UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file 33-33093
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
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Securities registered pursuant to Section 12(b) of the Act: NONE
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Securities registered pursuant to Section 12(g) of the Act: 5,032 Units
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UNITS OF LIMITED PARTNERSHIP INTEREST
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(Title of Class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
Aggregate market value of Units held by non-affiliates of the Registrant: Not
Applicable*
* Securities not quoted in any trading market to Registrant's knowledge.
<PAGE>
PART I
Item 1. Business
a. General Development of Business
Diversified Historic Investors 1990 ("Registrant") is a
limited partnership formed in 1989 under the Pennsylvania Uniform Limited
Partnership Act. As of December 31, 1994, Registrant had outstanding 5,032
units of limited partnership interest (the "Units").
Registrant is presently in its operating stage. It
currently owns three properties or interests therein. See Item 2. Properties,
for a description thereof. For a discussion of the operations of the
Registrant, See Part II, Item 7. Management's Discussion
and Analysis of Financial Conditions and Results of Operations.
b. Financial Information about Industry Segments
The Registrant operates in one industry segment.
c. Narrative Description of Business
Registrant is in the business of operating, holding,
selling, exchanging and otherwise dealing in and with real properties
containing improvements which are Certified Historic Structures, as such term
is defined in the Internal Revenue Code (the Code), for use as apartments,
offices, hotels and commercial spaces, or any combination thereof, or low
income housing eligible for the tax credit provided by Section 42 of the Code,
and such other uses as the Registrant's general partner may deem appropriate.
Since the Registrant's inception, all the properties
acquired either by the Registrant, or the subsidiary partnerships in which it
has an interest, have been rehabilitated and certified as Historic Structures
and have received the related Investment Tax Credit. In addition, one property
is a low-income housing structure which qualifies for, has received, and will
continue to receive the Low Income Tax Credits. All three properties are held
for rental operations. At this time it is anticipated that all the properties
will continue to be held for this purpose. At such time as the market for real
estate of the type held by the Registrant improves and real property values
begin to increase, the Registrant will re-evaluate its investment strategy
regarding the properties.
As of December 31, 1994, Registrant owned interests in
three properties, located in Connecticut (one), Virginia (one), and Louisiana
(one). In total, the properties contain 127 apartment units and 14,877 square
feet ("sf") of commercial/retail space. As of December 31, 1994, 112 apartment
units are under lease at monthly rental rates ranging from $200 to $1,720 and
the 14,877 sf of commercial/retail space is under lease at annual rental rates
ranging from $16.68 to $27.00 per sf. Rental of the apartments and commercial
space is not expected to be seasonal. For a further discussion of the
properties, see Item 2, Properties.
Due to the overbuilding that occurred in the 1980's, the
competition for both residential and commercial tenants in the local markets
where the Registrant's properties are located is generally strong. As a
result, the Registrant is forced to keep its rent levels competitively low in
order to maintain moderate to high occupancy levels. In each market, there are
several similar historically certified rehabilitated buildings. However, there
is no organization which holds a dominant position in the residential housing
or commercial leasing market, in any of the geographic areas in which the
Registrant's properties are located.
Registrant has no employees. Registrant's activities are
overseen by Brandywine Construction & Management, Inc., ("BCMI"), a real
estate management firm.
d. Financial Information About Foreign and Domestic Operations
and Export Sales.
See Item 8. Financial Statements and Supplementary Data.
Item 2. Properties
As of the date hereof, Registrant owned three properties, or
interests therein. A summary description of each property held at December 31,
1994 is given below.
a. Jefferson/Seymour - consists of 30 apartment units and 665
sf of commercial space at 94-96, 98-100 Jefferson Street and 134-138 Seymour
Street in Hartford, Connecticut. In October 1990, the Registrant was admitted
as a limited partner with a 99% interest in Jefferson Seymour Limited
Partnership ("JSLP"), a Connecticut limited partnership, for a cash
contribution of $1,417,000. One of the general partners contributed $390,000
of capital. JSLP subsequently capitalized $261,665 in acquisition costs
related to the investment. JSLP acquired and rehabilitated the buildings for
$3,288,665 ($129.48 per sf), including two mortgage notes payable in original
aggregate principal amount of $1,220,000. The first note payable of $300,000
(principal balance of $272,626 at December 31, 1994) bears interest at 1% and
is due June 2010. The second note payable of $920,000 (principal balance of
$794,934 at December 31, 1994) is due December 1997. In February 1993, the
lender modified this loan. The modified loan terms provide for interest at 8%
until January 1, 1996 and then floating over the next two years based on the
lender's two year cost of funds plus 2-1/2%. Principal and interest are
payable monthly based on a 25-year amortization schedule until maturity. The
property is managed by an independent property management firm. As of December
31, 1994, 26 residential apartments are under lease (87%) at monthly rents
ranging from $425 to $703 per month. As of December 31, 1994, all of the 665
sf of commercial space is under lease (100%) and both tenants have an annual
rent of $27.00 per sf.
All residential leases are renewable, one-year leases. The
occupancy rate since completion of the building in 1991 has been 98% for 1993,
97% for 1992, and 93% for 1991. The monthly rental range has been approximately
the same since 1991. The occupancy for the commercial space since the
completion of the building in 1991 has been 100% for 1993, 100% for 1992, and
100% for 1991. The range for annual rents has been $24.96 to $25.32 per sf for
1993, $6.48 to $6.84 per sf for 1992, and $21.60 to $25.20 per sf for 1991.
