FORM 10-KSB--Annual or Transitional Report
Under Section 13 or 15(d)
(As last amended by 34-31905, eff. 4/26/93)
[X] Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934 [Fee Required]
For the fiscal year ended December 31, 1995
or
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934 [No Fee Required]
For the transition period.........to.........
Commission file number 0-17646
UNITED INVESTORS INCOME PROPERTIES
(Name of small business issuer in its charter)
Missouri 43-1483942
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Units of Limited Partnership Interest
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 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
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $1,607,832
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests, as of December 31, 1995. Market value information for the
Registrant's partnership interests is not available. Should a trading market
develop for these interests, it is management's belief that such trading would
not exceed $25,000,000.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Prospectus of Registrant dated May 4, 1988 (included in
Registration Statement, No. 33-20350, of Registrant) are incorporated by
reference into Parts I and III.
PART I
Item 1. Description of Business
United Investors Income Properties (the "Registrant" or "Partnership"), a
Missouri Limited Partnership, was organized as a limited partnership under the
laws of the State of Missouri pursuant to a Certificate of Limited Partnership
filed on June 23, 1988, with the Missouri Secretary of State. The Registrant is
governed by an Agreement of Limited Partnership dated July 27, 1988. United
Investors Real Estate, Inc., a Delaware corporation, is the sole general partner
(the "General Partner") of the Registrant. Effective December 31, 1992, 100% of
the General Partner's common stock was purchased by MAE GP Corporation, an
affiliate of Insignia Financial Group, Inc. ("Insignia"). The Registrant is
engaged in the business of acquiring and operating multifamily residential and
commercial properties and other income producing real estate. The Registrant
has acquired three multifamily residential properties, a medical office
building, and an interest in a joint venture which owns a medical office
building. These properties are further described in "Item 2" below.
Commencing on or about May 4, 1988, the Registrant began offering through
Waddell & Reed, Inc., a former affiliate of the Registrant (the "Selling
Agent"), up to a maximum of 80,000 Units of limited partnership interest (the
"Units") at $250 per Unit with a minimum required purchase of eight Units or
$2,000 (four Units or $1,000 for an Individual Retirement Account). Limited
partners (the "Limited Partners") are not required to make any additional
capital contributions. The Units were registered under the Securities Act of
1933, as amended (the "Act"), under Registration Statement No. 33-20350, which
Registration Statement was declared effective on May 4, 1988.
The offering of Units terminated May 4, 1990. Upon termination of the
offering, the Registrant had accepted subscriptions for 61,063 Units resulting
in Gross Offering Proceeds of $15,265,750.
The real estate business is highly competitive. The Registrant's real
property investments are subject to competition from similar types of properties
in the vicinities in which they are located, and the Partnership is not a
significant factor in its industry. In addition, various limited partnerships
have been formed by related parties to engage in businesses which may be
competitive with the Registrant.
The Registrant has no employees. Management and administrative services are
performed by affiliates of Insignia. The property manager is responsible for
the day-to-day operations of each property. The General Partner has also
selected affiliates of Insignia to provide real estate advisory and asset
management services to the Partnership. As advisor, these affiliates provide
all partnership accounting and administrative services, investment management,
and supervisory services over property management and leasing. For a further
discussion of the property and partnership management, see "Item 12," which
descriptions are herein incorporated by reference.
Item 2. Description of Properties
The following table sets forth the Registrant's investments in
properties:
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership(1) Use
<S> <C> <C> <C>
Bronson Place Apartments 11/01/88 Fee simple Apartment
Mountlake Terrace, WA 70 units
Defoors Crossing Apartments 05/01/89 Fee simple Apartment
Atlanta, GA 60 units
Meadow Wood Apartments 10/02/89 Fee simple Apartment
Medford, OR 85 units
Peachtree Corners Medical Bldg. 06/01/90 Fee simple Medical Office
Atlanta, GA Bldg.
12,260 sq.ft.
<FN>
(1) None of the Registrant's properties are encumbered by mortgage financing.
</TABLE>
Schedule of Properties:
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Useful Federal
Property Value Depreciation life Method Tax Basis
<S> <C> <C> <C> <C> <C>
Bronson Place Apartments $3,400,380 $ 756,411 5-40 yrs S/L $2,678,649
Defoors Crossing Apartments 3,301,783 605,204 5-40 yrs S/L 2,697,134
Meadow Wood Apartments 3,544,045 663,581 5-40 yrs S/L 2,880,501
Peachtree Corners Medical
Building 1,794,029 227,876 15-40 yrs S/L 1,704,946
Totals $12,040,237 $2,253,072 $9,961,230
</TABLE>
See Note A of the financial statements in "Item 7" for a description of the
Partnership's depreciation policy.
