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
September 30, 1999 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 [ ]
<PAGE>
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 . . . . . . . . . . . . . . . 12
PART II OTHER INFORMATION
Item 3. Defaults Upon Senior Securities . . . . . . . . . . 15
Item 5. Other Information . . . . . . . . . . . . . . . . . 16
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . 17
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . $ 8,122,946 7,107,865
Restricted funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 941,667 --
Interest, rents and other receivables, net of allowance
for doubtful accounts of $176,163 in 1999 and
$67,092 in 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,969 248,034
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,051 31,684
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693,195 650,110
------------ -----------
Total current assets. . . . . . . . . . . . . . . . . . . . . . . 9,904,828 8,037,693
------------ -----------
Investment property held for sale or disposition. . . . . . . . . . . . . . 7,222,599 7,221,002
------------ -----------
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,092 99,910
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . . . 242,102 264,535
------------ -----------
$ 17,433,621 15,623,140
============ ===========
<PAGE>
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- -----------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . $ 155,774 147,692
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,198 186,550
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,619 45,271
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . . 322,500 426,509
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . 1,465,975 --
------------ -----------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . 2,120,066 806,022
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . . . 16,250 16,150
Long-term debt, less current portion. . . . . . . . . . . . . . . . . . . . 7,359,033 7,476,895
------------ -----------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 9,495,349 8,299,067
Partners' capital accounts:
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . . . . 1,213,414 1,188,846
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . . . (250,000) (250,000)
------------ -----------
964,414 939,846
------------ -----------
Limited partners (150,005 interests):
Capital contributions, net of offering costs. . . . . . . . . . . . . . 135,651,080 135,651,080
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . . . . 86,312,038 85,722,407
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . . . (214,989,260) (214,989,260)
------------ -----------
6,973,858 6,384,227
------------ -----------
Total partners' capital accounts. . . . . . . . . . . . . . . . . . 7,938,272 7,324,073
------------ -----------
$ 17,433,621 15,623,140
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1999 1998 1999 1998
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . . $ 984,205 1,820,932 3,403,170 4,565,017
Interest income . . . . . . . . . . . . . . . . . 80,239 286,310 250,283 1,057,602
----------- ---------- ---------- ----------
1,064,444 2,107,242 3,653,453 5,622,619
----------- ---------- ---------- ----------
Expenses:
Mortgage and other interest . . . . . . . . . . . 134,079 136,648 404,205 411,778
Property operating expenses . . . . . . . . . . . 809,682 807,498 2,294,519 2,433,365
Professional services . . . . . . . . . . . . . . 40,421 130 92,569 52,878
Amortization of deferred expenses . . . . . . . . 11,940 12,810 35,818 37,158
General and administrative. . . . . . . . . . . . 63,387 86,369 212,143 310,315
Provision for value impairment. . . . . . . . . . -- 2,095,000 -- 2,095,000
----------- ---------- ---------- ----------
1,059,509 3,138,455 3,039,254 5,340,494
----------- ---------- ---------- ----------
4,935 (1,031,213) 614,199 282,125
Partnership's share of operations
of unconsolidated ventures. . . . . . . . . . . . -- (76,303) -- 69,013
----------- ---------- ---------- ----------
Net earnings (loss) . . . . . . . . . . . . $ 4,935 (1,107,516) 614,199 351,138
=========== ========== ========== ==========
Net earnings (loss) per
limited partnership
interest. . . . . . . . . . . . . . . . . $ .03 (7.09) 3.93 2.25
=========== ========== ========== ==========
Cash distributions per
limited partnership
interest. . . . . . . . . . . . . . . . . $ -- -- -- 196.00
=========== ========== ========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
<CAPTION>
1999 1998
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 614,199 351,138
Items not requiring (providing) cash or cash equivalents:
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . . . 35,818 37,158
Provision for value impairment. . . . . . . . . . . . . . . . . . . . . . . -- 2,095,000
Partnership's share of operations of unconsolidated
ventures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (69,013)
Changes in:
Restricted funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (941,667) --
Interest, rents and other receivables . . . . . . . . . . . . . . . . . . . 147,065 (726,752)
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (43,085) 265,930
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,367) (20,004)
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . . . 22,433 17,399
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (55,352) (172,947)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (652) (607)
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . . . (104,009) (124,538)
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 1,465,975 --
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . . . 100 (1,650)
---------- -----------
Net cash provided by (used in)
operating activities. . . . . . . . . . . . . . . . . . . . . . . . . 1,126,458 1,651,114
---------- -----------
Cash flows from investing activities:
Additions to investment properties. . . . . . . . . . . . . . . . . . . . . . (1,597) (80,104)
Partnership's distributions from unconsolidated ventures. . . . . . . . . . . -- 11,545,487
---------- -----------
Net cash provided by (used in) investing activities . . . . . . . . . . (1,597) 11,465,383
---------- -----------
Cash flows from financing activities:
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . . . (109,780) (102,251)
Distributions to limited partners . . . . . . . . . . . . . . . . . . . . . . -- (29,400,980)
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . . . . (109,780) (29,503,231)
------------ -----------
Net increase (decrease) in cash and cash equivalents. . . . . . . . . . 1,015,081 (16,386,734)
Cash and cash equivalents, beginning of year. . . . . . . . . . . . . . 7,107,865 39,301,294
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . . . $ 8,122,946 22,914,560
============ ===========
<PAGE>
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1999 1998
------------ -----------
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . . . $ 404,857 412,385
============ ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . . . . $ -- --
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND 1998
GENERAL
Readers of this report should refer to the Partnership's audited
financial statements for the year ended December 31, 1998, which are
included in the Partnership's 1998 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.
