Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re:Carlyle Income Plus, L.P. - I
Commission File No. 000-16975
Form 10-K
Gentlemen:
Transmitted, for the above-mentioned registrant, is the
electronically filed executed copy of registrant's current report
on Form 10-K for the year ended December 31, 1996.
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
CSN:vb
Enclosures
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Act of 1934
FOR THE FISCAL YEAR COMMISSION FILE
ENDED DECEMBER 31, 1996 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 .
----- -----
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K
State the aggregate market value of the voting stock held by
non-affiliates of the registrant. Not applicable.
Documents incorporated by reference: None<PAGE>
TABLE OF CONTENTS
Page
PART I
Item 1. Business . . . . . . . . . . . . . . . . . 1
Item 2. Properties. . . . . . . . . . . . . . . . . 4
Item 3. Legal Proceedings . . . . . . . . . . . . . 7
Item 4. Submission of Matters to a Vote of Security
Holders. . . . . . . . . . . . . . . . . . 7
PART II
Item 5. Market for the Partnership's Limited
Partnership Interests and Related Security
Holder Matters . . . . . . . . . . . . . . 7
Item 6. Selected Financial Data . . . . . . . . . . 8
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . 12
Item 8. Financial Statements and Supplementary
Data . . . . . . . . . . . . . . . . . . . 20
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . 50
PART III
Item 10. Directors and Executive Officers of the
Partnership . . . . . . . . . . . . . . . . 50
Item 11. Executive Compensation. . . . . . . . . . . 55
Item 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . 55
Item 13. Certain Relationships and Related
Transactions . . . . . . . . . . . . . . . 56
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K . . . . . . . . . . . . 57
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 59
i<PAGE>
PART I
ITEM 1. BUSINESS
Unless otherwise indicated, all references herein to "Notes"
are to Notes to Financial Statements contained in this annual
report. Capitalized terms used herein, but not defined, have the
same meanings as used in the Notes.
The registrant, Carlyle Income Plus, Ltd. (the
"Partnership"), is a limited partnership formed in April 1986 and
currently governed by the Revised Uniform Limited Partnership Act
of the State of Illinois to invest in income-producing real
estate, primarily existing commercial properties. The
Partnership invested in such real estate on an unleveraged
all-cash acquisition basis. On December 8, 1986, the Partnership
commenced an offering to the public of $250,000,000 in Limited
Partnership interests ("Interests") pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933 (No.
000-16975). A total of 88,803.058 Interests were sold to the
public at $1,000 per Interest (fractional interests are due to a
Distribution Reinvestment Program). The offering closed on April
30, 1988. No holder of Interests (hereinafter, a "Limited
Partner") has made any additional capital contribution after such
date. The Limited Partners of the Partnership share in their
portion of the benefits of ownership of the Partnership's real
property investments according to the number of Interests held.
The Partnership is engaged solely in the business of the
acquisition, operation and sale and disposition of equity real
estate investments. Such equity investments are held by fee
title and/or through joint venture partnership interests. The
Partnership's real property investments are located throughout
the nation and it has no real estate investments located outside
of the United States. A presentation of information about
industry segments, geographic regions, raw materials or
seasonality is not applicable and would not be material to an
understanding of the Partnership's business taken as a whole.
Pursuant to the Partnership Agreement, the Partnership is
required to terminate no later than October 31, 2036. The
Partnership is self-liquidating in nature. At sale of a
particular property, the net proceeds, if any, are generally
distributed or reinvested in existing properties rather than
invested in acquiring additional properties. As discussed
further in Item 7, the Partnership currently expects to conduct
an orderly liquidation of its remaining investment portfolio as
quickly as practicable and to wind up its affairs not later than
December 31, 1999 (sooner if the properties are sold in the
nearer term), barring any unforeseen economic developments.
The Partnership has made the real property investments set
forth in the following table:
<PAGE>
<TABLE>
<CAPTION>
SALE OR DISPOSITION
DATE, OR IF OWNED
AT DECEMBER 31, 1996
ORIGINAL INVESTED
NAME, TYPE OF PROPERTY DATE OF CAPITAL
AND LOCATION (c) SIZE PURCHASE PERCENTAGE (a) TYPE OF OWNERSHIP
- ----------------------- ---- -------- ---------------- -----------------
<S> <C> <C> <C> <C>
1. Riverview Plaza
Shopping Center
Chicago,
Illinois. . . . . . 139,000 sq.ft 8/11/87 12/12/96 fee ownership of land and
n.r.a improvements (e)
2. The Landings
Shopping Center
Sarasota,
Florida . . . . . . 94,000 sq.ft. 8/16/88 9% fee ownership of land and
n.r.a. improvements (through
joint venture partnership)
(b)
3. Carson Industrial
Park
Carson,
California. . . . . 206,000 sq.ft. 11/01/88 15% fee ownership of land and
g.l.a. improvements
4. Costa Mesa Industrial
Park
Costa Mesa,
California. . . . . 107,000 sq.ft 11/01/88 10% fee ownership of land and
g.l.a. improvements (g)
5. Rancho Franciscan
Apartments
Santa Barbara,
California. . . . . 111 units 12/28/88 14% fee ownership of land
and improvements (f)
6. Sunrise Town Center
Sunrise,
Florida . . . . . . 128,000 sq. ft. 10/12/89 20% fee ownership of land and
n.r.a. improvements (d)
<PAGE>
ORIGINAL
INVESTED
NAME, TYPE OF PROPERTY DATE OF CAPITAL
AND LOCATION (c) SIZE PURCHASE PERCENTAGE (a) TYPE OF OWNERSHIP
- ----------------------- ---- -------- ---------------- -----------------
7. The Ashby at McLean
Apartments
McLean,
Virginia. . . . . . 250 units 2/28/90 8/26/96 fee ownership of land and
improvements (through
joint venture partner-
ship) (b) (e)
- ----------------
(a) The computation of this percentage for properties held at December 31, 1996 does not
include amounts invested from sources other than the original net proceeds of the public offering
as described above and in Item 7.
(b) Reference is made to the Notes for a description of the joint venture partnership through
which the Partnership has made this real property investment.
(c) Reference is made to Item 8 - Schedule III filed with this annual report for further
information concerning real estate taxes and depreciation.
(d) Reference is made to Item 6 - Selected Financial Data for additional operational and lease
expiration data concerning this investment property.
(e) This property has been sold. Reference is made to the Notes for a description of the sale
of such real property investment.
(f) This property was sold January 22, 1997. Reference is made to the Notes for a description
of the sale of such real property investment.
(g) This property was sold March 3, 1997. Reference is made to the Notes for a description
of the sale of such real property investment.
</TABLE>
<PAGE>
The Partnership's real property investments are subject to
competition from similar types of properties (including, in
certain areas, properties owned by affiliates of the General
Partners) in the respective vicinities in which they are
located. Such competition is generally for the retention of
existing tenants. Additionally, the Partnership is in
competition for new tenants in markets where significant
vacancies are present. Reference is made to Item 7 below for a
discussion of competitive conditions and future capital
improvement plans of the Partnership and certain of its
significant investment properties. Approximate occupancy levels
for the properties are set forth in the table in Item 2 below to
which reference is hereby made. The Partnership maintains the
suitability and the competitiveness of its properties in its
markets primarily on the basis of effective rents, tenant
allowances, and service provided to tenants. In the opinion of
the Corporate General Partner of the Partnership, all of the
investment properties held at December 31, 1996 are adequately
insured. Although there is earthquake insurance coverage for a
portion of the value of the Partnership's investment properties,
the Corporate General Partner does not believe that such
coverage for the entire replacement cost of the investment
properties is available on economic terms.
Reference is made to the Notes for a schedule of minimum
lease payments to be received in each of the next five years,
and in the aggregate thereafter, under leases in effect at the
Partnership's properties as of December 31, 1996.
On August 26, 1996, CIP/Ashby Partners sold The Ashby at
McLean Apartments. Reference is made to the Notes for a further
description of such transaction.
On December 12, 1996, the Partnership sold the Riverview
Shopping Center. Reference is made to the Notes for further
description of such transaction.
On January 22, 1997 and March 3, 1997, the Partnership sold
the Rancho Franciscan Apartments and the Costa Mesa Industrial
Park, respectively. Reference is made to the Notes for a
further description of such transactions.
The Partnership has no employees other than personnel
performing on-site duties at certain of the Partnership's
properties, none of whom are officers or directors of the
Corporate General Partner of the Partnership.
The terms of transactions between the Partnership, the
General Partners of the Partnership and their affiliates are set
forth in Item 11 below to which reference is hereby made for a
description of such terms and transactions.
ITEM 2. PROPERTIES
The Partnership owns or owned directly or through joint
venture partnerships the properties or interests in the
properties referred to under Item 1 above to which reference is
hereby made for a description of such properties.<PAGE>
<TABLE>
<CAPTION>
The following is a listing of principal businesses or occupations carried on in and
approximate occupancy levels by quarter during fiscal years 1996 and 1995 for the Partnership's
investment properties owned during 1996:
1995 1996
-------------------- --------------------
at at at at at at at at
-------------------- --------------------
PRINCIPAL BUSINESS 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------------ ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Riverview Plaza
Shopping Center
Chicago, Illinois. . . . . Retail 97% 97% 97% 99% 99% 97% 97% N/A
2. The Landings
Shopping Center
Sarasota, Florida. . . . . Retail 93% 91% 88% 95% 82% 65% 67% 60%
3. Carson Industrial Park Light Industrial/
Carson, California . . . . Retail/Distrib. 94% 94% 91% 94% 95% 93% 93% 93%
4. Costa Mesa,
Industrial Park
Costa Mesa Light Industrial/
California (2) . . . . . . Research & Develop. 100% 100% 100% 100% 69% 69% 69% 69%
5. Rancho Franciscan
Apartments
Santa Barbara,
California(1). . . . . . . Apartments 97% 95% 96% 97% 97% 97% 95% 98%
6. Sunrise Town Center
Sunrise, Florida . . . . . Retail 91% 95% 90% 85% 83% 82% 82% 83%
7. The Ashby at
McLean Apartments
McLean, Virginia . . . . . Apartments 97% 97% 98% 96% 97% 96% N/A N/A
<PAGE>
<FN>
- ---------------
Reference is made to Item 6, Item 7 and to the Notes for further information regarding property
occupancy, competitive conditions and tenant leases at the Partnership's investment properties.
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.
(1) This property was sold January 22, 1997 as described further in the Notes.
(2) This property was sold March 3, 1997 as described further in the Notes.
</TABLE>
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not subject to any pending material legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders
during 1995 and 1996.
PART II
ITEM 5. Market for the Partnership's Limited Partnership
Interests and Related Security Holder Matters
As of December 31, 1996, there were 8,996 record holders of
Interests of the Partnership. There is no public market for
Interests, and it is not anticipated that a public market for
Interests will develop. Upon request, the Corporate General
Partner may provide information relating to prospective transfer
of Interests to an investor desiring to transfer his Interests.
The price to be paid for the Interests, as well as any other
economic aspects of the transaction, will be subject to
negotiation by the investor. There are certain conditions and
restrictions on the transfer of Interests, including, among
other things, the requirement that the substitution of a
transferee of Interests as a Limited Partner of the Partnership
be subject to the written consent of the Corporate General
Partner, which may be granted or withheld in its sole and
absolute discretion. The rights of a transferee of Interests
who does not become a substituted Limited Partner will be
limited to the rights to receive his share of profits or losses
and cash distributions from the Partnership, and such transferee
will not be entitled to vote such Interests or have other rights
of a Limited Partner. No transfer will be effective until the
first day of the next succeeding calendar quarter after the
requisite transfer form satisfactory to the Corporate General
Partner has been received by the Corporate General Partner. The
transferee consequently will not be entitled to receive any cash
distributions or any allocable share of profits or losses for
tax purposes until such succeeding calendar quarter. Profits or
losses from operations of the Partnership for a calendar year in
which a transfer occurs will be allocated between the transferor
and the transferee based upon the number of quarterly periods in
which each was recognized as the holder of Interests, without
regard to the results of Partnership's operations during
particular quarterly periods and without regard to whether cash
distributions were made to the transferor or transferee.
