UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1995
Commission file Number 0-16820
FIRST DEARBORN INCOME PROPERTIES L.P.
(Exact name of registrant as specified in its charter.)
ILLINOIS 36-3473943
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
154 West Hubbard, Suite 250 Chicago, IL 60610
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 464-0100
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 the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practical date:
Units Outstanding as of September 30, 1995: 20,468.5
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
FIRST DEARBORN INCOME PROPERTIES L.P.
BALANCE SHEETS
September 30, 1995 and December 31, 1994
(Unaudited)
ASSETS
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) 408,270 509,641
Rents and other receivables 928,274 940,710
Due from affiliates 6,841 5,037
Prepaid expense 14,516 9,007
Total current assets 1,357,901 1,464,395
Investment property, at cost (note 1):
Land 2,273,114 2,273,114
Building 15,604,195 15,585,295
17,877,309 17,858,409
Less accumulated depreciation (4,681,480) (4,316,293)
13,195,829 13,542,116
Investment in unconsolidated venture,
at equity (note 2) 940,356 937,948
Deferred rents receivable 1,137,857 1,745,646
Deferred loan costs 45,432 36,835
Total assets 16,677,375 17,726,940
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Balance Sheets
September 30, 1995 and December 31, 1994
(Unaudited)
Liabilities and Partners' Capital Accounts
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
Current liabilities:
Accounts payable and accrued expenses 216,907 213,738
Due to affiliates (note 3) 232,608 220,689
Accrued interest 62,806 68,832
Current portion of long-term debt 201,360 4,856,937
Total current liabilities 713,681 5,626,375
Long-term debt 8,778,879 4,586,785
Venture partners' equity in
consolidated venture (note 2) 1,002,250 1,356,596
Deposits 135,545 118,947
Total long-term liabilities 9,916,674 6,062,328
Total liabilities 10,630,355 11,422,524
Partners' capital accounts (deficits) (note 1):
General partners:
Cumulative net losses 1,179 1,835
1,179 1,835
Limited partners:
Capital contributions 8,800,461 8,800,461
Cumulative net income (losses) 124,149 189,107
Cumulative cash distributions (2,878,769) (2,686,987)
6,045,841 6,302,581
Total partners' capital accounts 6,047,020 6,304,416
Commitments and contingencies (note 2)
Total Liabilities and Partners' Capital 16,677,375 17,726,940
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Consolidated Statement of Operations
Three months ended September 30, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
<S> <C> <C>
Revenues:
Rental income 357,013 415,987
Tenant charges 27,305 24,697
Interest income 30,046 2,085
Total revenues 414,364 442,769
Expenses:
Property operating expenses 93,789 52,254
Interest 203,743 210,175
Depreciation 101,125 102,820
Amortization 5,312 5,312
General and administrative expenses 30,513 24,071
Total expenses 434,482 394,632
Operating income (loss) (20,118) 48,137
Partnership's share of oprations
of unconsolidated ventures 40,599 21,291
Venture partner's share of consolidated
venture's operations 53,122 6,141
Net income 73,603 75,569
Net income per limited partnership unit 3.56 3.66
Cash distribution per limited partnership unit 1.89 3.74
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Consolidated Statement of Operations
Nine months ended September 30, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
<S> <C> <C>
Revenues:
Rental income 1,012,338 1,246,354
Tenant charges 76,599 73,035
Interest income 94,879 6,911
Total revenues 1,183,816 1,326,300
Expenses:
Property operating expenses 276,585 194,373
Interest 612,680 654,895
Depreciation 365,187 368,651
Amortization 15,935 15,935
General and administrative expenses 125,911 104,380
Total expenses 1,396,298 1,338,234
Operating loss (212,482) (11,934)
Partnership's share of operations
of unconsolidated ventures 104,550 43,613
Venture partner's share of consolidated
venture's operations (note 1) 42,318 (17,662)
Net income (loss) (65,614) 14,017
Net income (loss) per
limited partnership unit (note 1) $ (3.17) 0.68
Cash distribution per
limited partnership unit $ 9.37 11.22
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Consolidated Statements of Cash Flows
Nine months ended September 30, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) (65,614) 14,017
Items not requiring (providing)
cash or cash equivalents:
Depreciation 365,187 368,651
