SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
(Mark One)
_X_ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1998
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OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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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.)
500 North Broadway, St. Louis, Missouri 63102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 206-4600
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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None Not Applicable
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Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
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(Title of Class)
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 .
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<PAGE>
_X_ Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
As of February 1, 1999, the aggregate market value of the Registrant's units of
limited partnership interest (which constitute voting securities under certain
circumstances) held by non-affiliates of the Registrant was $15,180,000. (The
aggregate market value was computed on the basis of the initial selling price of
$1,000 per unit of limited partnership interest, using the number of units not
beneficially owned on February 1, 1999 by the General Partners or holders of 10%
or more of the Registrant's limited partnership interests. The initial selling
price of $1,000 per unit is not the current market value. Accurate pricing
information is not available because the value of the units of limited
partnership interests is not determinable since no active secondary market
exists. The characterization of such General Partners and 10% holders as
affiliates is for the purpose of this computation only and should not be
construed as an admission for any purpose that any such persons are, or other
persons not so characterized are not, in fact, affiliates of the Registrant).
Documents incorporated by reference:
Portions of the Prospectus of the Registrant dated November 9, 1983, as
supplemented and filed pursuant to Rule 424(c) of the Securities Act of 1933,
are incorporated by reference in Part III of this Annual Report on Form 10-K.
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<PAGE>
PART I
ITEM 1: BUSINESS
It should be noted that this 10-K 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.
Nooney Income Fund Ltd., L.P. (the "Registrant") is a limited partnership formed
under the Missouri Uniform Limited Partnership Law on October 12, 1983, to
invest, on an all-cash basis, in income-producing real properties such as
shopping centers, office buildings and office/warehouse properties. The
Registrant originally invested in three real properties. One of the properties
was sold in 1991. The remaining two properties are described in Item 2 below.
The Registrant's primary investment objectives are to preserve and protect the
Limited Partners' capital, provide the maximum possible cash distributions to
the Partners, and provide for capital growth through appreciation in property
values. The term of the Registrant is until December 31, 2083. It was originally
anticipated that the Registrant would sell or finance its properties within
approximately five to ten years after their acquisition. The depression of real
estate values experienced nationwide from 1988 to 1993 lengthened this time
frame in order to achieve the goal of capital appreciation.
The real estate investment market began to improve in 1994, and is expected to
further continue its improvement over the next several years. Management
believes this trend should increase the value of the Registrant's properties in
the future. The Registrant is intended to be self-liquidating and proceeds, if
any, from the sale or refinancing of the Registrant's real property investments
will not be invested in new properties but will be distributed to the Partners
or, at the discretion of the General Partners, applied to capital improvements
or the payment of indebtedness with respect to, existing properties, the payment
of other expenses or the establishment of reserves. (See Item 7: Management's
Discussion and Analysis of Financial Condition and Results of Operations.)
The business in which the Registrant is engaged is highly competitive. The
Registrant's investment properties are located in or near major urban areas and
are subject to competition from other similar types of properties in such areas.
The Registrant competes for tenants for its properties with numerous other real
estate limited partnerships, as well as with individuals, corporations, real
estate investment trusts and other entities engaged in real estate investment
activities. Such competition is based on such factors as location, rent
schedules and services and amenities provided.
The Registrant has no employees. Property management services for the
Registrant's investment properties are provided by Nooney Inc., an affiliate of
the General Partner.
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<PAGE>
Throughout the 10-K, references are made to the following companies listed in
Column A below. Please note that on January 28,1998, the names of said companies
were changed to the names listed in Column B below.
Column A Column B
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Nooney Company Brooklyn Street Properties, Inc.
Nooney Krombach Company Hanley Brokers, Inc.
ITEM 2: PROPERTIES
On January 24, 1984, the Registrant purchased Oak Grove Commons, an
office/warehouse complex located on Brook Drive in the city of Downers Grove,
Illinois, a suburb of Chicago. The purchase price of the complex was $5,218,569.
Oak Grove Commons consists of three adjoining single-story buildings constructed
of brick veneer with concrete block backing which contain a total of
approximately 137,000 net rentable square feet and are located on a 7.6 acre
site which provides paved parking for 303 cars. The complex, which is 40% office
space and 60% bulk warehouse, was 95% leased by 27 tenants at December 31, 1998.
On February 20, 1985, the Registrant acquired a 76% interest as a tenant in
common in Leawood Fountain Plaza, a three building office complex in Leawood,
Kansas. Constructed in two phases in 1982 and 1983, the buildings contain
approximately 30,000, 29,000 and 26,000 net rentable square feet, respectively,
or an aggregate of approximately 85,000 net rentable square feet of office
space. Paved parking is provided for 403 cars. The purchase price of the complex
was $9,626,576, of which $7,316,197 was paid by the Registrant for its 76%
interest. The remaining 24% interest was purchased by Nooney Income Fund Ltd.
II, L.P., an affiliate of the Registrant, as the other tenant in common. All
costs and revenues attributable to the operation of the complex are shared by
the Registrant and Nooney Income Fund Ltd. II, L.P. in proportion to their
respective percentage interests. The complex was 97% leased by 41 tenants at
December 31, 1998.
Reference is made to Note 3 of Notes to Financial Statements filed herewith
as Exhibit 99.3 in response to Item 8 for a description of the indebtedness
secured by the Registrant's real property investments.
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<PAGE>
<TABLE>
The following table sets forth certain information as of December 31, 1998, relating to the properties owned by the Registrant.
<CAPTION>
====================================================================================================================================
AVERAGE
ANNUALIZED
TOTAL EFFECTIVE PRINCIPAL TENANTS
SQUARE ANNUALIZED BASE RENT PER PERCENT OVER 10% OF PROPERTY SQUARE LEASE
PROPERTY FEET BASE RENT* SQUARE FOOT LEASED FOOTAGE EXPIRATION
- -------------------------- ----------- ---------------- ----------------- ------------ ------------------------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Oak Grove
Commons 137,000 $ 885,000 $6.78 95% None
- -------------------------- ----------- ---------------- ----------------- ------------ ------------------------------- -------------
Leawood Fountain Midwest Mechanical (14%) 2001
Plaza 85,000 $1,375,000 $16.74 97% Family Medical Care of Kansas
City (10%) 1999
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<FN>
* Represents 100% of Base Rent. Registrant has 76% ownership in Leawood Fountain Plaza
</FN>
====================================================================================================================================
</TABLE>
ITEM 3: LEGAL PROCEEDINGS
The Registrant is not a party to any material pending legal proceedings.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the fourth
quarter of the year ended December 31, 1998.
