FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] 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 0-17646
UNITED INVESTORS INCOME PROPERTIES
(Exact name of small business issuer as specified in its charter)
Missouri 43-1483942
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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___
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
UNITED INVESTORS INCOME PROPERTIES
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 473
Receivables and deposits 59
Other assets 33
Investment properties:
Land $ 1,522
Buildings and related personal property 9,416
10,938
Less accumulated depreciation (3,641) 7,297
Investment in joint venture 7
$ 7,869
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 6
Tenant security deposit liabilities 49
Accrued property taxes 27
Other liabilities 77
Partners' (Deficit) Capital
General partner $ (54)
Limited partners (61,063 units
issued and outstanding) 7,764 7,710
$ 7,869
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
b)
UNITED INVESTORS INCOME PROPERTIES
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Revenues (Restated) (Restated)
<S> <C> <C> <C> <C>
Rental income $ 420 $ 428 $ 1,274 $ 1,258
Other income 35 35 108 107
Total revenues 455 463 1,382 1,365
Expenses:
Operating 175 184 506 485
General and administrative 29 49 101 135
Depreciation 95 87 290 259
Property taxes 41 11 118 79
Total expenses 340 331 1,015 958
Income before equity in (loss) income
of joint venture and discontinued
operation 115 132 367 407
Equity in (loss) income of joint venture (1) 7 10 22
Income from continuing operations 114 139 377 429
Impairment loss on discontinued operation -- (600) -- (600)
Income (loss) from discontinued operation -- 3 (11) 14
Net income (loss) $ 114 $ (458) $ 366 $ (157)
Net income (loss) allocated to general
partner (1%) $ 1 $ (5) $ 4 $ (2)
Net income (loss) allocated to limited
partners (99%) 113 (453) 362 (155)
$ 114 $ (458) $ 366 $ (157)
Per limited partnership unit:
Income from continuing operations $ 1.85 $ 2.26 $ 6.11 $ 6.96
Impairment loss on discontinued
operation -- (9.73) -- (9.73)
Income (loss) from discontinued
operation -- 0.05 (0.18) 0.23
Net income (loss) $ 1.85 $ (7.42) $ 5.93 $ (2.54)
Distributions per limited
partnership unit $ -- $ 11.84 $ 27.30 $ 16.83
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
c)
UNITED INVESTORS INCOME PROPERTIES
STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 61,063 $ -- $15,266 $15,266
Partners' (deficit) capital at
December 31, 1999 61,063 $ (41) $ 9,069 $ 9,028
Distributions to partners -- (17) (1,667) (1,684)
Net income for the nine months
ended September 30, 2000 -- 4 362 366
Partners' (deficit) capital
at September 30, 2000 61,063 $ (54) $ 7,764 $ 7,710
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
d)
UNITED INVESTORS INCOME PROPERTIES
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income (loss) $ 366 $ (157)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Equity in net income of joint venture (10) (22)
Depreciation 290 307
Impairment loss on discontinued operation -- 600
Amortization of lease commissions -- 5
Change in accounts:
Receivables and deposits 95 (10)
Other assets 5 (18)
Accounts payable (72) (9)
Tenant security deposit liabilities 6 --
Accrued property taxes 27 27
Other liabilities (26) 4
Net cash provided by operating activities 681 727
Cash flows from investing activities:
Property improvements and replacements (103) (114)
Distributions from joint venture 12 29
Proceeds from sale of joint venture property 400 --
Net cash provided by (used in) investing
activities 309 (85)
Cash flows used in financing activities:
Distributions to partners (1,684) (308)
Net (decrease) increase in cash and cash equivalents (694) 334
Cash and cash equivalents at beginning of period 1,167 928
Cash and cash equivalents at end of period $ 473 $ 1,262
Supplemental disclosure of non-cash financing activity:
Distribution payable $ -- $ 730
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
e)
UNITED INVESTORS INCOME PROPERTIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements of United Investors Income
Properties (the "Partnership" or "Registrant") have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of United Investors Real Estate, Inc. (the "General Partner"), a
Delaware corporation, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and nine month periods ended September 30, 2000, are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 2000. For further information, refer to the financial
statements and footnotes thereto included in the Partnership's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1999.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment Investment and Management Company ("AIMCO"), a publicly
traded real estate investment trust, with AIMCO being the surviving corporation
(the "Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in
the General Partner. The General Partner does not believe that this transaction
has had or will have a material effect on the affairs and operations of the
Partnership.
