FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 33-20527
BRUNNER COMPANIES INCOME PROPERTIES L.P. I
(Exact name of small business issuer as specified in its charter)
Delaware 31-1234157
(State or other jurisdiction of (IRS 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 (803) 239-1000
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) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
BALANCE SHEET
(Unaudited)
June 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash:
Unrestricted $ 524,185
Restricted-tenant security deposits 10,431
Accounts receivable 116,634
Escrows for taxes 114,903
Other assets 334,464
Investment properties:
Land $ 4,123,131
Buildings and related personal
property 20,896,612
25,019,743
Accumulated depreciation (4,691,402) 20,328,341
$21,428,958
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 3,685
Tenant security deposits 10,431
Accrued taxes 106,870
Other liabilities 170,943
Mortgage notes payable (Note C) 19,689,590
Partners' Capital (Deficit)
General partner $ (22,262)
Class A Limited Partners - (552,000
units) 1,153,325
Class B Limited Partners - (61,333
units) 316,376 1,447,439
$21,428,958
</TABLE>
See Accompanying Notes to Financial Statements
1
<PAGE>
b) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Rental income $611,285 $ 627,100 $1,239,777 $1,255,500
Other income 3,311 2,819 9,412 4,868
Total revenues 614,596 629,919 1,249,189 1,260,368
Expenses:
Operating 38,303 45,873 79,413 88,958
General and administrative 22,345 28,033 48,467 50,088
Property management fees 21,621 19,153 41,976 45,451
Depreciation 166,442 169,165 332,884 338,330
Amortization 5,128 4,463 10,541 8,720
Interest 448,931 471,889 901,710 943,046
Property taxes 54,641 55,086 106,826 110,172
Tenant reimbursements (52,110) (54,007) (144,504) (152,424)
Total expenses 705,301 739,655 1,377,313 1,432,341
Net loss $(90,705) $(109,736) $ (128,124) $ (171,973)
Net loss allocated to general
partner (1%) $ (907) $ (1,097) $ (1,281) $ (1,720)
Net loss allocated to
Class A limited partners
(89.1%) (80,818) (97,775) (114,158) (153,228)
Net loss allocated to
Class B limited Partners
(9.9%) (8,980) (10,864) (12,685) (17,025)
$ (90,705) $(109,736) $ (128,124) $ (171,973)
Net loss per limited
partnership unit $ (.15) $ (.18) $ (.21) $ (.28)
</TABLE>
See Accompanying Notes to Financial Statements
2
<PAGE>
c) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
General Limited Partners
Partner Class A Class B Total
<S> <C> <C> <C> <C>
Original capital contributions $ 1,000 $5,520,000 $613,330 $6,134,330
Partners' capital (deficit) at
December 31, 1994 $(20,981) $1,267,483 $329,061 $1,575,563
Net loss for the six months
ended June 30, 1995 (1,281) (114,158) (12,685) (128,124)
Partners' capital (deficit)
at June 30, 1995 $(22,262) $1,153,325 $316,376 $1,447,439
</TABLE>
See Accompanying Notes to Financial Statements
3
<PAGE>
d) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net loss $(128,124) $(171,973)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 332,884 338,330
Amortization of loan costs and
leasing commissions 23,041 49,517
Change in accounts:
Restricted cash 122 --
Accounts receivable 21,254 41,131
Escrows for taxes 81,785 (28,378)
Other assets (12,470) (20,592)
Accounts payable (6,643) 5,643
Tenant security deposits (122) --
Accrued taxes (54,624) 45,649
Other liabilities 58,450 48,368
Net cash provided by
operating activities 315,553 307,695
Cash flows from investing activities: -- --
Cash flows from financing activities:
Deposit with mortgagee (192,980) --
Loan extension costs (18,000) (34,911)
Payments on mortgage notes payable (120,343) (125,000)
Net cash used in financing
activities (331,323) (159,911)
Net (decrease) increase in cash (15,770) 147,784
Cash at beginning of period 539,955 361,565
Cash at end of period $ 524,185 $ 509,349
Supplemental disclosure of cash
flow information:
Cash paid for interest $ 889,210 $ 902,250
</TABLE>
See Accompanying Notes to Financial Statements
4
<PAGE>
e) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Going Concern
The accompanying financial statements have been prepared assuming the
Partnership will continue as a going concern. As shown in the financial
statements, the Partnership's cash provided by operating activities was
$297,553 for the six months ended June 30, 1995, and at June 30, 1995,
has unrestricted cash of $524,185. The Partnership's mortgage notes
payable matured June 10, 1995. The Partnership has signed an
application with the lender to refinance the notes related to
Georgetown, White Horse, and Hitchcock, and expects to close on these
loans in the third quarter of 1995. Due to the uncertainty of the
mortgage refinancing, there can be no assurance that the Partnership
will have sufficient funds to finance its operations through the year
ending December 31, 1995. These conditions raise substantial doubt
about the Partnership's ability to continue as a going concern.
Note B - Basis of Presentation
The accompanying unaudited financial statements 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 the
Managing General Partner, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six month periods
ended June 30, 1995, are not necessarily indicative of the results that
may be expected for the fiscal year ending December 31, 1995. 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, 1994.
