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
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EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1996
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-16797
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IDS/BALCOR INCOME PARTNERS
A REAL ESTATE LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
Delaware 36-3497345
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road,
Bannockburn, Illinois 60015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
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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
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IDS/BALCOR INCOME PARTNERS
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
BALANCE SHEETS
March 31, 1996 and 1995
ASSETS
1996 1995
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Cash and cash equivalents $ 492,181 $ 397,080
Accounts and accrued interest receivable 54,314 50,812
Prepaid expenses 5,730 22,920
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552,225 470,812
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Investment in real estate:
Land 1,340,324 1,340,324
Buildings and improvements 13,681,315 13,681,315
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15,021,639 15,021,639
Less accumulated depreciation 5,521,281 5,365,734
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Investment in real estate, net of
accumulated depreciation 9,500,358 9,655,905
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$ 10,052,583 $ 10,126,717
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LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 6,627 $ 14,005
Due to affiliates 16,046 7,108
Accrued liabilities, principally
real estate taxes 156,029 124,823
Security deposits 49,924 48,224
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Total liabilities 228,626 194,160
Limited Partners' capital (73,994
Interests issued and outstanding) 9,802,556 9,913,215
General Partners' capital 21,401 19,342
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Total partners' capital 9,823,957 9,932,557
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$ 10,052,583 $ 10,126,717
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The accompanying notes are an integral part of the financial statements.
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IDS/BALCOR INCOME PARTNERS
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1996 and 1995
1996 1995
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Income:
Rental and service $ 690,292 $ 681,837
Interest on short-term investments 5,241 8,155
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Total income 695,533 689,992
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Expenses:
Depreciation 155,547 153,743
Property operating 198,743 172,576
Real estate taxes 56,533 63,140
Property management fees 34,221 33,762
Administrative 44,614 33,710
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Total expenses 489,658 456,931
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Net income $ 205,875 $ 233,061
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Net income allocated to General Partners $ 2,059 $ 2,331
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Net income allocated to Limited Partners $ 203,816 $ 230,730
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Net income per Limited Partnership Interest
(73,994 issued and outstanding) $ 2.75 $ 3.12
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Distribution to Limited Partners $ 314,475 $ 286,727
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Distribution per Limited
Partnership Interest $ 4.25 $ 3.88
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The accompanying notes are an integral part of the financial statements.
<PAGE>
IDS/BALCOR INCOME PARTNERS
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1996 and 1995
1996 1995
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Operating activities:
Net income $ 205,875 $ 233,061
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation of properties 155,547 153,743
Net change in:
Accounts and accrued interest
receivable (3,502) 14,493
Prepaid expenses 17,190
Accounts payable (7,378) (19,638)
Due to affiliates 8,938 8,517
Accrued liabilities 31,206 34,808
Security deposits 1,700 1,521
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Net cash provided by operating activities 409,576 426,505
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Financing activity:
Distribution to Limited Partners (314,475) (286,727)
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Cash used in financing activity (314,475) (286,727)
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Net change in cash and cash equivalents 95,101 139,778
Cash and cash equivalents at beginning
of period 397,080 539,880
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Cash and cash equivalents at end of period $ 492,181 $ 679,658
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The accompanying notes are an integral part of the financial statements.
<PAGE>
IDS/BALCOR INCOME PARTNERS
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the quarter ended March 31,
1996, and all such adjustments are of a normal and recurring nature.
2. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1996 are:
Paid Payable
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Reimbursement of expenses to
the Managing General Partner, at cost $11,344 $16,046
3. Subsequent Event:
In April 1996, the Partnership made a distribution of $295,976 ($4.00 per
Interest) to the holders of Limited Partnership Interests for the first quarter
of 1996.
<PAGE>
IDS/BALCOR INCOME PARTNERS
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
IDS/Balcor Income Partners (the "Partnership") was formed in 1987 to invest in
and operate income-producing real property. The Partnership raised $18,498,500
through the sale of Limited Partnership Interests and utilized the net proceeds
to acquire the Post Place and Salem Courthouse apartment complexes. The
Partnership continues to operate these two properties.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and management's discussion and analysis
contained in the annual report for 1995 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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The Partnership recognized a decrease in net income for the quarter ended March
31, 1996 as compared to the same period in 1995 due primarily to a decrease in
property operations at the Salem Courthouse Apartments and increased
administrative expenses related to the 1995 tender offer. Further discussion of
the Partnership's operations is summarized below.
1996 Compared to 1995
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Discussions of fluctuations between 1996 and 1995 refer to the quarters ended
March 31, 1996 and 1995.
Due to lower average cash balances, as well as lower interest rates, interest
income on short-term investments decreased during 1996 as compared to 1995.
Property operating expense increased in 1996 as compared to 1995 primarily due
to increased payroll expenses at Salem Courthouse Apartments.
Real estate taxes decreased in 1996 as compared to 1995 primarily due to a
lower tax rate at the Salem Courthouse Apartments.
The Partnership incurred higher portfolio management and legal fees in
connection with a tender offer received during the fourth quarter of 1995. As a
result, administrative expenses increased during 1996 as compared to 1995.
<PAGE>
Liquidity and Capital Resources
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The cash position of the Partnership increased by approximately $95,000 as of
March 31, 1996 when compared to December 31, 1995. The Partnership's operating
activities consisted of approximately $409,000 of cash flow generated from
property operations, net of administrative expenses. Cash flow of approximately
$314,000 was used to fund financing activities which consisted of the quarterly
distribution to Limited Partners.
The Salem Courthouse and Post Place apartment complexes generated positive cash
flow during 1996 and 1995. The Partnership defines cash flow generated from its
properties as an amount equal to the property's revenue receipts less property
related expenditures. As of March 31, 1996, the occupancy rates of the Salem
Courthouse and Post Place apartment complexes were 86% and 97%, respectively.
The General Partners believe that the market for multifamily housing properties
has become increasingly favorable to sellers of these properties. Currently,
the Partnership has entered into a contract to sell Post Place Apartments for a
sales price of $7,900,000 and is preparing to market the Salem Courthouse
Apartments for sale. If current market conditions remain favorable and the
General Partners can obtain an appropriate sales price, the Partnership's
liquidation strategy may be accelerated.
In April 1996, the Partnership made a distribution of $295,976 ($4.00 per
Interest) to the holders of Limited Partnership Interests for the first quarter
of 1996. The quarterly distribution level decreased compared to the fourth
quarter of 1995 due to a decrease in cash flow at Salem Courthouse Apartments.
Including the April 1996 distribution, investors have received distributions of
Net Cash Receipts of $116 per $250 Interest, as well as certain tax benefits.
The General Partners anticipate that the cash flow from property operations
should enable the Partnership to continue making quarterly distributions to
Limited Partners at the current level during 1996 although there can be no
assurances in this regard.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
IDS/BALCOR INCOME PARTNERS
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits:
(4) Form of Subscription Agreement set forth as Exhibit 4.1 to the Registrant's
Registration Statement on Form S-11 dated July 2, 1987 (Registration
No. 33-12617) and Form of Confirmation regarding Interests in the Registrant
set forth as Exhibit 4.2 to the Registrant's Report on Form 10-Q for the
quarter ended June 30, 1992 (Commission File No. 0-16797) are hereby
incorporated herein by reference.
(10) Agreement of Sale and attachment thereto relating to Post Place
Apartments, Atlanta, Georgia previously filed as Exhibit (10) to the
Partnership's Current Report on Form 8-K dated April 23, 1996, is incorporated
herein by reference.
(27) Financial Data Schedule of the Registrant for the quarter ending March 31,
1996 is attached hereto.
(b) Reports on Form 8-K: A Current Report on Form 8-K dated April 23, 1996 was
filed reporting the execution of a contract for the sale of Post Place
Apartments, Atlanta, Georgia.
<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.
IDS/BALCOR INCOME PARTNERS
A REAL ESTATE LIMITED PARTNERSHIP
By: /s/Thomas E. Meador
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Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Affiliated Partners-87, Inc., the Managing
General Partner
By: /s/Brian D. Parker
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Brian D. Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Affiliated Partners-87,
Inc., the Managing General Partner
Date: May 14, 1996
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<PAGE>
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