Note C - 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 and
for reimbursement of certain expenses incurred by affiliates on behalf of the
Partnership. The following payments were made to affiliates of the General
Partner during the nine month periods ended September 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating expenses) $ 69 $ 67
Reimbursement for services of affiliates (included in
general and administrative expenses) 37 28
Due to affiliate (included in other liabilities) 21 --
During the nine months ended September 30, 2000 and 1999, affiliates of the
General Partner were entitled to receive 5% of gross receipts from all of the
Partnership's residential properties as compensation for providing property
management services. The Partnership paid to such affiliates approximately
$69,000 and $67,000 for the nine months ended September 30, 2000 and 1999,
respectively.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $37,000 and $28,000 for the
nine months ended September 30, 2000 and 1999, respectively.
For acting as real estate broker in connection with the 1999 sale of Peachtree
Corners Medical Building, the General Partner earned a real estate commission of
approximately $21,000. The commission was accrued at September 30, 2000 and is
included in other liabilities. However, this amount is not payable until the
limited partners receive an amount equal to their adjusted capital investment
and a cumulative distribution equal to an 8% annual return from the last
additional closing date or, if greater, a 6% cumulative annual return from his
date of admission to the Partnership. At September 30, 2000, the limited
partners had not received their return.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 14,402 limited partnership
units in the Partnership representing 23.59% of the outstanding units. A number
of these units were acquired pursuant to tender offers made by AIMCO or its
affiliates. It is possible that AIMCO or its affiliates will make one or more
additional offers to acquire additional limited partnership interests in the
Partnership for cash or in exchange for units in the operating partnership of
AIMCO. Under the Partnership Agreement, unitholders holding a majority of the
Units are entitled to take action with respect to a variety of matters, which
would include without limitation, voting on certain amendments to the
Partnership Agreement and voting to remove the General Partner. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the General Partner because of their affiliation
with the General Partner.
Note D - Investment in Corinth Square Joint Venture
The Partnership had a 35% investment in Corinth Square Joint Venture ("Joint
Venture") with United Investors Income Properties II, an affiliated partnership
in which the General Partner is also the sole general partner. The Partnership
reflects its interest in the Joint Venture utilizing the equity method, whereby
the original investment is increased by advances to the Joint Venture and by the
Partnership's share of the earnings of the Joint Venture. The investment is
decreased by distributions from the Joint Venture and by the Partnership's share
of losses of the Joint Venture.
On December 30, 1999, the Joint Venture sold its only investment property,
Corinth Square, to an unaffiliated third party. The net proceeds were received
by United Investors Income Properties II, of which approximately $400,000 was
the Partnership's pro-rata share. This amount was received by the Partnership in
January 2000.
