UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarter ended March 31, 1997 Commission file number 0-14510
CEDAR INCOME FUND, LTD.
(Exact name of registrant as specified in its charter)
Iowa 42-1241468
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4333 Edgewood Road N.E., Cedar Rapids, IA 52499
<Address of principal executive offices> (Zip Code)
Registrant's telephone number, including area code: (319) 398-8975
N/A
(Former name, address and 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
The number of shares of common stock outstanding at May 13, 1997 was 2,245,411.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.
CEDAR INCOME FUND, Ltd.
Balance Sheets
(unaudited)
<TABLE>
<S> <C> <C> <C>
March 31, December 31,
1997 1996 1997
ASSETS
Real estate
Land 4,126,044 4,126,044 4,126,044
Buildings and improvements 14,494,516 14,200,539 14,336,858
18,620,560 18,326,583 18,462,902
Less accumulated depreciation (3,867,371) (3,427,922) (3,755,012)
14,753,189 14,898,661 14,707,890
Mortgage loan receivable 571,678 580,643 573,991
15,324,867 15,479,304 15,281,881
Cash and cash equivalents 529,293 845,020 670,306
Rent and other receivables 102,308 110,962 95,413
Interest receivable 3,930 3,992 3,946
Prepaid expenses 71,915 34,183 84,758
Deferred lease commissions 176,573 119,005 116,148
Taxes held in escrow 30,252 22,556 17,697
16,239,138 16,615,022 16,270,149
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgage loan payable 1,417,885 1,439,547 1,423,492
Accounts payable and accrued 184,006 157,305 103,337
expenses
Due to affiliates 2,976 32,136 36,538
Security deposits 86,415 69,030 66,655
Advance rents 23,110 13,896 15,047
1,714,392 1,711,914 1,645,069
Shareholders' equity
Common stock, $1 par value,
5,020,000 shares authorized 2,245,411 2,245,411 2,245,411
Additional paid-in capital 12,279,335 12,657,697 12,379,669
14,524,746 14,903,108 14,625,080
16,239,138 16,615,022 16,270,149
</TABLE>
CEDAR INCOME FUND, LTD.
Statements of Operations
(unaudited)
<TABLE>
<S> <C> <C>
Three Months Ended
March 31,
1997 1996
REVENUE
Rents 539,619 559,047
Interest 21,296 23,245
560,915 582,292
EXPENSES
Property expenses:
Real estate taxes 64,423 62,723
Wages and salaries 5,148 5,356
Repairs and maintenance 75,535 56,457
Utilities 31,811 34,222
Management fee 26,981 27,953
Insurance 4,913 4,311
Other 25,103 23,804
Property expenses, excluding depreciation 233,914 214,826
Depreciation 112,359 109,649
Total property expenses 346,273 324,475
Interest 34,237 34,736
Administrative fees 25,353 24,975
Directors' fees and expenses 11,865 11,144
Other administrative 18,980 20,941
436,708 416,271
Net earnings 124,207 166,021
Net earnings per share .06 .07
Dividends to shareholders 224,541 224,541
Dividends to shareholders per share .10 .10
Average number of shares outstanding 2,245,411 2,245,411
</TABLE>
CEDAR INCOME FUND, Ltd.
Statements of Cash Flows
(unaudited)
<TABLE>
<S> <C> <C>
Three Months Ended
March 31,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Rents collected 540,787 533,684
Interest received 21,312 23,260
Payments for operating expenses (304,059) (224,887)
Interest paid (33,320) (33,819)
Net cash provided by operating activities 224,720 298,238
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (157,658) -
Principal portion of scheduled
mortgage loan collections 2,313 2,126
Security deposits collected, net 19,760 2,160
Net cash provided (used) by investing activities (135,585) 4,286
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal portion of scheduled
mortgage loan payments (5,607) (5,107)
Dividends paid to shareholders (224,541) (224,541)
Net cash used by financing activities (230,148) (229,648)
Net increase (decrease) in cash and cash equivalents. (141,013) 72,876
Cash and cash equivalents at beginning of period 670,306 772,144
Cash and cash equivalents at end of period 529,293 845,020
RECONCILIATION OF NET EARNINGS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Net earnings 124,207 166,021
Add (deduct) reconciling adjustments:
Depreciation 112,359 109,649
Amortization 916 917
Increase in rent and other receivables (19,450) (49,725)
Decrease in interest receivable 16 15
Decrease in prepaid expenses 11,927 9,175
Increase in deferred lease commissions (60,425) (4,198)
Increase in operating accounts payable,
accrued expenses and due to affiliates 47,107 61,007
Increase in advance rents 8,063 5,377
Net cash provided by operating activities 224,720 298,238
</TABLE>
NOTES TO FINANCIAL STATEMENTS
Note 1: The unaudited interim financial statements are
prepared in accordance with generally accepted accounting
principles and include all adjustments of a normal recurring
nature necessary for a fair presentation of the financial
position and quarterly results. Interim reports should be
read in conjunction with the audited financial statements
and related notes included in the 1996 Annual Report.
