Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Carlyle Income Plus, Ltd.
Commission File No. 000-16975
Form 10-Q
Gentlemen:
Transmitted, for the above-mentioned registrant, is the
electronically filed executed copy of registrant's current report
on Form 10-Q for the quarter ended June 30, 1997.
Thank you.
Very truly yours,
CARLYLE INCOME PLUS, LTD.
By: JMB Realty Corporation
Corporate General Partner
By:
Gailen J. Hull
Senior Vice President and
Principal Accounting Officer
GJH:et
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Act of 1934
For the quarter Commission file
ended June 30, 1997 number 000-16975
CARLYLE INCOME PLUS, LTD.
(Exact name of registrant as specified in its charter)
Illinois 36-3439532
(State of organization) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-915-1987
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- ----------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(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 .
----- -----
1<PAGE>
TABLE OF CONTENTS
Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of 17
Financial Condition and Results of
Operations. . . . . . . . . . . . . . . . .
PART II OTHER INFORMATION
Item 5. Other Information . . . . . . . . . . . . . 20
Item 6. Exhibits and Reports on Form 8-K . . . . . 21
2<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
JUNE 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
----------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . $ 4,392,210 14,972,580
Rents and other receivables (net of allowance
for doubtful accounts of $163,301 in 1997 and
$88,784 in 1996) . . . . . . . . . . . . . . . . . . . 177,826 187,830
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 61,528 41,126
----------- -----------
Total current assets . . . . . . . . . . . . . . 4,631,564 15,201,536
----------- -----------
Investment properties held for sale or
disposition . . . . . . . . . . . . . . . . . . . . . . . 9,066,506 22,320,312
----------- -----------
3<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
JUNE 30, DECEMBER 31,
1997 1996
---------- ----------
Investments in unconsolidated ventures, at
equity. . . . . . . . . . . . . . . . . . . . . . . . . . 4,318,134 4,177,052
Deferred expenses . . . . . . . . . . . . . . . . . . . . 57,511 57,769
Accrued rents receivable . . . . . . . . . . . . . . . . . 87,108 187,082
----------- -----------
$ 18,160,823 41,943,751
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
------------------------------------------------------
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . .$ 171,372 431,147
Amounts due to affiliates . . . . . . . . . . . . . . . 34,477 16,714
Unearned rents . . . . . . . . . . . . . . . . . . . . . 25,742 21,276
Accrued real estate taxes. . . . . . . . . . . . . . . . 107,107 --
---------- -----------
Total current liabilities. . . . . . . . . . . . 338,698 469,137
Tenant security deposits . . . . . . . . . . . . . . . . . 101,610 180,052
---------- -----------
Total liabilities. . . . . . . . . . . . . . . . 440,308 649,189
---------- -----------
Commitments and contingencies
Partners' capital accounts (deficits):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . 25,000 25,000
Cumulative net earnings (losses) . . . . . . . . . . . 1,922,938 1,885,545
Cumulative cash distributions. . . . . . . . . . . . . (1,947,938) (1,910,545)
---------- -----------
-- --
---------- -----------
4<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
JUNE 30, DECEMBER 31,
1997 1996
---------- -----------
Limited partners (88,808.058 Interests):
Capital contributions, net of offering costs . . . . . 77,762,167 77,762,167
Cumulative net earnings (losses) . . . . . . . . . . . 9,775,795 9,993,323
Cumulative cash distributions. . . . . . . . . . . . . (69,817,447) (46,460,928)
---------- -----------
17,720,515 41,294,562
---------- -----------
Total partners' capital accounts . . . . . . . . 17,720,515 41,294,562
---------- -----------
$ 18,160,823 41,943,751
========== ===========
<FN>
</TABLE> See accompanying notes to financial statements.
