<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1996
------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________________
Commission file number 0-16859
-------
NYLIFE Realty Income Partners I, L.P.
-------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3410538
-------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
51 Madison Avenue, New York, New York 10010
------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 576-6456
--------------
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
--- ---
<PAGE>
NYLIFE Realty Income Partners I, L.P.
(In The Process of Liquidation)
September 30, 1996
INDEX
-----
PAGE NO.
--------
Part I - Financial Information (Unaudited)
Item 1. Financial Statements
Statement of Net Assets as of September 30, 1996 3
Balance Sheet as of December 31, 1995 4
Statement of Changes in Net Assets For the Period from
July 1, 1996 through September 30, 1996 5
Statements of Operations for the Six Months Ended
June 30, 1996 and For the Three and Nine Months Ended
September 30, 1995 6
Statements of Partners' Capital (Deficit) for the Six Months
Ended June 30, 1996 and For the Year Ended December 31, 1995 7
Statements of Cash Flows For the Six Months Ended June 30,
1996 and For the Nine Months Ended September 30, 1995 8
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
Part II - Other Information
Item 2. Changes in Securities 16
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 6. Exhibits and Reports on Form 10-K 16
Signatures 17
2
<PAGE>
NYLIFE Realty Income Partners I, L.P.
(In The Process of Liquidation)
Statement of Net Assets
as of September 30, 1996
(Unaudited)
ASSETS 1996
---------------
Cash and cash equivalents $ 799,430
Restricted cash 283,392
Due from affiliates 16,650
Investments in real estate joint ventures 12,009,890
--------------
Total assets $ 13,109,362
--------------
--------------
LIABILITIES
Accrued liabilities 153,461
--------------
Net assets $ 12,955,901
--------------
--------------
The accompanying Notes to Financial Statements are
an integral part of these statements.
3
<PAGE>
NYLIFE Realty Income Partners I, L.P.
(a limited partnership)
Balance Sheet
December 31, 1995
ASSETS
Cash and cash equivalents $ 688,977
Restricted cash 283,392
Investments in real estate joint ventures 13,590,960
Other assets - net 2,472
---------------
Total assets $ 14,565,801
---------------
---------------
LIABILITIES AND PARTNERS' CAPITAL
Accrued liabilities $ 94,058
---------------
Total liabilities 94,058
---------------
Partners' capital
General Partners:
Capital contributions 2,000
Accumulated deficit (9,103)
Cumulative distributions (66,470)
---------------
(73,573)
---------------
Limited Partners:
Capital contributions
net of public offering expenses 25,032,724
Accumulated deficit (901,371)
Cumulative distributions (9,586,037)
---------------
14,545,316
---------------
Total partners' capital 14,471,743
---------------
Total liabilities and partners' capital $ 14,565,801
---------------
---------------
The accompanying Notes to Financial Statements are
an integral part of these statements.
4
<PAGE>
NYLIFE Realty Income Partners I, L.P.
(In The Process of Liquidation)
Statement of Changes in Net Assets
For the Period from July 1, 1996 through September 30, 1996
(Unaudited)
1996
---------------
Net assets at July 1, 1996 $ 12,715,713
Equity in income from joint venture operations 282,525
Interest income 11,328
General and administrative expenses (28,665)
General and administrative expenses-related party (25,000)
---------------
Net increase in net assets 240,188
---------------
Net assets at September 30, 1996 $ 12,955,901
---------------
---------------
The accompanying Notes to Financial Statements are
an integral part of these statements.
5
<PAGE>
NYLIFE Realty Income Partners I, L.P.
(In The Process of Liquidation)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months Three Months Nine Months
Ended Ended Ended
June 30, September 30, September 30,
INCOME 1996 1995 1995
---------------- ------------------- -------------------
<S> <C> <C> <C>
Equity in income from joint venture operations $ - $ 85,934 $ 262,982
Interest 24,269 9,816 50,912
---------------- ------------------- -------------------
Total income 24,269 95,750 313,894
---------------- ------------------- -------------------
EXPENSES
Equity in loss from joint venture operations 1,418,444 - -
General and administrative 25,600 35,325 82,795
General and administrative-related party 50,000 25,000 75,000
---------------- ------------------- -------------------
Total expenses 1,494,044 60,325 157,795
---------------- ------------------- -------------------
Net income (loss) $ (1,469,775) $ 35,425 $ 156,099
---------------- ------------------- -------------------
---------------- ------------------- -------------------
NET INCOME (LOSS) ALLOCATED
General Partners $ (14,698) $ 354 $ 1,561
Limited Partners (1,455,077) 35,071 154,538
---------------- ------------------- -------------------
$ (1,469,775) $ 35,425 $ 156,099
---------------- ------------------- -------------------
---------------- ------------------- -------------------
Net income (loss) per Unit $ (0.51) $ 0.01 $ 0.05
---------------- ------------------- -------------------
---------------- ------------------- -------------------
Number of Units 2,833,925.5 2,833,925.5 2,833,925.5
---------------- ------------------- -------------------
---------------- ------------------- -------------------
</TABLE>
The accompanying Notes to Financial Statements are
an integral part of these statements.
