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 #0-12140
JMB INCOME PROPERTIES, LTD. - X
(Exact name of registrant as specified in its charter)
Illinois 36-3235999
(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. - X
(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. . . . . . . . . . . . . . . . . . . . . $ 20,597,293 21,431,887
Rents and other receivables, net of allowance
for doubtful accounts of $89,972 in 1996
and $38,235 in 1995. . . . . . . . . . . . . . . . . . . . . . . 345,543 485,078
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . 12,685 29,642
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . 257,625 772,831
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . . . 21,213,146 22,719,438
------------ -----------
Investment properties, at cost:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,133,642 3,133,642
Buildings and improvements . . . . . . . . . . . . . . . . . . . . 23,627,697 23,512,818
------------ -----------
26,761,339 26,646,460
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . 7,837,912 7,645,144
------------ -----------
Total investment properties, net of
accumulated depreciation . . . . . . . . . . . . . . . . . 18,923,427 19,001,316
Investment in unconsolidated ventures, at equity . . . . . . . . . . 14,603,378 14,404,307
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 206,878 218,659
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . 480,198 488,992
------------ -----------
$ 55,427,027 56,832,712
============ ===========
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
Current liabilities:
Bank overdraft . . . . . . . . . . . . . . . . . . . . . . . . . . $ -- 378,034
Current portion of long-term debt. . . . . . . . . . . . . . . . . 121,482 109,719
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . 129,906 171,022
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . 47,385 539,342
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . 159,691 618,256
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . . . . 458,464 1,816,373
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . 8,830 16,500
Long-term debt, less current portion . . . . . . . . . . . . . . . . 7,859,096 7,890,281
------------ -----------
Commitments and contingencies
Total liabilities. . . . . . . . . . . . . . . . . . . . . . 8,326,390 9,723,154
Partners' capital accounts:
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (losses) . . . . . . . . . . . . . . . . 1,175,907 1,152,263
Cumulative cash distributions. . . . . . . . . . . . . . . . . . (250,000) (250,000)
------------ -----------
926,907 903,263
------------ -----------
Limited partners (150,005 interests):
Capital contributions, net of offering costs . . . . . . . . . . 135,651,080 135,651,080
Cumulative net earnings (losses) . . . . . . . . . . . . . . . . 75,110,230 74,542,775
Cumulative cash distributions. . . . . . . . . . . . . . . . . . (164,587,580) (163,987,560)
------------ -----------
46,173,730 46,206,295
------------ -----------
Total partners' capital accounts . . . . . . . . . . . . . . 47,100,637 47,109,558
------------ -----------
$ 55,427,027 56,832,712
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - X
(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. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,732,458 4,415,121
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . 265,551 1,061,659
----------- ----------
1,998,009 5,476,780
----------- ----------
Expenses:
Mortgage and other interest. . . . . . . . . . . . . . . . . . . . 142,327 1,274,946
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,768 621,385
Property operating expenses. . . . . . . . . . . . . . . . . . . . 1,126,984 2,354,227
Professional services. . . . . . . . . . . . . . . . . . . . . . . 6,509 68,094
Amortization of deferred expenses. . . . . . . . . . . . . . . . . 17,594 15,471
General and administrative . . . . . . . . . . . . . . . . . . . . 119,799 161,893
----------- ----------
1,605,981 4,496,016
----------- ----------
Operating earnings (loss) . . . . . . . . . . . . . . . . . 392,028 980,764
Partnership's share of operations of
unconsolidated ventures. . . . . . . . . . . . . . . . . . . . . . 199,071 160,009
----------- ----------
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . $ 591,099 1,140,773
=========== ==========
Net earnings (loss) per limited partnership interest . . . . $ 3.78 7.30
=========== ==========
Cash distributions per limited partnership interest . . . . $ 4.00 454.00
=========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - X
(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). . . . . . . . . . . . . . . . . . . . . . . . . . $ 591,099 1,140,773
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,768 621,385
