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, 1998
-------------------------------------------------
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.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Missouri 43-1302570
- ------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization)
500 North Broadway, St. Louis, Missouri 63102
- ------------------------------------------------ -------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 206-4600
-----------------------------
- --------------------------------------------------------------------------------
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>
PART I
Item 1 - Financial Statements:
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NOONEY INCOME FUND LTD., L.P.
-----------------------------
(A LIMITED PARTNERSHIP)
-----------------------
BALANCE SHEETS
--------------
June 30, December 31,
1998 1997
ASSETS: (Unaudited)
----------- ------------
Cash and Cash Equivalents $ 748,814 $ 865,287
Accounts receivable 83,026 115,038
Prepaid expenses and deposits 31,898 10,520
Investment property, at cost:
Land 1,946,169 1,946,169
Buildings and improvements 8,529,269 8,447,027
----------- -----------
10,475,438 10,393,196
Less accumulated depreciation 4,919,832 4,731,841
----------- -----------
5,555,606 5,661,355
Deferred expenses - At amortized cost 110,111 61,295
----------- -----------
$ 6,529,455 $ 6,713,495
=========== ===========
LIABILITIES AND PARTNERS' EQUITY:
Liabilities:
Accounts payable and accrued expenses $ 17,045 $ 108,209
Accrued real estate taxes 183,227 184,936
Mortgage notes payable 1,164,600 1,197,000
Refundable tenant deposits 133,654 120,017
----------- -----------
$ 1,498,526 $ 1,610,162
Partners' Equity 5,030,929 5,103,333
----------- -----------
$ 6,529,455 $ 6,713,495
=========== ===========
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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<PAGE>
NOONEY INCOME FUND LTD., L.P.
-----------------------------
(A LIMITED PARTNERSHIP)
-----------------------
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
---------------------------------------------
(UNAUDITED)
-----------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
REVENUES:
Rental and other income $ 452,721 $ 471,783 $ 867,788 $ 923,243
Interest 5,704 5,988 11,026 11,272
----------- ----------- ----------- -----------
458,425 477,771 878,814 934,515
EXPENSES:
Interest 28,096 29,697 56,207 58,633
Depreciation and amortization 113,627 110,190 220,904 228,965
Real estate taxes 64,747 83,380 129,493 144,687
Property management fees paid to
Nooney Inc. 27,229 28,537 52,411 56,060
Reimbursement to Nooney Inc.
for partnership management services
and indirect expenses 6,250 6,250 12,500 12,500
Repairs & Maintenance 17,160 21,441 28,623 40,174
Professional Services 23,609 21,457 35,310 53,898
Utilities 25,511 26,960 52,324 44,020
Cleaning 14,458 14,065 26,788 28,662
Payroll 10,546 13,252 22,322 22,666
Insurance 7,836 9,538 17,173 19,023
Parking Lot/Landscaping 10,202 12,058 15,600 17,991
Office General 9,144 6,756 14,292 13,737
Vacancy Expense 14,324 4,021 15,571 6,922
Other operating expenses 15,719 28,094 40,854 63,731
----------- ----------- ----------- -----------
388,458 415,696 740,372 811,669
----------- ----------- ----------- -----------
NET INCOME $ 69,967 $ 62,075 $ 138,442 $ 122,846
=========== =========== =========== ===========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 4.86 $ 3.72 $ 8.40 $ 6.69
=========== =========== =========== ===========
PARTNERS' EQUITY:
Beginning of Period $ 5,171,808 $ 5,287,263 $ 5,103,333 $ 5,226,492
Cash distributions to partners (210,846) (105,430) (210,846) (105,430)
Net Income 69,967 62,075 138,442 122,846
----------- ----------- ----------- -----------
End of Period $ 5,030,929 $ 5,243,908 $ 5,030,929 $ 5,243,908
=========== =========== =========== ===========
<FN>
SEE NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
</FN>
</TABLE>
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<PAGE>
NOONEY INCOME FUND LTD., L.P.