The Partnership adopted Statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed of" ("SFAS 121") as required in the first
quarter of 1996. The Partnership's policy is to consider a property to be
held for sale or disposition when the Partnership has committed to a plan
to sell such property and active marketing activity has commenced or is
expected to commence in the near term. In accordance with SFAS 121, any
properties identified as "held for sale or disposition" are no longer
depreciated. As of September 30, 1999, the Partnership has previously
committed to plans to sell or dispose of its remaining investment property.
Accordingly, the consolidated property has been classified as held for sale
or disposition in the accompanying consolidated financial statements as of
the respective date of such plan's adoption. The results of operations for
this property were $439,168 and $1,707,445, respectively, for the nine
months ended September 30, 1999 and 1998. In addition, the accompanying
consolidated financial statements include $0 and $69,013, respectively, of
the Partnership's share of total operations of $0 and $176,622,
respectively, for the nine months ended September 30, 1999 and 1998 of the
40 Broad Street and Royal Executive Park ventures, unconsolidated
properties which were sold in the past two years.
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, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of September 30, 1999 and for the nine months ended
September 30, 1999 and 1998 were as follows:
<PAGE>
Unpaid at
September 30,
1999 1998 1999
-------- ------- -------------
Property management and
leasing fees . . . . . . . . . . . $ 67,012 90,660 --
Insurance commissions . . . . . . . 12,455 11,491 --
Reimbursement (at cost) for
out-of-pocket salary and
salary related expenses
related to the on-site
and other costs for the
Partnership and its
investment properties. . . . . . . 45,209 83,865 1,099
-------- ------- ------
$124,676 186,016 1,099
======== ======= ======
The General Partners have deferred (in accordance with the Partnership
agreement) payment of certain of their distributions of net cash flow from
the Partnership. Accordingly, $10,553,193 (approximately $70 per interest)
of distributable cash has been deferred by the General Partners. These
amounts, together with the unpaid fees and expenses set forth in the chart
above, do not bear interest and may be paid in future periods in accordance
with the Partnership agreement to the extent of sufficient distributable
proceeds from property operations, sales or refinancings. The Partnership
does not expect that the subordination requirements of the Partnership
agreement will be satisfied over the expected remaining term of the
Partnership to permit payment of the majority of these amounts.
40 BROAD STREET
In the first quarter of 1999, the Partnership received approximately
$1,200,000 related to real estate tax refunds at 40 Broad St. The
Partnership has determined that approximately $942,000 must be paid to
tenants and other parties. The remaining amount of approximately $258,000
will be retained by the Partnership. The Partnership has reflected as a
liability the amount to be paid to tenants and other parties.
NORTH HILLS MALL
The Partnership has been seeking a replacement anchor department store
for the existing Stripling & Cox store. Based upon discussions with a
number of major department store owners and given the market and property
operating conditions discussed more fully below, it does not appear that
the Partnership will be able to attract a traditional department store
anchor to the center in the near term. Additionally, as a result of poor
sales a major tenant in the mall who operated the cinema was able to
terminate its lease. For this right, the tenant was required to pay a
termination fee of approximately $797,000. The tenant ceased operations in
September 1998, and the Partnership received the fee early in the fourth
quarter of 1998.
North Hills Mall's major competition, Northeast Mall (located within a
mile from the center) has begun construction on a major redevelopment that
would increase its mall space as well as add two new anchor department
stores. It is the Partnership's understanding that completion is expected
sometime in 2000 and that Nordstrom's department store and Saks Fifth
Avenue Department Store have committed to be the two anchor stores.
