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, 1999
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, 1999: 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, 1999 and December 31, 1998
(Unaudited)
Assets
<CAPTION>
September 30, December 31,
1999 1998
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) 220,976 298,500
Rents and other receivables 415,013 371,630
Due from affiliates 8,025 6,934
Prepaid expense - 8,767
Total current assets 644,014 685,831
Investment property, at cost (note 1):
Land 2,233,114 2,233,114
Building 15,375,453 15,375,453
17,608,567 17,608,567
Less accumulated depreciation (6,672,994) (6,296,327)
Total properties held for investment 10,935,573 11,312,240
Investment in unconsolidated venture, at equity 469,482 529,400
Deferred rents receivable 1,000,307 1,211,836
Deferred loan costs 216,936 221,152
Total assets 13,266,312 13,960,459
<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, 1999 and December 31, 1998
(Unaudited)
Liabilities and Partners' Capital Accounts
<CAPTION>
September 30, December 31,
1999 1998
<S> <C> <C>
Current liabilities:
Accounts payable and accrued expenses 205,156 228,452
Due to affiliates (note 3) 303,871 306,643
Accrued interest 48,183 49,216
Current portion of long-term debt 370,666 353,857
Total current liabilities 927,876 938,168
Long-term debt 7,649,269 7,928,552
Venture partners' equity in
consolidated venture (note 2) 1,065,701 1,176,676
Deposits 17,767 17,767
Total long-term liabilities 8,732,737 9,122,995
Total liabilities 9,660,613 10,061,163
Partners' capital accounts (deficits) (note 1):
General partners:
Cumulative net income (18,433) (15,497)
(18,433) (15,497)
Limited partners:
Capital contributions 8,800,461 8,800,461
Cumulative net income (1,817,425) (1,526,764)
Cumulative cash distributions (3,358,904) (3,358,904)
3,624,132 3,914,793
Total partners' capital accounts 3,605,699 3,899,296
Commitments and contingencies (note 2)
Total Liabilities and Partners' Capital 13,266,312 13,960,459
<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, 1999 and 1998
(Unaudited)
<CAPTION>
1999 1998
<S> <C> <C>
Revenues:
Rental income 289,811 292,852
Tenant charges 20,826 31,000
Interest income 1,510 13,455
Total revenues 312,147 337,307
Expenses:
Property operating expenses 52,645 55,265
Interest 181,397 184,587
Depreciation 122,984 70,187
Amortization 3,655 3,655
General and administrative expenses 20,646 11,369
Total expenses 381,327 325,063
Operating loss (69,180) 12,244
Partnership's share of operations
of unconsolidated ventures (26,937) (2,195)
Venture partner's share of consolidated
venture's operations (note 1) 4,503 (24,248)
Net income (loss) (91,614) (14,199)
Net (loss) per limited partnership unit (4.43) (0.69)
Cash distribution per limited partnership unit - 1.86
<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, 1999 and 1998
(Unaudited)
<CAPTION>
1999 1998
<S> <C> <C>
Revenues:
Rental income 871,538 877,733
Tenant charges 62,160 93,000
Interest income 25,711 41,073
Total revenues 959,409 1,011,806
Expenses:
Property operating expenses 192,745 189,671
Interest 542,839 559,700
Depreciation 376,667 210,561
Amortization 10,966 10,965
General and administrative expenses 78,513 90,641
Total expenses 1,201,730 1,061,358
Operating loss (242,321) (49,552)
Partnership's share of operations
of unconsolidated ventures (59,918) 8,560
Venture partner's share of consolidated
venture's operations (note 1) 8,642 (52,838)
Net income (loss) (293,597) (93,830)
Net (loss) per limited partnership unit (14.20) (4.54)
Cash distribution per limited partnership unit - 5.61
<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, 1999 and 1998
(Unaudited)
<CAPTION>
1999 1998
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) (293,597) (93,830)
Items not requiring (providing) cash
or cash equivalents:
Depreciation 376,667 210,561
Amortization 10,966 10,965
Partnership's share of operations of
unconsolidated venture 59,918 92,885
Venture partners' share of consolidated
venture's operations (110,975) 30,088
Changes in:
Rents and other receivables (43,383) (116,796)
Prepaid expenses 8,767 7,324
Deferred rents receivable 211,529 169,353