The commercial space is occupied by two tenants who each occupy ten percent or
more of the rentable square footage. They operate principally as a beauty
salon and ambulance dispatch service. They have annual options to renew their
leases for one and two years, respectively. For tax purposes, this property has
a federal tax basis of $2,447,665 and is depreciated using the straight-line
method with a useful life of 27.5 years. The annual real estate taxes are
$24,791 which is based on an assessed value of $720,040 taxed at a rate of
$3.443 per $100. It is the opinion of the management of the Registrant that
the property is adequately covered by insurance.
b. Shockoe Hearth Apartments - consists of 29 apartment
units and 14,212 sf of commercial space at 1417-1423 East Cary Street in
Richmond, Virginia. In December 1990, the Registrant was admitted with a 99%
general partnership interest in Lawrence One General Partnership ("LOGP"), a
Virginia general partnership, for a cash contribution of $800,000. LOGP
subsequently capitalized $150,455 in acquisition costs relating to the
investment. LOGP acquired and rehabilitated the property for $2,600,000
(excluding the capitalized costs, referred to above) ($90.49 sf), consisting of
the equity contribution and $1,800,000 provided by a loan (principal balance of
$1,768,814 at December 31, 1994) bearing interest at 10% and due February 2022.
The property is managed by an independent property management firm. As of
December 31, 1994, 28 of the 29 apartments (97%) are under lease with rents
ranging from $200 to $600 per month and all of the commercial space is under
lease by one tenant at an annual rent of $16.68 per sf.
All residential leases are renewable, one-year leases. The
occupancy rate since the completion of the building in 1991, has been 100% for
1993, 98% for 1992, and 90% for 1991. The monthly rental range has been
approximately the same since 1991. The occupancy for the commercial space
since the completion of the building in 1991, has been 100% for 1993, 79% for
1992, and 72% for 1991. The range for annual rents has been $14.40 to $20.40
per sf for 1993, $3.00 to $19.92 per sf for 1992, and $12.72 to $21.24 per sf
for 1991. The commercial space is occupied by one tenant who operates as a
restaurant and currently has a ten year lease which expires February 14, 2003.
For tax purposes, this property has a federal tax basis of $2,456,358 and is
depreciated using the straight-line method with a useful life of 27.5 years.
The annual real estate taxes are $3,930 which is based on an assessed value of
$271,972 taxed at a rate of $1.445 per $100. It is the opinion of the
management of the Registrant that the property is adequately covered by
insurance.
c. The Bakery Apartments - consists of 68 apartment units at
1111 South Peters Street in New Orleans, Louisiana. In March 1991, the
Registrant acquired a 72.3% general partnership interest in The Bakery
Apartments ("TBA"), a Louisiana general partnership, for a cash contribution of
$1,235,000. Registrant subsequently capitalized $242,040 in acquisition costs
relating to the investment. TBA acquired and rehabilitated the property for
$5,029,000 ($65.18 per sf), exclusive of the aforementioned acquisition costs.
The rehabilitation of the property was financed in part by a $3,329,000
construction loan which bore interest at Chase Manhattan Bank's prime rate plus
1/2%, with interest payable monthly. In October 1992, the loan was
refinanced with two new loans, one for $3,135,000 (principal balance of
$3,080,215 at December 31, 1994) and the other for $201,500 (principal balance
of $198,369 at December 31, 1994). The first loan bears interest at 8.25%,
with monthly principal and interest payments based on a 30 year amortization
schedule, principal due in 1999. The second loan is from the developer/partner
and has the same terms as the first loan. In order to satisfy certain credit
requirements of the lender, the Registrant and its affiliates exchanged their
general partnership interests for limited partnership interests in a
reconstituted partnership. However, the Registrant and its affiliates retained
substantially the same rights and privileges as they had as general partners.
In March 1991, a $175,000 collateral mortgage note (principal balance of
$160,874 at December 31, 1994) was issued to the developer/partner for working
capital advances. This note bears interest at 9% with payments based on
available positive cash flow of the property. The property is managed by a
property management firm which is an affiliate of the Registrant's co-general
partner of TBA. As of December 31, 1994, 58 units are under lease (85%) with
rents ranging from $465 to $1,720.
All residential leases are renewable, one-year leases. The
occupancy rate since completion of the building in 1991 has been 92% for 1993,
93% for 1992, and 29% for 1991. The monthly rental range has been
approximately the same since 1991. For tax purposes, this property has federal
tax basis of $3,344,526 and is depreciated using the straight-line method with
a useful life of 27.5 years. The annual real estate taxes are $11,708 which is
based on an assessed value of $65,700 taxed at a rate of $17.82 per $100. It
is the opinion of the management of the Registrant that the property is
adequately covered by insurance.
Item 3. Legal Proceedings
a. 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 fiscal years covered by this
report to a vote of security holders.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters
a. There is no established public trading market for the
Units. Registrant does not anticipate any such market will develop. Trading
in the Units occurs solely through private transactions. The Registrant is not
aware of the prices at which trades occur. Registrant's records indicate that
- -0- units were transferred of record in 1994.
b. As of December 31, 1994, there were 490 record holders of
Units.
c. Registrant has not declared any cash dividends in 1994 and
1993.
Item 6. Selected Financial Data
The following selected financial data are for the five years
ended December 31, 1994.
