UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ........ to ........
Commission file number 0-16820
FIRST DEARBORN INCOME PROPERTIES L.P.
(Exact name of registrant as specified in its charter)
Delaware 36-3473943
(State of organization) (IRS Employer Identification No.)
154 West Hubbard Street, 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 ____
Units outstanding as of September 30, 1997: 20,468.5
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Balance Sheets
September 30, 1997 and December 31, 1996
(Unaudited)
Assets
<CAPTION>
September 30, December 31,
1997 1996
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) 398,759 694,185
Rents and other receivables 1,257,478 1,167,408
Due from affiliates 3,482 2,215
Prepaid expense 8,325 9,307
Total current assets 1,668,044 1,873,115
Investment property, at cost (note 1):
Land 2,273,114 2,273,114
Building 15,638,446 15,629,211
17,911,560 17,902,325
Less accumulated depreciation (5,676,133) (5,304,609)
12,235,427 12,597,716
Investment in unconsolidated venture 899,352 908,649
Deferred rents receivable 714,117 855,090
Deferred loan costs 80,749 82,777
Total assets 15,597,689 16,317,347
<FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Balance Sheets
September 30, 1997 and December 31, 1996
(Unaudited)
Liabilities and Partners' Capital Accounts
<CAPTION>
September 30, December 31,
1997 1996
<S> <C> <C>
Current liabilities:
Accounts payable and accrued expenses 229,578 215,158
Due to affiliates (note 3) 283,787 262,509
Accrued interest 65,238 67,128
Unearned revenue - 60,538
Current portion of long-term debt 4,749,628 4,787,641
Total current liabilities 5,328,231 5,392,974
Long-term debt 3,878,675 4,101,986
Venture partners' equity
in consolidated venture (note 2) 1,225,362 1,276,196
Deposits 12,307 12,471
Total long-term liabilities 5,116,344 5,390,653
Total liabilities 10,444,575 10,588,326
Partners' capital accounts (deficits) (note 1):
General partners:
Cumulative net income (5,988) (3,342)
(5,988) (3,342)
Limited partners:
Capital contributions 8,800,461 8,800,461
Cumulative net income (455,678) (193,770)
Cumulative cash distributions (3,185,681) (3,070,939)
5,159,102 5,535,752
Total partners' capital accounts 5,153,114 5,533,720
Total Liabilities and Partners' Capital 15,597,689 16,317,347
<FN>
See accompanying notes to the 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, 1997 and 1996
(Unaudited)
<CAPTION>
1997 1996
<S> <C> <C>
Revenues:
Rental income 264,722 287,853
Tenant charges 31,620 25,820
Interest income 20,166 24,833
Total revenues 316,508 338,506
Expenses:
Property operating expenses 71,726 67,849
Interest 197,938 204,389
Depreciation 123,840 108,237
Amortization 3,032 8,286
General and administrative expenses 16,742 10,626
Total expenses 413,278 399,387
Operating loss (96,770) (60,881)
Partnership's share of operations
of unconsolidated ventures 27,804 25,899
Venture partner's share of consolidated
venture's operations (note 1) 7,207 878
Net income (loss) (61,759) (34,104)
Net income (loss)
per limited partnership unit (note 1) (2.99) (1.65)
Cash distribution
per limited partnership unit 1.87 1.87
<FN>
See accompanying notes to the 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, 1997 and 1996
(Unaudited)
<CAPTION>
1997 1996
<S> <C> <C>
Revenues:
Rental income 799,113 872,744
Tenant charges 94,770 81,690
Interest income 68,290 69,866
Total revenues 962,173 1,024,300
Expenses:
Property operating expenses 221,960 217,065
Interest 597,161 618,170
Depreciation 371,524 369,907
Amortization 12,230 24,857
General and administrative expenses 97,978 101,697
Total expenses 1,300,853 1,331,696
Operating loss (338,680) (307,396)
Partnership's share of operations
of unconsolidated ventures 52,530 76,813
Venture partner's share of consolidated
venture's operations (note 1) 21,596 24,454
Net income (loss) (264,554) (206,129)
Net income (loss)
per limited partnership unit (note 1) (12.80) (9.97)
Cash distribution
per limited partnership unit 5.61 5.63
<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 Septembr 30, 1997 and 1996
(Unaudited)
<CAPTION>
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) (264,554) (206,129)
Items not requiring (providing)
cash or cash equivalents:
Depreciation 371,524 361,907
Amortization 12,230 24,857
Partnership's share of operations of
unconsolidated venture 9,297 (44,008)
Venture partners' share of
consolidated venture's operations (50,834) (156,806)
Changes in:
Rents and other receivables (90,070) 603,810
Prepaid expenses 982 9,007
Deferred rents receivable 140,973 (201,912)
Accounts payable and accrued expenses 12,530 (21,885)
