UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15 (d) of the
Securities
Exchange Act of 1934
For the Quarterly Period Ended March 31, 2000
or
[ ] Transition Report pursuant to Section 13 or 15 (d) of the
Securities
Exchange Act of 1934
For the transition period from to
Commission File #0-16790
Inland's Monthly Income Fund, L.P.
(Exact name of registrant as specified in its charter)
Delaware #36-3525989
(State or other jurisdiction (I.R.S. Employer
Identification Number)
of incorporation or organization)
2901 Butterfield Road, Oak Brook, Illinois 60523
(Address of principal executive office) (Zip
code)
Registrant's telephone number, including area code: 630-
218-8000
N/A
(Former name, former address and former fiscal
year, if changed since last report)
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
-1-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Balance Sheets
March 31, 2000 and December 31, 1999
(unaudited)
Assets
------
2000
1999
Current assets: ----
- ----
Cash and cash equivalents (Note 1).............. $ 1,773,072
1,299,088
Accounts and rents receivable................... 36,206
31,130
Interest receivable............................. 35,521
41,884
Current portion of mortgage loans receivable.... 52,060
64,776
Current portion of deferred rent receivable..... 4,818
4,818
Other assets.................................... 1,541
2,190
------------ -
- -----------
Total current assets.............................. 1,903,218
1,443,886
------------ -
- -----------
Investment properties (including acquisition
fees paid to Affiliates of $1,738,621)
(Notes 1 and 3):
Land............................................ 2,672,620
2,672,620
Buildings and improvements...................... 15,876,969
15,876,969
Tenant improvements............................. 793,112
793,112
------------ -
- -----------
19,342,701
19,342,701
Less accumulated depreciation................... 6,171,571
6,044,601
------------ -
- -----------
Net investment properties......................... 13,171,130
13,298,100
------------ -
- -----------
Other assets:
Mortgage loans receivable, less current portion. 4,188,352
5,302,485
Deferred loan fees (net of accumulated
amortization of $53,485 and $50,704 at
March 31, 2000 and December 31, 1999,
respectively) (Note 1)........................ 45,425
48,206
Deferred leasing fees (including $219,451
paid to Affiliates) (net of accumulated
amortization of $237,574 and $232,317 at
March 31, 2000 and December 31, 1999,
respectively) (Note 1)........................ 106,813
112,070
Deferred rent receivable, less current portion
(Notes 1 and 2)............................... 320,443
338,411
------------ -
- -----------
Total other assets................................ 4,661,033
5,801,172
Total assets...................................... $19,735,381
20,543,158
============
============
See accompanying notes to financial statements.
-2-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Balance Sheets
(continued)
March 31, 2000 and December 31, 1999
(unaudited)
Liabilities and Partners' Capital
---------------------------------
2000
1999
Current liabilities: ----
- ----
Accounts payable and accrued expenses........... $ 46,306
467
Accrued real estate taxes....................... 79,782
63,421
Distributions payable (Note 4).................. 1,057,530
177,761
Due to Affiliates (Note 3)...................... 9,309
878
Deposits held for others........................ 191,989
189,875
Prepaid rent.................................... 49,019
47,980
Current portion of deferred gain on sale of
investment property........................... 11,687
14,583
------------ -
- -----------
Total current liabilities......................... 1,445,622
494,965
Deferred loan fees................................ 21,353
28,080
Long-term debt.................................... 2,500,000
2,500,000
Deferred gain on sale of investment property,
less current portion............................ 1,249,623
1,559,942
------------ -
- -----------
Total liabilities................................. 5,216,598
4,582,987
Partners' capital (Notes 1, 3 and 4): ------------ -
- -----------
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,
59,285.65 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......................... 19,433,107
18,778,291
Cumulative distributions...................... (33,327,526)
(31,231,322)
------------ -
- -----------
14,555,026
15,996,414
------------ -
- -----------
Total Partners' capital........................... 14,518,783
15,960,171
------------ -
- -----------
Total liabilities and Partners' capital........... $19,735,381
20,543,158
============
============
See accompanying notes to financial statements.