5<PAGE>
<TABLE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- --------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Income
Rental income. . . . . . . . $ 498,444 1,498,544 1,157,852 3,169,454
Interest income. . . . . . . 132,114 41,491 344,274 94,838
---------- ---------- ---------- ----------
630,558 1,540,035 1,502,126 3,264,292
---------- ---------- ---------- ----------
Expenses:
Depreciation . . . . . . . . -- 97,715 -- 376,248
Property operating
expenses. . . . . . . . . . 305,236 618,015 591,006 1,334,851
Professional services. . . . 60,241 17,880 102,511 53,625
Amortization of
deferred expenses . . . . . 6,645 8,774 11,667 16,141
General and
administrative. . . . . . . 56,510 86,348 118,990 183,351
Provision for value impairment -- -- 2,800,000 --
---------- ---------- ---------- ----------
428,632 828,732 3,624,174 1,964,216
---------- ---------- ---------- ----------
Operating
earnings (loss). . 201,926 711,303 (2,122,048) 1,300,076
6<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS-CONTINUED
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- ---------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Partnership's share
of operations of
unconsolidated
ventures . . . . . . . . . . 52,481 201,378 141,082 323,400
---------- ---------- ---------- ----------
Net operating earnings
(loss). . . . . . . 254,407 912,681 (1,980,966) 1,623,476
Gains on sales of investment
properties. . . . . . . . . . -- -- 1,800,831 --
---------- ---------- ---------- ----------
Net earnings (loss). $ 254,407 912,681 (180,135) 1,623,476
========== ========== ========== ==========
Net earnings (loss) per limited
partnership interest:
Net operating earnings
(loss). . . . . . . $ 2.44 9.77 (21.47) 17.37
Gains on sales of
investment properties -- -- 19.02 --
---------- ---------- ---------- ----------
7<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS-CONCLUDED
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- -------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net earnings (loss). $ 2.44 9.77 (2.45) 17.37
========== ========== ========== ==========
Cash distributions
per limited partnership
interest. . . . . . $ 123.00 20.00 263.00 20.00
========== ========== ========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
8<PAGE>
<TABLE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . $ (180,135) 1,623,476
Items not requiring (providing) cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . -- 376,248
Amortization of deferred expenses . . . . . . . . . 11,667 16,141
Provision for value impairment. . . . . . . . . . . 2,800,000 --
Partnership's share of operations of unconsolidated
ventures, net of distributions . . . . . . . . . . (141,082) (323,400)
Gains on sales of investment properties . . . . . . (1,800,831) --
Changes in:
Rents and other receivables . . . . . . . . . . . . . 10,004 203,970
Prepaid expenses. . . . . . . . . . . . . . . . . . . (20,402) (73,176)
Accrued rents receivable. . . . . . . . . . . . . . . 17,864 (10,480)
Accounts payable. . . . . . . . . . . . . . . . . . . (259,775) 157,307
Amounts due to affiliates . . . . . . . . . . . . . . 17,763 4,363
Unearned rents. . . . . . . . . . . . . . . . . . . . 4,466 (26,347)
Accrued real estate taxes . . . . . . . . . . . . . . 107,107 142,207
Tenant security deposits. . . . . . . . . . . . . . . (78,442) (5,087)
------------ ------------
Net cash provided by (used in) operating
activities. . . . . . . . . . . . . . . . . 488,204 2,085,222
------------ ------------
Cash flows from investing activities:
Proceeds from sales of investment properties,
net of closing costs. . . . . . . . . . . . . . . . 12,351,581 --
Additions to investment properties . . . . . . . . . (14,834) (136,534)
Payment of deferred expenses . . . . . . . . . . . . (11,409) (12,146)
------------ -----------
9<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS - CONCLUDED
1997 1996
----------- -----------
Net cash provided by (used in)
investing activities . . . . . . . . . . . 12,325,338 (148,680)
----------- -----------
Cash flows from financing activities:
Distributions to limited partners. . . . . . . . . . (23,356,519) (1,776,161)
Distributions to general partners. . . . . . . . . . (37,393) (93,482)
----------- -----------
Net cash provided by (used in)
financing activities . . . . . . . . . . . (23,393,912) (1,869,643)
----------- -----------
Net increase (decrease) in cash and
cash equivalents . . . . . . . . . . . . . $ (10,580,370) 66,899
Cash and cash equivalents, beginning of year 14,972,580 2,778,447
----------- -----------
Cash and cash equivalents, end of period . . $ 4,392,210 2,845,346
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . $ -- --
=========== ===========
Non-cash investing and financing activities . . . . $ -- --
=========== ===========
<FN>
See accompanying notes to financial statements.
10<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the
Partnership's audited financial statements for the year ended
December 31, 1996 which are included in the Partnership's 1996
Annual Report, as certain footnote disclosures which would
substantially duplicate those contained in such audited
financial statements have been omitted from this report.
The preparation of financial statements in accordance with
GAAP requires the Partnership to make estimates and assumptions
that affect the reported or disclosed amount 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 these estimates.
