SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 September 30, 1997
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OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________to_________________________
Commission file number 0-13241
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NOONEY INCOME FUND LTD., L.P.
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(Exact name of Registrant as specified in its charter)
Missouri 43-1302570
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 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 _______.
<PAGE>
PART I
Item 1 - Financial Statements:
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NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
Sept. 30, December 31,
1997 1996
ASSETS: (Unaudited)
- ------- ----------- ------------
Cash and Cash Equivalents $ 894,940 $ 797,225
Accounts receivable 131,497 175,325
Prepaid expenses and deposits 14,335 10,821
Investment property, at cost:
Land 1,946,169 1,946,169
Buildings and improvements 8,375,027 8,304,934
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10,321,196 10,251,103
Less accumulated depreciation (4,642,341) (4,415,352)
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5,678,855 5,835,751
Deferred expenses - At amortized cost 41,381 64,244
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$ 6,761,008 $ 6,883,366
============ ============
LIABILITIES AND PARTNERS' EQUITY:
Liabilities:
Accounts payable and accrued expenses $ 21,378 $ 109,505
Accrued real estate taxes 194,957 170,698
Mortgage notes payable 1,213,200 1,261,800
Refundable tenant deposits 116,080 114,871
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$ 1,545,615 $ 1,656,874
Partners' Equity 5,215,393 5,226,492
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$ 6,761,008 $ 6,883,366
============ ============
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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<TABLE>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<CAPTION>
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Rental and other income $ 443,293 $ 409,423 $ 1,366,536 $ 1,249,174
Interest 5,754 5,307 17,026 14,420
----------- ----------- ----------- -----------
449,047 414,730 1,383,562 1,263,594
EXPENSES:
Interest 29,596 30,338 88,229 91,808
Depreciation and amortization 105,486 121,516 334,451 355,807
Real estate taxes 64,986 51,875 209,673 157,696
Property management fees paid to
Nooney Krombach Company 26,650 25,079 82,710 76,397
Reimbursement to Nooney Krombach Company
for partnership management services
and indirect expenses 6,250 6,250 18,750 18,750
Repairs & maintenance 18,435 17,206 58,609 55,461
Professional services 17,617 3,592 71,515 45,160
Utilities 35,827 35,179 79,847 95,641
Cleaning 12,301 13,877 40,963 42,327
Payroll 11,682 12,778 34,348 36,956
Insurance 9,538 10,165 28,561 29,985
Parking lot/Landscaping 14,556 54,196 32,547 71,714
Other operating expenses 19,208 55,462 103,598 116,818
----------- ----------- ----------- -----------
372,132 437,513 1,183,801 1,194,520
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 76,915 $ (22,783) $ 199,761 $ 69,074
=========== =========== =========== ===========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 4.65 $ (1.48) $ 11.34 $ 3.82
=========== =========== =========== ===========
PARTNERS' EQUITY:
Beginning of Period $ 5,243,908 $ 5,353,916 $ 5,226,492 $ 5,367,489
Cash distributions to partners (105,430) 0 (210,860) (105,430)
Net Income (Loss) 76,915 (22,783) 199,761 69,074
----------- ----------- ----------- -----------
End of Period $ 5,215,393 $ 5,331,133 $ 5,215,393 $ 5,331,133
=========== =========== =========== ===========
</TABLE>
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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<PAGE>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOW
(UNAUDITED)
Nine Months Ended
Sept.30, Sept.30,
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 199,761 $ 69,074
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 334,451 355,807
Changes in assets and liabilities:
Decrease in accounts receivable 43,828 48,494
Increase in prepaid expenses and deposits (3,514) (5,026)
Increase in deferred expenses (6,177) (7,336)
Decrease in accounts payable and accrued expenses (88,127) (46,555)
Increase in accrued real estate taxes 24,259 3,360
Increase in refundable tenant deposits 1,209 4,602
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Total Adjustments 305,929 353,346
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Net cash provided by operating activities 505,690 422,420
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CASH FLOWS FROM INVESTING ACTIVITIES -
Net additions to investment property (148,515) (33,149)
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CASH FLOWS FROM FINANCING ACTIVITIES -
Cash distributions to partners (210,860) (105,430)
Payments on mortgage notes payable (48,600) (48,600)
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Net cash from financing activities (259,460) (154,030)
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NET INCREASE IN CASH AND CASH EQUIVALENTS 97,715 235,241
CASH AND CASH EQUIVALENTS, beginning of period 797,225 656,904
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CASH AND CASH EQUIVALENTS, end of period $ 894,940 $ 892,145
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - Cash paid during period for interest $ 88,230 $ 91,808
========= =========
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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<PAGE>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
NOTE A:
Refer to the Registrant's financial statements for the fiscal year ended
December 31, 1996 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
September 30, 1997 and for all periods presented have been made. The results of
operations for the three and nine month periods ended September 30, 1997 are not
necessarily indicative of the results which may be expected for the entire year.