-----------------------------
(A LIMITED PARTNERSHIP)
-----------------------
STATEMENTS OF CASH FLOW
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(UNAUDITED)
-----------
Six Months Ended
June 30, June 30,
1998 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 138,442 $ 122,846
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 220,904 228,965
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable 32,012 (30,645)
Increase in prepaid expenses and deposits (21,378) (7,408)
Increase in deferred expenses (67,018) (3,445)
Decrease in accounts payable and accrued expenses (91,164) (51,007)
(Decrease) Increase in accrued real estate taxes (1,709) 17,216
Increase (Decrease) in refundable tenant deposits 13,637 (1,097)
--------- ---------
Total Adjustments 85,284 152,579
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Net cash provided by operating activities 223,726 275,425
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES -
Net additions to investment property (96,953) (55,877)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES -
Cash distributions to partners (210,846) (105,430)
Payments on mortgage notes payable (32,400) (32,400)
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Net cash from financing activities (243,246) (137,830)
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NET (DECREASE)INCREASE IN CASH
AND CASH EQUIVALENTS (116,473) 81,718
CASH AND CASH EQUIVALENTS, beginning of period 865,287 797,225
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 748,814 $ 878,943
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - Cash paid during period for interest $ 56,207 $ 58,633
========= =========
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 SIX MONTHS ENDED JUNE 30, 1998 AND 1997
NOTE A:
Refer to the Registrant's financial statements for the fiscal year ended
December 31, 1997 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, 1998 and for all periods presented have been made. The results of
operations for the three and six month periods ended June 30, 1998, 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, Inc., a wholly-owned
subsidiary of CGS Real Estate Company. Nooney Income Investments, Inc., a
general partner, is a 75% owned subsidiary of S-P Properties, Inc. S-P
Properties, Inc is a wholly-owned subsidiary of CGS Real Estate Company.
NOTE D:
The earnings per limited partnership unit for the three and six month periods
ended June 30, 1998 and 1997 were computed on 15,180 units, the number of units
outstanding during the periods.
NOTE E:
Effective January 1, 1998, the Registrant adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income," which
established standards for the reporting and display of comprehensive income and
its components. The adoption of this statement did not affect the Registrant's
consolidated financial statements for the three and six month periods ended June
30, 1998 and 1997.
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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 the Registrant. Actual
results could differ materially from those contemplated by such statements.
Liquidity and Capital Resources
- -------------------------------
Cash on hand as of June 30, 1998 is $748,814, a decrease of $116,473 from the
year ended December 31, 1997. For the six month period ended June 30, 1998 net
cash provided by operating activities was $223,726. Cash was used for tenant
improvements in the amount of $96,953, payments on mortgage notes payable in the
amount of $32,400 and cash distributed to partners in the amount of $210,846.
The Registrant expects the properties to adequately fund anticipated capital
expenditures for the remainder of 1998. The anticipated capital expenditures are
as follows:
Other Capital Leasing Capital Total
------------- --------------- -----
Oak Grove Commons $ 20,000 $142,137 $162,137
Leawood Fountain Plaza (76%) 19,304 99,432 118,736
-------- -------- --------
$ 39,304 $241,569 $280,873
======== ======== ========
Oak Grove Commons' and Leawood Found Plaza's Leasing Capital includes funds for
tenant alterations and lease commissions for new and renewal leases. Other
Capital expenditures at Oak Grove Commons includes dock repavement. Other
Capital at Leawood Fountain Plaza includes sidewalk and curb replacement, carpet
replacement in three buildings' hallways, as well as coach lamp replacement.
Results of Property Operations
- ------------------------------
The results of operations for the Registrant's properties for the quarters ended
June 30, 1998 and 1997 are detailed in the schedule below. Expenses and revenues
of the Registrant are excluded.