Schedule of Rental Rates and Occupancy:
<TABLE>
<CAPTION>
Average Annual Average Annual
Rental Rates Occupancy
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Bronson Place Apartments $ 7,612/unit $ 7,585/unit 91% 92%
Defoors Crossing Apartments 7,789/unit 7,476/unit 98% 98%
Meadow Wood Apartments 6,704/unit 6,766/unit 92%(2) 88%
Peachtree Corners Medical
Building 16.71/sq.ft. 22.49/sq.ft. 21%(1) 61%
<FN>
(1) Peachtree Corners Medical Building, Atlanta, Georgia - The decrease
in occupancy at Peachtree Medical resulted from the move-out of two
tenants occupying 73% of the property. A new tenant occupying 23% of
the leaseable space moved into the property during the third quarter
of 1995. Subsequent to year end a lease was signed with a new tenant
who will occupy 16% of the property during the first quarter of 1996.
In addition, the Partnership is in continued negotiations with
another tenant who would increase occupancy to approximately 70%.
(2) Meadow Wood Apartments, Medford, Oregon - Occupancy increased to 92%
for 1995 due to the increase in concessions and marketing efforts.
At December 31,1995, occupancy had increased to 97%.
</TABLE>
As noted under "Item 1. Description of Business," the real estate industry is
highly competitive. All of the properties of the Partnership are subject to
competition from other residential apartment complexes and commercial buildings
in the area. The General Partner believes that all of the properties are
adequately insured. The multi-family residential properties' lease terms are
for one year or less and no residential tenant leases 10% or more of the
available rental space.
The following is a schedule of the lease expirations at Peachtree Corners
Medical Building for the years 1996-2005:
<TABLE>
<S> <C> <C> <C> <C>
Number of % of Gross
Expirations Square Feet Annual Rent Annual Rent
1996 - 2004 0 0 0 0
2005 1 3,521 $53,114 38.8%(1)
<FN>
(1) The % of Gross Annual Rent is calculated using the 1994 rental income which
reflects rental income at a stable occupancy level.
</TABLE>
Schedule of Real Estate Taxes and Rates:
1995 1995
Taxes Rate
Bronson Place Apts. $38,015 1.23%
Defoors Crossing Apts. 39,306 2.02%
Meadow Wood Apts. 56,529 1.32%
Peachtree Corners Medical Bldg, 13,959 1.48%
Item 3. Legal Proceedings
The Registrant is unaware of any pending or outstanding litigation that is not
of a routine nature. The General Partner of the Registrant believes that all
such pending or outstanding litigation will be resolved without a material
adverse effect upon the business, financial condition, or operations of the
Partnership.
Item 4. Submission of Matters to a Vote of Security Holders
During the fourth quarter of the fiscal year ended December 31, 1995, no
matters were submitted to a vote of Unit holders through the solicitation of
proxies or otherwise.
PART II
Item 5. Market for Partnership Equity and Related Partner Matters
As of December 31, 1995, the number of holders of record of Limited
Partnership Units was 1,887. No public trading market has developed for the
Units, and it is not anticipated that such a market will develop in the future.
The partnership agreement for the Partnership contains a provision which
states that the General Partner shall purchase up to 10% of the limited
partnership Units outstanding at the fifth anniversary date of the last
Additional Closing Date and become a limited partner with respect to such units.
Pursuant to this provision, the General Partner accepted repurchase notices
representing approximately 1.5% of the limited partnership Units and during the
third quarter of 1995 the transfer of 950 units was effected.
The Partnership made distributions of cash generated from operations of
$655,566 and $882,021 for the twelve months ended December 31, 1995 and 1994,
respectively. The Partnership also made a distribution of $154,200 on February
20, 1996. Further distributions will depend on the levels of cash generated
from operations and the availability of cash reserves.
Item 6. Management's Discussion and Analysis or Plan of Operation
Results of Operations
The Partnership realized net income of $298,640 for the year ended December
31, 1995, compared to $500,653 for 1994. The decrease in net income is
primarily due to a decrease in rental income, increases in maintenance expenses
and reduced tenant reimbursements. The rental income decrease resulted from
declining occupancy at Peachtree Corners in 1995. Tenant reimbursements
decreased due to a decrease in reimbursable expenses resulting from the
occupancy decrease at Peachtree Corners.
