Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Carlyle Income Plus, Ltd.
Commission File No. 000-16975
Form 10-K405
Gentlemen:
Transmitted, for the above-mentioned registrant, is the electronically filed
executed copy of registrant's current report on Form 10-K405 for the year ended
December 31, 1997.
Thank you.
Very truly yours,
CARLLYLE INCOME PLUS, LTD.
By: JMB Realty Corporation
Corporate General Partner
By:______________________________
Gailen J. Hull, Senior Vice President
and Principal Accounting Officer
jt
Enclosures
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, 1997 Number 000-16975
CARLYLE INCOME PLUS, LTD.
(Exact name of registrant as specified in its charter)
Illinois 36-3439532
(State of organization) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-915-1987
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- ----------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
AND ASSIGNEE INTERESTS THEREIN
(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 X
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 . . . . . . . . . . . . . 6
Item 4. Submission of Matters to a Vote of Security
Holders. . . . . . . . . . . . . . . . . . 6
PART II
Item 5. Market for the Partnership's Limited
Partnership Interests and Related Security
Holder Matters . . . . . . . . . . . . . . 6
Item 6. Selected Financial Data . . . . . . . . . . 7
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . 9
Item 7A. Quantitative and Qualitative Disclosures
about Market Risk . . . . . . . . . . . . . 13
Item 8. Financial Statements and Supplementary
Data . . . . . . . . . . . . . . . . . . . 14
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . 49
PART III
Item 10. Directors and Executive Officers of the
Partnership . . . . . . . . . . . . . . . . 49
Item 11. Executive Compensation. . . . . . . . . . . 53
Item 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . 53
Item 13. Certain Relationships and Related
Transactions . . . . . . . . . . . . . . . 54
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K . . . . . . . . . . . . 55
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 58
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. As of December 31, 1997, all of the
Partnership's investments in real estate have been sold. Such
equity investments were held by fee title and/or through joint
venture partnership interests. The Partnership's real property
investments were located throughout the nation and it had 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, were held for
working capital, distributed or reinvested in existing properties
rather than invested in acquiring additional properties. The
Partnership currently expects to conduct an orderly liquidation
of its remaining assets as quickly as practicable and to wind up
its affairs not later than December 31, 1998, barring any
unforeseen economic developments. Reference is also made to Item
7.
The Partnership made the real property investments set forth
in the following table:
<PAGE>
<TABLE>
<CAPTION>
NAME, TYPE OF PROPERTY DATE OF SALE OR
AND LOCATION SIZE PURCHASE DISPOSITION DATE 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 (b)
2. The Landings
Shopping Center
Sarasota,
Florida . . . . 94,000 sq.ft. 8/16/88 12/30/97 fee ownership of land and
n.r.a. improvements (through
joint venture partnership)
(a) (b)
3. Carson Industrial
Park
Carson,
California. . . 206,000 sq.ft. 11/01/88 8/15/97 fee ownership of land and
g.l.a. improvements (b)
4. Costa Mesa Industrial
Park
Costa Mesa,
California. . . 107,000 sq.ft 11/01/88 3/3/97 fee ownership of land and
g.l.a. improvements (b)
5. Rancho Franciscan
Apartments
Santa Barbara,
California. . . 111 units 12/28/88 1/22/97 fee ownership of land
and improvements (b)
6. Sunrise Town Center
Sunrise,
Florida . . . . 128,000 sq. ft. 10/12/89 12/16/97 fee ownership of land and
n.r.a. improvements (b) <PAGE>
NAME, TYPE OF PROPERTY DATE OF SALE OR
AND LOCATION (c) SIZE PURCHASE DISPOSITION DATE 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) (a) (b)
- ----------------
(a) Reference is made to the Notes for a description of the joint venture partnership through
which the Partnership made this real property investment.
(b) This property has been sold. Reference is made to the Notes for a description of the sale
of such real property investment.
</TABLE>
<PAGE>
Approximate occupancy levels for the properties are set
forth in the table in Item 2 below to which reference is hereby
made.
On December 30, 1997, the JMB/Landings joint venture sold
The Landings Shopping Center. Reference is made to the Notes
for a further description of such transaction.
On August 15, 1997 and December 16, 1997, the Partnership
sold the Carson Industrial Park and the Sunrise Town Center,
respectively. Reference is made to the Notes for further
description of such transactions.
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 (prior to their sale), 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 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 said 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 1997 and 1996 for the Partnership's
investment properties owned during 1997:
1996 1997
-------------------- --------------------
at at at at at at at at
-------------------- --------------------
PRINCIPAL BUSINESS 3/31 6/30 9/3012/31 3/316/30 9/30 12/31
------------------ ---- ---- ---- ---- -------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. The Landings
Shopping Center
Sarasota, Florida. . . Retail 82% 65% 67% 60% 60% 55% 81% N/A
2. Carson Industrial Park Light Industrial/
Carson, California . . Retail/Distrib. 95% 93% 93% 93% 80% 89% N/A N/A
3. Costa Mesa,
Industrial Park
Costa Mesa Light Industrial/
California . . . . . . Research & Develop. 69% 69% 69% 69% N/A N/A N/A N/A
4. Rancho Franciscan
Apartments
Santa Barbara,
California . . . . . . Apartments 97% 97% 95% 98% N/A N/A N/A N/A
5. Sunrise Town Center
Sunrise, Florida . . . Retail 83% 82% 82% 83% 64% 65% 65% N/A
<FN>
- ---------------
An "N/A" indicates that the property was sold and was not owned by the Partnership or its joint
venture at the end of the period.
</TABLE>
<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 1996 and 1997.
PART II
ITEM 5. Market for the Partnership's Limited Partnership
Interests and Related Security Holder Matters
As of December 31, 1997, there were 8,781 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.
Reference is made to Item 7 for a discussion of unsolicited
tender offers received from unaffiliated third parties.<PAGE>
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
YEARS ENDED DECEMBER 31, 1997, 1996, 1995, 1994, AND 1993
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Total income . . . . .$ 2,127,369 6,357,920 6,567,890 6,923,129 6,969,179
========== ========== ========= ========= =========
Earnings (loss) before gains
on sales of investment
properties. . . . . . (1,619,024) 1,222,530 (12,274,429) 1,074,570 3,249,337
---------- ---------- ---------- ---------- ----------
Gains on sales and
Partnership's share
of gains on sales of
investment properties 4,519,657 2,069,877 -- -- --
---------- ---------- ---------- ---------- ----------
Net earnings (loss) .$ 2,900,633 3,292,407 (12,274,429) 1,074,570 3,249,337
========== ========== ========== ========== ==========
Net earnings (loss) per
Interest (b)
Earnings (loss) before gains
on sales of investment
properties . . . .$ (17.32) 13.08 (131.30) 11.49 34.76
<PAGE>
Gains on sales and
Partnership's share of
gains on sales of
investment properties 48.83 9.24 -- -- --
---------- ---------- ---------- ---------- ----------
$ 31.51 22.32 (131.30) 11.49 34.76
========== ========== ========= ========== ==========
Total assets . . . . . $ 11,996,978 41,943,751 49,567,471 67,048,436 69,698,572
========== ========== ========= ========== ==========
Cash distributions
per Interest (c) $ 363.00 113.00 55.00 40.00 40.00
========== ========== ========= ========== ==========
<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>
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. The Partnership had been
made aware that during 1997 other unaffiliated third parties
have made unsolicited tender offers to some of the Holders of
Interests. These offers were seeking to purchase up to 4.9% of
the Interests in the Partnership at prices ranging from $135 to
$250 per Interest. These offers have expired as of the date of
this report. The Special Committee recommended against
acceptance of these offers on the basis that, among other
things, the offer prices were inadequate. As of the date of
this report, the Partnership is aware that 5.92% of the
outstanding Interests have been purchased in 1996, 1997 and
1998 by all such unaffiliated third parties either pursuant to
such tender offers or through negotiated purchases. As the
Partnership is currently winding up its affairs and expects to
make a final liquidating distribution in late 1998, it is
unlikely that any further tender offers will be made for
Interests. 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.
