FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT
UNDER SECTION 13 OR 15(D)
[X] Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934 [No Fee Required]
For the fiscal year ended December 31, 1996
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 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: $1,721,000
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, 1996: 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. 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. 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 Financial Group, Inc., "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:
Date of Type of
Property Purchase Ownership (1) Use
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.
(1) None of the Registrant's properties are encumbered by mortgage financing.
SCHEDULE OF PROPERTIES:
(dollar amounts in thousands)
Gross
Carrying Accumulated Useful Federal
Property Value Depreciation life Method Tax Basis
Bronson Place $ 3,418 $ 862 5-40 yrs S/L $2,583
Defoors Crossing 3,329 700 5-40 yrs S/L 2,628
Meadow Wood 3,550 769 5-40 yrs S/L 2,783
Peachtree Corners 1,890 282 15-40 yrs S/L 1,751
Totals $12,187 $2,613 $9,745
See "Note A" of the Notes to Financial Statements in "Item 7" for a description
of the Partnership's depreciation policy.
SCHEDULE OF RENTAL RATES AND OCCUPANCY:
(dollar amounts in thousands)
<TABLE>
<CAPTION>
Average Annual Average Annual
Rental Rates Occupancy
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Bronson Place $7,742/per unit $7,612/per unit 94% 91%
Defoors Crossing 8,483/per unit 7,789/per unit 92%(a) 98%
Meadow Wood 6,680/per unit 6,704/per unit 94% 92%
Peachtree Corners 13.46/per sq.ft. 16.71/per sq.ft. 60%(b) 21%
<FN>
(a)Defoors Crossing Apartments - The decrease in occupancy is due to a
stronger local housing market and job transfers.
(b)Peachtree Corners - The increase in occupancy is due to successful
marketing efforts and property improvements made to attract, long-term
tenants.
</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 localities in which they operate. 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 1997-2006:
Number of Annual Rent % of Gross
Expirations Square Feet (in thousands) Annual Rent
1997 - 2001 0 0 $ 0 0
2002 1 1,967 28 26.4%
2003 1 3,738 54 50.6%
2004 0 0 0 0
2005 1 3,521 53 49.6%
2006 0 0 0 0
SCHEDULE OF REAL ESTATE TAXES AND RATES:
(dollar amounts in thousands)
1996 1996
Taxes Rate
Bronson Place $ 37 1.21%
Defoors Crossing 40 2.06%
Meadow Wood 60 1.22%
Peachtree Corners 14 1.44%
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, 1996, 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
At December 31, 1996, the number of holders of record of Limited Partnership
Units was 1,890. 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
approximately $617,000 and $656,000 during the years ended December 31, 1996 and
1995, respectively. 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 $475,000 for the year ended December
31, 1996, compared to $299,000 for the year ended December 31, 1995. The
increase in net income is primarily due to an increase in rental income
resulting from increased rental rates at Bronson Place and Defoors Crossing.
Also contributing to increased rental income was the significant increase in
occupancy at Peachtree Corners Medical Building.
Total expenses also decreased due to a decrease in maintenance expenses
resulting from exterior painting projects at Bronson Place, Defoors Crossing and
Meadow Wood Apartments during 1995. Included in maintenance expense during 1996
is approximately $26,000 of major repairs and maintenance comprised primarily of
exterior building repairs and parking lot repairs. Joint Venture income
decreased in 1996 because of increased operating costs.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of its investment properties to assess
the feasibility of increasing rents, maintaining or increasing occupancy levels
and protecting the Partnership from increases in expense. Due to changing
market conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1996, the Partnership held unrestricted cash of $633,000
compared to $637,000 at December 31, 1995. Net cash provided by operating
activities increased as a result of increased rental income and decreased
maintenance expense as discussed above. Net cash used in financing activities
decreased in 1996 due to a decrease in distributions made to partners during
1996 compared to 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 property to adequately maintain the physical assets
and other operating needs of the Partnership. 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 to
partners of $617,000 were made during 1996 compared to distributions of $656,000
made during 1995.