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . 17,594 15,471
Partnership's share of operations of uncon-
solidated ventures, net of distributions . . . . . . . . . . . . . (199,071) (160,009)
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . 139,535 (148,584)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . 515,206 (48,337)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 16,957 60,873
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . 8,794 14,338
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . (41,116) 293,997
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . (491,957) (510)
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . (458,565) (967,186)
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . (7,670) (4,899)
----------- -----------
Net cash provided by (used in) operating activities. . . . . . . 283,574 817,312
----------- -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of short-term investments . . . . -- 1,134,935
Additions to investment properties . . . . . . . . . . . . . . . . . . (114,879) (10,038)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . (5,813) (7,579)
Partnership's contribution to unconsolidated ventures. . . . . . . . . -- (125,000)
----------- -----------
Net cash provided by (used in) investing activities. . . . . . . (120,692) 992,318
----------- -----------
Cash flows from financing activities:
Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . . . . . (378,034) 2,479,965
Principal payments on long-term debt . . . . . . . . . . . . . . . . . (19,422) (45,811)
Distributions to limited partners. . . . . . . . . . . . . . . . . . . (600,020) (68,102,270)
------------ -----------
Net cash provided by (used in) financing activities. . . . . . (997,476) (65,668,116)
------------ -----------
Net increase (decrease) in cash and cash equivalents . . . . . (834,594) (63,858,486)
Cash and cash equivalents, beginning of year . . . . . . . . . 21,431,887 84,869,716
------------ -----------
Cash and cash equivalents, end of period . . . . . . . . . . . $ 20,597,293 21,011,230
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . $ 634,284 1,275,456
============ ===========
Non-cash investing and financing activities. . . . . . . . . . . . . . $ -- --
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996 AND 1995
GENERAL
Readers of this 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 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. . . . . . $46,116 108,816 --
Insurance commissions. . . . (7,066) 462 --
Reimbursement
(at cost) for
out-of-pocket
expenses. . . . . . . . . . 3,149 26,785 8,841
------- ------- -------
$42,199 136,063 8,841
======= ======= =======
The Managing General Partner and its affiliates are entitled to
reimbursement for salaries and direct expenses of officers and employees of
the Managing General Partner and its affiliates relating to the
administration of the Partnership and operation of Partnership investment
properties. In 1995 and through the first quarter of 1996, such costs
aggregated $313,676 and $42,937, respectively, of which $107,078 remains
unpaid at March 31, 1996.
The General Partners have deferred (in accordance with the Partnership
Agreement) payment of certain of their distributions of net cash flow from
the Partnership. The cumulative amount of such distributions aggregated
$9,953,059 at March 31, 1996 (approximately $66 per interest). In
addition, the General Partners have deferred certain sale proceeds of
$3,481,080 (approximately $23 per Interest) from the Partnership. All
amounts due to the General Partner do not bear interest and are expected to
be paid, if allowable, in accordance with the Partnership Agreement, from
cash generated from future operations and sales.
40 BROAD STREET
Occupancy at 40 Broad Street was approximately 75% as of March 31,
1996. Tenant leases representing 12% of the property expire in 1996, not
all of whom are expected to renew. The downtown New York City market
remains extremely competitive due to the significant amount of space
available.
NORTH HILLS MALL
The Partnership continues to seek the replacement of a major tenant,
which owns its own store, at the North Hills Mall with another major tenant
and/or adding another major tenant to the center. The major tenant, which
is currently using only the first level of its two-story store, has
expressed an interest in closing its store. In order to replace the major
tenant with another and/or add another major tenant, the Partnership may
need to commit substantial capital. Though discussions have been had
between the Partnership and various prospective tenants, due to local
market conditions and the condition of the retail industry in general, the
Partnership has been unable to make significant progress in this regard.