During the fourth quarter of 1997, the Partnership
distributed approximately $8,881,000 to the Holders of Interests
($100 per Interest) which included substantially all of the net
proceeds from the August 1997 sale of the Carson Industrial Park
(as described below). In addition, the Partnership distributed
$37,393 to the General Partners which represented their share of
operational cash flow of the Partnership. At December 31, 1997,
the Partnership had cash and cash equivalents of approximately
$6,454,000. The Partnership distributed approximately $10,213,000
to the Holders of Interests ($115 per interest) during the first
quarter of 1998 (after receiving its share of the proceeds from
the December 1997 sale of the Landings Shopping Center from the
JMB/Landings joint venture), which included substantially all of
the proceeds from the December, 1997 sales of the Sunrise Town
Center and the Landings Shopping Center. In addition, the
Partnership distributed $70,112 to the General Partners which represented
their share of operational cash flow and working capital
reserves of the Partnership. As the Partnership's last
remaining real estate investments were sold in December, 1997,
the remaining funds are being held to pay for the Partnership's
remaining expenses and liabilities with any remaining amounts
expected to be distributed to the Holders of Interests and to
the General Partners upon liquidation of the Partnership
pursuant to the provisions of the Partnership Agreement. In
connection with these sales and as is customary in such
transactions, certain representations and warranties were made
to the buyer of the Sunrise Town Center (in the maximum amount
of $100,000) and the buyer of the Landings Shopping Center (in
the maximum amount of $200,000 to the Partnership),
respectively, as discussed more fully in the Notes. The General
Partners will not receive their subordinated share of the
distribution of proceeds from these or any other sales of
investment properties by the Partnership due to the limitations
upon such distributions as discussed in the Notes.
LANDINGS SHOPPING CENTER
On December 30, 1997, the JMB/Landings joint venture sold
the land and related improvements of the Landings Shopping
Center. The sale price was $9,700,000 (before selling costs and
prorations). Reference is made to the Notes for a further
description of the sale.
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 and
prorations). Reference is made to the Notes for a further
description of the sale.
CARSON INDUSTRIAL PARK
In April 1997, the Partnership entered into a contract with
a potential purchaser for the sale of this property for a sale
price of $7,200,000. On August 15, 1997, the sale of the
property was completed, with the Partnership receiving the cash
proceeds, less selling costs and prorations, at closing.
Accordingly, the Partnership recognized a gain of approximately
$1,760,000 for financial reporting purposes (primarily as a
result of a $4,300,000 value impairment provision recorded by
the Partnership in 1995), and a loss of approximately $2,473,000
for Federal income tax purposes in 1997.
RANCHO FRANCISCAN APARTMENTS
In October 1996, the Partnership signed a letter of intent
to sell the property. On January 22, 1997, the property was
sold for a sale price of $8,302,200, which was paid in cash at
closing (net of selling costs and prorations) and which resulted
in a gain of approximately $566,000 for financial reporting
purposes (primarily as a result a $1,400,000 value impairment
provision recorded by the Partnership in 1995), and resulted in
a loss of approximately $726,000 for Federal income tax purposes
in 1997.
<PAGE>
COSTA MESA INDUSTRIAL PARK
On March 3, 1997, the Partnership completed the sale of the
property for a sale price of $4,456,000, which was paid in cash
at closing (net of selling costs and prorations) and which
resulted in a gain of approximately $1,234,000 (primarily as a
result of a $3,400,000 provision for value impairment recorded
by the Partnership in 1995) for financial reporting purposes,
and resulted in a loss of approximately $2,139,000 for Federal
income tax purposes in 1997.
SUNRISE TOWN CENTER
On December 16, 1997, the Partnership sold the land and
related improvements of the Sunrise Town Center. The sale price
was $4,100,000 (before selling costs and prorations). The sale
resulted in no significant gain or loss to the Partnership for
financial reporting purposes, primarily as a result of value
impairment provisions totaling $9,250,000 recorded by the
Partnership in 1995, 1996 and 1997. In addition, the
Partnership recognized a loss on sale of approximately
$8,900,000 for Federal income tax purposes in 1997. Reference
is made to the Notes for a further description of the sale.
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 purposes, respectively.
RESULTS OF OPERATIONS
At December 31, 1996, the Partnership owned four operating
investment properties and an interest in one other operating
investment property. All of these investment properties were
sold by the Partnership or its joint venture in 1997.
The decrease in cash and cash equivalents at December 31,
1997 as compared to December 31, 1996 is attributable primarily
to the Partnership's distribution of sale proceeds during the
first quarter of 1997, as described below. Such decrease was
partly offset by the proceeds received by the Partnership in
December 1997 from the sale of the Sunrise Town Center, as
described above. 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 Riverview Plaza sale.
In addition, approximately $10,213,000 of sales proceeds ($115
per Interest) from the sales of the Rancho Franciscan Apartments
and the Costa Mesa Industrial Park in January and March of 1997,
respectively, was distributed to the Holders of Interests in May
1997. The Partnership also distributed approximately $748,000
of operating cash flow in May 1997 ($37,393 of which was the
General Partners' share). The Partnership made a distribution
to the Holders of Interests in late November 1997, of
approximately $8,881,000, consisting of $92 per Interest from
sale proceeds, which included proceeds from the August 1997 sale
of the Carson Industrial Park and $8 per Interest from
operations.<PAGE>
The Partnership also distributed $37,393 of operating cash flow
to the General Partners in November 1997. The General Partners
deferred their share of the distribution of proceeds from these
sales.
The decrease in rents and other receivables, prepaid
expenses, investment properties held for sale or disposition,
deferred expenses, accrued rents receivable, accounts payable,
unearned rents and tenant security deposits at December 31, 1997
as compared December 31, 1996 is attributable primarily to the
1997 sales of the Rancho Franciscan Apartments, the Costa Mesa
and Carson Industrial Parks and the Sunrise Town Center, as
described above. An additional decrease in investment
properties held for sale or disposition and in accrued rents
receivable is attributable to the $2,900,000 of provisions for
value impairment recorded for the Sunrise Town Center in 1997,
as described in the Notes. An additional decrease in accounts
payable is attributable primarily to the payment in 1997 of
certain unpaid capital and tenant costs at December 31, 1996 at
certain of the Partnership's investment properties.
The decrease in rental income, property operating expenses
and amortization of deferred expenses for the year ended
December 31, 1997 as compared to the year ended December 31,
1996 is due primarily to the 1997 sales of the Rancho Franciscan
Apartments and the Costa Mesa and Carson Industrial Parks, and
to the December 1996 sale of the Riverview Plaza Shopping
Center. The decrease in 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 increase in interest income for the year ended December
31, 1997 as compared to the years ended December 31, 1996 and
1995 is attributable primarily to larger average outstanding
balances in the Partnership interest-bearing cash equivalents
and investments during 1997 as a result of temporarily invested
sale proceeds.
