UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For The Fiscal Year Ended December 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file #0-16790
Inland's Monthly Income Fund, L.P.
(Exact name of registrant as specified in its charter)
Delaware 36-3525989
(State of organization) (I.R.S. Employer Identification Number)
2901 Butterfield Road, Oak Brook, Illinois 60521
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 630-218-8000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Name of each exchange on which registered:
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP UNITS
(Title of class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
State the aggregate market value of the voting stock held by nonaffiliates of
the registrant. Not applicable.
The Prospectus of the Registrant dated August 3, 1987 as supplemented and filed
pursuant to Rule 424(b) and 424(c) under the Securities Act of 1933 is
incorporated by reference in Parts I, II and III of this Annual Report on Form
10-K.
-1-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
TABLE OF CONTENTS
Part I
------
Page
----
Item 1. Business...................................................... 3
Item 2. Properties.................................................... 5
Item 3. Legal Proceedings............................................. 9
Item 4. Submission of Matters to a Vote of Security Holders........... 9
Part II
-------
Item 5. Market for the Partnership's Limited Partnership Units and
Related Security Holder Matters............................... 9
Item 6. Selected Financial Data....................................... 10
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................... 11
Item 8. Financial Statements and Supplementary Data................... 14
Item 9. Changes in and Disagreements with Independent Auditors on
Accounting and Financial Disclosure........................... 36
Part III
--------
Item 10. Directors and Executive Officers of the Registrant............ 36
Item 11. Executive Compensation ....................................... 41
Item 12. Security Ownership of Certain Beneficial
Owners and Management......................................... 42
Item 13. Certain Relationships and Related Transactions................ 42
Part IV
-------
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K........................................... 43
SIGNATURES.............................................................. 44
-2-
PART I
Item 1. Business
The Registrant, Inland's Monthly Income Fund, L.P. (the "Partnership"), was
formed on March 26, 1987 pursuant to the Delaware Revised Uniform Limited
Partnership Act, to invest in improved residential, retail, industrial and
other income producing properties. On August 3, 1987, the Partnership
commenced an Offering of 50,000 (subject to an increase up to 60,000) Limited
Partnership Units ("Units") pursuant to a Registration Statement on Form S-11
under the Securities Act of 1933. The Offering terminated on August 3, 1988,
with total sales of 59,999 Units at $500 per Unit, resulting in gross offering
proceeds of $29,999,500, which does not include the General Partner's $500
contribution. All of the holders of these Units were admitted to the
Partnership. Of the gross offering proceeds raised, $25,831,542 has been
invested in seven properties. The Partnership has repurchased a total of 713
Units for $356,676 from various Limited Partners through the Unit Repurchase
Program. The Limited Partners of the Partnership share in the benefits of
ownership of the Partnership's real property investments in proportion to the
number of Units held. Inland Real Estate Investment Corporation is the General
Partner.
The Partnership is engaged solely in the business of real estate investment. A
presentation of information about industry segments would not be material to an
understanding of the Partnership's business taken as a whole.
The Partnership acquired fee ownership of the following real property
investments:
Property and Location Square Feet Date of Purchase
- --------------------------- ------------------- ------------------
McHenry Plaza 56,643 10/19/87
Shopping Center
McHenry, Illinois
Douglas Nursing Home 65,661 01/13/88
Living and Retirement Center
Mattoon, Illinois
Hillside Nursing Home 21,565 01/29/88
Living Center
Yorkville, Illinois
Scandinavian Health Spa, Inc. 26,040 04/20/88
Health and Tennis Club
Westlake, Ohio
Schaumburg Terrace 186,720 06/24/88
Condominiums Complex (b) (228 Units) (sold during
Schaumburg, Illinois 1994 & 1995)
Wal-Mart - Duncan 68,907 08/05/88
Department Store
Duncan, Oklahoma
Wal-Mart - Rantoul 65,930 08/05/88
Department Store
Rantoul, Illinois
-3-
(a) Reference is made to Notes (2 and 7) of the Notes to Financial Statements
(Item 8 of this Annual Report) for the current outstanding principal
balance and a description of the long-term mortgage indebtedness secured by
the Partnership's real property investments.
(b) Reference is made to Note (3) of the Notes to Financial Statements (Item 8
of this Annual Report) for a description of the sale of buildings in this
complex during 1994 and 1995.
The Partnership's real property investments are described on pages 25 - 29 of
the Prospectus of the Partnership dated August 3, 1987, and in the supplements
dated January 29, 1988, April 21, 1988, and June 10, 1988, which are
incorporated herein by reference. Reference is also made to Note (2) of the
Notes to Financial Statements (Item 8 of this Annual Report) for additional
descriptions of these investments.
The Partnership has significant net operating leases with Elite Care
Corporation ("Elite") for the Douglas Nursing Home and the Hillside Nursing
Home, Scandinavian Health Spa, Inc. for the Scandinavian Health Club and Wal-
Mart Stores, Inc. for the Rantoul and Duncan Wal-Marts. Revenues from these
leases represent approximately 29%, 13% and 18%, respectively, of the
Partnership's income for the year ended December 31, 1996.
The Partnership's real property investments are subject to competition from
similar types of properties in the vicinity in which each is located.
Approximate occupancy levels for the properties are set forth on a year-end
basis in the table set forth in Item 2 below to which reference is hereby made.
The Partnership's real property investments are located in Illinois, Ohio and
Oklahoma. The Partnership has no real property investments located outside the
United States. The Partnership does not segregate revenues or assets by
geographic region, and such a presentation would not be material to an
understanding of the Partnership's business taken as a whole.
The Partnership has utilized its proceeds for investment to acquire properties.
The leases at certain of the Partnership's properties entitle the Partnership
to participate in gross receipts of lessees above fixed minimum amounts. The
Partnership's receipt of such amounts will depend in part on the ability of
those lessees to compete with similar businesses in their respective
vicinities.
-4-
The Partnership also competes with many other entities engaged in real estate
investment activities in the disposition of property. The ability to locate
purchasers for the properties will depend primarily on the operations of the
properties and the desirability of the locations of the operating properties.
The Partnership had no employees during 1996.
The terms of transactions between the Partnership and Affiliates of the General
Partner of the Partnership are set forth in Item 11 below and Note (6) of the
Notes to Financial Statements (Item 8 of this Annual Report) to which reference
is hereby made for a description of such terms and transactions.
Item 2. Properties
The Partnership owns directly the properties referred to under Item 1 above and
in Note (2) of the Notes to Financial Statements (Item 8 of this Annual Report)
to which reference is hereby made for a description of said properties.
The following is a list of approximate occupancy levels for the Partnership's
investment properties as of the end of each of the last five years. N/A
indicates the property was not owned at the end of the year.
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
McHenry Plaza (a) 69% 86% 84% 88% 57%
McHenry, Illinois
Douglas Nursing Home 100% 100% 100% 100% 100%
Mattoon, Illinois
Hillside Nursing Home 100% 100% 100% 100% 100%
Yorkville, Illinois
Scandinavian Health 100% 100% 100% 100% 100%
Westlake, Ohio
Schaumburg Terrace N/A N/A 88%* 84% 86%
Schaumburg, Illinois
Wal-Mart - Duncan 100% 100% 100% 100% 100%
Duncan, Oklahoma
Wal-Mart - Rantoul 100% 100% 100% 100% 100%
Rantoul, Illinois
(a) As of this report, the occupancy rate at McHenry Plaza has increased to
80%.
* Represents occupancy of the remaining condominium units owned by the
Partnership at the end of the year.
-5-
The following is a list of average effective annual base rents per square foot
for the Partnership's investment properties for each of the last five years.
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
McHenry Plaza $ 5.22 6.21 7.06 6.77 6.33
McHenry, Illinois
Douglas Nursing Home 6.46 6.46 6.46 6.46 6.46
Mattoon, Illinois
Hillside Nursing Home 17.59 17.59 17.59 17.59 17.59
Yorkville, Illinois
Scandinavian Health 13.79 13.79 12.54 12.54 12.54
Westlake, Ohio
Wal-Mart - Duncan 3.90 3.90 3.90 3.90 3.90
Duncan, Oklahoma
Wal-Mart - Rantoul 3.57 3.57 3.57 3.57 3.57
Rantoul, Illinois
In addition, the Partnership receives additional rental income from each of the
lessees of these properties for the payment of real estate taxes, common area
maintenance and insurance.