6
<PAGE>
NYLIFE Realty Income Partners I, L.P.
(In The Process of Liquidation)
Statements of Partners' Capital (Deficit)
for the Six Months Ended June 30, 1996 (Unaudited)
and for the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Total
Limited General Partners'
Partners Partners Capital
---------------- ------------------- -------------------
<S> <C> <C> <C>
Capital (deficit) at January 1, 1995 $ 18,970,789 $ (61,376) $ 18,909,413
Net income 155,625 1,572 157,197
Distributions to partners (4,581,098) (13,769) (4,594,867)
---------------- ------------------- -------------------
Capital (deficit) at December 31, 1995 14,545,316 (73,573) 14,471,743
Net (loss) (1,455,077) (14,698) (1,469,775)
Distributions to partners (283,392) (2,863) (286,255)
---------------- ------------------- -------------------
Capital (deficit) at June 30, 1996 $ 12,806,847 $ (91,134) $ 12,715,713
---------------- ------------------- -------------------
---------------- ------------------- -------------------
</TABLE>
The accompanying Notes to Financial Statements are
an integral part of these statements.
7
<PAGE>
NYLIFE Realty Income Partners I, L.P.
(In The Process of Liquidation)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Nine Months Ended
June 30, 1996 September 30, 1995
------------------- -------------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (1,469,775) $ 156,099
------------------- -------------------
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
Equity in (income) loss from joint venture operations 1,418,444 (262,982)
Cash distributions from joint ventures - 262,982
Amortization of interest and acquisition fees 12,544 -
Changes in assets and liabilities:
(Increase) in due from affiliates (50,450) (25,000)
Decrease in other assets 1,836 25,283
Increase (decrease) in accrued liabilities 15,328 (23,013)
------------------- -------------------
Total adjustments 1,397,702 (22,730)
------------------- -------------------
Net cash provided by (used in) operating activities (72,073) 133,369
------------------- -------------------
Cash flows from investing activities:
Cash distributions from joint ventures in excess of earnings
(return of capital) 258,799 3,645,248
------------------- -------------------
Cash flows from financing activities:
Distributions to partners (286,255) (4,308,612)
------------------- -------------------
Net (decrease) in cash and cash equivalents (99,529) (529,995)
Cash and cash equivalents at beginning of period 688,977 1,646,068
------------------- -------------------
Cash and cash equivalents at end of period $ 589,448 $ 1,116,073
------------------- -------------------
------------------- -------------------
</TABLE>
The accompanying Notes to Financial Statements are
an integral part of these statements.
8
<PAGE>
NYLIFE REALTY INCOME PARTNERS I, L.P.
(IN THE PROCESS OF LIQUIDATION)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
As discussed in further detail in Note 2, on July 1, 1996, the limited partners
of the Partnership approved the dissolution of the Partnership. As a result,
the Partnership has changed its basis of accounting for the period subsequent to
June 30, 1996, from the historical cost basis to the liquidation basis. Under
the liquidation basis of accounting, the Partnership's assets at September 30,
1996 are reported at estimated net realizable value, and the Partnership's
liabilities are presented at estimated settlement amounts.
Investments in real estate Joint Ventures at September 30, 1996 are recorded at
fair value based on appraisals performed on the Joint Venture Properties, less
estimated costs to sell, as of December 15, 1995 for Cornell and NewMarket and
December 31, 1995 for Eden Woods. Management believes that no material changes
to the fair market value of the Joint Venture Properties have occurred between
the appraisal dates and September 30, 1996. For all other assets and
liabilities presented on the liquidation basis of accounting, the General
Partner believes that historical cost approximates fair market value. The net
effect of the revaluation of the Partnership's assets and liabilities due to the
adoption of the liquidation basis of accounting was a downward adjustment of
$1,469,124, to the Partnership's investments in real estate joint ventures.