The decrease in depreciation expense for the year ended
December 31, 1997 as compared to the year ended December 31,
1996 is attributable to the suspension of depreciation in 1997,
pursuant to SFAS 121, as all of the Partnership's investment
properties were classified during 1996 as held for sale or
disposition. The decrease in depreciation expense for the year
ended December 31, 1996 as compared to the year ended December
31, 1995 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.
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.<PAGE>
Provisions for value
impairment totaling $2,900,000 and $2,050,000 were recorded during the
year ended December 31, 1997 and 1996, respectively, 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 for these investments.
The decrease in Partnership's share of operations of
unconsoldidated ventures for the year ended December 31, 1997 as
compared to the year ended December 31, 1996 is due primarily to
the August 1996 sale of the Ashby at McLean Apartments. Such
decrease was partially offset by an increase in the
Partnership's share of operations of JMB/Landings primarily as
a result of the suspension of depreciation, effective January 1,
1997, on the Landings Shopping Center, as the property was
classified as held for sale as of December 31, 1996. 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.
Gains on sales and Partnership's share of gains on sales of
investment properties for the year December 31, 1997 resulted
from the 1997 sales of the Rancho Franciscan Apartments, the
Costa Mesa and Carson Industrial Parks, the Sunrise Town Center
Shopping Center and the Landings Shopping Center. 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 the
operations of the Partnership. Due to the Partnership's sale of
its last remaining investment properties in 1997 and the
expected liquidation of the Partnership during 1998, inflation
is not expected to significantly impact future operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
Not applicable
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
INDEX
Independent Auditors' Report
Balance Sheets, December 31, 1997 and 1996
Statements of Operations, years ended December 31, 1997, 1996,
and 1995
Statements of Partners' Capital Accounts (Deficits), years ended
December 31, 1997, 1996 and 1995
Statements of Cash Flows, years ended December 31, 1997, 1996
and 1995
Notes to Financial Statements
SCHEDULES NOT FILED:
All schedules have been omitted as the required information
is inapplicable or the information is presented in the financial
statements or related notes.
JMB/LANDINGS ASSOCIATES
(A GENERAL PARTNERSHIP)
INDEX
Independent Auditors' Report
Balance Sheets, December 31, 1997 and 1996
Statements of Operations, years ended December 31, 1997, 1996,
and 1995
Statements of Changes in Partner's Capital Accounts (Deficits),
years ended December 31, 1997, 1996 and 1995
Statements of Cash Flows, years ended December 31, 1997, 1996
and 1995
Notes to Financial Statements
SCHEDULES NOT FILED:
All schedules 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. These financial statements are the responsibility of the
General Partners of the Partnership. Our responsibility is to
express an opinion on these financial statements 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, 1997 and 1996,
and the results of its operations and its cash flows for each of
the years in the three-year period ended December 31, 1997, in
conformity with generally accepted accounting principles.
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.
Chicago, Illinois
March 25, 1998 KPMG Peat Marwick LLP
<PAGE>
<TABLE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
ASSETS
------
<CAPTION>
1997 1996
--------- ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . $ 6,453,795 14,972,580
Rents and other receivables (net of allowance
for doubtful accounts of $88,784 in 1996). . . . . . . 84,299 187,830
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 33,945 41,126
----------- -----------
Total current assets . . . . . . . . . . . . . . 6,572,039 15,201,536
----------- -----------
Investment properties held for sale or disposition . . . . -- 22,320,312
----------- ----------
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
1997 1996
---------- ----------
Investments in unconsolidated ventures, at
equity. . . . . . . . . . . . . . . . . . . . . . . . . . 5,424,939 4,177,052
Deferred expenses. . . . . . . . . . . . . . . . . . . . . -- 57,769
Accrued rents receivable . . . . . . . . . . . . . . . . . -- 187,082
----------- ------------
$ 11,996,978 41,943,751
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
------------------------------------------------------
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . $ 85,706 431,147
Amounts due to affiliates. . . . . . . . . . . . . . . . 28,188 16,714
Unearned rents . . . . . . . . . . . . . . . . . . . . . -- 21,276
---------- -----------
Total current liabilities. . . . . . . . . . . . 113,894 469,137
Tenant security deposits . . . . . . . . . . . . . . . . . -- 180,052
---------- -----------
Total liabilities. . . . . . . . . . . . . . . . 113,894 649,189
---------- -----------
Commitments and contingencies
Partners' capital accounts (deficits)
General partners:
Capital contributions. . . . . . . . . . . . . . . . . 25,000 25,000
Cumulative net earnings. . . . . . . . . . . . . . . . 1,987,742 1,885,545
Cumulative cash distributions. . . . . . . . . . . . . (1,985,331) (1,910,545)
---------- -----------
27,411 --
---------- -----------
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
1997 1996
---------- -----------
Limited partners (88,808.058 Interests):
Capital contributions, net of offering costs . . . . . 77,762,167 77,762,167
Cumulative net earnings. . . . . . . . . . . . . . . . 12,791,759 9,993,323
Cumulative cash distributions. . . . . . . . . . . . . (78,698,253) (46,460,928)
---------- -----------
11,855,673 41,294,562
---------- -----------
Total partners' capital accounts . . . . . . . . 11,883,084 41,294,562
---------- -----------
$ 11,996,978 41,943,751
========== ===========
<FN>
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<CAPTION>
1997 1996 1995
----------- ---------- ---------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . $ 1,582,241 6,148,871 6,339,935
Interest income. . . . . . . . . . . . . . . . . . . . 545,128 209,049 227,955
----------- ----------- ----------
2,127,369 6,357,920 6,567,890
----------- ----------- ----------
Expenses:
Depreciation . . . . . . . . . . . . . . . . . . . . . -- 525,207 1,338,869
Property operating expenses. . . . . . . . . . . . . . 723,008 2,589,928 2,516,910
Professional services. . . . . . . . . . . . . . . . . 136,062 224,863 87,581
Amortization of deferred expenses. . . . . . . . . . . 17,201 36,169 50,516
General and administrative . . . . . . . . . . . . . . 288,398 280,723 282,759
Provisions for value impairment. . . . . . . . . . . . 2,900,000 2,050,000 13,400,000
----------- ----------- -----------
4,064,669 5,706,890 17,676,635
----------- ----------- -----------
(1,937,300) 651,030 (11,108,745)
Partnership's share of operations
of unconsolidated ventures . . . . . . . . . . . . . . 318,276 571,500 (1,165,684)
----------- ----------- -----------
Earnings (loss) before gains on
sales of investment properties . . . . . . . (1,619,024) 1,222,530 (12,274,429)
Gains on sales and Partnership's share
of gains on sales of investment properties . . . . . . 4,519,657 2,069,877 --
----------- ----------- -----------
Net earnings (loss) . . . . . . . . . . . . $ 2,900,633 3,292,407 (12,274,429)
=========== =========== ===========
Net earnings (loss) per limited
partnership interest:
Earnings (loss) before gains on
sales of investment properties . . . . . . (17.32) 13.08 (131.30)
Gain on sales and Partnership's share of
gains on sales of investment properties. . 48.83 9.24 --
----------- ----------- ----------
Net earnings (loss) . . . . . . . . . . . . $ 31.51 22.32 (131.30)
=========== =========== ===========
<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, 1997, 1996 AND 1995
<CAPTION>
General Partners
---------------------------------------------------------
Net
Earnings Cash
Contributions (Loss) Distributions Total
------------- ---------- ------------- ------------
<S> <C> <C> <C> <C>
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) --
Net earnings (loss) . . . . . . . -- 102,197 -- 102,197
Cash distributions ($363.00 per limited
partnership interest) . . . . . . -- -- (74,786) (74,786)
--------- --------- --------- ---------
Balance at December 31, 1997 . . . $ 25,000 1,987,742 (1,985,331) 27,411
========= ========== ========== ========== <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, 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
Net earnings (loss) . . . . . . . . . . -- 2,798,436 -- 2,798,436
Cash distributions ($363.00 per
limited partnership interest) . . . . . -- -- (32,237,325)(32,237,325)
---------- ---------- ----------- ----------
Balance at December 31, 1997 . . . . . . 77,762,167 12,791,759 (78,698,253) 11,855,673
========== ========== ========== ==========
<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, 1997, 1996 AND 1995
<CAPTION>
1997 1996 1995
---------- ----------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . $ 2,900,633 3,292,407 (12,274,429)
Items not requiring (providing) cash or
cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . -- 525,207 1,338,869
Amortization of deferred expenses. . . . . . . . . . 17,201 36,169 50,516
Provisions for value impairment. . . . . . . . . . . 2,900,000 2,050,000 13,400,000
Partnership's share of operations of
unconsolidated ventures, net of distributions . . .