-6-
<TABLE>
The following tables set forth certain information with respect to the amount and expiration of leases for the
Partnership's investment properties:
<CAPTION>
Square
Feet Renewal Current Rent Per
Lessee Leased Lease Ends Options Annual Rent Square Foot
------ -------- ------------ --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Scandinavian Health Spa
Scandinavian Health
Spa, Inc. 26,040 12/2004 2/5 years $359,094 $13.79
Douglas Living Center
Elite 65,661 1/2001 1/10 years 427,623 6.51
Hillside Living Center
Elite 21,565 1/2001 1/10 years 382,539 17.74
Duncan Walmart
Wal-mart Stores, Inc. 68,907 1/2014 5/5 years 262,341 3.81
Rantoul Walmart
Wal-mart Stores, Inc. 65,930 1/2014 5/5 years 229,414 3.48
McHenry Plaza
Bond Drug Company 14,682 11/2010 - 136,353 9.29
Spot Amusements, Inc. 8,269 5/1999 - 37,585 4.55
Spot Amusements, Inc. 4,590 5/1999 - 16,800 3.66
Northern Federal Savings
and Loan 3,420 3/2001 1/5 years 47,520 13.89
Northern Federal Savings
and Loan 425 3/2001 1/5 years 27,500 64.71
Don Roberts Beauty School 3,000 9/1997 - 32,260 10.75
Premium Tobacco Store 1,750 11/1999 - 17,500 10.00
Merit Medical 2,000 Monthly - 7,000 3.50
Spot Amusement 900 Monthly - 1,800 2.00
</TABLE>
-7-
<TABLE>
<CAPTION>
Approx. Annual Annual Base % of Total % of Annual
Number Gross Leasable Base Total Rent Per GLA Base Rent
Year of Area ("GLA") of Rent of Annual Sq. Ft Under Represented Represented
Ending Leases Expiring Leases Expiring Base Expiring By Expiring By Expiring
Property Dec 31, Expiring (square feet) Leases Rent(1) Leases Leases Leases
-------- ------- ---------- --------------- -------- ------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Scandinavian Health Spa
1997-
2003 - - $ - $359,094 $ - - -
2004 1 26,040 359,094 359,094 13.79 100% 100%
2005-
2006 - - - - - - -
Douglas Living Center 1997 - - - 436,452 - - -
1998 - - - 446,083 - - -
1999 - - - 455,714 - - -
2000 - - - 465,345 - - -
2001 1 65,661 466,148 466,148 7.10 100% 100%
2002-
2006 - - - - - - -
Hillside Living Center 1997 - - - 390,436 - - -
1998 - - - 399,052 - - -
1999 - - - 407,668 - - -
2000 - - - 416,284 - - -
2001 1 21,565 417,002 417,002 19.33 100% 100%
2002-
2006 - - - - - - -
Duncan Walmart
1997 - - - 262,341 - - -
1998-
2006 - - - 266,440 - - -
Rantoul Walmart
1997 - - - 229,414 - - -
1998-
2006 - - - 232,999 - - -
McHenry Plaza
1997 1 3,000 32,260 323,490 10.75 5.30% 9.97
1998 - - - 294,048 - - -
1999 3 14,609 81,286 291,242 5.56 25.79% 27.91%
2000 - - - 211,377 - - -
2001 2 3,845 75,020 211,377 19.51 6.79% 35.49%
2002-
2006 - - - 136,353 - - -
(1) No assumptions were made regarding the releasing of expired leases. It is the opinion of the General Partner that the space
will be released at market prices.
</TABLE>
-8-
Item 3. Legal Proceedings
The Partnership was not subject to any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during 1996.
PART II
Item 5. Market for the Partnership's Limited Partnership Units and Related
Security Holder Matters
As of December 31, 1996, there were 2,248 holders of Units of the Partnership.
There is no public market for Units nor is it anticipated that any public market
for Units will develop. Reference is made to Item 6 below for a discussion of
cash distributions made to the Limited Partners.
Although the Partnership had established a Unit Repurchase Program, there are no
funds remaining for the repurchase of Units through this program.
-9-
Item 6. Selected Financial Data
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
For the years ended December 31, 1996, 1995, 1994, 1993 and 1992
(not covered by Independent Auditors' Report)
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Total assets......... $24,276,313 24,905,111 24,872,124 24,525,179 25,164,260
=========== ========== ========== ========== ==========
Long-term debt, less
current portion.... $ 1,529,779 1,566,596 1,600,006 1,630,324 1,657,836
=========== ========== ========== ========== ==========
Total income......... $ 2,766,451 2,973,283 3,397,170 3,552,879 3,518,525
=========== ========== ========== ========== ==========
Net income........... $ 1,869,732 1,923,281 1,303,469 1,239,610 1,245,401
=========== ========== ========== ========== ==========
Net loss per the
one General Partner
Unit................ $ - - - - (8,786)
=========== ========== ========== ========== ==========
Net income
allocated per
Limited Partnership
Unit (b)............ $ 31.54 32.44 21.99 20.91 21.15
=========== ========== ========== ========== ==========
Distributions to
Limited Partners (c) $ 2,347,018 2,672,357 2,371,433 2,371,433 2,371,427
=========== ========== ========== ========== ==========
Distributions to
Limited Partners
per Unit (b)........ $ 39.59 45.08 40.00 40.00 40.00
=========== ========== ========== ========== ==========
(a) The above selected financial data should be read in conjunction with the
financial statements and related notes appearing elsewhere in this Annual
Report.
(b) The net income and distribution per Unit data are based upon the weighted
average number of Units outstanding of 59,286.
(c) This amount represents the total distribution to the Limited Partners, a
portion of which was funded by the General Partner.
-10-
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
Certain statements in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in this annual report on
Form 10-K constitute "forward-looking statements" within the meaning of the
Federal Private Securities Litigation Reform Act of 1995. These forward-
looking statements involve known and unknown risks, uncertainties and other
factors which may cause the Partnership's actual results, performance, or
achievements to be materially different from any future results, performance,
or achievements expressed or implied by these forward-looking statements.
These factors include, among other things, competition for tenants; federal,
state, or local regulations; adverse changes in general economic or local
conditions; uninsured losses; and potential conflicts of interest between the
Partnership and its Affiliates, including the General Partner.
On August 3, 1987, the Partnership commenced an Offering of 50,000 (increased
to 60,000) Limited Partnership Units pursuant to a Registration Statement on
Form S-11 under the Securities Act of 1933. The Offering terminated on August
3, 1988 with a total of 59,999 Units being sold to the public at $500 per Unit
resulting in $29,999,500 gross offering proceeds not including the General
Partner, of which $25,831,542 had been invested in seven properties (as
described in Note (2) of the Notes to Financial Statements filed with this
Annual Report). In addition, proceeds were used to repay advances from the
General Partner, pay offering and organization costs and make distributions to
the Limited Partners.
At December 31, 1996, the Partnership had cash and cash equivalents of
$357,749. The Partnership intends to use such funds for distributions and
working capital requirements.
The properties owned by the Partnership, along with the interest received on
the Schaumburg Terrace mortgage receivables, are generating cash flow in excess
of the 8% annualized distributions to the Limited Partners (paid monthly), in
addition to covering all the operating expenses of the Partnership. To the
extent that the cash flow is insufficient to meet the Partnership's needs, the
Partnership may rely on Supplemental Capital Contributions from the General
Partner, advances from Affiliates of the General Partner, other short-term
financing, or may sell one or more of the properties.
Results of Operations
As of December 31, 1996, the Partnership owns six operating properties. Five
of these properties were leased on a "triple-net" basis which means that all
expenses of the property are passed through to the tenant. The Partnership
also owns a shopping center, McHenry Plaza. The leases of the shopping center
provide that the Partnership be responsible for maintenance of the structure
and the parking lot and the tenants are required to reimburse the Partnership
for portions of insurance, real estate taxes and common area maintenance.
The gain on the sale of investment property resulted from the sales of sixteen
and twenty-two of the thirty-eight six-unit condominium buildings comprising
the Schaumburg Terrace condominium complex in 1995 and 1994, respectively. The
remaining deferred gain from these sales of $2,526,885 will be recognized as
cash is received on the related financing extended by the Partnership to the
-11-
individual purchasers. Reference is made to Note (3) of the Notes to Financial
Statements (Item 8 of this Annual Report) for a description of the sale of
buildings in this complex during 1995 and 1994.
Overall rental income for the Partnership decreased for the years ended
December 31, 1996 and 1995, as compared to the year ended December 31, 1994,
primarily due to the sales program at Schaumburg Terrace. However, interest
income earned by the Partnership on the Schaumburg Terrace mortgage receivables
is greater than net rental income, after property expenses. Rental income
decreased at McHenry Plaza in 1996 and 1995, as compared to 1994, due to
tenants vacating their spaces. Rental income increased at Scandinavian Health
Club in 1995 due to a scheduled rent increase.
The major tenant at McHenry Plaza is a Walgreens drug store. Other tenants are
Don Robert's Beauty School and Family Entertainment Center. These tenants took
possession of their spaces at the center from 1990 through 1993, following the
July 1989 termination of a lease with Duckwell-Alco Stores, Inc., the tenant
which leased 94% of the space in the center at the time the Partnership
purchased the property. The General Partner embarked on a program to re-lease
the center to new tenants, and secured a $1,700,000 line of credit (which was
replaced in 1992 by a loan collateralized by the Rantoul Wal-Mart) for property
upgrades, remodeling and re-leasing expenses. Annual principal and interest
payments on this debt total $187,943. As of December 31, 1996, approximately
69% of the property was leased. As of the date of this report, the occupancy
level has increased to approximately 80%. Additional expenditures for build-out
and leasing commissions are anticipated as the remaining rentable space is
leased. The lease-up of McHenry Plaza will increase the cash flow available
for distribution by the Partnership.
