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-captioned registrant, is the
electronically filed executed copy of registrant's current
report on Form 10-Q for the 3rd quarter September 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
Enclosures<PAGE>
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 Commission file
ended September 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
Financial Condition and Results of
Operations. . . . . . . . . . . . . . . . . 17
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
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
----------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . .$ 11,513,496 14,972,580
Rents and other receivables (net of allowance
for doubtful accounts of $185,155 in 1997 and
$88,784 in 1996) . . . . . . . . . . . . . . . . . . . 123,722 187,830
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 45,261 41,126
----------- -----------
Total current assets . . . . . . . . . . . . . . 11,682,479 15,201,536
----------- -----------
Investment properties held for sale or disposition:. . . . 3,803,224 22,320,312
----------- -----------
3<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
SEPTEMBER 30, DECEMBER 31,
1997 1996
----------- ----------
Investments in unconsolidated ventures, at
equity. . . . . . . . . . . . . . . . . . . . . . . . . . 4,346,364 4,177,052
Deferred expenses . . . . . . . . . . . . . . . . . . . . 13,767 57,769
Accrued rents receivable . . . . . . . . . . . . . . . . . 92,234 187,082
----------- ------------
$ 19,938,068 41,943,751
=========== ============
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
------------------------------------------------------
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . $ 85,738 431,147
Amounts due to affiliates . . . . . . . . . . . . . . . 20,847 16,714
Unearned rents . . . . . . . . . . . . . . . . . . . . . 27,916 21,276
Accrued real estate taxes. . . . . . . . . . . . . . . . 160,661 --
----------- -----------
Total current liabilities. . . . . . . . . . . . 295,162 469,137
Tenant security deposits . . . . . . . . . . . . . . . . . 16,504 180,052
----------- -----------
Total liabilities. . . . . . . . . . . . . . . . 311,666 649,189
----------- -----------
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
SEPTEMBER 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) . . . . . . . . . . . 11,681,682 9,993,323
Cumulative cash distributions. . . . . . . . . . . . . (69,817,447) (46,460,928)
----------- -----------
19,626,402 41,294,562
----------- -----------
Total partners' capital accounts . . . . . . . . 19,626,402 41,294,562
----------- -----------
$ 19,938,068 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 NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ --------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Income
Rental income. . . . . . . . $ 389,020 1,592,888 1,546,872 4,762,342
Interest income. . . . . . . 89,234 35,064 433,508 129,902
---------- ---------- ---------- ----------
478,254 1,627,952 1,980,380 4,892,244
---------- ---------- ---------- ----------
Expenses:
Depreciation . . . . . . . . -- 97,245 -- 473,493
Property operating
expenses. . . . . . . . . . 205,787 665,852 796,793 2,000,703
Professional services. . . . -- 113,649 102,511 167,274
Amortization of
deferred expenses . . . . . 4,518 8,594 16,185 24,735
General and administrative . 78,221 39,602 197,211 222,953
Provisions for value impairment. 100,000 720,000 2,900,000 720,000
---------- ---------- ---------- ----------
388,526 1,644,942 4,012,700 3,609,158
---------- ---------- ---------- ----------
Operating
earnings (loss). . 89,728 (16,990) (2,032,320) 1,283,086
6<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS-CONCLUDED
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- --------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Partnership's share
of operations of
unconsolidated
ventures . . . . . . . . . . 56,819 202,110 197,901 525,510
---------- ---------- ---------- ----------
Net operating earnings
(loss) . . . . . . . 146,547 185,120 (1,834,419) 1,808,596
Gains on sales of investment
properties . . . . . . . . . . 1,759,340 1,134,043 3,560,171 1,134,043
---------- ---------- ---------- ----------
Net earnings (loss). $ 1,905,887 1,319,163 1,725,752 2,942,639
========== ========== ========== ==========
Net earnings (loss)
per limited
partnership
interest
7<PAGE>
Net operating earnings
(loss) . . . . . . . $ .39 1.98 (21.08) 19.35
Gain on sales
of investment properties 21.07 12.64 40.09 12.64
---------- ---------- ---------- ----------
Net earnings (loss). $ 21.46 14.62 19.01 31.99
========== ========== ========== ==========
Cash distributions
per limited partnership
interest. . . . . . $ -- -- 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
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . $ 1,725,752 2,942,639