of $28,589 in 1997. . . . . . . . . . . . . . . . . (278,468) (571,500) 1,165,684
Partnership's share of gains on sales of properties
by unconsolidated ventures. . . . . . . . . . . . . (969,419) (1,134,043) --
Gains on sales of investment properties. . . . . . . (3,550,238) (935,834) --
Changes in:
Rents and other receivables. . . . . . . . . . . . . 103,531 863,360 (212,727)
Prepaid expenses . . . . . . . . . . . . . . . . . . 7,181 7,745 (4,211)
Accrued rents receivable . . . . . . . . . . . . . . 11,059 (19,403) 60,364
Accounts payable . . . . . . . . . . . . . . . . . . (345,441) 338,079 (15,397)
Amounts due to affiliates. . . . . . . . . . . . . . 11,474 (29,296) 15,345
Unearned rents . . . . . . . . . . . . . . . . . . . (21,276) (50,074) (27,245)
Accrued real estate taxes. . . . . . . . . . . . . . -- (937,812) (16,716)
Tenant security deposits . . . . . . . . . . . . . . (180,052) (14,749) (21,003)
---------- ---------- ----------
Net cash provided by (used in) operating activities 606,185 3,420,256 3,459,050
---------- ---------- ----------
Cash flows from investing activities:
Net sales and maturities of short-term investments . -- -- 931,575
Cash proceeds from sales of investment properties. . 23,246,872 12,447,147 --
Additions to investment properties . . . . . . . . . (30,709) (445,944) (239,018)
Partnership's distributions from
unconsolidated ventures . . . . . . . . . . . . . . -- 7,033,900 637,500
Payment of deferred expenses . . . . . . . . . . . . (29,022) (38,951) (54,285)
---------- ---------- ----------
Net cash provided by (used in) investing activities 23,187,141 18,996,152 1,275,772
---------- ---------- ----------
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS - CONTINUED
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
1997 1996 1995
---------- ---------- ----------
Cash flows from financing activities:
Distributions to limited partners. . . . . . . . . . . .(32,237,325) (10,035,311) (4,884,444)
Distributions to general partners. . . . . . . . . . . . (74,786) (186,964) (257,076)
---------- ---------- ----------
Net cash provided by (used in) financing
activities. . . . . . . . . . . . . . . . . . .(32,312,111) (10,222,275) (5,141,520)
---------- ---------- ----------
Net increase (decrease) in cash and cash
equivalents . . . . . . . . . . . . . . . . . . (8,518,785) 12,194,133 (406,698)
Cash and cash equivalents, beginning
of year . . . . . . . . . . . . . . . . . . . . 14,972,580 2,778,447 3,185,145
---------- ---------- ----------
Cash and cash equivalents, end of year . . . . $ 6,453,795 14,972,580 2,778,447
========== ========== ==========
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, 1997, 1996 AND 1995
OPERATIONS AND BASIS OF ACCOUNTING
GENERAL
The Partnership held (either directly or through joint
ventures) an equity investment portfolio of United States real
estate. Business activities consisted of rentals to a wide
variety of commercial and retail companies, rentals to
individuals, and the ultimate sale of such real estate. The
Partnership currently expects to conduct an orderly liquidation
of its remaining assets and wind up its affairs not later than
December 31, 1998, barring unforeseen economic developments. In
this regard, the Partnership expects to make its final
distributions after the expiration of the survival period related
to the Sunrise Town Center, as described below.
The equity method of accounting had 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") (property sold December
1997) and CIP/Ashby Partners ("CIP/Ashby") (property sold 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, 1997
and 1996 is summarized as follows:
<PAGE>
<TABLE>
<CAPTION>
1997 1996
------------------------- ------------------------
TAX BASIS TAX BASIS
GAAP BASIS (UNAUDITED) GAAP BASIS (UNAUDITED)
----------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . . . $ 11,996,978 22,710,389 41,943,751 69,879,029
Partners' capital
accounts
(deficits):
General partners . . . . . . . . 27,411 27,411 -- 224,100
Limited partners . . . . . . . . 11,855,673 22,591,286 41,294,562 69,112,706
Net earnings (loss):
General partners . . . . . . . . 102,197 (121,903) 1,310,084 900,356
Limited partners . . . . . . . . 2,798,436 (14,284,095) 1,982,323 1,502,227
Net earnings (loss) per
limited partnership interest. . . 31.51 (160.84) 22.32 16.92
========== ========== ========= =========
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 provided for
tenant occupancy during periods for which no rent was due and/or
increases in minimum lease payments over the term of the lease,
the Partnership accrued rental income for the full period of
occupancy on a straight-line basis.
Deferred expenses consisted primarily of leasing fees which
were being 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 ($6,197,165 and $14,708,472 at December 31, 1997
and 1996, 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 had acquired, either directly or through
joint ventures, interests in three shopping centers, two
industrial parks and two apartment buildings. The cost of the
investment properties represented 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 had 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 were charged to operations as
incurred. Significant betterments and improvements were
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 required
that the Partnership record an impairment loss on its properties
to be held for investment whenever their carrying value could
not be fully recovered through estimated undiscounted future
cash flows from their operations and sale. The amount of the
impairment loss to be recognized would have been the difference
between the property's carrying value and the property's
estimated fair value. The Partnership's policy was to consider
a property to be held for sale when the Partnership committed to
a plan to sell such property and active marketing activity had
commenced or was expected to commence in the near term. As of
December 31, 1996, all of the Partnership's remaining properties
had been classified as held for sale. In accordance with SFAS
121, any properties identified as "held for sale or disposition"
were no longer depreciated. Adjustments for impairment loss for
such properties (subsequent to the date of adoption of SFAS 121)
were 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 $2,900,000
and $2,050,000 in 1997 and 1996, respectively, 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
During the second quarter of 1997, Statements of Financial
Accounting Standards No. 128 ("Earnings per Share") and No. 129
("Disclosure of Information about Capital Structure") were
issued. As the Partnership's capital structure only has general
and limited partnership interests, the Partnership does not
expect any significant impact on its financial statements upon
adoption of these standards when required at the end of 1997.