This amount was reported on the statements of operations for the six months
ended June 30, 1996 and included in equity in loss from Joint Venture
operations (Note 4).
The accompanying statements of operations, partners' capital and cash flows for
the 1996 reporting period were prepared using the historical cost basis of
accounting for the first six months of the year since the liquidation basis of
accounting was adopted effective June 30, 1996. For the 1995 reporting periods,
such statements have been presented on a historical cost basis for the three and
nine months ended September 30, 1995. The balance sheet at December 31, 1995
was also prepared using the historical cost basis.
The accompanying financial statements include the accounts of the Partnership
including its investments in NYLIFE Realty Partners I - General Partnership A
(Cornell), General Partnership C (Eden Woods), and General Partnership D
(NewMarket) (collectively, the "Joint Ventures") to which the equity method of
accounting has been applied.
The summarized financial information contained herein is unaudited, however, in
the opinion of management, all adjustments (which include normal recurring
adjustments) necessary for a fair presentation of financial information have
been included. The accompanying financial statements and related notes should be
read in conjunction with the Partnership's 1995 Annual Report on Form 10-K/A-1.
Capitalized terms used in these Notes to Financial Statements, unless otherwise
defined herein, shall have the meanings set forth in the Partnership Agreement.
9
<PAGE>
NOTE 2 - LIQUIDATION
Two class action lawsuits were filed against the Co-Venturer and certain other
affiliates of the General Partners in the District Court of Harris County, Texas
on January 11, 1996, styled Grimshawe v. New York Life Insurance Co., et al.
(No. 96-001188) and Shea v. New York Life Insurance Co., et al. (No. 96-001189)
alleging misconduct in connection without the original sale of investment units
in various partnerships, including violation of various federal and state laws
and regulations and claims of continuing fraudulent conduct. The plaintiffs
asked for compensatory damages for their lost original investment, plus
interest, costs (including attorneys fees), punitive damages, disgorgement of
any earnings, compensation and benefits received by the defendants as a result
of the alleged actions and other unspecified relief to which plaintiffs might
have been entitled. These suits were amended and refiled in a consolidated
action in the United States District Court for the Southern District of Florida
(the "Court") on March 18, 1996. In the federal action, the plaintiffs added
NYLIFE Realty as a defendant and included allegations concerning the
Partnership. The plaintiffs purported to represent a class of all persons (the
"Class") who purchased or otherwise assumed rights and title to interests in
certain limited partnerships, including the Partnership, and other programs
created, sponsored, marketed, sold, operated or managed by the defendants (the
"Proprietary Partnerships"). The Partnership is not a defendant in the
litigation.
The defendants expressly denied any wrongdoing alleged in the complaint and
concede no liability or wrongdoing in connection with the sale of the Units or
the structure of the Proprietary Partnerships. Nevertheless, to reduce the
burden of protracted litigation, the defendants entered into a Stipulation of
Settlement ("Settlement Agreement") with the plaintiffs because in their opinion
such Settlement would (i) provide substantial benefits to the Class in a manner
consistent with New York Life's position that it had previously determined to
wind up most of the Proprietary Partnerships, including the Partnership, through
orderly liquidation as the continuation of the business no longer serves the
intended objectives of either the owners of interests in such Proprietary
Partnerships or the defendants and to offer the investors an enhancement to the
liquidating distribution they would otherwise receive and (ii) provide an
opportunity to wind up such partnerships on a schedule favorable to the Class
and resolve the issues raised by the lawsuit.
In coordination with the proposed settlement, the General Partners solicited the
approval of the limited partners for the dissolution of the Partnership. On
July 1, 1996, the expiration date for the solicitation of such consents, the
limited partners of the Partnership approved the dissolution, and termination of
the Partnership. NYLIFE Realty Inc., as liquidator, has commenced the process
of winding up the Partnership.
Final approval of the Settlement Agreement was given by the Court on July 3,
1996. The Settlement Agreement became final on August 5, 1996, the date on
which the period for appeal of the Settlement Agreement expired. Cash
Payments (comprised of a Liquidation Advance and an Enhancement, as defined in
the Settlement Agreement) were made by NYLIFE Realty to settling limited
partners in August, September and November. Each settling limited partner
granted a security interest in favor of NYLIFE Realty in his units of limited
partnership interest and liquidating distributions up to the amount of the
settling limited partner's Liquidation Advance to
10
<PAGE>
secure repayment thereof. Accordingly, liquidating distributions for
settling limited partners will be first applied to repay the Liquidation
Advance and any remaining liquidating distributions will be made to the
partners.
