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, 1999
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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, 1999 (unaudited)
and December 31, 1998
Consolidated Statements of Operations - Three Months
Ended March 31, 1999 and 1998 (unaudited)
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1999 and 1998 (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, 1999, Registrant had cash of
$95,233. 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, 1999, Registrant had restricted
cash of $154,518 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
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 1999, Registrant
incurred a net loss of $70,267 ($13.82 per limited partnership unit)
compared to a net loss of $107,372 ($21.12 per limited partnership
unit) for the same period in 1998.
Rental income decreased $2,129 from $278,091 in
the first quarter of 1998 to $275,962 in the same period in 1999. The
decrease is the result of a decrease in rental income at The Bakery
Apartments due to a decline in corporate apartment rentals partially
offset by an increase at Shockoe Hearth and Jefferson Seymour
resulting from increases in the average rental rates.
Expenses for rental operations decreased by
$28,416 from $141,685 in the first quarter of 1998 to $113,269 in the
same period in 1999 due to a decrease in maintenance expense at
Jefferson Seymour combined with a decrease in wages and salaries
expense at the Bakery Apartments. Maintenance expense decreased due
to deferred maintenance performed at Jefferson Seymour in the first
quarter of 1998. At the Bakery Apartments, wages and salaries expense
decreased due to the replacement of employees with contracted
security.
Interest expense decreased $14,013 from $126,356 in the
first quarter of 1998 to $112,343 in the same period in 1997. The
decrease is the result of refinancings of the first mortgages at both
The Bakery and Shockoe Hearth in the fourth quarter of 1998 which
lowered the interest rates.
Depreciation and amortization expense decreased
$3,983 from $117,679 in the first quarter of 1998 to $113,696 in the
same period in 1999. The decrease from the first quarter of 1998 to
the first quarter in 1999 is due to loan costs becoming fully
amortized at The Bakery Apartments partially offset by an increase at
Shockoe Hearth due to loan fees incurred in connection with the
refinancing of the first mortgage.
Losses incurred during the quarter at the
Registrant's three properties amounted to $57,000, compared to a loss
of approximately $101,000 for the same period in 1998.
In the first quarter of 1999, Registrant incurred
a loss of $44,000 at Jefferson Seymour including $30,000 of
depreciation and amortization expense, compared to a loss of $52,000
in the first quarter of 1998, including $31,000 of depreciation and
amortization expense. The decrease in the loss from the first quarter
of 1998 to the same period in 1999 is due to an increase in rental
income due to an increase in the average occupancy and a decrease in
maintenance expense due to deferred maintenance performed at the
property in the first quarter of 1998.
In the first quarter of 1999, Registrant
recognized income of $4,000 at Shockoe Hearth, including $27,000 of
depreciation and amortization expense, compared to a loss of $8,000
including $25,000 of depreciation and amortization expense in the
first quarter of 1998. The increase from the first quarter of 1998 to
the same period in 1999 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 partially offset by an increase in amortization
expense. Interest expense decreased as the result of a reduction in
the interest rate due to a refinancing of the first mortgage in the
fourth quarter of 1998. Amortization expense increased due to the
amortization of loan costs incurred in connection with the refinancing
of the first mortgage.