Profits or losses arising from the sale or other disposition of
Partnership properties will be allocated to the recognized
holder of the Interests as of the last day of the quarter in
which the Partnership recognized such profits or losses. Cash
distributions to a holder of Interests arising from the sale or
other disposition of Partnership properties will be distributed
to the recognized holder of the Interests as of the last day of
the quarterly period with respect to which such distribution is
made.
Reference is made to Item 6 for a discussion of cash
distributions to Limited Partners. <PAGE>
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
YEARS ENDED DECEMBER 31, 1996, 1995, 1994, 1993 AND 1992
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1996 1995 1994 1993 1992
---------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Total income . . . . . . .$ 6,357,920 6,567,890 6,923,129 6,969,179 6,695,023
========== ========== ========= ========= =========
Operating earnings
(loss). . . . . . . . . .$ 651,030 (11,108,745) 2,870,043 2,746,556 2,556,971
Partnership's share of
operations of
unconsolidated
ventures. . . . . . . . 571,500 (1,165,684) (1,795,473) 502,781 462,840
---------- ---------- ---------- ---------- ----------
Net operating
earnings (loss) . . . . . 1,222,530 (12,274,429) 1,074,570 3,249,337 3,019,811
---------- ---------- ---------- ---------- ----------
Gain on sale and
Partnership's share
of gain on sale of
investment properties 2,069,877 -- -- -- --
---------- ---------- ---------- ---------- ----------
Net earnings (loss) . . .$ 3,292,407 (12,274,429) 1,074,570 3,249,337 3,019,811
========== ========== ========== ========== ==========
Net earnings (loss) per
Interest (b)
Net operating earnings
(loss) . . . . . . . . .$ 13.08 (131.30) 11.49 34.76 32.30
<PAGE>
Gain on sale and
Partnership's share of
gain on sale of
investment properties 9.24 -- -- -- --
---------- ---------- ---------- ---------- ----------
$ 22.32 (131.30) 11.49 34.76 32.30
========== ========== ========= ========== ==========
Total assets . . . . . . . $ 41,943,751 49,567,471 67,048,436 69,698,572 70,202,190
========== ========== ========= ========== ==========
Cash distributions
per Interest (c) $ 113.00 55.00 40.00 40.00 55.00
========== ========== ========= ========== ==========
<FN>
- ----------------
(a) The above selected financial data should be read in conjunction with the financial
statements and the related notes appearing elsewhere in this annual report.
(b) The net earnings (loss) per Interest is based upon the number of Interests outstanding
at the end of the period (88,808.058) and the specified profit and loss allocations (as discussed
in the Notes) between the Limited and General Partners.
(c) Cash distributions from the Partnership are generally not equal to Partnership income
(loss) for financial reporting or Federal income tax purposes. Each Partner's taxable income (or
loss) from the Partnership in each year is equal to his allocable share of the taxable income
(loss) of the Partnership, without regard to the cash generated or distributed by the Partnership.
Accordingly, cash distributions to the Limited Partners since the inception of the Partnership
have not resulted in taxable income to such Limited Partners and have therefore represented a
return of capital.
</TABLE>
<PAGE>
<TABLE>
SIGNIFICANT PROPERTIES - SELECTED RENTAL AND OPERATING DATA AT DECEMBER 31, 1996
<CAPTION>
PROPERTY
- ---------
Sunrise Town a) The net rentable area ("NRA") occupancy rate and average base rent per square
Center foot as of December 31 for each of the last five years were as follows:
NRA AVG. BASE RENT PER
DECEMBER 31, OCCUPANCY RATE SQUARE FOOT (1)
------------ ------------------- -------------------
<S> <C> <C> <C> <C>
1992. . . . . . 93% 10.08
1993. . . . . . 95% 9.60
1994. . . . . . 92% 8.68
1995. . . . . . 85% 8.94
1996. . . . . . 83% 8.31
<FN>
---------------
(1) Average base rent per square foot is based on NRA occupied as of December 31
of each year.
</TABLE>
<TABLE>
<CAPTION>
Scheduled
Lease Lease
Square Base Rent Expiration Renewal
b) Significant Tenants Feet Per Annum Date Option
------------------ ------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Uptons (formerly 51,928 $ 259,640 6/2009 Six 5-year terms
J Byrons)
(Department Store) (Ground Lease)
L. Luria & Son (1) 24,115 206,665 3/2010 None
(Department Store)
</TABLE>
(1) Tenant vacated 3/7/97 as discussed further in Item 7. <PAGE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the
expiration of leases for the next ten years at the Sunrise Town Center:
Annualized Percent of
Number of Approx. Total Base Rent Total 1996
Year Ending Expiring NRA of Expiring of Expiring Base Rent
December 31, Leases (1) Leases (1) Leases Expiring
------------ ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
1997 1 1,050 13,000 1.5
1998 -- -- -- --
1999 8 22,400 305,000 34.5
2000 2 5,050 69,000 7.8
2001 -- -- -- --
2002 -- -- -- --
2003 -- -- -- --
2004 -- -- -- --
2005 -- -- -- --
2006 -- -- --
<FN>
---------------
(1) Excludes leases that expire in 1997 for which renewal leases or leases with
replacement tenants have been executed as of March 21, 1997.
</TABLE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
As a result of the public offering of interests as
described in Item 1, the Partnership had approximately
$77,762,000 (after deducting selling expenses and other offering
cost) with which to make investments in income-producing
commercial and residential real property, to pay legal fees and
other costs (including acquisition fees) related to such invest-
ments and for working capital requirements. A portion of such
proceeds was utilized to acquire the properties described in
Item 1 above.
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. As of the date of this
report, the Partnership is aware that 1,075 Interests have been
purchased by such unaffiliated third parties either pursuant to
such tender offers or through negotiated purchases. The
Partnership has recently received a request from another third
party 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 has invested in income-producing real
properties, primarily existing commercial properties. The
Partnership invested in such real estate on an unleveraged
all-cash acquisition basis. In future periods, the General
Partners do not intend to incur any indebtedness secured by a
mortgage or otherwise unless it is determined by the General
Partners that it is in the best interests of the Holders of
Interests to incur such indebtedness. Subject to such
determination, if Partnership reserves prove to be insufficient,
the Partnership may consider obtaining unsecured interim bank
lines of credit to fund certain significant repair or
replacement expenditures of the Partnership's investment
properties. <PAGE>
During the fourth quarter of 1996, the Partnership
distributed approximately $8,259,000 to the Holders of Interests
($93 per Interest) which included substantially all of the net
proceeds from the August 1996 sale of the Ashby Apartments (as
described below). The General Partners have deferred their
share of the distributions of proceeds from this sale. In
addition, the Partnership distributed $93,482 to the General
Partners which represented their share of operational cash flow
of the Partnership. At December 31, 1996, the Partnership had
cash and cash equivalents of approximately $14,973,000. Such
funds are available for leasing costs, for distributions to the
partners and for working capital requirements. The Partnership
distributed approximately $12,433,000 to the Holders of
Interests ($140 per interest) during the first quarter of 1997,
which represented substantially all of the proceeds from the
December 12, 1996 Riverview Plaza sale. The General Partners
deferred their share of the distribution of proceeds from this
sale. The Partnership has currently budgeted approximately
$420,000 in 1997 for tenant costs and improvements and other
capital expenditures. The Partnership's share of similar items
for its unconsolidated venture in 1997 is currently budgeted to
be approximately $145,000. Actual amounts expended in 1997 may
vary depending on a number of factors including actual leasing
activity, results of property operations, liquidity
considerations and other market conditions over the course of
the year. The source of capital for such items and for both
short-term and long-term future liquidity and distributions is
expected to be from net cash generated by the Partnership's
investment properties and from the sales of such investments.
In such regard, reference is made to the Partnership's property
specific discussions below and also to the Partnership's
disclosure of certain property lease expirations in Item 6.
LANDINGS SHOPPING CENTER
Occupancy at the property decreased to 60% at December 31,
1996, from 95% at December 31, 1995 primarily as a result of the
vacating of six tenants which occupied approximately 37,000
square feet. The JMB/Landings joint venture (the "venture") is
pursuing its legal remedies concerning the approximately $90,000
in aggregate arrearages due from various tenants, including
approximately $52,000 in delinquent rents due from a tenant
which had occupied 11,200 square feet and whose parent company
filed for bankruptcy protection earlier in 1996. In addition,
tenant leases representing approximately 22%, 15% and 8% of the
leasable space at the property are scheduled to expire in 1997,
1998 and 1999 respectively, not all of which are expected to be
renewed. The venture is conserving its working capital in order
to fund budgeted 1997 capital and tenant costs of approximately
$290,000 (most of which has not been expended at March 21, 1997)
and for potential future costs in connection with the lease-up
of the vacant space, for which the venture is actively pursuing
replacement tenants.
ASHBY APARTMENTS
On August 26, 1996 the CIP/Ashby joint venture sold the land
and related improvements of The Ashby at McLean Apartments. The
sale price was $21,400,000 (before selling costs). Reference is
made to the Notes for a further description of the sale.
<PAGE>
CARSON INDUSTRIAL PARK
Occupancy was 93% at December 31, 1996. Tenant leases
representing approximately 29% and 38% of the property's
leasable space are due to expire during 1997 and 1998,
respectively. Not all of these leases are expected to be
renewed. The Partnership has begun actively pursuing the sale
of this property. The Partnership has budgeted approximately
$210,000 in 1997 for capital and tenant costs (a substantial
portion of which has not been expended at March 21, 1997).
RANCHO FRANCISCAN APARTMENTS
In October 1996, a potential purchaser signed a letter of
intent to purchase this property. The sale of the property was
consummated on January 22, 1997 for a sale price of $8,302,200,
which was paid in cash at closing (net of selling costs and
prorations). The Partnership is expected to recognize a gain of
approximately $550,000 for financial reporting purposes
(primarily as a result of a $1,400,000 value impairment
provision recorded by the Partnership in 1995) and a loss of
approximately $735,000 for Federal income tax reporting purposes
in 1997.
COSTA MESA INDUSTRIAL PARK
Occupancy was 69% during 1996 as a result of a tenant who
converted its Chapter 11 bankruptcy to Chapter 7 bankruptcy in
late December 1995 and vacated its space in January 1996, at
which time this tenant was approximately $75,000 in arrears with
respect to its modified lease obligation. Accordingly, such
arrearages were reserved for in the accompanying financial
statements as of December 31, 1995. During 1996, a nominal
amount was received from the tenant and all remaining amounts
due were not collected.
The Partnership sold this property on March 3, 1997 for a
sale price of $4,456,000, which was paid in cash at closing (net
of selling costs and prorations). The Partnership is expected
to recognize a gain of approximately $1,150,000 for financial
reporting purposes (primarily as a result of a $3,400,000 value
impairment provision recorded by the Partnership in 1995) and a
loss of approximately $2,200,000 for Federal income tax
reporting purposes in 1997.
During 1996, the Partnership discovered subsoil
contamination at the property, the source of which was believed
to be a current tenant at the property. Subsequent discussions
between the Partnership and the tenant resulted in the tenant
agreeing to pay the costs of any required remediation of such
contamination, which was substantially completed at the date of
sale. In connection with the sale, the Partnership was released
and indemnified by the purchaser of the property from any future
liability related to such contamination, as well as all other
environmental problems at the property which were known by the
purchaser prior to the sale.
