately $34,000) and accrued interest to the Partnership
(approximately $5,000). Although the Operating Partnerships are
operating above breakeven, management is continuing to examine methods
to maintain high occupancy rates and economize operating expenses.
Recently, there has been new construction of luxury multi-family
housing in the vicinity of the Dixon Mill Complex (the "Complex").
Such housing includes asking rents that are comparable and higher than
rents currently charged by the Complex. It has not been determined
whether such new housing will have a positive or negative impact
on the Complex or its cash flow in the future. The ability to perform
at recent levels will be dependent on the ability to lease units as
lease terms expire on a month to month basis. The average occupancy
for the three months ended March 31, 1997 and 1996 was 98% and 96%,
respectively. The future operating results of the Complex will be
extremely dependent on competition and market conditions and therefore
may be subject to significant volatility.
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WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
Part II - Other Information
Item 1. Legal Proceedings.
As of May 31, 1997, there were no material pending legal proceedings
to which Registrant or any of its affiliates was a party or to which
any of their property was subject except for the following:
The Operating Partnerships have been named as a third-party defendant
in a lawsuit between The Dixon Venture, the party who sold the
Complex to the Operating Partnerships, and the former owner, Joseph
Dixon Crucible Company, for indemnification for cost clean-up under
the Comprehensive Environmental Response Compensation and Liability
Act of 1980. The Operating General Partner believes that the
Operating Partnerships have no liability or no liability that is
not adequately covered by an indemnification from The Dixon Venture.
A former employee of the Operating Partnerships filed a complaint
through the Equal Employment Opportunity Commission claiming sexual
harassment. The Operating General Partner cannot measure the
potential liability, if any, at this time.
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
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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: July 11, 1997 /s/ Richard Paul Richman
Richard Paul Richman
President and Chief Executive Officer
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<LEGEND>
This schedule contains summary financial information extracted for the
quarter ended May 31, 1997 Form 10-Q consolidated Balance Sheets and
Consolidated Statements of Operations as of May 31, 1997.
</LEGEND>
<CIK> 0000827830
<NAME> Wilder Richman Historic Properties II L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> May-31-1997
<PERIOD-START> May-31-1997
<PERIOD-END> May-31-1997
<EXCHANGE-RATE> 1.00
<CASH> 638,357
<SECURITIES> 0
<RECEIVABLES> 103,599
<ALLOWANCES> 0
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<TOTAL-ASSETS> 3,005,753
<CURRENT-LIABILITIES> 155,076
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0
0
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<OTHER-SE> 2,850,677
<TOTAL-LIABILITY-AND-EQUITY> 3,005,753
<SALES> 0
<TOTAL-REVENUES> 13,617
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<TOTAL-COSTS> 5,947
<OTHER-EXPENSES> (113,673)
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (106,003)
<EPS-PRIMARY> (131.18)
<EPS-DILUTED> 0
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