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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 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: 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)
(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 May 8, 2000
Page 1 of 9 sequentially numbered pages
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MARKETPLACE INCOME PROPERTIES
A NORTH CAROLINA LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
March 31,
2000 December 31,
(unaudited) 1999
-------------------- -------------------
<S> <C> <C>
ASSETS
Rental Properties (at cost):
Land and improvements $1,639,540 $1,639,540
Buildings 7,253,003 7,253,003
Furniture and equipment 293,141 293,141
-------------------- -------------------
9,185,684 9,185,684
Accumulated Depreciation (3,535,684) (3,535,684)
-------------------- -------------------
5,650,000 5,650,000
Cash and cash equivalents 453,728 408,231
Restricted Cash 127,994 92,126
Accounts Receivable 24,846 26,398
Other 1,389 2,156
-------------------- -------------------
6,257,957 6,178,911
==================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Debt 5,229,552 5,243,891
Other liabilities 113,207 122,597
-------------------- -------------------
5,342,760 5,366,488
Partners' capital:
General partners 36,601 35,573
Limited partners 878,597 776,850
-------------------- -------------------
$6,257,957 $6,178,911
==================== ===================
</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 MONTHS ENDED MARCH 31, 2000 AND 1999
(unaudited)
<TABLE>
<CAPTION>
Three Three
Months Months
Ended Ended
March 31, March 31,
2000 1999
---------------- ----------------
<S> <C> <C>
Income:
Rent $288,640 $387,336
Interest and other 75,817 32,361
---------------- ----------------
364,457 419,697
Expenses:
Interest 120,228 117,342
Operations and maintenance 122,178 139,526
Professional fees 10,048 16,829
Legal Fees 296 684
Administrative and Other 8,933 10,866
---------------- ----------------
261,682 285,247
Net income $102,775 $134,450
================ ================
Net income per limited partner unit $33.92 $44.37
================ ================
Limited Partner Units outstanding-wgtd. avg. 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 THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(unaudited)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
-------------- ------------------- ------------------
<S> <C> <C> <C>
Balance, December 31, 1998 $37,918 $1,459,009 $1,496,927
Net income for the period 1,345 133,106 $134,450
-------------- ------------------- ------------------
Balance, March 31, 1999 $39,263 $1,592,115 $1,631,377
============== =================== ==================
Balance, December 31, 1999 $35,573 $776,850 $812,423
Net income for the period 1,028 101,747 102,775
-------------- ------------------- ------------------
Balance, March 31, 2000 $36,601 $878,597 $915,198
============== =================== ==================
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
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MARKETPLACE INCOME PROPERTIES
A NORTH CAROLINA LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
Increase (Decrease) in Cash and Cash Equivalents
(unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 2000 March 31, 1999
--------------------- ---------------------
<S> <C> <C>
Net Income $102,775 $134,450
--------------------- ---------------------
Adjustments to reconcile net income to
net cash provided by operations:
Decrease (Increase) in accounts receivable 1,552 (33,133)
Decrease (Increase) in other assets (35,101) (49,841)
Increase (Decrease) in accrued liabilities (9,390) (1,208)
--------------------- ---------------------
Total adjustments (42,939) (84,182)
--------------------- ---------------------
Net cash provided by operating activities 59,836 50,268
Cash flows from financing activities:
Repayments of debt (14,339) (17,223)
Decrease (Increase) in deferred loan costs 0 8,337
--------------------- ---------------------
Net cash used by financing activities (14,339) (8,886)
Net decrease in cash and cash equivalents 45,497 41,381
Cash and cash equivalents at beginning of period 408,231 728,381
--------------------- ---------------------
Cash and cash equivalents at end of period $453,728 $769,762
===================== =====================
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
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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 three month period ended March 31, 2000. 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 1999 Annual Report filed with the
Securities and Exchange Commission on Form 10-K. The results of operations for
the three month period ended March 31, 2000, 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
May 8, 2000, was 788. 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
Amounts earned by the general partner for the reimbursement of expenses of
operating the Partnership were $6,000 for both three month periods ended March
31, 1999 and 2000.
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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 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. Town & Country Convalescent Center in Tampa, FL, was sold in July
1996.
In 1998, during its annual planning and budgeting process, the general partner
determined that primarily due to increased competition, a decline in future
expected operating income resulted in anticipated future cash flows below the
carrying value of the property. Accordingly, the general partner adjusted the
carrying value of the property to its estimated realizable value resulting in a
non-cash impairment loss of $1,756,000. During 1999, the general partner
determined an additional write-down of approximately $420,000 was necessary to
adjust the carrying value of the property to its estimated realizable value.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents totaled $453,728 at March 31, 2000, up from $408,231
at March 31, 1999. The Registrant will hold these funds as reserves for the cost
of operating, repairing and maintaining the property.
RESULTS OF OPERATIONS
The Partnership reported net income of $97,575 for the three months ended March
31, 2000, compared to income of $134,450 for the same period in 1999. Rental
income decreased from $387,336 for the three months ended March 31, 1999, to
$288,640 for the three months ended March 31, 2000. This decrease is from
increased vacancy resulting in lower base rental income and lower tenant sales
that reduced receipts of percentage rent.
For the three months ended March 31, 2000, interest and other income increased
to $70,617 from $32,361 for the same period in 1999. This increase reflects
interest earned on higher cash reserves and refund of property tax escrows held
in excess by the mortgage lender.
Interest expense for the three months ended March 31, 1999, was $117,342
compared with $120,228 for the same period of 2000. Operations and maintenance
expense decreased to $122,178 for the three months ended March 31, 2000, from
$139,526 for the same period in 1999. This decrease reflects lower operating and
repair costs for the Mall. Professional fees decreased to $10,048 for the three
months ended March 31, 2000, down from $16,829 for the same 1999 period. Legal
fees decreased to $296 for the three months ended March 31, 2000, compared to
$684 for the same period in 1999. Administrative and other expenses decreased to
$8,933 for the current quarter from $10,866 for the same period in 1999. These
decreases reflect lower charges incurred to operate the one remaining property.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
7
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None.
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 March 31, 2000.
8
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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: MAY 8, 2000
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF MARKETPLACE INCOME PROPERTIES L.P. FOR THE THREE MONTHS
ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 453,728
<SECURITIES> 0
<RECEIVABLES> 24,846
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5,650,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,257,957
<CURRENT-LIABILITIES> 113,207
<BONDS> 5,229,552
0
0
<COMMON> 0
<OTHER-SE> 95,198
<TOTAL-LIABILITY-AND-EQUITY> 6,257,957
<SALES> 0
<TOTAL-REVENUES> 364,457
<CGS> 0
<TOTAL-COSTS> 122,178
<OTHER-EXPENSES> 19,277
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 120,228
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 102,775
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