-3-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Statements of Operations
For the three months ended March 31, 2000 and 1999
(unaudited)
2000
1999
Income: ----
- ----
Rental income (Notes 1 and 2)................... $ 514,126
511,917
Additional rental income........................ 11,683
15,310
Interest income................................. 127,493
166,650
Other income.................................... 12,654
2,341
------------ -
- -----------
665,956
696,218
------------ -
- -----------
Expenses:
Professional services to Affiliates............. 2,129
2,184
Professional services to non-affiliates......... 22,975
32,941
General and administrative expenses to
Affiliates.................................... 10,380
7,557
General and administrative expenses to
non-affiliates................................ 23,689
15,127
Property operating expenses to Affiliates....... 9,301
9,609
Property operating expenses to non-affiliates... 76,826
67,216
Interest expense to non-affiliates.............. 44,047
36,125
Depreciation.................................... 126,970
125,926
Amortization.................................... 8,038
6,414
------------ -
- -----------
324,355
303,099
------------ -
- -----------
Operating income.................................. 341,601
393,119
Gain on sale of investment property............... 313,215
145,558
------------ -
- -----------
Net income........................................ $ 654,816
538,677
============
============
Net income allocated to:
General Partner................................. -
- -
Limited Partners................................ 654,816
538,677
------------ -
- -----------
Net income........................................ $ 654,816
538,677
============
============
Net income per Unit allocated to Limited Partners
per weighted average Limited Partnership Units
of 59,285.65.................................... $ 11.05
9.09
============
============
See accompanying notes to financial statements.
-4-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Statements of Cash Flows
For the three months ended March 31, 2000 and 1999
(unaudited)
2000
1999
----
- ----
Cash flows from operating activities:
Net income...................................... $ 654,816
538,677
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of investment property........... (313,215)
(145,558)
Depreciation.................................. 126,970
125,926
Amortization.................................. 8,038
6,414
Changes in assets and liabilities:
Accounts and rents receivable............... (5,076)
(5,992)
Interest receivable......................... 6,363
2,667
Other current assets........................ 649
(496)
Deferred rent receivable.................... 17,968
12,011
Accounts payable and accrued expenses....... 45,839
29,964
Accrued real estate taxes................... 16,361
16,307
Due to Affiliates........................... 8,431
1,059
Unearned income............................. (5,688)
36,901
------------ -
- -----------
Net cash provided by operating activities......... 561,456
617,880
------------ -
- -----------
Cash flows from investing activities:
Principal payments received on mortgage
loans receivable.............................. 1,126,849
483,669
------------ -
- -----------
Net cash provided by investing activities......... 1,126,849
483,669
------------ -
- -----------
Cash flows from financing activities:
Cash distributions.............................. (1,216,435)
(557,505)
Deposits held for others........................ 2,114
47,894
Principal payments of long-term debt............ -
(10,773)
------------ -
- -----------
Net cash used in financing activities............. (1,214,321)
(520,384)
------------ -
- -----------
Net increase in cash and cash equivalents......... 473,984
581,165
Cash and cash equivalents at beginning of period.. 1,299,088
681,003
------------ -
- -----------
Cash and cash equivalents at end of period........ $ 1,773,072
1,262,168
============
============
Cash paid for interest............................ $ 29,042
36,212
============
============
See accompanying notes to financial statements.
-5-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
March 31, 2000
(unaudited)
Readers of this Quarterly Report should refer to the
Partnership's audited
financial statements for the fiscal year ended December 31,
1999, which are
included in the Partnership's 1999 Annual Report, as
certain footnote
disclosures which would substantially duplicate those contained in
such audited
financial statements have been omitted from this Report.
(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 Statement 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,
not including
the General Partner's contribution of $500. All of the holders
of these Units
were admitted to the Partnership. Inland Real Estate Investment
Corporation is
the General Partner. 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. 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 preparation of financial statements in conformity with
generally accepted
accounting principles 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.