Accounts payable and accrued expenses (24,329) (21,971)
Due to affiliates (3,863) 82,738
Tenant deposits - 3,336
Net cash provided by operating activities 191,700 374,653
Cash flows from financing activities:
Distributions to limited partners 0 (114,742)
Payment of deferred loan costs (6,750) 0
Principal payments on long-term debt (262,474) (283,151)
Net cash used in financing activities (269,224) (397,893)
Net (decrease) in cash and cash equivalents (77,524) (23,240)
<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, 1999 and 1998
(Unaudited)
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1998,
which are included in the Partnership's 1998` 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, 1999 and
September 30, 1998, 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 adopted Statement of Financial Accounting Standards
No. 121 ("SFAS 121") "Accounting for the Impairment of Long-Lived Assets
and for Long Lived Assets to be Disposed Of", on January 1, 1996. SFAS 121
requires that the Partnership record an impairment loss on its property held
for investment whenever the property's carrying value cannot be fully
recovered through estimated undiscounted cash flows from its operations and
sale. The amount of the impairment loss to be recognized would be the
difference between the property's carrying value and the property's
estimated fair value. In addition, SFAS 121 provides that a property not be
depreciated while being held for sale. As of October 1, 1997, the Downers
Grove property was considered to be held for sale. In accordance with SFAS
121, no depreciation expense relative to the property was recorded by the
Partnership from October 1, 1997 through September 30, 1998. However, the
property had not been sold as of September 30, 1998 and no active marketing
is currently taking place. Therefore, the Partnership resumed depreciation
as of October 1, 1998 and recorded an adjustment for the one year of
depreciation, in the fourth quarter of 1998, which had been deferred.
<PAGE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
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, 1999 and 1998 is summarized as follows:
<TABLE>
<CAPTION>
1999 1999 1998 1998
GAAP Tax GAAP Tax
Basis Basis Basis Basis
<S> <C> <C> <C> <C>
Net income (loss) (293,597) (220,000) (93,830) (126,500)
Net income (loss) per
limited partnership unit (14.20) (10.64) (4.54) (6.12)
</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 ($8,907 and $18,810 at June 30, 1999 and December 31, 1998,
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.
<PAGE>
FIRST DEARBORN INCOME PROPERTIES L.P.
(a limited partnership)
and Consolidated Ventures
Notes to Consolidated Financial Statements - Continued
(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, 1999. 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, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
Unpaid at
Sept 30,
1999 1998 1999
<S> <C> <C> <C>
Non-accountable expense reimbursement 0 19,191 303,871
Reimbursement (at cost) for
administrative services 850 13,500 0
850 32,691 303,871
</TABLE>
(4) Unconsolidated Ventures - Summary Information
Summary income statement information for Sycamore Mall Associates for
the nine months ended September 30, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Total revenue 854,792 1,225,025
Operating income (loss) (237,768) 33,968
Partnership's share of income (59,918) 8,560
</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, 1999 and 1998.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
At September 30, 1999, the Partnership had cash and cash equivalents of
$220,976 which will be utilized for working capital requirements. This is
$77,524 less than the $298,500 balance at December 31, 1998. Net cash
provided by operations was $23,915 during the nine months ended September 30,
1999, as compared to $142,927 during the nine months ended September 30,
1998. Continued problems at the Sycamore Mall property is the primary
reasons for the decrease. Continued vacancies are resulting in problems with
this property meeting its obligations. Leasing efforts have been
unsuccessful and the Partnership is currently evaluating its options as it
relates to this property.