<PAGE>
SUNRISE TOWN CENTER
Occupancy was approximately 83% during 1996. 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. The Partnership has budgeted
approximately $135,000 in 1997 for capital and tenant costs (a
substantial portion of which has not been expended at March 21,
1997). A tenant occupying 24,115 square feet (approximately 19%
of the Partnership's owned net rentable area at the property)
vacated its space on March 7, 1997. This tenant's lease expires
in March 2010. The tenant has paid rent due under its lease
through March 31, 1997. The Partnership is currently reviewing
its legal remedies with respect to this tenant's lease.
RIVERVIEW PLAZA SHOPPING CENTER
In July 1996, a potential purchaser signed a letter of
intent to purchase this property. On December 12, 1996 the
Partnership sold the land and related improvements of the
Riverview Shopping Center. The sale price was $12,720,000 which
was paid in cash at closing (net of selling costs and
prorations). Reference is made to the Notes for a further
description of the sale. The Partnership recognized a gain of
$935,834 and $933,492 in 1996 for financial reporting and
Federal income tax reporting purposes, respectively.
GENERAL
The Partnership is carefully scrutinizing the
appropriateness of any discretionary expenditures, particularly
in relation to the amount of working capital it has available.
By conserving working capital, the Partnership will be in a
better position to meet future needs of its properties. In an
effort to reduce Partnership operating expenses, the Partnership
elected to make semiannual rather than quarterly distributions
of available operating cash flow beginning in November 1995.
After reviewing the Partnership's properties and their
competitive marketplace, the General Partners of the Partnership
expect to be able to liquidate these assets as quickly as
practicable. In such regard, as of December 31, 1996, the
Partnership's and its ventures' properties have been or on such
date were classified as held for sale or disposition and
therefore are not subject to continued depreciation. 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.
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 projected to approximate the Limited
Partners' original investment.
<PAGE>
RESULTS OF OPERATIONS
At December 31, 1996 the Partnership owned four operating
investment properties and an interest in one other operating
investment property.
The increase in cash and cash equivalents and the decrease
in rents and other receivables, investment properties, at cost,
accrued rents receivable, unearned rents, accrued real estate
taxes and tenant security deposits at December 31, 1996 as
compared to December 31, 1995 is attributable primarily to the
Partnership's sale of the Riverview Plaza Shopping Center in
December 1996 as described above. The Partnership distributed
approximately $12,433,000 to the Holders of Interest ($140 per
Interest) during the first quarter of 1997, which represented
substantially all of the proceeds from the Riverview Plaza sale.
The General Partners deferred their share of the distribution of
proceeds from this sale.
The decrease in investments in unconsolidated ventures, at
equity, at December 31, 1996 as compared to December 31, 1995 is
attributable primarily to the sale of the CIP/Ashby investment
property in August, 1996 as described above, and the
Partnership's receipt of approximately $7,034,000 of
distributions during the fourth quarter of 1996 from CIP/Ashby,
which represented sale proceeds and previously undistributed
property cash flow.
The decrease in investment properties, at cost at December
31, 1996 as compared to December 31, 1995 is also attributable
to the Partnership's recording of provisions for value
impairment totaling $2,050,000 for the Sunrise Town Center in
1996.
The increase in accounts payable at December 31, 1996 as
compared to December 31, 1995 is attributable primarily to
payments due for capital and tenant costs at certain of the
Partnership's properties at December 31, 1996.
The decrease in rental income for the year ended December
31, 1996 as compared to the year ended December 31, 1995 is
attributable primarily to a decrease in average occupancy and a
decrease in effective rents at the Sunrise Town Center in 1996.
An additional decrease in rental income for the year ended
December 31, 1996 as compared to the year ended December 31,
1995 is attributable to lower expense recoveries from tenants at
the Carson Industrial Park in 1996. The decrease in rental
income in 1995 as compared to 1994 is attributable primarily to
a decrease in rental income at the Costa Mesa Industrial Park
totaling approximately $150,000 as a result of the bankruptcy of
a major tenant (as discussed above) and tenant recovery refunds
resulting from refunds of prior years' real estate taxes
received in late 1995. An additional decrease in rental income
is attributable to lease renewals at rental rates lower than
previous rates on certain leases at the Carson and Costa Mesa
Industrial Parks and to tenant recovery refunds at the Carson
Industrial Park resulting from refunds of prior years' real
estate taxes received in 1995. Further decreases in rental <PAGE>
income are attributable to a $50,000 lease termination fee
collected from a tenant at the Sunrise Town Center in
February1994 in order to accommodate a replacement tenant and to
decreases in average occupancy and corresponding rental income
at the Riverview Plaza Shopping Center and the Sunrise Town
Center in 1995.
The increases in interest income for the years ended
December 31, 1996 and 1995 as compared to the year ended
December 31, 1994 are attributable primarily to larger average
outstanding balances in the Partnership interest-bearing cash
equivalents and investments during 1996 and 1995.
The decrease in depreciation expense for the year ended
December 31, 1996 as compared to the year ended December 31,1995
and in 1995 as compared to 1994 is attributable primarily to the
provisions for value impairment totaling $13,400,000 recorded at
September 30, 1995 on certain of the Partnership's investment
properties due to the uncertainty relating to the Partnership's
ability to recover the net carrying values of those properties.
Additional decreases in depreciation expense are attributable to
the suspension of depreciation as of April 1, 1996 on the
Riverview Plaza Shopping Center, the Costa Mesa Industrial Park
and the Rancho Franciscan Apartments, as such properties were
classified as held for sale as of April 1, 1996.
The increase in property operating expenses for the year
ended December 31, 1995 as compared to the year ended December
31, 1994 is due primarily to an increase in provision for
doubtful accounts at the Sunrise town Center in 1995.
Fees for professional services increased for the year ended
December 31, 1996 as compared to the year ended December 31,
1995 primarily as a result of expenses incurred in connection
with tender offer matters, as discussed above.
The increases in general and administrative expenses for
the years ended December 31, 1996 and 1995 as compared to the
year ended December 31, 1994 are attributable primarily to an
increase in reimbursable costs to affiliates of the General
Partners and the recognition of certain additional prior year
reimbursable costs to such affiliates in 1995, and to the timing
of the recognition of costs for certain outsourcing services and
certain printing costs in 1996 which substantially offset the
effect of the aforementioned items in 1995.
Provisions for value impairment totaling $2,050,000 were
recorded during the year ended December 31, 1996 for the Sunrise
Town Center investment property, and provisions totaling
$13,400,000 were recorded for the year ended December 31, 1995
for the Carson and Costa Mesa Industrial Parks, the Rancho
Franciscan Apartments, and the Sunrise Town Center investment
properties. All such provisions were made due to the
uncertainty relating to the Partnership's ability to recover the
net carrying value of these properties through future operations
or sale during the intended holding period (to no later than
1999) for these investments.
<PAGE>
The increase in Partnership's share of operations of
unconsolidated ventures for the year ended December 31, 1996 as
compared to the year ended December 31, 1995 is due primarily to
the Partnership's share ($1,750,000) of the provision for value
impairment record by the JMB/Landings joint venture in 1995. An
additional increase in Partnership's share of operations of
unconsolidated ventures for the year ended December 31, 1996 as
compared to the year ended December 31, 1995 is due to an
increase in the operations of CIP/Ashby as a result of the
suspension of depreciation at the Ashby at McLean investment
property, as such property was classified as held for sale as of
April 1, 1996. Such increase was partly offset by a decrease in
the operations of JMB/Landings, which resulted primarily from a
decrease in occupancy and a corresponding decrease in rental
income at the Landings Shopping Center in 1996. The increase in<PAGE>
Partnership's share of operations of unconsolidated ventures for
the year ended December 31, 1995 as compared to the year ended
December 31, 1994 is attributable primarily to the Partnership's
share ($2,347,468) of the provision for value impairment
recorded by CIP/Ashby for The Ashby in 1994.
The Partnership recognized a gain of $935,834 on the
December 1996 sale of the Riverview Plaza Shopping Center and
recognized its share of gain of $1,134,043 on the August 1996
sale of the Ashby at McLean Apartments by its unconsolidated
venture, CIP/Ashby.
INFLATION
Due to the decrease in the level of inflation in recent
years, inflation generally has not had a material effect on
rental income or property operating expenses.
Inflation is not expected to significantly impact future
operations due to the expected liquidation of the Partnership by
1999. However, to the extent that inflation in the future
periods would have an adverse impact on property operating
expenses, the effect would generally be offset by amounts
recovered from tenants as many of the long-term leases at the
Partnership's commercial properties have escalation clauses
covering increases in the cost of operating and maintaining the
properties as well as real estate taxes. Therefore, there
should be little effect on operating earnings if the properties
remain substantially occupied. In addition, certain leases at
the Partnership's shopping center investments contain provisions
which entitle the Partnership to participate in gross receipts
of tenants above fixed minimum amounts.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
INDEX
Independent Auditors' Report
Balance Sheets, December 31, 1996 and 1995
Statements of Operations, years ended December 31, 1996, 1995
and 1994
Statements of Partners' Capital Accounts (Deficits), years ended
December 31, 1996, 1995 and 1994
Statements of Cash Flows, years ended December 31, 1996, 1995
and 1994
Notes to Financial Statements
Schedule
--------
Real Estate and Accumulated Depreciation . . . . III
SCHEDULES NOT FILED:
All schedules other than the one indicated in the index have
been omitted as the required information is inapplicable or the
information is presented in the financial statements or related
notes.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
CARLYLE INCOME PLUS, LTD.:
We have audited the financial statements of Carlyle Income
Plus, Ltd. (a limited partnership) as listed in the accompanying
index. In connection with our audits of the financial
statements, we also have audited the financial statement
schedule as listed in the accompanying index. These financial
statements and financial statement schedule are the
responsibility of the General Partners of the Partnership. Our
responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by the General
Partners of the Partnership, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Carlyle Income Plus, Ltd. as of December 31, 1996 and 1995,
and the results of its operations and its cash flows for each of
the years in the three-year period ended December 31, 1996, in
conformity with generally accepted accounting principles. Also
in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken
as a whole, presents fairly, in all material respects, the
information set forth therein.
As discussed in the Notes to the financial statements, in
1996 the Partnership changed its method of accounting for long-
lived assets and long-lived assets to be disposed of to conform
with Statement of Financial Accounting Standards No. 121.
