SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q/A
AMENDMENT NO. 1
Filed pursuant to Section 12, 13, or 15(d) of the
Securities Exchange Act of 1934
JMB INCOME PROPERTIES, LTD. - X
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(Exact name of registrant as specified in its charter)
IRS Employer Identification
Commission File No. 0-12140 No. 36-3235999
The undersigned registrant hereby amends the following section of its
Report for the quarter ended September 30, 1998 on Form 10-Q as set forth
in the pages attached hereto:
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Pages 12 through 14
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.
JMB INCOME PROPERTIES, LTD. - X
BY: JMB Realty Corporation
Managing General Partner
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
and Principal Accounting Officer
Dated: November 24, 1998
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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 board of directors of JMB Realty Corporation ("JMB") the Managing
General Partner of the Partnership, has established a special committee
(the "Special Committee") consisting of certain directors of JMB to deal
with all matters relating to tender offers for Interests in the
Partnership, including any and all responses to such tender offer. The
Special Committee has retained independent counsel to advise it in
connection with any potential tender offers for Interests and has retained
Lehman Brothers Inc. as financial advisor to assist the Special Committee
in evaluating and responding to any additional potential tender offers for
Interests.
During 1997 and 1998, some of the Limited Partners in the Partnership
received unsolicited tender offers from unaffiliated third parties to
purchase up to 4.9% of the Interests in the Partnership at prices ranging
from $100 to $225 per Interest. The Partnership recommended against
acceptance of these offers on the basis that, among other things, the offer
prices were inadequate. Certain of such offers have expired and one other
is currently scheduled to expire in November 1998. As of the date of this
report, the Partnership is aware that approximately 6.68% of the Interests
in the Partnership have been purchased by such unaffiliated third parties
either pursuant to such tender offers or through negotiated purchases. It
is possible that other offers for Interests may be made by unaffiliated
third parties in the future, although there is no assurance that any other
third party will commence an offer for Interests, the terms of any such
offer or whether any such offer, if made, will be consummated, amended or
withdrawn.
At September 30, 1998, the Partnership had cash and cash equivalents
of approximately $22,915,000. Such funds are available for distributions
to partners (as discussed below), for working capital requirements
including tenant and capital improvements, to the extent not funded from
future operations, and for potential liability related to representations
made pursuant to sales of real estate investments in December 1997 as more
fully described in the Notes.
In May 1998, the Partnership made a semi-annual distribution of cash
generated from operations of $6 per Interest. Additionally, the
Partnership currently expects to make a semi-annual distribution of cash
generated from operations of $6 per Interest in the fourth quarter of 1998.
Future distributions from sales or property operations will depend upon a
combination of operating cash flow from the remaining investment property
and the longer term capital requirements of the Partnership.
After reviewing the North Hills Mall investment property and the
marketplace in which it operates the General Partners of the Partnership
expect to sell the North Hills Mall investment property as quickly as
practicable. As reported above, the Partnership has a non-binding letter
of intent to sell such property potentially by the end of 1998. In
conjunction with the sale, the Partnership may contract to certain
representations and warranties that may extend beyond the end of 1998.
Assuming the Partnership is successful in selling the property, the General
Partners potentially could terminate the affairs of the Partnership by the
end of 1998, barring unforeseen economic developments.
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In connection with the planned liquidation and termination of the
Partnership, the Managing General Partner may cause the formation of a
liquidating trust on or before December 31, 1998, in which all of the
Partnership's remaining assets, subject to liabilities, will be
transferred. The initial trustees of the liquidating trust are expected to
be individuals who are officers of the Managing General Partner. Each
Holder of Interests in the Partnership would, upon the establishment of the
liquidating trust, be deemed to be the beneficial owner of a comparable
share of the aggregate beneficial interests in the liquidating trust. It
is anticipated that the liquidating trust would permit the realization of
substantial cost savings in administrative and other expenses until any
residual liabilities (including contingent liabilities) of the Partnership
are paid or otherwise determined to be extinguished and any remaining funds
are distributed to the beneficial owners of the liquidating trust. The
liquidating trust is expected to be in existence for approximately one
year, subject to extension under certain circumstances.
RESULTS OF OPERATIONS
The increase in interest, rents and other receivables at September 30,
1998 as compared to December 31, 1997 and the related increase in rental
income for the three and nine months ended September 30, 1998 as compared
to the three and nine months ended September 30, 1997 is primarily due to a
lease termination fee related to a tenant vacating its space at the North
Hills Mall in the third quarter of 1998.
The decrease in escrow deposits and accrued real estate taxes at
September 30, 1998 as compared to December 31, 1997 is primarily due to the
timing of payment of real estate taxes at the North Hills Mall investment
property.
The decrease in investment property held for sale and accrued rents
receivable at September 30, 1998 as compared to December 31, 1997 and the
provision for value impairment for the three and nine months ended
September 30, 1998 is due to recording a provision to reduce the carrying
value of the North Hills Mall.
The decrease in investment in unconsolidated ventures, at equity at
September 30, 1998 as compared to December 31, 1997 is primarily due to the
distribution to the venture partners in January 1998 of sale proceeds of
approximately $33,155,000 relating to the sale of the 40 Broad Street
investment property in December 1997, of which the Partnership's share was
approximately $10,424,000. In addition, the decrease is also due to the
distribution to the venture partners in January 1998 of remaining operating
cash of approximately $2,369,000 at the Royal Executive Park investment
property as a result of its sale in December 1997, of which the
Partnership's share was approximately $1,182,000.
The decrease in accounts payable at September 30, 1998 as compared to
December 31, 1997 is primarily due to the timing of payments of certain
recurring professional fees by the Partnership and certain property
operating expenses at the North Hills Mall investment property.
The increase in interest income for the nine months ended
September 30, 1998 as compared to the nine months ended September 30, 1997
is primarily due to the temporary investment of sale proceeds relating to
the sale in December 1997 of the Royal Executive Park and 40 Broad Street
investment properties. Substantially all of such proceeds were distributed
by the Partnership to the Limited Partners in February 1998.
The decrease in depreciation expense for the three and nine months
ended September 30, 1998 as compared to the three and nine months ended
September 30, 1997 is primarily due to the North Hills Mall investment
property being identified as held for sale or disposition as of
September 30, 1997, and therefore, no longer subject to depreciation beyond
such date.
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The decrease in property operating expenses for the three and nine
months ended September 30, 1998 as compared to the three and nine months
ended September 30, 1997 is primarily due to a decrease in advertising
expense at the North Hills Mall investment property due to the timing of
promotional campaigns at the mall and also to a decrease in real estate
taxes due to a successful appeal of such taxes in 1997.
The decrease in Partnership's share of operations of unconsolidated
ventures for the three and nine months ended September 30, 1998 as compared
to the three and nine months ended September 30, 1997 is primarily due to
the sale in December 1997 of the Royal Executive Park and 40 Broad Street
investment properties. The Partnership's share of operations of
unconsolidated ventures for the three months ended September 30, 1998 is
primarily due to certain unanticipated costs incurred in 1998 related to
the sale of the Royal Executive Park investment property.