The Partnership adopted Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of" ("SFAS 121")
as required in the first quarter of 1996. The Partnership's
policy is to consider a property to be held for sale when the
Partnership has committed to a plan to sell such property and
active marketing activity has commenced or is expected to
commence in the near term. The Partnership has committed to
such a plan for all of its remaining real estate investments.
In accordance with SFAS 121, any properties identified as "held
for sale or disposition" are no longer depreciated. The results
of operations for properties classified as held for sale or sold
during the past two years were $(2,192,421) and $1,451,689,
respectively, for the six months ended June 30, 1997 and 1996.
In addition, the accompanying financial statements include
$141,082 and $323,400, respectively, of the Partnership's share
of total operations of $284,529 and $909,683 for the six months
ended June 30, 1997 and 1996 of unconsolidated properties
classified as held for sale or sold in the past two years.
During the second quarter of 1997, Statements of Financial
Accounting Standards No. 128 ("Earnings per Share") and No. 129
("Disclosure of Information about Capital Structure") were
issued. As the Partnership's capital structure only has general
and limited partnership interests the Partnership does not
expect any significant impact on its consolidated financial
statements upon adoption of these standards when required at the
end of 1997.
Certain amounts in the 1996 financial statements have been
reclassified to conform with the 1997 presentation.
11<PAGE>
</TABLE>
<TABLE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted to engage in various
transactions involving the Corporate General Partner and its affiliates including the reimbursement
for salaries and salary-related expenses of its employees, certain of its officers, and other direct
expenses relating to the administration of the Partnership and the operation of the Partnership's
investments. Fees, commissions and other expenses required to be paid by the Partnership to the
General Partners and their affiliates as of June 30, 1997 and for the six months ended June 30, 1997
and 1996 are as follows:
UNPAID AT
JUNE 30,
1997 1996 1997
--------- ---------- ------------
<S> <C> <C> <C>
Property management and
leasing fees $ 21,527 48,485 838
Insurance commissions 8,181 11,812 --
Reimbursement (at cost)
for salary and salary-related
expenses related to the on-site
and other costs for the
Partnership and its investment
properties 22,579 17,955 33,639
-------- ---------------- ---------
$ 52,287 78,252 34,477
======== ================ ================
<FN>
All such amounts payable to the General Partners and their affiliates do not bear interest and
are expected to be paid in future periods.
12<PAGE>
</TABLE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Sunrise Town Center
Occupancy at the property is 65% at June 30, 1997, primarily
as a result of the vacating in March 1997 of a tenant which
occupied 24,115 square feet (approximately 19% of the
Partnership's owned net rentable area at the property). This
tenant's lease is scheduled to expire in March 2010. The
Partnership is currently reviewing its legal remedies with
respect to this tenant's lease and to the approximately $92,000
in arreages due from this tenant as of the date of this report.
In addition, tenant leases representing approximately 17% of the
leasable space at the property are scheduled to expire in 1999,
not all of which are expected to be renewed.
Based upon local market conditions and uncertainty
concerning the ability to recover the carrying value of the
property through future operations and sale, the Partnership, as
a matter of prudent accounting practice, recorded provisions for
value impairment totaling $2,050,000 for this property in 1996.
An additional provision of $2,800,000 was recorded as of March
31, 1997. Such provisions were recorded to reflect the then
estimated fair values of the property based upon an analysis of
discounted estimated future cash flows over the projected
holding periods.
In July 1997, a potential purchaser signed a letter of
intent to purchase this property. There can be no assurance,
however, that the sale of the property will be consummated with
this potential purchaser. If the sale is consummated under the
proposed terms, the Partnership would recognize a gain for
financial reporting purposes (primarily as a result of
cumulative provisions for value impairment totaling $9,150,000
previously recorded by the Partnership) and a loss for Federal
income tax reporting purposes.
The property was classified as held for sale as of December
31, 1996 and, therefore, is not subject to continued
depreciation.
Landings Shopping Center
Occupancy at the property decreased to 55% at June 30, 1997,
from 60% at March 31, 1997, as a result of the vacating of two
tenants which occupied approximately 5,350 square feet at the
property. Although there have been delays in the lease-up of
vacant space, the JMB/Landings joint venture ("JMB/Landings")
continues to actively pursue replacement tenants. In such
regard, lease agreements were executed with two tenants to
occupy a total of 24,420 square feet (approximately 26% of
JMB/Landings' owned net rentable area at the property). These
two tenants, one leasing 20,410 square feet and the other
leasing 4,010 square feet, are expected to occupy their space in
late summer of 1997.
