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, 1998
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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.)
1609 Walnut Street, Philadelphia, PA 19103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 557-9800
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, 1998 (unaudited)
and December 31, 1997
Consolidated Statements of Operations - Three Months
Ended March 31, 1998 and 1997 (unaudited)
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1998 and 1997 (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, 1998, Registrant had cash of
$18,560. 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, 1998, Registrant had restricted
cash of $95,001 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
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 1998, Registrant
incurred a net loss of $107,372 ($21.12 per limited partnership unit)
compared to a net loss of $90,208 ($17.75 per limited partnership
unit) for the same period in 1997.
Rental income increased $739 from $277,352 in the
first quarter of 1997 to $278,091 in the same period in 1998. The
increase is the result of an increase at Shockoe Hearth Apartments
resulting from an increase in the average rental rates partially
offset by a decrease in rental income at The Bakery Apartments due to
a decline in corporate apartment rentals.
Expenses for rental operations increased by
$28,030 from $113,655 in the first quarter of 1997 to $141,685 in the
same period in 1998 due to an increase in maintenance expense at The
Bakery Apartments and an increase in maintenance and utilities expense
at Jefferson Seymour partially offset by a decrease in corporate
apartment expense at The Bakery Apartments. Maintenance expense at
The Bakery Apartments increased as a result of repairs to the roof in
the first quarter of 1998. At Jefferson Seymour, maintenance expense
increased due to deferred maintenance performed at the property in the
first quarter of 1998 and utilities expense increased due to an
increase in the consumption levels at the property. Corporate
apartments expense at The Bakery Apartments decreased due to the
decrease in the rental of the corporate apartments.
Depreciation and amortization expense decreased
$5,488 from $123,167 in the first quarter of 1997 to $117,679 in the
same period in 1998. The decrease from the first quarter of 1997 to
the first quarter in 1998 is due to personal property becoming fully
depreciated at The Bakery Apartments.
Losses incurred during the quarter at the
Registrant's three properties amounted to $101,000, compared to a loss
of approximately $80,000 for the same period in 1997.
In the first quarter of 1998, Registrant incurred
a loss of $52,000 at Jefferson Seymour including $31,000 of
depreciation and amortization expense, compared to a loss of $31,000
in the first quarter of 1997, including $32,000 of depreciation and
amortization expense. The increase in the loss from the first quarter
of 1997 to the same period in 1998 is due to an increase in
maintenance and utilities expense. Maintenance expense increased due
to deferred maintenance performed at the property in the first quarter
of 1998 and utilities expense increased due to an increase in the
consumption levels at the property.
In the first quarter of 1998, Registrant incurred
a loss of $8,000 at Shockoe Hearth, including $25,000 of depreciation
and amortization expense, compared to a loss of $15,000 including
$25,000 of depreciation and amortization expense in the first quarter
of 1997. The decrease in the loss from the first quarter of 1997 to
the same period in 1998 is due to an increase in the rental income due
to an increase in the average rental rates combined with a decrease in
interest expense due to a scheduled decrease in the interest rate of
the indebtedness encumbering the property.
In the first quarter of 1998, Registrant incurred
a loss of $41,000 at The Bakery Apartments, including $56,000 of
depreciation and amortization expense compared to a loss of $34,000
including $60,000 of depreciation and amortization expense in the
first quarter of 1997. The increase in the loss from the first
quarter of 1997 to the same period in 1998 is due to a decrease in
rental income and an increase in maintenance expense partially offset
by a decrease in depreciation and corporate apartments expense.
