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, 2002
[ ] 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, 2002
Assets
Cash and cash equivalents $ 268
Receivables and deposits 212
Other assets 1,008
Investment property:
Land $ 6,357
Buildings and related personal property 76,286
82,643
Less accumulated depreciation (44,287) 38,356
$ 39,844
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 537
Tenant security deposit liabilities 267
Accrued property taxes 211
Other liabilities 638
Due to affiliates 182
Mortgage note payable 49,076
Partners' Deficit:
General partner $ (1,364)
Limited partners (566 units issued and outstanding) (9,703) (11,067)
$ 39,844
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,
2002 2001
Revenues:
Rental income $ 3,245 $ 3,238
Other income 488 653
Total revenues 3,733 3,891
Expenses:
Operating 1,175 1,504
General and administrative 130 150
Depreciation 877 786
Interest 952 974
Property taxes 211 261
Total expenses 3,345 3,675
Net income $ 388 $ 216
Net income allocated to general partner (3%) $ 12 $ 6
Net income allocated to limited partners (97%) 376 210
$ 388 $ 216
Net income per limited partnership unit $ 664.31 $ 371.02
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, 2001 566 $(1,376) $(10,079) $(11,455)
Net income for the three months
ended March 31, 2002 -- 12 376 388
Partners' deficit
at March 31, 2002 566 $(1,364) $ (9,703) $(11,067)
See Accompanying Notes to Financial Statements
d)
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
2002 2001
Cash flows from operating activities:
Net income $ 388 $ 216
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 877 786
Amortization of loan costs 10 10
Change in accounts:
Receivables and deposits (70) (221)
Other assets (187) (50)
Due to affiliates 120 --
Accounts payable 33 (7)
Tenant security deposit liabilities (27) 38
Accrued property taxes 211 261
Other liabilities 39 (27)
Net cash provided by operating activities 1,394 1,006
Cash flows used in investing activities:
Property improvements and replacements (1,071) (833)
Cash flows from financing activities:
Payments on mortgage note payable (304) (282)
Distributions to partners -- (2,080)
Net cash used in financing activities (304) (2,362)
Net increase (decrease) in cash and cash equivalents 19 (2,189)
Cash and cash equivalents at beginning of period 249 2,988
Cash and cash equivalents at end of period $ 268 $ 799
Supplemental disclosure of cash flow information:
Cash paid for interest $ 941 $ 965
At March 31, 2002 and December 31, 2001, property improvements and replacements
and accounts payable were adjusted by approximately $299,000 and $1,078,000,
respectively, for non-cash activity.
Distributions of approximately $2,080,000 were accrued at December 31, 2000 and
paid during the first quarter of 2001.
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. The general partner of the Partnership is Winthrop
Financial Associates, A Limited Partnership (the "General Partner" or "WFA").
NHP Management Company ("NHP"), the associate general partner of the General
Partner and an affiliate of Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust, has the right to
cause the General Partner to take such action as it deems advisable with respect
to the Partnership. In the opinion of the General Partner, 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, 2002 are not necessarily indicative of the results that may be
expected for the fiscal year ending December 31, 2002. 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, 2001.
Certain reclassifications have been made to the 2001 balances to conform to the
2002 presentation.
Note B - 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.
During the three months ended March 31, 2002 and 2001, 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 $140,000 and $150,000 for the three months ended
March 31, 2002 and 2001, respectively, which are included in operating expenses.
Affiliates of NHP were eligible to receive reimbursement of accountable
administrative expenses amounting to approximately $365,000 and $316,000 for the
three months ended March 31, 2002 and 2001, respectively, which are included in
general and administrative expenses, investment properties, and due to
affiliates. Included in these amounts are fees related to construction
management services provided by an affiliate of NHP of approximately $245,000
and $178,000 for the three months ended March 31, 2002 and 2001, respectively.
The construction management service fees are calculated based on a percentage of
current additions to investment property. At March 31, 2002 approximately
$182,000 was owed to affiliates for unpaid reimbursements.
Beginning in 2001, the Partnership began insuring its property up to certain
limits through coverage provided by AIMCO which is generally self-insured for a
portion of losses and liabilities related to workers compensation, property
casualty and vehicle liability. The Partnership insures its property above the
AIMCO limits through insurance policies obtained by AIMCO from insurers
unaffiliated with the General Partner. During the three months ended March 31,
2002 and 2001, the Partnership was charged by AIMCO and its affiliates
approximately $138,000 and $127,000, respectively, for insurance coverage and
fees associated with policy claims administration.