13<PAGE>
JMB/Landings is currently pursuing its legal remedies concerning
arrearages of approximately $45,000 from tenants that have
vacated or ceased operations at the center. In addition, tenant
leases representing approximately 7%, 16% and 10% of the
leasable space at the property are scheduled to expire during
the remainder of 1997, and in 1998 and 1999, respectively, not
all of which are expected to be renewed. JMB/Landings is
conserving its working capital in order to fund budgeted 1997
capital and tenant costs of approximately $150,000 and for
potential future costs in connection with the lease-up of the
vacant space at the property, of which approximately $50,000 has
been incured as of the date of this report. Furthermore, as of
December 31, 1996, JMB/Landings has committed to a plan to sell
the property and, therefore, the property was classified as held
for sale and is not subject to continued depreciation. An
affiliate of the General Partners of the Partnership manages the
property for a fee equal to 4% of the property's gross receipts.
Such property management fees aggregated $19,548 and $22,154 for
the six months ended June 30, 1997 and 1996, respectively.
CIP/Ashby
In July 1996, CIP/Ashby entered into a contract with a
potential purchaser for the sale of this property and, pursuant
to such contract, the property was sold August 26, 1996.
In connection with the sale of this property, as is
customary in such transactions, CIP/Ashby agreed to certain
representations and warranties, with a stipulated survival
period of one year after the date of the closing of the sale, to
late August 1997. Although it is not expected, CIP/Ashby may
ultimately have some liability under such representations and
warranties. In this regard, the CIP/Ashby venture will not be
liquidated until after the expiration of the above-mentioned
survival period and after the distribution of any remaining
funds to the venture partners.
Carson Industrial Park
Occupancy at the property increased to 89% at June 30, 1997,
from 80% at March 31, 1997, primarily as the result of the move-
in of three tenants who occupy approximately 20,000 square feet
at the property. The Partnership continues to actively pursue
replacement tenants. Tenant leases representing approximately
46% of the property's leasable space are due to expire in 1998,
not all of which are expected to be renewed.
In April 1997, the Partnership entered into a contract with
a potential purchaser for the sale of this property for a sale
price of $7,200,000, payable in cash at closing. The sale of
the property is subject to the closing of the transaction
including satisfaction of certain closing conditions. There can
be no assurance, however, that the final sale agreement will not
differ in various respects from the present agreement, or that
the sale of the property will be consummated on any terms.
14<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
If the sale is consummated under the proposed terms, the
Partnership would recognize a gain of approximately $1,750,000
for financial reporting purposes purposes (primarily as a result
of a $4,300,000 value impairment provision recorded by the
Partnership in 1995), and would expect to recognize a loss of
approximately $2,500,000 for Federal income tax reporting
purposes in 1997. The property was classified as held for sale
as of October 1, 1996 and, therefore, is not subject to
continued depreciation.
Rancho Franciscan Apartments
In October 1996, the Partnership signed a letter of intent
to sell the property. On January 22, 1997, the property was
sold for a sale price of $8,302,200, which was paid in cash at
closing (net of selling costs and prorations) and which resulted
in a gain of approximately $566,000 for financial reporting
purposes (primarily as a result a $1,400,000 value impairment
recorded by the Partnership in 1995), and is expected to result
in a loss of approximately $735,000 for Federal income tax
purposes in 1997.
In connection with the sale of this property, as is
customary in such transactions, the Partnership agreed to
certain representations and warranties, with a stipulated
survival period which expires December 15, 1997. Although it is
not expected, the Partnership may ultimately have some liability
under such representations and warranties.
Costa Mesa Industrial Park
On March 3, 1997, the Partnership completed the sale of the
property for a sale price of $4,456,000, which was paid in cash
at closing (net of selling costs and prorations) and which
resulted in a gain of approximately $1,234,000 (primarily as a
result of a $3,400,000 provision for value impairment recorded
by the Partnership in 1995) for financial reporting purposes,
and is expected to result in a loss of approximately $2,150,000
for Federal income tax purposes in 1997.
In connection with the sale of this property, as is
customary in such transactions, the Partnership agreed to
certain representations and warranties, with a stipulated
survival period of six months after the date of the closing of
the sale, to early September 1997. Although it is not expected,
the Partnership may ultimately have some liability under such
representations and warranties.