Unearned revenue (60,538) -
Due to affiliates 20,011 14,657
Tenant deposits (164) (16,417)
Net cash provided by (used in)
operating activities 101,387 375,074
Additions to building: (9,235) (34,541)
Cash flows from financing activities:
Distributions to limited partners (114,742) (115,235)
Payment of deferred loan costs 10,202 0
Principal payments on long-term debt (261,324) (74,545)
Net cash used in financing activities (386,268) (189,780)
Net increase (decrease)
in cash and cash equivalents (295,426) 150,753
<FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements
September 30, 1997 and 1996
(Unaudited)
Readers of this quarterly report should refer to the
Partnership's audited financial statements for the fiscal year ended
December 31, 1996, which are included in the Partnership's 1996 Annual
Report, as certain footnote disclosures which would substantially
duplicate those contained in such audited financial statements have
been omitted from this report.
(1) Basis of Accounting
For the three and nine month periods ended September 30, 1997 and
September 30, 1996, the accompanying consolidated financial statements
include the accounts of the Partnership and its consolidated ventures
- - Vero Beach Associates and Downers Grove Building Partnership (the
"Ventures"). 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 nine months ended September 30, 1997 and
1996 is summarized as follows:
<TABLE>
<CAPTION>
1997 1996
GAAP Tax GAAP Tax
Basis Basis Basis Basis
<S> <C> <C> <C> <C>
Net (loss) (264,554) (196,500) (206,129) (60,500)
Net (loss) per
limited partnership unit (12.80) (9.50) (9.97) (2.93)
</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).
<PAGE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
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
($148,210 and $291,741 at September 30, 1997 and December 31, 1996,
respectively) as cash equivalents.
Deferred offering costs were charged to the partners' capital
accounts upon consummation of the offering. 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, 1997. 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, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
Unpaid at
September 30,
1997 1996 1997
<S> <C> <C> <C>
Non-accountable expense reimbursement 19,191 19,191 273,303
Reimbursement (at cost)
for administrative services 13,500 12,500 9,000
32,691 31,691 282,303
</TABLE>
<PAGE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
(4) Unconsolidated Ventures - Summary Information
Summary income statement information for Sycamore Mall Associates
for the nine months ended September 30, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Total revenue 1,364,007 1,413,556
Operating income (loss) 208,121 304,330
Partnership's share of income 52,530 76,813
</TABLE>
(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, 1997 and 1996.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
At September 30, 1997, the Partnership had cash and cash
equivalents of $398,759 which are expected to be utilized for working
capital requirements and for future distributions to Partners. This
is $295,426 less than the $694,185 balance at December 31, 1996. The
decrease in cash equivalents is primarily due to larger operating
losses at the Vero Beach property. Cash flow from operations during
the nine months ended September 30, 1997 was $101,387 while cash flow
from operations duing the nine months ended September 30, 1996 was
$375,074.
In October 1997, subsequent to the end of the third quarter, the
Partnership completed a refinancing of the mortgage loan at the Vero
Beach property. The interest rate of the new first mortgage loan is
8.31% as compared to 9.0% on the old loan. The monthly payments on
the new first mortgage loan are $31,617 as compared to $40,250 for the
old loan. The amount of the new loan is $4,185,000 and the maturity
of the loan is October, 2027. In addition to the new first mortgage
loan, the Partnership arranged for mezzanine financing in the amount
of $365,000. The mezzanine financing provides for a floating rate of
interest equal to LIBOR plus 5%. Minimum monthly payments of
principal are due on the mezzanine financing which will retire the
loan in 60 months. The total of the new first mortgage loan and the
mezzanine financing was sufficient to payoff the existing indebtedness
and pay the costs of obtaining the new financing, except for about
$25,000 of loan fees which was paid from Partnership cash reserves.
There is no anticipated change in the cash flows from the Vero Beach
property as a result of the refinancing.