The results of operations for properties sold during the
past three years were ($1,979,493), $1,000,474 and
($10,969,209), respectively, for the years ended December 31,
1997, 1996 and 1995.
In addition, the accompanying financial statements include
$318,276, $571,500 and ($1,165,684), respectively, of the
Partnership's share of total operations of $633,977, $1,655,382
and ($1,900,577) for the years ended December 31, 1997, 1996 and
1995 of unconsolidated properties sold in the past three years.
VENTURE AGREEMENTS - GENERAL
The Partnership is a party to one joint venture agreement at
December 31, 1997. The Partnership acquired, through this
venture, a shopping center which was sold December 30, 1997.
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 agreement or due to the Partnership's
obligations as a general partner, the Partnership may have been
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<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
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.
In connection with the sale of this property, as is
customary in such transactions, the Partnership agreed to
certain representations and warranties, with a stipulated
survival period which expired, with no liability to the
Partnership, on December 31, 1997.
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 resulted in a gain of
approximately $1,234,000 (due primarily to the provision for
value impairment of $3,400,000 recorded in September 1995) for
financial reporting purposes and a loss of approximately
$2,139,000 for Federal income tax purposes in 1997.
In connection with the sale of this property, as is
customary in such transactions, the Partnership agreed to
certain representations and warranties, which expired, with no
liability to the Partnership, in early September 1997.
The Partnership had been actively pursuing the sale of the
Carson Industrial Park property which had been classified as
held for sale as of October 1, 1996 and therefore had not been
subject to continued depreciation as of such date. In April
1997, the Partnership entered into a contract with a potential
purchaser for the sale of this property for a sale price of
$7,200,000. On August 15, 1997, the sale of the property was
completed with the Partnership receiving the cash proceeds, net
of selling costs and prorations, at closing. Accordingly,
Partnership recognized a gain of approximately $1,760,000 for
financial reporting purposes (primarily as a result of a
$4,300,000 value impairment provision recorded by the
Partnership in 1995), and a loss of approximately $2,473,000 for
Federal income tax purposes in 1997.
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
In connection with the sale of this property, as is
customary in such transactions, the Partnership agreed to
certain representations and warranties, which expired, with no
liability to the Partnership, on December 15, 1997.
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 had 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 recognized a gain of approximately $566,000 for
financial reporting purposes (primarily as a result of a
$1,400,000 value impairment recorded by the Partnership in 1995)
and a loss of approximately $726,000 for Federal income tax
purposes in 1997.
In connection with the sale of this property, as is
customary in such transactions, the Partnership agreed to
certain representations and warranties, which expired, with no
liability to the Partnership, on December 15, 1997.
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.
As the Partnership had committed to a plan to sell the
property, the property had been classified as held for sale as
of December 31, 1996 and therefore was not subject to continued
depreciation as of that date.
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
On November 17, 1997, the Partnership entered into an
agreement to sell the Property for a sale price of $4,100,000.
The Partnership received the sale price in cash at closing, net
of selling costs and prorations. The sale resulted in no
significant gain or loss to the Partnership for financial
reporting purposes, primarily as a result of value impairment
provisions totaling $9,250,000 recorded by the Partnership in
1995, 1996 and 1997. In addition, the Partnership recognized a
loss on sale of approximately $8,900,000 for Federal income tax
purposes in 1997.
In connection with the sale of this property, as is
customary in such transactions, the Partnership agreed to
certain representations and warranties, with a stipulated
survival period which expires in mid-September, 1998. Although
it is not expected, the Partnership may ultimately have some
liability under such representaions and warranties.
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 be
distributed or allocated based on the capital contributions made
by each partner. Distributions and allocations to date have
been made (and any obligations to make additional capital
contributions will be made) 50% to the Partnership.
As of December 31, 1996, JMB/Landings had committed to a
plan to sell the property and therefore the property was
classified by the JMB/Landings venture as held for sale and was
not subject to continued depreciation as of that date.
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<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
the net basis of the investment property to its then estimated
fair value.
An affiliate of the General Partners of the Partnership
managed the property for a fee equal to 4% of the property's
gross receipts. Such property management fees for the years
ended December 31, 1997, and 1996 and 1995 aggregated $41,809,
$43,866 and $45,840, respectively.
On November 25, 1997, JMB/Landings entered into an agreement
to sell the property for a sale price of $9,700,000.
JMB/Landings received the sale price in cash at closing, net of
selling costs and prorations. The sale resulted in a gain of
approximately $1,939,000 to JMB/Landings for financial reporting
purposes (of which the Partnership's share was approximately
$970,000), primarily as a result of a value impairment provision
of $3,500,000 (of which the Partnership's share was $1,750,000)
recorded by JMB/Landings in 1995. In addition, JMB/Landings
recognized a loss on sale of approximately $1,448,000 for
Federal income tax purposes in 1997 (of which the Partnership's
share was approximately $724,000).
In connection with the sale of this property, as is
customary in such transactions, JMB/Landings agreed to certain
representations and warranties, with a stipulated survival
period which expires in late June, 1998. Although it is not
expected, JMB/Landings may ultimately have some liability under
such representations and warranties which, in no event, is to
exceed $400,000 (of which the Partnership's share would be
$200,000).
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.
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 and the CIP/Ashby venture was liquidated
in 1997.
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.
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
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 was $1,134,043), primarily as a result
of a $7,572,479 provision for value impairment recorded by
CIP/Ashby in 1994 (of which the Partnership's share was
$2,347,468) 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).
In connection with the sale of this property, as is
customary in such transactions, CIP/Ashby agreed to certain
representations and warranties, with a stipulated survival
period which expired in late August, 1997, with no liability to
CIP/Ashby.
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 were 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 was acting as the
property manager of the Carson and Costa Mesa Industrial Parks
and the Rancho Franciscan and Ashby at McLean Apartments after
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 <PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
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. Notwithstanding such profit and loss allocation
provisions, the Partnership Agreement further provides that if
at any time profits (including items thereof) are realized by
the Partnership, any current or anticipated event that would
cause the deficit balance in absolute amount in the capital
accounts of the General Partners to be greater than their share
of the Partnership's indebtedness (as defined) after such event,
then the General Partners shall be allocated profits to the
extent necessary to cause the deficit balance in the capital
accounts of the General Partners to be no less than their
respective share of the Partnership's indebtedness after such
event. In general, the effect of this provision is to defer the
recognition of gain to the Limited Partners; such provision was
applied to the gain allocated to the General Partners for
financial reporting purposes in 1997.
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 <PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
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 will not receive an amount equal to
their initial contributed capital from the aggregate sale
proceeds of all of the Partnership's investment properties, the
General Partners will not receive any distributions of proceeds
from sales.