Total expenses increased due to higher maintenance and general and
administrative costs in 1995. Maintenance expense increased as a result of the
exterior painting at Bronson Place, Defoors Crossing and Meadow Wood apartments
and plumbing and parking lot repairs at Peachtree Medical. General and
administrative expenses increased due to an increase in general partner expense
reimbursements. Partially offsetting the increase in total expenses was a
decrease in property management fees resulting from a decrease in rental
revenues. Joint venture income decreased in 1995 because of increased
operating expenses at Corinth Square in 1995.
The General Partner continues to monitor the rental market environment in each
location of its properties to assess the feasibility of increasing rents and
maintaining and increasing occupancy levels to protect the Partnership from
increases in expense. Rental concessions and rental reductions needed to offset
softening market conditions could affect the ability to sustain this plan.
Liquidity and Capital Resources
At December 31, 1995, the Partnership held unrestricted cash of $636,887
compared to $867,995 at December 31, 1994. Net cash provided by operating
activities decreased as a result of the decreases in rental income and tenant
reimbursements discussed above. Net cash used in investing activities increased
due to building improvements primarily at Peachtree Corners and reduced
distributions received from the joint venture for the year ended December 31,
1995, compared to the corresponding period of 1994. Net cash used in financing
activities decreased due to a reduction in partners' distributions in 1995.
The sufficiency of existing liquid assets to meet future liquidity and
capital expenditure requirements is directly related to the level of capital
expenditures required at the various properties to adequately maintain the
physical assets. Such assets are currently thought to be sufficient for any
near-term needs of the Partnership. Future cash distributions will depend on
the levels of net cash generated from operations, property sales, and the
availability of cash reserves. Distributions of $655,566 were made during
1995 compared to distributions of $882,021 made in 1994. The distributions
were made from cash generated by property operations. The General Partner of
the Partnership anticipates that the Partnership will continue to make cash
distributions as property operations permit throughout 1996.
Item 7. Financial Statements
UNITED INVESTORS INCOME PROPERTIES
LIST OF FINANCIAL STATEMENTS
Independent Auditors' Report
Balance Sheet - December 31, 1995
Statements of Operations - Years ended December 31, 1995 and 1994
Statements of Changes in Partners' Capital (Deficit) - Years
ended December 31, 1995 and 1994
Statements of Cash Flows - Years ended December 31, 1995 and 1994
Notes to Financial Statements
INDEPENDENT AUDITORS' REPORT
The Partners
United Investors Income Properties
(A Missouri Limited Partnership)
We have audited the accompanying balance sheet of United Investors Income
Properties (A Missouri Limited Partnership) ("the Partnership") as of December
31, 1995, and the related statements of operations, changes in partners' capital
(deficit), and cash flows for each of the two years in the period ended December
31, 1995. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1995 and
the results of its operations and its cash flows for each of the two years in
the period ended December 31, 1995 in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
Greenville, South Carolina
February 21, 1996
UNITED INVESTORS INCOME PROPERTIES
BALANCE SHEET
December 31, 1995
Assets
Cash:
Unrestricted $ 636,887
Restricted-tenant security deposits 46,740
Accounts receivable 15,024
Escrows for taxes 48,436
Other assets 51,258
Investment properties (Notes A and G):
Land $ 1,861,813
Buildings and related personal property 10,178,424
12,040,237
Less accumulated depreciation (2,253,072) 9,787,165
Investment in Joint Venture (Note B) 655,093
$11,240,603
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 10,623
Tenant security deposits 47,436
Other liabilities 38,173
Partners' Capital (Deficit) (Note C)
General partner $ (21,894)
Limited partners (61,063 units
issued and outstanding) 11,166,265 11,144,371
$11,240,603
See Accompanying Notes to Financial Statements
UNITED INVESTORS INCOME PROPERTIES
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994
<S> <C> <C>
Revenues:
Rental income $1,492,183 $1,555,911
Other income 115,649 113,492
Total revenues 1,607,832 1,669,403
Expenses:
Operating 400,063 402,138
General and administrative 75,113 61,203
Property management fees 78,097 87,977
Maintenance 285,196 196,218
Depreciation and amortization 348,473 341,723
Property taxes 149,117 157,153
Tenant reimbursements (Note E) (7,259) (41,767)
Total expenses 1,328,800 1,204,645
Equity in net income of joint venture (Note B) 19,608 35,895
Net income (Note F) $ 298,640 $ 500,653
Net income allocated to general partner (1%) $ 2,986 $ 5,007
Net income allocated to limited partners (99%) 295,654 495,646
$ 298,640 $ 500,653
Net income per limited partnership unit $ 4.84 $ 8.12
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
UNITED INVESTORS INCOME PROPERTIES
