FORM 10-QSB---QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(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, 2000
[ ] 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 0-15740
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
(Exact name of small business issuer as specified in its charter)
Delaware 04-2924048
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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___
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 2000
Assets
Cash and cash equivalents $ 3,154
Receivables and deposits 592
Restricted escrows 183
Other assets 376
Investment property:
Land $ 6,357
Buildings and related personal property 70,528
76,885
Less accumulated depreciation (37,925) 38,960
$ 43,265
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 17
Tenant security deposit liabilities 233
Accrued property taxes 202
Distribution payable 790
Other liabilities 839
Mortgage note payable 44,632
Partners' Deficit:
General partner $(1,236)
Limited partners (566 units issued and outstanding) (2,212) (3,448)
$ 43,265
See Accompanying Notes to Financial Statements
b)
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
2000 1999
Revenues:
Rental income $ 2,952 $ 2,654
Other income 379 226
Total revenues 3,331 2,880
Expenses:
Operating 1,192 1,042
General and administrative 83 79
Depreciation 786 687
Interest expense 1,099 1,017
Property taxes 208 199
Total expenses 3,368 3,024
Net loss $ (37) $ (144)
Net loss allocated to general partner (3%) $ (1) $ (4)
Net loss allocated to limited partners (97%) (36) (140)
$ (37) $ (144)
Net loss per limited partnership unit $ (63.60) $(247.35)
Distributions per limited partnership unit $1,353.36 $ --
See Accompanying Notes to Financial Statements
c)
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Original capital contributions 566 $ -- $ 47,533 $ 47,533
Partners' deficit at
December 31, 1999 566 $(1,211) $ (1,410) $ (2,621)
Distribution to partners -- (24) (766) (790)
Net loss for the three months
ended March 31, 2000 -- (1) (36) (37)
Partners' deficit
at March 31, 2000 566 $ (1,236) $ (2,212) $ (3,448)
See Accompanying Notes to Financial Statements
d)
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
2000 1999
Cash flows from operating activities:
Net loss $ (37) $ (144)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 786 687
Amortization of loan costs 86 86
Change in accounts:
Receivables and deposits (232) (179)
Other assets (37) (72)
Accounts payable (121) (198)
Tenant security deposit liabilities 2 2
Accrued property taxes 202 199
Other liabilities 16 (150)
Net cash provided by operating activities 665 231
Cash flows used in investing activities:
Property improvements and replacements (233) (200)
Net (deposits to) withdrawals from restricted (91) 671
escrows
Net cash (used in) provided by investing
activities (324) 471
Cash flows used in financing activities:
Payments on mortgage note payable (191) (168)
Net increase in cash and cash equivalents 150 534
Cash and cash equivalents at beginning of period 3,004 2,078
Cash and cash equivalents at end of period $ 3,154 $ 2,612
Supplemental disclosure of cash flow information:
Cash paid for interest $ 990 $ 908
Supplemental disclosure of non-cash activity:
Distribution payable $ 790 $ --
See Accompanying Notes to Financial Statements
e)
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements of Riverside Park Associates
Limited Partnership (the "Partnership" or "Registrant") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of Winthrop Financial Associates, A Limited
Partnership (the "General Partner") the general partner of the Partnership, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three month
period ended March 31, 2000, are not necessarily indicative of the results that
may be expected for the fiscal year ending December 31, 2000. For further
information, refer to the financial statements and footnotes thereto included in
the Partnership's Annual Report on Form 10-KSB for the year ended December 31,
1999.
Certain reclassifications have been made to the 1999 information to conform to
the 2000 presentation.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment Investment and Management Company ("AIMCO"), a publicly
traded real estate investment trust, with AIMCO being the surviving corporation
(the "Insignia Merger"). As a result, AIMCO acquired control of the associate
general partner of the General Partner. Pursuant to the terms of the Second
Amended and Restated Agreement of Limited Partnership of the General Partner,
the associate general partner has the right to cause the General Partner to take
such action as it deems necessary in connection with the operation of the
Partnership. The General Partner does not believe that this transaction will
have a material effect on the affairs and operations of the Partnership.
On February 26, 1999, the interest of the associate general partner was
transferred to NHP Management Company ("NHP"), an affiliate of AIMCO.
