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, 1996Commission file #0-12432
JMB INCOME PROPERTIES, LTD. - IX
(Exact name of registrant as specified in its charter)
Illinois 36-3126228
(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. - IX
(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. . . . . . . . . . . . . . . . . . $ 3,960,084 4,183,046
Interest, rents and other receivables. . . . . . . . . . . . 123,285 44,668
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . 5,217 15,457
------------ -----------
Total current assets. . . . . . . . . . . . . . . . . . 4,088,586 4,243,171
------------ -----------
Investment property, at cost:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . 899,298 899,298
Buildings and improvements . . . . . . . . . . . . . . . . . 26,104,274 26,075,228
------------ -----------
27,003,572 26,974,526
Less accumulated depreciation. . . . . . . . . . . . . . . . 13,976,589 13,726,829
------------ -----------
Total investment property,
net of accumulated depreciation . . . . . . . . . . . 13,026,983 13,247,697
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 706,585 740,785
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 4,480,359 4,602,086
------------ -----------
$ 22,302,513 22,833,739
============ ===========
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
Current liabilities:
Current portion of long-term debt. . . . . . . . . . . . . . $ 15,272,096 15,565,705
Accounts payable . . . . . . . . . . . . . . . . . . . . . . 38,295 40,684
Due to affiliates. . . . . . . . . . . . . . . . . . . . . . 490,130 480,867
Accrued interest . . . . . . . . . . . . . . . . . . . . . . 135,869 136,200
Accrued real estate taxes. . . . . . . . . . . . . . . . . . 58,511 --
------------ -----------
Total current liabilities . . . . . . . . . . . . . . . 15,994,901 16,223,456
Tenant security deposits . . . . . . . . . . . . . . . . . . . 66,982 66,982
------------ -----------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . 16,061,883 16,290,438
------------ -----------
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (losses) . . . . . . . . . . . . . (4,035,239) (4,023,132)
Cumulative cash distributions. . . . . . . . . . . . . . . (1,962,978) (1,962,978)
------------ -----------
(5,997,217) (5,985,110)
------------ -----------
Limited partners (77,132 interests):
Capital contributions, net of offering costs . . . . . . . 68,210,848 68,210,848
Cumulative net earnings (losses) . . . . . . . . . . . . . 38,985,723 39,276,287
Cumulative cash distributions. . . . . . . . . . . . . . . (94,958,724) (94,958,724)
------------ -----------
12,237,847 12,528,411
------------ -----------
Total partners' capital accounts. . . . . . . . . . . . 6,240,630 6,543,301
------------ -----------
$ 22,302,513 22,833,739
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - IX
(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. . . . . . . . . . . . . . . . . . . . . . . . $ 801,856 829,371
Interest income. . . . . . . . . . . . . . . . . . . . . . . 53,164 59,814
----------- ----------
855,020 889,185
----------- ----------
Expenses:
Mortgage and other interest. . . . . . . . . . . . . . . . . 407,940 416,070
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . 249,760 249,428
Property operating expenses. . . . . . . . . . . . . . . . . 359,192 362,013
Professional services. . . . . . . . . . . . . . . . . . . . 35,033 34,300
Amortization of deferred expenses. . . . . . . . . . . . . . 34,200 37,457
General and administrative . . . . . . . . . . . . . . . . . 71,566 26,381
----------- ----------
1,157,691 1,125,649
----------- ----------
Operating earnings (loss) . . . . . . . . . . . . . . (302,671) (236,464)
Partnership's share of earnings (loss) from
operations of unconsolidated venture . . . . . . . . . . . . -- (223,385)
----------- ----------
Net earnings (loss) . . . . . . . . . . . . . . . . . $ (302,671) (459,849)
=========== ==========
Net earnings (loss) per limited
partnership interest. . . . . . . . . . . . . . . . $ (3.77) (5.72)
=========== ==========
Cash distributions per limited partnership
interest. . . . . . . . . . . . . . . . . . . . . . $ -- --
=========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - IX
(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). . . . . . . . . . . . . . . . . . . . . . . $ (302,671) (459,849)
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 249,760 249,428
Amortization of deferred expenses. . . . . . . . . . . . . . . 34,200 37,457
Partnership's share of loss from operations
of unconsolidated venture. . . . . . . . . . . . . . . . . . -- 223,385
Changes in:
Interest, rents and other receivables. . . . . . . . . . . . . (78,617) 18,923
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . 10,240 9,130
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 121,727 66,990
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . (2,389) (199,755)
Due to affiliates. . . . . . . . . . . . . . . . . . . . . . . 9,263 --
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . (331) (261)
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . 58,511 64,939
Tenant security deposits . . . . . . . . . . . . . . . . . . . -- (3,000)
----------- -----------
Net cash provided by (used in) operating activities. . . 99,693 7,387