KPMG Peat Marwick LLP
Chicago, Illinois
March 21, 1997
<PAGE>
<TABLE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
ASSETS
------
<CAPTION>
1996 1995
--------- ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . $ 14,972,580 2,778,447
Rents and other receivables (net of allowance
for doubtful accounts of $88,784 in 1996 and
$263,462 in 1995). . . . . . . . . . . . . . . . . . . . . . . . 187,830 1,051,190
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 41,126 48,871
----------- -----------
Total current assets . . . . . . . . . . . . . . . . . . . . 15,201,536 3,878,508
----------- -----------
Investment properties, at cost -
Schedule III:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 12,276,993
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . -- 33,386,378
----------- -----------
-- 45,663,371
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . -- 9,983,281
----------- -----------
Total properties held for
investment, net of accumulated
depreciation. . . . . . . . . . . . . . . . . . . . . . . . -- 35,680,090
Properties held for sale or disposition. . . . . . . . . . . . . . . 22,320,312 --
----------- ----------
Total investment properties. . . . . . . . . . . . . . . . . 22,320,312 35,680,090
----------- ----------
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
1996 1995
---------- ----------
Investments in unconsolidated ventures, at
equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,177,052 9,505,409
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 57,769 87,955
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . 187,082 415,509
----------- ------------
$ 41,943,751 49,567,471
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
------------------------------------------------------
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . $ 431,147 93,068
Amounts due to affiliates. . . . . . . . . . . . . . . . . . . . . . 16,714 46,010
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,276 71,350
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . -- 937,812
---------- -----------
Total current liabilities. . . . . . . . . . . . . . . . . . 469,137 1,148,240
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . 180,052 194,801
---------- -----------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . 649,189 1,343,041
---------- -----------
Commitments and contingencies
Partners' capital accounts (deficits)
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . 25,000 25,000
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . . . 1,885,545 575,461
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . (1,910,545) (1,723,581)
---------- -----------
-- (1,123,120)
---------- -----------
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
1996 1995
---------- -----------
Limited partners (88,808.058 Interests):
Capital contributions, net of offering costs . . . . . . . . . . . 77,762,167 77,762,167
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . . . 9,993,323 8,011,000
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . (46,460,928) (36,425,617)
---------- -----------
41,294,562 49,347,550
---------- -----------
Total partners' capital accounts . . . . . . . . . . . . . . 41,294,562 48,224,430
---------- -----------
$ 41,943,751 49,567,471
========== ===========
<FN>
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<CAPTION>
1996 1995 1994
----------- ---------- ----------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . $ 6,148,871 6,339,935 6,792,721
Interest income. . . . . . . . . . . . . . . . . . . . 209,049 227,955 130,408
----------- ----------- ----------
6,357,920 6,567,890 6,923,129
----------- ----------- ----------
Expenses:
Depreciation . . . . . . . . . . . . . . . . . . . . . 525,207 1,338,869 1,405,298
Property operating expenses. . . . . . . . . . . . . . 2,589,928 2,516,910 2,344,150
Professional services. . . . . . . . . . . . . . . . . 224,863 87,581 101,110
Amortization of deferred expenses. . . . . . . . . . . 36,169 50,516 32,764
General and administrative . . . . . . . . . . . . . . 280,723 282,759 169,764
Provisions for value impairment. . . . . . . . . . . . 2,050,000 13,400,000 --
----------- ----------- -----------
5,706,890 17,676,635 4,053,086
----------- ----------- -----------
Operating earnings (loss). . . . . . . . . . . 651,030 (11,108,745) 2,870,043
Partnership's share of operations
of unconsolidated ventures . . . . . . . . . . . . . . 571,500 (1,165,684) (1,795,473)
----------- ----------- -----------
Net operating earnings (loss) . . . . . . . . 1,222,530 (12,274,429) 1,074,570
Gain and sale and Partnership's share
of gain on sale of investment properties . . . . . . 2,069,877 -- --
----------- ----------- -----------
Net earnings (loss) . . . . . . . . . . . . . $ 3,292,407 (12,274,429) 1,074,570
----------- ----------- -----------
Net earnings (loss) per limited
partnership interest:
Net operating earnings (loss) . . . . . . . . 13.08 (131.30) 11.49
Gain on sale and Partnership's share of
gain on sale of investment property 9.24 -- --
----------- ----------- ----------
Net earnings (loss) . . . . . . . . . . . . . $ 22.32 (131.30) 11.49
=========== =========== ===========
<FN> See accompanying notes to financial statements
</TABLE> <PAGE>
<TABLE> CARLYLE INCOME PLUS, LTD.
(a limited partnership)
STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<CAPTION>
General Partners
---------------------------------------------------------
Net
Earnings Cash
Contributions (Loss) Distributions Total
------------- ---------- ------------- ------------
<S> <C> <C> <C> <C>
Balance at December 31, 1993 . . . . . . . $ 25,000 1,135,455 (1,279,541) (119,086)
Net earnings (loss). . . . . . . . . . . . -- 53,728 -- 53,728
Cash distributions ($40.00 per
limited partnership interest).. . . . . . -- -- (186,964) (186,964)
--------- --------- --------- ---------
Balance at December 31, 1994 . . . . . . . 25,000 1,189,183 (1,466,505) (252,322)
Net earnings (loss). . . . . . . . . . . . -- (613,722) -- (613,722)
Cash distributions ($55.00 per
limited partnership interest) . . . . . . -- -- (257,076) (257,076)
--------- --------- ---------- ---------
Balance at December 31,
1995 . . . . . . . . . . . . . . . . . . . 25,000 575,461 (1,723,581) (1,123,120)
Net earnings (loss) . . . . . . . . . . . -- 1,310,084 -- 1,310,084
Cash distributions ($113.00 per limited
partnership interest) . . . . . . . . . . -- -- (186,964) (186,964)
--------- --------- --------- ---------
Balance at December 31,
1996 . . . . . . . . . . . . . . . . . . . $ 25,000 1,885,545 (1,910,545) --
========= ========== ========== ========== <PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS) - CONTINUED
Limited Partners (88,808.058 Interests)
------------------------------------------------------
Contributions, Net
Net of Earnings Cash
Offering Costs (Loss) Distributions Total
-------------- -------- ------------- ---------
Balance at December 31, 1993 . . . . . . . . . 77,762,167 18,650,865 (27,988,849) 68,424,183
Net earnings (loss). . . . . . . . . . . . . . -- 1,020,842 -- 1,020,842
Cash distributions ($40.00 per
limited partnership interest).. . . . . . . . -- -- (3,552,324) (3,552,324)
---------- --------- ----------- ----------
Balance at December 31, 1994 . . . . . . . . . 77,762,167 19,671,707 (31,541,173) 65,892,701
Net earnings (loss). . . . . . . . . . . . . . -- (11,660,707) -- (11,660,707)
Cash distributions ($55.00 per
limited partnership interest) . . . . . . . . -- -- (4,884,444) (4,884,444)
---------- ---------- ----------- ----------
Balance at December 31, 1995 . . . . . . . . . 77,762,167 8,011,000 (36,425,617) 49,347,550
Net earnings (loss) . . . . . . . . . . . . . -- 1,982,323 -- 1,982,323
Cash distributions ($113.00 per
limited partnership interest) . . . . . . . . (10,035,311) (10,035,311)
---------- ---------- ----------- ----------
Balance at December 31,
1996 . . . . . . . . . . . . . . . . . . . . . 77,762,167 9,993,323 (46,460,928) 41,294,562
========== ========== ========== ==========
<FN>
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<CAPTION>
1996 1995 1994
---------- ----------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . $ 3,292,407 (12,274,429) 1,074,570
Items not requiring (providing) cash or
cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 525,207 1,338,869 1,405,298
Amortization of deferred expenses. . . . . . . . . . . . . . . 36,169 50,516 32,764
Provisions for value impairment. . . . . . . . . . . . . . . . 2,050,000 13,400,000 --
Partnership's share of operations of . . . . . . . . . . . . .
unconsolidated ventures, net of distributions.. . . . . . . . (571,500) 1,165,684 2,041,247
Partnership's share of gain on sale of property
by unconsolidated venture . . . . . . . . . . . . . . . . . . (1,134,043) -- --
Gain on sale of investment property. . . . . . . . . . . . . . (935,834) -- --
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . 863,360 (212,727) 108,493
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . 7,745 (4,211) 4,320
Accrued rents receivable . . . . . . . . . . . . . . . . . . . (19,403) 60,364 (19,186)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . 338,079 (15,397) 23,551
Amounts due to affiliates. . . . . . . . . . . . . . . . . . . (29,296) 15,345 (30,774)
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . (50,074) (27,245) 39,328
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . (937,812) (16,716) (13,717)
Tenant security deposits . . . . . . . . . . . . . . . . . . . (14,749) (21,003) (3,806)
---------- ---------- ----------
Net cash provided by (used in) operating activities 3,420,256 3,459,050 4,662,088
---------- ---------- ----------
Cash flows from investing activities:
Net sales and maturities of short-term investments . . . . . . -- 931,575 252,116
Cash proceeds from sale of investment property . . . . . . . . 12,447,147 -- --
Additions to investment properties . . . . . . . . . . . . . . (445,944) (239,018) (206,514)
Partnership's distributions from
unconsolidated ventures . . . . . . . . . . . . . . . . . . . 7,033,900 637,500 1,503,727
Payment of deferred expenses . . . . . . . . . . . . . . . . . (38,951) (54,285) (32,378)
---------- ---------- ----------
Net cash provided by (used in) investing activities 18,996,152 1,275,772 1,516,951
---------- ---------- ----------
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS - CONTINUED
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
---------- ---------- ----------
Cash flows from financing activities:
Distributions to limited partners. . . . . . . . . . . . . . . (10,035,311) (4,884,444) (3,552,324)
Distributions to general partners. . . . . . . . . . . . . . . (186,964) (257,076) (186,964)
---------- ---------- ----------
Net cash provided by (used in) financing
activities. . . . . . . . . . . . . . . . . . . . . . (10,222,275) (5,141,520) (3,739,288)
---------- ---------- ----------
Net increase (decrease) in cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . 12,194,133 (406,698) 2,439,751
Cash and cash equivalents, beginning
of year . . . . . . . . . . . . . . . . . . . . . . . 2,778,447 3,185,145 745,394
---------- ---------- ----------
Cash and cash equivalents, end of year . . . . . . . $ 14,972,580 2,778,447 3,185,145
========== ========== ==========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . $ -- -- --
========== ========== ==========
Non-cash investing and financing activities. . . . . . . . . $ -- -- --
========== ========== ==========
<FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
OPERATIONS AND BASIS OF ACCOUNTING
GENERAL
The Partnership holds (either directly or through joint
ventures) an equity investment portfolio of United States real
estate. Business activities consist of rentals to a wide variety
of commercial and retail companies, rentals to individuals, and
the ultimate sale or disposition of such real estate. The
Partnership currently expects to conduct an orderly liquidation
of its remaining investment portfolio and wind up its affairs not
later than December 31, 1999.
The equity method of accounting has been applied in the
accompanying financial statements with respect to the
Partnership's interests in the two joint ventures known as
JMB/Landings Associates ("JMB/Landings") and CIP/Ashby Partners
("CIP/Ashby") prior to its sale in August 1996. Accordingly, the
accompanying financial statements do not include the accounts of
JMB/Landings or CIP/Ashby.
The Partnership's records are maintained on the accrual basis
of accounting as adjusted for Federal income tax reporting
purposes. The accompanying financial statements have been
prepared from such records after making appropriate adjustments
to reflect the Partnership's accounts in accordance with
generally accepted accounting principles ("GAAP"). Such
adjustments are not recorded in the records of the Partnership.
The effect of these items for the years ended December 31, 1996
and 1995 is summarized as follows:
<PAGE>
<TABLE>
<CAPTION>
1996 1995
------------------------- ------------------------
TAX BASIS TAX BASIS
GAAP BASIS (UNAUDITED) GAAP BASIS (UNAUDITED)
----------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . . . . . . $ 41,943,751 69,879,029 49,567,471 78,430,795
Partners' capital
accounts
(deficits):
General partners . . . . . . . . . . . -- 224,100 (1,123,120) (489,292)
Limited partners . . . . . . . . . . . 41,294,562 69,112,706 49,347,550 77,645,790
Net earnings (loss):
General partners . . . . . . . . . . . 1,310,084 900,356 (613,722) 158,172
Limited partners . . . . . . . . . . . 1,982,323 1,502,227 (11,660,707) 3,005,275
Net earnings (loss) per
limited partnership interest. . . . . . 22.32 16.92 (131.30) 33.84
========= ========== ========= =========
The net earnings (loss) per limited partnership interest ("Interest") is based upon the number
of Interests outstanding at the end of each period (88,808.058).
