UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 May 31, 2003
OR
- ------ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-12634
CAMBRIDGE + RELATED HOUSING
PROPERTIES LIMITED PARTNERSHIP
------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 13-3161322
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)421-5333
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
------ ------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes No X
------ ------
PART I - Financial Information
Item 1. Financial Statements
CAMBRIDGE + RELATED HOUSING PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
============ =============
May 31, February 28,
2003 2003
------------ -------------
ASSETS
Property and equipment-held for
sale, net of accumulated
depreciation of $4,144,839
and $5,868,186, respectively $ 3,845,522 $ 5,029,926
Cash and cash equivalents 871,067 851,768
Cash - restricted for tenants'
security deposits 602 11,457
Mortgage escrow deposits 222,058 1,207,847
Rents receivable 4,360 8,372
Prepaid expenses and other assets 414,250 334,407
------------ ------------
Total assets $ 5,357,859 $ 7,443,777
============ ============
2
CAMBRIDGE + RELATED HOUSING PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(continued)
============ =============
May 31, February 28,
2003 2003
------------ -------------
LIABILITIES AND PARTNERS' DEFICIT
Liabilities:
Mortgage notes payable $ 2,229,535 $ 2,953,940
Purchase Money Notes payable
(Note 2) 1,465,667 2,408,117
Due to selling partners (Note 2) 2,198,275 3,685,011
Accounts payable, accrued
expenses and other liabilities 189,795 374,298
Tenants' security deposits payable 602 11,457
Due to general partners of
subsidiaries and their affiliates 33,423 33,423
Due to general partners and
affiliates 2,814,927 2,685,431
------------ ------------
Total liabilities 8,932,224 12,151,677
------------ ------------
Minority interest (120,386) (91,601)
------------ ------------
Commitments and contingencies
Partners' deficit:
Limited partners (2,970,912) (4,121,609)
General partners (483,067) (494,690)
------------ ------------
Total partners' deficit (3,453,979) (4,616,299)
------------ ------------
Total liabilities and partners' deficit $ 5,357,859 $ 7,443,777
============ ============
See Accompanying Notes to Consolidated Financial Statements.
3
CAMBRIDGE + RELATED HOUSING PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
==========================
Three Months Ended
May 31,
--------------------------
2003 2002*
--------------------------
Revenues:
Rentals, net $ 529,730 $ 2,505,909
Other 12,370 61,929
Gain on sale of properties (Note 4) 1,369,607 661,280
----------- ------------
Total revenues 1,911,707 3,229,118
----------- ------------
Expenses
Administrative and management 141,319 722,033
Administrative and management-
related parties (Note 3) 313,599 313,214
Operating 148,620 510,717
Repairs and maintenance 111,083 515,151
Taxes and insurance 75,945 296,895
Interest 34,457 437,232
Depreciation 0 105,658
----------- ------------
Total expenses 825,023 2,900,900
----------- ------------
Income before minority interest and
extraordinary item 1,086,684 328,218
Minority interest in loss of subsidiaries 28,783 125,715
----------- ------------
Income before extraordinary item 1,115,467 453,933
----------- ------------
Extraordinary item-forgiveness
of indebtedness income
(Note 4) 46,853 2,427,492
----------- ------------
Net income $ 1,162,320 $ 2,881,425
=========== ============
* As restated - see Note 5
See Accompanying Notes to Consolidated Financial Statements.
4
CAMBRIDGE + RELATED HOUSING PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
(continued)
==========================
Three Months Ended
May 31,
--------------------------
2003 2002*
--------------------------
Income before extraordinary item -
limited partners $ 1,104,312 $ 449,394
Extraordinary item - limited partners 46,385 2,403,217
----------- ------------
Net income - limited partners $ 1,150,697 $ 2,852,611
=========== ============
Number of limited Partnership
units outstanding 10,038 10,038
=========== ============
Income before extraordinary item
per limited partnership unit $ 110.01 $ 44.77
Extraordinary item per limited
partnership unit 4.62 239.41
----------- ------------
Net income per limited partnership
unit $ 114.63 $ 284.18
=========== ============
* As restated - see Note 5
See Accompanying Notes to Consolidated Financial Statements.
