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 March 31, 2000
-------------------------------------------------
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) Identification No.)
One Memorial Drive, Suite 1000, 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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PART I
Item 1 - Financial Statements:
- -----------------------------
NOONEY INCOME FUND LTD., L.P.
-----------------------------
(A LIMITED PARTNERSHIP)
-----------------------
BALANCE SHEETS
--------------
March 31, December 31,
2000 1999
ASSETS: (Unaudited) ------------
-----------
Cash and cash equivalents $ 1,476,170 $ 1,237,294
Accounts receivable 190,752 171,996
Prepaid expenses and deposits 7,206 14,948
Investment property, at cost:
Land 1,946,169 1,946,169
Buildings and improvements 8,660,055 8,654,403
----------- -----------
10,606,224 10,600,572
Less accumulated depreciation 5,355,988 5,271,378
----------- -----------
5,250,236 5,329,194
Deferred expenses - at amortized cost 147,991 118,876
----------- -----------
$ 7,072,355 $ 6,872,308
=========== ===========
LIABILITIES AND PARTNERS' EQUITY:
Liabilities:
Accounts payable and accrued expenses $ 87,244 $ 79,070
Accrued real estate taxes 247,822 185,415
Mortgage notes payable 1,119,303 1,125,002
Refundable tenant deposits 155,612 145,711
----------- -----------
1,609,981 1,535,198
Partners' equity 5,462,374 5,337,110
----------- -----------
$ 7,072,355 $ 6,872,308
=========== ===========
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)
-----------
Three Months Ended
------------------------
March 31, March 31,
2000 1999
--------- ---------
REVENUES:
Rental and other income $ 507,173 $ 499,862
Interest 10,778 4
---------- ----------
517,951 499,866
---------- ----------
EXPENSES:
Interest 25,663 23,328
Depreciation and amortization 95,395 101,198
Real estate taxes 62,407 61,605
Property management fees paid to
American Spectrum Midwest 30,949 29,918
Reimbursement to American Spectrum Midwest
for partnership management services
and indirect expenses 6,250 6,250
Repairs & maintenance 24,671 24,813
Professional services 26,781 19,624
Utilities 27,997 27,263
Cleaning 14,515 12,095
Payroll 18,752 16,751
Snow removal 14,083 18,435
Insurance 9,675 12,762
Other operating expenses 35,549 37,689
---------- ----------
392,687 391,731
---------- ----------
NET INCOME $ 125,264 $ 108,135
========== ==========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 6.98 $ 5.93
========== ==========
PARTNERS' EQUITY:
Beginning of period $5,337,110 $4,914,656
Net income 125,264 108,135
---------- ----------
End of period $5,462,374 $5,022,791
========== ==========
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)
-----------
Three Months Ended
-------------------------
March 31, March 31,
2000 1999
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 125,264 $ 108,135
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 95,395 101,198
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (18,756) 4,611
Decrease in prepaid expenses and deposits 7,742 6,258
Increase in deferred assets (39,900) (5,367)
Increase (decrease) in accounts payable and
accrued expenses 8,174 (105,932)
Increase in accrued real estate taxes 62,407 61,604
Increase in refundable tenant deposits 9,901 5,742
----------- -----------
Total adjustments 124,963 68,114
----------- -----------
Net cash provided by operating activities 250,227 176,249
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES -
Net additions to investment property (5,652) (22,733)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES -
Payments on mortgage notes payable (5,699) (7,600)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 238,876 145,916
CASH AND CASH EQUIVALENTS, beginning of period 1,237,294 804,739
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,476,170 $ 950,655
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - Cash paid during period for
interest 25,663 23,328
=========== ===========
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 MONTHS ENDED MARCH 31, 2000 AND 1999
------------------------------------------
NOTE A:
Refer to the Registrant's financial statements for the fiscal year ended
December 31, 1999, 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. 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
March 31, 2000 and for all periods presented have been made. The results of
operations for the three-month period ended March 31, 2000 are not necessarily
indicative of the results which may be expected for the entire year.
