UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1996
-------------------------------------------------
or
[ ] 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__________________________________________________________
DIVERSIFIED HISTORIC INVESTORS 1990
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2604695
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Suite 500, 1521 Locust Street, Philadelphia, PA 19102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 735-5001
-----------------------------
N/A
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(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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.
Consolidated Balance Sheets - March 31, 1996 (unaudited) and
December 31, 1995
Consolidated Statements of Operations - Three Months Ended March
31, 1996 and 1995 (unaudited)
Consolidated Statements of Cash Flows - Three Months Ended March
31, 1996 and 1995 (unaudited)
Notes to Consolidated Financial Statements (unaudited)
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
(1) Liquidity
As of March 31, 1996, Registrant had cash of $18,784. Such
funds are expected to be used to pay liabilities and general and administrative
expenses of Registrant, and to fund cash deficits of the properties. Cash
generated from operations is used primarily to fund operating expenses and debt
service. If cash flow proves to be insufficient, the Registrant will attempt to
negotiate loan modifications with the various lenders in order to remain current
on all obligations. The Registrant is not aware of any additional sources of
liquidity.
As of March 31, 1996, Registrant had restricted cash of
$143,448 consisting primarily of funds held as security deposits, replacement
reserves and escrows for taxes and insurance. As a consequence of the
restrictions as to use, Registrant does not deem these funds to be a source of
liquidity.
In recent years the Registrant has realized significant
losses due to the properties' inability to generate sufficient cash flow to pay
their operating expenses and debt service. At the present time, all three
properties are able to pay their operating expenses and debt service, but it is
unlikely that any cash will be available to the Registrant to pay its general
and administrative expenses.
It is the Registrant's intention to continue to hold the
properties until they can no longer meet the debt service requirements and the
properties are foreclosed, or the market value of the properties increases to a
point where they can be sold at a price which is sufficient to repay the
underlying indebtedness (principal plus accrued interest).
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<PAGE>
(2) Capital Resources
Due to the relatively recent rehabilitations of the
properties, any capital expenditures needed are generally replacement items and
are funded out of cash from operations or replacement reserves, if any.
Registrant is not aware of any factors which would cause historical capital
expenditure levels not to be indicative of capital requirements in the future
and accordingly, does not believe that it will have to commit material resources
to capital investment for the foreseeable future.
(3) Results of Operations
During the first quarter of 1996, Registrant incurred a net
loss of $78,508 ($15.44 per limited partnership unit) compared to a net loss of
$83,436 ($16.41 per limited partnership unit) for the same period in 1995.
Rental income increased $1,751 from $281,438 in the first
quarter of 1995 to $283,189 in the same period in 1996. This increase is mainly
the result of an increase in rental income at Shockoe Hearth Apartments
partially offset by a decrease at Jefferson Seymour. The increase at the Shockoe
Hearth Apartments is the result of an increase in the rental income from the
sole commercial tenant, as well as higher average occupancy of residential
units, and the decrease at Jefferson Seymour is due to the loss of one of its
commercial tenants in February 1995.
Expenses for rental operations decreased by $969 from
$104,308 in the first quarter of 1995 to $103,339 in the same period in 1996.
Expenses for rental operations decreased due to lower corporate apartment
expense at The Bakery Apartments, as well as lower utilities, wages,
maintenance, and management fees expense at Jefferson Seymour, partially offset
by an increase in maintenance and wage expense at The Bakery Apartments, an
increase in insurance expense at Jefferson Seymour, and an increase in
maintenance expense at Shockoe Hearth. Corporate apartment expense decreased due
to a decrease in the rental of corporate apartments. The decrease in utilities,
wages, maintenance, and management fees at Jefferson Seymour is due to the loss
of one of its commercial tenants. Maintenance expense at The Bakery Apartments
increased due to the improvements made to the security system and the
replacement of appliances in several units. Wage expense increased at The Bakery
Apartments as a result of cost of living pay increases received by employees.
Insurance expense increased at Jefferson Seymour due to an increase in premiums
and maintenance expense increased at Shockoe Hearth due to higher occupancy
levels of residential units.