There are no assets or liabilities remaining on the balance sheet of Corinth
Square at September 30, 2000. The condensed profit and loss statement of the
Joint Venture for the nine months ended September 30, 2000 and 1999, is
summarized as follows (in thousands):
2000 1999
Revenue $ 12 $ 301
Costs and expenses (3) (238)
Income before gain on
sale of property 9 63
Gain on sale of property 20 --
Net income $ 29 $ 63
Note E - Distributions
During the nine months ended September 30, 2000, the Partnership paid
distributions of cash generated from the sale of Peachtree Corners Medical
Building and Corinth Square Joint Venture of approximately $1,003,000
(approximately $993,000 to the limited partners or $16.26 per limited
partnership unit) and approximately $681,000 of cash generated from operations
(approximately $674,000 to the limited partners or $11.04 per limited
partnership unit). Subsequent to September 30, 2000, the Partnership declared
and paid a distribution from operations of approximately $308,000 (approximately
$305,000 to the limited partners or $4.99 per limited partnership unit). During
the nine months ended September 30, 1999, the Partnership paid distributions of
cash generated from operations of approximately $308,000 (approximately $305,000
to the limited partners or $4.99 per limited partnership unit). Subsequent to
September 30, 1999, the Partnership paid a distribution of cash generated from
operations of approximately $730,000 (approximately $723,000 to the limited
partners or $11.84 per limited partnership unit) which was approved and accrued
during the nine months ended September 30, 1999.
Note F - Impairment Loss and Sale of Discontinued Operation
During the three months ended September 30, 1999, the Partnership determined
that the Peachtree Corners Medical Building located in Atlanta, Georgia, with a
carrying value of approximately $1,451,000 was impaired and its value was
written down by approximately $600,000. The fair value was based upon current
economic conditions and projected future operational cash flows.
Peachtree Corners Medical Building was the last commercial property in the
commercial segment of the Partnership. Due to the sale of this property in
December 1999, the statement of operations has been restated and the results of
the commercial segment have been classified as "Income (loss) from discontinued
operation" and "Impairment loss from discontinued operation" for the three and
nine month periods ended September 30, 2000 and 1999. There were no revenues for
this property and the Partnership realized a loss from discontinued operation of
approximately $11,000 during the nine month period ended September 30, 2000.
Revenues of this property were approximately $47,000 and $121,000 for the three
and nine months ended September 30, 1999, respectively. Income from discontinued
operations was approximately $3,000 and $14,000, respectively.
Note G - Segment Reporting
Description of the types of products and services from which the reportable
segment derives its revenues: The Partnership had two reportable segments:
residential properties and commercial property. The Partnership's residential
segment consists of three apartment complexes, one each located in Mountlake
Terrace, Washington; Atlanta, Georgia; and Medford, Oregon. The Partnership
rents apartment units to tenants for terms that are typically twelve months or
less. The commercial property segment consisted of a medical building located in
Atlanta, Georgia. On December 30, 1999, the commercial property held by the
Partnership was sold to an unrelated party. Therefore, the commercial segment is
reflected as discontinued operations (see "Note F - Impairment Loss and Sale of
Discontinued Operation" for further information regarding the commercial
property sale).
Measurement of segment profit or loss: The Partnership evaluates performance
based on segment profit (loss) before depreciation. The accounting policies of
the reportable segments are the same as those of the Partnership as described in
the Partnership's Annual Report on Form 10-KSB for the year ended December 31,
1999.
Factors management used to identify the enterprise's reportable segment: The
Partnership's reportable segments are investment properties that offer different
products and services. The reportable segments are each managed separately
because they provide distinct services with different types of products and
customers.
Segment information for the three and nine month periods ended September 30,
2000 and 1999, is shown in the tables below (in thousands). The "Other" column
includes Partnership administration related items and income and expense not
allocated to the reportable segments.