The Partnership has suspended making cash distributions to Limited
Partners. During the three and nine months ended September 30, 1998, the
Partnership distributed $38,232 ($1.86 per unit) and $114,742 ($5.61 per
unit), respectively, to Limited Partners. No distributions have been made
in 1999.
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.
Year 2000:
The General Partner has determined that it does not expect that the
consequences of the Partnership's year 2000 issues will have a material
effect on the Partnership's business, results of operations or financial
condition.
Results of Operations
For the three and nine months ended September 30, 1999 and September
30, 1998 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 $30,840 (33%) decrease in tenant charges income for nine months
ended September 30, 1999 as compared to the nine months ended September 30,
1998 is attributable to a decrease in the accrual of income from K-Mart, a
tenant at the Vero Beach property. K-Mart is disputing the calculation for
tenant charges.
<PAGE>
The $15,362 (37%) decrease in interest income for nine months ended
September 30, 1999 as compared to the nine months ended September 30, 1998
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 $3,074 (2%) increase in property operating for nine months ended
September 30, 1999 as compared to the nine months ended September 30, 1998
is primarily attributable to an increase in building maintenance and repairs
at Indian River Plaza.
The $16,861 (3%) decrease in interest expense for nine months ended
September 30, 1999 as compared to the nine months ended September 30, 1998
is primarily attributable to reductions in the outstanding balance of the
mortgage indebtedness.
Depreciation expense increased $166,106 (79%) from $210,561 during the
nine months ended September 30, 1998 to $376,667 during the nine months
ended September 30, 1999. As of October 1, 1997 the Partnership determined
to begin marketed for sale its Downers Grove property. In accordance with
SFAS 121 no depreciation expense relative to the property was recorded by
the Partnership since October 1, 1997. However, the property had not been
sold as of September 30, 1998 and no active marketing is currently taking
place. Therfore depreciation has been resumed.
The $12,128 (27%) decrease in general and administrative expense for
nine months ended September 30, 1999 as compared to the nine months ended
September 30, 1998 is primarily attributable to a decrease in administrative
overhead charged from the General Partner.
The Partnership's allocation of income from unconsolidated ventures
decreased $68,478 from income of $8,560 during the nine months ended
September 30, 1998 to a loss of $59,918 during nine months ended September
30, 1999, as a result of increased vacancy at Sycamore Mall. Occupancy at
June 30, 1998 was 79% as compared to 44% as of September 30, 1999.
<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
03/31/98 06/30/98 09/30/98 12/31/98 03/31/99 06/30/99 09/30/99
<S> <C> <C> <C> <C> <C> <C> <C>
Indian River Plaza
Vero Beach, FL 97% 97% 97% 98% 98% 99% 100%
Downers Grove Building
Downers Grove, IL 100% 100% 100% 100% 100% 100% 100%
Sycamore Mall
Iowa City, Iowa 85% 79% 84% 47% 47% 44% 44%
</TABLE>
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 15, 1999 By: /s/ Robert S. Ross
President
(Principal Executive Officer)
November 15, 1999 By: /s/ Bruce H. Block
Vice President
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-01-1999
<PERIOD-END> Sep-30-1999
<PERIOD-TYPE> 9-mos
<CASH> 220,976
<SECURITIES> 0
<RECEIVABLES> 415,013
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 644,014
<PP&E> 17,608,567
<DEPRECIATION> 6,672,994
<TOTAL-ASSETS> 13,266,312
<CURRENT-LIABILITIES> 927,876
<BONDS> 7,649,269
0
0
<COMMON> 0
<OTHER-SE> 3,605,699
<TOTAL-LIABILITY-AND-EQUITY> 13,266,312
<SALES> 933,698
<TOTAL-REVENUES> 959,409
<CGS> 0
<TOTAL-COSTS> 192,745
<OTHER-EXPENSES> 466,146
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 542,839
<INCOME-PRETAX> (293,597)
<INCOME-TAX> 0
<INCOME-CONTINUING> (293,597)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (293,597)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