NOTE C:
The Registrant's properties are managed by American Spectrum Midwest, formerly
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 months ended March 31,
2000 and 1999 was computed on 15,180 units, the number of units outstanding
during the periods.
NOTE E:
CGS Real Estate Company, Inc. ("CGS"), an affiliate of the corporate general
partner of the Registrant, is in the process of developing a plan pursuant to
which the properties owned by the Registrant would be combined with the
properties of other real estate partnerships managed by CGS and its affiliates.
These limited partnerships own office properties, industrial properties,
shopping centers, and residential apartment properties. It is expected that the
acquiror would in the future qualify as a real estate investment trust. Limited
partners would receive shares of common stock in the acquiror which would be
listed on a national securities exchange or the NASDAQ national market system.
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<PAGE>
NOTE F:
The Registrant has no items of other comprehensive income, accordingly, net
income and other comprehensive income are the same for all periods presented.
NOTE G:
The Partnership has two reportable operating segments: Leawood Fountain Plaza
and Oak Grove Commons. In the first quarter of 1999, the Partnership's
management evaluated 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. In 2000, the
Partnership is evaluating each segment's operations including allocation of
property writedowns.
Three Months Ended
------------------
March 31, March 31,
2000 1999
-------- ---------
Revenues:
Leawood Fountain Plaza (76%) $265,263 $266,984
Oak Grove Commons 252,218 231,658
-------- --------
517,481 498,642
======== ========
Operating Profit:
Leawood Fountain Plaza (76%) $ 68,086 $ 50,258
Oak Grove Commons 82,284 58,854
-------- --------
150,370 109,112
======== ========
Capital Expenditures:
Leawood Fountain Plaza (76%) $ 2,811 $ 13,174
Oak Grove Commons 2,842 9,559
-------- --------
5,653 27,733
======== ========
Depreciation and Amortization:
Leawood Fountain Plaza (76%) $ 46,783 $ 75,653
Oak Grove Commons 48,612 56,910
-------- --------
95,395 132,563
======== ========
Assets:
As of: March 31, 2000 December 31, 1999
-------------- -----------------
Leawood Fountain Plaza (76%) $3,065,925 $2,998,208
Oak Grove Commons 3,597,525 3,498,609
---------- ----------
6,663,450 6,496,817
========== ==========
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<PAGE>
Reconciliation of segment data to the Partnership's consolidated data follow:
Three Months Ended
-------------------------
March 31, March 31,
2000 1999
-------- --------
Revenues:
Segments $ 517,481 $ 498,642
Corporate and other 470 1,224
--------- ---------
517,951 499,866
========= =========
Operating profit:
Segments $ 150,370 $ 109,112
Corporate and other income 470 1,224
General and administrative expenses (25,576) (2,201)
--------- ---------
125,264 108,135
========= =========
Depreciation and Amortization
Segments $ 95,395 $ 132,563
Corporate and other -0- (31,365)
--------- ---------
95,395 101,198
========= =========
Assets:
As of: March 31, 2000 December 31, 1999
-------------- -----------------
Segments $6,663,450 $6,496,817
Corporate and other 408,905 375,491
---------- ----------
7,072,355 6,872,308
========== ==========
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<PAGE>
ITEM 7: MANAGEMENT'S 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 March 31, 2000 is $1,476,170 an increase of $238,876 from
year end December 31, 1999. During the first quarter, net cash provided by
operating activities was $250,227. Cash was used for payments on mortgage notes
payable in the amount of $5,699 and capital additions were made in the amount of
$5,652. The Registrant expects cashflow and cash on hand to adequately fund
anticipated capital expenditures for the remainder of 2000. The anticipated
capital expenditures are as follows:
Leasing Capital Other Capital Total
--------------- ------------- -----
Oak Grove Commons $ 39,063 $ 85,000 $124,063
Leawood Fountain Plaza (76%) 204,641 -0- 204,641
-------- -------- --------
$243,704 $ 85,000 $328,704
======== ======== ========
Oak Grove Commons' and Leawood Fountain Plaza's Leasing Capital includes funds
for tenant alterations and lease commissions for new and renewal tenants. At Oak
Grove Commons, Other Capital includes the restoration of mansard roofs over
entry doors and masonry reconstruction. The Registrant reviews cash reserves on
a regular basis prior to beginning scheduled capital improvements. In the event
there is not adequate funds, the capital improvement will be postponed until
such funds are available.