The sale of the condominium buildings comprising the Schaumburg Terrace
condominium complex resulted in decreases in depreciation and property
operating expenses to Affiliates and non-affiliates for the years ended
December 31, 1996 and 1995, as compared to the year ended December 31, 1994.
The decrease in professional services to Affiliates for the years ended
December 31, 1996 and 1995, as compared to the year ended December 31, 1994, is
due to a decrease in both legal and accounting fees paid to Affiliates.
The increase in professional services to non-affiliates for the year ended
December 31, 1996, as compared to the year ended December 31, 1995, is due to
an increase in accounting and legal fees paid to non-affiliates. The increase
in professional services to non-affiliates for the year ended December 31,
1995, as compared to the year ended December 31, 1994, is due to an increase in
accounting fees paid to non-affiliates.
General and administrative expenses to Affiliates increased for the year ended
December 31, 1996, as compared to the year ended December 31, 1995, is due to
an increase in investor services, supplies and postage expenses, partially
offset by a decrease in data processing and mortgage servicing expenses.
General and administrative expenses to Affiliates decreased for the year ended
December 31, 1995, as compared to the year ended December 31, 1994, due to a
decrease in data processing expense which was partially offset by an increase
in fees paid to an Affiliate for servicing the mortgages relating to the sale
of Schaumburg Terrace.
-12-
General and administrative expenses to non-affiliates increased for the year
ended December 31, 1996, as compared to the year ended December 31, 1995, due
to an increase in the Illinois Replacement Tax.
Interest expense to Affiliates is the result of the loan from the General
Partner received in 1993 for condominium conversion costs relating to
Schaumburg Terrace. See Note (6) of the Notes to Financial Statements (Item 8
of this Annual Report).
Inflation
For the Partnership's McHenry Plaza Shopping Center inflation is likely to
increase rental income from leases to new tenants and lease renewals, subject
to market conditions. Continued inflation may cause capital appreciation of
this property over time as rental rates and the replacement cost of the
property rise.
Rental income and operating expenses for those partnership properties operated
under triple-net leases are not likely to be directly affected by future
inflation, since rents are fixed under the leases and property expenses are the
responsibility of tenants. The capital appreciation of triple-net-leased
properties is likely to be influenced by interest rate fluctuations. To the
extent that inflation affects interest rates, future inflation may have an
effect on the capital appreciation of triple-net-leased properties.
-13-
Item 8. Financial Statements and Supplementary Data
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Index
----- Page
----
Independent Auditors' Report............................................. 15
Financial Statements:
Balance Sheets, December 31, 1996 and 1995............................. 16
Statements of Operations, for the years ended
December 31, 1996, 1995 and 1994..................................... 18
Statements of Partners' Capital, for the years ended
December 31, 1996, 1995 and 1994..................................... 20
Statements of Cash Flows, for the years ended
December 31, 1996, 1995 and 1994..................................... 21
Notes to Financial Statements.......................................... 23
Real Estate and Accumulated Depreciation (Schedule III).................. 34
Schedules not filed:
All schedules other than those indicated in the index have been omitted as the
required information is inapplicable or the information is presented in the
financial statements or related notes.
-14-
INDEPENDENT AUDITORS' REPORT
To the Partners of
Inland's Monthly Income Fund, L.P.
We have audited the accompanying balance sheets of Inland's Monthly Income
Fund, L.P. (a limited partnership) as of December 31, 1996 and 1995, and the
related statements of operations, partners' capital, and cash flows for each of
the three years in the period ended December 31, 1996. Our audits also
included the financial statement schedule listed in item 14(c). These
financial statements and financial statement schedule are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements and financial statement schedule based on our
audits.
We conducted our audits in accordance with general accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Inland's Monthly Income Fund, L.P. as of
December 31, 1996 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles. Also, in our
opinion, the financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Chicago, Illinois
January 31, 1997
-15-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Balance Sheets
December 31, 1996 and 1995
Assets
------
1996 1995
Current assets: ---- ----
Cash and cash equivalents (Note 1).............. $ 357,749 440,767
Accounts and rents receivable................... 69,819 53,005
Mortgage interest receivable.................... 70,259 62,115
Current portion of mortgage loans receivable.... 77,430 70,546
Current portion of deferred rent receivable..... 12,503 6,879
Other assets.................................... 4,013 3,550
------------ ------------
Total current assets.......................... 591,773 636,862
------------ ------------
Investment properties (including acquisition
fees paid to Affiliates of $1,738,621)
(Notes 1, 2 and 6):
Land............................................ 2,697,394 2,697,394
Buildings and improvements...................... 15,592,680 15,592,680
Tenant improvements............................. 749,447 707,502
------------ ------------
19,039,521 18,997,576
Less accumulated depreciation................... 4,496,365 3,978,010
------------ ------------
Net investment properties..................... 14,543,156 15,019,566
------------ ------------
Other assets:
Mortgage loans receivable, less current portion. 8,494,670 8,571,225
Deferred loan fees (net of accumulated
amortization of $22,761 and $18,133 at
December 31, 1996 and 1995, respectively)
(Note 1)...................................... 23,527 28,155
Deferred leasing fees (including $219,451
paid to Affiliates) (net of accumulated
amortization of $169,227 and $148,197 at
December 31, 1996 and 1995, respectively)
(Notes 1 and 6)............................... 175,160 196,190
Deferred rent receivable, less current portion
(Notes 1 and 5)............................... 448,027 453,113
------------ ------------
Total other assets............................ 9,141,384 9,248,683
------------ ------------
Total assets...................................... $24,276,313 24,905,111
============ ============
See accompanying notes to financial statements.
-16-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Balance Sheets
(continued)
December 31, 1996 and 1995
Liabilities and Partners' Capital
---------------------------------
1996 1995
Current liabilities: ---- ----
Accounts payable and accrued expenses........... $ 22,211 27,035
Accrued real estate taxes....................... 59,114 117,803
Distributions payable (Note 9).................. 198,790 199,337
Due to Affiliates (Note 6)...................... 2,752 9,218
Deposits held for others........................ 99,250 117,369
Current portion of long-term debt (Note 7)...... 36,817 33,410
Current portion of deferred gain on sale of
investment property........................... 20,799 20,799
------------ ------------
Total current liabilities..................... 439,733 524,971
------------ ------------
Deferred loan fees (Note 1)....................... 69,264 77,922
Long-term debt, less current portion (Note 7)..... 1,529,779 1,566,596
Deferred gain on sale of investment property,
less current portion (Note 3)................... 2,506,086 2,526,885
------------ ------------
Total liabilities............................... 4,544,862 4,696,374
------------ ------------
Partners' capital (Notes 1, 4 and 6):
General Partner:
Capital contribution.......................... 500 500
Supplemental Capital Contributions............ 2,095,863 2,095,863
Supplemental capital distributions to
Limited Partners............................ (2,095,863) (2,095,863)
Cumulative net loss........................... (36,743) (36,743)
------------ ------------
(36,243) (36,243)
Limited Partners: ------------ ------------
Units of $500. Authorized 60,000 Units,
59,286 Units outstanding (net of offering
costs of $3,289,242, of which $388,902 was
paid to Affiliates)......................... 26,353,582 26,353,582
Supplemental Capital Contributions from
General Partner............................. 2,095,863 2,095,863
Cumulative net income......................... 12,542,734 10,673,002
Cumulative distributions...................... (21,224,485) (18,877,467)
------------ ------------
19,767,694 20,244,980
------------ ------------
Total Partners' capital....................... 19,731,451 20,208,737
------------ ------------
Total liabilities and Partners' capital........... $24,276,313 24,905,111
============ ============
See accompanying notes to financial statements.
-17-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Statements of Operations
For the years ended December 31, 1996, 1995 and 1994
1996 1995 1994
---- ---- ----
Income:
Rental income (Notes 1 and 5)..... $ 1,962,343 2,178,893 3,139,073
Additional rental income.......... 37,983 62,589 63,631
Interest income................... 766,125 694,548 135,776
Other income...................... - 37,253 58,690
------------ ------------ ------------
2,776,451 2,973,283 3,397,170
Expenses: ------------ ------------ ------------
Professional services to
Affiliates...................... 13,295 22,818 27,655
Professional services to
non-affiliates.................. 30,468 28,701 23,776
General and administrative
expenses to Affiliates.......... 34,248 40,106 42,594
General and administrative
expenses to non-affiliates...... 21,753 18,769 18,188
Property operating expenses to
Affiliates...................... 28,820 39,816 86,991
Property operating expenses
to non-affiliates............... 90,659 337,677 1,136,582
Interest expense to Affiliates.... - - 14,309
Interest expense to non-affiliates 154,262 157,379 160,208
Depreciation...................... 518,355 551,293 788,063
Amortization...................... 25,658 26,147 34,085
------------ ------------ ------------
917,518 1,222,706 2,332,451
------------ ------------ ------------
Operating income.................... 1,848,933 1,750,577 1,064,719
Gain on sale of investment
property (Note 3)................. 20,799 172,704 238,750
------------ ------------ ------------
Net income.......................... $ 1,869,732 1,923,281 1,303,469
============ ============ ============
See accompanying notes to financial statements.