Riverview Plaza Shopping Center
In July 1996, the Partnership signed a letter of intent to
sell the property and, pursuant to such agreement, the property
was sold on December 12, 1996.
15
In connection with the sale of this property, as is
customary in such transactions, the Partnership agreed to
certain representations and warranties, with a stipulated
survival period which expires December 31, 1997. Although it is
not expected, the Partnership may ultimately have some liability
under such representations and warranties.
Unconsolidated Ventures - Summary Information
Summary income statement information for JMB/Landings for
the six months ended June 30, 1997 and 1996 and for CIP/Ashby
for the six months ended June 30, 1996 (as the property was sold
in August 1996 as discussed above) is as follows:
1997 1996
------------ ----------
Total income . . . . . . $ 459,714 2,264,166
=========== ===========
Operating earnings . . . $ 278,302 909,683
=========== ===========
Partnership's share of
earnings. . . . . . . . $ 139,151 323,400
=========== ===========
ADJUSTMENTS
In the opinion of the Corporate General Partner, all
adjustments (consisting solely of normal recurring adjustments)
necessary for a fair presentation have been made to the
accompanying figures as of June 30, 1997 and for the three and
six months ended June 30, 1997 and 1996.
16<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Reference is made to the notes to the accompanying financial
statements for additional information concerning certain of the
Partnership's investments.
During 1996, some of the Holders of Interests in the
Partnership received from unaffiliated third parties unsolicited
tender offers to purchase up to 4.9% of the Interests in the
Partnership at amounts between $300 and $420 per Interest. The
Partnership recommended against acceptance of these offers on
the basis that, among other things, the offer prices were
inadequate. Such offers have expired. The Partnership had also
received requests from other unaffiliated third parties for the
list of Holders of Interests. It is possible that other offers
for Interests may be made by unaffiliated third parties in the
future, although there is no assurance that any other third
party will commence an offer for Interests, the terms of any
such offer or whether any such offer, if made, will be
consummated, amended or withdrawn. The board of directors of
JMB Realty Corporation ("JMB"), the corporate general partner of
the Partnership, has established a special committee (the
"Special Committee") consisting of certain directors of JMB to
deal with all matters relating to tender offers for Interests in
the Partnership, including any and all responses to such tender
offers. The Special Committee has retained independent counsel
to advise it in connection with any potential tender offers for
Interests and has retained Lehman Brothers Inc. as financial
advisor to assist the Special Committee in evaluating and
responding to any additional potential tender offers for
Interests.
The Partnership had been made aware that in early April of
1997 another unaffiliated third party made an unsolicited tender
offer to some of the Holders of Interests. This offer was
seeking to purchase up to 4.9% of the Interests in the
Partnership at $250 per Interest and expired in late May 1997.
The Special Committee recommended against acceptance of this
offer on the basis that, among other things, the offer price was
inadequate. As of the date of this report, the Partnership is
aware that 1.26% of the outstanding Interests in 1996 and 1997
have been purchased in 1996 and 1997 by such unaffiliated third
parties either pursuant to such tender offers or through
negotiated purchases.
Due to the recent sales of four of the Partnership's seven
original investment properties, the distributions of operating
cash flow will be reduced. After reviewing the Partnership's
properties and their competitive marketplace, the General
Partners of the Partnership expect to be able to liquidate the
remaining three investment properties as quickly as practicable.
Therefore, the affairs of the Partnership are expected to be
wound up no later than 1999 (sooner if the properties are sold
in the nearer term), barring any unforeseen economic
developments.
17<PAGE>
Although the Partnership expects to distribute sale proceeds
from the disposition of the Partnership's remaining investment
properties, aggregate distributions from sale proceeds received
by the Limited Partners over the entire term of the Partnership
are expected to approximate one-half of their original
investment. These aggregate sale proceeds when combined with
aggregate distributions of net cash flow over the entire term of
the Partnership are expected to be less than the Limited
Partners' original investment. Accordingly, as the
subordination requirements of the Partnership Agreement for the
retention of sales proceeds by the General Partners are not
expected to be met, the General Partners are currently deferring
their share of distributable sales proceeds.