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Rental income $ 1,026,467 $ 998,697 $874,439 $ 314,518 $ 371
Interest income 1,884 2,850 17,768 43,190 17,375
Other income -0- -0- -0-* 80,000 -0-
Net loss 482,279 476,136 504,606* 564,330 134,367
Net loss per Unit 94.88 93.68 99.28* 111.03 26.44
Total assets (net 9,755,227 10,299,756 11,032,307 11,624,381 8,862,452
of depreciation
and amortization)
Debt obligations 6,275,832 6,348,546 6,506,322 6,523,063 2,782,943
* Unaudited
</TABLE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(1) Liquidity and Capital Resources.
As of December 31, 1994, Registrant had cash of
approximately $13,404. 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 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 December 31, 1994, Registrant had restricted cash of
$144,480 consisting primarily of funds held as security deposits, replacement
reserves and escrows for taxes. As a consequence of these restrictions as to
use, Registrant does not deem these funds to be a source of liquidity.
(2) Capital Resources
Due to the 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. The Registrant is
not aware of any factors which would cause historical capital expenditures
levels not to be indicative to 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.
Results of Operations
During the fiscal year 1994, Registrant incurred a loss of
$482,279 ($94.88 per limited partnership unit) compared to a loss of $476,136
($93.68 per limited partnership unit) in 1993 and a loss of $504,606 ($99.28
per limited partnership unit) in 1992.
Rental income increased from $874,439 in 1992 to $998,697
in 1993 to $1,026,467 in 1994. The increase from 1993 to 1994 is mainly the
result of an increase in rental income at The Bakery Apartments and Shockoe
Hearth Apartments. The increase at the Bakery Apartments is due to an increase
in corporate apartment rentals which generate higher revenue than residential
rentals because the leases are generally short term in nature and are rented at
higher monthly rates. The increase at the Shockoe Hearth Apartments is the
result of an increase in the monthly rental rate of its sole commercial tenant.
This increased rental rate began when the tenant expanded its space to include
the previous tenant's square footage at a higher per square footage charge than
the former tenant. Also, the tenant executed a new lease during 1994
increasing the rent on its existing space. The increase from 1992 to 1993 is
due to an increase of rental income at all three properties due to higher
occupancy levels and higher rents.
As a result of a decrease in the amount of cash during 1994
and 1993, interest income declined from $17,768 in 1992 to $2,850 in 1993 to
$1,884 in 1994.
Rental operations expenses decreased from $329,772 in 1992
to $327,984 in 1993 and increased to $443,668 in 1994. The overall increase
from 1993 to 1994 is the result of higher operating expenses at all three
properties, including maintenance and wages. In particular, The Bakery
Apartments incurred higher expense (due to the increase in corporate apartment
rentals). Also, an audit adjustment made in 1993 decreased net operating
expenses in 1993 below actual operating expense expenditures, (see below).
There was only a slight increase in rental operations expenses from 1992 to
1993.
General and administrative expenses decreased from $81,451
in 1992 to $56,965 in 1993 and increased to $62,262 in 1994. The increase from
1993 to 1994 is due to a general partner fee paid in 1994. The decrease from
1992 to 1993 relates to higher legal fees incurred in 1992 due to refinancings
at The Bakery and Jefferson Seymour.
Interest expense increased from $542,765 in 1992 to
$616,374 in 1993, and decreased to $541,374 in 1994. The decrease in interest
expense from 1993 to 1994 and the increase in interest expense from 1992 to
1993 is primarily due to the accrual of interest in 1993 on amounts owed, upon
which interest had not been accrued in prior years.
Depreciation and amortization increased from $508,755 in
1992 to $525,083 in 1993 and decreased to $523,309 in 1994. The increase from
1992 to 1993 is due to the fact that half year amortization expense was
recognized in 1992 for The Bakery Apartment's loan costs while a full year of
amortization expense was recognized in 1993 and 1994.
In 1994 losses of $448,000 were incurred at the
Registrant's three properties compared to $373,000 in 1993 and $402,000 in
1992. A discussion of property operations/activities follows:
In 1994, Registrant incurred a loss of $126,000 at
Jefferson/Seymour, including $132,000 of depreciation expense compared to a
loss of $117,000 including $132,000 of depreciation expense in 1993, and a loss
of $129,000 including $135,000 of depreciation expense in 1992. The increase in
the loss from 1993 to 1994 is due primarily to an increase in maintenance
expense resulting from a high turnover rate of tenants, partially offset by an
increase in rental income. The Registrant expects the operating results in
1995 to be similar to those experienced in 1994.
In 1994, Registrant incurred a loss of $116,000 at Shockoe
Hearth including $98,000 of depreciation expense compared to a loss of $124,000
including $101,000 of depreciation expense in 1993 and a loss of $94,000
including $89,000 of depreciation expense in 1992. The decrease in the loss
from 1993 to 1994 is due to an increase in rental income partially offset by an
increase in operating expenses such as utilities, maintenance, advertising and
legal and accounting fees. As previously stated, the increase in rental income
is due to the increased rent charged to its commercial tenant. The Registrant
expects the operating results in 1995 to be similar to those experienced in
1994.
In 1994, Registrant incurred a loss of $206,000 at the
Bakery including $257,000 of depreciation expense compared to a loss of
$132,000 including $247,000 of depreciation expense in 1993 and a loss of
$179,000 including $252,000 of depreciation expense in 1992. The increase in
the loss from 1993 to 1994 is primarily due to an audit adjustment made in 1993
which reduced operating expenses in that year, partially offset by an increase
in rental income in 1994 resulting from increased rentals of corporate
apartments. The Registrant expects the operating results in 1995 to be similar
to those experienced in 1994.