In the first quarter of 1999, Registrant incurred
a loss of $17,000 at The Bakery Apartments, including $50,000 of
depreciation and amortization expense compared to a loss of $41,000
including $56,000 of depreciation and amortization expense in the
first quarter of 1998. The decrease in the loss from the first
quarter of 1998 to the same period in 1999 is due to a decrease in
interest, amortization and wages and salaries expense partially offset
by a decrease in rental income. Interest expense decreased as a
result of a reduction in the interest rate due to a refinancing of the
first mortgage in the fourth quarter of 1998. Amortization expense
decreased due to loan costs becoming fully amortized. Wages and
salaries expense decreased due to the replacement of employees with
contracted security service. Rental income decreased due to a
decrease in the rental of corporate apartments.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS 1990
(a Pennsylvania limited partnership)
CONSOLIDATED BALANCE SHEETS
Assets
March 31, 1999 December 31, 1998
(Unaudited)
Rental properties, at cost:
Land $ 248,856 $ 248,856
Buildings and improvements 10,928,637 10,928,637
Furniture and fixtures 155,592 155,592
---------- ----------
11,333,085 11,333,085
Less - accumulated depreciation (3,746,679) (3,636,531)
---------- ----------
7,586,406 7,696,554
Cash and cash equivalents 95,233 59,236
Restricted cash 154,518 152,762
Accounts receivable 36,542 26,700
Other assets (net of amortization of
$317,860 and $314,312 at March 31, 1999
and December 31, 1998, respectively) 177,298 181,392
---------- ----------
Total $ 8,049,997 $ 8,116,644
========== ==========
Liabilities and Partners' Equity
Liabilities:
Debt obligations $ 6,325,777 $ 6,340,936
Accounts payable:
Trade 545,033 547,097
Related parties 166,699 166,699
Interest payable 226,835 221,346
Tenant security deposits 58,417 62,196
Other liabilities 29,305 5,151
---------- ----------
Total liabilities 7,352,066 7,343,425
---------- ----------
Minority interests 385,323 390,343
Partners' equity 312,608 382,876
---------- ----------
Total $ 8,049,997 $ 8,116,644
========== ==========
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, 1999 and 1998
(Unaudited)
Three months Three months
Ended Ended
March 31, March 31,
1999 1998
Revenues:
Rental income $275,962 $278,091
Interest income 58 0
------- -------
Total revenues 276,020 278,091
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Costs and expenses:
Rental operations 113,269 141,685
General and administrative 12,000 12,000
Interest 112,343 126,356
Depreciation and amortization 113,696 117,679
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Total costs and expenses 351,308 397,720
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Loss before minority interests (75,288) (119,629)
Minority interests' portion of loss 5,021 12,257
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Net loss ($ 70,267) ($107,372)
------- -------
Net loss per limited partnership unit ($ 13.82) ($ 21.12)
======= =======
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, 1999 and 1998
(Unaudited)
Three months ended
March 31,
1999 1998
Cash flows from operating activities:
Net loss ($ 70,267) ($107,372)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 113,696 117,679
Minority interest (5,021) (12,257)
Changes in assets and liabilities:
(Increase) decrease in restricted cash (1,756) 608
(Increase) decrease in accounts receivable (9,842) 2,456
Decrease (increase) in other assets 547 (19,292)
Decrease accounts payable - trade (2,065) (1,778)
Increase in accounts payable - related parties 0 1,000
Increase in interest payable 5,489 56,464
Increase in other liabilities 24,154 2,158
Decrease in security deposits (3,779) (10,883)
------- -------
Net cash provided by operating activities 51,156 28,783
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Cash flows from investing activities:
Capital expenditures 0 0
------- -------
Net cash used in investing activities 0 0
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Cash flows from financing activities:
Principal payments (15,159) (38,772)
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Net cash used in financing activities (15,159) (38,772)
------- -------
Increase (decrease) in cash and cash equivalents 35,997 (9,989)
Cash and cash equivalents at beginning of period 59,236 28,549
------- -------
Cash and cash equivalents at end of period $ 95,233 $ 18,560
======= =======
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, 1998.
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, 1999.
<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: June 9, 1999 DIVERSIFIED HISTORIC INVESTORS 1990
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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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 95,233
<SECURITIES> 0
<RECEIVABLES> 36,542
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 11,333,085
<DEPRECIATION> 3,746,679
<TOTAL-ASSETS> 8,049,997
<CURRENT-LIABILITIES> 545,033
<BONDS> 6,325,777
0
0
<COMMON> 0
<OTHER-SE> 312,608
<TOTAL-LIABILITY-AND-EQUITY> 8,049,997
<SALES> 0
<TOTAL-REVENUES> 275,962
<CGS> 0
<TOTAL-COSTS> 113,269
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 112,343
<INCOME-PRETAX> (70,267)
<INCOME-TAX> 0
<INCOME-CONTINUING> (70,267)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (70,267)
<EPS-BASIC> (13.82)
<EPS-DILUTED> 0
</TABLE>