Therefore, there can be no assurance that such replacement and/or addition
will ultimately occur. The Partnership is in the last year of a five-year
program to repair the property's roof and parking lot. The total cost of
the repair is expected to be approximately $1,375,000, of which
approximately $1,311,000 has been incurred to date. In addition, the
Partnership completed an approximate $525,000 enhancement program to
upgrade the mall's entrances and exterior signage during 1995 and 1996.
The total five-year costs will be partially recoverable from tenants
pursuant to provisions in their leases.
ROYAL EXECUTIVE PARK
Royal Executive Park competes in a market where office building
development is virtually at a standstill, and as a result, significant
improvement in the competitive market conditions is not currently expected.
During 1996, MCI Telecommunications Corporation ("MCI") had an option to
terminate its lease (original expiration date of January 31, 2001) for
30,000 square feet of space with the payment of a substantial lease
termination fee. MCI was required to notify the joint venture by May 5,
1996 that it was going to exercise such option and no such notice was
received. MCI's lease contains an additional option to terminate with no
penalty in late 1998. The competitive market conditions have resulted in
lower effective rental rates and higher costs that will be incurred in
conjunction with re-leasing existing vacant space. Consequently, the
property cash flow has been significantly reduced as a result of increased
vacancy and certain previously reported lease modifications. Although the
venture is conserving its working capital, the Partnership and joint
venture partner may need to contribute capital to the joint venture in the
future in order to pay for leasing costs associated with the lease-up of
the current vacant space.
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.
At March 31, 1996, the Partnership and its consolidated venture had
cash and cash equivalents of approximately $20,597,000. Such remaining
funds are available for distributions to partners and for working capital
requirements including tenant and capital improvements.
Starting in May 1996, in an effort to reduce Partnership operating
expenses, the Partnership has elected to make semi-annual, rather than
quarterly, distributions of operating cash flow. The May 1996 distribution
of $6 per Interest was reduced from the previous quarterly distribution of
$4 per Interest. The reduction in distributions was necessary primarily
due to anticipated reductions in operating cash flow due to the re-leasing
programs at Royal Executive Park and 40 Broad Street. Future distributions
from sales or property operations will depend upon a combination of
operating cash flow from the remaining investment properties and the longer
term capital requirements of the Partnership.
After reviewing the remaining properties and the marketplaces in which
they operate, 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 in the nearer term), barring unforeseen economic
developments.
RESULTS OF OPERATIONS
The decrease in cash and cash equivalents at March 31, 1996 as
compared to December 31, 1995 is primarily due to the subsequent repayment
of the $378,034 bank overdraft incurred at December 31, 1995 and the
payment of approximately $500,000 of accrued mortgage interest for the
Pasadena Town Square investment property. Such amount represents the
operating cash flow of the property (as defined) not previously remitted
prior to the lender realizing upon its security in October 1995.
The decrease in both escrow deposits and accrued real estate taxes at
March 31, 1996 as compared to December 31, 1995 is due to the timing of
payment of approximately $618,000 for real estate taxes from escrow
deposits at the North Hills Mall investment property.
The decrease in interest income for the three months ended March 31,
1996 as compared to the three months ended March 31, 1995 is due to the
decrease in the Partnership's average balance in U.S. Government
obligations primarily due to the distribution of sales proceeds in 1995
from the Collin Creek Mall investment property sale in December 1994.
The decrease in rental income, mortgage and other interest,
depreciation, property operating expenses and professional services for the
three months ended March 31, 1996 as compared to the three months ended
March 31, 1995 is primarily due to the sale of the Animas Valley Mall and a
related land outparcel in June 1995 and the foreclosure on Pasadena Town
Square Mall in October 1995.
