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Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 33-1889
Marketplace Income Properties, A North Carolina Limited Partnership
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
North Carolina 56-1493986
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(State of other jurisdiction of (I.R.S. Employer
or organization) Identification No.)
IJL Financial Center
P.O. Box 1012
Charlotte, NC 28201-1012
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(Address of principal executive offices)
(Zip Code)
704/379-9164
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(Registrant's telephone number, including area code)
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(Former name, former address and fiscal year ended,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 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 CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
3,000 limited partnership units outstanding as of August 12, 1998
Page 1 of 9 sequentially numbered pages
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MARKETPLACE INCOME PROPERTIES
A NORTH CAROLINA LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1998 AND DECEMBER 31, 1997
<TABLE>
<CAPTION>
June 30,
1998 December 31,
(unaudited) 1997
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<S> <C> <C>
ASSETS
Rental Properties (at cost):
Land and improvements $ 1,639,540 $ 1,639,540
Buildings 9,324,422 9,311,450
Furniture and equipment 293,140 293,141
------------ ------------
11,257,102 11,244,131
Accumulated depreciation (3,535,524) (3,535,684)
------------ ------------
7,721,578 7,708,447
Cash and cash equivalents 526,592 560,286
Restricted Cash 77,605 77,620
Accounts Receivable 11,857 5,651
Net Deferred Loan and Acquisition Costs 230,456 173,019
Other 250,195 149,650
------------ ------------
8,818,283 8,674,673
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Debt 5,330,644 5,359,624
Payables to general partners and affiliates 170,537 170,537
Other liabilities 110,108 132,652
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5,611,289 5,662,813
Partners' capital:
General partners 55,018 53,067
Limited partners 3,151,976 2,958,793
------------ ------------
$ 8,818,283 $ 8,674,673
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements
2
<PAGE> 3
MARKETPLACE INCOME PROPERTIES
A NORTH CAROLINA LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(unaudited)
<TABLE>
<CAPTION>
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
-------- -------- -------- ----------
<S> <C> <C> <C> <C>
Income:
Rent $407,521 $678,367 $819,804 $1,298,977
Interest and other 42,395 2,753 63,422 9,628
-------- -------- -------- ----------
449,916 681,120 883,226 1,308,605
Expenses:
Interest 118,487 189,642 240,150 402,514
Amortization 0 9,280 0 18,560
Operations and maintenance 149,813 228,302 299,100 407,303
Professional fees 3,881 731 23,308 23,226
Legal Fees 2,687 6,471 4,447 9,682
Administrative and Other 13,258 79,826 121,087 104,361
-------- -------- -------- ----------
288,126 514,252 688,092 965,646
Net income $161,790 $166,868 $195,134 $ 342,959
======== ======== ======== ==========
Net income per limited partner unit $ 53.39 $ 55.07 $ 64.39 $ 113.18
======== ======== ======== ==========
Limited Partner Units outstanding-wgtd. avg. 3,000 3,000 3,000 3,000
======== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements
3
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MARKETPLACE INCOME PROPERTIES
A NORTH CAROLINA LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS CAPITAL
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(unaudited)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
------- ---------- ----------
<S> <C> <C> <C>
Balance, December 31, 1996 $71,967 $4,829,935 $4,901,902
Net income for the period 3,430 339,529 342,959
------- ---------- ----------
Balance, June 30, 1997 $75,397 $5,169,464 $5,244,861
======= ========== ==========
Balance, December 31, 1997 $53,067 $2,958,793 $3,011,860
Net income for the period 1,951 193,183 195,134
------- ---------- ----------
Balance, June 30, 1998 $55,018 $3,151,976 $3,206,994
======= ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements
4
<PAGE> 5
MARKETPLACE INCOME PROPERTIES
A NORTH CAROLINA LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
Increase (Decrease) in Cash and Cash Equivalents
(unaudited)
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
June 30, 1998 June 30, 1997
------------- -------------
<S> <C> <C>
Net Income $ 195,134 $ 342,959
--------- ---------
Adjustments to reconcile net income to
net cash provided by operations:
Decrease (Increase) in accounts receivable (6,206) (8,363)
Amortization 0 18,560
Decrease (Increase) in other assets (100,530) (135,651)
Increase (Decrease) in accrued liabilities (22,544) 97,513
--------- ---------
Total adjustments (129,280) (27,941)
--------- ---------
Net cash Provided by (Used for) operating activities 65,854 315,018
Cash flows from investing activities:
Improvements in rental properties (13,131) (62,569)
--------- ---------
Net cash used by investing activities (13,131) (62,569)
Cash flows from financing activities:
Increase (Decrease) in Note Payable (28,980) (143,819)
Decrease (Increase) in deferred loan costs (57,437) (141,852)
--------- ---------
Net cash used by financing activities (86,417) (285,671)
Net decrease in cash and cash equivalents (33,694) (33,222)
Cash and cash equivalents at beginning of period 560,286 267,027
--------- ---------
Cash and cash equivalents at end of period $ 526,592 $ 233,805
========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements
5
<PAGE> 6
MARKETPLACE INCOME PROPERTIES,
A NORTH CAROLINA LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of Marketplace Income Properties, A North
Carolina Limited Partnership (the "Partnership") included herein have been
prepared for submission to the Securities and Exchange Commission on Form 10-Q.