<TABLE>
<CAPTION>
Three Months Ended
September 30, 2000 Residential Commercial Other Totals
(discontinued)
<S> <C> <C> <C> <C>
Rental income $ 420 $ -- $ -- $ 420
Other income 34 -- 1 35
Depreciation 95 -- -- 95
General and administrative
expense -- -- 29 29
Equity in loss of joint
venture -- -- (1) (1)
Segment profit (loss) 143 -- (29) 114
Nine Months Ended
September 30, 2000 Residential Commercial Other Totals
(discontinued)
Rental income $ 1,274 $ -- $ -- $ 1,274
Other income 101 -- 7 108
Depreciation 290 -- -- 290
General and administrative
expense -- -- 101 101
Loss from discontinued
operation -- (11) -- (11)
Equity in income of joint
venture -- -- 10 10
Segment profit (loss) 461 (11) (84) 366
Total assets 7,781 -- 88 7,869
Capital expenditures for
investment properties 103 -- -- 103
Three Months Ended
September 30, 1999 Residential Commercial Other Totals
(discontinued)
Rental income $ 428 $ -- $ -- $ 428
Other income 31 -- 4 35
Depreciation 87 -- -- 87
General and administrative
expense -- -- 49 49
Income from discontinued
operation -- 3 -- 3
Impairment loss on
discontinued operation -- (600) -- (600)
Equity in income of joint
venture -- -- 7 7
Segment profit (loss) 177 (597) (38) (458)
Nine Months Ended
September 30, 1999 Residential Commercial Other Totals
(discontinued)
Rental income $ 1,258 $ -- $ -- $ 1,258
Other income 88 -- 19 107
Depreciation 259 -- -- 259
General and administrative
expense -- -- 135 135
Income from discontinued
operation -- 14 -- 14
Impairment loss on
discontinued operation -- (600) -- (600)
Equity in income of joint
Venture -- -- 22 22
Segment profit (loss) 523 (586) (94) (157)
Total assets 8,297 998 1,206 10,501
Capital expenditures for
investment properties 114 -- -- 114
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Partnership from time to time.
The discussion of the Partnership's business and results of operations,
including forward-looking statements pertaining to such matters, does not take
into account the effects of any changes to the Partnership's business and
results of operations. Accordingly, actual results could differ materially from
those projected in the forward-looking statements as a result of a number of
factors, including those identified herein.
The Partnership's investment properties consist of three apartment complexes.
The following table sets forth the average occupancy of the properties for each
of the nine months ended September 30, 2000 and 1999:
Average Occupancy
Property 2000 1999
Bronson Place Apartments 92% 94%
Mountlake Terrace, Washington
Meadow Wood Apartments 97% 93%
Medford, Oregon
Defoors Crossing Apartments 96% 95%
Atlanta, Georgia
The General Partner attributes the increased occupancy at Meadow Wood Apartments
to increased advertising and move in incentives and exterior improvements
completed to increase the curb appeal of the property.
Results of Operations
The Partnership realized net income of approximately $366,000 for the nine
months ended September 30, 2000, compared to a net loss of approximately
$157,000 for the nine months ended September 30, 1999. The Partnership's net
income for the three months ended September 30, 2000, was approximately $114,000
compared to a net loss of approximately $458,000 for the three months ended
September 30, 1999. The increase in net income for the three and nine month
periods ended September 30, 2000, is primarily due to an impairment loss on the
discontinued operation of Peachtree Corners Medical Building, as discussed
below.
Excluding the discontinued operation and the equity in (loss) income of the
joint venture which was sold December 30, 1999, as discussed below, the
Partnership had income of approximately $367,000 for the nine months ended
September 30, 2000, compared to income of approximately $407,000 for the nine
months ended September 30, 1999. Excluding the discontinued operation and the
equity in (loss) income of the joint venture, the Partnership had income of
approximately $115,000 for the three months ended September 30, 2000, compared
to income of approximately $132,000 for the three months ended September 30,
1999. Income decreased for the nine months ended September 30, 2000 due to an
increase in total expenses partially offset by an increase in total revenues.
Income decreased for the three months ended September 30, 2000, due to an
increase in total expenses and a decrease in total revenues.
Total expenses increased for the nine month period ended September 30, 2000
primarily due to increased depreciation, property tax, and operating expenses
which were partially offset by decreased general and administrative expenses.
Total expenses increased for the three month period ended September 30, 2000
primarily due to increased depreciation and property tax expense partially
offset by decreased operating and general and administrative expenses.
