<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
for the quarterly period ended June 30, 1996
( ) Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
__________________
Commission File Number 33-97014-01
FIRST INDUSTRIAL SECURITIES, L.P.
(Exact name of registrant as specified in its charter)
Delaware 36-4036965
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 N. Wacker Drive, Suite 150, Chicago, Illinois 60606
(Address of principal executive offices)
(312) 704-9000
(Registrant's telephone number, including area code)
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,
and (2) has been subject to such filing requirements for the past
90 days. Yes /X/ No .
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FIRST INDUSTRIAL SECURITIES, L.P.
Form 10-Q
For the Period Ended June 30, 1996
INDEX
Part I: FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Balance Sheets of First Industrial Securities,
L.P. as of June 30, 1996 and December 31,
1995............................................. 2
Statement of Operations of First Industrial
Securities, L.P. for the Six Months Ended June
30, 1996 and Combined Statement of Operations of
the Predecessor Businesses for the Six Months
Ended June 30, 1995.............................. 3
Statement of Operations of First Industrial
Securities, L.P. for the Three Months Ended June
30, 1996 and Combined Statement of Operations of
the Predecessor Businesses for the Three Months
Ended June 30, 1995.............................. 4
Statement of Cash Flows of First Industrial
Securities, L.P. for the Six Months Ended June
30, 1996 and Combined Statement of Cash Flows of
the Predecessor Businesses for the Six Months
Ended June 30, 1995.............................. 5
Notes to Financial Statements.................... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.... 7-8
Part II: OTHER INFORMATION
Item 1. Legal Proceedings........................ 9
Item 2. Changes in Securities.................... 9
Item 3. Defaults Upon Senior Securities.......... 9
Item 4. Submission of Matters to a Vote of
Security Holders......................... 9
Item 5. Other Information........................ 9
Item 6. Exhibits and Reports on Form 8-K......... 9
SIGNATURE........................................... 10
EXHIBIT INDEX....................................... 11
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FIRST INDUSTRIAL SECURITIES, L.P.
BALANCE SHEETS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
ASSETS
<S> <C> <C>
Assets:
Investment in Real Estate:
Land.............................. $ 11,626 $ 11,626
Buildings and Improvements........ 64,410 63,693
Less: Accumulated Depreciation.... (2,825) (1,981)
--------- ---------
Net Investment in Real Estate.. 73,211 73,338
Cash and Cash Equivalents......... 1,785 1,112
Restricted Cash................... 418 414
Tenant Accounts Receivable........ 161 163
Deferred Rent Receivable.......... 667 426
Prepaid Expenses and Other
Assets, Net...................... 322 425
--------- ---------
Total Assets................... 76,564 75,878
========= =========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts Payable and Accrued
Expenses........................... 589 677
Rents Received in Advance and
Security Deposits.................. 460 433
--------- ---------
Total Liabilities.............. 1,049 1,110
--------- ---------
Commitments and Contingencies......... --- ---
Partners' Capital:
Partners' Capital................... 75,515 74,768
--------- ---------
Total Liabilities and Partners'
Capital....................... $ 76,564 $ 75,878
========= =========
</TABLE>
The accompanying notes are an integral part of the financial
statements.
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FIRST INDUSTRIAL SECURITIES, L.P. STATEMENT OF OPERATIONS
AND PREDECESSOR BUSINESSES
COMBINED STATEMENT OF OPERATIONS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
First Industrial Predecessor
Securities, L.P. Businesses
--------------- --------------
Six Months Ended Six Months Ended
June 30, 1996 June 30, 1995
<S> <C> <C>
Revenues:
Rental Income....................... $ 4,396 $ 3,228
Tenant Recoveries and Other Income.. 1,351 894
---------- ----------
Total Revenues................... 5,747 4,122
---------- ----------
Expenses:
Real Estate Taxes................... 938 793
Repairs and Maintenance............. 220 95
Property Management................. 165 125
Utilities........................... 55 23
Insurance........................... 49 40
Other............................... 28 21
Interest Expense.................... --- 1,236
Depreciation and Amortization....... 878 692
---------- ----------
Total Expenses................... 2,333 3,025
---------- ----------
Net Income............................ $ 3,414 $ 1,097
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial
statements.