5
CAMBRIDGE + RELATED HOUSING PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statement of Partners' Deficit
(Unaudited)
=============================================
Limited General
Total Partners Partners
---------------------------------------------
Balance - March 1, 2003 $(4,616,299) $(4,121,609) $ (494,690)
Net income - three
months ended
May 31, 2003 1,162,320 1,150,697 11,623
----------- ----------- -----------
Balance-May 31, 2003 $(3,453,979) $(2,970,912) $ (483,067)
=========== =========== ===========
See Accompanying Notes to Consolidated Financial Statements.
6
CAMBRIDGE + RELATED HOUSING PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statement of Cash Flows
Increase (decrease) in Cash and Cash Equivalents
(Unaudited)
==========================
Three Months Ended
May 31,
--------------------------
2003 2002*
--------------------------
Cash flows from operating activities:
Net income $ 1,162,320 $ 2,881,425
----------- ------------
Adjustments to reconcile net income
to net cash (used in) provided by
operating activities:
Gain on sale of properties (Note 4) (1,369,607) (661,280)
Extraordinary item - forgiveness
of indebtedness income (Note 4) (46,853) (2,427,492)
Depreciation 0 105,658
Minority interest in loss of subsidiaries (28,783) (125,715)
Increase in cash-restricted
for tenants' security deposits (427) (14,694)
Decrease in mortgage escrow deposits 246,209 273,287
Decrease in rents receivable 4,012 148,854
(Increase) decrease in prepaid expenses
and other assets (98,192) 339,866
Increase in due to selling partners 33,667 328,159
Decrease in accounts payable, accrued
expenses and other liabilities (139,867) (925,192)
Increase (decrease) in tenants' security
deposits payable 427 (897)
Increase in due to general partners
of subsidiaries and their affiliates 0 2,500
Increase in due to general partners
and affiliates 129,496 247,395
----------- ------------
Total adjustments (1,269,918) (2,709,551)
----------- ------------
Net cash (used in) provided by
operating activities (107,598) 171,874
----------- ------------
7
CAMBRIDGE + RELATED HOUSING PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statement of Cash Flows
Increase (decrease) in Cash and Cash Equivalents
(Unaudited)
(continued)
==========================
Three Months Ended
May 31,
--------------------------
2003 2002*
--------------------------
Cash flows from investing activities:
Proceeds from sale of properties 2,722,041 596,872
Acquisitions of property and
equipment (23,537) (20,615)
Increase in mortgage escrow deposits (101,865) (166,799)
----------- ------------
Net cash provided by investing
activities 2,596,639 409,458
----------- ------------
Cash flows from financing activities:
Principal payments of mortgage
notes payable (53,740) (186,509)
Decrease in minority interest (2) (365)
Principal payments of purchase money
notes payable (942,450) (340,000)
Payments to selling partners (1,473,550) (56,420)
----------- ------------
Net cash used in financing activities (2,469,742) (583,294)
----------- ------------
Net increase (decrease) in cash and
cash equivalents 19,299 (1,962)
Cash and cash equivalents at
beginning of period 851,768 780,650
----------- ------------
Cash and cash equivalents at
end of period $ 871,067 $ 778,688
=========== ============
8
CAMBRIDGE + RELATED HOUSING PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statement of Cash Flows
Increase (decrease) in Cash and Cash Equivalents
(Unaudited)
(continued)
==========================
Three Months Ended
May 31,
--------------------------
2003 2002*
--------------------------
Supplemental disclosures of
noncash activities:
Forgiveness of indebtedness
Decrease in purchase money
notes payable $ 0 $ (720,000)
Decrease in due to selling partners (46,853) (1,685,795)
Decrease in accounts payable,
accrued expenses and other liabilities 0 (21,697)
Summarized below are the components
of the gain on sale of properties:
Decrease in property and
equipment held for sale, net
of accumulated depreciation $ 1,207,941 $ 3,356,895
Decrease in cash-restricted for
tenants' security deposits 11,282 28,212
Decrease in mortgage escrow deposits 841,445 82,044
Decrease in prepaid expenses and
other assets 18,349 296,169
Decrease in accounts payable,
accrued expenses and other liabilities (44,636) (143,051)
Decrease in tenants' security deposits
payable (11,282) (12,622)
Decrease in due to selling partners 0 (764,540)
Decrease in purchase money notes
payable 0 (455,800)
Decrease in mortgage notes payable (670,665) (2,434,990)
Decrease in due to general partner
and their affiliates 0 (16,726)
* As restated - see Note 5
See Accompanying Notes to Consolidated Financial Statements.