Northeast already has four anchor department store tenants.
In addition to the increased competition from Northeast Mall, over the
last several years a significant number of strip center developments have
been opened within a close proximity to the center. Many of these centers
include large retail "Big Box" tenants that have adversely affected the
center's tenant sales.
<PAGE>
North Hills Mall has three anchor department stores, none of which are
owned by the Partnership. The operating agreements that require these
stores to remain open have or will expire in 1999 and 2000. There is no
certainty that any of these stores will continue operations beyond the
operating expiration date.
The effect of all these conditions is that mall sales have decreased
in recent years and the manager has had difficulty retaining and attracting
typical national or regional tenants. While the occupancy of the center is
72%, only 47% is occupied by permanent tenants. The center's operating
cash flow has been and will continue to be reduced due to increased vacancy
and lower effective rental rates achieved on re-leasing vacant space. If
the Foley's anchor department store were to close in 1999 without some form
of replacement, it would be very difficult to lease space in the center.
The Partnership has considered various alternatives for the
redevelopment of the property to co-exist with the increased competition.
Due to competitive pressures in the marketplace, the Partnership has been
unable to finalize a redevelopment plan. Given the complexity of a
redevelopment, the lengthy time span likely needed to complete the project
and the Partnership's desire to wind up its affairs in the near term, it
was determined that it would be better for a buyer with a longer-term
ownership perspective to undertake a redevelopment.
As the Partnership had committed to a plan to sell or dispose of the
property, North Hills Mall was classified as held for sale or disposition
as of September 30, 1997, and therefore has not been subject to continued
depreciation beyond such date. The Partnership has been marketing the
property for sale. In November 1998, the Partnership entered into a non-
binding letter of intent to sell the North Hills Mall. The prospective
purchaser and the Partnership were unable to complete negotiations on a
definitive sales agreement and terminated further discussions. In
September 1999, the Partnership entered into a contract for sale to sell
the property. The prospective buyer deposited with the Partnership a
refundable deposit of approximately $500,000 and is currently conducting
its due diligence review with respect to the property and is expected to
complete such review in mid-November 1999. A sale of the property at the
proposed terms is expected to result in no significant gain or loss to the
Partnership for financial reporting or Federal income tax reporting
purposes. The contract for sale executed by the Partnership and the
prospective purchaser is subject to the satisfaction of various conditions.
Therefore, there can be no assurance that a sale of the property will be
consummated on these or on any terms. Additionally, if the sale is
completed, and subject to the timing of such sale, the affairs of the
Partnership are expected to be wound up in the 1999 time frame, barring
unforeseen economic developments. Although the Partnership continues to
market the property for sale, there can be no assurance that any
satisfactory sales transactions will be completed. If the Partnership is
unsuccessful in its efforts to sell the Property, it is unlikely that the
Partnership will commit any funds for operating deficits. This could
result in the Partnership no longer having an ownership interest in the
property. Such action would result in the Partnership recognizing a loss
for Federal income tax purposes and little, if any, gain for financial
reporting purposes with no distributable proceeds. In response to the
uncertainty relating to the Partnership's ability to recover the net
carrying value of the North Hills Mall investment property through future
operations or sale, the Partnership, as a matter of prudent accounting
practice and for financial reporting purposes, recorded provisions for
value impairment at September 30, 1998 and December 31, 1998 of $2,095,000
and $2,942,000, respectively.
<PAGE>
UNCONSOLIDATED VENTURES - SUMMARY INFORMATION
Summary income statement information for Royal Executive Park and 40
Broad Street for the nine months ended September 1998 is as follows:
1998
--------
Total income. . . . . . . . . . . . . . $426,402
Expenses applicable to operations . . . 249,780
--------
Net earnings. . . . . . . . . . . . . . $176,622
========
Partnership's share of
net earnings. . . . . . . . . . . . . $ 69,013
========
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 September 30,
1999 and for the three and nine months ended September 30, 1999 and 1998.
SUBSEQUENT EVENTS
In October 1999, the Partnership received notification from the lender
of alleged defaults under the mortgage loan secured by the North Hills
Mall. Reference is made to Item 3. Defaults Upon Senior Securities in
Part II Other Information in this report for a discussion of alleged
defaults.
<PAGE>
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.
During 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. All such offers have expired. As of the date of this report,
the Partnership is aware that approximately 6.84% 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, 1999, the Partnership had cash and cash equivalents
of approximately $8,131,000. Such funds are available for distributions to
partners, and for working capital requirements including tenant and capital
improvements, to the extent not funded from future operations.
The Partnership has suspended operating cash distributions effective
as of the first quarter of 1999.
After reviewing the North Hills Mall investment property and the
marketplace in which it operates the General Partners of the Partnership
are proceeding to sell the North Hills Mall investment property as quickly
as practicable. As reported above, the Partnership has entered into a
contract for sale to sell the property, potentially by the end of 1999. In
conjunction with the proposed sale, the Partnership contracted to certain
representations and warranties which may extend beyond 1999. Assuming the
Partnership is successful in selling the property and there are no
representations and warranties that extend beyond the end of the year, the
General Partners potentially could terminate the affairs of the Partnership
by the end of 1999, baring unforeseen economic developments.
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, 1999, 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. If
formed, the liquidating trust would be expected to be liquidated as soon as
practicable following expiration of the representations and warranties or
if there is a claim under such representations and warranties, as soon as
practicable after the resolutions thereof.
<PAGE>
RESULTS OF OPERATIONS
The increase in restricted funds and related increase in other current
liabilities at September 30, 1999 as compared to December 31, 1998 is
primarily due to a real estate tax refund received by the Partnership
related to the 40 Broad Street investment property (sold in 1997). The
increase in other current liabilities is also due to the refundable deposit
received by the Partnership from the prospective buyer of the North Hills
Mall.
The decrease in interest, rents and other receivables at September 30,
1999 as compared to December 31, 1998 is primarily due to the increase in
allowance for doubtful accounts at September 30, 1999 as compared to
December 31, 1998 which is a result of an increase in the aging of the
outstanding accounts receivable balances of certain tenants at the North
Hills Mall.
The decrease in accounts payable at September 30, 1999 as compared to
December 31, 1998 is primarily due to the timing of payments for certain
expenses at the North Hills Mall.
The decrease in accrued real estate taxes at September 30, 1999 as
compared to December 31, 1998 is due to the timing of payment of real
estate taxes at the North Hills Mall.
The decrease in rental income for the three and nine months ended
September 30, 1999 as compared to the same periods in 1998 is primarily due
to the decrease in occupancy and the re-negotiation of tenant leases that
provide for a percent of tenant sales paid in lieu of base rent and
recoverable charges at the North Hills Mall and the receipt in the third
quarter of 1998 of 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 interest income for the three and nine months ended
September 30, 1999 as compared to the same periods in 1998 is primarily due
to the temporary investment of sales proceeds of the Royal Executive Park
and 40 Broad Street. Substantially all of such proceeds as well as
previously undistributed sales proceeds were distributed to the Limited
Partners in 1998.
The increase in property operating expenses for the three months ended
September 30, 1999 as compared to the same period in 1998 is primarily due
to the increase in the allowance for doubtful accounts at the North Hills
Mall.
The increase in professional services for the three and nine months
ended September 30, 1999 as compared to the same periods in 1998 is
primarily due to the potential sale of the North Hills Mall.
The decrease in general and administrative expenses for the three and
nine months ended September 30, 1999 as compared to the same periods in
1998 is primarily due to a decrease in reimbursable costs to affiliates of
the General Partners in 1999.
The Partnership's share of operations of unconsolidated ventures for
the three months ended September 30, 1998 is primarily due to an adjustment
of prorations in 1998 related to the sale in 1997 of the Royal Executive
Park investment property.
<PAGE>
YEAR 2000
The year 2000 problem is the result of computer programs being written
with two digits rather than four to define a year. Consequently, any
computer programs that have time-sensitive software may recognize a date
using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations
including, among other things, an inability to process transactions or
engage in other normal business activities. In addition, other date-
sensitive electronic devices could experience various operational
difficulties as a result of not being year 2000 compliant.
The Partnership uses the telephone, accounting, transfer agent,
individual personal computers and other administrative systems, which
include both hardware and software, provided by affiliates of the Corporate
General Partner and certain third party vendors. The Partnership or its
affiliates have received representations to the effect that the telephone,
accounting, transfer agent and other administrative systems are year 2000
compliant in all material respects.
The property manager for the North Hills Mall has conducted an
assessment of various aspects of the property's operating systems in regard
to their year 2000 compliance. In general, such assessment was performed
through written inquiries to third party vendors and service personnel for
the property. Based on the responses to these inquiries, the Partnership
believes that the major operating systems for the property, including HVAC
controls, and alarm and safety systems, are or will be year 2000 compliant
in all material respects. In addition, the Partnership believes that the
computer hardware and software used in the administration of the property,
including transaction processing and record keeping, is or will be year
2000 compliant in all material respects.
The Partnership does not believe that the year 2000 problem presents
any material risks to its business, results of operations or financial
condition and has not developed, and does not intend to develop, any
contingency plans to address the year 2000 problem. Given its limited
operations, the Partnership believes that its accounting, transfer agent
and most of its other administrative systems functions could, if necessary,
be performed manually (i.e., without significant information technology)
for an extended period of time without a material increase in costs to the
Partnership. The Partnership has not incurred and does not expect to
incur, any material direct costs for year 2000 compliance.
The Partnership is relying on the representation of various third
party vendors and service personnel for the North Hills Mall in regard to
that property's operating systems year 2000 compliance in all material
respects. The Partnership is also relying on the property manager's
assessment of the third party vendors and suppliers to be contacted in
regard to year 2000 compliance. In the event that the North Hills Mall is
not year 2000 compliant in all material respects, the property could
experience various operational difficulties or systems failures. This
could result in unanticipated remediation costs and, under certain
circumstances, possible other costs and expenses. If such were to occur,
there is no assurance that such costs and expenses would not, under certain
circumstances, have a material adverse effect on the Partnership in the
event that the property is not sold or disposed of during 1999.
<PAGE>
PART II. OTHER INFORMATION
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
In October 1999, the Partnership received notification from the lender
of alleged defaults under the terms and conditions of the Deed of Trust
securing the North Hills Mall. The alleged defaults are in connection with
the lease termination fee the Partnership received from a tenant who
operated the cinema at the North Hills Mall and North Hills Mall Associates
alleged renewal or replacement of other leases of stores within the mall on
terms which were not comparable to existing market rates and terms or with
respect to which concessions had been granted which were not comparable to
existing market rates and terms. The Partnership believes that it acted
appropriately in connection with the matters at issue and that the matters
are not expected to have an adverse effect on the Partnership's financial
condition, although the Partnership can make no assurances in this regard.
As a result of discussions and negotiations with the lender, the
Partnership believes that the alleged defaults will be fully cured or
otherwise resolved upon the proposed assumption of the loan by the
prospective buyer of the property, and therefore, should have no effect on
the pending sale of the property although there can be no assurance that a
sale of the property will be consummated and that the alleged defaults will
be fully cured and otherwise resolved.
<PAGE>
<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 property owned during 1999.
<CAPTION>
1998 1999
-------------------------------------- ------------------------------
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>
North Hills Mall
North Richland Hills,
Texas (a) . . . . . . . . . . . . 78% 80% 69% 76% 70% 70% 72%
- -----------------
<FN>
(a) The percentage represents physical occupancy which includes temporary tenants. Occupancy without
temporary tenants is 51% at September 30, 1998, 50% at December 31, 1998, 49% at March 31, 1999, 48% at June 30,
1999 and 47% at September 30, 1999.
</TABLE>
<PAGE>
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 Report for December
31, 1992 on Form 10-K (File No. 0-12140) dated March 19, 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 Report for December
31, 1992 on Form 10-K (File No. 0-12140) dated March 19, 1993.
3-C. Acknowledgement of rights and duties of the General
Partners of the Partnership between ABPP Associates, L.P. (a successor
Associated General Partner of the Partnership) and JMB Realty Corporation
as of December 31, 1995 is hereby incorporated herein by reference to the
Partnership's Report for September 30, 1996 on Form 10-Q/A (as amended)
(File No. 0-12140) dated November 25, 1996.
27. Financial Data Schedule
(b) No reports on Form 8-K have been filed during the last quarter
of the period covered by this report.
<PAGE>
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: November 10, 1999
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.
By: GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: November 10, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<CIK> 0000719244
<NAME> JMB INCOME PROPERTIES, LTD. - X
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 8,122,946
<SECURITIES> 0
<RECEIVABLES> 1,781,882
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,904,828
<PP&E> 7,222,599
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,433,621
<CURRENT-LIABILITIES> 2,120,066
<BONDS> 7,359,033
<COMMON> 0
0
0
<OTHER-SE> 7,938,272
<TOTAL-LIABILITY-AND-EQUITY> 17,433,621
<SALES> 3,403,170
<TOTAL-REVENUES> 3,653,453
<CGS> 0
<TOTAL-COSTS> 2,330,337
<OTHER-EXPENSES> 304,712
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 404,205
<INCOME-PRETAX> 614,199
<INCOME-TAX> 0
<INCOME-CONTINUING> 614,199
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 614,199
<EPS-BASIC> 3.93
<EPS-DILUTED> 3.93
</TABLE>