<PAGE>
Independent Auditor's Report
To the Partners of
Diversified Historic Investors 1990
We have audited the accompanying consolidated balance sheets of Diversified
Historic Investors 1990 (a Pennsylvania Limited Partnership) and its
subsidiaries as of December 31, 1994 and 1993 and the related consolidated
statements of operations, changes in partners' equity and cash flows for the
years then ended. These consolidated financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We did
not audit the financial statements of The Bakery Apartments Limited
Partnership, which statements reflect total assets of $4,378,350 and
$4,647,124, as of December 31, 1994 and 1993, respectively, and total revenues
of $602,641 and $587,501, respectively for the years then ended. Those
statements were audited by other auditors whose report has been furnished to
us, and our opinion, insofar as it relates to the amounts included for The
Bakery Apartments Limited Partnership is based solely on the report of the
other auditors.
We conducted our audits, in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits and the report of other auditors provide a reasonable basis for our
opinion.
In our opinion, based on our audits and the report of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Diversified Historic Investors
1990 as of December 31, 1994 and 1993, and the results of their operations and
their cash flows for the years then ended in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Schedule of Real Estate and
Accumulated Depreciation on page 22 is presented for the purposes of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Gross, Kreger & Passio
Philadelphia, Pennsylvania
March 23, 1995
<PAGE>
Independent Auditor's Report
To the Partners of
The Bakery Apartments Limited Partnership
We have audited the accompanying balance sheets of The Bakery Apartments
Limited Partnership for December 31, 1994 and 1993 and the related statements
of operations, changes in partners' equity and cash flows for the years then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits, in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Bakery Limited Partnership
as of December 31, 1994 and 1993, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
Pailet, Meunier and LeBlanc, L.L.P.
Metairie, Louisiana
January 27, 1995
<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
(a limited partnership)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
Consolidated financial statements: Page
Consolidated Balance Sheets at December 31, 1994
and 1993 12
Consolidated Statements of Operations for the Years
Ended December 31, 1994, 1993, and 1992 (unaudited) 13
Consolidated Statements of Changes in Partners'
Equity for the Years Ended December 31, 1994, 1993,
and 1992 14
Consolidated Statements of Cash Flows for the Years
Ended December 31, 1994, 1993, and 1992 (unaudited) 15
Notes to consolidated financial statements 16-20
Financial statement schedules:
Schedule XI - Real Estate and Accumulated Depreciation 22
Notes to Schedule XI 23
All other schedules are omitted because they are not applicable or the required
information is shown in the consolidated financial statements or notes thereto.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
(a limited partnership)
CONSOLIDATED BALANCE SHEETS
December 31, 1994 and 1993
Assets
1994 1993
Rental properties at cost:
Land $ 248,856 $ 248,856
Buildings and improvements 10,843,702 10,835,354
Furniture and fixtures 155,592 155,250
---------- ----------
11,248,150 11,239,460
Less - accumulated depreciation (1,834,659) (1,366,030)
---------- ----------
9,413,491 9,873,430
Cash and cash equivalents 13,404 41,873
Restricted cash 144,480 142,327
Accounts receivable 9,621 14,497
Other assets (net of accumulated
amortization of $140,417 and $85,737) 174,231 227,629
---------- ----------
Total $ 9,755,227 $10,299,756
========== ==========
Liabilities and Partners' Equity
Liabilities:
Debt obligations $ 6,275,832 $ 6,348,546
Accounts payable:
Trade 366,971 320,464
Related parties 118,193 93,946
Interest payable 35,424 33,956
Tenant security deposits 57,084 60,938
Other liabilities 39,481 31,374
---------- ---------
Total liabilities 6,892,985 6,889,224
Minority interests 620,720 686,731
Partners' equity 2,241,522 2,723,801
---------- ----------
Total $ 9,755,227 $10,299,756
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
(a limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1994, 1993 and 1992
1994 1993 1992
(Unaudited)
Revenues:
Rental income $1,026,467 $ 998,697 $ 874,439
Interest income 1,884 2,850 17,768
--------- --------- ---------
Total revenues 1,028,351 1,001,547 892,207
Costs and expenses:
Rental operations 443,668 327,984 329,772
General and administrative 62,262 56,965 81,451
Interest 541,374 616,374 542,765
Depreciation and amortization 523,309 525,083 508,755
--------- --------- ---------
Total costs and expenses 1,570,613 1,526,406 1,462,743
--------- --------- ---------
Loss before minority interests (542,262) (524,859) (570,536)
Minority interests' 59,983 48,723 65,930
--------- --------- ---------
Net loss ($ 482,279) ($ 476,136) ($ 504,606)
========= ========= =========
Net loss per limited
partnership unit ($ 94.88) ($ 93.68) ($ 99.28)
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
(a limited partnership)
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
For the Years Ended December 31, 1994, 1993 and 1992
Diversified
Historic
Advisors Limited
1990 (1) Partners (2) Total
Percentage participation in profit or loss 1% 99% 100%
Balance at December 31, 1991 (unaudited) $ 3,013 $3,701,530 $3,704,543
Net loss (unaudited) (5,046) (499,560) (504,606)
------ --------- ---------
Balance at December 31, 1992 (2,033) 3,201,970 3,199,937
Net loss (4,761) (471,375) (476,136)
------ --------- ---------
Balance at December 31, 1993 (6,794) 2,730,595 2,723,801
Net loss (4,823) (477,456) (482,279)
------ --------- ---------
Balance at December 31, 1994 ($ 11,617) $2,253,139 $2,241,522
====== ========= =========
(1) General Partner.