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<PAGE> 4
FIRST INDUSTRIAL SECURITIES, L.P. STATEMENT OF OPERATIONS
AND PREDECESSOR BUSINESSES
COMBINED STATEMENT OF OPERATIONS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
First Industrial Predecessor
Securities, L.P. Businesses
---------------- -------------
Three Months Three Months
Ended Ended
June 30, 1996 June 30, 1995
<S> <C> <C>
Revenues:
Rental Income....................... $ 2,308 $ 1,758
Tenant Recoveries and Other Income.. 697 437
------------ -----------
Total Revenues................... 3,005 2,195
------------ -----------
Expenses:
Real Estate Taxes................... 516 418
Repairs and Maintenance............. 101 58
Property Management................. 78 69
Utilities........................... 31 14
Insurance........................... 27 22
Other............................... 22 14
Interest Expense.................... --- 659
Depreciation and Amortization....... 439 368
------------ -----------
Total Expenses................... 1,214 1,622
------------ -----------
Net Income............................ $ 1,791 $ 573
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial
statements.
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<PAGE> 5
FIRST INDUSTRIAL SECURITIES, L.P. STATEMENT OF CASH FLOWS
AND PREDECESSOR BUSINESSES
COMBINED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
First Industrial Predecessor
Securities, L.P. Businesses
---------------- ------------
Six Months Ended Six Months Ended
June 30, 1996 June 30, 1995
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income........................... $ 3,414 $ 1,097
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Depreciation and Amortization...... 878 692
(Increase) Decrease in Tenant
Accounts Receivable, Deferred Rent
Receivable and Prepaid Expenses
and Other Assets................. (170) 35
(Decrease) Increase in Total
Liabilities...................... (61) 12
Increase in Restricted Cash........ (4) ---
----------- ---------
Net Cash Provided by Operating
Activities....................... 4,057 1,836
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of and Additions to
Investment in Real Estate........... (717) (22,057)
----------- ---------
Net Cash Used in Investing
Activities....................... (717) (22,057)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Acquisition Facility
Payable............................. --- 10,582
Capital Contributions............... --- 9,639
Dividends/Distributions............. (2,667) ---
----------- ---------
Net Cash (Used In) Provided by
Financing Activities............. (2,667) 20,221
----------- ---------
Net Increase in Cash and Cash Equivalents 673 ---
Cash and Cash Equivalents, Beginning of
Period............................... 1,112 ---
----------- ---------
Cash and Cash Equivalents, End of Period $ 1,785 $ ---
=========== =========
Supplemental Cash Flow Information:
Cash Paid for Interest.............. $ 0 $ 1,236
=========== =========
Interest Capitalized................ $ 0 $ 0
=========== =========
</TABLE>
The accompanying notes are an integral part of the financial
statements.
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FIRST INDUSTRIAL SECURITIES, L.P. AND PREDECESSOR BUSINESSES
NOTES TO FINANCIAL STATEMENTS
(Dollars in thousands)
1. ORGANIZATION
First Industrial Securities, L.P. (the "Company") is a Delaware limited
partnership formed on August 14, 1995, the 1% general partner of which is
First Industrial Securities Corporation ("Securities Corporation"), a
wholly owned subsidiary of First Industrial Realty Trust, Inc. ("FI"),
and the 99% limited partner of which is First Industrial, L.P. (the
"Operating Partnership"), of which FI is the sole general partner.
Securities Corporation also owns a preferred limited partnership interest
in the Company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying interim financial statements have been
prepared in accordance with the accounting policies described in
the financial statements and related notes included in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995. There are no significant differences between
the Company's interim and annual accounting policies.
In the opinion of management, all adjustments, consisting
only of normal recurring adjustments, necessary to present fairly
the financial position of the Company as of June 30, 1996 and the
results of operations and cash flows of the Company for the six
months and three months ended June 30, 1996 and the results of
operations and cash flows of the properties contributed to the
Company by affiliates for the six months and three months ended
June 30, 1995 have been included.
3. RELATED PARTY TRANSACTIONS
The 19 properties owned by the Company are managed by the
Operating Partnership. Management fees incurred are based on
3.25% of gross revenues. Such fees totaled $165 for the six
months ended June 30, 1996. At June 30, 1996 and December 31,
1995, $0 and $36 of accrued management fees were due to the
Operating Partnership.
4. DISTRIBUTIONS
On January 18, 1996, the Company paid a pro rata general and
limited partnership distribution to Securities Corporation and
the Operating Partnership, respectively, in the aggregate amount
of $707.
On March 26, 1996, the Company distributed $980 to
Securities Corporation in respect of its preferred limited
partnership interest in the Company, and Securities Corporation
paid a preferred stock dividend of $980 to FI, in each case, the
amount equal to the aggregate dividend payable on FI's Series A
Preferred Stock.
On June 24, 1996, the Company distributed $980 to Securities
Corporation in respect of its preferred limited partnership
interest in the Company, and Securities Corporation paid a
preferred stock dividend of $980 to FI, in each case, the amount
equal to the aggregate dividend payable on FI's Series A
Preferred Stock.
