SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended March 31, 1996 Commission file #0-8716
JMB INCOME PROPERTIES, LTD. - V
(Exact name of registrant as specified in its charter)
Illinois 36-2897158
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
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
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . 10
PART II OTHER INFORMATION
Item 5. Other Information. . . . . . . . . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 12
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB INCOME PROPERTIES, LTD. - V
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
ASSETS
------
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 9,174,423 11,134,983
Short-term investments. . . . . . . . . . . . . . . . . . . . . . . . 1,777,068 --
Interest, rents and other receivables . . . . . . . . . . . . . . . . 409,344 283,687
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 41,300 28,421
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . . 11,402,135 11,447,091
------------ ------------
Investment properties, at cost:
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,751,617 2,751,617
Buildings and improvements. . . . . . . . . . . . . . . . . . . . . 30,170,629 29,938,273
------------ ------------
32,922,246 32,689,890
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . 18,089,934 17,870,466
------------ ------------
Total investment properties, net of accumulated depreciation. . 14,832,312 14,819,424
------------ ------------
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,551 74,671
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . 381,195 388,509
------------ ------------
$ 26,677,193 26,729,695
============ ============
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . . $ 20,474,711 20,545,576
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,344,434 1,389,326
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 199,741 201,081
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . 160,311 480,406
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . 96,820 30,541
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . 22,276,017 22,646,930
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 23,656 23,916
Long-term debt, less current portion. . . . . . . . . . . . . . . . . . 5,772,339 5,880,735
------------ ------------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 28,072,012 28,551,581
Venture partner's subordinated equity in venture. . . . . . . . . . . . 11,125,665 10,831,122
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (loss). . . . . . . . . . . . . . . . . . . 1,401,832 1,397,856
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (3,090,976) (3,090,976)
------------ ------------
(1,688,144) (1,692,120)
------------ ------------
Limited partners (38,505 interests):
Capital contributions, net of offering costs. . . . . . . . . . . . 34,926,505 34,926,505
Cumulative net earnings (loss). . . . . . . . . . . . . . . . . . . 26,405,048 26,276,500
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (72,163,893) (72,163,893)
------------ ------------
(10,832,340) (10,960,888)
------------ ------------
Total partners' capital accounts (deficits) . . . . . . . . . . (12,520,484) (12,653,008)
------------ ------------
$ 26,677,193 26,729,695
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - V
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
------------- -----------
<S> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,363,453 2,575,097
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,300 110,626
----------- ----------
2,467,753 2,685,723
----------- ----------
Expenses:
Mortgage and other interest . . . . . . . . . . . . . . . . . . . . . 600,570 617,952
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219,468 215,846
Property operating expenses . . . . . . . . . . . . . . . . . . . . . 1,182,053 1,267,749
Professional services . . . . . . . . . . . . . . . . . . . . . . . . 32,774 20,000
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . 13,120 13,120
General and administrative. . . . . . . . . . . . . . . . . . . . . . 25,181 5,400
----------- ----------
2,073,166 2,140,067
----------- ----------
Operating earnings (loss). . . . . . . . . . . . . . . . . . . . 394,587 545,656
Venture partner's share of venture's operations . . . . . . . . . . . . (262,063) (323,919)
----------- ----------
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . $ 132,524 221,737
=========== ==========
Net earnings (loss) per limited partnership interest . . . . . . $ 3.34 5.59
=========== ==========
Cash distributions per limited partnership interest. . . . . . . $ -- --
=========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - V
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 132,524 221,737
Items not requiring (providing) cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219,468 215,846
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 13,120 13,120
Venture partner's share of venture's operations . . . . . . . . . . . . 262,063 323,919
Changes in:
Interest, rents and other receivables . . . . . . . . . . . . . . . . . (125,657) 124,245
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,879) 13,843
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . 7,314 --
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . (44,892) (22,453)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,340) 712