PART II
ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
As of February 1, 1999, there were 1,211 record holders of Interests in the
Registrant. There is no public market for the Interests and it is not
anticipated that a public market will develop.
CASH DISTRIBUTIONS PAID PER LIMITED PARTNERSHIP UNIT
First Quarter Second Quarter Third Quarter Fourth Quarter
------------- -------------- ------------- --------------
1997 -0- $6.25 $6.25 $ 6.25
1998 $12.50 -0- $12.50 -0-
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<TABLE>
ITEM 6: SELECTED FINANCIAL DATA
<CAPTION>
Year Ended December 31,
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1998 1997 1996 1995 1994
(Not covered by independent auditors' report)
<S> <C> <C> <C> <C> <C>
Rental and other income $1,851,792 $1,772,253 $1,778,074 $1,688,761 $1,430,841
Net income 233,141 193,131 175,285 187,776 6,623
Data per limited partnership unit:
Net income (loss) 12.72 10.74 9.57 11.01 (0.80)
Cash distributions - investment income 12.72 10.74 9.57 11.01 -
Cash distributions - return of capital 12.28 8.01 9.18 1.49 12.50
Weighted average limited partnership units outstanding 15,180 15,180 15,180 15,180 15,180
At year-end:
Total assets 6,562,586 6,713,495 6,883,366 7,029,025 7,107,722
Investment property, net 5,537,118 5,661,355 5,835,751 6,137,241 6,132,218
Mortgage note payable 1,149,701 1,197,000 1,261,800 1,326,600 1,387,200
Partners' equity 4,914,656 5,103,333 5,226,492 5,367,489 5,390,570
<FN>
See Item 7: Management's Discussion and Analysis for discussion of comparability of items.
</FN>
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</TABLE>
<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources
Cash on hand as of December 31, 1998, is $804,739, a decrease of $60,548 from
the year ended December 31, 1997. The Registrant expects the capital
expenditures during 1999 will be adequately funded by current cash reserves and
the properties' operating cash flow. The anticipated capital expenditures in
1999 by property are as follows:
Other Leasing
Capital Capital Total
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Oak Grove Commons $ 22,511 $110,713 $133,224
Leawood Fountain Plaza (76%) 66,570 168,253 234,823
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$ 89,081 $278,966 $368,047
======== ======== ========
At Oak Grove Commons, leasing capital has been budgeted for tenant improvements
and lease commissions for new and renewal tenants. The other capital has been
budgeted for restoration of mansard roofs over entry doors and additional drain
pipes for the parking lot.
At Leawood Fountain Plaza, leasing capital has been budgeted for tenant
improvements and lease commissions for new and renewal tenants. Other capital
budgeted is for recarpeting hallways in one building, replacing exterior
lighting throughout the property, and overlay of the parking lot.
Results of Operations
The results of operations for the Registrant's properties for the years ended
December 31, 1998, 1997 and 1996 are detailed in the schedule below. Expenses of
the Registrant are excluded.
Oak Grove Leawood Fountain
Commons Plaza (76%)
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1998
Revenues $879,643 $974,977
Expenses 745,030 835,485
-----------------------------------
Net Income $134,613 $139,492
===================================
1997
Revenues $886,520 $898,955
Expenses 709,258 835,526
-----------------------------------
Net Income $177,262 $ 63,429
====================================
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Oak Grove Leawood Fountain
Commons Plaza (76%)
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1996
Revenues $881,453 $907,803
Expenses 718,405 881,027
------------------------------------
Net Income $163,048 $ 26,776
====================================
1998 Comparisons By Property
At Oak Grove Commons, revenues decreased slightly due to a decrease in base
rental income ($6,803), a decrease in common area maintenance reimbursement
($15,848), partially offset by an increase in miscellaneous non-rental income of
($14,575). Expenses at Oak Grove Commons increased over the prior year due to an
increase in fire and crime prevention expenses ($15,025), professional services
($11,527), common area maintenance expenses ($10,635), and vacancy expense
($12,290), partially offset by a decrease in amortization ($9,454) as well as a
decrease in interest ($10,976). Oak Grove Commons has a first mortgage with a
floating rate of LIBOR + 3%. The loan balance as of December 31, 1998, was
$1,149,701. The loan matures July 1, 2000.
At Leawood Fountain Plaza, revenues increased ($76,000) when comparing 1998
year-end results to the prior year. The increase in revenue can be attributed to
an increase in base rental income ($113,347), partially offset by a decrease in
escalation income ($41,019). The increase in base rental income is due to the
higher occupancy level the property maintained throughout 1998 as compared to
1997. Expenses during 1998 were relatively stable when compared to the prior
year. The result of the stable expense level when combined with the significant
increase in base rental income resulted in net income ($76,063) higher than the
prior year.
The occupancy rates as of December 31 are as follows:
1998 1997 1996
------------------------------------
Oak Grove Commons 95% 86% 95%
Leawood Fountain Plaza 97% 89% 92%
During the fourth quarter, the occupancy level at Oak Grove Commons remained
stable at 95%. During the quarter, one tenant leased 3,209 square feet, one
tenant renewed 4,550 square feet, and one tenant vacated 3,209 square feet. For
the year, leasing activity consisted of eight new leases for tenants occupying
40,273 square feet, six tenants renewing their leases for 33,132 square feet,
and five tenants vacating 27,508 square feet. Oak Grove Commons has no tenants
who occupy more than 10% of the available space.
During the fourth quarter at Leawood Fountain Plaza, occupancy increased from
95% to 97%. During the quarter, two tenants signed new leases for 2,567 square
feet, three tenants renewed their leases for 13,164 square feet, and one tenant
vacated 560 square feet. During the year, the Registrant signed new leases with
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<PAGE>
seven tenants for 6,743 square feet, renewed seven tenants' leases for 19,155
square feet, and three tenants vacated 2,627 square feet. The property has two
major tenants, one who occupies 14% of the space with a lease which expires in
October 2001 and the other major tenant occupies 10% of the space with a lease
which expires in July 1999, respectively. The Registrant is currently working
with the tenant whose lease expires during 1999 for a long-term renewal.