The consolidated financial statements were prepared by the general partner
without audit, and include all adjustments which are, in the opinion of the
general partner, necessary for a fair presentation of the results of operations
for the six month period ended June 30, 1998. The consolidated financial
statements were prepared in accordance with generally accepted accounting
principles, however, certain information and note disclosures normally included
have been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. The consolidated financial statements should
be read in conjunction with the Partnership's 1997 Annual Report filed with the
Securities and Exchange Commission on Form 10-K. The results of operations for
the six month period ended June 30, 1998, are not necessarily indicative of the
results for a full year.
1. Partnership Matters And Significant Accounting Policies
On November 27, 1985, the Partnership was formed under the North Carolina
Uniform Limited Partnership Act. The Partnership acquired property on January
30, 1986, and will continue until December 31, 2015, unless sooner terminated
under the provisions of the Partnership Agreement. The Partnership has issued
3,000 limited partner units at $5,000 per unit. The total number of investors at
August 12, 1998, was 781. ISC Realty Corporation is the sole general partner.
Distributions and Allocations of Income and Losses - Profits, gains and losses
of the Partnership are allocated between general and limited partners, as
provided in the Partnership Agreement. The net cash flow from operations in each
year is to be distributed 99% to limited partners and 1% to the general partner.
Certain items in the financial statements for prior periods have been
reclassified to conform to the format presented for these statements.
2. Related Party Transactions
The amount earned by the general partner for the reimbursement of expenses of
operating the Partnership was $10,417 for the six months ended June 30, 1998,
and $24,996 for the six months ended June 30, 1997.
6
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PART 1. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Partnership Matters
The property investment portfolio consists only of the Marketplace Mall in
Winston-Salem, NC. Mt. Pilot Shopping Center in Pilot Mountain, NC, and Amelia
Plaza in Fernandina Beach, FL were sold in 1997. Meadowbrook Manor in Siler
City, NC was sold in June, 1994, and Town & Country Convalescent Center in
Tampa, FL was sold in July, 1996. The general partner is actively marketing the
Marketplace Mall for sale. No agreement had been reached as of the date of this
report
Liquidity and Capital Resources
Cash and cash equivalents totaled $526,592 at June 30, 1998, down from $560,286
at December 31, 1997.
The Registrant feels that these funds should be maintained as a reserve for the
cost of operating and maintaining the property.
Results of Operations
Six months ended June 30, 1998, as compared to the six months ended June 30,
1997
The Partnership had net income of $195,134 for the six months ended June 30,
1998, compared to income of $342,959 for the same period in 1997. Rental income
decreased from $1,298,977 for the six months ended June 30, 1997, to $819,804
for the six months ended June 30, 1998. The decrease is the result of the lost
rental income associated with the sale of Amelia Plaza and Mt. Pilot.
For the six months ended June 30, 1998, interest and other income increased to
$63,422 from $9,628, as a result of higher cash reserves earning interest,
reimbursement of $12,663 utility deposits on Amelia Plaza and a refund of
$35,229 property tax refund overpayment for the Mall.
Interest expense for the six months ended June 30, 1998, was $240,150 compared
with $402,514 for the same period of 1997. The decrease in 1998 as compared to
1997 was primarily due to the retirement of debt on Amelia Plaza upon the sale
of the property.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
7
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Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submissions of Matter to a vote of Securities Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
EX-27 FINANCIAL DATA SCHEDULE (FOR SEC USE ONLY)
(b) Reports on Form 8-K
No reports on Form 8-K were required to be filed
during the three months ended June 30, 1998.
8
<PAGE> 9
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.
MARKETPLACE INCOME PROPERTIES
A NORTH CAROLINA LIMITED PARTNERSHIP
(Registrant)
BY: /s/ J. Christopher Boone
----------------------------
J. Christopher Boone
ISC Realty Corporation,
General Partner and Principal Executive
Officer, Principal Financial Officer of the
Registrant
DATE: August 12, 1998
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF MARKETPLACE INCOME PROPERTIES, A NC LIMITED PARTNERSHIP FOR THE
SIX MONTHS ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 526,592
<SECURITIES> 0
<RECEIVABLES> 11,857
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 616,054
<PP&E> 11,257,102
<DEPRECIATION> (3,535,524)
<TOTAL-ASSETS> 8,818,283
<CURRENT-LIABILITIES> 110,108
<BONDS> 5,330,644
0
0
<COMMON> 0
<OTHER-SE> 3,206,994
<TOTAL-LIABILITY-AND-EQUITY> 8,818,283
<SALES> 0
<TOTAL-REVENUES> 883,226
<CGS> 0
<TOTAL-COSTS> 299,100
<OTHER-EXPENSES> 148,842
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 240,150
<INCOME-PRETAX> 195,134
<INCOME-TAX> 0
<INCOME-CONTINUING> 195,134
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 195,134
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