-18-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Statements of Operations
(continued)
For the years ended December 31, 1996, 1995 and 1994
1996 1995 1994
---- ---- ----
Net income allocated to (Note 4):
General Partner................... - - -
Limited Partners.................. 1,869,732 1,923,281 1,303,469
------------ ------------ ------------
Net income.......................... $ 1,869,732 1,923,281 1,303,469
============ ============ ============
Net income allocated to Limited
Partners per weighted average
of Limited Partnership Units of
59,286............................ $ 31.54 32.44 21.99
============ ============ ============
See accompanying notes to financial statements.
-19-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Statements of Partners' Capital
For the years ended December 31, 1996, 1995 and 1994
General Limited
Partner Partners Total
------- -------- -----
Balance (deficit) January 1, 1994... $ (36,243) 21,782,020 21,745,777
Net income (Note 4)................. - 1,303,469 1,303,469
Supplemental Capital Contributions
by the General Partner (a)........ - 280,000 280,000
Distributions to Limited Partners
($40.00 per weighted average of
Limited Partnership Units
of 59,286)........................ - (2,371,433) (2,371,433)
------------ ------------ ------------
Balance (deficit) December 31, 1994. (36,243) 20,994,056 20,957,813
Net income (Note 4)................. - 1,923,281 1,923,281
Distributions to Limited Partners
($45.08 per weighted average of
Limited Partnership Units
of 59,286)........................ - (2,672,357) (2,672,357)
------------ ------------ ------------
Balance (deficit) December 31, 1995. (36,243) 20,244,980 20,208,737
Net income (Note 4)................. - 1,869,732 1,869,732
Distributions to Limited Partners
($39.59 per weighted average of
Limited Partnership Units
of 59,286)........................ - (2,347,018) (2,347,018)
------------ ------------ ------------
Balance (deficit) December 31, 1996. $ (36,243) 19,767,694 19,731,451
============ ============ ============
(a) Made by the General Partner to fund the cumulative preferred return of
8% per annum.
See accompanying notes to financial statements.
-20-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Statements of Cash Flows
For the years ended December 31, 1996, 1995 and 1994
1996 1995 1994
Cash flows from operating activities: ---- ---- ----
Net income........................ $ 1,869,732 1,923,281 1,303,469
Adjustments to reconcile net income
to net cash provided by operating
activities:
Gain on sale of investment
property...................... (20,799) (172,704) (238,750)
Depreciation.................... 518,355 551,293 788,063
Amortization.................... 25,658 26,147 34,085
Changes in assets and liabilities:
Accounts and rents receivable. (16,814) (12,769) (232)
Mortgage interest receivable.. (8,144) (30,248) (31,867)
Other current assets.......... (463) (872) 2,259
Deferred rent receivable...... (538) (28,162) (19,072)
Accounts payable and accrued
expenses.................... (4,824) (51,986) 29,852
Accrued real estate taxes..... (58,689) (294,117) (28,432)
Due to Affiliates............. (6,466) 7,652 (1,230)
Other current liabilities..... - (5,118) 499
Deferred loan fees............ (8,658) 25,311 52,611
Net cash provided by operating ------------ ------------ ------------
activities........................ 2,288,350 1,937,708 1,891,255
------------ ------------ ------------
Cash flows from investing activities:
Proceeds from sale of investment
property........................ - 409,383 700,648
Principal payments received on
mortgage loans receivable....... 69,671 53,149 6,519
Capital expenditures.............. (41,945) (14,509) (68,443)
Net cash provided by investing ------------ ------------ ------------
activities........................ 27,726 448,023 638,724
------------ ------------ ------------
Cash flows from financing activities:
Supplemental Capital Contributions - - 280,000
Cash distributions................ (2,347,565) (2,674,430) (2,371,433)
Change in Deposits held
for others...................... (18,119) (23,504) (22,346)
Principal payments of long-term
debt............................ (33,410) (30,318) (27,513)
Repayment of loan from
General Partner................. - - (260,000)
Net cash used in financing ------------ ------------ ------------
activities........................ (2,399,094) (2,728,252) (2,401,292)
------------ ------------ ------------
See accompanying notes to financial statements.
-21-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Statements of Cash Flows
(continued)
For the years ended December 31, 1996, 1995 and 1994
1996 1995 1994
Net increase (decrease) in cash ---- ---- ----
and cash equivalents.............. $ (83,018) (342,521) 128,687
Cash and cash equivalents at
beginning of year................. 440,767 783,288 654,601
Cash and cash equivalents at ------------ ------------ ------------
end of year....................... $ 357,749 440,767 783,288
============ ============ ============
Cash paid for interest............ $ 154,534 157,951 185,255
============ ============ ============
Supplemental disclosure of non-cash investing activities:
Sale of investment property:
Mortgage loans receivable......... - (3,789,704) (4,911,735)
Reduction of investment in
property........................ - 3,683,157 5,019,117
Reduction of accumulated
depreciation related to
investment property sold........ - (812,990) (1,036,952)
Gain on sale...................... - 172,704 238,750
Deferred gain on sale............. - 1,156,216 1,391,468
Proceeds from sale of investment ------------ ------------ ------------
property...................... $ - 409,383 700,648
============ ============ ============
See accompanying notes to financial statements
-22-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
For the years ended December 31, 1996, 1995 and 1994
(1) Organization and Basis of Accounting
Inland's Monthly Income Fund, L.P. (the "Partnership"), was formed on March 26,
1987 pursuant to the Delaware Revised Uniform Limited Partnership Act, to
invest in improved residential, retail, industrial and other income producing
properties. On August 3, 1987, the Partnership commenced an Offering of 50,000
(subject to an increase up to 60,000) Limited Partnership Units ("Units")
pursuant to a Registration under the Securities Act of 1933. The Offering
terminated on August 3, 1988, with total sales of 59,999 Units at $500 per
Unit, resulting in gross offering proceeds of $29,999,500. This does not
include the General Partner's contribution. All of the holders of these Units
were admitted to the Partnership. The Partnership has repurchased a total of
713 Units for $356,676 from various Limited Partners through the Unit
Repurchase Program. There are no funds remaining for the repurchase of Units
through this program. The Limited Partners of the Partnership share in the
benefits of ownership of the Partnership's real property investments in
proportion to the number of Units held. Inland Real Estate Investment
Corporation is the General Partner.
The preparation of financial statements in conformity with generally accepted
accounting principals requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
The Partnership adopted Statement of Financial Accounting Standards No. 121
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of" ("SFAS 121") as required in the first quarter of 1996. SFAS
121 requires that the Partnership record an impairment loss on its property to
be held for investment whenever its carrying value cannot be fully recovered
through estimated undiscounted future cash flows from their 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. The adoption of SFAS 121 did not have any effect on the
Partnership's financial position, results of operations or liquidity.
Depreciation expense is computed using the straight-line method over the
following estimated useful lives:
Years
-----
Buildings and improvements.................... 30 to 40
Furniture and fixtures........................ 5 to 12
Tenant improvements........................... lease term
-23-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
Maintenance and repair expenses are charged to operations as incurred.
Significant improvements are capitalized and depreciated over their estimated
useful lives.
The Partnership considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents and are carried at cost
which approximates market.
Rental income is recognized on a straight-line basis over the term of each
lease. The difference between rental income earned and the cash rent due under
the provisions of the lease agreements is recorded as deferred rent receivable.
Offering costs have been offset against the Limited Partners' capital accounts.
Deferred leasing fees are amortized on a straight-line basis over the term of
the related lease. Deferred loan fees are amortized on a straight line basis
over the term of the related loan.
-24-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
Condominium conversion costs were included in investment property held for sale
and were expensed as condominium units were sold.
Loan fees relating to the mortgage loans receivable are deferred and amortized
as yield adjustments on a straight-line basis over the life of the related
mortgage loan receivable which approximates the effective interest rate method.
No provision for Federal income taxes has been made as the liability for such
taxes is that of the Partners rather than the Partnership.
The Partnership's records are maintained on the accrual basis of accounting in
accordance with generally accepted accounting principles ("GAAP"). The Federal
income tax return has been prepared from such records after making appropriate
adjustments relating to depreciation and the Supplemental Capital Contributions
to reflect the Partnership's accounts as adjusted for Federal income tax
reporting purposes. Such adjustments are not recorded in the records of the
Partnership. The net effect of these items is summarized as follows:
1996 1995
------------------------- -----------------------
Tax Tax
GAAP Basis GAAP Basis
Basis (unaudited) Basis (unaudited)
------------ ------------ ----------- -----------
Total assets................ $24,276,313 27,565,556 24,905,111 28,194,354
Partners' capital (deficit):
General Partner........... (36,243) (25,022) (36,243) (20,045)
Limited Partners.......... 19,767,694 23,045,715 20,244,980 23,518,024
Net income (loss):
General Partner........... - (4,977) - (3,784)
Limited Partners.......... 1,869,732 1,911,441 1,923,281 1,962,141
Net income per Limited
Partnership Unit.......... 31.54 32.24 32.44 33.10
The net income per Limited Partnership Unit is based upon the weighted average
number of Units of 59,286.