The Registrant reviews long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of a property may not
be recoverable. The Registrant considers a history of operating losses or a
change in occupancy to be primary indicators of potential impairment. The
Registrant deems the Property to be impaired if a forecast of undiscounted
future operating cash flows directly related to the Property, including disposal
value, if any, is less than its carrying amount. If the Property is determined
to be impaired, the loss is measured as the amount by which the carrying amount
of the Property exceeds its fair value. Fair value is based on quoted market
prices in active markets, if available. If quoted market prices are not
available, an estimate of fair value is based on the best information available,
including prices for similar properties or the results of valuation techniques
such as discounting estimated future cash flows. Considerable management
judgment is necessary to estimate fair value. Accordingly, actual results could
vary significantly from such estimates.
Year 2000 issues
Information Technology Systems
The Registrant utilizes computer software for its corporate and real property
accounting records and to prepare its financial statements, as well as for
internal accounting purposes. The vendor of the Registrant's software has
informed the Registrant that it is Year 2000 compliant. The Registrant believes
after reasonable investigation that its information technology hardware is Year
2000 compliant. However, in the event that such systems should fail, as a
contingency plan, the Registrant could prepare all required accounting entries
manually, without incurring material additional operating expenses.
Non-Information Technology Systems
At the request of the Registrant, its property managers have completed their
review of the major date-sensitive non-information technology systems such as
the elevators, heating, ventilating, air conditioning and cooling ("HVAC")
systems, locks, and other like systems in the Registrant's properties and have
determined that such systems are materially Year 2000 compliant. In some of the
Registrant's properties, its property managers have utilized the services of
third-party consultants in making this determination, while in other properties,
the property managers have internally made such determinations. The Registrant
does not separately track the internal costs incurred for its Year 2000 project.
The Registrant does not believe that the Year 2000 issue will pose significant
problems to the Registrant's Information technology systems and non-Information
technology systems, or that resolution of any potential problems with respect to
such systems will have a material effect on the Registrant's financial condition
or results of operations.
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<PAGE>
Material Third Parties' Systems Failures
The most reasonably likely worst case scenario facing the Registrant as a result
of the Year 2000 problem would be the inability of its tenants to pay rent as a
result of a breakdown in such tenants' (or their financial service providers')
computer systems or the refusal of such tenants to pay their rent as a result of
the Registrant's inability to provide services due to non-Information technology
systems failure. Failure in a tenant's computer systems may cause delays in such
tenant's ability to process its accounting records and to make timely rent
payments. However, any such delays in rent payments, whether caused by systems
failure of tenant, property manager or a combination of the two, should not have
a materially adverse effect on the Registrant's business or results of
operations.
Risks
While delays caused by failure of the tenants' or the property managers'
accounting or supply systems would likely not adversely affect the Registrant's
business or results of operations, non-Information technology systems failure in
the Registrant's properties could lead to tenants attempting to withhold their
rent payments, which could materially adversely effect the Registrant's
business, results of operations and financial condition as a result of increased
legal costs. The Registrant believes that such material effect is primarily
limited to items of a utility nature furnished by third parties to the
Registrant and a wide universe of other customers. Included are items such as
electricity, natural gas, telephone service and water, all of which are not
readily susceptible to alternate sources and which in all likelihood should be
available in some form. The Registrant has been unable to obtain assurances from
such utility companies as to their Year 2000 compliance, and does not expect
that such assurances will be forthcoming.
Such non-Information technology systems failure could force tenants to use the
stairs in such properties, rather than the elevators. However, none of the
properties owned by the Registrant is a high-rise building where such an
elevator failure could cause a material adverse effect to the operations of its
tenants, although such failure could make it impossible for any disabled tenants
or any disabled customers to access such properties. Moreover, as previously
discussed, the Registrant may suffer adverse effects in its results of
operations and financial condition as a result of utility or HVAC failures, for
example. Such events could lead the tenants of the Registrant to withhold rent,
in the event that the Registrant's properties are not usable for their intended
purposes. The Registrant does not believe that rent abatement would be a lawful
tenant remedy for short-term obligations unless such failures extend for a
period of 30 consecutive days. The Registrant intends to pursue its remedies for
any such breach of its rent obligations by a Tenant expeditiously and to the
full extend permitted by law.
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<PAGE>
1998 Comparisons
Consolidated revenues for the Registrant were $1,867,865 for the year ended 1998
and $1,795,659 for the year ended 1997. The consolidated revenues increased
$72,206 when compared to the prior year. This increase in revenue was due to an
increase in rental income at Leawood Fountain Plaza, previously discussed. The
Registrant's consolidated expenses were $1,634,850 and $1,602,528 for the years
ended December 31, 1998, and December 31, 1997, respectively, a difference of
$32,196. The increase in consolidated expenses is due to an increase in other
operating expenses ($56,275), an increase in utilities ($9,833), partially
offset by decreases in real estate taxes ($23,867), depreciation and
amortization ($9,455), and interest expense ($10,976). Net income for 1998
increased $40,010 when compared to the prior year. Cash flow provided from
operations was $679,538 for the year ended 1998 as compared to $680,360 for the
year ended 1997. The cash flow provided during 1998 allowed the Registrant to
fund capital expenditures of $270,969, distribute $421,818 to the partners, and
reduce Oak Grove Commons' debt by $47,299.
1997 Comparisons
The Registrant's consolidated revenues were very comparable when looking at
December 31, 1997, compared to December 31, 1996. Consolidated revenues were
$l,795,659 for the year ended 1997, and $1,798,369 for the year ended 1996. The
Registrant's consolidated expenses were $1,602,528 for the year ended December
31, 1997, and $1,623,084 for the year ended December 31, 1996. The decrease in
consolidated expenses was $20,556 or 1%. This decrease in expense in
attributable to a decrease in depreciation and amortization ($23,186), repairs
and maintenance ($30,069), and utilities ($27,508), partially offset by an
increase in real estate tax expense ($26,404), and other operating expenses
($38,338). Net income for 1997 increased $17,846 when compared to the prior
year. Cash flow provided from operations for the year ended December 31, 1997,
was $680,360 which allowed the Registrant to fund capital expenditures of
$231,208, distribute $316,290 to the partners, and reduce Oak Grove Commons'
debt by $64,800.
