FORM 10-QSB.--QUARTERLY 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
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] 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 (864) 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
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 1997
Assets
Cash:
Unrestricted $ 318
Restricted-tenant security deposits 12
Accounts receivable, net of allowance of $45 137
Escrows for taxes 55
Restricted escrows 5
Other assets 142
Investment properties:
Land $ 4,123
Buildings and related personal property 20,921
25,044
Accumulated depreciation (5,863) 19,181
$19,850
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 36
Tenant security deposits 18
Accrued taxes 55
Other liabilities 122
Mortgage notes payable 18,628
Partners' Capital (Deficit)
General Partner $ (27)
Class A Limited Partners - (552,000
units) 747
Class B Limited Partners - (61,333
units) 271 991
$19,850
See Accompanying Notes to Financial Statements
b) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
1997 1996
Revenues:
Rental income $ 718 $ 678
Other income 3 7
Total revenues 721 685
Expenses:
Operating 67 64
General and administrative 25 29
Depreciation 167 167
Interest 425 435
Property taxes 56 53
Total expenses 740 748
Net loss $ (19) $ (63)
Net loss allocated to general
partner (1%) $ -- $ (1)
Net loss allocated to Class A limited
partners (89.1%) (17) (56)
Net loss allocated to Class B limited
partners (9.9%) (2) (6)
$ (19) $ (63)
Net loss per Class A limited
partnership unit $ (.03) $ (.10)
See Accompanying Notes to Financial Statements
c) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
General Limited Partners
Partner Class A Class B Total
<S> <C> <C> <C> <C>
Original capital contributions $ 1 $ 5,520 $ 613 $ 6,134
Partners' capital (deficit) at
December 31, 1996 $ (27) $ 764 $ 273 $ 1,010
Net loss for the three months
ended March 31, 1997 -- (17) (2) (19)
Partners' capital (deficit)
at March 31, 1997 $ (27) $ 747 $ 271 $ 991
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
d) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
1997 1996
Cash flows from operating activities:
Net loss $ (19) $ (63)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 167 167
Amortization of loan costs and leasing
commissions 12 10
Change in accounts:
Restricted cash (1) --
Accounts receivable (18) 21
Escrows for taxes 34 12
Other assets (13) 4
Accounts payable (5) (8)
Tenant security deposits 6 (2)
Accrued taxes (45) (15)
Other liabilities (11) 24
Net cash provided by operating activities 107 150
Cash flows from investing activities:
Property improvements and replacements -- (10)
Net cash used in investing activities -- (10)
Cash flows from financing activities:
Payments on mortgage notes payable (121) (110)
Net cash used in financing activities (121) (110)
Net (decrease) increase in cash (14) 30
Cash at beginning of period 332 316
Cash at end of period $ 318 $ 346
Supplemental disclosure of cash flow information:
Cash paid for interest $ 421 $ 431
See Accompanying Notes to Financial Statements
e) BRUNNER COMPANIES INCOME PROPERTIES L.P. I
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements for Brunner Companies Income
Properties L.P. I (the "Partnership") 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 (Brunner
Management Limited Partnership), all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three month period ended March 31,
1997, are not necessarily indicative of the results that may be expected for
the fiscal year ending December 31, 1997. 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, 1996.
Certain reclassifications have been made to the 1996 information to conform
to the 1997 presentation.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The partnership agreement provides for payments to
affiliates for property management 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 Managing
General Partner for the three months ended March 31, 1997 and 1996 (in
thousands):
1997 1996
Property management fees $ 19 $ 20
Reimbursement for services of affiliates 8 9
Additionally, the Partnership paid $14,000 and $1,000 to an affiliate of the
Managing General Partner for lease commissions related to new leases at the
Partnership's commercial properties during the three months ended March 31,
1997 and 1996, respectively. These lease commissions are included in other
assets and amortized over the terms of the respective leases.
The Partnership insures its properties under a master policy through an
agency and insurer unaffiliated with the Managing General Partner. An
affiliate of the Managing 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
Managing 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 Managing General Partner by virtue of the
agent's obligations is not significant.
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 three
months ended March 31, 1997 and 1996:
Average
Occupancy
1997 1996
Hitchcock Plaza
Aiken, South Carolina 98% 98%
Whitehorse Plaza
Greenville, South Carolina 100% 99%
Georgetown Landing
Georgetown, South Carolina 90% 94%
The Managing General Partner attributes the decrease in occupancy at
Georgetown Landing to the move-out of a tenant who had leased 7,200 square feet.
This space has been partially leased to the anchor tenant.
The Partnership's net loss for the three months ended March 31, 1997, was
$19,000 compared to a net loss of $63,000 for the corresponding period of 1996.
The decrease in net loss is primarily due to an increase in tenant
reimbursements of $35,000 due primarily to timing of the collection of Wal-
Mart's percentage rent at White Horse Plaza and a decrease in interest expense.
Otherwise, the Partnership's results of operations were comparable to those of
the corresponding period of the prior year.
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 March 31, 1997, the Partnership held unrestricted cash of $318,000
compared to $346,000 at March 31, 1996. Net cash provided by operating
activities decreased primarily due to the payment of audit bills of
approximately $29,000 in the first quarter of 1997. Net cash used in investing
activities decreased due to fewer property improvements and replacements being
required in 1997. Net cash used in financing activities increased due to
increased principal payments on mortgage notes payable.
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 properties to adequately maintain the physical
assets and meet other operating needs of the Partnership. Such assets are
currently thought to be sufficient for any near-term needs of the Partnership.
The mortgage indebtedness of $18,628,000 matures October 10, 1998. Any future
cash distributions will depend on the levels of net cash generated from
operations, property sales, and the availability of cash reserves. No cash
distributions were made during fiscal year 1996 or during the first three months
of 1997.
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:
None filed during the quarter ended March 31, 1997.
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.
Vice President/CAO
Date: May 15, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Brunner
Companies Income Properties L.P. I 1997 First Quarter 10-QSB and is qualified in
its entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000830737
<NAME> BRUNNER COMPANIES INCOME PROPERTIES L.P. I
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 318
<SECURITIES> 0
<RECEIVABLES> 182
<ALLOWANCES> 45
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 25,044
<DEPRECIATION> 5,863
<TOTAL-ASSETS> 19,850
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 18,628
0
0
<COMMON> 0
<OTHER-SE> 991
<TOTAL-LIABILITY-AND-EQUITY> 19,850
<SALES> 0
<TOTAL-REVENUES> 721
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 740
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 425
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19)
<EPS-PRIMARY> (.03)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