ITEM 7. FINANCIAL STATEMENTS
UNITED INVESTORS INCOME PROPERTIES
LIST OF FINANCIAL STATEMENTS
Independent Auditors' Report
Balance Sheet - December 31, 1996
Statements of Operations - Years ended December 31, 1996 and 1995
Statements of Changes in Partners' Capital (Deficit) - Years
ended December 31, 1996 and 1995
Statements of Cash Flows - Years ended December 31, 1996 and 1995
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, 1996, 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, 1996. 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, 1996 and
the results of its operations and its cash flows for each of the two years in
the period ended December 31, 1996 in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
Greenville, South Carolina
February 21, 1997
UNITED INVESTORS INCOME PROPERTIES
BALANCE SHEET
(in thousands, except unit data)
December 31, 1996
Assets
Cash and cash equivalents:
Unrestricted $ 633
Restricted-tenant security deposits 49
Accounts receivable 9
Escrows for taxes 69
Other assets 85
Investment properties (Notes A and G):
Land $ 1,862
Buildings and related personal property 10,325
12,187
Less accumulated depreciation (2,613) 9,574
Investment in Joint Venture (Note B) 671
$11,090
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 17
Tenant security deposits 49
Other liabilities 22
Partners' Capital (Deficit) (Note C)
General partner $ (23)
Limited partners (61,063 units
issued and outstanding) 11,025 11,002
$11,090
See Accompanying Notes to Financial Statements
UNITED INVESTORS INCOME PROPERTIES
STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended December 31,
1996 1995
Revenues:
Rental income $ 1,616 $ 1,502
Other income 105 113
Total revenues 1,721 1,615
Expenses:
Operating 492 479
General and administrative 76 75
Maintenance 180 285
Depreciation 360 348
Property taxes 153 149
Total expenses 1,261 1,336
Equity in net income of joint venture (Note B) 15 20
Net income (Note F) $ 475 $ 299
Net income allocated to general partner (1%) $ 5 $ 3
Net income allocated to limited partners (99%) 470 296
$ 475 $ 299
Net income per limited partnership unit $ 7.70 $ 4.84
See Accompanying Notes to Financial Statements
UNITED INVESTORS INCOME PROPERTIES
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partners Partners Total
Original capital contributions 61,063 $ -- $15,266 $15,266
Partners' capital (deficit) at
December 31, 1994 61,063 $ (18) $11,519 $11,501
Partners' distributions -- (7) (649) (656)
Net income for the year ended
December 31, 1995 -- 3 296 299
Partners' capital (deficit) at
December 31, 1995 61,063 (22) 11,166 11,144
Partners' distributions -- (6) (611) (617)
Net income for the year ended
December 31, 1996 -- 5 470 475
Partners' capital (deficit) at
December 31, 1996 61,063 $ (23) $11,025 $11,002
See Accompanying Notes to Financial Statements
UNITED INVESTORS INCOME PROPERTIES
STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 475 $ 299
Adjustments to reconcile net income to
net cash provided by operating activities:
Equity in net income of joint venture (15) (20)
Depreciation 360 348
Amortization of lease commissions 6 1
Change in accounts:
Restricted cash (2) --
Accounts receivable 6 (3)
Escrows for taxes (21) 1
Other assets (41) (20)
Accounts payable 6 (8)
Tenant security deposit liabilities 2 (6)
Other liabilities (16) (9)
Net cash provided by operating activities 760 583
Cash flows from investing activities:
Property improvements and replacements (147) (162)
Distributions from joint venture -- 4
Net cash used in investing activities (147) (158)
Cash flows from financing activities:
Partners' distributions (617) (656)
Net cash used in financing activities (617) (656)
Net decrease in cash and cash equivalents (4) (231)
Cash and cash equivalents at beginning of year 637 868
Cash and cash equivalents at end of year $ 633 $ 637
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
UNITED INVESTORS INCOME PROPERTIES
NOTES TO FINANCIAL STATEMENTS
(December 31, 1996)
NOTE A - ORGANIZATION AND 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.
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.
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.
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 individually.
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.
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 is deferred rental income and leasing
commissions which are 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 $31,000 and $28,000 for
the years ended December 31, 1996 and 1995, respectively.
Reclassifications: Certain reclassifications have been made to the 1995
information to conform to the 1996 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, 1996, is as
follows (dollar amounts in thousands):
December 31,
1996
Assets
Commercial properties, net $1,727
Other assets 231
Total $1,958
Liabilities and Partners' Capital
Liabilities $ 42
Partners' capital 1,916
Total $1,958
Condensed statements of operations of Corinth for the years ended December 31,
1996 and 1995, are as follows (dollar amounts in thousands):
Years Ended December 31,
1996 1995
Revenue $ 311 $ 260
Costs and Expenses (267) (204)
Net income $ 44 $ 56
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 14, 1997, the Partnership paid a
distribution to the partners of $154,000.