(2) 5,032 limited partnership units outstanding at December 31, 1994, 1993,
and 1992.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
(a limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1994, 1993 and 1992
1994 1993 1992
(Unaudited)
Cash flows from operating activities:
Net loss ($482,279) ($476,136) ($504,606)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 523,309 525,083 508,755
Minority Interests (66,011) (57,451) (65,930)
Changes in assets and liabilities:
Increase in restricted cash (2,153) (97,857) (17,257)
Decrease (increase) in accounts receivable 4,876 (6,677) 3,982
Increase in other assets (1,282) (16,372) (133,462)
Increase (decrease) in accounts payable-trade 46,507 (80,109) (24,944)
Increase (decrease) in accounts payable - 24,247 31,678 (52,232)
related parties
Increase in interest payable 1,468 -0- -0-
(Decrease) increase in tenant security
deposits (3,854) (25,473) 41,365
Increase in other liabilities 8,107 32,716 31,014
------ ------- -------
Net cash provided by (used in) operating
activities 52,935 (170,598) (213,315)
------ ------- -------
Cash flows from investing activities:
Capital expenditures (8,690) (10,004) (1,969)
------ ------- -------
Net cash used in investing activities: (8,690) (10,004) (1,969)
------ ------- -------
Cash flows from financing activities:
Borrowings under debt obligations -0- -0- 3,334,501
Payments of principal under debt obligations (72,714) (157,776)(3,351,242)
------ ------- ---------
Net cash used in financing activities: (72,714) (157,776) (16,741)
------ ------- ---------
Decrease in cash and cash equivalents (28,469) (338,378) (232,025)
Cash and cash equivalents at beginning of year 41,873 380,251 612,276
------ ------- --------
Cash and cash equivalents at end of year $ 13,404 $ 41,873 $ 380,251
====== ======= ========
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for intrest $ 530,639 $ 586,574 $ 538,609
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
(a limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - ORGANIZATION
Diversified Historic Investors 1990 (the "Partnership") was formed in December
1989, to acquire, rehabilitate, and manage real properties which were
Certified Historic Structures, as defined in the Internal Revenue Code of 1986
(the "Code"), or which are eligible for designation as such, and which may also
be (but are not required to be) eligible for low income housing tax credits as
provided by Section 42 of the Code, and such other uses as Dover Historic
Advisors 1990 (the "General Partner") deems appropriate, and to engage in any
and all activities related or incidental thereto.
The General Partner, Dover Historic Advisors 1990 (a general partnership),
whose partners are Dover Historic Advisors, Inc., (a Pennsylvania corporation)
and Jacqueline Reichman, has the exclusive responsibility for all aspects of
the Partnership's operations.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies consistently applied in the
preparation of the accompanying consolidated financial statements follows:
1. Principles of Consolidation
The accompanying financial statements of the Partnership include the accounts
of three subsidiary partnerships (the "Ventures"), in which the Partnership has
controlling interests, with appropriate elimination of inter-partnership
transactions and balances. The financial statements for the year ended
December 31, 1992 are unaudited, with the exception of the balance sheet which
is audited. These financial statements reflect all adjustments (consisting
only of normal recurring adjustments) which, in the opinion of the General
Partner, are necessary for a fair statement of the results for that year.
2. Depreciation
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. Buildings and improvements are depreciated over 25
years and furniture and fixtures over five years.
3. Net Loss Per Limited Partnership Unit
The net loss per limited partnership unit is based on the weighted average
number of limited partnership units outstanding during the period (5,032 in
1994, 1993, and 1992).
4. Income Taxes
Federal and state income taxes are payable by the individual partners;
accordingly, no provision or liability for income taxes is reflected in the
financial statements.
5. Deferred Expenses
Loan fees have been incurred with respect to certain loans. Such fees were
deferred and are amortized over the term of the related loans.
6. Cash and Cash Equivalents
The Registrant considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents.
7. Costs of Issuance
Costs incurred in connection with the offering and sale of limited partnership
units have been charged against partners' equity as a reduction of the gross
proceeds.
8. Capitalized Interest
Interest, real estate taxes, and insurance costs incurred during the
rehabilitation period have been capitalized as part of the cost of the
property.
9. Reclassifications
Certain amounts in the 1993 financial statements have been reclassified to
conform with the format adopted in 1994.
NOTE C - PARTNERSHIP AGREEMENT
The significant terms of the Agreement of Limited Partnership (the
"Agreement"), as they relate to the financial statements, follow:
All distributable cash from operations (as defined in the Agreement of Limited
Partnership) will be distributed 1% to the General Partner and 99% to the
limited partners.
All distributable cash from sales or dispositions (as defined) will be
distributed to the limited partners up to their adjusted invested capital (as
defined) or a 6.5% cumulative, noncompounded annual return on their average
amounts previously distributed (as defined); thereafter, after receipt by the
General Partner or its affiliates of any accrued but unpaid real estate
brokerage commissions, the balance will be distributed 15% to the General
Partner and 85% to the limited partners.