</TABLE>
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Although certain leases of the Partnership provide for
tenant occupancy during periods for which no rent is due and/or
increases in minimum lease payments over the term of the lease,
the Partnership accrues rental income for the full period of
occupancy on a straight-line basis.
Deferred expenses consist primarily of leasing fees which
are amortized over the terms of the related leases using the
straight-line method.
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 at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Statement of Financial Accounting Standards No. 95 requires
the Partnership to present a statement which classifies
receipts and payments according to whether they stem from
operating, investing or financing activities. The required
information has been segregated and accumulated according to the
classifications specified in the pronouncement. Partnership
distributions from unconsolidated ventures are considered cash
flow from operating activities only to the extent of the
Partnership's cumulative share of net earnings. In addition,
the Partnership records amounts held in U.S. Government
obligations at cost, which approximates market. For the
purposes of these statements, the Partnership's policy is to
consider all such amounts held with original maturities of three
months or less ($14,708,472 and $2,556,737 at December 31, 1996
and 1995, respectively) as cash equivalents, which includes
investments in an institutional mutual fund which holds United
States Government obligations, with any remaining amounts
(generally with original maturities of one year or less)
reflected as short-term investments being held to maturity.
No provision for state or Federal income taxes has been made
as the liability for such taxes is that of the partners rather
than the Partnership. However, in certain instances, the
Partnership has been required under applicable law to remit
directly to the taxing authorities amounts representing
withholding from distributions paid to partners.
The Partnership has acquired, either directly or through
joint ventures, interests in three shopping centers, two
industrial parks and two apartment buildings, two of which
properties have been sold at December 31, 1996. The remaining
properties were operating at December 31, 1996. The cost of the
investment properties represents the total cost to the
Partnership, including certain acquisition costs.
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Depreciation on the properties has been provided over the
estimated useful lives of the various components as follows:
Years
-----
Buildings and improvements -- straight-line . . . . . 30
Personal property -- straight-line. . . . . . . . . . 5
====
Maintenance and repairs are charged to operations as
incurred. Significant betterments and improvements are
capitalized and depreciated over their estimated useful lives.
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. SFAS 121 requires
that the Partnership record an impairment loss on its properties
to be held for investment whenever their carrying value cannot
be fully recovered through estimated undiscounted future cash
flows from their operations and sale. The amount of the
impairment loss to be recognized would be the difference between
the property's carrying value and the property's estimated fair
value. 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. In accordance with
SFAS 121, any properties identified as "held for sale or
disposition" are no longer depreciated. Adjustments for
impairment loss for such properties (subsequent to the date of
adoption of SFAS 121) are made in each period as necessary to
report these properties at the lower of carrying value or fair
value less costs to sell. The adoption of SFAS 121 did not have
any significant effect on the Partnership's financial position,
results of operations or liquidity.
In response to the uncertainty relating to the Partnership's
ability to recover the net carrying value of the Carson and
Costa Mesa Industrial Parks, the Rancho Franciscan Apartments,
and the Sunrise Town Center investment properties through future
operations or sale, as the Partnership had shortened its
intended holding period for these investments to not later than
1999, the Partnership, as a matter of prudent accounting
practice and for financial reporting purposes, recorded
provisions for value impairment at September 30, 1995 of
$4,300,000, $3,400,000, $1,400,000, and $4,300,000,respectively,
for a total of $13,400,000 in 1995 for these properties. The
Partnership recorded additional provisions totaling $2,050,000
in 1996 for the Sunrise Town Center. Such provisions were
recorded to reduce the net basis of the investment properties to
their then estimated fair values, less costs to sell as
applicable.
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
The results of operations for properties classified as held
for sale or disposition as of December 31, 1996 or sold during
the past three years were $1,000,474, ($10,969,209) and
$2,982,509, respectively, for the years ended December 31, 1996,
1995 and 1994.
In addition, the accompanying financial statements include
$571,500, $(1,165,684) and $(1,795,473), respectively, of the
Partnership's share of total operations of $1,655,382,
$(1,900,577) and $(6,093,870) for the years ended December 31,
1996, 1995 and 1994 of unconsolidated properties held for sale
as of December 31, 1996 or sold in the past three years.
VENTURE AGREEMENTS - GENERAL
The Partnership is a party to one joint venture agreement at
December 31, 1996. The Partnership acquired, through this
venture, a shopping center. Pursuant to such agreement, the
Partnership made initial capital contributions of approximately
$6,550,000 (before legal and other acquisition costs). Under
certain circumstances, either pursuant to the venture agreements
or due to the Partnership's obligations as a general partner,
the Partnership may be required to make additional cash
contributions to the venture.
INVESTMENT PROPERTIES
Riverview Plaza Shopping Center
In August 1987, the Partnership acquired the Riverview Plaza
Shopping Center located in Chicago, Illinois. The Partnership's
purchase price for the shopping center was $14,000,000, which
was paid in cash at closing. An affiliate of the General
Partners of the Partnership managed the property for a fee equal
to a percentage of the property's minimum rents.
The Partnership had been actively pursuing the sale of the
Riverview Plaza Shopping Center which was classified as held for
sale as of April 1, 1996 and therefore had not been subject to
continued depreciation as of that date. In July 1996, the
Partnership signed a letter of intent to sell the property to an
unaffiliated third party. On December 12, 1996 the Partnership
sold the land and related improvements of the Riverview Plaza
shopping center. The sale price was $12,720,000 and was paid in
cash at closing (net of selling costs and prorations). The
Partnership recognized a gain of $935,834 for financial
reporting purposes and a gain of $933,492 for Federal income tax
purposes in 1996.
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Carson and Costa Mesa Industrial Parks
In November 1988, the Partnership acquired two separate
groups of multi-tenant industrial buildings known as Carson
Industrial Park and Costa Mesa Industrial Park, both located in
Los Angeles County, California. The Partnership's purchase
price for Carson Industrial Park was $9,963,173, which was paid
in cash at closing. The Partnership's purchase price for Costa
Mesa Industrial Park was $7,046,108, which was paid in cash at
closing.
The Partnership had been actively pursuing the sale of the
Costa Mesa Industrial Park which was classified as held for sale
as of April 1, 1996 and therefore had not been subject to
continued depreciation as of that date. On March 3, 1997, the
Partnership completed the sale of the property for a sale price
of $4,456,000. The sale price was paid in cash at closing (net
of selling costs and prorations) and is expected to result in a
gain of approximately $1,150,000 (due primarily to the provision
for value impairment of $3,400,000 recorded in September, 1995)
for financial reporting purposes and is expected to result in a
loss of approximately $2,200,000 for Federal income tax purposes
in 1997.
The Partnership is actively pursuing the sale of the Carson
Industrial Park property which has been classified as held for
sale as of October 1, 1996 and therefore has not been subject to
continued depreciation as of such date.
Rancho Franciscan Apartments
In December 1988, the Partnership acquired the Rancho
Franciscan Apartments located in Santa Barbara, California. The
Partnership's purchase price for the apartment complex was
$10,100,000, which was paid in cash at closing.
The Partnership had been actively pursuing the sale of the
Rancho Franciscan Apartments which was classified as held for
sale as of April 1, 1996 and therefore has not been subject to
continued depreciation as of that date. In October 1996, the
Partnership signed a letter of intent to sell the property to an
unaffiliated third party. On January 22, 1997 the Partnership
sold the land and related improvements of the Rancho Franciscan
Apartments. The sale price was $8,302,000 and was paid in cash
at closing (net of selling costs and prorations). The
Partnership expects to recognize a gain of approximately
$550,000 for financial reporting purposes (primarily as a result
of a $1,400,000 value impairment recorded by the Partnership in
1995) and expects to recognize a loss of approximately $735,000
for Federal income tax purposes in 1997.
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Sunrise Town Center
In October 1989, the Partnership acquired the Sunrise Town
Center shopping center located in Sunrise, Florida. The
shopping center is anchored by two department stores which are
owned independently and were not purchased by the Partnership.
The shopping center (excluding the anchor stores) consists
of approximately 76,170 square feet of gross leasable area. The
Partnership's purchase price for the shopping center was
$14,250,000, all of which was paid in cash at closing.
A tenant occupying 24,115 square feet (approximately 19% of
the Partnership's owned net rentable area at the property)
vacated its space on March 7, 1997. This tenant's lease expires
in March 2010. The tenant has paid rent due under its lease
through March 31, 1997. The Partnership is currently reviewing
its legal remedies with respect to this tenant's lease.
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.
Such provisions were recorded to reflect the then estimated fair
value of the property based upon an analysis of discounted
estimated future cash flows over the projected holding period.
As the Partnership has committed to a plan to sell the
property, the property has been classified as held for sale as
of December 31, 1996 and therefore will not be subject to
continued depreciation.
JMB/Landings
In August 1988, the Partnership, through JMB/Landings
Associates, a joint venture partnership with Carlyle Income
Plus, L.P.-II ("CIP-II"), another partnership sponsored by the
General Partners of the Partnership, acquired a 50% interest in
a shopping center located in Sarasota, Florida and known as The
Landings Shopping Center.
JMB/Landings purchased the shopping center for a purchase
price of $13,100,000 which was paid in cash at closing. The
Partnership contributed one-half of such amount ($6,550,000) to
JMB/Landings for its 50% interest. As certain specified minimum
occupancy and income levels were not achieved, the purchase
price was reduced by approximately $532,000 in 1990.
The terms of the JMB/Landings partnership agreement provide
generally that annual cash flow, sale proceeds and tax items
will be distributed or allocated based on the capital
contributions made by each partner. Distributions and<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
allocations to date have been made (and any obligations to make
additional capital contributions will be made) 50% to the
Partnership.
Occupancy at the Landings Shopping Center decreased to 60%
at December 31, 1996, from 95% at December 31, 1995 primarily as
a result of the vacating of six tenants which occupied
approximately 37,000 square feet. JMB/Landings is pursuing its
legal remedies concerning the approximately $90,000 in aggregate
arrearages due from various tenants, including approximately
$52,000 in delinquent rents due from a tenant which had occupied
11,200 square feet whose parent company filed for bankruptcy
protection earlier in 1996. In addition, tenant leases
representing approximately 22%, 15% and 8% of the leasable
space at the property are scheduled to expire in 1997, 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 $290,000
and for potential future costs in connection with the lease-up
of the vacant space, for which JMB/Landings is actively pursuing
replacement tenants. Furthermore, as of December 31, 1996,
JMB/Landings has committed to a plan to sell the property and
therefore the property was classified by the JMB/Landings
venture as held for sale and will not be subject to continued
depreciation.
In response to uncertainty relating to the ability to
recover the net carrying value of the property through future
operations and sale, JMB/Landings, for financial reporting
purposes, recorded a provision for value impairment at September
30, 1995 in the amount of $3,500,000 (of which the Partnership's
share was $1,750,000). Such provision was recorded to reduce
the net basis of the investment property to its then estimated
fair value. There can be no assurance that any estimated fair
value of this investment property would ultimately be obtained
by the Partnership in any future sale or disposition
transaction. 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 for
the years ended December 31, 1996, and 1995 and 1994 aggregated
$43,866, $45,840, and $46,008 respectively.
CIP/Ashby
In February 1990, the Partnership, through CIP/Ashby, a
joint venture partnership with CIP - II, acquired a 31% interest
in an apartment building located in McLean, Virginia and known
as The Ashby at McLean Apartments ("The Ashby"). The Ashby has
250 units, commercial space and related parking facilities.
CIP/Ashby's total cash investment in The Ashby was $28,705,000,
of which the Partnership's share was approximately $8,899,000.