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
(dollar amounts in thousands)
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. Property management fees
are included in operating expenses. The following payments were made to
affiliates of the General Partner in 1996 and 1995:
1996 1995
Property management fees $ 82 $ 78
Reimbursement for services of affiliates 32 30
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, 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 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, 1996, are as follows (in thousands):
Years Ending December 31,
1997 $ 126
1998 129
1999 132
2000 137
2001 141
Thereafter 282
$ 947
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 tax return for the years ended December 31, 1996 and 1995
(in thousands, except per unit data):
1996 1995
Net income as reported $ 475 $ 299
Add (deduct):
Deferred revenue and other
liabilities (6) (5)
Depreciation differences -- (4)
Nondeductible reserves and allowances -- (6)
Accrued expenses 1 2
Deferred charges and other assets (26) 3
Federal taxable income $ 444 $ 289
Federal taxable income per limited
partnership unit $7.21 $4.68
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets at December 31, 1996 (in thousands):
Net assets as reported $11,002
Differences in basis of assets and liabilities:
Deferred revenue and other liabilities (42)
Accumulated depreciation 21
Commercial property at cost 150
Deferred charges and other assets (9)
Other 3
Syndication costs 1,902
Net assets - tax basis $13,027
NOTE G - INVESTMENT PROPERTIES AND ACCUMULATED DEPRECIATION
(dollar amounts in thousands)
Initial cost
To Partnership
Cost
Buildings Capitalized
and Related (Removed)
Personal Subsequent to
Description Land Property Acquisition
Bronson Place Apartments $ 501 $2,568 $ 349
Defoors Crossing Apartments 520 2,480 329
Meadow Wood Apartments 501 2,884 165
Peachtree Corners Medical Bldg. 340 1,396 199
Bldg. (45)
Totals $1,862 $9,328 $ 997
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1996
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 $ 501 $ 2,917 $ 3,418 $ 862 1988 11/01/88 5-40
Defoors Crossing Apartments 520 2,809 3,329 700 1988 05/01/89 5-40
Meadow Wood Apartments 501 3,049 3,550 769 1988 10/02/89 5-40
Peachtree Corners Medical
Building 340 1,550 1,890 282 1989 06/01/90 15-40
Totals $1,862 $10,325 $12,187 $2,613
</TABLE>
Reconciliation of "Investment Properties and Accumulated Depreciation":
Years Ended December 31,
1996 1995
Investment Properties
Balance at beginning of year $12,040 $11,878
Property improvements 147 162
Balance at end of year $12,187 $12,040
Accumulated Depreciation
Balance at beginning of year $ 2,253 $ 1,905
Amounts charged to expense 360 348
Balance at end of year $ 2,613 $ 2,253
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1996, is approximately $12,337,000. The accumulated depreciation
taken for Federal income tax purposes at December 31, 1996, is approximately
$2,592,000.
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,
1996, 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 56 President, Director
William H. Jarrard, Jr. 50 Vice President
Robert D. Long, Jr. 29 Controller, Principal
Accounting Officer
John K. Lines 37 Secretary
Kelley M. Buechler 39 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.
William H. Jarrard, Jr. has been Vice President of UIRE since December 1992
and Managing Director - Partnership Administration of Insignia since 1991. Mr.
Jarrard served as Managing Director - Partnership Administration and Asset
Management for Insignia from July 1994 until January 1996.
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.
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.
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 March 1997, 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 March 1997, no Units were owned by the General Partner or any of its
officers and directors.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1996 and 1995, the General Partner received distributions of $6,000
and $7,000, 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 Notes to 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 receive
property management fees equal to 5% of apartment revenues and 6% of commercial
revenues. During the twelve months ended December 31, 1996 and 1995, affiliates
of Insignia received $82,000 and $78,000 of 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. During the years ended
December 31, 1996 and 1995, affiliates of Insignia received $32,000 and $30,000,
respectively, of such reimbursements.
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 Notes to 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 1996:
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 27, 1997
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 27,1997
Carroll D. Vinson
/s/Robert D. Long, Jr. Controller and Principal Date: March 27, 1997
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 Data 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 1996 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> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 633
<SECURITIES> 0
<RECEIVABLES> 9
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 12,187
<DEPRECIATION> 2,613
<TOTAL-ASSETS> 11,090
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 11,002
<TOTAL-LIABILITY-AND-EQUITY> 11,090
<SALES> 0
<TOTAL-REVENUES> 1,721
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,261
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 475
<EPS-PRIMARY> 7.70<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