Results of Operations by Property
- ---------------------------------
The results of operations for the Registrant's properties for the quarters ended
March 31, 2000 and 1999 are detailed in the schedule below. Expenses and
revenues of the Registrant are excluded.
Oak Grove Leawood Fountain
Commons Plaza (76%)
------- -----------
2000
----
Revenues $252,218 $265,263
Expenses 169,934 197,177
-------- --------
Net Income $ 82,284 $ 68,086
======== ========
1999
----
Revenues $231,658 $266,984
Expenses 172,804 216,726
-------- --------
Net Income $ 58,854 $ 50,258
======== ========
-8-
<PAGE>
Revenues for the quarters ended March 31, 2000 and 1999 at Oak Grove Commons
were $252,218 and $231,658, respectively. The increase in revenues of $20,560 is
primarily attributable to increases in rental revenues ($13,652), interest
revenue (5,083), and common area maintenance revenue ($1,793). The increase in
rental revenue is due to an increase in occupancy over that of prior year.
Expenses at Oak Grove Commons remained relatively stable for the quarter ended
March 31, 2000 as compared to the quarter ended March 31, 1999. The decrease of
$2,870 in expenses is primarily attributable to decreases in depreciation and
amoritzation ($8,297) and other operating expenses ($1,011). These decreases
were partially offset by an increase in professional fees ($6,438). The increase
in professional fees is primarily attributable to space planning fees incurred
during the first quarter of 2000.
At Leawood Fountain Plaza, revenues remained consistent with only a $1,721
decrease when comparing the quarter ended 2000 to 1999. The decrease in revenue
can primarily be attributed to decreases in escalation revenue ($2,007) and base
rental revenue ($4,360), partially offset by an increase in interest revenue
($4,382). Expenses decreased $19,549 when comparing 2000 to 1999. The decrease
in expenses is primarily attributable to decreases in depreciation and
amortization ($28,870). These decreases were partially offset by increases in
fire and crime prevention ($6,228) and various other operating epenses ($3,092).
The decrease in depreciation and amortization is primarily due to fully
amortized and depreciated assets.
The occupancy levels at the Registrant's properties during the first quarter of
2000 remained high. These high levels can be attributed to the Registrant's
ability to lease space as it becomes available. The occupancy levels at the
Registrant's properties are listed below.
Occupancy levels as of March 31,
--------------------------------
Property 2000 1999 1998
-------- ---- ---- ----
Oak Grove Commons 100% 97% 89%
Leawood Fountain Plaza (76%) 93% 98% 90%
Occupancy at Oak Grove Commons remained stable at 100% during the first quarter
of 2000. Leasing activity consisted of two new tenants occupying 5,936 square
feet, two tenants renewing their leases for 5,221 square feet and two tenants
vacating 5,936 square feet. Oak Grove Commons has no tenant occupying more than
10% of the available space.
During the first quarter of 2000, occupancy at Leawood Fountain Plaza remained
stable at 93%. Leasing activity consisted of one new tenant occupying 1,946
square feet, two tenants renewing their leases for 2,927 square feet, and one
tenant vacating 1,769 square feet. The property has two major tenants, one of
whom occupies 14% of the available space whose lease expires in October 2001 and
a second major tenant who occupies 10% of the available space whose lease
expires in July 2004.
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
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<PAGE>
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.