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . (320,095) 161,046
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . 66,279 1,509
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . (260) --
------------ -----------
Net cash provided by (used in) operating activities . . . . . . . 195,645 1,053,524
Cash flows from investing activities:
Net sales and maturities (purchases) of short-term investments. . . . . . (1,777,068) 2,881,787
Additions to investment properties. . . . . . . . . . . . . . . . . . . . (232,356) (2,938)
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . (2,009,424) 2,878,849
------------ -----------
Cash flows from financing activities:
Bank overdraft. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (703,449)
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . (179,261) (163,932)
Venture partner's contributions to venture. . . . . . . . . . . . . . . . 197,106 207,566
Distributions to venture partners . . . . . . . . . . . . . . . . . . . . (164,626) (233,816)
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . (146,781) (893,631)
------------ -----------
Net increase (decrease) in cash
and cash equivalents. . . . . . . . . . . . . . . . . . . . . . (1,960,560) 3,038,742
Cash and cash equivalents,
beginning of year . . . . . . . . . . . . . . . . . . . . . . . 11,134,983 3,722,315
------------ -----------
Cash and cash equivalents,
end of period . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,174,423 6,761,057
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . $ 601,910 617,240
============ ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . $ -- --
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
JMB INCOME PROPERTIES, LTD. - V
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996 AND 1995
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1995 which are
included in the Partnership's 1995 Annual Report, as certain footnote
disclosures which would substantially duplicate those contained in such
audited financial statements have been omitted from this report.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Statement of Financial Accounting Standards No. 121 was adopted by the
Partnership on January 1, 1996.
TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by the
Partnership to the General Partners and their affiliates as of March 31,
1996 and for the three months ended March 31, 1995 are as follows:
Unpaid at
March 31,
1996 1995 1996
------- ------- -------------
Property management
and leasing fees . . . . . . $64,054 116,058 1,263,203
Insurance commissions . . . . 277 85 --
Reimbursement (at cost)
for out-of-pocket
expenses . . . . . . . . . . 34,375 33,117 698
------- ------- ---------
$98,706 149,260 1,263,901
======= ======= =========
All amounts deferred or currently payable to the General Partners and
their affiliates do not bear interest. The General Partners and their
affiliates have deferred receipt of property management and leasing fees
pursuant to the venture agreement for the Wachovia Bank Building and
Phillips Building. Prior to 1995, an affiliate of the Corporate General
Partner provided management and leasing services. In December 1994, the
affiliate sold all of its assets and assigned its interest in the
management contracts, including the one for the Wachovia Bank Building and
Phillips Building to an unaffiliated third party. In connection with such
sale, an affiliate of the General Partners guaranteed payment to the
unaffiliated third party the portion of the fees currently deferred due to
the provision in the venture agreement for the Wachovia Bank Building and
Phillips Building. Such amounts are deferred until the sale or disposition
of the property and are subordinated to certain distributions of net sale
and refinancing proceeds. As of March 31, 1996, the General Partners and
their affiliates have deferred receipt of approximately $1,224,000
(approximately $31 per interest) of such fees. This amount is reflected in
accounts payable in the consolidated financial statements.
BRISTOL MALL
During 1989, the Partnership entered into a lease with a potential
anchor tenant for a 90,000 square foot addition at the Bristol Mall
shopping center. For the lease to commence, the addition and mall
enhancement program would be required to be completed. The Partnership is
holding funds in reserve and is considering whether to use them to pay for
its share of the remaining costs (approximately $7,100,000) for the
proposed addition and enhancement. The decision to commit Partnership
funds to these items will depend upon the Partnership's ability to reach
definitive agreements with the anchor store, which would include an
amendment of its lease. Construction of the anchor store would also
require certain agreements with the existing mortgage lender. However, the
Partnership will not use these funds for that purpose unless, among other
things, the Partnership believes that upon the sale of the Bristol Mall the
Partnership will receive a return of the funds and a reasonable rate of
return thereon. If the Partnership does not commit the additional funds
necessary for the mall enhancement, the anchor store has the right to
terminate the existing lease agreement and the Partnership would be
required to absorb the amount of the initial development costs incurred for
this investment. The development costs capitalized in 1996 are
approximately $94,000. The aggregate costs capitalized are approximately
$2,043,000 at March 31, 1996.