Amortization 15,935 15,935
Partnership's share of operations of
unconsolidated venture (2,408) 44,158
Venture partners' share of
consolidated venture's operations (354,346) (24,005)
Changes in:
Rents and other receivables 12,436 64,580
Prepaid expenses (5,509) (4,356)
Deferred rents receivable 607,789 0
Accounts payable and accrued expenses (2,857) (21,329)
Due to affiliates 10,115 18,798
Unearned revenues 0 (71,245)
Tenant deposits 16,598 3,102
Net cash provided by (used in)
operating activities 597,326 408,306
Additions to building: (18,900) (9,026)
Cash flows from financing activities:
Payment of deferred loan costs (24,531) 0
Distributions to limited partners (191,782) (229,662)
Principal payments on long-term debt (463,483) (164,009)
Net cash used in financing activities (679,796) (393,671)
Net increase (decrease)
in cash and cash equivalents (101,370) 5,609
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements
September 30, 1995 and 1994
(Unaudited)
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1994,
which are included in the Partnership's 1994 Annual Report, as certain
footnote disclosures which would substantially duplicate those contained
in such audited financial statements have been omitted from this report.
(1) Basis of Accounting
For the three and nine month periods ended September 30, 1995 and
September 30, 1994, the accompanying consolidated financial statements
include the accounts of the Partnership and its consolidated ventures
Vero Beach Associates and Downers Grove Building Partnership. The effect
of all transactions between the Partnership and the Ventures has been
eliminated.
The equity method of accounting has been applied in the accompanying
consolidated financial statements with respect to the Partnership's interest
in Sycamore Mall Associates.
The Partnership records are maintained on the accrual basis of accounting
as adjusted for Federal income tax reporting purposes. The accompanying
consolidated financial statements have been prepared from such records after
making appropriate adjustments, where applicable, to present the Partnership's
accounts in accordance with generally accepted accounting principles (GAAP).
Such adjustments are not recorded on the records of the Partnership. The
net effect of these adjustments for the three and nine month periods ended
September 30, 1995 and 1994 is summarized as follows:
<TABLE>
<CAPTION>
1995 1995 1994 1994
GAAP Tax GAAP Tax
Basis Basis Basis Basis
<S> <C> <C> <C> <C>
Net income (loss) (65,614) (115,000) 14,017 (44,000)
Net income (loss) per
limited partnership unit (3.17) (5.56) (2.98) (5.15)
</TABLE>
The net loss per limited partnership unit presented is based on the
weighted limited partnership units outstanding at the end of each period
(20,468.5).
Partnership distributions from unconsolidated ventures are considered
cash flow from operating activities to the extent of the Partnership's
cumulative share of net operating earnings before depreciation and non-cash
items. In addition, the Partnership records amounts held in U.S. Government
obligations, commercial paper and certificates of deposit at cost which
approximates market. For the purposes of these statements, the Partnership's
policy is to consider all such investments, with an original maturity of
three months or less, ($286,635 and $187,663 at September 30, 1995 and
December 31, 1994, respectively) as cash equivalents.
<PAGE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
Deferred offering costs were charged to the partners' capital accounts
upon consummation of the offering. Deferred organization costs are amortized
over a 60-month period using the straight-line method. Deferred loan costs
are amortized over the terms of the related agreements using the straight-line
method.
Depreciation on the investment properties acquired has been provided
over the estimated useful lives of 5 to 30 years using the straight-line
method.
No provision for Federal income taxes has been made as any liability
for such taxes would be that of the partners rather than the Partnership.
(2) Venture Agreements
The Partnership has entered into three joint venture agreements with
partnerships sponsored by affiliates of the General Partners. Pursuant to
such agreements, the Partnership has made capital contributions aggregating
$7,685,642 through September 30, 1995. The Partnership has acquired,
through these ventures, interests in two shopping centers and an office
building partnership.