Results of Consolidated Operations 2000
- ---------------------------------------
As of March 31, 2000, the Registrant's consolidated revenues are $517,951, an
increase of $18,085 when compared to quarter ended March 31, 1999. This increase
in revenues can primarily be attributed to an increase in base rent at Oak Grove
Commons and increases in interest revenue at both Leawood Fountain Plaza and Oak
Grove Commons.
Consolidated expenses for the quarters ending March 31, 2000 and 1999 are
$392,687 and $391,731 respectively. Although consolidated expenses only
increased $956 when comparing the two three-month periods, the following
fluctuation in expenses should be noted: increases in interest expense ($2,335),
professional services ($7,157), cleaning expenses ($2,420), and payroll
($2,001), partially offset by decreases in depreciation and amortization
($5,803), snow removal ($4,352), and insurance ($3,087). The increase in
professional services is due to space planning fees at Leawood Fountain Plaza,
as mentioned previously in the property comparisons.
Results of Consolidated Operations 1999
- ---------------------------------------
As of March 31, 1999, the Registrant's consolidated revenues are $499,866, an
increase of $79,478 when compared to quarter ended March 31, 1998. This increase
in revenues can be attributable to increases in rental revenue ($80,641) and
escalation revenue ($12,511). The increase in rental revenue is attributable to
the higher occupancy levels at both Oak Grove Commons and Leawood Fountain
Plaza. The increased revenues were offset by decreases in miscellaneous income
($4,449), common area maintenance reimbursements ($3,907), and interest income
($5,318).
Consolidated expenses for the quarters ended March 31, 1999 and 1998 are
$391,731 and $351,913, respectively. This resulted in an increase of $39,818
from that of prior year. The increase in expenses can primarily be attributed to
increases in management fees ($4,737), repairs and maintenance related expenses
($13,350), professional services ($7,923), payroll ($4,976), snow removal
($4,519), insurance ($3,424), and other operating expenses ($14,676). These
increases were partially offset by decreases in interest expense ($4,783),
depreciation and amortization ($6,079), and real estate tax expense ($3,142).
The increase in other operating expenses can be attributed to increases in
promotional, vacancy, fire and crime prevention, and common area related
expenses at both properties. The increase in professional fees is due to annual
audit fees. The increase in repairs and maintenance related expenses was
primarily due to heating, ventilation, and air-conditioning costs as mentioned
in the property comparisons. The increase in snow removal is due to a more
severe winter during the first quarter of 1999 when compared to 1998. Interest
expense decreased due to a lower balance of long term debt outstanding.
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<PAGE>
Inflation
- ---------
The effects of inflation did not have a material impact upon the Registrant's
operation in fiscal 1999 and are not expected to materially affect the
Registrant's operation in 2000.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index on Page 10
(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: May 15, 2000 By: Nooney Income Investments, Inc.
General Partner
By: /s/ Gregory J. Nooney, Jr.
--------------------------
Gregory J. Nooney, Jr. - Director
Chairman of the Board
and Chief Executive Officer
By: /s/ Patricia A. Nooney
----------------------
Patricia A. Nooney - Director
Senior Vice President and Secretary
BEING A MAJORITY OF THE DIRECTORS
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<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)
-12-
<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> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,476,170
<SECURITIES> 0
<RECEIVABLES> 190,752
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,674,128
<PP&E> 10,606,225
<DEPRECIATION> 5,355,988
<TOTAL-ASSETS> 7,072,355
<CURRENT-LIABILITIES> 335,066
<BONDS> 1,119,303
<COMMON> 0
0
0
<OTHER-SE> 5,462,374
<TOTAL-LIABILITY-AND-EQUITY> 7,072,355
<SALES> 507,173
<TOTAL-REVENUES> 517,951
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 367,024
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,663
<INCOME-PRETAX> 125,264
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 125,264
<EPS-BASIC> 6.98
<EPS-DILUTED> 0
</TABLE>