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
In response to the uncertainty relating to CIP/Ashby's
ability to recover the net carrying value of The Ashby through
future operations or sale, CIP/Ashby, as a matter of prudent
accounting practice and for financial reporting purposes,
recorded a provision for value impairment at September 30, 1994
in the amount of $7,572,479 (of which the Partnership's share
was $2,347,468). Such provision was recorded to reduce the net
basis of the investment property to its then estimated fair
value.
In July 1996, CIP/Ashby entered into a contract with a
potential purchaser for the sale of this property for a sale
price of $21,400,000, payable in cash at closing (net of selling
costs and prorations). Pursuant to such contract, the property
was sold on August 26, 1996. CIP/Ashby recognized a gain on
sale of $3,658,205 for financial reporting purposes (of which
the Partnership's share is $1,134,043), primarily as a result of
a $7,572,479 value impairment recorded by the venture in 1994
(of which the Partnership's share was $2,347,468), as discussed
above, and recognized a loss of approximately $3,549,000 for
Federal income tax reporting purposes in 1996 (of which the
Partnership's share was approximately $1,100,000).
As CIP/Ashby had committed to a plan to sell the property,
the property was classified as held for sale as of April 1,
1996, and therefore, was not subject to continued depreciation
as of that date.
The terms of the CIP/Ashby partnership agreement provided
generally that annual cash flow, sale proceeds and tax items be
distributed or allocated based on the capital contributions made
by each partner. Distributions and allocations have been made
31% to the Partnership.
A former affiliate of the General Partners managed the
property for a fee equal to 5% of the property's gross receipts.
The former affiliate also operated the underground parking
facilities which it leased from CIP/Ashby.
MANAGEMENT AGREEMENTS
All of the Partnership's properties are managed by an
affiliate of the General Partners or a former affiliate of the
General Partners for fees computed as a percentage of certain
rents received by the properties. In December 1994, one of the
affiliated property managers sold substantially all of its
assets and assigned its interest in its management contracts to
an unaffiliated third party. In addition, certain of the
management personnel of the property manager became management
personnel of the purchaser and its affiliates. The successor to
the affiliated property manager's assets is or was acting as the
property manager of the Carson and Costa Mesa Industrial Parks
and the Rancho Franciscan and Ashby at McLean Apartments after
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
the assignment on the same terms that existed prior to the
assignment.
PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, profits
and losses of the Partnership from operations are generally
allocated first to the General Partners in an amount equal to
the greater of the General Partners' share of "Disbursable Cash"
(as described below) or 1%. Profits from the sale or other
disposition of investment properties generally are allocated
first to the General Partners in an amount equal to the greater
of the General Partners' share of cash distributions of the
proceeds of any such sale or other disposition (as described
below) or 1% of the total profits from any such sale or other
disposition, plus an amount which will reduce deficits (if any)
in the General Partners' capital accounts to a level consistent
with the gain anticipated to be realized from the sale of
properties. Losses from the sale or other disposition of
investment properties are to be allocated 1% to the General
Partners.
The General Partners have made capital contributions of
$25,000. Except under certain limited circumstances upon
dissolution or liquidation of the Partnership or the General
Partners' interests in the Partnership, the General Partners are
not required to make any additional capital contributions.
"Disbursable Cash" of the Partnership is to be distributed 93%
to the Holders of Interests and 7% to the General Partners;
provided, however, that receipt by the General Partners of two
of such seven percentage points of disbursable cash otherwise
distributable to them in any fiscal year will be subject to
receipt by the Holders of Interests of a 6% return for such year
on their "Average Adjusted Capital Contribution" on a
noncumulative basis. Distributions of "Sale Proceeds" are to be
initially allocated 99% to the Holders of Interests and 1% to
the General Partners. However, upon the completion of the
liquidation of the Partnership and final distribution of all
Partnership funds, all previous distributions of sale proceeds
to the General Partners are to be repaid to the Partnership to
the extent that the Holders of Interests have not received sale
proceeds equal to their initial capital investment plus a 6%
return thereon (as defined). After receipt by the Holders of
Interests of such preferred return, further distributions of
sale proceeds are to be allocated to the General Partners until
the General Partners have received distributions in an amount
equal to 3% of the aggregate selling prices of all properties
sold, with the remaining balance to be distributed 85% to the
Holders of Interests and 15% to the General Partners; provided,
however, that such 3% and 15% of sale proceeds distributable to
the General Partners are subordinate to the Holders of
Interests' receipt of a 9% return on their investment. Since
the Holders of Interests are not expected to receive an amount
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
equal to their initial contributed capital from the aggregate
sale proceeds of all of the Partnership's investment properties,
the General Partners are deferring their 1% share in the
distributions of proceeds from sales at this time.
LEASES - AS PROPERTY LESSOR
At December 31, 1996, the Partnership's principal assets are
one shopping center, two industrial parks and an apartment
complex. The Partnership has determined that all leases
relating to these properties are properly classified as
operating leases; therefore, rental income is reported when
earned and the costs of each of the properties, excluding the
cost of land, is depreciated over the estimated useful lives.
Leases with commercial tenants range in term from one to
thirteen remaining years and provide for fixed minimum rent and
partial reimbursement of operating costs. Revenue from
commercial tenants in 1996 approximates 22% of total rental
income. In addition, certain leases with shopping center
tenants provide either for additional rent based upon a
percentage of the tenants' sales volume or allow for annual
increases in fixed minimum rents. Revenue from shopping center
tenants approximates 59% of total rental income. With respect
to the Partnership's shopping center investments, a substantial
portion of the ability of retail tenants to honor their leases
is dependent upon the retail economic sector.
Cost and accumulated depreciation of the leased assets are
summarized as follows at December 31, 1996:
Shopping center:
Cost. . . . . . . . . . . . . . . . . $ 8,664,621
Accumulated depreciation 2,057,598
-----------
6,607,023
-----------
Industrial parks:
Cost. . . . . . . . . . . . . . . . . 11,446,697
Accumulated depreciation. . . . . . . 3,203,128
-----------
8,243,569
-----------
Apartment building:
Cost. . . . . . . . . . . . . . . . . 9,136,450
Accumulated depreciation. . . . . . . 1,666,730
-----------
7,469,720
-----------
Total . . . . . . . . . . . $ 22,320,312
===========
<PAGE>
Minimum lease payments (excluding Costa Mesa Industrial Park
which was sold in March 1997) including amounts representing
executory costs (e.g., taxes, maintenance, insurance) and any
related profit in excess of specific reimbursements, to be
received in the future under the above operating commercial
lease agreements, are as follows:
1997. . . . . . . . . . . . . . . . . . . . $ 1,431,000
1998. . . . . . . . . . . . . . . . . . . . 996,000
1999. . . . . . . . . . . . . . . . . . . . 781,000
2000. . . . . . . . . . . . . . . . . . . . 560,000
2001. . . . . . . . . . . . . . . . . . . . 295,000
Thereafter. . . . . . . . . . . . . . . . . 2,272,000
-----------
$ 6,335,000
===========
Minimum lease payments above exclude annual minimum rents in
amounts ranging from approximately $207,000 to $225,000 per year
from a tenant at Sunrise Town Center which vacated in March 1997
and whose lease expires in March 2010. The Partnership is
currently reviewing its legal remedies with respect to this
tenant's lease.
Contingent rent (based upon sales by property tenants)
included in rental income was $28,479, $18,387, and $16,559 for
the years ended December 31, 1996, 1995 and 1994, respectively.
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 December 31, 1996,
1995 and 1994 are as follows:
UNPAID AT
DECEMBER 31,
1996 1995 1994 1996
--------- --------- --------- ----------
Property management
and leasing
fees 96,140 89,917 207,039 5,034
Insurance
commissions 15,712 18,132 16,419 --
Reimbursement (at
cost) for
accounting
services 5,389 71,651 73,509 399
Reimbursement
(at cost)
for portfolio
management
services 21,112 27,760 14,856 7,308<PAGE>
Reimbursement
(at cost)
for legal
services 7,861 1,565 2,548 3,973
Reimbursement
(at cost)
for administrative
charges and
other out of
pocket expenses 774 112,165 3,568 --
-------- ---------------------- -------
146,988 321,190 317,939 16,714
======== ======== ======== ========
[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.
<PAGE>
<TABLE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONCLUDED
INVESTMENTS IN UNCONSOLIDATED VENTURES
Summary financial information for JMB/Landings and CIP/Ashby, which was sold in August 1996, as of
and for the years ended December 31, 1996 and 1995 is as follows:
<CAPTION>
1996 1995
----------- ----------
<S> <C> <C>
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,248,636 1,083,297
Current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . (35,771) (63,315)
----------- ----------
Working capital. . . . . . . . . . . . . . . . . . . . . . . . . 1,212,865 1,019,982
----------- ----------
Investment properties, net . . . . . . . . . . . . . . . . . . . . . . . . -- 24,646,121
Property held for sale or disposition. . . . . . . . . . . . . . . . . . . 7,075,078 --
Other assets, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,504 215,812
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31,382) (137,437)
Venture partner's equity . . . . . . . . . . . . . . . . . . . . . . . . . (4,191,013) (16,239,069)
----------- -----------
Partners' capital. . . . . . . . . . . . . . . . . . . . . . . .$ 4,177,052 9,505,409
=========== ===========
Represented by:
Invested capital . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 14,644,795 14,644,795
Cumulative distributions . . . . . . . . . . . . . . . . . . . . . . . . (11,476,451) (4,442,551)
Cumulative earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . 1,008,708 (696,835)
----------- -----------
$ 4,177,052 9,505,409
=========== ===========
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONCLUDED
<CAPTION>
JMB/LANDINGS
1996 1995
---------- ----------
<S> <C> <C>
Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 1,038,681 1,272,150
========== ===========
Expenses applicable to operating earnings
(including $3,500,000 provision for value impairment
in 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 731,675 4,306,385
========== ==========
Operating earnings (loss). . . . . . . . . . . . . . . . . . . . . . . . .$ 307,006 (3,034,235)
========== ==========
Partnership's share of operating earnings (loss) . . . . . . . . . . . . .$ 153,503 (1,517,118)
=========== ==========
CIP/ASHBY (property sold August 26, 1996)
Total Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 2,683,046 3,290,699
========== ==========
Expenses applicable to operating earnings (depreciation
suspended April 1, 1996). . . . . . . . . . . . . . . . . . . . . . . . .$ 1,334,670 2,157,041
=========== ==========
Operating earnings (loss). . . . . . . . . . . . . . . . . . . . . . . . .$ 1,348,376 1,133,658
=========== ==========
Partnership's share of operating earnings (loss) . . . . . . . . . . . . .$ 417,997 351,434
=========== ==========
Gain on sale of property . . . . . . . . . . . . . . . . . . . . . . . . .$ 3,658,205 --
=========== ==========
Partnership's share of gain on sale of property. . . . . . . . . . . . . .$ 1,134,043 --
=========== ==========
<PAGE>
Also, for the year ended December 31, 1994, total income was $1,224,744 and $3,253,181; expenses
applicable to operating earnings were $733,197 and $9,838,598 (including a $7,572,479 provision for
value impairment), and net operating earnings (loss) was $491,547 and $(6,585,417), respectively,
for JMB/Landings and CIP/Ashby.