Note C - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on NHP and its affiliates for
the management and administration of all Partnership activities. The Partnership
Agreement provides for certain payments to affiliates for services based on a
percentage of revenue and an annual partnership and investor service fee of
$110,000 subject to a 6% annual increase. The following transactions with NHP
and/or its affiliates were incurred during each of the three months ended March
31, 2000 and 1999:
1999 1998
(in thousands)
Property management fees (included in operating expenses) $133 $115
Reimbursement for services of affiliates and investor
service fees (included in general and administrative
expenses and investment properties) 95 68
During the three months ended March 31, 2000 and 1999, affiliates of NHP were
entitled to receive 4% of gross receipts from the Partnership's investment
property for providing property management services. The Partnership paid to
such affiliates approximately $133,000 and $115,000 for the three months ended
March 31, 2000 and 1999, respectively.
An affiliate of NHP received reimbursements of accountable administrative
expenses amounting to approximately $95,000 and $68,000 for the three months
ended March 31, 2000 and 1999, respectively.
AIMCO and its affiliates currently own 288.237 limited partnership units in the
Partnership representing approximately 50.92% of the outstanding units. A number
of these units were acquired pursuant to tender offers made by AIMCO or its or
the General Partner's affiliates. It is possible that AIMCO or its affiliates
will make one or more additional offers to acquire additional limited
partnership interests in the Partnership for cash or in exchange for units in
the operating partnership of AIMCO. Under the Partnership Agreement, unitholders
holding a majority of the Units are entitled to take action with respect to a
variety of matters. As a result of its ownership of approximately 50.92% of the
outstanding units, AIMCO is in a position to influence all voting decisions with
respect to the Registrant. When voting on matters, AIMCO would in all likelihood
vote the Units it acquired in a manner favorable to the interest of the General
Partner because of their affiliation with the General Partner.
Note D - Distributions
During the three months ended March 31, 2000 the Partnership declared a
distribution from operations of approximately $790,000 (approximately $766,000
to the limited partners or $1,353.36 per limited partnership unit). The
distribution was accrued at March 31, 2000 and paid subsequent to March 31,
2000. No distributions were declared or paid during the three months ended March
31, 1999.
Note E - Segment Reporting
Description of the types of products and services from which the reportable
segment derives its revenues: The Partnership has one reportable segment:
residential properties. The Partnership's residential property segment consists
of one apartment complex located in Fairfax County, Virginia. The Partnership
rents apartment units to tenants for terms that are typically twelve months or
less.
Measurement of segment profit or loss: The Partnership evaluates performance
based on segment profit (loss) before depreciation. The accounting policies of
the reportable segment are the same as those of the Partnership as described in
the Partnership's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1999.
Segment information for the three months ended March 31, 2000 and 1999, is shown
in the following tables. The "Other" column includes partnership administration
related items and income and expense not allocated to the reportable segment.
2000 Residential Other Totals
(in thousands)
Rental income $ 2,952 $ -- $ 2,952
Other income 379 -- 379
Interest expense 1,099 -- 1,099
Depreciation 786 -- 786
General and administrative expense -- 83 83
Segment profit (loss) 46 (83) (37)
Total assets 41,195 2,070 43,265
Capital expenditures for investment
property 233 -- 233
1999 Residential Other Totals
(in thousands)
Rental income $ 2,654 $ -- $ 2,654
Other income 226 -- 226
Interest expense 1,017 -- 1,017
Depreciation 687 -- 687
General and administrative expense -- 79 79
Segment loss (65) (79) (144)
Total assets 41,813 2,021 43,834
Capital expenditures for investment
property 200 -- 200
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Partnership from time to time.
The discussion of the Partnership's business and results of operations,
including forward-looking statements pertaining to such matters, does not take
into account the effects of any changes to the Partnership's business and
results of operations. Accordingly, actual results could differ materially from
those projected in the forward-looking statements as a result of a number of
factors, including those identified herein.
The Partnership's sole asset is a 1,222 unit apartment complex known as
Riverside Park located in Fairfax County, Virginia. The property is leased to
tenants subject to leases of up to one year. Average occupancy for the first
three months of 2000 was 99% compared to 96% for the corresponding period in
1999. Occupancy increased primarily due to a more aggressive marketing program
and a stronger local economy.
Results of Operations
The Partnership's net loss for the three months ended March 31, 2000 totaled
approximately $37,000 as compared to a net loss of approximately $144,000 for
the corresponding period of 1999. The decrease in net loss for the three months
ended March 31, 2000 is primarily attributable to an increase in total revenues,
partially offset by an increase in total expenses. Total revenues increased
primarily due to an increases in rental income and other income. The increase in
rental income is primarily the result of an increase in occupancy and average
rental rates at the property. Other income increased primarily due to an
increase in corporate housing income, utility income and interest income,
partially offset by a decrease in laundry income.