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate physical occupancy levels by quarter for the Partnership's
investment properties 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. North Hills Mall
North Richland Hills,
Texas (a). . . . . . . . . 92% 89% 90% 92% 86%
2. Royal Executive Park
Ryebrook, New York . . . . 78% 78% 78% 78% 81%
3. 40 Broad Street
New York, New York . . . . 76% 76% 77% 77% 75%
- -----------------
<FN>
(a) The occupancy has been restated to reflect occupancy by temporary tenants which were not previously
included. Occupancy without the temporary tenants is 88% at March 31, 1995, 80% at June 30, 1995, 79% at
September 30, 1995, 77% at December 31, 1995 and 74% at March 31, 1996.
</TABLE>
ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K
Response:
(a) Exhibits:
3-A. The Prospectus of the Partnership dated June 29, 1983 as
supplemented September 12, 1983 and October 21, 1983, as filed with the
Commission pursuant to Rules 424(b) and 424(c), is hereby incorporated
herein by reference to Exhibit 3-A to the Partnership's Form 10-K dated
March 18, 1993.
3-B. Amended and Restated Agreement of Limited Partnership set
forth as Exhibit A to the Prospectus, which agreement is hereby
incorporated herein by reference to the Partnership's Form 10-K dated March
18, 1993.
4-A. Document relating to the mortgage loan secured by the
Pasadena Town Square shopping center in Pasadena, Texas is hereby
incorporated by reference to the Partnership's report for December 31, 1992
on Form 10-K (File No. 0-12140) dated March 19, 1993.
10-A. Acquisition documents relating to the purchase by the
Partnership of an interest in the 40 Broad Street office building in new
York, New York are hereby incorporated by reference to the Partnership's
report on Form 8-K (File No. 0-12432) dated December 31, 1985.
10-B. Acquisition documents relating to the purchase by the
Partnership of an interest in the Royal Executive Park office complex in
Ryebrook, New York are hereby incorporated by reference to the
Partnership's report on Form 8-K (File No. 0-12432) dated December 30,
1983.
10-C. Acquisition documents relating to the purchase by the
Partnership of the North Hills Mall in North Richland Hills, Texas are
hereby incorporated by reference to the Partnership's Registration
Statement on Post-Effective Amendment No. 2 to Form S-11 (File No. 2-83599)
dated June 29, 1983.
10-D. Sale documents relating to the outparcel sale at the North
Hills Mall in North Richard Hills, Texas are hereby incorporated by
reference to the Partnership's report for December 31, 1993 on Form 10-K
(File No. 0-12140) dated March 25, 1994.
10-E. Sale documents relating to the sale of Animas Valley Mall
and a related land outparcel sale in Farmington, New Mexico are hereby
incorporated by reference to the Partnership's report for June 30, 1995 on
Form 8-K (File No. 0-12140) dated July 14, 1995.
10-F. Documents describing the transferred title of the
Partnership's interest in the Pasadena Town Square Shopping Center are
hereby incorporated by reference to the Partnership's report for September
30, 1995 on Form 10-Q (File No. 0-12140) dated November 9, 1995.
27. Financial Data Schedule
(b) The following report on Form 8-K has been filed for the quarter
covered by this report.
(1) None
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. - X
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
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE QUARTER 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> 20,597,293
<SECURITIES> 0
<RECEIVABLES> 615,853
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 21,213,146
<PP&E> 26,761,339
<DEPRECIATION> 7,837,912
<TOTAL-ASSETS> 55,427,027
<CURRENT-LIABILITIES> 458,464
<BONDS> 7,859,096
<COMMON> 0
0
0
<OTHER-SE> 47,100,637
<TOTAL-LIABILITY-AND-EQUITY>55,427,027
<SALES> 1,732,458
<TOTAL-REVENUES> 1,998,009
<CGS> 0
<TOTAL-COSTS> 1,337,347
<OTHER-EXPENSES> 126,308
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 142,327
<INCOME-PRETAX> 392,027
<INCOME-TAX> 0
<INCOME-CONTINUING> 591,099
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 591,099
<EPS-PRIMARY> 3.78
<EPS-DILUTED> 3.78
</TABLE>