SUBSEQUENT EVENT
In February 1997, the Partnership paid a distribution of $12,433,128 ($140.00 per Interest) to
the Holders of Interests from the December 1996 sale of the Riverview Plaza Shopping Center. The
General Partners deferred their share of the distribution of proceeds from the sale.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE III
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
<CAPTION>
Cost
Capitalized
Subsequent to
Initial Cost to Partnership (A) Acquisition
-------------------------------- ------------
Land,
Buildings Provisions
Buildings and and for Value
Land Improvements Improvements Impairment (B)
------ ------------ ------------ ---------------
<S> <C> <C> <C> <C>
Description:
- -----------
Shopping Center:
Sunrise Town Center . . . . . . . . . . $ 5,612,741 8,929,333 434,376 (6,311,829)
Industrial Parks:
Carson Industrial Park. . . . . . . . . 3,168,513 7,087,841 1,151,947 (4,300,000)
Costa Mesa
Industrial Park . . . . . . . . . . . 2,168,536 5,059,916 509,944 (3,400,000)
Apartment Building:
Rancho Franciscan
Apartments. . . . . . . . . . . . . . 3,522,703 6,856,215 157,532 (1,400,000)
----------- ----------- ---------- -----------
Total . . . . . . . . . . . . . . . . $ 14,472,493 27,933,305 2,253,799 (15,411,829)
=========== =========== ========== ==========
<PAGE>
SCHEDULE III
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
DECEMBER 31, 1996
Gross Amount at Which Carried
At Close of Period (C) (D)
-------------------------------
Buildings and Accumulated
Land Improvements Total Depreciation (E)
---- ------------ ----- ---------------
<S> <C> <C> <C> <C>
Description:
- -----------
Shopping Center:
Sunrise Town Center . . . . . . . . . . $ 3,054,336 5,610,285 8,664,621 2,057,598
Industrial Parks:
Carson Industrial Park. . . . . . . . . 1,972,278 5,136,023 7,108,301 1,941,169
Costa Mesa
Industrial Park . . . . . . . . . . . 1,200,992 3,137,404 4,338,396 1,261,959
Apartment Building:
Rancho Franciscan
Apartments. . . . . . . . . . . . . . 3,068,932 6,067,518 9,136,450 1,666,730
---------- ----------- ---------- -----------
Total . . . . . . . . . . . . . . . . $ 9,296,538 19,951,230 29,247,768 6,927,456
========== =========== ========== ===========
<PAGE>
SCHEDULE III
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
Life on which
Depreciation
in Latest
Statement of 1996
Date of Date Operations is Real Estate
Construction Acquired Computed Taxes
------------ --------- -------------- ----------
<S> <C> <C> <C> <C>
Description:
- ------------
Shopping Center:
Sunrise Town Center . . . . . . . . . . 1989 10/12/89 5-30 years 205,493
Industrial Parks:
Carson Industrial Park . . . . . . . . 1977 11/1/88 5-30 years 100,267
Costa Mesa
Industrial Park (C) . . . . . . . . . 1973 11/1/88 5-30 years 52,516
Apartment Building:
Rancho Franciscan
Apartments (C). . . . . . . . . . . . 1988 12/30/88 5-30 years 81,017
----------
Total . . . . . . . . . . . . . . . . 439,293
==========
<FN>
- --------------
Notes:
(A) The initial cost to Partnership represents the original purchase price of the properties,
including amounts incurred subsequent to acquisition which were contemplated at the time the property
was acquired. All properties were acquired on an all-cash unleveraged basis, and therefore, no
encumbrance information is applicable.
(B) Reference is made to the Notes for a further description of such provisions for value
impairment.
(C) This property has been sold in 1997 as described further in the Notes.<PAGE>
SCHEDULE III
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION - CONCLUDED
DECEMBER 31, 1996
(D) Reconciliation of real estate owned at December 31, 1996, 1995 and 1994:
<CAPTION>
December 31,
-----------------------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Balance at beginning of period. . . . . . . . . . . . 45,663,371 58,824,353 58,617,839
Additions during period . . . . . . . . . . . . . . . 445,944 239,018 206,514
Reductions during period. . . . . . . . . . . . . . . (14,849,718) -- --
Provisions for value impairment . . . . . . . . . . . (2,011,829) (13,400,000) --
----------- ---------- ==========
Balance at end of period. . . . . . . . . . . . . . . 29,247,768 45,663,371 58,824,353
=========== ========== ==========
(E) Reconciliation of accumulated depreciation:
Balance at beginning of period. . . . . . . . . . . . 9,983,281 8,644,412 7,239,114
Reductions during period. . . . . . . . . . . . . . . (3,581,032) -- --
Depreciation expense. . . . . . . . . . . . . . . . . 525,207 1,338,869 1,405,298
----------- ---------- ----------
Balance at end of period. . . . . . . . . . . . . . . 6,927,456 9,983,281 8,644,412
=========== ========== ==========
(F) The aggregate cost of real estate owned at December 31, 1996 for Federal income tax purposes
was approximately $44,168,000.
</TABLE> <PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There were no changes in, or disagreements with, accountants
during fiscal year 1996 and 1995.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Corporate General Partner of the Partnership is JMB Realty
Corporation ("JMB"), a Delaware corporation. Substantially all
of the outstanding shares of JMB are owned, directly or
indirectly, by certain of its officers, directors, members of
their families and their affiliates. JMB as the Corporate
General Partner has responsibility for all aspects of the
Partnership's operations, subject to the requirement that
purchases and sales of real property must be approved by the
Associate General Partner of the Partnership, AGPP Associates,
L.P. AGPP Associates, L.P., an Illinois limited partnership
with JMB as its sole general partner, shall be directed by a
majority in interest of its limited partners (who are generally
officers, directors and affiliates of JMB or its affiliates) as
to whether to provide its approval of any purchase or sale of
real property (or any interests therein) of the Partnership.
The Partnership is subject to certain conflicts of interest
arising out of its relationships with the General Partners and
their affiliates as well as the fact that the General Partners
and their affiliates are engaged in a range of real estate
activities. Certain services have been and may in the future be
provided to the Partnership or its investment properties by
affiliates of the General Partners, including property
management services and insurance brokerage services. In
general, such services are to be provided on terms no less
favorable to the Partnership than could be obtained from
independent third parties and are otherwise subject to
conditions and restrictions contained in the Partnership
Agreement. The Partnership Agreement permits the General
Partners and their affiliates to provide services to, and
otherwise deal and do business with, persons who may be engaged
in transactions with the Partnership, and permits the
Partnership to borrow from, purchase goods and services from,
and otherwise to do business with, persons doing business with
the General Partners or their affiliates. The General Partners
and their affiliates may be in competition with the Partnership
under certain circumstances, including, in certain geographical
markets, for tenants for properties and/or for the sale of
properties. Because the timing and amount of cash distributions
and profits and losses of the Partners under the Partnership
Agreement, including whether and when to sell or refinance a
property, the establishment and maintenance of reasonable
reserves, the timing of expenditures and the allocation of
certain tax items under the Partnership Agreement, the General <PAGE>
Partners may have a conflict of interest with respect to such
determinations.
The names, positions held and length of service therein of
each director and the executive and certain other officers of
the Corporate General Partner are as follows:
Served in
Name Office Office Since
- ----- ------- ------------
Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Chief Financial Officer 2/22/96
Neil G. Bluhm President 5/03/71
Director 5/03/71
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
H. Rigel Barber Executive Vice President 1/02/87
Chief Executive Officer 8/01/93
Glenn E. Emig Executive Vice President 1/01/93
Chief Operating Officer 1/01/95
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91
<PAGE>
There is no family relationship among any of the foregoing
directors or officers. The foregoing directors have been
elected to serve a one-year term until the annual meeting of the
Corporate General Partner to be held on June 7, 1997. All of
the foregoing officers have been elected to serve one-year terms
until the first meeting of the board of directors held after the
annual meeting of the Corporate General Partner to be held on
June 7, 1997. There are no arrangements or understandings
between or among any of said directors or officers and any other
person pursuant to which any director or officer was selected as
such.
JMB is the corporate general partner of Carlyle Real Estate
Limited Partnership-VII ("Carlyle-VII"), Carlyle Real Estate
Limited Partnership IX ("Carlyle-IX"), Carlyle Real Estate
Limited Partnership-XI ("Carlyle-XI"), Carlyle Real Estate
Limited Partnership-XII ("Carlyle-XII"), Carlyle Real Estate
Limited Partnership-XIII ("Carlyle-XIII"), Carlyle Real Estate
Limited Partnership-XIV ("Carlyle-XIV"), Carlyle Real Estate
Limited Partnership-XV ("Carlyle-XV"), Carlyle Real Estate
Limited Partnership-XVI ("Carlyle-XVI"), Carlyle Real Estate
Limited Partnership-XVII ("Carlyle-XVII"), Carlyle Income Plus,
L.P. II ("Carlyle Income Plus-II"), JMB Mortgage Partners,
Ltd.-III ("Mortgage Partners-III"), and JMB Mortgage Partners,
Ltd.-IV ("Mortgage Partners IV") and the managing general
partner of JMB Income Properties, Ltd.-IV ("JMB Income-IV"), JMB
Income Properties, Ltd.-V ("JMB Income-V"), JMB Income
Properties, Ltd.-VI ("JMB Income-VI"), JMB Income Properties,
Ltd.-VII ("JMB Income-VII"), JMB Income Properties, Ltd.-X ("JMB
Income-X"), JMB Income Properties, Ltd.-XI ("JMB Income-XI"),
JMB Income Properties, Ltd.-XII ("JMB Income-XII"), and, JMB
Income Properties, Ltd.-XIII ("JMB Income-XIII") JMB is also the
sole general partner of the associate general partner of most of
the foregoing partnerships, Most of the foregoing directors and
officers are also officers and/or directors of various
affiliated companies of JMB including, Arvida/JMB Managers, Inc.
(the general partner of Arvida/JMB Partners, L.P. ("Arvida")),
Arvida/JMB Managers-II, Inc. (a general partner of Arvida/JMB
Partners, L.P.-II ("Arvida-II")) and, Income Growth Managers,
Inc. (the corporate general partner of IDS/JMB Balanced Income
Growth, Ltd. ("IDS/BIG")). Most of such directors and officers
are also partners of certain partnerships which are associate
general partners in the following real estate limited
partnerships: Carlyle-VII, Carlyle-IX, Carlyle-XI, Carlyle-XII,
Carlyle-XIII, Carlyle-XIV, Carlyle-XVI, Carlyle-XVII, JMB
Income-VI, JMB Income-VII, JMB Income-X, JMB Income-XI, JMB
Income-XII, JMB Income-XIII, Mortgage Partners-III, Mortgage
Partners-IV, Carlyle Income Plus-II and IDS/BIG.
The business experience during the past five years of each
such director and officer of the Corporate General Partner of
the Partnership in addition to that described above is as
follows:
Judd D. Malkin (age 59) is an individual general partner of
JMB Income-IV and JMB Income-V. Mr. Malkin has been associated
with JMB since October 1969. Mr. Malkin is a director of Urban<PAGE>
Shopping Centers, Inc. ("USC, Inc."), an affiliate of JMB that
is a real estate investment trust in the business of
owning,managing and developing shopping centers. He is a
Certified Public Accountant.
Neil G. Bluhm (age 59) is an individual general partner of
JMB Income-IV, JMB Income-V. Mr. Bluhm has been associated with
JMB since August 1970. Mr. Bluhm is a director of USC, Inc. He
is a member of the Bar of the State of Illinois and a Certified
Public Accountant.
Burton E. Glazov (age 58) has been associated with JMB since
June 1971, and served as an Executive Vice President of JMB
until December 1990. He is a member of the Bar of the State of
Illinois and a Certified Public Accountant.
Stuart C. Nathan (age 55) has been associated with JMB since
July 1972. Mr. Nathan is also a director of Sportmart, Inc., a
retailer of sporting goods. He is a member of the Bar of the
State of Illinois.
A. Lee Sacks (age 63) (President and Director of JMB
Insurance Agency, Inc.) has been associated with JMB since
December 1972.
John G. Schreiber (age 50) has been associated with JMB
since December 1970, and served as an Executive Vice President
of JMB until December 1990. He is also a director of USC, Inc.
Mr. Schreiber is President of Schreiber Investment Inc., a
company which is engaged in the real estate investing business.