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, 1997,
and for the years ended December 31, 1997, 1996 and 1995 are as
follows:
UNPAID AT
DECEMBER 31,
1997 1996 1995 1997
--------- --------- --------- ----------
Property management
and leasing
fees $ 39,205 96,140 89,917 4,555
Insurance
commissions 6,975 15,712 18,132 --
Reimbursement (at
cost) for accounting
services 15,918 5,389 71,651 7,783
Reimbursement
(at cost) for
portfolio management
services 35,005 21,112 27,760 9,054
Reimbursement
(at cost) for
legal services 7,592 7,861 1,565 1,040
Reimbursement
(at cost) for
administrative
charges and other
out of pocket
expenses 5,880 774 112,165 5,756
-------- ---------------------- --------
$ 110,575 146,988 321,190 28,188
======== ======== ======== ========
[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
Combined summary financial information for JMB/Landings, which sold its investment property in
December 1997, as of and for the years ended December 31, 1997 and 1996, and CIP/Ashby, which sold
its investment property in August 1996, as of December 31, 1996 and for the years ended December 31,
1997 and 1996 is as follows:
<CAPTION>
1997 1996
----------- -----------
<S> <C>
Current assets . . . . . . . . . . . . . . . . . $ 10,863,026 1,248,636
Current liabilities. . . . . . . . . . . . . . . (14,369) (35,771)
----------- -----------
Working capital. . . . . . . . . . . . 10,848,657 1,212,865
----------- -----------
Property held for sale or disposition. . . . . . -- 7,075,078
Other assets, net. . . . . . . . . . . . . . . . -- 111,504
Other liabilities. . . . . . . . . . . . . . . . -- (31,382)
Venture partner's equity . . . . . . . . . . . . (5,423,718) (4,191,013)
----------- -----------
Partnership's capital. . . . . . . . . $ 5,424,939 4,177,052
=========== ===========
Represented by:
Invested capital . . . . . . . . . . . . . . . $ 6,705,838 14,644,795
Cumulative distributions . . . . . . . . . . . (2,729,801) (11,476,451)
Cumulative earnings (loss) . . . . . . . . . . 1,448,902 1,008,708
----------- -----------
$ 5,424,939 4,177,052
=========== ===========
<PAGE>
CARLYLE INCOME PLUS, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONCLUDED
1997 1996
JMB/LANDINGS (property sold December 30, 1997) ----------- ----------
Total income . . . . . . . . . . . . . . . . . . $ 960,184 1,038,681
=========== ==========
Expenses applicable to earnings . . . . . . . . $ 319,430 731,675
(depreciation suspended December 31, 1996) =========== ==========
Earnings (loss). . . . . . . . . . . . . . . . . $ 640,754 307,006
=========== ==========
Partnership's share of earnings (loss) . . . . . $ 320,377 153,503
=========== ==========
Gain on sale of property . . . . . . . . . . . . $ 1,938,838 --
=========== ==========
Partnership's share of gain on sale of property $ 969,419 --
=========== ==========
CIP/ASHBY (property sold August 26, 1996)
Total Income . . . . . . . . . . . . . . . . . . $ 4,550 2,683,046
=========== ==========
Expenses applicable to earnings (depreciation
suspended April 1, 1996). . . . . . . . . . . . $ 11,327 1,334,670
=========== ==========
Earnings (loss). . . . . . . . . . . . . . . . . $ (6,777) 1,348,376
=========== ==========
Partnership's share of earnings (loss) . . . . . $ (2,101) 417,997
=========== ==========
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, 1995, total income was $1,272,150 and $3,290,699; expenses
applicable to operating earnings were $4,306,385 (including a $3,500,000 provision for value
impairment) and $2,157,041, and net operating earnings (loss) was $(3,034,235) and $(1,133,658),
respectively, for JMB/Landings and CIP/Ashby.
SUBSEQUENT EVENT
In February 1998, the Partnership paid a distribution of $10,212,927 ($115.00 per Interest) to
the Holders of Interests, which included $100 per Interest from the proceeds of the December 1997
sale of the Sunrise Town Center and distributions received from JMB/Landings relating to the December
1997 sale of the Landings Shopping Center and $15 per Interest from Partnership operational cash flow
and reserves. The Partnership also paid a distribution of $70,112 to the General Partners, which
represented their share of Partnership operational cash flow and reserves. The General Partners will
not receive their share of any distributions of proceeds from the sales, as discussed above.
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Carlyle Income Plus, Ltd.:
We have audited the financial statements of JMB/Landings
Associates ("JMB/Landings"), an unconsolidated venture of
Carlyle Income Plus, Ltd. (the "Partnership"), as listed in the
accompanying index. These financial statements are the
responsibility of the General Partners of the Partnership. Our
responsibility is to express an opinion on these financial
statements 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 JMB/Landings, an unconsolidated venture of Carlyle Income
Plus, Ltd., as of December 31, 1997 and 1996, and the results of
its operations and its cash flows for each of the years in the
three-year period ended December 31, 1997, in conformity with
generally accepted accounting principles.
As discussed in the Notes to 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.
Chicago, Illinois
March 25, 1998 KPMG PEAT MARWICK LLP<PAGE>
<TABLE>
JMB/LANDINGS ASSOCIATES
(AN UNCONSOLIDATED VENTURE OF CARLYLE INCOME PLUS, LTD.)
BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
ASSETS
------
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . $ 10,850,862 1,065,499
Rents and other receivables. . . . . . . . . . . . . . . . 12,164 68,810
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . -- 6,758
------------ -----------
Total current assets . . . . . . . . . . . . . . . 10,863,026 1,141,067
------------ -----------
Investment property held for sale . . . . . . . . . . . . . -- 7,075,077
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . -- 2,839
Accrued rents receivable . . . . . . . . . . . . . . . . . . -- 108,666
------------ -----------
$ 10,863,026 8,327,649
============ ===========<PAGE>
JMB/LANDINGS ASSOCIATES
(AN UNCONSOLIDATED VENTURE OF CARLYLE INCOME PLUS, LTD.)
BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
1997 1996
------------ -----------
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . .$ 14,369 27,202
------------ -----------
Total current liabilities. . . . . . . . . . . . . . 14,369 27,202
Tenant security deposits . . . . . . . . . . . . . . . . . . . -- 31,382
------------ -----------
Commitments and contingencies
Total liabilities. . . . . . . . . . . . . . . . . . 14,369 58,584
Partners' capital accounts:
Carlyle Income Plus, Ltd.:
Capital contributions. . . . . . . . . . . . . . . . . . . 6,705,838 6,705,838
Cumulative net earnings (loss) . . . . . . . . . . . . . . 1,448,902 159,106
Cumulative cash distributions. . . . . . . . . . . . . . . (2,729,801) (2,729,801)
------------ -----------
5,424,939 4,135,143
------------ -----------
Venture partner capital account:
Capital contributions. . . . . . . . . . . . . . . . . . . 6,704,617 6,704,617
Cumulative net earnings (loss) . . . . . . . . . . . . . . 1,448,902 159,106
Cumulative cash distributions. . . . . . . . . . . . . . . (2,729,801) (2,729,801)
------------ -----------
5,423,718 4,133,922
------------ -----------
Total partners' capital accounts. . . . . . . . . . . . . 10,848,657 8,269,065
------------ -----------
$ 10,863,026 8,327,649
============ ===========
<FN>
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
JMB LANDINGS ASSOCIATES
(AN UNCONSOLIDATED VENTURE OF CARLYLE INCOME PLUS, LTD.)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<CAPTION>
1997 1996 1995
----------- ---------- ----------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . $ 897,486 993,821 1,260,787
Interest income. . . . . . . . . . . . . . 62,698 44,860 11,363
----------- ---------- ----------
960,184 1,038,681 1,272,150
----------- ---------- ----------
Expenses:
Depreciation . . . . . . . . . . . . . . . -- 263,496 333,457
Property operating expenses. . . . . . . . 313,495 452,979 463,563
Amortization of deferred expenses. . . . . 5,935 15,201 9,365
Provision for value impairment . . . . . . -- -- 3,500,000
----------- ---------- ----------
319,430 731,676 4,306,385
----------- ---------- ----------
$ 640,754 307,005 (3,034,235)
Gain on sale of investment property. . . . . $ 1,938,838 -- --
----------- ---------- ----------
Net earnings (loss) $ 2,579,592 307,005 (3,034,235)
=========== ========== ==========
<FN>
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
JMB/LANDINGS ASSOCIATES
(AN UNCONSOLIDATED VENTURE OF CARLYLE INCOME PLUS, LTD.)
STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<CAPTION>
CARLYLE INCOME AFFILIATED
PLUS, LTD. PARTNERSHIP TOTAL
------------- ------------ ------------
<S> <C> <C>
Balance at December 31, 1994 . . . $ 5,748,758 5,747,537 11,496,295
Net earnings (loss). . . . . . . . (1,517,117) (1,517,118) (3,034,235)
Cash distributions . . . . . . . . (250,000) (250,000) (500,000)
------------ ------------ ------------
Balance at December 31, 1995 . . . 3,981,641 3,980,419 7,962,060
Net earnings . . . . . . . . . . . 153,502 153,503 307,005
Cash distributions . . . . . . . . -- -- --
------------ ------------ ------------
Balance at December 31, 1996 . . . 4,135,143 4,133,922 8,269,065
Net earnings (loss). . . . . . . . 1,289,796 1,289,796 2,579,592
Cash distributions . . . . . . . . -- -- --
------------ ------------ ------------
Balance at December 31, 1997 . . . $ 5,424,939 5,423,718 10,848,657
============ ============ ============
/TABLE
<PAGE>
<TABLE>
JMB/LANDINGS ASSOCIATES
(AN UNCONSOLIDATED VENTURE OF CARLYLE INCOME PLUS, LTD.)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . $ 2,579,592 307,005 (3,034,235)
Items not requiring (providing) cash:
Depreciation . . . . . . . . . . . . . . . . -- 263,496 333,457
Amortization of deferred expenses. . . . . . 5,935 15,201 9,365
Provision for value impairment . . . . . . . -- -- 3,500,000
Gain on sale of investment property. . . . . (1,938,838) -- --
Changes in:
Rents and other receivables. . . . . . . . 56,646 2,493 (54,457)
Prepaid expenses . . . . . . . . . . . . . 6,758 (151) 680
Accrued rents receivable . . . . . . . . . 15,591 89,106 22,416
Accounts payable . . . . . . . . . . . . . (12,833) 12,448 (4,874)
Tenant security deposits . . . . . . . . . (31,382) 1,614 833
----------- ----------- -----------
Net cash provided by (used in) 681,469 691,212 773,185
operating activities . . . . . . . . ----------- ----------- -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of
short-term investments . . . . . . . . . . -- -- 198,965
Cash proceeds from sale of investment property 9,298,544 -- --
Additions to investment property . . . . . . (160,510) (127,895) (15,000)
Payment of deferred expenses . . . . . . . . (34,140) -- --
----------- ----------- -----------
Net cash provided by (used in)
investing activities . . . . . . . 9,103,894 (127,895) 183,965
----------- ----------- -----------
<PAGE>
JMB/LANDINGS ASSOCIATES
(AN UNCONSOLIDATED VENTURE OF CARLYLE INCOME PLUS, LTD.)
STATEMENTS OF CASH FLOWS - CONTINUED
1997 1996 1995
----------- ----------- -----------
Cash flows from financing activities:
Cash distributions paid to partners. . . . . -- -- (500,000)
----------- ----------- -----------
Net cash provided by (used in)
financing activities . . . . . . . -- -- (500,000)
----------- ----------- -----------
Net increase (decrease) in cash
and cash equivalents . . . . . . . 9,785,363 563,317 457,150
Cash and cash equivalents,
beginning of year. . . . . . . . . 1,065,499 502,182 45,032
----------- ----------- -----------
Cash and cash equivalents,
end of year. . . . . . . . . . . .$ 10,850,862 1,065,499 502,182
=========== =========== ===========
Supplemental disclosure of cash flow
information:
Cash paid for mortgage and
other interest . . . . . . . . . . . . . .$ -- -- --
=========== =========== ===========
Non-cash investing and financing
activities . . . . . . . . . . . . . . . .$ -- -- --
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
/TABLE
<PAGE>
JMB/LANDINGS ASSOCIATES
(AN UNCONSOLIDATED VENTURE OF CARLYLE INCOME PLUS, LTD.)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
OPERATIONS AND BASIS OF ACCOUNTING
The accompanying financial statements have been prepared
for the purpose of complying with Rule 3.09 of Regulation S-X of
the Securities and Exchange Commission. They include the
accounts of the unconsolidated joint venture, JMB/Landings
Associates ("JMB/Landings") in which Carlyle Income Plus, Ltd.
(the "Partnership") and an affiliate of the General Partners of
Carlyle Income Plus, Ltd. are partners.
JMB/Landings had the exclusive purpose of owning a 100%
interest in the Landings Shopping Center, located in Sarasota,
Florida, which was sold on December 30, 1997. Business
activities consisted of rentals to a variety of commercial and
retail companies and the ultimate sale of such real estate.
The preparation of financial statements in accordance with
GAAP requires JMB/Landings 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.
The accounting polices of JMB/Landings are the same as
those of the Partnership. Accordingly, reference is made to the
Notes to the Partnership's financial statements filed with this
annual report. Such notes are incorporated herein by reference.
The Landings Shopping Center was classified as held for
sale as of December 31, 1996 and, therefore, was not subject to
continued depreciation beyond that date.
INVESTMENT PROPERTY
A description of the acquisition and other events relating
to the property and the venture partnership agreement, including
the 1995 provision for value impairment and the December 30,
1997 sale of the property is contained in the Notes to Financial
Statements of Carlyle Income Plus, Ltd. Such notes are
incorporated herein by reference.
MANAGEMENT AGREEMENT
A description of the terms of the management agreement is
contained in the Notes to the Partnership's financial
statements. Such notes are incorporated herein by reference.
<PAGE>
LEASES - As Property Lessor
JMB/Landings sold its principal asset, the Landings
Shopping Center, on December 30, 1997. JMB/Landings had
determined that all leases relating to this property were
property classified as operating leases; therefore, rental
income was reported when earned and the cost of the property,
excluding cost of land, was depreciated over the estimated
useful life. Leases with tenants ranged in term from three to
eleven years and provided for fixed minimum rent and partial to
full reimbursement of operating costs. A substantial portion of
the ability of the retail tenants at the Landings Shopping
Center to honor their leases was dependent upon the retail
economic sector.<PAGE>
<TABLE>
<CAPTION>
TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by JMB/Landings to affiliates of JMB
Realty Corporation as of December 31, 1997 and for the years ended December 31, 1997, 1996 and
1995 are as follows:
UNPAID AT
DECEMBER 31,
1997 1996 1995 1997
-------- -------- -------- --------------
<S> <C> <C> <C> <C>
Property management and
leasing fees . . . . . . . . . . $ 41,809 43,866 45,840 3,221
Insurance commissions. . . . . . . 989 2,696 2,374 --
------- ------- ------- -------
$ 42,798 46,562 48,214 3,221
======= ======= ======= =======
<FN>
/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 1997 and 1996.