Rental income decreased due to a decline in the rental of corporate
apartments. Maintenance expense increased as a result of repairs to
the roof in the first quarter of 1998. Depreciation expense decreased
to personal property becoming fully depreciated. Corporate apartments
expense decreased due to the decrease in the rental of the corporate
apartments.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
(a Pennsylvania limited partnership)
CONSOLIDATED BALANCE SHEETS
Assets
March 31, 1998 December 31, 1997
(Unaudited)
Rental properties, at cost:
Land $ 248,856 $ 248,856
Buildings and improvements 10,915,625 10,915,625
Furniture and fixtures 155,592 155,592
---------- ----------
11,320,073 11,320,073
Less - accumulated depreciation (3,305,913) (3,195,801)
---------- ----------
8,014,160 8,124,272
Cash and cash equivalents 18,560 28,549
Restricted cash 95,001 95,609
Accounts receivable 22,049 24,505
Other assets (net ofamortization of
$272,621 and $264,054 at March 31, 1998
and December 31, 1997, respectively) 91,669 79,944
---------- ----------
Total $ 8,241,439 $ 8,352,879
========== ==========
Liabilities and Partners' Equity
Liabilities:
Debt obligations $ 6,047,197 $ 6,085,969
Accounts payable:
Trade 577,930 579,708
Related parties 193,796 192,796
Interest payable 182,134 125,670
Tenant security deposits 63,196 61,038
Other liabilities 26,981 37,864
---------- ----------
Total liabilities 7,091,234 7,083,045
---------- ----------
Minority interests 432,202 444,459
Partners' equity 718,003 825,375
---------- ----------
Total $ 8,241,439 $ 8,352,879
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
1998 1997
Revenues:
Rental income $278,091 $277,352
Interest income 0 23
------- -------
Total revenues 278,091 277,375
------- -------
Costs and expenses:
Rental operations 141,685 113,655
General and administrative 12,000 12,000
Interest 126,356 128,744
Depreciation and amortization 117,679 123,167
------- -------
Total costs and expenses 397,720 377,566
------- -------
Loss before minority interests (119,629) (110,191)
Minority interests' portion of loss 12,257 9,983
------- -------
Net loss ($107,372) ($ 90,208)
======= =======
Net loss per limited partnership unit ($ 21.12) ($ 17.75)
======= =======
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
Three months ended
March 31,
1998 1997
Cash flows from operating activities:
Net loss ($107,372) ($ 90,208)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 117,679 123,167
Minority interest (12,257) (9,983)
Changes in assets and liabilities:
Decrease (increase) decrease in restricted cash 608 (5,006)
Decrease (increase) in accounts receivable 2,456 (3,912)
Increase in other assets (19,292) (7,335)
(Decrease) increase accounts payable - trade (1,778) 15,701
Increase in accounts payable - related parties 1,000 0
Increase in interest payable 56,464 4,035
Increase in other liabilities 2,158 62
Decrease in security deposits (10,883) (3,805)
------- -------
Net cash provided by operating activities 28,783 22,716
------- -------
Cash flows from investing activities:
Capital expenditures 0 (3,100)
------- -------
Net cash used in investing activities 0 (3,100)
------- -------
Cash flows from financing activities:
Principal payments (38,772) (15,855)
------- -------
Net cash used in financing activities (38,772) (15,855)
------- -------
(Decrease) increase in cash and cash equivalents (9,989) 3,761
Cash and cash equivalents at beginning of period 28,549 33,160
------- -------
Cash and cash equivalents at end of period $ 18,560 $ 36,921
======= =======
The accompanying notes are an integral part of these financial statements.
<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, 1997.
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.
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 Document
Number
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, 1998.
<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: May 29, 1998 DIVERSIFIED HISTORIC INVESTORS 1990
By: Dover Historic Advisors 1990, General Partner
By: /s/ Jacqueline D. Reichman
--------------------------
JACQUELINE D. REICHMAN
Partner
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 18,560
<SECURITIES> 0
<RECEIVABLES> 22,049
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 11,320,073
<DEPRECIATION> 3,305,913
<TOTAL-ASSETS> 8,241,439
<CURRENT-LIABILITIES> 577,930
<BONDS> 6,047,197
0
0
<COMMON> 0
<OTHER-SE> 1,150,205
<TOTAL-LIABILITY-AND-EQUITY> 8,241,439
<SALES> 0
<TOTAL-REVENUES> 278,091
<CGS> 0
<TOTAL-COSTS> 141,685
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 126,356
<INCOME-PRETAX> (107,372)
<INCOME-TAX> 0
<INCOME-CONTINUING> (107,372)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (107,372)
<EPS-PRIMARY> 0
<EPS-DILUTED> (21.12)
</TABLE>