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 61,063 $ 100 $15,265,750 $15,265,850
Partners' capital (deficit) at
December 31, 1993 61,063 $(14,511) $11,897,176 $11,882,665
Partners' distributions -- (8,820) (873,201) (882,021)
Net income for the year ended
December 31, 1994 -- 5,007 495,646 500,653
Partners' capital (deficit) at
December 31, 1994 61,063 (18,324) 11,519,621 11,501,297
Partners' distributions -- (6,556) (649,010) (655,566)
Net income for the year ended
December 31, 1995 -- 2,986 295,654 298,640
Partners' capital (deficit) at
December 31, 1995 61,063 $(21,894) $11,166,265 $11,144,371
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
UNITED INVESTORS INCOME PROPERTIES
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 298,640 $ 500,653
Adjustments to reconcile net income to
net cash provided by operating activities:
Equity in net income of joint venture (19,608) (35,895)
Depreciation and amortization 348,473 341,723
Change in accounts:
Restricted cash 68 6,313
Accounts receivable (2,755) 5,201
Escrows for taxes 765 (4,275)
Other assets (20,153) (16,657)
Accounts payable (7,686) (3,087)
Tenant security deposit liabilities (5,660) (25)
Other liabilities (9,500) 10,235
Net cash provided by operating activities 582,584 804,186
Cash flows from investing activities:
Property improvements and replacements (162,402) (96,142)
Distributions from joint venture 4,276 50,421
Net cash used in investing activities (158,126) (45,721)
Cash flows from financing activities:
Partners' distributions (655,566) (882,021)
Net cash used in financing activities (655,566) (882,021)
Net decrease in cash (231,108) (123,556)
Cash at beginning of year 867,995 991,551
Cash at end of year $ 636,887 $ 867,995
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
UNITED INVESTORS INCOME PROPERTIES
Notes to Financial Statements
December 31, 1995
Note A - Organization of Significant Accounting Policies
Organization: United Investors Income Properties (the "Partnership"), a Missouri
Limited Partnership, was organized in June 1988, with the initial group of
limited partners being admitted on July 27, 1988. Additional partners were
admitted through May 1990.
The Partnership was formed to acquire and operate certain types of income-
producing real estate. United Investors Real Estate, Inc. (the "General
Partner") is the general partner. Effective December 31, 1992, 100% of the
General Partner's common stock was purchased by MAE GP Corporation, an affiliate
of Insignia Financial Group, Inc. ("Insignia").
Basis of accounting: The accompanying financial statements of the Partnership
are prepared on the accrual basis and, therefore, revenue is recorded as earned
and costs and expenses are recorded as incurred.
Income taxes: For income tax purposes, the Partnership reports revenue and
costs and expenses on the accrual method. No income tax provision has been
shown in the accompanying statements of operations since the partners are taxed
in their individual capacities.
Investment properties: During 1995, the Partnership adopted FASB No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," which requires impairment losses to be recognized for long-
lived assets used in operations when indicators of impairment are present and
the undiscounted cash flows are not sufficient to recover the assets' carrying
amount. The impairment loss is measured by comparing the fair value of the
asset to its carrying amount. The adoption of FASB No. 121 had no effect on the
Partnership's financial statements.
Depreciation is computed using accelerated and straight-line methods over
estimated useful lives of fifteen to forty years for buildings and improvements
and five to twelve years for furniture and fixtures. Commercial tenant
improvements are depreciated over the term of the respective lease.
Cash:
Unrestricted - Unrestricted cash includes cash on hand and in banks and
money market funds and certificates of deposit with original maturities of three
months or less.
Note A - Organization of Significant Accounting Policies (continued)
Restricted cash - tenant security deposits - The Partnership requires
security deposits from lessees for the duration of the lease with such deposits
being considered restricted cash. Deposits are refunded when the tenant
vacates, provided the tenant has not damaged its space and is current on its
rental payments.
Fair Value: In 1995, the Partnership implemented Statement of Financial
Accounting Standards No. 107, "Disclosures about Fair Value of Financial
Instruments," which requires disclosure of fair value information about
financial instruments for which it is practicable to estimate the value.
The carrying amounts of all financial instruments approximate fair value due to
short maturities.
Other Assets: Included in other assets are leasing commissions which are being
amortized over the life of the related lease.
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Advertising: The Partnership expenses the costs of advertising as incurred.
Advertising expense, included in operating expenses, was $28,467 and $22,406 for
the years ended December 31, 1995 and 1994, respectively.
Reclassifications: Certain reclassifications have been made to the 1994
information to conform to the 1995 presentation.
