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 June 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 June 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
June 30, 1997 and December 31, 1996
(Unaudited)
Assets
<CAPTION>
June 30, December 31,
1997 1996
<S>
<C> <C>
Current assets:
Cash and cash equivalents (note 1) 424,918
694,185
Rents and other receivables 1,252,052
1,167,408
Due from affiliates 3,482
2,215
Prepaid expense 825
9,307
Total current assets 1,681,277
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 (5,552,293) (5,304,609)
12,359.26712,597,716
Investment in unconsolidated venture, at equity (note 2) 871.548
908,649
Deferred rents receivable 761.108 855,090
Deferred loan costs 73,579 82,777
Total assets $15,746,779 16,317,347
<FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Balance Sheets
June 30, 1997 and December 31, 1996
(Unaudited)
Liabilities and Partners' Capital Accounts
<CAPTION>
June 30,December
31,
1997
1996
<S>
<C> <C>
Current liabilities:
Accounts payable and accrued expenses$ 207,171 215,158
Due to affiliates (note 3) 272,891 262,509
Accrued interest 65,238 67,128
Unearned revenue - 60,538
Current portion of long-term debt 4,790,500 4,787,641
Total current liabilities 5,335,800 5,392,974
Long-term debt 3,903,2144,101,986
Venture partners' equity in consolidated venture (note 2) 1,242,307
1,276,196
Deposits 12,307 12,471
Total long-term liabilities 5,157,828 5,390,653
Total liabilities 10,493,628 10,588,326
Partners' capital accounts (deficits) (note 1):
General partners:
Cumulative net income (5,370) (3,342)
(5,370)
(3,342)
Limited partners:
Capital contributions 8,800,461 8,800,461
Cumulative net income (394,537) (193,770)
Cumulative cash distributions (3,147,403) (3,070,939)
5,258,521 5,
535,752
Total partners' capital accounts 5,253,151 5,533,720
Commitments and contingencies (note 2)
Total Liabilities and Partners' Capital$15,746,779 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 June 30, 1997 and 1996
(Unaudited)
<CAPTION>
1997
1996
<S>
<C> <C>
Revenues:
Rental income $ 279,187 295,186
Tenant charges 35,502 31,402
Interest income 27,823 22,785
Total revenues 342,512 349,373
Expenses:
Property operating expenses 67,681 74,277
Interest 198,629 206,224
Depreciation 123,842 139,887
Amortization 4,599 8,286
General and administrative expenses 31,878 61,019
Total expenses 426,629 489,693
Operating loss (84,117)(140,320)
Partnership's share of operations
of unconsolidated ventures 6,950 25,829
Venture partner's share of consolidated
venture's operations (note 1) 1,438 12,951
Net income (loss) $ (75,729) (101,540)
Net income (loss) per limited partnership unit (note 1) $ (3.66)
(4.92)
Cash distribution per limited partnership unit $ 1.86
1.88
<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
Six months ended June 30, 1997 and 1996
(Unaudited)
<CAPTION>
1997
1996
<S>
<C> <C>
Revenues:
Rental income $ 534,391 584,891
Tenant charges
63,150 55,870
Interest income
48,124 45,033
Total revenues
645,665 685,794
Expenses:
Property operating expenses 150,234
149,216
Interest
399,223 413,781
Depreciation
247,684 261,670
Amortization
9,198 16,571
General and administrative expenses 81,236
91,071
Total expenses
887,575 932,309
Operating loss (241,910)
(246,515)
Partnership's share of operations
of unconsolidated ventures 24,726
50,914
Venture partner's share of consolidated
venture's operations (note 1)
14,389 23,576
Net income (loss) $ (202,795) (1
72,025)
Net income (loss) per limited partnership unit
(note 1) $ (9.81)
(8.32)
Cash distribution per limited partnership unit$ 3.74
3.77
<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
Six months ended June 30, 1997 and 1996
(Unaudited)
<CAPTION>
1997
1996
<S>
<C> <C>
Cash flows from operating activities:
Net income (loss) (202,795) (172,025)
Items not requiring (providing) cash or cash equivalents:
Depreciation 247,684 261,670
Amortization 9,198 16,571
Partnership's share of operations of
unconsolidated venture - net of distributions
37,101 (21,894)
Venture partners' share of consolidated venture's operations
(33,889) (23,576)
Changes in:
Rents and other receivables (84,644) 231,310
Prepaid expenses 8,482 9,007
Deferred rents receivable 93,982 93,998
Accounts payable and accrued expenses (9,877) (46,111)
Unearned revenue (60,538) -
Due to affiliates 9,115 13,682
Tenant deposits (164) (15,217)
Net cash provided by (used in) operating activities 13,655 347,415
Additions to building: (9,235) (20,365)
Cash flows from financing activities:
Distributions to limited partners (76,464) (76,958)
Payment of deferred loan costs 0 0
Principal payments on long-term debt (195,913) (56,056)
Net cash used in financing activities (272,377) (133,014)
Net increase (decrease) in cash and cash equivalents $ (269,267)
194,036
<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
June 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 six month periods ended June 30, 1997 and June
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 six months ended June 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 income (loss) $(202,795) (137,500)(172,025) (96,500)
Net income (loss) per limited partnership unit$ (9.81)(6.65) (8.32)
(4.67)
</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
($321,158 and $291,741 at June 30, 1996 and December 31, 1996,
respectively) as cash equivalents.