Inflation
The effects of inflation did not have a material impact upon the Registrant's
operations in fiscal l998 and are not expected to materially affect the
Registrant's operation in l999.
Interest Rates
Interest rates on floating rate debt went down in 1997 and fluctuated throughout
1998, ending the year lower than the prior year end. Future increases in the
prime interest rate can adversely affect the operations of the Registrant.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Registrant considered the provision of Financial Reporting Release No. 48
"Disclosure of Accounting Policies for Derivative Financial Instruments and
Derivative Commodity Instruments, and Disclosure of Quantitative and Qualitative
Information about Market Risk Inherent in Derivative Financial Instruments,
Other Financial Instruments and Derivative Commodity Instruments". The
Registrant had no holdings of derivative financial or commodity instruments at
December 31, 1998. A review of the Registrant's other financial instruments and
risk exposures at that date revealed that the Registrant had minor exposure to
interest rate risk due to the floating rate first mortgage debt of $1,149,701.
The Registrant utilized sensitivity analyses to assess the potential effect of
this risk and concluded that near-term changes in interest rates should not
materially adversely affect the Registrant's financial position, results of
operations or cash flows.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements of the Registrant are filed herewith as Exhibit 99.3 and
are incorporated herein by reference (see Item 14(a)1). The supplementary
financial information specified by Item 302 of Regulation S-K is provided in
Item 7.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Registrant has two General Partners. The background and experience of the
General Partners are as follows:
The General Partner of the Registrant responsible for all aspects of the
Registrant's operations is Nooney Income Investments, Inc., a Missouri
corporation. Nooney Income Investments, Inc. was formed in August 1983 for the
purpose of being a general and/or limited partner in the Registrant and other
limited partnerships.
John J. Nooney is a Special General Partner of the Partnership and as such, does
not exercise control of the affairs of the Partnership.
The General Partners will continue to serve as General Partners until their
withdrawal or their removal from office by the Limited Partners.
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Certain of the General Partners act as general partners of limited partnerships
and hold directorships of companies with a class of securities registered
pursuant to Section 12(g) of the Securities Exchange Act of 1934 or subject to
the requirements of Section 15(d) of the Act. A list of such directorships, and
the limited partnerships for which the General Partners serve as general
partners, is filed herewith as Exhibit 99.1 and incorporated herein by
reference.
ITEM 11: EXECUTIVE COMPENSATION
The General Partners are entitled to a share of distributions and a share of
profits and losses as more fully described under the headings "Compensation to
General Partners and Affiliates" on pages 9-10 and "Profits and Losses for Tax
Purposes; Distributions; and Expenses of General Partners" on pages A-17 to A-21
of the Prospectus of the Registrant dated November 9, 1983, as supplemented and
filed pursuant to Rule 424c of the Securities Act of 1933 (the "Prospectus"),
which are incorporated herein by reference.
During 1998, cash distributions of $42,169 were paid to the General Partners by
the Registrant.
See Item 13 below for a discussion of transactions between the Registrant and
certain affiliates of the General Partners.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security Ownership of Certain Beneficial Owners.
No person is known to the Registrant to be the beneficial owner of more than 5%
of the outstanding Interests of the Registrant.
(b) Security Ownership of Management.
None of the General Partners is known to the Registrant to be the beneficial
owner, either directly or indirectly, of any Interests in the Registrant.
(c) Changes in Control.
There are no arrangements known to the Registrant, the operation of which may at
a subsequent date result in a change in control of the Registrant.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(a) Transactions with Management and Others.
Certain affiliates of the General Partners are entitled to certain fees and
other payments from the Registrant in connection with certain transactions of
the Registrant as more fully described under the headings "Compensation to
General Partners and Affiliates" on pages 9-10 and "Management" on pages 23-25
of the Prospectus, which are incorporated herein by reference.
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<PAGE>
Nooney, Inc., the manager of the Registrant's properties, is a wholly-owned
subsidiary of CGS Real Estate Company, an affiliate of the General Partner.
Nooney, Inc. is entitled to receive monthly compensation from the Registrant for
property management and leasing services, plus administrative expenses. During
fiscal 1998 the Registrant paid property management fees of $111,606 to Nooney,
Inc. and $25,000 as reimbursement for indirect expenses incurred in connection
with management of the Registrant.
See Item 11 above for a discussion of cash distributions paid to the General
Partners during the year ended December 31, 1998.
(b) Certain Business Relationships.
The relationship of certain of the General Partners to certain of their
affiliates is set forth in Item 13(a) above. Also see Item 13(a) above for a
discussion of amounts paid by the Registrant to the General Partners or their
affiliates during the year ended December 31, 1998, in connection with various
transactions.
(c) Indebtedness of Management.
Not Applicable.
(d) Transactions with promoters.
Not Applicable.
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PART IV
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
1. Financial Statements (filed herewith as Exhibit 99.3):
Independent auditors' report
Balance sheets
Statements of operations
Statements of partners' equity (deficit)
Statements of cash flows
Notes to financial statements
2. Financial Statement Schedules (filed herewith as Exhibit
99.3):
Schedule - Reconciliation of partners' equity (deficit)
Schedule III - Real estate and accumulated depreciation
All other schedules are omitted because they are
inapplicable or not required under the instructions.
3. Exhibits:
See Exhibit Index on Page 17.
(b) Reports on Form 8-K
During the last quarter of the period covered by this report, the
Registrant filed no reports on Form 8-K.
(c) Exhibits:
See Exhibit Index on Page 17.
(d) Not Applicable
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) under 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.
Date: March 31, 1999 Nooney Income Investments, Inc.
----------------------------- General Partner
By: /s/ William J. Carden
----------------------------------
William J. Carden - Director
Chairman of the Board and
Chief Executive Officer
By: /s/ Gregory J. Nooney, Jr.