Under the terms of the Settlement Agreement, each settling limited partner
received a complete return of his original investment, less distributions
received prior to the final settlement date. In exchange for the settlement
benefits the settling limited partners released any and all claims that the
settling limited partner may have had against the defendants in connection with
any and all causes of action related to the Proprietary Partnerships and all
activities related to the dissolution and liquidation of such partnerships.
NOTE 3 - ADOPTION OF NEW ACCOUNTING STANDARD
During the first quarter of 1996, the Partnership adopted Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed Of". In connection with
the adoption of the liquidation basis of accounting (Note 1), the underlying
Joint Venture Properties were written down to fair value less estimated costs to
sell and the Partnership recorded a downward adjustment of $1,469,124 which is
included in equity in loss from joint venture operations on the accompanying
statement of operations for the six months ended June 30, 1996.
NOTE 4 - INVESTMENT IN REAL ESTATE JOINT VENTURES
A summary of the financial information for the Joint Ventures as of
September 30, 1996 is presented below:
<TABLE>
<CAPTION>
BALANCE SHEETS Cornell Eden Woods NewMarket Total
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Land $ 1,027,580 $ 1,669,758 $ 1,619,290 $ 4,316,628
Building and improvements 9,351,928 10,196,725 9,139,411 28,688,064
Accumulated depreciation (3,456,645) (3,057,122) (3,124,496) (9,638,263)
Other assets 150,060 673,654 265,045 1,088,759
Accrued liabilities 153,128 211,453 174,175 538,756
Co-Venturer's equity 2,716,846 4,942,254 4,823,948 12,483,048
------------ ------------ ------------ ------------
Partnership's equity in Joint Ventures $ 4,202,949 $ 4,329,308 $ 2,901,127 $11,433,384
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Represented by:
Partnership's equity in Joint Ventures
at January 1, 1996 $ 4,905,324 $ 4,798,189 $ 3,887,447 $13,590,960
Joint Venture (loss) (451,676) (309,649) (374,593) (1,135,919)
Cash distributions (250,698) (19,243) (156,410) (426,851)
------------ ------------ ------------ ------------
Net equity investment 4,202,949 4,469,298 3,355,943 12,028,190
Interest - (72,377) (300,910) (373,287)
Acquisition fees - (73,656) (173,260) (246,916)
Accumulated amortization of interest
and acquisition fees - 10,396 33,301 43,697
------------ ------------ ------------ ------------
Partnership's equity in Joint Ventures
at September 30, 1996 $ 4,202,949 $ 4,329,308 $ 2,901,127 $11,433,384
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
11
<PAGE>
The following is a summary of the operations of Cornell, Eden Woods and
NewMarket for the nine months ended September 30, 1996:
<TABLE>
<CAPTION>
OPERATIONS Cornell Eden Woods NewMarket Total
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net operating income (loss) $ (82,157) $ (163,340) $ 166,571 $ (78,926)
Interest income 4,378 11,510 4,719 20,607
Effect of adoption of liquidation
basis of accounting (675,016) (506,157) (1,026,135) (2,207,308)
------------ ------------ ------------ ------------
Net (loss) $ (752,794) $ (657,987) $ (854,846) $(2,265,627)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net (loss) allocated:
To Co-Venturer $ (301,118) $ (348,338) $ (480,252) $(1,129,708)
To Partnership (451,676) (309,649) (374,954) (1,135,919)
------------ ------------ ------------ ------------
$ (752,794) $ (657,987) $ (854,846) $(2,265,627)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
NOTE 5 - TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES
The following is a summary of the amounts earned by the General Partners and
their Affiliates for the nine months ended September 30, 1996 and 1995 as
defined in the Partnership Agreement:
<TABLE>
<CAPTION>
Earned for the Earned for the
Unpaid at nine months ended nine months ended
September 30,1996 September 30, 1996 September 30, 1995
----------------- ------------------ ------------------
<S> <C> <C> <C>
Property management fees (1) $ - $103,995 $103,995
Reimbursement of general and administrative
expenses paid the General Partners 75,000 75,000 75,000
------- -------- --------
$75,000 $178,995 $178,995
------- -------- --------
------- -------- --------
</TABLE>
(1) Costs associated with property management fees are borne by the Joint
Ventures.