Items not requiring (providing) cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . . -- 473,493
Amortization of deferred expenses . . . . . . . . . . 16,185 24,735
Provisions for value impairment . . . . . . . . . . . 2,900,000 720,000
Partnership's share of operations of unconsolidated
ventures, net of distributions . . . . . . . . . . . (169,312) (525,510)
Gains on sales of investment properties . . . . . . . (3,560,171) (1,134,043)
Changes in:
Rents and other receivables . . . . . . . . . . . . . 64,108 14,127
Prepaid expenses. . . . . . . . . . . . . . . . . . . (4,135) (36,293)
Accrued rents receivable. . . . . . . . . . . . . . . 12,738 (15,720)
Accounts payable. . . . . . . . . . . . . . . . . . . (345,409) (229)
Amounts due to affiliates . . . . . . . . . . . . . . 4,133 18,287
Unearned rents. . . . . . . . . . . . . . . . . . . . 6,640 (48,030)
Accrued real estate taxes . . . . . . . . . . . . . . 160,661 22,137
Tenant security deposits. . . . . . . . . . . . . . . (163,548) (1,787)
------------ ------------
Net cash provided by (used in) operating
activities. . . . . . . . . . . . . . . . . 647,642 2,453,806
------------ ------------
Cash flows from investing activities:
Proceeds from sales of investment properties,
net of closing costs. . . . . . . . . . . . . . . . 19,348,551 --
Additions to investment properties . . . . . . . . . (30,709) (215,555)
Payment of deferred expenses . . . . . . . . . . . . (30,656) (19,003)
------------ -----------
9<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS - CONCLUDED
1997 1996
------------ -----------
Net cash provided by (used in)
investing activities . . . . . . . . . . . 19,287,186 (234,558)
------------ -----------
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 . . . . . . . . . . . . . (3,459,084) 349,605
Cash and cash equivalents, beginning of year 14,972,580 2,778,447
------------ -----------
Cash and cash equivalents, end of period . . $ 11,513,496 3,128,052
============ ===========
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.
</TABLE>
10<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the
Partnership's audited financial statements for the fiscal 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 $(2,012,315) and $1,570,777
respectively, for the nine months ended September 30, 1997 and
1996. In addition, the accompanying financial statements
include $197,901 and $525,510, respectively, of the
Partnership's share of total operations of $395,268 and
$1,509,610 for the nine months ended September 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 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>
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 September 30, 1997 and for the nine months ended
September 30, 1997 and 1996 are as follows:
UNPAID AT
SEPTEMBER 30,
1997 1996 1997
--------- --------- ------------
<S> <C> <C> <C>
Property management and
leasing fees $ 29,790 70,164 1,129
Insurance commissions 8,357 15,712 --
Reimbursement (at cost)
for salary and salary-related
expenses related to the on-site
and other costs for the
Partnership and its investment
properties 33,869 26,545 19,718
--------- --------- ---------
$ 72,016 112,421 20,847
========= ========= =========
<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.
</TABLE>
12<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Sunrise Town Center
Occupancy at the property is 65% September 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 arrearages due from this tenant as of the date of this
report, all of which has been reserved for in the accompanying
financial statements. 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.
Additional provisions of $100,000 and $2,800,000 were recorded
at September 30, 1997 and March 31, 1997, respectively . Such
provisions were recorded to reflect the then estimated fair
values, less costs to sell as applicable, of the property.
In July 1997, a potential purchaser signed a letter of
intent to purchase this property. Subsequent to the end of the
third quarter, the potential purchaser informed the Partnership
that they were no longer interested in purchasing the property.
In November 1997, another potential purchaser signed a letter of
intent to purchase this property. If the sale is consummated
under the proposed terms, the Partnership would not recognize
any significant gain or loss for financial reporting purposes
(primarily as a result of value impairment provisions totaling
$9,250,000 recorded by the Partnership in 1995, 1996 and 1997)
and would recognize a loss in 1997 for Federal income tax
reporting purposes. There can be no assurance, however, that
the sale of the property will be consummated on these or any
other terms with this potential purchaser in the near term. The
property was classified as held for sale as of December 31, 1996
and, therefore, was not subject to continued depreciation.