----------------------------------
Gregory J. Nooney - Director
Vice Chairman
President and Secretary
BEING A MAJORITY OF THE DIRECTORS
OF NOONEY INCOME INVESTMENTS, INC.
-16-
<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).
10 Management Contract between Nooney Income Fund Ltd. and
Nooney Company is incorporated by reference to Exhibit
10(a) to the Registration Statement on Form S-11 under
the Securities Act of 1933 (File No. 2-85683). The
Management Contract was assigned by Nooney Krombach
Company, a wholly-owned subsidiary of Nooney Company,
on October 31, 1997, to Nooney, Inc., and is identical in
all material respects to the management contract referred to above.
99.1 List of Directorships in Response to Item 10.
99.2 Pages 9-10, 23-25, and A-17 - A-21 of the Prospectus
of the Registrant dated November 9, 1983, as supplemented
and filed pursuant to Rule 424(c) of the Securities
Act of 1933 are incorporated by reference.
99.3 Financial Statements and Schedules.
-17-
EXHIBIT 99.1
Below each General Partner's name is a list of the limited partnerships, other
than the Registrant, for which the General Partner serves as a general partner
and the companies for which the General Partner serves as a director. The list
includes only those limited partnerships and companies which have a class of
securities registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934 or are subject to the requirements of Section 15(d) of the Act.
John J. Nooney
Limited Partnerships:
Nooney Real Property Investors-Two, L.P. Nooney Income Fund Ltd. II, L.P.
Nooney Real Property Investors-Four, L.P.
-18-
Exhibit 99.3
INDEPENDENT AUDITORS' REPORT
To the Partners of
Nooney Income Fund Ltd., L.P.:
We have audited the accompanying balance sheets of Nooney Income Fund Ltd., L.P.
(a limited partnership) as of December 31, 1998 and 1997, and the related
statements of operations, partners' equity (deficit) and cash flows for each of
the three years in the period ended December 31, 1998. Our audits also included
the financial statement schedules listed in the index at Item 14(a)2. These
financial statements are the responsibility of the Partnership's general
partners. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Nooney Income Fund Ltd., L.P. as of December
31, 1998 and 1997, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1998 in conformity with
generally accepted accounting principles. Also, in our opinion, such financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
January 29, 1999
-19-
<PAGE>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
ASSETS 1998 1997
CASH AND CASH EQUIVALENTS $ 804,739 $ 865,287
ACCOUNTS RECEIVABLE 97,104 115,038
PREPAID EXPENSES 12,332 10,520
INVESTMENT PROPERTY:
Land 1,946,169 1,946,169
Buildings and improvements 8,601,373 8,447,027
------------ ------------
10,547,542 10,393,196
Less accumulated depreciation (5,010,424) (4,731,841)
------------ ------------
5,537,118 5,661,355
DEFERRED EXPENSES - At amortized cost 111,293 61,295
------------ ------------
TOTAL $ 6,562,586 $ 6,713,495
============ ============
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses $ 186,291 $ 108,209
Accrued real estate taxes 180,361 184,936
Refundable tenant deposits 131,577 120,017
Mortgage note payable 1,149,701 1,197,000
------------ ------------
Total liabilities 1,647,930 1,610,162
PARTNERS' EQUITY 4,914,656 5,103,333
------------ ------------
TOTAL $ 6,562,586 $ 6,713,495
============ ============
See notes to financial statements.
-20-
<PAGE>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
1998 1997 1996
REVENUES:
Rental and other income $1,851,792 $1,772,253 $1,778,074
Interest 16,073 23,406 20,295
---------- ---------- ----------
Total revenues 1,867,865 1,795,659 1,798,369
---------- ---------- ----------
EXPENSES:
Interest 106,461 117,437 121,761
Depreciation and amortization 433,549 443,004 466,190
Real estate taxes 249,836 273,703 247,299
Property management fees - related party 111,606 107,130 107,341
Repairs and maintenance 133,264 127,354 157,423
Utilities 118,114 108,281 135,789
Other operating expenses (includes $25,000
in each year to related party) 481,894 425,619 387,281
---------- ---------- ----------
Total expenses 1,634,724 1,602,528 1,623,084
---------- ---------- ----------
NET INCOME $ 233,141 $ 193,131 $ 175,285
========== ========== ==========
NET INCOME ALLOCATION:
General partners $ 39,944 $ 30,127 $ 29,946
Limited partners 193,197 163,004 145,339
LIMITED PARTNERS DATA:
Net income per unit $ 12.72 $ 10.74 $ 9.57
========== ========== ==========
Cash distributions - investment income
per unit $ 12.72 $ 10.74 $ 9.57
========== ========== ==========
Cash distributions - return of capital
per unit $ 12.28 $ 8.01 $ 9.18
========== ========== ==========
Weighted average limited partnership units
outstanding 15,180 15,180 15,180
========== ========== ==========
See notes to financial statements.
-21-
<PAGE>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
Limited General
Partners Partners Total
BALANCE (DEFICIT), JANUARY 1, 1996 $ 5,453,701 $ (86,212) $ 5,367,489
Net income 145,339 29,946 175,285
Cash distributions (284,654) (31,628) (316,282)
----------- ----------- -----------
BALANCE (DEFICIT), DECEMBER 31, 1996 5,314,386 (87,894) 5,226,492
Net income 163,004 30,127 193,131
Cash distributions (284,625) (31,665) (316,290)
----------- ----------- -----------
BALANCE (DEFICIT), DECEMBER 31, 1997 5,192,765 (89,432) 5,103,333
Net income 193,197 39,944 233,141
Cash distributions (379,625) (42,193) (421,818)
----------- ----------- -----------
BALANCE (DEFICIT), DECEMBER 31, 1998 $ 5,006,337 $ (91,681) $ 4,914,656
=========== =========== ===========
See notes to financial statements.
