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 June 30, 1996
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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 33-33093
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DIVERSIFIED HISTORIC INVESTORS 1990
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(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 _____ No __X__
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets - June 30, 1996 (unaudited) and
December 31, 1995
Consolidated Statements of Operations - Three Months and Six Months
Ended June 30, 1996 and 1995 (unaudited)
Consolidated Statements of Cash Flows - Six Months Ended June 30,
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 June 30, 1996, Registrant had cash of $30,564. Such
funds are expected to be used to pay liabilities 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 June 30, 1996, Registrant had restricted cash of
$127,350 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.
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).
(2) Capital Resources
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<PAGE>
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 second quarter of 1996, Registrant incurred a net
loss of $118,134 ($23.23 per limited partnership unit) compared to a net loss of
$118,573 ($23.32 per limited partnership unit) for the same period in 1995. For
the first six months of 1996, the Registrant incurred a net loss of $196,643
($38.67 per limited partnership unit) compared to a net loss of $202,008 ($39.73
per limited partnership unit) for the same period in 1995.
Rental income increased $8,107 from $270,237 in the second
quarter of 1995 to $278,344 in the same period in 1996 and increased $9,858 from
$551,675 for the first six months of 1995 to $561,533 for the same period in
1996. Rental income increased for both the second quarter and first six months
of 1995 to the same periods in 1996 due to an increase in rental income at
Shockoe Hearth Apartments and The Bakery Apartments, partially offset by a
decrease of rental income at Jefferson Seymour. The increase at the Shockoe
Hearth Apartments is the result of a scheduled lease rental increase from the
sole commercial tenant, as well as higher average occupancy of residential
units. The increase of rental income at The Bakery Apartments is also due to
higher average occupancy of residential units, partially offset by a decrease in
corporate apartment rentals. The decrease in rental income at Jefferson Seymour
is due to the loss of one of its commercial tenants.
Expenses for rental operations increased by $17,424 from
$118,880 in the second quarter of 1995 to $136,304 in the same period in 1996
and increased $16,456 from $223,187 for the first six months of 1995 to $239,643
for the same period in 1996. Expenses for rental operations increased for both
the second quarter and first six months in 1995 to the same periods in 1996 due
to an increase in maintenance expense at all three properties, as well as an
increase in salaries and wage expense at The Bakery Apartments, partially offset
by a decrease in insurance expense at Jefferson Seymour and a decrease in
corporate apartment expense at The Bakery Apartments. Maintenance expense at
Jefferson Seymour increased due to pay increase given to maintenance personnel.
Maintenance expense increased at The Bakery Apartments due to the improvements
made to the security system and the replacement of appliances in several units.
Maintenance expense increased at Shockoe Hearth Apartments due to higher
occupancy levels of residential units. Salaries and wage expense increased at
The Bakery Apartments due to cost of living increases given to employees.
Insurance expense decreased at Jefferson Seymour due to a reduction in property
insurance premiums, and corporate apartment expense decreased at The Bakery
Apartments due to a decrease in the rental of corporate apartments.
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<PAGE>
Depreciation and amortization expense decreased $1,649 from
$128,442 in the second quarter of 1995 to $126,793 in the same period in 1996
and decreased $4,302 from $257,886 for the first six months of 1995 to $253,584
in the same period in 1996. The decreases are due to organization fees becoming
fully amortized.
Losses incurred during the second quarter at the
Registrant's three properties amounted to $116,000, compared to a loss of
approximately $108,000 for the same period in 1995. For the first six months of
1996, the Registrant's properties recognized a loss of $182,000 compared to
approximately $178,000 for the same period in 1995.
In the second quarter of 1996, Registrant incurred a loss of
$30,000 at Jefferson Seymour including $32,000 of depreciation and amortization
expense, compared to a loss of $29,000 in the second quarter of 1995, including
$33,000 of depreciation and amortization expense; for the first six months of
1996, Registrant incurred a loss of $58,000 including $64,000 of depreciation
and amortization expense, compared to a loss of $55,000, including $65,000 of
depreciation and amortization expense for the first six months of 1995. Although
there was no material overall change in the losses from the second quarter and
the first six months of 1995 to the same periods in 1996, there was a decrease
in rental income as well as a decrease in insurance expense, partially offset by
an increase in maintenance expense. The decrease in rental income is the result
of the loss of one of the property's commercial tenants. Insurance expense
decreased due to a reduction of property insurance premiums, and maintenance
expense increased as a result of pay increases of maintenance personnel.
In the second quarter of 1996, Registrant incurred a loss of
$32,000 at Shockoe Hearth, including $25,000 of depreciation and amortization
expense, compared to a loss of $46,000 including $25,000 of depreciation and
amortization expense in the second quarter of 1995; for the first six months of
1996, Registrant incurred a loss of $48,000, including $51,000 of depreciation
and amortization expense, compared to a loss of $62,000, including $50,000 of
depreciation and amortization expense for the first six months of 1995. The
decrease in the loss from both the second quarter and the first six months of
1995 to the same periods in 1996 is the result of 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
the increase in occupancy.
In the second quarter of 1996, Registrant incurred a loss of
$54,000 at The Bakery Apartments, including $63,000 of depreciation and
amortization expense compared to a loss of $33,000 including $63,000 of
depreciation and amortization expense in the second quarter of 1995; for the
first six months of 1996, Registrant incurred a loss of $76,000, including
$126,000 of depreciation and amortization expense compared to a loss of $61,000,
including $126,000 of depreciation and amortization expense for the same period
in 1995. The increase in the loss from the second quarter and the first six
months of 1995 to the same periods in 1996 is due to an increase in maintenance
and salaries and wage expense, partially offset by an increase in rental income
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<PAGE>
and a decrease in corporate apartment expense. Maintenance expense increased due
to the replacement of appliances and carpeting in the units. Salaries and wage
expense increased as a result of cost of living increases received by employees.