(3) Transactions with Affiliates
Fees, commissions and other expenses required to be paid by the
Partnership to affiliates of the General Partners for the nine months
ended September 30, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
1995 1994 9/30/95
<S> <C> <C> <C>
Non-accountable expense reimbursement 19,191 19,191 222,127
Reimbursement (at cost) for
administrative services 10,500 21,457 9,750
29,691 40,648 231,877
</TABLE>
(4) Unconsolidated Ventures - Summary Information
Summary income statement information for Sycamore Mall Associates for
the nine months ended September 30, 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Total revenue 1,413,556 1,242,038
Operating income (loss) 256,469 172,794
Partnership's share of income 104,550 43,613
</TABLE>
<PAGE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
(5) Adjustments
In the opinion of the Managing General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying consolidated financial
statements as of September 30, 1995 and 1994.
(6) Subsequent Event
In October 1995, an extension and amendment of the mortgage indebtedness
at Sycamore Mall was completed. The loan is in the amount of $4,899,448 and
accrues interest at the annual rate of 8.125%, a reduction from 9.625%. The
loan provides for 76 monthly payments in the amount of $44,375. The loan
will mature in March 2002 and a final balloon payment of $3,790,900 would
be due at that time.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Resulting of Operations
Liquidity and Capital Resources
At September 30, 1994, the Partnership had cash and cash equivalents
of $408,270 which will be utilized for working capital requirements and for
future distributions to Partners. This is less than the $509,641 balance at
December 31, 1994. The decrease is primarily due to the repayment of
long-term debt.
As the Partnership intends to distribute all "net cash receipts" and
"sales proceeds" in accordance with the terms of the Partnership Agreement,
and does not intend to reinvest any such proceeds, the Partnership is
intended to be self-liquidating in nature. The Partnership's future source
of liquidity and distributions is expected to be through cash generated by
the Partnership's investment properties and from the sale and refinancing
of such properties. To the extent that additional payments are required under
a purchase agreement or a property does not generate an adequate cash flow
to meet its requirements, the Partnership may withdraw funds from the working
capital reserve which it maintains.
In August 1995, the Partnership completed the refinancing of the mortgage
indebtedness at the Downers Grove property. The loan is in the amount of
$4,586,044 and accrues interest at the annual rate of 9.125%. The loan
provides for the first six monthly payments of interest only in the amount
of $34,873. The next thirty monthly payments of principal and interest
be $55,170 and the final 84 monthly payments of principal and interest
would be $58,405. The loan will mature in August 2005 and a final principal
payment of $600,234 would be due at that time. The completion of this
refinancing substantially improves working capital of the Partnership by
providing long term financing for this property. The net rentals to be
received from this property are sufficient to pay the debt service.
The Partnership has reduced the amount of its regular distribution
to Limited Partners. The Partnership intends to build up additional cash
reserves at its Vero Beach property and at Sycamore Mall, the unconsolidated
venture. Walgreens has notified the Vero Beach property that it will
be vacating the center. Although the lease will not expire until 2007,
there will be no percentage rent realized from the space.
At Sycamore Mall, a new regional mall is being planned which will
compete with the center. The Partnership believes that it may need to
make some capital investments in order to better compete with the new mall.
Therefore, distributions from this unconsolidated venture to the
Partnership have been reduced.
<PAGE>
Results of Operations
For the three and nine month periods ended September 30, 1995 and
September 30, 1994 the accompanying consolidated financial statements
include the accounts of the Partnership and its consolidated ventures
Vero Beach Associates and Downers Grove Building Partnership. The effect
of all transactions between the Partnership and the Ventures has been
eliminated.
The equity method of accounting has been applied in the accompanying
consolidated financial statements with respect to the Partnership's interest
in Sycamore Mall Associates.
The $58,974 and $234,016 decreases in rental income for the three and
nine month periods ended September 30, 1995, respectively, as compared to
the three and nine month periods ended September 30, 1994 is primarily
attributable to lower rental rates paid by the new tenant at the Downers
Grove building.
The $27,961 and $87,968 increases in interest income for the three and
nine month periods ended September 30, 1995, respectively, as compared to
the three and nine month periods ended September 30, 1994 is attributable
to the annuities purchased in connection with the re-lease of the Downers
Grove property, which took place in 1994.