Oak Grove Leawood Fountain
Commons Plaza (76%
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Second Quarter 1998
-------------------
Revenues $218,823 $235,313
Expenses 179,904 206,812
-------- --------
Net Income $ 38,919 $ 28,501
======== ========
Second Quarter 1997
-------------------
Revenues $241,638 $233,971
Expenses 198,443 212,222
-------- --------
Net Income $ 43,195 $ 21,749
======== ========
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<PAGE>
For the quarter ended June 30, 1998 and 1997, Oak Grove Commons had net income
of $38,919 and $43,915, respectively. This represents a decrease in net income
of $4,276. Revenues decreased $22,815 when comparing the quarter ended June 30,
1998 to the quarter ended June 30, 1997, due to a decrease in common area
maintenance reimbursement income of $33,705, partially offset by increases in
rental income of $4,560 and miscellaneous income of $6,330. The decrease in
common area maintenance income can be attributed to the amounts billed to
tenants in 1998 being lower than 1997 due to 1998 reimbursable expenses expected
to be lower than 1997 actual reimbursable expenses. Expenses at Oak Grove
Commons were $179,904 for the quarter ended June 30, 1998 and $198,443 for the
quarter ended June 30, 1997. The decrease in expenses of $18,539 can be
attributable to decreases in fire and crime prevention ($16,422) and real estate
taxes ($18,395), partially offset by increases in repairs and maintenance
expenses ($4,739), professional services expense ($7,016), and vacancy expenses
($4,584). The decrease in real estate tax expense is due to when the 1997 tax
bill was obtained in second quarter 1997, it was lower than anticipated.
At Leawood Fountain Plaza, net income increased from $21,749 for the quarter
ended June 30, 1997 to $28,501 for the quarter ended June 30, 1998. This
represents an increase in net income of $6,752. Revenues increased minimally at
$1,342 due to an increase in rental income of $16,784, partially offset by a
decrease in escalation income $15,413. The increase in rent can be attributed to
a higher occupancy level and the decrease in escalation is due to lower
anticipated 1998 tenant common area reimbursements. Expenses for the quarter
ended June 30, 1997 were $212,222 and expenses for the quarter ended June 30,
1998 were $206,812 representing a decrease in expenses of $5,410. This decrease
in expenses is a result of decreases in repairs and maintenance expenses
($9,018) and professional services expense ($5,147), partially offset by
increases in office expenses ($2,460) and vacancy expenses ($5,718).
The occupancy levels at the Registrant's properties are listed below.
Occupancy levels as of June 30,
Property 1998 1997 1996
-------- ---- ---- ----
Oak Grove Commons 98% 93% 98%
Leawood Fountain Plaza (76%) 94% 90% 93%
Occupancy at Oak Grove Commons increased during the second quarter from 89% to
98%.Two tenants signed new leases to occupy 12,599 square feet and two tenants
renewed their leases for 18,584 square feet. At Oak Grove Commons there is one
major tenant who occupies approximately 10% of the available space on a lease
which expires in May 2003.
During the second quarter of 1998, leasing activity at Leawood Fountain Plaza
resulted in an increase in occupancy from 90% to 94%. The Registrant signed new
leases with two tenants for 3,149 square feet and two tenants renewed their
leases for 2,500 square feet. The property has two major tenants occupying 10%
and 11% of the available space on leases which expire in July 1999 and July 1998
respectively. The tenant whose lease expired in July 1998 is working with the
Registrant on a long term renewal and a minor expansion of their space. The
Registrant anticipates signing a new lease with this tenant in August 1998.
-7-
<PAGE>
Year 2000 Issues
- ----------------
The Registrant believes that the impact of the year 2000 will not have a
material impact on future results. The management company employed by the
Registrant utilizes various computer software packages as tools in running its
accounting operations. The Registrant's properties are maintained on software
provided by a third party. The management company has received information from
that company indicating that the main software program has all its core products
already compatible with 2000 dates and that these have been proven in the field
for over five years. A few of the add on products that are not critical to the
management company's business are in process of being updated and the third
party vendor anticipates compliance by the end of 1998.
1998 Comparison
- ---------------
As of June 30, 1998, the Registrant's consolidated revenues for the quarter
ended and six month period ended are $458,425 and $878,814, respectively.
Revenues decreased $19,346 and $55,701 when compared to the quarter and six
month period ended June 30, 1997. The decrease in revenues can be attributable
to significant decreases in common area maintenance/escalation income at both
Oak Grove Commons and Leawood Fountain Plaza. These decreases were partially
offset by increases in rental revenue at both Oak Grove Commons and Leawood
Fountain Plaza, in addition to increases in miscellaneous income at Oak Grove
Commons.