-25-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
(2) Investment Properties
(a) McHenry Plaza, McHenry, Illinois
On October 19, 1987, the Partnership purchased a 57,910 square foot
shopping center located in McHenry, Illinois from an Affiliate of the
General Partner. The cost of this property to the Partnership was
$1,967,200 which includes the purchase price of $1,776,000 and acquisition
costs of $191,200. Subsequent to the purchase of this property,
approximately $1,595,000, including leasing commissions, was expended to
upgrade the property following the July 1989 termination of a lease with
Duckwell - Alco Stores, Inc., the tenant which leased 94% of the space in
the center at the time the Partnership purchased the property. This
upgrade was financed by a line of credit secured by the Rantoul Wal-Mart.
See Note (7) Long-Term Debt for further discussion of permanent financing
obtained.
The major tenant at McHenry Plaza is a Walgreens drug store. Other tenants
include Family Entertainment Center, Northern Federal Savings Bank, Merit
Medical Equipment and Don Roberts Beauty School. As of December 31, 1996,
approximately 17,607 square feet, representing 31% of the total space at
the center, remains to be leased. As of January 31, 1997, the total
remaining leaseable space was approximately 11,073 square feet,
representing 20% of the total space at the center. The General Partner
continues to pursue additional leases for this remaining space.
(b) Douglas Living and Retirement Center, Mattoon, Illinois
On January 13, 1988, the Partnership took title to this property which an
Affiliate of the General Partner purchased on behalf of the Partnership
from an unaffiliated third party for $3,208,250. The nursing care facility
consists of a 75 bed facility occupying 27,922 square feet, a 35 unit
retirement apartment center occupying 36,389 square feet and a 1,350 square
foot retirement duplex. The total cost of this property to the Partnership
was $3,574,465, which includes the purchase price of $3,208,250 and
acquisition costs of $366,215.
The Retirement and Living Center is currently 100% leased to Elite Care
Corporation (ELITE). The lease is a triple-net lease and expires January,
2001. The tenant has the right to extend the lease for an additional 10
year term. The current rent per annum is $427,623 and will adjust
annually.
In 1992, the operator of this facility negotiated with a new operator to
sublease the facility. The General Partner approved the transaction with
no significant changes to the terms of the lease.
-26-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
(c) Hillside Living Center, Yorkville, Illinois
On January 29, 1988, the Partnership took title to this property which an
Affiliate of the General Partner purchased on behalf of the Partnership
from an unaffiliated third party for $2,870,000. The cost of this property
to the Partnership was $3,195,713, which includes the purchase price of
$2,870,000 and acquisition costs of $325,713. The center consists of a
two-story building with a total of 21,565 square feet.
The Living Center is currently 100% leased to ELITE. The lease is a
triple-net lease and expires January, 2001. The tenant has the right to
extend the lease for an additional 10 year term. The current rent per
annum is $382,539 and will adjust annually.
In 1992, the operator of this facility negotiated with a new operator to
sublease the facility. The General Partner approved the transaction with
no significant changes to the terms of the lease.
(d) Scandinavian Health Spa, Westlake, Ohio
On April 20, 1988, the Partnership purchased an existing 26,040 square foot
health and racquet club known as Scandinavian Health Spa, located in
Westlake, Ohio. The cost of this property to the Partnership was
$3,068,930, which includes the purchase price of $2,760,000 and related
acquisition costs of $308,930.
The property is fully leased to Scandinavian Health Spa, Inc., a subsidiary
of Bally Health & Tennis Corporation, under a triple-net lease. The lease
required a base rent per annum of $296,772, paid monthly, and expires in
December 2004. The tenant has the option to extend the lease for two
additional five-year periods. The rent was adjusted to $359,094 per annum
in January 1995, and adjusts every five years thereafter, based on the
Consumer Price Index.
(e) Duncan Wal-Mart, Duncan, Oklahoma
On August 5, 1988, the Partnership purchased a Wal-Mart store in Duncan,
Oklahoma (the "Duncan Store") from Wal-Mart Properties, Inc. The cost to
the Partnership was $3,038,547, which includes acquisition fees of
$305,829.
The Duncan Store is situated on approximately 11.5 acres of land and
contains a total of 68,907 square feet. The construction of the store was
completed in the fall of 1987.
-27-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
Wal-Mart Stores, Inc. is the tenant and has executed a lease for 100% of
the rentable space. The lease is a triple-net lease and expires in
January, 2014. The tenant has the right to extend the lease for five
additional five year periods. The rent per annum during the first ten
lease years is $262,341; during lease years 11-20 it will be $266,440;
during lease years 21-25 it will be $286,935; during lease years 26-35 it
will be $293,767; and it will be $300,599 during the remaining lease
years.
(f) Rantoul Wal-Mart, Rantoul, Illinois
On August 5, 1988, the Partnership purchased a Wal-Mart Store in Rantoul,
Illinois (the "Rantoul Store") from Wal-Mart Properties, Inc. The cost to
the Partnership was $2,656,568, which includes acquisition fees of
$266,834.
The Rantoul Store is situated on approximately 11.2 acres of land and
contains a total of 65,930 square feet. The construction of the store was
completed in the spring of 1988.
Wal-Mart Stores, Inc. is the tenant and has executed a lease for 100% of
the rentable space. The lease is a triple-net lease and expires in
January, 2014. The tenant has the right to extend the lease for five
additional five year periods. The rent per annum during the first ten
lease years is $229,414; during lease years 11-20 it will be $232,999;
during lease years 21-25 it will be $250,922; during lease years 26-35 it
will be $256,896; and it will be $262,870 during the remaining lease
years.
-28-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
Cost and accumulated depreciation of the above properties are summarized as
follows:
1996 1995
Shopping Center: ---- ----
Cost.............................. $ 3,505,298 3,463,353
Less accumulated depreciation..... 1,083,874 955,422
------------ ------------
2,421,424 2,507,931
------------ ------------
Health and Tennis Club:
Cost.............................. 3,068,930 3,068,930
Less accumulated depreciation..... 725,004 642,146
------------ ------------
2,343,926 2,426,784
------------ ------------
Nursing Homes:
Cost.............................. 6,770,178 6,770,178
Less accumulated depreciation..... 1,592,161 1,415,254
------------ ------------
5,178,017 5,354,924
------------ ------------
Department Stores:
Cost.............................. 5,695,115 5,695,115
Less accumulated depreciation..... 1,095,326 965,188
------------ ------------
4,599,789 4,729,927
------------ ------------
Total........................... $14,543,156 15,019,566
============ ============
(3) Gain on Sale of Investment Property
Schaumburg Terrace, Schaumburg, Illinois
As of December 31, 1996, the Partnership has sold all of the thirty-eight six-
unit condominium buildings comprising the Schaumburg Terrace condominium
complex to unaffiliated third parties. The Partnership received $249,596 from
one all-cash sale and recorded a gain of $71,865 in 1994. In addition, the
Partnership received $823,518 in down payment proceeds, and provided mortgage
loans totaling $8,701,439 to the purchasers for the thirty-seven additional
sales. The principal balances of these loans range from $210,640 to $255,891.
These loans require monthly principal and interest payments totaling $67,763
based on an interest rate of 8.625% per annum for ten years and a thirty year
amortization period with payment of all remaining principal at the end of that
period. The Partnership has recorded $20,799, $172,704 and $238,750 of gain as
a result of these installment sales in 1996, 1995 and 1994, respectively. The
remaining deferred gain of $2,526,885 will be recognized over the life of the
related mortgage loans as principal payments are received.
-29-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
(4) Partnership Agreement
The Partnership Agreement defines the allocation of distributable available
cash and profits and losses. Limited Partners will receive 100% of cash
available for distribution until the Limited Partners have received a
cumulative preferred return of 8% per annum. Thereafter, the General Partner
shall be allocated an amount equal to any Supplemental Capital Contributions
outstanding at the time of the distribution and then 95% of cash available for
distribution will be allocated to the Limited Partners and 5% will be allocated
to the General Partner.
Pursuant to the terms of the Partnership Agreement, the profits and losses of
the Partnership from operations are allocated as follows:
(a) Depreciation shall be allocated 99% to the taxable Limited Partners and
1% to the General Partner.
(b) To the extent the minimum distribution of 8% per annum to the Limited
Partners is funded by Supplemental Capital Contributions, the
distribution shall be treated as a guaranteed payment, and the
resulting deduction shall be allocated to the General Partner.
(c) The remaining net profits shall be allocated 100% to the Limited
Partners until the Limited Partners have been allocated an amount equal
to the distribution required to provide them a cumulative preferred
return of 8% per annum.
The Partnership allocates income to Partners such that no Partner group will
receive an allocation of income which is greater than the Partnership's net
income for the related period.
The General Partner is required to make Supplemental Capital Contributions, if
necessary, from time to time in amounts sufficient to allow the Partnership to
make distributions to the Limited Partners to provide a noncompounded return on
their invested capital equal to 8% per annum. Such contributions by the
General Partner to fund the cumulative preferred return of 8% per annum, for
the three year period ended December 31, 1996, are as shown in the accompanying
statements of partners' capital. The cumulative amount of such Supplemental
Capital Contributions at December 31, 1996 is $2,095,863.