Losses incurred during the quarter at the Registrant's three
properties amounted to $66,000, compared to a loss of approximately $70,000 for
the same period in 1995.
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<PAGE>
In the first quarter of 1996, Registrant incurred a loss of
$28,000 at Jefferson Seymour including $32,000 of depreciation and amortization
expense, compared to a loss of $26,000 in the first quarter of 1995, including
$32,500 of depreciation and amortization expense. Although there was no material
overall change in the loss from the first quarter of 1995 to the same period in
1996, there was a decrease in rental income partially offset by a decrease in
operating expenses. The decrease in rental income is the result of the loss of
one of its commercial tenants which caused a proportionate decrease in operating
expenses, such as utilities, maintenance, management fees, and wages, partially
offset by an increase in insurance expense due to an increase in premiums
charged.
In the first quarter of 1996, Registrant incurred a loss of
$16,000 at Shockoe Hearth, including $25,000 of depreciation and amortization
expense, compared to a loss of $16,000 including $25,500 of depreciation and
amortization expense in the first quarter of 1995. Although there was no change
in the loss from the first quarter of 1995 to the same period of 1996, there was
an increase in rental income from the sole commercial tenant, as well as higher
average occupancy of residential units, partially offset by an increase in
maintenance expense due to higher average occupancy of residential units.
In the first quarter of 1996, Registrant incurred a loss of
$22,000 at The Bakery Apartments, including $63,000 of depreciation and
amortization expense compared to a loss of $28,000 including $63,000 of
depreciation and amortization expense in the first quarter of 1995. The decrease
in the loss from the first quarter of 1995 to the same period in 1996 is due to
a decrease in corporate apartment expense, partially offset by an increase in
maintenance and wage expense. Corporate apartment expense decreased due to a
decrease in the rental of corporate apartments and a corresponding increase in
the rental of residential units. Maintenance expense increased due to the
improvements made to the security system and the replacement of appliances in
several apartment units. Salaries and wage expense increased as a result of cost
of living pay increases received by employees.
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<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
-----------------------------------
(a Pennsylvania limited partnership)
CONSOLIDATED BALANCE SHEETS
---------------------------
Assets
March 31, 1996 December 31, 1995
-------------- -----------------
(Unaudited)
Rental properties, at cost:
Land $ 248,856 $ 248,856
Buildings and improvements 10,864,733 10,856,073
Furniture and fixtures 156,271 156,271
------------ ------------
11,269,860 11,261,200
Less - Accumulated depreciation (2,418,015) (2,301,499)
------------ ------------
Cash and cash equivalents 18,784 5,116
Restricted cash 143,448 146,315
Accounts receivable 27,902 10,165
Other assets (net of amortization of
$201,298 and $190,322 at March 31, 1996
and December 31, 1995, respectively) 115,893 122,309
------------ ------------
Total $ 9,157,872 $ 9,243,606
============ ============
Liabilities and Partners' Equity
--------------------------------
Liabilities:
Debt obligations $ 6,183,592 $ 6,199,255
Accounts payable:
Trade 454,288 414,230
Related parties 143,984 147,934
Interest payable 33,522 23,296
Tenant security deposits 57,120 63,129
Other liabilities 37,002 61,651
------------ ------------
Total liabilities 6,909,508 6,909,495
------------ ------------
Minority interests 555,576 562,116
Partners' equity 1,692,788 1,771,995
------------ ------------
Total $ 9,157,872 $ 9,243,606
============ ============
The accompanying notes are an integral part of these financial statements.
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<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
-----------------------------------
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
1996 1995
---- ----
Revenues:
Rental income $ 283,189 $ 281,438
Interest income 483 442
--------- ---------
Total revenues 283,672 281,880
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Costs and expenses:
Rental operations 103,339 104,308
General and administrative 12,000 12,000
Interest 126,589 127,899
Depreciation and amortization 126,792 129,444
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Total costs and expenses 368,720 373,651
--------- ---------
Loss before minority interests (85,048) (91,771)
Minority interests' portion of loss 6,540 8,335
--------- ---------
Net loss ($ 78,508) ($ 83,436)
========= =========
Net loss per limited partnership unit ($ 15.44) ($ 16.41)
========= =========
The accompanying notes are an integral part of these financial statements.