The above amounts are allocable to the General Partners and their Affiliates as
follows:
<TABLE>
<CAPTION>
Earned for the Earned for the
Unpaid at nine months ended nine months ended
September 30,1996 September 30, 1996 September 30, 1995
----------------- ------------------ ------------------
<S> <C> <C> <C>
NYLIFE Realty Inc. and Affiliates $75,000 $ 75,000 $ 75,000
Greystone Realty Corporation (2) - 103,995 103,995
------- -------- --------
$75,000 $178,995 $178,995
------- -------- --------
------- -------- --------
</TABLE>
(2) Under no circumstances will the amount charged to the Partnership in
respect of Greystone Realty Corporation ("Greystone"), an affiliate of New York
Life Insurance Company, exceed the limitations on payments to affiliates set
forth in the Partnership Agreement.
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDATION
Two class action lawsuits were filed against the Co-Venturer and certain other
affiliates of the General Partners in the District Court of Harris County, Texas
on January 11, 1996, styled Grimshawe v. New York Life Insurance Co., et al.
(No. 96-001188) and Shea v. New York Life Insurance Co., et al. (No. 96-001189)
alleging misconduct in connection without the original sale of investment units
in various partnerships, including violation of various federal and state laws
and regulations and claims of continuing fraudulent conduct. The plaintiffs
asked for compensatory damages for their lost original investment, plus
interest, costs (including attorneys fees), punitive damages, disgorgement of
any earnings, compensation and benefits received by the defendants as a result
of the alleged actions and other unspecified relief to which plaintiffs might
have been entitled. These suits were amended and refiled in a consolidated
action in the United States District Court for the Southern District of Florida
(the "Court") on March 18, 1996. In the federal action, the plaintiffs added
NYLIFE Realty as a defendant and included allegations concerning the
Partnership. The plaintiffs purported to represent a class of all persons (the
"Class") who purchased or otherwise assumed rights and title to interests in
certain limited partnerships, including the Partnership, and other programs
created, sponsored, marketed, sold, operated or managed by the defendants (the
"Proprietary Partnerships"). The Partnership is not a defendant in the
litigation.
The defendants expressly denied any wrongdoing alleged in the complaint and
concede no liability or wrongdoing in connection with the sale of the Units or
the structure of the Proprietary Partnerships. Nevertheless, to reduce the
burden of protracted litigation, the defendants entered into a Stipulation of
Settlement ("Settlement Agreement") with the plaintiffs because in their opinion
such Settlement would (i) provide substantial benefits to the Class in a manner
consistent with New York Life's position that it had previously determined to
wind up most of the Proprietary Partnerships, including the Partnership, through
orderly liquidation as the continuation of the business no longer serves the
intended objectives of either the owners of interests in such Proprietary
Partnerships or the defendants and to offer the investors an enhancement to the
liquidating distribution they would otherwise receive and (ii) provide an
opportunity to wind up such partnerships on a schedule favorable to the Class
and resolve the issues raised by the lawsuit.
In coordination with the proposed settlement, the General Partners solicited the
approval of the limited partners for the dissolution of the Partnership. On
July 1, 1996, the expiration date for the solicitation of such consents, the
limited partners of the Partnership approved the dissolution, and termination of
the Partnership. NYLIFE Realty Inc., as liquidator, has commenced the process
of winding up the Partnership.
Final approval of the Settlement Agreement was given by the Court on July 3,
1996. The Settlement Agreement became final on August 5, 1996, the date on
which the period for appeal of the Settlement Agreement expired. Cash
Payments (comprised of a Liquidation Advance and an Enhancement, as defined in
the Settlement Agreement) were made by NYLIFE Realty to settling limited
partners in August, September and November. Each settling limited partner
granted a security interest in favor of NYLIFE Realty in his units of limited
partnership interest and liquidating distributions up to the amount of the
settling limited partner's Liquidation Advance to
13
<PAGE>
secure repayment thereof. Accordingly, liquidating distributions for
settling limited partners will be first applied to repay the Liquidation
Advance and any remaining liquidating distributions will be made to the
partners.
Under the terms of the Settlement Agreement, each settling limited partner
received a complete return of his original investment, less distributions
received prior to the final settlement date. In exchange for the settlement
benefits the settling limited partners released any and all claims that the
settling limited partner may have had against the defendants in connection with
any and all causes of action related to the Proprietary Partnerships and all
activities related to the dissolution and liquidation of such partnerships.