Landings Shopping Center
Occupancy at the property increased to 81% at September 30,
1997, from 55% at June 30, 1997, as a result of the move-in in
the third quarter of 1997 of two tenants which occupy a total of
24,420 square feet (approximately 26% of JMB/Landings' owned net
rentable area at the property).
13<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
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 for the remaining vacant
space.
JMB/Landings is currently pursuing its legal remedies
concerning arrearages of approximately $9,000 from tenants that
have vacated or ceased operations at the center. In addition,
tenant leases representing approximately 5%, 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 currently
budgeted 1997 capital and tenant costs of approximately $235,000
and for potential future costs in connection with the lease-up
of the remaining vacant space at the property, of which
approximately $190,000 has been incurred as of the date of this
report. 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
$29,815 and $32,367 for the nine months ended September 30, 1997
and 1996, respectively.
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. In such regard, subsequent to the end of the
third quarter, JMB/Landings reached an agreement in principle to
sell the property to an independent third party. The sale is
subject to various contingencies including final documentation
and therefore there can be no assurance that a sale will be
completed in the near term with this or any other purchaser. If
the sale was completed on the proposed terms, JMB/Landings would
recognize a gain in 1997 for financial reporting purposes
(primarily as a result of a $3,500,000 provision for value
impairment recorded by JMB/Landings in 1995) and a loss in 1997
for Federal income tax reporting purposes.
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, which expired, with no liability
to CIP/Ashby, as scheduled in late August 1997. The CIP/Ashby
venture is expected to be liquidated in 1997 after the
distribution of the remaining funds to the venture partners.
14<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Carson Industrial Park
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. On August 15, 1997 the sale of the
property was completed and the Partnership received the cash
proceeds, less closing costs and prorations, at closing.
Accordingly, Partnership recognized a gain of approximately
$1,760,000 for the three months ended September 30, 1997 for
financial reporting purposes (primarily as a result of a
$4,300,000 value impairment provision recorded by the
Partnership in 1995), and expects 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, was not subject to
continued depreciation.
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.
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.
15<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONCLUDED
In connection with the sale of this property, as is
customary in such transactions, the Partnership agreed to
certain representations and warranties, which expired, with no
liability to the Partnership, in early September 1997.
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.
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 nine months ended September 30, 1997 and 1996 and for
CIP/Ashby for the period prior to its sale in August 1996 as
discussed above is as follows:
1997 1996
------------ ----------
Total income . . . . . . $ 667,040 3,351,806
=========== ===========
Operating earnings . . . $ 400,526 1,509,565
=========== ===========
Partnership's share of
earnings. . . . . . . . $ 200,263 525,510
=========== ===========
Gain on sale of property $ -- 3,658,205
=========== ===========
Partnership's share of
gain on sale of property $ -- 1,134,043
=========== ===========
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 September 30, 1997 and for the three
and nine months ended September 30, 1997 and 1996.
16<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 during 1997 other
unaffiliated third parties have made unsolicited tender offers
to some of the Holders of Interests. These offers were seeking
to purchase up to 4.9% of the Interests in the Partnership at
prices ranging from $135 to $250 per Interest. These offers
have expired as of the date of this report. The Special
Committee recommended against acceptance of these offers on the
basis that, among other things, the offer prices were
inadequate. As of the date of this report, the Partnership is
aware that 5.57% of the outstanding Interests have been
purchased in 1996 and 1997 by all such unaffiliated third
parties either pursuant to such tender offers or through
negotiated purchases.
Due to the recent sales of all but two of the Partnership's
seven original investment properties, the distributions of
operating cash flow will be reduced. After reviewing the
Partnership's remaining properties and their competitive
marketplaces, the General Partners of the Partnership expect to
be able to liquidate these investment properties as quickly as
practicable. Therefore, the affairs of the Partnership are
expected to be wound up no later than the end of 1999 and
perhaps in the 1997-1998 time frame, 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 September 30, 1997 was
approximately $11,513,000. Such funds, which are available for
distributions to the partners, for leasing costs and for working
capital requirements, represent 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 and the proceeds
from the August 1997 sale of the Carson Industrial Park were
temporarily invested and were the primary cause of the increase
in interest income for the three and nine months ended September
30, 1997 as compared to the three and nine months ended
September 30, 1996. The Partnership anticipates making a
distribution to the Holders of Interest in late November, 1997,
of approximately $8.9 million, consisting of $92 per Interest
from sale proceeds and $8 per Interest from operations.