The Partnership has maintained its current level of distribution
to Limited Partners. During the nine months ended September 30, 1997,
the Partnership distributed $114,742 ($5.61 per unit) to Limited
Partners as compared to $115,235 ( $5.63 per unit) during the nine
months ended September 30, 1996.
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. The
partnership anticipates that cash flow from operations will be
sufficient to meet its obligations. However, to the extent 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.
Results of Operations
For the three and nine month periods ended September 30, 1997 and
September 30, 1996 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.
<PAGE>
The $73,631 (8%) and the $23,131 (8%) decrease in rental income
for the nine month and three month periods ended September 30, 1997,
respectively, as compared to the nine and three month periods ended
September 30, 1996 is primarily attributed to increased vacancy at the
Vero Beach property. In addition to Walgreens, which vacated in early
1996, several small tenant spaces became vacant at the end of 1996.
Management has successfully found a replacement tenant for the
Walgreen's space. Beall's Outlet occupied 12,000 square feet in March
1997, under a five year lease, raising occupancy to 93%. Sunshine
Furniture moved into 5,960 square feet in July 1997, under a three
year lease. This increased occupancy to 97%. Both the Beall's Outlet
lease and the Sunshine Furniture lease conained provisions which
waived base rent during the first few months of the leases. This
resulted in rental income being lower than the prior year while
occupancy was higher. Rental income in the fourth quarter of 1997 and
in 1998 are expected to return to 1996 levels.
The $13,080 (16%) and the $5,800 (22%) increase in tenant charges
income for the nine and three month period endeds September 30, 1997,
respectively, as compared to the nine and three month periods ended
September 30, 1996 is attributable to an increase in operating
expenses which are reimbursed by the tenants and by an increase in
occupancy resulting from the Beall's lease in July 1997.
The $4,895 (2%) increase in property operating expense for the
nine month period ended September 30, 1997 as compared to the nine
month period ended September 30, 1996 is primarily attributable to an
increase in building maintenance and repairs at Indian River Plaza.
The $21,009 (3%) and the $6,451 (3%) decrease in interest expense
for the nine and three month periods ended September 30, 1997,
respectively, as compared to the nine and three month periods ended
September 30, 1996 is primarily attributable to reductions in the
outstanding balance of the mortgage indebtedness.
The Partnership's allocation of income from unconsolidated
ventures decreased $24,283 from $76,813 during the nine month period
ended September 30, 1996 to $52,530 during the nine month period ended
September 30, 1997, as a result of a decrease in operating income at
Sycamore Mall. This decrease in operating income is attributable to
increased vacancy at Sycamore Mall. Management is currently
attempting to find replacement tenants.
<PAGE>
OCCUPANCY
The following is a list of approximate occupancy levels by
quarter for the Partnership's investment properties:
<TABLE>
<CAPTION>
at at at at at at at
03/31/96 06/30/96 09/30/96 12/31/96 03/31/97 06/30/97 09/30/97
<S> <C> <C> <C> <C> <C> <C> <C>
Indian River Plaza
Vero Beach, FL 98% 89% 89% 89% 93% 93% 97%
Downers Grove Building
Downers Grove, IL 100% 100% 100% 100% 100% 100% 100%
Sycamore Mall
Iowa City, Iowa 95% 86% 87% 87% 88% 89% 89%
</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 Registrant 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, 1997 By: /s/ Robert S. Ross
President
(Principal Executive Officer)
November 14, 1997 By: /s/ Bruce H. Block
Vice President
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Sep-30-1997
<PERIOD-TYPE> 9-MOS
<CASH> 398,759
<SECURITIES> 0
<RECEIVABLES> 1,257,478
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,668,044
<PP&E> 17,911,560
<DEPRECIATION> 5,676,133
<TOTAL-ASSETS> 15,597,689
<CURRENT-LIABILITIES> 5,328,231
<BONDS> 3,878,675
0
0
<COMMON> 0
<OTHER-SE> 5,153,114
<TOTAL-LIABILITY-AND-EQUITY> 15,597,689
<SALES> 893,883
<TOTAL-REVENUES> 962,173
<CGS> 0
<TOTAL-COSTS> 221,960
<OTHER-EXPENSES> 481,732
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 597,161
<INCOME-PRETAX> (264,554)
<INCOME-TAX> 0
<INCOME-CONTINUING> (264,554)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (264,554)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