Note C - Contingencies
The Partnership is unaware of any pending or outstanding litigation that is not
of a routine nature arising in the ordinary course of business.
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 operation. 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 1,229 unit apartment complex known as
Riverside Park Apartments located in Fairfax County, Virginia. Average occupancy
for both the three months ended March 31, 2002 and 2001 was 96%.
Results of Operations
The Partnership's net income for the three months ended March 31, 2002 was
approximately $388,000 as compared to net income of approximately $216,000 for
the three months ended March 31, 2001. The increase in net income is
attributable to a decrease in total expenses partially offset by a decrease in
total revenues. Total expenses decreased primarily due to decreases in operating
expense, interest expense, property tax expense and general and administrative
expense, partially offset by an increase in depreciation expense. The decrease
in operating expense is primarily due to decreases in corporate housing
expenses, which are no longer being offered at the property, maintenance
expense, advertising expense as a result of decreased referral fees, and payroll
related expenses. The decrease in operating expense was partially offset by an
increase in insurance expense as a result of increased premiums. The decrease in
interest expense is due to scheduled principal payments resulting in a lower
carrying balance of the mortgage encumbering the property. Property tax expense
decreased due to the timing and receipt of property tax bills which affected the
Partnership's property tax accrual in the prior year. General and administrative
expenses decreased due to a decrease in management reimbursements to NHP and its
affiliates as allowed under the Partnership Agreement. 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. The increase in depreciation expense is due to property
improvements and replacements placed into service during the past twelve months.
Total revenues decreased due to a decrease in other income. The decrease in
other income is primarily due to a decrease in corporate housing income, which
is no longer offered at the property, and a decrease in interest income due to
lower cash balances maintained in interest bearing accounts, partially offset by
an increase in utility reimbursements. Rental income remained relatively
constant for the comparable periods.
As part of the ongoing business plan of the Partnership, NHP 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, NHP 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 NHP will be able to sustain such a plan.
Liquidity and Capital Resources
At March 31, 2002, the Partnership had cash and cash equivalents of
approximately $268,000 compared to approximately $799,000 at March 31, 2001. The
increase in cash and cash equivalents of approximately $19,000, from the
Partnership's year ended December 31, 2001, is due to approximately $1,394,000
of cash provided by operating activities, offset by approximately $1,071,000 of
cash used in investing activities and approximately $304,000 of cash used in
financing activities. Cash used in financing activities consisted of payments of
principal made on the mortgage encumbering the Partnership's investment
property. Cash used in investing activities consisted of property improvements
and replacements. The Partnership invests its working capital reserves in
interest bearing accounts.
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.
The Partnership has budgeted, but is not limited to, approximately $1,484,000 of
capital improvements at the property for 2002 which consist primarily of
structural improvements, interior improvements, garage and carport upgrades and
heating upgrades. As of March 31, 2002, the Partnership expended approximately
$292,000 for capital improvements at its investment property consisting
primarily of interior improvements, major landscaping, cabinet upgrades, and
floor covering replacement. These improvements were funded from operations.
Additional improvements may be considered and will depend on the physical
condition of the property as well as anticipated cash flow generated by the
property.
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 current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of approximately $49,076,000 is being amortized over 240 months
until the loan matures on July 1, 2020 at which time the loan will be fully
amortized.
During the three months ended March 31, 2001, the Partnership paid distributions
of approximately $2,080,000, which was related to a payable at December 31,
2000. There were no distributions declared or paid during the three months ended
March 31, 2002. The Partnership's cash available for distribution is reviewed on
a monthly basis. Future cash distributions will depend on the levels of net cash
generated from operations, the availability of cash reserves, and the timing of
the debt maturity, refinancing and/or property sale. 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 2002 or subsequent periods.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates owned 381.19 limited partnership units in
the Partnership representing 67.35% of the outstanding units at March 31, 2002.
A number of these units were acquired pursuant to tender offers made by AIMCO or
its affiliates. It is possible that AIMCO or its affiliates will acquire
additional limited partnership interests in the Partnership for cash or in
exchange for units in the operating partnership of AIMCO either through private
purchases or tender offers. Under the Partnership Agreement, unitholders holding
a majority of the units are entitled to take action with respect to a variety of
matters, which would include voting on certain amendments to the Partnership
Agreement and voting to remove the General Partner. As a result of its ownership
of 67.35% of the outstanding units, AIMCO is in a position to control all such
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 its affiliation with the General
Partner.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
None.
b) Reports on Form 8-K:
None filed during the quarter ended March 31, 2002.
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 14, 2002