Note 2: Shareholders' equity, December 31, 1996 14,625,080
Net earnings 124,207
Dividends to shareholders (224,541)
Shareholders' equity, March 31, 1997 14,524,746
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
We are pleased to present the first quarter report for Cedar
Income Fund, Ltd. Net earnings for the three months ended
March 31, 1997 were $124,207 ($.06 per share) compared to
$166,021 ($.07 per share) for the same period in 1996.
Funds from operations (earnings from operations plus
depreciation) were $236,566 for the first three months of
1997 compared to $275,670 for the same period a year ago.
Net earnings and funds from operations were lower in the
first quarter of 1997, compared to 1996, primarily due to a
slight decrease in rental income and an increase in repairs
and maintenance. The Company's real estate portfolio had an
overall occupancy rate of 99% at March 31, 1997.
Rental income for the first quarter was $539,619 compared to
$559,047 for the first quarter in 1996. Rental income at
Southpoint Parkway Center in Jacksonville, Florida decreased
by $48,000 due to tenants who contributed rents in the first
quarter of 1996 but vacated their space later in the year.
During the first quarter of 1997, the Company was successful
in leasing this space to an existing tenant who will be
paying rent on the entire space beginning in May 1997. This
decrease was offset by increased rental income at the
remaining properties. Rents increased by $21,000 at
Corporate Center East in Bloomington, Illinois as a result
of the Company's success in leasing the 20,400 square feet
of space vacated by Hewlett Packard at the end of 1995.
Rental income at Broadbent Business Center in Salt Lake
City, Utah and Germantown Square in Louisville, Kentucky
increased slightly over the same period a year ago.
Total property expenses, excluding depreciation, increased
from 38% of rental income in 1996 to 43% in 1997. Repairs
and maintenance were higher in 1997 primarily as a result of
tenant remodeling expenses incurred at Broadbent Business
Center.
As mentioned above, the Company has been successful in
locating replacement tenants for the vacant spaces that
existed at Corporate Center East and Southpoint. As a
result of releasing this space, the Company incurred capital
expenditures of $158,000 and lease commissions of $39,000
through March 31, 1997. In order to complete the projects
in progress, the Company expects to incur an additional
$143,000 in capital expenditures and $21,000 in lease
commissions during 1997.
Capital resources of the Company consist of equity in real
estate investments and a mortgage loan receivable. The
Company maintains its real estate in good condition and
provides adequate insurance coverage. The Company's
liquidity at March 31, 1997 is represented by cash and cash
equivalents, a mortgage loan participation, and cash flow
from operating activities. This liquidity is considered
sufficient to meet current obligations.
The Board of Directors declared a dividend of $.10 per
share, payable May 19, 1997 to shareholders of record May 9,
1997. The Board of Directors will continue to consider
leasing prospects, operating results and the financial
condition of the Company in determining future dividends.
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders.
At the Company's annual meeting of shareholders on April 28,
1997, 45% of the Company's outstanding shares were
represented (in person or by proxy). Four Directors were
elected to the Board of Directors, with each receiving at
least 98% of the vote for the shares represented. The vote
tabulation for each Director was as follows:
Director Votes For Votes Withheld
Patrick E. Falconio 1,014,203 13,466
Edwin L. Ingraham 1,014,450 13,219
Alex A. Meyer 1,014,816 12,853
James L. Roberts 1,012,339 15,330
SIGNATURE
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.
CEDAR INCOME FUND, LTD.
/s/ Alan F. Fletcher
Alan F. Fletcher
Vice President and Treasurer
(principal financial officer)
/s/ Roger L. Schulz
Roger L. Schulz
Controller
(principal accounting officer)
Dated: May 13, 1997
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<NAME> CEDAR INCOME FUND, LTD.
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<PERIOD-END> MAR-31-1997
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