Consolidated expenses for the quarter ended June 30, 1998 and the quarter ended
June 30, 1997 are $388,458 and $415,696, respectively. For the six month period
ended June 30, 1998 and the six month period ended June 30, 1997, consolidated
expenses are $740,372 and 811,669, respectively. The decrease in expenses for
the three month period in the amount of $27,238 can be attributable to decreases
in real estate tax expense ($18,633), repairs and maintenance expense ($4,281),
payroll ($2,706), and other operating expenses ($12,375). These decreases were
partially offset by an increase in vacancy expense of $10,303. The decrease in
real estate tax expense is due to the receipt of the actual 1997 tax bill for
Oak Grove Commons that was less than anticipated. The other operating expense
decrease is primarily due to lower fire/crime prevention costs. The decrease in
expenses for the six month period in the amount of $71,297 can be attributable
to decreases in interest expense ($2,426), depreciation and amortization
($8,061), real estate taxes ($15,194), management fees ($3,649), repairs and
maintenance expenses ($11,551), professional service expenses ($18,588),
cleaning ($1,874), insurance ($1,850), parking lot/landscaping ($2,391), and
other operating expenses ($22,877). These decreases were partially offset by
increases in utilities ($8,304) and vacancy expense ($8,649). The majority of
the expense decreases were minimal, however the real estate tax expense decrease
is due to the lower actual tax bill mentioned above, the professional service
decrease is primarily due to a decrease in audit/tax expense, and the other
operating expense decrease can primarily be attributed to lower fire/crime
prevention and snow removal costs.
1997 Comparison
- ---------------
As of June 30, 1997, the Registrant's consolidated revenues for the quarter
ended and six month period ended are $477,771 and $435,353, respectively.
Revenues increased $42,418 and $85,653 when compared to the quarter and six
month period ended June 30, 1996. The increase in revenues can be attributable
to increases in base rental revenues at both Oak Grove and Leawood Fountain
Plaza.
Consolidated expenses for the quarter ended June 30, 1997 and the quarter ended
-8-
<PAGE>
June 30, 1996 are $415,696 and $368,322, respectively. For the six month period
ended June 30, 1997 and the six month period ended June 30, 1996, consolidated
expenses are $811,669 and $757,004, respectively. The increase in expenses for
both the three and six month periods can be attributable to increases in the
following accounts: real estate tax expense, professional services, and fire and
crime prevention, partially offset by decreases in depreciation and
amortization, utilities expense and other operating expenses. The real estate
tax expense increased at Oak Grove Commons due to the fact that in the prior
year, a one year reduction in taxes had been obtained due to low occupancy.
Inflation
- ---------
The effects of inflation did not have a material impact upon the Registrant's
operations.
-9-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index on Page 11
(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 authorized.
NOONEY INCOME FUND LTD., L.P.
Dated: August 14, 1998 By: Nooney Income Investments, Inc.
---------------------- --------------------------------
General Partner
By: /s/ Gregory J. Nooney, Jr.
-------------------------------
Gregory J. Nooney, Jr.
Director
Chairman of the Board/Chief Executive Officer
By: /s/ Patricia A. Nooney
------------------------------
Patricia A. Nooney-Director
Senior Vice President and Secretary
BEING A MAJORITY OF THE DIRECTORS
-10-
<PAGE>
EXHIBIT INDEX
Exhibit Number 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 U.S. Securities and Exchange
Commission only)
-11-
<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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 748,814
<SECURITIES> 0
<RECEIVABLES> 83,026
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 863,738
<PP&E> 10,475,438
<DEPRECIATION> (4,919,832)
<TOTAL-ASSETS> 6,529,455
<CURRENT-LIABILITIES> 200,272
<BONDS> 1,164,600
<COMMON> 0
0
0
<OTHER-SE> 5,030,929
<TOTAL-LIABILITY-AND-EQUITY> 6,529,455
<SALES> 867,788
<TOTAL-REVENUES> 878,814
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 684,165
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 56,207
<INCOME-PRETAX> 138,442
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 138,442
<EPS-PRIMARY> 8.40
<EPS-DILUTED> 0
</TABLE>