Note B - Investment In Joint Venture
The Partnership owns a 35% interest in Corinth Square ("Corinth"), a joint
venture with United Investors Income Properties II, an affiliated partnership in
which the General Partner is also the sole general partner. The joint venture
owns a 23,149 square foot medical office building located in Prairie Village,
Kansas.
Condensed balance sheet information for Corinth at December 31, 1995, is as
follows:
December 31,
1995
Assets
Commercial properties, net $1,750,438
Other assets 151,727
Total $1,902,165
Liabilities and Partners' Capital
Liabilities $ 30,471
Partners' capital 1,871,694
Total $1,902,165
Note B - Investment In Joint Venture (continued)
Condensed statements of operations of Corinth for the years ended December 31,
1995 and 1994, are as follows:
Years Ended December 31,
1995 1994
Revenue $ 259,778 $ 261,596
Costs and Expenses (203,756) (159,039)
Net income $ 56,022 $ 102,557
Note C - Partners' Capital
Allocations of profits and losses: In accordance with the partnership agreement,
all profits and losses are to be allocated 1% to the General Partner and 99% to
the limited partners.
Distributions: The Partnership allocates distributions 1% to the General Partner
and 99% to the limited partners. On February 20, 1996, the Partnership paid a
distribution to the partners of $154,200.
Repurchase of Units: The partnership agreement for the Partnership contains a
provision which states that the General Partner shall purchase up to 10% of the
limited partnership Units outstanding at the fifth anniversary date of the last
Additional Closing Date and become a limited partner with respect to such units.
Pursuant to this provision, the General Partner accepted repurchase notices
representing approximately 1.5% of the limited partnership Units and during the
third quarter of 1995 the transfer of 950 units was effected.
Note D - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all partnership activities.
The partnership agreement provides for payments to affiliates for services
(based on a percentage of revenue) and for reimbursement of certain expenses
incurred by affiliates on behalf of the Partnership. Effective December 31,
1992, 100% of the General Partner's common stock was purchased by MAE GP
Corporation, an affiliate of Insignia. The following payments were made to
affiliates of Insignia in 1995 and 1994:
1995 1994
Property management fees $78,097 $87,977
Reimbursement for services of affiliates 30,000 20,000
The Partnership insures its properties under a master policy through an agency
and insurer unaffiliated with the General Partner. An affiliate of the General
Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which was later acquired by the agent who
placed the current year's master policy. The current agent assumed the
financial obligations to the affiliate of the General Partner, who receives
payments on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
General Partner by virtue of the agent's obligations is not significant.
Note E - Operating Leases
Tenants of Peachtree Corners Medical Building are responsible for their own
utilities and maintenance of their space, and payment of their proportionate
share of common area maintenance, utilities, insurance and real estate taxes.
The real estate taxes, insurance, and common area maintenance expenses are paid
directly by the Partnership. The Partnership is then reimbursed by the tenants
for their proportionate share. The expenses paid by the Partnership are
included in the accompanying Statements of Operations as property taxes,
insurance, and operating expenses. The portion which is reimbursable from the
tenants has been classified as tenant reimbursements in the accompanying
Statements of Operations.
The future minimum rental payments to be received under operating leases that
have initial or remaining noncancellable lease terms in excess of one year, as
of December 31, 1995, are as follows:
Years Ending December 31,
1996 $ 41,675
1997 48,414
1998 49,294
1999 50,174
2000 52,815
Thereafter 252,631
$495,003
Note F - Partner Tax Information
The following is a reconciliation between net income as reported in the
financial statements and federal taxable income allocated to the partners in the
Partnership's information returns for the years ended December 31, 1995 and
1994:
1995 1994
Net loss as reported $298,640 $500,653
Add (deduct):
Deferred revenue and other
liabilities (4,923) 4,614
Depreciation differences (4,435) (12,958)
Nondeductible reserves and allowances (5,800) 5,800
Accrued expenses 2,250 5,750
Deferred charges and other assets 2,927 13,567
Federal taxable income $288,659 $517,426
Federal taxable income per limited
partnership unit $ 4.68 $ 8.39
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets at December 31, 1995:
Net assets as reported $11,144,371
Differences in basis of assets and liabilities:
Deferred revenue and other liabilities (19,615)
Accumulated depreciation 20,749
Commercial property at cost 153,316
Deferred charges and other assets (3,191)
Other 1,546
Syndication costs 1,901,853
Net assets - tax basis $13,199,029
Note G - Investment Properties and Accumulated Depreciation
<TABLE>
<CAPTION>
Initial cost
To Partnership
Cost
Buildings Capitalized
and Related (Removed)
Personal Subsequent to
Description Land Property Acquisition
<S> <C> <C> <C>
Bronson Place Apartments
Mountlake Terrace, WA $500,423 $2,568,353 $331,604
Defoors Crossing Apartments
Atlanta, GA 520,000 2,479,698 302,085
Meadow Wood Apartments
Medford, OR 501,390 2,883,530 159,125
Peachtree Corners Medical Bldg. 102,771
Atlanta, GA 340,000 1,396,596 (45,338)
Totals $1,861,813 $9,328,177 $850,247
</TABLE>
Note G - Investment Properties and Accumulated Depreciation (continued)
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1995
Buildings
And Related
Personal Accumulated Date of Date Depreciable
Description Land Property Total Depreciation Construction Acquired Life-Years
<S> <C> <C> <C> <C> <C> <C> <C>
Bronson Place Apartments $ 500,423 $ 2,899,957 $ 3,400,380 $ 756,411 1988 11/01/88 5-40
Defoors Crossing Apartments 520,000 2,781,783 3,301,783 605,204 1988 05/01/89 5-40
Meadow Wood Apartments 501,390 3,042,655 3,544,045 663,581 1988 10/02/89 5-40
Peachtree Corners Medical
Building 340,000 1,454,029 1,794,029 227,876 1989 06/01/90 15-40
Totals $1,861,813 $10,178,424 $12,040,237 $2,253,072
</TABLE>
Reconciliation of Investment Properties and Accumulated Depreciation":
Years Ended December 31,
1995 1994
Investment Properties
Balance at beginning of year $11,877,835 $11,781,693
Property improvements 162,402 96,142
Balance at End of Year $12,040,237 $11,877,835
Accumulated Depreciation
Balance at beginning of year $ 1,905,631 $ 1,563,908
Additions charged to expense 347,441 341,723
Balance at end of year $ 2,253,072 $ 1,905,631
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1995 is $12,193,553. The accumulated depreciation taken for
Federal income tax purposes at December 31, 1995 is $2,232,323.
Note H - Contingencies
The Partnership is unaware of any pending or outstanding litigation that is not
of a routine nature. The General Partner of the Partnership believes that all
such pending or outstanding litigation will be resolved without a material
adverse effect upon the business, financial condition, or operation of the
Partnership.
Item 8. Changes and Disagreements with Accountants on Accounting and Financial
Disclosure
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act
The Registrant has no officers or directors. The General Partner manages
and controls the Registrant and has general responsibility and authority in all
matters affecting its business.
The names of the directors and executive officers of United Investors Real
Estate, Inc. ("UIRE"), the Partnership's General Partner, as of December 31,
1995, their ages and the nature of all positions with UIRE presently held by
them are set forth below. There are no family relationships between or among
any officers and directors.
Name Age Position
Carroll D. Vinson 55 President, Director
Robert D. Long, Jr. 28 Controller, Principal
Accounting Officer
William H. Jarrard, Jr. 49 Vice President
John K. Lines 36 Secretary
Kelley M. Buechler 38 Assistant Secretary
Carroll D. Vinson has been President of the General Partner and Metropolitan
Asset Enhancement, L.P. ("MAE"), subsidiaries since August 1994. Prior to that,
during 1993 to August 1994, Mr. Vinson was affiliated with Crisp, Hughes & Co.
(regional CPA firm) and engaged in various other investment and consulting
activities. Briefly, in early 1993, Mr. Vinson served as President and Chief
Executive Officer of Angeles Corporation, a real estate investment firm. From
1991 to 1993, Mr. Vinson was employed by Insignia in various capacities
including Managing Director-President during 1991. From 1986 to 1990, Mr.
Vinson was President and Director of U.S. Shelter Corporation, a real estate
services company, which sold substantially all of its assets to Insignia in
December 1990.
Robert D. Long, Jr. is Controller and Principal Accounting Officer of the
General Partner and MAE subsidiaries. Prior to joining MAE in February 1994, he
was an auditor for the State of Tennessee and was associated with the accounting
firm of Harshman Lewis and Associates. He is a graduate of the University of
Memphis.
William H. Jarrard, Jr. is Vice President of the General Partner and MAE
subsidiaries and Managing Director - Partnership Administration of Insignia.
During the five years prior to joining Insignia in 1991, he served in a similar
capacity for U.S. Shelter. He was previously associated with the accounting
firm, Ernst & Whinney, for eleven years. Mr. Jarrard is a graduate of the
University of South Carolina and a certified public accountant.