Net income or loss from operations of the Partnership is allocated 1% to the
General Partner and 99% to the limited partners.
NOTE D - ACQUISITIONS
The Partnership acquired three controlling general or limited partnership
interests in Ventures during the period from October 1990 to March 1991, as
discussed below.
In October 1990, the Partnership was admitted, with a 99% general partner
interest, to a Connecticut general partnership which owns a building located in
Hartford, Connecticut, consisting of 30 apartment units and 665 square feet of
commercial space, for a cash contribution of $1,417,000.
In December 1990, the Partnership was admitted, with a 99% general partner
interest, to a Virginia general partnership which owns a building located in
Richmond, Virginia, consisting of 29 apartment units and 14,212 square feet of
commercial space, for a cash capital contribution of $800,000.
In March 1991, the Partnership purchased a 72.3% interest of a Pennsylvania
general partnership which owns a building located in New Orleans, Louisiana,
consisting of 68 apartments, for $1,235,000. In October 1992, in conjunction
with a refinancing, the Partnership exchanged its general partnership interest
for a limited partnership interest in a reconstituted partnership.
<TABLE>
NOTE E - DEBT OBLIGATIONS
Debt obligations were as follows:
<CAPTION> December 31,
1994 1993
<S> <C> <C>
Mortgage loan; interest at 8% until January 1996, when $ 794,934 $ 814,760
interest resets based on a specified index (8% at December
31, 1994); monthly payments of principal and interest of
$7,102, based upon a 25-year amortization; collateralized by
the related rental property; due in December 1997
Note payable; monthly payments of principal and interest (1%) 272,626 272,626
of $1,380; based on a 20-year amortization schedule; due 2010
Mortgage loan; interest at the Fidelity Federal Savings Bank 1,768,814 1,780,828
prime plus 1.5% with a minimum of 10% and a maximum of 15%
(10% at December 31, 1994, and 1993) based on a 30-year
amortization schedule; callable by the lender in 1997;
principal due February 1, 2022; collateralized by the related
rental property
Mortgage loan; interest at 8.25%; monthly payments of $23,552 3,080,215 3,105,714
based on a 30-year amortization schedule, collateralized by
the related rental property; due November 1999
Note payable to developer; interest at 9%; payments based on 160,874 175,000
positive cash flow of the property
Note payable to developer; interest at 8.25%; monthly 198,369 199,618
payments of $1,514 based on a 30-year amortization schedule;
collateralized by the related rental property; due November
1999
--------- ---------
$6,275,832 $6,348,546
========= =========
</TABLE>
Maturities of debt obligations at December 31, 1994, are as follows:
Year Ending December 31,
1995 $ 84,055
1996 90,630
1997 976,410
1998 77,086
1999 3,278,584
Thereafter 1,769,067
---------
$ 6,275,832
=========
NOTE F - TRANSACTIONS WITH RELATED PARTIES
At December 31, 1992, the Partnership maintained $318,166 in bank accounts in a
bank who has as a director a person who at that time was an affiliate of the
General Partner. The Partnership also earned approximately $12,114 from
deposits at this bank in 1992.
In 1992, the Partnership incurred fees of $16,510 for accounting services
performed by a company whose Chairman of the Board was at that time an
affiliate of the General Partner.
NOTE G - INCOME TAX BASIS RECONCILIATION
Certain items enter into the determination of the results of operations in
different time periods for financial reporting ("book") purposes and for income
tax ("tax") purposes. The reconciliation of net loss and partners' equity
follows:
For the Years Ended December 31,
1994 1993 1992
------- -------- --------
Net loss - book ($ 482,279) ($ 476,136) ($ 504,606)
Excess of book over tax depreciation 168,100 167,927 170,293
Timing differences (30,420) 6,252 (44,678)
Minority interest (12,527) (9,507) (20,139)
-------- ------- -------
Net loss - tax ($ 357,126) ($ 311,464) ($ 399,130)
======== ======= =======
Partners' equity - book $2,241,522 $2,723,801 $3,199,937
Costs of issuance 638,660 638,660 638,660
Cumulative book over (under) tax loss 89,816 (16,337 (181,009)
Basis reduction (1,565,104) (1,565,104) (1,565,104)
Capital adjustment - tax only -0- (19,000) -0-
--------- --------- ---------
Partners' equity - tax $1,404,894 $1,762,020 $2,092,484
========= ========= =========
<PAGE>
SUPPLEMENTAL INFORMATION
<PAGE>
<TABLE>
DIVERSIFIED HISTORIC INVESTORS 1990
(a limited partnership)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
<CAPTION>
Costs
Capitalized Gross Amount
Initial Costs to Subsequent to at which Carried at
Partnership (b) Acquisition December 31, 1995
Buildings Buildings
and and Accum Date of Date
Description (a) Encumbrances Land Improve Improve Land Improve Total Depr. Constr Acquired
(e) (b)(c) (c) (d) (a)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30 unit
apartments
and 665 square
feet of
commercial
space in $1,046,108 - $3,027,000 $261,665 - $3,288,665 $3,288,665 $751,258 1990 1990
Hartford, CT
29 unit
apartments and
14,212 square
feet of
commercial space
in Richmond, VA 1,756,294 186,381 2,287,980 328,204 186,381 $2,616,184 2,802,565 518,563 1990 1990
68 unit
apartments in
New Orleans, LA 3,396,852 62,475 5,103,816 3,679 62,475 $5,107,495 5,169,970 1,031,678 1991 1991
--------- ------- ---------- ------- ------- ---------- ---------- ---------
$6,199,254 $248,856 $10,418,796 $593,548 $248,856 $11,012,344 $11,261,200 $2,301,499
========= ======= ========== ======= ======= ========== ========== =========
</TABLE>
<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
(a limited partnership)
NOTES TO SCHEDULE XI
December 31, 1994
(A) All properties are certified historic structures as defined in the
Internal Revenue Code, or are eligible for designation as such. The
"date of construction" refers to the period in which such properties are
rehabilitated.