----------- -----------
Cash flows from investing activities:
Net sales and maturities of short-term investments . . . . . . . -- 2,079,572
Additions to investment property . . . . . . . . . . . . . . . . (29,046) (23,082)
Partnership's contributions to unconsolidated venture. . . . . . -- (137,044)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . -- (104,888)
----------- -----------
Net cash provided by (used in)
investing activities . . . . . . . . . . . . . . . . . (29,046) 1,814,558
----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . (293,609) (109,339)
----------- -----------
Net cash provided by (used in) financing activities. . . (293,609) (109,339)
----------- -----------
Net increase (decrease) in cash and
cash equivalents . . . . . . . . . . . . . . . . . . . (222,962) 1,712,606
Cash and cash equivalents, beginning of year . . . . . . 4,183,046 2,352,046
----------- -----------
Cash and cash equivalents, end of period . . . . . . . . $ 3,960,084 4,064,652
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . $ 408,271 416,331
Non-cash investing and financing activities. . . . . . . . . . . $ -- --
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
JMB INCOME PROPERTIES, LTD. - IX
(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
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Managing General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees and other expenses
required to be paid by the Partnership to the Managing General Partner and
their affiliates as of March 31, 1996 and for the three months ended March
31, 1996 and 1995 are as follows:
Unpaid at
March 31,
1996 1995 1996
------- ------ -------------
Property management and
leasing fees . . . . . . $ -- -- 467,897
Reimbursement (at cost)
for salaries, salary-
related expenses and
other out-of-pocket
expenses . . . . . . . . 14,639 28,672 22,233
------- ------- -------
$14,639 28,672 490,130
======= ======= =======
PLAZA/SEATTLE (BLANCHARD PLAZA)
The Blanchard Plaza investment property currently operates at a small
deficit. This deficit results from a modification of the property's
mortgage note which provides for an annual cash flow payment to the lender
which reduces the principal balance of the loan. The Partnership expects
to continue to utilize the remaining proceeds from the sale of the
Lynnhaven Mall to cover these operating deficits. The joint venture is
currently marketing the Blanchard Plaza office building for sale. There
can be no assurance that a sale of the property will occur. Also, it is
currently expected that any such sale would result in the return of only a
modest portion of the Partnership's original cash invested in the property.
The mortgage note was scheduled to mature December 1, 1995 and has since
been extended to December 1, 1996. In the event that a sale cannot be
consummated before such time, the Partnership expects to further extend the
mortgage note or obtain other financing. There can be no assurance that
the joint venture will be able to further extend, refinance or obtain
alternative financing for all or substantially all of the mortgage loan
when the debt matures. If such a refinancing or sale cannot be achieved
prior to such time, there is a substantial likelihood that the lender will
realize upon its security and take title to the property. This action
would result in a gain for financial reporting and Federal income tax
purposes with no corresponding distributable proceeds.
The joint venture received notification from the General Services
Administration ("GSA") that it was due approximately $423,000 in minimum
rent credits. The joint venture has disputed this claim. The GSA began
offsetting its monthly rent payments in January 1996 in an amount equal to
1/12 of the amount in dispute. The joint venture has filed an appeal with
the General Services Board of Contract Appeals and is awaiting a response.
Though the joint venture believes that it is entitled to retain the amounts
previously received and recover the amounts offset by the GSA, there have
been settlement discussions which indicate that the Partnership may have to
settle for a lesser amount respecting this dispute.
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 (assuming the
Partnership continues as a going concern).
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
investment.
At March 31, 1996, the Partnership and its consolidated venture had
cash and cash equivalents of approximately $3,960,000. Such funds are
available for capital improvements, future distributions to partners,
payment of certain deferrals to affiliates of the General Partners and for
working capital requirements including operating deficits at the Blanchard
Plaza office building.
There is substantial doubt about the Partnership's ability to continue
as a going concern due to the mortgage indebtedness maturing in December
1996.
After reviewing Blanchard Plaza and the marketplace in which it
operates, the General Partners of the Partnership expect to liquidate this
asset as quickly as practicable. Therefore, the affairs of the Partnership
are expected to be wound up no later than 1999 (sooner if the Blanchard
Plaza property is sold or disposed of in the nearer term), barring
unforeseen economic developments.