John K. Lines has been Secretary of the General Partner and MAE subsidiaries
since August 1994 and General Counsel and Secretary of Insignia since July 1994.
From May 1993 until June 1994, Mr. Lines was the Assistant General Counsel and
Vice President of Ocwen Financial Corporation in West Palm Beach, Florida. From
October 1991 until April 1993, Mr. Lines was a Senior Attorney with Banc One
Corporation in Columbus, Ohio. From May 1984 until October 1991, Mr. Lines was
employed as an associate with Squire Sanders & Dempsey in Columbus, Ohio.
Kelley M. Buechler is Assistant Secretary of the General Partner and MAE
subsidiaries and Assistant Secretary of Insignia. During the five years prior
to joining Insignia in 1991, she served in a similar capacity for U.S. Shelter.
Ms. Buechler is a graduate of the University of North Carolina.
Item 10. Executive Compensation
None of the directors and officers of the General Partner received any
remuneration from the Registrant.
Item 11. Security Ownership of Certain Beneficial Owners and Management
As of February, 1996, no person was known by the Registrant to be the
beneficial owner of more than five percent of the outstanding Units of the
Registrant.
As of February, 1996, no Units were owned by the General Partner or any of
its officers and directors.
Item 12. Certain Relationships and Related Transactions
Pursuant to the Agreement of Limited Partnership of the Registrant, the
General Partner was allocated $2,986 of the Registrant's 1995 net income and
$5,007 of the Registrant's 1994 income. During 1995 and 1994, the General
Partner received distributions of $6,556 and $8,820, respectively. For a
description of the distributions and the allocation of income and loss to which
the General Partner is entitled, reference is made to "Note C" of the financial
statements included in "Item 7" of this report.
The Registrant has property management agreements with affiliates of
Insignia pursuant to which such affiliates have assumed direct responsibility
for day-to-day management of the Partnership's properties. This service
includes the supervision of leasing, rent collection, maintenance, budgeting,
employment of personnel, payment of operating expenses, etc. Insignia
affiliates received property management fees equal to 5% of apartment revenues
and 6% of commercial revenues. During the twelve months ended December 31, 1995
and 1994, affiliates of Insignia received $78,097 and $87,977 in fees for
property management, respectively.
Pursuant to Section 9(e) of the Registrant's Agreement of Limited
Partnership, the General Partner may be reimbursed by the Registrant for certain
of its administrative costs. The Partnership shall reimburse the General
Partner or its affiliates the actual cost of goods, materials, and services
obtained from unaffiliated parties. Administrative services performed by the
General Partner or its affiliates shall be reimbursed at cost; provided,
however, that the amounts charged do not exceed the lesser of (1) the actual
cost of such services, or (2) 90% of the amount which the Partnership would be
required to pay to an independent party for comparable services in the same
geographic location.
For a further description of payments made by the Registrant to affiliates
for services and as reimbursement of certain expenses incurred by affiliates on
behalf of the Registrant, see "Note D" of the financial statements included in
"Item 7" of this report.
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits: See Exhibit Index contained herein.
(b) Reports on Form 8-K file in the fourth quarter of fiscal year
1995:
None.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
UNITED INVESTORS INCOME PROPERTIES
(A Missouri Limited Partnership)
By: United Investors Real Estate, Inc.,
a Delaware Corporation,
its General Partner
By: /s/Carroll D. Vinson
Carroll D. Vinson
President
Date: March 20, 1996
In accordance with the Exchange Act, this report has been signed below by
the following person on behalf of the Registrant and in the capacities and on
the date indicated.
/s/Carroll D. Vinson President Date: March 20,1996
Carroll D. Vinson
/s/Robert D. Long, Jr. Controller and Principal Date: March 20, 1996
Robert D. Long, Jr. Accounting Officer
INDEX TO EXHIBITS
Exhibit
1 Form of Dealer Manager Agreement between the General Partner and the
Dealer Manager, including Form of Soliciting Broker Agreement;
incorporated by reference to Exhibit 1 to Registrant's Amendment to
Registration Statement (File No. 33-20350) previously filed on May 2,
1988.
1.1 Amendment to Dealer Manager Agreement; incorporated by reference to
Exhibit 1.1 to Post-Effective Amendment No. 2 to Registrant's
Registration Statement previously filed on March 21, 1989.
4.1 Form of Subscription Agreement; incorporated by reference as part of
the Prospectus of Registrant contained in Registrant's Amendment to
Registration Statement previously filed on May 2, 1988.
4.2 Form of Agreement of Limited Partnership of Registrant; incorporated
by reference as part of the Prospectus of Registrant contained in
Registrant's Amendment to Registration Statement previously filed on
May 2, 1988.