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 June 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 six months
ended June 30, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
Unpaid at
June 30,
1997 1996 1997
<S>
<C> <C> <C>
Non-accountable expense reimbursement
12,795 12,795 241,319
Reimbursement (at cost) for administrative services
8,500 8,500 8,932
$21,295 21,295 250,251
</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 six months ended June 30, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
1997 1996
<S>
<C> <C>
Total revenue
$ 922,410 964,592
Operating income (loss)
$ 97,962 201,801
Partnership's share of income
$ 24,726 50,914
</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 June 30, 1997 and 1996.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
At June 30, 1997, the Partnership had cash and cash equivalents of
$424,918 which will be utilized for working capital requirements and
for future distributions to Partners. This is $269,267 less than the
$694,185 balance at December 31, 1996. The decrease is primarily due
larger operating losses at the Vero Beach Property, resulted in a
$13,655 cash flow from operations during the six months ended June 30,
1997, as compared to a positive cash flow of $347,415 during the six
months ended June 30, 1996. Increased vacancy has created the larger
operating losses.
The Partnership has received a commitment for the refinancing of
the mortgage loan at the Vero Beach property. The interest rate and
monthly payments of the new loan will be similar to that of the
existing loan, which expired July 1, 1997. The amount of the new loan
is expected to be sufficient to payoff the existing indebtedness and
pay most of the costs of obtaining the new financing. There is no
anticipated change in the cash flows from the Vero Beach property as a
result of the refinancing. However the maturity of the new loan is
expected to be 30 years, in 2027. There can be no assurances that the
new loan will be funded, and if it is not, the Partnership could end
up in default of the terms of the existing indebtedness.
The Partnership has maintained its current level of distribution
to Limited Partners. During the six months ended June 30, 1997, the
Partnership distributed $76,464 ($3.74 per unit) to Limited Partners
as compared to $76,958 ( $3.77 per unit) during the six months ended
June 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. 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.
Results of Operations
For the three and six month periods ended June 30, 1997 and June
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 $50,500 (9%) decrease in rental income for the six month
period ended June 30, 1997 as compared to the six month period ended
June 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, raising occupancy to 93%. Leasing efforts are underway for the
remainder of the vacant space.
The $7,280 (13%) increase in tenant charges income for the six
months ended June 30, 1997 as compared to the six month period ended
June 30, 1996 is attributable to an increase in operating expenses
which are reimbursed by the tenants.
The $3,091 (7%) decrease in interest income for the six months
ended June 30, 1997 as compared to the six month period ended June 30,
1996 is attributable to the interest earned on the annuities purchased
in connection with the lease buy out in 1994 at the Downers Grove
property. As payments have been made from the annuities, there is a
reducing amount remaining upon which interest is earned.
The $14,558 (4%) decrease in interest expense for the six months
ended June 30, 1997 as compared to the six months ended June 30, 1996
is primarily attributable to reductions in the outstanding balance of
the mortgage indebtedness.
The $9,835 (11%) decrease in general and administrative expense
for the six months ended June 30, 1997 as compared to the six months
ended June 30, 1996 is primarily attributable to a reduction in
professional fees for the annual audit and tax return preparation.
The Partnership's allocation of income from unconsolidated
ventures decreased $26,188 from $50,914 during the six months ended
June 30, 1996 to $24,726 during the six months ended June 30, 1997, as
a result of increased vacancy at Sycamore Mall. Occupancy at June 30,
1997 was 88% as compared to 95% as of March 31, 1996.
<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>
Indian River Plaza
Vero Beach, FL 98% 89% 89%
89% 93% 93%
Downers Grove Building
Downers Grove, IL 100% 100% 100% 100%
100% 100%
Sycamore Mall
Iowa City, Iowa 95% 86% 87%
87% 88% 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)
August 18, 1997 By: /s/ Robert S. Ross
President
(Principal Executive Officer)
August 18, 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> Jun-30-1997
<PERIOD-TYPE> 6-mos
<CASH> 424,918
<SECURITIES> 0
<RECEIVABLES> 1,252,052
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,681,277
<PP&E> 17,911,560
<DEPRECIATION> 5,552,293
<TOTAL-ASSETS> 15,746,779
<CURRENT-LIABILITIES> 5,335,800
<BONDS> 3,903,214
0
0
<COMMON> 0
<OTHER-SE> 5,253,151
<TOTAL-LIABILITY-AND-EQUITY> 15,746,779
<SALES> 597,541
<TOTAL-REVENUES> 645,665
<CGS> 0
<TOTAL-COSTS> 150,234
<OTHER-EXPENSES> 338,118
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 399,223
<INCOME-PRETAX> (202,795)
<INCOME-TAX> 0
<INCOME-CONTINUING> (202,795)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (202,795)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