RESULTS OF OPERATIONS
Cash and cash equivalents at June 30, 1997 was approximately
$4,400,000, a reduction from December 31, 1996 due primarily to
the Partnership distributing $12,433,128 ($140 per Interest) to
the Holders of Interests in February 1997, which represented
substantially all of the net proceeds received from the sale of
the Riverview Plaza Shopping Center in December 1996. In
addition, $10,212,927 of sales proceeds ($115 per Interest) from
the sales of the Rancho Franciscan Apartments and the Costa Mesa
Industrial Park in January and March of 1997, respectively, was
distributed to the Holders of Interests in May 1997. The
Partnership also distributed approximately $748,000 of operating
cash flow in May 1997 ($37,393 of which was the General
Partners' share). Such sales proceeds were temporarily invested
and were the primary cause of the increase in interest income
for the three and six months ended June 30, 1997 as compared to
the three and six months ended June 30, 1996.
The decrease in investment properties held for sale or
disposition, accounts payable and tenant security deposits at
June 30, 1997 as compared to December 31, 1996 is attributable
primarily to the 1997 sales of the Costa Mesa Industrial Park
and the Rancho Franciscan Apartments as described in the notes.
An additional decrease in investment properties held for sale or
disposition and in accrued rents receivable at June 30, 1997 as
compared to December 31, 1996 is attributable to the $2,800,000
provision for value impairment recorded for the Sunrise Town
Center at March 31, 1997, as described in the notes. An
additional decrease in accounts payable at June 30, 1997 as
compared to December 31, 1996 is attributable primarily to the
payment in 1997 of certain unpaid capital and tenant costs at
December 31, 1996 at certain of the Partnership's other
investment properties.
The increase in accrued real estate taxes at June 30, 1997
as compared to December 31, 1996 is attributable to the timing
of real estate tax payments based upon the payment due dates in
the jurisdiction in which the Sunrise Town Center property
operates.
The decrease in rental income and property operating
expenses for the three and six months ended June 30, 1997 as
compared to the three and six months ended June 30, 1996 is due
primarily to the 1997 sales of the Rancho Franciscan Apartments
and the Costa Mesa Industrial Park, and to the December 1996
sale of the Riverview Plaza Shopping Center.
18<PAGE>
The decrease in depreciation expense for the three and six
months ended June 30, 1997 as compared to the three and six
months ended June 30, 1996 is attributable to the suspension of
depreciation in 1997, pursuant to SFAS 121, as all of the
Partnership's investment properties were classified during 1996
as held for sale or disposition.
The increase in fees for professional services for the three
and six months ended June 30, 1997 as compared to the year-
earlier periods is attributable primarily to the recognition of
legal and other professional fees in connection with the leasing
and marketing efforts of the Partnership's remaining investment
properties and to an increase in 1997 fees for accounting and
auditing services pertaining to the 1996 audit.
The decrease in general and administrative expenses for the
three and six months ended June 30, 1997 as compared to the
three and six months ended June 30, 1996 is attributable
primarily to the timing of the recognition of costs for certain
outsourcing services, recognition of certain prior year
reimbursable costs to affiliates of the General Partners and the
timing of the recognition of certain printing costs in 1996.
A provision for value impairment of $2,800,000 was recorded
at March 31, 1997 for the Sunrise Town Center investment
property due to the uncertainty relating to the Partnership's
ability to recover the net carrying value of this property
through future operations and sale.
The decrease in Partnership's share of operations of
unconsolidated ventures for the three and six months ended June
30, 1997 as compared to the three and six months ended June 30,
1996 is due primarily to the August 1996 sale of the Ashby at
McLean Apartments. Such decrease was partially offset by an
increase in the Partnership's share of operations of
JMB/Landings primarily as a result of the suspension of
depreciation, effective January 1, 1997, on the Landings
Shopping Center, as the property was classified as held for sale
as of December 31, 1996. This increase was substantially offset
for the three months ended June 30, 1997 by a decrease in rental
income at the property in 1997, primarily as a result of a
decrease in occupancy at the property in 1997.
Gains on sale of investment properties for the six months
ended June 30, 1997 resulted from the 1997 sales of the Rancho
Franciscan Apartments and the Costa Mesa Industrial Park.