He is also a senior advisor and partner of Blackstone Real
Estate Partners, an affiliate of the Blackstone Group, L.P.
Since 1994 Mr. Schreiber has also served as Trustee of Amli
Residential Property Trust, a publicly-traded real estate
investment trust that invests in multi-family properties. He is
also a director of investment companies advised or managed by T.
Rowe Price Associates and its affiliates. He holds a Masters
degree in Business Administration from Harvard University
Graduate School of Business.
H. Rigel Barber (age 47) has been associated with JMB since
March 1982. He holds a J.D. degree from the Northwestern Law
School and is a member of the Bar of the State of Illinois.
Glenn E. Emig (age 49) has been associated with JMB since
December, 1979. Prior to becoming Executive Vice President of
JMB in 1993, Mr. Emig was Executive Vice President and Treasurer
of JMB Institutional Realty Corporation. He holds a Masters
degree in Business Administration from Harvard University
Graduate School of Business and is a Certified Public
Accountant.
Gary Nickele (age 44) has been associated with JMB since
February 1984. He holds a J.D. degree from the University of
Michigan Law School and is a member of the Bar of the State of
Illinois.<PAGE>
Gailen J. Hull (age 48) has been associated with JMB since
March 1982. He holds a Masters degree in Business
Administration from Northern Illinois University and is a
Certified Public Accountant.
Howard Kogen (age 61) has been associated with JMB since
March 1973. He is a Certified Public Accountant.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The General Partners are entitled to receive a share of cash
distributions, when and as cash distributions are made to the
Limited Partners, and a share of profits or losses. Reference
is also made to the Notes for a description of such
distributions and allocations. In 1996, 1995 and 1994, cash
distributions of $186,964, $257,076 and $186,964, respectively,
were paid to the General Partners. The General Partners were
allocated taxable income of $900,356 in 1996.
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. The relationship of
the Corporate General Partner ( and its directors and officers)
to its affiliates is set forth in Item 10 above.
An affiliate of the Corporate General Partner provided
property management and leasing services during 1996 for certain
properties. Such affiliate earned property management and
leasing fees amounting to $96,140, of which $5,034 was unpaid as
of December 31, 1996.
JMB Insurance Agency, Inc., an affiliate of the Corporate
General Partner, earned and received insurance brokerage
commissions in 1996 aggregating $15,712. In connection with
providing insurance coverage for certain of the real property
investments of the Partnership. Such commissions are at rates
set by insurance companies for the classes of coverage provided.
The Corporate General Partner and its affiliates were due
reimbursement (at cost) in 1996 for accounting services,
portfolio management services, legal services and for
administrative charges and other out-of-pocket expenses of
$5,389, $21,112, $7,861, and $774, respectively, of which
$11,680 was unpaid at December 31, 1996.
All amounts payable to the General Partners and their
affiliates do not bear interest and are expected to be paid in
future periods.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) No person or group is known by the Partnership to own
beneficially more than 5% of the outstanding Interests of the
Partnership.
<PAGE>
<TABLE>
(b) The Corporate General Partner, and its officers and directors and
the Associate GeneralPartner of the Partnership own the following Interests
of the Partnership:
<CAPTION>
Name of Amount and
Nature
Beneficial of Beneficial Percent
Title of Class Owner Ownership of Class
- --------------- ------------------------ --------------- --------------
<S> <C> <C> <C>
- -
Limited Partnership JMB Realty Corporation 5 Interests (1) Less than
1%
Interests indirectly
Limited Partnership
Interests Corporate General Partner,
its officers and directors and 7.07865 Interests (1)(2) Less than
the Associate General Partner 1%
as a group
<FN>
- -----------
(1) Includes 5 Interests owned by the initial limited partner of the Partnership for which
JMB Realty Corporation, as the indirect majority shareholder of the initial limited partner, is
deemed to have the voting and investment power.
(2) Includes 2.07865 Interests owned by an officer or his relative for which such officer has
investment and voting power as to such Interest.
No officer or director of the Corporate General Partner possesses a right to acquire
beneficial ownership of Interests of the Partnership.
Reference is made to Item 10 for a description of the ownership of the Corporate General
Partner.
(c) There exists no arrangement, known to the Partnership, the operation of which may at a
subsequent date result in a change in control of the Partnership.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with the
Corporate General Partner, its affiliates or their management other than
those described in Items 10 and 11 above.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
(a) The following documents are filed as part of this
report:
(1) Financial Statements (See Index to Financial
Statements filed with this annual report).
(2) Exhibits.
3.1. 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. Agreement dated August 11, 1987 between JMB
Securities Corporation and SDK Industrial
Parks (included are all exhibits pursuant
thereto) is hereby incorporated by reference
to Exhibit 10.2 of the Partnership's Post-
Effective Amendment No. 2 to Form S-11 (File
No. 33-5309) Registration Statement dated
August 17, 1987.
<PAGE>
10.2. Agreement for Operation and Management
Shopping Center dated August 11, 1987 between
the Partnership and Draper and Kramer
Incorporated is hereby incorporated by
reference to Exhibit D of Exhibit 10.2 of the
Partnership's Post-Effective Amendment No. 2
to Form S-11 (File No. 33-5309) Registration
Statement dated August 17, 1987.
10.3* Agreement dated as of January 24, 1990, by
and between McLean Associates Limited
Partnership and a partnership to be formed
that will be supervised or advised by an
affiliate of JMB Realty Corporation relating
to The Ashby at McLean Apartments.
10.4* Agreement of Partnership of CIP/Ashby
Partners dated January 30, 1990, by and
between Carlyle Income Plus, Ltd. and Carlyle
Income Plus, L.P.-II.
10.5* Assumption Agreement dated as of February 21,
1990, by and between McLean Associates
Limited Partnership and CIP/Ashby Partners.
21. List of Subsidiaries.
24. Powers of Attorney
27. Financial Data Schedule
(b) The following reports on Form 8-K were filed since the
beginning of the last quarter of the period covered by this
report.
The Partnership's report on Form 8-K (File No.000-16975) for
December 12, 1996 describing the sale of Riverview Plaza
Shopping Center was filed. No financial statements were
required to be filed therewith.
The Partnership's report on Form 8-K (File No. 000-16975)
for January 22, 1997 describing the sale of Rancho Franciscan
Apartments was filed. No financial statements were required to
be filed therewith.
The Partnership's report on Form 8-K (File No. 000-16975)
for March 3, 1997 describing the sale of Costa Mesa Industrial
Park was filed. No financial statemetns were required to be
filed herewith.
No annual report for the fiscal year 1996 or proxy material
has been sent to the Partners of the Partnership. An annual
report will be sent to the Partners subsequent to this filing.
- -------------
* Previously filed as Exhibits 10.4-10.6 to the
Partnership's Report on Form 10-K of the Securities Exchange Act
of 1934 (File No. 000-16975) filed on March 28, 1989 and hereby
incorporated herein by reference.<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: March 21, 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.
By: JMB Realty Corporation
Corporate General Partner
JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and
Chief Financial Officer
Date: March 21, 1997
NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 21, 1997
By: H. RIGEL BARBER*
H. Rigel Barber, Chief Executive Officer
Date: March 21, 1997
By: GLENN E. EMIG*
Glen E. Emig, Chief Operating Officer
Date: March 21, 1997
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 21, 1997
By: A. LEE SACKS*
A. Lee Sacks, Director
Date: March 21, 1997
STUART C. NATHAN*
By: Stuart C. Nathan, Executive Vice President and
Director
Date: March 21, 1997
*By: GAILEN J. HULL, Pursuant to a Power of Attorney
By: Gailen J. Hull, Attorney-in-Fact
Date: March 21, 1997
<PAGE>
CARLYLE INCOME PLUS, LTD.
EXHIBIT INDEX
Document
Sequentially
Exhibit incorporated numbered
No. Exhibit by reference page
3.1. Amended and Restated
Agreement of Limited
Partnership, incorporated
by reference to Exhibit A
of the Partnership's
Prospectus Yes
3.2. Certain pages of the Prospectus
of the Partnership dated
December 8, 1986. Yes
3.3 Acknowledgement of rights
and duties of the General
Partners of the Partnership Yes
4. Assignment Agreement,
incorporated by reference
to Exhibit B to the
Partnership's Prospectus Yes
10.1.-
10.5. * Material Contracts Yes
21. List of Subsidiaries No
24. Powers of Attorney No
27. Financial Data Schedule No
<PAGE>
EXHIBIT 21
LIST OF SUBSIDIARIES
The Partnership is a joint venture partner in JMB/Landings
Associates, a general partnership which holds title to The
Landings Shopping Center, located in Sarasota, Florida.
The Partnership is a joint venture partner in CIP/Ashby
Partners, a general partnership which held title to The Ashby at
McLean Apartments, located in McLean, Virginia.
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers
and/or directors of JMB Realty Corporation, the corporate general
partner of Carlyle Income Plus, Ltd., does hereby nominate,
constitute and appoint GARY NICKELE, GAILEN J. HULL, DENNIS M.
QUINN or any of them, attorneys and agents of the undersigned with
full power of authority to sign in the name and on behalf of the
undersigned officers or directors, a Report on Form 10-K of said
partnership for the fiscal year ended December 31, 1996 and any and
all amendments thereto, hereby ratifying and confirming all that
said attorneys and agents and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney the 22nd day of January, 1997.
_______________________
Neil G. Bluhm President and Director
_______________________
Judd D. Malkin Chairman and Chief Financial Officer
_______________________
A. Lee Sacks Director of General Partner
_______________________
Stuart C. Nathan Executive Vice President
Director of General Partner
The undersigned hereby acknowledge and accept such power of
authority to sign, in the name and on behalf of the above named
officers and/or directors, a Report on Form 10-K of said
partnership for the fiscal year ended December 31, 1996 and any and
all amendments thereto, the 22nd day of January, 1997.
------------------------------
Gary Nickele
------------------------------
Gailen J. Hull
------------------------------
Dennis M. Quinn
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers
of JMB Realty Corporation, the corporate general partner of Carlyle
Income Plus, Ltd., does hereby nominate, constitute and appoint
GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them,
attorneys and agents of the undersigned with full power of
authority to sign in the name and on behalf of the undersigned
officers, a Report on Form 10-K of said partnership for the fiscal
year ended December 31, 1996 and any and all amendments thereto,
hereby ratifying and confirming all that said attorneys and agents
and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney the 22nd day of January 1997.
_____________________________________
H. Rigel Barber Chief Executive Officer
_____________________________________
Glenn E. Emig Chief Operating Officer
The undersigned hereby acknowledge and accept such power of
authority to sign, in the name and on behalf of the above named
officers, a Report on Form 10-K of said partnership for the fiscal
year ended December 31, 1996 and any and all amendments thereto,
the 22nd day of January 1997.
---------------------------------------------
Gary Nickele
---------------------------------------------
Gailen J. Hull
---------------------------------------------
Dennis M. Quinn
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1996 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> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 14,972,580
<SECURITIES> 0
<RECEIVABLES> 228,956
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,201,536
<PP&E> 22,320,312
<DEPRECIATION> 0
<TOTAL-ASSETS> 41,943,751
<CURRENT-LIABILITIES> 469,137
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 41,294,562
<TOTAL-LIABILITY-AND-EQUITY> 41,943,751
<SALES> 6,148,871
<TOTAL-REVENUES> 6,357,920
<CGS> 0
<TOTAL-COSTS> 5,201,304
<OTHER-EXPENSES> 505,586
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 651,030
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,222,530
<DISCONTINUED> 2,069,877
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,292,407
<EPS-PRIMARY> 22.32
<EPS-DILUTED> 22.32
</TABLE>
