<PAGE>
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
For the transition period.........to.........
Commission file number 0-17645
UNITED INVESTORS GROWTH PROPERTIES
(Exact name of small business issuer as specified in its charter)
Missouri 43-1483928
(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) UNITED INVESTORS GROWTH PROPERTIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash:
Unrestricted $ 249,380
Restricted-tenant security deposits 95,620
Accounts receivable, net of allowance of $45,708 81,088
Escrows for taxes and insurance 111,131
Restricted escrow 114,176
Other assets 271,490
Investment properties:
Land $ 2,572,105
Buildings and related personal
property 18,980,710
21,552,815
Less accumulated depreciation (4,219,102) 17,333,713
$18,256,598
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 103,299
Tenant security deposits 96,158
Accrued taxes 93,385
Other liabilities 155,066
Mortgage notes payable 16,960,476
Minority interest 10,657
Partners' Capital (Deficit)
General partner $ (75,992)
Limited partners (39,297 units issued
and outstanding) 913,549 837,557
$18,256,598
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
1
<PAGE>
b) UNITED INVESTORS GROWTH PROPERTIES
CONSOLIDATED 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 $ 882,557 $ 859,677 $1,764,410 $1,676,803
Other income 36,312 31,363 73,425 73,698
Total revenues 918,869 891,040 1,837,835 1,750,501
Expenses:
Operating 263,804 248,660 494,381 454,284
General and administrative 18,773 20,267 35,495 33,784
Property management fees 47,881 47,311 97,189 93,098
Maintenance 87,390 66,625 148,633 148,372
Depreciation 175,257 183,032 348,799 365,326
Amortization 5,406 4,207 9,692 8,215
Interest 416,781 418,860 818,133 809,561
Property taxes 102,111 84,678 202,859 185,668
Tenant reimbursements (38,168) (44,780) (77,024) (72,774)
Total expenses 1,079,235 1,028,860 2,078,157 2,025,534
Minority interest in net
loss of joint venture 13,842 16,030 27,403 33,877
Net loss $ (146,524) $ (121,790) $ (212,919) $ (241,156)
Net loss allocated to
general partner (1%) $ (1,465) $ (1,218) $ (2,129) $ (2,412)
Net loss allocated to
limited partners (99%) (145,059) (120,572) (210,790) (238,744)
$ (146,524) $ (121,790) $ (212,919) $ (241,156)
Net loss per limited
partnership unit $ (3.69) $ (3.07) $ (5.36) $ (6.08)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
3
<PAGE>
c) UNITED INVESTORS GROWTH PROPERTIES
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 39,297 $ 100 $9,824,250 $9,824,350
Partners' capital (deficit) at
December 31, 1994 39,297 $(73,863) $1,124,339 $1,050,476
Net loss for the six months
ended June 30, 1995 -- (2,129) (210,790) (212,919)
Partners' capital (deficit)
at June 30, 1995 39,297 $(75,992) $ 913,549 $ 837,557
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
4
<PAGE>
d) UNITED INVESTORS GROWTH PROPERTIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
<S> <C> <C>
1995 1994
Cash flows from operating activities:
Net loss $(212,919) $(241,156)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Minority interest in net loss of
joint venture (27,403) (33,877)
Depreciation 348,799 365,326
Amortization of loan costs, lease
commissions, loan premium and intangible
assets 61,493 25,119
Change in accounts:
Restricted cash (8,465) (8,004)
Accounts receivable (38,461) 9,810
Escrows for taxes and insurance 228 34,248
Other assets (14,581) (30,546)
Accounts payable 12,535 (77,202)
Tenant security deposit liabilities 8,234 8,004
Accrued property taxes 4,216 28,285
Other liabilities 2,362 34,879
Net cash provided by operating
activities 136,038 114,886
Cash flows from investing activities:
Property improvements and replacements (39,862) (22,462)
Deposits to restricted escrows (11,101) (29,112)
Receipts from restricted escrow -- 6,891
Net cash used in
investing activities (50,963) (44,683)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
5
<PAGE>
UNITED INVESTORS GROWTH PROPERTIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
<S> <C> <C>
1995 1994
Cash flows from financing activities:
Distributions from minority interest $ 8,000 $ 16,480
Payments on mortgage notes payable (90,792) (60,148)
Net cash used in financing
activities (82,792) (43,668)
Net increase in cash 2,283 26,535
Cash at beginning of period 247,097 399,119
Cash at end of period $ 249,380 $ 425,654
Supplemental disclosure of cash
flow information:
Cash paid for interest $ 767,126 $ 788,684
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
6
<PAGE>
e) UNITED INVESTORS GROWTH PROPERTIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - 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
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.
Certain reclassifications have been made to the 1994 information to
conform to the 1995 presentation.
Note B - Basis of Accounting
The financial statements include the Partnership's operating
divisions, Terrace Royale Apartments, Deerfield Apartments, and
Greystone South Plaza Center. During the second quarter of 1994,
Cheyenne Woods Apartments was restructured into a lower tier
partnership, known as Cheyenne Woods United Investors, L.P.