19<PAGE>
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
The following is a listing of approximate occupancy levels by quarter for t
he Partnership's investment properties owned during 1997:
<CAPTION> 1996 1997
-------------------- --------------------
at at at at at at at at
-------------------- --------------------
3/31 6/30 9/3012/31 3/316/30 9/30 12/31
---- ---- ---- ---- -------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. The Landings
Shopping Center
Sarasota, Florida. . . . . . . . . . . . 82% 65% 67% 60% 60% 55%
2. Carson Industrial Park
Carson, California . . . . . . . . . . . 95% 93% 93% 93% 80% 89%
3. Costa Mesa,
Industrial Park
Costa Mesa, California . . . . . . . . . 69% 69% 69% 69% N/A N/A
4. Rancho Franciscan
Apartments
Santa Barbara, California. . . . . . . . 97% 97% 95% 98% N/A N/A
5. Sunrise Town Center
Sunrise, Florida . . . . . . . . . . . . 83% 82% 82% 83% 64% 65%
- -------------
An N/A indicates that the property was sold and was not owned by the Partnership or its joint
venture at the end of the period.
</TABLE>
20<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
3. Amended and Restated Agreement of Limited
Partnership is hereby incorporated by reference
to Exhibit A of the Partnership's Prospectus
contained in the Partnership's Post-Effective
Amendment No. 1 to Form S-11 (File No. 33-5309)
Registration Statement dated December 8, 1987.
3.2. The Prospectus of the Partnership dated
December 8, 1986 is hereby incorporated by
reference to the Partnership's Post-Effective
Amendment No. 1 to Form S-11 (File No. 33-5309)
Registration Statement dated December 8, 1987.
3.3 Acknowledgement of rights and duties of the
General Partners of the Partnership between
AGPP Associates, L.P. (a successor Associate
General Partner of the Partnership) and JMB
Realty Corporation as of December 31, 1995 is
incorporated herein by reference to the
Partnership's report for June 30, 1996 on Form
10-Q (File No. 000-16975) dated August 8, 1996.
4. Assignment Agreement is hereby incorporated by
reference to Exhibit B of the Partnership's
Prospectus contained in the Partnership's Post-
Effective Amendment No. 1 to Form S-11 (Form
No.33-5309) Registration Statement dated
December 8, 1987.
10.1 Real Property Purchase Agreement between
Carlyle Income Plus, Ltd. and Sunrise Town
Center, Inc. dated May 12, 1989 relating to the
purchase by the Partnership of the Sunrise Town
Center is hereby incorporated herein by
reference to the Partnership's Report for
October 12, 1989 on Form 8-K (File No. 000-
16975) dated October 26, 1989.
10.2 Real Property Purchase Agreement between
Carlyle Income Plus, Ltd. and Steven I. Lyons
and Michael Towbes, as tenants in common, dated
January 7, 1997 relating to the sale by the
Partnership of the Rancho Franciscan Apartments
is hereby incorporated herein by reference to
the Partnership's Report for January 22, 1997
on Form 8-K (File No. 000-16975) dated January
31, 1997.
21<PAGE>
10.3 Real Property Purchase Agreement between
Carlyle Income Plus, Ltd., Hamilton Airway I,
LLC, and John W. Hamilton dated February 27,
1997 relating to the sale by the Partnership of
the Costa Mesa Industrial Park is hereby
incorporated herein by reference to the
Partnership's Report for March 3, 1997 on Form
8-K (File No. 000-16975) dated March 14, 1997.
27. Financial Data Schedule
(b) No reports on Form 8-K have been filed during the last
quarter of the period covered by this report.
22<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Act of 1934, the Partnership has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
CARLYLE INCOME PLUS, LTD.
By: JMB Realty Corporation
Corporate General Partner
By: Gailen J. Hull, Senior Vice President
Date: August 8, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.
GAILEN J. HULL,
Principal Accounting Officer
Date: August 8, 1997
23<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE REGISTRANT'S FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1997 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS INCLUDED IN SUCH REPORT.
</LEGEND>
<CIK> 0000792978
<NAME> CARLYLE INCOME PLUS, LTD.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,392,210
<SECURITIES> 0
<RECEIVABLES> 239,354
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,631,564
<PP&E> 9,066,506
<DEPRECIATION> 0
<TOTAL-ASSETS> 18,160,823
<CURRENT-LIABILITIES> 338,698
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 17,720,515
<TOTAL-LIABILITY-AND-EQUITY> 18,160,823
<SALES> 1,157,852
<TOTAL-REVENUES> 1,502,126
<CGS> 0
<TOTAL-COSTS> 602,673
<OTHER-EXPENSES> 221,501
<LOSS-PROVISION> 2,800,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,122,048)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,980,966)
<DISCONTINUED> 1,800,831
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (180,135)
<EPS-PRIMARY> (2.45)
<EPS-DILUTED> (2.45)
</TABLE>