The increase in total expenses is primarily due to an increase in operating,
depreciation, and interest expenses. The increase in operating expense is due to
an increase in employee bonuses, increased advertising expense and increased
insurance expense, partially offset by reduced business license expense due to
the timing of the receipt of the bill. The increase in depreciation expense is
primarily attributable to fixed assets placed in service during the last twelve
months. The increase in interest expense is due to an increase in the variable
interest rate charged during the three months ended March 31, 2000.
Included in general and administrative expense for the three months ended March
31, 2000 and 1999 are reimbursements to the associate general partner allowed
under the Partnership Agreement associated with its management of the
Partnership. In addition, costs associated with the quarterly and annual
communications with investors and regulatory agencies and the annual audit
required by the Partnership Agreement are also included.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of its investment property to assess the
feasibility of increasing rents, maintaining or increasing occupancy levels and
protecting the Partnership from increases in expenses. As part of this plan, the
General Partner attempts to protect the Partnership from the burden of
inflation-related increases in expenses by increasing rents and maintaining a
high overall occupancy level. However, due to changing market conditions, which
can result in the use of rental concessions and rental reductions to offset
softening market conditions, there is no guarantee that the General Partner will
be able to sustain such a plan.
Liquidity and Capital Resources
At March 31, 2000, the Partnership held cash and cash equivalents of
approximately $3,154,000 compared to approximately $2,612,000 at March 31, 1999.
The net increase in cash and cash equivalents of approximately $150,000 from the
Partnership's year ended December 31, 1999, is due to approximately $665,000 of
net cash provided by operating activities, partially offset by approximately
$324,000 of net cash used in investing activities and approximately $191,000 of
net cash used in financing activities. Cash used in investing activities
consisted of property improvements and replacements and net deposits to the
escrow accounts maintained by mortgage lender. Cash used in financing activities
consisted of payments made on the mortgage encumbering the Partnership's
investment property. The Partnership invests its working capital reserves in a
money market account.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership and to comply with Federal, state
and local legal and regulatory requirements. Capital improvements planned for
the Partnership's investment property are as follows.
During the three months ended March 31, 2000, the Partnership expended
approximately $233,000 for capital improvements and replacements at its
investment property, consisting primarily of structural improvements, appliance
replacements, carpet and vinyl replacements, air conditioning upgrades, and
major landscaping. These improvements were funded from operating cash flow. The
Partnership has budgeted, but is not limited to, capital improvements of
approximately $3,587,000 for 2000 at the property which consist of structural
improvements, interior decoration improvements, exterior building painting,
parking lot improvements, carpet and vinyl replacements, air conditioning
upgrades, and ground lighting improvements.
The additional capital expenditures will be incurred only if cash is available
from operations or from Partnership reserves. To the extent that such capital
improvements are completed, the Partnership's distributable cash flow, if any,
may be adversely affected at least in the short term.
The Partnership's assets are currently thought to be sufficient for any
near-term needs (exclusive of capital improvements) of the Partnership. The
mortgage indebtedness of approximately $44,632,000 is being amortized over 25
years with a balloon payment of approximately $43,664,000 due at maturity in
September 2001. The General Partner will attempt to refinance and/or sell the
property prior to such maturity date. If the property cannot be refinanced or
sold for a sufficient amount, the Partnership will risk losing such property
through foreclosure.
During the three months ended March 31, 2000 the Partnership declared a
distribution from operations of approximately $790,000 (approximately $766,000
to the limited partners or $1,353.36 per limited partnership unit. The
distribution was accrued at March 31, 2000 and paid subsequent to March 31,
2000. No distributions were declared or paid during the three months ended March
31, 1999. The Partnership's distribution policy is reviewed on an annual basis.
Future cash distributions will depend on the levels of net cash generated from
operations, the availability of cash reserves, and timing of the debt maturity,
refinancing and/or sale of the property. There can be no assurance, however,
that the Partnership will generate sufficient funds from operations after
required capital expenditures to permit distributions to its partners during the
remainder of 2000 or subsequent periods.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K:
None filed during the quarter ended March 31, 2000.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
By: WINTHROP FINANCIAL ASSOCIATES,
A LIMITED PARTNERSHIP
General Partner
By: NHP Management Company,
Associate General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President and
Controller
Date: May 15, 2000