As previously reported, the Partnership had entered into, in February
1996, a non-binding letter of intent to sell the Bristol Mall. The
prospective purchaser and the Partnership failed to negotiate and execute a
sales agreement and terminated further discussions. Although the
Partnership continues to market this property for sale, there can be no
assurance that any satisfactory sales transaction will be completed in
1996.
WACHOVIA BANK BUILDING AND PHILLIPS BUILDING
The property's mortgage loan is due in late 1996 and due to the short-
term nature of the renewal of a portion of the space (approximately 114,000
square feet) occupied by the Wachovia Bank (through December 31, 1997), it
is considered unlikely that the Partnership would be able to secure
replacement financing or receive an extension from the existing lender on
favorable terms. The Partnership is currently marketing the remaining
space (approximately 40% of the buildings vacated by Wachovia Bank at the
expiration of their lease in December 1995) to prospective replacement
tenants but has not been successful in its efforts due to the lack of large
space users in this market. Re-leasing the remaining space in the building
or any additional extensions of the Wachovia Bank lease would likely
require major renovation to the building as well as significant tenant
improvements which, in turn, would be contingent upon the Partnership
obtaining financing for these tenant replacement costs. Unless replacement
tenants are secured on acceptable terms for the remaining space, it is
unlikely that the Partnership will commit any additional funds to the
property. This may result in the Partnership no longer having an ownership
interest in the two office buildings. This action would result in a gain
for financial reporting and Federal income tax purposes with no
corresponding distributable proceeds. Additionally, the Partnership could
be required to remit to the local tax authorities withholding for taxes due
as a result of this action. This withholding amount is currently estimated
to be approximately $500,000.
The accompanying consolidated financial statements include
approximately $6,100,000 of undistributed operating cash flow related to
Wachovia Building Associates. Such funds are distributable to the
Partnership and the unaffiliated joint venture in the amounts of $3,500,000
and $2,600,000, respectively.
ADJUSTMENTS
In the opinion of the Managing General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of March 31,
1996 and for the three months ended March 31, 1996 and 1995.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying financial
statements for additional information concerning the Partnership's
investments.
The General Partners and their affiliates have deferred payment of
certain fees of approximately $1,224,000 (approximately $31 per interest)
as of March 31, 1996 pursuant to the venture agreement for the Wachovia
Bank Building and Phillips Building.
The General Partners of the Partnership expect to be able to conduct
an orderly liquidation of its remaining investment portfolio as quickly as
practicable. Therefore, the affairs of the Partnership are expected to be
wound up no later than December 31, 1999 (sooner, if the properties are
sold or disposed of in the near term), barring unforeseen economic
developments. The Partnership's only remaining real estate assets are its
joint venture interest in the Wachovia Bank and Phillips Buildings, and its
interest in Bristol Mall. The Partnership does not expect to realize any
proceeds from the disposition of the Wachovia Bank and Phillips Buildings.
However, the Partnership does expect to realize net proceeds from the sale
of Bristol Mall.
RESULTS OF OPERATIONS
The decrease in cash and cash equivalents and the corresponding
increase in short-term investments at March 31, 1996 as compared to
December 31, 1995 is primarily due to all of the Partnership's investments
in U.S. Government obligations being classified as cash equivalents at
December 31, 1995 rather than as short-term investments.
The increase in interest, rents and other receivables at March 31,
1996 as compared to December 31, 1995 is primarily due to increased
billings for recoverable expenses from tenants at the Bristol Mall.
The decrease in accrued real estate taxes as of March 31, 1996 as
compared to December 31, 1995 is primarily due to the timing of payments
for real estate taxes at the Wachovia Bank Building and Phillips Building.