In the opinion of management, the financial statements
contain all the
adjustments necessary, which are of a normal recurring
nature, to present
fairly the financial position and results of operations for
the periods
presented herein. Results of interim periods are not necessarily
indicative of
results to be expected for the year.
-6-
INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
March 31, 2000
(unaudited)
(2) Deferred Rent Receivable
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 decreases of $17,968 and $12,011
for 2000 and
1999, respectively, of rental income for the period of
occupancy for which
stepped rent increases apply and $325,261 and $343,229 in related
deferred rent
receivable as of March 31, 2000 and December 31, 1999,
respectively. These
amounts will be collected over the terms of the related leases
as scheduled
rent payments are made.
(3) 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. Such costs
are included in
professional services and general and administrative expenses to
Affiliates, of
which $9,309 and $878 was unpaid at March 31, 2000 and
December 31, 1999,
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 $9,301 and $9,609 for the three
months ended March
31, 2000 and 1999, respectively.
(4) Long-Term Debt
On April 30, 1999, the Partnership refinanced the existing
$1,700,000 loan
collateralized by the Rantoul Wal-Mart. The replacement loan is
for $2,500,000
and is collateralized by the Rantoul Wal-Mart and the Duncan
Wal-Mart. The
replacement loan bears an interest rate of 6.97% as compared
to an interest
rate of 9.75% on the original loan. The replacement loan will
require monthly
interest-only payments and will mature on April 30, 2004.
The Partnership
distributed excess refinancing proceeds to the limited
partners on June 10,
1999. At March 31, 2000, the fair market value of the mortgage
loan payable
approximated its carrying value.
(5) Subsequent Events
During April 2000, the Partnership paid a distribution of
$1,057,530 to the
Limited Partners, of which $885,000 represented a return of
capital.
-7-
Item 2. Management's Discussion and Analysis of Financial
Condition and
Results of Operations
Certain statements in this "Management's Discussion and Analysis
of Financial
Condition and Results of Operations" and elsewhere in this
quarterly report on
Form 10-Q 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; inability of borrower to meet financial
obligations; uninsured
losses; and potential conflicts of interest between the
Partnership and its
Affiliates, including the General Partner.
Liquidity and Capital Resources
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 total sales of 59,999 Units at $500 per Unit,
resulting in gross
offering proceeds of $29,999,500, not including the
General Partner's
contribution of $500. All of the holders of these Units have been
admitted to
the Partnership. The Partnership acquired seven
properties utilizing
$25,831,542 of capital proceeds collected. During 1994
and 1995, the
Partnership sold the thirty-eight six-unit condominium buildings
comprising the
Schaumburg Terrace condominium complex. Also, the Partnership
sold one of the
three lots adjacent to the Hillside Living Center during
September 1997. As of
March 31, 2000, cumulative distributions to Limited
Partners totaled
$33,327,526, including $2,095,863 of Supplemental Capital
Contributions from
the General Partner, which represents distributable cash
flow from the
properties. The Partnership repurchased 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.
As of March 31, 2000, the Partnership had cash and cash
equivalents of
$1,773,072 which includes approximately $179,700 for the payment
of real estate
taxes for Douglas and Hillside Living Centers. Since
December 1999, the
Partnership received prepayments on five of the twenty-four
remaining mortgage
loans receivable on the six-unit condominium buildings
comprising the
Schaumburg Terrace condominium complex. Repayment proceeds
from these
prepayments totaled approximately $1,114,000. A portion of
these repayment
proceeds was included in the distribution to the limited
partners on February
10, 2000. The Partnership intends to use the remaining balance
of such funds
for future distributions and working capital requirements.
The properties owned by the Partnership, along with the
interest received on
the Schaumburg Terrace mortgage receivables, are generating
sufficient cash
flow to meet 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.
-8-
On April 30, 1999, the Partnership refinanced the existing
$1,700,000 loan
collateralized by the Rantoul Wal-Mart. The replacement loan is
for $2,500,000
and is collateralized by the Rantoul Wal-Mart and the Duncan
Wal-Mart. The
replacement loan bears an interest rate of 6.97% as compared to
the interest
rate of 9.75% on the original loan. The replacement loan will
require monthly
interest only payments and will mature on April 30, 2004.