-22-
<PAGE>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
1998 1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 233,141 $ 193,131 $ 175,285
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 395,206 405,604 415,470
Amortization of deferred expenses 38,343 37,400 50,720
Net changes in accounts affecting
operations:
Accounts receivable 17,934 60,287 (58,325)
Prepaid expenses (1,812) 302 (572)
Deferred expenses (88,341) (34,452) (7,333)
Accounts payable and accrued expenses 78,082 (1,296) 36,955
Accrued real estate taxes (4,575) 14,238 18,433
Refundable tenant deposits 11,560 5,146 4,750
--------- --------- ---------
Net cash provided by operating
activities 679,538 680,360 635,383
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES -
Net additions to investment property (270,969) (231,208) (113,980)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (421,818) (316,290) (316,282)
Payments on mortgage note payable (47,299) (64,800) (64,800)
--------- --------- ---------
Net cash used in financing
activities (469,117) (381,090) (381,082)
--------- --------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (60,548) 68,062 140,321
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR 865,287 797,225 656,904
--------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 804,739 $ 865,287 $ 797,225
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - Cash paid for interest $ 98,013 $ 117,437 $ 132,787
========= ========= =========
See notes to financial statements.
-23-
<PAGE>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- ----------------------------------------------------------------------
1. BUSINESS
Nooney Income Fund Ltd., L.P. (the "Partnership") is a limited partnership
organized under the laws of the State of Missouri on October 12, 1983 for
the purpose of investing in income-producing real properties, such as
shopping centers, office buildings, warehouses and other commercial
properties. The Partnership's portfolio is comprised of an office/warehouse
complex located in Downers Grove, Illinois (Oak Grove Commons) which
generated 47.4% of rental and other income for the year ended December 31,
1998, and an office complex in Leawood, Kansas (Leawood Fountain Plaza)
which generated 52.6% of rental and other income for the year ended
December 31, 1998.
The Partnership owns 100% of Oak Grove Commons and a 76% undivided interest
in Leawood Fountain Plaza.
The Partnership's proportionate share of the results of operations of
Leawood Fountain Plaza is included in the statements of operations of the
Partnership. The Partnership's proportionate share of the assets and
liabilities of Leawood Fountain Plaza is included in the balance sheets
presented.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements include only those assets, liabilities and results
of operations of the partners which relate to the business of the
Partnership. The statements do not include any 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 personal responsibility of the partners.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent 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.
Prior to October 31, 1997, the corporate general partner was a
partially-owned subsidiary of Nooney Company. One of the individual general
partners was an officer, director and shareholder of Nooney Company.
Another individual general partner's spouse was a shareholder of Nooney
Company. Nooney Company was also an economic assignee of the general
partnership interests of two former individual general partners. Nooney
Krombach Company, a wholly-owned subsidiary of Nooney Company, managed the
Partnership's real estate for a management fee. On October 31, 1997, Nooney
Company sold its 75% interest in Nooney Income Investments, Inc., the
corporate general partner of the Partnership 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. Simultaneously, Gregory J.
Nooney, Jr., an individual general partner and PAN, Inc., a corporate
general partner, sold their economic interests to S-P Properties, Inc. and
resigned as general partners. CGS Real Estate also purchased the real
estate management business of Nooney Krombach Company and formed Nooney,
Inc. to perform the management of the Partnership. The Partnership
continues to pay management fees to Nooney, Inc. Property management fees
-24-
<PAGE>
paid to Nooney Krombach Company were $90,260 and $107,341 for the years
ended December 31, 1997 and 1996, respectively. Property management fees
paid to Nooney, Inc. for the years ended December 31, 1998 and 1997 were
$111,606 and $16,870, respectively. Additionally, the Partnership paid
Nooney Krombach Company $20,833 in 1997 and $25,000 in 1996 as
reimbursement for management services and indirect expenses in connection
with the management of the Partnership. The Partnership paid Nooney, Inc.
$25,000 in 1998 and $4,167 in 1997 for these same reimbursement items.
The Partnership considers all highly liquid debt instruments with a
maturity of three months or less at date of purchase to be cash
equivalents.
Investment property is recorded at the lower of cost or net realizable
value. The Partnership reviews long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of a
property may not be recoverable. The Partnership considers a history of
operating losses or a change in occupancy to be primary indicators of
potential impairment. The Partnership deems the property to be impaired if
a forecast of undiscounted future operating cash flows directly related to
the property, including disposal value if any, is less than its carrying
amount. If the property is determined to be impaired, the loss is measured
as the amount by which the carrying amount of the property exceeds its fair
value. Fair value is based on quoted market prices in active markets, if
available. If quoted market prices are not available, an estimate of fair
value is based on the best information available, including prices for
similar properties or the results of valuation techniques such as
discounting estimated future cash flows. Considerable management judgment
is necessary to estimate fair value. Accordingly, actual results could vary
significantly from such estimates.
Buildings and improvements are depreciated over their estimated useful
lives (30 years) using the straight-line method. Tenant alterations are
depreciated over the term of the lease on a straight-line basis.
Deferred expenses consist of lease fees amortized over the terms of their
respective leases.
Lease agreements are accounted for as operating leases and rentals from
such leases are reported as revenues ratably over the terms of the leases.
Certain lease agreements provide for rent concessions. At December 31, 1998
accounts receivable include approximately $39,000 ($42,000 in 1997) of
accrued rent concessions which is not yet due under the terms of various
lease agreements.
Net Operating Cash Income, as defined in the Partnership Agreement, is
distributed quarterly as follows: (1) 90% pro rata to all partners based
upon the relationship of original capital contributions of all the
partners; (2) 9% to the individual general partners as their annual
partnership management fee; and (3) 1% to the individual general partners.
For financial statement and income tax reporting, the income from
operations is allocated as follows: first, a special allocation of gross
income to the individual general partners in the amount that Net Operating
Cash Income distributed to the individual general partners under (2) and
(3) above exceeds 1% of net operating cash income for the period; then, 1%
to the individual general partners and the remainder pro rata to all
partners based upon the relationship of original capital contributions of
all of the partners.
Limited partnership per unit computations are based on the weighted average
number of limited partnership units outstanding during the period.
-25-
<PAGE>
The Partnership adopted SFAS No. 130, Reporting Comprehensive Income, which
requires entities to report changes in equity that result from transactions
and economic events other than those with shareholders. The Partnership had
no other comprehensive income items, accordingly net income and other
comprehensive income are the same.