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<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
-----------------------------------
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
Three months ended
March 31,
1996 1995
---- ----
Cash flows from operating activities:
Net loss $ (78,508) $ (83,436)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 126,792 129,444
Minority interest (6,540) (8,335)
Changes in assets and liabilities:
Decrease (increase) in restricted cash 2,867 (15,544)
(Increase) decrease in accounts receivable (17,736) 6,657
Increase in other assets (4,560) (12,208)
Increase accounts payable - trade 40,058 3,898
(Decrease) increase in accounts payable -
related parties (3,950) 1,513
Increase (decrease) in interest payable 10,226 (327)
(Decrease) increase in other liabilities (24,649) 2,353
(Decrease) increase security deposits (6,009) 4,225
--------- ---------
Net cash provided by operating activities 37,991 28,240
--------- ---------
Cash flows from investing activities:
Capital expenditures (8,660) -0-
--------- ---------
Net cash used in investing activities (8,660) -0-
--------- ---------
Cash flows from financing activities:
Principal payments (15,663) (18,749)
--------- ---------
Net cash used in financing activities (15,663) (18,749)
--------- ---------
Increase in cash and cash equivalents 13,668 9,491
--------- ---------
Cash and cash equivalents at beginning of period 5,116 4,390
--------- ---------
Cash and cash equivalents at end of period $ 18,784 $ 13,881
========= =========
The accompanying notes are an integral part of these financial statements.
-7-
<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
-----------------------------------
(a Pennsylvania limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The unaudited consolidated financial statements of Diversified Historic
Investors 1990 (the "Registrant") and related notes have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission.
Accordingly, certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such rules and regulations. The
accompanying consolidated financial statements and related notes should be read
in conjunction with the audited financial statements in Form 10-K of the
Registrant, and notes thereto, for the year ended December 31, 1995.
The information furnished reflects, in the opinion of management, all
adjustments, consisting of normal recurring accruals, necessary for a fair
presentation of the results of the interim periods presented.
-8-
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
To the best of its knowledge, Registrant is not party to, nor is
any of its property the subject of, any pending material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the quarter covered by this report
to a vote of security holders.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Number Document
-------------- --------
3 Registrant's Amended and Restated
Certificate of Limited Partnership
and Agreement of Limited
Partnership, previously filed as
part of Amendment No. 2 of
Registrant's Registration
Statement on Form S-11, are
incorporated herein by reference.
21 Subsidiaries of the Registrant are
listed in Item 2. Properties on
Form 10-K, previously filed and
incorporated herein by reference.
(b) Reports on Form 8-K:
No reports were filed on Form 8-K during the quarter ended
March 31, 1996.
-9-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: July 1, 1996 DIVERSIFIED HISTORIC INVESTORS 1990
------------
By: Dover Historic Advisors 1990, General Partner
By: Dover Historic Advisors, Inc., Partner
By: /s/ Donna M. Zanghi
-----------------------------
DONNA M. ZANGHI
Secretary and Treasurer
-10-
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<ARTICLE> 5
<CIK> 0000859473
<NAME> DHI 1990
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 18,784
<SECURITIES> 0
<RECEIVABLES> 27,902
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 115,893
<PP&E> 11,269,860
<DEPRECIATION> 2,418,015
<TOTAL-ASSETS> 9,157,872
<CURRENT-LIABILITIES> 598,272
<BONDS> 6,183,592
0
0
<COMMON> 0
<OTHER-SE> 1,692,788
<TOTAL-LIABILITY-AND-EQUITY> 9,157,872
<SALES> 0
<TOTAL-REVENUES> 283,672
<CGS> 0
<TOTAL-COSTS> 115,339
<OTHER-EXPENSES> 126,792
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 126,589
<INCOME-PRETAX> (78,508)
<INCOME-TAX> 0
<INCOME-CONTINUING> (78,508)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (78,508)
<EPS-PRIMARY> (15.44)
<EPS-DILUTED> 0
</TABLE>