(B) The aggregate cost of real estate owned at December 31, 1994, for
Federal income tax purposes is approximately $9,610,207 However, the
depreciable basis of buildings and improvements is reduced for Federal
income tax purposes by the investment tax credit and the historic
rehabilitation credit obtained.
(C) Reconciliation of real estate:
1994 1993 1992
-------- -------- --------
Balance at beginning of year $11,239,460 $11,229,456 $11,227,487
Additions during the year:
Improvements 8,690 10,004 1,969
---------- ---------- ----------
Balance at end of year $11,248,150 $11,239,460 $11,229,456
========== ========== ==========
Reconciliation of accumulated depreciation:
1994 1993 1992
-------- -------- --------
Balance at beginning of year $ 1,366,030 $ 885,286 $ 404,548
Depreciation expense for the year 468,629 480,744 480,738
---------- ---------- ----------
Balance at end of year $ 1,834,659 $ 1,366,030 $ 885,286
========== ========== ==========
(D) See Note B to the financial statements for depreciation method and
lives.
(E) See Note E to the financial statements for further information.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of Registrant
a. Identification of Directors - Registrant has no directors.
b. Identification of Executive Officers
The General Partner of the Registrant is Dover Historic
Advisors 1990 (DoHA-1990), a Pennsylvania general partnership. The partners of
DoHA-1990 are as follows:
Name Position Term of Period Served
Office
Bryn Mawr Partner in No fixed June 1990 - May 1994
Properties DoHA-1990 term
Advisors, Inc.
("Bryn Mawr")
Dover Historic Partner in No fixed Since September 1990
Advisors, Inc. DoHA-1990 term
("Dover
Advisors")
Jacqueline D. Partner in No fixed Since May 1994
Reichman DOHA-1990 term
For further description of Dover Advisors, see paragraph e.
of this Item. There is no arrangement or understanding between either person
named above and any other person pursuant to which any person was or is to be
selected as an officer.
c. Identification of Certain Significant Employees.
Registrant has no employees. Its administrative and operational functions are
carried out by a property management and partnership administration firm
engaged by the Registrant.
d. Family Relationships. There is no family relationship
between or among the executive officers and/or any person nominated or chosen
by Registrant to become an executive officer.
The general partner is responsible for the management and
control of Registrant's affairs and will have general responsibility and
authority in conducting its operations. DoHA-1990 is a general partnership
formed in 1989.
e. Business Experience.
The partners of DoHA-1990 are Dover Advisors and Jacqueline
Reichman. The General Partner may retain its affiliates to manage certain of
the Properties.
Dover Advisors, a wholly-owned subsidiary of DHP, Inc.,
(formerly Dover Historic Properties, Inc.) is a corporation formed in February
1989 under the laws of the Commonwealth of Pennsylvania for the purpose of
acting as the general partner (or a partner of the general partner) in real
estate programs such as the Registrant. DHP, Inc. is a subsidiary of The Dover
Group, Ltd., an entity formed in 1985 to act as the holding company for DHP,
Inc. and certain other companies involved in the development and operations of
both historic properties and conventional real estate as well as in financial
(non-banking) services.
In February 1992, The Dover Group, Ltd's name was changed to D,LTD.
The executive officers, directors and key employees of
Dover Advisors are described below.
Michael J. Tuszka (age 48) was appointed Chairman of both
Dover Advisors and D, LTD on January 27, 1993. Mr. Tuska has been associated
with Dover Advisors and its affiliates since 1984.
Donna M. Zanghi (age 38) was appointed Secretary/Treasurer
of Dover Advisors and Secretary/Treasurer of DHP, Inc. on June 15, 1993. She
is also a Director and Secretary/Treasurer of D, LTD. She has been associated
with Dover Advisors and its affiliates since 1984 except for the period from
December 1986 to June 1989 and the period from November 1, 1992 to June 14,
1993.
Michele F. Rudoi, (age 31) was appointed on January 27,
1993 as Assistant Secretary of Dover Advisors, D, LTD and DHP, Inc. and
Director of D, LTD.
Bryn Mawr, a wholly-owned subsidiary of BMR Holdings, Inc.
("BMR Holdings") is a corporation formed in August 1988 under the laws of the
commonwealth of Delaware which holds, as its principal asset, a controlling
interest in Resource America, Inc. ("RAI"), a publicly-held oil and gas
company.
BMR Holdings is owned 93.7% by Bryn Mawr Resources, Inc.
("BMR"), a Delaware Corporation and 6.3% by Bryn Mawr Energy Company ("BME"), a
Pennsylvania Corporation (which is 89.7% owned by BMR).
The executive officers and directors of Bryn Mawr are
described below:
Francis J. Bagnell (age 66) is President and a Director of
Bryn Mawr. He also serves as President, Chief Operating Officer and a Director
of RAI.