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's cash balance of $799,430 at September 30,1996 includes
$153,461 to pay accrued liabilities, and cash generated from operations of the
Joint Ventures and distributed to the Partnership.
During the process of winding up and liquidating the Joint Ventures and the
Partnership, the Partnership will no longer pay any semi-annual distributions to
the partners. However, upon the sale of the Partnership's assets, payment of
the Partnership's liabilities and provision for contingent liabilities,
liquidating distributions will be paid to the partners. Liquidating
distributions paid to the settling limited partners will be subject to the terms
of the Settlement Agreement.
RESULTS OF OPERATIONS
As a result of the limited partners approval of the dissolution of the
Partnership, the Partnership has changed its basis of accounting for the period
subsequent to June 30, 1996, from the historical cost basis to the liquidation
basis. Under the liquidation basis of accounting, the Partnerships' assets at
September 30, 1996 are reported at estimated net realizable value, and the
Partnerships' liabilities are presented at estimated settlement amounts. The net
effect of the revaluation of the Partnership's assets and liabilities due to the
adoption of the liquidation basis of accounting was a downward adjustment in the
second quarter of $1,469,124, to the Partnership's investments in real estate
joint ventures. This amount is reported on the statement of operations for the
six months ended June 30, 1996 and included in equity in loss from Joint Venture
operations.
Under the liquidation basis of accounting, the Partnership's results of
operations for the three months ended September 30, 1996 are presented as a
component of the accompanying Statement of Changes in Net Assets.
The increase in the Partnership's net income for the three months ended
September 30, 1996 as compared to the corresponding period in 1995 resulted from
an increase in equity in income from Joint Venture operations. Higher income
from Joint Ventures was achieved because capital assets, having been written
down to their net realizable values in the second quarter, are no longer
depreciated by the Joint Ventures.
Cornell's net income increased by approximately $124,000 for the three months
ended September 30, 1996 compared to the corresponding 1995 period. The increase
in net income was
14
<PAGE>
due primarily to the discontinuation of depreciation expense which more than
offset an increase in real estate taxes.
Eden Woods' net income increased by approximately $166,000 for the three months
ended September 30, 1996 compared to the corresponding 1995 period. The
increase in net income was due primarily to the discontinuation of depreciation
expense.
NewMarkets' net income increased by approximately $100,000 for the three months
ended September 30,1996 compared to the corresponding 1995 period. The increase
in net income was due primarily to the discontinuation of depreciation expense.
Rental revenues decreased compared to the corresponding 1995 period due to a
decline in rental rates. The retail market in which NewMarket is located
continues to experience rapid development including the addition of new
superstores. This development has led to increased price competition in the
retail segment. Recognizing that high occupancy is vital to the success of the
mall, management has responded to this increased price competition by lowering
rental rates so existing tenants do not vacate.
Occupancy at Cornell, Eden Woods, and NewMarket was 88%, 87%, and 94%,
respectively, as of September 30, 1996, as compared to 97%, 98%, and 93%,
respectively, as of September 30, 1995.
15
<PAGE>
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
During the process of winding up and liquidating the Partnership, the
Partnership will no longer pay any semi-annual cash distributions to the
partners. However, upon the sale of the Partnership's assets, payment of the
Partnership's liabilities and provision for contingent liabilities, liquidating
distributions will be paid to the partners. Liquidating distributions paid to
the settling limited partners will be subject to the terms of the Settlement
Agreement.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Through a consent solicitation of limited partners that expired on
July 1, 1996, the limited partners of the Partnership approved the proposals to
dissolve and terminate the Partnership. The number of consents and abstentions
with respect to each of the proposals is set forth below:
Affirmative Withheld
Consents Consents Abstentions
Dissolution Proposal 2,218,726.978 44,834.587 25,991.438
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
None
(b) REPORTS ON FORM 8-K
None
16
<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 on November 12, 1996.
NYLIFE Realty Income Partners I, L.P.
By: NYLIFE Realty Inc.
General Partner
/s/ Kevin M. Micucci
---------------------------
By: Kevin M. Micucci
President
(Principal Executive, Financial
and Accounting Officer)
17
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<PAGE>
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<S> <C>
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<PERIOD-START> JAN-01-1996
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0
0
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</TABLE>