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., an Illinois limited
partnership with JMB as its sole general partner. The limited
partners of the Associate General Partner are generally officers,
directors and affiliates of JMB or its affiliates.
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 and/or for
the sale of property. Because the timing and amount of cash
distributions and profits and losses of the Partnership may be
affected by various determinations by the General Partners under
the Partnership Agreement, including whether and when to sell 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 Partners may have a
conflict of interest with respect to such determinations.
<PAGE>
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 3, 1998. 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 3, 1998. 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-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.-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")), 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, directly or indirectly, of certain
partnerships which are associate general partners in the following
real estate limited partnerships: the Partnership, Carlyle-VII,
Carlyle-XI, Carlyle-XII, Carlyle-XIII, Carlyle-XIV, Carlyle-XVI,
Carlyle-XVII, 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 60) 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 also a director of Urban
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.
<PAGE>
Neil G. Bluhm (age 60) is an individual general partner of JMB
Income-IV, JMB Income-V. Mr. Bluhm has been associated with JMB
since August 1970. He is also a principal of Walton Street Real
Estate Fund I, L.P. and 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 59) 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 56) has been associated with JMB since
July 1972. He is a member of the Bar of the State of Illinois.
A. Lee Sacks (age 64) has been associated with JMB since
December 1972. He is also President and a director of JMB
Insurance Agency Inc.
John G. Schreiber (age 51) has been associated with JMB since
December 1970, and served as an Executive Vice President of JMB
until December 1990. 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 Advisors L.P., an affiliate of the
Blackstone Group, L.P. He is also a director of USC, Inc., a
trustee of Amli Residential Property Trust and a director of a
number 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 48) 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 50) 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 45) 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.
Gailen J. Hull (age 49) 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 62) 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 1997, 1996 and 1995, cash distributions of
$74,786, $186,964, and $257,076, respectively, were paid to the
General Partners. The General Partners were allocated taxable loss
of $121,903 in 1997.
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 1997 for certain properties.
Such affiliate earned property management and leasing fees
amounting to $39,205, of which $4,555 was unpaid as of December 31,
1997.
JMB Insurance Agency, Inc., an affiliate of the Corporate
General Partner, earned and received insurance brokerage
commissions in 1997 aggregating $6,975. 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 1997 for accounting services, portfolio
management services, legal services and for administrative charges
and other out-of-pocket expenses of $15,918, $35,005, $7,592, and
$5,880, respectively, of which $23,633 was unpaid at December 31,
1997.
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 General Partner 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 and Assignee indirectly
Interests therein
Limited Partnership Corporate General Partner, 7.07865 Interests Less than
Interests and Assignee its officers and directors and 1%
Interests therein the Associate General Partner
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 Interests.
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.
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
</TABLE>
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.
10.6 Real Property Purchase Agreement between
JMB/Landings Associates and Inland Real
Estate Acquisitions, dated November 25, 1997
relating to the sale by JMB/Landings
Associates of the Landings Shopping Center is
hereby incorporated herein by reference to
the Partnership's report for December 30,
1997 on Form 8-K (File No. 000-16975) dated
January 12, 1998.
10.7 Real Property Purchase Agreement between
Carlyle Income Plus, Ltd. and PEBB
Enterprises Sunrise Town Center Ltd., dated
November 17, 1997 relating to the sale by the
Partnership of the Sunrise Town Center is
hereby incorporated herein by reference to
the Partnership's report for December 16,
1997 on Form 8-K (File No. 000-16975) dated
December 29, 1997.
10.8 Real Property Puchase Agreement between
Carlyle Income Plus, Ltd. and Koll
Cornerstone II, dated April 21, 1997 relating
to the sale by the Partnership of the Carson
Industrial Park is hereby incorporated herein
by reference to the Partnership's Report for
August 15, 1997 on Form 8-K (File No. 000-
16925) dated August 28, 1997.
10.9 Real Property Purchase Agreement between
Carlyle Income Plus, Ltd., Hamilton Airway I,
LLC, and John W. Hamilton dated February 27,
1997 relating to the sale by the Partnership
of the Costa Mesa Industrial Park is hereby
incorporated herein by reference to the
Partnership's Report for March 3, 1997 on
Form 8-K (File No. 000-16975) dated March 14,
1997.
10.10 Real Property Purchase Agreement between
Carlyle Income Plus, Ltd. and Steven I. Lyons
and Michael Towbes, as tenants in common,
dated January 7, 1997 relating to the sale by
the Partnership of the Rancho Franciscan
Apartments is hereby incorporated herein by
reference to the Partnership's Report for
January 22, 1997 on Form 8-K (File No. 000-
16975) dated January 31, 1997.
21. 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
November 17, 1997 describing the sale of Sunrise Town 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 November 25, 1997 describing the sale of JMB/Landings
Shopping Center was filed. No financial statements were
required to be filed therewith.
- -------------
* 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.
No annual report for the fiscal year 1997 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.<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 25, 1998
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 25, 1998
NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 25, 1998
By: H. RIGEL BARBER*
H. Rigel Barber, Chief Executive Officer
Date: March 25, 1998
By: GLENN E. EMIG*
Glen E. Emig, Chief Operating Officer
Date: March 25, 1998
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 25, 1998
By: A. LEE SACKS*
A. Lee Sacks, Director
Date: March 25, 1998
STUART C. NATHAN*
By: Stuart C. Nathan, Executive Vice President and
Director
Date: March 25, 1998
*By: GAILEN J. HULL, Pursuant to a Power of Attorney
By: Gailen J. Hull, Attorney-in-Fact
Date: March 25, 1998
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.-
10.10 * 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 held title to The Landings Shopping Center,
located in Sarasota, Florida.
The Partnership was 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, 1997 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 30th day of January, 1998.
_______________________
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, 1997 and any and
all amendments thereto, the 30th day of January, 1998.
------------------------------
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, 1997 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 30th day of January 1998.
_____________________________________
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, 1997 and any and all amendments thereto,
the 30th day of January 1998.
---------------------------------------------
Gary Nickele
---------------------------------------------
Gailen J. Hull
---------------------------------------------
Dennis M. Quinn
<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, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS INCLUDED IN SUCH REPORT.
</LEGEND>
<CIK> 0000792978
<NAME> CARLYLE INCOME PLUS, LTD.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 6,453,795
<SECURITIES> 0
<RECEIVABLES> 118,244
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,572,039
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,996,978
<CURRENT-LIABILITIES> 113,894
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 11,883,084
<TOTAL-LIABILITY-AND-EQUITY> 11,996,978
<SALES> 1,582,241
<TOTAL-REVENUES> 2,127,369
<CGS> 0
<TOTAL-COSTS> 740,209
<OTHER-EXPENSES> 424,460
<LOSS-PROVISION> 2,900,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,937,300)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,619,024)
<DISCONTINUED> 4,519,657
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,900,633
<EPS-PRIMARY> 31.51
<EPS-DILUTED> 31.51
</TABLE>