9
CAMBRIDGE + RELATED HOUSING PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
May 31, 2003
(Unaudited)
Note 1 - General
The consolidated financial statements for the three months ended May 31, 2003
and 2002, include the accounts of Cambridge + Related Housing Properties Limited
Partnership, a Massachusetts limited partnership (the "Partnership"), and two
and twelve Subsidiary Partnerships ("Subsidiaries", "Subsidiary Partnerships" or
"Local Partnerships"), respectively. The Partnership is a limited partner, with
an ownership interest of 98.99% in each of the Subsidiary Partnerships. Through
the rights of the Partnership and/or one of its general partners (a "General
Partner"), which General Partner has a contractual obligation to act on behalf
of the Partnership, the right to remove the local general partner of the
Subsidiary Partnerships and to approve certain major operating and financial
decisions, the Partnership has a controlling financial interest in the
Subsidiary Partnerships.
For financial reporting purposes, the Partnership's fiscal quarter ends on May
31. All Subsidiaries have fiscal quarters ending March 31. Accounts of
Subsidiaries have been adjusted for intercompany transactions from April 1
through May 31. The Partnership's fiscal quarter ends on May 31 in order to
allow adequate time for the Subsidiaries' financial statements to be prepared
and consolidated. The books and records of the Partnership are maintained on the
accrual basis of accounting, in accordance with generally accepted accounting
principles ("GAAP").
All intercompany accounts and transactions have been eliminated in
consolidation.
Increases (decreases) in the capitalization of consolidated Subsidiaries
attributable to minority interest arise from cash contributions from and cash
distributions to the minority interest partners.
Losses attributable to minority interests which exceed the minority interests'
investment in a Subsidiary have been charged to the Partnership. Such losses
aggregated approximately $0 for the three months ended May 31, 2003 and 2002,
respectively. The Partnership's investment in each Subsidiary is equal to the
respective Subsidiary's partners' equity less minority interest capital, if any.
10
CAMBRIDGE + RELATED HOUSING PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
May 31, 2003
(Unaudited)
These unaudited financial statements have been prepared on the same basis as the
audited financial statements included in the Partnership's Form 10-K for the
year ended February 28, 2003. In the opinion of the General Partners, the
accompanying unaudited financial statements contain all adjustments (consisting
only of normal recurring adjustments) necessary to present fairly the financial
position of the Partnership as of May 31, 2003 and the results of operations and
cash flows for the three months ended May 31, 2003 and 2002. However, the
operating results for the three months ended May 31, 2003 may not be indicative
of the results for the year.
Certain information and note disclosures normally included in financial
statements prepared in accordance with GAAP have been omitted. It is suggested
that these consolidated financial statements should be read in conjunction with
the financial statements and notes thereto included in the Partnership's
February 28, 2003 Annual Report on Form 10-K.