Depreciation expense increased for the three and nine month periods ended
September 30, 2000 due to capital improvements completed during the past twelve
months. Property tax expense increased for the three and nine month periods
ended September 30, 2000 due to a tax refund received by Meadow Wood Apartments
in 1999. Operating expenses increased for the nine months ended September 30,
2000 due to an increase in advertising at Bronson Place Apartments and Defoors
Crossing Apartments and increased maintenance expenses at Bronson Place
Apartments and Meadow Wood Apartments. Operating expenses decreased for the
three month period ended September 30, 2000 due to a decrease in repairs and
maintenance expenses at Bronson Place Apartments for that period. General and
administrative expense decreased for the three and nine month periods ended
September 30, 2000 primarily due to a decrease in professional fees related to
the oversight of the Partnership. Included in general and administrative
expenses are reimbursements to the General Partner allowed under the Partnership
Agreement associated with its management of the Partnership. Costs associated
with the quarterly and annual communications with investors and regulatory
agencies and the annual audit required by the Partnership Agreement are also
included.
The increase in total revenues for the nine month period ended September 30,
2000 was due to increased rental income. The decrease in total revenues for the
three month period ended September 30, 2000 was due to decreased rental income.
Other income for both periods remained constant. Rental income increased for the
nine month period ended September 30, 2000 primarily due to increased average
rental rates at all of the Partnership's properties and improved occupancy at
Meadow Wood and Defoors Crossing Apartments which more than offset the decrease
in occupancy at Bronson Place Apartments. Rental income decreased for the three
month period ended September 30, 2000 primarily due to increased concessions and
bad debt expense and decreased occupancy at Bronson Place Apartments.
The Partnership had a 35% investment in Corinth Square Joint Venture ("Joint
Venture"). For the nine months ended September 30, 2000, the Partnership
realized equity in the income of the Joint Venture property of approximately
$10,000, and for the nine months ended September 30, 1999, the Partnership
realized equity in the income of the Joint Venture property of approximately
$22,000. For the three month period ended September 30, 2000, the Partnership
realized equity in the loss of the Joint Venture property of approximately
$1,000, and for the three month period ended September 30, 1999, the Partnership
realized equity in the income of the Joint Venture property of approximately
$7,000. On December 30, 1999, the Joint Venture sold its only investment
property, Corinth Square, to an unaffiliated third party.
During the three months ended September 30, 1999, the Partnership determined
that the Peachtree Corners Medical Building located in Atlanta, Georgia, with a
carrying value of approximately $1,451,000, was impaired and its value was
written down by approximately $600,000. The fair value was based upon current
economic conditions and projected future operational cash flows.
Peachtree Corners Medical Building was the last commercial property in the
commercial segment of the Partnership. Due to the sale of this property in
December 1999, the results of the commercial segment have been classified as
"Income (loss) from discontinued operation" and "Impairment loss from
discontinued operation" for the three and nine month periods ended September 30,
2000 and 1999. There were no revenues for this property and the Partnership
realized a loss from discontinued operation of approximately $11,000 during the
nine month period ended September 30, 2000. Revenues of this property were
approximately $47,000 and $121,000 for the three and nine months ended September
30, 1999, respectively. Income from discontinued operations was approximately
$3,000 and $14,000, respectively.
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. As part of this plan,
the General Partner attempts to protect the Partnership from the burden of
inflation-related increases in expenses by increasing rents and maintaining a
high overall occupancy level. 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 September 30, 2000, the Partnership had cash and cash equivalents of
approximately $473,000 compared to approximately $1,262,000 at September 30,
1999. Cash and cash equivalents decreased by approximately $694,000 from the
Partnership's year ended December 31, 1999, due to approximately $1,684,000 of
cash used in financing activities, which was partially offset by approximately
$681,000 of cash provided by operating activities and approximately $309,000 of
cash provided by investing activities. Cash used in financing activities
consisted of distributions paid to the partners. Cash provided by investing
activities consisted primarily of proceeds from the sale of the Corinth Square
Joint Venture property and, to a lesser extent, distributions received from the
Joint Venture, which were partially offset by property improvements and
replacements. The Partnership invests its working capital reserves in money
market accounts.