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<PAGE> 7
FIRST INDUSTRIAL SECURITIES, L.P. AND PREDECESSOR BUSINESSES
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion and analysis of First Industrial
Securities, L.P.'s (the "Company") financial condition and the
Company's and the Predecessor Businesses' results of operations
should be read in conjunction with the financial statements and
notes thereto appearing elsewhere in this Form 10-Q.
RESULTS OF OPERATIONS
- ---------------------
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1996 TO SIX MONTHS ENDED
JUNE 30, 1995
At June 30, 1996, the Company owned 19 properties with
approximately 2.1 million square feet, compared to 18 properties
with approximately 2.0 million square feet owned by the
Predecessor Businesses at June 30, 1995. The remaining build-to-
suit property containing approximately .1 million square feet was
completed in July 1995.
Total revenues increased by $1.6 million, or 39%, due
primarily to the properties acquired or developed after December
31, 1994.
Property expenses, which include real estate taxes, repairs
and maintenance, property management, utilities, insurance and
other expenses, increased by $.4 million, or 33%, due primarily
to the properties acquired or developed after December 31, 1994.
Interest expense decreased from $1.2 million to $0 because
the Company has had no outstanding indebtedness since the
contribution of the properties to the Company in late 1995.
Depreciation and amortization expense increased by $.2
million due primarily to the additional depreciation and
amortization related to the properties acquired or developed
after December 31, 1994.
COMPARISON OF THREE MONTHS ENDED JUNE 30, 1996 TO THREE MONTHS ENDED
JUNE 30, 1995
Total revenues increased by $.8 million, or 37%, due
primarily to the properties acquired or developed after March 31,
1995.
Property expenses, which include real estate taxes, repairs
and maintenance, property management, utilities, insurance and
other expenses, increased by $.2 million, or 30%, due primarily
to the properties acquired or developed after March 31, 1995.
Interest expense decreased from $.7 million to $0 because
the Company has had no outstanding indebtedness since the
contribution of the properties to the Company in late 1995.
<PAGE>
<PAGE> 8
LIQUIDITY AND CAPITAL RESOURCES
Upon and subsequent to the consummation of FI's Series A
Preferred Stock Offering and the Company's guarantee of certain
amounts in respect thereof, the Company had no outstanding
indebtedness.
Net cash provided by operating activities, used in investing
activities and used in financing activities for the Company for
the six months ended June 30, 1996 were $4.1 million, ($.7)
million, and ($2.7) million, respectively. Net cash used in
investing activities during the six months ended June 30, 1996
was used principally for capital improvements of the Company's
properties. Net cash used in financing activities during the six
months ended June 30, 1996 consisted of preferred limited partner
distributions of $2 million and a general and limited partner
distribution of $.7 million. Net cash provided by operating
activities, used in investing activities and provided by
financing activities for the Predecessor Businesses for the six
months ended June 30, 1995 were $1.8 million, ($22.1) million and
$20.2 million, respectively. Net cash used in investing
activities during the six months ended June 30, 1995 was used
principally in connection with the acquisition and development of
additional properties. Net cash provided by financing activities
during the six months ended June 30, 1995 was provided
principally by borrowings under an acquisition facility and
capital contributions.
The Company has considered its short-term liquidity
requirements and the adequacy of its estimated cash flows from
operations. The Company believes that its liquidity needs are to
fund normal recurring expenses, and pay the preferred limited
partnership distribution and other partnership distributions.
The Company anticipates that these needs will be met with cash
flows provided by operating activities.
The Company expects to fund its long-term liquidity
requirements for non-recurring capital improvements with its cash
flows from operations and in part with a deferred maintenance
escrow established in connection with the issuance of First
Industrial Realty Trust, Inc.'s Series A Preferred Stock.
<PAGE>
<PAGE> 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
EXHIBIT NO. DESCRIPTION
----------- -----------
27 Financial Data Schedule
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SIGNATURE
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.
FIRST INDUSTRIAL SECURITIES, L.P.,
By: First Industrial Securities Corporation,
Its sole general partner
Date: August 12, 1996 By: /s/ Michael J. Havala
---------------------------
Michael J. Havala
Chief Financial Officer
(Principal Financial and Accounting Officer)
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
EX-27 Financial Data Schedule
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of First Industrial Securities, L.P. for the six
months ended June 30, 1996 and 1995, and the three months ended June 30,
1996 and 1995 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 1,785
<SECURITIES> 0
<RECEIVABLES> 161
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,946
<PP&E> 76,036
<DEPRECIATION> (2,825)
<TOTAL-ASSETS> 76,564
<CURRENT-LIABILITIES> 589
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 75,515
<TOTAL-LIABILITY-AND-EQUITY> 76,564
<SALES> 5,747
<TOTAL-REVENUES> 5,747
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,333
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,414
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,414
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,414
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