Note 2 - Purchase Money Notes Payable
Nonrecourse Purchase Money Notes (the "Purchase Money Notes") were issued to the
selling partners of the Subsidiary Partnerships as part of the purchase price,
and are secured only by the Partnership's interest in the Subsidiary Partnership
to which the Purchase Money Note relates. As of May 31, 2003 only one Subsidiary
Partnership's Purchase Money Note remains outstanding.
11
CAMBRIDGE + RELATED HOUSING PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
May 31, 2003
(Unaudited)
Note 3 - Related Party Transactions
The costs incurred to related parties for the three months ended May 31, 2003
and 2002 were as follows:
==========================
Three Months Ended
May 31,
--------------------------
2003 2002
--------------------------
Partnership management
fees (a) $ 241,710 $ 242,778
Expense reimbursement (b) 32,161 36,009
Local administrative fee (d) 625 3,125
----------- ----------
Total general and admini-
strative-General Partners 274,496 281,912
----------- ----------
Property management fees
incurred to affiliates of the
Subsidiary Partnerships'
general partners (c) 39,103 31,302
----------- ----------
Total general and
administrative-related
parties $ 313,599 $ 313,214
=========== ==========
(a) After all other expenses of the Partnership are paid, an annual Partnership
management fee of up to .5% of invested assets is payable to the Partnership's
General Partners and affiliates. Partnership management fees owed to the General
Partners amounting to approximately $2,218,000 and $1,976,000 were accrued and
unpaid as of May 31, 2003 and February 28, 2003, respectively. The General
Partners' fees are being paid currently, other than the Partnership management
fees that were accrued and continue to be deferred.
(b) The Partnership reimburses the General Partners and their affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partners performs asset monitoring for the Partnership.
These services include site visits and evaluations of the Subsidiary
Partnerships' performance.
12
CAMBRIDGE + RELATED HOUSING PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
May 31, 2003
(Unaudited)
(c) Property management fees incurred by Local Partnerships to affiliates of the
Local Partnerships amounted to $39,103 and $31,302 for the three months ended
May 31, 2003 and 2002, respectively.
(d) Cambridge/Related Housing Associates Limited Partnership, the special
limited partner of each of the Subsidiary Partnerships, owning .01%, is entitled
to receive a local administrative fee of up to $2,500 per year from each
Subsidiary Partnership.
Note 4 - Sale of Properties
General
- -------
The Partnership is currently in the process of winding up its operations and
disposing of its investments. As of May 31, 2003, the Partnership has disposed
of forty-three of its forty-four original investments.
On March 11, 2003, the property and the related assets and liabilities of El
Paso-Gateway East, Ltd. ("Gateway") were sold to an unaffiliated third party for
approximately $2,677,000 resulting in a gain in the amount of approximately
$1,370,000. The Partnership used approximately $2,416,000 to settle the
associated Purchase Money Note and accrued interest thereon, which had a total
outstanding balance of approximately $2,463,000, resulting in forgiveness of
indebtedness income of approximately $47,000.
On March 27, 2002, the property and the related assets and liabilities of
Ziegler Boulevard, Ltd. ("Ziegler") were sold to an unaffiliated third party
purchaser for approximately $2,379,000 resulting in a loss in the amount of
approximately $485,000. The Partnership used approximately $340,000 to settle
the associated Purchase Money Note and accrued interest thereon, which had a
total outstanding balance of approximately $2,746,000 resulting in forgiveness
of indebtedness income of approximately $2,406,000.
On March 27, 2002, the Partnership's limited partnership interest in Eastwyck
III, Ltd. Limited Partnership ("Eastwyck") was sold to the Local General
Partners for approximately $5,000 resulting in a loss of approximately $336,000.
No proceeds were used to settle the associated Purchase Money Note and accrued
13
CAMBRIDGE + RELATED HOUSING PROPERTIES
LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
May 31, 2003
(Unaudited)
interest thereon, which had a total outstanding balance of approximately
$1,220,000 resulting in a gain on sale of approximately $1,220,000.