NOTE C:
The Registrant's properties are managed by Nooney Krombach Company, a
wholly-owned subsidiary of Nooney Company. Certain individual general partners
and a corporate general partner 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 and nine months ended
September 30, 1997 and 1996 was computed on 15,180 units, the number of units
outstanding during the periods.
NOTE E:
On November 6, 1997, Nooney Company sold its 75% interest in Nooney Income
Investments, Inc., to S-P Properties, Inc., a California corporation, which in
turn is a wholly-owned subsidiary of CGS Real Estate Company, Inc., a Texas
corporation. CGS Real Estate Company, Inc. also purchased the entire real estate
management business operated by Nooney Krombach Company. Following the sale,
control of the Registrant now rests with CGS Real Estate Company, Inc.
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<PAGE>
ITEM 7: MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
It should be noted that this 10-Q contains forward-looking information (as
defined in the Private Securities Litigation Reform Act of 1995) that involves
risk and uncertainty, including trends in the real estate investment market,
projected leasing and sales, and the future prospects for Registrant. Actual
results could differ materially from those contemplated by such statements.
Liquidity and Capital Resources
Cash on hand as of September 30, 1997 is $894,940, an increase of $97,715 from
year end December 31, 1996. The increase in cash can be attributable to strong
operating results for the nine month period commencing January 1, 1997, at both
Oak Grove Commons and Leawood Fountain Plaza. The Registrant has been able to
fund two distributions of $6.25 per unit and to reduce the properties' debt by
$48,600 and fund capital additions to the properties thus far in 1997 in the
amount of $148,515. The Registrant anticipates the properties to adequately fund
capital expenditures anticipated for the remainder of 1997. These capital
expenditures are as follows:
Other Leasing
Capital Capital Total
------- ------- -----
Oak Grove Commons $ 5,500 $ 5,108 $10,608
Leawood Fountain Plaza (76%) 4,560 84,642 89,202
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$10,060 $89,750 $99,810
======= ======= =======
At Oak Grove Commons and Leawood Fountain Plaza, leasing capital includes funds
for tenant alterations and lease commissions for new and renewal leases. The
other capital anticipated at Oak Grove Commons is for structural repairs. Other
capital expenditures at Leawood Fountain Plaza are for sidewalk and curb
replacement.
Results of Property Operations
The results of operations for the Registrant's properties for the quarters ended
September 30, 1997 and 1996 are detailed in the schedule below. Expenses and
revenues of the Registrant are excluded.
Leawood
Oak Grove Fountain
Commons Plaza (76%)
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1997
----
Revenues $ 216,789 $ 227,378
Expenses 160,239 213,850
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Net Income $ 56,550 $ 13,528
========= =========
1996
----
Revenues $ 213,338 $ 204,878
Expenses 230,559 214,923
--------- ---------
Net Loss $ (17,221) $ (10,045)
========= =========
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<PAGE>
For the quarter ended September 30, 1997 at Oak Grove Commons revenues increased
slightly due to an increase in common area maintenance reimbursement income.
Expenses decreased significantly due to a decrease in fire and crime prevention
($31,002), parking lot repairs ($24,418), and repairs and maintenance-building
($4,947), when compared to the similar period of the prior year. During 1996,
Oak Grove Commons performed preventative maintenance on the building's sprinkler
system and the parking lot was repaired, paved and sealed. Such expenses were
not necessary in 1997.
At Leawood Fountain Plaza revenues increased $22,500 due to an increase in base
rental income and escalation income. Expenses remained relatively stable. Net
income improved significantly due to the increase in the revenues.
The occupancy levels at the Registrant's properties are listed below.
Occupancy Levels at September 30,
---------------------------------
Property 1997 1996 1995
- -------- ---- ---- ----
Oak Grove Commons 93% 96% 100%
Leawood Fountain Plaza (76%) 87% 90% 96%
Occupancy at Oak Grove Commons remained stable at 93% for the third quarter
ended September 30, 1997. Leasing activity consisted of one new tenant signing a
lease for 3,000 square feet, two tenants renewing their leases for 14,693 square
feet and one tenant vacating 3,200 square feet. At Oak Grove Commons one tenant
occupies approximately 10% of the available space with a lease which expires in
December 1997. This tenant has purchased their own building and will be vacating
this space at the end of their lease.
During the third quarter of 1997 occupancy at Leawood Fountain Plaza decreased
from 90% at the beginning of the quarter to 87% at the quarter's end. Leasing
activity during the quarter consisted of eight tenants renewing their leases for
12,296 square feet and two tenants vacating their leases which occupied 2,644
square feet. The property has two major tenants who occupy approximately 10% and
11% of the available space with leases which expire in July 1999 and July 1998,
respectively.
Each quarter, the General Partners assess the properties for impairment. If
conclusive evidence of an impairment is found in any particular quarter, further
valuation procedures would be performed. Additionally, as a matter of policy,
the Registrant has each of its properties appraised on an annual basis by an
independent appraisal firm. It is difficult to pinpoint an exact time or event
to which impairment of a real estate investment can be attributed. Reductions in
value are usually recognized on an annual basis at the time the appraisals are
completed.