("Cheyenne"), in which United Investors Growth Properties is the 99.99%
limited partner. Although legal ownership of the asset was transferred
to a new entity, United Investors Growth Properties retained
substantially all economic benefits from the property. The Partnership
consolidates its interest in Cheyenne (whereby all accounts of Cheyenne
are included in the consolidated financial statements of the
Partnership). In addition, the Partnership owns a 60% interest in
Renaissance Village Associates ("Renaissance"). The Partnership
consolidates its interest in Renaissance (whereby all accounts of the
joint venture are included in the Partnership's financial statements
with intercompany accounts being eliminated). The minority partner's
share of the joint venture's net assets are reflected as minority
interest in the balance sheet of the Partnership. Earnings and losses
attributable to the minority partner's ownership of the joint venture
are reflected as a reduction or addition to net income of the
Partnership.
7
<PAGE>
Note C - 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. Any Limited Partner desiring to sell
all or any of his Units to the General Partner must submit a written
request to the General Partner beginning 30 days prior to the fifth
anniversary date. The General Partner has accepted repurchase notices
representing 10% of the limited partnership Units at June 30, 1995, and
is in the process of effecting the transfer of Units.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Partnership's investment properties consist of four apartment
complexes and a retail center. 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>
Terrace Royale Apartments
Bothell, Washington 93% 94%
Cheyenne Woods Apartments
North Las Vegas, Nevada 97% 93%
Greystone South Plaza Center
Lenexa, Kansas 82% 78%
Deerfield Apartments
Memphis, Tennessee 98% 96%
Renaissance Village Apartments
Seattle, Washington 89% 86%
</TABLE>
The General Partner attributes the increase in occupancy at Cheyenne
Woods to the relocation of several tenants from a competing property
during the fourth quarter of 1994. Occupancy has increased at Greystone
South as a result of three tenants moving in that occupy approximately
7,300 square feet. One tenant occupying 1,370 square feet was
terminated in December 1994 due to delinquent rental payments.
Renaissance Village experienced an increase in occupancy due to
marketing efforts made at the property. During 1995, a road widening
project is anticipated to occur in front of Terrace Royale. This
construction could possibly cause occupancy to further decrease in 1995,
but it is anticipated that this decrease would be short-term.
The Partnership incurred a net loss of $212,919 for the six months
ended June 30, 1995, of which $146,524 was a loss for the second
quarter. The corresponding net loss for 1994 was $241,156 and $121,790,
respectively. The decrease in the net loss for the six months ended
June 30, 1995, was primarily due to an increase in rental revenues as a
result of occupancy increases at four of the Partnership's properties as
noted above. Also contributing to the decreased net loss was an
increase in tenant reimbursements. Tenant reimbursements increased as a
result of occupancy increasing at Greystone and a corresponding increase
in reimbursable expenses in 1995. Partially offsetting these increased
revenues was an increase in operating expenses at Cheyenne Woods,
Renaissance and Greystone due primarily to increased utility expense
from the increased occupancy at these properties in 1995. An increase
in administrative salaries also contributed to the increase in operating
expenses.
9
<PAGE>
As part of the ongoing business plan of the Partnership, the 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 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 General
Partner will be able to sustain such a plan.
At June 30, 1995, the Partnership had unrestricted cash of $249,380
versus $247,097 at December 31, 1994. Net cash provided by operating
activities increased primarily as a result of the rental revenue
increases discussed above. Net cash used in investing activities
increased primarily as a result of increased capital expenditures in
1995. Net cash used in financing activities increased due to larger
mortgage payments on the Deerfield Apartments note payable as a result
of the loan extension entered into in November 1994.
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. Such assets are currently thought to be sufficient for any
near-term needs of the Partnership. The mortgage indebtedness of
$16,960,476 matures at various times with balloon payments due at
maturity at which time the properties will either be refinanced or sold.
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 in 1994 or during the first
six months of 1995.
10
<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.
11
<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 GROWTH 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
By: /s/Robert D. Long, Jr.
Controller and Principal
Accounting Officer
Date: August 10, 1995
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
United Investors Growth Properties' 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> 249,380
<SECURITIES> 0
<RECEIVABLES> 126,796
<ALLOWANCES> 45,708
<INVENTORY> 0
<CURRENT-ASSETS> 537,219
<PP&E> 21,552,815
<DEPRECIATION> 4,219,102
<TOTAL-ASSETS> 18,256,598
<CURRENT-LIABILITIES> 447,908
<BONDS> 16,960,476
<COMMON> 0
0
0
<OTHER-SE> 837,557
<TOTAL-LIABILITY-AND-EQUITY> 18,256,598
<SALES> 0
<TOTAL-REVENUES> 1,837,835
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,078,157
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 818,133
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (212,919)
<EPS-PRIMARY> (5.36)
<EPS-DILUTED> 0
</TABLE>