Residential rental income increased due to higher average occupancy of
residential units, partially offset by a decrease in corporate apartment
rentals. Corporate apartment expense decreased due to a decrease in the rental
of corporate apartments.
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<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
-----------------------------------
(a Pennsylvania limited partnership)
CONSOLIDATED BALANCE SHEETS
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Assets
------
June 30, 1996 December 31, 1995
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(Unaudited)
Rental properties, at cost:
Land $ 248,856 $ 248,856
Buildings and improvements 10,892,249 10,856,073
Furniture and fixtures 155,592 156,271
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11,296,697 11,261,200
Less - Accumulated depreciation (2,533,796) (2,301,499)
------------ ------------
8,762,901 8,959,701
Cash and cash equivalents 30,564 5,116
Restricted cash 127,350 146,315
Accounts receivable 37,024 10,165
Other assets (net of amortization of
$211,609 and $190,322 at June 30, 1996
and December 31, 1995, respectively) 105,472 122,309
------------ ------------
Total $ 9,063,311 $ 9,243,606
============ ============
Liabilities and Partners' Equity
--------------------------------
Liabilities:
Debt obligations $ 6,164,423 $ 6,199,255
Accounts payable:
Trade 458,619 414,230
Related parties 148,582 147,934
Interest payable 74,834 23,296
Tenant security deposits 61,483 63,129
Other liabilities 40,148 61,651
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Total liabilities 6,948,089 6,909,495
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Minority interests 539,871 562,116
Partners' equity 1,575,351 1,771,995
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Total $ 9,063,311 $ 9,243,606
============ ============
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<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
-----------------------------------
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
For the Three Months and Six Months Ended June 30, 1996 and 1995
(Unaudited)
Three months Six months
ended June 30, ended June 30,
1996 1995 1996 1995
---- ---- ---- ----
Revenues:
Rental income $ 278,344 $ 270,237 $ 561,533 $ 551,675
Interest income 625 514 1,108 956
--------- --------- --------- ---------
Total revenues 278,969 270,751 562,641 552,631
--------- --------- --------- ---------
Costs and expenses:
Rental operations 136,304 118,880 239,643 223,187
General and
administrative 12,000 12,000 24,000 24,000
Interest 137,713 139,663 264,302 267,562
Depreciation and
amortization 126,791 128,442 253,584 257,886
--------- --------- --------- ---------
Total costs and
expenses 412,808 398,985 781,529 772,635
--------- --------- --------- ---------
Loss before minority
interests (133,839) (128,234) (218,888) (220,004)
Minority interests'
portion of loss 15,705 9,661 22,245 17,996
--------- --------- --------- ---------
Net loss ($118,134) ($118,573) ($196,643) ($202,008)
========= ========= ========= =========
Net loss per limited
partnership unit ($ 23.23) ($ 23.32) ($ 38.67) ($ 39.73)
========= ========= ========= =========
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<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
-----------------------------------
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
For the Six Months Ended June 30, 1996 and 1995
(Unaudited)
Six months ended
June 30,
1996 1995
---- ----
Cash flows from operating activities:
Net loss ($196,643) ($202,008)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 253,584 257,886
Minority interest (22,245) (17,996)
Changes in assets and liabilities:
Decrease (increase) in restricted cash 18,965 (7,193)
(Increase) decrease in accounts receivable (26,859) 7,590
Increase in other assets (4,451) (29,207)
Increase accounts payable - trade 44,390 9,582
Increase in accounts payable -
related parties 649 2,663
Increase in interest payable 51,538 25,097
Decrease in other liabilities (21,505) (15,391)
(Decrease) increase security deposits (1,646) 148
--------- ---------
Net cash provided by operating activities 95,777 31,171
--------- ---------
Cash flows from investing activities:
Capital expenditures (35,497) (1,377)
--------- ---------
Net cash used in investing activities (35,497) (1,377)
--------- ---------
Cash flows from financing activities:
Principal payments (34,832) (31,612)
--------- ---------
Net cash used in financing activities (34,832) (31,612)
--------- ---------
Increase (decrease) in cash and cash equivalents 25,448 (1,818)
--------- ---------
Cash and cash equivalents at beginning of period 5,116 13,404
--------- ---------
Cash and cash equivalents at end of period $ 30,564 $ 11,586
========= =========
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<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.
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<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
June 30, 1996.
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<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: August 6, 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
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<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000859473
<NAME> DHI 1990
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 30,564
<SECURITIES> 0
<RECEIVABLES> 37,024
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 105,472
<PP&E> 11,296,697
<DEPRECIATION> 2,533,796
<TOTAL-ASSETS> 9,063,311
<CURRENT-LIABILITIES> 607,201
<BONDS> 6,164,423
0
0
<COMMON> 0
<OTHER-SE> 2,115,222
<TOTAL-LIABILITY-AND-EQUITY> 9,063,311
<SALES> 0
<TOTAL-REVENUES> 562,641
<CGS> 0
<TOTAL-COSTS> 263,643
<OTHER-EXPENSES> 253,584
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 264,302
<INCOME-PRETAX> (196,643)
<INCOME-TAX> 0
<INCOME-CONTINUING> (196,643)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (196,643)
<EPS-PRIMARY> (38.67)
<EPS-DILUTED> 0.00
</TABLE>