4.3 Tenth Amendment to Agreement of Limited Partnership of Registrant;
incorporated by reference to Exhibit 4.3 to Registrant's Quarterly
Report on Form 10-Q previously filed on May 15, 1989.
10.1 Escrow Agreement among the Registrant, the General Partner, the Dealer
Manager, and Boston Safe Deposit & Trust Company; incorporated by
reference to Exhibit 10.1 to Registrant's Amendment to Registration
Statement previously filed on May 2, 1988.
10.1.1 Amendment to Escrow Agreement; incorporated by reference to Exhibit
10.1.1 to Post-Effective Amendment No. 5 to Registrant's Registration
Statement previously filed on October 19, 1989.
10.2 Agreement of Purchase and Sale, dated June 22, 1988, between United
Investors Real Estate, Inc., as nominee for United Investors Income
Properties, as purchaser, and Nilsen/Bay Ridge Development, Inc. and
MBIV Development, as seller, relating to Bronson Place Apartments;
incorporated by reference to Exhibit 10.1 to Registrant's Quarterly
Report on Form 10-Q previously filed on August 11, 1988.
10.3 Agreement of Purchase and Sale, dated October 20, 1988, between United
Investors Real Estate, Inc., as purchaser, and Defoors Crossing
Associates, Ltd., as seller, relating to Defoors Crossing Apartments,
and amendments thereto; incorporated by reference to Exhibit 10.3 to
Post-Effective Amendment No. l to Registrant's Registration Statement
previously filed on February 1, 1989.
10.4 Agreement of Purchase and Sale, dated June 29, 1989, between United
Investors Real Estate, Inc., as purchaser and CMW Properties, as
seller, relating to Meadow Wood Apartments, and amendments thereto;
incorporated by reference to Exhibit 10.4 to Registrant's Current
Report on Form 8-K previously filed on October 17, 1989.
10.5 Agreement of Purchase and Sale, dated December 21, 1989, between
United Investors Real Estate, Inc., as purchaser, and Corners Medical
Group,Inc., as seller, relating to Peachtree Corners Medical Building,
and amendments thereto; incorporated by reference to Exhibit 10.5 to
Registrant's Quarterly Report on Form 10-Q previously filed on May 15,
1990.
10.6 Agreement of Purchase and Sale, dated June 29, 1990, between United
Investors Real Estate, Inc., as purchaser, and American Fire Sprinkler
Corporation, as seller, relating to Corinth Square Professional
Building; incorporated by reference to Exhibit 10.6 to Registrant's
Quarterly Report on Form 10-Q previously filed on August 15, 1990.
10.7 Agreement of Joint Venture of Corinth Square Associates dated October
1, 1990 between the Registrant and United Investors Income Properties
II; incorporated by reference to Exhibit 4.4 to Registrant's Current
Report on Form 8-K previously filed on October 23, 1990.
10.8 Stock Purchase Agreement dated December 4, 1992 showing the purchase
of 100% of the outstanding stock of United Investors Real Estate, Inc.
by MAE GP Corporation; incorporated by reference to Exhibit 10.8 to
Registrant's Current Report on Form 8-K previously filed on
December 31, 1992.
16.1 Letter of KPMG Peat Marwick to the Securities and Exchange Commission
included herein pursuant to the requirements of Item 304 (a) (3) of
Regulation S-K; incorporated by reference to Exhibit 16.1 to
Registrant's Current Report on Form 8-K previously filed on October
22, 1990.
16.2 Letter of Mayer Hoffman McCann, the Registrant's former independent
accountant, regarding its concurrence with the statements made by the
Registrant is incorporated by reference to the exhibit filed with Form
8-K dated August 30, 1993.
27 Financial Date Schedule
99.1 Portions of Prospectus of Registrant dated May 4, 1988; incorporated
by reference to Exhibit 99.1 to Registrant's Report on Form 10-K
previously filed on March 6, 1991.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from United
Investors Income Properties 1995 Year-End 10-KSB and is qualified in its
entirety by reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000830056
<NAME> UNITED INVESTORS INCOME PROPERTIES
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 636,887
<SECURITIES> 0
<RECEIVABLES> 15,024
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 12,040,237
<DEPRECIATION> 2,253,072
<TOTAL-ASSETS> 11,240,603
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 11,114,371
<TOTAL-LIABILITY-AND-EQUITY> 11,240,603
<SALES> 0
<TOTAL-REVENUES> 1,607,832
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,382,800
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 298,640
<EPS-PRIMARY> 4.84
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
</TABLE>