The decrease in rents and other receivables, investment
properties held for sale or disposition, deferred expenses,
accounts payable and tenant security deposits at September 30,
1997 as compared to December 31, 1996 is attributable primarily
to the 1997 sales of the Costa Mesa and Carson Industrial Parks
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 September 30,
1997 as compared to December 31, 1996 is attributable to the
$2,900,000 of provisions for value impairment recorded for the
Sunrise Town Center in 1997, as described in the notes. An
additional decrease in accounts payable at September 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 September 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.
18<PAGE>
The decrease in rental income and property operating
expenses for the three and nine months ended September 30, 1997
as compared to the three and nine months ended September 30,
1996 is due primarily to the 1997 sales of the Rancho Franciscan
Apartments and the Costa Mesa and Carson Industrial Parks, and
to the December 1996 sale of the Riverview Plaza Shopping
Center.
The decrease in depreciation expense for the three and nine
months ended September 30, 1997 as compared to the three and
nine months ended September 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.
Provisions for value impairment of $100,000, $2,800,000 and
$720,000 were recorded at September 30, 1997, March 31, 1997 and
September 30, 1996, respectively, 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 nine months ended
September 30, 1997 as compared to the three and nine months
ended September 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.
Gains on sales of investment properties for the nine months
ended September 30, 1997 resulted from the 1997 sales of the
Rancho Franciscan Apartments and the Costa Mesa and Carson
Industrial Parks. The gain on sale of investment property for
the three months ended September 30, 1997 is due to the August,
1997 sale of the Carson Industrial Park. The gain on sale for
the three and nine months ended September 30, 1996 is due to the
sale of the CIP/Ashby investment property in August, 1996.
19<PAGE>
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
The following is a listing of approximate occupancy levels by quarter
for the 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% 81%
2. Carson Industrial Park
Carson, California . . . . . . . . . . . 95% 93% 93% 93% 80% 89% N/A
3. Costa Mesa,
Industrial Park
Costa Mesa, California . . . . . . . . . 69% 69% 69% 69% N/A N/A N/A
4. Rancho Franciscan
Apartments
Santa Barbara, California. . . . . . . . 97% 97% 95% 98% N/A N/A N/A
5. Sunrise Town Center
Sunrise, Florida . . . . . . . . . . . . 83% 82% 82% 83% 64% 65% 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.
(i) The Partnership's Report on Form 8-K (File No.
000-16975) for August 15, 1997 (describing the
sale of the Carson Industrial Park) was filed.
The Report was dated August 28, 1997.
10.4 Real Property Purchase Agreement between
Carlyle Income Plus, Ltd. and Koll Cornerstone
II dated April 21, 1997 relating to the sale by
the Partnership of the Carson Industrial Park
is hereby incorporated herein by reference to
the Partnership's Report for August 15, 1997 on
Form 8-K (File No. 000-16925) dated August 28,
1997.
27. Financial Data Schedule
(b) The following report on Form 8-K was filed during the last
quarter of the period covered by this report.
(i) The Partnership's Report on Form 8-K (File No.
000-16975) for August 15, 1997 (describing the
sale of the Carson Industrial Park) was filed.
The Report was dated August 28, 1997.
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: November 7, 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: November 7, 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 SEPTEMBER
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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 11,513,496
<SECURITIES> 0
<RECEIVABLES> 123,722
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11,682,479
<PP&E> 3,803,224
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,938,068
<CURRENT-LIABILITIES> 295,162
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 19,626,402
<TOTAL-LIABILITY-AND-EQUITY> 19,938,068
<SALES> 1,546,872
<TOTAL-REVENUES> 1,980,380
<CGS> 0
<TOTAL-COSTS> 812,978
<OTHER-EXPENSES> 299,722
<LOSS-PROVISION> 2,900,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,032,320)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,834,419)
<DISCONTINUED> 3,560,171
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,725,752
<EPS-PRIMARY> 19.01
<EPS-DILUTED> 19.01
</TABLE>