On December 18, 2001, Bay Village Company ("Bay Village") entered into a
purchase and sale agreement to sell the property and the related assets and
liabilities to an affiliate of the Local General Partner for a purchase price of
$6,075,000. The closing is expected to occur in July 2003. No assurances can be
given that the sale will actually occur.
Note 5 - Prior Period Adjustment
During the quarter ended November 30, 2001, extension fees in connection with
the Purchase Money Notes were overaccrued by $671,850. Such extension fees were
capitalized and amortized over the period of extension, and during the fiscal
year end February 28, 2002 the Partnership amortized $335,925 of such extension
fees resulting in net income being understated for that year. To correct the
misstatement, Partners' deficit has been increased by $167,963 and $335,925 for
the three months ended May 31, 2002 and the year ended February 28, 2002,
respectively.
14
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
- -------------------------------
The Partnership's primary sources of funds are (i) cash distributions from
operations (ii) cash distributions from sales of the Local Partnerships in which
the Partnership has invested, (iii) interest earned on funds and (iv) cash in
working capital reserves. None of these sources of funds are significant
although all of them are available to meet the obligations of the Partnership.
During the three months ended May 31, 2003 and 2002, the Partnership received
cash flow distributions aggregating $12,831 and $94,026, respectively, of which
$0 and $56,419, respectively, was used to pay interest on the Purchase Money
Notes. In addition, the Partnership received distributions of proceeds from the
sales of Local Partnerships aggregating $2,745,666 and $591,871, of which
$2,416,000 and $340,000 was used to pay principal and interest on the Purchase
Money Notes during the three months ended May 31, 2003 and 2002, respectively.
During the three months ended May 31, 2003, cash and cash equivalents of the
Partnership and its consolidated Local Partnerships increased approximately
($19,000). This increase was due to proceeds from sale of properties
($2,722,000) which exceeded cash used in operations ($108,000), principal
payments of mortgage notes payable of ($54,000), an increase in mortgage escrow
deposits relating to investing activities ($102,000), payments to selling
partners ($1,474,000), acquisitions of property and equipment ($24,000) and
principal payments of Purchase Money Notes payable ($942,000). Included in the
adjustments to reconcile the net income to cash used in operating activities is
gain on sale of properties ($1,370,000) and forgiveness of indebtedness income
($47,000).
The Partnership has a working capital reserve of approximately $788,000 at May
31, 2003. The working capital reserve is temporarily invested in money market
accounts which can be easily liquidated to meet obligations as they arise. The
General Partners believe that the Partnership's reserves and net proceeds from
future sales will be adequate for its operating needs, and plan to continue
investing available reserves in short term investments.
Partnership management fees owed to the General Partners amounting to
approximately $2,218,000 and $1,976,000 were accrued and unpaid as of May 31,
15
2003 and February 28, 2003, respectively. The General Partners' fees are being
paid currently, other than the Partnership management fees that were accrued and
continue to be deferred.
For a discussion of Purchase Money Notes payable see Note 2 to the financial
statements.
For a discussion of the Partnership's sale of properties see Note 4 to the
financial statements.
Management is not aware of any trends or events, commitments or uncertainties
which have not otherwise been disclosed that will or are likely to impact
liquidity in a material way. Management believes the only impact would be from
laws that have not yet been adopted. Due to the sale of properties, the
portfolio is not diversified by the location of the properties around the United
States, and therefore the Partnership may not be protected against a general
downturn in the national economy.
Critical Accounting Policies
- ----------------------------
In preparing the consolidated financial statements, management has made
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. Set forth below is a summary of the accounting policies
that management believes are critical to the preparation of the consolidated
financial statements. The summary should be read in conjunction with the more
complete discussion of the Company's accounting policies included in Note 2 to
the consolidated financial statements which are include in the Partnership's
annual report on Form 10-K for the year ended February 28, 2003.
a) Property and Equipment
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, and any other costs incurred
in acquiring the properties. The cost of property and equipment is depreciated
over their estimated useful lives using accelerated and straight-line methods.