3. MORTGAGE NOTE PAYABLE
Mortgage note payable at December 31 consists of the following:
1998 1997
Note payable to bank, principal due in monthly
installments of $1,900 plus interest at 3% over
the thirty-day LIBOR rate (8.55% at December 31,
1998) to July 2000 when remaining principal
is due $1,149,701 $1,197,000
========== ==========
The mortgage note is collateralized by a first deed of trust on Oak Grove
Commons which has a net book value of approximately $3,074,000 at December
31, 1998.
Principal payments required during the next five years are as follows:
1999 $ 22,800
2000 1,126,901
----------
Total $1,149,701
==========
In accordance with Statement of Financial Accounting Standards No. 107,
Disclosures about Fair Value of Financial Instruments, the estimated fair
value of mortgage notes payable with maturities greater than one year is
determined based on rates currently available to the Partnership for
mortgage notes with similar terms and remaining maturities as the present
value of expected cash flows. The carrying amount equals its estimated fair
value due to the variable nature of the debt and the terms are consistent
with those the Partnership could currently obtain.
4. RENTAL REVENUES UNDER OPERATING LEASES
Minimum future rental revenues under noncancelable operating leases in
effect as of December 31, 1998 are as follows:
1999 $1,669,000
2000 1,162,000
2001 789,000
2002 422,000
2003 172,000
Thereafter 134,000
----------
Total $4,348,000
==========
In addition, certain lease agreements require tenant participation in
certain operating expenses. The income is recorded in the same period that
the related expense is incurred. Tenant participation in expenses included
in revenues were not significant for the years ended December 31, 1998,
1997 and 1996.
-26-
<PAGE>
5. FEDERAL INCOME TAX STATUS
The general partners believe, based on opinion of legal counsel, that
Nooney Income Fund Ltd., L.P. is considered a partnership for income tax
purposes.
Selling commissions and offering expenses incurred in connection with the
sale of limited partnership units are not deductible for income tax
purposes and therefore increase the partners' bases. Investment properties
are depreciated for income tax purposes using rates which differ from rates
used for computing depreciation for financial statement reporting. Rents
received in advance are includable in taxable income in the year received.
Rent concessions, recognized ratably over lease terms for financial
statement purposes, are includable in taxable income in the year rents are
received. Losses in connection with the writedown of investment property
are not recognized for income tax purposes until the property is disposed.
The comparison of financial statement and income tax reporting is as
follows:
Financial Income
Statement Tax
1998:
Net income (loss) $ 233,141 $ (45,152)
Partners' equity 4,914,656 6,074,685
1997:
Net income (loss) $ 193,131 $ (59,230)
Partners' equity 5,103,333 6,541,529
1996:
Net income (loss) $ 175,285 $ (568,354)
Partners' equity 5,226,492 6,917,049
-27-
<PAGE>
6. BUSINESS SEGMENTS (in thousands)
The Partnership has two reportable operating segments: Leawood Fountain
Plaza and Oak Grove Commons. The Partnership's management evaluates
performance of each segment based on profit or loss from operations before
allocation of property writedowns, general and administrative expenses,
unusual and extraordinary items, and interest. The accounting policies of
the segments are the same as those described in the summary of significant
accounting policies (see Note 2).
(In thousands) 1998 1997 1996
Revenues:
Leawood Fountain Plaza $ 975.0 $ 899.0 $ 907.8
Oak Grove Commons 879.6 886.5 881.5
-------- -------- --------
$1,854.6 $1,785.5 $1,789.3
======== ======== ========
Operating profit:
Leawood Fountain Plaza $ 139.5 $ 63.4 $ 26.8
Oak Grove Commons 134.6 177.3 163.1
-------- -------- --------
$ 274.1 $ 240.7 $ 189.9
======== ======== ========
Capital expenditures:
Leawood Fountain Plaza $ 74.7 $ 90.9 $ 56.8
Oak Grove Commons 196.3 140.3 57.2
-------- -------- --------
$ 271.0 $ 231.2 $ 114.0
======== ======== ========
Depreciation and amortization:
Leawood Fountain Plaza $ 287.6 $ 289.3 $ 296.8
Oak Grove Commons 248.3 256.1 271.9
-------- -------- --------
$ 535.9 $ 545.4 $ 568.7
======== ======== ========
Assets:
Leawood Fountain Plaza $4,674.1 $4,849.0
Oak Grove Commons 3,818.8 3,697.2
-------- --------
$8,429.9 $8,546.2
======== ========
-28-
<PAGE>
Reconciliations of segment data to the Partnership's consolidated data
follow:
(In thousands) 1998 1997 1996
Net income (loss):
Segments $ 274.1 $ 240.7 $ 189.9
Other income (expense) 13.0 8.4 (0.7)
General and administrative expenses (54.0) (55.8) (13.9)
-------- -------- --------
$ 233.1 $ 193.3 $ 175.3
======== ======== ========
Revenues:
Segments $1,854.6 $1,785.5 $1,789.3
Corporate and other (2.8) (13.2) (11.2)
-------- -------- --------
$1,851.8 $1,772.3 $1,778.1
======== ======== ========
Assets:
Segments $8,492.9 $8,546.2
Corporate and other (1,930.3) (1,832.7)
-------- --------
$6,562.6 $6,713.5
======== ========
Depreciation and amortization:
Segments $ 535.9 $ 545.4 $ 568.7
Corporate and other (102.4) (102.4) (102.5)
-------- -------- --------
$ 433.5 $ 443.0 $ 466.2
======== ======== ========
* * * * * *
-29-
<PAGE>
<TABLE>
<CAPTION>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
SCHEDULE - RECONCILIATION OF PARTNERS' EQUITY (DEFICIT)
DECEMBER 31, 1998, 1997 AND 1996
- ------------------------------------------------------------------------------------------------------------------------------------
The reconciliation of partners' equity (deficit) between financial statement and income tax basis is as follows:
December 31, 1998
----------------------------------------------
Limited General
Partners Partners Total
<S> <C> <C> <C>
Balance per statement of partners' equity (deficit) $ 5,006,337 $ (91,681) $ 4,914,656
Add:
Selling commissions and other offering costs not deducted for income
tax purposes 1,822,322 1,822,322
Prepaid rents included in income for income tax purposes 1,421 14 1,435