-30-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
(5) Operating leases
Minimum lease payments to be received in the future from the operating leases
are as follows:
1997.......................................... $ 1,993,160
1998.......................................... 1,992,935
1999.......................................... 1,977,259
2000.......................................... 1,951,535
2001.......................................... 1,208,883
Thereafter.................................... 8,270,354
------------
Total......................................... $17,394,126
============
Remaining lease terms range from one year to eighteen years. Pursuant to the
lease agreements, tenants of McHenry Plaza Shopping Center are required to
reimburse the Partnership for their pro rata share of the real estate taxes and
operating expenses of the property. Such amounts are included in additional
rental income.
Certain tenant leases contain provisions providing for stepped rent increases.
Generally accepted accounting principles require that rental income be recorded
for the period of occupancy on a straight-line basis. The accompanying
financial statements include $538, $28,162 and $28,620 in 1996, 1995 and 1994,
respectively, of rental income for the period of occupancy for which stepped
rent increases apply and $460,530 and $459,992 in related deferred rent
receivable as of December 31, 1996 and 1995, respectively. These amounts will
be collected over the terms of the related leases as scheduled rent payments
are made. Deferred rent receivable of $9,548 was written off against rental
income in 1994 due to a modification of a lease at McHenry Plaza Shopping
Center.
The Partnership has significant net operating leases with Elite Care
Corporation for the Douglas Nursing Home and the Hillside Nursing Home,
Scandinavian Health Spa, Inc. for the Scandinavian Health Club and Wal-mart
Stores, Inc. for the Rantoul and Duncan Walmarts. Revenues from these leases
represent approximately 29%, 13% and 18%, respectively, of the Partnership's
income for the year ended December 31, 1996.
-31-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
(6) Transactions with Affiliates
The General Partner and its Affiliates are entitled to reimbursement for
salaries and expenses of employees of the General Partner and its Affiliates
relating to the administration of the Partnership, of which $2,752 and $9,218
remained unpaid at December 31, 1996 and 1995, respectively.
An Affiliate of the General Partner is entitled to receive Property Management
Fees for management and leasing services. The Partnership has incurred
property management fees of $28,820, $39,816 and $86,991 for the years ended
December 31, 1996, 1995 and 1994, respectively, all of which has been paid.
Through the Partnership's participation in an insurance program, claims from
the Partnership's properties, as well as properties owned by other limited
partnerships syndicated by Affiliates, were managed through a loss reserve
trust. In June 1995, this program was terminated. For the years ended
December 31, 1995 and 1994, respectively, the Partnership paid $5,248 and
$7,578 to the loss reserve trust for the McHenry Plaza Shopping Center and
Schaumburg Terrace properties. Effective March 1994, Schaumburg Terrace was no
longer insured through this program.
-32-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
(7) Long-Term Debt
On February 26, 1992, the Partnership obtained a $1,700,000 loan collateralized
by the Rantoul Wal-Mart to replace a maturing line of credit for the upgrading
of McHenry Plaza Shopping Center. The loan bears an interest rate of 9.75% and
requires monthly principal and interest payments of $15,662 through March 2002,
when all unpaid principal and interest is due. The Partnership paid a $17,000
loan fee to the lender and incurred $29,288 of other costs associated with the
funding of the loan.
As of December 31, 1996, the required principal payments on the Partnership's
long-term debt over the next five years are as follows:
1997.......................................... $ 36,817
1998.......................................... 40,572
1999.......................................... 44,709
2000.......................................... 49,268
2001.......................................... 54,293
(8) Legal Proceedings
On March 10, 1995, the Partnership settled a claim with regards to the
reorganization plan of Adventist Living Centers, Inc. ("ALC"), a former tenant
of the Partnership's nursing homes. The Partnership had previously received
$149,323 from ALC in connection with their lease termination agreements. The
Partnership paid $68,031 as its portion of the settlement but received $10,876
from its share of a co-defendant's contribution.
(9) Subsequent Events
During January 1997, the Partnership paid a distribution of $198,790 to the
Limited Partners.
-33-
<TABLE>
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Schedule III
Real Estate and Accumulated Depreciation
December 31, 1996
<CAPTION>
Initial Cost
to Partnership Gross amount at which carried
(A) Costs at end of period (B)
----------------------- capitalized --------------------------------------------------
Buildings subsequent Land Buildings Accumulated
and to and and Total Depreciation
Encumbrance Land improvements acquisition improvements improvements (C) (D)
----------- ---------- ------------ ----------- ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
McHenry Plaza
Shopping Center
McHenry, IL........ $ - 330,083 1,637,117 1,538,098 330,083 3,175,215 3,505,298 1,083,874
Douglas Nursing Home
Living/Retirement
Center
Mattoon, IL........ - 411,778 3,162,687 - 411,778 3,162,687 3,574,465 802,675
Hillside Nursing Home
Living Center
Yorkville, IL...... - 232,034 2,963,679 - 232,034 2,963,679 3,195,713 789,486
Scandinavian Health
Spa Health and
Tennis Club
Westlake, OH....... - 583,204 2,485,726 - 583,204 2,485,726 3,068,930 725,004
Wal-Mart - Duncan
Department Store
Duncan, OK......... - 863,992 2,174,555 - 863,992 2,174,555 3,038,547 522,929
Wal-Mart - Rantoul
Department Store
Rantoul, IL........ 1,566,596 276,303 2,380,265 - 276,303 2,380,265 2,656,568 572,397
----------- ---------- ------------ ------------ ----------- ------------ ----------- -----------
$1,566,596 2,697,394 14,804,029 1,538,098 2,697,394 16,342,127 19,039,521 4,496,365
=========== ========== ============ ============ =========== ============ =========== ===========
</TABLE>
<TABLE>
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Schedule III
Real Estate and Accumulated Depreciation
December 31, 1996
<CAPTION>
Life on which
Date Depreciation
Con- in latest Stmt
stru- Date of Operations
cted Acq is computed
----- ---- --------------
<S> <C> <C> <C>
McHenry Plaza
Shopping Center
McHenry, IL........ 1968 10/19 30 yrs.
1987
Douglas Nursing Home
Living/Retirement
Center 01/13
Mattoon, IL........ 1964 1988 40 yrs.
Hillside Nursing Home
Living Center
Yorkville, IL...... 1963 01/29 40 yrs.
1988
Scandinavian Health
Spa Health and
Tennis Club
Westlake, OH....... 1984 04/20 30 yrs.
1988
Wal-Mart - Duncan
Department Store
Duncan, OK......... 1987 08/05 35 yrs.
1988
Wal-Mart - Rantoul
Department Store
Rantoul, IL........ 1988 08/05 35 yrs.
1988
</TABLE>
-34-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Schedule III (continued)
Real Estate and Accumulated Depreciation
December 31, 1996, 1995 and 1994
Notes:
(A) The initial cost to the Partnership represents the original purchase
price of the property, including amounts incurred subsequent to
acquisition which were contemplated at the time the property was
acquired.
(B) The aggregate cost of real estate owned at December 31, 1996 for
federal income tax purposes was approximately $19,039,000 (unaudited).
(C) Reconciliation of real estate owned:
1996 1995 1994
---- ---- ----
Balance at beginning of year.... $18,997,576 22,666,224 27,616,898
Additions....................... 41,945 14,509 68,443
Disposals....................... - 3,683,157 5,019,117
------------ ------------ ------------
Balance at end of year.......... $19,039,521 18,997,576 22,666,224
============ ============ ============
(D) Reconciliation of accumulated depreciation:
Balance at beginning of year.... $ 3,978,010 4,239,707 4,488,596
Depreciation expense............ 518,355 551,293 788,063
Disposals....................... - 812,990 1,036,952
------------ ------------ ------------
Balance at end of year.......... $ 4,496,365 3,978,010 4,239,707
============ ============ ============
-35-
Item 9. Changes in and Disagreements with Independent Auditors on Accounting
and Financial Disclosure
There were no disagreements on accounting or financial disclosures during 1996.
PART III
Item 10. Directors and Executive Officers of the Registrant
The General Partner of the Partnership, Inland Real Estate Investment
Corporation, was organized in 1984 for the purpose of acting as general partner
of limited partnerships formed to acquire, own and operate real properties.
The General Partner is a wholly-owned subsidiary of The Inland Group, Inc. In
1990, Inland Real Estate Investment Corporation became the replacement General
Partner for an additional 301 privately-owned real estate limited partnerships
syndicated by Affiliates. The General Partner has responsibility for all
aspects of the Partnership's operations. The relationship of the General
Partner to its Affiliates is described under the caption "Conflicts of
Interest" at pages 11 to 13 of the Prospectus, a copy of which description is
hereby incorporated herein by reference.