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 and other operating needs of the Partnership and to comply with
Federal, state and local legal and regulatory requirements. Capital improvements
planned for each of the Partnership's properties are detailed below.
Bronson Place
During the nine months ended September 30, 2000, the Partnership spent
approximately $26,000 on capital improvements at Bronson Place Apartments,
consisting primarily of structural improvements, appliances, carpet and vinyl
replacements, and clubhouse renovations. These improvements were funded from
cash flow from operations. The Partnership has evaluated the capital improvement
needs of the property for the year 2000. The amount budgeted is approximately
$38,000, consisting primarily of carpet and vinyl replacements and plumbing
upgrades. Additional improvements may be considered and will depend on the
physical condition of the property as well as anticipated cash flow generated by
the property.
Meadow Wood
During the nine months ended September 30, 2000, the Partnership spent
approximately $64,000 on capital improvements at Meadow Wood Apartments,
consisting primarily of appliances, carpet and vinyl replacements, and parking
lot improvements. These improvements were funded from cash flow from operations.
The Partnership has evaluated the capital improvement needs of the property for
the year 2000. The amount budgeted is approximately $112,000, consisting
primarily of air conditioning unit replacement, parking lot improvements,
structural improvements, appliances, and carpet and vinyl replacements.
Additional improvements may be considered and will depend on the physical
condition of the property as well as anticipated cash flow generated by the
property.
Defoors Crossing
During the nine months ended September 30, 2000, the Partnership spent
approximately $13,000 on capital improvements at Defoors Crossing Apartments,
consisting primarily of carpet and vinyl replacements, appliances, swimming pool
improvements, and major landscaping. These improvements were funded from cash
flow from operations. The Partnership has evaluated the capital improvement
needs of the property for the year 2000. The amount budgeted is approximately
$31,000, consisting primarily of appliances and carpet and vinyl replacements.
Additional improvements may be considered and will depend on the physical
condition of the property as well as anticipated cash flow generated by the
property.
The additional capital expenditures will be incurred only if cash is available
from operations or from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Partnership's distributable cash flow,
if any, may be adversely affected at least in the short term.
During the nine months ended September 30, 2000, the Partnership paid
distributions of cash generated from the sale of Peachtree Corners Medical
Building and Corinth Square Joint Venture of approximately $1,003,000
(approximately $993,000 to the limited partners or $16.26 per limited
partnership unit) and approximately $681,000 of cash generated from operations
(approximately $674,000 to the limited partners or $11.04 per limited
partnership unit). Subsequent to September 30, 2000, the Partnership declared
and paid a distribution from operations of approximately $308,000 (approximately
$305,000 to the limited partners or $4.99 per limited partnership unit). During
the nine months ended September 30, 1999, the Partnership paid distributions of
cash generated from operations of approximately $308,000 (approximately $305,000
to the limited partners or $4.99 per limited partnership unit). Subsequent to
September 30, 1999, the Partnership paid a distribution of cash generated from
operations of approximately $730,000 (approximately $723,000 to the limited
partners or $11.84 per limited partnership unit) which was approved and accrued
during the nine months ended September 30, 1999. Future cash distributions will
depend on the levels of net cash generated from operations, the availability of
cash reserves, and the timing of financings and/or property sales. The
Partnership's distribution policy is reviewed on a quarterly basis. There can be
no assurance, however, that the Partnership will generate sufficient funds from
operations after required capital improvements to permit any additional
distributions to its partners during the remainder of 2000 or subsequent
periods.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K filed during the quarter ended September
30, 2000:
None.
<PAGE>
SIGNATURES
In accordance with the requirements 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
By: United Investors Real Estate, Inc.
Its General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
and Controller
Date:
