SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-13241
NOONEY INCOME FUND LTD., L.P.
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(Exact name of Registrant as specified in its charter)
Missouri
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(State or other jurisdiction of incorporation or organization)
43-1302570
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(I.R.S. Employer Identification No.)
7701 Forsyth Boulevard, St. Louis, Missouri 63105
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 863-7700
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Former name, former address and former fiscal year,
if changed since last report
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 [ ].
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date .
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Page 1 of 11 pages
<PAGE>
PART I
Item 1 - Financial Statements:
<TABLE>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEET
<CAPTION>
June 30, December 31,
1996 1995
(Unaudited)
--------------- ---------------
<S> <C> <C>
ASSETS:
Cash and cash equivalents ......................................................... $ 824,171 $ 656,904
Accounts receivable ............................................................... 127,691 117,000
Investment property, at cost:
Land ............................................................................ 1,946,169 1,946,169
Buildings and improvements ...................................................... 8,196,893 8,254,994
--------------- ---------------
10,143,062 10,201,163
Less accumulated depreciation ................................................... 4,236,716 4,063,922
--------------- ---------------
5,906,346 6,137,241
Deferred expenses - At amortized cost ............................................ 102,875 117,880
--------------- ---------------
$ 6,961,083 $ 7,029,025
=============== ===============
LIABILITIES AND PARTNERS' EQUITY:
Liabilities:
Accounts payable and accrued expenses ............................................. $ 48,083 $ 72,550
Accrued real estate taxes ......................................................... 151,834 152,265
Mortgage notes payable ............................................................ 1,294,200 1,326,600
Refundable tenant deposits ........................................................ 113,050 110,121
--------------- ---------------
Total liabilities ............................................................. 1,607,167 1,661,536
Partners' Equity ........................................................................... 5,353,916 5,367,489
--------------- ---------------
$ 6,961,083 $ 7,029,025
=============== ===============
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
-2-
<PAGE>
<TABLE>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<CAPTION>
Three Months Ended Six Months Ended
--------------------------- ---------------------------
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
As Restated As Restated
See Note E See Note E
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
REVENUES:
Rental and other income .................................... $ 429,985 $ 388,980 $ 839,750 $ 789,643
Interest ................................................... 5,368 5,478 9,112 11,665
----------- ----------- ----------- -----------
435,353 394,458 848,862 801,308
EXPENSES:
Interest ................................................... 30,394 34,499 61,470 68,365
Depreciation and amortization .............................. 116,145 127,160 234,290 239,835
Real estate taxes .......................................... 54,377 39,373 105,821 91,795
Property management fees paid to
Nooney Krombach Company ................................... 26,255 23,679 51,318 47,837
Reimbursement to Nooney Krombach
Company for partnership management
services and indirect expenses ............................ 6,250 6,250 12,500 12,500
Other operating expenses ................................... 134,901 153,421 291,605 313,106
----------- ----------- ----------- -----------
368,322 384,382 757,004 773,438
----------- ----------- ----------- -----------
NET INCOME .......................................................... $ 67,031 $ 10,076 $ 91,858 $ 27,870
=========== =========== =========== ===========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP ........................................................ $ 3.68 $ (0.02) $ 5.30 $ 0.54
=========== =========== =========== ===========
PARTNERS' EQUITY:
Beginning of Period ........................................ $ 5,392,316 $ 5,408,364 $ 5,367,489 $ 5,390,570
Net Income ................................................. 67,031 10,076 91,858 27,870
Cash distributions to partners ............................. (105,431) (105,425) (105,431) (105,425)
----------- ----------- ----------- -----------
End of Period .............................................. $ 5,353,916 $ 5,313,015 $ 5,353,916 $ 5,313,015
=========== =========== =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
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<PAGE>
<TABLE>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOW
(UNAUDITED)
<CAPTION>
Three Months Ended Six Months Ended
------------------------- --------------------------
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
As Restated As Restated
See Note E See Note E
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Income (Loss) ................................................. $ 67,031 $ 10,076 $ 91,857 $ 27,870
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization ................................... 116,145 127,160 234,290 239,835
Changes in assets and liabilities:
(Increase)Decrease in accounts receivable ....................... 30,495 (6,648) (10,691) (16,433)
Decrease(Increase) in prepaid expenses .......................... 172 346 (9,232) (10,589)
Increase in deferred assets ..................................... (130) (12,685) (2,129) (16,385)
Increase (Decrease) in accounts payable and
accrued expenses .............................................. (49,758) 162,853 (24,898) 178,666
Increase in refundable tenant deposits .......................... 1,614 3,915 2,929 6,072
----------- ----------- ----------- -----------
Total Adjustments ............................................... 98,539 274,941 190,269 381,166
----------- ----------- ----------- -----------
Net cash provided by
operating activities ........................................... 165,569 285,017 282,127 409,036
CASH FLOWS FROM INVESTING ACTIVITIES:
Adjustments to investment property ................................ (8,668) (316,967) 22,971 (327,076)
----------- ----------- ----------- -----------
Net cash used in investing activities ............................ (8,668) (316,967) 22,971 (327,076)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions to partners .................................... (105,431) (105,425) (105,431) (105,425)
Payments on notes payable ......................................... (16,200) (14,100) (32,400) (32,900)
----------- ----------- ----------- -----------
Net cash used in financing activities ............................. (121,631) (119,525) 137,831 (138,325)
----------- ----------- ----------- -----------
NET (DECREASE) INCREASE IN CASH ............................................ 35,270 (151,475) 167,267 (56,365)
CASH, beginning of period .................................................. 788,901 839,993 656,904 744,883
----------- ----------- ----------- -----------
CASH, end of period ........................................................ $ 824,171 $ 688,518 $ 824,171 $ 688,518
=========== =========== =========== ===========
CASH paid for interest ..................................................... $ 30,394 $ 34,499 $ 61,470 $ 68,365
=========== =========== =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
-4-
<PAGE>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
NOTE A:
Refer to the Registrant's financial statements for the fiscal year ended
December 31, 1995 which are contained in the Registrant's Annual report on Form
10-K, for a description of the accounting policies which have been continued
without change except as noted below. Also, refer to the footnotes to those
statements for additional details of the Registrant's financial condition. The
details in those notes have not changed except as a result of normal
transactions in the interim or as noted below.
NOTE B:
The financial statements include only those assets, liabilities, and results of
operations of the partners which relate to the business of Nooney Income Fund.,
L.P. The statements do not include assets, liabilities, revenues or expenses
attributable to the partners' individual activities. No provision has been made
for federal and state income taxes since these taxes are the responsibilities of
the partners. In the opinion of the general partners, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations and changes in financial position at
June 30, 1996 and for all periods presented have been made.
NOTE C:
The Registrant's properties are managed by Nooney Krombach Company, a
wholly-owned subsidiary of Nooney Company. Certain general partners of the
Registrant are officers and directors of Nooney Company. Nooney Income
Investments, Inc., a general partner, is a 75% owned subsidiary of Nooney
Company.
NOTE D:
The earnings per limited partnership unit for the three months and six ended
June 30, 1996 and 1995 was computed
on 15,180 units, the number of units outstanding during the periods.
NOTE E:
Subsequent to the filing of the 1995 10-Q's, the Registrant's management
determined that certain adjustments were not properly reflected in the quarterly
financial statements. The adjustments were as follows:
(I) Depreciation expense had previously been overstated as a result
of a computational error. The adjustment results in a reduction of
depreciation expense and an increase in net income of $25,658 for the
quarter ended June 30, 1995. The aforementioned adjustment was properly
reflected in the December 31, 1995 financial statements.
(ii) Certain net income per limited partnership unit amounts have also
been restated to reflect an error made in the previous per unit
calculations.
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<PAGE>
ITEM 7: MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Cash on hand as of June 30, 1996 is $824,171, an increase of $167,267
from year end December 31, 1995. The increase in cash can be attributed to Oak
Grove Commons and Leawood Fountain Plaza having strong first and second quarter
operating results. Also contributing to the increase in cash was the receipt
from a tenant at Leawood Fountain Plaza for the reimbursement of tenant finish
costs expended in 1995. With the positive operating results the Registrant
expects the properties to adequately fund anticipated capital expenditures for
the remainder of 1996. The anticipated capital expenditures are as follows:
Other Leasing
Capital Capital Total
-------- -------- --------
Oak Grove Commons ............................. $ 0 $ 38,900 $ 38,900
Leawood Fountain Plaza (76%) .................. 44,600 75,000 119,600
-------- -------- --------
$ 44,600 $113,900 $158,500
======== ======== ========
During the remainder of 1996, approximately $158,500 of capital
expenditures are expected. Oak Grove Commons and Leawood Fountain Plaza leasing
capital includes funds for tenant alterations and lease commission for new and
renewal leases. Other capital expenditures at Leawood Fountain Plaza include
expenditures to the property to meet current ADA requirements, repair of minor
structural problems, painting the building exteriors, wood, and stucco and
repair of some of the property's sidewalks and curbing.
Results of Property Operations
The results of operations for the Registrant's properties for the
quarters ended June 30, 1996 and 1995 are detailed in the schedule below.
Expenses and revenues of the Registrant are excluded.
Leawood
Oak Grove Fountain
Commons Plaza (76%)
-------- -----------
1996
- ----
Revenues ........................................... $216,809 $220,778
Expenses ........................................... 155,263 219,899
-------- --------
Net Income ......................................... $ 61,546 $ 879
======== ========
-6-
<PAGE>
Leawood
Oak Grove Fountain
Commons Plaza (76%)
-------- -----------
1995
- ----
Revenues .......................................... $ 189,019 $ 205,640
Expenses .......................................... 160,607 224,180
--------- ---------
Net Income (Loss) ................................. $ 28,412 $ (18,540)
========= =========
For the quarter ended June 30, 1996 and 1995 Oak Grove Commons net
income was $61,546 and $28,412, respectively. The increase in income can be
attributed to an increase in occupancy. Average occupancy for the second quarter
of 1996 was 99% while in the second quarter of 1995 average occupancy was 93%.
In addition to an increase in occupancy, the Registrant has been able to
increase rental rates upon lease renewal and the signing of new leases. As
revenues increased expenses at Oak Grove Commons decreased from $160,607 to
$155,263 for the quarter ended June 30, 1995 and 1996, respectively. The
decrease can be attributed to interest expenses ($4,105) and amortization
expenses ($6,373) offset by an increase in management fees ($2,038).
At Leawood Fountain Plaza net income (loss) increased $19,419 due to
both an increase in revenues and a decrease in operating expenses. Revenues for
the quarter ended June 30, 1996 when compared to the same period ended June 30,
1995 increased $15,138. The increase can be attributed to increase in rental
income and expense recovery income. The increase in rental income relates to
lease rate increases the Registrant has been able to obtain when renewing and
underwriting new leases. The increase in expense recovery income can be
attributed to an increase in expenses from 1994 to 1995. Even though operating
expenses have slightly decreased in 1996 when compared to 1995, the estimated
expense recovery payments are based on 1995 actual expenses. The operating
expense decrease can be attributed to decreases in repairs and maintenance
($5,234) that related to a reduction in minor building repairs, painting and
decorating ($5,119) offset by increases in cleaning ($4,099) caused by an
increase in pricing and bad debt expense ($3,083).
The occupancy levels at the Registrant's properties during the second
quarter of 1996 remained at high levels. These high levels can be attributed to
the Registrant's ability to lease up space as it becomes available. The
occupancy levels at the Registrant's properties are listed below.
Occupancy Levels at June 30,
Property 1996 1995 1994
- -------- ---- ---- ----
Oak Grove Commons 98% 95% 74%
Leawood Fountain Plaza (76%) 93% 93% 91%
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<PAGE>
Occupancy at Oak Grove Commons during the second quarter decreased from
100% to 98% through the move-out of a single tenant occupying 2,103 square feet.
The property did not have any new leases or renewals. At Oak Grove Commons a
single tenant occupies approximately 10% of the available space and their lease
expires in December 1997.
During the second quarter of 1996 leasing activity at Leawood Fountain
Plaza netted an increase in occupancy of 2%. The Registrant executed two new
leases totaling 1,537 square feet and renewed two leases totaling 2,926 square
feet. The property has one major tenant that leases approximately 10% of the
available space and their lease expires in July 1999.
1996 Comparison
As of June 30, 1996, the Registrant's consolidated revenues for the
quarter ended and six month period ended are $435,353 and $848,862,
respectively. Revenues increase of $40,895 and $47,554 when compared to quarter
and six month period ended June 30, 1995. The increase in revenues can be
attributed to increases in rental income at both Oak Grove Commons and Leawood
Fountain Plaza. Oak Grove Commons rental income increased due to higher average
occupancy when comparing first and second quarter 1996to 1995. At Leawood
Fountain Plaza rental income increase relates to lease rate increases the
Registrant has been able to obtain when renewing and underwriting new leases.
Additionally, the property had an increase in expense recovery income which was
caused by an increase in expenses from 1994 and 1995. Even though operating
expenses have slightly decreased in 1996 when compared to 1995, the estimated
expense recovery payments are based on 1995 actual expenses.
Consolidated expenses for the quarter ended June 30, 1996 and 1995 are
$368,322 and $384,382, respectively. For the six month periods ended June 30,
1996 and 1995 consolidated expenses are $757,004 and $773,438, respectively. The
decrease in consolidated expenses for both the quarter ended and six month
period ended can be attributed to decreases in depreciation and amortization and
other operating expenses offset by an increase in real estate taxes. The
decrease in depreciation and amortization relates to certain capital
expenditures for lease commissions that have become fully amortized. The
decrease in other operating expenses is attributable to decreases in
professional services ($13,710), painting and decorating ($5,119) and parking
lot maintenance ($5,452). The increase in real estate taxes is attributable to
assessment and rate changes at Oak Grove Commons.
1995 Comparison
As of June 30, 1995, the Registrant's consolidated revenues are
$394,458 for the quarter ended and $801,308 for the six month period ended. The
revenues have increased approximately 14.50% over the same six month period
ended June 30, 1994.
The increase in consolidated revenues of approximately 14.50% or
$101,436 can be attributed to Oak Grove Commons. Though Oak Grove Commons
accounted for a majority of the revenue increase on a consolidated basis,
Leawood Fountain Plaza's revenues slightly increased when compared to the
quarter and six month period ended June 30, 1994 and 1995. The significant
increase in revenues at Oak Grove Commons increased in direct correlation with
increases in tenant occupancy. During the period from July 1, 1994 to June 30,
1995 occupancy increased approximately 21%. Revenues had a similar increase.
-8-
<PAGE>
As of June 30, 1995 and 1994 consolidated expenses for the quarter
ended were $384,382 and $352,187, respectively. For the six month period ended
June 30, 1995 and 1994, consolidated expenses were $773,438 and $714,817,
respectively. The increase in consolidated expenses for the quarter ended can be
attributed to increases in interest expense, amortization and other operating
expenses offset by a decrease in real estate taxes. The increase in interest
expense is due to increases in the prime interest rate since June 30, 1994. The
debt on Oak Grove Commons floats at 1% over the prime rate. Amortization expense
increased due to an increase in capital expenditures (i.e., lease commissions
and tenant alterations) at Oak Grove Commons which directly correlates with the
increase in occupancy. Other operating expenses increased $12,747 and can be
attributed to increases in professional services, repairs and maintenance offset
by a decrease in vacancy expenses and snow removal. The decrease in real estate
taxes is comprised of an increase at Leawood Fountain Plaza offset by a decrease
at Oak Grove Commons. The changes in real estate taxes are attributable to rate
changes and/or property reassessment.
For the six month period ended June 30, 1995 consolidated expenses
increased $58,621 when compared to the same period ended June 30, 1994. The
increase in consolidated expenses for the six month period relate to increases
in interest expense, amortization, management fee expense and other operating
expenses offset by a decrease in real estate taxes. As describe in the previous
paragraph, the changes in interest expense, amortization, other operating
expenses and real estate taxes were similar for both the quarter ended and six
month period ended June 30, 1995. Management fee expense increase due to the
significant increase in revenues at Oak Grove Commons.
Inflation
The effects of inflation did not have a material impact upon the
Registrant's operations in fiscal year 1995, and are not expected to materially
affect the Registrant's operations in 1996.
-9-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index.
(b) Reports on Form 8-K
None
SIGNATURES
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 autorized.
NOONEY INCOME FUND LTD., L.P.
Dated: August 14, 1996 By: /s/ Gregory J. Nooney, Jr.
--------------------------------
Gregory J. Nooney, Jr.
General Partner
Nooney Income Investments, Inc.
By: /s/ Gregory J. Nooney, Jr.
--------------------------------
Gregory J. Nooney, Jr.
Chairman of the Board and
Chief Executive Officer
By: /s/ Patricia A. Nooney
--------------------------------
Director
Senior Vice President and
Secretary
BEING A MAJORITY OF THE DIRECTORS
-10-
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -------------------------------------------------------------------
3 Amended and Restated Agreement and Certificate of Limited
Partnership dated November 7, 1983, is incorporated by
reference to the Prospectus contained in Post-Effective
Amendment No. 1 to the Registration Statement on Form S-11
under the Securities Act of 1933 (File No. 2-85683).
27 Financial Data Schedule (provided for the information of the
Securities and Exchange Commission only)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR NOONEY INCOME FUND LTD., L.P. AND IS QUALIFIED IN TIS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000725266
<NAME> NOONEY INCOME FUND LTD., L.P.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 824,171
<SECURITIES> 0
<RECEIVABLES> 127,691
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 951,862
<PP&E> 10,143,062
<DEPRECIATION> 4,236,716
<TOTAL-ASSETS> 6,961,083
<CURRENT-LIABILITIES> 199,917
<BONDS> 1,294,200
0
0
<COMMON> 0
<OTHER-SE> 5,353,916
<TOTAL-LIABILITY-AND-EQUITY> 6,961,083
<SALES> 839,750
<TOTAL-REVENUES> 848,862
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 695,536
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 61,470
<INCOME-PRETAX> 91,858
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 91,858
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