Writedown of investment property not recognized for income tax purposes 3,050,874 31,126 3,082,000
----------- --------- -----------
9,880,954 (60,541) 9,820,413
Less:
Excess depreciation deducted for income tax purposes 3,661,858 37,347 3,699,205
Insurance premiums deducted for income tax purposes 7,139 72 7,211
Rent concessions not recognized for income tax purposes 38,919 393 39,312
----------- --------- -----------
Balance (deficit) per tax return $ 6,173,038 $ (98,353) $ 6,074,685
=========== ========= ===========
December 31, 1997
----------------------------------------------
Limited General
Partners Partners Total
Balance per statement of partners' equity (deficit) $ 5,192,765 $ (89,432) $ 5,103,333
Add:
Selling commissions and other offering costs not deducted for income
tax purposes 1,822,322 1,822,322
Prepaid rents included in income for income tax purposes (1,087) (11) (1,098)
Writedown of investment property not recognized for income tax purposes 3,050,874 31,126 3,082,000
----------- --------- -----------
10,064,874 (58,317) 10,006,557
Less:
Excess depreciation deducted for income tax purposes 3,388,328 34,559 3,422,887
Insurance premiums deducted for income tax purposes
Rent concessions not recognized for income tax purposes 41,719 422 42,141
----------- --------- -----------
Balance (deficit) per tax return $ 6,634,827 $ (93,298) $ 6,541,529
=========== ========= ===========
<PAGE>
December 31, 1996
----------------------------------------------
Limited General
Partners Partners Total
Balance per statement of partners' equity (deficit) $ 5,314,386 $ (87,894) $ 5,226,492
Add:
Selling commissions and other offering costs not deducted for income
tax purposes 1,822,322 1,822,322
Prepaid rents included in income for income tax purposes (1,087) (11) (1,098)
Writedown of investment property not recognized for income tax purposes 3,050,874 31,126 3,082,000
----------- --------- -----------
10,186,495 (56,779) 10,129,716
Less:
Excess depreciation deducted for income tax purposes 3,123,273 31,854 3,155,127
Insurance premiums deducted for income tax purposes
Rent concessions not recognized for income tax purposes 56,959 581 57,540
----------- --------- -----------
Balance (deficit) per tax return $ 7,006,263 $ (89,214) $ 6,917,049
=========== ========= ===========
-30-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Column A Column B Column C
-------- -------- --------
Initial Cost to Partnership
-----------------------------------------------
Buildings
Encumbrances Land and Improvements Total
<S> <C> <C> <C> <C>
Oak Grove Commons Office/Warehouse Complex
Downers Grove, Illinois $ 1,149,701 $ 936,122 $ 4,282,447 $ 5,218,569
Leawood Fountain Plaza Office Complex
(76% undivided interest),
Leawood, Kansas 1,010,047 6,306,150 7,316,197
----------- ---------- ----------- -----------
Total $ 1,149,701 $1,946,169 $10,588,597 $12,534,766
=========== ========== =========== ===========
Column D Column E
-------- --------
Gross Amount at Which
Costs Carried at Close of Period
Capitalized ------------------------------------------------
Subsequent to Buildings
Acquisition(1) Land and Improvements Total
Oak Grove Commons Office/Warehouse Complex
Downers Grove, Illinois $ 42,964 (1) $ 936,122 $ 4,325,411 $ 5,261,533
Leawood Fountain Plaza Office Complex
(76% undivided interest),
Leawood, Kansas (2,030,188)(2) 1,010,047 4,275,962 5,286,009
----------- ---------- ----------- -----------
Total $(1,987,224) $1,946,169 $ 8,601,373 $10,547,542
=========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Column F Column G Column H Column I
-------- -------- -------- --------
Life on
Which Depreciation
Accumulated Date of Date in Latest Income
Depreciation Construction Acquired Statement is Computed
<S> <C> <C> <C> <C>
Oak Grove Commons Office/Warehouse Complex
Downers Grove, Illinois $2,187,928 1972, 1976 1/24/84 30 years
Leawood Fountain Plaza Office Complex
(76% undivided interest),
Leawood, Kansas 2,822,496 1982, 1983 2/20/85 30 years
----------
Total $5,010,424
==========
<FN>
(1) Amounts shown are net of assets written-off and the following writedowns:
Oak Grove Commons Office/Warehouse Complex $ 693,000
Leawood Fountain Plaza Office Complex 2,389,000
(Continued)
</FN>
-31-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOONEY INCOME FUND LTD., L.P.
(A LIMITED PARTNERSHIP)
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- ---------------------------------------------------------------------------------------------------
1998 1997 1996
<S> <C> <C> <C>
(A) Reconciliation of amounts in Column E:
Balance at beginning of period $10,393,196 $10,251,103 $10,201,163
Add - Cost of improvements 270,969 231,208 113,980
Less - Cost of disposals (116,623) (89,115) (64,040)
----------- ----------- -----------
Balance at end of period $10,547,542 $10,393,196 $10,251,103
=========== =========== ===========
(B) Reconciliation of amounts in Column F:
Balance at beginning of period $ 4,731,841 $ 4,415,352 $ 4,063,922
Add - Provision during the period 395,206 405,604 415,470
Less - Depreciation on disposals (116,623) (89,115) (64,040)
----------- ----------- -----------
Balance at end of period $ 5,010,424 $ 4,731,841 $ 4,415,352
=========== =========== ===========
(C) The aggregate cost of real estate owned
for federal income tax purposes $13,629,542 $13,475,196 $13,333,103
=========== =========== ===========
(Concluded)
-32-
</TABLE>
<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> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 804,739
<SECURITIES> 0
<RECEIVABLES> 97,104
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 914,175
<PP&E> 10,547,542
<DEPRECIATION> 5,010,424
<TOTAL-ASSETS> 6,562,586
<CURRENT-LIABILITIES> 366,652
<BONDS> 1,149,701
<COMMON> 0
0
0
<OTHER-SE> 4,914,656
<TOTAL-LIABILITY-AND-EQUITY> 6,562,586
<SALES> 1,851,792
<TOTAL-REVENUES> 1,940,071
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,549,735
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 95,485
<INCOME-PRETAX> 272,899
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 272,899
<EPS-PRIMARY> 12.72
<EPS-DILUTED> 0
</TABLE>