The $41,535 and $82,212 increases in property operating expense for the
three and nine month periods ended September 30, 1995 as compared to the
three and nine month periods ended September 30, 1994, is primarily
attributable to expenses incurred at the Downers Grove property. During the
previous year, these expenses were paid for by the tenant.
The $42,215 decrease in interest expense for the nine month period
ended September 30, 1995 as compared to the nine month period ended
September 30, 1994 is primarily attibutable to the reduction in mortgage
indebtedness at the Downers Grove property.
The $21,531 increase in general and administrative expense for the
nine months ended September 30, 1995 as compared to the nine months ended
September 30, 1994 is primarily attributable to professional fees incurred
at the Downers Grove property.
The $19,308 and $60,937 increases in the Partnership's share of
operations of unconsolidated ventures for the three and nine month periods
ended September 30, 1995, as compared to the three and nine month periods
ended September 30, 1994 is primarily attributable to increased occupancy
and improved operations at Sycamore Mall.
The Consolidated Statement of Cash Flows includes $607,789 of cash
provided during the nine month period ended September 30, 1995 and no
amount for the nine month period ended September 30, 1994. These cash
flows result from payments received from the annuities which were
established, at the Downers Grove property, in conjunction with the lease
termination of the prior tenant.
<PAGE>
Venture partners' share of consolidated operations utilized $354,346
of cash flow during the nine months ended September 30, 1995 as compared
to $24,005 during the nine months ended September 30, 1994. This is a
a result of the cash flows at the Downers Grove property which are being
funded from deferred rents which are being paid from the annuities.
During the nine month period ended September 30, 1995, the Partnership
paid $24,531 which was recorded as a deferred loan cost. This payment
relates to the refinancing of the mortgage indebtedness at the Downers
Grove property.
During the nine months ended September 30, 1995, payments to reduce
long term debt totalled $463,483 as compared to $164,009 during the nine
months ended September 30, 1994. This reduction relates to the Downers
Grove property and the agreement with the lender on that property to
accelerate the reduction of the mortgage indebtedness.
<TABLE>
OCCUPANCY
The following is a list of approximate occupancy levels by quarter
for the Partnership's investment properties:
<CAPTION>
at at at at at at at
3/31/94 6/30/94 9/30/94 12/31/94 3/31/95 6/30/95 09/30/95
<S> <C> <C> <C> <C> <C> <C> <C>
Indian River Plaza
Vero Beach, FL 96% 99% 99% 99% 99% 99% 99%
Reichhold Building
Downers Grove, IL 100% 100% 100% 100% 100% 100% 100%
Sycamore Mall
Iowa City, Iowa 98% 97% 97% 96% 96% 98% 97%
</TABLE>
<PAGE>
Part II - OTHER INFORMATION
Items 1, 2, 3, 4, and 5 of Part II are omitted because of the absence of
conditions under which they are required.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
None
b) Reports on Form 8-K
No reports on Form 8-K were filed for the period covered by this report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Partnership has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
FIRST DEARBORN INCOME PROPERTIES L.P.
(Registrant)
BY: FDIP, Inc.
(Managing General Partner)
November 14, 199 BY: Robert S. Ross
Robert S. Ross
President
(Principal Executive Officer)
November 14, 1995 BY: Bruce H. Block
Bruce H. Block
Vice President
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jul-01-1995
<PERIOD-END> Sep-30-1995
<PERIOD-TYPE> 3-MOS
<CASH> 408,270
<SECURITIES> 0
<RECEIVABLES> 928,274
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,357,901
<PP&E> 17,877,309
<DEPRECIATION> 4,681,480
<TOTAL-ASSETS> 16,677,375
<CURRENT-LIABILITIES> 713,681
<BONDS> 8,778,879
0
0
<COMMON> 0
<OTHER-SE> 6,045,841
<TOTAL-LIABILITY-AND-EQUITY> 16,677,375
<SALES> 387,059
<TOTAL-REVENUES> 414,364
<CGS> 0
<TOTAL-COSTS> 200,226
<OTHER-EXPENSES> 30,513
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 203,743
<INCOME-PRETAX> 73,603
<INCOME-TAX> 0
<INCOME-CONTINUING> 73,603
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 73,603
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