Tracy Meagher (age 34) was appointed on February 26, 1993
as Secretary of Bryn Mawr.
Effective May 11, 1994, Bryn Mawr resigned as a partner of
DoHA-1990.
Jacqueline D. Reichman was appointed on May 11, 1994 as a
partner of DoHA-1990. Ms. Reichman and her affiliates have extensive
experience in real estate related ventures.
Item 11. Executive Compensation
a. Cash Compensation - During 1994, Registrant paid a general
partner fee of $6,000 to DoHA-1990.
b. Compensation Pursuant to Plans - Registrant has no plan
pursuant to which compensation was paid or distributed during 1994, or is
proposed to be paid or distributed in the future, to DoHA-1990, any partner
therein, or any person named in paragraph c. of Item 10 of this report.
c. Other Compensation - No compensation not referred to in
paragraph a. or paragraph b. of this Item was paid or distributed during 1994
to DoHA-1990, any partner therein, or any person named in paragraph c. of Item
10.
d. Compensation of Directors - Registrant has no directors.
e. Termination of Employment and Change of Control Arrangement
- -
Registrant has no compensatory plan or arrangement, with respect to any
individual, which results or will result from the resignation or retirement of
any individual, or any termination of such individual's employment with
Registrant or from a change in control of Registrant or a change in such
individual's responsibilities following such a change in control.
Item 12. Security Ownership of Certain Beneficial Owners and Management
a. Security Ownership of Certain Beneficial Owners - No person
is known to Registrant to be the beneficial owner of more than five percent of
the issued and outstanding Units.
b. Security Ownership of Management - No equity securities of
Registrant are beneficially owned by any person named in paragraph c. of Item
10.
c. Changes in Control - Registrant does not know of any
arrangement, the operation of which may at a subsequent date result in a change
in control of Registrant.
Item 13. Certain Relationships and Related Transactions
Pursuant to Registrant's Amended and Restated Agreement of
Limited Partnership, DoHA-1990 is entitled to 10% of Registrant's distributable
cash from operations in each year. There was no such share allocable to DoHA-
1990 for fiscal years 1992 to 1994.
a. Certain Business Relationships - Registrant has no
directors.
b. Indebtedness of Management - No executive officer or
significant employee of Registrant, Registrant's general partner (or any
employee thereof) or any affiliate of any such person, is or has at any time
been indebted to Registrant.
PART IV
Item 14. (A) Exhibits, Financial Statement Schedules and Reports on Form 8-K.
1. Financial Statements:
a. Consolidated Balance Sheets at December 31, 1994 and 1993.
b. Consolidated Statements of Operations for the Years
Ended December 31, 1994, 1993 and 1992 (unaudited).
c. Consolidated Statements of Changes in Partners' Equity
for the Years Ended December 31, 1994, 1993 and 1992.
d. Consolidated Statements of Cash Flows for the Years
Ended December 31, 1994, 1993 and 1992 (unaudited).
e. Notes to consolidated Financial Statements.
2. Financial statement schedules:
a. Schedule XI- Real Estate and Accumulated Depreciation.
b. Notes to Schedule XI.
3. Exhibits:
a. Exhibit Document
Number
3 Registrant's Amended and Restated
Certificate of Limited Partnership and
Agreement of Limited Partnership,
previously filed as part of Amendment
No. 1 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 of this
Form 10-K.
b. Reports on Form 8-K:
No reports were filed on Form 8-K during the quarter
ended December 31, 1994.
c. Exhibits:
See Item 14 (A)(3) above.
<PAGE>
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) 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.
DIVERSIFIED HISTORIC INVESTORS 1990
Date: May 12, 1995 By: Dover Historic Advisors 1990,
General Partner
By: Dover Historic Advisors, Inc., Partner
By: /s/ Michael J. Tuszka
MICHAEL J. TUSZKA,
Chairman
By: /s/ Donna M. Zanghi
DONNA M. ZANGHI,
Secretary and Treasurer
By: /s/ Michele F. Rudoi
MICHELE F. RUDOI,
Assistant Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
Registrant and in the capacities and on the dates indicated.
Signature Capacity Date
DOVER HISTORIC ADVISORS 1990 General Partner
By: Dover Historic Advisors, Inc. Partner
By: /s/ Michael J. Tuszka May 8, 1995
MICHAEL J. TUSZKA,
Chairman
By: /s/ Donna M. Zanghi May 12, 1995
DONNA M. ZANGHI,
Secretary and Treasurer
By: /s/ Michele F. Rudoi May 12, 1995
MICHELE F. RUDOI,
Assistant Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 13,404
<SECURITIES> 0
<RECEIVABLES> 9,621
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 11,248,150
<DEPRECIATION> 1,834,659
<TOTAL-ASSETS> 9,755,227
<CURRENT-LIABILITIES> 485,164
<BONDS> 6,275,832
0
0
<COMMON> 0
<OTHER-SE> 2,862,242
<TOTAL-LIABILITY-AND-EQUITY> 9,755,227
<SALES> 0
<TOTAL-REVENUES> 1,028,351
<CGS> 0
<TOTAL-COSTS> 443,668
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 541,374
<INCOME-PRETAX> (482,279)
<INCOME-TAX> 0
<INCOME-CONTINUING> (482,279)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (482,279)
<EPS-PRIMARY> (94.88)
<EPS-DILUTED> 0
</TABLE>