Reclassifications
Certain reclassifications have been made to the 1994 information to
conform to the 1995 presentation.
Note C - Mortgage Notes Payable
The Partnership's mortgage notes payable of $19,689,590 matured on
June 10, 1995. The Partnership has signed an application with the
lender to refinance the mortgage notes payable, which would extend the
maturity dates to the year 1998.
5
<PAGE>
Note C - Mortgage Notes Payable - continued
The Managing General Partner expects to close these loans in the third
quarter of 1995. Pursuant to the loan application, the Partnership paid
a $192,980 deposit. This deposit represents 1% of the loan amounts and
will be applied to the principal balances when the loans close. If the
loan extensions are not successful, the lender, at its sole discretion,
can apply the deposit in payment of liquidated damages. If the
extensions are successful, the Partnership will apply the deposit to the
principal balance and will fund an additional $157,020 in principal
payments for a total principal reduction of $350,000.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Partnership's investment properties consist of three retail
centers. The following table sets forth the average occupancy of the
properties for the six months ended June 30, 1995 and 1994:
<TABLE>
<CAPTION>
Average
Occupancy
1995 1994
<S> <C> <C>
Georgetown Landing
Georgetown, South Carolina 92% 100%
Whitehorse Plaza
Greenville, South Carolina 98% 99%
Hitchcock Plaza
Aiken, South Carolina 99% 99%
</TABLE>
The occupancy at Georgetown at June 30, 1995, was 91%. The decrease
resulted from the move out of a tenant occupying 3,600 square feet in
January 1995. A tenant occupying 1,200 square feet at Georgetown signed
a three year lease renewal in the second quarter of 1995. Another
tenant signed a new lease, beginning in the third quarter of 1995, to
occupy the remaining 2,400 square feet.
The Partnership incurred a net loss of $128,124 for the six months
ended June 30, 1995, compared to a net loss of $171,973 for the
corresponding period in 1994. A net loss of $90,705 was recorded for
the three months ended June 30, 1995, compared to a net loss of $109,736
for the corresponding period in 1994. The decrease in net loss is
primarily due to a decrease in interest expense resulting from fewer
loan costs being amortized and the reduction of the outstanding mortgage
principal. Operating expenses also decreased due to lower common area
maintenance expenses at Hitchcock and lower utility expenses at
Georgetown in 1995. Partially offsetting the decrease in expenses was a
decrease in rental revenue resulting from lower occupancy at Georgetown
and write-offs of uncollectible tenant receivables at White Horse.
As part of the ongoing business plan of the Partnership, the Managing
General Partner monitors the rental market environment of each 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
Managing 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. However, 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 Managing General Partner will be able to
sustain such a plan.
At June 30, 1995, the Partnership had unrestricted cash of $524,185
compared to $539,955 at December 31, 1994. Net cash provided by
operating activities increased primarily due to a reduction in escrows
for taxes. Net cash used in
7
<PAGE>
financing activities increased as a result of deposits paid to
refinance the mortgage notes. These deposits represent 1% of the loan
amounts and will be applied to the principal balances when the loans
close. If the loan extensions are not successful, the lender, at its
sole discretion, can apply the deposit in payment of liquidated damages.
Due to the uncertainty surrounding the mortgage financing for the
Partnership, management is attempting to maximize cash reserves. No
distributions were made in 1994 or the first six months of 1995 and no
distributions are anticipated for the remainder of 1995. If the
Partnership is able to consummate long-term financing on the mortgage
notes, the level of existing liquid assets should be sufficient to meet
any near-term needs of the Partnership. Future cash distributions will
depend on the levels of net cash generated from operations,
refinancings, and the availability of cash reserves.
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
(b) Reports on Form 8-K:
None filed during the quarter ended June 30, 1995.
9
<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.
BRUNNER COMPANIES INCOME PROPERTIES L.P.I,
a Delaware limited partnership
By: Brunner Management Limited
Partnership, an Ohio Limited
Partnership, its General Partner
By: 104 Management, Inc., an Ohio
corporation, its Managing General
Partner
By: /s/Carroll D. Vinson
Carroll D. Vinson
President
By: /s/Robert D. Long, Jr.
Robert D. Long, Jr.
Controller and Principal
Accounting Officer
Date: August 11, 1995
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Brunner Companies Income Properties L.P. I's 1995 Second Quarter 10-QSB
and is qualified in its entirety by reference to such 10-QSB filing.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 524,185
<SECURITIES> 0
<RECEIVABLES> 116,634
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 766,153
<PP&E> 25,019,743
<DEPRECIATION> 4,691,402
<TOTAL-ASSETS> 21,428,958
<CURRENT-LIABILITIES> 291,929
<BONDS> 19,689,590
<COMMON> 0
0
0
<OTHER-SE> 1,447,439
<TOTAL-LIABILITY-AND-EQUITY> 21,428,958
<SALES> 0
<TOTAL-REVENUES> 1,249,189
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,377,313
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 901,710
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (128,124)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> 0
<PAGE>
</TABLE>