Expenditures for repairs and maintenance are charged to expense as incurred;
major renewals and betterments are capitalized. At the time property and
equipment are retired or otherwise disposed of, the cost and accumulated
depreciation are eliminated from the assets and accumulated depreciation
16
accounts and the profit or loss on such disposition is reflected in earnings.
The Partnership complies with Statement of Financial Accounting Standards (SFAS)
No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets". A loss
on impairment of assets is recorded when management estimates amounts
recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.
b) Income Taxes
No provision has been made for income taxes in the accompanying consolidated
financial statements since such taxes, if any, are the responsibility of the
individual partners. For income tax purposes, the Partnership has a fiscal year
ending December 31.
New Accounting Pronouncements
- -----------------------------
In January 2003, the Financial Accounting Standards Board issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 is applicable immediately for variable interest entities created after
January 31, 2003. For variable interest entities created before February 1,
2003, the provisions of FIN 46 are applicable no later than July 1, 2003. The
Partnership has not identified any variable interest entities that were created
after January 31, 2003 and is currently evaluating the impact of the provisions
of FIN 46 on its consolidated financial statements.
Results of Operations
- ---------------------
During the periods ended May 31, 2003 and 2002, Wingate Associates Limited,
Zeigler Boulevard Ltd. and Logan Square Gardens Company sold their properties
and the related assets and liabilities and the Partnership's Limited Partnership
Interest in Blue Ridge Manor, Ltd., Chaparral Apartments II, Ltd., Lafayette
Square Apts., Ltd., Northwood Apartments, Ltd., Oso Bay Apartments, Ltd.,
Rolling Meadows of Ardmore, Ltd., Tarleton Arms Apartments, Ltd., Gateway East
Ltd., Villas South, Ltd. and Eastwyck III, Ltd., were sold (collectively the
"Sold Assets"). Excluding the Sold Assets, the results of operations of the
Partnership, as well as the Local Partnerships, remained fairly consistent
during the three months ended May 31, 2003 and 2002, other than other income,
17
administrative and management, repairs and maintenance and taxes and insurance.
The majority of Local Partnership income continues to be in the form of rental
income with the corresponding expenses being divided among operations and
mortgage interest. In addition, the Partnership incurred interest expense
relating to the Purchase Money Notes issued when the Local Partnership Interests
were acquired.
Rental income decreased approximately 79% for the three months ended May 31,
2003, as compared to 2002. Excluding the Sold Assets, rental income decreased
approximately 3% for the three months ended May 31, 2003 as compared to 2002,
primarily due to an increase in vacancies at the remaining Local Partnership.
Other income decreased approximately $50,000 for the three months ended May 31,
2003, as compared to 2002. Excluding the Sold Assets, other income increased
approximately $1,000 primarily due to larger cash and cash equivalents balances
earning interest at the Partnership level.
Administrative and management decreased approximately $581,000 for the three
months ended May 31, 2003, as compared to 2002. Excluding the Sold Assets,
administrative and management decreased approximately $27,000 primarily due to a
decrease in legal costs at the Partnership level.
Repairs and maintenance decreased approximately $404,000 for the three months
ended May 31, 2003, as compared to 2002. Excluding the Sold Assets, repairs and
maintenance increased approximately $23,000 primarily due to an increase in snow
removal expense due to severe winter weather at the remaining Local Partnership.
Taxes and insurance decreased approximately $221,000 for the three months ended
May 31, 2003, as compared to 2002. Excluding the Sold Assets, taxes and
insurance increased approximately $6,000 primarily due to an increase in
liability insurance premiums at the remaining Local Partnership.