The decrease in rental income for the three months ended March 31,
1996 as compared to the same period in 1995 is primarily due to the
decrease in occupancy at the Wachovia Bank Building and Phillips Building
due to the Wachovia Bank vacating approximately 40% of the buildings upon
expiration of their lease in December 1995.
The decrease in property operating expenses for the three months ended
March 31, 1996 as compared to the same period in 1995 is primarily due to
less utility and maintenance costs incurred at the Wachovia Bank Building
and Phillips Building. This amount is partially offset by an increase in
maintenance costs at the Bristol Mall due to unusually heavy snowfall in
1996.
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties:
<CAPTION>
1995 1996
-------------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Wachovia Bank Building and
Phillips Building
Winston-Salem,
North Carolina. . . . . . . 100% 100% 100% 100% 60%
2. Bristol Mall
Bristol, Virginia. . . . . . 82% 83% 82% 83% 81%
</TABLE>
PART IV
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3-A.* The Prospectus of the Partnership dated August 15,
1977, as supplemented September 20, 1977, filed with the Commission
pursuant to Rules 424(b) and 424(c), is hereby incorporated herein by
reference.
3-B.* Amended and Restated Agreement of Limited Partnership
set forth as Exhibit A to the Prospectus, which is incorporated herein by
reference and which agreement is hereby incorporated herein by reference.
4-A. Documents relating to the refinancing of the mortgage
loan, dated October 17, 1986, secured by the Wachovia Bank Building and
Phillips Building office buildings in Winston-Salem, North Carolina are
hereby incorporated by reference to the Partnership's report for December
31, 1992 on Form 10-K (File No. 0-8716) dated March 19, 1993.
4-B. Documents relating to the mortgage loan secured by the
Bristol Mall shopping center in Bristol, Virginia are hereby incorporated
by reference to the Partnership's report on Form 8-K (File No. 0-8716)
dated October 17, 1977.
10-A. Acquisition documents relating to the purchase by the
Partnership of an interest in the Wachovia Bank Building and Phillips
Building in Winston Salem, North Carolina are hereby incorporated by
reference to the Partnership's Registration Statement on Form S-11 (File
No. 2-58026) dated September 20, 1977.
10-B. Acquisition documents relating to the purchase by the
Partnership of the Bristol Mall shopping center in Bristol, Virginia are
hereby incorporated by reference to the Partnership's report on Form 8-K
(File No. 0-8716) dated October 17, 1977.
27. Financial Data Schedule
--------------------
* Previously filed as Exhibits 3-A and 3-B, respectively, to the
Partnership's Report for December 31, 1992 on Form 10-K of the Securities
Exchange Act of 1934 (File no. 0-8716) filed on March 19, 1993 and hereby
incorporated herein by reference.
(b) No Reports on Form 8-K was filed since the
beginning of the last quarter of the period covered by this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - V
BY: JMB Realty Corporation
(Managing General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: May 10, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: May 10, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 9,174,423
<SECURITIES> 1,777,068
<RECEIVABLES> 450,644
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11,402,135
<PP&E> 32,922,246
<DEPRECIATION> 18,089,934
<TOTAL-ASSETS> 26,677,193
<CURRENT-LIABILITIES> 22,276,017
<BONDS> 5,772,339
<COMMON> 0
0
0
<OTHER-SE> (12,520,484)
<TOTAL-LIABILITY-AND-EQUITY> 26,677,193
<SALES> 2,363,453
<TOTAL-REVENUES> 2,467,753
<CGS> 0
<TOTAL-COSTS> 1,414,641
<OTHER-EXPENSES> 57,955
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 600,570
<INCOME-PRETAX> 394,587
<INCOME-TAX> 0
<INCOME-CONTINUING> 132,524
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 132,524
<EPS-PRIMARY> 3.34
<EPS-DILUTED> 3.34
</TABLE>