Results of Consolidated Operations 1997
As of September 30, 1997, the Registrant's consolidated revenues for the quarter
ended and nine month period ended were $449,047 and $1,383,562, respectively.
Revenues for the same time periods for the prior year were $414,730 and
$1,263,594. Revenues increased $34,317 and $119,968 when comparing the three
months and nine months ended September 30, 1997, to the similar periods of the
prior year. The increase in revenues can be attributable to increases in base
rental revenues and escalation income at Leawood Fountain Plaza and increases in
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<PAGE>
common area maintenance reimbursement income at Oak Grove Commons. Consolidated
expenses for the quarter ended September 30, 1997 and 1996 were $372,132 and
$437,513. A decrease of $65,381 when comparing the quarter ended September 30,
1997 to the same period in the prior year. The decrease in consolidated expenses
for the quarter is due to a decrease in parking lot/landscaping ($39,640),
depreciation and amortization ($16,030), and other operating expenses ($36,254),
partially offset by an increase in professional services ($14,025) and real
estate taxes ($13,111). The change in other operating expenses primarily
includes the preventative maintenance on the sprinkler system in the prior year.
During the fourth quarter of 1996, Leawood Fountain's property was reassessed
significantly higher than the prior year. The full increase was recorded during
the fourth quarter of 1996. The 1997 real estate tax expense includes this
increased expense. No significant increase in real estate tax expense is
anticipated for the year ended 1997 compared to the year ended 1996.
Consolidated expenses for the nine month period ended September 30, 1997 and
September 30, 1996, were $1,183,801 and $1,194,520, respectively. Operating
expenses decreased $10,719 when comparing the nine months ended September 30,
1997 to the similar period of the prior year. The decrease in expenses was due
to a decrease in utilities ($15,793), parking lot/landscaping ($39,167),
depreciation and amortization ($21,356) and other operating expenses ($13,223),
partially offset by an increase in professional services ($26,355) and real
estate taxes ($51,977).
Results of Consolidated Operations 1996
As of September 30, 1996, the Registrant's consolidated revenues for the quarter
ended and nine month period ended are $414,730 and $1,263,594, respectively.
Revenues for the quarter ended September 30, 1996 when compared to the same
period ended September 30, 1995 remained relatively stable. For the nine month
period ended September 30, 1996 revenues increased $52,445 or 4.3% when compared
to the nine month period ended September 30, 1995. The increase in revenues can
be attributed to increases in rental income at Oak Grove Commons and expense
recovery income at Leawood Fountain Plaza. These increases were partially offset
by decreases in rent concessions. At Oak Grove Commons rental income increased
due to higher average occupancy when comparing the first three quarters of 1996
to 1995. At Leawood Fountain Plaza expense recovery income increased due to an
increase in expenses from 1994 to 1995. As recoverable expenses increase from
year to year, the Registrant has the ability to pass through these increases to
the property's tenants.
Consolidated expenses for the quarter ended September 30, 1996 and 1995 are
$437,513 and $366,451, respectively. For the nine month periods ended September
30, 1996 and 1995 consolidated expenses are $1,194,520 and $1,139,886
respectively. The increase in consolidated expenses for the quarter ended can be
attributed to expenditures at both Oak Grove Commons and Leawood Fountain Plaza
for parking lot repairs, paving and sealing. Along with the parking lot repairs,
the Registrant performed preventative maintenance on the building's sprinkler
system at Oak Grove Commons. For the nine month period ended the increase can be
attributed to the expenditures previously noted offset by a decrease in interest
expenses which is a direct result of declining interest rates on the
Registrant's floating rate debt.
Inflation
The effects of inflation did not have a material impact upon the
Registrant's operations.
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<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
On November 14, 1997, the Registrant filed a report on Form 8-K
which reported an Item 1. Changes in Control of Registrant
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 authorized.
NOONEY INCOME FUND LTD., L.P.
Dated: November 14, 1997 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
-------------------------------
Patricia A. Nooney
Senior Vice President and Secretary
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<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 ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000725266
<NAME> NOONEY INCOME FUND LTD., L.P.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 894,940
<SECURITIES> 0
<RECEIVABLES> 131,497
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,040,772
<PP&E> 10,321,196
<DEPRECIATION> 4,642,341
<TOTAL-ASSETS> 6,761,008
<CURRENT-LIABILITIES> 216,335
<BONDS> 1,213,200
<COMMON> 0
0
0
<OTHER-SE> 5,215,393
<TOTAL-LIABILITY-AND-EQUITY> 6,761,008
<SALES> 1,366,536
<TOTAL-REVENUES> 1,383,562
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,095,572
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 88,229
<INCOME-PRETAX> 199,761
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 199,761
<EPS-PRIMARY> 11.34
<EPS-DILUTED> 0
</TABLE>