Operating, interest and depreciation expense decreased approximately $362,000,
$403,000 and $106,000 for the three months ended May 31, 2003, as compared to
2002, primarily due to decreases relating to the Sold Assets. Bay Village was
not depreciated during the period ended May 31, 2003 because it is classified as
an asset held for sale.
18
Losses and gains on sales of properties and forgiveness of indebtedness income
will continue to fluctuate as a result of the disposition of properties (see
Note 4 to the financial statements).
Item 3. Quantitative and Qualitative Disclosures about Market Risk
None
Item 4. Controls and Procedures
The Principal Executive Officer and Principal Financial Officer of Government
Assisted Properties, Inc. and Related Housing Programs Corporation, each of
which is a general partner of Cambridge + Related Housing Properties L.P. (the
"Partnership"), has evaluated the Partnership's disclosure controls and
procedures relating to the Partnership's quarterly report on Form 10-Q for the
period ending May 31, 2003 as filed with the Securities and Exchange Commission
and has judged such controls and procedures to be effective as of May 31, 2003
(the "Evaluation Date").
There have been no significant changes in the internal controls or in other
factors that could significantly affect internal controls relating to the
Partnership since the Evaluation Date.
19
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities and Use of Proceeds - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders -
None
Item 5. Other information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
99.1 Certification Pursuant to 18 U.S.C. section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
quarter.
20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAMBRIDGE + RELATED HOUSING
PROPERTIES LIMITED PARTNERSHIP
(Registrant)
By: GOVERNMENT ASSISTED PROPERTIES,
INC., a General Partner
Date: July 7, 2003
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
President and Principal
Executive and Financial Officer
Date: July 7, 2003
By: /s/ Glenn F. Hopps
------------------
Glenn F. Hopps,
Treasurer and
Principal Accounting Officer
By: RELATED HOUSING PROGRAMS
CORPORATION, a General Partner
Date: July 7, 2003
By: /s/ Alan P. Hirmes
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Alan P. Hirmes,
President and Principal
Executive and Financial Officer
Date: July 7, 2003
By: /s/ Glenn F. Hopps
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Glenn F. Hopps,
Treasurer and
Principal Accounting Officer
CERTIFICATION
I, Alan P. Hirmes, Principal Executive Officer and Principal Financial Officer
of Government Assisted Properties, Inc. and Related Housing Programs Corporation
(the "General Partners"), each of which is a general partner of Cambridge +
Related Housing Properties L.P. (the "Partnership"), hereby certify that:
1. I have reviewed this quarterly report on Form 10-Q for the period
ending May 31, 2003 of the Partnership;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Partnership as of, and for, the periods presented in
this quarterly report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15-d-14)
for the Partnership and I have:
a) designed such disclosure controls and procedures to ensure the
material information relating to the Partnership, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this quarterly
report was being prepared;
b) evaluated the effectiveness of the Partnership's disclosure
controls and procedures as of May 31, 2003 (the "Evaluation Date");
and
c) presented in this quarterly report my conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the
Partnership's auditors and to the boards of directors of the General
Partners:
d) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Partnership's ability to
record, process, summarize and report financial data and have
identified for the Partnership's auditors any material weaknesses in
internal controls; and
e) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's
internal controls; and
6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
By: /s/ Alan P. Hirmes
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Alan P. Hirmes
Principal Executive Officer and
Principal Financial Officer
July 7, 2003
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Cambridge + Related Housing
Properties Limited Partnership (the "Partnership") on Form 10-Q for the period
ending May 31, 2003 as filed with the Securities and Exchange Commission on the
date hereof (the "Report"), I, Alan P. Hirmes, Principal Executive Officer and
Principal Financial Officer of Government Assisted Properties, Inc. and Related
Housing Programs Corporation, each of which is a general partner of the
Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
By: /s/Alan P. Hirmes
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Alan P. Hirmes
Principal Executive Officer and
Principal Financial Officer
July 7, 2003