Officers and Directors
The officers, directors, and key employees of The Inland Group, Inc. and its
Affiliates ("Inland") that are likely to provide services to the Partnership
are as follows:
Functional Title
Daniel L. Goodwin....... Chairman and Chief Executive Officer
Robert H. Baum.......... Executive Vice President-General Counsel
G. Joseph Cosenza....... Senior Vice President-Acquisitions
Robert D. Parks......... Senior Vice President-Investments
Norbert J. Treonis...... Senior Vice President-Property Management
Catherine L. Lynch...... Treasurer
Paul J. Wheeler......... Vice President-Personal Financial Services Group
Roberta S. Matlin....... Assistant Vice President-Investments
Mark Zalatoris.......... Assistant Vice President-Due Diligence
Patricia A. Challenger.. Vice President-Asset Management
Kelly Tucek............. Assistant Vice President-Partnership Accounting
Cynthia M. Hassett...... Assistant Vice President-Partnership Accounting
Venton J. Carlston...... Assistant Controller
-36-
DANIEL L. GOODWIN (age 53) is Chairman of the Board of Directors of The
Inland Group, Inc., a billion-dollar real estate and financial organization
located in Oak Brook, Illinois. Among Inland's subsidiaries is the largest
property management firm in Illinois and one of the largest commercial real
estate and mortgage banking firms in the Midwest.
Mr. Goodwin has served as Director of the Avenue Bank of Oak Park and as a
Director of the Continental Bank of Oakbrook Terrace. He was Chairman of the
Bank Holding Company of American National Bank of DuPage. Currently he is the
Chairman of the Board of Inland Mortgage Investment Corporation.
Mr. Goodwin has been in the housing industry for more than 28 years, and has
demonstrated a lifelong interest in housing-related issues. He is a licensed
real estate broker and a member of the National Association of Realtors. He
has developed thousands of housing units in the Midwest, New England, Florida,
and the Southwest. He is also the author of a nationally recognized real
estate reference book for the management of residential properties.
Mr. Goodwin has served on the Board of the Illinois State Affordable Housing
Trust Fund for the past 6 years. He is an advisor for the Office of Housing
Coordination Services of the State of Illinois, and a member of the Seniors
Housing Committee of the National Multi-Housing Council. Recently, Governor
Edgar appointed him Chairman of the Housing Production Committee for the
Illinois State Affordable Housing Conference. He also served as a member of
the Cook County Commissioner's Economic Housing Development Committee, and he
was the Chairman of the DuPage County Affordable Housing Task Force. The 1992
Catholic Charities Award was presented to Mr. Goodwin for his work in
addressing affordable housing needs. The City of Hope designated him as the
1980's Man of the Year for the Illinois construction industry. In 1989, the
Chicago Metropolitan Coalition on Aging presented Mr. Goodwin with an award in
recognition of his efforts in making housing more affordable to Chicago's
Senior Citizens. On May 4, 1995, PADS, Inc. (Public Action to Deliver Shelter)
presented Mr. Goodwin with an award, recognizing The Inland Group as the
leading corporate provider of transitional housing for the homeless people of
DuPage County. Also, Mr. Goodwin serves as Chairman of New Directions Housing
Corporation, a leading provider of affordable housing in northern Illinois.
Mr. Goodwin is a product of Chicago-area schools, and obtained his Bachelor's
and Master's Degrees from Illinois Universities. Following graduation, he
taught for five years in Chicago Public Schools. His commitment to education
has continued through his work with the Better Boys Foundation's Pilot
Elementary School in Chicago, and the development of the Inland Vocational
Training Center for the Handicapped located at Little City in Palatine,
Illinois. He personally established an endowment which funds a perpetual
scholarship program for inner-city disadvantaged youth. In 1990 he received
the Northeastern Illinois University President's Meritorious Service Award.
Mr. Goodwin holds a Master's Degree in Education from Northern Illinois
University, and in 1986, he was awarded an Honorary Doctorate from Northeastern
Illinois University College of Education. More than 12 years ago, under Mr.
Goodwin's direction, Inland instituted a program to train disabled students in
the workplace. Most of these students are still employed at Inland today, and
Inland has become one of the largest employers of the disabled in DuPage
County. He has served as a member of the Board of Governors of Illinois State
Colleges and Universities, and he is currently a trustee of Benedictine
University. He was elected Chairman of Northeastern Illinois University Board
of Trustees in January 1996.
-37-
Mr. Goodwin served as a member of Governor Jim Edgar's Transition Team. In
1988 he received the Outstanding Business Leader Award from the Oak Brook
Jaycees and has been the General Chairman of the National Football League
Players Association Mackey Awards for the benefit of inner-city youth. He
served as the recent Chairman of the Speakers Club of the Illinois House of
Representatives. In March 1994, he won the Excellence in Business Award from
the DuPage Area Association of Business and Industry. Additionally, he was
honored by Little Friends on May 17, 1995 for rescuing their Parent-Handicapped
Infant Program when they lost their lease. He was the recipient of the 1995
March of Dimes Life Achievement Award and was recently recognized as the 1997
Corporate Leader of the Year by the Oak Brook Area Association of Commerce and
Industry.
ROBERT H. BAUM (age 53) has been with The Inland Group, Inc. and its
affiliates since 1968 and is one of the four original principals. Mr. Baum is
Vice Chairman and Executive Vice President-General Counsel of The Inland Group,
Inc. In his capacity as General Counsel, Mr. Baum is responsible for the
supervision of the legal activities of The Inland Group, Inc. and its
affiliates. This responsibility includes the supervision of The Inland Law
Department and serving as liaison with all outside counsel. Mr. Baum has
served as a member of the North American Securities Administrators Association
Real Estate Advisory Committee and as a member of the Securities Advisory
Committee to the Secretary of State of Illinois. He is a member of the
American Corporation Counsel Association and has also been a guest lecturer for
the Illinois State Bar Association. Mr. Baum has been admitted to practice
before the Supreme Court of the United States, as well as the bars of several
federal courts of appeals and federal district courts and the State of
Illinois. He received his B.S. Degree from the University of Wisconsin and his
J.D. Degree from Northwestern University School of Law. Mr. Baum has served as
a director of American National Bank of DuPage. Currently, he serves as a
director of Westbank, and is a member of the Governing Council of Wellness
House, a charitable organization that provides emotional support for cancer
patients and their families.
G. JOSEPH COSENZA (age 53) is a Director and Vice Chairman of The Inland
Group, Inc. Mr. Cosenza oversees, coordinates and directs Inland's many
enterprises and, in addition, immediately supervises a staff of eight persons
who engage in property acquisition. Mr. Cosenza has been a consultant to other
real estate entities and lending institutions on property appraisal methods.
Mr. Cosenza received his B.A. Degree from Northeastern Illinois University and
his M.S. Degree from Northern Illinois University. From 1967 to 1968, he
taught at the LaGrange School District in Hodgkins, Illinois and from 1968 to
1972, he served as Assistant Principal and taught in the Wheeling, Illinois
School District. Mr. Cosenza has been a licensed real estate broker since 1968
and an active member of various national and local real estate associations,
including the National Association of Realtors and the Urban Land Institute.
Mr. Cosenza has also been Chairman of the Board of American National Bank of
DuPage, and has served on the Board of Directors of Continental Bank of
Oakbrook Terrace. He is presently Chairman of the Board of Westbank in
Westchester, Illinois.
-38-
ROBERT D. PARKS (age 53) is Director of The Inland Group, Inc., President,
Chairman and Chief Executive Officer of Inland Real Estate Investment
Corporation and President, Chief Executive Officer, Chief Operating Officer and
Affiliated Director of Inland Real Estate Corporation.
Mr. Parks is responsible for the ongoing administration of existing investment
programs, corporate budgeting and administration for Inland Real Estate
Investment Corporation. He oversees and coordinates the marketing of all
investments and investor relations.
Prior to joining Inland, Mr. Parks was a school teacher in Chicago's public
schools. He received his B.A. degree from Northeastern Illinois University and
his M.A. degree from the University of Chicago. He is a registered Direct
Participation Program Principal with the National Association of Securities
Dealers, Inc., and he is a member of the Real Estate Investment Association and
a member of NAREIT.
NORBERT J. TREONIS (age 46) joined The Inland Group, Inc. and its
affiliates in 1975 and he is currently Chairman and Chief Executive Officer of
The Inland Property Management Group, Inc. and a Director of The Inland Group,
Inc. He serves on the Board of Directors of all Inland subsidiaries involved
in the property management, acquisitions and maintenance of real estate,
including Mid-America Property Management Corporation, and Metropolitan
Construction Services, Inc. Mr. Treonis is charged with the responsibility of
the overall management and leasing of all apartment units, retail, industrial
and commercial properties nationwide.
Mr. Treonis is a licensed real estate broker. He is a past member of the Board
of Directors of American National Bank of DuPage, the Apartment Builders and
Managers Association of Illinois, the National Apartment Association and the
Chicagoland Apartment Association.
Mr. Treonis has been the Chairman of the Board of Directors of Inland
Commercial Property Management, Inc. since its formation in 1994.
CATHERINE L. LYNCH (age 38) joined Inland in 1989 and is the Treasurer of
Inland Real Estate Investment Corporation. Ms. Lynch is responsible for
managing the Corporate Accounting Department. Prior to joining Inland, Ms.
Lynch worked in the field of public accounting for KPMG Peat Marwick since
1980. She received her B.S. degree in Accounting from Illinois State
University. Ms. Lynch is a Certified Public Accountant and a member of the
American Institute of Certified Public Accountants and the Illinois CPA
Society. She is registered with the National Association of Securities Dealers
as a Financial Operations Principal.