The Partnership
distributed excess refinancing proceeds to the limited
partners on June 10,
1999.
Results of Operations
As of March 31, 2000, the Partnership owned 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.
Since December, 1999, the Partnership received prepayments on
five of the
twenty-four remaining mortgage loans receivable on the six-
unit condominium
buildings comprising the Schaumburg Terrace condominium
complex which the
Partnership had sold during 1994 and 1995.
The gain on the sale of investment property recorded for the three
months ended
March 31, 2000 is the result of deferred gain from the
Schaumburg Terrace
condominium sales being recognized as cash is received on the
related financing
extended by the Partnership to the individual purchasers. The
increase in the
gain on the sale of investment property for the three months
ended March 31,
2000, as compared to the three months ended March 31, 1999,
is due to the
recognition of $310,293 of deferred gain from the prepayment
of five of the
twenty-four mortgage loans receivable.
Rental and additional income increased for the three months
ended March 31,
2000, as compared to the three months ended March 31, 1999, due
to an increase
in occupancy and rent rates at McHenry Plaza. As of
March 31, 2000,
approximately 6,159 square feet, representing 11% of the total
space at the
center, remains to be leased. The General Partner
continues to pursue
additional leases for this remaining space.
Interest income decreased for the three months ended March
31, 2000, as
compared to the three months ended March 31, 1999, due to
decreases in interest
income on the mortgage loans receivable as a result of prepayments
and due to a
decrease in interest rates on investments.
Professional services to non-affiliates decreased for the three
months ended
March 31, 2000, as compared to the three months ended March 31,
1999, due to a
decrease in legal services and accounting services.
-9-
General and administrative expense to Affiliates increased for the
three months
ended March 31, 2000, as compared to the three months ended March
31, 1999, due
to an increase in postage costs. General and administrative
expenses to non-
affiliates increased for the three months ended March 31, 2000,
as compared to
the three months ended March 31, 1999, due to an increase in state
taxes paid.
Property operating expenses to non-affiliates increased for the
three months
ended March 31, 2000, as compared to the three months ended March
31, 1999, due
to an increase in repair and maintenance expenses at McHenry
Plaza Shopping
Center. This increase was partially offset by a decrease
in grounds
maintenance expenses.
The following is a list of approximate occupancy levels for the
Partnership's
investment properties as of the end of each quarter during 1999
and 2000:
1999
2000
------------------------ ------------
- ------------
at at at at at at
at at
Properties 03/31 06/30 09/30 12/31 03/31 06/30
09/30 12/31
---------- ----- ----- ----- ----- ----- -----
- ----- -----
McHenry Plaza 79% 79% 79% 89% 89%
McHenry, Illinois
Douglas Living &
Retirement Center 100% 100% 100% 100% 100%
Mattoon, Illinois
Hillside Living Center 100% 100% 100% 100% 100%
Yorkville, Illinois
Scandinavian Health Spa 100% 100% 100% 100% 100%
Westlake, Ohio
Rantoul Wal-Mart 100% 100% 100% 100% 100%
Rantoul, Illinois
Duncan Wal-Mart 100% 100% 100% 100% 100%
Duncan, Oklahoma
PART II - Other Information
Items 1 through 5(b) are omitted because of the absence of
conditions under
which they are required.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
(27) Financial Data Schedule
(b) Reports on Form 8-K:
None
-10-
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.
INLAND'S MONTHLY INCOME FUND, L.P.
By: Inland Real Estate Investment
Corporation
General Partner
/S/ ROBERT D. PARKS
By: Robert D. Parks
Chairman
Date: May 11, 2000
/S/ PATRICIA A. DELROSSO
By: Patricia A. DelRosso
Senior Vice President
Date: May 11, 2000
/S/ KELLY TUCEK
By: Kelly Tucek
Principal Financial Officer and
Principal Accounting Officer
Date: May 11, 2000
-11-
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 1773072
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0
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