RESULTS OF OPERATIONS
The decrease in cash and cash equivalents and corresponding decrease
in current portion of long-term debt at March 31, 1996 as compared to
December 31, 1995 is primarily due to an additional principal payment of
annual net cash flow (as defined) due from the Blanchard Plaza investment
property in the amount of $255,800, which was paid in March 1996.
The increase in interest rents and other receivables at March 31, 1996
as compared to December 31, 1995 is primarily due to the Blanchard Plaza
investment property accruing for the monthly rent credits taken by its
major tenant (GSA) prior to a final determination of the appeal to the
General Services Board of Contract Appeals.
The decrease in rental income for the three months ended March 31,
1996 as compared to the three months ended March 31, 1995 is primarily due
to lower occupancy and to the Partnership recognizing rental income for
certain major tenant leases at the Blanchard Plaza investment property over
the life of the lease rather than as due per the terms of their respective
leases.
The increase in general and administrative expenses for the three
months ended March 31, 1996 as compared to the three months ended March 31,
1995 is primarily due to the Partnership engaging independent third parties
to perform certain administrative services for the Partnership.
The decrease in Partnership's share of loss from operations of
unconsolidated venture for the three months ended March 31, 1996 as
compared to the three months ended March 31, 1995 is due to the disposition
of the unconsolidated venture property due to the lender realizing upon its
security for its non-recourse loan related to the Town and Country Center
investment property in December 1995.
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate physical occupancy levels for the Partnership's investment property
owned during 1996.
<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. Blanchard Plaza Building
Seattle, Washington 96% 95% 91% 92% 90%
</TABLE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3-A. The Prospectus of the Partnership dated April 14, 1982,
as supplemented September 23, 1982, January 11, 1983, February 22, 1983,
and March 28, 1983, and filed with the Commission pursuant to Rules 424(b)
and 424(c), is hereby incorporated herein by reference to Exhibit 3 to the
Partnership's report on Form 10-K (File No. 0-12432) for December 31, 1992
dated March 19, 1993.
3-B. Amended and Restated Agreement of Limited Partnership
set forth as Exhibit A to the Prospectus, which is hereby incorporated
herein by reference to Exhibit 3 to the Partnership's report on Form 10-K
(File No. 0-12432) for December 31, 1992 dated March 19, 1993.
4-A. Modification documents relating to the long-term
mortgage note secured by the Blanchard Plaza Building in Seattle,
Washington are hereby incorporated by reference to the Partnership's report
on Form 10-K (File No. 0-12432) for December 31, 1992 dated March 19, 1993.
4-B. Modification documents relating to the extension of the
long-term mortgage note secured by the Blanchard Plaza Building in Seattle,
Washington are hereby incorporated by reference to Exhibit 4-B to the
Partnership's report on form 10-K (File No. 0-12432) for December 31, 1995
dated March 25, 1996.
10-A. Acquisition documents relating to the purchase by the
Partnership of an interest in the Blanchard Plaza Building in Seattle,
Washington are hereby incorporated by reference to the Partnership's report
on Form 8-K (File No. 0-12432) dated July 29, 1983.
10-B. Disposition documents relating to the Partnership's
transferring its interest in the Town and Country Center in Houston, Texas
are hereby incorporated by reference to Exhibit 10-B to the Partnership's
report on Form 10-K (File No. 0-12432) for December 31, 1995 dated March
25, 1996.
27. Financial Data Schedule
(b) No reports on Form 8-K have been filed for the quarter 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.-IX
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> 3,960,084
<SECURITIES> 0
<RECEIVABLES> 128,502
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,088,586
<PP&E> 27,003,572
<DEPRECIATION> 13,976,589
<TOTAL-ASSETS> 22,302,513
<CURRENT-LIABILITIES> 15,994,901
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 6,240,630
<TOTAL-LIABILITY-AND-EQUITY>22,302,513
<SALES> 801,856
<TOTAL-REVENUES> 855,020
<CGS> 0
<TOTAL-COSTS> 643,152
<OTHER-EXPENSES> 106,599
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 407,940
<INCOME-PRETAX> (302,671)
<INCOME-TAX> 0
<INCOME-CONTINUING> (302,671)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (302,671)
<EPS-PRIMARY> (3.77)
<EPS-DILUTED> (3.77)
</TABLE>