PAUL J. WHEELER (age 44) joined Inland in 1982 and is currently the
President of Inland Property Sales, Inc., the entity responsible for all
corporately owned real estate. Mr. Wheeler received his B.A. degree in
Economics from DePauw University and an M.B.A. in Finance/Accounting from
Northwestern University. Mr. Wheeler is a Certified Public Accountant and
licensed real estate broker. For three years prior to joining Inland, Mr.
Wheeler was Vice President/Finance at the real estate brokerage firm of Quinlan
& Tyson, Inc.
-39-
ROBERTA S. MATLIN (age 52) joined Inland in 1984 as Director of Investor
Administration and currently serves as Senior Vice President-Investments.
Prior to that, Ms. Matlin spent 11 years with the Chicago Region of the Social
Security Administration of the United States Department of Health and Human
Services. As Senior Vice President-Investments, she directs the day-to-day
internal operations of the General Partner. Ms. Matlin received her B.A.
degree from the University of Illinois. She is registered with the National
Association of Securities Dealers, Inc. as a General Securities Principal.
MARK ZALATORIS (age 39) joined Inland in 1985 and currently serves as Vice
President of Inland Real Estate Investment Corporation. His responsibilities
include the coordination of due diligence activities by selling broker/dealers
and is also involved with limited partnership asset management including the
mortgage funds. Mr. Zalatoris is a graduate of the University of Illinois
where he received a Bachelors degree in Finance and a Masters degree in
Accounting and Taxation. He is a Certified Public Accountant and holds a
General Securities License with Inland Securities Corporation.
PATRICIA A. CHALLENGER (age 44) joined Inland in 1985. Ms. Challenger
serves as Senior Vice President of Inland Real Estate Investment Corporation in
the area of Asset Management. As head of the Asset Management Department, she
develops operating and disposition strategies for all investment-owned
properties. Ms. Challenger received her bachelor's degree from George
Washington University and her master's from Virginia Tech University. Ms.
Challenger was selected and served from 1980-1984 as Presidential Management
Intern, where she was part of a special government-wide task force to eliminate
waste, fraud and abuse in government contracting and also served as Senior
Contract Specialist responsible for capital improvements in 109 government
properties. Ms. Challenger is a licensed real estate broker, NASD registered
securities sales representative and is a member of the Urban Land Institute.
KELLY TUCEK (age 34) joined Inland in 1989 and is an Assistant Vice
President of Inland Real Estate Investment Corporation. As of August 1996, Ms.
Tucek is responsible for the Investment Accounting Department which includes
all public partnership accounting functions along with quarterly and annual SEC
filings. Prior to joining Inland, Ms. Tucek was on the audit staff of Coopers
and Lybrand since 1984. She received her B.A. Degree in Accounting and
Computer Science from North Central College.
CYNTHIA M. HASSETT (age 37) joined Inland in 1983 and was a Vice President
of Inland Real Estate Investment Corporation. Through August 1996, Ms. Hassett
was responsible for the Investment Accounting Department which includes all
public partnership accounting functions along with quarterly and annual SEC
filings. Prior to joining Inland, Ms. Hassett was on the audit staff of
Altschuler, Melvoin and Glasser since 1980. She received her B.S. degree in
Accounting from Illinois State University. Ms. Hassett is a Certified Public
Accountant and a member of the American Institute of Certified Public
Accountants.
VENTON J. CARLSTON (age 39) joined Inland in 1985 and is the Assistant
Controller of Inland Real Estate Investment Corporation where he supervises the
corporate bookkeeping staff and is responsible for financial statement
preparation and budgeting for Inland Real Estate Investment Corporation and its
subsidiaries. Prior to joining Inland, Mr. Carlston was a partnership
accountant with JMB Realty. He received his B.S. degree in Accounting from
Southern Illinois University. Mr. Carlston is a Certified Public Accountant
and a member of the American Institute of Certified Public Accountants and the
Illinois CPA Society. He is registered with the National Association of
Securities Dealers, Inc. as a Financial Operations Principal.
-40-
Item 11. Executive Compensation
The General Partner is entitled to receive a share of cash distributions, when
the cumulative preferred return in excess of 8% has been made to the Limited
Partners, and a share of profits or losses as described under the caption "Cash
Distributions" at page 44 and "Allocation of Profits or Losses" at pages 43 and
44 of the Prospectus, and at pages A-6 to A-9 of the Partnership Agreement,
included as an exhibit to the Prospectus, which is incorporated herein by
reference. Reference is also made to Note (4) of the Notes to Financial
Statements (Item 8 of this Annual Report) for a description of such
distributions and allocations for 1994.
The Partnership is permitted to engage in various transactions involving
Affiliates of the General Partner of the Partnership, as described under the
captions "Compensation and Fees" at pages 7 and 8 and "Conflicts of Interest"
at pages 9-11 of the Prospectus, and at pages A-11 through A-19 of the
Partnership Agreement, included as an exhibit to the Prospectus, which is
incorporated herein by reference. The relationship of the General Partner (and
its directors and officers) to its Affiliates is set forth above in Item 10.
The General Partner of the Partnership and its Affiliates may be reimbursed for
salaries and direct expenses of employees of the General Partner and its
Affiliates relating to the administration of the Partnership. In 1996, these
expenses amounted to $47,543, of which $2,752 was unpaid at December 31, 1996.
Affiliates of the General Partner earned $28,820 in management fees for the
year ended December 31, 1996 in connection with managing certain of the
Partnership's properties. All of these were paid prior to December 31, 1996.
-41-
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) No person or group is known by the Partnership to own beneficially more
than 5% of the outstanding Units of the Partnership
(b) The officers and directors of the General Partner of the Partnership
own as a group the following Units of the Partnership:
Amount and Nature
of Beneficial Percent
Title of Class Ownership of Class
---------------------- ------------------- -------------
Limited Partnership 165.44 Units Less than 1%
Units directly
No officer or director of the General Partner of the Partnership possesses
a right to acquire beneficial ownership of Units of the Partnership.
All of the outstanding shares of the General Partner of the Partnership are
owned by an Affiliate or its officers and directors as set forth above in
Item 10.
(c) There exists no arrangement, known to the Partnership, the operation of
which may at a subsequent date result in a change in control of the
Partnership.
Item 13. Certain Relationships and Related Transactions
There were no significant transactions or business relationships with the
General Partner, Affiliates or their management other than those described in
Items 10 and 11 above and Note (6) of the Notes to Financial Statements (Item 8
of this Annual Report).
-42-
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The Financial Statements listed in the index at page 14 of this Annual
Report are filed as part of this Annual Report.
(b) Exhibits. The following documents are filed as part of this report:
3 Amended and Restated Agreement of Limited Partnership and Amended
and Restated Certificate of Limited Partnership, included as Exhibits
A and B of the Prospectus dated August 3, 1987, as supplemented, are
incorporated herein by reference thereto.
4 Form of Certificate of Ownership representing interests in the
registrant filed as Exhibit 4 to Registration Statement on Form S-11,
File No. 33-13509, is incorporated herein by reference thereto.
28 Prospectus dated August 3, 1987, as supplemented, included in Post-
effective Amendment No. 4 to Form S-11 Registration Statement, File
No. 33-13509, is incorporated herein by reference thereto.
(c) Financial Statement Schedules.
Financial statement schedules for the years ended December 31, 1996,
1995 and 1994 are submitted herewith.
Page
----
Real Estate and Accumulated Depreciation (Schedule III)... 34
Schedules not filed:
All schedules other than those indicated in the index have been
omitted as the required information is inapplicable or the information
is presented in the financial statements or related notes.
(d) Reports on Form 8-K:
None.
No Annual Report or proxy material for the year 1996 has been sent to the
Partners of the Partnership. An Annual Report will be sent to the Partners
subsequent to this filing and the Partnership will furnish copies of such
report to the Commission when it is sent to the Partners.
-43-
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
INLAND'S MONTHLY INCOME FUND, L.P.
Inland Real Estate Investment Corporation
General Partner
By: Robert D. Parks
Chairman of the Board
and Chief Executive Officer
Date: March 24, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
By: Inland Real Estate Investment Corporation
General Partner
By: Robert D. Parks
Chairman of the Board
and Chief Executive Officer
Date: March 24, 1997
By: Patricia A. Challenger
Senior Vice President
Date: March 24, 1997
By: Kelly Tucek
Principal Financial Officer
and Principal Accounting Officer
Date March 24, 1997
By: Daniel L. Goodwin
Director
Date: March 24, 1997
By: Robert H. Baum
Director
Date: March 24, 1997
-44-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 357749
<SECURITIES> 0
<RECEIVABLES> 230011
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 591773
<PP&E> 19039521
<DEPRECIATION> 4496365
<TOTAL-ASSETS> 24276313
<CURRENT-LIABILITIES> 389289
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 19731451
<TOTAL-LIABILITY-AND-EQUITY> 24276313
<SALES> 20799
<TOTAL-REVENUES> 2787250
<CGS> 0
<TOTAL-COSTS> 119479
<OTHER-EXPENSES> 125422
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 154262
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 1869732
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1869732
<EPS-PRIMARY> 31.54
<EPS-DILUTED> 31.54
</TABLE>
